ATTITUDES AND JOB SATISFACTION= people management

Attitudes are evaluative statements—either favorable or unfavorable—about objects, people, or events.

They reflect how we feel about something. The statement “My pay is low” is the cognitive component of an
attitude— a description of or belief in the way things are. It sets the stage for the more critical part of an
attitude—its affective component. Affect is the emotional or feeling segment of an attitude and is reflected
in the statement “I am angry over how little I’m paid.” Finally, affect can lead to behavioral outcomes. The
behavioral component of an attitude describes an intention to behave in a certain way toward someone or
something—to continue the example, “I’m going to look for another job that pays better.”

 cognitive component The opinion or belief segment of an attitude

 affective component The emotional or feeling segment of an attitude.
 behavioural component An intention to behave in a certain way toward someone or something.

cognitive dissonance incompatibility between two or more attitudes or between behavior and attitudes.

What Are the Major Job Attitudes?

 Job Satisfaction which describes a positive feeling about a job, resulting from an evaluation of its
characteristics
 Job Involvement which measures the degree to which people identify psychologically with their job
and consider their perceived performance level important to self-worth.
 Organizational commitment The degree to which an employee identifies with a particular
organization and its goals and wishes to maintain membership in the organization.
 perceived organizational support (POS) The degree to which employees believe an organization
values their contribution and cares about their well-being.
 employee engagement An individual’s involvement with, satisfaction with, and enthusiasm for the
work he or she does.

PERSONALITY AND VALUES

 PERSONALITY Enduring characteristics that describe an individual’s behavior.

 Why does personality matter at work? Primarily to evaluate the fit with job/role, team, organization.
The most important reason managers need to know how to measure personality is that research has
shown personality tests are useful in hiring decisions and help managers forecast who is best for a
job. Two ways of measuring:

1. MBTI = common in organizations, but poor research support

The Myers-Briggs Type Indicator (MBTI) is the most widely used personalityassessment instrument in the
world. Respondents are classified as follows an these classifications together describe 16 personality types:

o Extraverted (E) versus Introverted (I). Extraverted individuals are outgoing, sociable, and assertive.
Introverts are quiet and shy.
o Sensing (S) versus Intuitive (N). Sensing types are practical and prefer routine and order. They focus
on details. Intuitives rely on unconscious processes and look at the “big picture.”
o Thinking (T) versus Feeling (F). Thinking types use reason and logic to handle problems. Feeling
types rely on their personal values and emotions.
o Judging (J) versus Perceiving (P). Judging types want control and prefer their world to be ordered
and structured. Perceiving types are flexible and spontaneous.
 2. Big Five Personality Test = less common, but more empirically valid. The MBTI may lack strong
supporting evidence, but an impressive body of research supports the thesis of the Big Five Model
—that five basic dimensions underlie all others and encompass most of the significant variation in
human personality. The following are the Big Five factors:
o Extraversion. The extraversion dimension captures our comfort level with relationships. Extraverts
tend to be gregarious, assertive, and sociable. Introverts tend to be reserved, timid, and quiet.
o Agreeableness. The agreeableness dimension refers to an individual’s propensity to defer to others.
Highly agreeable people are cooperative, warm, and trusting. People who score low on
agreeableness are cold, disagreeable, and antagonistic.
o Conscientiousness. The conscientiousness dimension is a measure of reliability. A highly
conscientious person is responsible, organized, dependable, and persistent. Those who score low
on this dimension are easily distracted, disorganized, and unreliable.
o Emotional stability. The emotional stability dimension—often labeled by its converse, neuroticism—
taps a person’s ability to withstand stress. People with positive emotional stability tend to be calm,
self-confident, and secure. Those with high negative scores tend to be nervous, anxious, depressed,
and insecure.
o Openness to experience. The openness to experience dimension addresses range of interests and
fascination with novelty. Extremely open people are creative, curious, and artistically sensitive.
Those at the other end of the category are conventional and find comfort in the familiar.

How Do the Big Five Traits Predict Behavior at Work? Research has found relationships between these
personality dimensions and job performance.

VALUES Values represent basic convictions that “a specific mode of conduct or end-state of existence is
personally or socially preferable to an opposite or converse mode of conduct or end-state of existence.”
They contain a judgmental element in that they carry an individual’s ideas as to what is right, good, or
desirable. Values have both content and intensity attributes. The content attribute says a mode of conduct
or end-state of existence is important. The intensity attribute specifies how important it is.

Terminal versus Instrumental Values Rokeach Value Survey Milton Rokeach created the Rokeach Value
Survey (RVS). 65 It consists of two sets of values, each containing 18 individual value items. One set, called
terminal values, refers to desirable end-states. These are the goals a person would like to achieve during his
or her lifetime. The other set, called instrumental values, refers to preferable modes of behavior, or means
of achieving the terminal values

 terminal values Desirable end-states of existence; the goals a person would like to achieve during his
or her lifetime. Ex= Prosperity and economic success, Freedom, Health and well-being, World peace,
Social recognition, and Meaning in life
 instrumental values Preferable modes of behavior or means of achieving one’s terminal values.
EX: Self-improvement, Autonomy and self-reliance, Personal discipline, kindness, Ambition, and
Goal-orientation.

Generational Values Depends on the bith date

 Boomers, 1965–1985 Success, achievement, ambition, dislike of authority; loyalty to career

 Xers 1985–2000 Work/life balance, team-oriented, dislike of rules; loyalty to relationships
 Nexters 2000  Confident, financial success, self-reliant but team-oriented; loyalty to both self and
relationships

Person–Job Fit=> The effort to match job requirements with personality characteristics is best articulated
in John Holland’s personality–job fit. A theory that identifies six personality types and proposes that the fit
between personality type and occupational environment determines satisfaction and turnover.

PERSON- ORGANIZATION FIT The person–organization fit essentially argues that people are attracted to
and selected by organizations that match their values, and they leave organizations that are not compatible
with their personalities.
WEEK 2 WHAT IS MOTIVATION?? WILLINGNESS TO EXERT PERSISTEN EFFORT

OWARD GOALS. Performance is made by Ability x motivation, so it is not sufficient only motivation to
success. We define motivation as the processes that account for an individual’s intensity, direction, and
persistence of effort toward attaining a goal. 4 While general motivation is concerned with effort toward any
goal, we’ll narrow the focus to organizational goals in order to reflect our singular interest in work-related
behavior.

What would motivate you to look for work and them show up work day after day?

 Motivated by the need to provide for your family

 To have success or only for money

So motivation is close to NEEDS OR GOALS. Motivation can be showed in desire, commitment, fear or anger.

MOTIVATION IS CREATED BY EXTERNAL AND INTERNAL SOURCE:

1. INTERNAL: personal values, interests, desires

2. EXTERNAL: rewards, recognition, feedback from others
3. INDIVIDUAL AND SOCIAL ASPECT= influence of family, friends, colleagues

EXTERNAL MOTIVATION MOTIVATING WITH MONEY REWARDS

 Old system=> fixed pay, benefits, perks

 New system=> variable tied to goal. High incentive with low base.
Cafeteria-style benefits= individual can choose what is more motivating
 IT IS EASIER FOR MANAGER TO CONTROL, TYPICALLY A KNEE JERK REACTION

ISSUES

 Short term effect could be effective but not in the long one
 REINFORCEMENT THEORY= behaviour exists only when reward exists, when it is taken away individuals
find themselves in a worse position
 SATIATION EFFECTS=> the more we ger the less it matters
 COGNITIVE DISSONANCE=> being externally rewarded for something actually makes us less interests in
that behaviour

PROBLEM WITH EXTERNAL MOTIVATION

 Maintenance costs=> hard to keep tack of performance evaluation, compensation system

 Reactance= looking back, people ae often not satisfied with extrinsic rewards
 Line of sight problem=> how often do employees really think about their salary during the day? More
focus on the reward than the work they are doing.
 Unethical behaviour

MONEY REALLY MOTIVATE? Money is not a motivating factor, there is something else=> passion, internal
motivation to create something to be proud, do something that you love,.. Even extreme wealth does not
necessarily serve as a motivator for everyone.

For a certain amount of money, more money more satisfaction, after this amount the relationship is not
linear growth. SO THE RELATION BETWEEN MOTIVATION AND COMPENSATION IS HARD TO UNDERSTAND
AND CAN BE INFLUENCED BY DIFFERENT THINGS.

INTRISIC MOTIVATION=> internal motivation that force and push people to work. IT IS THE MOST EFFECTIVE
BUT MORE DIFFICULT TO IMPLEMENT, LASTS LONGER AND WITH BIGGER EFFECT.
THEORY OF MOTIVATION CAN BE DIVIDED IN TWO

 Content theories of motivation factors influencing motivation (needs and desire)

Maslow’s need hierarchy theory, Herxberg’s motivator-hygine theory, McClelland theory, Sel
determination theory.
 Process theories of motivation process by which factors and cognitions influence motivation.
Adam’s equity theory, Self-efficacy theory, Goal-setting theory, Expectancy theory

MASLOW

The best-known theory of motivation is Abraham Maslow’s hierarchy of needs. 5 Maslow hypothesized that
within every human being, there exists a hierarchy of five needs:

1) Physiological. Includes hunger, thirst, shelter, sex, and other bodily needs.
2) Safety. Security and protection from physical and emotional harm.
3) Social. Affection, belongingness, acceptance, and friendship.
4) Esteem. Internal factors such as self-respect, autonomy, and achievement, and external factors such
as status, recognition, and attention.
5) Self-actualization. Drive to become what we are capable of becoming; includes growth, achieving
our potential, and self-fulfillment.

Higher-order needs are satisfied internally (within the person 5-4), whereas lower-order needs are
predominantly satisfied externally (by things such as pay, union contracts, and tenure 1-2-3).

HERZBERG’S MOTIVATOR-HYGIENE THEORY

A theory that relates intrinsic factors to job satisfaction and associates extrinsic factors with dissatisfaction.
Also called motivation hygiene theory. hygiene factors Factors—such as company policy and administration,
supervision, and salary—that, when adequate in a job, placate workers. When these factors are adequate,
people will not be dissatisfied.

According to Herzberg, the factors that lead to job satisfaction are separate and distinct from those that
lead to job dissatisfaction. Therefore, managers who seek to eliminate factors that can create job
dissatisfaction may bring about peace, but not necessarily motivation. They will be placating rather than
motivating their workers. As a result, Herzberg characterized conditions such as quality of supervision, pay,
company policies, physical working conditions, relationships with others, and job security as hygiene
factors.
If we want to motivate people on their jobs, Herzberg suggested emphasizing factors associated with the
work itself or with outcomes directly derived from it, such as promotional opportunities, personal growth
opportunities, recognition, responsibility, and achievement. These are the characteristics people find
intrinsically rewarding

JOB CHARACTERISTICS MODEL (content theories of motivation) => a framework for understanding how
specific job features influence intrinsic motivation and overall performance.

Developed by Hackman and Oldham, the JCM focuses on five core job characteristics: skill variety, task
identity, task significance, autonomy, and feedback. These characteristics are believed to enhance
motivation, job satisfaction, and performance.

 DOES NOT TAKE INTO ACCOUNT THE PSYCHOLOGICAL NEED OF EMPLOYEES

 5 CORE JOB CHARACTERISTIC=> SKILL VARIETY, TASK IDENTITY, TASK SIGNIFICANCE, AUTONOMY,
FEEDBACK. Job with positive level of this characteristic is more like to have high satisfaction, high
internal work motivation and high-quality work performance.
 WIDELY STUDIED AND VALIDATED BY RESEARCHERS.

CORE JOB CHARACTERISTIC=> more high more satisfaction,..

1) SKILL VARIETY=> requires an individual to perform a variety of tasks that require using different skills.
2) TASK IDENTITY=> requires an individual to perform a whole or completely identifiable piece of work
3) TASK SIGNIFICANCE=> how the job affects the lives of the people (nurse)
4) AUTONOMY=> how much individual are free in scheduling and determining procedures
5) FEEDBACK=> clear information about how effectively the task is being done (regular feedback to
improve performance)

FEEDBACK => information about performance. Essential for:

 Promoting self awareness

 Self-improvement, Overall growth and development
 Instructional and motivation performance management
 2 TYPE: SUPERIOR SUBORDINATE, 360 DEGREE
 Functions=> instructional to increases quality, motivation to get people work harder
 Must be accurate and comes from credible sources and must be fair

How to react to poor performance? How to ensure they listen to you? SANDWICH METHOD, Give feedback
in front of other staffers. We can combine the core dimensions into a single predictive index, called the
motivating potential score (MPS)

OUTCOME OF THIS THEORY

Job well balance with all of this component allows employees to feel: MEANINGFULLNESS, RESPONSIBLE
FRO THE OUTCOME, UNDESTANDING THE ACTUAL RESULTS OF WORK ACTIVITIES. This leads to high internal
work motivation, high job satisfaction, high quality work performance, low absenteeism and turnover.

How can a Manager apply this theory??

1) Identify the core job dimensions.

2) Assess employees needs=> find the ones that are most important
3) Redesign the job to make more motivating (more autonomy or more skill variety)
4) Implement and evaluate the job redesign.

Let’s look at some of the ways to put JCM into practice to make jobs more motivating:
 1) Job Rotation If employees suffer from over routinization of their work, one alternative is job
rotation, or the periodic shifting of an employee from one task to another with similar skill
requirements at the same organizational level (also called cross-training).
2) Job Enrichment Job enrichment expands jobs by increasing the degree to which the worker controls
the planning, execution, and evaluation of the work.
3) Flextime
4) Job Sharing Job sharing allows two or more individuals to split a traditional 40-hour-a-week job.
5) Telecommuting => it refers to working at home at least 2 days a week on a computer linked to the
employer’s office. 29
6) Employee involvement is a participative process that uses employees’ input to increase their
commitment to the organization’s success

PROCESS THEORY

ADAM’S EQUITY THEORY=> MOTIVATION IS A FUCTION OF FAIRNESS IN SOCIAL EXCHANGE. Jane’s

situation illustrates the role that equity plays in motivation. If we perceive our ratio to be equal to that of
the relevant others with whom we compare ourselves, a state of equity exists; we perceive that our
situation is fair and justice prevails. When we see the ratio as unequal and we feel under rewarded, we
experience equity tension that creates anger. When we see ourselves as overrewarded, tension creates
guilt. J. Stacy Adams proposed that this negative state of tension provides the motivation to do something
to correct it. 3 elements, what you put in the job??

 INPUT= education, skills, creativity,..

 OUTCOME= pay, medical benefits, job security,..
 RELEVANT OTHER= someone with whom you compare your ratio of outcome
 Negative and positive unfair are not motivating. So both if our ratio is bigger or lower than
relevant other’s ration

We consider different type of justice:

 distributive justice= Perceived fairness of the amount and allocation of rewards among individuals
 interactional justice= The perceived degree to which an individual is treated with dignity, concern, and
respect
 organizational justice = An overall perception of what is fair in the workplace, composed of distributive,
procedural, and interactional justice
 procedural justice= The perceived fairness of the process used to determine the distribution of rewards

GOAL SETTING THEORY => Goal is what an individual is trying to accomplish. A theory that says that specific
and difficult goals, with feedback, lead to higher performance.

 PERFORMANCE OUTCOME GOAL=> Targets specific end result

 LEARNING GOAL=> Encourages creativity, learning, and skill development

MOTIVATION MECHANIS=> goal direct attention, regulates efforts, increases persistence, fosters
development of task strategies and action plans.

1) SET SMART GOAL

Specific • Measurable • Attainable (but still difficult) • Results-oriented • Time-bound
2) PROMOTE GOAL COMMITMENT
Explain the commitment, create a line of sight, Create line of sight (explain strategic goals and how
followers can contribute) • Let employees set their own goals (or participate in goal-setting) • Build
goal ladders of progressively more difficult goals
3) PROVIDE SUPPORT AND FEEDBACK
Victor Vroom's Expectancy Theory.

Explain how people make decision, how they are motivated to behave in ways that produce valued
outcomes. They are motivated when they believe that efforts it is linked to performance and this to
rewards. It focus on three components: expectancy, instrumentality and valence.

 EXPECTANCY=> belief that increase effort leads to increase performance (harder we try better
performance and results). It is important when performance is objectively measured.
Influenced by:
o Self esteem
o Previous success at the task
o Help received.
o Having info and materials necessary to complete the task
o Self- efficacy=> belief in one’s ability to do a task, it depends to the task.
o Supervisor’s expectations= PYGMALION EFFECT= enhance performance of subordinates from
whom supervisors expect more. More expectation more motivation to do a good job
 INSTRUMENTALITY => belief that certain performance could lead to certain outcomes or rewards.
(good job = good reward, we can see that performance can be translate in monetary outputs)
 VALENCE => is the value that employees place on the output, so how they evaluate the reward.

What a manger can do??

 Assessing employees’ expectancy beliefs=> offer help, provide opportunities to practice and master the
task, have someone model the behaviour
 Assessing employees’ instrumentality=> do employees het paid regularly, do their efforts go
unnoticed?. Do they receive fair performance evaluation? Do their performance get recognised?
 Assensing employess’ valance=> do employees value their rewards??

WEEK 3 WHAT IS POWER?? POWER IS THE ABILITY TO CONTROLL AND INFLUENCE OTHERS and can be
significant impact. A capacity that A has to influence the behavior of B so that B acts in accordance with A’s
wishes. Three main types: formal position, personal characteristics, and social network.

1) POWER ASSOCIATED TO FORMAL POSITION

Depend on the access to resources and how you can control them. Formal power is based on an
individual’s position in an organization. It can come from the ability to coerce or reward, or from
formal authority.
 REWARD POWER: someone who can distribute rewards others view as valuable will have power over
them. Rewards are visible and increase commitment and sense of loyalty, but they are costly and must
be fair and secure to be a source of power. YOU GIVE THE INFLUENCE WITH POSITIVE ESPECTATIONS
 Tangible rewards= depend on the leadership hierarchy
 Intangible rewards= does not depend on the leadership hierarchy
 COERCIVE POWER=> control in using punishment, GIVE INFLUENCE WITH NEGATIVE ESPECTATIONS.
The coercive power base depends on fear of the negative results from failing to comply. It rests on the
application, or the threat of application, of physical sanctions such as the infliction of pain, frustration
through restriction of movement, or the controlling by force of basic physiological or safety needs.
 Leads to immediate responses
 Effective for clear and simple missions
 Ensures respect of minimum guidelines
 Less suitable in the longer term= high frustration and low job satisfaction and high turnover
 No room for creativity and innovation
 LEGITIMATE POWER=> It represents the formal authority to control and use organizational resources
based on structural position in the organization. With some positions come certain resources.
Sometimes even without resources occupying a position can boost your influence. Goes behind having
the top position. IS BROADERMTHEN OTHER POWER, COMES FROM THE POWER TO MAKE SPECIFIC
DECISION RIGHT THERE ON THE SPOT
 Effective in protect your authority from other people or powerful rivals
 Risk of being bureaucratic when the position and capability is detached
 Too much reliance on rules and procedures
2) PERSONAL CHARACTERISTICS= Persona power comes from an individual’s unique characteristics
 EXPERT POWER=> can be rapidly developed and is transferable but can diminish. DEPEND ON YOUR
CAPABILITY= KNOWLEDGE, SKILL, QUALIFICATION. To work people has to recognise the power of your
knowledge. (doctor)..
 Easy to build and transferable to other political assets.
 Transferable to other political assets
 Linked to reputation, social network and charisma
 Diminishes fast as rivals improve
 Needs to be constantly update
 REFERENT POWER=> fosters harmony and voluntary commitment but requires trust and faces
leadership risks. (celebrities). Referent power is based on identification with a person who has
desirable resources or personal traits. If I like, respect, and admire you, you can exercise power over me
because I want to please you.
 Disarms potential tensions.
 Effective in small organizations
 Strong and voluntary commitments from others
 Long and difficult process
 Weak impact in large or multi- layered organizations
 High level of leadership risk
3) SOCIAL NETWORK=> Relational power is influenced by the quantity and quality of your
connections. Having numerous contacts provides more opportunities, but the value also depends
on the influence and resources those connections bring. (Medici family)
Relational power enhances other power resources but can't wield significant influence on its own.
Managing extensive contacts requires expertise, and an excess of connections without foundational
resources can hinder your career.
 PRO Operate as a leverage factor for other political assets
 CONS= Marginal implications

POWER TACTIS

Principles of legitimacy, rational persuasion and inspirational appeals. Legitimacy relies on perceived
authority, rational persuasion uses facts and logical arguments, and inspirational appeals employ
emotionally compelling messages. These tactics require credibility, well-researched arguments, and
alignment with the target audience's values. NB=> any tactic’s adequacy is dependent on the context.
Ethical considerations and positive relationships should balance any decisions about tactics.

STRAT WITH SOFT AND THE HARD

What power tactics do people use to translate power bases into specific action?

Some tactics are more effective than others. Rational persuasion, inspirational appeals, and consultation
tend to be the most effective, especially when the audience is highly interested in the outcomes of a
decision process. Pressure tends to backfire and is typically the least effective of the nine tactics. 18 You can
also increase your chance of success by using two or more tactics together or sequentially, as long as your
choices are compatible. 19 Using both ingratiation and legitimacy can lessen negative reactions to your
appearing to dictate outcomes, but only when the audience does not really care about the outcome of a
decision process or the policy is routine. 20

1) LEGITIMACY= RELYING ON AN AUTHORITY FIGURE OR SAYING THAT A REQUEST CORRESPONDS

ORGANIZATIONAL POLICIES OR RULES. It relays on PERCEPTION OF AUTHORITY, it can be used when this
perception is clear and straightforward.
Authority=> People defer to experts (identified by credentials and status). Why this principle works: •
We are socialized to respect and obey authority figures • Genuine authority figures usually possess high
levels of knowledge, wisdom, and power (so it is usually good to comply)
Ex: Stanley Milgram experiment
2) RELATIONAL PERSUATION= PRESENTING LOGICAL ARGUMENTS AND FACTUAL EVIDENCE TO
DEMONSTRATE THAT A REQUEST IS RESONABLE
Works when: The speaker is perceived trustworthy, argument is based on credible evidence, the
audience is attentive.
3) INSPIRATION APPEAL= DEVELOPING EMOTIONAL COMMITMENT BY APPEALING TO A TARGET’S VALUE,
NEEDS, HOPES, AND ASPIRATIONS. Is powerful if we work for a complex tasks
The message depends on the audience and focus in positive enforcement
4) CONSULTATION= INCREASING SUPPORT BY INVOLVING THE TARGET IN DECIDING HOW TO ACCOMPLISH
YOUR PLANS. involves incorporating input into decision-making Ex: soliciting feedback involving teams
members before making decision.
Works better when: Perceived as sincere and open to feedback, provided feedback was taken into
consideration.
5) EXCHANGE= OFFERING REWARD OR BENEFIT IN EXCHANGE FOR SUPPORT. It is linked to the reward
power. PROS based on mutual benefits, flexible and adapted to different situations.
CONS one must be able to follow through on the offer, can bee seen as manipulative.
 Is based on the rule of reciprocity we treat as we are treated. We can have this giving first, people
usually repay favors.
6) COALITIONS= BUILDING A GROUP OF PEOPLE THAT CAN SUPPORT A PARTICULAR GOAL OR DECISION.
unite like-minded people for shared goals, People can pool their resources and expertise to achieve
goals. PRO= achieve goals more efficiently and effectively and increase their influence over the
organization.
Works better when: participants share a common goal or interest, must have a clear vision and a plan,
participants have complementary skills and resources.
DRAWBACKS= coalition may create conflict and division among groups. Can be seen as a threat by those
who oppose.
7) PERSONAL APPEALS= leverage relationships = ASKING FOR COMPLIANCE BASED ON FRIENSHIP OR
LOYALTY. PROSS mobilize strong support from others with small efforts. CONS can be seen as
favouritism and reduce and erode trust and credibility of the evaluation system
WORKS BETTER= when personal appeal is sincere and genuine and not manipulative. The other person
has to see value in the relationship and that maintaining the relationship is important to the other.
8) INGRATIATION = employs charm and flattery. USING FLATTERING, PRAISE TO INFLUENCE OTHERS AND
GAIN THEIR FAVOR. (Empolyees to his boss).
PROS simple and immediate. CONS too much flattery can harm one’s credibility.
9) PRESSURE= uses threats to influence others. USING THREATS, DEMAND, COERCION TO INFLUENCE
OTHERS. It is used from someone in position of power or authority.
WORKS BETTER WHEN= it is used with a clear timeline, opportunities are seen more valuable when
they become less available. (RULE OF SCARCITY)
PROS Generate fast responses from others, CONS Leads to resentment or resistance. Can damage
trust and relationship. It has to be used with others.

If a don’t have power can I influence people BOTTOM UP?? 6 PRINCIPLES TO CREATE DEPENDENCE:

1) Reciprocity=> People feel obligated to repay others, if you are the first you create sense of
obligation, the recipient feels guilty is he does not reciprocate.
 “Door-in-the-face”
 “That’s not all”
2) Commitment & Consistency=> People align with their clear commitments. Why the principle
works?? Personal consistency is highly valued by society. Consistency provides a shortcut for making
decisions. 4 tactics:
 Foot in the door=> Influencer starts with small request to gain eventual compliance with a (related)
larger request (start with something small and then more and more)
 Low ball=> Influencer obtains a commitment from the person (via a low-cost commitment), and then
reveals the hidden costs of the request. (hidden costs,..)
 Labelling=> Influencer assigns a label to an individual and then requests a favour consistent with that
label (do compliments to have favour after)
 Legitimization of paltry favours=> Influencer makes a small amount of aid acceptable (even a penny can
help). Strategy is successful because you ask for small things. (Can you stay only 10 min?)
3) Social proof=> People follow the lead of similar others (everyone is choosing this Hotel).
This works because: Generally, we will make fewer mistakes by paying attention to what others are
doing • People are mentally lazy; following the lead of others doesn’t take much thinking
4) Liking=> People prefer to comply with the requests of people they know and like. People are willing
to pay if a specific person promote it.
HOW DOES IT WORKS?? when you like someone, you tend to trust them and the fact that they
won’t take advantage of you. Influenced by Similarity, praise, physical attractiveness, repeated
contact, repeated contract, association.
 5) Scarcity=> People want more of what they can have less of.
WHY THIS WORKS?? Things that are difficult to attain are generally more valuable. As things
become less available, we lose freedom; most people hate to lose freedoms they already have
6) Authority=> People defer to experts (identified by credentials and status)
Why this principle works: • We are socialized to respect and obey authority figures • Genuine
authority figures usually possess high levels of knowledge, wisdom, and power (so it is usually good
to comply)

POWER CURRUPT POWER IS THE ABILITY TO CONTROLL AND INFLUENCE OTHERS and can be significant
impact. Power can lead to both positive and negative behaviours, such as assertiveness or unethical
conduct. power can corrupt, leading individuals to act in self-serving ways and disregard others'
perspectives. To mitigate the risks of corruption, the importance of ethical leadership and systems of
accountability is emphasized, creating a culture of ethical conduct within organizations.

 Individual with power can speak more, interrupt others, taking control of conversation.
 Power is a source of unethical behaviour=> Lying, cheating, braking rules
 Power corrupt individuals because it can lead people to feel a senso of enticement= social dominance
 Individual with power doesn’t have empathy=> decision self-serving. They pay less attention to their
subordinates and respond less to their counterparts’ emotional displays in negotiation.

Power can be used to create positive change and aiding others. So it is necessary to mitigate the negative
aspect of power and avoid corruption. MITIGATE RISK OF POWER THAT CAN CORRUPT:

 ETHICAL LEADERSHIP => SET THE POWER USE FOR POSITIVE CHANGES. Ethical leaders prioritize the
well-being of others over self-interest, use the power to create positive change and create a culture of
ethical conduct.
 SYSTEM OF ACCOUNTABILITY= GRATER RESPOSABILITY FOR ACTION to use power ethically

WEEK 4 CAP 16 = ORGANIZATIONAL CULTURE

ORGANIZATIONAL CULTURE Organizational culture refers to a system of shared meaning held by

members that distinguishes the organization from other organizations. A SET OF VALUES, BELIEFS AND
BEHAVIOR PATTERNS THAT FORM THE CORE IDENTITY OF AN ORGANIZATION.

 Shared values and beliefs that underline a company’s identity

 Edgar Schein= beliefs, value and bahvioral norms are accumulate shared learning of an organization
 Has significant influence on behavior of employees
 Provides direction toward the “right way” of doing things
 Strong culture provides stability to an organization BUT it can also be a major barrier to change

Some time is difficult to distinguish an organization culture from the structure. Hardware and software, it is
necessary to ensure a coerce between the two. Some times structure change leads to culture change
(pandemic situation). Other time culture change leads to structure change (diversity and inclusion)

 ORG STRUCTURE= DIRECTS THE SOCIAL AND TECHNICAL LIFE OF MEMBERS IN AN ORGANIZATION.
 CULTURE PROVIDE MEANING AND LEGITIMACY TO THE WAY OF LIFE IN AN ORGANIZATION

WHY CULTURE MATTERS FOR ORGANIZATION? Culture influences control, motivation, and persistence of
employee behavior, and how it shapes a company's capabilities and competitive advantage. CULTURE IS
USEFUL: CONTROL, MOTIVATION AND PERSISTENCE.

 CULTURE CAN CONTROL= it is an informal reinforcement mechanism

 CULTURE ATTRACT NEW EMPLOYESS= generate commitment from people and may attract job
candidates, because generate community belonging and MOTIVATION. Create a sense of identity for
organization members.
 CULTURE CAN ENSURE CONSISTEN BEHAVIOR= culture facilitates commitment to something larger than
individual self-interest
 CREATE A COGNITIVE AND NORMATIVE ORDER
 LEAD TO COMPETITIVE ADVANTAGE AND BETTER PERFORMANCE= superior performance come from
the culture, the way in which people inside act and how they satisfy costumer.

CULTURE AND SUB CULTURE Most large organizations have a dominant culture and numerous
subcultures. A dominant culture expresses the core values a majority of members share and that give the
organization its distinct personality. 7 Subcultures tend to develop in large organizations to reflect common
problems or experiences members face in the same department or location. The purchasing department
can have a subculture that includes the core values of the dominant culture plus additional values unique to
members of that department. If organizations were composed only of numerous subcultures, organizational
culture as an independent variable would be significantly less powerful.

ICEBERG MODEL BY SCHEIN

 ARTIFACTS= visible and perceivable manifestation of values and norms. Material symbols and physical
arrangements. (language and stories, rituals and ceremonies, logo)
 Language and Stories: The specific jargon, slang, or terms used uniquely within the organization.
Stories may involve the organization's history, key people, major successes, and failures. These
narratives help to socialize new members into the culture.
 Rituals and Ceremonies: Regularly occurring activities and practices that are significant to the
organization. Rituals could be daily, weekly, or monthly practices that reinforce the company's
values and culture. Ceremonies are less frequent and may mark significant milestones or
achievements.
 Logo: The visual representation of the organization that often embodies its values, mission, or
history. A logo can be a powerful artifact, evoking feelings of loyalty or pride among members.
 ESPOUSED VALUES= explicitly articulated beliefs, philosophies and norms. Behavioural principles
(empathizing technology or employees first). CONSCIOUS LEVEL
 Commitment to Excellence: Striving for the highest quality in products, services, and performance.
 Integrity: Acting with honesty and honor without compromising the truth.
 Innovation: Encouraging creativity and new ideas to improve processes, products, or services.
 Respect for Individuals: Valuing diversity and ensuring an inclusive environment where every
employee feels respected
 Sustainability: Commitment to environmental protection and sustainability practices.
 BASIC ASSUMPTIONS= instinctive beliefs that are a natural part of organizational life. Implicit and taken-
for granted. UNCONSCIOUS LEVEL
 The Nature of Humans: Whether people are seen as good, evil, changeable, trustworthy, etc.
 The Nature of Work: Whether work is seen as a job, a career, or a calling.
 The Role of the Organization in Society: Whether the organization sees itself as serving the
shareholders, the community, the environment, etc.
 Relationships to Environment: How the organization relates to its environment, including
competitors, the market, and nature.
STRONG CULTURE A culture in which the core values are intensely held and widely shared.

 CAN BE AN ASSET= Like Brunello Cuccinelli, because a strong culture impacts: • Job attitudes and
performance • Task coordination and operational efficiency • Customer satisfaction and market share •
Profitability and revenue growth.
 CAN BE A LIABILITY= strong culture can lead to REGIDITY: • Barriers to M&A • Barriers to change •
Barriers to diversity • Toxicity & disfunctions • Institutionalization. Strong culture may end up
constraining an organization in volatile environment.
Ex: different culture in one workplace (American factory)=> conflicts, we can address them with social
events, communication,..

FACTOR THAT INFLUENCES CULTURAL STRENGHT

1) HISTORY
2) ORGANIZATIONAL SIZE= value and assumption spread easier in smaller business
3) GEOGRAPHICAL DISPERSION= shared beliefs and understanding more easily emerge among employees
located in the same region and can interact more frequently.
4) WORKFORCE DIVERSITY
5) RATE OF TURNOVER= high turnover makes setting and maintaining organizational culture much harder

ANALYZING CULTURAL PROFILE= measurement of culture

 Denison's Organizational Cultural Survey (DOCS) TRADE OFF BETWEEN STABILITY AND FLEXIBILITY,
EXTERNAL FOCUS VS INTERNAL FOCUS.
DOCS measures flexibility, stability, and key cultural factors like mission and adaptability.

The "DOCS" (Dimensions of Organizational Culture Profile) theory and Organizational Culture Profile (OCP)
theory are frameworks used to understand, describe, and analyze organizational culture. While there isn't a
widely recognized theory specifically named "DOCS" in the context of organizational culture, it's possible
there might be some confusion or a need for clarification regarding the terminology. In organizational
studies, theories and models like the Organizational Culture Profile (OCP) and Edgar Schein's model of
organizational culture are well-known. Below, I'll outline the general idea behind organizational culture
theories, including a brief overview of the OCP, and touch on Edgar Schein's dimensions, which might help
clarify the concepts related to your query.

 OCP evaluates dimensions such as innovation, aggressiveness, outcome orientation, stability, people
orientation, team orientation, and detail orientation.

The Organizational Culture Profile (OCP) is a theory developed by Charles O'Reilly, Jennifer Chatman, and
David Caldwell in the early 1990s. It is a framework used for assessing organizational culture through
identifying a set of values that are shared within an organization. The OCP theory suggests that
organizations can be described based on the prevalence of certain cultural values. This helps in
understanding the organization's culture and how it influences behavior, decision-making, and overall
organizational effectiveness. The OCP is particularly useful for identifying the cultural fit between individuals
and organizations, which can be crucial for recruitment, retention, and organizational performance.

1) Innovation and risk taking= degree to which employees are encouraged to be innovative and take risks.
2) Attention to detail. The degree to which employees are expected to exhibit precision, analysis, and
attention to detail.
3) Outcome orientation. The degree to which management focuses on results or outcomes rather than on
the techniques and processes used to achieve them.
4) People orientation. The degree to which management decisions take into consideration the effect of
outcomes on people within the organization.
5) Team orientation=>degree to which work activities are organized around teams rather than individual
6) Aggressiveness. The degree to which people are aggressive and competitive rather than easy-going.
7) Stability. The degree to which organizational activities emphasize maintaining the status quo in contrast
to growth.

CULTURE CREATION Culture creation occurs in three ways. First, founders hire and keep only employees
who think and feel the same way they do. Second, they indoctrinate and socialize these employees to their
way of thinking and feeling. And finally, the founders’ own behavior encourages employees to identify with
them and internalize their beliefs, values, and assumptions. When the organization succeeds, the founders’
personality becomes embedded in the culture

HOW DOES ORGANIZATIONAL CULTURE EMERGE?? Organizations are influenced by broader collectives like
nation, industry, and occupation, inheriting cultural beliefs from them. Founders also play a key role in
shaping culture through their personal characteristics, values, and actions. Their deliberate role modelling,
mission statements, and choices influence the organization's cultural development. However, conflicts and
inconsistencies can arise as new members bring their own beliefs. Influence:

 MACRO CULTURE= organizations are nested within broader collectives. Macro cultures offer sets of
languages, value, way of thinking.
 DIFFERENT PATTERNS OF ASSUMPTION= difference in power distance and feeling about collectivism
 DIFFERENCES IN OCCUPATIONAL CULTURES
 DIFFERENCES IN INDUSTRY CULTURES
 ROLE OF FOUNDERS= play a key role in shaping organizational culture. The transmit culture with ROLE
MODELING and Organizational organization.

HOW DO ORGANIZATION SUSTAIN THEIR CULTURE?? ROLE OF SENIOR MANAGEMENT=> KEEPING A

CULTURE ALIVE  Once a culture is in place, practices within the organization maintain it by giving
employees a set of similar experiences. No matter how good a job the organization does in recruiting and
selection, new employees need help adapting to the prevailing culture.
 ASA= INDIVIDUALS ARE ATTRACTED TO, SELECTED BY, AND STAY WITH ORGANIZATIONS THAT SUIT
THEIR PERSONAL CHARACTERISTICS.
o ATTRACTION= they choose to join those collectives whose members seem similar to them in personality
o SELECTION= recruitment system, the culture in a lot of company is a key criterion
o ATTRITION= employees leave an organization they do not fit in

 REWARD SYSTEM= also influence cultural maintenance. Promote behaviour that fit with the
organization culture. (if we rank team members in a group== competition)

 SOCIALIZATION=SUSTAIN AND PRESEV no matter how organization are good with asa, Socialization
integrates new and transitioning employees, while congruent reward systems reinforce cultural values.
However, conflicting rewards can undermine culture. This preservation of culture is explored, alongside
how organizations can adapt their culture when needed.
DEFINITION= PROCESS THROYGH WHICH NEW MEMBERS ARE TAUGHT TO SEE THE ORGANZIATIONAL
WORLD AS DO THEIR MORE EXPERIENCED COLLEGUES. process by which NEW employees learn an
organization’s values, norms, and required behaviors (takes 6 months – year, for 9am-5pm job)
A DELIBERATE PROCESS OF LEARNING THAT EMPLOYEES UNDERGO EVERY TIME THEY CROSS
ORGANIZATIONAL BOUDARIES

Three-phase model: (FROM OUTSIDER TO INSIDER)

1) ANTICIPATORY SOCIALIZATION The prearrival stage recognizes that each individual arrives with a set
of values, attitudes, and expectations about both the work and the organization.
2) ENCOUNTER The stage in the socialization process in which a new employee sees what the
organization is really like and confronts the possibility that expectations and reality may diverge.
3) CHANGE AND ACQUISITION Finally, to work out any problems discovered during the encounter
stage, the new member changes or goes through the metamorphosis stage. Mastering skills and roles
and adjusting to values, norms, & people

The three-part entry socialization process is complete when new members have internalized and accepted
the norms of the organization and their work group, are confident in their competence, and feel trusted and
valued by their peers. They understand the system—not only their own tasks but the rules, procedures, and
informally accepted practices as well. Finally, they know what is expected of them and what criteria will be
used to measure and evaluate their work. Successful metamorphosis should have a positive impact on new
employees’ productivity and their commitment to the organization and reduce their propensity to leave the
organization.To help with newcomer socialization a manager should set roles: expected behaviors of a given
position. Norm: shared attitude, opinion, feelings, or actions that guide social behavior.

SOCIALIZATION PRACTICES

 Collective vs. Individual=> Grouping newcomers vs. socializing done individually

 Formal vs. Informal=> Newcomer segregated from organization vs. no distinction
 Sequential vs. Random=> Fixed progression of steps to new role vs. ambiguous
 Fixed vs. Variable= Timetable for the assumption of role vs. no timetable •
 Investiture vs. Divestiture => Affirmation of incoming identities vs. denial
 Serial vs. Disjunctive=> Role model vs. no role model

CHANGE ORGANIZATION CULTURE

Culture has impact on organizational effectiveness, to improve performance in a changing enviorment we

can change our culture, but HOW??
 Kurt Lewin's unfreeze-change-refreeze model, emphasizing the stages of destabilizing the status quo,
making changes, and solidifying the new state. Organization are close system, in which driving forces
push organization away from the status quo and restraining forces keeps the system in the status quo.
1) Prepare organization for change
2) Making all the necessary change
3) Making sure that changes stick

THIS IS SCHEIN ELABORATION The importance of aligning attitudes, behaviors, and values for successful
cultural change is discussed, and the complexity of changing beliefs is highlighted. Culture change interest
all the tree level of culture not only the evident part= changing the beliefs that justify behaviour not only
behaviour.

 UNFREEZE= there is the need to motivate and create tight enviorment for change. LEADERS MUST
SHARE DISCONFIRMING INFORMATION (Link status quo to indicator), INDUCE SURVIVAL ANXIETY.
CREATE PSYCHOLOGICAL SAFETY TO OVERCOME LEARNING ANXIETY
 CHANGE= after a senso of unsatisfaction related to the status quo, the next stage: FACILITATE LEARNING
OF NEW BELIEFS THROUNG: ROLE MODELLING AND TRIAL AND ERROR LEARNING
 REFREEZE= it is necessary to stabilize and reinforce the new state= internalize new beliefs by
incorporation= new Habits and new group norms.

ORGANIZATION STRUCTURE

Organization structure= framework that defines how company operates, how job tasks are formally
divided, grouped, and coordinated. Organization chart= way to represent it. Managers need to address six
key elements when they design their organization’s structure: work specialization, departmentalization,
chain of command, span of control, centralization, and decentralization, and formalization.

Structure change with strategic goals and culture= ex flat structure can be used in a start up (no hierarchy),..

How to design the structure of an organization??

 Tayloristic approach= maximize the production efficiency based on the work specialization based on the
scientific methods (assembly line). DIVISION OF LABOUR, SPECIALIZATION,MANAGEMENT (control)
Implication=> efficient and streamlined process, workers autonomy in tasks and movements is
dramatically reduced. (call center, MC Donald)
 Bureaucratic approach = MAX WEBER= vertical division of labour= HIERARCHIC LEVELS AND
BUROCRACY. For Weber this approach imposes constraints on human behaviour, prevents devious
behaviors and inefficiency. The goal is to increase professionalism, meritocracy, and transparency.
o Management follows the rules.
o Employment based on technical qualifications.
o Work is allocated by expertise.
 Human relations approach= approach on human being. The purpose is to leverage worker’s satisfaction
and motivation to increase productivity. Elton Mayo:
o Workers were more productive in response of being observed not because of the variation in
lighting.
o Relation matter as much as the formally designed organization
 o Managers’ behavior affect works’ behavior and outcome. Conflicts are resolved through
communication.
 Contingency approach= interaction with the environment= how organization can cope with
environmental uncertainty and what organization structure are suitable for different environmental
conditions. THE EFFECTIVENESS OF A GIVEN ORGANIZATIONAL STRUCTURE DEPENDS ON ITS FIT WITH
THE ENVIRONMENT.

Key dimensions to create organizational structure:

1) WORK SPECIALIZATION=> To what degree are activities subdivided into separate jobs?
Work specialization, or division of labour, to describe the degree to which activities in the organization
are subdivided into separate jobs. The essence of work specialization is to divide a job into a number of
steps, each completed by a separate individual.
 SPECIALIZED WORK= employees become expert and greater efficiency and productivity

2) DEPARTMENTALIZATION=> On what basis will jobs be grouped together?

Once jobs have been divided through work specialization, they must be grouped so common tasks can
be coordinated. One of the most popular ways to group activities is by functions performed, We can
also departmentalize jobs by the type of product or service the organization produces or on the basis of
geography= if we divide in the correct way GRATER COORDINATION IN RESOURCE MANAGEMENT
 FUCTION= group of employees based on their area of expertise or specialization (sharing of knowledge)
 PRODUCT/PROJECT BASED DEFINITION= people from different teams works on a specific product, this
allowed the integration of different area
3) CHAIN OF COMMAND=> To whom do individuals and groups report?
The unbroken line of authority that extends from the top of the organization to the lowest echelon and
clarifies who reports to whom.
 FORMAL LINE OF AUTHORITY= chain of command to clarifies who is in change and who made the
decision in timely and efficient manner

NB= We can’t discuss the chain of command without also discussing authority and unity of command.
Authority refers to the rights inherent in a managerial position to give orders and expect them to be
obeyed. To facilitate coordination, each managerial position is given a place in the chain of command, and
each manager is given a degree of authority in order to meet his or her responsibilities. The principle of
unity of command helps preserve the concept of an unbroken line of authority. It says a person should have
one and only one superior to whom he or she is directly responsible. If the unity of command is broken, an
employee might have to cope with conflicting demands or priorities from several superiors.

4) SPAN OF CONTROL=> How many individuals can a manager efficiently and effectively direct?
The number of subordinates a manager can efficiently and effectively direct. All things being equal, the
wider or larger the span, the more efficient the organization.
 NARROW SPAN OF CONTROL= narrow span of control means the manager has fewer employees
reporting. MORE hand on management . This is typical in more hierarchical organizations with multiple
levels
But narrow spans have three major drawbacks. First, they’re expensive because they add levels of
management. Second, they make vertical communication in the organization more complex. The added
levels of hierarchy slow down decision making and tend to isolate upper management. Third, narrow
spans encourage overly tight supervision and discourage employee autonomy.
 WIDE SPAN OF CONTROL= GREATER FLEXIBILITY AND AUTONOMY wide span of control means a
manager has several employees reporting to them directly. This is common in flatter organizations
where there are fewer levels of hierarchy.
5) CENTRALIZATION AND DECENTRALIZATION=> Where does decision-making authority lie?
Centralization refers to the degree to which decision making is concentrated at a single point in the
organization.
 CENTRALIZATION=top managers make all the decisions, and lower-level managers merely carry out their
directives. In organizations at the other extreme, decentralized decision making is pushed down to the
managers closest to the action (GREATER EFFICIENCY)
 DECENTRALIZATION=> A decentralized organization can act more quickly to solve problems, more
people provide input into decisions, and employees are less likely to feel alienated from those who
make decisions that affect their work lives. More flexible and responsive. GREATER INNOVATION AND
EMPLOYEES EMPOWERMENT

6) FORMALIZATION=> To what degree will there be rules and Regulations to direct employees and
managers? Formalization refers to the degree to which jobs within the organization are standardized.
 HIGH=> If a job is highly formalized, the incumbent has a minimal amount of discretion over what to do
and when and how to do it. Employees can be expected always to handle the same input in exactly the
same way, resulting in a consistent and uniform output. GREATER CONSISTENCY AND CONTROL
 LOW=> Where formalization is low, job behaviors are relatively unprogrammed, and employees have a
great deal of freedom to exercise discretion in their work. Standardization not only eliminates the
possibility of employees engaging in alternative behaviours, but it even removes the need for
employees to consider alternatives. GREATER FLEXIBILITY AND ADAPTABILITY

7) BOUDARY SPANNING= connecting and collaborating across different departments functions or external
entities to achieve common goals.
 Break down silos
 Integrates different parts of the organization to achieve strategic goals.

DIFFERENT COORDINATION OF THIS VARIABLES LEADS TO DIFFERENT TYPE OF STRUCTURE:

1) FUNCTIONAL STRUCTURE= grouping activities from their technical and knowledge domain
(professional and technical expertise required)

Typical of young and small organization FOCUS ON ONE

BUSINESS LINE.

ONE PRODUCT OR SIMILAR PRODUCT

ECONOMIES OF SCALE, EFFICIENCY

PRO CONS
 DEVELOPMENT OF IN DEPTH KNOWLEDGE AND  SLOW RESPONSIVENESS TO CHANGE IN
SKILL EXPERTISE (specialization) MARKETS
 EASY TRANSFER OF RESOURCES ACROSS  DIFFICULTY IN LINKING ACROSS FUNCTIONS (no
ACTIVITIES integration)
 CONTROL AND INCENTIVE SYSTEM TAILORED TO  UNCLEAR ASSESSMENTS OF RESPONSIBILITY
FUNCTIONAL STRENGTHS AND ACCOUNTABILITY (conflict)

2) DIVISIONAL STRUCTURE= activities are grouped by products or services.

 People perform a variety of tasks and activity within the division. People have different technical
expertise working for the same product.
Each division becomes a separate profit center, enabling efficient monitoring and accountability.

DIFFERENTIATION, FOCUS ON PRODUCT, FLEXIBILITY LESS SPAN OF CONTROL

PRO CONS
 BETTER MONITORING OF PROFIT  DUPLICATION OF ACTIVITIES AND RESOURCES
 DECENTRALIZED DECISION MAKING  CONFLICTING GOALS
 FAST RESPONSENS AND ADAPTATION TO  NO ECONOMIES OF SCALE
CHANGES IN THE ENVIORMENTS

3) GEOGRAPHICAL STRUCTURE= Activities grouped by the geographical area they serve. Units focus on
local customer needs and customization, but may
lead to redundancy and isolation. This structure
is common among multinational organizations
and those targeting diverse customer segments.

ENSURE BRAND RECOGNITION AND CUSTOMIZATION TO

LOCAL NEEDS. DECENTRALIZATION OF DECISION MAKING

PRO CONS
 DEEP CUSTOMER KNOWLEDGE  DUPLICATION OF ACTIVITIES AND RESOURCE
 CLOSE CUSTOMER RELATIONSHIP  FOREGONE OPPORTUNITIES FOR SYNERGIES
 TAILORED PRODUCTS AND SERVICE TO AND LEARNING
DIFFERENTIATED CUSTOMER NEEDS
4) HYBRID STRUCTURE
 MATRIX STRUCTURE =>
Combines two or more types of structures,
typically the functional structure (based on
functions like marketing, finance,
production, etc.) and the divisional structure
(based on products, projects, geographic
markets, etc.).

PRO CONS
 CAPABLE OF AVOIDING THE PROBLEM OF  HIGH LEVELS OF STRESS (two boss)
SUBUNIT/ FUCTIONAL ORIENTATION  CONFLICT
 POTENTIAL FOR TECHNOLOGICAL OR  DIFFERENT GOALS AMONG MANAGERS
GEOGRAPHICAL SYNERGIES
 FLEXIBILITY IN SHARING RESOURCES
 HIGH ADAPTABILITY TO THE ENVIORMENTS

 FRONT BACK STRUCTURE=> group activities by product and market

The front-back structure is an organizational
model divided mainly into two parts: the front
office, which deals with customer-facing
activities such as sales, marketing, and
customer service; and the back office, which
 handles internal operations like production, product development, logistics, and administrative
functions.

PRO CONS
 DEEP MARKET KNOWLEDGE  DIFFICULTY IN ALIGNING MARKET NEEDS
 CLOSE CUSTOMER RELATIONSHIP WITH TECHNOLOGY DEVELOPMENTS
 INTEGRATION OF PRODUCTION AND R e D  DIFFICULTY IN EXPLOUTUNG SYNERGIES
BETWEEN FROND AND BACK ENDS

5) AMBIDEXTROUS=> balance innovation

and efficiency through two coexisting
business lines: exploitation and
exploration. While effective, these
structures face challenges in
coordination and resource allocation.
Suitability depends on the company's context.

EXISTING BUSINESS EXISTING BUSINESS

INNOVATION AND EXPLORATION EFFICIENCY AND EXPLOITATION
Strategic intent Innovation, growth Cost, profit
Critical tasks Adaptability, new products,.. Operation,efficiency, innovation
Competencies Entrepreneurial Operational
Structure Adeptive and loose structure Formal and mechanics
Control and rewards Milestones, growth Margin and productivity
Culture Speed, flexibibility, risk taking Effiency, low risk, quality
Leadership role Visionary and involved management style Authoritative, top down
 Allows to pursuing multiple strategic goals
 Challenges= integration and coordination is hard. Hard to share and transfer resources, conflict between
units

HOW TO CONNECT UNITS SEPARATED BY STRUCTURAL BOUNDARIES?? Formal and informal linkage

 FORMAL
o VERTICAL LINKAGE=> formalised linking mechanisms that define the hierarchy and chain of
command. They are rules, plans, directive with the goal of coordinate the activities. They are
important to understand who reports to whom and who is accountable for what results.
o HORIZONATAL LINKAGE=> not based on hierarchic level but span across different units at same
hierarchical level. Ex: liaison officies, commitees, task forces. The goal is to promote
communication and coordination between units. No formal authority
 INFORMAL=> Relevant mechanism to connect units. Example are: workshops, outings, company
retreats.

HOW TO ALIGN STRUCTURE AND STRATEGY?? Strategic process start with the strategic intent, than leaders
identify key activities and allocate them and create cross unit coordination. Align groups and links with
overall strategy. (financial and non-financial align mechanism). How we can insure alignment??

 FINANCIAL INCENTIVES=> money rewards, profit sharing, shared company ownership through stocks,
trying individual bonuses to the achievement of team projects.
EX: compensation of athletes to be align with the goal of collecting resources for the team.

After the alignment between individual and company, it is necessary to fit the environment to secede.
Organizational Strategy

Because structure is a means to achieve objectives, and objectives derive from the organization’s overall
strategy, it’s only logical that structure should follow strategy, the structure must change to accommodate.
Most current strategy frameworks focus on three strategy dimensions—innovation, cost minimization, and
imitation—and the structural design that works best with each.

To what degree does an organization introduce major new products or services? An innovation strategy
strives to achieve meaningful and unique innovations. Obviously, not all firms pursue innovation. Apple and
3M do, but conservative retailer Marks & Spencer doesn’t. Innovative firms will use competitive pay and
benefits to attract top candidates and motivate employees to take risks. Some degree of mechanistic
structure can actually benefit innovation. Well-developed communication channels, policies for enhancing
longterm commitment, and clear channels of authority all may make it easier for rapid changes to occur
smoothly. An organization pursuing a cost-minimization strategy tightly controls costs, refrains from
incurring unnecessary expenses, and cuts prices in selling a basic product. This describes the strategy
pursued by Walmart and the makers of generic or store-label grocery products. Cost-minimizing
organizations pursue fewer policies meant to develop commitment among their workforce. Organizations
following an imitation strategy try to both minimize risk and maximize opportunity for profit, moving new
products or entering new markets only after innovators have proven their viability.
VALVE FROM SOFTWARE TO HARDWARE

1. Valve's Organizational Culture and Innovation: The document outlines Valve's unique
organizational structure, which is flat, non-hierarchical, and encourages employee-driven
innovation. This culture has been pivotal in Valve's success in software development and digital
distribution through its Steam platform. Employees at Valve enjoy a high degree of autonomy,
choosing their projects and teams, which fosters creativity and innovation.

 FOCUS ON CREATING NEW PRODUCT AND GENERATING NEW IDEA

 TRYING TO ATTRACT TALEN AND KEEP THEM FOREVER
 VALVE HAS A SPONTANEOUS ORDER
 CABALAS= MULTIDISCIPINARY PROJECT TEAMS Valve's foundation is marked by its non-hierarchical,
employee-driven approach, where autonomy is paramount, and every employee has the freedom to
choose their projects.
 EVALUTATION PROCESS=> not only for their expertise and experience but also their suitability for
engaging with major strategic decisions. THEY WANT TO ATTRACT T SHAPED= generalist and expert

Before valve used QUAKE ENGINE TO DEVELOP GAME=> WHY NOT DEVELOP IT INTERNALLY?? SOURCE
ENGINE. And they use an open architecture

2. Transition to Hardware: Valve's decision to venture into hardware with the Steam Machine, Steam
Controller, and Virtual Reality (VR) technology is a significant strategic move. This transition is driven
by the desire to extend the gaming ecosystem and offer a more integrated experience to users.
Valve's transition into hardware, despite its software-centric origins, reflects its commitment
to innovation and addressing customer needs, all while maintaining its unique
organizational structure. This approach has consistently differentiated Valve from its
competitors, emphasizing autonomy, creativity, and a direct focus on user experience in
both software and hardware domains.

3. Challenges and Strategic Decisions: The foray into hardware presents several challenges for Valve,
including manufacturing, distribution, and maintaining its culture of innovation in a more
constrained environment. Open model= NORMALLY VIDEO GAME COMPANIES WERE KNOEN TO
CLOSELY GUARD THEIR IP

4. Impact on the Gaming Industry and Valve's Future: The document concludes with an analysis of
Valve's potential impact on the gaming industry through its hardware initiatives and the future
prospects of the company. It raises questions about the sustainability of Valve's organizational
culture, its ability to compete in the hardware market, and the implications for the broader gaming
ecosystem.

5. CULTURE=> Valve's culture is markedly different from its competitors by emphasizing employee-
driven decision-making and project selection, a contrast to the more structured, top-down
management styles prevalent in the industry. This unique approach has been integral to Valve's
success in software development and its venture into hardware, underpinning its innovations and
the development of leading titles and the Steam digital distribution platform.

This summary captures the essence of the document, focusing on Valve's organizational culture, its strategic
pivot to hardware, the challenges encountered, and the potential impact on the gaming industry. Valve's
journey from a software-centric company to a player in the hardware market offers valuable insights into
innovation, strategy, and organizational dynamics in the technology sector.
Valve's structure facilitated innovation but faced potential challenges in the hardware domain, which
typically requires more traditional, structured approaches due to its complexity and production constraints.
The document explores Valve's strategic considerations for hardware development, including the feasibility
of maintaining its unique culture in this new venture, potential entry strategies into the hardware market,
and the implications for its organizational model.

Valve's foray into hardware is seen as essential for its continued growth, given the limitations of solely
focusing on software. The document outlines Valve's deliberations on how to approach hardware
development while retaining its core values and operational flexibility. This includes discussions on whether
to manufacture hardware in-house or collaborate with external partners, a

And how to innovate in hardware without compromising Valve's distinctive employee-driven culture. The
narrative underscores the tension between Valve's successful software development model and the new
demands of hardware production, highlighting the company's strategic efforts to navigate this transition
while preserving its foundational principles.

1) is flat, non-hierarchical, Employees at Valve enjoy a high degree of autonomy, choosing their projects
and teams. CABALAS= MULTIDISCIPINARY PROJECT TEAMS Valve's foundation is marked by its non-
hierarchical, employee-driven approach, where autonomy is paramount, and every employee has
the freedom to choose their projects.
2) It is aligned to the strategy which fosters creativity and innovation and also because employees
believe in the organization’s goal
3) It has been effective but problem for the transition to hardware. This structure facilitated innovation
but faced potential challenges in the hardware domain, which typically requires more traditional,
structured approaches due to its complexity and production constraints.
4) If we want to compete with Valve= if you are a big company with high market share you can simply
compete on efficiency and quality of the product but if you want to enter in the market you need the
same organizational structure focusing on innovation and empowering our employees.