1. Part of Business’s paper，need to finish issue1（motivation and satisfaction）’s solution part，there should be 2 solutions，each one should analysis advantages and disadvantages，then write a preferred solutions（reference： possible solutions，relevant theories，recommendation of preferred solutions）
2. please cite paraphrase from textbook also with 1-2 academic resources
3. around 500 words
4. due day is tomorrow at 5 pm PDT.
5. I will give you the link of the textbook

There are 5 files. The first is the required information. The second one is the paper in the study’s case, the third one is the part1 for reference, we need to do part 2.  Screenshots are some information. 

Original

by: David Crawford

Revised by: Aurora Faundo / Fall 2019 1

C O U R S E C O M M . 2 9 2

‘MANAGEMENT AND ORGANIZATIONAL BEHAVIOUR’

TEAM PROJECT GUIDE AND INSTRUCTIONS

Introduction

The Team Project is based on the case study ‘_____________________’ the text of which is distributed

separately from this Guide and Instructions.

The purpose of a case study project is to help you to develop your skills in:-

 – analyzing an organizational situation;

 – identifying issues, problems and opportunities; and, where appropriate,

 – making recommendations for action and/or improvement.

In so doing, the project will enable you to combine theory and practice, by applying your course learning to a

‘real’ organization.

At the same time, this project is designed to help you to develop your teamwork skills, an area of skill that is

becoming increasingly important in the world of business and management, and in organizational life in general.

Your effective performance as a team member will therefore be an important part of this project, and will

count significantly towards your individualized project mark.

Your Task

Imagine you are a consultancy team, hired by company management to investigate and report on certain aspects

of organizational behaviour within this company. You are required to report to company Senior Management

Team on organizational behaviour issues.

Process

You must submit your analysis, findings and recommendations to the Senior Management Team at the company

in two separate formats, i.e.

 a progress report and final written management report (worth 190 marks); and

 an oral / visual in-class presentation (worth 60 marks).

The combined marks, out of 250, will then be converted to a percentage (i.e. out of 100), and this will be worth

25% of the overall grade for this course.

Guidance will be given in class on the required shape and format for both the report and the

presentation.

You will be working in teams of approximately five or six students. Each team member is required to

contribute an equal share of the total work involved in the project. On this basis (but only if this happens), it is

hoped to be able to award the same mark to all the members of a team. However, if any individual student

contributes less than a reasonably equal share of the work, that student’s mark will be reduced accordingly.

In this connection, the project will include a form of peer evaluation, whereby each student’s contribution will

be assessed by his/her team colleagues. Please remember, therefore, that your final (individual) project mark

will be partly influenced by your effectiveness as a team member.

Original by: David Crawford Revised by: Aurora Faundo / Fall 2019 2

CRITERIA AND REQUIREMENTS FOR THE ASSESSMENT OF THE

WRITTEN REPORTS

PART 1: PROGRESS REPORT due on ___________________________

– quantity of material…………………………. -10

– quality of material…………………………….- 10

– organization of material……………………….-5 _______

25 points

Email to your instructor at a.faundo@alexandercollege.ca on ____________________ using the subject:

Progress Report COMM 292 Friday or Saturday (name of group leader/point person), on letter size bond

paper, using font size 11-12 and using only either Calibri, Arial or Times New Roman fonts. One Progress

Report is to be emailed in for your team.

To ensure that you are on track and prepared for your deadlines, prepare a task assignment plan (who does what

and when to submit) for the instructor in your Progress Report as well as the three issues or problems identified

in the case, the causes of which and the related theories. Please follow report outline below and is approximately

1-4 pages.

Late submissions will be deducted 20% for each day beyond the due date. The report MUST include an emailed

report from the Writing and Learning Centre Commerce (WLC) tutor. Your instructor will not even read

your progress report without an accompanying WLC tutor report. One of your team members should be

designated to email this to your instructor in class on the date that it’s due. See course schedule for due date.

Last Name, First Name (all team members)

Task/Responsibilities (of each member) for

this Progress Review/Report

Task/Responsibilities (of each member) for

the final written report with due dates

Task/Responsibilities (of each member) for

the oral presentation with due dates

Introduction – facts about the case (who,

what, when, where)

Issue/problem 1 (in a statement of the

problem format)

What caused this issue/problem? (in a

sentence format)

1.

2.

3.

Related theories: Concept(s) and theory(ies)

you learned in class that you can relate to

this

issue and the causes of it.

Issue/problem 3 (in a statement of the

problem format)
What caused this issue/problem? (in a
sentence format)
1.
2.
3.
Related theories: Concept(s) and theory(ies)
you learned in class that you can relate to
this issue and the causes of it.

Issue/problem 2 (in a statement of the

problem format)
What caused this issue/problem? (in a
sentence format)
1.
2.
3.
Related theories: Concept(s) and theory(ies)

you learned in class that you can relate to this

issue and the causes of it.

mailto:a.faundo@alexandercollege.ca

Original by: David Crawford Revised by: Aurora Faundo / Fall 2019 3

CRITERIA AND REQUIREMENTS FOR THE ASSESSMENT OF THE

FINAL WRITTEN REPORT

PART 2: FINAL WRITTEN REPORT

Email to your instructor at a.faundo@alexandercollege.ca on ____________________ using the subject:

Final Written Report COMM 292 Friday or Saturday (name of group leader/point person), on letter size

bond paper, using font size 11-12 and using only either Calibri, Arial or Times New Roman fonts. One final

written report is to be emailed in for your team.

Late submissions will be deducted 20% for each day beyond the due date. The report MUST include an emailed
report from the Writing and Learning Centre Commerce (WLC) tutor. Your instructor will not even read
your progress report without an accompanying WLC tutor report. One of your team members should be
designated to email this to your instructor in class on the date that it’s due. See course schedule for due date.

– Executive Summary/Abstract………………………….. -10

– Introduction and Background ………………………… -10

– Identification of key points, issues, problems, etc………-20 ) within the

– Application and use of course material and other ) Main Body

academic material…………………………………………-30 ) of the

– Depth and detail of understanding demonstrated………-20 ) report

– Conclusions ………………………………………………-20

– Number, range and quality of sources consulted………-10

– Correct use of academic referencing/citation……………-10

– Quality of written English……………………………….-20

(grammar, spelling, tone, style)

– Quality of general presentation of report………………-10

(cover, layout, structure, spacing, fonts, etc.)

– Selection and use of a suitable name for your team………5

(originality, relevance for human resources management)

165 points

The length of the basic report should be within the range 10-12 pages, plus any appropriate appendices/addenda,

cover page, table of contents, and executive summary / abstract.

The report must contain the following features:

1. Be prepared on a computer and be submitted on single-sided standard-sized letter paper (8.5 x 11 in. (216
x 279 mm.)

2. Have a front cover, showing:- course title, course code, title of project, project team name and number,
names of the project team members, name of instructor, and date of submission.

3. Use double line-spacing, and have a wide left-hand margin.

4. Have a detailed ‘Contents’ page.

5. Have individually-numbered pages.

mailto:a.faundo@alexandercollege.ca

Original by: David Crawford Revised by: Aurora Faundo / Fall 2019 4

6. Have a clear and logical structure, using headings and sub-headings where appropriate.

7. Use the A.P.A citation system for the correct academic referencing of any published works referred to,
summarized, paraphrased, or quoted from. (See page 8 for more information.)

8. Be written in Times New Roman font style, with a font size of 12 or 11 (but you may, if you wish, use
different font styles and sizes for any headings and sub-headings only.

USING THE CASE ANALYSIS MODEL

The following represent the steps that you should take in working through your case. You will not necessarily

submit the evidence from each step in your report, but the analysis done at each step will provide the necessary

foundation upon which to write your report.

Step 1: Inventory of Facts Brief listing of key facts (people, places, events, dates, results,

etc.) in the case.

Step 2: Statement of Problem(s) Concise statement of major problem(s) / issues in the case;

Problems /issues stated as things to be corrected or resolved.

Group any related problems together.

Step 3: Analysis of Causes Identification and analysis of all possible causes of the

problem(s) / issues in the case.

Step 4: Theory Application l Identification of all theories or models that might apply to these

problems/ issues and their causes.

Step 5: List of Possible Solutions Identification of possible solutions to each problem / issue as

stated; what objectives are achieved with each solution?

Step 6: Justification of Preferred Presentation of recommended solution(s) and justification for

Solution your choice(s). You should not present every possibility; rather

you should limit yourself to presenting the most convincing,

cohesive solution(s).

Step 7: Evaluation of Preferred What are the implications (positive and negative consequences

Solution of your decision(s)?

Step 8: Theory Application ll Which theories are most applicable in this situation? Why? Use

the theories to help you justify your choice of solution(s).

Step 9: Implementation How would you introduce and carry out your solution(s)?

(if required) Provide specific action plans for short- and long-term.

In producing your report, you must explain your findings, justify the points you make by citing supporting

evidence from the case text, and explain any assumptions that you make. Your analysis, findings and

recommendations must be related to appropriate theories, models, concepts and principles of management and

organizational behavior included in the course textbook, course hand-out notes, and any other suitable (i.e.

relevant and credible) sources.

Original by: David Crawford Revised by: Aurora Faundo / Fall 2019 5

Late submissions will be deducted 20% for each day beyond the due date. You may include charts, graphs and

diagrams that are relevant to your discussion to emphasize points in your document. This part of your project

MUST include the emailed report from the Writing and Learning Centre Commerce tutor. No report from

the WLC tutor means a 50% deduction. One of your team members should be designated to email this to your

instructor in class on the date that it’s due. Please follow report outline below. The final written paper is worth

165 marks. See course schedule for due date.

Recommended format and contents for the final written report:

Page Contents Description of Contents Remarks

1 Cover Page COMM 292 Section Management and Organizational Behaviour

Team Project for Case Title

Team name: _____________________

Team members: Last Name, First Name of all team members

2 Table of Contents Heading: Table of Contents

Contents per page with equivalent page numbers including

appendices and references

3 Executive

Summary

Heading: Executive Summary

A one-page summary of your entire paper’s contents, from

introduction all the way to your conclusion, providing specific

details of the contents.

4 Introduction Heading: Introduction (approximately 1-1.5 pages)

Refer to inventory of facts in the case analysis model

5-12 Contents Headings according to how it was recommended in your Progress

Review (please follow APA in-text citation, with running head, in-

text citations and referencing)

Issues

Causes

Relevant Theories

Alternative/Possible Solutions with Advantages and

Disadvantages

Preferred Solution(s) and Justifications

Relevant Theories (if applicable)

Recommendation and Implementation of your Preferred

Solution

Please note that you should write the report using detailed

discussions and in a report-paragraph format. Use bullet points

only if necessary. Figures, graphs and tables may be included for

as long as it makes sense in your discussion. Do not simply copy

and paste a figure, graph or table you learned from the lecture,

rather personalize it according to your how it applies to your case

discussions.

12 Conclusion Heading: Conclusion ((approximately 1-1.5 pages)

A brief summary of your issues, solutions and recommendations

Original by: David Crawford Revised by: Aurora Faundo / Fall 2019 6

13 References Heading: References (please follow APA referencing style)

– minimum of 3 academic references required (A MUST)

14+ Appendices Heading: Appendices

 Include your task assignment (who did what including %
contribution to the overall work)

 Tutor reports of your visits to the Writing and Learning Centre
(A MUST)

 Include any other documents that you identified as important
to this report

CRITERIA AND REQUIREMENTS FOR THE ASSESSMENT OF THE

IN-CLASS ORAL/VISUAL PRESENTATION

PART 3: IN-CLASS ORAL/VISUAL PRESENTATION scheduled on _______________________

ASSESSMENT CRITERIA

Criterion Example Aspects Marks Available

Professionalism Appearance; co-ordination; impact 10

Content Quality; relevance; effectiveness 10

Structure and Sequence Appropriate organization of material into

sections and sub-sections; sequencing

of material 5

Time Management Suitable time allocations; keeping within time limit 5

Quality of Delivery Tone, clarity, confidence, volume, pace of speech;

maintaining eye contact with audience 10

Visual Aids Quality of design; value of content; appropriate use 10

Creativity The inclusion of something different/unusual/unique 10

Total Marks 60

Each presentation must be timed to last within the range 12 to 15 minutes.

Each student must take part in, and make an active and approximately equal contribution to his / her team’s

presentation. The ‘audience’ for each presentation will consist of the Course Instructor (representing the Chief

Executive Officer), and all the members of the other student project teams in the class (representing other

members of the company’s Senior Management Team).

A whiteboard (with marker pens) and a computer/projection facility will be available in the classroom for

students to use during their presentation.

Every project team is strongly encouraged to integrate the use of some visual media into their presentation, as

this will almost certainly enhance both the quality and impact of their presentations and result in a higher

mark being awarded. If you include a video, please limit it to only 1. It should be less than 2 minutes long.

Your presentation should not exceed 15 minutes. You may be cut off when you go over the time limit.

Original by: David Crawford Revised by: Aurora Faundo / Fall 2019 7

An average of 10-15 slides is suggested for your oral presentation since there is a time limit. You will decide on

what contents of written report you would like to include in your PPT slides but must include all of the major

topics as outlined above. Your goal is to share your research in a manner that will be understood and appreciated

by your audience, which includes your instructor. Do not copy and paste your written paper content to your PPT

slides. Instead, use bullet points to summarize the important points. Use pictures and graphs as necessary. Your

last slide must include your references, using APA format, including that of pictures and videos used in your

presentation.

Don’t read the slides. You will immediately loose marks. Talk about your topic. All group members should

present, assigning one member of the team to be in-charge of the PPT presentation. This is a business

presentation so presenters are expected to dress professionally during your scheduled presentation.

Every team is also encouraged to include a creative element in their presentation. Such creativity normally

enhances the impact and uniqueness of the presentation, and results in a higher mark being awarded. It is

suggested that you check the suitability of your creative ideas with your Instructor, in advance of the

presentations.

At the time of their presentation, each project team must submit, to the Course Instructor, a print-out of any

visual aids used in their presentation, so that it can be referred to by the Instructor when the presentation is

subsequently being assessed, 2 slides per page, black and white copy.

Any team requiring assistance with the preparation and / or setting up of their presentation should notify the

Course Instructor of their needs by e-mail or in person as soon as possible and, in any event, not later than

________________.

ACADEMIC REFERENCING, AVOIDING PLAGIARISM,

AND LEGITIMATE SOURCES OF HELP

General Points

Normal academic rules about using, quoting, summarizing, or referring to published work, and avoiding

plagiarism, will apply. All material taken from other sources that you use in any of these ways must be correctly

referenced in accordance with one of the following officially recognized and accepted systems:-

The A.P.A. (American Psychological Association) style

Guidance for using this particular systems is available through attending an A.PA. Citation Workshop run by the

Alexander College Writing and Learning Centre. Guidance is also available at Purdue University’s On-Line

Writing Lab at:-

http://owl.english.purdue.edu/owl/

and from the Alexander College Librarians and the tutors of the College’s Writing and Learning Centre.

Referencing of Class Notes

You may wish to quote from, summarize, or refer to material taken from the following sources:-

A class hand-out note, in which the original source of the material is cited.

A class hand-out note with no specific reference shown.

Notes that you yourself wrote from a lecture you attended.

Original by: David Crawford Revised by: Aurora Faundo / Fall 2019 8

It is, of course, totally acceptable to do this, and you are encouraged to do so. However, even these sources should

also be properly cited, and there are correct ways of doing it.

Further Help

For further help with this aspect of your work, and with other aspects of the Team Project, you should consult only

the following:- your Course Instructor, staff of the College’s Student Writing and Learning Centre, and the

College Librarians. AS A REQUIREMENT OF THIS PROJECT, EACH TEAM MUST FULFIL AT

LEAST ONE COMPLETE APPOINTMENT AT THE WRITING AND LEARNING CENTRE.

If you wish to obtain help from anyone other than the above, you must obtain approval in advance from your

Course Instructor. IF IT IS FOUND THAT A TEAM, OR ANY MEMBER(S) OF A TEAM, OBTAINED

HELP FROM AN EXTERNAL SOURCE WITHOUT SUCH PRIOR APPROVAL, THAT TEAM IS

LIKELY TO BE AWARDED A MARK OF ‘ZERO’ FOR THE PROJECT.

Important Warning

Please note that the use of other people’s work/material without proper referencing constitutes plagiarism; this is

a serious academic offence which in, accordance with College policy, is likely to result in a mark of ‘zero’ and

possible additional penalties.

TEAM PROJECT – PEER EVALUATION FORM

TEAM NUMBER _______ LEADER’S NAME_________________________

Please indicate below whether, in your opinion, equal or differing marks should be awarded to the members of

your team in respect of the team project. You may decide that each member deserves an equal share of the

mark, in which case each team member would receive a peer evaluation of “1.00.” Alternatively, you might

feel that some members of the team deserve less than 1.00, while others deserve more than 1.00. Whatever

marks you are recommending, the sum of the evaluations for all members on your form must be equal to the

total number of members in your team. Please ensure that you include a rating for yourself, as part of this

process.

Names of Team Members Your Recommended Initialed by Person

(alphabetical order of surname) Proportion of the Mark Being Evaluated

___________________________ _______ __________

___________________________ _______ __________

___________________________ _______ __________

___________________________ _______ __________

___________________________ _______ __________

___________________________ _______ __________

If you have awarded a peer evaluation of less than 0.90 to any member(s) of your team, please briefly explain,

below, their behaviour(s) that caused you to do this:-

___________________________________________________________________________________

Original by: David Crawford Revised by: Aurora Faundo / Fall 2019 9

Peer Evaluation Criteria

In deciding the peer evaluation marks you wish to award to the members of your team, it is suggested that you

use the following performance criteria as a guide:-

Participation

– attends team meetings; takes part in discussions and decision-making.

Emotional Support

– helps to support, maintain and enhance team spirit and morale.

Collaboration

– co-operates fully and effectively with other team members; shows flexibility and a and adaptability;
helps to make it possible for all team members to make a fair contribution.

Communication
– communicates clearly and effectively with other team members; provides timely and constructive
criticism and feedback; responds promptly to communication from other team members.

Attitude

– shows enthusiasm for the project; has a positive approach to the work; is able to give and receive
criticism in a constructive manner.

Organization

– is effective in planning his/her own work, prioritizing tasks and managing time; shares information and
ideas in a logical and coherent manner.

Role Fulfillment
– meets all deadlines; delivers high-quality work on, or ahead of, time; meets all assigned responsibilities.

Notes:-

 Your peer evaluation should take into account all the work undertaken in the preparation and production of
your team’s written report, and in preparing and delivering your team’s in-class presentation.

 Your Instructor will be responsible for determining each individual’s final mark for the project, and will
be the final arbiter in case of any disagreement.

 Your completed peer evaluation form must be handed in to your Instructor, together with those of your team
colleagues, by the start of the final class session on _____________________

 Failure to hand in your completed peer evaluation form on time will result in a penalty in the form of a
deduction from your individual project score of five percentage points; don’t let this happen to you!

REQUIREMENTS FOR EFFECTIVE TEAMWORK

The success of any team depends on the commitment and effective contributions of all its members. This

principle applies to all forms of team activity in all types of context, whether it be in business, sport, adventure,

education, charity, community, entertainment, and even emergency and disaster relief.

Working in a team gives you an opportunity to make a worthwhile and satisfying contribution to something

bigger than you could hope to achieve on your own. It also gives you an opportunity to learn from other people

– your team colleagues – as you work together on your task.

Original by: David Crawford Revised by: Aurora Faundo / Fall 2019 10

While working on this Team Project, please keep the following important points in mind:

1. Remember at all times that this is a team project. Throughout the project, you are required to work as an
effective member of your team. This means that you must make an equal contribution to the operation

and output of your team. The final page of this Briefing Document (the back of the peer evaluation form)

outlines some of the specific ways in which you can contribute.

2. Only work that represents the efforts of your team as a whole will be accepted for assessment. Any
student(s) who disengage(s) from their team and attempt(s) to submit a separate piece of work will

automatically receive a mark of ‘zero’ for the project.

3. All the members of each team will be held accountable both individually and collectively for the work
they submit for assessment. For instance, if any part of the project is plagiarized, all the members of that

team will receive a mark of ‘zero.’

4. It is not teamwork to just divide the project between you, with each member producing a part, and then to
simply add those parts together and submit them as one piece of work. While it is acceptable and often

practical to begin in this way, you must then work together to check and improve each part collectively

as a team, to enhance the overall quality and cohesiveness. Finally, all team members should be

reasonably satisfied with the work, and accept ownership of it and responsibility for it.

5. As part of the Course Contract signed by students at the start of this course, every student agreed to
make a full and equal contribution to the Team Project (refer to your copy of the Contract).

6. If any student is failing to fulfill his/her responsibilities to the team, the other team members should
draw this to the attention of the student concerned as soon as possible, and help and encourage that

student to become an equal contributor. If this should prove unsuccessful, the team should then notify

the Instructor at the earliest opportunity (do not wait until the final week of the project!).

7. As there are students with different first languages in each team, it is essential that everyone speaks only
in English during all team meetings, so that everyone has an equal opportunity to understand and

participate.

All in a Day’s Work

Stan was successful Operations Manager at Bev’s Brewery. He had helped the small brewery grow from a two-person startup in 2014 to a vibrant brew pub chain in three cities in Metro Vancouver.

Bev’s Brewery had its origins in Surrey, BC and now had teams of employees operating in Surrey, Vancouver and Chilliwack, BC. Surrey was the major hub of activity where the senior management team had their offices in space adjacent to the brew pub. Each pub operated independently, but the Surrey brew pub, brewed most of the beer. They had about 30 employees each at the brew pub and about 15 employees at head office. Most of the head office people handled administration such as technology, supply management, payroll and accounting and marketing. With its rapid growth over the past 5 years, the organization didn’t even have a published organization chart and sometimes even Stan didn’t know who the new people at head office were and how many employees were in each location. He reflected how it had been a long time since he had been given a bonus or training session. Ah, the good old days, he lamented. Now, he was just busy.

Bev’s Brewery was founded by Bev and Dave Kumar, sister and brother. They had grown up in Surrey and after both graduating from university with business degrees, though it would be exciting to launch their first business together. With the help of family and friends, they got a bank loan to establish the first brew pub in Surrey. They were inspired by their father Arvin’s, who had always home-brewed beer in the garage while they were growing up. They loved to watch him carefully, wash the bottles and then fill them up with a new amber concoction about every six months. They funny thing was that their dad didn’t even drink much beer, but he enjoyed making it and giving it away to his many friends. So, in the spirit of honouring their dad’s hobby, Bev and Dave thought the brew pub was an ideal start to their business endeavours.

Stan had been the first brew manager hired. He lived in “Bird Land”, a small community nestled high above the Fraser River in North Surrey. He and his family had lived there for over twenty years and when he heard about a new brew pub opening from a family friend, he leaped at the chance to help. He was an easy hire, with his many years of experience at the Molson Coors brewery which was rumoured to be moving out of Vancouver sometime in the next few years. He loved the short commute to work now and enjoyed working with Bev and Dave. He loved the friendly, family vibe of Bev’s Brewery.

Bev and Dave prided themselves with being “Theory Y” managers. That meant being there to support others to be their best. They also allowed managers to pretty much run the brew pubs independently with little oversight and focussed on supplying quality beer products, marketing, planning and expansion. Stan’s job was to make sure the operations ran smoothly.

It had been a busy six years of operations for Stan. Five of those years, had gone smoothly, but in the last year, Stan noticed that he was spending more and more time on phone issues and less time on actual operations. It started out as a petty disagreement, between the Vancouver and Surrey brew pubs. Vancouver was accusing Surrey of getting better service and attention. For example, Vancouver had run out of stock of some popular brews over the Christmas holidays, while Surrey had not. Vancouver blamed it on the poor relationship that Stan had with their manager, Tees Chan. Stan tried to explain to Tess, in an email, that it was nothing personal, but the grapevine said otherwise. The Vancouver brew pub attracted many employees of Asian or European ancestry, while Surrey had many employees from India, some even speaking Punjabi in the workplace. Chilliwack had a variety of staff, many of Scandinavian descent, and were managed by Ben Rand, who never seemed to say much. He just kept to himself and Stan assumed all was going well in Chilliwack.

They were definitely selling a lot of product in Chilliwack and it was growing rapidly from what Stan could see.

Stan didn’t care where you were from as long as you did your work effectively and he assumed Tess and Ben felt the same way.

The other friction Stan had to deal with was from older employees who complained to him that some of the new hires had their eyes on their phones instead of on customers. This was an issue across all locations. Stan thought that phones were useful and that some employees were just exaggerating the issue.

Bev’s Brewery made a point of engaging customers in an online app survey after every experience. Stan could not ignore the fact that customer satisfaction survey levels had been declining over the past year at all three locations. Additionally, the annual employee survey showed declining job interest and motivation amongst employees. “What was happening?”, thought Stan, “Can’t everyone just get along and get their work done? Isn’t that what’s required in a proper day’s work?” Stan grew increasing frustrated but didn’t want to worry Bev and Dave with these operations issues.

In the meantime, Bev and Dave were talking to Stan about expansion to online sales through a facility store which would be stablished in Chilliwack, due to the lower cost of real estate. They were even talking about hiring a new Operations Manager. That worried Stan. All the more reason, not to reveal some of the conflict issues going on. Little did he realize that Bev and Dave were thinking of promoting him to a new Senior Operations Manager role where he would be responsible for operations at both the brew pub and online facility. That would be a huge promotion.

It was apparent to Stan that the company culture was eroding and that it was affecting operations. Setting aside his anxiety of expansion and possibly being replaced, maybe even finding himself without a job, Stan realized that he would have to take action to solve the growing operational people problems. His main goal was to make sure the company could grow successfully, and he felt he owed it to Bev and Dave who had always trusted him so much.

Knowing that he didn’t have the experience or even the knowledge to get to the root causes, Stan has hired your team as Organizational Behabviour consultants to advise both him and as well as Bev and Dave on solutions to people problems plaguing the company. Your team needs to identify all of the issues and needs of company and make recommendations to assure its successful growth.

COMM 292A Final Written Report

Team Project: All in day’s Work

Team Name: Super Solver Squad

Team Members:

Freeman, Graham (10119144)

Gao, Huayi (Kristen, 10122043)

Zhang, Xinyue (Rebecca, 10122622)

Guo, Entong (Ino, 10119915)

Chen, Wei-Siang (Nicole, 10119027)

Table of contents:

· Abstract/Executive Summary…………………………………………………..3

· Introduction………………………………………………………………………..4

· Content …………………………………………………………………………….

1)Issues – Motivation and Satisfaction

– Communication and Conflicts

– Organizational Culture

2) Causes

3)Alternative/Possible Solutions with advantages and disadvantages

– issue1

– issue2

– issue3

4) Preferred Solutions and Justifications

Recommendation and Implement of Preferred Solution

· Conclusion…………………………………………………………………………..

· References…………………………………………………………………………..

· Appendices………………………………………………………………………….

Abstract/Executive Summary:

Introduction:

Bev’s Brewery is a chain of brew pubs located in Metro Vancouver. Stan, the Operations Manager at Bev’s Brewery, has noticed that Customer satisfaction survey levels, and employee job interest and motivation have been dropping over the past year at every location and is seeking help to resolve the problems within the organization. The owners of the company, Bev and Dave Kumar, opened the first brew pub in Surrey, BC in 2014. Originally the work environment at Bev’s Brewery was friendly and everyone working there felt like a family. Bev and Dave had a very people-oriented approach to leadership, doing their best to be there for their employees. Over the past five years the business has grown rapidly and now has locations in Vancouver and Chilliwack as well as a head office next to the Surrey brew pub. The Surrey location has many Indian employees, Vancouver’s employees are largely of Asian and European background, and in Chilliwack there is a more diverse team including numerous workers with Scandinavian ancestry. With the rapid growth of the company the work environment has become busy and sometimes Stan has trouble keeping track of all the employees because there is no published company organization chart due to the rapid growth of the business. In order to focus more on the supply of quality beer products, marketing, planning, and expansion, Bev and Dave allowed Stan and the brew managers, Tess Chan and Ben Rand, to be given the freedom to run their locations independently with little supervision. In the past year Stan has been dealing with conflict between the Vancouver location, run by Tess, and the Surrey location, run by Stan. Stan and Tess have a poor relationship and Ben, the manager in Chilliwack, keeps to himself and talks very little. Stan assumes that all must be going well, and he assumes that Tess and Ben share his belief that it doesn’t matter where you’re from as long as you do your work well. Stan has also been receiving complaints from older employees at all three locations that some of the newer workers were on their phones when they should have been providing customer service. Stan doesn’t take the issue of employees spending too much time on cell phones very seriously because he thinks cell phones are useful. Stan is overwhelmed but chooses not to tell Bev and Dave about the problems within the company, partly due to them having mentioned they were considering hiring a new Operations Manager.

Issue 1:

The company has been facing declining customer satisfaction levels, and the job interest and motivation of employees is falling in all three locations. These two problems go hand in hand; if employees aren’t interested or motivated, they won’t be able to provide satisfactory customer service.

Causes

The causes of these problems are the conflict between some of the older and new employees and between the Vancouver and Surrey brew pubs, the poor leadership of the brew managers, and the disorganization within the company. Older employees at all three locations have been complaining to Stan that some of the new employees have been using their cell phones while working, when they should be focusing on providing customer service. Conflict like this will cause older employees to be unhappy at work and will affect their motivation. Employees focusing on their phones instead of customers will also explain some of the customer dissatisfaction. The conflict between the Surrey and Vancouver locations stems from the employees at Vancouver believing that Surrey is receiving better service and attention; this has caused a degree of job dissatisfaction in Vancouver. Leadership ability is crucial to ensure employees remain interested in their work and motivated to do it. The managers at Bev’s Brewery have become too task-oriented, expecting employees to work effectively and complete their work as the business has grown and become busier (McShane, Steen and Tasa, 2018, p.305). They are failing to provide an enjoyable work environment and are not listening to employees as well as they should. Stan demonstrates this by not taking the complaints of employees seriously. Because of its rapid growth, the company has become very disorganized. There is no published organization chart and because of this there has been no way to keep track of employees. Because of this, employees have stopped receiving raises and training sessions. Employees are not receiving a reward for their hard work and this impacts their motivation. Because there have not been training sessions, the quality of their work and customer service has been falling.

Related Theories

The two forms of managerial leadership are task-oriented and people-oriented leadership. According to this theory an effective manager enables employees to both improve their performance and well-being (McShane, Steen and Tasa, 2018, p.304). The brew managers at Bev’s Brewery have not balanced their leadership behaviour, focusing too much on task-orientation. The path-goal leadership theory expands upon managerial leadership with four different leadership behaviours: directive, supportive, participative, and achievement oriented (McShane, Steen and Tasa, 2018, p.307, 308). The personal attributes perspective of leadership states that an effective leader possesses certain character traits, these are personality, self-concept, leadership motivation, drive, integrity, knowledge of the business, cognitive and practical intelligence, and emotional intelligence (McShane, Steen and Tasa, 2018, p.312, 313). Stan showed a lack of integrity when he did not reveal to Bev and Dave there were problems within the company and Ben’s introversion demonstrates a personality not suited for leadership.

Solutions

-update policies, including those regarding the use of cell phones while at work

-major reorganization of the business, this will allow for raises and training, employees will feel like their efforts are being rewarded.

-Hiring a brew manager at Surrey location so Stan can focus more on his duties as Operations Manager, this would ease the conflict between Surrey and Vancouver since Stan may not favour Surrey if he’s not running the pub.

-Leadership training for the brew managers so they can better meet the needs of employees

Issue: Communication.

There is a severe lack of communication between the members of the management team of Bev’s Brewery.

Causes

The causes for this absence of communication are the poor communication skills possessed by the brew managers, the conflict between Stan and Tess, and the distribution of power within the company. Managers do not have human relation skills that they do not know how to lead, motivate, communicate and build and maintain relationships with their subordinates. It is important for managers to possess adequate communication skills, something the managers at Bev’s Brewery are lacking. Instead of attempting to speak with Tess in person to resolve an issue, Stan decided it best to send her an email. Ben Rand keeps to himself too much and says very little. Because of this, others may think he’s doing well even if he encounters difficulties. Stan and Tess dislike each other for reasons we are not fully aware of, but it could be in part due to the disagreement regarding Surrey receiving better service and attention than Vancouver, their poor relationship will have discouraged both of them from sharing information with each other. The freedom given to the Brew Pub managers to run their locations has led to them not communicating with each other as much as they should in order to share information and make changes. While Stan, being the Operations Manager, wants operations to be successful in all three locations, he may be biased to ensure the brew pub he manages, Surrey, to come first. Similarly, Tess and Ben will be only interested in the success of their locations, because of this they will not feel incentivized to share information with one another.

Related Theories

The organizational learning perspective states that for an organization to be effective it must acquire, share, use, and store valuable information (McShane, Steen, and Tasa, 2018, p.8). This is relevant to the issue because communication is essential to do these things. Task interdependence and team composition tells us the importance for team members to share materials, information, or expertise so that all members can do their jobs well(McShane, Steen, and Tasa, 2018, p.196,198). The members of the management team at Bev’s Brewery are independent and do not share with each other. Bev’s Brewery has a degree of decentralization as the authority to make formal decisions is held largely by the brew managers at each location (McShane, Steen, and Tasa, 2018, p.328). This is relevant to the independence of the managers. Bev’s Brewery has an organic organizational structure; there is a wide span of control, high decentralization, and low formalization as each location can be run how its manager sees fit (McShane, Steen, and Tasa, 2018, p.330).The departmentalization of Bev’s Brewery is a geographical divisional structure, one of the limitations of this structure is its reduced ability and sometimes motivation for knowledge to be shared with other divisions (McShane, Steen, and Tasa, 2018, p.334).

Solutions:

1. hold meetings regularly like once a month for managers to share information, report how their branches’ doing and problems that need to be solved.

2. Bonus / rewards for well being employees (salaries/ promotions)

3. Team building activities

4. Reduce the independence of the brew managers, requiring them to communicate more with Stan and the Owners

Problem 3: Organizational Culture

Another problem that Bev’s Brewery company has been facing is that the company culture has been gradually deteriorating across all of its brew pubs, which causes operational problems. The organization does not have a strengthening culture function to build an influential culture, such as a lack of social glue; this would lead to a decline in organizational performance and employee well-being.

Causes

There are two main reasons which lead to a decline in organizational culture strengthening. First, the values and assumptions have shifted away from what Bev and Dave Kumar had originally encouraged. The motivation that inspired Bev and Dave to establish the brew pub was appreciating their father’s hobby when they were growing up (All in a Day’s Work, p.1). Hence, working with family loves in Bev’s Brewery is the shared value that they are always trying to bring into the organizational dominant culture. However, Bev and Dave prefer to be “Theory Y” managers that allow the branch managers to operate their own branches independently but neglect to have connections with each other (All in a Day’s Work, p.2). This makes the company culture, which is working like a family in Bev’s Brewery, become hard to reach. Second, the subcultures in each location conflict with the dominant culture. Three branches attract different cultural backgrounds of employees who speak in different languages and working styles. Therefore, conflicting subcultures lead to the lack of cultural strengthening with the organization. It also increases the difficulty levels of carrying out the company culture.

Related Theories

A family doesn’t mean to have blood relations, but it’s a group of people who can perform as a unit. Working with family loves in the company means to understand, consider, and act in concert with each other. Stan, who was the first brew manager of the company, loved the atmosphere of friendly and felt like a family in Bev’s Brewery before. Bev and Dave pride themselves on being people-oriented and “being there to support others to be their best” (All in a Day’s Work, p.2). However, with the rapid expansion of the business and the increasing friction between branches, it seems the culture has begun to shift towards being outcome oriented rather team orientations. The owners have focused on expansion instead of their employees. They ignore the importance of emphasizing and maintaining the shared value in a company. Therefore, with high expectations in expanding and growing the company quickly, weakening in organizational culture causes those emerging operational problems among branch managers.

Conflicting subcultures cause the lack of cultural strengthening with the organization means that this company lacks the functions of strong cultures, such as control system, social glue, and sense-making. Organization’s control system influences the form of the organizational culture which can be misunderstood of employees’ job description and it would bring employees to different perspectives of organizational values. Take Bev’s Brewery for instance. Stan, the first hired manager in this company, starts spending more time fixing people’s problems than fixing operating problems, such as the relationship between two locations (All in a Day’s Work, p.2). Moreover, the employees might be less productive because Bev’s Brewery company doesn’t have the social glue, which “bonds people together” and makes the employees from different branches feel like they belong to this organization (McShane, Steen and Tasa, 2018, p.399). However, sense-making can help employees know about their job positions’ objectives more clearly and be more participate in their jobs. For example, a stronger company culture makes the employee “understand what is expected of them” (McShane, Steen and Tasa, 2018, p.400). So, even though there are conflicting subcultures in different branches, the company can be functioned well and operated productively as long as the sense-making of the corporate culture is strong, clear and definite enough.

Solutions:

1. Hire more people who are from different countries (people oriented)

2. Make a list of rules which let employees know how is organization going (build a strong function to strengthen the organizational culture)

Conclusion:

References:

Appendices:

By www.BookX.net

CANADIAN
ORGANIZATIONAL
BEHAVIOUR
STEVEN L. McSHANE
CURTIN UNIVERSITY AND UNIVERSITY OF VICTORIA
KEVIN TASA
YORK UNIVERSITY
SANDRA L. STEEN
UNIVERSITY OF REGINA

Canadian Organizational Behaviour
Tenth Edition
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Dedicated with love and devotion to Donna,
and to our wonderful daughters, Bryton and
Madison- S.L.M.
Dedicated to Ena and Vidya. Thanks-K. T.
For Aaron, Matt, and Jess-S.L.S.

About the Authors
iv
STEVEN L. MCSHANE Steven L. McShane is adjunct professor at the Curtin Graduate School of Bu.~ine~s (Australia)
and the Peter B. Gusta\’SOn School of Business, University of Victoria (Canada). He pt’eviously held the positions of
profes.~r at Simon Fra~r University Business School in Canada and professO!’ of management at the University of Western
Au.stralia Business School. He currently teache~ in the !MBA pmgram at the Antai College of Economics and Management
at Shanghai Jiao Tong University. Early in his career, Steve taught at Queen’s University in Canada. Steve has received
awards for his teaching quality and i1movation, and receives high ratings from students in Perth, Shanghai, Singapore,
Manila, and other places where he ha.~ taught. He is also a popular visiting speaker, having gi\-en dozens of invited talks atld
seminars in recent years to faculty and students in the United States, China, Canada, Malaysia, India, and other countries.
Steve earned his PhD from Michigan State University, where he specialized in organizational behaviour and
labour relations. He also holds a Master’s of Industrial Re lations from the University of Toronto and an undergradu-
ate degree from Queen’s University in Canada. Steve is a past president of the Administrative Sciences Association
of Canada and served as director of graduate programs in Simon Fraser University’s business faculty. He has
conducted executive programs with Nokia, TUV-SUD, Wesfarmers Group, Main Roads WA, McGraw-Hill,
ALCOA World A lumina Austral ia, and many other organizations.
Along with co-autho!’ing Canadian Organizarional Behaviour, Tenth Edition, Ste\-e is lead co-author of Organizational
Behavior, Eighth Edition (2018) and M: Organizational Behavior, Third Edition (2016) in the United States, and
Organisational Behaviour: Asia Pacific, Fifth Edition (2016) in that region. He is also co-author of editions or trans-
lations of his organizational behaviour book in C hina, India, Quebec, Taiwan, and Brazil. Steve ha~ published several
dozen articles and conference papers on workplace values, training transfer, organizationalleam ing, exit-voice-loyalty,
employee socialization, wrongful dismissal, media bias in business magazines, and other diverse topics.
Steve e njoys spending his leisure time hiking, swimming, body board surfing, canoeing, ski ing, and travelling
with his w ife and two daughters.
KEVIN TASA Dr. Kevin Tasa is an associate professor o f organizational behaviour at the Schulich School of
Business, York University. He is also the program director for the school’s Master of Management Progran1.
Prior to joining Schulich, he was an a.~sociate professor, and director of the MBA progran1, at the DeGroote
School o f Business, McMaster University. He is the recipient of the MBA Award for Teaching Excellence at both
Schulich and McMa.~ter. He is also an editorial board member of the Journal of Organizarional Behavior and
teaches courses in managerial negotiation and organizational behaviour at the masters and doctoral levels. With
Roy Lewicki, Bruce Barry, and David Saunders, he co-authored Essentials of Negotiarion, one o f the most w idely
used negotiation textbooks in Canadian bus iness schools.
Kevin received his doctO!’ate in organizational behaviour from the Rotman School of Management at the University
of Toronto. He also holds an MSc in health administration from the University of Toronto and a BComm from the
University of Saskatchewan. His research ha.~ been published in top-tier journals such a.~ Academy of Managemenr
Journal, Journal of Applied Psychology, Organiwrional Behavior and Human Decision Processes and Journal of
Organiwtional Behavior. Currently, his research focuses on team dynamics, such as boundary spanning and decision
making under stress, as well a~ the s ituational and psychological determinant~ of unethical behaviour in negotiation.
Finally, Kevin frequently teaches seminars on negotiation skills and conflict management, serving a.~ a faculty
member with institutions such a.~ the Physic ian Leadership Institute of the Canadian Medical Association, the
Schulich Executive Education Centre, Linamar Corporation, the University of Alberta Executive Education, and
the Hamilton Health Science Centre.
SANDRA L. STEEN Sandra L. Steen teaches in the Paul J. Hill School of Business and the Kenneth Levene
Graduate School of Business at the University of Regina. Sandra also leads executive education and professional
development sessions with the Centre for Management Development, Faculty o f Business Administration. Sandra
ha.~ an integrated education and background in both organizational behaviour and human resource management.
She received her MBA from the University of Regina and has more than 25 years of leading, managing, teaching,
and consulting across a wide range of organizations in the private, public, and not-for-profit sectors. Sandra teaches
in the undergraduate, Executive MBA, Ma.~ter of Human Resource Management, Master of Administration in Lead-
ership, and Levene MBA – International Business programs at the University of Regina. In addition to Canadian
Organizational Behaviour, Tenth Edition, Sandra is lead co-author with professors Raymond Noe (Ohio State
University), John R. Hollenbeck (Michigan State University), Barry Gerhart (University of Wisconsin-Madison),
and Patrick Wright (Cornell University) of Human Resource Management, Fourth Canadian Edition (2016).
Sandra is a Chartered Professional in Human Resources (CPHR) and a member of CPHR Sa.~katchewan. Sandra has
recei\-ed recognition for her teaching accomplishment~. including “Inspiring Teacher Award-Business Administration.”
In her leisure time, Sandra enjoys time at the lake with her husband Aaron, and their children, Man and Jess.

Brief Contents
PART ONE Introduction
Chapter 1 Introduction to the Field of Organizational Behaviour
PART TWO Individual Behaviour and Processes
Chapter 2 Individual Behaviour, Personality, and Values 31
Chapter 3 Perceiving Ourselves and Others in Organizations 65
Chapter 4 Workplace Emotions, Attitudes, and Stress 94
Chapter 5 Foundations of Employee Motivation 126
Chapter 6 Applied Performance Practices 158
PART THREE Team Processes
Chapter 7 Decision Making and Creativity 187
Chapter 8 Team Dynamics 215
Chapter 9 Communicating in Organizations 246
Chapter 10 Power and Inf luence in the Workplace 275
Chapter 11 Conf lict and Negotiation in the Workplace 305
Chapter 12 Leadership in Organizational Settings 335
PART FOUR Organizational Processes
Chapter 13 Designing Organizational Structures 362
Chapter 14 Organizational Culture 390
Chapter 15 Organizational Change 419
Additional Cases CA 1
Appendix Theory Building and Systematic Research Methods A1
Glossary GL1
Endnotes EN1
Index IN 1
v

Contents
Preface xiii
Acknowledgements xxv
~RT ONE Vntroduction
CHAPTER 1
Introduction to the Field of
Organizational Behaviour
LEARNING OBJECTIVES
Welcome to the Field of Organizational Behaviour! 2
The Field of Organizational Behaviour 2
Historical Foundations of Organizational Behaviour 4
Why Study Organizational Behaviour? 4
Contemporary Developments Facing Organizations 6
Technological Change 7
Globalization 8
Emerging Employment Relationships 8
Increasing Workforce Diversity 10
Global Connections 1.1: Leveraging the Diversity Dividend
at Canaccord Genuity 10
Anchors of Organizational Behaviour Knowledge 12
The Systematic Research Anchor 12
Debating Point: Is There Enough Evidence to Support
Evidence-Based Management? 1 3
The Multidisciplinary Anchor 13
The Contingency Anchor 14
The Multiple Levels of Analysis Anchor 14
Perspectives of Organizational Effectiveness 14
Open Systems Perspective 15
Organizational Learning Perspective 17
High-Performance Work Practices (HPWP)
Perspective 19
Stakeholder Perspective 21
Global Connections 1.2: 2 1 Days of Y’ello Care 22
Connecting the Dots: An Integrative Model of
Organizational Behaviour 23
The Journey Begins 25
Chapter Summary 25
KeyTerms 26
Critical Thinking Questions 26
Case Study The Fast-Fashion Success of Zara 27
Case Study Ancel ltd. 28
Web Exercise Diagnosing Organizational Stakeholders 29
Class Exercise It All Makes Sense? 29
Self-Assessment for Chapter 1 30
v i
( PART TWO ) Indiv idual Behaviour
and Processes
CHAPTER 2
Individual Behaviour, Personality,
and Values 31
LEARNING OBJECTIVES 31
MARS Model of Individual Behaviour and Performance 32
Employee Motivation 33
Abi lity 34
Role Perceptions 35
Situational Factors 35
Global Connections 2.1 : Iceland Foods Takes
MARS to Success 36
Types of Individual Behaviour 36
Task Performance 37
Organizational Citizenship 38
Counterproductive Work Behaviours 38
Joining and Staying with the Organization 38
Maintaining Work Attendance 38
Global Connections 2.2: The Doctor Is Ill .. . but Will
See You Now 39
Personality in Organizations 40
Personality Determinants: Nature versus Nurture 40
Five-Factor Model of Personality 4 1
Jungian Personality Theory and the Myers-Briggs
Type Indicator 43
Debating Point: Should Companies Use Personality Tests
to Select Job Applicants? 46
Values in the Workplace 46
Types of Values 47
Values and Individual Behaviour 48
Values Congruence 49
Ethical Va lues and Behaviour 50
Three Ethical Principles 50
Moral Intensity, Moral Sensitivity, and Situational Influences 51
Global Connections 2.3: Alcoa Executive Sets Ethical
Standard in Russia 51
Supporting Ethical Behaviour 53
Values Across Cultures 53
Individualism and Collectivism 54
Power Distance 55
Uncertainty Avoidance 55
Achievement-Nurturing Orientation 55
Global Connections 2.4: Cross-Cultural Hiccups at
Beam Suntory 56

Contents
Caveats about Cross-Cultural Knowledge 56
Cultural Diversity within Canada 57
Chapter Summary 58
KeyTerms 59
Critical Th inking Questions 59
Case Study SNC-Lavalin Group Inc 60
Case Study Ethics Dilemma Vignettes 61
Class Exercise Personal Values Exercise 63
Self-Assessments for Chapter 2 63
CHAPTER 3
Perceiving Ourselves and Others in
Organizations 65
LEARNING OBJECTIVES 65
Self-Concept: How We Perceive Ourselves 66
Self-Concept Complexity, Consistency, and Clarity 67
Self-Enhancement 69
Self-Verification 70
Self-Evaluation 71
The Social Self 72
Self-Concept and Organizational Behaviour 7 3
Perceiving the World around Us 73
Perceptual Organization and Interpretation 75
Specific Perceptual Processes and Problems 76
Stereotyping in Organizations 76
Attribution Theory 79
Self-Fulfilling Prophecy 80
Other Perceptual Effects 82
Improving Perceptions 83
Awareness of Perceptual Biases 83
Debating Point Do We Need Diversity Training Programs? 83
Improving Self-Awareness 84
Meaningfullnteraction 85
Global Mindset: Developing Perceptions across Borders 86
Developing a Global Mindset 87
Global Connections 3 .1: Developong a Global Mondset
through Immersion 88
Chapter Summary 89
KeyTerms 90
Critical Thinking Questions 90
Case Study Hy Dairies ltd. 91
Web Exercise Diversity & Stereotyping on Display in
Corporate Websites 9 2
Self-Assessments for Chapter 3 92
CHAPTER4
Workplace Emotions, Attitudes, and Stress 94
LEARNING OBJECTIVES 94
Emotions in the Workplace 95
Types of Emotions 96
Emotions, Attitudes, and Behaviour 96
How Emotions Influence Attitudes and Behaviour 98
Generating Positive Emotions at Work 99
vii
Debating Point HaWig Fun at Work Really a Good Idea? 100
Cognitive Dissonance 100
Emotions and Personality 10 1
Managing Emotions at Work 101
Emotional Display Norms across Cultu res 101
Global Connections 4 .1: Learning to Express Posotive
Emotions at Aeroflot 102
Emotional Dissonance 1 03
Emotionallntelllgence 103
Emotional Intelligence Outcomes and
Development 1 04
Job Satisfaction 106
Job Satisfaction and Work Behaviour 107
Job Satisfaction and Performance 108
Job Satisfaction and Customer Satisfaction 1 OS
Job Satisfaction and Business Ethics 110
Organizational Commitment 110
Consequences of Affective and Continuance
Commitment 11 0
Building Organizational Commitment 111
Work-Related Stress and Its Management 112
General Adaptation Syndrome 112
Consequences of Distress 113
Stressors: The Causes of Stress 114
Global Connections 4 .2: Chronic Work Overload in
China 115
Individual Differences in Stress 11 6
Managing Work-Related Stress 116
Chapter Summary 119
Key Terms 120
Critical Thinking Questions 120
Case Study Diana’s Dosappointment: The Promotoon
Stumbling Block 121
Case Study Rough Seas on the UNK650 122
Team Exercise Rankong Jobs on Theor EmotiOnal Labour 124
Self-Assessments for Chapter 4 124
CHAPTER 5
Foundations of Employee Motivation 126
LEARNING OBJECTIVES 126
Employee Engagement 127
Global Connections 5.1: DHL Express Employees
Get Engaged 128
Employee Drives and Needs 129
Individual Differences in Needs 130
Needs and Drives Theories 130

viii Contents
Maslow’s Needs Hierarchy Theory 130
Intrinsic and Extrinsic Motivation 132
Learned Needs Theory 133
Four-Drive Theory 134
Expectancy Theory of Motivation 137
Expectancy Theory in Practice 138
Organizational Behaviour Modification and
Social Cognitive Theory 139
Organizational Behaviour Modification 140
Global Connections 5.2: Airbaltic Motivates Employee
Involvement and Learning with Gamification 141
Social Cognitive Theory 142
Goal Setting and Feedback 143
Characteristics of Effective Feedback 144
Sources of Feedback 146
Evaluating Goal Setting and Feedback 146
Organizational Justice 147
Debating Point Does Equity Motivate More Than Equality? 148
Equity Theory 148
Global Connections 5.3: Pay Fairness Troubles at Foxconn 150
Procedural Justice 151
Chapter Summary 152
Key Terms 153
Critical Thinking Questions 153
Case Study Predicting Harry’s Work Effort 1 54
Case Study Barrie Super Subs 1 55
Class Exercise Needs Priority Exercise 156
Self-Assessments for Chapter 5 157
CHAPTER 6
Applied Performance Practices 158
LEARNING OBJECTIVES 15 8
The Meaning of Money in the Workplace 159
Financial Reward Practices 160
Membership- and Seniority-Based Rewards 160
Global Connections 6.1: Mega Reward for Tiens
Group Employees 161
Job Status-Based Rewards 162
Competency-Based Rewards 162
Performance-Based Rewards 163
Improving Reward Effectiveness 166
Link Rewards to Performance 166
Ensure that Rewards Are Relevant 166
Debating Point Is It Time to Ditch the Performance
Review? 166
Use Team Rewards for Interdependent Jobs 167
Ensure that Rewards Are Va lued 167
Global Connections 6.2: When Rewards Go Wrong 168
Watch Out for Unintended Consequences 168
Job Design Practices 169
Job Design and Work Efficiency 169
Global Connections 6.3: Job Specialization at the
Arsenal of Ven ice 170
Scientific Management 171
Problems with Job Specialization 171
Job Design and Work Motivation 171
Job Characteristics Model 172
Social and Information Processing Job Characteristics 17 4
Job Design Practices That Motivate 17 4
Empowerment Practices 176
Supporting Empowerment 177
Global Connections 6.4: Svenska Handelsbanken’s
Branch-Level Empowerment 177
Self-Leadersh ip Practices 178
Personal Goal Setting 179
Constructive Thought Patterns 1 79
Designing Natural Rewards 180
Self-Monitoring 180
Self-Reinforcement 180
Effectiveness of Self-Leadership 180
Personal and Situational Predictors of Self-Leadership 181
Chapter Summary 181
Key Terms 182
Critical Thinking Questions 182
Case Study YakkaTech ltd. 183
Team Exercise Is Student Work Enriched? 184
Self-Assessments for Chapter 6 186
( PART THREE) Team Processes
CHAPTER 7
Decision Making and Creativity 187
LEARNING OBJECTIVES 187
Rational Choice Paradigm of Decision Making 188
Rational Choice Decision-Making Process 189
Problems with the Rational Choice Paradigm 190
Identifying Problems and Opportunities 190
Problems with Problem Identification 190
Global Connections 7.1: A Famous Missed Opportunity 191
Identifying Problems and Opportunities More Effectively 192
Searching for, Evaluating, and Choosing Alternatives 192
Problems with Goals 192
Problems with Information Processing 192
Problems with Maximization 194
Evaluating Opportunities 194

Contents
The Role of Emotions and Intuition 195
Emotions and Making Choices 195
Intuition and Making Choices 196
Making Choices More Effectively 197
Implementing Decisions 197
Evaluating Decision Outcomes 198
Escalation of Commitment 198
Evaluating Decision Outcomes More Effectively 199
Creativity 199
The Creative Process 200
Characteristics of Creative People 20 1
Organizational Conditions Supporting Creativity 203
Activities That Encourage Creativity 203
Employee Involvement in Decision Making 205
Debating Point: Should Organizations Practise
Democracy? 205
Benefits of Employee Involvement 206
Global Connections 7.2: Brasilata, the Ideas Company 207
Contingencies of Employee Involvement 208
Chapter Summary 209
KeyTerms 210
Critical Thinking Questions 210
Case Study Employee Involvement Cases 211
Team Exercise Where in the World Are We? 213
Self-Assessments for Chapter 7 214
CHAPTER 8
Team Dynamics 215
LEARNING OBJECTIVES 215
Teams and Informal Groups 2 16
Informal Groups 218
Advantages and Disadvantages of Teams 218
The Challenges of Teams 2 19
A Model ofTeam Effectiveness 220
Organizational and Team Environment 220
Team Design Elements 22 1
Task Characteristics 22 1
Team Size 223
Team Composition 223
Team States 226
Team Norms 226
Team Cohesion 227
Team Efficacy 229
Team Trust 230
Team Processes 23 1
Internal Team Processes 231
External Team Processes 232
Team Development 232
Self-Directed Teams 235
Success Factors for Self-Directed Teams 235
Virtual Teams 235
Debating Point Are Virtual Teams More Trouble Than
They’re Worth7 236
Success Factors for Virtua l Teams 237
Team Decision Making 238
Constraints on Team Decision Making 238
Improving Creative Decision Making in Teams 239
Chapter Summary 241
Key Terms 242
Critical Thinking Questions 242
Case Study ArbreCorp Ltee 243
Team Exercise Team Tower Power 244
Self-Assessments for Chapter 8 245
CHAPTER 9
Communicating in Organizations 246
LEARNING OBJECTIVES 246
The Importance of Communication 248
A Model of Communication 249
Influences on Effective Encoding and Decoding 249
Communication Channels 250
Internet-Based Communication 251
Problems with Email 25 1
Workplace Communication through
Socia l Media 254
Nonverbal Communication 255
Choosing the Best Communication Channel 257
Social Acceptance 257
Media Richness 257
Communication Channels and Persuasion 259
Communication Barriers (Noise) 260
Information Overload 260
Cross-Cultural and Gender Communication 261
Nonverbal Differences across Cultures 262
Global Connections 9.1: Politely Waiting for Some
Silence 262
Gender Differences in Communication 263
Improving Interpersonal Communication 264
Getting Your Message Across 264
Active Listening 264
Improving Communication throughout the Hierarchy 265
Workspace Design 266
Internet-Based Organizational Communication 266
Direct Communication with Top Management 268
Communicating through the Grapevine 269
Grapevine Characteristics 269
ix

X Contents
Debating Point: Should Management Use the Grapevme to
Commun1cate to Employ~ of aNcm.._’C~ amoog ll-.: offk’l.’ stafL Tbc
head of oWe.: admin.is~tauon fll\:”llo.’~ lh:u ..-.mph.))\’\.~ nn: mbusing lhc orpni.:oMtoo ‘s $ick !caw
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cuu:…t.::r “‘ I~ tb.: t~•~eot itllj’llf’t.anl fl,l th1:.. l)’j’\.: u( Juli~ £xpla.n )\11.11 a u:.o’tll\:1.
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0111.’ 0t ntOt’l! IIUIO polLS linn:. (possibl) this I.’Ofi’4″U”Y) tO~() bankrupL Wbcn the Wrtln~Juin~
“””” dlS(‘0\’<1\.'\1, mtl:01 cmplo,~s in\'01\'l.'d in produce prkiJl.l! (but no1 implklltcd in prk-e fi\ing) ~'Cl'c surpris.xL The l.'~cuti \'CS ~'en: hi.g.hly n:spx·tcd in lhdr fidd5 of 1.':\J:-cnisl.'~ !JO man)' Sian· m~mk~ in«:rpn.·tcd the \•ousuuJ prkin~ d~'('i~ions as a DeW ~ndl'g;y.not an illeJ:al-.:ti\'ily AjlJIIy yo11r kl'llr•••I..-J~ (" po.:rso;tn;ll ,,,.., cLhi~~l vulocl> ••nd hehav’iour l(H:ltpbin wh)’ lhc
uncthk11l :tclivlly en:1y h:a~c (JO;:t_.rrn,:t.l.
1. “All drtiJ>aur’ls atc cthil-al drti.SI’I)tb.” Ct)Jnnll’tll on tl\i) :.lalo.’:tt\clll. j):ll ti(:Uiatl) hy tdCt’Ting to
lhc collC(‘ptS o( lt’K*’Ill i:tltcnsil)’ :tnd mot”JJ :.l.’ll~itivlly.
8. •’t:uj)lc m a piii11CUiat Suulh Amc:ncan e thiS tt’lcatl. Mlkl ‘S Canada.
YakkaTcch has a consulling division, which main ly insmlls and upgrades enterprise software
systems and related hardware on the client’s >ile. YakkaTech also has a customer service division,
which consbts of lour customer contact centres serving clients with in each region.
Each customer contact ccntn.: con~islS of a half~(.kucn departments rcpn;sc:nting functional
spccialiJ.ations (computer systems, intranct infrastructure, SLOragc systems, enterprise software
sy>tems. customer bi lling. etc.). These centre> typically have more than two do1.cn employee> in
Additional Cases
Case 1 A MlR KISS?
Case 2 ARCTIC MINING CONSULTANTS
Case 3 BRIDGING THE TWO WORLDS: THE ORGANIZATIONAL DILEMMA
Case 4 GOING TO THE X·STREAM
Case 5 KEEPING SUZANNE CHALMERS
Case 6 NORTHWEST CANADIAN FOREST PRODUCTS LIMITED (REVISED)
Case 7 THE REGENCY GRAND HOTEL
Case 8 SIMMONS LABORATORIES
Case 9 TAMARACK INDUSTRIES
Case 10 THE OUTSTANDING FACULTY AWARD
Case 11 VETEMENTS LTEE

Preface xxi
EXPERIENTIAL EXERCISES AND SELF-ASSESSMENTS
Experiential exercises and self-assessments represent an important part of active learning. Canadian
Organizational Behaviow; Tenth Edition, fac ilitates th is important learning process by offering a
team, web, or class exercise in every chapter. Self-assessments personalize the meaning of several
organizational behaviour concepts, and this edition features four dozen of them in Connect, with
automated scoring and detai led feedback. Small call-out icons in every chapter help students locate
text content most relevant to each of these excellent resources. In addition, the last page of each
chapter has a convenient table that briefly describes the self-assessments in Connect associated with
that chapter.
Team Exercise:
TEAM TOWER POWER
Purpose This exercise is designed to help you understand team roles, team
development, and other issues in the development and maintenance of effective
teams.
Materials The instructor will provide enough LEGO® pieces or similar materials for
each team to complete the assigned task. Al l teams should have identical (or very
similar) amounts and types of pieces. The instructor wiU need a measuring tape and
stopwatch. Students may use writing materials during the design stage (see
Self-Assessments for Chapter 2
SELF
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• Environment sc:annifll
• Graftin&
• Expwimenation
·——+—–~~ • Communication • lndividualleamir1& (intemaQ
• Knowted,e tn.nsfer
• System.Vpracdceslhabits
Usmg
Knowledge
• Sensemakina
• Requisite skills
• Autonomy
• LearninJ orientation
• O”ainin&
• ob.servinz
• tnfonnation systemS

18 Part One Introduction
Acquiring Knowledge Acquiring knowledge refers to bringing in knowledge from the external envi-
ronment as well a~ through discovery. It occurs daily when employees casually observe changes in the
external environment a~ well as when they receive formal training from sources outside the organization.
Knowledge acquisition also occurs through environmental scanning, such as actively monitoring consumer
trends, proposed government legislation, and competitor activities. A third method of acquiring knowledge
is to hire skilled staff and buy complementary businesses (called grafting). Finally, knowledge acquisition
occurs through experimentation-generating new idea~ and products through creative discovery and testing.
Sharing Knowledge Sharing knowledge refers to distributing knowledge throughout the orga-
nization. This mainly occurs through formal and informal communication with co-workers, as well as
through various forms of in-house learning (training, observation, etc.). Companies encourage infor-
mal communication through their organizational structure, workspace design, corporate culture, and
social activities.73 Company intranet~ and digital information repositories, such as Shopify’s internal
wiki, also support knowledge sharing.
Using Knowledge Knowledge is a competitive advantage only when it is appl ied to improve
organizational processes. To use knowledge, employees need a mental map (sense making) so they are
aware the knowledge exists and know where to find it in the organization. Knowledge use also requires
employees with sufficient prerequisite knowledge and ski lls. For example, financial analysts need
foundation knowledge in mathematics and financial products to use new knowledge on asset valuation
methods. Autonomy is another important condition for knowledge use; employees must have enough
freedom to try out new ideas. Knowledge use also flourishes where workplace norms strongly support
organizational learning. These beliefs and norms represent a learning orienta tion, which we discuss
further on the topics of creativity (Chapter 7) and organizational culture (Chapter 14).
Storing Knowledge Storing knowledge is the process of retaining knowledge for later retrieval.
Stored knowledge, often called organizational memory, includes knowledge that employees recall as
well as knowledge embedded in the organization’s systems and structures.74 Effective organizations also

Chapter One Introduction to the Field of Organizational Behaviour
The phoenix is a mythical bird that rises from the ashes of its previous existence. Yet in the
Canadian federal government, Phoenix is the name of a new payroll system that doesn’t yet
know how to fly. Soon after Phoenix was launched in February 2016, it underpaid, overpaid,
or altogether stopped paying 82,000 civil servants. The government eventually provided
emergency funds to short-changed staff, but many had to max out their credit cards and borrow
from relatives to make ends meet. More than 13,000 employees continued to suffer payroll errors
one year later.
Much of the Phoenix debacle is explained by ineffective organizationa l learn ing. The Canadian
government’s payroll system is highly complex, involving 80,000 pay rules derived from
27 labour union contracts. Yet the government cut costs by providing insufficient tra ining to the
500 civil servants responsible for operating Phoenix. ·we underestimated the amount of time
that it would take for all users to become trained and familiar w ith the system,” admitted a sen ior
government leader involved w ith Phoenix’s development. “The learn ing curve just seemed to be
much longer than we expected.”
The Phoenix project also suffered from loss of organizational memory. Before the new system
had been adequately tested, the government attempted to cut costs by laying off hundreds of
payroll experts who operated the old system. When Phoenix spectacularly spewed out incorrect
paycheques, there was a shortage of people knowledgeable enough about the complex payroll
rules to fix the problems. The government scrambled to temporarily rehire many of the laid-off
staff. “Pay transformation was compromised as soon as the decision was taken to eliminate
the jobs of some 700 compensation staff before we had transitioned to Phoenix,” admitted the
Canadian government minister responsible for payroll admin istration. “Had we kept those jobs
longer, we would not be in the situation we are in today.”7s
©Darcey Mclaughlin, 95.9 Sun FM/Post Media
19
retain knowledge in human capital by motivating employees to stay with the company. Furthermore,
organizations encourage employees to share what they know so valuable knowledge is held by co-work-
ers when an employee does quit or retire. Another strategy is to actively document knowledge when it is
created by debriefing teams on details of their knowledge of clients or product development.
One la~t point about the organizational learning perspective: effective organizations not only learn;
they also unlearn routines and patterns of behaviour that are no longer appropriate?6 Unlearning
removes knowledge that no longer adds value and, in fact, may undermine the organization’s effec-
tiveness. Some forms of unlearning involve replacing dysfunctional policies, procedures, and routines.
Other forms of unlearning era~e attitudes, beliefs, and a~sumptions. For example, BlackBerry (formerly
Research in Motion) held strong beliefs and assumptions about phones with physical keypads, which
resulted in their slow response to smartphones and tablets with touchscreen technology. Organizational
unlearning is particularly important for organizational change, which we discuss in Chapter 15.
HIGH-PERFORMANCE WORK PRACTICES (HPWP) PERSPECTIVE
The open systems perspective states that successful companies are efficient and adaptive at transforming
inputs into outputs. However, it does not offer guidance about specific subsystem character istics or orga-
nizational practices that make the transformation process more effective. These details are addressed by
another perspective of organizational effectiveness, called high-performance work practices (HPWP).
The HPWP perspective is founded on the belief that human capital- the knowledge, skills, and abilities
that employees possess-is an important source of competitive advantage for organizations77 Motivated
and skilled employees offer competitive advantage by transforming inputs to outputs better, by provid-
ing better sensitivity to the external environment, and by having better relations with key stakeholders.
The HPWP perspective tries to figure out specific ways to generate the most value from human
capital. Researchers have investigated numerous potential high-performance work practices, but we
will focus on the four discussed in most studies: e mployee involvement, job autonomy, competency
development, and rewards for performance and competency development.78 Each of these four work
practices individually improves organizational effectiveness, but studies suggest that they have a stron-
ger effect when bundled together?9

20 Part One Introduction
Over the past forty years, the Brandt Group of Companies has grown from a small manufacturer to
become Saskatchewan’s largest privately-held company with $ 1.2 billion sales and more than 1,800
employees. Brandt is also rated as one of Canada’s 50 best managed firms. Brandt Group chairman
Gavin Semple says the secret to business success is applying high-performance work practices so
the company has strong human capital. “It always comes back to obtaining, training, and retaining
the brightest and the best people,” advises Semple. “We’ve been focused on that for several
decades, so we want to not only find the best, but we want to develop a culture that results in our
employees wanting to come to work, enjoying their work, and being fulfilled at doing their job.”80
©David Schaffer/age fotostock
The first two factors-involving employees in decision making and giving them more autonomy
over their work activities-strengthen employee motivation as well as improve decisions, organi-
zational responsiveness, and commitment to change. In high-performance workplaces, employee
involvement and job autonomy often take the form of self-directed teams (see Chapter 8). The third
factor, employee competency development, refers to recruiting, selecting, and training so employees
are equipped with the relevant skills, knowledge, and other personal characteristics. The fourth high-
performance work practice involves linking performance and skill development to various forms of
financial and nonfinancial rewards valued by employees.
HPWP practices improve an organization’s effectiveness in three ways.81 First, as we mentioned ear-
lier, these activities develop employee skills and knowledge (human capital), which directly improve
individual behaviour and performance. Second, companies with superior human capital tend to adapt
better to rapidly changing environments. This adaptability occurs because employees are better at per-
forming diverse tasks in unfamiliar situations when they are highly skilled and have more freedom
to perform their work. A third explanation is that HPWP practices strengthen employee motivation
and positive attitudes toward the employer. HPWPs represent the company’s investment in its work-
force, which motivates employees to reciprocate through greater effort in their jobs and assistance to
co-workers.
The HPWP perspective is still developing, but it already reveals important information about spe-
cific organizational practices that improve an organization’s effectiveness through its employees. Still,
this perspective offers an incomplete picture of organizational effectiveness. The remaining gaps are
filled by the stakeholder perspective of organizational effectiveness.

Chapter One Introduction to the Field of Organizational Behaviour 2 1
STAKEHOLDER PERSPECTIVE
The open systems perspective says that effective organizations adapt to the external environment.
However, it doesn’t offer much detail about the external environment. The stakeholder perspective
offers more specific information and guidance by focusing on the organization’s relationships with
stakeholders. Stakeholders include organizations, groups, and other entities that affect, or are affected
by, the company’s objectives and actions.82 The stakeholder perspective personalizes the open systems
perspective; it identifies specific social entities in the external environment as well as employees and
others within the organization (the internal environment). This perspective also recognizes that stake-
holder relations are dynamic; they can be negotiated and influenced, not just taken as a fixed condi-
tion. In general, the stakeholder perspective states that organizations are more effective when they
understand, manage, and satisfy stakeholder needs and expectations. 83
There are many types of stakeholders, and the Jist is continuously evolving. Consider the key
stakeholders identified by CSL Limited in Exhibit 1.5. The Austral ian company and global leader in
blood-related products and vaccines pays attention to more than a dozen groups, and likely others that
aren’t included in this diagram. Understanding, managing, and satisfying the interests of stakeholders
is challenging because they have confl icting interests and organizations Jack sufficient resources to
satisfy everyone. Therefore, organizational leaders need to decide how much priority to give to each
group.84 Research has identified several factors that influence the prioritization of stakeholders, includ-
ing the entity’s power and urgency for action, its legitimate claim to organizational resources, how
executives perceive the organization’s environment, the organization’s culture, and the personal values
of the corporate board and CEO.
Values, Ethics, and Corporate Social Responsibility The stakeholder perspective provides
valuable details about features of the external environment that are missing from the open system per-
spective. Equal ly important, the stakeholder perspective incorporates values, ethics, and corporate social
responsibility into the organizational effectiveness equation. In particular, recall that personal values
influence how corporate boards and CEOs allocate organizational resources to stakeholders. 85 Values
EXHIBIT 1.5 CSL Limited’s Key Organizational Stakeholders
Patients
Customers
~ I
Media
PoiiUclans –
makers
OCSL Limited 20 I 6

22 Part One Introduction
are relati vely stable evaluative beliefs that guide our preferences for outcomes or courses of acti on in
a vari ety of si tuations.86 They help us to know what i s r ight or wrong, or good or bad, in the world.
Chapter 2 explains how values anchor our beliefs and to some extent motivate our actions.
Al though values exist wi thin indiv iduals, groups of people often hold similar values, so we tend to
ascribe these shared values to the team, department, organization, profession, or entire society. For exam-
ple, Chapter 14 discusses the importance and dynamics of organizational cul ture, whi ch includes shared
values across the company. Many firms strive to become values-dri ven organizations, whereby employee
decisions and behaviour are guided mainly by the collective values identified as critical to the organization’s
success.87 Consider Vancity Savings. Canada’s largest co-operative financial institution and the country’s
top ranked corporate citizen has a clear set of dominant values that guide employee decisions and behav-
iour. “At Vancity, our values shape everything we do for our members, our business partners, our employ-
ees, and the environment,” reports the company website, under the heading “Values-based banking.”88
By focusing on values, the stakeholder perspective also highl ights the importance of ethics and corpo-
rate social responsibility. In fact, the stakeholder perspective emerged out of earlier writing on these topics.
Ethics refers to the sntdy of moral principles or values that determine whether actions are right or wrong
and outcomes are good or bad. We rely on our ethical values to determine “the right thing to do.” Ethical
behaviour is driven by the moral principles we use to make decisions. These moral principles represent
fundamental values. One recent survey of 7, 700 employed millennials in 29 countries (including 300 in
Canada) reported that 87 percent believe “the success of a business should be measured in terms of more
than just its f inancial performance.” However, only 58 percent believe that businesses “behave in an ethical
manner.” 89 Chapter 2 discusses the main influences on ethi cal decisions and behaviour in the workplace.
Cor por ate social r esponsibility (CSR) consi sts of organi zati onal acti v ities intended to benefit
society and the environment beyond the f irm’s immediate f inancial i nterests or legal obl igati ons.90
I t is the v iew that companies have a contract with society, in which they must serve stakeholders
beyond shareholders and customers. In some situati ons, the interests of the f irm’s shareholders should
be secondary to those of other stakeholders91 As part of CSR, many companies have adopted the
triple bottom line phi losophy: They try to support or “earn positive returns” in the economic, social ,
and environmental spheres of sustainabili ty. Firms that adopt the triple bottom l ine aim to survive and
be profitable in the marketpl ace (economic}, but al so to maintain or improve conditions for soc iety
(social) as well a~ the physical environment.92 Companies are parti cularly eager to become “greener,”
that i s, to minimi ze any negative effect they have on the physical environment.
Global Connections 1.2:
21 DAYS OF Y’ELLO CARE93
MTN Group is the largest mobile telecommunications company in Africa and a leader in corpo-
rate social responsibility (CSR). Its award-winning “2 1 Days of Y’ello Care” program involves
many of the company’s 22,000 employees annually in CSR events that take place during
the first three weeks of June. These initiatives focus on improving education throughout the
24 African and Middle Eastern countries where MTN operates.
In recent CSR events, MTN employees installed solar panels (supplied by German firm Mobisol),
electrical cables, and batteries to generate off-grid electricity for lighting at ru ral schools. MTN
volunteers also installed computers and trained teachers to help instruct computer and other
information technology in the classroom.

Chapter One Introduction to the Field of Organizational Behaviour
Mobile telecommunications company MTN Group is a leader in corporate social responsibility
(CSR) across Africa and the Middle East through its annual “21 Days of Y’ello Care.”
© REUTERS I Alamy Stock Photo
23
Not everyone agrees that organizations need to cater to a wide variety of stakeholders. Many years
ago, economist Milton Friedman pronounced that “there is one and only one social responsibil ity of
business-to use its resources and engage in activities designed to increase its profits.”94 Friedman is
highly respected for developing economic theory, but few writers take this extreme view today. Indeed,
82 percent of Canadians believe it is a good idea for companies to support causes. A similar percentage
of people across 24 countries believe it is very or somewhat important for their own employers to be
responsible to society and the environment.95 The emerging evidence is that companies with a positive
CSR reputation tend to have better financial performance, more loyal employees, and better relations
with customers, job appl icants, and other stakeholders.96
CONNECTING THE DOTS: AN INTEGRATIVE MODEL
OF ORGANIZATIONAL BEHAVIOUR
Open systems, organizational learning, high-performance work practices, and stakeholders repre-
sent the four perspectives of organizational effectiveness. Organizational effectiveness is the ultimate
dependent variable in organizational behaviour, so it is directly or indirectly predicted by al l other OB
variables. The relationship between organizational effectiveness and other OB variables is shown in
Exhibit 1.6. This diagram is an integrative road map for the field of organizational behaviour, and for
the structure of this book. It is a meta-model of the various OB topics and concepts, each of which has
its own explanatory models. For instance, you will learn about employee motivation theories and prac-
tices in Chapter 5 and leadership theories and ski lls in Chapter 12. Exhibit 1.6 gives you a bird’s-eye
view of the book and its various topics, to see how they fit together.
As Exhibit 1.6 illustrates, individual inputs and processes influence individual outcomes, which in
turn have a direct effect on the organization’s effectiveness. For example, how well organizations trans-
form inputs to outputs and satisfy key stakeholders is dependent on how well employees perform their

24 Part One Introduction
EXHIBIT 1.6 An Integrative Model of Organizational Behaviour
Organizational Inputs and Processes
• Organizational structure • Organizational change
• Organizational culture • Human resource practices
• Organizational technology • Organizational strategy
/ “…
Individual Team/Interpersonal
Inputs and Processes Inputs and Processes
• Personality/values/competencies • Team tasks/size/composition
• Self-concepVperceptions/mindset • Team developmentltrusVcohesion
• Emotions/attitudes • Communication
• Motivation • Leadership (team/organization)
• Self-leadership • Power/influence/politics
• ConflicVnegotiation
l l
Individua l Team/ Interpersona l
O utcomes O utcomes
• Behaviour/performance • Team performance
• Organizational citizenship • Team decisions
• Well-being (low d istress) • Collaboration/mutual support
• Decisions/creativity • Social networks
\ /
Organizational Outcomes (Effectiveness)
• Open systems frt • Human capital development
• Organizational learning (HPWPs)
• Satisfied stakeholders/ethical
conduct
jobs and make logical and creative decisions. Individual inputs, processes, and outcomes are identified
in the two left-side boxes of our integrative OB model and are the centre of attention in Part 2 of this
book. After introducing a model of individual behaviour and results, we will learn about personality
and values-two of the most important individual characteristics-and later examine various individual
processes, such as self-concept, perceptions, emotions, attitudes, motivation, and self-leadership.
Part 3 of this book direct~ our attention to team and interpersonal inputs, processes, and outcomes. These
topics are found in the two boxes on the right side of Exhibit 1.6. The chapter on team dynamics (Chapter 8)
offers an integrative model for that specific topic, which shows how team inputs (team composition, size,
and other team characteri~cs) influence team processes (team development, cohesion, and others), which then
affect team perfonnance and other outcomes. Later chapters in Part 3 examine specific interpersonal and
team processes listed in Exhibit 1.6, including communication, power and influence, conflict, and leadership.
Notice in Exhibit 1.6 that team processes and outcomes affect individual processes and outcomes.
For instance, an employee’s personal well-being is partly affected by the mutual support he or she
receives from team members and other co-workers. The opposite is also true; individual processes
affect team and interpersonal dynamics in organizations. For example, we will learn that self-concept
among individual team members influences the team’s cohesion.
The top area of Exhibit 1.6 highlights the macro-level influence of organizational inputs and pro-
cesses on both teams and individuals. These organizational-level variables are mainly discussed in Part 4,

Chapter One Introduction to the Field of Organizational Behaviour 25
including organizational structure, organizational culture, and organizational change. However, we will
also refer to human resource practices, information systems, and additional organization-level variables
throughout this book where they have a known effect on individual, interpersonal, and team dynamics.
The Journey Begins
This chapter introduces you to the field of organizational behaviour, but it is only the beginning of our
journey. Throughout this book, we will challenge you to learn new ways of thinking about how people
work in and around organizations. We begin this process in Chapter 2 by presenting a basic model of indi-
vidual behaviour, then introducing over the next few chapters various stable and mercurial characteristics
of individuals that relate to elements of the individual behaviour model. Next, this book moves to the team
level of analysis. We examine a model of team effectiveness and specific feantres of high-performance
teams. We also look at decision making and creativity, communication, power and influence, conflict,
and leadership. Finally, we shift our focus to the organizational level of analysis, where the topics of orga-
nizational structure, organizational culture, and organizational change are examined in detail.
Chapter Summary
LO 1 Define organizational behaviour and organizations, and discuss the importance of this
field of inquiry.
Organizational behaviour is the study of what people think, feel, and do in and around organizations.
Organizations are groups of people who work interdependently toward some purpose. 08 theories help us
(a) comprehend and predict work events, (b) adopt more accurate personal theories, and (c) influence organiza-
tional event~. 08 knowledge is for everyone, not just managers. 08 theories and practices are highly beneficial for
an organization’s survival and success.
L02 Debate the organizational opportunities and challenges of technological change,
globalization, emerging employment relationships, and workforce diversity.
Technological change has improved efficiency, interactivity, and well-being, but it has also been a
disruptive force in organizations. Information technology has altered communication patterns and power dynam-
ics at work, and has affected our nonwork time, attention span, and techno-stress. Globalization, which refers to
various forms of connectivity with people in other parts of the world, has become more intense than ever before
because of information technology and transportation systems. It has brought more complex ity and new ways of
working to the workplace, requiring additional knowledge and skills. It may be an influence on work intensifica-
tion, reduced job security, and lessening work-life balance.
An emerging employment relationship trend is the blurring of work and nonwork time and the associated
call for more work-life balance (minimizing conflict between work and nonwork demands). Another employ-
ment trend is remote work, particularly telework (also called telecommuting), whereby employees work from
home one or more workdays per month rather than commute to the office. Telework potentially benefits
employees and employers, but there are also d isadvantages and its effectiveness depends on the employee, job,
and organization. An organ ization’s workforce has both surface-level diversity (observable demographic and
other overt d ifferences in people) and deep-level diversity (differences in personalities, bel iefs, values, and
attitudes). Diversity may improve creativity and decision making, and provide better awareness and response to
diverse communities. However, diversity also poses challenges, such as dysfunctional conflict and slower team
development.
L03 Discuss the anchors on which organizational behaviour knowledge is based.
The multidiscipl inary anchor states that the field should develop from knowledge in other d is-
ciplines (e.g., psychology, sociology, economics), not just from its own isolated research base.

26 Part One Introduction
The systematic research anchor states that OB knowledge shou ld be developed using sound research methods,
which is consis tent with evidence-based management. The contingency anchor states that OB theories gener-
ally need to consider that there will be different consequences in different situations. The multiple levels of
analysis anchor states that OB topics may be viewed from the individual, team, and organization levels of
analysis.
L04 Compare and contrast the four perspectives of organizational effectiveness.
The open systems perspective views organizations as complex organisms that “live” within an exter-
nal environment. They depend on the external environment for resources, then use organizational
subsystems to transform those resources into output~ that are returned to the environment. Organ izations receive
feedback from the external environment to maintain a good “fit” with that environment. Fit occurs by adapting to
the environment, influencing the environment, or moving to a more favourable environment. Effective transforma-
tion processes are efficient, adaptable, and innovative. The organizational learning perspective states that organi-
zations are effective when they find ways to acquire, share, use, and store knowledge. Intellectual capital consists
of human capital, structural capital, and relationship capital. Knowledge is retained in the organizational memory;
companies also selectively unlearn.
The high-performance work practices (HPWP) perspective identifies a bundle of systems and structures to
leverage workforce potential. The most widely identified HPWPs are employee involvement, job autonomy, devel-
oping employee competencies, and performance/skill-based rewards. HPWPs improve organizational effective-
ness by building human capital, increasing adaptability, and strengthening employee motivation and attitudes. The
stakeholder perspective states that organizations are more effective when they understand, manage, and satisfy
stakeholder needs and expectations. Leaders manage the interests of diverse stakeholders by relying on their per-
sonal and organizational values for guidance. Ethics and corporate social responsibility (CSR) are natural varia-
tions of values-ba~ed organ izations. CSR consists of organizational activities intended to benefit society and the
environment beyond the firm’s immediate financial interests or legal obl igations.
Key Terms
corporate social r esponsibility (CSR)
deep-level diversity
ethics
evidence-based management
globalization
high-performance work practices (HPWP)
human capital
intellectual capital
learning orientation
open systems
organizational behaviour (0 8 )
organizational effectiveness
organizational learning
organizations
relationship capital
stakeholders
structural capital
surface-level diversity
telework
values
work-life balance
Critical Thinking Questions
I. A friend suggests that organ izational behaviour courses are useful only to people in management careers.
Discuss the accuracy of your friend’s statement.
2. A young college or university student from Canada is interested in doing international business across China,
India, Brazi l, and Russia. Discuss how the knowledge of OB can be useful to the student.
3. Look through the list of chapters in this textbook and discuss how globalization could influence each organi-
zational behaviour topic.
4. “Organizational theories should follow the contingency approach.” Comment on the accuracy of this
statement.
5. What does evidence-based managemenT mean? Describe situations you have heard about in which companies
have practiced evidence-based management, as well as situations in which companies have relied on fads that
lacked sufficient evidence of their worth.

Chapter One Introduction to the Field of Organizational Behaviour 27
6. After hearing a seminar on organizational learning, a mining company executive argues that this perspective
is relevant to software and other knowledge businesses, but it ignores the fact that mining companies cannot
rely on knowledge alone to stay in business. They also need physical capital (such as extracting and ore-
processing equipment) and land (where the minerals are located). In fact, these two may be more important
than what employees carry around in their heads. Evaluate the mining executive’s comments.
7. It is said that the CEO and other corporate leaders are keepers of the organization’s memory. Please discuss this.
8. Corporate social responsibility is one o f the hottest issues in corporate boardrooms these days, partly because
it is becoming increasingly important to employees and other stakeholders. In your opinion, why have stake-
holders given CSR more attention recently? Does abiding by CSR standards potentially cause companies to
have conflicting objectives with specific stakeholders in some situations?
9. A common refrain an10ng executives is “People are our most important asset.” Relate this statement to any
two of the four perspectives of organizational effectiveness presented in this chapter. Does d1is statement
apply better to some perspectives than to others? Why or why not?
Case Study:
THE FAST-FASHION SUCCESS OF ZARA
by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canada)
Spanish retail fashion juggernaut Zara is the flagship brand of the world’s largest clothing retail company (lndi-
tex, which also owns Pull & Bear, Stradivarius, and other brands). What is the secret to Zara’s success? The
answer is that the organization has created organizational systems, structures, and practices that align with the
complex meaning of organ izational effectiveness.
In the fashion industry, customer preferences change quickly and have limited predictabili ty. Zara main-
tains a close fit with that turbulent environment by experimenting with numerous new s tyles, receiving almost
immediate and continuous feedback about which ones are most popular, learning what minor adjustments
would make the styles more appealing, and quickly producing and de livering new or revised styles to match
current demand. Zara practically invented the notion of “fast fashion,” whereby the company responds quickly
to customer preferences and fashion trends. Most other retailers instead produce a limited variety of styles ,
o ffer only two or three batches o f new designs each year, and requ ire up to s ix months for those des igns to
show up in stores.
The nucleus of this process is an aircraft hangar-sized room at Zara’s headquarters in A Coruiia, Spain. In
the centre of the room is a long line of facing desks where regional managers from two dozen countries are
in daily contact with each of the company’s 6 ,000 stores in 86 countries. Equally important, sales staff are
trained to ask customers about why they bought a garment or how a garment could be designed more to their
liking. These customer comments are then quickly reported back to headquarters. On both sides of the room
are designers and other staff who use this continuous store feedback to revise existing styles and spark ideas for
new designs.
Suppose several regional managers receive reports that the new line of women’s white jackets is sell ing
slowly; however, customers have told sales staff they would buy that style o f jacket in a cream-colour with
silkier fabric. Designers receive this information and quickly get to work designing a cream-coloured jacket
with the preferred material. Some regional d ifferences exist, of course, but Zara reports that most of its products
are in demand globally. Zara produces a large variety o f designs, but very limited stock for each design.Thus,
the company can san1ple a wider array o f market preferences whi le minimizing the problem of having too much
inventory. In fact, knowing that Zara’s products are constantly changing attracts customers back to the stores
more often.
Rapid and rich feedback from stores is vital, but Zara also thrives because of its quick response to that feed-
back. Most fashion retailers rely on independent manufacturers in distant countries that require several months’
lead time to produce a garment. Zara also sources from these low-cost manufacturers to some extent, but half of
its garments are made “in proximity” by its own manufacturing faci lities in Spain, Portugal, and Turkey. Nearby
manufacturing costs more, but it often takes less than three weeks for a new design from these nearby factories
to arrive in stores, which receive new s tock twice weekly.

28 Part One Introduction
Discussion Questions
1. Apply open systems perspective to explain how Zara has been effective in the fast fashion business. What
does the open systems perspective suggest might pose future risks to Zara’s success?
2. Identify other perspectives of organizational effectiveness that explain Zara’s success in more detail.
Source.s: N. Tokatli. “Global Sourcing: Insight’ from the Global Clothing Industry- the Case ofZara. a Fast Fashion
Retailer.” Journal of Economic Geography 8. no. I (2008): 21 – 38: L. Osborne. ” High Street Fashion Chain Zara Is Hit
by ‘Sia>•e Lahour’ Outcry,” Daily Mail (London. UK), 2013. 25; S.R. Levine. “How Zara Took Customer Focus to New
Heights.” Credi t Union Times (201 3): 10: C. Nogueir. “How lnditex Rules the Weaves. and Plans to Carry on Doing
So.” El Pais (Madrid. Spain), 24 April 2013. 4; G. Ruddick. “Spain’s Leader in Fast Fashion Has Much to Teach British
Store Rivals,” Daily Telegraph (London). 15 March 2013,2: “The Cult ofZara.” Sunday Independent (Dublin, Ireland) .
10 February 2013. 24.
Case Study:
ANCOL LTD.
by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canada)
Paul Simard wa~ delighted when Ancol Ltd. offered him the job of manager at its Jonquiere, Quebec plant. Simard
was happy enough managing a small metal stamping plant with another company, but the headhunter’s invita-
tion to apply for the plant manager job at one of Canada’s leading metal fabrication companies was irresistible.
Although the Jonquiere plant was the smallest of Ancol’s 15 operations across Canada, the plant manager position
was a valuable first step in a promising career.
One of Simard’s firs t observations at Ancol’s Jonquiere plant was that relations between employees and man-
agement were strained. Taking a page from a recent executive seminar he had attended on bu ilding trust in the
workplace, Simard ordered the removal of all time clocks from the plant. Instead, the plant would a~sume that
employees had put in their full shift. This symbolic gesture, he believed, would establish a new level of credibility
and strengthen relations between management and employees at the site.
Initially, the 250 production employees at the Jonquiere plant appreciated their new freedom. They felt
respected and saw this gesture as a sign of positive change from the new plant manager. 1\vo months later, how-
ever, problems started to appear. A few people began showing up late, leaving early, or taking extended lunch
breaks. Although this represented only about 5 percent of the employees, others found the s ituation unfair. More-
over, the increa~ed absenteeism levels were beginning to have a noticeable effect on plant productivity. The prob-
lem had to be managed.
Simard asked supervisors to observe and record when the employees came or went and to discuss attendance
problems with those abusing their privileges. But the supervisors had no previous experience with keeping atten-
dance and many Jacked the necessary interpersonal skills to discuss the matter with subordinates. Employees
resented the reprimands, so relations with supervisors deteriorated. The additional responsibi lity of keeping track
of attendance also made it difficult for supervisors to complete their other responsibi lities. After just a few months,
Ancol found it necessary to add another supervisor position and reduce the number of employees assigned to each
supervisor.
But the problems did not end there. Without time clocks, the payroll department could not deduct pay for the
amount of time that employees were late. Instead, a Jetter of reprimand was placed in the employee’s personnel
file. However, this required yet more time and additional skills from the supervisors. Employees did not want these
letters to become a permanent record, so they filed grievances with their labour union. The number of grievances
doubled over six months, which required even more time for both union officials and supervisors to handle these
disputes.
Nine months after removing the time clocks, Paul Simard met with union officials, who agreed that it would
be better to put the time clocks back in. Employee-management relations had deteriorated below the level when
Simard had started. Supervisors were burnt out from overwork. Productivity had dropped due to poorer attendance
records and increased administrative workloads.
A couple of months after the time clocks were put back in place, Simard attended an operations meeting
at Ancol’s headquarters in Toronto. During lunch, Simard described the time clock incident to Liam Jackson,

Chapter One Introduction to the Field of Organizational Behaviour 29
Ancol’s plant manager in Northern British Columbia. Jackson looked surprised, then chuckled. Jackson explained
that the previous B.C. plant manager had done something like that with s imilar consequences six or seven years
earlier. The previous manager had left some time ago, but Jackson heard about the B.C. time clock from a supervi-
sor during the manager’s retirement party two months ago.
“I guess it’s not quite like lightning striking the same place twice,” said Simard to Jackson. “But it sure feels
like it.”
Discussion Questions
I. Discuss the consequences of the time clock re moval on Ancol’s effectiveness as an organization using any
two of the perspectives of organ izational effectiveness.
2. What changes should occur to minimize the likelihood of these problems in the future?
© 2000 Steven L. McShane
Web Exercise:
DIAGNOSING ORGANIZATIONAL
STAKEHOLDERS
Purpose This exercise is designed to help you understand how stakeholders influence organizations as part of
the open systems anchor.
Materials Students need to select a company and, prior to class, retrieve and analyze publicly avai lable
information over the past year or two about that company. This may include annual reports, which are usually
found on the websites o f publicly traded companies. Where possible, student~ should also scan full-text
newspaper and magazine databases for articles published over the previous year about the company.
Instructions The instructor may have students work alone or in groups for this activity. Students will select
a company and investigate the relevance and influence of various stakeholder groups on the organization.
Stakeholders can be identified from annual reports, newspaper articles, website s tatements, and other available
sources. Stakeholders should be rank-ordered in terms of their perceived importance to the organization.
Students should be prepared to present or discuss their rank-ordering of the organ ization’s stakeholders, includ-
ing evidence for this ordering.
Discussion Questions
I. What are the main reasons why certain stakeholders are more important than others for this organization?
2. On the basis of your knowledge of the organ ization’s environmental situation, is this rank order of
stakeholders in the organization’s best interest, or should speci fic other stakeholders be given higher priority?
3. What societal groups, if any, are not mentioned as stakeholders by the organization? Does this lack of
reference to these unmentioned groups make sense?
Class Exercise:
IT ALL MAKES SENSE?
Purpose This exercise is designed to help you understand how organizational behaviour theories can help you
refine and improve your personal theories about what goes on in organizations.
Instructions Read each of the statement~ below and determine whether each statement is true or false, in
your opinion. The class will consider the answers to each question and discuss the implications for studying
organ izational behaviour.

30
~ True
~ TTrue
rl:- _!.rue
4 . True
5. True
~ – True
7. True
8. True
9. True
10. True ….__
Part One Introduction
This exercise may also be conducted as a team activity, whereby students answer these questions in teams
rather than alone.
–
False A happy worker is a productive worker. –
False A decision maker•s effectiveness increases with the number of choices or alternatives available to he r/him.
False Organization.’i are more effective when they minimize conflict am ong employees. –
False Employees have more power with many close friend’i than with many acquaintances.
False Companies are more successful whe n they have s trong corporate cultures. –
False Employees perform better without stress.
False T he best way to c hange people and organizations is by pinpointing the source of their current problems.
False Female leaders involve employees in decisions to a greater degree than do male leaders.
False T he best decisions are made without emotion.
False
If employees feel they are paid unfai rly, nothing other than changing their pay will reduce their feelings of
injustice .
Self-Assessment for Chapter 1
SELF-ASSESSMENT NAME
Are you a good te lecommuter?
DESCRIPTION
Telecommuting is an increasingly popular Vlorkplace activity. and it pote ntially
offers benefit’i for both companies and telecommute rs. However. some people are
better suited than others to telecomm uting and other forms of remote work. This
self-assessment estimates personal characteristics that relate to e mployee success at
telecommuting. thereby providing a rough indication of how well you might adjust to
telecommuting.

( PART TWO J Individual Behaviour and Processes
CHAPTER 2
Individual Behaviour, Personality,
and Values
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
LO 1 Describe the four factors that directly influence individual behaviour and performance.
L02 Summarize the five types of individual behaviour in organizations.
L03 Describe personality and discuss how the “Big Five” personality dimensions and four MBTI types
relate to individual behaviour in organizations.
L04 Summarize Schwartz’s model of individual va lues and discuss the conditions where values influence
behaviour.
LOS Describe three ethical principles and discuss three factors that influence ethical behaviour.
L06 Describe five va lues commonly studied across cultures, and discuss the diverse cultures
within Canada.
31

32 Part Two Individual Behaviour and Processes
Most companies strive for a safe work environment, but few are as dedicated as Mississauga-based
Mother Parkers Tea & Coffee Inc. As one of North America’s largest private label coffee producers,
Mother Parkers instills safety-oriented behaviour through employee motivation, ability, role clarity,
and situational support. “Safety is the core of everything we do here,” says Chris Meffen, production
manager of Mother Parkers’ award-winning ReaiCup operations.
To motivate safe work behaviour, Mother Parkers employees in Mississauga and Ajax, Ontario,
and Fort Worth, Texas, are actively involved in testing and selecting new safety-oriented equipment.
A special cross-functional committee of employees also conducts “ergo-blitzes” with production
staff to uncover ergonomic risks and recommend solutions.
“We wanted to empower the operators to recogn ize hazards in their work area, voice those
concerns, and to be a part of the solutions; says Adrian Khan, Mother Parkers’ environmental
health and safety manager. “When it comes down to it, they are the experts running the machines
who know exactly what the hazards are in the workplace; adds Khan, who was recently named
Canada’s Safety Leader of the Year by Canadian Occupational Safety magazine.
Ability is the second driver of safe work behaviour. Mother Parkers employees are trained on
safety procedures before they first enter the production floor. They also learn current developments
from community experts at special health and safety day events. Mother Parkers also actively
manages a third driver of safe work behaviour: the physical work environment. For example, the
company’s award-winning state-of-the-art automated production systems include built-in accident
prevention features; highly visible floor markers cue employees to stop and look both ways before
crossing forklift travel areas; and communication boards display the latest safety improvement
statistics as well as key safety information.
Mother Parkers’ fourth ingredient for safe work behaviour is clarifying role expectations.
Specifically, employees are continuously reminded that safety is paramount. These role perceptions
are reiterated through ongoing safety training, employee involvement in ergonomic risk prevention,
and the presence of numerous workplace safety cues. In fact, reminding everyone about safety is a
daily event. “We begin our production meetings and shift handovers by talking about safety,” says
production manager Chris Meffen.
Safety-focused role expectations also extend to contractors, all of whom complete a safety
training program before their projects begin. “We set expectations and standards with contractors
before they come on site on what it means to be on site at Mother Parkers from a health and safety
perspective; says Mike Bate, vice-president of human resources.1
M otivating staff to be safety conscious, providing ongoing safety training, establishing clear safety-focused role expectations, and creating a safety-first work environment have contrib-
uted to Mother Parkers’ ascension as a workplace health and safety role model in Canada. This
chapter begins by introducing the four direct drivers of individual behaviour and performance that
Mother Parkers applies to ensure that employees consistently engage in safe work behaviours. Next,
we rev iew the five types of individual behaviour that represent the individual-level dependent
variables found in most organizational behaviour research. The latter half of this chapter focuses
on the two most stable characteristics within individuals, namely their personality and values. We
introduce the two models of personality, discuss how personal values influence behaviour, explain
the main factors to consider in ethical behaviour, describe the main types of cross-cultural values,
and examine similarities and d ifferences in personal values across Canada and with people in the
United States.
MARS Model of Individual Behaviour and Performance
For most of the past century, experts have investigated the direct predictors of indi-
vidual behaviour and performance.2 One of the earliest formulas was performance
= person x situation, where person includes individual characteristics and situa-
tion represents external influences on the individual ‘s behaviour. Another frequently mentioned

Chapter Two Individual Behaviour, Personality, and Values 33
formula is performance = ability x motivation. 3 Sometimes known as the “skill-and-will” model,
th is formula elaborates two specific characteristics within the person that influence indiv idual
performance. Some organizational studies use the ability-motivation-opportunity (AMO) model,
which refers to the three variables but with a limited interpretation of the situation. Along with
ability, motivation, and situation, researchers have more recently identified a fourth key direct
predictor of ind ividual behaviour and performance: role perceptions (the individual’s expected
role obl igations).4
Exhibit 2 .1 illustrates these four variables-motivation, abi lity, role perceptions, and situational
factors-which are represented by the acronym MARS. 5 All four factors are critical influences on an
individual’s voluntary behaviour and performance; if any one of them is low in a given situation, the
employee will perform the task poorly. For example, motivated salespeople with clear role perceptions
and suffic ient resources (situational factors) will not perform their jobs a~ well if they lack sales skills
and related knowledge (ability). Motivation, ability, and role perceptions are clustered together in the
model because they are located within the person. Situational factors are external to the individual but
still affect his or her behaviour and performance.6 The four MARS variables are the direct predictors
of employee performance, customer service, co-worker collegiality, ethical behaviour, and all other
forms of voluntary behaviour in the workplace. Let’s look in more detail at each of the four factors in
the MARS model.
EMPLOYEE MOTIVATION
Motivation represents the forces within a person that affect his or her direction, intensity, and per-
sistence of voluntary behaviour.7 Direction refers to the path along which people steer their effort. In
other words, motivation is goal-directed, not random. People have choices about what they are trying
to achieve and at what level of qual ity, quantity, and so forth. They are motivated to arrive at work on
time, finish a project a few hours early, or aim for many other targets.
The second element of motivation, cal led intensity, is the amount of effort al located to the goal.
Intensity is al l about how much people push themselves to complete a task. Two employees might be
motivated to finish their project a few hours early (direction), but only one of them puts forth enough
effort (intensity) to achieve this goal. The third element of motivation is persistence, which refers to the
length of time that the individual continues to exert effort toward an objective. Employees sustain their
effort until they reach their goal or give up beforehand.
To help remember these three elements of motivation, consider the metaphor of driving a car in
which the thrust of the engine is your effort. Direction refers to where you steer the car, intensity is how
EXHIBIT 2.1 MARS Model of Indiv id ual Behaviour and Results
Indiv idual
characteristics MARS Model
Behaviour
and results
• ‘ll*llllfl- ct
· Oiz , ,. … ….
• C I QCixl& ………..
•JIIJIIJIIu ..
.. SC I Zt
·?I IIII s
c 1 Cl

34 Part Two Individual Behaviour and Processes
much you put your foot down on the gas pedal, and persistence is for how long you drive toward your
destination. Remember that motivation is a force that exists within individuals; it is not their actual
behaviour. Thus, direction, intensity, and persistence are cognitive (thoughts) and emotional conditions
that directly cause us to move.
ABILITY
Employee abilities also make a d ifference in behaviour and task performance. Ability includes both
the natural aptitudes and the learned capabilities required to successfully complete a task. Aptitudes
are the natural talents that help employees learn specific tasks more quickly and perform them
better. For example, finger dexterity is an aptitude by which individuals learn more quickly and
potentially achieve higher performance at picking up and handling small objects with their fingers.
Employees with high finger dexterity are not necessarily better than others at first; rather, they usu-
ally learn the skill faster and eventually reach a higher level of performance. Learned capabilities
are the physical and mental skills and knowledge you have acquired. They tend to wane over time
when not in use. Aptitudes and learned capabil it ies (ski lls and knowledge) are the main e lements of
a broader concept called competencies, which are characteristics of a person that result in superior
performance. 8
The challenge is to match a person’s abil ities with the job’s requirements because a good match
tends to increase employee performance and well-being. One matching strategy is to select applicants
who already demonstrate the required competencies. For example, companies ask applicants to perform
work samples, provide references for checking their past performance, and complete various selection
tests. A second strategy is to train employees who lack specific knowledge or skills needed for the job.9
• by the NUMBERS
Mind the MARS Gap on Ability, Role Perceptions, and Situational
Factors 10
of 500 Canadian senior
executives say that
finding skilled workers is
somewhat or very difficult
of more than 13,000
employees surveyed
across 34 countries
say the skills gap is a
real problem for their
employer.
of 2.2 million employees
surveyed worldwide
strongly agree that they
know what is expected of
them at work.
25″,.{, of 2,061 U.K. adults surveyed
say they receive insufficient
training and development
in their existing role.
24~ of more than 400,000 l
employees surveyed across
500 organizations worldwide
say that lack of tools is their top
source of decreased productivity
(second highest to unproductive
co-workers).

Chapter Two Individual Behaviour, Personality, and Values 35
The third person-job matching strategy is to redesign the job so that employees are given tasks only
within their current abilities. For example, a complex task might be simplified-some aspects of the
work are transferred to others-so a new employee performs only tasks that he or she is currently able
to perform. As the employee becomes more competent at these tasks, other tasks are added back into
the job.
ROLE PERCEPTIONS
Along with motivation and abi lity, employees require accurate role perceptions to perform their jobs
well . Role perceptions refer to how clearly people understand the job duties (roles) assigned to or
expected of them. These perceptions range from role clarity to role ambiguity. When 7,000 employees
in a global survey were asked what would most improve their performance, “greater clarity about what
the organization needs from me” was identified as the most important factor. 11
Role clarity exists in three forms. First, employees have clear role perceptions when they under-
stand the specific duties or consequences for which they are accountable. This may seem obvious,
but employees are occasionally evaluated on job duties they were never told wa~ within their zone of
responsibility. This Jack of role clarity may be an increasing concern as organizations move away from
precisely defined job descriptions to broader work responsibilities.
Second, role clarity exists when employees understand the priority of their various tasks and
performance expectations. This is illustrated in the cla~sic dilemma of prioritizing quantity versus
quality, such as how many customers to serve in an hour (quantity) versus how well the employee
should serve each customer (quality). Role clarity in the form of task priorities also exists in the
dilemma of al locating personal time and resources, such as how much time managers should devote
to coaching employees versus meeting with clients . The third form of role perceptions involves under-
standing the preferred behaviours or procedures for accomplishing tasks. Role ambiguity exists when
an employee knows two or three ways to perform a task, but misunderstands which of these the com-
pany prefers.
Role perceptions are important because they represent how well employees know where to direct
their effort.12 Employees with role clarity perform work more accurately and efficiently whereas those
with role ambiguity waste considerable time and energy by performing the wrong tasks or the right
ta~ks in the wrong way. Furthermore, role clarity is essential for coordination with co-workers and
other stakeholders. For instance, performers at Canada’s Cirque du Solei] depend on each other to
perform precise behaviours at exact times, such as catching each other in midair. Role clarity ensures
that these expectations are met and the performances are executed safely. Finally, role clarity motivates
employees because they have a higher bel ief that their effort will produce the expected outcomes. In
other words, people are more confident exerting the required effort when they know what is expected
of them.
SITUATIONAL FACTORS
Individual behaviour and performance also depend on the situation, which is any context beyond the
employee’s immediate control.13 The situation has two main influences on individual behaviour and
performance.14 One influence is that the work context constrains or facilitates behaviour and perfor-
mance. Employees who are motivated, ski lled, and know their role obligations will nevertheless per-
form poorly if they Jack time, budget, physical work facilities, and other resources.
The other influence is that the work environment provides cues to guide and motivate people.
Mother Parkers Tea & Coffee uses many cues throughout the production floor to warn employees
of safety risks and guide their behaviour to minimize those risks. For example, forklift routes are
clearly marked, and painted footprints on both sides show employees where to stop before proceeding
to cross. Barriers and warning signs are sin1ational factors that cue employees about moving forkl ifts
and other hazards.

36 Part Two Individual Behaviour and Processes
Global Connections 2.1:
ICELAND FOODS TAKES MARS TO SUCCESS
In the U.K.’s highly competitive retail foods market, Iceland Foods Group Ltd. continues to
perform well, was recently named the nation’s best online supermarket, and is consistently
rated as one of the top dozen places to work in the U.K.
The key drivers of Iceland Foods’ success are the four variables depicted in the MARS
model. Employees are motivated by a living wage (higher than most supermarkets), an inspir-
ing CEO, and individual and store-level incentives. “A well-motivated staff is priceless,” says
Iceland’s founder and CEO Malcolm Walker. “That is our secret weapon.”
Iceland Foods also boasts some of the highest employee scores on ability (most staff
members say they receive all the training they need to do their job well), role clarity (most say
they are clear about what is expected of them in their jobs). and situational support (most say
managers ensure they have the resources needed to do the job).15
Iceland Foods Group has become one of the most successful food retailers in the United
Kingdom through the four variables in the MARS model.
Courtesy of Iceland Foods.
Types of Individual Behaviour
The four elements of the MARS model-moti vation, abil ity, role perceptions, and si tu-
ational factors-affect all voluntary workplace behaviours and performance. There are
many varieties of individual behaviour, but most can be organized into the five cat-
egories described over the next few pages: task performance, organizational citizenship behaviours,
counterproducti ve work behaviours, j oining and staying with the organization, and maintaining work
attendance (Exhibit 2.2).

Chapter Two Individual Behaviour, Personality, and Values 37
EXHIBIT 2.2 Five Types of Individual Behaviour in the Workplace
TASK PERFORMANCE
Task performance refers to the individual’s voluntary goal-directed behaviours that contrib-
ute to organizational objectives.16 Most jobs require incumbents to complete several tasks. For
example, foreign exchange traders at RBC Capital Markets in Toronto and elsewhere must be able
to identify and execute profitable trades, work cooperatively with clients and co-workers, assist
in training new staff, and work on special telecommunications equipment without error. All tasks
involve various degrees of working with people, data, th ings, and ideas. 17 Foreign exchange trad-
ers, for instance, mainly work with data (e.g., performing technical analysis of trends}, people
(e.g., sharing information with co-workers and clients), and ideas (interpreting charts and eco-
nomic reports).
There are three types of task performance: proficient, adaptive, and proactive.18
Proficient task performance refers to performing the work efficiently and accurately. It involves
accomplishing the a~signed work at or above the expected standards of qual ity, quantity, and
other indicators of effectiveness.
Adaptive task performance refers to how well employees modify their thoughts and behav-
iour to align with and support a new or changing environment. Essentially, adaptive task
performance is about how well employees respond to change in the workplace and in their
job duties.
Proactive task performance refers to how well employees take the initiative to anticipate and
introduce new work patterns that benefit the organization. Proactive behaviours bring about
change in oneself, co-workers, and the workplace to achieve what is perceived to be a better
future for the organization.
Employees in almost every job are expected to perform their work proficiently. However, adaptive
and proactive task performance are also important when the work is ambiguous. This ambiguity exists
in many situations, such as when the cl ient’s expectations are unclear, resources to perform the work
have uncertain availability, and the methods used to perform the work are rapidly evolving due to
emerging technology.

38 Part Two Individual Behaviour and Processes
ORGANIZATIONAL CITIZENSHIP
Employee behaviour extends beyond performing specific tasks. It also includes various forms of coop-
eration and helpfulness to others that support the organization’s social and psychological context. 19
These activities are called organizational citizenship behaviours (OCBs). Some OCBs are directed
toward individuals, such as assisting co-workers with their work problems, adjusting a~signed work
schedules to accommodate co-workers, showing genuine courtesy toward co-workers, and sharing
work resources (supplies, technology, staff) with co-workers. Other OCBs represent cooperation and
helpfulness toward the organization, such as supporting the company’s publ ic image, offering ideas
beyond those required for one’s own job, attending voluntary functions that support the organization,
and keeping up with new developments in the organization.
Early literantre defined OCBs a~ discretionary behaviours (employees don’t have to perform them), whereas
more recent studies indicate that some OCBs are a job requirement even if they aren’t explicitly stated. In fact,
OCBs may be as important a~ ta~k performance when managers evaluate employee performance.20
OCBs can have a significant effect on individual, team, and organizational effectiveness.21 Employ-
ees who help others have higher task performance because they also receive more support from co-
workers. OCBs also increase team performance where members depend on each other. However,
engaging in OCBs can have negative consequences.22 OCBs take time and energy away from perform-
ing tasks, so employees who give more attention to OCBs r isk lower career success in companies that
reward task performance. Also, employees who frequently perform OCBs tend to have higher work-
family confl ict because of the amount of time required for these activities.
COUNTERPRODUCTIVE WORK BEHAVIOURS
Organizational behaviour is interested in all workplace behaviours, including dysfunctional activities
collectively known as counterprod uctive work behaviours (CWBs). CWBs are voluntary behaviours
that have the potential to directly or indirectly harm the organization or its stakeholders23 This concept
includes a wide array of intentional and unintentional behaviours, such as harassing co-workers,
creating unnecessary confl ict, deviating from preferred work methods (e.g., shortcuts that undermine
work qual ity), being untruthful, steal ing, sabotaging work, and wa~ting resources. CWBs are not minor
concerns; research suggests that they can substantially undermine the organization’s effectiveness.
JOINING AND STAYING WITH THE ORGANIZATION
Organizations consist of people working together toward common goals, so another critical set of
behaviours is joining and staying with the company.24 In spite of the slow economic recovery and high
unemployment in several parts of Canada, many companies struggle to find suitable applicants for some
types of jobs. A recent large-scale survey reported that 77 percent of Canadian employers have mod-
erate to extreme difficulty recruiting talent and 42 percent of business leaders say the skills shortage
has resulted in productivity problems in their organization. For instance, B.C. Children’s Hospital wa~
recently forced to close two of its eight operating rooms due to a shortage of trained pediatric nurses.25
Even when companies are able to hire qualified staff in the face of shortages, they need to ensure that
these employees stay with the company26 Employee turnover removes valuable knowledge, skills, and rela-
tionships with co-workers and external stakeholders, all of which take time for new staff to acquire. In later
chapters, we identify other problems with employee turnover, such a~ its adverse effect on customer service,
team development, and corporate culture strength. Employee turnover does offer some benefits, such a~
removing people with counterproductive work behaviours and opening up positions to new employees with
fresh ideas. But overall, turnover tends to have a negative effect on organizational effectiveness.
MAINTAINING WORK ATTENDANCE
Along with attracting and retaining employees, organizations need everyone to show up for work at
scheduled times. Statistics Canada reports that Canadian employees miss an average of 8.3 days of
scheduled work each year, compared to approximately 6.5 days and 4.5 days per year in the United
Kingdom and United States, respectivelyY

Chapter Two Individual Behaviour, Personality, and Values 39
What are the main causes of absenteeism and lateness?28 Employees often point to situational factors,
such a~ bad weather, transit strike, personal illness, and family demands (e.g., sick children). These are usu-
ally valid explanations, but some people still show up for work because of their strong motivation to attend,
whereas others take sick leave at the slightest sign of bad weather or illness. Some absenteeism occurs
because employees need to get away from workplace bullying, difficult customers, boring work, and other
stressful conditions. Absenteeism is also higher in organizations with generous sick leave because this ben-
efit minimizes the financial loss of taking time away from work. Another factor in absenteeism is the per-
son’s values and personality. Final ly, sntdies report that absenteeism is higher in teams with strong absence
norms, meaning that team members tolerate and even expect co-workers to take time off.
Presenteeism Although most companies focus on problems with absenteeism, presenteeism may
be more serious in some situations29 Presentee ism occurs when people attend work even though their
capacity to work is significantly diminished by illness, fatigue, personal problems, or other factors.
These employees tend to be less productive and may reduce the productivity of co-workers. In addition,
they may worsen their own health and increase health and safety risks for co-workers. Presenteeism is
more common among employees with low job security (such as new and temporary staff), employees
who lack sick leave pay or similar financial buffers, and those whose absence would immediately affect
many people. Personality also plays a role; some people possess traits that motivate them to show up for
work when others would gladly recover at home.30 Personality is a widely cited predictor of most forms
of individual behaviour. It is also the most stable personal characteristic, so we introduce this topic next.
Global Connections 2.2:
THE DOCTOR IS ILL … BUT WILL SEE YOU NOW
Most physicians urge sick patients to stay home, yet few take their own advice. Three-quarters
of New Zealand doctors working in hospitals say they went to work while unwell over the
previous year. Approximately the same percentage of Swedish doctors recently surveyed
admitted that over the previous year they had gone to work one or more times with an illness
for which they would have advised patients to stay at home.
“Presenteeism is the elephant in the room that nobody wants to talk or do anything about,”
suggests Michael Edmond, an executive and physician at the University of Iowa Hospitals &
Clinics. It is difficult for medical centres to find a replacement on short notice and many doctors
feel guilty letting down their co-workers
and patients.
“There is an unspoken understand-
ing that you probably should be on
your deathbed if you are calling in sick,”
says an attending physician at a Phila-
delphia hospital where 83 percent of
doctors admitted working while sick
within the past year. “It inconveniences
my colleagues, is complicated to pay
back shifts, and makes me look bad to
do so.”31
Presenteeism is a serious problem among
physicians, even though they urge their
unwell patients to stay away from work
until recovered.
©Shutterstock/pathdoc

40 Part Two Individual Behaviour and Processes
Personality in Organizations
Getting hired at Bridgewater Associates-the world’s largest hedge fund-is not a cake-
walk. The process begins with applicants watching onl ine videos depicting the culture
and daily office life at the Westport, Connecticut, investment firm. Next, they spend two
or three more hours completing four online assessments, including a popular measure of personal ity
traits (MBTI). Applicants who pass the online selection process engage in a structured interview over
the phone with consultants, who further assess the individual’s character. Even after accepting Bridge-
water’s job offer, new recruits take a final two-hour personality test developed by the company. Bridge-
water then uses the application data to produce the new hire’s “baseball card” -a compact profile of
his or her personality, abilities, culture fit, and performance. Bridgewater employees can view any co-
worker’s profile on their phone or tablet using the firm’s highly secure ba~eball card app.32
The hiring process at Bridgewater Associates is unusual. But one practice the hedge fund ha~ in
common with many organizations is it~ attempt to measure each job applicant’s personality- the
relatively enduring pattern of thoughts, emotions, and behaviours that characterize a person, along
with the psychological processes behind those characteristics.33 In essence, personality is the bundle of
characteristics that make us similar to or different from other people. We estimate an individual’s per-
sonality by what he or she says or does, and we infer the person’s internal states-including thoughts
and emotions-from these observable behaviours.
People engage in a wide range of behaviours in their daily lives, yet close inspection of those actions
reveals discernible patterns called personality traits. 34 Traits are broad concepts that al low us to label
and understand individual differences. For example, you probably have some friends who are more
talkative than others. Some people like to take risks whereas others are risk-averse. Each trait impl ies
that there is something within the person, rather than environmental influences alone, that predicts
this behavioural tendency. In fact, studies report that an individual’s personality traits mea~ured in
childhood predict various behaviours and outcomes in adulthood, including educational attainment,
employment success, marital relationships, illegal activities, and health-risk behaviours.35
Although people have behavioural tendencies, they do not act the same way in all situations. Such
consistency would be considered abnormal because it indicates a person’s insensitivity to social norms,
reward systems, and other external conditions?6 People vary their behaviour to suit the situation, even
if the behaviour is at odds with their personal ity. For example, talkative people remain relatively quiet
in a library where “no talking” rules are explicit and strictly enforced. Even there, however, personal ity
differences are apparent because talkative people tend to do more chatting in libraries relative to other
people in that setting.
PERSONALITY DETERMINANTS: NATURE VERSUS NURTURE
Personality is shaped by both nature and nurture, although the relative importance of each continues to
be debated and studied.37 Nature refers to our genetic or hereditary origins-the genes that we inherit
from our parents. Studies of identical twins reveal that heredity has a very large effect on personality;
up to SO percent of variation in behaviour and 30 percent of temperament preferences can be attr ibuted
to a person’s genetic characteristics. In other words, genetic code not only determines our eye colour,
skin tone, and physical shape; it also significantly affects our attitudes, decisions, and behaviour.
Personality is also shaped by nurture–our social ization, life experiences, and other forms of inter-
action with the environment. Personality develops and changes mainly from childhood to young adult-
hood, typical ly stabilizing by around age 30. However, some personality changes continue to occur
later in life. For instance, a few traits (openness to experience, social vitality) increase through to
young adulthood, then decline in later years, whereas other traits (agreeableness, conscientiousness)
tend to increase through to late life. Our personal ity can also change somewhat as a result of our job
characteristics over a long time period.38
The main explanation for why personality becomes more stable by adulthood is that we form a clearer
and more rigid self-concept. This increasing clarity of “who we are” anchors our behaviour with the help

Chapter Two Individual Behaviour, Pe rsonality, and Values 4 1
of the executivefimction. This is the part of the brain that monitors and regulates goal-directed behaviour
to keep it consistent with our self-concept. Our understanding of who we are becomes clearer and more
stable with age, which increases the stability and consistency of our personal ity and behaviour.39 We dis-
cuss self-concept in more detail in Chapter 3. The main point here is that personality is not completely
determined by heredity; it is also shaped by life experiences, particularly early in a person’s life.
Can you identify personality traits from blogging words? You can discover how
well you interpret someone’s personality in blogs and other writing by completing
th is self-assessment in Connect.
FIVE-FACTOR MODEL OF PERSONALITY
Hundreds of personality traits (e.g., sociable, anxious, curious, dependable, suspicious, talkative,
adventurous) have been described over the years, so experts have tried to organize them into smaller
clusters. The most researched and respected clustering of personality traits is the five-factor (Big Five)
model (FFM).40 Several decades ago, personality experts identified more than 17,000 words that
describe an individual’s personal ity. These words were distilled down to five broad personality dimen-
sions, each with a cluster of specific traits. Similar results were found in studies of different languages,
suggesting that the five-factor model is fairly robust across cultures. These “Big Five” dimensions,
represented by the handy acronym CANOE, are outlined in Exhibit 2.3 and described below.
Conscientiousness. Characterizes people who are organized, dependable, goal-focused, thor-
ough, disciplined, methodical, and industr ious. People with low conscientiousness tend to be
careless, disorganized, and Jess thorough.
Agreeableness. Describes people who are trusting, helpful, good-natured, considerate, tolerant,
selfless, generous, and flexible. People with low agreeableness tend to be uncooperative and
intolerant of others’ needs as well as more suspicious and self-focused.
EXHIBIT 2.3 Five-Factor Model Personality Dimensions
Personality People with higher scores on this dimension
dimension tend to be more:
Organized, dependable, goal-focused, thorough,
disciplined, methodical, industrious
Trusting, helpful, good-natured, considerate, tole rant,
selfless, generous, flexible
Anxious, insecure, se lf-conscious, depressed,
temperamental
Imaginative, creative, unconventional, curious,
nonconforming, autonomous, perceptive
Outgoing, ta lkative , energetic, sociable, assertive

42 Part Two Individual Behaviour and Processes
Neuroticism. Refers to people who tend to be anxious, insecure, self-conscious, depressed, and
temperamental. In contrast, people with low neuroticism (high emotional stability) are poised,
secure, and calm.
Openness to experience. This dimension is the most complex and has the lea~t agreement
among scholars. It generally refers to the extent to which people are imaginative, creative,
unconventional, curious, nonconforming, autonomous, and aesthetically perceptive. Those who
score low on this dimension tend to be more resistant to change, less open to new ideas, and
more conventional and fixed in their ways.
Extr aversion. Describes people who are outgoing, talkative, energetic, sociable, and assertive.
The opposite is imroversion, which characterizes those who are quiet, cautious, and less inter-
active with others. Extraverts get their energy from the outer world (people and things around
them), whereas introverts get their energy from the internal world, such as personal reflection
on concepts and ideas. Introverts do not necessarily lack social skills. Rather, they are more
inclined to direct their interests to idea~ than to social events. Introverts feel quite comfortable
being alone, whereas extraverts are less comfortable without social interaction.
What is your Big Five personality? You can discover your Big Five personality by
completing this self-assessment in Connect.
Are you introverted or extraverted? You can discover your level of introversion or
extraversion by completing this self-assessment in Connect.
Five-Factor Model and Work Performance Personal ity mainly affects behaviour and per-
formance through motivation, specifically by influencing the individual’s choice of goals (direction)
as well as intensity and persistence of effort toward those goals. Consequently, all of the five-factor
model dimensions predict one or more types of employee behaviour and performance to some extent.
However, the Big Five dimensions cluster several specific traits, each of which can predict employee
performance somewhat differently from others in the cluster. In fact, some experts suggest that per-
formance is better predicted by the specific traits than by the broad Big Five dimensions. Another
observation is that the relationship between a personal ity dimension or trait and performance may be
nonl inear. People with moderate extraversion perform better in sales jobs than those with high or low
extraversion, for example.4 1
Exhibit 2.4 identifies the Big Five personality dimensions that best predict five types of work behav-
iour and performance.42 Conscientiousness stands out a~ the best overall personality predictor of pro-
ficient ta~k performance for most jobs. More precisely, proficient ta~k performance has the strongest
association with the specific conscientiousness traits of industriousness (achievement, self-discipline,
purposefulness) and dutifulness. Conscientious employees set higher personal goals for themselves
and are more persistent. They also engage in more organizational citizenship and in less counterpro-
ductive work behaviour. Conscientiousness is a weak predictor of adaptive performance (responding to
change) and proactive performance (taking initiative toward new work patterns). In fact, two specific
conscientiousness traits-orderliness and dependabil ity-tend to suppress adaptivity.
Extraversion is the second best overall personality predictor of proficient task performance, but it is
much weaker than conscientiousness. The specific extraversion dimension traits of assertiveness and
positive emotionality are the strongest predictors within this dimension. Assertive employees with pos-
itive emotionality frame situations as challenges rather than threats, so they have a stronger “can-do”
belief. Extraversion also predicts both adaptive and proactive performance, possibly because extraverts
are comfortable engaging with their environment. Extraversion is associated with influencing others
and being comfortable in social settings, which explains why effective leaders and salespeople tend to
be somewhat more extraverted than the general population.

Chapter Two Ind ividual Behaviour, Personality, and Values
EXHIBIT 2.4 Big Five Personality and Work Performance
Type of
Performance
Relevant
Personality
Dimensions
Proficient task
performance
• Conscientiousness
• Extraversion
Adaptive task
performance
• Emotional stability
• Extraversion (assertiveness)
• Openness to experience
Proactive task
performance
• Extraversion (assertiveness)
• Openness to experience
43
Type of
Performance
Organizational
citizenship
Counterproductive
work behaviours
Relevant
Personality
Dimensions
• Conscientiousness
• Agreeableness
• Conscientiousness’
• Agreeableness·
“Negative relationship.
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Aha-SoftiShuuerstodc RF: (bottom-right): Sign N Symbol Productio n/Shunerstock RF
Agreeableness is positively associated with organizational citizenship and negatively associated
with counterproductive work behaviours.43 The reason is that employees with high agreeableness are
motivated to be cooperative, sensitive, flexible, and supportive. Agreeableness does not predict profi-
cient or proactive task performance very well, mainly because it is associated with lower motivation to
set goals and achieve results. However, agreeableness does predict one’s performance as a team mem-
ber as well as in customer service jobs.
Openness to experience is a weak predictor of proficient task performance, but it is one of the best
personality predictors of adaptive and proactive performance. The main reason is that employees with
higher openness scores have more curiosity, imagination, and tolerance of change.44 These traits also
explain why openness to experience is associated with successful performance in creative work.
Emotional stability (low neuroticism) is one of the best personality predictors of adaptive perfor-
mance.45 Employees with higher emotional stability cope better with the ambiguity and uncertainty of
change. In contrast, those with higher neuroticism view change as a threat, so they tend to avoid change
and experience more stress when faced with workplace adjustments. These characteristics would sug-
gest that emotional stability also predicts proactive performance, but the limited research has reported
mixed results. Emotional stability is associated with proficient task performance, organizational cit-
izenship, and counterproductive work behaviours, but its influence is neither strong nor consistent
enough to be listed in Exhibit 2.4.
JUNGIAN PERSONALITY THEORY AND
THE MYERS-BRIGGS TYPE INDICATOR
The five-factor model of personality has the most research support, but it is not the most popular per-
sonality test in organizations. That distinction goes to Jungian personality theory, which is measured
through the Myers-Briggs Type Indicator (MBTI) (see Exhibit 2 .5). Nearly a century ago, Swiss

44 Part Two Individual Behaviour and Processes
EXHIBIT 2.5 Jungian and Myers-Briggs Personality Types
Bllst-d 1m data from CPP. Inc .. Mmmlllin View. CA 994043 from lntmduction 1<1 Type lmd Ca"e-rs by Allen L. Hammer. psychiatrist Carl Jung proposed that personality is primarily represented by the individual's prefer- ences regarding perceiving and judging information.46 Jung explained that the perceiving function- how people prefer to gather information or perceive the world around them-occurs through two competing orientations: sensing (S) and intuition (N). Sensing involves perceiving information directly through the five senses; it relies on an organized structure to acquire factual and preferably quantita- tive details. In contrast, intuition relies more on insight and subjective experience to see relationships among variables. Sensing types focus on the here and now, whereas intuitive types focus more on future possibilities. Jung also proposed that judging-how people prefer making decisions based on what they have perceived-consists of two competing processes: thinking (T) and feeling (F). People with a thinking orientation rely on rational cause-effect logic and systematic data collection to make decisions. Those with a strong feeling orientation, on the other hand, give more weight to their emotional responses to the options presented, as well as to how those choices affect others. Jung noted that in addition to the four core processes of sensing, intuition, thinking, and feeling, people d iffer in their level of extravers ion-introvers ion, which was introduced earl ier as one of the Big Five personality traits. The MBTI measure was developed two decades after Jung published his personality model. Along with measuring the personal ity traits described above, the MBTI instrument assesses people on lung's broader categories of perceiving and judging, which represents one's attitude toward the external world. Those with a perceiving orientation are open, curious, and flexible. They prefer to keep their options open and to adapt spontaneously to events as they unfold. Judging types prefer order and structure and want to resolve problems quickly. Chapter Two Individual Behaviour, Personality, and Values 45 As CEO (now executive chair) of Hawaii's Central Pacific Bank, John Dean realized that the executive team needed to work together better to rebuild the bank and its culture. The executives completed the Myers-Briggs Type Indicator with debriefing by executive coaches. The executives shared their results to gain a better understanding of each other's personality, particularly how they perceive things and analyze information. "Knowing this personal information leads to more trust," says Dean, shown in this photo. He has noticed that disagreements are now resolved more easily. "Knowing more about someone's personality can help alleviate some of those problems that crop up when management teams work together." 47 © Tina Yuen/Pocific Business News. There are several reasons why the MBTI is popular, but it is usually a poor predictor of job per- formance and is not recommended for employment selection or promotion decisions.48 There are also issues with its measurement. MBTI can potentially identi fy employees who prefer face-to-face versus virrual teamwork, but it does not predict how well a team develops. It also has questionable value in predicting leadership e ffectiveness. In spite of these limitations, the MBTI is the most widely srudied measure of cognitive style in management research and is the most popular personality test for career counselling and executive coaching.49 It is even being used by arti ficial intell igence engineers to adapt the behaviour of robots to user preferences . MBTI takes a neutral or balanced approach by recognizing both the strengths and limitations of each personality type in different siruations. In contrast, the Big Five model views people with higher scores as better than those with lower scores on each dimension. As such, the Big Five model may have adopted a restrictive view of personality that is more difficult to apply in coaching and development settings. 5° Are you a sensing or intuitive type? You can d iscover the extent to wh ich you are a sensing or intuitive type by completing this self-assessment in Connect. 46 Part Two Individual Behaviour and Processes ~ t 'r'' Debating Point: SHOULD COMPANIES USE PERSONALITY TESTS TO SELECT JOB APPLICANTS? Personality theory has made significant strides over the past two decades, particularly in demonstrating that specific traits are associated with specific workplace behaviours and out- comes. Various studies have reported that the Big Five dimensions predict overall job perfor- mance, organizational citizenship, leadership, counterproductive work behaviours, tra ining performance, team performance, and a host of other important outcomes. These findings cast a strong vote in favour of personality testing in the workplace. A few prominent persona lity experts urge caution, however. 5 1 They point out that although traits are associated with workplace behaviour to some extent, there are better predictors of work performance, such as work samples and past performance. Furthermore, depending on how the selection decision applies the test results, personality instruments may unfairly discriminate against specific groups of applicants or employees. 52 A third concern is that selection procedures typically assume that more is better; that is, applicants with the highest scores will perform better than applicants with lower scores. Yet an increasing number of studies indicate that the best candidates might be closer to the mid- dle than the extremes of the range. For instance, job performance apparently increases with conscientiousness, yet employees with very high conscientiousness might be so thorough that they become perfectionists, which can stifle rather than enhance job performance.53 A fourth worry is that most persona lity tests are self-report scales, so applicants might try to fake their answerss• Worse, the test scores might not represent the individual's personal- ity or anything else meaningful because test takers often don't know what personality traits the company is looking for. Studies show that candidates who try to fake "good" persona lity scores change the selection results, but supporters of personality testing offer the counterar- gument that few job applicants try to fake their scores. One major study recently found that most personality dimensions are estimated better by observers than by self-ratings. However, few companies rely on ratings from other people. 55 Va lues in the Workplace As an award-winning "employer of choice" in the Canadian telecommunications indus- try, Advantage Tower Ltd. wants the personal values of its employees to be similar to the company's core values. "Staff w ill ask themselves if their values align with the organi- zation, and if they feel empowered," says Allison Earl, CEO of the Calgary-based wireless tower and antenna construction and maintenance firm. She explains that employees have a much clearer under- standing of what is expected of them when they understand and bel ieve in the company's values. "We can accomplish a Jot more with everyone working hard where the goals and values of the company are al igned with the goals and the aspirations of its people," Earl observes.s6 Advantage Tower executi ves recognize that employees pay attention to their personal values when deciding where to work and what choices they make every day on the job. Values, a concept that we introduced in Chapter I , are stable, evaluative bel iefs that guide our preferences for outcomes or courses of action in a variety of situations. 57 They are perceptions about what is good or bad, right or wrong. Values tell us what we "ought" to do. They serve as a moral compass that directs our motiva- tion and, potentially, our decisions and actions. They also provide justification for past decisions and behaviour. People arrange values into a hierarchy of preferences, called a value system. Some individuals value new challenges more than they value conformity. Others value generosity more than frugal ity. Each person's unique value system is developed and reinforced through socialization from parents, religious Chapter Two Individual Behaviour, Personality, and Values 47 institutions, friends, personal experiences, and the society in which he or she lives. As such, a person's hierarchy of values is stable and long-lasting. For example, one study found that value systems of a sample of adolescents were remarkably similar 20 years later when they were adults.ss Notice that our description of values has focused on individuals, whereas Advantage Tower CEO Allison Earl also refers to the values of the wireless infrastructure company. In reality, values exist only within individuals-we call them personal values. However, groups of people might hold the same or similar values, so we tend to ascribe these shared values to the team, department, organiza- tion, profession, or entire society. The values shared by people throughout an organization ( orga- nizational values) receive fuller discussion in Chapter 14 because they are a key part of corporate culture. The values shared across a society (cultural values) receive attention in the la~t section of this chapter. Values and personality traits are related to each other, but the two concepts differ in a few ways. 59 The most noticeable distinction is that values are evaluative; they tell us what we ought to do. Personal- ity traits are descriptive; they are labels referring to what we naturally tend to do. A second distinction is that personality traits have minimal confl ict with each other-you can have high agreeableness as well as high introversion, for example-whereas some values are opposed to other values. For exam- ple, someone who values excitement and challenge would have difficulty also valuing stabil ity and moderation. Third, personality is somewhat more stable than values. The reason is that personality is influenced about equally by heredity and socialization, wherea~ values are influenced more by social- ization than heredity. TYPES OF VALUES Values come in many forms, and experts on this topic have devoted considerable attention to organiz- ing them into clusters. Long ago, social psychologist Milton Rokeach developed two lists of values, distinguishing means (instrumental values) from end goals (terminal values). Although Rokeach's lists are still mentioned in some organizational behaviour sources, they were replaced by a better model almost two decades ago. The instrumental-terminal values distinction was neither accurate nor useful, and it overlooked values that are now included in the current dominant model. Today, the dominant model of personal values is one developed and tested by social psycholo- gist Shalom Schwartz and his colleagues60 Schwartz's list of 57 values builds on Rokeach's earlier work but does not distinguish instrumental from terminal values. Instead, research has found that human values are organized into the circular model (c ircumplex) shown in Exhibit 2.6. This model clusters the 57 specific values into 10 broad values categories: un iversalism, benevolence, tradition, conformity, security, power, achievement, hedonism, stimulation, and self-d irection. For example, conformity includes four specific values: politeness, honouring parents, self-disc ipline, and obedience. These 10 broad values categories are further clustered into four quadrants. One quadrant, called openness to change, refers to the extent to which a person is motivated to pursue innovative ways. This quadrant includes the value categories of self-direction (creativity, independent thought), stimulation (excitement and challenge), and hedonism (pursuit of pleasure, enjoyment, gratification of desires). The opposing quadrant is conservation, which is the extent to which a person is motivated to preserve the status quo. The conservation quadrant includes the value categories of conformity (adherence to social norms and expectations), security (safety and stability), and tradition (moderation and preservation of the status quo). The third quadrant in Schwartz's circumplex model, called self-enhancement, refers to how much a person is motivated by self-interest. This quadrant includes the values categories of achievement (pursuit of personal success), power (dominance over others), and hedonism (a values category shared with openness to change). The opposite of self-enhancement is self-transcendence, which refers to moti- vation to promote the welfare of others and nature. Self-transcendence includes the value categories of benevolence (concern for others in one's life) and universalism (concern for the welfare of al l people and nature). 48 Part Two Individual Behaviour and Processes EXHIBIT 2.6 Schwartz's Values Circumplex Openness t o change Stimulation _ •• Hedorism Self-enhancement Self-direction --- __ .... --- Self-transcendence Universaism Conservation Sources: S.H. Schwartz.. "Unjversals in the Content and Structure of Values: Theoretical Ad\'ances and Empirical Tests in 20 Countries. Ad\'ances in Experimental Social Psychology 25 ( 1992): 1-65: S.H. Schwaru and K. Boehnke. "Evaluating the Structure of Human Values with Confirmator-y Fac-tor Analysis. Journal of Research in Personality 38. oo. 3 (2004): 23~55. What are your dominant values? You can discover your value system hiera rchy in Schwartz's model by completing this self-assessment in Connect. VALUES AND INDIVIDUAL BEHAVIOUR Personal values influence decisions and behaviour in various ways.61 First, values directly motivate our actions by shaping the relative attractiveness (valence) of the choices available. In other words, we experience more positive feelings toward alternatives that are aligned with our most important values. If stimulation is at the top of our values hierarchy, then a job opportunity offering new experiences will appeal to us more than a job opportunity with more predictable and stable work. Second, values indirectly motivate behaviour by framing our perceptions of reality. Specifically, values influence whether we notice something a~ well as how we interpret it. Our decisions and actions are affected by how we perceive those situations. Third, we are motivated to act consistently with how we define ourselves and want to be viewed by others. If achievement is a key feature of our self-view and publ ic image, then we try to ensure that our behaviour is consistent with that value. The more clearly a behaviour is aligned with a specific value that identifies us, the more motivated we are to engage in that behaviour. Personal values motivate behaviour to some extent, but several factors weaken that relationship62 One rea~on for this "disconnect" between personal values and individual behaviour is the sin1ation. The MARS Chapter Two Individual Behaviour, Personality, and Values 4 9 model states that the situation influences behaviour, which sometimes causes people to act contrary to their personal values. For example, individuals with strong self-transcendent values tend to engage in more environmentally friendly behaviours such as recycling, but lack of recycling facilities prevents or severely limits this behaviour. People also deviate from their personal values due to strong counter-motivational forces. For instance, employees caught in illegal business dealings sometimes attribute their unethical activities to pressure from management to achieve their performance targets at any cost. Another rea~on why decisions and behaviour are inconsistent with our personal values is that we don't actively think about them much of the time.63 Values are abstract concepts, so their relevance is not obvious in many situations. Furthermore, many decisions and actions occur routinely, so we don't actively evaluate their consistency with our values. We do consciously consider our values in some situations, of course, such as by real izing how much we value security when deciding whether to perform a risky task. However, many daily event~ do not trigger values awareness, so we act without their guidance. We literally need to be reminded of our values in order for them to guide our decisions and actions. The effect of values awareness on behaviour was apparent in a study in which students were given a math test and received a payment for each correct answer.64 One group submitted their results to the experimenter for scoring, so they couldn't lie about their results. A second group could lie because they scored the test themselves and told the experimenter their test score. A third group was similar to the sec- ond (they scored their own test), but that test included the following statement, and students were required to sign their name below that statement: "I understand that this short survey falls under (the university's) honour system." The researchers estimated that some students cheated when they scored their own test without the "honour system" statement, wherea~ no one given the "honour system" form lied about their results. The university didn't actually have an official honour statement, but the message made students pay attention to their honesty. In short, people are more likely to apply their values (honesty, in this case) when they are explicitly reminded of those values and see their relevance to the situation. VALUES CONGRUENCE At the beginning of this section, Advantage Tower CEO Allison Earl emphasized the importance of employing people whose values are aligned with the company's values. The key concept here is values congruence, which refers to how similar a person's values hierarchy is to the values hierarchy of another entity, such a~ the team or organization. An employee's values congruence with team members increases the team's cohesion and performance. Congruence with the organization's values tends to increase the employee's job satisfaction, loyalty, and organizational citizenship. It also tends to reduce stress and turnover. Furthermore, employees are more likely to make decisions that are compatible with organizational expectations when their personal values are congruent with the organization's shared values65 Are organizations the most successful when every employee's personal values al ign with the com- pany's values? Not at all! While a large degree of values congruence is necessary for the reasons just noted, organizations also benefit from some level of incongruence. Employees with diverse values offer different perspectives, which potentially lead to better decision making. Also, too much congru- ence can create a "corporate cult" that potentially undermines creativity, organizational flexibi lity, and business ethics. Ethical Values and Behaviour When 1,000 Canadians were asked to identify the most important qualities of an ideal leader, 95 percent chose "honesty." In another recent survey, both Canadian employees and executives placed "integrity" at the top of the list of attributes of an effective cor- porate leader. And when 195 business leaders across IS countries were asked to identify the most 50 Part Two Individual Behaviour and Processes Assiniboine Credit Union (ACU) has developed an enviable reputation for corporate social responsibility initiatives, including financial literacy training, community hiring, social purchasing, and social impact financial services. These activities highlight the Winnipeg-based financial institution's values, which have become a magnet for job applicants with like-minded values. "Our values and our promise to be a socially responsible and profitable fi nancial co-operative is exactly why people want to work here and why people seek us out as an employer," explains an ACU executive. "When you can align your personal values w ith the company you're working for, it takes being a great place to work to a whole new level." Values congruence is so important at Assin iboine Credit Union that one of the explicit criteria to be a candidate for ACU's board of directors is "values fit"- understanding and agreeing to the firm's mission and values. 56 ©Rawplxel.com/Shutterstock important leader competencies, "high ethics and moral standards" was the top-rated item from the Jist of74 characteristics.67 These surveys reveal the importance of ethics in the workplace and, in particular, in the decisions and actions of organizational leaders. Ethics refers to the sntdy of moral principles or values that determine whether actions are r ight or wrong and outcomes are good or bad (see Chapter I). People rely on their ethical values to determine " the right thing to do." THREE ETHICAL PRINCIPLES To better understand business ethics, we need to consider three distinct types of ethical principles: utilitarianism, individual rights, and distributive justice.68 Your personal values might sway you more toward one principle than the others, but all three should be actively considered to put important ethical issues to the test. Utilitarianism. This principle says the only moral obl igation is to seek the greatest good for the greatest number of people. In other words, we should choose the option that provides the high- est degree of satisfaction to those affected. One problem is that utilitarianism requires a cost- benefit analysis, yet many outcomes aren't mea~urable. Another problem is that uti litarianism Chapter Two Individual Behaviour, Personality, and Values focuses ethics only on outcomes, whereas the means of achieving those outcomes may be considered unethical by other principles. 5 1 Individual rights. This principle says that everyone has the same set of natural rights, such as freedom of speech, freedom of movement, right to physical security, and right to fair trial. The individual rights principle extends beyond legal rights to human rights that everyone is granted as a moral norm of society. One problem with this principle is that some individual rights may conflict with others. The shareholders' right to be informed about corporate activities may ultimately conflict with an executive's right to privacy, for example. Distributive justice. This principle says that the benefits and burdens of similar individuals should be the same; otherwise they should be proportional. For example, employees who con- tribute equally in their work should receive similar rewards, whereas those who make a lesser contribution should receive less. A variation of this principle says that inequalities are accept- able when they benefit the least well off in society. The main problem with the distributive justice principle is that it is difficult to agree on who is "similar" and what factors are relevant. We discuss distributive justice further in Chapter 5. MORAL INTENSITY, MORAL SENSITIVITY, AND SITUATIONAL INFLUENCES These three ethical principles guide us in our ethical decisions, but three other factors also influence ethical conduct in the workplace: the moral intensity of the issue, the individual's moral sensitivity, and situational factors.69 Moral Intensity Moral in tensity is the degree to which an issue demands the application of ethical principles. Decisions with high moral intensity have strong ethical implications that usual ly affect many people, so the decision maker needs to carefully apply ethical principles to make the best choice. The moral intensity of a situation is higher when:70 The decision will have substantially good or bad consequences. Most people view the decision outcomes as good or bad (versus widespread disagreement about whether those outcomes are good or bad). There is a high probability (rather than low probabi lity) that the good or bad decision conse- quences will occur. Many people wi ll be affected by the dec is ion and its consequences. Global Connections 2 .3: ALCOA EXECUTIVE SETS ETHICAL STANDARD IN RUSSIA When William O'Rourke became Alcoa Russia's first CEO, he knew that bribery was a serious problem in that country, so he made his position clear to staff: "We don't condone it. We don't participate in it. We are not going to do it. Period." This ethical mandate was soon tested when local police stopped delivery of an $18 million furnace and declared that delivery would resume only after Alcoa paid $25,000 to the local mayor (all figures are in U.S. dollars). "My bonus was based in large part on making the planned investments happen on time," says O'Rourke. A few Alcoa executives in the United States advised that he should do what- ever it takes to keep the work on schedule, implying that perhaps it would be better to pay the bribe. "Nonetheless," he recalls, "I stood my ground." (continued) 52 Part Two Individual Behaviour and Processes (continued) The new furnace arrived three days later, even though Alcoa refused to pay the bribe. In that first year, O'Rourke spent only $20 million of his $100 million capital budget because he resisted ongoing bribery attempts from various sources. It took more than a year of Alcoa Russia consistently refusing to participate in bribery before those attempts stopped.71 m Aa:DA William O'Rourke's leadership navigated Alcoa Russia th rough an ethical quagmire of bribery and extortion. © REUTERS/Aiamy Stock Photo Moral Sensitivity Moral sensitivity (also called ethical sensitivity) is a characteristic of the person, namely his or her ability to detect a moral di lemma and estimate its relative importance. This aware- ness includes both cognitive (logical thinking) and emotional level awareness that something is or could become morally wrong.72 People with high moral sensitivity can more quickly and accurately estimate the moral intensity of the issue. This awareness does not necessarily translate into more ethi- cal behaviour; it just means they are more likely to know when unethical behaviour occurs. Several factors are associated with a person's moral sensitivity.73 One factor is expertise or knowl- edge of prescriptive norms and rules. For example, accountants are more morally sensitive regarding specific accounting procedures than are people who lack experience in this profession. A second influ- ence on moral sensitivity is previous experience with specific moral dilemmas. These experiences likely generate internal cues that trigger awareness of future ethical dilemmas with similar character- istics. Third, employees who are better at empathizing are more sensitive to the needs and situation of others, which makes them more aware of ethical dilemmas involving others. On average, women have higher moral sensitivity compared to men, partly because women tend to have higher empathy. A fourth reason why some people have higher moral sensitivity than others involves how they define and view themselves (i.e., their self-concept).74 Employees who strongly define themselves by their moral character (cal led their moral identity) are more sensitive to moral dilemmas because they put more energy into maintaining ethical conduct. This active monitoring process relates to the fifth influence on moral sensitivity: mindfulness.75 Mindfulness refers to a person's receptive and impartial attention to and awareness of the present situation as well as to one's own thoughts and emotions in that moment. Mindfulness increases moral sensitivity because it involves actively monitoring the environ- ment as well as being sensitive to our responses to that environment. This vigilance requires effort as well as skill to receptively evaluate our thoughts and emotions. Chapter Two Individual Behaviour, Personality, and Values 53 Unfortunately, we have a natural tendency to minimize effort, which leads to less mindfulness. For instance, research indicates that we have lower moral sensitivity when observing an organization, team, or individual we believe has high ethical standards.76 We assume the source is unlikely to engage in any misconduct, so we switch from mindfulness to automatic pilot. Even when we notice someone with supposedly high ethical standards engaging in unusual activity, we are less likely to form an impression that the person's behaviour may be unethical. Situational Factors Along with moral intensity and moral sensitivity, ethical conduct is influ- enced by the situation in which the conduct occurs77 One of the most frequently identified situational influences for unethical behaviour is pressure from top management. A recent survey of more than 13,000 employees across 13 countries reported that fully one-third observed misconduct and 22 percent experienced pressure to compromise organizational standards. Canada was not included in that study, but in another survey one-third of Canadians strongly or somewhat agreed with this statement: "In my workplace, delivering results is more important than doing the right thing." Twenty-two percent agreed with the statement: "I feel that I have to compromise my own personal ethics or values to keep my job."78 Situational factors such as pressure from management do not justify unethical conduct. Rather, we need to be aware of these factors so organizations can reduce their prevalence. SUPPORTING ETHICAL BEHAVIOUR Most large and medium-sized organizations in Canada and other developed countries apply one or more strategies to improve ethical conduct. The most common ethics initiative is a code of ethical conduct-a statement about desired practices, rules of conduct, and phi losophy about the organiza- tion's relationship to its stakeholders and the environment79 These codes are supposed to motivate and guide employee behaviour, signal the importance of ethical conduct, and bui ld the firm's trustworthi- ness to stakeholders. However, critics suggest that they do little to reduce unethical conduct. Another strategy to improve ethical conduct is to train and regularly evaluate employees about their knowledge of proper ethical conduct. Many large firms have annual quizzes to test employee awareness of company rules and practices on important ethical issues such as giving gifts and receiving sensi- tive information about competitors or governments. In some firms, employees participate in elaborate games that present increasingly challenging and complex moral dilemmas. A growing ethics practice is a confidential telephone hotline and website, typically operated by an independent organization, where employees can anonymously report suspicious behaviour. For instance, Halifax-based conglomerate IMP Group has such a hotline for all employees, suppliers, cus- tomers, and other stakeholders. A few very large businesses also employ ombudspersons who receive information confidentially from employees and proactively investigate possible wrongdoing. Training, hotlines, and related activities improve ethical conduct to some extent, but the most powerful foundation is a set of shared values that reinforces ethical conduct. "A good, ethical system requires more than just signposts pointing employees in the right direction," advises the Canadian Centre for Ethics and Corporate Policy. Instead, ethical conduct occurs through "a set of bel iefs, values, norms and practices that comprise an ethical culture." As we describe in Chapter 14 (organizational culture), an ethical culture is supported by the conduct and vigilance of corporate leaders. By acting with the highest moral standards, leaders not only gain support and trust from followers; they role-model the ethical standards that employees are more likely to follow.80 Va lues Across Cu ltures As the only westerner in a 50-employee winery in China, Emilie Bourgois noticed that Chinese managers seemed to be more sensitive than European or American bosses about maintaining their authority over employees. "I was surprised to see that taking the initia- tive most of the time was seen as rude and a~ a failure to respect the executives' authority," says Bour- gois, a public relations professional from Bordeaux, France. "At work, everyone had to perform well in 54 Part Two Individual Behaviour and Processes their own tasks, but permission was required for anything other than what was expected." The power relationship was also apparent in how Chinese managers interacted with staff. "Western-style bosses tend to develop a closer relationship with employees," Bourgois suggests. "The hierarchy is much more clearly divided in Chinese-dominant companies than it is in foreign ones."81 Emilie Bourgois experienced the often-subtle reality that expectations and values differ around the world. Over the next few pages, we introduce five values that have cross-cultural significance: individualism, collectivism, power distance, uncertainty avoidance, and achievement-nurturing orien- tation. Exhibit 2.7 summarizes these concepts and lists countries that have high, medium, or low scores on these values. INDIVIDUALISM AND COLLECTIVISM 1\vo seemingly inseparable cross-cultural values are individualism and collectivism. Individualism is the extent to which we value independence and personal uniqueness. Highly individualist people value personal freedom, self-sufficiency, control over their own Jives, and appreciation of the unique qualities that distinguish them from others. Canadians, Americans, Chileans, and South Africans general ly exhibit high individualism, whereas Taiwan and Venezuela are countries with low individualism.82 Collectivism is the extent to which we value our duty to groups to which we belong and to group harmony. Highly collectivist people define themselves by their group memberships, emphasize their personal connection to others in their in-groups, and value the goals and well-being of people within those groups.83 Low collectivism countries include Canada, Japan, and Germany, whereas Israelis and Taiwanese have relatively high collectivism. Contrary to popular belief, individualism is not the opposite of collectivism. In fact, the two concepts are typically uncorrelated.84 For example, cultures that highly value duty to one's group do not necessari ly EXHIBIT 2. 7 Five Cross-Cultural Values - VIne s-ple c-trlel .. _ ................................. CIIbua Individualism High: Canada, United State.,. Chile. South Africa Defines self more by one's uniqueness: personal goals have Medium: Japan. Denmark priority; decisions have low consider.ttion of effect on others: low: Taiwan. Venezuela relationships are viewed as more instrumental and fluid. Collectivism High: lsmel. Taiwan Define.' self more by one's in-group membership: goals of Medium: India, Denmark self-sacrifice and harmony have priority; behaviour regulated by low: Canada. United States. Germany. Japan in-group norms: in-group memberships are viewed as stable with a strong differentiation with out-groups. Power Distance High: India. Malaysia Reluctant to disagree with or contradict the boss; managers are Medium: Canada. United States. Japan expected and preferred decision makers: perception of dependence Low: Denmark, Israel (versus interdependence) with the boss. Uncertainty High: Belgium, Greece Prefer predictable situations: value stable employment, strict laws. Avoidance Medium: Canada. United States. Norway and low conflict: dislike deviations from normal behaviour. low: Denmark, Singapore Achievement High: Austria. Japan Focus on outcomes (versus relationships): decisions based on Orientation Medium: Canada. United States. Brazil contribution (equity versus equality); low empathy or showing low: Sweden. Netherlands emotions (versus strong empathy and caring) Smm:e-s: lndividualism and c.ollectivism de.->eription.s and result,.:; are from Lhe meL<'Hlnalysis reported in D. Oyserman. H. M. Coon. and M. Kemmelmeie r. " ReLhinking lndjvidualism and Collectivism: EvaluaLion of T heoretical As...~umptions and Meta-Analyses." Psychological Bulletin. 128 (2002). pp. 3-72. Tlle o Lher information i.s from G. Hofstede. Cuhure's Con.sequences. 2d Ed (Thousand Oaks. CA: Sage. 2001). Chapter Two Individual Behaviour, Personality, and Values 55 give a low priority to personal freedom and uniqueness. Generally, people across all cultures define them- selves by both their uniqueness and their relationship to others. It is an inherent characteristic of every- one's self-concept, which we discuss in the next chapter. Some cultures clearly emphasize uniqueness over group obligations or vice versa, but both have a place in a person's values and self-concept. Also note that people in Japan have relatively low collectivism. This is contrary to the view stated in many cross-cultural books, which claim that Japan is one of the most collectivist countries on the planet! There are several explanations for the historical misinterpretation, ranging from problems defining and measuring collectivism to erroneous reporting of early cross-cultural research. Whatever the reasons, studies consistently report that people in Japan tend to have relatively low collectivism and moderate individualism (as indicated in Exhibit 2.7).85 How much do you value individualism and collectivism? You can discover your level of individualism and collectivism by completing this self-assessment in Connect. POWER DISTANCE Power distance refers to the extent to which people accept unequal distribution of power in a society.86 Individuals with high power distance accept and value unequal power. Those in higher positions expect obedience to authority; those in lower positions are comfortable receiving commands from their supe- riors without consultation or debate. People with high power distance also prefer to resolve differences through formal procedures rather than direct informal discussion. In contrast, people with low power distance expect relatively equal power sharing. They view the relationship with their boss as one of interdependence, not dependence; that is, they believe their boss is also dependent on them, so they expect power sharing and consultation before decisions affecting them are made. People in India and Malaysia tend to have high power distance, whereas people in Denmark and Israel generally have low power distance. Canadians collectively have medium-low power distance. What is your level of power distance? You can discover your power distance orientation by completing this self-assessment in Connect. UNCERTAINTY AVOIDANCE Uncer tainty avoidance is the degree to which people tolerate ambiguity (low uncertainty avoidance) or feel threatened by ambiguity and uncertainty (high uncertainty avoidance). Employees with high uncertainty avoidance value structured situations in which rules of conduct and decision making are clearly documented. They usually prefer direct rather than indirect or ambiguous communications. Uncertainty avoidance tends to be high in Belgium and Greece and very high in Japan. It is generally low in Denmark and Singapore. Canadians collectively have medium-low uncertainty avoidance. ACHIEVEMENT-NURTURING ORIENTATION Achievement-nurturing orientation reflects a competitive versus cooperative view of relations with other people.87 People with a high achievement orientation value assertiveness, competitiveness, and material ism. They appreciate people who are tough, and they favour the acquisition of money and material goods. In contrast, people in cultures with low achievement orientation (i.e. high nurntring orientation) emphasize relationships and the well-being of others. They focus on human interaction and caring rather than competition and personal success. People in Sweden, Norway, and the Netherlands score very low on achievement orientation (i.e., high nurturing orientation). In contrast, very high achievement orientation scores have been reported in Japan and Austria. Canada and the United States place a little above the middle of the range on achievement nurturing orientation. 56 Part Two Individual Behaviour and Processes Global Connections 2.4: CROSS-CULTURAL HICCUPS AT BEAM SUNTORY Japanese alcoholic beverage company Suntory Holdings Ltd. has a few cross-cultural hiccups to go through after acquiring Jim Beam, a bourbon producer in Kentucky. "We have to overcome the huge differences in the Japanese mentality and the American mentality," Suntory CEO Takeshi Niinami advised soon after the acquisition. "It creates misunderstandings." Niinami (in photo) says he prefers the "blunt but honest" American approach, but that style may conflict with the Japanese preference for modesty, detail, and consensus. Japanese and American employees also have different career aspirations and reward systems. "Beam and Suntory definitely have differences," Niinami acknowledges. "This is not an easy task. But I'm ready for it."88 Since acquiring American bourbon maker Jim Beam, Japan's Suntory Holdings Ltd. has experienced cross-cultural conflicts between its American and Japanese employees. © Bloomberg/Getty Images CAVEATS ABOUT CROSS-CULTURAL KNOWLEDGE Cross-cultural organizational research has gained considerable attention over the past two decades, likely due to increased globalization and cultural diversity within organizations. Our knowledge of cross-cultural dynamics has blossomed, and many of these findings will be discussed in other chapters, such as leadership, conflict, and influence. However, we also need to raise a few warning flags about cross-cultural knowledge. One problem is that too many studies have relied on small, convenient samples (such as students attending one university) to represent an entire culture. 89 The result is that many cross-cultural studies draw conclusions that might not general ize to the cultures they intended to represent. Chapter Two Individual Behaviour, Personality, and Values 57 A second problem is that cross-cultural studies often assume that each country has one culture.90 In reality, many countries (including Canada) have become culturally diverse. As more countries embrace globalization and multicultural ism, it becomes even Jess appropriate to assume that an entire country has one unified culture. A third concern is that cross-cultural research and writing continues to rely on a major study conducted almost four decades ago of 116,000 IBM employees across dozens of countries. That study helped to ignite subsequent cross-cultural research, but its findings are becoming out of date as values in some cultures have shifted over the years.91 CULTURAL DIVERSITY WITHIN CANADA Some cross-cultural studies give the impression that Canada is a homogeneous country where people hold identical or very similar values. Of course, anyone who Jives here knows otherwise. Canada is the first country in the world to officially embrace multiculturalism.92 But in addition to the surface- level diversity reflected in multiculturalism, most Canadians may be surprised at how much deep-level diversity also exists within this country. The best-known deep-level cultural differences are between Canadian anglophones and fran- cophones. At one time, francophones were more rel igious, traditional, and deferential to authority, compared with anglophones. Now, the situation is almost reversed. Relative to anglophones, franco- phones have significantly Jess deference to authority, Jess acceptance of Canada's mil itary activities abroad, and more tolerance and morally permissive views regarding marriage, sexual activity, and nonmarried parenthood.93 At the same time, anglophone and francophone Canadians seem to be con- verging on several values associated with the workplace, secularism, and environmentalism.94 Beyond the francophone-anglophone comparisons, culntral geographers have for several decades anecdotally implied differences in personal values and personality traits across Canadian regions. Rigorous analysis has been limited, but a few sn1dies have recently found that Canadians differ regionally in their political values. For example, egalitarianism (preference for minimal income differences) is significantly higher throughout Atlantic Canada and Quebec than in Alberta. The values of personal responsibility and market liberalism (free market capitalism) are stronger in all three prairie prov- inces than elsewhere in Canada95 Significant differences in the Big Five personal ity traits have been reported across regions of the United States and United Kingdom. There is no comparable research in Canada, but a recent survey suggests that openness to experience and emotional stabil ity are highest in British Columbia and lowest in Quebec.96 Why do Canadians vary in their values and personal ities across regions? One explanation is that regional institutions-such as local governments, educational systems, and dominant rel igious groups-have a greater influence than do national institutions on social ization practices and resulting personal values. For instance, research suggests that the number of rules and social controls (called cultural tightness) within a geographic area explains differences in personality and values across the country.97 It is tempting to believe that the physical environment influences a person's values and personality. For instance, research has found that residents of mountainous areas of the United States are, on average, more introverted than residents who Jive near the ocean. However, the physical envi- ronment probably ha~ a limited effect on individual traits and values. Instead, evidence suggests that people migrate to places that are more compatible with their values and self-views98 Canadian versus American Values Canadians increasingly shop at American-owned stores and have close associations with friends and co-workers in the United States. Yet the values held by people in these two countries are more divergent today than a few decades ago. "Canadians may like Americans, speak the same language, and consume more of their fast food and popular culture, but we embrace a different hierarchy of values," writes social policy researcher Michael Adams.99 Another Canadian cultural expert suggests that the 49'h parallel border is more than just an imaginary geo- graphic division; it is a symbol of the widening ideological divide in North America. 100 Canadians and Americans are similar in many ways, but they have also consistently differed over the years on several key values. One difference, reported in several studies, is that Canadians have significantly higher tolerance or moral permissiveness than do Americans. This is reflected in greater 58 Part Two Individual Behaviour and Processes acceptance of nontraditional families and of multicultural immigration. Canadians are also more will- ing to allow collective rights over individual rights and are Jess accepting of large wealth differences within society. Another cultural difference is that Canadians are much Jess likely than Americans to be associated with a rel igious institution and to believe that these institutions should influence public policy. Canadians are also much more likely to bel ieve that organizations work better without a single leader. Perhaps the most s ignificant difference in values between the two countries is in beliefs about patriarchal authority. In the early 1980s, more than 40 percent of Canadians and Americans agreed that the father should be the master of the home. Today, 24 percent of Canadians hold this view, compared to 4 1 percent of Americans. 101 Chapter Summary L01 Describe the four factors that dir ectly influence individual behaviour and perfomtance. Four variables-motivation, ability, role perceptions, and situational factors-which are represented by the acronym MARS, directly in fluence individual behaviour and performance. Motivation repre- sent~ the forces within a person that affect his or her d irection, intensity, and persistence of voluntary behaviour; ability includes both the natural aptitudes and the learned capabi lities required to successfully complete a task; role perceptions are the extent to which people understand the job duties (roles) assigned to them or expected of them; situational factors include conditions beyond the employee's immediate control that constrain or facilitate behaviour and performance. L02 Summarize the five types of individual behaviour in or ganizations. There are five main types of workplace behaviour. Task performance refers to goal-directed behav- iours under the individual's control that support organ izational objectives. It includes proficiency, adaptivity, and proactivity. Organizational citizenship behaviours consist of various forms of cooperation and helpfulness to others that support the organization's social and psychological context. Counterproductive work behaviours are voluntary behaviours that have the potential to d irectly or indirectly harm the organization. Joining and staying with the organization refers to becoming and remaining a member of the organization. Maintaining work attendance includes minimizing absenteeism when capable of working and avoiding scheduled work when not fit (i.e., low presenteeism). L03 Describe personality and discuss how the "Big Five'' personality dimensions and four MBTI types rela te to individual behaviour in organizations. Personality is the relatively enduring pattern of thoughts, emotions, and behaviours that characterize a person, along with the psychological processes behind those characteristics. Personality is developed through heredity (nature) as well as socialization (nurture). The "Big Five" personality dimensions include conscientious- ness, agreeableness, neuroticism, openness to experience, and extraversion. Conscientiousness and extraversion are the best overall predictors of job performance in most job groups. Extraversion and openness to experience are the best predictors of adaptive and proactive performance. Emotional stability (low neurotic ism) is also associated with better adaptivity. Conscientiousness and agreeableness are the two best personal ity predictors of organiza- tional citizenship and (negatively) of counterproductive work behaviours. Based on Jungian personality theory, the Myers-Briggs Type Indicator (MBTI) identifies competing orienta- tions for getting energy (extraversion versus introversion), perceiving information (sensing versus intuiting), pro- cessing information and making decisions (thinking versus feeling), and orienting to the external world Gudging versus perceiving). The MBTI improves self-awareness for career development and mutual understanding but is more popular than valid. L04 Summarize Schwartz's model of individual values and discuss the conditions where values influence behaviour. Values are stable , evaluative beliefs that guide our preferences for outcomes or courses of action in a variety of s ituations. Compared to personality traits, values are evaluative (rather than descriptive), more likely Chapter Two Individual Behaviour, Personality, and Values 59 to conflict with each other, and are formed more from socialization than heredity. Schwartz's model organizes 57 values into a circumplex of ten dimensions along two bipolar dimensions: from openness to change to conser- vation and from self-enhancement to self-transcendence. Values influence behaviour in three ways: (I) shaping the attractiveness of choices, (2) framing perceptions of reality, and (3) aligning behaviour with self-concept and sel f-presentation. However, the effect of values on behaviour also depends on whether the situation supports or prevents that behaviour and on how actively we think about values and understand their relevance to the s ituation. Values congruence refers to how similar a person's values hierarchy is to the values hierarchy of another source (organ ization, team, etc.) LOS Describe three ethical principles and discuss three factors that influence ethical behaviour. Ethics refers to the study of moral principles or values that determine whether actions are right or wrong and outcomes are good or bad. Three ethical principles are utilitarianism (greatest good for the greatest number), individual right~ (upholding natural rights), and distributive justice (same or proportional benefits and burdens). Ethical behaviour is influenced by the degree to which an issue demands the application of ethical principles (moral intensity), the individual's abil ity to recogn ize the presence and relative importance of an ethical issue (moral sensitivity), and situational forces. Ethical conduct at work is supported by codes of ethical conduct, mechanisms for commun icating ethical violations, the organization's culture, and the leader's behaviour. LOG Describe five values commonly studied across cultures and discuss the diverse cultures within Canada. Five values commonly studied across cultures are individualism (valuing independence and personal uniqueness): collectivism (valuing duty to in-groups and to group harmony); power distance (valuing unequal dis- tribution of power); uncertainty avoidance (tolerating or feeling threatened by ambiguity and uncertainty); and achievement-nurturing orientation (valuing competition versus cooperation). Canada is a multicultural society, but its deep-level diversity extends beyond racial and ethnic groups. Anglo- phones and francophones differ with respect to several values (deference to authority, moral permissiveness, e tc.), but they converge on others. All regions in Canada differ from one another on some values (e.g., egalitarianism and personal responsibility) and personality traits (e.g., openness to experience). Canadians and Americans are s imilar in many ways, but they also have long-standing cultural differences, particularly regarding the values of to lerance, collective rights, secularism, and patriarchal authority. Key Terms ability achievement-nurturing orientation agreeableness collectivism conscientiousness counterproductive work behaviours (CWBs) extraversion five-factor (Big Five) model (FFM) individualism mindfulness moral intensity moral sensitivity motivation Myers-Briggs Type Indicator (MBTI) neuroticism openness to experience organizational citizenship behaviours (OCBs) personality power distance role perceptions task performance uncertainty avoidance Critical Thinking Questions I. A provincial government department has high levels of absenteeism an10ng the office staff. The head of office administration argues that employees are misusing the organization's s ick leave benefits. However, some of the mostly female staff members have explained that family responsibilities interfere with work. Using the MARS model, as well as your knowledge of absenteeism behaviour, discuss some of the possible rea~ons for absenteeism here and how it might be reduced. 2. It ha~ been said that all employees are motivated. Do you agree with this statement? 60 Part Two Individual Behaviour and Processes 3. Studies report that heredity has a strong influence on an individual's personality. What are the implications of this in organ izational settings? 4. All candidates applying for a management trainee position are given a personality test that measures the five dimensions in the five-factor model. Which personality traits would you consider to be the most important for this type o f job? Explain your answer. 5. Compare and contrast personality with personal values, and identify values categories in Schwartz's values c ircumplex that likely relate to one or more personality dimensions in the five-factor personality model. 6. The CEO and two other executives at an automotive part~ manufacturer were recently fired after being charged with fixing prices on several key automotive parts sold to the auto industry. Executives at competing manu- facturers face the same charges for also participating in this collus ion. Profit margins have come under intense pressure in the industry, which could cause one or more auto parts firms (possibly this company) to go bank- rupt. When the wrongdoing was discovered, most employees involved in product pricing (but not implicated in price fixing) were surprised. The executives were highly respected in their fields of expertise, so many staff members interpreted the unusual pricing decis ions as a new strategy, not an illegal activity. Apply your knowl- edge of personal and ethical values and behaviour to explain why the unethical activity may have occurred. 7. "All decisions are ethical decisions." Comment on this statement, particularly by re ferring to the concepts of moral intensity and moral sensitivity. 8. People in a particular South American country have high power distance and high collectivism. What does this mean, and what are the implications of this information when you (a senior executive) visit employees working for your company in that country? Case Study: SNC-LAVALIN GROUP INC. by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canada) Bribery of foreign public officials, conspiracy to commit fraud and forgery, money laundering, possessing prop- erty obtained by crime, and attempts to secretly smuggle the son of a former dictator into safer countries. Sounds like the plot of a twisted crime novel. Yet these are the charges laid against former executives at SNC-Lavalin (SNCL), one of Canada's largest engineering and construction firms. The Royal Canadian Mounted Pol ice allege that over a decade or longer, SNCL funnelled more than S 120 million through offshore bank accounts as bribes to secure contracts in Libya. Separately, the World Bank, the African Development Bank, Swiss pol ice, and other entities uncovered evidence that SNCL bribed or attempted to bribe government staff and leaders to win contracts in Africa and Asia. SNCL is also being investigated for unethical activities in contract bidding on a major Canadian project involving a Montreal superhospital. Almost a dozen former SNCL executives, most of whom held senior positions, e ither face charges of criminal activity or are under investigation . The company and its I 00 subsidiaries have been banned for a decade from bidding on World Bank- funded contracts. The World Bank and other investigators report that in several contracts SNCL processed bribes through an expense line called "project consultancy cost" or PCC. For example, SNCL recently settled a corruption case fi led by the African Development Bank, which had discovered project consultancy cost items representing 7.5 percent of the total contract value of two SNCL road projects in Uganda and Mozambique. The engineering firm has acknowledged that none of these expenses were legitimate. "Everybody used this term, and all know what that means," admit~ SNCL's former director of international projects. "Sometimes it was 'project consultancy cost,' sometimes 'project commerc ial cost,' but [the) real fact is the intention is [a) bribe." SNCL paid many of the PCC bribes indirectly through employees. One SNCL engineer in Nigeria said he was to ld to use his personal funds to pay a Nigerian official for a "soils investigation." The official had selected the engineering firm for a contract. The engineer was subsequently reimbursed by SNCL through a ficti tious com- pany. When asked why he participated in the kickback scheme, the engineer (who now works in India for another company) replied: "When the boss a~ks, in that part of the world ... what would you do if you were put in my shoes if you were in a remote area o f Nigeria?" Another way that SNCL executives apparently bribed offic ials wa~ through "agent fees." Re taining a local agent is common and sometimes required for foreign contract~ bids to arrange permit~, imports, and other activi- ties. However, investigators uncovered numerous questionable transfers of large funds from SNCL to banks in Switzerland, the Bahan1as, and other countries. The largest corruption of the "agent fee" process involved SNCL transferring more than $ 120 million over 10 years to a Swiss bank account controlled by a SNCL executive vice-president working in North Africa and Chapter Two Individual Behaviour, Personality, and Values 6 1 later at headquarters in Montreal. The executive was subsequently convicted and served jail time in Switzerland for corruption and money laundering regarding these funds, S4 7 million of which he handed over to Swiss authori- ties as part of that conviction. During the Swiss trial, the executive admitted d1at he bribed Saadi Gaddafi, a son of Libya's dictator at that time, for the purpose of having SNCL win five major contracts in Libya. In sepa- rate charges, an RCMP affidavit claims that the same executive masterminded a failed attempt to smuggle Saadi Gaddafi and his family into Mexico. A former SNCL contractor in Canada spent 18 months in a Mexican prison in relation to that mission. SNCL is suing the executive convicted in Switzerland and others for recovery o f the transferred funds, claim- ing that they were intended as legitimate agent fees. The executive counterclaims that the top brass (below the board level) had arranged or knew these funds were being used for bribery payments and that the executive was following orders. Separate actions by SNCL's CEO at the time lend support to the jailed executive's claims. Specifically, in spite of opposition from the chief financial officer and head of international operations, the CEO authorized undocumented payments totalling $56 million to unknown "agents" in Libya and Bahamas. Quebec's anti-corruption police say the CEO's largest undocumented payment ($22.5 million sent to the Bahamas) was a bribe to win a major Montreal superhospital contract. The CEO resigned when an internal review informed SNCL's board o f the CEO's actions. The board granted the CEO a severance payout, but the severance payments were later stopped when Quebec's anti-corruption police charged the former CEO with fraud. Another SNCL vice-president now facing several charges also admits to engaging in bribery and related crimes. He explained that SNC-Lavalin had "a corporate culture where it was common practice to do all that was necessary, including the payment of 'commissions' and other benefits to obtain contracts, including in Libya" The second executive also argued that he was under pressure to engage in these illegal activities because the executive above him said "that he had to follow their orders to satisfy their expectations." In fact, a few former SNCL execu- tives have since tried to sue the company for wrongfu l dismissal on the grounds that their illegal activities were required by the company to keep their jobs. SNCL's board of directors seems to have downplayed personal responsibility for these event~. Very early in the RCMP investigation, SNCL's board received an anonymous internal letter describing the bribery activities, yet the board later admitted that it only "took note" of the allegations, pointing out that they have "received anonymous letters before that have no credibility." And when the extent of wrongdoing at SNCL eventually became public, the board chair said: "Clearly, our board of directors can't govern something that they don' t know about, or prevent something they are not aware of." Discussion Questions I. Use the MARS model to discuss the main direct predictors of wrongdoing at SNC-Lavalin. 2. Explain how moral sensitivity and moral intensity apply to the unethical behaviour among several SNC- Lavalin executives and other staff. 3. What steps should SNC-Lavalin and other companies in this s ituation take to minimize these types of corpo- rate wrongdoing? Sources: J. Castaldo. •'SNC Lavalin•s Missing Millions Mess: Is Ben Aissa Responsible?." Canadian Bw;ine.ts, JuJy 9, 2012: T. McMahon and C. Sorensen. "Boardroom Blunders at SNC-Lav-.Uin." Maclean.•. December 5. 2012. 24; D. Seglins, "SNC- Lavalin International Used Secret Code for ' Bribery' Payments." CBC News, May 15,2013: "SNC-Lavalin Says Former Executive's Illegal Actions Justify Firing." Mac/eans. May 17. 2013; J. Nicol and D. Seglins. "RCMP Moving to Freeze Asset• in Widening SNC-Lavalin Probe." CBC News. May 23. 2013: B. Hutchinson. "The 'Clandestine World' of SNC's Fallen Star," National Post (Toronto). March 19,2015. FP l: D. Hasselback. "SNC-Lavalin Sue.• Former Executives over Alleged Kickbacks in Libya." National Post (foronto). 9 April2015: R. Marowit•. "SNC-Lavalin Settle.• Corruption Case Brought by African Development Bank." Canadian Press, October 2, 2015: "SNC-Lav-.Uin Executi,•e C laims He Was Scapegoat in Gadhafi Bribery Scheme." Global Constructimt Review (London), September 14,2015: R. Marowits. "SNC-Lavalin Still Hoping to Resolve Criminal Charges as Hearing Set for 2018." Canadian Press. February 27. 2016: A. Derfel. "Alleged Bribery Behind MUHC Superhospital Contract: Affidavit Suggests Swiss Police Alerted Canadian Officials." Montreal Gazette. 10 August 2016. Case Study: ETHICS DILEMMA VIGNETTES by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canada) Purpose This exercise is designed to make you aware of the ethical di lemmas people face in various business s ituations, as well as the competing principles and values that operate in these situations. 62 Part Two Individual Behaviour and Processes Instructions (Small Class) The instructor will form teams of four or five students. Team members wi ll read each case below and discuss the extent to which the company's action in each case was ethical. Teams should be prepared to justify their evaluation using ethics principles and the perceived moral intensity of each incident. Instructions (Large Class) Working alone, read each ca~e below and determine the extent to which the company's action in each case was ethical. The instructor will use a show of hands to determine the extent to which students believe the case represents an ethical dilemma (high or low moral intensity) and the extent to which the main people or company in each incident acted ethically. CASE ONE A large multinational grocery chain that emphasizes healthy li festyles is recognized as one of the nation's "greenest" companies, has generous employee benefits, and is perennially rated as one o f the best places to work. Employees receive a 20 percent discount on company products. However, those who partic ipate in the company's voluntary "Healthy Discount Incentive Program" receive up to an additional 10 percent discount on their purchases (i.e., up to a total 30 percent discount). These additional discounts are calculated from employ- ees' blood pressure, total cholesterol (or LDL) levels, Body Mass Index (BMJ), and nicotine-free lifestyle. For example, the full additional I 0 percent discount is awarded to those who do not use nicotine products, have 110no or lower blood pressure, have cholesterol levels under 150, and have a BMI o f less than 24. Employees do not receive the additional discount if they use nicotine products, or have any one of the following: blood pressure above 140/90, cholesterol of 195 or higher, or BMI of 30 or higher. In his letter to employees when announcing the plan, the CEO explained that these incentives "encourage our Team Members to be healthier and to lower our healthcare costs." CASE TWO A 16-year-old hired as an office administrator at a small import services company started posting her thoughts about the job on her Face book site. After her firs t day, she wrote: "first day at work. omg II So dull !!" Two days later, she complained "all i do is shred holepunch n scan paper''' omg!" Two weeks later she added "im so totally bord!! !" These comments were intermixed with the other usual banter about her life . Her Facebook s ite did not mention the name of the company where she worked. Three weeks after being hired, the employee was called into the owner's office, where he fired her for the comments on Facebook, then had her escorted from the building. The owner argues that these comments put the company in a bad light, and her "display o f disrespect and dissatisfac- tion undermined the relationship and made it untenable." CASE THREE The waiter at a cafe in a large c ity mixed up Heidi Clarke's meal order with the meal that a male customer at a nearby table had requested. The two strangers discovered the mistake and briefly enjoyed a friendly chat while swapping plates. The male patron departed soon after but accidentally left his new tuxedo jacket behind on his chair. Clarke wanted to meet him again, so she took the jacket home. Following a friend's suggestion, Heidi launched a YouTube video and website, in which she shyly told her story, detailed the jacket's features, and promi- nently displayed a label with the nan1e o f a popular fashion retailer. The website even included photos of Heidi posing in the jacket. The next day, she gave the cafe staff the jacket and a note with her nan1e and phone number. Heidi's YouTube video soon went viral, her website crashed from so many visitors, and a major newspaper and te levision station featured Heidi's quest to find the man with the missing jacket. The incident is a ro mantic reversal of the Cinderella story ... except it was a fake event staged by a marketing company. "Heidi" is an actress and model hired by the marketer to promote the fashion retailer's new line of jackets for men. A partner at the marketing firm justi fied the hoax by saying that "when you've got a very well-established brand you need to do something that's got talkability and intrigue to rea~sess what that brand is about." The marketing executive argued that this was an acceptable marketing event because "nobody's been harmed" and the firm intended to eventually reveal the truth. Indeed, the actress (whose real name is Lily, not Heidi) released a second video acknowledging that the incident was fake and explaining that she's a hopeless romantic who loves a good love story. CASE FOUR Computer printer manufacturers usually sell printers at a low margin over cost and generate much more income from subsequent sales of the high-margin ink cartridges required for each printer. One global printer manufacturer now designs its printers so that they work only with ink cartridges made in the san1e region. Ink cartridges pur- chased in Canada will not work with the same printer model sold in Europe, for example. This "region coding" of ink cartridges does not improve performance. Rather, it prevents consumers and grey marke ters from buying the product at a lower price in another region. The company says this policy allows it to maintain stable prices within a region rather than continually changing prices due to currency fluctuations. Chapter Two Individual Behaviour, Personality, and Values 63 CASE FIVE A large European bank requires all employees to open a bank account with that bank. The bank deposits employee paycheques to those accounts. The bank explains that this is a formal pol icy which all employees agree to at the time of hire. Furthermore, fai lure to have an account with the bank shows disloyalty, which could limit the employee's career advancement opportunities with the bank. Until recently, the bank has reluctantly agreed to deposit paycheques to accounts at other banks for a small percentage of employees. Now, bank executives want to reinforce the policy. They announce that employees have three months to open an account with the bank or face disciplinary action. Class Exercise: PERSONAL VALUES EXERCISE Purpose This exercise is designed to help you understand Schwartz's values model and relate its e lements to your personal values and the values held by others in your class. Instructions Your instructor will distribute a sheet with 44 words and phrases representing different personal values. Read these words and phrases carefully, then fo llow these steps: I. Pick THREE (3) of these words/phrases that represent the MOST important values to you personal ly. Print each of the three values on the three yellow-coloured sticky (Post-It) notes provided by your instructor (i.e., print one value on each note). Do not put your name on any sticky notes. 2. From the remaining 4 1 values on the sheet provided by your instructor, pick THREE (3) of these that represent the LEAST important values to you personally. Print each of the three values on three sticky notes of the second colour provided by your instructor (i.e., print one value on each note). 3. The instructor will advise you what to do with the six stick-y notes on which you wrote your most and least important values. 4. The class will engage in a debriefing, using the information created in the third step of this activity. Self-Assessments for Chapter 2 I SELF-ASSESSMENT NAME DESCRIPTION J Can you identify personality traits Personality influences all a..~pects of our Jives. including the words we use from blogging words? when writing blogs. In fact. some companies now use sophisticated software to estimate the personality tra.it'i of job applicant'i from the words they use in blogs and other online writing. This self-assessment estimates how well you interpret someone•s personality in blogs and other writing. I What is your Big Five personal ity? Personality experl'i have organized the dozens of personality trait'i into five main I dimensions. known a'i the five-factor or "Big Five" model. Each dimension I consists of several specific personality traiL~ that cluste r together. Most scholarly research on personality relies on this model. but it is also useful in everyday life as a relatively easy categorization of personali ties. This self-assessment estimate.'i your personality on the Big Five dimensions. I Are you introverted or extraverted? One of the most widely studied and discussed personality dimensions is I introversion~extraversion. Introversion char.tcterizes people who tend to be quiet I shy. and cautious. Extraversion char.tcterizes people who tend to be outgoing. talkative. sociable. and a...,;sertive. This self·as.sessment estimates the extent to I which you have an introverted or extraverted personality. Are you a sensing or intuitive type? Nearly a century ago. Swiss psychiatrist Carl Jung proposed that personality is primarily represented by the individual·s preferences regarding perceiving and judging information. Jung explained that perceiving. which involves how people prefer to gather information or perceive the world around them. occurs through two competing orientations: sensing (S) and intuition (N). This self·a.'isessment I estimate.' your score on this Jungian personality type (SIN). Colllinued 64 Part Two Individual Behaviour and Processes I SELF-ASSESSMENT NAME --+-D_ES_ CRJPTION _j What are your dominant values? Values are stable. evaluative beliefs that guide our preferences for outcomes or courses of action in a v-.triety of situations. They are perceptions about what is good or bad. right or wrong. \Ve arrange our personal values into a hier.u-chy of preferences. called a value system. Schwartz's values circumplex organizes the dozens of personal values into I 0 categories placed in a circle (circumplex). This self-assessment assesses the relative importance to you of the I 0 categories of I values in Schv.'Jim Rankin/Toronto Star/
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Chapter Three Perceiving Ourselves and Others in Organizations 75
PERCEPTUAL ORGANIZATION AND INTERPRETATION
We pay attention to a tiny fraction of the stimuli received by the senses. Even so, through various per-
ceptual grouping strategies, the human brain further reduces the huge volume and complexity of the
information received. Perceptual grouping occurs mostly without our awareness, yet it is the founda-
tion for making sense of things and fulfilling our need for cognitive closure. The most common and far-
reaching perceptual grouping process is ca tegor ical thin king-the mostly nonconscious process of
organizing people and objects into preconceived categories that are stored in our long-term memory.42
People are usually grouped together based on their observable similarity, such as gender, age, race,
clothing style, and so forth. We discuss this categorization process in the next section on stereotyp-
ing. People are also grouped together based on their proximity to each other. If you notice a group of
employees working in the same area and know that some of them are marketing staff, you will likely
assume that the others in that group are also marketing staff.
If:::\ How much perceptual structure do you need? You can discover your need for
~ perceptual structure by locating this self-assessment in Connect.
Another form of perceptual grouping is based on the need for cognitive closure. When listening to
others discuss what happened at a meeting you didn’t attend, your mind fills in unstated details, such
as who else was there and where it was held. Percepn1al grouping also occurs when we perceive trends
from ambiguous information. Several studies have found that people have a natural tendency to see
patterns that, in fact, are random events. For example, people incorrectly believe that a sports player or
gambler with a string of wins is more likely to win next time as well.43
The process of “making sense” of the world around us involves interpreting incoming information,
not just organizing it. This happens as quickly as selecting and organizing because the previously men-
tioned emotional markers are tagged to incoming stimuli, which are essentially quick judgments about
whether that information is good or bad for us. How much time does it take to make these quick judg-
ments? Recent studies estimate that we make reliable judgments about another individual’s trustworthi-
ness based on viewing a facial image for as little a~ SO milliseconds (one-twentieth of a second). In fact,
our opinion regarding whether we like or trust a person is about the same whether we see the person’s
face for a minute or a fraction of a second.44 Collectively, these sn1dies reveal that selective attention, per-
ceptual organization, and interpretation operate very quickly and to a large extent without our awareness.
Mental Models To achieve our goals with some degree of predictability and sanity, we need road
maps of the environments in which we live. These road maps, called mental mod els, are knowledge
structures that we develop to describe, explain, and predict the world around us.45 They consist of
visual or relational images in our mind, such as what the cla~sroom looks like or what happens when
we submit an assignment late. Mental models partly rely on the process of perceptual grouping to
make sense of things; they fill in the missing pieces, including the causal connection among events.
For example, you have a mental model about attending a class lecture or seminar, including assump-
tions or expectations about where the instructor and students arrange themselves in the room, how they
ask and answer questions, and so forth. In other words, we create a mental image of a cla~s in progress.
Mental models play an important role in sense making, yet they also make it difficult to see the world in
different ways. For example, accounting professionals tend to see corporate problems from an accounting per-
spective, whereas marketing professionals see the same problems from a marketing perspective. Mental models
also block our recognition of new oppommities. How do we change mental models? That’s a tough challenge.
After all, we develop these knowledge structures from several years of experience and reinforcement.
The most important way to minimize perceptual problems caused by mental models is to be aware
of and frequently question them. We also need to be more aware of our assumptions, which are often
based on mental models. Working with people from diverse backgrounds is another way to break out of
existing mental models. Colleagues from different cultures and areas of expertise tend to have different
mental models, so working with them makes our own assumptions more obvious.

76 Part Two Individual Behaviour and Processes
Specific Perceptual Processes and Problems
Within the general perceptual process are specific subprocesses and associated biases
and other errors. In this section, we discuss several of these perceptual processes and
biases as well as their impl ications for organizational behaviour, beginning with the
most widely known one: stereotyping.
STEREOTYPING IN ORGANIZATIONS
One reason why there are few women in information technology and computer science occupations is
that they, along with family and friends, tend to hold an unflattering stereotype of people in this field.
Research indicates that both women and men tend to stereotype computer scientists as intellectual
geniuses who are socially inept, in relatively poor health, loners, and fanatically addicted to their com-
puters, sc ience fiction, and video games.46 Stereotypes typically have a few kernels of truth. Yet, as the
opening case study in this chapter illustrates, the stereotype of information technology professionals
seems to be far removed from reality. Unfortunately, people have a stereotype of IT professionals that
is neither accurate nor desirable for most women.
Stereotyping is the perceptual process in which we a~sign characteristics to an identifiable group
and then automatically transfer those features to anyone we believe is a member of that group.47 The
assigned characteristics tend to be difficult to observe, such as personality traits and abilities, but they
can also include physical characteristics and a host of other qualities. If we learn that someone is a
professor, for example, we implicitly assume the person is probably also intelligent, absent-minded,
and socially challenged. Stereotypes are formed to some extent from personal experience, but they
are mainly provided to us through media images (e.g., movie characters) and other cultural vehicles.
Consequently, stereotypes are shared bel iefs across an entire society and sometimes across several
cultures, rather than beliefs that differ from one person to the next.
Historically, stereotypes were defined as exaggerations or falsehoods. This is often true, but some
feantres of the stereotype may be more likely to exist among its group members than in the general popu-
lation.48 Still, stereotypes embellish or distort the kernels of truth and include other features that are false.
Not long ago, a hundred people congregated along a block of Broadway Avenue and started
dancing to the beat of “Party Rock Anthem.” Flash mobs aren’t unusual in this section of midtown
Manhattan, but the group took many observers by surprise because they were accountants from
New Jersey. “Most people are like, ‘ I can’t believe these are a bunch of accountants;· recalls
partner Jim Bourke of WithumSmith+ Brown, the accounting firm where the flash mob participants
are employed. Along
w ith celebrating a
recent merger, the event
chipped away at old
stereotypes by showing
that accountants know
how to have fun. “We play
hard, and we work hard
as well,” said Christina
Fessler, a 28-year-old
CPA at Withum. “It really
can be fun. And I think the
era of the suit and tie at
work every day is over.”49
©Monkey Business Images/
Shutterstock

Chapter Three Perceiving Ourselves and Others in Organizations 77
Why People Stereotype People engage in stereotyping because, as a form of categorical thinking,
it is usually a nonconscious “energy-saving” process that simplifies our understanding of the world. It is
easier to remember feantres of a stereotype than the constellation of characteristics unique to everyone we
meet. A second reason is that we have an innate need to understand and anticipate how others will behave.
We don’t have much information when first meeting someone, so we rely on stereotypes to till in the miss-
ing pieces. The higher the perceiver’s need for cognitive closure, the higher their reliance on stereotypes. 50
A third explanation for stereotyping is that it is motivated by the observer’s own need for social
identity and self-enhancement. Earlier in this chapter we explained that people define themselves by
the groups to which they belong or have an emotional attachment. They are also motivated to maintain
a positive self-concept. This combination of social identity and self-enhancement leads to the process
of categorization, homogenization, and differentiation:51
Categorization. Social identity is a comparative process, and the comparison begins by catego-
rizing people into distinct groups. By viewing someone (includi ng yourself ) as a Nova Scotian,
for example, you remove that person’s individuality and, instead, see him or her a~ a prototypi-
cal representative of the group called Nova Scotians. This categorization then allows you to
distinguish Nova Scotians from people who live in, say, Ontario or Alberta.
Homogenization. To s implify the comparison process, we tend to think that people with in
each g roup are very s imilar to each other. For instance, we think Nova Scotians collec-
ti vely have similar attitudes and charac teristics, whereas Ontarians collectively have the ir
own set of characteristics. Of course, every individual is un ique, but we often lose sight of
this fact when thinking about our social identity and how we compare to people in other
social groups.
Differentiation. Along with categorizing and homogenizing people, we tend to assign more
favourable characteristics to people in our social identity groups than to people in other groups.52
This differentiation is motivated by self-enhancement because being in a “better” group produces
higher self-esteem. Differentiation is often subtle, but it can escalate into a “good guy versus
bad guy” contra~! when groups engage in overt conflict with each other. In other words, when
out-group members threaten our self-concept, we are particularly motivated (often without our
awareness) to assign negative stereotypes to them. Some research suggests that men have stron-
ger differentiation biases than do women, but we all differentiate to some extent.
Problems with Stereotyping Everyone engages in stereotyping, but this process distorts
perceptions in various ways. One distortion is that stereotypes do not accurately describe every per-
son in a social category. The traditional accountant stereotype (boring, cautious, calculating) perhaps
describes a few accountants, but it is certainly not characteristic of all, or even most, people in this
profession. Nevertheless, once we categorize someone as an accountant, the stereotypic nonobservable
features of accountants are transferred to that person, even though we have no evidence that the person
actual ly has those characteristics.
A second problem with stereotyping is stereotype threat, a phenomenon whereby members of
a stereotyped group are concerned that they might exhibit a negative feature of the stereotype. This
concern and preoccupation adversely affects their behaviour and performance, which often results in
displaying the stereotype trait they are trying to avoid. 53 For example, women perform worse on math
and science tests when sensitized to the generally false but widely held belief that women underper-
form men in these subjects. Test scores among women are also lower when they are a smal l minority
in a predominantly male class. Women achieve much higher scores when the gender stereotype or
their minority status is not apparent, such as when taking the test with many women in the class.
Almost anyone can be affected by stereotype threat, but studies have particularly observed
it in some minori ty groups and in older people. Stereotype threat occurs because members of a
stereotyped group anxiously avoid confi rming the undesi rable trait and try to push the negative
image from their mind. These two cognitive activ ities divert energy and attention, which makes it
more di fficult to perform the task well. The negative stereotype can also weaken self-efficacy; it is

78 Part Two Individual Behaviour and Processes
challenging to be confide nt in your ability when your group ‘s stereotype suggests that confide nce
is misplaced.
A third proble m with stereotyping is that it lays the foundation for discriminatory attitudes and
behaviour. Most of this perceptual bias occurs as unintentional (systemic) discrimination, whereby
decision makers rely on stereotypes to establish notions of the ” ideal” person in specific roles. A person
who doesn’t fit the ideal tends to receive a less favourable evaluation than someone who is compat-
ible with the occupational stereotype. Systemic discrimination may partly explain why women are
more likely than men to leave information technology careers. “Coming up through the technical ranks
I have always felt that I had to work twice as hard to get equal recognition as my male counterparts,”
says a female information security special ist at the BBC in London. She points out that her male
colleagues treat her as an equal. But their mistakes are usually quickly forgotten, whereas her errors
receive more attention because they affirm the (false) stereotype that IT is more difficult for women.54
Unintentional systemic discrimination also affect~ employment opportunities and salaries. Consider the
following example: Science faculty from several research-intensive American universities were given the
application materials of an undergraduate sntdent who was purportedly applying for a science laboratory
manager job. Half of the faculty reviewed materials from a male applicant; the other half looked at materials
from a female applicant. The male and female applicant materials were identical except for the name, yet the
male applicant received significantly higher ratings than the female applicant on competence and hireability.
Furthermore, faculty members recommended an average salary of U.S. $30,238 for the male applicant but
only $26,507 for the female applicant. Female faculty exhibited as much gender bia~ a~ the male faculty. 55
Worse than syste mic discrimination is intentional discrimination or prejudice, in which people
hold unfounded negative attitudes toward people belonging to a particular stereotyped group.56 Sys-
temic d iscrimination is implicit, automatic, and unintentional, whereas intentional discrimination
deliberately puts the target person at an unfair disadvantage. It would be nice to believe that prejudice
is disappearing, but unfortunately it still exists. As an example, a Calgary fire captain temporarily
assigned to a different station noticed that three female firefighters were employed among the crew,
and asked male crew members how they got “stuck with so many (expletives)” at their hall. When
asked to clar ify, he repeated the obscenity against women. Initially fired for the remark, the captain
was soon reinstated with a brief demotion and suspension. More recently, several hundred female
RCMP officers filed a class actio n lawsuit, with evidence that their careers and personal health had
suffered from years of gender-based discrimination and sexual harassment. The evidence was so
overwhelming that the RCMP Commissioner, Bob Paulson, issued a lengthy public apology. 57
Women represent about 4 5 percent of the Canadian workforce and almost one-third of
middle managers. Yet just a few years ago (20 1 0) they comprised only 12 percent of board
members on Canadian publicly-traded (TSX) companies. Fortunately, w idespread attention and
government initiatives have pushed against systemic discrimination, so women now represent
about 20 percent of
board members of
TSX compan ies. The
percentages of women
on corporate boards
are highest in Norway
(46.7 percent), France
(34.0 percent), and
Sweden (33.6 percent).
The lowest female
representation on
corporate boards occurs
in the Middle East (about
1 percent) and Japan
(3.5 percent)s 8
©Hero lmagesfGeuy Images

Chapter Three Perceiving Ourselves and Others in Organizations 79
If stereotyping is such a problem, shouldn’t we try to avoid this process altogether? Unfortunately,
it’s not that simple. Most experts agree that categorical thinki ng (including stereotyping) is an auto-
matic and nonconscious process. Special ized training programs can minimize stereotype activation to
some extent, but for the most part the process is hardwired in our brain cells.59 Also remember that
stereotyping helps us in several valuable (although fallible) ways described earlier: minimizing mental
effort, filling in missing information, and supporting our social identity.
‘The good news is that while it is very difficult to prevent the activation of stereotypes, we can minimize the
application of stereotypic information. In other words, although we automatically categorize people and
assign stereotypic traits to them, we can consciously minimize the extent that we rely on that stereotypic
information. Later in this chapter, we identify ways to mi nimize stereotyping and other perceptual bia~s.
ATTRIBUTION THEORY
Another widely-discussed percepntal phenomenon in organizational settings is the attr ibution process. 60
Attribution involves forming beliefs about the causes of behaviour or events. Generally, we perceive
whether an observed behaviour or event is caused mainly by characteristics of the person (internal factors)
or by the environment (external factors). Internal factors include the person’s abi lity or motivation, wherea~
external factors include resources, co-worker support, or luck. If someone doesn’t show up for an important
meeting, for instance, we infer either internal attributions (the co-worker is forgetful, lacks motivation, etc.)
or external attributions (traffic, a family emergency, etc.) to make sense of the person’s absence.
People rely on the three attribution rules–consistency, distinctiveness, and consensus-to decide
whether someone’s behaviour and performance are caused mainly by their personal characteristics or by
environmental influences (see Exhibit 3.4).61 To help explain how these three attribution rules operate,
imagine a situation where an e mployee is making poor-quality products on a particular machine.
EXHIBIT 3.4 Attribution Theory Rules
Yes
(high consistency)
Co nsistency
Did this person act
this way in t his
situation in the past?
Yes
(high consistency)
i
Yes
(low distinctiveness)
D istinctiveness
Does this person act
this way in other
situations?
No
(high distinctiveness)
No
(low consensus)
Consensus
Do other people
act this way
in this situation?
Yes
(high consensus)

80 Part Two Individual Behaviour and Processes
We would probably conclude that the employee Jacks ski ll or motivation (an internal attribution) if the
employee consistently makes poor-quality products on this machine (high consistency), the employee
makes poor-quality products on other machines (low distinctiveness), and other employees make good-
quality products on this machine (low consensus).
In contrast, we would conclude that there is something wrong with the machine (an external attribu-
tion) if the employee consistently makes poor-quality products on this machine (high consistency), the
employee makes good-quality products on other machines (high distinctiveness), and other employees
make poor-quality products on this machine (high consensus). Notice that consistency is high for both
internal and external attributions. This occurs because low consistency (the person’s output qual ity
on this machine is sometimes good and sometimes poor) weakens our confidence about whether the
source of the problem is the person or the machine.
The attribution process is important because understanding cause-effect relationships enables us to
work effectively with others and to assign praise or blame to them62 Suppose a co-worker didn’t com-
plete his or her task on a team project. You would approach this situation differently if you believed
the co-worker was lazy or Jacked sufficient skill (an internal attribution) than if you believed the poor
performance was due to Jack of time or resources available to the co-worker (an external attribution).
Similarly, our respect for a leader depends on whether we bel ieve his or her actions are due to per-
sonal characteristics or the situation. We also react differently to attributions of our own behaviour and
performance. Students who make internal attributions about their poor grades, for instance, are more
likely to drop out of their programs than if they make external attributions about those grades63
Attribution Errors We are strongly motivated to assign internal or external attributions to some-
one’s behaviour, but this perceptual process is also susceptible to errors. One such error is self-serving
bias-the tendency to attribute our failures to external causes more than internal causes, whi le credit-
ing our successes more to internal than external factors.64 Simply put, we take credit for our successes
and blame others or the situation for our mistakes. In annual reports, for example, executives mainly
refer to their personal qualities as reasons for the company’s successes and to competitors, unexpected
legislation, and other external factors as reasons for the company’s failures. Similarly, a study of entre-
preneurs overwhelmingly cited situational causes for their business failure (e.g., funding, the economy)
wherea~ they understated personal causes such as Jack of vision and social skills65
Why do people engage in self-serving bia~? Fictional New York crime investigator Philo Vance gave
us the answer nearly a century ago when he quipped: “Bad luck is merely a defensive and self-consoling
synonym for inefficiency.’>M In other words, self-serving bias is associated with the self-enhancement pro-
cess described earlier in this chapter. By pointing to external causes of their own fai lures (e.g., bad luck)
and internal causes of their successes, people generate a more positive (and self-consoling) self-concept.
Another widely studied attribution error is fundamenta l attribution error (also called corre-
spondence bias), which is the tendency to overemphasize internal causes of another person’s behav-
iour and to discount or ignore external causes of their behaviour.67 According to th is perceptual
error, we are more likely to attribute a co-worker’s late arrival for work to Jack of motivation rather
than to situational constraints (such as traffic congestion). The explanation for fundamental attri-
bution error is that observers can’ t easi ly see the external factors that constrain another person’s
behaviour. Also, people like to think that human beings (not the s ituation) are the prime sources of
their behaviour. However, fundamental attribution error might not be as common or severe as was
previously thought. There is evidence, for instance, that people from Asian countries are less likely
to engage in th is bias because those cultures emphasize the context of behaviour more than do West-
ern cultures6 8 In any case, a rev iew of past studies suggests that fundamental attribution error isn’t
very noticeable in any society.69
SELF-FULFILLING PROPHECY
Self-fulillling prophecy occurs when our expectations about another person cause that person to act in
a way that is consistent with those expectations. In other words, our perceptions can influence real ity.
Exhibit 3.5 illustrates the four steps in the self-fulfill ing prophecy process using the example of a

Chapter Three Perceiving Ourselves and Others in Organizations
EXHIBIT 3.5 The Self -Fulfilling Prophecy Cycle
4. Employee’s behaviour
becomes more consistent
with the supervisor’s initial
expectations
1. Supervisor forms
expectations about the
employee
3. Supervisor’s behaviour
affects the employee’s ability and
motivation (self

Chapter Four Workplace Emotions, Attitudes, and Stress 103
EMOTIONAL DISSONANCE
Most jobs expect employees to engage in some level of emotional labour, such as displaying cour-
tesy to unruly passengers or maintaining civility with co-workers. Employees often need to display
emotions that are quite different from the emotions they are actually experiencing at that moment.
This incongruity produces an emotional tension called emotional dissonance. Employees often handle
these discrepancies by engaging in surface acting; they pretend that they feel the expected emotion
even though they actually experience a different emotion.
One problem with surface acting is that it can lead to higher stress and burnout.39 By definition, emo-
tional labour requires effort and attention, which consume personal energy. Emotional labour also poten-
tially requires people to act contrary to their self-view, which can lead to psychological separation from self.
These problems are greater when employees frequently need to display emotions that oppose their genuine
emotions. A second problem with surface acting is that pretending to feel particular emotions can be chal-
lenging. A genuine emotion automatically activates a complex set of facial muscles and body positions, all
of which are difficult to replicate when pretending to have these emotions. Meanwhile, our true emotions
tend to reveal themselves a~ subtle gestures, usually without our awareness. More often than not, observers
see when we are faking and sense that we are feeling a different emotion to the one we are displaying.40
Employees can somewhat reduce psychological damage caused by surface acting by viewing their
acting as a natural part of their role. Flight attendants can remain pleasant to unruly pa~sengers more
easily when they define themselves by their customer service skill. By adopting this approach, faki ng
does not pose a threat to one’s self-view. Instead, it is demonstration of our ski ll and professionalism.
The dissonant interactions are accomplishments rather than dreaded chores.4 1 Another strategy is to
engage in deep acting rather than surface acting.42 Deep acting involves visualizing reality differently,
which then produces emotions more consistent with the required emotions. Faced with an angry pas-
senger, a flight attendant might replace hostile emotions with compassion by viewing the passenger’s
behaviour as a sign of his or her discomfort or anxiety. Deep acting requires considerable emotional
intelligence, which we discuss next.
Emotional Intell igence
The University of South Florida (USF) College of Medicine discovered from surveys that its graduates
required emotional intelligence training to perform their jobs better. “We’ve created a lot of doctors that are
like House,” said Stephen Kla~ko (USF’s medical college dean at the time), referring to the fictional TV
physician with the caustic interpersonal style. Now some USF student~ are a~signed to one of America’s
top hospitals, where they develop their ability to understand and manage emotions through coaching and
role modelling by hospital staff. “You have to have an emotionally intelligent, collaborative, interdisciplin-
ary team practicing if you want young trainees to adopt that a~ their model,” explains the hospital CE0.43
USF’s College of Medicine is among many other organizations in increasingly recognizing that
emotional intelligence (EI) improves performance in many types of jobs. Emotional intelligence
includes a set of abilities to recognize and regulate one’s own emotions as well as the emotions of other
people. This defi nition refers to the four main dimensions shown in Exhibit 4.3. 44
Awareness of our own emotions. This is the ability to perceive and understand the meaning of
our own emotions. People with higher emotional intell igence have better awareness of their
emotions and are better able to make sense of them. They can eavesdrop on their emotional
responses to specific situations and use this awareness as conscious information.45
Management of our own emotions. Emotional intelligence includes the ability to manage our
own emotions, something that we all do to some extent. We keep disruptive impulses in check.
We try not to feel angry or frustrated when events go against us. We try to feel and express joy
and happiness toward others when the occasion calls for these emotional displays.
We re-energize ourselves later in the workday. Notice that management of our own emotions
goes beyond enacting desired emotions in a particular situation. It also includes generating or

104 Part Two Individual Behaviour and Processes
EXHIBIT 4.3 Dimensions of Emotional Intelligence
Abilities
Recognition
of Emotions
Regulation
of Emotions
Yourself
Awareness of
our own emotions
……….. of ……..
Others
Awareness of
others’ emotions
Management of
others’ emotions
Smm:e.s: D. Goleman. “An EI-Ba.->ed Theocy of Performance.” in The Emotionally Intelligent Workplace. eeL C. Cherniss aod D. Goleman
(San Franci..::co: Jossey-Bas.s. 2001). p. 28: Jordan. Peter l. and Sandra A. Lawrence. “Emotiooal intelligence in teams.: [)e..-elopment and initial vali-
dation of the short ver.oion of the Workgroup Emc.iooal lntellig.ence Prufile (WEIP-S).” Journal of Management & Organization IS (2009): 452-469.
suppressing emotions. In other words, the deep acting described earlier requires high levels of
the self-regulation component of emotional intelligence.
Awareness of others’ emotions. This dimension refers to the ability to perceive and understand
the emotions of other people.46 It relates to empathy-having an understanding of and sensitivity
to the feelings, thoughts, and situations of others (see Chapter 3). This ability includes understanding
the other person’s situation, experiencing his or her emotions, and knowing his or her needs even
though they are unstated. Awareness of others’ emotions also includes being organizationally
aware, such a~ sensing office politics and the presence of informal social networks.
Management of others’ emotions. This dimension ofEI involves managing other people’s emotions.
This includes consoling people who feel sad, emotionally inspiring your team members to complete
a class project on time, getting strangers to feel comfortable working with you, and managing dys-
functional emotions among staff who experience conflict with customers or other employees.
The four dimensions of emotional intelligence form a hierarchy.47 Awareness of your own emotions
is lowest in that hierarchy because you need that awareness to engage in the higher levels of emo-
tional intelligence. You can’t manage your own emotions if you don’t know what they are (i.e., low
self-awareness). Managing other people’s emotions is the highest level of EI because this ability requires
awareness of your own and others’ emotions. To diffuse an angry conflict between two employees, for
example, you need to understand the emotions they are experiencing and manage your emotions (and
display of emotions).
How well do you recognize and regulate emotions? You can discover your perceived
level of emotional intelligence by completing this self-assessment in Connect
EMOTIONAL INTELLIGENCE OUTCOMES AND DEVELOPMENT
Does emotional intelligence improve employee performance and well-being? A few OB experts ques-
tion the usefulness of the emotional intelligence concept, claiming that there is a Jack of agreement
on its definition and that existing concepts, such as personality and general intelligence, can be used

Chapter Four Workplace Emotions, Attitudes, and Stress 10 5
instead.48 However, a consensus is slowly emerging around the meaning of EI, and there is con-
siderable research suggesting that this concept does help us to understand what goes on in social
settings.
Most j obs involve social interaction with co-workers or external stakeholders, so employees need
emotional inte lligence to work effectively.49 Studies suggest that people with high EI are more effec-
tive team members, perform better in jobs requiring emotional labour, make better decisions involv-
ing other people, and maintain a more positive mindset for creative work. EI is also associated with
effective leadership because leaders engage in emotional labour (e.g., showing patience to employees
even when they might feel frustrated) as well as regulating the emotions of others (e.g., helping staff
members feel optimism for the future even though they just lost an important contract). However,
emotional intelligence does not improve some forms of perfonnance, such as tasks with minimal
social interaction.50
Given the potential value of emotional intelligence, it’s not surprising that some organizations try to mea-
sure this ability in job applicants. For instance, the United States Air Force (USAF) considers the emotional
As part of its modernization strategy, the Toronto Police Service wants officers with strong
emotional intelligence and empathy. Other police forces in North America have also recognized
that emotional intelligence is a critical skill for improved community relations and in de-escalating
real-time conflict. For example, the San Diego Police Department recently introduced
Effective Interactions, a course in which officers develop emotional intelligence and effective
communication skills. Members of the Baltimore Police Department attend a Cognitive Command
technique training course, which includes learning to manage emotions.
“If you describe how a good officer anywhere does their job, you’re describing what we’ve come
to recognize as emotional intelligence,” explains San Diego police psychologist Dan Blumberg. “It’s
someone who understands himself or herself and can understand emotions evoked during the j ob
and manage their emotions effectively. They understand the emotions of others and are able to use
emotions to create positive encounters.”51
©Victor Biro/Aiamy Stock Photo

106 Part Two Individual Behaviour and Processes
intelligence of applicant~ into its elite pararescue jumper training program because high EI trainees are more
than twice a~ likely as low EI trainees to complete the costly program. 52 Several organizations have also intro-
duced training programs to improve employees’ emotional intelligence. 53 For instance, new hires (including
co-op students) at Fidelity Canada take emotional intelligence training along with other soft skills and tech-
nical education. One study reported that training improved emotional intelligence among staff members at a
Netherlands residence for people with intellecntal disabilities. The EI program described the concept, gave
participants feedback on their initial EI test scores, used case studies to teach EI dimensions, and provided
professional feedback based on videos showing participants meeting with difficult clients. Along with for-
mal training program~, emotional intelligence increa~es with age; it is part of the process called maturity.
So far, this chapter has introduced the model of emotions and attitudes, as well as emotional intelli-
gence as the means by which we manage emotions in the workplace. The next two sections look at two
specific attitudes: job satisfaction and organizational commitment. These two attitudes are so impor-
tant in our understanding of workplace behaviour that some experts suggest the two combined should
be called “overall job attitude.”54
Job Satisfaction
L03 Probably the most studied attitude in organizational behaviour is job satisfaction, a per-
son’s evaluation of his or her job and work context.55 It is an appraisal of the perceived
job characteristics, work environment, and emotional experiences at work. Satisfied
employees have a favourable evaluation of their jobs, ba~ed on their observations and emotional expe-
riences. Job satisfaction is best viewed as a collection of attitudes about different aspects of the job and
work context. You might like your co-workers but be less satisfied with your workload, for instance.
How satisfied are employees at work? The answer depends on the person, the workplace, and the
country. Global surveys, such as the one shown in Exhibit 4.4, indicate with some consistency that job
satisfaction tends to be highest in the United States, India, and some Nordic countries (such as Norway
and Denmark). In this and several other surveys, Canadians report somewhat above average job satis-
faction. The lowest levels of overall job satisfaction are usual ly recorded in Hungary and some Asian
countries (such as Japan and Hong Kong).56
Can we conclude from these surveys that most employees in the United States, India, and Norway
are happy at work? Possibly, but their overall job satisfaction probably isn’t as high as these statistics
EXHIBIT 4.4 Job Satisfaction in Selected Countries57 –
90%
Based on RandstOO. Randstad Workmonitor 4th Quarter 2016. Rands;tad Holding nv (Amsterdam: f.>eeember 2016).

Chapter Four Workplace Emotions, Attitudes, and Stress 107
suggest. One problem is that surveys often ask a single direct question, such as: “How satisfied are you
with your job?” Many dissatisfied employees are reluctant to reveal their feelings to such a direct ques-
tion because this is tantamount to admitting that they made a poor job choice and are not enjoying a
large part of their life. The inflated results are evident in the fact that employees tend to report less sat-
isfaction when asked about specific aspects of their work. For instance, 79 percent of Canadian federal
government employees like their job overal l, yet only 64 percent are satisfied with how interpersonal
issues are resolved in their work unit, and only 63 percent would recommend their department or agency
as a great place to work.58 Furthermore, several sntdies report that many employees plan to look for
work within the next year or would leave their current employer if the r ight opportunity came along. 59
A second problem is that culntral values make it difficult to compare job satisfaction across countries.
People in China and Japan, for example, tend to subdue their emotions in public, and there is evidence
that they also avoid extreme survey ratings such as “very satisfied.” A third problem with job satisfaction
ratings is that job satisfaction changes with economic conditions. Employees with the highest job satis-
faction in current surveys tend to be in countries where the economies are chugging along quite well.60
JOB SATISFACTION AND WORK BEHAVIOUR
Does job satisfaction influence workplace behaviour? In general, yes! Job satisfaction affects many
of the individual behaviours introduced in Chapter 2 (task performance, organizational citizenship,
quitting, absenteeism, etc.).61 However, a more precise answer is that the effect of job satisfaction and
dissatisfaction on individual behaviour depends on the person and the situation. A useful template for
organizing and understanding the consequences of job dissatisfaction is the exit-voice-loyalty-neglect
(E VLN) mod el. As the name suggests, the EVLN model identifies four ways that employees respond
to dissatisfaction:62
Exit. Exit includes leaving the organization, transferring to another work unit, or at least trying
to get away from the dissatisfying situation. The traditional theory is that job dissatisfaction
builds over time and eventually becomes strong enough to motivate employees to search for
better work opportunities elsewhere. This is likely true to some extent, but more recent thinking
holds that specific “shock events” quickly energize employees to think about and engage in
exit behaviour. For example, the emotional reaction you experience to an unfair management
decision or a conflict episode with a co-worker motivates you to look at job ads and speak to
friends about job opportunities where they work. This begins the process of re-al igning your
self-concept away from your current employer and toward another company.63
Voice. Voice is any attempt to change, rather than escape from, the dissatisfying situation. Voice
can be a constructive response, such as recommending ways for management to improve the
situation, or it can be more confrontational, such as filing formal grievances or forming a coali-
tion to oppose a decision.64 In the extreme, some employees might engage in counterproductive
behaviours to get attention and force changes in the organization.
Loyalty. In the original version of this model, loyalty was not an outcome of dissatisfaction.
Rather, it determined whether people chose exit or voice (i.e., high loyalty resulted in voice;
low loyalty produced exit)65 More recent writers describe loyalty as an outcome, but in vari-
ous and somewhat unclear ways. Generally, they suggest that “loyalists” are employees who
respond to dissatisfaction by patiently waiting-some say they “suffer in silence”-for the
problem to work itself out or be resolved by others.66
Neglect. Neglect includes reducing work effort, paying less attention to quality, and increasing
absenteeism and lateness. It is generally considered a passive activity that has negative conse-
quences for the organization.
Which of the four EVLN alternatives do employees use? It depends on the person and situation.67
The individual’s personality, values, and self-concept are important factors. For example, people with
a high-conscientiousness personal ity are less likely to engage in neglect and more likely to engage in

108 Part Two Individual Behaviour and Processes
voice. Pa~t experience also influences which EVLN action is applied. Employees who were unsuc-
cessful with voice in the past are more likely to engage in exit or neglect when experiencing job dis-
satisfaction in the future. Another factor is loyalty, as it was originally intended in the EVLN model.
Specifical ly, employees are more likely to quit when they have low loyalty to the company, and they
are more likely to engage in voice when they have high loyalty. Finally, the response to dissatisfaction
depends on the situation. Employees are less likely to use the exit option when there are few alternative
job prospects, for example. Dissatisfied employees are more likely to use voice than the other options
when they are aware that other employees are dependent on them68
JOB SATISFACTION AND PERFORMANCE
Is a happy worker a more productive worker? Clive Schlee thinks so. The CEO of the British deli chain
Pret A Manger believes that happy employees result in happier customers and higher sales. “The first
thing I look at is whether staff are touching each other-are they smiling, reacting to each other, happy,
engaged? I can almost predict sales on body language alone,” he says. Secret shoppers scout Pret A
Manger outlets each week. If the secret shopper is served by a positive and happy employee behind the
counter, all staff members at that location receive a bonus.69
The “happy worker” hypothesis is generally true, according to major reviews of the research on this
subject. In other words, there is a moderately positive relationship between job satisfaction and per-
formance. Workers tend to be more productive ro some extent when they have more positive attitudes
toward their job and workplace.70
Why does job satisfaction affect employee performance only to some extent? One reason is that
general attitudes (such as job satisfaction) don’t predict specific behaviours very well. As the EVLN
model explains, reduced performance (a form of neglect) is only one of four possible responses to dis-
satisfaction. A second reason is that some employees have little control over their performance because
their work effort is paced by work technology or interdependence with co-workers in the produc-
tion process. An assembly-l ine worker, for instance, installs a fixed number of windshields each hour
with about the same quality of installation whether he or she has high or low job satisfaction. A third
consideration is that job performance might cause job satisfaction, rather than vice versa?’ Higher
performers tend to have higher satisfaction because they receive more rewards and recognition than do
low-performing employees. This connection between job satisfaction and performance isn’t stronger,
however, because many organizations do not reward good performance very well .
JOB SATISFACTION AND CUSTOMER SATISFACTION
Earls Restaurants Ltd. has surv ived and thrived forover30 years in a highly competitive business. As the
opening casestudytothischapterreported, a key ingredient in the Vancouver-basedcompany’ssuccess
is stated in its motto: “Great guest experiences begin with great partner experiences.” Throughout the
years, Earls’ founders and leaders have embraced the idea that customers are more satisfied wi th their
d ining experience when the cooks, servers, and other staff (all of whom are called partners at Earls)
have pos itive emotions and attitudes regarding the ir jobs and employer. This view is echoed
by The Container Store chai rman and CEO Kip Tindell. “We really believe that if you put the
employees first, they really and truly will take better care of the customer than anybody else,”
says Tindell.72
Earls Restaurants and The Container Store maintain strong customer service by applying the service
profit chain model. This model, which is diagrammed in Exhibit 4 .5, proposes that job satisfaction
has a positive effect on customer service, which flows on to shareholder financial returns. The process
begins with workplace practices that increase or decrease job satisfaction. Job satisfaction then influ-
ences whether employees stay (employee retention) as well as their motivation and behaviour on the
job. Retention, motivation, and behaviour affect service quality, which influences the customer’s sat-
isfaction, perceived value of the service, and tendency to recommend the service to others (referrals).
These customer activities influence the company’s profitability and growth. The service profit chain

Chapter Four Workplace Emotions, Attitudes, and Stress
Wegmans is America’s favourite supermarket. In fact, each year it receives several thousand
requests from people in almost every state to build more stores. Wegmans clearly values its
customers, but it does so by caring j ust as much for its employees. “What’s most important to us
109
is that our employees feel that Wegmans is a great place to work,” explains CEO Danny Wegman.
“When our people feel cared about and respected, they turn around and make our customers feel
that way too.” Wegmans invests heavily in train ing each employee, usually promotes from within,
and offers scholarships to employees. Through careful selection and leadership, the company
also nurtu res a family-like culture. “I have never loved a job more than I do Wegmans,” enthuses a
pharmacy technician near Syracuse, New York. “My co-workers are like a second family.”73
©Wegmans Food Markets, Inc.
EXHIBIT 4.5 Service Profit Chain Model
Sources: ll. Heskett. W. E. Sasser. and L A. Schlesinger. The Sen•lce Pmfit Chajn (New York: Free Press) 1997: A. l Rucci S. P. Kirn. and
R. T. Qujnn. “The Employee-Customer-Profit Chain At SearS.” Harvard Business Review 76 ( I 998): 83-97~ S. P. Brown aod S. K. Lam.
‘”‘A Meta-Analysis of Relatjonships Linkjng Employee Sati..:: faction to Cu..:;tomer Responses.” Journal of ReLailing 84. oo. 3 (2008): 243- 255.
model has considerable research support. However, the benefits of job satisfaction do take consider-
able time to flow through to the organization’s bottom Jine.74
Behind the service profit chain model are two key explanations for why satisfied employees tend to pro-
duce happier and more Joyal customers?5 One explanation is that job satisfaction tends to put employees

110 Part Two Individual Behaviour and Processes
in a more positive mood, and people in a good mood more naturally and frequently display friendliness
and positive emotions. When employees have good feelings, their display of positive emotions “rubs off’
on most (but not all) customers, so customers feel happier and consequently form a positive evaluation
of the service experience (i.e., higher service quality). The effect is also mutual; happy customers make
employees happier, which can lead to a cycle of positive emotions in the service experience.
The second explanation is that satisfied employees are less likely to quit their jobs, so they have
more work experience (i.e., better knowledge and skills) to serve clients. Lower turnover also enables
customers to have the same employees serve them on different occasions, providing more consistent
service. Some evidence indicates that customers build their loyalty to specific employees, not to the
organization, so keeping employee turnover low tends to build customer loyalty.
JOB SATISFACTION AND BUSINESS ETHICS
Before leaving the topic of job satisfaction, we should mention that job satisfaction is also an ethical
issue that influences the organization’s reputation in the community. People spend a large portion of
their time working in organizations, and many societies now expect companies to provide work envi-
ronments that are safe and enjoyable. Indeed, employees in several countries closely monitor ratings of
the best companies to work for, an indication that employee satisfaction is a virtue worth considerable
goodwill to employers. The importance of this is apparent when an organization ha~ low job satisfac-
tion. The company typically tries to hide this fact, and when morale problems become public, corpo-
rate leaders are usually quick to take steps to improve the situation.
Organizational Commitment
Organizational commitment represents the other half (with job satisfaction) of what some experts cal l
“overall job attitude.” Affective organizational commitm ent is the employee’s emotional attachment
to, involvement in, and identification with an organization. Affective commitment is a psychological
bond whereby one chooses to be dedicated to and responsible for the organization.76 The “strong sense
of family” and support for personal growth are two reasons why many employees at Earls Restaurants
have strong affective commitment toward the company.
Affective commitment is often distinguished from continuance commitmen t, which is a calcula-
tive attachment to the organization. This calculation takes two forms.77 One form occurs where an
employee has no alternative employment opportunities (e.g., ” I dislike working here but there are no
other jobs available.”) This condition exists where unemployment is high, employees lack the skills
sought by other employers, or the employee’s ski lls are so specialized that there is limited demand for
them nearby. The other form of continuance commitment occurs when leaving the company would
be a significant financial sacrifice (e.g., “I hate this place but I can’t afford to quit!”). This perceived
sacrifice condition occurs when the company offers high pay, benefits, and other forms of economic
exchange in the employment relationship, or where quitting forfeits a large deferred financial bonus.
~
How committed are you to your school? You can discover your affective commitment
as a student at your school by completing this self-assessment in Connect.
CONSEQUENCES OF AFFECTIVE AND CONTINUANCE COMMITMENT
Affective commitment can be a significant competitive advantage. 78 Employees with a strong psychological
bond to the organization are less likely to quit their jobs and be absent from work. They also have higher
work motivation and organizational citizenship, as well a~ somewhat higher job performance. Affective
commitment also improves customer satisfaction because long-tenure employees have better knowledge of
work practices and because clients like to do business with the same employees. One concern is that employ-
ees with very high loyalty tend to have high conformity, which results in lower creativity. Another problem is

Chapter Fo ur Workplace Emotions, Attitudes, and Stress 1 11
that very high commitment has sometimes been used to excuse or motivate illegal activity in defence of the
organization. However, most companies suffer from too little rather than too much employee loyalty.
In contrast to the benefits of affective commitment, employees with high levels of continuance
commitment tend to have lower performance and are less likely to engage in organizational c itizenship
behaviours. Furthermore, unionized employees with high continuance commitment are more likely
to use formal grievances, whereas employees with high affective commitment engage in more coop-
erative problem solving when employee-employer relations sour.79 Although some level of financial
connection may be necessary, employers should not rely on continuance commitment to retain staff.
Employers should focus on winning employees’ hearts (affective commitment) rather than tying them
financially to the organization (continuance commitment).
BUILDING ORGANIZATIONAL COMMITMENT
There are almost a~ many ways to build affective commitment as there are topics in this textbook, but
here are the most frequently mentioned strategies in the literature:
Justice and Support Affective commitment is higher in organizations that fulfil their obligations to
employees and abide by humanitarian values, such as fairness, courtesy, forgiveness, and moral integrity.
These values relate to the concept of organizational justice, which we discuss in the next chapter. Simi-
larly, organizations that support employee well-being tend to cultivate higher levels of loyalty in return.80
Shared Values The definition of affective commitment refers to a person’s identification with the
organization, and that identification is highest when employees believe their values are congruent with the
organization’s dominant values. Employees also experience more positive emotions when they agree with
the values underlying corporate decisions, which increases their motivation to stay with the organization.81
Trust Trust refers to positive expectations one person has toward another person or group in situ-
ations involving risk.82 Trust means putting faith in others. It is also a reciprocal activity: To receive
trust, you must demonstrate trust. Employees identify with and feel obliged to work for an organization
only when they trust its leaders. This explains why layoffs are one of the greatest blows to affective
commitment. By reducing job security, companies reduce the trust employees have in their employer
and the employment relationship.83
Organizational Comprehension Organizational comprehension refers to how well employees
understand the organization, including its strategic direction, social dynamics, and physical layout.84
This awareness is a necessary prerequisite to affective commitment because it is difficult to identify
with or feel loyal to something that you don’t know very well. Furthermore, lack of information pro-
duces uncertainty, and the resulting stress can distance employees from that source of uncertainty (i.e.,
the organization). The practical implication here is to ensure that employees develop a reasonably clear
and complete mental model of the organization. This occurs by giving staff information and opportuni-
ties to keep up-to-date about organizational events, interact with co-workers, discover what goes on in
different parts of the organization, and learn about the organization’s history and future plans. 85
Employee Involvement Employee involvement increases affective commitment by strengthen-
ing the employee’s psychological ownership and social identity with the organization.86 Employees
feel that they are part of the organization when they participate in decisions that guide the organiza-
tion’ s future (see Chapter 7). Employee involvement also builds loyalty because giving this power is a
demonstration of the company’s trust in its employees.
Organizational commitment and job satisfaction represent two of the most often studied and dis-
cussed attitudes in the workplace. Each is linked to emotional episodes and cognitive judgments
about the workplace and one’s relationship with the company. Emotions also play an important role in
another concept that is on everyone’s mind these days: stress. The final section of this chapter provides
an overview of work-related stress and how it can be managed.

112 Part Two Individual Behaviour and Processes
Work-Related Stress and Its Management
When asked if they often feel stressed by their work, most employees these days will
answer an emphatic Yes! Not only do most people understand the concept; they feel they
have plenty of personal experience with it. Stress is most often described as an adaptive
response to a situation that is perceived as chal lenging or threatening to a person’s well-being. 87 It is a
physiological and psychological condition that prepares us to adapt to hostile or noxious environmental
conditions. Our heart rate increases, muscles tighten, breathing speeds up, and perspiration increases.
Our body also moves more blood to the brain, releases adrenaline and other hormones, fue ls the system
by releasing more glucose and fatty acids, activates processes that sharpen our senses, and conserves
resources by shutti ng down our immune response. One school of thought suggests that stress is a nega-
tive evaluation of the external environment. However, critics of this cognitive appraisal perspective
point out that stress is more accurately described as an emotional experience, which may occur before
or after a conscious evaluation of the situation. 88
Whether stress is a complex emotion or a cognitive evaluation of the environment, it has become a
perva~ive experience in the dai ly Jives of most people. Stress is typically descr ibed as a negative expe-
rience. This is known as distress-the degree of physiological, psychological, and behavioural devia-
tion from healthy functioning. However, some level of stress-called eustress-is a necessary part of
life because it activates and motivates people to achieve goals, change their environments, and succeed
in life’s chal lenges. 89 Our focus is on the causes and management of distress, because it has become a
chronic problem in many societies.
GENERAL ADAPTATION SYNDROME
The word stress wa~ first used more than 500 years ago to describe the human response to harsh environmen-
tal conditions. However, it wasn’t until the 1930s that Canadian researcher Hans Selye (often described a~
the father of stress research) first documented the stress experience, called general adapta tion syndrome.
• by t he NUMBERS
Stressed Out, Burnt-Out!90
of 400 Canadian
workers surveyed say
they are stressed at
work on a day-to-day basis.
of more than 1,000
American workers
surveyed say they
are stressed at work
on a day-to-day
basis.
of all working days lost
due to ill health in the
U.K. are due to stress.
of 6,700 Americans surveyed
say they have purposely
changed jobs due to a
stressful work environment.
31″,.6 of 1,000 German workers
surveyed report that they
felt stressed at work the
previous day.

Chapter Four Workplace Emotions, Attitudes, and Stress 1 13
Selye detennined (initially by sntdying rats) that people have a fairly consistent and automatic physiological
response to stressful sintations, which helps them to cope with environmental demand~.9 1
The general adaptation syndrome consists of the three stages shown in Exhibit 4.6. The a/ann reaction
stage occurs when a threat or chal lenge activates the physiological stress responses that were noted
above. The individual’s energy level and coping effectiveness decrease in response to the initial shock.
The second stage, resistance, activates various biochemical, psychological, and behavioural mecha-
nisms that give the individual more energy and engage coping mechanisms to overcome or remove the
source of stress. To focus energy on the source of the stress, the body reduces resources to the immune
system during this stage. This explains why people are more likely to catch a cold or some other illness
when they experience prolonged stress. People have a limited resistance capacity, and if the source of
stress persists, the individual will eventually move into the third stage, exhaustion. Most of us are able
to remove the source of stress or remove ourselves from that source before becoming too exhausted.
However, people who frequently reach exhaustion have increased risk of long-term physiological and
psychological damage.92
How stressed are you? You can discover your perceived general level of stress over
the past month by comple ting this self-assessment in Connect.
CONSEQUENCES OF DISTRESS
Stress takes its toll on the human body.93 Many people experience tension headaches, muscle pain, and
related problems mainly due to muscle contractions from the stress response. High stress levels also
contribute to cardiovascular disease, including heart attacks and strokes, and may be associated with
some forms of cancer. One major review estimated that more than I 00,000 deaths annually and as much
as eight percent of health care costs in the United States are due to the consequences of work-related
stress. Stress also produces various psychological consequences, such as job dissatisfaction, moodi-
ness, depression, and lower organizational commitment. Furthermore, various behavioural outcomes
have been linked to high or persistent stress, including lower job performance, poor decision making,
and increased workplace accidents and aggressive behaviour. Most people react to stress through “fight
or flight,” so, as a form of flight, increased absenteeism is another outcome of stress.94
One particular stress consequence, called job burnout, occurs when people experience emotional
exhaustion, cynicism, and reduced feelings of personal accomplishment.95 Emotional exhaustion, the
EXHIBIT 4.6 General Adaptation Syndrome
High
Ability Normal
to Cope state
Low
Stage 1
Alarm reaction
Stage 2
Resistance
Time
Source: Adapted from H. Selye. The SLress of Life (New Yod:: McGraw-HilL 1956).
Stage 3
Exhaustion

114 Part Two Individual Behaviour and Processes
first stage, is characterized by tiredness, a lack of energy, and a feeling that one’s emotional resources are
depleted. This is followed by cynicism (also called depersona/iztaion), which is an indifferent attitude
toward work, emotional detachment from clients, a cynical view of the organization, and a tendency to
strictly follow rules and regulations rather than adapt to the needs of others. The final stage of burnout,
called reduced personal accomplishment, entails feel ings of diminished confidence in one’s ability to
perform the job well. In such situations, employees develop a sense of learned helplessness a~ they no
longer bel ieve that their efforts make a difference.
STRESSORS: THE CAUSES OF STRESS
Before identifying ways to manage work-related stress, we must first understand its causes, known as
stressors. Stressors include any environmental conditions that place a physical or emotional demand
on a person.96 There are numerous stressors in the workplace and in life in general. We will briefly
describe four of the most common work-related stressors: organizational constraints, interpersonal
conflict, work overload, and low task control.97
Organizational Constraints Stress research has identified organizational constraints as one of
the most pervasive causes of workplace stress.98 This stressor includes lack of equipment, supplies,
budget funding, co-worker support, information, and other resources necessary to complete the
required work. Most employees experience stress because these constraints interfere with task perfor-
mance, which indirectly threatens their rewards, status, and job security. Organizational constraints
refer to situational factors, which comprise one of the four direct predictors of individual behaviour
and performance (see the MARS model in Chapter 2). It is the only direct influence on individual per-
formance that is beyond the employee’s immediate control. This lack of control is a powerful stressor
because it threatens the individual’s fundamental drive to influence his or her external environment.
Interpersonal Conflict Organizations consist of groups of people working interdependently
toward some purpose. But even though they share common organizational goals, employees frequently
disagree with each other regarding how to achieve those goals as well as how the work and resources
should be distributed along that journey. Therefore, conflict is a way of life in organizations. As we
wi ll learn in Chapter II , specific conditions and practices enable employees to effectively resolve
their differences with few negative emotions. Unfortunately, dysfunctional conflict can easily flare up
and, left unchecked, escalate to a level that produces considerable stress and counterproductive work
behaviours.
In organizational settings, most interpersonal conflict is caused by structural sources, such as ambigu-
ous rules, lack of resources, and conflicting goals between employees or departments. However, workplace
conflict also arises when a person’s actions are perceived by others as threatening. This fast-growing
form of interpersonal conflict, called psychological harassment, includes repeated hostile or unwanted
conduct, verbal comments, actions, and gestures that undermine an employee’s dignity or psycho-
logical or physical integrity. Psychological harassment defines a broad landscape of behaviours, from
threats and bullying to subtle yet persistent forms of incivility.99
Psychological harassment exists in almost every workplace. One global survey of I 6,5 I 7 employees
reported that 83 percent of respondent~ in Europe, 65 percent in North and South America, and 55 percent
in Asia say they have been physically or emotionally bullied at work.100 Sexual harassment is a specific
type of harassment in which a person’s employment or job performance is conditional and depends on
unwanted sexual relations and/or the person experiences sexual conduct from others (such a~ posting
pornographic material) that unreasonably interferes with work performance or creates an intimidating,
hostile, or offensive working environment. 101
Work Overload “We just keep rushing along in a confused state of never having time to do the
things that seem to be pressing upon us.” Sound familiar? Most Canadians have probably had a similar
thought in the past year. But although this comment comes from Canada, it wasn’t written in the past
year or even in the past decade. It appeared in an article called “Let’s Slow Down!” in a Royal Bank of

Chapter Four Workplace Emotions, Attitudes, and Stress 1 15
Canada newsletter in 1949! 102 The fact is, people have been struggling for more than half a century with
the pace of life, including the challenges of performing too many tasks and working too many hours.
Work overload is one of the most common workplace stressors. Employees are expected (or believe
they are expected) to complete more work with more effort than they can provide within the allotted
time. 103 Unfortunately, work overload has consistently worsened over the past few decades. In 1991,
approximately 30 percent of Canadians estimated that they worked an average of 45 hours or more per
week. Ten years later (200 I), that figure had jumped to more than 45 percent. In the most recent poll
(20 I I), 60 percent of Canadians reported working an average of 45 hours or more each week. 104
Why do employees work such long hours? One explanation attributes it to the combined effects of
technology and global ization. People increasingly work with co-workers in distant time zones, and their
constantly-on communications habits make it diff icult to separate work from personal life. A related
Global Connections 4.2:
CHRONIC WORK OVERLOAD IN CHINA 105
Eva Marti (not her real name) has lived in Beij ing for eight years, but the Swiss-born designer
still struggles with the workload expected of her. “What am I doing in here?” she asks at 2 a.m.
on her fourth straight night of work. “This kind of overtime would never happen in Switzerland.”
The average Chinese employee works more than 2,000 hours each year. whereas Swiss
workers average less than 1,500 hours.
Long hours due to work overload is a chronic problem for many employees in China, not
just for expatriates. One survey found that 70 percent of white-collar workers in downtown
Beij ing show signs of overwork. Another study reported that half the anesthesio log ists in
China work more than 10 hours each day; nearly 80 percent of them say they feel too tired at
work. Chinese newspapers frequently report death from overwork (called guo/aosi in China)
among young professionals.
Stress seems to be on the rise in China due to increasing workloads and hours of work.
©blue jean lmagesfGetty Images

116 Part Two Individual Behaviour and Processes
explanation is that employees are under increasing pressure to be productive in a globalized world.
A third reason, called the “ideal worker norm,” is that professionals expect themselves and others to
work longer hours. For many, toiling away far beyond the normal workweek is a badge of honour, a
symbol of their superhuman capacity to perform above others. For example, 39 percent of mi llennia!
employees in one recent large-scale survey admitted that they work long hours and have a 24n schedule
so they look like a “work martyr” to their boss.106
Low Task Control Workplace stress is higher when employees lack control over how and when they
perform their ta~ks a~ well as over the pace of work activity. Work is potentially more stressful when it is
paced by a machine, involves monitoring equipment, or when the work schedule is controlled by someone
else. Low ta~k control is a stressor because employees face high workloads without the ability to adjust
the pace of the load to their own energy, attention span, and other resources. Furthermore, the degree to
which low ta~k control is a stressor increases with the burden of responsibility the employee must carry.107
Assembly-line workers have low task control, but their stress can be fairly low if their level of responsibil-
ity is also low. In contrast, sports coaches are under immense pressure to win games (high responsibility),
yet they have little control over what happens on the playing field (low task control).
INDIVIDUAL DIFFERENCES IN STRESS
People exposed to the same stressor experience different levels of stress. One contributing factor is the
employee’s physical health. Regular exercise and a healthy lifestyle produce a larger store of energy
to cope with stress. A second variable is the coping strategy employees use to ward off a particular
stressor.108 People sometimes figure out ways to remove the stressor or to minimize its presence. Seek-
ing support from others, reframing the stressor in a more positive light, blaming others for the stressor,
and denying the stressor’s existence are some other coping mechanisms. Some coping strategies work
better for specific stressors and some are better across al l stressors.109 Thus, someone who uses a less
effective coping mechanism in a particular situation would experience more stress in response to that
situation. People have a tendency to rely on one or two coping strategies, and those who rely on gener-
ally poor coping strategies (such a~ denying the stressor exists) are going to experience more stress.
Personality is a third rea~on why people experience different levels of stress when faced with the
same stressor. 110 Individuals with low neuroticism (high emotional stability) usually experience lower
stress levels because, by definition, they are less prone to anxiety, depression, and other negative emo-
tions. Extraverts also tend to experience lower stress than do introverts, likely because extraversion
includes a degree of positive thinking and extraverts interact with others, which helps buffer the effect
of stressors. Those with a positive self-concept-high self-esteem, self-efficacy, and internal locus of
control (see Chapter 3)-feel more confident and in control when faced with a stressor. In other words,
they tend to have a stronger sense of optimism.111 Stress also tends to be higher among employees
who have an uncontrollable work motivation and who constantly think about work and have low work
enjoyment. This condition, known as workaholism (also called work addiction), is characteristic of
people with perfectionism (a specific form of very high conscientiousness) and a natural tendency to
have negative emotions (related to high neuroticism). 112
Ar e you a workaholic? You can discover the extent to which you are a workaholic by
completing this self-assessment in Connect.
MANAGING WORK-RELATED STRESS
Many people deny the existence of their stress until it ha~ serious outcomes. This avoid-
ance strategy creates a vicious cycle, because the failure to cope with stress becomes
another stressor on top of the one that created the stress in the first place. To prevent this

Chapter Fo ur Workplace Emotions, Attitudes, and Stress 1 17
vicious cycle, employers and employees need to apply one or more of the stress management strategies
described below: remove the stressor, withdraw from the stressor, change stress perceptions, control
stress consequences, and receive social support.113
Remove the Stressor There are many ways to remove the stressor, but some of the more com-
mon actions involve assigning employees to jobs that match their skills and preferences, reducing
excessive workplace noise, having a complaint system and taking corrective action against harassment,
and giving employees more control over the work process. Another important way that companies can
remove stressors is by facilitating better work-life balance. Work-l ife balance initiatives minimize con-
flict between the employee’s work and nonwork demands. Five of the most common work-l ife balance
initiatives are flexible work arrangements, telecommuting, limiting work hours, personal leave, and
child care support.114
Flexible work arrangemellls. Work-life balance improves when employees have flexibility in
scheduling their hours and actually use that flexibility. For instance, almost two-thirds of 370
major Canadian companies recently surveyed offer employees flex days or personal days.115 A
variation of flexible work arrangements is job sharing, whereby two people share one job. This
reduces the number of hours that each person is required to work and may allow some flexibility
by swapping days each person works.
Telecommuting. Telecommuting (also called teleworking) involves working from home or a site
close to home rather than commuting a longer distance to the office every day (see Chapter I).
It potentially improves work-life balance by reduc ing or eliminating commuting time and
increasing t1exibility to perform nonwork obligations (such as picking up the kids from
school). 116 However, teleworking may increase stress for those who crave social interaction and
who Jack the space and privacy necessary to work at home.
Limiting work hours. Much work-l ife cont1 ict and resulting stress occur because technology
has blurred the line between work and nonwork. Many employees continue to receive emails
and text messages from the boss after work hours. Volkswagen and some other companies are
more clearly separating work from nonwork by halting emails posted more than half an hour
after the end of the work day. Similarly, France recently passed legislation giving employees
the “right to disconnect,” meaning that they have a legal right to ignore company messages
after hours. 117
Personal/eave. Employers with strong work-l ife values offer extended maternity, paternity, and
personal leave for employees to care for a new family member or take advantage of a personal
experience. Most countries provide 12 to 16 weeks of paid leave, with some offering one year
or more of fully or partially paid maternity Jeave. 118
Child care support. Many large and medium-sized employers provide on-site or subsidized
child care facilities. Child care support reduces stress because employees are less rushed to
drop off and pick up children and less worried during the day about how well their chi ldren are
doing.119
Withdraw from the Stressor Removing the stressor may be the ideal solution, but it is often
not feasible. An alternative strategy is to permanently or temporarily remove employees from the
stressor. Permanent withdrawal occurs when employees are transferred to jobs that are more compat-
ible with their abilities and values. Temporarily withdrawing from stressors is the most frequent way
that employees manage stress. Vacations and hol idays are important opportunities for employees to
recover from stress and re-energize for future challenges. A smal l number of companies offer paid or
unpaid sabbaticals.120 Many firms also provide innovative ways for employees to withdraw from stress-
ful work throughout the day, such as games rooms, ice cream cart breaks, nap rooms, and cafeterias
that include live piano rec itals.

118 Part Two Individual Behaviour and Processes
Writing software code can be taxing work, but employees at Vigilant Global have ways to
temporarily withdraw from these stressors. The Montreal firm that designs software solutions
for the finance industry has a games room where employees play table tennis or foosball, enjoy
electronic games, or relax w ith an ebook. And for the ultimate withdrawal from stressors, Vigilant
Global has a d edicated Zen room with massage chairs and spa-like background music.121
©bbernard/Shutterstock
Change Stress Perceptions How much stress employees experience depends on how they
perceive the stressor. 122 Consequently, another way to manage stress is to help employees improve
their self-concept so job challenges are not perceived as threatening. Personal goal setting and self-
reinforcement can also reduce the stress that people experience when they enter new work settings.
In addition, research suggests that some (but not all) forms of humour can improve optimism and create
positive emotions by taking some psychological weight off a stressful s intation. 123
Control Stress Consequences Keeping physically fit and maintaining a healthy lifestyle
are effective stress management strategies because they control stress consequences. Good physical
fitness reduces the adverse physiological consequences of stress by helping employees moderate
their breathing and heart rate, muscle tension, and stomach acid ity. The key variable here is physical
fitness, not exercise. Exercise leads to physical fitness, but research suggests that exercise does not
reduce stress symptoms among people who are not yet physically fit. 124 Various forms of meditation
can potentially reduce anxiety and other symptoms of stress, but their effect on blood pressure and
other physiological symptoms is minimal.125 Well ness programs can help control the consequences
of stress. These programs inform employees about the benefits of better nutrition and fitness, regu-
lar sleep, and other good health habits. Finally, many large employers offer employee assistance
programs (EAPs)-te.
ktea tnteflng one’s
consdousness
• May Include an
Initial period of
“frrnge” awareness
Sourr:e: Based on G. Walla..:;. The Art o f Thought (London: Jonathan Cape. 1926. Chap. 4).
• Detailed logical
and experimental
evaluation of the
Illuminated Idea
• Further creatNe
thinking

Chapter Seven Decision Making and Creativity 201
a case in point. In the 1940s, Swiss engineer Georges de Mestral had just returned home from a walk with
his dog through the countryside when he noticed that his clothing and the dog’s fur were covered in burrs.
While struggl ing to remove the barbed seeds, de Mestral engaged in divergent thinking by recognizing that
the adhesion used by burrs could be used to attach other things together. It took another dozen years of hard
work, but de Mestral evenntally perfected the hook-and-loop fastener, which he trademarked a~ Velcro. 59
ll/wnination (also called insight), the third stage of creativity, refers to the experience of suddenly
becoming aware of a unique idea.60 Wallas and others also suggest that this stage begins w ith a “fringe”
awareness before the idea fully enters our consciousness. Illumination is often visually depicted as a
light bulb, but a better image would be a flash of light or perhaps a briefly flickering candle-these bits
of inspiration are fleeting and can be quickly lost if not documented. For this reason, many creative peo-
ple keep a journal or notebook nearby so that they can jot down their ideas before they disappear. Also,
fl ickering ideas don’ t keep a particular schedule; they might come to you at any time of day or night.
Illumination presents ideas that are usually vague, roughly drawn, and untested. Verification, there-
fore, provides the essential final stage of creativity, whereby we flesh out the illuminated idea~ and
subject them to detailed logical evaluation and experimentation. This stage often calls for further cre-
ativity as the ideas evolve into finished products or services. Thus, although verification is labelled the
final stage of creativity, it is really the beginning of a long process of creative decision making toward
development of an innovative product or service.
Do you have a creative personality? You can discover the extent to which you have
a disposition for creative thinking by locating this self-assessment in Connect.
CHARACTERISTICS OF CREATIVE PEOPLE
Everyone is creative, but some people have a higher potential for creativity. Four of the main characteris-
tics that give individuals more creative potential are intelligence, persistence, knowledge and experience,
and a cluster of personality traits and values representing independent imagination (see Exhibit 7 .4).
Cognitive and practical intelligence. Creative people have above-average cognitive intel-
ligence to synthesize information, analyze ideas, and apply their ideas61 Like the fictional
sleuth Sherlock Holmes, creative people recognize the significance of smal l bits of information
and are able to connect them in ways that few others can imagine. They also have practical
intelligence-the capacity to evaluate the potential usefulness of their ideas.
EXHIBIT 7.4 Characteristics of Creative People

202 Part Three Team Processes
Persistence. Creative people have persistence, which includes a higher need for achievement, a
strong motivation from the ta~k itself, and a moderate or high degree of self-esteem. Persistence is
vital because people need this motivation to continue working on and investing in a project in spite
of failures and advice from others to quit. In fact, people have a general tendency to dismiss or criti-
cize creative ideas, so creative people need persistence to withstand these negative social forces.62
Knowledge and experience. Creative people require a foundation of knowledge and experience
to discover or acquire new knowledge.63 However, this expertise is a double-edged sword. As
people acquire knowledge and experience about a specific topic, their mental models tend to
become more rigid. They are less adaptable to new information or rules about that knowledge
domain. Some writers suggest that expertise also increases “mindless behaviour” because exper-
tise reduces the tendency to question why things happen.64 To overcome the limitations of exper-
tise, some corporate leaders like to hire people from other industries and areas of expertise. For
instance, when Geoffrey Ballard, founder of Ballard Power Systems, hired a chemist to develop a
better battery, the chemist protested that he didn’t know anything about batteries. Ballard replied:
“That’s fine. I don’t want someone who knows batteries. They know what won’t work.’.65
Independent imagination. Creative people possess a cluster of personality traits and values that
support an independent imagination: high openness to experience, moderately low need for
affiliation, and strong values around self-direction and stimulation66 Openness to experience is
a Big Five personality dimension representing the extent to which a person is imaginative, curi-
ous, sensitive, open-minded, and original (see Chapter 2). Creative people have a moderately
low need for affi liation so they are less embarrassed when making mistakes. Self-direction
includes the values of creativity and independent thought; stimulation includes the values of
excitement and challenge. Together, these values form openness to change-representing the
motivation to pursue innovative ways of solving problems (see Chapter 2).
by the NUMBERS
The Creativity Advantage67
of Canadian
federal
government
employees mostly or
strongly agree that
innovation is valued
in their work unit.
of 600 senior
global HR
leaders polled
identify creativity
as one of the most
important leadership
qualities over the
next five years (top
choice, followed by
integrity).
of1,461 American managers
and consultants polled
believe their organization’s
management “to some degree” or
“definitely” places a premium on
people who are creative.
of 1,966 American employees
say that innovation/
creativity/out-of-the-box
thinking will prove to be the most
useful over the next year.
of 251,507 U.S. federal
government employees
surveyed agree or strongly
agree that creativity and innovation
are rewarded in their organization.

Chapter Seven Decision Making and Creativity 203
ORGANIZATIONAL CONDITIONS SUPPORTING CREATIVITY
Intelligence, persistence, expertise, and independent imagination represent a person’s creative poten-
tial, but the extent to which these characteristics produce more creative output depends on how well the
work environment supports the creative process.68 Several job and workplace characteristics have been
identified in the literature as supporting creativity, and different combinations of s in1ations can equal ly
support creativity. In short, there isn’t one best work environment.69
One of the most important conditions that supports creative practice is that the organization has a
learning orientation; that is, leaders recognize that employees make reasonable mistakes as part of the
creative process. Motivation from the job itself is another important condition for creativity.70 Employ-
ees tend to be more creative when they bel ieve their work benefits the organization and/or larger
society (i.e., task significance) and when they have the freedom to pursue novel ideas without bureau-
cratic delays (i.e., autonomy). Creativity is about changing things, and change is possible only when
employees have the authority to experiment. More generally, jobs encourage creativity when they are
challenging and al igned with the employee’s competencies.
Along with supporting a learning orientation and intrinsically motivating jobs, companies foster
creativity through open communication and sufficient resources. They also provide a comfortable
degree of job security, which explains why creativity suffers during times of downsizing and corporate
restructuring71 Some companies also support creativity by designing non-traditional workspaces, such
as unique building plans or unconventional office areas.n Google is one example. The Internet inno-
vator has funky offices in several countries that include hammocks, gondola and hive-shaped privacy
spaces, sl ides, and brightly painted walls.
To some degree, creativi ty also improves wi th support from leaders and co-workers. One
study reported that effective product champions provide enthusiastic support for new ideas. Other
studies suggest that co-worker support can improve creativity in some situations, whereas com-
petition among co-workers improves creativity in other situations.73 S imi larly, it isn’t clear how
much pressure should be exerted on employees to produce creative ideas . Extreme time pressures
are well-known creativi ty inh ibitors, but lack of pressure doesn’t seem to produce the highest
creativity ei ther.
ACTIVITIES THAT ENCOURAGE CREATIVITY
Hiring people with strong creative potential and providing a work environment that supports creativity
are two cornerstones of a creative workplace. The third cornerstone consists of various activities that
help employees think more creatively. One set of activities involves redefining the problem. Employees
might be encouraged to revisit old projects that have been set aside. After a few months of neglect,
these projects might be seen in new ways74 Another strategy involves asking people unfamiliar with
the issue (preferably with different expertise) to explore the problem with you. You would state the
objectives and give some facts and then let the other person a~k questions to further understand the
situation. By verbalizing the problem, listening to questions, and hearing what others think, you are
more likely to form new perspectives on the issue?5
A second set of creativity activities, known as associative play, attempts to bring out creativity by
literally engaging in playful activities76 For example, British media giant OMD sends employees to
two-day retreats in the countryside, where they play grapefruit croquet, chant like medieval monks,
and pretend to be dog collars. “Being creative is a bit like an emotion; we need to be stimulated,”
explains Harriet Frost, one of OMD’s specialists in building creativity. “The same is true for our
imagination and its ability to come up with new ideas. You can’t just sit in a room and dev ise hun-
dreds of ideas.”77 Another assoc iative play activity, called morphological analysis, involves listing
different dimensions of a system and the e lements of each dimension and then looking at each com-
bination of elements. This encourages people to carefully examine combinations that initially seem
nonsensical.
A third set of activities that promote creative thinking falls under the category of
cross-pollination.18 Cross-pollination occurs when people from different areas of the organization

204 Part Three Team Processes
Axiom Zen is a Vancouver “innovation studio” with the unusual business model of being a startup
w ith the purpose of creating more startups. Founder Roham Gharegozlou left Silicon Valley in
2013 to create Axiom Zen, assembling a team of tech-savvy people with the task of thinking
up big ideas. The company doesn’t hire for speci fic roles or projects; instead people are free to
roam around and j ump into projects where they think they can contribute. With that freedom also
comes accountability; employees are required to submit projects to the collective scrutiny of the
entire team, a process that can be quite unsettling.
©Axiom Zen
exchange ideas or when new people are brought into an existing team. Mother, the London-based
creative agency, has unusual polic ies and working conditions that apply this creative process.
The company’s 100 or so employees perform their daily work around one monster-size table-a
2.5-metre-wide reinforced-concrete slab that extends 91 metres like a skateboard ramp around the
entire floor. Every three weeks, employees are asked to relocate the ir laptop, portable te lephone,
and trolley to another area around the table. Why the musical chairs exercise? “It encourages
cross-pollination of ideas,” explains Stef Calcraft, one of Mother’s founding partners. “You have
people working on the same problem from different perspectives. It makes problem-solving much
more organic.”79
Cross-pollination highlights the fact that creativity rarely occurs alone. Some creative people
may be individualistic, but most creative ideas are generated through teams and informal social

Chapter Seven Decision Making and Creativity 205
interaction. “This whole th ing about the solitary tortured artist is nonsense I think,” says John Col-
lee, the screenwriter who penned such films as Happy Feet and Master and Commander. “All the
great creative people I know have become great precisely because they know how to get along
wi th people and swim around in the communal unconscious.”80 This notion of improving creativ-
ity through social interaction leads us to the final section of this chapter: employee involvement in
dec ision making.
Employee Involvement in Decision Making
HCL Technologies is a multinational IT services firm. When top management found it
too cumbersome to weigh in on the hundreds of business plans produced every year they
decided to involve employees. A new planning process was introduced where executives
would post their business plans online and up to 15,000 employees would rate and review the plans.
The new system yielded richer and more detailed feedback than the traditional approach because the
insights were coming from diverse perspectives across multiple business units.81
Employee involvement (also cal led participative management) refers to the degree to which
employees influence how their work is organized and carried out.82 Employee involvement has become
a natural process in every organization, but the level of involvement varies with the situation. In some
organizations, such as HCL, almost everyone has a high degree of involvement in some corporate-wide
decisions during a given year, wherea~ other organizations might give employees only low levels of
involvement.83
A low level of involvement occurs where employees are individually asked for specific information
but the problem is not described to them. Somewhat higher involvement occurs where the problem is
described and employees are asked individually or collectively for information relating to that problem.
Moving further up the involvement scale, the problem is described to employees, who are collectively
given responsibi lity for developing recommendations. However, the decision maker is not bound to
accept those recommendations. At the highest level of involvement, the entire decision-making process
is handed over to employees. They identify the problem, discover alternative solutions, choose the best
alternative, and implement that choice. The original decision maker serves only as a facilitator to guide
the team’s decision process and keep everyone on track.
Debating Point:
SHOULD ORGANIZATIONS PRACTISE DEMOCRACY?
Most organizational experts recommend some degree of employee involvement, but a few go
further by proposing that organizations should operate like democracies rather than hierarchi-
cal fiefdoms. Organizational democracy consists of the highest form of involvement, whereby
employees have real institutionalized control-either directly or through representation-over
organizational decisions. In addition, no one in a democratic enterprise holds higher authority
except where such power is explicitly granted by the others (such as through employee elec-
tion of the company’s leaders). Democracy also gives all organizational members protection
against arbitrary or unj ust decisions (such as protection against being fired without cause).84
Some readers might view workplace democracy as an extreme way to run an organiza-
tion, but advocates point out that it is the principle on which many societies have operated
for centuries and most others aspire to. Democratic governance has been established in
several high profile and successful companies, such as Semco SA and W. L. Gore & Associ-
ates, as well as many employee-owned firms and worker co-operatives. Legislation in several

206 Part Three Team Processes
countries (particularly in continental Europe) requires companies to give employees control over
some organizational decisions through works councils or board membership8 5
Advocates point out that, as a form of participation, workplace democracy can improve the
quality of organizational decisions and employee commitment to those decisions. Indeed, democ-
racy inherently promotes shared leadership (where everyone should be a leader in various ways),
which is increasingly recommended for improved decision making and organizational effective-
ness. Democratic enterprises might also be more flexible and innovative. Rather than obediently
following management’s standard operating procedures. employees in democratic organizations
have the opportunity- and likely the expectation- to adapt and experiment with new work prac-
tices as circumstances change. This form of organization also encourages more organizational
learning.86
A final argument is that the democratic enterprise is ethically superior to the traditional hierar-
ch ical organization.87 It respects individual rights and dignity, more fully satisfies the standards of
ethical conduct, and is more likely than traditional management to adopt the multiple stakeholder
approach expected by society. Indeed, some European governments have debated the notion
that organizational democracy is a potentially effective way to minimize corporate wrongdoing
because it actively monitors top decision makers and continually holds them accountable for
their actions.
However, the democratic enterprise model has a number of vocal advocates, but few practi-
tioners. There is somewhat more employee involvement in most organizations today than a few
decades ago, but it is still far from the democratic ideal. Most firms operate with the traditional model
that management retains control and employees have few rights. There may be reasons for this
intransigence. One argument against organizational democracy is that employees have a contrac-
tual rather than ownership relationship with the organization. Legally (and possibly morally) they
have no right to assume citizenship rights or control over the business. A second consideration is
that employees might emphasize their own interests to the detriment of other stakeholders. In con-
trast, traditional organizations give management an explicit obligation to serve multiple stakeholders
to ensure the organization’s survival and success.
Another concern is that workplace democracy might dilute accountability. Although moderate
levels of employee involvement can improve decision-making quality and commitment, there is
a real risk that no one will take responsibility for decisions when everyone has a say in them. In
addition, democracy often results in slower decision making, which could lead to a lethargic cor-
porate response to changes in the external environment. Finally, the democratic enterprise model
presumes that employees want to control their organizations, but some research suggests that
employees prefer a more moderate level of workplace involvement For this reason (and others
noted above), employee-owned companies often maintain a more traditional hierarchical worker-
management relationship. sa
BENEFITS OF EMPLOYEE INVOLVEMENT
For the past half century, organizational behaviour experts have advised that employee involvement
potentially improves decision-making quality and commitment.89 However, a global study suggests
that this message hasn’t been received by business leaders. Only 39 percent of employees believe senior
leaders in their organization do a good job of involving employees in decisions that affect them and
only 38 percent agree that their company acts on those suggestions effectively. Employees believe that
their company falls short even on low-level involvement: only 42 percent say their organization does
a good job of soliciting employees’ opinions or suggestions.90 As Global Connections 7.2 describes,
involving employees in company decisions can result in considerable benefits for both the company
and employees.
Employee involvement improves decision making in several ways. To begin with, it improves the
identification of problems and opportunities. Employees are, in many respects, the sensors of the
organization’ s environment. When the organization’s activities misalign with customer expectations,
employees are usually the first to know. Employee involvement provides a conduit for organizational

Chapter Seven Decision Making and Creativity 207
~ “”1 Global Connections 7 .2:
BRASILATA, THE IDEAS COMPANY
Brasilata has become one of the most innovative and productive manufacturing businesses
in Brazil by encouraging employee involvement. Each year, the steel can manufacturer
receives more than 1 50,000 ideas-an average of more than 1 50 ideas per employee-on
a wide range of themes, from how to improve production efficiency to new product designs.
These ideas are so important to the company’s success that Brasilata employees are called
“inventors,” and everyone signs an “innovation contract” that reinforces their commitment to
continuous improvement.91
Brasilata has become one of the most innovative and productive manufacturing businesses in
Brazil by involving employees in company decisions.
©Minerva Studio/Shutterstock
leaders to be alerted to such problems.92 Employee invol vement can also potentially improve the
number and quality of solutions generated. In a well-managed meeting, team members create syn-
ergy by pool ing their knowledge to form new alternatives. In other words, several people working
together can potentially generate more and better solutions than the same people working alone.
A thi rd benefit of employee involvement is that, under specific conditions, it improves the evaluation of
alternati ves. Numerous studies on participative decision making, constructive conflict, and team dynam-
ics have found that involvement brings out more diverse perspectives, tests idea~. and provides more
valuable knowledge, all of which help the decision maker to select the best alternative.93 A mathematical
theorem introduced in 1785 by the Marquis de Condorcet states that the alternative selected by the team’s
majority is more likely to be correct than is the al ternative selected by any team member individually.94
Along with improving decision quality, invol vement tends to strengthen employee commitment to
the decision. Rather than viewing themselves as agents of someone else’s decision, those who par-
ticipate in a decision feel personally responsible for its success. I nvol vement also has positive effects
on employee moti vation, sati sfaction, and turnover. Furthermore, it increases skill var iety, feel ings of
autonomy, and task identity, al l of which increase job enrichment and, potentially, employee motiva-
tion. Participation i s also a critical practice in organizational change because employees are more
motivated to implement the decision and less likely to resist changes resul ting from the decision.95

208 Part Three Team Processes
EXHIBIT 7.5 Model of Employee Involvement in Decision Making
Contingencies
of Employee
Involvement
• Decision structure
• Source of decision
knowledge
• Decision commitment
• Risk of conflict
Outcomes of
Employee
Involvement
Better problem
identification
More/better choices
generated
More likely to select the
best atternative
Stronger commitment
to the decision
CONTINGENCIES OF EMPLOYEE INVOLVEMENT
If employee involvement is so wonderful, why don’t leaders leave all decisions to employees? The
answer is that the optimal level of employee involvement depends on the situation. The employee
involvement model shown in Exhibit 7.5 lists four contingencies: decision structure, source of decision
knowledge, decision commitment, and risk of conflict in the decision process.96
Decision structure. At the beginning of this chapter, we learned that some decisions are pro-
grammed, whereas others are nonprogrammed. Programmed decisions are Jess likely to need
employee involvement because the solutions are already worked out from pa~t inc idents. In
other words, the benefits of employee involvement increa~e with the novelty and complexity of
the problem or opportunity.
Source of decision knowledge. Subordinates should be involved in some level of decision mak-
ing when the leader Jacks sufficient knowledge and subordinates have additional information
to improve decision quality. In many cases, employees are closer to customers and production
activities, so they often know where the company can save money, improve product or service
quality, and real ize opportunities. This is particularly true for complex decisions where employ-
ees are more likely to possess relevant information.
Decision commitment. Participation tends to improve employee commitment to the decision.
If employees are unlikely to accept a decision made without their involvement, some level of
participation is usually necessary.
Risk of conflict. 1\vo types of confl ict undermine the benefits of employee involvement. First, if
employee goals and norms confl ict with the organization’s goals, only a low level of employee
involvement is advisable. Second, the degree of involvement depends on whether employees
wi ll agree on the preferred solution. If conflict is likely to occur, high involvement (i.e.,
employees make the decision alone) would be difficult to achieve.
Employee involvement is an important component of the decision-making process. To make the best
decisions, we need to involve people who have the most valuable information and who will increase
commitment to implement the decision. Employee involvement is a formative stage of team dynam-
ics, so it carries many of the benefits and challenges of working in teams. The next chapter provides a
closer look at team dynamics, including processes for making decisions in teams.

Chapter Seven Decision Making and Creativity 209
Chapter Summary
L01 Describe the ra tional choice paradigm of decision making.
Decision making is a conscious process of making choices among one or more alternatives with the
intention of moving toward some desired state of affairs. The rational choice paradigm relies on
subjective expected utility to identify the best choice. It also follows the logical process of identifying problems
and opportunities, choosing the best decision style, developing alternative solutions, choosing the best solution,
implementing the selected alternative, and evaluating decision outcomes.
L02 Explain why people differ from the rational choice paradigm when identifying problems/
opportunities, evaluating/choosing alternatives, and evaluating decision outcomes.
Stakeholder framing, perceptual defence, mental models, decisive leadership, and solution-focused
problems affect our ability to objectively identify problems and opportunities. We can minimize these challenges
by being aware of the human limitations and discussing the situation with colleagues.
Evaluating and choosing alternatives is often challenging because organizational goals are ambiguous or
in conflict, human information processing is incomplete and subjective, and people tend to satisfice rather
than maximize. Decision makers also short-circu it the evaluation process when faced with an opportunity
rather than a problem. People generally make better choices by systematically evaluating alternatives. Sce-
nario planning can help to make future decisions without the pressure and emotions that occur during real
emergencies.
Confirmation bias and escalation of commitment make it di fficult to accurately evaluate decis ion out-
comes. Escalation is mainly caused by the sel f-justification effect, self-enhancement effect, the prospect
theory effect, and sunk costs effect. These problems are minimized by separating decision choosers from
decision evaluators, establishing a preset level at wh ich the decision is abandoned or re-evaluated, relying on
more systematic and clear feedback about the project’s success, and involving several people in decis ion
making.
L03 Discuss the roles of emotions and in tuition in decision making.
Emotions shape our preferences for alternatives and the process we follow to evaluate alternatives.
We also listen in to our emotions for gu idance when making decisions. This latter activity relates to
intuition-the ability to know when a problem or opportunity exist~ and to select the best course of action without
conscious reasoning. Intuition is both an emotional experience and a rapid unconscious analytic process that
involves both pattern matching and action scripts.
L04 Describe employee characteristics, workplace conditions, and specific activities that support
creativity.
Creativity is the development of original ideas that make a socially recognized contribution. The
four creativity stages are preparation, incubation, insight, and verification. Incubation assists divergent thinking,
which involves reframing the problem in a unique way and generating different approaches to the issue.
Four of the main features of creative people are intelligence, persistence, expertise, and independent imagina-
tion . Creativity is also strengthened for everyone when the work environment supports a learn ing orientation, the
job has high intrinsic motivation, the organization provides a reasonable level of job security, and project leaders
provide appropriate goals, time pressure, and resources. Three types of activities that encourage creativity are
redefining the problem, associative play, and cross-poll ination.
LOS Describe the benefits of employee involvement and identify four contingencies that affect the
optimal level of employee involvement.
Employee involvement refers to the degree that employees influence how their work is organized
and carried out. The level of participation may range from an employee providing specific information to man-
agement without knowing the problem or issue, to complete involvement in all phases of the decision process.
Employee involvement may lead to higher decision quality and commitment, but several contingencies need to
be considered, including the decision structure, source of decision knowledge, decision commitment, and risk of
conflict.

2 10 Part Three Team Processes
Key Terms
anchoring and adjustment heur istic
availability heur istic
bounded rationality
creativity
decision making
divergent thinking
employee involvement
escalation of commitment
implicit favour ite
intuition
prospect theory effect
rational choice paradigm
representativeness heuristic
satisficing
scenario planning
snbj ective expected utility
Critical Thinking Questions
I. A management consultant is hired by a manufacturing firm to determine the best site for it~ next production
facility. The consultant has had several meetings with the company’s senior executives regarding the factors
to consider when making the recommendation. Discuss the decision-making problems that might prevent the
consultant from choosing the best s ite location.
2. You have been asked to personally recommend a new travel agency to handle all airfare, accommodation,
and related travel need~ for your organization of 500 staff. One of your colleagues, who is responsible for the
company’s economic planning, suggests that the best travel agent could be selected mathematically by input-
ting the relevant factors for each agency and the weight (importance) of each factor. What decision-making
approach is your colleague recommending? Is this recommendation a good idea in this situation? Why or why
not?
3. Intuition is both an emotional experience and an unconscious analytic process. One problem, however, is that
not all emotions signalling that there is a problem or opportunity represent intuition. Explain how we would
know if our “gut feelings” are intuition or not, and if not intuition, suggest what might be causing them.
4. A developer received financial backing for a new business financial centre along a derelict section o f the
waterfront, a few miles from the current downtown area of a large European c ity. The idea was to build
several high-rise structures, attract large tenants to those sites, and have the c ity extend transportation syste ms
out to the new centre. Over the next decade, the developer believed that others would build in the area,
thereby attracting the regional or national offices of many financial institutions. Interest from potential ten-
ants was much lower than initially predicted and the city did not build transportation systems as quickly as
expected. Still, the builder proceeded with the original plans. Only after financial support was curtailed did
the developer reconsider the project. Using your knowledge of escalation of commitment, discuss three pos-
s ible reasons why the developer was motivated to continue with the project.
5. Ancient Book Company has a problem with new book projects. Even when others are aware that a book is far
behind schedule and may engender little public interest, acquisitions editors are reluctant to terminate con-
tracts with authors whom they have signed . The result is that editors invest more time with these projects than
on more fruitful projects. As a form o f escalation of commitment, describe two methods that Ancient Book
Company can use to minimize this problem.
6. A fresh graduate is offered a job by an employer she admires even before she could start the job search. The
student thinks it is an opportunity and jumps on it. Do you think there is an effect of emotions in her decision
making?
7. Think of a time when you experienced the creative process. Maybe you woke up with a brill iant (but usually
sketchy and incomplete) idea, or you solved a baffling problem while doing something e lse. Describe this
incident to your class and explain how the experience followed the creative process.
8. 1\vo characteristics of creative people are that they have relevant experience and are persistent in their quest.
Does this mean that people with the most experience and the highest need for achievement are the most cre-
ative? Explain your answer.
9. Employee involvement appl ies just as well to the classroom as to the office or factory floor. Explain how
student involvement in classroom decis ions typically made by the instructor alone might improve decision
qual ity. What potential problems may occur in this process?

Chapter Seven Decision Making and Creativity 2 11
Case Study:
EMPLOYEE INVOLVEMENT CASES
SCENARIO 1: THE PRODUCTIVITY DIVIDEND DECISION
As head of the transmission/distribution group (TO group) in the c ity’s water agency (a government corpora-
tion), you have been asked to reduce cost~ over the next year by a minimum of three percent without undermining
service. Your department employs about 300 people who are responsible for constructing and maintaining water
lines throughout the city. Although you have an engineering background, the work is complex and involves several
professions and trades. Even the TO group’s first line supervisors (one or two levels below you in the hierarchy)
are not fully knowledgeable of all aspects of the business.
You believe that most employees support or at least accept the city’s recent mandate to reduce costs (called
the “productivity dividend initiative”). The city leaders have stated that this initiative will not result in any lay-
offs this year. However, the labour union representing most nonmanagement staff in the water agency (includ-
ing most of your employees) is concerned that the productivity dividend initiative wi ll reduce employment
numbers over time and increase employee workloads. Although the TO group is a separate department within
the c ity water agency, it affect~ most other work units in the agency. It is possible, for example, that ideas that
reduce costs in the TO group might increase costs elsewhere. The T O group employees may be unaware of or
care about these repercussions because there is limited interaction with or social bonding with employees in the
departments.
SCENARIO 2: THE SUGAR SUBSTITUTE RESEARCH DECISION
You are the head of research and development (R&D) for a major beer company. While working on a new beer
product, one o f the scientists in your unit seems to have tentatively identified a new chemical compound that ha~
few calories but tastes closer to sugar than current sugar substitutes. The company has no foreseeable need for this
product, but it could be patented and licensed to manufacturers in the food industry.
The sugar-substitute discovery is in its preliminary stages and would require considerable time and resources
before it would be commercially viable. This means that it would necessarily take some resources away from
other projects in the lab. The sugar substitute project is beyond your technical expertise, but some of the R&D
lab researchers are familiar with that field of chemistry. As with most such discoveries, it is difficult to determine
the amount o f research required to further identify and perfect the sugar substitute. You do not know how much
demand is expected for this product. Your department has a decision process for funding projects that are behind
schedule. However, there are no rules or precedents about funding projects that would be licensed but not used by
the organization.
The company’s R&D budget is limited, and other scientists in your work group have recently complained that
they require more resources and financial support to get their projects completed. Some of these R&D projects
hold promise for future beer sales. You bel ieve that most researchers in the R&D unit are committed to ensuring
that the company’s interests are achieved.
SCENARIO 3: COAST GUARD CUTTER DECISION
You are the captain of a 72-metre Coast Guard cutter with a crew of 16, includ ing officers. Your mission is
general at-sea search and rescue. Today at 2:00a.m., while en route to your home port after a routine 28-day
patro l, you received word from the nearest Coast Guard station that a small plane had crashed 100 kilometres
o ffshore. You obtained all the avail able information concerning the location of the crash, informed your crew
of the mission, and set a new course at maximum speed for the scene to commence a search for survivors and
wreckage.
You have now been searching for 20 hours. Your search operation has been impaired by increa~ingly rough
sea~. and there is evidence of a severe storm building. The atmospherics associated with the deteriorating weather
have made communications with the Coast Guard station impossible. A decision must be made shortly about
whether to abandon the search and place your vessel on a course that would ride out the storm (thereby protecting
the vessel and your crew, but relegating any possible survivors to almost certain death from exposure) or to con-
tinue a potentially futile search and the risks it would entail.
Before losing communications, you received an update weather advisory concerning the severity and duration
of the storm. Although your crew members are extremely conscientious about their responsibility, you believe that
they would be divided on the decision of leaving or staying.

212 Part Three Team Processes
SCENARIO 4: THE SOCIAL MEDIA POLICY DECISION
The Industry Initiatives Agency is a group of 120 professionals responsi ble for marketing the province as
a good place for companies to operate their business or open new operations. Although you report to the
head o f the province’s employment and commerce department, your agency is semi-autonomous in its po li-
cies and practices from the parent department. One of your highest priorities is to recruit and retain young,
well-educated , high-potential employees for this growing agency. During a recent recruiting drive at universi-
ties and polytechnics, some potential applicants candidly stated that the provincial government seems o ut of
touch with the younger generation, particularly in thei r use o f technology. A few observed that your agency’s
websi te doesn’ t provide much recruitment information, and they couldn’t find the department’s Facebook or
Twitter sites.
These comment~ led to you think about having a social media pol icy in the Industry Initiatives Agency, and
particularly whether or to what degree the agency should allow or possibly even encourage its staff to have work-
re lated Facebook sites, personal blogs, and 1\vitter sites, and to participate in those sites during work hours.
You personally know very little about emerging social media, although many of your direct reports (functional
managers and team leaders) have varying degrees of knowledge about them. A few have their own personal Face-
book sites and one manager has her own travel blog. Some direct report~ are strongly opposed to social media in
the workplace, whereas others are very supportive. However, you believe that all of their views are taken in the
agency’s bes t interests.
This social media policy decision would be within your mandate; unlike most governments, neither the pro-
vincial government nor the employment and commerce department has such a policy or restrictions on any policy
that is designed by your agency. However, a few speci fic government departments prohibit Facebook and texting
activity during work and, due to concerns about breaches of confidentiality and employer reputation, do not allow
employees to mention work-related matters in any social media. Your decision is to develop a policy specifying
whether, and to what extent, to allow and encourage agency staff to engage in social network s ite activity during
work hours.
Discussion Questions (for all four scenarios)
1. To what extent should your subordinates be involved in this decision? Select one of the following levels o f
involvement:
• Decide alone. Use your personal knowledge and insight to complete the entire decision process without
conferring with anyone e lse.
• Recei1•e informaTion from individuals. Ask specific individuals for information . They do not make recom-
mendations and might not even know what the problem is about
• ConsulT wirh individuals. Describe the problem to selected individuals and seek both their information and
recommendations. The final decision is made by you, which may or may not take the advice from others
into account
• ConsulT wirh rhe ream. You bring together a tean1 of people (all department staff or a representation of
them if the department is large), who are told about the problem and provide their ideas and recommenda-
tions. You make the final decis ion, which may or may not reflect the tean1’s information.
• Facilirare rhe ream’s decision. The entire decision-making process is handed over to a tean1 or committee
of subordinates. You serve only as a facilitator to guide the decision process and keep everyone on track.
The team identifies the problem, discovers alternative solutions, chooses the best alternative, and imple-
ments their choice.
2 . What factors led you to choose this level of employee involvement rather than the others?
3. What problems might occur if less or more involvement occurred in this case (where possible)?
Sources: The Productivity Dividend Decision and The Social Media Policy Decision: e2013 Steven L McShane. The Sugar
Substitute Re.•earch Decision: ©2002 Steven L McShane. The Coast guard cutter ca..e is adapted from V. H. Vroom and A. G.
Jago. The New leadership: Managing Participation in Organizations (Englewood Cli ffs. NJ: Prentice Hall, 1988). © 1987 V. H.
Vroom and A. G. Jago. Used with permission of the authors.

Chapter Seven Decision Making and Creativity
Team Exercise:
WHERE IN THE WORLD ARE WE?
Purpose This exercise is designed to he lp you understand the potential advantages of involving others in
decis ions rather than making decisions alone.
213
Materials Students require an unmarked copy of the map of Canada with grid marks (Exhibit I). Students
are not allowed to look at any other maps or use any other materials. The instructor will provide a list of
communities located somewhere on Exhibit I. The instructor will also provide copies of the answer sheet after
student~ have individually and in tean1s estimated the locations of communities.
EXHIBIT 1 Map of Canada
Instructions
Srep I: Using the table below, write down the list of communities identified by your instructor. Then, working
alone, estimate the location on Exhibit I of these communities, all of which are in Canada. For example, mark a
small “I” on Exhibit I on the spot where you believe the firs t community is located. Mark a small “2” where you
think the second community is located , and so on. Plea~e be sure to number each location clearly and with numbers
small enough to fit within one grid space.
Srep 2: The instructor wi ll organize students into approximately equal-sized teams (typically five or six people
per team). Working with your team members, reach a consensus on the location of each community listed in the
table. The instructor might provide teams with a separate copy of this map, or each member can identify the team’s
numbers using a different coloured pen on their individual maps. The team’s decis ion for each location should
occur by consensus, not voting or averaging.
Srep 3: The instructor will provide or display an answer sheet, showing the correct locations of the communi-
ties. Using this answer sheet, students will count the minimum number of grid squares between the location they
individually marked and d1e true location of each community. Write the number o f grid squares in the third column
of the table, then add up the total. Next, count the minimum number of grid squares between the location the team
marked and the true location o f each community. Write the number o f grid squares in the fourth column of the
table, then add up the total.

214 Part Three Team Processes
Srep 4: The instructor will ask for information about the totals and the class will discuss the implication of
these results for employee involvement and decision making.
List of Selected Communities in Canada
Number Community
Individual distance in grid uniL~ from the
Team distance in grid units from the true location
true location
I.
2.
3.
4.
5.
6.
7.
8.
Total: Total:
Copyright ©2002 Steven l. McShane
Self-Assessments for Chapter 7
SELF-ASSESSMENT NAME
What is your preferred decision-making style?
How well do you engage in divergent thinking?
Do you have a creative personality?
DESCRIPTION
Effective decision making is a critical part of most jobs. particularly
in professional and executive positions. But people have di fferent
decision-making styles. including how much they rely on facL~ and
logical analysis or emotional responses and gut instinct. This tool
assesses your preference for logical or intuitive decision making.
A key feature of c reativity is divergent thinking- reframing the
problem in a unique ·way and generating di fferent approaches to the
issue. One v.oay to test divergent thinking is by presenting questions
or problems in which the answer requires a different approach or
perspective from the usual frame of mind. This se]f .. asse.’isment
presents a dozen of these questions.
Everyone is creative to some extent. but some people have
personality traits and personal values that give them higher c reative
potential. This self-assessment helps you to discover the extent to
which you have a c reative personality.

CHAPTER 8
Team Dynamics
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
LO 1 Explain why employees join informal groups and discuss the benefits and limitations of teams.
L02 Outline the team effectiveness model and discuss how task characteristics, team size, and team
composit ion influence team effect iveness.
L03 Discuss how shared percept ions among team members, called team states, emerge and influence
team effectiveness.
L04 Discuss how team processes, such as taskwork, teamwork, team boundary spanning, and team
development determine team effectiveness.
LOS Discuss the characteristics and factors required for the success of self-directed teams and virtual teams.
LOG Identify four constraints on team decision making and discuss the advantages and disadvantages of
four structures aimed at improving team decision making.
How can one of Canada’s most well-known and successful retail chains, Canadian Tire, survive in
the digita l age? By embracing technology and innovation. Believe it or not, Canadian Tire’s top two
advertising channels are Facebook and Google. After learning that Facebook users spend seven
seconds on average watching their video feeds, with two-thirds of them turning off the sound,
2 15

2 16 Part Three Team Processes
Canadian Tire’s marketing team cranked out 50 seven-second spots to run on social media-
without sound of course.
They also created R&D hubs in places such as Water1oo, Winnipeg, and Calgary. At the heart of these
hubs are interdisciplinary teams composed of behavioural scientists, game and virtual-reality developers,
and statisticians. These teams have created modest social media apps aimed at specific audiences,
such as anglers, and more ambitious mobile interfaces that track store inventory in real time. 1
The Canadian Tire story shows that as the complexity of the modern organization has increa~ed, so has awareness that major projects require teams of people working together to accomplish goals.
This trend toward teamwork is, in fact, increasingly common in many industries. More than half of
North American organizations polled in one survey use teams to a high or very high extent to conduct
day-to-day business. Two decades ago, only 20 percent of executives said they worked in teams.2 Team-
work ha~ also become more important in scientific research. A study of almost 20 million research
publ ications reported that the percentage of journal articles written by teams rather than individuals
has increased substantially over the past five decades. Team-based articles were also subsequently
cited much more often, suggesting that j ournal articles written by teams are superior to articles written
by individuals.3
Why are teams becoming so important, and how can organizations strengthen their potential for
organizational effectiveness? We find the answers to these and other questions in this chapter on team
dynamics. The chapter begins by defining teams and examining the reasons why organizations rely on
teams and why people j oin informal groups in organizational settings. A large segment of this chapter
examines a model of team effectiveness, which includes team and organizational environment, team
design, team processes, and shared perceptions among team members-called team states. We then turn
our attention to two specific types of teams: self-directed teams and virtual teams. The final section of
this chapter looks at the challenges and strategies for making better dec isions in teams.
Teams and Informal Groups
Teams are groups of two or more people who interact and influence each other, are
mutually accountable for achieving common goals associated with organizational objec-
tives, and perceive themselves as a social entity within an organization.4 This definition
has a few important components worth repeating. First, all teams exist to fulfil some purpose, such as
repairing electric power lines, assembling a product, designing a new social welfare program, or making
an important decision. Second, team members are held together by their interdependence and need
for collaboration to achieve common goals. All teams require some form of communication so that
members can coordinate and share common objectives. Third, team members influence each other,
although some members may be more influential than others regarding the team’s goals and activities.
Finally, a team exists when its members perceive themselves to be a team.
Exhibit 8. 1 briefly identifies various types of teams in organizations along with three distinguishing
characteristics: permanence, skill differentiation, and authority differentiation.5 Team permanence
refers to how long that type of team usually exists. Although many employees work in teams that exist
indefinitely (e.g., departmental teams}, an emerging trend in organizations is the formation of teams
that exist very briefly, sometimes only for one eight-hour shift.6 For example, action teams often dis-
band after a few days or weeks. The second distinguishing characteristic, skill differentiation, refers to
the degree to which individuals bring diverse ski lls and knowledge to the team. Some advisory teams
have high ski ll differentiation because companies try to include representatives from most occupational
groups in the organization. In contrast, most functional departments consist of employees with very
simi lar skills (e.g., sales department staff tend to have s imi lar skills).
Authority differentiation, the third distinguishing characteristic of teams, refers to the degree that
decision-making responsibil ity is distributed throughout the team (low differentiation) or is vested
in one or a few members of the team. Departmental teams tend to have high authority differentiation

Chapter Eight Team Dynamics 217
EXHIBIT 8 .1 Types of Teams in Organizations
81111 MdlarttJ’ …. .,., .,_, ….. ftl I De … ……. …. …..
Departmental teams Teams that consist of employees who have High Low to medium High
s imilar or complementary skills and are
located in the same unit of a functional
s tructure: usually minimal task inte rde·
pendence because each person works with
employees in other departments.
Production/service/ Typically multiskilled (employees have High Medium to high Medium
leadership teams diverse competencies). team members
collectively produce a common product/
service or make ongoing decis ions.
Self-directed teams Similar to production/service teams High Medium to high Low
except (I) they are organized around work
processes that complete an entire piece
of work requiring several interdependent
tasks. and (2) they have substantial
autonomy over the execution of those tasks
(i.e .• they usually control input,. flow. and
outpuL~ with little or no supervision).
Task force (project) Usually multi skilled. temporary teams Low Medium Medium
teams whose assignment is to solve a problem,
realize an opportunity. or design a product
or service.
Action teams Similar to task forces. these highly skilled Low Medium Low
teams are formed for a short d uration and
given considerable a utonomy to resolve
an urgent problem o r opportunity, such as
solving an emergency or crisis.
Advisory teams Team.’i that provide recommendations to deci· Low to medium Medium to high Medium
sion makers: include committees. advisory
councils, work councils. and review panels:
may be tempor.uy, but often pem1anenl
some ·with frequent rotation of members.
Skunkworks Muhiskilled teams that are usually located Medium Medium to high Medium
away from the organization and are rela·
tively free of its hierarchy: often initiated
by an e ntrepreneurial team leader who bor·
rows people and resources (bootleggi11g) to
design a product or service.
Virtual tean1s Teams whose members operate across Varies Medium to high Medium
space. time, and organizational boundaries
and are linked through information
technologies to achieve o rganizational
tasks; may be a temporary task force or
pennanent service team.
Communities of Teams (but often informal groups) bound Medium Low to medium Low
practice together by shared expertise and passion
for a particular activity or inte rest : main
purpose is to share information: often rely
on information technologies as the main
source of interaction.

218 Part Three Team Processes
because they typically have a formal manager, whereas self-directed teams have low authority differ-
entiation because the entire team makes key decisions. The team leader, if there is one, does not have
final decision-making authority.
INFORMAL GROUPS
This chapter mostly focuses on formal teams, but employees also belong to informal groups. All teams
are groups, but many groups do not satisfy our definition of teams. Groups include people assembled
together, whether or not they have any interdependence or organizationally focused objective. The
friends you meet for lunch are an informal group, but they wouldn’t be called a team because they have
little or no interdependence (each person could just as easily eat lunch alone) and no organizational ly
mandated purpose. Instead, they exist primarily for the benefit of their members. Although the terms
are used interchangeably, teams has largely replaced groups in the language of business when referring
to employees who work together to complete organizational tasks?
Why do informal groups exist? One reason is that human beings are social animals. Our drive to bond
is hardwired through evolutionary development, creating a need to belong to informal groups.8 This is
evident by the fact that people invest considerable time and effort forming and maintaining social rela-
tionships without any special circumstances or ulterior motives. A second reason why people join infor-
mal groups is provided by social identity theory, which states that individuals define themselves by their
group affiliations (see Chapter 3). Thus, we join groups-particularly those that are viewed favourably
by others and that have values similar to our own-because they shape and reinforce our self-concept.9
A third reason why informal groups exist is that they accompl ish personal objectives that cannot be
achieved by individuals working alone. For example, employees will sometimes congregate to oppose
organizational changes because this collective effort has more power than individuals who try to bring
about change alone. These informal groups, called coalitions, are discussed in Chapter 10. A fourth
explanation for informal groups is that we are comforted by the mere presence of other people and are
therefore motivated to be near them in stressful situations. When in danger, people congregate near
each other even though doing so serves no protective purpose. Simi larly, employees tend to mingle
more often after hearing rumours that the company might be acquired by a competitor. As Chapter 4
explained, this social support minimizes stress by providing emotional and/or informational support to
buffer the stress experience. 10
Informal Groups a nd Organizational Outcomes Informal groups are not created to serve
organizational objectives. Nevertheless, they have a profound influence on organizations and employ-
ees. Informal groups potentially minimize employee stress because, as mentioned above, group mem-
bers provide emotional and informational social support. This stress-reducing capability of informal
groups improves employee well-being, thereby improving organizational effectiveness. Informal
groups are also the backbone of social networks, which are important sources of trust building, infor-
mation sharing, power, influence, and employee well-being in the workplace. 11 Chapter 9 describes
the growing significance of social networking sites like Facebook and Linkedln in encouraging the
formation of informal groups and associated communication. Chapter I 0 explains how social networks
are a source of influence in organizational settings. Employees with strong informal networks tend to
have more power and influence because they receive better information and preferential treatment from
others and their talent is more visible to key decision makers.
Advantages and Disadvantages of Teams
Why do teams succeed at some organizations and fail at others? The answer to this question has a
long history.’2 Early research on British coal mining in the 1940s, the Japanese economic miracle
of the 1970s, and a huge number of investigations since then have revealed that under the right
conditions, teams make better decisions, develop better products and services, and create a more
engaged workforce than do employees working alone.13 Similarly, team members can qu ickly share

Chapter Eight Team Dynamics 219
information and coordinate tasks, whereas these processes are slower and prone to more errors intra-
ditional departments Jed by supervisors. Teams typically provide superior customer service because
they provide more breadth of knowledge and expertise to customers than individual “stars” can offer.
In many situations, people are potentially more motivated when working in teams than when work-
ing alone.14 One reason for this motivation is that, as we mentioned in the previous section, employees
have a drive to bond and are motivated to fulfil the goals of groups to which they belong. This motiva-
tion is stronger when the team is part of the employee’s social identity.
Second, people are more motivated in teams because they are accountable to fellow team members,
who monitor performance more closely than a traditional supervisor. This is particularly true where the
team’s performance depends on the worst performer, such as on an assembly line, where how fast the
product is a~sembled depends on the speed of the slowest employee. Third, under some circumstances,
performance improves when employees work near others because co-workers become benchmarks of
comparison. Employees are also motivated to work harder because of apprehension that their perfor-
mance will be compared to the performance of others.
THE CHALLENGES OF TEAMS
In spite of their many benefits, teams are not always as effective as individuals working alone. 15 The
main problem is that teams have additional costs called process losses-resources (including time
and energy) expended toward team development and maintenance rather than the task.16 Team mem-
bers need time and effort to resolve their disagreements, develop mutual understanding of their goals,
determine the best strategy for accomplishing those goals, negotiate their specific roles, and agree on
informal rules of conduct. An employee working alone on a project does not have these disagreements,
misunderstandings, divergent viewpoints, or coordination problems with himself or herself (at least,
not nearly as much as with other people). Teams may be necessary when the work is so complex it
requires knowledge and skills from several people. But for tasks that can be performed alone, process
losses can make teams much Jess effective than a one-person project.
Process losses are amplified when more people are added or replace others on the team.17 The new team
members consume time and effort figuring out how to work well with other team members. Performance
also suffers among current team members because they divert attention to accommodating and integrat-
ing the newcomer. Process losses increa~e even after new members are integrated because the larger team
requires more coordination, more time for conflict resolution, and so forth. The software industry even
ha~ a name for the problems of adding people to a team: Brooks’s law says that adding more people to a
late software project only makes it later! Although these problems are well known, research ha~ found that
managers consistently underestimate the process losses caused by adding more people to an existing team.18
Social Loafing The process losses described above are mainly about coordination, but teams also
suffer from motivational process losses. The best-known motivational process Joss is social loafing,
which occurs when people exert Jess effort (and usually perform at a lower level) in teams than when
working alone. 19 Social loafing is higher when individual performance is hidden or difficult to dis-
tinguish from the performance of others. Individual performance tends to be hidden in very large
teams and where the team produces a single output, such as finding a single solution to a customer’s
problem. There is Jess social loafing when each team member’s contribution is more noticeable. This
can be achieved by reducing the size of the team, for example, or measuring each team member’s
performance. “When the group is smaller, there’s nowhere to hide,” explains Strategic Investment~ &
Holdings principal David Zebro. “You have to pull your weight.”20
Social loafing is Jess prevalent when the task is interesting, because individuals are more motivated
by the work itself to perform their duties. For example, one recent study revealed that student apathy
explains some of the social loafing that occurs in university student teams.21 Social loafing is also
Jess common when the team’s objective is important, possibly because individuals experience more
pressure from co-workers to perform well . Finally, social loafing occurs Jess frequently among
members who value team membership and believe in working toward the team’s objectives.

220 Part Three Team Processes
In summary, teams can be very powerful forces for competitive advantage, or they can be much
more trouble than they are worth. To understand when teams are better than individuals working alone,
we need to more closely examine the conditions that make teams effective or ineffective. The next few
sections of this chapter discuss the model of team effectiveness.
A Model of Team Effectiveness
Why are some teams effective whi le others fail? To answer this question, we first
need to clarify the meaning of team effectiveness. A team is effective when it benefits
the organization and its members and survives long enough to accomplish its man-
date.22 First, most teams exist to serve some organizational purpose, so effectiveness is partly mea-
sured by the achievement of those objectives. Second, a team’s effectiveness relies on the satisfaction
and well-being of its members. People join groups to fulfil their personal needs, so effectiveness is
partly measured by this need fulfilment. Finally, team effectiveness includes the team’s ability to
survive long enough to ful fil its purpose. Earlier, we pointed out that very short-lived teams are an
emerging trend in organizations. Yet even these “flash teams” could fall apart literally (people refuse
to join or stay with the team) or cognitively (members become cognitively and emotionally disen-
gaged from the team).
Researchers have developed several models over the years to identify the features or conditions that
make some teams more effective than others.23 Exhibit 8.2 integrates the main components of these
team effectiveness models. We will closely examine each component over the next several pages. This
exhibit is a meta-model because each component (team composition, team cohesion, etc.) includes its
own set of theories and models to explain how that component operates.
ORGANIZATIONAL AND TEAM ENVIRONMENT
The organizational and team environment represent~ all conditions beyond the team’s boundaries that
influence its effectiveness. The environment is typically viewed a~ a resource pool that either supports or
inhibits the team’s ability to function and achieve its objectives2 4 Team members tend to work together
more effectively when they receive some team-based rewards, when the organization’s leadership is
EXHIBIT 8.2 Team Effectiveness Model
ORGANDTEAM
ENVIRONMENT
Rewards
Commun,cauon
Org Structure
Org Leadership
Physical Space
TEAM DESIGN /
~ Task Characteristics
Team Size
Team Composltk»n ~
TEAM STATES
Norms
Cohesion
Team Efficacy
Team Trust
TEAM PROCESS
Taskwork
Teamwork
Boundary Spanning
TIME AND TEAM DEVELOPMENT
TEAM EFFECTIVEN ESS
Accomplish Tasks
Satisfy Member Needs
Malnta~n Team Survival

Chapter Eight Team Dynamics 221
supportive of team-oriented work structures (mther than “star” individuals), when the organization’s struc-
ture a~igns teams distinct clusters of work activity, when information systems support team coordination,
and when the physical layout of the team’s workspace encourages frequent communication.25
Along with functioning as a resource, the environment also genemtes drivers for change within teams.
External competition is an environmental condition that affects team dynamics, such as by increas-
ing motivation of team members to work together. Another environmental driver is changing societal
expectations, such as higher safety standards, which require teams to alter their norms of behaviour.
These external forces for change don’t only motivate teams to redesign themselves; they may also be
the focus of the team’s attention. For instance, teams develop better ways of working together so they
provide better customer service.
Team Design Elements
Even when it operates in a team-friendly environment, the team’s effectiveness will fall short of its
potential if the task chamcteristics, team size, team composition, and team roles are poorly designed.
TASK CHARACTERISTICS
One reason for the shift to teamwork is that making decisions and satisfying customers have become
increasingly complex. Complex work requires skills and knowledge beyond the competencies of one
person. Teams are particularly well suited for complex work that can be divided into more specialized
roles, and where the people in those specialized roles require frequent coordination with each other.
Surgical teams have high task interdependence.
©Chris Ryan/age fotostock

222 Part Three Team Processes
Task complexity demands teamwork, but teams also function better when the work is well-structured
rather than ambiguous. Assembl ing automobiles consists of well-structured tasks, whereas a team
performing a new medical procedure would have novel and Jess-structured work activities. The main
benefit of well-structured tasks is that it is easier to coordinate the work among several people.
Compared to individuals working alone, teams are more likely to stumble when faced with ambiguous
work activities. Performing a new medical procedure would Jack the task structure of assembling
cars dozens of times each day, for example. Fortunately, teams can perform ambiguous ta~ks reason-
ably well when they have well-structured roles. The medical team members have enough role clarity
to generally know what to expect of each other-the surgeon, scrub technic ians, operating room
nurses, anesthesiologist, and others-and how to coordinate most work challenges even in these
unique situations.26
What team roles do you prefer? You can discover your role preferences in teams by
locating this self-assessment in Connect. –
An important ta~k-related influence on team effectiveness is task interdependence-the extent to
which team members must share materials, information, or expertise to perform their jobs.27 Apart from
complete independence, there are three levels of ta~k interdependence, as illustrated in Exhibit 8.3. The
lowest level of interdependence, called pooled interdependence, occurs when an employee or work unit
shares a common resource, such a~ machinery, administrative support, or a budget, with other employees
or work units. This would occur in a team setting where each member works alone but shares raw mate-
rials or machinery to perform her or his otherwise independent tasks. Interdependence is higher under
sequential interdependence, in which the output of one person becomes the direct input for another per-
son or unit. Sequential interdependence occurs where team members are organized in an assembly line.
Reciprocal interdependence, in which work output is exchanged back and forth among individu-
als, produces the highest degree of interdependence. People who design a new product or service
would typically have reciprocal interdependence because their design decisions affect others involved
in the design process. Any decision made by the design engineers would influence the work of the
EXHIBIT 8.3 Levels of Task Interdependence
Pooled
interdependence
Sequential
interdependence
Reciprocal
interdependence
Shared
Resource

Chapter Eight Team Dynamics 223
manufacturing engineer and purchasing specialist, and vice versa. Employees with rec iprocal inter-
dependence should be organized into teams to facil itate coordination in their interwoven relationship.
As a rule, the higher the level of task interdependence, the greater the need to organize people into
teams rather than have them work alone. A team structure improves interpersonal communication and
thus results in better coordination. High task interdependence also motivates most people to be part of
the team. However, the ruJe that a team should be formed when employees have high interdependence
applies when team members have the same task goals, such as serving the same clients or collectively
assembl ing the same product. When team members have different goals (such a~ serving different clients)
but must depend on other team members to achieve those unique goals, teamwork might create exces-
sive conflict. Under these circumstances, the company should try to reduce the level of interdepen-
dence or rely on supervision as a buffer or mediator among employees.
TEAM SIZE
What is the ideal size for a team? By now you probably understand that the answer to this question
depends on the type of team we are talking about. The tasks performed by leadership teams and project
teams tend to be complex and knowledge intensive, so increases in team size might capitalize on
additional expertise or resources. On the other hand, production teams engage in work that is more
routine and standardized, so additional members might add unnecessary coordination requirements.28
Generally, teams should be large enough to provide the necessary competencies and perspectives to
perform the work, yet small enough to maintain efficient coordination and meaningful involvement of
each member.29 “You need to have a balance between having enough people to do all the things that
need to be done, while keeping the team small enough so that it is cohesive and can make decisions
effectively and speedily,” says Broadcast Australia CEO Jim Hassell, who has also held executive roles
at IBM and NBN Corp.30 Small teams (say, fewer than a dozen members) operate effectively because
they have less process loss. Members of smaller teams also tend to feel more engaged because they
have more influence on the group’s norms and goals and feel more responsible for the team’s success
and failure. Also, members of smaller teams get to know each other better, which improves mutual trust
as well as perceived support, help, and assistance from those team membersY
ShouJd companies have 100-person teams if the task is highly complex? The answer is that a group this
large probably isn’t a team, even if management calls it one. A team exists when its members interact and
influence each other, are mutually accountable for achieving common goals a~sociated with organizational
objectives, and perceive them~elves as a social entity within an organization. It is very difficult for everyone
in a 1 00-person work unit to influence each other and experience enough cohesion to perceive themselves
as team members. However, such complex tasks can usually be divided into smaller clusters of people.
TEAM COMPOSITION
In most workplaces, employees must have more than technical skills; they must also be able and wi lling
to work in a team environment. Some companies go to great lengths to hire people who possess team
competencies. The most frequently mentioned characteristics or behaviours of effective team members
are depicted in the “Five C’s” model illustrated in Exhibit 8.4: cooperating, coordinating, communi-
cating, comforting, and conflict resolving. The first three competencies are mainly (but not entirely)
ta~k-related, while the last two primarily assist team maintenance:32
Cooperating. Effective team members are willing and able to work together rather than alone.
This includes sharing resources and being sufficiently adaptive or flexible to accommodate the
needs and preferences of other team members, such as reschedul ing use of machinery so that
another team member with a tighter deadline can use it.
Coordinating. Effective team members actively manage the team’s work so that it is performed
eff iciently and harmoniously. For example, effective team members keep the team on track and
help to integrate the work performed by different members. This typically requires that effective
team members know the work of other team members, not just their own.

224 Part Three Team Processes
EXHIBIT 8.4 Five C’s of Team Member Competency
Cooperating
• Slwe resources
·Accommodate others
Conflict
Resolving
·Diagnose conflict
sources
· Use best conflict
handling style
Comforting
·Show empathy
· Provide psych. comfort
· Build conf idence
Coordinating
·Align work with
others
·Keep team on track
Communicating
·Share information freely,
efficiently, respectfully
• Listen actively
Sourr:es: Ba..:;ed on information in V. Rou..:;seau. C. Aubt. and A. Savoie. “Teamwork BehaviOr$: A Review and an lnteg.nuion of Frameworks.”
Small Group Research 37. no. 5 (2006). pp. 54().570: M.L. Loughry. M.W. Ohland. and D. D. Moore. “‘Development of a Thetmi:Atimr Mmw~-ement. 40(1) . 6-34.

226 Part Three Team Processes
Transactive Memory A transactive memory system describes how task-relevant knowledge is distrib-
uted within a team and the collective awareness of who knows what. To illustrate, consider the example of a
group of business students working on a sustainability ca~e competition. A ca~e competition requires a visu-
ally arresting slide deck, engaging speakers, and a well-rounded, thorough presentation. Having one person
with sound sustainability knowledge is a must, but what about the rest of the team? One person could bring
in knowledge of finance and quantitative ability, another could bring his/her marketing background to
use the sustainability-centric recommendation as a branding tool, while another might possess knowledge
of strategy and use that to tell the entire story in a meaningful way. Clearly defined and complementary
strengths make for a much stronger team, but unless team members know who ha~ what skill, those skills
might get wasted and lead to process losses. Thus, the idea behind the transactive memory concept is for
teams to not only organize around complementary skills, but to devote time and energy toward understand-
ing how those skills are distributed. This is important because research shows that teams with more well-
developed transactive memory systems outperform teams with less well-developed systems.40
Team States
The third set of elements in the team effectiveness model, collectively known as team
states, includes team norms, cohesion, team efficacy, and trust. These elements represent
motivational or cognitive characteristics of the team that continuously evolve.
TEAM NORMS
Norms are the informal rules and shared expectations that groups establish to regulate the behaviour
of their members. Norms apply only to behaviour, not to private thoughts or feel ings. Furthermore,
norms exist only for behaviours that are important to the team.41 Norms are enforced in various ways.
Co-workers grimace if we are late for a meeting, or they make sarcastic comments if we don’t have
our part of the project completed on time. Norms are also directly reinforced through praise from
high-status members, more access to valued resources, or other rewards available to the team. But
team members often conform to prevailing norms without direct reinforcement or punishment because
they identify with the group and want to align their behaviour with the team’s expectations. The more
closely the person’s social identity is connected to the group, the more the individual is motivated to
avoid negative sanctions from that group.42
How Team Norms Develop When teams form, norms develop because people need to anticipate
or predict how others will act. Even subtle event~ during the team’s formation, such as how team members
initially greet each other and where they sit in the first meetings, can initiate norms that are later difficult
to change. Norms also form a~ team members discover behaviours that help them function more effec-
tively (such a~ the need to respond quickly to email).43 In particular, a critical event in the team’s history
can trigger formation of a norm or sharpen a previously vague one. A third influence on team norms are
the experiences and values that members bring to the team. If members of a new team value work-l ife
balance, norms are likely to develop that discourage long hours and work overload.44
Preventing and Changing Dysfunctional Team Norms Team norms often become deeply
anchored, so the best way to avoid norms that undermine organizational success or employee well-being
is to establish desirable norms when the team is first formed. One way to do this is to clearly state
desirable norms when the team is created. Another approach is to select people with appropriate values.
If organizational leaders want their teams to have strong safety norms, they should hire people who
already value safety and who clearly identify the importance of safety when the team is formed.
The suggestions so far refer to new teams, but how can organizational leaders maintain desirable norms
in older teams? One solution comes from a study showing that leaders often have the capacity to alter exist-
ing norms.45 By speaking up or actively coaching the team, they can often subdue dysfunctional norms
while developing useful norms. A second suggestion is to introduce team-based rewards that counter

Chapter Eight Team Dynamics 227
dysfunctional nonns. However, studies report that employees might continue to adhere to a dysfunctional
team nonn (such a~ limiting output) even though this behaviour reduces their paycheque. Finally, if dys-
functional norms are deeply ingrained and the above solutions don’t work, it may be necessary to disband
the group and replace it with people having more favourable norms.
TEAM COHESION
Team cohesion refers to the degree of attraction people feel toward the team and their motivation to remain
members. It is a characteristic of the team, including the extent to which its members are attracted to the
team, are committed to the team’s goals or tasks, and feel a collective sense of team pride.46 Thus, team
cohesion is an emotional experience, not just a calculation of whether to stay or leave the team. It exists
when team members make the team part of their social identity. Team cohesion is associated with team
development because team members develop a team identity as part of the team development process.
Influences on Team Cohesion Several factors influence team cohesion, but the six described
here seem to be the most important: member similarity, team size, member interaction, difficult entry,
team success, and external competition or challenges. For the most part, these factors reflect the indi-
vidual’s social identity with the group and bel iefs about how team membership will fulfil personal needs.
Member similarity. Social scientists have long known that people are attracted to others who are
similar to them.47 This similarity-attraction effect occurs because we assume that people who
look like us and have similar backgrounds are more trustworthy and are more likely to accept
us. We also expect to have fewer negative experiences, such as conflicts and violations of our
expectations and bel iefs. Thus, teams have higher cohesion or become cohesive more quickly
when members are similar to each other. In contra~!, it is more difficult and takes longer for
teams with diverse members to become cohesive. This difficulty depends on the form of diver-
sity, however. Teams consisting of people from different j ob groups seem to gel together just as
well as teams of people from the same job.48
Team size. Smaller teams tend to have more cohesion than larger teams because it is easier for
a few people to agree on goals and coordinate work activities. However, smal l teams have Jess
cohesion when they Jack enough members to perform the required tasks.
Member interaction. Teams tend to have more cohesion when team members interact with each
other fairly regularly. This occurs when team members perform highly interdependent tasks and
work in the same physical area.
Somewhat difficult entry. Teams tend to have more cohesion when entry to the team is
restricted. The more el ite the team, the more prestige it confers on its members, and the more
they tend to value their membership in the unit. At the same time, research suggests that severe
initiations can weaken team cohesion because of the adverse effects of humiliation, even for
those who successfully endure the initiation.49
Team success. Team cohesion increases with the team’s level of success because people are
attracted to groups that fulfil their needs and goals. 5° Furthermore, individuals are more likely
to attach their social identity to successful teams than to those with a string of fai lures.s’
External competition and challenges. Team cohesion tends to increase when members face
external competition or a valued objective that is challenging. This might include a threat from
an external competitor or friendly competition from other teams. Employees value their mem-
bership on the team because of its ability to overcome the threat or competition and as a form of
social support. However, cohesion can dissipate when external threats are severe because these
threats are stressful and cause teams to make Jess effective decisions.52
Consequences of Team Cohesion Teams with higher cohesion tend to perform better than
those with low cohesion.53 In fact, the team’s existence depends on a minimal level of cohesion
because it motivates team members to remain members and to help the team achieve its mutual ly

228 Part Three Team Processes
agreed objectives. Members of high-cohesion teams spe nd more time together, share information more
frequently, and are more satisfied with each other. They provide each other with better social support
in stressful situations and work to minimize dysfunctional confl ict. 54 When confl ict does arise, high-
cohesion team members tend to resolve their differences swiftly and effectively.
However, at least two contingencies make the cohesion- performance relationship somewhat more
complex. First, team cohesion has Jess effect on team performance when the team has low task interde-
pendence. 55 High cohesion motivates employees to coordinate and cooperate with other team members,
Lululemon, a yoga-inspired athletics apparel retailer founded in Vancouver, is a Canadian success story.
It has over 300 corporate-owned stores and more than 2800 employees in Canada, the USA, the
United Kingdom, Austra lia, New Zealand, and Singapore. In 2015 the retailer earned $2.1 billion in
net revenue. Lululemon is known for its distinctive corporate ethos, which nurtures employee health,
loya lty, and team engagement. Lululemon describes its employees as passionate and motivated
people “who are driven to succeed and share our purpose of ‘elevating the world from mediocrity
to greatness.”‘ Employees are hired only after an extensive vetting process, based on their ability
to embody the corporate culture of happy and healthy transformation. Lululemon fosters team
cohesion among its workers through several unique strategies aimed at promoting self-actualization.
Lululemon seeks to inspire staff by encouraging workers to engage in goal setting using vision
boards, circu lating self-help literature and books, and pursuing a lifestyle of yoga and fitness by
provid ing yoga stud io benefits and self-empowerment training. Store managers have the authority to
implement local initiatives to motivate employees, and store employees, who are called “educators,”
are urged to participate in community-based sports and grassroots wellness campaigns as brand
ambassadors. A core corporate philosophy is that employees need to invest in themselves to build
healthy relationships in order to advance personally and professionally. The company routinely
promotes team bonding through fitness activities and group goal-setting eventss6
©mubus 7/Shutterstock

Chapter Eight Team Dynamics
EXHIBIT 8.6 Effect o f Team Cohesion on Task Performance
Team norms
support
company
goals
Team norms
conflict with
company
goals
low
Moderately
high task
performance
l ow task
performance
Team
cohesiveness
229
High
but people don’t need to cooperate or coordinate as much when little of their work depends on other
team members (low task interdependence). So the motivational effect of high cohesion is less relevant
in teams with low interdependence.
Second, the effect of cohesion on team performance depends on whether the team’s norms are
compatible with or opposed to the organizational objectives57 As Exhibit 8.6 illustrates, teams with
high cohesion perform better when their norms are aligned with the organization’s objectives, whereas
higher cohesion can potentially reduce team performance when norms are counterproductive. This
effect occurs because cohesion motivates employees to perform at a level more consistent with team
norms. If a team’s norm tolerates or encourages absenteeism, employees will be more motivated to
take unjustified sick leave. If the team’s norm discourages absenteeism, employees are more motivated
to avoid taking sick leave.
One last comment about team cohesion and performance: Recall earlier in this section we said that
team performance (success) increases cohesion, whereas we are now saying that team cohesion causes
team performance. Both statements are correct, but there is some evidence that team performance has
a stronger effect on cohesion than vice versa. In other words, a team’s performance will likely affect its
cohesion, whereas a team’s cohesion has less of an effect on its performance 5 8
Are you a team player? You can discover your preferences about teamwork by
locating this self-assessment in Connect.
TEAM EFFICACY
Have you ever been part of a team where everyone bel ieved the team was highly likely to succeed?
If so, you were in a team with high team efficacy, which is the shared perception among team members
about the team’s overall level of capabil ity. A vast amount of research has shown that teams with high
levels of efficacy outperform teams with low levels of efficacy, especially when task interdependence
is high.59 When a team has high efficacy, members are more likely to set ambitious goals, put forth

230 Part Three Team Processes
greater effort, persist longer when faced with challenging obstacles, and view negative feedback as an
opportunity rather than a challenge.
On the other hand, teams characterized by low team efficacy are more likely to experience apathy,
uncertainty, and a lack of direction. Research ha~ shown that the dysfunctional characteristics associated
with low efficacy include heightened anxiety,60 greater social loafing,61 and less vigilance in decision-
making processes62 Researchers have also found a link between team efficacy and the extent to which
individual team members engage in the behaviours described in the team competency model presented
earlier in the chapter. For example, in teams with high efficacy, individual team members are more
likely to display coordination and cooperative type behaviours6 3
Considering how important team efficacy is to overal l team performance, it is worthwhile to con-
sider where this perception comes from and how it can be developed. In general, teams have higher
levels of efficacy when individual team members are more confident about their own team-specific
skills, when the team is composed of members who have knowledge about the team’s task, and when
team members show visible teamwork behaviours, such as contributing to the ta~k and managing rela-
tionship dynamics.64 Having a leader who uses a more participative versus controlling style can also
increase team efficacy.65
TEAM TRUST
Any relationship-including the relationship among team members-depends on a certain degree of
trust. Trust refers to positive expectations one person has toward another person in s ituations involv-
ing risk (see Chapter 4).66 Trust is ultimately perceptual, in which we trust others based on our bel iefs
about their ability, integrity, and benevolence. It also has an emotional component, because you experi-
ence positive feelings toward those you trust.67 Trust is built on three foundations: calculus, knowledge,
and identification (see Exhibit 8.7).68
Calculus-based trust. This foundation represents a logical calculation that other team members
wi ll act appropriately because they face sanctions if their actions violate reasonable expecta-
tions.69 It offers the lowest potential trust and is easily broken by a violation of expectations.
Some scholars suggest that calculus-based trust is not trust at all. Instead, it might be trust in the
system rather than in the other person. In any event, calculus-based trust alone cannot sustain a
team’s relationship because it relies on deterrence.
Knowledge-based trust. This form of trust is based on the predictability of another team member’s
behaviour. This predictability refers only to “positive expectations”-as the definition of trust
EXHIBIT 8.7 Three Foundations of Trust in Teams
Potential
level of
Trust
High
low
Type of t rust
Identification-
based trust
Knowledge-
based trust
Calculus-
based trust
Description
• Based on common mental models and values
• Increases with person’s social identity with team
• Based on predictability and co~etence
• Fairly robust
• Based on deterrence
• Fragile and limited potential because dependent
on punishment

Chapter Eight Team Dynamics 231
states-because you would not trust someone who tends to engage in harmful or dysfunctional
behaviour. Knowledge-based trust includes our confidence in the other person’s abi lity or com-
petence, such as the confidence that exists when we trust a physician70 Knowledge-based trust
offers a higher potential level of trust than calculus-based trust and it is more stable because it
develops over time.
Identification-based trust. This foundation is based on mutual understanding and an emotional
bond among team members. It occurs when team members think, feel, and act like each other.
High-performance teams exhibit this level of trust because they share the same values and
mental models. Identi fication-based trust is potentially the strongest and most robust of all three
types of trust. The individual’s self-concept is based partly on membership in the team and he
or she bel ieves the members’ values significantly overlap, so any transgressions by other team
members are quickly forgiven. People are more reluctant to acknowledge a violation of this
high-level trust because it strikes at the heart of their self-concept.
Dynamics of Team Trust Employees typically join a team with a moderate or high level-not a
low Jevel~f trust in their new co-workers? ‘ The main explanation for the initially high trust (called
swift trust) in organizational settings is that people usually believe fellow team members are reasonably
competent (knowledge-based trust) and they tend to develop some degree of social identity with the
team (identification-based trust). Even when working with strangers, most of us display some level of
trust, if only because it supports our self-concept of being a good person. However, trust is fragile in new
relationships because it is based on a~sumptions rather than well-established experience. Consequently,
studies report that trust tends to decrease rather than increa~e over time. This is unfortunate, because
employees become Jess forgiving and less cooperative toward others as their level of trust decreases,
and this undermines team and organizational effectiveness. n
How trusting are you? You can d iscover your trust propensity by locating this
self-assessment in Connect.
Team Processes
L04 The next set of elements in the team effectiveness model, collectively known as team
processes, refers to the interactions and activities that occur within a team as it works
toward its goal . Traditionally, researchers have looked at the team’s internal dynamics,
such as task coordination and interpersonal relationships, to describe team process. However, there
is growing recognition that team interactions with external parties also determine how well a team
performs. For this reason we wi ll describe both internal and external team processes. We will also
describe the element of time or, in other words, how teams develop.
INTERNAL TEAM PROCESSES
Internal team processes have historically been categorized as either teamwork or taskwork. Teamwork
behaviour has been described a~ activities that are devoted to enhancing the quality of the interactions,
interdependencies, cooperation, and coordination of teams.73 During interactions between team mem-
bers, teamwork behaviour takes the form of overt actions and verbal statements that contribute to the
coordination demands of the team’s task?4 For example, a team member would be engaging in team-
work behaviour when they steer their fellow team members toward on-topic conversations, suggest
setting time deadlines for completing tasks, or attempt to resolve a conflict within the group.
On the other hand, taskwork behaviour has been described a~ team members’ efforts that are devoted
to understanding the task requirements, discovering the “rules” by which the tasks are to be performed,

232 Part Three Team Processes
establishing the patterns of interaction with equipment, exchanging ta~k-related information, develop-
ing team solutions to problems, and so forth. Thus, ta~kwork represents the technical performance of
the team’s task, whereas teamwork behaviours are used to direct, align, and monitor ta~kwork75 To
illustrate, the ta~kwork of a surgical team includes the tasks carried out to complete a surgical proce-
dure, such as patient preparation, use of anesthesia, and suturing incisions. On the other hand, teamwork
behaviours in a surgical team might include individual activities such as the identification of goals, sug-
gestions for improving coordination, and efforts to resolve conflict, all of which help to ensure that the
patient is effectively prepared for surgery, anesthesia is appropriately administered, and incisions are
properly sutured. To perform well, a team needs to excel at both types of internal process.
EXTERNAL TEAM PROCESSES
Processes that occur between team members matter a great deal, but teams must also interact with
people and groups who exist beyond the team’s boundary. Team boundary spanning refers to team
actions that establish or enhance linkages and manage interactions with parties in the external environ-
ment.76 In their classic study of product development teams, Ancona and Caldwell ( 1992) classified
external activities into different types and showed how these types impact overall team performance.
They described the first type as ambassador activities because these activities encompassed such
behaviours as protecting the team from outside pressure, persuading others to support the team, and
lobbying for resources. The amba~sador function tends to focus on the team’s ability to mould and
shape the beliefs of external constintents. Scholars often refer to amba~sador activities as vertical
boundary spanning because these activities frequently involve communicating with those higher in the
organization’s hierarchy, such as corporate or division managers.n
The second type of boundary activity was labelled task coordination. This type represents interactions
aimed at coordinating technical or design issues. Some examples include discussing design problems
with others, obtaining feedback on the product design, and coordinating and negotiating with outsiders.
In contrast to ambassador activities, task coordination activities show higher levels of communication
laterally through the organization. Thus, they are often referred to a~ horizontal boundary spanning.
As predictors of performance, ambassador and task coordinator activity were both positively related78
A third type of boundary spanning, called scouting activity, is described a~ a general scanning for ideas
and information about the competition, the market, or the technology; thus, scouting activity is mostly
directed at obtaining information from sources external to the organization. Although it would seem
that scouting activity should be helpful, research ha~ shown instead that prolonged scouting can actually
harm team performance because it detracts from internal team processes.
TEAM DEVELOPMENT
Our model of team effectiveness also includes a longitudinal dimension, signifying that things like team
processes and team states are not stable over time. For example, researchers have discovered that per-
ceptions of team efficacy measured shortly after a team is created do correlate with team performance.
However, team efficacy measured closer to the midpoint of a team’s task is a much stronger predictor
of team performance than efficacy measured earlier.79 What is known about the changes teams experi-
ence over time? Team members must get to know and trust each other, understand and agree on their
respective roles, discover appropriate and inappropriate behaviours, and learn how to coordinate with
each other. The longer team members work together, the better they develop common or complementary
mental models, mutual understanding, and effective performance routines to complete the work.
Two popular models that capture team development activities are shown in Exhibit 8.8.80 The first
shows teams moving systematically from one stage to the next, while the da~hed lines illustrate that
teams might fall back to an earlier stage of development as new members join or other conditions
disrupt the team’s maturity. Forming, the first stage of team development, is a period of testing and
orientation in which members learn about each other and evaluate the benefits and costs of continued
membership. People tend to be pol ite, will defer to authority, and try to find out what is expected of
them and how they wi ll fit into the team. The storming stage is marked by interpersonal conflict as

Chapter Eight Team Dynamics 233
EXHIBIT 8.8 Models of Team Development
The Five-Stage Model
Forming
• 01scover expectations
·Test bot11danes of behaviour
The Punctuated Equilibrium Model
Time Midpoint Time
members become more proactive and compete for various team roles. Members try to establish norms
of appropriate behaviour and performance standards.
During the nanning stage, the team develops its first real sense of cohesion as roles are established and a
consensus forms around group objectives and a common or complementary team-based mental model. By
the peiforming stage, team members have learned to efficiently coordinate and resolve conflicts. In high-
performance teams, members are highly cooperative, have a high level of trust in each other, are commit-
ted to group objectives, and identify with the team. Finally, the adjourning stage occurs when the team is
about to disband. Team members shift their attention away from task orientation to a relationship focus.
The second model of team development focuses more directly on how teams pay attention to time and
deadlines. This model, known a~ the punctuated equilibrium model, states that teams working under strict
deadlines experience three important phases: the initial meeting, a midpoint transition, and the period close
to the endpoint. 81 Each of these pha~es is connected by a period of inertia in which major changes to the
team’s task and direction are unlikely to occur. For example, a sn1dent team working on a project with a
deadline would experience the first phase in their initial meetings. Here, they might agree on how to allo-
cate workload and discuss overall goals for the project. After a period of inertia in which work progresses
smoothly, the team experiences a spike in activity around the midpoint. If the team manages team pro-
cess effectively at the midpoint, they set themselves up for another period of relative inertia leading to a

234 Part Three Team Processes
positive endpoint. However, without questioning their approach at the midpoint they set themselves up for
tension and conflict as work progresses to the endpoint. The most important practical lesson from these
models of team development is that teams need to carefully attend to the issue of time pacing.82
Developing Team Identities and Mental Models Although these models depict team
development fairly well, they are not a perfect representation of the process. For instance, some teams
remain in a particular stage longer than others and sometimes regress back to earlier stages of develop-
ment. The models also ma~k two sets of processes that are the essence of team development: developing
team identity; and developing team mental models and coordinating routines. 83
Developing team idenlity. Team development is apparent when its members shift from viewing
the team as something “out there” to something that is part of themselves. In other words, team
development occurs when employees take ownership of the team’s success and make the team
part of their social identity.84
Developing team menial models and coordinating routines. Team development includes
developing habitual routines with team members and forming shared or complementary mental
models.85 Team mental models are visual or relational mental images that are shared by team
members, such as what good customer service looks like. A meta-analysis supports the view
that teams are more effective when their members share common mental models of the work.86
Accelerating Team Development through Team Building Team building consists of
formal activities intended to improve the development and functioning of a work team.87 To a large
extent, team building attempts to speed up the team development process. This process may be applied
to new teams, but it is more commonly introduced for existing teams that have regressed to earl ier
stages of team development due to membership turnover or loss of focus.
Some team-building interventions are task-focused. They clarify the team’s performance goals, increase
the team’s motivation to accomplish these goals, and establish a mechanism for systematic feedback on
the team’s goal performance. A second type of team building tries to improve the team’s problem-solving
skills. A third category clarifies and reconstructs each member’s perceptions of her or his role as well as
the role expectations that member has of other team members. Role definition team building also helps the
team to develop shared mental models–common internal representations of the external world, such a~
how to interact with clients, maintain machinery, and engage in meetings. Research sntdies indicate that
team processes and performance depend on how well team members share common or complementary
mental models about how they should work together.88 A fourth-and likely the most common-type of
team building is aimed at helping team members learn more about each other, build trust in each other, and
develop ways to manage conflict within the team. Popular interventions such as wilderness team activities,
paintball wars, and obstacle-course challenges are typically offered to build trust.
Do team building interventions improve team development and effectiveness? The most effective team
building seems to be those in which employees receive training on specific team competencies, such a~
coordinating, conflict resolving, and communicating89 However, many team-building activities are less suc-
cessfi.tl.90 One problem is that team building interventions are used as general solutions to general team
problems. A better approach is to begin with a sound diagnosis of the team’s health and then select team-
building interventions that address specific weaknesses.91 Another problem is that team building is appl ied
as a one-shot medical inoculation that every team should receive when it is formed. In truth, team building
is an ongoing process, not a three-day jump start.92 Finally, we must remember that team building occurs on
the job, not just on an obstacle course or in a national park. Organizations should encourage team members
to reflect on their work experiences and to experiment with just-in-time learning for team development.
The team effectiveness model is a useful template for understanding how teams work-and don’t work-
in organizations. With this knowledge in mind, let’s briefly investigate two types of teams that have emerged
over the pa~t couple of decades to become important in organizations: self-directed teams and virntal teams.93

Chapter Eight Team Dynamics 235
Self-Directed Teams
Self-directed teams (SOTs) are cross-functional groups that are organized around work
processes, complete an entire piece of work requiring several interdependent ta~ks, and
have substantial autonomy over the execution of those tasks.94 This definition captures
two distinct features of SOTs. First, these teams complete an entire piece of work requiring several inter-
dependent tasks. This type of work arrangement clusters the team members together while minimiz-
ing interdependence and interaction with employees outside the team. The result is a close-knit group
of employees who depend on each other to accomplish their individual tasks. The second distinctive
feature of SOTs is that they have substantial autonomy over the execution of their tasks. In particular,
these teams plan, organize, and control work activities with little or no direct involvement of a higher-
status supervisor.
Self-directed teams are found in several industries, ranging from petrochemical plants to air-
craft parts manufacturing. Most of the top-rated manufacturing firms in North America appar-
ently rely on SOTs.95 Indeed, self-directed teams have become such a popular way to organize
employees in manufacturing, services, and government work that many companies don’ t reali ze
they have them. The popularity of SOTs is consistent with research ind icating that they poten-
tially increase both productivity and job satisfaction96 For instance, one study found that car
dealersh ip service shops that organize employees into SOTs are s ignificantly more profitable than
shops where employees work without a team structure. Another study reported that both short- and
long-term measures of customer satisfaction increased after street cleaners in a German ci ty were
organized into SOTs.
SUCCESS FACTORS FOR SELF-DIRECTED TEAMS
The successful implementation of self-directed teams depends on several factors.97 SOTs should be
responsible for an entire work process, such as making an entire product or providing a service. This
structure keeps each team sufficiently independent from other teams, yet it demands a relatively high
degree of interdependence among employees within the team98 SOTs should also have sufficient
autonomy to organize and coordinate their work. Autonomy al lows them to respond more quickly
and effectively to cl ient and stakeholder demands. It also motivates team members through feelings
of empowerment. Final ly, SOTs are more successful when the work site and technology support coor-
dination and communication among team members and increase job enrichment.99 Too often, man-
agement calls a group of employees a “team,” yet the work layout, assembly-l ine structure, and other
technologies isolate the employees from each other.
Virtual Teams
Virtual teams are teams whose members operate across space, time, and organizational bound-
aries and are linked through information technologies to achieve organizational tasks.100 Virtual
teams d iffer from traditional teams in two ways: (I) They are not usually co-located (do not work
in the same physical area), and (2) due to their Jack of co-location, members of virtual teams
depend primarily on information technologies rather than face-to-face interaction to communicate
and coordinate their work effort. Teams have degrees of virtuality. Team virtuali ty increases wi th
the geographic dispersion of team members, percentage of members who work apart, and percent-
age of time that members work apart. For example, a team has low virtuality when all of its mem-
bers live in the same ci ty and only one or two members work from home each day. High virtuali ty
exists when team members are spread around the world and only a couple of members have ever
met in person.

236 Part Three Team Processes
Debating Point:
ARE VIRTUAL TEAMS MORE TROUBLE THAN THEY’RE WORTH?
Virtua l teams were rare before the Internet. Today, they are almost as commonplace as face-
to-face teams. Virtual teams are increasingly possible because more of us are employed
in knowledge work rather than physical production. Furthermore, information technologies
make it easier to communicate instantaneously w ith co-workers around the globe. To some
extent, virtual teams have even become “cool.” It is almost a badge of honour to say that you
are a member of a far-flung team of people from several continents.
But whether they are stylish or commonplace, virtual teams seem to be increasingly necessary
for an organization’s competitive advantage. This chapter points out that we need virtual teams to
effectively engage in organizational learning. Knowledge has become the currency of organizational
success, and globalization has ensured that such knowledge is scattered around the world. In
short, organizations are at a disadvantage unless they make good use of virtual teams.
How could anyone claim that virtual teams aren’t worth the effort, particularly when orga-
nizational learn ing is one of the four pillars of organizational effectiveness (see Chapter 1)?
Well, actually, there are a few arguments against them. For the most part, critics don’t deny
the potential value of sharing knowledge through virtual teams. Rather, they have added up
the negative features and concluded that they outweigh the benefits. In fact, when ch ief infor-
mation officers were asked to identify the top challenges of globalization, 70 percent listed
managing virtual teams as the top concern (see OB by the Numbers later in this section).101
One persistent problem with virtual teams is that they lack the richness offace-to·-face com-
munication. We’ll provide more detail about this important matter in Chapter 9, but the vital
takeaway is that no information technology to date has facilitated the volume and variety of
information transmitted among people located in the same room. This is one reason Toyota,
PSA Peugeot Citroen, and other companies arrange for teams to meet in the same physical
space. They can exchange information in larger volumes. much faster, and more accurately,
compared with the clumsy methods currently available to virtual teams. Multiperson video
chat is getting more like face-to-face discussion, but it requires considerable bandwidth and
still falls short on communication richness.
Another problem with virtual teams is that people trust others more easily when they are
nearby.102 Various studies have reported that virtual team members either have lower trust
compared with co-located team members, or their trust is much more frag ile. In fact, experts
offer one main recommendation to increase trust among virtual team members-have them
spend time together as co-located teams.
A third drawback with virtual teams is that the farther away people are located, the more they
differ in experiences, beliefs, culture, and expectations. These differences can be advantageous
for some decisions, of course, but they can also be a curse for team development and perfor-
mance. “Everyone must have the same picture of what success looks like,” advises Rick Maurer.
a North American leadership consultant. “Without that laser-like focus, it is too easy for people in
Bangalore to develop a different picture of success than the picture held by their colleagues in
Brussels. Now multiply that by a couple more locations and you’ve got a mess.”103
Here’s one more reason why companies should think twice before relying on virtual teams:
People seem to have less influence or control over distant than over co-located co-workers.
A team member who stops by your cubicle to ask how your part of the report is coming along
has much more effect than an impersonal-or even a flaming-email from afar.
Perhaps that is why surveys reveal less satisfaction with virtual team members than co-
located team members.104 One study reported that distant colleagues received two to three
times as many complaints as co-located colleagues about working half-heartedly (or not at all)
on shared projects, falling behind on projects, not making deadlines, failing to warn about
missing deadlines, making changes without warn ing, and providing misleading information.
When asked how long it takes to resolve these problems, more than half of the respondents
indicated a few days for co-located team members, whereas most estimated a few weeks or
longer for distant team members.

Chapter Eight Team Dynamics 237
Virtual teams have become commonplace in most organizations. 1\vo-thirds of human resource
managers estimate that reliance on virtual teams will grow rapidly over the next few years.105 In global
companies such a~ IBM, almost everyone in knowledge work is part of a virtual team. One reason vir-
tual teams have become so widespread is that information technologies have made it easier than ever
before to communicate and coordinate with people at a distance.106 The shift from production-based
to knowledge-based work is a second reason why virtual teamwork is fea~ible. It isn’t yet possible to
make a physical product when team members are located apart, but most of us are now in jobs that
mainly process knowledge.
Information technologies and knowledge-based work make vir tual teams possible, but organiza-
tional learning and globalization are two reasons why they are increasingly necessary. In Chapter I, we
learned that organizational learning is one of four perspectives of organizational effectiveness. Virtual
teams represent a natural part of the organizational learning process because they encourage employees
to share and use knowledge where geography limits more direct forms of collaboration. Globalization
makes virtual teams increasingly necessary because employees are spread around the planet rather
than around one building or city. Thus, global businesses depend on vir tual teamwork to leverage the
potential of their employees .
• by the NUMBERS
More Virtual Teams, More Virtual Challenges 107
of managers polled in
large North American
companies say that
their firm’s reliance on
virtual teams will grow
in importance over the
next three years.
of North American chief
information officers
polled of indicate t hat
managing virtual teams is a
very important globalization
challenge (highest rated
issue on the I ist).
of managers say that it is somewhat
or very important that all members
of their department work from the
same location.
SUCCESS FACTORS FOR VIRTUAL TEAMS
Virtual teams face all the challenges of traditional teams, as well as the issues arising from time and
distance. These chal lenges increase with the team’s virtuality, particularly when it exists for only a
short time.108 Fortunately, OB research has identified the following strategies to minimize most virtual
team problems. 109 First, virtual team members require more than the team competencies described
earl ier in this chapter. They also require good communication technology skills, strong self-leadership
skills to motivate and guide their behaviour without peers or bosses nearby, and higher emotional
intelligence so that they can decipher the feelings of other team members from email and other limited
communication media.
Second, virtual teams should have a toolkit of communication channels (email, vir tual whiteboards,
video conferencing, etc.) as well a~ the freedom to choose the channels that work best for them. This
may sound obvious, but unfortunately senior management tends to impose technology on virtual teams,
often based on advice from external consultants, and expects team members to use the same commu-
nication technology throughout their work. In contrast, research suggests that communication channels
gain and Jose importance over time, depending on the task and level of trust.

238 Part Three Team Processes
Third, virtual teams need plenty of structure. In one recent review of effective virtual teams, many
of the principles for successful virtual teams related mostly to creating these structures, such as clear
operational objectives, documented work processes, and agreed upon roles and responsibilities.110
The final recommendation is that virtual-team members should meet face-to-face fairly early in the
team development process. This idea may seem contradictory to the entire notion of virtual teams,
but so far, no technology has replaced face-to-face interaction for high-level bonding and mutual
understanding.11 1
Team Decision Making
Self-directed teams, virtual teams, and practically all other groups are expected to make
decisions. Under certain conditions, teams are more effective than individuals at identi-
fying problems, choosing alternatives, and evaluating their decisions. To leverage these
benefits, however, we first need to understand the constraints on effective team decision making. Then,
we look at specific team structures that try to overcome these constraints.
CONSTRAINTS ON TEAM DECISION MAKING
Anyone who has spent enough time in the workplace can recite several ways in which teams stumble
in decision making. The five most common problems are time constraints, evaluation apprehension,
pressure to conform, overconfidence and information sharing.
Time Constraints A time-related constraint in most team structures is that only one person can
speak at a time.112 This problem, known as p roduction blocking, undermines idea generation in a few
ways. First, team members need to listen in on the conversation to find an opportune time to speak up,
but this monitoring makes it difficult for them to concentrate on their own ideas. Second, ideas are
fleeting, so the longer they wait to speak up, the more likely their flickering ideas will die out. Third,
team members might remember their fleeting thoughts by concentrating on them, but this causes them
to pay Jess attention to the conversation. By ignoring what others are saying, team members miss other
potentially good idea~.
Evaluation Apprehension Team members are often reluctant to mention idea~ that may seem
silly because they believe (often correctly) that other team members are silently evaluating them. 113 This
evaluation a pprehension is based on the individual ‘s desire to create a favourable self-presentation and
need to protect self-esteem. It is most common when meetings are attended by people with different
levels of status or expertise or when members formally evaluate each other’s performance throughout the
year (as in 360-degree feedback). Creative ideas often sound bizarre or illogical when first presented, so
evaluation apprehension tend~ to discourage employees from mentioning them in front of co-workers.
Pressure to Conform Team cohesion leads employees to conform to the team’s norms. This
control keeps the group organized around common goals, but it may also cause team members to sup-
press their dissenting opinions, particularly when a strong team norm is related to the issue. When
someone does state a point of view that violates the majority opinion, other members might punish the
violator or try to persuade him or her that the opinion is incorrect. Conformity can also be subtle. To
some extent, we depend on the opinions that others hold to validate our own views. If co-workers don’t
agree with us, we begin to question our own opinions even without overt peer pressure.
Overconfidence (Inflated Team Efficacy) Earlier in the chapter we described team efficacy
and stated that in most sin1ations it is better for a team to have higher rather than low levels. When mak-
ing an important decision, however, teams sometimes become overconfident and develop a false sense
of invulnerability. 114 In other words, the team’s efficacy far exceeds reality regarding its competencies
and the favourableness of the situation. Overconfident teams are Jess vigilant when making decisions,

Chapter Eight Team Dynamics 239
partly because they have more positive than negative emotions and moods during these events. They
also engage in Jess discussion (task conflict) and are Jess likely to seek out or accept information
located outside the team, both of which undermine the quality of team decisions.
Why do teams become overconfident? The main reason is a track record of past successes combined
with the perception that success is caused by team capabi lity rather than chance. The strategies for suc-
cess going forward may be different than the strategies that Jed to success in the pa~t. and overconfident
teams are more likely to persist with obsolete strategies. Team efficacy is further inflated by the mutu-
ally reinforcing beliefs of the team. We develop a clearly and higher opinion of the team when other
team members echo that opinion.
Information Sharing Problem Teams have the potential to make better decisions than indi-
viduals because they have access to more diverse information, knowledge, and perspectives. Mem-
bers who possess unique information should contribute that information to assist the group in making
a superior choice, right? In practice, this doesn’t generally work. Research shows that information
already he ld by a majority of group members before team discussion holds greater weight in deter-
mining a final choice than does information held by a minority of members, regardless of the validity
of the information.115 In other words, the importance of a given fact does not determine whether that
fact contributes to a group’s dec ision as much as the number of members aware of that fact prior to
the meeting.
IMPROVING CREATIVE DECISION MAKING IN TEAMS
Team decision making is fraught with problems, but several solutions also emerge from these bad-
news studies. Team members need to be confident in their decision making but not so confident that
they collectively feel invulnerable. This calls for team norms that encourage critical thinking as well
as team membership with sufficient diversity. Checks and balances need to be in place to prevent one
or two people from dominating the discussion. The team should also be large enough to possess the
collective knowledge to resolve the problem yet small enough that the team doesn’t consume too much
time or restrict individual input.
Along with these general recommendations, OB studies have identified five team structures that
encourage creativity in a team setting: brainstorming, brainwriting, electronic brainstorming, nominal
group technique, and allocation of roles. These structures emphasize idea creation (the central focus of
creativity), but some also include team selection of alternatives.
Brainstorming Brainstorming is a team event where participants try to think up as many idea~ as
possible. The process was introduced by advertising executive Alex Osborn in 1939 and has four simple
rules to maximize the number and quality of ideas presented: ( I) Speak freely-describe even the crazi-
est idea~; (2) don’t criticize others or their ideas; (3) provide as many ideas a~ possible-the quality of
ideas increa~es with the quantity of ideas; and (4) build on the idea~ that others have presented. These
rules are supposed to encourage divergent thinking while minimizing evaluation apprehension and
other team dynamics problems.116
Numerous Jab sn1dies have concluded that brainstorming doesn’t produce a~ many ideas as indi-
viduals working alone. Production blocking and evaluation apprehension are identified as the main
culprits. 117 These findings are perplexing because some of the most successful creative agencies and
design firms say that brainstorming is a helpful tool. 118 The leaders of these companies might be mis-
taken, but a more likely explanation is found in their advice that brainstorming takes considerable skill
and experience with a trained facilitator in a collaborative learning orientation culture. These condi-
tions are missing from most Jab studies, which are short-term events with inexperienced undergraduate
students who barely know each other. Also, brainstorming sessions are intended to produce creative
ideas, whereas Jab studies tend to measure the number of ideas. 119
Brainstorming likely improves team creativity, but it does have limitations. First, even with people who
are trained and experienced, brainstorming suffers from production blocking. Great ideas are forgotten

240 Part Three Team Processes
while team members listen to each other’s ideas, and sparks of insight are forfeited if team members
do not listen to each other’s idea~. A second problem, called fixation or conformity effect, is that
hearing another person’s ideas tends to restrict the variety of ideas that we subsequently think about.
In brainstorming, participants are asked to openly describe their idea~. but the first few verbal descrip-
tions might cause participants to limit their thinking to ideas similar to those first suggestions rather
than other categories of ideas. However, neuroscience sntdies report that people think more creatively
when exposed to moderately creative (but not wildly nonsensical) ideas generated by other people.120
Brainwriting Brainwriting is a variation of brainstorming that minimizes the problem of produc-
tion blocking by removing conversation during idea generation.121 There are many forms of brainwrit-
ing, but they all have the common feature that individuals write down their idea~ rather than verbal ly
describe them. In one version, participants write their ideas on cards and place them in the centre of
the table. At any time, participants can pick up one or more cards from the centre to spark their think-
ing or further bui ld (piggyback) on those ideas. In another variation, each person writes one idea on
a card, then passes the card to the person on their right. The receiving person writes a new idea on a
second card, both cards are sent to the next person, and the process is repeated. The limited research on
brainwriting suggests that it produces more and better qual ity ideas than brainstorming due to the lack
of production blocking.
Electronic Brainstorming Electronic brainstorming is similar to brainwriting but uses com-
puter technology rather than handwritten cards to document and share ideas. After receiving the ques-
tion or issue, participants enter their ideas using special computer software. The ideas are distributed
anonymously to other participants, who are encouraged to piggyback on those ideas. Team members
eventually vote electronically on the idea~ presented. Face-to-face discussion usually follows. Elec-
tronic brainstorming can be quite effective at generating creative ideas with minimal production block-
ing, evaluation apprehension, or conformity problems. 122 It can be superior to brainwriting because
idea~ are generated anonymously and they are viewed by other participants more easily. Despite these
numerous advantages, electronic brainstorming tends to be too structured and technology-bound.
Nominal Group Technique Nominal group technique is another variation of brainwriting
that adds a verbal element to the process.123 The activity is called “nominal” because participants are
a group in name only during two of the three steps. After the problem is described, team members
silently and independently write down as many solutions as they can. In the second stage, participants
describe their solutions to the other team members, usually in a round robin format. As with brain-
storming, there is no criticism or debate, although members are encouraged to a~k for clarification
of the ideas presented. In the third stage, participants silently and independently rank-order or vote
on each proposed solution. Nominal group technique has been applied in numerous laboratory and
real-world settings, such as identify ing ways to improve tourism in various countries. 124 This method
tends to generate a higher number of ideas and better-quality idea~ than do traditional interacting and
possibly brainstorming groups. 125 However, production blocking and evaluation apprehension still
occur to some extent. Training improves this structured approach to team decision making. 126
Assign Team Roles Earlier in the chapter we described some different roles team members can
adopt while working together. These roles are especially important when making decisions because they
help overcome some of the constraints described above. For example, when one team member agrees
to take on the role of Chal/enget; they assume responsibility for things like poking holes in assumptions
and critiquing solutions. Another team member, adopting the role of Innovator, might focus the group
on generating multiple alternatives, inquiring about unique information, and encouraging productive dis-
sent. Temporarily adopting roles can free people from the scourge of conformity and evaluation appre-
hension, but it is important to point out that role adoption shouldn’t be permanent. Switching roles from
meeting to meeting is a good way to overcome stereotyping and keep the team focused on the process.

Chapter Eight Team Dynamics
Chapter Summary
L01 Explain why employees join informal groups and discuss the benefits and limitations
of teams.
24 1
Teams are groups of two or more people who interact and influence each other, are mutually
accountable for achieving common goals associated with organizational objectives, and perceive themselves as a
social entity within an organization. All teams are groups, because they consist of people with a unifying relation-
ship; not all groups are teams, because some groups do not exist to serve organizational objectives.
People join informal groups (and are motivated to be on formal tean1s) for four rea~ons: ( I) They have an innate
drive to bond, (2) group membership is an inherent ingredient in a person’s self-concept, (3) some personal goals
are accomplished better in groups, and (4) individuals are comforted in stressful situations by the mere presence of
other people. Tean1s have become popular because they tend to make better decisions, support the knowledge
management process, and provide superior customer service. Teams are not always as effective as individuals
working alone. Process losses and social loafing drag down tean1 performance.
L02 Outline the team effectiveness model and discuss how task characteristics, team size, and
team composition influence team effectiveness.
Team effectiveness includes the team’s ability to achieve its objectives, fulfil d1e needs of its mem-
bers, and maintain its survival. The model of team effectiveness considers the team and organizational environ-
ment, team design, and team processes. Three tean1 design e lements are task characteristics, team size, and team
composition. Tean1s tend to be better suited for s ituations in which the work is complex yet tasks are well struc-
tured and have high task interdependence. Teams should be large enough to perform the work yet small enough for
efficient coordination and meaningful involvement. Effective tean1s are composed of people with the competen-
c ies and motivation to perform tasks in a team environment. Team member diversity has advantages and disadvan-
tages for team performance.
L03 Discuss bow shared percep tions among team members, called team states, emerge and
influence team effectiveness.
Team states represent motivational or cognitive characteristics of the tean1 that continuously evolve
and which tend to be shared between tean1 members. Exan1ples include tean1 norms, cohesion, tean1 efficacy, and
trust. Each of these e lements influences team performance, but can also be changed by feedback about team per-
formance. For example, a tean1 that receives negative performance feedback might experience a drop in both cohe-
sion and team efficacy.
L04 Discuss bow team processes, such as taskwork, teamwork, team boundary spanning, and
team development determine team effectiveness.
As teams work together they can focus on elements of the task (referred to as taskwork) or ele-
ments of the team’s internal dynamics or relationships (called teamwork behaviour). Together, these processes
determine how well the team manages its internal environment. On the other hand, teams also face opportuni-
ties to interact and build relationships with people or groups in the external environment. These processes are
called boundary spanning. In addition, teams develop through the stages of form ing, storming, norming, per-
form ing, and eventually adjourn ing. Within these stages are two distinct team development processes: develop-
ing team identity, and developing tean1 mental models and coordinating routines. Team development can be
accelerated through team building-any formal activity intended to improve the development and function ing
of a work team.
LOS Discuss the characteristics and factors required for the success of self-directed teams and
virtual teams.
Self-directed tean1s (SOTs) complete an entire piece of work requiring several interdependent tasks,
and they have substantial autonomy over the execution of their tasks. Members of virtual teams operate across
space, time, and organizational boundaries and are linked through information technologies to achieve organiza-
tional tasks. Virtual teams are more effective when the team members have certain competencies, the team has the
freedom to choose the preferred communication channels, and the members meet face-to-face fairly early in the
team development process.

24 2 Part Three Team Processes
LOG Identify four const raints on team decision making and discuss the advantages and disadvan-
tages of fou r s tructur es aimed at improving team decision making.
Team decisions are impeded by time constraints, evaluation apprehension, conformity to peer pres-
sure, and overconfidence. Four structures potentially improve decision making in team settings: brainstorming,
brainwriting, electronic brainstorming, and nominal group technique.
Key Terms
brainstorming
brainwriting
Brooks’s Jaw
electronic brainstorming
evaluation apprehension
nominal group technique
nornts
process losses
production blocking
role
self-directed teams (SOTs)
social loafing
task interdependence
taskwork behaviour
team boundary spanning
team building
team cohesion
team efficacy
teams
teamwork behaviour
virtual teams
Critical Thinking Questions
I. Informal groups exist in almost every form of social organization. What types o f informal groups exist in your
classroom? Why are students motivated to belong to these informal groups?
2. The late management guru Peter Drucker once said: “The now-fashionable team in which everybody works
with everybody on everything from the beginning rapidly is becoming a disappointment.” Discuss three prob-
lems associated with teams.
3. You have been put in charge of a cross-functional task force that will develop enhanced Internet banking
services for retai l customers. The tean1 includes representatives from marketing, information services, cus-
to mer service, and accounting, all of whom wi ll move to the san1e location at headquarters for three months.
Describe the behaviours you might observe during each stage of the team’s development.
4. You have just been transferred from the Montreal office to the Vancouver office of your company, a national
sales organ ization o f electrical products for developers and contractors. In Montreal, team members regularly
called customers after a sale to ask whether the products arrived on time and whether they are satisfied. But
when you move to the Vancouver office, no one seems to make these follow-up calls. A recently hired co-
worker explains that other co-workers d iscouraged her from making those calls. Later, another co-worker sug-
gests that your follow-up calls are making everyone else look lazy. Give three possible reasons why the norms
in Vancouver might be different from those in the Montreal office, even though the custo mers, products, sales
commissions, and other characteristics of the workplace are almost identical.
5. A software engineer in Canada needs to coordinate with four tean1 members in geographically dispersed areas of
the world . What tean1 challenges might the team experience and how will they affect the team design element~?
6. You have been assigned to a class project with five other student~. none of whom you have met before, and
some of whom come from different countries. To what extent would team cohesion improve your team’s per-
formance on this project? What actions would you recommend to build team cohesion among student team
members in this situation?
Suppose that you were put in charge of a virtual tean1 whose members are located in different cities around
the world. What tactics could you use to build and maintain team trust and performance, as well as minimize
the decline in trust and performance that often occurs in tean1s?
You are responsible for convening a major event in which senior offic ials fro m several state governments
will try to come to an agreement on environmental issues. It is well known that some officials posture so that
they appear superior, whereas others are highly motivated to solve the environmental problems that cross
adjacent states. What tean1 decision-making problems are likely to be apparent in this government forum, and
what actions can you take to minimize these problems?

Chapter Eight Team Dynamics 24 3
The chie f marketing officer of Sawgrass Widgets wants marketing and sales staff to identify new uses for
its products. Which of the four team structures for creative decision making would you recommend? Describe
and justify this process to Sawgrass’s chief marketing officer.
Case Study:
ARBRECORP LTEE
by Steven L. McShan e, Curtin University (Australia ) and University of Victoria (Canada ), and David Lebeter
ArbreCorp Ltee is a sawmill operation in Quebec that is owned by a major forest products company but operates
independently of the parent company. It was built 30 years ago, and completely updated with new machinery five
years ago. ArbreCorp receives raw Jogs from the area for cutting and planing into building-grade lumber, mostly
two-by-four and two-by-six pieces of standard lengths. Higher grade Jogs leave ArbreCorp’s sawmill department
in finished form and are sent directly to the packaging department. The remaining 40 percent of sawmill output are
cuts from lower grade logs, requiring further work by the plan ing department.
ArbreCorp has one general manager, 16 supervisors and support staff, and 180 unionized employees. The union-
ized employees are paid an hourly rate specified in the collective agreeme nt, wherea~ management and support staff
are paid a monthly salary. The mill is divided into six operating departments: boom, sawmill, planer, packaging,
shipping, and maintenance. The sawmill, boom, and packaging departments operate a morning shift starting at
6:00 a.m. and an afternoon shift starting at 2:00 p.m. Employees in these departments rotate shifts every two
weeks. The planer and shipping departments operate only morning shifts. Maintenance e mployees work the night
shift (starting at 10:00 p.m.).
Each department, except for packaging, ha~ a supervisor on every work shift. The planer supervisor is respon-
s ible for the packaging department on the morning shift, and the sawmill supervisor is responsible for t11e packaging
department on the afternoon shift. However, the packaging operation is housed in a separate building from the
other departments, so supervisors seldom vis it the packaging department. This is particularly true for the after-
noon shift, because the sawmill supervisor is the furthest distance from the packaging building.
PACKAGING QUALITY
Ninety percent of ArbreCorp’s product is sold on the international market through Boismarche Ltee, a large mar-
keting agency. Boismarche represents all forest products mills owned by ArbreCorp ‘s parent company a~ well
as several other clients in the region. The market for building-grade lumber is very price competitive, because
there are numerous mills selling a relatively undifferentiated product. However, some differentiation does occur in
product packaging and presentation. Buyers will look closely at the packaging when deciding whether to buy from
ArbreCorp or another mill.
To encourage its clients to package their product~ better, Boismarche sponsors a monthly package quality
award. The marketing agency samples and rates it~ clients’ packages dai ly, and the sawmill with the highest score
at the end of the month is awarded a framed certificate of excellence. Package quality is a combination of how the
lumber is piled (e.g., defects turned in), where the bands and dunnage are placed, how neatly the s tencil and seal
are applied, the stenci l’s accuracy, and how neatly and tightly the plastic wrap is attached .
ArbreCorp has won Boismarche’s packaging quality award several times over the pa~t five years and received
high ratings in the months that it didn’t win. However, the mill’s ratings have started to decline over the pa~t year
or two, and several clients have complained about the appearance of the finished product. A few large customers
switched to competitors’ lumber, saying that the decision was based on t11e substandard appearance of ArbreCorp’s
packaging when it arrived in their lumberyard.
BOTILENECK IN PACKAGING
The planer and sawmilling department~ have significantly increased productivity over the pa~t couple of years.
The sawmill operation recently set a new productivity record on a s ingle day. The planer operation has increased
productivity to the point where last year it reduced operations to just one (rather than two) shifts per day. These
productivity improvements are due to better operator training, fewer machine breakdowns, and better selection of
raw Jogs. (Sawmill cuts from high-quality Jogs usually do not require planing work.)
Productivity levels in the boom, shipping, and maintenance departments have remained constant. However,
the packaging department has recorded decreasing productivity over the past couple of years, with the result that
a large backlog of finished product is typically stockpiled outside the packaging building. The morning shift of
the packaging department is unable to keep up with the combined production of the sawmill and planer depart-
ments, so the unpackaged output is left for the afternoon shift. Unfortunately, the afternoon shift packages even

244 Part Three Team Processes
less product than the morning shift, so the backlog continues to build . The backlog adds to ArbreCorp’s inventory
costs and increases the risk of damaged stock.
ArbreCorp has added Saturday overtime shifts as well as extra hours before and after the regular shifts for
the packaging department employees to process this backlog. La~t month, the packaging department employed
10 percent of the workforce but accounted for 85 percent of the overtime. This is frustrating to ArbreCorp’s
management, because time and motion studies recently confirmed that the packaging department is capable of
processing all of the daily sawmill and planer production without overtime. With employees earning one and a half
times or double their regular pay on overtime, ArbreCorp’s cost competitiveness suffers.
Employees and supervisors at ArbreCorp are aware that people in the packaging department tend to extend
lunch by 10 minutes and coffee breaks by five minutes. They also typical ly leave work a few minutes before the end
of a shift. This abuse has worsened recently, particularly on the afternoon shift. Employees who are temporarily
assigned to the packaging department also seem to participate in this time Joss pattern after a few days. Although
they are punctual and productive in other departments, these temporary employees soon adopt the packaging
crew’s informal schedule when assigned to that department.
Discussion Questions
I. What symptom(s) in this case suggest that something has gone wrong?
2. What are the main causes of these symptoms?
3. What actions should executives take to correct these problems?
©Copyright. 1995 Steven L McShane and David Lebeter. This case is based on actual evenL~. but names and some characteris·
tics have been changed to maintain anonymity.
Tea m Exercise:
TEAM TOWER POWER
Purpose This exercise is designed to help you understand tean1 roles, team development, and other issues in
the development and maintenance of effective teams.
Materials The instructor will provide enough LEGO”‘ pieces or similar materials for each tean1 to complete
the assigned task. All teams should have identical (or very s imilar) amounts and types of pieces. The instructor
will need a measuring tape and stopwatch. Students may use writing materials during the design stage (see
Instructions). The instructor will distribute a “Team Objectives Sheet” and “Tower Specifications Effectiveness
Sheet” to all tean1s.
Instructions The instructor will divide the class into teams. Depending on class size and space availabil ity,
teams may have between four and seven members, but all should be approximately equal size.
Each team has 20 minutes to design a tower that uses only the materials provided, is freestanding, and provides
an optimal return on investment. Team members may wish to draw their tower on paper or a flip chart to facilitate
the tower’s design. Tean1s are free to practise building their tower during this stage. Preferably, each team will have
a secluded space so that the design can be created private ly. During this stage, each tean1 wi ll complete the Team
Objectives Sheet distributed by the instructor. This sheet requires the Tower Specifications Effectiveness Sheet,
also distributed by the instructor.
Each tean1 will show the instructor that it has completed its Tean1 Objectives Sheet. Then, with all teams in
the same room, the instructor will announce the start of the construction phase. The time allowed for construction
will be closely monitored, and the instructor will occasionally call out the time elapsed (particularly if there is no
clock in the room).
Each team will advise the instructor as soon as it has completed its tower. The team will write down the time
e lapsed, as determined by the instructor. The tean1 also may be a~ked to assist the instructor by counting the num-
ber o f blocks used and measuring the height of the tower. This in formation gets added to the Tean1 Objectives
Sheet. Then the team calculates its profit.
After presenting the results, the class will discuss the team dynamics elements that contribute to team effec-
tiveness. Tean1 members will discuss their strategy, division of labour (team roles), expertise within the team, and
other elements of team dynamics.
Source: Sever.tl published and online sources describe variations of this exercise, but there is no known origin to this activity.

Chapter Eight Team Dynamics 245
Self-Assessments for Chapter 8
SELF-ASSESSMENT NAME
What team roles do you prefer?
Are you a team player?
How trusting are you?
DESCRIPTION
All teams depend on their members to fill various roles. Some
roles area assigned through formal jobs. but many team roles are
distributed informally. Informal roles are often claimed by team
members \.\ilose personality and values are compatible with those
roles. This assessment identifies the types of roles you prefer in
team meetings and activities.
Some people would like to work in teams for almost every aspect
of their V.’Ork. whereas other people would like to keep as far away
from teams as possible. Most of u.s fal1 somewhere in between. This
se(f .. asse.~sment estimates how much you e njoy working in teams.
Some people have a tendency to trust others. even if they have
never met them before, whereas others take a long time to develop
a comfortable level of trust. This propensity to trust is due to each
individual’s personality. values. and socialization experiences. This
self·asse.~sment evaluates your general propensity to trust others.

CHAPTER 9
Communicating in Organizations
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
LO 1 Explain why communicat ion is important in organizations and discuss four influences on effective
communication encoding and decoding.
L02 Compare and contrast the advantages of and problems with electronic mail, other verbal
communication media, and nonverbal communicat ion.
L03 Explain how social acceptance and media richness influence the preferred communication channel.
L04 Discuss various barriers (noise) to effect ive communication, including cross-cultural and
gender-based differences in communication.
LOS Explain how to get your message across more effectively, and summarize the elements of active
listening.
L06 Summarize effective communication strategies in organizational hierarchies, and review the role and
relevance of the organizational grapevine.
246

Chapter Nine Communicating in Organizations 247
OuickContractors.com is a Guelph, Ontario-based company that connects retailers with contractors
willing to deliver and assemble products for their customers. In 2016 they were in the middle of
a significant growth spurt. The company had expanded from a small upstart and had dozens of
employees, a database of 1500 contractors and such industry giants as Lowe’s, Home Depot, and
Canadian Tire as clients. From 2009 to 2014, sales increased by 4,184 percent.
This rapid success created logistical problems, especially on the communications side. “We
had enquiries coming in from our contractors and our retailers, and we had information coming in
from Twitter, Facebook, and lnstagram,” explains Trevor Bouchard, the company’s president and
CEO. “Our business has a multitude of touch points-we have a software component; we have to
coordinate contractors; we have invoices and accounting-and we were trying to reconcile all of
that with different systems.” With various types of messages coming in from different platforms
(phone, email, social media posts, live chats), it was becoming increasingly difficult to keep track
of who was saying what and to whom. “We had people answering live chats while answering the
phones,” Bouchard recalls. “It wasn’t an effective way to handle our communications. That’s when I
realized, ‘OK, we need to start unifying these different channels into one.'”
Bouchard had heard about unified communications (UC), and he was intrigued. The more
he learned, the more curious he became. Unified communications refers to the integration of
workplace communication tools, such as a platform that integrates instant messaging and file
sharing. Many UC platforms provide a single interface that can be used across multiple devices to
receive and share information. After Googling UC implementations and asking around at industry
events, Bouchard had plenty of information but no clear idea about how to proceed. So he put
some thought into what would make UC successful at his business. Given the volume and variety
of employees who would be using a UC platform at OuickContractors.com, he realized it was
paramount to choose an option with an intuitive interface. “I thought if I could figure it out-and
I don’t have formal technical training-it would be fairly intuitive for the rest of our staff, the ones
actually using it.” 1
A s the QuickContractors.com example demonstrates, modern organizations sometimes struggle to manage and use technology. When Facebook and other social media sites gained popularity,
many businesses blocked employee access and banned their use, claiming social media encouraged
time wasting and became portals for distributing intellectual property. This perspective has rapidly and
dramatically changed. Currently, many companies are adopting social media as a cornerstone of their
communication strategy and seek to capital i ze on the fact that their employees tweet, blog, comment,
post, pin, snap, and stream. Businesses have begun to recognize that internal communications to pro-
mote their brands within the company are as important as external marketing because employees who
network and share can be the l inchpin to the success of a brand carnpaign.2 Businesses have discovered
that new social media channels offer signi ficant potential for information sharing and social bonding,
and that the workforce increasingly uses and expects their organizations to provide these communica-
tion channels. In fact, the populari ty of Facebook’s recently launched “Workplace”-a mobile and
web application for companies to keep employees connected using the original Facebook platform
and features-may eclipse the use of email in certain industries. Despite the vast array of social media
and technological developments, we may still be at the beginning of this revolution. Each new method
of social interaction creates fascinating changes in how people communicate with each other in the
workplace.
Communication refers to the process by which information is transmi tted and understood between
two or more people. We emphasize the word “understood” because transmi tting the sender’s intended
meaning is the essence of good communication. This chapter begins by discussing the importance
of effective communication, outl ining the communication process model , and discussing factors that
improve communication coding and decoding. Next, we identify types of communication channels,
including emai l and social media sites, followed by factors to consider when choosing a communica-
tion medium. This chapter then identifies barriers to effecti ve communication. The latter part of this
chapter offers an overview of ways to communicate in organizational hierarchies and offers insight
about the pervasive organizational grapevine.

24 8 Part Three Team Processes
The Importance of Communication
Effective communication is vital to all organizations, so much so that no company could
exist without it. The reason? Recal l from Chapter I that organizations are defined as
groups of people who work interdependently toward some purpose. People work interde-
pendently only when they can communicate with each other. Although organizations rely on a variety
of coordinating mechanisms (which we discuss in Chapter 13), frequent, timely, and accurate commu-
nication remains the primary means through which employees and work units effectively synchronize
their work.3 Chester Barnard, a telecommunications CEO and a respected pioneer in organizational
behaviour theory, made this observation back in 1938: “An organization comes into being when there
are persons able to communicate with each other.”4
In addition to coordination, communication plays a central role in organizational learning. It is the
means through which knowledge enters the organization and is distributed to employees.s A third func-
tion of communication is decision making. Imagine the chal lenge of making a decision without any
information about the decision context, the alternatives available, the likely outcomes of those options,
or the extent to which the decision is achieving its objectives. All of these ingredients require com-
munication from co-workers as well as from stakeholders in the external environment. For example,
airline cockpit crews make much better decisions-and thereby cause far fewer accidents-when the
captain encourages the crew to openly share information.6
Consider how a new digitized radio communication system launched in Alberta helped police, fire-
fighters, and emergency medical services during the Fort McMurray wildfire crisis in 2016. Previ-
ously, each of these first responders had their own separate communication system, making it difficult
for them to coordinate efforts. During the devastating onslaught of the wildfires in Fort McMurray,
one of Canada’s largest natural disasters, emergency personnel used the new Alberta First Responders
Radio Communications System, which allowed over 30 departments in multiple emergency agencies
to speak directly with each other as the city wa~ being evacuated. The new communications system was
credited with literally saving Jives because it facilitated the different agencies to come together quickly
and effectively.7
A fourth function of communication is to change behaviour. 8 When communicating to others, we
are often trying to alter their beliefs and feelings and, ultimately, their behaviour. This influence pro-
cess might be passive, such as by merely describing the situation more clearly and fully, or it might be
a deliberate attempt to change someone’s thoughts and actions. We discuss the topic of persuasion later
in this chapter, and further in Chapter 10.
Fifth, communication supports employee well-being.9 Informationally, communication con-
veys knowledge that helps employees to better manage their work environment. For instance,
research shows that new employees adjust much better to the organization when co-workers com-
municate subtle nuggets of wisdom, such as how to avoid office polit ics, complete work proce-
dures correctly, f ind useful resources, handle d ifficul t customers, and so on. 10 Emotionally, the
communication experience itself is a soothing balm. Indeed, people are less susceptible to colds,
cardiovascular d isease, and other physical and mental illnesses when they have regular social
interaction.11 In essence, people have an inherent drive to bond, to validate their self-worth, and to
maintain their social identity. Communication is the means through which these drives and needs
are fulfilled.
Finally, reflect on the following question: Does the manner in which we speak influence our suc-
cess? Research does, in fact, provide substantial support for the link between speech styles and subse-
quent status attainment. When we say speech styles, we mean things like hesitation (e.g., “well,” “urn”),
hedges (e.g., “kinda,” “sort of’), disclaimers (e.g., “This may be a bad idea, but .. . “), and formal
addresses (e.g., “No, sir”). People who speak a~sertively, by avoiding these tentative speech styles, are
judged by observers as more likely to be promoted and supported by superiors. These effects also work
in negotiation-people who use a~sertive speech are judged to be more competent and cooperative by
negotiation counterpart~. 12

Chapter Nine Communicating in Organizations 24 9
A Model of Communication
To understand the key interpersonal features of effective communication, Jet’s examine the model pre-
sented in Exhibit 9.1, which provides a useful “conduit” metaphor for thinking about the communica-
tion process.13 According to this model, communication flows through channels between the sender
and receiver. The sender forms a message and encodes it into words, gesn1res, voice intonations, and
other symbols or signs. Next, the encoded message is transmitted to the intended receiver through one
or more communication channels (media). The receiver senses the incoming message and decodes it
into something meaningful. Ideally, the decoded meaning is what the sender had intended.
In most situations, the sender looks for evidence that the other person has received and understood
the transmitted message. This feedback may be a formal acknowledgment, such as “Yes, I know what
you mean,” or indirect evidence from the receiver’s subsequent actions. Notice that feedback repeats
the communication process. Intended feedback is encoded, transmitted, received, and decoded from
the receiver to the sender of the original message. This model recognizes that communication is not a
free-flowing conduit. Rather, the transmission of meaning from one person to another is hampered by
noise-the psychological, social, and structural barriers that distort and obscure the sender’s intended
message. If any part of the communication process is distorted or broken, the sender and receiver will
not have a common understanding of the message.
INFLUENCES ON EFFECTIVE ENCODING AND DECODING
According to the communication process model, effective communication depends on the ability
of sender and receiver to efficiently and accurately encode and decode information. How well this
encoding-Ciaran Griffin/Photodisc/Getty Images
How politically charged is your school? You can d iscover the level of organizational
politics in your school by locating this self-assessment in Connect.

Chapter Ten Power and Influence in the Workplace 299
MINIMIZING ORGANIZATIONAL POLITICS
Researchers have identified several conditions that support organizational politics, so we can identify
corresponding strategies to keep pol itical activities to a minimum.98 First, organizational politics is
triggered by scarce resources in the workplace. When budgets are slashed, people rely on pol itical tac-
tics to safeguard their resources and maintain the status quo. Although it is not easy to maintain or add
resources, sometimes this action may be Jess costly than the consequences of organizational politics.
Second, organizational politics is suppressed when resource allocation decisions are clear and sim-
pl ified. Political tactics are fuelled by ambiguous, complex, or nonexistent formal rules because those
tactics help people get what they want when decisions Jack structural guidelines. Third, organizational
change tends to bring out more organizational pol itics, mainly because change creates ambiguity and
threatens the employee’s power and other valued resources.99 Consequently, leaders need to apply
the organizational change strategies that we describe in Chapter 15, particularly through communication,
learning, and involvement. Research has found that employees who are kept informed of what is going
on in the organization and who are involved in organizational decisions are Jess likely to observe orga-
nizational politics.
Finally, political behaviour is more common in work units and organizations where it is tolerated
and reinforced. Some companies seem to nurture self-serving behaviour through reward systems and
by demonstrating it in the behaviours of organizational leaders. To minimize pol itical norms, the orga-
nization needs to diagnose and alter systems and role modelling that support self-serving behaviour.
They should support organizational values that oppose political tactics, such as altruism and customer
focus. One of the most important strategies is for leaders to become role models of organizational citi-
zenship rather than symbols of successful organizational pol iticians.
Personal Characteristics Several personal characteristics affect a person’s motivation to engage
in self-serving behaviour. 100 This includes a strong need for personal as opposed to socialized power.
Those with a need for personal power seek power for its own sake and try to acquire more power. Some
individuals have strong Machiavellian values. Machiavellianism is named after Niccoli:> Machiavelli, the
16th-century Italian philosopher who wrote The Prince, a famous treatise about political behaviour. Peo-
ple with high Machiavellian values are comfortable with getting more than they deserve, and they believe
that deceit is a nantral and acceptable way to achieve this goal. They seldom trust co-workers and tend
to use cruder influence tactics, such as bypassing one’s boss or being assertive, to get their own way. 101
How Machiavellian are you? You can discover how much you value the political
tactics emphasized by Machiavelli by locating this self-assessment in Connect.
Chapter Summary
LO 1 Describe the dependence model of power and describe the five sources of power in org~tnizations.
Power is the capacity to influence others. It ex ists when one party perceives that he or she is
dependent on the other for something of value. However, the dependent person must also have
countervailing power-some power over the dominant party—4o maintain the relationship, and
the parties must have some level of trust.
There are five power bases. Legitimate power is an agreement among organizational members that people in
certain roles can request certain behaviours of others. This power has restrictions represented by the target

300 Part Three Team Processes
person’s zone of indifference. It also includes the norm of reciprocity (a feeling of obl igation to help someone
who has helped you) as well as control over the flow of information to others. Reward power is derived from the
abi lity to contro l the allocation of rewards valued by others and to remove negative sanctions. Coercive power
is the abi lity to apply punishment. Expert power is the capacity to influence others by possessing knowledge or
skills that they value. An important form of expert power is the (perceived) ability to manage uncertainties in
the business environment. People have referent power when others identify with them, like them, or otherwise
respect them.
L02 Discuss the four contingencies of power.
Four contingencies determine whether these power bases translate into real power. Individuals
and work units are more powerful when they are non-substitutable, that is, there is a Jack of
alternatives. Employees, work units, and organizations reduce substitutabil ity by controlling
tasks, knowledge, and labour, and by di fferentiating themselves from competitors. A second contingency is
central ity. People have more power when they have high central ity, that is, the number of people affected is
large and people are quickly affected by their actions. The third contingency, visibility, refers to the idea that
power increases to the extent that a person’s or work unit’s competencies are known to others. Discretion, the
fourth contingency of power, refers to the freedom to exercise judgment. Power increases when people have
freedom to use their power.
L03 Explain how people and work units gain power through social networks.
Social networks are social structures of individuals or social units (e.g., departments, organiza-
tions) that are connected to each other through one or more forms of interdependence. People
receive power in social networks through social capital, which is the goodwi ll and resulting
resources shared an10ng members in a social network. Three main resources from social networks are information,
visibility, and referent power.
Employees gain social capital through their relationship in the social network. Social capital tends to
increase with the number of network ties. Strong ties (close-knit relationships) can also increase social capital
because these connections offer more resources and offer them more quickly. However, having weak ties with
people from diverse networks can be more valuable than having strong ties with people in similar networks.
Weak ties provide more resources that we do not already possess. Another influence on social capital is the
person’s centrality in the network. Network centrality is determined in several ways, including the extent to
which you are located between others in the network (betweenness), how many direct ties you have (degree),
and the closeness of these ties. People also gain power by bridging structural holes- linking two or more clus-
ters of people in a network .
L04 Describe eight types of influence tactics, three consequences of influencing others, and
three contingencies to consider when choosing an influence tactic.
Influence refers to any behaviour that attempts to alter someone’s attitudes or behaviour. The most
widely studied influence tactics are silent authority, assertiveness, information control, coalition
formation, upward appeal , impression management, persuasion, and exchange. “Soft” influence tactics such as
friendly persuasion and subtle ingratiation are more acceptable than “hard” tactics such as upward appeal and
assertiveness. However, the most appropriate influence tactic also depend~ on the influencer’s power base; whether
the person being influenced is higher, lower, or at the same level in the organization; and personal, organizational,
and cultural values regarding influence behaviour.
LOS Identify the organizational conditions and personal characteristics that support
organizational politics, as well as ways to minimize organizational politics.
Organizational politics refers to influence tactics that others perceive to be self-serving behaviours
at the expense of others and sometimes contrary to the interests of the organization. It is more
common when an1biguous decisions allocate scarce resources and when the organization tolerates or rewards
political behaviour. Individuals with a high need for personal power and strong Machiavellian values have a higher
propensity to use political tactics. Organizational politics can be minimized by providing clear rules for resource
allocation, establishing a free flow of information, using education and involvement during organizational change,
supporting team norms and a corporate culture that discourage dysfunctional politics, and having leaders who role
model organizational citizenship rather than pol itical savvy.

Chapter Ten Power and Influence in the Workplace
Key Terms
cent rality
charisma
coalition
countervailing power
impression management
influence
inoculation effect
legitimate power
Machiavellian values
norm of reciprocity
organizational politics
power
referent power
social capital
social networks
structural hole
substitutability
upward appeal
Critical Thinking Questions
301
I. What role does countervai ling power play in the power relationship? Give an example of your own encounter
with countervai ling power at school or work.
2. Until recently, a mining company’s data resided in the department that was responsible for that information.
Property data were on the computers in land administration, hydrocarbon data were in the well administration
group, maps were found in the map department, and so on. The executive team concluded that this arrange-
ment was dysfunctional , so the CEO announced that all information wou ld be placed on a central server
system so it is widely accessible. lf someone needs a colour map, for example, he or she can retrieve it from
the central server without going through the map department. Rather than welcome the change, employees
in several departments complained, offering several arguments why other groups shou ld not have direct
access to their data files. Some departments tried to opt out of the centralized server syste m. Using the model
of sources and contingencies of power, explain why some groups opposed the central server model of data
access.
3. You have just been hired as a brand manager of toothpaste for a large consumer products company. Your job
mainly involves encouraging the advertising and production groups to promote and manufacture your product
more effectively. These department~ aren’t under your direct authority, although company procedures indicate
that they must complete certain tasks requested by brand managers. Describe the sources of power you can
use to ensure that the advertising and production departments will help you make and sell toothpaste more
effectively.
4. How does social networking increase a person’s power? What social networking strategies could you initiate
now to potentially enhance your future career success?
5. List the eight influence tactics described in this chapter in terms of how they are used by students to influence
their university instructors. Which influence tactic is applied most often? Which is applied least often, in your
opinion? To what extent is each influence tactic considered legitimate behaviour or organizational politics?
6. Consider a situation where there is a s ingle female member in a team of six and she is generally excluded
from informal gatherings of the tean1. What kind of influence tactics can she use to make up for this
limitation?
7. In the mid-1990s, the CEO of Apple Computer invited the late Steve Jobs (who was not associated with the
company at the time) to serve as a special adviser and raise morale among Apple employees and customers.
While doing this, Jobs spent more time advising the CEO on how to cut costs, redraw the organization chart,
and hire new people. Before long, most of the top people at Apple were Jobs’ colleagues, who began to
systematically evaluate and weed out teams of Apple employees. While publicly supporting Apple’s CEO,
Jobs privately criticized him and, in a show of non-confidence, sold 1.5 million shares of Apple stock he had
received . This action caught the attention of Apple’s board of d irectors, who soon after decided to replace
the CEO with Steve Jobs. The CEO claimed Jobs was a conniving back-stabber who used political tactics to
get his way. Others suggest that Apple would be out of business today if he hadn’ t taken over the company.
In your opinion, were Steve Jobs’ actions examples of organizational politics? Justify your answer.
8. This book frequently emphasizes that successful companies engage in organizational learning. How do
political tactics interfere with organizational learning objectives?

302 Part Three Team Processes
Case Study:
RESONUS CORPORATION
by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canada). Based on an
ear lier case writt en by J ohn A. Seeger.
Frank Choy is normally a quiet person, but his patience has already worn thin by interdepartmental battles. Choy
joined Resonus Corporation, a hearing aid designer and manufacturer, eight months ago as director of engineer-
ing. Production of the latest product has been delayed by two months and Choy·s engineering services department
(ESD)-which prepares final manufacturing specifications-is taking the heat as the main culprit for these delays.
Similar delays have been occurring at Resonus for the past few years. The previous engineering director was fired
after 18 months; the director before him quit after about d1e san1e an10unt of time.
Bill Hunt, CEO of Resonus for the past 15 years, responded to these problems by urging everyone to remain
c ivil. ‘ ‘I’m sure we can resolve these differences if we just learn to get along better,” he said, whenever a dispute
broke out. Hunt disliked firing anyone, but felt the previous engineering director was too confrontational. “I spent
too much time smoothing out arguments when he was here,” Hunt thought to himsel f soon after Choy was hired .
“Frank (Choy), on the other hand, seems to fi t into our culture o f collegiality.”
Hunt was groomed by the company’s founder and took great pride in preserving the organization’s family
spirit. He also discouraged bureaucracy, bel ieving that Resonus operated best through informal relationships
among its managers. Most Resonus executives were similarly informal, except Jacqui Blanc, the production
director, who insisted on s trict guidelines. Hunt tolerated Blanc’s formal style because soon after joining Reso-
nus five years ago, she discovered and cleaned up fraudulent activity involving two production managers and a
few suppliers.
The organizational chart shows that Frank Choy oversees two departments: ESD and research. In reality, “Doc”
Kalandry, the research director, informally reports direcdy to the CEO (Hunt) and has never considered the direc-
tor o f engineering as his boss. Hunt actively support~ this informal reporting re lationship because of Doc’s special
status in the organization. “Doc Kalandry is a living genius,” Hunt told Choy soon after he joined the firm. “With
Doc at the helm of research, this company wi ll continue to lead the field in innovation.” Hunt’s fi rst job at Resonus
was in the research group and Choy suspected that Hunt still favoured that group.
Everyone at Resonus seems to love Doc’s successfu l products, his quirky style, and his over-the-top enthusi-
asm, but some of Choy’s ESD staff are also privately concerned. Says one engineer: “Doc is like a happy puppy
when he gets a new product idea. He delights in the discovery, but also won’t let go of it. He also gets Hunt too
enthusiastic. But Doc’s too optimistic; we’ve had hundred~ of production change orders already this year. If I were
in Frank’s shoes, I’d put my foot down on all this new development.”
Soon after joining Resonus, Choy realized that ESD employees get most of the blame and little of the credit
for their work. When production staff find a design fault, they direcdy contact the research design engineer who
developed the technology rather than the ESD group who prepare the specifications. Research engineers willingly
work with production because they don’t want to let go of their project. “The designers seem to feel they’re losing
something when one of us (ESD) tries to help,” Choy explains.
Meanwhile, production supervisors regularly critique ESD staff whereas they tend to accept explanations from
the higher-status research department engineers. “Production routinely complains about every little specification
error, many of which are due to design changes made by the research group,” says one frustrated ES D technician.
“Many of us have more than 15 years· experience in this work. We shouldn’t have to prove our ability all the time,
but we spend as much time defending ourselves as we do getting the job done.”
Choy·s latest troubles occurred when Doc excitedly told Hunt about new nano-processor technology that he
wanted to install in the forthcoming high-end hearing aid product. As with most of Doc’s previous last-minute
revis ions, Hunt endorsed this change and asked Choy and Blanc (the production director) to show their commit-
ment, even though production was scheduled to begin in less than three weeks. Choy wanted to protest, knowing
that his department would have to tackle unexpected incompatibil ity design errors. Instead, he quiedy agreed to
Hunt’s request to avoid acting like his predecessor and facing s imilar consequences (getting fired). Blanc curtly
stated that her group was ready if Choy’s ESD unit could get accurate production spec ifications ready on time and
if the sales director would stop making wild delivery promises to customers.
When Doc’s revised design specs arrived more than a week later, Choy’s group discovered numerous incom-
patibilities that had to be corrected. Even though several ESD staff were a~ signed to 12-hour days on the revis ions,
the final production specifications weren’t ready until a couple o f days after the deadline. Production returned
these specs two days later, noting a few e lements that required revision because they were too cosdy or difficult
to manufacture in their current form. By that time, the production director had to give priority to other jobs and
move the new hearing aid product further down the queue. This meant that manufacturing of the new product was

Chapter Ten Power and Influence in the Workplace 303
delayed by at least two months. The sales director was furious and implied that Frank Choy’s incompetence was
to blame for this catastrophe.
Discussion Questions
I. What sources and contingencies o f power existed among the executives and departments at Resonus?
2 . What influence tactics were evident in this case study? Would you define any of these influence activities as
organizational politics? Why or why not?
3. Suppose you are a consultant invited to propose a solution to the problems facing this organization’s product
delays. What would you recommend, particularly regarding power dynamics among the executives and
departments?
By Steven L McShane. based on an earlier case written by John A. Seeger.
Team Exercise:
DECIPHERING THE (SOCIAL)
NETWORK
Purpose This exercise is designed to help student~ interpret social network maps, including their implications
for organizational effectiveness.
Materials The instructor will distribute several social network diagrams to each student.
Instructions (Smaller classes) The instructor will organize students into teams (typically four to seven people,
depending on class size). Teams will examine each social network diagran1 to answer the following questions:
I. What aspects o f this diagram suggest that the network is not operating as e ffectively as possible?
2. Which people in this network seem to be most powerful? Least powerfu l? What information or features of the
diagram lead you to this conclusion?
3. If you were responsible for this group o f people, how would you change this situation to improve their
e ffectiveness?
After teams have diagnosed each social network map, the class will debrief by hearing each team ‘s assessments
and recommendations.
Instructions (Larger classes) This activity is also possible in large classes by projecting each social
network diagram on a screen and giving students a minute or two to exan1ine the diagram. The instructor can
then ask specific questions to the class, such as pointing to a speci fic individual in the network and asking
whether he/she has high or low power, what level of centrality is apparent, and whether the individual’s
connections are mainly strong or weak ties. The instructor might also ask which quadrant on the map indicates
the most concern and then allow individual students to provide their explanation why.
Self-Assessments for Chapter 10
—-~-4 DESCRIPTION
Do you have a guanxi orientation?
I_
Connections and social networks are important. no matter where
you do business around the world. These interpersonal relationships
are called guanxi in China. where they are very important due to
Confucian values and the unique history of that country. This self·
a..~sessment estimates the degree to which you display traditional
gumu·i values.
—-‘-

304 Part Three Team Processes
I SELF-ASSESSMENT NAME
How do you in fluence co-workers and other
peers?
How politically charged is your school?
How Machiavell ian are you?
DESCRIPTION
Working wilh others in organizations is an ongoing process of
coordination and cooperation. Part of that dynamic is changing our
attitudes and behaviour as well as motivating others to change their
attitudes and behaviour. In other words. everyone engages in influ·
ence tactic..”‘ to get things done. T he re are many \\’a)’S to influence
other people. some of which work better than others. depending
on the s ituation. Use this tool to assess the types of influence you
might employ and your preference for various tactics.
Every organization has some degree of organizational politics.
Depending on behavioural norms and organizational culture.
employees in some companies actively use influence tactics to get
their own way for personal gain. In other workplaces. employees
who engage in organizational politics are q uickly reminded to avoid
these tactics. or are eventually asked to work somewhere e lse.
StudenL~ can usually sense the level of organizational politics at the
college where they are taking courses. This tool assesses the level
of organizational politics at your school.
One of the best-known individual differences in organizational
politics is Machiavellianism. named after the 16th-century Italian
philosophe r who wrote a famous treatise about political behaviour
(The Prince). Machiavellian employees take a perspective of
situations and other people that motiv-.ues them to apply influence
tactics more for personal gain. Although few people want to be
viewed as Machiavellian. measures s uggest that most of us a pply
these tactics to some extent This self-assessment measures how
much you value the politica1 tactics emphasized by Machiavelli.

CHAPTER 11
Conflict and Negotiation
in the Workplace
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
LO 1 Define conflict and debate its positive and negative consequences in the workplace.
L02 Distinguish task from relationship conflict and describe three strategies to minimize relationship
conflict during task conflict episodes.
L03 Diagram the conflict process model and describe six structural sources of conflict in organizations.
L04 Outl ine the five confl ict handling styles and discuss the circumstances in which each would be most
appropriate.
LOS Apply the six st ructural approaches to conflict management and describe the three types of
third-party dispute resolution.
LOG Describe distributive and integrative negotiations and outline strategies skilled negotiators use to
cla im value and create value.
Google uses th1rd part1es to help resolve online disputes.
C MONKEY BUSINESS • LBR/&ge fo tostock
305

306 Part Three Team Processes
eBay is one of the world’s best known auction sites, connecting buyers and sellers located all
over the world. In most cases. the transactions proceed without a problem. Occasionally, however,
disputes arise and create conflict between the two involved parties. In order to increase perceptions
of trust among consumers. eBay has created a wide range of dispute-resolution options available
to parties who experience problems and have their claims for restitution rejected.
One option is for parties to rely on a dispute-resolution provider known as SquareTrade.
Square Trade usually follows a two-stage process. beginning with a web-based negotiation between
the parties and ending with a human mediator if the negotiation process fails. The conversation
between the parties and the mediator is facilitated by the mediator using a web interface. This
allows parties to participate at different times.
Using a web-based method appears to be more effective than trad itional methods using free-
text complaining and demanding. Why? SquareTrade’s portal provides more structure, relying on
forms that clarify and highlight areas of disagreement and possible solutions. Keeping the parties
focused on solutions appears to reduce the amount of negative communication. reducing anger
and hostility between the parties. 1
The opening story about eBay illustrates that having systems in place to deal proactively with conflict is an effective business strategy. This chapter investigates the dynamics of conflict in organizational
settings. It begins by defining conflict and discussing the age-old question: Is conflict good or bad?
Next, we look at the conflict process and examine in detail the main factors that cause or ampl ify
conflict. The five styles of handling confl ict are then described, including important contingencies of
conflict handling as well as gender and cross-cultural differences. Next, we look at the role of managers
and others in third-party conflict resolution. The final section of this chapter reviews key issues in
negotiating conflict resolution.
The Meaning and Consequences of Conflict
One of the fact~ of life is that organizations are continuously adapting to their external envi-
ronment and introducing better ways to transform resources into outputs (see Chapter 1 ).
There is no clear road map on how companies should change, and employees and other
stakeholders rarely agree completely on the direction or form of these adjustments. Employees have dif-
ferent personal and work goals, which lead them to prefer different directions for the organization to take.
These differences in goals and viewpoints, along with a few other key factors described in this
chapter, lead to conflict. Conflict is a process in which one party perceives that its interests are being
opposed or negatively affected by another party.2 It may occur when one party obstructs another’s
goals in some way, or just from one party ‘s perception that the other party is going to do so. Confl ict
is ultimately based on perceptions; it exists whenever one party believes that another might obstruct its
efforts, whether or not the other party actually intends to do so.
IS CONFLICT GOOD OR BAD?
One of the oldest debates in organizational behaviour is whether conflict is good or bad-or, more
recently, what forms of conflict are good or bad-for organizations.3 The dominant view over most of
this time has been that conflict is dysfunctional.4 At the turn of the 20th century, European administra-
tive theorists Henri Fayol and Max Weber emphasized that organizations work best through harmoni-
ous relations. Elton Mayo, who founded Harvard University’s human relations school and is considered
one of the founders of organizational behaviour, was convinced that employee-management confl ict
undermines organizational effectiveness. These and other critics warn that even moderately low levels
of disagreement tatter the fabric of workplace relations and sap energy away from productive activi-
ties. Disagreement with one’s supervisor, for example, wastes productive time, violates the hierarchy
of command, and questions the efficient assignment of authority (where managers make the decis ions
and employees follow them).

Chapter Eleven Conflict and Negotiation in the Workplace 307
EXHIBIT 11.1: Consequences of Workplace Conflict
NeplheCa IIPI n 1 …._CD Ill I n 1
Uses otherwise productive time Better decision making:
less information sharing o test’i logic of argument’i
Higher stress. dissatisfaction. and turnover o questions assumptions
Increases organizational politics More responsive to changing environment
\Vaste.’i resources Stronger team cohesion (conflict between the team and
\Veakens team cohesion {conflict among team members) out’iide opponents)
Al though the “conflict-is-bad” perspective is now considered too simplisti c, workplace conflict can
indeed have negative consequences under some circumstances (see Exhibit 11.1 ).5 Conflict has been criti-
cized for consuming otherwise productive time. For instance, almost one-third of the 5000 employees
recently surveyed across nine countries reported that they are frequently or always dealing with workplace
conflict. More than half of the employees in Germany complained that cont1ict was consuming their
workday6 According to a Conference Board of Canada report, “unmanaged or unresolved cont1ict con-
tributes to employee absenteeism that cost the Canadian economy an estimated $ 16. 1 billion in 20 12.”7
Conflict can undermine job performance in other ways.8 Conflict i s often stressful , which consumes
personal energy and distracts employees from their work. Conflict discourages people engaged in the dis-
pute from sharing resources and coordinating with each other. It can reduce job satisfaction, resul ting
in higher turnover and lower customer service. Conflict fuels organizational poli tics, such as motivating
employees to find ways to undermine the credibi li ty of their opponents. Decision making suffers
because people are Jess motivated to communicate valuable information. Ironically, wi th Jess com-
munication, the feuding parties are more likely to escalate their disagreement because each side rel ies
increasingly on distorted perceptions and stereotypes of the other party. Final ly, cont1ict among team
members may undermine team cohesion and performance. As Connection I I I describes, airlines and
customers alike suffer when t1ight crew members don’ t get along.
~ “‘l Global Connections 11.1:
HIGH COST OF ON-BOARD CONFLICTS
Airline customers suffer enough when experiencing or observing on-board conflicts with
other passengers, but these are usually minor inconveniences compared to situations when
flight crew members can’t get along with each other. Consider the following events.
An American Airlines flight returned to the gate almost as soon as it began to taxi toward
its takeoff runway because, in the airline’s words, “there was a disagreement between two
flight attendants.” One flight attendant was using her cell phone during pre-departure prepa-
rations for the New York-to-Washington commuter flight. Her activities apparently prompted
her colleague to announce over the intercom that everyone needed to turn off their phones
and electronic devices, “including the other flight attendant.” That comment led to a scuffle
between the two crew members, which was serious enough that the pilots decided to cancel
the flight. Passengers had to wait four hours for a new crew to arrive.
Exactly one week later, a United Airlines flight bound for Chicago returned to Raleigh-
Durham International Airport in North Carolina shortly after takeoff because of confl ict
between two flight attendants. The cause of the tiff seemed almost trivial. “One flight atten-
dant had crossed their leg and accidentally brushed the other person,” explained a
(continued)

308 Part Three Team Processes
(continued)
spokesperson at the airport after the flight had returned. Although apparently unintentional,
the other flight attendant interpreted the incident as a provocation because relations
between the two were already fragile. “It appears there was a disagreement before that that
became elevated,” the spokesperson said. Passengers had to wait three hours for an alter-
native flight and United Airlines faced the costs of an abandoned flight, compensation for
travellers with missed connections, possible overtime for the replacement crew, and loss of
customer service reputation.
Conflict among airline crew members can be costly for airlines and ruin their customer service
reputation.
©lzabela Habur/E+/Getty Images
Pilots probably also have disagreements, but few are noticed and fewer still lead to flight
delays. Cockpit conflict, however, may have indirectly contributed to the cancellation of a Qan-
tas flight from Dallas to Sydney, Australia. The flight operations managers reportedly decided
to cancel the flight because thunderstorms had delayed the departure and the pilots were
already close to exceeding their maximum work hours. However, the captain and second officer
were later suspended when the managers learned the pilots had an argument regarding take-
off calculations to enter into the computer system while preparing for departure. The airline had
to fly in replacement pilots, resulting in an 18-hour delay.9
Benefits of Conflict In the 1920s, when most organizational scholars viewed conflict as inher-
ently dysfunctional, educational philosopher and psychologist John Dewey praised its benefits : “Con-
fl ict is the gadfly of thought. It stirs us to observation and memory. It instigates to invention. It shocks
us out of sheep-l ike passivity, and sets us at noting and contriving.” 10 Three years later, pol itical sci-
ence and management theorist Mary Parker Follett s imilarly remarked that the “friction” of conflict
should be put to use rather than treated as an unwanted consequence of differences.11

Chapter Eleven Conflict and Negotiation in the Workplace 30 9
But it wasn’ t until the 1970s that conflict management experts began to embrace the “optimal con-
flict” perspective.12 According to this view, organizations are most effective when employees expe-
rience some level of conflict, but become less effective with high levels of conflict. 13 What are the
benefits of confl ict? As Dewey stated, confl ict energizes people to debate issues and evaluate alter-
natives more thoroughly. They probe and test each other’s way of thinking to better understand the
underlying issues that need to be addressed. This discussion and debate tests the logic of arguments
and encourages participants to re-examine their basic assumptions about the problem and its possible
solutions. It prevents individuals and teams from making inferior decisions and potentially helps them
to develop more sound and creative solutions.14
A second potential benefit is that moderate levels of confl ict prevent an organization from becoming
nonresponsive to its external environment. As mentioned, differences of opinion encourage employees
to engage in active thinking, and this often involves ongoing questioning and vigi lance about how the
organization can be more closely aligned with its customers, suppliers, and other stakeholders.15 A third
benefit of conflict occurs when team members have a dispute or competition with external sources.
This form of conflict represents an external chal lenge which, as was noted in Chapter 8, potentially
increases cohesion within the team. People are more motivated to work together when faced with an
external threat, such as conflict with people outside the team.
The Emerging V iew: Task and Relationship Conflict
Although many writers sti ll refer to the “optimal conflict” perspective, an emerging
school of thought is that there are two types of confl ict with opposing consequences:
ta~k confl ict and relationship conflict.16 Task conflict (also called constructive conflict)
occurs when people focus their discussion around the issue (i.e., the “task”) while showing respect for
people with other points of view. This type of confl ict debates the merits and limitations of different
positions so ideas and recommendations can be clarified, redesigned, and tested for logical soundness.
By keeping the debate focused on the issue, participants calmly re-examine their assumptions and
beliefs without having hostile emotions triggered by their drive to defend their self-concept. A subset
of task confl ict is process conflict, which entails disagreement about how tasks should be performed
and who should perform the various roles and duties. Research indicates that task conflict tends to
produce the beneficial outcomes that we described earlier, particularly better decision making.17 At the
same time, there is likely an upper limit to the intensity of any disagreement, above which it would be
difficult to remain constructive.
In contrast to ta~k conflict, relationship conflict focuses on interpersonal differences between or among
the adversaries. The parties refer to “personality clashes” and other interpersonal incompatibilities rather
than to legitimate differences of opinion regarding tasks or decisions. Relationship conflict involves one
party questioning or critiquing personal characteristics of the other person. As such, it attempts (or is per-
ceived to attempt) to undermine another person’s competence. These personal attacks threaten self-esteem
and oppose self-enhancement and self-verification processes (see Chapter 3). Consequently, they usu-
ally trigger defence mechanisms and a competitive orientation between the parties. Relationship conflict
also reduces mutual trust because it emphasizes interpersonal differences that shred identification with
the other person.18 Relationship conflict escalates more easily than task conflict because the adversaries
become less motivated to communicate and share information, making it more difficult for them to dis-
cover common ground and ultimately resolve the conflict. Instead, they rely more on distorted perceptions
and stereotypes which, a~ we noted earlier, tends to further intensify the conflict.
Separating Task from Relationship Conflict If there are two types of conflict, then the
obvious advice is to encourage task conflict and minimize relationship confl ict. This recommendation
sounds good in theory, but separating these two types of conflict isn’t easy. Research indicates that we

3 10 Part Three Team Processes
Team decision making at Amazon.com is not a casual social gathering. “There’s an incredible
amount of challenging the other person … You want to have absolute certainty about what you are
saying,” admits a former senior market researcher at the online retailer. In fact, one of Amazon’s
principles states that leaders should “respectfully challenge decisions when they disagree, even
when doing so is uncomfortable or exhausting.” Amazon executive Tony Galbato explains that
“it would certain ly be much easier and socially cohesive to just compromise and not debate, but
that may lead to the wrong decision.” Some observers and employees say that Amazon’s decision
making approach fuels relationship conflict, not just task conflict. Others counter that relationship
conflict is discouraged, pointing out that “respectfully challenge• means focusing on the problem,
not the person. “We debate politely and respectfully, and you are given constructive feedback to
course-correct if you are rude or disrespectful,” says a middle management engineer.19
© Caiaimage/Giow Images
experience some degree of relationship confl ict whenever we are engaged in constructive debate.20 No
matter how diplomatically someone questions our ideas and actions, they potentially trigger our drive to
defend our ideas, our sense of competence, and our public image. The stronger the level of debate and
the more the issue is tied to our self-concept, the higher the chance that the task confl ict will evolve
into (or mix with) relationship confl ict.
Fortunately, three factors or conditions, and their concomitant strategies, potentially minimize the
level of relationship confl ict that occurs during task conflict episodes.21
Emotional intelligence and emotional stability. Relationship conflict is less likely to occur, or
is less likely to escalate, when team members have high levels of emotional intelligence and its
associated personality characteristic: emotional stability.22 Employees with higher emotional
intelligence and stability are better able to regulate their emotions during debate, which reduces
the risk of escalating perceptions of interpersonal hostility. They are also more likely to view a
co-worker’s emotional reaction as valuable information about that person’s needs and expecta-
tions, rather than as a personal attack.
Jeff Weiner, CEO of Linkedln, has written that one of the most important leadership qual ities,
one that is “invaluable when it comes to relating to others, particularly in tense work situations”

Chapter Eleven Conflict and Negotiation in t he Workplace 311
is compassion and the capacity to “see things clearly through another person’s perspective.”
Weiner believes that most people have a tendency to see things solely through their own world
view. He suggests that when faced with a disagreement in the workplace, it is helpful to stop
and consider “why the other person has reached the conclusion that they have. For instance,
what in their background has Jed them to take that position? Do they have the appropriate expe-
rience to be making optimal decisions? Are they fearful of a particular outcome that may not
be obvious at surface level?” Weiner recommends that, in addition to personally reflecting on
these matters, asking these questions of the other person can transform a challenging situation
into a “truly collaborative experience.’m
Cohesive team. Relationship confl ict is suppressed whe n the confl ict occurs within a highly
cohesive team. The lo nger people work together, get to know each other, and develop
mutual trust, the more latitude they give to each other to show emotions without being
personally offended. This might explain why task confl ict is more effective in top manage-
ment teams than in teams of more j unior staff.24 Strong cohesion also allows each person to
know about and anticipate the behav iours and emotions of their teammates. Another benefit
is that cohesio n produces a stronger social identity with the group, so team members are
motivated to avoid escalating relat ionship conflict during otherwise emotionally turbulent
discussions.
Supportive team norms. Various team norms can hold relationship conflict at bay during ta~k-focused
debate. When team norms encourage openness, for instance, team members Jearn to appreciate
honest dialogue without personally reacting to any emotional display during disagreement~.25 Other
norms might discourage team members from displaying negative emotions toward co-workers. Team
norms also encourage tactics that diffuse relationship conflict when it first appears. For instance,
research has found that some teams with low relationship conflict use humour to maintain positive
group emotions which off.~et negative feelings team members might develop toward some co-
workers during debate.
Conflict Process Model
Now that we have outlined the history and current knowledge about conflict and
its outcomes, Jet’s look at the model of the confl ict process, shown in Exhibit
I 1.2. This model begins with the sources of conflict, which we will describe in
EXHIBIT 11.2 Model of the Conflict Process
Sources of
Conflict
Incompatible goals
Differentiation
Interdependence -+
Scarce resources
Ambiguous rules
Poor
communication
escalation
Conflict
Outcomes
Positive
• Better decisions
• Responsive organization
• T earn cohesion
Negative
• Stressllow morale
• Turnover
• Politics
• Lower performance
• Distorted information

312 Part Three Team Processes
the next section. At some point, the sources of conflict lead one or both parties to perceive that
confl ict exists. They become aware that one party’s statements and actions are incompatible with
their own goals. These perceptions usually interact with emotions experienced about the con-
fl ict.26 Conflict perceptions and emotions manifest themselves in actual confl ict-the dec is ions
and behaviours of one party toward the other. These conflict episodes may range from subtle non-
verbal behaviours to heated aggression. Particularly when experiencing high levels of conflict-
generated emotions, people have difficulty finding the words and expressions to communicate
effectively without further irritating the relationship27 Conflic t is also manifested by the style
each s ide uses to resolve it. Some people tend to avoid the conflict whereas others try to dominate
those wi th opposing views.
Exhibit I I .2 shows arrows looping back from manifest conflict to confl ict perceptions and emo-
tions. These arrows illustrate that the conflict process is really a series of episodes that potential ly
cycle into conflict escalation28 It doesn’ t take much to start this confl ict cycle-just an inappropriate
comment, a misunderstanding, or action that lacks diplomacy. These behaviours cause the other party
to perceive that conflict exists. Even if the first party did not intend to demonstrate conflict, the second
party’s response may create that perception.
Structura l Sources of Conflict in Organizations
The conflict model start~ with the sources of confl ict, so we need to understand these sources to effec-
tively diagnose conflict episodes and subsequently resolve the confl ict or occasional ly to generate
conflict where it is lacking. The six main conditions that cause conflict in organizational settings are
incompatible goals, differentiation, interdependence, scarce resources, ambiguous rules, and commu-
nication problems .
• by the NUMBERS
Do lntergenerational Differences Increase or Decrease
Prod uctivity?29
Thailand
United States
Hungary
GLOBAL
New Zealand
Canada
Malaysia
India
Germany
-50% -40%
lntergenerational differences
make the workplace less
productive
lntergenerational differences
make the workplace more
productive

Chapter Eleven Conflict and Negotiation in the Workplace 3 13
INCOMPATIBLE GOALS
Goal incompatibility occurs when the goals of one person or department seem to interfere with
another person’s or department’s objectives.3° For example, the production department strives for
cost efficiency by scheduling long production runs whereas the sales team emphasizes customer
serv ice by delivering the cl ient’s product as quickly as possible. If the company runs out of a par-
ticular product, the production team would prefer to have clients wait until the next production run.
This infuriates sales representatives who would rather change production quickly to satisfy customer
demand.
Whi le the above example reflects a situation of competing priorities, conflicts can also manifest due
to differences about how to achieve a goal. Two people or departments may agree on a common goal
(e.g., serving customers better), but have different bel iefs about how to attain that goal (e.g., standard-
izing employee behaviour versus giving employees autonomy in customer interactions). Although the
dispute relates to a goal, the actual root of the conflict is different viewpoints, known as “differentia-
tion,” which is discussed next.
DIFFERENTIATION
Differentiation can be a significant source of conflict because it usual ly represents differences among
people and work units regarding their training, values, beliefs, and experiences. Intergenerational con-
flicts occur because younger and older employees have different needs, different expectations, and
different workplace practices, which sometimes produce conflicting preferences and actions. Recent
studies suggest that these intergenerational differences occur because people develop social identities
around technological developments and other pivotal social events that are unique to their era3 1
Differentiation also produces the classic tension between employees from two companies brought
together through a merger.32 Even when people from both companies want the integrated organization to
succeed, they may fight over the “right way” to do things because of their unique experiences and the distinct
corporate culntres in the separate companies. This form of conflict emerged when CenturyLink acquired
Qwest, creating the third largest telecommunications company in the United States. The two companies were
headquartered in different parts of the country. ‘Their languages were different, their food was different,
answers were different. We talked fa~t and interrupted, and they talked slow and were polite,” recalls a senior
Qwest executive. “If we said up, they said down. If we said yes, they said no. If we said go, they said stop.”
The result wa~ “unnecessary misunderstandings” as executives tried to integrate the two companies33
Some predicted this form of culture clash when Bank of Nova Scotia (Scotiabank), a 180-year-old
Canadian financial institution, acquired ING Direct, a 17-year-old digital-only bank.34 The two banks
were entirely different: Scotiabank was an established “pillar of Canada’s banking establ ishment” and
ING was known for its “scrappy upstart” image. ING employees identified strongly with their bank’s
quirky persona as a “virtual anti-bank.”35 A condition of Scotiabank’s to the purchase was that ING
had to change its name, which led to wholesale rebranding.36 Although ING is now called Tangerine,
former ING CEO Peter Aceto describes Scotiabank as having been committed to keeping the banks’
separate identities and preserving ING’s distinctive culture. Consequently, in this example, differentia-
tion wa~ a key element of the success of both institutions.
Differentiation conflict can also manifest due to incongruent values. Take, for example, the dilemma
that the City of Saskatoon struggled with when its tax a~sessment staff attended at certain properties to
conduct visual evaluations. On occasion, city staff had to enter rel igious buildings for the purposes of
tax a~sessment and a particular religion’s tenets required everyone to remove footwear prior to entering
the building. City staff were caught in a bind because, according to the city’s health and safety regula-
tions, staff were required to wear steel-toed boots when conducting their assessment. The conflict clearly
arose from competing values: the right to health and safety versus the right to religion. Jodi Fick-Dryka,
diversity coordinator for the City of Saskatoon, explains that “a mutually agreeable solution to wear

314 Part Three Team Processes
disposable boot covers” resolved the dispute37 Differentiation due to competing values can often result
in extremely difficult conflict because the roots of the dispute arise out of deeply held personal views.
INTERDEPENDENCE
Confl ict tends to increase with the level of task interdependence. Task interdependence refers to the
extent to which employees must share materials, information, or expertise to perform their jobs (see
Chapter 8). This interdependence includes sharing common resources, exchanging work or clients back
and forth, and receiving outcomes (such as rewards) that are partly determined by the performance of
others38 Higher interdependence increa~es the risk of conflict because there is a greater chance that
each side will disrupt or interfere with the other side’s goals.39
Other than complete independence, employees tend to have the lowest risk of conflict when work-
ing with others in a pooled interdependence relationship. Pooled interdependence occurs where indi-
viduals operate independently except for rel iance on a common resource or authority. The potential
for confl ict is higher in sequential interdependence work relationships, such as an assembly line. The
highest risk of confl ict tends to occur in reciprocal interdependence situations. With reciprocal inter-
dependence, employees have high mutual dependence on each other and, consequently, have a higher
probabi lity of interfering with each other’s work and personal goals.
SCARCE RESOURCES
Resource scarcity generates confl ict because each person or unit requiring the same resource necessar-
ily undermines others who also need that resource to fulfil their goals. Most labour strikes, for instance,
occur because there aren’t enough financial and other resources for employees and company owners
to each receive the outcomes they seek, such as higher pay (employees) and higher investment returns
(shareholders). Budget deliberations within organizations also produce conflict because there aren’t
enough funds to satisfy the goals of each work unit. The more resources one group receives, the fewer
resources another stakeholder wi ll receive. Fortunately, these interests aren’t perfectly opposing in
complex negotiations, but limited resources are typically a major source of friction.
AMBIGUOUS RULES
Ambiguous–or nonexistent-rules breed conflict. This occurs because uncertainty increases the risk
that one party intends to interfere with the other party’s goals. Ambiguity also encourages political
tactics and, in some cases, employees enter a free-for-all battle to win decisions in their favour. This
explains why conflict is more common during mergers and acquisitions. Employees from both compa-
nies have conflicting practices and values, and few rules have developed to minimize the manoeuvring
for power and resources.40 When clear rules exist, on the other hand, employees know what to expect
from each other and have agreed to abide by those rules.
COMMUNICATION PROBLEMS
Confl ict often occurs due to the Jack of opportunity, ability, or motivation to communicate effectively.
Let’s look at each of these causes. First, when two parties Jack the opportunity to communicate, each
tends to rely more on stereotypes to understand the other party in the confl ict. Unfortunately, stereo-
types are sufficiently subjective that emotions can negatively distort the meaning of an opponent’s
actions, thereby escalating perceptions of confl ict. Second, some people Jack the necessary skills to
communicate in a diplomatic, nonconfrontational manner. When one party communicates its disagree-
ment arrogantly, opponents are more likely to heighten their perception of the conflict. This may lead
the other party to reciprocate with a similar response, which further escalates the confl ict.41
A third problem is that relationship conflict is uncomfortable, so people are Jess motivated to com-
municate with others in a disagreement. Unfortunately, Jess communication can further escalate the
conflict because each side has Jess accurate information about the other side’s intentions. To fill in the
missing pieces, they rely on distorted images and stereotypes of the other party. Perceptions are further
distorted because people in conflict situations tend to engage in more differentiation with those who

Chapter Eleven Conflict and Negotiation in the Workplace 3 15
are different from them (see Chapter 3). This differentiation creates a more positive self-concept and a
more negative image of the opponent. We begin to see competitors less favourably so our self-concept
remains positive during these uncertain times.42
Interpersonal Conflict Handl ing Styles
L04 The six structural conditions described in the previous section lead to conflict percep-
tions and emotions which, in turn, motivate people to take some sort of action to address
the conflict. Along with her pioneering view that some conflict is beneficial, Mary
Parker Follett suggested there are different conflict handling styles. Confl ict management experts
subsequently expanded and refined this taxonomy of conflict handling styles, with most of them adapting
variations of the five-category model shown in Exhibit 11.3 and described below. This model recog-
nizes that how people approach a conflict situation depends on the relative importance they place on
maximizing outcomes for themselves and maximizing outcomes for the other party.43
Problem solving. Problem solving tries to find a solution that is beneficial for both parties.
This is known as the win-win orientation because people using this style bel ieve the resources
at stake are expandable rather than fixed if the parties work together to find a creative solution.
Information sharing is an important feantre of this style because both parties collaborate to
identify common ground and potential solutions that satisfy everyone involved.
What is your preferred conflict handling style? You can d iscover your preferred way
of handling conflict by locating this self-assessment in Connect.
EXHIBIT 11.3 Interpersonal Conflict Handling Styles 44
Asse rtiveness
(motivation to
satisfy one’s
own interests)
High
Low
Forcing
Avoiding
Low
Compromising
Cooperativeness
(motivation to satisfy
other party’s interests)
Proble m solving
Yielding
High

316 Part Three Team Processes
Forcing. Forcing tries to win the conflict at the other’s expense. People who use this style typically
have a win- lose orientation-they believe the parties are drawing from a fixed pie, so the more one
party receives, the Jess the other party will receive. Consequently, this style relies on some of the
“hard” influence tactics described in Chapter 10, particularly assertiveness, to get one’s own way.
Avoiding. Avoiding tries to smooth over or evade conflict situations altogether. A common
avoidance strategy is to minimize interaction with certain co-workers. For instance, 67 percent
of employees in one large global survey said they go out of their way to avoid seeing co-workers
with whom they have a disagreement. A smaller number (14 percent) have missed a day of
work to avoid workplace conflict.45 A second avoidance strategy is to steer clear of the sensitive
topic when interacting with the other person in the conflict. These examples indicate that avoid-
ance does not necessarily mean that we have a low concern for both one’s own and the other
party’s interest. Instead, we might be very concerned about the issue but believe that avoidance
is the best solution, at least for the short term.46
Yielding. Yielding involves giving in completely to the other side’s wishes, or at least cooperating
with little or no attention to your own interests. This style involves making unilateral concessions
and unconditional promises, as well as offering help with no expectation of reciprocal help.
Compromising. Compromising involves looking for a position in which your losses are offset by
equally valued gains. It involves matching the other party’s concessions, making conditional prom-
ises or threats, and actively searching for a middle ground between the interest~ of the two parties.
CHOOSING THE BEST CONFLICT HANDLING STYLE
Chances are that you have a preferred conflict handling style. You might typically engage in avoiding
or yielding because disagreement makes you feel uncomfortable and is contrary to your self-view a~
someone who likes to get along with everyone. Or perhaps you prefer the compromising and forcing
EXHIBIT 11.4 Conflict Handling Style Contingencies and Problems
~
~ …….. SIJie l’lllenedSIJieW… ~ ………. SIJie
Problem solving Interest’ are not perfectly opposing Involves sharing information that
(i.e., not pure win- lose) the other party might use to their
Parties have ttust. openness. and time to share advantage
information
The issues are complex
Forcing You have a deep conviction about your posi· Highest risk of relationshi p conflict
tion {e.g., believe other person’s behaviour is May damage long· term relations.
unethical) reducing future problem solving
Dispute requires a quick solution success
The other party would take advantage of more
cooperative strategies
Avoiding Conflict has become too emotionally charged Doesn’t usuaJly resolve the conflict
Cost of trying to resolve the conflict May increa…;e other party’s
outweighs the benefits frustr.ttion
Yielding Other party ha.’ substantially more power Increases other party’s expectations
Issue is much Jess important to you than to in future conflict episodes
the other party
The value and logic of your position isn’t as
clear as the other party•s
Compromising Parties have equal power Sub·optimal solution where mutual
Time pressure to resolve the conflict gains are possible
Parties Jack trust/openness for problem solving

Chapter Eleven Conflict and Negotiation in the Workplace 3 17
strategies because they reflect your strong need for achievement and to control your environment. Peo-
ple usually gravitate toward one or two confl ict handling styles that match their personality, personal
and cultural values, and past experience.47 However, the best style depends on the situation, so we need
to understand and develop the capacity to use each style when it’s called for.48
Exhibit 11.4 summarizes the main contingencies and problems associated with using each confl ict
handling style. Problem solving has long been identified a~ the preferred conflict handling style wher-
ever possible because dialogue and clever thinking help people to break out of the limited boundaries of
their opposing alternatives to find an integrated solution where both parties gain value. In addition, the
problem solving style tends to improve long-term relationships, reduce stress, and minimize emotional
defensiveness and other indications of relationship conflict.49
However, problem solving a~sumes there are opportunities for mutual gains, such as when the cont1ict
is complex with multiple elements. If the conflict is simple and perfectly opposing (each party wants
more of a single fixed pie), then this style will waste time and increase frustration. The problem solving
approach also takes more time and requires a fairly high degree of trust, because there is a risk that
the other party will take advantage of the information you have openly shared. As one study recently
found, the problem solving style is more stressful when people experience strong feel ings of confl ict,
likely because these negative emotions undermine trust in the other party.50
The conflict avoidance style is often ineffective because it doesn’t resolve the conflict and may
increase the other party’s frustration. However, avoiding may be the best strategy where conflict has
become emotionally charged or where conflict resolution would cost more than the benefits it would
provide. 51 The forcing style is usually inappropriate because it commonly generates relationship con-
flict more quickly or intensely than other conflict handling styles. However, forcing may be necessary
where you know you are correct (e.g., the other party ‘s position is unethical or based on obviously
flawed logic), the dispute requires a quick solution, or the other party would take advantage of a more
cooperative conflict handling style.
The yielding style may be appropriate when the other party has substantially more power, the issue
is not as important to you as to the other party, and you aren’t confident that your position ha~ the best
value or logical consistency. 52 On the other hand, yielding behaviours may give the other side unreal-
istical ly high expectations, thereby motivating them to seek more from you in the future. In the long
run, yielding may produce more conflict than resolution. “Raised voices, red faces, and table thump-
ing is a far less dysfunctional way of challenging each other than withdrawal, passivity, and sullen
acceptance,” argues one conflict management consultant. “It doesn’t mean that people agree with you:
they just take their misgivings underground and spread them throughout the organization, which ha~ a
corrosive effect.”53
The compromising style may be best when there is little hope for mutual gain through problem
solving, both parties have equal power, and both are under time pressure to settle their differences.
However, we rarely know whether the parties have perfectly opposing interests, making compromise
more appropriate than problem solving. Therefore, entering a conflict with the compromising style
may cause the parties to overlook better solutions because they have not attempted to share enough
information and creatively look for win-win alternatives.
CULTURAL AND GENDER DIFFERENCES IN
CONFLICT HANDLING STYLES
Cultural differences are more than just a source of conflict. They also influence the preferred confl ict
handling style. 54 Some research suggests that people from collectivist cultures-where group goals are
valued more than individual goals-are motivated to maintain harmonious relations and, consequently,
are more likely than those from low collectivism cultures to manage disagreements through avoid-
ance or problem solving. However, this view may be somewhat simplistic. Collectivism motivates
harmony within the group but not necessarily with people outside the group. Indeed, research indicates
that managers in some collectivist cultures are more likely to publicly shame those whose actions
oppose their own. 55 Cultural values and norms influence the conflict handling style used most often

3 18 Part Three Team Processes
in a society, but they also represent an important contingency when outsiders choose the preferred
conflict handling approach. For example, people who frequently use the confl ict avoidance style might
have more problems in cultures where the forcing style is common.
According to some scholars, men and women tend to rely on different conflict handling styles.56
They suggest that, compared to men, women pay more attention to the relationship between the parties.
Consequently, women tend to adopt a compromising or problem solving style in business settings and
are more willing to compromise to protect the relationship. Compared to men, they are also slightly
more likely to use the avoiding style. Men tend to be more competitive and take a short-term orienta-
tion to the relationship. In low collectivism cultures, men are more likely than women to use the forc-
ing approach to confl ict handl ing. We must be cautious about these observations, however, because
differences between men and women on preferred conflict handling styles are fairly small.
Structura l Approaches to Conflict Management
LOS Confl ict handling styles describe how we approach the other party in a conflict situa-
tion. But confl ict management also involves altering the underlying structural causes of
potential conflict. The main structural approaches are emphasizing superordinate goals,
reducing differentiation, improving communication and mun1al understanding, reducing interdepen-
dence, increasing resources, and clarifying rules and procedures.
EMPHASIZING SUPERORDINATE GOALS
One of the oldest recommendations for resolving conflict is to refocus the parties’ attention around
superordinate goals and away from the conflicting subordinate goals. 57 Superor dina te goals are
goals that the conflicting employees or departments value and whose attainment requires the
joint resources and effort of those parties. 58 These goals are called superordinate because they
are highe r-order aspirations, such as the organization’ s strategic objec tives, rather than objec-
ti ves specific to the individual or work unit. Research indicates that the most effective executive
teams frame the ir dec is ions as superordinate goals that rise above each executive’s departmental
or d iv isional goals. Similarly, one recent study reported that leaders reduce confl ict through an
inspirational vision that unifies employees and makes them less preoccupied with their subord i-
nate goal differences. 59
Suppose that marketing staff want a new product released quickly, whereas engineers want more
time to test and add new features. Leaders can potentially reduce this interdepartmental confl ict by
reminding both groups of the company’s mission to serve customers, or by pointing out that com-
petitors currently threaten the company’s leadership in the industry. By increasing commitment to
corporate-wide goals (customer focus, competitiveness}, engineering and marketing employees pay
less attention to their competing departmental-level goals, which reduces their perceived confl ict with
co-workers. Superordinate goals also potentially reduce the problem of differentiation because they
establish feelings of a shared social identity (work for the same company).60
REDUCING DIFFERENTIATION
Another way to minimize dysfunctional confl ict is to reduce the differences that generate conflict. As
people develop common experiences and beliefs, they become more motivated to coordinate activities
and resolve their disputes through constructive discussion.61
One company that real izes this is L’Oreal Canada. Their workforce is diverse: I ,200 employees rep-
resent 61 nationalities; 42 percent of employees are women; and employees are spread across the three
main generations-baby boomers (25 percent), Generation X (33 percent}, and Generation Y (42 percent).
These different forms of diversity have been immensely beneficial to the company. “From diversity
stems stimulating, rich debates that propel our teams to think forward and encourage innovation,” says
Marie-Josee Lamothe, L’Oreal Canada’s chief marketing officer and chief communications officer.

Chapter Eleven Conflict and Negotiation in the Workplace
l’Oreal Canada employees (from left) Ashley Bancroft. Christian Bouchard, and Wendy Stewart say the
company’s Valorizing lntergenerational Differences training has helped them to leverage the company’s
creative potential by minimizing dysfunctional conflict and improving relations with co-workers.
©Post Media
3 19
But rich debates can easily deteriorate into dysfunctional battles when participants fai l to keep
their differences in perspective. L’Oreal Canada’s executives anticipated this risk several years ago
as its workforce demography began shifting to a balance across the three generations. The generations
differed in their needs and expectations, which company leaders understood might lead to dysfunctional
intergenerational confl ict. “We realized we could be faced with an interesting problem,” recalls Marjo-
laine Rom pre, L’ Oreal Canada’s director of learning and development. “We called it Generation Shock.”
Rather than have that generation shock turn into dysfunctional conflict, L’Oreal Canada introduced
a full-day seminar, called Valorizing Intergenerational Differences, which aims to help employees
across all generations understand and value each other’s perceptions, values, and expectations. In one
part of the program, for example, employees sit together in their generational cohorts and a~k questions
to employees in the other cohorts. “Each group is interested and surprised to see what’s important to
the other group,” says Rompre.
Participants say the program leverages the company’s creative potential by minimizing dysfunc-
tional confl ict and improving relations with co-workers. “The Valorizing Intergenerational Differences
training really helped me to understand where people from each generation are coming from,” says
key account manager Ashley Bancroft, shown left in the photo below with national accounts directors
Christian Bouchard and Wendy Stewart. It has also helped L’Oreal Canada to become one of the best
places to work in Canada, including one of the country’s best diversity employers.62
IMPROVING COMMUNICATION AND MUTUAL UNDERSTANDING
A third way to resolve dysfunctional conflict is to give the conflicting parties more opportunities to com-
municate and understand each other. This recommendation applies two principles and practices intro-
duced in Chapter 3: the Johari Window model and meaningful interaction. Although both were previously
described as ways to improve self-awareness, they are equally valuable to improve other-awareness.

320 Part Three Team Processes
In the Johari Window process, individuals disclose more about themselves so others have a better
understanding of the underlying causes of their behaviour. L’Oreal Canada’s intergenerational seminar
appl ied a variation of the Johari Window. The cosmetic company’s program includes an activity in
which each generational cohort answers questions from the other cohorts about what is important to
them (such as security, performance, and collaboration). A variation of Johari Window also occurs in
“lunch and Jearn” sessions, where employees in one functional area describe work and its challenges to
co-workers in other areas. Houston-based Brookstone Construction introduced these information meet-
ings which helped to reduce frustrations between its field and office staff.63
Meaningful interaction potentially improves mutual understanding through the contact hypothesis,
which says that we develop a more person-specific and accurate understanding of others by interacting
with and working closely with them.64 For example, more than 18,000 employees and managers at the
various companies of System Capital Management participated in the “Let’s Make Ukraine Clean”
campaign. In addition to improving the environment-each person picked up an average of about 100
kg (200 Jbs) of garbage-this volunteering opportunity improved relations among management and
employees at the leading financial and industrial group65
Although communication and mutual understanding can work well, there are two important warn-
ings. First, these interventions should be applied only where differentiation is sufficiently low or after
differentiation ha~ been reduced. If perceived differentiation remains high, attempts to manage con-
flict through dialogue might escalate rather than reduce relationship conflict. The reason is that when
forced to interact with people who we bel ieve are quite different and in conflict with us, we tend to
select information that reinforces that view.66 The second warning is that people in collectivist and high
power distance cultures are Jess comfortable with the practice of resolving differences through direct
and open communication.67 Remember, people in collectivist cultures prefer an avoidance confl ict
handling style because it is the most consistent with harmony and face saving. Direct communication is
a high-risk strategy because it ea~ily threatens the need to save face and maintain harmony.
REDUCING INTERDEPENDENCE
Confl ict occurs where people are dependent on each other, so another way to reduce dysfunctional
conflict is to minimize the level of interdependence between the parties. Three ways to reduce inter-
dependence among employees and work units are to create buffers, use integrators, and combine j obs.
Create buffers. A buffer is any mechanism that loosens the coupling between two or more people
or work units. This decoupling reduces the potential for conflict because the buffer reduces the
effect of one party on the other. Building up inventories between people in an assembly line
would be a buffer, for example, because each employee is less dependent in the short term on
the previous person along that line.
Use integrators. Integrators are employees who coordinate the activities of work units toward the
completion of a common task. For example, an individual might be responsible for coordinating
the efforts of the research, production, advertising, and marketing departments in launching a
new product line. In some respects, integrators are human buffers; they reduce the frequency of
direct interaction among work units that have diverse goals and perspectives. Integrators rarely
have direct authority over the departments they integrate, so they must rely on referent power
and persuasion to manage conflict and accomplish the work.
Combine jobs. Combiningjobs is both a form of job enrichment and a way to reduce ta~k interde-
pendence. Consider a toa~ter assembly system where one person inserts the heating element, another
add~ the sides, and so on. By combining these tasks so that each person assembles an entire toaster,
the employees now have a pooled rather than sequential form of ta~k interdependence and the
likelihood of dysfunctional conflict is reduced.
INCREASING RESOURCES
An obvious way to reduce conflict caused by resource scarcity is to increase the amount of resources
available. Corporate decision makers might quickly dismiss this solution because of the costs involved.

Chapter Eleven Conflict and Negotiation in the Workplace
EXHIBIT 11.5 Types of Third-Party Intervention
Level of
process
control
High
low
low
Level of decision control
321
High
However, they need to carefully compare these costs with the costs of dysfunctional confl ict arising
out of resource scarcity.
CLARIFYING RULES AND PROCEDURES
Confl icts that arise from ambiguous rules can be minimized by establishing clear rules and procedures.
For example, if two departments are fighting over the use of a new laboratory, a schedule might be
establ ished which al locates the lab exclusively to each team at certain times of the day or week.
Third-Party Conflict Resolution
Most of this chapter has focused on people directly involved in a conflict, yet many disputes among
employees and departments are resolved with the assistance of a manager. Third -par ty conflict
resolution is any attempt by a relatively neutral person to help the parties resolve their differences.
There are three main third-party dispute resolution activities: arbitration, inquisition, and mediation.
These interventions can be classified by their level of control over the process and control over the
decision (see Exhibit 11.5).68
Arbitration. Arbitrators have high control over the final decision, but low control over the
process. Executives engage in this strategy by following previously agreed rules of due process,
listening to arguments from the disputing employees, and making a binding decision. Arbitration
is applied as the final stage of grievances by unionized employees in many countries, but it is
also becoming more common in nonunion confl icts.
Inquisition. Inquisitors control al l discussion about the conflict. Like arbitrators, they have high
decision control because they choose the form of conflict resolution. However, they also have
high process control because they choose which information to examine and how to examine it,
and they generally decide how the conflict resolution process will be handled.
Mediation. Mediators have high control over the intervention process. In fact, their main purpose
is to manage the process and context of interaction between the disputing parties. However, the
parties make the final decision about how to resolve their differences. Thus, mediators have little
or no control over the conflict resolution decision.69 Some mediation can involve a mediator
with expert knowledge who shares information and opinion regarding industry standards and
potential outcomes. Many organizations, such as Shell Canada, TO Canada Trust, and Royal
Bank of Canada, have internal ombudspersons to investigate and mediate employment conflicts.

322 Part Three Team Processes
Mediation-arbitration. Often referred to as “med-arb,” this is an alternate hybrid dispute
resolution process. While it promotes an opportunity for the parties to first attempt mediation
with the selected arbitrator facilitating negotiations, it also allows the arbitrator to shift into
an adjudicative mode in order to make a determination based on the parties’ arguments. The
downside of this process is that while parties control the flow of information for negotiation
purposes, deciding what they choose to reveal in mediation, parties during arbitration may feel
compelled to answer corollary questions that arise from the previously disclosed information.
A positive a~pect of med-arb is that parties enter the process with certainty that the dispute will
be resolved either as a settlement in the mediation stage or a~ part of the binding decision made
by the arbitrator. Most collective agreement contracts include a provision that labour disputes
between management and employees wi ll be subject to med-arb.
CHOOSING THE BEST THIRD-PARTY INTERVENTION STRATEGY
Team leaders, executives, and co-workers regularly intervene in workplace disputes. Sometimes they
adopt a mediator role; other times they serve as arbitrators. Occasionally, they begin with one approach
then switch to another. However, research suggests that people in positions of authority (e.g., managers)
usually adopt an inquisitional approach whereby they dominate the intervention process a~ well as
make a binding decision.70
Managers tend to rely on the inquisition approach because it is consistent with the decision-oriented
nature of managerial jobs, gives them control over the conflict process and outcome, and tends to resolve
disputes efficiently. However, inquisition is usually the Jea~t effective third-party confl ict resolution
method in organizational settings71 One problem is that leaders who take an inquisitional role tend to
collect limited information about the problem, so their imposed decision may produce an ineffective
solution to the conflict. Another problem is that employees often view inquisitional procedures and
outcomes a~ unfair because they have little control over this approach. In particular, the inquisitional
approach potentially violates several practices required to support procedural justice (see Chapter 5).
As a result of these types of concerns, organizations have begun to appreciate the need for managers to
receive negotiation and mediation training to help hone effective workplace conflict management skills.
Which third-party intervention is most appropriate in organizations? The answer partly depends on the
situation, such as the type of dispute, the relationship between the manager and employees, and cultural
values such a~ power distance.72 Also, any third-party approach has more favourable results when it applies
the procedural justice practices described in Chapter 5.73 But generally speaking, for everyday disagree-
ments between two employees, the mediation approach is usually best because it is Jess formal and gives
employees more responsibility for resolving their own disputes. Having a neutral third party helps estab-
lish an appropriate context for conflict resolution. Although not as efficient as other strategies, mediation
potentially offers the highest level of employee satisfaction with the conflict process and outcomes.14 When
employees cannot resolve their differences through mediation, arbitration seems to work best because the
predetermined rules of evidence and other processes create a higher sense of procedural fairness.75 Arbitra-
tion is also preferred where the organization’s goals should take priority over individual goals.
Resolving Conflict Through Negotiation
It is often said that people negotiate al l the time. We negotiate things like the coordination
of ta~ks on team projects, who will do the dishes, what movie we will see, and how to
resolve a disagreement following an argument. As you can see, negotiation is not an
obscure practice reserved for labour and management heads when hammering out a collective agreement.
Negotiation refers to dec is ion-making situations in which two or more interdependent parties attempt
to reach agreement. We negotiate whenever we cannot achieve our objectives single-handedly.76
Negotiation skills are essential because they help us meet our goals, reduce conflict, and bui ld collab-
orative relationships.n Before we describe the strategies and tactics used by successful negotiators, it
is necessary to understand the distinction between distributive and integrative negotiations.

Chapter Eleven Conflict and Negotiation in the Workplace 323
DISTRIBUTIVE VERSUS INTEGRATIVE NEGOTIATIONS
Negotiation situations vary according to the interdependence of people’s goals and the structure of the
situation in which they are going to negotiate. When the goals of two or more people run in completely
opposed directions, this is also known as a zero-sum or distr ibu tive situation . In distributive situations
negotiators are motivated to win the competition, beat the other party, or gain the largest piece of the
fixed resource that they can. To achieve these objectives, negotiators usually employ win-lose strate-
gies and tactics. This approach to negotiation-called distributive bargaining-accepts the fact that
there can only be one winner given the situation and pursues a course of action to be that winner. The
purpose of the negotiation is to claim value-that is, to do whatever is necessary to claim the reward,
gain the lion’s share, or acquire the largest piece possible.78 An example of this type of negotiation is
purchasing a used car when the only negotiable issue is price or buying a used refrigerator at a yard sale.
In contra~t. when parties’ goals are linked so that one person’s goal achievement helps others to achieve
their goals, it is a mutual-gain situation, also known as a non-zero-sum or integrative situation, where
there is a positive correlation between the goal attainments of both parties. If one person is a great
music composer and the other is a great writer of lyrics, they can create a wonderful musical hit
together. The music and words may be good separately, but fantastic together. To the degree that one
person achieves his or her goal, the other’s goals are not necessarily blocked, and may in fact be signifi-
cantly enhanced. The distinction between distributive and integrative negotiations is important because
the strucntre of the interdependence shapes the strategies and tactics a negotiator should employ.
PREPARING TO NEGOTIATE
Experienced negotiators often point to preparation as one of the most important factors contributing to
positive outcomes. Although few people would disagree with the benefits of preparation, most have no
idea what it is they should do to prepare. Regardless of the type of negotiation situation, all negotiators
should consider their goals, the best alternative to a negotiated agreement (BATNA), and their limits.
Prepare and Set Goals Always ask yourself what it is you hope to accomplish before beginning a
negotiation. But don’t just focus on quantitative indicators, such a~ the starting salary for a new job. Ask
yourself about your overall interests, or the reasons underlying the positions you might take. For exam-
ple, is salary the only thing that matters when you are starting a new job? Probably not. Looking more
broadly at the situation might show that you want to work in a place that al lows you to use the skills
you have been trained on, to work on tasks that are interesting, or to live close to family. These kinds of
things tap into your interests and values. By considering all these issues in advance, you minimize the
likelihood that you will narrowly focus on just one issue in the negotiation; this is especial ly important
when the addition of other issues could have turned a distributive negotiation into an integrative one.
Know Your BATNA To determine whether the opponent’s offers are favourable, negotiators need to
understand what outcome they might achieve through some other means (such as negotiating with some-
one else). This comparison is called the best alternative to a negotiated agreement (BATNA). BATNA
estimates your power in the negotiation because it represents the estimated cost of walking away from the
relationship. If others are willing to negotiate with you for the product or service you need, then you have
a high BATNA and considerable power in the negotiation because it would not cost you much to walk
away from the current negotiation. Cla~sic advice for people buying a new home is to “fall in Jove with
two houses, not just one.” Seriously considering a second house means you are less likely to overpay for
the one that is your most preferred option. A common problem in negotiations, however, is that people
tend to overestimate their BATNA; that is, they wrongly believe there are plenty of other ways to achieve
their objective other than through this negotiation or they underestimate other parties’ BATNA.
Know Your Limits In addition to goals and BATNA, you should also consider the point at which
you are indifferent to a negotiated outcome. This point, sometimes called a resistance point, helps you
decide whether or not you should cal l off a negotiation. If you are a seller, your resistance point is the

324 Part Three Team Processes
Debating Point:
IS CREATING VALUE SUCH A GOOD NEGOTIATION
STRATEGY?79
One of the bedrock principles of conflict management and negotiation is that the parties
need to adopt a problem-solving approach. In negotiation, this win-win perspective is called
creating value: discovering ways to achieve mutually satisfactory outcomes for both parties.
Creating value is important for several reasons. First, creating value produces more trust.
Some experts suggest that trust is vital in negotiations, because it enables each side to move
forward with concessions and points of agreement.
Second, creating value involves sharing information, including a better understanding of
each other’s needs, so the parties can reach an optimal solution. This solution needs to deter-
mine the relative value that each side assigns to aspects of the issues or items negotiated. By
identifying which items are more important to one party than the other, the resources can be
divided up in a way that gains the most value for both sides.
Experts agree with these and other benefits of creating value, but some also warn that this
scholarly picture isn’t always as rosy in real life. The most potent problem with creating value is
that it requires the parties to share information. This sharing is fine if you know the other party
will reveal any mutual gains and discoveries from the information-sharing process, but this
revelation doesn’t always occur. Instead, Side B might discover something of value that could
give it more of what it wants while making Side A think it has gained at great loss to Side B.
Consider the following true example: Back in the days of the Modei-T, the supplier of
the car’s door handles asked Ford for a 5 percent price increase. Ford initially balked, but
then agreed to the higher price if the supplier would reconfigure the bolt holes in the lids of
the wooden crates used to deliver the door handles. The supplier was both perplexed and
delighted; it didn’t cost anything to make the change, but what was the value to Ford? As it
turns out, Modei-T floorboards were made of wood, and Ford staff had figured out how to
modify the supplier’s crate lids as floorboards.
In this incident, Ford might have told the curious supplier why it was willing to pay this
higher price, but this doesn’t always occur. Sometimes, one side falsely believes the other
side is making a significant sacrifice when, in fact, that other side has received considerable
gains. If these gains had been revealed, the supplier might have asked for even more!
Another concern is that it is sometimes difficult for each party to distinguish creating value
from yielding-that is, giving the other party what they want. In an attempt to show collaboration,
you give one concession here, another there, and so forth. Eventually, your position lacks nego-
tiation options, because most of the concession space has been given away, while the other
party has given very little. Creating value is inherently in tension with gaining value, because you
must always keep your own interests equal to or greater than the interests of the other party.
least you will accept in exchange for what you are selling. If you are the buyer, your resistance point is
the most you are willing to pay for an item. The reason you should think about this in advance is that too
many people, especially those who don’t even consider their limits, shift the way they view their bottom
line in the face of a competitive offer from a counterpart. It is best to avoid this unless the evidence you
receive clearly indicates that your limits may be unreasonable.
DISTRIBUTIVE STRATEGIES THAT WORK
To succeed in a distributive negotiation, it is helpful to understand the concept of the bargaining zone,
which is defined as the space between each party’s resistance point.80 Exhibit 11.6 displays one possible
bargaining zone situation for a purely win-lose situation. As this model illustrates, the parties typically
establish three main negotiating points. The initial offer point is the opening offer to the other party,

Chapter Eleven Conflict and Negotiation in the Workplace
EXHIBIT 11.6 Bargaining Zone Model of Negotiations
Your
initial
point
Your
target
point
Bargaining Zone
Opponent’s
resistance
point
Your
resistance
point
Opponent’s
target
point
Opponenrs
initial
offer
point
325
the target point is the real istic goal or expectation for a final agreement, and the resistance point was
defined above-it’s the least a party is willing to accept or the most they are willing to offer. It is impor-
tant to remember that if the resistance point~ of the two parties overlap, as they do in Exhibit 11.6, then
any deal that falls within the bargaining zone is a good deal because each side has done better than their
resistance point. Therefore, they are both better off.
Most people, however, would prefer to reach a deal closer to their target point than their resistance
point-and this is what we mean when we say that each side will try to claim as much value as possible.
In a purely distributive situation, there are a few strategies that are known to lead to more value claiming.
Manage First Offers and Concessions Do you prefer to make the first offer in a negotiation
or wait to hear what the other side offers first? Most people say they prefer to wait (about 80 percent in
our experience}, and are surprised to learn that if you are prepared and have a realistic sense about the
structure of the bargaining zone, it is best to make the opening offer. The reason stems from research
on the concept of anchoring and adjustment. First offers set “anchors,” which tend to be highly influen-
tial in determining subsequent offer and concession-making behaviour. As we explained in Chapter 7,
people tend to adjust their expectations around the initial point (or anchor), so if your initial request is
high, opponents might move more quickly toward their resistance point along the bargaining zone.81 It
may even cause opponents to lower their resistance point.
After the first offer, negotiators need to make concessions.82 Concessions serve at least three impor-
tant purposes: ( 1) they enable the parties to move toward the area of potential agreement, (2) they
symbolize each party’s motivation to bargain in good faith, and (3) they tell the other party of the
relative importance of the negotiation items. However, concessions need to be clearly labelled as such
and should be accompanied by an expectation that the other party wi ll reciprocate. They should also be
offered in installments because people experience more positive emotions from receiving a few smaller
concessions than from one large concession.83 Generally, the best strategy is to be moderately tough
and to concede just enough to communicate sincerity and commitment to resolve the confl ict.84
Manage Time Negotiators make more concessions as the deadline gets closer.85 This can be a liabil-
ity if you are under time pressure, or it can be an advantage if the other party alone is under time pressure.
Negotiators with more power in the relationship sometimes apply time pressure through an “exploding
offer” whereby they give their opponent a very short time to accept their offer.86 These time-limited
offers are frequently found in consumer sales (“On sale today only!”) and in some job offers. They pro-
duce time pressure, which can motivate the other party to accept the offer and forfeit the opportunity to
explore their BATNA. Another time factor is that the more time someone has invested in the negotiation,

326 Part Three Team Processes
the more committed they become to ensuring an agreement is reached. This commitment increases the
tendency to make additional concessions not originally planned so that the negotiations do not fail.
INTEGRATIVE STRATEGIES THAT WORK
Many negotiation situations are not zero-sum, winner-take-al l problems. In fact, most situations that
appear distributive on the surface can be turned into an integrative situation by adding one or more
issues to the mix. This is comforting for people who do not enjoy the competitive nature of distributive
negotiations. The hallmark of success in an integrative situation is the reconciling of differences that
exist between parties. These differences can include things like variation in preferences across the issues,
difference in risk perceptions, and differences in time pressure. Value gets created when the parties agree
to deals in which they exchange high priority issues for low priority issues, and vice versa. For example,
when a manager is trying to hire a new employee they might discover that the most important issues to
the job candidate, in order of importance, are salary, start date, and coverage of moving expenses. If the
manager is in a rush and need~ someone to start right away, they might value start date over both salary
and moving expenses. Therefore, a deal that creates value is one where the employee agrees to start ear-
lier and in exchange for this concession they get a slight bump in salary (or moving expenses coverage).
A critical point here is that this sin1ation is not zero-sum. Both sides could treat it as such, split all the
issues down the middle, and thus leave value sitting on the table. Instead, they are better off to try and
understand the interests underlying their counterpart’s positions and create value by searching for differ-
ences. As this example also shows, the behaviours that lead to success in a distributive situation often
lead to suboptimal deals in an integrative situation. What then, are the strategies required to create value?
Gather Information Information is the cornerstone of effective value creation87 Therefore, skilled
negotiators heed the advice of the late management guru Stephen Covey: “Seek first to understand, then to be
understood.’.ss This means that we should present our case only after spending more time listening closely to
the other party and asking for detail~. It is particularly important to look beyond the opponent’s stated justi-
fications to the unstated motivation for their claims. Probing questions (such as asking “why”) and listening
intently can reveal better solutions for both parties. Nonverbal communication can also convey important
information about the other party’s priorities. Negotiating in teams can also aid the information gathering
process because some team members will hear information that others have ignored. Gleaning insight about
the other party’s interest can facilitate more creative problem solving and help you reframe the issues.
Discover Priorities through Offers and Concessions Some types of offers and concessions are
better than others at creating value. The key objective is to discover and signal which issues are more and Jess
important to each side. Suppose that you have been a~ked to “second” (temporarily transfer) some of your
best staff to projects in another division, wherea~ you need these people on site for other a~signment~ and to
coach junior staff. Through problem solving negotiation, you discover that the other division doesn’t need
those staff at their site; rather the division head mainly needs some guarantee that these people will be avail-
able when required. The result is that your division keeps the staff (important to you) while the other division
has some guarantee these people will be available at specific times for their projects (important to them).
One way to figure out the relative importance of the issues to each party is to make multi-issue
offers rather than discussing one issue at a time.89 You might offer a client a specific price, delivery
date, and guarantee period, for example. The other party’s counteroffer to multiple items signals which
are more and which are less important to them. Your subsequent concessions similarly signal how
important each issue is to your group.
Build the Relationship Trust is critical for the problem solving style of conflict handl ing as
well as in the value creation objective of negotiations.90 How do you build trust in negotiations? One
approach is to discover common backgrounds and interests, such as places you have lived, favourite
hobbies and sports teams, and so forth. If there are substantial differences between the parties (age,
gender, etc.), consider having team members that more closely match the backgrounds of the other
party. First impressions are also important. Recall from earlier chapters in this book that people attach

Chapter Eleven Conflict and Negotiation in the Workplace 327
emotions to incoming stimuli in a fraction of a second. Therefore, you need to be sensitive to your
nonverbal cues, appearance, and initial statements.
Signalling that we are trustworthy also helps strengthen the relationship. We can do this by dem-
onstrating that we are reliable and will keep our promises as well a~ by identifying shared goals and
values. Trustworthiness also increases by developing a shared understanding of the negotiation pro-
cess, including its norms and expectations about speed and timing.91 Finally, relationship building
demands emotional intell igence92 This includes managing the emotions you display to the other party,
particularly avoiding an image of superiority, aggressiveness, or insensitivity. Emotional intelligence
also involves managing the other party ‘s emotions. We can use well-placed flattery, humour, and other
methods to keep everyone in a good mood and to break unnecessary tension.93
EXPERT VERSUS AVERAGE NEGOTIATORS
Are there certain behaviours that expert negotiators exhibit differently than other people? In a classic
study conducted in the U.K., researchers selected a group of more than 50 expert negotiators and com-
pared them to a similar-sized group of “average” negotiators. After watching both groups whi le they
negotiated actual deals, it was clear that experts do in fact behave differently from average negotiators.
A surprise finding was that experts do not actually spend more time preparing than most other people;
instead, they differed substantial ly on how they planned and what they planned for. Expert negotiators
spent a great deal more energy considering the things we mentioned earlier: goals, their BATNA, and
their resistance point. Average negotiators rarely did so, and even if they did, the level of detail for each
element was cursory at best.94
The researchers also examined differences between the two groups in terms of the face-to-face
interactions while negotiating. These differences are summarized in Exhibit 11.7. What are the things
experts do less? First, expert negotiators tend to use fewer irritators, which are words or phrases that
have no persua~ive value and tend to irritate one’s counterpart. One of the most frequently used irrita-
tors is the phrase “generous offer” to describe one’s proposal. Second, expert negotiators make fewer
counterproposals than average negotiators-instead, they spent more time clarifying and understand-
ing a proposal before putting another offer on the table. Third, an expert is less likely to get into a
defend-and-attack spiral, whereby both sides use heated or emotion-laden comments in a back-and-
forth manner. An average negotiator is over three times more likely to engage in such behaviour. And
finally, experts spend much more face-to-face time ensuring that they understand their counterpart’s
perspective. In doing so, they will use phrases such as, “So do I understand .. . ” and “If I understand
EXHIBIT 11.7: Differences between Expert and Average Negotiators
~ ………. Eqleft Nfei!Cieti 1 A-. Nfei!Cieti 1
Use of irritators 2.3 per hour I 0.8 per hour
“This is a generous offer. . ••
“\Ve’re willing to be reasonable . . ••
Use of counterproposals 1.7 per hour 3.1 per hour
Defend/auack spirals I . 9% of comment’i 6.3% of commenL•
“You can’t blame us . . ”
” It’s not our fault . . . ”
Testing understanding and summarizing 17.2% of all behaviours 8.3% of all behaviours
“So do I under.aand . . . ”
” “If I understand you correctly . ..
Asking questions 21.3% of all behaviours 9.6% of all behaviours
Giving information about internal thought’i {feelings. concerns) 12.1 % of all behaviours 7.8% of all behaviours
Number of rea’ions to support an argument I .8 on average 3.0 on aver.tge

328 Part Three Team Processes
you correctly . . . “. These behaviours send a signal to a counterpart that they are being understood and
listened to, both of which increase trust.
There are also behaviours that experts tend to exhibit more than average negotiators. The research-
ers discovered that experts ask more than twice as many questions. This makes sense because informa-
tion gathering is central to value creation, and there is plenty of research supporting the argument that
naive negotiators tend to approach most negotiations with a distributive mentality (even when the situ-
ation is integrative). Expert negotiators were also more likely to use communication patterns in which
they gave clues about how they were thinking about alternatives. For example, a skilled negotiator
might say something like, ”!’ m uncertain how to react to what you’ve just said. I have some concerns
about the meaning of two aspects of the offer. Can you help me resolve this?”
Finally, imagine a situation where your counterpart has made a claim or an offer and you intend to
respond with reasons against their argument. How many reasons should you cite? Most people think
that more is better here-and that is consistent with the trend between experts and average negotiators.
In fact, experts tend to focus on only one or two counterarguments rather than presenting a laundry list.
They do so because the greater the number of reasons, the more likely their overall argument will be
diluted. So, keep it short, focused, and simple. You’ ll be more effective that way.
Chapter Summary
LO 1 Define conflict and debate its positive and negative consequences in tbe workplace.
Conflict is the process in which one party perceives that its interests are being opposed or negatively
affected by another party. The earliest view of conflict wa~ that it was dysfunctional for organiza-
tions. Even today, we recognize that cont1ict sometimes or to some degree consumes productive time, increa~es
stress and job d issatisfaction, discourages coordination and resource sharing, undermines customer service, fuels
organizational politics, and erodes team cohesion. But conflict can also be beneficial. It is known to motivate more
active thinking about problems and possible solutions, encourage more active monitoring of the organization in its
environment, and improve team cohesion (where the conflict source is external).
L02 Distinguish task from rela tionship conflict and describe three strategies to minimize rela tion-
ship conflict during task conflict episodes.
Ta~k conflict occurs when people focus their discussion around the issue while showing respect for
people with other points of view. Relationship conflict exists when people view each other, rather than the issue,
as the source o f conflict. It is apparent when people attack each other’s credibility and display aggression toward
the other party. It is difficult to separate ta~k from relationship conflict. However, three strategies or conditions
that minimize re lationship conflict during constructive debate are: (I ) emotional intelligence of the participants,
(2) team cohesion, and (3) supportive tean1 norms.
L03 Diagram the conflict p rocess model and describe six structural sources of conflict in
organizations.
The conflict process model begins with the six structural sources of conflict: incompatible goals,
differentiation (different values and beliefs), interdependence, scarce resources, ambiguous rules, and communi-
cation problems. These sources lead one or more parties to perceive a conflict and to experience confl ict emotions.
This, in turn, produces manifest conflict, such as behaviours toward the other side. The conflict process often
escalates through a series of episodes.
L04 Outline the five conflict handling styles and discuss the circumstances in which each would
be most appropriate.
There are five known conflict handling styles: problem solving, forcing, avoiding, yie lding, and
compromising. People who use problem solving have a win-win orientation. Others, particularly forcing, assume
a win-lose orientation. In general , people gravitate toward one or two preferred conflict handling styles that match
their personality, personal and cultural values, and pa~t experience.

Chapter Eleven Conflict and Negotiation in t he Workplace 329
The best style depends on the s ituation. Problem solving is best when interests are not perfectly opposing, the
parties trust each other, and the issues are complex. Forcing works best when you strongly bel ieve in your posi-
tion, the dispute requires quick action, and the other party would take advantage of a cooperative style. Avoidance
is preferred when the conflict has become emotional or the cost of resolution is higher than its benefits. Yielding
works well when the other party has substantially more power, the issue is less important to you, and you are not
confident in the logical soundness of your position. Compromising is preferred when the parties have equal power,
they are under time pressure, and they Jack trust.
LOS Apply the six s tructural approaches to conflict managemen t and describe the three types of
third -party dispu te resolution.
Structural approaches to conflict management include emphasizing superordinate goals, reducing
differentiation, improving communication and understanding, reducing interdependence, increasing resources,
and clarifying rules and procedures.
Third-party conflict resolution is any attempt by a relatively neutral person to help the parties resolve their differ-
ences. The three main forms of third-party dispute resolution are mediation, arbitration, and inquisition. Managers tend
to use an inquisition approach, although mediation and arbitration are more appropriate, depending on d1e situation.
LOG Describe dist ributive and integrative negotiations and outline s trategies skilled negotiators
use to claim value and create value.
Negotiation refers to decision-making s ituations in which two or more interdependent parties
attempt to reach agreement. When negotiator goals run in opposite directions they find themselves in a distributive
s ituation, and when their goals are not fully incompatible they are in an integrative s ituation. Effective distributive
strategies include making ambitious opening offers and managing the concession-making process. ln an integra-
tive situation, value can be created by gathering information, sharing information, a~king questions to understand
a counterpart’s perspective, and building the relationship.
Key Terms
best alternative to a negotia ted agreement (BATNA)
conflict
distributive s itua tion
integ rative situa tion
negotiation
relationship conflict
superordinate goals
task conflict
third -party co nflict resolution
win- lose orienta tion
win- win orienta tion
Critical Thinking Questions
I. Distinguish task conflict from relationship conflict and explain how to apply the former with minimal levels
of the latter.
2. The CEO of Creative Toys Inc. read about cooperation in Japanese companies and vowed to bring this same
philosophy to his company. His goal is to avoid all conflict, so that employees will work cooperatively and be
happier at Creative Toys. Discuss the merits and limitations o f the CEO’s pol icy.
3. Cont1ict an10ng managers emerged soon after a French company acquired a Swedish firm. The Swedes
perceived the French management a~ hierarchical and arrogant, whereas the French thought the Swedes were
naive, cautious, and Jacking an achievement orientation. Identify the source(s) of cont1ict that best explain
this cont1ict, and describe ways to reduce dysfunctional conflict in this situation.
4. You have just been transferred from one unit of the organization to another unit. On the last day of work in
the firs t unit, your current manager calls your new manager informing her that you are a tough candidate
and that you possess an attitude. The would-be manager calls you, providing you with the information, and
expresses apprehension. How would you resolve this conflict?
5. You are a special assistant to the commander-in-chief of a peacekeeping mission to a war-torn part of the
world. The unit consists o f a few thousand peacekeeping troops from the Canada, France, India, and four
other countries. The troops will work together for approximately one year. What strategies would you recom-
mend to improve mutual understanding and minimize conflict among these troops?

330 Part Three Team Processes
6. The chief operating officer (COO) has noticed that production e mployees in the company’s Mex ican manu-
facturing operations are unhappy with some of the production engineering decis ions made by engineers in
the company’s headquarters in Toronto. At the same time, the engineers complain that production employees
aren’t applying their engineering specifications correctly and don’t understand why those specifications were
put in place. The COO believes that the best way to resolve this conflict is to have a frank and open discus-
s ion between some of the engineers and employees representing the Mexican production crew. This open
dialogue approach worked well recently among managers in the company’s Toronto headquarters, so it should
work equally well between the engineers and production staff. Based on your knowledge of communication
and mutual understanding as a way to resolve conflict, discuss the COO’s proposal.
7 . Describe the inquisitional approach to resolve disputes between employees or work units. Discuss its appro-
priateness in organizational settings, including the suitability of its use with a multigenerational workforce.
8. Jane has just been appointed as purchasing manager of Tacoma Technologies Inc. The previous purchasing
manager, who recently retired , was known for his “winner-take-all” approach to suppliers. He continually
fought for more discounts and was skeptical about any special deals that suppliers would propose. A few
suppliers refused to do bus iness with Tacoma Technologies, but senior management was confident that the
former purchas ing manager’s approach minimized the company’s costs. Jane wants to try a more collabora-
tive approach for working with suppliers. Will her approach work? How should she adopt a more collabora-
tive approach in future negotiations with suppliers?
9 . You are a new program manager with responsibility for significant funding and external relations, and
because o f downsizing issues in your area, you have lost two valuable employees (actually 1.5, because the
second person is on half time now: she used to be your manager and you trained under her). You have been in
the new job approx imately two weeks: however, you have been in the unit for more than a year and have seen
how systems are managed from your manager’s perspective. You now have her job. Out of the blue, a senior
person (not in your area) comes to you and says he is taking most of your space. He doesn’t ask your permis-
s ion, nor does he seem the least bit concerned with your response. What do you do?
Case Study:
CAR WARS AT WOLFSBURG
by Steven L. McShane, Curtin University (Australia) and University of’ Victoria (Canada)
Over the past 15 years, Volkswagen Group (VW) acquired several fie fdoms- Audi, Lan1borghini, Bentley, Bugatti,
Skoda, SEAT – that jealously guarded their brand and continuously rebelled against sharing knowledge. One mem-
ber of VW’s supervisory board (the German equivalent of a board of directors) commented that managing the
company is “like trying to ride a chariot with four or five horses, each of which pulls in a different direction.”
Then Porsche AG e ntered the fray. The luxury sports car company, which rel ies on VW for some of its produc-
tion work, began acquiring stock in VW and eventually achieved a controlling interest. Porsche CEO Wendel in
Wiedeking was aware of VW’s internal rivalries. “If you mix the Porsche guys with the Audi guys and the VW
guys you will have trouble,” says Wiedeking. “Each is proud to belong to his own company.”
Yet Wiedeking stirred up a different type of conflict as Porsche tightened its grip over VW’s supervisory
board. Through an unswerving drive for efficient production and astute marketing, Wiedeking and his executive
team had transformed Porsche into the world’s most profitable and prestigious car company. Wiedeking wanted to
apply those practices at VW by closing down inefficient operations and money-losing car lines.
“Wiedeking is a Porsche CEO from another corporate culture,” says German auto analyst Christoph Stoermer.
“He’s out to maxi mize profits by cutting costs. And he snubbed everyone, telling off VW management, interfer-
ing with their way of doing business.” Ferdinand Dudenhoeffer, director of Germany’s Center for Automotive
Research (CAR), agrees. “Porsche is very successful in being Jean and profitable. It’s not going to be harmonious.”
Particularly offended by Wiedeking’s plans was VW chairman Ferdinand Piech, who had a different vis ion of
Europe’s largest automaker. Piech, whose grandfather developed the VW Beetle, placed more emphasis on spec-
tacular engineering than exceptional profit~ . For example, he supported the money-losing Bugatti brand, which
VW acquired several years ago when Piech was CEO. More recently, Piech chan1pioned the Phaeton, VW’s luxury
car that broke new ground in innovation (it boastsiOO patents) but has not been a commercial success.
Wiedeking, on the other hand, believed that VW could be more profitable if it stopped produc ing the Phaeton
and Bugatti. “P iech sees his vision endangered by Wiedeking,” says Dudenhoeffer. “Wiedeking said that there are

Chapter Eleven Conflict and Negotiation in t he Workplace 331
no holy cows at VW, no more Phaetons, no more Bugattis.” These ideas made Piech’s blood boil. “Anyone who
says that VW should pull the Phaeton doesn’ t understand the world,” grumbled Piech, explaining that luxury cars
represent the only segment with double-digit growth .
There is an unusual twist in the confl ict involving Piech, Wiedeking, and Porsche. Piech is a member of the
Porsche family. He is a cousin of Porsche chairman Wolfgang Porsche and owns a 10 percent share o f the Porsche
company. Piech began his career at Porsche and became its chie f engineer before moving to Audi and later VW
Furthermore, in what many consider a blatant conflict o f interest, Piech supported Porsche’s initial investment in
VW But when Piech’s and Wiedeking’s plans ended up on a collision course, that initial friendly investment in the
partnership turned into all-out corporate war. “There was always a cea~efire between Piech and the Porsches, but
now it’s war,” claims auto analyst Ferdinand Dudenhoeffer. “This is like ‘Dallas’ and ‘ Dynasty’ in Wolfsburg (the
c ity where VW has its headquarters). No company in the world is so self-absorbed with its problems.”
Postscript Ironically, Porsche CEO Wendelin Wiedeking’s plans backfired. Porsche had borrowed heavily to
acquire its controlling interest in VW while maintaining its own business operations. Some estimate that Porsche
had loans of more than US$14 bill ion. Furthermore, VW shares increased substantially during the takeover process,
so Porsche owed massive taxes for the increased “paper profits” of the shares it owned. The timing couldn’t have
been worse. The great financial crisis hit the world, which cut Porsche sales and dried up funds, making it difficult
for Porsche to pay interest on its loans and to renew loans that were coming due. In effect, it was on the brink of
bankruptcy. In addition, a unique Jaw allowed one German state (Lower Saxony), which had a 20 percent ownership
in VW, to veto any important decisions in the company, including Porsche’s control of VW.
Ultimately, Porsche agreed to give up its controlling interest in VW. Instead, it sold some of its business to VW
and the Qatar government and, ultimately, agreed to be acquired by VW (rather than vice versa). Wiedeking lost
his job as Porsche CEO, whereas Ferdinand Piech (as chairman of VW’s supervisory board) would effectively be
head of both automakers. Complicated legal and financial matters delayed the complete acquisition, but VW did
complete its takeover of Porsche.
Discussion Questions
I. Identify and discuss the sources of conflict between Porsche and Volkswagen executives.
2. Describe the cont1ict handling styles used by Wendel in Wiedeking and Ferdinand Piech. Were they appropri-
ate in this s ituation?
The facts of this case were pieced together by Steven L. McShane from the following sources: M. Landler. “Twist in the Intrigue
at VW May Help Chief Keep His Job.” New Yor* Times. 2 I April 2006. 5: R. Hutton. “Porsche Ready to Swallow VW,” Autocar.
7 November 2007: “German Carmaker Family Feud Plays out in VW Boardroom.” Dewsche \Velie. I 8 September 2008;
D. Hawranek. ”Clans. Executives Sharpen Knives Backstage at Porsche and VW,” Spiegel Online, I I March 2008: N.D.
Schwartz. “Porsche Takes a Controlling Interest in VW.” New York Times. I 7 September 2008: D. Hawranek. ”Gennan Cannaker
Narrowly Averts Bankruptcy.” Spiegel Online, 25 May 2009: C. Dougherty, “Porsche Chief Pays Full Price for his Overreach.”
/11/emarional Hemld Tribune. 24 July. 2009. I: BryanL Adam. “VW-Porsche merger ends years of wrangle.,.” Financial Time.’
{London). 5 July. 2012.
Class Exercise:
THE CONTINGENCIES OF CONFLICT
HANDLING
By Gerard A. Callanan and David F. Perri, Wes t Chester University of Pennsylvania
Purpose This exercise is designed to help you understand the contingencies of applying conflict handling
styles in organ izational settings.
Instructions
Srep I : Partic ipants will read each of the five scenarios presented below and select the most appropriate
response from among the five alternatives. Each scenario has a correct response for that situation.
Srep 2 (Oprional): The instructor may ask each student to complete the Conflict Handling Scale self-assessment
or a similar instrument. This instrument will provide an estimate of your preferred cont1ict handling style.

33 2 Part Three Team Processes
Srep 3: As a class, participants g ive their feedback on the responses to each o f the scenarios, with the instructor
guiding discussion on the contextual factors embodied in each scenario. For each scenario, the class should identify
the response selected by the majority. In addition, participants will discuss how they decided on the choices they
made and the contextual factors they took into account in making their selections.
Srep 4: Student~ will compare their responses to the five scenarios with their results from the conflict handling self-
a~sessment. Discussion will focus on d1e extent to which each person’s preferred conflict handling style influenced
their alternatives in this activity, and the implications of this style preference for managing conflict in organizations.
SCENARI0#1
Setting You are a manager of a division in the accounting department of a large Canadian bank. Nine exempt-
level analysts and six nonexempt clerical staff report to you. Recently, one of your analyst~, Jane Wilson, ha~
sought the bank’s approval for tuition reimbursement for the cost of an evening MBA program special izing in
organizational behaviour. The bank normally encourages e mployees to seek advanced degrees on a part-time ba~is.
Indeed, through your encouragement, nearly all of the members of your staff are pursuing additional schoolwork.
You consult the bank’s pol icy manual and discover that two approvals are necessary for reimbursement-yours
and that of the manager of training and development, Kathy Gordon. Further, the manual states that approval for
reimbursement will only be granted if the coursework is “reasonably job related.” Ba~ed on your review of the
matter, you decide to approve Jane’s request for reimbursement. However, Kathy Gordon reject~ it outright by
claiming that coursework in organ izational behaviour is not re lated to an accounting analyst position. She states
that the bank will only reimburse the analyst for a degree in either accounting or finance. In your opinion, however,
the interpersonal skills and insights to be gained from a degree in organizational behaviour are job related and can
also benefit the e mployee in future a~signment~. The analyst job requires interaction with a variety of individuals
at different levels in the organization, and it is important that interpersonal and communication skills be strong.
After further discussion it becomes clear that you and Kathy Gordon have opposite views on the matter. Since both
of you are at the same organization level and have equal status, it appears that you are at an impasse. Although the goal
of reimbursement is important, you are faced with other pressing demands on your time. In addition, the conflict ha~
diverted the attention of your work group away from its primary responsibilities. Because the school term is about to
begin, it is essential that you and Kathy Gordon reach a timely agreement to enable Jane to pursue her coursework.
Action Alternatives for Scenario #1 Please indicate your firs t ( I) and second (2) choices from an10ng the
following alternatives by writing the appropriate number in the space provided.
Action Alternative Ranking ( I st & 2nd)
I. You go aJong with Kathy Gordon’s view and advise Jane \Vilson to select either accounting or finance as a major for her MBA.
2. You decide to withdr.tw from the situation completely and te lJ Jane to work it out with Kathy Gordon on her own.
3. You decide to take the matter to those in higher management levels and argue forcefully for your point of view. You do
everything in your power to ensure that a decision wil1 be made in your favour.
4 . You decide to meet Kathy Gordon halfway in order to reach an agreement. You advise Jane to pursue her MBA in
~ccounting or finance, but also recommend she minor in organizational behaviour by taking e lectives in that field.
5. You decide to work more closely with Kathy Gordon by attempting to get a clear as well as flexible policy written that
reflects both of your views. Of course, this will require a significant amount of your time.
SCENARI0#2
Setting You are the vice-president of a relatively large division (80 employees) in a medium-s ized consumer
products company. Due to the recent turnover of minority staff, your division ha~ fallen behind in meeting the
company’s goal for Equal Employment Opportunity (EEO) hiring. Because o f a scarcity of qualified minority
candidates, it appears that you may fall further behind in achieving stated EEO goals.
Although you are aware of the problem, you believe that the low level of minority hiring is due to increa~ed
attrition in minority staff as well as the Jack of viable replacement candidates. However, the EEO officer believes
that your hiring criteria are too stringent, resulting in the rejection of minority candidates with the basic qualifica-
tions to do the job. You support the goals and principles of EEO; however, you are concerned that the hiring of
Jess-qualified candidates wi ll weaken the performance of your divis ion. The EEO officer believes that your failure
to hire minority e mployees is dan1aging to the company in the short term because corporate goals wi ll not be met,
and in the long term because it will restrict the pool of minority candidates available for upward mobil ity. Both of
you regard your concerns a~ important. Further, you recognize that both of you have the company’s best interests
in mind and that you have a mutual interest in resolving the conflict.
Action Alternatives for Scenario #2 Please indicate your ftrs t ( I) and second (2) choices from an10ng
the following alternatives by writing the appropriate number in the space provided.

Chapter Eleven Conflict and Negotiation in t he Workplace 333
–Action Ahernative Ranking ( 1s t & 2nd)
I.
2.
3.
4.
5.
You conclude that the whole problem is too complex an issue for you to handle right now. You put it on the “back burner ..
and decide to reconsider the problem at a later date.
You believe that your view outweighs the perspective of the EEO officer. You decide to argue your position more vigorously
and hope that your stance will sway the EEO officer to agree with your view.
You decide to accept the EEO officer’s view. You agree to use less s tringent selection criteria and thereby hire more minority
employees.
You give in to the EEO officer somewhat by agreeing to rela..’\ your standards a little biL This ·would allow slightly more minority
hiring (but not enough to satisfy the EEO goal) and could cause a small reduction in the overall performance of your eli vision.
You try and reach a consensus that addresses each of your concerns. You agree to work harder at hiring more minority
applicants and request that the EEO officer agree to help find the most qualified minority candidates available.
SCENARI0#3
Setting You are the manager in charge of the financial reporting section of a large insurance company. It
is the responsibil ity o f your group to make periodic written and oral reports to senior management regarding
the company’s financial performance. The company’s senior management has come to rely on your quick and
accurate dissemination of financial data as a way to make vital decisions in a timely fashion . This has given you
a relatively high degree o f organizational influence. You rely on various operating departments to supply you
with financial information according to a pre-established reporting schedule.
I
In two days, you must make your quarterly presentation to the company’s board of directors. However, the
claims department has failed to supply you with several key pieces of information that are critical to your pre-
sentation . You check the reporting schedule and realize that you should have had the information two days ago.
When you call Bill Jones, the claims department manager, he informs you that he cannot possibly have the data to
you within the next two days. He states that other pressing work has a higher priority. Although you explain the
critical need for this data, he is unwill ing to change his position. You believe that your presentation is vital to the
company’s wel fare and explain this to Bill Jones. Although Bill has less status than you, he has been known to
take advantage of individuals who are unwilling or unable to push their point of view. With your presentation less
than two days away, it is critical that you receive information from the claims department within the next 24 hours.
Action Alternatives for Scenario #3 Please indicate your firs t ( I) and second (2) choices from an10ng
the following alternatives by writing the appropriate number in the space provided.
r–
Action Ahernative Ranking ( 1s t & 2nd)
I.
2.
3.
4.
15.
Accept the explanation from Bill l one.’ and try to get by without the figures by using your best judgment as to what they
would be.
Tell Bill Jones that unless you have the data from his department on your desk by tomorrow morning. you will be forced to
go over his head to compel him to give you the numbers.
Meet Bill Jones halfway by agreeing to receive part of the needed figures and using your own judgment on the othe rs.
T ry to get your presentation postponed until a later date. if possible.
Forget about the short•te rm need for information and try to achieve a longer· te rm solution. such as adj usting the reporting
schedule to better accommodate your mut-ual needs.
SCENARI0#4
Setting You are the production manager of a medium-sized building products company. You control
a production line that runs on a three-shift basis. Recently, Ted Smith, the materials handling manager,
requested you to accept a different packaging of the raw materials for the production process than what has
been customary. He states that new machinery he has installed makes it much easier to provide the material
in 45-kilogranl sacks instead of the 22-kilogram bags that you currently receive. Ted further explains that the
provision of the material in the 22-kilogram bags would put an immense strain on his operation, and he therefore
has a critical need for you to accept the change. You know that accepting materials in the new packaging will
cause some minor disruption in your production process, but should not cause long-term problems for any of
the three shifts. However, you are a little annoyed by the proposed change because Ted did not consult with you
before he installed the new equipment. In the past, you and he have been open in your communication. You do
not think that this fai lure to consult you represents a change in your re lationship.
Because you work closely with Ted, it is essential that you maintain the harmonious and stable working rela-
tionship that you have built over the pa~t few years. In addition, you may need some help from him in the future,
s ince you already know that your operation wi ll have special material require ments in about two months. You also
know that Ted has influence at higher levels of the organization.

334 Part Three Team Processes
Action Alternatives for Scenario # 4 Please indicate your first ( 1) and second (2) choices from among
the following alternatives by writing the appropriate number in the space provided.
Action Alternative Ranking (I st & 2nd)
I. Agree to accept the raw mate rial in the different fonnal.
1- . . . . . . . –
2. Refuse to accept the matena1 m the new fonnat because Jt would cause a dJsrupL1on m your operat:ton.
3.
4.
5.
Propose a solution where you accept material in the new fonnat d uring the first shift but not d uring the second and third.
Tell Ted Smith that you do not wish to dea1 with the issue at this time. but that you will consider his request and get back to
him at a later date.
You decide to teJI Ted Smith of your concern regarding his failure to consult with you before installing new equipment. You
inform him that you wish to find longer term solutions to the confl ict between you .
SCENARIO # S
Setting You are e mployed as supervisor of the compensation and benefits section in the human resources
department o f a medium-sized pharmaceutical company. Your staff of three clerks is responsible for maintaining
contacts with the various benefits providers and answering related questions from the company’s e mployees. Your
section shares support staff, word processing, and copier resources with the training and development section of
the department. Recently, a disagreement has arisen between you and Beth Hanson, the training and development
supervisor, over when the support staff should take their lunches. Beth would like the support staff to take their
lunches an hour later to coincide with the time most of her people go to lunch. You know that the support staff
does not want to change their lunch times. Further, the c urrent time is more convenient for your staff.
At this time, you are hard-pressed to deal with the situation. You have an important meeting with the provider
of dental insurance in two days. It is critical that you are well prepared for this meeting, and these other tasks are
a distraction.
Actio n Alterna t ives for Scenario #5 Please indicate your first (I) and second (2) choices from among
the following alternatives by writing the appropriate number in the space provided .
Action Alternative Ranking ( 1st & 2nd)
I. Take some time over the next day and propose a solution whereby the support staff takes their lunch at the earlier time three
days a week and at the later time two days a week.
2. Te ll Beth Hanson you will deal with the matter in a few days, after you have addressed the more pressing issues.
3. Let Beth Hanson have her way by agreeing to a later lunch hour for the support staff.
4. A at out tell Beth Hanson that you will not agree to a change in the support staffs lunchtime.
5. Devote more time to the issue. Attempt to achieve a broad-ba…;ed consensus with Beth Hanson that meel’i her need’i as well as
yours and those of the support s taff.
Source: G. A. Callanan and D. F. Perri. ”Teaching Conflict Management Using a Scenario-Based Approach,” Journal of Education for Business. 81 (Jan/
Feb2006), pp. 131- 139.
Self-Assessments for Chapter 11
SELF-ASSESSMENT NAME
What is your preferred conflict handling style?
DESCRIPTION
There are five main conflict· handling styles that people use in
response to conflict s ituations. \Ve are usually most comfortable
using one or two of these styles based on our personality. values.
sel f-concept. and past experience. This asse..~sment helps you see
what a pproach you tend to take when dealing with conflict.

CHAPTER 12
Leadership in Organizational
Settings
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
LO 1 Define leadership and shared leadership.
L02 Describe the four elements of transformational leadership and explain why they are important for
organizational change.
L03 Compare managerial leadership with transformational leadership, and describe the features of
task-oriented, people-oriented, and servant leadership.
L04 Discuss the elements of path-goal theory, Fiedler’s contingency model, and leadership subst itutes.
LOS Describe the two components of the implicit leadership perspective.
LOG Identify eight personal attributes associated with effective leaders and describe authentic leadership.
L07 Discuss cultural and gender similarities and differences in leadership.
335

336 Part Three Team Processes
Toronto startup company Dayforce had developed world-class workforce management software
(employee scheduling, forecasting, etc.) but lacked an established market presence. Founder and
CEO David Ossip saw an opportunity to partner with Minneapolis-based Ceridian, a well-established
global organization in payroll systems that needed new products and services. Ceridian acquired
Dayforce one year after the partnership began, and Ossip was installed as CEO of the overall
company less than one year after the acquisition.
When Ossip first arrived at Ceridian’s offices, he realized the company needed a leader-led
transformation. “My take-home after a hard look at Ceridian was that the organization had to reinvent
its culture in order to drive proper employee engagement, in turn improving our customer engagement
scores and market share,” Ossip recalls. Employees weren’t enthusiastic about Ceridian’s future and
lacked trust in its senior managers, most of whom were sequestered far away on the executive floor.
Ossip developed a more appealing vision for Ceridian’s employees. “Our worldwide focus
became something more than just paying people correctly,” Ossip explains. “At Ceridian, our brand
promise is ‘Makes Work Life Better’-we believe that our solutions and our people make work life
better for employees everywhere, in any role within their organization.” Ossip travelled to Ceridian’s
offices worldwide to discuss and demonstrate his personal commitment to the company’s new
vision and values. “Essentially it came down to a lot of communication, a lot of town halls, and a lot
of interaction with everyone inside Ceridian, and that’s what I did.”
Ossip disbanded the executive floor and introduced a coaching program to help managers
communicate the company’s vision more effectively to employees. A new team of executives was
carefully selected who believed in the company’s vision and values. As a result, employees gained
trust in management because management’s words and actions matched the firm’s vision and values.
“When employees are able to see their leadership live by the values that guide them, it helps to
establish a sense of organizational trust and credibility,” says Ossip, who was recently recognized as
the leader with the highest employee ratings on Glassdoor. This view is echoed by Ceridian employees.
“Having worked in other companies prior to Ceridian, I can only appreciate the leadership team that
is consistently walking the talk, seeking feedback and doing something with the feedback,” says a
Ceridian employee in Montreal. 1
The transformation of Ceridian illustrates how David Ossip and other leaders make a difference in an organization’s survival and success. This opening case study also highlights specific leadership
topics, such as vision, role modelling, and the leader’s personal attributes of leadership integrity and
self-concept. Leadership is one of the most researched and discussed topics in the field of organiza-
tional behaviour2 Google returns a whopping 533 mi llion web pages where leadership is mentioned.
Google Scholar lists 287,000 journal articles and books with leader or leadership in the title. Amazon
lists more than 31,000 books in the English language with leadership in the title. The number of books
or documents with the words leader or leadership added to the U.S. Library of Congress catalogue over
the past decade was four times more than two decades earl ier and 48 times more than during the first
decade of the 1900s.
The topic of leadership receives so much attention because we are captivated by the capacity of
some individuals to influence and motivate beyond normal expectations a large collective of people.
This chapter explores leadership from four perspectives: transformational, managerial, implicit, and
personal attributes] Although some of these perspectives are currently more popular than others, each
helps us to more fully understand the complex issue of leadership. The final section of this chapter
looks at cross-cultural and gender issues in organizational leadership. But first, we learn about the
meaning of leadership as well a~ shared leadership.
What Is Leadership?
L01 Several years ago, dozens of leadership experts from around the world reached a con-
sensus that leadership is about influencing, motivating, and enabling others to con-
tribute toward the effectiveness and success of the organizations of which they are

Chapter Twelve Leadership in Organizational Settings 337
members.4 This definition has two key components. First, leaders motivate others through persua-
sion and other influence tactics. They use their communication skills, rewards, and other resources
to energize the collective toward the achievement of challenging objectives. Second, leaders are
enablers. They allocate resources, alter work relationships, minimize external d isruptions, and
establish other work environment changes that make it easier for employees to ach ieve organiza-
tional objectives.
SHARED LEADERSHIP
Organizational behaviour experts have long argued that leadership is not about specific positions in the
organizational hierarchy. Formal leaders are responsible for ” leading” others, but companies are far
more effective when everyone assumes leadership responsibi lities in various ways and at various times.
This emerging view, called shared leadership, is based on the idea that leadership is a role, not a posi-
tion51t doesn’t belong to just one individual in the work unit. Instead, employees lead each other as the
occasion arises. Shared leadership exists when employees champion the introduction of new technolo-
gies and products6 It also exists when employees engage in organizational citizenship behaviours that
improve the performance and well-be ing of co-workers and the overall team.
Shared leadership typically supplements formal leadership; that is, employees lead along with the
formal manager, rather than as a replacement for that manager. However, W. L. Gore & Associates,
Semco SA, Valve Corporation, and a few other unique companies rely almost completely on shared
At EllisDon, leaders aren’t just people in management jobs. The Misslssauga-based construction giant
believes that leadership extends to every employee in the organization. “Everyone is a leader, everyone
is accountable to each other. and everyone is involved In the success of the company as whole; explains
EllisDon CEO Geoff Smith (shown here). “It’s a leadership philosophy throughout our company.• EllisDon
supports shared leadership by setting objectives and then giving employees a high degree of autonomy to
achieve them. “Get good people, give them the authority, give them the support, and then get out of their
way; Smith advises. ·so you create leaders around you.”7
©Fernando Morales/The Globe and MailfCP Images

338 Part Three Team Processes
leadership because they don’t have any formal managers on the organizational chart.8 ln fact, when Gore
employees are asked “Are you a leader?” in annual surveys, more than SO percent of them answer “Yes.”
The idea of shared leadership is quickly gaining popularity in the business community. Sergio
Marchionne, the Canadian-Italian CEO of Fiat and Chrysler, says: “We’ve abandoned the Great Man
model of leadership that long characterized Fiat and have created a culture where everyone is expected
to lead.9 John Gardner, the former White House cabinet member who introduced Medicare, wrote
almost three decades ago that organizations depend on employees across al l levels of the organization
to seek out opportunities and solutions rather than rely on formal leaders to do so.10
Shared leadership flourishes in organizations where the formal leaders are willing to delegate power
and encourage employees to take initiative and risks without fear of failure (i.e., a learning orientation
culture). Shared leadership also calls for a collaborative rather than internally competitive culture because
employees succeed in shared leadership roles only when their co-workers support them in these roles. Fur-
thermore, shared leadership lacks formal authority, so it operates best when employees learn to influence
others through their enthusiasm, logical analysis, and involvement of co-workers in their idea or vision.
Transformational Leadership Perspective
Most leadership concepts and practices can be organized into four perspectives: transfor-
mational, managerial, implicit, and personal attributes. By far the most popular leader-
ship perspective today-and arguably the most important in the domain of leadership-is
transformational leadership. Transformational leadership views leaders as change agents. They create,
communicate, and model a shared vision for the team or organization. They encourage experimentation
so employees find a better path to the future. Through these and other activities, transformational leaders
also build commitment in followers to strive for that vision. There are several models of transformational
leadership, but four elements are common throughout most of them and represent the core concepts of
this leadership perspective. These four elements are: develop and communicate a strategic vision, model
the vision, encourage experimentation, and build commitment to the vision (see Exhibit 12.1 ).11
EXHIBIT 12.1 Elements of Transformational Leadership
Leadership

Chapter Twelve Leadership in Organizational Settings 339
DEVELOP AND COMMUNICATE A STRATEGIC V ISION
The heart of transformational leadership is a strategic vision. 12 A vision is a positive representation of
a future state that energizes and unifies employees. 13 Sometimes this vision is created by the leader;
at other times, it is formed by employees or other stakeholders and then adopted and championed by
the formal leader. The opening case study to this chapter described how David Ossip ha~ Jed Cerid-
ian’s success through a vision of making work life better for employees everywhere, rather than selling
payroll and employee scheduling software as a service. Will iam Rogers, CEO of British radio station
group UKRD, emphasizes that one of the key features of successful leaders is their “clarity of vision,
so people can say: ‘I know where we’re going, what this journey is about, what our noble cause is.’
For us, it’s not just running a radio group and commercial success-it’s about changing people’s Jives,
impacting on communities.”14
An effective strategic vision has several identifiable features. 15 It refers to an ideal ized future with
a higher purpose. This purpose is associated with personal values that directly or indirectly fulfil the
needs of multiple stakeholders. A values-based vision is also meaningful and appeal ing to employees,
which energizes them to strive for that ideal. Another reason why a strategic vision motivates employ-
ees is because it is a distant goal that is both challenging and abstract. A vision is challenging because
it requires substantial transformation, such as new work practices and belief systems.
A strategic vision is necessarily abstract for two reasons. One reason is that it ha~n’t yet been expe-
rienced (at least, not in this company or industry), so it isn’ t possible to detail exactly what the vision
looks like. The other reason is that an abstract description enables the vision to remain stable over time,
yet is sufficiently flexible to accommodate operational adj ustments in a shifting external environment.
• by the NUMBERS
Not Quite Leading with Vision 16
of 32,000 employees
surveyed globally say
their company’s
leaders communicate a
clear and compell ing
v ision of the future.
of 1,200 Canadian
employees surveyed
strongly or somewhat
agree that senior
management in their
organization communicates
a clear v ision.
of more than 40,000
employees surveyed in
300 global organizations
say they know their
company’s v ision, mission,
and values.
of1,061 American
employees surveyed
say they don’t get
(understand) their
company’s vision or have
never seen it.
of 168,000 employees
surveyed across
30 countries say
they either do not believe
in their employer’s
mission/purpose (vision)
or don’t understand it.

340 Part Three Team Processes
For example, Ceridian’s vision to make work life better does not refer to specific goals such as expand-
ing the product range or launching the service into new markets. Instead, it describes the broader noble
cause of improving the work life of customers, their employees, and other stakeholders.
Another feature of an effective vision is that it is unifying. It is a superordinate objective that bonds
employees together and aligns their personal values with the organization’s values. In fact, a successful
vision is really a shared vision, because employees collectively define themselves by this a~pirational
image of the future as part of their identification with the organization.
Communicate the Vision A strategic vision’s effectiveness depends on how leaders convey it
to others. 17 Transformational leaders generate meaning and motivation in followers by relying on sym-
bols, metaphors, stories, and other vehicles that transcend plain language. 18 Metaphors and related
communication tools “frame” the vis ion, meaning that they guide or construct the listener’s mental
model of the situation. For example, leaders at Da Vita refer to the company as a village and employees
(called teammates) as citizens of that village who “cross the bridge,” which symbolizes that they make
a commitment to the company. “The words we use, while simple in nature, are packed with meaning,”
explains an executive at Da Vita, the largest dialysis treatment group in the United States. 19
Borrowing images from other experiences creates a richer understanding of the abstract vision.
These communication tools also generate desired emotions, which motivate people to pursue the
vision. For instance, when George Cohen, the ebull ient CEO of McDonald’s Canada, faced the dif-
ficult challenge of opening McDonald ‘s restaurants in Moscow, he frequently reminded his team mem-
bers that they were establishing “hamburger diplomacy.”20
Transformational leaders also convey the vision using verbal and nonverbal communication
practices that show humility, sincerity, and a level of passion that reflects their personal belief in the
vision and their optimism that employees can succeed. They strengthen team-orientation and employee
self-efficacy by referring to the team’s strengths and potential. By focusing on shared experiences
and the central role of employees in achievement of the vision, transformational leaders suppress
leader-follower differences, deflect attention from themselves, and avoid any image of superiority over
the team.21
MODEL THE VISION
Transformational leaders not only talk about a vision; they enact it. They “walk the talk” by stepping
outside the executive suite and doing things that symbol ize the vision22 Leaders model the vision
through significant events such a~ visiting customers, moving their off ices closer to (or further from)
employees, and holding ceremonies to symbolize significant change. However, they also enact the
vision by ensuring that the more mundane daily activities-meeting agendas, dress codes, executive
schedules-are consistent with the vision and its underlying values.
Modelling the vision is important because it legitimizes and demonstrates what the vision looks
like in practice. Modelling is also important because it builds employee trust in the leader. The greater
the consistency between the leader’s words and actions, the more employees will believe in and be
motivated to follow the leader. As Ceridian CEO David Ossip, profiled at the beginning of this chapter,
explains, “When employees are able to see their leadership live by the values that guide them, it helps to
establish a sense of organizational trust and credibility.” These views are echoed by Mike Perl is, presi-
dent and chief executive officer of Forbes Media. “Great leaders walk the talk,” says Perl is. “They lead
by example. There isn’t anything they ask people to do they ‘re not wi lling to do themselves.”23 Consis-
tent with these comments, surveys report that “leading by example” is the most important attr ibute of
effective leaders and is one of the most important characteristics of a company’s culture.24
ENCOURAGE EXPERIMENTATION
Transformational leadership is about change, and central to any change is discovering new behaviours
and practices that are better al igned with the desired vision. Transformational leaders support this
journey by encouraging employees to question current practices and to experiment with new ways that

Chapter Twelve Leadership in Organizational Settings 34 1
are potentially more consistent with the vis ion’s future state .25 In other words, transformational leaders
support a learning orientation (see Chapter 7). They encourage employees to continuously question the
way things are currently done, actively experiment with new ideas and practices, and view reasonable
mistakes as a natural part of the learning process. 26
BUILD COMMITMENT TOWARD THE VISION
Transforming a vision into reality requires employee commitment, and transformational leaders build
this commitment in several waysP Their words, symbols, and stories build a contagious enthusiasm
that energizes people to adopt the vision as their own. Leaders demonstrate a “can do” attitude by
enacting and behaving consistently with their vis ion. This persistence and consistency reflect an image
Vancouver’s reputation as one of the world’s most livable ci ties is due in large part to the
transformational leadership of the late Art Ph illips and other members of his civic party in
the early 19 70s. “The improvements in quality of life, living downtown, waterfront walks, and
protecting neighbourhoods are all the results of Art Phillips’ leadership,” says Gordon Campbell,
who has served as both British Columbia’s premier and Vancouver’s mayor. Current B.C. premier
Christy Clark applauds Phillips as “a transformational leader who helped make one of Canada’s
great cities the envy of the world.”
Phillips was one of Canada’s most successful investment analysts when he was drawn into
civic politics by city plans to create an American-style concrete jungle in Vancouver’s downtown.
“He felt Vancouver was at a crucial turning point, headed in the wrong direction,” recalls Carole
Taylor, Phillips’ wife and a distinguished journalist and politician. “Art could see what had to be
done to create the fut ure.”
“Instead of being dead at night, we wanted the downtown core to be more European, a place
to live and enjoy,” said Phillips two decades later about this v ision of Vancouver’s future. “It was
all about doing things differently. It was about bringing people in, not throwing them out, and
making the city a place to enjoy, where people wanted to live.” With this vision in mind, Phillips
was elected to city council and later became mayor. Over the following years, Phillips and his civic
party transformed Vancouver into the enviable urban environment it is today28
0 George OiackNancouver Sun

34 2 Part Three Team Processes
of honesty, trust, and integrity. By encouraging experimentation, leaders involve employees in the
change process so it is a collective activity. Leaders also build commitment through rewards, recogni-
tion, and celebrations as employees pass milestones along the road to the desired vision.
TRANSFORMATIONAL LEADERSHIP AND CHARISMA
Some experts believe that charisma is an element of transformational leadership. They describe charis-
matic leadership either as an essential ingredient of transformational leadership or as transformational
leadership in its highest form of excellence.29 However, the emerging view, which this book adopts,
is that charisma is distinct from transformational leadership. Charisma is a personal trait or relational
quality that provides referent power over followers, whereas transformational leadership is a set of
behaviours that engage followers toward a better future. 30
Transformational leadership motivates followers through behaviours that persuade and earn trust,
whereas charismatic leadership motivates followers directly through the leader’s inherent referent power.
For instance, communicating an inspiring vision is a transformational leadership behaviour that motivates
followers to strive for that vision. This motivational effect exists separately from the leader’s charismatic
appeal. If the leader is highly charismatic, however, his or her charisma will amplify follower motivation.
Being charismatic is not inherently good or bad, but several research studies have concluded that
charismatic leaders can produce negative consequencesY One concern with charismatic leadership is
that it tends to produce dependent followers. Transformational leadership has the opposite effect-it
builds follower empowerment, which tends to reduce dependence on the leader.
Another concern is that leaders who possess the gift of charisma may become intoxicated by this
power, which leads to a greater focus on self-interest than on the common good. “Charisma becomes
the undoing of leaders,” warned Peter Drucker many years ago. “It makes them inflexible, convinced of
their own infallibility, unable to change.’o32 The late management guru witnessed the destructive effects
of charismatic political leaders in Europe a century ago and foresaw that this personal or relational char-
acteristic would create similar problems for organizations. The main point here is that transformational
leaders are not necessarily charismatic, and charismatic leaders are not necessarily transformational.
What are your transformational leadership tendencies? You can discover your
level of transformational leadership on each dimension by completing this
self-assessment in Connect.
EVALUATING THE TRANSFORMATIONAL LEADERSHIP PERSPECTIVE
Transformational leaders do make a difference.33 Subordinates are more satisfied and have higher affec-
tive organizational commitment under transformational leaders. They also perform their jobs better,
engage in more organizational citizenship behaviours, and make better or more creative decisions. One
study of Canadian bank branches reported that organizational commitment and financial performance
increased where the branch manager completed a transformational leadership training program.34
Transformational leadership is currently the most popular leadership perspective, but it faces a munber of
challenges.35 One problem is that some models engage in circular logic. They define and mea~ttre transfor-
mational leadership by it~ effects on employees (e.g., inspire employees), then (not surprisingly) report that
this leadership is effective because it inspires employees. Instead, transformational leadership needs to be
defined purely a~ a set of behaviours that people use to lead others through the change process. A second con-
cern is that some transformational leadership theories combine leader behaviours with the leader’s personal
characteristics. For instance, transformational leaders are described as visionary, imaginative, sensitive, and
thoughtful, yet these personal characteristics are really predictors of transformational leadership behaviours.
A third concern is that transformational leadership is usually described a~ a universal concept, that
is, it should be appl ied in all situations. Only a few studies have investigated whether this form of

Chapter Twelve Leadership in Organizational Settings 34 3
leadership is more valuable in some situations than others.36 For instance, transformational leadership
is probably more appropriate when organizations need to continuously adapt to a rapidly changing
external environment than when the environment is stable. Preliminary evidence suggests that the
transformational leadership perspective is relevant across cultures. However, there may be specific ele-
ments of transformational leadership, such as the way visions are communicated and modelled, that are
more appropriate in North America than in other cultures.
Managerial Leadership Perspective
Leaders don’t spend all (or even most) of their time transforming the organization or work
unit. They also engage in managerial leadershi~aily activities that support and guide
the performance and well-being of individual employees and the work unit toward current
objectives and practices. Leadership experts recognize that leading (transformational leadership) differs
from managing (managerial leadership)37 Although the distinction between these two perspectives remains
somewhat fuzzy, each cluster has a reasonably clear set of activities and a strong research foundation.
One distinction between these two perspectives is that managerial leadership a~sumes the organiza-
tion’s (or department’s) objectives are stable and aligned with the external environment.38 It focuses on
continuously developing or maintaining the effectiveness of employees and work units toward those
establ ished objectives and practices. In contrast, transformational leadership assumes the organization
is misal igned with its environment and therefore needs to change its direction. This distinction is cap-
tured in the often-cited statement: “Managers are people who do things right and leaders are people
who do the right thing.”39 Managers “do things right” (practise managerial leadership behaviours) by
enabling employees to perform established goals more effectively. Leaders “do the right thing” (prac-
tise transformational leadership behaviours) by changing the organization or work unit so its objectives
are aligned more closely with the external environment.
A second distinction is that managerial leadership is more micro-focused and concrete, because it
relates to the specific performance and well-being objectives of individual employees and the immedi-
ate work unit. Transformational leadership is more macro-focused and abstract. It is directed toward an
abstract strategic vision for an entire organization, department, or team.
TRANSFORMATIONAL AND MANAGERIAL LEADERSHIP
INTERDEPENDENCE
Although transformational and managerial leadership are discussed as two leadership perspectives, they
are better described as interdependent perspectives.40 In other words, transformational leadership and
managerial leadership depend on each other. Transformational leadership identifies, communicates,
and bui lds commitment to a better future for the organization or work unit. But these transformational
leadership behaviours are not enough for organizational success. That success also requires managerial
leadership to translate the abstract vision into more specific operational behaviours and practices, and to
continuously improve employee performance and well-being in the pursuit of that funtre ideal.
Managerial leadership also depends on transformational leadership to set the right direction. Otherwise,
managers might produce operational excellence toward goals that are misaligned with the organization’s
long-term survival. For instance, the leaders at Dell Inc. relied on managerial excellence to produce low-
cost computers, yet the company subsequently suffered because the external environment shifted toward
higher-priced, innovative products.41 Excellent managerial leadership wa~ not enough to make Dell suc-
cessful. The company also needed transformational leadership to develop a vision that aligned the com-
pany’s products more closely with the changing marketplace and inspired employees toward that vision.
As you might expect, senior executives require more transformational leadership behaviour than
do managers further down the hierarchy, likely because transformational leadership requires more
discretion to enable macro-level change. However, managerial and transformational leadership are

344 Part Three Team Processes
EXHIBIT 12.2 Task- and People-Oriented Leadership Styles
laden-IIIIIIDrll ted …….. .. laden-pellllll Drl l I ll …….. . .
A’isign work and clarify responsibilities Show interest in others as people
Set goals and deadline.< Listen to employees Evaluate and provide feedback on work quality Make the workplace more pleasant E.tal
Service and State of Iowa are trying to achieve. (USPS currently exceeds its gool ) The State of Texas number i…:; the Span of contrOl mandated by law.
The Best U.S. Plants number i…:; the 3:\’erag.e Spa.n of control in Ameriean manufacturing faci lities identified by Industry We-ek magazine a..:; the rtl0$1
effective. “‘Actual” refers to the Span..:; of contrOl reported in the cities of Phoenix. Portland. and Toronto. the pubJjc sen•ice of the U.S. states of Oregon
and Iowa. BowJjng Green UnjverS:ily. the Toronto Trans..it Commiss:ioo. and Fed.Ex Corporatioo in the years indicated The Ci1y of Toronto number
excludes r uefighter.> :md parks.. which have unusually high spans of conLrOI. When these Wlits are included. Toronto’s Span of conLrOI i…:; 163.
ranging from project specialists to sales support staff, report directly to Amy Geiger, director of sales
operations at Sunrise Identity. “Amy is a big proponent of Jetting her employees be self-led,” says one
of Geiger’s direct reports at the Bellevue, Washington, marketing and merchandising agency. “She is
against micromanaging and wants her employees to grow from their own learned experiences.”22
A second factor influencing the best span of control is whether employees perfonn routine ta~ks.
A wider span of control is possible when employees perform routine jobs, because they require Jess
direction or advice from supervisors. A narrow span of control is necessary when employees perform
novel or complex tasks, because these employees tend to require more supervisory decisions and coach-
ing. This principle is illustrated in a survey of property and ca~ualty insurers. The average span of control
in commercial-policy processing departments is around 15 employees per supervisor, whereas the span
of control is 6.1 in claims service and 5.5 in commercial underwriting. Staff members in the latter two
departments perfonn more technical work, so they have more novel and complex tasks, which requires
more supervisor involvement. Commercial-policy processing, on the other hand, is like production work.
Tasks are routine and have few exceptions, so managers have Jess coordinating with each employee.23
A third influence on span of control is the degree of interdependence among employees within
the department or team.24 General ly, a narrow span of control is necessary for highly interdependent
jobs because employees tend to experience more conflict with each other, which requires more of a
manager’s time to resolve. Also, employees are less clear on their personal work perfonnance in highly
interdependent tasks, so supervisors spend more time providing coaching and feedback.
Tall versus Flat Structures Span of control is interconnected with organizational size (number
of employees) and the number of layers in the organizational hierarchy. Consider two companies with
the same number of employees. If Company A ha~ a wider span of control (more direct reports per
manager) than Company B, then Company A necessarily ha~ fewer layers of management (i.e., a flatter

Chapter Thirteen Designing Organizational Structures 369
Global Connections 13.1:
BBC FURTHER FLATTENS THE HIERARCHY
The British Broadcasting Corporation (BBC) has one of the lowest overhead costs among public-
sector and regulated companies in the U.K. Overhead (management and administration)
represents less than 8 percent of total costs. Yet, with declining television license fee income,
the BBC is further reducing management numbers and flattening the corporate hierarchy.
“In some places there are currently 10 layers of people and management and this will be cut
to a maximum of seven in the future,” advises BBC Director-General Tony Hall.
Lord Hall warns that, in addition to being a source of overhead costs, hierarchy “slows down
decision making.” He suggests that reducing management layers will improve the BBC because
the organization excels with “as few barriers as possible to creativity, allowing people, teams
and ideas to come together to do their best work. It is not one which allows bureaucracy,
layers, and box-ticking to get in the way25
The British Broadcasting Corporation is reducing the number of management levels to reduce
costs, improve employee creativity, and allow more nimble decision making.
©Vibrant Pictures/Aiamy Stock Photo
structure). The reason for this relationship is that a company with a wider span of control ha~ more
employees per supervisor, more supervisors for each middle manager, and so on. This larger number of
direct reports, compared to a company with a narrower span of control, is possible only by removing
layers of management.
The interconnection of span of control, organizational size (number of employees), and number of
management layers ha~ important implications for companies. As organizations grow, they typically
employ more people, which means they must widen the span of control, build a taller hierarchy, or both.

370 Part Four Organizational Processes
Most companies end up building taller structures because they rely on direct supervision to some extent
as a coordinating mechanism and there are limits to how many people each manager can coordinate.
Unfortunately, building a tal ler hierarchy (more layers of management) creates problems. One
concern is that executives in tall structures tend to receive lower-quality and less timely information.
People tend to filter, distort, and simpl ify information before it is passed to higher levels in the hier-
archy because they are motivated to frame the information in a positive light or to summarize it more
efficiently. In contrast, information receives less manipulation in flat hierarchies, and is often received
much more quickly than in tall hierarchies. “Any new idea condemned to struggle upward through mul-
tiple levels of r igidly hierarchical, r isk averse management is an idea that won’t see dayl ight … unti l
it’s too late,” warns Sergio Marchionne, the Canadian-Ital ian CEO of Fiat Chrysler Automobiles.26
A second problem is that taller structures have higher overhead costs. With more managers per
employee, tall hierarchies necessarily have more people administering the company, thereby reducing the
percentage of staff who are actually making the product or providing the service. A third issue with tall
hierarchies is that employees usually feel less empowered and engaged in their work. Hierarchies are power
strucntres, so more levels of hierarchy tend to draw away power from people at the bottom of that hierarchy.
Indeed, the size of the hierarchy itself tends to focus power around managers rather than employees. r7
These problems have prompted companies to remove one or more levels in the organizational hier-
archy.28 KenGen had more than 15 layers of hierarchy a few years ago. Today, the 1,500 employees
at Kenya’s leading electricity generation company are organized in a hierarchy with only six layers.
Sandvik also “delayered,” reducing its hierarchy from 13 layers between the CEO and the most junior
employee to only seven layers.29 Although flattening the hierarchy has advantages, critics warn that it
can also lead to problems.
~ Debating Point:
*uP SHOULD ORGANIZATIONS CUT BACK MIDDLE MANAGEMENT?
Business leaders face the ongoing challenge of preventing their organization from balloon-
ing into a fat bureaucracy with too many layers of middle managers. Indeed, it has become
a mantra for incoming CEOs to gallantly state they will “delayer” or “flatten” the corporate
hierarchy, usually as part of a larger mandate to “empower” the workforce.
As we describe in this chapter, there are several valid arguments for minimizing the corpo-
rate hierarchy, particularly by cutting back middle management. As companies employ more
managers, they increase overhead costs and have a lower percentage of people actually gen-
erating revenue by making products or providing services. A taller hierarchy also undermines
effective communication between the top executive team and front-line staff- who are usually
the first to receive valuable knowledge about the external environment. Middle managers
have a tendency to distort, simplify, and filter information as it passes from them to higher
authorities in the company. A third reason for cutting back middle management is that they
absorb organizational power. As companies add more layers, they remove more power that
might have been assigned directly to front-line employees. In other words, tall hierarchies
potentially undermine employee empowerment.
These concerns seem logical, but slashing the hierarchy can have several unexpected con-
sequences that outweigh any benefits. In fact, a growing chorus of management experts warns
that cutting out too much middle management has several negative long-term consequences.30
Critics of delayering point out that all companies need managers to translate corporate
strategy into coherent daily operations. “Middle managers are the link between your mission
and execution; advises a senior hospital executive. “They turn our strategy into action and get
everyone on the same page.”31 Furthermore, managers are needed to make quick decisions,
coach employees, and help resolve conflicts. These valuable functions are underserved when
the span of control becomes too wide.

Chapter Thirteen Designing Organizational Structures 371
Delayering increases the number of direct reports per manager and thus significantly increases
management workload and corresponding levels of stress. Managers partly reduce the workload
by learning to give subordinates more autonomy rather than micromanaging them. However, this
role adjustment itself is stressful (same responsibility, but less authority or control). Companies often
increase the span of control beyond the point at which many managers are capable of coaching or
leading their direct reports.
A third concern is that delayering results in fewer managerial jobs, so companies have less
manoeuvrability to develop managerial skills. Promotions are also riskier because they involve a
larger jump in responsibility in flatter, compared to taller, hierarchies. Furthermore, having fewer pro-
motion opportunities means that managers experience more career plateauing, which reduces their
motivation and loyalty. Chopping back managerial career structures also sends a signal that manag-
ers are no longer valued. “Delayering has had an adverse effect on morale, productivity and per-
formance; argues a senior government executive. “Disenfranchising middle management creates
negative perceptions and lower commitment to the organization with consequent reluctance to
accept responsibility.”32
CENTRALIZATION AND DECENTRALIZATION
Centralization means that formal decision-making authority is held by a small group of people, typi-
cally those at the top of the organizational hierarchy. Most organi zations begin with centralized struc-
tures, as the founder makes most of the decisions and tries to direct the business toward his or her vision.
As organi zations grow, however, they diversify and their environments become more complex. Senior
executi ves aren’t able to process all the decisions that significantly influence the business. Conse-
quently, larger organizations typically decentralize; that is, they disperse decision authority and power
throughout the organization.
The optimal level of centralization or decentralization depend~ on several contingencies that we will
examine later in this chapter. However, different degrees of decentralization can occur simultaneously in
different part~ of an organization. For instance, 7 -Eleven centralizes decisions about information technology
and supplier purchasing to improve buying power, increa~ cost efficiencies, and minimize complexity across
the organization. Yet it decentralizes local inventory decisions to store managers because they have the best
information about their customers and can respond quickly to local market needs. “We could never predict
a bus load of football players on a Friday night, but the store manager can,” explains a 7 -Eleven executive.33
FORMALIZATION
Formalization is the degree to which organi zations standardize behaviour through rules, procedures,
formal training, and related mechanisms?4 ln other words, companies become more formal ized as they
increasingly rely on various forms of standardization to coordinate work. McDonald’s Restaurants and
most other efficient fa~t-food chains typically have a high degree of formal ization because they rely
on standardization of work processes as a coordinating mechanism. Employees have precisely defined
roles, right down to how much mustard should be dispensed, how many pickles should be appl ied, and
how long each hamburger should be cooked.
Older companies tend to be more formal i zed because work acti viti es become routinized, making
them easier to document into standardized practi ces. Larger companies also tend to have more for-
mal ization because direct supervi sion and informal communication among employees do not operate
as easily when large numbers of people are involved. External influences, such as government safety
legislation and strict accounting rules, also encourage formal ization.
Formalization may increase efficiency and compliance, but it can also create problems.35 Rules and
procedures reduce organizational flexibili ty, so employees follow prescribed behaviours even when the
situation clearly calls for a customized response. High levels of formalization tend to undermine orga-
nizational learning and creativity. Some work rules become so convoluted that organizational efficiency
would decl ine i f they were actually followed as prescribed. Formalizati on is al so a source of job

372 Part Four Organizational Processes
dissatisfaction and work stress. Finally, rules and procedures have been known to take on a life of their
own in some organizations. They become the focus of attention rather than the organization’s ultimate
objectives of producing a product or service and serving its dominant stakeholders.
MECHANISTIC VERSUS ORGANIC STRUCTURES
We discussed span of control, centralization, and formal ization together because they cluster around
two broader organizational forms: mechanistic and organic structures (see Exhibit 13.3).36 A mecha-
nistic structure is characterized by a narrow span of control and high degree of formalization and cen-
tralization. Mechanistic structures have many rules and procedures, limited decision making at lower
levels, tal l hierarchies of people in specialized roles, and vertical rather than horizontal communication
flows. Tasks are rigidly defined and are altered only when sanctioned by higher authorities. Although
now changing its structure, Samsung has traditionally had a mechanistic structure, which is apparent
by the Korean firm ‘s central ized decision making, clearly-defined job descriptions, and work activities
heavily guided by established rules and procedures.
Companies with an organic structure have the opposite characteristics. They operate with a wide span
of control, decentralized decision making, and little formalization. Ta~ks are fluid, adj usting to new situa-
tions and organizational needs. In extremely organic organizations, decision making is decentralized down
to teams and individuals, and employees have enough autonomy to adapt their job duties to fit the situation.
As a general rule, mechanistic structures operate better in stable environments because they rely on effi-
ciency and routine behaviours. Organic structures work better in rapidly changing (i.e., dynamic) environment~
because they are more flexible and responsive to the changes. Organic strucnrres are also more compatible
with organizational teaming and high-performance workplaces because they emphasize information sharing
and an empowered workforce rather than hierarchy and stants37 However, the effectiveness of organic struc-
tures depends on how weU employees have developed their roles and expertise.38 Without these conditions,
employees are unable to coordinate effectively with each other, resulting in errors and gross inefficiencies.
Which organizational structure do you prefer? You can discover which organizational
structure is most comfortable for you by completing this self-assessment in Connect.
EXHIBIT 13.3 Contrasting Mechanistic and Organic Organizat ional Structures
Mechanistic Structure
Narrow span of control
High centralization
High formalization
left: ComsLock lmages/Alamy: Tight: Steven P. Lynch/McGraw-Hill Companies
Organic Structure
Wide span of control
High decentralization
low formalization

Chapter Thirteen Designing Organizational Structures 373
Forms of Departmentalization
Span of control, centralization, and formalization are important elements of organiza-
tional structure, but most people think about organizational charts when the discussion
of organizational structure arises. The organizational chart represents the fourth element
in the structuring of organizations, called departmentaliztaion. Departmentalization specifies how
employees and their activities are grouped together. It is a fundamental strategy for coordinating orga-
nizational activities because it influences organizational behaviour in the followi ng ways:39
Departmentalization establishes the chain of command-the system of common supervision
among positions and units within the organization. It frames the membership of formal work
teams and typically determines which positions and units must share resources. Thus, depart-
mentalization establ ishes interdependencies among employees and subunits.
Departmentalization focuses people around common mental models or ways of thinking, such as
serving clients, developing products, or supporting a particular skill set. This focus is typically
anchored around the common budgets and mea~ures of performance assigned to employees
within each departmental unit.
Departmentalization encourages specific people and work units to coordinate through informal
communication. With common supervision and resources, members within each configuration typi-
cally work near each other, so they can use frequent and informal interaction to get the work done.
There are almost as many organizational charts as there are businesses, but the s ix most common
pure types of departmentalization are simple, functional, divisional, team-based, matrix, and network.
SIMPLE STRUCTURE
Most companies begin with a simple structure. 40 They employ only a few people and typically offer
only one distinct product or service. There is minimal hierarchy-usually just employees reporting to
the owners. Employees perform broadly defined roles because there are insufficient economies of scale
to assign them to specialized j obs. The simple structure is highly flexible and minimizes the walls that
form between work units in other structures. However, the s imple structure usually depends on the
owner’s direct supervision to coordinate work activities, so it is very difficult to operate as the com-
pany grows and becomes more complex.
FUNCTIONAL STRUCTURE
As organizations grow, they typically shift from a simple structure to a functional structure. Even after
they adopt more complex organizational structures (which we discuss later), they wi ll have a functional
structure at some level of the hierarchy. A functional structure organizes employees around specific
knowledge or other resources (see Exhibit 13.4). Employees with marketing expertise are grouped into
EXHIBIT 13.4 A Functional Organizational Structure
Chief Executive
Design Administration Marketing

374 Part Four Organizational Processes
Chapman’s Ice Cream Limited had a classic simple organizational structu re when David and
Penny Chapman started their business back in 1973. The couple and four employees performed
all t he work in a century-old creamery located in the village of Markdale, Ontario. ·we did
everything,” recalls company president Penny Chapman (centre in photo with David at right and
son Ashley with several employees). “We made the mixes, built the packages. we worked in cold
storage .. . David went out on the road to do sales.”
Chapman’s grew quickly by offering unique ice cream flavours. The work was eventually divided
into more specialized tasks and a functional structure emerged around production, marketing,
research, and other d epartments. Today, Chapman’s is Canada’s largest independent ice cream
manufacturer, employing 500 people and producing more than 200 products on 20 production
lines. The company is also a global award winner for innovation in ice cream products. 41
Courtesy of David Chapman’s Ice Cream
a marketing unit, those with production skills are located in manufacturing, engineers are found in
product development, and so on. Organizations with functional structures are typical ly central ized to
coordinate their activities effectively.
Evaluating the Functional Structure The functional strucntre creates specialized pools of tal-
ent that typically serve everyone in the organization. Pooling talent into one group improves economies
of scale compared to dispersing functional specialists over different parts of the organization. The func-
tional structure also increa~es employee identity with the specialization or profession. Direct supervision
is easier in functional structures because managers oversee people with common issues and expertise.42
The functional structure also has limitations.43 Grouping employees around their ski lls tends to
focus attention on those ski lls and related professional needs rather than on the company’s product, ser-
vice, or client needs. Unless people are rotated through several functional unit~ over time, they might
not develop a broader understanding of the business. Compared with other structures, the functional
structure usually produces more dysfunctional conflict and poorer coordination in serving clients or
developing products. These problems occur because employees need to work with co-workers in other
departments to complete organizational tasks, yet they have different subgoals and mental models
about how to perform the work effectively. Together, these problems require substantial formal con-
trols and coordination when people are organized around functions.
DIVISIONAL STRUCTURE
The divisional structure (sometimes cal led the multidivisional or M-form strucntre) groups employees
around geographic areas, outputs (products or services), or clients. Exhibit 13.5 illustrates these three

Chapter Thirteen Designing O rgan izational Structures 375
variations of divisional structure.44 The geographic divisional structure organizes employees around
distinct regions of the country or world. Exhibit 13.5 (a) illustrates a simpl ified version of the geo-
graphic divisional structure adopted by Kone, the Finland-ba~ed global elevator and escalator company.
The product/service divisional structure organizes employees around distinct outputs. Exhibit 13.5 (b)
illustrates the four product divisions at Danone, the France-based global food company. The client
divisional structure organizes employees around specific customer groups. Exhibit 13.5 (c) illustrates a
customer-focused divis ional structure similar to one adopted by the Bank of Montrea1.45
Which form of divisional structure should large organizations adopt? The answer depends mainly on
the primary source of environmental diversity or uncertainty.46 Suppose an organization has one type of
product sold to people across the country. If customers have different needs across regions, or if provin-
cial governments impose different regulations on the product, then a geographic structure would be best
to be more vigilant of this diversity. On the other hand, if the company sells several types of products
across the country and customer preferences and government regulations are s imi lar everywhere, then a
product structure would likely work best.
Kone, the global elevator and escalator company, is organized mainly around geographic regions,
likely because regulations and sales channels vary much more by region than by product. McDonald’s
is organized into several geographic divisions (high growth, established, franchised) and is further
organized by specific countries or zones within each of these divisions. This geographic organization
makes sense because even though it makes the same Big Mac throughout the world, McDonald’s has
more fish products in Hong Kong and more vegetarian products in India, in line with traditional diets
EXHIBIT 13.5 Three Types of Divisional Structure
(a) Geographic Div isional Structure
Americas
Greater
China
(b) Product Divisional Structure
Fresh Dairy
Products
(c) Client Divisional Structure
Chief Executive
Officer
Asia-Pacific
Chief Executive
Officer
Central &
North Europe
Waters
Early Life
Nutrition
Medical
Nutrition
Chief Executive
Officer
Africa
Not~: Diagram (a) shows a global geographic djvi…:;ional structure similar to Kone CorpOration: diagram (b) depict..:; the four product djvi…:;ions of
Danone: diagram (e) is similar to the customer-focused srructme at the Bank of Mont.real.

376 Part Four Organizational Processes
in those countries. Danone has dozens of country managers to anticipate and respond to cultural differ-
ences. However, the French dairy products maker places product groups (waters, dairy, medical, early
life) at the top of its organizational structure, possibly because marketing and manufacturing activities
vary much more across product divisions than across regions.
Many companies are moving away from structures that organize people around geographic clus-
ters.47 One reason is that clients can purchase products online and communicate with businesses from
almost anywhere in the world, so local representation is becoming less important. Reduced geographic
variation is another reason for the shift away from geographic structures; freer trade has reduced gov-
ernment intervention, and consumer preferences for many products and services are becoming more
similar (converging) around the world. The third reason is that large companies increasingly have global
business customers who demand one global point of purchase, not one in every country or region.
Global Connections 13.2:
TOYOTA’S EVOLVING DIVISIONAL STRUCTURE
Toyota Motor Company was recently fined $1.2 billion by the U.S. government, the largest
penalty ever against an automaker, because it “misled regulators, misled customers, and even
misstated the facts to Congress,” regard ing safety issues with its accelerator pedals. The
Japanese company’s safety processes and reporting procedures in the United States were
subsequently monitored for three years. How cou ld one of the largest and most respected
automakers in the world get into this situation? A panel of independent experts commis-
sioned by Toyota identified several issues ranging from supplier product quality to business
A panel of independent experts concluded that Toyota Motor Company should replace its
functional structure with a geographic divisional structure to increase sensitivity to potential
problems within each region where it does business.
©PA lmages/Aiamy Stock Photo

Chapter Thirteen Designing Organizational Structures 377
processes. However, its main conclusion was that Toyota’s functional organizational structure
was inappropriate for the global organization.
Toyota’s functional structure created silos around each specialization (sales, engineering,
manufacturing), which transmitted information selectively to headquarters in Japan. The result
was that most decisions were made by executives in Japan with limited knowledge about
practices and problems in specific regions. Based on that review, Toyota added two regional
divisions (essentially dividing the world into two groups) to the existing functional structure.
“Dealing with our overseas operations on a regional basis, rather than a functional basis, will
enable us to conduct decision making on a more comprehensive basis,” said Toyota CEO
Akio Toyoda when announcing the updated structure.
Toyota’s revised organizational structure lasted only two years. Faced with rapid techno-
logical change and increasing competition, the automaker recently announced a massive
reorganization that divides the company into several vehicle product groups, such as compact
cars and commercial vehicles, as well as functional areas (power train and connected technology).
Appended to the new divisional product structure are the two regional groups. “This structural
change may not be the ultimate solution, but it is certainly an opportunity . .. to strengthen our
workforce and further promote making ever-better cars,” says Toyoda.48
Evaluating the Divisional Structure The di vi sional organizational structure i s a building-
block structure. As the company develops new products, services, or cl ients, it can sprout new divi-
sions relatively easily. This structure also directs employee attention to customers and products, rather
than to their own speciali zed knowledge.49
These advantages are offset by a number of l imitations. First, the divisional structure tends to dupl i-
cate resources, such as production equipment and engineer ing or information technology experti se.
Also, unless the division is quite large, resources are not used as efficiently a~ they are in functional
structures where resources are pooled across the entire organization. The divisional strucntre also cre-
ates silos of knowledge. Expertise is spread across several autonomous business units, and this reduces
the ability and perhaps moti vation of the people in one division to share their knowledge w ith counter-
parts in other di visions. I n contrast, a functional structure groups experts together, thereby supporting
knowledge sharing within areas of expertise.
Finally, the preferred divisional structure depends on the company’s primary source of environmen-
tal diversity or uncertainty. This principle seems to be applied easi ly enough at Kone and McDonald’s,
but many global organizations experience di versity and uncertainty in terms of geography, product,
and clients. Consequently, some organizations revise their structures back and forth or create complex
structures that attempt to give all three dimensions equal status. This waffling generates further com-
pl ications, because organizational structure decisions shift power and status among executives. If the
company switches from a geographic to product structure, people who lead the geographic f iefdoms
suddenly get demoted under the product chiefs. I n short, leaders of global organizations struggle to
f ind the best divisional structure, often resulting in the departure of some executives and frustration
among those who remain.
TEAM-BASED STRUCTURE
TAXI has produced some of Canada’s most memorable ads, such a~ Canadian T ire’s ” ice truck” com-
mercial and the cute critters that populate the Telus ads and websi te. The Toronto-ba~ed creati ve
agency fuels this creati ve energy through a team-based structure. “We bel ieve a small team of bright
people, about as many a~ can fit into a cab, should drive every piece of business,” says TA XI’s web-
site. TA XI’s team-based structure contrasts w ith the rigid functional structures found at many creati ve
agencies. “[Other advertising firms] operated on a 19th-century model of many secular departments

378 Part Four Organizational Processes
trying to integrate everything ad hoc,” explains TAXI co-founder Paul Lavoie. “We needed a flexible
infrastructure, able to move with the pace of change.”50
TAXI relies heavily on a team-based organizational structure. A team-based structure is built around
self-directed teams that complete an entire piece of work, such a~ manufacturing a product or developing
an advertising campaign. This type of structure is usually organic. There is a wide span of control because
teams operate with minimal supervision. In extreme situations, team-ba~ed strucntres have no formal leader,
just someone selected by other team members to help coordinate the work and liaise with top management.
Team structures are highly decentralized because almost al l day-to-day decisions are made by team
members rather than someone further up the organizational hierarchy. Many team-based structures
also have low formalization because teams are given relatively few rules about how to organize their
work. Instead, executives assign qual ity and quantity output targets and often productivity improve-
ment goals to each team. Teams are then encouraged to use avai lable resources and their own initiative
to achieve those objectives .
Team-based structures are usually found within the manufacturing or service operations of larger
divisional structures. Several GE aircraft engines plants are organized as team-based structures, but
these plants operate within GE’s larger divis ional structure. However, a smal l number of firms apply
Valve Corporation has the u ltimate team-based organizational structure. Employees at the software and
entertainment company in the U.S. state of Washing ton organize themselves into self-directed teams.
There are no bosses or departments to determine what tasks employees perform or even which
projects they should work on. Instead, everyone figures out where their talents are best needed and
moves to that team. “There is no organizational structure keeping you from being in close proximity to
the people who you’d help or be helped by most,” says Valve’s quirky handbook for new employees.
Each team agrees on its goals, deadlines, work rules, task assignments, and other issues. The
team has a lead member who provides coordination, but that lead member is not a traditional
manager. Proj ect ro les are determined th rough mutual agreement; pay is ca lculated from peer
evaluations of each employee’s contribution to Valve.
Contrary to what you might think, Valve isn’t a startup with a handful of people. It’s a multi-b illion
dollar company employing more than 300 engineers, artists, and other professionals. Yet for almost two
decades, Valve’s seemingly chaotic structure has suppressed bureaucracy and empowered employees
to discover and produce innovative products. “Hierarchy is great for maintaining predictability and
repeatability,” says Valve’s employee handbook. “But when you’re an entertainment company that’s
spent the last decade going out of its way to recruit the most intelligent, innovative, talented people on
Earth, telling them to sit at a desk and do what they’re told obliterates 99 percent of their value.·s •
Tim Eulitz/Wiklmedla

Chapter Thirteen Designing Organizational Structures 379
the team-based structure from top to bottom, including W. L. Gore & Associates, Semco SA, and Valve
Corporation, where almost all associates work in teams.
Evaluating the Team-Based Structure The team-ba~ structure has gained popularity because it
tends to be flexible and responsive in turbulent environment~. 52 It tends to reduce costs because teams have
Jess reliance on formal hierarchy (direct supervision). A cross-functional team structure improves commu-
nication and cooperation across traditional boundaries. With greater autonomy, this strucntre also allows
quicker and more informed decision making. 53 For this reason, some hospitals in Canada and elsewhere
have shifted from functional department~ to cross-functional teams. Teams composed of nurses, radiolo-
gists, anaesthetists, a pharmacology representative, possibly social workers, a rehabilitation therapist, and
other specialists communicate and coordinate more efficiently, thereby reducing delays and errors.54
The team-ba~ed strucntre also has several limitations. It can be costly to maintain due to the need for
ongoing interpersonal ski lls training. Teamwork potentially takes more time to coordinate than formal
hierarchy during the early stages of team development. Employees may experience more stress due to
increased ambiguity in their roles. Team leaders also experience more stress due to increa~ed conflict,
loss of functional power, and unclear career progression ladders. In addition, team structures suffer
from duplication of resources and potential competition (and Jack of resource sharing) across teams55
MATRIX STRUCTURE
ABB Group, one of the world’s largest power and automation technologies engineering firms, has four
product divisions, such as power grids and process automation. It employs more than 140,000 people
across 100 countries, so the global giant also has several regional groups (Americas, AMEA, and
Europe). What organizational structure would work best for ABB? For example, should the head of
power grids in North America report to the worldwide head of power grids in Zurich, Switzerland, or
to the head of the Americas operations?
For ABB, the answer is to have a matrix structure, which overlays two structures (in this ca.~e. a product
divisional and geographic divisional structure) to leverage the benefits of both.56 Exhibit 13.6 shows a
EXHIBIT 13.6 Matrix Organizational Structure at ABB Group
Product Groups
Americas 11
•
•
•
•
• Product leader In that region
Regional Groups
Asia, Mrddle East
Afnca (AMEA)
•
•
•
•
Europe ‘
•
•
•
•
Not~: This diagram i…:; for illustrative purposes only. It represent,.:; a simplified version or ABB’s most recent structure. The complete top-level
structure also ha..:: three nonmatri.’ed func-tional group..:; (finance. Jeg.al. HR) reporting to the CEO. ln addjtion. this diagram a..:;sumes ABB has a
pure matrix structure. in which both product and regional chiefs have equal pOwer. ABB says it continues to have a maLrix SLrUC-ture. but its recent
reorganizatjon seems LO gj\•e more direct line authority to product group..:; rather than regional groups.

380 Part Four Organizational Processes
product-geographic matrix structure, which is a simplified version of ABB’s strucnrre. The dots represent
the individuals (product leaders) who have two bosses. For example, the head of power grids in Europe
reports to ABB’s worldwide president of power grids as well as to ABB’s president of European operations.
A common mistake is to assume that everyone in this type of matrix organizational structure reports
to two bosses. In reality, only managers at one level in the organization (typically country-specific
product managers) have two bosses. ABB’s executive responsible for power grids in Europe reports to
both the product and regional leaders. However, employees below that country product leader report to
only one manager in the European operations.
The geographic-product matrix structure is likely the most common matrix design among global com-
panies. For instance, Nestle, Procter & Gamble, and Shell have variations of this matrix structure because
these fi rms recognize that regional groups and product/services groups are equally important. Other vari-
ations of matrix structures also exist in global businesses, however. Investment bank Macquarie Group
overlays client groups (such as securities, investment funds, and currencies/commodities) with four func-
tional groups (risk management, legal/governance, financial management, and corporate operations).57
Global organizations tend to have complex designs that combine different types of structures, so
a “pure” matrix design is relatively uncommon. A pure matrix gives equal power to leaders of both
groups (regions and products, for example), whereas in real ity companies often give more power to one
set of groups while the other set of groups has “dotted line” or advisory authority. So, although ABB’s
head of power grids has two bosses, the global president of power grids might have more final say or
line authority than the regional leader.
Some companies also deviate from the pure matrix structure by applying it only to some regions. One
such example is Cummins Inc., which is mainly organized around product divisions but has a matrix
structure in China, India, and Russia. These markets are large, have high growth potential, and tend to
be less visible to headquarters, so the country leaders are given as much authority as the product lead-
ers within those regions. ” I think in China there’s still enough lack of transparency, there’s still enough
uniqueness to the market that having some kind of coordination across business units gets the greatest syn-
ergies,” explains Michael Barbalas, a board member of the American Chamber of Commerce in China. 58
A second type of matrix structure, which can be applied to small or large companies, overlays a func-
tional structure with a project structure.59 Bioware adopted this project-functional matrix structure soon
after the Edmonton-ba~ed electronic games company wa~ born two decades ago. Most Bioware employees
have two managers. One manager leads the specific project to which employees are a~signed, such as Star
Wars, Mass Effect, and Dragon Age; the other manager is head of the employee’s functional specialization,
such as art, programming, audio, quality assurance, and design.60 Employees are assigned permanently to
their functional unit but physically work with the temporary project team. When the project nears comple-
tion, the functional boss reassigns employees in his or her functional specialization to another project.
Evaluating the Matrix Structure The project-functional matrix structure usually makes very
good use of resources and expertise, making it ideal for project-ba~ed organizations with fluctuat-
ing workloads. When properly managed, it improves communication efficiency, project flexibility,
and innovation, compared to purely functional or divisional designs. It focuses employees on serv-
ing cl ients or creating products yet keeps people organized around their specialization. The result is
that knowledge sharing improves and people are more efficiently assigned to work where they are
most needed. Matrix structures for large organizations are also a logical choice when two different
dimensions are equal ly important (such as regions and products at ABB Group). Structures determine
executive power and what should receive priority; the matrix structure works best when the business
environment is complex and two different dimensions deserve equal attention and integration. Execu-
tives who have worked in a global matrix also say they have more freedom, likely because their two
bosses are more advisory and less oriented toward command and control leadership.61
In spite of these advantages, the matrix structure has several well-known problems.62 One concern is
that it increa~es confl ict among managers who equally share power. Employees working at the matrix
level have two bosses and, consequently, two sets of priorities that aren’t always aligned with each other.
Project leaders might squabble with functional leaders regarding the a~signment of specific employees
to projects a~ well as regarding the employee’s technical competence. However, successful companies

Chapter Thirteen Designing Organizational Structures 381
manage this conflict by developing and promoting leaders who can work effectively in matrix struc-
tures. “Of course there’s potential for friction,” says an executive at IBM India. “In fact, one of the
prerequisites to attaining a leadership position at IBM is the ability to function in a matrix structure.”63
Ambiguous accountability is another challenge with matrix structures. In a functional or divi-
sional structure, one manager is responsible for everything, even the most unexpected issues. But in a
matrix structure, the unusual problems don’t get resolved because neither manager takes ownership of
them. 64 Due to this ambiguous accountability, matrix structures have been blamed for corporate ethical
misconduct, such as embezzlement at Hana Financial Group in Korea and massive bribery at Siemens AG
in Germany. Oracle co-CEO Mark Hurd warned of this problem when he was CEO of Hewlett-Packard:
“The more accountable I can make you, the easier it is for you to show you’re a great performer,”
says Hurd. “The more I use a matrix, the easier I make it to blame someone else.”65 The combination
~ “‘l Global Connections 13.3:
MATRIX STRUCTURE TROUBLES AT HANA FINANCIAL GROUP
Hana Financial Group reorganized around a matrix structure that overlaps its client businesses
(retail banking, brokerage, insurance) with product groups (money management, investments,
bonds, etc.). The Korean bank says the new structure has noticeably improved collaboration
across businesses and produced better financial results.
Korea’s financial supervisory service (FSS) has a different opinion of Hana’s structure. It claims
that Hana’s matrix structure is partly responsible for widespread embezzlement of gift certifi-
cates for tourists at about 60 bank branches. “In a matrix structure, marketing, performance
reviews, and the power to make decisions on personnel lies with the head of the business unit,
while internal control and risk management are the responsibility of the affiliated company’s
CEO,” explains a high-ranking FSS official. “This can lead to a blind spot in management.”66
OtLt2;tli.J
Hana Bank
The South Korean government concluded that the matrix structure at Hana Financial Group is
partly responsible for widespread embezzlement at dozens of bank branches.
© REUTERS I A la my Stock Photo

382 Part Four Organizational Processes
of dysfunctional conflict and ambiguous accountability in matrix structures also explains why some
employees experience more stress and some managers are Jess satisfied with their work arrangements.
NETWORK STRUCTURE
BMW AG and Daimler AG aren’t eager to Jet you know this, but some of their vehicles manufac-
tured by them with Germanic precision are not constructed by them or in Germany. Some of BMW’s
5 Series vehicles and all of Daimler’s Mercedes G class luxury SUVs are made in Austria by Magna
Steyr, a division of Canada’s Magna Corporation. Both BMW and Daimler Benz are hub organiza-
tions that own and market their respective brands, whereas Magna Steyr and other suppliers are spokes
around the hub that provide production, engineering, and other services that get the auto firms’ luxury
products to customers67
BMW, Daimler, and many other organizations are moving toward a network structure a~ they
design and build products or serve clients through an alliance of several organizations.68 As Exhibit 13.7
illustrates, this collaborative structure typically consists of several satellite organizations bee-hived
around a hub or core firm. The core firm orchestrates the network process and provides one or two
other core competencies, such as marketing or product development. In our example, BMW or Mer-
cedes is the hub that provides marketing and management, whereas other firms perform many other
functions. The core firm might be the main contact with customers, but most of the product or service
delivery and support activities are farmed out to satell ite organizations located anywhere in the world.
Extranets (Web-based networks with partners) and other technologies ensure that information flows
easily and openly between the core firm and its array of satell ites69
One of the main forces pushing toward a network structure is the recognition that an organization
has only a few core compelencies. A core competency is a knowledge base that resides throughout the
organization and provides a strategic advantage. As companies discover their core competency, they
outsource noncritical tasks to other organizations whose core competency is performing those tasks.
EXHIBIT 13.7 A Network Organizational Structure

Chapter Thirteen Designing Organizational Structures 383
For instance, BMW decided long ago that facilities management is not one of its core competen-
cies, so it outsourced this function in its British operations to a company that specializes in facilities
management70
Companies are also more likely to form network structures when technology is changing quickly
and production processes are complex or varied?’ Many firms cannot keep up with the hyperfast
changes in information technology, so they have outsourced their entire information system depart-
ments to IBM, HP Enterprise Business, and other firms that specialize in information system services.
Similarly, many high-technology firms form networks with Toronto-based Celestica and other elec-
tronic equipment manufacturers that have expertise in diverse production processes.
Evaluating the Network Structure Organizational behaviour theorists have long argued that
executives should think of their companies metaphorically a~ plasma-like organisms rather than rigid
machines72 Network structures come close to the organism metaphor because they offer the flex-
ibility to realign their structure with changing environmental requirements. If customers demand a
new product or service, the core firm forms new all iances with other firms offering the appropriate
resources. For example, by working with Magna Steyr, Jaguar Land Rover was recently able to launch
a wider variety of new models than was possible with its own manufacturing resources. When Magna
Steyr’s clients need a different type of manufacturing, they aren’t saddled with nonessential facilities
and resources. Network structures also offer efficiencies because the core firm becomes globally com-
petitive as it shops worldwide for subcontractors with the best people and the best technology at the
best price. Indeed, the pressures of global competition have made network structures more vital, and
computer-based information technology has made them possible.73
A potential disadvantage of network structures is that they expose the core firm to market forces.
Other companies may bid up the price for subcontractors, whereas the short-term cost would be lower
if the company hired its own employees to perform the same function. Another problem is that informa-
tion technology makes worldwide communication much easier, but it has not yet replaced the degree of
control that organizations have when manufacturing, marketing, and other functions are in-house. The
core firm can use arm’s-length incentives and contract provisions to maintain the subcontractor’s qual-
ity, but these actions are relatively crude compared with maintaining the quality of work performed by
in-house employees.
Contingencies of Organizational Design
L04 Most organizational behaviour theories and concepts have contingencies: Ideas that
work well in one sin1ation might not work as well in another situation. This contingency
approach is certainly relevant when choosing the most appropriate organizational struc-
ture.74 In this section, we introduce four contingencies of organizational design: external environment,
size, technology, and strategy.
EXTERNAL ENVIRONMENT
The best structure for an organization depends on its external environment. The external environment
includes anything outside the organization, including most stakeholders (e.g., clients, suppliers, gov-
ernment), resources (e.g., raw materials, human resources, information, finances), and competitors.
Four characteristics of external environments influence the type of organizational structure best suited
to a particular situation: dynamism, complexity, diversity, and hostility?5
Dynamic versus Stable Environments Dynamic environment~ have a high rate of change,
leading to novel sin1ations and a lack of identifiable patterns. Organic structures in which employees are
experienced and coordinate well in teams are better suited to dynamic environments, so the organization
can adapt more quickly to changes. 76 In contrast, stable environments are characterized by regular cycles
of activity and steady changes in supply and demand for inputs and outputs. Events are more predictable,

384 Part Four Organizational Processes
enabling the firm to apply rules and procedures. Mechanistic structures are more efficient when the envi-
ronment is predictable, so they tend to be more profitable than organic structures under these conditions.
Complex versus Simple Environments Complex environments have many elements, whereas
simple environments have few things to monitor. As an example, a major university library operates in
a more complex environment than a small-town public library. The university library’s clients require
several types of services-book borrowing, online ful l-text databases, research centres, course reserve
collections, and so on. A small-town public library has fewer of these demands placed on it. The more
complex the environment, the more decentral ized the organization should become. Decentral ization is
a logical choice for complex environments because decisions are pushed down to people and subunits
with the necessary information to make informed choices.
Diverse versus Integrated Environments Organizations located in diverse environments
have a greater variety of products or services, clients, and regions. In contrast, an integrated environ-
ment has only one type of client and product and serves only one geographic area. The more diversi-
fied the environment, the more the firm need~ to use a divisional structure aligned with that diversity.
If it sells a single product around the world, a geographic divisional structure would align best with
the firm’s geographic diversity, for example. Diverse environments also call for decentralization. By
pushing decision making further down the hierarchy, the company can adapt better and more quickly to
diverse clients, government requirements, and other circumstances related to that diversity.
Hostile versus Munificent Environments Firms located in hostile environments face resource
scarcity and more competition in the marketplace. These conditions are typically dynamic as well
because they reduce the predictability of access to resources and demand for outputs. Organic strucntres
tend to be best in hostile environments. However, when the environment is extremely unfavourable-
such as a severe shortage of supplies or tumbling market shar~rganizations tend to temporari ly
centralize so that decisions can be made more quickly and executives feel more comfortable being in
control.77 Ironically, centralization may result in lower-quality decisions during organizational crises,
because top management has less information, particularly when the environment is complex.
ORGANIZATIONAL SIZE
Larger organizations have different structures than do smaller organizations, for good rea~on.78 As the
number of employees increases, job specialization increases due to a greater division of labour. The greater
division of labour requires more elaborate coordinating mechanisms. Thus, larger firms make greater use
of standardization (particularly work processes and outcomes) to coordinate work activities. These coor-
dinating mechanisms create an administrative hierarchy and greater formalization. At one time, growing
organizations reduced their reliance on informal communication as a coordinating mechanism. How-
ever, emerging information technologies have enabled large firms to coordinate work more through
informal communication than wa~ previously possible.79
Larger organizations also tend to be more decentral ized than are smaller organizations. Execu-
tives have neither sufficient time nor expertise to process al l the decisions that significantly influence
the business as it grows. Therefore, decision-making authority is pushed down to lower levels, where
employees are able to make decisions on issues within their narrower range of responsibility.
TECHNOLOGY
Technology is another factor to consider when designing the best organizational structure for the situ-
ation.80 Technology refers to the mechanisms or processes an organization relies on to make its products
or services. In other words, technology isn’t just the equipment used to make something; it also includes
how the production process is physically arranged and how the production work is divided among
employees. The two main technological contingencies are variability and analyzabi lity, both of which we
described as job characteristics in Chapter 6. Task variability refers to how predictable the job duties are

Chapter Thirteen Designing Organizational Structures 385
from one day to the next. In jobs with high variability, employees perform several types of ta~ks, but they
don’t know which of those tasks are required from one day to the next. Low variability occurs when the
work is highly routine and predictable. Task ana/yztJbility refers to how much the job can be performed
using known procedures and rules. In jobs with high ta~k analyzability, employees have well-defined
guidelines to direct them through the work process. In jobs with low task analyzability, employees tackle
unique sin1ations with few (if any) guidelines to help them determine the best course of action.
An organic, rather than a mechanistic, structure should be introduced where employees perform tasks
with high variability and low analyzability, such as in a research setting. The reason is that employees
face unique situations with little opportunity for repetition. In contrast, a mechanistic structure is pre-
ferred where the technology has low variability and high analyzability, such a~ an assembly line. Assem-
bly work is routine, highly predictable, and has well-established procedures-an ideal situation for a
mechanistic structure to operate eff iciently.
Does your job require an organic or mechanistic structure? You can d iscover which
structure is be tte r for your job by completing this self-assessment in Connect.
ORGANIZATIONAL STRATEGY
Organizational str ategy refers to the way the organization positions itself in its environment in
relation to its stakeholders, given the organization’s resources, capabilities, and mission.81 In other
words, strategy represents the decisions and actio ns applied to achieve the organization’s goals.
Although size, technology, and environment influence the optimal organizational structure, these
contingencies do not necessarily determine structure. Instead, corporate leaders formulate and imple-
ment strategies that shape both the characteristics of these contingencies as well a~ the organization’s
resulting structure.
This concept is summed up with the simple phra~e “structure follows strategy.”82 Organizational lead-
ers decide how large to grow and which technologies to use. They take steps to define and manipulate
their environments, rather than Jet the organization’s fate be entirely determined by external influences
(see the open systems perspective in Chapter 1). Furthermore, organizational structures don’t evolve a~ a
natural response to environmental conditions; they are the outcome of conscious human decisions. Thus,
organizational strategy influences both the contingencies of structure and the structure it~elf.
If a company’ s strategy is to compete through innovation, a more organic structure would be pre-
ferred because it is ea~ier for employees to share knowledge and be creative. If a company chooses a
low-cost strategy, a mechanistic structure is preferred because it maximizes production and service
efficiency.83 Overall, it is now apparent that organizational structure is influenced by size, technology,
and environment, but the organization’s strategy may reshape these elements and loosen their connec-
tion to organizational structure.
Chapter Summary
LO 1 Describe three types of coordination in organizational st ructures.
Organizational str·ucture is the division of labour, as well as the patterns of coordination, commu-
nication, workfl ow, and formal power that direct organizational activities. All organizational struc-
tures divide labour into distinct tasks and coordinate that labour to accomplish common goals . The primary means
of coordination are informal communication, formal hierarchy, and standardization.

386 Part Four Organizational Processes
L02 Discuss the role and eff ects of span of control, cent ralization, and formalization, and r elate
these elements to organic and mechanistic organizational structures.
The four basic elements of organizational structure are span of control, centralization, formal·
ization, and departmentalization. The optimal span of control- the number of people directly reporting to the
next level in the hierarchy-depends on what coordinating mechanisms are present other than formal hierarchy,
whether employees perform routine tasks, and how much interdependence there is among employees within the
department.
Centralization occurs when formal decision authority is held by a small group of people, typically senior exec·
utives. Many companies decentral ize as they become larger and more complex, but some sections of the company
may remain central ized while other sections decentralize. Formal ization is the degree to which organizations stan·
dardize behaviour through rules, procedures, formal training, and related mechanisms. Companies become more
formalized as they get older and larger. Formalization tends to reduce organizational flexibility, organ izational
learning, creativity, and job satisfaction.
Span of contro l, centralization, and formalization cluster into mechanistic and organic structures. Mechanistic
structures are characterized by a narrow span of control and a high degree of formalization and centralization.
Companies with an organic structure have the opposite characteristics.
L03 Identify and evaluate six types of departmentalization.
Departmentalization speci fies how employees and their activities are grouped together. It establishes
the chain of command, focuses people around common mental models, and encourages coordina·
tion through infom1al communication an10ng people and subunits. A simple structure employs few people, has
minimal hierarchy, and typically offers one d istinct product or service. A functional structure organizes employees
around specific knowledge or other resources. This structure fosters greater specialization and improves direct
supervision, but it weakens the focus on serving clients or developing products.
A divisional s tructure groups employees around geographic areas, clients, or outputs. This structure accom·
modates growth and focuses employee attention on products or customers rather than tasks. However, this
structure also duplicates resources and creates si los of knowledge. Team-based structures are very flat, with low
formal ization, and organize self-directed teams around work processes rather than functional specialties. The
matrix structure combines two structures to leverage the benefits of both types. However, this approach requires
more coordination than functional or pure divisional structures, may dilute accountability, and increases con-
flict. A network structure is an alliance of several organizations for the purpose of creating a product or serving
a client.
L04 Explain how the ex1ernal environment, organizational size, technology, and strategy are
relevant when designing an organizational structur e.
The best organizational structure depends on whether the environment is dynan1ic or stable, com-
plex or simple, diverse or integrated, and hostile or munificent. Another contingency is the organization’s size.
Larger organizations need to become more decentralized and more formalized. The work unit’s technology-
including variabil ity of work and analyzability of problems-influences whether it should adopt an organic or
mechanistic structure. These contingencies influence but do not necessarily determine structure. Instead, corpo-
rate leaders formulate and implement strategies that shape both the characteristics of these contingencies and the
organization’s resulting structure.
Key Terms
cent ralization
divisional structur e
fonualization
functional structure
matrix st ructure
mechanistic structur e
network st ructure
organic structure
organizational strategy
organizational structure
span ol’ control
team-based structure

Chapter Thirteen Designing Organizational Structures 387
Critical Thinking Questions
I. Samsung Group’s organizational structure wa~ described at the beginning of this chapter. What coordinating
mechanism is likely most common in this organization? Describe the extent and form in which the other two
types of coord ination might be apparent at Samsung.
2. Think about the business school or other educational group where you are currently attending classes. What
is the dominant coordinating mechanism used to guide or control the instructor? Why is this coord inating
mechanism used the most here?
3. Administrative theorists concluded many decades ago that the most effective organ izations have a narrow
span o f contro l. Yettoday’s top-performing manufacturing firms have a wide span o f control. Why is this
possible? Under what circumstances, if any, should manufacturing firms have a narrow span o f control?
4. Leaders o f large organizations struggle to identify the best level and types of centralization and decentraliza-
tion . What should companies consider when determining the degree of decentral ization?
5. Diversi fied Technologies Ltd. (DTL) makes four types o f products, with each type to be sold to different
types of clients. For exan1ple, one product is sold exclusively to automobile repair shops, whereas another is
used mainly in hospitals. Expectations within each client group are surprisingly similar throughout the world.
The company has separate marketing, product design, and manufacturing facilities in Asia, North America,
Europe, and South America because, unti l recently, each jurisdiction had unique regulations governing the
production and sales of these products. However, several government~ have begun the process o f deregulat-
ing the products that DTL designs and manufactures, and trade agreements have opened several markets to
foreign-made products. Which form o f departmentalization might be best for DTL if deregulation and trade
agreements occur?
6 . Mechanistic and organic structures are two organizational forms. How do the three types of coordination
mechanisms operate through these forms?
7 . From an e mployee perspective, what are the advantages and disadvantages of working in a matrix structure?
8. Suppose you have been hired as a consultant to diagnose the environmental characteristics o f your college
or university. How would you describe the school’s external environment? Is the school’s existing s tructure
appropriate for this environment?
Case Study:
MERRITT’S BAKERY
by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canada)
In 1979, Larry Merritt and his wife Bobbie bought The Cake Box, a small business located in a tiny 42-square
metre store in Tulsa, Oklahoma. The couple were the only employees. “I would make cakes and Bobbie would
come in and decorate them,” Larry recalls. Bobbie Merritt was already skilled in decorating cakes, whereas bak-
ing wa~ a new occupation for Larry Merritt, who previous ly worked as a discount store manager. So, Larry spent
hours pouring over baking books in the local library and testing recipes through trial-and-e rror experimentation.
“I threw away a lot of ingredients that firs t year,” he recalls .
Sales were initially slow. Then, a doughnut shop around the corner was put up for sale and its owner made it
possible for the Merritts to buy that business. They moved to the larger location and changed the company’s name
to Merritt’s Bakery to reflect the broader variety of products sold. The Merritts hired their fi rst two e mployees,
who performed front s tore sales and service. Over the next decade, Merritt’s Bakery’s physical space doubled and
its revenues increased 13-fold. The company e mployed 20 people by the time it made it~ next move.
In 1993, Merritt’s Bakery moved to a 557-square metre location across the street. The business becan1e so popular
that customers were lining up down the street to buy its fresh-baked goods. “That looks like success to a lot of peo-
ple, but that wa~ failure,” says Bobbie Merritt. The problem was that t11e couple didn’t want to delegate production to

388 Part Four Organizational Processes
employees, but they couldn’ t produce their baked goods or decorate their carefully crafted cakes fast enough to keep
up with demand. “We fel t like failures because we had to work those 20 hours (per day),” she reflects.
At some point, the Merritts realized that they had to become business owners and managers rather than bakers.
They devised a plan to grow the business and drew up an organizational structure that formalized roles and respon-
s ibilities. When a second Merritt’s Bakery s tore opened across town in 2001, each store wa~ a~signed a manager, a
person in charge of baking production, another in charge of cake decorating and pastries, and someone responsible
for sales. A third store opened a few years later. Larry worked on maintaining quality by training bakery staff at
each store. “Because it is so difficult to find qualified bakers nowadays, I want to spend more time teaching and
developing our product~.” he said at the time.
Christian Merritt, one of Larry and Bobbie’s sons, joined the business in 2000 and has since become head of
operations. An engineer by training with experience in the te lecommunications industry, Christian soon developed
flow charts that describe precise procedures for most work activities, ranging from simple store-front tasks (ca~hier­
ing) to unusual events such as a power outage. These documents standardized work activities to maintain quality
with less reliance on direct supervision. Christian also introduced computer systems to pool information across
stores about current inventory levels, which products are selling quickly, and how much demand exists for Merritt’s
fan10us custom cakes. The information improved decision making about production, staffing, and purcha~ing
without having to directly contact or manage each store a~ closely.
In late 2007, Merritt’s Bakery’s opened a dedicated production centre near the original store and moved all pro-
duction staff into the building, affectionately called ” the Fort.” The central ized production facility reduced costs
by removing duplication o f staff and equipment, provided more consistent quality, and allowed the stores to have
more front store space for customers.
Merritt’s Bakery refined its training programs, from the initial orientation session to a series of modules on
specific skills . For example, front store staff now complete a series of clinics that add up to 20 hours of training.
The company also introduced special selection processes so people with the right personality and skills are hired
into these jobs. Employees at Merritt’s production faci lity receive decorator training through a graduated program
over a longer time. One or two managers at the production site closely coach up to five new hires.
Today, Merritt’s Bakery employs more than 80 people, including production managers, store managers, and a mar-
keting director. 1\vo-thirds of the bus iness is in the creation of cakes for birthdays, weddings, and other events, but the
company also has three busy and popular stores across Tulsa. “We’re just now getting the pieces in place to start to treat
Merritt’s Bakery like a business, with a lot of part~ that we manage from a distance,” says Christian Merritt. “We’re
present but detached; we have our hands in a lot of thing.~. but it’s in managing stores instead of operating them.”
Discussion Questions
I. How have the division and coordination of labour evolved at Merritt’s Bakery from its beginnings to today?
2 . Describe how span of control, centralization, and formalization have changed at Merritt’s Bakery over the
years? Is the company’s organizational structure today more mechanistic or organic? Are these three organi-
zational s tructure elements well-suited to the company in their current form? Why or why not?
3. What form of departmentalization currently exist~ at Merritt’s Bakery? Would you recommend this form of
departmentalization to this company? Why or why not?
Source: Adapted from C. Har””Y and K. Morouney, Journal of Management Education 22 (June 1998). pp. 425-429. Used
with permission of the authors.
Team Exercise:
THE CLUB ED EXERCISE
Purpose This exercise is designed to help you understand the issues to consider when designing organizations
at various stages of growth.
Materials Each student team should have several flip chart sheet~ or other means to draw and show t11e class
several organizational charts.
Instructions Tean1s receive up to four scenarios, one at a time in chronological sequence. For each scenario,
teams are given a fixed time (e.g., 15 minutes) to draw an organizational chart that best suits the firm in that

Chapter Thirteen Designing Organizational Structures 389
scenario. The first scenario is presented below. The exercise and debriefing require approximately 90 minutes,
although fewer scenarios can reduce the time somewhat.
Srep I: Students are placed in teams (typically four or five people).
Srep 2: After reading Scenario # I presented below, each team wi ll design an organ izational chart (depart-
mentalization) that is most appropriate for this s ituation. Students should be able to describe the type of structure
drawn and explain why it is most appropriate. The structure should be drawn on a flip chart or using a software
progran1 for others to see during later class discussion. The instructor wi ll set a fixed time (e.g., 15 minutes) to
complete this task before the next scenario is presented.
Scenario# I Determined to never suffer another cold Canadian winter, you secured venture capital funding for a
new resort business called Club Ed on a small Caribbean island. The resort is under construction and is scheduled
to open in less than one year. The resort will employ approximately 75 staff (most employed full-time). Draw an
organizational chart that best suits the organization when it opens, and justify your decision.
Srep 3: At the end of the time allowed, the instructor will present Scenario #2 and each team will be asked
to draw another organizational chart to suit that s ituation. Again, students should be able to describe the type of
structure drawn and explain why it is appropriate.
Srep 4: At the end of the time allowed, the instructor wi ll present Scenario #3 and each tean1 will be asked to
draw another organizational chart to suit that s ituation.
Srep 5: Depending on the time available, the instructor might present a fourth scenario. The class will gather
to present their designs for each scenario. During each presentation, tean1s should describe the type of structure
drawn and explain why it is appropriate.
Based on C. Harvey and K. Morouney. Jouma/ of Management Educarion22 (June 1998). pp. 425-429.
Self-Assessments for Chapter 13
I
SELF-ASSESSMENT NAME
Which organizational structure do you prefer?
Does your job require an organic or mechanis-
tic structure?
DESCRIPTION
Personal values influence how comfortable you are working in
different organizational structures. You might prefer an organization
with clearly defined rules or no rules at all. You might prefer a firm
where almost any employee can make important decisions or one in
which important decisions are screened by senior executives. This
se(f .. asse..~sment estimates which of four organizational structures
best fiL~ your needs and expectations.
Different jobs require different types of organizational strucrures.
For some jobs. employees work better in an organic structure. In
other jobs. a mechanistic structure helps incumbents perform their
work better. Think of the job you currently have or recently held.
or even your ‘job” a.’i a student. This self·assessment estimates
whether the type of work you perfonn is better suited to a
mechanistic or organic organizational structure.

CHAPTER 14
Organizational Culture
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
LO 1 Describe the elements of organizational culture and discuss the importance of organizational subcultures.
L02 List four categories of artifacts through which corporate culture is deciphered.
L03 Discuss the importance of organizational cu lture and the conditions under which organizational
culture strength improves organizational performance.
L04 Compare and contrast four strategies for merg ing organizat ional cultures.
LOS Describe five st rategies for changing and strengthening an organization’s cu lture, including the
application of attract ion-select ion-attrit ion theory.
L06 Describe the organizational socializat ion process and identify st rategies to improve that process.
390
Jack Newton and Rian Gauvreau launched Clio a decade ago with the view that successful
companies rely on a strong organizational culture. Accord ingly, the two founders of the cloud-
based legal practice management company based in Burnaby, B.C., personally screened every
applicant for cultural fit. Clio has since become one of the world ‘s leading cloud-based platforms
in its field and one of Canada’s fastest-growing technology companies. Clio’s workforce

Chapter Fourteen Organizational Culture 391
tripled in less than three years to 200 employees, including many hired at its new offices in
Toronto and Ireland.
Clio’s growth was so rapid that Newton and Gauvreau could no longer review each newcomer’s
personal values for compatibility with Clio’s culture. “We got a bit more removed from the day-to-day
hiring,” Newton admits. “We realized for the first time we were scaling at such a rate that someone
was brought in w ithout weighing in on our cultural barometer.” Furthermore, the company’s values
weren’t documented; they were just fuzzy ideas understood by the founders and senior employees.
“We learned and understood them through the stories and legends told by senior employees and
our founders,” explains Christopher Yeh, Clio’s manager of talent development.
The solution was to document the firm’s values and ensure that employees enacted them in their work.
A cross-functional “values team” of 1 0 employees identified stories, actions/behaviours. and people that
seemed to best represent Clio’s culture, as well as elements that were contrary to the desired culture.
Guided by these artifacts, the team wrote down a set of values, which was further refined after receiving
feedback from employees across the company. From this process, the team produced a final a list of seven
core values, including “Customer success comes first;” “Work hard, be agile;” and “Stay fit, have fun.•
To keep Clio’s core values alive, the company launched a survey that asked employees to anonymously
“help us identify where we were falling short at living our values,” explains Yeh. The company also created
“Clio Ministries,” which are essentially volunteer “mini values teams that are passionate about one of
[Clio’s) values.” These ministries identify solutions to concerns raised by employees in the values survey.
Today, Clio has a stronger culture that more clearly guides employee behaviour and decision making.
“Now; says co-founder Newton, “people know at an instinctiVe level if the decisions they make are right.”‘
Clio has a strong organizational culture and applies several strategies we will describe in this chap-ter to maintain and sustain that culture throughout its meteoric growth. Orga nizational culture
consists of the values and assumptions shared within an organization2 It defines what is important and
unimportant in the company and, consequently, directs everyone in the organization toward the “right
way” of doing things. You might think of organizational culture a~ the company’s DNA-invisible to
the naked eye, yet a powerful template that shapes what happens in the workplace.
This chapter begins by identifying the elements of organizational culture and then describing how
culture is deciphered through artifacts. This is followed by a discussion of the relationship between
organizational culture and performance, including the effects of cultural strength, fit, and adaptabil ity.
We then turn our attention to the challenges of merging organizational cultures and the solutions to
those challenges. The latter part of this chapter examines ways to change and strengthen organizational
culture, including a closer look at the related topic of organizational socialization.
Elements of Organizational Culture
L01 Organizational culture consists of shared values and a~umptions. Exhibit 14.1 illustrates
how these shared values and assumptions relate to each other and are associated with arti-
facts, which are discussed later in thi~ chapter. Values are stable, evaluative beliefs that guide
our preferences for outcomes or courses of action in a variety of situations (see Chapters 1 and 2)? They are
conscious perceptions about what is good or bad, right or wrong. In the context of organizational culture,
values are discussed a~ shared values, which are values that people within the organization or work unit have
in common and place near the top of their hierarchy of values.4 For example, from our opening case study,
Clio employees embrace seven shared values, including “Live a learning mindset,” ”Thrive as #TeamClio,”
(team orientation), and “Stay fi t, have fun.”
Organizational culture also consists of shared assumptions-a deeper element that some experts
believe is the essence of corporate culture. Shared assumptions are nonconscious, taken-for-granted
perceptions or ideal prototypes of behaviour that are considered the correct way to think and act toward
problems and opportunities. Shared a~sumptions are so deeply ingrained that you probably wouldn’t
discover them by surveying employees. Only by observing employees, analyzing their decisions, and
debriefing them on their actions would these assumptions rise to the surface.

392 Part Four Organizational Processes
EXHIBIT 14.1 Organizational Culture Assumptions, Values, and Artifacts
Arti facts of
organizational culture
Physical
structures
Language
Rituals and
ceremonies
Stories
and legends
Shared values
• Conscious beliefs
• Judgments about what Is
good or bad. right or w~g
Shared assumptions
• Nonconsclous, taken-for·
granted beliefs
• Implicit mental
Ideal prototypes of
behaviour
Espoused versus Enacted Values Most corporate websites have “Careers” web pages for job
candidates, and many of these sites proudly list the company’s core values. Do these values really represent
the organization’s culture? Some do, but these pages more likely describe espoused values-the val-
ues that corporate leaders hope will eventually become the organization’s culture, or at least the values
they want others to believe guide the organization’s decisions and actions.5 Espoused values are usually
socially desirable, so they present a positive publ ic image. Even if top management acts consistently with
the espoused values, lower-level employees might not do so. Employees bring diverse personal values
to the organization, some of which might confl ict with the organization’s espoused values.
Consider what BP says about its culture. The British energy giant list~ safety ftrst among it~ five core
values: ‘ ‘Everything we do relies upon the safety of our workforce and the communities around us. We care
about the safe management of the environment.” BP executives likely give the safety value considerable pri-
ority today, but past events suggest that, until recently, it was probably no more than an espoused value. BP
was at the centre of the 20 I 0 Gulf of Mexico oil spill environmental disaster. A few months before the spill
occurred, the U.S. government penalized BP with the largest health and safety fine in history for failing to
sufficiently improve safety at it~ Texas City refinery. Fmtr years earlier, 15 employees died in an explosion
at that refinery. A U.S. government report on that explosion concluded that BP “did not provide effective
safety culture leadership.” A few years earlier, officials in Norway and Ala~ka had also reported problems
with BP’s “safety culture.” In short, BP identified safety (and its predecessor, responsibility) as a core value
for many years, but it might have been only an espoused value rather than part of its actual culture.6
An organization’s culture is defined by its enacted values, not its espoused values. Values
are enacted when they actually guide and influence decisions and behaviour. They are values put into

Chapter Fourteen Organizational Culture
• by the NUMBERS
Corporate Culture Alignments and Misalignments7
of more than 7,000
business leaders across
130 countries believe
that an organization’s
culture is a potential
competitive advantage.
of 812 managers (most
in human resources)
in the U.K. believe their
organization’s espoused
values generally reflect
the actual values practised
by management.
of 2,219 executives and
employees surveyed
across several countries
think their organization’s
culture is in need of a major
overhaul.
31% of 196 mid-level
Canadian managers
surveyed believe their
organization has a “weak”
understanding of the
workplace culture.
-..——–….
12% of more than 7,000
business leaders
across 130 countries
believe their companies
are driving the “right”
corporate culture.
393
practice. Enacted values are apparent when watching executives and other employees in action, includ-
ing their decisions, where they focus their attention and resources, how they behave toward stakehold-
ers, and the outcomes of those decisions and behaviour.
CONTENT OF ORGANIZATIONAL CULTURE
Organizations differ in their cultural content, that is, the relative ordering of shared values.8 The
opening case study mentioned some of Clio’s core values, which relate to teamwork, customer ser-
vice, and having fun. Contrast Clio’s culture with that of Netflix, which seems to prioritize individual
performance and undertones of internal competitiveness. For instance, the onl ine streaming media
provider reminds employees that “We’re a team, not a family,” that “Netfl ix leaders hire, develop, and
cut smartly,” and that “adequate performance gets a generous severance package.”9
How many corporate cultures are there? Several models and measures classify organizational cul-
ture into a handful of ea~y-to-remember categories. One of these, shown in Exhibit 14.2, identifies
seven corporate cultures. Another popular model identifies four organizational cultures organized in
a two-by-two table representing internal versus external focus and flexibility versus control. Other
models organize cultures around a circle with 8 or 12 categories. These circumplex models suggest that
some cultures are opposite to others, such as an avoidance culture versus a self-actualization culture, or
a power culture versus a collegial culture. 10
These organizational culture models and surveys are popular with corporate leaders faced with
the messy business of diagnosing their company’s culture and identifying what kind of culture they
want to develop. Unfortunately, the models oversimplify the diversity of cultural values in organizations.
There are dozens of individual values, and many more combinations of values, so the number of organi-
zational cultures that these models describe likely falls considerably short of the full set.

394 Part Four Organizational Processes
EXHIBIT 14.2 Organizational Culture Profile Dimensions and Characteristics
~
Orl I IIMICI!IIme. II Cllllncterllllc tt6 …. • …
lnnovalion Experimenting. opportunity seeking. risk taking, few rules. low cautiousness
Stability Predictability, security. rule-oriented
Respect for people Fairness. toler.tnce
Outcome orientation Action·oriented. high expectations. result~·oriented
Attention to detail Precise. analytic
Team orientation Collabor•tion, people-oriented
Aggressiveness Competitive. low emphasis on social responsibility
Sourr:e: Based on inrormation in C. A. O’Reilly lll. l Chatman. and D. F. Caldwell. “People and Organizational Culture: A Profile Comparl~on
Approach to As..:;e..:;sing PerSon-()Fganization Fit.” Academy of Management Journal 34. no. 3 ( 1991). pp. 487-518.
The diversity of corporate cultures is evident in a recent study of espoused values at the top 500 Ameri·
can companies. The sn1dy distilled these values down to nine categories. Integrity appeared most often, fol-
lowed by teamwork, innovation, respect, quality, safety, community, communication, and hard work. But
each of these categories includes a large number of specific values. The “respect” category, for instance,
includes the specific values of diversity, inclusion, development, empowerment, and dignity. 11 Since there
are dozens of espoused values, there would be an equally long list of enacted values.
Another concern is that organizational culture models and measures typically ignore the shared
assumptions aspect of culture. This oversight likely occurs because measuring shared assumptions is
even more difficult than measuring shared values. A third concern is that many organizational culture
models and mea~ures incorrectly assume that organizations have a fairly clear, unified culture that is
easily decipherable. 12 In reality, an organization’s culture is typical ly blurry and fragmented. As we
discuss next, organizations consist of diverse subcultures in which clusters of employees across the
organization have different experiences and backgrounds that influence their preferred values. Fur-
thermore, an organization’s culture is founded on the values of its employees. People have diverse
hierarchies of values, so an organization’s culture will have noticeable variability. Thus, many of the
popular organizational culture models and measures oversimplify the variety of organizational cultures
and falsely presume that organizations can easily be identified within these categories.
Which corporate culture do you prefer? You can d iscover which of four types of
organizational culture you most and least prefer by completing this self-assessment in
Connect
ORGANIZATIONAL SUBCULTURES
When discussing organizational culture, we are really referring to the dominant culture, that is, the val-
ues and assumptions shared most consistently and widely by the organization’s members. The dominant
culture is usually supported by senior management, but not always. Cultural values and assumptions
can also persist in spite of senior management’s desire for another culture. Furthermore, organizations
are composed of subcultures located throughout their various divisions, geographic regions, and occu-
pational groups. 13 Some subcultures enhance the dominant culture by espousing parallel assumptions
and values. Others differ from but do not conflict with the dominant culture. Still others are cal led
countercultures because they embrace values or assumptions that directly oppose the organization’s
dominant culture. It is also possible that some organizations (including some universities, according to
one study) consist of subcultures with no decipherable dominant culture at alL 14
Subcultures, particularly countercultures, potential ly create conflict and dissension among employ-
ees, but they also serve two important functions. 15 First, they maintain the organization’s standards
of performance and ethical behaviour. Employees who hold countercultural values are an important

Chapter Fourteen Organizational Culture 395
source of surveillance and critical review of the dominant order. They encourage constructive confl ict
and more creative thinking about how the organization should interact with its environment. Subcul-
tures potentially support ethical conduct by preventing employees from blindly following one set of
values. Subculture members continually question the “obvious” decisions and actions of the maj ority,
thereby making everyone more mindful of the consequences of their actions.
The second function of subcultures is as spawning grounds for emerging values that keep the firm
aligned with the evolving needs and expectations of customers, suppl iers, communities, and other
stakeholders. Companies evenntally need to replace their dominant values with ones that are more
appropriate for the changing environment. Those emerging cultural values and assumptions usually
exist in subcultures long before they are ideal for the organization. If subcultures are suppressed, the
organization may take longer to discover, develop, and adopt the emerging desired culture.
Deciphering Organizational Culture through Artifacts
Shared values and assumptions are not easily measured through surveys and might not be
accurately reflected in the organization’s values statements. Instead, as Exhibit 14.1 illus-
trated earlier, an organization’s culture needs to be deciphered through a detailed investiga-
tion of artifact~. Artifacts are the observable symbols and signs of an organization’s culture, such as the
way visitors are greeted, the organization’s physical layout, and how employees are rewarded.16 A few
experts suggest that artifacts are the essence of organizational culture, whereas most others (including the
authors of this book) view artifacts as symbols or indicators of culture. In other words, culntre is cognitive
(values and assumptions inside people’s heads) whereas artifacts are observable manifestations of that
culture. Either way, artifacts are important because they represent and reinforce an organization’s culture.
Artifacts provide valuable evidence about a company’s culture.17 An organization’s ambiguous
(fragmented) culntre is best understood by observing workplace behaviour, listening to everyday con-
versations among staff and with customers, studying written documents and emails, viewing physical
structures and settings, and interviewing staff about corporate stories. In other words, to truly under-
stand an organization’s culture, we need to sample information from a variety of organizational artifacts.
The Mayo Clinic conducted such an assessment a few years ago. An anthropologist was hired to
decipher the medical organization’ s culture at its headquarters in Minnesota and to identify ways of
transferring that culture to its two newer sites in Florida and Arizona. For six weeks, the anthropologist
shadowed employees, posed as a patient in waiting rooms, did countless interviews, and accompanied
physicians on patient visits. Based on the anthropologist’s analysis of artifacts, the final report outlined
Mayo’s dominant culture and how its satellite operations varied from that culture.18 Over the next sec-
tions, we review four broad categories of artifacts: organizational stories and legends, organizational
language, rituals and ceremonies, and physical structures and symbols.
ORGANIZATIONAL STORIES AND LEGENDS
Cirque du Solei! thrives on a culture of risk and creativity. This is apparent in stories detailing how the
Montreal-based troupe that combines circus with theatre wa~ started, and how it survived during the lean
years. One such story took place soon after the company was formed. Cirque du Solei! was invited to
perform at the Los Angeles Arts Festival, but they didn’t have enough money to get back home and the
festival could not provide funds in advance to cover Cirque du Soleil’s costs. Co-founder Guy Laliberte
took a gamble by literally emptying the troupe’s bank account to transport the performers and equipment
one way to California. “I bet everything on that one night [at the Los Angeles Arts Festival],” Laliberte
recalls. “If we failed, there was no cash for gas to come home.” Fornmately, the gamble paid off. Cirque
du Solei! was a huge triumph, which Jed to more opportunities and successes in the years ahead.19
Stories such as Cirque du Soleil’s risky business decision permeate strong organizational cultures. Some
tales recount heroic deeds, whereas others ridicule past events that deviate from the firm’s core values.
Organizational stories and legends serve a~ powerful social prescriptions of the way things should (or
should not) be done. They add human realism to corporate expectations, individual performance standards,

396 Part Four Organizational Processes
and the criteria for getting fired. Stories also produce emotions in listeners, and these emotions tend to
improve listeners’ memory of the lesson within the story.20 Stories have the greatest effect on communicat-
ing corporate culntre when they describe real people, are assumed to be true, and are known by employees
throughout the organization. Stories are also prescriptive-they advise people what to do or not to do.21
ORGANIZATIONAL LANGUAGE
The language of the workplace speaks volumes about the company’s culture. How employees talk to each
other, describe customers, express anger, and greet stakeholders are all verbal symbols of shared values and
assumptions. Tom Kelley and David Kelley, leaders of design firm IDEO, advise in their book on organi-
zational creativity: “What we say-and how we say it-‘Orth Inc . June 20 15).
When a~ked how the Detroit-ba~ finance company has grown so quickly, Emerson replied: “The number one
thing is culture. It allows us to move very quickly and react very quickly in making business decisions.” 34
Launi Skinner, Bill Emerson, and many other leaders bel ieve that an organization’s success partly
depends on its culture. Several popular-press management books similarly a~sert that the most success-
ful companies have strong cultures. In fact, one popular management book, Built to Last, suggests that
successful companies are “cult-li ke” (al though not actually cul ts, the authors are careful to point out.)35
Does OB research support this view that companies are more effecti ve when they have a strong cul-
ture? Yes, potential ly, but the evidence indicates that the relationship depends on a few conditi ons.36
Global Connections 14.1:
THE IMPORTANCE OF ORGANIZATIONAL CULTURE AT ALIBABA
Alibaba Group Holding Ltd. was less than two years old when Jack Ma and his 17 co-founders
decided to more clearly define the company’s core values. Alibaba had quickly outgrown
Ma’s apartment in Hangzhou, China, where the company was born, and was on its way to
becoming one of the world’s largest and most successful e-commerce companies. Ma firm ly
believed that shaping Alibaba’s corporate culture during its infancy would provide a powerful
way to guide employees for many years to come.
“If Alibaba desires sustainable development, we must have a management philosophy,”
explains Ma. “But if we don’t have a powerful and persistent corporate culture as the root, we
cannot create the philosophy and thinking.”
Alibaba’s six core values are customer first, teamwork, embrace change, integrity, passion,
and commitment. The company is often described as having a “kung fu” culture in which
employees are expected to “approach every1hing with fire in their belly” (passion) and to
“demonstrate perseverance and excellence” (commitment). These values emerged from the
Chinese martial arts novels that inspired Ma. “You have to have the spirit of never g ive up, the
fighting spirit, keep on doing,” says Ma of the values that exemplify the novels. 37

Chapter Fourteen Organizational Culture
Jack Ma and other co-founders of Alibaba recognized that the China-based e-commerce giant’s
long-term success depends on a “powerful and persistent” organizational culture.
© REUTERS I Alamy Stock Photo
MEANING AND POTENTIAL BENEFITS OF A STRONG CULTURE
399
Before discussing these contingencies, let’s examine the meaning of a “strong” organizational culture
and its potential benefits. The strength of an organization’s culture refers to how widely and deeply
employees hold the company’s dominant values and assumptions. In a strong organizational culture,
most employees across all subunits understand and embrace the dominant values. These values and
assumptions are also institutionalized through well-establ ished artifacts, which further entrench the cul-
ture. In addition, strong cultures tend to be long-lasting; some can be traced back to the values and
assumptions establ ished by the company’s founder. In contrast, companies have weak cultures when the
dominant values are held mainly by a few people at the top of the organization, the culture is difficult to
interpret from artifacts, and the culntral values and assumptions are unstable over time or highly varied
across the organization.
Under specific conditions, companies are more effective when they have strong cultures because of
the three important functions listed in Exhibit 14.4 and described below:
Control system. Organizational culture is a deeply embedded form of social control that influ-
ences employee decisions and behaviour.38 Culture is perva~ive and operates nonconsciously.
Think of it as an automatic pilot, nonconsciously directing employees so their behaviour is con-
sistent with organizational expectations. For this reason, some writers describe organizational
culture as a compa~s that points everyone in the same direction.
Social glue. Organizational culture is the social glue that bonds people together and makes
them feel part of the organizational experience.39 Employees are motivated to internalize
the organization’s dominant culture because it fulfi ls their need for social identity. Th is social
glue attracts new staff and retains top performers. It also becomes the common thread that
holds employees together in global organizations. “The values of the company are really
the bedrock-the glue which holds the firm together,” says former Infosys CEO Nandan
Nilekani.40

400 Part Four Organizational Processes
EXHIBIT 14.4 Potential Benefits and Contingencies of Culture Strength
Functions of
Strong Cultures
Control system
Social glue
Sense-making
Benefits of culture strength
depend upon …
Whether culture content frts the
environment
Mode~ ate, not cult~ike, strength
An adaptive cutture
Organizational Outcomes
Organizational
performance
Employee well-being
Sense-making. Organizational culture helps employees to make sense of what goes on and why
things happen in the company.41 Corporate culture also makes it easier for them to understand
what is expected of them. For instance, research has found that sales employees in companies
with stronger organizational cultures have clearer role perceptions and less role-related stress.42
CONTINGENCIES OF ORGANIZATIONAL CULTURE AND EFFECTIVENESS
Studies have found only a moderately positive relationship between culture strength and organizational
effectiveness. The reason for this weak link is that strong cultures improve organizational effectiveness
only under specific conditions (see Exhibit 14.4). The three main contingencies are: ( I) whether the
culture content is aligned with the environment, (2) whether the culture is moderately strong, not cult-
like, and (3) whether the culture supports being adaptive.
Culture Content Is Aligned with the External Environment The benefits of a strong cul-
ture depend on whether the culture content-its dominant values and assumptions-is al igned with the
external environment. Companies require an employee-centric culture in environments where business
success depends mainly on employee talent, whereas an efficiency-focused culture may be more criti-
cal for companies in environments with strong competition and standardized product~. If the dominant
values are congruent with the environment, then employees are more likely to engage in behaviours
that improve the organization’s interaction with that environment. But when the dominant values are
misaligned with the environment, a strong culture encourages behaviours that can undermine the orga-
nization’s connection with its stakeholders.
For example, Coles became a successful competitor in the Australian retai l food industry after it
was acquired by Wesfarmers, which injected a strong culture around performance and customer ser-
vice. Wesfarmers is a highly successful Australian conglomerate, but it doesn’t nurture the same cul-
ture in all of its businesses (food, hardware, clothing, office supplies, insurance, fertilizers, mining, and
more). Instead, Wesfarmers ensures each company maintains a strong culture around the values that
matter most for that industry and its stakeholders. “It would be a huge mistake if we tried to impose one
culture over al l these businesses,” explains Richard Goyder, who recently stepped down as Wesfarm-
ers CEO. “Bunnings (Australia’s largest home improvement retailer) and Coles have to be customer-
centric, wherea~ our coal business has to be absolutely focused on safety.”43
Culture Strength Is Not the Level of a Cult A second contingency is the degree of culture
strength. Various experts suggest that companies with very strong cultures (i.e., corporate “cults”) may

Chapter Fourteen Organizational Culture 401
be less effective than companies with moderately strong cultures.44 One reason why corporate cults
may undermine organizational effectiveness is that they lock people into mental models, which can
blind them to new opportunities and unique problems. The effect of these very strong cultures is that
people overlook or incorrectly define subtle misalignments between the organization’s activities and
the changing environment.
The other reason why very strong cultures may be dysfunctional is that they suppress dissenting
subcultures. The challenge for organizational leaders is to maintain not only a strong culture but one
that allows subcultural diversity. Subcultures encourage task-oriented conflict, which improves cre-
ative thinking and offers some level of ethical vigilance over the dominant culture. In the long run,
a subculture’s nascent values could become important dominant values as the environment changes.
Corporate cults suppress subcultures, thereby undermining these benefits.
Culture Supports Being Adaptive A third condition influencing the effect of cultural strength
on organizational effectiveness is whether the culture content includes an adaptive culture.45 An
adaptive culture embraces change, creativity, open-mindedness, growth, and learning. Organizational
leaders across many industries increasingly view an adaptive culture as an important ingredient for
the organization’s long-term success. “At the end of the day, you have to create a culture that not only
accepts change but seeks out how to change,” emphasizes former GM CEO Dan Akerson. “It’s criti-
cally important that we inculcate that into our culture.”46
What does an adaptive culture look like? It is one in which employees recognize that the organiza-
tion’s survival and success depends on their ability to discover emerging changes in the external envi-
ronment and to adapt their own behaviour to those changes. Thus, employees in adaptive cultures see
things from an open systems perspective and take responsibil ity for the organization’s performance and
alignment with the external environment.
In an adaptive culture, receptivity to change extends to internal processes and roles. Employees believe
that satisfying stakeholder needs requires continuous improvement of internal work processes. ‘They
also recognize the importance of remaining flexible in their own work roles. The phra~ ‘That’s not
my job” is typical of nonadaptive culntres. Finally, an adaptive culntre has a strong teaming orientation
because being receptive to change necessarily means that the company also supports action-
oriented discovery. With a learning orientation, employees welcome new learning opportunities,
actively experiment with new ideas and practices, view reasonable mistakes as a natural part of the
learning process, and continuously question pa~t practices (see Chapter 7).47
Debating Point
IS CORPORATE CULTURE AN OVERUSED PHRASE?
Corporate culture is probably one of the most frequently uttered phrases in organizations
these days. That’s quite an accomplishment for two words that were rarely paired together
prior to 198248 Executives often say they have crafted the company’s culture to attract top
talent and better serve clients. Job applicants have made organizational culture one of the
top factors in their decision about whether to join a particular company. Journalists rou-
tinely blame corporate culture for business fa ilures, deviant activities, and quirky employee
conduct.
This chapter offers plenty of arguments supporting the position that organizational cul-
ture explains employee decisions and behaviour. A strong culture is a control system that
guides employees, often nonconsciously. It is, after all, the •way we do things around here.”
A strong culture also serves as the company’s “social glue,” which strengthens cohesion
among employees. In other words, employees in strong cultures have similar beliefs and val-
ues which, in turn, increases their motivation to follow the corporate herd.

402 Part Four Organizational Processes
Organizational culture can be a useful concept to explain workplace activities, but some
OB experts suggest that the phrase is overused. To begin with, corporate cu lture is usu-
ally presented as a singular thing within the company-one organization with one culture.
This presumption of a homogeneous culture-in which every employee understands and
embraces the same few dominant values-just doesn’t exist. Every organization has a frag-
mented culture to varying degrees. Furthermore, many employees engage in fac;ades of
conformity. They pretend to live the company’s values but don’t actually do so because
they don’t believe in them.49 Fragmentation and fac;ades suggest that culture is not an inte-
grated force field that manipulates people like mindless robots. Instead, employees ulti-
mately make decisions based on a variety of influences, not only the organization’s values
and assumptions.
Another argument that corporate culture is overused as a tool to explain the workplace is
that values don’t drive behaviour as often as many people believe. Instead, employees turn
to their values to guide behaviour only when they are reminded of those values or when the
situation produces fairly obvious conflicting or questionable decisions. 50 Most of the time,
front line staff perform their jobs without much thought to their values. Their decisions are
usually in relation to technical rather than values-based matters. As such, corporate culture
has a fairly peripheral role in daily routine work activities.
A third problem is that organizational culture is a blunt instrument for explaining workplace
behaviour and for recommending how to change those behaviours. “Fix the culture” is almost
meaningless because the problems prompting this advice could be due to any number of arti-
facts. Furthermore, some problems attributed to a poor corporate culture may be due to more
mundane and precise dysfunctions-unintended consequences of poorly designed rewards,
ineffective leadership, misaligned corporate strategy, biased information systems, and a host
of other conditions.
Rather than blame the company’s culture, we should pay more attention to specific sys-
tems, structures, behaviours, and attitudes that explain what went wrong. Furthermore, as
one paper recently noted, organizational culture is often the outcome of these specific arti-
facts, not the cause of the problems those artifacts create.51
ORGANIZATIONAL CULTURE AND BUSINESS ETHICS
An organization’s culture influences the ethical conduct of its employees. This makes sense because
good behaviour is driven by ethical values, and ethical values become embedded in an organization’s
dominant culture. For example, criti cs claim that News Corp’s tabloids have had a culture that rewards
aggressive, partisan, and sensationalistic tacti cs. This culture may have uncovered news, but it alleg-
edly also pushed some journalists and executives over the ethical l ine, including illegal ly hacking into
the phones of celebriti es, crime victims, and pol iticians. A Briti sh parliamentary committee (among
others) concluded that News Corp’s wrongdoing was caused by a wayward culture which “permeated
from the top throughout the organization.” As one journalist concluded, “Phone hacking is done by
employees within the corporate culture of ‘whatever it takes.”’52
Some leaders also try to improve ethical conduct by changing and strengthening the organization’s
culture around more socially desi rable values. This strategy occurred at Barclays Bank PLC, which
was found guil ty of rigging interest rates a few years ago. After the Bri tish bank’s most senior execu-
ti ves were forced out due to the scandal, the new CEO focused on establishing a clear set of ethical
values (respect, integri ty, service, excellence, stewardship). He then advised all 140,000 Barclays
employees that these values should guide their behaviour so Barclays could become a more ethical
organization.
“There might be some who don’t feel they can fully buy in to an approach which so squarely links
performance to the upholding of our values,” warned Barclays’ CEO. “My message to those people
is simple: Barclays is not the place for you. The rules have changed. You won’t feel comfortable at

Chapter Fo urteen Organizational Culture 403
Barclays and, to be frank, we won’ t feel comfortable with you as colleagues.”53 T he point here is that
culture and ethics go hand-in-hand. To create a more ethical organization, leaders need to develop an
enacted culture that steers employees toward morally correct behaviour.
Merging Organizational Cultures
L04 Top executives at Ell isDon, one of Canada’s largest construction firms, couldn’t
bel ieve their good fortune when Looby Construction indicated its interest in a take-
over. Looby was a respected competi tor, yet EllisDon executives approached the
potential acquisition cautiously. The two companies went through eight months of d iscussion before
concluding that the acquisition made sense cul turally as well a~ financially. “For us, the cultural fit
is just as important or maybe more important than the financial side because if the culture doesn’t
fit, the financ ial side will never work,” says Ell isDon CEO Geoff Smith. “To ensure this, we had to
open up to them just as much as they had to open up to us.” Ell isDon vice-president Stephen Damp
recalls how a deep level of compatible thinking resonated throughout those conversations. “You
listen to how they [Looby executives and staff] approach their problems, their approach to their
people, the market, the type of clients they like to work for,” says Damp. “The whole time I was
thinking: ‘This is like having an internal conversation with Geoff [Smith].’ Their culture is amaz-
ingly aligned wi th Ell isDon.”54
EllisDon executives are acutely aware that mergers and acquisitions often fail financially when the
merging organizations have incompatible cultures.55 Unless the acquired firm is left to operate inde-
pendently, companies with clashing cultures tend to undermine employee performance and customer
service. Consequently, several studies estimate that only between 30 percent and SO percent of corpo-
rate acquisitions add value. 56
BICULTURAL AUDIT
Organizational leaders can minimize cultural coll isions in corporate mergers and fulfil their duty of due
diligence by conducting a bicultural audit. 57 A bicultural audit diagnoses cultural relations between
the companies and determines the extent to which cultural clashes will likely occur. The process begins
by identifying cultural differences between the merging companies. This might be done by surveying
employees or, in the example of EllisDon and Looby Construction, through an extended series of meet-
ings where executives and staff of both firms discuss how they think through important decisions in
their business. From the survey data or meetings, the parties determine which differences between the
two firms will result in conflict and which cultural values provide common ground on which to build
a cultural foundation in the merged organization. The final stage involves identifying strategies and
preparing action plans to bridge the two organizations’ cultures.
STRATEGIES FOR MERGING
DIFFERENT ORGANIZATIONAL CULTURES
In some ca~es, the bicultural audit results in a decision to end merger talks because the two cul-
tures are too different to merge effectively. However, even with substantially different cultures, two
companies may form a workable union if they apply the appropriate merger strategy. The four main
strategies for merging different corporate cultures are assimilation, deculturation, integration, and
separation (see Exhibit 14.5).58
Assimilation Assimilation occurs when employees at the acquired company will ingly embrace
the cultural values of the acquiring organization. Typically, this strategy works best when the acquired
company has a weak culture that is either similar to the acquiring company’s culture or is dysfunc-
tional, wherea~ the acquiring company’s culture is strong and aligned with the external environment.

404 Part Four Organizational Processes
EXHIBIT 14.5 Strategies for Merging Different Organizational Cultures
~……, 0..111- w ……. wllm:
Assimilation Acquired company embraces acquiring firm’s culture. Acquired firm has a weak culture.
Deculturation Acquiring firm imposes its culture on unwilling Rarely works-·may be necessary only when
acquired firm. acquired firm•s culture doesn’t v.’Ork but employees
don’t realize it.
lntega.ttion Merging companies combine the two or more Existing cultures can be improved.
culture.’i into a new composite culture.
Separation Merging oompanie.’i remain di’\tinct entities with mini· Firms operate successfully in different businesses
mal exchange of culture or organizational practice.,. requiring different cultures.
Sourr:e.s: Based on idea.~ in A. R. Malekzedeh and A. Nahavandi. “Making MergerS Work by Managing CuJtwe…:;.” Journal of Busines….:: Str.u.egy.
I I (May-June I 990). pp. S~-57: K. W. Smjth. “A Brnnd·New Cultwe for the Merged Firm.” MergerS and Acquisitions. 35 (June 2000). pp. 45-50.
The culntral a~similation strategy seldom produces culntral cla~hes because the acquiring firm’s cul-
ture is highly respected and the acquired firm’s culntre is fairly easily altered. The a~similation strategy
occurred when Southwest Airlines acquired AirTran Airways. The two firms already had similar cul-
tures, but Southwest’s legendary “Southwest way” culture also made the acquisition relatively free of
culture clashes. “It’s helpful that Southwest ha~ a great cultural reputation,” says a Southwest executive
about the AirTran Airways acquisition 5 9
Deculturation Assimilation is rare. Employees usually resist organizational change, particularly
when they are asked to throw away personal and cultural values. Under these conditions, some acquir-
ing companies apply a deculturation strategy by imposing their culture and business practices on the
acquired organization. The acquiring firm strips away reward systems and other artifacts that support
the old culture. People who cannot adopt the acquiring company’s culture often lose their jobs. Decul-
turation may be necessary when the acquired firm’s culture doesn’t work, even when employees in
the acquired company aren’t convinced of this. However, this strategy is difficult to apply effectively
because the acquired firm’s employees resist the cultural intrusions from the buying finn, thereby
delaying or undermining the merger process.
Integration A third strategy is to combine the cultures of the two firms into one new composite
culture that preserves the best features of the previous cultures. Integration is slow and potentially
risky because there are many forces preserving the existing cultures. Still, this strategy should be
considered when the companies have relatively weak cultures or when their cultures include several
overlapping values. Integration works best when the cultures of both merging companies could be
improved, which motivates employees to adopt the best cultural elements of the separate entities.
Incorporating the best cultural elements of the original companies symbolizes that employees from
both firms have meaningful values for the combined organization. “Find one thing in the organization
that was good and use it as a cornerstone for a new culture,” advises a respected executive who has led
several mergers and acquisitions. “People don’t want to work for an organization for years and then
be told it’s rubbish.”60
Separation A separation strategy occurs when the merging companies agree to remain distinct
entities with minimal exchange of culture or organizational practices. This strategy is most appropriate
when the two merging companies are in unrelated industries, because the most appropriate cultural
values tend to differ by industry. Separation is also the preferred approach for the corporate cultures of
diversified conglomerates. The cultural separation strategy is rare, however. Executives in acquiring
firms usually have difficulty keeping their hands off the acquired finn. According to one estimate, only
I 5 percent of mergers leave the acquired company as a stand-alone unit61

Chapter Fourteen Organizational Cultu re
Alaska Airlines’ decision to acquire Virgin America brought audible gasps from customers and
investment analysts alike. Both airlines are successful and their routes are complementary, but
many observers question the cultural fit of a combined airline. “I th ink of [Virgin America) as a
young, hip airline. Alaska is more of a friendly aunt,” says one business traveller.
At first, Alaska Air Group CEO Brad Tilden asserted that both airlines have similar cult ures
focused on employees, customers, and safety. But after a few months, Tilden admitted he
was struggling to decide whether the cultures are sufficiently different that they should be
kept separate. Creating a single airline w ith the best cultural elements of both (integration
strategy) would be more cost-efficient, but maintaining Alaska and Virg in as distinct operations
(separation strategy) might avoid an internal culture clash and retain va lued Virg in staff and
customers.
The company eventually chose the separation strategy for the first few years, but the Virg in
brand w ill eventually disappear. “Alaska Airlines and Virgin America are different airl ines, but we
believe different works,” Tilden announced when t he merger was completed. He also plans to
bring some of Virgin ‘s hip culture to Alaska.
405
“Culture has been a real challenge in many mergers, so we’re working to do things differently,”
says Ben Minicucci, the Canadian executive who is Alaska Air’s president and is leading the
integration. “We are being very thoughtful about culture and are working to create an environment
that reflects who we are and where we’ve been. that also enables us to work together, be bold, and
succeed in a rapidly evolving industry.”62
©AP Photo/Ted S. Warren, File/CP Images
Changing and Strengthening O rganizational Culture
LOS Is it possible to change an organization’s culture? Yes, but doing so isn’t easy, the change
rarely occurs quickly, and often the culture ends up changing (or replacing) corporate lead-
ers. A few experts argue that an organization’s culture “cannot be managed,” so attempt-
ing to change the company’s values and assumptions is a waste of time.63 This may be an extreme view,
but organizational culture experts generally agree that changing an organization’s culture is a monumen-
tal challenge. At the same time, the external environment changes over time, so organizations need to
shift their culture to maintain al ignment with the emerging environment.
Over the next few pages, we will highlight five strategies that have had some success at altering
corporate cultures. These strategies, illustrated in Exhibit 14.6, are not exhaustive, but each seems to
work well under the right circumstances.

406 Part Four Organizational Processes
EXHIBIT 14.6 Strategies for Changing and Strengthening Organizational Cult ure
Support
workforce
stability and
communication
Changing and
Strengthening
Organizational
Culture
Introduce
culturally consistent
rewards/recognition
Align artifacts
with the
desired culture
MODEL DESIRED CULTURE THROUGH ACTIONS OF
FOUNDERS AND LEADERS
Whether deliberately or haphazardly, the company’s founder usually forms an organization’s culture.64
The founder’s personality, values, habits, and critical events all play a role in establishing the firm’s core
values and assumptions. The founder is often an inspiring visionary who provides a compelling role
model for others to follow. In later years, organizational culture is reinforced through stories and legends
about the founder that symbolize the core values. “All companies, especially entrepreneurial companies,
take the shape of the owner,” says Bruce Poon Tip, CEO and founder of Toronto-based G Adventures.
For example, he says “we have a culture of winning and a culture of excellence that is driven by me.”65
Although fmmders usually establish an organization’s culn~re, subsequent leaders need to actively guide,
reinforce, and sometimes alter that culture.66 This advice was recently echoed by Bill Emerson, CEO of
Quicken Loans. ‘1f you don’t spend time to create a culture in your organization, one will create it~elf,” he
warns. “And the one that creates itself is probably not going to be good.’.67 The process of leading cul-
tural change is a~iated with both transformational leadership and authentic leadership (see Chapter I 2).
In each of those models, leaders base their words and actions on personal values, and those values poten-
tial ly become a reflection of the organization’s values. For instance, one recent study found that the pre-
ferred confl ict-handling style of leaders influences the work unit’s or organization’s cultural expectations
of how employees address conflict sintations. Another study reported that work units or companies with
strong servant leadership were more likely to have a culture that valued providing service to others68
ALIGN ARTIFACTS WITH THE DESIRED CULTURE
Artifacts represent more than just the visible indicators of a company’s cultme. They are also mecha-
nisms that keep the culture in place or shift the culture to a new set of values and a~sumptions. A~ we
discuss in the next chapter on organizational change, systems and structures are powerful mechanisms
to support the desired state of affairs. These systems and structures are artifacts, such as the workplace

Chapter Fourteen Organizational Culture 407
layout, reporting structure, office rituals, type of information distributed, and language that is reinforced
or discouraged. Corporate cultures are also strengthened through the artifacts of stories and behaviours.
According to Max DePree, former CEO of furnintre manufacturer Herman Miller Inc., every organi-
zation needs “tribal storytellers” to keep the organization’s history and culture alive.69 Leaders play a
role by creating memorable events that symbol ize the cultural values they want to develop or maintain.
INTRODUCE CULTURALLY CONSISTENT REWARDS AND RECOGNITION
Reward systems and informal recognition practices are artifacts, but they deserve separate discussion
because of their powerful effect on strengthening or reshaping an organization’s culture.7° For example,
to change Home Depot’s freewheel ing culture, Robert Nardelli introduced precise measures of corpo-
rate performance and dri lled managers with weekly performance objectives related to those metrics.
A two-hour weekly conference call became a ritual in which Home Depot’s top executives were held
accountable for the previous week’s goals. These actions reinforced a more discipl ined (and central-
ized) performance-oriented culture.71
SUPPORT WORKFORCE STABILITY AND COMMUNICATION
An organization’s culture is embedded in the minds of its employees. Organizational stories are rarely
written down; rituals and ceremonies do not usual ly exist in procedure manuals; organizational meta-
phors are not found in corporate directories. Thus, a strong culture depends on a stable workforce.
Workforce stability is also important because it takes time for employees to fully understand the orga-
nization’s culture and how to enact it in their daily work lives. The organization’s culture can liter-
ally disintegrate during periods of high turnover and precipitous downsizing because the corporate
memory leaves with the departing employees.
Along with workforce stabi lity, a strong organizational culture depends on a workplace where
employees regularly communicate with each other. This ongoing communication enables employees to
develop shared language, stories, and other artifacts. Clio’s recently developed headquarters has played
an important role in this regard. The new campus in Burnaby has an open-office design, breakout
spaces that encourage spontaneous informal interaction among employees, and a lunch room where
employees are encouraged to gather at any time of day. In addition, the company hosts regular social
events and other forms of social bonding. Clio even has an annual multi-day strategy session at its
Burnaby headquarters which is attended by even the most remote employees.
USE ATTRACTION, SELECTION, AND SOCIALIZATION
FOR CULTURAL FIT
A valuable way to strengthen and possibly change an organization’s culture is to recruit and select job
appl icants whose values are compatible with the culture. For example, Clio co-founders Jack Newton
and Rian Gauvreau were able to strengthen and guide the company’s culture in the early years by
personally screening every applicant for cultural fit. One recent survey of more than 2,000 American
hiring managers and human resource managers found that a job applicant’s fit with the company’s cul-
ture was the second most important factor in the decision to hire that person (appl icant skills was the
top priority). A global poll of almost 170,000 people in 30 countries reported that the organization’s
culture has the greatest influence on their decision to apply for a job.72
This process of recruiting, selecting, and retaining applicants whose values are congruent with the
organization’s culture is explained by attraction-selection-attrition (ASA) theory.73 ASA theory
states that organizations have a natural tendency to attract, select, and retain people with values and
personality characteristics that are consistent with the organization’s character, resulting in a more
homogeneous organization and a stronger culture.
Anraction. Job applicants engage in self-selection by avoiding prospective employers whose
values seem incompatible with their own values.74 They look for subtle artifacts during
interviews and through public information that communicate the company’s culture. Some
organizations encourage this self-selection by actively describing their cultures. At Bankwest,

408 Part Four Organizational Processes
for instance, job seekers can complete an onl ine quiz that estimates their fit with the Australian
financial institution’s collegial, developmental, customer-focused culture75
Selection. How well the person “fits” in with the company’s culture is often a factor in deciding
which job applicants to hire. 76 Zappos carefully selects applicants whose personal values are
aligned with the company’s values. The applicant is first assessed for technical skills and experience
at the online shoe and clothing retailer, then he or she receives “a separate set of interviews purely
for culture fit,” says CEO Tony Hsieh. Unusual methods are sometimes applied to determine how
well an applicant’s values are compatible with Zappos’ culture. For example, to determine an appli-
cant’s humility (one of Zappos’ core values}, staff a~k the Zappos-hired driver how well he or she
was treated by the applicant during the drive to the company’s headquarters in La~ Vegas.
Attrition. People seek environments that are sufficiently congruent with their personal values and are
motivated to leave environments that are a poor fit. This occurs because person-organization values
congruence supports their social identity and minimizes internal role conflict. Even if employees
aren’t forced out, many quit when values incongruence is sufficiently high.n Zappos, Vancity,
As one of the world’s most successful adventure travel companies, G Adventures depends on a
strong culture to guide employee decisions and behaviour. The Toronto-based firm maintains a
strong culture by carefully hiring people whose values are compatible with it. “You can teach people
the skills they need but you can’t teach culture,” explains G Adventures founder Bruce Peon Tip.
Job applicants short-listed by senior staff participate in the company’s quirky G-Factor
Interview, which is conducted by a random selection of three staff members. Job interviews at
Base Camp (Toronto headquarters) occur in the “ball pit,” the small room shown in this photo filled
about one-th ird metre high with plastic balls.
The applicant answers several questions randomly chosen by the spin of a large prize wheel
on t he wall (left side of this photo). The questions are unusual, such as: “If you had a tattoo on
your forehead, what would it be?” Employees listen carefully to the answers to determine whether
the applicant’s values are compatible w ith G Adventures’ culture. Applicants who fail the G-Factor
Interview don’t get hired, even if they have exceptional skills.78
©G Adventures

Chapter Fourteen Organizational Culture
G Adventures, and a few other companies will even pay newcomers to quit within the ftrst few
weeks of employment if the new employees think their personal values conflict with the
company’s culntre.
Organizational Socia lization
409
L06 Organizational socialization is another process that companies use to maintain a strong
corporate culture and, more generally, help people to adj ust to new employment.
Organizational socialization is the process by which individuals Jearn the values,
expected behaviours, and social knowledge necessary to assume their roles in the organization.79 This
process can potentially change employee values to become more al igned with the company’s culntre.
However, changing an employee’s personal values is much more difficult than is often assumed,
because personal values are fairly stable beyond early adulthood. More likely, effective socialization
gives newcomers a clearer understanding about the company’s values and how they are translated into
specific on-the-job behaviours.80
Along with supporting the organization’s culture, socialization helps newcomers adjust to co-workers,
work procedures, and other corporate realities. Research indicates that when employees are effectively
social ized into the organization, they tend to perform better, have higher job satisfaction, and remain
longer with the organization.81
LEARNING AND ADJUSTMENT PROCESS
Organizational socialization is a process of both learning and adjustment. It is a learning process because
newcomers try to make sense of the company’s physical workplace, social dynamics, and strategic and
cultural environment. They Jearn about the organization’s performance expectations, power dynamics,
corporate culntre, company history, and jargon. They also need to form successful and satisfying rela-
tionships with other people from whom they can Jearn the ropes.82 In other words, effective socializa-
tion supports newcomers’ organizational comprehension. It accelerates development of an accurate
cognitive map of the physical, social, strategic, and cultural dynamics of the organization. Ideally, this
learning should be distributed over time to minimize information overload.
Organizational socialization is also an adjustment process because individuals need to adapt to their
new work environment. They develop new work roles that reconfigure their social identity, adopt new
team norms, and practise new behaviours.83 The adjustment process is fairly rapid for many people,
usually occurring within a few months. However, newcomers with diverse work experience seem to
adjust better than those with limited previous experience, possibly because they have a larger toolkit of
knowledge and ski lls to make the adjustment possible.84
PSYCHOLOGICAL CONTRACTS
The psychological contract refers to the individual’s bel iefs about the terms and conditions of a
reciprocal exchange agreement between that person and another party (the employer in most work
situations). The psychological contract is a perception formed during recruitment and throughout the
organizational socialization process about what the employee is entitled to receive and is obliged to
offer the employer in return.85
Job applicants form perceptions of what the company wi ll offer them by way of career and learning
opportunities, job resources, pay and benefits, qual ity of management, job security, and so forth. They
also form perceptions about what the company expects from them, such as hours of work, continu-
ous ski ll development, and demonstrated loyalty. The psychological contract continues to develop and
evolve after job appl icants become employees, but they are also continuously testing the employer’s
fulfilment of that exchange relationship.

410 Part Four Organizational Processes
Steve Wu assumed that his new job as an investment analyst would involve long hours working
on prestigious fast-paced deals. The recent UCLA graduate experienced the long hours, but
much of the work was drudgery. The reality shock and psycholog ical contract violation motivated
Wu to quit j ust one month before his first year, forfeiting a five-figure bonus. He has since joined a
mobile-gaming startup.
Chris Martinez also expected long hours at the private equity firm that hired him, but admits
the work involved “repetitive, simple work” on spreadsheets, little of which was ever seen by
corporate clients. “It’s almost expected that an analyst, especially in their first year, is just going to
be miserable,” says Martinez, who has since q uit.
Wu and Martinez are two of the many investment analysts in recent years who concluded
that their psychological contracts had been v iolated. One recent study found that new hires at a
dozen investment banks stayed an average of only 17 months, down from 26 months a decade
earlier and 30 months two decades ago86
© Tetra Images/Getty Images
Types of Psychological Contracts Some psychological contracts are more transactional
whereas others are more relational.87 Transactional contracts are primarily short-term economic
exchanges. Responsibil ities are well defined around a fairly narrow set of obligations that do not
change over the life of the contract. People hired in temporary positions and as consultants tend to have
transactional contracts. To some extent, new employees also form transactional contracts until they
develop a sense of continuity with the organization.88
Relational contracts, on the other hand, are rather like marriages; they are long-term attach-
ments that encompass a broad array of subjective mutual obligations. Employees with a relational
psychological contract are more willing to contribute their time and effort without expecting the
organization to pay back this debt in the short term. Relational contracts are also dynamic, mean-
ing that the parties tolerate and expect that mutual obligations are not necessarily balanced in the
short-run. Not surprising ly, organizational citizenship behaviours are more likely to prevail under
relational than transactional contracts . Permanent employees are more likely to be lieve they have a
relational contract.

Chapter Fourteen Organizational Culture 41 1
STAGES OF ORGANIZATIONAL SOCIALIZATION
Organizational socialization is a continuous process, beginning before you submit a job application
and continuing throughout your career within the company. However, it is most intense when people
move across organizational boundaries, such as when they first j oin a company or get transferred to an
international a~signment. Each of these transitions is a process that can be divided into three stages.
Our focus here is on the socialization of new employees, so the three stages are called pre-employment
social ization, encounter, and role management (see Exhibit 14.7). These stages parallel the individual’s
transition from outsider to newcomer and then to insider.89
Stage 1: Pre-employment Socialization Think back to the months and weeks before you
began working in a new job (or attending a new school). You actively searched for information about
the company, formed expectations about working there, and felt some anticipation about fitting into
that environment. The pre-employment social ization stage encompasses all the learning and adjust-
ment that occurs before the first day of work. In fact, a large part of the socialization adjustment pro-
cess occurs during this stage.90
The main problem with pre-employment socialization is that outsiders rely on indirect informa-
tion about what it is like to work in the organization. This information is often distorted by inherent
conflicts that arise during the mating dance between employer and applicant.91 One conflict occurs
between the employer’s need to attract qualified applicants and the applicant’s need for complete infor-
mation to make accurate employment decisions. Many firms describe only positive a~pects of the job
and company, causing applicants to accept job offers with incomplete or false expectations.
Another conflict that prevents accurate information exchange occurs when appl icants avoid a~king
important questions about the company because they want to convey a favourable image to their pro-
spective employer. For instance, applicants usually don’t like to a~k about starting salaries and promo-
tion opportunities because it makes them seem greedy or aggressive. Yet, unless the employer provides
this information, applicants might fill in the missing details with false a~sumptions that produce inac-
curate expectations.
Two other types of conflict tend to distort pre-employment information for employers. Applicants
engage in impression management when seeking employment, motivating them to hide negative infor-
mation, act out of character, and occasional ly embellish information about their past accomplishments.
At the same time, employers are sometimes reluctant to ask some types of questions or use potential ly
valuable selection devices because they might scare off applicants. Unfortunately, employers form
inaccurate expectations about job candidates because they receive exaggerated resumes and are often
reluctant to a~k for more delicate information from those applicants.
Stage 2: Encounter The first day on the j ob typically marks the beginning of the encounter stage
of organizational socialization. This is the stage in which newcomers test how well their pre-employment
expectations fit reality. Many companies fail the test, resulting in reality shock-the stress that results
EXHIBIT 14.7 Stages of Organizational Socialization
Pre-employment
socialization
(outsider)
• l earn about the
organization and
job
• Form employment
relationship
expectations
Encounter
(newcomer)
• Test expectations
– against perceived
realities
Role
management
(insider)
• Strengthen work
relationships
• Practise new role
behaviours
• Resolve work-
nonwork conflicts
Socialization
outcomes
• Higher molivation
• Higher loyally
• Higher satisfaction
• Lower stress
• Lower unover

412 Part Four Organizational Processes
when employees perceive discrepancies between their pre-employment expectations and on-the-job
reality.92 Reality shock doesn’t necessari ly occur on the first day; it might develop over several weeks
or even months as newcomers form a better understanding of their new work environment.
Reality shock is common in many organizations. 93 Newcomers sometimes face unmet expecta-
tions whereby the employer doesn’ t deliver on its promises, such as failing to provide chal lenging
projects or the resources to get the work done. However, new hires also experience reality shock
due to unrealistic expectations, which are distorted work expectations formed from the information
exchange conflicts described earlier. Whatever the cause, reality shock impedes the learning and
adjustment process because the newcomer’s energy is directed toward managing the resulting stress.94
Stage 3: Role Management Role management, the third stage of organizational socialization,
really begins during pre-employment socialization, but it is most active a~ employees make the transition
from newcomers to insiders. They strengthen relationships with co-workers and supervisors, practise new
role behaviours, and adopt attitudes and values consistent with their new positions and the organization.
Role management also involves resolving the conflicts between work and nonwork activities, including
resolving discrepancies between their personal values and those emphasized by the organizational culture.
IMPROVING THE SOCIALIZATION PROCESS
Companies have a tendency to exaggerate positive features of the job and neglect to mention the unde-
sirable elements. Their motivation is to attract as many job applicants as possible, which they assume
wi ll improve the selection choices. Unfortunately, this flypaper approach often ends badly. Those hired
soon discover that the actual workplace is not as favourable a~ the employer’s marketing hype (i.e., unmet
expectations), resulting in real ity shock and a broken psychological contract. In contrast, a realistic
job preview (RJP) offers a balance of positive and negative information about the job and work
context.95 This balanced description of the company and work helps job applicants to decide for them-
selves whether their skills, needs, and values are compatible with the job and organization.
RJPs scare away some applicants, but they also tend to reduce turnover and increase job perfor-
mance.96 This occurs because RJPs help applicants develop more accurate pre-employment expec-
tations, which, in turn, minimize real ity shock. RJPs represent a type of vaccination by preparing
employees for the more challenging and troublesome aspects of the work context. There is also some
evidence that RJPs increase affective organizational commitment. One explanation is that companies
providing candid information are easier to trust. Another explanation is that RJPs show respect for the
psychological contract and concern for employee welfare.97
Socialization Agents Ask new employees what most helped them to adjust to their j obs and
chances are they will mention helpful co-workers, bosses, or maybe even friends who work elsewhere
Global Connections 14.2:
CONNECTED SOCIALIZATION AT TRIVAGO
trivago, the world ‘s largest hotel search company, puts considerable resources into its talent
(employee) socialization process. Before their first day of work, new hires are assigned a
buddy to answer their questions. The entire fi rst week of employment is dedicated to socializa-
tion and other aspects of on boarding at the company’s headquarters in Dusseldorf, Germany.
Throughout the week, new employees attend information sessions (as shown in this
photo) and enjoy several events that help them learn more about the company and form strong
bonds with each other. “The whole mission during this week is to get to know trivago, integrate
into our culture here, and get to know as many people as possible,” explains Samantha Strube,
trivago’s talent integration team leader.98

Chapter Fourteen Organizational Cultu re
trivago, the world’s largest hotel search company, invests considerable time and resources
in the socialization of new employees.
©trivago
413
in the organization. The fact is, socialization agents play a central role in this process.99 Supervisors
tend to provide technical information, performance feedback, and information about j ob duties. They
also improve the social ization process by giving newcomers reasonably challenging first a~signments,
buffering them from excessive demands, helping them form social ties with co-workers, and generating
positive emotions around their new work experience.100
Co-workers are important socialization agents because they are easily accessible, can answer ques-
tions when problems arise, and serve a~ role models for appropriate behaviour. New employees tend to
receive this information and support when co-workers welcome them into the work team. Co-workers
also aid the socialization process by being t1exible and tolerant in their interactions with new hires.
Newcomer socialization is most successful when companies help to strengthen social bonds
between the new hires and current employees. Cisco Systems is a role model in th is regard. For
example, one newcomer at the California-based Internet technology company recently described how
during her first two weeks teammates helped her learn about the work context, took her out to res-
taurants, actively sought her ideas in team meetings, and held a game night so everyone could have
fun socializing after work. Another good example is apparent at Lupin Limited, which has a popular
buddy system that not only improves socialization of newcomers at the Mumbai, India, pharmaceuti-
cal company; it ha~ also become a valuable form of leadership development for the buddy co-worker.
“A happy by-product of the buddy program is the biggest supervisor training program the company
has ever conducted in its history,” says Divakar Kaza, Lupin’s president of human resources. 10 1
Chapter Summary
LO 1 Describe the elements of organizational culture and discuss the importance of organizational
subcultures.
Organizational culture consists of the values and assumptions shared within an organization. Shared
assumptions are nonconscious, taken-for-granted perceptions or beliefs that have worked so well in the past that
they are considered the correct way to think and act toward problems and opportunities. Values are stable, evalua-
tive beliefs that guide our preferences for outcomes or courses of action in a variety o f situations.

414 Part Four Organizational Processes
Organizations differ in their cultural content, that is, the relative ordering of values. There are several classifi-
cations of organizational culture, but they tend to oversimplify the wide variety of cultures and completely ignore
the underlying assumptions of culture. Organizations have subcultures as well as the dominant culture. Subcul-
tures maintain the organization’s standards of performance and ethical behaviour. They are also the source of
emerging values that replace misal igned core values.
L02 List four categories of artifacts through which corporate culture is d ecip hered.
Artifacts are the observable symbols and signs of an organization’s culture. Four broad categories of
artifacts include organizational stories and legends, rituals and ceremonies, language, and physical
structures and symbols. Understanding an organ ization’s culture requires assessment of many artifacts because
they are subtle and often ambiguous.
L03 Discuss the importance of organizational culture and the conditions under which organizational
culture s trength improves organizational performance.
Organizational culture has three main functions: it is a form of social control, the “social glue” that
bonds people together, and a way to help e mployees make sense of the workplace. Companies with strong cultures
generally perform better than those with weak cultures, but only when the cultural content is appropriate for the
organization’s environment. Also, the culture should not be so strong that it drives out dissenting values, which
may form emerging values for the future. Organizations should have adaptive cultures so that employees support
ongoing change in the organization and their own roles.
L04 Compare and cont rast four st rategies for merging organiza tional cultures.
Organizational culture cla~hes are conm10n in mergers and acquisitions. This problem can be minimized
by perfonning a bicultural audit to diagnose the compatibility of the organizational cultures. The four
main strategies for merging different corporate cultures are assimilation, deculturation, integration, and separation.
LOS Describe five strategies for changing and s trengthening an organization ‘s culture, including
the application of attraction-selection-attrition theory.
An organization’s culture begins with its founders and leaders, because they use personal values to trans-
form the organization. The founder’s activities are later retold a~ organizational stories. Companies also introduce arti-
fact~ a~ mechanisms to maintain or change the culture. A related strategy is to introduce rewards and recognition practice~
that are consistent with the desired cultural values. A fourth method to change and strengthen an organization’s culture is
to support workforce stability and communication. Stability is necessary because culture exist~ in employees. Conmmni-
cation activities improve sharing of the culture. Finally, companies strengthen and change their culture by attracting and
selecting applicants with personal values that fit the company’s culture, by encouraging those with misaligned values to
leave the company (attrition), and by engaging in organizational socialization-the process by which individuals leam
the values, expected behaviours, and social knowledge necessary to a<;,~ume their roles in the organization. LOG Describe the organizational socialization p rocess and identify s trategies to improve that process. Organizational socialization is the process by which individuals learn the values, expected behav- iours, and social knowledge necessary to assume their roles in the organ ization. It is a process of both learning and adjustment. During this process, job applicants and newcomers develop and test their psycho- logical contract-personal beliefs about the terms and conditions of a reciprocal exchange agreement between that person and another party (the employer). Employees typically pas.~ through three socialization stages: pre-employment, encounter, and role management. To manage the socialization process, organizations should introduce realistic job previews (RJPs) and recognize the value of socialization agent~ in the proces.~ . RJPs give job applicant~ a realistic balance of positive and negative information about the job and work context. Socialization agent~ provide information and social support during the socialization process. Key Terms adaptive culture artifacts attraction -selection -attrition (ASA) theory bicultural a udit ccrcntonies organizational culture organizational socialization psychological con tract realistic job preview (RJP) reality shock rituals Chapter Fourteen Organizational Cultu re 4 15 Critical Thinking Questions 1. Superb Consultants has submitted a proposal to analyze your organization's culture. The proposal states that Superb has developed a revolutionary new survey to tap the company's true culture. The survey takes just 10 minutes to complete, and the consultants say results can be based on a small san1ple of employees. Discuss the merits and limitations of this proposal. 2. Some people suggest that the most effective organizations have the strongest cultures. What do we mean by the "strength" of organizational culture, and what possible problems are there with a strong organizational culture? 3. The CEO of a manufacturing firm want~ everyone to support the organization's dominant culture of lean effi- c iency and hard work. The CEO ha~ introduced a new reward system to rein force this culture and personally interviews all professional and managerial applicants to ensure that they bring s imilar values to the organiza- tion . Some employees who criticized these values had their careers sidel ined until they left. Two midlevel managers were fired for supporting contrary values, such as work-life balance. Ba~ed on your knowledge of organizational subcultures, what are the potential problems the CEO is creating? 4. Identify at lea~t two artifacts you have observed in your department or school from each of the four broad categories: (a) organizational stories and legends, (b) rituals and ceremonies, (c) language, (d) physical struc- tures and symbols. 5. "Organizations are more like ly to succeed when they have an adaptive culture." What can an organization do to foster an adaptive culture? 6. Suppose you are a~ked by senior officers of a city government to identify ways to re inforce a new culture of teamwork and collaboration. The senior executive group clearly supports these values, but it wants everyone in the organization to embrace them. Identify four types of activities that would strengthen these cultural values. 7. Is it possible to have knowledge of what an organizational culture is before you become a part o f the organi- zation? How important is it for you to al ign yourself with your organizational culture? 8. Socialization is most intense when people pass through organizational boundaries. One exan1ple is your entry into the college or university that you are now attending. What learning and adjustment occurred as you moved from outsider to newcomer to insider a~ a student? Case Study: HILLTON'S TRANSFORMATION by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canada) 1\venty years ago, Hillton wa~ a small city (about 70,000 residents) that served as an outer suburb to a large Canadian metropolitan city. Hillton's munic ipal government treated its employees like family and gave them a great deal of autonomy in their work. Everyone in the organization (including the two labour unions representing employees) implicitly agreed that the leaders and supervisors of the organization should rise through the ranks ba~ed on their experience. Few people were ever hired from the outside into middle or senior positions. The rule of employment at Hillton was to learn the job skills, maintain a rea~onably good work record, and wait your turn for promotion. As Hi llton's population grew, so did the city's workforce to keep pace with the increa~ing demand for municipal services. This meant that employees were promoted fairly quickly and were almost a~sured lifetime employment. Until recently, Hillton had never laid off any employee. The organization's culture could be described a~ one of entitlement and comfort. Neither the e lected city councillors nor the c ity manager bothered departmental managers about their work. There were few cost controls, because rapid growth placed more empha~is on keeping up with the population expansion. The public became somewhat more critical of the city's poor service, including road construction at inconvenient times and the apparent lack of respect some employees showed toward taxpayers. During these expansion years, Hillton put most of its money into "outside" (also called "hard") municipal ser- vices. These included road building, utility construction and maintenance, fire and police protection, recreational facilities, and land use control. This emphasis occurred because an expanding population demanded more of these services, and most of Hillton's senior people came from the outside services group. For example, Hillton's city 4 16 Part Four Organizational Processes manager for many years was a road development engineer. The "inside" workers (taxation, community services, etc.) tended to have less seniority, and their departments were given less priority. As conmmter and road systems developed, Hillton attracted more upwardly mobile professionals into the commu- nity. Some infra~tructure demands continued, but now these suburban dwellers wanted more of the "soft" services, such as libraries, social activities, and community services. They also began complaining about the way the municipal- ity was being run. By this time, the population had more than tripled , and it was increa~ingly apparent that the organization needed more corporate planning, information systems, organization development, and cost control systems. In various ways, residents voiced their concerns that the munic ipality was not providing the quality of management that they would expect from a city of it~ size. A few years ago, a new mayor and council replaced most o f the previous incumbents, mainly on the platform of improving the municipality's management structure. The new council gave the c ity manager, along with two other senior managers, an early retirement buyout package. Rather than promoting from the lower ranks, council decided to fi ll all three positions with qualified candidates from large municipal corporations in the region. The following year, several long-term managers left Hillton, and at least half of those positions were filled by people from outside the organization. In less than two years, Hillton had eight senior or departmental managers hired from other municipalities who played a key role in changing the organization's value system. These eight managers became known (often with nega- tive connotations) a~ the "professionals." They worked closely with one another to change the way middle- and lower- level managers had operated for many years. They brought in a new computer system and empha~ized cost controls where managers previously had complete autonomy. Promotions were increa~ingly ba~ed more on merit than seniority. The "professionals" frequently announced in meetings and newsletters that municipal employees must provide superlative custo mer service and that Hillton would become one of the most customer-friendly places for citizens and those who do business with the munic ipality. To this end , these managers were quick to support the public's increasing demand for more "soft" services, including expanded library services and recreational activities. And when population growth recently flattened out, the city manager and other professionals gained council support to lay off a few of the outside workers due to lack of demand for hard services. One of the most significant changes wa~ that the "outside" departments no longer held dominant positions in city management. Most of the "professional" managers had worked exclusively in administrative and related inside jobs. Two had Ma~ter of Business Administration degrees. This led to some tension between the profes- s ional managers and the o lder outside managers. Even before the layoffs, managers of outside department~ resisted the changes more than others. These manag- ers complained that their employees with the highest seniority were turned down for promotions. They argued for more budget and warned that infra~tructure problems would cause liability problems. lnfom1ally, these out~ide managers were supported by the labour union representing outside workers. The union leaders tried to bargain for more job guarantees, whereas the union representing inside workers focused more on improving wages and benefits. Leaders of the outside union made several statement~ in the local media that the city had " lost its heart" and that the public would suffer from the actions of the new professionals. Discussion Questions I. Contrast Hillton's earlier corporate culture with the emerging set of cultural values. 2 . Considering the difficulty in changing organizational culture , why does Hillton's management seem to have been successful in this transformation? 3. Identify two other strategies that the city might consider to reinforce the new set of corporate values. Copyright ~2000 Steven L. McShane. This case is a slightly fictionalized account of actual events in a Canadian municipality. Team Exercise: ORGANIZATIONAL CULTURE METAPHORS by David L. Luechauer, Bu tler University and Gar y M. Shulman, Miami University Purpose Both parts of this exercise are designed to help you understand, assess, and interpret organizational culture using metaphors. r- Chapter Fourteen Organizational Cultu re 41 7 PART A: ASSESSING YOUR SCHOOL'S CULTURE Instructions A metaphor is a figure of speech that contains an implied comparison between a word or phrase that is ordinarily used for one thing but can be applied to another. Metaphors also carry a great deal of hidden meaning- they say a lot about what we think and feel about that object. Therefore, this activity asks you to use several metaphors to define the organizational culture of your university, college, or institute. (Alternatively, the instructor might ask students to assess another organization that most students know about.) Srep I: The class will be divided into teams of 4 to 6 members. Srep 2: Each team wiU reach consensus on which words or phrases should be inserted in the blanks of the statement~ presented below. This infom1ation should be recorded on a flip chart or 0\-erhead acetate for clas.~ presentation. The instructor wiU provide 15 to 20 minutes for tean1s to detemline which words best describe the college's culture. If our school was an animal, it would be a ___ because __ _ If our school was a food, it would be ___ because---· If our school wa~ a place, it would be ___ because __ _ If our school wa~ a sea~on, it would be ___ because---· If our school wa~ a TV show or movie, it would be ___ because ---· Srep 3: The class wi ll listen to each team present the metaphors that it believes symbolizes the school's culture. For example, a team that picks winter for a season might mean they are feeling cold or distant about the school and its people. Srep 4: The cla~s will discuss the questions stated below. DISCUSSION QUESTIONS FOR PART A 1. How easy wa~ it for your group to reach consensus regarding these metaphors? What does that imply about the culture of your school? 2. How do you see these metaphors in action? In other words, what are some critical school behaviours or other artifacts that reveal the presence of your culture? 3. Think of another organization to which you belong (e.g., work, religious congregation). What are its dominant cultural values, how do you see them in action, and how do they affect the effectiveness of that organization? PART B: ANALYZING AND INTERPRETING CULTURAL METAPHORS Instructions Previously, you completed a metaphor exercise to describe the corporate culture of your school. That exercise gave you a taste of how to administer such a diagnostic tool and draw inferences from the results generated. This activity builds on that experience and is designed to help refine your ability to analyze such data and make suggestions for improvement. Five work teams (4 to 7 members, mixed gender in all groups) of an organization completed the metaphor exercise s imilar to the exercise in which you participated in cla~s (see Part A above). Their responses are shown in the table below. Working in tean1s, analyze the information in this table and answer these questions: DISCUSSION QUESTIONS FOR PART B 1. In your opinion, what are the dominant cultural values in this organization? Explain your answer. 2. What are the positive aspects o f this type of culture? 3. What are the negative a~pects of d1is type of culture? 4 . What is this organization's main bus iness, in your opinion? Explain your answer. 5. These groups all report to one manager. What advice would you give to that person about this unit? - Metaphor Resu]L'i of Five Teams in an Organizationa Team Animal Food Place TV Show Season I Rabbit Big Mac Casino Parks & Recreation Spring 2 Horse Taco Racetr•ck CSI Spring 3 Elephant Ribs Circus Big Bang Theory Summer 4 Eagle Big Mac Las Vegas Drogon:r"Den Spring 5 Panther Chinese New York Crimina{ Minds Racing Sourr:e: Adapted from D. L. luechauer and G. M. Shulman. "Using a Metaphor E:ted by the authors of this activity.

418 Part Four Organizational Processes
Self-Assessments for Chapter 14
SELF-ASSESSMENT NAME
Which corporate culture do you prefer?
DESCRIPTION
An organization’s culture may be very appealing to some people
and much less so to others. Afte r all. each of us ha.’i a hierarchy o f
persona] values. and that hier.trchy may be compatible or incompat·
ible with the company•s shared values. This self-assessment
identifies the corporate culture that fiL~ most closely with your
persona] values and a’isumptions.

CHAPTER 15
Organizational Change
LEARNING OBJECTIVES
After reading this chapter, you should be able to
LO 1 Describe the elements of Lewin’s force fie ld analysis model.
L02 Discuss the reasons why people resist organizational change and how change agents should view
this resistance.
L03 Outline six strateg ies for minimizing resistance to change, and debate ways to effectively create an
urgency for change.
L04 Discuss how leadership, coalitions, social networks, and pilot projects assist organizational change.
LOS Describe and compare action research, appreciative inquiry, large group interventions, and parallel
learning structures as forma l approaches to organizational change.
LOG Discuss two cross-cu ltura l and three ethical issues in organizational change.
Blueshore Financial was founded in the 1940s as North Shore Credit Union, mainly serving the
needs of shipbuilding workers and deep sea fishermen living along Vancouver’s north shore. North
Vancouver has since become one of Canada’s wealthiest areas, and its residents have much more
4 19

420 Part Four Organizational Processes
sophisticated banking needs. However, the credit union had not evolved until recently. “We were a
blue-collar credit union in a white-collar world,” admits Blueshore CEO Chris Catliff. “We were little
more than a paper-based savings and loan … We had no differentiated brand, and the credit union
was floundering.”
Catliff explained to employees that the organization’s survival depended on reinventing itself
to better serve its clients through differentiated financial services. He also cautioned that the
transformation would require considerable adaptability and commitment from “a dedicated team
hungry for change.”
A special task force of employees and managers worked with an external consultant to develop
the new business model. “They worked in a boardroom for two weeks, fuelled by pizza, the odd
beer and a desire to innovate,” recalls Catliff, who challenged the team “not to come back until
you’ve reinvented banking.” The task force proposed a list of dramatic innovations, including a
much narrower focus on wealth-oriented services in a “financial spa” setting, rather like a luxury
hotel. “You don’t have to be a big global organization to succeed in business, but sometimes you
have to have big ideas,” Catliff suggests.
Blueshore marketing vice-president Catharine Downes describes the credit union’s change
process as “a massive project, touching all aspects of our business, culture, and operations. It
demanded a highly orchestrated approach to ensure every single employee fully understood the
scope of the change. From both a tactical and cultural standpoint, rebrand ing represented a major
change management process for our associates and clients.”
Communication with employees was key to the success of Blueshore’s transformation. “The
most practical piece of advice I can offer others is to recogn ize the critical importance of open
communication in times of change. Be consistent, repetitive, and authentic,” Catliff advises.
“Tell them [employees and others] why you are changing and what you hope to gain from the
change.”
Catliff also emphasizes the power of employee involvement in organizational change. “Ask your
staff for their input, actively listen to what they have to say, and show you value their perceptions
and opinions. By doing this you will form a relationship based on mutual trust and respect, which
will make it easier for you to initiate and integrate change together.”
Blueshore’s radical transformation took several years and required some difficult adjustments.
“The tough part was that some staff didn’t like the change, and self-selected out,” says Catliff.
But the results have exceeded expectations. BlueShore Financial’s assets under administration
have jumped from over $700 million in 2000 to $4.7 billion today. Blueshore’s dozen branches
have become leading financial planning centres from Vancouver to Whistler. Blueshore is also
consistently rated as one of Canada’s best employers (small and medium category).’
B lueshore Financial’s transformation from a floundering mass market credit union to one of Van-couver’s leading financial planning f irms illustrates many of the strategies and practices neces-
sary to successfully change organizations. Chris Catliff, l ike other leaders looking for organizational
change, created an urgency for change, actively communicated the change process, and involved
employees as partners in the process. Blueshore’s transformation took several years and required dif-
ficul t adjustments. Indeed, most organizational change is messy, requ iring considerable leadership
effort and vigi lance. As we will describe throughout th is chapter, the challenge of change is not so
much in deciding which way to go; the challenge is in the execution of this strategy. When leaders
discover the need for change and identify some ideas about the preferred route to a better future, the
change process involves navigating around the numerous obstacles and gaining organization-wide
support for that change.
This chapter unfolds as follows. We begin by introducing Lewin’s model of change and its compo-
nent parts. This discussion includes sources of resistance to change, ways to minimize this resistance,
and ways to stabil ize desired behaviours. Next, the chapter examines four approaches to organizational
change-action research, appreciative inquiry, large group interventions, and parallel learning struc-
tures. The last section of this chapter considers both cross-cul tural and ethical issues in organizational
change.

Chapter Fifteen Organizational Change 4 21
Lewin’s Force Field Analysis Model
“I’ve always believed that when the rate of change inside an instin1tion becomes slower than
the rate of change outside, the end is in sight. The only question is when.”2 This statement
by former General Electric CEO Jack Welch highlights one of the messages throughout this
book: organizations operate as open systems that need to keep pace with ongoing changes in their external
environment, such as consumer needs, global competition, technology, community expectations, govern-
ment (de)reguJation, and environmental standards. Successful organizations monitor their environments
and take appropriate steps to maintain a compatible fit with new external conditions. Rather than resisting
change, employees in successful companies embrace change as an integral part of organizational life.
It is easy to see environmental forces pushing companies to change the way they operate. What is
more difficult to see is the complex interplay of these forces on the internal dynamics of organizations.
Social psychologist Kurt Lewin developed a model to describe this process using the metaphor of a force
field (see Exhibit 15. 1).3 Although it was developed more than 50 years ago, more recent reviews affirm
that Lewin’s force field analysis model remains one of the most widely respected ways of viewing the
change process.4
One side of the force field model represents the drivingforces that push organizations toward a new state
of affairs. These might include new competitors or technologies, evolving client expectations, or a host of
other environmental changes. Corporate leaders also produce driving forces even when external forces for
change aren’t apparent. For instance, some experts call for “divine discontent” as a key feaUire of success-
ful organizations, meaning that leaders continually urge employees to strive for higher standards or bet-
ter practices. Even when the company outshines the competition, employees bel ieve they can do better.
“We have a habit of divine discontent with our performance,” says creative agency Ogilvy & Mather
about its corporate culture. “It is an antidote to smugness.”5
The other side of Lewin’s model represents the restraining forces that maintain the status quo.
These restraining forces are commonly called “resistance to change” because they appear to block the
change process. Stability occurs when the driving and restraining forces are roughly in equilibrium-
that is, they are of approximately equal strength in opposite directions.
Lewin’s force field model emphasizes that effective change occurs by unfreezing the current situ-
ation, moving to a desired condition, and then refreezing the system so it remains in the desired state.
Unfreezing involves producing disequilibrium between the driving and restraining forces. As we will
EXHIBIT 15.1 Lewin’s Force Field Analysis Model
Desired
Condit ions
1
Current
Condit ions
Before Change ——- After Change

422 Part Four Organizational Processes
describe later, this may occur by increasing the driving forces, reducing the restraining forces, or doing
a combination of both. Refreezing occurs when the organization’s systems and structures are aligned
with the des ired behaviours. They must support and reinforce the new role patterns and prevent the
organization from slipping back into the old way of doing things. Over the next section, we use Lewin’s
model to understand why change is blocked and how the process can evolve more smoothly.
Understanding Resistance to Change
United Airl ines continues to suffer from operational and customer service problems
a few years after its merger with Continental Airlines. United executives say the poor
results are partly due to the challenges of combining complex reservation and opera-
tional systems. But they have also been frustrated by subtle forms of employee resistance to change.
Some Continental employees have opposed United Airlines’ operational practices, while some United
Airlines employees have failed to embrace Continental’s customer service standards. “You know, the
cultural change takes time,” explained the former United Airlines CEO who orchestrated the merger.
“And people resist change. People are sort of set in their ways.”6
Executives at United Airl ines experienced considerable resistance to change following the merger
with Continental Airl ines. Resistance to change takes many forms, ranging from overt work stoppages
to subtle attempts to continue the old ways.7 A study of Canadian bank employees reported that subtle
resistance is much more common than overt resistance. Some employees in that study avoided the
desired changes by moving into different jobs at the bank. Others continued to perform tasks the old
way as long as management didn’t notice. Even when employees complied with the planned changes,
they showed resistance by performing the new task whi le letting customers know that they disapproved
of these changes forced on them!8
• by the NUMBERS
Facing the Challenge of Resistance to Change9
of 517 Canadian human
resource managers
surveyed say employees
resist changes put forward
by management.
of 2,219 executives and
employees surveyed
globally say they suffer
from change fatigue (feeling
worn out from changing
too much or too often).
of 2,219 executives and
employees surveyed
globally say their company
doesn’t have the necessary
capabilities to ensure that
change is sustained over time.
of 814 recruitment
professionals surveyed
in the U.S., U.K., China,
and five other countries say
the main barrier to inno-
vation in their organization
is a corporate culture that
resists change.
33% of executives surveyed
in 328 organizations
(employing 5 million
people globally) report
that their managers are
effective at dealing openly
with resistance to change.

Chapter Fifteen Organizational Change 4 23
Most change agents are understandably frustrated by passive or active resistance to their planned
change, but resistance is a common and natural human response. As Canadian-born economist John
Kenneth Galbraith once quipped, “Faced with the choice between changing one’s mind and proving
that there is no need to do so, almost everyone gets busy on the proof.”10 Even when people support
change, they typically a~sume that it is others-not themselves-who need to do the changing.
Resistance is a form of conflict, but change agents unfortunately tend to interpret that disagreement
as relationship conflict (see Chapter I I). They describe the people who resist as unreasonable, dys-
functional, and irrational reactionaries to a desirable initiative. Perversely, the change agent’s conflict-
oriented response to resistance tends to escalate the conflict, which often generates even stronger
resistance to the change initiative.
A more productive approach is to view resistance to change a~ task conf1ict. From the task conflict
perspective, resistance is a signal either that the change agent has not sufficiently prepared employees for
change or that the change initiative should be altered or improved.11 Employees might not feel a sufficiently
strong urgency for change, or they might feel the change strategy is ill-conceived. Even if they recognize the
need for change and agree with the strategy, employees might resist because they lack confidence to change
or believe the change will make them worse off than the current sin1ation. Resistance takes many forms, and
change agents need to decipher those different types of resistance to understand their underlying causes.12
Resistance is also a form of voice, so the discussion potential ly improves procedural justice (see
Chapter 5) as well a~ decision making (see Chapter 7). By redirecting initial forms of resistance into
constructive conversations, change agents can generate a strong feeling of fairness among employees.
Furthermore, resistance is motivated behaviour; it potentially engages people to think about the change
strategy and process. Change agents can harness that motivational force to ultimately strengthen com-
mitment to the change initiative.
WHY EMPLOYEES RESIST CHANGE
Change management experts have developed a long list of reasons why people resist change.13 Some
people inherently oppose change because of their personality and values.14 Aside from these disposi-
tional factors, employees typically oppose organizational change because they lack suff icient motivation,
ability, role clarity, or situational support to change their attin1des, decisions, and behaviour. 15 In other
words, an employee’s readiness for change depends on all four elements of the MARS model. These
MARS elements are the foundations of the six most commonly cited reasons why people resist change:
(!)negative valence of change, (2) fear of the unknown, (3) not-invented-here syndrome, (4) breaking
routines, (5) incongruent team dynamics, and (6) incongruent organizational systems and structures.
Are you ready for change? You can discover your level of readiness for change by
completing this self-assessment in Connect.
Negative Valence of Change Employees tend to resist change when they bel ieve the new work
environment will have more negative than positive outcomes.16 In other words, they apply (although
imperfectly) the rational choice decision-making model (Chapter 7) to estimate whether the change
wi ll make them better or worse off (i.e., positive or negative valence). This cost-benefit analysis mainly
considers how the change wi ll affect them personally. However, resistance also increases when employ-
ees bel ieve the change will do more harm than good to the team, organization, or society.17
Fear of the Unknown Organizational change usually has a degree of uncertainty, and employees
tend to assume the worst when they are unsure whether the change will have good or bad outcomes.
Uncertainty is also associated with lack of personal control, which is another source of negative emo-
tions.18 Consequently, the uncertainty inherent in most organizational change is usually considered less
desirable than the relative certainty of the status quo. As such, it adds more negative valence to the
cost-benefit calculation we described above.

424 Part Four Organizational Processes
GEORGIA, USA
WELCOM ES
General Motors (GM) has in-sourced almost all of its information technology (IT) work, hired
10,000 IT employees to replace contractors, built new IT innovation centres, and reduced 23
data centres owned by suppliers to just two centres owned by GM. GM’s chief information
officer Randy Mott (shown in this photo) and his executive team faced many logistical challenges
throughout the transformation. They were also challenged by resistance from GM line managers,
many of whom were concerned that GM’s IT staff wouldn’t provide the same quality of service
that t he external contractors had provided.
“This supplier is doing a great job for me, so don’t mess it up,” some managers warned. Line
managers’ fear of the unknown and perceived negative outcomes about the IT changes led to
“some really frank discussions,” Mott acknowledges. “In the early days we were fighting the fact
that the IT organization’s credibility for building and creating and supporting things was not high.”19
©David Goldman/AP Photos/CP Images
Not-Invented-Here Syndrome Employees sometimes oppose or even discreetly undermine orga-
nizational change initiatives that originate elsewhere. This “not-invented-here” syndrome is most appar-
ent among employees who are usually responsible for the knowledge or initiative, rather than the external
sources.20 For example, information technology staff are more likely to resist implementing new technol-
ogy championed by marketing or finance employees. If the IT staff support the change, they are implicitly
acknowledging another group’s superiority within IT’s own area of expertise. To protect their self-worth,
some employees del iberately inflate problems with changes that they did not initiate, just to “prove” that
those idea~ were not superior to their own. As one consultant warned, “Unless they’re scared enough to
listen, they’ll never forgive you for being right and for knowing something they don’t.”21
An example of the not-invented-here syndrome occurred several years ago when Goldcorp CEO
Rob McEwan decided to post the Canadian mining company’s confidential geological data online
and offer a generous reward to anyone who could help find more gold on the property. The Goldcorp
Challenge wa~ a huge success, but the firm’s geological staff complained just before the event was
launched. “We have real concerns,” they told McEwen. “You’re going to ask the rest of the world to tell
you where we’ re going to find gold in our mine, and we think they’ re going to think we’ re real ly dumb
and that you don’t have any confidence in us.”22
Breaking Routines People are creatures of habit. They typically resist initiatives that require
them to come out of their comfort zones and to break those automated routines and learn new role pat-
terns. And unless the new patterns of behaviour are strongly supported and reinforced, employees tend

Chapter Fifteen Organizational Change 4 25
to revert to their past routines and habits. “When you are leading for growth, you know you are going
to disrupt comfortable routines and a~k for new behaviour, new priorities, new ski lls,” says Ray Davis,
executive chair of Oregon-based Umpqua Bank, which is regarded as one of America’s most innova-
tive financial institutions. “Even when we want to change, and do change, we tend to relax and the
rubber band snaps us back into our comfort zones.”23
Incongruent Team Dynamics Teams develop and enforce conformity to a set of norms that
guide behaviour (see Chapter 8). However, conformity to existing team norms may discourage employ-
ees from accepting organizational change. For instance, organizational initiatives to improve customer
service may be thwarted by team norms that discourage the extra effort expected to serve customers at
this higher standard.
Incongruent Organizational Systems and Structures Rewards, information systems, pat-
terns of authority, career paths, selection criteria, and other systems and structures are both friends
and foes of organizational change. When properly al igned, they reinforce desired behaviours. When
misaligned, they pull people back into their old attitudes and behaviour. Even enthusia~tic employees
lose momentum after fail ing to overcome the structural confines of the past.
Unfreezing, Changing, and Refreezing
According to Lewin’s force field analysis model, effective change occurs by unfreezing
the current situation, moving to a desired condition, and then refreezing the system so
it remains in this desired state. Unfreezing occurs when the driving forces are stronger
than the restraining forces. This happens by making the driving forces stronger, weakening or remov-
ing the restraining forces, or combining both.
The first option is to increase the driving forces, motivating employees to change through fear or
threats (real or contrived). This strategy rarely works, however, because the action of increasing the
driving forces alone is usually met with an equal and opposing increa~e in the restraining forces. A use-
ful metaphor is pushing against the coils of a mattress. The harder corporate leaders push for change,
the stronger the restraining forces push back. This antagonism threatens the change effort by producing
tension and conflict within the organization.
The second option is to weaken or remove the restraining forces. The problem with this change
strategy is that it provides no motivation for change. To some extent, weakening the restraining forces
is like clearing a pathway for change. An unobstructed road makes it easier to travel to the destination
but does not motivate anyone to go there. The preferred option, therefore, is to both increase the driv-
ing forces and reduce or remove the restraining forces. Increasing the driving forces creates an urgency
for change, whi le reducing the restraining forces lessens motivation to oppose the change and removes
obstacles such a~ lack of abi lity and sintational constraints.
CREATING AN URGENCY FOR CHANGE
A few months after he became CEO of Nokia Corp., Canadian executive Stephen Elop sent employees
a scorching email, warning them about the urgency for change. “I have learned that we are standing on
a burning platform,” wrote Elop. “And, we have more than one explosion-we have multiple points of
scorching heat that are fuell ing a blazing fire around us.” Elop specifically described strong competi-
tion from Apple and Google, Nokia’s tumbling brand preference, and its falling credit rating.24
Nokia has since sold its mobile phone division to Microsoft, but this incident illustrates how execu-
tives recognize the need for a strong urgency for change.25 Developing an urgency for change typical ly
occurs by informing or reminding employees about competitors, changing consumer trends, impend-
ing government regulations, and other forms of turbulence in the external environment. These are the
main driving forces in Lewin’s model. They push people out of their comfort zones, energizing them to
face the r isks that change creates. In many organizations, however, leaders buffer employees from the

426 Part Four Organizational Processes
Global Connections 15.1:
PANASONIC GENERATES AN URGENCY FOR CHANGE
BY REVEALING THE TRUTH26
One of Kazuhiro Tsuga’s first actions as president of Panasonic Corporation was to shut down
the company’s plasma flat-panel television screen business. For several years, executives
and engineers at the Japanese company had fiercely defended the company’s considerable
investment in plasma screens, which provide higher-quality images but are more expensive
and much heavier than popular LCD TV screens.
Employees also lacked an urgency for change because Panasonic’s previous executives
had hidden the severity of declining sales. “Only a few members of the management team
knew how deep the loss was [at the TV operation],” explains Tsuga (shown in this photo).
“What I did was tell them, ‘This is the loss, a huge loss.’ I showed them the losses in detail at
every stage. Once it’s visible to them, people don’t want to continue to make losses.”
Panasonic Corporation president Kazuhiro Tsuga created an urgency for change away from
plasma screen development by revealing the severity of declining sales in that product.
© ZUMA Press, lnc.fAiamy Stock Photo
external environment to such an extent that these driving forces are hardly felt by anyone below the top
executive level. The result is that employees don’t understand why they need to change and leaders are
surprised when their change initiatives do not have much effect.
Customer-Driven Change Some companies fuel the urgency for change by putting employees
and managers in direct contact with customers. Dissatisfied customers represent a compelling driving
force for change because the organization’s survival typically depends on having customers who are sat-
isfied with the product or service. Personal interaction with customers also provides a human element
that further energizes employees to change current behaviour patterns. For example, JPMorgan Chase
executives take bus trips to visit customers and bank branches across the United States. These bus tours

Chapter Fifteen Organizational Change 4 27
generate an urgency for change because executives get direct exposure to ways in which the bank can
be improved. “We’ve already learned 100 different things,” said JPMorgan Chase CEO Jamie Dimon
during a bus tour around Florida, citing examples such as “Why can’t we do mortgages quicker?” and
“Why can’t we service a credit card account better out of a branch?”27
Creating an Urgency for Change without External Forces Exposing employees to exter-
nal forces can strengthen the urgency for change, but leaders often need to begin the change process
before problems come knocking at the company’s door. The chal lenge is greatest when companies are
successful in their markets. Studies have found that when the organization is performing well, decision
makers become less vigilant about external threats and are more resistant to change. “The biggest risk
is that complacency can also come with that success,” warns Richard Goyder, who recently stepped
down as CEO of Wesfarmers, Austral ia’s largest conglomerate. “That complacency may result in risk-
aversion, or it may simply show up as a lack of urgency, as people take the foot off the accelerator and
just assume that success will come as it always has.”28
Creating an urgency for change when the organization is the market leader requires plenty of persua-
sive influence to help employees visual ize future competitive threats and environmental shifts. Experts
warn, however, that employees may see this strategy a~ manipulative, which produces cynicism about
change and undermines trust in the change agent29 Fortunately, the urgency for change doesn’t need
to originate from problems or threats to the company; this motivation can also develop through the
leader’s vision of a more appealing future. A future vision of a bel!er organization effectively makes
the current situation less appealing. When the vision connects to employees’ values and needs, it can
be a motivating force for change even when external problems are insignificant.
Are you tolerant of change? You can discover your level of tolerance for change by
completing this self-assessment in Connect.
REDUCING THE RESTRAINING FORCES
Earl ier, we used the mattress metaphor to explain that increa~ing the driving forces alone will not bring
about change because employees often push back harder to offset the opposing forces. Instead, change
agents need to address each of the sources of resistance. Six of the main strategies for minimizing
resistance to change are outlined in Exhibit 15.2. Communication, learning, employee involvement,
and stress management should be the first priorities for change management. 30 However, negotiation
and coercion may be necessary where some people will clearly lose something from the change and in
cases where the speed of change is critical.
Communication Communication is the highest priority and first strategy required for any orga-
nizational change. According to one survey, communication (together with involvement) is consid-
ered the top strategy for engaging employees in the change process.31 Communication improves
the change process in at least two ways.32 One way is that communication is necessary to generate
the urgency for change that we described previously. Leaders motivate employees to support the
change by candidly tell ing them about the external threats and opportunities that make change so
important. This function was illustrated in the opening case study for this chapter. When the future
of North Shore Credit Union (now Blueshore Financial) became apparent, CEO Chris Catliff com-
municated directly to employees about the problems facing the company and why significant change
was urgently needed. “Tell them [employees) why you are changing and what you hope to gain from
the change,” advises Catliff.
The second way that communication minimizes resistance to change is by illuminating the future
and thereby reducing fear of the unknown. The more leaders communicate their vision, particularly
details about that future and milestones already achieved toward that future, the more easily employees
can understand their own roles in that future.

428 Part Four Organizational Processes
EXHIBIT 15.2 Strategies for Minimizing Resistance to Change
Sllnav £..-pie W..Applled ……….
Communication Customer complaint letters are shown When e mployees don’t feel an Time-consuming and potentially
to employees. urgency for change, don•t know how costly.
the change will affect them, or resist
change due to a fear o f the unknown.
Learning Employees Jearn how to work in teams When employees need to break old Time-consuming. potentially costly,
as company adopt~ a team·ba~ routines and adopt new role patterns. and some employees might not be
structure. able to Jearn the new skills.
Employee involvement Company forms a task force to When the change effort needs more Very time-consuming. Might lead
recommend new customer service employee commitmenL some employ· to conflict and poor decisions if
pr.tctices. ees need to protect their se]f.worth, e mployees’ inte rests are incompatible
and/or employee ideas would improve with organizational needs.
decisions about the change strategy.
Stress management Employees attend sessions to discuss When communication. tr.Uning. and Time-consuming and potentially
their worries about the change. involvement do not sufficiently ease expensive. Some method’i may not
employee v.’Orries. reduce stress for all employees.
Negotiation Employee.’ agree to replaoe strict job When e mployees will clearly lose May be expensive. particularly if
categories with multiskilling in return something of value from the change other employees want to negotiate
for increased job security. and would not otherwise support the their support. Also tends to produce
new conditions. Also necessary when compliance but not commitment to
the company must change quickly. the change.
Coercion Company president tells managers When other s trategies are ineffective Can lead to more subtle forms of
to “get on board” with the change or and the company need.’ to change res istance. a’i well as long·tenn
leave. quickly. antagonism with the change agent.
Sources: Adapted from J. P. Kotter and LA. Schlesinger. “Choosing Strategjes for Change.” Harvard Business R~·iew 57 ( 1919). pp. 106-1 14: P.R. Lawreoc.e. “How to Deal
with Resistance to Change.” Han·ard Busines..:; Review. May-June 1954. pp. 49-57.
Learning Learning is an important process in most organizational change initiatives because employees
need new knowledge and skills to fit the organization’s evolving requirements. Learning not only helps
employees perform better following the change; it also increases their readiness for change by strength-
ening their belief about working successfully in the new situation (called change self-ejjicacy). And
when employees develop stronger change self-efficacy, they develop a stronger acceptance of and com-
mitment to the change.33
Employee Involvement Employee involvement is almost essential in the change process,
although a low level of involvement may be necessary when the change must occur quickly or employee
interests are highly incompatible with the organization’s needs. The value of involvement is illustrated
in the opening case study to this chapter. Blueshore Financial’s transformation began with a task force
of employees and executives who generated creative ideas for the North Vancouver credit union’s
future. As the change proceeded, employees discussed and made suggestions to the executive team
about improved operational practices in the emerging financial spa model.
The potential benefits of employee involvement, which were discussed in (Chapter 7}, are rel-
evant to organizational change. Employees who participate in decisions about a change tend to
feel more personal responsibil ity for its successful implementation, rather than being disinterested
agents of someone e lse’s decisions]4 This sense of ownership also minimizes the not-invented-
here syndrome and fear of the unknown. Furthermore, the work environment is so complex that
determining the best direction of the change effort requires ideas and knowledge of many people.
Employee involvement is such an important component of organizational change that special

Chapter Fifteen Organizational Change 4 29
initiatives have been developed to allow participation in large groups. These change interventions
are described later in the chapter.
Stress Management Organizational change is a stressful experience for many people because
it threatens self-esteem and creates uncertainty about the future.35 Communication, learning, and
employee involvement can reduce some of the stressors3 6 However, research indicates that companies
also need to introduce stress management practices to help employees cope with changes? 7 In particu-
lar, stress management minimizes resistance by removing some of the negative valence and fear of the
unknown about the change process. Stress also saps energy, so minimizing stress potentially increases
employee motivation to support the change process.
Negotiation As long as people resist change, organizational change strategies will require a variety
of influence tactics. Negotiation is a form of influence that involves the promise of benefits or resources
in exchange for the target person’s compliance with the influencer’s request. This strategy potential ly
gains support from those who would otherwise lose out from the change. However, this support usually
goes no further than compliance with the change effort. Negotiation rarely produces commitment to
change, so negotiation might not be effective in the long term.
Coercion If all else fails, leaders rely on coercion as part of the change process. Coercion includes
a range of assertive influence behaviours (see Chapter 10}, such as persistently reminding people of
their obligations, frequently monitoring behaviour to ensure compliance, confronting people who do
not change, and using threats of punishment (including dismissal) to force compliance.
Replacing or threatening to replace staff who will not support the change is an extreme step, but it
is fairly common in major organizational transformations. Several years ago, StandardAero CEO Bob
Hamaberg threatened to fire senior managers who opposed his initiative to introduce lean management
(methods to improve work efficiency). “You must have senior management commitment,” Hamaberg
said bluntly at the time. “I had some obstacles. I removed the obstacles.” Harsh words and actions, but
due to this visionary transformation, StandardAero’s Winnipeg location (where the company began) has
grown significantly and the company overallhas become a world leader in the aircraft engine repair and
overhaul business.38
Firing people is the least desirable way to change organizations. However, dismissals and other
forms of coercion are sometimes necessary when speed is essential and other tactics are ineffective. In
particular, it may be necessary to remove several members of an executive team who are unwill ing or
unable to change their existing mental models of the ideal organization. This is also a radical form of
organizational “unlearning” (see Chapter 1) because when executives leave, they remove knowledge of
the organization’s past routines that have become dysfunctional.39 Even so, coercion is a risky strategy
because survivors (employees who do not leave) may have less trust in corporate leaders and engage in
more pol itical tactics to protect their own job security.
REFREEZING THE DESIRED CONDITIONS
Unfreezing and changing behaviour won’ t produce lasting change. People are creatures of habit, so
they easily slip back into familiar patterns. Therefore, leaders need to refreeze the new behaviours by
realigning organizational systems and team dynamics with the desired changes. The desired patterns
of behaviour can be “nailed down” by changing the physical structure and situational conditions.
Organizational rewards are also powerful systems that refreeze behaviours.40 If the change process is
supposed to encourage efficiency, then rewards should be realigned to motivate and reinforce efficient
behaviour.
Information systems play a complementary role in the change process, particularly as conduit~ for
feedback.4 1 Feedback mechanisms help employees learn how well they are moving toward the desired
objectives, and they provide a permanent architecture to support the new behaviour patterns in the long
term. The adage “What gets mea~ured, gets done” applies here. Employees concentrate on the new pri-
orities when they receive a continuous flow of feedback about how well they are achieving those goals.

430 Part Four Organizational Processes
Superior Cabinets was in serious financial trouble a decade ago, so CEO Scott Hodson (shown
here) and his newly-hired executive team launched a radical transformation of the Saskatoon-
based manufacturer. They refocused the cabinetmaker from a mass production operation
to a customer-driven business that continuously reduces wasteful work processes (lean
manufacturing). Superior is now highly efficient and profitable. A decade ago, it took 400 people
and 16 weeks to produce and install 25 kitchens per day. “Today it takes 300 people and we
install it in six weeks, guaranteed,” says Hodson.
“The reason we got through it [the transformation] was because our people embraced the
change,” Hodson emphasizes. Communication, training, and involvement were important. However,
the company also introduced several new systems and structures that reinforced and supported the
new mindset and employee behaviours. Superior invested in technology that focused information
around customers. For instance, customer orders are submitted directly online from Superior’s
showrooms and the system enables employees to monitor how well customer orders are progressing.
More precise performance standards were introduced with associated visual scorecards
that track costs, product quality, on-time delivery, and other key indicators. Production has
been reorganized into team-based cells for better coordination among staff. Superior Cabinets
employees now participate in a profit-sharing plan so they can benefit financially from the
company’s success42
©Superior Cabinets
Leadersh ip, Coalitions, and Pilot Projects
L04 Kurt Lewin’s force field analysis model is a useful template to explain the dynamics of
organizational change. But it overlooks four other ingredients in effective change pro-
cesses: leadership, coal itions, social networks, and pilot projects.
TRANSFORMATIONAL LEADERSHIP AND CHANGE
The opening case study to this chapter described how Chris Catliff transformed North Shore Credit
Union from a floundering undifferentiated savings and loan business into Blueshore Financial-a highly
successful wealth management institution focused on clients with complex and sophisticated financial

Chapter Fifteen Organizational Change 4 3 1
needs. Catliff and other Blueshore executives were transformational leaders in this change process. They
developed a vision of the organization’s desired future state, communicated that vision in ways that were
meaningful to others, made decisions and acted in ways that were consistent with that vision, and encour-
aged employees to experiment with ways to al ign work activities more closely with the vision.43
A key element of leading change is a strategic vision.44 A leader’s vision provides a sense of direction
and establishes the critical success factors against which the real changes are evaluated. Furthermore,
a vision provides an emotional foundation to the change because it links the individual’s values and
self-concept to the desired change.45 A strategic vision also minimizes employee fear of the unknown
and provides a better understanding of what behaviours employees must learn for the desired future.
COALITIONS, SOCIAL NETWORKS, AND CHANGE
One of the great truths of organizational change is that change agents cannot lead the initiative alone.
They need the assistance of several people with a similar degree of commitment to the change.46 lndeed,
some research suggests that this grou~ften called a guiding coalition-appears to be the most
important factor in the success of public sector organizational change programs.47
Membership in the guiding coalition extends beyond the executive team. Ideally, it includes a diago-
nal swath of employees representing different functions and most levels of the organization. The guid-
ing coalition is sometimes formed from a special task force that initially investigates the opportunities
for change. Members of the guiding coalition should also be influence leaders; that is, they should be
highly respected by peers in their area of the organization.
Social Networks a nd Viral Change The change process can be strengthened through social
networks, which are structures of people connected to each other through one or more forms of inter-
dependence (see Chapter 10). They have an important role in communication and influence, both of
which are key ingredients for organizational change. To some extent, coalition members support the
change process by feeding into these networks. But social networks contribute to organizational change
whether or not the change process has a formal coalition.
Social networks are not easily controlled, yet some change agents have tapped into social networks to
build a groundswell of support for a change initiative. This viral change process adopts principles found
in word-of-mouth and viral marketing.48 Viral and word-of-mouth marketing occur when information
seeded to a few people is transmitted to others through their friendship connections. Within organiza-
tions, social networks represent the channels through which news and opinion about change initiatives are
transmitted. Participants in that network have relatively high trust, so their information and views are more
persuasive than those from more formal channels. Social networks also provide opportunities for behav-
iour observation-mployees observe each other’s behaviour and often adopt that behaviour themselves.
As key people in the network change their behaviour, that behaviour is copied by others in the network.49
Global Connections 15.2:
TRAILBLAZING VIRAL CHANGE AT RSA INSURANCE
RSA Insurance Group recently launched a flexible benefits package that required employ-
ees to pick their preferred benefits options. But instead of just emailing reminders, human
resources staff at the U.K. insurer relied on a viral change process that more effectively moti-
vated employees to choose their options.
HR carefully described the flexible benefits plan to 500 “trailblazers• -early adopters of
the company’s new internal social network (Yammer) who had a large following of co-workers.
(continued)

43 2 Part Four Organizational Processes
(continued)
Trailblazers were soon posting their views about the preferred flexible benefits offered.
These posts were read by thousands of employees, many of whom would have ignored
the email memos from HR.
“We used people in the network to communicate what their favourite elements of the
proposition were; explains RSA’s director of internal communications. Trailblazers are
role models whose ideas receive considerable interest from other employees, so they
achieve far more effective results in terms of changing employee behaviour (i.e., signing
up for preferred benefits) than HR accomplishes through impersonal emails.50
London-based RSA Insurance Group relied on viral change
through social media “trailblazers” to improve flexible benefits
selection among employees.
©Chris Batson/Aiamy Stock Photo
PILOT PROJECTS AND DIFFUSION OF CHANGE
Many companies introduce change through a pilot project, which involves applying change to one
work unit or section of the organization. This cautious approach tests the effecti veness of the change as
well as the strategies to gain employee support for the change, yet is more flexible and less risky than
company-w ide initiatives5 1 Pilot projects also make it easier to select organizational groups that are
most ready for change, thus increasing the change initiative’s l ikelihood of success.

Chapter Fifteen Organizational Change 433
EXHIBIT 15.3 Strategies for Diffusing Change from a Pilot Project
……….
\Videly communicate and celebrate the pilot project’s success.
Reward and recognize pilot project employees as weH a’i those ·who work a t tr.tnsferring that change to other parL~ of the
organization.
Ensure that managers support and reinforce the desired behaviours related to the pilot project’s success.
Identify and address potential sources of resistance to change.
AlllhJ
Give employees the opportunity to inter.tct with and Jearn from those in the pilot project.
Rea’isign or temporarily second some pilot project employees to other work units where they can coach and serve as role
models.
Give employees technical training to implement practices identified in the pilot project.
ltlllel’8up…_
Communicate and teach employees how lhe pilot project practices are relevant for lheir own functional areas.
Ensure that the pilot project is described in a way that is neither too specific nor too gener.tl . …………..
Give s taff sufficient time and resources to learn and implement the pilot project practices in their V.’Ork uni ts.
How does change get diffused from the pilot project to other parts of the organization? Using the
MARS model as a template (see Chapter 2}, Exhibit 15.3 outlines several strategies. First, employees
are more likely to adopt the practices of a pi lot project when they are motivated to do so. 52 This occurs
when they see that the pilot project is successful and people in the pilot project receive recognition and
rewards for changing their previous work practices. Diffusion also occurs more successfully when man-
agers support and reinforce the desired behaviours. More general ly, change agents need to minimize the
sources of resistance to change that we discussed earlier in this chapter.
Second, employees must have the ability-the required ski lls and knowledge-to adopt the practices
introduced in the pilot project. According to innovation diffusion studies, people adopt ideas more
readily when they have an opportunity to interact with and Jearn from others who have already applied
the new practices.53
Third, pilot projects get diffused when employees have clear role perceptions-that is, when they
understand how the practices in a pilot project apply to them even though they are in a completely
different functional area. For instance, accounting department employees won’t easily recognize how
they can adopt quality improvement practices developed by employees in the production department.
The challenge here is for change agents to provide guidance that is not too specific (not too narrowly
defined around the pilot project environment) because it might not seem relevant to other areas of the
organization. At the same time, the pilot project intervention should not be described too broadly or
abstractly to other employees because this makes the information and role model too vague. Finally,
employees require supportive situational factors, including the resources and time necessary to adopt
the practices demonstrated in the pilot project.
Four Approaches to Organizational Change
So far, this chapter has examined the dynamics of change that occur every day in organiza-
tions. However, organizational change agents and consultants also apply various structured
approaches to organizational change. This section introduces four of the leading approaches:
action research, appreciative inquiry, large group interventions, and parallel learning structures.

434 Part Four Organizational Processes
ACTION RESEARCH APPROACH
Along with introducing the force field model, Kurt Lewin recommended an action research approach
to the change process. The philosophy of action research is that meaningful change is a combination
of action orientation (changing ani tudes and behaviour) and research orientation (testing theory).54 On
one hand, the change process needs to be action-oriented because the ultimate goal is to change the
workplace. An action orientation involves diagnosing current problems and applying interventions that
resolve those problems. On the other hand, the change process is a research study because change
agents apply a conceptual framework (such as team dynamics or organizational culture) to a real situ-
ation. As with any good research, the change process involves collecting data to diagnose problems
more effectively and to systematical ly evaluate how well the theory works in practice. 55
Within this dual framework of action and research, the action research approach adopts an open-
systems view. It recognizes that organizations have many interdependent parts, so change agents need
to anticipate both the intended and the unintended consequences of their interventions. Action research
is also a highly participative process because open-systems change requires both the knowledge and
the commitment of members within that system. Indeed, employees are essentially co-researchers as
well as participants in the intervention. Overall, action research is a data-based, problem-oriented
process that diagnoses the need for change, introduces the intervention, and then evaluates and sta-
bilizes the desired changes. The main phases of action research are illustrated in Exhibit 15.4 and
described here:56
I. Form client-consultant relationship. Action research usually assumes that the change agent origi-
nates outside the system (such as a consultant), so the process begins by forming the client-consultant
relationship. Consultants need to determine the client’s readiness for change, including whether
people are motivated to participate in the process, are open to meaningful change, and possess the
abilities to complete the process.
2. Diagnose the need for change. Action research is a problem-oriented activity that carefully diag-
noses the problem to determine the appropriate direction for the change effort. Organizational
diagnosis relies on systematic analysis of the situation. It involves gathering and analyzing data
about an ongoing system, including interviews and surveys of employees and other stakeholders.
Organizational diagnosis also involves employees so they improve, understand, and support the
appropriate change method, the schedule for the actions involved, and the expected standards of
successful change.
3. Introduce intervention. This stage in the action research model applies one or more actions to cor-
rect the problem. It may include any of the prescriptions mentioned in this book, such as building
more effective teams, managing confl ict, building a better organizational structure, or changing
the corporate culture. An important issue is how quickly the changes should occur.s7 Some experts
recommend incremental change, in which the organization fine-tunes the system and takes smal l
steps toward a desired state. Others claim that rapid change is often required, in which the system is
overhauled decisively and quickly.
EXHIBIT 15.4 The Action Research Process

Chapter Fifteen Organizational Change 4 35
4. Evaluate and stabilize change. Action research recommends evaluating the effectiveness of the
intervention against the standards establ ished in the diagnostic stage. Unfortunately, even when
these standards are clearly stated, the effectiveness of an intervention might not be apparent for sev-
eral years or might be difficult to separate from other factors. If the activity has the desired effect,
the change agent and participants need to stabilize the new conditions. This refers to the refreezing
process that was described earl ier. Rewards, information systems, team norms, and other conditions
are redesigned so they support the new values and behaviours.
Debating Point:
WHAT’S THE BEST SPEED FOR ORGANIZATIONAL CHANGE?
One of the great debates among organizational change experts is how quickly the change
should occur. One view is that slow, incremental change is better because it gives employees
more time to adjust to the new realities, to keep up with what needs to be learned, and to
manage their stress in this process. Incremental change is also preferred because it gives
leaders more time to change course if the current direction isn’t working as hoped.
Ergon Energy discovered the importance of incremental change. Government legislation
required companies to upgrade their record-keeping system, but the Australian energy provider
decided to make the changes incrementally because employees had already experienced con-
stant change over the previous couple of years. “Even resilient staff such as those employed at
Ergon Energy have a change tolerance level,” explains Peta Sweeney, a consultant who worked
with Ergon staff during this transition. “Consequently this led deliberately to discounting a revo-
lutionary ‘big bang’ approach to record-keeping improvements.” Sweeney reports that chang-
ing incrementally significantly improved employee engagement in the process. “Staff are more
willing to participate in the change journey as well as offering suggestions for improvements.
They do so knowing that changes will take place gradually and allow for time to fully bed down
new practices and that effective enterprise-wide changes require their help.·SS
In spite of these apparent virtues of incremental change, some experts claim that rapid
change is usually a much better choice. They do not claim that change needs to be radical or
evenly rapid all of the time. Rather, they suggest that most change initiatives need to be, on
average, much quicker than incremental. One argument is that companies operate in such a
fast-paced environment that any speed less than “rapid” is risky; an incremental change ini-
tiative risks putting organizations further behind its competitors to the point that any change
seems futile.
A second argument is that rapid change creates a collective sense of momentum, whereas
inertia eventually catches up with incremental change. 59 In other words, employees feel the
sense of progress when change occurs quickly. This forward movement generates its own
energy that helps motivate employees toward the future objectives. Incremental change, by
comparison, is sluggish and lethargic. A related argument is that any organizational change
requires plenty of energy, particularly from the leaders who must continually communicate,
role model, coach, and otherwise support and influence employees toward the new state of
affairs.60 This energy is fin ite, and it is more likely to run out when the change is spread over
a long rather than a short period of time.
Third, incremental change doesn’t necessarily give employees more time to adjust;
instead, it typically gives them more time to dig in their heels! Rapid change, on the other
hand, happens at such speed that employees don’t have the opportunity to find ways to hold
back, retrench, or even think about strategies to oppose the change effort. Finally, though
proponents of incremental change point to its benefits for minimizing stress, there is reason
to believe that it often has the opposite effect. Changing slowly can feel like a slow train
wreck-the more you see it coming, the more painful it feels. Quicker change, particularly
when there are support systems to help employees through the process, may be less painful
than incremental change.

43 6 Part Four Organizational Processes
The action research approach has dominated organizational change thinking since it was introduced in
the 1940s. However, some experts are concerned that the problem-oriented nature of action research-
in which something is wrong that must be fixed-focuses on the negative dynamics of the group or
system rather than its positive opportunities and potential. This concern with action research has Jed to
the development of a more positive approach to organizational change, called appreciative inquiry.61
APPRECIATIVE INQUIRY APPROACH
Appreciative inquiry tries to break out of the problem-solving mind~et of traditional change management
practices by reframing relationships around the positive and the possible. It searches for organizational
(or team) strengths and capabilities and then applies that knowledge for further success and well-being.
Appreciative inquiry is therefore deeply grounded in the emerging philosophy of positive organizational
behaviour, which suggests that focusing on an individual’s positive qualities and traits rather than on what
is wrong with the person will improve organizational success and personal well-being. In other words,
this approach empha~izes building on strengths rather than trying to directly correct problems.62
Appreciative inquiry typically examines successful events, organizations, and work units. This
focus becomes a form of behavioural modell ing, but it also increases open dialogue by redirecting the
group’s attention away from its own problems. Appreciative inquiry is especially useful when partici-
pants are aware of their problems or already suffer from negativity in their relationships. The positive
orientation of appreciative inquiry enables groups to overcome these negative tensions and build a
more hopeful perspective of their future by focusing on what is possible.63
Appreciative inquiry ‘s positive focus is illustrated by the intervention conducted a few years ago
at Heidelberg USA. The American arm of the world’s largest printing press manufacturer (Heidel-
berger Druckmaschinen AG) had experienced morale-busting product setbacks as well as downsiz-
ing due to the economic recession. To rebu ild employee morale and engagement, Heidelberg held a
two-day appreciative inquiry summit involving one-third of its staff. Organized into diverse groups
from across the organization, participants envisioned what Heidelberg would ideally look like in the
future. From these sessions emerged a new vision and greater autonomy for employees to serve cus-
tomers. “Appreciative inquiry can energize an organization even in tough times because it begins the
conversation with possibilities instead of problems,” says a senior executive at Heidelberg USA.64
Appreciative Inquiry Principles Appreciative inquiry embraces five principles (see Exhibit 15.5).65
One of these is the positive principle, which we describe above. A second principle, called the constmc-
tionist principle, takes the position that conversations don’t describe reality; they shape that reality. The
understanding we form of an event, group, or situation depends on the questions we ask and the language
we use. Therefore, appreciative inquiry uses words and language carefully because it is sensitive to the
thoughts and feelings behind that communication. This relates to a third principle, called the simultaneity
EXHIBIT 15.5 Five Principles of Appreciative Inquiry
Appn•””‘..e….,……., Delalp ….
Positive principle FoctL~ing on positive evenL~ and potential produces more positive. effective, and
enduring change.
Constructionist principle How we perceive and understand the change process depends on the questions we
a…,;k and language we use throughout that process.
Simultaneity principle Inquiry and change are simultaneous, not sequential.
Poetic principle Organizations are open books. so we have choices in how they may be perceived,
framed, and de.,cribed.
Anticipalory principle People are motivated and guided by the vision they see and believe in for lhe future.
Source: Based on D. L. Cooperrider and D. K. Whii.Jley. Appreciative lnquiry: A Pos:iLive Revolution in Change. (San Frunci..:;oo: Berrett-Koehler. 2005).
Chap. 7: D. K.Whitney and A. Trosten-Bloom. The power of appreciative inquiry: A prnctical g.ulde to pOSiLi\’e change. 2nd ed. (San Frnncisco:
Berrett-Koehler Publishers. 201 0). Chap. 3.

Chapter Fifteen Organizational Change 4 37
principle, which states that inquiry and change are simultaneous, not sequential. The moment we ask
questions of others, we are changing those people. Furthermore, the questions we a~k determine the infor-
mation we receive, which in ntrn affects which change intervention we choose. The key learning point
from this principle is to be mindful of effects that the inquiry has on the direction of the change process.
A fourth principle, cal led the poetic principle, states that organizations are open books, so we have
choices in how they may be perceived, framed, and described. The poetic principle is re flected in the
notion that a glass of water can be viewed as half full or half empty. Therefore, appreciative inquiry
actively frames reality in a way that provides constructive value for future development. The antici-
patory principle, the fifth principle of appreciative inquiry, emphasizes the importance of a positive
collective vision of the future state. People are motivated and guided by the vision they see and believe
in. Images that are mundane or disempowering will affect current e ffort and behaviour differently than
will images that are inspiring and engaging . We noted the importance of visions earlier in this chapter
(change agents) and in our discussion of transformational leadership (Chapter 12).
The Four-0 Model of Appreciative Inquiry These five principles Jay the foundation for appreciative
inquiry’s “Four-D” process. The model’s name refers to it~ four stages, shown in Exhibit 15.6. Appreciative
inquiry begins with discovery- identify ing the positive elements of the observed events or organiza-
tion.66 This might involve documenting positive customer experiences elsewhere in the organization. Or
it might include interviewing members of another organization to discover it~ fundamental strengths.
Toronto Western Hospital (TWH) held an appreciative inquiry (AI) retreat at which staff discussed
the hospital’s past successes and crafted a vision for its future. TWH’s executive team felt the AI
philosophy should guide daily leadership behaviour, so they developed and taught a positive
leadership program, which has since been completed by more than 150 leaders at the hospital.
Kathy Sabo, executive lead at TWH when the positive leadership program was launched, says
the training teaches hospital leaders to “embed [AI) in our daily work differently than we do now-
not just focused on a particular in itiative but how do we enact it daily.” The program has improved
TWH’s balanced scorecard results, patient satisfaction, and staff engagement. “We’ve seen really
positive outcomes in how people apply the [AI) theory, how they behave as leaders, how that has
impacted their staff,” observes Sabo, who has recently retired.67
©Shutterstock/Monkey Business Images

438 Part Four Organizational Processes
EXHIBIT 15.6 The Four-D Model of Appreciative Inquiry
1. Discovery
Identify the
best of “what is” –
2. Dreaming
Envisioning
“what might be”
3. Designing
Engaging in
dialogue about
“what should be”
4. Delivering
Developing
objectives about
“what will be”
Sources: Ba..:;ed on F.l Barrett and D. L. Cooperrider. “Generati\•e Metaphor lnter\•ention: A New Approach for Working with Systems Divided
by Conflict and Otught in Defensive Perception.” Journal of Applied Behavioural Sc-ience 26 (1990). p. 229: D. Whitney and C. Schau. “Appre-
ciative Inquiry: An Innovative Process for Organization Change.” EmpiO)•ment Relations Today 25 (Spring 1998). pp. 11-21: D. L. Cooperrider
and D. K.\Vhitney. Appreciative inquiry: A positive revolution in change. (San r … aneisoo: Berrett-Koehler. 2005). Chap. 3.
As participants discuss their findings, they shift into the dreaming stage by envisioning what might be
possible in an ideal organization. By pointing out a hypothetical ideal organization or situation, partici-
pants feel safer revealing their hopes and aspirations than they would if they were discussing their own
organization or predicament.
As participants make their private thoughts public to the group, the process shifts into the third
stage, called designing. Designing involves dialogue in which participants listen with selfless recep-
tivity to each other’s models and a~sumptions and eventually form collective views within the team.
In effect, they create a common mental model of what should be. As this model takes shape, group
members shift the focus back to their own s ituation. In the final stage of appreciative inquiry, called
delivering (also known a~ destiny), participants establish specific objectives and direction for their own
organization on the basis of their model of what wi ll be.
Appreciative inquiry was introduced almost three decades ago, but it real ly gained popularity only
within the past few years. Appreciative inquiry success stories of organizational change have been
reported in a variety of companies, including Canadian Tire, Toronto Western Hospital, Heidelberg
USA, the British Broadcasting Corporation, and Hunter Dougla~68
Appreciative inquiry has much to offer, but it is not always the best approach to changing teams
or organizations and, indeed, has not always been successful. This approach depends on participants’
ability to let go of the problem-oriented approach, including the “blame game” of determining who
may have been responsible for past failures. It also requires leaders who are will ing to accept appre-
ciative inquiry’s less structured process.69 Another concern is that research has not yet examined the
contingencies of this approach.70 In other words, we don’t yet know under what conditions appreciative
inquiry is a useful approach to organizational change and under what conditions it is less effective.
Overall, appreciative inquiry can be an effective approach to organizational change, but we are still
discovering its potential and limitations.
LARGE GROUP INTERVENTION APPROACH
Appreciative inquiry can occur in smal l teams, but it is often designed to involve a large number of
people, such as the hundreds of employees who participated in the process at Heidelberg USA and
Toronto Western Hospital. As such, appreciative inquiry is often identif ied as one of several large group
organizational change interventions. Large group interventions adopt a “whole systems” perspective
of the change process71 This means that they view organizations as open systems (see Chapter I) and
assume that change will be more successful when many employees and other stakeholders are included
in the process.72 Large group interventions are high-involvement events because participants discuss
their experiences, expectations, and ideas with others, typically in small groups within the large collec-
tive setting.

Chapter Fifteen Organizational Change 4 39
Similar to appreciative inquiry, large group interventions adopt a future-oriented positive focus
rather than a past-oriented problem focus. Future search conferences, for instance, are large group
interventions typically held over a few days in which participants identify emerging trends and develop
strategies for the organization to real ize potential under those future conditions. In addition to this
strategy development, large group interventions generate a collective vision or sense-making about the
organization and its future. This “meaning-making” process is important for the organization’s evolv-
ing identity and how participants relate to that identity.
Large group interventions have occurred in a variety of companies and industries. Emerson & Cuming’s
chemical manufacturing facility in Canton, Massachusetts held a large group summit in which man-
agers, supervisors, and production employees were organized into five stakeholder teams to iden-
tify initiatives that would improve the plant’s safety, efficiency, and cooperation. Several Canadian
school boards have conducted funtre search conferences, including the Ottawa-Carleton School Board,
Toronto District School Board, and Lester B. Pearson School Board. The Canadian Nature Federation
also held a future search event to assist their change process73
Future search meetings and similar large group change events potentially minimize resistance to
change and assist the quality of the change process, but they also have limitations74 One problem is
that involving so many people invariably limits the opportunity to contribute and increases the risk that
a few people will dominate the process. Another concern is that these events focus on finding common
ground, and this may prevent the participants from discovering substantive differences that interfere
with future progress. A third issue is that these events generate high expectations about an ideal future
state that are difficult to satisfy in practice. Employees become even more cynical and resistant to
change if they do not see meaningful decisions and actions resulting from these meetings.
PARALLEL LEARNING STRUCTURE APPROACH
Parallel learning structures are highly participative arrangements composed of people from most
levels of the organization who follow the action research model to produce meaningful organizational
change. They are social structures developed alongside the formal hierarchy with the purpose of increas-
ing the organization’s learning.75 Ideally, participants in parallel learning structures are sufficiently free
from the constraints of the larger organization that they can effectively solve organizational issues.
Royal Dutch/Shell relied on a parallel learning structure to introduce a more customer-focused
organization.76 Rather than try to change the entire organization at once, executives held week-long
“retail boot camps” with teams from six countries, consisting of front line people (such as gas sta-
tion managers, truck drivers, and marketing professionals). Participants learned about competitive
trends in their regions and were taught powerful marketing tools to identify new opportunities.
The teams then returned home to study their markets and develop proposals for improvement. Four
months later, boot camp teams returned for a second workshop, at which each proposal was cri-
tiqued by Royal Dutch/Shell executives. Each team had 60 days to put its ideas into action; then the
teams returned for a third workshop to analyze what worked and what didn’t. This paralle l learning
process did much more than introduce new marketing ideas. It created enthusiasm in participants
that spread contagiously to their co-workers, including managers above them, when they returned
to their home countries.
Cross-Cultura l and Eth ical Issues in
Organizational Change
Throughout this chapter, we have emphasized that change is an inevitable and often con-
tinuous aspect of organizational life because organizations need to remain al igned with
the dynamic external environment. Yet we also need to be aware of cross-cultural and
ethical issues with any change process. Many organizational change practices are built around Western

440
Andrew Carnegie
Part Four Organizational Processes
cultural assumptions and values, which may differ from and sometimes confl ict with a~sumptions and
values in other cultures.77 One possible cross-cultural limitation is that Western organizational change
models, such as Lewin’s force field analysis, often assume that change ha~ a beginning and an end-
ing in a logical linear sequence (that is, a straight line from point A to point B). Yet change is viewed
more as a cycl ical phenomenon in some cultures, such as the earth’s revolution around the sun. Other
cultures have more of an interconnected view of change, whereby one change leads to another (often
unplanned) change, which leads to another change, and so on until the change objective is ultimately
achieved in a more circuitous way.
Another cross-cultural issue with some organizational change interventions is the assumption that
effective organizational change is necessarily punctuated by tension and overt conflict. Indeed, some
change interventions encourage such confl ict. But this direct confrontation view is incompatible with
cultures that emphasize harmony and equilibrium. These cross-culntral differences suggest that a more
contingency-oriented perspective is required for organizational change to work effectively in this era of
globalization.
Some organizational change practices also face ethical issues.78 One ethical concern is the risk of
violating individual privacy rights. The action research model is bui lt on the idea of collecting infor-
mation from organizational members, yet this requires that employees provide personal information
and reveal emotions they may not want to divulge.79 A second ethical issue is that some change activi-
ties potentially increa~e management’s power by inducing compliance and conformity in organizational
members. For instance, action research is a system-wide activity that requires employee participation
rather than allowing individuals to get involved voluntarily. A third risk is that some organizational
change interventions undermine the individual’s self-esteem. The unfreezing process requires that par-
ticipants disconfirm their existing beliefs, sometimes including their own competence at certain ta~ks
or interpersonal relations.
Organizational change is usually more difficult than it initially seems. Yet the dilemma is that most
organizations operate in hyperfast environments that demand continuous and rapid adaptation. Organi-
zations survive and gain competitive advantage by mastering the complex dynamics of moving people
through the continuous process of change a~ quickly as the external environment is changing.
Organizational Behaviour:
The Journey Continues
Nearly 100 years ago, industrialist Andrew Carnegie said, “Take away
my people, but leave my factories, and soon gra~s will grow on the
factory floors. Take away my factories, but leave my people, and soon
we will have a new and better factory.”80 Carnegie’s statement reflects
the message woven throughout this textbook: Organizations are not
buildings or machinery or financial assets; rather, they are the people in
them. Organizations are human entities-full of life, sometimes fragile,
and always exciting.
©Everell Historicai/Shullerstock

Chapter Fifteen Organizational Change 44 1
Chapter Summary
L01 Describe the elemen ts of Lewin’s force field analysis model.
Lewin’s force field analysis model states that all systems have driving and restraining forces.
Change occurs through the process of unfreezing, changing, and refreezing. Unfreezing produces
disequilibrium between the driving and restraining forces. Refreezing realigns the organization’s
systems and structures with the desired behaviours.
L02 Discuss the reasons why people resist organizational change and how change agents should
view this resistance.
Restraining forces are manifested as employee resistance to change. The main rea~ons why people
resist change are the negative valence of change, fear of the unknown, not-invented-here syn-
drome, breaking routines, incongruent team dynan1ics, and incongruent organizational systems. Resistance to
change should be viewed as a resource, not an inherent obstacle to change. Change agents need to view resistance
as task conflict rather than relationship conflict. Resistance is a signal that the change agent has not sufficiently
strengthened employee readiness for change. It is also seen as a form of voice, so discussion resulting from resis-
tance potentially improves procedural justice.
L03 Outline six st rategies for minimizing resistance to change, and deba te ways to effectively
create an urgency for change.
Organizational change requires employees to have an urgency for change. This typically occurs by
informing them about driving forces in the external environment. Urgency for change also devel-
ops by putting employees in direct contact with customers. Leaders often need to create an urgency for change
before the external pressures are felt, and this can occur through a vision of a more appealing future.
Resistance to change may be minimized by keeping employees informed about what to expect from the change
effort (communicating); teaching employees valuable ski lls for the desired future (learning); involving them in the
change process; helping employees cope with the stress of change; negotiating trade-off.~ with those who will
clearly lose from the change effort; and us ing coercion (sparingly and as a last resort).
L04 Discuss how leadership, coalitions, social networks, and pilot p rojects assist organizational change_
Every successful change requires transformational leaders with a clear, well-articu lated vision
of the desired future state. These change agents need the assistance of several people (a gu id-
ing coal ition) who are located throughout the organization. Change also occurs more informally
through social networks. Viral change operates through social networks using influencers.
Many organizational change initiatives begin with a pilot project. The success of the pilot project is then dif-
fused to other parts of the organization. This occurs by applying the MARS model, including motivating employ-
ees to adopt the pilot project’s methods, training people to know how to adopt these practices, helping to clarify
how the pi lot can be applied to different areas, and providing time and resources to support this diffusion.
LOS Describe and compare action research, appreciative inquiry, large group in terventions, and
parallel learning structures as formal approaches to organizational change.
Action research is a highly participative, open-systems approach to change management that com-
bines an action-orientation (changing attitudes and behaviour) with research orientation (testing
theory). It is a data-based, problem-oriented process that diagnoses the need for change, introduces the interven-
tion, and then evaluates and stabil izes the desired changes.
Appreciative inquiry embraces the positive organizational behaviour philosophy by focusing participants on the
positive and possible. In addition, appreciative inquiry applies the constructionist, simultaneity, poetic, and antici-
patory principles. The four stages of appreciative inquiry include discovery, dreaming, design ing, and delivering.
Large group interventions are highly participative events that view organizations as open systems (i .e., involve
as many employees and other stakeholders as possible), and adopt a future and positive focus of change. Parallel
learning structures rely on social structures developed alongside the formal hierarchy with the purpose of increas-
ing the organization’s learning. They are highly participative arrangements, comprised of people from most levels
of the organization who follow the action research model to produce meaningful organizational change.
L06 Discuss two cross-cultural and three ethical issues in organizational change.
One significant concern is that organ izational change theories developed with a Western cultural
orientation potentially conflict with cultural values in some other countries. Also, organizational
change practices can raise one or more ethical concerns, including increasing management’s
power over employees, threatening individual privacy right~. and undermining individual sel f-esteem.

44 2 Part Four Organizational Processes
Key Terms
action research
appreciative inquiry
force field analysis
parallel learning structures
refreezing
unfreezing
Critical Thinking Questions
I. Chances are that the school you are attending is currently undergoing some sort of change to adapt more
closely with its environment. Discuss the external forces that are driving the change. What internal drivers for
change also exist?
2. Use Lewin’s force field analysis to describe the dynamics of organizational change at Blueshore Financial,
the subject of the opening ca~e study for this chapter. The vignette provides some information, but think about
other forces for and against change beyond the information provided here.
3. Employee resistance is a symptom, not a problem, in the change process. What are some of the real problems
that may cause e mployee resistance?
4. Senior management of a large multinational corporation is planning to restructure the organization. Currently,
the organization is decentralized around geographic area~ so that the executive responsible for each area has
considerable autonomy over manufacturing and sales. The new structure will transfer power to the executives
responsible for different product groups; the executives responsible for each geographic area will no longer be
responsible for manufacturing in their area but will retain control over sales activities. Describe two types of
resistance senior management might encounter from this organizational change.
5. Discuss the role of reward systems in organizational change. Specifically, identify where reward systems
re late to Lewin’s force fie ld model and where they undermine the organizational change process.
6. Web Circuits is a Malaysian-ba~ed custom manufacturer for high-technology companies. Senior management
wants to introduce lean management practices to reduce production cost~ and remain competitive. A consultant
ha~ recommended that the company start with a pilot project in one department and, when successful, diffuse
these practices to other areas of the organization. Discuss the advantages of this recommendation, and identify
three ways (other than the pilot project’s success) to make diffusion of the change effort more successful.
7. What is the role o f formal and informal networks in organ izations interested in undergoing change?
8. Suppose that you are vice-president of branch services at the Kelowna Credit Union. You notice that several
branches have consistently low customer service ratings even though there are no apparent differences in
resources or staff characteristics. Describe an appreciative inquiry process in one of these branches that might
help to overcome this problem.
Case Study:
TRANSACT INSURANCE
CORPORATION
by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canada) and
Terrance J. Bogyo
TransAct Insurance Corporation (TIC) provides automobile insurance in parts of Canada that allow private insur-
ers. Last year, a new CEO was hired by TIC’s board of directors to improve the company’s competitiveness and
customer service. After spending several months assessing the situation, the new CEO introduced a strategic plan
to improve TIC’s competitive position. He also replaced three vice-presidents. Jim Leon wa~ hired a~ vice-president
of Claims, TIC’s largest division with I ,500 employees, 50 claims centre managers, and 5 regional directors.
Jim immediately met with all claims managers and directors, and vis ited employees at TIC’s 50 claims centres.
As an outsider, this was a formidable task, but his strong interpersonal skills and uncanny ability to remember
nan1es and ideas helped him through the process. Through these visit~ and discussions, Jim discovered that the

Chapter Fifteen Organizational Change 44 3
claims divis ion had been managed in a relatively authoritarian, top-down manner. He could also see that morale
was very low and employee-management relations were guarded . High workloads and isolation (adjusters work-
ing in tiny cubicles) were two other common complaints. Several managers acknowledged that the high tumover
among claims adjusters was partly due to these conditions.
Following discussions with TIC’s CEO, Jim decided to make morale and supervisory leadership his top prior-
ity. He initiated a divisional newsletter with a tear-off feedback form for employees to register their comments. He
announced an open-door policy in which any Claims Division employee could speak to him directly and confiden-
tial ly without going first to the inm1ediate supervisor. Jim also fought organizational barriers to initiate a flex-time
program so that e mployees could design work schedules around their needs. This program later becan1e a model for
other area~ of TIC.
One of J im ‘s most pronounced symbols of change was the “Claims Management Credo” outlining the philoso-
phy that every claims manager would follow. At his fi rst meeting w ith the complete claims management teanl, Jim
presented a list of what he thought were important philosophies and actions of effective managers. The manage-
ment group was a~ked to select and prioritize items from this list. They were to ld that the resulting list would be
the divis ion’s management philosophy and all managers would be held accountable for abiding by it~ principles.
Most claims managers were uneasy about this process, but they also understood that the organization was under
competitive pressure and that Jim was using this exercise to demonstrate his leadership.
The claims managers developed a list of I 0 items, such as encouraging teamwork, fostering a trusting work
environment, setting clear and rea~onable goals, and so on. The list wa~ circulated to senior management in the
organ ization for their comment and approval, and sent back to all claims managers for their endorsement. Once
this was done, a copy of the final document wa~ sent to every claims division e mployee. Jim also announced plans
to follow up w ith an annual survey to evaluate each claims manager’s performance. This concerned the managers,
but most of them believed that the credo exercise was a result of Jim ‘s initial enthusiasm and that he would be too
busy to introduce a survey after settling into the job.
One year after the credo had been distributed, Jim announced that the firs t annual survey would be conducted .
All claims employees would complete the survey and return it confidentially to the human resources department
where the survey results would be compiled for each claims centre manager. The survey asked the extent to which
the manager had Jived up to each of the 10 items in the credo. Each form also provided space for comments.
Claims centre managers were surprised that a survey would be conducted, but they were even more worried
about Jim’s state ment that the results would be shared with employees. What ” results” would employees see? Who
would distribute these results? What happens if a manager get~ poor ratings from his or her subordinates? “We’ll
work out the details later,” said J im in response to these questions. “Even if the survey results aren’t great, the
information will give us a good baseline for next year’s survey.”
The claims division survey had a high response rate. In some centres, every employee completed and returned
a form. Each report showed the claim centre manager’s average score for each of the 10 items as well a~ how many
e mployees rated the manager at each level of the five-point scale. The reports also included every comment made
by employees at that centre.
No one wa~ prepared for the results of the first survey. Most managers received moderate or poor ratings on
the 10 items. Very few managers averaged above 3.0 (on a 5-point scale) on more than a couple of items. This
suggested that, at best, e mployees were ambivalent about whether their claims centre manager had abided by the
I 0 management philosophy items. The comments were even more devastating than the ratings. Comments ranged
from mildly disappointed to extremely critical o f their claims manager. Employees also described their long-
standing frustration with TIC, high workloads, and isolated working conditions. Several people bluntly stated that
they were skeptical about the changes that Jim had promised . “We’ve heard the promises before, but now we’ve
lost faith,” wrote one claims adjuster.
The survey result~ were sent to each claims manager, the regional director, and e mployees at the claims centre.
Jim instructed managers to discuss the survey data and comments w ith their regional manager and directly with
e mployees. The claims centre managers were shocked to Jearn that the reports included individual comments.
They had assumed the reports would exclude comments and only show averaged scores for all employees at the
centre. Some managers went to their regional director, complaining that revealing the personal comment~ would
ruin their careers. Many directors sympathized, but the results were already avai lable to e mployees.
When Jim heard about these concems, he agreed that the results were lower than expected and that the conm1ent~
should not have been shown to employees. After discussing the situation with his directors, he decided that d1e discussion
meetings between claims managers and their employees should proceed as planned. To delay or withdraw d1e report~
would undermine the credibility and trust that Jim was trying to develop with employees. However, the regional director
attended the meeting in each claims centre to minimize direct conflict bel\veen the claims centre manager and employees.
Although many of these meetings went smoothly, a few created harsh feelings between managers and their
e mployees. Sources of some comments were easi ly identi fied by their content, and this created a few delicate
moment~ in several sessions. A few months after these meetings, two claims centre managers quit and three oth-
ers asked for transfers back to nonmanagement positions in TIC. Meanwhile, Jim wondered how to manage this
process more effectively, particularly since e mployees expected another survey the following year.

444 Part Four Organizational Processes
Discussion Questions
I. What symptom(s) exist in this case to suggest that something has gone wrong?
2. What are the main causes of these symptoms?
3. What actions should the company take to correct these problems?
@2000. Steven L. McShane and Terrance J. Bogyo. This case is based on actual events in a Canadian organization. but names,
industry. and some characteristics have been changed to maintain anonymity.
Team Exercise:
STRATEGIC CHANGE INCIDENTS
Purpose This exercise is designed to help you identify strategies for facilitating organizational change in
various s ituations.
Instructions
I. The instructor will place students into tean1s, and each tean1 will be assigned one or both of the scenarios
presented below.
2. Each tean1 will diagnose the scenario to determine the most appropriate set o f change management practices.
Where appropriate, these practices should (a) create an urgency to change, (b) minimize resistance to change,
and (c) refreeze the s ituation to support the change initiative. Each of these scenarios is based on real events.
3. Each tean1 will present and defend it~ change management strategy. Class discussion regarding the
appropriateness and fea~ibility of each strategy will occur after all teams assigned the same scenario have
presented. The instructor will then describe what the organizations actually did in these s ituations.
Scenario 1: Greener Telco The chief executive officer of a large telephone company want~ it~ executives
to make the organization more environmentally friendly by encouraging e mployees to reduce wa~te in the
workplace. Government and other stakeholders expect the company to take this action and be publicly
successful. Consequently, the CEO wants to significantly reduce paper usage, garbage, and other waste
throughout the company’s many widespread offices. Unfortunately, a survey indicates that e mployees do not
value environmental objectives and do not know how to “reduce, reuse, recycle.” As the executive responsible
for this change, you have been asked to develop a strategy that might bring about meaningful behavioural change
toward this environmental goal. What would you do?
Scenario 2: Go Forward Airline A major airline had experienced a decade of rough turbulence, including two
bouts of bankruptcy protection, I 0 managing directors, and morale so low that employees had removed the company’s
logo from d1eir uniforms because they were embarra~sed to let others know where they worked. Service was terrible,
and the airplanes rarely arrived or left the terminal on time. This wa~ costing the airline significant an1ount~ of money
in pa~senger layovers. Managers were paralyzed by anxiety; most didn’t know how to set strategic goals that actually
succeeded. One-fifth of all flight~ were losing money, and the company overall was near financial collapse Gust
three months from defaulting on payroll obligations). You and the recently hired CEO must get employees to quickly
improve operational efficiency and customer service. What actions would you take to bring about these changes?
Self-Assessments for Chapter 15
SELF-ASSESSMENT NAME
Are you ready for change?
Are you tolerant of change?
I
DESCRIPTION
People seldom accept change quickly or easily. They have good reasons for opposing
change or don’t understand the urgency for change. particularly where it requires them
to alter their own behaviour. This se]f .. assessment identifies conditions that are holding
back your readiness for a specific change initiative.
Some people eagerly seek out novelty and new experiences. Others are keen to
maintain the status quo and predictability. No matter how much communication.
involvement and other change management strategies are applied. people in the
latter category continue to resist because they have Jiule toler.mce of change. This
self-assessment estimates your natur.tl tendency to tolerate change. I

Additional Cases
Case 1 A MIR KISS?
Case 2 ARCTIC MINING CONSULTANTS
Case 3 BRIDGING THE TWO WORLDS: THE ORGANIZATIONAL DILEMMA
Case 4 GOING TO THE X-STREAM
Case 5 KEEPING SUZANNE CHALMERS
Case 6 NORTHWEST CANADIAN FOREST PRODUCTS LIMITED (REVISED)
Case 7 THE REGENCY GRAND HOTEL
Case 8 SIMMONS LABORATORIES
Case 9 TAMARACK INDUSTRIES
Case 10 THE OUTSTANDING FACULTY AWARD
Case 11 VETEMENTS LTEE
Case 1 A MIR KISS?
by Steven L. McShane, Curtin Un iversity (Australia) and
U niversity of Vict o ria (Canada)
A team of psychologists at Moscow’s Institute for Biomedical Problems (IBMP) wanted to Jearn more
about the dynamics of long-term isolation in space. This knowledge would be applied to the Interna-
tional Space Station, a joint project of several countries that would send people into space for more
than six months. It would eventually include a trip to Mars taking up to three years.
IBMP set up a replica of the Mir space station in Moscow. They then arranged for three interna-
tional researchers from Japan, Canada, and Austria to spend I 10 days isolated in a chamber the size
of a train car. This chamber joined a smaller chamber where four Russian cosmonauts had already
completed half of their 240 days of isolation. This was the first time an international crew was involved
in the studies. None of the participants spoke Engl ish as their first language, yet they communicated
throughout their stay in English at varying levels of proficiency.
Judith Lapierre, a French Canadian, was the only female taking part in the experiment. Along with
a PhD in publ ic health and social medicine, Lapierre had studied space sociology at the International
Space University in France, and conducted isolation research in the Antarctic. This was her fourth
trip to Russia, where she had learned the language. The Japanese space program proposed a female
participant along with male colleagues for the mission, but IBMP did not accept the Japanese female
appl icant into the program.
The Japanese and Austrian participants viewed the participation of a woman as a favourable factor,
says Lapierre. They also assisted her in making the surroundings more comfortable by rearranging the
furniture, hanging posters on the wall, and covering the kitchen table with a tablecloth. “We adapted
our environment, whereas the Russians just viewed it as something to be endured,” she explains. “We
decorated for Christma~. because I’m the kind of person who likes to host people.”
NEW YEAR’S EVE TURMOIL
Ironically, it wa~ at one of those social events, the New Year’s Eve party, when events took a turn for
the worse. After drinking vodka (allowed by the Russian space agency), two of the Russian cosmo-
nauts got into a fistfight that left blood splattered on the chamber walls. At one point, a colleague hid
the knives in the station’s kitchen because of fears that the two Russians were about to stab each other.
CA-1

CA-2 Additional Cases
The two cosmonauts, who generally did not get along, had to be restrained by other men. Soon after
that brawl, the Russian commander grabbed Lapierre, dragged her out of view of the television moni-
toring cameras, and kissed her aggressively-twice. Lapierre fought him off, but the message didn’t
register. He tried to kiss her again the next morning.
The next day, the international crew complained to IBMP about the behaviour of the Russian cos-
monauts. The Russian institute apparently took no action against any of the aggressors. Instead, the
institute’s psychologists repl ied that the incidents were part of the experiment. They wanted crew
members to solve their personal problems with mature discussion, without asking for outside help.
“You have to understand that Mir is an autonomous object, far away from anything,” Vadim Gushin,
the IBMP psychologist in charge of project, explained after the experiment had ended in March. “If the
crew can’t solve problems among themselves, they can’t work together.”
Following IBMP’s response, the international crew wrote a scathing Jetter to the Russian institute
and the space agencies involved in the experiment. “We had never expected such events to take place in
a highly controlled scientific experiment where individuals go through a multistep selection process,”
they wrote. “If we had known . . . we would not have joined it as subjects.” The Jetter also complained
about IBMP’s response to their concerns.
Informed of the New Year’s Eve incident, the Japanese space program convened an emergency
meeting on January 2nd to address the issue. Soon after, the Japanese team member quit, apparently
shocked by IBMP’s inaction. He was replaced with a Russian researcher on the international team. Ten
days after the fight-a little over a month after the international team began the mission-the doors
between the Russian and international crew’s chambers were barred at the request of the international
research team. Lapierre later emphasized that this action was taken because of concerns about violence,
not because of the incident involving her.
A STOLEN KISS OR SEXUAL HARASSMENT
By the end of the experiment in March, news of the fistfight between the cosmonauts and the com-
mander’s attempts to kiss Lapierre had reached the public. Russian scientists attempted to play down
the kissing incident by saying that it was one fleeting kiss, a clash of cultures, and a female participant
who was too emotional.
“In the West, some kinds of kissing are regarded as sexual harassment. In our culture it’s nothing,” said
Russian scientist Vadim Gushin in an interview. In another interview, he explained, “The problem of sexual
harassment is given a lot of attention in North America but less in Europe. In Russia it is even Jess of an
issue, not because we are more or Jess moral than the rest of the world; we just have different priorities.”
Judith Lapierre says the kissing incident was tolerable compared to this reaction from the Russian
scientists who conducted the experiment. “They don’t get it at all,” she complains. “They don’t think
anything is wrong. I’m more frustrated than ever. The worst thing is that they don’t realize it was wrong.”
Norbert Kraft, the Austrian scientist on the international team, also disagreed with the Russian
interpretation of events. “They’re trying to protect themselves,” he says. “They’re trying to put the fault
on others. But this is not a cultural issue. If a woman doesn’t want to be kissed, it is not acceptable.”
Sourr:es: G. Sinclair Jr .. ”If you Scream in Space. Does Anyone Hear?'”‘ Winnipeg Free Pres…::. May 5. 2000. p. A4: S. MarLin. “Reining in Lhe
Spac.e Cowboys..” Globe& Mail. Apr-il 19. 2000. p. Rl: M. Gray. “A Space Dream SourS.” Maclean’s. April 17.2000. p. 26: E. Niiler. “In Se.areh
of the Perfect AsLrt)flaut.” Boston Globe. April4. 2000. p. FA: J. Tracy. “I 10-Day lsolatjon Ends in Sullen . . . lsolatioo.” Moscow Times. March
30.2000. p. 1: M. Warren. “A Mir Kiss?” Daily Telegraph (london). Mareh 30.2000. p. 22: G. York. “Canadian’s Hara..:;s:ment Complaint
S<<>rned.” Globe & Mail. March 25. 2000. p. A2: S. Nolen . .. Lust in Space:· Globe & Mail. March 24. 2000. p. A3.
Case 2 ARCTIC MINING CONSULTANTS
by Steven L. McShane, Curtin University (Australia) and University of V ictoria
(Canada), and Tim Neale
Tom Parker enjoys working outdoors. At various times in the pa~t. he ha~ worked a~ a ranch hand, high
steel rigger, headstone installer, prospector, and geological field technician. Now 43, Parker is a geological
field technician and field coordinator with Arctic Mining Consultants. He has specialized knowledge and

Additional Cases CA-3
experience in all nontechnical a~pect~ of mineral exploration, including claim staking, line cutting and grid
installation, soil sampling, prospecting, and trenching. He is responsible for hiring, training, and supervising
field a~sistants for all of Arctic Mining Consultants’ programs. Field assistants are paid a fairly low daily
wage (no matter how long they work, which may be up to 12 hours) and are provided meals and accom-
modation. Many of the programs are operated by a project manager who reports to Parker.
Parker sometimes acts a~ a project manager, as he did on a job that involved staking I 5 claims near
Eagle Lake, British Columbia. He selected John Talbot, Greg Boyce, and Brian Millar, all of whom
had previously worked with Parker, as the field assistants. To stake a claim, the project team marks
a line with flagging tape and blazes (ribbons, paint, or other trail markers) along the perimeter of the
claim, cutting a claim post every 500 metres (called a ” length”). The IS claims would require almost
100 kilometres of line in total. Parker had budgeted seven days (plus mobi lization and demobi lization)
to complete the job. This meant that each of the four stakers (Parker, Talbot, Boyce, and Millar) would
have to complete more than seven lengths each day. The following is a chronology of the project.
DAY 1
The Arctic Mining Consultants’ crew assembled in the morning and drove to Eagle Lake, from where
they were flown by hel icopter to the claim site. On arrival, they set up tents at the edge of the area to
be staked, and agreed on a schedule for cooking duties. After supper, they pulled out the maps and
discussed the job-how long it would take, the order in which the areas were to be staked, possible
helicopter landing spots, and area~ that might be more difficult to stake.
Parker pointed out that with only a week to complete the job, everyone would have to average seven
and a half lengths per day. ” I know that is a lot,” he said, “but you’ve al l staked claims before and I’m
confident that each of you is capable of it. And it’s only for a week. If we get the job done in time,
there’s a $300 bonus for each of you.” Two hours later, Parker and his crew members had developed
what seemed to be a workable plan.
DAY2
Millar completed six lengths, Boyce six lengths, Talbot eight, and Parker eight. Parker was not pleased
with Millar’s or Boyce’s production. However, he didn’t make an issue of it, thinking that they would
develop their “rhythm” quickly.
DAY3
Millar completed five and a half lengths, Boyce four, and Talbot seven. Parker, who was nearly twice
as old a~ the other three, completed eight lengths. He also had enough time remaining to walk over and
check the qual ity of stakes that Millar and Boyce had completed, and then walk back to his own area
for helicopter pickup back to the tent site.
That night Parker exploded with anger. ” I thought I told you that I wanted seven and a half lengths
a day!” he shouted at Boyce and Millar. Boyce said that he was slowed down by unusually thick under-
brush in his assigned area. Millar said that he had done his best and would try to pick up the pace.
Parker did not mention that he had inspected their work. He explained that as far as he was concerned,
the field assistants were supposed to finish their assigned area for the day, no matter what.
Talbot, who was sharing a tent with Parker, talked to him later. “I think that you’re being a bit hard
on them, you know. I know that it has been more by luck than anything else that I’ve been able to do my
quota. Yesterday I only had five lengths done after the first seven hours and there was only an hour before
I was supposed to be picked up. Then I hit a patch of really open bush, and was able to do three lengths
in 70 minutes. Why don’t I take Millar’s area tomorrow and he can have mine? Maybe that will help.”
“Conditions are the same in all of the areas,” replied Parker, rejecting Talbot’s suggestion. “Millar
just has to try harder.”
DAY4
Millar did seven lengths and Boyce completed six and a half. When they reported their production that
evening, Parker grunted uncommunicatively. Parker and Talbot did eight lengths each.

CA-4 Additional Cases
DAYS
Millar completed six lengths, Boyce six, Talbot seven and a half, and Parker eight. Once again Parker
blew up, but he concentrated his diatribe on Millar. “Why don’t you do what you say you are going to
do? You know that you have to do seven and a half lengths a day. We went over that when we first got
here, so why don’t you do it? If you aren’t wi lling to do the job then you never should have taken it in
the first place!”
Millar replied by saying that he was doing his best, that he hadn’t even stopped for lunch, and that
he didn’t know how he could possibly do any better. Parker launched into him again: “You have got to
work harder! If you put enough effort into it, you will get the area done!”
Later Millar commented to Boyce, ” I hate getting dumped on all the time! I’d quit if it didn’t mean
that I’d have to walk 80 kilometres to the highway. And besides, I need the bonus money. Why doesn’t
he pick on you? You don’t get any more done than me; in fact, you usually get less. Maybe if you did a
bit more he wouldn’t be so bothered about me.”
“I only work as hard as I have to,” Boyce replied.
DAY6
Millar raced through breakfast, wa~ the first one to be dropped off by the helicopter, and arranged to be
the last one picked up. That evening the production figures were a~ follows: Millar eight and a quarter
lengths, Boyce seven, and Talbot and Parker eight each. Parker remained si le nt when the field assis-
tants reported their performance for the day.
DAY7
Millar was again the first out and last in. That night, he collapsed in an exhausted heap at the table, too
tired to eat. After a few moments, he announced in an abject tone, “Six lengths. I worked like a dog al l
day and I only got a lousy six lengths!” Boyce completed five lengths, Talbot seven, and Parker seven
and a quarter.
Parker was furious. “That means we have to do a total of 34 lengths tomorrow if we are to finish this
job on time!” With his eyes directed at Millar, he added: “Why is it that you never finish the job? Don’t
you real ize that you are part of a team, and that you are letting the rest of the team down? I’ve been
checking your lines and you’re doing too much blazing and wasting too much time making picture-
perfect claim posts! If you worked smarter, you’d get a lot more done!”
DAYS
Parker cooked breakfa~t in the dark. The helicopter dropoffs began as soon as morning light appeared
on the horizon. Parker instructed each assistant to complete eight lengths and, if they finished early, to
help the others. Parker said that he would finish the other 10 lengths. Helicopter pickups were arranged
for one hour before dark.
By noon, after working as hard as he could, Millar had only completed three lengths. “Why bother,”
he thought to himself, “I’ ll never be able to do another five lengths before the helicopter comes, and
I’ ll catch the same amount of abuse from Parker for doing six lengths as for seven and a half.” So he sat
down and had lunch and a rest. “Boyce won’t finish his eight lengths either, so even if I did finish mine,
I still wouldn’t get the bonus. At least I’ ll get one more day’s pay this way.”
That night, Parker was livid when Millar reported that he had completed five and a half lengths.
Parker had done ten and a quarter lengths, and Talbot had completed eight. Boyce proudly announced
that he finished seven and a half lengths, but sheepishly added that Talbot had helped him with some of
it. All that remained were the two and a half lengths that Millar had not completed.
The job was finished the next morning and the crew demobi lized. Millar has never worked for Arctic
Mining Consultants again, despite being offered work several times by Parker. Boyce sometimes does
staking for Arctic, and Talbot works full-time with the company.
©Copyright. Steven L. McShane and Tim Neale. This ease is based on actual events.. but names and some characteristics have been ehang.ed to
maintain anonymjty.

Additional Cases CA-5
Case 3 BRIDGING THE TWO WORLDS:
THE ORGANIZATIONAL DILEMMA
by William Todorovic, Indiana-Purdue University, Fort Wayne
I had been hired by Aluminum Elements Corp. (AEC), and it was my first day of work. I was 26 years
old, and I was now the manager of AEC’s customer service group, which looked after customers,
logistics, and some of the raw material purchasing. My superior, George, was the vice-president of the
company. AEC manufactured most of its products from aluminum, a majority of which were destined
for the construction industry.
As I walked around the shop floor, the employees appeared to be concentrating on their jobs, barely
noticing me. Management held daily meetings, in which various production issues were discussed. No
one from the shop floor wa~ invited to the meeting, unless there was a specific problem. Later I also
learned that management had separate wa~hrooms, separate lunchrooms, as well as other perks that
floor employees did not have. Most of the floor employees felt that management, although polite on the
surface, did not really feel they had anything to Jearn from the floor employees.
John, who worked on the aluminum slitter, a crucial operation required before any other operations
could commence, had previously had a number of unpleasant encounters with George. As a result,
George usual ly sent written memos to the floor in order to avoid a direct confrontation with John.
Because the directions in the memos were complex, these memos were often more than two pages in
length.
One morning, as I was walking around, I noticed that John wa~ very upset. Feeling that perhaps
there was something I could do, I approached John and asked him if I could he lp. He indicated that
everything was just fine. From the looks of the situation, and John’s body language, I felt that he was
wi lling to talk, but John knew that this wa~ not the way things were done at AEC. Tony, who worked
at the machine next to John’s, then cursed and said that George was getting on John’s back again. John
complained that the office guys only cared about schedules, not about the people down on the floor.
I j ust looked at him, and then said that I only began working here last week, and thought that I could
address some of their issues. Tony gave me a strange look, shook his head, and went back to his
machine. I could hear him still swearing a~ I left. Later I real ized that most of the office staff were also
offended by Tony’s language.
On the way back to my office, Lesley, a recently hired engineer from Russia, approached me and
pointed out that the employees were not accustomed to management talking to them. Management only
issued orders and made demands. As we discussed the different perceptions between office and floor
staff, we were interrupted by a very loud lunch bell, which startled me. I was happy to join Lesley for
lunch, but she a~ked me why I was not eating in the office lunch room. I replied that if I wa~ going to
understand how AEC worked, I had to get to know all the people better. In addition, I realized that this
was not how things were done, and wondered about the nature of this apparent division between the
management and the floor. In the lunchroom, the other workers were amazed to see me there, com-
menting that I was just new and had not learned the ropes yet.
After lunch, when I asked George, my supervisor, about his recent confrontation with John, George
was surprised that John got upset, and exclaimed, “I just wanted John to know that he did a great job,
and as a result, we will be able to ship on time one large order to the West Coast. In fact, I thought I was
complimenting him.”
Earl ier, Lesley had indicated that certain behaviour was expected from management, and therefore
from me. I reasoned that I do not think that this behaviour works, and besides it is not what I believe
or how I care to behave. For the next couple of months, I simply walked around the floor and took
every opportunity to talk to the shop floor employees. Often, when the employees related specific
information about their workplaces, I felt that it went over my head. Frequently, I had to write down the
information and revisit it later. I made a point of listening to them, identifying where they were coming
from, and trying to understand them. I needed to keep my mind open to new idea~. Because the shop
employees expected me to make requests and demands, I made a point of not doing any of that. Soon

CA-6 Additional Cases
enough, the employees became friendly, and started to accept me as one of their own, or at least as a
different type of a management person.
During my third month of work, the employees showed me how to improve the schedul ing of jobs,
especial ly those on the aluminum slitter. In fact, the greatest contribution was made by John who dem-
onstrated better ways to combine the most common slitting sizes, and reduce waste by retaining some
of the “common-sized” material for new orders. Seeing the opportunity, I programmed a spreadsheet to
calculate and track inventory. This, in addition to better planning and forecasting, allowed us to reduce
our new order turnarounds from four to five weeks to in-by-10 a.m. out-by-5 p.m. on the same day.
By the time I had been employed for four months, I real ized that members from other departments
were coming to me and asking me to relay messages to the shop employees. When I asked why they
were delegating this task to me, they stated that I spoke the same language as the shop employees.
Increasingly, I became the messenger for the office-to-floor shop communication.
One morning, George called me into his office and complimented me on the levels of customer
service and the improvements that have been achieved. As we talked, I mentioned that we could not
have done it without John’s help. “He really knows his stuff, and he is good,” I said. I suggested that
we consider him for some type of a promotion. Also, I hoped that this would be a positive gesture that
would improve the communication between the office and shop floor.
George turned and pulled a flyer out of his desk; “Here is a management skills seminar. Do you
think we should send John to it?”
“That is a great idea,” I exclaimed, “Perhaps it would be good if he were to receive the news from
you directly, George.” George agreed, and after discussing some other issues, we parted company.
That afternoon, John came into my office, upset and ready to quit. “After all my effort and work,
you guys are sending me for training seminars. So, am I not good enough for you?”
Case 4 GOING TO THE X-STREAM
by Roy Smollan, Auckland University of Technology, New Zealand
Gil Reihana was the chief executive officer of X-Stream, a company he launched in Auckland,
New Zealand, six years ago at the age of 25, after graduating with a bachelor’s degree in information
technology and management. He had inherited $300,000 and had persuaded various fami ly members
to invest additional money. X-Stream assembled personal computers for the New Zealand and Austra-
lian markets and sold them through a number of chain stores and independent retailers. The company
had soon established a reputation for quality hardware, customized products, excellent delivery times
and after-sales service. Six months ago it had started a software division, special izing in webpage
design and consulting on various applications for the development of electronic business.
Gi l was driven by a desire to succeed. He had started working part-time at an electronics retailer at
age 16, and in his spare time took apart old computers in his garage to see how they were made. He was
extraverted, energetic, and enthusiastic, often arriving at work before 5 a.m. and seldom leaving before
7 p.m. He felt that work should be challenging but fun, too. He had initially picked a young senior man-
agement team that he thought shared his outlook. A casual, almost irreverent atmosphere developed.
However, a poorly organized accounting department led to the demise of the first accountant after two
years. Gil bel ieved that major decisions should be made by consensus and that individuals should then
be empowered to implement these decisions in their own way. In the beginning, he had met with each
staff member in January to discuss with them how happy they were in their jobs, what their ambitions
were, and what plans they would like to make for the coming year in terms of their own professional
development. As the company had grown this had become more difficult and he had left each member
of his senior management team to do this with their own staff, but did not monitor whether they were
doing it or how well it worked. Now he tried to keep in touch with staff by having lunch with them in
the cafeteria occasionally.

Additional Cases CA-7
Denise Commins (affectionately known to al l staff as Dot Com) was the chief financial officer.
She and Gi l could not be more different. Denise was quiet, methodical, and very patient. Her superb
interpersonal skills complemented a highly analytical mind. At 55, she was considerably older than
most of the employees and often showed a strong maternal side. Many of her team (and several from
other departments as well) frequently consulted her on work issues and personal problems, too. She
enjoyed the informal relationships she had built up but found that the technical aspects of her role were
becoming less rewarding.
Don Head, the marketing manager, was considered to be a rather ruthless operator, often undercut-
ting the competition in terms of price, and, on more than one occasion, by circulating false rumours
of defects in their products. He deemed himself “a ladies’ man” and was known to flir t with a number
of the staff. A case of sexual harassment had been dropped after a 22-year-old secretary had been paid
a sizeable sum of money in an out-of-court settlement. Gil and the members of the senior manage-
ment team had been furious but Don had denied any wrongdoing, claiming that she had “led him on.”
He had been at university with Gi l and they spent many hours after work at a pub around the comer
from the factory. With sales rising year after year, his marketing expertise and cunning were regarded
as essential to the company’s continuing growth. He had a department of eight whom he had carefully
screened to ensure he was employing ambitious self-starters. They were required to set and achieve
their own targets, as long as they were “big, hairy, ambitious goals,” a phrase he had heard at a seminar.
Jason Palu, the production manager, was a softly spoken man who had started as a supervisor and
quickly worked his way to the top position. He set extremely high standards for the production staff
and was considered to be a perfectionist. He was highly regarded by his colleagues for his efficiency
and reliability. There were very few occasions when an order could not be fulfilled on time and his
goal was zero defects. He tended to be autocratic and some people complained that he never listened
to them. He al located work hours that did not suit people, and often insisted on overtime that was paid,
but was usually at very short notice. When one production worker complained, Palu tersely remarked,
“We have a job to do and we just have to get on with it. The company depends on us.”
Heather Berkowitz was the chief web page designer. She had blue hair, a ring through her nose, and
dressed in a variety of exotic clothes that had been sourced from a number of second-hand stores. She
seldom arrived at work much before I I a.m. and often left before 4 p.m. She said she did her best work
at home, often at night, so why should she “punch the clock like the drones on the assembly line?”
Gi l and others had often received emails from her that had been sent at al l hours of the night. She had
establ ished a reputation as a top web page designer, and although her physical appearance did not go
down too well with some of the company’s clients (or staff), the quality and quantity of her work was
extremely high.
On Thesdays at 9 a.m. the senior staff met to discuss weekly plans and any significant issues that
had arisen. All employees were invited to the meeting, an opportunity that some took advantage of by
attending. Gil trusted all staff to keep confidential matters within the company. He believed that if the
organization shared information with employees they would be more likely to support management
decisions. The meetings lacked formal ity and usually started with some jokes, usually at the expense
of some members of staff. By and large the jokes were meant to be inoffensive, but were not always
taken that way. Nicknames were often assigned to staff, mostly by Don Head, some quite derogatory.
You were thought to be a “wet blanket” if you objected. Don seemed oblivious to the unflattering
nickname he had been given, preferring to cal l himself Braveheart, sometimes even signing memos in
this fashion.
Although employment agreements referred to a 40-hour week, there wa~ an expectation that staff
would put in substantial ly more than that. Only the assembly line workers had to clock in and out, but
this, Jason had explained, was due to the overtime that assembly staff were required to work to meet
deadlines. The overtime pay was welcomed by some production staff and resented by some employees
in other departments who believed they should be entitled to the same benefits.
Recently a conflict had arisen between Jason and Don. For some time, the company had been devel-
oping a top-of-the range laptop which wa~ scheduled for launch in two weeks’ time. Jason had been
urging senior management to delay the introduction of the new X-MH until some hitches had been

CA-8 Additional Cases
sorted out. A batch of chips acquired from abroad had contained some defective features. He wanted
to postpone the new model until these problems had been completely sorted out, a process which he
believed would take another month. Don found this to be unacceptable. A former All Blacks rugby
team captain had been contracted to attend the launch and market the new model on a roadshow that
would travel to New Zealand and Austral ia’s main cities. He would not be available at the time Jason
wa~ prepared to release the X-MH. At a heated staff meeting, some of the senior staff backed Don, and
some agreed with Ja~on. Don had urged all of his department to attend the meeting, to present a united
front and convey an image of power.
Heather Berkowitz had arrived halfway through the meeting and with a mouthful of muffin pro-
claimed that there was no rush to get out the “new toy.” The company had plenty of other issues to
which it could devote its energy. She said she had met the head of information technology at a chain of
fast food restaurants that wanted to revitalize its website. She maintained she needed three extra staff to
get this up and running. She exited the meeting five minutes later. Don was fuming at the interruption
and demanded that Gil should stick to the original launch date of the X-MH. Gi l calmly replied that he
understood Don’s frustration, but that more consultation was necessary. He said that it would be dis-
cussed by the parties concerned during the week and a final decision would be made at the following
1\tesday’s staff meeting.
Don spent the rest of the day lobbying other members of the senior staff. He offered Dorothy the use
of his beach cottage if she backed him and promised to support her on the acquisition of expensive new
accounting software. She just laughed and said that she was convinced the senior management team
would approve the new software. She also informed Don that a member of her staff had seen one of his
sales representatives entering a strip joint the previous week at a time when the sales force had been
engaged in a staff meeting.
Other problems had arisen in recent months. Ramesh Patel, the newly recruited head of e-business
applications had, with help from a personal contact, developed a software program that would help
hotels and restaurants source products and services over the Internet. It wa~ beginning to generate useful
revenue. His contact had now billed X-Stream for $25,000 in consultancy fees and development costs.
Ramesh claimed that his contact had owed him a favour and that no mention of money had ever been
made. X-Stream had referred the matter to its legal counsel.
Les Kong, the research and development manager (hardware) had complained to Gi l that he could
no longer work under Jason Palu. Whi le he considered him a very plea~ant man, and a very capable
production manager, he could no longer tolerate his strict control style. “You can’t do creative work on
command!” was his lament. He loved his job and had spent hours over several weekends developing
and refining a new product.
There was considerable resentment from J a~on and Don about the resources that had been invested
in the software division, partly because they did not see the need for the company to diversify and
partly because they claimed that money was being diverted from their departments to fund the new
ventures. Ramesh claimed that “a good e-business starts at home-we should open up all our procure-
ment via the Internet.” His suggestion did not go down well with Jason and Don.
Gi l had been pondering the structure of X-Stream for some time. The old functional structure no
longer seemed appropriate. “Silo” mentality and departmental interests seemed to predominate and turf
wars took place. The company had grown to 64 staff in New Zealand and eight in Austral ia. The ongo-
ing development of new hardware and the introduction of the software s ide of the business had made
management somewhat complicated. He missed the old days when he knew every member of staff.
The informal decision making that was characteristic of the business might have to give way to more
formal processes. Yet he did not want to lose the creativity that underpinned the company’s success.
Despite the open invitation to attend the management meetings, many staff complained that they never
knew what was going on. He expected all senior managers to keep their departmental staff informed of
developments. Some had done this admirably while others had virtual ly ignored his wishes.
A human resources manager, Alkina Bennelong, had been appointed a month previously and
reported to Denise Commins. She had been reviewing the company’s loosely worded job descrip-
tions and person specifications, and the recruitment and selection systems, and had suggested more

Additional Cases CA-9
professional but more elaborate approaches. She had also suggested the introduction of a performance
management system, including feedback from peers, direct reports, and outsiders, such as suppliers
and customers. “Over my dead body!” was the retort of Don Head. “How can you allow subordinates
to tell you how to do your job?” queried Ja~on Palu. “Can’t see what the fuss is all about,” said Heather
Berkowitz. “Everybody keeps telling me what to do anyway, even though they don’t understand the
first thing about my job! But it doesn’t worry me.”
Case 5 KEEPING SUZANNE CHALMERS
by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canada)
Thomas Chan hung up the telephone and sighed. The vice-president of software engineering at
Advanced Photonics Inc. (API) had just spoken to Suzanne Chalmers, who had cal led to arrange a
meeting with Chan later that day. She didn’t say what the meeting wa~ about, but Chan almost instinc-
tively knew that Suzanne was going to quit after working at API for the pa~t four years. Chalmers is
a software engineer in Internet Protocol (IP), the software that directs fibre-optic light through API’s
routers. It is very specialized work, and Suzanne is one of API’s top talents in that area.
Thoma~ Chan had been through this before. A valued employee would arrange a private meeting.
The meeting would begin with a few pleasantries, then the employee would announce that he or she
wanted to quit. Some employees said they were leaving because of the long hours and stressful dead-
lines. They said they needed to decompress, get to know their kids again, or whatever. But that wasn’t
usually the real reason. Almost every organization in this industry was scrambling to keep up with tech-
nological advances and the competition. Employees would just leave one stressful job for another one.
Also, many of the people who left API joined a startup company a few months later. These startup
firms can be pressure cookers where everyone works 16 hours each day and ha~ to perform a variety
of tasks. For example, engineers in these small firms might have to meet customers or work on venture
capital proposals rather than focus on specialized ta~ks related to their knowledge. API now ha~ over
6,000 employees, so it is easier to assign people to work that matches their technical competencies.
No, the problem isn’t the stress or long hours, Chan thought. The problem is money-too much
money. Most of the people who leave are millionaires. Suzanne Chalmers is one of them. Thanks to
generous share options that have skyrocketed on the stock markets, many employees at API have more
money than they can use. Most are under 40 years old, so it’s too early for them to retire. But their
financial independence gives them less reason to remain with API.
THE MEETING
The meeting with Suzanne Chalmers took place a few hours after the telephone call. It began like the
others, with the initial pleasantries and brief discussion about progress on the latest fibre-optic router
project. Then, Suzanne made her well-rehearsed statement: “Thomas, I’ve really enjoyed working here,
but I’m going to leave Advanced Photonics.” Suzanne took a breath, then looked at Chan. When he
didn’t reply after a few seconds, she continued: “I need to take time off. You know, get away to recharge
my batteries. The project’s nearly done and the team can complete it without me. Well, anyway, I’m
thinking of leaving.”
Chan spoke in a calm voice. He suggested that Suzanne should take an unpaid leave for two or maybe
three months, complete with paid benefits, then return refreshed. Suzanne pol itely rejected that offer,
saying that she needed to get away from work for a while. Thomas then asked Suzanne whether she was
unhappy with her work environment-whether she was getting the latest computer technology to do her
work and whether there were problems with co-workers. The workplace was fine, Suzanne replied. The
job was getting a bit routine, but she had a comfortable workplace with excellent co-workers.
Chan then apologized for the cramped workspace, due mainly to the rapid increa~e in the number
of people hired over the past year. He suggested that if Suzanne took a couple of months off, API
would give her special treatment with a larger workspace with a better view of the park behind the

CA-10 Additional Cases
campus-like building when she returned. She politely thanked Chan for that offer, but it wasn’t what
she needed. Besides, it wouldn’t be fair to have a large workspace when other team members would be
working in smal ler quarters.
Chan was running out of tactics, so he tried his last hope: money. He a~ked whether Suzanne had
had higher offers. Suzanne replied that she regularly received calls from other companies, and some
of them offered more money. Most were startup firms that offered a lower salary but higher potential
gains in share options. Chan knew from market surveys that Suzanne was already paid well in the
industry. He also knew that API couldn’t compete on share option potential. Employees working in
startup firms sometimes saw their shares increase by five or ten times their initial value, whereas shares
at API and other large firms increased more slowly. However, Chan promised Suzanne that he would
recommend that she receive a significant raise-maybe 25 percent more-and more share options.
Chan added that Chalmers wa~ one of API’s most valuable employees and that the company would
suffer if she left the firm.
The meeting ended with Chalmers promising to consider Chan’s offer of higher pay and share
options. Two days later, Chan received her resignation in writing. Five months later, Chan learned that
after a few months travelling with her husband, Chalmers joined a startup software firm in the area.
CopyTig.ht 0 200 1 Ste,-en L. McShane
Case 6 NORTHWEST CANADIAN FOREST
PRODUCTS LIM ITED (REVISED)
by Peter Seidl, British Columbia Institute of Technology
Northwest Canadian Forest Products Ltd. owns and operates five sawmills in British Columbia and
Alberta. These mills produce high-quality lumber for use in the manufacture of window frames, doors,
and mouldings for markets in the United States and Japan, in addition to lower-quality, commodity-type
lumber used in the Canadian construction industry. (The firm’s export markets tend to be more
demanding and quality-conscious than its domestic markets, but are also more lucrative.) Currently,
the president of the company is thinking about the long-term prospects of each of the mills and is pay-
ing particular attention to the Jackson Sawmill located in the small town of Jackson, B.C.
This mill was original ly built sixty years ago and was last upgraded twenty years ago. The president,
June Batna, knows she will soon (in 2 to 3 years) have to dec ide whether or not to invest very substan-
tial sums of money in a new plant and equipment at the Jackson Sawmill. New investment is required
in order to keep the mill up-to-date and competitive with similar mills throughout North America.
However, the mill has consistently been the poorest performer (in terms of productivity and product
quality) in the company over the past twenty years, even though its equipment is of similar age, type,
and qual ity as that found in the other mills.
The president would like to invest the money needed because the alternative to re-investing in Jackson
would be to downsize the Jackson Sawmill by reduc ing production capacity and permanently laying
off about half the 200-person workforce. The remaining part of the mill would serve the domestic
market only. A new mill would then be bui lt in Alberta in order to serve the more demanding, quality-
conscious export markets. A new mill in Alberta would cost somewhat more than the anticipated
investment required to modernize the Jackson Sawmill. However, Ms. Batna is willing to seriously
consider implementing this alternative because she thinks that the labour relations climate in Alberta is
much better than the one found at Jackson.
In fact, she attributes most, if not all, of the problems at Jackson to its poor labour-management
relations. During the last round of collective bargaining, there was a strike at all four of the company’s
B.C. mills. The strike wa~. however, much more bitter at Jackson than elsewhere. Company bui ldings
suffered minor damage during the strike at the hands of some striking employees. Since then, there
have been two separate occa~ions when the entire workforce walked off the job for a day to protest the
firings of two employees who were dismissed for insubordination.

Additional Cases CA-11
The Jackson Sawmill has the worst safety record of al l the company’s mills. There is a joint labour-
management health and safety committee (as required by law) but it is viewed as a waste of time by
both sides. One management member of the safety committee, Des, the production manager and the
second highest manager at the mill, has said: “The union guys start each safety committee meeting by
complaining about safety but they just can’t wait to complain about everything else they can possibly
think of. Their whining and complaining is so predictable that I go to every safety meeting ready for a
fight on workload and production issues as well as for a fight on safety. Of course, safety is everyone’s
responsibility but production issues are none of their business. Production is a management responsibility.
Plans, budgets, and other management concerns are very definitely not part of the committee’s job.
Most of what’s said at these meetings isn’t worth listening to.”
The union is also dissatisfied with the functioning of the safety committee. Ivan, the chief union steward
who also serves on the committee, observes: “If the safety committee wa~n’t mandatory by law, manage-
ment wouldn’t even pretend to listen to us. We put forward our safety concerns but management says that
we are mixing safety in with workload and production issues. They only want to talk about what they
think are safety issues-like serious accidents. Thankfully, we don’t have too many of those! But safety is
more than just avoiding major accidents. We get far too many ‘little accidents’ and ‘near-accidents’ here.
At least that’s what management calls them. They just want us to work faster and faster. We complain and
complain at the meetings but they just say ‘that’s a production issue and this is a safety committee.’ They
accuse us of trying to run the company when we ask for better equipment. They say we don’t understand
things like costs and limited budgets. We don’t care about their budgets, we’ve got work issues to talk
about and we’ll keep speaking out for the crew no matter what. That’s what the union is for.”
Big Bad John, one of the mi ll’s toughest and most experienced supervisors, describes his job as fol-
lows: “The job of supervisor is to keep a close watch on every move the crew makes. If I look away for
a second, some guy is going to be doing something wrong- either with the equipment or with the logs.
They’re always making mistakes. Lots of mistakes! Some of these guys are just plain dumb. And lazy,
too! Any chance they can get to steal some company time, they take. They start work late; they take
long lunch breaks; they talk too much during their shifts. A minute here, a minute there-it all adds up.
The younger guys are the worst. They always want to talk back to me, they can’t follow my orders like
most of the older guys can. Lousy attitude, that’s what they’ve got.”
Des, the production manager, has stated that “the mill has had a problem with worker motivation
and attitude for a~ long as I can remember. But it’s slowly getting worse as younger guys are being
hired to replace the older, retiring guys. The new workers are better educated than the older ones and
because of that they think they can treat their supervisors with disrespect. Don’t get me wrong, we get
the job done here but it takes a lot of effort on the part of the managers and, especial ly, the supervisors.
The supervisors really earn their pay here. They watch the crew closely and have to put up with a lot
of crap from them. Many of the grievances we have are a result of the discipline we have to hand out
regarding horseplay, absenteeism, tardiness, careless workmanship, and not reaching production quo-
tas. However, overal l, the mill gets the product out the door, but only because we ensure that the crew
works hard. Despite grumblings from the crew, we maintain a pretty good pace of work around here.”
Vic, the youngest union steward, gives his view of labour-management relations: “The supervisors
and the managers, they know it all. They think they’re so smart. They treat the guys on the crew like
children. Almost everyone on the crew has a high school education. Some even have college back-
grounds. Most are raising families. We’re not stupid! Sure, some guys come in late and miss a day of
work now and then. Who can blame them? The pace of work is exhausting. How can you do a good job
when you’re tired and rushing al l the time?” He adds: “Of course, we’re not perfect. We make mistakes
just like everyone else does. But nobody ever explains anything to the crew members. The supervi-
sors just watch everyone like hawks and jump al l over them, criticize them, and make them feel stupid
when they use a piece of equipment the wrong way. We’re always so rushed and busy here that the
senior crew members don’t have much time to explain things to the newer workers, the younger guys.
The equipment could be in better shape. That would help.”
Des, the production manager, ha~ expressed his views on labour-management relations: “The union
just doesn’t understand–or even care about-the connection between the poor work ethic, the poor

CA-12 Additional Cases
attitude on the part of the crew members here, and the mill ‘s mediocre productivity and product qual ity.
The union and the crew only take their very narrow ’employee-view’ of how things are done around
here. They don’t understand the bigger picture. Well, it’s very competitive out there. They don’t under-
stand what tight budgets, increasing costs, declining quality, missed production targets, and complain-
ing customers mean to a business. They just sit back and complain about our management style. What
they don’t realize is that their attitude makes our management style necessary. Complaining is easy,
no responsibility is needed. Managing, on the other hand, is chal lenging. And it’s especially tough to
control this particular crew. We’ve currently got 40 unresolved grievances-that’s a lot of formal com-
plaints for a mill of our size. Some of the union stewards actually go out among the crew and look for
grievances just because they’re mad they can’t run the mill the way they want to. Sometimes I think the
stewards want to create grievances where no real problems exist. They want to give us in management
headaches.”
Vic, a union steward, went on to say: “We’ve currently got 40 unresolved grievances at different
stages of the grievance procedure-! don’t have to tell you that’s quite a lot for a mill of our size. Some
crew members are really mad at management and file a lot of grievances. The grievances are mostly
about challenging the discipl ine management hands out regarding horseplay, absenteeism, tardiness,
careless workmanship, and not reaching production quotas. We-the shop stewards-try to calm them
down but some guys are really angry about how they’re treated. The stewards spend a lot oftime trying
to settle things outside the formal grievance process, but some of the crew really want the stewards to
file grievances and some supervisors don’t want to solve things informally. Things are pretty formal
around here. It’s all such a wa~te of time and energy. The pay is good but I wouldn’t recommend this as
a place to work to anyone unless they like being treated like a misbehaving chi ld.”
The president of the company has recently informed Digby, the mill’s new general manager (he
started la~t month), of the decision she will soon have to make regarding the mi ll’s future. She told
Digby that significant improvement~ in mill productivity and product quality are required if the mi ll is
to receive a substantial investment in new plant and equipment. Without such improvements, the mill
would be downsized and about half of the workforce would be permanently laid off. Half the supervisory
and managerial personnel would also lose their j obs.
Digby has just telephoned Moe (the president of the local union who does not work at the mill but
who is very familiar with developments at the mill) to tell him about the message from the company
president. Upon hearing of the potential job losses, Moe was troubled and asked to meet with Digby
to discuss the sintation. However, Moe was also somewhat skeptical because the previous general
manager once told him that some permanent layoffs would occur unless productivity was improved.
No layoffs subsequently occurred. Therefore, Moe is uncertain if the company is serious about these
potential future layoffs or merely bluffing in order to get the employees to work harder.
Case 7 THE REGENCY GRAND HOTEL
by Elizabeth Ho, Gucci Group, under the supervision of Steven L. McShane, C urtin
University (Australia) and University of Victoria (Canada)
The Regency Grand Hotel is a five-star hotel in Bangkok, Thai land. The hotel was establ ished fifteen
years ago by a local consortium of investors and has been operated by a Thai general manager through-
out this time. The hotel is one of Bangkok’s most prestigious hotels and its 700 employees enjoy the
prestige of being associated with the hotel. The hotel provides good employee benefits, above-market-
rate salary, and job security. In addition, a good year-end bonus amounting to four months’ salary is
rewarded to employees regardless of the hotel’s overall performance during the year.
Recently, the Regency was sold to a large American hotel chain that was very keen to expand its
operations into Thailand. When the acquisition was announced, the general manager decided to take
early retirement when the hotel changed ownership. The American hotel chain kept all of the Regency

Additional Cases CA-13
employees, although a few were transferred to other positions. John Becker, an American with I 0 years
of management experience with the hotel chain, wa~ appointed as the new general manager of the
Regency Grand Hotel. Becker was selected as the new general manager because of his previous suc-
cesses in integrating newly acquired hotels in the United States. In most of the previous acquisitions,
Becker took over operations with poor profitability and low morale.
Becker is a strong bel iever in empowerment. He expects employees to go beyond guidelines/stan-
dards to consider guest needs on a case-by-case basis. That is, employees must be guest-oriented at
all times so as to provide excellent customer service. From his U.S. experience, Becker has found that
empowerment increases employee motivation, performance, and job satisfaction, al l of which contrib-
ute to the hotel’s profitability and customer service ratings. Soon after becoming general manager at
the Regency Grand, Becker introduced the practice of empowerment so as to replicate the successes
that he had achieved back home.
The Regency Grand hotel has been very profitable since it opened. The employees have always
worked according to management’s instructions. Their responsibility wa~ to ensure that the instruc-
tions from their managers were carried out diligently and conscientiously. Innovation and creativity
were discouraged under the previous management. Indeed, employees were punished for their mistakes
and discouraged from trying out ideas that had not been approved by management. As a result, employ-
ees were afraid to be innovative and to take risks.
Becker met with the Regency’s managers and department heads to explain that empowerment would
be introduced in the hotel. He told them that employees must be empowered with decision-making author-
ity so that they can use their initiative, creativity, and judgment to satisfy guest needs or handle problems
effectively and efficiently. However, he stressed that the more complex issues and decis ions were to
be referred to superiors, who were to coach and a~sist rather than provide direct orders. Furthermore,
Becker stressed that while mistakes were allowed, repetition of the same mistake more than twice
could not be tolerated. He advised his managers and department heads that they should not discuss or
consult him on minor issues/problems and decisions. Nevertheless, he told them that they are to dis-
cuss important/major issues and decisions with him. He concluded the meeting by asking for feedback.
Several managers and department heads told him that they liked the idea and would support it, while
others simply nodded their heads. Becker was plea~ed with the response, and was eager to have his plan
implemented.
In the past, the Regency had emphasized administrative control, resulting in many bureaucratic
procedures throughout the organization. For example, the front counter employees needed to seek
approval from their manager before they could upgrade guests to another category of room. The front
counter manager would then have to write and submit a report to the general manager justifying the
upgrade. Soon after his meeting with managers, Becker reduced the number of bureaucratic rules at the
Regency and allocated more decision-making authority to front line employees. This action upset those
who previously had decision-making power over these issues. As a result, several of these employees
left the hotel.
Becker also began spending a large portion of his time observing and interacting with the employees
at the front desk, lobby, restaurants, and various departments. This direct interaction with Becker
helped many employees to understand what he wanted and expected of them. However, the employees
had much difficulty trying to distinguish between a major and minor issue/decision. More often than
not, supervisors would reverse employee decisions by stating that they were major issues requiring
management approval. Employees who displayed initiative and made good decisions in satisfying the
needs of the guests rarely received any positive feedback from their supervisors. Eventually, most of
these employees lost confidence in making decisions, and reverted back to relying on their superiors
for decision making.
Not long after the implementation of the practice of empowerment, Becker real ized that his subordi-
nates were consulting him more frequently than before. Most of them came to him to discuss or consult
on minor issues. He had to spend most of his time attending to his subordinates. Soon he began to feel
highly frustrated and exhausted, and very often would tell his secretary that “unless the hotel is on fire,
don’t let anyone disturb me.”

CA-14 Additional Cases
Becker thought that the practice of empowerment would benefit the overal l performance of the hotel.
However, contrary to his expectation, the business and overall performance of the hotel began to dete-
riorate. There had been an increasing number of guest complaints. In the past, the hotel had minimal
guest complaints. Now there were a significant number of formal written complaints every month.
Many other guests voiced their dissatisfaction verbally to hotel employees. The number of mistakes
made by employees had been on an increase. Becker was very upset when he real ized that two of the
local newspapers and an overseas newspaper had published negative feedback on the hotel in terms of
service standards. He was most distressed when an international travel magazine had voted the hotel as
“one of Asia’s nightmare hotels.”
The stress levels of the employees had been continuously mounting since the introduction of the
practice of empowerment. Absenteeism due to illness was increasing at an alarming rate. In addition,
the employee turnover rate had reached an all-time high. The good working relationships that were
established under the old management had been severely strained. The employees were no longer
united and supportive of each other. They were quick to “point fingers” at or to “back stab” one another
when mistakes were made and when problems occurred.
Note: This c.a..:;e is based on true C\’ents. but the indusLry and names have been changed.
Case 8 SIMMONS LABORATORIES
adapted by William Starbuck from a case written by Alex Bavelas
Brandon Newbridge was sitting alone in the conference room of the laboratory. The rest of the group
had gone. One of the support staff members had stopped and talked for a while about her husband’s
coming enrolment in graduate school. Brandon, now alone in the laboratory, sl id a little further down
in his chair, looking with satisfaction at the results of the first test run of the new photon unit.
He liked to stay after the others had gone. His appointment as project head was sti ll new enough to
give him a deep sense of plea~ure. His eyes were on the graphs before him, but in his mind, he could
hear Dr. Will iam Goh, the project head, saying again, “There’s one thing about this place you can bank
on. The sky is the limit for anyone who can produce!” Newbridge felt again the tingle of happiness
and embarra~sment. Well, dammit, he said to himself, he had produced. He wasn’t kidding anybody.
He had come to the Simmons Laboratories two years ago. During a routine testing of some rejected
Clanson components, he had stumbled on the idea of the photon correlator, and the rest just happened.
Goh had been enthusia~tic: A separate project had been set up for further research and development of
the device, and he had been given the job of running it. The whole sequence of events still seemed a
little miraculous to Newbridge.
He shrugged out of the reverie and was bent determinedly over the sheets when he heard someone
come into the room behind him. He looked up expectantly; Goh often stayed late himself and now
and then dropped in for a chat. This always made the day’s end especially pleasant for Brandon. But
it wasn’t Goh. The man who had come in was a stranger. He wa~ tall and thin. He wore steel-rimmed
glasses and had a very wide leather belt with a large brass buckle. Lucy, a member of Brandon’s team,
remarked later that it wa~ the kind of belt the Pi lgrims must have worn.
The stranger smiled and introduced himself. ”I’m Lester Zapf. Are you Brandon Newbridge?”
Brandon said yes, and they shook hands. “Doctor Goh said I might find you in. We were talking about
your work, and I’m very much interested in what you are doing.” Brandon waved to a chair.
Zapf didn’t seem to belong in any of the standard categories of visitors: customer, visiting fireman,
shareholder. Brandon pointed to the sheets on the table. “These are the preliminary results of a test
we’re running. We have a new gadget by the tail and we’re trying to understand it. It’s not finished, but
I can show you the section we’re testing.”
He stood up, but Zapf wa~ deep in the graphs. After a moment, he looked up with an odd grin.
“These look like plots of a Jennings surface. I’ve been playing around with some autocorrelation func-
tions of surfaces-you know that stuff.” Brandon, who had no idea what he was referring to, grinned

Additional Cases CA-15
back and nodded, and immediately felt uncomfortable. “Let me show you the monster,” he said, and
led the way to the workroom.
After Zapf left, Newbridge slowly put the graphs away, feeling vaguely annoyed. Then, as if he had
made a decision, he quickly locked up and took the long way out so that he would pass Goh’s office.
But the office was locked. Newbridge wondered whether Goh and Zapf had left together.
The next morning, Newbridge dropped into Goh’s office, mentioned that he had talked with Zapf,
and asked who he was.
“Sit down for a minute,” Goh said. “I want to talk to you about him. What do you think of him?”
Newbridge replied truthfully that he thought Zapf wa~ very bright and probably very competent. Goh
looked pleased.
“We’re taking him on,” he said. “He’s had a very good background in a number of laboratories,
and he seems to have ideas about the problems we’re tackling here.” Newbridge nodded in agreement,
instantly wishing that Zapf would not be placed with him.
“I don’t know yet where he wi ll finally land,” Goh continued, “but he seems interested in what you
are doing. I thought he might spend a little time with you by way of getting started.” Newbridge nodded
thoughtfully. “If his interest in your work continues, you can add him to your group.”
“Well, he seemed to have some good ideas even without knowing exactly what we are doing,” New bridge
answered. “I hope he stays; we’d be glad to have him.”
Newbridge walked back to the lab with mixed feel ings. He told himself that Zapf would be good for
the group. He wa~ no dunce; he’d produce. Newbridge thought again of Goh’s promise when he had
promoted him: “The sky is the limit here for anyone who can produce!” The words seemed to carry the
overtones of a threat now.
That day Zapf didn’t appear until mid-afternoon. He explained that he had had a long lunch with
Goh, discussing his place in the lab. “Yes,” said Newbridge, “I talked with Dr. Goh this morning about
it, and we both thought you might work with us for a while.”
Zapf smiled in the same knowing way that he had smiled when he mentioned the Jennings surfaces.
“I’d like to,” he said.
Newbridge introduced Zapf to the other members of the lab. Zapf and Link, the group’s mathemati-
cian, hit it off well and spent the rest of the afternoon discussing a method for analyzing patterns that
Link had been worrying over the last month.
It was 6:30 when Newbridge finally left the lab that night. He had waited almost eagerly for the end
of the day to come-when they would all be gone and he could sit in the quiet rooms, relax, and think
it over. “Think what over?” he asked himself. He didn’t know. Shortly after 5 p.m., they had almost all
gone except Zapf, and what followed was almost a duel. Newbridge was annoyed that he was being
cheated out of his quiet period and finally, resentfully, determined that Zapf should leave first.
Zapf wa~ sitting at the conference table reading, and Newbridge wa~ sitting at his desk in the little
gla~s-enclosed cubby he used during the day when he needed to not be disturbed. Zapf had gotten the last
year’s progress reports out and wa~ studying them carefully. The time dragged. Newbridge doodled on
a pad, the tension growing inside him. What the hell did Zapf think he was going to find in the report~?
Newbridge fmally gave up and they left the lab together. Zapftook several of the reports with him to study
in the evening. Newbridge a~ked him if he thought the reports gave a clear picture of the lab’s activities.
“They’re excellent,” Zapf answered with obvious sincerity. “They’re not only good reports; what
they report is damn good, too!” Newbridge wa~ surprised at the relief he felt and grew almost jovial as
he said good night.
Driving home, Newbridge felt more optimistic about Zapfs presence in the lab. He had never fully
understood the analysis that Link was attempting. If there was anything wrong with Link’s approach,
Zapf would probably spot it. “And if I’m any judge,” he murmured, “he won’t be especially diplomatic
about it.”
He described Zapf to his wife, who was amused by the broad leather belt and brass buckle.
“It’s the kind of belt that Pilgrims must have worn,” she laughed.
“I’m not worried about how he holds his pants up,” he laughed with her. “I’m afraid that he’s the
kind that just has to make like a genius twice each day. And that can be pretty rough on the group.”

CA-16 Additional Cases
Newbridge had been asleep for several hours when he was jerked awake by the telephone. He real ized
it had rung several times. He swung off the bed, muttering about damn fools and telephones. It was
Zapf. Without any excuses, apparently oblivious of the time, he plunged into an excited recital of how
Link’s patterning problem could be solved.
Newbridge covered the mouthpiece to answer his wife’s stage-whispered “Who is it?”
“It’s the genius,” replied Newbridge.
Zapf, completely ignoring the fact that it wa~ 2 a.m., went on in a very excited way to explain a
completely new approach to certain of the photon lab problems that he had stumbled on while analyz-
ing past experiments. Newbridge managed to put some enthusiasm in his own voice and stood there,
half-dazed and very uncomfortable, listening to Zapf talk endlessly about what he had discovered.
It was probably not only a new approach but also an analysis that showed the inherent weakness of the
previous experiment and how experimentation along that line would certainly have been inconclusive.
The following day, Newbridge spent the entire morning with Zapf and Link, the mathematician, the
customary morning meeting of Brandon’s group having been called off so that Zapf’s work of the
previous night could be gone over intensively. Zapf was very anxious that this be done, and Newbridge
was not too unhappy to call the meeting off for reasons of his own.
For the next several days, Zapf sat in the back office that had been turned over to him and did noth-
ing but read the progress reports of the work that had been done in the last six months. Newbridge
caught himself feeling apprehensive about the reaction that Zapf might have to some of his work.
He was a little surprised at his own feelings. He had always been proud-although he had put on a
convincingly modest face-of the way in which new ground in the study of photon-measuring devices
had been broken in his group. Now he wasn’t sure, and it seemed to him that Zapf might ea~ily show
that the line of research they had been following was unsound or even unimaginative.
The next morning (as was the custom) the members of the lab, including the secretaries, sat around
a conference table. Brandon always prided himself on the fact that the work of the lab was guided
and evaluated by the group as a whole, and he wa~ fond of repeating that it was not a waste of time
to include secretaries in such meetings. Often, what started out as a boring recital of fundamental
assumptions to a naive listener, uncovered new ways of regarding these assumptions that would not
have occurred to the researcher who had long ago accepted them as a necessary ba~is for his work.
These group meetings also served Brandon in another sense. He admitted to himself that he would have
felt far less secure if he had had to direct the work out of his own mind, so to speak. With the group meeting
as the principle of leadership, it wa~ always possible to justify the exploration of blind alleys because of the
general educative effect on the team. Zapf wa~ there; Lucy and Martha were there; Link was sitting next to
Zapf, their conversation concerning Link’s mathematical study apparently continuing from yesterday. The
other members, Bob Davenport, Georgia Thurlow, and Arthur Oliver, were waiting quietly.
Newbridge, for rea~ons that he didn’t quite understand, proposed for discussion this morning a problem
that all of them had spent a great deal of time on previously with the conclusion that a solution was
impossible, that there was no feasible way of treating it in an experimental fashion. When Newbridge
proposed the problem, Davenport remarked that there was hardly any use going over it again, that he
was satisfied that there was no way of approaching the problem with the equipment and the physical
capacities of the lab.
This statement had the effect of a shot of adrenaline on Zapf. He said he would like to know what the
problem was in detail and, walking to the blackboard, began setting down the “factors” a~ various members
of the group began discussing the problem and simultaneously listing the reasons why it had been abandoned.
Very early in the description of the problem it was evident that Zapf was going to disagree about
the impossibility of attacking it. The group real ized this, and finally the descriptive materials and their
recounting of the reasoning that had led to its abandonment dwindled away. Zapf began his statement,
which, as it proceeded, sounded as if it might well have been prepared the previous night, although
Newbridge knew this was impossible. He couldn’t help being impressed with the organized and logical
way that Zapf was presenting ideas that must have occurred to him only a few minutes before.
Zapf had some things to say, however, which left Newbridge with a mixture of annoyance, irrita-
tion, and at the same time, a rather smug feeling of superiority over Zapf in at least one area. Zapf held

Additional Cases CA-17
the opinion that the way that the problem had been analyzed was very typical of group thinking. With
an air of sophistication that made it difficult for a listener to dissent, he proceeded to comment on the
American emphasis on team ideas, satirically describing the ways in which they led to a “high level of
mediocrity.”
During this time, Newbridge observed that Link stared studiously at the floor, and he was very con-
scious of Georgia Thurlow and Bob Davenport’s glances toward him at several points of Zapfs little
speech. Inwardly, Newbridge couldn’t help feeling that this was one point at least in which Zapf was
off on the wrong foot. The whole Jab, following Goh’s lead, talked if not practised the theory of smal l
research teams as the basic organization for effective research. Zapf insisted that the problem could be
approached and that he would like to study it for a while himself.
Newbridge ended the morning session by remarking that the meetings would continue and that the
very fact that a supposedly insoluble experimental problem was now going to get another chance was
an indication of the value of such meetings. Zapf immediately remarked that he was not at all averse to
meetings to inform the group about the progress of its members. The point he wanted to make was that
creative advances were seldom accomplished in such meetings, that they were made by an individual
“Jiving with” a problem closely and continuously, in a rather personal relationship to it.
Newbridge went on to say to Zapf that he wa~ very glad that Zapf had raised these points and
that he was sure the group would profit by re-examining the basis on which they had been operating.
Newbridge agreed that individual effort was probably the basis for making major advances. He con-
sidered the group meetings useful primarily because they kept the group together and they helped the
weaker members of the group keep up with the ones who were able to advance more ea~ily and quickly
in the analysis of problems.
It was clear as days went by and meetings continued that Zapf came to enjoy them because of the
pattern that the meetings a~sumed. It became typical for Zapf to hold forth, and it was unquestionably
clear that he wa~ more brill iant, better prepared on the various subjects that were germane to the problem
being studied, and more capable of going ahead than anyone there. Newbridge grew increasingly dis-
turbed as he realized that his leadership of the group had been, in fact, taken over.
Whenever the subject of Zapf was mentioned in occasional meetings with Goh, Newbridge would
comment only on the ability and obvious capacity for work that Zapf had. Somehow he never felt that
he could mention his own discomforts, not only because they revealed a weakness on his part but also
because it wa~ quite clear that Goh himself was considerably impressed with Zapfs work and with the
contacts he had outside the photon laboratory.
Newbridge now began to feel that perhaps the intellectual advantages that Zapf had brought to the
group did not quite compensate for what he felt were evidences of a breakdown in the cooperative
spirit he had seen in the group before Zapf’s coming. More and more of the morning meetings were
skipped. Zapfs opinion concerning the abi lities of others of the group, except for Link, was obviously
low. At times during morning meetings or in smal ler discussions he had been on the point of rudeness,
refusing to pursue an argument when he claimed it was based on another person’s ignorance of the
facts involved. His impatience with others Jed him to also make similar remarks to Goh. Newbridge
inferred this from a conversation with Goh in which Goh asked whether Davenport and Ol iver were
going to be continued on; and his failure to mention Link, the mathematician, led Newbridge to feel
that this was the result of private conversations between Zapf and Goh.
It wa~ not difficult for Newbridge to make a quite convincing case about whether the brill iance
of Zapf was sufficient recompense for initiating this unravelling of the group. He spoke privately
with Davenport and Ol iver, and it was quite clear that both of them were uncomfortable because of
Zapf. Newbridge didn’t press the discussion beyond the point of hearing them say that they did feel
awkward, and that it was sometimes difficult to understand the arguments Zapf advanced, but often
embarrassing to ask him to fill in the basis for his arguments. Newbridge did not interview Link in
this manner.
About six months after Zapf’s arrival in the photon lab, a meeting was scheduled in which the
sponsors of the research would get some idea of the work and its progress. It was customary at these
meetings for project heads to present the research being conducted in their groups. The members of

CA-18 Additional Cases
each group were invited to other meetings that were held later in the day and open to all, but the special
meetings were usual ly made up only of project heads, the head of the laboratory, and the sponsors.
As the time for the special meeting approached, it seemed to Newbridge that he must avoid the
presentation at all costs. He could not trust himself to present the ideas and work that Zapf had
advanced because of his apprehension about whether he could present them in sufficient detail and
answer such questions about them as might be asked. On the other hand, he did not feel he could ignore
these newer lines of work and present only the material that he had done or that had been started before
Zapfs arrival . He felt also that it would not be beyond Zapf at all, in his blunt and undiplomatic way-
if he were at the meeting, that is-to comment on Newbridge’s presentation and reveal his inadequacy.
It also seemed quite clear that it would not be easy to keep Zapf from attending the meeting, even
though he was not on the administrative level of those invited.
Newbridge found an opportunity to speak to Goh and raised the question. He told Goh that, with the
meetings coming up and with the interest in the work and Zapfs contributions to it, Zapf would probably
like to come to the meetings; but there was a question of how the others in the group would feel if only
Zapf were invited. Goh passed this over very lightly by saying that he didn’t think the group would
fail to understand Zapf’s rather different position and that Zapf certainly should be invited. Newbridge
immediately agreed: Zapf should present the work because much of it was work he had done, and this
would be a nice way to recognize Zapfs contributions and to reward him, because he was eager to be
recognized as a productive member of the lab. Goh agreed, and so the matter was dec ided.
Zapfs presentation was very successful and in some ways dominated the meeting. He attracted the
interest and attention of many of those who had come, and a long discussion followed his presentation.
Later in the evening-with the entire laboratory staff present-in the cocktai l period before the din-
ner, a little circle of people formed about Zapf. One of them was Goh himself, and a lively discussion
took place concerning the application of Zapf s theory. All of this disturbed Newbridge, and his reac-
tion and behaviour were characteristic. He joined the circle, praised Zapf to Goh and to others, and
remarked on the brilliance of the work.
Without consulting anyone, Newbridge began to consider what job opportunities existed elsewhere.
After a few weeks he decided to apply for a position at a new laboratory of considerable size that was
being organized in a nearby city. Citing Newbridge’s training and experience, the new lab invited him
for a lengthy interview and, soon after, offered him a project-leader job similar to his current position
and with s lightly higher salary.
Newbridge immediately accepted the offer and notified Goh by letter, which he mai led on a Friday
night to Goh’s home. The letter was quite brief, and Goh was stunned. The letter merely said that he
had found a better position; that he didn’t want to appear at the lab anymore for personal reasons; that
he would be glad to come back at a later time to assist if there was any mix up in the past work; that
he felt sure Zapf could supply any leadership that the group required; and that his decision to leave so
suddenly was ba~ed on personal problems-he hinted at problems of health in his family, specifical ly
his mother and father. All of this was fictitious, of course. Goh took it at face value but still felt that
this wa~ very strange behaviour and quite unaccountable, for he had always felt his relationship with
Newbridge had been warm and that Newbridge was satisfied and, in fact, quite happy and productive.
Goh was considerably disturbed, because he had already decided to place Zapf in charge of
another project that was going to be set up very soon. He had been wondering how to explain this
to Newbridge, in view of the obvious help Newbridge was getting from Zapf and the high regard in
which he held him. Goh had, indeed, considered the possibi lity that Newbridge could add to his staff
another person with the kind of background and training that had been unique in Zapf and had proved
so valuable.
Goh did not make any attempt to meet Newbridge. In a way, he felt aggrieved about the whole thing.
Zapf, too, was surprised at the suddenness of Newbridge’s departure. When Goh asked Zapf whether
he preferred to stay with the photon group instead of the new project for the Air Force, he chose the Air
Force project and went on to that job the following week. The photon lab was hard hit. The leadership
of the lab was given to Link with the understanding that this would be temporary until someone could
come in to take over.

Additional Cases CA-19
Case 9 TAMARACK INDUSTRIES
by David J. Cherrington, Brigham Young University
Tamarack Industries manufactures motorboats primarily used for water ski ing. Students are hired during
summer months to fi ll in for permanent employees on vacation. In past years, students worked along-
side permanent employees, but a few staff complained that the students were inexperienced, slow, and
arrogant. In general, permanent staff disliked the students’ behaviour, such a~ listening to music with
earphones while working. This summer, the company reorganized all permanent employees into three
production teams (they usually have four teams, but 25 percent are on hol iday at any given time) and
assigned the I 6 summer students to their own team on the fourth production line.
The supervisor, Dan Jensen, decided to try a different strategy this summer and have all the college
students work on the new line. He a~ked Mark Allen to supervise the new crew because Mark claimed that
he knew everything about boat~ and could perform every job “with my eyes closed.” Mark wa~ happy to
accept the new job and participated in selecting the student hires. Mark’s crew was called “the Geek Team”
because all the college student~ were savvy with computers, unlike most of the permanent employees.
Mark spent many hours training his student team to get the line running at full production. The college
students learned quickly, and by the end of June their production rate wa~ up to standard, with an error rate
that wa~ only slightly above normal. To simplify the learning process, Dan Jensen assigned the Geek Team
long production runs that generally consisted of thirty to forty identical units. Thus the training period wa~
shortened and errors were reduced. Shorter production runs were assigned to the experienced teams.
By the middle of July, a substantial rivalry had been created between the Geek Team and the older
workers. At first, the r ivalry was good-natured. But after a few weeks, the older workers became resentful
of the remarks made by the college students. The Geek Team often met its production schedules with
time to spare at the end of the day for goofing around. It wa~n’t uncommon for someone from the Geek
Team to go to another line pretending to look for materials just to make demeaning comments. The
experienced workers resented having to perform al l the shorter production runs and began to retaliate
with sabotage. They would sneak over during breaks and hide tools, dent materials, instal l something
crooked, and in other smal l ways do something that would slow production for the Geek Team.
Dan felt good about his decision to form a separate crew of college student~. but when he heard reports
of sabotage and rivalry, he became very concerned. Because of complaints from the experienced workers,
Dan equalized the production so that all of the crews had similar production runs. The rivalry, however, did
not stop. The Geek Team continued to finish early and flaunt their performance in front of the other crews.
One day the Geek Team suspected that one of their assemblies was going to be sabotaged during the
lunch break by one of the experienced crews. By skilful deception, they were able to substitute an a~sem­
bly from the other experienced line for theirs. By the end of the lunch period, the Geek Team was laughing
wildly because of their deception, while one experienced crew was very angry with the other one.
Dan Jensen decided that the situation had to be changed and announced that the job assignments
between the different crews would be shuffled. The employees were told that when they appeared for
work the next morning, the names of the workers assigned to each crew would be posted on the bul-
letin board. The announcement was not greeted with much enthusiasm, and Mark Allen decided to
talk Dan out of his idea. Mark suspected that many of the college students would qu it if their team was
broken up.
Case 10 THE OUTSTANDING FACULTY AWARD
by David J. Cherrington, Brigham Young University; revised by Steven L.
McShane, Curtin University (Australia) and University of Victoria (Canada)
I recently served on the Outstanding Faculty Award committee for the College of Business. This award is
our college’s highest honour for a faculty member, and is bestowed at a special reception ceremony. At the
first meeting, our committee discussed the nomination process and decided to follow our traditional prac-
tice of inviting nominations from both the faculty and students. During the next month, we received six

CA-20 Additional Cases
completed files with supporting documentation. Three of the nominations came from department chairs,
two from faculty who recommended their colleagues, and one from a group of 16 graduate students.
At the second meeting, we agreed that we didn’ t know the six applicants well enough to make a
decision that day, so we decided that we would read the appl ications on our own and rank them. There
was no discussion about ranking criteria; I think we assumed that we shared a common definition of
the word “outstanding.”
During the third meeting, it quickly became apparent that each committee member had a different inter-
pretation of what constitutes an “outstanding” faculty member. The discussion was polite, but we debated
the extent to which this was an award for teaching, or research, or service to the college, or scholarly
textbook writing, or consulting, or service to society, or some other factor. After three hours, we agreed
on five criteria that we would apply to independently rate each candidate using a five-point scale.
When we reconvened the next day, our discussion was much more focused as we tried to achieve a
consensus regarding how we judged each candidate on each criterion. After a lengthy discussion, we
final ly completed the task and averaged the ratings. The top three scores had an average rating (out of a
maximum of 25) of 21, 19.5, and 18.75. I assumed the person with the highest total would receive the
award. Instead, my colleagues began debating over the relevance of the five criteria that we had agreed
on the previous day. Some committee members felt, in hindsight, that the criteria were incorrectly
weighted or that other criteria should be considered.
Although they did not actually say this, I sensed that at least two colleagues on the committee
wanted the criteria or weights changed because their preferred candidate didn’t get the highest score
using the existing formula. When we changed the weights in various ways, a different candidate among
the top three received the top score. The remaining three candidates received lower rati ngs every time.
Dr. H always received the lowest score, usual ly around 12 on the 25-point range.
After almost two hours of discussion, the a~sociate dean turned to one committee member and said,
“Dolan, I sure would like to see Dr. H in your department receive this honour. He retires next year and
this would be a great honour for him and no one has received this honour in your department recently.”
Dolan agreed, “Yes, this is Dr. H’s last year with us and it would be a great way for him to go out.
I’m sure he would feel very honoured by this award.”
I sat there, stunned at the suggestion, while Dolan retold how Dr. H had been active in public service,
his only real strength on our criteria. I was even more stunned when another committee member, who
I think was keen to finish the meeting, said, “Well, I so move” and Dolan seconded it.
The a~sociate dean, who was conducting the meeting, said, “Well, if the rest of you think this is a good
idea, all in favour say aye.” A few members said “Aye,” and, without call ing for nays, the associate dean
quickly proceeded to explain what we needed to do to advertise the winner and arrange the ceremony.
During my conversations with other committee members over the next two weeks, I learned that
everyone-including the two who said “Aye”-were a~ shocked as I was at our committee’s decision.
I thought we had made a terrible decision, and I wa~ embarrassed to be a member of the committee.
A few weeks later, we were appropriately punished when Dr. H gave a 45-minute acceptance speech
that started poorly and got worse.
Case 11 VETEMENTS LTEE
by Steven L. McShane, Curtin University (Australia) and University of V ictoria
(Canada)
Yetements Ltee is a chain of men’s retail clothing stores located throughout the province of Quebec.
Two years ago, the company introduced new incentive systems for both store managers and sales
employees. Store managers receive a salary with annual merit increases based on store sales above
targeted goals, store appearance, store inventory management, customer complaints, and several other
performance mea~ures. Some of this information (e.g., store appearance) is gathered during visits by
senior management, whereas other information is based on company records (e.g., sales volume).

Additional Cases CA-21
Sales employees are paid a fixed salary plus a commission based on the percentage of sales credited to
that employee over the pay period. The commission represents about 30 percent of a typical paycheque
and is intended to encourage employees to actively serve customers and to increase sales volume.
Returned merchandise is deducted from commissions, so sales employees are discouraged from selling
products that customers do not really want.
Soon after the new incentive systems were introduced, senior management began to receive com-
plaint~ from store managers regarding the performance of their sales staff. They observed that sales
employees tended to stand near the store entrance waiting to “tag” customers a~ their own. Occasionally,
sales staff would argue over “ownership” of the customer. Managers were concerned that this aggressive
behavior intimidated some customers. It also tended to leave some parts of the store unattended by staff.
Many managers were also concerned about inventory duties. Previously, sales staff would share
responsibility for restocking inventory and completing inventory reorder forms. Under the new com-
pensation system, however, few employees were wi lling to do these essential ta~ks. On several occa-
sions, stores have faced stock shortages because merchandise was not stocked or reorder forms were
not completed in a timely manner. Potential sales have suffered from empty shelves when plenty of
merchandise was avai lable in the back storeroom or at the warehouse. The company’s new automatic
inventory system could reduce some of these problems, but employees must still stock shelves and
assist in other a~pects of inventory management.
Store managers have tried to correct the inventory problem by assigning employees to inventory
duty, but this has created resentment among the employees selected. Other managers have threatened
sales staff with dismissals if they do not do their share of inventory management. This strategy has
been somewhat effective when the manager is in the store, but staff members sneak back onto the floor
when the manager is away. It ha~ also hurt staff morale, particularly relations with the store manager.
To reduce the tendency of sales staff to hoard customers at the store entrance, some managers
have assigned employees to specific areas of the store. This has also created some resentment among
employees stationed in areas with less traffic or lower-priced merchandise. Some staff have openly
complained of lower paycheques because they have been placed in a slow area of the store or have been
given more than their share of inventory duties.
© I 995 Steven L McShane.

APPENDIX
Theory Building and Systematic
Research Methods
A-1
Theory Building
People need to make sense of their world, so they form theories about the way the world operates.
A theory is a general set of propositions that describes interrelationships among several concepts. We
form theories for the purpose of predicting and explaining the world around us.1 What does a good
theory look like? First, it should be stated as clearly and simply as possible so that the concepts can be
measured and there is no ambiguity regarding the theory ‘s propositions. Second, the elements of the
theory must be logically consistent with each other, because we cannot test anything that doesn’t make
sense. Third, a good theory provides value to society; it helps people understand their world better than
they would without the theory2
Theory bui lding is a continuous process that typically includes the inductive and deductive stages
shown in Exhibit A. l .3 The inductive stage draws on personal experience to form a preliminary theory,
whereas the deductive stage uses the scientific method to test the theory.
The inductive stage of theory building involves observing the world around us, identifying a pattern
of relationships, and then forming a theory from these personal observations. For example, you might
casual ly notice that new employees want their supervisor to give direction, whereas this leadership
style irritates long-service employees. From these observations, you form a theory about the effective-
ness of directive leadership. (See Chapter 12 for a discussion of this leadership style.)
Positivism versus lnterpretivism
Research requires an interpretation of reality, and researchers tend to perceive reality in one of two
ways. A common view, called positivism, is that reality exists independent of the perceptions and
interpretations of people. It is “out there” to be discovered and tested. Positivism is the foundation for
most quantitative research (statistical analysis). It assumes that we can measure variables and those
variables have fixed relationships with other variables. For example, the positivist perspective says that
we could study whether a supportive style of leadership reduces stress. If we find evidence that it does,
then someone else studying leadership and stress would “discover” the same relationship.
EXHIBIT A.1 Theory Building and Theory Testing
lnducUve
O.ductlve

Append ix Theory Building and Systematic Research Methods A-2
lnter pretivism takes a different view of real ity. It suggests that real ity comes from shared meaning
among people in a particular environment. For example, supportive leadership is a personal interpreta-
tion of reality, not something that can be measured across time and people. Interpretivists rely mainly
on qualitative data, such as observation and nondirective interviews. They particularly listen to the
language people use to understand the common meaning that people have toward various events or
phenomena. For example, they might argue that you need to experience and observe supportive leader-
ship to effectively study it. Moreover, you can’ t really predict relationships because the specific sinia-
tion shapes reality.4
Most OB scholars identify themselves somewhere between the extreme views of positivism and
interpretivism. Many bel ieve that inductive research should begin with an interpretivist angle. We
should consider a new topic with an open mind and search for shared meaning among people in the
situation being studied. In other words, researchers should Jet the participants define reality rather than
Jet the researcher’s preconceived notions shape that reality. This process involves gathering qual itative
information and Jetting this information shape their theory.5 After the theory emerges, researchers shift
to the positivist perspective by quantitatively testing relationships in that theory.
Theory Testing: The Deductive Process
Once a theory has been formed, we shift into the deductive stage of theory building. This process
includes forming hypotheses, defining and measuring constructs, and testing hypotheses (see Exhibit
A. I). Hypotheses make empirically testable declarations that certain variables and their correspond-
ing measures are related in a specific way proposed by the theory. For instance, to find support for the
directive leadership theory described earlier, we need to form and then test a specific hypothesis from
that theory. One such hypothesis might be, “New employees are more satisfied with supervisors who
exhibit a directive rather than nondirective leadership style.” Hypotheses are indispensable tools of
scientific research, because they provide the vital link between the theory and empirical verification.
DEFINING AND MEASURING CONSTRUCTS
Hypotheses are testable only if we can define and then form measurable indicators of the concepts
stated in those hypotheses. Consider the hypothesis in the previous paragraph about new employees and
directive leadership. To test this hypothesis, we first need to define the concepts, such as “new employ-
ees,” “directive leadership,” and “supervisor.” These are known as constr ucts, because they are abstract
ideas constructed by researchers that can be linked to observable information. Organizational behaviour
researchers developed the construct called directive leadership to help them understand the different
effects that leaders have on followers. We can’t directly see, taste, or smell directive leadership; instead,
we rely on indirect indicators of its existence, such as observing someone giving directions, maintain-
ing clear performance standards, and ensuring that procedures and practices are followed.
As you can see, defining constructs well is very important because these definitions become the
foundation for finding or developing acceptable measures of those constructs. We can’t measure direc-
tive leadership if we have only a vague idea about what this concept means. The better the construct
is defined, the better our chances of finding or developing a good measure of that construct. However,
even with a good definition, constructs can be difficult to measure, because the empirical representa-
tion must capture several elements in the definition. A mea~ure of directive leadership must be able to
identify not only people who give directions, but also those who maintain performance standards and
ensure that procedures are followed.
TESTING HYPOTHESES
The third step in the deductive process is to collect data for the empirical mea~ures of the variables. Fol-
lowing our directive leadership example, we might conduct a formal survey in which new employees
indicate the behaviour of their supervisors and their attitudes toward their supervisors. Alternatively,
we might design an experiment in which people work with someone who applies e ither a directive or

A-3 Appendix Theory Building and Systematic Research Methods
a nondirective leadership style. When the data have been collected, we can use various procedures to
statistical ly test our hypotheses.
A major concern in theory building is that some researchers might inadvertently find support for their
theory simply because they use the same information used to form the theory during the inductive stage.
Consequently, the deductive stage must collect new data that are completely independent of the data used
during the inductive stage. For instance, you might decide to test your theory of directive leadership by
studying employees in another organization. Moreover, the inductive process may have relied mainly on
personal observation, wherea~ the deductive process might use survey questionnaires. By studying different
samples and using different mea~urement tools, we minimize the risk of conducting circular research.
Using the Scientific Method
Earlier, we said that the deductive stage of theory building follows the scientific method. The scientific
method is a systematic, controlled, empirical, and critical investigation of hypothetical propositions
about the presumed relationships among natural phenomena.6 There are several elements to this defini-
tion, so let’s look at each one. First, scientific research is systematic and controlled, because research-
ers want to rule out all but one explanation for a set of interrelated events. To rule out alternative
explanations, we need to control them in some way, such a~ by keeping them constant or removing
them entirely from the environment.
Second, we say that scientific research is empirical because researchers need to use objective real-
ity–or as close as we can get to it-to test a theory. They measure observable elements of the environ-
ment, such as what a person says or does, rather than relying on their own subjective opinion to draw
conclusions. Moreover, scientific research analyzes these data using acceptable principles of math-
ematics and logic.
Third, scientific research involves critical investigation. This means that the study’s hypotheses,
data, methods, and results are openly described so that other experts in the field can properly evaluate
the research. It also means that scholars are encouraged to critique and bui ld on previous research. The
scientific method encourages the refinement and eventual ly the replacement of a particular theory with
one that better suits our understanding of the world.
Grounded Theory: An Alternative Approach
The scientific method dominates the quantitative approach to systematic research, but another approach,
called gr ounded theory, dominates research using qualitative methods.7 Grounded theory is a process
of developing knowledge through the constant interplay of data collection, analysis, and theory devel-
opment. It relies mainly on qualitative methods to form categories and variables, analyze relationships
among these concepts, and form a model ba~ed on the observations and analysis. Grounded theory
combines the inductive stages of theory development by cycling back and forth between data collec-
tion and analysis to converge on a robust explanatory model. This ongoing rec iprocal process results in
theory that is grounded in the data (thus, the name grounded theory).
Like the scientific method, grounded theory is a systematic and rigorous process of data collection
and analysis. It requires specific steps and documentation, and adopts a positivist view by assuming
that the results are general izable to other settings. However, grounded theory also takes an interpretivist
view by building categories and variables from the perceived realities of the subjects rather than from
an assumed universal truth.8 It also recognizes that personal biases are not easily removed from the
research process.
Selected Issues in Organizational Behaviour Research
There are many issues to consider in theory building, particularly when we use the deductive process
to test hypotheses. Some of the more important issues are sampling, causation, and ethical practices in
organizational research.

Appendix Theory Building and Systematic Research Methods A-4
SAMPLING IN ORGANIZATIONAL RESEARCH
When finding out why things happen in organizations, we typically gather information from a few
sources and then draw conclusions about the larger population. If we survey several employees and
determine that older employees are more loyal to their company, then we would like to generalize this
statement to all older employees in our population, not just those whom we surveyed. Scientific inquiry
generally requires that researchers engage in representative sampling-that is, sampling a population
in such a way that we can extrapolate the result~ of the sample to the larger population.
One factor that influences representativeness is whether the sample is selected in an unbiased way
from the larger population. Let’s suppose that you want to study organizational commitment among
employees in your organization. A casual procedure might result in sampling too few employees from
the head office and too many located elsewhere in the country. If head office employees actually have
higher loyalty than employees located elsewhere, the biased sampling would cause the results to under-
estimate the true level of loyalty among employees in the company. If you repeat the process again
next year but somehow overweight employees from the head office, the results might wrongly suggest
that employees have increased their organizational commitment over the past year. In real ity, the only
change may be the direction of sampling bias.
How do we minimize sampling bias? The answer is to randomly select the sample. A randomly
drawn sample gives each member of the population an equal probability of being chosen, so there is
less likelihood that a subgroup within that population wi ll dominate the study’s results.
The same principle appl ies to random assignment of subjects to groups in experimental designs. If
we want to test the effects of a team development training program, we need to randomly place some
employees in the training group and randomly place others in a group that does not receive training.
Without this random selection, each group might have different types of employees, so we wouldn’t
know whether the training explains the differences between the two groups. Moreover, if employees
respond differently to the training program, we couldn’t be sure that the training program results are
representative of the larger population. Of course, random sampling does not necessarily produce a per-
fectly representative sample, but we do know that it is the best approach to ensure unbiased selection.
The other factor that influences representativeness is sample size. Whenever we select a portion of the
population, there will be some error in our estimate of the population values. The larger the sample, the
less error will occur in our estimate. Let’s suppose that you want to find out how employees in a 500-per-
son firm feel about viewing social media (e.g., Facebook) at work. If you asked 400 of those employees,
the information would provide a very good estimate of how the entire workforce in that organization
feels. If you survey only I 00 employees, the estimate might deviate more from the true population. If you
ask only 10 people, the estimate could be quite different from what al l 500 employees feel.
Notice that sample size goes hand in hand with random selection. You must have a sufficiently large
sample size for the principle of randomization to work effectively. In our example of attitudes toward
social media, we would do a poor job of random selection if our sample consisted of only I 0 employees
from the 500-person organization. The reason is that these I 0 people probably wouldn’t capture the
diversity of employees throughout the organization. In fact, the more diverse the population, the larger
the sample size should be, to provide adequate representation through random selection.
CAUSATION IN ORGANIZATIONAL RESEARCH
Theories present notions about relationships among constructs. Often, these propositions suggest
a causal relationship, namely, that one variable has an effect on another variable. When discussing
causation, we refer to variables as being independent or dependent. Independent variables are the
presumed causes of dependent variables, which are the presumed effects. In our earlier example of
directive leadership, the main independent variable (there might be others) would be the supervisor’s
directive or nondirective leadership style, because we presume that it causes the dependent variable
(satisfaction with supervision).
In laboratory experiments (described later), the independent variable is always manipulated by the
experimenter. In our research on directive leadership, we might have subjects (new employees) work

A-5 Appendix Theory Building and Systematic Research Methods
with supervisors who exhibit directive or nondirective leadership behaviours. If subjects are more sat-
isfied under the directive leaders, we would be able to infer an association between the independent
and dependent variables.
Researchers must satisfy three conditions to provide sufficient evidence of causal ity between two
variables.9 The first condition of causal ity is that the variables are empirically a~sociated with each
other. An association exists whenever one measure of a variable changes systematically with a measure
of another variable. This condition of causality is the easiest to satisfy, because there are several well-
known statistical measures of association. A research study might find, for instance, that heterogeneous
groups (in which members come from diverse backgrounds) produce more creative solutions to prob-
lems. This might be apparent because the measure of creativity (such as number of creative solutions
produced within a fixed time) is higher for teams that have a high score on the mea~ure of group het-
erogeneity. They are statistically associated or correlated with each other.
The second condition of causal ity is that the independent variable precedes the dependent variable in
time. Sometimes, this condition is satisfied through simple logic. In our group heterogeneity example,
it doesn’t make sense to say that the number of creative solutions caused the group’s heterogeneity,
because the group’s heterogeneity existed before the group produced the creative solutions. In other
situations, however, the temporal relationship among variables is less clear. One example is the ongo-
ing debate about job satisfaction and organizational commitment. Do companies develop more loyal
employees by increasing their job satisfaction, or do changes in organizational loyalty cause changes in
job satisfaction? Simple logic does not answer these questions; instead, researchers must use sophisti-
cated longitudinal sn1dies to build up evidence of a temporal relationship between these two variables.
The third requirement for evidence of a causal relationship is that the statistical assoc iation between
two variables cannot be explained by a third variable. There are many associations that we quickly
dismiss as being causally related. For example, there is a statistical association between the number of
storks in an area and the birth rate in that area. We know that storks don’t bring babies, so something
else must cause the association between these two variables. The real explanation is that both storks
and birth rates have a higher incidence in rural areas.
In other studies, the third variable effect is less apparent. Many years ago, before pol io vaccines
were available, a study in the United States reported a surprisingly strong association between con-
sumption of a certain soft drink and the incidence of polio. Was polio caused by drinking this pop, or
did people with polio have an unusual craving for this beverage? Neither. Both polio and consumption
of the pop drink were caused by a third variable: climate. There was a higher incidence of polio in the
summer months and in warmer cl imates, and people drink more liquids in these climates. 10 As you can
see from this example, researchers have a difficult time supporting causal inferences, because third
variable effects are sometimes difficult to detect.
ETHICS IN ORGANIZATIONAL RESEARCH
Organizational behaviour researchers need to abide by the ethical standards of the society in which the
research is conducted. One of the most important ethical considerations is the individual subject’s freedom
to participate in the study. For example, it is inappropriate to force employees to fill out a questionnaire
or attend an experimental intervention for research purposes only. Moreover, researchers have an obli-
gation to tell potential subjects about any possible risks inherent in the study so that partic ipants can
make an informed choice about whether to be involved.
Finally, researchers must be careful to protect the privacy of those who participate in the sn1dy. This
usually includes letting people know when they are being studied as well a~ guaranteeing that their
individual information will remain confidential (unless publication of identities is otherwise granted).
Researchers maintain anonymity through careful security of data. The research results usually aggre-
gate data in numbers large enough that they do not reveal the opinions or characteristics of any specific
individual. For example, we would report the average absenteeism of employees in a department rather
than state the absence rates of each person. When researchers are sharing data with other researchers, it
is usually necessary to specially code each case so that individual identities are not known.

Appendix Theory Building and Systematic Research Methods A-6
Research Design Strategies
So far, we have described how to build a theory, including the specific elements of empirically testing
the theory within the standards of scientific inquiry. But what are the different ways to design a research
study so that we get the data necessary to achieve our research objectives? There are many strategies,
but they mainly fall under three headings: laboratory experiments, field surveys, and observational
research.
LABORATORY EXPERIMENTS
A laboratory experiment is any research study in which independent variables and variables outside
the researcher’s main focus of inquiry can be controlled to some extent. Laboratory experiments are
usually located outside the everyday work environment, such as in a classroom, simulation lab, or any
other artificial setting in which the researcher can manipulate the environment. Organizational behaviour
researchers sometimes conduct experiments in the workplace (called field experiments) in which the
independent variable is manipulated. However, researchers have less control over the effect~ of extra-
neous factors in field experiments than they have in laboratory situations.
Advantages of Laboratory Experiments There are many advantages of laboratory experi-
ments. By definition, this research method offers a high degree of control over extraneous variables
that would otherwise confound the relationships being studied. Suppose we wanted to test the effects
of directive leadership on the satisfaction of new employees. One concern might be that employees are
influenced by how much leadership is provided, not just the type of leadership style. An experimental
design would allow us to control how often the supervisor exhibited this style so that this extraneous
variable does not confound the results.
A second advantage of lab studies is that the independent and dependent variables can be developed
more precisely than is possible in a field setting. For example, the researcher can ensure that supervisors
in a lab study apply specific directive or nondirective behaviours, whereas real-life supervisors would
use a more complex mixture of leadership behaviours. By using more precise measures, we are more
certain that we are measuring the intended construct. Thus, if new employees are more satisfied with
supervisors in the directive leadership condition, we are more confident that the independent variable
was directive leadership rather than some other leadership style.
A third benefit of laboratory experiments is that the independent variable can be distributed more
evenly among participants. In our directive leadership study, we can ensure that approximately half of
the subjects have a directive supervisor, whereas the other half have a nondirective supervisor. In natural
settings, we might have trouble finding people who have worked with a nondirective leader and, conse-
quently, we couldn’t determine the effects of this condition.
Disadvantages of Laboratory Experiments With these powerful advantages, you might
wonder why laboratory experiments are the least appreciated form of organizational behaviour
research.11 One obvious limitation of this research method is that it lacks realism, and thus the results
might be different in the real world. One argument is that laboratory experiment subjects are less
involved than their counterparts in an actual work situation. This is sometimes true, although many
lab studies have highly motivated participants. Another criticism is that the extraneous variables con-
trolled in the lab setting might produce a different effect of the independent variable on the dependent
variables. This might also be true, but remember that the experimental design controls variables in
accordance with the theory and its hypotheses. Consequently, this concern is really a critique of the
theory, not the lab sn1dy.
Finally, there is the well-known problem that participants are aware they are being studied and this
causes them to act differently than they normally would. Some participants try to figure out how the
researcher wants them to behave and then deliberately try to act that way. Other participants try to upset
the experiment by doing just the opposite of what they believe the researcher expects. Still others might

A-7 Appendix Theory Building and Systematic Research Methods
act unnaturally simply because they know they are being observed. Fortunately, experimenters are well
aware of these potential problems and are usually (although not always) successful at disguising the
study’s true intent.
FIELD SURVEYS
Field surveys collect and analyze information in a natural environment-an off ice, a factory, or some
other existing location. The researcher takes a snapshot of reality and tries to determine whether ele-
ments of that situation (including the attitudes and behaviours of people in that situation) are associ-
ated with each other as hypothesized. Everyone does some sort of field research. You might think that
people from some provinces are better drivers than others, so you “test” your theory by looking at the
way people with out-of-province licence plates drive. Although your methods of data collection might
not satisfy scientific standards, this is a form of field research because it takes information from a natu-
rally occurring situation.
Advantages and Disadvantages of Field Surveys One advantage of field surveys is that
the variables often have a more powerful effect than they would in a laboratory experiment. Consider
the effect of peer pressure on the behaviour of members within the team. In a natural environment,
team members would form very strong cohesive bonds over time, wherea~ a researcher would have dif-
ficulty repl icating this level of cohesiveness and corresponding peer pressure in a lab setting.
Another advantage of field surveys is that the researcher can study many variables simultaneously,
thereby permitting a fuller test of more complex theories. Ironically, this is also a disadvantage of field
surveys because it is difficult for the researcher to contain his or her scientific inquiry. There is a ten-
dency to shift from deductive hypothesis testing to more inductive exploratory browsing through the
data. If these two activities become mixed together, the researcher can lose sight of the strict covenants
of scientific inquiry.
The main weakness with field surveys is that it is very difficult to satisfy the conditions for causal
conclusions. One reason is that the data are usually collected at one point in time, so the researcher
must rely on logic to decide whether the independent variable really preceded the dependent variable.
Contrast this with the Jab study in which the researcher can usually be confident that the independent
variable was applied before the dependent variable occurred. Increasingly, organizational behaviour
studies use longitudinal research to provide a better indicator of temporal relations among variables,
but this is still not as precise as the Jab setting. Another reason why causal analysis is difficult in field
surveys is that extraneous variables are not controlled as they are in lab studies. Without this control,
there is a higher chance that a third variable might explain the relationship between the hypothesized
independent and dependent variables.
OBSERVATIONAL RESEARCH
In their study of brainstorming and creativity, Robert Sutton and Andrew Hargadon observed 24 brain-
storming sessions at IDEO, a product design firm in Palo Alto, Cal ifornia. They also attended a dozen
“Monday morning meetings,” conducted 60 semi-structured interviews with IDEO executives and
designers, held hundreds of informal discussions with these people, and read through several dozen
magazine articles about the company. 12
Sutton and Hargadon’s use of observational research and other qual itative methods wa~ quite appro-
priate for their research objective, which was to re-examine the effectiveness of brainstorming beyond
the number of ideas generated. Observational research generates a wealth of descriptive accounts about
the drama of human existence in organizations. It is a useful vehicle for learning about the complex
dynamics of people and their activities, such as brainstorming. (Sutton and Hargadon’s study is cited
in Chapter 8 on team dynamics.)
Participant observation takes the observation method one step further by having the observer take
part in the organization’s activities. This experience gives the researcher a fuller understanding of the
activities compared to just watching others participate in those activities.

Appendix Theory Building and Systematic Research Methods A-8
In spite of its intuitive appeal, observational research has a number of weaknesses. The main problem
is that the observer is subject to the perceptual screening and organizing biases that we discuss in
Chapter 3 of this textbook. There is a tendency to overlook the routine aspects of organizational life,
even though they may prove to be the most important data for research purposes. Instead, observers
tend to focus on unusual information, such as activities that deviate from what the observer expects.
Because observational research usually records only what the observer notices, valuable information
is often lost.
Another concern with the observation method is that the researcher’s presence and involvement may
influence the people whom he or she is studying. This can be a problem in short-term observations,
but in the long term people tend to return to their usual behaviour patterns. With ongoing observations,
such as Sutton and Hargadon’s study of brainstorming sessions at IDEO, employees eventually forget
that they are being studied.
Finally, observation is usually a qual itative process, so it is more difficult to empirically test hypoth-
eses with the data. Instead, observational research provides r ich information for the inductive stages of
theory building. It helps us to form ideas about the way things work in organizations. We begin to see
relationships that lay the foundation for new perspectives and theory. We must not confuse this inductive
process of theory building with the deductive process of theory testing.

Glossary
ability The natural aptitudes and learned capa·
bilities required to succe.’isful1y complete a task.
achievement-nurturing orientation A
cross-cu1tur.tl value describing the degree to
which people in a culture empha..’iize competitive
versus cooperative relations with other people.
action research A problem-focused change
prooess that combines action orientation (changing
attitude.’i and behaviour) and research orientation
(testing theory through data collection and analysis).
adaptive culture An organizational culture in
which employees are receptive to change, includ·
ing the ongoing alignment o f the organization to
its environment and continuous improvement of
internal processes.
affective organizational commitment An
individual•s emotional auachment to. involve·
ment in. and identification with an organization.
agreeableness A personality dimension
describing people who are trusting, helpful. good·
natured. considerate, tolerant. selfle.’is, generous.
and nexible.
anchoring and adjustment heuristic A
natural tendency for people to be innuenced by
an initial anchor point such that they do not suf·
ficiently move away from that point a.’i new in for·
mation is provided.
appreciative inquiry An organizational
change strategy that directs the group’s attention
av.oay from it’i own problems and focuses par·
ticipanL~ on the group’s potential and positive
e lement’i.
artifacts The observable symbols and signs of
an organization’s culture.
attitudes The cluster of beliefs. a.•se.ssed feel·
ings. and behavioural intentions toward~ a per·
son, object, or event (called an a(fifltde objecl).
attraction-selection-attrition (ASA) theory
A theory which states that organizations have a
natural tendency to auract. select. and retain peo·
pie with values and personality characte ristics
that are consistent with the organization’s char·
acter, resulting in a more homogeneous organi·
zation and a stronger culture.
attribution process The perceptual process of
deciding whether an observed behaviour or event
is caused largely by internal or external factors.
authentic leadership The view that effec·
tive leaders need to be aware of. feel comfortable
with. and act consistently with their values. per·
sonality, and self-concept
availability heuristic A natural tendency to
assign higher probabilities to object’i or events
that are easier to recall from memory. even though
ease of recaJJ is also affected by ncnprobability
factors (e.g .• emotional response. recent event’i).
best alternative to a negotiated agreement
(BATNA) The best outcome you might achieve
Gl -1
through some other course o f action if you aban·
don the current negotiation.
bicuttura l audit A process of diagnosing
cultur.tl relations between companies and deter·
mining the extent to which cuhur.tl cla’ihe.’i will
likely occur.
bounded rationality The view that people are
OOunded in their decision-making capabilities.
including acress to limited infom1ation. limited
infom1ation proce.’iSing, and tendency towards sati.Y
ficing rather than maximizing when making choices.
brainstorming A freewheeling. face-to-face
meeting where team members aren’t allowed to
criticize but are encour.tged to speak freely. gen·
er.tte as many ideas a’i possible, and build on the
ideas of others.
brainwriting A V’.triation of brainstorming
whereby participants write (rather than speak
about) and share their ideas.
Brooks’s law lbe principle that adding more
people to a late software project only makes it later.
categorical thinking Organizing people and
object’i into preconceived categories that are
stored in our long-te rm memory.
centra lity A contingency o f power pertain·
ing to the degree and nature o f interdependence
between the power holder and others.
centralization The degree to which formal
decision-making authority is held by a small
group of people, typically those a t the top of the
organizational hierarchy.
ceremonies Planned displays of organiza·
tional culture. conducted speci fically for the ben·
efit o f an audience.
charisma A personal characteristic or special
“gift .. that serve.’i a’i a form of interpersonal attrac-
tion and referent power over others.
coalition A group that attempt’i to influ·
ence people oultrue-
lure that overlays t\\”0 !1-tructurcs (such a~ a geo-
graphic divisional and a product structure) in
order to le\’cragc the benefits of both.
mechanistic structure An organizational
structure with a narrow span of control and a
high degree of formaJiunion and centrnli7.ation.
media richness A medium’s data-currying
capacity.llmt is.l11e volume and v-Jricry of infomla·
tion that can be tmn~mittcd during ‘l :-.pccilic time.
mental imagery The process of ment:tlly )li”JCtis-
ing a task and vL’\.ualizing its successful completion.
me ntal models Knowledge structures that
we develop to describe. explain. and predict the
world around us.
mindfulness A pc~on’!~o receptive and impar·
tial attention to and awareness of the present
situation as wcU as to one’s 0\\’n thoughls and
emotions in that moment.
moral lnten.slty The degree to which an iirooment.
internal subsystems configuration fo.r high perfor·
m.ance. emphasis on organi7.ational lf!:lming. and
ability to satisfy the need. of key stokcholders.
organic structure An orgnnizat.ional struc·
turc with a wide span of control. little formaliu-
tion. and dcccnlr.lli:t.cd decision malcing.
organizational behaviour (OB) The ins employee hch>\’·
iour in terms of the antcccdcnt conditions and
conscqucnca of !hot behaviour.
organizational clt.lzenshlp behaviours
(OCBs) Vorioo> forms of cooperation and
helpfulness to other. that suppon the organiza-
tion’s social and p>ychological context.
organizational cu~ure The value• and
assumptions shared within an organi7.:ttion.
organizational effectiveness A broad con-
cept represented by scvcr-.al perspectives. includ·
ing the organizntion’~ lit with the external
environment. internal ~ubsys1cms configuration
for high pcrfonmmcc. emphasis on organizational
learning. and ability to satisfy the need~ of key
stakeholders.
organiza tional learning A perspective which
holds that organizational cffccti\-eness depends
on the organiLation’s capacity to acquire. share,
usc. and store valuable knowledge.
organiza tional politics Behaviours that oth-
ers percci”C as sclf·M:rving tactic~ at the ex pen.~
of other people and possibly the organization.
organizational socialization The proccs.< by .. t.ich individuals learn the values. expected hcha"iours. and social ~ ledge ncces.ury to
assume their roles in the orga.niu1ton..
organizational strategy The way the orga-
nization positions itself m its setting in relation
to its stakeholders. gh-.:n the organization’s
resources. cap;t.biJities . and mi~sion.
organizational structure The division of
labour as well a. the patterns of coordination,
communication. wortnow. and forma1 power
that direct organiz.ational activities.
orga nizations Groups of people who wort
interdependently toward •omc purpose.
parallel learning structures Highly partici-
pative armngcmcnb composed of people from
most levels or the organization who follow the
action research model to produce meaningful
organizational change.
p a tlt-goa l le adersh ip th eory A leadership
theory stating that effecLivc leaders choose the
most appropriate leadership style(s). depend-
ing on the cmplo)’CC tmd situation. 10 influence
employee expectations ttbout de.sircd results and
their positive outcom~.
perc.eptlon The procc.s of receiving informotion
about and making sense of the world 3t0Und u.<. persona lity The relath'Ciy enduring pattern of thoughts. emotion>. and bcho”iours that chor-
actcrize a person. along with the psychological
processes behind those characteristic<. Glossary persuasion The usc of facts. logical argu· ments. and emotional appeals to change another person's beliefs and attitudes. usually for the pur- pose of c.hanging the person's behaviour. positive organizational behaviour A per- spective of organizaaional behaviour that focuses on building posir:ive qualities and traits within individuals or instirutions as opposed to focusing on what is wrong with them. positivism A •·icw beld in quantitati>‘e
research in whieh n:3lity exists independent of
the perceptions and interpretations of people.
Power distance A cross·cultural value
dc.’icribing the degree to which people in a c ulture
accept unequal distribution of power in a society.
power The capacity of a person. temn, or
organization to influence Olhcrs.
power The capacity of a person. team. or
organization to influence Olhcn.
primacy effect A pen:eptu31 error in which
we quickly form an opinion of people based on
the first information we rccciYc about them.
procedural Justice Perceived fai rness of the
procedures used to decide the distribution of
resources.
process losses Resources (including time
and eneJID’) expended toward team de>-eiopment
and maintenance rather than the task.
production blodclng A time constraint in team
decision malcing due to the procedural require-
ment that only one person may speak at a time.
profit·sharing plan A reward system that
pays bonuses to e mployee,\ on the basis o f the
previous year’s level or oorpomtc profit’i.
profit-sharing p lans A person’s inherent
motivation to have a positive self-concept (and
to ha>-e od>ers perceive llimlber fa>-ourably). snch
as being competent. aur>c:u>-.:. Judy. ethic31. and
important.
prospect theory effect A natural tendency to
feel more dissatisfaction from losing a particular
amount than satisfaction from gaining an equal
amount
psychological contract The individual’s
beliefs about the terms and conditions of a recip-
roca1 exchange agr«mcnt bct\\”CeD that person
and another party (typically an emplo)””)-
psyehological harassment Repeated and
hostile or unwanted conduct. \’Crbal comments.
actions. or gestures 1hat affect an employee’s dig·
nity or psychological or physical integrity and
that result in a harmful work environme nt for the
e mployee.
rational choice paradigm The view in deci·
sion making that people should~and typically
do-use logic and all a\’llilable information to
choose the altemati>·e with the highest >’lllue.
realistic job preview (!UP) A method of
imprtAi.ng OP”dlJlizmionaJ soc::iali:z.ation in whicb
job applicants are gi>-.:n a balance of positi>’e
and negative information about the job and worl< context. reality shock The strcs. that resu)L, when employees perceive d iscrepancies between their pre-employment expectations and on-the-job reality. recency effect A perceptual error in which the most recent information dominates our per· ccption of others. referent power The capacity to influence others on the basis of an identification with and n:spcct for the I""'"" bolder. refreezing The latter part of the change pro- cess. in which systems and structures ~ intro- duced that reinforce and maintain the desired bchaviou~. relationship capital The value derived from an organization's relationships with customers. suppliers. and others. relationship conflict A type of conflict in which people focus on characteristics of other individu31s. rather than on the issues. as the source of conflict. representative sampling The process of samphng a population in such a v.-ay th31 one can cxtrnpolate the results of that sample to the larger population. representativeness heuristic A natural 1endcncy to evaluate probabilities of c,·enl'i o r ob~t> by the degree to which they resemble (are
representative of) other events or objects rather
than on ohjccti>-e probability information.
reward power A person’s ability to cootrol
the allocation of rewards v31ued by others and to
rCn\0\’C negative sanctions.
rituals The programmed routines of daily
organizational life that dramatize the organiz.a·
cion’s culture.
role ~reeptlons The degree to which a per-
son understands the job duties assigned to or
expected of him or her.
role A set of behaviours that people are
upected to perform because they hold certain
positions in a team and organiza1ion.
satisficing Selecting an 31temat.ive that is sat-
isfactory or “good enough,” rather thtm the alte r-
native with the highes t value (maximization).
scenario planning A systematic process of
thinking about alternative fucures and what the
organization should do to anticipate and react to
thtxe environments.
scientific management The practice of
systcm:atically partitioning work into its small·
est elements and standardizing t:tsks to achien~
maximum efficiency.
scientific method A set of principles and proce-
dure.~ that help researchers to systematically under·
stand prcviO\l~ly unexplained events and condition.’i.
selective attention The prcceS< of attending to some infonnation recei\·ed by our senses and ignoring other information. self-concept An indi>;dual’< frtcacy A person’s belief that he or she
ha.\ the ability. motivation. correct role percep-
tion.’\, and favour.1blc situation to complete a task
successfully.
self-enhancement A person’s inherem moti –
vation to huve 3 positive self.-concep1 (and to
ha>·e others perceive him/her favourably). such
as being competenL attracti>-e. Juoky. ethical. and
imponant.
self-fulfilling prophecy The perceptual pro-
cess in which our expectations about another
person cause that person to act more con.\:i’\tcntly
with those expectations.
self-leadership The process of influencing
oneself to cstublbh the self-direction and self-
motivation needed to perform a task.
self-reinforcement Reinforcement that OCCW’S
when an employee has control”‘”” a reinf”””” but
doesn’ t ·ta~;e’ it W>til completing a self-set go31.
self-serving bias The tendency to attribute
our fa,’Ollrnblc outcomes to internal factor’$ and
our fuilures to external factors.
self-talk The process of talking to ourselves
about our own thoughL’i or actions.
self-verification A person ‘sinherentmot.ivation
to confirm and maintain hi.slber existing
self-concept.
servant leadel’$hlp The ,.;ew that 1<3ders sen-e foll""-.:rs. rather than vice '"rsa: lead- ers belp empiO)-.:cs fulfil their need' and an: coaches. stewards. and facititators of employee performance. service profit chain model A theory explain- ing how e mployees' job satisfaction influences company profitability indirectly through service quality. customer loy3lty. and related factors. share options A reward system that gi•·cs cmpiO)=s the right to purchase company shan:s at a future date at a predctennined price. shared Jeadel'$hlp The view that leade"hip is a role. not a position assigned to one person: consequently. people within the team and organi- zation lead each other. situational leadership theory (SLn A com· mercially popular but poorly supported leader· ship model stating that effecti>-e leaders vary
their style (telling. selling. participating. delcg>t·
ing) with the mou>-ation and ability of followers.
skill varlttty The extent to which employees
must usc diffen:nt skills and talents to perform
tasb within their jobs.
social capital The knowledge and other
resources available to people or social units
(teams, o rganizations) from a durable network
that connects them to others.
social cognitive theory A theory tll>t
explains how learning and motivation occur by
obsen’ing ond modelling od>ers as w”ll as by
anticipating the consequences of our beh3\’iour.
social Identity theory A theory stating thot
people define thcmsci•·cs by the groups to which
they belong or have an cmotionaJ attachment.
social loafing T he problem that occurs when
people excn less effort (and usu31Jy perform ut u

GL-5 Glossary
lower level) when working in teams than when
working alone.
social networks Social structures of individu·
als or social uniL~ that are connected to each other
through one or more fonns of interdependence.
span of control The number of people directly
reporting to the next level in the hierarchy.
stakeholders Individuals. groups, and other
entities that affect, or are affected by, the organi·
zation•s objectives and actions.
stereotype threat An individual’s concern
about confirming a negative stereotype about his
or her group.
stereotyping The process of a..’isigning traits
to people based on their membership in a social
category.
strengths-based coaching A positive orga-
nizational behaviour approach to coaching and
feedback that focuses on building and lever.tg·
ing the employee’s strengths rather than trying to
correct his or her weaknesses.
stress An adaptive response to a situation that
is perceived a’i challenging or threatening to the
person•s well-being.
stressors Environmental conditions that place
a physical or emotional demand on the person.
structural capital Kno\\iedge embedded in
an organization’s systems and structures.
structu ral hole An area between t\.\’0 or more
dense social network area.’i that lacks network tie.’i.
subjective expected utility The probability
(expectancy) of satisfaction (utility) resulting
from choosing a specific alte rnative in a decision.
substitutability A contingency of power per-
taining to the availability of alternatives.
superordinate goals Goals that the conflict·
ing parties value and whose attainment requires
the joint resources and effort of those parties.
surface-level d iversity The observable
demographic or physiological differences in peo·
pie. such a.’i their race, ethnicity. gender. age. and
physical disabilities.
task conflict A type of conflict in which people
focu.’i their disctL’ision around the issue while show·
ing respect for people with other points of view.
task identity The degree to which a job
requires completion of a whole or an identifiable
piece of work.
task interdependence The extent to which
employees must share materials. information. or
expertise with others in order to perfonn their
jobs.
task performance The individual’s voluntary
goal-directed behaviors that contribute to organi·
zation.al objectives
task significance The degree to which a job
ha.’i a substantial impact on the organization and/
or larger society.
taskwork behaviour EfforL• devoted to
understanding the task requirement’i. discover·
ing the ” rule.•” by which the tasks are to be per-
formed. establishing the patterns of inter.tction
with equipment., exchanging task-related infor·
mation. developing team solutions to problems.
and so forth.
team boundary spanning Team actions that
establish or enhance linkages and manage inter·
actions with parties in the external environment.
team b uilding Groups of two or more people
who interact and influence each other. are mutu•
ally accountable for achieving common goals
associated with organizational objectives, and
perceive themselves as a social entity within an
organization.
team building A process that consists o f for·
mal activities intended to improve the develop-
ment and functioning o f a work team.
team cohesion The degree of attraction peo-
ple feel toward the tean1 and their motivation to
remain members.
team efficacy The collective belief among
team members of the team’s capability to suc-
cessfulJy complete a ta.’ik.
team-based structu re An organizational
structure built around self·directed teams that
complete an entire piece of work.
teams Groups of two or more people who
interact and influence each other. are mutu·
ally accountable for achieving common goals
associated with organizational objectives, and
perceive themselves as a social entity within an
organization.
teamwork behaviour Activities that are
devoted to enhancing the quality of the inte rac-
tions, interdependencie.’i, cooperation.. and coor·
dination of teams.
telework An arrangement whereby, supported
by information technology. employees work
from home or other nonwork setting one or more
\\’Ork days per month r.tther than commute to the
office.
theory A general set of propositions that
describes inte rrelationships among several
concept~.
third-party conflict resolution Any attempt
by a relatively neutral person to help conflicting
partie.’i resolve their difference.’i.
transformational leadership A leadership
per.;pecti\’e that explain.’ how leader.; change
teams or organizations by creating. communicat·
ing. and modelling a vision for the organization or
V.’Ork unit and inspiring employees to strive for that
vL’iion.
trust Positive expectations one person has
toward another person or group in situations
involving risk.
uncertainty avoidance Across·cultural v-alue
describing the degree to which people in a cui·
ture toler.tte ambiguity (low uncertainty avoid·
ance) or feel threatened by ambiguity and
uncertainty (high uncertainty avoidance).
unfreezing The firs t part of the organizational
change process. in which the change agent pro-
duces disequilibrium between the driving and
restr.Uning forces.
upward appeal A type of influence in which
someone with higher authority or expertise is
called on (in reality or symbolically) to support
the influencer’s position.
values Relatively stable evaluative beliefs that
guide a person•s preferences for outcomes or
courses of action in a variety of situations.
virtual teams Teams whose members operate
across space, time. and organizational boundar·
ies and are linked through information technolo-
gies to achieve organizational tasks.
wikis Collabor.ttive web spaces where anyone
in a group can write, edit, or remove material
from the website.
win-lose orientation The belief that con·
meting parties are dr.twing from a fixed pie, so
the more one party receive.’i, the less the other
party will receive.
win-win o rientation The belief that conflict·
ing parties will find a mutually beneficial solu·
tion to their disagreement.
work-life balance The degree to which a
person minimizes conflict between V.’Ork and
nonwork demands.
workaholism An uncontrollable work moti·
vation, where people constantly think about
work and have low work enjoyment.

Endnotes
CHAPTER 1
I. A Bryant … Powering a Team with a ·Trust
Banery ·:·New York Times. 24 April 2016. 2:
J. Cowan. ·111e Canadian Business Interview:
Harley finkelstein: · Canadian Bus;ues.f. March
2016. 57- 5&: E. De Vila . .. A Workplace Wiki Helps
Teams Get to Know Each Other:· Finmu:ial Times
(Londo”). 8 May 2016: B. Davis. ··Shopify Plus
Acquires Waterloo’s Bolunade:· \Va1erloo Region
Record. 4 October 20J6. CJ: .. Help Us Redefine
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20 17). https://www . .shopify.com/careers (accessed
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2. M. Warner. “Organizational Behavior Revisited:·
Human Relmions 47 (Ocrober 1994): I 151-1 166:
R. Westwood and S. Clegg. ··The Discourse of
Organization Studies: Dissensus. Politks. and
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CmmterpoiUI in Organiuuion Studies. ed. R.
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3. R.N. Stern and S.R. Barley. “‘Organization.~ as
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4. P.C. Newman. Company of Adwmwrers
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A. Wooldridge. Tht! C’mnpany: A Short H;swry of
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10. The extent to which OB influences career
succes.~ depends on course pedagogy as well as the
prac.tical value of the OB conceplS covered in the
course. In fact. OB scholars have an ongoing debate
about the practical re leva1lCe of OB research. See.
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S. Spoelstra. “Problematizing ·Relevance· in the
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performed much better than the other two groups.
14. R.S. Rubin and E. C. Dierdorff. “‘How
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of Required CurTicula and Required Managerial
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24. 111e ongoing debate regarding the advamages
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“American lime Use Survey-2014 Results:· news
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Canada (Toronto: CNW. 2 1 June 2016): Flexible
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35. Statistic.~ Canada … immigration and Ethno-
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36. M.H. Davis. S. Capobianco. and L.A. Kraus.
··Gender Differences in Re.~ponding to Conflict
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ltueruarhmal lou mal of Hospiwlil)’ Manage·
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Research 68. no. 4 (20 15): 857-6 I: Y. Zhang and
M.-Y. Huai … Diverse Work Groups and Employee
Performance: 1l1e Role of Communication Tie.~:·
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41 . .. Ma.~tercard:· Di\·ersiryl11c. April20 16. 35.
42. D. Porras. D. Psihounta.~. and M. Griswold.
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Endnotes
I (2006): 25-34: R.A. Weigand. “OrganizationaJ
Diversiry. Profit~ and Retum.~ in U.S. Finns:· Prob-
lems & Perspectives in Management 5. no. 3
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43. T. Kochan et al.. ··Tbe Effuct.< of Diversity on BlL~;iness Perfomtance: Repon of the Diversity Re.~arch Netwot·k:· Human Resouru Manage- mem42 (2003): 3-2 I: S.T. Bell et al.. ··Gening Specific about Demograpllic Diversity Variable and Team Perfonnance Relationships: A Meta-Analysis:· Journal oJManagemenr37. no. 3 (201 1): 709-43: S.M.B. Thatcher and P.C. Patel. ··Group Fauldines: A Review. integration. and Guide to Future Research:· Journal of Management 38. no. 4 (2012): 969-1009: C. Ozgen et al .. "Doe< Cultural Diversity of Migrant Employee< Affect Innova- tion?:· Jmenuuional Migration Rel'iew 48 (20 14): S3n-S4J6. 44. Most of the.~ anchors are mentioned in: J.D. l hompson. "On Building an Administrative Sci- ence:· Admit~istrruiw! Science Quarterly I. no. I (1956): 102-11. 45. 1'his anchor has a colourful history dating back to critiques of business schools in the 1950s. Soon after. systematic research became a mantra by many respected .scholars. See. for example: Thompson. ··on Building an Administrative Science.·· 46. J. Pfeffer and R.I. Sutton. Hartl Facts. Danger- ous HalfTrw!Js. and Tow/ Nonse11se (Boston. MA: Harvard Busine.<-< School Pres.<. 2006): D.M. Rous..~au and S. McCanhy. ··Educating Managers from an E,ridence-Based Perspective:· Academy of Manageme111 Leaming & Education 6. no. 1 (2007): 84-101: R.B. Briner and D.M. RolL<-ral Science 16. no. 4 (Oct. 1980): 536-545:
K. Cameron. “Organizational Effectiveness: Irs
Demise and Re-Emergence through Positive
Or:ganizationaJ Scholarship … in Great Mind.f in
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York: Oxford University Pres.<. 2005). 304-330. 59. S. Selden and J.E. Sowa. ''Testing a Multi- Dimen.~ionaJ Model of OrganizationaJ Perfor- mance: Prospects and Problems: · Journal of Public Administratimt Research and Theory 14. no. 3 (July 2004): 395-416: A.A. AmirkJ1anyan. HJ. Kim. and K.T. Lambright .. The Performance Puzzle: Understanding the Fac.tors Influencing Alternative Dime1t.~ions and Views of Performance:· Journal of Public Admit~istration Research and Theory 24. no. I (2014): 1-34. 60. Che.~er Barnard give..~ one of the earliest descrip- tion.~ of organizations as system.~ interacting with external e1wironments and that are composed of .sub- system.~. See: C. Bamard. The Functions of the Exec- wit>e (Cambridge. MA: Han•ard University Pres..~.
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62. Katz and Kahn. The !i<>cial Psydwlogy of
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C.R. Hinings … Returning to the Frontier of Contin-
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63. D. Dahlhoff. ·•why Targefs Canadian Expan-
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(Minneapolis: Target. 15 January 2015). https://cor-
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..Four faces of Public Service Efficiency:·
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EN-4 Endnotes
65. K.E. Weick. The Social l’sych<>logyoJOrganizing
(Reading. MA: Addison-Wesley. 1979): S. Brusoni
and A. Prencipe … Managing Knowledge i n Loosely
Coupled Netwot·ks: Exploring the Links between
Product and Knowledge Dyllamics:· Journal
of Managemtlll Studies 38. no. 7 (Nov. 2001 ):
1019–1035.
66. R. Slater. Jack Welch & rl~< G. E. \Vay: Man- agemem lnsiglus and Leaders/tip Secrets oj11te Legendary CEO (New York: McGraw-Hill. 1999). 67. T.A. Stewart. Intellectual Capiwl: 71te New Weaiiit oJOrganiuuhms (New York: Currency/ Doubleday. 1997): L.-C. Hsu and C.-H. Wang. --Clarifying the Effect of Intellectual Capital on Performance: The Mediating Role of Dynamic Capability:· BrWslt Journal oJManagemem (20 11): 179-205: A.L. Mention and N. Bontis. --Intellectual Capital and Performance within the Banking Sector of Luxembourg and Belgium:· Journal of lmellecwal Capiral 14. no. 2 (2013): 286-309: K. Asiaei and R. Jusoh . .. A Multidimensional View of lntellecrual CapitaJ: The Impact on Organizational Performance:· Mtmagemem Decision 53. no. 3 (2015): 66&-97. 68. J. Bamey . .. Firm Resources and Sustained Competitive Advantage:· Joumal ofManagemem 17. no. I (1991): 99-120. 69. J. P. Hall~knecht and J.A. Holwerda ... When Does Employee Turnover Matter? Dynamic Member Configurations. Productive Capacity. mxl CoiJective Performance:· Organization Science 24. no. I (2013): 21()..25. 70. P. Cleary ... An Empiric:al Investigation of the Impact of Management Accounting on Structural Capital and Busine.~ Performance:· Journal of lmellecwal Capiral 16. no. 3 (2015): 566-86: L.M. Gogan. D.C. Duran. and A. Draghici. .. Structural Capil31-a Proposed Meawrement Model. .. Proce. dia Ecmwmics and Finance 23 (20 15 ): 1139-46. 71. Some organizational learning researchers use the label .. social c-.apitar instead of relationship capitaJ. Social capitaJ is discll~~d later in this book as the goodwiiJ and resulting re.wurces shared among members in a social network. The two concept~ may be identical (a.~ those writers suggest). However. we continue to use .. relation. ship capital"" for intellectual capital because social c.apitaJ typic.aJiy refers to individual relationships whereas relationship capitaJ also includes value not explicit in social capital. such as the organization·s goodwiiJ and brand value. 72. G. Huber. "'Organizational Learning: The Con. tributing Processes and Literature:· Organizmimwl Scieuce2 (1991): 88-115: D.A. Garvin. Learning in Action: A Guide to Pwting 1he Learning Orga. nization 10 Work (Boston. MA: Han•ard Business School Pre.~~. 2000): H. Shipton ... Cohe.~ion or Confusion? Towards a Typology for Organizational Learning Re.~arch:· lmemational Jounw/ of Mtmagemem Reviews 8. no. 4 (2006): 233-52: D. Jimenez-Jimenez and J.G. Cegarra.Navarro. ··r he Performance Effect of OrganizationaJ Learning and Market Orientation:· lndusirial Markeiing Mtmagemem 36. no. 6 (2007): 694-708. One recent study suggest~ that these organizational learning processes aren·t always beneficiaJ because they may be more costly or burdensome than the vaJue they create. see: S.S. Levine and M.J. Prietula. ··How Knowledge Transfer Impacts Perfonnance: A Multilevel Model of Benefits and Liabilities:· Organi:Aiiwer 36.
no. 5 (2015): 772-90.
82. J. Tullberg. –stakeholder Theory: Some
Revisionist Sugge.«ions:· Tlte Journal of Socio·
Econ<>mics 42 (2013): 127-35.
83. R.E. Freeman. J.S. Harrison. and A.C. Wicks.
Managing for Swkelwlders: Sun:h·al. Repwa~im1.
mtd Success (New Haven. CT: Yale University
Press. 2007): B.L. Pannar et al .. –Stakeholder
Theory: The Stare of the An:· Academy of Manage·
me111 Atmal.~ 4. no. I (20 10): 403-45: S. Sachs and
E. Rilhli. Swk~holders Mauer: A New Paradigm
for S1r01egy in Sodety (Cambridge. UK: Cambridge
University Pre.oc<. 20 II). 84. A. Santana ··r hree E-lements of Stakeholder Legitimacy:· Journal of Busin~ss E1hics 105. no. 2 (2012): 257~5: D. Crilly and P. Sloan. --Autonomy or Control? Organizational Architec.rure and Corpo. rate Attention to Stakeholders:· Organiuuimt Sci· ence 25. no. 2 (20 14): 339-55: M. Hall. Y. Millo. and E. Barman. "Who and What ReaJiy Counts? Stakeholder Prioritization and Accounting for Social Value:· Journal of Managemem Swdi~s 52. no. 7 (2015): 907-34: D. Weitzner andY. Deutsch. "Understanding Motivation and Social Influence in Stakeholder Prioritization:· Organi!aiion Sttttl· ies 36. no. 10 (2015): 1337-60. 85. R.E. Freeman. A. C. Wicks. and B. Parmar. "Stakeholder Theory and "the Corporate Objective Revisited:·· Organiz.ation Science 15. no. 3 (2004): 364-69: B.R. Agle et al .. ··Dialogue: Toward Superior Stakeholder Theory:· Busine.u Ethics Quarr.rly 18. no. 2 (2008): 153-90: R.B. Adams. AN. Licht. and L. Sagiv. ··Shareholders and Stake- holders: How Do Directors Decide?.·· Sir{lfegic Managemelll Jounwl32. no. 12 (2011 ): 1331-55. 86. B.M. Meglino and E. C. Ravlin. "lndividuaJ VaJue.~ in Organizations: Concepts. Controversies. and Re.~arch:· Jounw/ ofManagemem 24. no. 3 ( 1998): 351-389: B.R. Agle and C. B. Caldwell. "Understanding Re.~arch on Value.~ in Business:· Business and Society 38. no. 3 (September 1999): 326-387: A. Bardi and S.H. Schwartz. --values and Behavior. Strength and Structure of Relations:· Persmwlity amf Soda/ P.rycltology Bulletin 29. no. 10 (October 2003): 1207-1220: S. Hitlin and J.A. PiJavin. "Values: Reviving a Dormant Concept·· Annual Review of Sociology 30 (2004): 359-393. 87. Some popular books that empha~ize the impor- tance of personal and organizational value.~ include J.C. Collins and J.l. Porra.~. Buill U> Ltw: Successful
Habiis of Visionary Companies (London: Century.
1995): C.A. o·Reilly ll l and J. Preffer. Hidden
Vdltt~ (Cambridge. MA: Harvard Bll~ines.~ School
Pre.~. 2000): J. Reiman. T11e S10ry of PurJX>Se: 111e
Pmh 10 Creating a Bdgluer Brand. a Greater Com·
pany. and a LAsting Legacy (Hoboken. NJ: Wiley.
20 13): R. Barrett. J11e Values.Dri\·et~ OrganiWihm:
Unleaslting H”man Potemial for Perfomwnu and
l’rofil (New York: Routledge. 2014): R.E. Freeman
and E.R. Auster. Bridging Ihe Values Gap: How
Auiitemic Organizations Bring Values 10 Uf~
(Oakland. CA: Berren-Koehler. 2015 ).

End notes
88. “Vancity Tops Best SO Corporate CitizeJls List
in Corporate Krughts2016 R:lnking.·· News release
(Toronto: CNW. 7 June 2016~ ··values-Based Bank-
ing;· F•eding G””” h (Faocbook. 24 November2016).
http.<://www.facebook.oon11pcnnnlink.php?story_tbi d.= II S5968968156197&id=908437545909342 (oooessed 28 February 2017). 89.'/M 2016 Dc>Joitt• Mlilmniol Sun-.” Winning
m~r tM Na1 G~Mrati.on of Uu.tkn. Dekline Toudte
Tobmatsu (New York: January 2016).
90. M. ‘-an Marrewyk. “Coocepu and Deftnitions
of CSR and Corporate Sustain>bthty: Bern-een
Agency and Commumon.”‘ Joumal ofBu.sim~ss
Ethics 44 (May 2003): 95- IOS: M.L. Barnett.
“Stakeholder Influence CaJXlCity OJl d the Variability
of Financial Returns to Corporate Socia l Responsi·
biHty.” Academy of Matragmu•uJ Rnit·w 32. no. 3
(2007): 7~16.
91. L.S. Paine. Volu• Shtft (New York: McGraw-
Htll. 2003): A. Madey. T.B. Mx key. and J.B.
Barney. ·-<:orpcnte SocgiiW>ponStbthty and Finn
Perfonnar>ce: lm-estor Preferencfi and Corporate
Strategies.·· Acadtm~· of Mtmagt>tn~JI R~l’it14′ 32
no. 3 (2007): 817-835.
92. S. Zadek. The Ch·il Co,.,Jormlon: The New
Ectmomy ofCorporote Citiuwthip (London. UK:
Earth.«:an. 200 I): S. Hart and M. Milstein . .. Creal·
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E.ucuti•-. 17. no. 2 (2003): 56-69.
93. A. Bateta. “MTN Rwanda Helps m Rural
Elechicity.- Eos1 Africon B11siuu U.~d: (Kampala..
Uganda). June 22. 2015: .. MTN Cooneas Scbools
to Off-Grid l’ol>er. Equtps Teachers l’ith ICT
Skills:· N~w Ttm~s (Kigali. Rwtmda), 4 July 2016.
l1tformation about Y’ello Care activities in Rwanda
and other countries wei’C al”o acquired at: hnp.~://
www.mtn.com/en.lmtn-grouplrocial-ilwestments/
y’ ellcxate/Pages/Yello-eare-20 16.aspx.
94 . .\1. Friedman. CtlpiWiiJmtmd Frudom.. 4CXh
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95 … Four in Ten (37~) Em1>loyees Rate Corporate
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6. TeohmcaUy. the model proposes that situation
fnclor~. moderate the effects of the ti\I’CC within-
pcr~on factors. For instance. the effc.c1 of emJ)Ioyee
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28 September 2015~ http://www.gallup.comlopn·
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the Relationship between Organizational Citizen.
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T.M. Nielsen et al …. Utility ofOCB: Organiz.a.
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in a Re.~urce Allocation Framework:· Journal of
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22. A.C. KIO(z and M.C. Bolino … Citizenship
and Counterproductive Work Behavior: A Moral
Licensing View:· AcademyofManagemem
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at. .. Exploring the Dark Side of Organizational
Citizenship Behavior:· lou mal of Organizational
Behal’ior 34. no. 4 (201 3): 542-59.
23. M. Rotundo and P. Sackett . .. The
Relative lmponance of Task. Citizen.~hip. and
Counterproductive Perfonnance to Global Rating.~
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“Overlooked ls..wes in the Co1x:eptualization a1xl
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24. 11le relationship between employee rurnover
and firm performance is actually very tow. but
this is due to moderators and is stronger for some
forms of firm perfonnance. See: J.l. Hancock et
aL .. Meta-Analytic Review of Employee Turnover
a~ a Predictor of Finn Perfonnance:· Journal of
Manageme111 39. no. 3 (2013): 573-603.
25 . .. Hays Canada 2016 Salary Guide:· News
release (Toronto: Hays Specialist Recruitment
Canada. I December2015): L. Johnson … B.C.
Children· s Hospital Postpones Surgeries Due to
Nursing Shortage:· CBC Nt!W.f (Vancmwer). 9 May
2016.
26. T.-Y. Pa1·k a1xl J. Shaw. ”Tumover Rates and
Organizational Perfonna1x:e: A Meta-Analysis: ·
Jmmwl oJApplietl l’.logy 98. no. 2 (2013):
268-309: J.l. Hancock e1 al …. Mela-Analytic
Review of Employee lumover a.~ a Predictor of
firm Performance.:· Joumal of Managemellt 39.
no. 3 (2013): 57:>-603: J.G. Messersmith et al ..
‘1’urnover at the Top: Executive Team Deparrures
and Firm Performance:· Organiuuion St:i~llt:e 25.
no. 3 (2014): 776-93: B.C. Holtom and T.C.
Burch. ··A Model ofThmover-Based Disruption in
Customer Services:· Human Resourt:e Managemem
Rniew 26. no. I (2016): 25-36.
27. “Sickness Absence Rates and CosL~ Revealed in
UK ·s Largest Survey:· Personnel Today. 28 Octo-
ber 2015: Bureau of Labor Statistics … Absences
from Wo•·k of Employed Full Time Wage and Sal-
ary Wot·kers by Occupation and Industry.” Currem
Populaiion Sun·~y. House/wid Data (Washington.
DC: Bureau of Labor Statistics. 10 February 2016).
Databa.-75: M. Sliter.
K. Sliter. and S. Jex. ’11le Employee a.~ a Punching
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no. I (2012): 121-39: M. Biron and P. Bamberger.
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29. G. Johns … Presenteeism in the Workplace: A
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30. G. Johns. “Attendance Dynamics at Work:
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to Get a Job at the World’s Largest Hedge Fund:·
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33. Personality researchers agree on one point
about the definition of personality: It is difficult
to pin down. A definition necessarily c:apture.~ one
perspective of the topic more than others. and the
concept of personality is ilSelf very broad. The
definition pre.~nted here is ba~d on C.S. Carver
and M.f. Scheier. P~rspecti\•es on Persona/if)’. 6th
ed. (Boston. MA: Allyn & Bacon. 2007) and D.C.
funder. 71Je Personalii)’ Puule. 4th eel. (New
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1092- 122: JJ . Jac.k.~on et al. .. Your Friends Know
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56. H. Solomon. ‘Telooom CEO: ·£mpower dle
Right Person with the Right Skillset to Step up
at the Right Time·:·JTWorld Canada, 7 June
2016: .. 2016 Canadian Telecom Summit Presents
Telecom Employer of Choice Award~:· Telecom
Review. July-August 2016.

EN-8 Endnotes
57. B.M. Meglino and E..C. Ravlin … Individual
Values in Organizations: Concepts. Controversies.
and Research:· Journal of ManagemeUI 24. no. 3
( 1998): 351-389: B.R. Agle and C.B. Caldwell.
.. Understanding Research on Values in Busine.~~:·
Busine.u and Sociery 38. no. 3 (September 1999):
326-387: S. Hitlin and J.A. Pilavin . .. Values:
Reviving a Donnant Concept:· Annual Re,•iew of
Socioi<>gy 30 (2004): 359-393.
58. D. Lubinski. D.B. Schmidt. and C.P. Benbow.
··A 20. Year S1ability Analysis of the Study of
Values for lntellecruaUy Gifted llxlividuaJs from
Adole.~ence to Adulthood.·· Journal of Applied
Psychology 8 1 ( 1996): 44:>-451: M. Vecchione
et al.. “Stability and Change of Basic Personal
Values in Early Adulthood: An 8-Year Longitudinal
Study:· Journal of Research in Persmwlil)’ 63
(20 16): I I 1-22.
59. L. Park.< and R.P. Guay . .. Personality. Value.<. and Motivation:· Personalii)' and ltulhillual Differ· e11-88.
61. N.T. Feather. “Values. Valences. and Choice:
The Influence of Values on the Perceived Attrac-
tivene.~~ and Choice of Alternative.~:· Joumal of
l’ersonaliry a11d Sociall’sychology 68. no. 6 ( 1995):
I 135-51: L. Sagiv. N. Sverdlik. and N. Schwarz.
·1’o Compete or to Cooperate? Values· Impact on
Perception and Action in SociaJ Dilemma Game.~:·
Eumpean Journal of Soda/ Psydwlogy 41 . no.
I (201 1): 64-77: S.H. Schwartz and T. Butenko.
··Value.~ and Behavior: Validating the Refined
Value Theory in Russia:· Eumpean Journal of
Sociall’sydtology 44. no. 7 (2014): 799-813.
62. G.R. Maio et aL “‘Addres..~ing Discrepancies
between VaJues and Behavior: The Motivating
Effect of Reasons:· Journal of Experimemal St)cial
l’sycltol<>gy 37. no. 2 (2001 ): 104-17: A. Bardi and
S.H. Schwartz . .. VaJues and Behavior: Strength and
Structure of Relation .. ~:· Personaliry and Social
l’sycltology Bullelill29. no. 10 (2003): 1207-20:
L. Sagiv. N. Sverdlik. and N. Schwarz . .. To Compete
or to Cooperate? Values· Impact on Perception and
Action in SociaJ Dilemma Game.~:· European Jour·
11al of!i<>ciall’sydwlogy 41. no. I (201 1): 64-77:
K.M. Sheldon and L.S. Krieger. ··Walking the Talk:
Value Importance. Value Enactment. and Well·
Being … Motiwuion and £motiot~38 (2014): 609-19.
63. E. Dreezens et al.. .. The Missing Link: On
Strengthening the Relationship between Values and
Attitudes:· Basic and Applied Social Psychology
30. no. 2 (2008): 142-52: S. Arieli. A.M. Grant.
and L. Sagiv. ··Convincing Yourself to Care About
Others: An Intervention for Enhancing Benevolence
Values:· Journal of Personality 82. no. I (2014):
15-24.
64. N. Mazar. 0 . Amir. and D. Asiely. ‘1loe
Dishone.sty of Honest People: A Theory of Self-
Concept Maintenance:· Jounw/ of Marketing
Research 45 (Deoember 2008): 633-M4.
65. M.L. Verquer. T.A. Beehr. and S.H. Wagner.
“A Meta· Analysis of Relations between Person-
Organization fit and Work Attitude.~:· Jounwl
of Vocatio11al Beltal’ior 63 (2003): 473-89: J. W.
We.~erman and L.A. Cyr. “‘An Integrative Analysis
of Person-Organization Fit Theorie.~:· /tuernatimwl
Journal of Selection and Assessmelll 12. no. 3
(2004): 252-61: J.R. Edwards and D.M. Cable.
”11le Value of VaJue Congruence:· Joumal of
Applietll’sydwlog)94. no. 3 (2009): 654-77: A.L.
Kristof.Brown et al .. “Collective Fit Perception.~:
A Multilevel Investigation of Person-Group fit
with lndividuaJ.Level and Tea.nl·Level Outcomes:·
Journal of Organizmimwl Behavior 35. no. 7
(2014): 969-89.
66. G. Kirbyson . .. Manitoba’s Top 25 Employers
to Be Announced:· Winnipeg Free Pres.f, 22
November 2014. B7: Canadian Busine.~ for SociaJ
Responsibility. A G,ide to the ·Qualities of a
Trtmsformatimwl Company·. (Toronto: Canadian
Busines..~ for Social Responsibility. December
2015). pp. 48-49: Assiniboine Credit Union. 2017
Board of Directors Candidate Guide. (\Vinnipeg:
Assiniboine Credit Union. 20 October 20 16). pg.6:
… People. Planet. Prosperity· Wins Again:· News
release (Winnipeg: A.~~;in iboine Credit Union. 30
November2016).
67. “Honesty and Communication Top Leadership
Skills: Nanos:· CBC News. 20 September 20 13:
.. Leading tbe Charge: Wbat Do Canadian Workers
Look for in Their Leaders:· News release (Toronto:
Roben Half Management Resources. 22 September
2016): S. Gile.< ... The Most lmponant Leadership Competencies. According to Leaders around the World:· Harttml Business Re"·;ew Digital Articles. Marcb 20 16. 2~. 68. P.L Schumann. "'A Moral Principles frame- work for Human Resource Management Ethics:· Human Resource Management Redew 11(2001): 93-11 1: J.A. Bos..~. Analyzing Moral/.fsttes. 6th ed. (New York: McGraw-Hill. 20 13). Chap. I: A. Gustafson. "ln Defense of a Utilitarian Business Ethic:· Business and Society Review 118. no. 3 (201 3): 32>-60.
69. for analysis of these predictors of ethical
conduct. see: J.J. K.ish.Gephart D.A. Harrison. and
L.K. Trevino … Bad Apple.<. Bad Cases. and Bad Barrels: Meta-Analytic Evide1x:e About Sources of Unethical Decisions at Work:· Joumal of Applied l'syclwlogy95. no. I (2010): 1-31. 70. TJ. Jone.~ ... Ethical Decision Making by Individuals in Organizations: An Issue Contingent Model:· Academy of Management Re,•iew 16 (1991): 36<.-95: 1'. Barnetl .. Dimensions of Moral Intensity and flhic-.al Decision Making: An Empirical Srudy ... Joumal of Applied Sociall'sychology 3 1. no. 5 (2001): 1038-57: J. Tsalikis. B. Seaton. and P. Shepherd . .. Relative Importance Measurement of the Morallnten.~ity Dimension.~:· Journal of Busine.<.< Erltics 80. no. 3 (2008): 6 I 3-26: S. Valen- tine and D. Hollingwonh . .. Morallntensity. Issue lmpona.nce. and Ethical Reasoning in Operations Situations:· Journal of Business Ethics 108. no. 4 (2012): 509-23. 7 1. J .T. Kennedy . .. Alcoa's William O'Rourke: Ethical Business Practices. from Russia to Sustain· ability:· Camegie Cmmcil. 27 April 20 II : A. Gra- ham ... The 1'hought Leader Interview: William J. O'Rourke.·· stnitegy +business. Winter 2012. 1-7: 1'he Wheatley Institution. ··Seek True Nonh: Sto· ries on Leadership and Ethics- Bill O'Rourke:· (YouTube. 2 August 2016). https://www.youtube. com/watch?v=bmFDXeclq1M. Video (acce.<-/ Managemew 39. no. 3 (201 3): 660-83:
J. Jaeger … Compliance Culture Depends on Middle
Management .. Compliance Week. February 2014.
47-61 . The ethic:aJ culture quotation is from:
Canadian Centre for Ethic.~ and Corporate Policy.
··Business Ethics faqs: · (Toronto. ON: Canadian
Centre for Ethics and Corporate Policy. 2014).
http://www.ethicscentre.ca/EN/resourceslfaq.cfm
(acce.<-gical Bulletin 128 (2002): 3-72. Consistent
with Oyserman et aLa recem study found high
rather than low individualism among Chilean.~.
See: A. Kols tad and S. Horpestad … Self-Construal
in Chile and Norway:· Joumal ofCrm:s-Culwral
l’sychol<>gy 40. no. 2 (March 2009): 275-281 .
83. f .S. Niles. ··tndividualism-Collectivism Revis-
ited:· Cross-Cultural Researr:h 32 ( 1998): 315-41:
C.P. Earley and C. B. Gibson. ··Taking Stock in
Our Progress on Individualism-Collectivism: 100
Years of Solidarity and Community:· Journal of
Managemew 24 ( I 998): 265-304: C.L. Jackson et
al .. ··Psychological Collectivism: A Measurement
Validation and Linkage to Group Member Perf or·
mance:· Journal of Applietl Psychology 9 1. no. 4
(2006): 884-99.
84. Oyserman. Coon. and Kemmelmeier … Rethink-
ing lndi,•idualism and Collecti\•ism.·· Also see F.
Li and L. Aksoy. ··o imensionaliry of lndividuaJ-
ism-CoiJectivism and Mea.~urement Equivalence of
Triandis and Gelfand”s ScaJe:· Journal of Business
and 1’syd10logy 2 1. no. 3 (2007): 3 I 3-329. The ver-
tical-horizontal distillCtion does not account for the
Jack of correlation between individualism and col-
lectivism. See: J.H. Vargas and M. Kemmelmeier.
··&hnicity and Contemporary American Culture: A
Meta-Analytic Investigation of Horizontal-VenicaJ
lndi,•iduali.sm-Collectivism.·· Journal of Cross-
Cultural l’syd10logy44. no. 2 (2013): 195-222.
85. M. VoronO\• and J.A. Singer. ‘1be Myth
of Individualism-Collectivism: A Critic-.aJ
Review … Journal <>/ !i<>cial 1’syd10logy 142 (2002):
461-SO: Y. Takano and S. Sogon … Are Japanese
More Colloclivi.~tic Than Americ-.ans?:· Journal
of Cmss-Cultural l’sychology 39. no. 3 (2008):
237-50: D. Dalsky … Individuality in Japan and
the United States: A Cross-Cultural Priming
Experiment.”ltueruarimwl Joumal of ltuercultural
Relatimu 34. no. 5 (2010): 429-35. Japan scored
46 on individuaJism in Hofstede”s original srudy.
placing it a little below the middle of the range and
around the 60th percentile among the countrie.~
srudied. Recent studie.~ suggest that Japan has
become even more individualistic over the past
decade. See Y. Ogihara et al .. “Are Common
Nrune.~ Boooming Less Common? The Rise in
Uniqueness and Individualism in Japan:· fit>tUiers
in 1’syd10logy 6 (2015): 1490.
86. G. Hofstede. Culture ·s Con.fequeuces: Compar-
ing Values. Behaviors. lnsiiitttions, tmd OrganiZll-
tions acms.f Nations. 2nd ed. (11lousa.nd Oaks. CA:
Sage. 2001).
87. Hofstede. Culwn!·s Consequet~ces: Comparing
Values. Behaviors. lnsiiitttious. and Orgtmiza-
tions acms.f Nations. Hof.~tede used the terms
masculinity and femininity for achit\’emeut and
twrruring orienJ(Jiion. respectively. We (along with
other writers) have adopted the laner two term.~ to
minimize the sexist perspective of these concepts.
Also. readers need to be aware that achievement
orientation is a~wmed to be opposite of nurruring
orientation. bUl this opposing relationship might be
questioned.
88. T. Mickle and~ Pranner. “Jim Beam·s New
Owner Mixes Global Cocktail.” \Vall Street Jour-
t.al. May 4. 2015. A I : K. Moritsugu … Merging US.
Japan Work Cultures a Challenge for Beam Sun-
tory … Associated Pre.fs. January 15.2016.
89. V. 1’aras. J. Rowney. and P. Steel. .. Half a Cen-
tury of Measuring CuJrure: Review of Approac.he.~.
Challenge.~. and Limitations Ba~d on the Analysis
of I 21 Instrument~ for Quantifying Culture:·
Journal oflmeruatimwl Manageme111 15. no. 4
(2009): 357-373.
90. R.L. Tung and A. Vert>eke … Beyond Hofstede
and GLOBE: Improving the Quality of Cross-
Cultural Re.~arch:· Joumal of ltuernaiimwl Busi-
lle.logy umal of
Experimental Social Psychology 51 (2014): 1-14:
S. Oishi. T. Tal helm. and M. Lee … Personality and
Geography: lnt.rovens Prefer Mountains:· Jmmwl
ofReseardl in Personaliry 58 (2015): 55-68.
99. M. Adams. Fire and Ice: 111e U11ited States.
C”tmada. and Ihe M,wh t>,[Cmn·ergiug Values
(Toronto. ON: Penguin Canada. 2004). 142.

EN-10 Endnotes
100. J. Laxer. Tlte Border: Canada. rhe U.S. And
Di.~patchesfmm 1he 4911J PartJJit~l ( foronto. ON:
Anchor Canada. 2004).
101. M. Adams. Fi~and Ice: n1e Uu;ted Sf(Jres.
Canada, and the My1h oJCom•erging Values
(Toronto: Penguin Canada. 2004): C. Boncher.
.. Canada-US VaJues: Distinct Inevitably Carbon
Copy. or Narcis..~ism of Small Difference.~?:·
Horiu>n.f: Policy Research lllit;arh~ 7. no. 1 (June
2004): 42-49: J. Citrin. R. Johnston. and M. Wrighl
··oo Patriotism and Multiculruralism Collide? Com-
peting Perspectives from Canada and the United
States:· Canadian Journal of Polirical Scie11u 45.
no. 3 (2012): 531- 52: R. Dheeret al. … Cultural
Regions of Canada and United States:· buernllliottal
Journal of Cross Cultural Mtmagemell/14. no. 3
(2014): 343-84: M. Adams. ··Fire and Ice Revisited:
American and Canadian SociaJ Values in the Age of
Obama and Harper:· Prese.tUaJion miitt! Wmxlmw
Wilson C•nter (You Tube. 14 March 20 14). https:J/
www.youtube.com/watcb?v-.~Rbwvb9sMmw.
Video (accessed 26 January 201 7).
CHAPTER3
I. H. Stelfox … Let-s Have IT:· Hudd•rsfi•ld
Examiuu (UK), 20 November 2014. 28-29: J.
Stauffer. “‘Changing the face of STEM Education:·
Uui,·ersii)’ ojWa1erloo Magazine. FaiJ 2015: T.
Burgmann … Women Entrepreneurs Galvanized to
Disrupt Maledominated Tech Industry: · Toromo
Sun. 20 July 2016. A62: C. Preece . .. Is a Lack of
Self-Belief Pushing Girls Away from STEM?:·
IT Pm . 9 February 2016: S. Samson . .. Winnipeg
Women Say Gender lnequaJity Stands out in the
Workplace:· CBC N•ws(IVinnip•g). 29 January
2016: J. Zoratti . .. Breaking through the Tech Bar-
rier- City Group Teaches Code to Women. Girts:·
Winnipeg fru Pres.f. 22 January 2016. A2: M.
Sariffodeen. “Ladie.~ Learning Code Commissions
National Survey on Women in JCT … (foronto:
Ladies Learning Code. 8 November 20 16). http://
J adie.~leamingcode.conlfladie.~-learning-code-sur­
vey-women-ictl (acces.~d 9 January 20 17). Some
information ha.~ also been retrieved from other web
page.~ at: l adie.~learningcode.com.
2. A.T. Kearney and Your Life. Tough Choices: Tit~
Real Reason.f A-Let·el S1udeuu A~ S1eering Clear
ofSci•ll«and Maths (London: February 2016).
3. D. Cooper and S.M.B. Thatcher … Identifica-
tion in Organizations: The Role of Self-Concept
Orientations and Identification Motives:· Academy
ofMat~ag•m•w R.vi•w 35. no. 4 (2010): 516-38: J.
Schaubroeck. Y.J. Kim. and A. C. Peng. ”The Self-
Concept in OrganizationaJ Psychology: Clarifying
and Differentiating the Construct~:· in ltuerua-
tional Review of Industrial and Organiz.ational
Psychology (John Wiley & Sons. Inc .. 201 2). 1- 38.
4. V.L. Vignole..~. S.J. Schwarrz. and K. Luyckx. ··
Introduction: Toward an Integrative View of Iden-
tity:· in HaJUibook of Jdemii)’ Theory and Research.
ed. J.S. Schwartz. K. Luyckx. and L. V. Vignoles
(New York: Springer New York. 201 1). 1-27: L.
Gaermer el al.. “A Motivalional Hierarchy within:
Primacy of d>e Individual Self. Relational Self. or
CoiJeclive Self?:· Journal ofExperimemal Social
l’sychoh>gy 48. no. 5 (2012).
5. E.J. Koch and J .A. Shepperd . .. Is Self-
Complexity Linked to Better Coping? A Review
of the Literature.” Joumal of Persoualil)’ 72. no. 4
(2004): 7?:7-fil: A.R. McConnell. ··llle Multiple
Self-Aspect~ Framework: Self-Concept Repre.~nta·
tion and Its Implications:· Persoualiry and Social
Psychology Rwi•w 15. no. I (201 1): 3-27: L.F.
Emery. C. WaJs.h. and E. B. Stoner. “Knowing Who
You Are and Adding to It Reduced Self-Concept
Clarity PredicL< Reduced Self-Expansion:· Social Psychological and Personaliry Scietu:~ 6. no. 3 (201 5): 259-66. 6. C.M. BrO\vn et aL "Between Two Selves: Comparing Global and Local Predictors of Speed of Switching between Self. Aspects." Self and ld•11tity 15. no. I (2016): 72-89. 7. J.D. Campbell et al.. ··Self-Concept Clarity: Measurement. Personality Correlates. and Cultural Boundaries:· Journal of Personality and Social Psychology 70. no. I (1996): 141-56. 8. J. Locli-Smith and B.W. Roben.~. "Getting to Know Me: Social Role Experiei')Ces and Age Differences in Self.Concept Clarity During Adult· hood:· Journal <>/P•rsonality 78. no. 5 (2010):
1383-410.
9. E.J. Koch and J.A. Shepperd … Is Self-
Complexity Linked to Beuer Coping? A Review
of the Literarure:· Journal of Persmwlity 12. no. 4
(2004): 727-60: T.D. Ritchieet aL “Self-Concept
Clarity Mediates the Relation between Stress a1xl
Subjective Well-Being:· Self and Jdeutity 10. no. 4
(2010): 493-508.
10. A.T. Brook. J. Garcia. and M.A. Fleming. “The
Effects of Multiple ldentitie..~ on Ps.ychologic.aJ
Weii· Being.” Personaliryand Soda/ Psychology
Bulletin 34. no. 12 (2008): 158~00: A.T. Church
et al .. “Relating Self-Concept Consistency to
Hedonic and Eudaimonic Weii. Being in E.ight Cui·
ture.~:· Joumal ofCmss-t”ulllm11 P.rychology 45.
no. 5 (2014): 69~712.
I I. J.D. Campbell. ··Self-Esteem and Clarity ofd1e
Self-Concept:· Journal of PersonaUry and Social
Psyclwlogy 59. no. 3 (I 990).
12. S. HannaJ1 et al.. ‘1’he Psychological and
Neurological Base..~ of Leader Self.Complexity and
Effects on Adaptive Decision.Making:· Joumal
of Applied Psyclwlogy 98. no. 3 (2013): 393-411:
S.J . Creary. B.B. Caza. and L.M. Roberts. ··Out of
the Box? H O\V Managing a Subordinate’s Multiple
ldentitie.~ Affects the Quality of a Manager.
Subordinate Relationship.” Actulemy of Manage.
mem Re,•iew 40. no. 4 (2015): 538-62: S.K. Kang
and G. V. Bodenhausen. “Multiple Identities in
Social Perception and Interaction: Challenges and
Opportunities:· Annual R~view of Psychology 66.
no. I (2015): 547- 74.
I 3. G. QuilL .. Helene Joy : Successful -and
Ignored.” Toromo Swr. I 0 January 2009: “Canada
Wins Aussie Joy.” \Vest A”stra/ian. 29 June 20 I I.
5.
14. C. Peus et al.. “Authentic Leadership: An
Empiric-.al Test of hs Antecedent~. Consequences.
and Mediating Mechanisms.” Joumal of Bus;nes.f
Ethics 107. no. 3 (2012): 331-48: F.O. Walumbwa.
M.A. Maidique. and C. Atamanik. ··Decision.
Making in a Crisis: What Every Leader Need~ to
Know.” Organier and M.D. Alicke . .. Deconstruct-
ing the Better-Than-Average Effect” Joumal of
Persmwlityand Social P.ryclwlogy 99. no. 5 (2010):
755-70: S. Loughnan et aJ .. “Universal Biase.~ in
Self.Perception: Better and More Human Than
Average:· Brit; sit Journal t>f St)dal Psydwlogy 49
(2010): 627-36: H.C. Boucher. ··Understanding
Westem-East Asian Differe1lCes and Similarities
in Self-Enhancement:· Social and PersonaUty
Psydwlogy Compas.< 4. no. 5 (2010): 304-17: A. Gregg. C. Sedikide..~. and J. Gebauer. "Dynamics of Identity: Between Self-Enhancement and Self· As..~ssment:· in Handbook of ldem;ry 71u~ory aud Research, ed. S.J. Schwarrz. K. Luych. and V.L. Vignoles (Springer New York. 201 1). 305-27. 17. D. Dunning. C. Heath. and J.M. Suls ... ~1awed Self·A.~~ssment: Implications for Health. Educa- tion. and the Workplace." Psycht>lt>gical Science in
th•l’ublic lwmw5. no. 3 (2004): 69-106: D.A.
Moore. “Not So above Average after All: When
People Believe They Are Worse Than Average
and It~ Implications for Theorie..~ of Bias in Social
Comparison:· Orgaui:tuioual Belwdor and Human
Dedshm Pmcesses 102. no. I (2007): 42-58.
18. K.P. Cross … Not Can. but \Viii College Teach-
ing Be Improved?.” N~v Directions for Higher
Educatittr 14. no.
2 (201 1): 1 5~3: Hean & Stroke Foundation
(Canada). Deuia/ 1.1 Pulling Canaditms a1 High
R;.fk t>fCwting Tlte;r Li•~s Shon, Hean & Stroke
Foundation (Ottawa. ON: 201 1).
19. D. Gosselin et al .. “Comparative Optimism
among Drivers: An lntergenerational Portrait:·
Accitlem Analysis & Pret·em;ou 42. no. 2 (20 10):
734-40: P.M. Picone. G. Battista Dagnino. and A.
Min3. ··111e Origin of Failure: A Multidisciplinary
Appraisal of dle Hubris Hypothesis and Proposed
Re..~arch Agenda:· Academy of Mauagemem
Pu.O·
rate Resistance to Corrective Feedback:· Su’tlfegic
Managemr. eel. R.M. Sorrentino and E.1′. Higgins
(New York: Guildford. 1990).40&-48: W.B. Swann

Endnotes
Jr. P J. Rentfrow. and J.S. Gumn. “Self.Verifocation:
The Searcb for Coherence:· in Handbook of St/f
anti Identity. ed. M .R. Leary and J. Tagney (New
York: Guildford, 2002). 367-83: D.M. Cable and
V.S. Kay . .. Suiving for Self-Verification During
Organizational Entry;· At’itd~ml’ of Mauagemem
Joumal 55. no. 2 (2012): 360-80.
2 J. F. Anseel and F. LIC\cns. ”Certaml)’ as a
Modera1oroffeedbacl. Reacoons• A Tes1 of !be
Srrenglb of !he Self-Vcnfaoon Mollent is the
personality trait emotiOnal Slability. which wall
descnbed in Chapter 2. 1-f~C\”er. personality is a
behaviour 1enderocy. -.bereas core self-evaluation
uacludes only “e\·aJuatK)ft·fOC\lSed- \wiables.
There is also rec:en1 concern aboul “‘berber loc:us
of conrrol is pan of self-e>aluaoon. See R.E.
Johnson. C. C. Rostn, ond P.E. Levy. “Getting 10
the Core of Core Self·Evaluat1on: A Review and
Recommendations.·· }t),Jnral of Organi:t~tio11al
Behavior 29 (200&): 391-413: C.-H. Chang e1 al ..
·~core Self-Evaluation”: A Review and Evaluation
of the Literature,” J01mwl of Matlltgt!mem 38, no.
1 (2012): 81-128: R.E. Johnson et al .. ”Getting 10
!be Core of Locus of Con1rol. ls lt an E>·aluation of
!be Self or !he En>tn>nmIIS 80. no. I (1966): 1-28.
28. T.W.H. lolg. K.L. Sorenstn, and L.T. Eby.
“Locus of Conrrol a1 Work: A Meto-Analysis.”
lottr11al ofO~ani::tJtionnl Behmior 27 (2006):
1057-87: Q. Wang. N.A. Bowling. and KJ. Eschle-
man. “A Meta-Analytic E-Xami11ation of Work and
General Locus of Control.” Jmmwl of Applietl
Ps> 95. no. 4 (2010): 761-68.
29. GJ. Leonatdelli. C.L Picker~ and M.B. Brewer.
”()pumal Do-eness ‘Thplied l’s1·chology 101, no. 2 (2016): 222-36.
30. We descnbe relational s.lf..:onccpc as a form of
~al identity because such connecuon.s are inher·
cntly soc:QJ and !he dyads are l}pocally members of
a collecu>-e enul)’. For example. an emplo)-.e bas
a relatoonshop odentil)’ -..ilh ho.slher boos. bullht>
1\ connected to a social idenuty ~ ath lhe team or
depanment. However. rec~nt dL«”u,~ion suggests
1hot relational selr.concept may al~o be part of
pcr~onal identity or a separate fonn of self .. concept
See B.E. Aslofor~o. B.S. Schinnff. orod K.M. Rog-
el’ll, …. 1 ldentafy with Her:· “l lden1ify with Hun .. :
Unpacking !he Dynamics of Personal ldentofica-
hon 1n OIJ.anizations.- Acad~ml of Mano~tMnt
Rnik of
Sol’illl l’s)doolt>gy. ed. M.A. Hogg and J. Cooper
(Lnndon: Sage. 2003). 110-3&: S.A. liaslam aoxl
N. l::.llemers. “Identity Processe§ m Org.anlz.auons:·
m Jlandbook ofldt!niiry Th~on• and Rrs~arch. ed.
J.S. Schwartz. K. Luyckx. and LV. Vogoolcs
(N.,. York. Sponger :-lew York, 2011).715-44.
32.!11.R. f.dwatds. “Organizauonal ldentofocatoon:
A Conceptual and Opesaliooal Re\lew:· lnt 66. no. 2 (2012): 381-88: A. A11< e1 al .. "lmpocr of EmouonaJ Contexl Congruency on Deciston Matang under Ambaguity.- Emotion 13. 00. 2 (2013): 177-82. 37. Plalo. Tlw Republic. trans. D. l ee (Harmond· sworth, England: Penguin. 1955). 38. D.J. Simon" and C.F. Chabris. "Gorillas in Our Midst : Suqajncd lnattentional Blindness for Dynamic: E>enl<." P oce on “A Scandal on Bohemoa.” p. 189.
The Frank Cara case b descnbed in J . Rankin,
“A Falher’s Murder. ;uod tbe Telllale Heanbeal,”
Tommo Star, February 14. 2015. A I: J. Wiunebel.
“A Murdered F’athcr. De~Lroyed Reputations. nnd
a Family in Taucrs,” Osluth’O Express, April 15.
2015.

EN-12 Endnotes
42. C.N. Macrae and G. V. Bodenhau.view of Psychology 51 (2000): 93-120:
K.A. Quinn and H.E.S. Rosenthal. ··Categorizing
Otlters and the Self: How Social Memory Structures
Guide SociaJ Perception and Behavior:· Learning
and Moti1•mi/
Sport and Exercise 14. no. I (2013): 21-27. For a
disclL~~ion of cognitive closure and perception. see
A. Roet.~ et al . ‘1’he Motivated Gatekeeper of Our
Minds: New Directions in Need for Closure Theory
and Research.” in Adwmces iu Experimental Social
Psychoi<>gy. ed. M.O. Jrune.< and P.Z. Mark (San Diego. CA: Academic Press. 2015). 221-83. 44. J. Willis and A. Todorov ... First lmpre.~~;ions: Making Up Your Mind after a 100-Ms Expo.~;ure to a face:· Pryclwlogical St:ietU:t! 17. no. 7 (2006): 592-98: A. Todorov. M. Pakrashi. and N.N. Oo.sterhof. ··EvaJuating faces on 1'rustworthine.~~ after Minimal Time Exposure:· Soda/ Cogni· tion 21. no. 6 (2009): 813-33. For related research on thin slice.~. see D. Kahneman. 11Jinking Fa.fi and Slow (New York: Farrar. Strauss alld Giroux. 201 1): M.L Slepirut. K.R. Bogan. and N. Ambady. •7hin.Siice Judgments in the Clinical Context:· Annual Re,•iewofC/inical Psydwlogy 10. no. 1 (2014): 131- 53. 45. P.M. Senge. The Fiflh Discipline: The Art and Practict! oftht! Learning Organiz.ation (New York: Doubleday Currency. 1990). Chap. 10: T.J. Cher- mack ... Mental Models in Deci.~ion Making and Implications for Human Re.~ource Development.·· Ad~·ance.f in De,•eloping Human Resources 5. no. 4 (2003): 408-22: P.N. Joh~>i<>gy 86. no. 6 (2004 ): 862-79:
M.A. Hogg et aL ‘”The Social Identity Perspective:
Intergroup Relations. Self-Conception. and SmaiJ
Groops:· Small Group Researr:h 35. no. 3 (2004):
246-76: K. Hugenherg and D.F. Sacco. ··Social
Categorization a1xl Stereotyping: How SociaJ
Categorization Biase.~ Person Perception and Face
Memory:· Social and Personaliry Psychology
Com pas.< 2. no. 2 (2008): 1052-72. 52. N. Halevy. G. Bornstein. and L. Sagiv . .... ln· Group Love .. and "our-Group Hate .. as Motives for Individual Panicip.ation in intergroup Conflict: A New Game Paradigm:· Psychological Sdence 19. no. 4 (2008): 40~1 1: T. Yantagishi and N. Mifune. "SociaJ Exchange and Solidarity: In-Group Love or out.Group Hate?: · E~·olwhm and Human Behavior 30. no. 4 (2009): 229-37: N. Hale••y. 0 . Weisel. and G. Born.~tein . .. In-Group Love .. and .. out.Group Hate .. in Repeated interaction between Groups:· Journal of &harioral Decision Making 25. no. 2 (2012): 188-95: M. Parker and R. Janoff-Bulman. "Les.wns from MoraJity·Based SociaJ Identity: Tbe Power of Out group ··Hate:· Not Just Jngroup "Love .. : · Soda/ Jusiiu Research 26.no. I (20 13): 81-96. 53. T. Schmader and W.M. HalL "Stereotype 11treat in School and at Work: Putting Science into Prac. tice:· Policy ltuiglusfmm 1/Je Belwrioral and Brain St:ietlt:es I. no. I (2014): 30-37: C.R. Pennington et al.. "Twenty Years of Stereotype 1breat Research: A Review of Psychological Mediators:· PLoS ONE I I. no. I (2016): e0J46487. 54. 1'. Morbin. "Women in IT Security: Pushing at an Open DoorT' SC Magavne, July I. 2014. 55. C.A. Mos.~·Racusin et at .. ··Science facuhy·s Subtle Gender Biase.~ Favor Male Students:· Pm- ceedings of I he Nmional Academy (if Sciences 109. no. 41 (2012): 16474-79. 56. S.T. Fiske. ··Stereotyping. Prejudice. and Discrimination ... in Hand/x)(>k of !i<>dal Psydwl-
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Hewstone .. M. Rubin. and H. Willis . .. Intergroup
Bia~:· Annual Revi~w of Psycltology 53 (2002):
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tmd D;scr;minmion. ed. Todd D. Nelson (New
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cimioll. lmerumimwl A.uodation (if Fire Fighiers.
Local 255, wiiit Respec”/ 10 a Grievance by Charles
Hendricks. 47218 Canadian LegaJ infonnation
Jnstirute(2012): ···we Failed You. We Hun You·:
Text of Apology from RCMP Commissioner Bob
PauJson: · Cfmadian Press (Ouawa).
7 October20 J6.
58. J. Dawson. S. Natella. and R. Ker.gist28 (1973): 107-28.
62. D. Lange a1xl N.T. Washburn . .. Understanding
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bution is an incomplete theory for understanding
how people determine causation and a.~~ign blame.
See S.A. Sloman and D. Lagnado. “Causality in
Thought:· Annual Review of Psychology 66. no.

End n o tes
I (20 15): 223-47: M.D. Alicke et al.. ··Causal
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63. J.M. Cram and l .S. Bateman … A.~~;ignment of
Credit and Blame for Performance Outcomes.··
Academy of Managemem lou mal 36 (1993):
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Theories of Motivation from an Anributional
Perspective:· EducaJimwl Psychology Review 12
(2000): 1-14: N. Bacon and P. Blyton. “Worker
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J. Shepperd. W. Malone. and K. Sweeny. “Explor-
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895-908.
65. E. W.K. Tsang … Self-Serving Attribution.~ in
Corporate Annual Report<: A Replicated Study:· Journal of Managemeur Swd;es 39. no. I (2002): 5 J-65: N.J. Roese and J.M. Olson. "Better. Stronger. faster: Self-Serving Judgment. Affect Regulation. and the Optimal Vigilance Hypoth- esis:· Perspecli\•es on Psychological Scienu 2. no. 2 (2007): 124-41: R. HooghienL-21.
66. S.S. Van Dine (Willard Huntington Wright).
11Je Benson Murder Mysrery (New York: Charles
Scribner’s Sons. I 926). Chap. 6.
67. D.T. Gil hen and P.S. Malone. ”The Corre-
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68. I. Choi. R.E. Nisbett and A. Norenzayan.
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71wuglu: How Asia11s and Weslt!rners Think Dif-
femuly- and \Vhy (New York: Free Press. 2003).
Chap. 5: S.G. Goto et al.. “Cultural Differences in
Sensitivity to Social Context Detecting Affective
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69. B.F. Malle. “The Actor-Observer A.gical Bulletin 132. no. 6 (2006): 895-919:
C. W. Bauman and L.J. Skilka . .. Making Attribu-
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269-77.
70. Similar models are presented in D. Eden.
··Self-Fulfilling Prophecy as a Management Tool:
Hamessing Pygmalion:· Academy of Mauage-
melll Review9 (1984): 64-73: R.H.G. Field and
D. A. Van Serers. ··Management by Expectations
(Mbe): 1’l1e Power of Positive Prophecy:· Journal
of General Management 14 (1988): 19-33: D.O.
Trouilloud et aL .. The influence of Teac.her Expec-
tations on Student Achievement in Physical Educa-
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“Pygmalion Goes to Boot Camp: Expectancy.
Leadership. and Trainee Performance:· Joumal
of Applied l’sychology 67 ( 1982): I 94-99: C.M.
Rubie-Davies. ·1″eacher Expectations and Student
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dwlogy in the Schm>ls 43. no. 5 (2006): 537-52:
P. Whiteley. T. Sy. and S.K. Johnson. “Leaders
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74. S. Madon. L. Jussim. and J. Eccles. ··in Search
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75. H. A. Wilki~Lgy 63. no. I
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76. W.H. Cooper. “Ubiquitous Halo.” l’sydwlogi-
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TIJe Halo Effui . . . And the Eight Oi/Jtr Business
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Halo and Ceiling EftOCt~ in Student Evaluations
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77. B. Mullen el al .. “‘The False Consensus Effect
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55:>-65.
78. E.A. Lind. L. Kray. and L. Thompson.
“Primacy Effect~ in Justice Judgment~: Testing
Predictions from Fairne.~~ Heuristic Theory.··
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8 1. Eden. D. “Self-Fulfilling Prophecy a.< a Management Tool: Harne.~ing Pygmalion .. : S.S. White and E.A. Locke ... Problem.~ with the Pygmalion E-ffect and Some Proposed Solutions:· Leadership Quarterly I I (2000): 389-4 I 5. 82. J. Wat~n. "When Diversity 1'raining Goe.~ Awry:· Black b sues in Higher Educarion. January 24. 2008. I I : E.L. Paluck and D.P. Green. .. Prejudice Reduction: What Works? A Re\riew and Assessment of Research and Practice:· Annual Review ofl'syclwlogy 60. no. I (2009): 33~7: M.M. Duguid alld M.C. 1ll0mas-Hunt. "'Condoning Stereotyping? How Awareness of Stereotyping Prevalence Impacts Expre.~~ion of Stereo- types:· Journal of Applied Psychology 100. no. 2 (20 15): 34:>-59: L.M. Brady et al.. “It’s Fair for Us:
Diversity Structures Cause Women to Legirimize
Discrimination:· Journal of Experimeural Social
l’.rychology 57 (20 15): 100-10: F. Dobbin and
A. Kalev. “Why Diversity Programs fait·· Han:arrl
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83. T. W. Costello and S.S. Zalkind. l’.rychology in
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87. J. Luft. OfH,manlmertu:liott (Palo Alto. CA:
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see J. HaJJ. “Communkation Revishoo:· California
Mtmagemem Review 15 (1973): 56-67. For recent
discll~~ion of the Johari blind spot. see AAvt.B.
GaUrein et al.. “You Spy with Your Little Eye:
People Are ‘Blind· to Some of the Ways in Which
They Are Consensually Seen by Others:· Journal of
Research in Personality47. no. 5 (2013): 464-71:
A.-M.B. Gallrein et al .. “I Still Cannot See It-a
Replication of Blind Spots in Self-Perception …
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88. S. Vazire and M.R. Mehl. “Knowing Me.
Knowing You: 1be Accuracy and Unique Predictive
Validity of Self-Rating.< and Other-Ratings of Daily Behavior ... Joumal of PersonaUry and Social Psychol- ogy95. no. 5 (2008): 1202- 16: D. Leising. A.-M.B. GaUrein. and M. Dufner. "Judging the Behavior of People We Know: Objective Asses.~;menL Confimta- tion of Preexisting Views. or Both?:· Personality and Social l'sych<>logy Bulletin 40. no. 2 (2014): 15>-63.
89. T.F. Pettigrew and L.R. Tropp. “A Meta-Ana-
lytic Test of Intergroup Contact Theory:· Joumal of
l’ersonalify and Social l’.rych<>logy 90. no. 5 (2006):
751-83: Y. Amichai-Hantburger. B.S. Hasler. and
T. Shani-Shennan. ··Structured and Unsttuctured
Intergroup Contact in the Digital Age:· Computers
in Human Belw.-ior 52 (2015): 515-22.
90. l’lle contact hypothesis wa~ first introduced in
G. W. Allpon. Tlte Nature of Prejudice (Reading.
MA: Addison-Wesley. 1954). Chap. 16.
91. K. Grimmell. “People Behind Success of Pulp
and Paper Miu:· Peace Rh·er Reconl-Gaz.eue.
14 September2010.
92. W. Danielson. ”A Preview of the front-Line
Leader with Chris Van Gorder:· Podcalit in Tlte
Emrepreneur’s library. (3 November 2014).
23:44:00: I. MacDonald. “Leading the Way:
Scripps Health CEO Takes Hands-on Approach to
FrontJine Staff Engagement.” FierceHealthcare.
9 April2015: C. Van Gorder. Th< Front-lin< Leader: Building a High-Performance Orga- nizat;onfmm the Ground Up (San Francisco: Jossey-Bass. 201 5): C. Van Gorder. ··seven Simple Strategie.~ for frontline Leaders:· USCPrice (Los Angeles: University of Southern Califomia. 3 February 201 5). http://exechealthadmin.usc.edu/ blog/seven-simple-strategies-for-frontline.leaders (acce.<-gical Science 23. no. 9 (2012):
97:>-78: J.L. Skorinko and S.A. Sinclair. “Perspec-
tive Taking Can lncre.a.~e Stereotyping: The Role
of Apparent Stereotype Confirmation: · Journal of
Experimelllal Social Psychology 49. no. I (2013):
10-18.
95. A. Sugimoto. ”English Is VitaL Rakuten Boss
Says. but It Isn’t Everything:· NUd:ei Weekly
(Tokyo}. 22 April2013: H. Mikitani. “Why Japan·s
Top £.Shopping Site Use.~ English a~ Company
Language:· EJ ltrsiglu. 22 April2016.
96. There is no consensus on the meaning of global
mindset. The elements identified in this book are
common among mo.lit of the recent \\Titing on this
subject. See. for example: S.J. Black. W.H. Mobley.
and E. Weldon. ”The Mindset of Global Leaders:
lnquisitivene.~~ and Duality: · in Ad\’lmt:e.1 in Global
uadership (JAI. 2006). 181-200: 0. Levy et
al.. “What We Talk About When We Talk About
‘Global Mindsef: Managerial Cognition in Multina-
tional Corporation.~:· Journal of lmtrn(Jfimwl
Business Studies 38. no. 2 (2007): 231-58: S.
Beechler and D. BaltzJey … Creating a Global Mind-
set:· Chief uaruing O!Jicer 7. no. 6 (2008): 40-45:
M. Javidan and D. Bowen. ··The ‘Global Mindsef
of Managers: What It Is. Why It Matters. and How
to Develop tt•• Organizational Dynamics 42. no. 2
(2013): 14>-55.
97. A.K. Gupta and V. Govindarajan. “Cultivating a
Global Mindset:· Academy of Managemtlll Exeett·
til·e 16. no. I (2002): I 16-26.
98. T. Maak. N.M. Pless. and M. Borecka. “Devel-
oping Responsible GlobaJ Leaders. ·· Ath·ances in
Gl<>bal uadersltip 8 (2014): 339-64: P. Caligiuri
and C. Thoroughgood. ··Developing Responsible
Global Leaders through Corporate-Sponsored Inter-
national Volunteerism Programs.” Organizmimwl
Dynamics 44. no. 2 (2015): 138-45.
99. A. Kumar. “IBM Corporate Citizenship Team
in Action in Kuching. Malaysia:· CIO Asia.
12 October 2012.
100. M. Glynn . .. Putting Business Skills to Work-
in a Brazilian Rainfore.~t:· Buffalo News. 9 August
2015: S. McCabe. –2016 EY-E.anhwatcb Ambassa-
dors Program Donates 3.000 Hours of Research to
BraziL Mexico:· Accouming Today. 8 July 2016.
CHAPTER4
I. Earls Restaurant~. ··r he E.arl~ Experience:·
( YouTube. 26 May 20 14 ). hnps://www. youtube.
com/watch?v=_ebxi8gQc60. Video (accessed 4
.February 20 17): Earls Restaurant~. Earls Kitdttll
+ Bar: 71te Leadership Log. (Vancouver: 14
August 2015): Gias.ttr Organizmiou (Boise. Idaho: Elevate.
2016). pp. 167-70. Some employee quotations are
from the web site.~ indeed.c:a and gla.~lidoor.ca.
2. Emotions are also cognitive proce.~~;es. However.
we use the narrow definition of cognition as a well-
used label referring only to reasoning processe.~.
Also. this and other chapters empha~ize that emo-
tional and cognitive proce.liSe.~ are intertwined.
3. For discussion of emotions in ntarketing.
economics. and sociology. see: M. Hubert. “Does
Neuroeconomics Give New Impetus ro Economic
and Consumer Research? … Jounwl of Economic
Psydwlogy31. no. 5 (2010): 812-17: D.O. Frank.<. Neurosociology: The Nexu.f be1wceu Neuroscience tuul Social Psychology lturoductimt. Neurosociology: 1'he Nexus between Neuroscience and SociaJ Psychology (New York: Springer. 2010): N. Marti~L<. "Can Neuroscience lnfonn Economic.~? Rationality. E.moti011.~ and Prefere11ee Formation.·· Cnmbritlge lou mal of Econ<>mics 35. no. 2 (20 I I ): 251–67:
H. Plassmann. T.Z. Rams0y. and M. MiJosavljevic.
“Branding the Brain: A Critic-.al Re\•iew and
Outlook:· Journal of Consumer P.ryclwlogy 22. no.
I (2012): 18-36.
4. AJthough definitions of emmhm vary. the
definition stated here seems to be the most widely
accepted. See. for example. N.H. Frijda … Varieties
of Affect: Emotions and Episodes. Mood~. and
Sentiments: · in 17te Nmure of Emotimt: Fundamental
Question.f. ed. P. E.kntan and R.J. Davidson
(New York: Oxford University Press. 1994). 59–67:
H.M. Weiss. “Conceptual and Empirical foundation.~
for the Study of Affect at Work:· in Em01ions in 1he
IV<>rkplace. ed. R.G. Lord. R.J. Klimoski. and
R. Kanfer (San Francisco: Jos.-62.
7. R.J. Larson. E. Diener. and R.E. Lucas. “Emotion:
Models. Mea.~ure.~. and Difference.~:· in Emmhm.f
iu 11te Workplace ed. R.G. Lord. R.J. Klimoski.
and R. Kanfer (San francisco. CA: Jossey-Bass.
2002). 64-113: L.J’. Barrett et al.. ”The Experience
of Emotion:· Annual Rerit!W of Psychology 58. no.
I (2007): 37:>-403: M. Yik. J.A. Rus.n II. no. 4 (201 1): 705-31.
8. R.J’. Baumeister. E. Bratslavsky. and C. Finke-
nauer . .. Bad Is Stronger 1ban Good:· Rel’iew of
General l’.rychol<>gy 5. no. 4 (2001): 32:>-70:
A. Vaish. l . Grossmann. and A. Woodward … Not
AU Emotion.~ Are Created Equal: The Negativiry
Bias in Social-Emotional Development ..

Endnotes
Pn-chologirol Bull.rm IJ.I. no. 3 (2008): 383-403:
R.H. Fazio et aL ··Posau”·e Versus Negative
Valence: Asymmetnes an Attitude Formation and
GeneraJization a..~ Fundamental Individual Differ.
ences:· in Ath·ancts itr E.Apttriml’ulbl Social Psy·
t·hology. ed. J.M. Olson and M.P. Zruma (Academic
Press. 2015). 97- 146: K. Bcbb11\glon et al.. “The
Sly Is Falling: Evidence of a Negativlly Bias in the
Social Transmission of lnform:n10n. ·· £•’0/wi.bn
and Human Beiltn-iOI’ 38. no. I (2017): 92-101.
9. A.P. Brief.Anitudts In cmd around Organi;..arions
(Thousaod Oaks. CA: Sage. 1998): A.H. Eagly
and S. Chaiken . .. The Advantages of an Inclusive
Definition of Attitude:· Socit,J Cog,iii()lf 25. no.
5 (2007): 582-602: G. Bohner and N. Dickel.
“Auirudes and Attilude Change,” AmwtJI Rev;ew
of Psychology 62. no. I (201 1): 391-417. The
definition or attitudes is ~ull being debated. First.
11 is unclear \\’hether an attitude includes emotions
(affect). or \\ hetber emoiJOns tnfluence an ani rude.
We lake !he Iauer •-· Ahhough emooons influ-
ence and are closely connected to amtudes. an atU·
IUde is best defined as an C\ aluataon of an anitude
object That evaluation i.s llOt always conscious.
however. Second. a few writers argue that attitudes
are formed each lime they think about the attitude
object which is contr.try to che troditionaJ view that
attitudes are fairly stable predi,.pos11ion.~ tov.·ard the
alii rude objecL Tlurd. although less of an issue now.
some anirude models refer only to the “feelings-
component. “hereas “””e ‘~ a111mde as a three-
component construct (behcf>. feebng<. behaviounl 1ntentions). Few \'atiO'.b defimuons of attitude and d1scussion of these ,'af'iauont. see I. Ajzen. "Nature and Operation of Attitude~ ... Amwal Review of Psychology 52 (2001): 27-58: 1). Alharracln el al.. "Attitudes: introduction and Soor)e." in nu: Handbook of Aui~~gnitiw• Sdmus II. no. 3 (2007): 97-1~: B.
Gawronski. “Ed•tonal. Allllude< Can Be Measured! But What ls an Attitude? ... Socil,/ Cogn;tion 25. no. 5 (2007): 573- 81: R.S. Dalal. "Job Allirudes: Cognilion and Affect." m Htwlbook of Psychology. Secmul Ellition (John Wiley & SOl><, Inc .. 2012). 10. Neuroscience has a slightly more complicated distinction in that conscaou~ awareness is .. feeling a feeling .. whereas ••feeling" I S a nonconscious sensing of tbe body iUle ern~ b) emcxion. "tuch ttself is a nCfiStS reported by sa-eral ocloolars. as
~ell as tact I k:ntw.1edge. suuctUJ’e). See WJ. Bed:t-:r
and R. Cropanzano. “Orgaruz.auonal Neunxci-
co>ee: The Pmmose and Prospects of an lllnergong
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End no tes
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El has a significant but modest correlation with
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58. 1’reasury Board of Canada. 2014 Public Sert·ice
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EN-17
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Voice. and Loyalty with Multiple Exit Options:
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66. J.D. Hibbard. N. Kumar. and L.W. Stem. ··Exam-
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. ;When Job Di.~atisfaction Lead.~ to Creati\rity:
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.. Breaking the Silence: The Moderating Effect~ of
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Other studies report stronger correlations with
job performance when botll the belief and feeling
components of job satisfaction are consistent with
each other and when overaJI job attitude (satisfac-
tion and commitment combined) is being measured.
See D.J. Schleicher. J.D. Wan. and GJ. Greguras.
··Reexamining the Job Satisfaction-Performance
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HarTison. Newman. and Roth. “How lmponant Are
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consistent with emerging research on the outcomes
of positive organizational behaviour. for example.
see: J .R. Sunil. “Enhancing Employee Performance
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108. Lazarus. Sn-ess and Emmimt: A New Syutht!·
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CHAPTER 5
I. R. Yerema and K. Leung. ··Desjardins Group:
Recognized as One ofCanada”s Top 100 Employ.
ers (201 7):· Canada·s Top 100 Employers 2017,
Mediacorp Canada. 6 November2016. http://con.
tent.eluta.c.altop-employer.desjardins: “‘Canada·s
Be.~t Employers 2017 :· Cantulitm Business.
December 2016. 27-29. 31-33. 37. 39: ··vancity
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Leung. “Desjardins Group: Recognized as One of
Canada·s Top Employers for Young People (2017):·
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2. C. C. Pinder. \York Mmi\·aiion in Organizational
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Actulemy of ManagemeUI Re”·iew 29 (2004):
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3. W.H. Macey and B. Schneider. ··The Mean-
ing of Employee Engagement:· 1nd11S1rial and

Endnotes
Organiuuimwll’sychology I (2008): J-30: A.M.
Saks and J.A. Gruman. ··What Do We Really Know
about Employee Engagement?:· Human Resource
Dnelopme111 Q .. amrly 25. no. 2 (2014): 155-82.
4. D. Macleod and N. Clarke. Engaging for S”ccess:
Elllumciug Performtmc~ through Employee Engage-
men/ (London: UK Govenunent. Depanment for
BlLyu Engage-
melll (Chic-.ago: Aon Hewitt April 26. 2014):
Deloitte. Human Capiwl Trends 2016: Out of
Sync?. (Toronto: Deloitte. 6 May 20 I 6): .. Canadian
Organizations Struggle to Engage Employees:·
News release for Conference Board ofCal\ada
(Ottawa: Canada News Wire. 13 July 2016).
7. Several sources attempt to identify and organize
the drivers of employee engagement. See .. for
example: D. Robinson. S. Perryman. and S. Hayday.
111e Dri\•ers of Employee Eltgagement. Institute
for Employment Studie.<. (Brighton. UK: 2004): W.H. Macey et aL Employee Engagemem: Tools for Analysi.f. Prac1ia. and Cmnpelitive Admmage (Malden. MA: Wiley-Blackwell. 2009): Macleod and Clarke. Engaging for Success: Enhtmt:ing Performance through Employee Engagemem: M. Stairs and M. Galpin. "Positive Engagement: From Employee Engagement to Workplace Happi- ness:· in Oxford Handbook of Posi1ive P.f)t:hology of Work. ed. P.A. Linley. S . HarTington. mxl N. Garcea (New Yo1·k: Oxford University Press. 201 0). 155-72. 8. 1be confusing array of definition.~ about drives and lleeds has been the subject of criticism for a half cenrury. See. for example. R.S. Peters. ··Motive.< and Motivation:·l'hilosophy 31 (1956): 117-30: H. Cantril. "Sentio. Ergo Sum: 'Motiva- tion· Reconsidered:· Journal of Psychology 65. no. I (1967): 9 1-107: G.R. Salancik and J. Pfeffer ... An Examination of Need-Satisfaction Models of Job Attitudes:· Administrative Scietlt:e Quanerly 22. no. 3 ( I 977): 427-56. 9. D.W. Praff. Dri\'t': Neurobiological and Molecular Mechanisms (if Sexual Moth·mimt (Cmnbridge. MA: MIT Pres.<. 1999): A. Blasi. ··Emotions and Moral Motivation:· Journal for the 11Jeory of Socia1Behaviour29. no. I (1999): 1-19: T.V. Sewards and M.A. Sewards. ··Fear and Power- Dominance Drive Motivation: Neural Repre- sentations and Pathways Mediating Sensory and Mnemonic inputs. and Outpuls to Premotor Struc- ture.~:· Neuroscietlt:e and Biobehaviorol Reviews 26 (2002): 553-79: K.C. Berridge. ··Motivation Concept~ in Behavioral Neuroscience:· Physiology & BehOI'ior 81. no. 2 (2004): 179-209. We dis- tinguish drives from emotions. but future research may find that the two COilCept~ are not so differenl a~ is stated here. Woodworth is credited with either coining or popularizing the term "'drive.~·· in the context of human motivation. His classic book is certainly the first source to discus..~ the concept in detail. See: R.S.Woodworth. Dytltlmic Psychoh>gy
(New York: Columbia University Press. 1918).
10. G. Loewenst.ein. ··The Psychology of Curiosity:
A Review and Reinterpretation.” Psycltoh>gical
Bulletin 116. no. I (1994): 75-98: A.E. Kelley.
“Neurochemical Networks Encoding Emotion
and Motivation: An Evolutionary Perspective:·
in \Vho Needs Emotions? Tlte Brain Meets 11te
Robot. ed. J.M. Fellous and M.A. Arbib (New
York: Oxford University Press. 2005). 29-78: M.R.
Leary. “Motivatiol\al and Emotional Aspect~ of
the Self:· Annual Review of Psychology 58. no. I
(2007): 3 I 7-44: L.A. Leoni. S.S. Iyengar. and K.N.
Ochs1ler. ··Born to Choose: 1lle Origins and Value
of the Need for ControL” Tn11ds in Cognifh·e Sd-
ences 14. no. 10 (2010): 457-63.
I I. K. Passyn and M. Sujan. ··Self-Accountability
Emotions and fear Appeals: Motivating Behavior:·
Journal ofComumer Research 32. no. 4 (2006):
58:>-89: S.G. Barsade and D.E. Gibson … Why
Does Affect Maner in Organizations?:· Academy of
Management Perspectives 21. no. 2 (2007): 36-59.
12. A.R. DanJaSio. 77., Feeling of IVIIIlt Happ1!1L<: Body ami Emotion in1he Making ojC"onseiOtt.fness (New York: Harooult Brooe & Company. 1999). p. 286. 13. S. Hitlin. ··Value.~ as the Core of Personal Iden- tity: Drawing Links between 1\vo Theorie.~ of Self:· Sociall'sychoi<>gy Quarterly 66. no. 2 (2003):
I JS-37: B. Monin. D.A. Pizarro. and J.S. Beer.
“Deciding Versus Reacting: Conceptions of Moral
Judgment and the Reason-Affect Debate:· Reriew
ofGenemll’syclwi<>gy I I. no. 2 (2007): 99-J I 1:
D.O. Knoch and E.E. Fehr. ··Resisting the Power
of Temptation.~. 1lle Right Prefrontal Conex and
Self-Control:· Annals of the New York Academy of
Sciences I 104. no. I (2007): 123.
14. A. H. Ma.ee.
··Maslow: Man Interrupted- Reading Manage-
menl 1lleory in Context·· Managemelll Dedshm
43. no. 10 (2005): 137>-95.
19. A.H. Ma~;low. “‘A Preface to Motivation
Theory:· l’.rydwsomatic Medicine 5 ( I 943): 8>-92.
20. S. Kesebir. J. Graham. and S. Oishi … A Theory
of Human Needs Should Be Human-Centered. Not
Animal-Centered·· Per.fpetlires 011 Psychological
Science 5. no. 3 (2010): 315-19.
2 1. A. H. Ma~;low. Maslow on Managemem (New
York: John Wiley & Sons. Inc .. 1998).
22. M. Gagne and E.L Deci. ··Self-Determination
Theory and Wo1·k Motivation:· Journal (if Organi-
UJtional Belw,.ior 26. no. 4 (2005): 33 J-62: C.P.
Cerasoli. J .M. Nicklin. and M.T. ford. ‘”Intrinsic
Motivation and Extrinsic Incentives Jointly Predict
Performance: A 40-Year Meta-Analysis:· Ps)t:ho-
logicaiB .. IIerin 140. no. 4 (2014): 980-1008.
23. 0 . Thomas. “‘HO\v Airbnb Manages Not to
Manage Engineers:· readwrile. June 5. 2014: M.
Curtis. “‘Tbe Antidote to Bureaucracy Is Good
Judgment:· Airbnl> News. Airbnb. May 15.2015.
lmp://nerds.airbnb.comhhe-antidote-to-bureau-
cracy-is-good-judgementl. Employee quotations are
from Glassdoor in2015 and 2016.
24. M. Gagne and D. Shave. ··Autonomy in the
Workplace: An E.~~ntial Ingredient to Employee
Engagement and Well-Being in Every Culture.”
in Human Autonomy in Cross-Culwrol Conrex1. ed.
V.I. Chirkov. R.M. Ryan. and K.M. Sheldon. Cm.-87: E.L. Deci and M.R. Ryan. ·111e
Importance of Universal Psychological Need~ for
Understanding Motivation in the Wo1·kplace … in n1e
Oxfonl Htmdlx’H>k of \York Engagemem. MOii\’llliOtl,
ami Self-Delerminmiott Theory. ed. M. Gagne
(New York: Oxford University Press. 2014). 13-32.
25. A. Kohn. Punished l>y Rewartlf (Bost.on:
Houghton Miffiin. I 993): C.C. Pinder. \York Moti-
‘ ‘ation in Organiz.ational Behavior. 2nd ed. (New
York: Psychology Pre.<-<. 2008). Chap. 3. 26. C.C. Pinder. \York MOihtJiiOil in Organi:.a1ional Behavior (Upper Saddle River. NJ: Prentice HaJI. 1998). 86-91: C.P. Cerasoli. J.M. Nicklin. and M.T. Ford. "intrinsic Motivation and Extrinsic Incentives Jointly Predict Perfonnance: A 40-Year Meta-Analysis:· Psydwlogical Bulle1in 140. no. 4 (2014): 980-1008: Y. Garners and U. Konrad<. ··The Effect of financialllx:entive.~ on Perfor- mance: A Quantitative Review of individual and Team-Ba.~d Financial Incentives:· Journal (if Occupa1imwl and Organiz.ational Psychology 87. no. I (2014): 102-37. 27. J. Schroeder and A. Fish bach. ··How to Moti- vate Yourself and Others'? Intended and Uninlended Consequences:· Research in Organi!alional Behav- ior 35 (2015): 12:>-41.

EN-22 Endnotes
28. D.C. McClelland. 77~< Ad!ie~·ing S.>ciety
(New York: Van Nostrand Reinhold. 1961): D.C.
McClelland and D.H. Bumham … Power Is the Great
Motivator:· Harwml Bus;ness Revit!w 73 ( 1995):
126-39: D. Vredenburgh andY. Brender. “11te
Hierarchical Abuse of Power in Work Organiza.
tions:· Journal of Busines.f Erltics 17 ( 1998):
1337-47: S. Shane. E.A. Locke. and C.J. Collins.
.. Entrepreneurial Motivation:· Human Resouru
Mtmagemem Review 13. no. 2 (2003): 257-79.
29. D. C. McClelland. 71.e Achie.-ing !i<>ciety (New
York: Van No.<>rwnilies in 2013.
Randstad Canada (Toronto. ON: October 2013).
42. Expectancy theory of motivation in work
settings originated in V.H. Vroom. Work and Mot;.
•·aJiOtl (New York: Wiley. 1964). 1’l1e version of
expectancy theory presented here was developed by
Edward Lawter. Lawler’s model provides a clearer
presentation of the moders three component~.
P-to-0 expectancy is similar to .. instnunentality ..
in Vroom ·s original expecta1x:y theory model. The
differe1x:e is that instrumentality is a correlation
wherea.~ P·to.O expectancy is a probability. See
J.P. Campbell et aL. Mauagerifll Behtn:ior. l’erfonnauce.
and Effectil~ness (New York: McGraw-Hill. 1970):
E. E. Lawler IU. Mmiwu;on in Work Organiwrhms
(Monterey. CA: Brooks-Cole. 1973): D. A. Nadler
and E.E. Lawler … Motivation: A Diagnostic
Approach:· in Perspecli\>e.f on Behavior in Orga-
lli:tuions. ed. J.R. Hac.kman. E.E. Lawler 111. and
L. W. Porter (New York: McGraw-HilL I 983).
67-78.
43. M. Zeelenberg et al.. .. Emotional Reactions to
the Outcontes of Decisions: The Role of Coun.
terfactual Thought in the Experience of Regret
and Disappointment:· Orgtmi:tuional Beharior
and Human Dedshm Processes 75. no. 2 (1998):
117-41: B.A. Mellers. ·-choice and the Relative
Plea~ure of Consequence.~:· Psyclwlogical Bul-
letin 126. no. 6 (2000): 910-24: R.P. Bagozzi.
U.M. Dholakia. and S. Ba.wroy. ··How Effortful
Decisions Get Enacted: The Motivating Role of
Decision Processes. Desires. and Anticipated
Emotion.~:· lou mal of Behavi()rtJI Deci.~;on Making
16. no. 4 (2003): 273-95. The neuropsychology
of valences and ilS as.~ociated .. expected utility”” is
discussed in: A. Bechara and A.R. Dama.~io. ··The
Somatic Ma1·ker Hypothe.~is: A Neural Theory of
Economic Dec.ision:· Game.1 and Economic
Beha••ior 52. no. 2 (2005): 336-72.
44. Nadler and Lawler. “Motivation: A Diagnostic
Approach:· pp. 70-73.
45 . .. New Research Shows Widening Gap between
Pay and Perfonnance in UK:· news relea.~
(Lo1ldon: Willis Towers WalSon. September 25.
20 14): United State.~ Office of Personnel Manage-
ment. Federal Employee Viewpoim Sun·ey Re.~ults.
Office of Personnel Management (\Va.~hington.
DC: 201 5). Treasury Board of Canada Secretariat.
“2014 Public Service Employee Survey Resull< by Question for the Public Sen•ice ... Public Service Employee Suf\'t'Y (Ottawa: Government of Canada. 20 May 2015) (accessed 14 Marcll2017): Willis 1'0\vers Watson. Under Pnss1u-e to Remain Relewmt. Employers Look 10 Modern;:,e the Employee Value Proposition. (London: Willis Towers WalSon. 9 Sep lmpro•·e Human Per-
formance (New York: Harper & Row. 1978). pp.
48-57: F. Luthans and R. Kreitner. Organiz.ational
Belta\•ior Modificmion aJUI Beyond (Glenview. JL:
ScotL Foresman. 1985). pp. 85-88.

Endnotes
52. B.F. Skinner. Sdenc~ and Human Behavior
(New York: 1lle Free Press. 1965): Miltenberger.
Behavior Modijicarion: Principles and Proc:·edures.
Chap. 4-6.
53. T.R. Hinkin and C.A. Schriesheim … If You
Don’t Hear from Me You Know You Are Doing
Fine:· Cornell Horel & Resumnwr Admiuislratiou
Quarterly 45. no. 4 (2004): 362-72.
54. L.K. Trevino. ·111e SociaJ Effects of Punish-
ment in Organizations: A Justice Perspective:·
Academy of Managemem Review 17 ( 1992): 647-
76: L.E. Atwater et aJ .• ··Recipient and Observer
Reactions to Discipline: Are Managers Experienc-
ing Wishful Thinking?:· Journal oJOrganiuuional
Behavior22. no. 3 (2001): 249-70.
55. G.P. Latham and V.L. Huber … Schedules of
Reinforcement: le.~wns from the Past and L~~ues
for the future:· Jmmwl oJOrganiuuional Belta\•ior
Managemew 13 (1992): 125-49: B.A. Williams.
”Challenges to Timing-Based Theorie.~ of Operant
Behavior:· BeluwiourtJI PJVCesses 62 (2003):
115-23.
56. K. Robson et al.. .. Is It All a Game? Under-
standing the Principle.~ of Gamification.·· Business
Horiuglu
and Act;on: A Soc;al Cogttirive 111eory (Englewood
Cliffs. N.J: Prentice Hall. 1986): A. Bandura.
··Social Cognitive Theory of Self-Regulation.··
Organiwrional &hal’ior and Human Dedshm
Pmce.gy 136. no. 3 (2009): 271-86.
61. A. Pe_o;curic and W.C. Byham … The New Look
of Behavior Modeling:· Training & De1-·elopmem
50 (1996): 24-30.
62. A. Bandura … Self-Reinforcement: Theoretical
a1ld Methodological Considerations: · Beha\•iorism
4 ( 1976): 135-55: C.A. Fr3)1le and J.M. Geringer.
.. Self-Mallagement Training for Improving Job
Performance: A Fiekl Experiment involving Salespeo-
ple:· Joumal of Applitxl Psychology 85. no. 3 (2000):
361-72: J.B. Vancouver and D.V. Day … bldustrial
and Organisation Research on Self-Regulation: From
Constructs to Applicatio~L<:· Applied Psychology: till buenuuional Journal 54. no. 2 (2005): 155-85. 63. City of Toronto. Budget20J6: lmerual and Ftuau- cial Sen·ices: 311 TOIT)IUO. (Toronto: Ciry of Toronto. 20 16): City of Toronto ... Performance Reports: 311 Toronto:· (foronto: City of Toronto. 20 17). http:// wwwl.toronto.ca (acceack Flows (San Jose. CA:
Adobe Systems. 2014). YooTube video: A. Fisher.
..How Adobe Keeps Key Employees from Quit-
ting:· Forume. June 16. 2015: P. Cappelli and A.
Tavis. “‘The Perfonnance Management Revolution:·
Han:arrl Bus;ness Re,•iew 94(201 6): 58-67: D.
Morris … 2017: The Year Performance Reviews
Get the Axe:· Com·ersa1ions. Adobe System.~.
1 I January 2017. https:/Jblogs.adobe.com/convers.a-
tions: D. Morris … Yes. You Can Reward Employ-
ees without Ratings and Rankings:· Com-ersations.
Adobe Systems. 16 February 2017. https://blogs.
adobe.comlconversations.
73. P. Drucker. J11e Effet:~il·e Executh·e (Oxford.
UK: Buuerwonh-Heinemann. 2007). p.22.
Drucker·s emphasis on strenglhs was also noted in
O.K. Whitney and A. Trosten-Bioom. 11ae Power of
Appndath·e Inquiry: A Practical Guide to Posiri••e
Change. 2nd ed. (San Francisco. CA: Berrett-
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14. M. Hock and H.W. Krohne … Coping with
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Endnotes
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ciation of Professional Executives of the Public
Service of Canada (May 15. 2015).
84. C. Porath. ‘1be Leadership Behavior That’s
Most lmponant to Employees:· Han·ard Business
Rniew (May I I. 2015).
85. T. Peters. ··The Brand Called You:· Fast Com-
pany. August 1997: J. Sills. ··Becoming Your Own
Brand:· l’sychology Today 4 1. no. I (2008): 62-63.
86. Building Your Brond: Persmwl Brand
\Veek. PricewaterhouseCoopers Canada. Retrieved
from: http://www.pwc.com/ca/en/campu.~·recruit·
ing/publications.lpwc.personal.brand.week·e·book·
2012-03-en .
87. C. Shea. “HGTV star Scott McGillivray on
building a real estate and TV empire.” Canadian
Busines.f. May 6. 2016. http://www.canadianbusi·
nes.~.com/leadershiplscott·mcgillivray.income.
property/: author interview.
88. D. Strutton and L~ Pelton … E.fti!cts of lngratia·
tion on Lateral Relationship Quality within Sale.~
Team Settings:· Journal of Business Research 43
(1998): 1-12: R. Vonk. ··Self-Serving lnterpretatio~L< of Flanery: Why Ingratiation Works:· Journal of Per· smwlity and Sociall'sychology 82 (2002): 5 I 5-26. 89. C.A. Higgins. T.A. Judge. and G.R. FerTis. "influence lactics and Work Outcome.~: A Meta· Analysis:· Joumal of Organizational Behavior 24 (2003): 90-106. 90. D. Strunon. LE. Pelton. and J. Tanner. J. F .. "Shall We Gather in dle Garden: 111e Effect of Ingratiatory Behaviors on Buyer Trust in Sale.~ people:· ltuh•strial Marketing Managemem 25 (1996): 151-62: J. o·Neil. ··An Investigation of the Source.~ of Influence of Corporate Public Relations Practitioners:· Public Relarions Rt!View 29 (2003): 159-69. 9 I. C.M. Falhe and G. Yuki. ·'Consequences for Managers of Using Single Influence Tactics and Combinations of Tactics:· Academy of Managemelll Joumal35 (1992): 638-52. 92. R.C. Ringer and R.W. Bos.~ ... Hospital Profes. sionaJs' Use of Upward Influence Tactic.s." Journal of Managerial Issues 12 (2000): 92-108. EN-4 1 93. G. Blickle. ··oo Work Values Predict the Use of lntraorganizational lnfluence Strategie.~?:· Journal of Applietl Sociall'sychol<>gy 30. no. I (2000):
196-205: P.P. Fu et al .. ·1’he Impact of Societal
Cultural Values and Individual Social Bel ief.~ on the
Perceived Effectiveness of Managerial Influence
Strategie.~: A Meso Approach:· Joumal Of lnrerna·
rimwl Business Swd;es 35. no. 4 (2004): 284-305.
94. This ha~ become the generaiJy.agreed definition
of organizational politics over the past two decades.
See: G.R . .Ferris and K.M. Kacmar. “Perception .. ~ of
Organizational Politics:· Journal ofMtmagemem
18 (1992): 93-116: R. Cropanzano et aL ··The
Relationship of Organizational Politics and Suppon
to Work Behaviors. Attirudes. and Stre..~;..~:· Jounwl
<>/Organizational Behavior IS (1997): 159-80:
E. Vigoda. ··Stress-Related Aftennaths to Workplace
Politics: The Relationships among PolitiC$. Job
Distress. and Aggressive Behavior in Organiz.a.
tions:· Journal ofOrganiwrional Behav;or23
(2002): 571-91. However. organizational politics
was previously viewed a~ influence tactics out~ide
the formal role that could be either selfish or aJO’u·
istic. This older definition is Jess common today.
possibly bec.ause it is incongruent with popular
views of politics and because it~ meaning is too
ambiguou.~. For the older perspective of organiza.
tional politics. see: J. Preffer. Power in Organi:.a·
rhms(Boston. MA: Pitman. 1981): Mintzberg.
Power ill and around Organizarions
95. C. Porath & C. Pean;on. ··The Price of Incivil-
ity:· Han:ard Busi11ess Rt!View. (January-February
2013)
96. K.M. Kacmar and R.A. Baron … Organizational
Politics: The State of the Field. Links to Related
Processes. and an Agenda for Future Research:·
in Researc/1 in Personnel and Human Resources
Managemem. ed. G.R. Ferris (Greenwich. CT:
JAJ Pres.<. 1999). 1-39: Vigoda. ··Stress-Related Aftermath.~ to Wot·kplace Politic.~: The Relation. ships among Politics. Job Distres.~. and Aggressive Behavior in Organizations: C.· H. Chang. C. C. Rosen. and P.E. Levy. "'The Relationship between Perceptions of Organizational Politics and Employee Attitude.~. Strain. and Behavior: A Meta· Analytic Examination ... Academy of MllJwgemem Jounwl 52. no. 4 (2009): 779-SO I. The quotation is from: M. Lmldry. ··Navigating the Politic.al Mine. fie ld:· I'M Nen.-ork. March 2013.38-43. 97. L. Hull. "Coven War in the Wot·kplace . .. over the Holiday R01a:· Mail Online. 7 August 2013: ..Office Wars: Tis the Season to Be Spiteful." Officebmker Blog. 2013. hnp://www.officebroker. comlblog/. 98. C. Hardy. Srrategiesfor Rerreuchmem and TtmJaround: 111e Politics ofSun;i,•al (Berlin: Walter de Gruyter. 1990). Chap. 14: G.R. Ferris et aJ .. ··Perceptions of Organizational Politics: Prediction. Stress. Related Implications. and Outcome.~:· Human Re/ation.~ 49 (1996): 233-63: M.C. Andrews and K.M. Kacmar. ··Discriminat· ing muong OrganizationaJ Politics. Justice. and Support:· Jmrmal of Organizarional Belta\•ior 22 (2001): 347-66. 99. S. Blazejewski and W. Dorow. ··Managing Organizational Politics for Radic-al Change: The Ca~;e of Beiersdorf.Lechia S.A .. Poznan:· Joumal <>/ Worltl B~<r3 (19&1): 120-22: R.J. House. “Power
and Personality in Complex Organizations:·
Research in OrgtmiztJiimral Behavior 10 (1988):
305-57.
10 I. R. Christie and f . Geis. Swdies iu Machia\•eJ.
/ianism (New York: Ac-.ademic Press. 1970): S.M.
Farmer et aL “Putting Upward Influence Strategie.~
in Context.” Joumal of Organizational Behavior
IS (1997): 17-42: K.S. Sauleya and A.G. Bedeian.
··Equity Sensitiviry: Construction of a Measure
and Examination of IL~ Psychometric Properties:·
Journal ofMtmagemenr 26 (2000): 885-910.
CHAPTER 11
I. N. Solovay. & C.K. Reed. Tltt! but mel and
di.fpure resolution: Umangling tlte Web (Vol. 671).
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2. J.A. Wall and R.R. Callister. “Conflict and IL< Management .. Joumal ofMtmagemetU. 21 (1995): 5 I 5-55: M.A. Rahim. Ma11aging Collf/ict in Orga- nizations. 4th ed. (New Bru11..~wick. NJ: Transaction Publishers. 2011). pp. 15-1: D. Tjosvold. Working Toge1her 10 Get Things Done (Lexington. MA: Lexington. 1986). I 14-11: D. Tjosvold. "Defining Conflkt and Making Choice.~ About hs Manage. ment .. buenuJiional Joumal of Conflict Manage· me111 17. no. 2 (2006): 87-95. 3. For example. see: R.R. Blake. H.A. Shepatd. and J .S . Mouton. Managing buergroup Conflict it~lndu..Hry (Houston: Gulf Publishing. 1964: K£. Boulding. ··Organization and Connict·· Conflict Resolution I. no. 2 (June I 957): 122-13: C. Argyris. ''11le lndi,ridual and Organization: Some Problem.~ of Mutual Adjuslment .. AdministraJi\•e Science Quarterly 2. no. I (I 957): 1-2: L Urwick. 111e Elemenrs of Admini.wmion, 2nd ed. (London. UK: Pitman. I 947). 4. Rahim. "Managing Conflict in Organizations:· in Cmwructiou Conflict Managemem ami Resolution, P. Fenn & R. Game.wn. eds. (London: E. & F N Spon. I 992): 386-395. 5. K.A. Jehn and C. Bendersky ... Intragroup Con. flic.t in Organizations: A Contingency Perspective on the Conflict.Outcome Relationship:· Research In Organi Thrive. CPP Global Human Capital
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7. B. Hewatt. “1lle long.tenn costs of not resolving
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8. F.R.C. de Wit. L.L. Greer. and K.A. Jehn. “The
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9. S. Fartlerov. ‘:American Airlines Flight Delayed
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20September201: M. O’Sullivan … fighting Kanga.
roo:· Canberrrl n’mes, 21 August 20 I 2. : .. American
Eagle flight Attendants· Argument Cause.~ 4.Hour
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tiveness:· Journal(>/ Applied Psychology 96. no. 2
(Mar 201 1): 391-400.
14. P.J. Carnevale. “‘Creativity in the Outcomes of
Conflict … in The Handbook ofConflit:I Resolution:
Tlteory and Pmc1ice. ed. M. DeuL~h. P.T. Cole·
man. and E. C. Marcus. 2nd eel. (San francisco. CA:
Jossey-Bass. 2006). 414-43: P.J. Boyle. D. Hanlon.
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Group Deci.~ions … Journal of Behavioral Decision
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15. K.M. Eisenhardt. J.L. Kahwajy. and L.J.
Bourgeois Ill “How Management Teams Can
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(July-August 1997): n-8: T. Greitemeyer et
al .. ··Information Sampling and Group Decision
Making: The Effects of an Advocacy Decision
Procedure and Ta~k Experience:· Journal of
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2006): 31-4: U. Klocke. ··How to Improve Decision
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38. no. 3 (June 2007): 437-46: K.M. Eisenhardt.
J.L. Kah,vajy. a1xl L.J . Bourgeois Ill. .. Conflict and
Strategic Choice: How Top Management Teams
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16. K.A. Jehn & C. Bender.sky. “‘Intragroup conflict
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til’t>ScienceQuamrly44(March 1999): 1-2: H.
Guetz.kow and J. Gyr. “An Analysis of Conflict
in Decision. Making Groups:· Human Relmimu
7. no. 3 (Aug. 1954): 367-382. The notion of two
types of conflict date.~ back to Georg Simmel. who
de.~ribed two types of conflict: one with a personal
and subjective goal. the other which ha.~ an imper.
sonal and objective quality. See: Coser. The FtmC·
Iimu of Social Cmiflici. pg. 112. Contemporary
scholars use various labels for cask and relationship
conflict We have avoided the “cognitive” and
“aftfclive” conflict labels because cognitions a1xl
emotions are interconnected processe.~ in aU human
activity. A third type of conflicl process conflict.
is excluded due to limited research and some ques.
lions about its distinction from task conflict.
17. C.K.W. De Dreu. “When Too LitdeorToo
Much Huns: E\•idence for a Curvilinear Relation.
ship between Task Conflict and Innovation in
Teams:· Joumal of Managemelll 32. no. I (fieb.
2006): 8J-JO: F.R. de Wit. L. L. Greer. & K.A.
Jehn … The paradox of intragroup conflict: a meta·
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18. R.S. Lau and A.T. Cobb. ··Understanding the
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19. G. Anders “Jeff Bezos Reveals his No. I
Leadership Secret:· F<>rbes (20 12): J. Kantor &
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nian”s Response to ‘Inside Amazon: Wre.~tling Big
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20. C.K. W. De Dreu and L.R. Weingart. ·1’a.r 25 (2004): 589-60: B.H. Bradley
et al.. “Ready to Rumble: How Team Personality
Composition and 1’ask Conflict Interact to Improve
Perfunnance:· Journal <>f Apt>li~>11’S)tl!blogy 98. no. 2
(20 13): 38>-39: B.H. Bradley et al.. “Reaping dte
BenefiL~ ofTa.~k Connict in Teams: The Critical Role
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22. P.L. Curseu. S. Boros. and L.A.G. Oerlemans.
“Task and Relationship Conflict in Short.Term and
Long.Tenn Group.~ the Critic-.al Role of Emotion
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Endnotes
of the Relationship between EmotionaJ intelligence
and Leaders· Consttuctive Conflict Management:·
Group Pmcesses & ltuergroup Relations 16. no. I
(January I. 2013 2013): 126-136.
23. J. Weiner. “Compa~ion: An Objective Form of
Empathy:· Awakin.org (September28. 2015).
24. de Wit. Greer. and Jehn. ·1″he Paradox of Intra-
group Conflict: A Meta-AnaJysis:·
25. A.C. Amason and H.J. Sapienza. ”The EffeciS
of Top Management Team Size and Interaction
Norm.~ on Cognitive and Affective Conflict:· Jour-
nal of Managemem 23. no. 4 ( 1997): 495-516.
26. H. Barki and J. Hartwick. “Conceptualizing the
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Journal oJCmifUct Managemeur 15. no. 3 (2004):
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27. M.A. Von Glinow. D.L. Shapiro. and J.M. Bren.
”Can We 1’alk. and ShouJd We? Managing Emo-
tionaJ Conflict in Multicultural Teams:· Academy
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28. J.M. Bren. D.L. Shapiro. and A.L. Lyde.
.. Breaking the Bonds of Reciprocity in Nego-
tiations:· Academy of Managemelll Jouma/41
(Augustl998): 410-42: G.E. Manin and TJ.
Bergman. ·1’he Dynamics of Behavioral Response
to Conflict in the Workplace:· Journal ofOccupa.
tiona/ & Organi:tuional Psychology 69 (December
1996): 377-387.
29. Data from !he 2009 Kelly Global Workforce
Index. ba~d on information published in news
relea~s in each country by KeiJy Service.~ in
September 2009.
30. R.E. Walton and J .M. Dunon. ··The Manage-
ment of Conflict: A Model and Review:· Atlmin-
i.-8: S.M.
Schmidt and T.A. Kochan. “‘Conflict: Toward Con.
ceptual Clarity:· Adminislmth’t? Sciet~u Quarterly
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31. J.A. McMullin. T. Duerden Comeau. and E.
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32. R.M. Sarala. ·’The Impact of CuJruraJ
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33. T. Taylor. “Change Is an Inevitable Part of
Life:· Dem•er Business Journal Onli11e. 8 October
2012.
34. D. Deveau … Merging? Better check your
culture compatibility before signing on the dot-
ted line:· financial Po.gy 54. no. I (2001): 51-6: R. Wageman
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Joint Effects of Ta~k and Reward Interdependence
on Group Performance.·· Joumal of Orgauiz.atioual
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39. P.C. Earley and G.B. Northcraft. ··Goal Setting.
Re.~ource Interdependence. and Conflict Manage-
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tion of the Benefit~ and Detriments of intragroup
Conflict:· Admiui.firtlfh·e Sdence Quarrerly 40
( 1995): 245-282.
40. A Risberg. ”Employee Experiences of Acquisi-
tion Processes:· Journal of World Business 36
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41. Jehn and Bendersky … Intragroup Conflict in
Organizations:·
42. M. HewstOile. M. Rubin. and H. WiiJis.
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(2002): 57>-60: J. Jenen. R. Spears. and T. Postme<. "Intergroup Distinctiveness and Differentiation: A Meta-Analytic Integration:· Jmmwl of Persmwliry and .'i<>ciall’sychology 86. no. 6 (2004): 86W79.
43. foiJett. “Constructive Conflict··: Blake.
Shepard. and Mouton. Managing lmergroup
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“Support for a Two-Dimensional Model of Conflic.t
Behavior:· Orgauiuuioual Behador and Human
Performance 16(1976): 143-15: C.K.W. De
Dreu et al .. .. A Theory-Based Measure ofConflic.t
Management Strategies in the Workplace:· Joumal
ofOrgani-66:
Rahim … Toward a 1’heory of Managing Organiza-
tional Conflict.··
44. C. K. W. de Dreu. A. Evers. B. Beersma
E. S. Kluwer. and A. Nauta. ··A 1lleory-based
Measure of Conflict Management Strategie.~ in the
Workplace:· Journal of Organizational Behavior.
22 (2001). pp. 645-68. For od1er variations of this
model. see: T. L Ruble and K. Thomas. “Sup-
port For a 1\vo-Dimen.~ional Model of Conflict
Behavior.·· Organizational Behavior and Human
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45. \Vorkplau Cmiflici and How Busi11esses Can
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What Does Not Communicating Communicate?:·
Human Commimication Research 38. no. 2 (20 12):
222-252.
47. Several st:udie.~ identify the antecedenlS
of preferred conflict style. For example. see:
P J . Moberg … Linking Conflict Strategy ro the
five-Factor Model: Theoretical and Empiric.al
foundations:· lmernmional Journal ofCmtflict
Management 12.no. I (2001): 47-6: H.-A. Shih
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J.E. Barbuto. Jr .. K.A. Phipps. and Y. Xu. ‘1’esting
Relationships between Personality. Conflict Styles
and Effectiveness:· lmernmional Journal of COil·
flict Managemew2l.no. 4 (2010): 434-447
EN-43
48. D. W. Johnson et al.. “EffecL< of Cooperative. Competitive. and individualistic Goal Structures on Achievement: A Meta-Analysis:· Psychological Bulletin89 (1981): 47-6: G.A. Callanan. C.D. Benzing. and D.F. PerTi. ·'Choice of Conflict- Handling Strategy: A Maner of Context:· Journal <>/Psychology 140. no. 3 (2006): 269-28: Z. Ma
et al .. ·11le Impact of Group-Oriented Value.~
on Choice of Conflict Management Style.~ and
Outcome.~: An Empirical Study in 1″urkey:· The
bueruarimwl Joumal of Human Resource Manage·
mew23. no. 18 (2012/10/01 2012): 3776-3793.
49. X.M. Song. J. Xile. and B. Dyer. “Amecedents
and Con.~quences of Ma1·keting Managers·
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..What Goes around Comes Around: The Impact
of Personal Conflict Style on Work Conflic.t and
Stre.~~ … ltueruaiimwl Jmmwl of Conflict Manage·
mew II . no. I (2000): 32-5: M. Song. B. Dyer. and
R.J. 1llieme. “Conflict Management and innovation
Performance: An Integrated Contingency Perspec-
tive:· Academy of Marketing Science 34. no. 3
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Group Dynamics I I. no. I (2007): 66-78.
50. G.A. Chung-Yan and C. Moeller. ·1’he Psy-
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bueruaiimwl Joumal of Conflict Managemem2 1.
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51. C.K.W. De Dreu and A.E.M. Van Vianen.
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tiveness of Organizational Teams:· Journal of
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Fink. and Cai. ··The Effect of Connict Goals on
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cating Communicate? ..
52. A. Ergeneli. S.M. Camgoz. and P.B. Karapinar.
.. The Relationship between Self-Efficacy and
Conflict-Handling Styles in Tenus of Relative
Authority Positions of tile Two Panie.~:· Social
Behavior & Personality: An lmenwtional Jo,rnal
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53. J. Simms … Blood in the Boardroom:· Director
2009.48.
54. C.H. Tinsley. “How Negotiators Get to Yes:
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<>/Applied P.rychology 86. no. 4 (2001 ): 583-59:
J.L. Holt and C.J. DeVore. “Culture. Gender.
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Z.Z. Ma. “Connict Management Styles as Indica-
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55. D.A. Cai and E.L. Fink. ·-connie! Style Dif-
ferences between Individualist~ and Collecti,rists:·
Communication Monographs 69 (March 2002):
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lD Reduetng Conn.a.” Acad~m~ II/ Manu~m~lll
Journall9, no.~ ( 1976~ 591-605 M. Shenf.
-supe:rotduure Goats an the Reducuon of Inter~
group Conflia~·· TM Amniran Jo.,,ud ofStx·wl·
og• 63. no.~ ( 1958): l49-356.
59. Shenf. “Superord1na1e Goal> 1n thr Reduction
of Intergroup ConnK:t,”: Eisenhord~ Kah””JY· and
Bourgeoa.s Ill, “How Mnnagemcnl Team~ Can Ha”‘e
a Good Figh1,”: Song. X1le. and Dyer. “Anltc:ed-
ent~ and Consequences of Mru’kct•ng M1utagcrs’
Connict-HandJing 8chavio~.”: 0. Dotac:ct. J. POt·
tra.’i, aJld 0. CheneVCI I, ’11le Impacts or Leadership
on Workplace Confhc1s.” lm~nuw’onal Jounwl of
Cmiflit:l Mtmag~ment 20. no. 4 (2(M)9}: 340-3S4.
60. R.S. l au and A.T. Cobb. “Undc”tnnding !he
COIUl eCtions helwCeJl relaliOnllhiJ) Conn icl and
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61. H.C. Triandis, “The FuwreofWo11d Ps)’cholog\’: An /nt~nwtiOttal
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62. D. Nebenzahl. “Managmg the Generollion
Gap.- Momrral Ga:.n,., 28 February 2009.01.
D. De•·eau. “l’Ore:ll Canada Diuu. and J.M. Brcu.
.. Can ·we talk, Md should \\e? Managmg emouonal
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agern-477.
71. R. KaramooyyaandJ.M. Bren. “Managers Han-
dhng D1sputes: Tlurd P3rl)’ Roles and Perceptions
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72. A.R. Elangm= “Managerialln..,n-entioo in
OrgamzauonaJ O&Sputes: Testing a Prescripti\’e
Model oC Strategy Selection.” lnt. Meyer. J.M. Gemmell. and P.G. Irving.
“Evalualing the Management of Interpersonal
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of Outcome Criteria.” Canadian Journal of Admin·
istratil’t• Sciences 14 (1997): 1-13: LB. Binghan1.
“Employment Dispute Re.«)lution: The Case for
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1- 2 (2004): 145-17: M. Hyde e1 al.. ‘Workplace
Confl1ct Resolution and thr He:lllh of Ernplo)’ees
m the Swed1sh and Finnish Units of an Industrial
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AciJl!~””‘ of Mtmagtment Rnit” 25. no. 2 (2(()()):
416-42: W.li. Ro>s. C. Branuneter. :llld T. C1riacks.
“‘The Impact of H}brid D1d S.D. Chrhtman. “A Neuropsyeholngical
Dtmens.ion for Anchoring Effects,” Jounral of
Bon and l .R. Wein~ “Unilateral
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(200-1): 263-27: R. l’clls. El/«tn~ /1/J.”<. and M.V. Champagne. -rhe lmp3Cl of Time Pre.sure 10 Neg0l1ation: A Met.a-Anal)'lloiS ... llfltrnllliOtlill l bttrna/ of Cmiflit:t MtiiU.l_~m~nt 9. no. 2 (Apnl 1998): 97-11: C.K.W. De Drcu. ''Tune Pressure a.nd Closmg of the Mtnd in Negoll:uion.'' Orgtmi:p· tiona/ B~lun·ior and /I unum DN.·ision Proc~sst.s 91 (July 2003): 2~0-295. However. one n.'Cent >tudy
rer)oned rhat iipceding up chcsc conce~sion.s leads
10 beuer negoliauxl ootcomes. Sec: D.A. Moore.
“Myopic Predic1ion. Self-Dc.:ttruclivc Secrecy. and
rhe Unexpected Benefic~ of Rcvcnling Final Dead·
lines in Negoliation,” Organiuahmal JJehm·ior
tmd Humtm Dn·i.fiQII Pro~·tsU.l’ 94. no. 2 (2004):
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86. RJ. Robenson. “Defusmg !he Exploding Offer:
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3 (1995): 277- 285.
87. LL. Thompson, “lnformauon Exchange m
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91. D.W. Choi . .. Shared Metacognition in Integra.
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92. J.M. Brett et aL “Sticks and Stones: Language.
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93. PJ. CamevaJe and A.M. lsen. ‘”The Influence of
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CHAPTER 12
I . D. Ossip … Create a Culture of Engagement for
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NJ: Pearson E.duca1ion. 2013).
4. R. House. M. Javidan. and P. Dorfman . .. Project
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R. House et al.. ··understanding Culture.~ and
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5. J .A. Raelin. ··we the Leaders: In Order to fonn
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pp. 79-S J.
20. L. Black … Hamburger Diplomacy … Report on
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2 1. J .E. Baur e1 al.. “More Than One Way 10
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22. D.E. Berlew. “Leadership and Organiza-
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B. Nanus. Leaders: The Sirlllegiesfor Taking
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23. S. Kole.~nikov.Je.~op. “You”re the Conductor:
Listen to the Music You Can Create with the
Group:· Tlte New York Times. April I I. 2016.
24. For a discussion of trust in leadership. see C.S.
Burke et aL .. Trust in Leadership: A MuJti.Level

EN-46 Endnotes
Review and Integration:· Leadership Quarterly 18.
no. 6 (2007): 606-32. The surveys on leading by
example are reponed in J .C. Maxwell . .. People Do
What People See:· Business Week. 19 November
2007. 32: “Who·s the Bos.< of Workplace Cul- ture?:· News release (Chelmsford. MA: Kronos. 9 March 2016). In tlte earlier survey. "leading by example .. wa~ the most imponant attribute of effective leaders. In the recent sun•ey. HR profe.~­ sionals and managers rated .. leading by example .. as the top attribute of a company's culrure. wherea~ employees ranked it below pay. co--worker re.~pect. and work-life balance. 25. Bass and Riggio. 1irm.iformatiot~al Leadership. pg. 7: Kouzes and Posner. 71Je Leadership Chal- lenge. Chaps. 6 and 7. 26. W.E. Baker and J.M. Sinkula. ·1'he Synergistic Effect of Market Orientation and Learning Orienta- tion on Organizational Performance.·· Academy ofMarkeiing St:iet~ce Jourual21. no. 4 (1999): 411-27: Z. Emden. A. Yaprak. and S.T. Cavusgil. ··Learning from Experience in International Alliance.~: Antecedents mxl Firm Performance Implications:· Journal of Bu.siue.t.f Research 58. llO. 7 (2005): 883-92. 27. Kouze.~ and Pos1ler. The Leadership Challenge. 28. W.G. Hardwick. "Re.0): 571-604.
37. A. Zaleznik. “Managers and Leaders: Are 1’1ley
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40. G. Yukl and R. Lepsinger. “Why lntegrating
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critique of leadership theories suggeslS that
scholars need to furt11er clarify the distillCtion. if
any exists. between leading and managing. See S.l.
Hannah et al .. “Debunking the false Dichotomy
of Leadership Idealism and Pragmatism: Critical
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41. S.R. Satterwhite. “Delrs Poisonous Culture Is
Sinking llS Ship-and Raise.~ Que.~ions for Poten.
tial Buyers:· Forbes. I April 2013.
42. E.A. Fleishntan. “‘The De.~ription of Supervi.
sory Behavior … Journal of Applied Psychology 37.
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cal problems with the developmem of these people
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am Research ResullS and Some Empiric-.al Test~ …
Organiz.ational Behavior and Human Performance
15. no. 2 (1976): 297-321: L. Tracy. “Consid-
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43. A.K. Konnan. “Consideration. initiating
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E. A. Fleishman. “Twenty Years of Consideration
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ed. (Upper Saddle River. NJ: Pearson Education.
2013). 62-75.
44. B.A. Soon et al.. “A Daily Investigation of the
Role of Manager Empatlly on Employee Well-
Being:· Organiz.aiional Belta,•ior and Human Ded·
.). 10 April
2013: B. Powell … Don JailholL
Caribbean. 4 Augus-t 2016.
49. S. Sendjaya. J .C. Sarros. and J .C. Santora.
”Defining and Measuring Servant Leadership
Behaviour in Organization.~:· Joumal of Manage-
me/11 Swdies 45. no. 2 (2008): 402-24: R.C.
Liden el aJ .. “Sen•ant Leadership: Development
of a Multidimensional Mea~ure and Multi-Level
Asse.~coment .. Leader.~hip Quarterly 19. no. 2
(2008): 161-77: D. van Dierendonck. ··servant
Leadership: A Review and Synthesis:· Jo,rnal
ofMmwgemem37. no. 4 (201 1): 122&-61: R.
VanMeter et al .. ··tn Search of Clarity on Sen•ant
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alization:· AMS Review 6. no. I (March 29. 2016):
59-78.
50. R. VanMeter et aL .. In Search of Clarity on
Sen•ant Leadership: Domain Specification and
Reconceptualization:· At\1S Reriew 6. no. I (March
29. 2016): 59-78.
5 I. S.J. Peterson. B.M. Galvin. and D. Lange.
“‘CEO Servant Leadership: Exploring Executive
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l’sychology 65. no. 3 (2012): 565-96.
52. S. Kerr et al.. ”Towards a ContingellCY Theory
of Leadership Based Upon the Consideration and
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‘1’he Great Hi- Hi Leader Behavior Myth: A
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me/11 JOLmlfl/ 19 (1976): 628-41.
53 . .For a thorough study of how expectancy theory
of motivation relate.~ to leadership. see R.G. Isaac.
WJ. Zertle. and D.C. Pitt. “Leadership and Mo Goal Theory of
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C.A. Schries.heim (Greenwich. cr: Information
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55. RJ. House … Path-Goal 1’heory of Leadership:
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Le-Goal Theories of Leadership: A
Mela·Anatysis:· Journal ofMtmagememl9 (1993):
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57. J.D. Houghton and S.K. Yoho … Toward a Con.
tingency Model of Leadership and Psychological
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58. R.T. Keller … A Te.n 15. no. I (2008): 75-96: L Holmberg
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62. C. A. Schriesheim and L.L. Neider. “Path .Goal
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ne.tt Man-
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67. For a summary of criticism.~. see G.A.
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68. T.A. Judge. R.F. Piccolo. and R. llies. ·111e
forgotten Ones?: The Validity of Consideration
and Initiating Structure in Leadership Research:·
Jmmwl of Applied l’sydwlogy &9. No. I . (2004):
36-51: T.A. Judge. R.F. Piccolo. and T. Kosalka.
”The Bright and Dark Sides of Leader Traits: A
Review and Tlleorelic-:al Extension of the Leader
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69. N. Nicholson. ExecUJi\’t! Jn.Hinci (New Yod:::
Crown. 2000).
70. This ob.sen,ation has also been made by C. A.
Schriesheim. “Substitute.v.for.Leadership Theory:
EN-47
Development and Ba.~ic Concepts:· Uadership
Quarterly 8 (1997): 10:>-08.
71. D. F. Elloy and A. Randolph. ·1’he Effect
of Superleader Behavior on Autonomous Work
Groups in a Government Operated Railway Ser.
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SuperLeadersilip: Leading Others to Lead Them-
sel••es (San Francisco. CA: Berrett-Koehler. 2001).
72. M.L. Loughry. “‘Coworkers Are Watching:
Performance Implications of Peer Monitoring:·
Academy of Managemeni Proceeding.1 (2002):
0 1-06.
73. P.M. Podsakoff and S.B. MacKenzie … Kerr
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tions for Future Research:· Leadership Quanerly 8
( 1997): 117-32: S.D. Dionne et al.. .. Neutralizing
Substirute.~ for Leadership Theory: Leadership
Effects alld Common-Source Bias:· Journal Of
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Villa et al .. “Problems with Detecting Moderators
in Leadership Research Using Moderated Multiple
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LR. Offermann. JJ.K. Kennedy. and P.W. Wirtz.
··Implicit Leadership Theorie.~: Content. Structure.
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..Multi· Level Information Processing Explanations
of Followers· Leadership Perceptions: · Leadership
Quarterly 6 (1995): 265-87:0. Epitropaki and R.
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discussion of the social construction of leadership.
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Construclion of Leadership: A Sailing Guide:·
Managemem Comnwnit:m;on Quarttrly 24. no. 2
(2010): 171-210.
75. R.G. Lord el aJ.. “Conlextual Constraints on
Prototype Generation and Tlleir Multilevel Conse-
quences for Leadership Perceptions:· Leadership
Quarterly 12. no. 3 (2001): 31 1-38: KA Scott and
OJ. Brown. ··Female f:ir.st. Leader Second? Gender
Bias in tJle Encoding of Leadership Behavior …
Organiz.at;onal Behavior and Human Deci.~ion
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Dinh. and R.G. Lord … Development~ in Implicit
Leadership Theory and Cognitive Science: Appli·
cations to Improving Mea.~urement and Under.
standing Alternatives to Hierarchic:al Leadership:·
Leadership Quarterly 21. no. 6 (2010): 959-78.
76. S.F. Cronshaw and R.G. Lord. “EffocL< of Cat· egorization. Attribution. and Encoding Proce.~~s on Leadership Perceptions:· Journal (?{Applied l'syclwlogy 72 (1987): 97- 106: J.L. Nye and D.R. Forsyd>. ’11>e EffocL< of l'rolotype.Based Bia.‘a. and T.G. Pollocl.
··seue,ring One’s 0\\-n Pre~: The Cause) Wld
Consequences of CEO Celebrny.'” Stmt~gic Man·
agtmmt lo•n~f U(l{lerslrip (New
York: Tile Pree Pres.. 1974). Chap. 5.
82. J. lntagliato, D. Ulrich. and N. Smallwood.
”l..e\•eraging Leadership Competencies to Produce
Leadership Brand: Creat~ng Ot\UtlCU\’CilCM by
Focu:.11ing on St.raccgy and Resuh;;;· /Iuman Rt-wurus
PIA1ming 23. no. 4 (2(0)): 12-23: J.A. Conger and
D.A. Ready. “‘Rethmking LcadenJup Coc~encoes.”
LLadutoLMdu(‘l004): 41-47; SJ. Zaccaro. C.
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in n.~ Narurr of l.Laikrshi’p. ed. J. Amonal.J~ A. T.
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Judge. R.F. Plcrolo, and T. Kc.all..a. ‘1be Bnp
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Santosuosso. -Minnelh Bnngs a Rcal-1..1/e Concert
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CHAPTER 14
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how-clio.working-become-values-driven-organiza.
tion-christopher-yeh (accessed 9 April2017):
L. Corcuera “Bringing Value.~·Bawd Learning
to Life (at WOt·k):· HR Voic•. 13 June 2016: D.
Deveau. “Creating a CulruraJ Barometer for
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UK: Institute of Personnel Management. 1989):
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Explosion and Firt! (Texa.~ City. Texas: BP. March
23. 2005): U.S. Chemical Safety Board (Wagy. ed. P.J.D. Drenth. H. 1’hierry. and C.J.
de Wolff(Ea.-45: D.E. Leidner and
T. Kaywonh … A Review of Cuhure in Information
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Technology Culture Conflicl. .. MIS Quarterly 30.
no. 2 (2006): 357-99: S. Scott-Findlay and C. A.
Estabrooks … Mapping the Organizational Culture
Research in Nursing: A Literature Review … Journal
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11. L Guiso. P. Sapienza. and L. Zingale.~ . .. The
Value of Corporate Cut lUre:· Joumal of Financial
Ecmwmics I 17. no. I (2015): 60-76.
12. J. Martin. P.J. Frost. and O.A. o·Neill. “Organi-
zationaJ Culture: Beyond Struggles for Intellectual
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13. G. Hof.~ede … Identifying Organizational Sub-
cultures: An Empirical Approach: · Joumal of Man-
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Practice ofCo.Operative Inquiry: Re.~arch ·with.
Rather Than ‘on· People:· in HaJU!book -30:
K. Cameron. J .E. Dunon. and R£. Quinn. eds ..
Posi1ire Organiz.ational Sclwlar.~hip: Foundation
of a New Disdpline (San Francisco. CA: Berrett
Koehler Publishers. 2003): S.L. Gable and J. Haidt.
.. What (and Why) Is Positive Psychology? … Re,•iew
ofGenemll’sydwlogy 9. no. 2 (2005): 103-10:
M.E.P. Seligman et al .. “Positive Psychology
Progress: Empirical Validation of interventions.··
American l’syclwlogi.n 60. no. 5 (2005): 41()…21.
63. D.K. Whimey and D.L. Cooperrider. ·1’he
Appreciative Inquiry Summh: Overview and Appli-
cations:· Employmem Relations 7()(/ay 25 ( 1998):
17-28: J.M. Walkins and BJ. Mohr. Apprecimh·e
Inquiry: Change artht! Speed of Imagination (San
Francisco. CA: Jo.<- Leaders. 2013).
68. M. Schiller. “Case Study: Avon Mexico … in
Apprecimil’t! fttq,iry: Changt! a1 rite Speed of
lmaginmion ed. J .M. Watkil\.~ and B.J. Mohr (San
Francisco. CA: Jo.<--26: P.
Babcock. “Seeing a Brighter Future:· HRMagazine
50. no. 9 (2005): 48: D.S. Bright. D.L. Cooperrider.
and W.B. Galloway. “Appreciative Inquiry in the
Office of Research and Development: Improving
the Collaborative Capacity of Organization … Public
Performance & Management Redew 29. no. 3
(2006): 285: D. Gilmour and A. Radford. ··using
OD to Enhance Shareholder Value: Delivering
Business Re.wlt~ in BP Ca.~tro l Marine:· Organiza-
tion Df!!.•elopmem Journal25. no. 3 (2007): P97-
Pl02: Whitney and Trosten-Bioom. Tht! Power of
Apprecimil’t! fttq,iry.
69. T.F. Yaeger. P.F. Sorensen. and U. Bengtsson.
“A.~~ssment of the State of Appreciative Inquiry:
Pa.~t. Present. and Future:· Research in Organi-
zational Change and De,•e/opmeut 15 (2004):
297-3 I 9: G.R. Bushe and A.F. Kassam. “When Is
Appreciative Inquiry Transformational? A Meta-
Case Analysis … Journal of Applied Behal’iorol
Scie11ce 41. no. 2 (2005): 161-81.
70. G.R. Bushe. “Five Theorie.< of Change Embed- ded in Appreciative Inquiry .. (paper presented at the 18th Annual World Congre.~~ of Organization Development. Dublin. Ireland. July 14-18. 1998). 71 . J.M. Bartunek. J. Balogun. and B. Do. "Con- sidering Planned Change Anew: Stretc.hing Large Group lmerventions Strategically. Emotionally. and Meaningfully:· Academy of Managemelll Annals 5. no. I (20 11): 1-52. 72. M. Weisbord and S. Janoff. Ftlfltrt! Search: An Action Guide to Finding Common Ground in Organiw- lions aJUI Conummiries (San Fr.mcisco. CA: Berrett- Koel~er. 2000): R.M. Lent. M.T. McCormick. and D.S. Pearce. "Combining Future Search and Open Space to Addres.< Special Situation.<-" lottmal of Applied &hav- imnl Sciral Scienc. 19 (2002): 347-55: M.F.D.
Polanyi. “Communicative Action in Practice:
Future Search and the Pursuit of an Open. Critical
and Non-Coercive Large-Group Proces.~ … Systtms
Research and Behavioral Sdence 19 (2002):
357-66: A. De Gra.~~;i. “Emrisioning Furures of
Afric-.an Ag:riculrure: Representation. Power. and
Socially Constitured 1ime … Progrt!ss in De,•e/op-
m-415: C.-M. Lau. “A Culmre-Based
Perspective of Organization Development Imple-
mentation:· Research in Organiz.ational Change
and Developmem9 (1996): 49-79: C.M. Lau and
H.Y. Ngo. “Organization Development and Firm
Performance: A Comparison of Multinational and
Local Firms … Joumal Of Itueruarimwl Business
Studies 32. no. I (2001): 95-1 14.
78. M. McKendaJJ. “The Tyranny of Change:
Organizational Development Revisited … Jounwl
<>/Busili.SS E1hics 12 (1993): 9:>-104: C.M.D.
Deaner. ··A Model of Organization Development
Ethics: · Public Adminisuatiou Quarttrly 17
(1994): 435-46.
79. G.A. Walter. “Organization Development and
Individual Rights:· Journal of Applin/ Behadorol
Sciroom effect. 266
BATNA.323
BBC. 78.369.438
B.C. Children’s Hospital. 38
BC Hydro. 267
behaviour modelling. 143
behavioural intentions. 98
behaviourism. 140
beliefs. 97
belongingne.~ needs. 130. 131
Bennis. Warren. 355
Berton. Pierre. 151
best alternative to a negotiated agreement
(BATNA). 323
Bezos. Jeff. 14
bias
awarene.~~ of perceptual biase.~. 83
confirmation bias. 74. 198
corre.~pondence bias. 80
decision heuristics. 193-194
fundamental attribution error. 80. 84
halo effect. 82
and performance reviews. 167
primacy effect. 82
recency effect. 82-83
self.serving bias. 80
stereotyping. 7~79
biculruraJ audit. 403
Big Five personalhy dimension. 57.202
Binning. Steve .. 95
Bioware. 380
BlackBerry. 19
blame game. 438
Blanchard. Ken. 349
blind area (Johari Window). 84
Blueshore Financial. 419. 420. 427. 428. 430. 43 I
Blumberg. Dan. 105
BMW AG. 382. 383. 397
board of directors. 78
body language. 255
Bolonade. 2
Bombardjer Inc .. 3
Bonaparte. Napoleon. 367
bonding (drive). 134-135. 270
bonuses. 163
bonom line. 5
Bouchard. Christian. 3 I 9
Bouchard. Trevor. 247
boundary spanning. 232
bounded rationality. 192
Bourgois. Emilie. 53. 54
Bou1·ke. Jim. 76
BP (British Petroleum). 392
brainstonning. 239-240
brainwriting. 240
Brandt Group. 20
Brasilata. 207
Braun. Martin. 6
breaking routines. 424-425
bribery. 51. 52. 60. 38 I
Bridgewater Associate.~. 40
Brin. Sergey. 191
British Columbia Ferry Senrices. 198
British Computing Society. 66
British Ga.~ New Energy. 283
Broadc.ast Australia. 223
BrookstOile Consttuctjon. 320
Brooks·s Jaw. 219
Brown. Mike. 285

Index
brown nosing. 296
buffers. 320
bullying bosse.~. 292
Bunnings. 400
Burke. Dave. I 78
bUnlOUl. S~e job burnout
business ethics. Set! ethics
c
Cafley. Julie. 276
Caicraft. Stef. 204
caJculus.based ttust 230
Campbell. Gordon. 341
Campbell Soup. 168
Canaccord Genuity Group Inc .. 10. I I
can-dobeliefsystem.42. 70.71. 179.341
Canada
absenteei.~m. 38
Canadian \’S. Americ:an values. 57- 58
cultural diversity. 57
diversity of Canadian cuJruraJ vaJue.~. 57-58
employee engagement 129
workforce diversity. 10
Canad;an Charrer of Rights and Freedoms. 250
Canadian Centre for Ethic$ and Corporate
Policy. 53
Canadian Narure Federation. 439
Canadian Tire. 215.216.247. 365.377. 438
CANOE.41
capitalism. 57
Cara. Frank. 74
Carnegie. Andrew. 440
case studies
Ancol Ltd .. 28-29
Arbrecorp Ltee. 243-244
Barrie Super Subs. 155-156
car wars at Wolf.

Preface xxi
EXPERIENTIAL EXERCISES AND SELF-ASSESSMENTS
Experiential exercises and self-assessments represent an important part of active learning. Canadian
Organizational Behaviow; Tenth Ed ition, fac ilitates th is important learning process by offering a
team, web, or class exercise in every chapter. Self-assessments personalize the meaning of several
organizational behaviour concepts, and this edition features four dozen of them in Connect, with
automated scoring and detai led feedback. Small call-out icons in every chapter help students locate
text content most relevant to each of these excellent resources. In addition, the last page of each
chapter has a convenient table that briefly describes the self-assessments in Connect associated with
that chapter.
Team Exercise:
TEAM TOWER POWER
Purpose This exercise is designed to help you understand team roles, team
development, and other issues in the development and maintenance of effective
teams.
Materials The instructor will provide enough LEGO® pieces or similar materials for
each team to complete the assigned task. Al l teams should have identical (or very
similar) amounts and types of pieces. The instructor wiU need a measuring tape and
stopwatch. Students may use writi ng materials duri ng the design stage (see
Self-Assessments for Chapter 2
SELF
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blot!Uif li.’Ord:. _,
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•f’ u~ •lito •r.C•”‘ b~ 1tl f:.ec. $OMt (‘()f’HI)Qnld. I’I(IM: …-~
&Optii~IC’*’CI !XI(t..ve 10 f’:.tlnlllk tbt pti”‘..Cit’I:IIJt) · IUih of jdJ
wiiC’:ant:. from the w.tmb llwr u~ .. ,. blot~ iM’Id othnonli111e Vtnl•ft!
Thi$ wlf~~~nte:h~> how••\”11 ~w •rntrptt”l ~ne·$
pnlOI’IAI~· JO biOJ’ *’Ki ocbtf \1; (l(ll’lf
Pt1.01llllll)’ t3lptfL ~’e Ofpui.Ud lilt do!ltll~ of j)ef:>Oiltll.!t\· hokU
mtoffYII’ ITUIBdlorllfi’D:.IOII~ l.nou.n.a:.lhe fn~f.ldocot’BI! fi\\0′
modd EIK’h d•l’!’ll”n>IOI’I~i::c: of W’\Wlll :pt”Cofic P”””..oNI•tY tr-111•
thl”lttlua(f’ •d’ltr Mo;t ocholarl\· ~..t.:.dl Oft 1)(1Wfl\11m· ~~~ Ofl
tht:S mocltl. buc 1t” also ~ful111 f’\’f'”‘dol\· ILft ua ~llll.wk· e-,.,.
C3kf(IU!JICIOQ of pti!.OIIi!bl.lt~ Tbol$ ~~f~:.t!.:ftltntr.IUNk:. )’OW
peno•uhty on till’ Bl! Fn~ duntn:IO!e
Or\t of lbt l’lkia v; ldtl~’ $1Udlltd tll’ld J
• Environment sc:annifll
• Graftin&
• Expwimenation
·——+—–~~ • Communication
• lndividualleamir1& (intemaQ
• Knowted,e tn.nsfer
• System.Vpracdceslhabits
Usmg
Knowledge
• Sensemakina
• Requisite skills
• Autonomy
• LearninJ orientation
• O”ainin&
• ob.servinz
• tnfonnation systemS

18 Part O ne Introduction
Acquiring Knowledge Acquiring knowledge refers to bringing in knowledge from the external envi-
ronment as well a~ through discovery. It occurs daily when employees casually observe changes in the
external environment a~ well as when they receive formal training from sources outside the organization.
Knowledge acquisition also occurs through environmental scanning, such as actively monitoring consumer
trends, proposed government legislation, and competitor activities. A third method of acquiring knowledge
is to hire skilled staff and buy complementary businesses (called grafting). Finally, knowledge acquisition
occurs through experimentation-generating new idea~ and products through creative discovery and testing.
Sharing Knowledge Sharing knowledge refers to distributing knowledge throughout the orga-
nization. This mainly occurs through formal and informal communication with co-workers, as well as
through various forms of in-house learning (training, observation, etc.). Companies encourage infor-
mal communication through their organizational structure, workspace design, corporate culture, and
social activities.73 Company intranet~ and digital information repositories, such as Shopify’s internal
wiki, also support knowledge sharing.
Using Knowledge Knowledge is a competitive advantage only when it is appl ied to improve
organizational processes. To use knowledge, employees need a mental map (sense making) so they are
aware the knowledge exists and know where to find it in the organization. Knowledge use also requires
employees with sufficient prerequisite knowledge and ski lls. For example, financ ial analysts need
foundation knowledge in mathematics and financial products to use new knowledge on asset valuation
methods. Autonomy is another important condition for knowledge use; employees must have enough
freedom to try out new ideas. Knowledge use also flour ishes where workplace norms strongly support
organizational learning. These beliefs and norms represent a learning orienta tion, which we discuss
further on the topics of creativity (Chapter 7) and organizational culture (Chapter 14).
Storing Knowledge Storing knowledge is the process of retaining knowledge for later retrieval.
S tored knowledge, often called organizational memory, includes knowledge that employees recall as
well as knowledge embedded in the organization’s systems and structures.74 Effective organizations also

Chapter One Introduction to the Field of Organizational Behaviour
The phoenix is a mythical bird that rises from the ashes of its previous existence. Yet in the
Canadian federal government, Phoenix is the name of a new payroll system that doesn’t yet
know how to fly. Soon after Phoen ix was launched in February 2016, it underpaid, overpaid,
or altogether stopped paying 82,000 civil servants. The government eventually provided
emergency funds to short-changed staff, but many had to max out their credit cards and borrow
from relatives to make ends meet. More than 13,000 employees continued to suffer payroll errors
one year later.
Much of the Phoenix debacle is explained by ineffective organ izationa l learn ing. The Canadian
government’s payroll system is h ighly complex, involving 80,000 pay rules derived from
27 labour union contracts. Yet the government cut costs by providing insufficient tra ining to the
500 civil servants responsible for operating Phoenix. ·we underestimated the amount of time
that it would take for all users to become trained and familiar w ith the system,” admitted a sen ior
government leader involved w ith Phoenix’s development. ” The learn ing curve just seemed to be
much longer than we expected.”
The Phoenix project also suffered from loss of organizational memory. Before the new system
had been adequately tested, the government attempted to cut costs by laying off hundreds of
payroll experts who operated the old system. When Phoenix spectacularly spewed out incorrect
paycheques, there was a shortage of people knowledgeable enough about the complex payroll
rules to fix the p roblems. The government scrambled to temporarily rehire many of the laid-off
staff. “Pay transformation was compromised as soon as the decision was taken to eliminate
the j obs of some 700 compensation staff before we had transitioned to Phoenix,” admitted the
Canadian government minister responsible for payroll admin istration. “Had we kept those j obs
longer, we would not be in the situation we are in today.”7s
© Darcey Mclaughlin, 95.9 Sun FM/Post Media
19
retain knowledge in human capital by motivating employees to stay with the company. Furthermore,
organizations encourage employees to share what they know so valuable knowledge is held by co-work-
ers when an employee does quit or retire. Another strategy is to actively document knowledge when it is
created by debriefing teams on details of their knowledge of clients or product development.
One la~t point about the organizational learning perspective: effective organizations not only learn;
they also unlearn routines and patterns of behaviour that are no longer appropriate?6 Unlearning
removes knowledge that no longer adds value and, in fac t, may undermine the organization’s effec-
tiveness. Some forms of unlearning involve replacing dysfun ctional policies, procedures, and routines.
Other forms of unlearning era~e attitudes, beliefs, and a~sumptions. For example, BlackBerry (formerly
Research in Motion) held strong beliefs and assumptions about phones w ith physical keypads, which
resulted in their slow response to smartphones and tablets w ith touchscreen technology. Organizational
unlearning is particularly important for organizational change, which we discuss in Chapter 15.
HIGH-PERFORMANCE WORK PRACTICES (HPWP) PERSPECTIVE
The open systems perspective states that successful companies are effici ent and adaptive at transforming
inputs into outputs. However, it does not offer guidance about specific subsystem character istics or orga-
nizational practices that make the transformation process more effective. These details are addressed by
another perspective of organizational effectiveness, called high-performance work practices (HPWP).
The HPWP perspective is founded on the belief that human capital- the knowledge, skills, and abilities
that employees possess-is an im portant source of competitive advantage for organizations77 Motivated
and skilled employees offer competitive advantage by transform ing inputs to outputs better, by provid-
ing better sensitivity to the external environment, and by having better relations w ith key stakeholders.
The HPWP perspective tries to figure o ut specific ways to generate the most value fro m human
capital. Researchers have investigated numerous potential high-performance work practices, but we
will focus on the four discussed in most studies: e mployee involvement, job autonomy, competency
development, and rewards for performance and competency development.78 Each of these four work
practices individually improves organizational effectiveness, but studies suggest that they have a stron-
ger effect when bundled together?9

20 Part One Introduction
Over the past forty years, the Brandt Group of Companies has grown from a small manufactu rer to
become Saskatchewan’s largest privately-held company with $ 1.2 b illion sales and more than 1,800
employees. Brandt is also rated as one of Canada’s 50 best managed firms. Brand t Group chairman
Gavin Semple says the secret to business success is applying high-performance work p ractices so
the company has strong human capital. “It always comes back to obtaining, training, and retaining
the brightest and the best people,” advises Semple. “We’ve been focused on that for several
decades, so we want to not only find the best, but we want to develop a cu lture that results in our
employees wanting to come to work, enjoying their work, and being fu lfilled at doing their j ob.”80
© David Schaffer/ age fotostock
The first two factors-invol ving employees in decision making and giving them more autonomy
over their work activities-strengthen employee motivation as well as improve decisions, organi-
zational responsiveness, and commitment to change. In high-performance workplaces, employee
involvement and job autonomy often take the form of self-directed teams (see Chapter 8). The third
factor, employee competency development, refers to recruiting, selecting, and training so employees
are equipped with the relevant skills, knowledge, and other personal characteristics. The fourth high-
performance work practice involves linking performance and skill development to various forms of
financ ial and nonfinancial rewards valued by e mployees.
HPWP practices improve an organization’s effectiveness in three ways.8 1 First, as we mentioned ear-
lier, these activities develop employee skills and knowledge (human capital), which directly improve
individual behaviour and performance. Second, companies with superior human capital tend to adapt
better to rapidly changing environments. This adaptability occurs because employees are better at per-
forming diverse tasks in unfamiliar situations when they are highly skilled and have more freedom
to perform their work. A third explanation is that HPWP practices strengthen employee motivation
and positive attitudes toward the employer. HPWPs represent the company’s investment in its work-
force, which motivates employees to reciprocate through greater effort in their jobs and assistance to
co-workers.
The HPWP perspective is still developing, but it already reveals important information about spe-
cific organizational practices that improve an organization’s effectiveness through its employees. Still,
this perspective offers an incomplete picture of organizational effectiveness. The remaining gaps are
filled by the stakeholder perspective of organizational effectiveness.

Chapter O ne Introduction to the Field of Organizational Behaviour 2 1
STAKEHOLDER PERSPECTIVE
The open systems perspective says that effective organizations adapt to the external environment.
However, it doesn’t offer much detail about the external environment. The stakeholder perspective
offers more specific information and guidance by focusing on the organization’s relationships w ith
stakeholders. S takeho lders include organizations, groups, and other entities that affect, or are affected
by, the company’s objectives and actions.82 The stakeholder perspective personalizes the open systems
perspective; it identifies specific social entities in the external environment as well as employees and
others within the organization (the internal environment). This perspective also recognizes that stake-
holder relations are dynamic; they can be negotiated and influenced, not just taken as a fixed condi-
tion. In general, the stakeholder perspective states that organizations are more effective when they
understand, manage, and satisfy stakeholder needs and expectations. 83
There are many types of stakeholders, and the Jist is continuously evolving. Consider the key
stakeholders identified by CSL Limited in Exhibit 1.5. The Austral ian company and global leader in
blood-related products and vaccines pays attention to more than a dozen groups, and likely others that
aren’t included in this diagram. Understanding, managing, and satisfying the interests of stakeholders
is challenging because they have confl icting interests and organizations Jack sufficient resources to
satisfy everyone. Therefore, organizational leaders need to decide how much priority to give to each
group.84 Research has identified several factors that influence the prioritization of stakeholders, includ-
ing the entity’s power and urgency for action, its legitimate claim to organizational resources, how
executives perceive the organization’s environment, the organization’s culture, and the personal values
of the corporate board and CEO.
Va lues, Ethics, and Corporate Social Responsibility The stakeholder perspective provides
valuable details about features of the external environment that are missing from the open system per-
spective. Equal ly important, the stakeholder perspective incorporates values, ethics, and corporate social
responsibility into the organizational effectiveness equation. In particular, recall that personal values
influence how corporate boards and CEOs allocate organizational resources to stakeholders. 85 Values
EXHIBIT 1.5 CSL Limited’s Key Organizational Stakeholders
Patients
Customers
~ I
Media
PoiiUclans –
makers
OCSL Limited 20 I 6

22 Part O ne Introduction
are relati vely stable evaluative beliefs that guide our preferences for outcomes or courses of acti on i n
a vari ety of si tuations.86 They help us to know w hat i s r ight or w rong, or good or bad, in the world.
C hapter 2 explains how val ues anchor our beliefs and to some extent motivate our actions.
Al though values exist w i thin indiv iduals, groups of people often hold similar values, so we tend to
ascribe these shared values to the team, department, organization, profession, or entire society. For exam-
ple, Chapter 14 discusses the importance and dynami cs of organizational cul ture, whi ch includes shared
values across the company. Many firms strive to become values-dri ven organizations, whereby employee
decisions and behaviour are guided mainly by the collective values identified as critical to the organization’ s
success.87 Consider Vancity Savings. Canada’s largest co-operative financial institution and the country’ s
top ranked corporate citizen has a clear set of dominant values that guide employee decisions and behav-
iour. “At Vancity, our values shape everything we do for our members, our business partners, our employ-
ees, and the environment,” reports the company website, under the heading “Values-based banking.”88
By focusing on values, the stakeholder perspective also hi ghl ights the importance of ethics and corpo-
rate social responsibility. In fact, the stakeholder perspective emerged out of earlier writing on these topics.
Ethics refers to the sntdy of moral principles or values that determine w hether actions are right or wrong
and outcomes are good or bad. We rely on our ethical values to determine “the right thing to do.” Ethical
behaviour is driven by the moral principles we use to make decisions. These moral principles represent
fundamental values. One recent survey of 7, 700 employed millennials in 29 countries (including 300 in
Canada) reported that 87 percent believe “the success of a business should be measured in terms of more
than just its f inanci al performance.” However, only 58 percent believe that busi nesses ” behave in an ethical
manner.” 89 Chapter 2 discusses the main influences on ethi cal decisions and behaviour in the workplace.
Cor por ate soci al r esponsi bility (CS R) consi sts of organi zati onal acti v ities intended to benefit
society and the environment beyond the f irm’s immedi ate f inancial i nterests or legal obl igati ons.90
I t is the v iew that companies have a contract with society, in which they must serve stakeholders
beyond sharehol ders and customers. In some situati ons, the i nterests of the f irm’s sharehol ders should
be secondary to those of other stakeholder s91 As part of CSR, many companies have adopted the
triple bottom line phi losophy: They try to support or “earn positive returns” in the economic, soci al ,
and environmental spher es of sustainabili ty. F irms that adopt the triple bottom l ine aim to survive and
be profitable i n the marketpl ace (economi c}, but al so to mai ntain or improve conditions for soc iety
(social) as well a~ the physical environment.92 Companies ar e parti cularly eager to become “greener,”
that i s, to mi nimi ze any negative effect they have on the physical environment.
Global Connections 1.2:
21 DAYS OF Y’ELLO CARE93
MTN Group is the largest mobile telecommunications company in Africa and a leader in corpo-
rate social responsibility (CSR). Its award-winning “2 1 Days of Y’ello Care” program involves
many of the company’s 22,000 em ployees annually in CSR events that take place during
the first three weeks of June. These initiatives focus on improving education throughout the
24 African and Middle Eastern countries w here MTN operates.
In recent CSR events, MTN employees installed solar panels (supplied by German firm Mobisol),
electrical cables, and batteries to generate off-grid electricity for lighting at ru ral schools. MTN
volunteers also installed computers and trained teachers to help instruct computer and other
information technology in the classroom.

Chapter One Introduction to the Field of Organizational Behaviour
Mobile telecommunications company MTN Group is a leader in corporate social responsibility
(CSR) across Africa and the Middle East through its annual ” 21 Days of Y’ello Care.”
© REUTERS I Alamy Stock Photo
23
Not everyone agrees that organizations need to cater to a wide variety of stakeholders. Many years
ago, economist Milton Friedman pronounced that “there is one and only one social responsibil ity of
business-to use its resources and engage in activities designed to increase its profits.”94 Friedman is
highly respected for developing economic theory, but few writers take this extreme view today. Indeed,
82 percent of Canadians believe it is a good idea for companies to support causes. A similar percentage
of people across 24 countries believe it is very or somewhat important for their own employers to be
responsible to society and the environment.95 The emerging evidence is that companies with a positive
CSR reputation tend to have better financial performance, more loyal employees, and better relations
with customers, job appl icants, and other stakeholders.96
CONNECTING THE DOTS: AN INTEGRATIVE MODEL
OF ORGANIZATIONAL BEHAVIOUR
Open systems, organizational learning, high-performance work practices, and stakeholders repre-
sent the four perspectives of organizational effectiveness. Organizational effectiveness is the ultimate
dependent variable in organizational behaviour, so it is directly or indirectly predicted by al l other OB
variables. The relationship between organizational effectiveness and other OB variables is shown in
Exhibit 1.6. This diagram is an integrative road map for the field of organizational behaviour, and for
the structure of this book. It is a meta-model of the various OB topics and concepts, each of which has
its own explanatory models. For instance, you w ill learn about employee motivation theories and prac-
tices in Chapter 5 and leadership theories and ski lls in Chapter 12. Exhibit 1.6 gives you a bird’s-eye
view of the book and its various topics, to see how they fit together.
As Exhibit 1.6 illustrates, individual inputs and processes influence individual outcomes, which in
turn have a direct effect on the organization’s effectiveness. For example, how well organizations trans-
form inputs to outputs and satisfy key stakeholders is dependent on how well employees perform their

2 4 Part One Introduction
EXHIBIT 1.6 An Integrative Model of Organi zationa l Behaviour
Organizational Inputs and Processes
• Organizational structure • Organizational change
• Organizational culture • Human resource practices
• Organizational technology • Organizational strategy
/ “…
Individual Team/Interpersonal
Inputs and Processes Inputs and Processes
• Personality/values/competencies • Team tasks/si ze/composition
• Self-concepVperceptions/mindset • Team developmentltrusVcohesion
• Emotions/attitudes • Communication
• Motivation • Leadership (team/organization)
• Self-leadership • Power/influence/politics
• ConflicVnegotiation
l l
Individua l Team/ Interpersona l
O utcomes O utcomes
• Behaviour/performance • Team performance
• Organizational citizenship • Team decisions
• Well-being (low d istress) • Collaboration/mutual support
• Decisions/creativity • Social networks
\ /
Organizational Outcomes (Effectiveness)
• Open systems frt • Human capital devel opment
• Organizational learning (HPWPs)
• Satisfied stakeholders/ethical
conduct
jobs and make logical and creative decisions. Individual inputs, processes, and outcomes are identified
in the two left-side boxes of our integrative OB model and are the centre of attention in Part 2 of this
book. After introducing a model of individual behaviour and results, we will learn about personality
and values-two of the most important individual characteristics-and later examine various individual
processes, such as self-concept, perceptions, emotions, attitudes, motivation, and self-leadership.
Part 3 of this book direct~ our attention to team and interpersonal inputs, processes, and outcomes. These
topics are found in the two boxes on the right side of Exhibit 1.6. The chapter on team dynamics (Chapter 8)
offers an integrative model for that specific topic, which shows how team inputs (team composition, size,
and other team characteri~cs) influence team processes (team development, cohesion, and others), which then
affect team perfonnance and other outcomes. Later chapters in Part 3 examine specific interpersonal and
team processes listed in Exhibit 1.6, including communication, power and influence, conflict, and leadership.
Notice in Exhibit 1. 6 that team processes and outcomes affect individual processes and outcomes.
For instance, an employee’s personal well-being is partly affected by the mutual support he or she
receives from team members and other co-workers. The opposite is also true; individual processes
affect team and interpersonal dynamics in organizations. For example, we will learn that self-concept
among individual team members influences the team’s cohesion.
The top area of Exhibit 1.6 highlights the macro-level influence of organizational inputs and pro-
cesses on both teams and individuals. These organizational-level variables are mainly discussed in Part 4,

Chapter One Introduction to the Field of Organizational Behaviour 25
including organizational structure, organizational culture, and organizational change. However, we w ill
also refer to human resource practices, information systems, and additional organization-level variables
throughout this book where they have a known effect on individual, interpersonal, and team dynamics.
The Journey Begins
This chapter introduces you to the field of organizational behaviour, but it is only the beginning of our
journey. Throughout this book, we will challenge you to learn new ways of thinking about how people
work in and around organizations. We begin this process in Chapter 2 by presenting a basic model of indi-
vidual behaviour, then introducing over the next few chapters various stable and mercurial characteristics
of individuals that relate to elements of the individual behaviour model. Next, this book moves to the team
level of analysis. We examine a model of team effectiveness and specific feantres of high-performance
teams. We also look at decision making and creativity, communication, power and influence, confl ict,
and leadership. Finally, we shift our focus to the organizational level of analysis, where the topics of orga-
nizational structure, organizational culture, and organizational change are examined in detail.
Chapter Summary
LO 1 Defin e organization al behaviour and organizations, an d discuss the importance of this
fi eld of in quiry.
Organizational behaviour is the study of what people think, fee l, and do in and around organizations.
Organizations are groups of people who work interdependently toward some purpose. 08 theories help us
(a) comprehend and predict work events, (b) adopt more accurate personal theories, and (c) influence organiza-
tional event~. 08 knowledge is for everyone, not just managers. 08 theories and practices are highly beneficial for
an organization’s survival and success.
L02 Debate the organizational op portunities and challenges of technological change,
globalization, emerging employment relationships, an d workforce diversity.
Technological change has improved efficiency, interactivity, and well-being, but it has also been a
disruptive force in organizations. Information technology has altered communication patterns and power dynam-
ics at work, and has affected our nonwork time, attention span, and techno-stress. G lobalization, which refers to
various for ms of connectivity with people in other parts of the world, has become more intense than ever before
because of information technology and transportation systems. It has brought more complex ity and new ways of
working to the workplace, requiring additional knowledge and skills. It may be an influence on work intensifica-
tion, reduced j ob security, and lessening work-life balance.
An emerging e mployment relationship trend is the blurring of work and nonwork time and the associated
call for more work-life balance ( minimizing conflict between work and nonwork demands). Another employ-
ment trend is remote work, particularly telework (also called telecommuting), whereby employees work from
home one or more workdays per month rather than commute to the office. Telework potentially benefits
employees and employers, but there are also d isadvantages and its effectiveness depends on the employee, j ob,
and organization. An organ ization’s workforce has both surface-level diversity (observable demographic and
other overt d iffere nces in people) and deep-level diversity (differences in personalities, bel iefs, values, and
attitudes). Diversity may improve creativity and decision making, and provide better awareness and response to
diverse communities. However, diversity also poses challenges, such as dysfunctional conflict and slower team
development.
L03 Discu ss th e anchors on which orga nization al beh aviour knowled ge is b ased.
The multidiscipl inary anchor states that the field s hould develop fro m knowledge in other d is –
c iplines (e.g., psychology, sociology, economics), not just from its own isolated research base.

26 Part One Introductio n
The systematic research anchor states that OB knowledge shou ld be developed us ing sound research methods,
which is cons is tent w ith evidence-based management. The contingency anchor states that OB theories gener-
ally need to consider that there will be different consequences in different situations. The multiple levels of
analysis anchor states th at OB topics may be viewed from the individual, team, and organization levels of
analysis.
L04 Com pare and con tras t th e four perspectives of organizational ef fectiveness.
The open systems perspective views organizations as complex organis ms that “live” within an exter-
nal environment. They depend on the external environment for resources, then use organizational
subsystems to transform those resources into output~ that are returned to the environment. Organ izations receive
feedback from the external environment to maintain a good “fit” with that environment. Fit occurs by adapting to
the environment, in fluenc ing the environment, or moving to a more favourable environment. Effective transforma-
tion processes are efficient, adaptable, and innovative. T he organizational learning perspective states that organi-
zations are effective when they find ways to acquire, share, use, and store knowledge. Intellectual capital consists
of human capital, structural capital, and relationship capital. Knowledge is retained in the organizational memory;
companies also selectively unlearn.
The high-performance work practices (HPWP) perspective identifies a bundle of syste ms and structures to
leverage workforce potential. T he most widely identified HPWPs are employee involvement, job autonomy, devel-
oping employee competencies, and performance/skill-based rewards. HPWPs improve organizational effective-
ness by building human capital, increasing adaptability, and strengthening employee motivation and attitudes. The
stakeholder perspective states that organizations are more effective when they understand, manage, and satisfy
stakeholder needs and expectations. Leaders manage the interests of diverse stakeholders by relying on their per-
sonal and organizational values for guidance. Ethics and corporate social responsibility (CSR) are natural varia-
tions of values-ba~ed organ izations. CSR consists of organizational activities intended to benefit society and the
environment beyond the fir m’s immediate fi nancial interests or legal obl igations.
Key Terms
corporate s ocial r esponsibility (CSR)
d eep -level diversity
ethics
eviden ce-b ased managem en t
globalization
high-performance work p ractices (HPWP)
hum an cap ital
intellectu al ca p ital
lear ning orientation
open systems
organ izational behaviour (0 8 )
orga nization al effectiven ess
orga nization al learning
orga nizations
relations hip capital
stakeh old ers
structural ca p ital
surface-level diversity
telework
valu es
work-life balance
Critical Thinking Questions
I. A friend suggests that organ izational behaviour courses are useful only to people in management careers.
Discuss the accuracy of your friend’s statement.
2. A young college or university student from Canada is interested in doing international business across China,
India, Brazi l, and Russia. Discuss how the knowledge o f OB can be useful to the student.
3. Look through the list of chapters in this textbook and discuss how globalization could in fluence each organi-
zational behaviour topic.
4. “Organ izational theories should follow the contingency approach.” Comment on the accuracy of this
statement.
5. What does evidence-based managemenT mean? Describe situations you have heard about in which companies
have practiced evidence-based management, as well as situations in which companies have relied on fads that
lacked suffic ient evidence of their worth.

Chapter O ne Introd uc tio n to the Field of Organizatio nal Behaviour 27
6. Af ter hearing a seminar on organizational learning, a mining company executive argues that this perspective
is relevant to software and other knowledge bus inesses, but it ignores the fact that mining companies cannot
rely on knowledge alone to stay in business. They also need physical capital (such as extracting and ore-
processing equipment) and land (where the minerals are located). In fac t, these two may be more important
than what employees carry around in their heads. Evaluate the mining executive’s comments.
7. It is said that the CEO and other corporate leaders are keepers of the organization’s me mory. Please discuss this.
8. Corporate social responsibility is one o f the hottest issues in corporate boardrooms these days, partly because
it is becoming increasingly important to employees and other stakeholders. In your opinion, why have stake-
holders given CS R more attention recently? Does abiding by CSR standards potentially cause companies to
have conf licting objectives with specific stakeholders in some s ituations?
9. A common refrain an10ng executives is “People are our most important asset.” Re late this statement to any
two of the four perspectives of organizational e ffectiveness presented in this chapter. Does d1is statement
apply better to some perspectives than to others? Why or why not?
Case Study:
THE FAST-FASHION SUCCESS OF ZARA
by Steven L. McShan e, Cu rtin University (Australia ) and University of Victoria (Can ada)
Spanish retail fashion juggernaut Zara is the flags hip brand of the world’s largest clothing retail company (lndi-
tex, which also owns Pull & Bear, Stradivarius , and other brands). What is the secret to Zara’s s uccess? The
answer is that the organization has created organizational systems , structures, and practices that align with the
complex meaning of organ izational effectiveness.
In the fas hion industry, c ustomer prefere nces change quickly and have limited predictabili ty. Zara main-
tains a close fit w ith that turbule nt environment by experimenting with numerous new s tyles, receiving almost
immediate and continuous feedback a bout which ones are most popular, learning w hat minor adjustments
would make the styles more appealing, and quickly producing and de livering new or revised styles to match
current demand . Zara practically invented the notion of “fast fashion,” whereby the company responds quickly
to customer preferences and fas hion trends. Most other retailers instead produce a limited variety of styles ,
o ffer only two or three batches o f new designs each year, and requ ire up to s ix months for those des igns to
s how up in stores.
The nucleus of this process is an aircraft hangar-sized room at Zara’s headquarters in A Coruiia, Spain. In
the centre of the room is a long line of fac ing desks where regional managers fro m two dozen countries are
in daily contact with each of the company’s 6 ,000 stores in 86 countries. Equally important, sales staf f are
trained to ask customers about why they bought a garment or how a garment could be designed more to their
liking. These c ustomer comments are then quickly reported back to headquarters. On both sides of the room
are designers and other staff who use this continuous store feed back to revise existing styles and spark ideas for
new designs.
S uppose several regional managers receive reports that the new line of women’s white j ackets is sell ing
slowly; however, customers have told sales staf f they would buy that style o f jacket in a cream-colour with
silkier fabric. Designers receive this information and quickly get to work designing a cream-coloured jacket
with the preferred material. Some regional d ifferences exist, of course, but Zara reports that most of its products
are in demand globally. Zara produces a large variety o f designs, but very limited stock fo r each design.Thus ,
the company can san1ple a w ider array o f market preferences whi le minimizing the problem of having too much
inventory. In fact, knowing that Zara’s products are constantly changing attracts customers back to the stores
more often.
Rapid and rich feedback fro m stores is vital, but Zara also thrives because o f its quick response to that feed –
back. Most fashion retailers rely on independent manufacturers in distant countries that require several months’
lead time to produce a garment. Zara also sources from these low-cost manufacturers to some extent, but half of
its garments are made “in proximity” by its own manufacturing faci lities in S pain, Portugal, and Turkey. Nearby
manufacturing costs more, but it often takes less than three weeks for a new design fro m these nearby fac tories
to arrive in stores, which receive new s tock twice weekly.

28 Part O ne Introd uction
Discussion Questions
1. Apply open systems perspective to explain how Zara has been effective in the fast fashion business. What
does the open systems perspective suggest might pose future risks to Zara’s success?
2. Identify other perspectives of organizational effectiveness that explain Zara’s s uccess in more detail.
Source.s: N. Tokatli. “Global Sourcing: Insight’ from the Global C lothing Industry- the Case ofZara. a Fast Fashion
Retailer.” Journal of Economic Geography 8. no. I (2008): 21 – 38: L. Osborne. ” High Street Fashion Chain Zara Is Hit
by ‘Sia>•e Lahour’ Outc ry,” Daily Mail (London. UK), 2013. 25; S.R. Levine. “How Zara Took Customer Focus to New
Heights.” Credi t Union Times (20 1 3): 10: C . Nogueir. “How lnditex Rules the Weaves. and Plans to Carry on Doing
So.” El Pais (Madrid. Spain), 24 April 2013. 4; G. Ruddick. “Spain’s Leader in Fast Fashion Has Much to Teach British
Store Rivals,” Daily Telegraph (London). 15 March 20 13,2: “The Cult ofZara.” Sunday Independent (Dublin, Ireland) .
10 February 2013. 24.
Case Study:
ANCOL LTD.
by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canad a)
Paul Simard wa~ delighted when Ancol Ltd. offered him the job of manager at its Jonquiere, Quebec plant. Simard
was happy enough managing a s mall metal stamping plant with another company, but the headhunter’s invita-
tion to apply for the plant manager job at one of Canada’s leading metal fabrication companies was irresistible.
Although the Jonquiere plant was the s mallest of Ancol’s 15 operations across Canada, the plant manager position
was a valuable first step in a promising career.
One of Simard’s firs t observations at Ancol’s Jonquiere plant was that relations between employees and man-
agement were strained. Taking a page fro m a recent executive seminar he had attended on bu ilding trust in the
workplace, Simard ordered the removal of all time clocks from the plant. Instead, the plant would a~sume that
employees had put in their full shift. This symbolic gesture, he believed, would establish a new level of credibility
and strengthen relations between management and employees at the site.
Initially, the 250 production employees at the Jonquiere plant appreciated their new freedom. They felt
respected and saw this gesture as a sign of positive change fro m the new plant manager. 1\vo months later, how-
ever, problems started to appear. A few people began showing up late, leaving early, or taking extended lunch
breaks. A lthough this represented only about 5 percent of the employees, others found the s ituation unfai r. More-
over, the increa~ed absenteeism levels were beginning to have a noticeable effect on plant productivity. The prob-
lem had to be managed.
Simard asked supervisors to observe and record when the employees came or went and to discuss attendance
problems with those abusing their privileges. But the supervisors had no previous experience with keeping atten-
dance and many Jacked the necessary interpersonal skills to discuss the matter with s ubordinates. Employees
resented the reprimands, so relations with supervisors deteriorated. The additional responsibi lity of keeping track
of attendance also made it difficult for supervisors to complete their other responsibi lities. A fter just a few months,
Ancol fo und it necessary to add another supervisor position and reduce the number of e mployees assigned to each
supervisor.
But the problems did not end there. W ithout time clocks, the payroll department could not deduct pay for the
amount of time that e mployees were late. Instead, a Jetter of reprimand was placed in the e mployee’s personnel
file . However, this required yet more time and additional skills from the s upervisors. Employees did not want these
letters to become a permanent record, so they filed grievances with their labour union. The number of grievances
doubled over six months, which required even more time for both union officials and s upervisors to handle these
disputes.
Nine months after removing the time clocks, Paul Simard met w ith union officials, who agreed that it would
be better to put the time clocks back in. Employee-management relations had deteriorated below the level when
Simard had started. Supervisors were burnt out from overwork. Productivity had dropped due to poorer attendance
records and increased administrative workloads.
A couple of months after the time clocks were put back in place, Simard attended an operations meeting
at Ancol’s headquarters in Toronto. During lunch, Simard described the time clock incident to L iam Jackson,

Chapter O ne Introduction to the Field of Organizational Behaviour 29
Ancol’s plant manager in Northern British Columbia. Jackson looked surprised, then chuckled. Jackson explained
that the previous B.C. plant manager had done something like that with s imilar consequences six or seven years
earlier. T he previous manager had left some time ago, but Jackson heard about the B.C. time clock fro m a supervi-
sor during the manager’s retirement party two months ago.
” I guess it’s not quite like lightning striking the same place twice,” said Simard to Jackson. ” But it s ure feels
like it.”
Discuss ion Questions
I. Discuss the consequences of the time clock re moval on Ancol’s effectiveness as an organization using any
two of the perspectives of organ izational effectiveness.
2. What changes should occur to minimize the likelihood of these problems in the future?
© 2000 Steven L. McShane
Web Exercise:
DIAGNOS ING ORGANIZATIONAL
STAKEHOLDERS
Purpose This exercise is designed to help you understand how stakeholders influence organizations as part of
the open systems anchor.
M aterials S tudents need to select a company and, prior to class, retr ieve and analyze publicly avai lable
information over the past year or two about that company. T his may include annual reports, which are usually
fo und on the websites o f publicly traded companies. Where possible, student~ should also scan full-text
newspaper and magazine databases for articles published over the previous year about the company.
Instructions The instructor may have students work alone or in groups fo r this activity. Students w ill select
a company and investigate the relevance and influence of various stakeholder groups on the organi zation.
S takeholders can be identified from annual reports, newspaper articles, website s tatements, and other available
sources. Stakeholders should be rank-ordered in terms of their perceived importance to the organization.
S tudents should be prepared to present or discuss their rank-ordering of the organ ization’s stakeholders, includ-
ing evidence for this ordering.
Discuss ion Questio ns
I. What are the main reasons why certain stakeholders are more important than others for this organization?
2. On the basis of your knowledge of the organ ization’s environmental situation, is this rank order of
stakeholders in the organi zation’s best interest, or s hould speci fic other stakeholders be given higher priority?
3. What societal groups, if any, are not mentioned as stakeholders by the organi zation? Does this lack of
reference to these unmentioned groups make sense?
Class Exercise:
IT ALL MAKES SENSE?
Purpose This exercise is designed to help you understand how organizational behaviour theories can help you
refine and improve your personal theories about what goes on in organizations.
Instructions Read each of the statement~ below and determine whether each statement is true or false, in
your opinion. The class will consider the answers to each question and discuss the implications for studying
organ izational behaviour.

30
~ True
~ TTrue
rl:- _!.rue
4 . True
5. True
~ – True
7. True
8 . True
9. True
10. True
….__
Part O ne Intro d uctio n
This exerc ise may also be conducted as a team activity, whereby students answer these questions in teams
rather than alone.
–
False A happy wo rker is a prod uctive worker. –
False A decision maker•s effective ness increases w ith the n umber of choices o r alternatives available to he r/him.
False O rgan ization.’i are more effective when they min imize conflict am o ng employees. –
False Employees have mo re power with many close friend’i than wi th many acquaintances.
False Companies are mo re s uccessful whe n they have s tron g corporate cultu res. –
False Employees perform better wi thout stress.
False T he best way to c hange people and organizations is by pinpointi ng the source of thei r current problems.
False Female leaders involve employees in decisions to a greater degree than d o male leaders.
False T he best decisions are mad e withou t emotion.
False
If employees fee l they are paid u nfai rly, nothing other than changing their pay w ill reduce thei r fee lings of
injustice .
Self-Assessment for Chapter 1
SEL F-ASSESSMENT NAME
Are you a good te lecommuter?
DESCRIPTION
Telecommu ting is an increasingly popular Vlorkplace activity. and it po te ntially
offers benefit’i for both companies and telecommu te rs. However. some people are
better s ui ted than others to telecomm uting and other fo rms of remote wo rk. This
self-assessmen t estima tes personal characteristics that relate to e mployee success at
telecommu ting. thereby p rovid ing a ro ugh indication of how well you might adj ust to
telecommu ting.

( PART TWO J Individual Behaviour and Processes
CHAPTER 2
Individual Behaviour, Personality,
and Values
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
LO 1 Describe the four factors that d irectly influence individua l be haviour and performance.
L02 Summa rize the five types of ind ividual behaviour in o rgan izations.
L03 Describe personality and discuss how the ” Big Five” p ersona lity d imensions and four MBTI types
re late to individual behaviour in organizations.
L04 Summa rize Schwartz’s model of individual va lues and discuss the conditions where values influence
b ehaviour.
LOS Describe three ethical principles and d iscuss three factors t hat influence ethical behaviour.
L06 Describe five va lues common ly studied across cultures, and discuss the d iverse cultures
within Canada.
31

32 Part Two Individual Behaviour and Processes
Most companies strive for a safe work environment, but few are as dedicated as Mississauga-based
Mother Parkers Tea & Coffee Inc. As one of North America’s largest private label coffee producers,
Mother Parkers instills safety-oriented behaviour through employee motivation, ability, role clarity,
and situational support. “Safety is the core of everything we do here,” says Chris Meffen, production
manager of Mother Parkers’ award-winning ReaiCup operations.
To motivate safe work behaviour, Mother Parkers employees in Mississauga and Ajax, Ontario,
and Fort Worth, Texas, are actively involved in testing and selecting new safety-oriented equipment.
A special cross-functional committee of employees also conducts “ergo-blitzes” with production
staff to uncover ergonomic risks and recommend solutions.
“We wanted to empower the operators to recogn ize hazards in their work area, voice those
concerns, and to be a part of the solutions; says Adrian Khan, Mother Parkers’ environmental
health and safety manager. “When it comes down to it, they are the experts running the machines
who know exactly what the hazards are in the workplace; adds Khan, who was recently named
Canada’s Safety Leader of the Year by Canadian Occupational Safety magazine.
Ability is the second driver of safe work behaviour. Mother Parkers employees are trained on
safety procedures before they first enter the production floor. They also learn current developments
from community experts at special health and safety day events. Mother Parkers also actively
manages a third driver of safe work behaviour: the physical work environment. For example, the
company’s award-winning state-of-the-art automated production systems include built-in accident
prevention features; highly visible floor markers cue employees to stop and look both ways before
crossing forklift travel areas; and communication boards display the latest safety improvement
statistics as well as key safety information.
Mother Parkers’ fourth ingredient for safe work behaviour is clarifying role expectations.
Specifically, employees are continuously reminded that safety is paramount. These role perceptions
are reiterated through ongoing safety training, employee involvement in ergonomic risk prevention,
and the presence of numerous workplace safety cues. In fact, rem inding everyone about safety is a
daily event. “We begin our production meetings and shift handovers by talking about safety,” says
production manager Chris Meffen.
Safety-focused role expectations also extend to contractors, all of whom complete a safety
training program before their projects begin. “We set expectations and standards with contractors
before they come on site on what it means to be on site at Mother Parkers from a hea lth and safety
perspective; says Mike Bate, vice-president of human resources. 1
M otivati ng staff to be safety conscious, providing ongoing safety training, establishing clear safety-focused role expectations, and creating a safety-first work environment have contrib-
uted to Mother Parkers’ ascension as a workplace health and safety role model in Canada. This
chapter begins by introducing the four direct drivers of individual behaviour and performance that
Mother Parkers applies to ensure that employees consistently engage in safe work behaviours. Next,
we rev iew the fi ve types of individual behaviour that represent the individual-level dependent
variables found in most organ izational behav iour research. The latter half of this chapter focuses
on the two most stable characteristics within individuals, namely their personality and values. We
introduce the two models of personality, discuss how personal values influence behaviour, explain
the main fac tors to consider in ethical behaviour, describe the main types of cross-cultural values,
and examine similarities and d ifferences in personal values across Canada and with people in the
United States.
MARS Model of Individual Behaviour and Performance
For most of the past century, experts have investigated the direct predictors of indi-
vidual behaviour and performance.2 One of the earliest formu las was performance
= person x situation, where person includes individual characteristics and situa-
tion represents external influences on the indiv idual ‘s behaviour. Another frequent ly mentioned

Chapter Two Individual Behaviour, Personality, and Values 3 3
formula is performance = ability x motivation. 3 Sometimes known as the ” ski ll-and-w ill” model,
th is formu la elaborates two specific characteristics within the person that influence indiv idual
performance. Some organizational studies use the ability-motivation-opportunity (AMO) model,
which refers to the three variables but w ith a limited interpretation of the situation. Along w ith
ability, motivation, and situation, researchers have more recently identified a fourth key direct
pred ictor of ind ividual behav iour and performance: role perceptions (the indiv idual’s expected
role obl igations).4
Exhibit 2 . 1 illustrates these four variables-motivation, abi lity, role perceptions, and situational
factors-which are represented by the acronym MARS. 5 All four factors are critical influences on an
individual’s voluntary behaviour and performance; if any one of them is low in a given situation, the
employee will perform the task poorly. For example, motivated salespeople w ith clear role perceptions
and suffic ient resources (situational fac tors) will not perform their jobs a~ well if they lack sales skills
and related knowledge (ability). Motivation, ability, and role perceptions are clustered together in the
model because they are located within the person. Situational factors are external to the individual but
still affect his or her behaviour and performance.6 The four MARS variables are the direct predictors
of employee performance, customer service, co-worker collegiality, ethical behaviour, and all other
forms of voluntary behaviour in the workplace. Let’s look in more detail at each of the four factors in
the MARS model.
EMPLOYEE MOTIVATION
Motivation represents the forces within a person that affect his or her direction, intensity, and per-
sistence of voluntary behaviour.7 Direction refers to the path along which people steer their effort. In
other words, motivation is goal-directed, not random. People have choices about what they are trying
to achieve and at what level of qual ity, quantity, and so forth. They are motivated to arrive at work on
time, finish a project a few hours early, or aim for many other targets.
The second element of motivation, cal led intensity, is the amount of effort al located to the goal.
Intensity is al l about how much people push themselves to complete a task. Two employees might be
motivated to finish their project a few hours early (direction), but only one of them puts forth enough
effort (intensity) to achieve this goal. The third element of motivation is persistence, which refers to the
length of time that the individual continues to exert effort toward an objective. Employees sustain their
effort until they reach their goal or give up beforehand.
To help remember these three elements of motivation, consider the metaphor of driving a car in
which the thrust of the engine is your effort. Direction refers to where you steer the car, intensity is how
EXHIBIT 2.1 MARS Model of Indiv id ual Behaviou r and Re sults
Indiv idual
characteristics MARS M ode l
Behaviour
and results
• ‘ll*llllfl- ct
· Oiz , ,. … ….
• C I QCixl& ………..
• JIIJIIJIIu ..
.. SC I Zt
·?I IIII s
c 1 Cl

3 4 Part Two Individual Behaviour and Processes
much you put your foot down on the gas pedal, and persistence is for how long you drive toward your
destination. Remember that motivation is a force that exists within individuals; it is not their actual
behaviour. Thus, direction, intensity, and persistence are cognitive (thoughts) and emotional conditions
that directly cause us to move.
ABILITY
Employee abilities also make a d ifference in behaviour and task performance. Ability includes both
the natural aptitudes and the learned capabilities required to successfully complete a task. Aptitudes
are the natural talents that help employees learn spec ific tasks more quickly and perform them
better. For example, finger dexterity is an aptitude by which individuals learn more quickly and
potentially achieve higher performance at picking up and handli ng small objects with their fingers.
Employees w ith high finger dexterity are not necessarily better than others at first; rather, they usu-
ally learn the skill faster and eventually reach a higher level of performance. Learned capabilities
are the physical and mental skills and knowledge you have acquired. They tend to wane over time
when not in use. Aptitudes and learned capabil it ies (ski lls and knowledge) are the main e lements of
a broader concept called competencies, which are characteristics of a person that result in superior
performance. 8
The challenge is to match a person’s abil ities with the job’s requirements because a good match
tends to increase employee performance and well-being. One matching strategy is to select applicants
who already demonstrate the required competencies. For example, companies ask applicants to perform
work samples, provide references for checking their past performance, and complete various selection
tests. A second strategy is to train employees who lack specific knowledge or skills needed for the job.9
• by t he NUMBERS
Mind the MARS Gap on Ability, Role Perceptions, and Situational
Factors 10
of 500 Canadian senior
executives say that
finding skilled workers is
somewhat or very difficult
of more than 13,000
employees surveyed
across 34 countries
say the skills gap is a
real problem for their
employer.
of 2.2 m illion employees
surveyed worldwide
strongly agree that they
know what is expected of
them at work.
25″,.{, of 2,061 U.K. adults surveyed
say they receive insufficient
training and development
in their existing role.
24~ of more than 400,000 l
employees surveyed across
500 organizations worldwide
say that lack of tools is their top
source of decreased productivity
(second highest to unproductive
co-workers).

Chapter Tw o Individual Behaviour, Personality, and Values 35
The third person-job matching strategy is to redesign the job so that employees are given tasks only
within their current abilities. For example, a complex task might be simplified-some aspects of the
work are transferred to others-so a new employee performs only tasks that he or she is currently able
to perform. As the employee becomes more competent at these tasks, other tasks are added back into
the job.
ROLE PERCEPTIONS
Along with motivation and abi lity, employees require accurate role perceptions to perform their jobs
well . Role perceptions refer to how clearly people understand the job duties (roles) assigned to or
expected of them. These perceptions range from role clarity to role ambiguity. When 7,000 employees
in a global survey were asked what would most improve their performance, “greater clarity about what
the organization needs from me” was identified as the most important fac tor. 11
Role clarity ex ists in three fo rms. First, employees have clear role perceptions when they under-
stand the specific duties or consequences for which they are accountable. This may seem obvious,
but employees are occasionally evaluated on job duties they were never told wa~ within their zone of
responsibility. This Jack of role clarity may be an increasing concern as organizations move away from
prec isely defined job descriptions to broader work responsibilities.
Second, role clarity exists when employees understand the priority of their various tasks and
performance expectations. This is illustrated in the cla~sic dilemma of prioritizing quantity versus
quality, such as how many customers to serve in an hour (quantity) versus how well the employee
should serve each customer (quality). Role clarity in the form of task priorities also exists in the
dilemma of al locating personal time and resources, such as how much time managers should devote
to coaching employees versus meeting with clients . The third form of role perceptions involves under-
standing the preferred behaviours or procedures for accomplishing tasks. Role ambiguity exists when
an employee knows two or three ways to perform a task, but misunderstands which of these the com-
pany prefers.
Role perceptions are important because they represent how well employees know where to direct
their effort.12 Employees with role clarity perform work more accurately and efficiently whereas those
with role ambiguity waste considerable time and energy by performing the wrong tasks or the right
ta~ks in the wrong way. Furthermore, role clarity is essential for coordination with co-workers and
other stakeholders. For instance, performers at Canada’s Cirque du Solei] depend on each other to
perform precise behaviours at exact times, such as catching each other in mi dair. Role clarity ensures
that these expectations are met and the performances are executed safely. Finally, role clarity motivates
employees because they have a higher bel ief that their effort will produce the expected outcomes. In
other words, people are more confident exerting the required effort when they know what is expected
of them.
SITUATIONAL FACTORS
Individual behaviour and performance also depend on the situation, which is any context beyond the
employee’s immediate control. 13 The situation has two main infl uences on individual behaviour and
performance. 14 One infl uence is that the work context constrains or facilitates behaviour and perfor-
mance. Employees who are motivated, ski lled, and know their role obligations will nevertheless per-
form poorly if they Jack time, budget, physical work facilities, and other resources.
The other influence is that the work environment provides cues to guide and motivate people.
Mother Parkers Tea & Coffee uses many cues throughout the production floor to warn employees
of safety risks and guide their behaviour to minimize those risks. For example, forklift routes are
clearly marked, and painted footprints on both sides show employees where to stop before proceeding
to cross. Barriers and warni ng signs are sin1ational fac tors that cue employees about moving forkl ifts
and other hazards.

36 Part Tw o Individual Behaviour and Processes
Global Connections 2.1:
ICELAND FOODS TAKES MARS TO SUCCESS
In the U.K.’s highly competitive retail foods market, Iceland Foods Group Ltd. continues to
perform well, was recently named the nation’s best online supermarket, and is consistently
rated as one of the top dozen places to work in the U.K.
The key drivers of Iceland Foods’ success are the four variables depicted in the MARS
model. Employees are motivated by a living wage (higher than most supermarkets), an inspir-
ing CEO, and individual and store-level incentives. “A well-motivated staff is priceless,” says
Iceland’s founder and CEO Malcolm Walker. “That is our secret weapon.”
Iceland Foods also boasts some of the highest employee scores on ability (most staff
members say they receive all the training they need to do their job well), role clarity (most say
they are clear about what is expected of them in their jobs). and situational support (most say
managers ensure they have the resources needed to do the job). 15
Iceland Foods Group has become one of the most successful food retailers in the United
Kingdom through the four variables in the MARS model.
Courtesy of Iceland Foods.
Types of Individual Behaviour
The four elements of the MARS model-moti vation, abil ity, role percepti ons, and si tu-
ational factors-affect all voluntary workpl ace behaviours and per formance. There are
many varieties of indi vidual behaviour, but most can be organized i nto the five cat-
egories described over the next few pages: task perfor mance, organizational citizenship behaviours,
counterproducti ve work behaviours, j oini ng and staying with the organization, and maintai ning work
attendance (Exhibit 2.2).

Chapter Two Individual Behaviour, Personality, and Values 3 7
EXHIBIT 2.2 Five Types of Individual Behaviour in the Workplace
TASK PERFORMANCE
Task performance refers to the individual’s voluntary goal-directed behav iours that contrib-
ute to organizational objectives. 16 Most jobs require incumbents to complete several tasks. For
example, fore ign exchange traders at RBC Capital Markets in Toronto and elsewhere must be able
to identify and execute profitable trades, work cooperatively with clients and co-workers, assist
in training new staff, and work on special telecommunications equipment without error. All tasks
involve various degrees of working with people, data, th ings, and ideas. 17 Fore ign exchange trad-
ers, for instance, mai nly work with data (e.g., perform ing techn ical analysis of trends}, people
(e.g., sharing information with co-workers and clients), and ideas (interpreting charts and eco-
nom ic reports).
There are three types of task performance: proficient, adaptive, and proactive. 18
Proficient task performance refers to performing the work efficiently and accurately. It involves
accomplishing the a~signed work at or above the expected standards of qual ity, quantity, and
other indicators of effectiveness.
Adaptive task performance refers to how well employees modify their thoughts and behav-
iour to align with and support a new or changing environment. Essentially, adaptive task
performance is about how well employees respond to change in the workplace and in their
job duties.
Proactive task performance refers to how well employees take the initiative to anticipate and
introduce new work patterns that benefit the organization. Proactive behaviours bring about
change in oneself, co-workers, and the workplace to achieve what is perceived to be a better
future for the organization.
Employees in almost every job are expected to perform their work proficiently. However, adaptive
and proactive task performance are also important when the work is ambiguous. This ambiguity exists
in many situations, such as when the cl ient’s expectations are unclear, resources to perform the work
have uncertain availability, and the methods used to perform the work are rapidly evolving due to
emerging technology.

38 Part Two Individual Behaviour and Processes
ORGANIZATIONAL CITIZENSHIP
Employee behaviour extends beyond performing specific tasks. It also includes various forms of coop-
eration and helpfulness to others that support the organization’s social and psychological context. 19
These activities are called or ganizational citizenshi p beh aviours (OCBs). Some OCBs are directed
toward individuals, such as assisting co-workers with their work problems, adjusting a~signed work
schedules to accommodate co-workers, showing genuine courtesy toward co-workers, and sharing
work resources (supplies, technology, staff) with co-workers. Other OCBs represent cooperation and
helpfulness toward the organization, such as supporting the company’s publ ic image, offering ideas
beyond those required for one’s own job, attending voluntary functions that support the organization,
and keeping up w ith new developments in the organization.
Early literantre defined OCBs a~ discretionary behaviours (employees don’t have to perform them), whereas
more recent studies indicate that some OCBs are a job requirement even if they aren’t explicitly stated. In fact,
OCBs may be as important a~ ta~k performance when managers evaluate employee performance.20
OCBs can have a significant effect on individual, team, and organizational effectiveness.21 Employ-
ees who help others have higher task performance because they also receive more support from co-
workers. OCBs also increase team performance where members depend on each other. However,
engaging in OCBs can have negative consequences.22 OCBs take time and energy away from perform-
ing tasks, so employees who give more attention to OCBs r isk lower career success in companies that
reward task performance. Also, employees who frequently perform OCBs tend to have higher work-
fam ily confl ict because of the amount of time required for these activities.
COUNTERPRODUCTIVE WORK BEHAVIOURS
Organizational behaviour is interested in all workplace behaviours, including dysfunctional activities
collectively known as count erpr od uctive work behaviours (CWBs). CWBs are voluntary behaviours
that have the potential to directly or indirectly harm the organization or its stakeholders23 This concept
includes a wide array of intentional and unintentional behaviours, such as harassing co-workers,
creating unnecessary confl ict, deviating from preferred work methods (e.g., shortcuts that undermine
work qual ity), being untruthful, steal ing, sabotaging work, and wa~ting resources. CWBs are not minor
concerns; research suggests that they can substantially undermine the organization’s effectiveness.
JOIN ING AND STAYING WITH THE ORGANIZATION
Organizations consist of people working together toward common goals, so another critical set of
behaviours is joining and staying with the company.
24
In spite of the slow economic recovery and high
unemployment in several parts of Canada, many companies struggle to find suitable applicants for some
types of jobs. A recent large-scale survey reported that 77 percent of Canadian employers have mod-
erate to extreme difficulty recruiting talent and 42 percent of business leaders say the skills shortage
has resulted in productivity problems in their organization. For instance, B.C. Children’s Hospital wa~
recently forced to close two of its eight operating rooms due to a shortage of trained pediatric nurses.25
Even when companies are able to hire qualified staff in the face of shortages, they need to ensure that
these employees stay with the company26 Employee turnover removes valuable knowledge, skills, and rela-
tionships with co-workers and external stakeholders, all of which take time for new staff to acquire. In later
chapters, we identify other problems with employee turnover, such a~ its adverse effect on customer service,
team development, and corporate culture strength. Employee turnover does offer some benefits, such a~
removing people with counterproductive work behaviours and opening up positions to new employees with
fresh ideas. But overall, turnover tends to have a negative effect on organizational effectiveness.
MAINTAINING WORK ATTENDANCE
Along with attracting and retaining employees, organizations need everyone to show up for work at
scheduled times. Statistics Canada reports that Canadian employees miss an average of 8.3 days of
scheduled work each year, compared to approximately 6.5 days and 4.5 days per year in the United
Kingdom and United States, respectivelyY

Chapter Two Individual Behaviour, Personality, and Values 39
What are the main causes of absenteeism and lateness?28 Employees often point to situational factors,
such a~ bad weather, transit strike, personal illness, and family demands (e.g., sick children). These are usu-
ally valid explanations, but some people still show up for work because of their strong motivation to attend,
whereas others take sick leave at the slightest sign of bad weather or illness. Some absenteeism occurs
because employees need to get away from workplace bullying, difficu lt customers, boring work, and other
stressful conditions. Absenteeism is also higher in organizations with generous sick leave because this ben-
efit minimizes the financial loss of taking time away from work. Another factor in absenteeism is the per-
son’s values and personality. Final ly, sntdies report that absenteeism is higher in teams with strong absence
norms, meaning that team members tolerate and even expect co-workers to take time off.
Presenteeism Although most companies foc us on problems with absenteeism, presenteeism may
be more serious in some situations29 Presentee ism occurs when people attend work even though their
capacity to work is significantly diminished by illness, fatigue, personal problems, or other factors.
These employees tend to be less productive and may reduce the productivity of co-workers. In addition,
they may worsen their own health and increase health and safety risks fo r co-workers. Presenteeism is
more common among employees with low job security (such as new and temporary staff), employees
who lack sick leave pay or similar financ ial buffers, and those whose absence would immediately affect
many people. Personality also plays a role; some people possess traits that motivate them to show up for
work when others would gladly recover at home.30 Personality is a widely cited predictor of most forms
of individual behaviour. It is also the most stable personal characteristic, so we introduce this topic next.
Global Connections 2.2:
THE DOCTOR IS ILL … BUT WILL SEE YOU NOW
Most physicians urge sick patients to stay home, yet few take their own advice. Three-quarters
of New Zealand doctors working in hospitals say they went to work while unwell over the
previous year. Approximately the same percentage of Swedish doctors recently surveyed
admitted that over the previous year they had gone to work one or more times with an illness
for which they would have advised patients to stay at home.
“Presenteeism is the elephant in the room that nobody wants to talk or do anything about,”
suggests Michael Edmond, an executive and physician at the University of Iowa Hospitals &
Clinics. It is difficult for medical centres to find a replacement on short notice and many doctors
feel guilty letting down their co-workers
and patients.
“There is an unspoken understand-
ing that you probably shou ld be on
your deathbed if you are calling in sick,”
says an attending physician at a Phila-
delphia hospital where 83 percent of
doctors admitted working while sick
within the past year. “It inconveniences
my colleagues, is complicated to pay
back shifts, and makes me look bad to
do so.”31
Presenteeism is a serious problem among
physicians, even though they urge their
unwell patients to stay away from work
until recovered.
©Shutterstock/pathdoc

40 Part Tw o Individual Behaviour and Processes
Persona lity in Organizations
Getting hired at Bridgewater Associates-the world’s largest hedge fund-is not a cake-
walk. The process begins with applicants watching onl ine videos depicting the culture
and daily office life at the Westport, Connecticut, investment firm. Next, they spend two
or three more hours completing four online assessments, including a popular measure of personal ity
traits (MBTI). Applicants who pass the online selection process engage in a structured interview over
the phone with consultants, who further assess the individual’s character. Even after accepting Bridge-
water’s job offer, new recruits take a final two-hour personality test developed by the company. Bridge-
water then uses the application data to produce the new hire’s “baseball card” -a compact profile of
his or her personality, abilities, culture fit, and performance. Bridgewater employees can view any co-
worker’s profile on their phone or tablet using the firm ‘s highly secure ba~eball card app.32
The hiring process at Bridgewater Associates is unusual. But one practice the hedge fund ha~ in
common with many organizations is it~ attempt to measure each job applicant’s personality- the
relatively enduring pattern of thoughts, emotions, and behaviours that characterize a person, along
with the psychological processes behind those characteristics.33 In essence, personality is the bundle of
characteristics that make us similar to or different from other people. We estimate an individual’s per-
sonality by what he or she says or does, and we infer the person’s internal states-including thoughts
and emotions-from these observable behaviours.
People engage in a w ide range of behaviours in their daily lives, yet close inspection of those actions
reveals discernible patterns called personality traits. 34 Traits are broad concepts that al low us to label
and understand individual differences. For example, you probably have some fr iends who are more
talkative than others. Some people like to take risks whereas others are risk-averse. Each trait impl ies
that there is something within the person, rather than environmental influences alone, that predicts
this behavioural tendency. In fact, studies report that an individual’s personality traits mea~ured in
childhood predict various behaviours and outcomes in adulthood, including educational attainment,
employment success, marital relationships, illegal activities, and health-risk behaviours.35
Although people have behavioural tendencies, they do not act the same way in all situations. Such
consistency would be considered abnormal because it indicates a person’s insensitivity to social norms,
reward systems, and other external conditions?6 People vary their behaviour to suit the situation, even
if the behaviour is at odds with their personal ity. For example, talkative people remain relatively quiet
in a library where “no talking” rules are explicit and strictly enforced. Even there, however, personal ity
differences are apparent because talkative people tend to do more chatting in libraries relative to other
people in that setting.
PERSONALITY DETERMINANTS: NATURE VERSUS NURTURE
Personality is shaped by both nature and nurture, although the relative importance of each continues to
be debated and studied.37 Nature refers to our genetic or hereditary origins-the genes that we inherit
from our parents. Studies of identical twins reveal that heredity has a very large effect on personality;
up to SO percent of variation in behaviour and 30 percent of temperament preferences can be attr ibuted
to a person’s genetic characteristics. In other words, genetic code not only determines our eye colour,
skin tone, and physical shape; it also significantly affects our attitudes, decisions, and behaviour.
Personality is also shaped by nurture–our social ization, life experiences, and other forms of inter-
action w ith the environment. Personality develops and changes mainly from childhood to young adult-
hood, typical ly stabilizing by around age 30. However, some personality changes continue to occur
later in life. For instance, a few traits (openness to experience, social vitality) increase through to
young adulthood, then decline in later years, whereas other traits (agreeableness, conscientiousness)
tend to increase through to late life. Our personal ity can also change somewhat as a result of our job
characteristics over a long time period.38
The main explanation for why personality becomes more stable by adulthood is that we form a clearer
and more rigid self-concept. This increasing clarity of “who we are” anchors our behaviour with the help

Chapter Two Individual Behaviour, Pe rsonality, and Values 4 1
of the executivefimction. This is the part of the brain that monitors and regulates goal-directed behaviour
to keep it consistent w ith our self-conc ept. Our understanding of who we are becomes clearer and more
stable w ith age, which increases the stability and consistency of our personal ity and behaviour.39 We dis-
cuss self-concept in more detail in Chapter 3. The main point here is that personality is not completely
determined by heredity; it is also shaped by life exper iences, particularly early in a person’s life.
Can you identify personality traits from blogging words? You can discover how
well you interpret someone’s personality in blogs and other writing by completing
th is self-assessment in Connect.
FIVE-FACTOR MODEL OF PERSONALITY
Hundreds of personality traits (e.g., sociable, anxious, curious, dependable, suspicious, talkative,
adventurous) have been described over the years, so experts have tried to organize them into smaller
clusters. The most researched and respected clustering of personality traits is the five-fa ctor (Big Five)
mod el (FFM).40 Several decades ago, personality experts identified more than 17,000 words that
describe an individual’s personal ity. These words were distilled down to fi ve broad personality dimen-
sions, each with a cluster of specific traits. Similar results were found in studies of differe nt languages,
suggesting that the fi ve-factor model is fairly robust across cultures. These ” Big Five” dimensions,
represented by the handy acronym CANOE, are outlined in Exhibit 2.3 and described below.
Conscientiousness. Characterizes people who are organized, dependable, goal-focused, thor-
ough, disciplined, methodical, and industr ious. People with low conscientiousness tend to be
careless, disorganized, and Jess thorough.
Agreeableness. Describes people who are trusting, helpful, good-natured, considerate, tolerant,
selfl ess, generous, and flexible. People with low agreeableness tend to be uncooperative and
intolerant of others’ needs as well as more suspicious and self-focused.
EXHIBIT 2.3 Five-Factor Model Personality Dimensions
Personality People with higher scores on this dimension
dimension tend to be more:
Organized, dependable, goal-focused, thorough,
disciplined, method ical, industrious
Trusting, helpfu l, good-natured, considerate, tole rant,
selfless, generous, flexi ble
Anxious, insecure, se lf-con scious, depresse d,
temperame ntal
Imaginative, cre ative, unconventional, curious,
nonconfo rming, autonomous, perceptive
Outgoing, ta lkative , energetic, sociable, assertive

42 Part Two Individual Behaviour and Processes
Neur oticism. Refers to people who tend to be anxious, insecure, self-conscious, depressed, and
temperamental. In contrast, people w ith low neuroticism (high emotional stability) are poised,
secure, and calm.
Openn ess to experience. This dimension is the most complex and has the lea~t agreement
among scholars. It generally refers to the extent to which people are imaginative, creative,
unconventional, curious, nonconforming, autonomous, and aesthetically perceptive. Those who
score low on this dimension tend to be more resistant to change, less open to new ideas, and
more conventional and fixed in their ways.
Extr aver sion. Describes people who are outgoing, talkative, energetic, soc iable, and assertive.
The opposite is imroversion, which characterizes those who are quiet, cautious, and less inter-
active with others. Extraverts get their energy from the outer world (people and things around
them), whereas introverts get their energy from the internal world, such as personal reflection
on concepts and ideas. Introverts do not necessarily lack social skills. Rather, they are more
inclined to direct their interests to idea~ than to social events. Introverts feel quite comfortable
being alone, whereas extraverts are less comfortable without social interaction.
What is your B ig Fi ve personality? You can discover your Big Five personality by
completing this self-assessment in Connect.
Are you introverted or extraverted? You can discover your level of introversion or
extraversion by completing this self-assessment in Connect.
Five-Factor Model and Work Performance Personal ity mainly affects behaviour and per-
formance through motivation, specifically by influencing the individual’s choice of goals (direction)
as well as intensity and persistence of effort toward those goals. Consequently, all of the five-factor
model dimensions predict one or more types of employee behaviour and performance to some extent.
However, the Big Five dimensions cluster several specific traits, each of which can predict employee
performance somewhat differently from others in the cluster. In fact, some experts suggest that per-
formance is better predicted by the specific traits than by the broad Big Five dimensions. Another
observation is that the relationship between a personal ity dimension or trait and performance may be
nonl inear. People w ith moderate extraversion perform better in sales jobs than those w ith high or low
extraversion, for example.4 1
Exhibit 2.4 identifies the Big Five personality dimensions that best predict five types of work behav-
iour and performance.42 Conscientiousness stands out a~ the best overall personality predictor of pro-
fic ient ta~k performance for most jobs. More precisely, proficient ta~k performance has the strongest
association w ith the specific conscientiousness traits of industriousness (achievement, self-disc ipline,
purposefulness) and dutifu lness. Consc ientious employees set higher personal goals for themselves
and are more persistent. They also engage in more organizational citizenship and in less counterpro-
ductive work behaviour. Conscientiousness is a weak predictor of adaptive performance (responding to
change) and proactive performance (taking initiative toward new work patterns). In fact, two specific
conscientiousness traits-orderliness and dependabil ity-tend to suppress adaptivity.
Extraversion is the second best overall personality predictor of proficient task performance, but it is
much weaker than conscientiousness. The specific extraversion dimension traits of assertiveness and
positive emotionality are the strongest predictors within this dimension. Assertive employees with pos-
itive emotionality frame situations as challenges rather than threats, so they have a stronger “can-do”
belief. Extraversion also predicts both adaptive and proactive performance, possibly because extraverts
are comfortable engaging w ith their environment. Extraversion is associated w ith influencing others
and being comfortable in social settings, which explains why effective leaders and salespeople tend to
be somewhat more extraverted than the general population.

Chapter Two Ind iv id ual Behaviour, Pe rsonality, and Val ues
EXHIBIT 2.4 Big Five Personality and Work Performance
Type of
Performance
Rel evant
Personality
Dimensions
Proficient task
performance
• Conscientiousness
• Extraversion
Adaptive task
performance
• Emotional stability
• Extraversion (assertiveness)
• Openness to experience
Proactive task
performance
• Extraversion (assertiveness)
• Openness to experience
43
Type of
Performance
Organizational
citizenship
Counterproductive
work behaviours
Relevant
Personality
Dimensions
• Conscientiousness
• Agreeableness
• Conscientiousness’
• Agreeableness·
“Negative relationship.
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Aha-SoftiSh uuerstodc RF: (bottom-right): Sign N S ymbol Productio n/Shunerstock RF
Agreeableness is positively associated with organizational citizenship and negatively associated
with counterproductive work behaviours.43 The reason is that employees with high agreeableness are
motivated to be cooperative, sensitive, flexib le, and supportive. Agreeableness does not predict profi-
cient or proactive task performance very well, mainly because it is associated w ith lower motivation to
set goals and achieve results. However, agreeableness does predict one’s performance as a team mem-
ber as well as in customer service jobs.
Openness to experience is a weak predictor of profi cient task perfo rmance, but it is one of the best
personality predictors of adaptive and proactive performance. The mai n reason is that employees w ith
higher openness scores have more curiosity, imagination, and tolerance of change.44 These traits also
explain why openness to experience is associated w ith successfu l perfo rmance in creative work.
Emotional stability (low neuroticism) is one of the best personality predictors of adaptive perfor-
mance.45 Employees w ith higher emotional stability cope better with the ambiguity and uncertainty of
change. In contrast, those with higher neuroticism view change as a threat, so they tend to avoid change
and experience more stress when faced w ith workplace adjustments. These characteristics would sug-
gest that emotional stability also predicts proactive perfor mance, but the limited research has reported
mixed results. Emotional stability is associated w ith proficient task perfor mance, organizational cit-
izenship, and counterproductive work behaviours, but its influence is neither strong nor consistent
enough to be listed in Exhibit 2.4.
JUNGIAN PERSONALITY THEORY AND
THE MYERS-BRIGGS TYPE INDICATOR
The fi ve-factor model of personality has the most research support, but it is not the most popular per-
sonality test in organizations. That distinction goes to Jungian personality theory, which is measured
through the Myer s-Briggs Typ e Indicator (MBTI) (see Exhibit 2 .5). Nearly a century ago, Swiss

4 4 Part Two Individual Behaviour and Processes
EXHIBIT 2.5 Jungian and Myers-Briggs Personality Types
Bllst-d 1m data from CPP. Inc .. Mmmlllin View. CA 994043 from lntmduction 1<1 Type lmd Ca"e-rs by Allen L. Hammer. psychiatrist Carl Jung proposed that personality is primarily represented by the individual's prefer- ences regarding perceiving and judging information.46 Jung explained that the perceiving function- how people prefer to gather information or perceive the world around them-occurs through two competing orientations: sensing (S) and intuition (N). Sensing involves perceiving information directly through the five senses; it relies on an organized structure to acquire factual and preferably quantita- tive details. In contrast, intuition relies more on insight and subjective experience to see relationships among variables. Sensing types focus on the here and now, whereas intuitive types focus more on future possibilities. Jung also proposed that judging-how people prefer maki ng decisions based on what they have perceived-consists of two competing processes: thinking (T) and feeling (F). People with a thinking orientation rely on rational cause-effect logic and systematic data collection to make decisions. Those with a strong fee ling orientation, on the other hand, give more weight to their emotional responses to the options presented, as well as to how those choices affect others. Jung noted that in addition to the four core processes of sensing, intuition, thinki ng, and fee ling, people d iffer in their level of extravers ion-introvers ion, which was introduced earl ier as one of the Big Five personality traits. The MBTI measure was developed two decades after Jung published his personality model. Along with measuring the personal ity traits described above, the MBTI instrument assesses people on lung's broader categories of perceiving and judging, which represents one's attitude toward the external world. Those with a perceiving orientation are open, curious, and flexible. They prefer to keep their options open and to adapt spontaneously to events as they unfold. Judging types prefer order and structure and want to resolve problems quickly. Chapter Two Individual Behaviour, Personality, and Values 45 As CEO (now executive chair) of Hawa ii's Central Pacific Bank, John Dean realized that the executive team needed to work together better to rebuild the bank and its culture. The executives completed the Myers-Briggs Type Indicator w ith debriefing by executive coaches. The executives shared their results to gain a better understanding of each other's personality, particularly how they perceive things and analyze information. "Knowing this personal information leads to more trust," says Dean, shown in this photo. He has noticed that disagreements are now resolved more easily. "Knowing more about someone's personality can help alleviate some of those problems that crop up when management teams work together." 47 © Tina Yuen/Pocific Business News. There are several reasons why the MBTI is popular, but it is usually a poor predictor of job per- formance and is not recommended for employment selection or promotion decisions.48 There are also issues with its measurement. MBTI can potentially identi fy employees who prefer face-to-face versus virrual teamwork, but it does not predict how well a team develops. It also has questionable value in predicting leadership e ffectiveness . In spite of these limitations, the MBTI is the most widely srudied measure of cognitive style in management research and is the most popular personality test for career counselling and executive coaching.49 It is even being used by arti ficial intell igence engineers to adapt the behaviour of robots to user preferen ces . MBTI takes a neutral or balanced approach by recognizing both the strengths and limitations of each personality type in different siruations. In contrast, the Big Five model views people with higher scores as better than those with lower scores on each dimension. As such, the Big Five model may have adopted a restrictive view of personality that is more difficult to apply in coaching and development settings. 5° Are you a sensing or intuitive type? You can d iscover the extent to wh ich you are a sensin g or intuitiv e type by completing this self-assessment in Connect. 46 Part Two Individual Behaviour and Processes ~ t 'r'' Debating Point: SHOULD COMPAN IES USE PERSONALITY TESTS TO SELECT JOB APPLICANTS? Personality theory has made significant strides over the past two decades, particularly in demonstrating that specific traits are associated with specific workplace behaviours and out- comes. Various studies have reported that the Big Five dimensions predict overall jo b perfor- mance, organizational citizenship, leadership, counterproductive work behaviours, tra ining performance, team performance, and a host of other important outcomes. These find ings cast a strong vote in favour of personality testing in the workplace. A few prom inent persona lity experts urge caution, however. 5 1 They point out that although traits are associated with workplace behaviour to some extent, there are better predictors of work performance, such as work samples and past performance. Furthermore, depend ing on how the selection decision applies the test results, personality instruments may unfairly discriminate against specific groups of applicants or employees. 52 A third concern is that selection procedures typically assume that more is better; that is, applicants with the highest scores will perform better than applicants with lower scores. Yet an increasing num ber of studies indicate that the best candidates might be closer to the mid- dle than the extremes of the range. For instance, jo b performance apparently increases with conscientiousness, yet em ployees with very high conscientiousness mig ht be so thorough that they become perfectionists, which can stifle rather than enhance job performance.53 A fourth worry is that most persona lity tests are self-report scales, so applicants might try to fake their answerss• Worse, the test scores might not represent the ind ividual's personal- ity or anything else meaningful because test takers often don't know what personality traits the company is looking for. Studies show that candidates who try to fake "good" persona lity scores change the selection results, but supporters of personality testing offer the counterar- gument that few job applicants try to fake their scores. One major study recently found that most personality dimensions are estimated better by observers than by self-ratings. However, few compan ies rely on ratings from other people. 5 5 Va lues in the Workplace As an award-winning " employer of choice" i n the Canadian telecommunications indus- try, A dvantage Tower Ltd. wants the personal val ues of its employees to be similar to the company's core val ues. "Staff w ill ask themselves if their values ali gn with the organi- zation, and if they feel empowered," says Allison Earl, CEO of the Calgary-based wireless tower and antenna construction and maintenance firm. She explai ns that employees have a much clearer under- standi ng of what is expected of them when they understand and bel ieve in the company's val ues. "We can accomplish a Jot more with everyone working hard where the goal s and values of the company are al igned with the goal s and the aspirations of its people," Earl observes.s6 Advantage Tower executi ves recognize that employees pay attention to their personal values when deciding where to work and what choices they make every day on the job. Values, a concept that we introduced i n Chapter I , are stable, evaluative bel iefs that guide our preferences for outcomes or courses of acti on in a vari ety of situations. 57 They are perceptions about what is good or bad, right or wrong. Values tell us what we "ought" to do. They serve as a moral compass that directs our motiva- ti on and, potenti ally, our decisions and actions. They al so provide justification for past decisions and behaviour. People arrange values into a hierarchy of preferences, called a value system. Some individuals value new challenges more than they value conformity. Others val ue generosity more than frugal ity. Each person's uni que val ue system is developed and reinforced through soc ialization from parents, religious Chapter Two Individual Behaviour, Personality, and Values 47 institutions, friends, personal experiences, and the society in which he or she lives. As such, a person's hierarchy of values is stable and long-lasting. For example, one study found that value systems of a sample of adolescents were remarkably similar 20 years later when they were adults.ss Notice that our description of values has focused on individuals, whereas Advantage Tower CEO Allison Earl also refers to the values of the wireless infrastructure company. In reality, values exist only within individuals-we call them personal values. However, groups of people might hold the same or similar values, so we tend to ascribe these shared values to the team, department, organiza- tion, profession, or entire society. The values shared by people throughout an organization ( orga- nizational values) receive fuller discussion in Chapter 14 because they are a key part of corporate culture. The values shared across a soc iety (cultural values) receive attention in the la~t section of this chapter. Values and personality traits are related to each other, but the two concepts differ in a few ways. 59 The most noticeable distinction is that values are evaluative; they tell us what we ought to do. Personal- ity traits are descriptive; they are labels referring to what we naturally tend to do. A second distinction is that personality traits have minimal confl ict with each other-you can have high agreeableness as well as high introversion, for example-whereas some values are opposed to other values. For exam- ple, someone who values excitement and challenge would have difficulty also valuing stabil ity and moderation. Third, personality is somewhat more stable than values. The reason is that personality is influenced about equally by heredity and socialization, wherea~ values are influenced more by social- ization than heredity. TYPES OF VALUES Values come in many forms, and experts on this topic have devoted considerable attention to organiz- ing them into clusters. Long ago, social psychologist Milton Rokeach developed two lists of values, distinguishing means (instrumental values) from end goals (terminal values). Although Rokeach's lists are still mentioned in some organizational behaviour sources, they were replaced by a better model almost two decades ago. The instrumental-terminal values distinction was neither accurate nor useful, and it overlooked values that are now included in the current dominant model. Today, the dominant model of personal values is one developed and tested by soc ial psycholo- gist Shalom Schwartz and his colleagues60 Schwartz's list of 57 values builds on Rokeach's earlier work but does not distinguish instrumental from terminal values. Instead, research has found that human values are organized into the circular model (c ircumplex) shown in Exh ibit 2.6. This model clusters the 57 specific values into 10 broad values categories: un iversalism, benevolence, tradit ion, conformity, security, power, achievement, hedonism, stimulation, and self-d irection. For example, conform ity includes four specific values: politeness, honouring parents, self-d isc ipline, and obedience. These 10 broad values categories are further clustered into four quadrants. One quadrant, called openness to change, refers to the extent to which a person is motivated to pursue innovative ways. This quadrant includes the value categories of self-direction (creativity, independent thought), stimulation (excitement and challenge), and hedonism (pursuit of pleasure, enjoyment, gratification of desires). The opposing quadrant is conservation, which is the extent to which a person is motivated to preserve the status quo. The conservation quadrant includes the value categories of conformity (adherence to social norms and expectations), security (safety and stability), and tradition (moderation and preservation of the status quo). The third quadrant in Schwartz's circumplex model, called self-enhancement, refers to how much a person is motivated by self-in terest. This quadrant includes the values categories of achievement (pursuit of personal success), power (dominance over others), and hedonism (a values category shared with openness to change). The opposite of self-enhancement is self-transcendence, which refers to moti- vation to promote the welfare of others and nature. Self-transcendence includes the value categories of benevolence (concern for others in one's life) and universalism (concern for the welfare of al l people and nature). 48 Part Tw o Individual Behavio ur and Processes EXHIBIT 2.6 Schwartz's Values Circumplex O pe nness t o change Stimulation _ •• Hedorism Self-en hanceme nt Self-direction --- __ .... --- Self-transcendence Universaism Conservation Sources: S.H. Schwartz.. "Unjversals in the Content and Structure of Values: Theoretical Ad\'ances and Empirical Tests in 20 Countries. Ad\'ances in Experimental Social Psychology 25 ( 1992): 1-65: S.H. Schwaru and K. Boehnke . "Evaluating the Structure of Human Values with Confirmator-y Fac-tor Analysis. Journal of Research in Personality 38. oo. 3 (2004) : 23~55. What are your dominant values? You can discover your value system hiera rchy in Schwartz's model by completing this self-assessment in Connect. VALUES AND INDIVIDUAL BEHAVIOUR Personal values influence decisions and behaviour in various ways.61 First, values directly motivate our actions by shaping the relative attractiveness (valence) of the choices available. In other words, we experience more positive feelings toward alternatives that are aligned with our most important values. If stimulation is at the top of our values hierarchy, then a job opportunity offering new experiences will appeal to us more than a job opportunity with more predictable and stable work. Second, values indirectly motivate behaviour by framing our perceptions of reality. Specifically, values influence whether we notice something a~ well as how we interpret it. Our decisions and actions are affected by how we perceive those situations. Third, we are motivated to act consistently with how we define ourselves and want to be viewed by others. If achievement is a key feature of our self-view and publ ic image, then we try to ensure that our behaviour is consistent with that value. The more clearly a behaviour is aligned w ith a specific value that identifies us, the more motivated we are to engage in that behaviour. Personal values motivate behaviour to some extent, but several fac tors weaken that relationship62 One rea~on for this "disconnect" between personal values and individual behaviour is the sin1ation. The MARS Chapter Two Individual Behaviour, Personality, and Values 4 9 model states that the situation influences behaviour, which sometimes causes people to act contrary to their personal values. For example, individuals with strong self-transcendent values tend to engage in more environmentally friendly behaviours such as recycling, but lack of recycling fac ilities prevents or severely limits this behaviour. People also deviate from their personal values due to strong counter-motivational forces. For instance, employees caught in illegal business dealings sometimes attribute their unethical activities to pressure from management to achieve their performance targets at any cost. Another rea~on why decisions and behaviour are inconsistent with our personal values is that we don't actively think about them much of the time.63 Values are abstract concepts, so their relevance is not obvious in many situations. Furthermore, many decisions and actions occur routinely, so we don't actively evaluate their consistency w ith our values. We do consciously consider our values in some situations, of course, such as by real izing how much we value security when deciding whether to perform a risky task. However, many daily event~ do not trigger values awareness, so we act without their guidance. We literally need to be reminded of our values in order for them to guide our decisions and actions. The effect of values awareness on behaviour was apparent in a study in which students were given a math test and received a payment for each correct answer.64 One group submitted their results to the experimenter for scoring, so they couldn' t lie about their results. A second group could lie because they scored the test themselves and told the experimenter their test score. A third group was similar to the sec- ond (they scored their own test), but that test included the following statement, and students were required to sign their name below that statement: "I understand that this short survey falls under (the university's) honour system." The researchers estimated that some students cheated when they scored their own test without the "honour system" statement, wherea~ no one given the "honour system" form lied about their results. The university didn't actually have an official honour statement, but the message made students pay attention to their honesty. In short, people are more likely to apply their values (honesty, in this case) when they are explicitly reminded of those values and see their relevance to the situation. VALUES CONGRUENCE At the beginning of this section, Advantage Tower CEO Allison Earl emphasized the importance of employing people whose values are aligned with the company's values. The key concept here is values congruence, which refers to how similar a person's values hierarchy is to the values hierarchy of another entity, such a~ the team or organization. An employee's values congruence with team members increases the team's cohesion and performance. Congruence with the organization's values tends to increase the employee's job satisfaction, loyalty, and organizational citizenship. It also tends to reduce stress and turnover. Furthermore, employees are more likely to make decisions that are compatible with organizational expectations when their personal values are congruent with the organization's shared values65 Are organizations the most successful when every employee's personal values al ign w ith the com- pany's values? Not at all! While a large degree of values congruence is necessary for the reasons just noted, organizations also benefit from some level of incongruence. Employees with diverse values offer different perspectives, which potentially lead to better decision making. Also, too much congru- ence can create a "corporate cult" that potentially undermines creativity, organizational flexibi lity, and business ethics. Ethical Va lues and Behaviour When 1,000 Canadians were asked to identify the most important qualities of an ideal leader, 95 percent chose "honesty." In another recent survey, both Canadian employees and executives placed " integrity" at the top of the list of attributes of an effective cor- porate leader. And when 195 business leaders across IS countries were asked to identify the most 50 Part Two Individual Behaviour and Processes Assiniboin e Credit Union (ACU) has developed an enviable reputation for corporate social responsibility initiatives, including financial literacy training, commu nity hiring, social p urchasing, and social impact financial services. These activities highlight the Winni peg-based financial institution 's values, w hich have become a magnet for job applicants with like-minded values. "Our values and our promise to be a socially responsible and profitable fi nancial co-operative is exactly w hy peop le want to work here and why people seek us out as an employer," explains an ACU executive. "When you can align your personal values w ith the company you're working for, it takes being a great p lace to work to a whole new level." Values congruence is so important at Assin iboine Credit Un ion that one of the explicit criteria to be a candidate for ACU's board of directors is "values fit"- understanding and agreeing to the firm's mission and values. 56 ©Rawplxel.com/Shutterstock important leader competencies, "high ethics and moral standards" was the top-rated item from the Jist of74 characteristics.67 These surveys reveal the importance of ethics in the workplace and, in particular, in the decisions and actions of organizational leaders. Ethics refers to the sntdy of moral principles or values that determine whether actions are r ight or wrong and outcomes are good or bad (see Chapter I). People rely on their ethical values to determine " the right thing to do." THREE ETH ICAL PRINCIPLES To better understand business ethics, we need to consider three distinct types of ethical principles: utilitarianism, individual rights, and distributive justice.68 Your personal values might sway you more toward one principle than the others, but all three should be actively considered to put important ethical issues to the test. Utilitarianism. This principle says the only moral obl igation is to seek the greatest good for the greatest number of people. In other words, we should choose the option that provides the high- est degree of satisfaction to those affected. One problem is that utilitarianism requires a cost- benefit analysis, yet many outcomes aren't mea~urable. Another problem is that uti litarianism Chapter Two Individual Behaviour, Personality, and Values focuses ethics only on outcomes, whereas the means of achieving those outcomes may be considered unethical by other principles. 5 1 Individual rights. T his principle says that everyone has the same set of natural rights, such as freedom of speech, freedom of movement, right to physical security, and right to fair trial. The individual rights princ iple extends beyond legal rights to human rights that everyone is granted as a moral norm of society. One problem w ith this princ iple is that some individual rights may conflict w ith others. The shareholders' right to be informed about corporate activities may ultimately conflict with an executive's right to privacy, for example. Distributive justice. This principle says that the benefits and burdens of similar individuals should be the same; otherw ise they should be proportional. For example, employees who con- tribute equally in their work should receive similar rewards, whereas those who make a lesser contribution should receive less. A variation of this principle says that inequalities are accept- able when they benefit the least well off in society. The main problem with the distributive justice principle is that it is difficult to agree on who is "similar" and what factors are relevant. We discuss distributive justice further in Chapter 5. MORAL INTENSITY, MORAL SENSITIVITY, AND SITUATIONAL INFLUENCES These three ethical principles guide us in our ethical decisions, but three other factors also influence ethical conduct in the workplace: the moral intensity of the issue, the individual's moral sensitivity, and situational factors. 69 Moral Intensity Moral in tensity is the degree to which an issue demands the application of ethical principles. Decisions with high moral intensity have strong ethical implications that usual ly affect many people, so the decision maker needs to carefully apply ethical principles to make the best choice. The moral intensity of a situation is higher when:70 The decision w ill have substantially good or bad consequences. Most people view the decision outcomes as good or bad (versus w idespread disagreement about whether those outcomes are good or bad). There is a high probability (rather than low probabi lity) that the good or bad decision conse- quences will occur. Many people wi ll be affected by the dec is ion and its consequences. Global Connections 2 .3: ALCOA EXECUTIVE SETS ETHICAL STANDARD IN RUSSIA When William O'Rourke became Alcoa Russia's first CEO, he knew that bribery was a serious problem in that country, so he made his position clear to staff: "We don't condone it. We don't participate in it. We are not going to do it. Period." This ethical mandate was soon tested when local police stopped delivery of an $18 million furnace and declared that delivery would resume only after Alcoa paid $25,000 to the local mayor (all figures are in U.S. dollars). "My bonus was based in large part on making the planned investments happen on time," says O'Rourke. A few Alcoa executives in the United States advised th at he should do what- ever it takes to keep the work o n schedule, implying that perhaps it would be better to pay the bribe. " Nonetheless," he recalls, "I stood my ground." (continued) 52 Part Tw o Individual Behaviour and Processes (continued) The new furnace arrived three days later, even thoug h Alcoa refused to pay the bribe. In that first year, O'Rourke spent only $20 million of his $100 million capital budget because he resisted ongoing bribery attempts from various sources. It took more than a year of Alcoa Russia consistently refusing to participate in bribery before those attempts stopped. 71 m Aa:DA William O'Rourke's leadership navigated Alcoa Russia th rough an ethical quagmire of bribery and extortion. © REUTERS/Aiamy Stock Photo Moral Sensitivity Moral sensitivity (also called ethical sensitivity) is a characteristic of the person, namely his or her ability to detect a moral di lemma and estimate its relative importance. This aware- ness includes both cognitive (logical thinking) and emotional level awareness that something is or could become morally wrong.72 People w ith high moral sensitivity can more quickly and accurately estimate the moral intensity of the issue. This awareness does not necessarily translate into more ethi- cal behaviour; it just means they are more likely to know when unethical behaviour occurs. Several factors are associated with a person's moral sensitivity.73 One factor is expertise or knowl- edge of prescriptive norms and rules. For example, accountants are more morally sensitive regarding spec ific accounting procedures than are people who lack experience in this profession. A second influ- ence on moral sensitivity is previous experience with specific moral dilemmas. These experiences likely generate internal cues that trigger awareness of fu ture ethical dilemmas w ith similar character- istics. Third, employees who are better at empathizing are more sensitive to the needs and situation of others, which makes them more aware of ethical dilemmas involving others. On average, women have higher moral sensitivity compared to men, partly because women tend to have higher empathy. A fourth reason why some people have higher moral sensitivity than others involves how they define and view themselves (i.e., their self-concept). 74 Employees who strongly define themselves by their moral character (cal led their moral identity) are more sensitive to moral dilemmas because they put more energy into maintaining ethical conduct. This active monitoring process relates to the fifth influence on moral sensitivity: min dfuln ess.75 Mindfulness refers to a person's receptive and impartial attention to and awareness of the present situation as well as to one's own thoughts and emotions in that moment. Mindfulness increases moral sensitivity because it involves actively monitoring the environ- ment as well as being sensitive to our responses to that environment. This vigilance requires effort as well as skill to receptively evaluate our thoughts and emotions. Chapter Two Individual Behaviour, Personality, and Values 53 Unfortunately, we have a natural tendency to minimize effort, which leads to less mindfulness. For instance, research indicates that we have lower moral sensitivity when observing an organization, team, or individual we believe has high ethical standards.76 We assume the source is unlikely to engage in any misconduct, so we switch from mindfulness to automatic pilot. Even when we notice someone with supposedly high ethical standards engaging in unusual activity, we are less likely to form an impression that the person's behaviour may be unethical. Situational Factors Along w ith moral intensity and moral sensitivity, ethical conduct is influ- enced by the situation in which the conduct occurs77 One of the most frequently identified situational influences for unethical behaviour is pressure from top management. A recent survey of more than 13,000 employees across 13 countries reported that fully one-third observed misconduct and 22 percent experienced pressure to compromise organizational standards. Canada was not included in that study, but in another survey one-third of Canadians strongly or somewhat agreed with this statement: "In my workplace, delivering results is more important than doing the right thing." Twenty-two percent agreed with the statement: "I feel that I have to compromise my own personal ethics or values to keep my job."78 Situational factors such as pressure from management do not justify unethical conduct. Rather, we need to be aware of these fac tors so organizations can reduce their prevalence. SUPPORTING ETHICAL BEHAVIOUR Most large and medium-sized organizations in Canada and other developed countries apply one or more strategies to improve ethical conduct. The most common ethics initiative is a code of ethical conduct-a statement about desired practices, rules of conduct, and phi losophy about the organiza- tion's relationship to its stakeholders and the environment79 These codes are supposed to motivate and guide employee behaviour, signal the importance of ethical conduct, and bui ld the firm's trustworthi- ness to stakeholders. However, critics suggest that they do little to reduce unethical conduct. Another strategy to improve ethical conduct is to train and regularly evaluate employees about their knowledge of proper ethical conduct. Many large firms have annual quizzes to test employee awareness of company rules and practices on important ethical issues such as giving gifts and receiving sensi- tive information about competitors or governments. In some firms, employees participate in elaborate games that present increasingly challenging and complex moral dilemmas. A growing ethics practice is a confidential telephone hotline and website, typically operated by an independent organization, where employees can anonymously report suspicious behaviour. For instance, Halifax-based conglomerate IMP Group has such a hotline for all employees, suppliers, cus- tomers, and other stakeholders. A few very large businesses also employ ombudspersons who receive information confidentially from employees and proactively investigate possible wrongdoing. Training, hotlines, and related activities improve ethical conduct to some extent, but the most powerful foundation is a set of shared values that reinforces ethical conduct. "A good, ethical system requires more than just signposts pointing employees in the right direction," advises the Canadian Centre for Ethics and Corporate Policy. Instead, ethical conduct occurs through "a set of bel iefs, values, norms and practices that comprise an ethical culture." As we describe in Chapter 14 (organizational culture), an ethical culture is supported by the conduct and vigilance of corporate leaders. By acting with the highest moral standards, leaders not only gain support and trust from followers; they role-model the ethical standards that employees are more likely to follow. 80 Va lues Ac ross Cu ltures As the only westerner in a 50-employee w inery in China, Emilie Bourgois noticed that Chinese managers seemed to be more sensitive than European or American bosses about maintaining their authority over employees. "I was surprised to see that taking the initia- tive most of the time was seen as rude and a~ a failure to respect the executives' authority," says Bour- gois, a public relations professional from Bordeaux, France. "At work, everyone had to perform well in 54 Part Two Individual Behaviour and Processes their own tasks, but permission was required for anything other than what was expected." The power relationship was also apparent in how Chinese managers interacted with staff. "Western-style bosses tend to develop a closer relationship w ith employees," Bourgois suggests. "The hierarchy is much more clearly divided in Chinese-dominant companies than it is in fore ign ones."81 Emilie Bourgois experienced the often-subtle reality that expectations and values differ around the world. O ver the next few pages, we introduce fi ve values that have cross-cultural significance: individualism, collectivism, power distance, uncertainty avoidance, and achievement-nurturing orien- tation. Exhibit 2.7 summarizes these concepts and lists countries that have high, medium, or low scores on these values. INDIVIDUALISM AND COLLECTIVISM 1\vo seemingly inseparable cross-cultural values are individualism and collectivism. Individualism is the extent to which we value independence and personal uniqueness. Highly individualist people value personal freedom, self- sufficiency, control over their own Jives, and appreciation of the unique qualities that distinguish them from others. Canadians, Americans, Chileans, and South Africans general ly exhibit high individualism, whereas Taiwan and Venezuela are countries with low individualism.82 Collectivism is the extent to which we value our duty to groups to which we belong and to group harmony. Highly collectivist people defi ne themselves by their group memberships, emphasize their personal connection to others in their in-groups, and value the goals and well-being of people w ithin those groups.83 Low collectivism countries include Canada, Japan, and Germany, whereas Israelis and Taiwanese have relatively high collectivism. Contrary to popular belief, individualism is not the opposite of collectivism. In fact, the two concepts are typically uncorrelated.84 For example, cultures that highly value duty to one's group do not necessari ly EXHIBIT 2. 7 Five Cross-Cultural Values - VIne s-ple c-trlel .. _ ................................. CIIbua Individualism High: Canada, United State.,. Chile. South Africa Defines self more by one's uniqueness: personal goals have Medium: Japan. Denmark priority; decisio ns have low consider.ttion of effect on others: low: Taiwan. Venezuela relationships are viewed as more instrumental and fluid . Collectivism High: lsmel. Taiwan Define.' self more by one's in-group membership: goals of Medium: India, Denmark self-sacrifice and harmony have priority; behaviour regulated by low: Canada. United States. Germany. Japan in-group norms: in-group memberships are viewed as stable with a strong differentiation with out-groups. Power Distance High: India. Malaysia Reluctant to disagree with or contradict the boss; managers are Medium: Canada. United States. Japan expected and preferred decision makers: perception of dependence Low: Denmark, Israel (versus interdependence) with the boss. Uncertainty High: Belgium, G reece Prefer predictable situations: value stable employment, strict laws. Avoidance Medium: Canada. United States. Norway and low conflict: dislike deviations from normal behaviour. low: Denmark, Singapore Achievement High: Austria. Japan Focus on outcomes (versus relationships): decisions based on Orientation Medium: Canada. United States. Brazil contribution (equity versus equality); low empathy or showing low: Sweden. Netherlands e motions (versus strong e mpathy and caring) Smm:e-s: lndividualis m and c.ollectivism de.->eription.s and result,.:; are from Lhe meL<'Hlnalysis reported in D. Oyserman. H. M. Coon. and M. Kemmelme ie r. " ReLhinking lndjvid ua lis m and Collectivis m: EvaluaLi on of T heoretical As...~umptions and Meta-Analyses." Psychological Bulletin. 128 (2002). pp. 3-72. Tlle o Lher information i.s from G. Hofstede. Cuhure's Con.sequences. 2d Ed (Thousand Oaks. CA: Sage. 2001). Chapter Two Individual Behaviour, Personality, and Values 55 give a low priority to personal freedom and uniqueness. Generally, people across all cultures define them- selves by both their uniqueness and their relationship to others. It is an inherent characteristic of every- one's self-concept, which we discuss in the next chapter. Some cultures clearly emphasize uniqueness over group obligations or vice versa, but both have a place in a person's values and self-concept. Also note that people in Japan have relatively low collectivism. This is contrary to the view stated in many cross-cultural books, which claim that Japan is one of the most collectivist countries on the planet! There are several explanations for the historical misinterpretation, ranging from problems defining and measuring collectivism to erroneous reporting of early cross-cultural research. Whatever the reasons, studies consistently report that people in Japan tend to have relatively low collectivism and moderate individualism (as indicated in Exhibit 2.7).85 How much do you value indi vi dualism and collecti vism? You can discover your level of individualism and collectivism by completing this self-assessment in Connect. POWER DISTANCE Power distance refers to the extent to which people accept unequal distribution of power in a society.86 Individuals w ith high power distance accept and value unequal power. Those in higher positions expect obedience to authority; those in lower positions are comfortable receiving commands from their supe- riors without consultation or debate. People with high power distance also prefer to resolve differences through formal procedures rather than direct informal discussion. In contrast, people with low power distance expect relatively equal power sharing. They view the relationship with their boss as one of interdependence, not dependence; that is, they believe their boss is also dependent on them, so they expect power sharing and consultation before decisions affecting them are made. People in India and Malaysia tend to have high power distance, whereas people in Denmark and Israel generally have low power distance. Canadians collectively have medium-low power distance. What is your level of power distance? You can discover your power distance orientation by completing this self-assessment in Connect. UNCERTAINTY AVOIDANCE Uncer tainty avoidance is the degree to which people tolerate ambiguity (low uncertainty avoidance) or feel threatened by ambiguity and uncertainty (high uncertainty avoidance). Employees with high uncertainty avoidance value structured situations in which rules of conduct and decision making are clearly documented. They usually prefer direct rather than indirect or ambiguous communications. Uncertainty avoidance tends to be high in Belgium and Greece and very high in Japan. It is generally low in Denmark and Singapore. Canadians collectively have medium-low uncertainty avoidance. ACHIEVEMENT-NURTURING ORIENTATION Achievem ent-nurtur ing orientation reflects a competitive versus cooperative view of relations with other people.87 People with a high achievement orientation value assertiveness, competitiveness, and material ism. They appreciate people who are tough, and they favour the acquisition of money and material goods. In contrast, people in cultures with low achievement orientation (i.e. high nurntring orientation) emphasize relationships and the well-being of others. They focus on human interaction and caring rather than competition and personal success. People in Sweden, Norway, and the Netherlands score very low on achievement orientation (i.e., high nurturing orientation). In contrast, very high achievement orientation scores have been reported in Japan and Austria. Canada and the United States place a little above the middle of the range on achievement nurturing orientation. 56 Part Tw o Individual Behaviour and Processes Global Connections 2.4: CROSS-CULTURAL HICCUPS AT BEAM SUNTORY Japanese alcoholic beverage company Suntory Holdings Ltd. has a few cross-cultural hiccups to go through after acquiring Jim Beam, a bourbon producer in Kentucky. "We have to overcome the huge differences in the Japanese mentality and the American mentality," Suntory CEO Takesh i Niinami advised soon after the acquisition. "It creates misunderstandings." Niinami (in photo) says he prefers the "blunt but honest" American approach, but that style may conflict with the Japanese preference for modesty, detail, and consensus. Japanese and American employees also have different career aspirations and reward systems. " Beam and Suntory definitely have differences," Niinami acknowledges. "This is not an easy task. But I'm ready for it."88 Since acquiring American bourbon maker Jim Beam, Japan's Suntory Holdings Ltd. has experienced cross-cultural conflicts between its American and Japanese employees. © Bloomberg/Getty Images CAVEATS ABOUT CROSS-CULTURAL KNOWLEDGE Cross-cultural organizational research has gained considerable attention over the past two decades, likely due to increased globalization and cultural diversity w ithin organizations. Our knowledge of cross-cultural dynamics has blossomed, and many of these fin dings w ill be discussed in other chapters, such as leadership, conflict, and influence. However, we also need to raise a few warning flags about cross-cultural knowledge. One problem is that too many studies have relied on small, convenient samples (such as students attending one university) to represent an entire culture. 89 The result is that many cross-cultural studies draw conclusions that might not general ize to the cultures they intended to represent. Chapter Two Individual Behaviour, Personality, and Values 57 A second problem is that cross-cultural studies often assume that each country has one culture.90 In reality, many countries (including Canada) have become culturally diverse. As more countries embrace globalization and multicultural ism, it becomes even Jess appropriate to assume that an entire country has one unified culture. A third concern is that cross-cultural research and writing continues to rely on a major study conducted almost four decades ago of 116,000 IBM employees across dozens of countries. That study helped to ignite subsequent cross-cultural research, but its findings are becoming out of date as values in some cultures have shifted over the years.91 CULTURAL DIVERSITY WITHIN CANADA Some cross-cultural studies give the impression that Canada is a homogeneous country where people hold identical or very similar values. Of course, anyone who Jives here knows otherwise. Canada is the first country in the world to officially embrace multiculturalism.92 But in addition to the surface- level diversity reflected in multiculturalism, most Canadians may be surprised at how much deep-level diversity also exists w ithin this country. The best-known deep-level cultural differences are between Canadian anglophones and fran- cophones. At one time, francophones were more rel igious, traditional, and deferential to authority, compared w ith anglophones. Now, the situation is almost reversed. Relative to anglophones, franco- phones have significantly Jess deference to authority, Jess acceptance of Canada's mil itary activities abroad, and more tolerance and morally permissive views regarding marriage, sexual activity, and nonmarried parenthood.93 At the same time, anglophone and francophone Canadians seem to be con- verging on several values associated w ith the workplace, secularism, and environmentalism.94 Beyond the francophone-anglophone comparisons, culntral geographers have for several decades anecdotally implied differences in personal values and personality traits across Canadian regions. Rigorous analysis has been limited, but a few sn1dies have recently found that Canadians differ regionally in their political values. For example, egalitarianism (preference for minimal income differences) is significantly higher throughout Atlantic Canada and Quebec than in Alberta. The values of personal responsibility and market liberalism (free market capitalism) are stronger in all three prairie prov- inces than elsewhere in Canada95 Significant differences in the Big Five personal ity traits have been reported across regions of the United States and United Kingdom. There is no comparable research in Canada, but a recent survey suggests that openness to experience and emotional stabil ity are highest in British Columbia and lowest in Quebec.96 Why do Canadians vary in their values and personal ities across regions? One explanation is that regional institutions-such as local governments, educational systems, and dominant rel igious groups-have a greater influence than do national institutions on social ization practices and resulting personal values. For instance, research suggests that the number of rules and soc ial controls (called cultural tightness) within a geographic area explains differences in personality and values across the country.97 It is tempting to believe that the physical environment influences a person's values and personality. For instance, research has found that residents of mountainous areas of the United States are, on average, more introverted than residents who Jive near the ocean. However, the physical envi- ronment probably ha~ a limited effect on individual traits and values. Instead, evidence suggests that people migrate to places that are more compatible w ith their values and self-views 98 Canadian versus American Values Canadians increasingly shop at American-owned stores and have close associations with friends and co-workers in the United States. Yet the values held by people in these two countries are more divergent today than a few decades ago. "Canadians may like Americans, speak the same language, and consume more of their fast food and popular culture, but we embrace a different hierarchy of values," writes social policy researcher Michael Adams.99 Another Canadian cultural expert suggests that the 49'h parallel border is more than just an imaginary geo- graphic division; it is a symbol of the w idening ideological divide in North America. 100 Canadians and Americans are similar in many ways, but they have also consistently differed over the years on several key values. One difference, reported in several studies, is that Canadians have significantly higher tolerance or moral permissiveness than do Americans. This is reflected in greater 58 Part Two Individual Behaviour and Processes acceptance of nontraditional families and of multicultural immigration. Canadians are also more w ill- ing to allow collective rights over individual rights and are Jess accepting of large wealth differences within society. Another cultural difference is that Canadians are much Jess likely than Americans to be associated w ith a rel igious institution and to believe that these institutions should infl uence public policy. Canadians are also much more likely to bel ieve that organizations work better without a single leader. Perhaps the most s ignificant difference in values between the two countries is in beliefs about patriarchal authority. In the early 1980s, more than 40 percent of Canadians and Americans agreed that the father should be the master of the home. Today, 24 percent of Canadians hold this view, compared to 4 1 percent of Americans. 101 Chapter Summary L01 Describe the fou r factors th at dir ectly influence in dividual behaviour an d perfomtance. Four variables-motivation, ability, role perceptions, and situational factors-w hich are represented by the acronym MARS , directly in fl uence individual behaviour and performance. Motivation repre- sent~ the forces within a person that affect his or her d irection, intensity, and persistence of voluntary behaviour; ability includes both the natural aptitudes and the learned capabi lities required to successfully complete a task; role perceptions are the extent to which people understand the job duties (roles) assigned to them or expected of them; s ituational factors include conditions beyond the e mployee's immediate control that constrain or facilitate behaviour and performance. L02 S ummarize the f ive types of individ ual beh aviour in or ganizations. There are five main types of workplace behaviour. Task performance refers to goal-directed behav- iours under the individual's control that s upport organ izational objectives. It includes proficiency, adaptivity, and proactivity. Organizational citizenship behaviours consist of various fo rms of cooperation and helpfulness to others that s upport the organization's social and psychological context. Counterproductive work behaviours are voluntary behaviours that have the potential to d irectly or indirectly harm the organization. Joining and staying with the organization refers to becoming and remaining a member of the organization. Maintaining work attendance includes minimizing absenteeism when capable of working and avoiding scheduled work when not fit (i.e., low presenteeism). L03 Describe personality and discuss how the " Big Five'' personality dimensions an d four MBTI types rela te to individual behaviour in orga nizations . Personality is the relatively enduring pattern of thoughts, emotions, and behaviours that characterize a person, along with the psychological processes behind those characteristics. Personality is developed through heredity (nature) as well as socialization (nurture). The " Big Five" personality dimensions include conscientious- ness, agreeableness, neuroticism, openness to experience, and extraversion. Conscientiousness and extraversion are the best overall predictors of j ob performance in most job groups. Extraversion and openness to experience are the best predictors of adaptive and proactive performance. Emotional stability (low neurotic ism) is also associated with better adaptivity. Conscientiousness and agreeableness are the two best personal ity predictors of organiza- tional citizenship and (negatively) of counterproductive work behaviours. Based on Jungian personality theory, the Myers-Briggs Type Indicator (MBTI) identifies competing orienta- tions for getting energy (extraversion versus introversion), perceiving information (sensing versus intuiting), pro- cessing information and making decisions (thinking versus fee ling), and orienting to the external world Gudging versus perceiving). The MBTI improves self-awareness fo r career development and mutual understanding but is more popular than valid. L04 S ummarize Sch wartz's model of individual values an d discuss th e con ditions where va lues influence behaviour. Values are stable , evaluative beliefs that guide our preferences for outcomes or courses of action in a variety of s ituations. Compared to personality traits, values are evaluative (rather than descriptive), more likely Chapter Two Individual Behaviour, Personality, and Values 59 to conflict with each other, and are formed more from socialization than heredity. Schwartz's model organizes 57 values into a circumplex of ten dimensions along two bipolar dimensions: from openness to change to conser- vation and from self-enhancement to self-transcendence. Values influence behaviour in three ways: (I) shaping the attractiveness of choices, (2) framing perceptions of reality, and (3) aligning behaviour with self-co ncept and sel f-presentation. However, the effect of values on behaviour also depends on whether the situation supports or prevents that behaviour and on how actively we think about values and understand their relevance to the s ituation. Values congruence refers to how similar a person's values hierarchy is to the values hierarchy of another source (organ ization, team, etc.) LOS Describe three ethica l prin ciples a nd discuss three fac tors th at influence ethical beh aviour. Ethics refers to the study of moral principles or values that determine whether actions are right or wrong and outcomes are good or bad. Three ethical principles are utilitarianism (greatest good for the greatest number), individual right~ (upholding natural rights), and distributive justice (same or proportional benefits and burdens). Ethical behaviour is influenced by the degree to which an issue demands the application of ethical principles (moral intensity), the individual's abil ity to recogn ize the presence and relative importance of an ethical issue (moral sensitivity), and situational forces . Ethical conduct at work is supported by codes of ethical conduct, mechanisms for commun icating ethical violations, the organization's culture, and the leader's behaviour. LOG Describe five values commonly stu died across cultures and discuss the diverse cultures within Can ada. Five values common ly studied across cultures are individualism (valuing independence and personal uniqueness): collectivis m (valuing duty to in-groups and to group harmony); power distance (valuing unequal dis- tribution of power); uncertainty avoidance (tolerating or fee ling threatened by ambiguity and uncertainty); and achievement-nurturing orientation (valuing competition versus cooperation). Canada is a multicultural society, but its deep-level diversity extends beyond racial and ethnic groups. Anglo- phones and francop hones differ with respect to several values (deference to authority, moral permissiveness, e tc.), but they converge on others. All regions in Canada differ from one another on some values (e.g., egalitarianis m and personal responsibility) and personality traits (e.g., openness to experience). Canadians and Americans are s imilar in many ways, but they also have long-standing cultural differences, particularly regarding the values of to lerance, collective rights, secularis m, and patriarchal authority. Key Terms ability a chievemen t-nurturing orientation agreeableness collectivism conscien tiousn ess counterprodu ctive work beh aviours (CWBs) extraversion five-factor (Big Five) model (FFM) individ ualism min dfulness moral intensity moral sensitivity motivation Myers-Briggs Type Indicator (MBTI) n euroticism openness to experience organizational citizenship behaviours (OCBs) pe rson ality power distance role perceptions task performance un ce rtainty avoidance Critical Thinking Questions I. A provincial government department has high levels of absenteeism an10ng the office staff. T he head of office administration argues that e mployees are misusing the organization's s ick leave benefits. However, some of the mostly fe male staff members have explained that family responsibilities interfere with work. Using the MARS model, as well as your knowledge of absenteeis m behaviour, discuss some of the possible rea~ons for absenteeism here and how it might be reduced. 2. It ha~ been said that all employees are motivated. Do you agree with this statement? 60 Part Two Individual Behavio ur and Processes 3. S tudies report that heredity has a strong infl uence on an individual's personality. What are the implications of this in organ izational settings? 4. All candidates applying for a management trainee position are given a personality test that measures the five dimensions in the fi ve-factor model. Which personality traits would you consider to be the most important for this type o f j ob? Explain your answer. 5. Compare and contrast personality with personal values, and identify values categories in Schwartz's values c ircumplex that likely relate to one or more personality dimensions in the five -fac tor personality model. 6. The CEO and two other executives at an automotive part~ manufacturer were recently fired after being charged with fixing prices on several key automotive parts sold to the auto industry. Executives at competing manu- facturers face the same charges for also participating in this collus ion. Profit margins have come under intense pressure in the industry, which could cause one or more auto parts fir ms (possibly this company) to go bank- rupt. When the wrongdoing was discovered, most employees involved in product pricing (but not implicated in price fixing) were surprised. The executives were highly respected in their fields of expertise, so many staff members interpreted the unusual pricing decis ions as a new strategy, not an illegal activity. Apply your knowl- edge of personal and ethical values and behaviour to explain why the unethical activity may have occurred. 7. "All decisions are ethical decisions." Comment on this statement, particularly by re ferr ing to the concepts of moral intensity and moral sensitivity. 8. People in a particular South American country have high power distance and high collectivism. What does this mean, and what are the implications of this information when you (a senior executive) visit e mployees working for your company in that country? Case Study: SNC-LAVALIN GROUP INC. by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canad a) Bribery of foreign public officials, conspiracy to commit fraud and forgery, money laundering, possessing prop- erty obtained by crime, and attempts to secretly smuggle the son of a for mer dictator into safer countries. Sounds like the plot of a twisted crime novel. Yet these are the charges laid against for mer executives at SNC-Lavalin (SNCL), one of Canada's largest e ngineering and construction fir ms. The Royal Canadian Mounted Pol ice allege that over a decade or longer, SNCL funnelled more than S 120 million through offshore bank accounts as bribes to secure contracts in Libya. Separately, the World Bank, the Afr ican Development Bank, Swiss pol ice, and other entities uncovered evidence that SNCL bribed or attempted to bribe government staff and leaders to win contracts in Africa and Asia. SNCL is also being investigated for unethical activities in contract bidding on a maj or Canadian project involving a Montreal superhospital. Almost a dozen fo rmer SNCL executives, most of whom held senior positions, e ither face charges of criminal activity or are under investigation . The company and its I 00 subsidiaries have been banned for a decade from bidding on World Bank- funded contracts. The World Bank and other investigators report that in several contracts SNCL processed bribes through an expense line called " project consultancy cost" or PCC. For example, SNCL recently settled a corruption case fi led by the Afr ican Development Bank, which had discovered project consultancy cost items representing 7.5 percent of the total contract value of two SNCL road projects in Uganda and Mozambique. T he engineering firm has acknowledged that none of these expenses were legitimate. "Everybody used this term, and all know what that means," admit~ SNCL's former director of international projects. " Sometimes it was 'proj ect consultancy cost,' sometimes 'project commerc ial cost,' but [the) real fact is the intention is [a) bribe." SNCL paid many of the PCC bribes indirectly through employees. One SNCL engineer in Nigeria said he was to ld to use his personal funds to pay a N igerian official for a "soils investigation." The official had selected the engineering fir m for a contract. The engineer was subsequently reimbursed by SNCL through a ficti tious com- pany. When asked why he participated in the kickback scheme, the engineer (who now works in India for another company) replied: "When the boss a~ks, in that part of the world ... what would you do if you were put in my shoes if you were in a remote area o f Nigeria?" Another way that SNCL executives apparently bribed offic ials wa~ through "agent fees." Re taining a local agent is common and sometimes required fo r fore ign contract~ bids to arrange permit~, imports, and other activi- ties. However, investigators uncovered numerous questionable transfers of large funds from SNCL to banks in Switzerland, the Bahan1as, and other countries. The largest corruption of the "agent fee" process involved SNCL transferring more than $ 120 million over 10 years to a Swiss bank account controlled by a SNCL executive vice-president working in North Africa and Chapter Two Individual Behaviour, Pe rsonality, and Values 6 1 later at headquarters in Montreal. The executive was subsequently convicted and served jail time in Switzerland for corruption and money laundering regarding these funds, S4 7 million of which he handed over to Swiss authori- ties as part of that conviction. During the Swiss trial, the executive admitted d1at he bribed Saadi Gaddafi, a son of Libya's dictator at that time, for the purpose of having SNCL win five major contracts in Libya. In sepa- rate charges, an RCMP affidavit claims that the same executive masterminded a failed attempt to s muggle Saadi Gaddafi and his family into Mexico. A for mer SNCL contractor in Canada spent 18 months in a Mexican prison in relation to that mission. SNCL is s uing the executive convicted in Switzerland and others fo r recovery o f the transferred funds, claim- ing that they were intended as legitimate agent fees . The executive counterclaims that the top brass (below the board level) had arranged or knew these funds were being used for bribery payments and that the executive was following orders. Separate actions by SNCL's CEO at the time lend support to the jailed executive's claims. Specifically, in spite of opposition from the chief financial officer and head of international operations, the CEO authorized undocumented payments totalling $56 million to unknown "agents" in Libya and Bahamas. Quebec's anti-corr uption police say the CEO's largest undocumented payment ($22.5 million sent to the Bahamas) was a bri be to win a major Montreal superhospital contract. T he CEO resigned when an internal review informed SNCL's board o f the CEO's actions. T he board granted the CEO a severance payout, but the severance payments were later stopped when Quebec's anti-corruption police charged the for mer CEO with fraud. Another SNCL vice-president now faci ng several charges also admits to engaging in bribery and related crimes. He explained that SNC-Lavalin had "a corporate culture where it was common practice to do all that was necessary, including the payment of 'commissions' and other benefits to obtain contracts, including in L ibya" The second executive also argued that he was under pressure to engage in these illegal activities because the executive above him said "that he had to follow their orders to satis fy their expectations." In fact, a few for mer SNCL execu- tives have since tried to sue the company for wrongfu l dismissal on the grounds that their illegal activities were required by the company to keep their jobs. SNCL's board of directors seems to have downplayed personal responsibility for these event~. Very early in the RCMP investigation, SNCL's board received an anonymous internal letter describing the bri bery activities, yet the board later admitted that it only " took note" of the allegations, pointing out that they have "received anonymous letters before that have no credibility." And when the extent of wrongdoing at SNCL eventually became public, the board chair said: "Clearly, our board of directors can't govern something that they don' t know about, or prevent something they are not aware of." Discuss ion Questions I. Use the MARS model to discuss the main direct predictors of wrongdoing at SNC-Lavalin. 2. Explain how moral sensitivity and moral intensity apply to the unethical behaviour among several SNC- Lavalin executives and other staff. 3. What steps should SNC-Lavalin and other companies in this s ituation take to minimize these types of corpo- rate wrongdoing? Sources: J. Castaldo. •'SNC Lavalin•s Missing Millions Mess: Is Ben Aissa Responsible?." Canadian Bw;ine.ts, JuJ y 9, 2012: T. McMahon and C. Sorensen. "Boardroom Blunders at SNC-Lav-.Uin." Maclean.•. December 5. 2012. 24; D. Seglins, "SNC- Lavalin International Used Secret Code for ' Bribery' Payments ." CBC News, May 15,2013: "SNC-Lavalin Says Former Executive's Illegal Actions J ustify Firi ng." Mac/eans. May 17. 2013; J. Nicol and D. Seglins. "RCMP Moving to Freeze Asset• in Widening SNC-Lavalin Probe." CBC News. May 23. 20 13: B. Hutchinson. "The 'Clandestine World' of SNC's Fallen S tar," National Post (Toronto). March 19,2015. FP l : D. Hasselback. "SNC-Lavalin Sue.• Former Executives over Alleged Kickbacks in Libya." National Post (foronto). 9 April2015: R. Marowit•. "SNC-Lavalin Settle.• Corruption Case Brought by African Development Bank." Canadian Press, October 2, 2015: "SNC-Lav-.Uin Executi,•e C laims He Was Scapegoat in Gadhafi Bribery Scheme." Global Constructimt Review (London), September 14,2015: R. Marowits. "SNC-Lavalin S till Hoping to Resolve Criminal Charges as Hearing Set for 2018." Canadian Press. February 27. 2016: A. Derfel. "Alleged Bribery Behind MUHC Superhospital Contract: Affidavit Suggests Swiss Police Alerted Canadian Officials." Montreal Gazette. 10 August 20 16. Case Study: ETHICS DILEMMA VIGNETTES by S teven L. McS han e, C u r tin University (Australia) and University of Victoria ( Canad a) Purpose This exercise is designed to make you aware of the ethical di lemmas people face in various business s ituations, as well as the competing principles and values that operate in these situations. 62 Part Two Individual Behavio ur and Processes In structions (Small Class) The instructor will form teams of four or five students. Team members wi ll read each case below and discuss the extent to which the company's action in each case was ethical. Teams should be prepared to j ustify their evaluation us ing ethics principles and the perceived moral intensity of each incident. In structions (Large Class) Working alone, read each ca~e below and determine the extent to which the company's action in each case was ethical. The instructor will use a show of hands to determine the extent to which students believe the case represents an ethical dilemma (high or low moral intensity) and the extent to which the main people or company in each incident acted ethically. CASE ONE A large multinational grocery chain that emphasizes healthy li festyles is recognized as one of the nation's "greenest" companies, has generous e mployee benefits, and is perennially rated as one o f the best places to work. Employees receive a 20 percent discount on company products. However, those who partic ipate in the company's voluntary " Healthy Discount Incentive Program" receive up to an additional 10 percent discount on their purchases (i.e., up to a total 30 percent discount). T hese additional discounts are calculated from employ- ees' blood pressure, total cholesterol (or LDL) levels, Body M ass Index (BMJ), and nicotine-free lifestyle. For example, the full additional I 0 percent discount is awarded to those who do not use nicotine products, have 110no or lower blood pressure, have cholesterol levels under 150, and have a BMI o f less than 24. Employees do not receive the additional discount if they use nicotine products, or have any one of the following: blood pressure above 140/90, cholesterol of 195 or higher, or BMI of 30 or higher. In his letter to employees when announcing the plan, the CEO explained that these incentives "encourage our Team Me mbers to be healthier and to lower our healthcare costs." CASE TWO A 16-year-old hired as an office administrator at a s mall import services company started posting her thoughts about the j ob on her Face book site. After her firs t day, s he wrote: "first day at work. omg II So dull !!" Two days later, she complained "all i do is shred holepunch n scan paper''' omg!" Two weeks later s he added " im so totally bord!! !" These comments were intermixed with the other usual banter about her life . Her Facebook s ite did not mention the name of the company where she worked. Three weeks after being hired, the employee was called into the owner's office, where he fired her for the comments on Facebook, then had her escorted from the building. The owner argues that these comments put the company in a bad light, and her "display o f disrespect and dissatisfac- tion undermined the relationship and made it untenable." CASE THREE The waiter at a cafe in a large c ity mixed up He idi Clarke's meal order with the meal that a male customer at a nearby table had requested. The two strangers discovered the mistake and briefly enj oyed a friendly c hat while swapping plates. T he male patron departed soon after but accidentally left his new tuxedo j acket behind on his chair. C larke wanted to meet him again, so s he took the j acket home. Following a friend's suggestion, He idi launched a YouTube video and website, in which she shyly told her story, detailed the j acket's features, and promi- nently displayed a label with the nan1e o f a popular fashion retailer. The website even included photos of Heidi posing in the jacket. The next day, she gave the cafe staff the jacket and a note with her nan1e and phone number. Heidi's YouTube video soon went viral, her website crashed fro m so many visitors, and a maj or newspaper and te levision station featured He idi's quest to find the man with the missing jacket. The incident is a ro mantic reversal of the C inderella story ... except it was a fake event staged by a marketing company. " Heidi" is an actress and model hired by the marketer to promote the fashion retailer's new line of jackets for men. A partner at the marketing fir m j usti fied the hoax by saying that "when you've got a very well-established brand you need to do something that's got talkability and intrigue to rea~sess what that brand is about." T he marketing executive argued that this was an acceptable marketing event because "nobody's been harmed" and the fir m intended to eventually reveal the truth. Indeed, the actress (whose real name is L ily, not Heidi) released a second video acknowledging that the incident was fake and explaining that she's a hopeless romantic who loves a good love story. CASE FOUR Computer printer manufacturers usually sell printers at a low margin over cost and generate much more income from subsequent sales of the high-margin ink cartridges required fo r each printer. One global printer manufacturer now designs its pr inters so that they work only with ink cartridges made in the san1e region. Ink cartridges pur- chased in Canada will not work w ith the same printer model sold in E urope, for example. This "region coding" of ink cartridges does not improve performance. Rather, it prevents consumers and grey marke ters from buying the product at a lower price in another region. T he company says this policy allows it to maintain stable prices within a region rather than continually changing prices due to currency fl uctuations. Chapter Two Individual Behaviour, Pe rsonality, and Values 63 CASE FIVE A large European bank requi res all employees to open a bank account with that bank. The bank deposits employee paycheques to those accounts. The bank explains that this is a formal pol icy which all employees agree to at the time of hire. Furthermore, fai lure to have an account with the bank s hows disloyalty, which could limit the employee's career advancement opportunities with the bank. Until recently, the bank has reluctantly agreed to deposit paycheques to accounts at other banks for a small percentage of employees. Now, bank executives want to reinforce the policy. They announce that employees have three months to open an account with the bank or face disciplinary action. Class Exercise: PERSONAL VALUES EXERCISE Purpose This exercise is designed to help you understand Schwartz's values model and relate its e lements to your personal values and the values held by others in your class. Instructions Your instructor will distribute a sheet with 44 words and phrases representing different personal values. Read these words and phrases carefully, then fo llow these steps: I. Pick THREE (3) of these words/phrases that represent the MOST important values to you personal ly. Print each of the three values on the three yellow-coloured sticky (Post-It) notes provided by your instructor (i.e., print one value on each note). Do not put your name on any sticky notes. 2. From the remaining 4 1 values on the s heet provided by your instr uctor, pick THREE (3) of these that represent the LEAST important values to you personally. Print each of the three values on three sticky notes of the second colour provided by your instructor (i.e., print one value on each note). 3. The instructor will advise you what to do with the six stick-y notes on which you wrote your most and least important values. 4. The class will engage in a debriefing, using the information created in the third step of this activity. Self-Assessments for Chapter 2 I SELF-ASSESSMENT NAME DESCRIPTION J Can you identify personality traits Personality influences all a..~pects of our Jives. including the words we use from blogging words? when writing blogs. In fact. some companies now use sophisticated software to estimate the personality tra.it'i of j ob applicant'i from the words they use in blogs and other online writing. This self-assessment estimates how well you interpret someone•s personality in blogs and other writing. I What is your Big Five personal ity? Personality experl'i have organized the dozens of personality trait'i into five main I dimensions. known a'i the five-facto r or "Big F ive" model. Each dimension I consists of several specific personality traiL~ that cluste r together. Most scholarly research on personality relies on this model. but it is also useful in everyday life as a relatively easy categorization of personali ties. This self-assessment estimate.'i your personality on the Big Five dimensions. I Are you introverted or extraverted? One of the most widely studied and discussed personality dimensions is I introversion~extraversion. Introversion char.tcterizes people who tend to be quiet I shy. and cautious. Extraversion char.tcterizes people who tend to be outgoing. talkative. sociable. and a...,;sertive. This self· as.sessment estimates the extent to I which you have an introverted or extraverted personality. Are you a sensing or intuitive type? Nearly a century ago. Swiss psychiatrist Carl Jung proposed that personality is primarily rep resented by the individual·s preferences regarding perceiving and j udging information. Jung explained that perceiving. w hich involves how people prefer to gather information or perceive the world around them. occurs through two competing orientations: sensing (S) and intuition (N). This self· a.'isessment I estimate.' your score on this Jungian personality type (SIN). Colllinued 6 4 Part Tw o Individual Behavio ur and Processes I SELF-ASSESSMENT NAME --+-D_ES_ CRJPTION _j W h a t are your d o minant values? Values are stable. evaluative beliefs that guide our preferences for outcomes or courses of action in a v-.triety of situations. They are perceptions about what is good or bad. right or wrong. \Ve arrange our personal values into a hier.u-chy of preferences. called a value system. Schwartz's values circumplex organizes the dozens of personal values into I 0 categories placed in a circle (circumplex). This self-assessment assesses the relative importance to you of the I 0 categories of I values in Schv.'Jim Rankin/Toronto Star/
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Chapter Three Perceiving Ourselves and Others in Organizations 75
PERCEPTUAL ORGANIZATION AND INTERPRETATION
We pay attention to a tiny fraction of the stimuli received by the senses. Even so, through various per-
ceptual grouping strategies, the human brain further reduces the huge volume and complexity of the
information received. Perceptual grouping occurs mostly without our awareness, yet it is the founda-
tion for making sense of things and fu lfilling our need for cognitive closure. The most common and far-
reaching perceptual grouping process is ca tegor ical thin king-the mostly nonconscious process of
organizing people and objects into preconceived categories that are stored in our long-term memory.42
People are usually grouped together based on their observable similarity, such as gender, age, race,
clothing style, and so forth. We discuss this categorization process in the next section on stereotyp-
ing. People are also grouped together based on their proximity to each other. If you notice a group of
employees working in the same area and know that some of them are marketing staff, you will likely
assume that the others in that group are also marketing staff.
If:::\ How much perceptual structure do you need? You can discover your need for
~ perceptual structure by locating this self-assessment in Connect.
Another form of perceptual grouping is based on the need for cognitive closure. When listening to
others discuss what happened at a meeting you didn’t attend, your mind fills in unstated details, such
as who else was there and where it was held. Percepn1al grouping also occurs when we perceive trends
from ambiguous information. Several studies have found that people have a natural tendency to see
patterns that, in fact, are random events. For example, people incorrectly believe that a sports player or
gambler with a string of wins is more likely to win next time as well.43
The process of “making sense” of the world around us involves interpreting incoming information,
not just organizing it. This happens as quickly as selecting and organizing because the previously men-
tioned emotional markers are tagged to incoming stimuli, which are essentially quick judgments about
whether that information is good or bad for us. How much time does it take to make these quick judg-
ments? Recent studies estimate that we make reliable judgments about another individual’s trustworthi-
ness based on viewing a fac ial image for as little a~ SO milliseconds (one-twentieth of a second). In fact,
our opinion regarding whether we like or trust a person is about the same whether we see the person’s
face for a minute or a fraction of a second.44 Collectively, these sn1dies reveal that selective attention, per-
ceptual organization, and interpretation operate very quickly and to a large extent without our awareness.
Mental Models To achieve our goals with some degree of predictability and sanity, we need road
maps of the environments in which we live. These road maps, called mental mod els, are knowledge
structures that we develop to describe, explain, and predict the world around us.45 They consist of
visual or relational images in our mind, such as what the cla~sroom looks like or what happens when
we submit an assignment late. Mental models partly rely on the process of perceptual grouping to
make sense of things; they fill in the missing pieces, including the causal connection among events.
For example, you have a mental model about attending a class lecture or seminar, including assump-
tions or expectations about where the instructor and students arrange themselves in the room, how they
ask and answer questions, and so forth. In other words, we create a mental image of a cla~s in progress.
Mental models play an important role in sense making, yet they also make it difficult to see the world in
different ways. For example, accounting professionals tend to see corporate problems from an accounting per-
spective, whereas marketing professionals see the same problems from a marketing perspective. Mental models
also block our recognition of new oppommities. How do we change mental models? That’s a tough challenge.
After all, we develop these knowledge structures from several years of experience and reinforcement.
The most important way to minimize perceptual problems caused by mental models is to be aware
of and frequently question them. We also need to be more aware of our assumptions, which are often
based on mental models. Working with people from diverse backgrounds is another way to break out of
existing mental models. Colleagues from different cultures and areas of expertise tend to have different
mental models, so working with them makes our own assumptions more obvious.

76 Part Two Individual Behavio ur and Processes
Specific Perceptual Processes an d Problems
Within the general perceptual process are specific subprocesses and associated biases
and other errors. In this section, we discuss several of these perceptual processes and
biases as well as their impl ications for organizational behaviour, beginning with the
most widely known one: stereotyping.
STEREOTYPING IN ORGANIZATIONS
One reason why there are few women in information technology and computer science occupations is
that they, along with family and friends, tend to hold an unflattering stereotype of people in this field.
Research indicates that both women and men tend to stereotype computer scientists as intellectual
geniuses who are socially inept, in relatively poor health, loners, and fanatically addicted to their com-
puters, sc ience fiction, and video games.46 S tereotypes typically have a few kernels of truth. Yet, as the
opening case study in this chapter illustrates, the stereotype of information technology professionals
seems to be far removed from reality. Unfortunately, people have a stereotype of IT professionals that
is neither accurate nor desirable for most women.
Stereotypin g is the perceptual process in which we a~sign characteristics to an identifiable group
and then automatically transfer those features to anyone we believe is a member of that group.47 The
assigned characteristics tend to be difficult to observe, such as personality traits and abilities, but they
can also include physical characteristics and a host of other qualities. If we learn that someone is a
professor, for example, we implicitly assume the person is probably also intelligent, absent-minded,
and socially challenged. Stereotypes are formed to some extent from personal experience, but they
are mainly provided to us through media images (e.g., movie characters) and other cultural vehicles.
Consequently, stereotypes are shared bel iefs across an entire society and sometimes across several
cultures, rather than beliefs that differ from one person to the next.
Historically, stereotypes were defined as exaggerations or falsehoods. This is often true, but some
feantres of the stereotype may be more likely to exist among its group members than in the general popu-
lation.48 S till, stereotypes embellish or distort the kernels of truth and include other features that are false.
No t long ago, a h undred people congregated along a b lock of Bro adway Avenue and started
dancing to the beat of “Party Rock Anthem.” Flash mobs aren’t unusual in this section of mid to wn
Manhattan, but the group took many observers by su rprise because they were accountants from
New Jersey. “Most p eople are like, ‘I can’t believe these are a b unch o f accountants;· recalls
partner Jim Bourke of WithumSmith+ Brown, the accou nting firm w here the flash mob partici pants
are employed. Along
w ith celebrating a
recent merger, the event
ch ip ped away at old
stereo typ es by show ing
that accountants know
how to have fun. ” We play
hard, and we work hard
as we ll,” said Christina
Fessler, a 28-year-old
CPA at Withum. “It really
can b e fun. And I think the
era of the suit and tie at
work every day is over.”49
© Monkey Business Images/
Shutterstock

Chapter Three Perceiving Ourselves and Others in Organizations 77
Why People Stereotype People engage in stereotyping because, as a form of categorical thinking,
it is usually a nonconscious “energy-saving” process that simplifi es our understanding of the world. It is
easier to remember feantres of a stereotype than the constellation of characteristics unique to everyone we
meet. A second reason is that we have an innate need to understand and anticipate how others will behave.
We don’t have much information when first meeting someone, so we rely on stereotypes to till in the miss-
ing pieces. The higher the perceiver’s need for cognitive closure, the higher their reliance on stereotypes. 50
A third explanation for stereotyping is that it is motivated by the observer’s own need fo r social
identity and self-enhancement. Earlier in this chapter we explained that people defi ne themselves by
the groups to which they belong or have an emotional attachment. They are also motivated to mai ntain
a positive self-concept. This combination of social identity and self-enhancement leads to the process
of categorization, homogenization, and differentiation: 51
Categorization. Social identity is a comparative process, and the comparison begins by catego-
rizing people into distinct groups. By viewing someone (includi ng yourself ) as a Nova Scotian,
for example, you remove that person’s individuality and, instead, see him or her a~ a prototypi-
cal representative of the group called Nova Scotians. This categorization then allows you to
distinguish Nova Scotians from people who live in, say, Ontario or Alberta.
Homogenization. To s implify the comparison process, we te nd to think that people w ith in
each g roup are very s imil ar to each other. For instance, we think Nova Scotians collec-
ti vely have similar attitudes and charac terist ics, whereas Ontari ans collect ively have the ir
ow n set of characteristics . O f course, every individual is un ique, but we often lose sight of
this fac t when thinki ng about our social identity a nd how we compare to people in other
social groups.
Differentiation. Along w ith categorizing and homogenizing people, we tend to assign more
favourable characteristics to people in our social identity groups than to people in other groups.52
This differentiation is motivated by self-enhancement because being in a “better” group produces
higher self-esteem. Differen tiation is often subtle, but it can escalate into a “good guy versus
bad guy” contra~! when groups engage in overt conflict with each other. In other words, when
out-group members threaten our self-concept, we are particularly motivated (often without our
awareness) to assign negative stereotypes to them. Some research suggests that men have stron-
ger differen tiation biases than do women, but we all differen tiate to some extent.
Problems with Stereotyping Everyone engages in stereotyping, but this process distorts
perceptions in various ways. O ne distortion is that stereotypes do not accurately describe every per-
son in a social category. The traditional accountant stereotype (boring, cautious, calculating) perhaps
describes a few accountants, but it is certainly not characteristic of all, or even most, people in this
profession. Nevertheless, once we categorize someone as an accountant, the stereotypic nonobservable
features of accountants are transferred to that person, even though we have no evidence that the person
actual ly has those characteristics.
A second proble m with stereotyping is stereotype thr eat, a phenomenon whereby members of
a stereotyped group are concerned that they might exhibit a negative feature of the stereotype. T his
concern and preoccupation adversely affects their behaviour and perfor mance, which often results in
displaying the stereotype trait they are tryi ng to avoid. 53 For example, women perform worse on math
and science tests when sensit ized to the generally false but widely held belief that women underper-
form men in these subjects. Test scores among women are also lower w hen they are a smal l mi nority
in a predominantly male class. Women achieve much higher scores when the gender stereotype or
their minority status is not apparent, such as when taking the test with many women in the class.
Al most anyone can be affected by stereotype threat, but studies have part icularly observed
it in some mi nori ty groups and in older people. Stereotype threat occurs because members of a
stereotyped group anxiously avoid confi rm ing the undesi rable trait and try to push the negative
image fro m their mi nd. These two cogn itive activ ities di vert energy and attention, wh ich makes it
more di fficult to perfo rm the task well. The negat ive stereotype can also weaken self-efficacy; it is

78 Part Two Individual Behavio ur and Processes
challenging to be confide nt in your ability when your group ‘s stereotype suggests that confide nce
is misplaced.
A third proble m w ith stereotyping is that it lays the fo undation for discriminatory attitudes and
behaviour. Most of this perceptual bias occurs as unintentional (systemic) discrimination, whereby
decision makers rely on stereotypes to establish notions of the ” ideal” person in specifi c roles. A person
who doesn’ t fit the ideal tends to receive a less favourable evaluation than someone who is compat-
ible with the occupational stereotype. Systemic discrimination may partly explai n why women are
more likely than men to leave inform ation technology careers. “Comi ng up through the technical ranks
I have always fe lt that I had to work twice as hard to get equal recognition as my male counterparts,”
says a female information security special ist at the BBC in London. S he points out that her male
colleagues treat her as an equal. But their mistakes are usually quickly forgotten, whereas her errors
receive more attention because they affirm the (fal se) stereotype that IT is more di fficu lt for women.54
Unintentional systemic discrimination also affect~ employment opportunities and salaries. Consider the
follow ing example: Science faculty from several research-intensive American universities were given the
application materials of an undergraduate sntdent who was purportedly applying for a science laboratory
manager job. Half of the faculty reviewed materials from a male applicant; the other half looked at materials
from a fe male applicant. The male and female applicant materials were identical except for the name, yet the
male applicant received signifi cantly higher ratings than the female applicant on competence and hireability.
Furthermore, faculty members recommended an average salary of U.S. $30,238 for the male applicant but
only $26,507 for the female applicant. Female faculty exhibited as much gender bia~ a~ the male faculty. 55
Worse than syste mic di scri mination is intentional discrimination or prejudice, in which people
hold unfounded negative attitudes toward people belonging to a particular stereotyped group.56 Sys-
temic d iscrimination is implicit, automatic, and unintentional, whereas intentional di scrimi nation
deliberately puts the target person at an unfair disadvantage. It would be nice to believe that prejudice
is disappearing, but unfortunately it still exists. As an example, a Calgary fire captain temporarily
assigned to a differe nt station noticed that three female firefighters were employed among the crew,
and asked male crew members how they got “stuck w ith so many (expletives)” at their hall. When
asked to clar ify, he repeated the obscenity against women. Initially fired for the remark, the captain
was soon reinstated with a brief demotion and suspension. More recently, several hundred female
RC MP officers fil ed a class actio n lawsuit, with ev idence that their careers and personal health had
suffered fro m years of gender-based discrimination and sexual harassment. The evidence was so
over whelming that the RCM P Commi ssioner, Bob Paulson, issued a lengthy public apology. 57
Women represent about 4 5 percent of the Ca nadian workforce a nd almost one-third of
midd le managers. Yet just a few years ago (20 1 0) they comprised only 12 percent of boa rd
members on Canadian p ublicly-traded (TSX) companies. Fortunate ly, w idespread attention a nd
government initiatives have p ushed aga inst systemic discrimination, so women now represent
about 20 percent of
board members of
TSX compan ies. The
pe rcentages of women
on corporate boards
are highest in Norw ay
(46.7 percent), France
(34.0 percent), and
Sweden (33.6 percent).
The lowest female
representation on
corporate boards occurs
in the Middle East (about
1 percent) and Jap an
(3.5 percent)s 8
© Hero lmagesfGeuy Images

Chapter Th ree Perceiving Ourselves and Others in Organizations 7 9
If stereotyping is such a problem, shouldn’t we try to avoid this process altogether? Unfortunately,
it’s not that simple. Most experts agree that categorical thinki ng (includi ng stereotyping) is an auto-
matic and nonconscious process. Special ized training programs can mi nimize stereotype activation to
some extent, but for the most part the process is hard wired in our brain cells.59 Also remember that
stereotyping helps us in several valuable (although fallible) ways described earlier: minimizing mental
effort, filling in missing information, and supporting our social identity.
‘The good news is that while it is very difficult to prevent the activation of stereotypes, we can minimize the
application of stereotypic informatio n. In other words, although we automatically categorize people and
assig n stereotypic traits to them, we can consciously minimize the extent that we rely o n that stereotypic
information. Later in this chapter, we identify ways to mi nimize stereotyping and other perceptual bia~s.
ATTRIBUT ION THEORY
Another widely-discussed percepntal phenomenon in organizatio nal settings is the attr ibution process. 60
Attribution involves forming beliefs about the causes of behaviour o r events. Generally, we perceive
whether an observed behaviour or event is caused mainly by characteristics of the person (internal factors)
o r by the environment (external factors). Internal factors include the person’s abi lity or motivation, wherea~
external fac tors include resources, co-worker support, o r luck. If someone doesn’ t show up for an important
meeting, for instance, we infer either internal attributions (the co-worker is forgetful, lacks motivatio n, etc.)
o r external attributions (traffic, a family emergency, etc.) to make sense of the person’s absence.
People rely o n the three attribution rules–consistency, distinctiveness, and consensus-to decide
whether someone’s behaviour and performance are caused mai nly by their personal characteristics or by
enviro nmental infl uences (see Exhibit 3.4).61 To help explain how these three attribution rules operate,
imagine a situation where an e mployee is maki ng poor-q uality products o n a particular machine.
EXHIBIT 3.4 Attribution Theory Rules
Yes
(high consistency)
Co nsistency
Did this person act
this way in t his
situation in the past?
Yes
(high consistency)
i
Yes
(low distinctiveness)
D istin ctiveness
Does this person act
this way in other
situations?
No
(high distinctiveness)
No
(low consensus)
Consensus
Do other people
act this way
in this situation?
Yes
(high consensus)

80 Part Two Individual Behaviour and Processes
We would probably conclude that the employee Jacks ski ll or motivation (an internal attribution) if the
employee consistently makes poor-quality products on this machine (high consistency), the employee
makes poor-quality products on other machines (low distinctiveness), and other employees make good-
quality products on this machine (low consensus).
In contrast, we would conclude that there is something wrong with the machine (an external attribu-
tion) if the employee consistently makes poor-quality products on this machine (high consistency), the
employee makes good-quality products on other machines (high distinctiveness), and other employees
make poor-quality products on this machine (high consensus). Notice that consistency is high for both
internal and external attributions. This occurs because low consistency (the person’s output qual ity
on this machine is sometimes good and sometimes poor) weakens our confidence about whether the
source of the problem is the person or the machine.
The attribution process is important because understanding cause-effect relationships enables us to
work effectively with others and to assign praise or blame to them62 Suppose a co-worker didn’ t com-
plete his or her task on a team project. You would approach this situation differently if you believed
the co-worker was lazy or Jacked sufficient skill (an internal attribution) than if you believed the poor
performance was due to Jack of time or resources available to the co-worker (an external attribution).
Similarly, our respect for a leader depends on whether we bel ieve his or her actions are due to per-
sonal characteristics or the situation. We also react differently to attributions of our own behaviour and
performance. Students who make internal attributions about their poor grades, for instance, are more
likely to drop out of their programs than if they make external attributions about those grades63
Attribution Errors We are strongly motivated to assign internal or external attributions to some-
one’s behaviour, but this perceptual process is also susceptible to errors. One such error is self-ser ving
bias-the tendency to attribute our failures to external causes more than internal causes, whi le credit-
ing our successes more to internal than external factors.64 Simply put, we take credit for our successes
and blame others or the situation for our mistakes. In annual reports, for example, executives mainly
refer to their personal qualities as reasons for the company ‘s successes and to competitors, unexpected
legislation, and other external factors as reasons for the company’s failures. Similarly, a study of entre-
preneurs overwhelmingly cited situational causes for their business failure (e.g., funding, the economy)
wherea~ they understated personal causes such as Jack of vision and social skills65
Why do people engage in self-serv ing bia~? Fictional New York crime investigator Philo Vance gave
us the answer nearly a century ago when he quipped: “Bad luck is merely a defensive and self-consoling
synonym for inefficiency.’>M In other words, self-serv ing bias is associated with the self-enhancement pro-
cess described earlier in this chapter. By pointing to external causes of their own fai lures (e.g., bad luck)
and internal causes of their successes, people generate a more positive (and self-consoling) self-concept.
Another w idely studied attribution error is fundamenta l attr ibution error (also called corre-
spondence bias), wh ich is the tendency to overemphasize internal causes of another person’s behav-
iour and to discount or ignore external causes of their behaviour.67 According to th is perceptual
error, we are more likely to attribute a co-worker’s late arrival for work to Jack of motivation rather
than to situational constraints (such as traffic congestion). The explanation for fundamental attri-
bution error is that observers can’ t easi ly see the external fac tors that constrain another person’s
behaviour. Also, people like to think that human beings (not the s ituation) are the prime sources of
their behaviour. However, fundamen tal attribution error might not be as common or severe as was
previously thought. There is evidence, for instance, that people from Asian countr ies are less likely
to engage in th is bias because those cu ltures emphasize the context of behaviour more than do West-
ern cultures6 8 In any case, a rev iew of past studies suggests that fundamental attribution error isn’t
very noticeable in any soc iety.69
SELF-FULFILLING PROPHECY
Self-fulillling prophecy occurs when our expectations about another person cause that person to act in
a way that is consistent with those expectations. In other words, our perceptions can influence real ity.
Exhibit 3.5 illustrates the four steps in the self-fulfill ing prophecy process using the example of a

Chapter Three Perceiving Ourselves and Others in Organizations
EXHIBIT 3.5 The Self -Fulfilling Prophecy Cycle
4. Employee’s behaviour
becomes more consistent
with the supervisor’s initial
expectations
1. Supervisor forms
expectations about the
employee
3. Supervisor’s behaviour
affects the employee’s ability and
motivation (self

Chapter Four Workplace Emotions, Attitudes, and Stress 103
EMOTIONAL DISSONANCE
Most jobs expect employees to engage in some level of emotional labour, such as displaying cour-
tesy to unruly passengers or maintaining civility with co-workers. Employees often need to display
emotions that are quite different from the emotions they are actually experiencing at that moment.
This incongruity produces an emotional tension called emotional dissonance. Employees often handle
these discrepancies by e ngaging in surface acting; they pretend that they feel the expected emotion
even though they actually experience a different emotion.
One problem with surface acting is that it can lead to higher stress and burnout.39 By definition, emo-
tional labour requires effort and attention, which consume personal energy. Emotional labour also poten-
tially requires people to act contrary to their self-view, which can lead to psychological separation from self.
These problems are greater when employees frequently need to display emotions that oppose their genuine
emotions. A second problem with surface acting is that pretending to feel particular emotions can be chal-
lenging. A genuine emotion automatically activates a complex set of facial muscles and body positions, all
of which are difficult to replicate when pretending to have these emotions. Meanwhile, our true emotions
tend to reveal themselves a~ subtle gestures, usually without our awareness. More often than not, observers
see when we are faking and sense that we are feeling a different emotion to the one we are displaying.40
Employees can somewhat reduce psychological damage caused by surface acting by viewing their
acting as a natural part of their role. Flight attendants can remain pleasant to unruly pa~sengers more
easily when they define themselves by their customer service skill. By adopting this approach, faki ng
does not pose a threat to one’s self- view. Instead, it is demonstration of our ski ll and professionalism.
The dissonant interactions are accomplishments rather than dreaded chores.4 1 Another strategy is to
engage in deep acting rather than surface acting.42 Deep acting involves visualizing reality differently,
which then produces emotions more consistent with the required emotions. Faced with an angry pas-
senger, a fl ight attendant might replace hostile emotions with compassion by viewi ng the passenger’s
behaviour as a sign of his or her discomfort or anxiety. Deep acting requires considerable emotional
intelligence, which we discuss next.
Emotional Intell igence
The University of South Florida (USF) College of Medicine discovered from surveys that its graduates
required emotional intelligence training to perform their jobs better. “We’ve created a lot of doctors that are
like House,” said Stephen Kla~ko (USF’s medical college dean at the time), referring to the fictional TV
physician with the caustic interpersonal style. Now some USF student~ are a~signed to one of America’s
top hospitals, where they develop their ability to understand and manage emotions through coaching and
role modelling by hospital staff. “You have to have an emotionally intelligent, collaborative, interdisciplin-
ary team practicing if you want young trainees to adopt that a~ their model,” explains the hospital CE0.43
USF’s College of Medicine is among many other organizations in increasingly recognizing that
emotional intelligence (EI) improves performance in many types of jobs. Emotional intelligence
includes a set of abilities to recognize and regulate one’s own emotions as well as the emotions of other
people. This defi nition refers to the four main dimensions shown in Exhibit 4.3. 44
Awareness of our own emotions. This is the ability to perceive and understand the meaning of
our own emotions. People with higher emotional intell igence have better awareness of their
emotions and are better able to make sense of them. They can eavesdrop on their emotional
responses to specific situations and use this awareness as conscious information.45
Management of our own emotions. Emotional intelligence includes the ability to manage our
own emotions, something that we all do to some extent. We keep disruptive impulses in check.
We try not to feel angry or frustrated when events go against us. We try to fee l and express joy
and happiness toward others when the occasion calls for these emotional displays.
We re-energize ourselves later in the workday. Notice that management of our own emotions
goes beyond enacting desired emotions in a particular situation. It also includes generating or

104 Part Two Individual Behaviour and Processes
EXHIBIT 4.3 Dimensions of Emotional Intelligence
Abilit ies
Recognition
of Emotions
Regulation
of Emotions
Yourself
Awareness of
our own emotions
……….. of ……..
Others
Awareness of
others’ emotions
Management of
others’ emotions
Smm:e.s: D. Goleman. “An EI-Ba.->ed Theocy of Performance.” in The Emotionally Intelligent Workplace. eeL C. Cherniss aod D. Goleman
(San Franci..::co: Jossey-Bas.s. 2001). p. 28: Jordan. Peter l. and Sandra A. Lawrence. “Emotiooal intelligence in teams.: [)e..-elopment and initial vali-
dation of the short ver.oion o f the Workgroup Emc.iooal lntellig.ence Prufile (WE IP-S).” Journal of Management & Organization IS (2009): 452-469.
suppressing emotions. In other words, the deep acting described earlier requires high levels of
the self-regulation component of emotional inte lligence.
Awareness of others’ emotions. This dimension refers to the ability to perceive and understand
the emotions of other people.46 It relates to empathy-having an understanding of and sensitivity
to the feelings, thoughts, and situations of others (see Chapter 3). This ability includes understanding
the other person’s situation, experiencing his or her emotions, and knowing his or her needs even
though they are unstated. Awareness of others’ emotions also includes being organizationally
aware, such a~ sensing office politics and the presence of informal social networks.
Management of others ‘ emotions. This dimension of EI involves managing other people’s emotions.
This includes consoling people who feel sad, emotionally inspiring your team members to complete
a class project on time, getting strangers to fee l comfortable working with you, and managing dys-
functional emotions among staff who experience conflict with customers or other employees.
The four dimensions of emotional intelligence form a hierarchy.47 Awareness of your own emotions
is lowest in that hierarchy because you need that awareness to engage in the higher levels of emo-
tional intelligence. You can’t manage your own emotions if you don’t know what they are (i.e., low
self-awareness). Managing other people’s emotions is the highest level of EI because this ability requires
awareness of your own and others’ emotions. To diffuse an angry conflict between two employees, for
example, you need to understand the emotions they are experiencing and manage your emotions (and
display of emotions).
How well do you recognize and regulate emotions? You can discover your perceived
level of emotional intellige nce by completing this self-assessment in Connect
EMOT IONAL INTELLI GENCE OU TCOMES AN D DEVELOPMENT
Does emotional intelligence improve employee performance and well-being? A few OB experts ques-
tion the usefulness of the emotional intelligence concept, claiming that there is a Jack of agreement
on its definition and that existing concepts, such as personality and general intelligence, can be used

Chapter Four Workplace Emotions, Attitudes, and Stress 10 5
instead.48 However, a consensus is slowly emerging around the meaning of EI, and there is con-
siderable research suggesting that this concept does help us to understa nd what goes on in social
settings.
Most j obs involve social interaction w ith co-workers or external stakeholders, so employees need
emotional inte lligence to work effectively.49 S tudies suggest that people with high EI are more effec-
tive team members, perform better in jobs requiring emotional labour, make better decisions involv-
ing other people, and maintai n a more positive mindset for creative work. EI is also associated with
effec tive leadership because leaders engage in emotional labour (e.g., showing patience to employees
even when they might feel frustrated) as well as regu lating the emotions of others (e.g., helping staff
members feel optimism for the futu re even though they just lost an important contract). However,
emotional intelligence does not improve some forms of perfonnance, such as tasks w ith minimal
social interaction.50
Given the potential value of emotional intelligence, it’s not surprising that some organizations try to mea-
sure this ability in job applicants. For instance, the United States Air Force (USAF) considers the emotional
As part of its modern ization strategy, the Toronto Police Service wants officers w ith strong
emotiona l intelligence and empathy. Other police forces in North America have also recognized
that emotional intelligence is a critical skill for improved community relations and in de-escalating
real-time conflict. For example, the San Diego Police Department recently introduced
Effective Interactions, a course in w hich officers develop emotional intelligence and effective
commun ication skills. Members of the Ba ltimore Police Department attend a Cognitive Command
techn ique traini ng course, w hich includes lea rning to manage emotions.
“If you describe how a good officer anywhere does their j ob, you’re describing what we’ve come
to recognize as emotional intelligence,” explains San Diego police psychologist Dan Blu mberg. “It’s
someone who understands himself or herself and can understand emotions evoked during the j ob
and manage their emotions effectively. They understand the emotions of others and are able to use
emotions to create positive encounters.” 51
©Victor Biro/A iamy Stock Photo

106 Part Two Individual Behaviour and Processes
intelligence of applicant~ into its elite pararescue jumper training program because high EI trainees are more
than twice a~ likely as low EI trainees to complete the costly program. 52 Several organizations have also intro-
duced training programs to improve employees’ emotional intelligence. 53 For instance, new hires (including
co-op students) at Fidelity Canada take emotional intelligence training along with other soft skills and tech-
nical education. One study reported that training improved emotional intelligence among staff members at a
Netherlands residence for people with intellecntal disabilities. The EI program described the concept, gave
participants feedback on their initial EI test scores, used case studies to teach EI dimensions, and provided
professional feedback based on videos showing participants meeting with difficult clients. Along with for-
mal training program~, emotional intelligence increa~es with age; it is part of the process called maturity.
So far, this chapter has introduced the model of emotions and attitudes, as well as emotional intelli-
gence as the means by which we manage emotions in the workplace. The next two sections look at two
spec ific attitudes: job satisfaction and organizational commitment. These two attitudes are so impor-
tant in our understanding of workplace behaviour that some experts suggest the two combined should
be called “overall job attitude.”54
Job Satisfaction
L03 Probably the most studied attitude in organizational behaviour is job satisfaction, a per-
son’s evaluation of his or her job and work context.55 It is an appraisal of the perceived
job characteristics, work environment, and emotional experiences at work. Satisfied
employees have a favourable evaluation of their jobs, ba~ed on their observations and emotional expe-
riences. Job satisfaction is best viewed as a collection of attitudes about different aspects of the job and
work context. You might like your co-workers but be less satisfied with your workload, for instance.
How satisfied are employees at work? The answer depends on the person, the workplace, and the
country. Global surveys, such as the one shown in Exhibit 4.4, indicate with some consistency that job
satisfaction tends to be highest in the United States, India, and some Nordic countries (such as Norway
and Denmark). In this and several other surveys, Canadians report somewhat above average job satis-
faction. The lowest levels of overall job satisfaction are usual ly recorded in Hungary and some Asian
countries (such as Japan and Hong Kong).56
Can we conclude from these surveys that most employees in the United States, India, and Norway
are happy at work? Possibly, but their overall job satisfaction probably isn’t as high as these statistics
EXHIBIT 4.4 Job Satisfaction in Selected Countries57 –
90%
Based on RandstOO . Randstad Workmonitor 4th Quarter 2016. Rands;tad Holding nv (Amsterdam: f.>eeember 2016).

Chapter Four Workplace Emotions, Attitudes, and Stress 107
suggest. One problem is that surveys often ask a single direct question, such as: “How satisfied are you
with your job?” Many dissatisfied employees are reluctant to reveal their feelings to such a direct ques-
tion because this is tantamount to admitting that they made a poor job choice and are not enjoying a
large part of their life. The infl ated results are evident in the fact that employees tend to report less sat-
isfaction when asked about specific aspects of their work. For instance, 79 percent of Canadian federal
government employees like their job overal l, yet only 64 percent are satisfied w ith how interpersonal
issues are resolved in their work unit, and only 63 percent would recommend their department or agency
as a great place to work.58 Furthermore, several sntdies report that many employees plan to look for
work within the next year or would leave their current employer if the r ight opportunity came along. 59
A second problem is that culntral values make it difficult to compare job satisfaction across countries.
People in China and Japan, for example, tend to subdue their emotions in public, and there is evidence
that they also avoid extreme survey ratings such as “very satisfied.” A third problem with job satisfaction
ratings is that job satisfaction changes with economic conditions. Employees with the highest job satis-
faction in current surveys tend to be in countries where the economies are chugging along quite well.60
JOB SATISFACTION AND WORK BEHAVIOUR
Does job satisfaction influence workplace behaviour? In general, yes! Job satisfaction affects many
of the individual behaviours introduced in Chapter 2 (task performance, organizational citizenship,
quitting, absenteeism, etc.).61 However, a more precise answer is that the effect of job satisfaction and
dissatisfaction on individual behaviour depends on the person and the situation. A useful template for
organizing and understanding the consequences of job dissatisfaction is the exit-voice-loyalty-neglect
(E VLN) m od el. As the name suggests, the EVLN model identifies four ways that employees respond
to dissatisfaction:62
Exit. Exit includes leaving the organization, transferring to another work unit, or at least trying
to get away from the dissatisfying situation. The traditional theory is that job dissatisfaction
builds over time and eventually becomes strong enough to motivate employees to search for
better work opportunities elsewhere. This is likely true to some extent, but more recent thinking
holds that specific “shock events” quickly energize employees to think about and engage in
exit behaviour. For example, the emotional reaction you experience to an unfair management
decision or a conflict episode with a co-worker motivates you to look at job ads and speak to
friends about job opportunities where they work. This begins the process of re-al igning your
self-concept away from your current employer and toward another company.6 3
Voice. Voice is any attempt to change, rather than escape from, the dissatisfying situation. Voice
can be a constructive response, such as recommending ways for management to improve the
situation, or it can be more confrontational, such as filing formal grievances or forming a coali-
tion to oppose a decision.64 In the extreme, some employees might engage in counterproductive
behaviours to get attention and force changes in the organization.
Loyalty. In the original version of this model, loyalty was not an outcome of dissatisfaction.
Rather, it determined whether people chose exit or voice (i.e., high loyalty resulted in voice;
low loyalty produced exit)65 More recent writers describe loyalty as an outcome, but in vari-
ous and somewhat unclear ways. Generally, they suggest that “loyal ists” are employees who
respond to dissatisfaction by patiently waiting-some say they “suffer in silence”-for the
problem to work itself out or be resolved by others.66
Neglect. Neglect includes reducing work effort, paying less attention to quality, and increasing
absenteeism and lateness. It is generally considered a passive activity that has negative conse-
quences for the organization.
Which of the four EVLN alternatives do employees use? It depends on the person and situation.67
The individual’s personality, values, and self-concept are important fac tors. For example, people w ith
a high-conscientiousness personal ity are less likely to engage in neglect and more likely to engage in

108 Part Tw o Individual Behaviour and Processes
voice. Pa~t experience also influences which EVLN action is applied. Employees who were unsuc-
cessful with voice in the past are more likely to engage in exit or neglect when experiencing job dis-
satisfaction in the future. Another factor is loyalty, as it was originally intended in the EVLN model.
Specifical ly, employees are more likely to quit when they have low loyalty to the company, and they
are more likely to engage in voice when they have high loyalty. Finally, the response to dissatisfaction
depends on the situation. Employees are less likely to use the exit option when there are few alternative
job prospects, for example. Dissatisfied employees are more likely to use voice than the other options
when they are aware that other employees are dependent on them68
JOB SATISFACTION AND PERFORMANCE
Is a happy worker a more productive worker? Clive Schlee thinks so. The CEO of the British deli chain
Pret A Manger believes that happy employees result in happier customers and higher sales. “The first
thing I look at is whether staff are touching each other-are they smiling, reacting to each other, happy,
engaged? I can almost predict sales on body language alone,” he says. Secret shoppers scout Pret A
Manger outlets each week. If the secret shopper is served by a positive and happy employee behind the
counter, all staff members at that location receive a bonus.69
The “happy worker” hypothesis is generally true, according to major reviews of the research on this
subject. In other words, there is a moderately positive relationship between job satisfaction and per-
formance. Workers tend to be more productive ro some extent when they have more positive attitudes
toward their job and workplace.70
Why does job satisfaction affect employee performance only to some extent? One reason is that
general attitudes (such as job satisfaction) don’ t predict specific behaviours very well. As the EVLN
model explains, reduced performance (a form of neglect) is only one of four possible responses to dis-
satisfaction. A second reason is that some employees have little control over their performance because
their work effort is paced by work technology or interdependence with co-workers in the produc-
tion process. An assembly-l ine worker, for instance, installs a fixed number of w indshields each hour
with about the same quality of installation whether he or she has high or low job satisfaction. A third
consideration is that job performance might cause job satisfaction, rather than vice versa?’ Higher
performers tend to have higher satisfaction because they receive more rewards and recognition than do
low-performing employees. This connection between job satisfaction and performance isn’t stronger,
however, because many organizations do not reward good performance very well .
JOB SATISFACTION AND CUSTOMER SATISFACTION
Earls Restaurants Ltd. has surv ived and thrived forove r 30 years in a highly competitive business. As the
opening casestudytothischapterreported, a key ingredient in the Vancouver-basedcompany ‘ssuccess
is stated in its motto: ” Great guest experiences begin with great partner experiences.” Throughout the
years, Earls’ founders and leaders have embraced the idea that customers are more satisfied wi th their
d ining experience when the cooks, servers, and other staff (all of whom are called partners at Earls)
have pos it ive emotions and attitudes regarding the ir jobs and employer. This view is echoed
by The Container Store chai rman and CEO Kip Tindell. “We really believe that if you put the
employees first, they really and truly w ill take better care of the customer than anybody else,”
says Tindell.72
Earls Restaurants and The Container Store maintain strong customer service by applying the service
pr ofit chain m odel. This model, which is diagrammed in Exhibit 4 .5, proposes that job satisfaction
has a positive effect on customer service, which flows on to shareholder financial returns. The process
begins with workplace practices that increase or decrease job satisfaction. Job satisfaction then influ-
ences whether employees stay (employee retention) as well as their motivation and behaviour on the
job. Retention, motivation, and behaviour affect service quality, which influences the customer’s sat-
isfaction, perceived value of the service, and tendency to recommend the service to others (referrals).
These customer activities influence the company ‘s profitability and growth. The service profit chain

Chapter Four Workplace Emotions, Attitudes, and Stress
Wegmans is America’s favourite supermarket. In fact, each year it receives several thousand
requests from people in almost every state to build more stores. Wegmans clearly values its
customers, but it does so by caring j ust as much for its employees. “What’s most important to us
109
is that our employees feel that Wegmans is a great place to work,” explains CEO Danny Wegman.
“When our people feel cared about and respected, they turn arou nd and make our customers feel
that way too.” Wegmans invests heavily in train ing each employee, usually promotes from w ithin,
and offers scholarships to employees. Through careful selection and leadership, the company
also nurtu res a fa mily-like culture. “I have never loved a job more than I do Wegmans,” enthuses a
pha rmacy tech nician nea r Syracuse, New York. “My co-workers are like a second family.”73
©Wegmans Food Markets, Inc.
EXHIBIT 4.5 Service Profit Chain Model
Sources: ll. Heskett. W. E. Sasser. and L A. Schlesinger. The Sen•l ce Pmfit Chajn (New York: Free Press) 1997: A. l Rucci S. P. Kirn. and
R. T. Qujnn. “The Employee-Customer-Profit Chain At SearS.” Harvard Busin ess Review 76 ( I 998): 83-97~ S. P. Brown aod S. K. Lam.
‘”‘A Meta-Anal ysis of Relatjonships Linkjng Employee Sati..:: faction to Cu..:;tomer Responses.” Journal of ReLailing 84. oo. 3 (2008): 243- 255.
model has considerable research support. However, the benefits of job satisfaction do take consider-
able time to flow through to the organization’s bottom Jine.74
Behind the service profit chain model are two key explanations for why satisfied employees tend to pro-
duce happier and more Joyal customers?5 One explanation is that job satisfaction tends to put employees

1 1 0 Part Tw o Individual Behaviour and Processes
in a more positive mood, and people in a good mood more naturally and frequently display friendliness
and positive emotions. When employees have good fee lings, their display of positive emotions “rubs off’
on most (but not all) customers, so customers fee l happier and consequently form a positive evaluation
of the service experience (i.e., higher service quality). The effect is also mutual; happy customers make
employees happier, which can lead to a cycle of positive emotions in the service experience.
The second explanation is that satisfied employees are less likely to quit their jobs, so they have
more work experience (i.e., better knowledge and skills) to serve clients. Lower turnover also enables
customers to have the same employees serve them on different occasions, providing more consistent
service. Some evidence indicates that customers build their loyalty to specific employees, not to the
organization, so keeping employee turnover low tends to build customer loyalty.
JOB SATISFACTION AND BUSINESS ETH ICS
Before leaving the topic of job satisfaction, we should mention that job satisfaction is also an ethical
issue that influences the organization’s reputation in the community. People spend a large portion of
their time working in organizations, and many societies now expect companies to provide work envi-
ronments that are safe and enjoyable. Indeed, employees in several countries closely monitor ratings of
the best companies to work for, an indication that employee satisfaction is a virtue worth considerable
goodwill to employers. The importance of this is apparent when an organization ha~ low job satisfac-
tion. The company typically tries to hide this fact, and when morale problems become public, corpo-
rate leaders are usually quick to take steps to improve the situation.
O rganizational Commitment
Organizational commitment represents the other half (with job satisfaction) of what some experts cal l
“overall job attitude.” Affective organization al commitm ent is the employee’s emotional attachment
to, involvement in, and identification with an organization. Affective commitment is a psychological
bond whereby one chooses to be dedicated to and responsible for the organization.76 T he “strong sense
of family” and support for personal growth are two reasons why many employees at Earls Restaurants
have strong affective commitment toward the company.
Affective commitment is often distinguished from continu an ce commitmen t, which is a calcula-
tive attachment to the organization. This calculation takes two forms.77 One form occurs where an
employee has no alternative employment opportunities (e.g., ” I dislike working here but there are no
other jobs available.”) This condition exists where unemployment is high, employees lack the skills
sought by other employers, or the employee’s ski lls are so specialized that there is limited demand for
them nearby. The other form of continuance commitment occurs when leaving the company would
be a significant financial sacrifice (e.g., “I hate this place but I can’t afford to quit!”). This perceived
sacrifice condition occurs when the company offers high pay, benefits, and other forms of economic
exchange in the employment relationship, or where quitting forfe its a large deferred financial bonus.
~
How c ommitted are you to your school? You can discover your affective commitment
as a student at your school by completing this self-assessme nt in Connect.
CONSEQUENCES OF AFFECTIVE AND CONTINUANCE COMMITMENT
Affective commitment can be a significant competitive advantage. 78 Employees with a strong psychological
bond to the organization are less likely to quit their jobs and be absent from work. They also have higher
work motivation and organizational citizenship, as well a~ somewhat higher job performance. Affective
commitment also improves customer satisfaction because long-tenure employees have better knowledge of
work practices and because clients like to do business with the same employees. One concern is that employ-
ees with very high loyalty tend to have high conformity, which results in lower creativity. Another problem is

Chapter Fo ur Workplace Emotions, Attitudes, and Stress 1 1 1
that very high commitment has sometimes been used to excuse or motivate illegal activity in defence of the
organization. However, most companies suffer from too little rather than too much employee loyalty.
In contrast to the benefits of affective commitment, employees with high levels of continuance
commitment tend to have lower performance and are less likely to engage in organizational c itizenship
behaviours. Furthermore, unionized employees with high continuance commitment are more likely
to use formal grievances, whereas employees with high affective commitment engage in more coop-
erative problem solving when employee-employer relations sour.79 Although some level of financial
connection may be necessary, employers should not rely on continuance commitment to retain staff.
Employers should focus on winning employees’ hearts (affective commitment) rather than tying them
financ ially to the organization (continuance commitment).
BUILDING ORGANIZATIONAL COMMITMENT
There are almost a~ many ways to build affective commitment as there are topics in this textbook, but
here are the most frequently mentioned strategies in the literature:
Justice and Support Affective commitment is higher in organizations that fulfil their obligations to
employees and abide by humanitarian values, such as fairness, courtesy, forgiveness, and moral integrity.
These values relate to the concept of organizational justice, which we discuss in the next chapter. Simi-
larly, organizations that support employee well-being tend to cultivate higher levels of loyalty in return.80
Shared Values The definition of affective commitment refers to a person’s identification w ith the
organization, and that identification is highest when employees believe their values are congruent with the
organization’s dominant values. Employees also experience more positive emotions when they agree with
the values underlying corporate decisions, which increases their motivation to stay with the organization.81
Trust Trust refers to positive expectations one person has toward another person or group in situ-
ations involving risk.82 Trust means putting faith in others. It is also a reciprocal activity: To receive
trust, you must demonstrate trust. Employees identify with and feel obliged to work for an organization
only when they trust its leaders. This explains why layoffs are one of the greatest blows to affective
commitment. By reducing job security, companies reduce the trust employees have in their employer
and the employment relationship.83
Organizational Comprehension Organizational comprehension refers to how well employees
understand the organization, including its strategic direction, social dynamics, and physical layout.84
This awareness is a necessary prerequisite to affective commitment because it is difficu lt to identify
with or feel loyal to something that you don’t know very well. Furthermore, lack of information pro-
duces uncertainty, and the resulting stress can distance employees from that source of uncertainty (i.e.,
the organization). The practical implication here is to ensure that employees develop a reasonably clear
and complete mental model of the organization. This occurs by giving staff information and opportuni-
ties to keep up-to-date about organizational events, interact with co-workers, discover what goes on in
differen t parts of the organization, and learn about the organization’s history and fu ture plans. 85
Employee Involvement Employee involvement increases affective commitment by strengthen-
ing the employee’s psychological ownership and social identity with the organization.86 Employees
fee l that they are part of the organization when they participate in decisions that guide the organiza-
tion’ s future (see Chapter 7). Employee involvement also builds loyalty because giving this power is a
demonstration of the company’s trust in its employees.
Organizational commitment and job satisfaction represent two of the most often studied and dis-
cussed attitudes in the workplace. Each is linked to emotional episodes and cognitive judgments
about the workplace and one’s relationship with the company. Emotions also play an important role in
another concept that is on everyone’s mind these days: stress. The final section of this chapter provides
an overview of work-related stress and how it can be managed.

1 12 Part Two Individual Behaviour and Processes
Work-Related Stress and Its Management
When asked if they often feel stressed by their work, most employees these days will
answer an emphatic Yes! Not only do most people understand the concept; they feel they
have plenty of personal exper ience w ith it. S tress is most often described as an adaptive
response to a situation that is perceived as chal lenging or threatening to a person’s well-being. 87 It is a
physiological and psychological condition that prepares us to adapt to hostile or noxious environmental
conditions. Our heart rate increases, muscles tighten, breathing speeds up, and perspiration increases.
Our body also moves more blood to the brain, releases adrenaline and other hormones, fue ls the system
by releasi ng more glucose and fatty acids, activates processes that sharpen our senses, and conserves
resources by shutti ng down our immune response. One school of thought suggests that stress is a nega-
tive evaluation of the external environment. However, critics of this cognitive appraisal perspective
point out that stress is more accurately described as an emotional experience, which may occur before
or after a conscious evaluation of the situation. 88
Whether stress is a complex emotion or a cognitive evaluation of the environment, it has become a
perva~ive experience in the dai ly Jives of most people. Stress is typically descr ibed as a negative expe-
rience. This is known as distress-the degree of physiological, psychological, and behavioural devia-
tion from healthy functioning. However, some level of stress-called eustress-is a necessary part of
life because it activates and motivates people to achieve goals, change their environments, and succeed
in life’s chal lenges. 89 Our focus is on the causes and management of distress, because it has become a
chronic problem in many societies.
GENERAL ADAPTATION SYNDROME
The word stress wa~ first used more than 500 years ago to describe the human response to harsh environmen-
tal conditions. However, it wasn’ t until the 1930s that Canadian researcher Hans Selye (often described a~
the father of stress research) first documented the stress experience, called general a dapta tion syndrom e.
• by t he NUMBERS
Stressed Out, Burnt-Out!9 0
of 400 Canadian
w orkers surveyed say
they are stressed at
work on a day-to-day basis.
of more than 1,000
American workers
su rveyed say they
are stressed at work
on a d ay-to-day
basis.
of all working days lost
due to ill health in the
U.K. are due to stress.
of 6,700 Americans surveyed
say they have pu rposely
changed j obs due to a
stressful work environ ment.
31″,.6 o f 1,000 German workers
surveyed report that they
felt stressed at work the
previous day.

Chapter Four Workplace Emotions, Attitudes, and Stress 1 13
Selye detennined (initially by sntdying rats) that people have a fairly consistent and automatic physiological
response to stressful sintations, which helps them to cope with environmental demand~.9 1
The general adaptation syndrome consists of the three stages shown in Exhibit 4.6. The a/ann reaction
stage occurs when a threat or chal lenge activates the physiological stress responses that were noted
above. The individual’s energy level and coping effectiveness decrease in response to the initial shock.
The second stage, resistance, activates various biochemical, psychological, and behavioural mecha-
nisms that give the individual more energy and engage coping mechanisms to overcome or remove the
source of stress. To focus energy on the source of the stress, the body reduces resources to the immune
system during this stage. This explains why people are more likely to catch a cold or some other illness
when they experience prolonged stress. People have a limited resistance capacity, and if the source of
stress persists, the individual w ill eventually move into the third stage, exhaustion. Most of us are able
to remove the source of stress or remove ourselves from that source before becoming too exhausted.
However, people who frequently reach exhaustion have increased risk of long-term physiological and
psychological damage.92
How stressed are you? You ca n discover your perceived general level of stress over
th e past month by comple ting this self-assessment in Connect.
CONSEQUENCES OF DISTRESS
Stress takes its toll on the human body.93 Many people experience tension headaches, muscle pain, and
related problems mainly due to muscle contractions from the stress response. High stress levels also
contribute to cardiovascular disease, including heart attacks and strokes, and may be associated w ith
some forms of cancer. One major review estimated that more than I 00,000 deaths annually and as much
as eight percent of health care costs in the United States are due to the consequences of work-related
stress. Stress also produces various psychological consequences, such as job dissatisfaction, moodi-
ness, depression, and lower organizational commitment. Furthermore, various behavioural outcomes
have been linked to high or persistent stress, including lower job performance, poor decision making,
and increased workplace accidents and aggressive behaviour. Most people react to stress through “fight
or flight,” so, as a form of fligh t, increased absenteeism is another outcome of stress.94
One particular stress consequence, called job burnout, occurs when people experience emotional
exhaustion, cynicism, and reduced feelings of personal accomplishment.95 Emotional exhaustion, the
EXHIBIT 4.6 General Adaptation Syndrome
High
Ability Normal
to Cope state
Low
Stage 1
Alarm reaction
Stage 2
Resistance
Time
Source: Adapted from H. Selye. The SLress of Life (New Yod:: McGraw-HilL 1956).
Stage 3
Exhaustion

1 14 Part Two Individual Behaviour and Processes
first stage, is characterized by tiredness, a lack of energy, and a feeling that one’s emotional resources are
depleted. This is followed by cynicism (also called depersona/iztaion), which is an indifferent attitude
toward work, emotional detachment from clients, a cynical view of the organization, and a tendency to
strictly follow rules and regulations rather than adapt to the needs of others. The final stage of burnout,
called reduced personal accomplishment, entails feel ings of diminished confidence in one’s ability to
perform the job well. In such situations, employees develop a sense of learned helplessness a~ they no
longer bel ieve that their efforts make a difference.
STRESSORS: THE CAUSES OF STRESS
Before identifying ways to manage work-related stress, we must first understand its causes, known as
stressors. Stressors include any environmental conditions that place a physical or emotional demand
on a person.96 There are numerous stressors in the workplace and in life in general. We w ill briefly
describe four of the most common work-related stressors: organizational constraints, interpersonal
conflict, work overload, and low task control.97
Organizational Constraints Stress research has identified organizational constraints as one of
the most pervasive causes of workplace stress.98 This stressor includes lack of equipment, supplies,
budget funding, co-worker support, information, and other resources necessary to complete the
required work. Most employees experience stress because these constraints interfere with task perfor-
mance, which indirectly threatens their rewards, status, and job security. Organizational constraints
refer to situational factors, which comprise one of the four direct predictors of individual behaviour
and performance (see the MARS model in Chapter 2). It is the only direct influence on individual per-
formance that is beyond the employee’s immediate control. This lack of control is a powerful stressor
because it threatens the individual’s fundamenta l drive to influence his or her external environment.
Interpersonal Conflict Organizations consist of groups of people working interdependently
toward some purpose. But even though they share common organizational goals, employees frequent ly
disagree with each other regarding how to achieve those goals as well as how the work and resources
should be distributed along that journey. Therefore, conflict is a way of life in organizations. As we
wi ll learn in Chapter II , specific conditions and practices enable employees to effectively resolve
their differences with few negative emotions. Unfortunately, dysfunctional conflict can easily flare up
and, left unchecked, escalate to a level that produces considerable stress and counterproductive work
behaviours.
In organizational settings, most interpersonal conflict is caused by structural sources, such as ambigu-
ous rules, lack of resources, and conflicting goals between employees or departments. However, workplace
conflict also arises when a person’s actions are perceived by others as threatening. This fast-growing
form of interpersonal conflict, called psychological harassm ent, includes repeated hostile or unwanted
conduct, verbal comments, actions, and gestures that undermine an employee’s dignity or psycho-
logical or physical integrity. Psychological harassment defines a broad landscape of behaviours, from
threats and bullying to subtle yet persistent forms of incivility.99
Psychological harassment exists in almost every workplace. One global survey of I 6,5 I 7 employees
reported that 83 percent of respondent~ in Europe, 65 percent in North and South America, and 55 percent
in Asia say they have been physically or emotionally bullied at work. 100 Sexual harassment is a specific
type of harassment in which a person’s employment or job performance is conditional and depends on
unwanted sexual relations and/or the person experiences sexual conduct from others (such a~ posting
pornographic material) that unreasonably interferes with work performance or creates an intimidating,
hostile, or offensive working environment. 101
Work Overload “We just keep rushing along in a confused state of never having time to do the
things that seem to be pressing upon us.” Sound familiar? Most Canadians have probably had a similar
thought in the past year. But although this comment comes from Canada, it wasn’ t written in the past
year or even in the past decade. It appeared in an article called “Let’s Slow Down! ” in a Royal Bank of

Chapter Fo ur Workplace Emotions, Attitudes, and Stress 1 15
Canada newsletter in 1949! 102 The fact is, people have been struggling for more than half a century w ith
the pace of life, including the challenges of performing too many tasks and working too many hours.
Work overload is one of the most common workplace stressors. Employees are expected (or believe
they are expected) to complete more work w ith more effort than they can provide withi n the allotted
time. 103 Unfortunately, work overload has consistently worsened over the past few decades. In 199 1,
approximately 30 percent of Canadians estimated that they worked an average of 45 hours or more per
week. Ten years later (200 I), that fi gure had jumped to more than 45 percent. In the most recent poll
(20 I I), 60 percent of Canadians reported working an average of 45 hours or more each week. 104
Why do employees work such long hours? One explanation attributes it to the combined effects of
technology and global ization. People increasingly work with co-workers in distant time zones, and their
constantly-on communications habits make it diff icult to separate work from personal life. A related
Global Connections 4.2:
CHRONIC WORK OVERLOAD IN CHINA 105
Eva Marti (not her real name) has lived in Beij ing fo r eig ht years, but the Swiss-born designer
still struggles with the workload expected of her. “What am I doing in here?” she asks at 2 a.m.
on her fourth straig ht nig ht of work. “This kind of overtime wou ld never happen in Switzerland.”
The average Chinese employee works more than 2,000 hours each year. whereas Swiss
wo rkers average less than 1,500 hours.
Long ho urs due to work overload is a chronic problem for many employees in Ch ina, not
just for expatriates. One survey found that 70 percent of white-collar workers in downtown
Beij ing show signs of overwork. Another study reported t hat half the anesthesio log ists in
China work more than 10 hou rs each d ay; nearly 80 percent of them say they feel too tired at
work. Ch inese newspapers frequently report death from overwork (called guo/aosi in Ch ina)
among yo ung professionals.
Stress seems to be on the rise in China due to increasing workloads and hours of work.
© blue jean lmagesfGetty Images

1 1 6 Part Two Individual Behaviour and Processes
explanation is that employees are under increasing pressure to be productive in a globalized world.
A third reason, called the “ideal worker norm,” is that professionals expect themselves and others to
work longer hours. For many, toiling away far beyond the normal workweek is a badge of honour, a
symbol of their superhuman capacity to perform above others. For example, 39 percent of mi llennia!
employees in one recent large-scale survey admitted that they work long hours and have a 24n schedule
so they look like a “work martyr” to their boss. 106
Low Task Control Workplace stress is higher when employees lack control over how and when they
perform their ta~ks a~ well as over the pace of work activity. Work is potentially more stressful when it is
paced by a machine, involves monitoring equipment, or when the work schedule is controlled by someone
else. Low ta~k control is a stressor because employees face high workloads without the ability to adjust
the pace of the load to their own energy, attention span, and other resources. Furthermore, the degree to
which low ta~k control is a stressor increases w ith the burden of responsibility the employee must carry. 107
Assembly-line workers have low task control, but their stress can be fairly low if their level of responsibil-
ity is also low. In contrast, sports coaches are under immense pressure to win games (high responsibility),
yet they have little control over what happens on the playing field (low task control).
INDIVIDUAL DIFFERENCES IN STRESS
People exposed to the same stressor experience different levels of stress. One contributing factor is the
employee’s physical health. Regular exercise and a healthy lifesty le produce a larger store of energy
to cope with stress. A second variable is the coping strategy employees use to ward off a particular
stressor. 108 People sometimes figure out ways to remove the stressor or to minimize its presence. Seek-
ing support from others, reframing the stressor in a more positive light, blaming others for the stressor,
and denying the stressor’s existence are some other coping mechanisms. Some coping strategies work
better for specific stressors and some are better across al l stressors. 109 Thus, someone who uses a less
effective coping mechanism in a particular situation would experience more stress in response to that
situation. People have a tendency to rely on one or two coping strategies, and those who rely on gener-
ally poor coping strategies (such a~ denying the stressor exists) are going to experience more stress.
Personality is a third rea~on why people experience different levels of stress when faced with the
same stressor. 110 Individuals w ith low neuroticism (high emotional stability) usually experience lower
stress levels because, by definition, they are less prone to anxiety, depression, and other negative emo-
tions. Extraverts also tend to experience lower stress than do introverts, likely because extraversion
includes a degree of positive thinking and extraverts interact w ith others, which helps buffer the effect
of stressors. Those w ith a positive self-concept-high self-esteem, self-efficacy, and internal locus of
control (see Chapter 3)-feel more confident and in control when faced w ith a stressor. In other words,
they tend to have a stronger sense of optimism. 111 Stress also tends to be higher among employees
who have an uncontrollable work motivation and who constantly think about work and have low work
enjoyment. This condition, known as wor kah olism (also called work addiction), is characteristic of
people with perfectionism (a specific form of very high conscientiousness) and a natural tendency to
have negative emotions (related to high neuroticism). 112
Ar e you a workaholic? You can discover the extent to which you are a workaholic by
completing this self-assessment in Connect.
MANAG ING WORK-RELATED STRESS
Many people deny the existence of their stress until it ha~ serious outcomes. This avoid-
ance strategy creates a vicious cycle, because the failure to cope with stress becomes
another stressor on top of the one that created the stress in the first place. To prevent this

Chapter Fo ur Workplace Emotions, Attitudes, and Stress 1 17
vicious cycle, employers and employees need to apply one or more of the stress management strategies
described below: remove the stressor, withdraw from the stressor, change stress perceptions, control
stress consequences, and receive social support. 113
Remove the Stressor There are many ways to remove the stressor, but some of the more com-
mon actions involve assigning employees to jobs that match their skills and preferences, reducing
excessive workplace noise, having a complaint system and taking corrective action against harassment,
and giving employees more control over the work process. Another important way that companies can
remove stressors is by fac ilitating better work-life balance. Work-l ife balance initiatives minimize con-
flict between the employee’s work and nonwork demands. Five of the most common work-l ife balance
initiatives are flexible work arrangements, telecommuting, limiting work hours, personal leave, and
child care support. 114
Flexible work arrangemellls. Work-life balance improves when employees have flexib ility in
scheduling their hours and actually use that flexibility. For instance, almost two-thirds of 370
major Canadian companies recently surveyed offer employees flex days or personal days. 115 A
variation of flex ible work arrangements is job sharing, whereby two people share one job. This
reduces the number of hours that each person is required to work and may allow some flexibility
by swapping days each person works.
Telecommuting. Telecommuting (also called teleworking) involves working from home or a site
close to home rather than commuting a longer distance to the office every day (see Chapter I).
It potentially improves work-life balance by reduc ing or eliminating commuting time and
increasing t1ex ibility to perform nonwork obligations (such as picking up the kids from
school). 116 However, teleworking may increase stress for those who crave social interaction and
who Jack the space and privacy necessary to work at home.
Limiting work hours. Much work-l ife cont1 ict and resulting stress occur because technology
has blurred the line between work and nonwork. Many employees continue to receive emails
and text messages from the boss after work hours. Volkswagen and some other companies are
more clearly separating work from nonwork by halting emails posted more than half an hour
after the end of the work day. S imilarly, France recently passed legislation giving employees
the “right to disconnect,” meaning that they have a legal right to ignore company messages
after hours. 117
Personal/eave. Employers w ith strong work-l ife values offer extended maternity, paternity, and
personal leave for employees to care for a new family member or take advantage of a personal
experience. Most countries provide 12 to 16 weeks of paid leave, with some offering one year
or more of fully or partially paid maternity Jeave. 118
Child care support. Many large and medium-sized employers provide on-site or subsidized
child care fac ilities. Child care support reduces stress because employees are less rushed to
drop off and pick up children and less worried during the day about how well their chi ldren are
doing. 119
Withdraw from the Stressor Removing the stressor may be the ideal solution, but it is often
not feasible. An alternative strategy is to permanently or temporarily remove employees from the
stressor. Permanent withdrawal occurs when employees are transferred to jobs that are more compat-
ible with their abilities and values. Temporarily w ithdrawing from stressors is the most frequent way
that employees manage stress. Vacations and hol idays are important opportunities for employees to
recover from stress and re-energize for future challenges. A smal l number of companies offer paid or
unpaid sabbaticals. 120 Many firms also provide innovative ways for employees to withdraw from stress-
fu l work throughout the day, such as games rooms, ice cream cart breaks, nap rooms, and cafeterias
that include live piano rec itals.

1 18 Part Two Individual Behavio ur and Processes
Writing software code can be taxing work, b ut employees at Vigilant Global have ways to
temporarily withdraw from these stressors. The Montreal firm that designs software solutions
for the finance industry has a games room w he re employees play table tennis or foosball, enjoy
e lectron ic games, or relax w ith an ebook. And for the u ltimate withdrawal from stressors, Vigilant
Global has a d edicated Ze n room with massag e chairs and spa-like background music.121
©bbernard/Shutterstock
Change Stress Perceptions How much stress employees experience depends on how they
perceive the stressor. 122 Consequently, another way to manage stress is to help employees improve
their self-concept so job challenges are not perceived as threatening. Personal goal setting and self-
reinforcement can also reduce the stress that people experience when they enter new work settings.
In addition, research suggests that some (but not all) forms of humour can improve optimism and create
positive emotions by taking some psychological weight off a stressful s intation. 123
Control Stress Consequences Keeping physically fit and maintaining a healthy lifestyle
are effective stress management strategies because they control stress consequences. Good physical
fitness reduces the adverse physiological consequences of stress by helping employees moderate
their breathi ng and heart rate, muscle tension, and stomach acid ity. The key variable here is physical
fitness, not exercise. Exerc ise leads to physical fitness, but research suggests that exerc ise does not
reduce stress symptoms among people who are not yet physically fit. 124 Various forms of med itat ion
can potentially reduce anxiety and other symptoms of stress, but their effect on blood pressure and
other physiological symptoms is mi nimal. 125 Well ness programs can help control the consequences
of stress. These programs inform employees about the benefits of better nutrition and fitness, regu-
lar sleep, and other good health habits. Finally, many large employers offer employee assistance
programs (EAPs)-te.
ktea tnteflng one’s
consdousness
• May Include an
Initial period of
“frrnge” awareness
Sourr:e: Based on G . Walla..:;. The Art o f Though t (London: Jonathan Cape. 1926. Chap. 4).
• Detailed logical
and experimental
evaluation of the
Illuminated Idea
• Further creatNe
thinking

Chapter Seven Decision Making and Creativity 20 1
a case in point. In the 1940s, Swiss engineer Georges de Mestral had just returned home from a walk with
his dog through the countryside when he noticed that his clothing and the dog’ s fur were covered in burrs.
While struggl ing to remove the barbed seeds, de Mestral engaged in divergent thinking by recognizing that
the adhesion used by burrs could be used to attach other things together. It took another dozen years of hard
work, but de Mestral evenntally perfected the hook-and-loop fastener, which he trademarked a~ Velcro. 59
ll/wnination (also called insight), the third stage of creativity, refers to the experience of suddenly
becoming aware of a unique idea.60 Wallas and others also suggest that this stage begins w ith a “fringe”
awareness before the idea fully enters our consciousness. Illumination is often visually depicted as a
light bulb, but a better image would be a fl ash of light or perhaps a briefly fl ickering candle-these b its
of inspiration are fleeting and can be quickly lost if not documented. For this reason, many creative peo-
p le keep a journal or notebook nearby so that they can jot down their ideas before they disappear. Also,
fl ickering ideas don’ t keep a particular schedule; they might come to you at any time of day or n ight.
Illumination presents ideas that are usually vague, roughly drawn, and untested. Verification, there-
fore, provides the essential final stage of creativity, whereby we flesh out the illuminated idea~ and
subject them to detailed logical evaluation and experimentation. This stage often calls for further cre-
ativity as the ideas evolve into fin ished products or services. Thus, although verification is labelled the
final stage o f creativity, it is really the beginning of a long process of creative decision making toward
development of an innovative product or service.
Do you have a creative p ersonality? You can discover the extent to which you have
a d isposition for creative thinking by locating th is self-assessment in Connect.
CHARACTERISTICS OF CREATIVE PEOPLE
Everyone is creative, but some people have a higher potential for creativity. Four of the main characteris-
tics that give individuals more creative potential are intelligence, persistence, knowledge and experience,
and a cluster of personality traits and values representing in dependent imagination (see Exhibit 7 .4).
Cognitive and practical intelligence. Creative people have above-average cognitive intel-
ligence to synthesize information, analyze ideas, and apply their ideas61 Like the fictional
s leuth Sherlock Holmes, creative people recognize the significance of smal l bits of information
and are able to connect them in ways that few others can imagine. They also have practical
intelligence-the capacity to evaluate the potential usefulness of their ideas.
EXHIBIT 7.4 Characteristics of Creative P eople

202 Part Three Team Processes
Persistence. Creative people have persistence, which includes a higher need for achievement, a
strong motivation from the ta~k itself, and a moderate or high degree of self-esteem. Persistence is
vital because people need this motivation to continue working on and investing in a project in spite
of failures and advice from others to quit. In fact, people have a general tendency to dismiss or criti-
cize creative ideas, so creative people need persistence to withstand these negative social forces.62
Knowledge and experience. Creative people require a foundation of knowledge and experience
to discover or acquire new knowledge.63 However, this expertise is a double-edged sword. As
people acquire knowledge and experience about a specific topic, their mental models tend to
become more rigid. They are less adaptable to new information or rules about that knowledge
domain. Some writers suggest that expertise also increases “mindless behaviour” because exper-
tise reduces the tendency to question why things happen.64 To overcome the limitations of exper-
tise, some corporate leaders like to hire people from other industries and areas of expertise. For
instance, when Geoffrey Ballard, founder of Ballard Power Systems, hired a chemist to develop a
better battery, the chemist protested that he didn’t know anything about batteries. Ballard replied:
“That’s fine. I don’t want someone who knows batteries. They know what won’t work.’.65
Independent imagination. Creative people possess a cluster of personality traits and values that
support an independent imagination: high openness to experience, moderately low need for
affiliation, and strong values around self-direction and stimulation66 Openness to experience is
a Big Five personality dimension representing the extent to which a person is imaginative, curi-
ous, sensitive, open-minded, and original (see Chapter 2). Creative people have a moderately
low need for affi liation so they are less embarrassed when making mistakes. Self-direction
includes the values of creativity and independent thought; stimulation includes the values of
excitement and challenge. Together, these values form openness to change-representing the
motivation to pursue innovative ways of solving problems (see Chapter 2).
by the NUMBERS
The Creativity Advantage67
of Canadian
federal
government
employees mostly or
strongly agree that
innovation is valued
in their work unit.
of 600 senior
global HR
leaders p olled
identify creativity
as one of the most
important leadership
qualities over the
next five years (top
choice, followed by
integrity).
of1,461 American managers
and consu ltants p olled
believe their organization’s
management “to some degree” or
“definitely” places a premium on
people who are creative.
of 1,966 American employees
say that innovation/
creativity/out-of-the-box
thinking w ill prove to be the most
useful over the next year.
of 251,507 U.S. federal
government employees
surveyed agree or strongly
agree that creativity and innovation
are rewarded in their organ ization.

Chapter Seven Decision Making and Creativity 203
ORGANIZATIONAL CONDITIONS SUPPORTING CREATIVITY
Intelligence, persistence, expertise, and independent imagination represent a person’s creative poten-
tial, but the extent to which these characteristics produce more creative output depends on how well the
work environment supports the creative process.68 Several job and workplace characteristics have been
identified in the literature as supporting creativity, and different combinations of s in1ations can equal ly
support creativity. In short, there isn’t one best work environment.69
One of the most important conditions that supports creative practice is that the organization has a
learning orientation; that is, leaders recognize that employees make reasonable mistakes as part of the
creative process. Motivation from the job itself is another important condition for creativity.70 Employ-
ees tend to be more creative when they bel ieve their work benefits the organization and/or larger
society (i.e., task significance) and when they have the freedom to pursue novel ideas without bureau-
cratic delays (i.e., autonomy). Creativity is about changing things, and change is possible only when
employees have the authority to experiment. More generally, jobs encourage creativity when they are
challenging and al igned with the employee’s competencies.
Along w ith supporting a learning orientation and intrinsically motivating jobs, companies foster
creativity through open communication and sufficient resources. They also provide a comfortable
degree of job security, which explains why creativity suffers during times of downsizing and corporate
restructuring71 Some companies also support creativity by designing non-traditional workspaces, such
as unique building plans or unconventional office areas.n Google is one example. The Internet inno-
vator has funky offices in several countries that include hammocks, gondola and hive-shaped privacy
spaces, sl ides, and brightly painted walls.
To some degree, creativi ty also improves wi th support from leaders and co-workers. One
study reported that effective product champions prov ide enthusiastic support for new ideas. O ther
studies suggest that co-worker support can improve creativ ity in some situations, whereas com-
petition among co-workers improves creativity in other situations.73 S imi larly, it isn’t clear how
much pressure should be exerted on employees to produce creative ideas . Extreme t ime pressures
are well-known creativi ty inh ibitors, but lack of pressure doesn’t seem to produce the highest
creativity ei ther.
ACTIVITIES THAT ENCOURAGE CREATIVITY
Hiring people with strong creative potential and providing a work environment that supports creativity
are two cornerstones of a creative workplace. The third cornerstone consists of various activities that
help employees think more creatively. One set of activities involves redefining the problem. Employees
might be encouraged to revisit old projects that have been set aside. After a few months of neglect,
these projects might be seen in new ways74 Another strategy involves asking people unfamiliar w ith
the issue (preferably with different expertise) to explore the problem with you. You would state the
objectives and give some facts and then let the other person a~k questions to further understand the
situation. By verbalizing the problem, listening to questions, and hearing what others think, you are
more likely to form new perspectives on the issue?5
A second set of creativity activities, known as associative play, attempts to bring out creativity by
literally engaging in playful activities76 For example, British media giant OMD sends employees to
two-day retreats in the countryside, where they play grapefruit croquet, chant like medieval monks,
and pretend to be dog collars. “Being creative is a bit like an emotion; we need to be stimulated,”
explains Harriet Frost, one of OMD’s specialists in building creativity. “The same is true for our
imagination and its ability to come up w ith new ideas. You can’t just sit in a room and dev ise hun-
dreds of ideas.”77 Another assoc iative play activity, called morphological analysis, involves listing
different di mensions of a system and the e lements of each dimension and then looking at each com-
bination of elements. This encourages people to carefully examine combinations that initially seem
nonsensical.
A third set of activities that promote creative thinking falls under the category of
cross-pollination.18 Cross-pollination occurs when people from differen t areas of the organ ization

204 Part Three Team Processes
Axiom Ze n is a Vancouver “innovation studio” with the un usual b usiness model of being a startup
w ith the pu rpose of creating more startups. Founder Roham Gharegozlou left Silicon Valley in
2013 to create Axiom Ze n, assembling a team of tech-savvy people with the task of thinking
up big ideas. The company doesn’t hire for speci fic roles or p rojects; instead people are free to
roam around and j ump into proj ects where they think they can contribute. With that freedom also
comes accountability; employees are required to submit projects to the collective scrutiny of the
entire team, a process that can be q u ite unsettling.
©Axiom Zen
exchange ideas or when new people are brought into an existing team. Mother, the London-based
creative agency, has unusual polic ies and working conditions that apply this creative process.
The company ‘s 100 or so employees perform their dai ly work around one monster-size table-a
2. 5-metre-wide reinforced-concrete slab that extends 91 metres like a skateboard ramp around the
entire floor. Every three weeks, employees are asked to relocate the ir laptop, portab le te lephone,
and trolley to another area around the table . Why the musical chairs exercise? “It encourages
cross-pollination of ideas,” explains Stef Calcraft, one of Mother’s found ing partners. “You have
people working on the same problem from different perspectives. It makes problem-solving much
more organ ic.”7 9
Cross-pollination highlights the fact that creativity rarely occurs alone. Some creative people
may be individualistic, but most creative ideas are generated through teams and informal social

Chapter Seven Decision Making and Creativity 205
interaction. “T his whole th ing about the solitary tortured artist is nonsense I think,” says John Col-
lee, the screenwriter who penned such films as Happy Feet and Master and Commander. “All the
great creative people I know have become great prec isely because they know how to get along
wi th people and swim around in the communal unconscious.”80 This notion of improving creativ-
ity through social interaction leads us to the fi nal section of this chapter: employee involvement in
dec ision making.
Employee Involvement in Decision Making
HCL Technologies is a multinational IT services firm. When top management found it
too cumbersome to weigh in on the hundreds of business plans produced every year they
decided to involve employees. A new planning process was introduced where executives
would post their busi ness plans online and up to 15,000 employees would rate and review the plans.
The new system yielded richer and more detailed feedback than the traditional approach because the
insights were coming from diverse perspectives across multiple business units.8 1
Emp loyee involvem ent (also cal led participative management) refers to the degree to which
employees influence how their work is organized and carried out.82 Employee involvement has become
a natural process in every organization, but the level of involvement varies with the situation. In some
organizations, such as HC L, almost everyone has a high degree of involvement in some corporate-wide
decisions during a given year, wherea~ other organizations might give employees only low levels of
involvement.83
A low level of involvement occurs where employees are individually asked for specific information
but the problem is not described to them. Somewhat higher involvement occurs where the problem is
described and employees are asked individually or collectively for information relating to that problem.
Moving further up the involvement scale, the problem is described to employees, who are collectively
given responsibi lity for developing recommendations. However, the dec ision maker is not bound to
accept those recommendations. At the highest level of involvement, the entire decision-making process
is handed over to employees. They identify the problem, discover alternative solutions, choose the best
alternative, and implement that choice. The original decision maker serves only as a fac ilitator to guide
the team’s decision process and keep everyone on track.
Debating Point:
SHOULD ORGANIZATIONS PRACTISE DEMOCRACY?
Most organizational experts recommend some degree of employee involvement, but a few go
further by proposing that organizations should operate like democracies rather than hierarchi-
cal fiefdoms. Organizational democracy consists of the highest form of involvement, whereby
employees have real institutionalized control-either directly or through representation-over
organizational decisions. In addition, no one in a democratic enterprise holds higher authority
except where such power is explicitly granted by the others (such as through employee elec-
tion of the company’s leaders). Democracy also gives all organizational members protection
against arbitrary or unj ust decisions (such as protection against being fired without cause).84
Some readers might view workplace democracy as an extreme way to run an organiza-
tion, but advocates point out that it is the principle o n which many societies have operated
for centuries and most others aspire to. Democratic governance has been established in
several high profile and successful companies, such as Semco SA and W. L. Gore & Associ-
ates, as well as many employee-owned firms and worker co-operatives. Legislation in several

206 Part Three Team Processes
countries (particularly in continental Europe) requires companies to g ive employees control over
some organizational decisions through works councils or board membership8 5
Advocates point out that, as a form of participation, workplace democracy can improve the
quality of organizational decisions and employee commitment to those decisions. Indeed, democ-
racy inherently promotes shared leadership (where everyone should be a leader in various ways),
which is increasingly recommended for improved decision making and organizational effective-
ness. Democratic enterprises might also be more flexible and innovative. Rather than obediently
following management’s standard operating procedures. employees in democratic organizations
have the opportun ity- and likely the expectation- to adapt and experiment with new work prac-
tices as circumstances change. This form of organization also encourages more organizational
learning.86
A final argument is that the democratic enterprise is ethically superior to the traditional hierar-
ch ical organ ization.8 7 It respects individual rights and dignity, more fully satisfies the standards of
ethica l conduct, and is more likely than trad itional management to adopt the multiple stakeholder
approach expected by society. Indeed, some European governments have debated the notion
that organizational democracy is a potentially effective way to minimize corporate wrongdoing
because it actively mon itors top decision makers and continually holds them accountable for
their actions.
However, the democratic enterprise model has a number of vocal advocates, but few practi-
tioners. There is somewhat more employee involvement in most organizations today than a few
decades ago, but it is still far from the democratic ideal. Most firms operate with the traditional model
that management retains control and employees have few rights. There may be reasons for this
intransigence. One argument against organizational democracy is that employees have a contrac-
tual rather than ownership relationship with the organization. Legally (and possibly morally) they
have no right to assume citizenship rights or control over the business. A second consideration is
that employees might emphasize their own interests to the detriment of other stakeholders. In con-
trast, traditional organizations give management an explicit obligation to serve multiple stakeholders
to ensure the organization’s survival and success.
Another concern is that workplace democracy might dilute accountability. Although moderate
levels of employee involvement can improve decision-making quality and commitment, there is
a real risk that no one will take responsibility for decisions when everyone has a say in them. In
addition, democracy often results in slower decision making, which could lead to a lethargic cor-
porate response to changes in the external environment. Finally, the democratic enterprise model
presumes that employees want to control their organizations, but some research suggests that
employees prefer a more moderate level of workplace involvement For this reason (and others
noted above), employee-owned compan ies often maintain a more traditional hierarchical worker-
management relationship. sa
BENEFITS OF EMPLOYEE INVOLVEMENT
For the past half century, organizational behaviour experts have advised that employee involvement
potentially improves decision-making quality and commitment.89 However, a global study suggests
that this message hasn’t been received by business leaders. Only 39 percent of employees believe senior
leaders in their organization do a good job of involving employees in decisions that affect them and
only 38 percent agree that their company acts on those suggestions effectively. Employees believe that
their company falls short even on low-level involvement: only 42 percent say their organization does
a good job of soliciting employees’ opinions or suggestions.90 As Global Connections 7.2 describes,
involving employees in company decisions can result in considerable benefits for both the company
and employees.
Employee involvement improves decision making in several ways. To begin with, it improves the
identification of problems and opportunities. Employees are, in many respects, the sensors of the
organization’ s environment. When the organization’s activities misalign with customer expectations,
employees are usually the first to know. Employee involvement provides a conduit for organizational

Chapter Seven Decision Making and Creativity 207
~ “”1 Global Connections 7 .2:
BRASILATA, THE IDEAS COMPANY
Brasilata has become one of the most innovative and productive manufacturing businesses
in Brazil by encouraging employee involvement. Each year, the steel can manufacturer
receives more th an 1 50,000 ideas-an average of more than 1 50 ideas per employee-on
a wide rang e of themes, from how to improve prod uction efficiency to new product designs.
These ideas are so important to the company’s success that Brasilata employees are called
“inventors,” and everyone signs an “innovation contract” that reinforces their commitment to
continuous improvement.91
Brasilata has become one of the most innovative and productive manufacturing businesses in
Brazil by involving employees in company decisions.
© Minerva Studio/Shutterstock
leaders to be al erted to such probl ems.92 Employee invol vement can also potentially improve the
number and quality of solutions generated. In a well-managed meeting, team members create syn-
ergy by pool ing their knowledge to form new alternati ves. In other words, several people working
together can potenti ally generate more and better solutions than the same people working alone.
A thi rd benefit of employee involvement is that, under specific conditions, it improves the evaluation of
alternati ves. Numerous studies on participative decision making, constructive conflict, and team dynam-
ics have found that involvement bri ngs out more diverse perspectives, tests idea~. and provides more
valuable knowledge, all of which help the decision maker to select the best alternative.93 A mathematical
theorem introduced in 1785 by the Marquis de Condorcet states that the alternative selected by the team’s
majority is more likely to be correct than is the al ternative selected by any team member individually.94
Along with improving decision quality, invol vement tends to strengthen employee commitment to
the decision. Rather than viewing themsel ves as agents of someone else’s decision, those who par-
ticipate in a decision feel personally responsible for its success. I nvol vement also has positive effects
on employee moti vati on, sati sfaction, and turnover. Furthermore, it increases skill var iety, feel ings of
autonomy, and task identity, al l of which i ncrease job enrichment and, potenti ally, employee motiva-
tion. Participation i s also a critical practice in organizational change because employees are more
motivated to i mpl ement the decision and l ess likely to resist changes resul ting from the dec ision.95

208 Part Three Team Processes
EXHIBIT 7.5 Model of Employee Involvement in Decision Making
Contingencies
of Employee
Involvement
• Decision structure
• Source of decision
knowledge
• Decision commitment
• Risk of conflict
Outcomes of
Employee
Involvement
Better problem
identification
More/better choices
generated
More likely to select the
best atternative
Stronger commitment
to the decision
CONTINGENCIES OF EMPLOYEE INVOLVEMENT
If employee involvement is so wonderfu l, why don’ t leaders leave all decisions to employees? The
answer is that the optimal level of employee involvement depends on the situation. The employee
involvement model shown in Exhibit 7.5 lists four contingencies: decision structure, source of decision
knowledge, decision commitment, and risk of conflict in the decision process.96
Decision structure. At the beginning of this chapter, we learned that some decisions are pro-
grammed, whereas others are nonprogrammed. Programmed decisions are Jess likely to need
employee involvement because the solutions are already worked out from pa~t inc idents. In
other words, the benefits of employee involvement increa~e with the novelty and complexity of
the problem or opportunity.
Source of decision knowledge. Subordinates should be involved in some level of decision mak-
ing when the leader Jacks sufficient knowledge and subordinates have additional information
to improve decision quality. In many cases, employees are closer to customers and production
activities, so they often know where the company can save money, improve product or service
quality, and real ize opportunities. This is particularly true for complex decisions where employ-
ees are more likely to possess relevant information.
Decision commitment. Participation tends to improve employee commitment to the decision.
If employees are unlikely to accept a decision made w ithout their involvement, some level of
participation is usually necessary.
Risk of conflict. 1\vo types of confl ict undermine the benefits of employee involvement. First, if
employee goals and norms confl ict with the organization’s goals, only a low level of employee
involvement is advisable. S econd, the degree of involvement depends on whether employees
wi ll agree on the preferred solution. If conflict is likely to occur, high involvement (i.e.,
employees make the decision alone) would be difficult to achieve.
Employee involvement is an important component of the decision-making process. To make the best
decisions, we need to involve people who have the most valuable inform ation and who w ill increase
commitment to implement the decision. Employee involvement is a formative stage of team dynam-
ics, so it carries many of the benefits and challenges of working in teams. The next chapter provides a
closer look at team dynamics, including processes for making decisions in teams.

Chapter Seven Decisio n Mak ing and Creativity 209
Chapter Summary
L01 Describe the ra tional choice paradigm of d ecision making.
Decision making is a conscious process o f making choices among one or more alternatives with the
intention of moving toward some desired state o f affairs. The rational choice paradigm relies on
subjective expected utility to identify the best choice. It also follows the logical process of identifying problems
and opportunities, choosing the best decision style, developing alternative solutions, choosing the best solution,
implementing the selected alternative, and evaluating decis ion outcomes.
L02 Explain why people differ f rom th e rational choice paradigm when id en tifying p rob lems/
opportunities, evalu ating/ch oosing a lternatives, and evaluating d ecision ou tcomes.
Stakeholder framing, perceptual defence, mental models, decis ive leadership, and solution-focused
problems affect our ability to obj ectively identify problems and opportunities. We can minimize these challenges
by being aware of the human limitations and discussing the situation with colleagues.
Evaluating and choosing alternatives is often challeng ing because organizational goals are ambiguous or
in conflict, human information processing is incomplete and subjective, and people tend to satisfice rather
than maximize. Decision makers also s hort-circu it the evaluation process w hen faced w ith an opportunity
rather th an a problem. People generally make better choices by systematically evaluating alternatives. Sce-
nario planning can he lp to make fut ure decisions without the pressure and e motions that occur during real
e mergencies.
Confirmatio n bias and escalation o f commitment make it di ff ic ult to accurately evaluate decis io n out-
comes. Escalation is mainly caused by the sel f-justification effect, self-enhanceme nt effect, the prospect
theory effect, a nd sunk costs effect. These problems are minimized by separating decision choosers from
decision evaluators, establishing a preset level at wh ich the decision is a bandoned or re-evaluated, relying on
more systematic and clear feedback a bout the project’s success, and involving several people in decis ion
making.
L03 Discuss th e roles of emotions and in tuition in decis ion ma kin g.
Emotions shape our preferences for alternatives and the process we follow to evaluate alternatives.
We also listen in to our emotions for gu idance when making decisions. This latter activity relates to
intuition-the ability to know when a problem or opportunity exist~ and to select the best course of action without
conscious reasoning. Intuition is both an e motional experience and a rapid unconscious analytic process that
involves both pattern matching and action scripts.
L04 Describe employee ch aracteristics, workpla ce conditions, and specific activities tha t su pport
creativity.
Creativity is the development o f original ideas that make a socially recognized contribution. The
fo ur creativity stages are preparation, incubation, insight, and verification. Incubation assists divergent thinking,
which involves reframing the proble m in a unique way and generating differe nt approaches to the issue.
Four o f the main features of creative people are intelligence, persistence, expertise, and independent imagina-
tion . C reativity is also strengthened for everyone when the work environment supports a learn ing orientation, the
job has high intrinsic motivation, the organization provides a reasonable level of job security, and project leaders
provide appropriate goals, time pressure, and resources. Three types of activities that encourage creativity are
redefining the problem, associative play, and cross-poll ination.
LOS Describe the benefits of employee involvem en t and iden tify four con tingencies th at affect th e
optimal level of em ployee involvem ent.
Employee involvement refers to the degree that employees influence how their work is organized
and carried out. The level o f participation may range from an employee providing specific infor mation to man-
agement without knowing the problem or issue, to complete involvement in all phases of the decision process.
Employee involvement may lead to higher decision quality and commitment, but several contingencies need to
be considered, including the decision structure, source of decision knowledge, decision commitment, and risk of
conflict.

2 10 Part Three Team Processes
Key Terms
anchoring and adjustment h eur istic
a vailability h eur istic
bounded rationality
creativity
d ecision making
divergen t thinkin g
em ployee involvement
esca lation of commitmen t
implicit favour ite
intuition
p rospect theory effect
rational ch oice p aradigm
rep resen tativen ess heuris tic
satisficing
scen ario planning
snbj ective expected utility
Critical Thinking Questions
I. A management consultant is hired by a manufactur ing fir m to determine the best site fo r it~ next production
facility. T he consultant has had several meetings with the company’s senior executives regarding the factors
to consider when making the recommendation. Discuss the decision-making problems that might prevent the
consultant fro m choosing the best s ite location.
2. You have been asked to personally recommend a new travel agency to handle all airfare, accommodation,
and related travel need~ for your organization of 500 staff. One of your colleagues, who is responsible for the
company’s economic planning, suggests that the best travel agent could be selected mathematically by input-
ting the relevant factors for each agency and the weight (importance) of each fac tor. What decision-making
approach is your colleague recommending? Is this recommendation a good idea in this situation? Why or why
not?
3. Intuition is both an emotional experience and an unconscious analytic process. One problem, however, is that
not all emotions signalling that there is a problem or opportunity represent intuition. Explain how we would
know if our “gut fee lings” are intuition or not, and if not intuition, suggest what might be causing them .
4. A developer received financial backing fo r a new business financ ial centre along a derelict section o f the
waterfront, a few miles from the current downtown area of a large European c ity. The idea was to build
several high-rise structures, attract large tenants to those sites, and have the c ity extend transportation syste ms
out to the new centre. Over the next decade, the developer believed that others would build in the area,
thereby attracting the regional or national offices of many financial institutions. Interest from potential ten-
ants was much lower than initially predicted and the city did not build transportation systems as quickly as
expected. Still, the builder proceeded with the original plans. Only after financial support was curtailed did
the developer reconsider the project. Using your knowledge of escalation of commitment, discuss three pos-
s ible reasons why the developer was motivated to continue with the proj ect.
5. Ancient Book Company has a problem w ith new book proj ects. Even when others are aware that a book is far
behind schedule and may engender little public interest, acquisitions editors are reluctant to terminate con-
tracts with authors whom they have signed . The result is that editors invest more time with these projects than
on more fruitful projects. As a for m o f escalation of commitment, describe two methods that Ancient Book
Company can use to minimize this problem.
6. A fres h graduate is offered a job by an employer she admires even before she could start the job search. T he
student thinks it is an opportunity and jumps on it. Do you think there is an effect of emotions in her decision
making?
7. Think of a time when you experienced the creative process. Maybe you woke up with a brill iant (but usually
sketchy and incomplete) idea, or you solved a baffling problem while doing something e lse. Describe this
incident to your class and explai n how the experience followed the creative process.
8. 1\vo characteristics of creative people are that they have relevant experience and are persistent in their quest.
Does this mean that people with the most experience and the highest need for achievement are the most cre-
ative? Explain your answer.
9. Employee involvement appl ies just as well to the classroom as to the office or factory floor. Explain how
student involvement in classroom decis ions typically made by the instructor alone might improve decision
qual ity. What potential problems may occur in this process?

Chapter Seven Decisio n Ma king a nd Creativity 2 1 1
Case Study:
EMPLOYEE INVOLVEMENT CASES
SCENARIO 1: THE PRODUCTIVITY DIVIDEND DECISION
As head of the transmission/distribution group (TO group) in the c ity’s water agency (a government corpora-
tion), you have been asked to reduce cost~ over the next year by a minimum of three percent without undermining
service. Your department employs about 300 people who are responsible for constructing and maintaining water
lines throughout the city. Although you have an engineering background , the work is complex and involves several
professions and trades. Even the TO group’s first line supervisors (one or two levels below you in the hierarchy)
are not fully knowledgeable of all aspects of the business.
You believe that most e mployees support or at least accept the city’s recent mandate to reduce costs (called
the “productivity dividend initiative”). The city leaders have stated that this initiative will not result in any lay-
o ffs this year. However, the labour union re presenting most nonmanagement staff in the water agency (includ-
ing most of your e mployees) is concerned that the productivity dividend initiative wi ll reduce employment
numbers over time and increase e mployee workloads. Although the TO group is a separate department within
the c ity water agency, it affect~ most other work units in the agency. It is possible, for example, that ideas that
reduce costs in the TO group might increase costs elsewhere . The T O group employees may be unaware of or
care about these repercussions because there is limited interaction with or social bonding w ith employees in the
departments.
SCENARIO 2: THE SUGAR SUBSTITUTE RESEARCH DECISION
You are the head of research and development (R&D) for a major beer company. While working on a new beer
product, one o f the scientists in your unit seems to have tentatively identified a new c hemical compound that ha~
few calories but tastes closer to sugar than current sugar substitutes. T he company has no foreseeable need fo r this
product, but it could be patented and licensed to manufacturers in the food industry.
The sugar-substitute discovery is in its preliminary stages and would require considerable time and resources
before it would be commercially viable. This means that it would necessarily take some resources away fro m
other proj ects in the lab. The sugar substitute project is beyond your technical expertise, but some o f the R&D
lab researchers are familiar w ith that field of chemistry. As with most such discoveries, it is diffic ult to determine
the amount o f research required to further identify and perfect the sugar substitute . You do not know how much
demand is expected for this product. Your department has a decision process for funding projects that are behind
schedule. However, there are no rules or precedents about funding projects that would be licensed but not used by
the organization.
The company’s R&D budget is limited, and other scientists in your work group have recently complained that
they require more resources and financial s upport to get their projects completed. Some of these R&D projects
hold promise fo r future beer sales. You bel ieve that most researchers in the R&D unit are committed to e nsuring
that the company’s interests are achieved.
SCENARIO 3: COAST GUARD CUTTER DECISION
You are the captain of a 72-metre Coast Guard c utter w ith a crew o f 16, includ ing o fficers. Your mission is
general at-sea search and rescue. Today at 2 :00a.m., while en route to your home port after a routine 28-day
patro l, you received word from the nearest Coast Guard station that a s ma ll plane had crashed 100 kilometres
o ffs hore. You obtained all the avail able infor mation concerning the location of the crash, informed your crew
o f the mission, and set a new course at maximum s peed for the scene to comme nce a search for survivors and
wreckage.
You have now been searching for 20 hours. Your search operation has been impaired by increa~ingly rough
sea~. and there is evidence of a severe storm building. T he atmospherics associated with the deteriorating weather
have made communications with the Coast Guard station impossible. A decis ion must be made shortly about
whether to abandon the search and place your vessel on a course that would ride out the storm (thereby protecting
the vessel and your crew, but relegating any possible s urvivors to almost certain death from exposure) or to con-
tinue a potentially futile search and the risks it would e ntail.
Be fore losing communications, you received an update weather advisory concerning the severity and duration
of the storm. Although your crew members are extremely conscientious about their responsibility, you believe that
they would be divided on the decision of leaving or staying.

212 Part Three Team Processes
SCENARIO 4: THE SOCIAL MEDIA POLICY DECISION
The Industry Initiatives Agency is a group of 120 professionals responsi ble for marketing the province as
a good place for companies to operate their business or open new operations. Although you report to the
head o f the province’s e mployment and commerce depar tment, your agency is semi-a utonomous in its po li-
cies and practices from the parent department. One of your highest priorities is to recruit and retain young,
well-educated , high-potential e mployees for this grow ing agency. During a recent recruiting drive at universi-
ties and polytechnics, some potential a pplicants candidly stated that the provincial government seems o ut of
touch with the younger generation, partic ularly in thei r use o f technology. A few observed that your agency’s
websi te doesn’ t provide much recruitment information, and they couldn’t fi nd the department’s Facebook or
Tw itter sites.
These comment~ led to you think about having a social media pol icy in the Industry Initiatives Agency, and
particularly whether or to what degree the agency s hould allow or possibly even encourage its staff to have work-
re lated Facebook sites, personal blogs, and 1\vitter sites, and to participate in those sites dur ing work hours.
You personally know very little about emerging social media, although many of your direct reports ( functional
managers and team leaders) have varying degrees of knowledge about them. A few have their own personal Face-
book sites and one manager has her own travel blog. Some direct report~ are strongly opposed to social media in
the workplace, whereas others are very supportive. However, you believe that all of their views are taken in the
agency’s bes t interests.
This social media policy decision would be within your mandate; unlike most governments, neither the pro-
vincial government nor the e mployment and commerce department has such a policy or restr ictions on any policy
that is designed by your agency. However, a few speci fic government departments prohibit Facebook and texting
activity during work and, due to concerns about breaches of confidentiality and employer reputation, do not allow
employees to mention work-related matters in any social media. Your decision is to develop a policy specifying
whether, and to what extent, to allow and e ncourage agency staff to engage in social network s ite activity during
work hours.
Discussion Questions (fo r all four scenarios)
1. To what extent should your subordinates be involved in this decision? Select one of the following levels o f
involvement:
• Decide alone. Use your personal knowledge and insight to complete the entire decision process without
conferr ing with anyone e lse.
• Recei1•e informaTion from individuals. Ask specific individuals fo r information . They do not make recom-
mendations and might not even know what the problem is about
• ConsulT wirh individuals. Describe the proble m to selected individuals and seek both their information and
recommendations. The final decision is made by you, which may or may not take the advice fro m others
into account
• ConsulT wirh rhe ream. You br ing together a tean1 of people (all department staff or a representation of
them if the department is large), who are told about the problem and provide their ideas and recommenda-
tions. You make the final decis ion, which may or may not reflect the tean1’s information.
• Facilirare rhe ream’s decision. T he entire decision-making process is handed over to a tean1 or committee
of s ubordinates. You serve only as a fac ilitator to guide the decision process and keep everyone on track.
The team identifies the problem, discovers alternative solutions, chooses the best alternative, and imple-
ments their choice.
2 . What fac tors led you to choose this level of employee involvement rather than the others?
3. What problems might occur if less or more involvement occurred in this case (where possible)?
Sources: The Productivity Dividend Decis ion and The Social Media Policy Decision: e2013 Steven L McShane. The Sugar
Substitute Re.•earch Decision: ©2002 Steven L McShane. T he Coast guard cutter ca..e is adapted from V. H. Vroom and A. G.
Jago. T he New leadership: Managing Participation in Organizations (Englewood Cli ffs. NJ: Prentice Hall, 1988). © 1987 V. H.
Vroom and A. G. Jago. Used with permission of the authors.

Chapter Seven Decisio n Mak ing and Creativity
Team Exercise:
WHERE IN THE WORLD ARE WE?
Purpose This exercise is designed to he lp you understand the potential advantages of involving others in
decis ions rather than making decisions alone.
213
Materials S tudents require an unmarked copy of the map of Canada w ith grid marks (Exhibit I). S tudents
are not allowed to look at any other maps or use any other materials. The instructor will provide a list of
communities located somewhere on Exhibit I. T he instructor w ill also provide copies of the answer sheet after
student~ have individually and in tean1s estimated the locations of communities.
EXHIBIT 1 Map of Canada
Instructions
Srep I : Using the table below, write down the list of communities identified by your instructor. Then, working
alone, estimate the location on E xhibit I of these communities, all of which are in Canada. For example, mark a
s mall “I” on Exhibit I on the spot where you believe the firs t community is located. Mark a small “2” where you
think the second community is located , and so on. Plea~e be sure to number each location clearly and with numbers
s mall enough to fit within one grid space.
Srep 2: T he instructor wi ll organize students into approximately equal-sized teams (typically five or six people
per team). Working w ith your team members, reach a consensus on the location of each community listed in the
table. T he instructor might provide teams with a separate copy of this map, or each member can identify the team ‘s
numbers using a different coloured pen on their individual maps. T he team’s decis ion fo r each location should
occur by consensus, not voting or averaging.
Srep 3: T he instructor will provide or display an answer sheet, showing the correct locations of the communi-
ties. Using this answer sheet, students will count the minimum number of grid squares between the location they
individually marked and d1e true location of each community. Write the number o f grid squares in the third column
of the table, then add up the total. Next, count the minimum number of grid squares between the location the team
marked and the true location o f each community. Write the number o f grid squares in the fourth column of the
table, then add up the total.

214 Part Three Team Processes
Srep 4: The instructor will ask for information about the totals and the class will discuss the implication of
these results for e mployee involvement and decision making.
List of Selected Communities in Canada
Number Community
Individual distance in grid uniL~ from the
Team distance in grid units from the true location
true location
I.
2.
3.
4.
5.
6.
7.
8.
Total: Total:
Copyright © 2002 Steven l. McShane
Self-Assessments for Chapter 7
SELF-ASSESSMENT NAME
What is your preferred decision-making style?
How well do you engage in divergent thinking?
Do you have a creative personality?
DESCRIPTION
Effective decision making is a critical part of most j obs. particularly
in professional and executive positions. But people have di ffe rent
decision-making s tyles. including how much they rely on facL~ and
logical analysis or emotional responses and gut instinct. This tool
assesses your preference fo r logical or intuitive decision making.
A key feature of c reativity is divergent thinking- reframing the
problem in a unique ·way and generating di fferent approaches to the
issue. One v.oay to test divergent thinking is by presenting ques tions
or problems in which the answer requires a diffe rent a pproach or
perspective from the us ual frame of mind. This se]f .. asse.’isment
presents a dozen of these questions.
Everyo ne is creative to some extent. but some people have
personality traits and personal values that give them higher c reative
potential. This self-assessment helps you to discover the extent to
which you have a c reative personality.

CHAPTER 8
Team Dynamics
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
LO 1 Expla in why employees join informa l groups and discuss the benefits and lim itations of teams.
L02 Outline the team effectiveness model and discuss how task cha racteristics, team size, and team
composit ion infl uence team effect iveness.
L03 Discuss how shared percept ions among team members, called team states, emerge and influence
team effectiveness.
L04 Discuss how team processes, such as taskwork, teamwork, team boundary spanning, and team
development determ ine team effectiveness.
LOS Discuss the characteristics and factors required for the success of self-directed teams and virtual teams.
LOG Identify four constraints on team decision making and discuss the advantages and disadvantages of
four structures a imed at improving team decision making.
How can one of Canada’s most well-known and successful retail chains, Canadian Tire, survive in
the digita l age? By embracing technology and innovation. Believe it o r not, Canadian Tire’s top two
advertising channels are Facebook and Google. After learn ing that Facebook users spend seve n
seconds on average watching their video feeds, with two -thirds of them tu rning off the sound,
2 15

2 16 Part Three Team Processes
Canadian Tire’s marketing team cranked out 50 seven-second spots to run on social media-
without sound of course.
They also created R&D hubs in places such as Water1oo, Winnipeg, and Calgary. At the heart of these
hubs are interdisciplinary teams composed of behavioural scientists, game and virtual-reality developers,
and statisticians. These teams have created modest social media apps aimed at specific audiences,
such as anglers, and more ambitious mobile interfaces that track store inventory in real time. 1
The Canadian Tire story shows that as the complexity of the modern organization has increa~ed, so has awareness that major projects require teams of people working together to accomplish goals.
This trend toward teamwork is, in fact, increasingly common in many industries. More than half of
North American organizations polled in one survey use teams to a high or very high extent to conduct
day-to-day business. Two decades ago, only 20 percent of executives said they worked in teams.2 Team-
work ha~ also become more important in scientific research. A study of almost 20 million research
publ ications reported that the percentage of journal articles written by teams rather than individuals
has increased substantially over the past five decades. Team-based articles were also subsequently
cited much more often, suggesting that j ournal articles written by teams are superior to articles written
by individuals.3
Why are teams becoming so important, and how can organizations strengthen their potential for
organizational effectiveness? We find the answers to these and other questions in this chapter on team
dynamics. The chapter begins by defining teams and examining the reasons why organizations rely on
teams and why people j oin informal groups in organizational settings. A large segment of this chapter
examines a model of team effectiveness, which includes team and organizational environment, team
design, team processes, and shared perceptions among team members-called team states. We then turn
our attention to two specific types of teams: self-directed teams and virtual teams. The final section of
this chapter looks at the challenges and strategies for making better dec isions in teams.
Teams and Informal Groups
Teams are groups of two or more people who interact and infl uence each other, are
mutually accountable for achieving common goals associated with organizational objec-
tives, and perceive themselves as a social entity within an organization.4 This definition
has a few important components worth repeating. First, all teams exist to fu lfil some purpose, such as
repairing electric power lines, assembl ing a product, designing a new social welfare program, or making
an important decision. Second, team members are held together by their interdependence and need
for collaboration to achieve common goals. All teams require some form of communication so that
members can coordinate and share common objectives. Third, team members influence each other,
although some members may be more influential than others regarding the team ‘s goals and activities.
Finally, a team exists when its members perceive themselves to be a team.
Exhibit 8. 1 briefly identifi es various types of teams in organizations along with three distinguishing
characteristics: permanence, skill differentiation, and authority differentiation.5 Team permanence
refers to how long that type of team usually exists. Although many employees work in teams that exist
indefinitely (e.g., departmental teams}, an emerging trend in organizations is the formation of teams
that exist very briefly, sometimes only for one eight-hour shift.6 For example, action teams often dis-
band after a few days or weeks. The second distinguishing characteristic, skill differentiation, refers to
the degree to which individuals bring diverse ski lls and knowledge to the team. Some advisory teams
have high ski ll differentiation because companies try to include representatives from most occupational
groups in the organization. In contrast, most functional departments consist of employees w ith very
simi lar skills (e.g., sales department staff tend to have s imi lar skills).
Authority differentiation, the third distinguishing characteristic of teams, refers to the degree that
decision-making responsibil ity is distributed throughout the team (low differentiation) or is vested
in one or a few members of the team. Departmental teams tend to have high authority differentiation

Chapter Eight Team Dynamics 217
EXHIBIT 8 .1 Types o f Teams in Organizations
81111 MdlarttJ’ …. .,., .,_, ….. ftl I De … ……. …. …..
Departmental teams Teams that consist of employees who have High Low to medium High
s imilar o r complementary skills and are
located in the same unit of a functional
s tructure: usually minimal task inte rde·
pendence because each person works with
employees in other departments.
Production/service/ Typically multiskilled (employees have High Medium to high Medium
leadership teams diverse competencies). team members
collectively p roduce a common product/
service o r make ongoing decis ions.
Self-directed teams Similar to production/service teams High Medium to high Low
except (I) they are organized around work
processes that complete an entire piece
of work requiring several interdependent
tasks. and (2) they have substan tial
au tonomy over the execution of those tasks
(i.e .• they usually control input,. flow. and
outpuL~ w ith little o r no supervision).
Task force (project) Usually multi skilled. tempo rary teams Low Medium Medium
teams whose assignmen t is to solve a pro blem,
realize an o pportunity. or design a p roduct
or service.
Action teams Similar to task forces. these highly s killed Low Medium Low
teams are formed for a short d uration and
given considerable a uto nomy to resolve
an urgent problem o r o p portunity, such as
solving an emergency o r crisis.
Advisory teams Team.’i that provide recommendations to deci· Low to medium Medium to high Medium
sion makers: include committees. advisory
councils, work councils. and review panels:
may be tempor.uy, but often pem1anenl
some ·with frequent rotation of members.
Skunkworks Muhiskilled teams that are usually located Medium Medium to high Medium
away from the o rganization and are rela·
tively free of its hierarchy: often initiated
by an e ntrepreneurial team lead er who bor·
rows people and resources (bootleggi11g) to
design a product o r service.
Virtual tean1s Teams whose members operate across Varies Medium to high Medium
space. time, and organizational boundaries
and are linked through info rmation
technologies to achieve o rganizational
tasks; may be a tempo rary task force o r
pennanent service team.
Communities of Teams (but often informal grou ps) bound Medium Low to medium Low
practice togethe r by s hared expertise and passion
for a particular activity o r inte rest : mai n
purpose is to share information: often rely
on information technologies as the main
source of interaction.

218 Part Three Team Processes
because they typically have a formal manager, whereas self- directed teams have low authority differ-
entiation because the entire team makes key decisions. The team leader, if there is one, does not have
final decision-making authority.
INFORMAL GROUPS
This chapter mostly focuses on forma l teams, but employees also belong to informal groups. All teams
are groups, but many groups do not satisfy our definition of teams. Groups include people assembled
together, whether or not they have any interdependence or organizationally focused objective. The
friends you meet for lunch are an informal group, but they wouldn’ t be called a team because they have
little or no interdependence (each person could just as easily eat lunch alone) and no organizational ly
mandated purpose. Instead, they exist primarily for the benefit of their members. Although the terms
are used interchangeably, teams has largely replaced groups in the language of business when referring
to employees who work together to complete organizational tasks?
Why do informal groups exist? One reason is that human beings are social animals. Our drive to bond
is hardwired through evolutionary development, creating a need to belong to informal groups.8 This is
evident by the fact that people invest considerable time and effort forming and maintaining social rela-
tionships without any special circumstances or ulterior motives. A second reason why people join infor-
mal groups is provided by social identity theory, which states that individuals define themselves by their
group affiliations (see Chapter 3). Thus, we join groups-particularly those that are viewed favourab ly
by others and that have values similar to our own-because they shape and reinforce our self-concept.9
A third reason why informal groups exist is that they accompl ish personal objectives that cannot be
achieved by individuals working alone. For example, employees will sometimes congregate to oppose
organizational changes because this collective effort has more power than individuals who try to bring
about change alone. These informal groups, called coalitions, are discussed in Chapter 10. A fourth
explanation for informal groups is that we are comforted by the mere presence of other people and are
therefore motivated to be near them in stressful situations. When in danger, people congregate near
each other even though doing so serves no protective purpose. Simi larly, employees tend to mingle
more often after hearing rumours that the company might be acquired by a competitor. As Chapter 4
explained, this social support minimizes stress by providing emotional and/or informational support to
buffer the stress experience. 10
Informal Groups a nd Organizational Outcomes Informal groups are not created to serve
organizational objectives. Nevertheless, they have a profound influence on organizations and employ-
ees. Informal groups potentially minimize employee stress because, as mentioned above, group mem-
bers provide emotional and informational soc ial support. This stress-reducing capability of informal
groups improves employee well-being, thereby improving organizational effectiveness. Informal
groups are also the backbone of social networks, which are important sources of trust building, infor-
mation sharing, power, influence, and employee well-being in the workplace. 11 Chapter 9 describes
the growing significance of social networking sites like Facebook and Linkedln in encouraging the
formation of informal groups and associated communication. Chapter I 0 explains how social networks
are a source of influence in organizational settings. Employees w ith strong informal networks tend to
have more power and influence because they receive better information and preferential treatment from
others and their talent is more visible to key decision makers.
Advantages and Disadvantages of Teams
Why do teams succeed at some organ izations and fail at others? The answer to this question has a
long history.’2 Early research on British coal mining in the 1940s, the J apanese economic miracle
of the 1970s, and a huge number of investigations since then have revealed that under the right
conditions, teams make better decisions, develop better products and services, and create a more
engaged workforce than do employees working alone. 13 Similarly, team members can qu ickly share

Chapter Eight Team Dynamics 219
information and coordinate tasks, whereas these processes are slower and prone to more errors intra-
ditional departments Jed by supervisors. Teams typically provide superior customer service because
they provide more breadth of knowledge and expertise to customers than ind ividual “stars” can offer.
In many situations, people are potentially more motivated when working in teams than when work-
ing alone.14 One reason for this motivation is that, as we mentioned in the previous section, employees
have a drive to bond and are motivated to fulfil the goals of groups to which they belong. This motiva-
tion is stronger when the team is part of the employee’s social identity.
Second, people are more motivated in teams because they are accountable to fellow team members,
who monitor performance more closely than a traditional supervisor. This is particularly true where the
team’s performance depends on the worst performer, such as on an assembly line, where how fast the
product is a~sembled depends on the speed of the slowest employee. Third, under some circumstances,
performance improves when employees work near others because co-workers become benchmarks of
comparison. Employees are also motivated to work harder because of apprehension that their perfor-
mance w ill be compared to the performance of others.
THE CHALLENGES OF TEAMS
In spite of their many benefits, teams are not always as effective as individuals working alone. 15 The
main problem is that teams have additional costs called process losses-resources (including time
and energy) expended toward team development and maintenance rather than the task.16 Team mem-
bers need time and effort to resolve their disagreements, develop mutual understanding of their goals,
determine the best strategy for accomplishing those goals, negotiate their specific roles, and agree on
informal rules of conduct. An employee working alone on a project does not have these disagreements,
misunderstandings, divergent viewpoints, or coordination problems with himself or herself (at least,
not nearly as much as with other people). Teams may be necessary when the work is so complex it
requires knowledge and skills from several people. But for tasks that can be performed alone, process
losses can make teams much Jess effective than a one-person project.
Process losses are amplified when more people are added or replace others on the team. 17 The new team
members consume time and effort figuring out how to work well with other team members. Performance
also suffers among current team members because they divert attention to accommodating and integrat-
ing the newcomer. Process losses increa~e even after new members are integrated because the larger team
requires more coordination, more time for conflict resolution, and so forth. The software industry even
ha~ a name for the problems of adding people to a team: Brooks’s law says that adding more people to a
late software project only makes it later! Although these problems are well known, research ha~ found that
managers consistently underestimate the process losses caused by adding more people to an existing team. 18
Social Loafing The process losses described above are mainly about coordination, but teams also
suffer from motivational process losses. T he best-known motivational process Joss is social loafing,
which occurs when people exert Jess effort (and usually perform at a lower level) in teams than when
working alone. 19 Social loafing is higher when individual performance is hidden or difficult to dis-
tinguish from the performance of others. Individual performance tends to be hidden in very large
teams and where the team produces a single output, such as finding a single solution to a customer’s
problem. There is Jess social loafing when each team member’s contribution is more noticeable. This
can be achieved by reducing the size of the team, for example, or measuring each team member’s
performance. “When the group is smaller, there’s nowhere to hide,” explains Strategic Investment~ &
Holdings principal David Zebro. “You have to pull your weight.”20
Social loafing is Jess prevalent when the task is interesting, because individuals are more motivated
by the work itself to perform their duties. For example, one recent study revealed that student apathy
explains some of the social loafing that occurs in university student teams.21 Social loafing is also
Jess common when the team’s objective is important, possibly because individuals experience more
pressure from co-workers to perform well . Finally, soc ial loafing occurs Jess frequent ly among
members who value team membership and believe in working toward the team ‘s objectives.

220 Part Three Team Processes
In summary, teams can be very powerfu l forces fo r competitive advantage, or they can be much
more trouble than they are worth. To understand when teams are better than individuals working alone,
we need to more closely exami ne the conditions that make teams effective or ineffective. The next few
sections of this chapter discuss the model of team effectiveness.
A Model of Tea m Effectiveness
Why are some teams effective whi le others fail? To answer this question, we first
need to clarify the meaning of team effec tiveness. A team is effec tive when it benefits
the organization and its members and survives long enough to accomplish its man-
date.22 First, most teams exist to serve some organizational purpose, so effectiveness is partly mea-
sured by the achievement of those objectives. Second, a team’ s effectiveness relies on the satisfaction
and well-being of its members. People join groups to fulfil the ir personal needs, so effectiveness is
partly measured by this need fu lfilment. Fi nally, team effectiveness includes the team’s ability to
survive long enough to ful fil its purpose. Earlier, we pointed out that very short-lived teams are an
emerging trend in organizations. Yet even these “flas h teams” could fall apart literally (people refuse
to join or stay with the team) or cognitively (members become cognitively and emotionally d isen-
gaged from the team).
Researchers have developed several models over the years to identify the features or conditions that
make some teams more effective than others.23 Exhibit 8.2 integrates the main components of these
team effectiveness models. We will closely exami ne each component over the next several pages. This
exhibit is a meta-model because each component (team composition, team cohesion, etc.) includes its
own set of theories and models to explain how that component operates.
ORGANIZATIONAL AND TEAM ENVIRONMENT
The organizational and team environment represent~ all conditions beyond the team’s boundaries that
influe nce its effectiveness. The environment is typically viewed a~ a resource pool that either supports or
inhibits the team’s ability to function and achieve its objectives2 4 Team members tend to work together
more effectively when they receive some team-based rewards, when the organization’s leadership is
EXHIBIT 8.2 Team Effectiveness Model
ORGANDTEAM
ENVIRONMENT
Rewards
Commun,cauon
Org Structure
Org Leadership
Physical Space
TEAM DESIGN /
~ Task Characte ristics
Team Size
Team Composltk»n ~
TEAM STATES
Norms
Cohesion
Team Efficacy
Team Trust
TEAM PROCESS
Taskwo rk
Teamwork
Boundary Spanning
TIME AND TEAM DEVELOPMENT
TEAM EFFECTIVEN ESS
Accomplish Tasks
Satisfy Member Need s
Malnta~n Team Survival

Chapter Eight Team Dynamics 22 1
supportive of team-oriented work structures (mther than “star” individuals), when the organization’s struc-
ture a~igns teams distinct clusters of work activity, when information systems support team coordination,
and when the physical layout of the team’s workspace encourages frequent communication.25
Along with functioning as a resource, the environment also genemtes drivers for change within teams.
External competition is an environmental condition that affects team dynamics, such as by increas-
ing motivation of team members to work together. Another environmental driver is changing societal
expectations, such as higher safety standards, which require teams to alter their norms of behaviour.
These external forces for change don’t only motivate teams to redesign themselves; they may also be
the focus of the team’s attention. For instance, teams develop better ways of working together so they
provide better customer service.
Team Design Ele ments
Even when it operates in a team-friendly environment, the team’s effectiveness w ill fall short of its
potential if the task chamcteristics, team size, team composition, and team roles are poorly designed.
TASK CHARACTERISTICS
One reason for the shift to teamwork is that making decisions and satisfying customers have become
increasingly complex. Complex work requires skills and knowledge beyond the competencies of one
person. Teams are particularly well suited for complex work that can be divided into more specialized
roles, and where the people in those specialized roles require frequent coord ination w ith each other.
Surgical teams have high task interdependence.
©Chris Ryan/age fotostock

222 Part Three Team Processes
Task complexity demands teamwork, but teams also function better when the work is well-structured
rather than ambiguous. Assembl ing automobiles consists of well-structured tasks, whereas a team
performing a new medical procedure would have novel and Jess-structured work activities. The main
benefit of well-structured tasks is that it is easier to coordinate the work among several people.
Compared to individuals working alone, teams are more likely to stumble when faced with ambiguous
work activities. Performing a new medical procedure would Jack the task structure of assembling
cars dozens of times each day, for example. Fortunately, teams can perform ambiguous ta~ks reason-
ably well when they have well-structured roles. The medical team members have enough role clarity
to generally know what to expect of each other-the surgeon, scrub technic ians, operating room
nurses, anesthesiologist, and others-and how to coordinate most work challenges even in these
unique situations.26
Wha t team roles do y ou prefer? You can discover your role preferences in teams by
locating this self-assessment in Connect. –
An important ta~k-related influence on team effectiveness is task interd ependence-the extent to
which team members must share materials, information, or expertise to perform their jobs.27 Apart from
complete independence, there are three levels of ta~k interdependence, as illustrated in Exhibit 8.3. The
lowest level of interdependence, called pooled interdependence, occurs when an employee or work unit
shares a common resource, such a~ machinery, administrative support, or a budget, with other employees
or work units. This would occur in a team setting where each member works alone but shares raw mate-
rials or machinery to perform her or his otherwise independent tasks. Interdependence is higher under
sequential interdependence, in which the output of one person becomes the direct input for another per-
son or unit. Sequential interdependence occurs where team members are organized in an assembly line.
Reciprocal interdependence, in which work output is exchanged back and forth among individu-
als, produces the highest degree of interdependence. People who design a new product or service
would typically have reciprocal interdependence because their design decisions affect others involved
in the design process. Any decision made by the design engineers would influence the work of the
EXHIBIT 8.3 Levels of Task Interdependence
Pooled
interdepende nce
Seque ntial
interdepende nce
Reciprocal
interdependence
Shared
Resource

Chapter Eight Team Dynamics 223
manufacturing engineer and purchasing specialist, and vice versa. Employees with rec iprocal inter-
dependence should be organized into teams to facil itate coordination in their interwoven relationship.
As a rule, the higher the level of task interdependence, the greater the need to organize people into
teams rather than have them work alone. A team structure improves interpersonal communication and
thus results in better coordination. High task interdependence also motivates most people to be part of
the team. However, the ruJe that a team should be formed when employees have high interdependence
applies when team members have the same task goals, such as serving the same clients or collectively
assembl ing the same product. When team members have different goals (such a~ serving different clients)
but must depend on other team members to achieve those unique goals, teamwork might create exces-
sive conflict. Under these circumstances, the company should try to reduce the level of interdepen-
dence or rely on supervision as a buffer or mediator among employees.
TEAM SIZE
What is the ideal size for a team? By now you probably understand that the answer to this question
depends on the type of team we are talking about. The tasks performed by leadership teams and project
teams tend to be complex and knowledge intensive, so increases in team size might capitalize on
additional expertise or resources. On the other hand, production teams engage in work that is more
routine and standardized, so additional members might add unnecessary coordi nation requirements.28
Generally, teams should be large enough to provide the necessary competencies and perspectives to
perform the work, yet small enough to maintain efficient coordination and meaningful involvement of
each member.29 “You need to have a balance between having enough people to do all the things that
need to be done, while keeping the team small enough so that it is cohesive and can make decisions
effectively and speedily,” says Broadcast Australia CEO Jim Hassell, who has also held executive roles
at IBM and NB N Corp.30 Small teams (say, fewer than a dozen members) operate effectively because
they have less process loss. Members of smaller teams also tend to feel more engaged because they
have more influence on the group’s norms and goals and fee l more responsible for the team’s success
and failure. Also, members of smaller teams get to know each other better, which improves mutual trust
as well as perceived support, help, and assistance from those team membersY
ShouJd companies have 100-person teams if the task is highly complex? The answer is that a group this
large probably isn’t a team, even if management calls it one. A team exists when its members interact and
infl uence each other, are mutually accountable for achieving common goals a~sociated with organizational
objectives, and perceive them~elves as a social entity within an organization. It is very difficult for everyone
in a 1 00-person work unit to influence each other and experience enough cohesion to perceive themselves
as team members. However, such complex tasks can usually be divided into smaller clusters of people.
TEAM COMPOSITION
In most workplaces, employees must have more than technical skills; they must also be able and wi lling
to work in a team environment. Some companies go to great lengths to hire people who possess team
competencies. The most frequently mentioned characteristics or behaviours of effective team members
are depicted in the “Five C’s” model illustrated in Exhibit 8.4: cooperating, coordinating, communi-
cating, comforting, and conflict resolving. The first three competencies are mainly (but not entirely)
ta~k-related, while the last two primarily assist team maintenance:32
Cooperating. Effective team members are w illing and able to work together rather than alone.
This includes sharing resources and being sufficiently adaptive or flex ible to accommodate the
needs and preferences of other team members, such as reschedul ing use of machinery so that
another team member with a tighter deadline can use it.
Coordinating. Effective team members actively manage the team ‘s work so that it is performed
eff iciently and harmoniously. For example, effective team members keep the team on track and
help to integrate the work performed by different members. This typically requires that effective
team members know the work of other team members, not just their own.

224 Part Three Team Processes
EXHIBIT 8.4 Five C’s of Team Member Competency
Cooperating
• Slwe resources
· Accommodate others
Conflict
Resolving
·Diagnose conflict
sources
· Use best conflict
handling style
Comforting
·Show empathy
· Provide psych. comfort
· Build conf idence
Coordinating
·Align work with
others
·Keep team on track
Communicating
·Share information freely,
efficiently, respectfully
• Listen actively
Sourr:es: Ba..:;ed on information in V. Rou..:;seau. C. Aubt. and A. Savoie. “Teamwork BehaviOr$: A Review and an lnteg.nuion of Frameworks.”
Small Group Research 37. no. 5 (2006). pp. 54().570: M.L. Loughry. M.W. Ohland. and D. D. Moore. “‘Development of a Thetmi:Atimr Mmw~-ement. 40(1) . 6-34.

226 Part Three Team Processes
Tra nsactive Memory A transactive memory system describes how task-relevant knowledge is distrib-
uted within a team and the collective awareness of who knows what. To illustrate, consider the example of a
group of business students working on a sustainability ca~e competition. A ca~e competition requires a visu-
ally arresting slide deck, engaging speakers, and a well-rounded, thorough presentation. Having one person
with sound sustainability knowledge is a must, but what about the rest of the team? One person could bring
in knowledge of finance and quantitative ability, another could bring his/her marketing background to
use the sustainability-centric recommendation as a branding tool, while another might possess knowledge
of strategy and use that to tell the entire story in a meaningful way. Clearly defined and complementary
strengths make for a much stronger team, but unless team members know who ha~ what skill, those skills
might get wasted and lead to process losses. Thus, the idea behind the transactive memory concept is for
teams to not only organize around complementary skills, but to devote time and energy toward understand-
ing how those skills are distributed. This is important because research shows that teams with more well-
developed transactive memory systems outperform teams with less well-developed systems.40
Team States
The third set of elements in the team effectiveness model, collectively known as team
states, includes team norms, cohesion, team efficacy, and trust. These elements represent
motivational or cognitive characteristics of the team that continuously evolve.
TEAM NORMS
Norms are the informal rules and shared expectations that groups establish to regulate the behaviour
of their members. Norms apply only to behaviour, not to private thoughts or feel ings. Furthermore,
norms exist only for behaviours that are important to the team.41 Norms are enforced in various ways.
Co-workers grimace if we are late for a meeting, or they make sarcastic comments if we don’t have
our part of the project completed on time. Norms are also directly reinforced through praise from
high-status members, more access to valued resources, or other rewards available to the team. But
team members often conform to prevailing norms without direct reinforcement or punishment because
they identify with the group and want to align their behaviour with the team’s expectations. The more
closely the person’s social identity is connected to the group, the more the individual is motivated to
avoid negative sanctions from that group.42
How Team Norms Develop When teams form, norms develop because people need to anticipate
or predict how others will act. Even subtle event~ during the team’s formation, such as how team members
initially greet each other and where they sit in the first meetings, can initiate norms that are later difficult
to change. Norms also form a~ team members discover behaviours that help them func tion more effec-
tively (such a~ the need to respond quickly to email).43 In particular, a critical event in the team’s history
can trigger formation of a norm or sharpen a previously vague one. A third influence on team norms are
the experiences and values that members bring to the team. If members of a new team value work-l ife
balance, norms are likely to develop that discourage long hours and work overload.44
Preventing and Changing Dysfunctional Team Norms Team norms often become deeply
anchored, so the best way to avoid norms that undermine organizational success or employee well-being
is to establish desirable norms when the team is firs t formed. One way to do this is to clearly state
desirable norms when the team is created. Another approach is to select people with appropriate values.
If organizational leaders want their teams to have strong safety norms, they should hire people who
already value safety and who clearly identify the importance of safety when the team is formed.
The suggestions so far refer to new teams, but how can organizational leaders maintain desirable norms
in older teams? One solution comes from a study showing that leaders often have the capacity to alter exist-
ing norms.45 By speaking up or actively coaching the team, they can often subdue dysfunctional norms
while developing useful norms. A second suggestion is to introduce team-based rewards that counter

Chapter Eight Team Dynamics 227
dysfunctional nonns. However, studies report that employees might continue to adhere to a dysfunctional
team nonn (such a~ limiting output) even though this behaviour reduces their paycheque. Finally, if dys-
functional norms are deeply ingrained and the above solutions don’t work, it may be necessary to disband
the group and replace it with people having more favourable norms.
TEAM COHESION
Team cohesion refers to the degree of attraction people feel toward the team and their motivation to remain
members. It is a characteristic of the team, including the extent to which its members are attracted to the
team, are committed to the team’s goals or tasks, and fee l a collective sense of team pride.46 Thus, team
cohesion is an emotional experience, not just a calculation of whether to stay or leave the team. It exists
when team members make the team part of their social identity. Team cohesion is associated with team
development because team members develop a team identity as part of the team development process.
Influences on Team Cohesion Several factors influence team cohesion, but the six described
here seem to be the most important: member similarity, team size, member interaction, difficult entry,
team success, and external competition or challenges. For the most part, these factors reflect the indi-
vidual’s social identity with the group and bel iefs about how team membership w ill fulfil personal needs.
Member similarity. Soc ial scientists have long known that people are attracted to others who are
similar to them.47 This similarity-attraction effect occurs because we assume that people who
look like us and have similar backgrounds are more trustworthy and are more likely to accept
us. We also expect to have fewer negative experiences, such as conflicts and violations of our
expectations and bel iefs. Thus, teams have higher cohesion or become cohesive more quickly
when members are similar to each other. In contra~!, it is more diffi cult and takes longer for
teams with diverse members to become cohesive. This difficulty depends on the form of diver-
sity, however. Teams consisting of people from different j ob groups seem to gel together just as
well as teams of people from the same job.48
Team size. Smaller teams tend to have more cohesion than larger teams because it is easier for
a few people to agree on goals and coordinate work activities. However, smal l teams have Jess
cohesion when they Jack enough members to perform the required tasks.
Member interaction. Teams tend to have more cohesion when team members interact with each
other fairl y regularly. This occurs when team members perform highly interdependent tasks and
work in the same physical area.
Somewhat difficult entry. Teams tend to have more cohesion when entry to the team is
restricted. The more el ite the team, the more prestige it confers on its members, and the more
they tend to value their membership in the unit. At the same time, research suggests that severe
initiations can weaken team cohesion because of the adverse effects of humiliation, even for
those who successfully endure the initiation.49
Team success. Team cohesion increases with the team’s level of success because people are
attracted to groups that fulfil their needs and goals. 5° Furthermore, individuals are more likely
to attach their social identity to successful teams than to those with a stri ng of fai lures.s’
External competition and challenges. Team cohesion tends to increase when members face
external competition or a valued objective that is challenging. This might include a threat from
an external competitor or friendly competition from other teams. Employees value their mem-
bership on the team because of its ability to overcome the threat or competition and as a form of
social support. However, cohesion can dissipate when external threats are severe because these
threats are stressful and cause teams to make Jess effective decisions.52
Consequences of Team Cohesion Teams with higher cohesion tend to perform better than
those with low cohesion.53 In fact, the team ‘s existence depends on a minimal level of cohesion
because it motivates team members to remain members and to help the team achieve its mutual ly

228 Part Three Team Processes
agreed objectives. Members of high-cohesion teams spe nd more time together, share information more
frequ ently, and are more satisfied with each other. They provide each other with better social support
in stressfu l situations and work to minimize dysfunctional confl ict. 54 When confl ict does arise, high-
cohesion team members tend to resolve their differen ces swiftly and effectively.
However, at least two contingencies make the cohesion- performance relationship somewhat more
complex . First, team cohesion has Jess effect on team performance when the team has low task interde-
pendence. 55 High cohesion motivates employees to coordinate and cooperate w ith other team members,
Lululemon, a yoga-inspired athletics apparel retailer founded in Vancouver, is a Canadian success story.
It has over 300 corporate-owned stores and more than 2800 employees in Canada, the USA, the
United Kingdom, Austra lia, New Zealand, and Singapore. In 2015 the retailer earned $ 2.1 b illion in
net revenue. Lululemon is known for its distinctive corporate ethos, which nurtures employee health,
loya lty, and team engagement. Lululemon describes its employees as passionate and motivated
people “who are driven to succeed and share our purpose of ‘elevating the world from mediocrity
to greatness.”‘ Employees are hired only after an extensive vetting process, based on their ability
to embody the corporate culture of happy and healthy transformation. Lululemon fosters team
cohesion among its workers through several unique strategies aimed at promoting self-actualization.
Lululemon seeks to inspire staff by encouraging workers to engage in goal setting using vision
boards, circu lating self-help literature and books, and pursuing a lifestyle of yoga and fitness by
provid ing yoga stud io benefits and self-empowerment training. Store managers have the authority to
implement local initiatives to motivate employees, and store employees, who are called “educators,”
are urged to participate in community-based sports and grassroots wellness campaigns as brand
ambassadors. A core corporate philosophy is that employees need to invest in themselves to b uild
healthy relationships in order to advance personally and professionally. The company routinely
promotes team bonding through fitness activities and group goal-setting eventss6
© mubus 7/Shutterstock

Chapter Eight Team Dynamics
EXHIBIT 8.6 Effect o f Team Cohesion on Task Performance
Team norms
support
company
goals
Team norms
conflict with
company
goals
low
Moderately
high task
performance
l o w task
performance
Team
cohesiveness
229
High
but people don’t need to cooperate or coordinate as much when little of their work depends on other
team members (low task interdependence). So the motivational effect of high cohesion is less relevant
in teams with low interdependence.
Second, the effect of cohesion on team performance depends on whether the team’s norms are
compatible with or opposed to the organizational objectives57 As Exhibit 8.6 illustrates, teams w ith
high cohesion perform better when their norms are aligned with the organization’s objectives, whereas
higher cohesion can potentially reduce team performance when norms are counterproductive. This
effect occurs because cohesion motivates employees to perform at a level more consistent with team
norms. If a team’s norm tolerates or encourages absenteeism, employees will be more motivated to
take unjustified sick leave. If the team’s norm discourages absenteeism, employees are more motivated
to avoid taking sick leave.
One last comment about team cohesion and performance: Recall earlier in this section we said that
team performance (success) increases cohesion, whereas we are now saying that team cohesion causes
team performance. Both statements are correct, but there is some evidence that team performance has
a stronger effect on cohesion than vice versa. In other words, a team ‘s performance will likely affect its
cohesion, whereas a team’s cohesion has less of an effect on its performance 5 8
Are you a team player? You can discover your preferences about teamwork by
locating this self-assessment in Connect.
TEAM EFFICACY
Have you ever been part of a team where everyone bel ieved the team was highly likely to succeed?
If so, you were in a team with high team efficacy, which is the shared perception among team members
about the team’s overall level of capabil ity. A vast amount of research has shown that teams w ith high
levels of efficacy outperform teams with low levels of efficacy, espec ially when task interdependence
is high.59 When a team has high efficac y, members are more likely to set ambitious goals, put forth

230 Part Th ree Team Processes
greater effort, persist longer when faced with challenging obstacles, and view negative feedback as an
opportunity rather than a challenge.
On the other hand, teams characterized by low team efficacy are more likely to experience apathy,
uncertainty, and a lack of direction. Research ha~ shown that the dysfunctional characteristics associated
with low efficacy include heightened anxiety,60 greater social loafing,61 and less vigilance in decision-
making processes62 Researchers have also found a link between team efficacy and the extent to which
individual team members engage in the behaviours described in the team competency model presented
earlier in the chapter. For example, in teams with high efficacy, individual team members are more
likely to display coordination and cooperative type behaviours6 3
Considering how important team efficacy is to overal l team performance, it is worthwhile to con-
sider where this perception comes from and how it can be developed. In general, teams have higher
levels of efficacy when individual team members are more confident about their own team-specific
skills, when the team is composed of members who have knowledge about the team’s task, and when
team members show visible teamwork behaviours, such as contributing to the ta~k and managing rela-
tionship dynamics.64 Having a leader who uses a more participative versus controlling style can also
increase team efficacy.65
TEAM TRUST
Any relationship-including the relationship among team members-depends on a certain degree of
trust. Trust refers to positive expectations one person has toward another person in s ituations involv-
ing risk (see Chapter 4).66 Trust is ultimately perceptual, in which we trust others based on our bel iefs
about their ability, integrity, and benevolence. It also has an emotional component, because you experi-
ence positive feelings toward those you trust.67 Trust is built on three foundations: calculus, knowledge,
and identification (see Exhibit 8.7).68
Calculus-based trust. This foundation represents a logical calculation that other team members
wi ll act appropriately because they face sanctions if their actions violate reasonable expecta-
tions.69 It offers the lowest potential trust and is easily broken by a violation of expectations.
Some scholars suggest that calculus-based trust is not trust at all. Instead, it might be trust in the
system rather than in the other person. In any event, calculus-based trust alone cannot sustain a
team ‘s relationship because it relies on deterrence.
Knowledge-based trust. This form of trust is based on the predictability of another team member’s
behaviour. This predictability refers only to “positive expectations”-as the definition of trust
EXHIBIT 8.7 Three Fou ndations of Trust in Teams
Potential
level of
Tru st
H igh
low
Type of t rust
Identification-
based trust
Knowledge-
based trust
Calculus-
based trust
Description
• Based on common mental models and values
• Increases with person’s social identity with team
• Based on predictability and co~etence
• Fairly robust
• Based on deterrence
• Fragile and limited potential because dependent
on punishment

Chapter Eight Team Dynamics 23 1
states-because you would not trust someone who tends to engage in harmful or dysfunctional
behaviour. Knowledge-based trust includes our confidence in the other person’s abi lity or com-
petence, such as the confidence that exists when we trust a physician70 Knowledge-based trust
offe rs a higher potential level of trust than calculus-based trust and it is more stable because it
develops over time.
Identification-based trust. This fou ndation is based on mutual understanding and an emotional
bond among team members. It occurs when team members think, feel, and act like each other.
High-performance teams exhibit this level of trust because they share the same values and
mental models. Identi fication-based trust is potentially the strongest and most robust of all three
types of trust. The individual’s self-concept is based partly on membership in the team and he
or she bel ieves the members’ values significantly overlap, so any transgressions by other team
members are quickly forg iven. People are more reluctant to acknowledge a violation of this
high-level trust because it strikes at the heart of their self-concept.
Dynamics of Team Trust Employees typically join a team with a moderate or high level-not a
low Jevel~f trust in their new co-workers? ‘ The main explanation for the initially high trust (called
swift trust) in organizational settings is that people usually believe fellow team members are reasonably
competent (knowledge-based trust) and they tend to develop some degree of social identity w ith the
team (identification-based trust). Even when working with strangers, most of us display some level of
trust, if only because it supports our self-concept of being a good person. However, trust is frag ile in new
relationships because it is based on a~sumptions rather than well-established experience. Consequently,
studies report that trust tends to decrease rather than increa~e over time. This is unfortunate, because
employees become Jess forgivi ng and less cooperative toward others as their level of trust decreases,
and this undermines team and organizational effectiveness. n
How trusting are you? You can d iscover your trust propensity by locating this
self-assessment in Connect.
Team Processes
L04 The next set of elements in the team effectiveness model, collectively known as team
processes, refers to the interactions and activities that occur within a team as it works
toward its goal . Traditionally, researchers have looked at the team’s internal dynamics,
such as task coordination and interpersonal relationships, to describe team process. However, there
is growing recognition that team interactions with external parties also determine how well a team
performs. For this reason we wi ll describe both internal and external team processes. We w ill also
describe the element of time or, in other words, how teams develop.
INTERNAL TEAM PROCESSES
Internal team processes have historically been categorized as either teamwork or taskwork. Team work
behaviour has been described a~ activities that are devoted to enhancing the quality of the interactions,
interdependencies, cooperation, and coordination of teams.73 During interactions between team mem-
bers, teamwork behaviour takes the form of overt actions and verbal statements that contribute to the
coordination demands of the team ‘s task?4 For example, a team member would be engaging in team-
work behaviour when they steer their fellow team members toward on-topic conversations, suggest
setting time deadlines for completing tasks, or attempt to resolve a confl ict within the group.
On the other hand, taskwork behaviour has been described a~ team members’ efforts that are devoted
to understanding the task requirements, discovering the “rules” by which the tasks are to be performed,

232 Part Three Team Processes
establishing the patterns of interaction with equipment, exchanging ta~k-related information, develop-
ing team solutions to problems, and so forth. Thus, ta~kwork represents the technical performance of
the team ‘s task, whereas teamwork behaviours are used to direct, align, and monitor ta~kwork75 To
illustrate, the ta~kwork of a surgical team includes the tasks carried out to complete a surgical proce-
dure, such as patient preparation, use of anesthesia, and suturing incisions. On the other hand, teamwork
behaviours in a surgical team might include individual activities such as the identification of goals, sug-
gestions for improving coordination, and efforts to resolve conflict, all of which help to ensure that the
patient is effectively prepared for surgery, anesthesia is appropriately administered, and incisions are
properly sutured. To perform well, a team needs to excel at both types of internal process.
EXTERNAL TEAM PROCESSES
Processes that occur between team members matter a great deal, but teams must also interact w ith
people and groups who exist beyond the team’s boundary. Team boundary spanning refers to team
actions that establish or enhance linkages and manage interactions w ith parties in the external environ-
ment.76 In their classic study of product development teams, Ancona and Caldwell ( 1992) classified
external activities into different types and showed how these types impact overall team performance.
They described the first type as ambassador activities because these activities encompassed such
behaviours as protecting the team from outside pressure, persuading others to support the team, and
lobbying for resources. The amba~sador function tends to focus on the team ‘s ability to mould and
shape the beliefs of external constintents. Scholars often refer to amba~sador activities as vertical
boundary spanning because these activities frequently involve communicating with those higher in the
organization’s hierarchy, such as corporate or division managers.n
The second type of boundary activity was labelled task coordination. This type represents interactions
aimed at coordinating technical or design issues. Some examples include discussing design problems
with others, obtaining feedback on the product design, and coordinating and negotiating w ith outsiders.
In contrast to ambassador activities, task coordination activities show higher levels of communication
laterally through the organization. Thus, they are often referred to a~ horizontal boundary spanning.
As predictors of performance, ambassador and task coordinator activity were both positively related78
A third type of boundary spanning, called scouting activity, is described a~ a general scanning for ideas
and information about the competition, the market, or the technology; thus, scouting activity is mostly
directed at obtaining information from sources external to the organization. Although it would seem
that scouting activity should be helpful, research ha~ shown instead that prolonged scouting can actually
harm team performance because it detracts from internal team processes.
TEAM DEVELOPMENT
Our model of team effectiveness also includes a longitudinal dimension, signifying that things like team
processes and team states are not stable over time. For example, researchers have discovered that per-
ceptions of team efficacy measured shortly after a team is created do correlate w ith team performance.
However, team efficacy measured closer to the midpoint of a team’s task is a much stronger predictor
of team performance than efficacy measured earlier.79 What is known about the changes teams experi-
ence over time? Team members must get to know and trust each other, understand and agree on their
respective roles, discover appropriate and inappropriate behaviours, and learn how to coordinate with
each other. The longer team members work together, the better they develop common or complementary
mental models, mutual understanding, and effective performance routines to complete the work.
Two popular models that capture team development activities are shown in Exhibit 8.8.80 The first
shows teams moving systematically from one stage to the next, while the da~hed lines illustrate that
teams might fall back to an earlier stage of development as new members join or other conditions
disrupt the team ‘s maturity. Forming, the first stage of team development, is a period of testing and
orientation in which members learn about each other and evaluate the benefits and costs of continued
membership. People tend to be pol ite, w ill defer to authority, and try to find out what is expected of
them and how they wi ll fit into the team. The storming stage is marked by interpersonal confl ict as

Chapter Eight Team Dynamics 233
EXHIBIT 8.8 Models of Team Development
T he Five-Stage M odel
Forming
• 01scover expectations
·Test bot11danes of behaviour
The Punctuated Equilibrium M odel
Tim e Midpoint Tim e
members become more proactive and compete for various team roles. Members try to establ ish norms
of appropriate behaviour and performance standards.
During the nanning stage, the team develops its first real sense of cohesion as roles are established and a
consensus forms around group objectives and a common or complementary team-based mental model. By
the peiforming stage, team members have learned to efficiently coordinate and resolve conflicts. In high-
performance teams, members are highly cooperative, have a high level of trust in each other, are commit-
ted to group objectives, and identify with the team. Finally, the adjourning stage occurs when the team is
about to disband. Team members shift their attention away from task orientation to a relationship focus.
The second model of team development focuses more directly on how teams pay attention to time and
deadlines. This model, known a~ the punctuated equilibrium model, states that teams working under strict
deadlines experience three important phases: the initial meeting, a midpoint transition, and the period close
to the endpoint. 81 Each of these pha~es is connected by a period of inertia in which major changes to the
team’s task and direction are unlikely to occur. For example, a sn1dent team working on a project with a
deadline would experience the first phase in their initial meetings. Here, they might agree on how to allo-
cate workload and discuss overall goals for the project. After a period of inertia in which work progresses
smoothly, the team experiences a spike in activity around the midpoint. If the team manages team pro-
cess effectively at the midpoint, they set themselves up for another period of relative inertia leading to a

234 Part Three Team Processes
positive endpoint. However, without questioning their approach at the midpoint they set themselves up for
tension and conflict as work progresses to the endpoint. The most important practical lesson from these
models of team development is that teams need to carefully attend to the issue of time pacing.82
Developing Team Identities and Mental Models Although these models depict team
development fairly well, they are not a perfect representation of the process. For instance, some teams
remain in a particular stage longer than others and sometimes regress back to earlier stages of develop-
ment. The models also ma~k two sets of processes that are the essence of team development: developing
team identity; and developing team mental models and coordinating routines. 83
Developing team idenlity. Team development is apparent when its members shift from viewing
the team as something “out there” to something that is part of themselves. In other words, team
development occurs when employees take ownership of the team’s success and make the team
part of their social identity.84
Developing team menial models and coordinating routines. Team development includes
developing habitual routines with team members and forming shared or complementary mental
models.85 Team mental models are visual or relational mental images that are shared by team
members, such as what good customer service looks like. A meta-analysis supports the view
that teams are more effective when their members share common mental models of the work.86
Accelerating Team Development through Team Building Team building consists of
formal activities intended to improve the development and functioning of a work team.87 To a large
extent, team building attempts to speed up the team development process. This process may be applied
to new teams, but it is more commonly introduced for existing teams that have regressed to earl ier
stages of team development due to membership turnover or loss of focus.
Some team-building interventions are task-focused. They clarify the team’s performance goals, increase
the team’s motivation to accomplish these goals, and establish a mechanism for systematic feedback on
the team ‘s goal performance. A second type of team building tries to improve the team’s problem-solving
skills. A third category clarifies and reconstructs each member’s perceptions of her or his role as well as
the role expectations that member has of other team members. Role definition team building also helps the
team to develop shared mental models–common internal representations of the external world, such a~
how to interact with clients, maintain machinery, and engage in meetings. Research sntdies indicate that
team processes and performance depend on how well team members share common or complementary
mental models about how they should work together.88 A fourth-and likely the most common-type of
team building is aimed at helping team members learn more about each other, build trust in each other, and
develop ways to manage conflict within the team. Popular interventions such as wilderness team activities,
paintball wars, and obstacle-course challenges are typically offered to build trust.
Do team building interventions improve team development and effectiveness? The most effective team
building seems to be those in which employees receive training on specific team competencies, such a~
coordinating, conflict resolving, and communicating89 However, many team-building activities are less suc-
cessfi.tl.90 One problem is that team building interventions are used as general solutions to general team
problems. A better approach is to begin with a sound diagnosis of the team’s health and then select team-
building interventions that address specific weaknesses.91 Another problem is that team building is appl ied
as a one-shot medical inoculation that every team should receive when it is formed. In truth, team building
is an ongoing process, not a three-day jump start.92 Finally, we must remember that team building occurs on
the job, not just on an obstacle course or in a national park. Organizations should encourage team members
to reflect on their work experiences and to experiment with just-in-time learning for team development.
The team effectiveness model is a useful template for understanding how teams work-and don’t work-
in organizations. With this knowledge in mind, let’s briefly investigate two types of teams that have emerged
over the pa~t couple of decades to become important in organizations: self-directed teams and virntal teams.93

Chapter Eight Team Dynamics 235
Self-Directed Teams
Self-directed teams (SOTs) are cross-functional groups that are organized around work
processes, complete an entire piece of work requiring several interdependent ta~ks, and
have substantial autonomy over the execution of those tasks.94 This definition captures
two distinct features of SOTs. First, these teams complete an entire piece of work requiring several inter-
dependent tasks. This type of work arrangement clusters the team members together while minimiz-
ing interdependence and interaction with employees outside the team. The result is a close-knit group
of employees who depend on each other to accomplish their individual tasks. The second distinctive
feature of SOTs is that they have substantial autonomy over the execution of their tasks. In particular,
these teams plan, organize, and control work activities with little or no direct involvement of a higher-
status supervisor.
Self-dire cted teams are found in several industries, ranging from petrochemical plants to air-
craft parts manufacturing. Most of the top-rated manufacturing firms in North America appar-
ently rely on SOTs.95 Indeed, self-d irected teams have become such a popular way to organize
employees in manufacturing, services, a nd government work that many compan ies don’ t reali ze
they have them. The popularity of SOTs is consistent with research ind icating that they poten-
tially increase both productiv ity and job satisfaction 96 For instance, one study found that car
dealersh ip service shops that organize employees into SOTs are s ign ificantly more profitable than
shops where employees work without a team structure. Another study reported that both short- and
long-term measures of customer satisfaction increased after street cleaners in a German ci ty were
organized into SOTs.
SUCCESS FACTORS FOR SELF-DIRECTED TEAMS
The successful implementation of self-directed teams depends on several fac tors.97 SOTs should be
responsible for an entire work process, such as making an entire product or providing a service. This
structure keeps each team sufficientl y independent from other teams, yet it demands a relatively high
degree of interdependence among employees within the team98 SOTs should also have sufficient
autonomy to organize and coordi nate their work. Autonomy al lows them to respond more quickly
and effectively to cl ient and stakeholder demands. It also motivates team members through feel ings
of empowerment. Final ly, SOTs are more successful when the work site and technology support coor-
dination and communication among team members and increase job enrichment.99 Too often, man-
agement calls a group of employees a “team,” yet the work layout, assembly-l ine structure, and other
technologies isolate the employees from each other.
V irtual Teams
Virtual t eams are teams whose members operate across space, time, and organizational bound-
aries and are linked through information technologies to achieve organizational tasks. 100 Virtual
teams d iffer from traditional teams in two ways: (I) They are not usually co-located (do not work
in the same physical area), and (2) due to their Jack of co-location, members of virtual teams
depend primarily on information technologies rather than face-to-face interaction to commun icate
and coordinate their work effort. Teams have degrees of virtuality. Team virtuali ty increases wi th
the geographic dispersion of team members, percentage of members who work apart, and percent-
age of time that members work apart. For example, a team has low virtuality when all of its mem-
bers live in the same ci ty and only one or two members work from home each day. High virtuali ty
exists when team members are spread around the world and on ly a couple of members have ever
met in person.

236 Part Three Team Processes
Debating Point:
ARE VIRTUAL TEAMS MORE TROUBLE THAN THEY’RE WORTH?
Virtua l teams were rare before the Internet. Today, they are almost as commonplace as face-
to-face teams. Virtual teams are increasingly possible because more of us are em ployed
in knowledge work rather than physical production. Furthermore, information technologies
make it easier to communicate instantaneously w ith co-workers around the globe. To some
extent, virtual teams have even become “cool.” It is almost a badge of honour to say that you
are a member of a far-flung team of people from several continents.
But whether they are stylish or commonplace, virtual teams seem to be increasingly necessary
for an organization’s competitive advantage. This chapter points out that we need virtual teams to
effectively engage in organizational learning. Knowledge has become the currency of organizational
success, and globalization has ensured that such knowledge is scattered around the world. In
short, organizations are at a disadvantage unless they make good use of virtual teams.
How could anyone claim that virtual teams aren’t worth the effort, particularly when orga-
nizational learn ing is one of the four pillars of organizational effectiveness (see Chapter 1)?
Well, actually, there are a few arguments against them. For the most part, critics don’t deny
the potential value of sharing knowledge through virtual teams. Rather, they have added up
the negative features and concluded that they outweigh the benefits. In fact, when ch ief infor-
mation officers were asked to identify the top challenges of globalization, 70 percent listed
managing virtual teams as the top concern (see OB by th e Num bers later in this section).101
One persistent problem with virtual teams is that they lack the richness offace-to·-face com-
munication. We’ll provide more detail about this important matter in Chapter 9, but the vital
takeaway is that no information technology to date has facilitated the volume and variety of
information transmitted among people located in the same room. This is one reason Toyota,
PSA Peugeot Citroen, and other companies arrange for teams to meet in the same physical
space. They can exchange information in larger volumes. much faster, and more accurately,
compared with the clumsy methods currently available to virtual teams. Mu ltiperson video
chat is getting more like face-to-face discussion, but it requires considerable band width and
still falls short on communication richness.
Another problem with virtual teams is that people trust others more easily when they are
nearby.102 Various stud ies have reported that virtual team members either have lower trust
compared with co-located team members, or their trust is much more frag ile. In fact, experts
offer one main recommendation to increase trust among virtual team members-have them
spend time together as co-located teams.
A third drawback with virtual teams is that the farther away people are located, the more they
differ in experiences, beliefs, culture, and expectations. These differences can be advantageous
for some decisions, of cou rse, but they can also be a curse for team development and perfor-
mance. ” Everyone must have the same picture of what success looks like,” advises Rick Maurer.
a North American leadership consultant. “Without that laser-like focus, it is too easy for people in
Bangalore to develop a different picture of success than the picture held by their colleagues in
Brussels. Now multiply that by a couple more locations and you’ve got a mess.”103
Here’s one more reason why companies should think twice before relying on virtual teams:
People seem to have less influence or control over distant than over co-located co-workers.
A team member who stops by your cubicle to ask how your part of the report is coming along
has much more effect than an impersonal-or even a flam ing-email from afar.
Perhaps that is why surveys reveal less satisfaction with virtual team members than co-
located team members.104 One study reported that distant colleagues received two to three
times as many complaints as co-located colleagues about working half-heartedly (or not at all)
on shared projects, falling behind on projects, not making deadlines, failing to warn about
missing deadlines, making changes without warn ing, and providing misleading information.
When asked how long it takes to resolve these problems, more than half of th e respondents
indicated a few days for co-located team members, whereas most estimated a few weeks or
longer for d istant team members.

Chapter Eight Team Dynamics 237
Virtual teams have become commonplace in most organizations. 1\vo-thirds of human resource
managers estimate that reliance on virtual teams w ill grow rapidly over the next few years. 105 In global
companies such a~ IBM, almost everyone in knowledge work is part of a virtual team. One reason vir-
tual teams have become so widespread is that information technologies have made it easier than ever
before to communicate and coordinate w ith people at a distance.106 The shift from production-based
to knowledge-based work is a second reason why virtual teamwork is fea~ible. It isn’t yet possible to
make a physical product when team members are located apart, but most of us are now in jobs that
mainly process knowledge.
Information technologies and knowledge-based work make vir tual teams possible, but organiza-
tional learning and globalization are two reasons why they are increasingly necessary. In Chapter I, we
learned that organizational learning is one of four perspectives of organizational effectiveness. Virtual
teams represent a natural part of the organizational learning process because they encourage employees
to share and use knowledge where geography limits more direct forms of collaboration. G lobalization
makes virtual teams increasingly necessary because employees are spread around the planet rather
than around one building or city. Thus, global businesses depend on vir tual teamwork to leverage the
potential of their employees .
• by the NUMBERS
More Virtual Teams, More Virtual Challenges 107
of managers polled in
large North American
companies say that
their firm’s reliance on
virtual teams w ill grow
in importance over the
next three years.
of North American chief
information officers
polled of indicate t hat
managing virtual teams is a
very important globalization
challenge (highest rated
issue on the I ist).
of managers say t hat it is somewhat
or very important that all members
of their department work from the
same location.
SUCCESS FACTORS FOR VIRTUAL TEAMS
Virtual teams face all the challenges of traditional teams, as well as the issues arising from time and
distance. These chal lenges increase with the team’s virtuality, particularly when it exists for only a
short time. 108 Fortunately, OB research has identified the following strategies to minimize most virtual
team problems. 109 First, virtual team members require more than the team competencies described
earl ier in this chapter. They also require good communication technology skills, strong self-leadership
skills to motivate and guide their behaviour without peers or bosses nearby, and higher emotional
intelligence so that they can decipher the feelings of other team members from email and other limited
communication media.
Second, virtual teams should have a toolkit of communication channels (email, vir tual whiteboards,
video conferencing, etc.) as well a~ the freedom to choose the channels that work best for them. This
may sound obvious, but unfortunately senior management tends to impose technology on virtual teams,
often based on advice from external consultants, and expects team members to use the same commu-
nication technology throughout their work. In contrast, research suggests that communication channels
gain and Jose importance over time, depending on the task and level of trust.

238 Part Three Team Processes
Third, virtual teams need plenty of structure. In one recent review of effective virtual teams, many
of the princ iples for successful virtual teams related mostly to creating these structures, such as clear
operational objectives, documented work processes, and agreed upon roles and responsibilities. 110
The final recommendation is that virtual-team members should meet face- to-face fairly early in the
team development process. This idea may seem contradictory to the entire notion of virtual teams,
but so far, no technology has replaced face-to-face interaction for high-level bonding and mutual
understanding. 11 1
Team Decision Making
Self-directed teams, virtual teams, and practically all other groups are expected to make
decisions. Under certain conditions, teams are more effective than individuals at identi-
fy ing problems, choosing alternatives, and evaluating their decisions. To leverage these
benefits, however, we first need to understand the constraints on effective team decision making. Then,
we look at specific team structures that try to overcome these constraints.
CONSTRAINTS ON TEAM DECISION MAKING
Anyone who has spent enough time in the workplace can recite several ways in which teams stumble
in decision making. The five most common problems are time constraints, evaluation apprehension,
pressure to conform, overconfidence and information sharing.
Time Constraints A time-related constraint in most team structures is that only one person can
speak at a time.112 This problem, known as p r oduction blocking, undermines idea generation in a few
ways. First, team members need to listen in on the conversation to fi nd an opportune time to speak up,
but this monitoring makes it difficult for them to concentrate on their own ideas. Second, ideas are
fleeting, so the longer they wait to speak up, the more likely their flickering ideas w ill die out. Third,
team members might remember their fleeting thoughts by concentrating on them, but this causes them
to pay Jess attention to the conversation. By ignoring what others are saying, team members miss other
potentially good idea~.
Evaluation Apprehension Team members are often reluctant to mention idea~ that may seem
silly because they believe (often correctly) that other team members are silently evaluating them. 11 3 This
evaluation a pprehension is based on the individual ‘s desire to create a favourab le self-presentation and
need to protect self-esteem. It is most common when meetings are attended by people with different
levels of status or expertise or when members formally evaluate each other’s performance throughout the
year (as in 360-degree feedback). Creative ideas often sound bizarre or illogical when first presented, so
evaluation apprehension tend~ to discourage employees from mentioning them in front of co-workers.
Pressure to Conform Team cohesion leads employees to conform to the team’s norms. This
control keeps the group organized around common goals, but it may also cause team members to sup-
press their dissenting opinions, particularly when a strong team norm is related to the issue. When
someone does state a point of view that violates the majority opinion, other members might punish the
violator or try to persuade him or her that the opinion is incorrect. Conformity can also be subtle. To
some extent, we depend on the opinions that others hold to validate our own views. If co-workers don’t
agree with us, we begin to question our own opinions even without overt peer pressure.
Overconfidence (Inflated Team Efficacy) Earlier in the chapter we described team efficacy
and stated that in most sin1ations it is better for a team to have higher rather than low levels. When mak-
ing an important decision, however, teams sometimes become overconfident and develop a false sense
of invulnerability. 114 In other words, the team ‘s efficacy far exceeds reality regarding its competencies
and the favourableness of the situation. Overconfident teams are Jess vigilant when making decisions,

Chapte r Eight Team Dynamics 239
partly because they have more positive than negative emotions and moods during these events. They
also engage in Jess discussion (task conflict) and are Jess likely to seek out or accept information
located outside the team, both of which undermine the quality of team decisions.
Why do teams become overconfid ent? The main reason is a track record of past successes combined
with the perception that success is caused by team capabi lity rather than chance. The strategies for suc-
cess going forward may be different than the strategies that Jed to success in the pa~t. and overconfident
teams are more likely to persist with obsolete strategies. Team efficacy is further inflated by the mutu-
ally reinforcing beliefs of the team. We develop a clearly and higher opinion of the team when other
team members echo that opinion.
Information Sharing Problem Teams have the potential to make better decisions than indi-
viduals because they have access to more diverse information, knowledge, and perspectives. Mem-
bers who possess unique information should contri bute that information to assist the group in making
a superior choice, right? In practice, this doesn’t generally work. Research shows that information
already he ld by a majority of group members before team discussion holds greater weight in deter-
mining a fina l choice than does information held by a minority of members, regardless of the validity
of the information. 115 In other words, the importance of a given fact does not determine whether that
fac t contributes to a group’s dec ision as much as the number of members aware of that fact prior to
the meeting.
IMPROVING CREATIVE DECISION MAKING IN TEAMS
Team decision making is fraught with problems, but several solutions also emerge from these bad-
news studies. Team members need to be confident in their decision making but not so confident that
they collectively feel invul nerable. This calls for team norms that encourage cr itical thinking as well
as team membership with sufficient diversity. Checks and balances need to be in place to prevent one
or two people from dominating the discussion. The team should also be large e nough to possess the
collective knowledge to resolve the problem yet small enough that the team doesn’t consume too much
time or restrict individual input.
Along with these general recommendations, OB studies have identified five team structures that
encourage creativity in a team setting: brainstorming, brainwriting, electronic brainstorming, nominal
group technique, and allocation of roles. These structures emphasize idea creation (the central focus of
creativity), but some also include team selection of alternatives.
Brainstorming Brainstorming is a team event where participants try to think up as many idea~ as
possible. The process was introduced by advertising executive Alex Osborn in 1939 and has four simple
rules to maximize the number and quality of ideas presented: ( I) Speak freely-describe even the crazi-
est idea~; (2) don’ t criticize others or their ideas; (3) provide as many ideas a~ possible-the quality of
ideas increa~es w ith the quantity of ideas; and (4) build on the idea~ that others have presented. These
rules are supposed to encourage divergent thinking while minimizing evaluation apprehension and
other team dynamics problems.11 6
Numerous Jab sn1dies have concluded that brainstorming doesn’ t produce a~ many ideas as indi-
viduals working alone. Production blocking and evaluation apprehension are identified as the main
culprits. 117 These findings are perplexi ng because some of the most successful creative agencies and
design firms say that brainstorming is a helpful tool. 118 The leaders of these companies might be mis-
taken, but a more likely explanation is fou nd in their advice that brainstorming takes considerable skill
and experience w ith a trained facilitator in a collaborative learning orientation culture. These condi-
tions are missing from most Jab studies, which are short-term events with inexperienced undergraduate
students who barely know each other. Also, brainstorming sessions are intended to produce creative
ideas, whereas Jab studies tend to measure the number of ideas. 119
Brainstorming likely improves team creativity, but it does have limitations. First, even w ith people who
are trained and experienced, brainstorming suffers from production blocking. Great ideas are forgotten

240 Part Three Team Processes
while team members listen to each other’s ideas, and sparks of insight are forfeited if team members
do not listen to each other’s idea~. A second problem, called fixation or conformity effect, is that
hearing another person’s ideas tends to restrict the variety of ideas that we subsequently think about.
In brainstorming, participants are asked to openly describe their idea~. but the firs t few verbal descrip-
tions might cause participants to limit their thinking to ideas similar to those first suggestions rather
than other categories of ideas. However, neuroscience sntdies report that people think more creatively
when exposed to moderately creative (but not wildly nonsensical) ideas generated by other people. 120
Brainwriting Brainwriting is a variation of brainstorming that minimizes the problem of produc-
tion blocking by removing conversation during idea generation. 12 1 There are many forms of brainwrit-
ing, but they all have the common feature that individuals write down their idea~ rather than verbal ly
describe them. In one version, participants write their ideas on cards and place them in the centre of
the table. At any time, participants can pick up one or more cards from the centre to spark their think-
ing or further bui ld (piggyback) on those ideas. In another variation, each person writes one idea on
a card, then passes the card to the person on their right. The receiving person writes a new idea on a
second card, both cards are sent to the next person, and the process is repeated. The limited research on
brainwriting suggests that it produces more and better qual ity ideas than brainstorming due to the lack
of production blocking.
Electronic Brainstorming Electronic brains torming is similar to brainwriting but uses com-
puter technology rather than handwritten cards to document and share ideas. After receiving the ques-
tion or issue, participants enter their ideas using spec ial computer software. The ideas are distributed
anonymously to other participants, who are encouraged to piggyback on those ideas. Team members
eventually vote electronically on the idea~ presented. Face-to-face discussion usually fo llows. Elec-
tronic brainstorming can be quite effective at generating creative ideas w ith minimal production block-
ing, evaluation apprehension, or conformity problems. 122 It can be superior to brainwriting because
idea~ are generated anonymously and they are viewed by other participants more easily. Despite these
numerous advantages, electronic brainstorming tends to be too structured and technology-bound.
Nominal Group Technique Nominal group technique is another variation of brainwriti ng
that adds a verbal element to the process. 123 The activity is called “nominal” because participants are
a group in name only during two of the three steps. After the problem is described, team members
silently and independently write down as many solutions as they can. In the second stage, participants
describe their solutions to the other team members, usually in a round robin format. As w ith brain-
storming, there is no criticism or debate, although members are encouraged to a~k for clarification
of the ideas presented. In the third stage, participants silently and independently rank-order or vote
on each proposed solution. Nominal group technique has been applied in numerous laboratory and
real-world settings, such as identify ing ways to improve tourism in various countries. 124 This method
tends to generate a higher number of ideas and better-quality idea~ than do traditional interacting and
possibly brainstorming groups. 125 However, production blocking and evaluation apprehension still
occur to some extent. Training improves this structured approach to team decision making. 126
Assign Team Roles Earlier in the chapter we described some different roles team members can
adopt while working together. These roles are especially important when making decisions because they
help overcome some of the constraints described above. For example, when one team member agrees
to take on the role of Chal/enget; they assume responsibility for things like poking holes in assumptions
and critiquing solutions. Another team member, adopting the role of Innovator, might focus the group
on generating multiple alternatives, inquir ing about unique information, and encouraging productive dis-
sent. Temporarily adopting roles can free people from the scourge of conformity and evaluation appre-
hension, but it is important to point out that role adoption shouldn’t be permanent. Switching roles from
meeting to meeting is a good way to overcome stereotyping and keep the team focused on the process.

Chapter Eight Team Dynamics
Chapter Summary
L01 Explain why employees join informal groups and discuss the benefits a n d limitations
of teams.
2 4 1
Teams are groups of two or more people who interact and influence each other, are mutually
accountable for achieving common goals associated with organizational objectives, and perceive themselves as a
social entity within an organization. All teams are groups, because they consist of people with a unifying relation-
ship; not all groups are teams, because some groups do not exist to serve organizational objectives.
People join informal groups (and are motivated to be on formal tean1s) for four rea~ons: ( I) They have an innate
drive to bond, (2) group membership is an inherent ingredient in a person’s self-concept, (3) some personal goals
are accomplished better in groups, and (4) individuals are comforted in stressful situations by the mere presence of
other people. Tean1s have become popular because they tend to make better decisions, support the knowledge
management process, and provide superior customer service. Teams are not always as effective as individuals
working alone. Process losses and social loafing drag down tean1 performance.
L02 Outline the team effectiveness model a n d discuss h ow task characteristics, team size, and
team composition influence team effectiveness .
Team effectiveness includes the team’s ability to achieve its objectives, fulfil d1e needs of its mem-
bers, and maintain its survival. The model of team effectiveness considers the team and organizational environ-
ment, team design, and team processes. Three tean1 design e lements are task characteristics, team size, and team
composition. Tean1s tend to be better suited for s ituations in which the work is complex yet tasks are well struc-
tured and have high task interdependence. Teams s hould be large enough to perform the work yet s mall enough for
efficient coordination and meaningful involvement. Effective tean1s are composed of people with the competen-
c ies and motivation to perform tasks in a team environment. Team member diversity has advantages and disadvan-
tages for team performance.
L03 Discuss bow shared percep tions among team members, called team states, emerge and
influence team effectiven ess.
Team states represent motivational or cognitive characteristics of the tean1 that continuously evolve
and which tend to be shared between tean1 members. Exan1ples include tean1 norms, cohesion, tean1 efficacy, and
trust. Each of these e lements influences team performance, but can also be changed by feedback about team per-
formance. For example, a tean1 that receives negative performance feedback might experience a drop in both cohe-
s ion and team efficacy.
L04 Discuss bow team processes, su ch as taskwork, teamwork, team boundary spanning, a n d
team developm en t determine team effectiven ess.
As teams work together they can foc us on elements of the task (referred to as taskwork) or ele-
ments of the team’s internal dynamics or relationships (called teamwork behaviour). Together, these processes
determine how well the team manages its internal environment. On the other hand, teams also face opportuni-
ties to interact and build relationships with people or groups in the external environment. These processes are
called boundary spanning. In addition, teams develop through the stages of form ing, storming, norming, per-
form ing, and eventually adjourn ing. Within these stages are two distinct team development processes: develop-
ing team identity, and developing tean1 mental models and coordinating routines. Team development can be
accelerated through team building-any formal activity intended to improve the development and function ing
of a work team.
LOS Discuss the characteristics and factors required for th e su ccess of self-directed teams and
virtual teams.
Self-direc ted tean1s (SOTs) complete an entire piece of work requiring several interdependent tasks,
and they have substantial autonomy over the execution of their tasks. Members of virtual teams operate across
space, time, and organizational boundaries and are linked through information technologies to achieve organiza-
tional tasks. Virtual teams are more effective when the team members have certain competencies, the team has the
freedom to choose the preferred communication channels, and the members meet face-to-face fairly early in the
team development process.

2 4 2 Part Three Team Processes
LOG Id entify four const raints on team d ecision making a n d discuss th e advantages and disadvan-
tages of fou r s tructur es aimed at improving team d ecision making.
Team decisions are impeded by time constraints, evaluation apprehension, conformity to peer pres-
sure, and overconfidence. Four structures potentially improve decision making in team settings: brainstorming,
brainwriting, electronic brainstorming, and nominal group technique.
Key Terms
brainstor m ing
brainwriting
Brooks’s Jaw
electronic brainstor m ing
evaluation app rehens ion
nom inal grou p technique
nornts
process losses
production blocking
role
self-directed teams (SOTs)
social loafing
tas k interd ependen ce
tas kwork beh aviour
team boundary spanning
team building
team cohes ion
team efficacy
teams
teamwork behaviour
virtual teams
Critical Thinking Questions
I. Infor mal groups exist in almost every fo rm of social organization. What types o f informal groups exist in your
classroom? Why are students motivated to belong to these informal groups?
2. The late management guru Peter Drucker once said: “The now-fas hionable team in which everybody works
with everybody on everything fro m the beginning rapidly is becoming a disappointment.” Discuss three prob-
lems associated with teams.
3. You have been put in charge of a cross-functional task force that will develop enhanced Internet banking
services for retai l customers. The tean1 includes representatives from marketing, information services, cus-
to mer service, and accounting, all of whom wi ll move to the san1e location at headquarters for three months.
Describe the behaviours you might observe during each stage of the team ‘s development.
4. You have just been transferred fro m the Montreal office to the Vancouver office of your company, a national
sales organ ization o f electrical products for developers and contractors. In Montreal, team members regularly
called customers after a sale to ask whether the products arrived on time and whether they are satisfied. But
when you move to the Vancouver office, no one seems to make these follow-up calls. A recently hired co-
worker explains that other co-workers d iscouraged her from making those calls. Later, another co-worker sug-
gests that your fo llow-up calls are making everyone else look lazy. Give three possible reasons why the norms
in Vancouver might be different from those in the Montreal office, even though the custo mers, products, sales
commissions, and other characteristics of the workplace are almost identical.
5. A software engineer in Canada needs to coordinate with four tean1 members in geographically dispersed areas of
the world . What tean1 challenges might the team experience and how will they affect the team design element~?
6. You have been assigned to a class project with five other student~. none of whom you have met before, and
some of whom come from different countr ies. To what extent would team cohesion improve your team’s per-
fo rmance on this project? What actions would you recommend to build team cohesion among student team
members in this situation?
S uppose that you were put in charge of a virtual tean1 whose members are located in different cities around
the world. What tactics could you use to build and maintain team trust and performance, as well as minimize
the decline in trust and performance that often occurs in tean1s?
You are responsible for convening a major event in which senior offic ials fro m several state governments
will try to come to an agreement on environmental issues. It is well known that some officials posture so that
they appear superior, whereas others are highly motivated to solve the environmental problems that cross
adjacent states. What tean1 decision-making problems are likely to be apparent in this government forum, and
what actions can you take to minimize these problems?

Chapter Eig ht Team Dynamics 2 4 3
The chie f marketing officer of Sawgrass Widgets wants marketing and sales staff to identify new uses for
its products. Which of the four team structures for creative decision making would you recommend? Describe
and justify this process to Sawgrass’s chief marketing officer.
Case Study:
ARBRECORP LTEE
by Steven L. McS han e, Curtin University (Australia ) and University of Victo r ia (Canada ), and David Lebeter
ArbreCorp Ltee is a sawmill o peration in Quebec that is owned by a maj or forest products company but operates
independently of the parent company. It was built 30 years ago, and completely updated with new machinery five
years ago. ArbreCorp receives raw Jogs fro m the area for cutting and planing into bui lding-grade lumber, mostly
two-by-four and two-by-six pieces of standard leng ths. Higher grade Jogs leave ArbreCorp’s sawmill depart ment
in finished form and are sent directly to the packaging depart ment. T he remaining 40 percent of sawmill o utput are
cuts from lower grade logs, requir ing furt her work by the plan ing department.
ArbreCorp has o ne general manager, 16 supervisors and support staff, and 180 unionized employees. The union-
ized employees are paid an hourly rate specified in the collective agreeme nt, wherea~ management and support staff
are paid a monthly salary. T he mill is divided into six operating departments: boom, sawmill, planer, packaging,
shipping, and maintenance. T he sawmill, boom, and packaging departments o perate a morning shift starting at
6:00 a.m. and an afternoon shift starting at 2:00 p.m. Employees in these departments rotate shifts every two
weeks. The planer and shipping departments operate only morning shifts. Maintenance e mployees work the night
shift (starting at 10:00 p.m.).
Each department, except for packaging, ha~ a supervisor on every work shift. The planer supervisor is respon-
s ible for the packaging department on the morning shift, and the sawmill supervisor is responsible fo r t11e packaging
department o n the afternoon shift. However, the packaging operation is housed in a separate building from the
other depart ments, so supervisors seldom vis it the packaging department. This is particularly true for the after-
noon shift, because the sawmill supervisor is the furthest distance from the packaging building.
PACKAGING QUALITY
Ninety percent of ArbreCorp’s product is sold on the international market through Boismarche Ltee, a large mar-
keting agency. Boismarche represents all forest products mi lls owned by ArbreCorp ‘s parent company a~ well
as several o ther clients in the region. T he market fo r building-grade lum ber is very price competitive, because
there are numerous mills selling a relatively undifferentiated product. However, some diffe rentiation does occur in
product packaging and presentation. Buyers will look closely at the packaging when deciding whether to buy fro m
ArbreCorp or another mi ll.
To encourage its clients to package their product~ better, Boismarche s ponsors a mo nthly package quality
award. T he marketing agency sam ples and rates it~ clients’ packages dai ly, and the sawmill with the highest score
at the end of the mo nth is awarded a framed certificate of excellence. Package quality is a combination of how the
lumber is piled (e.g., defects turned in), where the bands and d unnage are placed, how neatly the s tencil and seal
are applied, the stenci l’s accuracy, and how neatly and tightly the plastic wrap is attached .
ArbreCorp has won Boismarche’s packaging quality award several times over the pa~t five years and received
high ratings in the months that it didn’t win. However, the mill’s ratings have started to decline over the pa~t year
or two, and several clients have complained about the appearance of the finished product. A few large customers
switched to competitors’ lumber, saying that the decision was based o n t11e s ubstandard appearance of ArbreCorp’s
packaging when it arrived in their lum beryard.
BOTILENECK IN PACKAGING
The planer and sawmilling department~ have significantly increased productivity over the pa~t couple of years.
The sawmill o peration recently set a new productivity record on a s ingle day. The planer operation has increased
productivity to the point where last year it reduced operations to just one (rather than two) shifts per day. T hese
productivity im provements are due to better operator training, fewe r machine breakdowns, and better selection of
raw Jogs. (Sawmill cuts fro m high-q uality Jogs usually do not require planing work.)
Productivity levels in the boom, shipping, and maintenance departments have remained constant. However,
the packaging department has recorded decreasing productivity over the past couple of years, with the result that
a large backlog of finished product is typically stockpi led o utside the packaging building. T he morning shift of
the packaging department is unable to keep up with the combined production of the sawmill and planer depart-
ments, so the unpackaged o utput is left for the afternoon shift. Unfortunately, the afternoon shift packages even

244 Part Three Team Processes
less product than the morning shift, so the backlog continues to build . The backlog adds to ArbreCorp’s inventory
costs and increases the risk of damaged stock .
ArbreCorp has added Saturday overtime shifts as well as extra hours before and after the regular shifts for
the packaging department employees to process this backlog. La~t month, the packaging department e mployed
10 percent of the workforce but accounted for 85 percent of the overtime. This is fr ustrating to Ar breCorp’s
management, because time and motion studies recently confirmed that the packaging department is capable of
processing all of the daily sawmill and planer production without overtime. With employees earning one and a half
times or double their regular pay on overtime, ArbreCorp’s cost competitiveness suffers.
Employees and supervisors at ArbreCorp are aware that people in the packaging department tend to extend
lunch by 10 minutes and coffee breaks by five minutes. T hey also typical ly leave work a few minutes before the end
of a shift. T his abuse has worsened recently, particularly on the afternoon shift. E mployees who are temporarily
assigned to the packaging department also seem to participate in this time Joss pattern after a few days. Although
they are punctual and productive in other departments, these temporary employees soon adopt the packaging
crew’s informal schedule when assigned to that department.
Discussion Questions
I. What symptom(s) in this case suggest that something has gone wrong?
2. What are the main causes of these symptoms?
3. What actions should executives take to correct these problems?
©Copyright. 1995 Steven L McShane and David Lebeter. This case is based on actual evenL~. but names and some characteris·
tics have been changed to maintain anonymity.
Tea m Exercise:
TEAM TOWER POWER
Purpose This exercise is designed to help you understand tean1 roles, team development, and other issues in
the development and maintenance of effective teams.
Materials The instructor will provide e nough LEGO”‘ pieces or similar materials for each tean1 to complete
the assigned task. All teams should have identical (or very s imilar) amounts and types of pieces. The instructor
will need a measuring tape and stopwatch. Students may use writing materials during the design stage (see
Instructions). T he instructor will distribute a “Team Obj ectives Sheet” and “Tower Specifications Effectiveness
Sheet” to all tean1s .
Instructions The instructor will divide the class into teams. Depending on class size and space availabil ity,
teams may have between four and seven members, but all should be approximately equal size.
Each team has 20 minutes to design a tower that uses only the materials provided, is freestanding, and provides
an optimal return on investment. Team members may wish to draw their tower on paper or a flip chart to facilitate
the tower’s design . Tean1s are free to practise building their tower during this stage. Preferably, each team will have
a secluded space so that the design can be created private ly. Dur ing this stage, each tean1 wi ll complete the Team
Obj ectives Sheet distributed by the instructor. This sheet requires the Tower Specifications Effectiveness Sheet,
also distributed by the instructor.
Each tean1 will show the instructor that it has completed its Tean1 Objectives S heet. T hen, w ith all teams in
the same room, the instructor will announce the start of the construction phase. The time allowed for construction
will be closely monitored, and the instructor w ill occasionally call out the time elapsed (particularly if there is no
clock in the room).
Each team will advise the instructor as soon as it has completed its tower. The team will write down the time
e lapsed, as determined by the instructor. T he tean1 also may be a~ked to assist the instructor by counting the num-
ber o f blocks used and measuring the height of the tower. T his in formation gets added to the Tean1 Objectives
Sheet. Then the team calculates its profit.
Af ter presenting the results, the class will discuss the team dynamics elements that contr ibute to team e ffec-
tiveness. Tean1 members will discuss their strategy, division of labour (team roles), expertise within the team, and
other elements of team dynamics.
Source: Sever.tl published and online sources describe variations of this exercise, but there is no known origin to this activity.

Chapter Eig ht Team Dynamics 245
Self-Assessments for Chapter 8
SELF-ASSESSMENT NAME
What team roles do you prefer?
Are you a team player?
How trusting are you?
DESCRIPTION
A ll teams depend on their members to fill various roles. Some
roles area assigned through formal j obs. but many team roles are
distributed informally. Informal roles are often claimed by team
members \.\ilose personality and values are compatible with those
roles. This assessment identifies the types of roles you prefer in
team meetings and activities.
Some people would like to wo rk in teams fo r almost every aspect
of their V.’Ork. whereas other people would like to keep as far away
from teams as possible. Most of u.s fal1 somewhere in between. This
se(f .. asse.~sment estimates how much yo u e njoy working in teams.
Some people have a tendency to trus t others. even if they have
neve r met them before, whereas others take a long time to develo p
a comfortable level of trust. This propensity to trust is d ue to each
individual’s personality. values. and socialization experiences. This
self·asse.~sment evaluates your general propensity to trust others.

CHAPTER 9
Communicating in Organizations
LEARNING OB JEC T IVES
After reading this chapter, you should be able to:
LO 1 Explain why commun icat ion is important in organ izations and d iscuss four influences on effective
communication encoding and decoding.
L02 Compare and cont rast t he advantages of and p roblems w ith e lectronic ma il, ot her verbal
communication media, and nonverba l commun icat ion.
L03 Explain how social acceptance and med ia richness influence the p refe rred communication channel.
L04 Discuss various ba rriers (noise) to effect ive communication, incl uding cross-cultural and
gender-based differences in communication.
LOS Explain how to get your message across more effectively, and summarize the elements of active
listening.
L06 Summarize effective communication strategies in organ izational hierarch ies, and review the role and
re levance of t he o rganizationa l grapevine.
246

Chapter Nine Communicating in Organizations 247
OuickContractors.com is a Guelph, Ontario-based company that connects retailers with contractors
willing to deliver and assemble products for their customers. In 2016 they were in the midd le of
a sign ificant growth spurt. The company had expanded from a small upstart and had dozens of
employees, a database of 1500 contractors and such industry giants as Lowe’s, Home Depot, and
Canadian Tire as clients. From 2009 to 2014, sales increased by 4,184 percent.
This rapid success created logistical problems, especially on the communications side. “We
had enquiries coming in from our contractors and our retailers, and we had information com ing in
from Twitter, Facebook, and lnstagram,” explains Trevor Bouchard, the company’s president and
CEO. “Our business has a multitude of touch points-we have a software component; we have to
coordinate contractors; we have invoices and accounting-and we were trying to reconcile all of
that with different systems.” With various types of messages coming in from different platforms
(phone, email, social media posts, live chats), it was becoming increasingly difficult to keep track
of who was saying what and to whom. “We had people answering live chats while answering the
phones,” Bouchard recalls. “It wasn’t an effective way to handle our communications. That’s when I
realized, ‘OK, we need to start unifying these different channels into one.'”
Bouchard had heard about un ified communications (UC), and he was intrigued. The more
he learned, the more curious he became. Unified communications refers to the integration of
workplace communication tools, such as a platform that integrates instant messag ing and file
sharing. Many UC platforms provide a single interface that can be used across multiple devices to
receive and share information. After Googling UC implementations and asking around at industry
events, Bouchard had plenty of information but no clear idea about how to proceed. So he put
some thought into what would make UC successfu l at his business. Given the volume and variety
of employees who would be using a UC platform at OuickContractors.com, he realized it was
paramount to choose an option with an intuitive interface. “I thought if I could figure it out-and
I don’t have formal technical training-it would be fairly intuitive for the rest of our staff, the ones
actually using it.” 1
A s the QuickContractors.com example demonstrates, modern organizations sometimes struggle to manage and use technol ogy. When Facebook and other social medi a sites gained popularity,
many businesses blocked employee access and banned their use, claimi ng social media encouraged
time wasting and became portals for distri buting i ntellectual property. Thi s perspective has rapidly and
dramatically changed. Currently, many companies are adopting social media as a cornerstone of their
communication strategy and seek to capital i ze on the fact that their employees tweet, blog, comment,
post, pin, snap, and stream. Businesses have begun to recognize that internal communicati ons to pro-
mote their brands within the company are as important as external marketing because empl oyees who
network and share can be the l inchpi n to the success of a brand carnpai gn.2 Businesses have di scovered
that new social media channels offer signi ficant potential for i nformation shari ng and social bondi ng,
and that the workforce increasingly uses and expects their organizati ons to provide these communica-
ti on channels. In fact, the populari ty of Facebook’s recently l aunched “Workplace”-a mobile and
web application for companies to keep employees connected using the original Facebook pl atform
and features-may ecli pse the use of email in certain i ndustries. Despite the vast array of social media
and technol ogical devel opments, we may still be at the beginning of this revol ution. Each new method
of social interaction creates fasci nating changes i n how people communicate with each other in the
workplace.
Comm unication refers to the process by whi ch information is transmi tted and understood between
two or more people. We emphasize the word “understood” because transmi tting the sender’s intended
meaning is the essence of good communicati on. This chapter begins by di scussing the importance
of effective communi cation, outl i ni ng the communi cation process model , and discussing factors that
improve communi cati on coding and decoding. Next, we identify types of communication channels,
incl uding emai l and social medi a sites, followed by factors to consider when choosing a communica-
tion medi um. T his chapter then identifies barriers to effecti ve communication. The l atter part of thi s
chapter offers an overview of ways to communi cate in organizati onal hierarchies and offers insight
about the pervasive organizati onal grapevine.

2 4 8 Part Three Team Processes
The Importance of Communication
Effective communication is vital to all organizations, so much so that no company could
exist without it. The reason? Recal l from Chapter I that organizations are defined as
groups of people who work interdependently toward some purpose. People work interde-
pendently only when they can communicate with each other. Although organizations rely on a variety
of coordinating mechanisms (which we discuss in Chapter 13), frequent, timely, and accurate commu-
nication remains the primary means through which employees and work units effectively synchronize
their work.3 Chester Barnard, a telecommunications CEO and a respected pioneer in organizational
behaviour theory, made this observation back in 1938: “An organization comes into being when there
are persons able to communicate with each other.”4
In addition to coordination, communication plays a central role in organizational learning. It is the
means through which knowledge enters the organization and is distributed to employees.s A third func-
tion of communication is decision making. Imagine the chal lenge of making a decision without any
information about the decision context, the alternatives available, the likely outcomes of those options,
or the extent to which the decision is achieving its objectives. All of these ingredients require com-
munication from co-workers as well as from stakeholders in the external environment. For example,
airline cockpit crews make much better decisions-and thereby cause far fewer accidents-when the
captain encourages the crew to openly share information.6
Consider how a new digitized radio communication system launched in Alberta helped police, fire-
figh ters, and emergency medical services during the Fort McMurray wildfire crisis in 20 16. Previ-
ously, each of these first responders had their own separate communication system, making it difficult
for them to coordinate efforts. During the devastating onslaught of the wildfires in Fort McMurray,
one of Canada’s largest natural disasters, emergency personnel used the new Alberta First Responders
Radio Communications System, which allowed over 30 departments in multiple emergency agencies
to speak directly with each other as the city wa~ being evacuated. The new communications system was
credited w ith literally saving Jives because it fac ilitated the different agencies to come together quickly
and effectively.7
A fourth function of communication is to change behaviour. 8 When communicating to others, we
are often trying to alter their beliefs and feelings and, ultimately, their behaviour. T his influence pro-
cess might be passive, such as by merely describing the situation more clearly and fully, or it might be
a deliberate attempt to change someone’s thoughts and actions. We discuss the topic of persuasion later
in this chapter, and further in Chapter 10.
Fifth , communication supports employee well-being.9 Informationally, commun ication con-
veys knowledge that helps employees to better manage their work environment. For instance,
research shows that new employees adjust much better to the organization when co-workers com-
mun icate subtle nuggets of wisdom, such as how to avoid office polit ics, complete work proce-
dures correctly, f ind useful resources, handle d ifficul t customers, and so on. 10 Emotionally, the
communication experience itself is a soothing balm. Indeed, people are less susceptible to colds,
cardiovascular d isease, and other physical and mental illnesses when they have regular social
interaction . 11 In essence, people have an inherent drive to bond, to validate their self-worth, and to
maintain their soc ial identity. Commun ication is the means through which these drives and needs
are fu lfilled.
Finally, reflect on the follow ing question: Does the manner in which we speak influence our suc-
cess? Research does, in fact, provide substantial support for the link between speech styles and subse-
quent status attainment. When we say speech styles, we mean things like hesitation (e.g., “well,” “urn”),
hedges (e.g., “kinda,” “sort of’), disclaimers (e.g., “This may be a bad idea, but .. . “), and formal
addresses (e.g., “No, sir”). People who speak a~sertively, by avoiding these tentative speech styles, are
judged by observers as more likely to be promoted and supported by superiors. These effects also work
in negotiation-people who use a~sertive speech are judged to be more competent and cooperative by
negotiation counterpart~. 12

Chapter Nine Communicating in Organi zations 2 4 9
A Model of Commun ication
To understand the key interpersonal features of effective communication, Jet’s examine the model pre-
sented in Exhibit 9.1, which provides a useful “conduit” metaphor for thinking about the communica-
tion process. 13 According to this model, communication fl ows through channels between the sender
and receiver. The sender forms a message and encodes it into words, gesn1res, voice intonations, and
other symbols or signs. Next, the encoded message is transmitted to the intended receiver through one
or more communication channels (media). The receiver senses the incoming message and decodes it
into something meaningful. Ideally, the decoded meaning is what the sender had intended.
In most situations, the sender looks for evidence that the other person has received and understood
the transmitted message. This feedback may be a formal acknowledgment, such as “Yes, I know what
you mean,” or indirect evidence from the receiver’s subsequent actions. Notice that feedback repeats
the communication process. Intended feedback is encoded, transmitted, received, and decoded from
the receiver to the sender of the original message. This model recognizes that communication is not a
free-flow ing conduit. Rather, the transmission of meaning from one person to another is hampered by
noise-the psychological, social, and structural barriers that distort and obscure the sender’s intended
message. If any part of the communication process is distorted or broken, the sender and receiver will
not have a common understanding of the message.
INFLUENCES ON EFFECTIVE ENCODING AND DECODING
According to the communication process model, effective communication depends on the ability
of sender and receiver to efficiently and accurately encode and decode information. How well this
encoding-Ciaran Griffin/Photodisc/Getty Images
How politically charged is your school? You can d iscover the level of organizational
politics in your school by locatin g this self-assessment in Connect.

Chapter Ten Power and Influence in the Workplace 299
MINIMIZING ORGANIZATIONAL POLITICS
Researchers have identified several conditions that support organizational politics, so we can identify
corresponding strategies to keep pol itical activities to a minimum.98 First, organizational politics is
triggered by scarce resources in the workplace. When budgets are slashed, people rely on pol itical tac-
tics to safeguard their resources and maintain the status quo. Although it is not easy to maintain or add
resources, sometimes this action may be Jess costly than the consequences of organizational politics.
Second, organizational politics is suppressed when resource allocation decisions are clear and sim-
pl ified. Political tactics are fue lled by ambiguous, complex, or nonexistent formal rules because those
tactics help people get what they want when decisions Jack structural guidelines. Third, organizational
change tends to bring out more organizational pol itics, mainly because change creates ambiguity and
threatens the employee’s power and other valued resources.99 Consequently, leaders need to apply
the organizational change strategies that we describe in Chapter 15, particularly through communication,
learning, and involvement. Research has found that employees who are kept informed of what is going
on in the organization and who are involved in organizational decisions are Jess likely to observe orga-
nizational politics.
Finally, political behaviour is more common in work units and organizations where it is tolerated
and reinforced. Some companies seem to nurture self-serving behaviour through reward systems and
by demonstrating it in the behaviours of organizational leaders. To minimize pol itical norms, the orga-
nization needs to diagnose and alter systems and role modelling that support self-serv ing behaviour.
They should support organizational values that oppose political tactics, such as altruism and customer
focus. One of the most important strategies is for leaders to become role models of organizational citi-
zenship rather than symbols of successful organizational pol iticians.
Personal Characteristics Several personal characteristics affect a person’s motivation to engage
in self-serving behaviour. 100 This includes a strong need for personal as opposed to socialized power.
Those with a need for personal power seek power for its own sake and try to acquire more power. Some
individuals have strong M achiavellian values. Machiavellianism is named after N iccoli:> Machiavelli, the
16th-century Italian philosopher who wrote The Prince, a famous treatise about political behaviour. Peo-
ple with high Machiavellian values are comfortable with getting more than they deserve, and they believe
that deceit is a nantral and acceptable way to achieve this goal. They seldom trust co-workers and tend
to use cruder influence tactics, such as bypassing one’s boss or being assertive, to get their own way. 101
How Machiavellian are you? You ca n discover how much you value the political
tactics emphasized by Machiavelli by locating this self-assessment in Connect.
Chapter Summary
LO 1 Describe the dependence model of power and describe the five sources of power in org~tnizations.
Power is the capacity to influence others. It ex ists when one party perceives that he or she is
dependent on the other for something of value. However, the dependent person must also have
countervailing power-some power over the dominant party—4o maintain the relationship, and
the parties must have some level of trust.
There are five power bases. Legitimate power is an agreement among organizational members that people in
certain roles can request certain behaviours of others. T his power has restrictions represented by the target

300 Part Three Team Processes
person’s zone o f indifference. It also includes the norm of reciprocity (a feeling o f obl igation to help someone
who has helped you) as well as control over the flow of information to others. Reward power is derived from the
abi lity to contro l the allocation of rewards valued by others and to remove negative sanctions . Coercive power
is the abi lity to apply punishment. Expert power is the capacity to influence others by possessing knowledge or
skills that they value. An important for m o f expert power is the (perceived) ability to manage uncertainties in
the business environment. People have referent power when others identify with them, like them, or otherwise
respect them.
L02 Discuss the four contingen cies of power.
Four contingencies determine whether these power bases translate into real power. Individuals
and work units are more powerful when they are non-s ubstitutable , that is, there is a Jack of
alternatives. Employees, work units, and organizations reduce substitutabil ity by controlling
tasks, knowledge, and labour, and by di fferentiating themselves fro m competitors. A second contingency is
central ity. People have more power when they have high central ity, that is, the number of people affec ted is
large and people are quickly affected by their actions . The third contingency, visibility, refers to the idea that
power increases to the extent that a person’s or work unit’s competenc ies are known to others. Discretion, the
fourth contingency of power, refers to the freedo m to exercise judgment. Power increases when people have
freedom to use their power.
L03 Explain h ow people and work units gain power th rough social networks .
Social networks are social structures of individuals or social units (e.g., departments, organiza-
tions) that are connected to each other through one or more fo rms of interdependence. People
receive power in social networks through social capital, which is the goodwi ll and resulting
resources shared an10ng members in a social network. Three main resources from social networks are information,
visibility, and referent power.
Employees gain social capital through their relationship in the social network. Social capital tends to
increase w ith the number o f network ties. Strong ties (close-knit relationships) can also increase social capital
because these connections offer more resources and o ffer the m more quickly. However, having weak ties with
people from diverse networks can be more valuable than having s trong ties w ith people in s imilar networks.
Weak ties provide more resources that we do not already possess. Another influence on social capital is the
person’s centrality in the network. Network centrality is determined in several ways, including the extent to
which you are located between others in the network (betweenness), how many direct ties you have (degree),
and the closeness of these ties. People also gain power by bridging structural holes- linking two or more clus-
ters of people in a network .
L04 Describe eigh t types of influence tactics, three consequences of influ en cing oth ers, a nd
three contingen cies to consid er when choosing an influen ce tactic.
Infl uence refers to any behaviour that attempts to alter someone’s attitudes or behaviour. The most
widely studied infl uence tactics are s ilent authority, assertiveness, infor mation control, coalition
formation, upward appeal , impression management, persuasion, and exchange. “Soft” influence tactics such as
friendly persuasion and s ubtle ingratiation are more acceptable than ” hard” tactics s uch as upward appeal and
assertiveness. However, the most appropriate infl uence tactic also depend~ on the influencer’s power base; whether
the person be ing influenced is higher, lower, or at the same level in the organization; and personal, organizational,
and cultural values regarding influence behaviour.
LOS Id en tify the organ izational conditions and personal ch aracteristics that s up port
organizational politics, as well as ways to minimize organizational politics .
Organizational politics refers to influence tactics that others perceive to be self-serving behaviours
at the expense of others and sometimes contrary to the interests of the organization. It is more
common when an1biguous decisions allocate scarce resources and when the organization tolerates or rewards
political behaviour. Individuals with a high need for personal power and strong Machiavellian values have a higher
propensity to use political tactics. Organizational politics can be minimized by providing clear rules for resource
allocation, establishing a free flow o f information, using education and involvement during organizational change,
supporting team norms and a corporate culture that discourage dysfunctional politics, and having leaders who role
model organizational citizenship rather than pol itical savvy.

Chapter Ten Power and Influence in the Workplace
Key Terms
cent rality
charisma
coalition
countervailing power
impression management
influence
inoculation effect
legitimate power
Machiavellian values
n orm of recip rocity
organization al politics
power
referent power
social capital
social networks
structural hole
substitu tability
u pward appeal
Critical Thinking Questions
301
I. What role does countervai ling power play in the power relationship? Give an example of your own encounter
with countervai ling power at school or work.
2. Until recently, a mining company’s data resided in the department that was responsible for that information.
Property data were on the computers in land administration, hydrocarbon data were in the well administration
group, maps were found in the map department, and so on. The executive team concluded that this arrange-
ment was dysfunctional , so the CEO announced that all infor mation wou ld be placed on a central server
system so it is widely accessible. lf someone needs a colour map, for example, he or she can retrieve it from
the central server without going through the map department. Rather than welcome the change, employees
in several departments complained, offering several arguments why other groups shou ld not have direct
access to their data files. Some departments tried to opt out of the centralized server syste m. Using the model
of sources and contingencies of power, explain why some groups opposed the central server model of data
access.
3. You have just been hired as a brand manager of toothpaste for a large consumer products company. Your job
mainly involves encouraging the advertising and production groups to promote and manufacture your product
more effectively. These department~ aren’t under your direct authority, although company procedures indicate
that they must complete certain tasks requested by brand managers. Descri be the sources of power you can
use to ensure that the advertising and production departments will help you make and sell toothpaste more
effectively.
4. How does social networking increase a person’s power? What social networking strategies could you initiate
now to potentially enhance your future career success?
5. List the eight influence tactics described in this chapter in terms of how they are used by students to influence
their university instructors. Which influence tactic is applied most often? Which is applied least often, in your
opinion? To what extent is each influence tactic considered legitimate behaviour or organizational politics?
6. Consider a situation where there is a s ingle female member in a team of six and she is generally excluded
from informal gatherings of the tean1. What kind of influence tactics can s he use to make up for this
limitation?
7. In the mid-1990s, the CEO of Apple Computer invited the late Steve Jobs (who was not associated with the
company at the time) to serve as a special adviser and raise morale among Apple employees and customers.
While doing this, Jobs spent more time advising the CEO on how to cut costs, redraw the organization chart,
and hire new people. Before long, most of the top people at Apple were Jobs’ colleagues, who began to
systematically evaluate and weed out teams of Apple employees. While publicly supporting Apple’s CEO,
Jobs privately criticized him and, in a show of non-confidence, sold 1.5 million shares of Apple stock he had
received . This action caught the attention of Apple’s board of d irectors, who soon after decided to replace
the CEO w ith Steve Jobs. T he CEO claimed Jobs was a conni ving back-stabber who used political tactics to
get his way. Others suggest that Apple would be out of business today if he hadn’ t taken over the company.
In your opinion, were S teve Jobs’ actions examples of organizational politics? Justify your answer.
8. This book frequently emphasizes that successful companies engage in organizational learning. How do
political tactics interfere with organizational learning objectives?

302 Part Three Team Processes
Case Study:
RESONUS CORPORATION
by S teven L. M cS hane, Curtin University (Australia) and University of Victoria ( Canad a). Based on a n
ear lier cas e writt en by J ohn A. Seeger.
Frank C hoy is normally a quiet person, but his patience has already worn thin by interdepartmental battles. C hoy
joined Resonus Corporation, a hearing aid designer and manufacturer, eight months ago as director of engineer-
ing. Production of the latest product has been delayed by two months and Choy·s engineering services department
(ESD)-which prepares final manufacturing specifications-is taking the heat as the main culprit for these delays.
Similar delays have been occurring at Resonus for the past few years. T he previous engineering director was fired
after 18 months ; the director before him quit af ter about d1e san1e an10unt of time.
Bill Hunt, CEO of Resonus for the past 15 years, responded to these proble ms by urging everyone to remain
c ivil. ‘ ‘I’ m s ure we can resolve these differences if we j ust learn to get along better,” he said, whenever a dispute
broke out. Hunt disliked firing anyone, but felt the previous engineering director was too confrontational. ” I spent
too much time s moothing out argume nts when he was here,” Hunt thought to himsel f soon after Choy was hired .
“Frank (Choy), on the other hand, seems to fi t into our culture o f collegiality.”
Hunt was groomed by the company’s fo under and took great pride in preserving the organization’s family
s pirit. He also discouraged bureaucracy, bel ieving that Resonus operated best through informal relationships
among its managers. Most Resonus executives were similarly info rmal, except Jacqui Blanc, the production
director, who insisted on s tr ict guidelines. Hunt tolerated Blanc’s for mal style because soon after joining Reso-
nus five years ago, she discovered and cleaned up fraudulent activity involving two production managers and a
few suppliers.
The organizational chart shows that Frank Choy oversees two departments: ESD and research. In reality, “Doc”
Kalandry, the research director, informally reports direcdy to the CEO (Hunt) and has never considered the direc-
tor o f engineering as his boss. Hunt actively support~ this informal reporting re lationship because of Doc’s special
status in the organization. “Doc Kalandr y is a living genius,” Hunt told Choy soon after he joined the firm . “With
Doc at the helm of research, this company wi ll continue to lead the field in innovation.” Hunt’s fi rst job at Resonus
was in the research group and Choy suspected that Hunt still favoured that group.
Everyone at Resonus seems to love Doc’s s uccessfu l products, his quirky style, and his over-the-top enthusi-
asm, but some of C hoy’s ESD staf f are also pr ivately concerned. Says one engineer: ” Doc is like a happy puppy
when he gets a new product idea. He delights in the discovery, but also won’t let go of it. He also gets Hunt too
enthusiastic. But Doc’s too optimistic; we’ve had hundred~ of production change orders already this year. If I were
in Frank’s s hoes, I’d put my foot down on all this new development.”
Soon after j oining Resonus, Choy realized that ESD e mployees get most of the blame and little of the credit
fo r their work. When production staff find a design fault, they direcdy contact the research design engineer who
developed the technology rather than the ESD group who prepare the specifications. Research e ngineers willingly
work with production because they don’t want to let go of their project. “The designers seem to fee l they’re losing
something when one of us (ESD) tries to help,” Choy explains.
Meanwhile, production supervisors regularly critique ESD staff whereas they tend to accept explanations fro m
the higher-status research department engineers. ” Production routinely complains about every little specification
error, many of which are due to design changes made by the research group,” says one frustrated ES D technician.
“Many of us have more than 15 years· experience in this work. We shouldn’t have to prove our ability all the time,
but we spend as much time defending ourselves as we do getting the job done.”
C hoy·s latest troubles occurred when Doc excitedly told Hunt about new nano-processor technology that he
wanted to install in the forthcom ing high-end hearing aid product. As with most of Doc’s previous last-minute
revis ions, Hunt endorsed this change and asked C hoy and Blanc (the production director) to s how their commit-
ment, even though production was scheduled to begin in less than three weeks. C hoy wanted to protest, knowing
that his department would have to tackle unexpected incompatibil ity design errors. Instead, he quiedy agreed to
Hunt’s request to avoid acting like his predecessor and facing s imilar consequences (getting fired). Blanc curtly
stated that her group was ready if Choy’s ESD unit could get accurate production s pec ifications ready on time and
if the sales director would stop making wild delivery promises to customers.
When Doc’s revised design specs arrived more than a week later, Choy’s group discovered numerous incom-
patibilities that had to be corrected. Even though several ESD staff were a~ signed to 12-hour days on the revis ions,
the final production specifications weren’t ready until a couple o f days after the deadline. Production returned
these specs two days later, noting a few e le ments that required revision because they were too cosdy or difficult
to manufacture in their current for m. By that time, the production director had to give priority to other jobs and
move the new hearing aid product further down the queue. This meant that manufac turing of the new product was

Chapter Te n Power and Influence in the Workplace 303
delayed by at least two months. T he sales director was furious and implied that Frank Choy’s incompetence was
to blame for this catastrophe.
Discuss ion Questio ns
I. What sources and contingencies o f power existed among the executives and departments at Resonus?
2 . What inf luence tactics were evident in this case study? Would you define any of these influence activities as
organizational politics? Why or why not?
3. S uppose you are a consultant invited to propose a solution to the problems faci ng this organization’s product
delays. What would you recommend, particularly regarding power dynamics among the executives and
departments?
By S teven L McShane. based on an earlier case written by John A. Seeger.
Team Exercise:
DECIPHERING THE (SOCIAL)
NETWORK
Purpose This exercise is designed to help student~ interpret social network maps, including their implications
fo r organizational effectiveness.
Materials The instructor will distribute several social network diagrams to each student.
Instructions (Smaller classes) The instructor will organize students into teams (typically four to seven people,
depending on class size). Teams will examine each social network diagran1 to answer the following questions:
I. What aspects o f this diagram suggest that the network is not operating as e ffectively as possible?
2. Which people in this network seem to be most powerful? Least powerfu l? What information or features of the
diagram lead you to this conclusion?
3. If you were responsible for this group o f people, how would you change this situation to improve their
e ffectiveness?
Af ter teams have diagnosed each social network map, the class will debrief by hearing each team ‘s assessments
and recommendations.
Instructions (Larger classes) T his activity is also possible in large classes by projecting each social
network diagram on a screen and giving students a minute or two to exan1ine the diagram. The instructor can
then ask specific questions to the class, s uch as pointing to a speci fic individual in the network and asking
whether he/she has high or low power, what level of centrality is apparent, and whether the individual’s
connections are mainly strong or weak ties. The instructor might also ask which quadrant on the map indicates
the most concern and then allow individual students to provide their explanation why.
Self-Assessments for Chapter 10
—-~-4 DESCRIPTION
Do you have a guanxi orientation?
I_
Connections and social networks are important. no matter where
you do business around the world. These inte rpersonal relationships
are called guanxi in China. whe re they are very important due to
Confucian values and the unique history of that country. This self·
a..~sessment estimates the degree to which you display traditional
gumu·i values.
—-‘-

304 Part Three Team Processes
I SELF-ASSESSMENT NAME
How do you in fl uence co-workers and other
peers?
How politically charged is your school?
How Machiavell ian are you?
DESCRIPTION
Working wilh others in organizations is an ongoing process of
coordination and cooperation. Part of that dynamic is changing ou r
attitudes and behaviour as well as motivating others to change their
attitudes and behaviour. In o ther words. everyone engages in influ·
ence tactic..”‘ to get things d o ne. T he re are many \\’a)’S to influence
other people. some of which work better than others. depending
on the s itua tion. Use this tool to assess the types of influence you
might employ and you r prefere nce for various tactics.
Every o rganization has some d egree of organizational politics.
Depending on behavioural no rms and organizational culture.
employees in some companies actively use influence tactics to get
their own way for personal gain. In other work places. employees
who engage in organizational politics are q uickly reminded to avoid
these tactics. or are eventually asked to wo rk somewhere e lse.
StudenL~ can us ually sense the level of organizational politics at the
college where they are taking courses. This tool assesses the level
of o rganizational politics at your school.
O ne of the best- known ind ividual differences in o rganizational
politics is Machiavellianism. named after the 16th-century Italian
philosophe r w ho wrote a famous treatise abou t political behaviour
(The Prince). Machiavellian employees take a perspective of
situations and other people that motiv-.ues them to apply influence
tactics mo re fo r personal gain. Although few people wan t to be
v iewed as Machiavellian. measures s uggest that most of us a pply
these tactics to some extent This self-assess ment measures how
much you value the politica1 tactics emphasized b y Machiavelli.

CHAPTER 11
Conflict and Negotiation
in the Workplace
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
LO 1 Define conflict and de bate its positive and negative consequences in the workplace.
L02 Distingu ish task from relationship conflict and describe t hree strategies to m inim ize relationsh ip
conflict during task conflict e p isodes.
L03 Diagram t he conflict process model and describe six structural sources of conflict in o rganizations.
L04 Outl ine the five confl ict hand ling styles and d iscuss the circumstances in which each wou ld be most
appropriate.
LOS Apply the six st ructural approaches to conflict management and describe the three types of
third-party d ispute resolution.
LOG Describe d istributive and integ rative negotiations and outlin e strate gies skilled negotiato rs use to
cla im value and c reate value.
Google uses th1rd part1es to help resolve online d isput es.
C MONKEY BUSINESS • LBR/ &ge fo t ostock
3 05

306 Part Three Team Processes
eBay is one of the world’s best known auction sites, connecting buyers and sellers located all
over the world. In most cases. the transactions proceed without a problem. Occasionally, however,
disputes arise and create conflict between the two involved parties. In order to increase perceptions
of trust among consumers. e Bay has created a wide range of dispute-resolution options available
to parties who experience problems and have their claims for restitution rejected.
One option is for parties to rely on a dispute-resolution provider known as SquareTrade.
Square Trade usually follows a two-stage process. beginning w ith a web-based negotiation between
the parties and ending w ith a human mediator if the negotiation process fails. The conversation
between the parties and the mediator is facilitated by the mediator using a web interface. This
allows parties to participate at different times.
Using a web-based method appears to be more effective than trad itional methods using free-
text complaining and demanding. Why? SquareTrade’s portal provides more structure, relying on
forms that clarify and highlight areas of disagreement and possible solutions. Keeping the parties
focused on solutions appears to reduce the amount of negative communication. reducing anger
and hostility between the parties. 1
The opening story about eBay illustrates that having systems in place to deal proactively with conflict is an effective business strategy. This chapter investigates the dynamics of confl ict in organizational
settings. It begins by defining conflict and discussing the age-old question: Is conflict good or bad?
Next, we look at the conflict process and examine in detail the main fac tors that cause or ampl ify
conflict. The five styles of handling confl ict are then described, including important contingencies of
conflict handling as well as gender and cross-cultural differences. Next, we look at the role of managers
and others in third-party conflict resolution. The final section of this chapter reviews key issues in
negotiating conflict resolution.
The Meaning and Consequences of Conflict
One of the fact~ of life is that organizations are continuously adapting to their external envi-
ronment and introducing better ways to transform resources into outputs (see Chapter 1 ).
There is no clear road map on how companies should change, and employees and other
stakeholders rarely agree completely on the direction or form of these adjustments. Employees have dif-
feren t personal and work goals, which lead them to prefer different directions for the organization to take.
These differences in goals and viewpoints, along w ith a few other key fac tors described in this
chapter, lead to conflict. Conflict is a process in which one party perceives that its interests are being
opposed or negatively affected by another party.2 It may occur when one party obstructs another’s
goals in some way, or just from one party ‘s perception that the other party is going to do so. Confl ict
is ultimately based on perceptions; it exists whenever one party believes that another might obstruct its
efforts, whether or not the other party actually intends to do so.
IS CONFLICT GOOD OR BAD?
One of the oldest debates in organizational behaviour is whether conflict is good or bad-or, more
recently, what forms of conflict are good or bad-for organizations.3 The dominant view over most of
this time has been that conflict is dysfunctional.4 At the turn of the 20th century, European administra-
tive theorists Henri Fayol and Max Weber emphasized that organizations work best through harmoni-
ous relations. Elton Mayo, who founded Harvard University’s human relations school and is considered
one of the founders of organizational behaviour, was convinced that employee-management confl ict
undermines organizational effectiveness. These and other critics warn that even moderately low levels
of disagreement tatter the fabric of workplace relations and sap energy away from productive activi-
ties. Disagreement with one’s supervisor, for example, wastes productive time, violates the hierarchy
of command, and questions the efficient assignment of authority (where managers make the dec is ions
and employees follow them).

Chapter Eleven Conflict and Negotiation in the Workplace 3 07
EXHIBIT 11.1: Consequences of Workplace Conflict
NeplheCa IIP I n 1 …._CD Ill I n 1
Uses otherwise productive time Better decision making:
less information sharing o test’i logic of argument’i
Higher stress. dissatisfaction. and turnover o questions assumptions
Increases organizational politics More responsive to changing environment
\Vaste.’i resources Stronger team cohesion (conflict between the team and
\Veakens team cohesion {conflict among team members) out’iide opponents)
Al though the “conflict-is-bad” perspective is now considered too simplisti c, workplace conflict can
indeed have negative consequences under some circumstances (see Exhibit 11.1 ).5 Conflict has been criti-
cized for consuming otherwise productive time. For instance, almost one-third of the 5000 empl oyees
recently surveyed across nine countries reported that they are frequently or al ways dealing with workplace
conflict. More than half of the empl oyees in Germany complained that cont1ict was consuming their
workday6 According to a Conference Board of Canada report, ” unmanaged or unresolved cont1ict con-
tributes to employee absenteeism that cost the Canadian economy an estimated $ 16. 1 billion in 20 12.”7
Conflict can undermine job performance in other ways.8 Conflict i s often stressful , which consumes
personal energy and distracts employees from their work. Conflict discourages people engaged in the dis-
pute from sharing resources and coordinating with each other. It can reduce job satisfaction, resul ting
in higher turnover and lower customer service. Conflict fuels organizational poli tics, such as motivating
employees to find ways to undermi ne the credibi li ty of their opponents. D ecision making suffers
because people are Jess motivated to communicate valuable information. Ironically, wi th Jess com-
muni cati on, the feuding parties are more likely to escal ate their disagreement because each side rel ies
increasingly on distorted perceptions and stereotypes of the other party. Final ly, cont1ict among team
members may undermi ne team cohesion and performance. As Connecti on I I I describes, airlines and
customers alike suffer when t1ight crew members don’ t get al ong.
~ “‘l Global Connections 11.1:
HIGH COST OF ON-BOARD CONFLICTS
Airline custo mers suffer eno ug h when experiencing or observing on-board conflicts with
other passengers, but these are usually minor inconveniences compared to situatio ns when
flight crew members can’t get along with each other. Consider the following events.
An American Airlines flig ht returned to the g ate almost as soon as it beg an to taxi toward
its takeoff runway because, in the airline’s words, “there was a disagreement between two
flight attendants.” One flight attendant was using her cell phone during pre-departure prepa-
rations for the New York-to-Washington commuter flight. Her activities apparently prompted
her colleag ue to announce over the intercom that everyone needed to turn off their phones
and electro nic d evices, “including the ot her flight attendant.” That co mment led to a scuffle
between the two crew members, which was serious enough that the pilots decided to cancel
the flight. Passeng ers had to wait four hours for a new crew to arrive.
Exactly one week later, a United Airlines flight bound for Chicago returned to Raleigh-
Durham International Airport in No rth Caro lina sho rtly after ta keoff because of confl ict
between two flig ht attendants. The cause of t he tiff seemed almost trivial. “One flight atten-
dant had crossed t heir leg and accide ntally brushed th e other person,” explained a
(continued)

308 Part Three Team Processes
(continued)
spokesperson at the airport after the flight had returned. Although apparently un intentional,
the other flight attendant interpreted the incident as a provocation because relations
between the two were already fragile. “It appears there was a disagreement before that that
became elevated,” the spokesperson sa id. Passengers had to wait three hours for an alter-
native flight and Un ited Airlines faced the costs of an abandoned flight, compensation for
travellers with missed connections, possible overtime for the replacement crew, and loss of
customer service reputation.
Conflict among airline crew members can be costly for airlines and ruin their customer service
reputation.
© l zabela Habur/ E+/ Getty Images
Pilots probably also have disagreements, but few are noticed and fewer still lead to flight
delays. Cockpit conflict, however, may have indirectly contributed to the cancellation of a Qan-
tas flight from Dallas to Sydney, Australia. The flight operations managers reportedly decided
to cancel the flight because thunderstorms had delayed the departure and the pilots were
already close to exceeding their maximum work hours. However, the captain and second officer
were later suspended when the managers learned the pilots had an argument regarding take-
off calculations to enter into the computer system while preparing for departure. The airline had
to fly in replacement pilots, resulting in an 18-hour delay.9
Benefits of Conflict In the 1920s, when most organizational scholars viewed conflict as inher-
ently dysfunctional, educational philosopher and psychologist John Dewey praised its benefits : ” Con-
fl ict is the gadfly of thought. It stirs us to observation and memory. It instigates to invention. It shocks
us out of sheep-l ike passivity, and sets us at noting and contriving.” 10 Three years later, pol itical sci-
ence and management theorist Mary Parker Follett s imilarly remarked that the “friction” of conflict
should be put to use rather than treated as an unwanted consequence of differences.11

Chapter Eleven Conflict and Negotiation in the Workplace 3 0 9
But it wasn’ t until the 1970s that conflict management experts began to embrace the “optimal con-
flict” perspective. 12 According to this view, organizations are most effective when employees expe-
rience some level of conflict, but become less effective with high levels of conflict. 13 What are the
benefits of confl ict? As Dewey stated, confl ict energizes people to debate issues and evaluate alter-
natives more thoroughly. They probe and test each other’s way of thinking to better understand the
underlying issues that need to be addressed. This discussion and debate tests the logic of arguments
and encourages participants to re-examine their basic assumptions about the problem and its possible
solutions. It prevents individuals and teams from making inferior decisions and potentially helps them
to develop more sound and creative solutions. 14
A second potential benefit is that moderate levels of confl ict prevent an organization from becoming
nonresponsive to its external environment. As mentioned, differences of opinion encourage employees
to engage in active thinking, and this often involves ongoing questioning and vigi lance about how the
organization can be more closely aligned with its customers, suppliers, and other stakeholders. 15 A third
benefit of confl ict occurs when team members have a dispute or competition with external sources.
This form of conflict represents an external chal lenge which, as was noted in Chapter 8, potentially
increases cohesion within the team. People are more motivated to work together when faced w ith an
external threat, such as conflict with people outside the team.
The Emerging V iew: Task and Relationship Conflict
Although many writers sti ll refer to the “optimal conflict” perspective, an emerging
school of thought is that there are two types of confl ict with opposing consequences:
ta~k confl ict and relationship conflict. 16 Task conflict (also called constructive conflict)
occurs when people focu s their discussion around the issue (i.e., the “task”) while showing respect for
people with other points of view. This type of confl ict debates the merits and limitations of different
positions so ideas and recommendations can be clarified, redesigned, and tested for logical soundness.
By keeping the debate focused on the issue, participants calmly re-examine their assumptions and
beliefs w ithout having hostile emotions triggered by their drive to defend their self-concept. A subset
of task confl ict is process conflict, which entails disagreement about how tasks should be performed
and who should perform the various roles and duties. Research indicates that task conflict tends to
produce the beneficial outcomes that we described earlier, particularly better decision making. 17 At the
same time, there is likely an upper limit to the intensity of any disagreement, above which it would be
difficult to remain constructive.
In contrast to ta~k conflict, relationship conflict focuses on interpersonal differences between or among
the adversaries. The parties refer to “personality clashes” and other interpersonal incompatibilities rather
than to legitimate differences of opinion regarding tasks or decisions. Relationship conflict involves one
party questioning or critiquing personal characteristics of the other person. As such, it attempts (or is per-
ceived to attempt) to undermine another person’s competence. These personal attacks threaten self-esteem
and oppose self-enhancement and self-verification processes (see Chapter 3). Consequently, they usu-
ally trigger defence mechanisms and a competitive orientation between the parties. Relationship conflict
also reduces mutual trust because it emphasizes interpersonal differences that shred identification with
the other person. 18 Relationship conflict escalates more easily than task conflict because the adversaries
become less motivated to communicate and share information, making it more difficult for them to dis-
cover common ground and ultimately resolve the conflict. Instead, they rely more on distorted perceptions
and stereotypes which, a~ we noted earlier, tends to further intensify the conflict.
Separating Task from Relationship Conflict If there are two types of confli ct, then the
obvious advice is to encourage task conflict and minimize relationship confl ict. This recommendation
sounds good in theory, but separating these two types of conflict isn’t easy. Research indicates that we

3 10 Part Three Team Processes
Team decision making at Amazon.com is not a casual social gathering. “There’s an incredible
amount of challenging the other person … You want to have absolute certainty about what you are
saying,” admits a former senior market researcher at the on line retailer. In fact, one of Amazon’s
princip les states that leaders should “respectfully challenge decisions when they disagree, even
when doing so is u ncomfortable or exhausting.” Amazon executive Tony Galbato explains that
“it wou ld certain ly be much easier and socially cohesive to just compromise and not debate, b ut
that may lead to the wrong decision.” Some observers and emp loyees say that Amazon’s decision
making approach fuels relationship conflict, no t j ust task conflict. Others counter that relationship
conflict is discouraged, pointing out that “respectfully challenge• means focusing on the problem,
not the person. “We debate politely and respectfully, and you are given constructive feedback to
course-correct if you are rude or disrespectful,” says a middle management engineer. 19
© Caiaimage/Giow Images
experience some degree of relationship confl ict whenever we are engaged in constructive debate.20 No
matter how diplomatically someone questions our ideas and actions, they potentially trigger our drive to
defend our ideas, our sense of competence, and our public image. The stronger the level of debate and
the more the issue is tied to our self-concep t, the higher the chance that the task confl ict will evolve
into (or mix w ith) relationship confl ict.
Fortunately, three factors or conditions, and their concomitant strategies, potentially minimize the
level of relationship confl ict that occurs during task conflict episodes.21
Emotional intelligence and emotional stability. Relationship conflict is less likely to occur, or
is less likely to escalate, when team members have high levels of emotional intelligence and its
associated personality characteristic: emotional stability.22 Employees w ith higher emotional
intelligence and stability are better able to regulate their emotions during debate, which reduces
the risk of escalating perceptions of interpersonal hostility. They are also more likely to view a
co-worker’s emotional reaction as valuable information about that person’s needs and expecta-
tions, rather than as a personal attack.
Jeff Weiner, CEO of Linkedln, has written that one of the most important leadership qual ities,
one that is “invaluable when it comes to relating to others, particularly in tense work situations”

Chapter Eleven Conflict and Negotiation in t he Wo rkplace 311
is compassion and the capacity to “see things clearly through another person’s perspective.”
Weiner believes that most people have a tendency to see things solely through their own world
view. He suggests that when faced with a disagreement in the workplace, it is helpfu l to stop
and consider “why the other person has reached the conclusion that they have. For instance,
what in their background has Jed them to take that position? Do they have the appropriate expe-
rience to be making optimal decisions? Are they fearful of a particular outcome that may not
be obvious at surface level?” Weiner recommends that, in addition to personally reflecting on
these matters, aski ng these questions of the other person can transform a challenging situation
into a “truly collaborative experience.’m
Cohesive team. Relationship confl ict is suppressed whe n the confl ict occurs w ithin a highly
cohesive team . The lo nger people work together, get to know each other, and develop
mutual trust, the more latitude they give to each other to show emotions w ithout being
personally offended. T his might explai n why task confl ict is more effect ive in top manage-
ment teams than in teams of more j unior staff.24 S trong cohesion also allows each person to
know about and anticipate the behav iours and emotions of their team mates. Another benefi t
is that cohesio n produces a stronger social identity w ith the group, so team members are
motivated to avoid escalati ng relat ionshi p confl ict duri ng ot herw ise emot ionally turbulent
discussions.
Supportive team norms. Various team norms can hold relationship conflict at bay during ta~k-focused
debate. When team norms encourage openness, for instance, team members Jearn to appreciate
honest dialogue without personally reacting to any emotional display during disagreement~.25 Other
norms might discourage team members fro m displaying negative emotions toward co-workers. Team
norms also encourage tactics that diffuse relationship conflict when it first appears. For instance,
research has found that some teams with low relationship conflict use humour to maintain positive
group emotions which off.~et negative feelings team members might develop toward some co-
workers during debate.
Conflict Process Model
Now that we have outlined the history and current knowledge about con fl ict and
its outcomes, Jet’s look at the model of the confl ict process, shown in Exhi bit
I 1.2. Thi s model begins w it h the sources of con fl ict, w hich we w ill describe in
EXHIBIT 11.2 Model of the Conflict Process
Sources of
Conflict
Incompatible goals
Differentiation
Interdependence -+
Scarce resources
Ambiguous rules
Poor
communication
escalation
Conflict
Outcomes
Positive
• Better decisions
• Responsive organization
• T earn cohesion
Negative
• Stressllow morale
• Turnover
• Politics
• Lower performance
• Distorted information

312 Part Three Team Processes
the next section. At some point, the sources of conflict lead one or both parties to perceive that
confl ict exists. They become aware that one party’s statements and actions are incompatible with
their own goals. These perceptions usually interact with emotions experienced about the con-
fl ict.26 Conflict perceptions and emotions manifest themselves in actual confl ict-the dec is ions
and behaviours of one party toward the other. These conflict episodes may range from subtle non-
verbal behaviours to heated aggression. Particularly when experiencing high levels of conflict-
generated emotions, people have difficulty finding the words and expressions to communicate
effectively without further irritating the relationship27 Conflic t is also manifested by the style
each s ide uses to resolve it. Some people tend to avoid the conflict whereas others try to dom inate
those wi th opposing views.
Exhibit I I .2 shows arrows looping back from manifest conflict to confl ict perceptions and emo-
tions. These arrows illustrate that the conflict process is really a series of episodes that potential ly
cycle into conflict escalation28 It doesn’ t take much to start this confl ict cycle-just an inappropriate
comment, a misunderstanding, or action that lacks diplomacy. These behaviours cause the other party
to perceive that conflict exists. Even if the first party did not intend to demonstrate conflict, the second
party’s response may create that perception.
Structura l Sou rces of Conflict in Organ izations
The conflict model start~ with the sources of confl ict, so we need to understand these sources to effec-
tively diagnose conflict episodes and subsequently resolve the confl ict or occasional ly to generate
conflict where it is lacking. The six main conditions that cause conflict in organizational settings are
incompatible goals, differentiation, interdependence, scarce resources, ambiguous rules, and commu-
nication problems .
• by the NUMBERS
Do lntergenerational Differences Increase or Decrease
Prod uctivity?29
Thailand
United States
Hungary
GLOBAL
New Zealand
Canada
Malaysia
India
Germany
-50% -40%
lntergenerational differences
make the workplace less
productive
lntergenerational differences
make the workplace more
productive

Chapter Eleven Conflict and Negotiation in the Workplace 3 13
INCOMPATIBLE GOALS
Goal incompatibility occurs when the goals of one person or department seem to interfere with
another person’s or department’s objectives.3° For example, the production department strives for
cost efficiency by scheduling long production runs whereas the sales team emphasizes customer
serv ice by deliveri ng the cl ient’s product as quickly as possible. If the company runs out of a par-
ticular product, the production team would prefer to have clients wait until the next production run.
This infuriates sales representatives who would rather change production quickly to satisfy customer
demand.
Whi le the above example reflects a situation of competing priorities, conflicts can also manifes t due
to differences about how to achieve a goal. Two people or departments may agree on a common goal
(e.g., serving customers better), but have different bel iefs about how to attain that goal (e.g., standard-
izing employee behaviour versus giving employees autonomy in customer interactions). Although the
dispute relates to a goal, the actual root of the conflict is different viewpoints, known as “differentia-
tion,” which is discussed next.
DIFFERENTIATION
Differentiation can be a significant source of conflict because it usual ly represents differences among
people and work units regarding their training, values, beliefs, and experiences. Intergenerational con-
flicts occur because younger and older employees have different needs, different expectations, and
different workplace practices, which sometimes produce conflicting preferences and actions. Recent
studies suggest that these intergenerational differences occur because people develop social identities
around technological developments and other pivotal soc ial events that are unique to their era3 1
Differentiation also produces the classic tension between employees from two companies brought
together through a merger.32 Even when people from both companies want the integrated organization to
succeed, they may fight over the “right way” to do things because of their unique experiences and the distinct
corporate culntres in the separate companies. This form of conflict emerged when CenturyLink acquired
Qwest, creating the third largest telecommunications company in the United States. The two companies were
headquartered in different parts of the country. ‘Their languages were different, their food was different,
answers were different. We talked fa~t and interrupted, and they talked slow and were polite,” recalls a senior
Qwest executive. “If we said up, they said down. If we said yes, they said no. If we said go, they said stop.”
The result wa~ “unnecessary misunderstandings” as executives tried to integrate the two companies33
Some predicted this form of culture clash when Bank of Nova Scotia (Scotiabank), a 180-year-old
Canadian financial institution, acquired ING Direct, a 17-year-old digital-only bank.34 The two banks
were entirely different: Scotiabank was an established “pillar of Canada’s banking establ ishment” and
ING was known for its “scrappy upstart” image. ING employees identified strongly with their bank’s
quirky persona as a “virtual anti-bank.”35 A condition of Scotiabank’s to the purchase was that ING
had to change its name, which led to wholesale rebranding.36 Although ING is now called Tangerine,
former ING CEO Peter Aceto describes Scotiabank as havi ng been committed to keeping the banks’
separate identities and preserving ING’s distinctive culture. Consequently, in this example, differentia-
tion wa~ a key element of the success of both institutions.
Differentiation conflict can also manifest due to incongruent values. Take, for example, the dilemma
that the C ity of Saskatoon struggled w ith when its tax a~sessment staff attended at certain properties to
conduct visual evaluations. On occasion, city staff had to enter rel igious buildings for the purposes of
tax a~sessment and a particular religion’s tenets required everyone to remove footwear prior to entering
the building. City staff were caught in a bind because, according to the city’s health and safety regula-
tions, staff were required to wear steel-toed boots when conducting their assessment. T he conflict clearly
arose from competing values: the right to health and safety versus the right to religion. Jodi Fick-Dryka,
diversity coordinator for the C ity of Saskatoon, explains that “a mutually agreeable solution to wear

314 Part Three Team Processes
disposable boot covers” resolved the dispute37 Differentiation due to competing values can often result
in extremely difficult confl ict because the roots of the dispute arise out of deeply held personal views.
INTERDEPENDENCE
Confl ict tends to increase with the level of task interdependence. Task interdependence refers to the
extent to which employees must share materials, information, or expertise to perform their jobs (see
Chapter 8). This interdependence includes sharing common resources, exchanging work or clients back
and forth, and receiving outcomes (such as rewards) that are partly determined by the performance of
others38 Higher interdependence increa~es the risk of conflict because there is a greater chance that
each side will disrupt or interfere w ith the other side’s goals.39
Other than complete independence, employees tend to have the lowest risk of conflict when work-
ing with others in a pooled interdependence relationship. Pooled interdependence occurs where indi-
viduals operate independently except for rel iance on a common resource or authority. The potential
for confl ict is higher in sequential interdependence work relationships, such as an assembly line. The
highest risk of confl ict tends to occur in reciprocal interdependence situations. With reciprocal inter-
dependence, employees have high mutual dependence on each other and, consequently, have a higher
probabi lity of interfering w ith each other’s work and personal goals.
SCARCE RESOURCES
Resource scarcity generates confl ict because each person or unit requiring the same resource necessar-
ily undermines others who also need that resource to fulfil their goals. Most labour strikes, for instance,
occur because there aren’t enough financ ial and other resources for employees and company owners
to each receive the outcomes they seek, such as higher pay (employees) and higher investment returns
(shareholders). Budget deliberations w ithin organizations also produce conflict because there aren’t
enough funds to satisfy the goals of each work unit. The more resources one group receives, the fewer
resources another stakeholder wi ll receive. Fortunately, these interests aren’ t perfectly opposing in
complex negotiations, but limited resources are typically a major source of friction.
AMBIGUOUS RULES
Ambiguous–or nonexistent-rules breed confl ict. This occurs because uncertainty increases the risk
that one party intends to interfere with the other party’s goals. Ambiguity also encourages political
tactics and, in some cases, employees enter a free-for-all battle to win decisions in their favour. This
explains why conflict is more common during mergers and acquisitions. Employees from both compa-
nies have conflicting practices and values, and few rules have developed to minimize the manoeuvring
for power and resources.40 When clear rules exist, on the other hand, employees know what to expect
from each other and have agreed to abide by those rules.
COMMUNICATION PROBLEMS
Confl ict often occurs due to the Jack of opportunity, ability, or motivation to communicate effectively.
Let’s look at each of these causes. First, when two parties Jack the opportunity to communicate, each
tends to rely more on stereotypes to understand the other party in the confl ict. Unfortunately, stereo-
types are sufficiently subjective that emotions can negatively distort the meaning of an opponent’s
actions, thereby escalating perceptions of confl ict. Second, some people Jack the necessary skills to
communicate in a diplomatic, nonconfrontational manner. When one party communicates its disagree-
ment arrogantly, opponents are more likely to heighten their perception of the conflict. This may lead
the other party to reciprocate with a similar response, which further escalates the confl ict.4 1
A third problem is that relationship conflict is uncomfortable, so people are Jess motivated to com-
municate w ith others in a disagreement. Unfortunately, Jess communication can further escalate the
conflict because each side has Jess accurate information about the other side’s intentions. To fill in the
missing pieces, they rely on distorted images and stereotypes of the other party. Perceptions are further
distorted because people in conflict situations tend to engage in more differentiation with those who

Chapter Eleven Conflict and Negotiation in the Workplace 3 15
are different from them (see Chapter 3). This differentiation creates a more positive self-concept and a
more negative image of the opponent. We begin to see competitors less favourab ly so our self-concept
remains positive during these uncertain times.42
Interpersonal Conflict Handl ing Styles
L04 The six structural conditions described in the previous section lead to conflict percep-
tions and emotions which, in turn, motivate people to take some sort of action to address
the confl ict. Along with her pioneering view that some confl ict is beneficial, Mary
Parker Follett suggested there are different conflict handling styles. Confl ict management experts
subsequently expanded and refined this taxonomy of conflict handling styles, w ith most of them adapting
variations of the five-category model shown in Exhibit 11.3 and described below. This model recog-
nizes that how people approach a conflict situation depends on the relative importance they place on
maximizing outcomes fo r themselves and maximizing outcomes for the other party.43
Problem solving. Problem solving tries to find a solution that is beneficial for both parties.
This is known as the win-win or ientation because people using this style bel ieve the resources
at stake are expandable rather than fixed if the parties work together to find a creative solution.
Information sharing is an important feantre of this style because both parties collaborate to
identify common ground and potential solutions that satisfy everyone involved.
What is your preferred conflict handling style? You can d iscover your preferred way
of handling conflict by locating this self-assessment in Connect.
EXHIBIT 11.3 Interpers onal Conflict Handling Style s 4 4
Asse rtivene ss
(motivation to
satisfy one’s
own interests)
High
Low
Forcing
Avoiding
Low
Compromising
Cooperativeness
(motivation to satisfy
other party’s interests)
Proble m solving
Yielding
High

316 Part Three Team Processes
Forcing. Forcing tries to win the conflict at the other’s expense. People who use this style typically
have a win- lose orienta tion-they believe the parties are drawing from a fixed pie, so the more one
party receives, the Jess the other party will receive. Consequently, this style relies on some of the
“hard” influence tactics described in Chapter 10, particularly assertiveness, to get one’s own way.
Avoiding. Avoiding tries to smooth over or evade conflict situations altogether. A common
avoidance strategy is to minimize interaction with certain co-workers. For instance, 67 percent
of employees in one large global survey said they go out of their way to avoid seeing co-workers
with whom they have a disagreement. A smaller number (14 percent) have missed a day of
work to avoid workplace conflict.45 A second avoidance strategy is to steer clear of the sensitive
topic when interacting with the other person in the confl ict. These examples indicate that avoid-
ance does not necessarily mean that we have a low concern for both one’s own and the other
party’s interest. Instead, we might be very concerned about the issue but believe that avoidance
is the best solution, at least for the short term.46
Yielding. Yielding involves giving in completely to the other side’s wishes, or at least cooperating
with little or no attention to your own interests. This style involves making unilateral concessions
and unconditional promises, as well as offering help with no expectation of reciprocal help.
Compromising. Compromising involves looking for a position in which your losses are offset by
equally valued gains. It involves matching the other party’s concessions, making conditional prom-
ises or threats, and actively searching for a middle ground between the interest~ of the two parties.
CHOOSING THE BEST CONFLICT HANDLING STYLE
Chances are that you have a preferred conflict handling style. You might typically engage in avoiding
or yielding because disagreement makes you feel uncomfortable and is contrary to your self-view a~
someone who likes to get along with everyone. Or perhaps you prefer the compromising and forc ing
EXHIBIT 11.4 Conflict Handling Style Contingencies and Problems
~
~ …….. SIJie l’lllenedSIJieW… ~ ………. SIJie
Problem solving Interest’ are not perfectly opposing Involves sharing information that
(i.e. , not pure win- lose) the other party might use to their
Parties have ttust. openness. and time to share advantage
info rmation
The issues are complex
Forcing You have a deep conviction about your posi· Highest ris k of relationshi p conflict
tion {e.g., believe other person’s behaviour is May damage long· term relations .
unethical) reducing future problem solving
Dispute requires a quick solution success
The other party would take advantage of more
cooperative strategies
Avoiding Conflict has become too emotionally charged Doesn’t usuaJly resolve the conflict
Cost of trying to resolve the conflict May increa…;e other party’s
outweighs the benefits frustr.ttion
Yielding Other party ha.’ substantially more power Increases other party’s expectations
Issue is much Jess important to you than to in future conflict episodes
the other party
The value and logic of your position isn’t as
clear as the other party•s
Compromising Parties have equal power Sub·optimal solution where mutual
Time pressure to resolve the conflict gains are possible
Parties Jack trust/openness for problem solving

Chapter Eleven Conflict and Negotiation in the Workplace 3 17
strategies because they reflect your strong need for achievement and to control your environment. Peo-
ple usually gravitate toward one or two confl ict handling styles that match their personality, personal
and cultural values, and past experience.47 However, the best style depends on the situation, so we need
to understand and develop the capacity to use each style when it’s called for.4 8
Exhibit 11.4 summarizes the main contingencies and problems associated with using each confl ict
handling style. Problem solving has long been identified a~ the preferred conflict handling style wher-
ever possible because dialogue and clever thinking help people to break out of the limited boundaries of
their opposing alternatives to find an integrated solution where both parties gain value. In addition, the
problem solving style tends to improve long-term relationships, reduce stress, and minimize emotional
defensiveness and other indications of relationship conflict.49
However, problem solving a~sumes there are opportunities for mutual gains, such as when the cont1ict
is complex with multiple elements. If the conflict is simple and perfectly opposing (each party wants
more of a single fixed pie), then this style will waste time and increase frustration. The problem solving
approach also takes more time and requires a fairly high degree of trust, because there is a risk that
the other party w ill take advantage of the information you have openly shared. As one study recently
found, the problem solving style is more stressful when people experience strong feel ings of confl ict,
likely because these negative emotions undermine trust in the other party.50
The conflict avoidance style is often ineffective because it doesn’t resolve the conflict and may
increase the other party’s frustration. However, avoiding may be the best strategy where conflict has
become emotionally charged or where conflict resolution would cost more than the benefits it would
provide. 5 1 The forc ing style is usually inappropriate because it commonly generates relationship con-
flict more quickly or intensely than other conflict handling styles. However, forcing may be necessary
where you know you are correct (e.g., the other party ‘s position is unethical or based on obviously
flawed logic), the dispute requires a quick solution, or the other party would take advantage of a more
cooperative conflict handling style.
The yielding style may be appropriate when the other party has substantially more power, the issue
is not as important to you as to the other party, and you aren’t confident that your position ha~ the best
value or logical consistency. 52 On the other hand, yielding behaviours may give the other side unreal-
istical ly high expectations, thereby motivating them to seek more from you in the future. In the long
run, yielding may produce more conflict than resolution. ” Raised voices, red faces, and table thump-
ing is a far less dysfunctional way of challenging each other than w ithdrawal, passivity, and sullen
acceptance,” argues one conflict management consultant. “It doesn’t mean that people agree with you:
they just take their misgivings underground and spread them throughout the organization, which ha~ a
corrosive effect.”53
The compromising style may be best when there is little hope for mutual gain through problem
solving, both parties have equal power, and both are under time pressure to settle their differences.
However, we rarely know whether the parties have perfectly opposing interests, making compromise
more appropriate than problem solving. Therefore, entering a conflict with the compromising style
may cause the parties to overlook better solutions because they have not attempted to share enough
information and creatively look for w in-win alternatives.
CULTURAL AND GENDER DIFFERENCES IN
CONFLICT HANDLING STYLES
Cultural differences are more than just a source of conflict. They also influence the preferred confl ict
handling style. 54 Some research suggests that people from collectivist cultures-where group goals are
valued more than individual goals-are motivated to maintain harmonious relations and, consequently,
are more likely than those from low collectivism cultures to manage disagreements through avoid-
ance or problem solving. However, this view may be somewhat simplistic. Collectivism motivates
harmony w ithin the group but not necessarily w ith people outside the group. Indeed, research indicates
that managers in some collectivist cultures are more likely to publicly shame those whose actions
oppose their own. 55 Cultural values and norms influence the conflict handling style used most often

3 18 Part Three Team Processes
in a society, but they also represent an important contingency when outsiders choose the preferred
conflict handling approach. For example, people who frequently use the confl ict avoidance style might
have more problems in cultures where the forcing style is common.
According to some scholars, men and women tend to rely on di fferent conflict handling styles.56
They suggest that, compared to men, women pay more attention to the relationship between the parties.
Consequently, women tend to adopt a compromising or problem solving style in business settings and
are more willing to compromise to protect the relationship. Compared to men, they are also slightly
more likely to use the avoidi ng style. Men tend to be more competitive and take a short-term orienta-
tion to the relationship. In low collectivism cultures, men are more likely than women to use the forc-
ing approach to confl ict handl ing. We must be cautious about these observations, however, because
diffe rences between men and women on preferred conflict handling styles are fai rly small.
Structura l Approaches to Conflict Management
LOS Confl ict handling styles describe how we approach the other party in a confli ct situa-
tion. But confl ict management also involves altering the underlying structural causes of
potential conflict. The mai n structural approaches are emphasizing superordinate goals,
reducing diffe rentiation, improving communication and mun1al understandi ng, reducing interdepen-
dence, increasing resources, and clarify ing rules and procedures.
EMPHASIZING SUPERORDINATE GOALS
One of the oldest recommendations for resolving conflict is to refocus the parties’ atte ntion around
superordi nate goals and away from the con fl icting subordi nate goals. 57 S uper or din a te goals are
goals that the conflicting employees or departments value and whose attainment requires the
joint resources and effort of those parties. 58 These goals are called superordi nate because they
are highe r-order aspiratio ns, such as the organ ization’ s strategic obj ec ti ves, rather t han obj ec-
ti ves spec ific to the individual or work unit. Research indicates that the most effect ive exec ut ive
teams frame the ir dec is ions as superordinate goals that rise above each executi ve’s department al
or d iv isional goals. Si milarly, one recent study reported that leaders reduce confl ict through an
inspiratio nal visio n that unifies employees and makes the m less preoccupied with their subord i-
nate goal differences. 59
S uppose that marketing staff want a new product released qu ickly, whereas engineers want more
time to test and add new features. Leaders can potentially reduce this interdepartmental confl ict by
reminding both groups of the company’s mission to serve customers, or by pointing out that com-
petitors currently threaten the company’s leadership in the industry. By increasing commitment to
corporate-wide goals (customer focus, competitiveness}, engineering and marketing employees pay
less attention to their competing departmental-level goals, which reduces their perceived confl ict with
co-workers. S uperordinate goals also potentially reduce the problem of differentiation because they
establish feelings of a shared social identity (work for the same company).60
REDUCING DIFFERENTIATION
Another way to minimize dysfunctional confl ict is to reduce the differences that generate conflict. As
people develop common experiences and beliefs, they become more motivated to coordinate activities
and resolve their disputes through constructive discussion.61
One company that real izes this is L’Oreal Canada. Their workforce is diverse: I ,200 e mployees rep-
resent 61 nationalities; 42 percent of employees are women; and employees are spread across the three
main generations-baby boomers (25 percent), Generation X (33 percent}, and Generation Y (42 percent).
These different forms of diversity have been immensely beneficial to the company. ” From diversity
stems stimulating, rich debates that propel our teams to think forward and encourage innovation,” says
Marie-Josee Lamothe, L’Oreal Canada’s chief marketi ng officer and chief communications officer.

Chapter Eleven Conflict and Negotiation in the Workplace
l’O real Canada employees (from left) Ashley Bancroft. Christian Bouchard, and Wendy Stewart say the
company’s Valorizing lntergenerational Differences training has helped them to leverage the company’s
creative potential by minimizing dysfunctional conflict and improving relations with co-workers.
© Post Media
3 19
But rich debates can easily deteriorate into dysfunctional battles when participants fai l to keep
their differences in perspective. L’Oreal Canada’s executives anticipated this risk several years ago
as its workforce demography began shifting to a balance across the three generations. The generations
differed in their needs and expectations, which company leaders understood might lead to dysfunctional
intergenerational confl ict. “We realized we could be faced with an interesting problem,” recalls Marjo-
laine Rom pre, L’ Oreal Canada’s director of learning and development. “We called it Generation Shock.”
Rather than have that generation shock turn into dysfunctional conflict, L’Oreal Canada introduced
a full-day seminar, called Valorizing Intergenerational Differences, which aims to help employees
across all generations understand and value each other’s perceptions, values, and expectations. In one
part of the program, for example, employees sit together in their generational cohorts and a~k questions
to employees in the other cohorts. “Each group is interested and surprised to see what’s important to
the other group,” says Rompre.
Participants say the program leverages the company ‘s creative potential by mi nimizing dysfunc-
tional confl ict and improving relations with co-workers. “The Valorizing Intergenerational Differences
training really helped me to understand where people from each generation are coming from,” says
key account manager Ashley Bancroft, shown left in the photo below with national accounts directors
Christian Bouchard and Wendy S tewart. It has also helped L’Oreal Canada to become one of the best
places to work in Canada, including one of the country’s best diversity employers.62
IMPROVING COMMUNICATION A ND MUTUAL UNDERSTANDING
A third way to resolve dysfunctional conflict is to give the conflicting parties more opportunities to com-
municate and understand each other. This recommendation applies two principles and practices intro-
duced in Chapter 3: the Johari Window model and meaningful interaction. Although both were previously
described as ways to improve self-awareness, they are equally valuable to improve other-awareness.

320 Part Three Team Processes
In the Johari Window process, individuals disclose more about themselves so others have a better
understanding of the underlying causes of their behaviour. L’Oreal Canada’s intergenerational seminar
appl ied a variation of the Johari Window. The cosmetic company’s program includes an activity in
which each generational cohort answers questions from the other cohorts about what is important to
them (such as security, performance, and collaboration). A variation of Johari Wi ndow also occurs in
“lunch and Jearn” sessions, where employees in one function al area describe work and its challenges to
co-workers in other areas. Houston-based Brookstone Construction introduced these info rmation meet-
ings which helped to reduce frustrations between its fie ld and office staff.63
Meaningful interaction potentially improves mutual understanding through the contact hypothesis,
which says that we develop a more person-specific and accurate understandi ng of others by interacti ng
with and working closely with them.64 For example, more than 18,000 employees and managers at the
various companies of S ystem Capital Management participated in the “Let’s Make Ukraine Clean”
campaign. In addition to improving the environment-each person picked up an average of about 100
kg (200 Jbs) of garbage-this volunteering opportunity improved relations among management and
employees at the leadi ng fin ancial and industrial group65
Although communication and mutual understanding can work well, there are two important warn-
ings. First, these interventions should be applied only where differentiation is sufficiently low or after
diffe rentiation ha~ been reduced. If perceived diffe rentiation remains high, attempts to manage con-
fli ct through dialogue might escalate rather than reduce relationship conflict. The reason is that when
forced to interact with people who we bel ieve are quite differe nt and in conflict with us, we tend to
select infor mation that reinforces that view.66 The second warning is that people in collectivist and high
power distance cultures are Jess comfortable with the practice of resolvi ng differences through direct
and open communication.67 Remember, people in collectivist cultures prefer an avoidance confl ict
handling style because it is the most consistent with harmony and face saving. Direct communication is
a high-risk strategy because it ea~ily threatens the need to save face and maintain harmony.
REDUCING INTERDEPENDENCE
Confl ict occurs where people are dependent on each other, so another way to reduce dysfunctional
confli ct is to minimize the level of interdependence between the parties. Three ways to reduce inter-
dependence among employees and work units are to create buffers, use integrators, and combine j obs.
Create b uffers. A buffe r is any mechanism that loosens the coupling between two or more people
or work units. T his decoupling reduces the potential for conflict because the buffer reduces the
effect of one party on the other. Bui lding up inventories between people in an assembly line
would be a buffer, fo r example, because each employee is less dependent in the short term on
the previous person along that line.
Use integrators. Integrators are employees who coordinate the activities of work units toward the
completion of a common task. For example, an individual might be responsible for coordinating
the efforts of the research, production, advertising, and marketing departments in launching a
new product line. In some respects, integrators are human buffers; they reduce the frequency of
direct interaction among work units that have diverse goals and perspectives. Integrators rarely
have direct authority over the departments they integrate, so they must rely on referent power
and persuasion to manage conflict and accompl ish the work.
Combine jobs. Combiningjobs is both a form of job enrichment and a way to reduce ta~k interde-
pendence. Consider a toa~ter assembly system where one person inserts the heating element, another
add~ the sides, and so o n. By combining these tasks so that each person assembles an entire toaster,
the employees now have a pooled rather than sequential form of ta~k interdependence and the
likelihood of dysfunctional confli ct is reduced.
INCREASING RESOURCES
An obvious way to reduce confl ict caused by resource scarcity is to increase the amount of resources
available. Corporate decision makers might quickly dismiss this solution because of the costs involved.

Chapter Eleven Conflict and Negotiation in the Workplace
EXHIBIT 11.5 Types of Third-Party Intervention
Level of
proce ss
contro l
High
low
low
Level of decision contro l
321
High
However, they need to carefully compare these costs with the costs of dysfunctional confl ict arising
out of resource scarcity.
CLARIFYING RULES AND PROCEDURES
Confl icts that arise from ambiguous rules can be mi nimized by establishing clear rules and procedures.
For example, if two departments are figh ting over the use of a new laboratory, a schedule might be
establ ished which al locates the lab exclusively to each team at certain times of the day or week.
Third-Party Conflict Resolution
Most of this chapter has focused on people directly involved in a conflict, yet many disputes among
employees and departments are resolved with the assistance of a manager. Thir d -par ty conflict
resolution is any attempt by a relatively neutral person to help the parties resolve their differences.
There are three main third-party dispute resolution activities: arbitration, inquisition, and mediation.
These interventions can be classified by their level of control over the process and control over the
decision (see Exhibit 11.5).68
Arbitration. Arbitrators have high control over the final decision, but low control over the
process. Executives engage in this strategy by following previously agreed rules of due process,
listening to arguments from the disputing employees, and making a binding decision. Arbitration
is applied as the final stage of grievances by unionized employees in many countries, but it is
also becoming more common in nonunion confl icts.
Inquisition. Inquisitors control al l discussion about the conflict. Like arbitrators, they have high
decision control because they choose the form of confl ict resolution. However, they also have
high process control because they choose which information to examine and how to examine it,
and they generally decide how the conflict resolution process will be handled.
Mediation. Mediators have high control over the intervention process. In fac t, their main purpose
is to manage the process and context of interaction between the disputing parties. However, the
parties make the final decision about how to resolve their differences. Thus, mediators have little
or no control over the conflict resolution decision.69 Some mediation can involve a mediator
with expert knowledge who shares information and opinion regarding industry standards and
potential outcomes. Many organizations, such as Shell Canada, TO Canada Trust, and Royal
Bank of Canada, have internal ombudspersons to investigate and mediate employment conflicts.

322 Part Three Team Processes
Mediation-arbitration. Often referred to as “med-arb,” this is an alternate hybrid dispute
resolution process. While it promotes an opportunity for the parties to first attempt mediation
with the selected arbitrator facilitating negotiations, it also allows the arbitrator to shift into
an adjudicative mode in order to make a determination based on the parties’ arguments. The
downside of this process is that while parties control the fl ow of information for negotiation
purposes, deciding what they choose to reveal in mediation, parties during arbitration may feel
compelled to answer corollary questions that arise from the previously disclosed information.
A positive a~pect of med-arb is that parties enter the process w ith certainty that the dispute w ill
be resolved either as a settlement in the mediation stage or a~ part of the binding decision made
by the arbitrator. Most collective agreement contracts include a provision that labour disputes
between management and employees wi ll be subject to med-arb.
CHOOSING THE BEST TH IRD-PARTY INTERVENTION STRATEGY
Team leaders, executives, and co-workers regularly intervene in workplace disputes. Sometimes they
adopt a mediator role; other times they serve as arbitrators. Occasionally, they begin w ith one approach
then switch to another. However, research suggests that people in positions of authority (e.g., managers)
usually adopt an inquisitional approach whereby they dominate the intervention process a~ well as
make a binding decision.70
Managers tend to rely on the inquisition approach because it is consistent with the decision-oriented
nature of managerial jobs, gives them control over the conflict process and outcome, and tends to resolve
disputes efficiently. However, inquisition is usually the Jea~t effective third-party confl ict resolution
method in organizational settings71 One problem is that leaders who take an inquisitional role tend to
collect limited information about the problem, so their imposed decision may produce an ineffective
solution to the confli ct. Another problem is that employees often view inquisitional procedures and
outcomes a~ unfair because they have little control over this approach. In particular, the inquisitional
approach potentially violates several practices required to support procedural justice (see Chapter 5).
As a result of these types of concerns, organizations have begun to appreciate the need for managers to
receive negotiation and mediation training to help hone effective workplace conflict management skills.
Which third-party intervention is most appropriate in organizations? The answer partly depends on the
situation, such as the type of dispute, the relationship between the manager and employees, and cultural
values such a~ power distance.72 Also, any third-party approach has more favourable results when it applies
the procedural justice practices described in Chapter 5.73 But generally speaking, for everyday disagree-
ments between two employees, the mediation approach is usually best because it is Jess formal and gives
employees more responsibility for resolving their own disputes. Having a neutral third party helps estab-
lish an appropriate context for conflict resolution. Although not as efficient as other strategies, mediation
potentially offers the highest level of employee satisfaction with the conflict process and outcomes.14 When
employees cannot resolve their differences through mediation, arbitration seems to work best because the
predetermined rules of evidence and other processes create a higher sense of procedural fairness.75 Arbitra-
tion is also preferred where the organization’s goals should take priority over individual goals.
Reso lving Conflict Through Negotiation
It is often said that people negotiate al l the time. We negotiate things like the coordination
of ta~ks on team projects, who will do the dishes, what movie we w ill see, and how to
resolve a disagreement following an argument. As you can see, negotiation is not an
obscure practice reserved for labour and management heads when hammering out a collective agreement.
Negotiation refers to dec is ion-making situations in which two or more interdependent parties attempt
to reach agreement. We negotiate whenever we cannot achieve our objectives single-handedly.76
Negotiation skills are essential because they help us meet our goals, reduce conflict, and bui ld collab-
orative relationships.n Before we describe the strategies and tactics used by successful negotiators, it
is necessary to understand the distinction between distributive and integrative negotiations.

Chapter Eleven Conflict and Negotiation in the Workplace 323
DISTRIBUTIVE VERSUS INTEGRATIVE NEGOTIATIONS
Negotiation situations vary according to the interdependence of people’s goals and the structure of the
situation in which they are going to negotiate. When the goals of two or more people run in completely
opposed directions, this is also known as a zero-sum or distr ibu tive situation . In distributive situations
negotiators are motivated to win the competition, beat the other party, or gain the largest piece of the
fixed resource that they can. To achieve these objectives, negotiators usually employ win-lose strate-
gies and tactics. This approach to negotiation-called distributive bargaining-accepts the fact that
there can o nly be one w inner given the situation and pursues a course of action to be that winner. The
purpose of the negotiation is to claim value-that is, to do whatever is necessary to claim the reward,
gain the lion’s share, or acquire the largest piece possible.78 An example of this type of negotiation is
purchasing a used car when the only negotiable issue is price or buying a used refrigerator at a yard sale.
In contra~t. when parties’ goals are linked so that one person’s goal achievement helps others to achieve
their goals, it is a mutual-gain situation, also known as a non-zero-sum or integrative situation, where
there is a positive correlation between the goal attainments of both parties. If one person is a great
music composer and the other is a great writer of lyrics, they can create a wonderful musical hit
together. The music and words may be good separately, but fantastic together. To the degree that one
person achieves his or her goal, the other’s goals are not necessarily blocked, and may in fact be signifi-
cantly enhanced. The distinction between distributive and integrative negotiations is important because
the strucntre of the interdependence shapes the strategies and tactics a negotiator should employ.
PREPARING TO NEGOTIATE
Experienced negotiators often point to preparation as one of the most important factors contributing to
positive outcomes. Although few people would disagree w ith the benefits of preparation, most have no
idea what it is they should do to prepare. Regardless of the type of negotiation situation, all negotiators
should consider their goals, the best alternative to a negotiated agreement (BATNA), and their limits.
Prepare and Set Goals Always ask yourself what it is you hope to accomplish before beginning a
negotiation. But don’t just focus on quantitative indicators, such a~ the starting salary for a new job. Ask
yourself about your overall interests, or the reasons underlying the positions you might take. For exam-
ple, is salary the only thing that matters when you are starting a new job? Probably not. Looking more
broadly at the situation might show that you want to work in a place that al lows you to use the skills
you have been trained on, to work on tasks that are interesting, or to live close to fam ily. These kinds of
things tap into your interests and values. By considering all these issues in advance, you minimize the
likelihood that you will narrowly focus on just one issue in the negotiation; this is especial ly important
when the addition of other issues could have turned a distributive negotiation into an integrative one.
Know Your BATNA To determine whether the opponent’s offers are favourable, negotiators need to
understand what outcome they might achieve through some other means (such as negotiating with some-
one else). This comparison is called the best alternative to a negotiated agr eement (BATNA). BATNA
estimates your power in the negotiation because it represents the estimated cost of walking away from the
relationship. If others are willing to negotiate with you for the product or service you need, then you have
a high BATNA and considerable power in the negotiation because it would not cost you much to walk
away from the current negotiation. Cla~sic advice for people buying a new home is to “fall in Jove with
two houses, not just one.” Seriously considering a second house means you are less likely to overpay for
the one that is your most preferred option. A common problem in negotiations, however, is that people
tend to overestimate their BATNA; that is, they wrongly believe there are plenty of other ways to achieve
their objective other than through this negotiation or they underestimate other parties’ BATNA.
Know Your Limits In addition to goals and BATNA, you should also consider the point at which
you are indifferent to a negotiated outcome. This point, sometimes called a resistance point, helps you
decide whether or not you should cal l off a negotiation. If you are a seller, your resistance point is the

324 Part Three Team Processes
Debating Point:
IS CREATING VALUE SUCH A GOOD NEGOTIATION
STRATEGY?79
One of the bedrock principles of conflict management and negotiation is that the parties
need to adopt a problem-solving approach. In negotiation, this win-win perspective is called
creating value: discovering ways to achieve mutually satisfactory outcomes for both parties.
Creating value is important for several reasons. First, creating value produces more trust.
Some experts suggest that trust is vital in negotiations, because it enables each side to move
forward with concessions and points of agreement.
Second, creating value involves sharing information, including a better und erstanding of
each other’s needs, so the parties can reach an optimal solution. This solution needs to deter-
mine the relative value that each side assigns to aspects of the issues or items negotiated. By
identifying which items are more important to one party than the other, the resources can be
divided up in a way that gains the most value for both sides.
Experts agree with these and other benefits of creating value, but some also warn that this
scholarly picture isn’t always as rosy in real life. The most potent problem with creating value is
that it requires the parties to share information. This sharing is fine if you know the other party
will reveal any mutual gains and discoveries from the information-sharing process, but this
revelation doesn’t always occur. Instead, Side B might discover something of value that could
give it more of what it wants while making Side A think it has gained at great loss to Side B.
Consider the following true example: Back in the days of the Modei-T, the supplier of
the car’s door handles asked Ford for a 5 percent price increase. Ford initially balked, but
then agreed to the higher price if the supplier would reconfigure the bolt holes in the lids of
the wooden crates used to deliver the door handles. The supplier was both perplexed and
delighted; it didn’t cost anyth ing to make the change, but what was the value to Ford? As it
turns out, Mod ei-T floorboards were made of wood, and Ford staff had figured out how to
mod ify the supplier’s crate lids as floorboa rds.
In this incident, Ford might have told the curious supplier why it was willing to pay this
higher price, but this doesn’t always occur. Sometimes, one side falsely believes the other
side is making a significant sacrifice when, in fact, that other side has received considerable
gains. If these gains had been revealed, the supplier might have asked for even more!
Another concern is that it is sometimes difficult for each party to distinguish creating value
from yielding-that is, giving the other party what they want. In an attempt to show collaboration,
you give one concession here, another there, and so forth. Eventually, your position lacks nego-
tiation options, because most of th e concession space has been given away, while the other
party has given very little. Creating value is inherently in tension with gaining value, because you
must always keep your own interests equal to or greater than the interests of the other party.
least you will accept in exchange for what you are selling. If you are the buyer, your resistance point is
the most you are willing to pay for an item. The reason you should think about this in advance is that too
many people, especially those who don’t even consider their limits, shift the way they view their bottom
line in the face of a competitive offer from a counterpart. It is best to avoid this unless the evidence you
receive clearly indicates that your limits may be unreasonable.
DISTRIBUTIVE STRATEGIES THAT WORK
To succeed in a distributive negotiation, it is helpful to understand the concept of the bargaining zone,
which is defined as the space between each party’s resistance point.80 Exhibit 11.6 displays one possible
bargaining zone situation for a purely wi n-lose situation. As this model illustrates, the parties typically
establish three main negotiating points. The initial offer point is the opening offer to the other party,

Chapter Eleven Conflict and Negotiation in the Workplace
EXHIBIT 11.6 Bargain ing Zone Model of Negotiations
Your
initial
point
Your
target
point
Ba rgaining Zone
Opponent’s
resistance
point
Your
resistance
point
Opponent’s
target
point
Opponenrs
initial
offer
point
325
the target point is the real istic goal or expectation for a final agreement, and the resistance point was
defined above-it’s the least a party is willing to accept or the most they are willing to offer. It is impor-
tant to remember that if the resistance point~ of the two parties overlap, as they do in E xhibit 11.6, then
any deal that falls within the bargaining zone is a good deal because each side has done better than their
resistance point. Therefore, they are both better off.
Most people, however, would prefer to reach a deal closer to their target point than their resistance
point-and this is what we mean when we say that each side will try to claim as much value as possible.
In a purely distributive situation, there are a few strategies that are known to lead to more value claiming.
Manage First Offers and Concessions Do you prefer to make the first offer in a negotiation
or wait to hear what the other side offers first? Most people say they prefer to wait (about 80 percent in
our experience}, and are surprised to learn that if you are prepared and have a realistic sense about the
structure of the bargaining zone, it is best to make the opening offer. The reason stems from research
on the concept of anchoring and adjustment. First offers set “anchors,” which tend to be highly influen-
tial in determi ning subsequent offer and concession-making behaviour. As we explained in Chapter 7,
people tend to adjust their expectations around the initial point (or anchor), so if your initial request is
high, opponents might move more quickly toward their resistance point along the bargaining zone.81 It
may even cause opponents to lower their resistance point.
After the first offer, negotiators need to make concessions.82 Concessions serve at least three impor-
tant purposes: ( 1) they enable the parties to move toward the area of potential agreement, (2) they
symbolize each party’s motivation to bargain in good faith, and (3) they tell the other party of the
relative importance of the negotiation items. However, concessions need to be clearly labelled as such
and should be accompanied by an expectation that the other party wi ll reciprocate. They should also be
offered in installments because people experience more positive emotions from receiving a few smaller
concessions than from one large concession.83 Generally, the best strategy is to be moderately tough
and to concede just enough to communicate sincerity and commitment to resolve the confl ict.
84
Manage Time Negotiators make more concessions as the deadline gets closer.85 This can be a liabil-
ity if you are under time pressure, or it can be an advantage if the other party alone is under time pressure.
Negotiators with more power in the relationship sometimes apply time pressure through an “exploding
offer” whereby they give their opponent a very short time to accept their offer.86 These time-limited
offers are frequently found in consumer sales (“On sale today only!”) and in some job offers. They pro-
duce time pressure, which can motivate the other party to accept the offer and forfeit the opportunity to
explore their BATNA. Another time facto r is that the more time someone has invested in the negotiation,

326 Part Three Team Processes
the more committed they become to ensuring an agreement is reached. This commitment increases the
tendency to make additional concessions not originally planned so that the negotiations do not fail.
INTEGRATIVE STRATEGIES THAT WORK
Many negotiation situations are not zero-sum, winner-take-al l problems. In fac t, most situations that
appear distributive on the surface can be turned into an integrative situation by adding one or more
issues to the mix. This is comforting for people who do not enjoy the competitive nature of distributive
negotiations. The hallmark of success in an integrative situation is the reconciling of differences that
exist between parties. These differences can include things like variation in preferences across the issues,
difference in risk perceptions, and differences in time pressure. Value gets created when the parties agree
to deals in which they exchange high priority issues for low priority issues, and vice versa. For example,
when a manager is trying to hire a new employee they might discover that the most important issues to
the job candidate, in order of importance, are salary, start date, and coverage of moving expenses. If the
manager is in a rush and need~ someone to start right away, they might value start date over both salary
and moving expenses. Therefore, a deal that creates value is one where the employee agrees to start ear-
lier and in exchange for this concession they get a slight bump in salary (or moving expenses coverage).
A critical point here is that this sin1ation is not zero-sum. Both sides could treat it as such, split all the
issues down the middle, and thus leave value sitting on the table. Instead, they are better off to try and
understand the interests underlying their counterpart’s positions and create value by searching for differ-
ences. As this example also shows, the behaviours that lead to success in a distributive situation often
lead to suboptimal deals in an integrative situation. What then, are the strategies required to create value?
Gather Information Information is the cornerstone of effective value creation87 Therefore, skilled
negotiators heed the advice of the late management guru Stephen Covey: “Seek first to understand, then to be
understood.’.ss This means that we should present our case only after spending more time listening closely to
the other party and asking for detail~. It is particularly important to look beyond the opponent’s stated justi-
fications to the unstated motivation for their claims. Probing questions (such as asking “why”) and listening
intently can reveal better solutions for both parties. Nonverbal communication can also convey important
information about the other party’s priorities. Negotiating in teams can also aid the information gathering
process because some team members will hear information that others have ignored. Gleaning insight about
the other party’s interest can facilitate more creative problem solving and help you reframe the issues.
Discover Priorities through Offers and Concessions Some types of offers and concessions are
better than others at creating value. The key objective is to discover and signal which issues are more and Jess
important to each side. Suppose that you have been a~ked to “second” (temporarily transfer) some of your
best staff to projects in another division, wherea~ you need these people on site for other a~signment~ and to
coach junior staff. Through problem solving negotiation, you discover that the other division doesn’t need
those staff at their site; rather the division head mainly needs some guarantee that these people will be avail-
able when required. The result is that your division keeps the staff (important to you) while the other division
has some guarantee these people will be available at specific times for their projects (important to them).
One way to figure out the relative importance of the issues to each party is to make multi-issue
offers rather than discussing one issue at a time.89 You might offer a client a specific price, delivery
date, and guarantee period, for example. The other party’s counteroffer to multiple items signals which
are more and which are less important to them. Your subsequent concessions similarly signal how
important each issue is to your group.
Build the Relationship Trust is critical for the problem solving style of conflict handl ing as
well as in the value creation objective of negotiations.90 How do you build trust in negotiations? One
approach is to discover common backgrounds and interests, such as places you have lived, favour ite
hobbies and sports teams, and so forth. If there are substantial differences between the parties (age,
gender, etc.), consider having team members that more closely match the backgrounds of the other
party. First impressions are also important. Recall from earlier chapters in this book that people attach

Chapter Eleven Conflict and Negotiation in the Workplace 327
emotions to incoming stimuli in a fraction of a second. Therefore, you need to be sensitive to your
nonverbal cues, appearance, and initial statements.
Signalling that we are trustworthy also helps strengthen the relationship. We can do this by dem-
onstrating that we are reliable and will keep our promises as well a~ by identifying shared goals and
values. Trustworthiness also increases by developing a shared understanding of the negotiation pro-
cess, including its norms and expectations about speed and timing.91 Finally, relationship building
demands emotional intell igence92 This includes managing the emotions you display to the other party,
particularly avoiding an image of superiority, aggressiveness, or insensitivity. Emotional intelligence
also involves managing the other party ‘s emotions. We can use well-placed flattery, humour, and other
methods to keep everyone in a good mood and to break unnecessary tension.93
EXPERT VERSUS AVERAGE NEGOTIATORS
Are there certain behaviours that expert negotiators exhibit differently than other people? In a classic
study conducted in the U.K., researchers selected a group of more than 50 expert negotiators and com-
pared them to a similar-sized group of “average” negotiators. After watching both groups whi le they
negotiated actual deals, it was clear that experts do in fact behave differently from average negotiators.
A surprise finding was that experts do not actually spend more time preparing than most other people;
instead, they differed substantial ly on how they planned and what they planned for. Expert negotiators
spent a great deal more energy considering the things we mentioned earlier: goals, their BATNA, and
their resistance point. Average negotiators rarely did so, and even if they did, the level of detail for each
element was cursory at best.94
The researchers also examined differences between the two groups in terms of the face-to-face
interactions while negotiating. T hese differences are summarized in Exhibit 11.7. What are the things
experts do less ? First, expert negotiators tend to use fewer irritators, which are words or phrases that
have no persua~ive value and tend to irritate one’s counterpart. One of the most frequen tly used irrita-
tors is the phrase “generous offer” to describe one’s proposal. Second, expert negotiators make fewer
counterproposals than average negotiators-instead, they spent more time clarifying and understand-
ing a proposal before putting another offer on the table. Third, an expert is less likely to get into a
defend-and-attack spiral, whereby both sides use heated or emotion-laden comments in a back-and-
forth manner. An average negotiator is over three times more likely to engage in such behaviour. And
finally, experts spend much more face- to-face time ensur ing that they understand their counterpart’s
perspective. In doing so, they will use phrases such as, “So do I understand .. . ” and “If I understand
EXHIBIT 11.7: Differences between Expert and Average Negotiators
~ ………. Eqleft Nfei!Cieti 1 A-. Nfei!Cieti 1
Use of irritators 2.3 per hour I 0.8 per hour
“This is a generous offer. . ••
“\Ve’re willing to be reasonable . . ••
Use of counte rproposals 1.7 per hour 3.1 per hour
Defend/auack spirals I . 9% of comment’i 6.3% of commenL•
“You can’t blame us . . ”
” It’s not our fault . . . ”
Testing understanding and summarizing 17.2% of all behaviours 8.3% of all behaviours
“So do I under.aand . . . ”
” “If I understand you correctly . ..
Asking questions 21.3% of all behaviours 9.6% of all behaviours
Giving information about internal thought’i {feelings . concerns) 12.1 % of all behaviours 7.8% of all behaviours
Number of rea’ions to support an argument I .8 on average 3.0 on aver.tge

328 Part Three Team Processes
you correctly . . . ” . These behaviours send a signal to a counterpart that they are bei ng understood and
listened to, both of which increase trust.
There are also behaviours that experts tend to exhibit more than average negotiators. The research-
ers discovered that experts ask more than twice as many questions. This makes sense because informa-
tion gathering is central to value creation, and there is plenty of research supporti ng the argument that
naive negotiators tend to approach most negotiations with a distributive mentality (even when the situ-
ation is integrative). Expert negotiators were also more likely to use communication patterns in which
they gave clues about how they were thinking about alternatives. For example, a skilled negotiator
might say something like, ”!’ m uncertain how to react to what you’ve just said. I have some concerns
about the meaning of two aspects of the offer. Can you help me resolve this?”
Fi nally, imagine a situation where your counterpart has made a claim or an offer and you intend to
respond w ith reasons against their argument. How many reasons should you cite? Most people think
that more is better here-and that is consistent w ith the trend between experts and average negotiators.
In fact, experts tend to focus on only one or two counterarguments rather than presenting a laundry list.
They do so because the greater the number of reasons, the more likely their overall argument will be
diluted. So, keep it short, focused, and simple. You’ ll be more effective that way.
Chapter Summary
LO 1 Defin e conflict an d debate its positive and n ega tive consequences in tb e wor k place.
Conflict is the process in which one party perceives that its interests are being opposed or negatively
affected by another party. T he earliest view of conflict wa~ that it was dysfunctional for organiza-
tions. Even today, we recognize that cont1ict sometimes or to some degree consumes productive time, increa~es
stress and job d issatisfaction, discourages coordination and resource s haring, undermines customer service, fuels
organizational politics, and erodes team cohesion. But conflict can also be beneficial. It is known to motivate more
active thinking about problems and possible solutions, encourage more active monitoring of the organization in its
environment, and improve team cohesion (where the conflict source is external).
L02 Distinguis h ta sk from rela tionship conflict and d escribe three strategies to minimize rela tion –
ship conflict during task confli ct episod es.
Ta~k conflict occurs when people foc us their discussion around the issue while showing respect for
people with other points of view. Relationship confl ict exists when people view each other, rather than the issue,
as the source o f conflict. It is apparent when people attack each other’s credibility and display aggression toward
the other party. It is difficult to separate ta~k from relationship conf lict. However, three strategies or conditions
that minimize re lationship conf lict during constructive debate are: (I ) emotional intelligence of the participants,
(2) team cohesion, and (3) supportive tean1 norms.
L03 Diagram the conflict p rocess m od el and describe six structural sources of co nflict in
organizations.
The conflict process model begins with the s ix structural sources of conflict: incompatible goals,
differentiation (different values and belie fs), interdependence, scarce resources, ambiguous rules, and communi-
cation problems. T hese sources lead one or more parties to perceive a conflic t and to experience confl ict emotions.
This, in turn, produces manifest conflict, such as behaviours toward the other side. The conflict process often
escalates through a series of episodes.
L04 Ou tline the fi ve conflict ha ndling styles an d discuss the circums ta n ces in which each would
be m ost a p propriate.
There are five known conflict handling styles: problem solving, forc ing, avoiding, yie lding, and
compromising. People who use problem solving have a win-win orientation. Others, particularly forcing , assume
a win-lose orientation. In general , people gravitate toward one or two preferred conflict handling styles that match
their personality, personal and cultural values, and pa~t experience.

Chapter Eleven Conflict and Negotiation in t he Workplace 329
The best style depends on the s ituation. Problem solving is best when interests are not perfectly opposing, the
parties trust each other, and the issues are complex. Forcing works best when you strongly bel ieve in your posi-
tion, the dispute requires quick action, and the other party would take advantage of a cooperative style. Avoidance
is preferred when the conflict has become emotional or the cost of resolution is higher than its benefits. Yielding
works well when the other party has substantially more power, the issue is less important to you, and you are not
confident in the logical soundness of your position. Compromising is preferred when the parties have equal power,
they are under time pressure, and they Jack trust.
LOS Ap ply the six s tructural ap proaches to conflict managem en t a nd d escr i be th e three types of
third -party dispu te resol ution.
S tructural approaches to conflict management include emphasizing s uperordinate goals, reducing
differentiation, improving communication and understanding, reducing interdependence, increasing resources,
and clarifying rules and procedures.
Third-party conflict resolution is any attempt by a relatively neutral person to help the parties resolve their differ-
ences. The three main forms of third-party dispute resolution are mediation, arbitration, and inquisition. Managers tend
to use an inquisition approach, although mediation and arbitration are more appropriate, depending on d1e situation.
LOG Describe dist ributive and integrative negotiations a nd outline s trategies s killed n egotiators
use to claim value and create value.
Negotiation refers to decision-making s ituations in which two or more interdependent parties
attempt to reach agreement. When negotiator goals run in opposite directions they f ind themselves in a distributive
s ituation, and when their goals are not fully incompatible they are in an integrative s ituation. Effective distributive
strategies include making ambitious opening offers and managing the concession-making process. ln an integra-
tive situation, value can be created by gathering information, sharing information, a~king questions to understand
a counterpart’s perspective, and building the relationship.
Key Terms
best alternative to a negotia ted agreement (BAT NA)
conflict
distributive s itua tion
integ rative situa tion
negotiation
relationship conflict
superordinate goals
task conflict
third -party co nfli ct resolution
win- lose orienta tion
win- win orienta tion
Critical Thinking Questions
I. Distinguish task conflict from relationshi p conf lict and explain how to apply the former with minimal levels
of the latter.
2. The CEO of Creative Toys Inc. read about cooperation in Japanese companies and vowed to bring this same
philosophy to his company. His goal is to avoid all conflict, so that employees will work cooperatively and be
happier at Creative Toys. Discuss the merits and limitations o f the CEO’s pol icy.
3. Cont1ict an10ng managers emerged soon after a French company acquired a Swedish firm. T he Swedes
perceived the French management a~ hierarchical and arrogant, whereas the French thought the Swedes were
naive, cautious, and Jacking an achievement orientation. Identify the source(s) of cont1ict that best explain
this cont1ict, and describe ways to reduce dysfunctional conflict in this situation.
4. You have just been transferred fro m one unit of the organization to another unit. On the last day of work in
the firs t unit, your current manager calls your new manager informing her that you are a tough candidate
and that you possess an attitude. The would-be manager calls you, providing you with the information, and
expresses apprehension. How would you resolve this conflict?
5. You are a special assistant to the commander-in-chief of a peacekeeping mission to a war-torn part of the
world. The unit consists o f a few thousand peacekeeping troops fro m the Canada, France, India, and four
other countries. The troops will work together for approximately one year. What strategies would you recom-
mend to improve mutual understanding and minimize conflict among these troops?

330 Part Three Team Processes
6. The chief operating officer (COO) has noticed that production e mployees in the company’s Mex ican manu-
fac turing operations are unhappy with some of the production engineering decis ions made by engineers in
the company’s headquarters in Toronto. At the same time, the engineers complain that production employees
aren’t applying their engineering specifications correctly and don’t understand why those specifications were
put in place. T he COO believes that the best way to resolve this conflict is to have a frank and open discus-
s ion between some of the engineers and employees representing the Mexican production crew. T his open
dialogue approach worked well recently among managers in the company’s Toronto headquarters, so it should
work equally well between the engineers and production staff. Based on your knowledge of communication
and mutual understanding as a way to resolve conflict, discuss the COO ‘s proposal.
7 . Describe the inquisitional approach to resolve disputes between employees or work units. Discuss its appro-
pr iateness in organizational settings, including the s uitability of its use w ith a mul tigenerational workforce.
8. Jane has just been appointed as purchasing manager of Tacoma Technologies Inc. T he previous purchasing
manager, who recently retired , was known fo r his “winner-take-all” approach to suppliers. He continually
fo ught for more discounts and was skeptical about any special deals that s uppliers would propose. A few
suppliers refused to do bus iness with Tacoma Technologies, but senior management was confident that the
fo rmer purchas ing manager’s approach minimized the company’s costs. Jane wants to try a more collabora-
tive approach fo r working with suppliers. Will her approach work? How should she adopt a more collabora-
tive approach in future negotiations with suppliers?
9 . You are a new program manager with responsibility for significant funding and external relations, and
because o f downsizing issues in your area, you have lost two valuable employees (actually 1.5, because the
second person is on half time now: s he used to be your manager and you trained under her). You have been in
the new job approx imately two weeks: however, you have been in the unit for more than a year and have seen
how systems are managed from your manager’s perspective. You now have her job. Out of the blue, a senior
person (not in your area) comes to you and says he is taking most of your s pace. He doesn’t ask your permis-
s ion, nor does he seem the least bit concerned with your response. What do you do?
Case Study:
CAR WARS AT WOLFSBURG
by Steven L. McShane, Curtin University (Australia) and University of’ Victoria (Canad a)
Over the past 15 years, Volkswagen Group (VW) acquired several fie fdoms- Audi, Lan1borghini, Bentley, Bugatti,
S koda, SEAT – that jealously guarded their brand and continuously rebelled against sharing knowledge. One mem-
ber of VW’s s upervisory board (the German equivalent of a board of directors) commented that managing the
company is “like trying to ride a chariot with fo ur or five horses, each of which pulls in a different direction.”
Then Porsche AG e ntered the fray. The luxury sports car company, which rel ies on VW for some of its produc-
tion work, began acquiring stock in VW and eventually achieved a controlling interest. Porsche CEO Wendel in
Wiedeking was aware of VW’s internal rivalries. “If you mix the Porsche guys with the Audi guys and the VW
guys you w ill have trouble,” says Wiedeking. “Each is proud to belong to his own company.”
Yet Wiedeking stirred up a different type of confl ict as Porsche tightened its grip over VW’s supervisory
board. T hrough an unswerving drive fo r efficient production and astute marketing, Wiedeking and his executive
team had transformed Porsche into the world’s most profitable and prestigious car company. Wiedeking wanted to
apply those practices at VW by closing down inefficient operations and money-losing car lines.
“Wiedeking is a Porsche CEO from another corporate culture,” says German auto analyst Christoph Stoermer.
” He’s out to maxi mize profits by cutting costs. And he s nubbed everyone, telling off VW management, interfer-
ing with their way of doing business.” Ferdinand Dudenhoeffer, director of Germany’s Center fo r Automotive
Research (CAR), agrees. ” Porsche is very successful in being Jean and profitable. It’s not going to be harmonious .”
Par ticularly offended by Wiedeking’s plans was VW chair man Ferdinand Piech, who had a differen t vis ion of
Europe’s largest automaker. Piech, whose grandfather developed the VW Beetle, placed more emphasis on spec-
tacular engineering than exceptional profit~ . For example, he s upported the money-losing Bugatti brand, which
VW acquired several years ago when Piech was CEO. More recently, Piech chan1pioned the Phaeton, VW’s luxury
car that broke new ground in innovation (it boastsiOO patents) but has not been a commercial success.
Wiedeking, on the other hand, believed that VW could be more profitable if it stopped produc ing the Phaeton
and Bugatti. “P iech sees his vision endangered by Wiedeking,” says Dudenhoeffe r. “Wiedeking said that there are

Chapter Eleven Conflict and Negotiation in t he Workplace 331
no holy cows at VW, no more Phaetons, no more Bugattis.” T hese ideas made Piech’s blood boil. “Anyone who
says that VW should pull the Phaeton doesn’ t understand the world,” grumbled Piech, explaining that luxury cars
represent the only segment with double-digit growth .
There is an unusual twist in the confl ict involving Piech, W iedeking, and Porsche. Piech is a member of the
Porsche fam ily. He is a cousin of Porsche chairman Wolfgang Porsche and owns a 10 percent share o f the Porsche
company. Piech began his career at Porsche and became its chie f engineer before moving to Audi and later VW
Furthermore, in what many consider a blatant conflict o f interest, Piech supported Porsche’s initial investment in
VW But when Piech’s and Wiedeking’s plans ended up on a collision course, that initial fr iendly investment in the
partnership turned into all-out corporate war. “There was always a cea~efire between Piech and the Porsches, but
now it’s war,” claims auto analyst Ferdinand Dudenhoeffer. “This is like ‘ Dallas’ and ‘ Dynasty’ in Wolfsburg (the
c ity where VW has its headquarters). No company in the world is so self-absorbed with its problems.”
Postscript Ironically, Porsche CEO Wendelin Wiedeking’s plans backfired. Porsche had borrowed heavily to
acquire its controlling interest in VW while maintaining its own business operations. Some estimate that Porsche
had loans of more than US$14 bill ion. Furthermore, VW shares increased substantially during the takeover process,
so Porsche owed massive taxes for the increased “paper profits” of the shares it owned. The timing couldn’t have
been worse. The great financi al crisis hit the world, which cut Porsche sales and dried up funds, making it difficult
for Porsche to pay interest on its loans and to renew loans that were coming due. In effect, it was on the brink of
bankruptcy. In addition, a unique Jaw allowed one German state (Lower S axony), which had a 20 percent ownership
in VW, to veto any important decisions in the company, including Porsche’s control of VW.
Ul timately, Porsche agreed to give up its controlling interest in VW. Instead, it sold some of its business to VW
and the Qatar government and, ultimately, agreed to be acquired by VW (rather than vice versa). Wiedeking lost
his j ob as Porsche CEO, whereas Ferdinand Piech (as chairman of VW’s supervisory board) would effectively be
head of both automakers. Complicated legal and financ ial matters delayed the complete acquisition, but VW did
complete its takeover of Porsche.
Discuss ion Questions
I. Identify and discuss the sources of conflict between Porsche and Volkswagen executives.
2. Describe the cont1ict handling styles used by Wendel in Wiedeking and Ferdinand Piech. Were they appropri-
ate in this s ituation?
The facts of this case were pieced together by Steven L. McShane fro m the following sources: M. Landler. “Twist in the Intrigue
at VW May Help Chief Keep His Job.” New Yor* Times. 2 I April 2006. 5: R. Hutton. ” Porsche Ready to Swallow VW,” Autocar.
7 November 2007: “German Carmaker Family Feud Plays out in VW Boardroom.” Dewsche \Velie. I 8 September 2008;
D. Hawranek. ”Clans. Executives Sharpen Knives Backstage at Porsche and VW,” Spiegel Online, I I March 2008: N.D.
Schwartz. “Porsche Takes a Controlling Interest in VW.” New York Times. I 7 September 2008: D. Hawranek. ”Gennan Cannaker
Narrowly Averts Bankruptcy.” Spiegel Online, 25 May 2009: C. Dougherty, “Porsche Chief Pays Full Price for his Overreach.”
/11/emarional Hemld Tribune. 24 July. 2009. I: BryanL Adam. “VW-Porsche merger ends years of wrangle.,.” Financial Time.’
{London). 5 July. 2012.
Class Exercise:
THE CONTINGENCIES OF CONFLICT
HANDLING
By Gerard A. Callanan a nd David F. Perri, Wes t Chester Uni ver sity of Pennsylvania
Purpose This exercise is designed to help you understand the contingencies of applying conflict handling
styles in organ izational settings.
Instructions
Srep I : Partic ipants will read each of the fi ve scenarios presented below and select the most appropriate
response from among the fi ve alternatives. Each scenario has a correct response for that situation.
Srep 2 (Oprional): T he instructor may ask each student to complete the Conflic t Handling Scale self-assessment
or a similar instrument. This instrument will provide an estimate of your preferred cont1ict handling style.

33 2 Part Three Team Processes
Srep 3: As a class, participants g ive their feed back on the responses to each o f the scenarios, with the instructor
guiding discussion on the contextual factors embodied in each scenario. For each scenario, the class should identify
the response selected by the majority. In addi tion, participants will discuss how they decided on the choices they
made and the contextual factors they took into account in making their selections.
Srep 4: Student~ will compare their responses to the five scenarios with their results from the conflict handling self-
a~sessment. Discussion will focus on d1e extent to which each person’s preferred conflict handling style influenced
their alternatives in this activity, and the implications of this style preference for managing conflict in organizations.
SCENARI0#1
Setting You are a manager of a division in the accounting department of a large Canadian bank. Nine exempt-
level analysts and six nonexempt clerical staff report to you. Recently, one of your analyst~, Jane W ilson, ha~
sought the bank’s approval for tuition reimbursement for the cost of an evening MBA program special izing in
organizational behaviour. The bank normally encourages e mployees to seek advanced degrees on a part-time ba~is.
Indeed, through your encouragement, nearly all of the members of your staff are pursuing additional schoolwork.
You consult the bank’s pol icy manual and discover that two approvals are necessary for reimbursement-yours
and that of the manager of training and development, Kathy Gordon. Further, the manual states that approval for
reimbursement will only be granted if the coursework is “reasonably job related.” Ba~ed on your review of the
matter, you decide to approve Jane’s request for reimbursement. However, Kathy Gordon reject~ it outright by
claiming that coursework in organ izational behaviour is not re lated to an accounting analyst position. S he states
that the bank will only reimburse the analyst for a degree in either accounting or finance . In your opinion, however,
the interpersonal skills and insights to be gained from a degree in organizational behaviour are job related and can
also benefit the e mployee in future a~signment~. The analyst job requires interaction with a variety of individuals
at different levels in the organization, and it is important that interpersonal and communication skills be strong.
After further discussion it becomes clear that you and Kathy Gordon have opposite views on the matter. Since both
of you are at the same organization level and have equal status, it appears that you are at an impasse. Although the goal
of reimbursement is important, you are faced with other pressing demands on your time. In addition, the conflict ha~
diverted the attention of your work group away from its primary responsibilities. Because the school term is about to
begin, it is essential that you and Kathy Gordon reach a timely agreement to enable Jane to pursue her coursework.
Action Alternatives for Scenario #1 Please indicate your firs t ( I) and second (2) choices from an10ng the
following alternatives by writing the appropr iate number in the space provided.
Action Alternative Rank ing ( I st & 2nd)
I. You go aJong with Kathy Gordon’s view and advise Jane \Vilson to select either accounting or finance as a major for her MBA.
2. You d ecid e to w ithdr.tw from the situation completely and te lJ Jane to work it out w ith Kathy Gordon on her own.
3. You d ecid e to take the matter to those in higher management levels and argue fo rcefully for you r point of view. You do
everything in you r power to ensure that a decision wi l1 be made in your favour.
4 . You d ecide to meet Kathy Gordon halfway in order to reach an ag reement. Yo u ad v ise Jane to pursue he r MB A in
~ccounting or f inance, b ut also recommend she minor in organizational behaviour by taking e lectives in that field.
5. You d ecid e to work more closely with Kathy Gordon by attempting to get a clear as well as flexible policy w ritten that
reflects both of your v iews. Of course, this will require a significant amoun t of your time.
SCENARI0#2
Setting You are the vice-president of a relatively large division (80 employees) in a medium -s ized consumer
products company. Due to the recent turnover of minority staff, your division ha~ fallen behind in meeting the
company’s goal for Equal Employment Opportunity (EEO) hiring. Because o f a scarcity of qualified minority
candidates, it appears that you may fall further behind in achieving stated EEO goals.
A lthough you are aware of the problem, you believe that the low level of minority hiring is due to increa~ed
attrition in minority staff as well as the Jack of viable replacement candidates. However, the EEO officer believes
that your hiring criteria are too stringent, resulting in the rejection of minority candidates w ith the basic qualifica-
tions to do the j ob. You support the goals and principles of EEO; however, you are concerned that the hiring of
Jess-qualified candidates wi ll weaken the performance of your divis ion. The EEO officer believes that your failure
to hire minority e mployees is dan1aging to the company in the short term because corporate goals wi ll not be met,
and in the long term because it will restrict the pool of minority candidates available for upward mobil ity. Both of
you regard your concerns a~ important. Further, you recognize that both of you have the company’s best interests
in mind and that you have a mutual interest in resolving the conflic t.
Action Alternatives for Scenario # 2 Please indicate your ftrs t ( I) and second (2) choices from an10ng
the following alternatives by writing the appropriate number in the s pace provided.

Chapter Eleven Conflict and Negotiation in t he Workplace 333
–Action Ahernative Ranking ( 1s t & 2nd)
I.
2.
3.
4.
5.
You conclude tha t the w ho le problem is too complex an issue fo r you to handle right now. You put it on the “back burner ..
and decide to reconsider the problem at a later date.
Yo u believe that your view o utweighs the perspective of the EEO officer. Yo u decide to argue your position more vigorously
and hope that your stance will sway the EEO officer to agree with your view.
You decide to accept the EEO officer’s view. You agree to use less s tringent selection criteria and thereby hire mo re mino rity
employees.
You give in to the EEO officer somewhat by agreeing to rela..’\ your standards a little biL This ·would allow slightly more minority
hiring (but not enough to satisfy the EEO goal) and could cause a small reduction in the overall performance of your eli vision.
You try and reach a consensus tha t add resses each of your concerns . You agree to work harder at hiring more minority
applicants and request that the EEO officer agree to help fi nd the most qualified minority candidates available.
SCENARI0#3
Setting You are the manager in charge of the financ ial reporting section of a large insurance company. It
is the responsibil ity o f your group to make periodic written and oral reports to senior management regarding
the company’s fin ancial perfor mance. T he company’s senior management has come to rely on your quick and
accurate dissemination of financial data as a way to make vital decisions in a timely fashion . This has given you
a relatively high degree o f organizational influence. You rely on various operating depar tments to supply you
with fin ancial infor mation according to a pre-established reporting schedule.
I
In two days, you must make your quarterly presentation to the company’s board of directors. However, the
claims department has failed to supply you w ith several key pieces of information that are critical to your pre-
sentation . You check the reporting schedule and realize that you should have had the information two days ago.
When you call Bill Jones, the claims department manager, he informs you that he cannot possibly have the data to
you within the next two days. He states that other pressing work has a higher priority. Although you explain the
critical need for this data, he is unwill ing to change his position. You believe that your presentation is vital to the
company’s wel fare and explain this to Bill Jones. Although Bill has less status than you, he has been known to
take advantage of individuals who are unwilling or unable to push their point of view. With your presentation less
than two days away, it is critical that you receive information from the claims department within the next 24 hours.
Action Alternatives for Scenario #3 Please indicate your firs t ( I) and second (2) choices from an10ng
the following alternatives by writing the appropriate number in the space provided .
r–
Action Ahernative Ranking ( 1s t & 2nd)
I.
2.
3.
4.
15.
Accept the explanation fro m Bill l one.’ and try to get by wi thout the figures by using your best judgment as to what they
would be.
Tell Bill Jo nes that unless yo u have the data from his department on your desk by tomor row mo rning. yo u will be forced to
go over his head to compel him to give you the numbe rs.
Meet Bill Jones halfway by ag reeing to receive part of the needed figures and using your own judgment on the o the rs.
T ry to get your presentation postponed until a later date. if possible.
Forget abou t the short•te rm need fo r info rmation and try to achieve a longer· te rm solution. s uch as adj usting the re po rting
schedule to better acco mmoda te your mut-ual needs.
SCENARI0#4
Setting You are the production manager of a medium-sized building products company. You control
a production line that runs on a three-shift basis. Recently, Ted Smith, the materials handling manager,
requested you to accept a different packaging of the raw materials for the production process than what has
been customary. He states that new machinery he has installed makes it much easier to provide the material
in 45-kilogranl sacks instead of the 22-kilogram bags that you currently receive. Ted further explains that the
provision of the material in the 22-kilogram bags would put an immense strain on his operation, and he therefore
has a critical need for you to accept the change. You know that accepting materials in the new packaging will
cause some minor disruption in your production process, but should not cause long-term problems fo r any of
the three shifts. However, you are a little annoyed by the proposed change because Ted did not consult with you
before he installed the new equipment. In the past, you and he have been open in your communication. You do
not think that this fai lure to consult you represents a change in your re lationship.
Because you work closely with Ted, it is essential that you maintain the harmonious and stable working rela-
tionship that you have built over the pa~t few years. In addition, you may need some help from him in the future,
s ince you already know that your operation wi ll have special material require ments in about two months. You also
know that Ted has inf luence at higher levels of the organization.

334 Part Three Team Processes
Action Alternatives f or Scen ario # 4 Please indicate your first ( 1) and second (2) choices from among
the following alternatives by writing the appropriate number in the space provided .
Action Alternative Ranking (I st & 2nd)
I. Agree to accept the raw mate rial in the different fonnal.
1- . . . . . . . –
2. Refuse to accept the matena1 m the new fonnat because Jt would cause a dJsr upL1on m your operat:ton.
3.
4.
5.
Propose a solution where you accept material in the new fonnat d uri ng the firs t shi ft but not d uri ng the second and third.
Tell Ted Smith that you do not wish to dea1 with the issue at this time. but that you will consider his request and get back to
him at a later date.
You decide to teJI Ted Smith of your concern regarding his failure to consult with you before installing new equipment. You
inform him that you wish to find longer term solutions to the confl ict between you .
SCENARIO # S
Setti n g You are e mployed as supervisor of the compensation and benefits section in the human resources
department o f a medium-sized pharmaceutical company. Your staff of three clerks is responsible for maintaining
contacts with the various benefits providers and answering related questions from the company’s e mployees. Your
section shares support staff, word processing, and copier resources with the training and development section of
the department. Recently, a disagreement has arisen between you and Beth Hanson, the training and development
supervisor, over when the support staff should take their lunches. Beth would like the support staff to take their
lunches an hour later to coincide with the time most of her people go to lunch. You know that the s upport staff
does not want to change their lunch times. Further, the c urrent time is more convenient for your staff.
At this time, you are hard-pressed to deal with the situation. You have an important meeting w ith the provider
of dental insurance in two days. It is critical that you are well prepared for this meeting, and these other tasks are
a distraction.
Actio n Alterna t ives for Scena rio #5 Please indicate your first (I) and second (2) choices fro m among
the following alternatives by writing the appropriate number in the space provided .
Action Alternative Ranking ( 1st & 2nd)
I. Take some time over the nex t day and propose a solution whereby the s upport staff takes thei r lunch at the earlier ti me three
days a week and at the later time two days a week.
2. Te ll Beth Hanson you will deal with the matter in a few days, after yo u have addressed the more pressing issues.
3. Let Beth Hanson have her way by ag reeing to a later lunch hour for the support staff.
4. A at out tell Beth Hanson that you will not agree to a change in the s upport st affs lunchtime.
5. Devote more time to the issue. Attempt to achieve a broad-ba…;ed consensus with Beth Hanson that meel’i her need’i as well as
yours and those of the support s taff.
Source: G. A. Callanan and D. F. Perri. ”Teaching Conflict Management Using a Scenario-Based A pproach,” Journal of Education for Business. 81 (Jan/
Feb2006), pp. 131- 139.
Self-Assessments for Chapter 11
SELF-ASSESSMENT NAME
What is your preferred conflict handling style?
DESCRIPTION
There are five main conflict· handling styles tha t people use in
response to conflict s ituations. \Ve are us ually most comfortable
using one or two of these styles based on our personality. values.
sel f-co ncept. and past experience. This asse..~sment helps yo u see
w hat a pproach you tend to take when dealing with conflict.

CHAPTER 12
Leadership in Organizational
Settings
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
LO 1 Define leadersh ip and sha red leadership.
L02 Describe the fou r e lements of tra nsformationa l leadership and explain why they are important for
organ izational change.
L03 Compa re manageria l leadership w it h transformational leadership, and describe the features of
task-o riented, people-oriented, and servant leadership.
L04 Discuss the elements of path-goal theory, Fiedler’s contin gency mode l, and leadership subst itutes.
LOS Describe the two components of t he im plicit leadership perspective.
LOG Identify eight persona l attributes associated w ith effective leaders and describ e authentic leadersh ip.
L07 Discuss cultura l and gender similarities and d ifferences in leadersh ip.
335

336 Part Three Team Processes
Toronto startup company Dayforce had developed world-class workforce management software
(employee scheduling, forecasting, etc.) but lacked an established market presence. Founder and
CEO David Ossip saw an opportunity to partner with Minneapolis-based Ceridian, a well-established
global organization in payroll systems that needed new products and services. Cerid ian acquired
Dayforce one year after the partnership began, and Ossip was installed as CEO of the overall
company less than one year after the acquisition.
When Ossip first arrived at Ceridian’s offices, he realized the company needed a leader-led
transformation. “My take-home after a hard look at Ceridian was that the organization had to reinvent
its culture in order to drive proper employee engagement, in turn improving our customer engagement
scores and market share,” Ossip recalls. Employees weren’t enthusiastic about Ceridian’s future and
lacked trust in its senior managers, most of whom were sequestered far away on the executive floor.
Ossip developed a more appealing vision for Ceridian’s employees. ” Our worldwide focus
became something more than just paying people correctly,” Ossip explains. “At Ceridian, our brand
promise is ‘Makes Work Life Better’-we believe that our solutions and our people make work life
better for employees everywhere, in any role within their organization.” Ossip travelled to Ceridian’s
offices worldwide to discuss and demonstrate his personal commitment to the company’s new
vision and values. “Essentially it came down to a lot of communication, a lot of town halls, and a lot
of interaction with everyone inside Ceridian, and that’s what I did.”
Ossip disbanded the executive floor and introduced a coaching program to help managers
communicate the company’s vision more effectively to employees. A new team of executives was
carefully selected who believed in the company’s vision and values. As a result, employees gained
trust in management because management’s words and actions matched the firm’s vision and values.
“When employees are able to see their leadership live by the values that guide them, it helps to
establish a sense of organizational trust and credibility,” says Ossip, who was recently recognized as
the leader with the highest employee ratings on Glassdoor. This view is echoed by Ceridian employees.
“Having worked in other companies prior to Ceridian, I can only appreciate the leadership team that
is consistently walking the talk, seeking feedback and doing something w ith the feedback,” says a
Ceridian employee in Montreal. 1
The transformation of Ceridian illustrates how David Ossip and other leaders make a difference in an organization’s survival and success. This opening case study also highlights specific leadership
topics, such as vision, role modelling, and the leader’s personal attributes of leadership integrity and
self-concept. Leadership is one of the most researched and discussed topics in the field of organiza-
tional behaviour2 Google returns a whopping 533 mi llion web pages where leadership is mentioned.
Google Scholar lists 287,000 journal articles and books with leader or leadership in the title. Amazon
lists more than 3 1,000 books in the English language with leadership in the title. The number of books
or documents with the words leader or leadership added to the U.S. Library of Congress catalogue over
the past decade was four times more than two decades earl ier and 48 times more than during the first
decade of the 1900s.
The topic of leadership receives so much attention because we are captivated by the capacity of
some individuals to influence and motivate beyond normal expectations a large collective of people.
This chapter explores leadership from four perspectives: transformational, managerial, implicit, and
personal attributes] Although some of these perspectives are currently more popular than others, each
helps us to more fully understand the complex issue of leadership. The final section of this chapter
looks at cross-cultural and gender issues in organizational leadership. But first, we learn about the
meaning of leadership as well a~ shared leadership.
What Is Leadership?
L01 Several years ago, dozens of leadership experts from around the world reached a con-
sensus that leadership is about influencing, motivating, and enabling others to con-
tribute toward the effectiveness and success of the organ izations of which they are

Chapter Twelve Leadership in Organizational Settings 337
members.4 This definition has two key components. First, leaders motivate others through persua-
sion and other influence tactics. They use their communication skills, rewards, and other resources
to energize the collective toward the achievement of challenging objectives. Second, leaders are
enablers. They allocate resources, alter work relationships, mi nimi ze external d isruptions, and
establish other work env ironment changes that make it easier for employees to ach ieve organiza-
tional objectives.
SHARED LEADERSH IP
Organizational behaviour experts have long argued that leadership is not about specific positions in the
organizational hierarchy. Formal leaders are responsible for ” leading” others, but companies are far
more effective when everyone assumes leadership responsibi lities in various ways and at various times.
This emerging view, called shared leadershi p, is based on the idea that leadership is a role, not a posi-
tion51t doesn’t belong to just one individual in the work unit. Instead, employees lead each other as the
occasion arises. Shared leadership exists when employees champion the introduction of new technolo-
gies and products6 It also exists when employees engage in organizational citizenship behaviours that
improve the performance and well-be ing of co-workers and the overall team.
Shared leadership typically supplements formal leadership; that is, employees lead along with the
formal manager, rather than as a replacement for that manager. However, W. L. Gore & Associates,
Semco SA, Valve Corporation, and a few other unique companies rely almost completely on shared
At EllisDon, leaders aren’t just people in management jobs. The Misslssauga-based construction giant
believes that leadership extends to every employee in the organization. “Everyone is a leader, everyone
is accountable to each other. and everyone is involved In the success of the company as whole; explains
EllisDon CEO Geoff Smith (shown here). “It’s a leadership philosophy throughout our company.• EllisDon
supports shared leadership by setting objectives and then giving employees a high degree of autonomy to
achieve them. “Get good people, give them the authority, give them the support, and then get out of their
way; Smith advises. ·so you create leaders around you.”7
© Fernando Morales/The Globe and MailfCP Images

338 Part Three Team Processes
leadership because they don’t have any formal managers on the organizational chart.8 ln fact, when Gore
employees are asked “Are you a leader?” in annual surveys, more than SO percent of them answer “Yes.”
The idea of shared leadership is quickly gaining popularity in the business community. Sergio
Marchionne, the Canadian-Italian CEO of Fiat and Chrysler, says: “We’ve abandoned the Great Man
model of leadership that long characterized Fiat and have created a culture where everyone is expected
to lead.9 John Gardner, the former White House cabinet member who introduced Medicare, wrote
almost three decades ago that organizations depend on employees across al l levels of the organization
to seek out opportunities and solutions rather than rely on formal leaders to do so. 10
Shared leadership flourishes in organizations where the formal leaders are willing to delegate power
and encourage employees to take initiative and risks without fear of failure (i.e., a learning orientation
culture). Shared leadership also calls for a collaborative rather than internally competitive culture because
employees succeed in shared leadership roles only when their co-workers support them in these roles. Fur-
thermore, shared leadership lacks formal authority, so it operates best when employees learn to influence
others through their enthusiasm, logical analysis, and involvement of co-workers in their idea or vision.
Transformational Leadership Perspective
Most leadership concepts and practices can be organized into four perspectives: transfor-
mational, managerial, implicit, and personal attributes. By far the most popular leader-
ship perspective today-and arguably the most important in the domain of leadership-is
transformational leadership. Transformatio nal leadership views leaders as change agents. They create,
communicate, and model a shared vision for the team or organization. They encourage experimentation
so employees find a better path to the future. Through these and other activities, transformational leaders
also build commitment in followers to strive for that vision. There are several models of transformational
leadership, but four elements are common throughout most of them and represent the core concepts of
this leadership perspective. These four elements are: develop and communicate a strategic vision, model
the vision, encourage experimentation, and build commitment to the vision (see Exhibit 12.1 ).11
EXHIBIT 12.1 Elements of Transformational Leadersh ip
Le adership

Chapter Twelve Leadership in Organizational Settings 339
DEVELOP AND COMMUNICATE A STRATEGIC V ISION
The heart of transformational leadership is a strategic vision. 12 A vision is a positive representation of
a future state that energizes and unifies employees. 13 Sometimes this vision is created by the leader;
at other times, it is formed by employees or other stakeholders and then adopted and championed by
the formal leader. The opening case study to this chapter described how David Ossip ha~ Jed Cerid-
ian’s success through a vision of making work life better for employees everywhere, rather than selling
payroll and employee scheduling software as a service. Will iam Rogers, CEO of British radio station
group U KRD, emphasizes that one of the key features of successfu l leaders is their “clarity of vision,
so people can say: ‘I know where we’re going, what this journey is about, what our noble cause is.’
For us, it’s not just running a radio group and commercial success-it’s about changing people’s Jives,
impacting on communities.” 14
An effective strategic vision has several identifiable features. 15 It refers to an ideal ized future w ith
a higher purpose. This purpose is associated with personal values that directly or indirectly fulfil the
needs of multiple stakeholders. A values-based vision is also meaningful and appeal ing to employees,
which energizes them to strive for that ideal. Another reason why a strategic vision motivates employ-
ees is because it is a distant goal that is both challenging and abstract. A vision is challengi ng because
it requires substantial transformation, such as new work practices and belief systems.
A strategic vision is necessarily abstract for two reasons. One reason is that it ha~n’t yet been expe-
rienced (at least, not in this company or industry), so it isn’ t possible to detail exactly what the vision
looks like. The other reason is that an abstract description enables the vision to remain stable over time,
yet is sufficiently flexible to accommodate operational adj ustments in a shifting external environment.
• by the NUMBERS
Not Quite Leading with Vision 16
o f 32,000 employees
surveyed globally say
their company’s
leaders commun icate a
clear and compell ing
v ision of the future.
of 1,200 Canadian
employees surveyed
strongly or somewhat
agree that senior
management in their
organization communicates
a clear v ision.
of more than 40,000
employees surveyed in
300 global organizations
say they know their
company’s v ision, mission,
and values.
of1,061 American
employees surveyed
say they don’t get
(u nderstand) their
company’s vision or have
never seen it.
of 168,000 employees
surveyed across
30 countries say
they either do not believe
in their employer’s
mission/purpose (vision)
or don’t understa nd it.

3 4 0 Part Three Team Processes
For example, Ceridian’s vision to make work life better does not refer to specific goals such as expand-
ing the product range or launching the service into new markets. Instead, it describes the broader noble
cause of improving the work life of customers, their employees, and other stakeholders.
Another feature of an effective vision is that it is unifying. It is a superordinate objective that bonds
employees together and aligns their personal values with the organization’s values. In fact, a successful
vision is really a shared vision, because employees collectively define themselves by this a~pirational
image of the fu ture as part of their identification w ith the organization.
Communicate the Vision A strategic vision’s effectiveness depends on how leaders convey it
to others. 17 Transformational leaders generate meaning and motivation in followers by relying on sym-
bols, metaphors, stories, and other vehicles that transcend plain language. 18 Metaphors and related
communication tools “frame” the vis ion, meaning that they guide or construct the listener’s mental
model of the situation. For example, leaders at Da Vita refer to the company as a village and employees
(called teammates) as citizens of that village who “cross the bridge,” which symbolizes that they make
a commitment to the company. “The words we use, while simple in nature, are packed with meaning,”
explains an executive at Da Vita, the largest dialysis treatment group in the United States. 19
Borrowing images from other experiences creates a richer understanding of the abstract vision.
These communication tools also generate desired emotions, which motivate people to pursue the
vision. For instance, when George Cohen, the ebull ient CEO of McDonald’s Canada, faced the dif-
ficult challenge of opening McDonald ‘s restaurants in Moscow, he frequently reminded his team mem-
bers that they were establishing “hamburger diplomacy.”20
Transformational leaders also convey the vision using verbal and nonverbal communication
practices that show humility, sincerity, and a level of passion that reflects their personal belief in the
vision and their optimism that employees can succeed. They strengthen team-orientation and employee
self-efficacy by referring to the team’s strengths and potential. By focusing on shared experiences
and the central role of employees in achievement of the vision, transformational leaders suppress
leader-follower differences, deflect attention from themselves, and avoid any image of superiority over
the team.21
MODEL THE VISION
Transformational leaders not only talk about a vision; they enact it. They “walk the talk” by stepping
outside the executive suite and doing things that symbol ize the vision22 Leaders model the vision
through significant events such a~ visiting customers, moving their off ices closer to (or further from)
employees, and holding ceremonies to symbolize significant change. However, they also enact the
vision by ensuring that the more mundane daily activities-meeting agendas, dress codes, executive
schedules-are consistent with the vision and its underlying values.
Modelling the vision is important because it legitimizes and demonstrates what the vision looks
like in practice. Modelling is also important because it builds employee trust in the leader. The greater
the consistency between the leader’s words and actions, the more employees will believe in and be
motivated to follow the leader. As Ceridian CEO David Ossip, profiled at the beginning of this chapter,
explains, “When employees are able to see their leadership live by the values that guide them, it helps to
establish a sense of organizational trust and credibility.” These views are echoed by Mike Perl is, presi-
dent and chief executive officer of Forbes Media. “Great leaders walk the talk,” says Perl is. “T hey lead
by example. There isn’t anything they ask people to do they ‘ re not wi lling to do themselves.”23 Consis-
tent with these comments, surveys report that “leading by example” is the most important attr ibute of
effective leaders and is one of the most important characteristics of a company’s culture.24
ENCOURAGE EXPERIMENTATION
Transformational leadership is about change, and central to any change is discovering new behaviours
and practices that are better al igned with the desired vision. Transformational leaders support this
journey by encouraging employees to question current practices and to experiment with new ways that

Chapter Twelve Leadersh ip in Organizational Settings 3 4 1
are potentially more consistent with the vis ion’s future state .25 In other words, transformational leaders
support a learning orientation (see Chapter 7). They encourage employees to continuously question the
way things are currently done, actively experiment with new ideas and practices, and view reasonable
mistakes as a natural part of the learning process. 26
BUILD COMMITMENT TOWARD THE VISION
Transforming a vision into reality requires employee commitment, and transformational leaders build
this commitment in several waysP Their words, symbols, and stories build a contagious enthusiasm
that energizes people to adopt the vision as their own. Leaders demonstrate a “can do” attitude by
enacting and behaving consistently with their vis ion. This persistence and consistency reflect an image
Vancouver’s reputation as one of the world ‘s most livable ci ties is due in large part to the
transformational leadership of the late Art Ph illips and other members of his civic party in
the early 19 70s. “The improvements in q ua lity of life, living downtown, waterfront walks, and
pro tecting neighbourhoods are all the results of Art Phillips’ leadership,” says Gordon Campbell,
w ho has served as both British Colu mbia’s prem ier and Vancouver’s mayor. Current B.C. p remier
Christy Clark applauds Phillips as “a transformational leader who he lped make one of Canada’s
great cities the envy of the world.”
Phillips was one of Canada’s most successful investment analysts w hen he was drawn into
civic politics by city plans to create an American-style concrete jungle in Vancouver’s downtown .
“He felt Vancouver was at a crucial turning point, headed in the wrong d irection,” recalls Carole
Taylo r, Phillips’ wife and a disti ngu ished journalist and politician. “Art could see what had to be
done to create the fut ure.”
“Instead of being dead at n ight, we wanted the downtown core to be more European, a place
to live and e njoy,” said Phillips two decades later about this v ision of Vancouver’s future. “It was
all about doing things differently. It was about bringing people in, not throwing them out, and
making the city a p lace to enjoy, w here people wanted to live.” With this vision in mind, Ph illips
was e lected to city council and later became mayor. Over the following years, Phillips and his civic
party transformed Vancouver into the e nviable u rban environment it is today28
0 George OiackNancouver Sun

3 4 2 Part Three Team Processes
of honesty, trust, and integrity. By encouraging experimentation, leaders involve employees in the
change process so it is a collective activity. Leaders also build commitment through rewards, recogni-
tion, and celebrations as employees pass milestones along the road to the desired vision.
TRANSFORMATIONAL LEADERSHIP AND CHARISMA
Some experts believe that charisma is an element of transformational leadership. They describe charis-
matic leadership either as an essential ingredient of transformational leadership or as transformational
leadership in its highest form of excellence.29 However, the emerging view, which this book adopts,
is that charisma is distinct from transformational leadership. Charisma is a personal trait or relational
quality that provides referent power over fo llowers, whereas transformational leadership is a set of
behaviours that engage followers toward a better future. 30
Transformational leadership motivates followers through behaviours that persuade and earn trust,
whereas charismatic leadership motivates followers directly through the leader’s inherent referent power.
For instance, communicating an inspiring vision is a transformational leadership behaviour that motivates
fo llowers to strive for that vision. This motivational effect exists separately from the leader’s charismatic
appeal. If the leader is highly charismatic, however, his or her charisma will amplify follower motivation.
Being charismatic is not inherently good or bad, but several research studies have concluded that
charismatic leaders can produce negative consequencesY One concern with charismatic leadership is
that it tends to produce dependent followers. Transformational leadership has the opposite effect-it
builds follower empowerment, which tends to reduce dependence on the leader.
Another concern is that leaders who possess the gift of charisma may become intox icated by this
power, which leads to a greater focus on self-interes t than on the common good. “Charisma becomes
the undoing of leaders,” warned Peter Drucker many years ago. “It makes them inflexible, convinced of
their own infallibility, unable to change.’o32 The late management guru witnessed the destructive effects
of charismatic political leaders in Europe a century ago and foresaw that this personal or relational char-
acteristic would create similar problems for organizations. The main point here is that transformational
leaders are not necessarily charismatic, and charismatic leaders are not necessarily transformational.
What are your transformational leadership tendencies? You can discover your
level of transformational leadership on each d imension by completing this
self-assessment in Connect.
EVALUATING THE TRANSFORMATIONAL LEADERSHIP PERSPECTIVE
Transformational leaders do make a difference.33 Subordinates are more satisfied and have higher affec-
tive organizational commitment under transformational leaders. They also perform their jobs better,
engage in more organizational citizenship behaviours, and make better or more creative decisions. One
study of Canadian bank branches reported that organizational commitment and financial performance
increased where the branch manager completed a transformational leadership training program.34
Transformational leadership is currently the most popular leadership perspective, but it faces a munber of
challenges.35 One problem is that some models engage in circular logic. They define and mea~ttre transfor-
mational leadership by it~ effects on employees (e.g., inspire employees), then (not surprisingly) report that
this leadership is effective because it inspires employees. Instead, transformational leadership needs to be
defined purely a~ a set of behaviours that people use to lead others through the change process. A second con-
cern is that some transformational leadership theories combine leader behaviours with the leader’s personal
characteristics. For instance, transformational leaders are described as visionary, imaginative, sensitive, and
thoughtful, yet these personal characteristics are really predictors of transformational leadership behaviours.
A third concern is that transformational leadership is usually described a~ a universal concept, that
is, it should be appl ied in all situations. Only a few studies have investigated whether this form of

Chapter Twelve Leadership in Organizational Settings 3 4 3
leadership is more valuable in some situations than others.36 For instance, transformational leadership
is probably more appropriate when organizations need to continuously adapt to a rapidly changing
external environment than w hen the environment is stable. Preliminary evidence suggests that the
transformational leadership perspective is relevant across cultures. However, there may be specific ele-
ments of transformational leadership, such as the way visions are communicated and modelled, that are
more appropriate in North America than in other cultures.
Managerial Leadership Perspective
Leaders don’t spend all (or even most) of their time transforming the organization or work
unit. They also engage in m anagerial leadershi~aily activities that support and guide
the performance and well-being of individual employees and the work unit toward current
objectives and practices. Leadership experts recognize that leading (transformational leadership) differs
from managing (managerial leadership)37 Although the distinction between these two perspectives remains
somewhat fuzzy, each cluster has a reasonably clear set of activities and a strong research foundation.
One distinction between these two perspectives is that manager ial leadership a~sumes the organiza-
tion’s (or department’s) objectives are stable and aligned with the external environment.38 It focuses on
continuously developi ng or maintaining the effectiveness of employees and work units toward those
establ ished objectives and practices. In contrast, transformational leadership assumes the organization
is misal igned with its environment and therefore needs to change its direction. T his distinction is cap-
tured in the often-cited statement: “Managers are people who do things right and leaders are people
who do the right thing.”39 Managers “do things right” (practise manager ial leadership behaviours) by
enabling employees to perform established goals more effectively. Leaders “do the right thing” (prac-
tise transformational leadership behaviours) by changing the organization or work unit so its objectives
are aligned more closely with the external environment.
A second distinction is that managerial leadership is more micro-focused and concrete, because it
relates to the specific performance and well-being objectives of individual employees and the immedi-
ate work unit. T ransformational leadership is more macro-focused and abstract. It is directed toward an
abstract strategic vision for an entire organization, department, or team.
TRANSFORMATIONAL AND MANAGERIAL LEADERSHIP
INTERDEPENDENCE
Although transformational and managerial leadership are discussed as two leadership perspectives, they
are better described as interdependent perspectives.40 In other words, transformational leadership and
managerial leadership depend on each other. Transformational leadership identifies, communicates,
and bui lds commitment to a better fu ture for the organization or work unit. But these transfor mational
leadership behaviours are not enough for organizational success. That success also requires managerial
leadership to translate the abstract vision into more specific operational behaviours and practices, and to
continuously improve employee performance and well-being in the pursuit of that funtre ideal.
Managerial leadership also depends on transformational leadership to set the right direction. Otherwise,
managers might produce operational excellence toward goals that are misaligned w ith the organization’s
long-term survival. For instance, the leaders at Dell Inc. relied on managerial excellence to produce low-
cost computers, yet the company subsequently suffered because the external environment shifted toward
higher-priced, innovative products.41 Excellent managerial leadership wa~ not enough to make Dell suc-
cessful. The company also needed transformational leadership to develop a vision that aligned the com-
pany’s products more closely w ith the changing marketplace and inspired employees toward that vision.
As you might expect, senior executives require more transformational leadership behaviour than
do managers furthe r down the hierarchy, likely because transformational leadership requires more
discretion to enable macro-level change. However, managerial and transformational leadership are

3 4 4 Part Three Team Processes
EXHIBIT 12.2 Task- and People-Oriented Leadership Styles
laden-IIIIIIDrll ted …….. .. laden-pellllll Drl l I ll …….. . .
A’isign work and c larify responsibilities Show interest in others as people
Set goals and deadline.< Listen to employees Evaluate and provide feedback on work quality Make the workplace more pleasant E.tal
Service and State of Iowa are trying to achieve. (USPS currently exceeds its gool ) The State of Texas number i…:; the Span of contrOl mandated by law.
The Best U.S. Plants number i…:; the 3:\’erag.e Spa.n of control in Ameriean manufacturing faci lities identified by Industry We-ek magazine a..:; the rtl0$1
effective. “‘Actual” refers to the Span..:; of contrOl reported in the cities of Phoenix. Portland. and Toronto. the pubJjc sen•ice of the U.S. states of Oregon
and Iowa. BowJjng Green Unj verS:ily. the Toronto Trans..it Commiss:ioo. and Fed.Ex Corporatioo in the years indicated The Ci1y of Toronto number
excludes r uefighter.> :md parks.. which have unusually high spans of conLrOI. When these Wlits are incl uded. Toronto’s Span of conLrOI i…:; 163.
ranging from project specialists to sales support staff, report directly to Amy Geiger, director of sales
operations a t Sunrise Identity. “Amy is a big proponent o f Jetting her employees be self- led,” says one
of Geiger’s direct reports at the Bellevue, Washington, marketing and merchandising agency. “She is
against micromanaging and wants her employees to grow from their own learned experiences.”22
A second fac tor influencing the best span of control is whether employees perfonn routine ta~ks.
A wider span of control is possible when employees perform routine jobs, because they require Jess
direction or advice from supervisors. A narrow span of control is necessary when employees perform
novel or complex tasks, because these employees tend to require more supervisory decisions and coach-
ing. This principle is illustrated in a survey of property and ca~ualty insurers. The average span of control
in commercial-policy processing departments is around 15 employees per supervisor, whereas the span
of control is 6.1 in claims service and 5.5 in commercial underwriting. Staff members in the latter two
departments perfonn more technical work, so they have more novel and complex tasks, which requires
more supervisor involvement. Commercial-policy processing, on the o ther hand, is like production work.
Tasks are routine and have few exceptions, so managers have Jess coordinating with each employee.23
A third influence on span of control is the degree of interdependence among employees w ithin
the department or team.24 General ly, a narrow span of control is necessary for highly interdependent
jobs because employees tend to experience more conflict with each o ther, which requires more of a
manager’s time to resolve. Also, employees are less clear on their personal work perfonnance in highly
interdependent tasks, so supervisors spend more time providing coaching and feedback.
Tall versus Flat Structures Span of control is interconnected with organizational size (number
of employees) and the number of layers in the organizational hierarchy. Consider two companies with
the same number of employees. If Company A ha~ a wider span of control (more direct reports per
manager) than Company B, then Company A necessarily ha~ fewer layers of management (i.e., a fl atter

Chapter Thirteen Designing Organizational Structures 369
Global Connections 13.1:
BBC FURTHER FLATTENS THE HIERARCHY
The British Broadcasting Corporation (BBC) has one of the lowest overhead costs among public-
sector and regulated companies in the U.K. Overhead (management and administration)
represents less than 8 percent of total costs. Yet, with declining television license fee income,
the BBC is further reducing management numbers and flattening the corporate hierarchy.
“In some places there are currently 10 layers of people and management and this will be cut
to a maximum of seven in the future,” advises BBC Director-General Tony Hall.
Lord Hall warns that, in addition to being a source of overhead costs, hierarchy “slows down
decision making.” He suggests that reducing management layers will improve the BBC because
the organization excels with “as few barriers as possible to creativity, allowing people, teams
and ideas to come together to do their best work. It is not one which allows bureaucracy,
layers, and box-ticking to get in the way25
The British Broadcasting Corporation is reducing the number of management levels to reduce
costs, improve employee creativity, and allow more nimble decision making.
©Vibrant Pictures/Aiamy Stock Photo
structure). The reason for this relationship is that a company with a wider span of control ha~ more
employees per supervisor, more supervisors for each mi ddle manager, and so on. This larger number of
direct reports, compared to a company with a narrower span of control, is possible only by removing
layers of management.
The interconnection of span of control, organizational size (number of employees), and number of
management layers ha~ important implications for companies. As organizations grow, they typically
employ more people, which means they must widen the span of control, build a taller hierarchy, or both.

370 Part Four Organizational Processes
Most companies end up building taller structures because they rely on direct supervision to some extent
as a coordinating mechanism and there are limits to how many people each manager can coordinate.
Unfortunately, building a tal ler hierarchy (more layers of management) creates problems. One
concern is that executives in tall structures tend to receive lower-quality and less timely information.
People tend to fi lter, distort, and simpl ify information before it is passed to higher levels in the hier-
archy because they are motivated to frame the information in a positive light or to summarize it more
efficiently. In contrast, information receives less manipulation in flat hierarchies, and is often received
much more quickly than in tall hierarchies. “Any new idea condemned to struggle upward through mul-
tiple levels of r igidly hierarchical, r isk averse management is an idea that won’t see dayl ight … unti l
it’s too late,” warns Sergio Marchionne, the Canadian-Ital ian CEO of Fiat Chrysler Automobiles.26
A second problem is that taller structures have higher overhead costs. With more managers per
employee, tall hierarchies necessarily have more people administering the company, thereby reducing the
percentage of staff who are actually making the product or providing the service. A third issue with tall
hierarchies is that employees usually fee l less empowered and engaged in their work. Hierarchies are power
strucntres, so more levels of hierarchy tend to draw away power from people at the bottom of that hierarchy.
Indeed, the size of the hierarchy itself tends to focus power around managers rather than employees. r7
These problems have prompted companies to remove one or more levels in the organizational hier-
archy.28 KenGen had more than 15 layers of hierarchy a few years ago. Today, the 1,500 employees
at Kenya’s leading electricity generation company are organized in a hierarchy with only six layers.
Sandvik also “delayered,” reducing its hierarchy from 13 layers between the CEO and the most junior
employee to only seven layers.29 Although flattening the hierarchy has advantages, critics warn that it
can also lead to problems.
~ Debating Point:
*uP SHOULD ORGANIZATIONS CUT BACK MIDDLE MANAGEMENT?
Business leaders face the ongoing challenge of preventing their organization from balloon-
ing into a fat bureaucracy w ith too many layers of middle managers. Indeed, it has become
a mantra for incoming CEOs to gallantly state they will “delayer” or “flatten” the corporate
hierarchy, usually as part of a larger mandate to “empower” the workforce.
As we describe in this chapter, there are several valid arguments for minimizing the corpo-
rate hierarchy, particularly by cutting back middle management. As companies employ more
managers, they increase overhead costs and have a lower percentage of people actually gen-
erating revenue by making prod ucts or providing services. A taller hierarchy also undermines
effective communication between the top executive team and front-line staff- who are usually
the first to receive valuable knowledge about the external environment. Middle managers
have a tendency to distort, simplify, and filter information as it passes from them to higher
authorities in the company. A third reason for cutting back midd le management is that they
absorb organizational power. As companies add more layers, they remove more power that
might have been assigned directly to front-line employees. In other words, tall hierarchies
potentially undermine employee empowerment.
These concerns seem logical, but slashing the hierarchy can have several unexpected con-
sequences that outweigh any benefits. In fact, a growing chorus of management experts warns
that cutting out too much middle management has several negative long-term consequences.30
Critics of delayering point out that all companies need managers to translate corporate
strategy into coherent daily operations. ” Middle managers are the link between your mission
and execution; advises a senior hospital executive. “They turn our strategy into action and get
everyone on the same page.”31 Furthermore, managers are needed to make quick decisions,
coach employees, and help resolve conflicts. These valuable functions are underserved when
the span of control becomes too wide.

Chapter Thi rteen Designing Organizational Structures 371
Delayering increases the number of direct reports per manager and thus significantly increases
management workload and corresponding levels of stress. Managers partly reduce the workload
by learning to give subordinates more autonomy rather than micromanaging them. However, this
role adjustment itself is stressful (same responsibility, but less authority or control). Companies often
increase the span of control beyond the point at which many managers are capable of coaching or
leading their direct reports.
A third concern is that delayering results in fewer managerial jobs, so companies have less
manoeuvrability to develop managerial skills. Promotions are also riskier because they involve a
larger jump in responsibility in flatter, compared to taller, hierarchies. Furthermore, having fewer pro-
motion opportunities means that managers experience more career plateauing, which reduces th eir
motivation and loyalty. Chopping back managerial career structures also sends a signal that manag-
ers are no longer valued. “Delayering has had an adverse effect on morale, productivity and per-
formance; argues a senior government executive. “Disenfranchising middle management creates
negative perceptions and lower comm itment to the organization with consequent reluctance to
accept responsibility.”32
CENTRALIZATION AND DECENTRALIZATION
Centralization means that formal decision-making authority is held by a small group of people, typi-
cally those at the top of the organizational hierarchy. Most organi zations begin with centralized struc-
tures, as the founder makes most of the decisions and tries to direct the business toward his or her vision.
As organi zations grow, however, they diversify and their environments become more complex. Seni or
executi ves aren’t able to process all the decisions that significantly influence the business. Conse-
quently, larger organizations typically decentralize; that is, they disperse decision authority and power
throughout the organization.
The optimal level of centralization or decentralization depend~ on several contingencies that we will
examine later in this chapter. However, different degrees of decentralization can occur simultaneously in
different part~ of an organization. For instance, 7 -Eleven centralizes decisions about information technology
and supplier purchasing to improve buying power, increa~ cost efficiencies, and minimize complexity across
the organization. Yet it decentralizes local inventory decisions to store managers because they have the best
information about their customers and can respond quickly to local market needs. “We could never predict
a bus load of football players on a Friday night, but the store manager can,” explains a 7 -Eleven executive.33
FORMALIZATION
Formaliza tion is the degree to which organi zations standardize behaviour through rules, procedures,
formal traini ng, and related mechani sms?
4
ln other words, companies become more formal ized as they
increasingly rely on vari ous forms of standardization to coordinate work. McDonal d’s Restaurants and
most other efficient fa~t-food chai ns typically have a high degree of formal ization because they rely
on standardization of work processes as a coordi nating mechani sm. Employees have precisely defined
roles, right down to how much mustard should be dispensed, how many pickles should be appl ied, and
how l ong each hamburger should be cooked.
Older companies tend to be more formal i zed because work acti viti es become routinized, making
them easier to document i nto standardized practi ces. Larger companies also tend to have more for-
mal ization because direct supervi sion and i nformal communi cation among employees do not operate
as easily when large numbers of people are involved. External influences, such as government safety
legisl ation and strict accounting rules, also encourage formal ization.
Formalization may increase efficiency and compliance, but it can also create problems.35 Rules and
procedures reduce organizational flexibili ty, so employees follow prescribed behaviours even when the
situation clearly calls for a customized response. High levels of formalization tend to undermine orga-
nizational learning and creativity. Some work rules become so convoluted that organizational efficiency
would decl ine i f they were actually followed as prescri bed. Formalizati on is al so a source of job

372 Part Four Organizational Processes
dissatisfaction and work stress. Finally, rules and procedures have been known to take on a life of their
own in some organizations. They become the focus of attention rather than the organization’s ultimate
objectives of producing a product or service and serving its dominant stakeholders.
MECHAN ISTIC VERSUS ORGAN IC STRUCTURES
We discussed span of control, centralization, and formal ization together because they cluster around
two broader organizational forms: mechanistic and organic structures (see Exhibit 13.3).36 A m echa-
nistic structure is characterized by a narrow span of control and high degree of formalization and cen-
tralization. Mechanistic structures have many rules and procedures, limited decision making at lower
levels, tal l hierarchies of people in specialized roles, and vertical rather than horizontal communication
flows. Tasks are rigidly defined and are altered only when sanctioned by higher authorities. Although
now changing its structure, Samsung has traditionally had a mechanistic structure, which is apparent
by the Korean firm ‘s central ized decision making, clearly-defined job descriptions, and work activities
heavily guided by established rules and procedures.
Companies with an organic structure have the opposite characteristics. They operate with a wide span
of control, decentralized decision making, and little formalization. Ta~ks are fluid, adj usting to new situa-
tions and organizational needs. In extremely organic organizations, decision making is decentralized down
to teams and individuals, and employees have enough autonomy to adapt their job duties to fit the situation.
As a general rule, mechanistic structures operate better in stable environments because they rely on effi-
ciency and routine behaviours. Organic structures work better in rapidly changing (i.e., dynamic) environment~
because they are more flexible and responsive to the changes. Organic strucnrres are also more compatible
with organizational teaming and high-performance workplaces because they emphasize information sharing
and an empowered workforce rather than hierarchy and stants37 However, the effectiveness of organic struc-
tures depends on how weU employees have developed their roles and expertise.38 Without these conditions,
employees are unable to coordinate effectively with each other, resulting in errors and gross inefficiencies.
Which organizational structure do you prefer? You can discover w h ich organizational
structu re is most comfortable for you by completing th is self-assessment in Conn ect.
EXHIBIT 13.3 Contrasting Mechanistic and Organic Organizat iona l Structures
Mechanistic Structur e
Narrow span of control
High centralization
High formalization
left: ComsLock lmages/Alamy: Tight: Steven P. Lynch/McGraw-Hill Companies
Organic Str ucture
Wide span of control
High decentralization
low formalization

Chapter Thirteen Designing Organizational Structures 373
Forms of Departmentalization
Span of control, centralization, and for malization are important elements of organiza-
tional structure, but most people thi nk about organizational charts when the discussion
of organizational structure arises. The organizational chart represents the fourth element
in the structuri ng of organizations, called departmentaliztaion. Departmentalization specifies how
employees and their activities are grouped together. It is a fundamental strategy for coordi nati ng orga-
nizational activities because it influ ences organizational behaviour in the followi ng ways:39
Departmentalization establishes the chain of command-the system of common supervision
among positions and units withi n the organization. It frames the membership of formal work
teams and typically determines which positions and units must share resources. Thus, depart-
mentalization establ ishes interdependencies among employees and subunits.
Departmentalization focuses people around common mental models or ways of thinking, such as
serving clients, developing products, or supporting a particular skill set. This focus is typically
anchored around the common budgets and mea~ures of performance assigned to employees
within each departmental unit.
Departmentalization encourages specific people and work units to coordinate through informal
communicatio n. With common supervision and resources, members w ithin each configuration typi-
cally work near each other, so they can use frequent and informal interaction to get the work done.
There are almost as many organizational charts as there are businesses, but the s ix most common
pure types of departmentalization are simple, functional, divisional, team-based, matrix, and network.
SIMPLE STRUCTURE
Most companies begin with a simple structure.
40
They employ only a few people and typically offer
only one distinct product or service. There is minimal hierarchy-usually just employees reporting to
the owners. Employees perform broadly defi ned roles because there are insufficient economies of scale
to assign them to specialized j obs. The simple structure is highly flex ible and minimizes the walls that
form between work units in other structures. However, the s imple structure usually depends on the
owner’s direct supervision to coordinate work activities, so it is very difficult to operate as the com-
pany grows and becomes more complex.
FUNCTIONAL STRUCTURE
As organizations grow, they typically shift from a simple structure to a functional structure. Even after
they adopt more complex organizational structures (which we discuss later), they wi ll have a fu nctional
structure at some level of the hierarchy. A functional structure organizes employees around specific
knowledge or other resources (see Exhibit 13.4). Employees with marketing expertise are grouped into
EXHIBIT 13.4 A Functional Organ izational Structure
Chief Executive
Design Administration Marketing

374 Part Four Organizational Processes
Chapma n’s Ice Cream Limited had a classic simp le organ izational structu re when David and
Penny Chapman started their b usiness back in 1973. The cou ple and four emp loyees performed
all t he work in a century-old creamery located in the village of Markdale, Ontario. ·we did
everything,” recalls company president Pen ny Chapman (centre in photo with David at right and
son Ashley with several employees). “We made the mixes, bu ilt the pack ages. we worked in cold
storage .. . David went out on the road to do sales.”
Chapman’s grew q uickly by offe ring uniq ue ice cream flavours. The work was eventually divided
into more specialized tasks and a functional structure emerged around prod uctio n, marketing,
research, and other d epartments. Today, Chapman’s is Canada’s largest independent ice cream
man ufacturer, employing 500 people and producing more than 20 0 p roducts on 20 p roduction
lines. The company is also a global award winner for innovation in ice cream p roducts. 41
Courtesy of David Chapman’s Ice Cream
a marketing unit, those with production skills are located in manufacturing, engineers are found in
product development, and so on. Organizations with functional structures are typical ly central ized to
coordinate their activities effectively.
Evaluating the Functional Structure The functional strucntre creates specialized pools of tal-
ent that typically serve everyone in the organization. Pooling talent into one group improves economies
of scale compared to dispersing functional specialists over different parts of the organization. The func-
tional structure also increa~es employee identity with the specialization or profession. Direct supervision
is easier in functional structures because managers oversee people w ith common issues and expertise.42
The functional structure also has limitations.43 Grouping employees around their ski lls tends to
focus attention on those ski lls and related professional needs rather than on the company’s product, ser-
vice, or client needs. Unless people are rotated through several functional unit~ over time, they might
not develop a broader understanding of the business. Compared with other structures, the functional
structure usually produces more dysfunctional confl ict and poorer coordination in serving clients or
developing products. These problems occur because employees need to work with co-workers in other
departments to complete organizational tasks, yet they have different subgoals and mental models
about how to perform the work effectively. Together, these problems require substantial formal con-
trols and coordination when people are organized around functions.
DIVISIONAL STRUCTURE
The divisional stru cture (sometimes cal led the multidivisional or M-form strucntre) groups employees
around geographic areas, outputs (products or services), or clients. Exhibit 13.5 illustrates these three

Chapter Thirteen Desig ning O rgan izational St ructures 375
variations of divisional structure.
44
The geographic divisional structure organizes employees around
distinct regions of the country or world. Exhibit 13.5 (a) illustrates a simpl ified version of the geo-
graphic divisional structure adopted by Kone, the Finland-ba~ed global elevator and escalator company.
The product/service divisional structure organizes employees around distinct outputs. Exhibit 13.5 (b)
illustrates the four product divisions at Danone, the France-based global food company. The client
divisional structure organizes employees around specifi c customer groups. Exhibit 13.5 (c) illustrates a
customer-focused divis ional structure similar to one adopted by the Bank of Montrea1 .
45
Which for m of divisional structure should large organizations adopt? The answer depends mainly on
the primary source of environmental diversity or uncertainty.46 S uppose an organization has one type of
product sold to people across the country. If customers have differe nt needs across regions, or if provin-
cial governments impose different regulations on the product, then a geographic structure would be best
to be more vigilant of this diversity. On the other hand, if the company sells several types of products
across the country and customer preferences and government regulations are s imi lar everywhere, then a
product structure would likely work best.
Kone, the global elevator and escalator company, is organized mai nly around geographic regions,
likely because regulations and sales channels vary much more by region than by product. McDonald’s
is organized into several geographic divisions (high growth, established, franchised) and is further
organized by specific countries or zones w ithin each of these divisions. This geographic organization
makes sense because even though it makes the same Big Mac throughout the world, McDonald’s has
more fish products in Hong Kong and more vegetarian products in India, in line w ith traditional diets
EXHIBIT 13.5 Three Types of Divisional Structu re
(a) Geographic Div isional Structure
Americas
Greater
China
(b) Product Divisional Structure
Fresh Dairy
Products
(c) Client Divisio nal Structure
Chief Executive
Officer
Asia-Pacific
Chief Executive
Officer
Central &
North Europe
Waters
Early Life
Nutrition
Medical
Nutrition
Chief Executive
Officer
Africa
Not~: Diagram (a) shows a global geographic djvi…:;ional structure similar to Kone CorpOration: diagram (b) depict..:; the four product djvi…:;ions of
Danone: diagram (e) is similar to the customer-focused srructme at the Bank of Mont.real.

376 Part Four Organizational Processes
in those countries. Danone has dozens of country managers to anticipate and respond to cultural differ-
ences. However, the French dairy products maker places product groups (waters, dairy, medical, early
life) at the top of its organizational structure, possibly because marketing and manufacturing activities
vary much more across product divisions than across regions.
Many companies are moving away from structures that organize people around geographic clus-
ters.47 One reason is that clients can purchase products online and communicate with businesses from
almost anywhere in the world, so local representation is becoming less important. Reduced geographic
variation is another reason for the shift away from geographic structures; freer trade has reduced gov-
ernment intervention, and consumer preferences for many products and services are becoming more
similar (converging) around the world. The third reason is that large companies increasingly have global
business customers who demand one global point of purchase, not one in every country or region.
Global Connections 13.2:
TOYOTA’S EVOLVING DIVISIONAL STRUCTURE
Toyota Motor Company was recently fined $1.2 billion by the U.S. government, the largest
penalty ever against an automaker, because it “misled regulators, misled customers, and even
misstated the facts to Congress,” regard ing safety issues with its accelerator pedals. The
Ja panese company’s safety processes and reporting procedures in the United States were
subsequently monitored for three years. How cou ld one of the largest and most respected
automakers in the world get into this situation? A panel of independent experts commis-
sioned by Toyota id entified several issues ranging from supplier product quality to business
A panel of independent experts concluded that Toyota Motor Company should replace its
functional structure with a geograph ic divisional structure to increase sensitivity to potential
problems within each region where it does business.
© PA lmages/Aiamy Stock Photo

Chapter Thirteen Designing Organizational Structures 377
processes. However, its main conclusion was that Toyota’s functional organizational structure
was inappropriate for the global organization.
Toyota’s functional structure created silos around each specialization (sales, engineering,
manufacturing), which transmitted information selectively to headquarters in Japan. The result
was that most decisions were made by executives in Japan with lim ited knowledge about
practices and problems in specific regions. Based on that review, Toyota added two regional
divisions (essentially dividing the world into two groups) to the existing functional structure.
“Dealing with our overseas operations on a regional basis, rather than a functional basis, will
enable us to conduct decision making on a more comprehensive basis,” said Toyota CEO
Akio Toyoda when announcing the updated structure.
Toyota’s revised organizational structure lasted only two years. Faced with rapid techno-
log ical change and increasing competition, the automaker recently announced a massive
reorganization that divides the company into several vehicle product groups, such as compact
cars and commercial vehicles, as well as functional areas (power train and connected technology).
Appended to the new divisional product structure are the two regional groups. “This structural
change may not be the ultimate solution, but it is certainly an opportunity . .. to strengthen our
workforce and further promote making ever-better cars,” says Toyoda.48
Evaluating the Divisional Structure T he di vi sional organizational structure i s a buil ding-
bl ock structure. As the company devel ops new products, services, or cl ients, it can sprout new divi-
sions rel atively easily. This structure also directs empl oyee attention to customers and products, rather
than to their own speciali zed knowledge.
4 9
These advantages are offset by a number of l imitati ons. First, the divisional structure tends to dupl i-
cate resources, such as production equipment and engineer ing or information technol ogy exper ti se.
Also, unless the division is quite large, resources are not used as efficiently a~ they are in functional
structures where resources are pooled across the entire organi zati on. The divisional strucntre also cre-
ates silos of knowledge. Expertise is spread across several autonomous business units, and this reduces
the ability and perhaps moti vation of the people i n one div ision to share their knowledge w ith counter-
parts i n other di v isions. I n contrast, a functi onal structure groups experts together, thereby supporting
knowledge sharing within areas of expertise.
Finally, the preferred div isional structure depends on the company’s primary source of environmen-
tal diversity or uncertai nty. This principle seems to be applied easi ly enough at K one and McDonald’s,
but many global organizations experience di versity and uncertainty in terms of geography, product,
and clients. Consequently, some organizations revise their structures back and forth or create complex
structures that attempt to give all three dimensions equal status. This waffli ng generates further com-
pl ications, because organizational structure decisions shift power and status among executives. If the
company switches from a geographi c to product structure, people who lead the geographic f iefdoms
suddenly get demoted under the product chiefs. I n short, leaders of global organi zations struggle to
f ind the best div isional structure, often resulting i n the departure of some executives and frustration
among those who remai n.
TEAM -BASED STRUCTURE
TAXI has produced some of Canada’s most memorable ads, such a~ Canadian T ire’ s ” ice truck” com-
mercial and the cute critters that populate the Telus ads and websi te. The Toronto-ba~ed creati ve
agency fuels this creati ve energy through a team-based structure. ” We bel ieve a small team of bright
people, about as many a~ can fit into a cab, should drive every piece of business,” says TA X I’s web-
site. TA X I’s team-based structure contrasts w ith the rigid functional structur es found at many creati ve
agencies. “[Other advertising firms] operated on a 19th-century model of many secular departments

378 Part Four Organizational Processes
trying to integrate everything ad hoc,” explains TAXI co-fo under Paul Lavoie. “We needed a flexible
infrastructure, able to move w ith the pace of change.”50
TAXI relies heavily on a team-based organizational structure. A team-based structure is built around
self-directed teams that complete an entire piece of work, such a~ manufacturing a product or developing
an advertising campaign. This type of structure is usually organic. There is a wide span of control because
teams operate with minimal supervisio n. In extreme situations, team-ba~ed strucntres have no formal leader,
just someone selected by other team members to help coordinate the work and liaise with top management.
Team structures are highly decentralized because almost al l day-to-day decisions are made by team
members rather than someone further up the organizational hierarchy. Many team-based structures
also have low formalization because teams are given relatively fe w rules about how to organize their
work. Instead, executives assign qual ity and quantity output targets and often productivity improve-
ment goals to each team. Teams are then encouraged to use avai lable resources and their own initiative
to achieve those objectives .
Team-based structures are usually fou nd w ithin the manufacturing or service o perations of larger
divisional structures. Several GE aircraft engines plants are organized as team-based structures, but
these plants o perate within GE’s larger divis ional structure. However, a smal l number of firms apply
Valve Corporatio n has the u ltimate t eam-based organizatio nal structure. Employees at the software and
entertainment company in the U.S. st ate of Washing ton o rganize themselves into self-directed teams.
There are no bosses o r departments to determine what t asks employees perfo rm or even w hich
projects they should work on. Instead, everyone figures out w here their t alents are best needed and
moves to that t eam. “There is no organizatio nal structure keeping you from being in c lose proximity to
the people w ho you’d help or be helped by most,” says Valve’s quirky handbook for new employees.
Each t eam agrees o n it s goa ls, dead lines, work rules, t ask assi g nments, and other issues. The
t eam has a l ead member who provides coordinatio n, b ut that l ead member is not a traditio nal
manager. Proj ect ro les are det ermined th roug h mutual agreement; pay is ca lculated from peer
evaluati o ns of each employee’s cont ributi o n t o Va lve.
Contrary to w hat you might think, Valve is n’t a st artup with a handful of people. It’s a multi-b illion
dollar company employing more than 300 engineers, artists, and other professionals. Yet for almost two
decades, Valve’s seeming ly chaotic structure has suppressed bureaucracy and empowered employees
t o discover and produce innovative products. “Hierarchy is great for maintaining predictability and
repeatability,” says Valve’s employee handbook. “But w hen you’re an e ntertainment company that’s
spent the last decade going out of its way to recruit the most intelligent, innovative, talented people o n
Earth, t elling them to sit at a desk and do what they’re t old obliterates 9 9 percent of their value.·s •
Tim Eulitz/Wiklmedla

Chapter Th irteen Designing Organizational Structures 379
the team-based structure from top to bottom, including W. L. Gore & Associates, Semco SA, and Valve
Corporation, where almost all associates work in teams.
Evaluating the Team-Based Structure The team-ba~ structure has gained popularity because it
tends to be flexible and responsive in turbulent environment~. 52 It tends to reduce costs because teams have
Jess reliance on formal hierarchy (direct supervision). A cross-functional team structure improves commu-
nication and cooperation across traditional boundaries. With greater autonomy, this strucntre also allows
quicker and more informed decision making. 53 For this reason, some hospitals in Canada and elsewhere
have shifted from functional department~ to cross-functional teams. Teams composed of nurses, radiolo-
gists, anaesthetists, a pharmacology representative, possibly social workers, a rehabilitation therapist, and
other specialists communicate and coordinate more efficiently, thereby reducing delays and errors.54
The team-ba~ed strucntre also has several limitations. It can be costly to maintain due to the need for
ongoing interpersonal ski lls training. Teamwork potentially takes more time to coordinate than formal
hierarchy during the early stages of team development. Employees may experience more stress due to
increased ambiguity in their roles. Team leaders also experience more stress due to increa~ed confl ict,
loss of functional power, and unclear career progression ladders. In addition, team structures suffer
from duplication of resources and potential competition (and Jack of resource sharing) across teams55
MATRIX STRUCTURE
ABB Group, one of the world’s largest power and automation technologies engineering firms, has four
product divisions, such as power grids and process automation. It employs more than 140,000 people
across 100 countries, so the global giant also has several regional groups (Americas, AMEA, and
Europe). What organizational structure would work best for ABB? For example, should the head of
power grids in North America report to the worldwide head of power grids in Zurich, Switzerland, or
to the head of the Americas operations?
For ABB, the answer is to have a matrix structure, which overlays two structures (in this ca.~e. a product
divisional and geographic divisional structure) to leverage the benefits of both.56 Exhibit 13.6 shows a
EXHIBIT 13.6 M atrix Organizational Structure at ABB Group
Pro du ct Groups
Americas 11
•
•
•
•
• Product leader In that region
Regional Groups
A sia, Mrddle East
Afnca (AMEA)
•
•
•
•
Europe ‘
•
•
•
•
Not~: This diagram i…:; for illustrative purposes only. It represent,.:; a simplified version or ABB’s most recent structure. The complete top-level
structure also ha..:: three nonmatri.’ed func-tional group..:; (finance. Jeg.al. HR) reporting to the CEO. ln addj tion. this diagram a..:;sumes ABB has a
pure matrix structure. in which both product and regional chiefs have equal pOwer. ABB says it continues to have a maLrix SLrUC-ture. but its recent
reorganizatjon seems LO gj\•e more direct line authority to product group..:; rather than regional groups.

380 Part Four Organizational Processes
product-geographic matrix structure, which is a simplified version of ABB’s strucnrre. The dots represent
the individuals (product leaders) who have two bosses. For example, the head of power grids in Europe
reports to ABB’s worldwide president of power grids as well as to ABB’s president of European operations.
A common mistake is to assume that everyone in this type of matrix organizational structure reports
to two bosses. In reality, only managers at one level in the organization (typically country-specific
product managers) have two bosses. ABB’s executive responsible for power grids in Europe reports to
both the product and regional leaders. However, employees below that country product leader report to
only one manager in the European operations.
The geographic-product matrix structure is likely the most common matrix design among global com-
panies. For instance, Nestle, Procter & Gamble, and Shell have variations of this matrix structure because
these fi rms recognize that regional groups and product/services groups are equally important. Other vari-
ations of matrix structures also exist in global businesses, however. Investment bank Macquarie Group
overlays client groups (such as securities, investment funds, and currencies/commodities) with four func-
tional groups (risk management, legal/governance, financ ial management, and corporate operations).57
Global organizations tend to have complex designs that combine differen t types of structures, so
a “pure” matrix design is relatively uncommon. A pure matrix gives equal power to leaders of both
groups (regions and products, for example), whereas in real ity companies often give more power to one
set of groups while the other set of groups has “dotted line” or advisory authority. So, although ABB’s
head of power grids has two bosses, the global president of power grids might have more final say or
line authority than the regional leader.
Some companies also deviate from the pure matrix structure by applying it only to some regions. One
such example is Cummins Inc., which is mainly organized around product divisions but has a matrix
structure in China, India, and Russia. These markets are large, have high growth potential, and tend to
be less visible to headquarters, so the country leaders are given as much authority as the product lead-
ers within those regions. ” I think in China there’s still enough lack of transparency, there’s still enough
uniqueness to the market that having some kind of coordination across business units gets the greatest syn-
ergies,” explains Michael Barbalas, a board member of the American Chamber of Commerce in China. 58
A second type of matrix structure, which can be applied to small or large companies, overlays a func-
tional structure with a project structure.59 Bioware adopted this project-functional matrix structure soon
after the Edmonton-ba~ed electronic games company wa~ born two decades ago. Most Bioware employees
have two managers. One manager leads the specific project to which employees are a~signed, such as Star
Wars, Mass Effect, and Dragon Age; the other manager is head of the employee’s func tional specialization,
such as art, programming, audio, quality assurance, and design.60 Employees are assigned permanently to
their functional unit but physically work with the temporary project team. When the project nears comple-
tion, the func tional boss reassigns employees in his or her functional specialization to another project.
Evaluating the Matrix Structure The project-functional matrix structure usually makes very
good use of resources and expertise, making it ideal for project-ba~ed organizations with fl uctuat-
ing workloads. When properly managed, it improves communication efficiency, project flexibility,
and innovation, compared to purely functional or divisional designs. It focuses employees on serv-
ing cl ients or creating products yet keeps people organized around their specialization. The result is
that knowledge sharing improves and people are more efficiently assigned to work where they are
most needed. Matrix structures for large organizations are also a logical choice when two different
dimensions are equal ly important (such as regions and products at AB B Group). Structures determine
executive power and what should receive priority; the matrix structure works best when the business
environment is complex and two different dimensions deserve equal attention and integration. Execu-
tives who have worked in a global matrix also say they have more freedom, likely because their two
bosses are more advisory and less oriented toward command and control leadership.61
In spite of these advantages, the matrix structure has several well-known problems.62 One concern is
that it increa~es confl ict among managers who equally share power. Employees working at the matrix
level have two bosses and, consequently, two sets of priorities that aren’t always aligned with each other.
Project leaders might squabble with functional leaders regarding the a~signment of specific employees
to projects a~ well as regarding the employee’s technical competence. However, successful companies

Chapter Thirteen Designing Organizational Structures 381
manage this conflict by developing and promoting leaders who can work effectively in matrix struc-
tures. “Of course there’s potential for friction,” says an executive at IBM India. “In fact, one of the
prerequisites to attaining a leadership position at IBM is the ability to functio n in a matrix structure.”63
Ambiguous accountability is another challenge with matrix structures. In a functional or divi-
sional structure, one manager is responsible for everything, even the most unexpected issues. But in a
matrix structure, the unusual problems don’t get resolved because neither manager takes ownership of
them. 64 Due to this ambiguous accountability, matrix structures have been blamed for corporate ethical
misconduct, such as embezzlement at Hana Fi nancial Group in Korea and massive bribery at Siemens AG
in Ger many. Oracle co-CEO Mark Hurd warned of this problem when he was CEO of Hewlett-Packard:
“The more accountable I can make you, the easier it is for you to show you’re a great performer,”
says Hurd. “The more I use a matrix, the easier I make it to blame someone else.”65 The combination
~ “‘l Global Connections 13.3:
MATRIX STRUCTURE TROUBLES AT HANA FINANCIAL GROUP
Hana Financial Group reorganized around a matrix structure that overlaps its client businesses
(retail banking, brokerage, insu rance) with product groups (money management, investments,
bonds, etc.). The Korean bank says the new structure has noticeably improved collaboration
across businesses and produced better financial results.
Korea’s financial supervisory service (FSS) has a different opinion of Hana’s structure. It claims
that Hana’s matrix structure is partly responsible for widespread embezzlement of gift certifi-
cates for tourists at about 60 bank branches. “In a matrix structure, marketing, performance
reviews, and the power to make decisions on personnel lies with the head of the business unit,
while internal control and risk management are the responsibility of the affiliated company’s
CEO,” explains a high-ranking FSS official. “This can lead to a blind spot in management.”66
OtLt2;tli.J
Hana Bank
The South Korean government concluded that the matrix structure at Hana Financial Group is
partly responsible for widespread embezzlement at dozens of bank branches.
© REUTERS I A la my Stock Photo

382 Part Four Organizational Processes
of dysfunctional conflict and ambiguous accountability in matrix structures also explains why some
employees experience more stress and some managers are Jess satisfied with their work arrangements.
NETWORK STRUCTURE
BMW AG and Daimler AG aren’t eager to Jet you know this, but some of their vehicles manufac-
tured by them with Germanic precision are not constructed by them or in Germany. Some of BMW’s
5 Series vehicles and all of Daimler’s Mercedes G class luxury SUVs are made in Austria by Magna
Steyr, a division of Canada’s Magna Corporation. Both BMW and Daimler Benz are hub organiza-
tions that own and market their respective brands, whereas Magna Steyr and other suppliers are spokes
around the hub that provide production, engineering, and other services that get the auto firms’ luxury
products to customers67
BMW, Daimler, and many other organizations are moving toward a network st ructur e a~ they
design and build products or serve clients through an alliance of several organizations.68 As Exhibit 13.7
illustrates, this collaborative structure typically consists of several satellite organizations bee-hived
around a hub or core firm. The core firm orchestrates the network process and provides one or two
other core competencies, such as marketing or product development. In our example, BMW or Mer-
cedes is the hub that provides marketing and management, whereas other firms perform many other
functions. The core firm might be the main contact with customers, but most of the product or service
delivery and support activities are farmed out to satell ite organizations located anywhere in the world.
Extranets (Web-based networks with partners) and other technologies ensure that information flows
easily and openly between the core firm and its array of satell ites69
One of the main forces pushing toward a network structure is the recognition that an organization
has only a few core compelencies. A core competency is a knowledge base that resides throughout the
organization and provides a strategic advantage. As companies discover their core competency, they
outsource noncritical tasks to other organizations whose core competency is performing those tasks.
EXHIBIT 13.7 A Network Organ izational Structure

Chapter Thirteen Designing Organizational Structures 383
For instance, BMW decided long ago that fac ilities management is not one of its core competen-
cies, so it outsourced this function in its British operations to a company that specializes in facilities
management70
Companies are also more likely to form network structures when technology is changing quickly
and production processes are complex or varied?’ Many firms cannot keep up with the hyperfast
changes in info rmation technology, so they have outsourced their entire info rmation system depart-
ments to IBM, HP Enterprise Busi ness, and other firms that spec ialize in information system services.
Similarly, many high-technology fir ms fo rm networks with Toronto-based Celestica and other elec-
tronic equipment manufac turers that have expertise in diverse production processes.
Evaluating the Network Structure Organizational behaviour theorists have long argued that
executives should think of their companies metaphorically a~ plasma-like organisms rather than rigid
machines72 Network structures come close to the organism metaphor because they offer the fl ex-
ibility to realign their structure w ith changi ng environmental requirements. If customers demand a
new product or service, the core firm fo rms new all iances w ith other firms offering the appropriate
resources. For example, by working with Magna Steyr, Jaguar Land Rover was recently able to launch
a w ider variety of new models than was possible with its own manufacturing resources. When Magna
Steyr’s clie nts need a di ffere nt type of manufacturing, they aren’t saddled with nonessential facilities
and resources. Network structures also offer efficiencies because the core firm becomes globally com-
petitive as it shops worldwide for subcontractors w ith the best people and the best technology at the
best price. Indeed, the pressures of global competition have made network structures more vital, and
computer-based information technology has made them possible.73
A potential disadvantage of network structures is that they expose the core firm to market forces.
Other companies may bid up the price for subcontractors, whereas the short-term cost would be lower
if the company hired its own employees to perform the same function. Another problem is that inform a-
tion technology makes worldwide communication much easier, but it has not yet replaced the degree of
control that organizations have when manufacturi ng, marketing, and other functions are in-house. T he
core firm can use arm’s-length incentives and contract provisions to maintain the subcontractor’s qual-
ity, but these actions are relatively crude compared with maintaining the quality of work performed by
in-house employees.
Contingencies of Organizational Design
L04 Most organizational behaviour theories and concepts have contingencies: Ideas that
work well in one sin1ation might not work as well in another situation. This contingency
approach is certainly relevant when choosing the most appropr iate organizational struc-
ture.74 In this section, we introduce four contingencies of organizational design: external environment,
size, technology, and strategy.
EXTERNAL ENVIRONMENT
The best structure fo r an organization depends on its external environment. The external environment
includes anything outside the organization, including most stakeholders (e.g., clients, suppliers, gov-
ernment), resources (e.g., raw materials, human resources, information, fi nances), and competitors.
Four characteristics of external environments influence the type of organizational structure best suited
to a particular situation: dynamism, complexity, diversity, and hostility?5
Dynamic versus Stable Environments Dynamic environment~ have a high rate of change,
leadi ng to novel sin1ations and a lack of identifiable patterns. Organic structures in which employees are
experienced and coordinate well in teams are better suited to dynamic environments, so the organization
can adapt more quickly to changes. 76 In contrast, stable environments are characterized by regular cycles
of activity and steady changes in supply and demand for inputs and outputs. Events are more predictable,

384 Part Four Organizational Processes
enabling the firm to apply rules and procedures. Mechanistic structures are more effic ient when the envi-
ronment is predictable, so they tend to be more profitable than organic structures under these conditions.
Complex versus Simple Environments Complex environments have many elements, whereas
simple environments have few things to monitor. As an example, a major university library operates in
a more complex environment than a small-town public library. The university library’s clients require
several types of services-book borrowing, online ful l-text databases, research centres, course reserve
collections, and so on. A small-town public library has fewer of these demands placed on it. The more
complex the environment, the more decentral ized the organization should become. Decentral ization is
a logical choice for complex environments because decisions are pushed down to people and subunits
with the necessary information to make informed choices.
Diverse versus Integrated Environments Organizations located in diverse environments
have a greater variety of products or services, clients, and regions. In contrast, an integrated environ-
ment has only one type of client and product and serves only one geographic area. The more diversi-
fied the environment, the more the firm need~ to use a divisional structure aligned w ith that diversity.
If it sells a single product around the world, a geographic divisional structure would align best w ith
the firm’s geographic diversity, for example. Diverse environments also call for decentralization. By
pushing decision making fur ther down the hierarchy, the company can adapt better and more quickly to
diverse clients, government requirements, and other circumstances related to that diversity.
Hostile versus Munificent Environments Firms located in hostile environments face resource
scarcity and more competition in the marketplace. These conditions are typically dynamic as well
because they reduce the predictability of access to resources and demand for outputs. Organic strucntres
tend to be best in hostile environments. However, when the environment is extremely unfavourable-
such as a severe shortage of supplies or tumbling market shar~rganizations tend to temporari ly
centralize so that decisions can be made more quickly and executives fee l more comfortable being in
control.77 Ironically, centralization may result in lower-quality decisions during organizational crises,
because top management has less information, particularly when the environment is complex.
ORGANIZATIONAL SIZE
Larger organizations have different structures than do smaller organizations, for good rea~on.78 As the
number of employees increases, job specialization increases due to a greater division of labour. The greater
division of labour requires more elaborate coordinating mechanisms. Thus, larger firms make greater use
of standardization (particularly work processes and outcomes) to coordinate work activities. These coor-
dinating mechanisms create an administrative hierarchy and greater formalization. At one time, growing
organizations reduced their reliance on informal communication as a coordinating mechanism. How-
ever, emerging information technologies have enabled large firms to coordinate work more through
informal communication than wa~ previously possible.79
Larger organizations also tend to be more decentral ized than are smaller organizations. Execu-
tives have neither sufficient time nor expertise to process al l the decisions that significantly influence
the business as it grows. Therefore, decision-making authority is pushed down to lower levels, where
employees are able to make decisions on issues within their narrower range of responsibility.
TECHNOLOGY
Technology is another factor to consider when designing the best organizational structure for the situ-
ation.80 Technology refers to the mechanisms or processes an organization relies on to make its products
or services. In other words, technology isn’t just the equipment used to make something; it also includes
how the production process is physically arranged and how the production work is divided among
employees. The two main technological contingencies are variability and analyzabi lity, both of which we
described as job characteristics in Chapter 6. Task variability refers to how predictable the job duties are

Chapter Thirteen Designing Organizational Structures 385
from one day to the next. In jobs w ith high variability, employees perform several types of ta~ks, but they
don’ t know which of those tasks are required from one day to the next. Low variability occurs when the
work is highly routi ne and predictable. Task ana/yztJbility refers to how much the job can be performed
using known procedures and rules. In jobs with high ta~k analyzability, employees have well-defined
guidelines to direct them through the work process. In jobs with low task analyzability, employees tackle
unique sin1ations with few (if any) guidelines to help them determine the best course of action.
An organic, rather than a mechanistic, structure should be introduced where employees perform tasks
with high variability and low analyzability, such as in a research setting. The reason is that employees
face unique situations with little opportunity for repetition. In contrast, a mechanistic structure is pre-
fe rred where the technology has low variability and high analyzability, such a~ an assembly line. Assem-
bly work is routine, highly predictable, and has well-established procedures-an ideal situation for a
mechanistic structure to operate eff iciently.
Does your job require an organic or mechanistic structure? You ca n d iscover w hich
structure is be tte r fo r your job by completing this self-assessment in Connect.
ORGANIZATIONAL STRATEGY
Organizational st r ategy refers to the way the organization positions itself in its environment in
relation to its stakeholders, given the organization’s resources, capabilities, and mission .81 In other
words, strategy represents the decisions and actio ns applied to achieve the organization’s goals.
Although size, tech nology, and environment influe nce the optimal organizational str ucture, these
contingencies do not necessarily determi ne structure. Instead, corporate leaders formu late and imple-
ment strategies that shape both the characteristics of these contingencies as well a~ the organization’s
resulting structure.
This concept is summed up with the simple phra~e “structure follows strategy.”82 Organizational lead-
ers decide how large to grow and which technologies to use. They take steps to define and manipulate
their environments, rather than Jet the organization’s fate be entirely determined by external influences
(see the open systems perspective in Chapter 1). Furthermore, organizational structures don’t evolve a~ a
natural response to environmental conditions; they are the outcome of conscious human decisions. Thus,
organizational strategy infl uences both the contingencies of structure and the structure it~elf.
If a company’ s strategy is to compete through innovation, a more organic structure would be pre-
ferred because it is ea~ier for employees to share knowledge and be creative. If a company chooses a
low-cost strategy, a mechanistic structure is preferred because it maximizes production and service
effic iency.83 O verall, it is now apparent that organizational structure is infl uenced by size, technology,
and environment, but the organization’s strategy may reshape these elements and loosen their connec-
tion to organizational structure.
Chapter Summary
LO 1 Describe three types of coordination in organiza tional st ructures.
Organi zational str·ucture is the division of labour, as well as the patterns of coordination, commu-
nication, workfl ow, and formal power that direct organi zational activities. All organizational struc-
tures di vide labour into distinct tasks and coordinate that labour to accomplish common goals . The primary means
of coordination are informal communication, for mal hierarchy, and standardi zation.

386 Part Four Organizational Processes
L02 Discuss the role an d eff ects of s pan of control, cent ralization, and form alization, and r elate
these elem en ts to orga nic and m echanistic organizational structures.
The four basic e lements of organizational structure are span of control, centralization, for mal·
ization, and departmentalization. The optimal span of control- the number of people directly reporting to the
next level in the hierarchy-depends on what coordinating mechanisms are present other than fo rmal hierarchy,
whether employees perform routine tasks, and how much interdependence there is among employees w ithin the
department.
Centralization occurs when formal decision authority is held by a small group of people, typically senior exec·
utives. Many companies decentral ize as they become larger and more complex, but some sections of the company
may remain central ized while other sections decentralize. Formal ization is the degree to which organizations stan·
dardize behaviour through rules, procedures, for mal training, and related mechanisms. Companies become more
fo rmalized as they get older and larger. Formalization tends to reduce organizational flex ibility, organ izational
learning, creativity, and job satisfaction.
Span of contro l, centralization, and for malization cluster into mechanistic and organic structures. Mechanistic
structures are characterized by a narrow span of control and a high degree o f for malization and centralization.
Companies with an organic structure have the opposite characteristics.
L03 Id en tify and evalu ate six types of departmentalization.
Departmentalization speci fies how e mployees and their activities are grouped together. It establishes
the chain of command, focuses people around common mental models, and encourages coordina·
tion through in fom1al communication an10ng people and subunits. A simple structure employs few people , has
minimal hierarchy, and typically offers one d istinct product or service. A functional structure organizes e mployees
around specific knowledge or other resources. This structure fosters greater specialization and improves direct
supervision, but it weakens the focus on serving clients or developing products.
A divisional s tructure groups employees around geographic areas, clients, or outputs. This structure accom·
modates growth and focuses employee attention on products or customers rather than tasks. However, this
structure also duplicates resources and creates si los o f knowledge. Team-based structures are very flat, with low
for mal ization, and organize self-directed teams around work processes rather than func tional specialties. The
matrix structure combines two s tructures to leverage the benefits o f both types. However, this a pproach requires
more coordination than functional or pure divisional structures, may dilute accountability, and increases con-
fl ict. A network structure is an alliance o f several organizations for the purpose o f creating a product or serving
a client.
L04 Explain h ow th e ex1ernal en vironment, organizational size, techn ology, an d s trategy are
relevant when designing an organization al s tru ctur e.
The best organizational structure depends on whether the environment is dynan1ic or stable, com-
plex or s imple, diverse or integrated, and hostile or munificen t. Another contingency is the organization’s size.
Larger organizations need to become more decentralized and more for malized. The work unit’s technology-
including variabil ity of work and analyzability o f problems-influences whether it should adopt an organic or
mechanistic structure. These contingencies infl uence but do not necessarily determine structure. Instead, corpo-
rate leaders form ulate and implement strategies that shape both the characteristics of these contingencies and the
organization’s resulting structure.
Key Terms
cent ralization
divis ion al s tructur e
fonualization
functional structure
matrix st ru cture
mech anistic s tru ctur e
n etwork st ructure
orga nic s tructure
orga nization al strategy
orga nization al structure
span ol’ con trol
team -bas ed structure

Chapter Thi rteen Desig ning O rganizational Structures 387
Critical Thinking Questions
I. Samsung Group’s organizational structure wa~ described at the beginning of this chapter. What coordinating
mechanism is likely most common in this organization? Descri be the extent and for m in which the other two
types of coord ination might be apparent at Samsung.
2. Think about the business school or other educational group where you are currently attending classes. What
is the dominant coordinating mechanism used to guide or control the instructor? Why is this coord inating
mechanism used the most here?
3. Administrative theorists concluded many decades ago that the most effective organ izations have a narrow
span o f contro l. Yettoday’s top-performing manufactur ing firms have a wide span o f control. Why is this
possible? Under what circumstances, if any, should manufactur ing fir ms have a narrow span o f control?
4. Leaders o f large organizations struggle to identify the best level and types of centralization and decentraliza-
tion . What should companies consider when determining the degree of decentral ization?
5. Diversi fied Technologies Ltd. (DTL) makes four types o f products, with each type to be sold to different
types of clients. For exan1ple, one product is sold exclusively to automobile repair shops, whereas another is
used mainly in hospitals. Expectations w ithin each client group are sur prisingly similar throughout the world.
The company has separate marketing, product design, and manufacturing facilities in Asia, North America,
Europe, and South America because, unti l recently, each j urisdiction had unique regulations governing the
production and sales of these products. However, several government~ have begun the process o f deregulat-
ing the products that DTL designs and manufactures, and trade agreements have opened several markets to
fore ign-made products. Which for m o f departmentalization might be best fo r DTL if deregulation and trade
agreements occur?
6 . Mechanistic and organic structures are two organizational for ms. How do the three types of coordination
mechanisms operate through these for ms?
7 . From an e mployee perspective, what are the advantages and disadvantages of working in a matrix structure?
8. S uppose you have been hired as a consultant to diagnose the environmental characteristics o f your college
or university. How would you describe the school’s external environment? Is the school’s existing s tructure
appropr iate for this environment?
Case Study:
MERRITT’S BAKERY
by Steven L. McShan e, Curtin University (Australia) and University of Victoria (Canad a)
In 1979, Larry Merritt and his wife Bobbie bought T he Cake Box, a s mall business located in a tiny 42-square
metre store in Tulsa, Oklahoma. T he couple were the only employees. ” I would make cakes and Bobbie would
come in and decorate them,” Larry recalls. Bobbie Merritt was already skilled in decorating cakes, whereas bak-
ing wa~ a new occupation for Larr y Merr itt, who previous ly worked as a discount store manager. So, Larry spent
hours pouring over baking books in the local library and testing recipes through trial-and-e rror experimentation.
” I threw away a lot of ingredients that firs t year,” he recalls .
Sales were initially slow. Then, a doughnut shop around the corner was put up for sale and its owner made it
possible for the Merritts to buy that business. T hey moved to the larger location and changed the company’s name
to Merritt’s Bakery to reflect the broader variety of products sold. T he Merritts hired their fi rst two e mployees,
who performed fro nt s tore sales and service. Over the next decade, Merritt’s Bakery’s physical space doubled and
its revenues increased 13-fold . The company e mployed 20 people by the time it made it~ next move.
In 1993, Merritt’s Bakery moved to a 557-square metre location across the street. T he business becan1e so popular
that customers were lining up down the street to buy its fresh-baked goods. “T hat looks like success to a lot of peo-
ple, but that wa~ fail ure,” says Bobbie Merritt. The problem was that t11e couple didn’t want to delegate production to

388 Part Four Organizational Processes
employees, but they couldn’ t produce their baked goods or decorate their carefully crafted cakes fast enough to keep
up with demand. “We fel t like fail ures because we had to work those 20 hours (per day),” she reflects.
At some point, the Merritts realized that they had to become business owners and managers rather than bakers.
They devised a plan to grow the business and drew up an organi zational structure that for malized roles and respon-
s ibi lities. When a second Merritt’s Bakery s tore opened across town in 2001, each store wa~ a~signed a manager, a
person in charge of baking production, another in charge of cake decorating and pastries, and someone responsible
fo r sales. A third store opened a few years later. Larry worked on maintaining quality by training bakery staff at
each store. ” Because it is so difficult to find qualified bakers nowadays, I want to spend more time teaching and
developing our product~.” he said at the time.
C hr istian Merritt, one of Larry and Bobbie’s sons, j oined the business in 2000 and has since become head of
operations. An engineer by training with experience in the te lecommunications industry, Chr istian soon developed
flow charts that describe precise procedures for most work activities, ranging from simple store-fro nt tasks (ca~hier­
ing) to unusual events such as a power outage. These documents standardized work activities to maintain quality
with less reliance on di rect supervision. C hr istian also introduced computer systems to pool information across
stores about current inventory levels, which products are selling quickly, and how much demand exists for Merritt’s
fan10us custom cakes. The information improved decision making about production, staffing, and purcha~ing
without having to directly contact or manage each store a~ closely.
In late 2007, Merritt’s Bakery’s opened a dedicated production centre near the original store and moved all pro-
duction staff into the building, affectionately called ” the Fort.” T he central ized production facility reduced costs
by removing duplication o f staff and equipment, provided more consistent quality, and allowed the stores to have
more fro nt store space fo r customers.
Merr itt’s Bakery refined its training programs, from the initial orientation session to a series of modules on
specific skills . For example, front store staff now complete a series of clinics that add up to 20 hours of training.
The company also introduced special selection processes so people with the r ight personality and skills are hired
into these j obs. Employees at Merr itt’s production faci lity receive decorator training through a graduated program
over a longer time. One or two managers at the production site closely coach up to five new hires.
Today, Merritt’s Bakery employs more than 80 people, including production managers, store managers, and a mar-
keting director. 1\vo-thirds of the bus iness is in the creation of cakes for birthdays, weddings, and other events, but the
company also has three busy and popular stores across Tulsa. “We’re just now getting the pieces in place to start to treat
Merritt’s Bakery like a business, with a lot of part~ that we manage from a distance,” says Christian Merritt. “We’re
present but detached; we have our hands in a lot of thing.~. but it’s in managing stores instead of operating them.”
Discussion Questions
I. How have the division and coordination of labour evolved at Merritt’s Bakery from its beginnings to today?
2 . Describe how span of control, centralization, and fo rmalization have changed at Merritt’s Bakery over the
years? Is the company’s organizational structure today more mechanistic or organic? Are these three organi-
zational s tructure elements well-s uited to the company in their current form? Why or why not?
3. What fo rm of departmentalization currently exist~ at Merritt’s Bakery? Would you recommend this fo rm of
departmentalization to this company? Why or why not?
Source: Adapted from C. Har””Y and K. Morouney, Jo urnal of Management Education 22 (June 1998). pp. 425-429. Used
with permission of the authors.
Team Exercise:
THE CLUB ED EXERCISE
Purpose This exercise is designed to help you understand the issues to consider when designing organizations
at various stages of growth.
Materials Each student team s hould have several flip chart sheet~ or other means to draw and show t11e class
several organizational charts.
Instructions Tean1s receive up to four scenarios, one at a time in chronological sequence. For each scenario,
teams are given a fixed time (e.g., 15 minutes) to draw an organi zational chart that best s uits the fir m in that

Chapter Thi rteen Desig ning O rganizational Structures 389
scenario. The first scenario is presented below. T he exercise and debr iefing require approximately 90 minutes,
although fewer scenarios can reduce the time somewhat.
Srep I: Students are placed in teams (typically four or five people).
Srep 2: After reading Scenario # I presented below, each team wi ll design an organ izational chart (depart-
mentalization) that is most appropriate for this s ituation. Students should be able to describe the type of structure
drawn and explain why it is most appropriate. The structure should be drawn on a flip chart or using a software
progran1 for others to see dur ing later class discussion. T he instructor wi ll set a fixed time (e.g., 15 minutes) to
complete this task before the next scenario is presented.
Scenario# I Determined to never s uffer another cold Canadian winter, you secured venture capital funding for a
new resort business called Club Ed on a s mall Caribbean island. The resort is under construction and is scheduled
to open in less than one year. The resort will employ approximately 75 staff (most e mployed full-time). Draw an
organizational chart that best suits the organization when it opens, and j ustify your decision.
Srep 3: At the end of the time allowed, the instructor will present Scenario #2 and each team will be asked
to draw another organizational chart to suit that s ituation. Again, students should be able to describe the type of
structure drawn and explain why it is appropr iate.
Srep 4: At the end of the time allowed, the instructor wi ll present Scenario #3 and each tean1 will be asked to
draw another organizational chart to s uit that s ituation.
Srep 5: Depending on the time available, the instructor might present a fo urth scenario. T he class will gather
to present their designs for each scenario. Dur ing each presentation, tean1s s hould describe the type of structure
drawn and explain why it is appropriate.
Based on C. Harvey and K. Morouney. Jouma/ of Management Educarion22 (June 1998). pp. 425-429.
Self-Assessments for Chapter 13
I
SELF-ASSESSMENT NAME
Which organizational structure do you prefer?
Does your job require an organic or mechanis-
tic structure?
DESCRIPTION
Personal values influence how comfortable you are working in
di fferent organizational structures. You might prefer an organization
with clearly defined rules or no rules at all. You might prefer a firm
where almost any e mployee can make important decisions or one in
which important decisions are screened by senior executives. This
se(f .. asse..~sment estimates which of fo ur organizational structures
best fiL~ your needs and expectations.
Different jobs require di fferent types of organizational strucrures.
For some jobs. employees work better in an organic structure. In
other jobs. a mechanistic structure helps incumbents perform their
work better. Think of the j ob you currently have or recently held.
or even your ‘job” a.’i a s tudent. T his self·assessment estimates
whether the type of work you perfonn is better suited to a
mechanistic or organic organizational structure.

CHAPTER 14
Organizational Culture
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
LO 1 Describe t he e lements of o rga nizational culture and discuss t he importance of organizational subcultures.
L02 List four categories of artifacts th ro ugh which corp orate culture is deciph ered .
L03 Discuss the importa nce of o rga nizational cu ltu re and t he conditions unde r w hich o rga nizational
culture strengt h imp roves o rganization al pe rformance.
L04 Compare a nd cont rast four st rategie s for me rg in g o rganizat ional cultures.
LOS Describe five st rategies fo r chang ing a nd strengthen ing an o rganizatio n’s cu lture, includi ng t he
applicatio n of attract ion-select io n-attrit ion theory.
L06 Describe the o rga nizational socia lizat ion p rocess and identify st rategie s to im prove that p rocess.
390
Jac k Newton and Rian Gauvreau launched Clio a decad e ago with t he view t hat successful
companies rely o n a stro ng orga nizatio na l c ulture. Accord ingly, the two founde rs of the cloud-
ba sed leg al practice management com pany based in Bu rnaby, B.C., personally screened every
applicant for cultural fit. Clio has since beco me o ne of th e world ‘s leading cloud-based platforms
in its field an d o ne of Can ad a’s fa stest-g rowing technology co mpanies. Clio’s wo rkfo rce

Chapter Fourteen Organizational Culture 391
tripled in less than three years to 200 employees, including many hired at its new offices in
Toronto and Ireland.
Clio’s growth was so rapid that Newton and Gauvreau could no longer review each newcomer’s
personal values for compatibility with Clio’s culture. “We got a bit more removed from the day-to-day
hiring,” Newton admits. “We realized for the first time we were scaling at such a rate that someone
was brought in w ithout weighing in on our cultural barometer.” Furthermore, the company’s values
weren’t documented; they were just fuzzy ideas understood by the founders and senior employees.
“We learned and understood them through the stories and legends told by senior employees and
our founders,” explains Christopher Yeh, Clio’ s manager of talent development.
The solution was to document the firm’s values and ensure that employees enacted them in their work.
A cross-functional “values team” of 1 0 employees identified stories, actions/behaviours. and people that
seemed to best represent Clio’s culture, as well as elements that were contrary to the desired culture.
Guided by these artifacts, the team wrote down a set of values, which was further refined after receiving
feedback from employees across the company. From this process, the team produced a final a list of seven
core values, including “Customer success comes first;” “Work hard, be agile;” and “Stay fit, have fun.•
To keep Clio’s core values alive, the company launched a survey that asked employees to anonymously
“help us identify where we were falling short at living our values,” explains Yeh. The company also created
“Clio Ministries,” which are essentially volunteer “mini values teams that are passionate about one of
[Clio’s) values.” These ministries identify solutions to concerns raised by employees in the values survey.
Today, Clio has a stronger culture that more clearly guides employee behaviour and decision making.
“Now; says co-founder Newton, “people know at an instinctiVe level if the decisions they make are right.”‘
Clio has a strong organizational culture and applies several strategies we will describe in this chap-ter to maintain and sustain that culture throughout its meteoric growth. Orga nizational culture
consists of the values and assumptions shared within an organization2 It defines what is important and
unimportant in the company and, consequently, directs everyone in the organization toward the “right
way” of doing things. You might think of organizational culture a~ the company’s DNA-invisible to
the naked eye, yet a powerful template that shapes what happens in the workplace.
This chapter begins by identifying the elements of organizational culture and then describing how
culture is deciphered through artifacts. This is fo llowed by a discussion of the relationship between
organizational culture and performance, including the effects of cultural strength , fit, and adaptabil ity.
We then turn our attention to the challenges of merging organizational cultures and the solutions to
those challenges. The latter part of this chapter examines ways to change and strengthen organizational
culture, including a closer look at the related topic of organizational socialization.
Elements of Organizational Cu ltu re
L01 Organizational culture consists of shared values and a~umptions. Exhibit 14.1 illustrates
how these shared values and assumptions relate to each other and are associated with arti-
facts, which are discussed later in thi~ chapter. Values are stable, evaluative beliefs that guide
our preferences for outcomes or courses of action in a variety of situations (see Chapters 1 and 2)? They are
conscious perceptions about what is good or bad, right or wrong. In the context of organizational culture,
values are discussed a~ shared values, which are values that people within the organization or work unit have
in common and place near the top of their hierarchy of values.4 For example, from our opening case study,
Clio employees embrace seven shared values, including “Live a learning mindset,” ”Thrive as #TeamClio,”
(team orientation), and “Stay fi t, have fun.”
Organizational culture also consists of shared assumptions-a deeper element that some experts
believe is the essence of corporate culture. Shared assumptions are nonconscious, taken-for-granted
perceptions or ideal prototypes of behaviour that are considered the correct way to think and act toward
problems and opportunities. Shared a~sumptions are so deeply ingrained that you probably wouldn’t
discover them by surveying employees. Only by observing employees, analyzing their decisions, and
debriefing them on their actions would these assumptions rise to the surface.

392 Part Four O rganizational Processes
EXHIBIT 14.1 Organizational Cultu re Assumptions, Values, and Artifacts
Arti facts of
organizational culture
Physical
structures
Language
Rituals and
ceremonies
Stories
and legends
Shared values
• Conscious beliefs
• Judgments about what Is
good or bad. right or w~g
Shared assumptions
• Nonconsclous, taken-for·
granted beliefs
• Implicit mental
Ideal prototypes of
behaviour
Espoused versus Enacted Values Most corporate websites have “Careers” web pages for job
candidates, and many of these sites proudly list the company’s core values. Do these values really represent
the organization’s culture? Some do, but these pages more likely describe espoused values-the val-
ues that corporate leaders hope will eventually become the organization’s culture, or a t least the values
they want others to believe guide the organization’s decisions and actions.5 Espoused values are usually
socially desirable, so they present a positive publ ic image. Even if top management acts consistently with
the espoused values, lower-level employees might not do so. Employees bring diverse personal values
to the organization, some o f which might confl ict w ith the organization’s espoused values.
Consider what BP says about its culture. The British energy giant list~ safety ftrst among it~ fi ve core
values: ‘ ‘Everything we do relies upon the safety of our workforce and the communities around us. We care
about the safe management of the e nvironment.” BP executives likely give the safety value considerable pri-
ority today, but past events suggest that, until recently, it was probably no more than an espoused value. BP
was at the centre of the 20 I 0 Gulf of Mexico o il spill environmental disaster. A few months before the spill
occurred, the U.S. government penalized BP with the largest health and safety fine in history for failing to
sufficiently improve safety at it~ Texas City refinery. Fmtr years earlier, 15 employees died in an explosion
at that refinery. A U.S. government report on that explosion concluded that BP “did not provide effective
safety culture leadership.” A few years earlier, officials in Norway and Ala~ka had also reported problems
with BP’s “safety culture.” In short, BP identifi ed safety (and its predecessor, responsibility) as a core value
for many years, but it might have been only an espoused value rather than part of its actual culture.6
An organization’s culture is defined by its enacted values, not its espoused values. Values
are enacted whe n they actually guide and infl uence decisions and behaviour. They are values put into

Chapter Fourteen Organizational Culture
• by the NUMBERS
Corporate Culture Alignments and Misalignments7
of more than 7,000
business leaders across
130 countries believe
that an organization’s
culture is a potential
competitive advantage.
of 812 managers (most
in human resources)
in the U.K. believe their
organization’s espoused
values generally reflect
the actual values practised
by management.
of 2,219 executives and
employees surveyed
across several countries
think their organization’s
culture is in need of a major
overhaul.
31% of 196 mid-level
Canadian managers
surveyed believe their
organization has a “weak”
understanding of the
workplace culture.
-..——–….
12% of more than 7,000
business leaders
across 130 countries
believe their companies
are driving the “right”
corporate culture.
393
practice. Enacted values are apparent when watching executives and other employees in action, includ-
ing their decisions, where they focus their attention and resources, how they behave toward stakehold-
ers, and the outcomes of those decisions and behaviour.
CONTENT OF ORGAN IZATIONAL CULTURE
Organizations differ in their cultural content, that is, the relative ordering of shared values.8 The
opening case study mentioned some of C lio’s core values, which relate to teamwork, customer ser-
vice, and having fun. Contrast Clio’s culture with that of Netflix, which seems to prioritize individual
performance and undertones of internal competitiveness. For instance, the onl ine streaming media
provider reminds employees that “We’re a team, not a fami ly,” that “Netfl ix leaders hire, develop, and
cut smartly,” and that “adequate performance gets a generous severance package.”9
How many corporate cultures are there? Several models and measures classify organizational cul-
ture into a handful of ea~y-to-remember categories. One of these, shown in Exhibit 14.2, identifies
seven corporate cultures. Another popular model identifies four organizational cultures organized in
a two-by-two table representing internal versus external focus and flexib ility versus control. Other
models organize cultures around a circle with 8 or 12 categories. These circumplex models suggest that
some cultures are opposite to others, such as an avoidance culture versus a self-actualization culture, or
a power culture versus a collegial culture. 10
These organizational culture models and surveys are popular with corporate leaders faced with
the messy business of diagnosing their company’s culture and identifying what kind of culture they
want to develop. Unfortunately, the models oversimplify the diversity of cultural values in organizations.
There are dozens of individual values, and many more combinations of values, so the number of organi-
zational cultures that these models describe likely falls considerably short of the full set.

394 Part Four Organizational Processes
EXHIBIT 14.2 Organizational Cultu re Profile Dimensions and Characteristics
~
Orl I IIMICI!IIme. II Cllllncterllllc tt6 …. • …
lnnovalion Experimenting. opportunity seeking. risk taking, few rules. low cautiousness
Stability Predictability, security. rule-oriented
Respect for people Fairness. toler.tnce
Outcome orientation Action·oriented. high expectations. result~·oriented
Attention to detail Precise. analytic
Team orientation Collabor•tion, people-oriented
Aggressiveness Competitive. low emphasis on social responsibility
Sourr:e: Based on inrormation in C. A. O’Reilly lll. l Chatman. and D. F. Cald well. “People and Organizational Culture: A Profile Comparl~on
Approach to As..:;e..:;sing PerSon-()Fganization Fit.” Academy of Management Journal 34. no. 3 ( 1991). pp. 487-518.
The diversity of corporate cultures is evident in a recent study of espoused values at the top 500 Ameri·
can companies. The sn1dy distilled these values down to nine categories. Integrity appeared most often, fol-
lowed by teamwork, innovation, respect, quality, safety, community, communication, and hard work. But
each of these categories includes a large number of specific values. The “respect” category, for instance,
includes the specific values of diversity, inclusion, development, empowerment, and dignity. 11 S ince there
are dozens of espoused values, there would be an equally long list of enacted values.
Another concern is that organizational culture models and measures typically ignore the shared
assumptions aspect of culture. This oversight likely occurs because measuring shared assumptions is
even more difficult than measuring shared values. A third concern is that many organizational culture
models and mea~ures incorrectly assume that organizations have a fairly clear, unified culture that is
easily decipherable. 12 In reality, an organization’s culture is typical ly blurry and fragmented. As we
discuss next, organizations consist of d iverse subcultures in which clusters of employees across the
organization have different experiences and backgrounds that influence their preferred values. Fur-
thermore, an organization’s culture is founded on the values of its employees. People have diverse
hierarchies of values, so an organization’s culture will have noticeable variability. Thus, many of the
popular organizational culture models and measures oversimplify the variety of organizational cultures
and false ly presume that organizations can easily be identified within these categories.
Wh ich corporate culture do you prefer? You can d iscover which of four types of
organizational culture you most and least prefer by completing this self-assessment in
Connect
ORGAN IZATIONAL SUBCULTURES
When discussing organizational culture, we are really referring to the dominant culture, that is, the val-
ues and assumptions shared most consistently and widely by the organization’s members. The dominant
culture is usually supported by senior management, but not always. Cultural values and assumptions
can also persist in spite of senior management’s desire for another culture. Furthermore, organizations
are composed of subcultures located throughout their various divisions, geographic regions, and occu-
pational groups. 13 Some subcultures enhance the dominant culture by espousing parallel assumptions
and values. Others differ from but do not confli c t w ith the dominant culture. Still others are cal led
countercultures because they embrace values or assumptions that directly oppose the organization’s
dominant culture. It is also possible that some organizations (including some universities, according to
one study) consist of subcultures with no decipherable dominant culture at alL 14
Subcultures, particularly countercultures, potential ly create confl ict and dissension among employ-
ees, but they also serve two important functions. 15 F irst, they maintain the organization’s standards
of performance and e thical behaviour. Employees who hold countercultural values are an important

Chapter Fourteen Organizational Culture 395
source of surveillance and critical review of the dominant order. They encourage constructive confl ict
and more creative thinking about how the organization should interact with its environment. Subcul-
tures potentially support ethical conduct by preventing employees from blindly fo llowing one set of
values. Subculture members continually question the “obvious” decisions and actions of the maj ority,
thereby making everyone more mindful of the consequences of their actions.
The second funct ion of subcultures is as spawning grounds for emerging values that keep the firm
aligned w ith the evolving needs and expectations of customers, suppl iers, communities, and other
stakeholders. Companies evenntally need to replace their dominant values w ith ones that are more
appropriate for the changing environment. Those emerging cultural values and assumptions usually
exist in subcultures long before they are ideal for the organization. If subcultures are suppressed, the
organization may take longer to discover, develop, and adopt the emerging desired culture.
Deciphering Organ izationa l Culture through Artifacts
Shared values and assumptions are not easily measured through surveys and might not be
accurately reflected in the organization’s values statements. Instead, as Exhibit 14.1 illus-
trated earlier, an organization’s culture needs to be deciphered through a detailed investiga-
tion of artifact~. Artifacts are the observable symbols and signs of an organization’s culture, such as the
way visitors are greeted, the organization’s physical layout, and how employees are rewarded. 16 A few
experts suggest that artifacts are the essence of organizational culture, whereas most others (including the
authors of this book) view artifacts as symbols or indicators of culture. In other words, culntre is cognitive
(values and assumptions inside people’s heads) whereas artifacts are observable manifestations of that
culture. E ither way, artifacts are important because they represent and reinforce an organization’s culture.
Artifacts provide valuable evidence about a company’s culture.17 An organization’s ambiguous
(fragmented) culntre is best understood by observing workplace behaviour, listening to everyday con-
versations among staff and w ith customers, studying written documents and emails, viewing physical
structures and settings, and interviewing staff about corporate stories. In other words, to truly under-
stand an organization’s culture, we need to sample information from a variety of organizational artifacts.
The Mayo Clinic conducted such an assessment a few years ago. An anthropologist was hired to
decipher the medical organization’ s culture at its headquarters in Minnesota and to identify ways of
transferring that culture to its two newer sites in Florida and Arizona. For six weeks, the anthropologist
shadowed employees, posed as a patient in waiting rooms, did countless interviews, and accompanied
physicians on patient visits. Based on the anthropologist’s analysis of artifacts, the final report outlined
Mayo’s dominant culture and how its satellite operations varied from that culture. 18 Over the next sec-
tions, we review four broad categories of artifacts: organizational stories and legends, organizational
language, rituals and ceremonies, and physical structures and symbols.
ORGANIZATIONAL STORIES AND LEGENDS
Cirque du Solei! thrives on a culture of risk and creativity. This is apparent in stories detailing how the
Montreal-based troupe that combines circus with theatre wa~ started, and how it survived during the lean
years. One such story took place soon after the company was formed. C irque du Solei! was invited to
perform at the Los Angeles Arts Festival, but they didn’t have enough money to get back home and the
festival could not provide funds in advance to cover C irque du Soleil’s costs. Co-founder Guy Laliberte
took a gamble by literally emptying the troupe’s bank account to transport the performers and equipment
one way to California. “I bet everything on that one night [at the Los Angeles Arts Festival],” Laliberte
recalls. “If we failed, there was no cash for gas to come home.” Fornmately, the gamble paid off. C irque
du Solei! was a huge triumph , which Jed to more opportunities and successes in the years ahead. 19
Stories such as Cirque du Soleil’s risky business decision permeate strong organizational cultures. Some
tales recount heroic deeds, whereas others ridicule past events that deviate from the firm’s core values.
Organizational stories and legends serve a~ powerful social prescriptions of the way things should (or
should not) be done. They add human realism to corporate expectations, individual performance standards,

396 Part Four Organizational Processes
and the criteria for getting fired. Stories also produce emotions in listeners, and these emotions tend to
improve listeners’ memory of the lesson within the story.20 Stories have the greatest effect on communicat-
ing corporate culntre when they describe real people, are assumed to be true, and are known by employees
throughout the organization. Stories are also prescriptive-they advise people what to do or not to do.21
ORGANIZATIONAL LANGUAGE
The language of the workplace speaks volumes about the company’s culture. How employees talk to each
other, describe customers, express anger, and greet stakeholders are all verbal symbols of shared values and
assumptions. Tom Kelley and David Kelley, leaders of design firm IDEO, advise in their book on organi-
zational creativity: “What we say-and how we say it-‘Orth Inc . June 20 15).
When a~ked how the Detroit-ba~ finance company has grown so quickly, Emerson replied: “The number one
thing is culture. It allows us to move very quickly and react very quickly in making business decisions.” 34
Launi Skinner, Bill Emerson, and many other leaders bel ieve that an organization’s success partly
depends on its culture. Several popular-press management books similarly a~sert that the most success-
ful companies have strong cultures. In fact, one popul ar management book, Built to Last, suggests that
successful companies are ” cult-li ke” (al though not actually cul ts, the authors are careful to point out.)35
Does OB research support this v iew that compani es are more effecti ve when they have a strong cul-
ture? Yes, potential ly, but the evidence indicates that the relati onshi p depends on a few conditi ons.36
Global Connections 14.1:
THE IMPORTANCE OF ORGANIZATIONAL CULTURE AT ALIBABA
Alibaba Group Holding Ltd. was less than two years old when Jack Ma and his 17 co-founders
decided to more clearly define the company’s core values. Alibaba had quickly outgrown
Ma’s apartment in Hangzhou, China, where the company was born, and was on its way to
becoming one of the world’s largest and most successful e-commerce companies. Ma firm ly
believed that shaping Alibaba’s corporate culture during its infancy would provide a powerful
way to guide employees for many years to come.
“If Alibaba desires susta inable development, we must have a management ph ilosophy,”
explains Ma. “But if we don’t have a powerful and persistent corporate culture as the root, we
cannot create the philosophy and thinking.”
Alibaba’s six core values are customer first, teamwork, embrace change, integrity, passion,
and comm itment. The company is often described as having a “kung fu” culture in which
employees are expected to “approach every1h ing with fire in their belly” (passion) and to
“demonstrate perseverance and excellence” (commitment). These values emerged from the
Chinese martial arts novels that inspired Ma. “You have to have the spirit of never g ive up, the
fighting spirit, keep on doing,” says Ma of the values that exemplify the novels. 3 7

Chapter Fourteen Organizational Culture
Jack Ma and othe r co-fou nders o f Aliba ba recognized that the China-based e-commerce gia nt’s
long-te rm success depend s on a “powerful and persistent” organizational culture.
© REUTERS I Alamy Stock Photo
MEANING AND POTENTIAL BENEFITS OF A STRONG CULTURE
399
Before discussing these contingencies, let’s examine the meaning of a “strong” organizational culture
and its potential benefits. The strength of an organization’s culture refers to how widely and deeply
employees hold the company’s dominant values and assumptions. In a strong organizational culture,
most employees across all subunits understand and embrace the dominant values. These values and
assumptions are also institutionalized through well-establ ished artifacts, which further entrench the cul-
ture. In addition, strong cultures tend to be long-lasting; some can be traced back to the values and
assumptions establ ished by the company’s founder. In contrast, companies have weak cultures when the
dominant values are held mainly by a few people at the top of the organization, the culture is difficult to
interpret from artifacts, and the culntral values and assumptions are unstable over time or highly varied
across the organization.
Under specific conditions, companies are more effective when they have strong cultures because of
the three important func tions listed in Exhibit 14.4 and described below:
Control system. Organizational culture is a deeply embedded form of social control that influ-
ences employee decisions and behaviour.38 Culture is perva~ive and operates nonconsciously.
Think of it as an automatic pilot, nonconsciously directing employees so their behaviour is con-
sistent with organizational expectations. For this reason, some writers describe organizational
culture as a compa~s that points everyone in the same direction.
Social glue. Organizational culture is the social glue that bonds people together and makes
them feel part of the organizational experience.39 Employees are motivated to internalize
the organization’s dominant cu lture because it fu lfi ls their need for social identity. T h is social
glue attracts new staff and retains top performers. It also becomes the common thread that
holds employees together in global organizations. “T he values of the company are really
the bedrock-the glue which holds the firm together,” says former Infosys CEO Nandan
Nilekani.40

400 Part Four Organizational Processes
EXHIBIT 14.4 Potential Benefits and Contingencies o f Cu lt u re Strength
Functions of
Strong Cultures
Control system
Social glue
Sense-making
Benefits of cul ture strength
depend upon …
Whether culture content frts the
environment
Mode~ ate, not cult~ike, strength
An adaptive cutture
Organizational Outcomes
Organizational
performance
Employee well-being
Sense-making. Organizational culture helps employees to make sense of what goes on and why
things happen in the company.41 Corporate culture also makes it easier for them to understand
what is expected of them. For instance, research has found that sales employees in companies
with stronger organizational cultures have clearer role perceptions and less role-related stress.42
CONTINGENCIES OF ORGANIZATIONAL CULTURE AND EFFECTIVENESS
S tudies have found only a moderately positive relationship between culture strength and organizational
effectiveness. The reason for this weak link is that strong cultures improve organizational effectiveness
only under specific conditions (see Exhibit 14.4). The three main contingencies are: ( I) whether the
culture content is aligned with the environment, (2) whether the culture is moderately strong, not cult-
like, and (3) whether the culture supports being adaptive.
Culture Content Is Aligned with the External Environment The benefits of a strong cul-
ture depend on whether the culture content-its dominant values and assumptions-is al igned with the
external environment. Companies require an employee-centric culture in environments where business
success depends mainly on employee talent, whereas an efficiency-focused culture may be more criti-
cal for companies in environments w ith strong competition and standardized product~. If the dominant
values are congruent w ith the environment, then employees are more likely to engage in behaviours
that improve the organization’s interaction with that environment. But when the dominant values are
misaligned with the environment, a strong culture encourages behaviours that can undermine the orga-
nization’s connection w ith its stakeholders.
For example, Coles became a successful competitor in the Australian retai l food industry after it
was acquired by Wesfarmers, which injected a strong culture around performance and customer ser-
vice. Wesfarmers is a highly successful Australian conglomerate, but it doesn’t nurture the same cul-
ture in all of its businesses (food, hardware, clothing, office supplies, insurance, fertilizers, mining, and
more). Instead, Wesfarmers ensures each company maintains a strong culture around the values that
matter most for that industry and its stakeholders. “It would be a huge mistake if we tried to impose one
culture over al l these businesses,” explains Richard Goyder, who recently stepped down as Wesfarm-
ers CEO. “Bunnings (Australia’s largest home improvement retailer) and Coles have to be customer-
centric, wherea~ our coal business has to be absolutely focused on safety.”43
Culture Strength Is Not the Level of a Cult A second contingency is the degree of culture
strength. Various experts suggest that companies with very strong cultures (i.e., corporate “cults”) may

Chapter Fourteen Organizational Culture 401
be less effective than companies with moderately strong cultures.44 One reason why corporate cults
may undermine organizational effectiveness is that they lock people into mental models, which can
blind them to new opportunities and unique problems. The effect of these very strong cultures is that
people overlook or incorrectly define subtle misalignments between the organization’s activities and
the changing environment.
The other reason why very strong cultures may be dysfunctional is that they suppress dissenting
subcultures. The challenge for organizational leaders is to maintain not only a strong culture but one
that allows subcultural diversity. Subcultures encourage task-oriented conflict, which improves cre-
ative thinking and offers some level of ethical vigilance over the dominant culture. In the long run,
a subculture’s nascent values could become important dominant values as the environment changes.
Corporate cults suppress subcultures, thereby undermining these benefits.
Culture Supports Being Adaptive A third condition influencing the effect of cultural strength
on organizational effectiveness is whether the culture content includes an adaptive culture.45 An
adaptive culture embraces change, creativity, open-mindedness, growth, and learning. Organizational
leaders across many industries increasingly view an adaptive culture as an important ingredient for
the organization’s long-term success. “At the end of the day, you have to create a culture that not only
accepts change but seeks out how to change,” emphasizes former GM CEO Dan Akerson. ” It’s criti-
cally important that we inculcate that into our culture.”46
What does an adaptive culture look like? It is one in which employees recognize that the organiza-
tion’s survival and success depends on their ability to discover emerging changes in the external envi-
ronment and to adapt their own behaviour to those changes. Thus, employees in adaptive cultures see
things from an open systems perspective and take responsibil ity for the organization’s performance and
alignment w ith the external environment.
In an adaptive culture, receptivity to change extends to internal processes and roles. Employees believe
that satisfying stakeholder needs requires continuous improvement of internal work processes. ‘They
also recognize the importance of remaining flexible in their own work roles. The phra~ ‘That’s not
my job” is typical of nonadaptive culntres. Finally, an adaptive culntre has a strong teaming orientation
because being receptive to change necessarily means that the company also supports action-
oriented discovery. With a learning orientation, employees welcome new learning opportunities,
actively experiment with new ideas and practices, view reasonable mistakes as a natural part of the
learning process, and continuously question pa~t practices (see Chapter 7).47
Debating Point
IS CORPORATE CULTURE AN OVERUSED PHRASE?
Corporate culture is probably one of the most frequently uttered phrases in organ izations
these days. That’s quite an accomplishment for two words that were rarely paired together
prior to 198248 Executives often say they have crafted the company’s culture to attract top
talent and better serve clients. Job applicants have made organizationa l culture one of the
top factors in their decision about whether to join a particular company. Journalists rou-
tinely blame corporate culture for business fa ilures, deviant activities, and quirky employee
conduct.
This chapter offers plenty of arguments supporting the position that organ izational cul-
ture explains employee decisions and behaviour. A strong culture is a control system that
guides employees, often nonconsciously. It is, after all, the •way we do things around here.”
A strong culture also serves as the company’s “social glue,” which strengthens cohesion
among employees. In other words, employees in strong cultures have similar beliefs and val-
ues which, in turn, increases their motivation to follow the corporate herd.

402 Part Four Organizational Processes
Organ izational culture can be a useful concept to explain workplace activities, but some
OB experts suggest that the phrase is overused. To begin with, corporate cu lture is usu-
ally presented as a singular thing within the company-one organization with one culture.
Th is presumption of a homogeneous culture-in which every employee understands and
embraces the same few dominant values-just doesn’t exist. Every organization has a frag-
mented culture to varying degrees. Furthermore, many employees engage in fac;ades of
conformity. They pretend to live the company’s values but don’t actually do so because
they don’t believe in them.
49
Fragmentation and fac;ades suggest that culture is not an inte-
grated force field that manipulates people like mindless robots. Instead, employees ulti-
mately make decisions based on a variety of influences, not only the organization’s values
and assumptions.
Another argument that corporate culture is overused as a tool to explain the workplace is
that values don’t drive behaviour as often as many people believe. Instead, employees turn
to their values to guide behaviour only when they are reminded of those values or when the
situation produces fairly obvious conflicting or questionable decisions. 50 Most of the time,
front line staff perform their jobs without much thought to their values. Their decisions are
usually in relation to technical rather than values-based matters. As such, corporate culture
has a fairly peripheral role in daily routine work activities.
A third problem is that organizational culture is a blunt instrument for explaining workplace
behaviour and for recommending how to change those behaviours. “Fix the culture” is almost
meaningless because the problems prompting this advice could be due to any number of arti-
facts. Furthermore, some problems attributed to a poor corporate culture may be due to more
mundane and precise dysfunctions-unintended consequences of poorly designed rewards,
ineffective leadership, misaligned corporate strategy, biased information systems, and a host
of other conditions.
Rather than blame the company’s culture, we should pay more attention to specific sys-
tems, structures, behaviours, and attitudes that explain what went wrong. Furthermore, as
one paper recently noted, organizational culture is often the outcome of these specific arti-
facts, not the cause of the problems those artifacts create.51
ORGANIZATIONAL CULTURE AND BUSINESS ETHICS
An organization’s culture influences the ethical conduct of its employees. Thi s makes sense because
good behavi our is driven by ethical val ues, and ethical val ues become embedded in an organi zation’s
dominant culture. For example, criti cs claim that News Corp’s tabloids have had a culture that rewards
aggressive, partisan, and sensationalistic tacti cs. This culture may have uncovered news, but it alleg-
edly also pushed some journalists and executives over the ethical l ine, incl uding illegal ly hacking i nto
the phones of celebriti es, crime victims, and pol iticians. A Briti sh parliamentary committee (among
others) concl uded that News Corp’s wrongdoing was caused by a wayward culture whi ch “permeated
from the top throughout the organization.” As one journalist concluded, “Phone hacking is done by
employees w ithin the corporate culture of ‘whatever it takes.”’52
Some leaders also try to improve ethical conduct by changing and strengthening the organization’s
culture around more socially desi rable val ues. Thi s strategy occurred at Barclays Bank PLC, which
was found guil ty of rigging interest rates a few years ago. After the Bri tish bank’s most senior execu-
ti ves were forced out due to the scandal, the new CEO focused on establi shing a clear set of ethi cal
values (respect, i ntegri ty, service, excellence, stewardship). He then advised all 140,000 Barclays
employees that these val ues shou ld guide their behaviour so Barclays could become a more ethical
organizati on.
“There might be some who don’t feel they can fully buy i n to an approach which so squarely li nks
performance to the upholding of our val ues,” warned Barclays’ CEO. “My message to those people
is si mple: Barclays is not the place for you. The rules have changed. You won’t feel comfortable at

Chapter Fo urtee n Organizational Culture 403
Barclays and, to be frank, we won’ t feel comfortable with you as colleagues.” 53 T he point here is that
culture and ethics go hand-in-hand. To create a more ethical organization, leaders need to develop an
enacted culture that steers employees toward morally correct behaviour.
Merging Organizational Cultures
L04 Top executives at Ell isDon, one of Canada’s largest construction fi rms, couldn’t
bel ieve their good fortune when Looby Construction indicated its interest in a take-
over. Looby was a respected competi tor, yet EllisDon executives approached the
potential acquisition cautiously. The two companies went through eight months of d iscussion before
concluding that the acquisition made sense cul turally as well a~ fi nancially. ” For us, the cultural fit
is just as important or maybe more important than the financ ial side because if the culture doesn’t
fit, the financ ial side will never work,” says Ell isDon CEO Geoff Smith. “To ensure this, we had to
open up to them just as much as they had to open up to us.” Ell isDon vice-president Stephen Damp
recalls how a deep level of compatible thinking resonated throughout those conversations. “You
listen to how they [Looby executives and staff] approach their problems, their approach to their
people, the market, the type of clients they like to work for,” says Damp. “The whole ti me I was
thinking: ‘Th is is like having an internal conversation with Geoff [Smith].’ Their culture is amaz-
ingly aligned wi th Ell isDon .”54
EllisDon executives are acutely aware that mergers and acquisitions often fail financ ially when the
merging organizations have incompatible cultures.55 Unless the acquired firm is left to operate inde-
pendently, companies with clashing cultures tend to undermine employee performance and customer
service. Consequently, several studies estimate that only between 30 percent and SO percent of corpo-
rate acquisitions add value. 56
BICULTURAL AUDIT
Organizational leaders can minimize cultural coll isions in corporate mergers and fu lfil their duty of due
diligence by conducting a bicultural audit. 57 A bicultur al audit diagnoses cultural relations between
the companies and determines the extent to which cultural clashes will likely occur. The process begins
by identify ing cultural differences between the merging companies. This might be done by surveying
employees or, in the example of EllisDon and Looby Construction, through an extended series of meet-
ings where executives and staff of both firms discuss how they think through important decisions in
their business. From the survey data or meetings, the parties determine which differences between the
two firms will result in confl ict and which cultural values provide common ground on which to build
a cultural foundation in the merged organization. The final stage involves identifying strategies and
preparing action plans to bridge the two organizations’ cultures.
STRATEGIES FOR MERGING
DIFFERENT ORGANIZATIONAL CULTURES
In some ca~es, the bicultural audit results in a decision to end merger talks because the two cul-
tures are too different to merge effectively. However, even with substantially different cultures, two
companies may form a workable union if they apply the appropriate merger strategy. The four main
strategies for merging different corporate cultures are assimilation, deculturation, integration, and
separation (see Exh ibit 14.5).58
Assimilation Assimilation occurs when employees at the acquired company will ingly embrace
the cultural values of the acquiring organization. Typically, this strategy works best when the acquired
company has a weak culture that is either similar to the acquiring company ‘s culture or is dysfunc-
tional, wherea~ the acquiring company ‘s culture is strong and aligned with the external environment.

404 Part Four Organizational Processes
EXHIBIT 14.5 Strategies for Merging Different Organizational Cultu re s
~……, 0..111- w ……. wllm:
Assimilation Acquired company embraces acquiring firm’s culture. Acquired firm has a weak culture.
Deculturation Acquiring firm imposes its culture on unwilling Rarely works-·may be necessary only when
acquired firm. acquired firm•s c ulture doesn’t v.’Ork but employees
don’t realize it.
lntega.ttion Merging companies combine the two or more Existing cultures can be improved.
culture.’i into a new composite culture.
Separation Merging oompanie.’i remain di’\tinct entities with mini· Firms operate successfully in different businesses
mal exchange of culture or organizational practice.,. requiring different cultures.
Sourr:e.s: Based on idea.~ in A. R. Malekzedeh and A. Nahavandi. “Making MergerS Work by Managing CuJtwe…:;.” Journal of Busines….:: Str.u.egy.
I I (May-June I 990). pp. S~-57: K. W. Smjth. “A Brnnd·New Cultwe for the Merged Firm.” MergerS and Acquisitions. 35 (June 2000). pp. 45-50.
The culntral a~similation strategy seldom produces culntral cla~hes because the acquiring firm’s cul-
ture is highly respected and the acquired firm’s culntre is fairly easily altered. The a~similation strategy
occurred when Southwest Airlines acquired AirTran Airways. The two firms already had similar cul-
tures, but Southwest’s legendary “Southwest way” culture also made the acquisition relatively free of
culture clashes. “It’s helpful that Southwest ha~ a great cultural reputation,” says a Southwest executive
about the AirTran Airways acquisition 5 9
Deculturation Assimilation is rare. Employees usually resist organizational change, particularly
when they are asked to throw away personal and cultural values. Under these conditions, some acquir-
ing companies apply a deculturation strategy by imposing their culture and business practices on the
acquired organization. The acquiring firm strips away reward systems and other artifacts that support
the old culture. People who cannot adopt the acquiring company ‘s culture often lose their jobs. Decul-
turation may be necessary when the acquired firm’s culture doesn’t work, even when employees in
the acquired company aren’t convinced of this. However, this strategy is difficult to apply effectively
because the acquired firm’s employees resist the cultural intrusions from the buying finn, thereby
delaying or undermining the merger process.
Integration A third strategy is to combine the cu ltures of the two firms into one new composite
culture that preserves the best features of the prev ious cultures. Integration is slow and potentially
risky because there are many forces preserving the existing cultures. Still, this strategy should be
considered when the companies have relatively weak cultures or when their cultures include several
overlapping values. Integration works best when the cultures of both merging companies could be
improved, which motivates employees to adopt the best cultural elements of the separate entities.
Incorporating the best cultural elements of the original companies symbolizes that employees from
both firms have meani ngful values for the combined organization. “Find one thing in the organization
that was good and use it as a cornerstone for a new culture,” adv ises a respected executive who has led
several mergers and acquisitions. “People don’t want to work for an organization for years and then
be told it’s rubbish.”60
Separation A separation strategy occurs when the merging companies agree to remain distinct
entities with minimal exchange of culture or organizational practices. This strategy is most appropriate
when the two merging companies are in unrelated industries, because the most appropriate cultural
values tend to differ by industry. Separation is also the preferred approach for the corporate cultures of
diversified conglomerates. The cultural separation strategy is rare, however. Executives in acquiring
firms usually have difficulty keeping their hands off the acquired finn. According to one estimate, only
I 5 percent of mergers leave the acquired company as a stand-alone unit61

Chapter Fourteen Organizational Cultu re
Alaska Airlines’ decision to acquire V irgin America brought audible gasps from customers and
investment analysts a like. Both airlines are successful and their routes are complementary, b ut
many observers q uestion the cultural fit of a combined a irline. “I th ink of [Virgin America) as a
young, h ip airline. Alaska is more of a friendly aunt,” says one business traveller.
At first, Alask a A ir Group CEO Brad Tilden asserted that both airlines have similar cu lt ures
focused on employees, customers, and safety. But after a few months, Tilden adm itted he
was struggling to decide whether the cultures are sufficie ntly different that they shou ld be
kept separate. Creating a single airline w ith the best cultural e lements of both (integration
strategy) would be more cost-efficient, but maintai ning A lask a and V irg in as distinct operations
(separation strategy) might avoid an internal cu lture clash and retain va lu ed V irg in staff and
customers.
The company eventually chose the separation strategy for the first few years, but the Virg in
brand w ill eventually disappear. “Alaska Airlines and Virgin America are different airl ines, but we
believe different works,” Tilde n an nou nced when t he merger was completed. He also p lans to
bring some o f Virgin ‘s h ip culture to Alaska.
4 05
“Culture has been a real challe nge in many mergers, so we’re working to do things differe ntly,”
says Ben Minicucci, the Canadian executive who is Alaska Air’s p resident and is leading the
integration. “We are being very thoughtful about cultu re and are working to create an environment
that reflects w ho we are and where we’ve been. that also enables us to work together, be bold, and
succeed in a rapidly evolving industry.”62
© A P Photo/Ted S. Warren, File/ CP Images
Chang ing and Strengthen ing O rganizational Cu lture
LOS Is it possible to change an organization’s culture? Yes, but doing so isn’ t easy, the change
rarely occurs quickly, and often the culture ends up changing (or replacing) corporate lead-
ers. A fe w experts argue that an organization’s culture “cannot be managed,” so attempt-
ing to change the company’s values and assumptions is a waste of time.63 This may be an extreme view,
but organizational culture experts generally agree that changing an organization’s culture is a monumen-
tal challenge. At the same time, the external environment changes over time, so organizations need to
shift their culture to maintain al ignment with the emerging environment.
Over the next few pages, we will highlight five strategies that have had some success at altering
corporate cultures. These strategies, illustrated in Exhibit 14.6, are not exhaustive, but each seems to
work well under the right circumstances .

406 Part Four Organizational Processes
EXHIBIT 14.6 Strategies for Chan ging and Stre ngthe nin g Orga nizational Cult u re
Support
workforce
stability and
communication
Changing and
Strengthening
Organizational
Culture
Introduce
culturally consistent
rewards/recog nition
Align artifacts
with the
desired culture
MODEL DESIRED CULTURE THROUGH ACTIONS OF
FOUNDERS AND LEADERS
Whether deliberately or haphazardly, the company’s founder usually forms an organization’s culture.64
The founder’s personality, values, habits, and critical events all play a role in establishing the firm ‘s core
values and assumptions. The founder is often an inspiring visionary who provides a compelling role
model for others to follow. In later years, organizational culture is reinforced through stories and legends
about the founder that symbolize the core values. “All companies, especially entrepreneurial companies,
take the shape of the owner,” says Bruce Poon Tip, CEO and founder of Toronto-based G Adventures.
For example, he says “we have a culture of w inning and a culture of excellence that is driven by me.”65
Although fmmders usually establish an organization’s culn~re, subsequent leaders need to actively guide,
reinforce, and sometimes alter that culture.66 This advice was recently echoed by Bill Emerson, CEO of
Quicken Loans. ‘1f you don’ t spend time to create a culture in your organization, one will create it~elf,” he
warns. “And the one that creates itself is probably not going to be good.’.67 The process of leading cul-
tural change is a~iated with both transformational leadership and authentic leadership (see Chapter I 2).
In each of those models, leaders base their words and actions on personal values, and those values poten-
tial ly become a refl ection of the organization’s values. For instance, one recent study found that the pre-
ferred confl ict-handling style of leaders influences the work unit’s or organization’s cultural expectations
of how employees address conflict sintations. Another study reported that work units or companies with
strong servant leadership were more likely to have a culture that valued providing service to o thers68
ALIGN ARTIFACTS WITH THE DESIRED CULTURE
Artifacts represent more than just the visible indicators of a company’s cultm e. They are also mecha-
nisms that keep the culture in place or shift the culture to a new set of values and a~sumptions. A~ we
discuss in the next chapter on organizational change, systems and structures are powerful mechanisms
to support the desired state of affairs. These systems and structures are artifacts, such as the workplace

Chapter Fourteen Organizational Culture 407
layout, reporting structure, office rituals, type of information distributed, and language that is reinforced
or discouraged. Corporate cultures are also strengthened through the artifacts of stories and behaviours.
According to Max DePree, former CEO of furn intre manufacturer Herman Miller Inc ., every organi-
zation needs “tribal storytellers” to keep the organization’s history and culture alive.69 Leaders play a
role by creating memorable events that symbol ize the cultural values they want to develop or maintain.
INTRODUCE CULTURALLY CONSISTENT REWARDS AND RECOGNI TION
Reward systems and informal recognition practices are artifacts, but they deserve separate discussion
because of their powerful effect on strengthening or reshaping an organization’s culture.7° For example,
to change Home Depot’s freewheel ing culture, Robert Nardelli introduced precise measures of corpo-
rate performance and dri lled managers with weekly performance objectives related to those metr ics.
A two-hour weekly conference call became a ritual in which Home Depot’s top executives were held
accountable for the previous week’s goals. These actions reinforced a more discipl ined (and central-
ized) performance-oriented culture.71
SUPPORT WORKFORCE STABILITY AND COMMUNICATION
An organization’s culture is embedded in the minds of its employees. Organizational stories are rarely
written down; rituals and ceremonies do not usual ly exist in procedure manuals; organizational meta-
phors are not found in corporate directories. Thus, a strong culture depends on a stable workforce.
Workforce stability is also important because it takes time for employees to fu lly understand the orga-
nization’s culture and how to enact it in their daily work lives. The organization’s culture can liter-
ally disintegrate during periods of high turnover and precipitous downsizing because the corporate
memory leaves w ith the departing employees.
Along w ith workforce stabi lity, a strong organizational culture depends on a workplace where
employees regularly communicate with each other. This ongoing communication enables employees to
develop shared language, stories, and other artifacts. Clio’s recently developed headquarters has played
an important role in this regard. The new campus in Burnaby has an open-office design, breakout
spaces that encourage spontaneous informal interaction among employees, and a lunch room where
employees are encouraged to gather at any time of day. In addition, the company hosts regular social
events and other forms of social bonding. Clio even has an annual multi-day strategy session at its
Burnaby headquarters which is attended by even the most remote employees.
USE ATTRACTION, SELECTION , AND SOCIALIZATION
FOR CULTURAL FI T
A valuable way to strengthen and possibly change an organization’s culture is to recruit and select job
appl icants whose values are compatible w ith the culture. For example, C lio co-founders Jack Newton
and Rian Gauvreau were able to strengthen and guide the company’s culture in the early years by
personally screening every applicant for cultural fit. One recent survey of more than 2,000 American
hiring managers and human resource managers found that a job applicant’s fit with the company ‘s cul-
ture was the second most important factor in the decision to hire that person (appl icant skills was the
top priority). A global poll of almost 170,000 people in 30 countries reported that the organization’s
culture has the greatest infl uence on their decision to apply for a job.72
This process of recruiting, selecting, and retaining applicants whose values are congruent with the
organization’s culture is explained by a ttraction-selection-attrition (ASA) theor y.73 ASA theory
states that organizations have a natural tendency to attract, select, and retain people w ith values and
personality characteristics that are consistent with the organization’s character, resulting in a more
homogeneous organization and a stronger culture.
Anraction. Job applicants engage in self-selection by avoiding prospective employers whose
values seem incompatible w ith their own values.74 They look for subtle artifacts during
interviews and through public information that communicate the company’s culture. Some
organizations encourage this self-selection by actively describing their cultures. At Bankwest,

408 Part Four Organizational Processes
for instance, job seekers can complete an onl ine quiz that estimates their fit with the Australian
financial institution’s collegial, developmental, customer-foc used culture75
Selection. How well the person “fits” in with the company’s culture is often a factor in deciding
which job applicants to hire. 76 Zappos carefull y selects applicants whose personal values are
aligned with the company’s values. The applicant is first assessed for technical skills and experience
at the online shoe and clothing retailer, then he or she receives “a separate set of interviews purely
for culture fit,” says CEO Tony Hsieh. Unusual methods are sometimes applied to determine how
well an applicant’s values are compatible with Zappos’ culture. For example, to determine an appli-
cant’s humility (one of Zappos’ core values}, staff a~k the Zappos-hired driver how well he or she
was treated by the applicant during the drive to the company’s headquarters in La~ Vegas.
Attrition. People seek environments that are sufficiently congruent with their personal values and are
motivated to leave environments that are a poor fit. This occurs because person-organization values
congruence supports their social identity and minimizes internal role conflict. Even if employees
aren’t forced out, many quit when values incongruence is sufficiently high.n Zappos, Vancity,
As one of the world’s most successful adventure travel companies, G Adventures depends on a
strong culture to guide employee decisions and behaviour. The Toronto-based firm ma intains a
strong culture by carefully hiring people whose values are compatible with it. “You can teach people
the skills they need but you can’t teach culture,” explains G Adventures founder Bruce Peon Tip.
Job applicants short-listed by senior staff participate in the company’s qu irky G-Factor
Interview, which is conducted by a random selection of three staff members. Job interviews at
Base Camp (Toronto headquarters) occur in the “ball pit,” the small room shown in this p hoto filled
about one-th ird metre high with plastic balls.
The applicant answers several questions randomly chosen by the spin of a large prize wheel
on t he wall (left side of this photo). The questions are unusual, such as: “If you had a tattoo on
your forehead, what would it be?” Employees listen carefully to the answers to determin e whether
the applicant’s values are compatible w ith G Adventures’ culture. Applicants who fail the G-Factor
Interview don’t get hired, even if they have exceptional skills.78
© G Adventures

Chapter Fourteen Organizational Culture
G Adventures, and a few other companies will even pay newcomers to quit within the ftrst few
weeks of employment if the new employees think their personal values conflict with the
company’s culntre.
Organizational Socia lization
409
L06 Organizational socialization is another process that companies use to maintain a strong
corporate culture and, more generally, help people to adj ust to new employment.
O r ganizational socialization is the process by which individuals Jearn the values,
expected behaviours, and social knowledge necessary to assume their roles in the organization.79 T his
process can potentially change employee values to become more al igned with the company’s culntre.
However, changing an employee’s personal values is much more difficult than is often assumed,
because personal values are fairly stable beyond early adulthood. More likely, effective socialization
gives newcomers a clearer understanding about the company’s values and how they are translated into
specific on-the-job behaviours.80
Along with supporting the organization’s culture, socialization helps newcomers adjust to co-workers,
work procedures, and other corporate realities. Research indicates that when employees are effectively
social ized into the organization, they tend to perform better, have higher job satisfaction, and remain
longer with the organization.81
LEARNING AND ADJUSTMENT PROCESS
Organizational socialization is a process of both learning and adjustment. It is a learning process because
newcomers try to make sense of the company’s physical workplace, social dynamics, and strategic and
cultural environment. They Jearn about the organization’s performance expectations, power dynamics,
corporate culntre, company history, and jargon. They also need to form successful and satisfying rela-
tionships with other people from whom they can Jearn the ropes.82 In other words, effective socializa-
tion supports newcomers’ organizational comprehension. It accelerates development of an accurate
cognitive map of the physical, social, strategic, and cultural dynamics of the organization. Ideally, this
learning should be distributed over time to minimize information overload.
Organizational socialization is also an adjustment process because individuals need to adapt to their
new work environment. They develop new work roles that reconfigure their social identity, adopt new
team norms, and practise new behaviours.83 The adjustment process is fairly rapid for many people,
usually occurring within a few months. However, newcomers w ith diverse work experience seem to
adjust better than those with limited previous experience, possibly because they have a larger toolkit of
knowledge and ski lls to make the adjustment possible.84
PSYCHOLOGICAL CONTRACTS
The psychological contract refers to the individual’s bel iefs about the terms and conditions of a
reciprocal exchange agreement between that person and another party (the employer in most work
situations). The psychological contract is a perception formed during recruitment and throughout the
organizational socialization process about what the employee is entitled to receive and is obliged to
offer the employer in return.85
Job applicants form perceptions of what the company wi ll offer them by way of career and learning
opportunities, job resources, pay and benefi ts, qual ity of management, job security, and so for th. They
also form perceptions about what the company expects from them, such as hours of work, continu-
ous ski ll development, and demonstrated loyalty. The psychological contract continues to develop and
evolve after job appl icants become employees, but they are also continuously testing the employer’s
fu lfilment of that exchange relationship.

41 0 Part Four Orga nizational Processes
Steve Wu assumed that his new j ob as an investment analyst would involve long hours working
on prestigious fast-paced deals. The recent UCLA graduate experienced the long ho urs, b ut
much of the work was drudgery. The reality shock and psycholog ical contract violation motivated
Wu to q uit j ust one month before his first year, forfeiting a five-figure bonus. He has since j oined a
mobile-gaming startup .
Chris Martine z also expected long hours at the private equity firm that h ired him, but admits
the work involved “repetitive, simple work” on spreadsheets, little of which was ever seen by
corporate clie nts. “It’s almost expected that an analyst, especially in their first year, is j ust going to
be miserable,” says Martinez, w ho has since q uit.
Wu and Martine z are two of the many investment analysts in recent years w ho concluded
that their psycho logical contracts had been v iolated. One recent study found that new h ires at a
dozen investment banks stayed an average of on ly 17 months, down from 26 months a d ecade
earlier and 30 months t wo decades ago86
© Tetra Images/ Getty Images
Types of Psychological Contracts Some psychological contracts are more transactional
whereas others are more relational.87 Transactional contracts are primarily short-term economic
exchanges. Responsibil ities are well de fin ed around a fairl y narrow set of obligations that do not
change over the life of the contract. People hired in temporary positions and as consultants tend to have
transactional contracts. To some extent, new employees also form transactional contracts until they
develop a sense of continuity with the organization.88
Re lational contracts, on the other hand, are rather like marriages; they are long-term attach-
ments that encompass a broad array of subjecti ve mutual obligations . Employees with a relational
psychological contract are more willing to contribute their t ime and effort without expect ing the
organ ization to pay back thi s debt in the short term. Relat ional contracts are al so dynamic, mean-
ing that the parties tolerate and expect that mutual obligations are not necessarily balanced in the
short-run. Not surprising ly, organi zational citizenship behaviours are more likely to prevail under
relational than transactional contracts . Permanent e mployees are more likely to be lieve they have a
relational contract.

Chapter Fourteen Organizational Cultu re 41 1
STAGES OF ORGANIZATIONAL SOCIALIZATION
Organizational socialization is a conti nuous process, beginning before you submit a job application
and continuing throughout your career within the company. However, it is most intense when people
move across organizational boundaries, such as when they first j oin a company or get transferred to an
international a~signment. Each of these transitions is a process that can be divided into three stages.
Our focus here is on the socialization of new employees, so the three stages are called pre-employment
social ization, encounter, and role management (see Exhibit 14.7). These stages parallel the individual’s
transition from outsider to newcomer and then to insider.89
Stage 1: Pre-employment Socialization Think back to the months and weeks before you
began working in a new job (or attending a new school). You actively searched fo r inform ation about
the company, formed expectations about working there, and fe lt some anticipation about fitting into
that environment. The pre-employment social ization stage encompasses all the learning and adjust-
ment that occurs before the first day of work. In fact, a large part of the socialization adjustment pro-
cess occurs during this stage.90
The main problem with pre-employment socialization is that outsiders rely on indirect informa-
tion about what it is like to work in the organization. This info rmation is often distorted by inherent
conflicts that arise during the mating dance between employer and applicant.9 1 One confl ict occurs
between the e mployer’s need to attract qualified applicants and the applicant’s need for complete infor-
mation to make accurate employment decisions. Many firms describe only positive a~pects of the job
and company, causing applicants to accept job offers w ith incomplete or false expectations.
Another conflict that prevents accurate inform ation exchange occurs when appl icants avoid a~king
important questions about the company because they want to convey a favourable image to their pro-
spective employer. For instance, applicants usually don’t like to a~k about starting salaries and promo-
tion opportunities because it makes them seem greedy or aggressive. Yet, unless the employer provides
this info rmation, applicants might fill in the missing details with false a~sumptions that produce inac-
curate expectations.
Two other types of conflict tend to distort pre-employment information fo r employers. Applicants
engage in impression management when seeking employment, motivating them to hide negative infor-
mation, act out of character, and occasional ly embellish information about their past accomplishments.
At the same time, employers are sometimes reluctant to ask some types of questions or use potential ly
valuable selection devices because they might scare off applicants. Unfo rtunately, employers form
inaccurate expectations about job candidates because they receive exaggerated resumes and are often
reluctant to a~k for more delicate information from those applicants.
Stage 2: Encounter The first day on the j ob typically marks the beginning of the encounter stage
of organizational socialization. This is the stage in which newcomers test how well their pre-employment
expectations fit reality. Many companies fail the test, resulting in r eality shock-the stress that results
EXHIBIT 14.7 Stages of Organizational Socialization
Pre-employment
socialization
(outsider)
• l earn about the
organization and
job
• Form employment
relationship
expectations
Encounter
(newcomer)
• Test expectations
– against perceived
realities
Role
management
(insider)
• Strengthen work
relationships
• Practise new role
behaviours
• Resolve work-
nonwork conflicts
Socia lization
outcomes
• Higher molivation
• Higher loyally
• Higher satisfaction
• Lower stress
• Lower unover

412 Part Four Organizational Processes
when employees perceive discrepancies between their pre-employment expectations and on-the-job
reality.92 Reality shock doesn’ t necessari ly occur on the firs t day; it might develop over several weeks
or even months as newcomers fo rm a better understanding of their new work environment.
Reality shock is common in many organizations. 93 Newcomers sometimes face unmet expecta-
tions whereby the employer doesn’ t deliver on its promises, such as failing to prov ide chal lenging
projects or the resources to get the work done. However, new hires also experience reality shock
due to unrealistic expectations, wh ich are distorted work expectations formed from the infor mation
exchange conflicts described earlier. Whatever the cause, reality shock impedes the learning and
adjustment process because the newcomer’s energy is directed toward managing the resulting stress.94
Stage 3: Role Management Role management, the third stage of organizational socialization,
really begins during pre-employment socialization, but it is most active a~ employees make the transition
from newcomers to insiders. They strengthen relationships w ith co-workers and supervisors, practise new
role behaviours, and adopt attitudes and values consistent with their new positions and the organization.
Role management also involves resolving the conflicts between work and nonwork activities, including
resolving discrepancies between their personal values and those emphasized by the organizational culture.
IMPROVING THE SOCIALIZATION PROCESS
Companies have a tendency to exaggerate positive features of the job and neglect to mention the unde-
sirable elements. Their motivation is to attract as many job applicants as possible, which they assume
wi ll improve the selection choices. Unfortunately, this flypape r approach often ends badly. Those hired
soon discover that the actual workplace is not as favourable a~ the employer’s marketing hype (i.e., unmet
expectations), resulting in real ity shock and a broken psychological contract. In contrast, a realistic
job preview (RJP) offers a balance of positive and negative info rmation about the job and work
context.95 This balanced description of the company and work helps job applicants to decide for them-
selves whether their skills, needs, and values are compatible w ith the job and organization.
RJPs scare away some applicants, but they also tend to reduce turnover and increase job perfor-
mance.96 This occurs because RJPs help applicants develop more accurate pre-employment expec-
tations, which, in turn, minimize real ity shock. RJPs represent a type of vaccination by preparing
employees for the more challenging and troublesome aspects of the work context. There is also some
evidence that RJPs increase affective organizational commitment. One explanation is that companies
providi ng candid information are easier to trust. Another explanation is that RJPs show respect fo r the
psychological contract and concern for employee welfare.97
Socialization Agents Ask new employees what most helped them to adjust to their j obs and
chances are they will mention helpful co-workers, bosses, or maybe even friends who work elsewhere
Global Connections 14.2:
CONNECTED SOCIALIZATION AT TRIVAGO
trivago, the world ‘s largest hotel search company, puts considerable resources into its talent
(employee) socialization process. Before their first day of work, new hires are assig ned a
bud dy to answer their questions. The entire fi rst week of employment is dedicated to so cializa-
tion and other aspects of on boarding at the company’s headqua rters in Dusseldorf, Germany.
Throug hout the week, new employees attend information sessio ns (as shown in this
photo) and enjoy several events that help them learn more about the company and form strong
bonds with each other. “The whole mission during this week is to get to know trivago, integ rate
into ou r culture here, and get to know as many people as possible,” explains Samantha Strube,
trivago’s talent integration team leader.98

Chapter Fourteen Organizational Cultu re
trivago, the world ‘s largest hotel search compa ny, inve sts conside rable time and resources
in the socialization of new emplo yees.
©trivago
413
in the organization. The fac t is, soc ialization agents play a central role in this process.99 Supervisors
tend to provide technical information, performance feedback, and information about j ob duties. T hey
also improve the social ization process by giving newcomers reasonably challenging first a~signments,
buffering them from excessive demands, helping them fo rm social ties w ith co-workers, and generating
positive emotions around their new work experience. 100
Co-workers are important socialization agents because they are easily accessible, can answer ques-
tions when problems arise, and serve a~ role models for appropriate behaviour. New employees tend to
receive this information and support when co-workers welcome them into the work team. Co-workers
also aid the socialization process by being t1exible and tolerant in their interactions w ith new hires.
Newcomer socialization is most successful when companies help to strengthen social bonds
between the new hires and current employees. Cisco Systems is a role model in th is regard. For
example, one newcomer at the California-based Internet technology company recently described how
duri ng her first two weeks teammates helped her learn about the work context, took her out to res-
taurants, actively sought her ideas in team meetings, and held a game night so everyone could have
fun socializing after work. Another good example is apparent at Lupin Limited, which has a popular
buddy system that not only improves socialization of newcomers at the Mumbai, India, pharmaceuti-
cal company; it ha~ also become a valuable form of leadership development for the buddy co-worker.
“A happy by-product of the buddy program is the biggest supervisor training program the company
has ever conducted in its history,” says Divakar Kaza, Lupin’s president of human resources. 10 1
Chapter Summary
LO 1 Describe the elements of organiza tional culture and discuss the importa nce of organiza tional
su bcultures.
Organizational culture consists of the values and assumptions shared w ithin an organization. S hared
assumptions are nonconscious, taken-for-granted perceptions or beliefs that have worked so well in the past that
they are considered the correct way to think and act toward problems and opportunities. Values are stable, evalua-
tive beliefs that guide our preferences for outcomes or courses of action in a variety o f situations.

4 14 Part Four Organizational Processes
Organizations differ in their cultural content, that is, the relative ordering of values. There are several classifi-
cations of organizational culture, but they tend to oversimplify the wide variety of cultures and completely ignore
the underlying assumptions of culture. Organizations have subcul tures as well as the dominant cul ture. Subcul-
tures maintain the organization’s standards of performance and ethical behaviour. They are also the source of
emerging values that replace misal igned core values.
L02 L ist four categories of artifacts through which corporate culture is d ecip hered.
Artifacts are the observable symbols and signs of an organization’s culture. Four broad categories of
artifacts include organizational stories and legends, rituals and ceremonies, language, and physical
structures and symbols. Understanding an organ ization’s culture requires assessment of many artifacts because
they are subtle and often ambiguous.
L03 Discuss the importance of organizational culture and the conditions under which organizational
culture s trength improves organizational performance.
Organizational culture has three main functions: it is a form of social control, the “social glue” that
bonds people together, and a way to help e mployees make sense of the workplace. Companies with strong cultures
generally perform better than those with weak cultures, but only when the cultural content is appropriate for the
organi zation’s environment. Also, the culture should not be so strong that it drives out dissenting values, which
may form emerging values for the future. Organi zations should have adaptive cultures so that employees s upport
ongoing change in the organization and their own roles.
L04 Compare and cont rast four st rategies for mer ging organiza tional cultures.
Organizational culture cla~hes are conm10n in mergers and acquisitions . This problem can be minimized
by perfonning a bicultural audit to diagnose the compatibility of the organizational cultures. The four
main strategies for merging different corporate cultures are assimilation, deculturation, integration, and separation.
LOS Describe fi ve strategies for changing and s trengthening an organization ‘s culture, including
the application of attraction-selection-attrition theory.
An organization’s culture begins with its founders and leaders, because they use personal values to trans-
form the organization. The founder’s activities are later retold a~ organizational stories. Companies also introduce arti-
fact~ a~ mechanisms to maintain or change the culture. A related strategy is to introduce rewards and recognition practice~
that are consistent with the desired cultural values. A fourth method to change and strengthen an organization’s culture is
to support workforce stability and communication. Stability is necessary because culture exist~ in employees. Conmmni-
cation activities improve sharing of the culture. Finally, companies strengthen and change their culture by attracting and
selecting applicants with personal values that fit the company’s culture, by encouraging those with misaligned values to
leave the company (attrition), and by engaging in organizational socialization-the process by which individuals leam
the values, expected behaviours, and social knowledge necessary to a<;,~ume their roles in the organization. LOG Descri be the organization al socialization p rocess and identify s trategies to improve that process. Organizational socialization is the process by which individuals learn the values, expected behav- iours, and social knowledge necessary to assume their roles in the organ ization. It is a process of both learning and adjustment. During this process, job applicants and newcomers develop and test their psycho- logical contract-personal beliefs about the terms and condi tions of a reciprocal exchange agreement between that person and another party (the employer). Employees typically pas.~ through three socialization stages: pre-employment, encounter, and role management. To manage the socialization process, organizations should introduce realistic job previews (RJPs) and recognize the value of socialization agent~ in the proces.~ . RJPs give job applicant~ a realistic balance of positive and negative information about the job and work context. Socialization agent~ provide information and social support during the socialization process. Key Terms adaptive culture artifacts attraction -selection -attrition (ASA) th eory bicult ural a udit ccrcntonies organizational cultur e or ganization al socialization psychological con tract realistic job preview (RJP) reality sh ock rit u als Chapter Fourteen Organizational Cultu re 4 15 Critical Thinking Questions 1. Superb Consultants has submitted a proposal to analyze your organization's culture. The proposal states that Superb has developed a revolutionary new survey to tap the company's true culture. T he survey takes j ust 10 minutes to complete, and the consultants say results can be based on a small san1ple of employees. Discuss the merits and limitations of this proposal. 2. Some people suggest that the most effective organizations have the strongest cultures. What do we mean by the "strength" of organizational culture, and what possible problems are there with a strong organizational culture? 3. The CEO of a manufacturing fir m want~ everyone to s upport the organization's dominant culture of lean effi- c iency and hard work. The CEO ha~ introduced a new reward system to rein force this culture and personally interviews all professional and managerial applicants to ensure that they bring s imilar values to the organiza- tion . Some employees who criticized these values had their careers sidel ined until they left. Two midlevel managers were f ired for supporting contrary values, such as work-life balance. Ba~ed on your knowledge of organizational subcultures, what are the potential problems the CEO is creating? 4. Identify at lea~t two artifacts you have observed in your department or school fro m each of the four broad categories: (a) organizational stories and legends, (b) rituals and ceremonies, (c) language, (d) physical struc- tures and symbols. 5. "Organ izations are more like ly to succeed when they have an adaptive culture." What can an organization do to fos ter an adaptive culture? 6. Suppose you are a~ked by senior officers of a city government to identify ways to re inforce a new culture of teamwork and collaboration . The senior executive group clearly s upports these values, but it wants everyone in the organization to embrace them. Identify four types of activities that would strengthen these cultural values. 7. Is it possible to have knowledge of what an organizational culture is before you become a part o f the organi- zation? How important is it for you to al ign yourself with your organizational culture? 8. Socialization is most intense when people pass through organizational boundaries. One exan1ple is your e ntry into the college or university that you are now attending. What learning and adjustment occurred as you moved from outsider to newcomer to insider a~ a student? Case Study: HILLTON'S TRANSFORMATION by Steven L. McShan e, Cu rtin University (Australia ) and University of Victoria (Canad a) 1\venty years ago, Hillton wa~ a small city (about 70,000 residents) that served as an outer suburb to a large Canadian metropolitan city. Hillton's munic ipal government treated its e mployees like family and gave them a great deal of autonomy in their work. Everyone in the organization (including the two labour unions representing e mployees) implicitly agreed that the leaders and s upervisors of the organization should rise through the ranks ba~ed on their experience. Few people were ever hired fro m the outside into middle or senior positions. The rule of employment at Hillton was to learn the job skills, maintain a rea~onably good work record, and wait your turn for promotion. As Hi llton's population grew, so did the city's workforce to keep pace with the increa~ing demand for municipal services. This meant that employees were promoted fairly quickly and were almost a~sured lifetime employment. Until recently, Hillton had never laid off any e mployee. The organization's culture could be described a~ one of entitlement and comfort. Neither the e lected city councillors nor the c ity manager bothered departmental managers about their work. There were few cost controls, because rapid growth placed more empha~is on keeping up with the population expansion. The public became somewhat more critical of the city's poor service, including road construction at inconvenient times and the apparent lack of respect some e mployees showed toward taxpayers. During these expansion years, Hillton put most of its money into "outside" (also called "hard") municipal ser- vices. T hese included road building, utility construction and maintenance, fire and police protection, recreational fac ilities, and land use control. This e mphasis occurred because an expanding population demanded more of these services, and most of Hillton's senior people came from the outside services group. For example, Hillton's city 4 16 Part Four Organizational Processes manager for many years was a road development engineer. The " inside" workers (taxation, community services, etc.) tended to have less seniority, and their departments were given less priority. As conmmter and road systems developed, Hillton attracted more upwardly mobile professionals into the commu- nity. Some infra~tructure demands continued, but now these suburban dwellers wanted more of the "soft" services, such as libraries, social activities, and community services. They also began complaining about the way the municipal- ity was being run. By this time, the population had more than tripled , and it was increa~ingly apparent that the organization needed more corporate planning, information systems, organization development, and cost control systems. In various ways, residents voiced their concerns that the munic ipality was not providing the quality of management that they would expect from a city of it~ size. A few years ago, a new mayor and council replaced most o f the previous incumbents, mainly on the platform of improving the municipality's management structure. The new council gave the c ity manager, along with two other senior managers, an early retirement buyout package. Rather than promoting fro m the lower ranks, council decided to fi ll all three positions with qualified candidates from large municipal corporations in the region. T he following year, several long-term managers left Hillton, and at least half of those positions were f illed by people from outside the organization. In less than two years, Hillton had eight senior or departmental managers hired from other municipalities who played a key role in changing the organization's value system. These eight managers became known (often with nega- tive connotations) a~ the " professionals." T hey worked closely with one another to change the way middle- and lower- level managers had operated for many years. They brought in a new computer system and empha~ized cost controls where managers previously had complete autonomy. Promotions were increa~ingly ba~ed more on merit than seniority. The "professionals" frequently announced in meetings and newsletters that municipal e mployees must provide superlative custo mer service and that Hillton would become one of the most customer-fr iendly places for citizens and those who do bus iness w ith the munic ipality. To this end , these managers were quick to support the public's increasing demand for more "soft" services, including expanded library services and recreational activities. And when population growth recently fl attened out, the city manager and other professionals gained council support to lay off a few of the outside workers due to lack of demand fo r hard services. One of the most significant changes wa~ that the "outside" departments no longer held dominant positions in city management. Most of the "professional" managers had worked exclusively in administrative and related inside jobs. Two had Ma~ter of Business Administration degrees. This led to some tension between the profes- s ional managers and the o lder outside managers. Even befo re the layoffs, managers of outside department~ resisted the changes more than others. T hese manag- ers complained that their employees with the highest seniority were turned down for promotions. They argued for more budget and warned that infra~tructure problems would cause liability problems . lnfom1ally, these out~ide managers were s upported by the labour union representing outside workers. T he union leaders tried to bargain fo r more j ob guarantees, whereas the union representing inside workers focused more on improving wages and benefits. Leaders of the outside union made several statement~ in the local media that the city had " lost its heart" and that the public would suffer fro m the actions of the new professionals . Discussion Questions I. Contrast Hillton's earlier corporate culture with the emerging set of cultural values. 2 . Considering the difficulty in changing organizational culture , why does Hillton's management seem to have been successful in this transformation? 3. Identify two other strategies that the city might consider to reinforce the new set of corporate values. Copyright ~2000 Steven L. McShane. This case is a s lightly fictionalized account of actual events in a Canadian municipality. Team Exercise: ORGANIZATIONAL CULTURE METAPHORS by David L. L uech auer, Bu tler University an d Gar y M. S hulm a n, M iami University Purpose Both parts of this exercise are designed to help you understand, assess, and interpret organizational culture us ing metaphors. r- Chapter Fourteen Organizational Cultu re 41 7 PART A: ASSESSING YOUR SCHOOL'S CULTURE Instructions A metaphor is a fig ure of speech that contains an implied comparison between a word or phrase that is ordinarily used for one thing but can be applied to another. Metaphors also carry a great deal of hidden meaning- they say a lot about what we think and fee l about that object. T herefore, this activity asks you to use several metaphors to define the organizational culture of your university, college, or institute. (Alternatively, the instructor might ask students to assess another organization that most students know about.) Srep I: The class will be divided into teams of 4 to 6 members. Srep 2: Each team wiU reach consensus on which words or phrases should be inserted in the blanks of the statement~ presented below. This infom1ation should be recorded on a fli p chart or 0\-erhead acetate for clas.~ presentation. The instructor wiU provide 15 to 20 minutes for tean1s to detemline which words best describe the college's culture. If our school was an animal, it would be a ___ because __ _ If our school was a food, it would be ___ because ---· If our school wa~ a place, it would be ___ because __ _ If our school wa~ a sea~on, it would be ___ because---· If our school wa~ a T V show or movie, it would be ___ because ---· Srep 3: T he class wi ll listen to each team present the metaphors that it believes symbolizes the school's culture. For example, a team that picks winter for a season might mean they are feeling cold or distant about the school and its people. Srep 4: The cla~s will discuss the questions stated below. DISCUSSION QUESTIONS FOR PART A 1. How easy wa~ it for your group to reach consensus regarding these metaphors? What does that imply about the culture of your school? 2. How do you see these metaphors in action? In other words, what are some critical school behaviours or other artifac ts that reveal the presence of your culture? 3. Think of another organi zation to which you belong (e.g., work, religious congregation). What are its dominant cultural values, how do you see them in action, and how do they affect the effectiveness of that organization? PART B: ANALYZING AND INTERPRETING CULTURAL METAPHORS Instructions Previously, you completed a metaphor exercise to describe the corporate culture of your school. That exercise gave you a taste of how to administer such a diagnostic tool and draw inferences from the results generated. T his activity builds on that experience and is designed to help refine your ability to analyze s uch data and make suggestions for improvement. Five work teams (4 to 7 members, mixed gender in all groups) of an organization completed the metaphor exercise s imilar to the exercise in which you participated in cla~s (see Part A above). T heir responses are shown in the table below. Working in tean1s, analyze the information in this table and answer these questions: DISCUSSION QUESTIONS FOR PART B 1. In your opinion, what are the dominant cultural values in this organization? Explain your answer. 2. What are the positive aspects o f this type of culture? 3. What are the negative a~pects of d1is type of culture? 4 . What is this organization's main bus iness, in your opinion? Explain your answer. 5. These groups all report to one manager. What advice would you give to that person about this unit? - Metaphor Resu]L'i of Five Teams in an Organizationa Team Animal Food Place TV Show Season I Rabbit Big Mac Casino Parks & Recreation Spring 2 Horse Taco Racetr•ck CSI Spring 3 Elephan t Ribs Circus Big Bang Theory Summer 4 Eagle Big Mac Las Vegas Drogon:r"Den Spring 5 Panthe r Chinese New York Crimina{ Minds Racing Sourr:e: Adapted from D. L. luechauer and G. M. Shulman. "Using a Metaphor E:ted by the authors of this ac tivity.

418 Part Four O rganizational Processes
Self-Assessments for Chapter 14
SELF-ASSESSMENT NAME
Which corporate cul ture do you prefer?
DESCRIPTION
An organization’s culture may be very appealing to some people
and much less so to others. Afte r all. each of us ha.’i a hierarchy o f
persona] values. and that hier.trchy may be compatible o r incompat·
ible with the company•s shared values. This self-assessment
identifies the corporate culture that fiL~ most closely w ith your
persona] values and a’isumptions.

CHAPTER 15
Organizational Change
LEARNING OBJECTIVES
After reading this chapter, you should be able to
LO 1 Describe the e lements of Lewin’s force fie ld ana lysis model.
L02 Discuss the reasons why people resist organizational change and how change agents should view
this resistance.
L03 Outline six st rateg ies for m inim izing resistance to change, and debate ways to effectively create an
urgency for change.
L04 Discuss how leadersh ip, coa litions, social networks, and pilot projects assist organ izational change.
LOS Describe and compare action research, appreciative inquiry, large group interventions, and pa rallel
learn ing structures as forma l approaches to organ izational change.
LOG Discuss two c ross-cu ltura l and th ree eth ical issues in organizational change.
Blueshore Financial w as founded in the 1940s as North Shore Credit Union, mainly serving the
needs of shipbu ild ing wo rkers and deep sea fisherm en living along Vancouver’s north shore. North
Va ncouver has since becom e on e of Ca nada’s wealthiest areas, and its residents hav e much more
4 19

420 Part Four Organizational Processes
sophisticated banking needs. However, the credit un ion had not evolved until recently. “We were a
blue-collar credit union in a white-collar world,” adm its Blueshore CEO Chris Catliff. “We were little
more than a paper-based savings and loan … We had no differentiated brand, and the credit union
was floundering.”
Catliff explained to employees that the organization’s survival depended on reinventing itself
to better serve its clients through differentiated financial services. He also cautioned that the
transformation would require considerable adaptability and commitment from “a dedicated team
hungry for change.”
A special task force of employees and managers worked with an external consultant to develop
the new business model. “They worked in a boardroom for two weeks, fuelled by pizza, the odd
beer and a desire to innovate,” recalls Catliff, who challenged the team “not to come back until
you’ve reinvented banking.” The task force proposed a list of dramatic innovations, including a
much narrower focus on wealth-oriented services in a “financial spa” setting, rather like a luxury
hotel. “You don’t have to be a big global organization to succeed in business, but sometimes you
have to have big ideas,” Catliff suggests.
Blueshore marketing vice-president Catharine Downes describes the credit union’s change
process as “a massive project, touching all aspects of our business, culture, and operations. It
demanded a highly orchestrated approach to ensure every single employee fully understood the
scope of the change. From both a tactical and cultural standpoint, rebrand ing represented a major
change management process for our associates and clients.”
Commun ication with employees was key to the success of Blueshore’s transformation. “The
most practical piece of advice I can offer others is to recogn ize the critical importance of open
commun ication in times of change. Be consistent, repetitive, and authentic,” Catliff advises.
“Tell them [employees and others] why you are changing and what you hope to gain from the
change.”
Catliff also emphasizes the power of employee involvement in organizational change. “Ask your
staff for their input, actively listen to what they have to say, and show you value their perceptions
and opinions. By doing this you will form a relationship based on mutual trust and respect, which
will make it easier for you to initiate and integrate change together.”
Blueshore’s radical transformation took several years and required some difficult adjustments.
“The tough part was that some staff didn’t like the change, and self-selected out,” says Catliff.
But the results have exceeded expectations. BlueShore Financial’s assets under adm inistration
have jumped from over $700 million in 2000 to $4.7 billion today. Blueshore’s dozen branches
have become lead ing financial planning centres from Vancouver to Whistler. Blueshore is also
consistently rated as one of Canada’s best employers (small and medium category).’
B l ueshore Financial’s transformati on from a flounderi ng mass market cred it union to one of Van-couver’s leadi ng financial pl ann ing f irms illustrates many of the strategies and practices neces-
sary to successfully change organizations. Chris Catliff, l ike other leaders l ooking for organizational
change, created an urgency for change, actively communicated the change process, and involved
employees as partners i n the process. Bl ueshore’s transformation took several years and required dif-
ficul t adjustments. Indeed, most organizational change is messy, requ iri ng considerable leadership
effort and vigi lance. As we w ill describe throughout th is chapter, the challenge of change is not so
much in decidi ng whi ch way to go; the challenge is in the execution of this strategy. When l eaders
discover the need for change and identify some ideas about the preferred route to a better future, the
change process involves navigating around the numerous obstacles and gaining organization-wide
support for that change.
This chapter unfolds as follows. We begin by introducing Lewin’s model of change and its compo-
nent parts. This discussion includes sources of resistance to change, ways to mini mize this resistance,
and ways to stabil ize desired behaviours. Next, the chapter examines four approaches to organizational
change-acti on research, appreciative inquiry, large group interventi ons, and parallel learning struc-
tures. The last section of thi s chapter considers both cross-cul tural and ethi cal issues in organizational
change.

Chapter Fifteen Organizational Change 4 21
Lewin’s Force Field Analysis Model
“I’ve always believed that when the rate of change inside an instin1tion becomes slower than
the rate of change outside, the end is in sight. The only question is when.”2 This statement
by former General Electric CEO Jack Welch highlights one of the messages throughout this
book: organizations operate as open systems that need to keep pace with ongoing changes in their external
environment, such as consumer needs, global competition, technology, community expectations, govern-
ment (de)reguJation, and environmental standards. Successful organizations monitor their environments
and take appropriate steps to maintain a compatible fit with new external conditions. Rather than resisting
change, employees in successful companies embrace change as an integral part of organizational life.
It is easy to see environmental forces pushing companies to change the way they operate. What is
more difficult to see is the complex interplay of these forces on the internal dynamics of organizations.
Social psychologist Kurt Lewin developed a model to describe this process using the metaphor of a force
field (see Exhibit 15. 1).3 Although it was developed more than 50 years ago, more recent reviews affirm
that Lewin’s force field analysis model remains one of the most widely respected ways of viewing the
change process.4
One side of the force field model represents the drivingforces that push organizations toward a new state
of affairs. These might include new competitors or technologies, evolving client expectations, or a host of
other environmental changes. Corporate leaders also produce driving forces even when external forces for
change aren’t apparent. For instance, some experts call for “divine discontent” as a key feaUire of success-
fu l organizations, meaning that leaders continually urge employees to strive for higher standards or bet-
ter practices. Even when the company outshines the competition, employees bel ieve they can do better.
“We have a habit of divine discontent with our performance,” says creative agency Ogilvy & Mather
about its corporate culture. “It is an antidote to smugness.”5
The other side of Lewin’s model represents the restraining forces that maintain the status quo.
These restraining forces are commonly called “resistance to change” because they appear to block the
change process. Stabil ity occurs when the driving and restraining forces are roughly in equilibrium-
that is, they are of approximately equal strength in opposite directions.
Lewin’s force field model emphasizes that effective change occurs by unfreezing the current situ-
ation, moving to a desired condition, and then refreezing the system so it remains in the desired state.
Unfreezing involves producing disequilibrium between the driving and restraining forces. As we will
EXHIBIT 15.1 Lewi n’s Force Field Analysis Model
Desired
Condit ions
1
Current
Condit ions
Befo re Change ——- After Change

422 Part Four Organizational Processes
describe later, this may occur by increasing the driving forces, reducing the restraining fo rces, or doing
a combination of both. Refreezing occurs when the organization’s systems and structures are aligned
with the des ired behaviours. They must support and reinforce the new role patterns and prevent the
organization from slipping back into the old way of doing things. Over the next section, we use Lewin’s
model to understand why change is blocked and how the process can evolve more smoothly.
Understanding Resistance to Change
United Airl ines conti nues to suffer from operational and customer service problems
a few years after its merger w ith Continental Airlines. United executives say the poor
results are partly due to the challenges of combining complex reservation and opera-
tional systems. But they have also been frus trated by subtle fo rms of employee resistance to change.
Some Continental employees have opposed United Airlines’ operational practices, while some United
Airlines employees have failed to embrace Continental’s customer service standards. ” You know, the
cultural change takes time,” explai ned the form er United Airlines CEO who orchestrated the merger.
“And people resist change. People are sort of set in their ways.”6
Executives at United Airl ines experienced considerable resistance to change followi ng the merger
with Continental Airl ines. Resistance to change takes many forms, ranging from overt work stoppages
to subtle attempts to continue the old ways.7 A study of Canadian bank employees reported that subtle
resistance is much more common than overt resistance. Some employees in that study avoided the
desired changes by moving into di fferent jobs at the bank. Others continued to perform tasks the old
way as long as management didn’t notice. Even when employees complied with the planned changes,
they showed resistance by performing the new task whi le letting customers know that they disapproved
of these changes fo rced on them!8
• by the NUMBERS
Facing the Challenge of Resistance to Change9
o f 517 Canadian human
resource managers
surveyed say employees
resist changes p ut forward
by management.
of 2,219 executives and
employees surveyed
globally say they suffer
from change fatigue (feeling
worn out from changing
too much or too often).
of 2,219 executives and
employees surveyed
globally say their company
d oesn’t have the necessary
capabilities to ensure that
change is sustained over time.
of 814 recruitment
professionals surveyed
in the U.S., U.K., China,
and five other countries say
the main barrier to inno-
vation in their organization
is a corporate culture that
resists change.
33% of executives surveyed
in 3 28 organizations
(employing 5 million
people globally) report
that their managers are
effective at dealing openly
w ith resistance to change.

Chapter Fifteen Organizational Change 4 23
Most change agents are understandably frus trated by passive or active resistance to their planned
change, but resistance is a common and natural human response. As Canadian-born economist John
Kenneth Galbraith once quipped, “Faced with the choice between changing one’s mind and proving
that there is no need to do so, almost everyone gets busy on the proof.” 10 Even when people support
change, they typically a~sume that it is others-not themselves-who need to do the changing.
Resistance is a form of conflict, but change agents unfortunately tend to interpret that disagreement
as relationship conflict (see Chapter I I). They describe the people who resist as unreasonable, dys-
functional, and irrational reactionaries to a desirable initiative. Perversely, the change agent’s conflict-
oriented response to resistance tends to escalate the confl ict, which often generates even stronger
resistance to the change initiative.
A more productive approach is to view resistance to change a~ task conf1ict. From the task conflict
perspective, resistance is a signal either that the change agent has not sufficiently prepared employees for
change or that the change initiative should be altered or improved. 11 Employees might not feel a sufficiently
strong urgency for change, or they might feel the change strategy is ill-conceived. Even if they recognize the
need for change and agree with the strategy, employees might resist because they lack confidence to change
or believe the change will make them worse off than the current sin1ation. Resistance takes many forms, and
change agents need to decipher those different types of resistance to understand their underlying causes. 12
Resistance is also a form of voice, so the discussion potential ly improves procedural justice (see
Chapter 5) as well a~ decision making (see Chapter 7). By redirecting initial forms of resistance into
constructive conversations, change agents can generate a strong feeling of fairness among employees.
Furthermore, resistance is motivated behaviour; it potentially engages people to think about the change
strategy and process. Change agents can harness that motivational force to ultimately strengthen com-
mitment to the change initiative.
WHY EMPLOYEES RESIST CHANGE
Change management experts have developed a long list of reasons why people resist change.13 Some
people inherently oppose change because of their personality and values.14 Aside from these disposi-
tional factors, employees typically oppose organizational change because they lack suff icient motivation,
ability, role clarity, or situational support to change their attin1des, decisions, and behaviour. 15 In other
words, an employee’s readiness for change depends on all four elements of the MARS model. T hese
MARS elements are the foundation s of the six most commonly cited reasons why people resist change:
( !)negative valence of change, (2) fear of the unknown, (3) not-invented-here syndrome, (4) breaking
routines, (5) incongruent team dynamics, and (6) incongruent organizational systems and structures.
Are you ready for change? You can discover your level of readiness for change by
completing this self-assessment in Connect.
Negative Valence of Change Employees tend to resist change when they bel ieve the new work
environment w ill have more negative than positive outcomes. 16 In other words, they apply (although
imperfectly) the rational choice decision-making model (Chapter 7) to estimate whether the change
wi ll make them better or worse off (i.e., positive or negative valence). This cost-benefit analysis mainly
considers how the change wi ll affect them personally. However, resistance also increases when employ-
ees bel ieve the change will do more harm than good to the team, organization, or society. 17
Fear of the Unknown Organizational change usually has a degree of uncertai nty, and employees
tend to assume the worst when they are unsure whether the change will have good or bad outcomes.
Uncertainty is also associated with lack of personal control, which is another source of negative emo-
tions.18 Consequently, the uncertainty inherent in most organizational change is usually considered less
desirable than the relative certainty of the status quo. As such, it adds more negative valence to the
cost-benefit calculation we described above.

4 2 4 Part Four Organizational Processes
GEORGIA, USA
WELCOM ES
General Motors (GM) has in-sourced almost all of its information tech nology (IT) work, h ired
10,000 IT employees to replace contractors, built new IT in novation centres, and reduced 23
data centres owned by supplie rs to j ust two centres owned by GM. GM’s chie f information
o fficer Randy Mott (shown in this photo) and h is executive team faced many logistical challenges
througho ut the transformation . They were also challenged by resistance from GM line managers,
many of whom were concerned that GM’s IT staff wouldn ‘t p rovide the same q uality of service
that t he external contractors had provided.
“This su pplier is doing a great job for me, so don’t mess it up,” some managers warned. Line
manag ers’ fear o f the unknown and perceived negative outcomes about the IT changes led to
“some really frank discussions,” Mott acknowledges. “In the early days we were fighting the fact
that the IT organization’s credibility for building and creating and supporting things was not high.” 19
© David Goldman/AP Photos/CP Images
Not-Invented-Here Syndrome Employees sometimes oppose or even discreetly undermine orga-
nizational change initiatives that originate elsewhere. This “not-invented-here” syndrome is most appar-
ent among employees who are usually responsible for the knowledge or initiative, rather than the external
sources.20 For example, information technology staff are more likely to resist implementing new technol-
ogy championed by marketing or finance employees. If the IT staff support the change, they are implicitly
acknowledging another group’s superiority within IT’s own area of expertise. To protect their self-worth,
some employees del iberately inflate problems with changes that they did not initiate, just to “prove” that
those idea~ were not superior to their own. As one consultant warned, “Unless they’re scared enough to
listen, they’ll never forgive you for being right and for knowing something they don’ t.”21
An example of the not-invented-here syndrome occurred several years ago when Goldcorp CEO
Rob McEwan decided to post the Canadian mining company ‘s confidential geological data online
and offer a generous reward to anyone who could help find more gold on the property. The Goldcorp
Challenge wa~ a huge success, but the firm ‘s geological staff complained just before the event was
launched. “We have real concerns,” they told McEwen. “You’re going to ask the rest of the world to tell
you where we’ re going to find gold in our mine, and we think they’ re going to think we’ re real ly dumb
and that you don’t have any confidence in us.”22
Breaking Routines People are creatures of habit. They typically resist initiatives that require
them to come out of their comfort zones and to break those automated routines and learn new role pat-
terns. And unless the new patterns of behaviour are strongly supported and reinforced, employees tend

Chapter Fifteen Organizational Change 4 25
to revert to their past routines and habits. “When you are leading for growth, you know you are going
to disrupt comfortable routines and a~k for new behaviour, new priorities, new ski lls,” says Ray Davis,
executive chair of Oregon-based Umpqua Bank, which is regarded as one of America’s most innova-
tive financial institutions. “Even when we want to change, and do change, we tend to relax and the
rubber band snaps us back into our comfort zones.”23
Incongruent Team Dynamics Teams develop and enforce conformity to a set of norms that
guide behaviour (see Chapter 8). However, conformity to existing team norms may discourage employ-
ees from accepting organizational change. For instance, organizational initiatives to improve customer
service may be thwarted by team norms that discourage the extra effort expected to serve customers at
this higher standard.
Incongruent Organizational Systems and Structures Rewards, information systems, pat-
terns of authority, career paths, selection criteria, and other systems and structures are both friends
and foes of organizational change. When properly al igned, they reinforce desired behaviours. When
misaligned, they pull people back into their old attitudes and behaviour. Even enthusia~tic employees
lose momentum after fail ing to overcome the structural confines of the past.
Unfreezing, Changing, and Refreezing
According to Lewin’s force field analysis model, effective change occurs by unfreezing
the current situation, moving to a desired condition, and then refreezing the system so
it remains in this desired state. Unfreezing occurs when the driving forces are stronger
than the restraining forces. This happens by making the driving forces stronger, weakening or remov-
ing the restraining forces, or combining both.
The first option is to increase the driving forces, motivating employees to change through fear or
threats (real or contrived). This strategy rarely works, however, because the action of increasing the
driving forces alone is usually met with an equal and opposing increa~e in the restraining forces. A use-
fu l metaphor is pushing against the coils of a mattress. The harder corporate leaders push for change,
the stronger the restraining forces push back. This antagonism threatens the change effort by producing
tension and conflict within the organization.
The second option is to weaken or remove the restraining forces. The problem w ith this change
strategy is that it provides no motivation for change. To some extent, weakening the restraining forces
is like clearing a pathway for change. An unobstructed road makes it easier to travel to the destination
but does not motivate anyone to go there. The preferred option, therefore, is to both increase the driv-
ing forces and reduce or remove the restraining forces. Increasing the driving forces creates an urgency
for change, whi le reducing the restraining forces lessens motivation to oppose the change and removes
obstacles such a~ lack of abi lity and sintational constraints.
CREATING AN URGENCY FOR CHANGE
A few months after he became CEO of Nokia Corp., Canadian executive Stephen Elop sent employees
a scorching email, warning them about the urgency for change. “I have learned that we are standing on
a burning platform,” wrote Elop. “And, we have more than one explosion-we have multiple points of
scorching heat that are fuell ing a blazing fire around us.” Elop specifically described strong competi-
tion from Apple and Google, Nokia’s tumbling brand preference, and its falling credit rating.24
Nokia has since sold its mobile phone division to Microsoft, but this incident illustrates how execu-
tives recognize the need for a strong urgency for change.25 Developing an urgency for change typical ly
occurs by informing or reminding employees about competitors, changing consumer trends, impend-
ing government regulations, and other forms of turbulence in the external environment. These are the
main driving forces in Lewin’s model. They push people out of their comfort zones, energizing them to
face the r isks that change creates. In many organizations, however, leaders buffer employees from the

426 Part Four Organizational Processes
Global Connections 15.1:
PANASONIC GENERATES AN URGENCY FOR CHANGE
BY REVEALING THE TRUTH 26
One of Kazuhiro Tsuga’s first actions as president of Panasonic Corporation was to shut down
the company’s plasma flat-panel television screen business. For several years, executives
and engineers at the Japanese company had fiercely defended the company’s considerable
investment in plasma screens, which provide higher-quality images but are more expensive
and much heavier than popular LCD TV screens.
Employees also lacked an urgency for change because Panasonic’s previous executives
had hidden the severity of declining sales. “Only a few members of the management team
knew how deep the loss was [at the TV operation],” explains Tsuga (shown in this photo).
“What I did was tell them, ‘ This is the loss, a huge loss.’ I showed them the losses in detail at
every stage. Once it’s visible to them, people don’t want to continue to make losses.”
Panasonic Corporation president Kazuhiro Tsuga created an urgency for change away from
plasma screen development by revealing the severity of declining sales in that product.
© ZUMA Press, l nc.fAiamy Stock Photo
external environment to such an extent that these driving forces are hardly felt by anyone below the top
executive level. The result is that employees don’t understand why they need to change and leaders are
surprised when their change initiatives do not have much effect.
Customer-Driven Change Some companies fuel the urgency for change by putting employees
and managers in direct contact w ith customers. Dissatisfied customers represent a compelling drivi ng
force for change because the organization’s survival typically depends on having customers who are sat-
isfied w ith the product or service. Personal interaction with customers also provides a human element
that further energizes employees to change current behaviour patterns. For example, JPMorgan Chase
executives take bus trips to visit customers and bank branches across the United States. These bus tours

Chapter Fifteen Organizational Change 4 2 7
generate an urgency fo r change because executives get direct exposure to ways in which the bank can
be improved. “We’ve already learned 100 differen t things,” said JPMorgan Chase CEO Jamie Dimon
during a bus tour around Florida, citing examples such as “Why can’t we do mortgages quicker?” and
“Why can’t we service a credit card account better out of a branch?”27
Creating an U rgency for Change without External Forces Exposing employees to exter-
nal forces can strengthen the urgency for change, but leaders often need to begin the change process
before problems come knocking at the company ‘s door. The chal lenge is greatest when companies are
successful in their markets. Studies have found that when the organization is performing well, decision
makers become less vigilant about external threats and are more resistant to change. “The biggest risk
is that complacency can also come with that success,” warns Richard Goyder, who recently stepped
down as CEO of Wesfarmers, Austral ia’s largest conglomerate. “That complacency may result in risk-
aversion, or it may simply show up as a lack of urgency, as people take the foot off the accelerator and
just assume that success w ill come as it always has.”28
Creating an urgency for change when the organization is the market leader requires plenty of persua-
sive influence to help employees visual ize future competitive threats and environmental shifts. Experts
warn, however, that employees may see this strategy a~ manipulative, which produces cynicism about
change and undermines trust in the change agent29 Fortunately, the urgency for change doesn’ t need
to originate from problems or threats to the company; this motivation can also develop through the
leader’s vision of a more appealing future. A future vision of a bel!er organization effectively makes
the current situation less appealing. When the vision connects to employees’ values and needs, it can
be a motivating force for change even when external problems are insignificant.
Are you tolerant of change? You can discover your level of tolerance fo r change by
completing this self-assessment in Connect.
REDUCING THE RESTRAINING FORCES
Earl ier, we used the mattress metaphor to explain that increa~ing the driving forces alone will not bring
about change because employees often push back harder to offset the opposing forces. Instead, change
agents need to address each of the sources of resistance. Six of the main strategies for minimizing
resistance to change are outlined in Exhibit 15.2. Communication, learning, employee involvement,
and stress management should be the first priorities for change management. 30 However, negotiation
and coercion may be necessary where some people will clearly lose something from the change and in
cases where the speed of change is critical.
Communication Communication is the highest priority and firs t strategy required for any orga-
nizational change. According to one survey, communication (together w ith involvement) is consid-
ered the top strategy for engaging employees in the change process.31 Communication improves
the change process in at least two ways.32 One way is that communication is necessary to generate
the urgency for change that we described previously. Leaders motivate employees to support the
change by candidly tell ing them about the external threats and opportunities that make change so
important. Th is function was illustrated in the opening case study for this chapter. When the future
of North Shore Credit Union (now Blueshore Financial) became apparent, CEO Chris Catliff com-
municated directly to employees about the problems fac ing the company and why significant change
was urgently needed. “Tell them [employees) why you are changing and what you hope to gain from
the change,” advises Catliff.
The second way that communication minimizes resistance to change is by illuminating the future
and thereby reducing fear of the unknown. The more leaders communicate their vision, particularly
details about that future and milestones already achieved toward that future, the more easily employees
can understand their own roles in that future.

428 Part Four Organizational Processes
EXHIBIT 15.2 Strategies for Minimizing Resistance to Change
Sllnav £..-pie W..Applled ……….
Communicatio n C ustomer complai nt letters are s hown When e mployees don’t feel an Time-consuming and potentially
to employees. urgency for change, don•t know how costl y.
the change will affect them, or resist
change d ue to a fear o f the unknown.
Learning Employees Jearn how to work in teams When employees need to break old Time-consuming. potentially costly,
as company adopt~ a team·ba~ routines and adop t new role patterns. and some employees might not be
structure. able to Jearn the new s kills.
Employee involvement Company forms a tas k fo rce to When the change effort needs more Very time-consuming. Might lead
recommend new customer service employee commitmenL some employ· to conflict and poor decisions if
pr.tctices. ees need to protect their se]f. worth, e mployees’ inte rests are incompati ble
and/or employee ideas would improve w ith o rganizational needs .
decisions abou t the change strategy.
Stress management Employees attend sessions to d iscuss When communication. tr.Uning. and Time-consuming and potentially
their wo rries about the change. involvement do not s ufficiently ease expensive. Some method’i may not
employee v.’Orries. reduce stress for all employees.
Negotiation Employee.’ agree to replaoe strict j ob When e mployees will clearly lose May be expensive. particularly if
categories with multiskilling in return something of value from the change other employees want to negotiate
for increased j o b security. and would not otherwise s upport the their support. Also tends to produce
new conditions. Also necessary when compliance but not commitment to
the company must change quickly. the change.
Coercion Company president tells managers When other s trategies are ineffective Can lead to more subtle forms of
to “get on board” with the change or and the company need.’ to change res istance. a’i well as long· tenn
leave. quickly. antagonism with the change agent.
Sources: Adapted from J. P. Kotter and LA. Schlesinger. “Choosing Strategjes for Change.” Harvard Business R~· iew 57 ( 1919). pp. 106-1 14: P.R. Lawreoc.e. “How to Deal
with Resistance to Change.” Han·ard Busines..:; Rev iew. May-June 1954. pp. 49-57.
Learning Learning is an important process in most organizational change initiatives because employees
need new knowledge and skills to fit the organization’s evolving requirements. Learning not only helps
employees perform better following the change; it also increases their readiness for change by strength-
ening their belief about working successfully in the new situation (called change self-ejjicacy). And
when employees develop stronger change self-efficacy, they develop a stronger acceptance of and com-
mitment to the change.33
Employee Involvement Employee involvement is almost essential in the change process,
although a low level of involvement may be necessary when the change must occur quickly or employee
interests are highly incompatible with the organization’s needs. The value of involvement is illustrated
in the opening case study to this chapter. Blueshore Financial’s transformation began with a task force
of employees and executives who generated creative ideas for the North Vancouver credit union’s
future. As the change proceeded, employees discussed and made suggestions to the executive team
about improved operational practices in the emerging financial spa model.
The potential benefits of employee involvement, which were discussed in (Chapter 7}, are rel-
evant to organizational change. Employees who participate in decisions about a change tend to
fee l more personal responsibil ity for its successful implementation, rather than being disinterested
agents of someone e lse’s decisions]4 This sense of ownership also minimizes the not-invented-
here syndrome and fear of the unknown . Furthermore, the work environment is so complex that
determining the best direction of the change effort requires ideas and knowledge of many people.
Employee involvement is such an important component of organizational change that special

Chapter Fifteen Organizational Change 4 2 9
initiatives have been developed to allow participation in large groups. These change interventions
are described later in the chapter.
Stress Management Organizational change is a stressful experience for many people because
it threatens self-esteem and creates uncertainty about the fu ture.35 Communication, learning, and
employee involvement can reduce some of the stressors3 6 However, research indicates that companies
also need to introduce stress management practices to help employees cope with changes? 7 In particu-
lar, stress management minimizes resistance by removing some of the negative valence and fear of the
unknown about the change process. Stress also saps energy, so minimizing stress potentially increases
employee motivation to support the change process.
Negotiation As long as people resist change, organizational change strategies will require a variety
of influence tactics. Negotiation is a form of influence that involves the promise of benefits or resources
in exchange for the target person’s compliance with the influencer’s request. This strategy potential ly
gains support from those who would otherwise lose out from the change. However, this support usually
goes no further than compl iance with the change effort. Negotiation rarely produces commitment to
change, so negotiation might not be effective in the long term.
Coercion If all else fails, leaders rely on coercion as part of the change process. Coercion includes
a range of assertive influence behaviours (see Chapter 10}, such as persistently reminding people of
their obligations, frequently monitoring behaviour to ensure compl iance, confronting people who do
not change, and using threats of punishment (including dismissal) to force compliance.
Replacing or threatening to replace staff who will not support the change is an extreme step, but it
is fairly common in major organizational transformations. Several years ago, StandardAero CEO Bob
Hamaberg threatened to fire senior managers who opposed his initiative to introduce lean management
(methods to improve work efficiency). “You must have senior management commitment,” Hamaberg
said bluntly at the time. “I had some obstacles. I removed the obstacles.” Harsh words and actions, but
due to this visionary transformation, StandardAero’s Winnipeg location (where the company began) has
grown significantly and the company overallhas become a world leader in the aircraft engine repair and
overhaul business.38
Firing people is the least desirable way to change organizations. However, dismissals and other
forms of coercion are sometimes necessary when speed is essential and other tactics are ineffective. In
particular, it may be necessary to remove several members of an executive team who are unwill ing or
unable to change their existing mental models of the ideal organization. This is also a radical form of
organizational “unlearning” (see Chapter 1) because when executives leave, they remove knowledge of
the organization’s past routines that have become dysfunctional.39 Even so, coercion is a risky strategy
because survivors (employees who do not leave) may have less trust in corporate leaders and engage in
more pol itical tactics to protect their own job security.
REFREEZING THE DESIRED CONDITIONS
Unfreezing and changing behaviour won’ t produce lasting change. People are creatures of habit, so
they easily slip back into familiar patterns. Therefore, leaders need to refreeze the new behaviours by
realigning organ izational systems and team dynamics with the desired changes. The desired patterns
of behaviour can be “nailed down” by changing the physical structure and situational conditions.
Organizational rewards are also powerful systems that refreeze behaviours.40 If the change process is
supposed to encourage efficiency, then rewards should be realigned to motivate and reinforce efficient
behaviour.
Information systems play a complementary role in the change process, particularly as conduit~ for
feedback.4 1 Feedback mechanisms help employees learn how well they are moving toward the desired
objectives, and they provide a permanent architecture to support the new behaviour patterns in the long
term. The adage “What gets mea~ured, gets done” applies here. Employees concentrate on the new pri-
orities when they receive a continuous flow of feedback about how well they are achieving those goals.

4 30 Part Four Organizational Processes
Superior Cabinets was in serious financial trouble a decade ago, so CEO Scott Hodson (shown
here) and his newly-hired executive team launched a radical transformation of the Saskatoon-
based manufacturer. They refocused the cabinetmaker from a mass production operation
to a customer-driven business that continuously reduces wasteful work processes (lean
manufacturing). Superior is now highly efficient and profitable. A decade ago, it took 400 people
and 16 weeks to produce and install 25 kitchens per day. ” Today it takes 300 people and we
install it in six weeks, guaranteed,” says Hodson.
“The reason we got through it [the transformation] was because our people embraced the
change,” Hodson emphasizes. Communication, training, and involvement were important. However,
the company also introduced several new systems and structures that reinforced and supported the
new mindset and employee behaviours. Superior invested in technology that focused information
around customers. For instance, customer orders are submitted directly online from Superior’s
showrooms and the system enables employees to monitor how well customer orders are progressing.
More precise performance standards were introduced with associated visual scorecards
that track costs, product quality, on-time delivery, and other key indicators. Production has
been reorganized into team-based cells for better coordination among staff. Superior Cabinets
employees now participate in a p rofit-sharing plan so they can benefit financially from the
company’s success42
© Superior Cabinets
Leadersh ip, Coalitions, and Pilot Proj ects
L04 Kurt Lewin’s force field analysis model is a useful template to explain the dynamics of
organizational change. But it overlooks four other ingredients in effective change pro-
cesses: leadership, coal itions, social networks, and pilot projects.
TRANSFORMATIONAL LEADERSHIP AND CHANGE
The opening case study to this chapter described how Chris Catliff transformed North Shore Credit
Union from a floundering undifferentiated savings and loan business into Blueshore Financial-a highly
successful wealth management institution focused on clients w ith complex and sophisticated financial

Chapter Fifteen Organizational Change 4 3 1
needs. Catliff and other Blueshore executives were transformational leaders in this change process. They
developed a vision of the organization’s desired future state, communicated that vision in ways that were
meaningful to others, made decisions and acted in ways that were consistent with that vision, and encour-
aged employees to experiment with ways to al ign work activities more closely with the vision.43
A key element of leading change is a strategic vision.44 A leader’s vision provides a sense of direction
and establishes the critical success fac tors against which the real changes are evaluated. Furthermore,
a vision provides an emotional foundation to the change because it links the individual’s values and
self-concept to the desired change.45 A strategic vision also minimizes employee fear of the unknown
and provides a better understanding of what behaviours employees must learn for the desired future.
COALITIONS, SOCIAL NETWORKS, AND CHANGE
One of the great truths of organizational change is that change agents cannot lead the initiative alone.
They need the assistance of several people with a similar degree of commitment to the change.46 lndeed,
some research suggests that this grou~ften called a guiding coalition-appears to be the most
important factor in the success of public sector organizational change programs.47
Membership in the guiding coalition extends beyond the executive team. Ideally, it includes a diago-
nal swath of employees representing different functions and most levels of the organization. The guid-
ing coalition is sometimes formed from a special task force that initially investigates the opportunities
for change. Members of the guiding coalition should also be influence leaders; that is, they should be
highly respected by peers in their area of the organization.
Social Networks a nd V iral C hange The change process can be strengthened through social
networks, which are structures of people connected to each other through one or more forms of inter-
dependence (see Chapter 10). They have an important role in communication and influence, both of
which are key ingredients for organizational change. To some extent, coalition members support the
change process by feeding into these networks. But social networks contribute to organizational change
whether or not the change process has a formal coalition.
Social networks are not easily controlled, yet some change agents have tapped into social networks to
build a groundswell of support for a change initiative. This viral change process adopts principles found
in word-of-mouth and viral marketing.48 Viral and word-of-mouth marketing occur when information
seeded to a few people is transmitted to others through their friendship connections. Within organiza-
tions, social networks represent the channels through which news and opinion about change initiatives are
transmitted. Participants in that network have relatively high trust, so their information and views are more
persuasive than those from more formal channels. Social networks also provide opportunities for behav-
iour observation-mployees observe each other’s behaviour and often adopt that behaviour themselves.
As key people in the network change their behaviour, that behaviour is copied by others in the network.49
Global Connections 15.2:
TRAILBLAZING VIRAL CHANGE AT RSA INSURANCE
RSA Insurance Group recently launched a flexible benefits package th at required employ-
ees to pick their preferred benefits options. But instead of just emailing reminders, human
resources staff at the U.K. insurer relied on a v iral change process that more effectively moti-
vated employees to choose their options.
HR carefully described the flexible benefits plan to 500 “trailblazers• -early adopters of
the company’s new internal social network (Yammer) who had a large following of co-workers.
(continued)

43 2 Part Four Orga nizational Processes
(continued)
Trailblazers were soon posting their views about the preferred flexible benefits offered .
These posts were read by thousands of employees, many of whom would have ignored
the email memos from HR.
“We used people in the network to communicate what their favourite elements of the
proposition were; explains RSA’s director of internal communications. Trailblazers are
role models whose ideas receive considerable interest from other employees, so they
achieve far more effective results in terms of changing employee behaviour (i.e., signing
up for preferred benefits) than HR accomplishes through impersonal emails.50
London-based RSA Insurance Group relied on viral change
through social media “trailblazers” to improve flexible benefits
selection among employees.
©Chris Batson/Aiamy Stock Photo
PILOT PROJECTS AND DIFFUSION OF CHANGE
Many companies i ntroduce change through a pilot project, whi ch involves apply ing change to one
work unit or secti on of the organization. This cautious approach tests the effecti veness of the change as
well as the strategies to gain empl oyee support for the change, yet is more flex ible and less risky than
company-w ide initiatives5 1 Pilot projects also make it easier to select organizational groups that are
most ready for change, thus increasing the change initiative’s l ikelihood of success.

Chapter Fifteen Organizational Change 433
EXHIBIT 15.3 Strat egies f or Diffusing Change from a Pilot Project
……….
\Videly communicate and celebrate the pilot proj ect’s success.
Reward and recognize pilot proj ect employees as weH a’i those ·who work a t tr.tnsferring that change to other parL~ of the
organization.
Ensure that managers s upport and reinforce the desired behaviours related to the pilot proj ect’s success.
Identify and add ress potential sources of resistance to change.
AlllhJ
Give employees the opportunity to inter.tct wi th and Jearn from those in the pilot project.
Rea’isign o r tempo rarily second some pilo t proj ect employees to other work uni ts where they can coach and serve as role
models.
Give employees technical training to implement practices identified in the pilot project.
ltlllel’8up…_
Communicate and teach employees how lhe pilot project practices are relevant for lheir own functional areas.
Ens ure that the pilo t project is described in a way that is neither too specific nor too gener.tl . …………..
Give s taff s ufficient time and resources to learn and implement the pilot project practices in their V.’Or k uni ts.
How does change get diffused from the pilot project to other parts of the organization? Using the
MARS model as a template (see Chapter 2}, Exhibit 15.3 outlines several strategies. First, employees
are more likely to adopt the practices of a pi lot project when they are motivated to do so. 52 T his occurs
when they see that the pilot project is successful and people in the pilot project receive recognition and
rewards for changing their previous work practices. Diffus ion also occurs more successfully when man-
agers support and reinforce the desired behaviours. More general ly, change agents need to mi nimize the
sources of resistance to change that we discussed earlier in this chapter.
Second, employees must have the ability-the required ski lls and knowledge-to adopt the practices
introduced in the pilot project. According to innovation diffusion studies, people adopt ideas more
readily when they have an opportunity to interact w ith and Jearn from others who have already applied
the new practices.53
Third, pilot projects get diffused when employees have clear role perceptions-that is, when they
understand how the practices in a pilot project apply to them even though they are in a completely
diffe rent functional area. For instance, accounting department employees won’t easily recognize how
they can adopt quality improvement practices developed by employees in the production department.
The challenge here is for change agents to provide guidance that is not too specific (not too narrowly
defined around the pilot project environment) because it might not seem relevant to other areas of the
organization. At the same time, the pilot project intervention should not be described too broadly or
abstractly to other employees because this makes the inform ation and role model too vague. Finally,
employees require supportive situational factors, including the resources and time necessary to adopt
the practices demonstrated in the pilot project.
Four Approaches to Organizational Change
S o far, this chapter has examined the dynamics of change that occur every day in organiza-
tions. However, organizational change agents and consultants also apply various structured
approaches to organizational change. This section introduces four of the leading approaches:
action research, appreciative inquiry, large group interventions, and parallel learning structures.

434 Part Four Organizational Processes
ACTION RESEARCH APPROACH
Along with introducing the force field model, Kurt Lewin recommended an action r esearch approach
to the change process. The philosophy of action research is that meaningful change is a combination
of action orientation (changing ani tudes and behaviour) and research orientation (testing theory).54 On
one hand, the change process needs to be action-oriented because the ultimate goal is to change the
workplace. An action orientation involves diagnosing current problems and applying interventions that
resolve those problems. On the other hand, the change process is a research study because change
agents apply a conceptual framework (such as team dynamics or organizational culture) to a real situ-
ation. As with any good research, the change process involves collecting data to diagnose problems
more effectively and to systematical ly evaluate how well the theory works in practice. 55
Within this dual framework of action and research, the action research approach adopts an open-
systems view. It recognizes that organizations have many interdependent parts, so change agents need
to anticipate both the intended and the unintended consequences of their interventions. Action research
is also a highly participative process because open-systems change requires both the knowledge and
the commitment of members withi n that system. Indeed, employees are essentially co-researchers as
well as participants in the intervention. Overall, action research is a data-based, problem-oriented
process that diagnoses the need for change, introduces the intervention, and then evaluates and sta-
bilizes the desired changes. The main phases of action research are illustrated in Exhibit 15.4 and
described here:56
I. Form client-consultant relationship. Action research usually assumes that the change agent origi-
nates outside the system (such as a consultant), so the process begins by forming the client-consultant
relationship. Consultants need to determine the client’s readiness for change, including whether
people are motivated to participate in the process, are open to meaningful change, and possess the
abilities to complete the process.
2. Diagnose the need for change. Action research is a problem-oriented activity that carefully diag-
noses the problem to determine the appropriate direction for the change effort. Organizational
diagnosis relies on systematic analysis of the situation. It involves gathering and analyzing data
about an ongoing system, including interviews and surveys of employees and other stakeholders.
Organizational diagnosis also involves employees so they improve, understand, and support the
appropriate change method, the schedule for the actions involved, and the expected standards of
successful change.
3. Introduce intervention. This stage in the action research model applies one or more actions to cor-
rect the problem. It may include any of the prescriptions mentioned in this book, such as building
more effective teams, managing confl ict, building a better organizational structure, or changing
the corporate culture. An important issue is how quickly the changes should occur.s7 Some experts
recommend incremental change, in which the organization fine-tunes the system and takes smal l
steps toward a desired state. Others claim that rapid change is often required, in which the system is
overhauled decisively and quickly.
EXHIBIT 15.4 The Action Research Process

Chapter Fifteen Organizational Change 4 35
4. Evaluate and stabilize change. Action research recommends evaluating the effectiveness of the
intervention against the standards establ ished in the diagnostic stage. Unfortunately, even when
these standards are clearly stated, the effectiveness of an intervention might not be apparent for sev-
eral years or might be difficult to separate from other factors. If the activity has the desired effect,
the change agent and participants need to stabilize the new conditions. This refers to the refreezing
process that was described earl ier. Rewards, information systems, team norms, and other conditions
are redesigned so they support the new values and behaviours.
Debating Point:
WHAT’S THE BEST SPEED FOR ORGANIZATIONAL CHANGE?
One of the great debates among organizational change experts is how quickly the change
should occur. One view is that slow, incremental change is better because it gives employees
more time to adjust to the new realities, to keep up with what needs to be learned, and to
manage their stress in this process. Incremental change is also preferred because it gives
leaders more time to change course if the current direction isn’t working as hoped .
Ergon Energy discovered the importance of incremental change. Government legislation
required companies to upgrade their record-keeping system, but the Australian energy provider
decided to make the changes incrementally because employees had already experienced con-
stant change over the previous couple of years. “Even resilient staff such as those employed at
Ergon Energy have a change tolerance level,” explains Peta Sweeney, a consultant who worked
with Ergon staff during this transition. “Consequently this led deliberately to discounting a revo-
lutionary ‘big bang’ approach to record-keeping improvements.” Sweeney reports that chang-
ing incrementally significantly improved employee engagement in the process. “Staff are more
willing to participate in the change journey as well as offering suggestions for improvements.
They do so knowing that changes will take place gradually and allow for time to fully bed down
new practices and that effective enterprise-wide changes require their help.·SS
In spite of these apparent virtues of incremental change, some experts claim that rapid
change is usually a much better choice. They do not claim that change needs to be radical or
evenly rapid all of the time. Rather, they suggest that most change initiatives need to be, on
average, much quicker than incremental. One argument is that companies operate in such a
fast-paced environment that any speed less than “rapid” is risky; an incremental change in i-
tiative risks putting organizations further behind its competitors to the point that any change
seems futile.
A second argument is that rapid change creates a collective sense of momentum, whereas
inertia eventually catches up with incremental change. 59 In other words, employees feel the
sense of progress when change occurs quickly. This forward movement generates its own
energy that helps motivate employees toward the future objectives. Incremental change, by
comparison , is sluggish and lethargic. A related argument is that any organizational change
requires plenty of energy, particularly from the leaders who must continually communicate,
role model, coach, and otherwise support and influence employees toward the new state of
affairs.60 This energy is fin ite, and it is more likely to run out when the change is spread over
a long rather than a short period of time.
Third, incremental change doesn’t necessarily give employees more time to adjust;
instead, it typically gives them more time to d ig in their heels! Rapid change, on the other
hand, happens at such speed that employees don’t have the opportunity to find ways to hold
back, retrench, or even think about strategies to oppose the change effort. Finally, though
proponents of incremental change point to its benefits for minimizing stress, there is reason
to believe that it often has the opposite effect. Changing slowly can feel like a slow train
wreck-the more you see it coming, the more painful it feels. Quicker change, particularly
when there are support systems to help employees through the process, may be less painful
than incremental change.

43 6 Part Four Organizational Processes
The action research approach has dominated organizational change thinking since it was introduced in
the 1940s. However, some experts are concerned that the problem-oriented nature of action research-
in which something is wrong that must be fixed-focuses on the negative dynamics of the group or
system rather than its positive opportunities and potential. This concern with action research has Jed to
the development of a more positive approach to organizational change, called appreciative inquiry. 61
APPRECIATIVE INQUIRY APPROACH
App reciative inquiry tries to break out of the problem-solving mind~et of traditional change management
practices by reframing relationships around the positive and the possible. It searches for organizational
(or team) strengths and capabilities and then applies that knowledge for further success and well-being.
Appreciative inquiry is therefore deeply grounded in the emerging philosophy of positive organizational
behaviour, which suggests that focus ing on an individual’s positive qualities and traits rather than on what
is wrong w ith the person will improve organizational success and personal well-being. In other words,
this approach empha~izes building on strengths rather than trying to directly correct problems.62
Appreciative inquiry typically examines successful events, organizations, and work units. This
focus becomes a form of behavioural modell ing, but it also increases open dialogue by redirecting the
group’s attention away from its own problems. Appreciative inquiry is especially useful when partici-
pants are aware of their problems or already suffer from negativity in their relationships. The positive
orientation of appreciative inquiry enables groups to overcome these negative tensions and build a
more hopeful perspective of their future by focus ing on what is possible.63
Appreciative inquiry ‘s positive focus is illustrated by the intervention conducted a few years ago
at Heidelberg USA. The American arm of the world’s largest printing press manufacturer (Heidel-
berger Druckmaschinen AG) had experienced morale-busting product setbacks as well as downsiz-
ing due to the economic recession. To rebu ild employee morale and engagement, Heidelberg held a
two-day appreciative inquiry summit involving one-third of its staff. Organized into diverse groups
from across the organization, participants envisioned what Heidelberg would ideally look like in the
future. From these sessions emerged a new vision and greater autonomy for employees to serve cus-
tomers. “Appreciative inquiry can energize an organization even in tough ti mes because it begins the
conversation with possibilities instead of problems,” says a senior executive at Heidelberg USA.64
Appreciative Inquiry Principles Appreciative inquiry embraces five principles (see Exhibit 15.5).65
One of these is the positive principle, which we describe above. A second principle, called the constmc-
tionist principle, takes the position that conversations don’ t describe reality; they shape that reality. The
understanding we form of an event, group, or situation depends on the questions we ask and the language
we use. Therefore, appreciative inquiry uses words and language carefully because it is sensitive to the
thoughts and feelings behind that communication. This relates to a third principle, called the simultaneity
EXHIBIT 15.5 Five Princi ples of Ap preciative In quiry
Appn•””‘..e….,……., Delalp ….
Positive principle FoctL~ing on positive evenL~ and potential produces more positive. effective, and
enduring change.
Constructionist principle How we perceive and understand the change process depends on the questions we
a…,;k and language we use throughout that process.
Simultaneity principle Inquiry and change are simultaneous, not sequential.
Poetic principle Organizations are open books. so we have choices in how they may be perceived,
framed, and de.,cribed.
Anticipalory principle People are motivated and guided by the vis ion they see and believe in for lhe future .
Source: Based on D. L. Cooperrider and D. K. Whii.Jley. Appreciative lnquiry: A Pos:iLive Revolution in Change. (San Frunci..:;oo: Berrett-Koehler. 2005).
Chap. 7: D. K.Whitney and A. Trosten-Bloom. The power of appreciative inq uiry: A prnctical g.u lde to pOSiLi\’e change. 2nd ed. (San Frnncisco:
Berrett-Koehler Publishers. 201 0). Chap. 3.

Chapter Fifteen Organizational Cha nge 4 3 7
principle, which states that inquiry and change are simultaneous, not sequential. The moment we ask
questions of others, we are changing those people. Furthermore, the questions we a~k determine the info r-
mation we receive, which in ntrn affects which change intervention we choose. The key learning point
from this principle is to be mindful of effects that the inquiry has on the direction of the change process.
A four th principle, cal led the poetic principle, states that organizations are open books, so we have
choices in how they may be perceived, framed, and described. The poetic principle is re fl ected in the
notion that a glass of water can be viewed as half full or half empty. Therefore, appreciative inquiry
actively frames reality in a way that provides constructive value for future development. The antici-
patory principle, the fifth principle of appreciative inquiry, emphasizes the importance of a positive
collective vision of the future state. People are motivated and guided by the vision they see and believe
in. Images that are mundane or disempowering will affect current e ffort and behaviour differently than
will images that are inspiring and engaging . We noted the importance of visions earlier in this chapter
(change agents) and in our discussion of transformati onal leadership (Chapter 12) .
The Four- 0 Model of Appreciative Inquiry These fi ve principles Jay the foundation for appreciative
inquiry’s “Four-D” process. The model’s name refers to it~ four stages, shown in Exhibit 15.6. Appreciative
inquiry begins w ith discovery- identify ing the positive elements of the observed events or organiza-
tion.66 This might involve documenting positive customer experiences elsewhere in the organization. Or
it might include interviewing members of another organization to discover it~ fundam ental strengths.
Toronto Western Hospital (TWH) held an appreciative inqui ry (AI) retreat at w hich staff discussed
the hospital’s past successes and crafted a vision for its future. TWH’s executive team felt the A I
p hilosophy should gu ide daily leade rship be haviour, so they developed and taught a positive
leadership program, which has since been comp leted by more than 150 leaders at the hospital.
Kathy Sabo, executive lead at TWH w hen the positive leadership program was launche d, says
the training teaches hospital leaders to “embed [AI) in our da ily work differently than we do now-
not just focused on a particular in itiative b ut how do we enact it daily.” The program has improved
TWH’s balanced scorecard results, patient satisfaction, and staff engagement. “We’ve seen really
positive outcomes in how people app ly the [A I) theory, how they behave as leaders, how that has
impacted the ir staff,” observes Sabo, who has recently retired.67
© Shutterstock/Monkey Business Images

438 Part Four Organizational Processes
EXHIBIT 15.6 The Four-D Model of Appreciative Inqu iry
1. Discovery
Identify the
best of “what is” –
2. Dreaming
Envisioning
“what might be”
3. Designing
Engaging in
dialogue about
“what should be”
4. Delivering
Developing
objectives about
“what will be”
Sources: Ba..:;ed on F.l Barrett and D. L. Cooperrider. “Generati\•e Metaphor lnter\•entio n: A New Approach for Working with Systems Divided
by Conflict and Otught in Defensive Perception.” Journal o f Applied Behavioural Sc-ience 26 (1990). p. 229: D. Whitney and C. Schau. “Appre-
ciative Inq uiry: An Innovative Process for Organization Change.” EmpiO)•ment Relations Today 25 (Spring 1998). pp. 11-21: D. L. Cooperrider
and D. K.\Vhitney. Appreciative inq uiry: A positi ve revolution in change. (San r … aneisoo: Berrett-Koehler. 2005). Chap. 3.
As participants discuss their findings, they shift into the dreaming stage by envisioning what might be
possible in an ideal organization. By pointing out a hypothetical ideal organization or situation, partici-
pants feel safer revealing their hopes and aspirations than they would if they were discussing their own
organization or predicament.
As participants make their private thoughts public to the group, the process shifts into the third
stage, called designing. Designing involves dialogue in which participants listen w ith selfless recep-
tivity to each other’s models and a~sumptions and eventually form collective views within the team.
In effect, they create a common mental model of what should be. As this model takes shape, group
members shift the focus back to their own s ituation. In the final stage of appreciative inquiry, called
delivering (also known a~ destiny), participants establish specific objectives and direction for their own
organization on the basis of their model of what wi ll be.
Appreciative inquiry was introduced almost three decades ago, but it real ly gained popularity only
within the past few years. Appreciative inquiry success stories of organizational change have been
reported in a variety of companies, including Canadian Tire, Toronto Western Hospital, Heidelberg
USA, the British Broadcasting Corporation, and Hunter Dougla~68
Appreciative inquiry has much to offer, but it is not always the best approach to changing teams
or organizations and, indeed, has not always been successful. This approach depends on participants’
ability to let go of the problem-oriented approach, including the “blame game” of determining who
may have been responsible for past failures. It also requires leaders who are w ill ing to accept appre-
ciative inquiry’s less structured process.69 Another concern is that research has not yet examined the
contingencies of this approach.70 In other words, we don’t yet know under what conditions appreciative
inquiry is a useful approach to organizational change and under what conditions it is less effective.
Overall, appreciative inquiry can be an effective approach to organizational change, but we are still
discovering its potential and limitations.
LARGE GROUP INTERVENTIO N APPROACH
Appreciative inquiry can occur in smal l teams, but it is often designed to involve a large number of
people, such as the hundreds of employees who participated in the process at Heidelberg USA and
Toronto Western Hospital. As such, appreciative inquiry is often identif ied as one of several large group
organizational change interventions. Large group interventions adopt a “whole systems” perspective
of the change process71 This means that they view organizations as open systems (see Chapter I) and
assume that change will be more successful when many employees and other stakeholders are included
in the process.72 Large group interventions are high-involvement events because participants discuss
their experiences, expectations, and ideas with others, typically in small groups within the large collec-
tive setting.

Chapter Fifteen Organizational Change 4 39
Similar to appreciative inquiry, large group interventions adopt a future-oriented positive focus
rather than a past-oriented problem focus. Future search conferences, for instance, are large group
interventions typically held over a few days in which participants identify emerging trends and develop
strategies for the organization to real ize potential under those fu ture conditions. In addition to this
strategy development, large group interventions generate a collective vision or sense-making about the
organization and its future. This ” meaning-making” process is important for the organization’s evolv-
ing identity and how participants relate to that identity.
Large group interventions have occurred in a variety of companies and industries. Emerson & Cuming’s
chemical manufacturing fac ility in Canton, Massachusetts held a large group summit in which man-
agers, supervisors, and production employees were organized into five stakeholder teams to iden-
tify initiatives that would improve the plant’s safety, efficiency, and cooperation. Several Canadian
school boards have conducted funtre search conferences, including the Ottawa-Carleton School Board,
Toronto District School Board, and Lester B. Pearson School Board. The Canadian Nature Federation
also held a fu ture search event to assist their change process73
Future search meetings and similar large group change events potentially minimize resistance to
change and assist the quality of the change process, but they also have limitations74 One problem is
that involving so many people invariably limits the opportunity to contribute and increases the risk that
a few people will dominate the process. Another concern is that these events focus on finding common
ground, and this may prevent the participants from discovering substantive differences that interfere
with future progress. A third issue is that these events generate high expectations about an ideal future
state that are difficult to satisfy in practice. Employees become even more cynical and resistant to
change if they do not see meaningful decisions and actions resulting from these meetings.
PARALLEL LEARN ING STRUCTURE APPROACH
Parallel learning structures are highly participative arrangements composed of people from most
levels of the organization who follow the action research model to produce meaningful organizational
change. They are social structures developed alongside the formal hierarchy with the purpose of increas-
ing the organization’s learning.75 Ideally, participants in parallel learning structures are sufficiently free
from the constraints of the larger organization that they can effectively solve organizational issues.
Royal Dutch/Shell relied on a parallel learning structure to introduce a more customer-focused
organization.76 Rather than try to change the entire organ ization at once, executives held week-long
“retail boot camps” with teams from six countries, consisting of front line people (such as gas sta-
tion managers, truck drivers, and marketing professionals). Participants learned about competitive
trends in their regions and were taught powerfu l marketing tools to identify new opportunities.
The teams then returned home to study their markets and develop proposals for improvement. Four
months later, boot camp teams returned for a second workshop, at which each proposal was cri-
tiqued by Royal Dutch/Shell executives. Each team had 60 days to put its ideas into action; then the
teams returned for a third workshop to analyze what worked and what didn’ t. This paralle l learn ing
process did much more than introduce new marketi ng ideas. It created enthusiasm in participants
that spread contagiously to their co-workers, including managers above them, when they returned
to their home countries.
Cross-Cultura l and Eth ical Issues in
Organizational Change
Throughout this chapter, we have emphasized that change is an inevitable and often con-
tinuous aspect of organizational life because organizations need to remain al igned w ith
the dynamic external environment. Yet we also need to be aware of cross-cultural and
ethical issues with any change process. Many organizational change practices are built around Western

440
Andrew Carnegie
Part Four Organizational Processes
cultural assumptions and values, which may differ from and sometimes confl ict w ith a~sumptions and
values in other cultures.77 One possible cross-cultural limitation is that Western organizational change
models, such as Lewin’s force field analysis, often assume that change ha~ a beginning and an end-
ing in a logical linear sequence (that is, a straight line from point A to point B). Yet change is viewed
more as a cycl ical phenomenon in some cultures, such as the earth’s revolution around the sun. Other
cultures have more of an interconnected view of change, whereby one change leads to another (often
unplanned) change, which leads to another change, and so on until the change objective is ultimately
achieved in a more circuitous way.
Another cross-cultural issue with some organizational change interventions is the assumption that
effective organizational change is necessarily punctuated by tension and overt conflict. Indeed, some
change interventions encourage such confl ict. But this direct confrontation view is incompatible w ith
cultures that emphasize harmony and equilibrium. These cross-culntral differences suggest that a more
contingency-oriented perspective is required for organizational change to work effectively in this era of
globalization.
Some organizational change practices also face ethical issues.78 One ethical concern is the risk of
violating individual privacy rights. The action research model is bui lt on the idea of collecting infor-
mation from organizational members, yet this requires that employees provide personal information
and reveal emotions they may not want to divulge.79 A second ethical issue is that some change activi-
ties potentially increa~e management’s power by inducing compliance and conformity in organizational
members. For instance, action research is a system-wide activity that requires employee participation
rather than allowing individuals to get involved voluntarily. A third risk is that some organizational
change interventions undermine the individual’s self-esteem. The unfreezing process requires that par-
ticipants disconfirm their existing beliefs, sometimes including their own competence at certain ta~ks
or interpersonal relations.
Organizational change is usually more difficult than it initially seems. Yet the dilemma is that most
organizations operate in hyperfast environments that demand continuous and rapid adaptation. Organi-
zations survive and gain competitive advantage by mastering the complex dynamics of moving people
through the continuous process of change a~ quickly as the external environment is changing.
O rgan izational Behaviour:
The Journey Continues
Nearly 100 years ago, industrialist Andrew Carnegie said, “Take away
my people, but leave my factories, and soon gra~s w ill grow on the
factory floors. Take away my factories, but leave my people, and soon
we w ill have a new and better factory.”80 Carnegie’s statement reflects
the message woven throughout this textbook: Organizations are not
buildings or machinery or financial assets; rather, they are the people in
them. Organizations are human entities-full of life, sometimes fragile,
and always exciting.
© Everell Historicai/ Shullerstock

Chapter Fifteen Organizational Change 4 4 1
Chapter Summary
L01 Describe the elemen ts of Lewin’s force field analysis model.
Lewin’s force field analysis model states that all systems have driving and restraining forces.
Change occurs through the process of unfreezing, changing, and refreezing. Unfreezing produces
disequilibrium between the driving and restraining forces. Refreezing realigns the organization’s
systems and structures with the desired behaviours.
L02 Discuss the reasons why people resist organization al change and h ow change agents should
view this resistance.
Restraining forces are manifested as employee resistance to change. The main rea~ons why people
resist change are the negative valence of change, fear of the unknown, not-invented-here syn-
drome, breaking routines, incongruent team dynan1ics, and incongruent organizational systems. Resistance to
change should be viewed as a resource, not an inherent obstacle to change. C hange agents need to view resistance
as task conflict rather than relationship conflict. Resistance is a signal that the change agent has not s ufficiently
strengthened employee readiness for change. It is also seen as a form of voice, so discussion resulting from resis-
tance potentially improves procedural justice.
L03 Outline six st rategies for minimizing resista n ce to ch ange, an d deba te ways to ef fectively
create a n urgency for change.
Organizational change requires e mployees to have an urgency for change. This typically occurs by
informing them about driving forces in the external environment. Urgency for change also devel-
ops by putting employees in direct contact with customers. Leaders often need to create an urgency for change
before the external pressures are felt, and this can occur through a vision of a more appealing future.
Resistance to change may be minimized by keeping employees infor med about what to expect from the change
effort (communicating); teaching employees valuable ski lls for the desired fut ure (learning); involving them in the
change process; helping employees cope with the stress of change; negotiating trade-off.~ with those who will
clearly lose from the change effort; and us ing coercion (sparingly and as a last resort).
L04 Discuss how leadership, coalitions, social networks, and pilot p rojects assist organizational change_
Every successful change requires transformational leaders with a clear, well-articu lated vision
of the desired future state. These change agents need the assistance of several people (a gu id-
ing coal ition) who are located throughout the organization. Change also occurs more informally
through social networks. Viral change operates through social networks using influencers.
Many organizational change initiatives begin with a pilot project. The success of the pilot project is then dif-
fused to other parts of the organization. This occurs by applying the MARS model, including motivating employ-
ees to adopt the pilot project’s methods, training people to know how to adopt these practices, helping to clarify
how the pi lot can be applied to different areas, and providing time and resources to support this diffusion.
LOS Descr ibe and comp are action research, ap preciative inquiry, large group in terventions, and
p arallel learning structures as formal ap proaches to organizational change.
Action research is a highly participative, open-systems approach to change management that com-
bines an action-orientation (changing attitudes and behaviour) with research orientation (testing
theory). It is a data-based, problem-oriented process that diagnoses the need for change, introduces the interven-
tion, and then evaluates and stabil izes the desired changes.
Appreciative inquiry embraces the positive organizational behaviour philosophy by focusing participants on the
positive and possible. In addition, appreciative inquiry applies the constructionist, simultaneity, poetic, and antici-
patory principles. The four stages of appreciative inquiry include discovery, dreaming, design ing, and delivering.
Large group interventions are highly participative events that view organizations as open systems (i .e., involve
as many employees and other stakeholders as possible), and adopt a future and positive focu s of change. Parallel
learning structures rely on social structures developed alongside the formal hierarchy with the purpose of increas-
ing the organization’s learning. They are highly participative arrangements, comprised of people from most levels
of the organization who follow the action research model to produce meaningful organizational change.
L06 Discuss two cross-cultural an d three ethical issues in organizational change.
One significant concern is that organ izational change theories developed with a Western cultural
orientation potentially conflict with cultural values in some other countries. Also, organizational
change practices can raise one or more ethical concerns, including increasing management’s
power over employees, threatening individual privacy right~. and undermining individual sel f-esteem.

4 4 2 Part Four Organizational Processes
Key Terms
action research
a pp reciative inq uiry
force fi eld analysis
p arallel learning s tructures
refreezing
unfreezing
Critical Thinking Questions
I. C hances are that the school you are attending is cur rently undergoing some sort of change to adapt more
closely w ith its environment. Discuss the external forces that are driving the change. What internal drivers fo r
change also exist?
2. Use Lewin’s force field analysis to describe the dynamics of organi zational change at Blueshore Financial,
the s ubject of the opening ca~e study for this chapter. The vignette provides some information, but think about
other forces for and against change beyond the information provided here.
3. Employee resistance is a symptom, not a problem, in the change process. What are some of the real problems
that may cause e mployee resistance?
4. Senior management of a large multinational corporation is planning to restructure the organi zation. C urrently,
the organization is decentralized around geographic area~ so that the executive responsible for each area has
considerable autonomy over manufacturing and sales. T he new structure will transfer power to the executives
responsible fo r different product groups; the executives responsible fo r each geographic area will no longer be
responsible fo r manufac turing in their area but will retain control over sales activities. Describe two types of
resistance senior management might encounter from this organi zational change.
5. Discuss the role of reward systems in organizational change. Specifically, identify where reward systems
re late to Lewin’s force fie ld model and where they undermine the organizational change process.
6. Web Circuits is a Malaysian-ba~ed custom manufacturer for high-technology companies. Senior management
wants to introduce lean management practices to reduce production cost~ and remain competitive. A consultant
ha~ recommended that the company start with a pilot project in one department and, when successful, diffuse
these practices to other areas of the organization. Discuss the advantages of this recommendation, and identify
three ways (other than the pilot project’s success) to make diffusion of the change effort more s uccessful.
7. What is the role o f for mal and informal networks in organ izations interested in undergoing change?
8. S uppose that you are vice-president of branch services at the Kelowna Credit Union. You notice that several
branches have consistently low customer service ratings even though there are no apparent differences in
resources or staff characteristics. Describe an appreciative inquiry process in one of these branches that might
help to overcome this problem.
Case Study:
TRANSACT INSURANCE
CORPORATION
by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canad a) an d
Terrance J. Bogyo
TransAct Insurance Corporation (T IC) provides automobile insurance in parts of Canada that allow private insur-
ers. Last year, a new CEO was hired by T IC’s board of di rectors to improve the company’s competitiveness and
customer service. A fter spending several months assessing the situation, the new CEO introduced a strategic plan
to improve TIC’s competitive position. He also replaced three vice-presidents. Jim Leon wa~ hired a~ vice-president
of Claims, TIC’s largest division w ith I ,500 employees, 50 claims centre managers, and 5 regional directors.
Jim immediately met with all claims managers and directors, and vis ited employees at TIC’s 50 claims centres.
As an outsider, this was a formidable task, but his strong interpersonal skills and uncanny ability to remember
nan1es and ideas helped him through the process. T hrough these visit~ and discussions, Jim discovered that the

Chapter Fifteen Organizational Change 4 4 3
claims divis ion had been managed in a relatively authoritarian, top-down manner. He could also see that morale
was very low and employee-management relations were guarded . High workloads and isolation (adjusters work-
ing in tiny cubicles) were two other commo n complaints. Several managers acknowledged that the high tumover
among claims adjusters was partly d ue to these conditions.
Following discussions with TIC’s CEO, Jim decided to make morale and supervisory leadership his top prior-
ity. He initiated a divisional newsletter with a tear-off feedback form for employees to register their comments. He
announced an o pen-door policy in which any Claims Division employee could speak to him directly and confiden-
tial ly without going first to the inm1ediate supervisor. Jim also fought organizatio nal barriers to initiate a flex -time
program so that e mployees could design work schedules around their needs. This program later becan1e a model for
o ther area~ of T IC.
One of J im ‘s most prono unced symbols of change was the “Claims Management Credo” o utlining the philoso-
phy that every claims manager would follow. At his fi rst meeting w ith the complete claims management teanl, Jim
presented a l ist of what he thought were important phi losophies and actions of effective managers. T he manage-
ment group was a~ked to select and prioritize items from this list. T hey were to ld that the resulting list would be
the divis ion’s management philosophy and all managers would be held accountable for abiding by it~ principles.
Most claims managers were uneasy about this process, but they also understood that the organization was under
competitive pressure and that Jim was using this exercise to demonstrate his leadership.
The claims managers developed a list of I 0 items, such as encouraging teamwork, fostering a trusting work
environment, setting clear and rea~onable goals, and so on. T he list wa~ circulated to senior management in the
organ ization fo r their comment and approval, and sent back to all claims managers for their endorsement. Once
this was done, a copy of the final document wa~ sent to every claims di vision e mployee. Jim also announced plans
to follow up w ith an annual survey to evaluate each claims manager’s performance. T his concerned the managers,
but most of them believed that the credo exercise was a result of Jim ‘s ini tial enthusiasm and that he would be too
busy to introduce a survey after settling into the job.
One year after the credo had been distributed, Jim anno unced that the firs t annual sur vey would be cond ucted .
All claims employees would complete the survey and return it conf identially to the human resources depart ment
where the s urvey results would be compiled for each claims centre manager. The survey asked the extent to which
the manager had Jived up to each of the 10 items in the credo. Each form also provided space for comments.
Claims centre managers were surprised that a survey would be conducted, but they were even more worried
about Jim’s state ment that the results would be shared with employees. What ” results” would employees see? Who
would distribute these results? What happens if a manager get~ poor ratings fro m his o r her subordinates? “We’ll
work out the detai ls later,” said J im in response to these questions. “Even if the survey results aren’t great, the
information will give us a good baseline for next year’s survey.”
The claims division s urvey had a high response rate. In some centres, every employee completed and returned
a form . Each report showed the claim centre manager’s average score for each of the 10 items as well a~ how many
e mployees rated the manager at each level of the five-point scale. T he reports also included every comment made
by employees at that centre.
No o ne wa~ prepared for the results of the first survey. Most managers received moderate or poor ratings on
the 10 items. Very few managers averaged above 3.0 (on a 5-point scale) on more than a couple of items. T his
suggested that, at best, e mployees were ambivalent about whether their claims centre manager had abided by the
I 0 management philosophy items. T he comments were even more devastating than the ratings. Comments ranged
from mi ldly disappointed to extremely critical o f their claims manager. Employees also described their long-
standing frustration with TIC, high workloads, and isolated working conditions. Several people bluntly stated that
they were skeptical about the changes that Ji m had promised . “We’ve heard the promises before, but now we’ve
lost faith,” wrote one claims adjuster.
The sur vey result~ were sent to each claims manager, the regional di rector, and e mployees at the claims centre.
Jim instructed managers to discuss the s urvey data and comments w ith their regional manager and directly with
e mployees. T he claims centre managers were shocked to Jearn that the reports included indi vidual comments.
They had assumed the reports would exclude comments and only show averaged scores for all employees at the
centre. Some managers went to their regional director, complaining that revealing the personal comment~ would
ruin their careers. Many directors sympathi zed, but the results were already avai lable to e mployees.
When Jim heard about these concems, he agreed that the results were lower than expected and that the conm1ent~
should not have been shown to employees. After discussing the situation with his directors, he decided that d1e discussion
meetings between claims managers and their employees should proceed as planned. To delay or withdraw d1e report~
would undermine the credibility and trust that Jim was trying to develop with employees. However, the regional director
attended the meeting in each claims centre to minimize direct conflict bel\veen the claims centre manager and employees.
Altho ugh many of these meetings went s moothly, a few created harsh feelings between managers and their
e mployees. So urces of some comments were easi ly identi fied by their content, and this created a few delicate
moment~ in several sessions. A few mo nths after these meetings, two claims centre managers q uit and three oth-
ers asked for transfers back to nonmanagement positions in TIC. Meanwhile, Jim wondered how to manage this
process more effectively, particularly since e mployees expected another survey the following year.

444 Part Four Organizational Processes
Disc uss ion Qu estions
I. What symptom(s) exist in this case to suggest that something has gone wrong?
2. What are the main causes of these symptoms?
3. What actions should the company take to correct these problems?
@2000. Steven L. McShane and Terrance J. Bogyo. This case is based on actual events in a Canadian organization. but names,
industry. and some characte ristics have been changed to maintain anonymity.
Team Exercise:
STRATEGIC CHANGE INCIDENTS
Purpose This exercise is designed to help you identify strategies for facilitating organizational change in
various s ituations.
Instructions
I. The instructor will place students into tean1s, and each tean1 will be assigned one or both of the scenarios
presented below.
2. Each tean1 will diagnose the scenario to determine the most appropriate set o f change management practices.
Where appropriate, these practices s hould (a) create an urgency to change, (b) minimize resistance to change,
and (c) refreeze the s ituation to support the change initiative. Each of these scenarios is based on real events.
3. Each tean1 will present and defend it~ change management strategy. Class discussion regarding the
appropr iateness and fea~ibility of each strategy w ill occur after all teams assigned the same scenario have
presented. The instructor will then describe what the organi zations actually did in these s ituations.
Scen ario 1: Greener Telco The chief executive officer of a large telephone company want~ it~ executives
to make the organization more environmentally friendly by encouraging e mployees to reduce wa~te in the
workplace. Government and other stakeholders expect the company to take this action and be publicly
successful. Consequently, the CEO wants to significantly reduce paper usage, garbage, and other waste
throughout the company’s many w idespread offices. Unfortunately, a survey indicates that e mployees do not
value environmental objectives and do not know how to “reduce, reuse, recycle.” As the executive responsible
fo r this change, you have been asked to develop a strategy that might br ing about meaningful behavioural change
toward this environmental goal. What would you do?
Scenario 2: Go Forward Airline A major airline had experienced a decade of rough turbulence, including two
bouts of bankruptcy protection, I 0 managing directors, and morale so low that employees had removed the company’s
logo fro m d1eir uniforms because they were embarra~sed to let others know where they worked. Service was terrible,
and the airplanes rarely arrived or left the termi nal on time . This wa~ costing the airline significant an1ount~ of money
in pa~senger layovers. Managers were paralyzed by anxiety; most didn’t know how to set strategic goals that actually
succeeded. One-fi fth of all flight~ were losing money, and the company overall was near financial collapse Gust
three months from defaulting on payroll obligations). You and the recently hired CEO must get employees to quickly
improve operational efficiency and customer service. What actions would you take to bring about these changes?
Self-Assessments for Chapter 15
SELF-ASSESSMENT NAME
Are you ready fo r change?
Are you tolerant of change?
I
DESCRIPTION
People seldom accept change quickly or easily. They have good reasons for opposing
change or don’t understand the urgency for change. particularly where it requires them
to alte r their own behaviour. This se]f .. assessment identifies conditions that are holding
back your readiness for a specific change initiative.
Some people eagerly seek out novelty and new experiences. Othe rs are keen to
maintain the status quo and predictability. No matter how much communication.
involveme nt and other change management s trategies are applied. people in the
latter category continue to resist because they have Jiule toler.mce of change. This
self-assessment estimates your natur.tl tendency to tolerate change. I

Additional Cases
Case 1 A M IR KISS?
Case 2 ARCTIC M INING CONSULTANTS
Case 3 BRIDGING THE TWO WORLDS: THE ORGANIZATIONAL DILEMMA
Case 4 GOING TO TH E X-STREAM
Case 5 KEEPING SUZANNE CHALM ERS
Case 6 NORTHWEST CANADIAN FOREST PRODUCTS LIMITED (REVISED)
Case 7 THE REGENCY GRAND HOTEL
Case 8 SIMMONS LABORATORIES
Case 9 TAMARACK INDUSTRIES
Case 10 THE OUTSTANDING FACULTY AWARD
Case 1 1 VETEM EN TS LTEE
Case 1 A MI R KISS?
by Steven L. McShane, C urti n U n iversity (Australia) a nd
U niversity of Vict o ria (Ca nada)
A team of psychologists at Moscow’s Institute for Biomedical Problems (IBMP) wanted to Jearn more
about the dynamics of long-term isolation in space. This knowledge would be applied to the Interna-
tional Space Station, a joint project of several countries that would send people into space for more
than six months. It would eventually include a trip to Mars taking up to three years.
IBMP set up a replica of the Mir space station in Moscow. They then arranged for three interna-
tional researchers from Japan, Canada, and Austria to spend I 10 days isolated in a chamber the size
of a train car. This chamber joined a smal ler chamber where four Russian cosmonauts had already
completed half of their 240 days of isolation. This was the first time an international crew was involved
in the studies. None of the participants spoke Engl ish as their first language, yet they communicated
throughout their stay in English at varying levels of proficiency.
Judith Lapierre, a French Canadian, was the only female taking part in the experiment. Along with
a PhD in publ ic health and social medicine, Lapierre had studied space sociology at the International
Space University in France, and conducted isolation research in the Antarctic. This was her fourth
trip to Russia, where she had learned the language. The Japanese space program proposed a female
participant along with male colleagues for the mission, but IBMP did not accept the Japanese female
appl icant into the program.
The Japanese and Austrian participants viewed the participation of a woman as a favourable fac tor,
says Lapierre. They also assisted her in making the surroundings more comfortable by rearranging the
furniture, hanging posters on the wall, and covering the kitchen table with a tablecloth. “We adapted
our environment, whereas the Russians just viewed it as something to be endured,” she explains. “We
decorated for Christma~. because I’m the kind of person who likes to host people.”
NEW YEAR’S EVE TURMOI L
Ironically, it wa~ at one of those social events, the New Year’s Eve party, when events took a turn for
the worse. After drinking vodka (allowed by the Russian space agency), two of the Russian cosmo-
nauts got into a fistfigh t that left blood splattered on the chamber walls. At one point, a colleague hid
the knives in the station’s kitchen because of fears that the two Russians were about to stab each other.
CA- 1

CA-2 Additional Cases
The two cosmonauts, who generally did not get along, had to be restrained by other men. Soon after
that brawl, the Russian commander grabbed Lapierre, dragged her out of view of the television moni-
toring cameras, and kissed her aggressively-twice. Lapierre fough t him off, but the message didn’t
register. He tried to kiss her again the next morning.
The next day, the international crew complained to IB MP about the behaviour of the Russian cos-
monauts. T he Russian institute apparently took no action against any of the aggressors. Instead, the
institute’s psychologists repl ied that the incidents were part of the experiment. T hey wanted crew
members to solve their personal problems with mature discussion, without asking for outside help.
“You have to understand that Mir is an autonomous object, far away from anything,” Vadim Gushin,
the IB MP psychologist in charge of project, explained after the experiment had ended in March. “If the
crew can’t solve problems among themselves, they can’t work together.”
Following IBMP’s response, the international crew wrote a scathing Jetter to the Russian institute
and the space agencies involved in the experiment. “We had never expected such events to take place in
a highly controlled scientific experiment where individuals go through a multistep selection process,”
they wrote. “If we had known . . . we would not have joined it as subjects.” The Jetter also complained
about IBMP’s response to their concerns.
Informed of the New Year’s Eve incident, the Japanese space program convened an emergency
meeting on January 2nd to address the issue. Soon after, the Japanese team member quit, apparently
shocked by IBMP’s inaction. He was replaced with a Russian researcher on the international team. Ten
days after the fight-a little over a month after the international team began the mission-the doors
between the Russian and international crew’s chambers were barred at the request of the international
research team. Lapierre later emphasized that this action was taken because of concerns about violence,
not because of the incident involving her.
A STOLEN KISS OR SEXUAL HARASSMENT
By the end of the experiment in March, news of the fistfight between the cosmonauts and the com-
mander’s attempts to kiss Lapierre had reached the public. Russian scientists attempted to play down
the kissing incident by saying that it was one fleeting kiss, a clash of cultures, and a female participant
who was too emotional.
“In the West, some kinds of kissing are regarded as sexual harassment. In our culture it’s nothing,” said
Russian scientist Vadim Gushin in an interview. In another interview, he explained, “The problem of sexual
harassment is given a lot of attention in North America but less in Europe. In Russia it is even Jess of an
issue, not because we are more or Jess moral than the rest of the world; we just have different priorities.”
Judith Lapierre says the kissing incident was tolerable compared to this reaction from the Russian
scientists who conducted the experiment. “They don’t get it at all,” she complains. “They don’t think
anything is wrong. I’m more frustrated than ever. The worst thing is that they don’t realize it was wrong.”
Norbert Kraft, the Austrian scientist on the international team, also disagreed w ith the Russian
interpretation of events. “They’re trying to protect themselves,” he says. “They’re trying to put the fault
on others. But this is not a cultural issue. If a woman doesn’t want to be kissed, it is not acceptable.”
Sourr:es: G. Sinclair Jr .. ”If you Scream in Space. Does Anyone Hear?'”‘ Winnipeg Free Pres…::. May 5. 2000. p. A4: S. MarLin. “Reining in Lhe
Spac.e Cowboys..” Globe& Mail. Apr-il 19. 2000. p. Rl: M. Gray. “A Space Dream SourS.” Maclean’s. April 17.2000. p. 26: E. Niiler. “In Se.areh
of the Perfect AsLrt)flaut.” Boston Globe. April4. 2000. p. FA: J. Tracy. “I 10-Day lsolatjon Ends in Sullen . . . lsolatioo.” Moscow Times. March
30.2000. p. 1: M. Warren. “A Mir Kiss?” Daily Telegraph (london). Mareh 30.2000. p. 22: G. York. “Canadian’s Hara..:;s:ment Complaint
S<<>rned.” Globe & Mail. March 25. 2000. p. A2: S. Nolen . .. Lust in Space:· Globe & Mail. March 24. 2000. p. A3.
Case 2 ARCTIC M INING CONSULTANTS
by Steven L. McShane, Curtin U niversity (Australia) a nd University of V ictoria
(Canada), and Tim Neale
Tom Parker enjoys working outdoors. At various times in the pa~t. he ha~ worked a~ a ranch hand, high
steel rigger, headstone installer, prospector, and geological field technician. Now 43, Parker is a geological
field technician and field coordinator with Arctic Mining Consultants. He has specialized knowledge and

Additional Cases CA-3
experience in all nontechnical a~pect~ of mineral exploration, including claim staking, line cutting and grid
installation, soil sampling, prospecting, and trenching. He is responsible for hiring, training, and supervising
fiel d a~sistants for all of Arctic Mining Consultants’ programs. Field assistants are paid a fairly low daily
wage (no matter how long they work, which may be up to 12 hours) and are provided meals and accom-
modation. Many of the programs are operated by a project manager who reports to Parker.
Parker sometimes acts a~ a project manager, as he did on a job that involved staking I 5 claims near
Eagle Lake, Br itish Columbia. He selected John Talbot, Greg Boyce, and Brian Millar, all of whom
had previously worked with Parker, as the fie ld assistants. To stake a claim, the project team marks
a line w ith fl aggi ng tape and blazes (ribbons, paint, or other trail markers) along the perimeter of the
claim, cutting a claim post every 500 metres (called a ” length”). The I S claims would require almost
100 kilometres of line in total. Parker had budgeted seven days (plus mobi lization and demobi lization)
to complete the job. T his meant that each of the four stakers (Parker, T albot, Boyce, and Millar) would
have to complete more than seven lengths each day. The following is a chronology of the project.
DAY 1
The Arctic Mi ning Consultants’ crew assembled in the morning and drove to Eagle Lake, from where
they were flown by hel icopter to the claim site. On arrival, they set up tents at the edge of the area to
be staked, and agreed on a schedule for cooki ng duties. After supper, they pulled out the maps and
discussed the job-how long it would take, the order in which the areas were to be staked, possible
helicopter landing spots, and area~ that might be more difficult to stake.
Parker pointed out that with only a week to complete the job, everyone would have to average seven
and a half lengths per day. ” I know that is a lot,” he said, “but you’ ve al l staked claims before and I’m
confident that each of you is capable of it. And it’s only for a week. If we get the job done in time,
there’s a $300 bonus fo r each of you.” Two hours later, Parker and his crew members had developed
what seemed to be a workable plan.
DAY2
Millar completed six lengths, Boyce six lengths, Talbot eight, and Parker eight. Parker was not pleased
with Millar’s or Boyce’s production. However, he didn’t make an issue of it, thinking that they would
develop their “rhythm” quickly.
DAY3
Millar completed five and a half lengths, Boyce four, and T albot seven. Parker, who was nearly twice
as old a~ the other three, completed eight lengths. He also had enough time remaini ng to walk over and
check the qual ity of stakes that Millar and Boyce had completed, and then walk back to his own area
for helicopter pickup back to the tent site.
That night Parker exploded with anger. ” I thought I told you that I wanted seven and a half lengths
a day !” he shouted at Boyce and Millar. Boyce said that he was slowed down by unusually thick under-
brush in his assigned area. Millar said that he had done his best and would try to pick up the pace.
Parker did not mention that he had inspected their work. He explained that as far as he was concerned,
the field assistants were supposed to finish their assigned area for the day, no matter what.
Talbot, who was shari ng a tent with Parker, talked to him later. “I think that you’re being a bit hard
on them, you know. I know that it has been more by luck than anything else that I’ve been able to do my
quota. Yesterday I only had five lengths done after the first seven hours and there was only an hour before
I was supposed to be picked up. Then I hit a patch of really open bush, and was able to do three lengths
in 70 minutes. Why don’t I take Millar’s area tomorrow and he can have mine? Maybe that will help.”
“Conditions are the same in all of the areas,” replied Parker, rejecting T albot’s suggestion. ” Millar
just has to try harder.”
DAY4
Millar did seven lengths and Boyce completed six and a half. When they reported their production that
evening, Parker grunted uncommunicatively. Parker and Talbot did eight lengths each.

CA-4 Additional Cases
DAYS
Millar completed six lengths, Boyce six, Talbot seven and a half, and Parker eight. Once again Parker
blew up, but he concentrated his diatribe on Millar. “Why don’t you do what you say you are going to
do? You know that you have to do seven and a half lengths a day. We went over that when we firs t got
here, so why don’ t you do it? If you aren’t wi lling to do the job then you never should have taken it in
the fi rst place! ”
Millar replied by saying that he was doing his best, that he hadn’ t even stopped for lunch, and that
he didn’t know how he could possibly do any better. Parker launched into him again: “You have got to
work harder! If you put enough effort into it, you will get the area done!”
Later Millar commented to Boyce, ” I hate getting dumped on all the time! I’d quit if it didn’ t mean
that I’d have to walk 80 kilometres to the highway. And besides, I need the bonus money. Why doesn’t
he pick on you? You don’t get any more done than me; in fact, you usually get less. Maybe if you did a
bit more he wouldn’t be so bothered about me.”
“I only work as hard as I have to,” Boyce replied.
DAY6
Millar raced through breakfast, wa~ the fi rst one to be dropped off by the helicopter, and arranged to be
the last one picked up. T hat eveni ng the production figures were a~ fo llows: Millar eight and a quarter
lengths, Boyce seven, and Talbot and Parker eight each. Parker remained si le nt when the field assis-
tants reported their performance for the day.
DAY7
Millar was again the first out and last in. T hat night, he collapsed in an exhausted heap at the table, too
tired to eat. After a few moments, he announced in an abject tone, “Six lengths. I worked like a dog al l
day and I only got a lousy six lengths !” Boyce completed five lengths, Talbot seven, and Parker seven
and a quarter.
Parker was furious. “That means we have to do a total of 34 lengths tomorrow if we are to finish this
job on time!” With his eyes directed at Millar, he added: “Why is it that you never finis h the job? Don’t
you real ize that you are part of a team, and that you are letting the rest of the team down? I’ve been
checking your lines and you’ re doing too much blazing and wasting too much time making picture-
perfect claim posts! If you worked smarter, you’d get a lot more done !”
DAYS
Parker cooked breakfa~t in the dark. The helicopter dropoffs began as soon as morning light appeared
on the horizon. Parker instructed each assistant to complete eight lengths and, if they finished early, to
help the others. Parker said that he would finish the other 10 lengths. Helicopter pickups were arranged
for one hour before dark.
By noon, after working as hard as he could, Millar had only completed three lengths. “Why bother,”
he thought to himself, “I’ ll never be able to do another five lengths before the helicopter comes, and
I’ ll catch the same amount of abuse from Parker for doing six lengths as for seven and a half.” So he sat
down and had lunch and a rest. ” Boyce won’t fin ish his eight lengths either, so even if I did finish mine,
I still wouldn’t get the bonus. At least I’ ll get one more day’s pay this way.”
That night, Parker was livid when Millar reported that he had completed five and a half lengths.
Parker had done ten and a quarter lengths, and T albot had completed eight. Boyce proudly announced
that he finished seven and a half lengths, but sheepishly added that Talbot had helped him with some of
it. All that remained were the two and a half lengths that Millar had not completed.
The job was finished the next morning and the crew demobi lized. Millar has never worked for Arctic
Mining Consultants again, despite being offered work several times by Parker. Boyce sometimes does
staking for Arctic, and T albot works full-time with the company.
©Copyright. Steven L. McShane and Tim Neale. This ease is based on actual events.. but names and some characteristics have been ehang.ed to
maintain anony mjty.

Additional Cases CA-5
Case 3 BRIDGING THE TWO WORLDS:
TH E ORGAN IZATIONAL D ILEMMA
by William Todorovic, Indiana-Purdue University, Fort Wayne
I had been hired by Aluminum Elements Corp. (AEC), and it was my firs t day of work. I was 26 years
old, and I was now the manager of AEC’s customer service group, which looked after customers,
logistics, and some of the raw material purchasing. My superior, George, was the vice-president of the
company. AEC manufactured most of its products from aluminum, a maj ority of which were destined
for the construction industry.
As I walked around the shop floor, the employees appeared to be concentrating on their jobs, barely
noticing me. Management held daily meetings, in which various production issues were discussed. No
one from the shop floor wa~ invited to the meeting, unless there was a specific problem. Later I also
learned that management had separate wa~hrooms, separate lunchrooms, as well as other perks that
floor employees did not have. Most of the floor employees fe lt that management, although polite on the
surface, did not really feel they had anything to Jearn from the floor employees.
John, who worked on the aluminum slitter, a crucial operation required before any other operations
could commence, had previously had a number of unpleasant encounters with George. As a result,
George usual ly sent written memos to the fl oor in order to avoid a direct confrontation with John.
Because the directions in the memos were complex, these memos were often more than two pages in
length.
One morning, as I was walking around, I noticed that John wa~ very upset. Feeling that perhaps
there was something I could do, I approached John and asked him if I could he lp. He indicated that
everything was just fine. From the looks of the situation, and John’s body language, I fe lt that he was
wi lling to talk, but John knew that this wa~ not the way things were done at AEC. Tony, who worked
at the machine next to John’s, then cursed and said that George was getting on John’s back again. John
complained that the office guys only cared about schedules, not about the people down on the floor.
I j ust looked at him, and then said that I only began working here last week, and thought that I could
address some of their issues. Tony gave me a strange look, shook his head, and went back to his
machine. I could hear him still swearing a~ I left. Later I real ized that most of the office staff were also
offended by Tony’s language.
On the way back to my office, Lesley, a recently hired engineer from Russia, approached me and
pointed out that the employees were not accustomed to management talking to them. Management only
issued orders and made demands. As we discussed the diffe rent perceptions between office and fl oor
staff, we were interrupted by a very loud lunch bell, which startled me. I was happy to join Lesley for
lunch, but she a~ked me why I was not eating in the office lunch room. I replied that if I wa~ going to
understand how AEC worked, I had to get to know all the people better. In addition, I realized that this
was not how things were done, and wondered about the nature of this apparent division between the
management and the fl oor. In the lunchroom, the other workers were amazed to see me there, com-
menting that I was just new and had not learned the ropes yet.
After lunch, when I asked George, my supervisor, about his recent confrontation w ith John, George
was surprised that John got upset, and exclaimed, ” I just wanted John to know that he did a great job,
and as a result, we w ill be able to ship on time one large order to the West Coast. In fact, I thought I was
complimenting him.”
Earl ier, Lesley had indicated that certain behaviour was expected from management, and therefore
from me. I reasoned that I do not think that this behaviour works, and besides it is not what I believe
or how I care to behave. For the next couple of months, I simply walked around the fl oor and took
every opportunity to talk to the shop fl oor employees. Often, when the employees related specific
information about their workplaces, I fe lt that it went over my head. Frequently, I had to write down the
information and revisit it later. I made a point of listening to them, identifying where they were coming
from, and trying to understand them. I needed to keep my mind open to new idea~. Because the shop
employees expected me to make requests and demands, I made a point of not doing any of that. Soon

CA-6 Additional Cases
enough, the employees became fr iendly, and started to accept me as one of their own, or at least as a
different type of a management person.
During my third month of work, the employees showed me how to improve the schedul ing of jobs,
especial ly those on the aluminum slitter. In fac t, the greatest contribution was made by John who dem-
onstrated better ways to combine the most common slitting sizes, and reduce waste by retaining some
of the “common-sized” material for new orders. Seeing the opportunity, I programmed a spreadsheet to
calculate and track inventory. This, in addition to better planning and forecasting, allowed us to reduce
our new order turnarounds from four to five weeks to in-by-10 a.m. out-by-5 p.m. on the same day.
By the time I had been employed for four months, I real ized that members from other departments
were coming to me and asking me to relay messages to the shop employees. When I asked why they
were delegating this task to me, they stated that I spoke the same language as the shop employees.
Increasingly, I became the messenger for the office-to-floor shop communication.
One morning, George called me into his office and complimented me on the levels of customer
service and the improvements that have been achieved. As we talked, I mentioned that we could not
have done it w ithout John’s help. “He really knows his stuff, and he is good,” I said. I suggested that
we consider him for some type of a promotion. Also, I hoped that this would be a positive gesture that
would improve the communication between the office and shop floor.
George turned and pulled a flyer out of his desk; ” Here is a management skills seminar. Do you
think we should send John to it?”
“T hat is a great idea,” I exclaimed, “Perhaps it would be good if he were to receive the news from
you directly, George.” George agreed, and after discussing some other issues, we parted company.
That afternoon, John came into my office, upset and ready to quit. “After all my effort and work,
you guys are sending me for training semi nars. So, am I not good enough fo r you?”
Case 4 GOING TO THE X-STREAM
by Roy Smollan , A uckla nd University of Technology, New Zeala nd
Gi l Reihana was the chief executive officer of X-Stream, a company he launched in Auckland,
New Zealand, six years ago at the age of 25, after graduating with a bachelor’s degree in information
technology and management. He had inherited $300,000 and had persuaded various fami ly members
to invest additional money. X-Stream assembled personal computers for the New Zealand and Austra-
lian markets and sold them through a number of chain stores and independent retailers. The company
had soon established a reputation for quality hardware, customized products, excellent delivery times
and after-sales service. Six months ago it had started a software division, special izing in webpage
design and consulting on various applications for the development of electronic business.
Gi l was driven by a desire to succeed. He had started working part-time at an electronics retailer at
age 16, and in his spare time took apart old computers in his garage to see how they were made. He was
extraverted, energetic, and enthusiastic, often arriving at work before 5 a.m. and seldom leaving before
7 p.m. He fe lt that work should be challenging but fun, too. He had initially picked a young senior man-
agement team that he thought shared his outlook. A casual, almost irreverent atmosphere developed.
However, a poorly organized accounting department led to the demise of the first accountant after two
years. Gil bel ieved that major decisions should be made by consensus and that individuals should then
be empowered to implement these decisions in their own way. In the begi nning, he had met with each
staff member in January to discuss w ith them how happy they were in their jobs, what their ambitions
were, and what plans they would like to make for the coming year in terms of their own professional
development. As the company had grown this had become more difficu lt and he had left each member
of his senior management team to do this with their own staff, but did not monitor whether they were
doing it or how well it worked. Now he tried to keep in touch w ith staff by having lunch with them in
the cafeteria occasionally.

Additional Cases CA-7
Denise Commins (affectionately known to al l staff as Dot Com) was the chief financ ial officer.
She and Gi l could not be more different. Denise was quiet, methodical, and very patient. Her superb
interpersonal skills complemented a highly analytical mind. At 55, she was considerably older than
most of the employees and often showed a strong maternal side. Many of her team (and several from
other departments as well) frequen tly consulted her on work issues and personal problems, too. She
enjoyed the informal relationships she had built up but found that the technical aspects of her role were
becoming less rewarding.
Don Head, the marketing manager, was considered to be a rather ruthless operator, often undercut-
ting the competition in terms of price, and, on more than one occasion, by circulating false rumours
of defects in their products. He deemed himself “a ladies’ man” and was known to fl ir t w ith a number
of the staff. A case of sexual harassment had been dropped after a 22-year-old secretary had been paid
a sizeable sum of money in an out-of-court settlement. G il and the members of the senior manage-
ment team had been furious but Don had denied any wrongdoing, claiming that she had ” led him on.”
He had been at university with Gi l and they spent many hours after work at a pub around the comer
from the factory. With sales rising year after year, his marketing expertise and cunning were regarded
as essential to the company’s continuing growth. He had a department of eight whom he had carefully
screened to ensure he was employing ambitious self-starters. They were required to set and achieve
their own targets, as long as they were “big, hairy, ambitious goals,” a phrase he had heard at a seminar.
Jason Palu, the production manager, was a softly spoken man who had started as a supervisor and
quickly worked his way to the top position. He set extremely high standards for the production staff
and was considered to be a perfectionist. He was highly regarded by his colleagues for his efficiency
and reliability. There were very few occasions when an order could not be fu lfi lled on time and his
goal was zero defects. He tended to be autocratic and some people complained that he never listened
to them. He al located work hours that did not suit people, and often insisted on overtime that was paid,
but was usually at very short notice. When one production worker complained, Palu tersely remarked,
“We have a job to do and we just have to get on with it. The company depends on us.”
Heather Berkowitz was the chief web page designer. She had blue hair, a ring through her nose, and
dressed in a variety of exotic clothes that had been sourced from a number of second-hand stores. She
seldom arrived at work much before I I a.m. and often left before 4 p.m. She said she did her best work
at home, often at night, so why should she “punch the clock like the drones on the assembly line?”
Gi l and others had often received emails from her that had been sent at al l hours of the night. She had
establ ished a reputation as a top web page designer, and although her physical appearance did not go
down too well w ith some of the company’s clients (or staff), the quality and quantity of her work was
extremely high.
On Thesdays at 9 a.m. the senior staff met to discuss weekly plans and any significant issues that
had arisen. All employees were invited to the meeting, an opportunity that some took advantage of by
attending. Gil trusted all staff to keep confidential matters within the company. He believed that if the
organization shared information with employees they would be more likely to support management
decisions. The meetings lacked formal ity and usually started with some jokes, usually at the expense
of some members of staff. By and large the jokes were meant to be inoffensive, but were not always
taken that way. Nicknames were often assigned to staff, mostly by Don Head, some quite derogatory.
You were thought to be a “wet blanket” if you objected. Don seemed oblivious to the unflattering
nickname he had been given, preferring to cal l himself Braveheart, sometimes even signing memos in
this fashion.
Although employment agreements referred to a 40-hour week, there wa~ an expectation that staff
would put in substantial ly more than that. Only the assembly line workers had to clock in and out, but
this, Jason had explained, was due to the overtime that assembly staff were required to work to meet
deadlines. The overtime pay was welcomed by some production staff and resented by some employees
in other departments who believed they should be entitled to the same benefits.
Recently a confl ict had arisen between Jason and Don. For some time, the company had been devel-
oping a top-of-the range laptop which wa~ scheduled for launch in two weeks’ time. Jason had been
urging senior management to delay the introduction of the new X-MH until some hitches had been

CA-8 Additional Cases
sorted out. A batch of chips acquired from abroad had contained some defective features. He wanted
to postpone the new model until these problems had been completely sorted out, a process which he
believed would take another month. Don found this to be unacceptable. A former All Blacks rugby
team captain had been contracted to attend the launch and market the new model on a roadshow that
would travel to New Zealand and Austral ia’s main cities. He would not be available at the time Jason
wa~ prepared to release the X-MH. At a heated staff meeting, some of the senior staff backed Don, and
some agreed w ith Ja~on. Don had urged all of his department to attend the meeting, to present a united
front and convey an image of power.
Heather Berkowitz had arrived halfway through the meeting and w ith a mouthful of muffin pro-
claimed that there was no rush to get out the “new toy.” The company had plenty of other issues to
which it could devote its energy. She said she had met the head of information technology at a chain of
fast food restaurants that wanted to revitalize its website. She maintained she needed three extra staff to
get this up and running. She exited the meeting fi ve minutes later. Don was fuming at the interruption
and demanded that G il should stick to the original launch date of the X-MH. Gi l calmly replied that he
understood Don’s frus tration, but that more consultation was necessary. He said that it would be dis-
cussed by the parties concerned during the week and a final decision would be made at the following
1\tesday’s staff meeting.
Don spent the rest of the day lobbying other members of the senior staff. He offered Dorothy the use
of his beach cottage if she backed him and promised to support her on the acquisition of expensive new
accounting software. She just laughed and said that she was convinced the senior management team
would approve the new software. She also informed Don that a member of her staff had seen one of his
sales representatives entering a strip joi nt the previous week at a time when the sales force had been
engaged in a staff meeting.
Other problems had arisen in recent months. Ramesh Patel, the newly recruited head of e-business
applications had, w ith help from a personal contact, developed a software program that would help
hotels and restaurants source products and services over the Internet. It wa~ beginning to generate useful
revenue. His contact had now billed X-Stream for $25,000 in consultancy fees and development costs.
Ramesh claimed that his contact had owed him a favour and that no mention of money had ever been
made. X-Stream had referred the matter to its legal counsel.
Les Kong, the research and development manager (hardware) had complai ned to Gi l that he could
no longer work under Jason Palu. Whi le he considered him a very plea~ant man, and a very capable
production manager, he could no longer tolerate his strict control style. “You can’t do creative work on
command !” was his lament. He loved his job and had spent hours over several weekends developing
and refining a new product.
There was considerable resentment from J a~on and Don about the resources that had been invested
in the software division, partly because they did not see the need for the company to diversify and
partly because they claimed that money was being diverted from their departments to fund the new
ventures. Ramesh claimed that “a good e-business starts at home-we should open up all our procure-
ment via the Internet.” His suggestion did not go down well with Jason and Don.
Gi l had been pondering the structure of X-Stream for some time. The old function al structure no
longer seemed appropriate. “Silo” mentality and departmental interests seemed to predominate and turf
wars took place. T he company had grown to 64 staff in New Zealand and eight in Austral ia. The ongo-
ing development of new hardware and the introduction of the software s ide of the business had made
management somewhat compl icated. He missed the old days when he knew every member of staff.
The informal decision making that was characteristic of the business might have to give way to more
formal processes. Yet he did not want to lose the creativity that underpinned the company’s success.
Despite the open invitation to attend the management meetings, many staff complai ned that they never
knew what was going on. He expected all senior managers to keep their departmental staff informed of
developments. Some had done this admirably while others had virtual ly ignored his wishes.
A human resources manager, Alkina Bennelong, had been appointed a month previously and
reported to Denise Commins. She had been reviewing the company’s loosely worded job descrip-
tions and person specifications, and the recruitment and selection systems, and had suggested more

Additional Cases CA-9
professional but more elaborate approaches. She had also suggested the introduction of a performance
management system, including feedback from peers, direct reports, and outsiders, such as suppliers
and customers. “Over my dead body!” was the retort of Don Head. “How can you allow subordinates
to tell you how to do your job?” queried Ja~on Palu. “Can’t see what the fuss is all about,” said Heather
Berkowitz. “Everybody keeps telling me what to do anyway, even though they don’t understand the
first thing about my job! But it doesn’t worry me.”
Case 5 KEEPING SUZANNE CHALMERS
by Steven L. McShane, C urtin U niversity (Australia) and U niversity of Victoria (Canada)
Thomas Chan hung up the telephone and sighed. The vice-president of software engineering at
Advanced Photonics Inc. (API) had just spoken to Suzanne Chalmers, who had cal led to arrange a
meeting w ith Chan later that day. She didn’t say what the meeting wa~ about, but Chan almost instinc-
tively knew that Suzanne was going to quit after working at API for the pa~t four years. Chalmers is
a software engineer in Internet Protocol (IP), the software that directs fibre-optic light through API’s
routers. It is very specialized work, and Suzanne is one of API’s top talents in that area.
Thoma~ Chan had been through this before. A valued employee would arrange a private meeting.
The meeting would begin with a few pleasantries, then the employee would announce that he or she
wanted to quit. Some employees said they were leaving because of the long hours and stressful dead-
lines. They said they needed to decompress, get to know their kids again, or whatever. But that wasn’t
usually the real reason. Almost every organization in this industry was scrambling to keep up with tech-
nological advances and the competition. Employees would just leave one stressful job for another one.
Also, many of the people who left API joined a startup company a few months later. These startup
firms can be pressure cookers where everyone works 16 hours each day and ha~ to perform a variety
of tasks. For example, engineers in these small firms might have to meet customers or work on venture
capital proposals rather than focus on specialized ta~ks related to their knowledge. API now ha~ over
6,000 employees, so it is easier to assign people to work that matches their technical competencies.
No, the problem isn’t the stress or long hours, Chan thought. The problem is money-too much
money. Most of the people who leave are millionaires. Suzanne Chalmers is one of them. Thanks to
generous share options that have skyrocketed on the stock markets, many employees at API have more
money than they can use. Most are under 40 years old, so it’s too early for them to retire. But their
financ ial independence gives them less reason to remain with API.
THE M EETI NG
The meeting with Suzanne Chalmers took place a few hours after the telephone call. It began like the
others, with the initial pleasantries and brief discussion about progress on the latest fibre-optic router
project. Then, Suzanne made her well-rehearsed statement: “Thomas, I’ve really enjoyed working here,
but I’m going to leave Advanced Photonics.” Suzanne took a breath, then looked at Chan. When he
didn’t reply after a few seconds, she continued: “I need to take time off. You know, get away to recharge
my batteries. The project’s nearly done and the team can complete it without me. Well, anyway, I’m
thinking of leaving.”
Chan spoke in a calm voice. He suggested that Suzanne should take an unpaid leave for two or maybe
three months, complete w ith paid benefits, then return refreshed. Suzanne pol itely rejected that offer,
saying that she needed to get away from work for a while. Thomas then asked Suzanne whether she was
unhappy with her work environment-whether she was getting the latest computer technology to do her
work and whether there were problems with co-workers. The workplace was fine, Suzanne replied. The
job was getting a bit routine, but she had a comfortable workplace with excellent co-workers.
Chan then apologized for the cramped workspace, due mainly to the rapid increa~e in the number
of people hired over the past year. He suggested that if Suzanne took a couple of months off, API
would give her special treatment with a larger workspace with a better view of the park behind the

CA- 10 Additional Cases
campus-like building when she returned. She politely thanked Chan fo r that offer, but it wasn’t what
she needed. Besides, it wouldn’t be fair to have a large workspace when other team members would be
working in smal ler quarters.
Chan was running out of tactics, so he tried his last hope: money. He a~ked whether Suzanne had
had higher offers. Suzanne replied that she regularly received calls from other companies, and some
of them offered more money. Most were startup fi rms that offered a lower salary but higher potential
gains in share options. Chan knew from market surveys that Suzanne was already paid well in the
industry. He also knew that API couldn’t compete on share option potential. Employees working in
startup firms sometimes saw their shares increase by five or ten times their initial value, whereas shares
at API and other large firms increased more slowly. However, Chan promised Suzanne that he would
recommend that she receive a significant raise-maybe 25 percent more-and more share options.
Chan added that Chalmers wa~ one of API’s most valuable employees and that the company would
suffer if she left the firm.
The meeting ended with Chalmers promising to consider Chan’s offer of higher pay and share
options. Two days later, Chan received her resignation in writing. Five months later, Chan learned that
after a few months travelling with her husband, Chalmers joined a startup software firm in the area.
CopyTig.ht 0 200 1 Ste,-en L. McShane
Case 6 NORTHWEST CANADIAN FOREST
PRODUCTS LIM ITE D (REVISED)
by Pete r Seidl, British Columbia Institute of Technology
Northwest Canadian Forest Products Ltd. owns and operates five sawmills in British Columbia and
Alberta. These mills produce high-quality lumber for use in the manufacture of window frames, doors,
and mouldings for markets in the United States and Japan, in addition to lower-quality, commodity-type
lumber used in the Canadian construction industry. (The firm’s export markets tend to be more
demanding and quality-conscious than its domestic markets, but are also more lucrative.) Currently,
the president of the company is thinking about the long-term prospects of each of the mills and is pay-
ing particular attention to the Jackson Sawmill located in the small town of Jackson, B.C.
This mill was original ly built sixty years ago and was last upgraded twenty years ago. The president,
June Batna, knows she w ill soon (in 2 to 3 years) have to dec ide whether or not to invest very substan-
tial sums of money in a new plant and equipment at the Jackson Sawmill. New investment is required
in order to keep the mill up-to-date and competitive with similar mills throughout North America.
However, the mill has consistently been the poorest performer (in terms of productivity and product
quality) in the company over the past twenty years, even though its equipment is of similar age, type,
and qual ity as that found in the other mills.
The president would like to invest the money needed because the alternative to re-investing in Jackson
would be to downsize the Jackson Sawmill by reduc ing production capacity and permanently laying
off about half the 200-person workforce. The remaining part of the mill would serve the domestic
market only. A new mill would then be bui lt in Alberta in order to serve the more demanding, quality-
conscious export markets. A new mi ll in Alberta would cost somewhat more than the anticipated
investment required to modernize the Jackson Sawmi ll. However, Ms. Batna is willing to seriously
consider implementing this alternative because she thinks that the labour relations climate in Alberta is
much better than the one found at Jackson.
In fact, she attributes most, if not all, of the problems at Jackson to its poor labour-management
relations. During the last round of collective bargaining, there was a strike at all four of the company’s
B.C. mills. The strike wa~. however, much more bitter at Jackson than elsewhere. Company bui ldings
suffered minor damage during the strike at the hands of some striking employees. Since then, there
have been two separate occa~ions when the entire workforce walked off the job for a day to protest the
firings of two employees who were dismissed for insubordination.

Additional Cases CA- 1 1
The Jackson Sawmill has the worst safety record of al l the company’s mills. There is a joint labour-
management health and safety committee (as required by law) but it is viewed as a waste of time by
both sides. One management member of the safety committee, Des, the production manager and the
second highest manager at the mill, has said: “The union guys start each safety committee meeting by
complaining about safety but they just can’t wait to complain about everything else they can possibly
think of. Their whining and complaining is so predictable that I go to every safety meeting ready for a
fight on workload and production issues as well as for a figh t on safety. Of course, safety is everyone’s
responsibility but production issues are none of their business. Production is a management responsibility.
Plans, budgets, and other management concerns are very definitely not part of the committee’s job.
Most of what’s said at these meetings isn’t worth listening to.”
The union is also dissatisfied with the function ing of the safety committee. Ivan, the chief union steward
who also serves on the committee, observes: “If the safety committee wa~n’t mandatory by law, manage-
ment wouldn’t even pretend to listen to us. We put forward our safety concerns but management says that
we are mixing safety in with workload and production issues. They only want to talk about what they
think are safety issues-like serious accidents. Thankfully, we don’t have too many of those! But safety is
more than just avoiding major accidents. We get far too many ‘little accidents’ and ‘near-accidents’ here.
At least that’s what management calls them. They just want us to work faster and faster. We complain and
complain at the meetings but they just say ‘that’s a production issue and this is a safety committee.’ They
accuse us of trying to run the company when we ask for better equipment. They say we don’t understand
things like costs and limited budgets. We don’t care about their budgets, we’ve got work issues to talk
about and we’ll keep speaking out for the crew no matter what. That’s what the union is for.”
Big Bad John, one of the mi ll’s toughest and most experienced supervisors, describes his job as fol-
lows: “The job of supervisor is to keep a close watch on every move the crew makes. If I look away for
a second, some guy is going to be doing something wrong- either with the equipment or w ith the logs.
They’re always making mistakes. Lots of mistakes! Some of these guys are just plain dumb. And lazy,
too! Any chance they can get to steal some company time, they take. They start work late; they take
long lunch breaks; they talk too much during their shifts. A minute here, a minute there-it all adds up.
The younger guys are the worst. They always want to talk back to me, they can’t follow my orders like
most of the older guys can. Lousy attitude, that’s what they’ve got.”
Des, the production manager, has stated that “the mill has had a problem with worker motivation
and attitude for a~ long as I can remember. But it’s slowly getting worse as younger guys are being
hired to replace the older, retiring guys. The new workers are better educated than the older ones and
because of that they think they can treat their supervisors with disrespect. Don’t get me wrong, we get
the job done here but it takes a lot of effort on the part of the managers and, especial ly, the supervisors.
The supervisors really earn their pay here. They watch the crew closely and have to put up with a lot
of crap from them. Many of the grievances we have are a result of the discipline we have to hand out
regarding horseplay, absenteeism, tardiness, careless workmanship, and not reaching production quo-
tas. However, overal l, the mill gets the product out the door, but only because we ensure that the crew
works hard. Despite grumblings from the crew, we maintain a pretty good pace of work around here.”
Vic, the youngest union steward, gives his view of labour-management relations: “The supervisors
and the managers, they know it all. They think they’re so smart. They treat the guys on the crew like
children. Almost everyone on the crew has a high school education. Some even have college back-
grounds. Most are raising families. We’re not stupid! Sure, some guys come in late and miss a day of
work now and then. Who can blame them? The pace of work is exhausting. How can you do a good job
when you’re tired and rushing al l the time?” He adds: “Of course, we’re not perfect. We make mistakes
just like everyone else does. But nobody ever explains anything to the crew members. The supervi-
sors just watch everyone like hawks and jump al l over them, criticize them, and make them feel stupid
when they use a piece of equipment the wrong way. We’re always so rushed and busy here that the
senior crew members don’t have much time to explain things to the newer workers, the younger guys.
The equipment could be in better shape. That would help.”
Des, the production manager, ha~ expressed his views on labour-management relations: “The union
just doesn’t understand–or even care about-the connection between the poor work ethic, the poor

CA-12 Additional Cases
attitude on the part of the crew members here, and the mill ‘s mediocre productivity and product qual ity.
The union and the crew only take their very narrow ’employee-view’ of how things are done around
here. They don’t understand the bigger picture. Well, it’s very competitive out there. T hey don’t under-
stand what tight budgets, increasing costs, declining quality, missed production targets, and complain-
ing customers mean to a business. T hey just sit back and complain about our management style. What
they don’ t realize is that their attitude makes our management style necessary. Complaining is easy,
no responsibility is needed. Managing, on the other hand, is chal lenging. And it’s especially tough to
control this particular crew. We’ve currently got 40 unresolved grievances-that’s a lot of formal com-
plaints for a mill of our size. Some of the union stewards actually go out among the crew and look for
grievances just because they’re mad they can’t run the mill the way they want to. Sometimes I think the
stewards want to create grievances where no real problems exist. T hey want to give us in management
headaches.”
Vic, a union steward, went on to say: “We’ve currently got 40 unresolved grievances at different
stages of the grievance procedure-! don’t have to tell you that’s quite a lot for a mill of our size. Some
crew members are really mad at management and file a lot of grievances. The grievances are mostly
about challenging the discipl ine management hands out regarding horseplay, absenteeism, tardiness,
careless workmanship, and not reaching production quotas. We-the shop stewards-try to calm them
down but some guys are really angry about how they’re treated. The stewards spend a lot oftime trying
to settle things outside the fo rmal grievance process, but some of the crew really want the stewards to
file grievances and some supervisors don’t want to solve things informally. Things are pretty formal
around here. It’s all such a wa~te of time and energy. T he pay is good but I wouldn’t recommend this as
a place to work to anyone unless they like being treated like a misbehavi ng chi ld.”
The president of the company has recently informed Digby, the mill’s new general manager (he
started la~t month), of the decision she w ill soon have to make regarding the mi ll’s future. She told
Digby that significant improvement~ in mill productivity and product quality are required if the mi ll is
to receive a substantial investment in new plant and equipment. Without such improvements, the mill
would be downsized and about half of the workforce would be permanently laid off. Half the supervisory
and managerial personnel would also lose their j obs.
Digby has just telephoned Moe (the president of the local union who does not work at the mill but
who is very familiar with developments at the mill) to tell him about the message from the company
president. Upon hearing of the potential job losses, Moe was troubled and asked to meet with Digby
to discuss the sintation. However, Moe was also somewhat skeptical because the previous general
manager once told him that some permanent layoffs would occur unless productivity was improved.
No layoffs subsequently occurred. Therefore, Moe is uncertai n if the company is serious about these
potential future layoffs or merely bluffing in order to get the employees to work harder.
Case 7 THE REGENCY GRAND HOTEL
by Elizabeth Ho, Gucci G rou p, under the supervision of Steven L. McSh ane, C urti n
U niversity (Australia) a nd University of Victori a (Can ada)
The Regency Grand Hotel is a five-s tar hotel in Bangkok, T hai land. The hotel was establ ished fifteen
years ago by a local consortium of investors and has been operated by a T hai general manager through-
out this time. T he hotel is one of Bangkok’s most prestigious hotels and its 700 employees enjoy the
prestige of being associated with the hotel. The hotel provides good employee benefits, above-market-
rate salary, and job security. In addition, a good year-end bonus amounting to four months’ salary is
rewarded to employees regardless of the hotel’s overall performance during the year.
Recently, the Regency was sold to a large American hotel chain that was very keen to expand its
operations into Thailand. When the acquisition was announced, the general manager decided to take
early retirement when the hotel changed ownership. The American hotel chain kept all of the Regency

Additional Cases CA- 13
employees, although a few were transferred to other positions. John Becker, an American w ith I 0 years
of management experience with the hotel chain, wa~ appointed as the new general manager of the
Regency Grand Hotel. Becker was selected as the new general manager because of his previous suc-
cesses in integrating newly acquired hotels in the United States. In most of the previous acquisitions,
Becker took over operations with poor profitability and low morale.
Becker is a strong bel iever in empowerment. He expects employees to go beyond guidelines/stan-
dards to consider guest needs on a case-by-case basis. That is, employees must be guest-oriented at
all times so as to provide excellent customer service. From his U.S. experience, Becker has found that
empowerment increases employee motivation, performance, and job satisfaction, al l of which contrib-
ute to the hotel’s profi tability and customer service ratings. Soon after becoming general manager at
the Regency Grand, Becker introduced the practice of empowerment so as to replicate the successes
that he had achieved back home.
The Regency Grand hotel has been very profitable since it opened. The employees have always
worked according to management’s instructions. Their responsibility wa~ to ensure that the instruc-
tions from their managers were carried out diligently and conscientiously. Innovation and creativity
were discouraged under the previous management. Indeed, employees were punished for their mistakes
and discouraged from tryi ng out ideas that had not been approved by management. As a result, employ-
ees were afraid to be innovative and to take risks.
Becker met with the Regency’s managers and department heads to explain that empowerment would
be introduced in the hotel. He told them that employees must be empowered with decision-making author-
ity so that they can use their initiative, creativity, and judgment to satisfy guest needs or handle problems
effectively and efficiently. However, he stressed that the more complex issues and decis ions were to
be referred to superiors, who were to coach and a~sist rather than provide direct orders. Furthermore,
Becker stressed that while mistakes were allowed, repetition of the same mistake more than twice
could not be tolerated. He advised his managers and department heads that they should not discuss or
consult him on minor issues/problems and decisions. Nevertheless, he told them that they are to dis-
cuss important/maj or issues and decisions w ith him. He concluded the meeting by asking for feedback.
Several managers and department heads told him that they liked the idea and would support it, while
others simply nodded their heads. Becker was plea~ed w ith the response, and was eager to have his plan
implemented.
In the past, the Regency had emphasized administrative control, resulting in many bureaucratic
procedures throughout the organization. For example, the front counter employees needed to seek
approval from their manager before they could upgrade guests to another category of room. The front
counter manager would then have to write and submit a report to the general manager justifying the
upgrade. Soon after his meeting w ith managers, Becker reduced the number of bureaucratic rules at the
Regency and allocated more decision-making authority to fron t line employees. This action upset those
who previously had decision-making power over these issues. As a result, several of these employees
left the hotel.
Becker also began spending a large portion of his time observing and interacting w ith the employees
at the front desk, lobby, restaurants, and various departments. This direct interaction with Becker
helped many employees to understand what he wanted and expected of them. However, the employees
had much difficu lty trying to distinguish between a major and minor issue/decision. More often than
not, supervisors would reverse employee decisions by stating that they were major issues requiring
management approval. Employees who displayed initiative and made good decisions in satisfying the
needs of the guests rarely received any positive feedback from their supervisors. Eventually, most of
these employees lost confidence in making decisions, and reverted back to relying on their superiors
for decision making.
Not long after the implementation of the practice of empowerment, Becker real ized that his subordi-
nates were consulting him more frequently than before. Most of them came to him to discuss or consult
on minor issues. He had to spend most of his time attending to his subordinates. Soon he began to fee l
highly frus trated and exhausted, and very often would tell his secretary that “unless the hotel is on fire,
don’ t let anyone disturb me.”

CA- 14 Additional Cases
Becker thought that the practice of empowerment would benefit the overal l performance of the hotel.
However, contrary to his expectation, the business and overall performance of the hotel began to dete-
riorate. There had been an increasing number of guest complaints. In the past, the hotel had minimal
guest complai nts. Now there were a significant number of formal written complaints every month.
Many other guests voiced their dissatisfaction verbally to hotel employees. The number of mistakes
made by employees had been on an increase. Becker was very upset when he real ized that two of the
local newspapers and an overseas newspaper had published negative feedback on the hotel in terms of
service standards. He was most distressed when an international travel magazine had voted the hotel as
“one of Asia’s nightmare hotels.”
The stress levels of the employees had been continuously mounting si nce the introduction of the
practice of empowerment. Absenteeism due to illness was increasing at an alarming rate. In addition,
the employee turnover rate had reached an all-time high. The good working relationships that were
established under the old management had been severely strained. The employees were no longer
united and supportive of each other. T hey were quick to “point fingers” at or to “back stab” one another
when mistakes were made and when problems occurred.
Note: This c.a..:;e is based on true C\’ents. but the indusLry and names have been changed.
Case 8 SIMMONS LABORATORIES
adapted by Wi lliam Starbuck from a case written by Alex Bavelas
Brandon Newbridge was sitting alone in the conference room of the laboratory. T he rest of the group
had gone. One of the support staff members had stopped and talked for a while about her husband’s
coming enrolment in graduate school. Brandon, now alone in the laboratory, sl id a little further down
in his chair, looking w ith satisfaction at the results of the first test run of the new photon unit.
He liked to stay after the others had gone. His appointment as project head was sti ll new enough to
give him a deep sense of plea~ure. His eyes were on the graphs before him, but in his mind, he could
hear Dr. Will iam Goh, the project head, saying again, “There’s one thing about this place you can bank
on. The sky is the limit fo r anyone who can produce!” Newbridge felt again the tingle of happiness
and embarra~sment. Well, dammit, he said to himself, he had produced. He wasn’ t kidding anybody.
He had come to the Simmons Laboratories two years ago. During a routine testing of some rejected
Clanson components, he had stumbled on the idea of the photon correlator, and the rest just happened.
Goh had been enthusia~tic: A separate project had been set up fo r furthe r research and development of
the device, and he had been given the job of running it. The whole sequence of events still seemed a
little miraculous to Newbridge.
He shrugged out of the reverie and was bent determinedly over the sheets when he heard someone
come into the room behind him. He looked up expectantly; Goh often stayed late himself and now
and the n dropped in for a chat. T his always made the day’s end especially pleasant for Brandon. But
it wasn’t Goh. The man who had come in was a stranger. He wa~ tall and thin. He wore steel-rimmed
glasses and had a very wide leather belt with a large brass buckle. Lucy, a member of Brandon’s team,
remarked later that it wa~ the kind of belt the Pi lgrims must have worn.
The stranger smi led and introduced himself. ”I’m Lester Zapf. Are you Brandon Newbridge?”
Brandon said yes, and they shook hands. ” Doctor Goh said I might find you in. We were talking about
your work, and I’m very much interested in what you are doing.” Brandon waved to a chair.
Zapf didn’t seem to belong in any of the standard categories of visitors: customer, visiting fireman,
shareholder. Brandon poi nted to the sheets on the table. “These are the preliminary results of a test
we’re running. We have a new gadget by the tail and we’re trying to understand it. It’s not finished, but
I can show you the section we’re testing.”
He stood up, but Zapf wa~ deep in the graphs. After a moment, he looked up with an odd grin.
“T hese look like plots of a Jennings surface. I’ve been playing around with some autocorrelation func-
tions of surfaces-you know that stuff.” Brandon, who had no idea what he was referring to, grinned

Additional Cases CA- 15
back and nodded, and immediately felt uncomfortable. “Let me show you the monster,” he said, and
led the way to the workroom.
After Zapf left, Newbridge slowly put the graphs away, feeling vaguely annoyed. Then, as if he had
made a decision, he quickly locked up and took the long way out so that he would pass Goh’s office.
But the office was locked. Newbridge wondered whether Goh and Zapf had left together.
The next morning, Newbridge dropped into Goh’s office, mentioned that he had talked with Zapf,
and asked who he was.
“S it down for a minute,” Goh said. “I want to talk to you about him. What do you think of him?”
Newbridge replied truthfully that he thought Zapf wa~ very bright and probably very competent. Goh
looked pleased.
“We’re taking him on,” he said. “He’s had a very good background in a number of laboratories,
and he seems to have ideas about the problems we’re tackling here.” Newbridge nodded in agreement,
instantly wishing that Zapf would not be placed with him.
“I don’t know yet where he wi ll finally land,” Goh continued, “but he seems interested in what you
are doing. I thought he might spend a little time with you by way of getting started.” Newbridge nodded
thoughtfully. “If his interest in your work continues, you can add him to your group.”
“Well, he seemed to have some good ideas even without knowing exactly what we are doing,” New bridge
answered. “I hope he stays; we’d be glad to have him.”
Newbridge walked back to the lab w ith mixed feel ings. He told himself that Zapf would be good for
the group. He wa~ no dunce; he’d produce. Newbridge thought again of Goh’s promise when he had
promoted him : “The sky is the limit here for anyone who can produce!” The words seemed to carry the
overtones of a threat now.
That day Zapf didn’ t appear until mid-afternoon. He explai ned that he had had a long lunch w ith
Goh, discussing his place in the lab. “Yes,” said Newbridge, “I talked w ith Dr. Goh this morning about
it, and we both thought you might work w ith us for a while.”
Zapf smiled in the same knowing way that he had smiled when he mentioned the Jennings surfaces.
“I’d like to,” he said.
Newbridge introduced Zapf to the other members of the lab. Zapf and Link, the group’s mathemati-
cian, hit it off well and spent the rest of the afternoon discussing a method for analyzing patterns that
Link had been worrying over the last month.
It was 6:30 when Newbridge finally left the lab that night. He had waited almost eagerly for the end
of the day to come-when they would all be gone and he could sit in the quiet rooms, relax, and think
it over. “Think what over?” he asked himself. He didn’t know. Shortly after 5 p.m., they had almost all
gone except Zapf, and what followed was almost a duel. Newbridge was annoyed that he was being
cheated out of his quiet period and finally, resentfully, determined that Zapf should leave first.
Zapf wa~ sitting at the conference table reading, and Newbridge wa~ sitting at his desk in the little
gla~s-enclosed cubby he used during the day when he needed to not be disturbed. Zapf had gotten the last
year’s progress reports out and wa~ studying them carefully. The time dragged. Newbridge doodled on
a pad, the tension growing inside him. What the hell did Zapf think he was going to find in the report~?
Newbridge fmally gave up and they left the lab together. Zapftook several of the reports with him to study
in the evening. Newbridge a~ked him if he thought the reports gave a clear picture of the lab’s activities.
“They’re excellent,” Zapf answered w ith obvious sincerity. “T hey’re not only good reports; what
they report is damn good, too!” Newbridge wa~ surprised at the relief he felt and grew almost jovial as
he said good night.
Driving home, Newbridge fe lt more optimistic about Zapfs presence in the lab. He had never fully
understood the analysis that Link was attempting. If there was anyt hing wrong w ith Link’s approach,
Zapf would probably spot it. “And if I’m any judge,” he murmured, “he won’t be especially diplomatic
about it.”
He described Zapf to his wife, who was amused by the broad leather belt and brass buckle.
“It’s the kind of belt that Pilgrims must have worn,” she laughed.
“I’m not worried about how he holds his pants up,” he laughed with her. “I’m afraid that he’s the
kind that just has to make like a genius twice each day. And that can be pretty rough on the group.”

CA-16 Additional Cases
Newbridge had been asleep for several hours when he was jerked awake by the telephone. He real ized
it had rung several times. He swung off the bed, muttering about damn fools and telephones. It was
Zapf. Without any excuses, apparently oblivious of the time, he plunged into an excited recital of how
Link’s patterning problem could be solved.
Newbridge covered the mouthpiece to answer his wife’s stage-whispered “Who is it?”
“It’s the genius,” replied Newbridge.
Zapf, completely ignoring the fact that it wa~ 2 a.m., went on in a very excited way to explain a
completely new approach to certain of the photon lab problems that he had stumbled on while analyz-
ing past experiments. Newbridge managed to put some enthusiasm in his own voice and stood there,
half-dazed and very uncomfortable, listening to Zapf talk endlessly about what he had discovered.
It was probably not only a new approach but also an analysis that showed the inherent weakness of the
previous experiment and how experimentation along that line would certainly have been inconclusive.
The foll owing day, Newbridge spent the entire morning with Zapf and Link, the mathematician, the
customary morning meeting of Brandon’s group having been called off so that Zapf’s work of the
previous night could be gone over intensively. Zapf was very anxious that this be done, and Newbridge
was not too unhappy to call the meeting off for reasons of his own.
For the next several days, Zapf sat in the back office that had been turned over to him and did noth-
ing but read the progress reports of the work that had been done in the last six months. Newbridge
caught himself fee ling apprehensive about the reaction that Zapf might have to some of his work.
He was a little surprised at his own feelings. He had always been proud-although he had put on a
convincingly modest face-of the way in which new ground in the study of photon-measuring devices
had been broken in his group. Now he wasn’ t sure, and it seemed to him that Zapf might ea~ily show
that the line of research they had been following was unsound or even unimaginative.
The next morning (as was the custom) the members of the lab, including the secretaries, sat around
a conference table. Brandon always prided himself on the fact that the work of the lab was guided
and evaluated by the group as a whole, and he wa~ fond of repeating that it was not a waste of time
to include secretaries in such meetings. Often, what started out as a boring recital of fundamental
assumptions to a naive listener, uncovered new ways of regarding these assumptions that would not
have occurred to the researcher who had long ago accepted them as a necessary ba~is for his work.
These group meetings also served Brandon in another sense. He admitted to himself that he would have
felt far less secure if he had had to direct the work out of his own mind, so to speak. With the group meeting
as the principle of leadership, it wa~ always possible to justify the exploration of blind alleys because of the
general educative effect on the team. Zapf wa~ there; Lucy and Martha were there; Link was sitting next to
Zapf, their conversation concerning Link’s mathematical study apparently continuing from yesterday. The
other members, Bob Davenport, Georgia Thurlow, and Arthur Oliver, were waiting quietly.
Newbridge, for rea~ons that he didn’t quite understand, proposed for discussion this morning a problem
that all of them had spent a great deal of time on previously with the conclusion that a solution was
impossible, that there was no feasible way of treating it in an experimental fash ion. When Newbridge
proposed the problem, Davenport remarked that there was hardly any use going over it again, that he
was satisfied that there was no way of approaching the problem w ith the equipment and the physical
capacities of the lab.
This statement had the effect of a shot of adrenaline on Zapf. He said he would like to know what the
problem was in detail and, walking to the blackboard, began setting down the “factors” a~ various members
of the group began discussing the problem and simultaneously listing the reasons why it had been abandoned.
Very early in the description of the problem it was evident that Zapf was goi ng to disagree about
the impossibility of attacking it. The group real ized this, and finally the descriptive materials and their
recounting of the reasoning that had led to its abandonment dwindled away. Zapf began his statement,
which, as it proceeded, sounded as if it might well have been prepared the previous night, although
Newbridge knew this was impossible. He couldn’t help being impressed with the organized and logical
way that Zapf was presenting ideas that must have occurred to him only a few minutes before.
Zapf had some things to say, however, which left Newbridge with a mixture of annoyance, irrita-
tion, and at the same time, a rather smug feeling of superiority over Zapf in at least one area. Zapf held

Additional Cases CA- 17
the opinion that the way that the problem had been analyzed was very typical of group thinking. With
an air of sophistication that made it difficult for a listener to dissent, he proceeded to comment on the
American emphasis on team ideas, satirically describing the ways in which they led to a “high level of
mediocrity.”
During this time, Newbridge observed that Link stared studiously at the floor, and he was very con-
scious of Georgia Thurlow and Bob Davenport’s glances toward him at several points of Zapfs little
speech. Inwardly, Newbridge couldn’ t help feeling that this was one point at least in which Zapf was
off on the wrong foo t. The whole Jab, fo llowing Goh’s lead, talked if not practised the theory of smal l
research teams as the basic organization for effective research. Zapf insisted that the problem could be
approached and that he would like to study it for a while himself.
Newbridge ended the morning session by remarking that the meetings would continue and that the
very fac t that a supposedly insoluble experimental problem was now going to get another chance was
an indication of the value of such meetings. Zapf immediately remarked that he was not at all averse to
meetings to inform the group about the progress of its members. The point he wanted to make was that
creative advances were seldom accomplished in such meetings, that they were made by an individual
“Jiving with” a problem closely and continuously, in a rather personal relationship to it.
Newbridge went on to say to Zapf that he wa~ very glad that Zapf had raised these points and
that he was sure the group would profit by re-examining the basis on which they had been operating.
Newbridge agreed that individual effort was probably the basis for making maj or advances. He con-
sidered the group meetings useful primarily because they kept the group together and they helped the
weaker members of the group keep up with the ones who were able to advance more ea~ily and quickly
in the analysis of problems.
It was clear as days went by and meetings continued that Zapf came to enj oy them because of the
pattern that the meetings a~sumed. It became typical for Zapf to hold forth, and it was unquestionably
clear that he wa~ more brill iant, better prepared on the various subjects that were germane to the problem
being studied, and more capable of going ahead than anyone there. Newbridge grew increasingly dis-
turbed as he realized that his leadership of the group had been, in fact, taken over.
Whenever the subject of Zapf was mentioned in occasional meetings w ith Goh, Newbridge would
comment only on the ability and obvious capacity for work that Zapf had. Somehow he never felt that
he could mention his own discomforts, not only because they revealed a weakness on his part but also
because it wa~ quite clear that Goh himself was considerably impressed w ith Zapfs work and with the
contacts he had outside the photon laboratory.
Newbridge now began to fee l that perhaps the intellectual advantages that Zapf had brought to the
group did not quite compensate for what he fe lt were evidences of a breakdown in the cooperative
spirit he had seen in the group before Zapf’s coming. More and more of the morning meetings were
skipped. Zapfs opinion concerning the abi lities of others of the group, except for Link, was obviously
low. At times during morning meetings or in smal ler discussions he had been on the point of rudeness,
refusing to pursue an argument when he claimed it was based on another person’s ignorance of the
facts involved. His impatience with others Jed him to also make similar remarks to Goh. Newbridge
inferred this from a conversation with Goh in which Goh asked whether Davenport and Ol iver were
going to be continued on; and his failure to mention Link, the mathematician, led Newbridge to feel
that this was the result of private conversations between Zapf and Goh.
It wa~ not difficu lt for Newbridge to make a quite convinc ing case about whether the brill iance
of Zapf was sufficient recompense for initiating this unravelling of the group. He spoke privately
with Davenport and Ol iver, and it was quite clear that both of them were uncomfortable because of
Zapf. Newbridge didn’ t press the discussion beyond the point of hearing them say that they did fee l
awkward, and that it was sometimes difficult to understand the arguments Zapf advanced, but often
embarrassing to ask him to fi ll in the basis for his arguments. Newbridge did not interview Link in
this manner.
About six months after Zapf’s arrival in the photon lab, a meeting was scheduled in which the
sponsors of the research would get some idea of the work and its progress. It was customary at these
meetings for project heads to present the research being conducted in their groups. The members of

CA- 18 Additional Cases
each group were invited to other meetings that were held later in the day and open to all, but the spec ial
meetings were usual ly made up only of project heads, the head of the laboratory, and the sponsors.
As the time for the special meeting approached, it seemed to Newbridge that he must avoid the
presentation at all costs. He could not trust himself to present the ideas and work that Zapf had
advanced because of his apprehension about whether he could present them in suffic ient detail and
answer such questions about them as might be asked. On the other hand, he did not feel he could ignore
these newer lines of work and present only the material that he had done or that had been started before
Zapfs arrival . He felt also that it would not be beyond Zapf at all, in his blunt and undiplomatic way-
if he were at the meeting, that is-to comment on Newbridge’s presentation and reveal his inadequacy.
It also seemed quite clear that it would not be easy to keep Zapf from attending the meeting, even
though he was not on the administrative level of those invited.
Newbridge found an opportunity to speak to Goh and raised the question. He told Goh that, with the
meetings coming up and with the interest in the work and Zapfs contributions to it, Zapf would probably
like to come to the meetings; but there was a question of how the others in the group would fee l if only
Zapf were invited. Goh passed this over very lightly by saying that he didn’t think the group would
fail to understand Zapf’s rather different position and that Zapf certainly should be invited. Newbridge
immediately agreed: Zapf should present the work because much of it was work he had done, and this
would be a nice way to recognize Zapfs contributions and to reward him, because he was eager to be
recognized as a productive member of the lab. Goh agreed, and so the matter was dec ided.
Zapfs presentation was very successful and in some ways dominated the meeting. He attracted the
interest and attention of many of those who had come, and a long discussion followed his presentation.
Later in the evening-with the entire laboratory staff present-in the cocktai l period before the din-
ner, a little circle of people formed about Zapf. One of them was Goh himself, and a lively discussion
took place concerning the application of Zapf s theory. All of this disturbed Newbridge, and his reac-
tion and behaviour were characteristic. He joined the circle, praised Zapf to Goh and to others, and
remarked on the brilliance of the work.
Without consulting anyone, Newbridge began to consider what job opportunities existed elsewhere.
After a few weeks he decided to apply for a position at a new laboratory of considerable size that was
being organized in a nearby city. C iting Newbridge’s training and experience, the new lab invited him
for a lengthy interview and, soon after, offered him a project-leader job si milar to his current position
and with s lightly higher salary.
Newbridge immediately accepted the offer and notified Goh by letter, which he mai led on a Friday
night to Goh’s home. The letter was quite brief, and Goh was stunned. The letter merely said that he
had found a better position; that he didn’t want to appear at the lab anymore for personal reasons; that
he would be glad to come back at a later time to assist if there was any mix up in the past work; that
he felt sure Zapf could supply any leadership that the group required; and that his decision to leave so
suddenly was ba~ed on personal problems-he hinted at problems of health in his family, specifical ly
his mother and father. All of this was fictitious, of course. Goh took it at face value but still fel t that
this wa~ very strange behaviour and quite unaccountable, for he had always fe lt his relationship w ith
Newbridge had been warm and that Newbridge was satisfied and, in fact, quite happy and productive.
Goh was considerably disturbed, because he had already decided to place Zapf in charge of
another project that was going to be set up very soon. He had been wondering how to explain this
to Newbridge, in view of the obvious help Newbridge was getting from Zapf and the high regard in
wh ich he held hi m. Goh had, indeed, considered the possibi lity that Newbridge could add to his staff
another person w ith the kind of background and training that had been unique in Zapf and had proved
so valuable.
Goh did not make any attempt to meet Newbridge. In a way, he fel t aggrieved about the whole thi ng.
Zapf, too, was surprised at the suddenness of Newbridge’s departure. When Goh asked Zapf whether
he preferred to stay w ith the photon group instead of the new project for the Air Force, he chose the Air
Force project and went on to that job the fo llowing week. The photon lab was hard hit. T he leadership
of the lab was given to Link w ith the understanding that this would be temporary until someone could
come in to take over.

Additional Cases CA- 19
Case 9 TAMARACK INDUSTRIES
by David J. Cherrington, Brigham Yo ung University
Tamarack Industries manufactures motorboats primarily used for water ski ing. S tudents are hired during
summer months to fi ll in for permanent employees on vacation. In past years, students worked along-
side permanent employees, but a few staff complained that the students were inexperienced, slow, and
arrogant. In general, permanent staff disliked the students’ behaviour, such a~ listening to music with
earphones while working. This summer, the company reorganized all permanent employees into three
production teams (they usually have four teams, but 25 percent are on hol iday at any given time) and
assigned the I 6 summer students to their own team on the fourth production line.
The supervisor, Dan Jensen, decided to try a different strategy this summer and have all the college
students work on the new line. He a~ked Mark Allen to supervise the new crew because Mark claimed that
he knew everything about boat~ and could perform every job “with my eyes closed.” Mark wa~ happy to
accept the new job and participated in selecting the student hires. Mark’s crew was called “the Geek Team”
because all the college student~ were savvy with computers, unlike most of the permanent employees.
Mark spent many hours training his student team to get the line running at full production. The college
students learned quickly, and by the end of June their production rate wa~ up to standard, with an error rate
that wa~ only slightly above normal. To simplify the learning process, Dan Jensen assigned the Geek Team
long production runs that generally consisted of thirty to forty identical units. Thus the training period wa~
shortened and errors were reduced. Shorter production runs were assigned to the experienced teams.
By the middle of July, a substantial rivalry had been created between the Geek Team and the older
workers. At first, the r ivalry was good-natured. But after a few weeks, the older workers became resentful
of the remarks made by the college students. The Geek Team often met its production schedules w ith
time to spare at the end of the day for goofing around. It wa~n’t uncommon for someone from the Geek
Team to go to another line pretending to look for materials just to make demeaning comments. The
experienced workers resented having to perform al l the shorter production runs and began to retaliate
with sabotage. They would sneak over during breaks and hide tools, dent materials, instal l something
crooked, and in other smal l ways do something that would slow production for the Geek Team.
Dan fe lt good about his decision to form a separate crew of college student~. but when he heard reports
of sabotage and rivalry, he became very concerned. Because of complaints from the experienced workers,
Dan equalized the production so that all of the crews had similar production runs. The rivalry, however, did
not stop. The Geek Team continued to finish early and flaunt their performance in front of the other crews.
One day the Geek Team suspected that one of their assemblies was going to be sabotaged during the
lunch break by one of the experienced crews. By skilful deception, they were able to substitute an a~sem­
bly from the other experienced line for theirs. By the end of the lunch period, the Geek Team was laughing
wildly because of their deception, while one experienced crew was very angry with the other one.
Dan Jensen decided that the situation had to be changed and announced that the job assignments
between the different crews would be shuffled. The employees were told that when they appeared for
work the next morning, the names of the workers assigned to each crew would be posted on the bul-
letin board. The announcement was not greeted with much enthusiasm, and Mark Allen decided to
talk Dan out of his idea. Mark suspected that many of the college students would qu it if their team was
broken up.
Case 10 THE OUTSTANDING FACULTY AWARD
by David J. Che rrington, Brigham Yo ung U niversity; revised by Steven L.
McShane, Curtin University (A ustralia) and U niversity of Victoria (Ca nada)
I recently served on the Outstanding Faculty Award committee for the College of Business. This award is
our college’s highest honour for a facu lty member, and is bestowed at a special reception ceremony. At the
first meeting, our committee discussed the nomination process and decided to follow our traditional prac-
tice of inviting nominations from both the facu lty and students. During the next month, we received six

CA-20 Additional Cases
completed fil es with supporting documentation. Three of the nominations came from department chairs,
two from faculty who recommended their colleagues, and one from a group of 16 graduate students.
At the second meeti ng, we agreed that we didn’ t know the six applicants well enough to make a
decision that day, so we decided that we would read the appl ications on our own and rank them. There
was no discussion about ranking criteria; I thi nk we assumed that we shared a common defi nition of
the word “outstanding.”
During the third meeting, it quickly became apparent that each committee member had a differe nt inter-
pretation of what constitutes an “outstanding” fac ulty member. The discussion was polite, but we debated
the extent to which this was an award fo r teaching, or research, or service to the college, or scholarly
textbook writing, or consulting, or service to society, or some other factor. After three hours, we agreed
on fi ve criteria that we would apply to independently rate each candidate using a five -point scale.
When we reconvened the next day, our discussion was much more focused as we tried to achieve a
consensus regarding how we judged each candidate on each criterion. After a lengthy discussion, we
fi nal ly completed the task and averaged the ratings. The top three scores had an average rating (out of a
maximum of 25) of 21, 19.5, and 18.75. I assumed the person w ith the highest total would receive the
award. Instead, my colleagues began debating over the relevance of the five criteria that we had agreed
on the previous day. Some committee members fe lt, in hi ndsight, that the criteria were incorrectly
weighted or that other criteria should be considered.
Although they did not actually say this, I sensed that at least two colleagues on the committee
wanted the criteria or weights changed because their preferred candidate didn’t get the highest score
using the existi ng formu la. When we changed the weights in various ways, a diffe rent candidate among
the top three received the top score. The remai ni ng three candidates received lower rati ngs every time.
Dr. H always received the lowest score, usual ly around 12 on the 25-point range.
After almost two hours of discussion, the a~sociate dean turned to one committee member and said,
“Dolan, I sure would like to see Dr. H in your department receive this honour. He retires next year and
this would be a great honour for him and no one has received this honour in your department recently.”
Dolan agreed, “Yes, this is Dr. H ‘s last year w ith us and it would be a great way for him to go out.
I’ m sure he would feel very honoured by this award.”
I sat there, stunned at the suggestion, while Dolan retold how Dr. H had been active in public service,
his only real strength on our criteria. I was even more stunned when another committee member, who
I think was keen to finish the meeting, said, “Well, I so move” and Dolan seconded it.
The a~sociate dean, who was conducting the meeti ng, said, “Well, if the rest of you think this is a good
idea, all in favour say aye.” A few members said “Aye,” and, w ithout call ing for nays, the associate dean
quickly proceeded to explain what we needed to do to advertise the winner and arrange the ceremony.
Duri ng my conversations w ith other committee members over the next two weeks, I learned that
everyone-including the two who said “Aye”-were a~ shocked as I was at our committee’s decision.
I thought we had made a terrible decision, and I wa~ embarrassed to be a member of the committee.
A few weeks later, we were appropriately punished when Dr. H gave a 45-minute acceptance speech
that started poorly and got worse.
Case 11 VETEMENTS LTEE
by Steven L. McShane, Curtin University (Australia) a nd University of V ictoria
(Canada)
Yetements Ltee is a chain of men’s retail clothing stores located throughout the province of Quebec.
Two years ago, the company introduced new incentive systems for both store managers and sales
employees. Store managers receive a salary w ith annual merit increases based on store sales above
targeted goals, store appearance, store inventory management, customer complai nts, and several other
perfo rmance mea~ures. Some of this inform ation (e.g., store appearance) is gathered dur ing visits by
senior management, whereas other information is based on company records (e.g., sales volume).

Additional Cases CA-21
Sales employees are paid a fixed salary plus a commission based on the percentage of sales credited to
that employee over the pay period. The commission represents about 30 percent of a typical paycheque
and is intended to encourage employees to actively serve customers and to increase sales volume.
Returned merchandise is deducted from commissions, so sales employees are discouraged from selling
products that customers do not really want.
Soon after the new incentive systems were introduced, senior management began to receive com-
plaint~ from store managers regarding the performance of their sales staff. They observed that sales
employees tended to stand near the store entrance waiting to “tag” customers a~ their own. Occasionally,
sales staff would argue over “ownership” of the customer. Managers were concerned that this aggressive
behavior intimidated some customers. It also tended to leave some parts of the store unattended by staff.
Many managers were also concerned about inventory duties. Previously, sales staff would share
responsibility for restocking inventory and completing inventory reorder forms. Under the new com-
pensation system, however, few employees were wi lling to do these essential ta~ks. On several occa-
sions, stores have faced stock shortages because merchandise was not stocked or reorder forms were
not completed in a timely manner. Potential sales have suffered from empty shelves when plenty of
merchandise was avai lable in the back storeroom or at the warehouse. The company’s new automatic
inventory system could reduce some of these problems, but employees must still stock shelves and
assist in other a~pects of inventory management.
S tore managers have tried to correct the inventory problem by assigning employees to inventory
duty, but this has created resentment among the employees selected. Other managers have threatened
sales staff with dismissals if they do not do their share of inventory management. T his strategy has
been somewhat effective when the manager is in the store, but staff members sneak back onto the floor
when the manager is away. It ha~ also hurt staff morale, particularly relations with the store manager.
To reduce the tendency of sales staff to hoard customers at the store entrance, some managers
have assigned employees to specific areas of the store. This has also created some resentment among
employees stationed in areas with less traffic or lower-priced merchandise. Some staff have openly
complained of lower paycheques because they have been placed in a slow area of the store or have been
given more than their share of inventory duties.
© I 995 Steven L McShane.

APPENDIX
Theory Building and Systematic
Research Methods
A-1
Theory Bu il ding
People need to make sense of their world, so they form theories about the way the world operates.
A theory is a general set of propositions that describes interrelationships among several concepts. We
form theories for the purpose of predicting and explaining the world around us. 1 What does a good
theory look like? First, it should be stated as clearly and simply as possible so that the concepts can be
measured and there is no ambiguity regarding the theory ‘s propositions. Second, the elements of the
theory must be logically consistent with each other, because we cannot test anything that doesn’ t make
sense. Third, a good theory provides value to society; it helps people understand their world better than
they would without the theory2
Theory bui lding is a continuous process that typically includes the inductive and deductive stages
shown in Exhibit A. l .3 The inductive stage draws on personal experience to form a preliminary theory,
whereas the deductive stage uses the scientific method to test the theory.
The inductive stage of theory building involves observing the world around us, identifying a pattern
of relationships, and then forming a theory from these personal observations. For example, you might
casual ly notice that new employees want their supervisor to give direction, whereas this leadership
style irritates long-service employees. From these observations, you form a theory about the effective-
ness of directive leadership. (See Chapter 12 for a discussion of this leadership style.)
Positivism versus lnterpretivism
Research requires an interpretation of reality, and researchers tend to perceive reality in one of two
ways. A common view, called p ositivism, is that reality exists independent of the perceptions and
interpretations of people. It is “out there” to be discovered and tested. Positivism is the foundation for
most quantitative research (statistical analysis). It assumes that we can measure variables and those
variables have fixed relationships w ith other variables. For example, the positivist perspective says that
we could study whether a supportive style of leadership reduces stress. If we find evidence that it does,
then someone else studying leadership and stress would “discover” the same relationship.
EXHIBIT A.1 Theo ry Build in g and Theory Testin g
lnducUve
O.ductlve

Append ix Theory Building and Systematic Research Methods A-2
lnter pretivism takes a different view of real ity. It suggests that real ity comes from shared meaning
among people in a particular environment. For example, supportive leadership is a personal interpreta-
tion of reality, not something that can be measured across time and people. Interpretivists rely mainly
on qualitative data, such as observation and nondirective interviews. T hey particularly listen to the
language people use to understand the common meaning that people have toward various events or
phenomena. For example, they might argue that you need to experience and observe supportive leader-
ship to effectively study it. Moreover, you can’ t really predict relationships because the specific sinia-
tion shapes reality.4
Most OB scholars identify themselves somewhere between the extreme views of positivism and
interpretivism. Many bel ieve that inductive research should begin w ith an interpretivist angle. We
should consider a new topic with an open mind and search for shared meaning among people in the
situation being studied. In other words, researchers should Jet the participants define reality rather than
Jet the researcher’s preconceived notions shape that reality. This process involves gathering qual itative
information and Jetting this information shape their theory.5 After the theory emerges, researchers shift
to the positivist perspective by quantitatively testing relationships in that theory.
Theory Testing: The Deductive Process
Once a theory has been formed, we shift into the deductive stage of theory building. This process
includes form ing hypotheses, defining and measuring constructs, and testing hypotheses (see Exhibit
A. I). Hypotheses make empirically testable declarations that certain variables and their correspond-
ing measures are related in a specific way proposed by the theory. For instance, to find support for the
directive leadership theory described earlier, we need to form and then test a specific hypothesis from
that theory. One such hypothesis might be, “New employees are more satisfied with supervisors who
exhibit a directive rather than nondirective leadership style.” Hypotheses are indispensable tools of
scientific research, because they provide the vital link between the theory and empirical verification.
DEFINING AND MEASURING CONSTRUCTS
Hypotheses are testable only if we can define and then form measurable indicators of the concepts
stated in those hypotheses. Consider the hypothesis in the previous paragraph about new employees and
directive leadership. To test this hypothesis, we first need to define the concepts, such as “new employ-
ees,” “directive leadership,” and “supervisor.” These are known as const r ucts, because they are abstract
ideas constructed by researchers that can be linked to observable information. Organizational behaviour
researchers developed the construct called directive leadership to help them understand the different
effects that leaders have on followers. We can’t directly see, taste, or smell directive leadership; instead,
we rely on indirect indicators of its existence, such as observing someone giving directions, maintain-
ing clear performance standards, and ensuring that procedures and practices are followed.
As you can see, defining constructs well is very important because these definitions become the
foundation for finding or developing acceptable measures of those constructs. We can’t measure direc-
tive leadership if we have only a vague idea about what this concept means. The better the construct
is defined, the better our chances of finding or developing a good measure of that construct. However,
even with a good definition, constructs can be difficult to measure, because the empirical representa-
tion must capture several elements in the definition. A mea~ure of directive leadership must be able to
identify not only people who give directions, but also those who maintain performance standards and
ensure that procedures are followed.
TESTING HYPOTHESES
The third step in the deductive process is to collect data for the empirical mea~ures of the variables. Fol-
lowing our directive leadership example, we might conduct a formal survey in which new employees
indicate the behaviour of their supervisors and their attitudes toward their supervisors. Alternatively,
we might design an experiment in which people work with someone who applies e ither a directive or

A-3 A p pen dix Theory Building and Systematic Research Methods
a nondirective leadership style. When the data have been collected, we can use various procedures to
statistical ly test our hypotheses.
A major concern in theory building is that some researchers might inadvertently find support for their
theory simply because they use the same information used to form the theory during the inductive stage.
Consequently, the deductive stage must collect new data that are completely independent of the data used
during the inductive stage. For instance, you might decide to test your theory of directive leadership by
studying employees in another organization. Moreover, the inductive process may have relied mainly on
personal observation, wherea~ the deductive process might use survey questionnaires. By studying differe nt
samples and using different mea~urement tools, we minimize the risk of conducting circular research.
Using the Scientific Method
Earlier, we said that the deductive stage of theory building follows the scientific method. The scientifi c
meth od is a systematic, controlled, empirical, and critical investigation of hypothetical propositions
about the presumed relationships among natural phenomena.6 There are several elements to this defi ni-
tion, so let’s look at each one. First, scientific research is systematic and controlled, because research-
ers want to rule out all but one explanation for a set of interrelated events. To rule out alternative
explanations, we need to control them in some way, such a~ by keeping them constant or removi ng
them entirely from the environment.
Second, we say that scientific research is empirical because researchers need to use objective real-
ity–or as close as we can get to it-to test a theory. They measure observable elements of the environ-
ment, such as what a person says or does, rather than relying on their own subjective opinion to draw
conclusions. Moreover, scientific research analyzes these data using acceptable principles of math-
ematics and logic.
Third, scientific research involves critical investigation. T his means that the study’s hypotheses,
data, methods, and results are openly described so that other experts in the field can properly evaluate
the research. It also means that scholars are encouraged to critique and bui ld on previous research. T he
scientific method encourages the refinement and eventual ly the replacement of a particular theory w ith
one that better suits our understanding of the world.
Grounded Theory: An A lternative Approach
The scientifi c method dominates the quantitative approach to systematic research, but another approach,
called gr ounded t heory, dominates research using qualitative methods.7 Grounded theory is a process
of developing knowledge through the constant interplay of data collection, analysis, and theory devel-
opment. It relies mainly on qualitative methods to form categories and variables, analyze relationships
among these concepts, and fo rm a model ba~ed on the observations and analysis. Grounded theory
combines the inductive stages of theory development by cycling back and fo rth between data collec-
tion and analysis to converge on a robust explanatory model. T his ongoi ng rec iprocal process results in
theory that is grounded in the data (thus, the name grounded theory).
Like the scientific method, grounded theory is a systematic and rigorous process of data collection
and analysis. It requires specific steps and documentation, and adopts a positivist view by assumi ng
that the results are general izable to other setti ngs. However, grounded theory also takes an interpretivist
view by building categories and variables from the perceived realities of the subjects rather than from
an assumed universal truth.8 It also recognizes that personal biases are not easily removed from the
research process.
Selected Issues in Organizational Behaviour Research
There are many issues to consider in theory building, particularly when we use the deductive process
to test hypotheses. Some of the more important issues are sampling, causation, and ethical practices in
organizational research.

A ppendix Theory Building and Systematic Research Methods A-4
SAMPLING IN ORGANIZATIONAL RESEARCH
When finding out why things happen in organizations, we typically gather information from a few
sources and then draw conclusions about the larger population. If we survey several employees and
determine that older employees are more loyal to their company, then we would like to generalize this
statement to all older employees in our population, not just those whom we surveyed. Scientific inquiry
generally requires that researchers engage in r epr esentative sampling-that is, sampl ing a population
in such a way that we can extrapolate the result~ of the sample to the larger population.
One factor that influences representativeness is whether the sample is selected in an unbiased way
from the larger population. Let’s suppose that you want to study organizational commitment among
employees in your organization. A casual procedure might result in sampling too few employees from
the head office and too many located elsewhere in the country. If head office employees actually have
higher loyalty than employees located elsewhere, the biased sampling would cause the results to under-
estimate the true level of loyalty among employees in the company. If you repeat the process again
next year but somehow overweight employees from the head office, the results might wrongly suggest
that employees have increased their organizational commitment over the past year. In real ity, the only
change may be the direction of sampl ing bias.
How do we minimize sampl ing bias? The answer is to randomly select the sample. A randomly
drawn sample gives each member of the population an equal probability of being chosen, so there is
less likelihood that a subgroup w ithin that population wi ll dominate the study’s results.
The same princ iple appl ies to random assignment of subjects to groups in experimental designs. If
we want to test the effects of a team development training program, we need to randomly place some
employees in the training group and randomly place others in a group that does not receive training.
Without this random selection, each group might have different types of employees, so we wouldn’t
know whether the training explains the differences between the two groups. Moreover, if employees
respond differently to the training program, we couldn’t be sure that the training program results are
representative of the larger population. Of course, random sampling does not necessarily produce a per-
fectly representative sample, but we do know that it is the best approach to ensure unbiased selection.
The other factor that influences representativeness is sample size. Whenever we select a portion of the
population, there will be some error in our estimate of the population values. The larger the sample, the
less error w ill occur in our estimate. Let’s suppose that you want to find out how employees in a 500-per-
son firm fee l about viewing social media (e.g., Facebook) at work. If you asked 400 of those employees,
the information would provide a very good estimate of how the entire workforce in that organization
feels. If you survey only I 00 employees, the estimate might deviate more from the true population. If you
ask only 10 people, the estimate could be quite different from what al l 500 employees feel.
Notice that sample size goes hand in hand w ith random selection. You must have a sufficiently large
sample size for the principle of randomization to work effectively. In our example of attitudes toward
social media, we would do a poor job of random selection if our sample consisted of only I 0 employees
from the 500-person organization. The reason is that these I 0 people probably wouldn’ t capture the
diversity of employees throughout the organization. In fac t, the more diverse the population, the larger
the sample size should be, to provide adequate representation through random selection.
CAUSATION IN ORGAN IZATIONAL RESEARCH
Theories present notions about relationships among constructs. Often, these propositions suggest
a causal relationship, namely, that one variable has an effect on another variable. When discussing
causation, we refer to variables as being independent or dependent. Independent variables are the
presumed causes of dependent variables, which are the presumed effects. In our earlier example of
directive leadership, the main independent variable (there might be others) would be the supervisor’s
directive or nondirective leadership style, because we presume that it causes the dependent variable
(satisfaction with supervision).
In laboratory experiments (described later), the independent variable is always manipulated by the
experimenter. In our research on directive leadership, we might have subjects (new employees) work

A -5 A ppendix Theory Building and Systematic Research Methods
with supervisors who exhibit directive or nondirective leadership behaviours. If subjects are more sat-
isfied under the directive leaders, we would be able to infer an association between the independent
and dependent variables.
Researchers must satisfy three conditions to provide sufficient evidence of causal ity between two
variables.9 The first condition of causal ity is that the variables are empirically a~sociated w ith each
other. An association exists whenever one measure of a variable changes systematically with a measure
of another variable. This condition of causality is the easiest to satisfy, because there are several well-
known statistical measures of association. A research study might find, for instance, that heterogeneous
groups (in which members come from diverse backgrounds) produce more creative solutions to prob-
lems. This might be apparent because the measure of creativity (such as number of creative solutions
produced within a fixed time) is higher for teams that have a high score on the mea~ure of group het-
erogeneity. They are statistically associated or correlated with each other.
The second condition of causal ity is that the independent variable precedes the dependent variable in
time. Sometimes, this condition is satisfied through simple logic. In our group heterogeneity example,
it doesn’t make sense to say that the number of creative solutions caused the group’s heterogeneity,
because the group’s heterogeneity existed before the group produced the creative solutions. In other
situations, however, the temporal relationship among variables is less clear. One example is the ongo-
ing debate about job satisfaction and organizational commitment. Do companies develop more loyal
employees by increasing their job satisfaction, or do changes in organizational loyalty cause changes in
job satisfaction? Simple logic does not answer these questions; instead, researchers must use sophisti-
cated longitudinal sn1dies to build up evidence of a temporal relationship between these two variables.
The third requirement for evidence of a causal relationship is that the statistical assoc iation between
two variables cannot be explained by a third variable. There are many associations that we quickly
dismiss as being causally related. For example, there is a statistical association between the number of
storks in an area and the birth rate in that area. We know that storks don’t bring babies, so something
else must cause the association between these two variables. The real explanation is that both storks
and birth rates have a higher incidence in rural areas.
In other studies, the third variable effect is less apparent. Many years ago, before pol io vaccines
were available, a study in the United States reported a surprisingly strong association between con-
sumption of a certain soft drink and the incidence of polio. Was polio caused by drinking this pop, or
did people with polio have an unusual craving for this beverage? Neither. Both polio and consumption
of the pop drink were caused by a third variable: climate. There was a higher incidence of polio in the
summer months and in warmer cl imates, and people drink more liquids in these climates. 10 As you can
see from this example, researchers have a difficult time supporting causal inferences, because third
variable effects are sometimes difficult to detect.
ETHICS IN ORGANIZATIONAL RESEARCH
Organizational behaviour researchers need to abide by the ethical standards of the society in which the
research is conducted. One of the most important ethical considerations is the individual subject’s freedom
to participate in the study. For example, it is inappropriate to force employees to fill out a questionnaire
or attend an experimental intervention for research purposes only. Moreover, researchers have an obli-
gation to tell potential subjects about any possible risks inherent in the study so that partic ipants can
make an informed choice about whether to be involved.
Finally, researchers must be careful to protect the privacy of those who participate in the sn1dy. This
usually includes letting people know when they are being studied as well a~ guaranteeing that their
individual information w ill remain confidential (unless publication of identities is otherwise granted).
Researchers maintain anonymity through careful security of data. The research results usually aggre-
gate data in numbers large enough that they do not reveal the opinions or characteristics of any specific
individual. For example, we would report the average absenteeism of employees in a department rather
than state the absence rates of each person. When researchers are sharing data with other researchers, it
is usually necessary to specially code each case so that individual identities are not known.

A ppendix Theory Building and Systematic Research Methods A-6
Research Design Strategies
So far, we have described how to build a theory, including the specific elements of empirically testing
the theory within the standards of scientific inquiry. But what are the different ways to design a research
study so that we get the data necessary to achieve our research objectives? There are many strategies,
but they mainly fall under three headings: laboratory experiments, field surveys, and observational
research.
LABORATORY EXPERIMENTS
A labor atory experiment is any research study in which independent variables and variables outside
the researcher’s main focus of inquiry can be controlled to some extent. Laboratory experiments are
usually located outside the everyday work environment, such as in a classroom, simulation lab, or any
other artificial setting in which the researcher can manipulate the environment. Organizational behaviour
researchers sometimes conduct experiments in the workplace (called field experiments) in which the
independent variable is manipulated. However, researchers have less control over the effect~ of extra-
neous factors in field experiments than they have in laboratory situations.
Advantages of Laboratory Experiments There are many advantages of laboratory experi-
ments. By definition, this research method offers a high degree of control over extraneous variables
that would otherwise confound the relationships being studied. Suppose we wanted to test the effects
of directive leadership on the satisfaction of new employees. One concern might be that employees are
influenced by how much leadership is provided, not just the type of leadership style. An experimental
design would allow us to control how often the supervisor exhibited this style so that this extraneous
variable does not confound the results.
A second advantage of lab studies is that the independent and dependent variables can be developed
more precisely than is possible in a field setting. For example, the researcher can ensure that supervisors
in a lab study apply specific directive or nondirective behaviours, whereas real-life supervisors would
use a more complex mixture of leadership behaviours. By using more precise measures, we are more
certain that we are measuring the intended construct. Thus, if new employees are more satisfied w ith
supervisors in the directive leadership condition, we are more confident that the independent variable
was directive leadership rather than some other leadership style.
A third benefit of laboratory experiments is that the independent variable can be distributed more
evenly among participants. In our directive leadership study, we can ensure that approximately half of
the subjects have a directive supervisor, whereas the other half have a nondirective supervisor. In natural
settings, we might have trouble finding people who have worked with a nondirective leader and, conse-
quently, we couldn’t determine the effects of this condition.
Disadvantages of Laboratory Experiments With these powerful advantages, you might
wonder why laboratory experiments are the least appreciated form of organizational behaviour
research. 11 One obvious limitation of this research method is that it lacks realism, and thus the results
might be different in the real world. One argument is that laboratory experiment subjects are less
involved than their counterparts in an actual work situation. This is sometimes true, although many
lab studies have highly motivated participants. Another criticism is that the extraneous variables con-
trolled in the lab setting might produce a different effect of the independent variable on the dependent
variables. This might also be true, but remember that the experimental design controls variables in
accordance with the theory and its hypotheses. Consequently, this concern is really a critique of the
theory, not the lab sn1dy.
Finally, there is the well-known problem that participants are aware they are being studied and this
causes them to act diffe rently than they normally would. Some participants try to figure out how the
researcher wants them to behave and then deliberately try to act that way. Other participants try to upset
the experiment by doing just the opposite of what they believe the researcher expects. S till others might

A -7 A ppendix Theory Building and Systematic Research Methods
act unnaturally simply because they know they are being observed. Fortunately, experimenters are well
aware of these potential problems and are usually (although not always) successful at disguising the
study’s true intent.
FIELD SURVEYS
Field surveys collect and analyze information in a natural environment-an off ice, a factory, or some
other existing location. The researcher takes a snapshot of reality and tries to determine whether ele-
ments of that situation (including the attitudes and behaviours of people in that situation) are associ-
ated with each other as hypothesized. Everyone does some sort of field research. You might think that
people from some provinces are better drivers than others, so you “test” your theory by looking at the
way people w ith out-of-province licence plates drive. Although your methods of data collection might
not satisfy scientific standards, this is a form of field research because it takes information from a natu-
rally occurring situation.
Advantages a nd Disadvantages of Field Surveys One advantage of field surveys is that
the variables often have a more powerful effect than they would in a laboratory experiment. Consider
the effect of peer pressure on the behaviour of members w ithin the team. In a natural environment,
team members would form very strong cohesive bonds over time, wherea~ a researcher would have dif-
ficulty repl icating this level of cohesiveness and corresponding peer pressure in a lab setting.
Another advantage of field surveys is that the researcher can study many variables simultaneously,
thereby permitting a fu ller test of more complex theories. Ironically, this is also a disadvantage of field
surveys because it is difficult for the researcher to contain his or her scientific inquiry. There is a ten-
dency to shift from deductive hypothesis testing to more inductive exploratory browsing through the
data. If these two activities become mixed together, the researcher can lose sight of the strict covenants
of scientific inquiry.
The main weakness w ith fie ld surveys is that it is very difficult to satisfy the conditions for causal
conclusions. One reason is that the data are usually collected at one point in time, so the researcher
must rely on logic to decide whether the independent variable really preceded the dependent variable.
Contrast this w ith the Jab study in which the researcher can usually be confident that the independent
variable was applied before the dependent variable occurred. Increasingly, organizational behaviour
studies use longitudinal research to provide a better indicator of temporal relations among variables,
but this is still not as precise as the Jab setting. Another reason why causal analysis is difficult in field
surveys is that extraneous variables are not controlled as they are in lab studies. Without this control,
there is a higher chance that a third variable might explain the relationship between the hypothesized
independent and dependent variables.
OBSERVATIONAL RESEARCH
In their study of brainstorming and creativity, Robert Sutton and Andrew Hargadon observed 24 brain-
storming sessions at IDEO, a product design firm in Palo Alto, Cal ifornia. They also attended a dozen
“Monday morning meetings,” conducted 60 semi-structured interviews with IDEO executives and
designers, held hundreds of informal discussions with these people, and read through several dozen
magazine articles about the company. 12
Sutton and Hargadon’s use of observational research and other qual itative methods wa~ quite appro-
priate for their research objective, which was to re-examine the effectiveness of brainstorming beyond
the number of ideas generated. Observational research generates a wealth of descriptive accounts about
the drama of human existence in organizations. It is a useful vehicle for learning about the complex
dynamics of people and their activities, such as brainstorming. (Sutton and Hargadon’s study is cited
in Chapter 8 on team dynamics.)
Participant observation takes the observation method one step further by having the observer take
part in the organization’s activities. This experience gives the researcher a fu ller understanding of the
activities compared to just watching others participate in those activities.

Appendix Theory Building and Systematic Research Methods A-8
In spite of its intuitive appeal, observational research has a number of weaknesses. The main problem
is that the observer is subject to the perceptual screening and organizing biases that we discuss in
Chapter 3 of this textbook. There is a tendency to overlook the routine aspects of organizational life,
even though they may prove to be the most important data for research purposes. Instead, observers
tend to focus on unusual information, such as activities that deviate from what the observer expects.
Because observational research usually records only what the observer notices, valuable information
is often lost.
Another concern w ith the observation method is that the researcher’s presence and involvement may
influence the people whom he or she is studying. This can be a problem in short-term observations,
but in the long term people tend to return to their usual behaviour patterns. With ongoing observations,
such as Sutton and Hargadon’s study of brainstorming sessions at IDEO, employees eventually forget
that they are being studied.
Finally, observation is usually a qual itative process, so it is more difficult to empirically test hypoth-
eses w ith the data. Instead, observational research provides r ich information for the inductive stages of
theory building. It helps us to form ideas about the way things work in organizations. We begin to see
relationships that lay the fou ndation for new perspectives and theory. We must not confuse this inductive
process of theory building w ith the deductive process of theory testing.

Glossary
ability The natural aptitudes and learned capa·
bilities required to succe.’isful1 y complete a task.
achievement-nurturing orientation A
c ross-cu1tur.tl value describing the degree to
which people in a culture empha..’iize competitive
versus cooperative relations with other people.
action research A problem-focused change
prooess that combines action orientation (changing
attitude.’i and behaviour) and research orientation
(testing theory through data collection and analysis).
adaptive culture An organizational culture in
which employees are receptive to change, includ·
ing the ongoing alignment o f the organization to
its environment and continuous improvement of
internal processes.
affective organizational commitment An
individ ual•s emotional auachment to. involve·
ment in. and identification with an organization.
agreeableness A personality dimension
describing people who are trusting, helpful. good·
natured. considerate, tolerant. selfle.’is, generous.
and nexible.
anchoring and adjustment heuristic A
natural tendency for people to be innuenced by
an initial anchor point such that they do not suf·
ficiently move away from that point a.’i new in for·
mation is provided.
appreciative inquiry An organizational
change s trategy that directs the group’s attention
av.oay from it’i own problems and focuses par·
ticipanL~ on the group’s potential and positive
e lement’i.
artifacts The observable symbols and signs of
an organization’s culture.
attitudes The cluster of beliefs. a.•se.ssed feel ·
ings. and behavioural intentions toward~ a per·
son, object, or event (called an a(fifltde objecl).
attraction-selection-attrition (ASA) theory
A theory which s tates that organizations have a
natural tendency to auract. select. and retain peo·
pie with values and personality characte ristics
that are consistent with the organization’s char·
acter, resulting in a more homogeneous organi·
zation and a stronger culture.
attribution process The perceptual process of
deciding whether an observed behaviour or event
is caused largely by internal or external factors.
authentic leadership The view that effec·
ti ve leaders need to be aware of. feel comfortable
with. and act consistently with their values. per·
sonality, and self-concept
availability heuristic A natural tendency to
assign higher probabilities to obj ect’i or events
that are easier to recall from memory. even though
ease of recaJJ is also affected by ncnprobability
factors (e.g .• emotional response. recent event’i).
best alternative to a negotiated agreement
(BATNA) The best outcome you might achieve
Gl -1
through some other course o f action if yo u aban·
don the current negotiation.
bicuttura l audit A process of diagnosing
cultur.tl relations between companies and deter·
mining the extent to which cuhur.tl cla’ihe.’i will
likely occur.
bounded rationality The view that people are
OOunded in their decision-making capabilities.
including acress to limited infom1ation. limited
infom1ation proce.’iSing, and tendency towards sati.Y
ficing rather than maximizing when making choices.
brainstorming A freewheeling. face-to-face
meeting where team members aren’t allowed to
criticize but are encour.tged to speak free ly. gen·
er.tte as many ideas a’i possible, and build on the
ideas of others.
brainwriting A V’.triation of brainstorming
whereby participants write (rather than speak
about) and share their ideas.
Brooks’s law lbe principle that adding more
people to a late software project only makes it later.
categorical thinking Organizing people and
object’i into preconceived categories that are
stored in our long-te rm memory.
centra lity A contingency o f power pertain·
ing to the degree and nature o f interdependence
between the power holder and others.
centralization The degree to which formal
decision-making authori ty is held by a small
group of people, typically those a t the to p of the
organizational hierarchy.
ceremonies Planned displays of organiza·
tional culture. conducted speci fically for the ben·
efit o f an audience.
charisma A personal characteristic or special
“gift .. that serve.’i a’i a form of interpersonal attrac-
tion and referent power over others.
coalition A group that attempt’i to influ·
ence people oultrue-
lure that overlays t\\”0 !1-tructurcs (such a~ a geo-
graphic divisional and a product structure) in
order to le\’cragc the benefits of both.
mechanistic structure An organizational
structure with a narrow span of control and a
high degree of formaJiunion and centrnli7.ation.
media richness A medium’s data-currying
capacity.llmt is.l11e volume and v-Jricry of infomla·
tio n that can be tmn~mittcd during ‘l :-.pccilic time.
mental imagery The process of ment:tlly )li”JCtis-
ing a task and vL’\.ualizing its successful completion.
m e ntal models Knowledge structures that
we develop to describe. explain. and predict the
world around us.
m indfulness A pc~on’!~o receptive and impar·
tial attention to and awareness of the pres ent
situation as wcU as to one’s 0\\’ n thoughls and
emotions in that moment.
moral lnten.slty The degree to which an iirooment.
internal subsystems configuration fo.r high perfor·
m.ance. emphasis on organi7.ational lf!:lming. and
ability to satisfy the need. of key stokcholders.
organic structure An orgnnizat.ional struc·
turc with a wide span of control. little formaliu-
tion. and dcccnlr.lli:t.cd decision malcing.
organizational behaviour (OB) The ins employee hch>\’·
iour in terms of the antcccdcnt conditions and
conscqucnca of !hot behaviour.
organizational clt.lzenshlp behaviours
(OCBs) Vorioo> forms of cooperation and
helpfulness to other. that suppon the organiza-
tion’s social and p>ychological context.
organizational cu~ure The value• and
assumptions shared within an organi7.:ttion.
organizational effectiveness A broad con-
cept represented by scvcr-.al perspectives. includ·
ing the organizntion’~ lit w ith the external
environment. internal ~ubsys1cms configuration
for high pcrfonmmcc. emphasis on organizational
learning. and ability to satisfy the need~ of key
stakeholders.
organiza tional learning A perspecti ve which
holds that organizational cffccti\-eness depends
on the organiLation’s capacity to acquire. share,
usc. and store valuable knowledge.
organiza tional politics Behaviours that oth-
ers percci”C as sclf· M:rving tactic~ at the ex pen.~
of other people and possibly the organization.
organizational socialization The proccs.< by .. t.ich individuals learn the values. expected hcha"iours. and social ~ ledge ncces.ury to
assume their roles in the orga.niu1ton..
organizational strategy The way the orga-
nization positions itself m its setting in relation
to its stakeholders. gh-.:n the organization’s
resources. cap;t.biJities . and mi~sion.
organizational structure The division of
labour as well a. the patterns of coordination,
communication. wortnow. and forma1 power
that direct organiz.ational activities.
orga nizations Groups of people who wort
interdependently toward •omc purpose.
parallel learning structures Highly partici-
pative armngcmcnb composed of people from
most levels or the organization who follow the
action research model to produce meaningful
organizational change.
p a tlt-goa l le a dersh ip th eory A leadership
theory stating that effecLivc leaders choose the
most appropriate leadership style(s). depend-
ing on the cmplo)’CC tmd situation. 10 influence
employee expectations ttbout de.sircd results and
their positive outcom~.
perc.eptlon The procc.s of receiving informotion
about and making sense of the world 3t0Und u.<. persona lity The relath'Ciy enduring pattern of thoughts. emotion>. and bcho”iours that chor-
actcrize a person. along with the psychological
processes behind those characteristic<. Glossary persuasion The usc of facts. logical argu· ments. and emotional appeals to change another person's beliefs and attitudes. usually for the pur- pose of c.hanging the person's behaviour. positive organizational behaviour A per- spective of organizaaional behaviour that focuses on building posir:ive qualities and traits within individuals or instirutions as opposed to focusing on what is wrong with them. positivism A •·icw beld in quantitati>‘e
research in whieh n:3lity exists independent of
the perceptions and interpretations of people.
Power distance A cross·cultural value
dc.’icribing the degree to which people in a c ulture
accept unequal distribution of power in a society.
power The capacity of a person. temn, or
organization to influence Olhcrs.
power The capacity of a person. team. or
organization to influence Olhcn.
primacy effect A pen:eptu31 error in which
we quickly form an opinion of people based on
the first information we rccciYc about them.
procedural Justice Perceived fai rness of the
procedures used to decide the distribution of
resources.
process losses Resources (including time
and eneJID’) expended toward team de>-eiopment
and maintenance rather than the task.
production blodclng A time constraint in team
decision malcing due to the procedural require-
ment that only one person may speak at a time.
profit·sharing plan A reward system that
pays bonuses to e mployee,\ on the basis o f the
previous year’s level or oorpomtc profit’i.
profit-sharing p lans A person’s inherent
motivation to have a positive self-concept (and
to ha>-e od>ers perceive llimlber fa>-ourably). snch
as being competent. aur>c:u>-.:. Judy. ethic31. and
important.
prospect theory effect A natural tendency to
fee l more dissatisfaction from losing a particular
amount than satisfaction from gaining an equal
amount
psychological contract The individual’s
beliefs about the terms and conditions of a recip-
roca1 exchange agr«mcnt bct\\”CeD that person
and another party (typically an emplo)””)-
psyehological harassment Repeated and
hostile or unwanted conduct. \’Crbal comments.
actions. or gestures 1hat affect an employee’s dig·
nity or psychological or physical integrity and
that result in a harmful work environme nt for the
e mployee.
rational choice paradigm The view in deci·
sion making that people should~and typically
do-use logic and all a\’llilable information to
choose the altemati>·e with the highest >’lllue.
realistic job preview (!UP) A method of
imprtAi.ng OP”dlJlizmionaJ soc::iali:z.ation in whicb
job applicants are gi>-.:n a balance of positi>’e
and negative information about the job and worl< context. reality shock The strcs. that resu)L, w hen employees perceive d iscrepancies between their pre-employment expectations and on-the-job reality. recency effect A perceptual error in which the most recent information dominates our per· ccption of o thers. referent power The capacity to influence others on the basis of an identification with and n:spcct for the I""'"" bolder. refreezing The latter part of the change pro- cess. in which systems and structures ~ intro- duced that reinforce and maintain the desired bchaviou~. relationship capital The value derived fro m an organization's relationships with customers. suppliers. and others. relationship conflict A type of conflict in which people focus on characteristics of other individu31s. rather than on the issues. as the source of conflict. representative sampling The process of samphng a population in such a v.-ay th31 one can cxtrnpolate the results of tha t sample to the larger population. representativeness heuristic A natural 1endcncy to evaluate probabilities of c,·enl'i o r ob~t> by the degree to which they resemble (are
representative of) other events or objects rather
than on ohjccti>-e probability information.
reward power A person’s ability to cootrol
the allocation of rewards v31ued by others and to
rCn\0\’C negative sanctions.
rituals The programmed routines of daily
organizational life that dramatize the organiz.a·
cion’s culture.
role ~reeptlons The degree to which a per-
son understands the job duties assigned to or
expected of him or her.
role A set of behaviours that people are
upected to perform because they hold certain
positions in a team and organiza1ion.
satisficing Selecting an 31temat.ive that is sat-
isfactory or “good enoug h,” rather thtm the alte r-
native w ith the highes t value (maximization).
scenario planning A systematic process of
thinking abou t alternative fucures and what the
organization should do to anticipate and react to
thtxe environments.
scientific management The practice of
systcm:atically partitioning work into its small·
est elements and standardizing t:ts ks to achien~
maximum efficiency.
scientific method A set of principles and proce-
dure.~ that help researchers to systematically under·
stand prcviO\l~ly unexplained events and condition.’i.
selective attention The prcceS< of attending to some infonnation recei\·ed by our senses and ignoring other information. self-concept An indi>;dual’< frtcacy A person’s belief that he or she
ha.\ the ability. motivation. correct role percep-
tion.’\, and favour.1b lc situation to complete a task
successfully.
self-enhancement A person’s inherem moti –
vation to huve 3 positi ve self.-concep1 (and to
ha>·e others perceive him/her favourably). such
as being competenL attracti>-e. Juoky. ethical. and
imponant.
self-fulfilling prophecy The perceptual pro-
cess in which our expectations about another
person cause that person to act more con.\:i’\tcntly
w ith those expectations.
self-leadership The process of infl uencing
oneself to cstublbh the self-direction and self-
motivation needed to perform a task.
self-reinforcement Reinforcement that OCCW’S
when an employee has control”‘”” a reinf”””” but
doesn’ t ·ta~;e’ it W>til completing a self-set go31.
self-serving bias The tendency to attribute
our fa,’Ollrnblc outcomes to internal factor’$ and
our fuilures to external factors.
self-talk The process of talking to ourselves
about our own thoughL’i or actions.
self-verification A person ‘sinherentmot.ivation
to confirm and maintain hi.slber existing
self-concept.
servant leadel’$hlp The ,.;ew that 1<3ders sen-e foll""-.:rs. rather than vice '"rsa: lead- ers belp empiO)-.:cs fulfil their need' and an: coaches. stewards. and facititators of employee performance. service profit chain model A theory explain- ing how e mployees' job satis faction influences company profi tability indirectly through service quality. customer loy3lty. and related factors. share options A reward system that gi•·cs cmpiO)=s the right to purchase company shan:s at a future date at a predctennined price. shared Jeadel'$hlp The view that leade"hip is a role. not a position assigned to one person: consequently. people w ithin the team and organi- zation lead each other. situational leadership theory (SLn A com· mercially popular but poorly supported leader· ship model stating that effecti>-e leaders vary
their style (telling. selling. participating. delcg>t·
ing) with the mou>-ation and ability of followers.
skill varlttty The extent to which employees
must usc diffen:nt skills and talents to perform
tasb within their jobs.
social capital The knowledge and o ther
resources available to people or social units
(teams, o rganizations) from a durable network
that connects them to others.
social cognitive theory A theory tll>t
explains how learning and motivation occur by
obsen’ing ond modelling od>ers as w”ll as by
anticipating the consequences of our beh3\’iour.
social Identity theory A theory stating thot
people define thcmsci•·cs by the groups to which
they belong or have an c motionaJ attachment.
social loafing T he problem that occurs when
people excn less effort (and usu31Jy perform ut u

GL-5 Glossary
lower level) when wo rking in teams than when
working alone.
social networks Social structures of individu·
als or social uniL~ that are connected to each other
through one or more fonns of interdependence.
span of control The number of people directly
reporting to the next level in the hierarchy.
stakeholders Individuals. groups, and other
entities that affect, or are affected by, the organi·
zation•s obj ectives and actions.
stereotype threat An i ndividual’s concern
about confirming a negative stereotype about his
or her group.
stereotyping The process of a..’isigning traits
to people based on their membership in a social
category.
strengths-based coaching A positive orga-
nizational behaviour approach to coaching and
feedback that focuses on building and lever.tg·
ing the employee’s strengths rather than trying to
correct his or her weaknesses.
stress An adaptive response to a situation that
is perceived a’i challenging or threatening to the
person•s well-being.
stressors Environmen tal conditions that place
a physical or emotional demand on the person.
structura l capital Kno\\iedge e mbedded in
an organization’s systems and structures.
structu ral hole An area between t\.\’0 or more
dense social network area.’i that lacks network tie.’i.
subjective expected utility The probability
(expectancy) of satisfaction (utility) resulting
from choosing a specific alte rnative in a decision.
substitutability A contingency of power per-
taining to the availability of alternatives.
superordinate goals Goals that the conflict·
ing parties value and whose attainment requires
the j oint resources and effort of those parties.
surface-level d iversity The observable
demographic or physiological diffe rences in peo·
pie. such a.’i their race, ethnicity. gender. age. and
physical disabilities.
task conflict A type of conflict in which people
focu.’i their disctL’ision around the issue while show·
ing respect for people with other points of view.
task identity The degree to which a job
requires completion of a whole or an identifiable
piece of wo rk.
task interdependence T he extent to which
e mployees must share materials. information. or
expertise with others in order to perfonn their
jobs.
task performance The individual’s voluntary
goal-directed behaviors that contribu te to organi·
zation.al obj ectives
task significance The degree to which a job
ha.’i a subs tantial impact on the organization and/
or larger society.
taskwork beh aviour EfforL• devoted to
underst anding the task requi rement’i. discover·
ing the ” rule.•” by which the tasks are to be per-
formed. establishing the patterns of inter.tction
with equipment., exchanging task-related info r·
mation. developing team solutions to problems.
and so forth.
team boundary spanning Team actions that
establish or enhance linkages and manage inter·
actions with parties in the external environment.
team b uilding Groups of two or more people
who interact and influence each other. are m utu•
ally accountable fo r achieving common goals
associated with organizational objectives, and
perceive themselves as a social entity within an
organization.
team building A process that consists o f fo r·
mal activities intended to improve the develop-
ment and functioning o f a work team.
team cohesion The degree of attraction peo-
ple feel toward the tean1 and their motivation to
remain members.
team efficacy The collective belief among
team members of the team’s capability to suc-
cessfulJ y complete a ta.’ik.
team-based structu re An organizational
structure built around self·directed teams that
complete an entire piece of wo rk.
teams Groups of two or more people who
interact and infl uence each other. are m utu·
ally accountable fo r achieving common goals
associated with organizational objectives, and
perceive themselves as a social entity within an
organization.
teamwork behaviour Activities that are
devoted to enhancing the quality of the inte rac-
tions, interdependencie.’i, cooperation.. and coor·
dination of teams.
telework An arrangement whereby, supported
by information technology. employees work
from home or other nonwork setting one or more
\\’Ork days per month r.tther than commute to the
office.
theory A general set of propositions that
describes inte rrelationships among several
concept~.
third-party con flict resolution Any attempt
by a relatively neutral person to help conflicting
partie.’i resolve their difference.’i.
transformational leadersh ip A leadership
per.;pecti\’e that explain.’ how leader.; change
teams or organizations by creating. communicat·
ing. and modelling a vision for the organization or
V.’Ork unit and inspiring employees to strive for that
vL’iion.
trust Positive expectations one person has
toward another person or group in situations
involving risk.
uncertainty avoidance Across·c ul tural v-alue
describing the degree to which people in a cui·
ture toler.tte ambiguity (low uncertainty avoid·
ance) or feel threatened by ambiguity and
uncertainty (high uncertainty avoidance).
unfreezing The firs t part of the organizational
change process. in which the change agent pro-
duces disequilibrium between the driving and
restr.Uning forces.
upward appeal A type of influence in which
someone with highe r authori ty or expertise is
called on (in reality o r symbolically) to support
the influencer’s position.
values Relatively s table evaluative beliefs that
guide a person•s prefe rences for outcomes or
courses of action in a variety of s ituations.
virtual teams Teams whose members operate
across space, time. and organizational boundar·
ies and are linked thro ugh information technolo-
gies to achieve organizational tasks .
wikis Collabor.ttive web spaces whe re anyone
in a group can write, edit, or remove material
from the website .
win-lose orientation The belief that con·
meting parties are dr.twing from a fixed pie, so
the more one party receive.’i, the less the othe r
party will receive.
win-win o rientation The belief that confli ct·
ing parties will find a m utually beneficial solu·
tion to their disagreement.
work-life balance The degree to which a
person minimizes conflict between V.’Ork and
nonwo rk demands.
workaholism An uncontrollable work moti·
vation, whe re people constan tly think abo ut
work and have low work enj oyment.

Endnotes
CHAPTER 1
I. A Bryant … Powering a Team with a ·Trust
Banery ·:·New York Times. 24 April 2016. 2:
J. Cowan. ·111e Canadian Business Interview:
Harley finkelstein: · Canadian Bus;ues.f. M arch
20 16. 57- 5&: E. De Vila . .. A Workplace Wi ki Helps
Teams Get to Know Each Other:· Finmu:ial Times
( Londo” ). 8 May 2016: B. Davis. ··Shopify Plus
Acquires Waterloo’s Bolunade:· \Va1erloo Region
Record. 4 October 20 J6. CJ: .. Help Us Redefine
Commerce:· Careers (a! Sh<>pify) (Onawa: Shopify.
20 17). https://www . .shopify.com/careers (accessed
25 February 20 I 7).
2. M. Warner. “Organizational Behavior Revisited:·
Human Relmions 47 (Ocrober 1994): I 15 1-1 166:
R. Westwood and S . Clegg. ··The Discourse of
Organization Studies: Dissensus. Politks. and
Paradigms:· in Debating Orgauiz.atiou: Poim-
CmmterpoiUI in Organiuuion Studies. ed. R.
Westwood and S. Clegg (Malden. MA: Blackwood.
2003). 1-42.
3. R.N. Stern and S.R. Barley. “‘Organization.~ as
Social Systems: Organization Theory·s Neglected
Mandate:· Administrative Scienct! Quarterly 4 1
( 1996): 146-62: D. Katz and R.L. Kahn. Tlte Social
P.f)t:hology of Organi:tu;ons (New York: Wiley.
I 966). Chap. 2.
4 . P.C. Newman. Company of Adwmwrers
(Toronto. ON: Viking. I 985): J. Micklethwait and
A. Wooldridge. Tht! C’mnpany: A Short H;swry of
a Rew>Jra;onary ldt!a (New York: Random House.
2003): T. Lawson. ··The Nature of the Finn and
Peculiarities of the Corporation:· Cambridge Jour·
nal of Economics 39. no. I (2015): 1-32.
5. B. Schlender. ‘”The Three Faces of Steve:· For·
lime. 9 November 1998. 96-10 1.
6. M. Boucher … DetajJs Emerge on Kepler Com-
munic–ations and Telesat Small Satellite Constel·
J atio~L<:· SpaceRefCanada. 18 November 2016: T. Soper . .. Startup Spotlight: Kepler Is Buildi ng Communications lnfra.~tructure for the 'New Space Economy. ··· Geek\Vire, 12 May 2016: C. Henry. .. Kepler Communications: A Toronto Startup's Quest to Connect All 1llings. Everywhere:· Spau. News. 13 February20 17: E.. Jack.wn .... CeiJphone Towers in Space·: Stanup Kepler Communications Plans First Canadian Nanosatellite for Telecom:· Nmimwl Post, 16 February 2017. 7. "A Field Is Bon1 ... Han:ard Business Review 86. no. 7/S (2008): 164: P.R. Lawrence. ''The Key Job Design Problem L~ Still Taylorism:· Journal ofOrgani:.mimwl Behavior 31 . no. 213 (20 10): 4 I 2-2 I : L. W. Poner and B. Schneider. ·'What Wa.<. What Is. and What May Be in Op/OB:· Annual Review ofOrganiuuimwl Psychology and Organi· luiimlllry Power of Ordi11ary Men
and Women. lnternatjonal Studies in Social History
(New York: Berghahn Books. 20 12).
9. W.L.M. Ki ng. Industry and Humtmiry: A Study
in Ihe Principles Underlying Jndu.sirial Rt!construC·
tion (Toronto. ON: Thoma.< Allen. I 9 18): H.C. Metc.aJf and L. Urwick. Dynamic Adm;ni.firaiiOII: Tlte Co/lec1ed Papers of Mary Parker Foil ell (New York: Harper & Brothers. 1940): J. Smith. ·1'he Enduring Legacy of Elton Mayo:· Human Relmions 51. no. 3 ( 1998): 221-249: E. o ·connor . .. Mind· ing the Workers: T he Meaning of. ·Human· and ' Human Relations· in E-l ton Mayo." Organization 6. no. 2 (May 1999): 22:>-246: K. Hallahan. “W.L.
Mackenzie King: Rockefeller’s ·Other’ Public
Relatjons Counselor in Colorado:· Public RelaJhms
Rniew 29. no. 4 (2003): 40 1-4 14.
10. The extent to which OB influences career
succes.~ depends on course pedagogy as well as the
prac.tical value of the OB conceplS covered in the
course. In fact. OB scholars have an ongoing debate
about the practical re leva1lCe of OB research. See.
for example: J.P. Wals h et al.. .. On the Relationship
between Research and Practice: Debate and Reflec·
lions:· Joumal ofManagemem lttqu;ry 16. no. 2
(2007): 128-54: R. Gulati . “Tent Poles. Tribalism.
and Boundary Spanning: The Rigor.Relevance
Debate in Management Research:· Academy of
Management l<>umal 50. no. 4 (2007): 775-82: J.
Pearce and L. Huang. “‘The Decreasing Value of
Our Research to Managemem Education:· Academy
of Managemem Learning & Educaihm 11. no. 2
(2012): 247-62: J.M. Banunek and S.L. Rynes.
“Academics and Practitioners Are Alike and
Unlike: The Paradoxe.~ of Ac–ademic-Practi tioner
Relatjonshjps:· Journal of ManagemeUI 40. no. 5
(2014): I 181-201: N. Butler. H. Delaney. and
S. Spoelstra. “Problematizing ·Relevance· in the
Busine.~~ School: The Case of Leadership Studie.~:·
Brii;.flt Journal of Managemem26. no. 4 (2015):
731-44.
I I. P.R. Lawrence and N. Nohria. Drhen: How
Human Nature Shapes Our Choices (San Fran.
cisco: Jossey.Bass. 2002).
12. S. L. Ryne.~ et al .. “Behavioral Coursework in
Busine.~~ Education: Growing Evidence of a Legiti·
macy Crisis:· Academy of Mtmagemem Learni11g
& Educati<>ll 2. no. 3 (2003): 269-83: R.P. Singh
and A.G. Schick. “Organizational Beha,rior: Where
Does It Fit in Today·s Management Cur riculum?:·
Journal of Educm;onfor Business 82. no. 6 (2007):
349-56.
13. R. L. Priem and J. Rosenstein. “L~ Organization
T heory ObviolL~ to Practhjoners? A Test of One
E.~abljshed Theory … Organiz.ation Sdence II .
no. 5 (2000): 509-24. MBA students in the study
performed much better than the other two groups.
14. R.S. Rubin and E. C. Dierdorff. “‘How
Relevant Is the MBA? Assessing the Alignment
of Required CurTicula and Required Managerial
Competencies … Academy of Managemem Learn·
ing & Educati<>ll 8. no. 2 (2009): 20&-24: Y.
Baruch and 0. Lavi.Steiner. “The Career Impact
of Management Education from an Average.
Ranked University: Human Capilal Perspective:·
Career Derelopmeni ltllernmimwl20. no. 3
(20 15): 21&-37.
15. M.S. Myers. E”·ery Employee a Manager
(New York: McGraw Hill. 1970).
16. M.A. West et al …. Reducing Patjem Mortality
in Hospitals: The Role of Human Resource
Management. .. Joumal of Organizational
Behavi<>r27. no. 7 (2006): 983- 1002: A. Edma~><. "The Link between Job Satisfaction and Firm VaJ ue. with Implications for Corporate Social Re.~ponsi bility."Academy of Managemem Per.fpec. ti•·es 26. no. 4 (20 12): 1- 19: A.M. Baloch. 1'.0. Salge. and E.P. Piening ... Untangling the Relation. ship between HRM and Hospital Perfonnance: T he Mediating Role of Attiludjnal and Behavioural HR Outcome.~:· Tlte lmernat;onal Joumal of Human Resource Managemem 24. no. 16 (20 13): 3038-6 I : J.S. Fulmer and R.E. Ployharl .. ·our Most Important Asset': A Multidisciplinary/ Multilevel Review of Human Capital VaJuation for Research and Practice ... JounUll of Manage. mew40. no. I (2014): 16 1-92: D.C. Hantbrick and T.J. Quigley ... Toward More Accurate Contexrualization of the CEO Effect on Finn Performance:· Sn'iltegic ManagemeUI Journal35. no. 4 (20 14): 473-9 1. 17. J .T. Comeault and D. Wheeler . .. Human Capitai-Ba~d investment Crileria for Total Share-. holder Rerurns:· in Peus;ons a I Work: Socially Re.fpons;blt! Jm·e.Hmem of Ut~iOII·Based Pe11simt Funds, ed. J. Quarter. I. Carmichael. and S. Ryan (Toronto: University of l oronto Press. 2008): R. Barker et aL "Can Company-Fund Manager Meet- ings Convey lnfonnatjonal Benefits? Exploring the Rationalisation of Equily Investment Decision Making by UK fu nd Managers:· Accounting. Organiwimu and !i<>ciety 37. no. 4 (20 12):
207-22: S . Abhayawansa. M. Aleksanyan. and J.
Baht~vanoglou. “The Use of Intellectual Capital
information by Sell-Side Analyst~ in Company
VaJ uation … Accowuing and Business Research 45.
no. 3 (20 15): 279-306. The Canadian investment
manager’s list is described in: P. Hodson. “5
Qualitjes to Look for in Stocks:· Nm;onal Pos1. 15
November 20 I 3.
18. J. Ratner. “Taking a Global View on Investing
in Canadian Stoc.ks:· NaiimUll Post. 28 July 20 15:
··20 15 BC CEO Awards: Edward Wrighl .. Business
;, Vancouver. 13 October 2015.
19. M.L Tushman and P. Anderson. “Tech·
nological Discontinuitjes and Organizatjonal
Environment~:· Adm;nisiraii\’e Science Quar.
terly 3 I. no. 3 (I 986): 439-65: I. McNeil. ed .. An
Encyclopedia ofihe History• ofTechnoh>gy (New
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Ma11agemem 36. no. I (20 16): IJ J.-25.
21. 20IIt CEO Sun:ey.Canadianlnsighu: What’s
on 1he MiudsofCmwdian CEO.if?. (Toronto: PwC
Canada. 16 February 20 1 7).
22. Microsofl Sun:q on Euterpri.ft! Soda/ Use
and Perceprions (Seattle. WA: Microsoft. 29 May
20 13): Spherion. Emergi11g W<>rkforc. Swdy.
(Atlanta: Spherion. 20 15): CareerBuilder. “Number
of Employers Using Social Media to Screen
Candidates Ha~ lncrea.~d 500 Percent over the Last
Dec:ade:· News release (Chic:ago: CareerBuilder. 28
April2016): Randstad. Rand.fwd Workmou;ror 4fla
Quarrer 2016. (Amsterdam: Randstad Holding nv.
December 20 I 6).
23. Y. H. Ferguson and R.W. Mansbach. Global-
i:Piiou: Tht! Rt!tum of Bordt!rs 10 a Bordt!rless
\Vor/d(Abingdon. UK: Routledge. 2012). The
early history of globalization is disc.u.~~d in K.
Moore and D.C. Lewis. 71te Orig;us ofG/oba/iza.
tion (Hoboken.. NJ: Taylor and Francis. 2009). five
views of globalization and the effect~ of technology
on globalization are discussed in R. Kwon … What
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ing Five Approaches to Globalization. 1820-2007:·
lmernat;oual Journal ofCmnparative Sociology 54.
no. 5/6 (20 13): 391-419.
24. 111e ongoing debate regarding the advamages
and disadvantages of globalization are discussed in
Guillen. “Is Globalization Civilizing. De.~ructive
or .Feebler·: D. Doane. “Can Globalization Be
Fixed?:· Busint!SS StrtJit!gy R~iew 13. no. 2 (2002):
51 – 58: J. Bhagwati./11 Defenst!ofG/obaliwrion
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phia: Whanon School Publishing. 2005).
26. T.A. Beauregard mxl L.C. Henry . .. -Making the
Link between Woa·k-Life Balance Prac.tice.~ and
Organizational Performance:· Human Rt!source
Mtmagemt!ni Review 19. no. I (2009): 9-22: M.J.
Sirgy and D.-J. Lee. ··Work-Life Balance: An
Integrative Review: · Applit!d Researd1 ;n Qualiry
of Life (20 I 7): 1-26. The systematic foundations of
work·lifeconflict are discussed in: J.C. Williams.
J.L. Berdahl. and J.A. Vandello. “Beyond Work-
Life ••Jntegration··:· Annual R~iew of Psychology
67. no. I (20 16): 51!>-39.
27. Jpsos. ··Global Srudy of Online Employees
Shows One in Five (I 7%) Work from Elsewhere:·
News relea~ for lp.ws (New Yoa·k: lpsos. 23
January 20 12): U.S. Bureau of Labor Statistics.
“American lime Use Survey-20 14 Results:· news
release for U.S. Department of Labor (Wa.~hington.
DC. J une 24. 2015): “Canadians Rank lOth in
Schedule Satisfaction.·· News release for Randslad
Canada (Toronto: CNW. 2 1 June 2016): Flexible
\York Arrangt!mtllls: \Vhm Was Heart!. Employ-
ment and Social Development Canada (Ottawa:
Government of Canada. September 201 6).
28. E.J. Hill et al.. “Workplace J-1exibility. Work
Hours. and Work- Life Conflict: Finding an
Extra Day or Two:· Journal of Family Psydwf.
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R. Mekkaoui. .. Beyond Work-fmnily Balance:
Are Family-Friendly Organizations More
Anractive?:· Rt!lations lndusfriellt!slllldu.Hrial
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and J .L. Gla~~- “‘The Hard Truth about Telecom-
muting:· Momhly LAbor Rt!view 135. no. 6 (2012):
3&-45: B. H. Martin and R. MacDonnell. “Is Tele-
work Effective for Organizations?:· Managemt!ni
Resean:h Review 35. no. 7 (2012): 602- 16: T.D.
Allen. T. D. Golden. and K.M. Shockley. “How
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of Our Scientific Findings:· Psychological Sdt!nc~
in the Public llllerest 16. no. 2 (2015): 40-68: N.
Bloom el al …. Does Woa-king from Home Work?
Evidence from a Chinese Experiment:· 71t e
Quanerly Joumal of Ecmwmks 130. no. I
(20 15): 165-2 18: R.S. Gajendran. D.A. Harrison.
and K. Delaney-Kiinger … Are Telecommuters
Remotely Good Citizens? Unpac.king Telecom-
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Marowits … More Employees Working from Home
in Shift to ·Telecommuting …. Toronro Swr. 23
May 2016.
29. D. Meinen … Make Telecommuting Pay Off:·
HR Magaz;ne. June 2011.33: M. McQuigge.
“A Panacea for Some. Working from Home StiU
a Tough Sell for Some Employers:· Canad;an
Press (Toronto). June 26. 20 13: Aetna. ··Telework-
ing on the Rise. Saving Co.~ts aaxlthe Environ-
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R.J. 1’bomp.S ON£9. no. 7 (2014): ei0292J: D.
Karis. D. Wildman. and A. Mal’~ … lmpro\•ing
Remote Collaboration with Video Conferenc.ing
and Video Portals:· Human-Compu1er lnteroc-
tioll3 1. no. I (2016): 1-58.
33. CSL Limited. · Providing a Positive Working
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work-environmenthtm (accessed 14 January 20 15).
34. D.A. Harrison et aL .. Time. Teams. and Ta.~k
Performance: Changing Effects of Surface– and
Deep-Level Diversity on Group Functioning:·
Actulemy of Managemeltl Jourual45. no. 5 (2002):
1029-46: W.J. Ca.ieu et al.. “A
Review and Integration of Temn Composition
Models: Moving toward a Dynamic aaxl Temporal
.Frmnework:· Journal of Managemeur 40. no. 1
(2014): 130-60.
35. Statistic.~ Canada … immigration and Ethno-
cultural Diversity in Canada:· National Household
Survey. 20 11 (Ottawa. ON: Government of Canada.
2013).
36. M.H. Davis. S. Capobianco. and L.A. Kraus.
··Gender Differences in Re.~ponding to Conflict
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500- 14: J.L. Locke. Duds and Dut!ts: \Vhy M e11
tmd Womt!u Talk So Differemly (New York:
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P. Conway. and B. Gawronski. ··Gender Difference.~
in Responses to Moral Dilemmas: A Process Disso-
ciation Analysis:· PersonaUty and Social Psycho/.
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37. Statistics Canada … Labour Force Charac.teris-
tics by Age and Sex (E.om;ug
Gt!uerlllioual Showdow11 (New York: PublicAffairs.
20 14): J. Bristow. Baby Boomers aJUI Get~erarional
Couflict (London: Palgrave Macmillan. 2015).
39. P. Attfield. “How to lick Off Your Asian
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40. M.-E. Roberge and R. van Dick … Recognizing
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Diversity Increase Group Performance?:· Human
Resource Managt!mtlll Reri~w 20. no. 4 (2010):
295-308: M. Singal. “The Bus iness Case for
Diversity Management in the Hospitality Industry:·
ltueruarhmal lou mal of Hospiwlil)’ Manage·
mell/40 (2014): 10-19: C.-M. Lu etal.. “Effect of
Diversity on Human Resource Management and
Organizational Performance:· Joumal of Bus;ue.fs
Research 68. no. 4 (20 15): 857-6 I: Y. Zhang and
M.-Y. Huai … Diverse Work Groups and Employee
Performance: 1l1e Role of Communication Tie.~:·
Small Group Research 47. no. I (20 16): 2&-57.
4 1 . .. Ma.~tercard:· Di\·ersiryl11c. April 20 16. 35.
42. D. Porras. D. Psihounta.~. and M. Griswold.
‘”The Long-Term Performance of Diverse
firms:· lmemational Journal of Dh·ers;ry 6. no.

Endnotes
I (2006): 25-34: R.A. Weigand. “OrganizationaJ
Diversiry. Profit~ and Retum.~ in U.S. Finns:· Prob-
lems & Perspectives in Management 5. no. 3
(2007): 69-83.
43. T. Kochan et al.. ··Tbe Effuct.< of Diversity on BlL~;iness Perfomtance: Repon of the Diversity Re.~arch Netwot·k:· Human Resouru Manage- mem42 (2003): 3-2 I: S.T. Bell et al.. ··Gening Specific about Demograpllic Diversity Variable and Team Perfonnance Relationships: A Meta-Analysis:· Journal oJManagemenr37. no. 3 (201 1): 709-43: S .M.B. Thatcher and P.C. Patel. ··Group Fauldines: A Review. integration. and Guide to Future Research:· Journal of Management 38. no. 4 (20 12): 969-1009: C. Ozgen et al .. "Doe< Cultural Diversity of Migrant Employee< Affect Innova- tion?:· Jmenuuional Migration Rel'iew 48 (20 14): S3n-S4J6. 44. Most of the.~ anchors are mentioned in: J.D. l hompson. "On Building an Administrative Sci- ence:· Admit~istrruiw! Science Quarterly I. no. I ( 1956): 102-11 . 45. 1'his anchor has a colourful history dating back to critiques of bus iness schools in the 1950s. Soon after. systematic research became a mantra by many respected .scholars. See. for example: Thompson. ··on Building an Administrative Science.·· 46. J. Pfeffer and R.I. Sutton. Hartl Facts. Danger- ous HalfTrw!Js. and Tow/ Nonse11se (Boston. MA: Harvard Busine.<-< School Pres.<. 2006): D.M. Rous..~au and S. McCanhy. ··Educating Managers from an E,ridence-Based Perspective:· Academy of Manageme111 Leaming & Education 6. no. 1 (2007): 84- 101: R.B. Briner and D.M. RolL<-ral Science 16. no. 4 (Oct. 1980): 536-545:
K. Cameron. “Organizational Effectiveness: Irs
Demise and Re-Emergence through Positive
Or:ganizationaJ Scholarship … in Great Mind.f in
Managemem. eel. K.G. Smith and M.A. Hitt (New
Yo rk: Oxford University Pres.<. 2005). 304-330. 59. S. Selden and J.E. Sowa. ''Testing a Multi- Dimen.~ionaJ Model of OrganizationaJ Perfor- mance: Prospects and Problems : · Journal of Public Administratimt Research and Theory 14. no. 3 (July 2004): 395-416: A.A. AmirkJ1anyan. HJ. Kim. and K.T. Lambright .. The Performance Puzzle: Understanding the Fac.to rs Influencing Alternative Dime1t.~ions and Views of Performance:· Journal of Public Admit~istration Research and Theory 24. no. I (20 14): 1-34. 60. Che.~er Barnard give..~ one of the earliest descrip- tion.~ of organizations as system.~ interacting with external e1wironments and that are composed of .sub- system.~. See: C. Bamard. The Functions of the Exec- wit>e (Cambridge. MA: Han•ard University Pres..~.
I 938). e./Management Re~’iew I 2. no. 4 ( I 987): 607-62 I.
62. Katz and Kahn. The !i<>cial Psydwlogy of
Organiz.ations: J. McCann. “Organizational
Effectivene.~~: Changing Concepts for Changing
Environment~:· Human Resource Pltuming 27. no.
I (2004): 42-50: A.H. Van de Yen. M. Ganco. and
C.R. Hinings … Returning to the Frontier of Contin-
gency Theory of Organizational and lnstitutionaJ
Designs:· Academy of Managemelll Annals 7. no. I
(201 3): 391-438.
63. D. Dahlhoff. ·•why Targefs Canadian Expan-
sion Failed:· Han•ard Business Redew(2015).
https://hbr.org/20 15/0 1/why-targets-canadian-
expansion-fai led: ” Brian Cornell Addresses
Que.~ion.~ About Exiting Canada:· Bullseye View
(Minneapolis: Target. 15 January 20 15). https ://cor-
porate.target.com/article/20 I 5/0 1/qa-brian-cornell-
target-exit~-canada (acce.~~d 28 february 20 17}.
64. C. OsO’Off and N. Sc.hmin. “‘Configurations
of Organizational Effec.tiveness and Effi-
ciency … Academy of Management Journa/36. no.
6 (1993): 1345-61: R. Andrews and T. Entwistle.
..Four faces of Public Service Efficiency:·
Public Management Review 15. no. 2 (20 13):
246-64: R.M. Walker. J. Chen. and D. Aravind.
.. Management innovation and Firm Performance:
An Integration of Research Findings:· Eumpean
Managemem Jmmwl33. no. 5 (2015): 407-22.

EN-4 Endnotes
65. K.E. Weick. The Social l’sych<>logyoJOrganizing
(Reading. MA: Addison-Wesley. 1979): S . Brusoni
and A . Prencipe … Managing Knowledge i n Loosely
Coupled Netwot·ks: Exploring the Links between
Product and Knowledge Dyllamics:· Journal
of Managemtlll Studies 38. no. 7 (Nov. 2001 ):
10 19–1035.
66. R. Slater. Jack Welch & rl~< G. E. \Vay: Man- agemem lnsiglus and Leaders/tip Secrets oj11te Legendary CEO (New York: McGraw-Hill. 1999). 67. T.A. Stewart. Intellectual Capiwl: 71te New Weaiiit oJOrganiuuhms (New York: Currency/ Doubleday. 1997): L.-C. Hsu and C.-H. Wang. --Clarifying the Effect of Intellectual Capital on Performance: The Mediating Role of Dynamic Capab ility:· BrWslt Journal oJManagemem (20 11): 179-205: A.L. Mention and N. Bontis. --Intellectual Capital and Performance within the Banking Sector of Luxembourg and Belgium:· Journal of lmellecwal Capiral 14. no. 2 (2013): 286-309: K. Asiaei and R. Jusoh . .. A Multidimensional View of lntellecrual CapitaJ: The Impact on Organizational Performance:· Mtmagemem Decision 53. no. 3 (20 15): 66&-97. 68. J. Bamey . .. Firm Resources and Sustained Competitive Advantage:· Joumal ofManagemem 17. no. I (199 1): 99- 120. 69. J. P. Hall~knecht and J.A. Holwerda ... When Does Employee Turnover Matter? Dynamic Member Configurations. Productive Capacity. mxl CoiJective Performance:· Organization Science 24. no. I (2013): 2 1()..25. 70. P. Cleary ... An Empiric:al Investigation of the Impact of Management Accounting on Structural Capital and Busine.~ Performance:· Journal of lmellecwal Capiral 16. no. 3 (2015): 566-86: L.M. Gogan. D.C. Duran. and A. Draghici. .. Structural Capil31-a Proposed Meawrement Model. .. Proce. dia Ecmwmics and Finance 23 (20 15 ): 1139-46. 71. Some organizational learning researchers use the label .. social c-.apitar instead of relationship capitaJ. Social capitaJ is discll~~d later in this book as the goodwiiJ and resulting re.wurces shared among members in a social network. The two concept~ may be identical (a.~ those writers suggest). However. we continue to use .. relation. ship capital"" for intellectual capital because social c.apitaJ typic.aJiy refers to individual relationships whereas relationship capitaJ also includes value not explicit in social capital. such as the organization·s goodwiiJ and brand value. 72. G. Huber. "'Organizational Learning: The Con. tributing Processes and Literature:· Organizmimwl Scieuce2 (199 1): 88-115: D.A. Garvin. Learning in Action: A Guide to Pwting 1he Learning Orga. nization 10 Work (Boston. MA: Han•ard Business School Pre.~~. 2000): H. Shipton ... Cohe.~ion or Confusion? Towards a Typology for Organizational Learning Re.~arch:· lmemational Jounw/ of Mtmagemem Reviews 8. no. 4 (2006): 233-52: D. Jimenez-Jimenez and J.G. Cegarra.Navarro. ··r he Performance Effect of OrganizationaJ Learning and Market Orientation:· lndusirial Markeiing Mtmagemem 36. no. 6 (2007): 694-708. One recent study suggest~ that these organizational learning processes aren·t always beneficiaJ because they may be more costly or burdensome than the vaJue they create. see: S .S. Levine and M.J. Prietula. ··How Knowledge Transfer Impacts Perfonnance: A Multilevel Model of Benefits and Liabilities:· Organi:Aiiwer 36.
no. 5 (2015): 772-90.
82. J. Tullberg. –stakeholder Theory: Some
Revisionist Sugge.«ions:· Tlte Journal of Socio·
Econ<>mics 42 (20 13): 127-35.
83. R.E. Freeman. J.S. Harrison. and A.C. Wicks.
Managing for Swkelwlders: Sun:h·al. Repwa~im1.
mtd Success (New Haven. CT: Yale University
Press. 2007): B.L. Pannar et al .. –Stakeholder
Theory: The Stare of the An:· Academy of Manage·
me111 Atmal.~ 4. no. I (20 10): 403-45: S. Sachs and
E. Rilhli. Swk~holders Mauer: A New Paradigm
for S1r01egy in Sodety (Cambridge. UK: Cambridge
University Pre.oc<. 20 II). 84. A. Santana ··r hree E-l ements of Stakeholder Legitimacy:· Journal of Busin~ss E1hics 105. no. 2 (2012): 257~5: D. Crilly and P. Sloan. --Autonomy or Control? Organizational Architec.rure and Corpo. rate Attention to Stakeholders:· Organiuuimt Sci· ence 25. no. 2 (20 14): 339-55: M. Hall. Y. Millo. and E. Barman. "Who and What ReaJiy Counts? Stakeholder Prioritization and Accounting for Social Value:· Journal of Managemem Swdi~s 52. no. 7 (2015): 907-34: D. Weitzner andY. Deutsch. "Understanding Motivation and Social Influence in Stakeholder Prioritization:· Organi!aiion Sttttl· ies 36. no. 10 (2015): 1337-60. 85. R.E. Freeman. A. C. Wicks. and B. Parmar. "Stakeholder Theory and "the Corporate Objective Revisited:·· Organiz.ation Science 15. no. 3 (2004): 364-69: B.R. Agle et al .. ··Dialogue: Toward Superior Stakeholder Theory:· Busine.u Ethics Quarr.rly 18. no. 2 (2008): 153-90: R. B. Adams. AN. Licht. and L. Sagiv. ··Shareholders and Stake- holders: How Do Directors Decide?.·· Sir{lfegic Managemelll Jounwl32 . no. 12 (2011 ): 133 1-55. 86. B.M. Meglino and E. C. Ravlin. "lndividuaJ VaJue.~ in Organizations: Concepts. Controversies. and Re.~arch:· Jounw/ ofManagemem 24. no. 3 ( 1998): 351-389: B.R. Agle and C. B. Caldwell. "Understanding Re.~arch on Value.~ in Business:· Business and Society 38. no. 3 (September 1999): 326-387: A. Bardi and S.H. Schwartz. --values and Behavior. Strength and Structure of Relations:· Persmwlity amf Soda/ P.rycltology Bulletin 29. no. 10 (October 2003): 1207- 1220: S . Hitlin and J.A. PiJavin. "Values: Reviving a Dormant Concept·· Annual Review of Sociology 30 (2004): 359-393. 87. Some popular books that empha~ize the impor- tance of personal and organizational value.~ include J.C. Collins and J.l. Porra.~. Buill U> Ltw: Successful
Habiis of Visionary Companies (London: Century.
1995): C.A. o·Reilly ll l and J. Preffer. Hidden
Vdltt~ (Cambridge. MA: Harvard Bll~ines.~ School
Pre.~. 2000): J. Reiman. T11e S10ry of PurJX>Se: 111e
Pmh 10 Creating a Bdgluer Brand. a Greater Com·
pany. and a LAsting Legacy (Hoboken. NJ: Wiley.
20 13): R. Barrett. J11e Values.Dri\·et~ OrganiWihm:
Unleaslting H “man Potemial for Perfomwnu and
l’rofil (New York: Routledge. 2014): R.E. Freeman
and E.R. Auster. Bridging Ihe Values Gap: How
Auiitemic Organizations Bring Values 10 Uf~
(Oakland. CA: Berren-Koehler. 2015 ).

End notes
88. “Vancity Tops Best SO Corporate CitizeJls List
in Corporate Krughts2016 R:lnking.·· News release
(Toronto: CNW. 7 J une 2016~ ··values-Based Bank-
ing;· F•eding G””” h (Faocbook. 24 November2016).
ht tp.<://www.facebook.oon11pcnnnlink. php?story_tbi d.= II S5968968 156197&id=908437545909342 (oooessed 28 February 2017). 89.'/M 2016 Dc>Joitt• Mlilmniol Sun-.” Winning
m~r tM Na1 G~Mrati.on of Uu.tkn. Dekline Toudte
Tobmatsu (New York: January 2016).
90. M. ‘-an Marrewyk. “Coocepu and Deftnitions
of CSR and Corporate Sustain>bthty: Bern-een
Agency and Commumon.”‘ Joumal ofBu.sim~ss
Ethics 44 (May 2003): 95- IOS: M.L. Barnett.
“Stakeholder Influence CaJXlC ity OJl d the Variability
of Financial Returns to Corporate Socia l Responsi·
biHty.” Academy of Matragmu•uJ Rnit·w 32. no. 3
(2007): 7~16.
91. L.S. Paine. Volu• Shtft (New York: McGraw-
Htll. 2003): A. Madey. T.B. Mx key. and J.B.
Barney. ·-<:orpcnte SocgiiW>ponStbthty and Finn
Perfonnar>ce: lm-estor Preferencfi and Corporate
Strategies.·· Acadtm~· of Mtmagt>tn~JI R~l’it14′ 32
no. 3 (2007): 817-835.
92. S. Zadek. The Ch·il Co,.,Jormlon: The New
Ectmomy ofCorporote Citiuwthip ( London. UK:
Earth.«:an. 200 I): S. Hart and M. Milstein . .. Creal·
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E.ucuti•-. 17. no. 2 (2003): 56-69.
93. A. Bateta. ” MTN Rwanda Helps m Rural
Elechicity.- Eos1 Africon B11siuu U.~d: (Kampala..
Uganda). June 22. 2015: .. MTN Cooneas Scbools
to Off-Grid l’ol>er. Equtps Teachers l’ith ICT
Skills:· N~w Ttm~s (Kigali. Rwtmda), 4 July 20 16.
l1tformation about Y’ello Care ac tivities in Rwanda
and other countries wei’C al”o acquired at: hnp.~://
www.mtn.com/en.lmtn-grouplrocial-ilwestme nts/
y’ ellcxate/Pages/Yello-eare-20 16.aspx.
94 . .\1. Friedman. CtlpiWiiJmtmd Frudom.. 4CXh
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95 … Four in Ten (37~) Em1>loyees Rate Corporate
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llfiS Case for Corporate SOCial Rtsponsibility: A
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Manttf!-56. The MARS
acronym””‘ comed by seruor offteer< tn the Stnga- pore armed fon:es. Chris Perryer at the Unl\ersuy of \\es~em AUSU31ia suggests the full model e the ou100mes
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6. TeohmcaUy. the model proposes that s ituation
fnclor~. moderate the effects of the ti\I’CC wi thin-
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BltJ-35.
9. 1′. 1l1arenou. A.M. Sats. and C. Moo.-e … A
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EN -5
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Soci,t)’ Rt!porl. l lllct~nre.(Reading. UK: 30 Janu-
ary 20 15): J. Harter … Obsolete Annual Revtew:
Gallup’s Ad, icc:· (W:~.’ihington. DC: Gallup. Inc ••
28 September 2015~ http://www.gallup.comlopn·
ion/gallup/185921/obsolete-annual-re\'””‘>-llallup-
adVICO.aspx (acttSsed II Mardl2016): Randstad.
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13. W.H. Cooper and MJ. Withey. 1be Strong
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PS)dtologvRntro· l3. no. I (2009): 62-72: N.A.
Bo”‘iing et al.. ··suuational Strength as a Moderator
of the Relauon&lup between Job Satisfaction and
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Jounwl of IJ,s;,,.fS twtl P.rythoh>gy 30. no. I
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Person-Snuauon Debate Re\·i.~ited : Effec-t of Situ-
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Job Perl’ormance … Nod~””‘ of MantJg~mml Jour-
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R.A. Sbennan. .. Suuauon Change: Stabduy and
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Annual Re”·iewofOrgauiuaional Psydwlogyaud
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17. L Tay. R. Su. and J. Rounds … People-1’hing..~
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I 8. M.A. Griffin. A. Ne.tl. and S.K. Parker.
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Positive Behavior in Uncertain and Interdependent
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M.K. Shoss. and J .L. Huang . .. Individual Adaptive
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N.P. Podmoff e1 al …. Consequences of Unit-Level
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20. E. W. Morrison … Role Definitions and Organiz.a.
tiollal Citizenship Behavior: The lmponance of the
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Antecedents of Citizenship and the Moderating
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38. no. 2 (20 12): 57:>-598.
2 I. M. Ozer … A Moderated Mediation Model of
the Relationship between Organizational Citizen.
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T.M. Nielsen et al …. Utility ofOCB: Organiz.a.
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22. A.C. KIO(z and M.C. Bolino … Citizenship
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23. M. Rotundo and P. Sackett . .. The
Relative lmponance of Task. Citizen.~hip. and
Counterproductive Perfonnance to Global Rating.~
of Job Performance: A Policy-Capturing
Approoch … Joumal <>/ Applie.ll’sydwi<>gy 87
(2002): 66-80: N.A. Bowling and M.L. Gruys.
“Overlooked ls..wes in the Co1x:eptualization a1xl
Mea~rement of Counterproductive Wo1·k Behavior:·
Human Resourc~ Management R~dew 20. no. I
(2010): 54-6 1: B. Marcus e1 al .. ’11le Structure of
Counterproductive Work Behavior: A Review. a
Structural Meta-Analysis. and a Primary Study …
Jmmwl ofManagemew 42. no. I (2016): 203-33.
24. 11le relationship between employee rurnover
and firm performance is actually very tow. but
this is due to moderators and is stronger for some
forms of firm perfonnance. See: J.l. Hancock et
aL .. Meta-Analytic Review of Employee Turnover
a~ a Predictor of Finn Perfonnance:· Journal of
Manageme111 39. no. 3 (2013): 573-603.
25 . .. Hays Canada 2016 Salary Guide:· News
release (Toronto: Hays Specialist Recruitment
Canada. I December20 15): L. Johnson … B.C.
Children· s Hospital Postpones Surgeries Due to
Nursing Shortage:· CBC Nt!W.f (Vancmwer). 9 May
2016.
26. T.-Y. Pa1·k a1xl J. Shaw. ”Tumover Rates and
Organizational Perfonna1x:e: A Meta-Analysis: ·
Jmmwl oJApplietl l’.logy 98. no. 2 (20 13):
268-309: J.l. Hancock e1 al …. Mela-Analytic
Review of Employee lumover a.~ a Predictor of
firm Performance.:· Joumal of Managemellt 39.
no. 3 (20 13): 57:>-603: J.G. Messersmith et al ..
‘1’urnover at the Top: Executive Team Deparrures
and Firm Performance:· Organiuuion St:i~llt:e 25.
no. 3 (20 14): 776-93: B.C. Holtom and T.C.
Burch. ··A Model ofThmover-Based Disruption in
Customer Services:· Human Resourt:e Managemem
Rniew 26. no. I (2016): 25-36.
27. “Sickness Absence Rates and CosL~ Revealed in
UK ·s Largest Survey:· Personnel Today. 28 Octo-
ber 2015: Bureau of Labor Statistics … Absences
from Wo•·k of Employed Full Time Wage and Sal-
ary Wot·kers by Occupation and Industry.” Currem
Populaiion Sun·~y. House/wid Data (Washington.
DC: Bureau of Labor Statistics. 10 February 2016).
Databa.-75: M. Sliter.
K. Sliter. and S. Jex. ’11le Employee a.~ a Punching
Bag: 11le Effect of Multiple Sources of Incivility
on Employee Withdrawal Behavior and Sales Per-
formance:· Journal of Organiyu;ona/ Behav;or 33.
no. I (2012): 121-39: M. Biron and P. Bamberger.
“Aversive Workplace Conditions and Absenteeism:
Taking Referent Group Norms and Supervisor Sup-
pon into Account:· Journal of Applied Psychology
97. no. 4 (2012): 90 1- 12.
29. G. Johns … Presenteeism in the Workplace: A
Review and Research Agenda:· Journal ofOrga-
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& Medici11e 161(2016): 169-77.
30. G. Johns. “Attendance Dynamics at Work:
Tile Antecedents and CorTelates of Presenteeism.
Absenteeism. and Productivity Loss:· Journal of
Occu{J(Jtimwl Health l’syclwlogy 16. no. 4 (20 11):
483-500: D. Baker-McCiearn et al.. .. Absence
Management and Pre.~nteeism: The Pre.~~ures
on Employee.~ to Anend Work and the Impact of
Attendance on Perfonnance:· H”man Resource
Manageme/11 Jounwl20. no. 3 (2010): 3 11-28: R.
Pohling et aL “Work-Related Factors of Pre.~ntee­
ism: The Mediating Role of Mental and Physical
Health.·· Journal of Occupaihmal Health Psycltol-
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3 1. M.B. Edmond . .. How Sick Is Too Sick to Work?
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23. 20 15: C. Chambers. Superheroes Dmr’I Take
Sick Ll!m.~. Association of Salaried Medical
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Advanced Practice Clinicians Work While Sick: A
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32. K. Roose. “Ray Dalio Is Building a Baseball
Card Collection:· New York Magazine. 14 June
2012: R. Feloni . .. Here’s Why the World’s Largest
Hedge Fmxt Makes ApplicanL~ Take 5 Personality
Te.~~ before Sitting through Hours of Intensive
Interviews … B”sitless Jns;d~r. 16 August 2016: R.
fe loni. ‘”These Are the Personality Te.~ts You Take
to Get a Job at the World’s Largest Hedge Fund:·
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33. Personality researchers agree on one point
about the definition of personality: It is difficult
to pin down. A definition necessarily c:apture.~ one
perspective of the topic more than others. and the
concept of personality is ilSelf very broad. The
defi nition pre.~nted here is ba~d on C.S. Carver
and M.f. Scheier. P~rspecti\•es on Persona/if)’. 6th
ed. (Boston. MA: Allyn & Bacon. 2007) and D.C.
funder. 71Je Personalii)’ Puule. 4th eel. (New
York: W.W. Nonon & Company. 2007).
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D. Bridgett … Cognitive CorTelates of Personality:
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1092- 122: JJ . Jac.k.~on et al. .. Your Friends Know
HO\v Long You WiU Live: A 75-Year Study of
Peer-Rated Personality 1’raits:· Psychological Sd-
ence26. no. 3 (2015): 335-40.
56. H. Solomon. ‘Telooom CEO: ·£mpower dle
Right Person with the Right Skillset to Step up
at the Righ t Time·:·JTWorld Canada, 7 June
2016: .. 2016 Canadian Telecom Summit Presents
Telecom Employer of Choice Award~:· Telecom
Review. July-August 2016.

EN-8 Endnotes
57. B.M. Meglino and E..C. Ravlin … Indi vidual
Values in Organizations: Concepts. Controversies.
and Research:· Journal of ManagemeUI 24. no. 3
( 1998): 351-389: B.R. Agle and C.B. Caldwell.
.. Understanding Research on Values in Busine.~~:·
Busine.u and Sociery 38. no. 3 (September 1999):
326-387: S. Hitlin and J.A. Pilavin . .. Values:
Reviving a Donnant Concept:· Annual Re,•iew of
Socioi<>gy 30 (2004): 359-393.
58. D. Lubinski. D.B. Schmidt. and C.P. Benbow.
··A 20. Year S1ability Analysis of the Study of
Values for lntellecruaUy Gifted llxlividuaJs from
Adole.~ence to Adulthood.·· Journal of Applied
Psychology 8 1 ( 1996): 44:>-451: M. Vecchione
et al.. “Stability and Change of Basic Personal
Values in Early Adulthood: An 8-Year Longitudinal
Study:· Journal of Research in Persmwlil)’ 63
(20 16): I I 1-22.
59. L. Park.< and R.P. Guay . .. Personality. Value.<. and Motivation:· Personalii)' and ltulhillual Differ· e11-88.
6 1. N.T. Feather. “Values. Valences. and Choice:
The Influence of Values on the Perceived Attrac-
tivene.~~ and Choice of Alternative.~:· Joumal of
l’ersonaliry a11d Sociall’sychology 68. no. 6 ( 1995):
I 135-5 1: L. Sagiv. N. Sverdlik. and N. Schwarz.
·1’o Compete or to Cooperate? Values· Impact on
Perception and Action in SociaJ Dilemma Game.~:·
Eumpean Journal of Soda/ Psydwlogy 41 . no.
I (201 1): 64-77: S .H. Schwartz and T. Butenko.
··Value.~ and Behavior: Validating the Refi ned
Value Theory in Russia:· Eumpean Journal of
Sociall’sydtology 44. no. 7 (2014): 799-8 13.
62. G.R. Maio et aL “‘Addres..~ing Discrepancies
between VaJues and Behavior: The Motivating
Effect of Reasons:· Journal of Experimemal St)cial
l’sycltol<>gy 37. no. 2 (2001 ): 104- 17: A. Bardi and
S.H. Schwartz . .. VaJues and Behavior: Strength and
Structure of Relation .. ~:· Personaliry and Social
l’sycltology Bullelill29. no. 10 (2003): 1207-20:
L. Sagiv. N. Sverdlik. and N. Schwarz . .. To Compete
or to Cooperate? Values· Impact on Perception and
Action in SociaJ Dilemma Game.~:· European Jour·
11al of!i<>ciall’sydwlogy 41. no. I (201 1): 64-77:
K.M. Sheldon and L.S. Krieger. ··Walking the Talk:
Value Importance. Value Enactment. and Well·
Being … Motiwuion and £motiot~38 (2014): 609- 19.
63. E. Dreezens et al.. .. The Missing Link: On
Strengthening the Relationship between Values and
Attitudes:· Basic and Applied Social Psychology
30. no. 2 (2008): 142-52: S. Arieli. A.M. Grant.
and L. Sagiv. ··Convi ncing Yourself to Care About
Others: An Intervention for Enhancing Benevolence
Values:· Journal of Personality 82. no. I (2014):
15-24.
64. N. Mazar. 0 . Amir. and D. Asiely. ‘1loe
Dishone.sty of Honest People: A Theory of Self-
Concept Maintenance:· Jounw/ of Marketing
Research 45 (Deoember 2008): 633-M4.
65. M.L. Verquer. T.A. Beehr. and S.H. Wagner.
“A Meta· Analysis of Relations between Person-
Organization fit and Work Attitude.~:· Jounwl
of Vocatio11al Beltal’ior 63 (2003): 473-89: J. W.
We.~erman and L.A. Cyr. “‘An Integrative Analysis
of Person-Organization Fit Theorie.~:· /tuernatimwl
Journal of Selection and Assessmelll 12. no. 3
(2004): 252-61: J. R. Edwards and D.M. Cable.
”11le Value of VaJue Congruence:· Joumal of
Applietll’sydwlog)94. no. 3 (2009): 654-77: A.L.
Kristof.Brown et al .. “Collective Fit Perception.~:
A Multilevel Investigation of Person-Group fit
wi th lndividuaJ.Level and Tea.nl·Level Outcomes:·
Journal of Organizmimwl Behavior 35. no. 7
(2014): 969-89.
66. G. Kirbyson . .. Manitoba’s Top 25 Employers
to Be Announced:· Winnipeg Free Pres.f, 22
November 2014. B7: Canadian Busine.~ for SociaJ
Responsibility. A G,ide to the ·Qualities of a
Trtmsformatimwl Company·. (Toronto: Canadian
Busines..~ for Social Responsibility. December
2015). pp. 48-49: Assiniboine Credit Union. 2017
Board of Directors Candidate Guide. (\Vinnipeg:
Assiniboine Credit Union. 20 October 20 16). pg.6:
… People. Planet. Prosperity· Wins Again:· News
release (Winnipeg: A.~~;iniboine Credit Union. 30
November2016).
67. “Honesty and Communication Top Leadership
Skills: Nanos:· CBC News. 20 September 20 13:
.. Leading tbe Charge: Wbat Do Canadian Workers
Look for in Their Leaders:· News release (Toronto:
Roben Half Management Resources. 22 September
2016): S. Gile.< ... The Most lmponant Leadership Competencies. According to Leaders around the World:· Harttml Business Re"·;ew Digital Articles. Marcb 20 16. 2~. 68. P. L Schumann. "'A Moral Principles frame- work for Human Resource Management Ethics:· Human Resource Management Redew 11(2001): 93- 11 1: J.A. Bos..~. Analyzing Moral/.fsttes. 6th ed. (New York: McGraw-Hill. 20 13). Chap. I: A. Gustafson. "ln Defense of a Utilitarian Business Ethic:· Business and Society Review 118. no. 3 (201 3): 32>-60.
69. for analysis of these predictors of ethical
conduct. see: J.J. K.is h.Gephart D.A. Harrison. and
L. K. Trevino … Bad Apple.<. Bad Cases. and Bad Barre ls: Meta-Analytic Evide1x:e About Sources of Unethical Decisions at Work:· Joumal of Applied l'syclwlogy95. no. I (20 10): 1-3 1. 70. TJ. Jone.~ ... Ethical Decision Making by Individuals in Organizations: An Issue Contingent Model:· Academy of Management Re,•iew 16 (199 1): 36<.-95: 1'. Barnetl .. Dimensions of Moral Intensity and flhic-.al Decision Making: An Empirical Srudy ... Joumal of Applied Sociall'sychology 3 1. no. 5 (200 1): 1038-57: J. Tsalikis. B. Seaton. and P. Shepherd . .. Relative Importance Measurement of the Morallnten.~ity Dimension.~:· Journal of Busine.<.< Erltics 80. no. 3 (2008): 6 I 3-26: S. Valen- tine and D. Hollingwonh . .. Morallntensity. Issue lmpona.nce. and Ethical Reasoning in Operations Situations:· Journal of Business Ethics 108. no. 4 (2012): 509-23. 7 1. J .T. Kennedy . .. Alcoa's William O'Rourke: Ethical Business Practices. from Russia to Sustain· ability:· Camegie Cmmcil. 27 April 20 II : A. Gra- ham ... The 1'hought Leader Interview: William J. O'Rourke.·· stnitegy +business. Winter 2012. 1-7: 1'he Wheatley Institution. ··Seek True Nonh: Sto· ries on Leadership and Ethics- Bill O'Rourke:· (YouTube. 2 August 20 16). https://www.youtube. com/watch?v=bmFDXeclq1M. Video (acce.<-/ Managemew 39. no. 3 (201 3): 660-83:
J. Jaeger … Compliance Culture Depends on Middle
Management .. Compliance Week. February 2014.
47-61 . The ethic:aJ culture quotation is from:
Canadian Centre for Ethic.~ and Corporate Policy.
··Business Ethics faqs : · (Toronto. ON: Canadian
Centre for Ethics and Corporate Policy. 2014).
http://www.ethicscentre.ca/EN/resourceslfaq.cfm
(acce.<-gical Bulletin 128 (2002): 3-72. Consistent
with Oyserman et aLa recem study found high
rather than low individualism among Chilean.~.
See: A. Ko ls tad and S. Horpestad … Self-Construal
in Chile and Norway:· Joumal ofCrm:s-Culwral
l’sychol<>gy 40. no. 2 (March 2009): 275-281 .
83. f .S. Niles. ··tndividualism-Collectivism Revis-
ited:· Cross-Cultural Researr:h 32 ( 1998): 3 15-4 1:
C.P. Earley and C. B. G ibson. ··Taki ng Stock in
Our Progress on Individualism-Collectivism: 100
Years of Solidarity and Community:· Journal of
Managemew 24 ( I 998): 265-304: C.L. Jackson et
al .. ··Psychological Collectivism: A Measurement
Validation and Linkage to Group Member Perf or·
mance:· Journal of Applietl Psychology 9 1. no. 4
(2006): 884-99.
84. Oyserman. Coon. and Kemmelmeier … Rethink-
ing lndi,•idualism and Collecti\•ism.·· Also see F.
Li and L. Aksoy. ··o imensionaliry of lndividuaJ-
ism-CoiJectivism and Mea.~urement Equivalence of
Triandis and Gelfand”s ScaJe:· Journal of Business
and 1’syd10logy 2 1. no. 3 (2007): 3 I 3-329. The ver-
tical-horizontal distillCtion does not account for the
Jack of correlation between individualism and col-
lectivism. See: J. H. Vargas and M. Kemmelmeier.
··&hnicity and Contemporary American Culture: A
Meta-Analytic Investigation of Horizontal-VenicaJ
lndi,•iduali.sm-Collectivism.·· Journal of Cross-
Cultural l’syd10logy44. no. 2 (2013): 195-222.
85. M. VoronO\• and J.A. Singer. ‘1be Myth
of Individualism-Collectivism: A Critic-.aJ
Review … Journal <>/ !i<>cial 1’syd10logy 142 (2002):
46 1-SO: Y. Takano and S. Sogon … Are Japanese
More Colloclivi.~tic Than Americ-.ans?:· Journal
of Cmss-Cultural l’sychology 39. no. 3 (2008):
237-50: D. Dalsky … Individuality in Japan and
the United States: A Cross-Cultural Priming
Experiment.”ltueruarimwl Joumal of ltuercultural
Relatimu 34. no. 5 (2010): 429-35. Japan scored
46 on individuaJism in Hofstede”s original srudy.
placing it a little below the middle of the range and
around the 60th percentile among the countrie.~
srudied. Recent studie.~ suggest that Japan has
become even more individualistic over the past
decade. See Y. Ogihara et al .. “Are Common
Nrune.~ Boooming Less Common? The Rise in
Uniqueness and Individualism in Japan:· fit>tUiers
in 1’syd10logy 6 (2015): 1490.
86. G. Hofstede. Culture ·s Con.fequeuces: Compar-
ing Values. Behaviors. lnsiiitttions, tmd OrganiZll-
tions acms.f Nations. 2nd ed. (11lousa.nd Oaks. CA:
Sage. 200 1).
87. Hofstede. Culwn!·s Consequet~ces: Comparing
Values. Behaviors. lnsiiitttious. and Orgtmiza-
tions acms.f Nations. Hof.~tede used the terms
masculinity and femininity for achit\’emeut and
twrruring orienJ(Jiion. respectively. We (along wi th
other writers) have adopted the laner two term.~ to
minimize the sexist perspective of these concepts.
Also. readers need to be aware that achievement
orientation is a~wmed to be opposite of nurruring
orientation. bUl this opposing relationship might be
questioned.
88. T. Mickle and~ Pranner. “Jim Beam·s New
Owner Mixes G lobal Cocktail.” \Vall Street Jour-
t.al. May 4. 20 15. A I : K. Moritsugu … Merging US.
Japan Work Cultures a Challenge for Beam Sun-
tory … Associated Pre.fs. January 15.20 16.
89. V. 1’aras. J. Rowney. and P. Steel. .. Half a Cen-
tury of Measuring CuJrure: Review of Approac.he.~.
Challenge.~. and Limitations Ba~d on the Analysis
of I 2 1 Instrument~ for Quantifying Culture:·
Journal oflmeruatimwl Manageme111 15. no. 4
(2009): 357-373.
90. R. L. Tung and A. Vert>eke … Beyond Hofstede
and G LOBE: Improving the Quality of Cross-
Cultural Re.~arch:· Joumal of ltuernaiimwl Busi-
lle.logy umal of
Experimental Social Psychology 51 (2014): 1- 14:
S. Oishi. T. Tal helm. and M. Lee … Personality and
Geography: lnt.rovens Prefer Mountains:· Jmmwl
ofReseardl in Personaliry 58 (20 15): 55-68.
99. M. Adams. Fire and Ice: 111e U11ited States.
C”tmada. and Ihe M,wh t>,[Cmn·ergiug Values
(Toronto. ON: Penguin Canada. 2004). 142.

EN-10 Endnotes
100. J. Laxer. Tlte Border: Canada. rhe U.S. And
Di.~patchesfmm 1he 4911J PartJJit~l ( foronto. ON:
Anchor Canada. 2004).
101. M. Adams. Fi~and I ce: n1e Uu;ted Sf(Jres.
Canada , and the My1h oJCom•erging Values
(Toronto: Penguin Canada. 2004): C. Boncher.
.. Canada-US VaJues: Distinct Inevitably Carbon
Copy. or Narcis..~ism of Small Difference.~?:·
Horiu>n.f: Policy Research lllit;arh~ 7. no. 1 (June
2004): 42-49: J. Citrin. R. Johnston. and M. Wrighl
··oo Patriotism and Multiculruralism Collide? Com-
peting Perspectives from Canada and the Uni ted
States:· Canadian Journal of Polirical Scie11u 45.
no. 3 (2012): 531- 52: R. Dheeret al. … Cultural
Regions of Canada and United States:· buernllliottal
Journal of Cross Cultural Mtmagemell/14. no. 3
(20 14): 343-84: M. Adams. ··Fire and Ice Revisited:
American and Canadian SociaJ Values in the Age of
Obama and Harper:· Prese.tUaJion miitt! Wmxlmw
Wilson C•nter (You Tube. 14 March 20 14). https:J/
www.youtube.com/watcb?v-.~Rbwvb9sMmw.
Video (accessed 26 January 201 7).
CHAPTER3
I. H. Stelfox … Let-s Have IT:· Hudd•rsfi•ld
Examiuu ( UK), 20 November 2014. 28-29: J.
Stauffer. “‘Changing the face of STEM Education:·
Uui,·ersii)’ ojWa1erloo Magazine. FaiJ 2015: T.
Burgmann … Women Entrepreneurs Galvanized to
Disrupt Maledominated Tech Industry: · Toromo
Sun. 20 July 20 16. A62: C. Preece . .. Is a Lack of
Self-Belief Pushing Girls Away from STEM?:·
IT Pm . 9 February 20 16: S. Samson . .. Winnipeg
Women Say Gender lnequaJity Stands out in the
Workplace:· CBC N•ws(IVinnip•g). 29 January
20 16: J. Zoratti . .. Breaking through the Tech Bar-
rier- City Group Teaches Code to Women. Girts:·
Winnipeg fru Pres.f. 22 January 20 16. A2: M.
Sariffodeen. “Ladie.~ Learning Code Commissions
National Survey on Women in JCT … (foronto:
Ladies Learning Code. 8 November 20 16). http://
J adie.~leamingcode.conlfladie.~-learning-code-sur­
vey-women-ictl (acces.~d 9 January 20 17). Some
information ha.~ also been retrieved from other web
page.~ at: l adie.~learningcode.com.
2. A.T. Kearney and Your Life. Tough Choices: Tit~
Real Reason.f A-Let·el S1udeuu A~ S1eering Clear
ofSci•ll«and Maths (London: February 2016).
3. D. Cooper and S.M.B. Thatcher … Identifica-
tion in Organizations: The Role of Self-Concept
Orientations and Identification Motives:· Academy
ofMat~ag•m•w R.vi•w 35. no. 4 (2010): 516-38: J.
Schaubroeck. Y.J. Kim. and A. C. Peng. ”The Self-
Concept in OrganizationaJ Psychology: Clarifying
and Differentiating the Construct~:· in ltuerua-
tional Review of Industrial and Organiz.ational
Psychology (John Wiley & Sons. Inc .. 201 2). 1- 38.
4. V.L. Vignole..~. S.J. Schwarrz. and K. Luyckx. ··
Introduction: Toward an Integrative View of Iden-
tity:· in HaJUibook of Jdemii)’ Theory and Research.
ed. J.S. Schwartz. K. Luyckx. and L. V. Vignoles
(New York: Springer New York. 201 1). 1-27: L.
Gaermer el al.. “A Motivalional Hierarchy within:
Primacy of d>e Individual Self. Relational Self. or
CoiJeclive Self?:· Journal ofExperimemal Social
l’sychoh>gy 48. no. 5 (2012).
5. E.J. Koch and J .A. Shepperd . .. Is Self-
Complexity Linked to Better Coping? A Review
of the Literature.” Joumal of Persoualil)’ 72. no. 4
(2004): 7?:7-fil: A.R. McConnell. ··llle Multiple
Self-Aspect~ Framework: Self-Concept Repre.~nta·
tion and Its Implications:· Persoualiry and Social
Psychology Rwi•w 15. no. I (20 1 1): 3-27: L.F.
Emery. C. WaJs.h. and E. B. Stoner. “Knowing Who
You Are and Adding to It Reduced Self-Concept
Clarity PredicL< Reduced Self-Expansion:· Social Psychological and Personaliry Scietu:~ 6. no. 3 (201 5): 259-66. 6. C.M. BrO\vn et aL "Between Two Selves: Comparing Global and Local Predictors of Speed of Switching between Self. Aspects." Self and ld•11tity 15. no. I (20 16): 72-89. 7. J.D. Campbell et al.. ··Self-Concept Clarity: Measurement. Personality Correlates. and Cultural Boundaries:· Journal of Personality and Social Psychology 70. no. I (1996): 141-56. 8. J. Locli-Smith and B.W. Roben.~. "Getting to Know Me: Social Role Experiei')Ces and Age Differences in Self.Concept Clarity During Adult· hood:· Journal <>/P•rsonality 78. no. 5 (2010):
1383-410.
9. E.J. Koch and J.A. Shepperd … Is Self-
Complexity Linked to Beuer Coping? A Review
of the Literarure:· Journal of Persmwlity 12. no. 4
(2004): 727-60: T.D. Ritchieet aL “Self-Concept
Clarity Mediates the Relation between Stress a1xl
Subjective We ll-Being:· Self and Jdeutity 10. no. 4
(2010): 493-508.
10. A.T. Brook. J. Garcia. and M.A. Fleming. “The
Effects of Multiple ldentitie..~ on Ps.ychologic.aJ
Weii· Being.” Personaliryand Soda/ Psychology
Bulletin 34. no. 12 (2008): 158~00: A.T. Church
et al .. “Relating Self-Concept Consistency to
Hedonic and Eudaimonic Weii. Being in E.ight Cui·
ture.~:· Joumal ofCmss-t”ulllm11 P.rychology 45.
no. 5 (20 14): 69~712.
I I. J.D. Campbell. ··Self-Esteem and Clarity ofd1e
Self-Concept:· Journal of PersonaUry and Social
Psyclwlogy 59. no. 3 (I 990).
12. S. HannaJ1 et al.. ‘1’he Psychological and
Neurological Base..~ of Leader Self.Complexity and
Effects on Adaptive Decision.Making:· Joumal
of Applied Psyclwlogy 98. no. 3 (20 13): 393-411:
S.J . Creary. B.B. Caza. and L.M. Roberts. ··Out of
the Box? H O\V Managing a Subordinate’s Multiple
ldentitie.~ Affects the Quality of a Manager.
Subordinate Relationship.” Actulemy of Manage.
mem Re,•iew 40. no. 4 (20 15): 538-62: S.K. Kang
and G. V. Bodenhausen. “Multiple Identities in
Social Perception and Interaction: Challenges and
Opportunities:· Annual R~view of Psy chology 66.
no. I (20 15): 547- 74.
I 3. G. QuilL .. Helene Joy : Successful -and
Ignored.” Toromo Swr. I 0 January 2009: “Canada
Wins Aussie Joy.” \Vest A”stra/ian. 29 June 20 I I.
5.
14. C. Peus et al.. “Authentic Leadership: An
Empiric-.al Test of hs Antecedent~. Consequences.
and Mediating Mechanisms.” Joumal of Bus;nes.f
Ethics 107. no. 3 (20 12): 33 1-48: F.O. Walumbwa.
M.A. Maidique. and C. Atamanik. ··Decision.
Making in a Crisis: What Every Leader Need~ to
Know.” Organier and M.D. Alicke . .. Deconstruct-
ing the Better-Than-Average Effect” Joumal of
Persmwlityand Social P.ryclwlogy 99. no. 5 (2010):
755-70: S. Loughnan et aJ .. “Universal Biase.~ in
Self.Perception: Better and More Human Than
Average:· Brit; sit Journal t>f St)dal Psydwlogy 49
(2010): 627-36: H.C. Boucher. ··Understanding
Westem-East Asian Differe1lCes and Similarities
in Self-Enhancement:· Social and PersonaUty
Psydwlogy Compas.< 4. no. 5 (2010): 304-17: A. Gregg. C. Sedikide..~. and J. Gebauer. "Dynamics of Identity: Between Self-Enhancement and Self· As..~ssment:· in Handbook of ldem;ry 71u~ory aud Research, ed. S.J. Schwarrz. K. Luych. and V.L. Vignoles (Springer New York. 20 1 1). 305-27. 17. D. Dunning. C. Heath. and J.M. Suls ... ~1awed Self·A.~~ssment: Implications for Health. Educa- tion. and the Workplace." Psycht>lt>gical Science in
th•l’ublic lwmw5. no. 3 (2004): 69-106: D.A.
Moore. “Not So above Average after All: When
People Believe They Are Worse Than Average
and It~ Implications for Theorie..~ of Bias in Social
Comparison:· Orgaui:tuioual Belwdor and Human
Dedshm Pmcesses 102. no. I (2007): 42-58.
18. K.P. Cross … Not Can. but \Viii College Teach-
ing Be Improved?.” N~v Directions for Higher
Educatittr 14. no.
2 (20 1 1): 1 5~3: Hean & Stroke Foundation
(Canada). Deuia/ 1.1 Pulling Canaditms a1 High
R;.fk t>fCwting Tlte;r Li•~s Shon, Hean & Stroke
Foundation (Ottawa. ON: 201 1).
19. D. Gosselin et al .. “Comparative Optimism
among Drivers: An lntergenerational Portrait:·
Accitlem Analysis & Pret·em;ou 42. no. 2 (20 10):
734-40: P.M. Picone. G. Battista Dagnino. and A.
Min3. ··111e Origin of Failure: A Multidisciplinary
Appraisal of dle Hubris Hypothesis and Proposed
Re..~arch Agenda:· Academy of Mauagemem
Pu.O·
rate Resistance to Corrective Feedback:· Su’tlfegic
Managemr. eel. R.M. Sorrentino and E.1′. Higgins
(New York: Guildford. 1990).40&-48: W.B. Swann

Endnotes
Jr. P J. Rentfrow. and J.S. Gumn. “Self.Verifocation:
The Searcb for Coherence:· in Handbook of St/f
anti Identity. ed. M .R. Leary an d J. Tagney (New
York: Guildford, 2002). 367-83: D.M. Cable and
V.S. Kay . .. Suiving for Self-Verification Duri ng
Organizational Entry;· At’itd~ml’ of Mauagemem
Joumal 55. no. 2 (20 12): 360-80.
2 J. F. Anseel and F. LIC\cns. ”Certaml)’ as a
Modera1oroffeedbacl. Reacoons• A Tes1 of !be
Srrenglb of !he Self-Vcnfaoon Mollent is the
personality trai t emotiOnal Slability. which wall
descnbed in Chapter 2. 1-f~C\”er. personality is a
behaviour 1enderocy. -.bereas core self-evaluation
uacludes only “e\·aJuatK)ft·fOC\lSed- \wiables.
There is also rec:en1 concern aboul “‘berber loc:us
of conrrol is pan of self-e>aluaoon. See R.E.
Johnson. C. C. Rostn, ond P.E. Levy. “Getting 10
the Core of Core Self·Evaluat1on: A Review and
Recommendations.·· }t),Jnral of Organi:t~tio11al
Behavior 2 9 (200&): 391-4 13: C.-H. Chang e1 al ..
·~core Self-Evaluation”: A Review and Evaluation
of the Literature,” J01mwl of Matlltgt!mem 38, no.
1 (2012): 8 1-128: R.E. Johnson et al .. ”Getting 10
!be Core of Locus of Con1rol. ls lt an E>·aluation of
!be Self or !he En>tn>nmIIS 80. no. I (1966): 1-28.
28. T.W.H. lolg. K.L. Sorenstn, and L.T. Eby.
“Locus of Conrrol a1 Work: A Meto-Analysis.”
lottr11al ofO~ani::tJtionnl Behmior 27 (2006):
1057-87: Q. Wang. N.A. Bowling. and KJ. Eschle-
man. “A Meta-Analytic E-Xami11ation of Work and
General Locus of Control.” Jmmwl of Applietl
Ps>< holog> 95. no. 4 (2010): 761-68.
29. GJ. Leonatdelli. C.L Picker~ and M.B. Brewer.
”()pumal Do-eness ‘Thplied l’s1·chology 10 1, no. 2 (2016): 222-36.
30. We descnbe relational s.lf..:onccpc as a form of
~al identity because such connecuon.s are inher·
cntly soc:QJ and !he dyads are l}pocally members of
a collecu>-e enul)’. For example. an emplo)-.e bas
a relatoonshop odentil)’ -..ilh ho.slher boos. bullht>
1\ connected to a social idenuty ~ at h lhe team or
depanment. However. rec~nt dL«”u,~ion suggests
1hot relational selr.concept may al~o be part of
pcr~onal identity or a separate fonn of self .. concept
See B.E. Aslofor~o. B.S. Schinnff. orod K. M. Rog-
el’ll, …. 1 ldentafy with Her:· ” l lden1ify with Hun .. :
Unpacking !he Dynamics of Personal ldentofica-
hon 1n OIJ.anizations.- Acad~ml of Mano~tMnt
Rnik of
Sol’illl l’s)doolt>gy. ed. M.A. Hogg and J. Cooper
(Lnndon: Sage. 2003). 110-3&: S .A. liaslam aoxl
N. l::.l lemers. ” Identity Processe§ m Org.anlz.auons:·
m Jlandbook ofldt!niiry Th~on• and Rrs~arch. ed.
J.S. Schwartz. K. Luyckx. and LV. Vogoolcs
(N.,. York. Sponger :-lew York, 2011).715-44.
32.!11.R. f.dwatds . “Organizauonal ldentofocatoon:
A Conceptual and Opesaliooal Re\lew:· lnt 66. no. 2 (2012): 381-88: A. A11< e1 al .. " lmpocr of EmouonaJ Contexl Congruency on Deciston Matang under Ambaguity.- Emotion 13. 00. 2 (20 13): 177-82. 37. Plalo. Tlw Republic. trans. D. l ee (Harmond· sworth, England: Penguin. 1955). 38. D.J. Simon" and C.F. Chabris. "Gorillas in Our Midst : Suqajncd lnattentional Blindness for Dynamic: E>enl<." P oce on “A Scandal on Bohemoa.” p. 189.
The Frank Cara case b descnbed in J . Rankin,
“A Falher’s Murder. ;uod tbe Telllale Heanbeal,”
Tommo Star, February 14. 20 15. A I: J. Wiunebel.
“A Murde red F’athcr. De~Lroyed Reputations. nnd
a Family in Taucrs,” Osluth’O Express, April 15.
20 15.

EN-12 Endnotes
42. C.N. Macrae and G. V. Bodenhau.view of Psychology 5 1 (2000): 93-120:
K.A. Quinn and H.E.S. Rosenthal. ··Categorizing
Otlters and the Self: How Social Memory Structures
Guide SociaJ Perception and Behavior:· Learning
and Moti1•mi/
Sport and Exercise 14. no. I (20 13): 21-27. For a
disclL~~ion of cognitive closure and perception. see
A. Roet.~ et al . ‘1’he Motivated Gatekeeper of Our
Minds: New Directions in Need for Closure Theory
and Research.” in Adwmces iu Experimental Social
Psychoi<>gy. ed. M.O. Jrune.< and P.Z. Mark (San Diego. CA: Academic Press. 2015). 22 1-83. 44. J. W illis and A. Todorov ... First lmpre.~~;ions: Making Up Your Mind after a 100-Ms Expo.~;ure to a face:· Pryclwlogical St:ietU:t! 17. no. 7 (2006): 592-98: A. Todorov. M. Pakrashi. and N.N. Oo.sterhof. ··EvaJuating faces on 1'rustworthine.~~ after Minimal T ime Exposure:· Soda/ Cogni· tion 21. no. 6 (2009): 8 13-33. For related research on thin slice.~. see D. Kahneman. 11Jinking Fa.fi and Slow (New York: Farrar. Strauss alld Giroux. 201 1): M.L Slepirut. K. R. Bogan. and N. Ambady. •7hin.Siice Judgments in the Clinical Context:· Annual Re,•iewofC/inical Psydwlogy 10. no. 1 (20 14): 131- 53. 45. P.M. Senge. The Fiflh Discipline: The Art and Practict! oftht! Learning Organiz.ation (New York: Doubleday Currency. 1990). Chap. 10: T.J. Cher- mack ... Mental Models in Deci.~ion Making and Implications for Human Re.~ource Development.·· Ad~·ance.f in De,•eloping Human Resources 5. no. 4 (2003): 408-22: P.N. Joh~>i<>gy 86. no. 6 (2004 ): 862-79:
M.A. Hogg et aL ‘”The Social Identity Perspective:
Intergroup Relations. Self-Conception. and SmaiJ
Groops:· Small Group Researr:h 35. no. 3 (2004):
246-76: K. Hugenherg and D.F. Sacco. ··Social
Categorization a1xl Stereotyping: How SociaJ
Categorization Biase.~ Person Perception and Face
Memory:· Social and Personaliry Psychology
Com pas.< 2. no. 2 (2008): 1052-72. 52. N. Halevy. G. Bornstein. and L. Sagiv . .... ln· Group Love .. and "our-Group Hate .. as Motives for Individual Panicip.ation in intergroup Conflict: A New Game Paradigm:· Psychological Sdence 19. no. 4 (2008): 40~1 1: T. Yantagishi and N. Mifune. "SociaJ Exchange and Solidarity: In-Group Love or out.Group Hate?: · E~·olwhm and Human Behavior 30. no. 4 (2009): 229-37: N. Hale••y. 0 . Weisel. and G. Born.~tein . .. In-Group Love .. and .. out.Group Hate .. in Repeated interaction between Groups:· Journal of &harioral Decision Making 25. no. 2 (2012): 188-95: M. Parker and R. Janoff-Bulman. "Les.wns from MoraJity·Based SociaJ Identity: Tbe Power of Out group ··Hate:· Not J ust Jngroup "Love .. : · Soda/ Jusiiu Research 26.no. I (20 13): 81-96. 53. T. Schmader and W.M. HalL "Stereotype 11treat in School and at Work: Putting Science into Prac. tice:· Policy ltuiglusfmm 1/Je Belwrioral and Brain St:ietlt:es I. no. I (2014): 30-37: C.R. Pennington et al.. "Twent y Years of Stereotype 1breat Research: A Review of Psychological Mediators:· PLoS ONE I I. no. I (20 16): e0J46487. 54. 1'. Morbin. "Women in IT Security: Pushing at an Open DoorT' SC Magavne, July I. 20 14. 55. C.A. Mos.~·Racusin et at .. ··Science facuhy·s Subtle Gender Biase.~ Favor Male Students:· Pm- ceedings of I he Nmional Academy (if Sciences 109. no. 4 1 (20 12): 16474-79. 56. S.T. Fiske. ··Stereotyping. Prejudice. and Discrimination ... in Hand/x)(>k of !i<>dal Psydwl-
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Hewstone .. M. Rubin. and H. Willis . .. Intergroup
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ing. Prejudice. and Discrimination within Social
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tmd D;scr;minmion. ed. Todd D. Nelson (New
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cimioll. lmerumimwl A.uodation (if Fire Fighiers.
Local 255, wiiit Respec”/ 10 a Grievance by Charles
Hendricks. 47218 Canadian LegaJ infonnation
Jnstirute(20 12): ···we Failed You. We Hun You·:
Text of Apology from RCMP Commissioner Bob
PauJson: · Cfmadian Press (Ouawa).
7 October20 J6.
58. J. Dawson. S. Natella. and R. Ker.gist28 (1973): 107-28.
62. D. Lange a1xl N.T. Washburn . .. Understanding
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bution is an incomplete theory for understanding
how people determine causation and a.~~ign blame.
See S.A. Sloman and D. Lagnado. “Causality in
Thought:· Annual Review of Psychology 66. no.

End n o t es
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63. J.M. Cram and l .S. Bateman … A.~~;ignment of
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Academy of Managemem lou mal 36 (1993):
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T heories of Motivation from an Anributional
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J. Shepperd. W. Malone. and K. Sweeny. “Explor-
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65. E. W.K. Tsang … Self-Serving Attribution.~ in
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66. S.S. Van Dine (Willard Huntington Wright).
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67. D.T. Gil hen and P.S. Malone. ”The Corre-
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68. I. Choi. R. E. Nisbett and A. Norenzayan.
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femuly- and \Vhy (New York: Free Press. 2003).
Chap. 5: S.G. Goto et al.. “Cultural Differences in
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69. B.F. Malle. “The Actor-Observer A.gical Bulletin 132. no. 6 (2006): 895-919:
C. W. Bauman and L.J. Skilka . .. Making Attribu-
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70. Similar models are presented in D. Eden.
··Self-Fu lfilling Prophecy as a Management Tool:
Hamessing Pygmalion:· Academy of Mauage-
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D. A. Van Serers. ··Management by Expectations
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Trouilloud et aL .. The influence of Teac.her Expec-
tations on Student Achievement in Physical Educa-
tion Classes: Pygmalion Revisited.·· E”ropean
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71 . P. Whiteley. T. Sy. and S.K. Johnson. “Leaders
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P. Whiteley. T. Sy. and S.K. Johnson. “Leaders
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Halo and Ceiling EftOCt~ in Student Evaluations
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77. B. Mullen el al .. “‘The False Consensus Effect
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“\Vho”s wi th Me’? False Consensus. Brokerage.
and Ethical Decision Making in Organizations:·
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78. E.A. Lind. L. Kray. and L. Thompson.
“Primacy Effect~ in J ustice Judgment~: Testing
Predictions from Fairne.~~ Heuristic Theory.··
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8 1. Eden. D. “Self-Fu lfilling Prophecy a.< a Management Tool: Harne.~ing Pygmalion .. : S.S. White and E.A. Locke ... Problem.~ with the Pygmalion E-ffect and Some Proposed Solutions:· Leadership Quarterly I I (2000): 389-4 I 5. 82. J. Wat~n. "When Diversity 1'raining Goe.~ Awry:· Black b sues in Higher Educarion. January 24. 2008. I I : E.L. Paluck and D.P. Green. .. Prejudice Reduction: What Works? A Re\riew and Assessment of Research and Practice:· Annual Review ofl'syclwlogy 60. no. I (2009): 33~7: M.M. Duguid alld M.C. 1ll0mas-Hunt. "'Condoning Stereotyping? How Awareness of Stereotyping Prevalence Impacts Expre.~~ion of Stereo- types:· Journal of Applied Psychology 100. no. 2 (20 15): 34:>-59: L.M. Brady et al.. “It’s Fair for Us:
Diversity Structures Cause Women to Legirimize
Discrimination:· Journal of Experimeural Social
l’.rychology 57 (20 15): 100-10: F. Dobbin and
A. Kalev. “Why Diversity Programs fait·· Han:arrl
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87. J. Luft. OfH,manlmertu:liott (Palo Alto. CA:
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see J. HaJJ. “Communkation Revishoo:· California
Mtmagemem Review 15 (1973): 56-67. For recent
discll~~ion of the Johari blind spot. see AAvt.B.
GaUrein et al.. “You Spy with Your Little Eye:
People Are ‘Blind· to Some of the Ways in Which
They Are Consensually Seen by Others:· Journal of
Research in Personality47. no. 5 (2013): 464-7 1:
A.-M.B. Gallrein et al .. “I Still Cannot See It-a
Replication of Blind Spots in Self- Perception …
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88. S. Vazire and M.R. Mehl. “Knowing Me.
Knowing You: 1be Accuracy and Unique Predictive
Validity of Self-Rating.< and Other-Ratings of Daily Behavior ... Joumal of PersonaUry and Social Psychol- ogy95. no. 5 (2008): 1202- 16: D. Leising. A.-M.B. GaUrein. and M. Dufner. "Judging the Behavior of People We Know: Objective Asses.~;menL Confimta- tion of Preexisting Views. or Both?:· Personality and Social l'sych<>logy Bulletin 40. no. 2 (2014): 15>-63.
89. T.F. Pettigrew and L.R. Tropp. “A Meta-Ana-
lytic Test of Intergroup Contact Theory:· Joumal of
l’ersonalify and Social l’.rych<>logy 90. no. 5 (2006):
75 1-83: Y. Amichai-Hantburger. B.S. Hasler. and
T. Shani-Shennan. ··Structured and Unsttuctured
Intergroup Contact in the Digital Age:· Computers
in Human Belw.-ior 52 (20 15): 515-22.
90. l’lle contact hypothesis wa~ first introduced in
G. W. Allpon. Tlte Nature of Prejudice (Reading.
MA: Addison-Wesley. 1954). Chap. 16.
91. K. Grimmell. “People Behind Success of Pulp
and Paper Miu:· Peace Rh·er Reconl-Gaz.eue.
14 September20 10.
92. W. Danielson. ”A Preview of the front-Line
Leader with Chris Van Gorder:· Podcalit in Tlte
Emrepreneur’s library. (3 November 20 14).
23:44:00: I. MacDonald. “Leading the Way:
Scripps Health CEO Takes Hands-on Approach to
FrontJ ine Staff Engagement.” FierceHealthcare.
9 April20 15: C. Van Gorder. Th< Front-lin< Leader: Building a High- Performance Orga- nizat;onfmm the Ground Up (San Francisco: Jossey-Bass. 201 5): C. Van Gorder. ··seven Simple Strategie.~ for frontline Leaders:· USCPrice (Los Angeles: University of Southern Califomia. 3 February 201 5). http://exechealthadmin.usc.edu/ blog/seven-simple-strategies-for-frontline.leaders (acce.<-gical Science 23. no. 9 (2012):
97:>-78: J.L. Skorinko and S.A. Sinclair. “Perspec-
tive Taking Can lncre.a.~e Stereotyping: The Role
of Apparent Stereotype Confirmation: · Journal of
Experimelllal Social Psychology 49. no. I (20 13):
10- 18.
95. A. Sugimoto. ”English Is VitaL Rakuten Boss
Says. but It Isn’t Everything:· NUd:ei Weekly
(Tokyo}. 22 April20 13: H. Mikitani. “Why Japan·s
Top £.Shopping Site Use.~ English a~ Company
Language:· EJ ltrsiglu. 22 April2016.
96. There is no consensus on the meaning of global
mindset. The elements identified in this book are
common among mo.lit of the recent \\Titing on this
subject. See. for example: S.J. Black. W.H. Mobley.
and E. Weldon. ”The Mindset of Global Leaders:
lnquisitivene.~~ and Duality: · in Ad\’lmt:e.1 in Global
uadership (JAI. 2006). 181-200: 0. Levy et
al.. “What We Talk About When We Talk About
‘Global Mindsef: Managerial Cognition in Multina-
tional Corporation.~:· Journal of lmtrn(Jfimwl
Business Studies 38. no. 2 (2007): 231-58: S.
Beechler and D. BaltzJey … Creati ng a Global Mind-
set:· Chief uaruing O!Jicer 7. no. 6 (2008): 40-45:
M. Javidan and D. Bowen. ··The ‘Global Mindsef
of Managers: What It Is. Why It Matters. and How
to Develop tt•• Organizational Dynamics 42. no. 2
(2013): 14>-55.
97. A.K. Gupta and V. Govindarajan. “Cultivating a
Global Mindset:· Academy of Managemtlll Exeett·
til·e 16. no. I (2002): I 16-26.
98. T. Maak. N.M. Pless. and M. Borecka. “Devel-
oping Responsible GlobaJ Leaders. ·· Ath·ances in
Gl<>bal uadersltip 8 (20 14): 339-64: P. Caligiuri
and C. Thoroughgood. ··Developing Responsible
Global Leaders through Corporate-Sponsored Inter-
national Volunteerism Programs.” Organizmimwl
Dynamics 44. no. 2 (2015): 138-45.
99. A. Kumar. “IBM Corporate Citizenship Team
in Action in Kuching. Malaysia:· CIO Asia.
12 October 2012.
100. M. Glyn n . .. Putti ng Business Skills to Work-
in a Brazilian Rainfore.~t:· Buffalo News. 9 August
2015: S. McCabe. –2016 EY-E.anhwatcb Ambassa-
dors Program Donates 3.000 Hours of Research to
BraziL Mexico:· Accouming Today. 8 J uly 2016.
CHAPTER4
I. Earls Restaurant~. ··r he E.arl~ Experience:·
( YouTube. 26 May 20 14 ). hnps://www. youtube.
com/watch?v=_ebxi8gQc60. Video (accessed 4
.February 20 17): Earls Restaurant~. Earls Kitdttll
+ Bar: 71te Leadership Log. (Vancouver: 14
August 2015): Gias.ttr Organizmiou (Boise. Idaho: Elevate.
20 16). pp. 167-70. Some employee quotations are
from the web site.~ indeed.c:a and gla.~lidoor.ca.
2. Emotions are also cognitive proce.~~;es. However.
we use the narrow definition of cognition as a well-
used label referring only to reasoning processe.~.
Also. this and other chapters empha~ize that emo-
tional and cognitive proce.liSe.~ are intertwined.
3. For discussion of emotions in ntarketi ng.
economics. and sociology. see: M. Hubert. “Does
Neuroeconomics Give New Impetus ro Economic
and Consumer Research? … Jounwl of Economic
Psydwlogy31. no. 5 (2010): 8 12- 17: D.O. Frank.<. Neurosociology: The Nexu.f be1wceu Neuroscience tuul Social Psychology lturoductimt. Neurosociology: 1'he Nexus between Neuroscience and SociaJ Psychology (New York: Springer. 20 10): N. Marti ~L<. "Can Neuroscience lnfonn Economic.~? Rationality. E.moti011.~ and Prefere11ee Formation.·· Cnmbritlge lou mal of Econ<>mics 35. no. 2 (20 I I ): 25 1–67:
H. Plassmann. T.Z. Rams0y. and M. MiJosavljevic.
“Branding the Brain: A Critic-.al Re\•iew and
Outlook:· Journal of Consumer P.ryclwlogy 22. no.
I (20 12): 18-36.
4. AJthough definitions of emmhm vary. the
definition stated here seems to be the most widely
accepted. See. for example. N.H. Frijda … Varieties
of Affect: Emotions and Episodes. Mood~. and
Sentiments: · in 17te Nmure of Emotimt: Fundamental
Question.f. ed. P. E.kntan and R.J. Davidson
(New York: Oxford University Press. 1994). 59–67:
H.M. Weiss. “Conceptual and Empirical foundation.~
for the Study of Affect at Work:· in Em01ions in 1he
IV<>rkplace. ed. R.G. Lord. R.J. Klimoski. and
R. Kanfer (San Francisco: Jos.-62.
7. R.J. Larson. E. Diener. and R.E. Lucas. “Emotion:
Models. Mea.~ure.~. and Difference.~:· in Emmhm.f
iu 11te Workplace ed. R.G. Lord. R.J. Klimoski.
and R. Kanfer (San franc isco. CA: Jossey-Bass.
2002). 64- 113: L.J’. Barrett et al.. ”The Experience
of Emotion:· Annual Rerit!W of Psychology 58. no.
I (2007): 37:>-403: M. Yik. J.A. Rus.n II. no. 4 (201 1): 705-3 1.
8. R.J’. Baumeister. E. Bratslavsky. and C. Finke-
nauer . .. Bad Is Stronger 1ban Good:· Rel’iew of
General l’.rychol<>gy 5. no. 4 (2001): 32:>-70:
A. Vaish. l . Grossmann. and A. Woodward … Not
AU Emotion.~ Are Created Equal: The Negativiry
Bias in Social-Emotional Development ..

Endnotes
Pn-chologirol Bull.rm IJ.I. no. 3 (2008): 383-403:
R.H. Fazio et aL ··Posau”·e Versus Negative
Valence: Asymmetnes an Attitude Formation and
GeneraJ ization a..~ Fundamental Individual Differ.
ences:· in Ath·ancts itr E.Apttriml’ulbl Social Psy·
t·hology. ed. J.M. Olson and M.P. Zruma (Academic
Press. 2015). 97- 146: K. Bcbb11\glon et al.. “The
Sly Is Falling: Evidence of a Negativlly Bias in the
Social Transmission of lnform:n10n. ·· £•’0/wi.bn
and Human Beiltn-iOI’ 38. no. I (2017): 92-101.
9. A.P. Brief.Anitudts In cmd around Organi;..arions
(Thousaod Oaks. CA: Sage. 1998): A.H. Eagly
and S. Chaiken . .. The Advantages of an Inclusive
Definition of Attitude:· Socit,J Cog,iii()lf 25. no.
5 (2007): 582-602: G. Bohner and N. Dickel.
“Auirudes and Attilude Change,” AmwtJI Rev;ew
of Psychology 62. no. I (201 1): 39 1-4 17. The
definition or attitudes is ~ull being debated. First.
11 is unclear \\’hether an attitude includes emotions
(affect). or \\ hetber emoiJOns tnfluence an ani rude.
We lake !he Iauer •-· Ahhough emooons influ-
ence and are closely connected to amtudes. an atU·
IUde is best defined as an C\ aluataon of an anitude
object That evaluation i.s llOt always conscious.
however. Second. a few writers argue that attitudes
are formed each lime they think about the attitude
object which is contr.try to che troditio naJ view that
attitudes are fairly stable predi ,.pos11ion.~ tov.·ard the
alii rude objecL Tlurd. although less of an issue now.
some anirude models refer only to the “feelings-
component. “hereas “””e ‘~ a111mde as a three-
component construct (behcf>. feebng<. behaviounl 1ntentions). Few \'atiO'.b defimuons of attitude and d1scussion of these ,'af'iauont. see I. Ajzen. "Nature and Operation of Attitude~ ... Amwal Review of Psychology 52 (2001): 27-58: 1). Alharracln el al.. "Attitudes: introduction and Soor)e." in nu: Handbook of Aui~~gnitiw• Sdmus II. no. 3 (2007): 97-1~: B.
Gawronski. “Ed•tonal. Allllude< Can Be Measured! But What ls an Attitude? ... Socil,/ Cogn;tion 25. no. 5 (2007): 573- 8 1: R.S . Dalal. "Job Allirudes: Cognilion and Affect." m Htwlbook of Psychology. Secmul Ellition (John Wiley & SOl><, Inc .. 2012). 10. Neuroscience has a s lightly more complicated distinction in that conscaou~ awareness is .. feeling a feeling .. whereas ••feeling" I S a nonconscious sensing of tbe body iUle ern~ b) emcxion. "tuch ttself is a nCfiStS reported by sa-eral ocloolars. as
~ell as tact I k:ntw.1edge. suuctUJ’e). See WJ. Bed:t-:r
and R. Cropanzano. “Orgaruz.auonal Neunxci-
co>ee: The Pmmose and Prospects of an lllnergong
Dascapline … Journa/ t>fOrgani:tttimwl BtJrtt~·ior 31.
no. 7 (20 I 0): I 055-59: D. Kahneman. Tltinking
FaM mul Slow (New York: Farrar. Sti’UU’\ and
Goroux. 2011).
l2. D. Trafimow e1 al . . .. It ls lrrele … am. but h
Maner<: Using Confluence Theory 10 Predo<:llbe Influence of Bebefs on E''aiuahons. AlUludes. and lntenllon<." Emopeon JoiUII-23:
A. Moors. “Automaticity: Componcnual. Causal,
and Mechanistic Explanations.” Amutal R~l’it!w of
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16. A. R. Damasio./Nscartt!s· Error: Em01ion.
RatSQtt, tmd tM H1mUJn Btoin (NC\\ Yotl~ Put-
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Dalgleish 111\d M. Power (San Francisco: Jossey-
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\VIrlll Httpptms: Body aud Emotiott ;, tlrt! Making
of Coll.fcit>tt.w~ss (N ew York: H arcoun Brace
and Company, 1999): J.E. LeDoux. “EmOiion
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46. For neurological evidence that people with
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tions. see W.D.S. Killgore et al. .. Emotional
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ro Dynamic Change.~ in Facial Trustwonhine.~:·
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47. The hierarchical nature of the four El dimen.
sions is discussed by Goleman. but it is more
explicit in the Salovey mxl Mayer model. See D.R.
Caruso and P. SaJovey. Th~ Em01ionally ltuelligenr
Manager (San Francisco: Jossey-Bass. 2004). This
hierarchy is also identified (without the self-other
distinction) as a sequence in D.L. Joseph and D.A.
Newman. ··EmotionallnteJJigence: An Integrative
Meta·Anal ysis and Ca.«:ading Model:· Jmrmal of
Applied l’sydtalogy95. no. I (2010): 54-78.

End n o t es
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50. E.J predict~ perfonnance in high emotional
labour jobs but not low emotional labour jobs.
El has a significant but modest correlation with
supervisor ratings of all fonns of performance.
See D.L Joseph and D.A. Newman. ”Emotional
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51 . K. Rector. “Baltimore Police Recruit~ Receive
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IU 2016. Randstad Holding nv (Amsterdam:
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more per week. Respondents were asked: .. How
satisfied are yo u in general abo ut working with
your current employer?·· This exhibit shows
results from selected countries across the fult
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58. 1’reasury Board of Canada. 2014 Public Sert·ice
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EN-17
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A recent Kelly Service.~ Workforce Index sun •ey
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(201 3): 222–36.
6 1. For a review of the various job satisfaction
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Second Edition. ed. LB. Weiner (New York: John
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62. D. FarreJJ … Exit. Voice. Loyalty. and Neglect
as Re.~po11.~s to Job Dissatisfaction: A Multidimen-
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Jorrrna/26. no. 4 ( 1983): 596-607: M.J. Withey and
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Voice. and Loyalty with Multiple Exit Options:
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of Pttblic AtbninistrtJtion Research and Theory 25.
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ti ve Sciences A.~ociation of Canada. Organizational
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63. T.R. Mitchell. B.C. Holtom. and T.W. Lee.
.. How to Keep Your Best Empl oyee.~: Developing
an Effective Retention Policy.·· Academy of
Managemem Ext!cuti~yalry:
Responses to Decline in Firms. Organiz.ations, tmd
Swtes (Cambridge. MA: Harvard University Pre.~~-
1970): E.. A. Hollmann … Exit and Voice: Organiza.
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66. J.D. Hibbard. N. Kumar. and L.W. Stem. ··Exam-
ining the impact of De.«ructive AclS in Marketing
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. ;When Job Di.~atisfaction Lead.~ to Creati\rity:
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67. M.J. Withey and J. R. Gellatly. –Situational and
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Sciences Assodation ofC”tmada. Orgauizlllioual
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.. Breaking the Silence: The Moderating Effect~ of
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70. T.A. Judge et al.. ··The Job Satisfaction-Job
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Beha.-ior 24. no. 6 (2003): 753-77: Saari and
Judge. “Employee Attitude.~ and Job Satisfaction …
Other studies report stronger correlations with
job performance when botll the belief and feeling
components of job satisfaction are consistent with
each other and when overaJI job attitude (satisfac-
tion and commitment combined) is being measured.
See D.J. Schleicher. J.D. Wan. and GJ. Greguras.
··Reexamining the Job Satisfaction-Performance
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nal of Applied Psychoi<>gy89. no. I (2004): 16~77:
HarTison. Newman. and Roth. “How lmponant Are
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job satisfaction and employee perfonnance is also
consistent with emerging research on the outcomes
of positive organizational behaviour. for example.
see: J .R. Sunil. “Enhancing Employee Performance
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71. However. panel studie.~ sugge.~ that satisfaction
has a stronger effecl on performance than the other
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.. Happiness at Work:· lmernmional Journal of
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‘””w.onttt.com (acceSJed 26 June 2012).
101. P. McDonald. ” Worl.place Sexnal Harossmen1
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mt Btdlml’ing Work wrtl Cm·tgh•ing in Catwtla.
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108. Lazarus. Sn-ess and Emmimt: A New Syutht!·
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109. M. l.lckerman and M. Gagne . .. The Cope
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116. B.H. Martin and R. MacDonnell … Is Telework
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12 1. “Vigilant Staff Appreciate.~ T ight·Knit. Family
Environmem:· Mmureats Top Employers 2013
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Global Keeps Staff Energized with Free Meats:·
Mom rears Top Employers 2014 (Momreal Gauue
insert). 20 February 20 14. 18.
122. M. Tuckey et al …. Hindrances Are Not
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123. M.H. Abel. ··Humor. Stress. and Coping Strat·
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Psychological WeJI.Being:· Humor: ltueruaJimwl
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M. McCreaddie and S. Wiggins … The Purpose
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124. 0. Ketru1len et aJ.. “Greater Levels ofCardio·
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126. C. Viswesvaran. J.l. Sanchez. and J. Fisher.
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CHAPTER 5
I. R. Yerema and K. Leung. ··Desjardins Group:
Recognized as One ofCanada”s Top 100 Employ.
ers (201 7):· Canada·s Top 100 Employers 2017,
Mediacorp Canada. 6 November20 16. http://con.
tent.e luta.c.altop-employer.desjardins: “‘Canada·s
Be.~t Employers 2017 :· Cantulitm Business.
December 2016. 27-29. 31-33. 37. 39: ··vancity
1’ops Best 50 Corporate Citizen.~ List in Corporate
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Leung. “Desjardins Group: Recognized as One of
Canada·s Top Employers for Young People (2017):·
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2. C. C. Pinder. \York Mmi\·aiion in Organizational
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Actulemy of ManagemeUI Re”·iew 29 (2004):
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3. W.H. Macey and B. Schneider. ··The Mean-
ing of Employee Engagement:· 1nd11S1rial and

Endnotes
Organiuuimwll’sychology I (2008): J-30: A.M.
Saks and J.A. Gruman. ··What Do We Really Know
about Employee Engagement?:· Human Resource
Dnelopme111 Q .. amrly 25. no. 2 (2014): 155-82.
4. D. Macleod and N. Clarke. Engaging for S”ccess:
Elllumciug Performtmc~ through Employee Engage-
men/ (London: UK Govenunent. Depanment for
BlLyu Engage-
melll (Chic-.ago: Aon Hewitt April 26. 2014):
Deloitte. Human Capiwl Trends 2016: Out of
Sync?. (Toronto: Deloitte. 6 May 20 I 6): .. Canadian
Organizations Struggle to Engage Employees:·
News release for Conference Board ofCal\ada
(Ottawa: Canada News Wire. 13 J uly 2016).
7. Several sources attempt to identify and organize
the drivers of employee engagement. See .. for
example: D. Robinson. S. Perryman. and S. Hayday.
111e Dri\•ers of Employee Eltgagement. Institute
for Employment Studie.<. (Brighton. UK: 2004): W.H. Macey et aL Employee Engagemem: Tools for Analysi.f. Prac1ia. and Cmnpelitive Admmage (Malden. MA: Wiley-Blackwell. 2009): Macleod and Clarke. Engaging for Success: Enhtmt:ing Performance through Employee Engagemem: M. Stairs and M. Galpin. "Positive Engagement: From Employee Engagement to Workplace Happi- ness:· in Oxford Handbook of Posi1ive P.f)t:hology of Work. ed. P.A. Linley. S . HarTington. mxl N. Garcea (New Yo1·k: Oxford University Press. 201 0). 155-72. 8. 1be confusing array of definition.~ about drives and lleeds has been the subject of criticism for a half cenrury. See. for example. R.S. Peters. ··Motive.< and Motivation:·l'hilosophy 31 (1956): 117-30: H. Cantril. "Sentio. Ergo Sum: 'Motiva- tion· Reconsidered:· Journal of Psychology 65. no. I ( 1967): 9 1-107: G.R. Salancik and J. Pfeffer ... An Examination of Need-Satisfaction Models of Job Attitudes:· Administrative Scietlt:e Quanerly 22. no. 3 ( I 977): 427-56. 9. D.W. Praff. Dri\'t': Neurobiological and Molecular Mechanisms (if Sexual Moth·mimt (Cmnbridge. MA: MIT Pres.<. 1999): A. Blasi. ··Emotions and Moral Motivation:· Journal for the 11Jeory of Socia1Behaviour29. no. I ( 1999): 1-19: T.V. Sewards and M.A. Sewards. ··Fear and Power- Dominance Drive Motivation: Neural Repre- sentations and Pathways Mediating Sensory and Mnemonic inputs. and Outpuls to Premotor Struc- ture.~:· Neuroscietlt:e and Biobehaviorol Reviews 26 (2002): 553-79: K.C. Berridge. ··Moti vation Concept~ in Behavioral Neuroscience:· Physiology & BehOI'ior 8 1. no. 2 (2004): 179-209. We dis- tinguish drives from emotions. but future research may find that the two COilCept~ are not so differenl a~ is stated here. Woodworth is credited with either coining or popularizing the term "'drive.~·· in the context of human motivation. His classic book is certainly the first source to discus..~ the concept in detail. See: R.S.Woodworth. Dytltlmic Psy choh>gy
(New York: Columbia University Press. 1918).
10. G. Loewenst.ein. ··The Psychology of Curiosity:
A Review and Reinterpretation.” Psy cltoh>gical
Bulletin 116. no. I (1994): 75-98: A.E. Kelley.
“Neurochemical Networks Encoding Emotion
and Motivation: An Evolutionary Perspective:·
in \Vho Needs Emotions? Tlte Brain Meets 11te
Robot. ed. J.M. Fellous and M.A. Arbib (New
York: Oxford University Press. 2005). 29-78: M.R.
Leary. “Motivatiol\al and Emotional Aspect~ of
the Self:· Annual Review of Psychology 58. no. I
(2007): 3 I 7-44: L.A. Leoni. S.S. Iyengar. and K.N.
Ochs1ler. ··Born to Choose: 1lle Origins and Value
of the Need for ControL” Tn11ds in Cognifh·e Sd-
ences 14. no. 10 (2010): 457-63.
I I. K. Passyn and M. Sujan. ··Self-Accountability
Emotions and fear Appeals: Motivating Behavior:·
Journal ofComumer Research 32. no. 4 (2006):
58:>-89: S.G. Barsade and D.E. Gibson … Why
Does Affect Maner in Organizations?:· Academy of
Management Perspectives 21. no. 2 (2007): 36-59.
12. A.R. DanJaSio. 77., Feeling of IVIIIlt Happ1!1L<: Body ami Emotion in1he Making ojC"onseiOtt.fness (New York: Harooult Brooe & Company. 1999). p. 286. 13. S. Hitlin. ··Value.~ as the Core of Personal Iden- tity: Drawing Links between 1\vo Theorie.~ of Self:· Sociall'sychoi<>gy Quarterly 66. no. 2 (2003):
I JS-37: B. Monin. D.A. Pizarro. and J.S. Beer.
“Deciding Versus Reacting: Conceptions of Moral
Judgment and the Reason-Affect Debate:· Reriew
ofGenemll’sy clwi<>gy I I. no. 2 (2007): 99-J I 1:
D.O. Knoch and E.E. Fehr. ··Resisting the Power
of Temptation.~. 1lle Right Prefrontal Conex and
Self-Control:· Annals of the New York Academy of
Sciences I 104. no. I (2007): 123.
14. A. H. Ma.ee.
··Maslow: Man Interrupted- Reading Manage-
menl 1lleory in Context·· Managemelll Dedshm
43. no. 10 (2005): 137>-95.
19. A.H. Ma~;low. “‘A Preface to Motivation
Theory:· l’.rydwsomatic Medicine 5 ( I 943): 8>-92.
20. S. Kesebir. J. Graham. and S. Oishi … A Theory
of Human Needs Should Be Human-Centered. Not
Animal-Centered·· Per.fpetlires 011 Psychological
Science 5. no. 3 (20 10): 315-19.
2 1. A. H. Ma~;low. Maslow on Managemem (New
Yo rk: John Wiley & Sons. Inc .. 1998).
22. M. Gagne and E.L Deci. ··Self-Determination
Theory and Wo1·k Motivation:· Journal (if Organi-
UJtional Belw,.ior 26. no. 4 (2005): 33 J-62: C.P.
Cerasoli. J .M. Nicklin. and M.T. ford. ‘”Intrinsic
Motivation and Extrinsic Incentives Jointly Predict
Performance: A 40-Year Meta-Analysis:· Ps)t:ho-
logicaiB .. IIerin 140. no. 4 (20 14): 980- 1008.
23. 0 . Thomas. “‘HO\v Airbnb Manages Not to
Manage Engineers:· readwrile. J une 5. 2014: M.
Curtis. “‘Tbe Antidote to Bureaucracy Is Good
J udgment:· Airbnl> News. Airbnb. May 15.2015.
lmp://nerds.airbnb.comhhe-antidote-to-bureau-
cracy-is-good-judgementl. Employee quotations are
from Glassdoor in20 15 and 2016.
24. M. Gagne and D. Shave. ··Autonomy in the
Workplace: An E.~~ntial Ingredient to Employee
Engagement and Well-Being in Every Culture.”
in Human Autonomy in Cross-Culwrol Conrex1. ed.
V.I. Chirkov. R.M. Ryan. and K.M. Sheldon. Cm.-87: E.L. Deci and M.R. Ryan. ·111e
Importance of Universal Psychological Need~ for
Understanding Motivation in the Wo1·kplace … in n1e
Oxfonl Htmdlx’H>k of \York Engagemem. MOii\’llliOtl,
ami Self-Delerminmiott Theory. ed. M. Gagne
(New York: Oxford University Press. 20 14). 13-32.
25. A. Kohn. Punished l>y Rewartlf (Bost.on:
Houghton Miffiin. I 993): C.C. Pinder. \York Moti-
‘ ‘ation in Organiz.ational Behavior. 2nd ed. (New
Yo rk: Psychology Pre.<-<. 2008). Chap. 3. 26. C.C. Pinder. \York MOihtJiiOil in Organi:.a1ional Behavior (Upper Saddle Ri ver. NJ: Prentice HaJI. 1998). 86-91: C.P. Cerasoli. J.M. Nicklin. and M.T. Ford. "intrinsic Motivation and Extrinsic Incentives Jointly Predict Perfonnance: A 40-Year Meta-Analysis:· Psydwlogical Bulle1in 140. no. 4 (20 14): 980- 1008: Y. Garners and U. Konrad<. ··The Effect of financialllx:entive.~ on Perfor- mance: A Quantitative Review of individual and Team-Ba.~d Financial Incentives:· Journal (if Occupa1imwl and Organiz.ational Psychology 87. no. I (2014): 102-37. 27. J. Schroeder and A. Fish bach. ··How to Moti- vate Yourself and Others'? Intended and Uninlended Consequences:· Research in Organi!alional Behav- ior 35 (2015): 12:>-41.

EN-22 Endnotes
28. D.C. McClelland. 77~< Ad!ie~·ing S.>ciety
(New York: Van Nostrand Reinhold. 196 1): D.C.
McClelland and D.H. Bumham … Power Is the Great
Motivator:· Harwml Bus;ness Revit! w 73 ( 1995):
126-39: D. Vredenburgh andY. Brender. “11te
Hierarchical Abuse of Power in Work Organiza.
tions:· Journal of Busines.f Erltics 17 ( 1998):
1337-47: S. Shane. E.A. Locke. and C.J. Collins.
.. Entrepreneurial Motivation:· Human Resouru
Mtmagemem Review 13. no. 2 (2003): 257-79.
29. D. C. McClelland. 71.e Achie.-ing !i<>ciety (New
York: Van No.<>rwnilies in 2013.
Randstad Canada (Toronto. ON: October 2013).
42. Expectancy theory of motivation in work
settings originated in V. H. Vroom. Work and Mot;.
•·aJiOtl (New York: Wiley. 1964). 1’l1e version of
expectancy theory presented here was developed by
Edward Lawter. Lawler’s model provides a clearer
presentation of the moders three component~.
P-to-0 expectancy is similar to .. instnunentality ..
in Vroom ·s original expecta1x:y theory model. The
differe1x:e is that instrumentality is a correlation
wherea.~ P·to.O expectancy is a probability. See
J.P. Campbell et aL. Mauagerifll Behtn:ior. l’erfonnauce.
and Effectil~ness (New York: McGraw-Hill. 1970):
E. E. Lawler IU. Mmiwu;on in Work Organiwrhms
(Monterey. CA: Brooks-Cole. 1973): D. A. Nadler
and E.E. Lawler … Motivation: A Diagnostic
Approach:· in Perspecli\>e.f on Behavior in Orga-
lli:tuions. ed. J.R. Hac.kman. E.E. Lawler 111. and
L. W. Porter (New York: McGraw-HilL I 983).
67-78.
43. M. Zeelenberg et al.. .. Emotional Reactions to
the Outcontes of Decisions: The Role of Coun.
terfactual Thought in the Experience of Regret
and Disappointment:· Orgtmi:tuional Beharior
and Human Dedshm Processes 75. no. 2 ( 1998):
117-41: B.A. Mellers. ·-choice and the Relative
Plea~ure of Consequence.~:· Psyclwlogical Bul-
letin 126. no. 6 (2000): 910-24: R.P. Bagozzi.
U.M. Dholakia. and S . Ba.wroy. ··How Effortful
Decisions Get Enacted: The Motivating Role of
Decision Processes. Desires. and Anticipated
Emotion.~:· lou mal of Behavi()rtJI Deci.~;on Making
16. no. 4 (2003): 273-95. The neuropsychology
of valences and ilS as.~ociated .. expected utility”” is
discussed in: A. Bechara and A.R. Dama.~io. ··The
Somatic Ma1·ker Hypothe.~is: A Neural Theory of
Economic Dec.ision:· Game.1 and Economic
Beha••ior 52. no. 2 (2005): 336-72.
44. Nadler and Lawler. “Motivation: A Diagnostic
Approach:· pp. 70-73.
45 . .. New Research Shows Widening Gap between
Pay and Perfonnance in UK:· news relea.~
(Lo1ldon: Willis Towers WalSon. September 25.
20 14): United State.~ Office of Personnel Manage-
ment. Federal Employee Viewpoim Sun·ey Re.~ults.
Office of Personnel Management (\Va.~hington.
DC: 201 5). Treasury Board of Canada Secretariat.
“2014 Public Service Employee Survey Resull< by Question for the Public Sen•ice ... Public Service Employee Suf\'t'Y (Ottawa: Government of Canada. 20 May 20 15) (accessed 14 Marcll20 17): Willis 1'0\vers Watson. Under Pnss1u-e to Remain Relewmt. Employers Look 10 Modern;:,e the Employee Value Proposition. (London: Willis Towers WalSon. 9 Sep lmpro•·e Human Per-
formance (New York: Harper & Row. 1978). pp.
48-57: F. Luthans and R. Kreitner. Organiz.ational
Belta\•ior Modificmion aJUI Beyond (Glenview. JL:
ScotL Foresman. 1985). pp. 85-88.

Endnotes
52. B.F. Skinner. Sdenc~ and Human Behavior
(New York: 1lle Free Press. 1965): Miltenberger.
Behavior Modijicarion: Principles and Proc:·edures.
Chap. 4-6.
53. T.R. Hinkin and C.A. Schriesheim … If You
Don’t Hear from Me You Know You Are Doing
Fine:· Cornell Horel & Resumnwr Admiuislratiou
Quarterly 45. no. 4 (2004): 362-72.
54. L. K. Trevino. ·111e SociaJ Effects of Punish-
ment in Organizations: A J ustice Perspective:·
Academy of Managemem Review 17 ( 1992): 647-
76: L.E. Atwater et aJ .• ··Recipient and Observer
Reactions to Discipline: Are Managers Experienc-
ing Wishful Thinking?:· Journal oJOrganiuuional
Behavior22. no. 3 (200 1): 249-70.
55. G.P. Latham and V.L. Huber … Schedules of
Reinforcement: le.~wns from the Past and L~~ues
for the future:· Jmmwl oJOrganiuuional Belta\•ior
Managemew 13 ( 1992): 125-49: B.A. Williams.
”Challenges to Timing-Based Theorie.~ of Operant
Behavior:· BeluwiourtJI PJVCesses 62 (2003):
115-23.
56. K. Robson et al.. .. Is It All a Game? Under-
standing the Principle.~ of Gamification.·· Business
Horiuglu
and Act;on: A Soc;al Cogttirive 111eory (Englewood
Cliffs. N.J: Prentice Hall. 1986): A. Bandura.
··Social Cognitive Theory of Self-Regulation.··
Organiwrional &hal’ior and Human Dedshm
Pmce.gy 136. no. 3 (2009): 27 1-86.
61. A. Pe_o;curic and W.C. Byham … The New Look
of Behavior Modeling:· Training & De1-·elopmem
50 ( 1996): 24-30.
62. A. Bandura … Self-Reinforcement: Theoretical
a1ld Methodological Considerations: · Beha\•iorism
4 ( 1976): 135-55: C.A. Fr3)1le and J.M. Geringer.
.. Self-Mallagement Training for Improving Job
Performance: A Fiekl Experiment involving Salespeo-
ple:· Joumal of Applitxl Psychology 85. no. 3 (2000):
361-72: J.B. Vancouver and D.V. Day … bldustrial
and Organisation Research on Self-Regulation: From
Constructs to Applicatio~L<:· Applied Psychology: till buenuuional Journal 54. no. 2 (2005): 155-85. 63. City of Toronto. Budget20J6: lmerual and Ftuau- cial Sen·ices: 311 TOIT)IUO. (Toronto: Ciry of Toronto. 20 16): City of Toronto ... Performance Reports: 311 Toronto:· (foronto: City of Toronto. 20 17). http:// wwwl.toronto.ca (acceack Flows (San Jose. CA:
Adobe Systems. 20 14). YooTube video: A. Fisher.
..How Adobe Keeps Key Employees from Quit-
ting:· Forume. June 16. 2015: P. Cappelli and A.
Tavis. “‘The Perfonnance Management Revolution:·
Han:arrl Bus;ness Re,•iew 94(201 6): 58-67: D.
Morris … 2017: The Year Performance Reviews
Get the Axe:· Com·ersa1ions. Adobe System.~.
1 I January 2017. https:/Jblogs.adobe.com/convers.a-
tions: D. Morris … Yes. You Can Reward Employ-
ees without Ratings and Rankings:· Com-ersations.
Adobe Systems. 16 February 2017. https://blogs.
adobe.comlconversations.
73. P. Drucker. J11e Effet:~il·e Executh·e (Oxford.
UK: Buuerwonh-Heinemann. 2007). p.22.
Drucker·s emphasis on strenglhs was also noted in
O.K. Whitney and A. Trosten-Bioom. 11ae Power of
Appndath·e Inquiry: A Practical Guide to Posiri••e
Change. 2nd ed. (San Francisco. CA: Berrett-
Keebler Publisbers. 201 0). p. xii.
74 . .. Mru1agement People: Geeting co Know You:·
RewiJ J~wel/er. 27 March 2012.
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12 . P.C. Nun. Why Decisions Fail (San Francisco.
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13 . E. Wine … field Research on Complex
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14. M. Hock and H.W. Krohne … Coping with
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Endnotes
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EN-36 Endnotes
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Endnotes
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EN-40 Endnotes
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19& 1): M. f’fau. E.A. Szabo. and J. Anderson.
“‘The Role and impact of Affect in the Process of
Re.~istance to Persuasion:· Humtm ComJmm;carhm
Research 27 (200 I): 2 I 6-52: o· Keefe. l’ersuasi·
ciation of Professional Executives of the Public
Service of Canada (May 15. 20 15).
84. C. Porath. ‘1be Leadership Behavior That’s
Most lmponant to Employees:· Han·ard Business
Rniew (May I I. 20 15).
85. T. Peters. ··The Brand Called You:· Fast Com-
pany. August 1997: J. Sills. ··Becoming Your Own
Brand:· l’sychology Today 4 1. no. I (2008): 62-63.
86. Building Your Brond: Persmwl Brand
\Veek. PricewaterhouseCoopers Canada. Retrieved
from: http://www.pwc.com/ca/en/campu.~·recruit·
ing/publications.lpwc.personal.brand.week·e·book·
2012-03-en .
87. C. Shea. ” HGTV star Scott McGillivray on
building a real estate and TV empire.” Canadian
Busines.f. May 6. 2016. http://www.canadianbusi·
nes.~.com/leadershiplscott·mcgillivray.income.
property/: author interview.
88. D. Strutton and L~ Pelton … E.fti!cts of lngratia·
tion on Lateral Relationship Quality within Sale.~
Team Settings:· Journal of Business Research 43
( 1998): 1-12: R. Vonk. ··Self-Serving lnterpretatio~L< of Flanery: Why Ingratiation Works:· Journal of Per· smwlity and Sociall'sychology 82 (2002): 5 I 5-26. 89. C.A. Higgins. T.A. J udge. and G.R. FerTis. " influence lactics and Work Outcome.~: A Meta· Analysis:· Joumal of Organizational Behavior 24 (2003): 90-106. 90. D. Strunon. LE. Pelton. and J. Tanner. J. F .. "Shall We Gather in dle Garden: 111e Effect of Ingratiatory Behaviors on Buyer Trust in Sale.~ people:· ltuh•strial Marketing Managemem 25 (1996): 151-62: J. o·Neil. ··An Investigation of the Source.~ of Influence of Corporate Public Relations Practitioners:· Public Relarions Rt!View 29 (2003): 159-69. 9 I. C.M. Falhe and G. Yuki. ·'Consequences for Managers of Using Single Influence Tactics and Combinations of Tactics:· Academy of Managemelll Joumal35 ( 1992): 638-52. 92. R.C. Ringer and R. W. Bos.~ ... Hospital Profes. sionaJs' Use of Upward Influence Tactic.s." Journal of Managerial Issues 12 (2000): 92-108. EN-4 1 93. G. Blickle. ··oo Work Values Predict the Use of lntraorganizational lnfluence Strategie.~?:· Journal of Applietl Sociall'sychol<>gy 30. no. I (2000):
196-205: P.P. Fu et al .. ·1’he Impact of Societal
Cultural Values and Individual Social Bel ief.~ on the
Perceived Effectiveness of Managerial Influence
Strategie.~: A Meso Approach:· Joumal Of lnrerna·
rimwl Business Swd;es 35. no. 4 (2004): 284-305.
94. This ha~ become the generaiJy.agreed definition
of organizational politics over the past two decades.
See: G.R . .Ferris and K.M. Kacmar. “Perception .. ~ of
Organizational Politics:· Journal ofMtmagemem
18 ( 1992): 93- 116: R. Cropanzano et aL ··The
Relationship of Organizational Politics and Suppon
to Work Behaviors. Attirudes. and Stre..~;..~:· Jounwl
<>/Organizational Behavior IS ( 1997): 159-80:
E. Vigoda. ··Stress-Related Aftennaths to Workplace
Politics: The Relationships among PolitiC$. Job
Distress. and Aggressive Behavior in Organiz.a.
tions:· Journal ofOrganiwrional Behav;or23
(2002): 571-9 1. However. organizational politics
was previously viewed a~ influence tactics out~ide
the formal role that could be either selfish or aJO’u·
istic. This older defi nition is Jess common today.
possibly bec.ause it is incongruent with popular
views of politics and because it~ meaning is too
ambiguou.~. For the older perspective of organiza.
tional politics. see: J. Preffer. Power in Organi:.a·
rhms(Boston. MA: Pitman. 198 1): Mintzberg.
Po wer ill and around Organizarions
95. C. Porath & C. Pean;on. ··The Price of Incivil-
ity:· Han:ard Busi11ess Rt!View. (January-February
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96. K.M. Kacmar and R.A. Baron … Organizational
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Processes. and an Agenda for Future Research:·
in Researc/1 in Personnel and Human Resources
Managemem. ed. G.R. Ferris (Greenwich. CT:
JAJ Pres.<. 1999). 1-39: Vigoda. ··Stress-Related Aftermath.~ to Wot·kplace Politic.~: The Relation. ships among Politics. Job Distres.~. and Aggressive Behavior in Organizations: C.· H. Chang. C. C. Rosen. and P.E. Levy. "'The Relationship between Perceptions of Organizational Politics and Employee Attitude.~. Strain. and Behavior: A Meta· Analytic Examination ... Academy of MllJwgemem Jounwl 52. no. 4 (2009): 779-SO I. The quotation is from: M. Lmldry. ··Navigating the Politic.al Mine. fie ld:· I'M Nen.-ork. March 2013.38-43. 97. L. Hull. "Coven War in the Wot·kplace . .. over the Holiday R01a:· Mail Online. 7 August 2013: ..Office Wars: Tis the Season to Be Spiteful." Officebmker Blog. 2013. hnp://www.officebroker. comlblog/. 98. C. Hardy. Srrategiesfor Rerreuchmem and TtmJaround: 111e Politics ofSun;i,•al (Berlin: Walter de Gruyter. 1990). Chap. 14: G.R. Ferris et aJ .. ··Perceptions of Organizational Politics: Prediction. Stress. Related Implications. and Outcome.~:· Human Re/ation.~ 49 ( 1996): 233-63: M.C. Andrews and K.M. Kacmar. ··Discriminat· ing muong OrganizationaJ Politics. J ustice. and Support:· Jmrmal of Organizarional Belta\•ior 22 (2001): 347-66. 99. S. Blazejewski and W. Dorow. ··Managing Organizational Politics for Radic-al Change: The Ca~;e of Beiersdorf.Lechia S.A .. Poznan:· Joumal <>/ Worltl B~<r3 ( 19& 1): 120-22: R.J. House. “Power
and Personality in Complex Organizations:·
Research in OrgtmiztJiimral Behavior 10 ( 1988):
305-57.
10 I. R. Christie and f . Geis. Swdies iu Machia\•eJ.
/ianism (New York: Ac-.ademic Press. 1970): S.M.
Farmer et aL “Putting Upward Influence Strategie.~
in Context.” Joumal of Organizational Behavior
IS (1997): 17-42: K.S. Sauleya and A.G. Bedeian.
··Equity Sensitiviry: Construction of a Measure
and Examination of IL~ Psychometric Properties:·
Journal ofMtmagemenr 26 (2000): 885-9 10.
CHAPTER 11
I. N. Solovay. & C.K. Reed. Tltt! but mel and
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2. J.A. Wall and R.R. Callister. “Conflict and IL< Management .. Joumal ofMtmagemetU. 2 1 ( 1995): 5 I 5-55: M.A. Rahim. Ma11aging Collf/ict in Orga- nizations. 4th ed. (New Bru11..~wick. NJ: Transaction Publishers. 2011). pp. 15-1: D. Tjosvold. Working Toge1her 10 Get Things Done (Lexington. MA: Lexington. 1986). I 14-11: D. Tjosvold. "Defining Conflkt and Making Choice.~ About hs Manage. ment .. buenuJiional Joumal of Conflict Manage· me111 17. no. 2 (2006): 87-95. 3. For example. see: R.R. Blake. H.A. Shepatd. and J .S . Mouton. Managing buergroup Conflict it~lndu..Hry (Houston: Gulf Publishing. 1964: K£. Boulding. ··Organization and Connict·· Conflict Resolution I. no. 2 (J une I 957): 122- 13: C. Argyris. ''11le lndi,ridual and Organization: Some Problem.~ of Mutual Adjuslment .. AdministraJi\•e Science Quarterly 2. no. I (I 957): 1-2: L Urwick. 111e Elemenrs of Admini.wmion, 2nd ed. (London. UK: Pitman. I 947). 4. Rahim. "Managing Conflict in Organizations:· in Cmwructiou Conflict Managemem ami Resolution, P. Fenn & R. Game.wn. eds. (London: E. & F N Spon. I 992): 386-395. 5. K.A. Jehn and C. Bendersky ... Intragroup Con. flic.t in Organizations: A Contingency Perspective on the Conflict.Outcome Relationship:· Research In Organi Thrive. CPP Global Human Capital
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7. B. Hewatt. “1lle long.tenn costs of not resolving
workplace conflicts:· Globe and Mail (July 16.
20 15).
8. F.R.C. de Wit. L. L. Greer. and K.A. Jehn. “The
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Journal ofApplietl Psychology 97. no. 2 (Mar
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EffecL~ on Angry Mood and Somatic Complaints:·
Journal of Occupational Healll1 Psychology 18.
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9. S. Fartlerov. ‘:American Airlines Flight Delayed
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20September20 1: M. O’Sullivan … fighting Kanga.
roo:· Canberrrl n’mes, 21 August 20 I 2. : .. American
Eagle flight Attendants· Argument Cause.~ 4.Hour
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14. P.J. Carnevale. “‘Creativity in the Outcomes of
Conflict … in The Handbook ofConflit:I Resolution:
Tlteory and Pmc1ice. ed. M. DeuL~h. P.T. Cole·
man. and E. C. Marcus. 2nd eel. (San francisco. CA:
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15. K.M. Eisenhardt. J.L. Kahwajy. and L.J.
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(July-August 1997): n-8: T . Greitemeyer et
al .. ··Information Sampling and Group Decision
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J. L. Kah,vajy. a1xl L.J . Bourgeois Ill. .. Conflict and
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16. K.A. Jehn & C. Bender.sky. “‘Intragroup conflict
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til’t>ScienceQuamrly44(March 1999): 1-2: H.
Guetz.kow and J. Gyr. “An Analysis of Conflict
in Decision. Making Groups:· Human Relmimu
7. no. 3 (Aug. 1954): 367-382. The notion of two
types of conflict date.~ back to Georg Simmel. who
de.~ribed two types of conflict: one with a personal
and subjective goal. the other which ha.~ an imper.
sonal and objective quality. See: Coser. The FtmC·
Iimu of Social Cmiflici. pg. 112. Contemporary
scholars use various labels for cask and relationship
conflict We have avoided the “cognitive” and
“aftfclive” conflict labels because cognitions a1xl
emotions are interconnected processe.~ in aU human
activity. A third type of conflicl process conflict.
is excluded due to limited research and some ques.
lions about its distinction from task conflict.
17. C.K.W. De Dreu. ” When Too LitdeorToo
Much Huns: E\•idence for a Curvilinear Relation.
ship between Task Conflict and Innovation in
Teams:· Joumal of Managemelll 32. no. I (fieb.
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Jehn … The paradox of intragroup conflict: a meta·
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18. R.S. Lau and A.T. Cobb. ··Understanding the
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19. G. Anders “Jeff Bezos Reveals his No. I
Leadership Secret:· F<>rbes (20 12): J. Kantor &
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in a Bruising Workplace … The New York Times
(August 15. 2015): N. Ciubotariu. “‘An Amazo.
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20. C.K. W. De Dreu and L.R. Weingart. ·1’a.r 25 (2004): 589-60: B.H. Bradley
et al.. “Ready to Rumble: How Team Personality
Composition and 1’ask Conflict Interact to Improve
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BenefiL~ ofTa.~k Connict in Teams: The Critical Role
of Team PsychologicaJ Safety Climate:· Journal of
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22. P.L. Curseu. S. Boros. and L.A.G. Oerlemans.
“Task and Relationship Conflict in Short.Term and
Long.Tenn Group.~ the Critic-.al Role of Emotion
Regulation:· /mernationa/ Journal of Conjlic1 Man·
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Endnotes
of the Relationship between EmotionaJ intelligence
and Leaders· Consttuctive Conflict Management:·
Group Pmcesses & ltuergroup Relations 16. no. I
(January I. 2013 20 13): 126-136.
23. J. Weiner. “Compa~ion: An Objective Form of
Empathy:· Awakin.org (September28. 20 15).
24. de Wit. Greer. and Jehn. ·1″he Paradox of Intra-
group Conflict: A Meta-AnaJysis:·
25. A.C. Amason and H.J. Sapienza. ”The EffeciS
of Top Management Team Size and Interaction
Norm.~ on Cognitive and Affective Conflict:· Jour-
nal of Managemem 23. no. 4 ( 1997): 495-516.
26. H. Barki and J. Hartwick. “Conceptualizing the
Consttuct of Interpersonal Conflict:· ltueruaJimwl
Journal oJCmifUct Managemeur 15. no. 3 (2004):
2 16-244.
27. M.A. Von Glinow. D.L. Shapiro. and J.M. Bren.
”Can We 1’alk. and ShouJd We? Managing Emo-
tionaJ Conflict in Multicultural Teams:· Academy
ofManngemem Rniew 29. no. 4 (2004): 578-592.
28. J.M. Bren. D.L. Shapiro. and A.L. Lyde.
.. Breaking the Bonds of Reciprocity in Nego-
tiations:· Academy of Managemelll Jouma/41
(Augustl998): 410-42: G.E. Manin and TJ.
Bergman. ·1’he Dynamics of Behavioral Response
to Conflict in the Workplace:· Journal ofOccupa.
tiona/ & Organi:tuional Psychology 69 (December
1996): 377-387.
29. Data from !he 2009 Kelly Global Workforce
Index. ba~d on information published in news
relea~s in each country by KeiJy Service.~ in
September 2009.
30. R.E. Walton and J .M. Dunon. ··The Manage-
ment of Conflict: A Model and Review:· Atlmin-
i.-8: S.M.
Schmidt and T.A. Kochan. “‘Conflict: Toward Con.
ceptual Clarity:· Adminislmth’t? Sciet~u Quarterly
17. no. 3 (Sept. 1972): 359-370.
31. J.A. McMullin. T. Duerden Comeau. and E.
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of Difference: A Ca.logy 58. no. 2 (2007): 297-3 16.
32. R.M. Sarala. ·’The Impact of CuJru raJ
Differences and Acculturation Factors on Post-
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33. T. Taylor. “Change Is an Inevitable Part of
Life:· Dem•er Business Journal Onli11e. 8 October
20 12.
34. D. Deveau … Merging? Better check your
culture compatibility before s igning on the dot-
ted line:· financial Po.gy 54. no. I (2001): 51-6: R. Wageman
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Joint Effects of Ta~k and Reward Interdependence
on Group Performance.·· Joumal of Orgauiz.atioual
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39. P.C. Earley and G.B. Northcraft. ··Goal Setting.
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Conflict:· Admiui.firtlfh·e Sdence Quarrerly 40
( 1995): 245-282.
40. A Risberg. ”Employee Experiences of Acquisi-
tion Processes:· Journal of World Business 36
(March 2001 ): 58-84.
41. Jehn and Bendersky … Intragroup Conflict in
Organizations:·
42. M. HewstOile. M. Rubin. and H. WiiJis.
“Intergroup Bias:· Annual Re\•iew of Psychology 53
(2002): 57>-60: J. Jenen. R. Spears. and T. Postme<. "Intergroup Distinctiveness and Differentiation: A Meta-Analytic Integration:· Jmmwl of Persmwliry and .'i<>ciall’sychology 86. no. 6 (2004): 86W79.
43. foiJett. “Constructive Conflict··: Blake.
Shepard. and Mouton. Managing lmergroup
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“Support for a Two-Dimensional Model of Conflic.t
Behavior:· Orgauiuuioual Behador and Human
Performance 16(1976): 143-15: C.K.W. De
Dreu et al .. .. A Theory-Based Measure ofConflic.t
Management Strategies in the Workplace:· Joumal
ofOrgani-66:
Rahim … Toward a 1’heory of Managing Organiza-
tional Conflict.··
44. C. K. W. de Dreu. A. Evers. B. Beersma
E. S. Kluwer. and A. Nauta. ··A 1lleory-based
Measure of Conflict Management Strategie.~ in the
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22 (2001). pp. 645-68. For od1er variations of this
model. see: T. L Ruble and K. Thomas. “Sup-
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Behavior.·· Organizational Behavior and Human
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45. \Vorkplau Cmiflici and How Busi11esses Can
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What Does Not Communicating Communicate?:·
Human Commimication Research 38. no. 2 (20 12):
222-252.
47. Several st:udie.~ identify the antecedenlS
of preferred conflict style. For example. see:
P J . Moberg … Linking Conflict Strategy ro the
five-Factor Model: Theoretical and Empiric.al
foundations:· lmernmional Journal ofCmtflict
Management 12.no. I (2001): 47-6: H.-A. Shih
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J. E. Barbuto. Jr .. K.A. Phipps. and Y. Xu. ‘1’esting
Relationships between Personality. Conflict Styles
and Effectiveness:· lmernmional Journal of COil·
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EN-43
48. D. W. Johnson et al.. “EffecL< of Cooperative. Competi tive. and individualistic Goal Structures on Achievement: A Meta-Analysis:· Psychological Bulletin89 ( 1981): 47-6: G.A. Callanan. C.D. Benzing. and D.F. PerTi. ·'Choice of Conflict- Handling Strategy: A Maner of Context:· Journal <>/Psychology 140. no. 3 (2006): 269-28: Z. Ma
et al .. ·11le Impact of Group-Oriented Value.~
on Choice of Conflict Management Styl e.~ and
Outcome.~: An Empirical Study in 1″urkey:· The
bueruarimwl Joumal of Human Resource Manage·
mew23. no. 18 (20 12/ 10/01 20 12): 3776-3793.
49. X.M. Song. J. Xile. and B. Dyer. “Amecedents
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ing 64 (January 2000): 50-6: R. A. Friedman et al .•
..What Goes around Comes Around: The Impact
of Personal Conflict Style on Work Conflic.t and
Stre.~~ … ltueruaiimwl Jmmwl of Conflict Manage·
mew II . no. I (2000): 32-5: M. Song. B. Dyer. and
R.J. 1llieme. “Conflict Management and innovation
Performance: An Integrated Contingency Perspec-
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Group Dynamics I I. no. I (2007): 66-78.
50. G.A. Chung-Yan and C. Moeller. ·1’he Psy-
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bueruaiimwl Joumal of Conflict Managemem2 1.
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5 1. C.K.W. De Dreu and A.E.M. Van Vianen.
..Managing Relationship Conflict and the Effec.
ti veness of Organizational Teams:· Journal of
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Fink. and Cai. ··The Effect of Connict Goals on
Avoidance Strategies: What Doe.~ Not Communi-
cating Communicate? ..
52. A. Ergeneli. S.M. Camgoz. and P.B. Karapinar.
.. The Relationship between Self-Efficacy and
Conflict-Handling Styles in Tenus of Relative
Authority Positions of tile Two Panie.~:· Social
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53. J. Simms … Blood in the Boardroom:· Director
2009.48.
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<>/Applied P.rychology 86. no. 4 (2001 ): 583-59:
J.L. Holt and C.J. DeVore. “Culture. Gender.
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Z .Z. Ma. “Connict Management Styles as Indica-
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55. D.A. Cai and E.L. Fink. ·-connie! Style Dif-
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Communication Monographs 69 (March 2002):
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lD Reduetng Conn.a.” Acad~m~ II/ Manu~m~lll
Journall9, no.~ ( 1976~ 591-605 M. Shenf.
-supe:rotduure Goats an the Reducuon of Inter~
group Conflia~·· TM Amniran Jo.,,ud ofStx·wl·
og• 63. no.~ ( 1958): l49-356.
59. Shenf. “Superord1na1e Goal> 1n thr Reduction
of Intergroup ConnK:t,”: Eisenhord~ Kah””JY· and
Bourgeoa.s Ill, “How Mnnagemcnl Team~ Can Ha”‘e
a Good Figh1,”: Song. X1le. and Dyer. “Anltc:ed-
ent~ and Consequences of Mru’kct•ng M1utagcrs’
Connict-HandJing 8chavio~.”: 0. Dotac:ct. J. POt·
tra.’i, aJld 0. CheneVCI I, ’11le Impacts or Leadership
on Workplace Confhc1s.” lm~nuw’onal Jounwl of
Cmiflit:l Mtmag~ment 20. no. 4 (2(M)9}: 340-3S4.
60. R.S. l au and A.T. Cobb. “Undc”tnnding !he
CO IUl eCti ons helwCe Jl relaliOnll hiJ) Conn icl and
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61. H.C. Triandis, “The FuwreofWo11d Ps)’cholog\’: An /nt~nwtiOttal
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62. D. Nebenzahl. “Managmg the Generollion
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D. De•·eau. “l’Ore:ll Canada Diuu. and J.M. Brcu.
.. Can ·we talk, Md should \\e? Managmg emouonal
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71. R. KaramooyyaandJ.M. Bren. “Managers Han-
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72. A.R. Elangm= ” Managerialln..,n-entioo in
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“Evalualing the Management of Interpersonal
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istratil’t• Sciences 14 (1997): 1-13: LB. Binghan1.
“Employment Dispute Re.«)lution: The Case for
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m the Swed1sh and Finnish Units of an Industrial
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“‘The Impact of H}brid D1d S. D. Chrhtman. “A Neuropsyeholngical
Dtmens.ion for Anchoring Effects,” Jounral of
Bon and l .R. Wein~ “Unilateral
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rer)oned rhat iipceding up chcsc conce~sion.s leads
10 beuer negoliauxl ootcomes. Sec: D.A. Moore.
“Myopic Predic1ion. Self-Dc.:ttruclivc Secrecy. and
rhe Unexpected Benefic~ of Rcvcnling Final Dead·
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tmd Humtm Dn·i.fiQII Pro~·tsU.l’ 94. no. 2 (2004):
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86. RJ. Robenson. “Defusmg !he Exploding Offer:
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87. LL. Thompson, “lnformauon Exchange m
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9 1. D.W. Choi . .. Shared Metacognition in Integra.
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92. J.M. Brett et aL “Sticks and Stones: Language.
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D. Druckman and M. Olekalns … Emotions in
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.. EmotionaJ inteJijgence and Dispute Mediation in
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93. PJ. CamevaJe and A.M. lsen. ‘”The Influence of
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94. N. Rackham and J. Carlisle. “1’heeffective
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CHAPTER 12
I . D. Ossip … Create a Culture of Engagement for
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20 15. 30-3 1: R. Reiss. ” Interview with David
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L. Efron. “How TransformationaJ Leadership Saved
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20 16: “Leaders 11tal Care:· Ceridiatt (Sausalilo.
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4. R. House. M. Javidan. and P. Dorfman . .. Project
GLOBE: An lnlroduclion:· Applied Psydwlogy:
An lmernatimtal Review 50 (200 1): 489-505:
R. House et al.. ··understanding Culture.~ and
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5. J .A. Raelin. ··we the Leaders: In Order to fonn
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pp. 79-S J.
20. L. Black … Hamburger Diplomacy … Report on
B”siness Magmine August 1988. 30-36.
2 1. J .E. Baur e1 al.. “More Than One Way 10
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22. D.E. Berlew. “Leadership and Organiza-
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B. Nanus. Leaders: The Sirlllegiesfor Taking
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23. S. Kole.~nikov.Je.~op. “You”re the Conducto r:
Listen to the Music You Can Create with the
Group:· Tlte New York Times. April I I. 2016.
24. For a discussion of trust in leadership. see C.S.
Burke et aL .. Trust in Leadership: A MuJti.Level

EN-46 Endnotes
Review and Integration:· Leadership Quarterly 18.
no. 6 (2007): 606-32. The surveys on leading by
example are reponed in J .C. Maxwell . .. People Do
What People See:· Business Week. 19 November
2007. 32: “Who·s the Bos.< of Workplace Cul- ture?:· News release (Chelmsford. MA: Kronos. 9 March 2016). In tlte earlier survey. "leading by example .. wa~ the most imponant attribute of effective leaders. In the recent sun•ey. HR profe.~­ sionals and managers rated .. leading by example .. as the top attribute of a company's culrure. wherea~ employees ranked it below pay. co--worker re.~pect. and work-life balance. 25. Bass and Riggio. 1irm.iformatiot~al Leadership. pg. 7: Kouzes and Posner. 71Je Leadership Chal- lenge. Chaps. 6 and 7. 26. W.E. Baker and J.M. Sinkula. ·1'he Synergistic Effect of Market Orientation and Learning Orienta- tion on Organizational Performance.·· Academy ofMarkeiing St:iet~ce Jourual21. no. 4 ( 1999): 4 11-27: Z. Emden. A. Yaprak. and S.T. Cavusgil. ··Learning from Experience in International Alliance.~: Antecedents mxl Firm Performance Implications:· Journal of Bu.siue.t.f Research 58. llO. 7 (2005): 883-92. 27. Kouze.~ and Pos1ler. The Leadership Challenge. 28. W.G. Hardwick. "Re.0): 571-604.
37. A. Zaleznik. “Managers and Leaders: Are 1’1ley
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40. G. Yukl and R. Lepsinger. “Why lntegrating
the Leading and Managing Role.~ L~ Essential for
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Dynamics 34. no. 4 (2005): 36 1-75. One recent
critique of leadership theories suggeslS that
scholars need to furt11er clarify the distillCtion. if
any exists. between leading and managing. See S.l.
Hannah et al .. “Debunking the false Dichotomy
of Leadership Idealis m and Pragmatism: Critical
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4 1. S.R. Satterwhite. “Delrs Poisonous Culture Is
Sinking llS Ship-and Raise.~ Que.~ions for Poten.
tial Buyers:· Forbes. I April 2013.
42. E.A. Fleishntan. “‘The De.~ription of Supervi.
sory Behavior … Journal of Applied Psychology 37.
no. I ( 1953): 1-6. For discussion on metltodologi-
cal problems with the developmem of these people
vs task-oriented leadership construclS. see: C. A.
Schriesheim. R.J. Holl~. and S. Kerr. “Leader
Initiating Structure: A Reconciliation of Disc rep.
am Research ResullS and Some Empiric-.al Test~ …
Organiz.ational Behavior and Human Performance
15. no. 2 ( 1976): 297-32 1: L. Tracy. “Consid-
eration and Initiating Structure: Are They Basic
Dimensions of Leader Beha\rior?:· Social Behavior
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43. A.K. Konnan. “Consideration. ini tiating
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E. A. Fleishman. “Twenty Years of Consideration
and Structure:· in Currem De,·elopmeuu in file
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Hunt (Carbondale: Southern lllinois Universiry
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tion and Meta· Analytic Te.~ of Their Relative
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ed. (Upper Saddle River. NJ: Pearson Education.
2013). 62-75.
44. B.A. Soon et al.. “A Daily Investigation of the
Role of Manager Empatlly on Employee Well-
Being:· Organiz.a iional Belta,•ior and Human Ded·
.). 10 April
20 13: B. Powell … Don JailholL
Caribbean. 4 Augus-t 20 16.
49. S. Sendjaya. J .C. Sarros. and J .C. Santora.
”Defining and Measuring Servant Leadership
Behaviour in Organization.~:· Joumal of Manage-
me/11 Swdies 45. no. 2 (2008): 402-24: R.C.
Liden el aJ .. “Sen•ant Leadership: Development
of a Multidimensional Mea~ure and Multi-Level
Asse.~coment .. Leader.~hip Quarterly 19. no. 2
(2008): 161-77: D. van Dierendonck. ··servant
Leadership: A Review and Synthesis:· Jo,rnal
ofMmwgemem37. no. 4 (201 1): 122&-61: R.
VanMeter et al .. ··tn Search of Clarity on Sen•ant
Leadership: Domain Specification mxl Reconceptu-
alization:· AMS Review 6. no. I (March 29. 2016):
59-78.
50. R. VanMeter et aL .. In Search of Clarity on
Sen•ant Leadership: Domain Specification and
Reconceptualization:· At\1S Reriew 6. no. I (March
29. 2016): 59-78.
5 I. S.J. Peterson. B.M. Galvin. and D. Lange.
“‘CEO Servant Leadership: Exploring Executive
Characteristics and firm Performance:· Personnel
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52. S. Kerr et al.. ”Towards a ContingellCY Theory
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Behm·;orand Hlmtan Performance 12 (1974):
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‘1’he Great Hi- Hi Leader Behavior Myth: A
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me/11 JOLmlfl/ 19 (1976): 628-41.
53 . .For a thorough study of how expectancy theory
of motivation rel ate.~ to leadership. see R.G. Isaac.
WJ. Zertle. and D.C. Pitt. “Leadership and Mo Goal Theory of
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C.A. Schries.heim (Greenwich. cr: Information
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55. RJ. House … Path-Goal 1’heory of Leadership:
Lesso11.~. Legacy. and a Reformulated Theory:· 71Je
Le-Goal Theories of Leadership: A
Mela·Anatysis:· Journal ofMtmagememl9 (1993):
857- 76.
57. J. D. Houghton and S.K. Yoho … Toward a Con.
tingency Model of Leadership and Psychological
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Encouraged?:· Journal of Leadersh;p & Orgtmi:P·
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58. R.T. Keller … A Te.n 15. no. I (2008): 75-96: L Holmberg
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Everyday Approach to Managerial Leadership:·
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62. C. A. Schriesheim and L.L. Neider. “Path .Goal
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63. P. Hersey and K.H. Blanchard. Managemtlll
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Blank. J.R. Weitzel. and S.G. Green. “A Test of d>e
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ogy 43 ( 1990): 579-97: C.L. Graeff. “Evolution of
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65. F.E. Fiedler. A 11teory of Leadership Effwi••e·
ne.tt Man-
agemeni (Glenview. fL : Scolt. Foresman. 1974).
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ager:· Han·artl Business Reldew 43. no. 5 (1965):
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67. For a summary of criticism.~. see G.A.
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Saddle River. NJ: Pearson Educ~tion. 20 13). 2 17-18.
68. T.A. Judge. R.F. Piccolo. and R. llies. ·111e
forgotten Ones?: The Validity of Consideration
and Initiating Structure in Leadership Research:·
Jmmwl of Applied l’sydwlogy &9. No. I . (2004):
36-5 1: T.A. Judge. R.F. Piccolo. and T. Kosalka.
”The Bright and Dark Sides of Leader Traits: A
Review and T lleorelic-:al Extension of the Leader
Trait Paradigm:· Leadership Quanerly 20 (2009):
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69. N. Nicholson. ExecUJi\’t! Jn.Hinci (New Yod:::
Crown. 2000).
70. This ob.sen,ation has also been made by C. A.
Schriesheim. “Substitute.v.for.Leadership Theory:
EN-47
Development and Ba.~ic Concepts:· Uadership
Quarterly 8 (1997): 10:>-08.
7 1. D. F. Elloy and A. Randolph. ·1’he Effect
of Superleader Behavior on Autonomous Work
Groups in a Government Operated Railway Ser.
vice … Pui>Uc Persmmel Mtmagemem 26 ( 1997):
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SuperLeadersilip: Leading Others to Lead Them-
sel••es (San Francisco. CA: Berrett-Koehler. 2001).
72. M.L. Loughry. “‘Coworkers Are Watching:
Performance Implications of Peer Monitoring:·
Academy of Managemeni Proceeding.1 (2002):
0 1-06.
73. P.M. Podsakoff and S.B. MacKenzie … Kerr
and Jermier”s Substirute.~ for Leadership Model:
Background. Empirical Asse.~ment and Sugge.~.
tions for Future Research:· Leadership Quanerly 8
( 1997): 11 7-32: S.D. Dionne et al.. .. Neutralizing
Substirute.~ for Leadership Theory: Leadership
Effects alld Common-Source Bias:· Journal Of
Applied l’sydwlogy 87. no. 3 (2002): 454-64: J.R.
Villa et al .. “Problems with Detecting Moderators
in Leadership Research Using Moderated Multiple
Regre.~ion:· Leadership Quarttrly 14. no. I
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LR. Offermann. JJ.K. Kennedy. and P.W. Wirtz.
··Implicit Leadership Theorie.~: Content. Structure.
and GeJleralizability:· Leadership Quanerly 5.
no. I ( 1994): 43-58: RJ. Hall and R.G. Lord.
..Multi· Level Information Processing Explanations
of Followers· Leadership Perceptions: · Leadership
Quarterly 6 (1995): 265-87:0. Epitropaki and R.
Martin. ··tmplicit Leadership 1’heories in Applied
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Stability over Time:· Journal of Applied P.rychol-
<>gy 89. no. 2 (2004): 293-3 10. For a broader
discussion of the social construction of leadership.
.see: G.T. Fairhu rst and D. Grant. .. The Social
Construclion of Leadership: A Sailing Guide:·
Managemem Comnwnit:m;on Quarttrly 24. no. 2
(2010): 171-2 10.
75. R.G. Lord el aJ.. “Conlextual Constraints on
Prototype Generation and Tlleir Multilevel Conse-
quences for Leadership Perceptions:· Leadership
Quarterly 12. no. 3 (2001): 31 1-38: KA Scott and
OJ. Brown. ··Female f:ir.st. Leader Second? Gender
Bias in tJle Encoding of Leadership Behavior …
Organiz.at;onal Behavior and Human Deci.~ion
!’rocesses 10 1 (2006): 230-42: SJ . Shondrick. J.E.
Dinh. and R.G. Lord … Development~ in Implicit
Leadership Theory and Cognitive Science: Appli·
cations to Improving Mea.~urement and Under.
standing Alternatives to Hierarchic:al Leadership:·
Leadership Quarterly 21. no. 6 (2010): 959-78.
76. S.F. Cronshaw and R.G. Lord. “EffocL< of Cat· egorization. Attribution. and Encoding Proce.~~s on Leadership Perceptions:· Journal (?{Applied l'syclwlogy 72 ( 1987): 97- 106: J.L. Nye and D.R. Forsyd>. ’11>e EffocL< of l'rolotype.Based Bia.‘a. and T.G. Pollocl.
··seue,ring One’s 0\\-n Pre~: The Cause) Wld
Consequences of CEO Celebrny.'” Stmt~gic Man ·
agtmmt lo•n~f U(l{lerslrip (New
York: Tile Pree Pres.. 1974). Chap. 5.
82. J. lntagliato, D. Ulrich. and N. Smallwood.
”l..e\•eraging Leadership Competencies to Produce
Leadership Brand: Creat~ng Ot\UtlCU\’CilCM by
Focu:.11ing on St.raccgy and Resuh;;;· /Iuman Rt-wurus
PIA1ming 23. no. 4 (2(0)): 12-23: J.A. Conger and
D.A. Ready. “‘Rethmking LcadenJup Coc~encoes.”
LLadutoLMdu(‘l004 ): 41-47; SJ. Zaccaro. C.
Kemp. and P. Bader. “Leader Tr:UIS and Attnbutes.”
in n.~ Narurr of l.Laikrshi’p. ed. J. Amonal.J~ A. T.
Cianctolo. and RJ. Sternbetg (‘T’hotLlogy. oce: T.A.
Judge. R.F. Plcrolo, and T. Kc.all..a. ‘1be Bnp
and Dot!; Sides of Leader T12u: A Rei””” and
TlteoreucaJ Extrn<~on or t1tr Leader Tr.lll P:ndosm.- Lrodmhip Quarr.rl\ 20(2009): 85S-75. 83. Tlu.' b.q IS b:l.«d on S.A. Klfl.p:llrd and E.A. lodce. "L.eader.;lup: Do Trwb Mattei'?," Acutkml ofManag.JnLJII E.ut-mi1,. 5 (1991): ~~, SJ. Zaccaro. C. Kemp. and P. Bader. "Leader Tr.Uts and Aurabutes," tn n,, NttW~ of Utu.lrrlhip. cd. J. Antonakis. A.T. C•ancrolo. and R.J . Stembers (Thousand QOC<, CA: Sase. 20<»). 101-2~: G.A. Yuki. U&lnship ;, 0rglmi:JJti()lu, 8th cd. (Upper Saddle RiVoll Rei-..Js EmpJO)·ees lad< Trus1 in Their Wod:pbce ... News release for Marin Resean:b (SL Loom. Busmess Wire. I~ Apri12010): Willis TOIO'· ers Watsoo. UnMr Prrssurr to Ronain Rnn·ant. Emp/01 us Loci: to Mutkmcy til< Employu Va/w Proposilion. (london: Willis T~'ei"S Warson.. 9 Sepoember>ion Cited here is fmn~ E.
Santosuosso. -Minnelh Bnngs a Rcal-1..1/e Concert
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tion-christopher-yeh (accessed 9 April2017):
L. Corcuera “Bringing Value.~·Bawd Learning
to Life (at WOt·k):· HR Voic•. 13 J une 20 16: D.
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Explosion and Firt! (Texa.~ City. Texas: BP. March
23. 2005): U.S. Chemical Safety Board (Wagy. ed. P.J.D. Drenth. H. 1’hierry. and C.J.
de Wolff(Ea.-45: D.E. Leidner and
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Estabrooks … Mapping the Organizational Culture
Research in Nursing: A Literature Review … Journal
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11. L Guiso. P. Sapienza. and L. Zingale.~ . .. The
Value of Corporate Cut lUre:· Joumal of Financial
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12. J. Martin. P.J. Frost. and O.A. o·Neill. “Organi-
zationaJ Culture: Beyond Struggles for Intellectual
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Mtmagemem and Leadership 17. no. 3 (2007):
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13. G. Hof.~ede … Identifying Organizational Sub-
cultures: An Empirical Approach: · Joumal of Man-
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Sciroom effect. 266
BATNA.323
BBC. 78.369.438
B.C. Children’s Hospital. 38
BC Hydro. 267
behaviour modelling. 143
behavioural intentions. 98
behaviourism. 140
beliefs. 97
belongingne.~ needs. 130. 131
Bennis . Warren. 355
Berton. Pierre. 151
best alternative to a negotiated agreement
(BATNA). 323
Bezos. Jeff. 14
bias
awarene.~~ of perceptual biase.~. 83
confirmation bias. 74. 198
corre.~pondence bias. 80
decision heuristics. 193-194
fundamental attribution error. 80. 84
halo effect. 82
and performance reviews. 167
primacy effect. 82
recency effect. 82-83
self.serving bias. 80
stereotyping. 7~79
biculruraJ audit. 403
Big Five personalhy dimension. 57.202
Binning. Steve .. 95
Bioware. 380
BlackBerry. 19
blame game. 438
Blanchard. Ken. 349
blind area (Johari Window). 84
Blueshore Financial. 4 19. 420. 427. 428. 430. 43 I
Blumberg. Dan. 105
BMW AG. 382. 383. 397
board of directors. 78
body language. 255
Bolonade. 2
Bombardjer Inc .. 3
Bonaparte. Napoleon. 367
bonding (drive). 134- 135. 270
bonuses. 163
bonom line. 5
Bouchard. Christian. 3 I 9
Bouchard. Trevor. 247
boundary spanning. 232
bounded rationality. 192
Bourgois. Emilie. 53. 54
Bou1·ke. J im. 76
BP (British Petroleum). 392
brainstonning. 239-240
brainwriting. 240
Brandt Group. 20
Brasilata. 2 07
Braun. Martin. 6
breaking routines. 424-425
bribery. 51. 52. 60. 38 I
Bridgewater Associate.~. 40
Brin. Sergey. 191
British Columbia Ferry Senrices. 198
British Computing Society. 66
British Ga.~ New Energy. 283
Broadc.ast Australia. 223
BrookstOile Consttuctjon. 320
Brooks·s Jaw. 2 19
Brown. Mike. 285

Index
brown nosing. 296
buffers. 320
bullying bosse.~. 292
Bunnings. 400
Burke. Dave. I 78
bUnlOUl. S~e job burnout
business ethics. Set! ethics
c
Cafley. J ulie. 276
Caicraft. Stef. 204
caJculus.based ttust 230
Campbell. Gordon. 34 1
Campbell Soup. 168
Canaccord Genuity Group Inc .. 10. I I
can-dobeliefsystem.42. 70.71. 179.341
Canada
absenteei.~m. 38
Canadian \’S. Americ:an values. 57- 58
cultural diversity. 57
diversity of Canadian cuJruraJ vaJue.~. 57-58
employee engagement 129
workforce diversity. 10
Canad;an Charrer of Rights and Freedoms. 250
Canadian Centre for Ethic$ and Corporate
Policy. 53
Canadian Narure Federation. 439
Canadian Tire. 215.216.247. 365.377. 438
CANOE.41
capitalism. 57
Cara. Frank. 74
Carnegie. Andrew. 440
case studies
Ancol Ltd .. 28-29
Arbrecorp Ltee. 243-244
Barrie Super Subs. 155- 156
car wars at Wolf.