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Strategic OB approach - people are the foundation of the organizations competitive advantage
- involves organizing and managing people's knowledge and skills eectively to implement the
organizations strategy and gain a competitive advantage
Factors that determine the behavior and ultimate value of people in the organization
1. Individual
2. Interpersonal
3. Organizational
think and act strategically, and use these skills to motivate people and build trusting
relationships to help implement the organizations strategy
2. Middle Managers
championing strategic ideas with senior managers and helping the firm remain adaptive
3. Lower-level Managers
2. Focuses on behaviors and processes that help to create competitive advantage and
financial success
1. There are complexities and subtleties in fully leveraging the capabilities of people. Common
sense wont do
Definition of an Organization
- Collection of individuals whose members may change over time, forming a coordinated
system of specialized activities for the purpose of achieving specific goals over an extended
period of time
1. Cost leadership strategy - creating low-cost products or services for the customer
while maintaining acceptable or good quality (Kia)
2. Rareness - extent to which the skills and talents of an organizations people are unique in
the industry
3. Imitability - extent to which the skills and talents of an organizations people can be copied
by other organization
- Tacit knowledge - a type of knowledge that people have but cannot articulate. (BMW -
they just know. They have a feel of what is right)
Sustainable competitive advantage through people not only depends on the skills and talents
of the people, but also how they are treated and deployed.
- Emotional Intelligence - people with high EI have self-awareness, possess good social skills,
display empathy, have strong motivation, and regulate their own behavior without the
oversight of others
High-Involvement Management
- senior, middle, and lower-level managers all recognize human capital as the organizations
most important resource
1. Selective Hiring - obtaining a large pool of applicants and undergoing rigorous evaluations
(multiple interviews, tests, other tools). Applicants are selected not only through their
technical skills, but also of fit with the company culture and mission
2. Extensive Training - thoroughly train new associates and managers to help them build skills
for their positions (OJT, dedicated training exercises); also participate in structured
discussions of culture and mission
3. Decision Power - associates are given the authority to make decisions aecting their work
and performance. Can also participate in decisions made by lower-level and middle
managers