What Is Organizational Behavior1-Chapter Lea.docx

What Is Organizational Behavior?
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Chapter Learning ObjectivesAfter studying this chapter you
should be able to:Demonstrate the importance of interpersonal
skills in the workplace.Describe the manager’s functions, roles,
and skills.Define organizational behavior (OB).Show the value
to OB of systematic study.Identify the major behavioral science
disciplines that contribute to OB.Demonstrate why there are few
absolutes in OB.Identify the challenges and opportunities
managers have in applying OB concepts.Compare the three
levels of analysis in this book’s OB model.
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The Importance of Interpersonal Skills
Understanding OB helps determine manager
effectivenessTechnical and quantitative skills are important But
leadership and communication skills are CRITICAL
Organizational benefits of skilled managersLower turnover of
quality employeesHigher quality applications for
recruitmentBetter financial performance
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What Managers Do
They get things done through other people.
Management Activities:Make decisionsAllocate resourcesDirect
activities of others to attain goals
Work in an organizationA consciously coordinated social unit
composed of two or more people that functions on a relatively
continuous basis to achieve a common goal or set of goals.
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Management Functions
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Management Functions: Plan
A process that includes defining goals, establishing strategy,
and developing plans to coordinate activities.
As managers advance, they do this function more often.
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Management Functions: Organize
Determining what tasks are to be done, who is to do them, how
the tasks are to be grouped, who reports to whom, and where
decisions are to be made.
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Management Functions: Lead
A function that includes motivating employees, directing others,
selecting the most effective communication channels, and
resolving conflicts.

It is about PEOPLE!
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Management Functions: Control
Monitoring performance, comparing actual performance with
previously set goals, and correcting any deviation.
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Discovered ten managerial roles
Separated into three groups:
InterpersonalInformationalDecisional
Mintzberg’s Managerial Roles
E X H I B I T 1–1
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Mintzberg’s Managerial Roles: Interpersonal
Source: Adapted from The Nature of Managerial Work by H.
Mintzberg. Copyright © 1973 by H. Mintzberg. Reprinted by
permission of Pearson Education.
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Mintzberg’s Managerial Roles: Informational
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Mintzberg’s Managerial Roles: Decisional
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Katz’s Essential Management SkillsTechnical SkillsThe ability
to apply specialized knowledge or expertise
Human SkillsThe ability to work with, understand, and motivate
other people, both individually and in groups
Conceptual SkillsThe mental ability to analyze and diagnose
complex situations
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Luthans’ Study of Managerial ActivitiesIs there a difference in
frequency of managerial activity between effective and
successful managers?Four types of managerial
activity:Traditional Management
Decision-making, planning, and controlling.Communication
Exchanging routine information and processing
paperworkHuman Resource Management
Motivating, disciplining, managing conflict, staffing and
training.Networking
Socializing, politicking, and interacting with others.
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Successful vs. Effective Allocation by Time
E X H I B I T 1–2
Managers who promoted faster (were successful) did different

things than did effective managers (those who did their jobs
well)
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Organizational Behavior
A field of study that investigates the impact that individuals,
groups, and structure have on behavior within organizations, for
the purpose of applying such knowledge toward improving an
organization’s effectiveness.
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Intuition and Systematic Study
The two are complementary means of predicting behavior.
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An Outgrowth of Systematic Study…
Evidence-Based Management (EBM)
Basing managerial decisions on the best available scientific
evidence
Must think like scientists:
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Managers Should Use All Three Approaches
The trick is to know when to go with your gut.

– Jack Welsh
Intuition is often based on inaccurate informationFaddism is
prevalent in managementSystematic study can be time-
consuming
Use evidence as much as possible to inform your intuition and
experience. That is the promise of OB.
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Contributing Disciplines
See E X H I B I T 1–3 for details
Many behavioral sciences
have contributed to the
development of
Organizational
Behavior
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Psychology
The science that seeks to measure, explain, and sometimes
change the behavior of humans and other animals.
Unit of Analysis:IndividualContributions to OB:Learning,
motivation, personality, emotions, perceptionTraining,
leadership effectiveness, job satisfactionIndividual decision
making, performance appraisal attitude measurementEmployee
selection, work design, and work stress
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Social Psychology
An area within psychology that blends concepts from

psychology and sociology and that focuses on the influence of
people on one another.
Unit of Analysis:GroupContributions to OB:Behavioral
changeAttitude changeCommunicationGroup processesGroup
decision making
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SociologyUnit of Analysis:
-- Organizational SystemContributions to OB:Group
dynamicsWork teamsCommunicationPowerConflictIntergroup
behavior
-- Group
Formal organization theoryOrganizational
technologyOrganizational changeOrganizational culture
The study of people in relation to their fellow human beings.
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AnthropologyUnit of Analysis:
-- Organizational SystemContributions to OB:Organizational
cultureOrganizational environment
-- Group
Comparative valuesComparative attitudesCross-cultural analysis
The study of societies to learn about human beings and their
activities.
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Few Absolutes in OB
Situational factors that make the main relationship between two
variables change—e.g., the relationship may hold for one
condition but not another.
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Challenges and Opportunities for OBResponding to
GlobalizationManaging Workforce DiversityImproving Quality
and ProductivityImproving Customer ServiceImproving People
SkillsStimulating Innovation and ChangeCoping with
“Temporariness”Working in Networked OrganizationsHelping
Employees Balance Work-Life ConflictsCreating a Positive
Work EnvironmentImproving Ethical Behavior
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Responding to GlobalizationIncreased foreign
assignmentsWorking with people from different culturesCoping
with anti-capitalism backlashOverseeing movement of jobs to
countries with low-cost laborManaging people during the war
on terror
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Managing Workforce Diversity The people in organizations are
becoming more heterogeneous demographicallyEmbracing
diversityChanging U.S. demographicsChanging management
philosophy Recognizing and responding to differences
See E X H I B I T 1–4
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Developing an OB ModelA model is an abstraction of reality: a
simplified representation of some real-world phenomenon.Our
OB model has three levels of analysisEach level is constructed
on the prior level
E X H I B I T 1–5
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Types of Study Variables
Independent (X)The presumed cause of the change in the
dependent variable (Y).This is the variable that OB researchers
manipulate to observe the changes in Y.
Dependent (Y)This is the response to X (the independent
variable).It is what the OB researchers want to predict or
explain. The interesting variable!
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Interesting OB Dependent VariablesProductivityTransforming
inputs to outputs at lowest cost. Includes the concepts of
effectiveness (achievement of goals) and efficiency (meeting
goals at a low cost).AbsenteeismFailure to report to work – a
huge cost to employers.TurnoverVoluntary and involuntary
permanent withdrawal from an organization.Deviant Workplace
BehaviorVoluntary behavior that violates significant
organizational norms and thereby threatens the well-being of
the organization and/or any of its members.
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More Interesting OB Dependent VariablesOrganizational
Citizenship Behavior (OCB)Discretionary behavior that is not

part of an employee’s formal job requirements, but that
nevertheless promotes the effective functioning of the
organization.Job SatisfactionA general attitude (not a behavior)
toward one’s job; a positive feeling of one's job resulting from
an evaluation of its characteristics.
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The Independent Variables
The independent variable (X) can be at any of these three levels
in this model:IndividualBiographical characteristics, personality
and emotions, values and attitudes, ability, perception,
motivation, individual learning and individual decision
making.GroupCommunication, group decision making,
leadership and trust, group structure, conflict, power and
politics, and work teams.Organization SystemOrganizational
culture, human resource policies and practices, and
organizational structure and design.
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OB Model
E X H I B I T 1–6
Independent Variables (X)
Dependent Variables (Y)
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Summary and Managerial ImplicationsManagers need to
develop their interpersonal skills to be effective.OB focuses on
how to improve factors that make organizations more

effective.The best predictions of behavior are made from a
combination of systematic study and intuition.Situational
variables moderate cause-and-effect relationships – which is
why OB theories are contingent.There are many OB challenges
and opportunities for managers today.The textbook is based on
the contingent OB model.
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Emotions and Moods
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Chapter Learning ObjectivesAfter studying this chapter, you
should be able to:Differentiate emotions from moods, and list
the basic emotions and moods.Discuss whether emotions are
rational and what functions they serve.Identify the sources of
emotions and moods.Show the impact emotional labor has on
employees.Describe Affective Events Theory and identify its
applications.Contrast the evidence for and against the existence
of emotional intelligence.Apply concepts about emotions and
moods to specific OB issues.Contrast the experience,
interpretation, and expression of emotions across cultures.
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Why Were Emotions Ignored in OB?The “Myth of
Rationality”Emotions were seen as irrationalManagers worked
to make emotion-free environmentsView of
EmotionalityEmotions were believed to be disruptiveEmotions
interfered with productivityOnly negative emotions were
observed
Now we know emotions can’t be separated from the workplace

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What are Emotions and Moods?
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See E X H I B I T 8-1
The Basic EmotionsWhile not universally accepted, there appear
to be six basic emotions:
Anger
Fear
Sadness
Happiness
Disgust
SurpriseAll other emotions are subsumed under these sixMay
even be placed in a spectrum of emotion:Happiness – surprise –
fear – sadness – anger - disgust
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Basic Moods: Positive and Negative AffectEmotions cannot be
neutral.Emotions (“markers”) are grouped into general mood
states.Mood states affect perception and therefore perceived
reality.
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E X H I B I T 8-2
What Is the Function of Emotion?Do Emotions Make Us
Irrational?Expressing emotions publicly may be damaging to
social statusEmotions are critical to rational decision-

makingEmotions help us understand the world around us
What Functions Do Emotions Serve?Darwin argued they help in
survival problem-solvingEvolutionary psychology: people must
experience emotions as there is a purpose behind themNot all
researchers agree with this assessment
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Sources of Emotion and MoodPersonality There is a trait
component – affect intensityDay and Time of the WeekThere is
a common pattern for all of us
Happier in the midpoint of the daily awake period
Happier toward the end of the weekWeatherIllusory correlation
– no effect StressEven low levels of constant stress can worsen
moodsSocial ActivitiesPhysical, informal, and dining activities
increase positive moods
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See E X H I B I T 8-3 and 8-4 for Emotion Timing
More Sources of Emotion and MoodSleep Poor sleep quality
increases negative affectExerciseDoes somewhat improve mood,
especially for depressed peopleAgeOlder folks experience fewer
negative emotionsGenderWomen tend to be more emotionally
expressive, feel emotions more intensely, have longer-lasting
moods, and express emotions more frequently than do menDue
more to socialization than to biology
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Emotional Labor
An employee’s expression of organizationally desired emotions

during interpersonal transactions at work.Emotional
Dissonance:Employees have to project one emotion while
simultaneously feeling anotherCan be very damaging and lead
to burnoutTypes of Emotions:Felt: the individual’s actual
emotionsDisplayed: required or appropriate emotions
Surface Acting: displaying appropriately but not feeling those
emotions internally
Deep Acting: changing internal feelings to match display rules
- very stressful
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See E X H I B I T 8-5 for Emotional Labor and Pay
Affective Events Theory (AET)An event in the work
environment triggers positive or negative emotional
reactionsPersonality and mood determine response intensity
Emotions can influence a broad range of work variables
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E X H I B I T 8-6
Implications of AET
An emotional episode is actually the result of a series of
emotional experiences triggered by a single event
Current and past emotions affect job satisfaction
Emotional fluctuations over time create variations in job
performance
Emotion-driven behaviors are typically brief and variable
Both negative and positive emotions can distract workers and
reduce job performance
Emotions provide valuable insights about behaviorEmotions,
and the minor events that cause them, should not be ignored at
work: they accumulate
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Emotional Intelligence (EI)A person’s ability to:Be self-aware
Recognizing own emotions when experiencedDetect emotions in
othersManage emotional cues and informationEI plays an
important role in job performanceEI is controversial and not
wholly acceptedCase for EI:
Intuitive appeal; predicts criteria that matter; is biologically-
based.Case against EI:
Too vague a concept; can’t be measured; its validity is suspect.
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OB Applications of Emotions and MoodsSelectionEI should be
a hiring factor, especially for social jobs. Decision
MakingPositive emotions can lead to better
decisions.CreativityPositive mood increases flexibility,
openness, and creativity.MotivationPositive mood affects
expectations of success; feedback amplifies this
effect.LeadershipEmotions are important to acceptance of
messages from organizational leaders.
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More OB Applications of Emotions and MoodsNegotiation
Emotions, skillfully displayed, can affect negotiationsCustomer
ServicesEmotions affect service quality delivered to customers
which, in turn, affects customer relationshipsEmotional
Contagion: “catching” emotions from othersJob AttitudesCan
carry over to home, but dissipate overnightDeviant Workplace
BehaviorsNegative emotions lead to employee deviance
(actions that violate norms and threaten the
organization)Manager’s InfluenceLeaders who are in a good

mood, use humor, and praise employees increase positive moods
in the workplace.
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Global ImplicationsDo people experience emotions
equally?No. Culture can determine type, frequency, and depth
of experienced emotionsDo people interpret emotions the same
way?Yes. Negative emotions are seen as undesirable and
positive emotions are desirableHowever, value of each emotion
varies across culturesDo norms of emotional expression
vary?Yes. Some cultures have a bias against emotional
expression; others demand some display of emotionHow the
emotions are expressed may make interpretation outside of
one’s culture difficult
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Summary and Managerial Implications
2-*Moods are more general than emotions and less
contextualEmotions and moods impact all areas of OBManagers
cannot and should not attempt to completely control the
emotions of their employeesManagers must not ignore the
emotions of their co-workers and employeesBehavior
predictions will be less accurate if emotions are not taken into
account
Emotional Intelligence

It is the ability to monitor one’s own and others’ feelings and
emotions, to discriminate among them and to use this
information to guide one’s thinking and actions.
WHAT IS EMOTIONAL INTELLIGENCE?
FOUNDATION OF EMOTIONAL INTELLIGENCE
Self AwarenessEmotional Self-AwarenessSelf-
RegardReality Testing
Coping SkillsImpulse ControlStress ToleranceProblem
SolvingFlexibility Optimism
Effective Relationships Interpersonal
Relationships Independence
Interpersonal Skills Empathy Social Responsibility
Assertiveness
Personal & Interpersonal Effectiveness Self-Actualization
Happiness
plus
is related to
which predicts
and results in
Increasing Emotional Intelligence makes individuals more
efficient, productive and successful.
The workforce is using Emotional Intelligence all over the place
WHY STUDY EMOTIONAL INTELLIGENCE?
Organizations can become more productive by recruiting/hiring
emotionally smart people and by offering opportunities to

enhance these skills through involvement
Emotional Intelligence can be a way to help maximize the
potential of your members and in turn your organization
WHY STUDY EMOTIONAL INTELLIGENCE Contd…
Possessing skills related to Emotional Intelligence can help you
be prepared to lead others
Having the skills to lead are vital in managing complex
organizations
Every day we will interact with others who possess varying
degrees of Emotional Intelligence
Being able to work with challenging people is a necessity for
the workplace and organization involvement
You can assess the overall potential for your organization
Emotional Intelligence influences organizational culture as
individuals know their abilities to interface with others .
Organizations with high levels of Emotional Intelligence may be
more apt to succeed.
Emotional Intelligence is the ability to control and use one’s
emotions in a constructive-rather than destructive manner.
Emotional Intelligence allows an individual achieve his/her best
performance, while inspiring others.
EMOTIONAL INTELIGENCE:THE NEW SCIENCE OF

SUCCESS
Emotional Intelligence is a composite of many other qualities,
such as effective oral communication and ability to respond
well to set backs.
The Four domains of Emotional Intelligence; SELF-
AWARENESS, SELF-MANAGEMENT, SOCIAL AWARENESS
and RELATIONSHIP MANAGEMENT.
EMOTIONAL INTELIGENCE:THE NEW SCIENCE OF
SUCCESS Contd…
FOUR AREAS OF EMOTIONAL INTELLIGENCE
Self
Others
Awareness
Actions
Self
Awareness
Social
Awareness
Self
Management
Relationship

Management
Positive impact
on others
SELF-AWARENESS
The ability to read one’s own emotions and recognize their
impact.
Self-awareness and self management are related to one’s own
personal competence.
The Three (3) core dimensions are an EMOTIONAL SELF-
AWARENESS, ACCURATE SELF ASSESSMENT and SELF
CONFIDENCE.
EMOTIONAL INTELLIGENCE
Emotional Self-Awareness
Aware of one’s own feelings
Aware of triggers
Understands implications of emotions
Has emotional insight
SELF-AWARENESS
SELF ASSESEMENT

Accurate Self-Assessment
Aware of strengths and limitations
Open to feedback
Has a sense of humor about oneself
Solicits honest critiques
SELF CONFIDENCE
Self Confidence
Is confident in job capability
Believes in oneself
Is self-assured
Has presence
EMOTIONAL INTELLIGENCE:
SELF MANAGEMENT
Consists of Six (6) core dimensions:
EMOTIONAL SELF-CONTROL
TRANSPARENCY
ADAPTABILITY
ACHIEVEMENT
INITIATIVE
OPTIMISM
Emotional Self controlShows restraintHas patienceResponds
calmlyStays composed/positive
SELF MANAGEMENT

TransparencyKeeps promisesBrings up ethical concernsPublicly
admits to mistakesActs on values
SELF MANAGEMENT
Adaptability Open to new ideas Adapts to situations Handles
unexpected
demands Adapts or changes strategy
SELF MANAGEMENT
AchievementImproves performanceSets challenging
goalsAnticipates obstaclesTakes calculated risks
SELF MANAGEMENT
InitiativeAddresses current opportunitiesSeeks
informationMakes extra effortsInitiates actions for the future
SELF MANAGEMENT
OptimismHas positive expectationsIs optimistic about the
futureIs resilientLearns from setbacks

SELF MANAGEMENT
Social Awareness and relationship management have to do with
ones competence in the social arena.
Consists of the following three (3) key components:
Empathy
Organizational Awareness
Service Orientation.
SOCIAL AWARENESS
SOCIAL AWARENESS COMPETENCES
Empathy
Listens
Reads nonverbal cues
Open to diversity
Sees others’ perspectives
SOCIAL AWARENESS COMPETENCES
Organizational Awareness
Understands informal structures
Understands climate and culture
Understands organizational politics

Understands underlying issues
SOCIAL AWARENESS COMPETENCIES
Service orientation
Makes self available
Monitors satisfaction
Takes personal
responsibility
Matches customer needs
Social Awareness and Relationship
Management have to do with ones competency in the Social
arena.
It Consists of Six core (6) areas
RELATIONSHIP MANAGEMENT
SIX CORE AREASINSPIRATIONAL LEADERSHIP
INFLUENCE. DEVELOPING OTHERS . CHANGE CATALYST
. CONFLICT MANAGEMENT. TEAMWORK and
COLLABORATION.

LEADING OTHERS:INSPIRATIONAL LEADERSHIP
INFLUENCEDEVELOPING OTHERS
WORKING WITH OTHERS:CHANGE CATALYST CONFLICT
MANAGEMENTTEAMWORK and COLLABORATION
RELATIONSHIP MANAGEMENTInspirational leadership
Leads by example
Stimulates enthusiasm
Inspires others
Communicates a compelling vision
Influence
Engages others
Anticipates impact of actions/words
Uses indirect influence
Develops behind the scenes support

RELATIONSHIP MANAGEMENTDeveloping others
Recognizes strengths
Provides support
Gives constructive feedback
Acts as a mentor
RELATIONSHIP MANAGEMENTChange catalyst
Defines general need for change
Acts to support change
Personally leads change
Champions change
Conflict management
Airs disagreements
Maintains objectivity
Addresses conflict
Orchestrates win-win solutions
Teamwork & collaboration
Cooperates
Solicits input
Encourages others

Builds bonds
GOOD NEWS!You can develop Emotional Intelligence!
“Rewire” your responses to feelings.Change how you think
about this.Alter your behavior.
Performance
Emotions
Thoughts
Behavior
IMPROVING YOUR EMOTIONAL INTELLIGENCE
Improving and sustaining Emotional Intelligence takes a
concerted effort over several months.
Prepackaged
Seminars
Minimal
results
In-house
Training
Some behavioral results

Individual
Development
Sustained individual performance improvement
Integrated Initiatives
with Coaching and Measurement
Critical mass for sustained group performance improvement
Organizational Interventions
Sustained organizational improvement
Motivation Concepts
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should be able to:Describe the three elements of
motivation.Identify four early theories of motivation and
evaluate their applicability today.Apply the predictions of
Cognitive Evaluation theory to intrinsic and extrinsic
rewards.Compare and contrast goal-setting theory and
Management by Objectives.Contrast reinforcement theory and
goal-setting theory.Demonstrate how organizational justice is a
refinement of equity theory.Apply the key tenets of expectancy
theory to motivating employees.Compare contemporary theories
of motivation.Explain to what degree motivation theories are
culture-bound.
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Defining Motivation
The result of the interaction between the individual and the
situation.The processes that account for an individual’s
intensity, direction, and persistence of effort toward attaining a
goal – specifically, an organizational goal.
Three key elements:Intensity – how hard a person triesDirection
– effort that is channeled toward, and consistent with,
organizational goalsPersistence – how long a person can
maintain effort
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Early Theories of Motivation
These early theories may not be valid, but they do form the
basis for contemporary theories and are still used by practicing
managers.
Maslow’s Hierarchy of Needs Theory Alderfer’s ERG
(Existence, Relatedness, and Growth)McGregor’s Theory X and
Theory YHerzberg’s Two-Factor TheoryMcClelland’s Theory
of Needs
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Maslow’s Hierarchy of Needs
There is a hierarchy of five needs. As each need is substantially
satisfied, the next need becomes dominant.
AssumptionsIndividuals cannot move to the next higher level
until all needs at the current (lower) level are satisfied Must
move in hierarchical order
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Lower Order
External
Higher Order
Internal
Alderfer’s ERG Theory
A reworking of Maslow to fit empirical research.
Three groups of core needs:Existence (Maslow: physiological
and safety)Relatedness (Maslow: social and status)Growth
(Maslow: esteem and self-actualization)Removed the
hierarchical assumptionCan be motivated by all three at once
Popular, but not accurate, theory
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McGregor’s Theory X and Theory YTwo distinct views of
human beings: Theory X (basically negative) and Theory Y
(positive).Managers used a set of assumptions based on their
viewThe assumptions molded their behavior toward employees
No empirical evidence to support this theory.
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Herzberg’s Two-Factor Theory
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See E X H I B I T S 6-2 and 6-3

Key Point: Satisfaction and dissatisfaction are not opposites but
separate constructs
Extrinsic and Related to Dissatisfaction
Intrinsic and Related to Satisfaction
Criticisms of Two-Factor Theory
Herzberg says that hygiene factors must be met to remove
dissatisfaction. If motivators are given, then satisfaction can
occur.
Herzberg is limited by his procedure Participants had self-
serving biasReliability of raters questioned Bias or errors of
observationNo overall measure of satisfaction was
usedHerzberg assumed, but didn’t research, a strong
relationship between satisfaction and productivity
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McClelland’s Three Needs TheoryNeed for Achievement
(nAch)The drive to excel, to achieve in relation to a set of
standards, to strive to succeedNeed for Power (nPow)The need
to make others behave in a way that they would not have
behaved otherwiseNeed for Affiliation (nAff)The desire for
friendly and close interpersonal relationshipsPeople have
varying levels of each of the three needs.Hard to measure
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Performance Predictions for High nAchPeople with a high need
for achievement are likely to:Prefer to undertake activities with
a 50/50 chance of success, avoiding very low- or high-risk
situationsBe motivated in jobs that offer high degree of personal
responsibility, feedback, and moderate riskNot necessarily make

good managers – too personal a focus. Most good general
managers do NOT have a high nAchNeed high level of nPow
and low nAff for managerial successGood research support, but
it is not a very practical theory
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Cognitive Evaluation TheoryGoal-Setting TheoryManagement
by Objectives (MBO)Self-Efficacy TheoryAlso known as Social
Cognitive Theory or Social Learning TheoryReinforcement
TheoryEquity TheoryExpectancy Theory
Contemporary Theories of Motivation
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Cognitive Evaluation Theory
Providing an extrinsic reward for behavior that had been
previously only intrinsically rewarding tends to decrease the
overall level of motivationMajor Implications for work
rewardsIntrinsic and extrinsic rewards are not
independentExtrinsic rewards decrease intrinsic rewardsPay
should be noncontingent on performanceVerbal rewards
increase intrinsic motivation; tangible rewards reduce itSelf-
concordance When the personal reasons for pursuing goals are
consistent with personal interests and core values (intrinsic
motivation), people are happier and more successful
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Locke’s Goal-Setting TheoryBasic Premise: That specific and
difficult goals, with self-generated feedback, lead to higher
performanceDifficult Goals:Focus and direct attentionEnergize
the person to work harderDifficulty increases persistenceForce

people to be more effective and efficientRelationship between
goals and performance depends on: Goal commitment (the more
public the better!)Task characteristics (simple, well-
learned)Culture (best match is in North America)
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MBO is a systematic way to utilize goal-setting.Goals must
be:TangibleVerifiableMeasurableCorporate goals are broken
down into smaller, more specific goals at each level of
organization.Four common ingredients to MBO programs:Goal
specificityParticipative decision makingExplicit time
periodPerformance feedback
Implementation: Management by Objectives
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Bandura’s Self-Efficacy TheoryAn individual’s belief that he or
she is capable of performing a task. Higher efficacy is related
to:
Greater confidence
Greater persistence in the face of difficulties
Better response to negative feedback (work harder)Self-Efficacy
complements Goal-Setting Theory.
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Given Hard Goal
Higher Self-Set Goal
Increased Confidence
Higher Performance

Increasing Self-EfficacyEnactive masteryMost important source
of efficacyGaining relevant experience with task or job“Practice
makes perfect”Vicarious modelingIncreasing confidence by
watching others perform the taskMost effective when observer
sees the model to be similar to him- or herselfVerbal
persuasionMotivation through verbal convictionPygmalion and
Galatea effects - self-fulfilling propheciesArousalGetting
“psyched up” – emotionally aroused – to complete taskCan hurt
performance if emotion is not a component of the task
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Similar to Goal-Setting Theory, but focused on a behavioral
approach rather than a cognitive one.
Behavior is environmentally causedThought (internal cogitative
event) is not important
Feelings, attitudes, and expectations are ignoredBehavior is
controlled by its consequences – reinforcersIs not a
motivational theory but a means of analysis of
behaviorReinforcement strongly influences behavior but is not
likely to be the sole cause
Reinforcement Theory
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Adams’ Equity TheoryEmployees compare their ratios of
outcomes-to-inputs of relevant others.When ratios are equal:
state of equity exists – there is no tension as the situation is
considered fairWhen ratios are unequal: tension exists due to
unfairness

Underrewarded states cause anger
Overrewarded states cause guiltTension motivates people to act
to bring their situation into equity
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Can be four different situations:
Self-Inside
The person’s experience in a different job in the same
organizationSelf-Outside
The person’s experience in a different job in a different
organizationOther-Inside
Another individual or group within the organizationOther-
Outside
Another individual or group outside of the organization
Equity Theory’s “Relevant Others”
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Reactions to InequityEmployee behaviors to create
equity:Change inputs (slack off)Change outcomes (increase
output)Distort/change perceptions of selfDistort/change
perceptions of othersChoose a different referent personLeave
the field (quit the job)Propositions relating to inequitable
pay:Paid by time:
Overrewarded employees produce more
Underrewarded employees produce less with low qualityPaid by
quality:
Overrewarded employees give higher quality
Underrewarded employees make more of low quality
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Justice and Equity Theory
4-*
Overall perception of what is fair in the workplace.
Vroom’s Expectancy Theory
The strength of a tendency to act in a certain way depends on
the strength of an expectation that the act will be followed by a
given outcome and on the attractiveness of the outcome to the
individual.
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Expectancy of performance success
Instrumentality of success in getting reward
Valuation of the reward in employee’s eyes
Integrating Contemporary Motivation TheoriesBased on
Expectancy Theory
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Global ImplicationsMotivation theories are often culture-
bound.Maslow’s Hierarchy of Needs Theory
Order of needs is not universalMcClelland’s Three Needs
Theory

nAch presupposes a willingness to accept risk and performance
concerns – not universal traitsAdams’ Equity Theory
A desire for equity is not universal
“Each according to his need” – socialist/former
communistsDesire for interesting work seems to be
universal.There is some evidence that the intrinsic factors of
Herzberg’s Two-Factor Theory may be universal
4-*
Summary and Managerial ImplicationsNeed Theories (Maslow,
Alderfer, McClelland, Herzberg)Well known, but not very good
predictors of behaviorGoal-Setting TheoryWhile limited in
scope, good predictorReinforcement TheoryPowerful predictor
in many work areasEquity TheoryBest known for research in
organizational justiceExpectancy TheoryGood predictor of
performance variables but shares many of the assumptions as
rational decision making
4-*
Motivation: From Concepts to Applications
should be able to:Describe the Job Characteristics Model and
evaluate the way it motivates by changing the work
environment.Compare and contrast the three main ways jobs can
be redesigned.Identify three alternative work arrangements and
show how they might motive employees.Give examples of
employee involvement measures and show how they can
motivate employees.Demonstrate how the different types of
variable-pay programs can increase employee motivation.Show

how flexible benefits turn benefits into motivators.Identify the
motivational benefits of intrinsic rewards.
Motivation by Job Design: The JCMJob Characteristics Model
(JCM)Hackman and Oldham’s concept that any job can be
described through five core job dimensions:
Skill variety – Requirements for different tasks in the job.
Task identity – Completion of a whole piece of work.
Task significance – The job’s impact on others.
Autonomy – Level of discretion in decision making.
Feedback – Amount of direct and clear information on
performance.The way elements in a job are organized (job
design) impacts motivation, satisfaction, and performance.
The Job Characteristics Model
E X H I B I T 7-1
Source: J.R. Hackman and G.R. Oldham, Work Design
(excerpted from pp. 78–80). © 1980 by Addison-Wesley
Publishing Co., Inc. Reprinted by permission of Addison-
Wesley Longman, Inc.
Employee growth-need strength moderates the relationships.
Motivating Potential Score (MPS)Five dimensions combined
into a single predictive index of motivation.People who work on
jobs with high core dimensions are generally more motivated,
satisfied, and productive.Job dimensions operate through the
psychological states in influencing personal and work outcome
variables rather than influencing them directly.

While the JCM framework is supported by research, the MPS
model isn’t practical and doesn’t work well.
How Can Jobs Be Redesigned?Job RotationThe periodic shifting
of a worker from one task to another
Job EnlargementThe horizontal expansion of jobs
Job EnrichmentThe vertical expansion of jobs
Guidelines for Enriching a Job
E X H I B I T 7-2
Source: J.R. Hackman and J.L. Suttle, eds., Improving Life at
Work (Glenview, IL: Scott Foresman, 1977), p. 138.
Alternative Work ArrangementsFlextimeEmployees work during
a common core time period each day but have discretion in
forming their total workday from a flexible set of hours outside
the core.
Job SharingThe practice of having two or more people split a
40-hour-a-week job
E X H I B I T 7-3
Another Alternative: TelecommutingTelecommutingEmployees
do their work at home at least two days a week on a computer
that is linked to their office.The Virtual OfficeEmployees work

out of their home on a relatively permanent basis.Typical
Telecommuting JobsProfessional and other knowledge-related
tasksRoutine information-handling tasksMobile activities
Reasons for and against Telecommuting
Advantages Larger labor poolHigher productivityLess
turnoverImproved moraleReduced office-space costs
DisadvantagesEmployerLess direct supervision of
employeesDifficult to coordinate teamworkDifficult to evaluate
non-quantitative performanceEmployeeMay not be as noticed
for his or her efforts
Motivation Is Not the Whole Story
P = f(A x M x O)
Employee Involvement
A participative process that uses the input of employees to
increase their commitment to the organization’s success.
By increasing worker autonomy and control over work lives
(involvement), organizations:Increase employee motivationGain
greater organizational commitmentExperience greater worker
productivityObserve higher levels of job satisfaction
Types of Employee Involvement ProgramsParticipative
ManagementSubordinates share a significant degree of decision-
making power with their immediate superiorsRepresentative
ParticipationWorks councils

Groups of nominated or elected employees who must be
consulted for any personnel decisionsBoard representative
An employee sits on a company’s board of directors and
represents the interests of the firm’s employeesQuality CircleA
work group of employees who meet regularly to discuss their
quality problems, investigate causes, recommend solutions, and
take corrective actions
Motivational Theory Links to EI Programs
Four Major Strategic Reward Decisions
What to pay? (pay structure)
How to pay individuals? (variable pay plans and skill-based pay
plans)
What benefits to offer? Do we offer choice of benefits?
(flexible benefits)
How to build recognition programs?
1. What to Pay – Pay StructureInternal equityThe worth of the
job to the organizationDetermined by job evaluationsExternal
equityThe competitiveness of the company’s pay relative to pay
elsewhere in the industryDetermined through pay
surveysChoose organizational positionPay leaders
Greater employee loyalty
Attracts better-quality employeesPay laggards – accept high
turnover for low hourly costs
2. How to Pay - Variable Pay ProgramsTypes of Variable Pay

Programs
A portion of an employee’s pay is based on some individual
and/or organizational measure of performancePiece Rate:
Workers are paid a fixed sum for each unit of production
completed
Weakness: not feasible for many jobsMerit-Based:
Based on performance appraisal ratings
Gap increasing between average and top-performers
Weaknesses: validity of system based on annual appraisals, pay
pool can be small, unions strongly resistBonuses:
Rewards recent performance
Weakness: employees consider this a pay
2. How to Pay - Skill-Based Pay ProgramsTypes of Skill-Based
Programs:
Also known as competency- or knowledge-based pay - sets pay
based on skills or number of jobs an employee can
performProfit Sharing:
Organization-wide programs that distribute compensation based
on some established formula designed around a company’s
profitabilityGain Sharing:
An incentive plan in which improvements in group productivity
determine the total amount of money that is allocatedEmployee
Stock Ownership Plans (ESOPs)
Company-established benefit plans in which employees acquire
stock as part of their benefits
Evaluation of Variable and Skill-based Pay
To some extent, variable pay does increase motivation and
productivity
Benefits of Skill-based Pay PlansProvide staffing
flexibilityFacilitate communication across the

organizationLessen “protection of territory” behaviorsMeet the
needs of employees for advancementLead to performance
improvementsDrawbacks:Lack of additional learning
opportunitiesContinuing to pay employees for obsolete
skillsPaying for skills of no immediate use to the
organizationPaying for a skill, not for performance of the skill
3. What Benefits to Offer - Flexible Benefits
Employees tailor their benefit program to meet their personal
need by picking and choosing from a menu of benefit
options.Modular Plans Predesigned benefits packages for
specific groups of employeesCore-Plus PlansA core of essential
benefits and a menu-like selection of other benefit
optionsFlexible Spending Plans Allow employees to use their
tax-free benefit dollars to purchase benefits and pay service
premiums
4. How to Build Recognition ProgramsIntrinsic Rewards:
Stimulate Intrinsic Motivation Personal attention given to
employeeApproval and appreciation for a job well doneGrowing
in popularity and usageBenefits of ProgramsFulfill employees’
desire for recognitionInexpensive to implement Encourage
repetition of desired behaviorsDrawbacks of
ProgramsSusceptible to manipulation by management
Global ImplicationsJob Characteristics and Job
EnrichmentInconsistent results across
culturesTelecommutingU.S. does this more, but EU workers are
interested in itVariable PayNot much research available, but

some possible hypotheses on relationshipsFlexible BenefitsThis
concept is becoming more prevalent globallyEmployee
BenefitsPractices must be modified to match culture
Summary and Managerial ImplicationsTo Motivate
EmployeesRecognize individual differencesUse goals and
feedbackAllow employees to participate in decisions that affect
themLink rewards to performanceCheck the reward system for
equity
Attitudes and Job Satisfaction
should be able to:Contrast the three components of an
attitude.Summarize the relationship between attitudes and
behavior.Compare and contrast the major job attitudes.Define
job satisfaction and show how it can be measured.Summarize
the main causes of job satisfaction.Identify four employee
responses to dissatisfaction.Show whether job satisfaction is a
relevant concept in countries other than the United States.
Attitudes
Evaluative statements or judgments concerning objects, people,
or events.
Three components of an attitude:
The emotional or feeling segment of an attitude
The opinion or belief segment of an attitude
An intention to behave in a certain way toward someone or

something
Does Behavior Always Follow from Attitudes?
Leon Festinger – No, the reverse is sometimes true!
Cognitive Dissonance: Any incompatibility between two or
more attitudes or between behavior and attitudes
Individuals seek to reduce this uncomfortable gap, or
dissonance, to reach stability and consistency
Consistency is achieved by changing the attitudes, modifying
the behaviors, or through rationalization
Desire to reduce dissonance depends on:
Importance of elements
Degree of individual influence
Rewards involved in dissonance
Moderating Variables The most powerful moderators of the
attitude-behavior relationship are:Importance of the
attitudeCorrespondence to behaviorAccessibilityExistence of
social pressuresPersonal and direct experience of the attitude.
Predicting Behavior from AttitudesImportant attitudes have a
strong relationship to behavior.The closer the match between
attitude and behavior, the stronger the relationship:
Specific attitudes predict specific behavior
General attitudes predict general behaviorThe more frequently
expressed an attitude, the better predictor it is.High social
pressures reduce the relationship and may cause
dissonance.Attitudes based on personal experience are stronger
predictors.

What are the Major Job Attitudes?Job SatisfactionA positive
feeling about the job resulting from an evaluation of its
characteristicsJob InvolvementDegree of psychological
identification with the job where perceived performance is
important to self-worthPsychological EmpowermentBelief in the
degree of influence over the job, competence, job
meaningfulness, and autonomy
Another Major Job AttitudeOrganizational
CommitmentIdentifying with a particular organization and its
goals, while wishing to maintain membership in the
organization.Three dimensions:
Affective – emotional attachment to organization
Continuance Commitment – economic value of staying
Normative - moral or ethical obligationsHas some relation to
performance, especially for new employees.Less important now
than in past – now perhaps more of occupational commitment,
loyalty to profession rather than a given employer.
And Yet More Major Job Attitudes…Perceived Organizational
Support (POS)Degree to which employees believe the
organization values their contribution and cares about their
well-being.Higher when rewards are fair, employees are
involved in decision-making, and supervisors are seen as
supportive.High POS is related to higher OCBs and
performance.Employee EngagementThe degree of involvement
with, satisfaction with, and enthusiasm for the job.Engaged
employees are passionate about their work and company.

Are These Job Attitudes Really Distinct?No: these attitudes are
highly related.Variables may be redundant (measuring the same
thing under a different name)While there is some distinction,
there is also a lot of overlap.
Be patient, OB researchers are working on it!
Job SatisfactionOne of the primary job attitudes
measured.Broad term involving a complex individual summation
of a number of discrete job elements.How to measure?Single
global rating (one question/one answer) - BestSummation score
(many questions/one average) - OKAre people satisfied in their
jobs?In the U. S., yes, but the level appears to be
dropping.Results depend on how job satisfaction is
measured.Pay and promotion are the most problematic elements.
Pay influences job satisfaction only to a point.After about
$40,000 a year (in the U. S.), there is no relationship between
amount of pay and job satisfaction. Money may bring happiness,
but not necessarily job satisfaction.
Personality can influence job satisfaction.Negative people are
usually not satisfied with their jobs.Those with positive core
self-evaluation are more satisfied with their jobs.
Causes of Job Satisfaction
Employee Responses to Dissatisfaction

Active
Passive
Constructive
Destructive
Outcomes of Job SatisfactionJob PerformanceSatisfied workers
are more productive AND more productive workers are more
satisfied! The causality may run both ways.Organizational
Citizenship BehaviorsSatisfaction influences OCB through
perceptions of fairness.Customer SatisfactionSatisfied frontline
employees increase customer satisfaction and
loyalty.AbsenteeismSatisfied employees are moderately less
likely to miss work.
More Outcomes of Job SatisfactionTurnoverSatisfied employees
are less likely to quit.Many moderating variables in this
relationship.
Economic environment and tenure
Organizational actions taken to retain high performers and to
weed out lower performersWorkplace DevianceDissatisfied
workers are more likely to unionize, abuse substances, steal, be
tardy, and withdraw.
Despite the overwhelming evidence of the impact of job
satisfaction on the bottom line, most managers are either
unconcerned about or overestimate worker satisfaction.
Global Implications
Is Job Satisfaction a U. S. Concept?No, but most of the research

so far has been in the U. S.
Are Employees in Western Cultures More Satisfied With Their
Jobs?Western workers appear to be more satisfied than those in
Eastern cultures.Perhaps because Westerners emphasize positive
emotions and individual happiness more than do those in
Eastern cultures.
Summary and Managerial ImplicationsManagers should watch
employee attitudes: They give warnings of potential
problemsThey influence behaviorManagers should try to
increase job satisfaction and generate positive job
attitudesReduces costs by lowering turnover, absenteeism,
tardiness, theft, and increasing OCBFocus on the intrinsic parts
of the job: make work challenging and interestingPay is not
enough
Understanding Work Teams
should be able to:Analyze the growing popularity of teams in
organizations.Contrast groups and teams.Compare and contrast
four types of teams.Identify the characteristics of effective
teams.Show how organizations can create team players.Decide
when to use individuals isntead of teams.Show how our
understanding of teams differs in a global context.
Why Have Teams Become So Popular?

Great way to use employee talentsTeams are more flexible and
responsive to changes in the environmentCan quickly assemble,
deploy, refocus, and disbandFacilitate employee
involvementIncrease employee participation in decision
makingDemocratize an organization and increase
motivationNote: teams are not ALWAYS effective
Differences between Groups and Teams
Work GroupA group that interacts primarily to share
information and to make decisions to help each group member
perform within his or her area of responsibilityNo joint effort
requiredWork TeamGenerates positive synergy through
coordinated effort. The individual efforts result in a
performance that is greater than the sum of the individual inputs
Comparing Work Groups and Work Teams
E X H I B I T 10-1
2.bin
Types of TeamsProblem-Solving TeamsGroups of 5 to 12
employees from the same department who meet for a few hours
each week to discuss ways of improving quality, efficiency, and
the work environmentSelf-Managed Work TeamsGroups of 10
to 15 people who take on the responsibilities of their former
supervisors
3.bin

4.bin
More Types of TeamsCross-Functional TeamsEmployees from
about the same hierarchical level, but from different work areas,
who come together to accomplish a task
Very commonTask forcesCommittees
5.bin
A Final Type of TeamVirtual TeamsTeams that use computer
technology to tie together physically dispersed members in
order to achieve a common goalCharacteristicsLimited
socializingThe ability to overcome time and space constraintsTo
be effective, needs:Trust among membersClose monitoringTo be
publicized
A Team-Effectiveness Model
E X H I B I T 10-3
Caveat 1: This is a general guide only.
Caveat 2: The model assumes that teamwork is preferable to
individual work.
6.bin
7.bin
Key Components of Effective TeamsContextCompositionWork
DesignProcess Variables

Creating Effective Teams: ContextAdequate ResourcesNeed the
tools to complete the jobEffective Leadership and
StructureAgreeing to the specifics of work and how the team
fits together to integrate individual skillsEven “self-managed”
teams need leadersLeadership especially important in multi-
team systemsClimate of TrustMembers must trust each other
and the leaderPerformance and Rewards Systems that Reflect
Team ContributionsCannot just be based on individual effort
Creating Effective Teams: CompositionAbilities of
MembersNeed technical expertise, problem-solving, decision-
making, and good interpersonal skillsPersonality of
MembersConscientiousness, openness to experience, and
agreeableness all relate to team performanceAllocating Roles
and DiversityMany necessary roles must be filledDiversity can
often lead to lower performanceSize of TeamThe smaller the
better: 5 to 9 is optimalMember’s Preference for TeamworkDo
the members want to be on teams?
Key Roles On Teams
E X H I B I T 10-4
8.bin
Creating Effective Teams: Work Design
Freedom and AutonomyAbility to work independentlySkill
Variety Ability to use different skills and talentsTask

IdentityAbility to complete a whole and identifiable task or
productTask SignificanceWorking on a task or project that has a
substantial impact on others
Creating Effective Teams: ProcessCommitment to a Common
PurposeCreate a common purpose that provides directionHave
reflexivity: willing to adjust plan if necessaryEstablishment of
Specific Team GoalsMust be specific, measurable, realistic, and
challengingTeam EfficacyTeam believes in its ability to
succeedMental ModelsHave an accurate and common mental
map of how the work gets doneA Managed Level of
ConflictTask conflicts are helpful; interpersonal conflicts are
notMinimized Social LoafingTeam holds itself accountable both
individually and as a team
E X H I B I T 10-5
Turning Individuals into Team PlayersSelectionMake team
skills one of the interpersonal skills in the hiring
process.TrainingIndividualistic people can learnRewardsRework
the reward system to encourage cooperative efforts rather than
competitive (individual) onesContinue to recognize individual
contributions while still emphasizing the importance of
teamwork
Beware! Teams Aren’t Always the Answer
Teams take more time and resources than does individual
work.Three tests to see if a team fits the situation:
Is the work complex and is there a need for different
perspectives: will it be better with the insights of more than one
person?

Does the work create a common purpose or set of goals for the
group that is larger than the aggregate of the goals for
individuals?
Are members of the group involved in interdependent tasks?
Global ImplicationsExtent of TeamworkOther countries
use teams more often than does the U.S.
Self-Managed TeamsDo not work well in countries with low
tolerance for ambiguity and uncertainty and a high power
distance
Team Cultural Diversity and Team PerformanceDiversity caused
by national differences interferes with team efficiency, at least
in the short runAfter about three months the differences
between diverse and non-diverse team performance disappear
Summary and Managerial ImplicationsEffective teams have
common characteristics:Adequate resourcesEffective
leadershipA climate of trustAppropriate reward and evaluation
systemsComposed of members with correct skills and rolesAre
smallerDo work that provides freedom, autonomy, and the
chance to contributeThe tasks are whole and significantHas
members who believe in the team’s capabilitiesManagers should
modify the environment and select team-oriented individuals to
increase the chance of developing effective teams.
Chapter 8
Creativity

*
WELCOME
TO THE WORLD OF
CREATIVE SKILLS - ADSM
A REASONABLE PERSON ADAPTS HIMSELF/HERSELF
TO THE WORLD; (IN-BOX)
AN UNREASONABLE PERSON ADAPTS THE WORLD TO
HIMSELF/HERSELF. (OUT-0F-THE-BOX)
SO ALL THE PROGRESS DEPENDS ON THE
UNREASONABLE PERSON
This MBA programme aims at making you unreasonable
PERFORMANCE VERSES SYSTEMS
SYSTEMS
100 %
0 %
High
PERFORMANCE
Low
Reasonable
(Analytical)
Unreasonable
(Creative)
I Positive Traits
III Lateral Thinking

IIII Problem Solving
II Mental Blocks
CREATIVE SKILLS
Situations with no ready-made solutions
PROBLEMS Situations that call for extra efforts Sudden
deviations / Unexpected happeningsThings that are blocking our
way Situations where we don’t have control Situations where
there are risks involved Confusing situations Things not going
as per your wish Lack of resources
P R O B L E M
Symptoms: BOTHERATION / UNEASINESS /
WORRY / ANGER / FEAR /
SADNESS / TENSION / IRRITATION
A PROBLEM IS THE
DIFFERENCE BETWEEN
WHAT I HAVE AND
WHAT I WANT
B R A I N S
RIGHT
Imagination
Music
Rhythm

Color
Humor
Daydreaming
LEFT
Logic
Analysis
Language
Number
Reasoning
Reading
Writing
CLOSE-ENDED – Definite number of
RIGHT answers
NATURE OF PROBLEMSHow much you have to pay income
tax?Which is the capital of India?How much does the shirt
cost?How did it happen?
OPEN-ENDED – As many answers
- No RIGHT or WRONG
- More or less appropriate What are the

different ways by which we can reduce income-tax?
2 How can terrorism be eliminated?
3 How to bring down the electricity bill?
4 How can we increase customer satisfaction?
5 How to make India an honest country?
Which is more in number –
Open-ended or Close-ended ?
Among the problems,
how many of them are
of your own creation ?
ARE YOU LAZY?
LEFT ORIENTED RIGHT ORIENTED
Love structure, systems, Get a kick in breaking rules
orderliness, rules etc.
Like stability Love changes
Focus on “what” (words) Focus on “how” (body language,
tone etc.)
Left Thumb up Right thumb up
Right-eyed Left-eyed
Source is important Content (Not insisting on

evidence)
Want data / proof Go by gut feelings
LEFT ORIENTED RIGHT ORIENTED
Good memory Absentminded
Choose to be a physician Explorer
Make good team members Soloists
Yes, but Yes, and
Prefer algebra Prefer geometry
Love competition Thrive on freedom
Digital Analogue
(Right / Wrong)
WHAT IS CREATIVITY?
* CONCEIVING OF NEW IDEAS
* A TOOL FOR SURVIVOL
* LOOKING WHERE ALL HAVE LOOKED
AND SEEING WHAT NO ONE HAS SEEN
* CONSCIOUS ESCAPE FROM ROUTINE
* SHAKING HANDS WITH TOMORROW
* RELATING OF UNRELATED THINGS
* DOING WHAT OTHERS HAVE NOT DONE
* LISTENING FOR SMELLS
WHAT IS CREATIVITY?

* EXPECTING THE UNEXPECTED
* MAKING YOUR OWN PRODUCT OBSOLETE
WHAT IS CREATIVITY?
* DYNAMIC TENSION BETWEEN OPPOSING
FORCES
* NOT ACCEPTING THE EXISTING AS BEST
* CHALLENGING ACCEPTED THINGS
* BRINGING OUT PRODUCTS THAT
CONSUMERS DIDN’T KNOW THEY NEEDED
A Necessary Condition to the Development of Critical and
Creative Thinking is:
A Questioning Mind
Understanding the Mind of Isaac Newton At the age of 19
Newton drew up a list of questions under 45 headings. His title,
Questions, signaled his goal: to constantly question the nature
of matter, place, time, and motion. He worked hard to
understand the thinking of others working on his list of
problems. For example, he bought Descartes's Geometry and
read it by himself. After two or three pages, when he could
understand no further, “he began again and advanced farther and
continued doing so till he made himself master of the whole.”
Understanding the Mind of Albert Einstein
Einstein failed his entrance exam to Zurich Polytechnic. When

he finally passed (by attending a cram school) he did not want
to think about scientific problems for a year. His final exam was
so non-distinguished that afterward he was refused a post as an
assistant.
Thus critical thinking has a creative component: to produce a
better product of thought
And creative thinking has a critical component: to reshape
thinking in keeping with criteria of excellence.
Critical thinking without a creative output is merely negative
thinking. Creative thinking without a critical component is
merely novel thinking.
It is easy to be merely negative or novel in one’s thought.
Every genuine act of figuring out anything is a new making, a
new series of creative acts, however mundane.
To come to understand anything requires that the mind construct
new connections in the mind.
No one can be given knowledge or understanding; they must all
create or construct it for themselves.
Didactic teaching does not work because it violates the essential
conditions under which the mind learns by acts of construction
in the mind.
Didactic teaching refers to engaging students in the subject
being taught. This can be done through various methods like
diagrams, photos and pictures of what's being taught.

At even the most fundamental level of learning, at the earliest
age of learning, the learner must actively construct (create) to
learn.
We must abandon the notion that knowledge can be
“transmitted” without active creative construction on the part of
the learner.
At even the most fundamental level of learning, at the earliest
age of learning, the learner must actively assess its construction
to take genuine ownership.Am I being clear?Am I being
accurate?These are minimal criteria for the construction of
knowledge.
The essential need for criticality and creativity applies to the
work of the most humble student as well as that of the greatest
genius
If we study the development of the greatest minds Aristotle,
Beethoven, Curie, Da Vinci, Galileo, Michelangelo, Newton,
Einstein we will discover that each went through a period of
growth in which they internalized high standards of criticality
that played a significant role in the manner in which they went
about their later creative production.
Creativity in Entrepreneurship

What is creativity? Creative behaviors possessing an element of
newness, novelty, and difference.
Creativity is an act, an idea, or product that changes an existing
domain, or that transforms an existing domain into a new one,
and creative person is whose thoughts or actions bring these
changes.
What is creativity?Wallas’ description of creative thinking,
suggests a model in four stages:Preparation: problem
definitionIncubation: resting phase, subconscious
mindIllumination: idea of a solution comes to mindVerification:
solutions are tested
Creativity and InnovationCreativity leads to innovation
“Innovation is the specific instrument of entrepreneurship. The
act endows resources with a new capacity to create wealth.
Innovation, indeed, creates a resource.” (Drucker)
Entrepreneurship is all about innovation
Innovation is economic or social, rather than a technical term
Entrepreneurship“Entrepreneurship is a way of thinking,
reasoning and acting that is opportunity obsessed, holistic in
approach and leadership balanced.”
Entrepreneurial qualitiescommitment and determination,
leadership, opportunity obsession, tolerance of risk, ambiguity
and uncertainty, creativity, self-reliance and ability to adapt,
and the motivation to excel, ability to use failure experience as
a way of learning

Entrepreneurship and CreativityCreative in figuring out a way
to work in a joint venture
Creativity comes in writing an amazing sales letter or
visualizing the perfect logo
For practicing innovation, they need to be aware of change, and
creatively use it to their advantage The Unexpected,
Incongruities, Process Need, Industry and Market Structures,
Demographics, Changes in Perception, New Knowledge
(Drucker)
Entrepreneurship and CreativityTolerance for ambiguity is
related to certain entrepreneurial styles
“Creative destruction” procedures and destroys or reallocates
amassed resources
Creative in identifying the gap in the market and think up a
product
Nurturing Creativity Several techniques to encourage creative
thinking:Ask Questions, Lateral Thinking, Six Thinking Hats,
Brainstorming etc
Technology and business incubators“complete innovation
system” Provide financial, marketing and design support
Generation of new creative ideas and business plansjoint and
cross-disciplinary learning
Negotiating
Creative Negotiating, Stephen Kozicki, Adams Press, 1998
“Negotiating is the art of
reaching an agreement by

resolving differences
through creativity”
Negotiating Process
Style
Outcome
Principles
Style Style is a continuum between two styles:Quick
DeliberateMiddle is compromise
Quick Style Negotiate in a hurryUse when you won’t negotiate
with these people again Get the best deal without regard to the
other side’s “win”
Deliberate StyleUse when long term relationship likelyInvolves
cooperation and relationship building to reach agreementNeeds
much prep, hard workMay move in fits and starts

OutcomesRealistic Both sides satisfied, win/win
situationUsually results from deliberate styleAcceptable Likely
to result from quick styleSomething is better than nothing
Always ask for a better deal Worst When you’re too stubborn to
be flexibleUsually from quick style
Outcomes Predetermine the outcomes before you start
negotiations, you have a better chance of getting a better result
“Think carefully, think creatively, and think ahead”
PrinciplesThere are no rulesEstablish an agendaEverything is
negotiableAsk for a better dealBe creative Learn to say “NO”
yourself
Are you a Motivated
Negotiator?EnthusiasmConfidenceEngagedRecognitionAccompl
ishmentPat on the backIntegrityNo
trickeryTrustworthinessSocial SkillsEnjoy peopleInterest in
othersTeamworkBetter as a teamSelf-controlCreativityAlways
looking for ways to complete the deal
Negotiation ModelInvestigatePresentationBargainingAgreement

InvestigateWhat do you want?What does the other side
need?Decide on styleWhat are the consequences of each choice.
PresentationPrepare other side’s casePresent the reasons for
your side betterPlanning sheetIssues involvedRealistic,
possible, worst
“The” PresentationCreative titleReduce to “must know”
itemsKeywordsMini-speeches around keywordsVisualsDon’t
give concessions just to keep things goingMake note of
concerns and keep going
BargainingWhen in doubt, ask questions!Open
questionsReflective questionsTactics
TacticsUseWalk outDon’t use Emotional outburstArgue special
casePretend ignorancePlay for timeNibble and retreat“You go
first” Bad environmentDefer to higher authorityNot willing to
make any changes Silence Good guy/bad buy
Agreement

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