Kelly kinicki city on a hill

Robert Kreitner Angelo Kinicki

Both of Arizona State University

Organizational Behavior tenth edition

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ORGANIZATIONAL BEHAVIOR Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2013, 2010, 2008, 2007, 2004, 2001, 1998, 1994, 1992, 1989 by The McGraw-Hill Companies, Inc. All rights reserved. Printed in the United States of America. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

This book is printed on acid-free paper.

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ISBN 978-0-07-802936-3 MHID 0-07-802936-8

Vice president and editor-in-chief: Brent Gordon Editorial director: Paul Ducham Executive editor: Michael Ablassmeir Executive director of development: Ann Torbert Development editor: Kelly I. Pekelder Editorial coordinator: Andrea Heirendt Vice president and director of marketing: Robin J. Zwettler Marketing director: Amee Mosley Senior marketing manager: Michelle Heaster Marketing specialist: Elizabeth Steiner Vice president of editing, design, and production: Sesha Bolisetty Senior project manager: Dana M. Pauley Senior buyer: Michael R. McCormick Senior designer: Matt Diamond Senior photo research coordinator: Jeremy Cheshareck Photo researcher: Editorial Image, LLC Senior media project manager: Bruce Gin Media project manager: Balaji Sundararaman, Hurix Systems Pvt. Ltd. Cover and interior design: Cara Hawthorne, cara david DESIGN Typeface: 10.5/12 Times Roman Compositor: MPS Limited, a Macmillan Company Printer: R. R. Donnelley

Library of Congress Cataloging-in-Publication Data

Kreitner, Robert. Organizational behavior / Robert Kreitner, Angelo Kinicki. -- 10th ed. p. cm. Includes index. ISBN-13: 978-0-07-802936-3 (alk. paper) ISBN-10: 0-07-802936-8 (alk. paper) 1. Organizational behavior. I. Kinicki, Angelo. II. Title. HD58.7.K766 2013 658.3--dc23 2011043477

www.mhhe.com

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Angelo Kinicki, DBA, is a professor, author, and consultant. He is a professor of management and has held the Weatherup/Overby Chair in Leadership since 2005. He also is a Dean’s Council of 100 Distinguished Scholar at the W P Carey School of Business. He joined the faculty in 1982, the year he received his doctorate in business administration from Kent State University. His primary research interests include leadership, organizational culture, organizational change, and multilevel issues associated with predicting organizational ef- fectiveness. Angelo has published more than 90 articles in a variety of academic journals and is coauthor of seven textbooks (25 including revisions) that are used by hundreds of universi- ties around the world. Several of his books have been trans- lated into multiple languages.

Angelo is an award-winning researcher and teacher. He has received several awards, including a best research paper award from the Organizational Behavior (OB) division of the Academy of Management, the All Time Best Reviewer Award (1996–99) and the Excellent Reviewer Award (1997–98) from the Acad-

emy of Management Journal, and six teaching awards from Arizona State University [Outstanding Teaching Award—MBA and Master’s Program, John W Teets Outstanding Graduate Teacher Award (twice), Outstanding Undergraduate Teaching Excellence Award, Outstanding Graduate Teaching Excellence Award, and Outstanding Executive Development Teaching Excellence Award].

Robert (Bob) Kreitner, PhD, is profes- sor emeritus of management at Arizona State University and a member of ASU’s W P Carey School of Business Faculty Hall of Fame. Prior to joining ASU in 1975, Bob taught at Western Illinois University. He also taught organizational behavior at Thunderbird. Bob has addressed a diverse array of audiences worldwide on management topics. He has authored articles for journals such as Organizational Dynamics, Business Hori- zons, Educational and Psychological Measurement , Journal of Organizational Behavior Management , and Journal of Business Ethics. He also is coauthor (with Fred Luthans) of the award- winning book Organizational Behavior Modifi cation and Beyond: An Operant and Social Learning Approach and coauthor (with Carlene Cassidy) of Management, 12th edition, an introductory management text. His textbooks collectively have been through 31 editions.

Among his consulting and executive development clients have been American Express, SABRE Computer Services, Honeywell, Motorola, Amdahl, the Hopi Indian Tribe, State Farm

Insurance, Goodyear Aerospace, Doubletree Hotels, Bank One–Arizona, Nazarene School of Large Church Management, Ford Motor Company, US Steel, and Allied-Signal. In 1981–82 he served as chairman of the Academy of Management’s Management Education and Development Division.

Bob was born in Buffalo, New York. After a four-year enlistment in the US Coast Guard, including service on the icebreaker EASTWIND in Antarctica, Bob attended the University of Nebraska–Omaha on a football scholarship. Bob also holds an MBA from the University of Nebraska–Omaha and a PhD from the University of Nebraska–Lincoln. While working on his PhD in business at Nebraska, he spent six months teaching management courses for the university in Micronesia. In 1996, Bob taught two courses in Albania’s fi rst-ever MBA program. He taught a summer leadership program in Switzerland from 1995 to 1998. Bob and his wife Margaret, a retired Intel Corp manager, live in Phoenix with their two cats Yahoo and Sweetie Pie. They enjoy world travel, lots of hiking, and fi shing in Alaska.

About the Authors

Bob and his wife Margaret atop 13,140-foot Boundary Peak (Nevada’s highest point).

Angelo with Na’vi at the Colorado Wolf and Wildlife center. Na’vi is a 40-pound Black Phase Timber Wolf.

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vi About the Authors

Angelo also has served on the editorial review boards for the Academy of Management Journal, Personnel Psychology, the Journal of Management, and the Journal of Vocational Behavior. Angelo has been an active member of the Academy of Management, including service as a representative at large for the Organizational Behavior division, member of the Best Paper Award committee for both the OB and Human Resources (HR) divisions, chair of the committee to select the best publication in the Academy of Management Journal, and program committee reviewer for the OB and HR divisions.

Angelo also is a busy international consultant and is a principal at Kinicki and Associates Inc, a management consulting fi rm that works with top management teams to create organizational change aimed at increasing organizational effectiveness and profi tabil- ity. He has worked with many Fortune 500 fi rms as well as numerous entrepreneurial organizations in diverse industries. His exper- tise includes facilitating strategic/operational planning sessions, diagnosing the causes of organizational and work-unit problems, conducting organizational culture interventions, implementing performance management systems, designing and implementing performance appraisal systems, developing and administering surveys to assess employee attitudes, and leading management/ executive education programs. He developed a 360-degree leadership feedback instrument called the Performance Management Leadership Survey (PMLS) that is used by companies throughout the United States and Europe. The survey is used to assess an individual’s leadership style and to coach individuals interested in developing their leadership skills.

Angelo and his wife Joyce have enjoyed living in the beautiful Arizona desert for 30 years and are natives of Cleveland, Ohio. They enjoy traveling, golfi ng, hiking, spending time in the White Mountains, and spoiling Nala, their golden retriever.

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With love to my precious little family, Margaret and our cats Yahoo and Sweetie Pie.

—B.K.

With respect and admiration to Dr William Spears. His work has reduced the carbon footprint of many schools, hospitals, and churches. He also is a role model for educators and entrepreneurs everywhere. I am proud to be his friend.

—A.K.

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par t one

The World of Organizational Behavior

1 Organizational Behavior: The Quest for People- Centered Organizations and Ethical Conduct

2 Managing Diversity: Releasing Every Employee’s Potential

3 Organizational Culture, Socialization, and Mentoring

4 International OB: Managing across Cultures

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Learning Objectives When you fi nish studying the material in this chapter, you should be able to:

LO.1 Defi ne the term organizational behavior, and contrast McGregor’s Theory X and Theory Y assumptions about employees.

LO.2 Identify the four principles of total quality management (TQM).

LO.3 Defi ne the term e-business, and describe the Net Generation.

LO.4 Contrast human and social capital, and explain why we need to build both.

LO.5 Defi ne the term management, and identify at least fi ve of the eleven managerial skills in Wilson’s profi le of effective managers.

LO.6 Characterize 21st-century managers.

LO.7 Describe Carroll’s global corporate social responsibility pyramid, and discuss the problem of moral erosion.

LO.8 Identify four of the seven general ethical principles, and explain how to improve an organization’s ethical climate.

LO.9 Describe the sources of organizational behavior research evidence.

Organizational Behavior: The Quest for People-Centered Organizations and Ethical Conduct

chapter 1

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There’s a good chance you have never heard of Tony Hsieh (pronounced “Shay”), CEO of Zappos.com. But if you are among the legions of satisfi ed and loyal custom- ers of the online retailer of footwear and other goods, you owe him an enthusiastic high fi ve. Initially as an investor/ adviser and eventually CEO, Hsieh guided Zappos from a struggling Internet start-up to a merger with Amazon. com in 2009 for $1.2 billion. Along the way, he helped Zappos develop a zany corporate culture of close-knit employees obsessed with great 24/7 customer service. “Customer Service Isn’t Just a Department!” trumpets the fi rm’s website. When the Amazon deal was announced, Hsieh told an all-hands meeting of employees that each of them would receive a free Kindle e-book reader and a retention bonus equal to 40% of their annual salary. Most importantly, he vowed to maintain the company’s cher- ished culture. The following excerpt from Hsieh’s new book, Delivering Happiness: A Path to Profi ts, Passion, and Purpose , highlights how Zappos.com came to put people—customers and employees—fi rst.

I e-mailed the entire company several times and got a lot of suggestions and feedback on which core values were the most important to our employees.

I was surprised the process took so long, but we wanted to make sure not to rush through the process because whatever core values we eventually came

Why Is Zappos.com So Good at Zapping the Competition? up with, we wanted to be ones that we could truly embrace. . . .

We eventually came up with our fi nal list of ten core values [from an initial list of 37], which we still use today:

1. Deliver WOW Through Service 2. Embrace and Drive Change 3. Create Fun and a Little Weirdness 4. Be Adventurous, Creative, and Open-Minded 5. Pursue Growth and Learning 6. Build Open and Honest Relationships with Com-

munication 7. Build a Positive Team and Family Spirit 8. Do More with Less 9. Be Passionate and Determined

10. Be Humble. . . .

Be Humble is probably the core value that ends up affecting our hiring decisions the most. There are a lot of experienced, smart and talented people we interview that we know can make an immediate impact on our top or bottom line. But a lot of them are also really egotisti- cal, so we end up not hiring them.

Our philosophy at Zappos is that we’re willing to make short-term sacrifi ces (including lost revenue or profi ts) if we believe that the long-term benefi ts are worth it. Protecting the company culture and sticking to core values is a long-term benefi t. 1

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4 Part One The World of Organizational Behavior

Tony Hsieh does more than just talk about the im- portance of his company’s people; he trusts, em- powers, and listens to them. No surprise then that Zappos.com ranked number 6 on Fortune ’s 2011 “100 Best Companies to Work For” list. 2 Hsieh helped create what Stanford University’s Jeffrey Pfeffer calls a “people-centered” organization. Research evi- dence from companies in both the United States and Germany shows the following seven people-centered practices to be strongly associated with much higher profi ts and signifi cantly lower employee turnover:

1. Job security (to eliminate fear of layoffs). 2. Careful hiring (emphasizing a good fi t with the

company culture). 3. Power to the people (via decentralization and

self-managed teams). 4. Generous pay for performance. 5. Lots of training. 6. Less emphasis on status (to build a “we” feeling). 7. Trust building (through the sharing of critical information). 3

Importantly, these factors are a package deal, meaning they need to be in- stalled in a coordinated and systematic manner—not in bits and pieces.

According to Pfeffer, only 12% of today’s organizations have the systematic approaches and persistence to qualify as true people-centered organizations, thus giving them a competitive advantage. 4 To us, an 88% shortfall in the quest for people-centered organizations represents a tragic waste of human and economic potential. Pfeffer recently couched his call for greater people-centeredness in the “green management” term sustainability : “Just as there is concern for protecting natural resources, there could be a similar level of concern for protecting human re- sources.” 5 There are profound ethical implications as well, especially during the re- cent deep recession with millions of layoffs. At people-centered organizations (see Real World/Real People for an inspiring example), layoffs are a very last resort, not a knee-jerk fi rst response to bad news. Both practical experience and research tell us that layoffs hurt everyone, including the “survivors” who keep their jobs. A recent study of 318 companies led to this conclusion: “Three-fourths of 4,172 workers who have kept their jobs say their productivity has dropped since their organiza- tions let people go.” 6 Of course, layoffs are sometimes unavoidable. But imagina- tive people-centered organizations can make layoffs a last resort with tactics such as across-the-board pay cuts and/or reduced hours and voluntary unpaid leaves of absence. Additionally, consider these unique people-centered tactics:

Example. Vermont’s Rhino Foods, which makes the cookie dough for Ben & Jerry’s ice cream, recently sent 15 factory workers to nearby lip balm manufacturer Autumn Harp for a week to help it handle a holiday rush. The employees were paid by Rhino, which then invoiced its neighbor for the hours worked. President Ted Castle is looking to adopt a similar approach with salaried managers, too. “It’s a lot easier to just do the layoff,” says Castle. “But in the long term, it’s not easier for the business.” Matt Cooper, vice-president of Larkspur (Calif.) recruiting fi rm Accolo, asked employees to take fi ve days of unpaid leave this quarter but won’t dock paychecks until March. If big deals come through, he’ll lift the pay cut. 7

Each of us needs to accept the challenge to do a better job of creating and main- taining people-centered organizations, whatever our role(s) in society—employer/

Zappos’s CEO Tony Hsieh likes to mix hard work and fun at the online retailer.

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entrepreneur, employee, manager, stockholder, student, teacher, voter, elected offi cial, social/political activist. Toward that end, the mission of this book is to help increase the number of people-centered and ethically managed organizations around the world to improve the general quality of life. 8

The purpose of this fi rst chapter is to defi ne organizational behavior (OB); examine its contemporary relevance; explore its historical, managerial, and ethical contexts; and introduce a topical road map for the balance of this book.

Welcome to the World of OB Organizational behavior deals with how people act and react in organizations of all kinds. Think of the many organizations that touch your life on a regular basis; organizations that employ, educate, connect, inform, feed, heal, protect, and en- tertain you. Cradle to grave, we interface with organizations at every turn. Ac- cording to Chester I Barnard’s classic defi nition, an organization is “a system of consciously coordinated activities or forces of two or more persons.” 9 Organiza- tions are a social invention helping us to achieve things collectively that we could not achieve alone. For better or for worse, they extend our reach. Consider the inspiring example of the World Health Organization (WHO):

Example. In 1967, 10 to 15 million people around the globe were struck annually by smallpox. That year, the World Health Organization set up its smallpox-eradication unit. In 13 years it was able to declare the world free of the disease. In 1988, 350,000 people were affl icted by polio when the WHO set up a similar eradication unit. Since then it has spent $3 billion and received the help of 20 million volunteers from around the world. The result: in 2003 there were only 784 reported cases of polio. 10

On the other hand, organizations such as al-Qaeda kill and terrorize, and oth- ers such as failed banks and businesses squander our resources. Organizations are

organization System of consciously coordinated activities of two or more people.

Like countless small-business owners, Lola Gonzalez ago- nizingly resolved to trim her fi rm’s nine-person staff when the economic recovery began to sputter . . . [in early 2010].

Unlike other entrepreneurs, she picked an unlikely employee to lay off: herself.

The owner of Accurate Background Check in Ocala, Fla., says she couldn’t bear to fi re employees who have worked there for years. So she stopped paying herself a six-fi gure salary and got a job for less than half the pay as a social worker.

“How could you let somebody go that you trusted and that trusted you?” says Gonzalez, 51, who’s still a social worker. . . .

Employees initially froze in fear [during her announce- ment], then erupted in laughter. Until they realized she was serious. . . .

Besides putting in a 40-hour week, . . . Gonzalez gets twice-weekly phone updates on goings-on at her busi- ness and still does certain background checks herself without getting paid.

What are the broader, long-term benefits of this people-centered practice?

SOURCE: Excerpted from P Davidson, “How a Boss Saved Jobs: She Laid Herself Off,” USA Today , November 26, 2010, p 1B.

real WORLD // real PEOPLE: ethics Lola Gonzalez Laid Herself Off First!

TO THE POINT Why is it important to study organizational behavior, regardless of one’s organizational level or specialty?

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6 Part One The World of Organizational Behavior

the chessboard on which the game of life is played. To know more about organi- zational behavior—life within organizations—is to know more about the nature, possibilities, and rules of that game.

Organizational Behavior: An Interdisciplinary Field Organizational behavior, commonly referred to as OB, is an interdisciplinary fi eld dedicated to better understanding and managing people at work. By defi nition, organizational behavior is both research and application oriented. Three basic levels of analysis in OB are individual, group, and organizational. OB draws upon a diverse array of disciplines, including psychology, management, sociology, organization theory, social psychology, statistics, anthropology, general systems theory, economics, information technology, political science, vocational counsel- ing, human stress management, psychometrics, ergonomics, decision theory, and ethics. 11 This rich heritage has spawned many competing perspectives and theories about human work behavior. By 2003, one researcher had identifi ed 73 distinct theories about behavior within the fi eld of OB. 12

Some FAQs about Studying OB Through the years we (and our colleagues) have fi elded some frequently asked questions (FAQs) from our students about our fi eld. Here are the most common ones, along with our answers.

Why Study OB? If you thoughtfully study this book, you will learn more about yourself, how to interact effectively with others, and how to thrive (not just survive) in organizations. Lots of insights about your own personality, emotions, values, job satisfaction, perceptions, needs, and goals are available in Part 2. Rela- tive to your interpersonal effectiveness, you will learn about being a team player, building trust, managing confl ict, negotiating, communicating, and infl uencing and leading others. We conclude virtually every major topic with practical how- to-do-it instructions. The idea is to build your skills in areas such as self-man- agement, making ethical decisions, avoiding groupthink, listening, coping with organizational politics, handling change, and managing stress. Respected OB scholar Edward E Lawler III created the “virtuous career spiral” in Figure 1–1 to illustrate how OB-related skills point you toward career success. “It shows that increased skills and performance can lead to better jobs and higher rewards.” 13

If I’m an Accounting (or Other Technical) Major, Why Should I Study OB? Many students in technical fi elds such as accounting, fi nance, computer science, and engineering consider OB to be a “soft” discipline with little or no relevance. You may indeed start out in a narrow specialty, but eventually your hard-won success will catch up with you and you will be tapped for some sort of su- pervisory or leadership position. Your so-called soft people skills will make or break your career at that point. Also, in today’s team-oriented and globalized workplace, your teamwork, cross-cultural, communication, confl ict handling, and negotiation skills and your powers of persuasion will be needed early and often. Jack Welch, the legendary CEO of General Electric, and Suzy Welch, the former editor of Harvard Business Review, offered this answer to a business school professor’s question about how best to prepare students for today’s global business environment:

Example. We’d make the case that the nitty-gritty of managing people should rank higher in the educational hierarchy. In the past two years we’ve visited 35 B-schools around the world and have been repeatedly surprised by how little classroom at- tention is paid to hiring, motivating, team-building, and fi ring. Instead, B-schools seem far more invested in teaching brainiac concepts—disruptive technologies,

LO.1

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Chapter One Organizational Behavior 7

complexity modeling, and the like. Those may be useful, particularly if you join a consulting fi rm, but real managers need to know how to get the most out of people. We hope you have the clout to make sure people management is front and center at your university. If you do, you’ll launch your students’ careers with a real head start. 14

Can I Get a Job in OB? Organizational behavior is an academic designation. With the exception of teaching/research positions, OB is not an everyday job cat- egory such as accounting, marketing, information technology, or fi nance. Students of OB typically do not get jobs in organizational behavior, per se. This reality in no way demeans OB or lessens its importance in effective organizational management. OB is a horizontal discipline cutting across virtually every job category, business function, and professional specialty. Anyone who plans to make a living in a large or small, public or private, organization needs to study organizational behavior.

A Historical Perspective of OB A historical perspective of the study of people at work helps in studying organi- zational behavior. According to a management history expert, this is important because:

Example. Historical perspective is the study of a subject in light of its earliest phases and subsequent evolution. Historical perspective differs from history in that the ob- ject of historical perspective is to sharpen one’s vision of the present, not the past. 15

organizational behavior Interdis- ciplinary fi eld dedicated to better

understanding and managing people at work.

fi gure 1–1 OB-Related Skills Are the Ticket to Ride the Virtuous Career Spiral

Job

Job

Rew ard

s

R ew

ar ds

Performance Skills

Motivation and Satisfaction

Performance Skills

SOURCE: Edward E Lawler III, Treat People Right! How Organizations and Individuals Can Propel Each Other into a Virtual Spiral of Success, Jossey-Bass, 2003, p 21. Reprinted with permission of John Wiley & Sons, Inc.

TO THE POINT What lessons from McGregor and Deming can help managers build human and social capital?

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8 Part One The World of Organizational Behavior

In other words, we can better understand where the fi eld of OB is today and where it appears to be headed by appreciating where it has been and how it is being redirected. 16 Let us examine four signifi cant landmarks in the understanding and management of people in the workplace.

1. The human relations movement. 2. The quality movement. 3. The Internet and social media revolution. 4. The age of human and social capital.

The Human Relations Movement A unique combination of factors during the 1930s fostered the human relations movement. First, following legalization of union–management collective bargain- ing in the United States in 1935, management began looking for new ways of handling employees. Second, behavioral scientists conducting on-the-job research started calling for more attention to the “human” factor. Managers who had lost the battle to keep unions out of their factories heeded the call for better human relations and improved working conditions. One such study, conducted at Western Electric’s Chicago-area Hawthorne plant, was a prime stimulus for the human relations movement. Ironically, many of the Hawthorne fi ndings have turned out to be more myth than fact.