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Organizational researchers study how individuals and organizations interact with their environment to accomplish both individual and collective goals. People are able to accomplish goals in organizations that they would be unable to accomplish alone, and they spend large portions of their lives interacting in organizational contexts. The complexities that emerge from bringing people together in organizational settings, therefore, provide a fascinating lens into the human experience. Organizational research brings together psychology, sociology, economics, and anthropology to examine both individual-level processes at work, as well as the organizational-level processes that dictate how ﬁrms relate to each other and their environment.
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Reﬂecting this focus on both individuals and organizations, the ﬁeld is split between ‘macro’ organizational behavior, drawing upon organizational sociology, and ‘micro’ organizational behavior, drawing upon social, personality, and industrial-organizational psychology. Macro-organizational behavior is concerned with the various strategies organizations use to adjust to their environment, such as the development of networks between ﬁrms. In contrast, micro-organizational behavior is concerned with the way personal characteristics combine with contextual features such as task, group, and organizational characteristics to predict work outcomes. Though the strength and uniqueness of organizational behavior rests on the equal emphasis of both individual and organizational processes and the utilization of a variety of research methods that cross disparate levels of analysis, our focus in this research paper is on micro-theory and research. Excellent reviews of macro-organizational theory can be found elsewhere in this collection and in Carroll and Hannan (2000) and Scott (1998).
1. Micro-Theory: Person–Situation Interactions
Micro-organizational behavior examines both personal and situational characteristics and, as in the ﬁeld of psychology, researchers debate the relative utility of each in explaining behavior. Some have emphasized the stability of attitudes and behaviors over time. For example, a person’s satisfaction with his or her job remains relatively stable over years and even decades (Staw and Ross 1985). From this perspective, individual characteristics are the best predictors of behavior since they derive from personal dispositions that remain stable over time and across situations. Others have criticized this view and posited that organizations should be conceptualized as ‘strong’ situations that are powerful enough to shape individual behavior (e.g., Davis-Blake and Pfeﬀer 1989). In strong situations individual diﬀerences are unlikely to be expressed. Instead, people learn appropriate attitudes and behaviors from their co-workers, established norms, and organizational practices and procedures; these social inﬂuence processes are presumed to predict individual behavior better than are personal characteristics.
Researchers have typically considered personal and situational factors in isolation from one another, but a complete understanding of organizational behavior requires their simultaneous consideration. An interactional approach is more complex than a mere additive melding of personal and situational characteristics because it attempts to represent both personal and situational factors and their reciprocal inﬂuence.
Interactions between personal and situational characteristics may take at least four forms. First, as speciﬁed above, some situations are stronger than others, leading to diﬀerent levels of behavioral uniformity. Second, work situations do not aﬀect everyone in the same way; some people’s behavior is more consistent across varying situations. Third, certain people, such as those exhibiting ‘charismatic’ leadership, can inﬂuence situations more than others. Finally, people do not select into situations randomly, but rather, into situations in which they think their attitudes and behaviors will be appreciated. Developing a complete theory of behavior in organizations, then, requires moving from considering personal and situational factors in isolation to considering the complexity and diversity of possible person–situation interactions and their eﬀects on work outcomes. We illustrate this by identifying the types of person– situation interactions that are relevant to a set of vibrant research domains within organizational behavior: organizational culture, demography, leadership, and creativity.
2. Organizational Culture: Selection, Socialization, And Person–Culture Fit
Research on organizational culture has demonstrated that norms and values can shape individual behavior. Recent research has also demonstrated that behavior can be predicted by understanding how personal characteristics interact with cultural context. Below we discuss the four types of person–situation interactions as they relate to organizational culture.
2.1 Organizational Culture As Strong Situation
Though researchers agree that organizational culture is meaningful and important, they do not agree about how to deﬁne and measure it. Organizational culture research typically draws upon theories in anthropology or cross-cultural psychology and uses ethnographic or quantitative methodologies. Some researchers have emphasized shared values and meaning (O’Reilly et al. 1991) while others have emphasized the ambiguity of cultural values and the existence of subcultures (Martin 1992). Most agree that the existence of diﬀerent perceptions among members does not preclude the existence of shared assumptions. Organizational culture can be understood as a system of shared values and norms that deﬁne what is important and how organizational members ought to feel and behave. Through members’ clarity about organizational objectives and their willingness to work toward these objectives, culture inﬂuences the attainment of valued organizational goals by enhancing an organization’s ability to execute its strategy. This conceptualization focuses on two primary aspects of culture: ﬁrst, the extent to which agreement and intensity exist about values and norms (culture strength), and, second, the extent to which these norms and values diﬀer across settings in important ways (culture content).
Culture content refers to shared values and norms that deﬁne desirable behavior in the organization. For example, some cultures may stress the value of being a ‘team player’ while others may emphasize independence. For a culture to be strong, members must agree about which values are important and be willing to enforce them strenuously. Members of an organization may agree that they value, for example, being cooperative, but unless unequivocal and salient consequences result from compliance (e.g., cooperating with co-workers) and non-compliance (e.g., competing with or undercutting co-workers), the culture cannot be characterized as strong. A strong culture is characterized by social control in that members both agree about and are willing to enforce values and norms, even if such enforcement violates hierarchical lines of authority. Further, greater behavioral homogeneity among members, for better or worse, should be observed in stronger organizational cultures.
Cultural values are conveyed to members through the socialization processes that new recruits experience when they enter an organization. Though socialization often takes the form of training and contributes to increased task knowledge, information about the norms of the organization is also transmitted through training and other types of socialization (Morrison 1993). Interestingly, such normative information appears to be transmitted very early in new recruits’ membership since cultural ﬁt changes little after members’ ﬁrst year (e.g., Rynes and Gerhart 1990).
2.2 Behavioral Consistency Across Various Organizational Cultures
Although culture inﬂuences members’ behavior, they are not merely passive recipients of social control. Individual characteristics may interact with the organization’s culture to predict important behavioral and work outcomes. Research on person–organization ﬁt, deﬁned broadly as the compatibility between people and the organizations for which they work (Kristof 1996) has focused primarily on congruence between patterns of organizational values and patterns of individual values. New employees whose values more closely match those of the organization view it as more attractive, are more likely to join when made an oﬀer, are able to adjust to it more rapidly, perform better, are more satisﬁed, and remain with it longer (e.g., Chatman 1991).
But, just as organizational cultures may diﬀerentially aﬀect behavior, people may also diﬀer in the extent to which their behavior is shaped by an organization’s culture. For instance, compared to individualists, cooperative people were more responsive to the individualistic or collectivistic norms characterizing their organization’s culture, and exhibited greater behavioral adaptation to each across the two types of organizational cultures (Chatman and Barsade 1995). Thus, congruence models, which presume an additive equivalence of person and situation factors and assume that greater congruence is always better, cannot fully explain behavior in organizations. Instead, a focus on mismatches between person and organization characteristics that challenge people to either act in accordance with the culture and thereby contradict enduring personal tendencies, or vice versa, might generate insight into such interactions.
Future research might focus on the set of characteristics, such as cooperation, self-monitoring, and self-esteem, that contribute to people’s ﬂexibility across situations. Identifying such characteristics could improve predictions of the behavioral expression of person characteristics both across time and across situations, and in particular, the extent to which an organization’s culture and processes will inﬂuence member behavior. Research might investigate other organizationally relevant matches and mismatches to understand how diﬀerent situations inﬂuence person– situation interactions. For example, examining mismatches between honest people and dishonest organizations may help to identify if and when good people ‘turn bad.’
2.3 Individuals’ Inﬂuence Over Organizational Culture
Founders and senior executives, who have legitimacy and authority, may be the most inﬂuential individuals in an organization. The person who creates the organization has signiﬁcant impact on the strategies that the group develops to survive, and these are often preserved in the organization’s values, practices, and promotion patterns well past the individuals’ actual presence. Ironically, newcomers, who are at the other end of the spectrum in terms of authority and legitimacy from founders, may also exert a great deal of inﬂuence on culture. This inﬂuence may be indirect; research has shown that the process of recruiting new members, including emphasizing an organization’s attractions, strengthens current members’ connection to their organization (Sutton and Louis 1987), and can exert mutual learning of the organizational culture (March 1991). An organization’s culture may also be transformed by the entrance and exit of its members. Thus, the strength of an organization’s culture may depend on the individual mobility of its members. Using simulation methods, organizations’ length of service distributions have been examined as indicators of the extent to which members have been socialized into the culture’s norms and values. This research has shown that variations in service distributions are positively associated with heterogeneity in organizational culture due to three distinct cultural processes: socialization, group cohesiveness, and common historical experiences (Carroll and Harrison 1998).
2.4 Situation Selection Based On Organizational Culture
Schneider (1987) developed the Attraction–Selection– Attrition (ASA) model, which posits that the key factor inﬂuencing the relationship between people and organizations is the ﬁt between individual personality and the modal personality represented in the organization. People are diﬀerentially attracted to organizations on the basis of the anticipated ﬁt between their own characteristics, such as personality traits, and organizational characteristics, such as culture (e.g., Cable and Judge 1997). Job seekers take an active role in the recruitment process and are attracted to careers and organizations reﬂecting their personal values and interests. Further, organizations have developed formal and informal strategies to identify and select recruits who will be compatible with their goals and working environment, elements that are strongly inﬂuenced by an organization’s cultural values. For instance, rather than focusing on job-related criteria, selection appears to be based on such socially based criteria as ‘personal chemistry,’ and ﬁt with the organization’s values.
3. Organizational Demography
People may diﬀer from each other in many ways that are both observable and unobservable. Members’ observable demographic characteristics constitute a context for every other individual in the organization. For instance, a lone newcomer in an organization of established members may have a very diﬀerent experience than a newcomer entering an organization characterized by members with varying tenure. Given the dramatic changes in US labor force demography over the past decade, relational demography, or the distribution of demographic characteristics within organizations, has become an active area of research.
Research on organizational demography improves upon past research on employee turnover. Turnover typically indicates a discrete departure event while demography focuses on length of service and rate of departure by taking into account the distribution of people by the length of time they have spent in the organization. This distribution can be inﬂuenced by a host of factors including personnel policies, technology, and the degree of unionization in the workforce ( Pfeﬀer 1983). Most research on observable diﬀerences has examined the eﬀect of demographic heterogeneity versus homogeneity on performance and has yielded mixed results (see Williams and O’Reilly 1998 for a comprehensive review). Some studies have demonstrated the positive eﬀects of demographic heterogeneity for increasing the number of novel perspectives that can be used to solve diﬃcult problems, increasing an organization’s network of contacts, and facilitating organizational change. However, demographic heterogeneity may also lead to communication problems, less social integration in workgroups and greater turnover (e.g., Tsui et al. 1992). Demographic distribution among members across various attributes is an important situational factor that deserves further research since it can inﬂuence behavior diﬀerently depending on an individual’s own demographic proﬁle.
3.1 Behavioral Consistency Across Demographically Heterogeneous Workgroups
Research suggests that an organization’s culture may inﬂuence the relationship between demographic diversity and work outcomes. For example, the purported beneﬁts of a demographically diverse workforce are more likely to emerge in collectivistic organizations that make organizational membership more salient than membership in a demographic category (Chatman et al. 1998). An organization’s culture may dictate the extent to which members view certain demographic characteristics as valuable and others as associated with lower status within an organization’s informal social system (Spataro 2000). Furthermore, each attribute, such as tenure, race, or sex heterogeneity within a group, may diﬀerentially inﬂuence individual behavior and the combinations of various attributes can result in ‘fault lines’ which become stronger as more attributes align themselves in the same way (Lau and Murnighan 1998).
One explanation for the lack of clarity about the beneﬁts and detriments of diversity is that researchers have neglected to consider key mediating processes between demographic composition and performance. As shown in one recent study, heterogeneous groups initially created norms fostering independence rather than cooperation among members, but cooperative norms subsequently mediated the relationship between group demographics and performance (Chatman and Flynn, 2001). Similarly, a group’s level of conﬂict inﬂuenced the impact of demographic heterogeneity on performance (Jehn et al. 1999).
4.1 Some Individuals Can Eﬀect Change More Than Others
Early leadership research focused on the physiological and psychological traits thought to be associated with exceptional leaders. These ‘great man’ theories of leadership examined the eﬀects of personal characteristics such as height, physical appearance, and intelligence on leaders’ emergence and eﬀectiveness. This stream of research has its counterpart in more current studies examining the eﬀects of self-conﬁdence, extraversion, and energy level (e.g., House 1988). The aim of this approach has been to identify a leadership personality. However, it leaves many crucial questions unanswered, such as whether certain personal characteristics become more important than others depending on the organizational context, and why, regardless of formal authority, followers perceive some people as leaders and not others.
Contingency theories of leadership were advanced to explain how certain personal characteristics made a leader eﬀective in certain situations (e.g., House and Baetz 1979). For example, leaders who initiated structure raised the productivity and satisfaction of a group working on a boring or simple task but lowered the productivity and satisfaction of a group working on a complex task, while a considerate leader raised the satisfaction and productivity of a group engaged in a boring task but had little eﬀect on a group engaged in a task they found intrinsically interesting. Additionally, research showed that allowing members to participate in decision making increased commitment but depended on the amount of trust the leader had in his or her subordinates as well as the urgency of task completion (Vroom and Jago 1978). Thus, contingency theories of leadership were more comprehensive than trait theories; however, they still did not account for the interactive eﬀects of leader characteristics and their situational contexts.
Recent research has focused on charismatic and transformational leadership, demonstrating that some individuals inﬂuence situations more than others. This research takes an interactional approach by conceptualizing leadership as a personal relationship between the leader and his or her followers. A leader must have certain interpersonal skills in order to inspire followers to set aside their goals and to pursue a common vision. Charismatic leaders are thought to have the ability to change their circumstances by increasing followers’ motivation and commitment and, sometimes, to change the direction of the entire organization (e.g., Meindl et al. 1985). However, a leader is only charismatic if followers recognize him or her as such; followers must identify with the vision articulated by the leader. In one particularly exhaustive laboratory study of charismatic leadership (Howell and Frost 1989), confederates were trained to display qualities of a charismatic leader, such as projecting a dominant presence, articulating a large overarching goal, and displaying extreme conﬁdence in followers’ ability to accomplish this goal. In addition, norms were created in each group for either high or low productivity. In contrast to participants working under a considerate or structuring leader, participants working under the charismatic leader displayed higher task performance regardless of the group productivity norm. This ﬁnding suggests that leaders mold their styles in response to the situation. Moreover, some leaders are capable of changing the situation itself by changing followers’ perceptions and motivation.
4.2 Leadership As A Function Of The Strength Of The Situation
Some researchers have been skeptical of a leader’s ability to change situations, and have suggested that leadership is far more situationally determined than might have been assumed. The attributional theory of leadership suggests that because people tend to associate certain behaviors with those of a leader, leadership qualities will be attributed to a person displaying these behaviors (Calder 1977). Various biases emerge from this attribution, however. For instance, individuals tend to overestimate the amount of control a leader has over events that are, in fact, random or uncontrollable ( Pfeﬀer 1977). Furthermore, a leader will be given more credit when situations are unfavorable (Meindl et al. 1985). Individuals’ lay conceptions of leadership can be used or misused for the purposes of organizational impression management (Ginzel et al. 1993). In sum, leadership research has focused more on contexts and followers rather than on the characteristics of a focal leader. Future research might examine whether leaders reﬂect the personal characteristics of their followers or complement their weaknesses, if some followers have a greater psychological need for leadership than others, and the various substitutes for leadership, or how people can be compelled to lead themselves.
5. Creativity And Innovation
Research on creativity, like leadership, has moved from emphasizing traits, to considering the organizational context as well as the interaction between the two. Creativity is generally viewed as distinct from innovation. Creativity occurs at the individual level, and refers to the generation of ideas that are both novel and useful. Innovation refers to the process of implementing these ideas at the organizational level.
5.1 Some People Are More Creative Across Situations Than Others
Early creativity research focused on the personality traits associated with individuals who had made creative contributions in their respective ﬁelds. People who have a wide variety of interests, are attracted to complex tasks, tolerant of ambiguity, and self-conﬁdent perform more creatively (e.g., Barron and Harrington 1981). However, trait research ignores how organizational contexts inﬂuence people’s ability to perform creatively.
5.2 Some Situations Foster More Creativity Than Others
The degree to which one’s job encourages intrinsic versus extrinsic motivation aﬀects one’s creative performance. Early studies suggested that when people worked on tasks that they found intrinsically interesting, adding an extrinsic reward lowered their interest in performing the task for its own sake (Deci 1971). More recent studies in organizational settings showed that individuals were most creative when they were intrinsically motivated. This intrinsic interest led them to stay focused, persist longer to complete diﬃcult tasks, to ‘play’ with ideas, and suggest novel solutions (Amabile 1988). This suggests that the situational factors that are associated with decreases in intrinsic motivation, such as a controlling supervisory style, and an emphasis on external rewards, may indirectly diminish people’s creative potential.
Organizational culture also inﬂuences creativity and innovation. Organizations that have mechanisms to express conﬁdence in members, and communicate this conﬁdence through the culture’s core values, increase creativity among members (Kanter 1988). These ﬁndings are supported by a recent ethnography of a product design ﬁrm, IDEO, which creates new products by taking technologies from one industry and applying them in other industries where these technologies are unknown (Hargadon and Sutton 1997). At IDEO, employees are encouraged to create analogies between past technological solutions and current problems and to share them in brainstorming sessions. Further, employees are selected who have unique hobbies or skills that can be used to solve design problems.
Employees who have traits associated with creativity are more likely to thrive in organizations such as IDEO, which place an emphasis on creative performance. For example, employees produced the most creative work when they possessed the appropriate personal characteristics, were working on complex assignments, and were supervised in a supportive, noncontrolling fashion (Oldham and Cummings 1996). While the possibility that organizations can manage creativity through the use of a strong culture appears promising (Flynn and Chatman 2001), some worry that mechanisms of social control will stiﬂe, not encourage creativity (Nemeth and Staw 1989). Future researchers might examine how organizations can achieve harmony and cohesion without sacriﬁcing the ﬂexibility and constructive conﬂict necessary for creativity and innovation. Many believe that creativity and innovation are the last sustainable competitive advantages and as such these issues will continue to generate a great deal of interest.
As theorists endeavor to develop a complete understanding of behavior in organizations, the analysis of both personal and situational factors, as conjoined units of behavior, will become increasingly fundamental to organizational studies. Person–situation interactions are much more complex than the simple addition of personal and situational characteristics, and these interactions may take a variety of forms. Some people are more responsive to situations than others, some situations can shape behavior to a greater degree than others, and some people have the unique capability to shape situations to their advantage or that of the organization. Furthermore, group members’ personal characteristics may constitute the situational context as every individual responds to the personal or demographic characteristics of every other individual in the organization (Carroll and Harrison 1998, Tsui et al. 1992). These interactions are both complex and diverse: hence the ﬁeld of organizational behavior must necessarily reﬂect this diversity. It will become increasingly important to observe these interactions over time. Since people and situations adjust to each other, cross-sectional research will not capture the dynamic interplay between the two. By pursuing interactional research over time, organizational behavior will increasingly evolve into a ﬁeld that is as vibrant as the organizations it seeks to understand.
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