The Changing Environment of Organizations

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Organizational
Behavior, 14e
Chapter 2
The Changing Environment
of Organizations
Griffin/Phillips, Organizational
Behavior,
14th14th
Edition.
© 2024
Cengage
Learning,
Inc. All Rights
May not beMay
scanned,
copied
or duplicated,
or
Griffin/Phillips,
Organizational
Behavior,
Edition.
© 2024
Cengage
Learning,
Inc. AllReserved.
Rights Reserved.
not be
scanned,
copied or
posted to a publicly
accessible
website,
in whole or
in part. in whole or in part.
duplicated,
or posted
to a publicly
accessible
website,
1
Learning Outcomes
After studying this chapter, you should be able to:
1. Describe the nature of diversity in organizations and discuss the different
types of diversity and barriers to inclusion that exist in the workplace.
2. Discuss the emergence of globalization and cross-cultural differences
and similarities.
3. Discuss the changing nature of technology and its impact on business.
4. Describe emerging perspectives on ethics and corporate governance.
5. Discuss the key issues in new employment relationships.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
2
Figure 2.1
The Changing
Environment of Business
The changing environment of
business presents both
opportunities and challenges for
managers today. Five important
environmental forces are
globalization, diversity, technology,
ethics and corporate governance,
and new employment relationships.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
3
2-1
Diversity, Equity, and Inclusion
in Business
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
4
Types of Diversity
(1 of 2)
• Diversity – the variety of observable and unobservable similarities and
differences among people
– Surface-level diversity – observable differences in people, including race,
age, ethnicity, physical abilities, physical characteristics, and gender
– Deep-level diversity – individual differences that cannot be seen directly,
including goals, values, personalities, decision-making styles, knowledge,
skills, abilities, and attitudes
– Intersectionality – simultaneous membership in more than one
demographic category
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
5
Types of Diversity
(2 of 2)
– Separation diversity – differences in position or opinion among group
members reflecting disagreement or opposition—dissimilarity in an attitude
or value, for example, especially with regard to group goals or processes
– Variety diversity – differences in a certain type or category, including
group members’ expertise, knowledge, or functional background
– Disparity diversity – differences in the concentration of valuable social
assets or resources—dissimilarity in rank, pay, decision-making authority,
or status
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
6
Trends in Diversity
• By 2060, the total population is forecast to grow from 282.1 million in
2000 to 404 million.
• Changes in the workforce and the population in general are toward
greater diversity.
• Talent shortages are forecast to rise globally.
• Population is aging; age diversity in workforce is increasing.
– May result in younger managers supervising older workers
– Reverse mentoring: pairing a junior employee with a senior employee
to transfer technical/computer skills from the junior employee to the
senior one
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
7
Figure 2.2
Percent of Age
Groups Employed
in 2021
The U.S. labor force includes
people from a wide array of
age groups. As this graph
illustrates, almost 62% of
those aged 55–64 are still
working, while 18% of those
aged 65 or older continue to
work.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
8
Generational Differences

Today’s workforce is characterized in five generational groups:
– silent generation (1928–1945)
– baby boomers (1946–1964)
– Generation X (1965–1980)
– Generation Y or Millennials (1981–1996)
– Generation Z (1997–2012)

Older workers may have better job performance but need mentoring
to adopt new technology.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
9
The Business Case for Diversity

Diversity fosters greater creativity and innovation.

Organizational performance increases when employees have a positive
attitude toward diversity.

Culturally diverse teams make better decisions over time than
homogeneous ones.

Women in top management results in more innovation.

Title VII of the Civil Rights Act of 1964 prohibits employment
discrimination based on race, color, religion, sex, or national origin.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
10
Table 2.2 Barriers to Inclusion
The “like me” bias
Stereotypes
Prejudice
Perceived threat of
loss
Ethnocentrism
Unequal access to
organizational
networks
People prefer to associate with others they perceive to be like
themselves.
A belief about an individual or a group based on the idea that
everyone in a particular group will behave the same way or have the
same characteristics.
Outright bigotry or intolerance for other groups.
If some employees perceive a direct threat to their own career
opportunities, they may feel that they need to protect their own
prospects by impeding diversity efforts.
The belief that one’s own language, native country, and cultural rules
and norms are superior to all others.
Women and minorities are often excluded from organizational
networks, which can be important to job performance, mentoring
opportunities, and being seen as a candidate for promotion.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
11
Managing Diversity, Equity, and Inclusion

Top management support for diversity and for diversity initiatives

Reciprocal mentoring: matches senior employees with diverse junior
employees to allow both individuals to learn more about a different
group

Older adults may benefit from self-paced learning environments and
confidence-boosting interventions.

It is not realistic to claim or to pursue an “I’m totally unbiased” stance
with regard to diversity.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
12
Knowledge Check 2.1
Differences in the concentration of valuable social assets or resources,
such as dissimilarity in rank, pay, decision-making authority, or status, is
known as
a. intersectionality.
b. separation diversity.
c. disparity diversity.
d. surface-level diversity.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
13
2-2
Globalization and Business
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
14
Trends in Globalization

Globalization – the internationalization of business activities and the
shift toward an integrated global economy

Factors increasing globalization:
– Advances in communication and transportation
– Businesses have expanded internationally to increase their markets
– Control of labor, distribution and distribution costs
– Increased international competition
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
15
Cultural Competence
• Culture
− The set of shared values, often taken for granted, that help people in a
group, organization, or society understand which actions are
considered acceptable and which are deemed unacceptable
• Cultural competence – the ability to interact effectively with people of
different cultures
− Awareness of our worldview and reactions to people who are different
− Our attitude toward cultural differences
− Knowledge of different worldviews and cultural practices
− Cross-cultural skills
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
16
Cross-Cultural Differences and Similarities
• General observations:
− Cultural and national boundaries may not coincide.
− Behavior in organizational settings varies across cultures.
− Culture is one major cause of this variation.
− Organizations and the way they are structured appear to be growing
increasingly similar.
− The same individual behaves differently in different cultural settings.
− Cultural diversity can be an important source of synergy in enhancing
organizational effectiveness.
• Attitudes and behaviors differ significantly because of values and beliefs that
characterize different countries (Geert Hofstede).
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
17
Hofstede’s Dimensions of Culture
Individualism
Exists to the extent that people in a culture define themselves primarily as
individuals rather than as part of one or more groups or organizations
Collectivism
Characterized by tight social frameworks in which people tend to base their
identities on the group or organization to which they belong
Power distance
The extent to which people accept as normal an unequal distribution of power
Uncertainty
avoidance
The extent to which people feel threatened by unknown situations and prefer to
be in clear and unambiguous situations (also called the preference for stability)
Masculinity
The extent to which the dominant values in a society emphasize aggressiveness
and acquisition of money/possessions as opposed to concern for people and
relationships (also called assertiveness or materialism)
Long-term
values
Include focusing on the future, working on projects that have a distant payoff,
persistence, and thrift
Short-term
values
More oriented toward the past and the present and include respect for traditions
and social obligations
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
18
Table 2.3 Work-Related Differences in 10 Countries
Individualism/
Collectivism
Power
Distance
Uncertainty
Avoidance
Masculinity
Long-Term
Orientation
CANADA
H
M
M
M
L
GERMANY
M
M
M
M
M
ISRAEL
M
L
M
M
(no data)
ITALY
H
M
M
H
(no data)
JAPAN
M
M
H
H
H
MEXICO
H
H
H
M
(no data)
PAKISTAN
L
M
M
M
L
SWEDEN
H
M
L
L
M
UNITED STATES
H
M
M
M
L
VENEZUELA
L
H
M
H
(no data)
Country
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
19
Global Perspective
• A global perspective is distinguished by:
− A willingness to be open to and learn from the alternative systems and
meanings of other people and cultures
− A capacity to avoid assuming that people from everywhere are the
same
• Given globalization trends and the multicultural nature of the U.S.
workforce, managers increasingly need a global perspective and a
supportive set of skills and knowledge to be most effective.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
20
Discussion Activity 1
As a class, pick 5–10 countries (not found in Table 2.3) from various parts
of the world. Then rank them as the countries in Table 2.3 have been
ranked. Consider these questions:
How familiar are you with people from this country?
Given your level of cultural competence, would you anticipate difficulties
interacting with individuals from these countries? Why or why not?
How might you improve your cross-cultural skills?
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
21
Discussion Activity 1 Debrief
How familiar are you with people from this country?
• Answers will vary, depending on the countries chosen and the diversity of the
members of the class.
Given your level of cultural competence, would you anticipate difficulties
interacting with individuals from these countries? Why or why not?
• Because this is a personal question, share only to the level with which you are
comfortable, keeping in mind experiences may vary considerably.
How might you improve your cross-cultural skills?
• The first step is always awareness, both of ourselves and of those from other
cultures. Increasing awareness comes from learning about other cultures
through books, media, and other people.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
22
2-3
Technology and Business
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
23
Manufacturing and Service Technologies
• Technology – refers to the methods used to create products, including
both physical goods and intangible services
• Manufacturing – a form of business that combines and transforms
resources into tangible outcomes that are then sold to others
− Once the dominant technology in the United States
• Service organization – one that transforms resources into an intangible
output and creates time or place utility for its customers
− Experiencing tremendous growth even as manufacturing sector
declines
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posted to a publicly accessible website, in whole or in part.
24
Technology and Competition

Maintaining a leadership position: technology is the basis of competition
for some firms

Coping with decreasing cycle times (the time it takes a firm to
accomplish some recurring activity or function, e.g., making deliveries,
processing credit payments)

Information technology and social media
− Advantages: leaner and more flexible organizations, increased
collaboration, improved management processes/systems
− Disadvantages: less personal communication, less “down time,” an
increased sense of communication and decision-making urgency
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
25
Polling Activity 1
When you consider social media and how businesses can and do use it, do
you think it is:
a. Essential
b. Mostly advantageous
c. Mostly problematic
d. Somewhere in between
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posted to a publicly accessible website, in whole or in part.
26
2-4
Ethics and Corporate Governance
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
27
Framing Ethical Issues

Ethics – a person’s beliefs regarding what is right or wrong in a given
situation
• Framing ethical issues relates to:
– Treatment of employees (hiring, firing, wages, working conditions,
respect, privacy)
– How employees treat the organization (conflicts of interest, secrecy,
confidentiality, personal internet use, unacceptable absenteeism)
– Treatment of economic agents (customers, competitors,
stockholders, suppliers, dealers, unions)
– Variations in ethical and legal business practices across countries
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posted to a publicly accessible website, in whole or in part.
28
Figure 2.3
Managerial Ethics
Managers face a variety of
ethical situations. In most cases,
these situations involve how the
organization treats its
employees, how employees
treat the organization, and how
employees and organizations
treat other economic agents.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
29
Ethical Issues in Corporate Governance

Corporate governance – refers to the oversight of a public corporation
by its board of directors
– Proper management of the business in the best interests of
shareholders and other stakeholders
– Independence of the board from the business

Ethical issues and information technology
– Individual rights to privacy and the potential abuse of information
technology by companies
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
30
Corporate Social Responsibility

Corporate social responsibility – businesses living and working together
for the common good and valuing human dignity
– Can help a firm attract the best talent
– Customers increasingly favor companies that do the right thing

To have lasting effects, social responsibility efforts should be integrated
into the culture of the organization.

The International Organization for Standardization (ISO) has created a
variety of standards that help organizations gain international
acceptance of their practices and outcomes.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
31
Polling Activity 2
You are a manager in a high-tech manufacturing company. You just found
out that one of your employees has contacted the Federal Trade
Commission about another employee who has been sharing insider
information about the company’s newest innovation with an investment
firm. What will you do now?
a. Support the whistle-blower’s actions in any way you can.
b. Contact the company’s HR department to see about protecting the
whistle-blower’s identity.
c. Call your subordinates together to review with them your company’s
code of ethics.
d. Say nothing to anyone about what you have learned.
a. d.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
32
2-5
New Employment Relationships
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
33
The Management of Knowledge Workers

Some employees add value in an organization simply because of what
they know.
− Examples: computer scientists, physical scientists, engineers, product
designers, video game developers

Unique working arrangements and performance motivation requirements
− Autonomous work, strong identification with professional standard,
and continual updating of skills
− Specifically (individually) tailored compensation packages

Growth opportunities, profit sharing, less bureaucracy
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
34
Outsourcing

Outsourcing – the practice of hiring other firms to do work previously
performed by the organization itself; when this work is moved overseas,
it is often called offshoring

Advantages of outsourcing:
– Helps firms to focus on core activities
– Lowers labor costs through exportation of work

Disadvantages of outsourcing:
– Disaffected employees: out-of-job workers are used to train the newly
hired foreign replacements
– Reduction of domestic job opportunities
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posted to a publicly accessible website, in whole or in part.
35
Offshoring and Contingency Workers



Offshoring – outsourcing to workers in another country
Advantages of offshoring include lower labor costs.
Disadvantages of offshoring:
– Results in loss of jobs in home country
– Controversial issue

Contingency worker – a person who works for an organization on
something other than a permanent or full-time basis
− Includes independent contractors, on-call workers, temporary
employees (usually hired through outside agencies), and contract
and leased employees
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posted to a publicly accessible website, in whole or in part.
36
Worker Mobility

Working remotely is not a new concept.

More prevalent as a result of the COVID-19 pandemic

The so-called “great resignation” began in early 2021, with record
numbers of American workers quitting their jobs when workers:
− Realized, as a result of the pandemic, they could survive on lower
wages
− Wanted flexibility not provided by their previous jobs
− Experienced a change in priorities and wanted a better work–life
balance
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posted to a publicly accessible website, in whole or in part.
37
The Changing Nature of the Psychological
Contract

Psychological contract – a person’s set of expectations regarding what
he or she will contribute to an organization and what the organization, in
return, will provide to the individual
– Individuals contribute effort, skills, ability, time, loyalty.
– Organizations provide inducements in the form of tangible/intangible
rewards.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
38
Figure 2.4 The Psychological Contract
Psychological contracts
govern the basic
relationship between
people and organizations.
Individuals contribute such
things as effort and loyalty.
In turn, organizations offer
such inducements as pay
and job security.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
39
Discussion Activity 2
In what ways do you believe the experience of workers and employers
during the COVID-19 pandemic changed the psychological contract
between the two groups?
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
40
Discussion Activity 2 Debrief
In what ways do you believe the experience of workers and employers
during the COVID-19 pandemic changed the psychological contract
between the two groups?
• Answers will vary, of course, depending on whether one considers the question
from a worker perspective or an employer perspective. Overall, however, both
sides are familiar with adjustments that were necessary, especially in the
beginning, much of it because of the uncertainty. So many smaller businesses
ceased operating. The costs of taking necessary precautions overwhelmed
other businesses. Some flourished (both businesses and employees); others
struggled with shortages of labor and supplies. Many perspectives changed—
consider the great resignation. Workers want greater compensation now, and
not always just in monetary terms.
Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
41
Self-Assessment
• How would you describe the level of diversity in the environment in which
you grew up? In the environment you find yourself now? In your ideal
environment?
• How has technology changed during your lifetime? In what ways do you
anticipate technology will change in the next 5–10 years?
• What, if any, types of ethical dilemmas have you faced in recent months?
In what ways is ethical behavior important to you as an individual?
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posted to a publicly accessible website, in whole or in part.
42
Summary
Click the link to review the outcomes for this presentation.
Link to Learning Outcomes
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