Organizational Behaviour Course Text Book

16 CHAPTER 1 What Is Organizational Behavior?

OB Poll Working in Good Times—and Bad

“Thinking about the job situation in America today, would you say that it is now a
good time or a bad time to find a quality job?”

100 Bad 54 48 69 86 89 86
90 Good 41 47
80 26 20 8 11
70 59 2006 2007 2008 2009 2010 2011
60 57
50 38
40
30 39 2005
20
10
0
2004

Source: Gallup tracking polls of random samples of roughly 1,000 adults, aged 18 and older, living in the continental U.S., selected using
random-digit telephone sampling. See F. Newport, “Americans’ Views of Job Market Improve; Still Mostly Negative” (April 18, 2011),
www.gallup.com.

between good and bad management reflects the difference between making a lot
of money and making a lot more money. When times are bad, though, manag-
ers are on the front lines with employees who must be fired, who are asked to
make do with less, and who worry about their futures. The difference between
good and bad management can be the difference between profit and loss or, ulti-
mately, between survival and failure.

Consider Enterprise Rent-A-Car. The company prided itself on never hav-
ing laid off a U.S. employee in its 51-year history. Even in the 2001–2002 re-
cession after the 9/11 terrorist attacks, Enterprise kept hiring. In 2008–2009,
however, Enterprise was forced to lay off more than a thousand employees.
“These types of declines are unprecedented,” said Patrick Farrell, Enterprise’s
vice president of corporate responsibility. Gentex Corp, a Michigan-based auto
parts supplier, had never had a layoff in its 34-year history—until 2008–2009.
“We didn’t even have a layoff policy,” said Gentex’s vice president of human
resources.15

Managing employees well when times are tough is just as hard as when times
are good—if not more so. But the OB approaches sometimes differ. In good
times, understanding how to reward, satisfy, and retain employees is at a premium.
In bad times, issues like stress, decision making, and coping come to the fore.

Responding to Globalization

Organizations are no longer constrained by national borders. Burger King
is owned by a British firm, and McDonald’s sells hamburgers in Moscow.
ExxonMobil, a so-called U.S. company, receives almost 75 percent of its revenues
from sales outside the United States. New employees at Finland-based phone
maker Nokia are increasingly being recruited from India, China, and other
developing countries—non-Finns now outnumber Finns at Nokia’s renowned
research center in Helsinki. And all major automobile makers now manufacture
cars outside their borders; Honda builds cars in Ohio, Ford in Brazil, Volkswagen
in Mexico, and both Mercedes and BMW in South Africa.

The world has become a global village. In the process, the manager’s job has
changed.

Challenges and Opportunities for OB 17

Increased Foreign Assignments If you’re a manager, you are increasingly
likely to find yourself in a foreign assignment—transferred to your employer’s
operating division or subsidiary in another country. Once there, you’ll have
to manage a workforce very different in needs, aspirations, and attitudes from
those you are used to back home.

Working with People from Different Cultures Even in your own country,
you’ll find yourself working with bosses, peers, and other employees born and
raised in different cultures. What motivates you may not motivate them. Or
your communication style may be straightforward and open, which others may
find uncomfortable and threatening. To work effectively with people from dif-
ferent cultures, you need to understand how their culture, geography, and re-
ligion have shaped them and how to adapt your management style to their
differences.

Managers at global companies such as McDonald’s, Disney, and Coca-Cola
have come to realize that economic values are not universally transferable.
Management practices need to be modified to reflect the values of the different
countries in which an organization operates.

Overseeing Movement of Jobs to Countries with Low-Cost Labor It’s increas-
ingly difficult for managers in advanced nations, where minimum wages are
typically $6 or more an hour, to compete against firms that rely on workers
from China and other developing nations where labor is available for 30 cents
an hour. It’s not by chance that many in the United States wear clothes made
in China, work on computers whose microchips came from Taiwan, and watch
movies filmed in Canada. In a global economy, jobs tend to flow where lower
costs give businesses a comparative advantage, though labor groups, politicians,
and local community leaders see the exporting of jobs as undermining the job
market at home. Managers face the difficult task of balancing the interests of
their organization with their responsibilities to the communities in which they
operate.

In the global economy, jobs tend Source: Henning Kaiser/Getty Images
to shift from developed nations to
countries where lower labor costs

give firms a comparative advan-
tage. In this photo, an employee
wearing a sign on his head reading
“Capital Interests” joins co-workers

at a Nokia factory in Germany
to protest the company’s deci-
sion of terminating mobile phone
production at the plant, resulting
in the loss of 2,300 jobs. Nokia
announced plans to shift produc-
tion from Germany to Romania,

where labor costs are lower.

18 CHAPTER 1 What Is Organizational Behavior?

Managing Workforce Diversity

One of the most important challenges for organizations is adapting to people
who are different. We describe this challenge as workforce diversity. Whereas glo-
balization focuses on differences among people from different countries, work-
force diversity addresses differences among people within given countries.

Workforce diversity acknowledges a workforce of women and men; many ra-
cial and ethnic groups; individuals with a variety of physical or psychological abili-
ties; and people who differ in age and sexual orientation. Managing this diversity
is a global concern. Most European countries have experienced dramatic growth
in immigration from the Middle East, Argentina and Venezuela host a significant
number of migrants from other South American countries, and nations from
India to Iraq to Indonesia find great cultural diversity within their borders.

The most significant change in the U.S. labor force during the last half of
the twentieth century was the rapid increase in the number of female workers.
In 1950, for instance, only 29.6 percent of the workforce was female. By 2008,
it was 46.5 percent. The first half of the twenty-first century will be notable for
changes in racial and ethnic composition and an aging baby boom genera-
tion. By 2050, Hispanics will grow from today’s 11 percent of the workforce
to 24 percent, blacks will increase from 12 to 14 percent, and Asians from
5 to 11 percent. Meanwhile, in the near term the labor force will be aging.
The 55-and-older age group, currently 13 percent of the labor force, will in-
crease to 20 percent by 2014.

Though we have more to say about workforce diversity in the next chapter,
suffice it to say here that it presents great opportunities and poses challenging
questions for managers and employees in all countries. How can we leverage
differences within groups for competitive advantage? Should we treat all employ-
ees alike? Should we recognize individual and cultural differences? How can we
foster cultural awareness in employees without lapsing into political correctness?
What are the legal requirements in each country? Does diversity even matter?

Improving Customer Service

American Express recently turned Joan Weinbel’s worst nightmare into a non-
event. It was 10:00 p.m. Joan was home in New Jersey, packing for a weeklong
trip, when she suddenly realized she had left her AmEx Gold card at a restau-
rant in New York City earlier in the evening. The restaurant was 30 miles away.
She had a flight to catch at 7:30 the next morning, and she wanted her card
for the trip. She called American Express. The phone was quickly answered
by a courteous and helpful AmEx customer service representative who told
Ms. Weinbel not to worry. He asked her a few questions and told her, “Help is
on the way.” To say Joan was flabbergasted when her doorbell rang at 11:45 p.m.
is an understatement—it was less than 2 hours after her call. At the door was a
courier with a new card. How the company was able to produce the card and
get it to her so quickly still puzzles Joan, but she said the experience made her
a customer for life.

Today, the majority of employees in developed countries work in service
jobs, including 80 percent in the United States. In Australia, 73 percent work
in service industries. In the United Kingdom, Germany, and Japan, the per-
centages are 69, 68, and 65, respectively. Service jobs include technical sup-
port representatives, fast-food counter workers, sales clerks, waiters and
waitresses, nurses, automobile repair technicians, consultants, credit represen-
tatives, financial planners, and flight attendants. The common characteristic
of these jobs is substantial interaction with an organization’s customers. And
because an organization can’t exist without customers—whether it is American

Challenges and Opportunities for OB 19

The Ritz Carlton Hotel Company Source: ITAR - TASS / Anton Tushin / Newscom
is recognized worldwide as the
gold standard of the hospitality

industry. Its motto—“We are ladies
and gentlemen serving ladies and
gentlemen”—is exemplified by
the employee shown here serv-
ing a guest on the summer terrace
of the Ritz-Carlton Moscow. The
Ritz-Carlton’s customer-responsive
culture, which is articulated in
the company’s motto, credo, and
service values, is designed to build
strong relationships that create
guests for life.

Express, L. L. Bean, a law firm, a museum, a school, or a government agency—
management needs to ensure employees do what it takes to please customers.16
At Patagonia—a retail outfitter for climbers, mountain bikers, skiers and board-
ers, and other outdoor fanatics—customer service is the store manager’s most
important general responsibility: “Instill in your employees the meaning and
importance of customer service as outlined in the retail philosophy, ‘Our store
is a place where the word “no” does not exist’; empower staff to ‘use their
best judgment’ in all customer service matters.”17 OB can help managers at
Patagonia achieve this goal and, more generally, can contribute to improving
an organization’s performance by showing managers how employee attitudes
and behavior are associated with customer satisfaction.

Many an organization has failed because its employees failed to please custom-
ers. Management needs to create a customer-responsive culture. OB can provide
considerable guidance in helping managers create such cultures—in which em-
ployees are friendly and courteous, accessible, knowledgeable, prompt in respond-
ing to customer needs, and willing to do what’s necessary to please the customer.18

Improving People Skills

As you proceed through the chapters of this book, we’ll present relevant con-
cepts and theories that can help you explain and predict the behavior of peo-
ple at work. In addition, you’ll gain insights into specific people skills that you

workforce diversity The concept that
organizations are becoming more
heterogeneous in terms of gender,
age, race, ethnicity, sexual orientation,
and inclusion of other diverse groups.

20 CHAPTER 1 What Is Organizational Behavior?

can use on the job. For instance, you’ll learn ways to design motivating jobs,
techniques for improving your listening skills, and how to create more effec-
tive teams.

Stimulating Innovation and Change

Whatever happened to Montgomery Ward, Woolworth, Smith Corona, TWA,
Bethlehem Steel, and WorldCom? All these giants went bust. Why have other
giants, such as General Motors, Sears, Boeing, and Lucent Technologies, im-
plemented huge cost-cutting programs and eliminated thousands of jobs? The
answer is to avoid going broke.

Today’s successful organizations must foster innovation and master the art
of change, or they’ll become candidates for extinction. Victory will go to the
organizations that maintain their flexibility, continually improve their quality,
and beat their competition to the marketplace with a constant stream of inno-
vative products and services. Domino’s single-handedly brought on the demise
of small pizza parlors whose managers thought they could continue doing what
they had been doing for years. Amazon.com is putting a lot of independent
bookstores out of business as it proves you can successfully sell books (and most
anything else) from a Web site. After years of lackluster performance, Boeing re-
alized it needed to change its business model. The result was its 787 Dreamliner
and a return to being the world’s largest airplane manufacturer.

An organization’s employees can be the impetus for innovation and change,
or they can be a major stumbling block. The challenge for managers is to stimu-
late their employees’ creativity and tolerance for change. The field of OB pro-
vides a wealth of ideas and techniques to aid in realizing these goals.

Coping with “Temporariness”

Globalization, expanded capacity, and advances in technology have required orga-
nizations to be fast and flexible if they are to survive. The result is that most manag-
ers and employees today work in a climate best characterized as “temporary.”

Workers must continually update their knowledge and skills to perform new
job requirements. Production employees at companies such as Caterpillar, Ford,
and Alcoa now need to operate computerized production equipment. That
was not part of their job descriptions 20 years ago. In the past, employees were
assigned to a specific work group, gaining a considerable amount of security
working with the same people day in and day out. That predictability has been
replaced by temporary work groups, with members from different departments,
and the increased use of employee rotation to fill constantly changing work as-
signments. Finally, organizations themselves are in a state of flux. They contin-
ually reorganize their various divisions, sell off poorly performing businesses,
downsize operations, subcontract noncritical services and operations to other
organizations, and replace permanent employees with temporary workers.

Today’s managers and employees must learn to cope with temporariness,
flexibility, spontaneity, and unpredictability. The study of OB can help you
better understand a work world of continual change, overcome resistance to
change, and create an organizational culture that thrives on change.

Working in Networked Organizations

Networked organizations allow people to communicate and work together
even though they may be thousands of miles apart. Independent contractors
can telecommute via computer to workplaces around the globe and change
employers as the demand for their services changes. Software programmers,
graphic designers, systems analysts, technical writers, photo researchers, book

Challenges and Opportunities for OB 21

Dr. Orit Wimpfheimer performs her Source: AP Photo/Emilio Morenatti
job by linking to others through

networks. Shown here at her home
office near Jerusalem, Israel, she
is a radiologist who analyzes test

results from hospitals in the United
States over the Internet. Networked

organizations that use e-mail, the
Internet, and video-conferencing
allow Dr. Orit Wimpfheimer and
other telecommuters to commu-

nicate and work together even
though they are thousands of miles

apart. The manager’s job in a net-
worked organization requires dif-
ferent techniques from those used
when workers are physically pres-

ent in a single location.

and media editors, and medical transcribers are just a few examples of people
who can work from home or other nonoffice locations.

The manager’s job is different in a networked organization. Motivating and
leading people and making collaborative decisions online requires different
techniques than when individuals are physically present in a single location. As
more employees do their jobs by linking to others through networks, managers
must develop new skills. OB can provide valuable insights to help with honing
those skills.

Helping Employees Balance Work–Life Conflicts

The typical employee in the 1960s or 1970s showed up at a specified workplace
Monday through Friday and worked for clearly defined 8- or 9-hour chunks of
time. That’s no longer true for a large segment of today’s workforce. Employees
are increasingly complaining that the line between work and nonwork time
has become blurred, creating personal conflicts and stress.19 At the same time,
today’s workplace presents opportunities for workers to create and structure
their own roles.

How do work–life conflicts come about? First, the creation of global orga-
nizations means the world never sleeps. At any time on any day, thousands of
General Electric employees are working somewhere. The need to consult with
colleagues or customers eight or ten time zones away means many employees of
global firms are “on call” 24 hours a day. Second, communication technology
allows many technical and professional employees to do their work at home,
in their cars, or on the beach in Tahiti—but it also means many feel like they
never really get away from the office. Third, organizations are asking employees
to put in longer hours. Over a recent 10-year period, the average U.S. workweek
increased from 43 to 47 hours; and the number of people working 50 or more
hours a week jumped from 24 to 37 percent. Finally, the rise of the dual-career
couple makes it difficult for married employees to find time to fulfill commit-
ments to home, spouse, children, parents, and friends. Millions of single-parent
households and employees with dependent parents have even more significant
challenges in balancing work and family responsibilities.

22 CHAPTER 1 What Is Organizational Behavior?

Employees increasingly recognize that work infringes on their personal
lives, and they’re not happy about it. Recent studies suggest employees want
jobs that give them flexibility in their work schedules so they can better manage
work–life conflicts.20 In fact, balancing work and life demands now surpasses job
security as an employee priority.21 The next generation of employees is likely to
show similar concerns.22 Most college and university students say attaining a bal-
ance between personal life and work is a primary career goal; they want “a life”
as well as a job. Organizations that don’t help their people achieve work–life
balance will find it increasingly difficult to attract and retain the most capable
and motivated employees.

As you’ll see in later chapters, the field of OB offers a number of suggestions
to guide managers in designing workplaces and jobs that can help employees
deal with work–life conflicts.

Creating a Positive Work Environment

Although competitive pressures on most organizations are stronger than ever,
some organizations are trying to realize a competitive advantage by fostering a
positive work environment. Jeff Immelt and Jim McNerney, both disciples of
Jack Welch, have tried to maintain high-performance expectations (a charac-
teristic of GE’s culture) while fostering a positive work environment in their
organizations (GE and Boeing). “In this time of turmoil and cynicism about
business, you need to be passionate, positive leaders,” Mr. Immelt recently told
his top managers.

A real growth area in OB research is positive organizational scholarship
(also called positive organizational behavior), which studies how organizations
develop human strengths, foster vitality and resilience, and unlock potential.
Researchers in this area say too much of OB research and management prac-
tice has been targeted toward identifying what’s wrong with organizations and
their employees. In response, they try to study what’s good about them.23 Some
key independent variables in positive OB research are engagement, hope, opti-
mism, and resilience in the face of strain.

Positive organizational scholars have studied a concept called “reflected
best-self”—asking employees to think about when they were at their “personal
best” in order to understand how to exploit their strengths. The idea is that
we all have things at which we are unusually good, yet too often we focus
on addressing our limitations and too rarely think about how to exploit our
strengths.24

Although positive organizational scholarship does not deny the value of the
negative (such as critical feedback), it does challenge researchers to look at OB
through a new lens and pushes organizations to exploit employees’ strengths
rather than dwell on their limitations.

Improving Ethical Behavior

In an organizational world characterized by cutbacks, expectations of increas-
ing productivity, and tough competition, it’s not surprising many employees
feel pressured to cut corners, break rules, and engage in other questionable
practices.

Increasingly they face ethical dilemmas and ethical choices, in which they are
required to identify right and wrong conduct. Should they “blow the whistle”
if they uncover illegal activities in their company? Do they follow orders with
which they don’t personally agree? Should they give an inflated performance
evaluation to an employee they like, knowing it could save that employee’s job?
Do they “play politics” to advance their career?

Coming Attractions: Developing an OB Model 23

What constitutes good ethical behavior has never been clearly defined, and,
in recent years, the line differentiating right from wrong has blurred. Employees
see people all around them engaging in unethical practices—elected officials
pad expense accounts or take bribes; corporate executives inflate profits so they
can cash in lucrative stock options; and university administrators look the other
way when winning coaches encourage scholarship athletes to take easy courses.
When caught, these people give excuses such as “Everyone does it” or “You
have to seize every advantage nowadays.” Determining the ethically correct way
to behave is especially difficult in a global economy because different cultures
have different perspectives on certain ethical issues.25 Fair treatment of employ-
ees in an economic downturn varies considerably across cultures, for instance.
As we’ll see in Chapter 2, perceptions of religious, ethnic, and gender diversity
differ across countries. Is it any wonder employees are expressing decreased
confidence in management and increasing uncertainty about what is appropri-
ate ethical behavior in their organizations?26

Managers and their organizations are responding to the problem of unethi-
cal behavior in a number of ways.27 They’re writing and distributing codes of
ethics to guide employees through ethical dilemmas. They’re offering seminars,
workshops, and other training programs to try to improve ethical behaviors.
They’re providing in-house advisors who can be contacted, in many cases anony-
mously, for assistance in dealing with ethical issues, and they’re creating protec-
tion mechanisms for employees who reveal internal unethical practices.

Today’s manager must create an ethically healthy climate for his or her em-
ployees, where they can do their work productively with minimal ambiguity about
what right and wrong behaviors are. Companies that promote a strong ethical
mission, encourage employees to behave with integrity, and provide strong ethi-
cal leadership can influence employee decisions to behave ethically.28 In upcom-
ing chapters, we’ll discuss the actions managers can take to create an ethically
healthy climate and help employees sort through ethically ambiguous situations.
We’ll also present ethical-dilemma exercises at the end of each chapter that allow
you to think through ethical issues and assess how you would handle them.

Coming Attractions: Developing an OB Model

8 Compare the three levels We conclude this chapter by presenting a general model that defines the field
of analysis in this book’s of OB, stakes out its parameters, and identifies inputs, processes, and outcomes.
OB model. The result will be “coming attractions” of the topics in the remainder of this book.

An Overview

A model is an abstraction of reality, a simplified representation of some real-
world phenomenon. Exhibit 1-4 presents the skeleton on which we will con-
struct our OB model. It proposes three types of variables (inputs, processes, and

positive organizational scholarship An ethical dilemmas and ethical model An abstraction of reality.
area of OB research that concerns how choices Situations in which A simplified representation of some
organizations develop human strength, individuals are required to define right real-world phenomenon.
foster vitality and resilience, and
unlock potential. and wrong conduct.

24 CHAPTER 1 What Is Organizational Behavior?

An Ethical Choice

Can You Learn from Failure?

M istakes happen in business “If I had more time and resources, they “avoid gripping [the phone] in
all the time, but most people would I make the same decision?” the lower left corner.” Steve Jobs
have a powerful motivation 2. Recognize that failure is not al- called the problem a “non-issue.”
to try to cover up their errors as much ways bad. Most of us would agree Only later did Apple address the
as possible. However, not recognizing that we have learned more in life root cause of the problem—and fix
and learning from failures might be the from our mistakes than from our suc- it. When you make an error, try to
most dangerous failure of all because cesses. So, we need to realize that understand what caused it.
it means the problem is likely to occur while we don’t want to fail, it does 4. Reward owning up. If you make a
again. This means that, even though have a hidden gift if we’re willing to mistake, be willing to speak up and
it might be hard to admit it, doing receive—a chance to learn some- admit it. Too often we dig ourselves
the right thing often means admitting thing important. Eli Lilly holds “failure deeper into a hole by being de-
when you’ve done the wrong thing. parties” to honor drug trials and ex- fensive about mistakes. That also
Most people would say that we have periments that fail to achieve the de- keeps us from learning from our
an ethical obligation to learn from sired results. The rationale for these failures. If we all make mistakes,
mistakes, but how can we do that? parties is to recognize that when little what are we being so defensive
In a recent special issue in Harvard is ventured, little is lost, but little is about?
Business Review on failures, experts gained too. Procter & Gamble CEO
argued that learning from mistakes A. G. Lafley argues that very high Given the complexity of human behav-
relies on several strategies, which success rates show incremental ior, we’ll never avoid making mistakes
include: innovation—but what he wants are entirely. Indeed, a healthy appreciation
game changers. He has celebrated for how mistake-prone we are is one
1. Heed pressure. High pressure of- P&G’s 11 most expensive product of the points of this chapter (and of
ten provokes faulty thinking. BP failures, focusing on what the com- Chapter 6). But we can do a better job
faced enormous pressure from pany learned from each. So don’t be of admitting our mistakes and learning
cost overruns—roughly $1 million afraid to admit mistakes—and ask from them when they occur.
a day—in its deepwater oil explo- “What can I learn” from each.
rations. This led its managers to 3. Understand and address the root Sources: A. C. Edmondson, “Strategies
miss warning signs that led to the cause. When Apple introduced the for Learning from Failure,” Harvard Business
catastrophic explosion in the Gulf iPhone 4 in 2010, many customers Review 89, no. 4 (2011), pp.  48–55;
of Mexico in 2010. Similar time complained about dropped calls. R. G. Mcgrath, “Failing by Design,”
and cost pressures precipitated the Apple first responded by suggest- Harvard Business Review 89, no. 4 (2011),
ill-fated Challenger and Columbia ing the problem lay in the way cus- pp.  76–83; C. H. Tinsley, R. L. Dillon, and
space shuttle launches. In high- tomers held the phones, suggested P. M. Madsen, “How to Avoid Catastrophe,”
pressure situations, ask yourself, Harvard Business Review 89, no. 4 (2011),
pp. 90–97.

outcomes) at three levels of analysis (individual, group, and organizational).
The model proceeds from left to right, with inputs leading to processes and
processes leading to outcomes. Notice that the model also shows that outcomes
can influence inputs in the future.

Inputs

Inputs are the variables like personality, group structure, and organizational
culture that lead to processes. These variables set the stage for what will occur
in an organization later. Many are determined in advance of the employment
relationship. For example, individual diversity characteristics, personality, and
values are shaped by a combination of an individual’s genetic inheritance and
childhood environment. Group structure, roles, and team responsibilities are

Coming Attractions: Developing an OB Model 25

Exhibit 1-4 A Basic OB Model

Inputs Processes Outcomes

Individual Level Individual Level Individual Level
• Diversity • Emotions and moods • Attitudes and stress
• Personality • Motivation • Task performance
• Values • Perception • Citizenship behavior
• Decision making • Withdrawal behavior
Group Level
• Group structure Group Level Group Level
• Group roles • Communication • Group cohesion
• Team responsibilities • Leadership • Group functioning
• Power and politics
Organizational Level • Conflict and negotiation Organizational Level
• Structure • Productivity
• Culture Organizational Level • Survival
• Human resource

management
• Change practices

typically assigned immediately before or after a group is formed. Finally, organi-
zational structure and culture are usually the result of years of development and
change as the organization adapts to its environment and builds up customs
and norms.

Processes

If inputs are like the nouns in organizational behavior, processes are like verbs.
Processes are actions that individuals, groups, and organizations engage in as
a result of inputs and that lead to certain outcomes. At the individual level,
processes include emotions and moods, motivation, perception, and decision
making. At the group level, they include communication, leadership, power
and politics, and conflict and negotiation. Finally, at the organizational level,
processes include human resource management and change practices.

Outcomes

Outcomes are the key variables that you want to explain or predict, and that
are affected by some other variables. What are the primary outcomes in OB?
Scholars have emphasized individual-level outcomes like attitudes and satisfac-
tion, task performance, citizenship behavior, and withdrawal behavior. At the
group level, cohesion and functioning are the dependent variables. Finally, at
the organizational level we look at overall profitability and survival. Because
these outcomes will be covered in all the chapters, we’ll briefly discuss each
here so you can understand what the “goal” of OB will be.

input Variables that lead to processes. processes Actions that individuals, outcomes Key factors that are
groups, and organizations engage in affected by some other variables.
as a result of inputs and that lead to
certain outcomes.

26 CHAPTER 1 What Is Organizational Behavior?

Attitudes and Stress Employee attitudes are the evaluations employees make,
ranging from positive to negative, about objects, people, or events. For exam-
ple, the statement, “I really think my job is great,” is a positive job attitude, and
“My job is boring and tedious” is a negative job attitude. Stress is an unpleasant
psychological process that occurs in response to environmental pressures.

Some people might think that influencing employee attitudes and stress is
purely soft stuff, and not the business of serious managers, but as we will show,
attitudes often have behavioral consequences that directly relate to organiza-
tional effectiveness. The belief that satisfied employees are more productive
than dissatisfied employees has been a basic tenet among managers for years,
though only now has research begun to support it. Ample evidence shows that
employees who are more satisfied and treated fairly are more willing to engage
in the above-and-beyond citizenship behavior so vital in the contemporary busi-
ness environment. A study of more than 2,500 business units also found that
those scoring in the top 25 percent on the employee opinion survey were, on
average, 4.6 percent above their sales budget for the year, while those scoring in
the bottom 25 percent were 0.8 percent below budget. In real numbers, this was
a difference of $104 million in sales per year between the two groups.

Task Performance The combination of effectiveness and efficiency at doing
your core job tasks is a reflection of your level of task performance. If we think
about the job of a factory worker, task performance could be measured by the
number and quality of products produced in an hour. The task performance of
a teacher would be the level of education that students obtain. The task perfor-
mance of a consultant might be measured by the timeliness and quality of the
presentations they offer to the client firm. All these types of performance relate
to the core duties and responsibilities of a job and are often directly related to
the functions listed on a formal job description.

Obviously task performance is the most important human output contribut-
ing to organizational effectiveness, so in every chapter we devote considerable
time to detailing how task performance is affected by the topic in question.

Task performance is one of the
primary individual-level outcomes

in organizational behavior. For
these women who install wiring in

car doors at the General Motors’
assembly plant in Lordstown, Ohio,

task performance is measured by
the number and quality of the work

they produce. Their level of task
performance is related to the duties
of their job and how effectively and
efficiently they perform them. Task
performance is the most important
human output contributing to orga-

nizational effectiveness.

Source: AP Photo/Mark Duncan

Coming Attractions: Developing an OB Model 27

Citizenship Behavior The discretionary behavior that is not part of an
employee’s formal job requirements, and that contributes to the psychologi-
cal and social environment of the workplace, is called citizenship behavior.
Successful organizations need employees who will do more than their usual job
duties—who will provide performance beyond expectations. In today’s dynamic
workplace, where tasks are increasingly performed by teams and flexibility is
critical, employees who engage in “good citizenship” behaviors help others
on their team, volunteer for extra work, avoid unnecessary conflicts, respect
the spirit as well as the letter of rules and regulations, and gracefully tolerate
occasional work-related impositions and nuisances.

Organizations want and need employees who will do things that aren’t in
any job description. Evidence indicates organizations that have such employees
outperform those that don’t. As a result, OB is concerned with citizenship be-
havior as an outcome variable.

Withdrawal Behavior We’ve already mentioned behavior that goes above and
beyond task requirements, but what about behavior that in some way is below
task requirements? Withdrawal behavior is the set of actions that employees take
to separate themselves from the organization. There are many forms of with-
drawal, ranging from showing up late or failing to attend meetings to absentee-
ism and turnover.

Employee withdrawal can have a very negative effect on an organization.
The cost of employee turnover alone has been estimated to run into the thou-
sands of dollars, even for entry-level positions. Absenteeism also costs organiza-
tions significant amounts of money and time every year. For instance, a recent
survey found the average direct cost to U.S. employers of unscheduled absences
is 8.7 percent of payroll.29 In Sweden, an average of 10 percent of the country’s
workforce is on sick leave at any given time.30

It’s obviously difficult for an organization to operate smoothly and attain its
objectives if employees fail to report to their jobs. The work flow is disrupted,
and important decisions may be delayed. In organizations that rely heavily on
assembly-line production, absenteeism can be considerably more than a disrup-
tion; it can drastically reduce the quality of output or even shut down the facility.
Levels of absenteeism beyond the normal range have a direct impact on any orga-
nization’s effectiveness and efficiency. A high rate of turnover can also disrupt the
efficient running of an organization when knowledgeable and experienced per-
sonnel leave and replacements must be found to assume positions of responsibility.

All organizations, of course, have some turnover. The U.S. national turnover
rate averages about 3 percent per month, about a 36 percent turnover per year.
This average varies a lot by occupation, of course; the monthly turnover rate for
government jobs is less than 1 percent, versus 5 to 7 percent in the construc-
tion industry.31 If the “right” people are leaving the organization—the marginal
and submarginal employees—turnover can actually be positive. It can create an
opportunity to replace an underperforming individual with someone who has
higher skills or motivation, open up increased opportunities for promotions,

task performance The combination of citizenship behavior Discretionary withdrawal behavior The set of
effectiveness and efficiency at doing behavior that contributes to the actions employee take to separate
your core job tasks. psychological and social environment themselves from the organization.
of the workplace.

28 CHAPTER 1 What Is Organizational Behavior?

and bring new and fresh ideas to the organization.32 In today’s changing world
of work, reasonable levels of employee-initiated turnover improve organiza-
tional flexibility and employee independence, and they can lessen the need for
management-initiated layoffs.

So why do employees withdraw from work? As we will show later in the book,
reasons include negative job attitudes, emotions and moods, and negative inter-
actions with co-workers and supervisors.

Group Cohesion Although many outcomes in our model can be conceptual-
ized as individual level phenomena, some relate to how groups operate. Group
cohesion is the extent to which members of a group support and validate one
another at work. In other words, a cohesive group is one that sticks together.
When employees trust one another, seek common goals, and work together to
achieve these common ends, the group is cohesive; when employees are divided
among themselves in terms of what they want to achieve and have little loyalty to
one another, the group is not cohesive.

There is ample evidence showing that cohesive groups are more effective.33
These results are found both for groups that are studied in highly controlled
laboratory settings and also for work teams observed in field settings. This fits
with our intuitive sense that people tend to work harder in groups that have
a common purpose. Companies attempt to increase cohesion in a variety of
ways ranging from brief icebreaker sessions to social events like picnics, parties,
and outdoor adventure-team retreats. Throughout the book we will try to assess
whether these specific efforts are likely to result in increases in group cohesive-
ness. We’ll also consider ways that picking the right people to be on the team in
the first place might be an effective way to enhance cohesion.

Group Functioning In the same way that positive job attitudes can be associ-
ated with higher levels of task performance, group cohesion should lead to posi-
tive group functioning. Group functioning refers to the quantity and quality of
a group’s work output. In the same way that the performance of a sports team
is more than the sum of individual players’ performance, group functioning in
work organizations is more than the sum of individual task performances.

What does it mean to say that a group is functioning effectively? In some
organizations, an effective group is one that stays focused on a core task and
achieves its ends as specified. Other organizations look for teams that are able
to work together collaboratively to provide excellent customer service. Still
others put more of a premium on group creativity and the flexibility to adapt to
changing situations. In each case, different types of activities will be required to
get the most from the team.

Productivity The highest level of analysis in organizational behavior is the or-
ganization as a whole. An organization is productive if it achieves its goals by
transforming inputs into outputs at the lowest cost. Thus productivity requires
both effectiveness and efficiency.

A hospital is effective when it successfully meets the needs of its clientele. It is effi-
cient when it can do so at a low cost. If a hospital manages to achieve higher output
from its present staff by reducing the average number of days a patient is confined
to bed or increasing the number of staff–patient contacts per day, we say the hos-
pital has gained productive efficiency. A business firm is effective when it attains
its sales or market share goals, but its productivity also depends on achieving those
goals efficiently. Popular measures of organizational efficiency include return on
investment, profit per dollar of sales, and output per hour of labor.

Service organizations must include customer needs and requirements in as-
sessing their effectiveness. Why? Because a clear chain of cause and effect runs

Coming Attractions: Developing an OB Model 29

Exhibit 1-5 The Plan of the Book

The Individual The Group The Organization

Inputs Inputs Inputs
• Diversity in Organizations • Group structures • Structure (Ch. 15)
• Culture (Ch. 16)
(ch.2) (Ch. 9 & 10)
• Personality and Values • Group roles (Ch. 9 & 10) Processes
• Team responsibilities • Human resource
(ch. 5)
(Ch. 9 & 10) management (Ch. 17)
Processes • Change practices
• Emotions and moods (ch. 4) Processes
• Motivation (Ch. 7 and 8) • Communication (Ch. 11) (Ch. 18)
• Perception and decision • Leadership (Ch. 12)
• Power and polities (Ch. 13) Outcomes
making (Ch. 6) • Conflict and negotiation • Profitability

Outcomes (Ch. 14) (Ch. 16 & 17)
• Attitudes (ch. 3) & stress • Survival
Outcomes
(ch. 18) • Group collesion (Ch. 16 & 17)
• Task performance (all)
• Citizenship behavior (all) (Ch. 9 & 10)
• Withdrawal behavior (all) • Group functioning

(Ch. 9 & 10)

from employee attitudes and behavior to customer attitudes and behavior to a
service organization’s productivity. Sears has carefully documented this chain.34
The company’s management found that a 5 percent improvement in employee
attitudes leads to a 1.3 percent increase in customer satisfaction, which in turn
translates into a 0.5 percent improvement in revenue growth. By training em-
ployees to improve the employee–customer interaction, Sears was able to im-
prove customer satisfaction by 4 percent over a 12-month period, generating an
estimated $200 million in additional revenues.

Survival The final outcome we will consider is organizational survival, which
is simply evidence that the organization is able to exist and grow over the long
term. The survival of an organization depends not just on how productive the
organization is, but also on how well it fits with its environment. A company
that is very productively making goods and services of little value to the mar-
ket is unlikely to survive for long, so survival factors in things like perceiving
the market successfully, making good decisions about how and when to pursue
opportunities, and engaging in successful change management to adapt to new
business conditions.

Having reviewed the input, process, and outcome model, we’re going to
change the figure up a little bit by grouping topics together based on whether we
study them at the individual, group, or organizational level. As you can seen in
Exhibit 1-5, we will deal with inputs, processes, and outcomes at all three levels of

group cohesion The extent to which productivity The combination of the efficiency The degree to which an
members of a group support and effectiveness and efficiency of an organization can achieve its ends at a
validate one another while at work. organization. low cost.

group functioning The quantity and effectiveness The degree to which organizational survival The degree to
quality of a work group’s output. an organization meets the needs of its which an organization is able to exist
clientele or customers. and grow over the long term.

30 CHAPTER 1 What Is Organizational Behavior?

glOBalization!

Does National Culture Affect Organizational Practices?

Companies  that  operate  in  more propose that managers need to make single country, there can be a great
than one country face a challeng- a concerted effort to adapt their orga- deal of variation in values and norms.
ing dilemma: how much should nizational culture to match the culture The development of practices to match
they tailor organizational practices like of the countries in which they operate. a culture is fraught with problems of
leadership style, rewards, and commu- These authors note that within any stereotyping and over-generalizing
nication to each country’s culture? To country, there is a great deal of simi- about the degree to which everyone
some extent, it is necessary to change larity in management practices that is in a given country shares the same
the way a company does business likely the result of culture or values. values. These authors also note that
because of differences in regulations, If a country’s basic outlook is highly in tailoring practices to each country, a
institutions, and labor force character- individualistic, then organizational cul- firm loses the potential value of having
istics. For example, a U.S. company ture should also emphasize individual a unifying organizational culture. From
that operates in Germany will have to contributions and efforts. Conversely, this perspective, companies should try
contend with laws requiring greater if national culture values collectivism, as much as possible to create a strong
worker participation in decision then organizational culture should culture that operates across borders to
making, and an Australian company emphasize group contributions and create a unified global workforce.
operating in China will have to match cohesiveness. From this perspective,
the knowledge and skills found in successful international management Sources: Based on B. Gerhart, “How
the Chinese workforce. Despite is all about tailoring management prac- Much Does National Culture Constrain
certain limitations imposed by law tices and values to fit with the cultural Organizational Culture,” Management
and situational factors, managers still values of each country in which the and Organization Review 5, no. 2 (2009),
need to make many decisions about company operates. pp. 241–259; A. S. Tsui, S. S. Nifadkar,
adjusting their organizational culture to and A. Y. Ou, “Cross-national, Cross-
match the culture of the countries in On the other hand, some propose cultural Organizational Behavior Research:
which they operate. that national culture should not, and Advances, Gaps, and Recommendations,”
does not, make much difference in Journal of Management 33, no. 3 (2007),
There are no simple responses shaping organizational culture. These pp. 426-478; G. Johns, “The Essential
to this dilemma. Some researchers researchers note that even within a Impact of Context on Organizational
Behavior,” Academy of Management
Review 31, no. 2 (2006), pp. 386–408.

analysis, but we group the chapters as shown here to correspond with the typical
ways that research has been done in these areas. It is easier to understand one
unified presentation about how personality leads to motivation which leads to
performance, than to jump around levels of analysis. Because each level builds
on the one that precedes it, after going through them in sequence you will have
a good idea of how the human side of organizations functions.

Summary and Implications for Managers

Managers need to develop their interpersonal, or people, skills to be effec-
tive in their jobs. Organizational behavior (OB) investigates the impact that
individuals, groups, and structure have on behavior within an organization,
and it applies that knowledge to make organizations work more effectively.
Specifically, OB focuses on how to improve productivity; reduce absenteeism,

Summary and Implications for Managers 31

Lost in Translation?

POINT COUNTERPOINT

Walk into your nearest major bookstore. You’ll undoubt- Organizations are always looking for leaders, and man-
edly find a large selection of books devoted to manage- agers and manager-wannabes are continually looking
ment and managing. Consider the following recent titles: for ways to hone their leadership skills. Publishers re-
spond to this demand by offering hundreds of titles that prom-
● Tough Cookies: What 100 Years of the Girl Scouts Can Teach ise insights into managing people. Books like these can provide
You (Wiley, 2011) people with the secrets to management that others know about.
Moreover, isn’t it better to learn about management from people
● From Wags to Riches: How Dogs Teach Us to Succeed in in the trenches, as opposed to the latest esoteric musings from
Business & Life (BenBella Books, 2011) the “Ivory Tower”? Many of the most important insights we gain
from life aren’t necessarily the product of careful empirical re-
● All I Know About Management I Learned from My Dog: search studies.
The Real Story of Angel, a Rescued Golden Retriever,
Who Inspired the New Four Golden Rules of Management It is true there are some bad books out there. But do they
(Skyhorse Publishing, 2011) outnumber the esoteric research studies published every year?
For example, a couple of recent management and organiza-
● Mother Teresa, CEO: Unexpected Principles for Practical tional behavior studies were published in 2011 with the follow-
Leadership (Berrett-Koehler Publishers, 2011) ing titles:

● Polar Bear Pirates and Their Quest to Engage the ● Training for Fostering Knowledge Co-Construction from
Sleepwalkers: Motivate Everyday People to Deliver Collaborative Inference-Drawing
Extraordinary Results (Capstone, 2011)
● The Factor Structure and Cross-Test Convergence of the
● Winnie-the-Pooh on Management: In Which a Very Mayer–Salovey–Caruso Model of Emotional Intelligence
Important Bear and His Friends Are Introduced to a Very
Important Subject (Penguin, 2011) ● Refining Value-Based Differentiation in Business Relationships:
A Study of the Higher Order Relationship Building Blocks that
● Chicken Lips, Wheeler-Dealer, and the Beady-Eyed M.B.A.: Influence Behavioural Intentions
An Entrepreneurs Wild Adventures on the New Silk Road
(Wiley, 2011) ● A Dialogical Approach to the Creation of New Knowledge in
Organizations
● Bodybuilders in Tutus: and 35 Other Obscure Business-
Boosting Observations (Robinwood Press, 2011) We don’t mean to poke fun at these studies. Rather, our point is
that you can’t judge a book by its cover any more than you can a
● I’ll Make You an Offer You Can’t Refuse: Insider Business research study by its title.
Tips from a Former Mob Boss (Thomas Nelson, 2011)
There is no one right way to learn the science and art of
● The Art of War from SmarterComics: How to be Successful managing people in organizations. The most enlightened man-
in Any Competition (Writers of The Round Table Press, 2011) agers are those who gather insights from multiple sources: their
own experience, research findings, observations of others,
Popular books on organizational behavior often have cute and, yes, business press books, too. If great management were
titles and are fun to read, but they make the job of managing produced by carefully gleaning results from research studies,
people seem much simpler than it is. Most are based on the academicians would make the best managers. How often do we
author’s opinions rather than substantive research, and it is see that?
doubtful that one person’s experience translates into effective
management practice for everyone. Why do we waste our time Research and academics have an important role to play in
on “fluff” when, with a little effort, we can access knowledge understanding effective management. But it isn’t fair to con-
produced from thousands of scientific studies on human behav- demn all business books by citing the worst (or, at least, the
ior in organizations? worse-sounding ones).

Organizational behavior is a complex subject. Few, if any,
simple statements about human behavior are generalizable to
all people in all situations. Should you really try to apply lead-
ership insights you got from a book about Geronimo or Tony
Soprano to managing software engineers in the twenty-first
century?

32 CHAPTER 1 What Is Organizational Behavior?

turnover, and deviant workplace behavior; and increase organizational citi-
zenship behavior and job satisfaction. Here are a few specific implications for
managers:

● Some generalizations provide valid insights into human behavior, but
many are erroneous. Organizational behavior uses systematic study to
improve predictions of behavior over intuition alone.

● Because people are different, we need to look at OB in a contingency frame-
work, using situational variables to explain cause-and-effect relationships.

● Organizational behavior offers specific insights to improve a manager’s
people skills.

● It helps managers to see the value of workforce diversity and practices
that may need to be changed in different countries.

● It can improve quality and employee productivity by showing managers
how to empower their people, design and implement change programs,
improve customer service, and help employees balance work–life conflicts.

● It can help managers cope in a world of temporariness and learn how to
stimulate innovation.

● Finally, OB can guide managers in creating an ethically healthy work
climate.

MyManagementLab

Now that you have finished this chapter, go back to www.mymanagementlab.com to continue
practicing and applying the concepts you’ve learned.

QUESTIONS FOR REVIEW 5 What are the major behavioral science disciplines that

1 What is the importance of interpersonal skills? contribute to OB?
2 What do managers do in terms of functions, roles,
6 Why are there few absolutes in OB?
and skills? 7 What are the challenges and opportunities for

3 What is organizational behavior (OB)? managers in using OB concepts?
4 Why is it important to complement intuition with
8 What are the three levels of analysis in this book’s
systematic study?
OB model?

EXPERIENTIAL EXERCISE Workforce Diversity

Purpose She earns $40,000 per year at her job and receives
To learn about the different needs of a diverse workforce. another $3,600 per year in child support from her
ex-husband.
Time Required
Approximately 40 minutes. Ethel is a 72-year-old widow. She works 25 hours
per week at an hourly wage of $8.50 to supplement
Participants and Roles her $8,000 annual pension and earns a total of
Divide the class into six groups of approximately equal $19,000 per year.
size. Assign each group one of the following roles:
John is a 34-year-old born in Trinidad who is now a
Nancy is 28 years old. The divorced mother of three U.S. resident. He is married and the father of two
children ages 3, 5, and 7, she is the department head. small children. John attends college at night and is

Ethical Dilemma 33

within a year of earning his bachelor’s degree. His ● Life insurance:
salary is $27,000 per year. His wife is an attorney and Plan A ($25,000 coverage) ϭ $500
earns approximately $50,000 per year. Plan B ($50,000 coverage) ϭ $1,000
Plan C ($100,000 coverage) ϭ $2,000
Lu is 26 years old and single with a master’s degree Plan D ($250,000 coverage) ϭ $3,000
in education. He is paralyzed and confined to a
wheelchair as a result of an auto accident. He earns ● Mental health plan ϭ $500
$32,000 per year.
● Prepaid legal assistance ϭ $300
Maria is a single, 22-year-old woman born and raised
in Mexico. She came to the United States only ● Vacation ϭ 2 percent of annual pay for each week, up
3 months ago, and her English needs considerable to 6 weeks a year
improvement. She earns $20,000 per year.
● Pension at retirement equal to approximately 50 per-
Mike is a 16-year-old high school sophomore who cent of final annual earnings ϭ $1,500
works 15 hours per week after school and during
vacations. He earns $7.20 per hour, or approximately ● 4-day workweek during the 3 summer months
$5,600 per year. (available only to full-time employees) ϭ 4 percent
of annual pay
The members of each group are to assume the character
consistent with their assigned role. ● Day care services (after company contribution) ϭ
$2,000 for all of an employee’s children, regardless
Background of number
The six participants work for a company that has recently
installed a flexible benefits program. Instead of the tra- ● Company-provided transportation to and from
ditional “one benefit package fits all,” the company is work ϭ $750
allocating an additional 25 percent of each employee’s
annual pay to be used for discretionary benefits. Those ● College tuition reimbursement ϭ $1,000
benefits and their annual cost are as follows:
● Language class tuition reimbursement ϭ $500
● Supplementary health care for employee:
Plan A (no deductible and pays 90 percent) ϭ $3,000 The Task
Plan B ($200 deductible and pays 80 percent) ϭ 1. Each group has 15 minutes to develop a flexible
$2,000 benefits package that consumes 25 percent
Plan C ($1,000 deductible and pays 70 percent) ϭ $500 (and no more!) of its character’s pay.

● Supplementary health care for dependents (same 2. After completing step 1, each group appoints a
deductibles and percentages as above): spokesperson who describes to the entire class the
Plan A ϭ $2,000 benefits package the group has arrived at for its
Plan B ϭ $1,500 character.
Plan C ϭ $500
3. The entire class then discusses the results. How did
● Supplementary dental plan ϭ $500 the needs, concerns, and problems of each partici-
pant influence the group’s decision? What do the
results suggest for trying to motivate a diverse
workforce?

Source: Special thanks to Professor Penny Wright (San Diego State University) for her suggestions during
the development of this exercise.

ETHICAL DILEMMA Jekyll and Hyde

Let’s assume you have been offered a job by Jekyll bright. Several other graduates of your program work at
Corporation, a company in the consumer products indus- Jekyll Corporation, and they speak quite positively of the
try. The job is in your chosen career path. company and promise to socialize and network with you
once you start.
Jekyll Corporation has offered you a position that
would begin 2 weeks after you graduate. The job respon- As a company, Jekyll Corporation promotes itself as a
sibilities are appealing to you, make good use of your fair-trade and sustainable organization. Fair trade is a trad-
training, and are intrinsically interesting. The company ing partnership—based on dialogue, transparency, and
seems well positioned financially, and you have met the respect—that seeks greater equity in international trade.
individual who would be your supervisor, who assures you It contributes to sustainable development by offering
that the future prospects for your position and career are better trading conditions to, and securing the rights of,

34 CHAPTER 1 What Is Organizational Behavior?

local producers and businesses. Fair-trade organizations Gabriel a different number than your “internal” num-
are actively engaged in supporting producers and sustain- ber violate Jekyll Corporation’s transparent culture?
able environmental farming practices, and fair-trade prac- Why or why not?
tices prohibit child or forced labor.
2. Assume you’ve received another offer, this one from
Yesterday, Gabriel Utterson—a human resources man- Hyde Associates. Like the Jekyll job, this position is
ager at Jekyll Corporation—called you to discuss initial on your chosen career path and in the consumer
terms of the offer, which seemed reasonable and standard products industry. Assume, however, that you’ve read
for the industry. However, one aspect was not mentioned, in the news that “Hyde Associates has been criticized for
your starting salary. Gabriel said Jekyll is an internally trans- unsustainable manufacturing practices that may be harm-
parent organization—there are no secrets. While the firm ful to the environment. It has further been criticized for un-
very much wants to hire you, there are limits to what it can fair trade practices and for employing underage children.”
afford to offer, and before it makes a formal offer, it was Would that change whether you’d be willing to take
reasonable to ask what you would expect. Gabriel wanted the job? Why or why not?
you to think about this and call back tomorrow.
3. These scenarios are based on studies of Corporate
Before calling Gabriel, you thought long and hard Social Responsibility (CSR) practices that show con-
about what it would take to accept Jekyll Corporation’s sumers generally charge a kind of rent to companies
offer. You have a number in mind, which may or may not that do not practice CSR. In other words, they gen-
be the same number you give Gabriel. What starting salary erally expect a substantial discount in order to buy
would it take for you to accept Jekyll Corporation’s offer? a product from Hyde rather than from Jekyll. For
example, if Jekyll and Hyde sold coffee, people would
Questions pay a premium of $1.40 to buy coffee from Jekyll and
1. What starting salary will you give Gabriel? What sal- demand a discount of $2.40 to buy Hyde coffee. Do
ary represents the minimum offer you would accept? you think this preference translates into job choice
If these two numbers are different, why? Does giving decisions? Why or why not?

CASE INCIDENT 1 “Lessons for ‘Undercover’ Bosses”

Executive offices in major corporations are often far re- of successful Swedish organizations revealed that MBWA
moved from the day-to-day work that most employees per- was an approach common to several firms that received
form. While top executives might enjoy the perquisites national awards for being great places to work.
found in the executive suite, and separation from workday
concerns can foster a broader perspective on the business, The popular television program Undercover Boss took
the distance between management and workers can come MBWA to the next level by having top executives from
at a real cost: top managers often fail to understand the companies like Chiquita Brands, DirectTV, Great Wolf
ways most employees do their jobs every day. The dangers Resorts, and NASCAR work incognito among line em-
of this distant approach are clear. Executives sometimes ployees. Executives reported that this process taught them
make decisions without recognizing how difficult or im- how difficult many of the jobs in their organizations were,
practical they are to implement. Executives can also lose and just how much skill was required to perform even the
sight of the primary challenges their employees face. lowest-level tasks. They also said the experience taught
them a lot about the core business in their organizations
The practice of “management by walking around” and sparked ideas for improvements.
(MBWA) works against the insularity of the executive
suite. To practice MBWA, managers reserve time to walk Although MBWA has long had its advocates, it does
through departments regularly, form networks of acquain- present certain problems. First, the time managers spend
tances in the organization, and get away from their desks directly observing the workforce is time they are not do-
to talk to individual employees. The practice was exem- ing their core job tasks like analysis, coordination, and
plified by Bill Hewlett and Dave Packard, who used this strategic planning. Second, management based on subjec-
management style at HP to learn more about the chal- tive impressions gathered by walking around runs counter
lenges and opportunities their employees were encoun- to a research and data-based approach to making mana-
tering. Many other organizations followed suit and found gerial decisions. Third, it is also possible that executives
that this style of management had advantages over a typi- who wander about will be seen as intruders and overseers.
cal desk-bound approach to management. A recent study Implementing the MBWA style requires a great deal of
foresight to avoid these potential pitfalls.

Case Incident 2 35

Questions 3. What ways can executives and other organizational
1. What are some of the things managers can learn by leaders learn about day-to-day business operations
besides going “undercover?”
walking around and having daily contact with line
employees that they might not be able to learn from 4. Are there any dangers in the use of a management
looking at data and reports? by walking around strategy? Could this strategy lead
employees to feel they are being spied on? What
2. As an employee, would you appreciate knowing your actions on the part of managers might minimize
supervisor regularly spent time with workers? How these concerns?
would knowing top executives routinely interact
with line employees affect your attitudes toward the
organization?

Sources: Based on T. Peters and N. Austin, “Management by Walking About,” Economist (September 8,
2008), www.economist.com; F. Aguirre, M. White, K. Schaefer, and S. Phelps, “Secrets of an Undercover
Boss,” Fortune (August 27, 2010), pp. 41–44; J. Larsson, I. Backstrom, and H. Wiklund, “Leadership
and Organizational Behavior: Similarities between Three Award-Winning Organizations,” International
Journal of Management Practice 3 (2009), pp. 327–345.

CASE INCIDENT 2 Era of the Disposable Worker?

The great global recession has claimed many victims. In came from lower payrolls rather than the sluggish rise in
many countries, unemployment is at near-historic highs, sales . . .” Wages also rose only slightly during this period
and even those who have managed to keep their jobs have of rapidly increasing corporate profitability.
often been asked to accept reduced work hours or pay
cuts. Another consequence of the current business and Some observers suggest the very nature of corporate
economic environment is an increase in the number of profit monitoring is to blame for the discrepancy between
individuals employed on a temporary or contingent basis. corporate profitability and outcomes for workers. Some
have noted that teachers whose evaluations are based on
The statistics on U.S. temporary workers are grim. Many, standardized test scores tend to “teach to the test,” to the
like single mother Tammy Smith, have no health insur- detriment of other areas of learning. In the same way,
ance, no retirement benefits, no vacation, no severance, when a company is judged primarily by the single met-
and no access to unemployment insurance. Increases in ric of a stock price, executives naturally try their best to
layoffs mean that many jobs formerly considered safe have increase this number, possibly to the detriment of other
become “temporary” in the sense that they could disap- concerns like employee well-being or corporate culture.
pear at any time with little warning. Forecasts suggest that On the other hand, others defend corporate actions that
the next 5 to 10 years will be similar, with small pay in- increase the degree to which they can treat labor flexibly,
creases, worse working conditions, and low levels of job se- noting that in an increasingly competitive global market-
curity. As Peter Cappelli of the University of Pennsylvania’s place, it might be necessary to sacrifice some jobs to save
Wharton School notes, “Employers are trying to get rid of the organization as a whole.
all fixed costs. First they did it with employment benefits.
Now they’re doing it with the jobs themselves. Everything The issues of how executives make decisions about
is variable.” workforce allocation, how job security and corporate loy-
alty influence employee behavior, and how emotional
We might suppose these corporate actions are largely reactions come to surround these issues are all core com-
taking place in an era of diminishing profitability. ponents of organizational behavior research.
However, data from the financial sector is not consistent
with this explanation. Among Fortune 500 companies, 2009 Questions
saw the second-largest jump in corporate earnings in the 1. To what extent can individual business decisions
list’s 56-year history. Moreover, many of these gains do not
appear to be the result of increases in revenue. Rather, (as opposed to economic forces) explain deteriora-
they reflect dramatic decreases in labor costs. One equity tion in working conditions for many workers?
market researcher noted, “The largest part of the gain
2. Do business organizations have a responsibility to
ensure that employees have secure jobs with good

36 CHAPTER 1 What Is Organizational Behavior?

working conditions, or is their primary responsibility 4. What do you think the likely impact of the growth
to shareholders? of temporary employment relationships will be for
employee attitudes and behaviors? How would you
3. What alternative measures of organizational per- develop a measurement system to evaluate the impact
formance, besides share prices, do you think might of corporate downsizing and temporary job assign-
change the focus of business leaders? ments on employees?

Sources: Based on P. Coy, M. Conlin, and M. Herbst, “The Disposable Worker,” Bloomberg Businessweek
(January 7, 2010), www.businessweek.com; S. Tully, “Fortune 500: Profits Bounce Back,” Fortune (May 3,
2010), pp. 140–144; D. Ariely, “You Are What You Measure,” Harvard Business Review (June 2010), p. 38.

ENDNOTES 11. A. S. Tsui, S. J. Ashford, L. St. Clair, and K. R. Xin, “Dealing
with Discrepant Expectations: Response Strategies and
1. Cited in R. Alsop, “Playing Well with Others,” Wall Street Managerial Effectiveness,” Academy of Management Journal
Journal (September 9, 2002). (December 1995), pp. 1515–1543.

2. See, for instance, C. Penttila, “Hiring Hardships,” 12. See, for instance, C. Heath and S. B. Sitkin, “Big-B Versus
Entrepreneur (October 2002), pp. 34–35. Big-O: What Is Organizational about Organizational
Behavior?” Journal of Organizational Behavior (February 2001),
3. S. E. Humphrey, J. D. Nahrgang, and F. P. Morgeson, pp. 43–58. For a review of what one eminent researcher be-
“Integrating Motivational, Social, and Contextual Work lieves should be included in organizational behavior, based
Design Features: A Meta-Analytic Summary and Theoretical on survey data, see J. B. Miner, “The Rated Importance,
Extension of the Work Design Literature,” Journal of Applied Scientific Validity, and Practical Usefulness of Organizational
Psychology 92, no. 5 (2007), pp. 1332–1356. Behavior Theories: A Quantitative Review,” Academy of
Management Learning & Education (September 2003),
4. I. S. Fulmer, B. Gerhart, and K. S. Scott, “Are the 100 Best pp. 250–268.
Better? An Empirical Investigation of the Relationship Between
Being a ‘Great Place to Work’ and Firm Performance,” 13. D. M. Rousseau and S. McCarthy, “Educating Managers from
Personnel Psychology (Winter 2003), pp. 965–993. an Evidence-Based Perspective,” Academy of Management
Learning & Education 6, no. 1 (2007), pp. 84–101; and
5. H. Fayol, Industrial and General Administration (Paris: Dunod, S. L. Rynes, T. L. Giluk, and K. G. Brown, “The Very Separate
1916). Worlds of Academic and Practitioner Periodicals in Human
Resource Management: Implications for Evidence-Based
6. A. I. Kraut, P. R. Pedigo, D. D. McKenna, and M. D. Dunnette, Management,” Academy of Management Journal 50, no. 5
“The Role of the Manager: What’s Really Important in (2007), pp. 987–1008.
Different Management Jobs,” Academy of Management
Executive 19, no. 4 (2005), pp. 122–129. 14. J. Surowiecki, “The Fatal-Flaw Myth,” The New Yorker (July 31,
2006), p. 25.
7. H. Mintzberg, The Nature of Managerial Work (Upper Saddle
River, NJ: Prentice Hall, 1973). 15. C. Tuna, “No-Layoff Policies Crumble,” The Wall Street Journal
(December 29, 2008), p. B2.
8. R. L. Katz, “Skills of an Effective Administrator,” Harvard
Business Review (September–October 1974), pp. 90–102; 16. See, for instance, S. D. Pugh, J. Dietz, J. W. Wiley, and
D. Bartram, “The Great Eight Competencies: A Criterion- S. M. Brooks, “Driving Service Effectiveness through
Centric Approach to Validation,” Journal of Applied Psychology 90, Employee-Customer Linkages,” Academy of Management
no. 6 (2005), pp. 1185–1203; and S. E. Scullen, M. K. Mount, Executive (November 2002), pp. 73–84; and H. Liao and
and T. A. Judge, “Evidence of the Construct Validity of Devel- A. Chuang, “A Multilevel Investigation of Factors Influencing
opmental Ratings of Managerial Performance,” Journal of Employee Service Performance and Customer Outcomes,”
Applied Psychology 88, no. 1 (2003), pp. 50–66. Academy of Management Journal (February 2004), pp. 41–58.

9. F. Luthans, “Successful vs. Effective Real Managers,” 17. See www.patagonia.com/jobs/retail_asst_mgr.shtml; and
Academy of Management Executive (May 1988), pp. 127–132; “Patagonia Sets the Pace for Green Business,” Grist Magazine
and F. Luthans, R. M. Hodgetts, and S. A. Rosenkrantz, (October 22, 2004), www.grist.org.
Real Managers (Cambridge, MA: Ballinger, 1988). See also
F. Shipper and J. Davy, “A Model and Investigation of 18. See, for instance, M. Workman and W. Bommer, “Rede
Managerial Skills, Employees’ Attitudes, and Managerial Signing Computer Call Center Work: A Longitudinal Field
Performance,” Leadership Quarterly 13 (2002), pp. 95–120. Experiment,” Journal of Organizational Behavior (May 2004),
pp. 317–337.
10. P. Wu, M. Foo, and D. B. Turban, “The Role of Personality
in Relationship Closeness, Developer Assistance, and Career 19. See, for instance, V. S. Major, K. J. Klein, and M. G. Ehrhart,
Success,” Journal of Vocational Behavior 73, no. 3 (2008), “Work Time, Work Interference with Family, and Psychological
pp.  440–448; and A. M. Konrad, R. Kashlak, I. Yoshioka, Distress,” Journal of Applied Psychology (June 2002), pp. 427–436;
R. Waryszak, and N. Toren, “What Do Managers Like to Do? D. Brady, “Rethinking the Rat Race,” BusinessWeek (August 26,
A Five-Country Study,” Group & Organization Management 2002), pp. 142–143; J. M. Brett and L. K. Stroh, “Working 61
(December 2001), pp. 401–433.

Endnotes 37

Plus Hours a Week: Why Do Managers Do It?” Journal of Applied “Ethical Decision-Making Differences between American
Psychology (February 2003), pp. 67–78. and Moroccan Managers,” Journal of Business Ethics 84, no. 4
20. See, for instance, The 2002 National Study of the Changing (2009), pp. 457–478.
Workforce (New York: Families and Work Institute, 2002); and 26. J. Merritt, “For MBAs, Soul-Searching 101,” BusinessWeek
W. J. Casper and L. C. Buffardi, “Work-Life Benefits and Job (September 16, 2002), pp. 64–66; and S. Greenhouse, “The
Pursuit Intentions: The Role of Anticipated Organizational Mood at Work: Anger and Anxiety,” The New York Times
Support,” Journal of Vocational Behavior 65, no. 3 (2004), (October 29, 2002), p. E1.
pp. 391–410. 27. See, for instance, G. R. Weaver, L. K. Trevino, and P. L.
21. Cited in S. Armour, “Workers Put Family First Despite Slow Cochran, “Corporate Ethics Practices in the Mid-1990’s: An
Economy, Jobless Fear” (citation number 21) is: S. Armour, Empirical Study of the Fortune 1000,” Journal of Business Ethics
“Workers Put Family First Despite Slow Economy, Jobless (February 1999), pp. 283–294; and C. De Mesa Graziano,
Fears,” USA Today, (June 6, 2002), p. 38. “Promoting Ethical Conduct: A Review of Corporate
22. S. Shellenbarger, “What Job Candidates Really Want to Know: Practices,” Strategic Investor Relations (Fall 2002), pp. 29–35.
Will I Have a Life?” The Wall Street Journal (November 17, 28. D. M. Mayer, M. Kuenzi, R. Greenbaum, M. Bardes, and
1999), p. B1; and “U.S. Employers Polish Image to Woo a R. Salvador, “How Low Does Ethical Leadership Flow?
Demanding New Generation,” Manpower Argus (February Test of a Trickle-Down Model,” Organizational Behavior and
2000), p. 2. Human Decision Processes 108, no. 1 (2009), pp. 1–13; and
23. F. Luthans and C. M. Youssef, “Emerging Positive Organi- A. Ardichvili, J. A. Mitchell, and D. Jondle, “Characteristics
zational Behavior,” Journal of Management (June 2007), of Ethical Business Cultures,” Journal of Business Ethics 85,
pp. 321–349; C. M. Youssef and F. Luthans, “Positive no. 4 (2009), pp. 445–451.
Organizational Behavior in the Workplace: The Impact of 29. “Unplanned Absence Costs Organizations 8.7 Percent
Hope, Optimism, and Resilience,” Journal of Management of Payroll, Mercer/Kronos Study” (June 28, 2010), www
33, no. 5 (2007), pp. 774–800; and J. E. Dutton and .mercer.com/press-releases/1383785.
S. Sonenshein, “Positive Organizational Scholarship,” in 30. W. Hoge, “Sweden’s Cradle-to-Grave Welfare Starts to Get
C. Cooper and J. Barling (eds.), Encyclopedia of Positive Ill,” International Herald Tribune (September 25, 2002), p. 8.
Psychology (Thousand Oaks, CA: Sage, 2007). 31. See www.bls.gov/data (May 11, 2005).
24. L. M. Roberts, G. Spreitzer, J. Dutton, R. Quinn, 32. See, for example, M. C. Sturman and C. O. Trevor, “The
E. Heaphy, and B. Barker, “How to Play to Your Strengths,” Implications of Linking the Dynamic Performance and
Harvard Business Review (January 2005), pp. 1–6; and Turnover Literatures,” Journal of Applied Psychology (August
L. M. Roberts, J. E. Dutton, G. M. Spreitzer, E. D. Heaphy, 2001), pp. 684–696.
and R. E. Quinn, “Composing the Reflected Best-Self 33. M. Casey-Campbell and M. L. Martens, “Sticking It All
Portrait: Becoming Extraordinary in Work Organizations,” Together: A Critical Assessment of the Group Cohesion-
Academy of Management Review 30, no. 4 (2005), pp. 712–736. Performance Literature,” International Journal of Management
25. W. Bailey and A. Spicer, “When Does National Identity Reviews 11, (2008), pp. 223–246.
Matter? Convergence and Divergence in International 34. A. J. Rucci, S. P. Kirn, and R. T. Quinn, “The Employee–
Business Ethics,” Academy of Management Journal 50, no.  6 Customer–Profit Chain at Sears,” Harvard Business Review
(2007), pp. 1462–1480; and A. B. Oumlil and J. L. Balloun, (January–February 1998), pp. 83–97.

LEARNING THE RISE AND FALL OF ERIN CALLAN
OBJECTIVES
Erin Callan was one of those rare individuals who seemed to master
After studying this chapter, everything she undertook. Due to her precocious intelligence and
you should be able to: athletic prowess (at 13 she was one of the top gymnasts in New York),
people called her Wonder Child. She graduated magna cum laude from Harvard,
1 Describe the two major earned her law degree from New York University, and went to work for one of
forms of workforce the most prestigious law firms in New York City. In 1995, she went into bank-
diversity. ing, eventually rising to be chief financial officer (CFO) of one of the largest and
most prestigious U.S. investment banks, Lehman Brothers. At 41—young for a
2 Recognize stereotypes CFO of such a large organization—Callan seemed to have it all. She was the first
and understand how they woman ever to serve on the 158-year-old company’s executive committee. One
function in organizational newspaper labeled her “Rising Star Erin Callan, now one of the most powerful
settings. women on Wall Street.”

3 Identify the key Now Callan is jobless and living in virtual exile on Long Island.
biographical characteristics What happened?
and describe how they The story of Erin Callan’s fall has a lot to do with the meltdown in the
are relevant to OB. financial services industry. Lehman, after all, went bankrupt in 2008, and
most senior executives lost their jobs. Most of its managers and executives,
4 Define intellectual ability however, have found work elsewhere. Why not Callan? The answer depends
and demonstrate its on which narrative you accept. Callan refuses to discuss the issue with the
relevance to OB. media. To some, she brought about her own downfall with her outsized
ambition and desire for attention. To others, she is the victim of a gender
5 Contrast intellectual double standard that is alive and well on Wall Street and elsewhere.
and physical ability. From one point of view, Callan caused her own demise. She lacked back-
ground in accounting, treasury, or operations—unusual for a CFO. According
6 Describe how organizations to Fortune, many at Lehman disapproved of her brash style and provocative
manage diversity wardrobe. “I don’t subordinate my feminine side,” she says. “I’m very open
effectively. about it. I have no problem talking about my shopper or my outfit.” When
Callan was named CFO, one of Lehman’s female senior executives went to
MyManagementLab the CEO to rescind the promotion. Later, in the early days of the financial
meltdown, investors thought Callan’s responses were unimpressive. A few
Access a host of interactive months later, she was removed. Currently, the Securities and Exchange
learning aids to help strengthen Commission (SEC) is investigating whether her “forward looking statements”
your understanding of the regarding Lehman’s finances constitute civil fraud.
chapter concepts at Read this way, Callan’s is the typical story of a Wall Street executive
www.mymanagementlab.com. caught unprepared for a crisis his or her decisions helped create. Is the story
so simple, though? After all, nearly all Callan’s male counterparts at Lehman
are now employed, including ex-CEO Richard Fuld (now managing member
of Matrix Advisors and advisor with Legend Securities). Many have landed at
Barclays, the British Bank that bought Lehman in bankruptcy.

38

Photo: Erin Callahan. Source: Jeff Riedel/Getty Images Diversity

2in Organizations

I think that God in creating Man somewhat
overestimated his ability.

— Oscar Wilde

39

40 CHAPTER 2 Diversity in Organizations

Does Callan’s sex have a role in this? Does an interest in fashion serve to
stigmatize women more than men? Does an interest in the media (“She was a
media hound,” said one Lehman executive) cast women in a harsher light?

Even National Public Radio (NPR) seemed to emphasize Callan’s looks over
her intellect. “Blonde, beautiful and outspoken, the spotlight loved Erin Callan.
Fortune magazine called her one of four women to watch,” said NPR. “Callan
cut a striking figure in her crochet-style dress, gold dangling earrings and
high-heeled boots.” Fortune said, “She arrived like a flash—a bright, glamorous
figure.” Were such descriptions applied to the male CFOs of Goldman Sachs,
Morgan Stanley, Merrill Lynch, or Bear Stearns?

As for Callan, friends say she is at peace with herself and her situation. “I’m
living a different life,” she recently told a reporter.

Sources: P. Sellers, “The Fall of a Wall Street Highflier,” Fortune (March 22, 2010), pp. 140–148;
P. Sellers, “Erin Callan, Lehman’s Ex-CFO, Goes Public,” CNN Money (February 22, 2011), www
.cnnmoney.com/; J. Quinn, “Goldman Outshines Rival Bear Stearns,” The Telegraph (September 21,
2007), www.telegraph.co.uk/; and C. Gasparino, “Lehman Probe Begins to Square in on Former
CFO,” FOXBusiness (June 10, 2010), www.foxbusiness.com/.

Sex is but one characteristic people bring with them when they join an
organization. In this chapter, we look at how organizations work to maxi-
mize the potential contributions of a diverse workforce. We also show how
demographic characteristics such as ethnicity and individual differences in the
form of ability affect employee performance and satisfaction.

But first check out the following Self-Assessment Library, where you can
assess your views on one of the characteristics we’ll discuss in this chapter: age.

SAL What’s My Attitude Toward Older People?

SELF-ASSESSMENT LIBRARY In the Self-Assessment Library (available on CD or online), take assessment IV.C.1
(What’s My Attitude Toward Older People?) and answer the following questions:

1. Are you surprised by your results?
2. How do your results compare to those of others?

Diversity

1 Describe the two major We aren’t all the same. This is obvious enough, but managers sometimes forget
forms of workforce diversity. that they need to recognize and capitalize on these differences to get the most
from their employees. Effective diversity management increases an organiza-
tion’s access to the widest possible pool of skills, abilities, and ideas. Managers
also need to recognize that differences among people can lead to miscommu-
nication, misunderstanding, and conflict. In this chapter, we’ll learn about how

Diversity 41

individual characteristics like age, gender, race, ethnicity, and abilities can influ-
ence employee performance. We’ll also see how managers can develop aware-
ness about these characteristics and manage a diverse workforce effectively.

Demographic Characteristics of the U.S. Workforce

In the past, OB textbooks noted that rapid change was about to occur as
the predominantly white, male managerial workforce gave way to a gender-
balanced, multiethnic workforce. Today, that change is no longer happening: it
has happened, and it is increasingly reflected in the makeup of managerial and
professional jobs. Compared to 1976, women today are much more likely to be
employed full-time, have more education, and earn wages comparable to those
of men.1 In addition, over the past 50 years the earnings gap between Whites
and other racial and ethnic groups has decreased significantly; past differences
between Whites and Asians have disappeared or been reversed.2 Workers over
the age of 55 are an increasingly large portion of the workforce as well. This
permanent shift toward a diverse workforce means organizations need to make
diversity management a central component of their policies and practices. At
the same time, however, differences in wages across genders and racial and eth-
nic groups persist, and executive positions in Fortune 500 corporations continue
to be held by white males in numbers far beyond their representation in the
workforce in general.

A survey by the Society for Human Resources Management shows some
major employer concerns and opportunities resulting from the demographic
makeup of the U.S. workforce.3 The aging of the workforce was consistently
the most significant concern of HR managers. The loss of skills resulting from
the retirement of many baby boomers, increased medical costs due to an aging
workforce, and many employees’ needs to care for elderly relatives topped the
list of issues. Other issues include developing multilingual training materials
and providing work–life benefits for dual-career couples.

Progress Energy reflects the Source: Robert Willett / Raleigh News & Observer/Newscom
demographic characteristics of the
U.S. workforce today. It is gender
balanced, multiethnic, and engaged

in learning about diversity issues
and putting them into practice.
Progress, which recently merged
with Duke Energy, encourages

employees to participate in various
network groups, diversity councils,

and training workshops, such as
the one shown here. The company

believes that recognizing and
embracing diversity maximize
employee potential, customer
satisfaction, and business success.

42 CHAPTER 2 Diversity in Organizations

2 Recognize stereotypes Levels of Diversity
and understand how they
function in organizational Although much has been said about diversity in age, race, gender, ethnicity,
settings. religion, and disability status, experts now recognize that these demographic
characteristics are just the tip of the iceberg.4 Demographics mostly reflect surface-
level diversity, not thoughts and feelings, and can lead employees to perceive one
another through stereotypes and assumptions. However, evidence has shown that as
people get to know one another, they become less concerned about demographic
differences if they see themselves as sharing more important characteristics, such as
personality and values, that represent deep-level diversity.5

To understand this difference between surface- and deep-level diversity,
consider a few examples. Luis and Carol are co-workers who seem to have little
in common at first glance. Luis is a young, recently hired male college graduate
with a business degree, raised in a Spanish-speaking neighborhood in Miami.
Carol is an older, long-tenured woman raised in rural Kansas, who achieved her
current level in the organization by starting as a high school graduate and work-
ing her way through the hierarchy. At first, these co-workers may experience
some differences in communication based on their surface-level differences in
education, ethnicity, regional background, and gender. However, as they get
to know one another, they may find they are both deeply committed to their
families, share a common way of thinking about important work problems, like
to work collaboratively, and are interested in international assignments in the
future. These deep-level similarities will overshadow the more superficial differ-
ences between them, and research suggests they will work well together.

On the other hand, Steve and Dave are two unmarried white male college
graduates from Oregon who recently started working together. Superficially,
they seem well matched. But Steve is highly introverted, prefers to avoid risks,
solicits the opinions of others before making decisions, and likes the office
quiet, while Dave is extroverted, risk-seeking, and assertive and likes a busy,
active, and energetic work environment. Their surface-level similarity will not
necessarily lead to positive interactions because they have such fundamental,
deep-level differences. It will be a challenge for them to collaborate regularly at
work, and they’ll have to make some compromises to get things done together.

Throughout this book, we will encounter differences between deep- and
surface-level diversity in various contexts. Individual differences in personality
and culture shape preferences for rewards, communication styles, reactions to
leaders, negotiation styles, and many other aspects of behavior in organizations.

Discrimination

Although diversity does present many opportunities for organizations, effective
diversity management also means working to eliminate unfair discrimination.
To discriminate is to note a difference between things, which in itself isn’t
necessarily bad. Noticing one employee is more qualified is necessary for making
hiring decisions; noticing another is taking on leadership responsibilities
exceptionally well is necessary for making promotion decisions. Usually when we
talk about discrimination, though, we mean allowing our behavior to be influ-
enced by stereotypes about groups of people. Rather than looking at individual
characteristics, unfair discrimination assumes everyone in a group is the same.
This discrimination is often very harmful to organizations and employees.

Exhibit 2-1 provides definitions and examples of some forms of discrimina-
tion in organizations. Although many of these actions are prohibited by law,
and therefore aren’t part of almost any organization’s official policies, thou-
sands of cases of employment discrimination are documented every year, and
many more go unreported. As discrimination has increasingly come under both

Diversity 43

Exhibit 2-1 Forms of Discrimination

Type of Discrimination Definition Examples from Organizations
Discriminatory policies
or practices Actions taken by representatives of the Older workers may be targeted for layoffs
organization that deny equal opportunity because they are highly paid and have lucrative
Sexual harassment to perform or unequal rewards for benefits.
performance
Intimidation Salespeople at one company went on company-paid
Mockery and insults Unwanted sexual advances and other visits to strip clubs, brought strippers into the office to
verbal or physical conduct of a sexual celebrate promotions, and fostered pervasive sexual
nature that create a hostile or offensive rumors.
work environment African-American employees at some companies have
found nooses hanging over their work stations.
Overt threats or bullying directed at Arab-Americans have been asked at work whether
members of specific groups of employees they were carrying bombs or were members of
terrorist organizations.
Jokes or negative stereotypes; sometimes Many women in finance claim they are assigned to
the result of jokes taken too far marginal job roles or are given light workloads that
don’t lead to promotion.
Exclusion Exclusion of certain people from job
Incivility opportunities, social events, discussions, Female lawyers note that male attorneys frequently
or informal mentoring; can occur cut them off or do not adequately address their
unintentionally comments.

Disrespectful treatment, including
behaving in an aggressive manner,
interrupting the person, or ignoring
his or her opinions

Sources: J. Levitz and P. Shishkin, “More Workers Cite Age Bias after Layoffs,” The Wall Street Journal (March 11, 2009), pp. D1–D2; W. M. Bulkeley, “A Data-Storage Titan Confronts Bias Claims,”
The Wall Street Journal (September 12, 2007), pp. A1, A16; D. Walker, “Incident with Noose Stirs Old Memories,” McClatchy-Tribune Business News (June 29, 2008); D. Solis, “Racial Horror Stories
Keep EEOC Busy,” Knight-Ridder Tribune Business News, July 30, 2005, p. 1; H. Ibish and A. Stewart, Report on Hate Crimes and Discrimination Against Arab Americans: The Post-September 11
Backlash, September 11, 2001—October 11, 2001 (Washington, DC: American-Arab Anti-Discrimination Committee, 2003); A. Raghavan, “Wall Street’s Disappearing Women,” Forbes (March 16, 2009),
pp. 72–78; and L. M. Cortina, “Unseen Injustice: Incivility as Modern Discrimination in Organizations,” Academy of Management Review 33, no. 1 (2008), pp. 55–75.

legal scrutiny and social disapproval, most overt forms have faded, which may
have resulted in an increase in more covert forms like incivility or exclusion.6

As you can see, discrimination can occur in many ways, and its effects can be
just as varied depending on the organizational context and the personal biases
of its members. Some forms, like exclusion or incivility, are especially hard to
root out because they are impossible to observe and may occur simply because
the actor isn’t aware of the effects of his or her actions. Whether intentional
or not, discrimination can lead to serious negative consequences for employ-
ers, including reduced productivity and citizenship behavior, negative conflicts,
and increased turnover. Unfair discrimination also leaves qualified job candi-
dates out of initial hiring and promotions. Even if an employment discrimina-
tion lawsuit is never filed, a strong business case can be made for aggressively
working to eliminate unfair discrimination.

Diversity is a broad term, and the phrase workplace diversity can refer to any
characteristic that makes people different from one another. The following
section covers some important surface-level characteristics that differentiate
members of the workforce.

surface-level diversity Differences deep-level diversity Differences discrimination Noting of a difference
in easily perceived characteristics, in values, personality, and work between things; often we refer to
such as gender, race, ethnicity, age, preferences that become progressively unfair discrimination, which means
or disability, that do not necessarily more important for determining making judgments about individuals
reflect the ways people think or similarity as people get to know one based on stereotypes regarding their
feel but that may activate certain another better. demographic group.
stereotypes.

44 CHAPTER 2 Diversity in Organizations

Biographical Characteristics

3 Identify the key biographical Biographical characteristics such as age, gender, race, disability, and length of
characteristics and describe service are some of the most obvious ways employees differ. As discussed in
how they are relevant to OB. Chapter 1, this textbook is essentially concerned with finding and analyzing
the variables that affect employee productivity, absence, turnover, deviance,
citizenship, and satisfaction (refer back to Exhibit 1-4). Many organizational
concepts—motivation, say, or power and politics or organizational culture—are
hard to assess. Let’s begin, then, by looking at factors that are easily definable
and readily available—data that can be obtained, for the most part, from an
employee’s human resources (HR) file. Variations in these surface-level char-
acteristics may be the basis for discrimination against classes of employees, so
it is worth knowing how closely related they actually are to important work out-
comes. Many are not as important as people believe, and far more variation
occurs within groups sharing biographical characteristics than between them.

Age

The relationship between age and job performance is likely to be an issue
of increasing importance during the next decade for at least three reasons.
First, belief is widespread that job performance declines with increasing age.
Regardless of whether this is true, a lot of people believe it and act on it. Second,
as noted in Chapter 1, the workforce is aging. Many employers recognize that
older workers represent a huge potential pool of high-quality applicants.
Companies such as Borders and the Vanguard Group have sought to increase
their attractiveness to older workers by providing targeted training that meets
their needs, and by offering flexible work schedules and part-time work to draw
in those who are semi-retired.7 The third reason is U.S. legislation that, for all
intents and purposes, outlaws mandatory retirement. Most U.S. workers today
no longer have to retire at age 70.

Older employees are an integral Source: s70/ZUMA Press/Newscom
part of the workforce at Publix

Supermarkets, where one in five
employees is over the age of 50.
The company values the work ethic
and maturity of its senior associates
like the man shown here preparing
salmon pinwheels for customers
to sample. Publix is known for its
employment of senior citizens and
actively recruits older workers as
part of its corporate philosophy
of providing a diverse work place.
The company believes that older
workers have a strong work ethic,
many skills, and job knowledge
that they can share with younger

co-workers.

Biographical Characteristics 45

What is the perception of older workers? Employers hold mixed feelings.8
They see a number of positive qualities older workers bring to their jobs, such
as experience, judgment, a strong work ethic, and commitment to quality.
But older workers are also perceived as lacking flexibility and resisting new
technology. And when organizations are actively seeking individuals who are
adaptable and open to change, the negatives associated with age clearly hinder
the initial hiring of older workers and increase the likelihood they will be let go
during cutbacks.

Now let’s take a look at the evidence. What effect does age actually have
on turnover, absenteeism, productivity, and satisfaction? The older you get,
the less likely you are to quit your job. That conclusion is based on studies of
the age–turnover relationship.9 Of course, this shouldn’t be too surprising. As
workers get older, they have fewer alternative job opportunities as their skills
have become more specialized to certain types of work. Their long tenure also
tends to provide them with higher wage rates, longer paid vacations, and more
attractive pension benefits.

It’s tempting to assume that age is also inversely related to absenteeism. After
all, if older workers are less likely to quit, won’t they also demonstrate higher
stability by coming to work more regularly? Not necessarily. Most studies do show
an inverse relationship, but close examination finds it is partially a function of
whether the absence is avoidable or unavoidable.10 In general, older employees
have lower rates of avoidable absence than do younger employees. However,
they have equal rates of unavoidable absence, such as sickness absences.

How does age affect productivity? Many believe productivity declines with
age. It is often assumed that skills like speed, agility, strength, and coordination
decay over time and that prolonged job boredom and lack of intellectual
stimulation contribute to reduced productivity. The evidence, however,
contradicts those assumptions. During a 3-year period, a large hardware chain
staffed one of its stores solely with employees over age 50 and compared its
results with those of five stores with younger employees. The store staffed by
the over-50 employees was significantly more productive (in terms of sales
generated against labor costs) than two of the stores and held its own against
the other three.11 Other reviews of the research find that age and job task
performance are unrelated and that older workers are more likely to engage in
citizenship behavior.12

Our final concern is the relationship between age and job satisfaction, where
the evidence is mixed. A review of more than 800 studies found that older work-
ers tend to be more satisfied with their work, report better relationships with
co-workers, and are more committed to their employing organizations.13 Other
studies, however, have found a U-shaped relationship.14 Several explanations
could clear up these results, the most plausible being that these studies are
intermixing professional and nonprofessional employees. When we separate
the two types, satisfaction tends to continually increase among professionals as
they age, whereas it falls among nonprofessionals during middle age and then
rises again in the later years.

biographical characteristics Personal
characteristics—such as age, gender,
race, and length of tenure—that
are objective and easily obtained
from personnel records. These
characteristics are representative
of surface-level diversity.

46 CHAPTER 2 Diversity in Organizations

What are the effects of discrimination against individuals on the basis of
age? One large-scale study of more than 8,000 employees in 128 companies
found that an organizational climate favoring age discrimination was associated
with lower levels of commitment to the company. This lower commitment was,
in turn, related to lower levels of organizational performance.15 Such results
suggest that combating age discrimination may be associated with higher levels
of organizational performance.

Sex

Few issues initiate more debates, misconceptions, and unsupported opinions
than whether women perform as well on jobs as men do.

The best place to begin to consider this is with the recognition that few,
if any, important differences between men and women affect job perfor-
mance. There are no consistent male–female differences in problem-solving
ability, analytical skills, competitive drive, motivation, sociability, or learn-
ing ability.16 Psychological studies have found women are more agreeable
and willing to conform to authority, whereas men are more aggressive and
more likely to have expectations of success, but those differences are minor.
Given the significantly increased female participation in the workforce over
the past 40 years and the rethinking of what constitutes male and female
roles, we can assume no significant difference in job productivity between
men and women.17

Unfortunately, sex roles still affect our perceptions. For example, women
who succeed in traditionally male domains are perceived as less likable, more
hostile, and less desirable as supervisors.18 Interestingly, research also suggests
that women believe sex-based discrimination is more prevalent than do male
employees, and these beliefs are especially pronounced among women who
work with a large proportion of men.19

One issue that does seem to differ between men and women, especially
when the employee has preschool-age children, is preference for work sched-
ules.20 Working mothers are more likely to prefer part-time work, flexible
work schedules, and telecommuting in order to accommodate their fam-
ily responsibilities. Women also prefer jobs that encourage work–life bal-
ance, which has the effect of limiting their options for career advancement.
An interview study showed many of the work–life issues found in U.S. busi-
ness contexts are also common in France, despite government subsidies for
child care.21

What about absence and turnover rates? Are women less stable employees
than men? First, evidence from a study of nearly 500,000 professional employ-
ees indicates significant differences, with women more likely to turn over than
men.22 Women also have higher rates of absenteeism than men do.23 The most
logical explanation is that the research was conducted in North America, and
North American culture has historically placed home and family responsibili-
ties on women. When a child is ill or someone needs to stay home to wait for
a plumber, the woman has traditionally taken time from work. However, this
research is also undoubtedly time-bound.24 The role of women has definitely
changed over the past generation. Men are increasingly sharing responsibility
for child care, and an increasing number report feeling a conflict between their
home responsibilities and their work lives.25 One interesting finding is that
regardless of sex, parents were rated lower in job commitment, achievement
striving, and dependability than individuals without children, but mothers were
rated especially low in competence.26

Again, it is worth asking what the implications of sex discrimination are for
individuals. Research has shown that workers who experience sexual harassment

Biographical Characteristics 47

OB Poll Sexual Harassment Claims by Men

Sexual Harassment Claims Filed by Men in Selected States

35 33.3 26.6 2007 2009
32.2 27.3 16.6
24.0 23.0
30 18.7

25
21.7

20

15

10 9.5
5

0 West Virginia Michigan Wyoming Wisconsin
Utah

Sources: Equal Employment Opportunity Commission; D. Mattioli, “More Men Make Harassment Claims,” The Wall Street Journal (March 23, 2010), p. D4.

have higher levels of psychological stress, and these feelings in turn are related
to lower levels of organizational commitment and job satisfaction, and higher
intentions to turn over.27 As with age discrimination, the evidence suggests that
combating sex discrimination may be associated with better performance for the
organization as a whole.

Myth or Science?

“Dual-Career Couples Divorce Less”

This statement is mostly false. this is a complex issue, and research on Canadian working mother, the primary
A recent large-scale study of it continues. breadwinner in her family, says, “There
married couples in the United is a part of me that wonders if I can
States, the United Kingdom, and What about whether the husband trust, if it’s safe for me to take my foot
Germany found that in all three countries works outside the home? Historically, off the gas, to hold back and relax, not
whether a wife worked outside the this was quite unusual, but it is be thinking and working all the time.”
home, and what she earned if she did, becoming increasingly common—
had no effect on divorce rates. The wives are now the primary breadwinner Sources: L. P. P. Cooke, “Wives’ Part-time
authors of this study conclude: “In no in 22 percent of U.S. couples, up from Employment and Marital Stability in Great
country did a wife’s employment or 7 percent in 1970. There is some evi- Britain, West Germany and the United
relative earnings significantly increase dence that men are less healthy and States,” Sociology 44, no. 6 (2010),
the risk of dissolution.” Thus, it appears marriages are more likely to fail when pp. 1091–1108; T. Parker-Pope, “She Works.
that social critics on both the left men do not work outside the home, or They’re Happy.” The New York Times
(dual-career couples have healthier, when they become unemployed while (January 24, 2010), pp. ST1, ST10; and
happier marriages) and the right (a their wives continue to work. As one S. Proudfoot, “More Women Bringing Home
traditional male working, wife at home researcher noted, many married men the Bacon, More Men Cooking It,” National
family structure is best) are wrong. Still, ask themselves, “What is my value Post (October 7, 2010), www.canada.com/.
here if I’m not bringing in money?” One

48 CHAPTER 2 Diversity in Organizations

Race and Ethnicity

Race is a controversial issue. In many cases, even bringing up the topic of race
and ethnicity is enough to create an uncomfortable silence. Indeed, evidence
suggests that some people find interacting with other racial groups uncomfort-
able unless there are clear behavioral scripts to guide their behavior.28

Most people in the United States identify themselves according to racial group.
The U.S. Bureau of the Census classifies individuals according to seven broad
racial categories: American Indian and Alaska Native, Asian, Black or African
American, Native Hawaiian and Other Pacific Islander, Some Other Race, White,
and Two or More Races. An ethnicity distinction is also made between native
English speakers and Hispanics: Hispanics can be of any race. We define race in
this book as the biological heritage people use to identify themselves; ethnicity is
the additional set of cultural characteristics that often overlaps with race. This
definition allows each individual to define his or her race and ethnicity.

Race and ethnicity have been studied as they relate to employment out-
comes such as hiring decisions, performance evaluations, pay, and workplace
discrimination. Most research has concentrated on the differences in outcomes
and attitudes between Whites and African Americans, with little study of issues
relevant to Asian, Native American, and Hispanic populations. Doing justice to
all this research isn’t possible here, so let’s summarize a few points.

First, in employment settings, individuals tend to slightly favor colleagues
of their own race in performance evaluations, promotion decisions, and pay
raises, although such differences are not found consistently, especially when
highly structured methods of decision making are employed.29 Second, substan-
tial racial differences exist in attitudes toward affirmative action, with African
Americans approving of such programs to a greater degree than Whites.30
This difference may reflect the fact that African Americans and Hispanics per-
ceive discrimination to be more prevalent in the workplace.31 Third, African
Americans generally fare worse than Whites in employment decisions. They
receive lower ratings in employment interviews, receive lower job performance
ratings, are paid less, and are promoted less frequently.32 Yet there are no
statistically significant differences between African Americans and Whites in
observed absence rates, applied social skills at work, or accident rates. African
Americans and Hispanics also have higher turnover rates than Whites.

Employers’ major concern about using mental-ability tests for selection,
promotion, training, and similar employment decisions is that they may have a
negative impact on racial and ethnic groups.33 However, evidence suggests that
“despite group differences in mean test performance, there is little convincing
evidence that well-constructed tests are more predictive of educational, train-
ing, or occupational performance for members of the majority group than for
members of minority groups.”34 Observed differences in IQ test scores by racial
or ethnic group are smaller in more recent samples.35 The issue of racial differ-
ences in general mental-ability tests continues to be hotly debated.36

Does racial and ethnic discrimination lead to negative workplace outcomes?
As noted earlier, most research shows that members of racial and ethnic
minorities report higher levels of discrimination in the workplace.37 Some
research suggests that having a positive climate for diversity overall can lead to
increased sales.38

Disability

With the passage of the Americans with Disabilities Act (ADA) in 1990, the
representation of individuals with disabilities in the U.S. workforce rapidly
increased.39 According to the ADA, employers are required to make reasonable

Biographical Characteristics 49

Microsoft views employees with Source: AP Photo/Ted S. Warren
disabilities as valuable assets

because they help ensure that the
company’s products and services
meet all customer needs. At
the Microsoft Accessibility Lab,

employees can experience assistive
technologies and ergonomic

hardware designs that enable
them to be more productive. Kelly

Ford, who has been blind since
birth, is shown here in the lab
testing accessibility features of
the Windows operating system.
Ford also manages a team that is
working on improving Web page
browsing for all users, not just for

people with disabilities.

accommodations so their workplaces will be accessible to individuals with physi-
cal or mental disabilities.

Making inferences about the relationship between disability and employ-
ment outcomes is difficult because the term disability is so broad. The U.S.
Equal Employment Opportunity Commission classifies a person as disabled
who has any physical or mental impairment that substantially limits one or
more major life activities. Examples include missing limbs, seizure disorder,
Down Syndrome, deafness, schizophrenia, alcoholism, diabetes, and chronic
back pain. These conditions share almost no common features, so there’s no
generalization about how each condition is related to employment. Some jobs
obviously cannot be accommodated to some disabilities—the law and common
sense recognize that a blind person could not be a bus driver, a person with
severe cerebral palsy could not be a surgeon, and a person with profound
mobility constraints probably could not be a police patrol officer. However,
the increasing presence of computer technology and other adaptive devices is
shattering many traditional barriers to employment.

One of the most controversial aspects of the ADA is the provision that
requires employers to make reasonable accommodations for people with
psychiatric disabilities.40 Most people have very strong biases against those with
mental illnesses, who are therefore reluctant to disclose this information to
employers. Many who do, report negative consequences.

The impact of disabilities on employment outcomes has been explored from
a variety of perspectives. On the one hand, a review of the evidence suggests
workers with disabilities receive higher performance evaluations. However,
this same review found that despite their higher performance, individuals with
disabilities tend to encounter lower performance expectations and are less
likely to be hired.41 These negative effects are much stronger for individuals
with mental disabilities, and there is some evidence to suggest mental disabilities
may impair performance more than physical disabilities: Individuals with such
common mental health issues as depression and anxiety are significantly more
likely to be absent from work.42

50 CHAPTER 2 Diversity in Organizations

Several studies have examined participants who received résumés that were
identical, except that some mentioned a disability. The résumés that mentioned
mental illness or a physical disability were associated with much lower ratings
for perceived employability, especially in jobs requiring a great deal of personal
contact with the public.43 Employability ratings for individuals with mental
illnesses were especially low. Similarly, when given randomly manipulated
academic portfolios, students preferred not to work with individuals who
had a learning disability even though there were no effects of disability on
performance ratings or expectations.44

Contrast these selection-oriented results with studies showing that the
accomplishments of those with disabilities are often rated as more impressive
than the same accomplishments in people without disabilities. Participants
watched three individuals completing a carpentry task, one of whom was
described as having recently been hospitalized for a debilitating mental illness.45
The raters consistently gave that person higher performance ratings. In this
case, it may be that disabled individuals were being treated as an outgroup in
need of special help. Similarly, when disability status is randomly manipulated
among hypothetical candidates, disabled individuals are rated as having
superior personal qualities like dependability and potency.46

Other Biographical Characteristics: Tenure, Religion,
Sexual Orientation, and Gender Identity

The last set of biographical characteristics we’ll look at includes tenure, reli-
gion, sexual orientation, and gender identity.

Tenure Except for gender and racial differences, few issues are more subject to
misconceptions and speculations than the impact of seniority on job performance.

Extensive reviews have been conducted of the seniority–productivity
relationship.47 If we define seniority as time on a particular job, the most recent
evidence demonstrates a positive relationship between seniority and job
productivity. So tenure, expressed as work experience, appears to be a good
predictor of employee productivity.

The research relating tenure to absence is quite straightforward. Studies
consistently show seniority to be negatively related to absenteeism.48 In fact,
in terms of both frequency of absence and total days lost at work, tenure is the
single most important explanatory variable.49

Tenure is also a potent variable in explaining turnover. The longer a person
is in a job, the less likely he or she is to quit.50 Moreover, consistent with research
suggesting past behavior is the best predictor of future behavior, evidence
indicates tenure at an employee’s previous job is a powerful predictor of that
employee’s future turnover.51

Evidence indicates tenure and job satisfaction are positively related.52 In
fact, when age and tenure are treated separately, tenure appears a more consis-
tent and stable predictor of job satisfaction than age.

Religion Not only do religious and nonreligious people question each other’s
belief systems; often people of different religious faiths conflict. As the war in
Iraq and the past conflict in Northern Ireland demonstrate, violent differences
can erupt among sects of the same religion. U.S. federal law prohibits employ-
ers from discriminating against employees based on their religion, with very few
exceptions. However, that doesn’t mean religion is a nonissue in OB.

Perhaps the greatest religious diversity issue in the United States today
revolves around Islam. There are nearly 2 million Muslims in the United States,

Biographical Characteristics 51

An Ethical Choice

Religious Tattoos

Considering the following that it is a sin to cover them intention- “These can be religious beliefs and prac-
situation . . . ally because doing so would signify a tices even if no one else or few other
rejection of Ra. people subscribe to them.” If Edward’s
Edward practices the Kemetic religion, tattoos did not emanate from sincere
based on ancient Egyptian faith, and If you were Edward’s employer, how religious beliefs, however, the employer
affiliates himself with a tribe number- would you respond to his request? If could ask him to cover them.
ing fewer than ten members. He states several valued customers objected to
that he believes in various deities and Edward’s tattoos, would it affect your The upshot: Diversity, ethics, and
follows the faith’s concept of Ma’at, a response? legal compliance are not always the
guiding principle regarding truth and same thing. Sometimes what is legal
order that represents physical and It may surprise you to learn that is not what you might do, and some-
moral balance in the universe. During the Equal Employment Opportunity times what you might do is not legal.
a religious ceremony he received small Commission (EEOC), the chief regula-
tattoos encircling his wrist, written in tory agency that enforces laws against Source: N. C. Earp, “Unique Belief Can
the Coptic language, which express workplace discrimination, holds that Be Religious,” EEOC Compliance Manual
his servitude to Ra, the Egyptian god Edward’s employer may not ask him to (downloaded April 27, 2011), www.eeoc
of the sun. When his employer asks cover his tattoos. The seeming strange- .gov/policy/docs/religion.html.
him to cover the tattoos, he explains ness of Edward’s religious views is
not legally relevant. The EEOC notes,

and across the world Islam is one of the most popular religions. There are a
wide variety of perspectives on Islam. As one Islamic scholar has noted, “There
is no such thing as a single American Muslim community, much as there is no
single Christian community. Muslims vary hugely by ethnicity, faith, tradition,
education, income, and degree of religious observance.”53 For the most part,
U.S. Muslims have attitudes similar to those of other U.S. citizens (though the
differences tend to be greater for younger U.S. Muslims). Still, there are both
perceived and real differences. Nearly four in ten U.S. adults admit they harbor
negative feelings or prejudices toward U.S. Muslims, and 52 percent believe
U.S. Muslims are not respectful of women. Some take these general biases a
step further. Motaz Elshafi, a 28-year-old software engineer for Cisco Systems,
born and raised in New Jersey, received an e-mail from a co-worker addressed
“Dear Terrorist.” Research has shown that job applicants in Muslim-identified
religious attire who applied for hypothetical retail jobs in the United States had
shorter, more interpersonally negative interviews than applicants who did not
wear Muslim-identified attire.54

Faith can be an employment issue when religious beliefs prohibit or encour-
age certain behaviors. Based on their religious beliefs, some pharmacists refuse
to hand out RU-486, the “morning after” abortion pill. Many Christians do not
believe they should work on Sundays, and many conservative Jews believe they
should not work on Saturdays. Religious individuals may also believe they have
an obligation to express their beliefs in the workplace, and those who do not
share those beliefs may object. Perhaps as a result of different perceptions of
religion’s role in the workplace, religious discrimination claims have been a
growing source of discrimination claims in the United States.

Sexual Orientation and Gender Identity Employers differ widely in their treat-
ment of sexual orientation. Federal law does not prohibit discrimination against

52 CHAPTER 2 Diversity in Organizations

employees based on sexual orientation, though many states and municipalities
do. In general, observers note that even in the absence of federal legislation
requiring nondiscrimination, many organizations have implemented policies
and procedures protecting employees on the basis of sexual orientation.55

Raytheon, builder of Tomahawk cruise missiles and other defense systems,
offers domestic-partner benefits, supports a wide array of gay rights groups, and
wants to be an employer of choice for gays. The firm believes these policies give it
an advantage in the ever-competitive market for engineers and scientists. Raytheon
is not alone. More than half the Fortune 500 companies offer domestic-partner
benefits for gay couples, including American Express, IBM, Intel, Morgan Stanley,
Motorola, and Walmart. Some companies oppose domestic-partner benefits or
nondiscrimination clauses for gay employees. Among these are Alltel, ADM,
ExxonMobil, H. J. Heinz, Nissan, Nestlé, and Rubbermaid.56 Despite some gains,
many lesbian, gay, and bisexual employees keep their gender identity from their
co-workers for fear of being discriminated against.57

As for gender identity, companies are increasingly putting in place policies
to govern how their organization treats employees who change genders (often
called transgender employees). In 2001, only eight companies in the Fortune 500 had
policies on gender identity. By 2006, that number had swelled to 124. IBM is one
of them. Brad Salavich, a diversity manager for IBM, says, “We believe that having
strong transgender and gender identification policies is a natural extension of
IBM’s corporate culture.” Dealing with transgender employees requires some
special considerations, such as for bathrooms, employee names, and so on.58

Ability

4 Define intellectual ability We’ve so far covered surface characteristics unlikely, on their own, to directly
and demonstrate its relate to job performance. Now we turn to deep-level abilities that are closely
relevance to OB. related to job performance. Contrary to what we were taught in grade school,
we weren’t all created equal in our abilities. Most people are to the left or the
right of the median on some normally distributed ability curve. For example,
regardless of how motivated you are, it’s unlikely you can act as well as Scarlett
Johansson, play basketball as well as LeBron James, write as well as J. K. Rowling,
or play the guitar as well as Pat Metheny. Of course, just because we aren’t all
equal in abilities does not imply that some individuals are inherently inferior.
Everyone has strengths and weaknesses that make him or her relatively supe-
rior or inferior to others in performing certain tasks or activities. From man-
agement’s standpoint, the issue is not whether people differ in terms of their
abilities. They clearly do. The issue is using the knowledge that people differ to
increase the likelihood an employee will perform his or her job well.

What does ability mean? As we use the term, ability is an individual’s current
capacity to perform the various tasks in a job. Overall abilities are essentially
made up of two sets of factors: intellectual and physical.

Intellectual Abilities

Intellectual abilities are abilities needed to perform mental activities—thinking,
reasoning, and problem solving. Most societies place a high value on intelligence,
and for good reason. Smart people generally earn more money and attain
higher levels of education. They are also more likely to emerge as leaders of

Ability 53

Exhibit 2-2 Dimensions of Intellectual Ability

Dimension Description Job Example
Number aptitude Accountant: Computing the sales tax on a set of items
Verbal comprehension Ability to do speedy and accurate Plant manager: Following corporate policies on hiring
arithmetic
Perceptual speed Fire investigator: Identifying clues to support a charge of arson
Ability to understand what is read
Inductive reasoning or heard and the relationship of Market researcher: Forecasting demand for a product in the
words to each other next time period
Deductive reasoning Supervisor: Choosing between two different suggestions
Spatial visualization Ability to identify visual similarities offered by employees
and differences quickly and Interior decorator: Redecorating an office
Memory accurately
Salesperson: Remembering the names of customers
Ability to identify a logical sequence
in a problem and then solve the
problem

Ability to use logic and assess the
implications of an argument

Ability to imagine how an object
would look if its position in space
were changed

Ability to retain and recall past
experiences

groups. Intelligence quotient (IQ) tests, for example, are designed to ascertain
a person’s general intellectual abilities. So, too, are popular college admission
tests, such as the SAT and ACT and graduate admission tests in business
(GMAT), law (LSAT), and medicine (MCAT). Testing firms don’t claim their
tests assess intelligence, but experts know they do.59 The seven most frequently
cited dimensions making up intellectual abilities are number aptitude, verbal
comprehension, perceptual speed, inductive reasoning, deductive reasoning,
spatial visualization, and memory.60 Exhibit 2-2 describes these dimensions.

Intelligence dimensions are positively related, so if you score high on verbal
comprehension, for example, you’re more likely to also score high on spatial
visualization. The correlations aren’t perfect, meaning people do have specific
abilities that predict important work-related outcomes when considered
individually.61 However, they are high enough that researchers also recognize a
general factor of intelligence, general mental ability (GMA). Evidence strongly
supports the idea that the structures and measures of intellectual abilities
generalize across cultures. Thus, someone in Venezuela or Sudan does not
have a different set of mental abilities than a U.S. or Czech worker. There is
some evidence that IQ scores vary to some degree across cultures, but those
differences are much smaller when we take into account educational and
economic differences.62

Jobs differ in the demands they place on intellectual abilities. The more
complex a job in terms of information-processing demands, the more general
intelligence and verbal abilities will be necessary to perform successfully.63

ability An individual’s capacity to intellectual abilities The capacity general mental ability (GMA) An
perform the various tasks in a job. to do mental activities—thinking, overall factor of intelligence, as
reasoning, and problem solving. suggested by the positive correlations
among specific intellectual ability
dimensions.

54 CHAPTER 2 Diversity in Organizations

glOBalization!

Images of Diversity from Around the Globe

As economic globalization national identities, the country’s lead- of perspectives on diversity across
continues to expand, the very ers have also prioritized these celebra- countries. Many countries require
idea of diversity management tions as a moment to emphasize the specific targets and quotas for achiev-
must expand to include a diversity shared identity of being Singaporean. ing affirmative action goals, whereas
of cultures and situations. Attitudes Brazil is a similarly diverse country; the the legal framework in the United
toward diversity programs range major demographic groups addressed States specifically forbids their use.
greatly across countries, with the by Brazilian diversity policies include Some countries have strong prohibi-
idea of what constitutes a “diverse” African descendant, European descen- tions on sexual harassment, whereas
workforce differing by culture and dant, and Asian descendant, as well as in other countries behavior unaccept-
the demography of the country. The disability status. Research suggests able in U.S. workplaces is common.
role of women in the workplace also that diversity programs are relatively Effectively managing diversity in
varies, with some countries valuing new to Brazil compared to Europe and multinational organizations is clearly a
sexual equality more than others. North America, but companies are challenge of the global marketplace.
Other categories of diversity, like coming to see diversity management
sexual orientation, are not recognized as a major component of their human Sources: Based on D. P. S. Goh, “State
in some countries but are important resources systems. In India, diversity Carnivals and the Subvention of Multi-
elements of the diversity picture in management often means addressing culturalism in Singapore,” The British
others. A consideration of three inter- differences in social class and caste Journal of Sociology 62 (2011), pp. 111–133;
national examples helps illustrate how that do not arise in other countries, C. J. C. Jabbour, F. S. Gordono,
diverse diversity programs can be. with affirmative action programs man- J. H. C. de Olivera, J. C. Martinez, and
dating the number of individuals from R. A. G. Battistelle, “Diversity Management:
In Singapore, diversity has become lower castes who must be included in Challenges, Benefits, and the Role of
part of the national agenda. On “Racial management positions for some types Human Resource Management in Brazilian
Harmony Day,” street carnivals are of organizations. Organizations,” Equality, Diversity, and
held to celebrate the nation’s unique Inclusion: An International Journal 30 (2011),
status as a crossroads of Chinese, Multinational organizations will have pp. 58–74; and F. L. Cooke and D. S. Saini,
Malay, Indian, and other cultures. to carefully consider how to create “Diversity Management in India: A Study of
Besides applauding these distinct diversity strategies given the variety Organizations in Different Ownership Forms
and Industrial Sectors,” Human Resource
Management 49 (2010), pp. 477–500.

Where employee behavior is highly routine and there are few or no opportu-
nities to exercise discretion, a high IQ is not as important to performing well.
However, that does not mean people with high IQs cannot have an impact on
traditionally less complex jobs.

It might surprise you that the most widely used intelligence test in hiring
decisions takes only 12 minutes to complete. It’s the Wonderlic Cognitive
Ability Test. There are different forms, and each has 50 questions. Here are a
few examples:

● When rope is selling at $0.10 a foot, how many feet can you buy for $0.60?
● Assume the first two statements are true. Is the final one:

1. True.
2. False.
3. Not certain.

a. The boy plays baseball.
b. All baseball players wear hats.
c. The boy wears a hat.

The Wonderlic measures both speed (almost nobody has time to answer
every question) and power (questions get harder as you go along), so the

Ability 55

5 Contrast intellectual and average score is pretty low—about 21/50. And because it is able to provide valid
physical ability. information cheaply (for $5 to $10/applicant), more companies are using the
Wonderlic in hiring decisions. The Factory Card & Party Outlet, with 182 stores
nationwide, uses it. So do Subway, Peoples Flowers, Security Alarm, Workforce
Employment Solutions, and many others. Most of these companies don’t give up
other hiring tools, such as application forms or interviews. Rather, they add the
Wonderlic for its ability to provide valid data on applicants’ intelligence levels.

Interestingly, while intelligence is a big help in performing a job well, it
doesn’t make people happier or more satisfied with their jobs. The correlation
between intelligence and job satisfaction is about zero. Why? Research suggests
that although intelligent people perform better and tend to have more interest-
ing jobs, they are also more critical when evaluating their job conditions. Thus,
smart people have it better, but they also expect more.64

Physical Abilities

Though the changing nature of work suggests intellectual abilities are in-
creasingly important for many jobs, physical abilities have been and will
remain valuable. Research on hundreds of jobs has identified nine basic
abilities needed in the performance of physical tasks.65 These are described
in Exhibit 2-3. Individuals differ in the extent to which they have each of
these abilities. Not surprisingly, there is also little relationship among them:
a high score on one is no assurance of a high score on others. High employee
performance is likely to be achieved when management has ascertained the
extent to which a job requires each of the nine abilities and then ensures that
employees in that job have those abilities.

Exhibit 2-3 Nine Basic Physical Abilities

Strength Factors Ability to exert muscular force repeatedly or continuously
1. Dynamic strength over time
Ability to exert muscular strength using the trunk
2. Trunk strength (particularly abdominal) muscles
Ability to exert force against external objects
3. Static strength Ability to expend a maximum of energy in one or a series of
4. Explosive strength explosive acts

Flexibility Factors Ability to move the trunk and back muscles as far as possible
5. Extent flexibility Ability to make rapid, repeated flexing movements
6. Dynamic flexibility
Other Factors Ability to coordinate the simultaneous actions of different
7. Body coordination parts of the body
Ability to maintain equilibrium despite forces pulling off
8. Balance balance
Ability to continue maximum effort requiring prolonged
9. Stamina effort over time

physical abilities The capacity to do
tasks that demand stamina, dexterity,
strength, and similar characteristics.

56 CHAPTER 2 Diversity in Organizations

The Role of Disabilities

The importance of ability at work obviously creates problems when we attempt
to formulate workplace policies that recognize diversity in terms of disability
status. As we have noted, recognizing that individuals have different abilities
that can be taken into account when making hiring decisions is not problematic.
However, it is discriminatory to make blanket assumptions about people on the
basis of a disability. It is also possible to make accommodations for disabilities.

Implementing Diversity Management Strategies

MyManagementLab Having discussed a variety of ways in which people differ, we now look at how
a manager can and should manage these differences. Diversity management
For an interactive application of this makes everyone more aware of and sensitive to the needs and differences of
topic, check out this chapter’s others. This definition highlights the fact that diversity programs include and
simulation activity at are meant for everyone. Diversity is much more likely to be successful when we
www.mymanagementlab.com. see it as everyone’s business than if we believe it helps only certain groups of
employees.

Attracting, Selecting, Developing,
and Retaining Diverse Employees

One method of enhancing workforce diversity is to target recruiting messages to
specific demographic groups underrepresented in the workforce. This means
placing advertisements in publications geared toward specific demographic
groups; recruiting at colleges, universities, and other institutions with significant
numbers of underrepresented minorities; and forming partnerships with
associations like the Society for Women Engineers or the Graduate Minority
Business Association. These efforts can be successful, and research has shown
that women and minorities do have greater interest in employers that make
special efforts to highlight a commitment to diversity in their recruiting
materials. Advertisements depicting groups of diverse employees are seen as
more attractive to women and racioethnic minorities, which is probably why
most organizations depict workforce diversity prominently in their recruiting
materials. Diversity advertisements that fail to show women and minorities
in positions of organizational leadership send a negative message about the
diversity climate at an organization.66

The selection process is one of the most important places to apply diversity
efforts. Managers who hire need to value fairness and objectivity in selecting
employees and focus on the productive potential of new recruits. Fortunately,
ensuring that hiring is bias-free does appear to work. Where managers use
a well-defined protocol for assessing applicant talent and the organization
clearly prioritizes nondiscrimination policies, qualifications become far more
important in determining who gets hired than demographic characteristics.67
Organizations that do not discourage discriminatory behavior are more likely
to see problems.

Similarity in personality appears to affect career advancement. Those whose
personality traits are similar to those of their co-workers are more likely to be
promoted than those whose personalities are different.68 There’s an important
qualifier to these results: in collectivistic cultures, similarity to supervisors is
more important for predicting advancement, whereas in individualistic cultures,

Implementing Diversity Management Strategies 57

In Japan, Nissan Motor Company Source: AP Photo/Katsumi Kasahara
is helping female employees
develop their careers at the

firm’s manufacturing plants and
car dealerships. Nissan provides
women, such as the assembly-line
worker shown here, with training
programs to develop skills and the
one-on-one counseling services of
career advisors. Nissan also posts
career interviews on its corporate
intranet with women who have
made significant contributions
to the company and serve as role
models for other female employees.
For Nissan, developing the talents
of women is a strategic imperative

for its business success.

similarity to peers is more important. Once again, deep-level diversity factors
appear to be more important in shaping people’s reactions to one another than
surface-level characteristics.

Evidence from a study of more than 6,000 workers in a major retail organi-
zation indicated that in stores with a less supportive diversity climate, African
Americans or Hispanics made significantly fewer sales than White employees,
but when the diversity climate was positive, Hispanics and Whites sold about the
same amount and African Americans made more sales than Whites.69 Whites
sold about the same amount whether there was a positive diversity climate or
not, but African Americans and Hispanics sold far more when there was. There
are obvious bottom-line implications of this research: stores that fostered a
positive diversity climate were able to capitalize on their diverse workforce and
make more money.

Some data suggest individuals who are demographically different from their
co-workers are more likely to feel low commitment and to turn over: women are
more likely to turn over from predominantly male work groups and men from
predominantly female work groups; non-Whites are more likely to turn over
from predominantly White work groups and Whites from predominantly non-
White work groups.70 However, this behavior is more prominent among new
hires. After people become better acquainted with one another, demographic
differences are less consistently related to turnover. One very large-scale study
showed a positive diversity climate was related to higher organizational commit-
ment and lower turnover intentions among African-American, Hispanic, and
White managers.71 In other words, all workers appeared to prefer an organiza-
tion that values diversity.

diversity management The process
and programs by which managers
make everyone more aware of and
sensitive to the needs and differences
of others.

58 CHAPTER 2 Diversity in Organizations

Diversity in Groups

Most contemporary workplaces require extensive work in group settings. When
people work in groups, they need to establish a common way of looking at
and accomplishing the major tasks, and they need to communicate with one
another often. If they feel little sense of membership and cohesion in their
groups, all these group attributes are likely to suffer.

Does diversity help or hurt group performance? The answer is “yes.” In
some cases, diversity in traits can hurt team performance, whereas in others it
can facilitate it.72 Whether diverse or homogeneous teams are more effective
depends on the characteristic of interest. Demographic diversity (in gender,
race, and ethnicity) does not appear to either help or hurt team performance
in general. On the other hand, teams of individuals who are highly intelligent,
conscientious, and interested in working in team settings are more effective.
Thus diversity on these variables is likely to be a bad thing—it makes little sense
to try to form teams that mix in members who are lower in intelligence, consci-
entiousness, and uninterested in teamwork. In other cases, differences can be a
strength. Groups of individuals with different types of expertise and education
are more effective than homogeneous groups. Similarly, a group made entirely
of assertive people who want to be in charge, or a group whose members all
prefer to follow the lead of others, will be less effective than a group that mixes
leaders and followers.

Regardless of the composition of the group, differences can be leveraged
to achieve superior performance. The most important way is to emphasize the
higher-level similarities among members.73 In other words, groups of diverse
individuals will be much more effective if leaders can show how members have
a common interest in the group’s success. Evidence also shows transformational
leaders (who emphasize higher-order goals and values in their leadership style)
are more effective in managing diverse teams.74

6 Describe how organizations Effective Diversity Programs
manage diversity effectively.
Organizations use a variety of efforts to capitalize on diversity, including the
recruiting and selection policies we have already discussed, as well as training
and development practices. Effective, comprehensive workforce programs
encouraging diversity have three distinct components. First, they teach
managers about the legal framework for equal employment opportunity
and encourage fair treatment of all people regardless of their demographic
characteristics. Second, they teach managers how a diverse workforce will be
better able to serve a diverse market of customers and clients. Third, they foster
personal development practices that bring out the skills and abilities of all
workers, acknowledging how differences in perspective can be a valuable way to
improve performance for everyone.75

Much concern about diversity has to do with fair treatment.76 Most negative
reactions to employment discrimination are based on the idea that discrimina-
tory treatment is unfair. Regardless of race or gender, people are generally in
favor of diversity-oriented programs, including affirmative action, if they believe
the policies ensure everyone a fair opportunity to show their skills and abilities.

A major study of the consequences of diversity programs came to what might
seem a surprising conclusion.77 Organizations that provided diversity train-
ing were not consistently more likely to have women and minorities in upper
management positions than organizations that did not. On closer examination
though, these results are not surprising. Experts have long known that one-shot
training sessions without strategies to encourage effective diversity manage-
ment back on the job are not likely to be very effective. Some diversity programs

Implementing Diversity Management Strategies 59

NASCAR, an American sport with Source: Chuck Burton/AP Images
a worldwide following, promotes

diversity within its organization
and throughout the motorsports

industry. Through its Drive to
Diversity program, NASCAR ensures

that everyone is given a fair
opportunity to show and develop

his or her skills and abilities. The
program seeks to develop minority

and female drivers and crew
members as shown in this photo.

Drivers participate in a scouting
combine and earn the chance

to compete with an established
NASCAR team for a full season. And

after completing their training,
crew member trainees can compete

with a racing team.

are truly effective in improving representation in management. They include
strategies to measure the representation of women and minorities in managerial
positions, and they hold managers accountable for achieving more demograph-
ically diverse management teams. Researchers also suggest that diversity expe-
riences are more likely to lead to positive adaptation for all parties if (1) the
diversity experience undermines stereotypical attitudes, (2) if the perceiver is
motivated and able to consider a new perspective on others, (3) if the perceiver
engages in stereotype suppression and generative thought in response to the
diversity experience, and (4) if the positive experience of stereotype undermin-
ing is repeated frequently.78 Diversity programs based on these principles are
likely to be more effective than traditional classroom learning.

Organizational leaders should examine their workforce to determine
whether target groups have been underutilized. If groups of employees are
not proportionally represented in top management, managers should look
for any hidden barriers to advancement. They can often improve recruiting
practices, make selection systems more transparent, and provide training for
those employees who have not had adequate exposure to certain material
in the past. The organization should also clearly communicate its policies to
employees so they can understand how and why certain practices are followed.
Communications should focus as much as possible on qualifications and job
performance; emphasizing certain groups as needing more assistance could
well backfire. A case study of the multinational Finnish company TRANSCO
found it was possible to develop a consistent global philosophy for diversity
management. However, differences in legal and cultural factors across nations
forced TRANSCO to develop unique policies to match the cultural and legal
frameworks of each country in which it operated.79

To ensure the top-level management team represents the diversity of its work-
force and client base, Safeway implemented the Retail Leadership Development
(RLD) Program, a formal career development program. This program is open
to all employees, so it is inclusive, but women and underrepresented racial or
ethnic groups are particularly encouraged to participate. Interested individu-
als take a series of examinations to determine whether they have management
potential. Those who perform well on the tests are provided with work in roles
that expose them to managerial opportunities. The program’s comprehensive
nature is underscored by its additional support activities: All managers attend

60 CHAPTER 2 Diversity in Organizations

workshops that help them bring diversity concerns front and center in their
staff meetings. They are also charged with providing promising RLD partici-
pants with additional training and development opportunities to ensure they
have the skills needed for advancement. The program incorporates the type
of accountability we have said is crucial to the success of diversity efforts; per-
formance bonuses are provided to managers who meet concrete diversity
goals. This program has shown real success: the number of White women store
managers has increased by 31 percent since its inception, and the number of
women-of-color store managers has increased by 92 percent.80

MyManagementLab

Now that you have finished this chapter, go back to www.mymanagementlab.com to continue
practicing and applying the concepts you’ve learned.

Summary and Implications for Managers

This chapter looked at diversity from many perspectives. We paid particular
attention to three variables—biographical characteristics, ability, and diversity
programs. Let’s summarize what we found and consider its importance for a
manager trying to understand organizational behavior.

● We can readily observe biographical characteristics, but that doesn’t
mean we should explicitly use them in management decisions. Most
research shows fairly minimal effects of biographical characteristics on
job performance. We also need to be aware of implicit biases we or other
managers may have.

● An effective selection process will improve the fit between employees
and job requirements. A job analysis will provide information about jobs
currently being done and the abilities individuals need to perform the
jobs adequately. Applicants can then be tested, interviewed, and evaluated
on the degree to which they possess the necessary abilities.

● Promotion and transfer decisions affecting individuals already in the orga-
nization’s employ should reflect candidates’ abilities. As with new employ-
ees, care should be taken to assess critical abilities incumbents will need
in the job and match those with the organization’s human resources.

● To accommodate employees with disabilities, managers can improve the
fit by fine-tuning the job to better match an incumbent’s abilities. Often,
modifications with no significant impact on the job’s basic activities, such
as changing equipment or reorganizing tasks within a group, can better
adapt work to the specific talents of a given employee.

● Diversity management must be an ongoing commitment that crosses all
levels of the organization. Group management, recruiting, hiring, reten-
tion, and development practices can all be designed to leverage diversity
for the organization’s competitive advantage.

● Policies to improve the climate for diversity can be effective, so long as
they are designed to acknowledge all employees’ perspectives. One-shot
diversity training sessions are less likely to be effective than comprehen-
sive programs that address the climate for diversity at multiple levels.

Summary and Implications for Managers 61

Men Have More Mathematical Ability Than Women

POINT COUNTERPOINT

Harvard’s Larry Summers was forced to resign from Women make up about half the new entrants in the
his job as president of the university for claiming that professions of law, medicine, and dentistry. They are
women have different abilities than men, but there is the vast majority of veterinarians. Yet they remain
some truth to the claim. Evidence reliability indicates significant woefully underrepresented in science, mathematics, and tech-
gender differences in mathematical test scores. nology positions. For example, only about one in five of recent
entrants into engineering graduate programs are women, and
To be sure, there are many, many women whose mathemati- in natural sciences and computer science departments at the
cal and scientific prowess far surpasses that of many men. The top universities, fewer than one in ten tenured professors are
distributions overlap to a considerable degree. women. If women are at such a disadvantage in terms of math
and science abilities, why are they better represented in some
It is also true that most research shows that overall intel- occupations than others? Differing motivations produced by
ligence doesn’t differ between genders: women are as smart teacher and parent expectations are the answer. If we think
as men. But the fact of the matter is, the way in which men and women aren’t natural engineers, then we learn to steer girls
women are smart is, on average, different. Women tend to have away from such career choices.
significantly higher scores on verbal ability measures and men
tend to have significantly higher scores on measures of math- It is true there are gender differences in math test scores,
ematical ability. but those differences are not large. And often ignored is a
widely documented phenomenon: among the very young,
Many sociologists and educational psychologists argue girls outperform boys on math (as well as on other) tests. By
that these differences are explained by socialization: boys are adolescence, this advantage reverses and boys outperform
socialized toward and rewarded for mathematical prowess, girls. If socialization and school experiences do not explain this
whereas girls are pointed toward and expected to excel in writ- result, what does?
ing and reading.
Moreover, we know that a large part of the reason fewer
These socialization arguments, however, ignore some cold, women enter science, technology, engineering, and mathe-
hard truths that have been uncovered in the latest research. We matical (STEM) positions is not ability but motivation. Research
know from neural imaging research that men’s and women’s indicates that women perceive careers in STEM fields to be
brains differ. Men tend to show higher activation in the area less interpersonally fulfilling, and this explains their gravitation
of the brain responsible for mathematical and for spatial toward other fields. If we are concerned about sex differences
operations. Women, in contrast, tend to have better bilateral in participation in these fields, we need to be concerned with
communication (the right and left sides of their brain communi- the motivational effects of these perceptions, not with any
cate better), which is vital to reading comprehension and writ- presumed differences in male and female abilities.
ten and oral expression. Do we really think a child’s third-grade
teacher caused these differences?

No reasonable person suggests that boys and girls should
be steered into different occupations based on these findings.
Men and women should pursue the occupations that suit their
abilities and that they will find rewarding. But should our pursuit
of egalitarianism blind us to scientific findings that suggest the
obvious: men and women are not exactly alike?

Sources: Based on A. B. Diekman, E. R. Brown, A. M. Johnston, and E. K. Clark, “Seeking Congruity between Goals and Roles:
A New Look at Why Women Opt Out of Science, Technology, Engineering, and Mathematics Careers,” Psychological Science
21, no. 8 (2010), pp. 1051–1057; S. J. Ceci and W. Williams, “Sex Differences in Math-Intensive Fields,” Current Directions
in Psychological Science 19, no. 5 (2010), pp. 275–279; and J. Tierney, “Legislation Won’t Close Gender Gap in Sciences,”
The New York Times (June 14, 2010), pp. 1–4.

62 CHAPTER 2 Diversity in Organizations

QUESTIONS FOR REVIEW 4 What is intellectual ability and how is it relevant to OB?
5 How can you contrast intellectual and physical ability?
1 What are the two major forms of workforce diversity? 6 How do organizations manage diversity effectively?
2 What are stereotypes and how do they function in

organizational settings?

3 What are the key biographical characteristics and how

are they relevant to OB?

EXPERIENTIAL EXERCISE Feeling Excluded

This six-step exercise takes approximately 20 minutes. people. If at all possible, try to compose groups that
are somewhat demographically diverse, to avoid
Individual Work (Steps 1 and 2) intergroup conflicts in the class review discussion.
1. All participants are asked to recall a time when they have Students should be encouraged to discuss their
felt uncomfortable or targeted because of their demo- situations and consider how their experiences were
graphic status. Ideally, situations at work should be used, similar or different.
but if no work situations come to mind, any situation
will work. Encourage students to use any demographic 4. After reading through everyone’s reactions, each
characteristic they think is most appropriate, so they can group should develop a short list of principles for
write about feeling excluded on the basis of race, ethnic- how they personally can avoid excluding or targeting
ity, gender, age, disability status, religion, or any other people in the future. Encourage them to be as
characteristic. They should briefly describe the situation, specific as possible, and also ask each group to find
what precipitated the event, how they felt at the time, solutions that work for everyone. Solutions should
how they reacted, and how they believe the other party focus on both avoiding these situations in the first
could have made the situation better. place and resolving them when they do occur.

2. The instructor asks the students to then think about a Class Review (Steps 5 and 6)
time when they might have either deliberately or acci- 5. Members of each group are invited to provide a very
dentally done something that made someone else feel brief summary of the major principles of how they’ve
excluded or targeted because of their demographic felt excluded or targeted, and then to describe their
status. Once again, they should briefly describe the groups’ collective decisions regarding how these
situation, what precipitated the event, how they felt at situations can be minimized in the future.
the time, how the other person reacted, and how they
could have made the situation better. 6. The instructor should lead a discussion on how
companies might be able to develop comprehensive
Small Groups (Steps 3 and 4) policies that will encourage people to be sensitive in
3. Once everyone has written their descriptions, divide their interactions with one another.
the class into small groups of not more than four

ETHICAL DILEMMA Board Quotas

That women are underrepresented on boards of directors instituted compulsory quotas for female representation on
is an understatement. In the United States, only 15 percent boards. Great Britain has guidelines and recommendations.
of board members among the Fortune 500 are women. A 2011 official British government report recommended
Among the 100 largest companies in Great Britain, women that women make up at least 25 percent of the boards of
hold approximately 12 percent of board seats, a represen- the largest British companies. Under the recommended
tation that has changed little over the past 5 years. In the guidelines, companies would be required to announce
European Union (EU) more generally, only 9.7 percent of their board composition goals to their shareholders and
the directors of the 300 largest companies are women. In state clearly how they plan on meeting them. France passed
China and India, the figure is roughly half that. a law in 2011 that requires large companies to fill at least
40 percent of board seats with female members within the
In response to such underrepresentation, many EU next six years. Spain has a similar quota in place.
countries—including France, Spain, and Norway—have

Case Incident 1 63

Questions 3. Beyond legal remedies, what do you think can be
1. Given that women participate in the labor force done to increase women’s representations on boards
of directors?
in roughly the same proportion as men, why do
you think women occupy so few seats on boards 4. One recent study found no link between female repre-
of directors? sentation on boards of directors and these companies’
corporate sustainability or environmental policies. The
2. Do you agree with the quotas established in many EU study’s author expressed surprise at the findings. Do
countries? Why or why not? the findings surprise you? Why or why not?

Sources: J. Werdigier, “In Britain, a Push for More Women on Boards of Large Companies,” The New York
Times (February 25, 2011), p. B3; and J. Galbreath, “Are There Gender-Related Influences on Corporate
Sustainability? A Study of Women on Boards of Directors,” Journal of Management & Organization 17,
no. 1 (2011), pp. 17–38.

CASE INCIDENT 1 The Flynn Effect

Given that a substantial amount of intellectual ability is 3. Test-taking savvy. Today’s children have been tested
inherited, it might surprise you to learn that intelligence test so often that they are test-savvy: they know how to take
scores are rising. In fact, scores have risen so dramatically tests and how to do well on them.
that today’s great-grandparents seem mentally deficient by
comparison. First, let’s review the evidence for rising test 4. Genes. Although smart couples tend to have fewer,
scores. Then we’ll review explanations for the results. not more, children (which might lead us to expect
intelligence in the population to drop over time), it’s
On an IQ scale where 100 is the average, scores have possible that due to better education, tracking, and
been rising about 3 points per decade, meaning if your testing, those who do have the right genes are better
grandparent scored 100, the average score for your able to exploit those advantages. Some genetics
generation would be around 115. That’s a pretty big researchers also have argued that if genes for intel-
difference—about a standard deviation, meaning someone ligence carried by both parents are dominant, they
from your grandparent’s generation whose score was at the win out, meaning the child’s IQ will be as high as or
84th percentile would be only average (50th percentile) by higher than those of the parents.
today’s norms.
Despite the strong heritability of IQ, researchers con-
James Flynn is a New Zealand researcher credited tinue to pursue mechanisms that might raise IQ scores.
with first documenting the rising scores. He reported the Factors like brain exercises (even video games) and reg-
results in 1984, when he found that almost everyone who ular physical exercise seem to at least temporarily boost
took a well-validated IQ test in the 1970s did better than brain power. Other recent research in neuroscience has
those who took one in the 1940s. The results appear to had difficulty pinpointing physical mechanisms that can
hold up across cultures. Test scores are rising not only in lead to a boost in IQ, although researchers propose that a
the United States but in most other countries in which the focus on brain chemicals like dopamine may lead, in time,
effect has been tested, too. to drugs that can boost IQ chemically.

What explains the Flynn effect? Researchers are not Questions
entirely sure, but some of the explanations offered are these: 1. Do you believe people are really getting smarter? Why

1. Education. Students today are better educated than or why not?
their ancestors, and education leads to higher test scores.
2. Which of the factors explaining the Flynn effect do
2. Smaller families. In 1900, the average couple had you accept?
four children; today the number is fewer than two. We
know firstborns tend to have higher IQs than other 3. If the Flynn effect is true, does this undermine the
children, probably because they receive more atten- theory that IQ is mostly inherited? Why or why not?
tion than their later-born siblings.

Sources: Based on S. Begley, “Sex, Race, and IQ: Off Limits?” Newsweek (April 20, 2009), www.newsweek
.com; M. A. Mingroni, “Resolving the IQ Paradox: Heterosis as a Cause of the Flynn Effect and Other
Trends,” Psychological Review (July 2007), pp. 806–829; and S. Begley, “Can You Build a Better Brain?”
Newsweek (January 10, 2011), www.newsweek.com.

64 CHAPTER 2 Diversity in Organizations

CASE INCIDENT 2 Increasing Age Diversity in the Workplace

Over the past century, the average age of the workforce Organizations can take steps to limit age discrimination
has continually increased as medical science continues and ensure that employees are treated fairly regardless of
to enhance longevity and vitality. The fastest-growing age. Many of the techniques to limit age discrimination
segment of the workforce is individuals over the age of 55. come down to fundamentally sound management practices
Recent medical research is exploring techniques that relevant for all employees: set clear expectations for
could extend human life to 100 years or more. In addition, performance, deal with problems directly, communicate
the combination of laws prohibiting age discrimination with workers frequently, and follow clear policies and
and elimination of defined-benefit pension plans means procedures consistently. In particular, management
that many individuals continue to work well past the tradi- professionals note that clarity and consistency can help
tional age of retirement. ensure all employees are treated equally regardless of age.

Unfortunately, older workers face a variety of Questions
discriminatory attitudes in the workplace. Researchers 1. What changes in employment relationships are likely
scanned more than 100 publications on age discrimination
to determine what types of age stereotypes were most to occur as the population ages?
prevalent across studies. They found that stereotypes
suggested job performance declined with age, counter to 2. Do you think increasing age diversity will create new
empirical evidence presented earlier in this chapter that challenges for managers? What types of challenges do
relationships between age and core task performance are you expect will be most profound?
essentially nil. Stereotypes also suggest that older workers
are less adaptable, less flexible, and incapable of learning 3. How can organizations cope with differences related
new concepts. Research, on the other hand, suggests they to age discrimination in the workplace?
are capable of learning and adapting to new situations
when these are framed appropriately. 4. What types of policies might lead to charges of age
discrimination, and how can they be changed to
eliminate these problems?

Sources: Based on D. Stipp, “The Anti-Aging Revolution,” Fortune (June 14, 2010), pp. 124–130;
R. A. Posthuma and M. A. Campion, “Age Stereotypes in the Workplace: Common Stereotypes, Moderators,
and Future Research Directions,” Journal of Management 35 (2009), pp. 158–188; and H. Perlowski, “With
an Aging Workforce, a Rising Risk of Discrimination Claims,” Workforce Management Online (July 2008),
www.workforce.com.

ENDNOTES Race, Ethnicity, and Gender Categories Merely Surface
Characteristics?” American Psychologist 65 (2010), pp. 934–935.
1. M. DiNatale and S. Boraas, “The Labor Force Experience of 5. P. Chattopadhyay, M. Tluchowska, and E. George,
Women from Generation X,” Monthly Labor Review (March “Identifying the Ingroup: A Closer Look at the Influence
2002), pp. 1–15. of Demographic Dissimilarity on Employee Social Identity,”
Academy of Management Review 29, no. 2 (2004), pp. 180–202;
2. See, for example, F. Welch, “Catching Up: Wages of Black and P. Chattopadhyay, “Beyond Direct and Symmetrical
Men,” The American Economic Review 93, no. 2 (2003), Effects: The Influence of Demographic Dissimilarity on
pp. 320–325; A. Sakamoto, H. Wu, and J. M. Tzeng, Organizational Citizenship Behavior,” Academy of Management
“The Declining Significance of Race Among American Journal 42, no. 3 (1999), pp. 273–287.
Men During the Latter Half of the Twentieth Century,” 6. L. M. Cortina, “Unseen Injustice: Incivility as Modern
Demography 37 (January 2000), pp. 41–51; and A Sakomoto, Discrimination in Organizations,” Academy of Management
K. A. Goyette, and C. Kim, “Socioeconomic Attainments Review 33, no. 1 (2008), pp. 55–75.
of Asian Americans,” Annual Review of Sociology 35, (2009), 7. R. J. Grossman, “Keep Pace with Older Workers,” HR
pp. 255–276. Magazine (May 2008), pp. 39–46.
8. K. A. Wrenn and T. J. Maurer, “Beliefs About Older Workers’
3. J. Schram, SHRM Workplace Forecast (Alexandria, VA: Society Learning and Development Behavior in Relation to Beliefs
for Human Resource Management, 2006). About Malleability of Skills, Age-Related Decline, and
Control,” Journal of Applied Social Psychology 34, no. 2 (2004),
4. D. A. Harrison, K. H. Price, J. H. Gavin, and A. T. Florey, pp. 223–242; and R. A. Posthuma and M. A. Campion,
“Time, Teams, and Task Performance: Changing Effects of “Age Stereotypes in the Workplace: Common Stereotypes,
Surface- and Deep-Level Diversity on Group Functioning,”
Academy of Management Journal 45, no. 5 (2002), pp. 1029–1045;
and A.  H. Eagly and J. L. Chin, “Are Memberships in

Endnotes 65

Moderators, and Future Research Directions,” Journal of M.  Wooden, “Do Explanations of Absenteeism Differ for
Management 35 (2009), pp. 158–188. Men and Women?” Human Relations (November 1995),
9. T. W. H. Ng and D. C. Feldman, “Re-examining the pp. 1309–1329.
Relationship Between Age and Voluntary Turnover,” Journal 24. See, for instance, M. Tait, M. Y. Padgett, and T. T. Baldwin,
of Vocational Behavior 74 (2009), pp. 283–294. “Job and Life Satisfaction: A Reevaluation of the Strength
10. T. W. H. Ng and D. C. Feldman, “The Relationship of Age of the Relationship and Gender Effects as a Function of
to Ten Dimensions of Job Performance,” Journal of Applied the Date of the Study,” Journal of Applied Psychology (June
Psychology 93 (2008), pp. 392–423. 1989), pp. 502–507; and M. B. Grover, “Daddy Stress,” Forbes
11. Cited in K. Labich, “The New Unemployed,” Fortune (September 6, 1999), pp. 202–208.
(March 8, 1993), p. 43. 25. S. Halrynjo, “Men’s Work-Life Conflict: Career, Care and
12. See Ng and Feldman, “The Relationship of Age to Ten Self-Realization: Patterns of Privileges and Dilemmas,”
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