BA105-1: BA105-1:

Organizational BehaviorOrganizational Behavior

Spring 2005Spring 2005

Professor Jim LincolnProfessor Jim Lincoln

Walter A. Haas School of BusinessUniversity of California, Berkeley

Class Agenda for TodayClass Agenda for Today

1.1. Introduction to OBIntroduction to OB

2.2. Course mechanicsCourse mechanics

2. Overview of topics 2. Overview of topics

When organizations do well or poorly, When organizations do well or poorly, what is the what is the firstfirst explanation that comes explanation that comes

to mind?to mind?– The CEO did it.The CEO did it.

– Beware of attribution bias!Beware of attribution bias!

• The tendency to attribute causation to the actions of individuals The tendency to attribute causation to the actions of individuals

Organizational behavior teaches that the effectiveness of people in Organizational behavior teaches that the effectiveness of people in organizations depends on their situation-specific relationships organizations depends on their situation-specific relationships

with one another with one another

What is Organizational Behavior?What is Organizational Behavior?

• The study of (general/people) managementThe study of (general/people) management

• More precisely: More precisely:

– The study of the behavior and attitudes of The study of the behavior and attitudes of individuals and groups in organizations (micro OB)individuals and groups in organizations (micro OB)

– The study of the structure, culture, and leadership of The study of the structure, culture, and leadership of organizations in relation to their tasks and their organizations in relation to their tasks and their environments (macro OB)environments (macro OB)

OB draws on all of social & OB draws on all of social & behavioral science…behavioral science…

• PsychologyPsychology

• SociologySociology

• EconomicsEconomics

• Political SciencePolitical Science

• AnthropologyAnthropology

• HistoryHistory

Even some engineering now and then…Even some engineering now and then…

Some OB journals Some OB journals • Practitioner-oriented:Practitioner-oriented:

– Academy of Management ExecutiveAcademy of Management Executive– Business HorizonsBusiness Horizons– California Management ReviewCalifornia Management Review– Harvard Business ReviewHarvard Business Review– Sloan Management ReviewSloan Management Review

• Scholar-oriented:Scholar-oriented:– Academy of Management JournalAcademy of Management Journal– Administrative Science QuarterlyAdministrative Science Quarterly– Journal of Applied PsychologyJournal of Applied Psychology– Organizational Behavior and Human Decision ProcessesOrganizational Behavior and Human Decision Processes– Organization ScienceOrganization Science– Strategic Management JournalStrategic Management Journal

Some OB GurusSome OB Gurus

• Warren BennisWarren Bennis• Peter DruckerPeter Drucker• Michael HammerMichael Hammer• Rosabeth KanterRosabeth Kanter• Raymond MilesRaymond Miles• Henry MintzbergHenry Mintzberg• Tom PetersTom Peters• Jeffrey PfefferJeffrey Pfeffer

Research methods in OB run the Research methods in OB run the social science gamutsocial science gamut

– Experiments (both lab and field)Experiments (both lab and field)

– SurveysSurveys

– EthnographiesEthnographies

– Archival Research (documents & records)Archival Research (documents & records)

How does OB differ from HR? How does OB differ from HR?

• OB is a OB is a lineline, not a specialized , not a specialized staffstaff, responsibility, responsibility– Much OB management is CEO- or division-head level Much OB management is CEO- or division-head level

• Vision and cultureVision and culture

• Re-orgsRe-orgs

• OB is about principles, policies, & strategiesOB is about principles, policies, & strategies– HR is more about tools and implementationHR is more about tools and implementation

Why should business students study Why should business students study OB? OB?

• ManagersManagers– How to organize and motivate your employeesHow to organize and motivate your employees– How to initiate and manage changeHow to initiate and manage change

• EntrepreneursEntrepreneurs– You have the big idea, you have the venture You have the big idea, you have the venture

capital lined up. How do you organize and capital lined up. How do you organize and motivate your team? motivate your team?

Why should business students study Why should business students study

OB? (cont’d)OB? (cont’d) • ConsultantsConsultants

– problem-solving toolproblem-solving tool– useful for case interviewsuseful for case interviews

• InvestorsInvestors– will that merger work?will that merger work?– will that reorganization actually add will that reorganization actually add

shareholder value? shareholder value? – is that CEO as competent as s/he thinks s/he is? is that CEO as competent as s/he thinks s/he is?

Why should business students study Why should business students study OB? OB? (cont’d)(cont’d)

• Issues critical to managing your career:Issues critical to managing your career:– understanding culture and person-job fitunderstanding culture and person-job fit– Getting and using power and influenceGetting and using power and influence– implementing your ideas and goalsimplementing your ideas and goals

Some criticisms of OBSome criticisms of OB

• Isn’t it obvious or common-sensical?Isn’t it obvious or common-sensical?

– Many things are “obvious” after-the-fact. Example:Many things are “obvious” after-the-fact. Example:

• The best form of organization is flat, flexible, & empowering The best form of organization is flat, flexible, & empowering

• The best form of organization depends on the context The best form of organization depends on the context (e.g., tasks, people, competition, technology, etc.) (e.g., tasks, people, competition, technology, etc.)

Beware of hindsight bias!Beware of hindsight bias!

• Isn’t it obvious or common-sensical?Isn’t it obvious or common-sensical?

– Many things are “obvious” after-the-fact. Example:Many things are “obvious” after-the-fact. Example:

• The best form of organization is flat, flexible, & empowering The best form of organization is flat, flexible, & empowering

• The best form of organization depends on the context The best form of organization depends on the context (e.g., tasks, people, competition, technology, etc.) (e.g., tasks, people, competition, technology, etc.)

Beware of hindsight bias!Beware of hindsight bias!

Other criticismsOther criticisms• OB might be important, but it’s an art, not a science OB might be important, but it’s an art, not a science

– i.e., can’t be systematically analyzed or taughti.e., can’t be systematically analyzed or taught

• Can only be learned by doing Can only be learned by doing

• Maybe it’s religion…Maybe it’s religion…

– There is an element of preaching in OB There is an element of preaching in OB

• Tom Peters as bible-thumping evangelistTom Peters as bible-thumping evangelist

• OB may be important for OB may be important for maintainingmaintaining an organization, but it is not an organization, but it is not strategicstrategic

• OB might be important, but it’s an art, not a science OB might be important, but it’s an art, not a science

– i.e., can’t be systematically analyzed or taughti.e., can’t be systematically analyzed or taught

• Can only be learned by doing Can only be learned by doing

• Maybe it’s religion…Maybe it’s religion…

– There is an element of preaching in OB There is an element of preaching in OB

• Tom Peters as bible-thumping evangelistTom Peters as bible-thumping evangelist

• OB may be important for OB may be important for maintainingmaintaining an organization, but it is not an organization, but it is not strategicstrategic

OB OB isis strategic strategic

OB and HR are OB and HR are key to the development of key to the development of critical & hard-to-imitate capabilitiescritical & hard-to-imitate capabilities

• Such capabilities refer to an organization’s core skills and knowledge that give it sustainable competitive advantage: allow it to better serve customers and clients than the competition– Examples:Examples:

• Clear vision and strong cultureClear vision and strong culture• Motivated peopleMotivated people• Effective teams and networksEffective teams and networks

• Studies of IPOs among 200+ firms showed that Studies of IPOs among 200+ firms showed that people-centered practices were associated with people-centered practices were associated with faster time to IPO and higher survival rates.faster time to IPO and higher survival rates.

There is abundant evidence that There is abundant evidence that people management is key to people management is key to

competitive strategy and successcompetitive strategy and success

• Watson, Wyatt, an HR consulting firm, concluded Watson, Wyatt, an HR consulting firm, concluded that “Companies that link employee developmentthat “Companies that link employee development to business strategy have 40% higher total share-to business strategy have 40% higher total share- holder returns than companies that do not.”holder returns than companies that do not.”

• Studies have shown that a one standard Studies have shown that a one standard deviation improvement in OB and HR managementdeviation improvement in OB and HR management practices produces increases of $20,000-$40,000 practices produces increases of $20,000-$40,000 in stock market value in stock market value per employeeper employee..

• A Bain study showed that brokerage firms thatA Bain study showed that brokerage firms that increased broker retention by 10% increased increased broker retention by 10% increased broker value by 155%. Studies in trucking, retail,broker value by 155%. Studies in trucking, retail, and hospitality have found similar results.and hospitality have found similar results.

“ “All organizations now routinely say, All organizations now routinely say, ‘ ‘People are our greatest asset.’ Yet fewPeople are our greatest asset.’ Yet few practice what they preach, let alone trulypractice what they preach, let alone truly believe it…”believe it…”

Peter Drucker (1992)Peter Drucker (1992)

    ““You got a problem with the You got a problem with the

guy in the cubicle next to you? guy in the cubicle next to you? I don’t care; shoot him”I don’t care; shoot him”

Marc Andreessen, Marc Andreessen, Co-founder of Co-founder of NetscapeNetscape

Marc Andreessen, Marc Andreessen, Co-founder of Co-founder of NetscapeNetscape

““In the new economy, competition isIn the new economy, competition isglobal, capital is abundant, ideas areglobal, capital is abundant, ideas aredeveloped quickly and cheaply, anddeveloped quickly and cheaply, andpeople are willing to change jobs often.people are willing to change jobs often.In that kind of environment…all thatIn that kind of environment…all thatmatters is talent…superior talent willmatters is talent…superior talent willbe tomorrow’s prime source of be tomorrow’s prime source of competitive advantage.” competitive advantage.”

E. Chambers et al. (1998). E. Chambers et al. (1998). ““The War for Talent.”The War for Talent.”The McKinsey Quarterly, The McKinsey Quarterly, 2-15.2-15.

The problem, then, is how to get, The problem, then, is how to get, keep, and utilize talented peoplekeep, and utilize talented people

• It is not just a question of payIt is not just a question of pay

• Even talented people must be led, Even talented people must be led, organized, and motivated organized, and motivated

The man who spends more than 50% of his time on people issues considers his greatest achievement the care and feeding of talent.

''This place runs by its great people,'' says Welch. ''The biggest accomplish-ment I've had is to find great people. An army of them. They are all better than most CEOs. They are big hitters, and they seem to thrive here.''

He believes he has to know people well enough to trust them and their judgments:

''I don't know how to build an aircraft engine,'' he says. ''I don't know what should run on NBC…. We're in the cat-and-dog insurance business in England. I don't really want to be in that business, but the guy who brought me that idea wanted to be in it, and I trust him. He'll take it and make it work.''

Welch knows by sight the names and responsibilities of at least the top 1,000 people at GE.

The man who spends more than 50% of his time on people issues considers his greatest achievement the care and feeding of talent.

''This place runs by its great people,'' says Welch. ''The biggest accomplish-ment I've had is to find great people. An army of them. They are all better than most CEOs. They are big hitters, and they seem to thrive here.''

He believes he has to know people well enough to trust them and their judgments:

''I don't know how to build an aircraft engine,'' he says. ''I don't know what should run on NBC…. We're in the cat-and-dog insurance business in England. I don't really want to be in that business, but the guy who brought me that idea wanted to be in it, and I trust him. He'll take it and make it work.''

Welch knows by sight the names and responsibilities of at least the top 1,000 people at GE.

“How Jack Welch runs GE.” Business Week, May 29, 1998.

“How Jack Welch runs GE.” Business Week, May 29, 1998.

GE CEO Jack Welch as hands-on manager of talentGE CEO Jack Welch as hands-on manager of talent

And some organizations get excellent And some organizations get excellent results with merely “OK” peopleresults with merely “OK” people

See C. A. O'Reilly III and J. Pfeffer: See C. A. O'Reilly III and J. Pfeffer: Hidden Value: How Great Companies Hidden Value: How Great Companies Achieve Extraordinary Results With Achieve Extraordinary Results With Ordinary PeopleOrdinary People. . Harvard Business School Press, 2000.Harvard Business School Press, 2000.

See C. A. O'Reilly III and J. Pfeffer: See C. A. O'Reilly III and J. Pfeffer: Hidden Value: How Great Companies Hidden Value: How Great Companies Achieve Extraordinary Results With Achieve Extraordinary Results With Ordinary PeopleOrdinary People. . Harvard Business School Press, 2000.Harvard Business School Press, 2000.

Only 10% of people are in the top 10%. Great companies not only hire talent, they build it and unleash the energy and talent of all their people.

Only 10% of people are in the top 10%. Great companies not only hire talent, they build it and unleash the energy and talent of all their people.

Course Website (Course Website (not on Catalystnot on Catalyst))http://courses.haas.berkeley.edu/spring2005/ba105/http://courses.haas.berkeley.edu/spring2005/ba105/

(login=ugba105; pw=jlincoln)

• Instructor infoInstructor info

• SyllabusSyllabus

• Supplementary readings Supplementary readings

• Useful linksUseful links

• Course announcementsCourse announcements

• Powerpoints posted Powerpoints posted afterafter lecture lecture

Class meetingsClass meetings• Tuesday: Tuesday:

– Introduce a new topic Introduce a new topic – Lecture/discussionLecture/discussion– Exams Exams

• ThursdayThursday– Class businessClass business– Review of lecture and readingsReview of lecture and readings– Case analysisCase analysis– Videos & exercisesVideos & exercises– Team project discussionsTeam project discussions

ReadingsReadings• Electronic course reader on Electronic course reader on Study.netStudy.net ( (http://

catalyst.haas.berkeley.edu))

– Note: if you are currently WAITLISTED for BA105-1:

• You have temporary access to Study.net through Catalyst. The access terminates after the second week if you are not then enrolled.  

• 10 hard copies of the first four weeks of readings are on reserve in the Long Library

• Other readings posted on course website or handed outOther readings posted on course website or handed out

– Readings on the syllabus are required. Other readings are Readings on the syllabus are required. Other readings are recommended unless otherwise indicated recommended unless otherwise indicated

• Cases and readings must be prepared Cases and readings must be prepared priorprior to the class for to the class for which they are assignedwhich they are assigned

Course RequirementsCourse Requirements• Class participation (15%)Class participation (15%)

– In-class discussions, particularly of casesIn-class discussions, particularly of cases– Oral presentation on team projectsOral presentation on team projects– Team member ratingsTeam member ratings

• Exams: in-class midterm and final (50%)Exams: in-class midterm and final (50%)– Essay questions that will involve case analysisEssay questions that will involve case analysis

• Team project (30%)Team project (30%) – You will be assigned to teams of 3-5 persons eachYou will be assigned to teams of 3-5 persons each– You will study OB problems/issues in a real organization You will study OB problems/issues in a real organization – Oral presentation and paper (12-15 pages)Oral presentation and paper (12-15 pages)

• In general, all members will receive the same gradeIn general, all members will receive the same grade

• Participation in research experiments (5%)Participation in research experiments (5%)

Other course businessOther course business• Enrollment issuesEnrollment issues

– Go to the Go to the Undergraduate Program Office (S450)(S450)

• Arrival and attendanceArrival and attendance• EmailEmail• Face cards and name tents Face cards and name tents

– see website see website announcements

• Seating: pick a seat you love and stay there!Seating: pick a seat you love and stay there!• Readers:Readers:

– Keiko Sakarai and Barak TurovskyKeiko Sakarai and Barak Turovsky

• Class reps• Guest instructors: Jennifer Kurkoski & others Guest instructors: Jennifer Kurkoski & others

Course overview….Course overview….

A focus on problem-solvingA focus on problem-solving

• You will learn to diagnose organizational You will learn to diagnose organizational problems, and design and implement problems, and design and implement solutions solutions

• The “congruence model” as a frameworkThe “congruence model” as a framework• Getting strategy, tasks, people, formal structure, Getting strategy, tasks, people, formal structure,

informal structure, etc., to fit togetherinformal structure, etc., to fit together

Critical issuesCritical issues• The old and new in organizational designThe old and new in organizational design

– How to know if that reorg makes senseHow to know if that reorg makes sense

• What is leadership and how should you do it? What is leadership and how should you do it? – So you have a brilliant idea-how do you get people to follow you? So you have a brilliant idea-how do you get people to follow you?

• How to analyze and change organizational cultureHow to analyze and change organizational culture

• How to design jobs and incentive systems that motivate How to design jobs and incentive systems that motivate employeesemployees– Clue: “just pay them more” is not enough.Clue: “just pay them more” is not enough.

More critical issuesMore critical issues• How to design and lead teams that perform well How to design and lead teams that perform well

and avoid the pitfalls of teamworkand avoid the pitfalls of teamwork

• How to maximize your own power and efficacyHow to maximize your own power and efficacy– Building and managing through networks Building and managing through networks – Getting power and using itGetting power and using it

• Leveraging diversity at home and abroad for Leveraging diversity at home and abroad for competitive advantagecompetitive advantage

Schedule of topicsSchedule of topics

• Part 1: Introduction (1 week)Part 1: Introduction (1 week)– an introduction to course themesan introduction to course themes– the congruence perspectivethe congruence perspective

• Part 2: The hard stuff: formal structure (3 weeks)Part 2: The hard stuff: formal structure (3 weeks)– Traditional designs, modern designs, teamsTraditional designs, modern designs, teams

• Part 3: The soft stuff: informal organization I (2 weeks)Part 3: The soft stuff: informal organization I (2 weeks)– Leadership and culture Leadership and culture

Course Topics (continued)Course Topics (continued)

• Part 4: Informal organization II (2 weeks)Part 4: Informal organization II (2 weeks)– Politics and networksPolitics and networks

• Part 5: Soft/hard and micro: Decision-making, Part 5: Soft/hard and micro: Decision-making, motivation, and incentives (3 weeks)motivation, and incentives (3 weeks)

• Part 6: Managing diversity at home and Part 6: Managing diversity at home and abroad (2 weeks)abroad (2 weeks)

Thursday sessionThursday session

• Introduction to discussion sectionIntroduction to discussion section• Read and prepare to discuss:Read and prepare to discuss:

– What general managers doWhat general managers do• Read Kotter articleRead Kotter article

– The congruence model as a framework for The congruence model as a framework for organizational problem-solvingorganizational problem-solving

• Read Nadler and Tushman chapterRead Nadler and Tushman chapter