Organizational Behavior Theoretical Notes

Organizational Behavior Theoretical Notes
Organizational Behavior Definition

Organizational behavior is the study of individuals and groups within an organizational context,
and the study of internal processes and practices as they will influence the effectiveness of
individuals, teams and organizations.
How did we arrived until today?
Historical Overview
Classical Approaches on How to Manage work and individuals within the organization
1)
Frederick Taylor The scientific Management Methodological and scientifically

approach to management
Taylor introduced the scientific study of work, as a response for the perception that
managers did not know how to manage work. He agreed that in order to maximize efficiency
within an organization, true scientific studies of the best scientifically methods had to be
conducted. He defended that the most effective way to manage work, individuals and the
organizations required the following steps:
Develop Scientific Methods for doing work

Establish Goals for productivity
Establish a system of rewards
Train employees in how to use the scientific methods and apply it to work, in order to
meet the organizational goals.
Taylor defined 4 principles of management, which would reduce waste and increase efficiency in
work.
Vtor Pereira Winter 2014

2)
Henry Ford organizational functioning on basis of standardized tasks, which would

reduce waste and increase efficiency.
Fords ideas on how to manage work came along with his Black T model and standardized
assembly lines. (+ Tools, - Employees)
Ford 3 principles of Management
Standardized Assembly
Lines
3)
Increase Usage of
specialized tools
Eliminate Skilled workers
Henry Fayol determined both functions and principles of management
6 Functions of Management and 14 principles of Management

According to Fayol, management should be about: 1) Forecasting; 2) Planning; 3) Organizing; 4)
Commanding; 5) Coordinating; 6) Controlling
And what would be the principles of guidance of management? Some of the 14 principles included
division of work, rewards, equity, stability of tenure, etc.
4)
Max Weber Bureaucratic Management
Weber argued that both management and organizational functioning should have its basis on a
Bureaucratic System. Bureaucracy would, according to Weber, help to manage work more
effectively as, since every rule was written, every role clearly defined and the authority clearly
established, it would allow both coordination and understanding of everything done.
-
Extensive Use of written papers, Extensive use of rules, well established system of
supervision and subordination, etc.
In sum, the Classical Approach perceived management and organizational functioning as a

methodological and scientifically study, where it was important to study and find the best ways to
design work , in such a way that efficiency would be maximized. The Classical Approach defined
employees as objects, whose main motivations were purely economic.
At the end of 19th century, study of management went from the classical approach, where the
relationship of Individual & Organization had its basis on an Economic Exchange Norm of
Reciprocity, to a Human Relations Approach, where the Norm of Reciprocity was defined as a
Social Exchange one.
5)
Elton Mayo Human Relations within the Organization
Mayo argued that the classical approach ignored the beyond the monetary motivation sources of
employees, and that ignoring the human relation part would bring negative consequences to the
organization as a whole, by creating monotony, fatigue, reduced work environment, etc.
In order to understand the role of Human Relations in an organization, Mayo conducted several
experiments, called the Hawthorne Experiment.
Illumination studies Reduced Intensity of illumination level to see the effect on performance
o Outcome Increase in Performance! Mayo concluded that increase in performance
had as cause the positive emotional effects experimented by employees, as a result of
having a sympathetic or interested in observer!

With the Hawthorn Experiments, Mayo concluded that the work place was an interdependent
social system, where the informal organization and work group norms also influenced
performance. Mayo also asserted that job performance is not only predicted by aptitudes (best
man for the job) but also dependent on external contextual social factors.
Until now, weve seen that management went from Efficiency Focus, to the Human Relations
integration (Mayo). In the 20th century, a new approach to organizations was introduced The
Systems Theory.
6) Katz & Kahn introduced the concept

of organizations as open systems, where the
external environment interacts and gets
involved with an organization. Therefore, both
authors argued that it was important to assess
the degree at which the organization context
could influence the behavioral structure of the
organization.
7) Emery & Trist Contingency Theory

In the 70s, besides considering the influence and relevance of the organizational external
context, it was acknowledge that, since the external environment was constantly shifting,
there was no best way to manage an organization, and that the success of the organization
depended majorly on the ability of adjusting and adapting the organization to the external
changes.
Emery & Trist provided some guidelines on how to manage effectively an organization, by
creating different types of environment in which one organization might be included.
How is the environment changing?
Low
How complex is
the n of
External
Elements?
Fast
Placid Clustered
Turbulent
Highly
Long Range Planning and

Forecasting
Planning is not useful, as

environment is shifting fast,
Major Dynamics
Random Placid
Disturbed Reactive
Low
Managerial decision making

ignores environment, focus on
internal structure
Plan, calculate and react to

possible threats, flexibility and
some degree of
decentralization

The Individual in Organizations
As the individual outcomes will depend much on the social exchange relationship between
individual and organization, it is of major relevance for management to study both individual
processes (perceptions, motivations, attitudes, etc.) as individual characteristics
(personality).
Nadler et Al emphasized the relevance of the individual study level by asserting that:
Individuals have different abilities

Individuals have different needs and will try to satisfy them in different ways
Individuals think about the future and will act in accordance to future
expectations
Individuals will perceive differently the external environment, since this
perception will be based on individual needs and experiences
Individuals have reactions to external stimulus, and their reactions will have
an affective component
Behaviors and attitudes will have its origins in multiple individual factors,
therefore it is impossible to create a general theory to explain them.
Need
to
recognize
and
appreciate
individual
dispositions
in order
to
understand
and
respond
appropriately to the behavior of
individuals in organization
It is also important to understand that when analyzing the individual dispositions, such as
personality, emotions, etc., a further analysis on the situation where the behavior occurred is
required!
Personality
Behavior is a result of a complex interaction between person and situation. However, there seems
to be some specific characteristics of an individual that tend to remain in each behavior,
independently of the context or the interaction. This specific features are what is called
personality!
In general terms, personality represents personal characteristics, either physical or psychological,
that lead to consistent patterns of behavior!
Where does personality come from? Nature or Nurture?
1) Nature some studies point out that personality is something youre born with, its
genetical and it will remain stable and will have little change across ones life course.
2) Nurture some studies (twins case) point out that personality is completely dependent
on the influence of the external environment Family, Context, Group Membership, all
will shape ones personality!
Q: Why does it matter for organizations to assess or understand the personality of one individual
when, say, decide to hire him or to locate him within the organization?
One employer will not see his employee personality, however, the behaviors of one individual will
reflect these specific and consistent personal traits! Therefore, if one employer is able to assess
the employees personality traits, he will be able to track the profile features of that individual and
therefore know what to expect from that employee. Assessing ones personality traits will also
allow the manager to best allocate each individual according to individual characteristics.
Is there any link between personality and Individual competences?
The need of understanding personality traits and how they might affect performance that several
models were created.
The Big Five Personality Factors to assess relationship between

performance and personality traits
Personality divided into 5 dimensions/traits/factors.
The Big Five O allows organizations to assess
personality traits, which will then be related with
the job type and performance!
Big Five O'

Neuroticism - Degree to which one person
is secure, calm, free from persistent
negative feelings
Agreeableness - Person's ability to get
along with others; considerate, friendly,
helpfull, optimistic
Extraversion -Degree at which one person
seeks company from the others
Consciousness - Related with selfdisciplin, self-responsability, goaloriented, carefull
Openess to Experience- Related with
imagination, creativity
Now, what is the Best Personality Fit for one

job?
Theres no straight answer, as personality that
best fits will depend both on the job itself and
the context! For instance, for a sales person
role, probably an individual with a high level of
extraversion would be the best fit, however,
that same person might also present low levels
of agreeableness, and within a sales context,
and the ability to get along with clients and be
gentile is of major relevance.
The Meyers Briggs Type Indicator (MBTI)
The MBTI emphasizes that people can be typed into Introverted and Extroverted, but that
individuals also have basic mental processes: Sensing, Intuiting, Perceiving and Judging.
Each Individual yields 4 individual traits, and each individual will combine and differ in
combination of their preferences, resulting in 16 main personality types.
Where do you get
your energy from?
What do you pay
attention to and
collect info on?
How
do
you
evaluate and make
decisions?
How do you orient
yourself to the
outside world?
Introversion
Quiet, Concentrated, Reflective
Extroversion
Outgoing, Interactive, dedicated to the other
Intuiting
General, Theoretical, Abstract
Sensing
Practical, Detail Oriented, Specific
Feeling
Subjective, Heart
Thinking
Analytical, Rules Guided, Justice, Head
Perceiving
Judging
Flexible, Open Minded, Spontaneous

Structured, Organized, Decisive
Besides these two major models on assessing personality, there are other models based on other
individual dispositions that will help managers on what behaviors to expect from one individual:
Locus of Control - degree at which individuals believe they can control events affecting
them.
Internals own behavior as primary cause for events
Externals - events determined by external sources (lucky,
chance, etc.)

What is the relevance for managers to know one individual event orientation?
The locus orientation, internal or external, is linked with performance and job fit. For instance, it
is argued that:
I.
work requires complex info processing and complex learning
Internals will perform better
II.
work requires compliance and conformity
Externals will perform better
III.
work requires high motivation
Internals will perform better
IV.
Work requires structured and directive style of supervision
Externals will perform better
Self- Esteem extent at which individuals believe they are worthwhile and desired
individuals; self-evaluation
High Self- Esteem employees are likely to take risks, put
more value on attaining foals and display major willingness
to put extra effort to accomplish goals
Low Self- Esteem employees are likely to procrastinate,
experience stress , conflict, to set lower goals and to be
influenced easily
Self Efficacy - refers to ones belief in ones capability to perform a specific task. It is
important because studies point out for a positive influence of the role of self-beliefs in
task performance, key for motivation, key for productivity, etc. People who believe they
can perform well on a task (high self-efficacy) do better than those who think they will fail.
A and B Types - Individuals personality is divided into 2 types, Type A ( where the
individual is featured by being competitive, impatient and ambitious) and Type B ( where
the individual is featured by being more relaxed, patient, easy going).
Abilities and Perceptions

Cognitive Abilities
Individual
Intelligence, Memory, etc.
Perceptions
Physical Abilities
Strenght, Coordination.
Perception is an important cognitive process. Perception is a process, a filtering process, in which

one individual makes interpretations of the stimulus or situations he was confronted with.
The perception process begins with an individual being confronted with a stimulus or a situation
(being mocked by the supervisor, group, etc.). Following the confrontation, the individual will
interpret the stimulus, and react (behave). The final outcome of the perception process is the
behavior of the individual as a response for the stimulus, thats why it is important for organizations
to understand and build up the correct stimulus.
Situational Factors
The Importance of the Context
STIMULUS
Context
BEHAVIOR
PERFORMANCE
Situational factors will provide an external stimulus for the individual. The individual will react and
behave in a certain way that will depend on the stimulus. Therefore, and since the behavior is
linked with performance, context and situational factors will indeed affect performance.
Thats why it is asserted that the best way to get a full picture of organizational functioning is to
look at the interaction between individual and situational factors (work environment, group
adherence, etc).
Emotions and Stress
The classical approaches on management and organizational behavior intended to leave

emotions outside of the sphere of organizations, as it was argued that emotions were negatively
related with performance and obstructed rationality. Nowadays, the myth of rationality was
dismissed, and it is assumed that emotions are necessary if one is to think rationally!
Why are emotions relevant for organizations to understand?
Emotions are the complex patterns of feelings of one individual towards an object or person!
While performing their job, individuals will experience a variety of emotions, either positive (joy,
pride, affection, relief) or negative (anger, anxiety, shame, sadness, envy).
But, how does emotions affect ones behavior within an organization, and therefore, one
individuals performance?
Within the sphere of an organization, emotions are goal oriented, meaning that they are linked
with emotions experienced towards one goal set by the individual. The process will be as follows:
It starts when one individual sets one goal, whether for a task or a goal related to personal
relations, something one individual is trying to accomplish. After the goal is set, the individual will
experience expectations on how he/she will feel if the goal is reached or failed. This anticipatory
emotions will drive the behavior of the individual: if the anticipatory emotions are sufficiently strong
to motivate, than individual will engage in those behavior to attain the goal. If the goal is attained,
then the individual will experiment positive emotions, which will affect the subsequent behaviors
(set even higher goals, feel more competent, increase engagement, etc). If the goal attainment is
not accomplished, then negative emotions will emerge, negatively influencing future behaviors
(frustration, disinterested feelings, etc.). This is why emotion management (customer service
example) and emotion regulation (call centers) are required.

Emotional Intelligence
Refers to how well an individual handles oneself and others rather than how smart or how capable
the individual is in terms of technical skills. Emotional Intelligence is of major relevance if we are
talking about individuals whose task/performance will include getting along with peers/customers.
Salovey & Mayer, 1990, constructed the model of emotional intelligence, highlighting the role of
emotions
within
an
organization:
Model tries to assess peoples
abilities to recognize their feelings,
others feelings (Recognition) and
how to readjust these to the context
(Regulation).
You have it Acknowledge and

Regulate
You learn it managing others
feelings,
understand
others
emotions and manage to control
it
Stress
Stress is the excitement, feeling of anxiety, and physical tension that occurs when the demands
or stressors placed on an individual are thought to exceed the persons ability to cope. This is the
most common sense of Distress or negative stress! But, is it stress always a negative thing?
Distress negative stress, resulting from demanding situations that persist through time.
Eustress Good Stress that creates challenges to motivate people to work harder and
achieve goals.
As seen in the first situation, stressors play an

important source of stress: there are various
forms of stressors (work load, group conflict,
time pressure, etc.), however, they all have
one thing in common: they create stress when
an individual perceives them as representing a
demand that exceeds its own ability to
respond. The following stressors are those
related with work:

Models on Stress
1) STRESS AS A PSYCHOLOGICAL RESPONSE (SELYE)
The first study on stress, by Selye on 1956, stated that stress was an emotional and
psychological response by the individual to a certain stressor. 3 stages (Reaction,
Resistance and Exhaustion)
2) STRESS AS AN EXCHANGE/ TRANSACTION (LAZARUS)

According to Lazarus, stress is perceived as an exchange between the individual and the
stressor! Lazarus pointed out 3 kinds of cognitive appraisals to one stressor, which will
influence the way one individual will experience stress.
No! I cannot overcome the stressor
Primary Appraisal
Secondary Appraisal
Subjective Evaluation of
stressor: Good or bad?
Identifies and applies available

resources! Can I cope with the
stress?
Assesses the impact for wellbeing
(What strategy to overcome?)
Individual will experience increased

stress
Yes! I can overcome the stressor

demand!
Individual will experience minimum
stress
3) DEMAND/CONTROL MODEL (KARASEK)

Think about Nova. For instance, you have more than enough coffee machines, probably
even more than what is required to fulfill the demand, however, Nova wants its students
to feel that they have a lot of resources to do it! As to control over the stress, you can see
that some students feel more like studying at home while others feel more like studying
at the beach. It will depend on each individual control
over the stressor.
Focus on the balance between job requirements and
autonomy! Karasek stated that those who experience
high demands with little control are more likely than
other employees to feel tress. Also, those who face
highly demanded jobs but have total control will be the
ones experiencing less stress.
Stress caused by highly demanding jobs can be
mitigated by allowing a high level of control to the
individual!

4) PERSON ENVIRONMENT FIT (FRENCH, CAPLAN & HARRISON)
This model tries to include as stressors not
only
job
factors
but
also
other
external/environmental factors.
The relevance for stress of this model is that it
argues that, whether relating how a person fits
in with the demands of a job or resources by
the job, incongruent person environment ft can
lead to serious conflicts, poor performance and
increased levels of stress! If an organization
places an individual in a position where they
are unable to complete the demands of the job,
the result can be very stressful.
It is therefore of major importance for managers to match abilities with job demands!
Stress & Performance

How does stress affects performance? Are they related? What about good and bad stress?
At low levels of stress, employees might not be

sufficiently alert, challenged or involved to perform their
best (< comfort zone). Increasing the arousal of stress
might improve performance! But only until one point, the
point up to where performance begins to deteriorate!
Managers should also be aware that stress is a
subjective concept, and that too little stress for one
employee might be just the right one for another! The
optimal amount of stress will depend on each individual!
Stress Management
There are majorly 3 ways to manage stress, or to mitigate the influence of work-related
stressors on employees behavior.
Primary Prevention
Mostly preventive; the goal is to
reduce the number of stressors
Secondary Prevention
If the removal of stressors is
hard or unattainable, managers
will try to teach and train
people how to deal with stress
Tertiary Intervention
If the influence of work-related
stressors continues, than
managers will focus on treating
the consequences instead of
avoiding them.

Modify Behaviors
Reduce Work Stressors
Stress
Management
Improvements in physical work environment,

job redesign (to reduce uncertainties and
increase control), changes in workloads and
deadlines, changes in work schedules, flexibility
in hours
introduce greater levels of employee
participation ( greater control usually leads to
lower levels of experienced stress)

Improved clarity and specification of roles
Improvements on Team building

Career Counseling and assistance
programs
Work Shops on Time Management
Training in Relaxation Techniques
Wellness Programs
Programs including disease prevention,
medical care, self-care and health
promotion! (Ex: providing discounts on
health clubs, healthy food chains, etc)
Job Satisfaction and Motivation
Job satisfaction reflects the extent to which individuals find fulfillment in their work! It might be
perceived, in general terms, as a positive attitude towards the job.
The first book about the topic was published in 1935, Job Satisfaction, by Robert Hoppocks.
Why is it important for organizations to try to assess the level of job satisfaction of their
employees?
Employees who are highly satisfied with their jobs come to work regularly and are less likely to
take sick days (low job turnover and low absenteeism).
Question: what are the dimensions of job satisfaction? Is the level of payment a higher
heavyweight in job satisfaction than, say, the work itself?
According to some studies, the several dimensions of job satisfaction are ranked according to the
following way:
1
Work itself
2
Co-workers
3
Supervision
4
Promotion
5
Pay
Work itself: Challenging, interesting, physical activity required, working

conditions and environment, etc
As we can observe, both the level of payment and promotion opportunities (tangible) are the two
dimensions with the lowest impact/influence in the overall job satisfaction, while the perception of
the work itself and the peer relations will contribute heavily to satisfaction.

Now, consider the following figure, which measures the
relationship between life satisfaction and the level of
payment, within a large range of countries.
Are there differences between countries?
Its not about the level, but rather about perceptions.
According to our graph, we can see that countries such
as the USA and Switzerland, who have the highest
income per head, will tend to have a higher happiness
Index. This said, can we conclude that the higher the
level of payment, the higher the level of happiness?
It will depend, much on the context. For instance, in
Catholic countries, money is treated as something
dirty, while in the US the importance of money is linked
to entrepreneurism, life achievement. Therefore, it is
more likely for countries such as the US to have higher
levels of happiness the higher the level of payment! Not
convinced yet? Think about Brazil.
Job Satisfaction Model

Question: How do you know/ do you evaluate yourself the level of satisfaction with your
job?
Value-percept theory of satisfaction, Locke 1976
According to the value-percept theory of satisfaction, each individual will evaluate his own level
of job satisfaction:
( )
For instance, say that you want to calculate the level of satisfaction you have relative to your
payment level: (pay WANT pay HAVE) X Payment importance (e.g. your job satisfaction level
is driven by 50% from the payment level.
By looking at this expression, one can also add that the perception of satisfaction will vary from
person to person, since each person will give his/her own relative importance to one specific job
satisfaction dimension.
Moreover, the sources of job satisfaction and dissatisfaction will vary from person to person. For
instance, one person might find that being a mortician (agncia funerria) might not be a source
of personal satisfaction, while on the other hand, there will be individuals which will derive a great
sense of job satisfaction from performing such a challenging job!
Question: Do you remember your first kiss date? How long did your
first date last?
No. But Im quite sure that you were really satisfied.
TRANSITORY

The following graph reveals how
different emotions experienced during
one day at the job might influence the
level of satisfaction.
During the morning, while reading emails from the boss, your level of
satisfaction might decrease, as you do
not perceive this a challenging task.
However, during a funny conversation
with a friend in the office, your
satisfaction level might go up.
Job Satisfaction and Performance

It is a commonsense notion that job satisfaction leads directly to effective performance:
A happy worker is a good worker
However, several studies point out for the inexistent relationship between job satisfaction and
effective performance. Studies point out that both job satisfaction and job performance are
influenced and related to the individuals personality, meaning that, a persons locus of control
and Big Five personality traits affect/mediate the relationship between job satisfaction and job
performance.
For instance, an individual who holds positive attitudes towards their job (highly satisfied) but is
low in conscientiousness may not work harder because the lack of responsibility makes him to
fail to show up!
General attitudes might predict general behaviors, but specific attitudes are related most strongly
to specific behaviors. Job satisfaction is a collection of numerous attitudes towards various
aspects of the job (environment, peers, payment level, etc), and represents a general
attitude. Performance of a specific task can not necessarily be predicted on the basis of a
general attitude, but rather on a specific behavior (responsibility, self-discipline, etc).
Even though both job satisfaction and job performance are not strictly linked, studies have shown
that organizations with satisfied employees tend to be more effective than organizations with
unsatisfied employees.
Job Satisfaction: Antecedents and Consequences

Job Complexity (+)
Skill Variety
Task Significance
Autonomy
Job Attitudes (+)
Strains (-)
O. Commitment,
Carrer Satsfaction
Job tension, Anxiety, Stress
Life Satisfaction
(+)
Stressors (-)
Role Conflict
Role ambiguity
Workload
Interpersonal
conflict
Job Performance (+)
JS
Social and Organizational Support (+)

PersonVtor
Environment
Fit (+)
Pereira
Winter 2014
Counterproductive Work
behavior (-)
Turnover intentions (-)
These will cause!
These will be correlated! Will not cause, will

influence or be influenced by JS
Even though Job Satisfaction is not a directly cause of job performance, as weve seen, it is widely
acknowledge that satisfaction will, at least, influence the effectiveness of the organization itself.
Therefore, it is up to managers to enhance satisfaction within the organization.
Practical ways to enhance Job Satisfaction:
Make jobs more fun, challenging, unambiguous, etc.

Have a fair pay, benefits and promotion opportunities
Match people with jobs that fit their interests and skills (person-environment fit)
Design jobs to make them challenging, exciting and satisfying
True or False?
1. Job Satisfaction has a strong impact on job performance ------------------- FALSE
2. Satisfied employees tend to have better physical health ------------------------- TRUE
3. Job satisfaction (itself) results in turnover ---------------------------------------------- FALSE
4. There exists a strong relationship between JS and stress -------------------------- TRUE (STRONG NEGATIVE RELATION)
MOTIVATION
Motivation represents the forces acting on or within a person that cause the person to behave
in a specific, goal-directed manner.
Attracting and retaining individuals is a major concern for managers, therefore, the question
of what it takes to motivate individuals to work has received great attention. Motivation is not
the same as performance, since even the most motivated employee might not be successful
in their jobs, however, even if job performance involves more than motivation, motivation is
an important factor driving high performance!
The purpose of motivational theories is to predict the behavior of individuals, and derive
expected performance levels.
Performance = ( ) ; ability alone isnt enough to ensure performance at
high level, the person must also want to achieve that high level of performance (Motivation).
The Motivational Process A Goal Oriented Process

1. NEEDS (IMBALANCE) individual identify or experiences a certain deficiency, or need (need
for promotion, need for recognition, need for friendship from their peers, etc). These deficiencies
will make the individual to feel uncomfortable.
Primary Motives those you are endowed with, and you try to satisfy them unconsciously,
such as thirst, hunger, sleep, etc.
Secondary Motives passed to individuals on culture, family, group membership, etc.
For instance, in China affiliation to the Communist party is a motive, in Portugal
communism is not appreciated, but social status is a high motive.
2. DRIVES (MOTIVES) By feeling uncomfortable with a specific need, the individual will be
willing to make an extra effort to accomplish a specific goal (driving force) that will either reduce
or eliminate a specific need.
3. INCENTIVES (BALANCE) After acknowledging a specific need, the individual will have an
incentive to achieve a specific goal that will eliminate that need. For instance, if you have a need
for promotion, youll work longer hours (perform) on your project to be promoted!
After an individual performance, he will either receive a reward or a punishment, and will
reassess/evaluate if the need has been eliminated or not.
How to Motivate Employees? Different Approaches
1) Content Theories Satisfying Human needs
Maslows needs hierarchy MOTIVATE BY SATISFYING HUMAN

NEEDS
Maslow suggested that individuals have a complex set of needs, than can be arranged in a
hierarchy.
Once a need is satisfied, its motivational role declines and another need will emerge.
Lower level needs must be fulfilled before higher level needs are activated sufficiently to drive
behavior
Maslow stated that a person has 5 types of needs: physiological, security, affiliation, esteem
and self-actualization.
Note: Even though the needs that Maslow identified may be universal, their importance and the ways in
which they are expressed vary across cultures. For instance, in China, the value of collectivist and
community are more relevant than the needs of individual achievement, therefore, affiliation fulfillment would
be at a higher level than the esteem level of needs.

Herzberg Two- Factor Model MOTIVATE BY DESIGNING JOBS THAT
MOTIVATE INDIVIDUALS
Herzberg proposed that two sets of factors Motivator Factors and Hygiene factors were
the primary causes of job satisfaction and job dissatisfaction.
Motivator Factors are intrinsic to individuals, they are related to an individuals positive
feelings about the job and the content of job itself.
Motivator Factors
Feeling of achievement
Meaningful Work
Promotion Opportunities
Recognition
Due to its intrinsic features, motivational

factors are hard to be influenced by
organizational policies. However, if one
organization defines what is, for instance,
exceptional performance, individuals will be
able to feel that they have performed their
tasks exceptionally well!
Hygiene Factors are extrinsic to individuals, they are related with an individuals
negative feeling about the job and the environment in which the job is performed.
Hygiene Factors
Payment
Status
Job Secutiry
Working Conditions
Interpersonal Relations
The reward system is a good example of hygiene

factors used to motivate employees. For
instance, providing a car, a cruise trip, is a good
example of motivating employees by making
them achieving higher dimensions of hygiene
factors.
It is important to acknowledge that those factors which lead to job satisfaction, might not be
the same which lead to job dissatisfaction.
Managers tend to focus on Hygiene factors, and are sometimes perplexed because they are
paying high wages and salaries, provide working conditions and still employees are not
motivated. The problem is that they concentrate only on the hygiene factors, hygiene factors
prevent dissatisfaction BUT do not lead to satisfaction. According to Herzberg, hygiene
factors are crucial to prevent dissatisfaction, but only a challenging job with opportunities for
achievement, recognition, advancement, and growth will motivate personnel!
Vroom Expectancy Theory MOTIVATE BY ENHANCING THE BELIEF

THAT REWARDS CAN BE ACHIEVED IF EFFORT IS MADE
The idea beyond the expectancy theory is that managers can motivate their employees by
making them see that they can expect a certain reward by working hard to attain that reward!

The expectancy model states that individuals are motivated to work when they believe that
they can achieve things they want, being these things (or outcomes) satisfaction of safety
needs, excitement of doing a challenging task, etc.
Variables of the Expectancy Model
EXPECTANCY: expectancy is the belief by an individual that an effort will be followed by a

particular level of performance; the expectancy variable has a range that goes from 0 to + 1;
For instance, if you believe that even by studying OB that you have no change of getting a
good grade on the exam, your expectancy value is 0, since you dont make any
correspondence between the level of effort and the following level of performance!
If i exert a lot of effort, will I perform well?
INSTRUMENTALITY: instrumentality is the relationship between the outcomes associated

with doing the job (high performance, quality of job, etc) and the rewards that will follow (pay
increase, promotion, acceptance, job security, etc). The value of instrumentality goes from 1 to + 1. For instance, you know that if you received a lot of claps during the history
presentation that probably you will have a good grade, and therefore, your instrumentality
will be positive, you know that if youve performed well and therefore you will have a good
grade. If on the other hand you think that performing well will not be translated into a good
grade, than your instrumentality will be 0.
If I perform well, will I receive outcomes?
VALENCE: valence is an individuals preference for a particular reward. Outcomes having a
positive valence will include being respected by coworkers, having job security, etc.
Outcomes having a negative valence are outcomes that you want to avoid, an outcome has
a negative valence when it is not preferred or is to be avoided.
Will the outcomes/rewards be satisfying?

Expectancy Model & Cultural Context!
For instance, a Canadian manager working in Japan decided to promote a young Japanese
female to manager. The result was that the promotion diminished the Japanese female
performance! Why? It is also important to acknowledge that the expectancy model will work
best in cultures where individualism and self-achievement are seen as good; the previous
example showed that, since in Japan the need for harmony, the need of affiliation , is higher
than the individualistic reward, the promotion separated and embarrassed the Japanese
girl, driving down her work motivation.
Locke Goal Setting Motivational Theory MOTIVATE BY ESTABLISHING

EFFECTIVE AND MEANINGFULL PERFORMANCE TARGETS
At the core of the Goal Setting Motivational theory is the argument that specific difficult goals are
related to performance and satisfaction. Locke suggested that most effective performance seems
to be the result of specific and difficult goal settings. Besides setting a specific and difficult goal,
effective performance is also the result of acceptance and commitment of employees to the goal,
and that feedback on progress and on results provided enhances the effectiveness and motivation
level of employees.
Why specific goals? Specific goals result in higher levels of performance, do you see the
difference Try as hard as you can and We want you to achieve a level of 400.000$ in this period
of sales?
SMART Goals (specific, measurable, attainable, realistic, time bounded)
Answer yourself: What is the relationship between self-efficacy and goals? Individuals exhibiting
higher levels of self-efficacy tend to set higher challenging goals and are more likely to achieve
them!
The model Framework

Adams Equity Motivational Theory MOTIVATING BY TREATING
INDIVIDUALS FAIRLY
The equity model focuses on equity as a source of job satisfaction and performance. It is another
cognitively based motivation theory focused on an individuals feeling of how fairly he/she is
treated in comparison with the others.
The Model Framework
The equity model claims that individuals balance both inputs and outcomes. One individual will
make a contribution and expect a certain results (exchange process), but they will tend to
compare with others to determine whether the results obtained were or not fair.
Inputs: individual contribution to the exchange process, examples of inputs are attendance,
technical skills, personal appearance, job effort (long hours), performance, past experience,
educational level, etc.
Outputs: what the individual receives from the exchange process, examples of outputs are
job security, pay increase, status symbols, working conditions, recognition, promotion,
responsibility, etc.
After providing their own individual contribution and receiving the outcomes of that contribution,
individuals will compute the ratio of inputs and outcomes for themselves and compare it with their
perceived ratios of inputs and outcomes of others who are in similar situations. The others will
become objects of comparison for individuals to determine whether the results were fair or not,
whether they were equitably treated or not!

The comparison between the previous rations might or not trigger individual reaction to
restore the balance.
Equity will emerge whenever the perceived ratio of a persons outcomes to inputs
equals the perceived same ratio of the others! We can expect no reaction by the
individual as to restore the balance.

=

For instance, your pay increase was higher than all the other members of your team, but you
also perceive that the amount of input (say extra hours) you put into the job is way higher when
compared to the other peers of your team, so you will feel properly paid.
Inequity will exist whenever the perceived ratios of outcomes to inputs are unequal.
1) UNDERREWARD INEQUITY

<
Tension within and among individuals
Reduce inputs, such as reduce quantity of production, work shorter

hours, be absent more frequently
steal from the company, ask to be transferred to another department
Individuals will react to restore

the balance!!!

2) OVERREWARD INEQUITY

>
Individuals might feel uncomfortable, and might try to

grow the level of inputs through a more quality work
How does the equity theory relates with motivation?

It is the striving of one individual to restore equity that is used as the explanation of work
motivation. The strength of the individual motivation is in direct proportion to the perceived inequity
that exists, Such a motivation can be, as weve seen, expressed in several forms: motivation to
alter both inputs or outcomes, cognitively distort the inputs (ex: feels underpaid for the job he has
done and reacts by convincing that he hasnt done that much), leave the field, act on the other or
change the other.
Equity theory lays down the foundations for the perceived fairness among several dimensions of
justice, and it is directly linked to what is today called Organizational Justice!
Dimensions of Justice:
Distributive Justice individuals cognitive evaluation of whether or not the amounts and
allocation of rewards in the social setting (say, company) are fair. Is everyone getting what
they deserve?
Research shows that employees perception of distributive justice are related to desired
outcomes such as job satisfaction, organizational commitment, low turnover and
performance
Procedural Justice is concerned with the fairness of the procedure used to make
decisions, it is shown that employees will be more motivated to perform at high level when
they perceive as far the procedures used to make decisions about distribution of outcomes;
for instance when employees perceive pay raises were made fairly, they will feel more
satisfied than if they had judged the procedures used to make the pay raise to be unfair.
Procedural justice has been shown to relate with desirable outcomes, such as satisfaction,
performance, etc.
Interactional Justice perception of fairness related with the relation between individuals,
supervisor and employee
Informational Justice
Why would a manager care about if the employee is perceiving to be fairly treated or not?
Research shows that:
Distributive justice is related with desirable outcomes, such as job satisfaction, performance,
commitment, etc.
Employees will be more motivated to perform at a high level when they perceive as fair the
procedures used to make decisions on how to distribute the outcomes
When employees perceive their company to have procedural justice, reactions to frozen
salaries during recession times will be low, as the used fair procedures will make him feel that
his interests are being protected
When a downsize happens and is handled fairly, those who stay feel more committed to the
organization
Besides positively affecting attitudes and performance of employees, the perceptions of

fairness will also influence their fair treatment behaviors towards customers, causing
customers to react positively to both employee and the organization
WORKING IN TEAMSM
Groups do have an impact in what and how we think and do things, however, we do not always
follow or agree with the group decisions. Under certain situations and for certain tasks, groups
tend to perform better than individuals.
But, what is a group? What is the relevance of a group within an organization?
There are several definitions of group:
According to John Turner, a psychological group is defined as one that is
psychologically
significant for their members, to which they relate themselves for social comparison and
acquisition of norms and values (...) And accept membership in, and which influences their
attitudes and behaviors.
Brown adds that a a group will exist when two or more people define themselves as members of
it and when its existence is recognized
Kurt Lewis includes that conceiving a group as a dynamic whole should include a definition of
group that is based on interdependence of the members
4 categories will define the relevance or the specific features of a group!
Psychologically Significant: Why does a group needs to be psychologically significant? Belonging to a

group will imply one individual to carry a special attachment, a psychological meaning linking the individual
with that group. For instance, think about a Hermaphrodites, physically they might be categorized into a
group of men or a group of women, but psychologically they will not fit into neither of these groups, so
they do not belong to that group!
Group
Social Comparison: Why does a group needs to be socially comparable? Individuals rely on groups to
compare his/her group with other groups, as a meaning to enhance him/herself. Think about your sports
team. You support Benfica and not Olhanense because in the end of the year you want to be part of a
champion team, so I (benfiquista) will be a champion and you (Olhanense) will be not! A group will enhance
the individual status.
Existence Recognized: Why does the existence of a group needs to be recognized? In order for a group
to be considered as a group, its existence must be recognized. Say that you belong to a very private group in
your college, and that no one else besides your group peers know about its existence. Will you enhance your
social status by claiming to belong to a group which no one else has knowledge about?
Interdependence of their members: In order to be considered a group, there must be interdependence regarding the tasks of the group.
One member must rely on the other member, because they share a common goal. Consider the following example, you go out for a coffee with
Pereira
Winter
2014
your friends. Vtor
Is this reunion
to be
considered
a group? No, simply because you do not rely on the others to accomplish your task, which is drinking
a coffee, so technically you are not a group.

Groups and Teams
What is the most relevant feature of a group which turns will turn group into a team?
Interdependence - a TEAM will be a group of two or more people who work

interdependently over some period to accomplish common goals (TASK
INTERDEPENDENCE)
Now, why do organizations implement teams, and not only rely that individuals by themselves
will accomplish the tasks to be performed?
Teams allow managers to put the organizational strategy in practice (duas cabeas
pensam melhor do que uma)
Team work increases efficacy and efficiency in more complex tasks (if the organizational
tasks are simple, team work could be ineffective as members would be wasting time
discussing a simple thing!)
Teams increase the quality of management (this will be related with the concept of
informal organization, say that in your team you have a peer which is married with the
chief executive of the human resources department, this will create an informal link which
will facilitate communication and management)
Creating teams will allow synergies to be enjoyed, different perspectives will tend to
create more creative and innovative ideas
Creating teams will increase and foster both autonomy and participation, releasing the
burden of top manager of organizational daily problems and allowing focus on overall
strategy
Now, team work will also carry some problems or disadvantages:
Conflicts ( which might not be bad by themselves, divergence in opinions usually brings
more information, so conflict leads to more informed decisions)
Norm violation ( you tend to criticize more the failure of one of yours, black sheet effect)
Free Riding
Risky Behaviors ( individuals tend to behave more properly and accordingly when they
know their performance relies only in themselves)
Conformity ( linked with cohesion see the example bellow)
Bay of Pigs: In the US, Kennedy decided to invade Cuba, in what was called the Bay of
Pigs Invasion. Some people attempted to present objections to Kennedys plan of
invasion, but they were afraid this would affect the morality and cohesion of the team as
a whole. The event turned out to be a fail because of the conformity of their members to
rely in the concept of team instead of presenting individual objections.

Model of Team Efficacy: Why teams tend to have higher levels of performance and
satisfaction?
Previously weve discussed self-efficacy. In a similar sense, collective efficacy is a teams
shared perception of its capability to successfully perform specific tasks.
The first thing the model tries to explain is both individual and contextual characteristics that will
influence the group/team behavior:
Aspect of the group itself that will influence the process and effectiveness are: skills needed to
perform, group heterogeneity that assures positive interaction, and the experience with the job
that will assure a groups knowledge.
Contextual variables that are predicted to affect the process and effectiveness of the group are:
supervisory behavior, rewards for group performance, training availability and market growth.

5 Stages of Group Development
1. Group Forming- members
become familiar with each other;
acceptance of the leader and
group consensus
2. Storming disagreement
over
procedures,
tension
among members
3. Norming Growth of
cohesiveness
and
unity,
standardization of roles
4.
Performing
Achievement,
high
orientation,
emphasis
performance
Goal
task
on
5. Adjourning completion of
tasks, reduction of dependency
Managing Teams
How to make teams work better? How to manage conflict within the team?
Team conflict ( imbalance between perceptions, goals, values) might bring some disfunctional
effects on the team outcomes! Why? Team conflict interfeers in team performance, productivity,
enhances reduction on job satisfaction, creates mistrust among members and brings hostility to
the work sphere!
But.. is it team conflict always undesirable? It is necessary to separate the healthy conflict from
the harming conflict

The good thing about conflict is that teams decisions will be better when conflict is at stake, since
conflict will bring divergent opinions and different informations regarding the same subject.
Reaserch reveals that:
High performance teams will reveal to have high levels of conflict

in all the dimensions (relationship, task and process) at the group
forming phase. In the norming phase, cohesiveness is enhanced
and trust will reduce dramatically the level of task conflict (related
with awareness of differences in opinions and viewpoints of the
task). Focus on the task performance will represent a major drive
force for the high performance of these teams.
Low performance teams will start by entailing low levels of

relationship, task and process conflict. Relationship is eased at
the beginning of the group forming and relationship conflict will
remain stable at a high level during the team existence. The big
difference is that only when the group is being transformed into a
solid team, members will realise the others different opinions on
the groups task. After that, task conflict will exponentially grow,
as process conflict decreases ( we dont really care).
Model on How to approach conflict:
Joint Problem Solving

Even though there is no one gold rule as to best respond to conflict, Collaboration
seems to apply as a good answer in the majority of the cases: there is a high concern
for satisfying all the parties, make the two parties working together and cooperating
and to find an alternative that integrates and fully satisfies the concerns of all (focus
on the task)! This is both assertive and cooperative!
LEADERSHIP
Question: What is the difference between a leader and a manager? What makes a manager a
leader?
Leadership is accomplishing something through other people that wouldnt have
happened if you werent there. And in todays world, thats less and less through command
and control, and more and more through changing peoples mindsets and hence altering
the way they behave. Today, leadership is being able to mobilize ideas and values that energize
other people.

A leader is a person who exhibits the key attributes of leadership ideas, vision, values and
that is able to influence others to embrace his own ideas, visions and values into their own
behaviors, therefore, changing and altering the way individuals behave. A manager directs,
controls and plans the works of the others. Management is more about leading through tight and
direct controls, leadership is more about controlling by encouraging from the heart, inspiring ,
leading by the example, influencing the behavior by changing the mindset.
Leadership is related with SOCIAL INFLUENCE and POWER! What does this mean? It means
that the process of leadership will enable the leader to control and influence the others towards
specific goals, objectives, values, etc.
LEADER
SOCIAL INFLUENCE
POWER
Without power to influence, a leader is not a leader! But where does this social power or influence
comes from?
Knowledge (individuals are influenced because they rely that the leader is in
possession of wide knowledge I will do what he is saying because that guy
knows!)
Referent (individuals are influenced because they admire, they are loyal to
their leader Hitler!)
Legitimacy - ( individuals rely on their leader because he has legitimate power,
for instance, you rely on what your teacher says because he is legitimate, there
is power attached to his role)
Reward (individuals will rely on their leader because they know they will be
rewarded by doing so, example: Graaades!)
Coercive ( leader is able to influence individuals because he will have the ability
to punish them)
The major questions regarding the early studies on leadership intended to answer the following
questions: What is the best or more effective leadership style? Is there any difference between
leaders? Where leaders do came from?
Iowa State leadership studies by Kurt Lewin: which one is the best leadership style: authoritarian,
democratic or a laissez faire? Answer will be provided later! HINT: think about a democratic leader
in an institution such as the army, would it work?
WHERE LEADERS DO CAME FROM?
TRAITS THEORY
The traits theory argues that a leader is born a leader, leaders will be naturally endowed
with some traits that will turn them into leaders (something you are born with, not
something you can attain); the main problem is that it ignores the situational specificity
(think about the army again)
BEHAVIOR THEORIES
Behavioral theories defend that leadership can indeed be learned, an individual might
become a leader without the need of naturally possessing specific traits to lead!

CONTINGENCY OR SITUATIONAL THEORY
The situational theory suggests that different contexts and different situations will tend to
have different leaders and different levels of leadership effectiveness!
This model defends that the most effective leader will be, depending on the
context, more people oriented or more task oriented!
The contingency model divides the situational control into 3 components
Leader-Member relation (Good or bad)
Task Structure ( Unstructured or structured)
Leaders position/power ( Strong or weak)
The Fiedlers contingency model states than an effective leader might use a high degree of task
behavior (use one-way communications, spell out duties, telling what to do) and only a moderate
amount on others, such other situations will require an effective leader might use a high degree
of relationship behavior (using two-way communications, listening, encouraging, involving in
decision making) in some situations.
If the situation is favorable, employees already assign the leader as a leader, and the
most appropriate leader behavior would be task oriented.
If the situation is moderate favorable, then the most appropriate leader behavior
would be relationship oriented, since there is not quite the perception of leadership.
If the situation is unfavorable, task is unstructured, the relationship between leader and
member is poor and the leader position is weak, than task oriented would be more
effective.

NORMATIVE MODEL VROOM 5 leadership styles based on 7 situational factors
The Vroom Leadership Model focuses on the relationship between 5 leadership styles and tries
to assess which one of these 5 leadership styles the best choise in several decision is making
situations.
5 CORE LEADERSHIP STYLES
DECIDE STYLE leader makes the decision without the team, by himself
CONSULT INDIVIDUAL STYLE leader presents the problem to each
individual, get their ideas and infos and makes the decision alone
CONSULT TEAM STYLE leader presents the problem to team members in a
meeting, gets their suggestions and makes the decision
FACILITATE STYLE leader presents the problem to the team and acts as a
facilitator, allows the team to decide and acts as a coordinator on the discussion
DELEGATE STYLE leader enables the team to make autonomous decisions (
subordinate empowerment)
7 SITUATIONAL FACTORS:
1. Decision significance ( how important is the decision)
2. Importance of commitment (how important is subordinate commitment to the decision)
3. Leader Expertise ( does the leader believe to have enough info to make decision)
4. Likelihood of commitment ( if the leader makes the decision, will subordinates be
committed to it)
5. Team support ( do subordinates share the goals to be achieved by solving this problem)
6. Team expertise ( are team members able and informed to make the decision)
7. Team competence ( are team members capable of handling the decision making on their
own)
It will be the relevance given to the 7 situational factors that will determine whether one of the
5 leadership styles is the more effective one!
For instance, if the decision is relevant for the
organization, subordinates are highly committed to the
decision, the leader expertise is high but if the leader
makes the decision the commitment will be low, and the
leader perceives the team as capable, to be highly
supportive and competent to handle the decision
making, than the best leadership style would be a
delegate one! (Empower subordinates)
If the decision is important for the organization, and by

making the decision the leader would be able to commit
the employees to that decisions, than the best leadership
style is a decisive one!

Leader behavior will be motivational (e.g., will increase subordinate effort) to the extent that
(1) it makes satisfaction of subordinate needs contingent on effective performance, and (2)
it complements the environment of subordinates by providing the coaching, guidance,
support, and rewards which are necessary for effective performance and which may otherwise
be lacking in subordinates or in their environment.
MODERN THEORIES ON LEADERSHIP
LEADER-MEMBER EXCHANGE (LMX) TREAT EACH ONE INDIVIDUALLY, AS EACH ONE IS

DIFFERENT
The LMX model enacts leadership as an interaction between the supervisor and the
subordinate! It suggests that if leaders are able to create high valuable relationships, then
high performance should result, however, Leaders will establish high LMX relationships with
a limited number of subordinates (called the in-group), and these, contrary to those outside
of the in-group, will receive more rewards, have more info, etc. LMX assumes that in this
leadership style the leader will essentially divide subordinates as an in or an out member.
The Leader-Member Exchange relationship will contribute to several organizational outcomes,
such as organizational commitment, as the following graph suggests:

SOE = Supervisor Organization Environment = extent to which the supervisor internalizes the
organization
The graph suggests that high valuable
relationships between supervisor and
subordinate will result in higher levels of
affective commitment.
LOW SOE reveals that the impact of the
relationship between employee commitment
and the organization will be low if the
supervisor does not share values of the
organization!
Practical Example: Usually, when members of the organization are asked about what their organization stands for, the answer is
restricted to a description of either the service or the production process! This is a clue that they dont have any idea of both the VISION
and MISSION of the company! (Their commitment is probably low); recommendation is for the supervisor first to make sure that
employees are aware of the purpose of existence of the organization! Commitment should result, and if high valuable relationships = >
ENHANCED COMMITMENT
TRANSACTIONAL & TRANSFORMATIONAL LEADERSHIP

The idea of transactional leadership involves an exchange relationship between leaders and
followers! The relationship between leader and follower can be perceived as a trade relationship,
where the leader will guide by making sure that followers understand that good performance will
be rewarded (contract of exchange of rewards for effort, rewards for good performance, etc). The
characteristics and approaches of transactional leaders are described below:
Question: Would a transactional leadership style be effective nowadays? Why?

We know that transactional leadership has its basis on an exchange/trade relationship between
employee and leader; the current economic environment might impose obstacles to, for instance,
rewards, a leader might require extra efforts in name of the organizations future sustainability but
might be unable to provide the reward part of the exchange relationship. Without the reward part
of the equation, followers might feel motivated not to extra perform since their performance will
not be recognized (in the sense of what they perceive to be recognition= reward). Nowadays,
something else is required!
Transformational leadership goes beyond the trade relationship as it is based more on leaders
shifting the values, beliefs and needs of their followers! The key to transformational leaders is that
they seek to empower and elevate followers!
The transformational leader will lead by an idealized, inspiring, intellectually stimulating and
individually concerned leadership manner!

Transformational leaders are usually the ones which will better internalize the idea of what the
organization stands for, and will be able to transmit that to their followers! More than a
transactional leadership style, transformational leadership is positively related with higher
commitment, trust, higher levels of self-efficacy and other relevant variables which will influence
performance.
THE FINAL ANSWER TO MOST EFFECTIVE LEADERSHIP STYLE AND MAJOR

CHALLENGES
Why is leadership important? What is the most effective leadership style?! Authoritarian?
Democratic? Laissez faire? Charismatic? Delegate style? Transformational?
1) Why is leadership important?
Dr. Quinn Mills (2005) highlighted the importance of having a leader. The author suggested that
success of an organization is usually assigned to timely, completeness and
appropriateness of decision-making. However, this approach, according to the author,
misleads the fact that after the decision making, implementation is required, and that only
with effective implementation organizations can strive for success. Implementation of an
organizations goals is the role of the leader. An effective leader sets the direction of the
followers to the goal of the organization, by influencing, motivating and being able to
change behavior towards the path of the organizations goals.
2) What is the most effective leadership style?
The answer is: EFFECTIVENESS IS CONTEXTUAL! There is no rule of thumb as to the
leadership style to use, as different situations, different sets will require different leadership
manners! For instance, in the army, tough decisions have to be made fast, a democratic
leadership style would probably result in waste of time for strategy! Under crisis requiring dramatic
changes or under situations where followers are very dissatisfied with the status quo, charismatic
leadership (self-confident leaders who project high expectations for followers, stand for
ideological visions and uses personal example) will be a more effective leadership style, as
confidence will enable followers to identify with the leader and his mission, make them exhibit
extreme loyalty and be motivated by deriving self-esteem from their relationship with the leader!
The only requirement for an effective leadership is that it must BE CONSISTENT! (You would
not like to have an authoritarian boss today that will change into a democratic one
tomorrow, it just doesnt make sense).
Secrets of Inspiring leaders:
Demonstrate Enthusiasm
Consistency
Sell the benefit
Invite and Stimulates participation
Encourages potential

Question: In such a globalized world, what is the major challenge faced as to the leadership
question?
Portuguese Example
When Alvaro Pereira, former Minister of Economy, came from Canada to chair the Economy, he
wanted to make several changes as to the organizational structure of his office. One of the
changes he first made when arriving to the office, was to ask all the personnel not to call him as
Dr., but by his first name: lvaro! How did the subordinates react? The next day, everyone was
mocking with Alvarinho.
What does this tells us?
Portuguese culture (and most of Latin Cultures) entails that there should be a well-defined
hierarchy within an organization, trying to implement changes without assessing the context will
just not work.
Do you think that, in a collectivist society such as the Chinese one, a task oriented leadership
style would be more effective than a team oriented one (team oriented, integrative, etc)?

SOCIAL EXCHANGES
TRUST
SOCIAL EXCHANGES
JUSTICE
SUPPORT
What is a social exchange?

Social exchange deals with individual willingness to reciprocate care and consideration
expressed within a relationship!
TRUST
One can provide several definitions of trust, such as actions that increase ones vulnerability to
another whose behavior is not under ones control, but they will all share the same two main
features beyond the idea of trust: VULNERABILITY and INTERDEPENDENCE!
You can only trust someone if 1) you are vulnerable to the other, since 2) you are not in
control on the others behavior!
2 FORMS OF TRUST, combined lead to overall trust

1) Cognitive Form of trust (about integrity)
2) Affective form of trust (About the other)
And there are 3 different dimensions of trust:
Now, what is the importance of trust within the sphere of organizations? Why is trust in leader
such an important thing?

Dirks and Ferrin composed the following model framework to explain why trust in leadership is
important for organizations?
What does this model tells us?

As weve seen, the definition of trust includes both interdependence and vulnerability. A leader
has to be trusted in order that followers are prepared to open up regarding their fears and
vulnerabilities.
Within a work environment, relationships either between employee-supervisor and employeecoworkers will be trust-based, as one individual will feel vulnerable to the others actions and the
inability to control the others behavior will enhance the interdependence of both actions.
The above model indicates that trust will depend on 1) the characteristics of the trustee (ability,
integrity and benevolence), 2) characteristics of the trustor (predisposition to trust) and 3) the
context; and that trust in leadership is significantly related to attitudinal, behavior and performance
outcomes.
As to the attitudinal outcome, it was found that:
Trust in leadership has a significant relationship with both job satisfaction and
organizational commitment;
As to the behavioral outcomes, it was found that:
Trust is significantly related to altruism, courtesy, conscientiousness, civic virtue;
As to the performance outcomes, it was found that:
Trust in leadership is related with job performance and extra role performance

TRUST AND ORGANIZATIONAL CHANGE: Impact of trust in organizational commitment
during organizational change
Does trust in supervisor have a positive
effect on employees readiness for
change?
As Neves and Caetano argued, the
relationship
between
supervisor
and
trust
in
commitment
the
was
stronger when employees had lower

perception of control over the change.
Thus, trust results in a positive effect on
the
employees
readiness
for
an
organizational change!
Practical Example: Think about the case of the sinking ship Costa Concordia. By observing the behavior of the cruise members define
the impact of trust in leadership and followers behaviors.
FAIRNESS
Another social exchange relation is the concept of fairness/justice.
Recall the definition of social exchange:
Social exchange deals with individual willingness to reciprocate care and consideration
expressed within a relationship!
Fairness is a social exchange because it deals with one individual willingness to reciprocate
fairness if he perceives fairness and justice within a specific relationship! (If you are fair with me,
Ill be willing to be fair with you!)
What are the types of justice that exist? Why is it important within the context of organizations?
There are 3 main types of justice:
Distributive Justice - related with the concept of equality, it is basically

the perception of one individual of whether or not the amounts and
allocations of rewards (payment, evaluations, etc) are being fairly
distributed Am I being fairly evaluated when compared to the others?
Procedural Justice - perception of one individual regarding the procedure

used to make decisions - Is the promotion criteria applied equally
throughout all employees?
o
Procedural justice is applied when the decision made is (CBAREC)

1) Consistent apply promotion criteria to everyone equally
2) Bias suppressed
3) Accurate promotion was made regarding the volume of sales

4) Representative decision should rely on everyone, if we have two
different groups, both parties should be part of the decision (similar to
consistency)
5) Correct Ok, I say it is penalty so it is penalty lacks correct
ability
6) Ethical
Interactional Justice degree to which people affected by a decision are

treated with dignity and respect; for instance, being reprehended via text
message will make subordinate to hold feelings of resentment towards ther
supervisor.
Now, how important is justice within the organization? (ORGANIZATIONAL JUSTICE)

If you recall, one of the motivational models had its basis on the perception of the individual
regarding the ratio of inputs and outcomes:
In this framework, the employee perceived, when

comparing to others same ratio, inequity, and would react
in order to restore balance! (Ex: decrease inputs)
One can, therefore, link distributive justice to this motivational model, as the employee will
perceive that the allocation of rewards is being misallocated and will be motivated to react to
restore the balance, by, say decrease the level of effort!
Thus: JUSTICE CAN HAVE AN IMPACT IN MOTIVATION!
Now, what other outcomes can we derive from organizational justice or fairness?
REACTIONS TO DECISIONS & THE LEVEL OF JUSTICE

When the level of distributive justice
is high, lower reactions to authority.
On the other hand, if employees
perceive that the rewards of the
process will be misallocated, they will
try to understand what is going within
the process and respond more actively
towards the authority decisions!

PERCEIVED ORGANIZATIONAL SUPPORT
Perceived organizational support is the extent to which one perceives, both, that the organization
values his/her contribution and cares about his/her own well-being. This inference/perception
about support from the organization will be based on actions and will serve two main purposes:
Being regarded highly by the organization helps to meet employees' needs for
approval, esteem, and affiliation. they care about me, I belong here
Positive evaluation by the organization also provides an indication that

increased effort will be noted and rewarded. if I try hard and succeed, and I know
they will evaluate because they value my contribution, then I know I will be rewarded
(instrumentality 1+?).
Perceived organizational support (POS) might be valuable for organizations, as it is positively

related with increase in self-esteem, increase in importance of valuable relationships
and, the most important of all, affective commitment to the organization, which by itself
is correlated with performance. (Notice that POS is not directly related with performance,
but might be mediated).
Pay Cut & Level of Theft by Employees: Importance of POS
The following study reveals that when
the level of POS is high, reaction to pay
cuts by employees is lower, as high levels
of
POS
are
commitment
to
usually
related
with
the
organization
employees will identify with what the

organization stands for and accept more
easily the pay cut as a mean of keeping
sustainability)
P.O.S IMPORTANT
FOR
ORGANIZATIONAL
CHANGES!!!!

Joining it all: What are the major influences of social exchanges within the organizational
context?
By looking at the above figure, we see that both POS and FAIRNESS will have a positive impact
on the level of trust. Trust in the leader and in the organization, by opening and mitigating the
followers fillings of fears and vulnerability, will mediate and result in desirable outcomes for the
organization: enhanced job satisfaction and higher levels of commitment.
The relevance of trust is therefore highlighted as the bridge between perceptions and outcomes.
Now, how to create a trusting environment within the organization?
In what concerns the relationship sphere (INTERPERSONAL employee/supervisor or

employee/co-worker), there are several ways to enhance trust:
LEAD BY EXAMPLE (if you do not act in accordance with what you are standing for, how
can one trust you?)
BE CONSISTENT ( what makes an effective leader is also the consistency, and

consistency is also important for justice perceptions)
BE FAIR ( but not disregarding individual differences)
SHOW THAT YOU CARE (valuable relationships , employees will trust you, follow you
and accept your decisions)
COMMUNICATE OPENLY (see what happened with Ricardo Salgado?)
FULFILL YOUR PROMISES
In what concerns the organizational level, there are several ways on how managers can enhance
trust:
Provide training for your middle/line managers
CREATE A VISION
Promote coherence between hierarchical levels (remember role of consistency?)
Organize space in line with culture ( design jobs)
Manage control systems with care
Manage organizational chances carefully

ORGANIZATIONAL CULTURE & CHANGE
What is organizational culture? Why is it important? How is the culture of an organization
transmitted? What are the possible outcomes of having a strong culture?
Organizational culture is the shared and learned values, beliefs and attitudes of organization
members. The culture of an organization plays a large role in determining the quality of
organizational life, it is a collection of unspoken rules and traditions that will operate 24
hours a day.
The culture of an organization is hard to define, as one will only perceive what the organization
stands for by observing the behaviors of the employees. This enhances the assumption that an
organizational culture is often hidden, and resistant to change.
Characteristics of Culture
National Similarity
Historic Influence
Collective Creation
Dynamic Character
Learned
Shared
Visible and Invisible
Now, how does an organizational culture emerge? And how is it transferred along the
organization?
Influence of Context in Organizational culture
First, it is important to acknowledge that the cultural context of the organization will strongly
influence the way an organizational culture will be set, by molding several cultural dimensions,
such as power distance, uncertainty avoidance, individualism/collectivism, gender role orientation
and long term orientation
For instance, in countries such as Korea and Taiwan, power distance is regarded as a high
valuable cultural dimension, and thus it is valid to assume firms within this country to be
represented by a better defined hierarchical culture than say, firms in Australia or the US, where
power distance is not such a relevant cultural dimension.

Influenced by the society context in which the organization is insert, top management will define
what the organization will stand for, by designing what they expect their employees behavior to
be and developing a shared vision of the culture within the organization.
How will this designing of expected behavior in accordance to the culture of the
organization be transferred?
Managers will be able to impose the culture of the organization through what is called the
organizational socialization process, in which the transmission of an organizations cultural
values from leaders and senior employees to new employees will occur, providing them with the
knowledge (norms and values) and skills needed to become a part of the organization.
What is the importance of the socialization process?

The socialization process is where the employee will reach a psychological contract with the
organization, he will accept, adopt and adjust his own behavior towards what is designed by the
company. It is here that organizational commitment will start to be built.
Now, after setting what the organization stands for, its values, norms, assumptions, expected
behaviors, practices, etc. and after these norms are accepted and adopted by the employees,
what can we expect to be the outcomes of having a sense of belonging to, of being part of the
culture?
Reduced uncertainty and anxiety surrounding the job, as practices and what is expected
employees behavior is clearly defined and acknowledged (Role Clarity)
Higher job involvement and higher commitment to the organization (collective

compromise)
Understanding of what the organization stands for, which will enhance the perception of
control
Creation of stability within the organization

The final question will have to be: Will the Organizational Culture be related with
performance?
The answer is yes. Besides the potential to enhance individual satisfaction, the sense of certainty
on how problems are handled, and so on, organizational culture has potential to enhance
organizational performance. Knowing the culture of an organization allows employees to
understand both the firms history and methods of operation (what is expected to be my
behavior). Then, organizational culture will help to foster collective commitment to
corporate philosophy and values. Commitment will, by itself, generate shared feelings of
working toward common goals. Organizational culture also serves as a control mechanism
to channel behaviors towards desired behaviors, which might relate directly to greater
effectiveness of the company itself (increased organizational performance) and constitute
a major competitive advantage
The Role of the Leader in the Organizational Culture

In general terms, it is the role for the leader to assure the expected behaviors of their followers by
setting what the organization stands for, and to assure the maintenance of the culture. There are
two main mechanisms on how leaders can affect culture.
Primary
Mechanisms
PAYING ATTENTION ; dealing with events systematically (consistency) will provide the guidance to
employees about what is important and what is expected of them
REACTIONS TO CRITICAL INCIDENTS AND CRISIS; the way a leader deals with incidents will
reinforce its culture; say that one employee disrespected one of the core values defended by the
company, reprehension might reinforce
ROLE MODELING ; the leader will communicate the organization values by practicing them
DISTRIBUTION OF REWARDS ; employees can learn about an organization culture through its
reward system, which will set priorities and values of the organization
CRITERIA FOR HIRING, PROMOTION AND FIRING ; a leader might also influence the
organizational culture by, for instance, hiring people whose personality fits the culture (ex: google,
southwest airlines)
ORGANIZATIONAL STRUCTURE DESIGN; more vertical or more flat organizational structure,

according to the context
Secondary
Mechanisms
RITES AND RITUALS; example office party, basic training, company ceremonies, etc
PHYSICAL SPACE DESIGN ; example of google, where the culture value of stimulating participation
is enhanced by no lock doors, rare walls, open space, etc.
FORMAL APPEARENCES; example of Banks, where wearing a suit is part of the organizational
value (seriousness, formality, conservadorismo, etc.)

Now, weve seen that a strong and well defined culture is positively related with organizational
performance, but, is there any situation where a strong culture may negatively affect the course
of an organization?
ORGANIZATIONAL CHANGE
Organizations coexist in constantly shifting environments (crisis, changes in technology, etc.)

Therefore, organizations today are required to have, more than ever, the capacity to adapt and
to be flexible, to have a competitive advantage over rigid organizations.
Why do organizations change?

There are multiple reasons why organizations would want to change, and according to the
relevance of change, the following effects will differ!
Reasons for Change
Quality Improvement
Mergers & Acquisitions ( M&A)
New Cultural Values
Globalization ( want to become an exporter for instance)
Reorganization of departments, etc.
Managing Change
One might divide management of change in two types (1 st and 2nd order), however, one thing in
common will be presented in both types, which is why managing change is important: reaction to
change by employees!
First order changes, or small changes, are related with specific changes (quality management
change, reorganization of department, new work processes, etc.). Second order changes are
related with BIG changes that will affect the OVERALL organization (cultural change, structure
change, downsizing, etc.)
BES CASE!

Independently of the order, or if it is planned or not, changes
will have one thing in common: they will trigger REACTIONS
TO CHANGE, as employees will make everything to resist
to change.
Lets see a picture that shows us reactions to a big and
common organizational change, an M&A:
1) Why do people react to change? Changing implies

moving from the known to the unknown.
Fear of losing Job
Reduction of career prospects
Fear for effects in pay
Loss of Status
Need to learn new skills ( remember, if you are working and performing one task for 30
years and after an M&A you are re-allocated to perform another task Maybe I was not
good!
New and Unknown Supervisors
New Teams and tasks
Reactions to change will be divided into 3 components (or phases)
AFFECTIVE
COGNITIVE
BEHAVIORAL
(anxiety, fear)
Is it necessary? Wll
it be fine?
(Actions taken, complain, boicotar, etc.)
MODELS ON CHANGE how to deal with changes?

LEWIN FREEZE MODEL
Kurt Lewin prosed a very simple model to try to answer the best way to successfully manage
change! 3 basis steps are proposed by the author to assure organizational change to succeed:

The first required thing to do before changing the organization is to get everyone ready for the
change. It involves getting others to understand that change is necessary, urgent, in such a way
that everyone will be more motivated to make the change (UNFREEZE)!
When leaders are sure that everyone understands the necessity of change, then the process of
change can start. This will be the hardest phase, as employees might be sure that change is
required but still fear the change ( imagine bungey jumping, you know it will be worth, but what
about when you look down first?). In this phase it is important that leaders to keep communicating
the clear picture, the desired change and the benefits! (CHANGE)!
The last stage is to make people, after the change is taken, believe that is was the best to be
done, employees will form new relationships and become comfortable with the new norm
(REFREEZE)!
Kurt Lewis model was criticized by being too simple, and today theres another, and more
extensive model, that shows the steps to implement changes successfully:
KOTLERS 8 STEP MODEL
OTHER MODELS & STUFF FOR SUCESSFULLY CHANGES: EMPLOYEE LEVEL

How to mitigate reactions to change?
CREATE A CLEAR REASON FOR CHANGE!
INCREASE PARTICIPATION & INVOLVMENT AT

ALL LEVELS
KEEP COMMUNICATING!
INDENTIFY AND GUIDE THE CHAMPIONS OF THE

CHANGE
CREATE A LEARNING ORGANIZATION

But still, organizations tend to fail when changing 8 common mistakes
Not establishing sense of

urgency
Not creating powerfull enough
guidance
Lack of vision
Lack of continuos
communication
Not removing obstacles to new
vision
Not systematically
planning and
creating short term
wins
Not incorporating change in cultures

values
Declaring victory too soon
ORGANIZATIONAL CHANGE: MERGER & ACQUISITIONS EXAMPLE

When is it likely to work? (READ MOODLE ARTICLE)
A merger & acquisition is probably the most important organizational change, as it will represent
the joining of two different organizations, each one with its own organizational culture (values,
norms, etc.). => CLASH
OF CULTURES
The organizational culture profile will therefore be an important antecedent of the success of an
M&A!
Success of M&A => Cultural compatibility
Culture of Acquirer
Culture of Acquired
Likely Outcome
POWER
POWER
PROBLEMATIC
POWER
ROLE/TASK/PERSON/SUPPORT
ROLE
POWER
POTENTIALLY GOOD
ROLE
ROLE
POTENTIALLY GOOD
ROLE
PERSON/SUPPORT
TASK
POWER/ROLE/TASK
TASK
PERSON/SUPPORT
Dominant
POTENTIALLY
DISASTROUS
POTENTIALLY
DISASTROUS
POTENTIALLY GOOD
POTENTIALLY
PROBLEMATIC

POSITIVE ORGANIZATIONAL BEHAVIOR
Positive Organizational Behavior is linked with the effects of optimism within the context of
organizations. The aim of an organization will be to seek a balance between Negativity and
Positivity, between being reactive and proactive, as both will tend to bring advantages and
disadvantages.
Is it being optimist always good or there might be any advantage from negativism?
Lets think about an aircraft accident. Within the context of society, an aircraft will tend to be seen
as a negative thing, and people will react negatively to this event. However, even this bad event
might bring some good consequences, as for instance, the increase in the number of airline safety
audits that will decrease the probability of that event occurring again.
Now, what is the real meaning of the concept of Positive Organizational Behavior? According to
Luthans, it is the study and application of positively oriented human resources strengths and
psychological capacities that can be measured, developed and effectively managed for
performance improvement.
Basically, you try to assess what are the positive things/feelings/capabilities that humans tend to
have, you measure it, develop it and manage in such a way that you improve their performance!
But, what are the positive influencing variables that can be measured, developed and
channelized to improve performance?
You can try to assess the level of the following variables in order to evaluate and try to improve
them: self-efficacy, hope, optimism, resilience, self-esteem, locus of control, emotional
stability. At a group level, team cohesion is also a potential variable to assess POB.
Self-Efficacy => related with motivation, and performance
Hope, goal direct energy ( motivation and energy to go for it) and planning to meet
goals=> hope has a positive impact on academic performance, is related with goal
expectancies, perceived control and positive affect
Optimism! => Impact on perception of challenges and the way on how to deal with
adversity; optimism is good when it is both realistic and flexible!
Resilience : capacity to rebound or bounce back from failure and turn them into
challenges for a higher purpose
PSY CAP: MORE THAN THE SUM OF THE PARTS

PSY CAP is the individuals positive psychological state of development characterized by the
individual having confidence (self-efficacy), optimism, hope and resilience. PSY CAP PREDICTS
ROLE PERFORMANCE!

Question: What is the difference between PSY CAP, Human Capital and Social Capital?
Human capital is related with intelligence, knowledge, confidence, self-esteem, persistence,
honesty, etc. In general terms, it is related with WHAT AN INDIVIDUAL KNOWS!
Social capital is related with trust, shared values, positive role modeling, affiliations, team work,
etc. In the organizational sphere it is related with WHO YOU KNOW!
PSY CAP, as weve seen, is related with self-confidence, optimism, hope, resilience, it is, in
general terms, WHAT YOU ARE!
What is the influence of positive psychological capital within the context of an

organization?
ENGAGEMENT (+)
Leader Psycap (+)
Transformational
Leadership (+)
Autentic
Leadership (+)
Positive
Psychological Capital
(hope, optimist, selfconfidence, selfefficacy)
CITIZENSHIP BEHAVIOR
(+)
POSITIVE
EMOTIONS
LOWER LEVELS OF
STRESS
Team Satisfaction + Team Trust + Team

Performance
Team Psy Cap (+)
CREATIVE TASK
PERFORMANCE (+)
LOWER LEVELS OF
DEVIANCE BEHAVIORS
PsyCap is positively related with several types of performance and positive emotions
PsyCap is negatively related with deviant behaviors and intentions to quit
Leadership, specifically authentic and transformational leadership, tend to influence the

level of employees PsyCap
For employees who are high in PsyCap perceived breaches of psycap do not lead to
organizational deviance or reduced performance because they feel empowered with a
set of internal resources that allow them to contour the situation and respond in a different
manner.

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Organizational Behavior Theoretical Notes

Organizational Behavior Definition

How did we arrived until today?

Frederick Taylor The scientific Management Methodological and scientifically

Develop Scientific Methods for doing work

Vtor Pereira Winter 2014