Ch.

9: Organizational Structure & Design

Organizational Structure

 The formal arrangement of jobs within an organization.

 It can be shown visually in an organizational chart.
 Managers are involved in organizational design when they need to create or change the
organizational structure.
 Organizational design: 6 key elements

Work Specialization
 The degree to which tasks in the organization are divided into separate jobs with each step
completed by a different person.
 Division of Labor
 Individual employees specialize in doing part of an activity rather than the entire activity in
order to increase work output
Advantages:
-Increase efficiency
Disadvantages:
-Overspecialization
-Human diseconomies
-Boredom, fatigue, work stress, lose sight of the big picture, less flexibility, reduced
performance, more absenteeism, more turnover

Departmentalization
 How common work activities are grouped together so work gets done in an integrated and
coordinated way.
 Recent trends: increasing use of customer departmentalization and cross functional teams
 5 common forms of departmentalization:
1. Functional :Grouping jobs by functions performed
2. Geographical: Grouping jobs on the basis of territory or geography

3. Product: Grouping jobs by product line

4. Process : Grouping jobs on the basis of product or customer flow

 5. Customer: Grouping jobs by type of customer and needs

Chain of Command
A line of authority extending from upper organizational levels to lower levels, which clarifies who
reports to whom.
Authority of managers: the rights inherent in a managerial position to tell people what to do and to
expect them to do it. Managers in the chain of command have the authority to coordinate and oversee the
work of others.
Responsibility of employees: Obligation or expectation to perform any duties assigned to them by their
supervisors
Unity of Command: a person should report to only one manager in order to avoid conflicting demands
from multiple bosses.

Recent Trends:
– Technology impacts access to information and direct communication
– Organizations want to empower and engage employees by distributing authority
– Team work leads to flatter organizations with distribution of power

Span of Control
 It is how many employees a manager can efficiently and effectively manage
 Determining the span of control helps to determine the number of levels and managers in an
organization.
 The wider the span of control is, the more efficient and flatter the organization is since it does
not require many levels or managers. This is consistent with managers’ efforts to speed up
decision making, increase flexibility, get closer to customers, empower employees and reduce
costs
 The tradeoff: minimizing the total managers while making sure they can effectively lead the
number of employees they are responsible for.
 Factors that may affect the span of control:
– Skills and abilities of managers and employees
– Characteristics of the work being done
 – Similarity and complexity of employee tasks
– Physical proximity of subordinates
– The degree of standardization of processes
– Information systems sophistication

Centralization & Decentralization

 Centralization: The degree to which decision making is concentrated at upper levels of the
organization. These concepts are relative. An organization is never 100% centralized or
decentralized.
• A company is centralized when top managers make key decision with little input from
lower-level employees.
• A company is decentralized when the lower-level employees provide input or actually
make decisions. Reflects higher degree of employee empowerment
 In decentralized company, we have employee empowerment which is giving the employees
more authority to make decisions (large companies when lower level managers understand the
problems more)

More Centralization More Decentralization

- Environment stable - Environment complex
- Inexperienced low-level managers - Experienced low-level managers
- Low-level managers do not want a - Low-level managers want a say in
say in decisions decisions
- Decisions are minor - Decisions are significant
- Company facing a crisis - Corporate culture allows managers to
know what’s happening
- Company large - Company geographically dispersed
- Effective implementation of company - Effective implementation of company
strategies depends on managers strategies depends on managers having
retaining say over what happens involvement and flexibility to make
decisions

Formalization
 The degree of standardization of an organization’s jobs and the extent to which employee
behavior is guided by rules and procedure (bureaucracy)
 In high formalized organization, there are explicit job descriptions, numerous organizational
rules, and clearly defined procedure covering work processes. Employees have little input to
what is done, how and when it is done.
 When formalization is low, employees have more freedom in how they do their work.
Two Models of Organizational Design

Mechanistic
 Rigid and tightly controlled structure characterized by:
o High specialization
o Rigid departmentalization
o Clear chain of command
o Narrow spans of control
o Centralization
o Limited information network
o Downward communication
o High formalization
o Strive for efficiency
o Rely heavily on rules and regulations
o Large organization
o Cost leadership
o Routine
 This design tries to minimize the impact of different personalities, judgments, and ambiguity
because these human traits are seen as inefficient & inconsistent.

Organic
 Highly adaptive and flexible structure characterized by:
o Flexible specialized jobs
o Cross-functional teams
o Cross-hierarchical teams
o Free flow of information
o Wide spans of control
o Decentralization
o Low formalization
o Employee teams
o Non-routine; requires unique solutions in decision making
o Employees are highly trained and empowered to handle diverse activities and problems
o Minimal formal rules and little direct supervision
Factors that Affect Structure

Contingency Factors

Strategy
 An organization’s structure should make it easier for the organization to achieve its goals
 Because goals are an important part of the organization’s strategy, it is only logical that strategy
and structure are closely linked
 Certain structural designs work best with different organizational strategies
 Achievement of strategic goals is facilitated by changes in organizational structure that
accommodate and support change.
 Organizational structure follows strategy.
 Innovation
Pursuing competitive advantage through meaningful and unique innovations favors an organic
structuring.

 Cost minimization
Focusing on tightly controlling costs requires a mechanistic structure for the organization.

Size
 As an organization grows larger, its structure tends to change from organic to mechanistic with
increased specialization, departmentalization, centralization, and rules and regulations. The
more it grows, the less size has influence on the structure.

Technology
 Organizations adapt their structures to their technology.
 Woodward’s classification of firms based on the complexity of the technology employed:
o Unit production of single units or small batches – organic structure
o Mass production of large batches of output – mechanistic structure
o Process production in continuous process of outputs – organic structure
 The more routine technology, the more the mechanistic organization
 Non-routine technology = organic organizations
Degree of Environmental Uncertainty
 Mechanistic organizational structures tend to be most effective in stable and simple
environments.
 The flexibility of organic organizational structures is better suited for dynamic and complex
environments.

Today’s trends: Since environments are very complex and dynamic due to globalization, organic
structures tend to be more flexible and respond faster to changes in the environment.

Common Organizational Designs

Traditional Organizational Designs

-Tend to be mechanistic in nature

Simple Structure
Simple Structure
Strengths Weaknesses
Fast, flexible, inexpensive to maintain, Not appropriate as organization grows;
clear accountability reliance on one person is risky
 Low departmentalization, wide spans of control, authority centralized in a single
person, little formalization. As employees are added, this structure becomes inadequate.

Functional Structure
Functional Structure
Strengths Weaknesses
Cost-saving advantages from specialization Pursuit of functional goals can cause
(economies of scale); employees are managers to lose sight of what’s best for
grouped with others who have similar tasks the company; isolation and little
understanding of what other functions are
doing
Divisional Structure
Divisional Structure
Strengths Weaknesses
Focuses on results-division managers are Duplication of activities and resources
responsible for what happens to their increases costs and reduces efficiency
products and services
Contemporary Organizational Designs

Team Structure
Team Structures
Advantages Disadvantages
Employees are more involved and No clear chain of command. Pressure on
empowered. Reduced barriers among teams to perform
functional areas
 A structure in which the entire organization is made up of work groups or self-
managed teams of empowered employees.
In large organizations, the team structure complements the divisional structure. This
allows the company to have the efficiency of a bureaucracy and the flexibility of teams

Matrix- Project Structures

Matrix-Project Structures
Advantages Disadvantages
Fluid and flexible design that can respond Complexity of assigning people to projects.
to environmental changes. Faster decision Task and personality conflict
making
 Assigns specialists from different functional areas to work on projects led by two
project managers (Dual chain of command)
Project is a structure in which employees continuously work on projects. As one project
is completed, employees move to the next project.
The Boundaryless Organization
Boundaryless Structures
Advantages Disadvantages
Highly flexible and responsive. Utilizes Lack of control. Communication difficulties
talent wherever it’s found
 There are 2 types of boundaries
o Internal
 Horizontal boundaries imposed by work specialization and
departmentalization
 Vertical boundaries that separate employees into organizational levels and
hierarchies
o External
 The boundaries that separate the organization from its customers, suppliers,
and other stakeholders.
 To minimize or eliminate those boundaries, managers might use virtual or network
structural designs
o A virtual organization consists of a small core of full-time employees and outside
specialists temporarily hired as needed to work on projects
o A network organization is when a company uses its own employees to do some
work activities and uses networks of outside suppliers to provide other needed
product components or work processes (a modular organization)

Today’s Organizational Design Challenges

• Keeping employees connected: Finding a way to keep widely dispersed and mobile
employees connected to the organization

• Building a learning organization: Ability to learn, adapt and change. Employees

continually acquire and share new knowledge and apply it in their work or decisions.
Employees from all divisions and levels must share information, so this requires minimum
structural and physical barriers. Finally, empowered work teams are an important feature
of a learning organization.

• Managing global structural issues: Structures and strategies of companies worldwide are
similar, but the behavior within them maintains its cultural uniqueness. Therefore,
managers have to think about the cultural implications of design elements while
designing the structure
Ch. 10: Managing Human Resources
The Human Resource Management Process

Importance of HRM
 Three reasons:
A significant source of competitive advantage (People-oriented HR creates superior shareholder
value)
Important part of organizational strategies (managers must change how they think about their
employees and how they view work relationships—treat them as partners and not as costs)
It significantly affect organizational performance
Work practices that lead to both high individual & high organizational performance are known
as high-performance work practices such as commitment to:
o Improving the knowledge, skills & abilities of an organization’s employees
o Increase their motivation
o Reducing loafing on the job
o Enhancing the retention of quality employees while encouraging low performers to
leave.
Examples: Self-managed teams, decentralized decision making, open communication

External Factors that Affect the HRM Process

Employee Labor Unions

 A labor union is an organization that represents workers and seeks to protect their interests
through collective bargaining.
 In unionized organizations, many HRM decisions are dictated by collective bargaining
agreements (A contractual agreement between a firm and a union elected to represent a
bargaining unit of employees of the firm), which usually define benefits and compensation
packages such as recruitment sources, criteria for hiring, promotions, and layoffs, training
eligibility and disciplinary practices.

Governmental Laws & Regulations

 A company should be well aware of the country’s laws and abide by them
 Helps reduce employment discrimination and unfair work practices
 Reduce manager’s discretion in hiring, promoting, and discharging employees. (HRM decisions)
 Example: Nationalization of jobs in some Arab countries (Saudization, Omanization,
Kuwaitization etc.)

Demographic Trends
 Demographic trends have an impact on current and future HRM practices. So a manger should
take them into consideration
HRM Functions
Ensuring that competent employees are identified and selected.
Providing employees with up-to-date knowledge and skills to do their jobs.
Ensuring that the organization retains competent and high-performing employees.

Phase 1: Identifying and Selecting Competent Employees

Task 1: Human Resource Planning

Through planning, organizations avoid sudden people shortages and surpluses

Step 1: Current Assessment

 Managers begin HR planning by taking inventory of the current employees
 This inventory usually includes full information of available employees (education, experience,
languages, skills…)
Job Analysis: An assessment that defines a job and the behaviors necessary to perform it. Using
the information from job analysis, managers develop or revise job descriptions and job
specifications. Information for a job analysis is gathered by:
o Directly observing individuals on the job
o Interviewing employees individually or in a group
o Having employees complete a questionnaire or record daily activities in a dairy
o Have job experts (usually managers) identify a job’s specific characteristics
 Job Description: a written statement that describes a job (content, environment, conditions of
employment)
 Job Specification: states the minimum qualifications that a person must possess to successfully
perform a given job (knowledge, skills, and attitudes needed to do the job effectively)
 Step 2: Meeting Future HR Needs
 Future HR needs are determined by the organization’s mission, goals and strategies
 Demand for employees result from the demand for the organization’s products or services.
 After assessing both current capabilities & future needs, managers can estimate areas in which
the organization will be understaffed or overstaffed
 Factors Affecting Staffing:
o Strategic Goals
o Forecast demand for products and services
o Availability of knowledge, skills, and abilities

Task 2: Recruitment & Decruitment

 If employee vacancies exist, managers should use information gathered through job analysis for
recruitment (locating, identifying, and attracting capable applicants)
 If HR planning shows a surplus of employees, managers will reduce the org’s workforce through
decruitment

Recruitment
Decruitment

Task 3: Selection

 Involves screening job applicants to determine who is best qualified for the job
 Managers need to select carefully because hiring errors can have significant implications
 A decision is correct when the applicant predicted to be successful proved successful on job, or
when the applicant predicted unsuccessful was not hired. (Successfully hired, successfully
rejected)
 Errors are made in rejecting candidate who would have performed successfully (reject errors);
or when accepting those who ultimately perform poorly (accept errors)
Validity and Reliability
 Validity (of Prediction):
o For a selection device to be valid there must be a proven relationship between the
selection device and some relevant criterion.
o Managers cannot use test scores as a criteria, if the employees with high scores
wouldn’t perform better than those with lower ones
 Reliability (of Prediction):
o The degree of consistency with which a selection device measures the same thing.
o Individual test scores obtained with a selection device are consistent over multiple
testing instances.

Types of Selection Tools

 Application Form
o Almost universally used
o Most useful for gathering information
o Can predict job performance but not easy to create one that does
 Written Tests
o Must be job related
o Include intelligence, aptitude, ability, personality and interest tests
o Are popular
o Relatively good predictor for supervisory positions
 Performance-Simulation Tests
o Testing an applicant’s ability to perform actual job behaviors, use required skills, and
demonstrate specific knowledge of the job.
o Work sampling
Requiring applicants to actually perform a task or set of tasks that are central to
successful job performance.
o Assessment centers
Dedicated facilities in which job candidates undergo a series of performance simulation
tests to evaluate their managerial potential.
 Interviews
o Although used almost universally, managers need to approach interviews carefully.
o Must know what can and cannot be asked.
o Can be useful for managerial positions.
 Background Investigations
o Verification of application data
o Reference checks: Lack validity because self-selection of references ensures only
positive outcomes.
  Physical Examinations
o Useful for physical requirements and for insurance purposes related to pre-existing
conditions.
 Realistic Job Previews
The process of relating to an applicant both the positive and the negative aspects of the job.
Managers need to carefully watch how they portray their organization and the work that an
applicant will be doing. Negative things can happen when the information an applicant receives
is excessively inflated.
o Mismatched applicants probably will not withdraw from the selection process
o Inflated information builds unrealistic expectations, so new employees may quickly
become dissatisfied and leave the organization
o New hires become disillusioned and less committed to the organization when they face
the unexpected harsh realities of the job (they feel they were misled during the hiring
process)
o High turnover and dissatisfaction
o Aligns successful applicants’ expectations with actual job conditions, reducing turnover.
Thus, encourages mismatched applicants to withdraw.

Phase 2: Providing Employees with needed Skills and Knowledge

 Orientation: Education that introduces a new employee to his or her job and the organization.

 Work unit orientation:

o familiarizes an employee with the goals of the work unit
o clarifies how job contributes to the unit’s goals
o Includes an introduction to the new coworkers.
 Organization orientation:
o Informs a new employee about company’s goals, history, philosophy, procedures, and
rules.
o Includes relevant HR policies and maybe a tour of the facilities.

Employee Training
 Methods of development involve on-the-job competency development to achieve higher levels
of performance through coaching and learning, job rotation, and off-site training in the form of
formal training sessions, workshops, and seminars.
 Employee training is an important HRM activity.
 As job demands change, employee skills have to change
 Managers are responsible for deciding:
o What type of training employees need
o When they need it
o What form that training should take.
Types of Training
 General
o Communication skills, computer systems application and programming, customer
service, executive development, management skills and development, personal growth,
sales, supervisory skills, and technological skills and knowledge
 Specific
o Basic life/work skills, creativity, customer education, diversity/cultural awareness,
remedial writing, managing change, leadership, product knowledge, public
speaking/presentation skills, safety, ethics, sexual harassment, team building, wellness,
and others

Training Methods
 Although employee training can be done in traditional ways, many organizations are increasingly
relying on technology-based training methods because of their accessibility, cost and ability to
deliver information.
 Traditional Training Methods
o On-the-job
o Job rotation
o Mentoring and coaching
o Experiential exercises
o Workbooks/manuals
o Classroom lectures
 Technology-Based Training Methods
o CD-ROM/DVD/videotapes/ audiotapes
o Videoconferencing/ teleconferencing/
satellite TV
o E-learning

Phase 3: Retaining Competent, High-performing Employees

Employee Performance Management

Managers need to know whether their employees are performing their jobs efficiently and effectively or
whether there is need for improvement.

 Performance Management System:

o Establishes performance standards that are used to evaluate employee performance
 Performance Appraisal Methods
o Giving a critical performance review
o A process of establishing performance standards and appraising employee performance
Compensation & Benefits
Benefits of a Fair, Effective, and Appropriate Compensation System:

 It can help attract and retain competent and talented individuals who help the organization
accomplish its mission and goals.
 Impacts the strategic performance of the firm.
 Managers must develop a compensation system that reflects the changing nature of work and
the workplace in order to keep people motivated
 Types of Compensation
o Base wage or salary
o Wage and salary add-ons
o Incentive payments
o Skill-based pay
– reward employees for the job skills and competencies they demonstrate
– Under this type of pay system, an employee’s job title does not define his or her pay
category; skills do
– They tend to be successful in manufacturing businesses more than they are in services.
o Variable pay
– An individual’s compensation is contingent on performance
–
 Flexibility is a key issue when it comes to compensation systems given the dynamic environment.
  Factors that influence compensation:

Current HRM Issues

Downsizing
Planned elimination of jobs in an organization. When a company has too many employees (when company
faces declining market share or is poorly managed), one way to improve profits is to eliminate workers.
Managers communicate downsizing with employees by:

• Communicate openly and honestly:

– Inform those being let go as soon as possible.
– Tell surviving employees the new goals and expectations.
• Explain impact of layoffs.
– Follow any laws regulating severance pay or benefits.
– Provide support/counseling for surviving employees.
• Reassign roles according to individuals’ talents and backgrounds.
• Focus on boosting morale:
– Offer individualized reassurance.
– Continue to communicate, especially one-on-one.
– Remain involved and available.
Managing Workforce Diversity

Recruitment
To improve workforce diversity, managers need to widen their recruitment net.
Talent is not nationality-restricted and the employees’ diversity of nationalities, cultures, religions and
ethnic backgrounds enriches their workforce by bringing in new ideas, innovations and ways of thinking.
Not every organization has this choice; managers may have to look for diverse job applicants in places
they might not have looked before: women’s job networks, training centers etc. Such non-traditional
recruiting should enable a company to broaden its pool of diverse applicants.

Selection
Managers must ensure that the selection process doesn’t discriminate when the set of applicants is
diverse.
Applicants need to be made comfortable with the organization’s culture and be made aware of
management’s desire to accommodate their needs and be treated equally.

Orientation & Training

Many organizations provide special workshops to raise diversity awareness issues for their groups

Gender and HR Policies in the Arab World

 There is significant development in education and work for women in the Arab World (teaching,
medicine and nursing)
 However, women still suffer from limitations on their participation in the political/economic/social
life, limited access to opportunities and wage discrimination.
 HR should manage cultural differences and avoid discrimination:
– Implement equal employment opportunity policies
– Support working women through organizational initiatives, such as child-care and flextime
arrangements
– Provide training to working women equal to the training given to their male counterparts
– Work on bridging the pay gap through aggressive pay equity initiatives
– Provide educational and training opportunities that highlight the value of women in economic
and political life
– Offer serious career development for women

Managing Sexual Harassment

 Any unwanted action or activity of a sexual nature that explicitly or implicitly affects an individual’s
employment, performance or work environment.
 Creates an unpleasant work environment and undermines the worker’s ability to work
 Victims can be anyone directly or indirectly offended.
 Organizations should protect themselves against sexual harassment by:
– All employees must be educated on sexual harassment matters
– Ensure that no actions, such as cutting back hours for example, are taken against a person who
has filed harassment charges
Managing Work-Life Balance

 Many organizations offer family-friendly benefits, which accommodate employees’ needs for
work-life balance. Examples: on-site child care camps, flextime, job sharing and part-time
employment.
 Today’s workplace must accommodate the various needs of a diverse workforce by providing a wide
range of scheduling options and benefits that allow employees more flexibility at work and that
allow them to better balance their work and personal lives.
 People who have family-friendly benefits are more satisfied in the job

Controlling HR Costs

Employee Healthcare Costs

 Many companies are providing opportunities for employees to lead healthy lifestyles in order to limit
increasing health care costs
 Putting healthy food in their rooms, cafeterias etc.
 Rules for smoking

Employee Pension Plan Costs

 It’s impossible for the company nowadays to give each employee a wide pension plan
 HR must balance between offering employees benefits such as pensions with the cost of providing
such benefits
Ch. 13: Understanding Individual Behavior

Focus & Goals of Organizational Behavior

 The actions of people at work.
 One of the challenges in understanding OB is that it addresses issues that are not obvious like an
iceberg
 OB provides managers with considerable insights into important but hidden aspects of the
organization.

Focus of

Organizational Behavior
 Organizational Behavior focuses on 3 major areas:
o Individual Behavior
 Attitude, Personality, Perception, Learning, Motivation
o Group Behavior
 Norms, Roles, Team Building, Leadership, Conflict
o Organizational Aspects
 Structure, Culture, Human Resource policies & practices
 Goals of Organizational Behavior
 The goals of OB are to:
o Explain: Managers need to be able to explain why employees engage in some behaviors
rather than others
o Predict: Managers need to predict how employees will respond to various actions and
decisions
o Influence: Managers need to influence employees behave
 We are concerned with 6 important behaviors affected by psychological factors like attitudes,
personality, perception, and learning.

Employee Productivity
 Is a performance measure of both efficiency & effectiveness (what influences them?)

Absenteeism
 The failure to show up for work
 Although absenteeism cannot be totally eliminated, excessive levels have a direct and
immediate impact on the organization’s functioning

Turnover
 The voluntary or involuntary permanent withdrawal from an organization
 It can be a problem because it leads to increased recruiting, selection, and training costs as well
as work disruptions

Organizational Citizenship Behavior

 Discretionary behavior that is not part of an employee’s formal job requirements, but which
promotes the effective functioning of the organization. (Example helping others on a team work,
volunteering for other activities)

Job Satisfaction (Attitude)

 Refers to an employee’s attitude toward his job

Workplace Misbehavior
 Any intentional employee behavior that is potentially harmful to the organization or individuals
within the organization
 Workplace misbehavior shows up in organizations in four ways:
o Deviance from rules and regs
o Aggression
o Antisocial behavior
o Violence
Work Behavior across Cultures
 Managers’ values, attitudes, and beliefs differ from one culture to another, therefore their
behavior differs as well.
 Variables that impact how a person behaves: national culture, personality, early rearing, socio-
economic status, and other personal and contextual factors that explain differences in people’s
behaviors.
 Today’s workplace involves an increasing trend towards globalization of business. This means
that people have to, more than ever, work with people from different countries who may not
share the same values, attitudes, or perspectives into work and life. Managers should add
cultural diversity to their teams and capitalize on their different strengths.
 Cross Cultural OB: The behavior of people in those organizations where people need to
understand and compare behavior across cultures and national contexts with the aim to
improve communication and productivity within organizations and in relation to other
organizations

Attitudes & Job Performance

 Attitudes are personal perspectives—favorable or unfavorable—concerning objects, people, or
events. They reflect how an individual feels about something
 An attitude is made up of 3 components:
(1) Cognitive Component: refers to the beliefs, opinions, knowledge, or information held by
a person
(2) Affective Component: an emotional or feeling part of an attitude
(3) Behavioral Component: refers to an intention to behave in a certain way towards
someone or something
 Employers are usually interested in job-related attitudes: job satisfaction, job involvement,
organizational commitment &employee engagement

Job Satisfaction
 Refers to a person’s general attitude toward his or her job
 A person with a high level of job satisfaction, has a positive attitude toward his or her job

Satisfaction & Productivity

 The correlation between satisfaction & productivity is fairly strong.
 Organizations with more satisfied employees tend to be more effective than organizations with
fewer satisfied employees

Satisfaction & Absenteeism

 Satisfied employees tend to have lower levels of absenteeism. But sometimes satisfied
employees will take company approved “sick” days. Correlation is not strong.
Satisfaction & Turnover
 Satisfied employees have lower levels of turnover; dissatisfied employees have higher levels of
turnover.
 Very strong relationship
 The level of satisfaction is less important in predicting turnover for superior performers because
the organization typically does everything it can to keep them.
 External factors: labor-market conditions, expectations about alternative job opportunities, length
of employment with the organization.

Job Satisfaction & Customer Satisfaction

 Satisfied front-line employees increase customer appreciation, satisfaction & loyalty because of
their friendliness and responsiveness.
 Interaction with dissatisfied customers can increase an employee’s job dissatisfaction.
(Employees who have regular contact with customers report that rude, thoughtless, or
unreasonably demanding customers adversely affect their job satisfaction)

Job Satisfaction & OCB

 Modest relation
 Satisfied employees would seem to be more likely to talk positively about the organization, help
others and go above and beyond normal job expectations.
 Relationship between job satisfaction and OCB is tempered by perceptions of fairness. (If you
perceive fairness, you are more willing to voluntary engage in behaviors that go beyond your
formal job requirements)
 Individual OCB is influenced by work group OCB (a person trying to stand out from the crowd)

Job Satisfaction & Workplace Misbehavior

 Dissatisfied employees will respond somehow
 Not easy to predict exactly how they’ll respond
 Managers should attack the problem—job dissatisfaction—rather than try to control the
different employee responses.

Job Satisfaction & Organizational Justice

 Organizational justice refers to employees’ perceptions of fairness in organizational procedures
and outcomes. If there is no fairness  higher dissatisfaction.
Job Involvement & Organizational Commitment
 Job Involvement:
o It is the degree to which an employee identifies with his or her job, actively participates
in it, and considers his or her performance to be important to his or her self-worth.
o High levels of involvement are related to fewer absences and lower resignation rates,
and higher employee engagement with work
 Organizational Commitment:
o It is the degree to which an employee identifies with a particular organization and its
goals and wishes to maintain membership in the organization.
o Leads to lower levels of both absenteeism and turnover.
o Could be becoming an outmoded measure as the number of workers who change
employers increases.
 Perceived Organizational Support:
o It is the general belief of employees that their organization values their contribution and
cares about their well-being.
o Represents the commitment of the organization to the employee.
o Providing high levels of support increases job satisfaction and lower turnover.

Employee Engagement
 Occurs when employees are connected to, satisfied with, and enthusiastic about their jobs.
 Highly engaged employees are passionate about and deeply connected to their work.
 Disengaged employees do not care. They show up for work but have no energy or passion for it.
 Benefits of employee engagement are:
o Employees are likely to be top performers
o Higher retention rates (help keep recruiting & training costs low)
o Superior financial performance

Attitudes & Consistency

 People seek consistency in two ways:
o Consistency among their attitudes.
o Consistency between their attitudes and behaviors.
 If an inconsistency arises, individuals:
o Alter their attitudes
or
o Alter their behavior
or
o Develop a rationalization for the inconsistency
Cognitive Dissonance Theory
 The relationship between attitudes and behavior
 Any incompatibility or inconsistency between attitudes or between behavior and attitudes.
 Any form of inconsistency is uncomfortable and individuals will try to reduce the dissonance.
 The intensity of the desire to reduce the dissonance is influenced by:

(1) The importance of the factors creating the dissonance.

• If unimportant the pressure to correct the inconsistency will be low
• If important Individuals may change their behavior (if dissonant behavior is not so important),
change their attitude, or identify compatible factors that outweigh the dissonant ones)

(2) The degree of influence the individual believes he or she has over those factors (believes that
the factors causing the dissonance are controllable). If they believe the dissonance is something
about which they have no choice, they will not be receptive to changing their attitude and will
not feel a need to do so (ex: required by managers’ orders)

(3) Rewards available to compensate for the dissonance.

Coupling high dissonance with high rewards rends to reduce the discomfort by motivating the
individual to believe that there is consistency

Attitude Survey
 An instrument/document that presents employees with a set of statements or questions
eliciting how they feel about their jobs, work groups, supervisors, or their organization.
 Provide management with feedback on employee perceptions of the organization and their
jobs. Consequently, managers can change procedures and policies.

Implications for Managers

 Attitudes warn of potential behavioral problems:
o Managers should do things that generate the positive attitudes that reduce absenteeism
and turnover.
 Attitudes influence behaviors of employees:
o Managers should focus on helping employees become more productive by increasing
their job satisfaction by making word challenging, providing equitable rewards, creating
a supportive environment…
 Employees will try to reduce dissonance unless:
o Managers identify the dissonance as externally imposed and uncontrollable
o Managers provide rewards compensating for the dissonance.
Personality
 The unique combination of emotional, thought and behavioral patterns that affect how a person
reacts and interacts with others.

PERSONALITY TESTS

MBTI
 A general personality assessment tool that measures the personality of an individual using four
categories. The way you answer to any of the 4 categories, puts you at one end or another

Social Interaction: Extravert or Introvert

 Extrovert: Someone active and takes energy from interacting with others; gets demotivated
when they are inactive.
 Introvert: Someone who draws energy from reflection, likes a quiet work environment, likes to
be alone

Preference for gathering data: Sensing or Intuitive

 Sensing: Routine—they dislike new problems unless there is a routine to solve them, show
patience for details and tend to be good at precise work.
 Intuitive: Novelty –they like solving new problems, dislike routines, jump into conclusions,
impatient with details and bad with precision.

Preference for decision making: Feeling or Thinking

 Feeling: Empathy—they care for how other people get affected
 Thinking: Rational –unemotional and uninterested in people’s feelings

Style of making decisions Perceptive or Judgmental

 Perceptive: Curious, Spontaneous –focus on starting a task & postpone decisions & want all the
info about the task
 Judgmental: Needs a plan –focus on completing a task, make decision quickly & want only the
information necessary to get a task done

The Big 5 Model (degree to which…)

Important relationships exist between the big 5 and job performance.

 Extraversion: Sociable, talkative, and assertive

 Agreeableness: Good-natured, cooperative, and trusting
 Conscientiousness: Responsible, dependable, persistent, and achievement oriented
 Emotional Stability: Calm, enthusiastic, and secure or tense, nervous, and insecure
 Openness to Experience: Imaginative, artistically sensitive, and intellectual
Additional Personality Insights
 Although the traits in the big 5 model are highly relevant to understanding behavior, they are
not the only personality traits that can describe someone’s personality

Locus of Control
 Internal locus: persons who believe that they control their own destiny
 External locus: persons who believe that what happens to them is due to luck or chance (the
uncontrollable effects of outside forces)

Machiavellianism
 The degree to which an individual is pragmatic, maintains emotional distance, seeks to gain and
manipulate power and believes that the ends can justify means. The effectiveness of such traits
depends on the nature of the job; for example, in jobs that require high bargaining power, high
Machiavellianism is recommended.

Self-esteem
 The degree to which people like or dislike themselves. Self-esteem is directly related to
expectations for success.
 High SEs
o Believe in themselves and expect success
o Take more risks and use unconventional approaches
o Are more satisfied with their jobs than low SEs
 Low SEs
o Are more susceptible to external influences
o Depend on positive evaluations from others
o Are more prone to conform than high SEs

Self-monitoring
 An individual’s ability to adjust his or her behavior to external, situational factors
 High self-monitors:
o Are sensitive to external cues and behave differently in different situations
o Can present contradictory public persona and private selves —impression management
o Show considerable adaptability in adjusting their behaviours.
 Low self-monitors
o Do not adjust their behavior to the situation
o Are behaviorally consistent in public and private

Risk Taking
 The propensity (or willingness) to take risks
 High risk-takers take less time and require less information than low risk-takers when making a
decision.
 Organizational effectiveness is maximized when the risk-taking propensity of a manager is
aligned with the specific demands of the job assigned to the manager.
Other Personality Traits
 Type A personality: someone who continuously and aggressively struggling to achieve more in
less time. They subject themselves to continual time pressure & deadlines and have moderate-
to high levels of stress (quantity over quality)
 Type B personality: they are not harried by the desire to achieve more. They do not suffer from
a sense of time urgency and are able to relax without guilt
 Proactive Personality: describes people who identify opportunities, show initiative, take action,
and preserve until meaningful change occurs. They are more likely to accept challenges and
achieve success.

Emotions & Emotional Intelligence

 Emotions: Intense feelings (reactions) that are directed at someone or something.
 6 Universal emotions: Anger, Fear, Sadness, Happiness, Disgust, Surprise
 People respond differently to identical emotion-provoking stimuli. In some cases, this can be
attributed to a person’s personality because people vary in their ability to express emotions.
 Jobs make different demands in terms of what types and how much emotion needs to be
displayed (e.g.: nurses need to be calm while announcers at sporting events need to be highly
emotional—also for lawyers and judges)
 Emotional Intelligence: the ability to notice & to manage emotional cues & information
 It is composed of 5 dimensions:
o Self-awareness: ability to know what you’re feeling
o Self-management: ability to manage emotions and impulses
o Self-motivation: ability to persist despite setbacks and failures
o Empathy: ability to sense how others are feeling
o Social skills: ability to handle the emotions of others
 Emotional intelligence appears to be relevant to success in jobs that demand a high degree of
social interaction
 Limitations: vague, immeasurable, question validity

Implications for Managers

 Employee selection: consideration should be given to matching personalities with jobs. By
understanding others’ behavior(s), managers can work better with them.
 Personality Job Fit Theory (Holland):
o An employee’s job satisfaction and likelihood of turnover depends on the compatibility
of the employee’s personality and occupation.
o Key points of the theory:
 There are differences in personalities.
 There are different types of jobs.
 Job satisfaction and turnover are related to the match between personality and
job for an individual.
Personality Types in Different Cultures
 The Big Five model is used in cross-cultural studies.
 Differences are found in the emphasis of dimensions.
 No common personality types for a given country, but a country’s culture influences the
dominant personality characteristics of its people.
 National cultures differ in terms of the degree to which people believe they control their
environment.
 Global managers need to understand personality trait differences from the perspective of each
culture.

Perception
 A process by which individuals give meaning (reality) to their environment by organizing and
interpreting their sensory impressions.

Factors that influence perception

 The Perceiver: personal characteristics that influence what a person sees— interests, biases and
expectations
 The Target being observed: characteristics — distinctiveness, contrast, and similarity. Loud
people are more likely to be noticed.
 The relationship of the target to the background –tendency to group things together
 The Situation: (context) factors — place, time, location — draw attention or distract from the
target

Attribution Theory
Attribution theory was developed to explain how we judge people differently, depending on what
meaning we attribute to a given behavior. We tend to determine whether it was internally caused
behavior: under the individual’s control or externally caused behavior: due to outside factors.

Biases to avoid:

 Fundamental attribution error:

o The tendency to underestimate the influence of external factors and to overestimate
the influence of internal or personal factors.
 Self-serving bias
o The tendency of individuals to attribute their successes to internal factors while blaming
personal failures on external factors.
 Cultural differences
  Determining the source of behaviors depends on 3 factors:
(1) Distinctiveness: different behaviors in different situations
 High Distinctiveness: External
 Low Distinctiveness: Internal
(2) Consensus: behaviors similar to others in same situation (All employees late to traffic)
 High Consensus: External
 Low Consensus: Internal
(3) Consistency: regularity of the same behavior over time
 High Consistency : Internal
 Low Consistency: External

Shortcuts used in Judging Others

 Assumed Similarity: Assuming that others are more like us than they actually are
 Stereotyping: Judging someone on the basis of our perception of a group he or she is a part of
 Halo Effect: Forming a general impression of a person on the basis of a single characteristic of
that person

Implications for Managers

 Employees react to perceptions not reality
 Managers should pay close attention to how employees perceive their jobs and management
actions

Learning

 Any relatively permanent change in behavior that occurs as a result of experience.

 Almost all complex behavior is learned
 If we want to explain, predict, and influence behavior, we need to understand how people learn
 Learning is a continuous, life-long process.
 The principles of learning can be used to shape behavior.
Two theories that help us understand how and why individual behavior occurs:

Operant Conditioning
 Behavior is a function of its consequences and is learned through experience.
 Operant behavior: voluntary or learned behaviors
 Behaviors are learned by making rewards contingent to behaviors.
 Behavior that is rewarded (positively (or negatively) reinforced) is likely to be repeated.
 Behavior that is punished or ignored (extinction) is less likely to be repeated

Social Learning
 The theory that individuals learn through their observations of others and through their direct
experiences.
 The amount of influence that these models have on a person is determined by 4 processes:
o Attentional Processes: People learn when they pay attention to critical features of a model. They
are mostly influenced if the model is attractive, available, important and similar to the person.
o Retention Processes: How well the person remembers the model’s action, even if the model is
no longer available
o Motor reproduction processes: The watching must become a doing  doing the modeled
activities
o Reinforcement processes: People will be motivated to show the behavior if positive rewards are
given.

Shaping: A Managerial Tool

 Attempting to “mold” individuals by guiding their learning in graduated steps such that they
learn to behave in ways that most benefit the organization. It offers a logical approach to
achieve the desired behavior, by reinforcing each successive step that moves the person closer
to the desired behavior (reinforcing improvement).
 There are 4 ways to shape behavior
o Positive reinforcement: a behavior followed by something pleasant
o Negative Reinforcement: a behavior followed by eliminating or withdrawing of
something unpleasant
o Punishment: Penalize undesirable behavior and eliminates it
o Extinction: when a behavior is not reinforced (ignoring)

Implications for Managers

 Managers should expect that employees will regard them as models. Good manager behavior will
promote good employee behavior.
Ch. 15: Motivating Employees
What is Motivation?
 Is the result of an interaction between the person and a situation; it is not a personal
trait.
 The Process by which a person’s efforts are energized, directed, and sustained toward
attaining a goal. (energy, direction, persistence)
 Three key elements of motivation:
Energy:
o a measure of intensity or drive
o a motivated person puts forth efforts and works hard
Direction:
o Effort channeled in a direction that benefits the organization
o Directed toward & consistent with organizational goals
Persistent:
o exerting effort to achieve goals

Early Theories of Motivation

Maslow’s Hierarchy of Needs Theory

  Within every person is a hierarchy of 5 needs:
o Physiological needs: food, drink, shelter…
o Safety needs: security, protection from physical & emotional harm
o Social needs: affection, belongingness, acceptance and friendship
o Esteem needs:
 Internal esteem factors: self-respect, autonomy, achievement
 External esteem factors: status, recognition, attention
o Self-actualization needs: growth, achieving one’s potential, self-fulfillment

 Each level in the needs hierarchy must be substantially satisfied before the next need
becomes dominant. An individual moves up the needs hierarchy from one level to the
next
 Maslow separated the needs into higher & lower levels
o Lower-order needs (satisfied externally): physiological & safety
o Higher-order needs (satisfied internally): social, esteem & self-actualization
 Managers using Maslow’s hierarchy of needs do things to satisfy employees’ needs
 Satisfied needs will no longer motivate.
 Motivating a person depends on knowing at what level that person is on the hierarchy.

Mcgregor’s Theory X & Theory Y

 Theory X is a negative view of people that assumes that workers have little ambition,
dislike work, want to avoid responsibility, and need to be closely controlled to work
effectively
 Theory Y is a positive view that assumes that employees enjoy work, seek out and
accept responsibility, and exercise self-direction
 Motivator: nurture a sense of responsibility for work and independence, participative
approach, and commitment to organizational goals.
Assumptions:
• Theory Y should guide management practice.
• Motivation is maximized by participative decision making, interesting jobs, and
good group relations.
Herzberg’s Two-Factor Theory / Motivation-hygiene Theory
 Factors influencing what makes you feel satisfied at your job are motivators. They are
intrinsic and psychological. To motivate people, managers should emphasize motivators.
 Factors influencing what makes you not feel satisfied at your job are hygiene factors.
They are extrinsic and environmental.

Mclelland’s Three-Needs Theory

 There are three major acquired needs that are major motivators in work.
 Need for achievement (nAch)
o The drive to excel and succeed
o The Desire to do something better and more efficiently than was done before.
o Internal drive (intrinsic motivation)
o External drive (extrinsic pressure exerted by expectations of others)
o When this need is high the person is motivated to succeed when competing with
others.
 Need for power (nPow)
o The need to influence the behavior of others and have them listen to you.
 Need of affiliation (nAff)
o The desire for interpersonal relationships and association with people
Contemporary Theories of Motivation

Goal-Setting Theory
 Proposes that setting goals that are accepted, specific, and challenging yet achievable
will result in higher performance than having no or easy goals.
 Works best when:
o Low in uncertainty avoidance (managers and employees seek challenging goals)
o Not too high on power distance (employees are independent and relatively
empowered)
o High on internal locus of control
o Acceptance and commitment (employees participate in setting the goals)
 Benefits of participating in goal setting:
o Increases the acceptance of goals
o Fosters commitment to difficult, public goals
o Provides for self-feedback (internal locus of control) that guides behavior and
motivates performance (Self-efficacy)
 Not a contradiction when they say difficult goals maximize motivation while the
achievement motivation (3-needs theory) states that motivation is stimulated from
moderately challenging goals—because not everybody scores high on the nAch (goal-
setting theory is for the people in general)
 People will do better if they get feedback on how well they are progressing toward their
goals, because feedback help identify discrepancies between what they have done and
what they want to do
 Self-generated feedback is a more powerful motivator than feedback coming from
someone else
 3 other contingencies other than feedback that influence the goal-performance:
o Goal Commitment: commitment is more likely when goals are made public,
when an individual has an internal locus of control, and when goals are self-set
rather than assigned
o Adequate self-efficacy: the individual’s belief that he or she is capable of
performing a task. (people with high self-efficacy have more confidence with
their ability to succeed in a task and respond to negative feedback with
increased efforts)
o National Culture: Cultural characteristic should have:
 low score on power distance (independent employees)
 Low in uncertainty avoidance (seek challenging goals)
 High assertiveness (performance considered important by both managers
& subordinates)
Job Design Theory
 The way into which tasks can be combined to form complete jobs.
 Designing motivating jobs: create meaningful work experiences that satisfy employees’
growth needs.
 Factors influencing job design
o Changing organizational environment/structure
o The organization’s technology
o Employees’ skill, abilities, and preferences
 Job enlargement: Increasing the job’s scope (number and frequency of tasks).
 Job enrichment: Increasing responsibility and autonomy (depth) in a job.
 There are five primary job characteristics that influence motivation:
o Skill variety: how many skills and talents are needed?
o Task identity: does the job produce a complete work?
o Task significance: how important is the job?
o Autonomy: how much independence does the jobholder have?
o Feedback: do workers know how well they are doing?
Equity Theory
 Proposes that:
o employees perceive what they get from a job situation (outcome) in relation to
what they put in (input) and then compare their inputs–outcomes ratio with the
inputs–outcomes ratios of relevant others.
 The referent is the other person, system, or self an individual compares himself or
herself against in order to assess equity.
 Perceived Ratio:
o If the ratios are perceived as equal then a state of equity (fairness) exists.
o If the ratios are perceived as unequal, inequity exists and the person feels under-
or over-rewarded.
o When inequities occur, employees will attempt to do something to rebalance the
ratios (seek justice):
Distort own or others’ ratios
Induce others to change their own inputs or outcomes
Change own inputs (increase or decrease efforts) or outcomes (seek
greater rewards)
Choose a different comparison (referent) other (person, systems, or self)
Quit their job
 Employees are concerned with both the absolute and relative nature of organizational
rewards.
 Distributive justice
o The perceived fairness of the amount and allocation of rewards among
individuals (i.e., who received what)
o Influences an employee’s satisfaction.
 Procedural justice
o The perceived fairness of the process is used to determine the distribution of
rewards (i.e., how who received what).
o Affects an employee’s organizational commitment.
Expectancy Theory
 States that an individual tends to act in a certain way, based on the expectation that the
act will be followed by a given outcome, and on the attractiveness of that outcome to
the individual
 It includes 3 variables:
o Expectancy, or effort-performance linkage
The probability perceived by an individual that exerting a given amount of effort
will lead to a certain level of performance
o Instrumentality, or performance-reward linkage
The perception that a particular level of performance will result in attaining a
desired outcome (reward)
o Valence or attractiveness of reward
The attractiveness or importance that an individual places on the potential
outcome or reward that can be achieved on the job. Valence considers both the
goals & needs of the individual
 The key to the theory is to understand and manage employee goals and the linkages
among and between effort, performance and rewards.
o Effort: employee abilities and training/development
o Performance: valid appraisal systems
o Rewards (goals): understanding employee needs
Cross-cultural Challenges
 Motivational programs are most applicable in cultures where individualism and
achievement are cultural characteristics.

 Uncertainty avoidance of some cultures inverts Maslow’s needs hierarchy.

 The need for achievement (nAch) is lacking in other cultures.

 Collectivist cultures view rewards as “entitlements” to be distributed based on individual

needs, not individual performance.

Cross-Cultural Consistencies

 Interesting work is widely desired, as is growth, achievement, and responsibility.

Ch. 16: Managers as Leaders
Who are Leaders & What is Leadership?
 A Leader is someone who can influence others to achieve a goal and who has
managerial authority
 Leadership is what leaders do. It is the process of leading a group & influencing that
group to achieve its goals
 Leadership research has tried to answer: What is an effective leader?

Early Leadership Theories

Trait Theories (1920s-1930s)

 Research on the leadership process identified 7 traits associated with successful leadership:
o Drive: high effort level, high desire for achievement, ambitious, energetic,
persistent, take initiatives
o Desire to lead: strong desire to influence others, demonstrate willingness to take
responsibility
o Honesty and integrity: truthful, shows high consistency between work and deed
o Self-confidence
o Intelligence: create visions, solve problems, make correct decisions
o Job-relevant knowledge: high degree of knowledge about the company, industry
o Extraversion: energetic, lively, sociable, assertive
 Later research focused on how leaders interacted with group members.

Four Behavioral Leadership Theories

 Data collected from managers and their subordinates using surveys, diaries, direct
observation.
University of Iowa Studies (Kurt Lewis/Psychologist)
 Identified three leadership styles:
– Autocratic style: centralized authority, low participation
– Democratic style: involvement, high participation, feedback
– Laissez-faire style: hands-off management
 Mixed results: No specific style was consistently better for producing better
performance
 Employees were more satisfied under a democratic leader than an autocratic leader

Ohio State Studies

 Identified two dimensions of leader behavior:

– Initiating structure: Leader defines his or her role and the roles of the group
members. (focused on planning and organizing)
– Consideration: Leader builds relations through showing mutual trust and respect for
members’ ideas and feelings.
 Situational factors appeared to strong influence leadership effectiveness
 Mixed results: High-high leaders generally, but not always, achieved high group task
performance and satisfaction.

University of Michigan Studies

 Identified two dimensions of leader behavior:

– Employee-oriented: emphasizing personal relationships
– Production-oriented: emphasizing task accomplishment
 Findings: Leaders who are employee-oriented are strongly associated with high group
productivity and high job satisfaction

The Managerial Grid

  Appraises leadership styles using two dimensions: Concern for people & Concern for
production

Contingency Leadership TheoriesThe Fiedler Model

Fielder’s Contingency Model of Leadership

 Proposes that effective group performance depends upon the proper match between the leader’s
style of interacting with followers and the degree to which the situation allows the leader to control
and influence.
 Assumptions:
o A certain leadership style is most effective in different types of situations
o Leaders do not readily change leadership styles.
o Matching the leader to the situation or changing the situation to make it favorable to the
leader is required.
 Situational factors in matching the leader to the situation:
o Leader-member relations: Trust, confidence, and respect for the leader (good or poor)
o Task structure: How well the tasks are defined, structured, and clear to subordinates (high
or low)
o Position power: the power to hire, fire, allocate bonus and impact promotion (strong or
weak)
 Behavior – LPC (Least preferred co-worker)
o Task-oriented: focus on the task, organize the work and the responsibilities to make sure the
job is done.
 o Relationship-oriented: focus on developing relationships with people and trust

Hersey & Blanchard’s Situational Leadership Theory

 Successful leadership is achieved by selecting the right leadership style which is contingent on the
level of the followers’ readiness because in the end, it is the followers who accept or reject the
leader.
 As followers reach higher levels of readiness, the leader responds not only be decreasing control but
also by decreasing relationship behavior.

o Acceptance: leadership effectiveness depends on whether followers accept or reject a leader

o Readiness: the extent to which followers have the ability and willingness to accomplish a specific
task
o Posits four stages of follower readiness:
• R1: followers are unable and unwilling
• R2: followers are unable but willing
• R3: followers are able but unwilling
• R4: followers are able and wiling

 Creates four specific leadership styles:

• Telling: high task-low relationship leadership

• Selling: high task-high relationship leadership
• Participating: low task-high relationship leadership
 • Delegating: low task-low relationship leadership

Path-Goal Theory

 States that the leader’s job is to assist his or her followers in attaining their goals and to provide
direction or support to ensure their goals are compatible with organizational goals
 Leaders assume different leadership styles at different times depending on the situation
Contemporary Views of Leadership

Transformational-Transactional Leadership
 Transactional Leadership: Leaders who guide or motivate their followers in the direction of
established goals by clarifying role and task requirements
 Transformational Leadership: Leaders who inspire followers to transcend their own self-
interests for the good of the organization by clarifying role and task requirements.

Team Leadership
 Having patience to share information
 Being able to trust others and to give up authority
 Understanding when to intervene
 Managing the team’s external boundary
 Facilitating the team process
 Coaching, facilitating, handling disciplinary problems, reviewing team and individual
performance, training and communication

Leadership Issues in the 21st Century

Managing Power

 Legitimate power: the power a leader has as a result of his or her position
 Coercive power: the power a leader has to punish or control
 Reward power: the power to give positive benefits or rewards
 Expert power: the influence a leader can exert as a result of his or her expertise, skills,
knowledge
 Referent power: the power of a leader that arises because of a person’s desirable resources or
admired personal traits.
Developing Trust
 Credibility: The assessment of a leader’s honesty, competence, and ability to inspire by his or her
followers.
 Trust: The belief of followers and others in the integrity, character, and ability of a leader. Related to
increases in job performance, organizational citizenship behaviors, job satisfaction, and organization
commitment.

Dimensions of Trust:

Integrity: Honesty and truthfulness

Competence: Technical and interpersonal knowledge and skills
Consistency: Reliability, predictability, and good judgment in handling situations
Loyalty: Willingness to protect a person, physically and emotionally
Openness: Willingness to share ideas and information freely