A Strategic Approach To Organizational Behavior

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A Strategic Approach To Organizational Behavior
Chapter 1
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Knowledge Objectives

• Define organizational behavior and explain the
  strategic approach to OB.
• Provide a formal definition of organization.
• Describe the nature of human capital.
• Discuss the conditions under which human capital
  is a source of competitive advantage for an
  organization.
• Explain the five characteristics of
  high-involvement management and the importance of
  this approach to management.

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Basic Elements of Strategic Organizational
Behavior

• Organizational behavior
• The actions of individuals and groups in an
  organizational context.
• Managing organizational behavior
• Actions focused on acquiring, developing, and
  applying the knowledge and skills of people.
• Strategic approach to OB
• An approach that involves organizing and managing
  the peoples knowledge and skills effectively to
  implement the organizations strategy and gain a
  competitive advantage.

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Factors and Outcomes of Strategic Approach
Organizational Factors (culture, work
environments, adaptability
Organizational Success
Satisfaction of Individuals and Groups
Productivity of Individuals and Groups
Individual Factors (learning ability,
personality, values, motivation, stress)
Interpersonal Factors (leadership, communication,
decision-making skill, intra- and inter-group
dynamics, communication)
Adapted from Exhibit 1.1 Factors and Outcomes of
a Strategic Approach to Organizational Behavior
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Strategic OB Lens
Organization Level
Activities
Required Skills

• Conceptualizing
• Communicating
• Understanding the perspectives of others

• Talk with insiders and outsiders about
• Vision
• Strategy
• Other major issues

Senior Managers

• Help middle managers
• Define and redefine their roles
• Manage conflict

• Listening
• Conflict management
• Negotiating
• Motivating

• Interpersonal influence

• Create and maintain the organizations culture

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Strategic OB Lens
Organization Level
Activities
Required Skills

• Networking
• Communicating
• Influencing

• Champion strategic ideas
• Help firm to remain adaptive

• Analyzing
• Communicating

• Process data and information for use by other
  individuals

Middle
Managers

• Communicating
• Motivating
• Understanding values
• Managing stress

• Deliver strategic initiatives to lower-level
  managers

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Strategic OB Lens
Organization Level
Activities
Required Skills

• Teaching
• Listening
• Understanding personalities
• Managing stress

• Coaching firms associates (workers)

• Negotiating
• Influencing others
• Counseling
• Understanding personalities

• Removing obstacles for associates
• Deal with personal problems of associates

Lower-level
Managers

• Negotiating
• Group dynamics

• Design jobs, team structures, and reward systems

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Foundations of Strategic OB

• Behavioral science disciplines
• Psychology
• Social psychology
• Sociology
• Economics
• Cultural anthropology
• Strategic approach integrates knowledge from all
  these disciplines
• Strategic approach focuses on behaviors and
  processes that help to create competitive
  advantages and financial success (goal is to
  improve the outcomes of organizations)

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Common Features of Organizations

• Network of individuals
• System
• Coordinated activities
• Division of labor
• Goal orientation
• Continuity over time, regardless of change in
  individual membership

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Human Capital and Competitive Advantage

• Human capital The sum of the skills, knowledge,
  and general attributes of the people in an
  organization
• Competitive advantage An advantage enjoyed by an
  organization that can perform some aspect of its
  work better than competitors or in a way that
  competitors cannot duplicate such that it offers
  products/services that are more valuable to
  customers

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Human Capital as Source of Competitive Advantage
Associates are capable of performing the basic
work of the organization
Skills and talents of associates cannot be copied
by other organizations
Skills and talents of associates are unique in
the industry
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Human Capital as Source of Competitive Advantage

• Are human resources in the firm . . .

No
Competitive Disadvantage
Below Normal
Yes
No
Competitive Parity
Normal
Yes
Yes
No
Temporary Competitive Advantage
Above Normal
Yes
Yes
Yes
Sustained Competitive Advantage
Above Normal
Exhibit 1.2 Human Capital and Competitive
Advantage Source Adapted from J. Barney and P.
Wright, On Becoming a Strategic Partner, Human
Resource Management 37 (1999) 3146.
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Dimensions of High-Involvement Management
Selective Hiring
Large pools of applicants are built through
advertising, word of mouth, and internal
recommendations. Applicants are evaluated
rigorously using multiple interviews, tests, and
other selection tools. Applicants are selected on
the basis of not only skills but also fit with
culture and mission.
Extensive Training
New associates and managers are thoroughly
trained for job skills through dedicated training
exercises as well as on-the-job training. They
also participate in structured discussions of
culture and mission. Existing associates and
managers are expected or required to enhance
their skills each year through in-house or
outside training and development. Often, existing
associates and managers are rotated into
different jobs for the purpose of acquiring
additional skills.
Exhibit 1.3 Dimensions of High-Involvement
Management
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Dimensions of High-Involvement Management
Exhibit 1.3
Dimensions of High-Involvement Management
Aspect Description
Decision Power
Associates are given authority to make decisions
affecting their work and performance. Associates
handle only those issues about which they have
proper knowledge. Lower-level managers shift from
closely supervising work to coaching associates.
In addition to having authority to make certain
decisions, associates participate in decisions
made by lower-level and even middle managers.
Information Sharing
Associates are given information concerning a
broad variety of operational and strategic
issues. Information is provided through bulletin
boards, company intranets, meetings, posted
performance displays, and newsletters.
Incentive Compensation
Associates are compensated partly on the basis of
performance. Individual performance, team
performance, and business performance all may be
considered.
Exhibit 1.3 Dimensions of High-Involvement
Management
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High-Involvement Managers

• High-involvement managers
• Identify situations in which responsibility can
  be delegated
• Manage through encouragement and commitment
  rather than fear and threats
• Respect and value each associates skills and
  knowledge
• Empower people in ways that are consistent with
  their uniqueness as individuals.
• Invest effort in building and maintaining trust

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The Strategic Lens
Exhibit 1.4 Managing Organizational Behavior for
Competitive Advantage