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Organisational Behavior Notes

Management Notes > Organisational Behaviour (MG102) Notes

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Organisational Behaviour Notes

LECTURE 1: PERSONALITY Personality: A relatively stable set of characteristics that influence an individual's behaviour Two Approaches to Studying Personality: 1) Idiographic Theories
- Personality not a fixed construct ---> constant development
- Individual are unique
- Ongoing experience is crucial for development
- Measurement and comparison make no sense 2) Nomothetic Theories
- Personality is fixed ---> largely inherited, resistant to change
- Possible to measure, compare and predict behaviour
- Can be sorted into types (a descriptive label) or traits (predispositions to behave in a certain way) Fit type, possess trait Types ---> groups people in categories with common behavioural patterns Type A

Type B

High need for achievement

Low need for achievement


Passive, doesn't lose temper


Laid-back, enjoys leisure


Easy going, slow paced



Constantly feels under pressure

Doesn't usually feel pressure



Traits ---> correlated set of behaviours

* 5 Factor Model (extraversion, agreeableness, conscientiousness, openness to experience, neuroticism)
- E positively correlated with satisfaction, leader performance, leadership effectiveness (Judge et al, 2002) and performance (Hurtz & Donovan, 2000)
- A positively correlated with all but low correlation performance, leader emergence
- C positively correlated with all
- O positively correlated to all, low correlation with satisfaction and performance
- N negatively correlated to all, low with performance
- Varies between job type (Hurtz & Donovan) sales/customer service/management

* Other traits
- Locus of control (internal vs external) ---> internal higher job satisfaction &
performance (Judge & Bono, 2001)
- Self-efficacy (capability, influenced by previous success) ---> high self-efficacy higher goals, persistence, less anxiety in adversity (Bandura, 1997)
- Self-monitoring (response to behavioural cues) ---> high better promotion prospects (Mehra et al. 2001)

Organisational Behaviour Notes

* Evaluation
Molar not molecular (over time not on a particular day)
Even if situations affect traits, its still relative to others (Funder, 2001)
Increasing evidence of stability of personality (twin/longutidinal studies)
- Too simplistic --> personality is dynamic
- Ignores moderators (situational factors)
- Does not consider mediators (how to get from trait to outcome)
- Value judgements inherent in descriptors (e.g. bold vs rash)
- How do distinguish between good and bad traits Factors Affecting Behaviour: Nature


Attributed to biology/genetics

Attributed to environment/cultures

- 17% of leadership ability is predicted by genetic differences (O'Connor & Jackson, 2010)
- Extraversion linked to dopamine levels (Smillie et al. 2011)
- Leadership emergence associated with serotonin (Ilies et al, 2004)

- If the situation is strong enough, people will act the same regardless of personality (Milgram shock experiment, Zimbardo's Stanford prison study)
- Compared with situational influences, personality accounts for minimal variance in behaviour (Swann &
Seyle, 2005)

Implications for organisation

* If person-job fit and person-organisation fit overlap allows for promotions, better motivation, job satisfaction etc.

* Personality Tests in Hiring
- Norm-reference measures (compare to peers)
- Criterion-referenced measurement (compare to ideal)
- Tests need to be reliable & valid
- Objective vs projective tests
- Faking personality tests Readings:

* The Dark Side of Bright Traits (Judge & LePine, 2007)
- All traits have upsides and downsides depending on context ---> important for hiring, can't be too focused on 'bright traits' (o, c, e, a and low n), dark traits include n, impulsivity, trait hostility, type A personality
- Parallel aggregate effects (how traits interact with each other), how they interact with stress Positive






Less conformity



Self-deception, adapting

Overestimate effectiveness



I High reward sensitivity






Define/control work




Cope w/ conflict

Type A



Organisational Behaviour Notes

* Use of Personality Measures in Personnel Selection (Rothstein & Goffin, 2006)
- 30% US companies use tests --> improve employee fit, reduce turnover rate
- Conscientiousness best predictor of job performance, other dimensions also useful
- Moderator and mediator (e.g. goal setting behaviors) effects can explain the relatively low correlations found between personality measures and job performance criteria
- FFM provides framework for studying link between personality and work related behaviour (individual and group)
- Faking personality tests --> lower when warning added that answers will be verified

* Predicting work role performance from FFM (Neal et al, 2012)
- Work place behaviour: adaptivity and proactivity
- O +ve correlation with individual and organisational proactivity but negatively to team and organisational proactivity
- A -ve correlation with individual proactivity
- C & N predict both adaptability and proactivity
- E -ve correlation to individual proficiency
- Broad personality traits not good predictors of adaptivity, should focus on constructs, attitudes, experience and motivation

Organisational Behaviour Notes

LECTURE 2: PERCEPTION AND DECISION MAKING Interest in P&DM sparked from cognitive revolution ---> focus on how people think, perceive, remember, learn (preceded by behaviourism)

1) Perception

* Optical illusions (e.g. Young girl-Old woman illusion)
- Cognitive illusions affect how we make judgements and decisions (e.g. evaluations of people are affected by comparisons with other people recently encountered)
- Conformation bias (difficult to see things from different points of view, 'primed' to view things in a particular way)

* Bounded awareness
- People systematically overlook critical, easily accessible and relevant information
- When we focus on one thing, may missed important information in the periphery
- Invisible Gorilla (Chabris & Simons, 2010) 50% missed gorillas
- Simons & Levin (1998) Door Study 50% did not realise person changed
- Wolfe, Horowitz and Kenner (2005) Screening for weapons study, much higher error rate when dangers object appear less (50% appearance, 7% error; 1%
appearance, 30% error rate)

* Susceptible to focusing on illusions

* When make decision should consider all relevant data, consider whether focus is too narrow/if information is potentially missing 2) Decision Making

* Behavioural Model of Decision Making (Kahneman, 2013; Simon, 1945)
- Informational overload and bounded rationality
- Decision heuristics ("automatic" vs. "reflective") ---> mental rule of thumb
- "Biases" in decision making

* Prospect Theory (Kahneman & Tversky, 1979; Thaler, 1980)
- People make decisions based on the potential value of losses and gains rather than the final outcome, people evaluate these losses and gains using heuristics
- If a decision is taken to avoid a loss it will be bolder/more aggressive than decision to receive a gain
- Risk averse: If risk is framed as a gain, you are likely to avoid it
- Risk-loving: If risk is framed as a loss, you are likely to seek it
- Fryer et al (2012) field experiment to improve quality of teaching --> prepaid vs tradition bonuses; prepaid perform better as they feel that have something to lose

* Overconfidence: The 'Above Average' Effect (Illusory Superiority)
- Cognitive bias: people overestimate +ve qualities and underestimate -ve qualities relative to peers
- 87% Stanford MBA Students rated academic performance above median (Zuckerman & Jost, 2001)
- Task difficulty (easier task above average, harder below; Kruger, 1999)

Organisational Behaviour Notes

* Bounded Ethicality
- Systematic and predictable ways in which humans act unethically beyond their own awareness
- Influences ability to judge own ethicality and perceive others' unethical behaviour
- Implicit Attitude Test (IAT) measures unconscious association: online time association test, demonstrates subconscious stereotypes
- Milkman et al. (2012) Subjects received email from prospective doctoral students requesting 10 min meeting, name signals identity (gender/race), timing of meeting now vs later (no difference in now, later shown in table)

* Cognitive judgements often bias (illusions, bounded awareness)

* Accurately assessing extent of own bias is extremely difficult - overconfidence, implicit associations, other biases (e.g., confirmation, availability, etc.)

* When a decision is important, employ as many de-biasing techniques as possible (time to consider, expert opinions, collect/rely on data, familiarise self with pitfalls) Readings:

* How (Un)ethical Are You? (Banaji, 2003)
- Four sources of unintentional unethical decision making

1. Implicit forms of prejudice:

* Bias from unconscious beliefs due to association of commonly linked images/

* IAT - detects subtle shift in reactions times

* Costly as exclude qualified people from jobs and have economical/social costs (Price Waterhouse v. Hopkins)

2. In-Group Favouritism:

* Bias favours own group (nationality, social class, race, employer, alma-mater)

* Results in discrimination against minorities, positive if in favour unethical if not (i.e. favouritism towards own race vs hostility towards others)

* Can result in damaging publicity if found in organisations (i.e. mortgage firm)

3. Conflict of Interest:

* Bias favours those who can benefit you

* Can skew decision making (e.g. physician accepts payment for referring patients to clinical trials)

4. Tendency to Overclaim Credit

* Bias favours self

* Tend to overrate individual contribution to group ---> overblown entitlement

* Can destabilise alliances

* Reduces performance/longevity of groups --> -ve effect employee commitment

Organisational Behaviour Notes

* Judgement under Uncertainty: Heuristic and Biases (Tversky & Kahneman, 1982)
- Heuristic principles help reduce complex tasks to simpler judgement operations
- Can result in severe and system errors due to biases
- Common mistakes due to:

* Representativeness: assess whether people will fit into a category by degree they fit with stereotype (due to misconceptions of chance, misconceptions of regression towards mean, insensitivity of prior probability and sample size)

* Availability: situation in which people assess probability by ease which instances of occurrence are brought to mind (due to biases to retrievability of instances, effectiveness of search set, imaginability and illusory correlation)

* Adjusting and anchoring: make estimates by starting from initial value and adjusting to yield to final answer (problems due to insufficient adjustment, biases in evaluation of conjunctive and disjunctive events)
- Useful heuristics retained despite faults as they are usually effective, however surprising people to do no infer common problems with experience

* Understanding and Using the IAT (Greenwald et al, 2009)
- Measures time taken to pair words & images (faster ---> less bias)
- IAT measures typically display good internal consistency, not influence by wide variation in subjects' familiarity with IAT stimuli, relatively insensitive to procedural variation, high test-retest reliability (0.56), resistant to faking (automatically activated associations)
- Need to investigate ability of IAT to predict relevant social behaviour
- IAT and self-report measures should be used jointly as predictors of behaviour
- High validity of IAT measure for socially sensitive topics compared to self-report

Organisational Behaviour Notes

LECTURE 3: MOTIVATION: REWARDS Motivation: A set of internal and external forces that mediate behaviour; 3 key elements affected by motivation - intensity (how much effort), direction (towards specific goal), persistence (long time) 1) Theory X & Theory Y (McGregor, 1960)

Theory X - Focuses on extrinsic motivation (tangible reward given by external source) Theory Y - Focuses on intrinsic motivation (psychological reward from inside person) 2) Content Theories (What motivates people)

* Alderfer's ERG Theory
- Based on Maslow's hierarchy of needs
- Growth: Desires for continued growth and development (self-actualisation)
- Relatedness: Desires for satisfying interpersonal relationships (social)
- Existence: Desires for psychological and material well-being (physiological/safety)
- Sometimes gravitated to specific spheres more than other/neglect aspects --->
- Not necessarily progression (can jump from one to another)
- Little evidence for theory

* Herzberg's Two Factor Theory
- People are influenced by 2 factors: motivators and hygiene factors
- Hygiene factors prevent dissatisfaction but not cause satisfaction (neutral state)
- However lumps satisfactions &
motivation together, which is not necessarily true

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