you may write a 2-3 page paper outlining examples of organizational behavior concepts enacted in class. In this class, the teacher simulated the whole class into a virtual company, assigned differe


Textbooks

Diane Hacker’s Rules for Writers (9th Ed)




1-1What is Organizational Behavior?

What exactly is meant by the term “organizational behavior”? And why should it be studied? Answers to these two fundamental questions will both help establish our foundation for discussion and analysis and help you better appreciate the rationale as to how and why understanding the field can be of value to you in the future.

1-1aThe Meaning of Organizational Behavior

Organizational behavior (OB) is the study of human behavior in organizational settings, of the interface between human behavior and the organization, and of the organization itself. Although we can focus on any one of these three areas, we must also remember that all three are ultimately necessary for a comprehensive understanding of organizational behavior. For example, we can study individual behavior without explicitly considering the organization. But because the organization influences and is influenced by the individual, we cannot fully understand the individual's behavior without learning something about the organization. Similarly, we can study organizations without focusing explicitly on the people within them. But again, we are looking at only a portion of the puzzle. Eventually we must consider the other pieces, as well as the whole. Essentially, then, OB helps explain and predict how people and groups interpret events, react, and behave in organizations and describes the role of organizational systems, structures, and process in shaping behavior.

Managers at businesses like The Home Depot need to understand individual employee behavior, characteristics of the organization itself, and the interface between individual behavior and the organization.


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Figure 1.1 illustrates this view of organizational behavior. It shows the linkages among human behavior in organizational settings, the individual–organization interface, the organization itself, and the environment surrounding the organization. Each individual brings to an organization a unique set of personal characteristics and a unique personal background and set of experiences from other organizations. Therefore, in considering the people who work in their organizations, managers must look at the unique perspective each individual brings to the work setting. For example, suppose managers at The Home Depot review data showing that employee turnover within the firm is gradually but consistently increasing. Further suppose that they hire a consultant to help them better understand the problem. As a starting point, the consultant might analyze the types of people the company usually hires. The goal would be to learn as much as possible about the nature of the company's workforce as individuals—their expectations, their personal goals, and so forth.

Figure 1.1The Nature of Organizational Behavior

The field of organizational behavior attempts to understand human behavior in organizational settings, the organization itself, and the individual–organization interface. As illustrated here, these areas are highly interrelated. Thus, although it is possible to focus on only one of these areas at a time, a complete understanding of organizational behavior requires knowledge of all three areas.


But individuals do not work in isolation. They come in contact with other people and with the organization in a variety of ways. Points of contact include managers, coworkers, the formal policies and procedures of the organization, and various changes implemented by the organization. In addition, over time, individuals change, as a function of personal experiences and maturity as well as through work experiences and organizational developments. The organization, in turn, is affected by the presence and eventual absence of the individual. Clearly, then, managers must also consider how the individual and the organization interact. Thus, the consultant studying turnover at The Home Depot might next look at the orientation procedures and initial training for newcomers to the organization. The goal of this phase of the study would be to understand some of the dynamics of how incoming individuals are introduced to and interact with the broader organizational context.

An organization, of course, exists before a particular person joins it and continues to exist after he or she leaves. Thus, the organization itself represents a crucial third perspective from which to view organizational behavior. For instance, the consultant studying turnover would also need to study the structure and culture of The Home Depot. An understanding of factors such as a firm's performance evaluation and reward systems, its decision-making and communication patterns, and the structure of the firm itself can provide added insight into why some people choose to leave a company and others elect to stay.

Clearly, then, the field of organizational behavior is both exciting and complex. Myriad variables and concepts accompany the interactions just described, and together these factors greatly complicate the manager's ability to understand, appreciate, and manage others in the organization. They also provide unique and important opportunities to enhance personal and organizational effectiveness.

1-1bHow Organizational Behavior Impacts Personal Success

You may be wondering about the relevance of OB to your current major or career path. You might be thinking, “I don't know any organizational behaviorists. Why is this topic important?” We field this question all the time from people unfamiliar with OB. The core of OB is being effective at work. Understanding how people behave in organizations and why they do what they do is critical to working effectively with and managing others. OB gives everyone the knowledge and tools they need to be effective at any organizational level. OB is an important topic for anyone who works or who will eventually work in an organization, which is the case for most people. Moreover, OB is actually important to us as individuals from numerous perspectives.

In our relationships with organizations, we may adopt any one of several roles or identities. For example, we can be consumers, employees, suppliers, competitors, owners, or investors. Since most readers of this book are either present or future managers, we will adopt a managerial perspective throughout our discussion. The study of organizational behavior can greatly clarify the factors that affect how managers manage. Hence, the field attempts to describe the complex human context of organizations and to define the opportunities, problems, challenges, and issues associated with that realm.

Whenever managers are surveyed ten to fifteen years out of school and asked to identify the most important classes they ever took, OB is usually one of them. This is not because it made them technically better in their area of specialty, but because it made them more effective employees and better managers. As one expert has put it, “It is puzzling that we seek expert advice on our golf game but avoid professional advice on how we can deal with other people.” Using your knowledge of OB can help you to succeed faster in any organization or career.

We will discuss diversity and the importance of flexibly applying OB concepts to different people throughout the book. This chapter's Understand Yourself feature gives you the opportunity to better understand your global mindset, or set of individual attributes that enable you to influence individuals, groups, and organizations from diverse socio/cultural/institutional systems. Global mindset combines cultural intelligence and a global business orientation. Most chief executives of large multinational organizations believe that having a strong cadre of globally minded leaders would strengthen their organization's competitiveness.

Understand Yourself

Global Mindset

A global mindset reflects your ability to influence people, groups, and organizations from a variety of backgrounds and cultures. Multinational companies' ability to create globally integrated systems depends on their ability to get employees, managers, and executives to understand and adapt to the realities of a globalized economy. The ability to integrate talent from many parts of the world faster and more effectively than other companies is a source of a firm's competitive advantage as well as your own personal competitive advantage.

Please use the following scale in responding to the ten questions below. When you are finished, follow the scoring instructions at the bottom to calculate your score. Then read more about what your score means, and how you can improve your global mindset.


  1. In interacting with others, I assign equal status to people regardless of their national origin. 

  2. I consider myself as equally open to ideas from other countries and cultures as I am to ideas from my own country and culture of origin. 

  3. Finding myself in a new cultural setting is exciting. 

  4. I see the world as one big marketplace. 

  5. When I interact with people from other cultures, it is important to me to understand them as individuals. 

  6. I regard my values to be a hybrid of values acquired from multiple cultures as opposed to just one culture. 

  7. I get very curious when I meet someone from another country. 

  8. I enjoy trying food from other countries. 

  9. In this interlinked world of ours, national boundaries are meaningless. 

  10. I believe I can live a fulfilling life in another culture. 

Scoring: Add up your responses to identify your global mindset score.

Interpretation: Because experiences influence global mindset in a positive or negative manner, you can take steps to improve your global mindset. Based on your score, you might consider some of the personal development activities identified below, or you might come up with others.

If your score is between 10 and 20, you have a relatively low global mindset. Formal training/educational programs, self-study courses, university courses, or in-company seminars or management development programs can help you to increase your global mindset.

If your score is between 21 and 35, you have a moderate global mindset. You do not exhibit extremely high parochialism, but at the same time you are not as open to people from other cultures as you could be. In addition to the self-development activities listed above, you might consider joining some culturally diverse student organizations and making a point of befriending some people from other cultures to gain more experience and become more comfortable with people from other cultures.

If your score is between 36 and 50, you have a high global mindset. This means that you are open to meeting people from a variety of cultures, and are comfortable with global diversity. This does not mean you cannot improve further! Joining international student organizations, working with international volunteer organizations, and befriending people from a variety of cultures will further develop your global mindset.

Source: Adapted from Gupta, A.K., & Govindarajan, V. (2002). Cultivating a global mindset. Academy of Management Executive, 16(1), 116–126; Kefalas, A. G., & Neuland, E. W. (1997). Global mindsets: an exploratory study. Paper presented at the Annual Conference of the Academy of International Business, Moneterrey, Mexico, 4–7 October; Nummela, N., Saarenketo, S., & Puumalainen, K. (2004). Global mindset—a prerequisite for successful internationalisation? Canadian Journal of Administrative Sciences, 21(1), 51–64.

Because global mindset is learned, experiences can influence it in a positive or negative manner. Every year, the financial services giant HSBC sends promising new hires and managers into long-term business experiences abroad to build a cohort of international officers. Locations include western countries as well as Saudi Arabia, Indonesia, and Mexico. To make a career at HSBC, managers must perform these international missions. This enables HSBC to develop a continuous supply of globally minded managers capable of cross-border learning. Similar approaches are pursued by other multinationals to enable them to transfer expertise and know-how across geographical, cultural, and political divides.

HSBC, an global financial services business, routinely sends its most promising young managers on international assignments. The purpose of this approach is to build a cohort of future top managers and leaders who have extensive international experience.

1-1cHow Organizational Behavior Impacts Organizational Success

Organizations as a whole also benefit from OB. Imagine the difference between a company with motivated, engaged employees with clear goals aligned with the business strategy and one with unhappy employees, a lot of conflict, weak leadership, and a lack of direction. Effectively implementing OB concepts and models is what creates effective and successful companies. OB is clearly important to organizations. By appropriately applying OB knowledge about individuals, groups, and the effect of organizational structure on worker behavior, the conditions can be created that make organizations most effective.

OB also helps companies perform well. A mounting body of evidence shows that an emphasis on the softer side of business positively influences bottom line results. By listening to employees, recognizing their work, building trust, and behaving ethically, managers have boosted such performance measures as operating earnings, return on investment, and stock price. In addition to financial performance and job satisfaction, OB also influences absenteeism and turnover. Reducing absenteeism and turnover can be worth millions of dollars to organizations through increased productivity and customer service and decreased staffing costs. This chapter's Case Study highlights The J.M. Smucker Company's attention to OB principles including ethics, organizational culture, and values.

Case Study

The J.M. Smucker Company

From its founding in 1897, when Jerome Monroe Smucker sold apple butter from the back of a horse-drawn wagon, the J.M. Smucker Company has recognized that acting ethically is a key element of its success. The Orrville, Ohio, manufacturer wants to ensure that its signature comfort foods—fruit spreads, frostings, juices, and beverages—remain American staples, and that its daily operations are guided by honesty, respect, trust, responsibility, and fairness.

Ensuring that the company meets the highest ethical standards starts with hiring people who already have a strong personal value system. To do this, Smucker steeps job candidates in its ethical standards and refers frequently to how company values relate to the particular position a job candidate is seeking. The company also engages in rigorous reference checks. Once hired, the ethics emphasis intensifies. Each new hire attends a daylong training seminar that includes presentations by company officials, videos, and breakout sessions on moral awareness, moral courage, and values.

The discussions go much deeper than a superficial review of how to be a good person. One session concentrates on three ways to make a decision when faced with a dilemma. One option is seeking to do the greatest good for the greatest number of people. The second is a rules-based approach in which the decision will set a standard that everyone else follows. The final alternative is to use the Golden Rule: “treat others as you would like to be treated.”

The sessions also explore the complexity of ethics. Employees are rarely in a clear-cut situation where right and wrong are obvious. Ethical decisions often involve a nuanced balance between right and right. For example, the choice an employee has to make may involve questions related to the pulls between truth and loyalty, the individual versus the community, and short-term versus long-term approaches to business decisions. Smucker communicates that it wants its employees to act with truth over loyalty, community over the individual, and long-term over short-term company interests. All employees go through the ethics program again every three to five years, and sign a detailed nine-page ethics statement annually to ensure that they truly understand the level of performance Smucker expects from them.

Smucker also strongly believes in environmental sustainability, including utilizing renewable energy, improving wastewater management, using sustainable raw materials, and reusing resources rather than consuming new ones. Smucker promotes social sustainability in the communities in which it operates, promoting initiatives and programs that support and enhance the quality of life. The J.M. Smucker Company has consistently appeared on Fortune Magazine's “100 Best Places to Work For” list, which it attributes in part to its strong culture.

Questions:
  1. Why would ethics be important to a company like J.M. Smucker? How can its focus on values and ethics improve its business performance?

  2. Appearing on “best places to work” lists can increase an employer's popularity, even among lower-qualified applicants. The increased volume of applicants can be costly and time-consuming. What do you feel are the benefits and drawbacks to being on this type of list? Do you think that it is generally beneficial to be publicly recognized as a good employer? Why or why not?

  3. Do J.M. Smucker's values and culture appeal to you as a potential employee? Why or why not?

Source: J.M. Smucker. (2014). J.M. Smucker 2014 Annual Report. Retrieved from http://static1.squarespace.com/static/53650b18e4b08e20f53d167b/t/539ee6cee4b06b36446ac3f1/1402922702613/Smucker%27s+2014+Annual+Report_embed.pdf; Smucker Gift Will Establish Business Leadership Institute (2012). The University of Akron, April 23. Available online: http://www.uakron.edu/im/online-newsroom/news_details.dot?newsId=d24e5be1-b6fc-431b-871c-164ada224a69&crumbTitle=Smucker%20gift%20will%20establish%20business%20leadership%20institute; Harrington, A. (2005). Institute for Global Ethics Expands Focus on Business Practices with Center for Corporate Ethics, CSRWire, January 27. Available online at: http://www.csrwire.com/News/3473.html; Schoeff, M. (2006). Workforce Management, March 13, p. 19; “Award-Winning Company,” smuckers.com. Available online at: http://www.smuckers.com/family_company/join_our_company/award_winning_company.aspx; “Sustainability,” smuckers.com. Available online at: http://www.smuckers.com/family_company/join_our_company/sustainability.aspx.

One central value of organizational behavior is that it isolates important aspects of the manager's job and offers specific perspectives on the human side of management: people as organizations, people as resources, and people as people. To further underscore the importance of organizational behavior to managers, we should consider this simple fact: Year in and year out, most of the firms on Fortune's list of the world's most admired companies have impeccable reputations for valuing and respecting the people who work for them. Similarly, as the use of technology steadily increases, virtual teams become more common. The success of virtual teams, in turn, often depends on the type of leadership exhibited by managers. Organizational behavior allows us to understand that as a leader of a virtual team, one must foster trust, encourage open dialogue, and clarify guidelines. Clearly, then, an understanding of organizational behavior can play a vital role in managerial work. To most effectively use the knowledge provided by this field, managers must thoroughly understand its various concepts, assumptions, and premises. To provide this foundation, we next tie organizational behavior even more explicitly to management and then turn to a more detailed examination of the manager's job itself.

1-2The Managerial Context of Organizational Behavior

Virtually all organizations have managers with titles such as chief financial officer, marketing manager, director of public relations, vice president for human resources, and plant manager. But probably no organization has a position called “organizational behavior manager.” The reason for this is simple: Organizational behavior is not a defined business function or area of responsibility similar to finance or marketing. Rather, an understanding of OB provides a set of insights and tools that all managers can use to carry out their jobs more effectively. The managerial context of OB can viewed from the perspective of basic management functions, critical management skills, and overall human resource management.

1-2aBasic Management Functions and Organizational Behavior

Managerial work is fraught with complexity and unpredictability and enriched with opportunity and excitement. However, in characterizing managerial work, most educators and other experts find it useful to conceptualize the activities performed by managers as reflecting one or more of four basic functions. These functions are generally referred to as planning, organizing, leading, and controlling. While these functions are often described in a sequential manner, in reality, of course, most managerial work involves all four functions simultaneously.

Similarly, organizations use many different resources in the pursuit of their goals and objectives. As with management functions, though, these resources can also generally be classified into four groups: human, financial, physical, and/or information resources. As illustrated in Figure 1.2, managers combine these resources through the four basic functions, with the ultimate purpose of efficiently and effectively attaining the goals of the organization. That is, the figure shows how managers apply the basic functions across resources to advance the organization toward its goals.

Figure 1.2Basic Managerial Functions

Managers engage in the four basic functions of planning, organizing, leading, and controlling. These functions are applied to human, financial, physical, and information resources with the ultimate purpose of efficiently and effectively attaining organizational goals.


Planning, the first managerial function, is the process of determining the organization's desired future position and deciding how best to get there. The planning process at Urban Outfitters, for example, includes studying and analyzing the environment, deciding on appropriate goals, outlining strategies for achieving those goals, and developing tactics to help execute the strategies. OB processes and characteristics pervade each of these activities. Perception, for instance, plays a major role in environmental scanning, and creativity and motivation influence how managers set goals, strategies, and tactics for their organization. Larger corporations such as Walmart and Starbucks usually rely on their top management teams to handle most planning activities. In smaller firms, the owner usually takes care of planning.

The second managerial function is organizing—the process of designing jobs, grouping jobs into manageable units, and establishing patterns of authority among jobs and groups of jobs. This process produces the basic structure, or framework, of the organization. For large organizations such as Apple and Toyota, that structure can be incredibly complex. The structure includes several hierarchical layers and spans myriad activities and areas of responsibility. Smaller firms can often function with a relatively simple and straightforward form of organization. As noted earlier, the processes and characteristics of the organization itself are a major theme of organizational behavior.

Leading, the third major managerial function, is the process of motivating members of the organization to work together toward the organization's goals. An Old Navy store manager, for example, must hire people, train them, and motivate them. Major components of leading include motivating employees, managing group dynamics, and the actual process of leadership itself. These are all closely related to major areas of organizational behavior. All managers, whether they work in a huge multinational corporation spanning dozens of countries or in a small neighborhood business serving a few square city blocks, must understand the importance of leading.

Leading is a major part of the jobs of most managers. This manager is presenting information to his team in an effort to lead them to perform at a higher level.


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The fourth managerial function, controlling, is the process of monitoring and correcting the actions of the organization and its people to keep them headed toward their goals. A manager at Best Buy has to control costs, inventory, and so on. Again, behavioral processes and characteristics are a key part of this function. Performance evaluation and reward systems, for example, both apply to control. Control is of vital importance to all businesses, but it may be especially critical to smaller ones. Target, for example, can withstand with relative ease a loss of several thousand dollars due to poor control, but an equivalent loss may be devastating to a small firm.

Critical Management Skills and Organizational Behavior

Another important element of managerial work is mastery of the skills necessary to carry out basic functions and fill fundamental roles. In general, most successful managers have a strong combination of technical, interpersonal, conceptual, and diagnostic skills.

Technical skills are skills necessary to accomplish specific tasks within the organization. Designing a new mobile game app for Rovio, the company that created Angry Birds, developing a new weight loss supplement for Advocare, or writing a press release for Halliburton about the firm's new drilling technologies all require technical skills. Hence, these skills are generally associated with the operations employed by the organization in its production processes. For example, the Chairman and CEO of Xerox Corporation, Ursula Burns, began her career with the company as a mechanical engineering intern. Other examples of managers with strong technical skills include Rex Tillerson (CEO of ExxonMobil, who began his career as a production engineer) and Andrew Taylor (former CEO of Enterprise Holdings, who began his career washing cars on Rent-A-Car lots when he was 16 years of age). The CEOs of the Big Four accounting firms also began their careers as accountants.

Technical skills are the skills needed to perform specific tasks. This retail manager is teaching a new sales clerk how to operate the store's payment system. He has to have the the technical skills needed for this task in order to teach others.


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Managers use interpersonal skills to communicate with, understand, and motivate individuals and groups. As we have noted, managers spend a large portion of their time interacting with others, so it is clearly important that they get along well with other people. For instance, Howard Schultz is the CEO of Starbucks. Schultz is able to relate to employees by demonstrating respect and dignity. Schultz remains committed to providing health benefits despite raising healthcare costs and has created educational opportunities for Starbucks partners to finish school. Schultz has been recognized for his passion and leadership. These qualities inspire others throughout the organization and motivate them to work hard to help Starbucks reach its goals.

Ursula Burns, Chairman and CEO of Xerox Corporation, started her career as a mechanical engineer. She subsequently moved into management and now leads a major corporation.


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Conceptual skills are the manager's ability to think in the abstract. A manager with strong conceptual skills is able to see the “big picture.” That is, she or he can see opportunity where others see roadblocks or problems. For example, after Steve Wozniak and Steve Jobs built a small computer of their own design in a garage, Wozniak essentially saw a new toy that could be tinkered with. Jobs, however, saw far more and convinced his partner that they should start a company to make and sell the computers. The result? Apple Computer. In subsequent years, Jobs also used his conceptual skills to identify the potential in digital media technologies, leading to the introduction of such products as the iPod, the iPhone, iTunes, and the iPad as well as his overseeing the creation of Pixar Animation Studios. When he died in 2011 Jobs was hailed as one of the most innovative managers of all time.

Most successful managers also bring diagnostic skills to the organization. Diagnostic skillsallow managers to better understand cause-and-effect relationships and to recognize the optimal solutions to problems. For instance, when Ed Whitacre was chairman and CEO of SBC Communications, he recognized that, though his firm was performing well in the consumer market, it lacked strong brand identification in the business environment. He first carefully identified and then implemented an action to remedy the firm's shortcoming—SBC would buy AT&T (for $16 billion), acquiring in the process the very name recognition that his company needed. After the acquisition was completed, the firm changed its corporate name from SBC to AT&T. And it was Whitacre's diagnostic skills that pulled it all together.Indeed, his legacy of strong diagnostic skills led to his being asked to lead the corporate turnaround at General Motors in 2009.


1-2cOrganizational Behavior and Human Resource Management

We noted earlier than OB is generally related to all areas of an organization. It is especially relevant, though, to human resource management. Human resource management (HRM) is the set of organizational activities directed at attracting, developing, and maintaining an effective workforce. More precisely, HR managers select new employees, develop rewards and incentives to motivate and retain employees, and create programs for training and developing employees. But how do they know which applicants to hire? And how do they know which rewards will be more motivating than others? The answers to these and related questions are generally drawn from the field of OB. For example, personality traits (covered in Chapter 3) are frequently used in selection decisions. Likewise, motivation theories (as discussed in Chapters 5 and 6) help managers understand how to most effectively reward and retain employees. This chapter's Improve Your Skills feature highlights some common job interview questions that you should be prepared to answer before interviewing for your next job. These questions and your answers to them all involve OB concepts.

Improve Your Skills

OB Related Job Interview Questions
  1. What do you think is the most important thing that a manager does?

  2. What was the most ethical decision you've had to make at work?

  3. Tell me about a conflict you've experienced at work and how you handled it.

  4. Tell me about a challenging team experience you have had and how you handled it.

  5. How would you manage an employee who misses performance goals?

  6. How would you describe your leadership style?

  7. How do you deal with stressful deadlines at work?

  8. Have you ever dealt with a difficult boss? If so, how did you manage the situation? If not, what would you do if you found yourself in this situation?

  9. What types of innovative problem-solving or decision-making techniques do you use at work?

  10. What type of organizational culture would be the best fit for you? Why?

Consider, for example, a recent announcement made by Walmart. In early 2015 the giant retailer began giving pay raises to 500,000 U.S. workers. At the same time, the company indicated that it was changing the methods it uses to hire and train new employees.Clearly, Walmart did not make the decision to raise its labor costs lightly. Instead, its managers expect that the higher wages and new HR practices will enable the company to better recruit new employees and retain its existing ones. Hence, this significant—and expensive—decision by Walmart managers had its origins in theories and research from OB and will be implemented in the firm through human resource management. The Walmart example also provides a preview of the strategic context of OB, explored in our next section.

Walmart recently announced plans to raise the hourly pay rates for 500,000 of its U.S. employees. The retailer expects its higher wages to make it easier to hire new employees and retain existing ones.


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The Strategic Context of Organizational Behavior

Successful business strategies are grounded in creating and maintaining a sustainable competitive advantage, which exists any time an organization has an edge over rivals in attracting customers and defending itself against competition. The effective management of people is key to the creation of a competitive advantage and business strategy execution. As former General Electric CEO Jack Welch said, “We now know where productivity—real and limitless productivity—comes from. It comes from challenged, empowered, excited, rewarded teams of people.” We now turn our attention more specifically to the nature of management and is relationship to OB.


Sources of Competitive Advantage

How does an organization gain a competitive advantage? Michael Treacy and Fred Wiersma have identified many sources of competitive advantage including having the best-made or cheapest product, providing the best customer service, being more convenient to buy from, having shorter product development times, and having a well-known brand name.Because it is an organization's people who are responsible for gaining and keeping any competitive advantage, effective management is critical to business success.

Warehouse retailer Costco's strong and loyal customer base, access to a broad range of high-quality products for a low price, and committed employees give it a competitive advantage over smaller and lesser-known retailers. Although Costco pays its employees substantially more than its closest competitor, Sam's Club, it has similar financial returns on its labor costs due to lower turnover and higher levels of employee productivity. This, in turn, results in a higher-quality customer experience.

According to Michael Porter, to have a competitive advantage a company must ultimately be able to give customers superior value for their money (a combination of quality, service, and acceptable price)—either a better product that is worth a premium price or a good product at a lower price can be a source of competitive advantage. Table 1.1 lists some possible sources of competitive advantage. You should note that an organization's talent is the key to securing each of these.

Table 1.1

Businesses can choose to pursue competitive advantage by using an array of different sources.
  • Innovation: developing new products, services, and markets and improving current ones

  • Distribution: dominating distribution channels to block competition

  • Speed: excelling at getting your product or service to consumers quickly

  • Convenience: being the easiest for customers to do business with

  • First to market: introducing products and services before competitors

  • Cost: being the lowest-cost provider

  • Service: providing the best customer support before, during, or after the sale

  • Quality: providing the highest-quality product or service

  • Branding: developing the most positive image

One of the most important things managers do is execute a firm's business strategy. We next discuss business strategy in more detail, as well as how OB can reinforce the organization's overall business strategy and support its execution.