1.1 Trends and Changes

Challenges and Opportunities

There are many trends within the workplace and around the globe that have and will continue to affect the workplace and your career. We are sure you have noticed many of these trends simply by reading news headlines. We will highlight some of these trends along with the challenges and opportunities they present for students of organizational behaviour.

Ethical Challenges

Business ethics refers to applying ethical principles to situations that arise either with customers or with employees. With customers ethical practices could be charging fair prices or responding to complaints. Unethical practices examples could be false product claims, fake reviews on the web and hidden terms in user agreements.

On the other hand, businesses try to get ahead unethically by treating employees unfairly. This can keep costs down and improve productivity. Poor treatment of employees, sexual harassment, bribery, selling customer data, fraudulent accounting practices are some examples of unethical practices.

A former employee of Facebook, data scientist Frances Haugen was busy exposing Facebook’s means of keeping users addicted by keeping everyone hate-filled and angry, and how Instagram was an after-school club where the main activity was eating disorders and body dysmorphia – and she had the receipts to prove it. “During my time at Facebook, I came to realize a devastating truth: Almost no one outside of Facebook knows what happens inside Facebook,” Haugen told the U.S. Congress. “The company intentionally hides vital information from the public, from the U.S. government, and from governments around the world.”

Investors forced Mr. Travis Kalanick, founder and former CEO of Uber to resign as chief executive in 2017, after a series of privacy scandals and complaints of discrimination and sexual harassment at the company. The chairman and chief executive of Wells Fargo & Co., ( a highly valued American bank) , John Stumpf, resigned in 2016 in the aftermath of a scandal over the bank’s past practice of secretly selling services to unsuspecting customers. Ferrero USA is the company behind the brand Nutella. It was forced to pay a settlement of $3.05 million after settling a class action lawsuit for false advertising that its chocolate spread is a nutritious choice for children. For years, Foxconn has been accused of violating labor rights. Leaks revealed that the company employs children as young as 14 years old to work in its factories in China. The supplier provides products to both Apple and Amazon. In the Volkswagen emissions scandal, the company admitted to having installed software that manipulated emissions readings to make its cars appear as if they were environmentally friendly.

The AIG, Tyco International, WorldCom, and Halliburton Energy Services have all been examples of poor judgment or outright illegal behaviour. The immediate response by government has been the Sarbanes-Oxley Act, which went into effect in 2002. This act consists of 11 different requirements aimed at greater accountability, which companies must follow in terms of financial reporting and compliance. While there may be some benefits to businesses from complying with these rules (Wagner & Dittmar, 2006), few see this as the long-term solution to dealing with unethical behaviour. The challenge is to continue to think about business ethics on a day-to-day basis and institute cultures that support ethical decision making. There is great opportunity for organizations to be on the forefront of ethical thinking and actions. OB research finds that the most important determinant of whether a company acts ethically is not necessarily related to their ethical conduct policies and rules. Instead, the most valuable indicator is whether a company has a culture that fosters consistent ethical behaviour and leaders who are committed to it (Driscoll & McKee, 2007).

The Effects of the Pandemic

For all the difficult and devastating consequences of the pandemic, it has also taught us that a new and better way of working is possible. We’re learning that workplace flexibility and productivity go together, and many even found more meaning in their work during the pandemic than they did before.

Qualtrics (web-based software that allows the user to create surveys and generate reports), asked over 4,000 global employees who had shifted from in-person to remote work at some point during the pandemic about their expectations and desires for the future of work. As companies and organizations navigate the return to work, they’ll need to recognize that people’s needs, and priorities have shifted during the last year. Leaders have a unique opportunity to listen directly to their customers and employees and build on what they’ve learned during lockdown.

The research revealed that flexibility is the future.

The ability to travel, move, and live away from an office — while still working their jobs — gave many a flexibility they don’t want to give up after the pandemic is over.

• Over half of respondents (53%) said a long-term remote work policy would make them consider staying at their organization longer, and 10% said they would probably quit their job if they were forced back into the office full-time
• 80% of employees looking for a new job said it was important to them that their next job offer them the opportunity to live anywhere 
• The younger generation seems to be more mobile: 25% of Gen Z (anyone born from 1997 to 2012) and 17% of Millennials (anyone born from 1981 to 1996) said they moved during the pandemic, compared to less than 10% of Gen X and Baby Boomers

Most don’t want to ditch the office completely, however. Many employees and leaders believe offices with a hybrid arrangement will outperform those without, especially as they cater to the individual needs of their employees.

How organisations will adapt to rapidly evolving employee preferences will determine the quality of talent that they will attract. OB facilitates the study of how to understand workplace emotions, attitudes, stress and motivation.

Lack of Employee Engagement

” The business of business is people” said the late Chairman of Southwest Airlines, Herb Kelleher . Southwest is among the world’ 5 most profitable airlines. Studies suggest that fostering engagement, a concept related to passion, in employees has a significant impact on the corporate bottom line. Gallup, (a company became known for its public opinion polls conducted worldwide) for instance, has been on the forefront of measuring the impact of what is called employee engagement. Employee engagement is a sense of purpose, belonging, and commitment to an organization, particularly a focused, intense, (for example: what effort do I put into my work?) persistent, (for example: how can I demonstrate consistency in my work?) and purposive effort( for example: what purpose does my work serve?) toward work-related goals.

An engaged employee is a person who is fully involved in and enthusiastic about their work (Employee engagement, 2008). The consulting firm Blessing White offers this description of engagement and its value: “Engaged employees are not just committed. They are not just passionate or proud. They have a line-of-sight on their own future and on the Organization’s mission and goals. They are ‘enthused’ and ‘in gear’ using their talents and discretionary effort to make a difference in their employer’s quest for sustainable business success” (Blessing White, 2008).

Engaged employees are those who are performing at the top of their abilities and happy about it. According to statistics that Gallup has drawn from 300,000 companies in its database, 75% – 80% of employees are either “disengaged” or “actively disengaged” (Gallup Press, 2006).

That’s an enormous waste of potential. Consider Gallup’s estimation of the impact if 100% of an organization’s employees were fully engaged:

• Customers would be 70% more loyal.
• Turnover would drop by 70%.
• Profits would jump by 40%.

Job satisfaction studies in the United States routinely show job satisfaction ratings of 50% – 60%. But one recent study by Harris Interactive of nearly 8,000 American workers went a step further (Zinkewicz, 2005). What did the researchers find?

• Only 20% feel very passionate about their jobs.
• Less than 15% agree that they feel strongly energized by their work.
• Only 31% (strongly or moderately) believe that their employer inspires the best in them.

According to the U.S. Bureau of Labor Statistics, during the period of the pandemic, nearly four million Americans quit their jobs in July 2021 alone. The resignation rate in the U.S. is now at a two-decade high, with more than 11 million jobs open. One recent study found that 95% of workers would consider a job change. Harvard Business Review noted that employees between the ages of 30 and 45 have had the greatest jump in resignation rates, with an average increase of more than 20% between 2020 and 2021. As Time Magazine put it, “the pandemic revealed just how much we hate our jobs.”

This, then, is more than just a Great Resignation. This is a state of discontent. A state of a lack of employee engagement and commitment.

Engagement is both a challenge and an opportunity for OB.

Technology

Technology has transformed our life, our living and the way work gets done, creating many great opportunities.

The nexus of increasing personal computing power, the Internet, as well as nanotechnology, are allowing creations that were unimaginable 50 years ago. The rise and rise of social media applications, that are on your phone and the fact that there is an app for everything have allowed us to connect to the world instantly. The rate of technological change is not expected to slow down anytime soon. Gordon Moore, cofounder of Intel Corp., shocked the world in 1975 with what is now termed Moore’s Law, which states that computing power doubles every 2 years. This explains why a 4-year-old computer can barely keep up with the latest video game you have purchased. And why with each new release of the Apple iphone, more features were added to make our experiences frictionless, easy and enjoyable. As computers get faster, new software is written to capitalize on the increased computing power. Our phones and computers have varied Operating Systems. Five of the most common operating systems are Microsoft Windows, Apple macOS, Linux, Android and Apple’s iOS.

We are also more connected by technology than ever before. Zoom transformed the way we connected during the pandemic. Imagine if we had no such access to video-based conferencing. How would students have had the opportunity to connect with their educational institutions? Through giving employees options of WFH (Work From Home) and Hybrid work (work from both home and office) technology has brought convenience into work-life integration but also a great deal of challenges to individuals and organizations alike. Isolation, Discomfort, difficulty in collaboration, Zoom fatigue, band-width and privacy issues (not feeling comfortable to keep the camera on during conversations) and work-life balance are some of the challenges that both employees and organisations have to increasingly consider. To combat the overuse of video conferencing and e-mail, companies such as Deloitte in Canada have instituted “no Zoom Fridays,” in which all communication is done via other channels.

In December 2020, Sundar Pichai, CEO of Alphabet( Google) delivered a speech virtually at the Singapore FinTech Festival emphasizing inclusive digital economy.

He said , ” The coronavirus outbreak has sped up the adoption of digital tools and trends by years……..Southeast Asia’s Internet economy is currently on the verge of a massive transformation……more than 40 million people in the region connected to the Internet for the first time in 2020 – four times as many as the year before……while Covid has accelerated the use of digital tools, …….”

Businesses and organizations across the world will have to find newer and better ways to use technology as an enabler to build more productive teams and hence drive productivity.

This technology trend contains challenges for organizational behaviour.

Flattening World

Thomas Friedman’s book The World Is Flat: A Brief History of the Twenty-First Century makes the point that the Internet has “flattened” the world and created an environment in which there is a more level playing field in terms of access to information. This access to information has led to an increase in innovation, as knowledge can be shared instantly across time zones and cultures. It has also created intense competition, as the speed of business is growing faster and faster all the time. In his book Wikinomics, Don Tapscott notes that mass collaboration has changed the way work gets done, how products are created, and the ability of people to work together without ever meeting.

There are few barriers to information today, which has created huge opportunities around the globe. Marc Andreessen, cofounder of Netscape Communications Corporation, notes, “Today, the most profound thing to me is the fact that a 14-year-old in Romania or Bangalore or the Soviet Union or Vietnam has all the information, all the tools, all the software easily available to apply however they want” (Friedman, 2005). Of course, information by itself is not as important as having the right information at the right time. A major challenge for individuals in the flattened world is learning how to evaluate the quality of the information they find. For tips on how to evaluate the quality of information, see the OB Toolbox below.

The concept of ” The World is flat” can now be extended to the war in Ukraine. In this interconnected, flat world. what happens in one corner of the world rapidly affects other parts. The costs of war in terms of rising inflation, fuel and food costs may, according to the United Nations, lead to billions of people facing the greatest cost-of-living crisis in a generation.

Mini Case Scenario

Sustainability and Green Business Practices

The primary role of for-profit companies is to generate wealth for their shareholders. More recently, the concept of the triple bottom line has been gaining popularity. Those subscribing to the triple bottom line (People, Planet and Profit) believe that beyond economic viability, businesses need to perform well socially and environmentally. While some organizations have embraced the triple bottom line, businesses are also undergoing a great deal of “greenwashing,” where products or processes are marketed as green to gain customers without truly engaging in sustainable business practices. Sustainable business practices are those that meet the present needs without compromising the needs of future generations. The challenge is to reconcile the accountability that publicly owned firms have to their shareholders while attending to the triple bottom line.

On the other hand, organizations also have an opportunity to proactively innovate for not only sustainability but also even greater profits. For example, sales of the Toyota Prius, which combines combustion engine efficiency with hybrid electric technology, have been dramatic and have helped propel Toyota to record market share and profits. Tesla, with its Electric Vehicle is becoming an aspirational brand.

An unlikely leader in the sustainability movement is Wal-Mart. In Canada, Wal-Mart has done away with plastic bags encouraging customers to carry their own shopping bags. This is a big moment for Wal-Mart’s associates and customers: making this change will help to prevent more than 680 million single-use plastic bags from entering circulation each year. For context – that’s enough bags to circle the world nearly 10x!

Wal-Mart hired Adam Werbach, the former president of the Sierra Club, to help train 1.3 million North American Wal-Mart employees on sustainability. Wal-Mart has also been pressuring suppliers to produce compact fluorescent lightbulbs with less mercury and has slashed the resources needed in packaging by requiring all suppliers to make packages smaller (Fetterman, 2006; Sacks, 2007). In the future, increasing interdependence between businesses, governmental agencies, and NGOs is bound to effect change throughout the economy (Campbell, 2007; Etzion, 2007).

Sustainability practices

David Takayoshi Suzuki CC OBC FRSC is a Canadian academic, science broadcaster, and environmental activist. Suzuki earned a PhD in zoology from the University of Chicago in 1961, and was a professor in the genetics department at the University of British Columbia from 1963 until his retirement in 2001.

In his webiste “Living Green” David tells us how we can protect, respect and restore nature, and support safer, healthier communities.

What are you doing to protect, respect and restore nature?

Here are 30 ways to make your life more environmentally friendly and sustainable.

The Global Marketplace for Staffing: Outsourcing and Offshoring

Outsourcing occurs when a company contracts a specific process out to a third party, finding someone who specializes in whatever needs to be done. Outsourcing has become a way of life for many organizations—especially those based in the United States who are outsourcing to countries where labor is relatively inexpensive. This practice can involve temporary employees, consultants, or even offshoring workers. Sportswear giant Nike outsources the production of all its footwear to various overseas manufacturing plants. According to a report out of Ohio State University, China does 36% of all Nike’s shoe manufacturing, while Vietnam has another 36%, Indonesia accounts for 22%, and then Thailand comes in at 6%.   While their apparel is manufactured in 41 countries including Chia, Vietnam, Thailand, Indonesia, Sri Lanka, Pakistan, and Malaysia as their top countries.

Outsourcing can also happen within a country. A baker may find making cream for cakes too expensive and therefore outsources it to a manufacturer who specializes in creams for cakes. Both he manufacturer and the outsourced company are within the same country.

Offshoring happens when businesses send in-house jobs overseas. Both may save a company money, but only offshoring specifically means sending jobs out of the country.

Nowhere is there more outsourcing and offshoring than in the software technology industry. A survey of software developers revealed that 94% outsource project work. When they offshore, the work most frequently goes to India, Singapore, Russia, and China (McGee, 2007). Microsoft has been expanding their use of employees in Canada for a variety of reasons such as closer proximity to Microsoft’s headquarters in Seattle, Washington, as well as similarity of language and time zones.

Charles Handy, author of The Age of Paradox, coined the term shamrock organization, which is an organization comprised of one-third regular employees, one-third temporary employees, and one-third consultants and contractors. He predicts that this is where organizations are headed in the future. The darker side of the changing trend in organization composition revolves around potential unemployment issues as companies move toward a shamrock layout. Fortunately, this shift also presents an opportunity for organizations to staff more flexibly and for employees to consider the tradeoffs between consistent, full-time work within a single organization versus the changing nature of work as a temporary employee, contract worker, or consultant—especially while developing a career in a new industry, in which increased exposure to various organizations can help an individual get up to speed in a short amount of time. The challenge for organizational behaviour is managing teams consisting of different nationalities separated not only by culture and language but also by time and space.

1.3 Conclusion

This chapter is designed to familiarize you with the concept of organizational behaviour. We have covered methods organizations might use to address issues related to the way people behave at work. In addition, you should now be familiar with the large number of factors, both within an individual and within the environment, that may influence a person’s behaviors and attitudes. In the coming years, society is likely to see a major shift in the way organizations function as a result from rapid technological advances, social awareness, and cultural blending. OB studies hope to enhance an organization’s ability to cope with these issues and create an environment that is mutually beneficial to the company as well as its employees.

We conclude this introduction to Organizational Behaviour. As shown in the graphic below, the first 6 chapters will be focused on the Individual – who is at the heart of the organisation, the next 6 chapters on the Group and then one chapter on Organisation culture.

We hope you enjoy the learning experience.

1.4 Exercises