OrganizationalBehaviorAn Evidence-Based Approach Twelfth Edition

Fred LuthansGeorge Holmes Distinguished Professorof Management, University of Nebraska

MeGrawHill

Boston Burr Ridge, IL Dubuque, IA Madison, Wl New York San Francisco St. LouisBangkok Bogota Caracas Kuala Lumpur Lisbon London Madrid Mexico CityMilan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto

Contents

About the Author iv

Preface v

PART ONEENVIRONMENTAL ANDORGANIZATIONAL CONTEXT 1

Evidence-Based Consulting Practices 1

Chapter 1Introduction to Organizational Behavior:An Evidence-Based Approach 5

Learning Objectives 5The Challenges Facing Management 6Undergoing a Paradigm Shift 8A New Perspective for Management 10Evidence-Based Management 12Historical Background: The Hawthorne Studies 13

The Illumination Studies: A Serendipitous Discovery 13Subsequent Phases of the Hawthorne Studies 14Implications of the Hawthorne Studies 15

Research Methodology to Determine ValidEvidence 16The Overall Scientific Perspective 16Starting with Theory 17The Use of Research Designs 18The Validity of Studies 19

Denning Organizational Behavior 20Theoretical Foundation for Organizational

Behavior 20Cognitive Framework 20Behavioristic Framework 21Social Cognitive Framework 22

The Conceptual Framework for the Text 25Summary 25Ending with Meta-Analytic Research Findings 26Questions for Discussion and Review 27Internet Exercise: Nonjobs or Telecommuting 27Real Case: The Big Squeeze on Workers 28Organizational Behavior Case: How Is This Stuff

Going to Help Me? 29

Organizational Behavior Case: Too Nice to People 29

xii

Organizational Behavior Case: Conceptual Model:Dream or Reality? 30

Chapter 2Environmental Context: Globalization,Diversity, and Ethics 31

Learning Objectives 31Globalization 31Diversity in the Workplace 34

Reasons for the Emergence of Diversity 35Developing the Multicultural Organization 38Individual Approaches to Managing Diversity 39Organizational Approaches to Managing Diversity 41

Ethics and Ethical Behavior in Organizations 46The Impact of Ethics on "Bottom-Line " Outcomes 47

Summary 49Ending with Meta-Analytic Research Findings 50Questions for Discussion and Review 52Internet Exercise: Ethical Issues in the Workplace 52Organizational Behavior Case: How Far-Reaching Are

Globalization and Technology? 52Organizational Behavior Case: I Want Out 53Real Case: Not Treating Everyone the Same 53Organizational Behavior Case: Changing with the

Times 54Real Case: The Ethics of Downsizing 55

Chapter 3Organizational Context: Designand Culture 57

Learning Objectives 57The Organizational Theory Foundation 58

Historical Roots 58Modern Theoretical Foundation 58What Is Meant by a Learning Organization? 59Organizational Behavior in the LearningOrganization 60Learning Organizations in Action 61

Modern Organization Designs 63Horizontal Organizations 64Contemporary Designs: Hollow and Modular 65Network Designs 66The Virtual Organization 68

Contents xiii

The Organizational Culture Context 71Definition and Characteristics 71Uniformity of Culture 73

Creating and Maintaining a Culture 74How Organizational Cultures Start 75Maintaining Cultures through Steps of Socialization 76Changing Organizational Culture 79

Summary 83Ending with Meta-Analytic Research Findings 84Questions for Discussion and Review 84Internet Exercise: The Structure and Culture of

Organizations 85Real Case: Web-Based Organizations 85Organizational Behavior Case: The Outdated

Structure 86Organizational Behavior Case: Keeping Things the

Same 86Organizational Behavior Case: Out with the Old,

In with the New 87

Chapter 4Organizational Context: RewardSystems 88

Learning Objectives 88Pay: The Dominant Organizational Reward 90

The Theoretical Background on Money as a Reward 90Research on the Effectiveness of Pay 92Traditional Methods of Administering Pay 93Pay for Performance 95New Pay Techniques 99

Recognition as an Organizational Reward 100Recognition versus Money 100Examples of Effective Formal Recognition Systems 102

Benefits as Organizational Rewards 106Traditionally Offered Benefits 106Newer Types of Benefits 108

Summary 111Ending with Meta-Analytic Research Findings 112Questions for Discussion and Review 113Internet Exercise: Rewards in the Workplace 114Real Case: CEOs Get Fewer Perks 114Real Case: Rewarding Teamwork in the Plains 115Real Case: Different Strokes for Different Folks 116Organizational Behavior Case: Huge Benefits, Little

Understanding or Use 117

Experiential Exercises for Part One 118

Exercise: Synthesis of Student and InstructorNeeds 118

Exercise: Work-Related Organizational Behavior:Implications for the Course 118

Exercise: Organizations 119

PART TWOCOGNITIVE PROCESSES OFORGANIZATIONAL BEHAVIOR

Evidence-Based Consulting Practices 123

123

Chapter 5Personality, Perception, and EmployeeAttitudes 125

Learning Objectives 125The Meaning of Personality 125The Role of Heredity and the Brain 126

Self-Esteem 128Person-Situation Interaction 129The Socialization Process 129The "Big Five"Personality Traits 132Myers-Briggs Type Indicator (MBTI) 134

The Perception Process 135Sensation versus Perception 136Suhprocesses of Perception 137

Social Perception 138Characteristics ofPerceiver and Perceived 138Stereotyping 139The Halo Effect 139

Work-Related Attitudes: PA/NA 140Employee Attitudes 141

What Is Meant by Job Satisfaction? 141Influences on Job Satisfaction 142Outcomes of Job Satisfaction 144Organizational Commitment 146The Meaning of Organizational Commitment 147The Outcomes of Organizational Commitment 148Guidelines to Enhance Organizational

Commitment 148Organizational Citizenship Behaviors (OCBs) 149

Summary 150Ending with Meta-Analytic Research

Findings 151Questions for Discussion and Review 152Internet Exercise: Assessing Your Personality 153Real Case: It's All a Matter of Personality 153Organizational Behavior Case: Same Accident,

Different Perceptions 154Organizational Behavior Case: Ken Leaves the

Company 155

xiv Contents

Chapter 6Motivational Needs, Processes,and Applications 156

Learning Objectives 156The Basic Motivation Process 157

Primary Motives 157Secondary Motives 158Intrinsic versus Extrinsic Motives 160

Work-Motivation Theories 161Maslow s Hierarchy of Needs: An Important Historical

Contribution 162

Herzberg s Two-Factor Theory of Motivation 165The Porter-Lazier Expectancy Theory of Work

Motivation 167Equity Theory of Work Motivation 169The Relationship between Equity Theory and

Organizational Justice 172Attribution Theory 173Other Work Motivation Theories: Control and Agency 177

Motivational Application through Job Design 178Job Rotation 179Job Enlargement 179Job Enrichment 179The Job Characteristics Approach to Task Design 180Practical Guidelines for Redesigning Jobs 182

Motivational Application through Goal Setting 183Theoretical Understanding of Goal Setting 183Research Evidence on the Impact of Goal Setting 184Other Performance Management Application Techniques

Associated with Goal Setting 187Impact on the Psychological Contract 189

Summary 189Ending with Meta-Analytic Research Findings 190Questions for Discussion and Review 192Internet Exercises: What Types of Jobs Motivate

You? 193Internet Exercise: What Is the Motivation Potential of

Jobs at Southwest Airlines? 193Real Case: At UPS Managers Learn to Empathizei with Their Employees 194Real Case: Making It a Nice Place to Work 195Organizational Behavior Case: What Do They

Want? 196Organizational Behavior Case: Tom, Dick, and

Harry 196Organizational Behavior Case: The Rubber Chicken

Award 197Organizational Behavior Case: Specific Goals for

Human Service 197

Chapter 7Positive Organizational Behaviorand Psychological Capital 199

Learning Obj ectives 199Positive Psychology 200Self-Efficacy/Confidence 202

The Theoretical Background and Meaning ofEfficacy 202

The Process and Impact of Self-Efficacy 204Sources of Efficacy 206Implications for Efficacy in the Workplace

andPOB 209Optimism 212

The Dimensions of Optimism 212Optimism in the Workplace 214

Hope 217Resiliency 218Psychological Capital (PsyCap) 219

Background and Research on PsyCap 220PsyCap Development 221

Other Positive Constructs 222Happiness or Subjective Well-Being (SWB) 222The Background on SWB 224Emotional Intelligence (El) 225The Role of Intelligence 229Emotional Intelligence 231

Summary 234Ending with Meta-Analytic Research Findings 236Questions for Discussion and Review 236Internet Exercise: What Is'Your IQ and EQ? 237Real Case: High Tech—High Fear 238Organizational Behavior Case: People Problems

atHEI 238

Experiential Exercises for Part Two 240

Exercise: Self-Perception and Developmentof the Self-Concept 240

Exercise: Job Design Survey 240Exercise: Motivation Questionnaire 242

PART THREEDYNAMICS OF ORGANIZATIONAL

BEHAVIOR 245

Evidence-Based Consulting Practices 245

Chapter 8Communication and Decision Making 247Learning Objectives 247

Contents xv

Background of the Role of Communication 248The Definition of Communication 249

Nonverbal Communication 250Body Language and Paralanguage 250Improving Nonverbal Effectiveness 252

Interpersonal Communication 252Importance of How to Talk to Others 254The Importance of Feedback 254Other Important Variables in Interpersonal

Communication 256Interactive Communication in Organizations 256

The Extent and Implications of InteractiveCommunication 257

The Purposes and Methods of InteractiveCommunication 257

The Decision-Making Process 259Behavioral Decision Making 260

Decision Rationality 260Decision-Making Styles 262

Participative Decision-Making Techniques 264Creativity and Group Decision Making 265

The Process of Creativity 265Psychological Definition and Analysis of Creativity 267Creativity Techniques for Management Decision

Making 268Group Decision Making 269

Summary 270Ending with Meta-Analytic Research Findings 271Questions for Discussion and Review 272Internet Exercise: Communication in the Workplace 272Internet Exercise: Decision Making

in Organizations 273Real Case: Online Communication to Share

Knowledge 273Organizational Behavior Case: Doing

My Own Thing 274Organizational Behavior Case: Bad Brakes 274Real Case: Putting a Human Face on Rational

Decisions 275Organizational Behavior Case: Harry Smart—Or

Is He? 276

Chapter 9Stress and Conflict 277

Learning Objectives 277The Emergence of Stress 277

Contemporary Environment DemandsWhat Stress Is, and Is Not 2 78What about Burnout? 2 79

The Causes of Stress 280Extraorganizational Stressors 281Organizational Stressors 282Group Stressors 282Individual Stressors: The Role of Dispositions 284

Intraindividual Conflict 288Conflict Due to Frustration 288Goal Conflict 290Role Conflict and Ambiguity 290

Interactive Conflict 292Interpersonal Conflict 292Intergroup Behavior and Conflict 293

The Effects of Stress and Intraindividual Conflict 294Physical Problems Due to Stress and Conflict 295Psychological Problems Due to Stress and

Conflict 295Behavioral Problems Due to Stress and Conflict 296

Coping Strategies for Stress and Conflict 297Individual Coping Strategies 298Organizational Coping Strategies 300

Negotiation Skills: Going Beyond ConflictManagement 302Traditional Negotiation Approaches 302Contemporary Negotiation Skills 304

Summary 305Ending with Meta-Analytic Research Findings 306Questions for Discussion and Review 307Internet Exercise: Managing Stress in

Organizations 308Real Case: When Workers Just Can't Cope 308Real Case: Round-the-Clock Stress 309Organizational Behavior Case: Sorry, No Seats Are

Left; Have a Nice Flight 310Organizational Behavior Case: A Gnawing v

Stomachache 311Organizational Behavior Case: Drinking Up the

Paycheck 311

Chapter 10Power and Politics 312

277

Learning Obj ectives 312The Meaning of Power 313

The Distinctions among Power, Authority,and Influence 313

The Classifications of Power 314Contingency Approaches to Power 318

The Special Case of Empowerment 322The Complexity of Empowerment 323Putting Empowerment into Action 324

xvi Contents

Political Implications of Power 326A Political Perspective of Power in Organizations 327Specific Political Strategies for Power Acquisition 330A Final Word on Power and Politics 333

Summary 334Ending with Meta-Analytic Research Findings 335Questions for Discussion and Review 336Internet Exercise: The Uses and Abuses of

Power 336Real Case: Fighting Back 337Organizational Behavior Case: Throwing Away a

Golden Opportunity 337

Chapter 11Groups and Teams 339

Learning Objectives 339The Nature of Groups 339

The Meaning of a Group and Group Dynamics 340The Dynamics of Group Formation 340Types of Groups 343Implications from Research on Group and Team

Dynamics 345Group/Team Effectiveness 346

The Dynamics of Informal Groups 347Norms and Roles in Informal Groups 347The Informal Organization 348

The Dysfunctions of Groups and Teams 350Norm Violation and Role Ambiguity/Conflict 350The Groupthink, Conformity Problem 350Risky Shift Phenomenon 351Dysfunctions in Perspective 351Social Loafing 352

Work Teams 352The Nature of a Team 353Cross-Functional Teams 354Virtual Teams 355Self-Managed Teams 356How to Make Teams More Effective 356

Summary 360Ending with Meta-Analytic Research Findings 361Questions for Discussion and Review 361Internet Exercise: Work Environment in Team-Based

Organizations 362Real Case: There Are Teams, and There Are

Teams 362Organizational Behavior Case: The Schoolboy

Rookie 363Organizational Behavior Case: The Blue-Ribbon

Committee 364

Experiential Exercises for Part Three 365

Exercise: Groups and Conflict Resolution 365Exercise: NASA Moon Survival Task 367Exercise: TGIF (Thank God It's Friday!) 368Exercise: Power and Politics 371

PART FOURMANAGING AND LEADING FOR HIGHPERFORMANCE 373

Evidence-Based Consulting Practices 373

Chapter 12Behavioral Performance Management 378

Learning Objectives 378Learning Theory Background 379

Behavioristic Theories 3 79Cognitive Theories 381Social Learning and Social Cognitive Theory 382

Principles of Learning: Reinforcement andPunishment 384Laws of Behavior 384Critique of Reinforcement Theory 384Reinforcement as Used in Behavioral Management 386Positive and Negative Reinforcers 386The Use of Punishment 387

The Role of Organizational Reward Systems 389Analysis of Money as a Reinforcer 390Nonfinancial Rewards 391

Behavioral Performance Management,or O.B. Mod. 394Step 1: Identification of Performance Behaviors 398Step 2: Measurement of the Behavior 399Step 3: Functional Analysis of the Behavior 399Step 4: Development of an Intervention Strategy 400Step 5: Evaluation to Ensure Performance

Improvement 403Application of Behavioral Management 404Manufacturing versus Service Applications 405

Summary 406Ending with Meta-Analytic Research Findings 406Questions for Discussion and Review 408Internet Exercise: Applying Behavior Management

Principles to Athletic Performance 408Real Case: The Elite Circle of $ 1 CEOs 408Organizational Behavior Case: Contrasting Styles 410Organizational Behavior Case: Volunteers Can't Be

Punished 410

Contents xvii

Organizational Behavior Case: Up the PieceRate 411

Organizational Behavior Case: A TardinessProblem 411

Chapter 13Effective Leadership Processes 413

Learning Obj ectives 413What is Leadership? 413The Historically Important Studies

on Leadership 415The Iowa Leadership Studies 416The Ohio State Leadership Studies 416The Early Michigan Leadership Studies 418

Traditional Theories of Leadership 418Trait Theories of Leadership 419From Traits to States and Skills Development 420Group and Exchange Theories of Leadership 421Contingency Theory of Leadership 423Path-Goal Leadership Theory 426

Modern Theoretical Processes of Leadership 428Charismatic Leadership Theories 428Transformational Leadership Theory 430Substitutes for Leadership 431Authentic Leadership 433Leadership across Cultures 434Project GLOBE and the Future of International

Leadership Studies 436

Summary 439Ending with Meta-Analytic Research Findings 440Questions for Discussion and Review 441Internet Exercise: Leading in Times of Crisis 442Real Case: No Organization Chart and an 80-Blank-

Pages Policy Manual 442Real Case: The Seven Secrets of Inspiring

Leaders 443

Chapter 14Great Leaders: An Evidence-BasedApproach 445

Learning Objectives 445

Leadership in the New Environment 446Leadership Styles 448

Style Implications of the Classic Studies and the ModernTheories 449

Classic Styles 451Leadership Styles in Perspective 452An Evidence-Based Positive, Authentic Leadership

Style 454The Roles and Activities of Leadership 455

Leader/Manager Roles 455Activities of Successful and Effective Leaders: The Real

Managers Study 457Leadership Skills 463

What Skills Do Leaders Need? 463Traditional Leadership Development Programs 466Contemporary Leadership Development

Approaches 468Other Indirect Techniques for Developing Leadership

Effectiveness 469Summary 471Ending with Meta-Analytic Research Findings 472Questions for Discussion and Review 472Internet Exercise: Leaders as Coaches 473Real Case: Jeanne P. Jackson: A Retailing Leader 473Real Case: For Leaders, Ignorance Isn't Bliss 474Organizational Behavior Case: The Puppet 475

Experiential Exercises for Part Four 476

Exercise: Role Playing and O.B. Mod. 476Exercise: Leadership Questionnaire 477Exercise: Paper Plane Corporation 480

Footnote References and SupplementalReadings 482

References for Application Boxes and RealCases 548

Index 551