Lecture 1: Motivation

Performance = f (Motivation x Ability)

Motivation are processes that account for an individuals intensity, direction, and
persistence of effort toward a goal
Ability is the mental or physical capacity to do something
Basic motivation process
Expectancy theory: Need theories focus on what motivates behavior

Expectancy theory (formulated by Victor Vroom) focuses on

o how employees decide which behaviors to perform
o how much effort to exert
o individuals as rational, careful processors of information

Expectancy 3 Factors:
Expectancy is belief that effort leads to a specific level of performance (varies from 0
to 1)
Influences on individuals expectancies:
o Self-efficacy (affected by previous success at task)
o Help received from others
o Information, materials, equipment necessary to complete task

Instrumentality is belief about extent to which performance will lead to

attainment of a particular outcome (varies from -1 to +1)
o Instrumentality of +1: Attainment of particular outcome is totally dependent on
task performance
o Instrumentality of -1: Performing certain behaviors reduces the chance of
obtaining outcome
Valence is desirability of an outcome to an individual (varies from -x to +x)
o Depends on an individuals needs ( Maslow)

o Remember: Reward system represents mix of intrinsic and extrinsic rewards

(monetary rewards should be at least 7% above employees base pay to truly
motivate people)
o Your effort affects performance. People have a locus of control but cannot
always control everything.
o You are only going to be motivated if you care about the outcome

Model deceptively simple, but there are problems:

o Tendency to assume that performance means easily measurable, individual,
bottom-line results
o Rewards can easily be tied to performance when employee is relatively
autonomous. But what happens if employee is part of larger group?
o Timeliness of reward administration is easy to achieve with intrinsic rewards
which flow from performance itself (employee reward themselves) but more
difficult for extrinsic rewards, such as pay increases or promotions
o Meeting the requirement of equity, both external (other organizations) and
internal equity (same organization)
Additions
o Degree to which effort leads to performance is modified by employees
abilities (skills, training, etc.)
o Ability of valued rewards to satisfy needs is modified by perceived equity
Equity Theory: Equity theory holds that motivation is a function of fairness in social
exchanges
o When victimized by unfair social exchanges, corrective action is taken (from
slight change in attitude or behavior to stealing and trying to harm someone)

o People attempt to get even for perceived injustices by using either direct
(e.g., theft, sabotage, or violence) or indirect (e.g., intentionally working
slowly) retaliation
o Costs of workplace violence and employee theft is approximately $36 and
$200 billion annually, respectively
Outcome/input ratio: Relationship between what an employee gets from a job
(outcomes) and what the employee contributes to the job (inputs)
o Inputs: Education/training, skills, creativity, seniority, age, personality traits,
effort, personal appearance
o Outcomes: Pay/bonuses, fringe benefits, challenging assignments, job security,
promotions, status symbols, recognitions, participation in important decisions
Comparison of own o/i ratio to ratio of other person
o Referent: Other employee or group of employees, oneself at a different place
or time, ones expectations

Ways to restore equity

o Employees can change their inputs or outcomes (e.g., underpayment inequity is
restored by reducing ones inputs or increasing ones outputs)
o Employees try to change their referents inputs or outcomes (e.g.,
underpayment inequity is restored by increasing others inputs or decreasing
their outputs)
o Employees can change their perception of inputs and outcomes (either their
own or their referents) (especially for overpayment inequity)
o Employees can change their referent
o Employees leave the job or organization or force the referent to leave

Goal Setting Theory application

o Productivity and Cost Improvement
o Loggers cut more trees, and unionized truck drivers increased the logs loaded
on their trucks from 60% to 90% of the legal allowable weight as a result of
assigned goals. The drivers saved the company $250,000 in 9 months
o Subsequent study saved $2.7 million dollars in 18 weeks by assigning
unionized drivers the goal of increasing their number of daily trips to the mill

Motivation Concepts (R)

Motivation: processes that account for an individuals intensity, direction and
persistence of effort toward attaining a goal *organizational goals
o 3 key elements: intensity, direction and persistence
o Intensity: describes how hard a person tries.

High intensity is unlikely to lead to favorable job-performance

outcomes unless the effort is channeled in a direction that benefits the
organization we consider the quality of effort as well as its intensity
Effort directed toward and consistent w the organizations goals the
kind of effort we should be seeking
Persistence: measures how long a person can maintain effort

Maslows Hierarchy of Needs: hypothesized that within every human being, there
exists a hierarchy of five needs:
1. Physiological. Hunger, thirst, shelter, sex, other bodily needs
2. Safety. Security and protection from physical/emotional harm
3. Social. Affection, belongingness, acceptance, friendship
4. Esteem. Internal factors such as self respect, autonomy, and achievement,
and external factors like status, recognition and attention
5. Self-actualization. Drive to become what we are capable of becoming;
includes growth, achieving our potential and self fulfillment
Theory X and Theory Y
o Douglas McGregor proposed 2 distinct views of human beings: one basically
negative (Theory X) and the other basically positive (Theory Y)
o Theory X: managers believe employees inherently dislike work and must
therefore be directed or even coerced into performing it
o Theory Y: managers assume employees can view work as being as natural as
rest or play, and therefore the average person can learn to accept and even seek
responsibility
Two Factor Theory
o Believed an individuals relationship to work is basic and that attitude toward
work can very well determine success or failure
o Concluded that the replies people gave when they felt good about their jobs
differed significantly from the replies given when they felt bad
o Intrinsic factors such as advancement, recognition, responsibility and
achievement seem related to job satisfaction
o Respondents who felt good about their work tended to attribute these factors to
themselves dissatisfied respondents tended to cite extrinsic factors, i.e.
supervision, pay, company policies and working conditions
o Opposite of satisfaction is not dissatisfaction. Removing dissatisfying
characteristics from a job doesnt necessarily make the job satisfying
o Existence of a dual continuum: the opposite of satisfaction is no
satisfaction and the opposite of dissatisfaction is no dissatisfaction
o Characterized conditions such as quality of supervision, pay, company policies
and physical working conditions, relationships w others and job security as
HYGIENE FACTORS.
McClellands Theory of Needs
o Developed by David McClelland; focuses on 3 needs:
Need for achievement (nAch): drive to excel, to achieve in relation to
a set of standards, to strive to succeed

Need for power: (nPow) need to make others behave in a way in which
they would not have behaved otherwise
Need for affiliation (nAff): desire for friendly and close interpersonal
relationships
o Focused most attention on nAch.
High achievers perform best when they perceive their probability of
success as .5 or a 50-50 chance of success
Dislike gambling both with high odds and low odds, because then there
Is no challenge to their skills like to set goals that require stretching
themselves a little
o 1. When jobs have a high degree of personal responsibility and feedback and
an intermediate degree of risk, high achievers are strongly motivated;
successful in entrepreneurial activities such as running their own businesses
and managing self contained units within large organizations
o 2. A high need to achieve does not necessarily make someone a good manager,
especially in large organizations. Interested in how well they do personally
and not in influencing others to do well.
o 3. Needs for affiliation and power tend to be closely related to managerial
successbest managers are high in their need for power and low in their need
for affiliation. A high power motive may be a requirement for managerial
effectiveness
Contemporary Theories
Self determination theory: people prefer to feel they have control over their actions,
so anything that makes a previously enjoyed task feel like an obligation than a freely
chosen activity will undermine motivation
Cognitive evaluation theory: extrinsic rewards will reduce intrinsic interest in a task;
when people are paid for work it feels less like something they want to do and more
like something they have to do
Self concordance: considers how strongly peoples reasons for pursuing goals are
consistent w their interest and core values if individuals pursue goals bc of an
intrinsic interest, they are more likely to attain their goals and are happy even if they
dont because the process of striving toward them is fun
Goal Setting Theory
o Addresses issue of doing your best might we do better if we have specific
goals?
o Specific goals increase performance
o Difficult goals, when accepted, result in higher performance than do easy
goals
o Feedback leads to higher performance than does non-feedback
o Goal commitment: Goal setting theory assumes an individual is committed to
the goal and is determined not to lower or abandon it
o Task characteristics: Goal setting theory works better in some tasks goals
seem to have a more substantial effect on performance when tasks are simple
rather than complex,

Management by objectives (MBO): emphasizes participatively set goals that are tangible,
verifiable, and measurable
o A more systematic way to utilize goal setting
o Overall objectives are translated into specific objectives for each succeeding level in
the organization but because lower unit managers jointly participate in setting their
own goals, MBO works from the bottom up as well as from the top down results in
a hierarchy that links objectives at one level to those at the next
Self Efficacy Theory
o Self-efficacy: aka social cog theory or social learning theory refers to an individuals
beliefs that he is capable of performing a task. The higher your self efficacy, the more
confidence you have in your ability to succeed
o Individuals high in self efficacy seem to respond to negative feedback with increased
effort and motivation; low self efficacy likely to lessen effort when given negative
feedback
o can increase self efficacy by:
o Enactive mastery: Most important; gaining relevant experience w the task/job
o Vicarious modeling: Becoming more confident because you see someone else
doing the task
o Verbal persuasion: Becoming more confident bc someone convinces you that
you have the skills necessary to be successful
o Arousal: Leads to an energized state, which drives a person to complete a task
Equity Theory/Organizational Justice
o Equity plays a role in motivation employees perceive what they get from a
job situation in relation to what they put into it, and then compare their
outcome-input ratio with that of relevant others
o 4 referent comparisons:
Self inside: an employees experiences in a diff position inside the
employees current organization
Self-outside: an employees experiences in a situation or position
outside the employees current organization
Other-inside: another individual or group of individuals inside the
employees organization
Other-outside: another individual or group of individuals outside the
employees organization
o Moderating variables: gender, length of tenure, level in the organization and
amount of education or professionalism
o Employees who perceive inequality will make one of 6 choices:
Change inputs (exert more/less effort if over/under paid)
Change outcomes (increase quantity, decrease quality)
Distort perceptions of self
Distort perceptions of others
Choose a different referent
Quit the job
Expectancy theory: victor vrooms, argues that the strength of a tendency to act in a certain
way depends on the strength of our expectation of a given outcome and its attractiveness

Focuses on 3 relationships:
o Effort performance relationship: probability perceived by the individual that
exerting a given amount of effort will lead to performance
o Performance reward relationship: the degree to which the individual
believes performing at a particular level will lead to the attainment of a desired
outcome
o Rewards-personal goals relationship: degree to which organizational
rewards satisfy an individuals personal goals or needs and the attractiveness of
those potential rewards for the individual

Lecture 2: Motivation
The truth about relativity (R)
We have a tough time making evaluations. We like equalizers
If we see good tom, ugly tom and good jerry, we are more likely to be good
tom because we had something to compare it to
The brother-in-law syndrome(R)
o Equality vs. equitywhat is the difference?
Theyre not the same. Equity and inequity are perceptions of the ratio of
outcomes to inputs that are experienced in relation to a comparison
person
Op/Ip = Oo/Io (attained when this is true)
Op= outcomes received by self (p) from an experience
Ip= inputs exerted by self to achieve the experience
Oo= outcomes received by another (o) from an experience, as
seen by p
Io= inputs exerted by another to achieve the experience, as seen
by p
Equality is where outcomes of self and another are equal
Op = Oo
o Can you have equity without equality?
yes
o What are the sources of inequity in this example?
Brother in law makes more money, put in fewer inputs (didnt go to
college, also doesnt work as hard)
o Classify strategies employed by author to restore equity
Request more outcomes from employer salary and better office, more
secretarial services, more travel money, etc.
Decide that job is more interesting, more meaningful than driving a
truck
Over the road truck driving was aversive greasy truck stops,
unhealthy kidneys, bruised lower back muscles

Withdrew from comparison dont speak to him anymore!

Be smart about who you choose as a reference
Motivation through design of jobs
o Job rotation (or cross-training): periodic shifting of an employee from on task
to another (usually at the same level with similar skill requirements)
o Autoliv automobile airbag manufacturing plant
o Autoliv replaced its assembly line with U-shaped production cells that consist
of a group of workstations staffed by handful of employees
o Worker change their job every 24 minutes when Autoliv announces job
rotation by piping rock music from Steam: Na, na, na, na, hey, hey, hey, goodbye
Job enrichment: Increasing employees responsibility and control over work (vertical
job loading)
o Allow employees to plan their own work schedules (e.g., allow secretary to
determine when he or she does various tasks and how much time to allow for
each activity)
o Allow employees to decide how the work should be performed (e.g., if
managers wants secretary to prepare a new company brochure, manager may
let secretary decide how to design brochure)
o Allow employees to check their own work (e.g., instead of insisting that
secretary gives a draft of the brochure to the manager to check for errors, the
manager holds the secretary responsible for producing an error-free brochure)
o Allow employees to learn new skills (e.g., secretary may be given opportunity
to learn bookkeeping)
Job characteristics model: An approach to job design that aims at identifying
characteristics that make jobs intrinsically motivating
o Built on early approaches but went further attempt to identify exactly which
job characteristics contribute to intrinsically motivating work
Each job has five core job dimensions:
Skill variety
Task identity
Task significance
Autonomy
Feedback
Core Job Dimensions:
o 1. Skill variety: Extent to which job requires employee to use a number of
different skills or abilities
o 2. Task Identity: Extent to which job involves performing a whole piece of
work from its beginning to its end
o 3. Task significance: Extent to which job has impact on lives of other people
(in or out of organization)
o 4. Autonomy: Extent to which job allows freedom to schedule work and
decide how to carry it out

o 5. Feedback: Extent to which performing job provides clear information about

effectiveness
Motivating potential score: A measure of the overall potential of a job to foster
intrinsic motivation
o Based on employees perceptions of their jobs on each core dimension

Range: 1 to 343
Lowest observed score: 7 (typist in an overflow typing pool)
Highest observed score: 300 (management consultant)
Average MPS in U.S. corporations: 128

Psychological states
o Five job dimensions contribute to three critical psychological states
Experienced meaningfulness of work: Extent to which employees feel
their job is important, worthwhile, and meaningful
Experienced responsibility for work outcomes: Extent to which
employees feel personally responsible or accountable for their job
performance
Knowledge of results: Extent to which employees know how well they
perform their jobs
Individual differences
o Employees may differ in the way they respond to the redesign of their jobs
Growth need strength: Extent to which individual wants his or her work
to contribute to personal growth, learning, and development
Knowledge and skills: Extent to which individual possesses knowledge
and skills necessary to perform job effectively
Satisfaction with work context: Extent to which employees are satisfied
with extrinsic outcomes, such as pay, benefits, job security, etc.
Research Evidence
o Overall conclusion: Employees tend to prefer jobs that are high on five core
dimensions higher satisfaction and intrinsic motivation
o BUT, job dimension have most significant effects on intrinsic motivation and
on job satisfaction; the effects on actual work behaviors are not as strong
o Simply adding the scores for the job characteristics might be a better way of
calculating the motivating potential score than using the multiplicative formula
American Chopper
o Dependent upon extrinsic
o The best moment is when the car starts

o There is skill variety and task identity

Motivation Application (R)

motivating by changing the nature of the work environment
job design: suggests he way the elements in a job are organized can act to increase or
decrease effort and also suggests what those elements are
Job Characteristics Model (JCM): describe any job in terms of five core job
dimensions
o Skill variety: degree to which a job requires a variety of different activities so the worker
can use a number of different skills and talent
o Task identity: degree to which a job requires completion of a whole and identifiable
piece of work
o Task significance: degree to which a job has an impact on the lives or work of other
people
o Autonomy: degree to which a job provides the worker freedom, independence and
discretion in scheduling the work and determining the procedures in carrying it out
o Feedback: degree to which carrying out work activities generates direct and clear
information about your own performance
o job rotation: periodic shifting of an employee from one task to another with similar skill
requirements at the same organizational level (aka cross training)
o job enrichment: expands jobs by increasing the degree to which the worker controls the
planning, execution and evaluation of the work
alternative work arrangements

o flextime: flexible work time, employees must work a specific number of hours
per week, but can vary the hours of work within certain limits
job sharing: allows 2+ individuals to split a traditional 40 hour a week job
allows organizations to draw on talents of more than one individual in a given job
telecommuting: working at home at least 2 days a week on a computer linked to the
employers office (similar to virtual office) working from home on a relatively permanent
basis
advantages: larger labor pool from which to select, higher productivity, less
turnover, improved moral and reduced office space costs
disadvantages: employees with high social need may feel isolated, those who are
vulnerable to out of sight, out of mind might lose out on raises and promotions
social and physical context of work
o social characteristics that improve job performance: interdependence, social
support, and interactions with other people outside work
enhance moods, help clarify their work role, gives employees greater
opportunities to obtain assistance w their work, ring about a positive feedback
loops as employees assist one another
work context also matters physical demands make people physically
uncomfortable, which is likely to show up in lower levels of job satisfaction
employees need adequate tools, equipment, materials, favorable working
conditions, helpful co-workers, supportive work rules and procedures, sufficient
information to make job related decisions and adequate time to do a good job in
order to perform well
employee involvement: participative process that uses employees input to increase
their commitment to the organizations success if we engage workers in decisions
that affect them and increase their autonomy and control over their work lives, they
will become more motivated, more committed to the organization, more productive
and more satisfied with their jobs
o participative management: joint decision making; subordinates share a significant
degree of decision making power w their immediate superiors
for this to work, employees must be interested in the issue so that they are
motivated, and that must also be competent and knowledgeable in order to
make a useful contribution
advantages: higher stock returns, lower turnover rates and higher estimated
labor productivity
disadvantages: participation typically only has a modest influence on variables
such as employee productivity, motivation and job satisfaction - it is not a
sure means for improving employee performance
o representative participation: aka the most widely legislated form of employee
involvement around the world
goal is to redistribute power within an organization, putting labor on a more
equal footing w the interests of management and stockholders by letting
workers be represented by a small group of employees who actually participate

works councils = groups of nominated or elected employees who must be

consulted when management makes decisions about employees
board representatives = employees who sit on a companys board of directors and
represent the interests of the firms employees
minimal influence
greatest value of representative participation is symbolic
o employee involvement --- motivation theories
theory y is consistent w participative management and theory x with the more
traditional autocratic style of managing people
2 factor theory employee involvement programs could provide intrinsic
motivation by increasing opportunities for growth, responsibility and
involvement in the work itself
opportunity to make and implement decisions and then see them work out can
help satisfy an employees needs for responsibility, achievement recognition
growth and enhanced self esteem
Lecture 3: Creativity
Intrinsic motivation leads to creativity because it creates a drive to go above and
beyond
IDEO (R)
o He thinks that people want to be creative so you should give them freedom and
autonomy makes people feel responsible for the work they are doing
o What works at IDEO wont work everywhere. All they have to do is try to
have new ideas and get those ideas out into the world bc they can focus
utterly on experimentation, on exploring ideas for the sake of exploring them
and on bringing unlikely people together to work
o Ideas arent as good when focused on finishing on time and on budget
o Makes a big difference when senior leadership immerses itself in innovationeither appointing who does innovation, knowing whats going on at various
levels, and defending good ideas
o Biggest barrier is needing to know the answer before you get started
o Its better to have a bigger ecosystem for innovation than a smaller one youll
get more ideas and increase the likelihood of better ideas
o Innovation and incentives people want to put things out in the world and
leave their mark, they want to be creative theyre inherently motivated
o
Nike:
o Hired an architect to design shoes. Creativity comes with criticism and
persistence. Openness to experience leads to creativity. He made an analogy of
the building to the shoes he designed.
o Creative ideas are novel to domain but not to the world
o To be creative you need to understand your domain. Most people work in the
same domain for 10+ years

o Assumptions are bad for creativity. Think of airplane alternatives.

Creativity: Ideas that are original (rare, novel) and potentially useful (to the
organization)
Componential theory of creativity
o Expertise/knowledge (technical, procedural, etc.)
o Creativity-relevant skills: Personality (openness to experience, nonconforming, risk taking, persistence, etc.), creative thinking-techniques, etc.
o Intrinsic motivation (vs. extrinsic motivation)
Intrinsic Motivation:
o Persons view of the task (as interesting, challenging, etc.)
o Persons reason for engaging in it (enjoyment, etc.)
Creativity is made from expertise, intrinsic motivation and creative skills
(R) Whats Stifling Creativity at CoolBurst
o Describe the background of the case
Luisa Reboredo is now CEO of the Miami-based fruit juice company.
Performance was stagnant used to be the most successful juice maker
in the southeast. Sold in most schools vending machines and in
thousands of restaurants. Her son points out that you cant get a
coolburst anywhere else and that its for kids. thirst smashers are
taking over have the new flavors (from sam Jenkins who left cool
burst because he wasnt allowed to experiment or be creative
o Identify the conditions at CoolBurst that seem to undermine creativity (use
factors from reading, among others)
Limited to school vending machines and restaurants
Very formalized everything done as efficiently as possible.
Employees loyal and conservative in both mind and manner. Formal
dress. Very polite
like a well-oiled machine not many bells and whistles to what they
do, but they do it well
employees didnt like who Jenkins was trying to change things
considered a trouble maker
if it aint broke, dont fix it mentality
youre either born creative or youre not brainstorming wont help
mentality of CEO
valued tradition and self discipline and respect for authoirty
o Describe Sam Jenkins in terms of the Big Five personality characteristics. Is he
intrinsically or extrinsically motivated (concrete example)?
Not conscientious arrived late to work and left early, blared rock and
roll music
High openness to experience loved to challenge norms
Extraverted everyone entitled to his opinion
Neurotic? worried about the company, would tell everyone that
coolbursts success was just from being in the right place at the right
time when there was no competition

Agreeable not very. Rubbed a lot of people the wrong way

he is intrinsically motivated he passed up high paying jobs on wall
street to work at coolburst in the trenches
o What can Luisa Reboredo do to foster creativity at CoolBurst (at least three
concrete suggestions)?
Try to make the culture less formal allow decorations on the walls,
have brainstorm sessions, start hiring for creativity, set a precedence
that its okay to do something different
Focus groups with customers to keep up with trends
Instate a system of feedback
Allow time for work not directly related to business
Encourage, dont restrain, wild ideas

Lecture 4: More on Creativity

Motivation for creativity
o Motivational states affect creativity by influencing cognitive resources
invested in the task (extrinsic motive salient less resources; intrinsic
motives salient more resources)
Synergistic combinations of intrinsic and extrinsic motivation
o Initial motivation state
o Synergistic extrinsic motivators (e.g., reward, recognition, and feedback that
confirm competence as well as feedback that improves competence)
o Timing (problem identification, preparation, response generation,
validation/communication)
Lotus
o Lotus started to have trouble developing new products
o By 1985, around the time when the company had grown to more than 1,000
employees, many original members felt that they no longer fit in
Microsoft (R)
Why do so many bright, hard-working people want to join Microsoft (particularly in
the 80s)?
o Gates early vision of a computer on every desk in every home, running on
Microsoft software
o Feeling of doing very significant work (Its the old change the world thing)
(see Tim Brown interview for examples at IDEO)
o Respect for young, bright programmers ( offices)
o Attraction of money (particularly in later years) but this could not have been
major motivation when the company was still privately held (went public
March 13th, 1986)
Once on board, why do people work so hard?
o Campus-like culture (e.g., corporate park as college campus, recreational
opportunities, cafeterias with subsidized food, personalized individual spaces,
etc.)
o Ownership raises motivation and retention

o Mentoring to support effort-performance linkage ( expectancy)

o Clear performance-reward linkage ( instrumentality)
o Evaluation process (forced-curve, zero-sum distribution 25% undesirable
Level 3)Problems?
o Constantly stretching and challenging managers and developers to the limits of
their abilities, opportunities for personal development ( JCT)
o Culture reinforced competitiveness of Type A personalities
GOAL SETTING THEORY
o What are the limits of Microsofts recruiting practices? What concerns do you
have about their screening process?
o Focus only on smart, driven programmers
o Neglect of vital personal characteristics such as teamwork and leadership
o Extremely high standards (n-1 philosophy, no hire default) burnout

Lecture 5: Power and Influence

Microsoft (r)
E-book (software designed to run on a pad with touch screen) is given thumbs down
(1998)
Stock price reaches all-time high of $120 (1999) (millionaires vs. minions; towel
revolution, 2003)
The bell curve
o Every unit forced to declare a certain % of employees as top, good, average,
and below average performers
o Competition w/ other employees, not companies
o Superstars avoid working w/ other top notch players
o Reaching ones performance goals no longer guarantee for high ranking as
other employees could exceed sabotage
o Short-term focus
o Horse trading among team leaders (30)
What is the purpose of the as appropriate interviewer?
o Independent (outside) review ensures good fit with Microsofts culture and
standards (veto power)
o Outside perspective
o Particularly important in industry that is chronically short-handed pressure
to hire substandard people (n minus 1 philosophy and default decision is no
hire policy)
What are the limits of Microsofts recruiting practices? What concerns do you have
about their screening process?
o Focus only on smart, driven programmers
o Neglect of vital personal characteristics such as teamwork and leadership
o Extremely high standards (n-1 philosophy, no hire default) burnout
Definition of power: refers to capacity that A has to influence the behavior of B, so
that B does something he/she would not otherwise do

o Capacity (or potential): One can have power but not realize it
o Dependence relationship: The greater Bs dependency on A, the greater is As
power in the relationship
o Discretion: B has some discretion over his/her behavior
o Omnipresence: Power can reside within anyone at any level of the organization
(e.g., low raking members who have important knowledge)
o Contextuality: Power often depends on the situation
Dependency
General dependency postulate
o When you possess something that others require but that you alone control,
you make them dependent on you increase in power
o If something is plentiful, possession of it will not increase your power
Sources of dependency
o Importance (e.g., Marketing departments in organizations)
o Scarcity (e.g., Ferruccio Lamborghini during World War II.)
o Nonsubstitutability (e.g., well-published faculty members)
Base Of Power
o Individual
Formal: Coercive, reward, legitimate
Personal: Expert, referent
Excercising Influence: Myths and Realities
o Formal authority does not guarantee influence establishing trust (character x
competence) via sharing of power (empowerment)
o Formal authority is a very limited source of power most people who can
make managers lives difficult are people they have no formal authority over
(e.g., bosses and peers)
o Management has to do as much with negotiating interdependencies as with
formal authority

Myth

Reality

Operative Principles

Authority

Interdependence

Source of Power

Formal authority

Everything but

Key players

Subordinates

Those outside formal authority

Desired outcomes

Control, compliance

Commitment, empowerment

Key competencies

Technical

Technical, human, conceptual

How to acquire power and exercise influence with those on whom you are dependent?
o Primary way of acquiring influence in the absence of formal authority is
through law of reciprocity (universal belief that people should be paid back
for what they do)
o Cultivate networksmutually beneficial exchange relationships based on the
law of reciprocity with those on whom you are dependent

o Determine currencies (cooperation, information, reputation, inclusion, etc.)

that you might have to offer and that your allies might need or want
o Formal authority does not guarantee influence establishing trust (character x
competence) via sharing of power (empowerment)
Influence and Power (R)
o Myths and realities; the case of new managers
o Formal authority does not guarantee influence establishing trust (character x
competence) via sharing of power (empowerment)
o Formal authority is a very limited source of power most people who can
make managers lives difficult are people they have no formal authority over
(e.g., bosses and peers)
o Management has to do as much with negotiating interdependencies as with
formal authority
o Soon learn that formal authority does not guarantee influence
o Influence through trust via sharing power
o Ironically, to be effective, managers must develop the capacity to exercise
power and influence effectively without relying solely on their formal
authority. They have to establish trust and credibility with their subordinates
before they can influence them.
o To gain commitment or changes in attitude as well as behavior, managers
have to empower others. Empowerment means sharing power with othersthat is, providing others with positional and personal sources of power so that
they too have the potential to influence
Paradox: sharing power actually increases a managers power
This is because it promotes trust and builds connections with others
Managers must recognize a new set of dependences
o Dependencies on those whom they have no formal control over
o Being a manager is a position of interdependence with people both inside and
outside the company
Managers can implement their agendas only by effective network building
o Identify those on whom you are dependent to get your job done
o Step into their shows- what can you offer them that they want?
o Assess the quality of your relationships
Trust (a function of how an individual perceives a managers
competence) vs. credibility (a function of an individuals perceptions of
whether he or she trusts the manager and whether the manager has
influence)
With trust, people will be less stringent about whether you are paying
back in kind
This flexibility is invaluable to managers
o You may have power but not exercise it. If you have something special you
have power. Personal power is more useful. Formal authority is never enough,
you need to be influential. You can offer people things that they need.
Stanford Breakfast Speech

o 6 basic rules of human behavior and reciprocation is #1. People feel they owe
people and you say yes to the people you owe.
Start with a high favor and then lower it. It increases the likelihood that
they will say yes
o 1. Reciprocity
o 2. Scarcity: people want what they cant have so you need to make it seem like
they cant get it anywhere else.
o 3. Authority
o 4. Consistency: arrange for public commitment
o 5. Consensus: what are other people doing?
o 6. Cooperation: how can I help?
Lecture 6: Science of Persuasion
Experiment in U.S. national park
o Sign was put up pointing out that lots of people had stolen wood in the past,
much damage had been done and asking people to stop
Experiment with water preservation in hotels
o We invite you to join with us to conserve water by using your towels more
than once
o Message is successful (about 60 percent of the time)
Reciprocity By Proxy:
o Traditional reciprocal exchange
A provides resources to Party B, making Party B feel indebted to Party
A, which in turn obligates Party B to return the favor to Party A
o Reciprocity-by-proxy
Party A can also create in Party B a personal obligation to reciprocate
by providing resources on Party Bs behalf to a third party (Party C)
that Party B values
Standard environmental control message
o HELP SAVE THE ENVIRONMENT. You can show your respect for nature
and help save the environment by reusing your towels during your stay.
Reciprocity-by-proxy
o WERE DOING OUR PART FOR THE ENVIRONMENT. CAN WE
COUNT ON YOU? Because we are committed to preserving the environment,
we have made a financial contribution to a nonprofit environmental protection
organization on behalf of the hotel and its guests. If you would like to help us
in recovering the expense, while conserving natural resources, please reuse
your towels during your stay.
Incentive-by-proxy
o PARTNER WITH US TO HELP SAVE THE ENVIRONMENT. In exchange
for your participation in this program, we at the hotel will donate a percentage
of the energy savings to a nonprofit environmental protection organization. The

environment deserves our combined efforts. You can join us by reusing your
towels during your stay.
Reciprocity by proxy is the most effective
o Increases sense of obligation and elicits norm of reciprocity but does not
change trust or perceived care for the environment
People feel less obligated to reciprocate the favors of others in an organizational
compared to a personal context. This is because they were less likely to think that the
peoples motives for helping were genuine and reflected their true character. In an
organizational context, people are more calculative and do other favors based on
usefulness in the future.
o 3 components:
o 1. Dispostional attribution about the favor 2. Desire to reciprocate 3.
Context dispositional attribution about the favor.
Negotiation: An ongoing activity of social decision making where two or more
interdependent parties with some interests in common engage in back-and-forth
communication aimed at reaching a settlement.
Building Blocks of Negotiation:
1. Parties: Negotiations takes place among parties
o Two-party vs. multiple-party ( opportunity for coalition building)
2. Issues: Matters over which parties disagree and seek to reach an agreement on
o Number of issues (single issue, such as price zero sum, distributive neg. vs.
multiple issues integrative, joint neg.)
3. Interests: What parties seek to advance in negotiation, why they take a position
o Positions (10% salary increase) vs. interests (I want credit for a job well
done)
Ultimatum game (flipping a coin)
o Rational solution was predicting that proposer should offer the smallest
possible share and responder would accept it
o 1st study (Gth, Schmittberger, Schwarze, 1983):
Average offer was 37% of the pie
o Average offers are in region of 40-50% of the pie
o The higher the stakes, the closer offers approach even split
Why are non-50-50 proposal rejected?
o Second person refuses proposal with chances of rejection increasing with a
decrease in amount offered
o 80/20 splits are rejected 70% of the time
o From an rational economic perspective, this makes no sense, or does it?
o Ingrained sense of fairness can override economic interests (but what are the
alternatives?)
o Whats more likely to get accepted? 55-45 or 51-49 split
Limbic Justice
o Act of immediate rejection seems to be mediated by the limbic system and is
not solely driven by cortical processes

o Benzodiazepine treatment decreased the rejection rate (from 37.6% to 19.0%)

concomitantly with a diminished amygdala response to unfair proposals, and
this in spite of an unchanged feeling of unfairness
o They did not know what they were doing and they did not understand the
concept of fair. It shows how deeply ingrained our concept of fairness really is.
Back to Ultimatum (round 2)
o How does the power shift between round 1 and round 2? Why?
From first person to second person
Second person may be able to push beyond $35-$35 split (round 2
means that round 1 was unsuccessful force to ask for more than
equal split)
Research: Over 80% of initial rejections are followed by a
disadvantageous counterproposal (e.g., $75-$25 is countered by $20$20 proposal when dividing $40)
o Fairness can be a very strong force? Which results is stronger force: Over- or
undercompensation?
Take-Aways
o Cooperation vs. competition: A matter of choice rather than a given
o Importance of considering the other sides perspective
o Importance of relationships/reputation ( second game)
o Economics vs. emotions (letting price bulldoze other interests)
People do not always make rational decisions
Sense of fairness is often very important and overrides economic
interests
Blue Buggy
o 15-20% reach a settlement that is economically irrational for one of the parties
o Importance of resistance points, aspiration levels, & BATNAs
o Buyer may pay more than capable because of
High levels of commitment to product (eBay)
Selective consideration of information
o Seller may accept less than best alternative because of
Relational considerations
Susceptibility to feelings of sympathy or emotional appeals
Aversion to risk inherent in holding out for future offers
How did you feel when you were unable to reach an agreement ?
o Often, people have agreement bias: Belief that if an impasse is reached then
negotiations failed
o BUT, impasse is often rational choice (if there is a better alternative for at least
one party, agreement is irrational)
o 15-20% of persons identify creative routes to a settlement that points out some
of the limiting assumptions being brought to the table
Power In Negotiations
o Sources of power
Formal vs. informal

BATNA (Best Alternative To a Negotiated Agreement)

What are you going to do if you do not reach agreement?
Determined by available alternatives
Defines most you will pay / least you will accept
Key source of power: Ability to walk away
Improve your BATNA better negotiation
Should you reveal your BATNA?
o Power is important, but it is how power is mobilized to shape perceptions and
expectation that matters ( beware harm to reputation)
o
Lecture 7: Negotiations
Guidelines:
Importance of considering other sides perspective
Importance of relationships/reputation
Economics vs. emotions (dont let price bulldoze other interests)
Determine the importance of outcome for you
Know your BATNA (and that of the other party) ( sets bottom line in defensible
way, more effective)

Integrative Negotiation
Why dont we see more integrative negotiation? Because it requires the
following conditions:
o Parties who are open with information and candid about their concerns
o Sensitivity to the others needs
o Ability to trust one another
o Willingness to maintain flexible
Conditions are often not met in organizations
Negotiators dilemma
Guidelines
Build trust and think of relationship
Ask diagnostic questions
Share important information
Unbundle the issues
Make package deals, not single-issue offers
Capitalize on differences in needs/desires
Dont forget to claim value once its created
Six Habits of Merely Effective Negotiators (R)
In any negotiation, each side ultimately must choose between accepting a deal or
taking its best no deal option that is, the course of action it would take if the deal
were not possible
Mistake 1: neglecting the other sides problem
o You cant negotiate effectively unless you understand your own interests and
your own no-deal options
o Since the other side will say yes for its reasons, not yours, agreement requires
understanding and addressing your counterparts problem as a means to
solving your own
o If you want to change someones mind, you should first learn where that
persons mind is
Mistake 2: letting price bulldoze other interests
o Negotiators who pay attention exclusively to price turn potentially cooperative
deals into adversarial ones. Use hard bargaining tactics that often leave
potential joint gains unrealized. Bc while the price is an important factor in
most deals, its rarely the only one. Most deals are 50% emotion and 50%
economics.
o Most turn down proposals that dont let them share in at least 35-40% of the
bounty, this is irrational on a pure price basis, but studies show that when a
split feels too unequal to people, they reject the spoils as unfair, are offended
by the process, and perhaps try to teach the greedy person a lesson
o Need to value the relationship, the social contract, the process, the interests of
the full set of players

Mistake 3: letting positions drive out interests

o 3 elements at play: (1) issues are on the table for agreement (2) positions are
one partys stands on the issues (3) interests are underlying concerns that
would be affected by the resolution.
o Despite clear advantages of reconciling deeper interests, people have a built in
bias toward focusing on their own positions
Mistake 4: searching too hard for common ground
o Typically were advised to find win win agreements by searching for common
ground but many of the most frequently overlooked sources of value in
negotiation arise from differences among parties
Mistake 5: neglecting BATNAss
o The better your batna appears both to you and to the other party, the more
credible your threat to walk away becomes, and the more it can serve as
leverage to improve the deal
o Need to assess your own batna, but also think carefully about the other sides
Mistake 6: failing to correct for skewed vision
o Cant solve a negotiation problem correctly without a firm understanding of
both sides interests, batnas, valuations, likely actions, etc.
Self serving role ais people tend unconsciously to interpret info
pertaining to their own side in a strongly self serving way
Partsan perceptions were bad at assessing the other sides critical
information

Politics and Power (textbook)

*people who have power deny it, people who want it try not to look like theyre seeking it,
those who are good at getting it are secretive about how they do it
power: refers to a capacity that A has to influence the behavior of B so B acts in
accordance with As wishes
dependency: the greater Bs dependence on A, the greater As power in the
relationship. Based on alternatives that B perceives, and the importance B places on
the alternative controls
power vs. leadership
o power does not require goal compatibility, merely dependence
o leadership requires some congruence between the goals of the leader and those
being led
o leadership focuses on the downward influence on followers, minimizes the
importance of lateral and upward influence patterns power does not.
o Leadership research emphasizes style
Bases of power
o Formal power: based on an individuals position in an organization. Can come from
ability to coerce or reward or from formal authority
o coercive power: depends on fear of the negative results from failing to comply.
Rests on the application or the threat of application of physical sanctions such as the
infliction of pain

o reward power: opposite of coercive. People comply bc it produces positive

benefits; someone who can distribute rewards others views as valuable will have
power over them can be financial like bonuses or nonfinancial like recognition
o legitimate power: most common in formal groups/organizations, it represents the
formal authority to control and use organizational resources based on structural
position in the organization
broader than the power to coerce or reward. Includes members acceptance of the
authority position
o personal power: comes from an individuals unique characteristics
expert power: influence wielded as a result of expertise, special skill or knowledge
referent power: based on identification w a person who has desirable resources or
personal traits
power tactics
o legitimacy: relying on authority position or saying a request accords w
organizational policies or rules
o rational persuasion: presenting logical arguments and factual evidence to
demonstrate a request is reasonable
o inspirational appeals: developing emotional commitment by appealing to a targets
values, needs, hopes and aspirations
o consultation: increasing the targets support by involving him in deciding how you
will accomplish your plan
o exchange: rewarding the target w benefits or favors in exchange for following a
request
o personal appeals: asking for compliance based on friendship or loyalty
o ingratiation: using flattery, praise or friendly behavior prior to making a request
o pressure: using warnings, repeated demands and threats
o coalitions: enlisting the aid or support of others to persuade the target to agree
o some are more effective than others
rational persuasion, inspirational appeals and consultation tend to be most effective,
o political skill: ability to influence others to enhance their own objects
politics: when employees in organizations convert their power into action
o organizational politics: focus on the use of power to affect decision making in an
organization or on self serving and organizationally unsanctioned behaviors
o political behavior: (in organizations) consists of activities that are not required as
part of an individuals formal role but that influence or attempt to influence, the
distribution of advantages and disadvantages within the organization
o legitimate political behavior: refers to normal every day politics (i.e. complaining
to supervisor, bypassing chain of command, etc.)
o illegitimate political behavior: violates the implied rules of the game
politicking: use whatever influence they can to taint the facts to support their goals and
interests
o employees who are high self monitors,
o The high self monitor is more sensitive to social cues, exhibits higher levels of social
conformity and is more likely to be skilled in political behavior than the low self
monitor

o Organizational factors
o So many employees w different traits, yet extent of political behavior varies
widely
o Certain situations and cultures promote politics specifically when an
organizations resources are declining, when the existing pattern of resources is
changing and when there is opportunity for promotions, politicking more likely
to surface
o Response to organizational politics
Organizational politics may threaten employees
Decreased job satisfaction
Increased anxiety and stress due to the perception that by not engaging in
politics, a person may be losing ground to others who are active politickers
Increased turnover
Reduced performance (self reported)
Qualifiers if understand decision making processes, increased performance. But
when understanding is low, likely o see politics as a threat
Defensive behaviors: reactive and protective behaviors to avoid action, blame, or
change how many employees respond when see politics as a threat
Impression management: process by which individuals attempt to control the impression of
others form of them
High self monitors are concerned w this theyre good at reading situations and
molding their appearances and behavior to fit each situation
IM Techniques:
Conformity: agreeing w someone elses opinion to gain his or her approval
(ingratiation)
Favors: doing something nice for someone to gain their approval (ingratiation)
Excuses: explanations of a predicament-creating event aimed at minimizing the
apparent severity of the predicament (defensive)
Apologies: admitting responsibility for undesirable event and simultaneously
seeking to get a pardon for the action (defensive)
Self promotion: highlighting best qualities, downplaying deficits, calling attention
to ones achievement (self focused)
Enhancement: claiming that something you did is more valuable than most other
members of the organization would think (self focused)
Flattery: complimenting others about their virtues in an effort to make oneself
appear perceive and likeable (assertive)
Exemplification: doing more than you need to in an effort to show how dedicated
and how hard you are (assertive)