Chapter 1 Introduction to the Field of Organizational Behaviour

1 INTRODUCTION TO THE FIELD

OF ORGANIZATIONAL
BEHAVIOUR

LEARNING OBJECTIVES
After reading this chapter, students should be able to:
Define organizational behaviour and give three reasons for studying this field of inquiry.
Discuss how globalization influences organizational behaviour.
Summarize the apparent benefits and challenges of telework.
Identify changes in Canada’s work force in recent years.
Describe employability and contingent work.
Explain why values have gained importance in organizations.
Define corporate social responsibility and argue for or against its application in
organizations.
Identify the five anchors on which organizational behaviour is based.
Diagram an organization from an open systems view.
Define knowledge management and intellectual capital.
Identify specific ways that organizations acquire and share knowledge.

CHAPTER GLOSSARY

communities of practice Informal groups bound corporate social responsibility (CSR) An

together by shared expertise and passion for a
particular activity or interest.
contingency approach The idea that a particular
action may have different consequences in different
situations.
contingent work Any job in which the individual
does not have an explicit or implicit contract for long-
term employment, or one in which the minimum hours
of work can vary in a nonsystematic way.
organization’s moral obligation towards its
stakeholders.
employability An employment relationship in which
people are expected to continually develop their skills
to remain employed.
ethics The study of moral principles or values that
determine whether actions are right or wrong and
outcomes are good or bad.

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Part 1 Introduction
globalization When an organization
extends its activities to other parts of the
world, actively participating in other
markets, and competing against
organizations located in other countries.
grafting The process of acquiring
knowledge by hiring individuals or buying
entire companies.
grounded theory A process adopted in
most qualitative research of developing
knowledge through the constant interplay
of data collection, analysis, and theory
development.
intellectual capital The sum of an organization’s
human capital, structural capital, and relationship
capital.
knowledge management Any structured activity that
improves an organization’s capacity to acquire, share,
and use knowledge in ways that improve its survival
and success.
open systems Organizations that take
their sustenance from the environment and,
in turn, affect that environment through
their output.
organizational behaviour (OB) The
study of what people think, feel, and do in
and around organizations.
CHAPTER SYNOPSIS
Organizational behaviour is a relatively young field of
inquiry that studies what people think, feel, and do in
and around organizations. Organizations are groups of
people who work interdependently toward some
purpose. OB concepts help us to predict and
understand organizational events, adopt more accurate
theories of reality, and influence organizational events.
This field of knowledge also improves the
organization’s financial health.
2
organizational culture The basic pattern
of shared assumptions, values, and beliefs
governing the way employees within an
organization think about and act on
problems and opportunities.
organizational learning The knowledge
management process in which
organizations acquire, share, and use
knowledge to succeed.
organizational memory The storage and
preservation of intellectual capital.
organizations Groups of people who work
interdependently toward some purpose.
scientific method A set of principles and
procedures that help researchers to
systematically understand previously
unexplained events and conditions.
stakeholders Shareholders, customers,
suppliers, governments, and any other
groups with a vested interest in the
organization.
teleworking Working from home, usually
with a computer connection to the office;
also called telecommuting
values Stable, long-lasting beliefs about
what is important in a variety of situations.
virtual teams Teams whose members
operate across space, time, and
organizational boundaries and linked
through information technologies to
achieve organizational tasks.
There are several trends in organizational
behaviour. Globalization requires corporate decision
makers to be more sensitive to cultural differences,
and seems to be associated with the recent rise in job
insecurity, work intensification, and other sources of
work-related stress. Information technology blurs the
temporal and spatial boundaries between individuals
and the organizations that employ them. It has
contributed to the growth of telework -- an alternative
work arrangement where employees work at home or a
 Chapter 1 Introduction to the Field of Organizational Behaviour

remote site, usually with a computer connection to the
office. Information technology is also a vital
ingredient in virtual teams -- cross-functional groups
that operate across space, time, and organizational
boundaries.
Another trend in organizations is the increasingly
diverse workforce. Diversity potentially improves
decision making, team performance, and customer
service, but it also presents new challenges. A fourth
trend is the employment relationships that have
emerged from the changing work force, information
technology, and globalization forces. Employment
relationship trends include employability and
contingent work. Values and ethics represent the fifth
trend. In particular, companies are learning to apply
values in a global environment, and are under pressure
to abide by ethical values and higher standards of
corporate social responsibility.
Organizational behaviour scholars rely on a set of
basic beliefs to study organizations. These anchors
include beliefs that OB knowledge should be
multidisciplinary and based on systematic research,
that organizational events usually have contingencies,
that organizational behaviour can be viewed from
three levels of analysis (individual, team, and
organization), and that organizations are open systems.
The open systems anchor suggests that
organizations have interdependent parts that work
together to continually monitor and transact with the
external environment. They acquire resources from the
environment, transform them through technology, and
return outputs to the environment. The external
environment consists of the natural and social
conditions outside the organization. External
environments are generally much more turbulent
today, so organizations must become adaptable and
responsive.
Knowledge management develops an
organization’s capacity to acquire, share, and use
knowledge in ways that improves its survival and
success. Intellectual capital is knowledge that resides
in an organization, including its human capital,
structural capital, and relationship capital. It is a firm’s
main source of competitive advantage. Organizations
acquire knowledge through grafting, individual
learning, and experimentation. Knowledge sharing
occurs mainly through various forms of
communication. Knowledge sharing includes
communities of practice, networks where people share
their expertise and passion for a particular activity or
interest. Knowledge use occurs when employees
realize that the knowledge is available and that they
have enough freedom to apply it. Organizational
memory refers to the storage and preservation of
intellectual capital.

POWERPOINT® SLIDES
Canadian Organizational Behaviour includes a complete set of Microsoft PowerPoint® files for each chapter. (Please
contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the lecture
outline that follows, a thumbnail illustration of each PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you don’t want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.) The transparency masters for this chapter are very similar to the PowerPoint files.

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Part 1 Introduction

®
LECTURE OUTLINE (with PowerPoint slides)

INTRODUCTION TO THE FIELD OF

ORGANIZATIONAL BEHAVIOUR

Introduction to the Field of

Organizational Behaviour
Slide 1

OPENING VIGNETTE
Four Seasons Hotels and Resorts have leveraged the power of
organizational behaviour to become one of the top luxury hotels in the
world as well as one of the best places to work.
• CEO Isadore Sharp emphasizes the importance of relying
Four Seasons and OB on the creativity of its staff and maintaining a culture that
Slide 2
supports employee involvement.
• Four Seasons pays close attention to employee
competencies, corporate culture, leadership,
communication, motivation, organizational structure

THE FIELD OF ORGANIZATIONAL BEHAVIOUR

Organizational behaviour (OB) -- study of what people think, feel,
and do in and around organizations.

What are Organizations?

Slide 3
Organizations -- groups of people who work interdependently toward
some purpose
• Structured patterns of interaction -- expect each other to
complete certain tasks in a coordinated way
• Organizations have purpose -- e.g. producing oil from oil
sands or selling books on the Internet.
 Chapter 1 Introduction to the Field of Organizational Behaviour

WHY STUDY ORGANIZATIONAL BEHAVIOUR?

1. Satisfy the need to understand and predict
• Helps us figure out why organizational events happen
2. Helps us to test personal theories
Why Study OB? • Helps to question and rebuild personal theories
Slide 4
3. Influence our environment
• Improves our ability to work with people and influence
organizational events

EMERGING TRENDS IN ORGANIZATIONAL

BEHAVIOUR
1. Globalization
Trends:Globalization • SAP, the German software giant and others operate in a
Slide 5
global economy
-- activities in other parts of the world, participates in
other markets, competes against organizations located
elsewhere
• Requires new organizational structures and different forms
of communication
• Adds more diversity to the workforce.
• Increases competitive pressures, mergers, work
intensification and demands for work flexibility from
employees.

2. Information Technology & OB

• Re-designs jobs, facilitates competitive advantage through
Trends: Information knowledge management.
Technology
Slide 6
• Telework (telecommuting) –alternative work arrangement
-- working from home, usually with a computer
connection to the office
-- need to replace face time with performance output
-- changes employment relationship expectations
• Virtual teams
-- operate across space, time, and organizational
boundaries with members who communicate mainly
through electronic technologies

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Part 1 Introduction

3. Changing Work Force

• More diversity
-- primary categories – gender, age, ethnicity, etc.
-- secondary categories -- some control over (eg.
Trends: Workforce
Diversity
education, marital status)
Slide 7 -- more women in workforce
-- new age cohorts (eg. Generation-X, Generation Y)
• Implications
-- leverage diversity advantage (e.g. decision making,
provide better customer service).
-- adjust to the new workforce -- e.g. Gen-X employees
value flexibility and opportunities to use new
technology; Gen-Y employees expect responsibility and
involvement.
Trends:Employment
Relationship
Slide 8
4. Emerging employment relationships
• Employability
-- many tasks, not a specific job
-- need to continuously learn skills
• Contingent work
-- no explicit or implicit contract for long-term
Employability vs Job
employment, or minimum hours of work can vary in a
Security nonsystematic way
Slide 9

5. Workplace Values and Ethics

• Values – stable, long-lasting beliefs about what is
important.
• Ethics -- the study of moral principles or values that
determine whether actions are right or wrong and
Trends: Workplace Values
& Ethics
outcomes are good or bad
Slide 10
 Chapter 1 Introduction to the Field of Organizational Behaviour

CORPORATE SOCIAL RESPONSIBILITY (CSR)

• Corporate social responsibility -- an organization’s moral
obligation toward all of its stakeholders
• Stakeholders -- shareholders, customers, suppliers,
governments, and any other groups with a vested interest
Corporate Social
Responsibility in the organization
Slide 11 • Triple bottom line
-- part of corporate social responsibility
-- supporting economic, social, and environmental
spheres of sustainability
• Various stakeholders (job applicants, current employees,
and suppliers) associate with firms based on their CSR
• Many firms talk about their CSR, but few practise CSR or
have their actions evaluated

FIVE ANCHORS OF ORGANIZATIONAL

BEHAVIOUR
Org. Behaviour Anchors 1. Multidisciplinary anchor
Slide 12 • Many OB concepts adopted from other disciplines
-- e.g. psychology concepts in motivation, perceptions
-- emerging fields: communication, information systems,
marketing, womens’ studies
• OB is developing its own models and theories, but needs
to continue scanning other fields for ideas.

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Part 1 Introduction

2. Systematic research anchor

• OB researchers rely on scientific method -- a set of
principles and procedures that help researchers
systematically understand previously unexplained events
and conditions.
• OB also adopting a grounded theory approach – dynamic
and cyclical approach that provides constant interplay
between data gathering and developing theoretical
concepts.
3. Contingency anchor
• A particular action may have different consequences in
different situations -- no single solution is best in all
circumstances
• Need to diagnose the situation and select best strategy
under those conditions
• Universal theories welcomed where contingency theories
offer little advantage
4. Multiple levels of analysis anchor
• OB issues can be studied from individual, team, and/or
organizational level
• Topics identified at one level, but usually relate to all three
levels
5. Open systems anchor
• Open systems -- organizations consist of interdependent
parts that work together to continually monitor and transact
with the external environment
Open Systems Anchor of • Receives inputs and transforms them through technology
OB (build)
Slide 13
into outputs that are returned to the external environment
• Some output valued (services), but other output have
adverse effects (eg., layoffs, pollution)
• External environment -- natural and social conditions
outside the organization
-- stakeholders – anyone with a vested interest in the
organization
-- environment is increasingly turbulent – rapid change
• Organizations need to adapt to external environment
• Need to coordinate subsystems and be aware of unintended
consequences
 Chapter 1 Introduction to the Field of Organizational Behaviour

KNOWLEDGE MANAGEMENT
Any structured activity that improves an organization’s capacity to
acquire, share, and use knowledge for its survival and success

Knowledge Management Intellectual capital

Defined
Slide 14 • Knowledge residing in the organization
-- sum of its human, structural, and relationship capital
1. Human capital -- employees possess and generate
2. Structural capital -- captured in systems and structures
3. Relationship capital -- value derived from external
stakeholders (eg., customer loyalty)
Intellectual Capital
Slide 15

KNOWLEDGE MANAGEMENT PROCESSES

Knowledge management at Clarica Life Insurance Company
• Clarica Life Insurance Company uses its company-wide
Intranet (called Clarica Connects) to help agents develop
Knowledge Management and share their expertise in ways that generate innovative
at Clarica
solutions.
Slides 16

1. Knowledge acquisition -- organization's ability to extract

information and ideas from its environment as well as through insight
• Grafting -- acquiring knowledge by hiring individuals or
buying entire companies
Knowledge Management • Individual learning -- learning about external environment
Processes
• Experimentation -- creativity, insight
Slides 17
2. Knowledge sharing -- distributing knowledge to where it is needed
in the organization
• Communication -- intranets, face-to-face, teams, etc.
-- communities of practice -- informal groups bound
together by shared expertise and passion for a particular
activity or interest
• Rewards -- encourages info sharing

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Part 1 Introduction

3. Knowledge use
• Knowledge awareness – know that relevant knowledge is
available
• Freedom to apply knowledge

Organizational memory -- storage and preservation of intellectual

capital -- includes employee knowledge and embedded knowledge
Retaining intellectual capital
Organizational Memory • Keeping good employees
Slide 18
• Transferring knowledge from one person to the next
• Transferring human capital to structural capital
Organizations also need to “unlearn”
• Cast off routines and patterns of behaviour that are no
longer appropriate

TRANSPARENCY MASTERS
Transparency 1.1: What are Organizations?
Transparency 1.2: Why Study Organizational Behaviour?
Transparency 1.3: Trends: Globalization
Transparency 1.4: Trends: Information Technology
Transparency 1.5 Trends: Workplace Diversity
Transparency 1.6: Trends: Employment Relationship
Transparency 1.7: Employability vs Job Security
Transparency 1.8: Trends: Workplace Values & Ethics
Transparency 1.9: Corporate Social Responsibility
Transparency 1.10: Organizational. Behaviour Anchors
Transparency 1.11: Open Systems Anchor of OB
Transparency 1.12: Knowledge Management Defined
Transparency 1.13: Intellectual Capital
Transparency 1.14: Knowledge Management Processes
Transparency 1.15: Organizational Memory Defined
 Chapter 1 Introduction to the Field of Organizational Behaviour

SOLUTIONS TO DISCUSSION QUESTIONS

1. A friend suggests that organizational behaviour
courses are only useful to people who will enter
management careers. Discuss the accuracy of your
friend's statement.
According to the textbook, the friend’s
perspective of organizational behaviour is
inaccurate. Organizational behaviour has direct
implications for influencing organizational events,
such as making better decisions, structuring
organizations to fit the surrounding environment,
improving individual performance, building
employee commitment, and helping work teams
operate more effectively. At a more interpersonal
level, OB theories prescribe ways to persuade and
negotiate, manage conflict, and communicate with
others in organizational settings.
These practices may seem most appropriate for
senior and middle managers, but they are relevant
to everyone who works in and around
organizations. Everyone needs to master the
knowledge and skills required to work more
effectively with people in organizational settings.
Organizations have been reducing entire layers of
management and passing control of work
processes over to nonmanagement employees. As
this happens, the organizational behaviour
concepts described in this book will become more
important than ever before to employees at all
levels.
Besides the value of OB courses for influencing
organizational events, this knowledge helps us to
predict and understand organizational events.
Organizations affect virtually every part of our
lives, so it only makes sense that we should be
interested in knowing when, how, and why
organizational events occur -- no matter what
position we hold in the organization.
Finally, organizational behaviour helps us to test
the numerous personal theories that we have
already formed to make sense of the work world.
OB concepts and theories help to confirm and
challenge our personal theories as well as adopt
new perspectives of reality. In the long run, this
knowledge will help everyone to improve their
personal effectiveness and wellbeing in
organizational settings.
2. Look through the list of chapters in this textbook
and discuss how information technology could
influence each organizational behaviour topic.
This is an open-ended question which could be
used as an exercise activity with subsequent class
discussion. The main objective is to help students
understand how computer technology has
profound implications for behaviour in
organizations.
The word “computer” appears in most chapters of
this book. Here are some of the topics linked to
information technology. Students will certainly
identify others:
• Telecommuting
• Computer feedback
• Computer monitoring
• Computer-based learning
• Effect of computers on job design
• E-mail and other computer-mediated
communication
• Virtual teams
• Using computer technology to integrate the
work unit’s technological with social system
• Computer-based decision support systems
• Electronic brainstorming
• Computers as substitutes for labour
• Organizational politics of computer-based
information sharing
• Computer-based negotiation
• Computer technology as a driver of
organizational change
• Computers and free agents
• Web-based career postings
• Computers connecting network structures
3. “Organizational theories should follow the
contingency approach.” Comment on the accuracy
of this statement.
OB theories must be simple, yet accurate. While
simplicity calls for universal theories, accuracy
usually requires the contingency approach because
most human behaviour is too complex to
understand sufficiently through universal (i.e., one
best way) theories. Contingency theories are more
refined because they recognize that environmental
and personal characteristics moderate most cause-
effect relationships. In other words, while it would
be preferable to use universal theories for the sake

11
Part 1 Introduction
of simplicity, we often must rely on contingency
theories to sufficiently understand and predict
organizational behaviour.
4. Employees in the City of Calgary’s water
distribution unit were put into teams and
encouraged to find ways to improve efficiency.
The teams boldly crossed departmental boundaries
and areas of management discretion in search of
problems. Employees working in other parts of the
City of Calgary began to complain about these
intrusions. Moreover, when some team ideas were
implemented, the city managers discovered that a
dollar saved in the water distribution unit may
have cost the organization two dollars elsewhere.
Use the open systems anchor to explain
what happened here
[NOTE: This discussion question is based on a
real incident in Calgary. For details, see: B.
Sheehy, “A Near-Run Thing: An Inside Look at a
Public-Sector Productivity Program,” National
Productivity Review, Spring 1985, pp. 139-145.]
This incident illustrates that organizations are
open systems with many interdependent parts that
function as a whole to achieve a set of goals. This
city has many subunits with close links to each
other. When the water distribution unit employees
tried to improve efficiency, the interdependence
of these subsystems became apparent. Some of
the actions that improved productivity in one area
sent ripples through other parts of the
organization. In other words, other departments
and subunits had to adapt to changes implemented
in the TDS area. Indeed, savings in one area
sometimes resulted in increased costs in another
area.
5. After hearing a seminar on knowledge
management, an oil company executive
argues that this perspective ignores the fact
that that oil companies could not rely on
knowledge alone to stay in business. They
also need physical capital (such as pumps and
drill bits) and land (where the oil is located).
In fact, these two may be more important than
what employees carry around in their heads.
Discuss the merits of the oil executive’s
comments.
Although less common, many executives still see
value in land and capital. They give lip service to
the idea that “People are our most value assets”
but still don’t understand that land and capital
have little value without people. For instance, this
oil company would not have found land with oil
deposit’s unless it had the knowledge to find that
oil. It could not operate the equipment to extract
and refine the oil unless it had enough knowledge.
The executive’s comment that companies could
not remain in business with only knowledge. On
the contrary, some of the wealthiest organizations
(including many software companies and
consulting firms) have few physical assets. Banks
are selling off their corporate headquarters
because their competitive advantage -- their
source of wealth -- is found in knowledge. Oil
companies are also outsourcing several aspects of
physical assets. Their ships are often owned by
others. The drilling equipment is leased or owned
by companies that specialize in drilling. The
major oil companies today are mainly in the
knowledge business -- scouting for oil or
marketing what others have found and extracted.
This question also suggests a subtle
misunderstanding by the executive about
knowledge management. Although much
corporate knowledge resides in the brains of its
employees (called human capital), it also resides
in the organization’s systems and structures
(known as structural capital).
6. Fully describe intellectual capital, and explain
how an organization can retain this capital.
Intellectual capital is the sum of an organization's
human capital, organizational capital, and
relationship capital. Human capital refers to the
knowledge that employees possess and generate.
Structural capital is the knowledge captured and
retained in an organization's systems and
structures. Relationship capital is the value
derived from satisfied customers, reliable
suppliers, and other external sources that provide
added value.
Retaining intellectual capital refers to the
discussion in the textbook about retaining
organizational memory. This includes keeping
good employees and systematically transferring
their human capital into structural capital when
they must leave. It also includes documentation --
bringing out hidden knowledge, organizing it, and
putting it in a form that can be available to others.
It also includes embedding knowledge in the
organization’s systems and structures.
7. An information technology consultant recently
stated that over 30 percent of U.S. companies use
software to manage documents and exchange
 Chapter 1 Introduction to the Field of Organizational Behaviour
information, whereas Canadian firms are just
beginning to adopt this technology. Based on this,
he concluded that “knowledge management in
Canada is at its beginning stages”; in other words,
that few Canadian firms practise knowledge
management. Comment on this consultant’s
statement.
This information technology consultant has a
limited view of knowledge management.
Specifically, he sees knowledge management
purely as knowledge sharing, particularly through
intranets and other computer technologies.
But knowledge management consists of much
more than knowledge sharing. It also includes
knowledge acquisition and knowledge use.
Knowledge acquisition includes the organization’s
ability to extract information and ideas from its
environment as well as through insight
Knowledge use refers to applying knowledge.
8. BusNews Ltd. is the leading stock market and
business news service. Over the past two years,
BusNews has experienced increased competition
from other news providers. These competitors
have brought in Internet and other emerging
computer technologies to link customers with
13
information more quickly. There is little
knowledge within BusNews about how to use
these computer technologies. Based on the
knowledge acquisition processes for knowledge
management, explain how BusNews might gain
the intellectual capital necessary to become more
competitive in this respect.
This incident calls for an analysis of the different
strategies to acquire organizational knowledge.
The textbook briefly describes three knowledge
acquisition strategies:
Individual Learning. This is a viable strategy,
but is relatively slow, given that other news
providers already have this knowledge.
Grafting. This is the process of acquiring
knowledge by hiring individuals or buying entire
companies. This is probably the most effective
approach for BusNews because hiring
knowledgeable employees are acquiring a
company with this knowledge would provide the
intellectual capital quickly.
Experimentation. This is a useful support
strategy but, as with scanning, requires some
knowledge base in computer technology to make
this strategy effective.
Part 1 Introduction
PHOTO CAPTION CRITICAL THINKING
QUESTIONS
Syncrude Canada
Q: In your opinion, what organizational behaviour
concepts described in this book would have the
greatest influence on the success of Syncrude and
other mammoth projects?
A: This is a question for classroom debate. Some
students might say that this photo caption emphasizes
organizational structure. Others might suggest that
communication plays a major role in the success of
major projects. Teams will likely be mentioned as
another OB concept.
Banana Magazine
Q: How do magazines such as Banana encourage
multiculturalism in Canada?
A: To answer this question, it would be great if the
instructor had a copy of this (or a similar) magazine to
illustrate the material within the magazine. However,
generally, these magazines celebrate cultural
differences and recognize that people with different
backgrounds can adapt and live successfully within
this diversity.
Vancouver City Savings Credit
Union
Q: Why do organizations such as VanCity apply the
triple bottom line, whereas most companies in Canada
do not?
A: Students may need to speculate somewhat on the
answer to this question. The most likely answer is that
many corporate leaders are so focused on short-term
shareholder value that they fail to see that satisfying
the needs of other stakeholders is often in the best
long-term interest of shareholders. Moreover, these
leaders are rewarded for their fairly short-term
financial performance, not the firm’s long-term
survival and success. A third factor may be the
inherent ambiguity regarding the benefits of satisfying
the needs of stakeholders other than sahareholders.
Clarica Life Insurance Company
Q: Along with independent sales agents, what other
professional groups would benefit from an intranet-
based community of practice
A: Basically, any knowledge-oriented group would
benefit from a community of practice because they
have the opportunity for knowledge sharing.
Commonly mentioned examples are engineers
working in different regions for an organization,
academics in specific fields of study, and medical
specialists.
 ACTIVITY 1.1: CASE ANALYSIS
THE GREAT IDEA THAT WASN’T
These case notes were prepared by Fiona McQuarrie, University College of the Fraser Valley

Case Synopsis
After the birth of her daughter, Irina, a mortgage officer, decided to telecommute to her job while working at home.
The arrangement is not working as well as she had hoped, because of her isolation from the office and because of
problems with establishing a working atmosphere at home. Her employer has told her that if her work doesn’t improve
within the next month, she will have to return to regular working hours at the office.
Although the workplace and the characters in the case are fictional, the problems encountered by Irina and her
employer are all taken from studies of real-life telecommuting arrangements. (See, for example, Andrew DuBrin,
“Comparison of the Job Satisfaction and Productivity of Telecommuters versus In-House Employees”, Psychological
Reports, June 1991, pp. 1223-1234; Fiona A. E. McQuarrie, “Telecommuting: Who Really Benefits?”, Business
Horizons, November-December 1994, pp. 79-83; Margrethe H. Olson and Sophia B. Primps, “Working at Home with
Computers: Work and Non-Work Issues”, Journal of Social Issues, Fall 1984, pp. 97-112; Barbara J. Risman and
Donald Tomaskovic-Dewey, “The Social Construction of Technology: Microcomputers and the Organization of
Work”, Business Horizons, May-June 1989, pp. 71-75.)

1. What are the major problems in this
telecommuting arrangement?
There are several major problems that can be
identified in this case. First, Irina is having trouble
working at home where there is no suitable
physical space for her to work, and while she is
attempting to simultaneously work and care for a
newborn baby. Clients have also complained to
the employer about distractions like a crying baby
while dealing with Irina on the phone. This is an
important point, given the bank’s promise of
better customer service as its competitive
advantage in a busy market. Second, while the
employer is being supportive in supplying a
computer and couriering work to and from Irina’s
home, the employer appears to have unrealistic
expectations of what Irina’s productivity should
be. Third, Irina is missing out on potential new
clients by not physically being in the office when
new customers drop in. Fourth, while Irina is still
visiting the office once a week, she is missing
regular contact with her co-workers and thus is
“out of the loop” for the informal transmission of
information in the workplace. Her co-workers also
appear to be resentful of her new work
arrangement.
3.
2. Is it Irina’s or the bank’s responsibility to solve
these problems?
This question could generate some interesting
debates about the worker’s and the employer’s
responsibilities in ensuring satisfactory working
conditions. Irina proposed the telecommuting
arrangement, so it could be said that she should
have realized the problem of trying to work and
care for a baby, and the difficulties that her
physical and social isolation from the office could
cause. There are also some problems in projecting
a “professional image” when working from home
(e.g. Irina’s daughter crying in the background
while Irina was on the phone), which Irina could
have anticipated.
On the other hand, the employer probably should
not expect greater productivity just because an
employee works at home. The employer might
also need to provide additional support to Irina
beyond a computer and a regular courier service,
rather than attributing problems only to Irina’s
perceived inability to manage her work
arrangement. The case mentions that a previous
employee’s telecommuting arrangement was a
failure, which suggests that the employer does not
have a good idea of how to manage
telecommuting successfully.
What solutions can you suggest to the problems
that you have identified?
Depending on how the problem has been defined, explore ways to support such arrangements if it is
there are numerous solutions that could be applied decided that telecommuting is a viable option. It
in this case. appears that the employer is allowing
telecommuting on a case-by-case basis, and there
First, Irina and the company obviously need to re-
might be benefits to formalizing telecommuting as
negotiate the terms of the telecommuting
an option for more employees if the company
arrangement. There needs to be clearer
decides this is appropriate. Having telecommuting
expectations (on both sides) of Irina’s
available to other employees might reduce the
productivity. The issue of Irina’s time in the office
resentment that Irina’s co-workers feel (they may
also should be resolved, since once a week does
be angry because they feel she is receiving special
not seem to be sufficient for her to stay involved
treatment), and could also be a selling point in
and to acquire new clients. If Irina is concerned
recruiting new employees.
about her ability to spend time away from her
child, the employer could subsidize day care for If the employer decides to formalize
her during the time she is in the office. The telecommuting as an option, there are cost savings
employer could also consider offering some day that could be generated (e.g. bulk purchase of
care arrangements at the office, which would computers, office supplies, and office furniture).
likely be a benefit to other employees with child Some employers have also developed “semi-
care responsibilities. Irina and the company could telecommuting” arrangements if many employees
also explore ways to refer “walk-in” clients to her live considerable distances from a central
when she is not physically in the office. workplace. Rather than setting up working
arrangements in each individual employee’s
Second, there could better working conditions for
home, the employer establishes a “satellite
Irina at home. Because of the numbers of workers
office”: an office space equipped with computers,
working part- or full-time at home, many office
files, photocopiers, and other office furnishings, in
furniture companies now make cabinets
a location convenient to the employees. The
containing computer and filing storage, which can
“satellite office” is not a formal place of business
be closed so that the “work equipment” is not
open to the public, but instead is a non-home-
visible when not in use. This would partially solve
based telecommuting site. Employees who wish to
the problem of Irina being unable to avoid looking
telecommute travel to the “satellite office” rather
at work when she is not working. The cost of
than to the central workplace, and telecommute
purchasing of such a piece of furniture could be
from there rather than from their homes. This
covered by either Irina or the employer, or they
arrangement avoids most of the problems
could share the cost.
associated with working from home, while still
Third, Irina could consider arranging for part- or allowing the employees to avoid extensive travel
full-time child care while she is working at home. and other work-related costs. Having
While this would somewhat reduce the savings telecommuting employees working from one
generated by telecommuting, it would place also allows the employer a greater degree of
undoubtedly improve her ability to work without control over work, instead of managing multiple
distraction and also to present a professional individual telecommuting arrangements.
image to her clients. It would also possibly permit
Finally, Irina and the employer could also
her to work different hours, depending on the
question whether telecommuting is appropriate for
scheduling of the child care, and thus make it
her situation. Telecommuting does not work for
easier for her to be available outside “regular”
every employee and for every job. Since Irina’s
office hours, as she had suggested to her
job is, to some extent, dependent on regular
employer. The employer could subsidize or cover
interaction with her co-workers and developing a
the cost of childcare to assist Irina in
client base from new customers, it may be that
implementing this arrangement, since increased
telecommuting is inappropriate for her job. She
productivity and professionalism would also
may benefit herself and the employer by returning
benefit the employer.
to an office-based work arrangement.
Fourth, the employer may want to examine how
committed it is to the idea of telecommuting, and
 ACTIVITY 1.2: TEAM EXERCISE
HUMAN CHECKERS
Purpose
This exercise is designed to help students understand
the importance and application of organizational
behaviour concepts.
Materials
None, but the instructor has more information about
the team’s task. [Note: The chairs are optional. This
exercise sometimes works better without chairs.
Instead, the instructor might use two lines of tape on
the floor to keep student teams in a straight line.]
Task Description (read to students)
Each team will develop and execute a strategy in
which the three team members on either side of an
open space will move to the other side in the same
final order (see exhibit on this page). Team members
1, 2, and 3 begin on the left side and must move to the
right side in the same order. Team members 4, 5, and
6 will begin on the right side of the open chair or
space and must move to the left side in the same order
(see Exhibit below).
Exhibit
Before
1 2 3 4 5 6
After
4 5 6 1 2 3
Instructions (provided in textbook)
Step 1: Form teams with six students each. (NOTE:
Larger teams may be formed, but all teams must be
the same size and have the same number of people on
each side.) If possible, each team should have a private
location where team members can plan and practice
the required task without being observed or heard by
other teams.
Step 2: All teams will receive special instructions in
class about the team’s assigned task. All teams have
the same task and will have the same amount of time
to plan and practice the task. At the end of this
planning and practice, each team will be timed while
completing the task in class. The team that completes
the task in the least time wins.
Step 3: Other than chairs, no special materials are
required or allowed for this exercise. Although the
task is not described here, students should learn the
following rules for planning and implementing the
task:
Rule #1: You cannot use any written form of
communication or any props other than chairs to
assist in the planning or implementation of this
task.
Rule #2: You may speak to other students in your team
at any time during the planning and
implementation of this task.
Rule #3: When performing the task, you must move
only in the direction of your assigned destination.
In other words, you can only move forward, not
backwards.
Rule #4: When performing the task, you can move
forward to the next space, but only if it is vacant
(see Exhibit 1 in textbook).
Rule #5: When performing the task, you can move
forward two spaces, if that space is vacant. In
other words, you can move around a student who
is one space in front of you to the next space if
that space is vacant (see Exhibit 2 in textbook).
Step 4: When all teams have completed their task, the
class will discuss the implications of this exercise for
organizational behaviour.
Comments for Instructors
This exercise is also called “Traffic Jam”. Halfway
through the planning stage, it may be useful to advise
students that the task can be completed in less than 20
seconds. This makes some teams rethink their strategy.
The exercise offers plenty of fun and is an excellent
ice breaker for the beginning of the course.
However, be prepared to use up an entire 45 minute
class for this exercise with some time for debriefing.
It usually takes teams up to 30 minutes to figure out
the solution and to improve their efficiency in the task.
Then, time is required for each team to demonstrate
and compete.
Discussion Questions
1. Identify organizational behaviour concepts that
the team applied to complete this task.
Human checkers is an exciting exercise that
applies many organizational behaviour topics. It
relates to teams because the planning and practice
stage involves team development and
performance. Leadership may be an issue here
because some people help the team to work
toward its goals. Creativity and decision making
are relevant because the team must figure out how
to get everyone to the opposite side within the
constraints indicated. Some students might note
that they are not as good at either figuring out the
method or synchronizing as well as other people
in the team. This relates to the elements of
individual behaviour. Conflict mat become an
issue if some team members don’t work as
effectively as others.
2. What personal theories of people and work teams
were applied to complete this task.
This is a subjective question in which students
reveal their personal theories. It is useful to
identify the types of theories that emerge, that is,
which topics (leadership, individual performance,
etc.) a mentioned most often.
3. What organizational behaviour problems occurred
and what actions were (or should have been) taken
to solve them.
Several OB problems potentially emerge. Team
dynamics are most often mentioned. Conflict
sometimes occurs. Leadership may be an issue
where one person dominates the process too
much.
 ACTIVITY 1.3: TEAM EXERCISE
DEVELOPING KNOWLEDGE FROM MISTAKES
Purpose
The problem that people make from their mistakes
isn’t so much the mistake itself. Rather, it’s that they
do not take the time to learn from those mistakes. This
exercise is designed to help you understand how to
gain knowledge from past mistakes in a specific
situation.
Instructions
Step 1: The class will be divided into small teams
(four to six people). The instructor will identify a
situation that students would have experienced and,
therefore, at which they probably have made mistakes.
This could be the first day at work, the first day of a
class, or a social event such as a first date.
Step 2: After the topic has been identified, each team
member writes down an incident in which something
went wrong in that situation. For example, if the topic
is the first day of classes, someone might note how
they were late for class because they forgot to set their
alarm clock.
Step 3: Each student describes the mistake to other
team members. As an incident is described, students
should develop a causal map of the incident. They
should ask why the problem happened, what were the
consequences of this incident, did it happen again, and
so on. The knowledge might not be as obvious as you
think. For example, in the incident of being late, the
learning might not be that we should ensure the alarm
clock is set. It may be a matter of changing routines
(going to bed earlier), rethinking our motivation to
enroll in a program, and so on.
Step 4: As other incidents are analyzed, the team
should begin to document specific knowledge about
the incident. Think of this knowledge as a road map
for others to follow when they begin their first day of
class or first day at work, go on a first date, etc. This
activity requires teams of 5 or 6 people, a situation
identified by the instructor, and personal mistakes in
that situation.
Comments for Instructors
The first day of class is a suitable and usually
entertaining topic because all students have obviously
experienced this event and many probably have
hilarious examples of how events went wrong. For
example, a student might describe how he/she sat in
class and realized half way through the first lecture
that it was the wrong room! Another might describe
how he/she arrived late because the parking lot was
full. From these stories, students can explore what can
be learned from them. For example, form the incident
about being in the wrong room, they might note the
need to look closely at room numbers, double check
last minute room changes, ask others in the class to
confirm that the course in this room is what he/she
assumes, and so on.
This exercise can be fun because it reveals some very
human activities, as well as the idea that knowledge
emerges from these memorable (and sometimes
infamous) events. It teaches students to conduct
effective debriefing sessions -- a powerful way to
extract knowledge from another person’s experiences.
Notice that this exercise also reshapes our thinking
about mistakes. Rather than a source of
embarrassment, mistakes are learning events. This
point is consistent with the experiential learning
approach that is described in Chapter 2.
 ACTIVITY 1.4: SELF-ASSESSMENT
IT ALL MAKES SENSE?
Purpose
This exercise is designed to help students understand
how organizational behaviour knowledge can help you
to understand life in organizations.
Instructions
Read each of the statements below and circle whether
each statement is true or false, in your opinion. The
class will consider the answers to each question and
discuss the implications for studying organizational
behaviour. After reviewing these statements, the
instructor will provide information about the most
appropriate answer. (Note: This activity may be done
as a self-assessment or as a team activity.)
Comments for Instructors
This exercise addresses the point that common sense
isn’t always correct. Of course, some students will be
counter-intuitive in anticipation that these are “trick”
questions. We have included some true statements to
complicate the exercise. By reviewing each statement,
you can help students to see that organizational
behaviour systematically studies these issues and helps
us to correct or clarify popular misperceptions.
Here are the eleven statements with their correct
answers and references to their discussion in the
textbook.
1. A happy worker is a productive worker.
TRUE. To be more accurate, the answer is “true,
to some extent”. This is one of those “truths”
that students will probably answer correctly and
many OB instructors will answer incorrectly
because they rely on old organizational behaviour
research. The latest research indicates that job
satisafaction has a moderately strong association
with job performance (a correlation of around .
30). For details, see Chapter 4 on workplace
emotions and attitudes.
2. Decision makers tend to continue supporting a
course of action even though information suggests
that the decision is ineffective.
TRUE. This statement represents the escalation
of commitment phenomenon, which is described
in Chapter 10. There are several reasons why
people continue to support a bad decision. These
include: (a) self-justification -- people want to
present themselves in a positive light; (b)
gambler’s fallacy -- decision makers under-
estimate the risk and over estimate their
probability of success; (c) perceptual blinders --
decision makers do not see the problems soon
enough; and (d) closing costs -- decision makers
will persist because the costs of ending the project
are high or unknown.
3. Organizations are more effective when they
prevent conflict among employees.
FALSE. Actually, the correct answer is in a state
of flux. The dominant OB research indicates that
task-oriented is often beneficial (such as in
decision making) whereas socioemotional
conflict has negative consequences. But some
emerging research concludes that even task-
oriented conflict can be a problem. We also
discuss both the benefits of and problems with
conflict in Chapter 13.
4. It is better to negotiate alone than as a team.
FALSE. As described in the latter part of Chapter
13, team listening is an important virtue in
negotiations. The more people listening, the more
your side will hear valuable information and
understand the subtle nonverbal cues
communicated by the other party. This
information makes it easier to identify low-cost
concessions or proposals that will satisfy the other
side.
5. Companies are most effective when they have a
strong corporate culture.
FALSE. As with so many organizational
behaviour concepts, the more precise answer is “it
depends.” In Chapter 16, students will read that
there is a weak relationship between corporate
culture strength and organizational performance.
Three reasons are offered. First, a strong culture
can be a problem when the values are inconsistent
with the organization’s environment. Second, a
very strong culture can blind employees from
seeing other perspectives. Third, a very strong
culture suppresses dissenting values that may be
 important in the future as the environment
changes.
6. Employees perform better without stress.
FALSE. As we learn in Chapter 7, some level of
stress is essential for life. We need a certain level
of stress to energize us. The problem is that we
sometimes (or often) experience stress beyond this
beneficial level.
10. Top-level executives tend to exhibit a Type A
7. Effective organizational change always begins by
pinpointing the source of its current problems.
FALSE. This statement refers to the dominant
model of problem solving and organizational
change, namely, to identify the problem before
looking for solutions. In Chapter 17, we introduce
an emerging perspective of organizational change
called appreciative inquiry. According to this
model, dwelling on problems can bog down the
change process and degenerate into political.
Instead, change agents need to focus the group on
its potential and positive elements.
11. Employees usually feel overreward inequity when
8. Female leaders involve employees in decisions to
a greater degree than do male leaders.
TRUE. There is lot of debate about whether men
and women lead differently. As we learn at the
end of Chapter 14, men and women are mostly
similar in their leadership styles. But there is one
exception: female leaders involve employees in
decisions to a greater degree than do male leaders.
Of course, some female leaders are not
participative, and some male leaders are very
participative. But generally, female leaders are
more participative.
9. People in Japan value group harmony and duty to
the group (high collectivism) more than
Canadians or Americans (low collectivism).
FALSE. This statement represents one of the most
widely held views in organizational behaviour,
namely that Japanese people have high
collectivism and low individualism. Yet, several
studies (including a recent major meta-analysis)
now conclude that Japanese people tend to have
fairly low collectivism. These recent findings are
reported in Chapter 2.
behaviour pattern (i.e., hard-driving, impatient,
competitive, short-tempered, strong sense of time
urgency, rapid talkers).
FALSE. Actually, top-level executives tend to
exhibit the Type B behaviour pattern. In other
words, they tend to work steadily, take a more
relaxed approach to life, and be even-tempered. In
fact, these features may provide superior human
relations skills which give Type B people more
promotions. Type A/B patterns are described in
Chapter 7.
they are paid more than coworkers performing the
same work.
FALSE. When it comes to money, people tend to
play interesting mind games to avoid feeling
overreward inequity. Students will read in Chapter
5 that overrewarded employees often distort their
perceived inputs or outcomes to reduce
inequitable feelings. For example, they might
begin to think that their higher pay is justified
because they offer more skills or experience than
they previously thought. They might think: “This
large bonus means that the company values my
talent more than I thought!”
 ACTIVITY 1.5: SELF-ASSESSMENT
TELEWORK DISPOSITION ASSESSMENT
Purpose
This exercise is designed to help students to assess the
extent to which they possess the personal
characteristics most suitable for telework.
Overview and Instructions
Teleworking (also known as telecommuting) has
become one of the fastest-growing developments in
the workplace. With advanced computer and
telecommunications systems, knowledge workers can
now perform their work at home or another location
away from their usual office. But effective teleworking
requires more than technology. Some people are
better than others tat surviving and succeeding in
teleworking arrangements.
Feedback for the Telework Disposition Assessment
[NOTE: The following information is also provided in Appendix B and/or the Student CD.] This scale assesses three
personal dispositions that are identified in the literature as characteristics of effective teleworkers: (a) high company
alignment, (b) low social needs at work, and (c) independent initiative.
Company alignment
Company alignment estimates the extent to which you
follow company procedures and have values congruent
with company values. The greater the alignment, the
more likely that you can abide by company practices
while working alone and with direct supervision.
While some deviation from company practices may be
appropriate, teleworkers need to agree with company
values and provide work that is consistent with
company expectations most of the time. Scores on this
scale range from 4 to 20.
Score Interpretation
15 to 20 High company alignment
9 to 14 Moderate company alignment
4 to 8 Low company alignment
This instrument is designed to help students to identify
their “telework disposition”, that is, the degree to
which their needs, values, and competencies are
compatible with teleworking arrangements. This scale
does not cover every personal characteristic related to
effective teleworking, but it measures three of the
most important dispositions. Also, please keep in mind
that this scale only considers personal characteristics.
Other factors, such as organizational, family,
technological systems support must also be taken into
account.
Students are asked to read each of the 14 statements in
this instrument and indicate the extent to which they
agree or disagree that the statement describes them.
Low social needs at work
People with a high score on this subscale do not rely
on co-workers to satisfy their social needs. Successful
teleworkers tend to score higher on this subscale 9i.e.
have lower social needs at work) because teleworking
offers less opportunity for social interaction with co-
workers than when working in an office setting each
day. Scores on this scale range from 4 to 20. Notice
that HIGH scores represent LOW social needs.
Score Interpretation
15 to 20 Low social needs
9 to 14 Moderate social needs
4 to 8 High social needs
Independent initiative
One of the most important characteristics of successful Total Telework Disposition
teleworkers is that they are able to set their own work This overall score combines the results for company
goals and maintain a productive work schedule alignment, social needs at work, and independent
without direct supervision. People who score higher on initiative. A higher score indicates that students will
this subscale tend to have a higher degree of probably be more satisfied and productive in a
independent initiative. Scores on this scale range from teleworking arrangement than someone with a lower
6 to 30. score on this scale. Specifically, people with high
scores have higher alignment with company values
Score Interpretation
and practices, lower social needs at work, and higher
24 to 30 High independent initiative independent initiative. Scores on this scale range from
15 to 23 Moderate independent initiative 14 to 70.
6 to 14 Low independent initiative Score Interpretation
54 to 70 High telework disposition
34 to 53 Moderate telework disposition
14 to 33 Low telework disposition
 SUPPLEMENTAL CASE
AN UNTIMELY INCIDENT AT ANCOL CORP.
STUDENT HANDOUT
Paul Simard was delighted when Ancol Ltd. offered
him the job of manager at its Jonquiere, Quebec plant.
Simard was happy enough managing a small metal
stamping plant with another company, but the
headhunter’s invitation to apply to the plant manager
job at one of Canada’s leading metal fabrication
companies was irresistible. Although the Jonquiere
plant was the smallest of Ancol’s 15 operations across
Canada, the plant manager position was a valuable
first step in a promising career.
One of Simard’s first observations at Ancol’s
Jonquiere plant was that relations between employees
and management were strained. Taking a page from a
recent executive seminar that he attended on building
trust in the workplace, Simard ordered the removal of
all time clocks from the plant. Instead, the plant would
assume that employees had put in their full shift. This
symbolic gesture, he believed, would establish a new
level of credibility and strengthen relations between
management and employees at the site.
Initially, the 250 production employees at the
Jonquiere plant appreciated their new freedom. They
felt respected and saw this gesture as a sign of positive
change from the new plant manager. Two months
later, however, problems started to appear. A few
people began showing up late, leaving early, or take
extended lunch breaks. Although this represented only
about five percent of the employees, others found the
situation unfair. Moreover, the increased absenteeism
levels were beginning to have a noticeable effect on
plant productivity. The problem had to be managed.
Simard asked supervisors to observe and record
when the employees came or went and to discuss
attendance problems with those abusing their
privileges. But the supervisors had no previous
experience with keeping attendance and many lacked
the necessary interpersonal skills to discuss the matter
with subordinates. Employees resented the
reprimands, so relations with supervisors deteriorated.
The additional responsibility of keeping track of
attendance also made it difficult for supervisors to
complete their other responsibilities. After just a few
months, Ancol found it necessary to add another
supervisor position and reduce the number of
employees assigned to each supervisor.
But the problems did not end there. Without time
clocks, the payroll department could not deduct pay
for the amount of time that employees were late.
Instead, a letter of reprimand was placed in the
employee’s personnel file. However, this required yet
more time and additional skills from the supervisors.
Employees did not want these letters to become a
permanent record, so they filed grievances with their
labour union. The number of grievances doubled over
six months, which required even more time for both
union officials and supervisors to handle these
disputes.
Nine months after removing the time clocks, Paul
Simard met with union officials, who agreed that it
would be better to put the time clocks back in.
Employee-management relations had deteriorated
below the level when Simard had started. Supervisors
were burnt out from overwork. Productivity had
dropped due to poorer attendance records and
increased administrative workloads.
A couple of months after the time clocks were put
back in place, Simard attended an operations meeting
at Ancol’s headquarters in Toronto. During lunch,
Simard described the time clock incident to Liam
Jackson, Ancol’s plant manager in Northern British
Columbia. Jackson looked surprised, then chuckled.
Jackson explained that the previous BC plant manager
had done something like that with similar
consequences six or seven years ago. The previous
manager had left some time ago, but Jackson heard
about the BC timeclock from a supervisor during the
manager’s retirement party two months ago.
“I guess it’s not quite like lightning striking the
same place twice,” said Simard to Jackson. “But it
sure feels like it.”
Discussion Questions
1. What symptom(s) exist in this case to suggest that
something has gone wrong?
2. What are the root causes that have led to these
symptoms?
3. What actions should Ancol or Paul simard take to
correct these problems?
© Copyright 1998 Steven L. McShane. This case is
based on actual events, but names and some facts have
been changed to provide a fuller case discussion.
 SUPPLEMENTAL CASE ANALYSIS
AN UNTIMELY INCIDENT AT ANCOL CORP.
Case Synopsis
This case describes the activities of Paul Simard after
he became when he became manager at Ancol Corp.’s
plant in Jonquiere, Quebec. To build trust between
management and employees, he removed the time
clocks that kept track of employee work hours.
Although employees appreciated this freedom to work
without a time clock, some abused this privilege by
showing up late and leaving early. This affected plant
productivity. Supervisors spent more time counseling
those who had attendance problems and filling out
letters of reprimand. The letters, along with
supervisors’ poor interpersonal skills, worsened
relations. Another supervisor was added to cope with
the additional work. After nine months, Simard agreed
with union officials to reinstate the time clocks. Later,
at a meeting of other Ancol managers, Simard learned
that a similar situation had occurred at another plant a
few years earlier.
[NOTE: This case is a variation of an incident
described in R. Daft, Organizational Theory, 3rd ed.
(St. Paul, MN: West, 1989), pp. 16-17.]
Suggested Answers to Case
Questions
1. Use the systems theory model to explain what
happened when Ancol removed the time clocks.
[SUGGESTION: This case works best when each
discussion group is provided with a marker and
acetate sheet or flip chart and asked to illustrate
the events at Ancol from a systems perspective.
The results are fascinating. Typically, some
groups will diagram the systems model shown in
Chapter 1. Their drawing reveals the subsystems
in the case, such as employees, supervisors,
control systems (time clock), and management. It
may also show inputs (such as Paul Simard’s
entry), outputs (lower productivity), and feedback
from the environment (union grievances).
Other student groups might try to diagram the
relationships that affect each other, such as a
series of interrelated lines among the subsystems
within the organization. A third type of drawing
illustrates the cause-effect relationships in a time
sequence. This typically starts with the poor
relations, then removing the time clock, then
initially increasing morale but also increasing
absenteeism, and so on. This temporal image
should reveal the complexity of events in the case.
For example, poor relations was not the only
cause of the removed time clocks. Paul Simard’s
entry to the organization and his knowledge from
the seminar also contribute to this action.
(Instructors might notice how this is a classic
example of garbage can decision making -- a
problem, solution, decision maker, and situation
collide to form a decision.]
This case illustrates the problems facing
organizations from an open systems view. The
open systems view states that organizations are
comprised of interdependent parts. We certainly
see that here with the removal of time clocks. In
particular, we see how removing time clocks leads
to a string of unexpected consequences. In this
case, removing the time clocks resulted in more
work for supervisors. It also affected work
activities in payroll and, eventually, posed a new
set of problems for labor union leaders.
Supervisors now had to use disciplinary
counseling skills which many of them lacked.
Although students might suggest that lack of
counseling training is a problem here, notice that
there is no mention that it was a problem before.
It is possible in a unionized environment with
process-oriented technology, that control systems
are in place which minimize the need for
supervisors to discipline employees. For example,
time clocks control employee attendance
behaviour or, at least, provide fact-based
information. The main point, however, is that one
action (removing time clocks) ripples through to
other subsystems in the organization, as predicted
by the open systems anchor.
2. What changes should occur to minimize the
likelihood of these problems in the future?
One answer to this question is to help people at
Ancol recognize that organizations are open
 systems with interdependent parts. In other
words, they need to be sensitive to the fact that
changes in one part of the work unit affects other
parts of the work unit, as we saw at this Ancol
plant.
The second change is to apply knowledge
management practices so that what was previously
learned about removing time clocks would be
more quickly and readily known throughout the
organization. The end of the case describes how
Simard attended an operations meeting at Ancol’s
headquarters in Cincinnati, where he learned that
Ancol’s plant in Portland, Oregon had a similar
experience six or seven years earlier. This
illustrates the “silos of knowledge” problem that
exists in large organizations. If Simard had
known about the earlier incident, he might have
avoided the action of removing time locks, or
SUPPLEMENTAL LECTURE: SINGLE AND
DOUBLE LOOP LEARNING IN KNOWLEDGE
MANAGEMENT
Knowledge management has its beginnings in the
organizational behaviour writing about organizational
learning. This concept was popularized by Peter
Senge’s 1990 book, The Fifth Discipline, However,
the concept can be traced back more than a dozen
years earlier to the work of Chris Argyris and earlier
still to scholars who introduced the idea that
organizations are open systems.
One of the earliest organizational learning
perspectives was advanced by Chris Argyris in the late
1970s. Argyris suggested that organizational learning
involves the detection and correction of error. This
error might be an inefficiency in the organizational
subsystem (such as a misunderstanding between
departments) or in the organization’s relationship with
the external environment (such as failing to secure
sufficient resources for production).
Argyris calls the error detection and correction
process “single-loop learning” when the error can be
corrected through existing policies, procedures, and
norms. In contrast, “double-loop learning” occurs
when the error leads to a modification of the
might have taken steps to correct anticipated
problems. Students should discuss ways that
organizations such as Ancol can improve
knowledge sharing.
For example, the organization-wide meeting that
Simard attended seems to help share knowledge
among plant managers, albeit somewhat too late
in this case. Alternatively, perhaps the company
could leverage the benefits of Intranet technology
to help employees and managers share
experiences more fully. Even through an
integrated e-mail system, Simard could have
asked other managers if removing time clocks has
been tried before, and with what consequences.
Notice that knowledge sharing requires a culture
of open communication and information sharing,
not just the technology to make this possible.
organization’s underlying norms, policies, and
procedures.
Double loop learning involves not only responding
to the error through existing procedures, but also
experimenting with new organizational systems when
it becomes apparent that the existing systems are
ineffective.
Single and double loop learning are useful concepts
in the organizational learning literature because they
point out how employees need to think beyond the
existing organizational framework to solve problems.
This is particularly important when the environment is
changing rapidly and existing organizational systems
are no longer appropriate. In a learning organization,
employees quickly realize that the existing system
does not adequately resolve a particular problem and
that a new set of norms and policies must be
introduced to help the organization realign itself with
the changing environment.
Sources: C. Argyris and D. A. Schon, Organizational
Learning (Reading, MA: Addison-Wesley, 1978); M.
Dodgson, “Organizational Learning: A Review of
Some Literature, Organization Studies, 14 (1993), pp.
375-94; P. M. Senge, The Fifth Discipline (New York:
Doubleday Currency, 1990).
 SUPPLEMENTAL LECTURE: ISSUES IN
TELECOMMUTING
Telecommuting is becoming commonplace in some
firms, but many organizations are still having
difficulty adjusting to this new employment
relationship. As we described in Chapter 1,
telecommuting (also known as “teleworking” involves
working from home, usually with a computer
connection to the office.
Who Telecommutes?
Telecommuting is more common in some jobs than in
others. Certainly, few auto assembly employees
telecommute because the organization requires their
physical labor on-site and the tolls of their trade can’t
fit in a suitcase or backpack.
The most common jobs for telecommuting are
writing, telemarketing, forms processing, and
transcribing. Telecommuting is also relatively
common among trainers, television and movie sound
mixers, illustrators, loan executives, architects,
attorneys, desktop publishers, marketing and public
relations professionals, and project managers.
Why Telecommute?
The literature has identified several reasons why
telecommuting has become more popular:
Minimizing Traffic Congestion. Silicon Valley’s
famous traffic jams have motivated many employees
and companies to try out telecommuting as an
alternative.
Addressing Environmental Concerns. California and
other jurisdictions have established challenging goals
to reduce air pollution. Individuals are also more
conscious about how their actions affect the
environment. By working from home or a satellite
office rather than traveling a long distance to work,
people are helping to improve air quality.
Attracting Talent. In the opening story to this
chapter, we learned that Cisco Systems is willing to let
some job applicants remain at their previous residence
-- even when on the other side of the country. This
flexibility motivates talented people to join Cisco and
other companies that practice telecommuting.
Telecommuting is a desirable working condition to
some (many?) people, so it becomes a way of
attracting top talent.
Accommodating Diversity. Telecommuting allows
those with restricted access to the workplace to
complete their required tasks. People with disabilities
can participate in the labor force where their expertise
involves knowledge work. This includes employees
who are injured, yet want to return to work while
convalescing. Women can return to work sooner, if
they wish, without leaving home. Men also have more
opportunity to fulfill household responsibilities
without giving up paid employment.
Reducing Corporate Costs. Telecommuting
potentially saves companies money because they
require less space to physically accommodate
employees. Many firms (including some of Cisco
Systems’ offices) shift to a nonterritorial office format
whereby employees take whatever work space is
available when they do commute to the corporate or
branch office. (This is discussed in Chapter 8.) There
are some costs the employer of telecommuting (e.g.
providing computer equipment and network access),
but these are offset by the physical space savings.
Increasing Productivity. Research consistently has
found that the productivity of those who telecommute
is higher than that of workers in the standard office
environment. Moreover, telecommuters have lower
absenteeism. Also notice from Chapter 1 that
employees tend to be available more often and at
unusual hours when they telecommute.
Telecommuting Issues
In spite of its benefits, organizations and would-be
telecommuters must think carefully about the
following issues that arise with this employment
relationship:
Clarifying Expectations. Along with performance
expectations, employees and their bosses must develop
a common set of expectations regarding their
availability. A supervisor might expect that the
employee is at work during the same hours as
colleagues at work, whereas the telecommuter might
assume that it’s acceptable to take a couple of hours
off to do shopping, then work in the evening. In other
words, telecommuters need to know their degree of
work time flexibility.
Monitoring Work. Companies have difficulty moving
away from “face time” as an indicator of work
performance. They need to find new and better ways
to monitor employee performance. Typically,
telecommuting shift work monitoring from time-
based indicators (hours at work) to an output-based
indicators (number of tasks completed).
Minimizing Isolation. Although employees enjoy the
freedom of telecommuting, many eventually realize
that they “lose touch” with the workplace. Work fulfils
a social need, not just the need for accomplishment
and financial security. Moreover, face time is a
political tactic that potentially influences the
employees career opportunities and choice of
assignments. Thus, many telecommuting arrangements
SUPPLEMENTAL LECTURE: KNOWLEDGE
MAPPING
One of the most common laments in larger
organizations is “I wish we knew what we know.” To
rectify this problem, a few organizations engage in
knowledge mapping -- identifying what knowledge the
organization holds about a key product or service, and
creating a directory so that this knowledge may be
found quickly. For example, Unilever recently mapped
everything it knew around the world about tomatoes:
about sources of pulp for tomato sauce, about the pulp
itself, the fruit and the seeds. The result was a
knowledge map that helps Unilever employees quickly
find corporate knowledge in this area.
Hewlett-Packard has been a pioneer in knowledge
mapping. The high technology company had to create
road maps where coworkers can quickly identify what
knowledge is needed and where it is located.
“Knowledge Mapping is a process that identifies
knowledge, skills, collateral and tools needed to sell or
deliver a solution,” says Marilyn Martiny, Knowledge
Services Manager at Hewlett-Packard’s consulting
division. “The map is used as a guide to what
knowledge is important and where it can be found.”
A typical knowledge mapping process brings together
experts within the organization, who identify what
knowledge is needed, what gaps exist in current
knowledge capabilities, and what skills are required
include the requirement that employees attend the
regular workplace a couple of days each week.
Sources: E. J. Hill, B. C. Miller, S. P. Weiner, J.
Colihan, “Influences of the Virtual Office on Aspects
of Work and Work/Life Balance,” Personnel
Psychology, 51 (Autumn 1998), 667-683; M. M.
Fitzer, “Managing from Afar: Performance and
Rewards in a Telecommuting Environment,”
Compensation and Benefits Review, 29 (January-
February 1997), pp. 65-73; M. Hequet, “How
Telecommuting Transforms Work,” Training 31
(November1994), pp. 57-61.
for a particular project or work activity. It creates a
collective view of the knowledge and skills required to
successfully perform each step in the work process.
This framework is a valuable resource for knowledge
sharing an utilization because it enables others to
quickly identify and retrieve knowledge
.
Sources: N. Venkatraman and J. C. Henderson, “Real
Strategies for Virtual Organizing,” Sloan Management
Review, 40 (Fall 1998), pp. 33+; M. Martiny,
“Knowledge Management at HP Consulting,”
Organizational Dynamics, 27 (Autumn 1998), pp. 71+;
R. M. Fulmer, P. Gibbs, and J. B. Keys, “The Second
Generation Learning Organizations: New Tools For
Sustaining Competitive Advantage,” Organizational
Dynamics, 27 (Autumn 1998), pp. 6+; C. O’Dell and
C. J. Grayson, “If Only We Knew What We Know:
Identification And Transfer Of Internal Best
Practices,” California Management Review, 40 (Spring
1998), pp. 154-174; T. Jackson, “Harnessing The
Power,” Financial Post, June 18, 1998, p. 33. For
discussion of knowledge mapping, see T. Davenport
and L. Prusak, Working Knowledge: How
Organizations Manage What They Know (Boston:
Harvard Business School Press, 1998);
. VIDEO SUGGESTIONS
Along with the video case(s) for this section of the tedxtbook, the following videos and films generally relate to one or
more topics in this chapter. These programs may be available at your college/university or rented from the distributor.
Please contact your film librarian to determine the availability of these programs at your institution. This list was
compiled from library holdings of several universities. Due to the variety of video material, this is not a
comprehensive list. Nor can we say that all of the programs below are suitable for your class.

NOTE: Instructors should look through the video Handy, an international writer on organizational
suggestions section in other chapters to find videos behaviour, discusses the future of organizations, the
relating to the emerging themes discussed in this changing nature of work and management and the
opening chapter of the textbook. need for adaptation. ISBN 0563208309

Creating the Learning Organization. (1997, 76 min.,
VHS) These three video programs (created by CASE
Television for BBC) describe the organizational-
learning techniques used by successful companies.
They discuss how to implement change and develop a
learning culture within a business and how to analyze
an organization's learning style. The three programs
are entitled: 1. Learning to survive v. 2. The learning
experience v. 3. Making it happen.
Soaring to Excellence, Learning to Let Employees
Lead. (1994, 30 min., corVision Media). James A.
Belasco & Ralph C. Stayer share the belief that the
critical difference in today's companies rests in the
"intellectual capital" found in the people who make-up
the entire organization. This program is based on a
book by the same name, written by Belasco and
Stayer.
Handy on the Future of Organizations. (1990, 18
min., VHS). This BBC production features Charles
The Change Masters: Understanding The Theory.
(1987, 22 mins, VHS) Dr. Rosabeth Moss Kanter
identifies “change masters” as individuals and
companies who anticipate change and respond with
new ideas. She describes the seven ingredients that are
essential to successful change masters and explains
how to create the kind of environment that builds
innovation and promotes acceptance to change.
The Change Masters: Putting The Theory Into
Action (1987, 42 mins., VHS) This program profiles
three major companies: Hewlett-Packard, Security
Pacific Bank, and the Stanley works. They have
refocused their business strategies in order to compete
more effectively in an ever-changing business
environment. All three illustrate successful
implementation of the “change master” concepts
developed by Dr. Kanter in her book The Change
Masters
NOTES