Unformatted text preview: What is OB?
What is OB?
“I found that if you have a goal then you might not reach it. BUT if you don’t have one then you are never disappointed and I got to tell you that it feels phenomenal.”
Vince Vauhn, Dodgeball 1 Announcements
Announcements Next class – Group membership determined
– Name plates and seating chart
– Pictures taken with group
– A visit to the ONET website http://online.onetcenter.org/ 2 Agenda
Agenda Does organizational behavior really matter?
– Why does it matter?
– What’s so difficult? 3 What is OB/HR?
What is OB/HR? Organizational Behavior (OB) is a field of study that attempts to understand, explain, and predict behavior of individuals, teams, and organizations (e.g., why do individuals and teams behave the way they do in organizations?). Topics of interest include Leadership, Motivation, Team/Group Dynamics, Negotiation, Change, Attitudes. Organizational Behavior
Organizational Behavior A field of study that seeks to understand, explain, and improve human behavior in organizations Organizing Model
Organizing Model 6 Organizational Behavior
Organizational Behavior Firms with effective OB policies and practices maximize employee job performance and commitment
But can good OB actually improve a firm’s profitability levels? 7 Can Good OB Boost Profits? YES NO What are the arguments
for NO? For YES?
8 Does OB Matter?
Does OB Matter? Some of Fortune’s 100 Best (2010): 53. Nordstrom
– 1. SAS
58. Four Seasons
– 4. Google
68. Men’s Wearhouse
– 15. Zappos
73. American Express
– 18. Whole Foods
82. Marriott Intl.
– 36. Container Store 86. Publix
– 42. Adobe Systems
– 45. USAA
– 52. Booz Allen Hamilton 93. Starbucks Coffee
9 Does OB Matter?
Does OB Matter? Are the 100 Best more profitable than similar companies in those industries? – A recent study found a “matched firm” for each of the 100 Best of 1998 Matched firms were similar in size and industry, but had never made the list – The 100 Best firms outperformed their matches over a five year period
Source: Fulmer, I. S., Gerhart, B., & Scott, K. S. (2003). Are the 100 Best better? An empirical investigation
of the relationship between being a “great place to work” and firm performance. Personnel Psychology, 56, 965-993. 10 Why Google is #4
Why Google is #4 http://www.youtube.com/watch?v=j6hgm0 11 What makes Google so What makes Google so great? $8,000/year tuition reimbursement
Employees can take leave to pursue further education for up to 5 years and $150,000
Onsite perks (medical facilities, oil change and bike repair, valet parking)
Unlimited sick leave
27 days of PTO after one year
Free shuttles equipped with WiFi 12 Why Might OB Matter?
Why Might OB Matter? OB matters if it can add “value” to the firm. – Can good OB policies add value? To answer that, we need to understand where value comes from 13 Why Does OB Add Value?
Why Does OB Add Value? Resources have more value when they are:
– Rare Are good people hard to find? – Inimitable History that cannot be bought or copied Make numerous small decisions that cannot be observed by competitors Creating socially complex resources such as culture, teamwork, trust, and reputation is not easy 14 Is There Any Proof?
Is There Any Proof? One example: Consider the survival of 136 firms who initiated an IPO in 1988 – Examined company mission statements and organizational documents as a means of rating the value placed on OB practices
– By 1993, only 60% of the firms still existed. Firms that valued OB practices had a 19% higher survival rate
15 Is There Any Proof?
Is There Any Proof? 16 Is There Any Proof?
Is There Any Proof? Execs in 968 firms responded to questions about their OB practices – Data on turnover, sales, and stock price
– A onestandard deviation improvement in their question responses was associated with a 7% decrease in turnover, $27,000 more in sales per employee, and an $18,000 improvement in stock price per employee
17 So What’s So Hard?
So What’s So Hard? It is difficult to calculate the OB ROI, relative to investments in technology, equipment, etc.
OB practices have to be improved on a systemic basis—changing one thing rarely helps at all
Improving OB practices is a longterm process
18 So What’s So Hard?
So What’s So Hard? The Rule of 1/8: – 1/2 of organizations won’t believe the connection between how they manage their people and the profits they earn. – 1/2 of those who do see the connection will try to make a single change to solve their problems, – Of the firms that make comprehensive changes, probably only about 1/2 will persist with their practices long enough to actually derive economic benefits.
19 What do MBAs value?
What do MBAs value? Benchmarking study of exiting MBA graduates revealed that management courses were seen as lacking value and receiving too much emphasis
Five years later, those same MBA graduates reported that management and business communications courses were the most important to career success
Source: www.aacsb.edu 20
20 What do Managers What do Managers think?
“Perhaps the loudest complaint was about just how illprepared alums felt when faced with the politics and challenges of managing in the middle. Many say they should have been forced to take more organizational behavior classes, though "it's like trying to get someone to eat their spinach," concedes 40yearold Charles W. Breer, who has spent most of his postMBA career working for Northwest Airlines Corp. 21 What do Managers think?
What do Managers think? Breer says his hardest times were managing a 12person staff. "At a minimum, I wish someone had told me this would be one of the biggest challenges, and then given me some tips," says Breer.” Source: What's an MBA Really Worth? Business Week, September 22, 2003 (Survey of the MBA class of 1992) 22 Why “Soft Skills”
Why “Soft Skills” “The report, by two assistant professors of management at DePaul University, concludes that recruiters want business schools to pay more attention to peopleoriented skills like leadership and communication. Students, however, frequently complain that those "soft skills" won't get them jobs, and they're pressuring their business schools to focus instead on functional or technical content, the researchers say.” 23
Source: Companies and Business Students Differ on What Skills
M.B.A. Programs Should Teach. The Chronicle of Higher
Education, August 2, 2007 Can Good OB Boost Profits? YES NO Yes, but doing so requires a
systemwide commitment by the firm
24 Goals of This Course
Goals of This Course 25 Goals for the Course
Goals for the Course To give you a mental model that changes the way you see the organizational behaviors around you, while helping answer those why questions 26 Take Aways
Take Aways Good OB adds “value” – Good people are a valuable resource Rare and hard to imitate – Linked to employee productivity, firm profitability, and even firm survival – Bad OB can hurt profits Lawsuits, costs of turnover, low ROI 27 Drew gets it…
Drew gets it… “You have to manage people. You have to understand the strengths of the people you are working with. Everybody on your team has a role, and each role is just as important as the other. Your role as a business manager or a quarterback is to put your team or your company in the best position to succeed. And what that means is utilizing the strengths of each person. Everybody has strengths and weaknesses, and what you try to do is put everybody in the best position to succeed by utilizing their strengths.”
Drew Brees Krannert alum & Super Bowl MVP Next Class
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- Spring '11
- Master of Business Administration, good ob, OB practices, Good OB Boost