Week 1:

1.1 The Importance of Interpersonal Skills

1.1 Demonstrate the importance of interpersonal skills in the workplace.

Until the late 1980s, business school curricula emphasized the technical aspects of management,
that focued on economics, accounting, finance, and quantitative techniques. Course work in
human behaviour and people skills received less attention. Since then, business schools have
realized the role of interpersonal skills in determining a manager’s effectiveness. A survey across
20 industries indicated that a lack of interpersonal skills is the main reason for the employees’
failure to advance.5

Incorporating OB principles in the workplace can yield many important organizational outcomes.

 Firstly, companies that are known as good places to work generate superior financial
performance.7
 Second, developing managers’ interpersonal skills helps organizations attract and retain
high-performing employees, which is important since outstanding employees are always
in short supply and are costly to replace.
 Third, there are strong associations between the quality of workplace relationships and
employee job satisfaction, stress, and turnover. One very large survey of hundreds of
workplaces and more than 200 000 respondents showed that social relationships among co-
workers and supervisors were strongly related to overall job satisfaction. Positive social
relationships were also associated with lower stress at work and lower intentions to quit.8
Further research indicates that employees who relate to their managers with supportive
dialogue and proactivity find that their ideas are endorsed more often, which improves
workplace satisfaction.9
 Fourth, increasing the OB element in organizations can foster social responsibility awareness.
Accordingly, universities have begun to incorporate social entrepreneurship education into their
curriculum in order to train future leaders to address social issues within their organizations.10
This is especially important because there is a growing need for understanding the means and
outcomes of corporate social responsibility (CSR).1

Good working environment-> Greater financial performance

Managers’ Interpersonal skills-> Attract & retain qualified employees

Quality of workplace relationships -> employee job satisfaction, stress, and turnover.

increasing the OB element in organizations-> social responsibility awareness

In today’s competitive and demanding workplace, managers can’t succeed on their technical
skills alone. Succeeding in the workplace also takes good people skills.
 1.2 Defining Organizational Behaviour

Organizational behaviour (often abbreviated as OB) is a field of study that looks at the impact
that individuals, groups, and structure have on behaviour within organizations for the purpose of
applying such knowledge toward improving an organization’s effectiveness. Because the
organizations studied are often business organizations, OB is often applied to topics such as job
satisfaction, absenteeism, employment turnover, productivity, human performance, and
management. OB also examines the following core topics, although debate exists about their
relative importance:12

 Motivation
 Leader behaviour and power
 Interpersonal communication
 Group structure and processes
 Attitude development and perception
 Change processes
 Conflict and negotiation
 Work design

Much of OB is relevant beyond the workplace. The study of OB can cast light on the interactions
among family members, students working as a team on a class project, the voluntary group that
comes together to do something about reviving the downtown area, the parents or guardians who
sit on the board of a children’s daycare centre, or even the members of a lunchtime pickup
basketball team.

What Do We Mean by Organization?

An organization is a consciously coordinated social unit, composed of a group of people, that
functions on a relatively continuous basis to achieve a common goal or set of goals.
Manufacturing and service firms are organizations, and so are schools, hospitals, churches,
military units, retail stores, police departments, volunteer organizations, start-ups, and local,
provincial, and federal government agencies. Thus, when we use the term organization in this
text, we are referring not only to large manufacturing firms but also to small mom-and-pop
stores, as well as to the variety of other forms of organization that exist.

OB Is for Everyone
It might seem natural to think that the study of OB is for leaders and managers of organizations.
However, many organizations also have informal leadership opportunities. In organizations in
which employees are asked to share in a greater number of decision-making processes rather
than simply follow orders, the roles of managers and employees are becoming blurred.14 For
instance, employees in some retail operations are asked to make decisions about when to accept
returned items rather than defer the decision to the manager.
OB is not just for managers and employees. Entrepreneurs and self-employed individuals may
not act as managers, but they certainly interact with other individuals and organizations as part of
their work. OB applies equally well to all situations in which you interact with others: on the
basketball court, at the grocery store, in school, or in church. In fact, OB is relevant anywhere
that people come together and share experiences, work on goals, or meet to solve problems. To
help you understand these broader connections, you will find a feature called OB in the Street
throughout the text.

OB Has Few Absolutes

LO 1.3 Demonstrate why few absolutes apply to OB.

Laws in the physical sciences—chemistry, astronomy, physics—are consistent and apply in a

wide range of situations. They allow scientists to generalize about the pull of gravity or to
confidently send astronauts into space to repair satellites. Human beings are complex, and few, if
any, simple and universal principles explain organizational behaviour. Because we are not all
alike, our ability to make simple, accurate, and sweeping generalizations about ourselves is
limited. Two people often act very differently in the same situation, and the same person’s
behaviour changes in different situations. For example, not everyone is motivated by money, and
people may behave differently at a religious service than they do at a party.

OB Takes a Contingency Approach

Just because people can behave differently at different times does not mean, of course, that we
cannot offer reasonably accurate explanations of human behaviour or make valid predictions. It
does mean, however, that OB must consider behaviour within the context in which it occurs—a
strategy known as a contingency approach. In other words, OB’s answers depend upon the
situation. For example, OB scholars would avoid stating that everyone likes complex and
challenging work (the general concept). Why? Because not everyone wants a challenging job.
Some people prefer routine over varied work, or simple over complex tasks. A job that is
appealing to one person may not appeal to another, so the appeal of the job is contingent on the
person who holds it. Often, we’ll find both general effects (money does have some ability to
motivate most of us) and contingencies (some of us are more motivated by money than others,
and some situations are more about money than others). We will best understand OB when we
realize how both (general effects and the contingencies that affect them) often guide behaviour.

Consistent with the contingency approach, Point/Counterpoint debates are provided in each
chapter. These debates are included to highlight the fact that within OB there are disagreements.
Through the Point/Counterpoint format, you will gain the opportunity to explore different points
of view, discover how diverse perspectives complement and oppose each other, and gain insight
into some of the debates currently taking place within the OB field. Point/Counterpoint debates the
quality of evidence offered by popular books and academic research studies on organizational behaviour.
1.3 Complementing Intuition with Systematic
Study
LO 1.4 Understand the value of systematic study to OB.

Whether you have explicitly thought about it before or not, you have been “reading” people
almost all your life by watching their actions and interpreting what you see, or by trying to
predict what people might do under different conditions. The casual approach to reading others
can often lead to erroneous predictions, but using a systematic approach can improve your
accuracy.

Underlying the systematic approach is the belief that behaviour is not random. Rather, we can
identify fundamental consistencies underlying the behaviour of all individuals and modify them
to reflect individual differences.

These fundamental consistencies are very important. Why? Because they allow predictability.
Behaviour is generally predictable, and the systematic study of behaviour is a means to making
reasonably accurate predictions. When we use the term systematic study, we mean looking at
relationships, attempting to attribute causes and effects, and basing our conclusions on scientific
evidence—that is, on data gathered under controlled conditions and measured and interpreted in
a rigorous manner.

Evidence-based management (EBM) complements systematic study by basing managerial

decisions on the best available scientific evidence. For example, we want doctors to make
decisions about patient care based on the latest available evidence, and EBM argues that
managers should do the same, thinking more scientifically about management problems. A
manager might pose a question, search for the best available evidence, and apply the relevant
information to the question or case at hand. You might wonder what manager would not base
decisions on evidence, but most management decisions are made “on the fly,” with little to no
systematic study of available evidence.15

Systematic study and EBM add to intuition, or those “gut feelings” about what makes others (and
us) “tick.” Of course, the things you have come to believe in an unsystematic way are not
necessarily incorrect. Jack Welch (former CEO of General Electric) noted, “The trick, of course,
is to know when to go with your gut.” But if we make all decisions with intuition or gut instinct,
we are likely working with incomplete information—like making an investment decision with
only half the data about the potential for risk and reward.

Relying on intuition is made worse because we tend to overestimate the accuracy of what we
think we know. Surveys of human resource managers have also shown that many managers hold
“common-sense” opinions regarding effective management that have been flatly refuted by
empirical evidence.
We find a similar problem in chasing the business and popular media for management wisdom.
The business press tends to be dominated by fads. As a writer for The New Yorker put it, “Every
few years, new companies succeed, and they are scrutinized for the underlying truths they might
reveal. But often the