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Organizational effectiveness The ability of an organization to achieve its goals. Management The process of planning, organizing, leading, and controlling an organization’s human, financial, material, and other resources to increase its effectiveness. Manager Any person who supervises one or more subordinates. Top-management team High-ranking executives who plan a company’s strategy so that the company can achieve its goals. Chapter 1 Organizational Behavior and Management 11 behavior researchers, and the tools and techniques they have developed, to increase organizational effectiveness, the ability of an organization to achieve its goals. Management is the process of planning, organizing, leading, and controlling an organization’s human, financial, material, and other resources to increase its effectiveness. A manager is anybody who supervises one or more subordinates. Lou Gerstner, CEO of International Business Machines Corporation (IBM), for example, is IBM’s top manager; he has ultimate responsibility for all 150,000 of IBM’s employees. The sales manager of IBM’s southern region, who controls 300 salespeople, is also a manager, as is the manager (or supervisor) in charge of an IBM computer service center who supervises five service technicians. Managers at all levels confront the problem of understanding and managing the behavior of their subordinates. Gerstner has to manage IBM’s top-management team, high-ranking executives who plan the company’s strategy so that it can achieve its goals. The sales manager has to manage the sales force so that it sells the mix of mainframe, mini, and personal computers that best meet customers’ informationprocessing needs. The service manager has to manage technicians so that they respond promptly and courteously to customers’ appeals for help and quickly solve their problems. (Traditionally, IBM has been well known for its high-quality customer service and responsiveness.) Each of these managers faces the common challenge of finding ways to help the organization achieve its goals. A manager who understands how individual, group, and organizational characteristics affect work attitudes and behavior can begin to experiment to see whether changing one or more of these characteristics might increase the effectiveness of the organization and the individuals and groups that comprise it. The study of organizational behavior helps managers meet the challenge of improving organizational effectiveness by providing them with a set of tools: ■ ■ ■ A manager can work to raise a worker’s self esteem or beliefs about his or her ability to accomplish a certain task in order to increase the worker’s productivity or job satisfaction. A manager can change the reward system to change workers’ beliefs about the extent to which their rewards depend on their performance. A manager can change the design of a person’s job or the rules and procedures for doing the job to reduce costs, make the task more enjoyable, or make the task easier to perform. Managerial Functions and Roles As we mentioned earlier, the four principal functions or duties of management are planning, organizing, leading, and controlling human, financial, material, and other resources to allow an organization to achieve its goals. 7 And, as our examples showed, managers knowledgeable about organizational behavior are in a good position to improve their ability to perform these functions (see Figure 1.3). Planning Deciding how best to allocate and use resources to achieve organizational goals. Planning. In planning, managers establish their organization’s strategy—that is, they decide how best to allocate and use resources to achieve organizational goals. At Southwest Airlines, for example, CEO Herb Kelleher’s strategy is based on the goal of providing customers with low-priced air travel. 8 To accomplish this goal, Southwest uses its resources efficiently. For example, Southwest uses only one kind of plane, the Boeing 737, to keep down operating, training, and maintenance costs; employees cooperate and share jobs when necessary to keep down costs; and its use of the Internet is state of the art and one of the easiest to use in the industry.
12 Chapter 1 Organizational Behavior and Management FIGURE 1.3 Four Functions of Management Planning is a complex and difficult task because a lot of uncertainty normally surrounds the decisions managers need to make. Because of this uncertainty, managers face risks when deciding what actions to take. A knowledge of organizational behavior can help improve the quality of decision making, increase the chances of success, and lessen the risks inherent in planning and decision making. First, the study of organizational behavior reveals how decisions get made in organizations and how politics and conflict affect the planning process. Second, the way in which group decision making affects planning and the biases that can influence decisions are revealed. Third, the theories and concepts of organizational behavior show how the composition of an organization’s top-management team can affect the planning process. The study of organizational behavior, then, can improve a manager’s planning abilities and increase organizational performance. Organizing Establishing a structure of relationships that dictate how members of an organization work together to achieve organizational goals. Leading Encouraging and coordinating individuals and groups so that all organizational members are working to achieve organizational goals. Organizing. In organizing, managers establish a structure of relationships that dictate how members of an organization work together to achieve organizational goals. Organizing involves grouping workers into groups, teams, or departments according to the kinds of tasks they perform. At IBM, for example, service technicians are grouped into a service operation department, and salespeople are grouped into the sales department. In the NUMMI example, we saw how workers were grouped into self-managed work groups, and in Schlumberger how virtual teams are used. Organizational behavior offers many guidelines on how to organize employees (the organization’s human resources) to make the best use of their skills and capabilities. In later <strong>chapter</strong>s, we discuss various methods of grouping workers to enhance communication and coordination while avoiding conflict or politics. At Southwest Airlines, for example, although employees are members of particular departments (pilots, flight attendants, baggage handlers), they are expected to perform one another’s nontechnical jobs when needed. Leading. In leading, managers encourage workers to do a good job (work hard, produce high-quality products) and coordinate individuals and groups so that all organizational members are working to achieve organizational goals. The study of different leadership methods and of how to match leadership styles to the characteristics of the organization and all its components is a major concern of organizational behavior. At Southwest Airlines, for example, Herb Kelleher and his managers join
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