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How individuals view and relate to the people, objects and issues in their sphere of influence Mastery Harmony

Internal locus of control External local of control

Trustworthy human nature Untrustworthy human nature

Mutable human nature Immutable human nature


How individuals perceive the nature of time and its use Sequential (monochronic) Synchronic (polychronic)

Past Present Future

Work Relationships

How people work together and define their identity and status Individualistic Collectivistic

Achievement Ascription

Universalistic Particularistic


How individuals view differential power relationships Hierarchy/high power distance Equality/low power distance


How individuals approach change, risk, ambiguity and uncertainty Order/high uncertainty avoidance Flexibility/low uncertainty avoidance


How individuals conceptualize actions and interactions Being/feminine Doing/masculine

Relationship Task

Source of Truth

Where groups seek the "right"answers Expert Experience

Adapted from A. Bird and J. Osland, "Making Sense of Intercultural Collaboration," International Studies of Man­agement & Organization 35(4) (2005/2006): 115-135; and M. E. Phillips and N. A. Boyacigiller, "Learning Cul­ture: An Integrated Framework for Cultural Analysis," Symposium presentation at the Academy of Management Meeting, San Diego, California (1998).

EXHIBIT 1-2 Dimensions of Cultural Values

The concept of individualism versus collectivism is the most extensively studied dimen­sion.44 Individualism is a cultural pattern found in most northern and western regions of Europe and in North America. It is defined as the extent to which people are responsible for taking care of themselves and giving priority to their own interests. Collectivism is characterized by individ­uals who subordinate their personal goals to the goals of some collective. Individuals give their loyalty to a group and, in return, the group takes responsibility for the individual. Collectivism is common in Asia, Africa, South America, and the Pacific. In individualistic cultures, people define themselves as an entity that is separate from the group. There is an emphasis on personal goals and less concern and emotional attachment to groups. Successes are individual successes whereas in collectivist cultures, successes are group successes. Competition is interpersonal in individualistic cultures; in collectivist cultures, it occurs between groups. People in collectivist cultures define themselves as part of a group. They are concerned for the integrity of the group and have an intense emotional attachment to the group. For example, the bond between a mother and son (Indo-European collectivist cultures) or father and son (East Asian collectivist cultures) will be stronger than the bond between a wife and a husband because the family group is the most important. Vertical relationships (parent-child, boss-subordinate) are more important in col­



lectivist cultures, whereas horizontal relationships (spouse-spouse, friend-friend) are more important in individualistic cultures.

In-groups are also very important in collectivist cultures. In the previous family example, the extended family is the in-group; other examples include tribes, castes and villages. In-group members in collectivist cultures warrant very different treatment than out-group members who are often treated with hostility and distrust. In contrast, people in individualistic cultures tend to treat people more consistently because they see themselves as belonging to more and larger in-groups (for example, people like us in terms of social class, race, beliefs, attitudes, interests, or people from our region or state). However, the individualists' ties are not as strong with all these groups as the collectivists' ties are with their in-group.

There is an emphasis on harmony and face-saving in collectivist cultures. In contrast, people in individualistic cultures are more likely to value confrontation and "clearing the air." Individu­alistic cultures have more short-term relationships and use contracts in business dealings. Col-lectivistic cultures think in terms of long-term relationships, which make the use of contracts less important.

Not everyone in an individualistic culture is individualistic; the same is true for collectivist cultures. In both types of cultures, one can find allocentric people who value social support and idiocentric people who value achievement.45 Individualistic cultures have higher gross national products, but they also have more social ills and higher heart attack rates. Collectivist cultures report lower degrees of loneliness, alienation, and social problems. However, they may have more government corruption if in-group loyalty dictates that those in power will try to enrich their in-group rather than concern themselves with the country as a whole.

Another source of identity concerns how cultural members gain status—via achievement versus ascription.46In achievement cultures, people are expected to accomplish things to earn status (e.g., working hard, becoming successful). Ascription cultures bestow (ascribe) status on their members based on their family, age, class, gender or education. In achievement cultures, the first question one generally asks a stranger is "What do you do?" In an ascription culture, the question is more likely to be "Where are you from? Are you related to the 'so-and-so's' from that region. Where did you go to school?" If you've begun to mumble that you can find both of these values, as well as the others in Exhibit 1.2, in the same culture, you're correct. The context deter­mines which cultural values are more figural in a specific circumstance.47 But comparing cul­tures to others, we find marked tendencies to give greater importance to one end of these value dimensions than another. United States culture values achievement (the Horatio Alger myth of pulling oneself up by the bootstraps); nevertheless, some people benefit greatly from ascribed status. Despite low grades, their family name and wealth enables them to attend Ivy League schools where they make connections that advance their career. When asked about their success, however, they are likely to attribute it to their personal achievements, an explanation more in keeping with the dominant cultural belief.

The universalistic-particularistic dimension refers to cultural beliefs about the world and relationships.48 Universalistic cultures believe that the rules apply equally to everyone, resulting in the same treatment. Particularistic cultures expect one's relationship to influence the treatment that one receives, and therefore, exceptions for friends or important people are normal. These values often determine whether personnel decisions and ethical practices are perceived as fair or unfair.

Cultures also vary in their acceptance of differential power relationships and ways to guar­antee responsible behavior. In hierarchical cultures, the social fabric is maintained by a hierar­chy of ascribed roles.49 This is accompanied by an acceptance that power is distributed unequally, what culture expert Geert Hofstede calls high power distance.50Those at the top have a greater voice and more freedom to act as they wish. In contrast, equality cultures, similar to Hofstede's low power distance cultures, assume that people are equal and that power should be distributed more evenly. People are socialized to make commitments to bosses on a more volun­tary basis, rather than responding to their role in the hierarchy. This value dimension influences how many layers we find in the organizational structure, who has a voice in decisions, and whether superiors are automatically respected or expected to earn that respect.



Another set of values concern structure as it relates to change, risk, and uncertainty. Cultures vary in their beliefs about order versus flexibility. Cultures that value order prefer predictability and clarity, while flexible cultures are more comfortable with ambiguity and change. Hofstede referred to these dimensions as low or high uncertainty avoidance. A cultural belief in order can be seen in greater career stability, more formal rules, and less openness to change.

Cultures tend to conceptualize their primary mode of activity in terms of being or doing?1 In being cultures (what Hofstede calls feminine cultures), the emphasis is on enjoying life in the moment and nurturing others, whereas doing cultures (Hofstede's masculine cultures) emphasize achievement, assertiveness, and materialism. This dichotomy is often described as working to live (being) versus living to work (doing). These values influence how employees perceive work rewards; doing cultures are comfortable rewarding good performance while being cultures may express concern that merit pay or bonuses could have a negative impact on their co-workers or the work environment.

We'll introduce the next dimension, relationship versus task, with a story.

A second grade teacher asked her students to solve this problem: "There are four blackbirds sitting in a tree. You take a slingshot and shoot one of them. How many are left?" "Three," answered the seven-year-old European with certainty. "One subtracted from four leaves three."

"Zero," answered the seven-year-old African with equal certainty. "If you shoot one bird, the others will fly away."52

The European perceived the question as a hypothetical situation that required a literal answer (task). In contrast, the African focused on the relationship among the birds and the pre­dictable behavior that would result from a shot (relationship). In some cultures, such as the United States, task is the primary focus, and people quickly get down to business. In many other cultures, such as in Italy, Senegal, and Ecuador, people expect to establish a relationship first so they can trust one another enough to do business with them. Like the students' answers, one ori­entation is not better than the other; they are simply different and must be taken into considera­tion when working across cultures.

Finally, cultures vary in their views of what anthropologists call the source of truth. Some cultures believe that the right answers are obtained from experts while others trust their own experience. Do people believe that truth comes primarily from scientific research, legal prece­dent, the opinion of experts, tradition, personal experience, or trial-and-error experimentation?53 For example, U.S. Americans value expert opinion, but they are more likely to question author­ity than many cultures and to rely, instead, on their own experience.

In addition to viewing culture as a constellation of values, anthropologists note that culture reflects the answers different groups have found to the basic problems that confront all humankind. Old age and dying represent an inescapable challenge for every society, but how they deal with the end of life derives primarily from particular cultural values and beliefs about medicine, the afterlife, the prestige and respect due the elderly, family obligations, and so forth. Culture provides us with ready-made solutions to basic human issues and a sense of identity. Each culture has an internal logic that makes perfect sense once it is understood. Novices, how­ever, tend to see "strange" behavior through the lens of their own cultural norms and assump­tions. Experts develop a global mind-set in part by learning these value dimensions and being able to recognize them in the workplace, without assuming different cultural beliefs and behav­iors are "wrong" simply because they are different.

Through exposure to other cultures, we come to a deeper understanding of our own cul­ture and its biases. Hofstede argued that management theories developed by U.S. scholars contain a cultural bias and therefore do not apply all over the world.54 U.S. Americans, according to Hofstede, value equality (low power distance), are individualists (extremely high individualism) who willingly tolerate uncertainty (low uncertainty avoidance), value achievement and striving more than nurturance and support (above average masculinity) and



have a short-term orientation. He contends that U.S. management techniques are largely based on these values. His argument inspired a great deal of research on comparative business practices. In response to his warning, we are careful to include theories that cross cultural borders and to note cultural limitations. As a result, this workbook is used successfully all over the world. Understanding the impact of culture on organizational behavior is an impor­tant skill for anyone who works in organizations. We encourage you to take advantage of the learning possibilities from the cultural diversity in your classroom or workplace and invite you to raise questions about the universality of both theories and behavior.



One of the ways firms develop a global mind-set is by hiring a diverse workforce and then lever­aging the cultural diversity within their own organization. Following their example, the purpose of this exercise is to begin creating a productive multicultural learning community, in which we can benefit from learning about different cultural perspectives and scripts (Time allotted: 65 minutes).

STEP 1. Visual representation of student cultural influences. (10 minutes)

Visualize the classroom as the world, with the North Pole at the front of the room, the South Pole at the opposite end, with Africa and Europe along the wall to your far left and Latin America and North America along the wall to your far right. The Middle East, Asia, and Australia are toward the middle of the room. Go stand where you were raised on this world map and then check to see whether your position is correct relative to other students. You will have to ask them for their location to place yourself in the right spot. If you moved around while growing up, choose the location where your schooling had the most impact on you. Look around to see what areas are represented in your class.

STEP 2. Group discussion of classroom norms of behavior. (10 minutes)

Form a group with the people who were raised in geographical areas closest to you, introduce yourselves, and answer the questions below. (Your groups should be no larger than about six members. If you are the only person from a large region, join another person who is a sole representative like you or join the closest group.) The instructor will call upon someone in your group to report out your consolidated answers about classroom norms of behavior, so be prepared.

a.How were students expected to behave in the classroom where you were raised?

b.How were teachers expected to behave in the classroom where you were raised?

STEP 3. Reports to total group (15 minutes)

The instructor will have a spokesperson from each group briefly relay their answers, which will be written on the board.

STEP 4. Plenary Discussion (30 minutes)

1.Do you see any differences in norms that could affect what takes place in our classroom?

2.If there are different expectations about class participation in the room, how can we find a solution?

3.Have you ever studied in another country?

a.What was the most significant cultural difference you observed in the classroom when you were abroad?

b.What did you learn about your own culture as a result of your study abroad experience?


setting the global stage: introduction to the workbook

4.What cues do you think an expert in intercultural communication would pay attention to in a multicultural classroom? What action scripts would they have?

5. Given our cultural and/or regional differences, what behavioral norms should we adopt to create an effective multicultural classroom? The criteria that determine effectiveness are that students are comfortable, can talk openly about cultural differ­ences, and maximize the opportunity to learn from people of different backgrounds.

The book is organized into four parts progressing from a focus on the individual to the group, orga­nization, and the organization-environment interface. Part I examines many of the different mental maps that individuals possess. Chapters 1 and 7 consider the individual's relationship with the orga­nization over time through the concepts of the psychological contract and career development. Chapter 2 reviews the principal theories of management and managerial functions. Chapter 3 focuses on the learning process for both individuals and organizations. Chapter 4 explains how to understand and decode personality and work with difficult people. Chapter 5 lays out the motiva­tional determinants of human behavior in organizations, whereas Chapter 6 centers on individual values, ethical decision making, and the ways to create an ethical workplace.

While the primary focus of Part I is self-awareness and the appreciation of individual dif­ferences, in Part II there is more emphasis on the skill-building needed to develop effective work relationships and teams. It begins with a grounding in interpersonal communication in Chapter 8 and progresses to perception and attribution in Chapter 9. Chapter 10 focuses on team dynamics, while Chapters 11 and 12 deal, respectively, with problem management and creativity. Conflict and negotiation are addressed in Chapter 13. Managing diversity, both domestic and international, is the focus of Chapter 14.

Part III focuses on the knowledge and skills needed by managers and leaders to accomplish their goals and visions with the help of others. Leadership itself is the focus of Chapter 15, fol­lowed by the critical leadership functions in the managerial role in subsequent chapters—creating, maintaining, and changing organizational culture (Chapter 16), decision making (Chapter 17), exercising power and influence (Chapter 18), coaching and empowerment (Chapter 19), and per­formance management and appraisal (Chapter 20).

Part IV is concerned with the system-wide architecture required for effective organizations. Chapter 21 looks at the key issues pertaining to organization structure and design. Chapter 22 describes the process of planned change and organization development. There are four integra­tive cases at the end of the book that relate to topics from various chapters.

Your Role as a Learner

You may find as you work with this book that a new role is being asked of you as a learner. Rather than assuming the role of a passive recipient, here you are given the opportunity to become an active creator of your own learning. This is an opportunity for you to develop new and different relationships with fellow students and faculty members responsible for this course. As you may already have sensed, the experiential learning approach provides numerous opportuni­ties for shared leadership in the learning process.

1.Organizational behavior is defined as a field of study that endeavors to understand, explain, predict, and change human behavior that occurs in the organizational context.

2.Kurt Lewin is viewed as the founder of this relatively young field.

The Plan of This Book




3.Organizational behavior has the following characteristics:

a.Multidisciplinary nature

b.Three levels of analysis: individual, group, organizational

c. Acknowledgment of environmental forces

d. Grounded in the scientific method

e. Performance orientation

f. Applied orientation

g. Change orientation

4.The course objectives are:

a.Learn to diagnose organizational situations

b.Know what would be the most effective action to take

c. Have the repertoire of skills needed to implement that action.

5.The overarching themes of the book are 1) learning to learn from experience, 2) taking a holistic approach that includes cognition, emotion, and context, 3) developing a global mind-set, and 4) developing OB expertise.

6.In experiential learning theory, knowledge is created through the transformation of experience

7.In addition to possessing a larger knowledge base, experts differ from novices in their abil­ity to distinguish between relevant and irrelevant information, to combine relevant informa­tion into meaningful patterns and perceive more patterns, to make decisions under pressure, and to complement their analytical skills with intuition.

8.Klein's circular model of Recognition Primed Decision Making starts with a situation that generates cues that let the expert recognize patterns that activate action scripts to affect the situation. Experts assess action scripts by mental simulation that uses mental models of how things work.

9.The more patterns and action scripts people have available, the more expertise they possess.

10.Global mind-set is the ability to develop and interpret criteria for personal and business per­formance that are independent from the assumptions of a single country, culture, or context; and to implement those criteria appropriately in different countries, cultures, and contexts.

11.Culture provides us with ready-made solutions for basic human problems and a sense of identity, but it can also limit our ability to see and appreciate alternative behaviors.

12.Cultural dimensions with regard to beliefs about the environment, time, work relationships, power, structure, action, and the source of truth help us compare and contrast cultures and decode cultural behavior.

13.Hofstede warned that U.S. management theories are culturally biased and do not apply everywhere.




1 M. T. Iaffaldano and P. M. Muchinsky, "Job Satisfaction and Job Performance: A Meta-analysis," Psychological Bulletin, 97(2) (1985): 251-273; T. A. Judge, C. J. Thoresen, J. E. Bono, and G. Patten, "The Job-Satisfaction-Job Performance Relationship: A Qualitative and Quantitative Review," Psychological Bulletin 127(3) (2001): 376^07.

2 P. M. Wright, T. M. Gardner, L.M. Moynihan, and M. R. Allen, "The Relationship between HR Practices and Firm Per­formance: Examining Causal Order." Personnel Psychology 8 (2005): 409^146.

3 Wright, Gardner, Moynihan, and Allen, "The Relationship between HR Practices and Firm Performance"; B. E. Becker and M. A. Huselid, "High Performance Work Systems and Firm Performance: A Synthesis of Research and Managerial Implications," in G. Ferris (ed.), Research in Personnel and Human Resource Management 16 (1998): 53-101.

4 Becker and Huselid. "High Performance Work Systems and Firm Performance."

5 J. K. Liker, The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer (New York: McGraw-Hill, 2004).

6"The Mission of Southwest Airlines," /about_swa/mission.html. Accessed 8/3/06.

7 J. Pfeffer and C. O'Reilly, Hidden Value: How Great Com­panies Achieve Extraordinary Results with Ordinary People (Cambridge, MA: Harvard Business School Press, 2000).

8 J. A. Wagner and J. R. Hollenbeck. Management of Organi­zational Behavior (Englewood Cliffs, NJ: Prentice Hall, 1995).

9 K. Lewin, A Dynamic Theory of Personality (New York: McGraw-Hill, 1935).

10 S. Wills and K. Barham, "Being an International Manager," European Management Journal 12(1) (1994): 49-58.

11 K. Weick, The Social Psychology of Organizing (Reading, MA: Addison-Wesley, 1979); I. M. Duhaime and C. R. Schwenk, "Conjectures on Cognitive Simplification in Acqui­sition and Divestment Decision Making," Academy of Man­agement Review 10 (1985): 287-295; E. Jacque, "The Devel­opment of Intellectual Capability: A Discussion of Stratified Systems Theory," Journal of Applied Behavioral Science 22 (1986): 361-383.

12 R. Sternberg and J. Davidson (Eds.), The Nature of Insight (Cambridge, MA: MIT Press, 1994).

13 Sternberg and Davidson, The Nature of Insight.

14 Sternberg and Davidson, The Nature of Insight.

15 M. J. Prietula, and H. A. Simon, "The Experts in Your Midst," Harvard Business Review 67(1) (January-February, 1989): 120-124.

16 Simon in A. M. Hayashi, "When to Trust Your Gut," Harvard Business Review 79(2) (February 2001): 59-65.

17 G. A. Klein and R. R. Hoffman, "Seeing the Invisible: Perceptual-Cognitive Aspects of Expertise," in M. Rabinowits (ed.), Cognitive Science Foundations of Instruction (Hillsdale, NJ: Lawrence Erlbaum Associates, 1993): 203-226.

18 Klein, and Hoffman, "Seeing the Invisible."

19 Ibid.

20 Ibid.

21 N. Charness, "Search in Chess: Age and Skill Differences." Journal of Experimental Psychology: Human Learning and Memory 7 (1981): 467^-76; R. Calderwood, G.A. Klein, and B.W. Crandall, "Time Pressure, Skill, and Move Quality in Chess," American Journal of Psychology 101 (1988): 481^493.

22 G.A. Klein, Sources of Power (Cambridge, MA: MIT Press, 1988).

23 R. Calori, G. Johnson and P. Sarnin, "CEO's Cognitive Maps and the Scope of the Organization," Strategic Manage­ment Journal 15(6) (1994): 15437-15457.

24 M. T. H. Chi, P. J. Feltovich, and R. Glaser, "Categorization and Representation of Physics Problems by Experts and Novices," Cognitive Science 5 (1981): 121-152; G. Klein, J.K. Phillips, E. Rail, and D. A. Peluso, "A Data/frame Theory of Sensemaking," in R. Hoffman (ed.), Expertise Out of Con­text: Proceedings of the 6th International Conference on Nat­uralistic Decision Making (Mahweh, NJ: Lawrence Erlbaum, 2006) (In press).

25 Prietula and Simon, "The Experts in Your Midst."

26 L. A. Burke and M. K. Miller, "Taking the Mystery Out of Intuitive Decision Making" Academy of Management Execu­tive 13(4) (1999): 92-99.

27 Prietula and Simon, "The Experts in Your Midst."

28 Ibid.: 121-122.

29 G. Klein, The Power of Intuition (NY: Doubleday, 2004).

30 Ibid: 26.

31 G. Klein, Intuition at Work (New York: Currency, 2003).

32 G. Klein and K. Weick, "Decision: Making the Right Ones. Learning from the Wrong Ones," Across the Board 37(6) (2000): 18.

33 Klein, The Power of Intuition.

34 M. Maznevski and H. Lane, "Shaping the Global Mindset: Designing Educational Experiences for Effective Global Thinking and Action," in N. Boyacigiller, R. M. Goodman and M. Phillips (eds.), Teaching and Experiencing Cross-



Cultural Management: Lessons from Masters Teachers (Lon­don and New York: Roudedge, 2004): 172.

35 C. A. Bartlett and S. Ghoshal, "What is a Global Man­ager?" Harvard Business Review 70(5) (1992): 124-131; K. Ohmae, "Managing in a Borderless World," Harvard Business Review 67(3) (1989): 152-161.

36 W. R. Ashby, An Introduction to Cybernetics (New York: Wiley, 1956).

37 For a comprehensive treatise on culture, see M. Y. Bran-nen, C. Gomez, M. Peterson, L. Romani, L. Sagiv, and P. Wu, "People in Global Organizations: Culture, Personality, and Social Dynamics," in H. Lane, M. Maznevski, M. Mendenhall and J. McNett (eds.), Handbook of Global Management (Oxford: Blackwell, 2004): 26-54.

38 F. Kluckhohn and F. Strodtbeck, Variations in Value Orien­tations (Evanston, IL: Row, Peterson, 1961).

39 C. Hampden-Turner and F. Trompenaars, Building Cross-Cultural Competence: How to Create Wealth from Conflicting Values (Chichester: John Wiley, 2000); J. B. Rotter, "General­ized Expectancies for Internal vs. External Control of Rein­forcement," Psychological Monograph 80 (1966): 1-28.

40 Kluckhohn and Strodtbeck, Variations in Value Orientations, were the first to write about this dimension; they termed human nature as either good or evil.

41 E. T. Hall, Beyond Culture (New York: Anchor Press/ Doubleday, 1976).

42 E. T. Hall and M. Hall, Hidden Differences: Doing Business with the Japanese (New York: Prentice Hall, 1988).

43 Kluckhohn, and F. Strodtbeck, Variations in Value Orientation.

44 H. C. Triandis, R. Bontempo, M. J. Villareal, M. Asai, and N. Lucca, "Individualism and Collectivism: Cross-Cultural Perspectives on Self-Ingroup Relationships," Journal of Per­sonality and Social Psychology 54(2) (1988): 323-338; and H. C. Triandis, R. Brislin, and C. H. Hui, "Cross-Cultural Training Across the Individualism-Collectivism Divide," International Journal of Intercultural Relations 12 (1988): 269-89.

45 H. C. Triandis, B. Bontempo, M. J. Villarreal, M. Asai, and N. Lucca, "Individualism and Collectivism: Cross-Cultural Perspectives on Self-Ingroup Relationships."

46 T. Parsons, and E. Shils (eds.), Toward a General Theory of Action (Cambridge, MA: Harvard University Press, 1951); and C. Hampden-Turner and F. Trompenaars, Riding the Waves of Culture: Understanding Cultural Diversity in Global Business, 2nd ed. (New York: McGraw-Hill, 1998).

47 J. S. Osland and A. Bird, "Beyond Sophisticated Stereotyp­ing: Cultural Sensemaking in Context," Academy of Manage­ment Executive 14 (2000): 65-77.

48 T. Parsons and E. Shils (eds.), Toward a General Theory of Action; C. Hampden-Turner and Trompenaars, Riding the Waves of Culture.

49 S. H. Schwartz, "Beyond Individualism/Collectivism: New Cultural Dimensions of Values," in U. Kim, H. C. Triandis, C. Kagitcibasi, S. Choi, and G. Yoon (eds.), Individualism and Collectivism: Theory, Method, and Applications (Thousand Oaks, CA: Sage, 1994): 85-119.

50 References to Hofstede in the following paragraphs are taken from G. H. Hofstede, Culture's Consequences: Compet­ing Values, Behaviors, Institutions, and Organizations across Nations, 2nd ed. (Thousand Oaks, CA: Sage, 2001). For a review of research based on Hofstede's work, see B. L. Kirk-man, K. B. Lowe, and C. B. Gibson, "A Quarter Century of Culture's Consequences: A Review of Empirical Research Incorporating Hofstede's Cultural Values Framework," Journal of International Business Studies 37 (2006): 285-320.

51 F. Kluckhohn, and F. Strodtbeck, Variations in Value Orientation.

52 "Cultural Diversity in Today's Corporation," Working Woman (January 1991): 45.

53 M. E. Phillips and N. A. Boyacigiller, "Learning Culture: An Integrated Framework for Cultural Analysis," Symposium presentation at the Academy of Management Meeting, San Diego, California (1998).

54 G. Hofstede, "Cultural Constraints in Management Theo­ries," Academy of Management Review 7(1) (1993): 81-93.

Part /


Understanding Yourself and Other people at Work

Mental Maps

The goal of the first section is to help you become aware of your mental maps or models, as well as those of fellow participants in the course. Although the concept has existed since ancient times, the term mental models was coined in the 1940s by Kenneth Craik, a Scottish psychologist. This term refers to "the images, assumptions, and stories that we carry in our minds of ourselves, other people, institutions, and every aspect of the world. Like a pane of glass framing and subtly distorting our vision, mental models determine what we see and then how we act." * One way to understand our behavior is to make these usually tacit maps visible. In this section, you will have an opportunity to examine mental maps about psychological contracts, theories of management, learning styles, personality, motivation, ethics, and values. We hope you'll finish the section with more self-knowledge and a greater appreciation for the differences you find in other people.

CHAPTER 1 The Psychological Contract and Commitment

CHAPTER 2 Theories of Managing People

CHAPTER 3 Individual and Organizational Learning

CHAPTER 4 Decoding Human Behavior and Personality

CHAPTER 5 Individual and Organizational Motivation

CHAPTER 6 Ethics and Values

CHAPTER 7 Personal Growth and Work Stress

* P. Senge, A. Kleiner, R. Ross, and B. Smith, The Fifth Discipline Fieldbook: Strategies and Tools for Building a Learning Organization (New York: Currency, 1993): 235.



The Psychological Contract and Commitment

OBJECTIVES By the end of this chapter, you should be able to:

A. Define the psychological contract and discuss the obligations of the contract currently in place.

B. Explain the importance of the psychological contract and what happens when it is violated.

C. Explain the benefits of committed employees and what employers can do to foster commitment.

D. Describe external influences that affect workplace expectations.

E. Explain the self-fulfilling prophecy and how managers can apply this concept.

F. Explain the pinch model.

G. Make a psychological contract with your professor.

Creating a Great Place to Work

Every year, Fortune magazine publishes a list of the 100 best companies to work for. It is one of the magazine's most popular issues of the year. People love to read about companies where the grass may be greener. And managers find they can pick up tips that they can apply to their orga­nizations to make them better places to work.

Work Environment and Its Impact

Everybody, whether a senior manager or frontline employee, would prefer to work in a good working environment. Since most people spend the majority of their waking hours at work, the quality of the work experience has a big impact on their lives. Everyone wants to look forward to going to work in the morning. And no one enjoys coming home from work feeling frustrated and discouraged from his or her experiences at work.



But there is more than quality of life involved with this issue. The quality of the workplace impacts directly on issues of customer service and productivity. The connection to customer ser­vice has been shown in numerous studies. A famous 1998 study published in the Harvard Busi­ness Review article "The Employee-Customer-Profit Chain at Sears" showed that an increase in employee satisfaction at a store resulted in an increase in customer satisfaction, which in turn resulted in higher profitability for the store. There have been similar studies in the hospital indus­try, showing that improvements in workplace environments result in better patient satisfaction.

The Great Place to Work Institute has seen extremely strong evidence of the same phe­nomenon from its work in surveying the best workplaces. A few months ago, Frank Russell Co., a firm that provides investment services for large pension funds among other clients, did two comparisons. The company took a hypothetical portfolio of stocks from the companies that were on the first Fortune 100 Best Companies to Work For list in 1997 and compared the overall financial results through 2003 with a portfolio of stocks from the Standard & Poor's 500 (an established stock market index similar to the Dow Jones industrial average). The results were astonishing. Money invested in the "100 Best" portfolio would have returned almost three times more than the same amount a portfolio in the S&P 500 during the past six years. The results were even more remarkable if, instead of holding onto the stocks of the 100 best companies, an investor had changed the portfolio to reflect the changes in the list annu­ally. (Every year, a new list of the 100 Best is published based on our annual survey. Typically, about 20 companies are replaced.) If investors updated their portfolio with each year's 100 Best list, they would have seen the original investment outperform a comparable S&P 500 portfolio by more than a factor of five.

As shown, the best workplaces tend to have higher productivity and profitability as well as better customer satisfaction. Among the obvious reasons for this result is that the best workplaces typically have much lower staff turnover than their competitors. (In a study we conducted in 2001 that was published in Fortune, the 100 Best companies had an average staff turnover that was 50 percent lower than their competitors.) High staff turnover is very costly to any enterprise, whether a for-profit corporation, a nonprofit organization, or a governmental agency, because of the increased costs associated with recruiting and training new staff. Similarly, organizations with reputations as good employers also tend to attract high quality staff. The better the quality of the staff, the better able the staff will be in performing their duties.

A less tangible—though equally important—reason organizations with great workplaces deliver better service and products is employee morale. Better morale translates into environ­ments where employees are more likely to provide better service.

Creating a "Great Place to Work"

Before moving on to the subject of how a great workplace is created, the criteria should be defined. I define a great place to work as one where employees trust the people they work for, have pride in what they do and enjoy the people they work with. This definition is based on the hundreds of interviews I conducted in the 1980s for the first edition of my book, The 100 Best Companies to Work for in America (co-authored with Milton Moskowitz). From those inter­views, I observed that employees insisted that the most important factor that distinguished their workplaces was a very high level of trust between the employees and the management.

What do employees at great workplaces mean by trust? There are two aspects of trust. The first is credibility—what employees think about the management's believability, competence, and integrity. It all begins with whether they can believe what someone tells them. If manage­ment's word cannot be taken to be true, trust is impossible. At great workplaces, management goes out of its way to be believable by doing the following:

Sharing information broadly. The Container Store, a Dallas-based retailer that was No. 1 on the Fortune 100 Best list in 2000 and 2001, makes it a point to share information about such mat­ters as daily sales results from each store with all of the employees.



Accessibility to employees. The Great Place to Work Institute has found that even at large com­panies such as Continental Airlines or Procter and Gamble, the top executives go to great lengths to meet with ordinary employees whenever possible. In smaller companies, this is often done in more informal ways such as having lunch in the employee cafeteria. At East Alabama Medical Center, a county-run facility, the CEO makes it a point to visit every ward of the hospital every day. Frequently these companies have an open door policy. The point is that top managers make sure that people within the organization see them as fellow human beings rather than figures liv­ing in an ivory tower. To be able to trust, employees need to feel some sense of what kind of peo­ple are in management—whether they are trustworthy. That cannot be done unless employees have been able to size management up for themselves.

Willingness to answer hard questions. It is not enough to share information and be person­ally accessible. Leaders of the best workplaces also realize that they need to face difficult questions from their employees. Thus, the Great Place to Work Institute has seen a myriad of mechanisms to ensure that employees have regular opportunities to get straight answers to dif­ficult questions. In the past few years, informal breakfasts of randomly selected employees with the CEO have become common. At J.M. Smucker, the jelly and jam maker that was No. 1 on the 2004 Fortune 100 Best list, the CEO and president conduct quarterly town hall meetings at each of their sites throughout the country where they answer any question that is asked of them. If they cannot provide an answer immediately, they make certain that each of the ques­tions is answered through a company newsletter later. The key point is that management makes itself available for genuine dialogue with employees. Instead of concentrating on one-way, top-down communication, the emphasis on two-way communication is what distinguishes the best employers.

Delivering on promises. Closely related to the question of believability is that of integrity. Peo­ple do not believe someone, no matter how good that person's communications skills are, unless he or she follows through on what has been said will be done. Several years ago, the Great Place to Work Institute was asked to do a workplace assessment of a large division of a major telecom­munications company. A very charismatic leader who was an excellent communicator ran the division. He shared information with everyone, was accessible, and held regular question-and-answer conferences with staff. But the institute discovered that the staff did not trust him because he was too nice. When people would come into his office, he would invariably make commit­ments or implied promises. The employee would leave the office and feel good about the situa­tion and about the executive, in the short run. But the problem was that sometimes he delivered on his promises and sometimes he did not. As a result, people did not know whether his word was any good. They liked him but did not trust him. The Great Place to Work Institute recom­mended that he follow a simple discipline: After every meeting, make a list of every promise that he had made. In a matter of weeks, his list became shorter and shorter and the level of trust within the division began to grow.

The second major aspect of trust relates to what employees think management thinks about them. While the first aspect of trust revolves around how employees perceive the man­agement's credibility, it is equally important that employees feel that the management shows them respect. In other words, employees can feel that management has a high degree of credibility, is believable, and demonstrates competence and integrity. But they must also feel that management has their best interests at heart to genuinely extend their trust. This is done in two main ways:

Showing recognition and appreciation. The institute has found that the best employers make a special effort to say "thank you" in a variety of ways to employees. It becomes part of the fabric of daily existence in these companies. L.L. Bean, a mail-order catalogue retailer, has developed a particularly good method of singling out those who deserve special recognition. A committee of employees selects some five workers a year from dozens of employee nominations for an award called Bean's Best. The committee then organizes special celebrations complete with cel­ebratory horns and champagne at the winners' own work sites.


Demonstrating personal concern. Respect is also a very personal matter. To select companies for the Great Place to Work Institute's lists, staff distribute to several hundred randomly selected employees at each firm an employee survey called the Great Place to Work Trust Index. Based on a correlation study of the results of the trust index, the institute found the fol­lowing statement to be the most significant: "Management shows a sincere interest in me as a person, not just an employee." In particular, people are especially concerned with how they will be treated when faced with a personal event of significance—an illness, a death in the family, births, and so on. The best employers find ways to show genuine concern in those cir­cumstances.

Becoming a great workplace may not be rocket science, but it does require paying attention to the basic issue of trust in the relationship between management and employees. Trust is a del­icate commodity that must be earned daily. But when it is present, both management and employees benefit.

Source: Reprinted with permission from Robert Levering, "Creating a Great Place to Work: Why It Is Important and How It Is Done," (August 2004). San Francisco: Great Place to Work® Institute, Inc. .


A.Read "Creating a Great Place to Work."

B.Answer the following questions.

1. Have you ever had a job experience that did not work out as you thought it would?

2. What expectations of yours were not met?

3. Were there any expectations on the part of your boss that were not met?

4. What trends have you observed that are organizational changing the workplace?

C. Answer and score the organizational commitment questionnaire.

d. As you read the chapter, make a list of cues and patterns that will help you diagnose the psy­chological contracts in an organization and understand when they are being violated.


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