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Chapter 1 A Strategic Approach To Organizational Behavior. Michael A. Hitt C. Chet Miller Adrienne Colella. Slides by Ralph R. Braithwaite. George Zimmer. Exploring Behavior in Action. Strategic Use of Human Capital.

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Chapter 1 a strategic approach to organizational behavior

Chapter 1A Strategic Approach To Organizational Behavior

Michael A. Hitt

C. Chet Miller

Adrienne Colella

Slides by Ralph R. Braithwaite

Strategic use of human capital

George Zimmer

Exploring Behavior in Action

Strategic Use of Human Capital

George Zimmer effectively uses his human capital. His company has a core set of beliefs:

  • Work should be fulfilling

  • Workplaces should be fearless and energized

  • Work and family life should be balanced

  • Leaders should serve followers

  • Employees should be treated like customers

  • People should not be afraid to make mistakes

What are your thoughts about these beliefs?

Why has Men’s Wearhouse been more successfulthan similar businesses? Why do you think other businesses have not been able to imitate their success?

Knowledge objectives
Knowledge Objectives

  • Define organizational behavior and explain the strategic approach to OB.

  • Provide a formal definition of organization.

  • Describe the nature of human capital.

  • Discuss the conditions under which human capital is a source of competitive advantage for an organization.

  • Describe positive organizational behavior and explain how it can contribute to associates’ productivity.

  • Explain the five characteristics of high-involvement management and the importance of this approach to management.

Basic elements of strategic organizational behavior
Basic Elements of Strategic Organizational Behavior



Strategic OBApproaches

The strategic lens
The Strategic Lens

Studying organizational behavior with a strategic lens is important because:

  • Helps to focus on major issues critical to the direction of the organization.

  • Helps with managing people at all levels of the organization.

  • Looks at the various skills needed to effectively manage the organization and its associates.

Strategic approach

Organizational Factors

Organizational Success

Productivity of Individuals and Groups

Satisfaction of Individuals and Groups

Individual Factors

Interpersonal Factors

Strategic Approach

Adapted from Exhibit 1-1: Factors and Outcomes of a Strategic Approach to Organizational Behavior

Senior managers
Senior Managers



  • Discuss – vision, strategy, and other major issues

  • Conceptualizing

  • Communicating

  • Understanding the perspectives of others

  • Help middle managers define or redefine roles and manage conflict

  • Listening

  • Conflict management

  • Negotiating

  • Motivating

  • Create and maintain the organization’s culture

  • Interpersonal influence

Middle managers
Middle Managers



  • Champion strategic ideas and help firm to remain adaptive

  • Networking

  • Communicating

  • Influencing

  • Process data and information for use by other individuals

  • Analyzing

  • Communicating

  • Deliver strategic initiatives to lower-level managers

  • Communicating

  • Motivating

  • Understanding values

  • Managing stress

Lower level managers
Lower-Level Managers



  • Coach the organization’s associates

  • Teaching

  • Listening

  • Understanding personalities

  • Managing stress

  • Remove obstacles for associates

  • Deal with personal problems of associates

  • Negotiating

  • Influencing others

  • Counseling

  • Understanding personalities

  • Design jobs, team structures, and reward systems

  • Negotiating

  • Group dynamics

Behavioral science disciplines
Behavioral Science Disciplines






Foundations of strategic ob
Foundations of Strategic OB

Strategic approach

  • Integrates knowledge from all these disciplines

  • Focuses on behaviors and processes – competitive advantage and financial success

Summary of importance of ob
Summary of Importance of OB

  • Complexities and subtleties in leveraging capabilities of people

  • Avoid allure of seeking simple answers to resolve organizational issues

  • Integrates important behavioral science knowledge within an organizational setting and emphasizes application

An organization
An Organization

A collection of individuals forming a coordinated system of specialized activities for the purpose of achieving certain goals over some extended period of time.

Common features of organizations
Common Features of Organizations

  • Network of individuals

  • System

  • Coordinated activities

  • Division of labor

  • Goal orientation

  • Continuity over time

Creating innovation

Steve Jobs

Creating Innovation

  • Do you agree that Apple is the “creative king” as described by Business Week? Why or why not?

  • What can other companies learn from Apple’s approach?

ExperiencingStrategic OB

Human capital
Human Capital

The sum of the skills, knowledge, and general attributes of the people in an organization

Competitive advantage
Competitive Advantage

  • Perform some aspect of its work better than competitors

  • Perform in a way that competitors cannot duplicate

Human capital as source of competitive advantage
Human Capital as Source of Competitive Advantage





Overall potential



Difficult to imitate

Supported by effective management

Competitive implications





Competitive Disadvantage

Below Normal




Competitive Parity





Temporary Competitive Advantage

Above Normal




Sustained Competitive Advantage

Above Normal

Overall Potential

Are human resources in the firm . . .

Adapted from Exhibit 1-2: Human Capital and Competitive Advantage

Skilled labor shortage
Skilled Labor Shortage


  • Thoughts on the global shortage of qualified managers?

  • Could Wipro’s approach to training work in other places? Give some examples.

Positive organizational behavior
Positive Organizational Behavior

  • Nurtures individuals’ greatest strengths

  • Helps people develop self-confidence, optimism and resiliency

  • Assists in the development of self-efficacy

  • Applies emotional intelligence (EQ)

High involvement management
High-Involvement Management

  • Carefully selecting and training associates

  • Giving associates decision-making power, information, and compensation

  • Empowering people to use their unique knowledge and skills to:

  • work hard to serve the organization’s best interest

  • take on different tasks and gain skills needed to work in multiple capacities

  • work using their intellect as well as their hands

Key characteristics
Key Characteristics


Individual Incentive Systems


Individual Piece Rate Systems

Knowledge and Skill-Based Pay

  • Selective Hiring

  • Extensive Training

  • Decision Power

  • Information Sharing

  • Incentive Compensation

Evidence of effectiveness
Evidence of Effectiveness

  • Positive effect on performance of steel mini-mills

  • Flexible production methods in auto plants resulted in higher productivity

  • Firms that placed a high value on people had higher survival rates (longer than five years) after an IPO

Demands on managers
Demands on Managers

  • Seek situations for delegating responsibility

  • Need to trust associates not to abuse authority

  • Continuously think about human capital and competitive advantage

The power of human capital
The Power of Human Capital

  • Any thoughts on Microsoft’s position, “the ideas that lead to better software come from human capital”? Why or why not?

  • While some believe Microsoft is monopolistic, the company has won awards for their commitment to diversity and flexible work arrangements. Thoughts?

ExperiencingStrategic OB