BA105-1: Organizational Behavior Spring 2005 Professor Jim Lincoln

1. Walter A. Haas School of Business University of California, Berkeley BA105-1: Organizational BehaviorSpring 2005Professor Jim Lincoln

2. Class Agenda for Today Introduction to OB Course mechanics 2. Overview of topics

3. When organizations do well or poorly, what is the first explanation that comes to mind? • The CEO did it. • Beware of attribution bias! • The tendency to attribute causation to the actions of individuals Organizational behavior teaches that the effectiveness of people in organizations depends on their situation-specific relationships with one another

4. What is Organizational Behavior? • The study of (general/people) management • More precisely: • The study of the behavior and attitudes of individuals and groups in organizations (micro OB) • The study of the structure, culture, and leadership of organizations in relation to their tasks and their environments (macro OB)

5. OB draws on all of social & behavioral science… • Psychology • Sociology • Economics • Political Science • Anthropology • History Even some engineering now and then…

6. Some OB journals • Practitioner-oriented: • Academy of Management Executive • Business Horizons • California Management Review • Harvard Business Review • Sloan Management Review • Scholar-oriented: • Academy of Management Journal • Administrative Science Quarterly • Journal of Applied Psychology • Organizational Behavior and Human Decision Processes • Organization Science • Strategic Management Journal

7. Some OB Gurus • Warren Bennis • Peter Drucker • Michael Hammer • Rosabeth Kanter • Raymond Miles • Henry Mintzberg • Tom Peters • Jeffrey Pfeffer

8. Research methods in OB run the social science gamut • Experiments (both lab and field) • Surveys • Ethnographies • Archival Research (documents & records)

9. How does OB differ from HR? • OB is a line, not a specialized staff, responsibility • Much OB management is CEO- or division-head level • Vision and culture • Re-orgs • OB is about principles, policies, & strategies • HR is more about tools and implementation

10. Why should business students study OB? • Managers • How to organize and motivate your employees • How to initiate and manage change • Entrepreneurs • You have the big idea, you have the venture capital lined up. How do you organize and motivate your team?

11. Why should business students study OB? (cont’d) • Consultants • problem-solving tool • useful for case interviews • Investors • will that merger work? • will that reorganization actually add shareholder value? • is that CEO as competent as s/he thinks s/he is?

12. Why should business students study OB? (cont’d) • Issues critical to managing your career: • understanding culture and person-job fit • Getting and using power and influence • implementing your ideas and goals

13. Some criticisms of OB • Isn’t it obvious or common-sensical? • Many things are “obvious” after-the-fact. Example: • The best form of organization is flat, flexible, & empowering • The best form of organization depends on the context (e.g., tasks, people, competition, technology, etc.) Beware of hindsight bias!

14. Other criticisms • OB might be important, but it’s an art, not a science • i.e., can’t be systematically analyzed or taught • Can only be learned by doing • Maybe it’s religion… • There is an element of preaching in OB • Tom Peters as bible-thumping evangelist • OB may be important for maintaining an organization, but it is not strategic

15. OB is strategicOB and HR are key to the development of critical & hard-to-imitate capabilities • Such capabilities refer to an organization’s core skills and knowledge that give it sustainable competitive advantage: allow it to better serve customers and clients than the competition • Examples: • Clear vision and strong culture • Motivated people • Effective teams and networks

16. There is abundant evidence that people management is key to competitive strategy and success Studies of IPOs among 200+ firms showed that people-centered practices were associated with faster time to IPO and higher survival rates. • Watson, Wyatt, an HR consulting firm, concluded that “Companies that link employee development to business strategy have 40% higher total share- holder returns than companies that do not.”

17. A Bain study showed that brokerage firms that increased broker retention by 10% increased broker value by 155%. Studies in trucking, retail, and hospitality have found similar results. • Studies have shown that a one standard deviation improvement in OB and HR management practices produces increases of $20,000-$40,000 in stock market value per employee.

18. “All organizations now routinely say, ‘People are our greatest asset.’ Yet few practice what they preach, let alone truly believe it…” Peter Drucker (1992)

19. “You got a problem with the guy in the cubicle next to you? I don’t care; shoot him” Marc Andreessen, Co-founder of Netscape

20. “In the new economy, competition is global, capital is abundant, ideas are developed quickly and cheaply, and people are willing to change jobs often. In that kind of environment…all that matters is talent…superior talent will be tomorrow’s prime source of competitive advantage.” E. Chambers et al. (1998). “The War for Talent.” The McKinsey Quarterly, 2-15.

21. The problem, then, is how to get, keep, and utilize talented people • It is not just a question of pay • Even talented people must be led, organized, and motivated

22. GE CEO Jack Welch as hands-on manager of talent The man who spends more than 50% of his time on people issues considers his greatest achievement the care and feeding of talent. ''This place runs by its great people,'' says Welch. ''The biggest accomplish-ment I've had is to find great people. An army of them. They are all better than most CEOs. They are big hitters, and they seem to thrive here.'' He believes he has to know people well enough to trust them and their judgments: ''I don't know how to build an aircraft engine,'' he says. ''I don't know what should run on NBC…. We're in the cat-and-dog insurance business in England. I don't really want to be in that business, but the guy who brought me that idea wanted to be in it, and I trust him. He'll take it and make it work.'' Welch knows by sight the names and responsibilities of at least the top 1,000 people at GE. “How Jack Welch runs GE.” Business Week, May 29, 1998.

23. And some organizations get excellent results with merely “OK” people See C. A. O'Reilly III and J. Pfeffer: Hidden Value: How Great Companies Achieve Extraordinary Results With Ordinary People. Harvard Business School Press, 2000. Only 10% of people are in the top 10%. Great companies not only hire talent, they build it and unleash the energy and talent of all their people.

24. Course Website (not on Catalyst)http://courses.haas.berkeley.edu/spring2005/ba105/(login=ugba105; pw=jlincoln) • Instructor info • Syllabus • Supplementary readings • Useful links • Course announcements • Powerpoints posted after lecture

25. Class meetings • Tuesday: • Introduce a new topic • Lecture/discussion • Exams • Thursday • Class business • Review of lecture and readings • Case analysis • Videos & exercises • Team project discussions

26. Readings • Electronic course reader on Study.net (http://catalyst.haas.berkeley.edu) • Note: if you are currently WAITLISTED for BA105-1: • You have temporary access to Study.net through Catalyst. The access terminates after the second week if you are not then enrolled.   • 10 hard copies of the first four weeks of readings are on reserve in the Long Library • Other readings posted on course website or handed out • Readings on the syllabus are required. Other readings are recommended unless otherwise indicated • Cases and readings must be prepared prior to the class for which they are assigned

27. Course Requirements • Class participation (15%) • In-class discussions, particularly of cases • Oral presentation on team projects • Team member ratings • Exams: in-class midterm and final (50%) • Essay questions that will involve case analysis • Team project (30%) • You will be assigned to teams of 3-5 persons each • You will study OB problems/issues in a real organization • Oral presentation and paper (12-15 pages) • In general, all members will receive the same grade • Participation in research experiments (5%)

28. Other course business • Enrollment issues • Go to the Undergraduate Program Office (S450) • Arrival and attendance • Email • Face cards and name tents • see website announcements • Seating: pick a seat you love and stay there! • Readers: • Keiko Sakarai and Barak Turovsky • Class reps • Guest instructors: Jennifer Kurkoski & others

29. Course overview….

30. A focus on problem-solving • You will learn to diagnose organizational problems, and design and implement solutions • The “congruence model” as a framework • Getting strategy, tasks, people, formal structure, informal structure, etc., to fit together

31. Critical issues • The old and new in organizational design • How to know if that reorg makes sense • What is leadership and how should you do it? • So you have a brilliant idea-how do you get people to follow you? • How to analyze and change organizational culture • How to design jobs and incentive systems that motivate employees • Clue: “just pay them more” is not enough.

32. More critical issues • How to design and lead teams that perform well and avoid the pitfalls of teamwork • How to maximize your own power and efficacy • Building and managing through networks • Getting power and using it • Leveraging diversity at home and abroad for competitive advantage

33. Schedule of topics • Part 1: Introduction (1 week) • an introduction to course themes • the congruence perspective • Part 2: The hard stuff: formal structure (3 weeks) • Traditional designs, modern designs, teams • Part 3: The soft stuff: informal organization I (2 weeks) • Leadership and culture

34. Course Topics (continued) • Part 4: Informal organization II (2 weeks) • Politics and networks • Part 5: Soft/hard and micro: Decision-making, motivation, and incentives (3 weeks) • Part 6: Managing diversity at home and abroad (2 weeks)

35. Thursday session • Introduction to discussion section • Read and prepare to discuss: • What general managers do • Read Kotter article • The congruence model as a framework for organizational problem-solving • Read Nadler and Tushman chapter