Organizational behavior summary

Executive Summary

Concept	Description
Decision Making
Default Bias	Need more evidence to change already made decision than accept status quo
Misconception of Chance	Due to previous successes, think that chance of failure is low
Overconfidence	Poor correlation between accuracy and confidence
Sampling on Dependent Var.	Looking at the outcome of interest and ignoring other possibilities - the inverse
-Confirmation Bias	Only seeking information that confirms (and not disproves) your hypotheses
Framing Effects	Risk preference depends on whether outcome framed in gains or losses (losses increase risk taking
Perception (Judging Others)
Fundamental Attribution Error	Overestimate extent to which is target is responsible for behavior and discounts situational explanations
Alex Trebek Effect Contrast Effect	Perceptions of others influences perceptions of the target
Halo Effect	General perception of target influences perceptions of a particular dimension
Anchoring & Insufficient Adj.	We form judgments quickly and fail to adjust properly (related: primacy effect & recency effect)
Similar-to-me Bias	People more similar to self perceived more positively
Self-fulfilling Prophecy	Target's behavior in response to perceiver's first impressions confirms perceive
Seemingly-fulfilled Prophecy	Target put in positions where impossible to disprove initial impressions
Kelley's Covariation Model	Model to use in order to perceive others accurately: consistency, consensus, distinctiveness
Influence
Identifying Allies	Look for those who are similar, lack conviction or sit on the periphery
Framing Dissent	Frame in such a way that it attacks the issue itself not the majority/individuals
Symbolism	To argue point in logical and understandable manner
Timing	Choose good timing for best impact
Voting	Minorities ask for private vote (encourage dissent); when majority ask for public vote  (spotlight effect)
Hyper-rationality	Dissenters must appear overly rational, use emotion sparingly, and use effective questions
Foot-in-the-Door	After committing to a position people more likely to comply with consistent requests
Demonstrations	Rarely used, but highly effective; people believe what they see, not hear
Emotion	The contrast matters; use only when it is situation appropriate
Four Walls Technique	Ask a series of leading questions to box the target into the desired response (encyclopedia salesman)
Interpersonal Influence	Use Push (persuading/asserting) as the majority and pull (attracting/bridging) as the minority

Networking
Heidi Roizen’s Techniques	Consistency & performance > frequency; empathetic; pro at rejection; blends professional/personal
Reciprocity Ring	Circle of give and take mutually beneficial to everyone involved
Network Building	Seek interaction, help others, ask for help, follow-up consistently; must be two-way, not unilateral
Optimal Network Design	Structures (strong, diverse contacts) and processes (trust, mutually beneficial, consistent) yield > returns
Reciprocity Distinction	Level 1: focus on getting, Level 2: focus on transaction, Level 3: focus on contribution (communal)
Motivation
Expectancy Model	Motivation is a form of Effort, Performance and Outcome
SMART Goals	Specific, Measurable, Achievable, Reasonable, Timebound (clear)
Inspection v. Expectation	“You get what you inspect, not what you expect.”  Set goals very carefully. (Kerr, “On the Folly…”)
Reinforcement Approach	Positive (attractive consequence), Negative (removal of adversity), Punishment (aversive consequence)
Intrinsic v. Extrinsic	Intrinsic (sense of achievement and accomplishment); Extrinsic (material or social reward)
Loss Aversion	Losses are more painful than gains are satisfying; difficult to avoid in bonus-based systems; expectation!!
Negotiation
BATNA	Best Alternative to Negotiated Agreement; must identify for yourself and partner to set “target point”
Compromising	Splitting the difference; only effective on “zero-sum,” distributive issues
Logrolling	Integrative bargaining; Trading important issues with you with those important to your partner
Sandbagging	Strategic Misrepresentation, when one or more party misrepresent their interests to feign compromising
Preparation Tips	80/20; Assess: (1) Self, (2) partner, (3) situation; identify BATNA, “target points,” negotiation scope, etc.
Mediation
Hobson’s Choice	A “take it or leave it” choice; avoid during negotiation
Aggregation Bias	Diffuse it. We aggregate metrics together and forget costs associated with alternatives (e.g. guy rating the girl)
Communication
Modeling	Effective modeling should be Authentic, Observable and Routine
Illusion of Transparency	We assume others understand what we are thinking (e.g. tapping a song)
Social Proof	Viewing behavior as correct in a given situation to the extent that others are performing it; “We are sheep”
Diffusion of Responsibility	Bystander Effect; Tendency to accept less responsibility as group size increases  (Kitty Genovese murder)
Individuation	Diffusion falls when we are individually identified or reminded of ourselves (Diener, Halloween candy)
Persuading (Speech)	Analogies, Integrate setting, Common purpose, Build momentum & urgency, Repetition (Anaphora), Pauses

Decision Making

·     o   Confirmation Bias: Seeking information to prove the hypothesis and disparaging information inconsistent with our beliefs

    §  Escalation of Commitment: Putting more effort into a obvious failed cause. even though project is failing, we put resources into it because we have been working on it for a long time.

False consensus effect: 
Eg: drinking at GSB- everyone must do it because I do it.
      Grades at GSB: no one cares bcoz I dont

      Uniqueness bias: underestimate the # of people who do good and overestimate the # of people who do bad. 

              Eg: I think everyone steals pencils

             I think no one shares their notes

      Pluralistic Ignorance: we fail to realize that others think similar to us when under similar pressure.  There is sense of false polarization. 

       Eg: we are all tired of studying. but we think everyone else wants to go out even though they are just as tired. therefore we go out.

        Moral Credentialing: I do something good at 1 place and that makes me feel that I can do a little bad at another place. eg. charity on 1 side and low labor wages on another.

Perception (Judging Others)

·          ·         Fundamental Attribution Error – We assume you are responsible for an account and discount the situation; we do not give people the benefit of the doubt

o   Alex Trebek effect  - everyone thinks Alex Trebek is a genius

o   Ex: Your buss is unresponsive; you’ll blame him, and not that he is busy

·         Halo Effect: The perceiver’s general impression of a target influences his or her perception of the target on specific dimensions

o   Similar to the confirmation bias, but we collapse into a course evaluation

§  Ex:  A subordinate who has made a good overall impression on a supervisor is rated as performing high quality work and always meeting deadlines regardless of work that is full of mistakes and late.

o   Primacy Effect: We remember the beginning (first impression)

Recency Effect: 

·         Similar-to-me Bias: People perceive others who are more similar to themselves more positively than they perceive those who are more dissimilar

o   We like people like us

o   Ex: Promotions, hiring, etc.

o   Ex: Women in symphony auditions (blind testing)

Self serving bias: in survey, husband and women were asked what % of household work done by them? The result showed sum of their work was ~120%, 130% etc. 

·         Self-fulfilling prophecy:  We treat people differently based on our initial impressions of them

o   1. We form certain beliefs of people

o   2. We communicate those expectations with various cues.

o   3. People tend to respond to these cues by adjusting their behavior to match

o   4. The result is that the original expectation becomes fulfilled.

o   Study: Eye color experiment, students ended up doing objectively worse on exams

·         Kelley's Covariation Model: Question to ask to overcome:

o   Consensus: What do others do in the situation

o   Consistency: What has the subject done in the past?

o   Distinctiveness: What has the subject done in other situations?

·         

Influence

·         Hard to influence large groups alone, but it is possible

·         Techniques used by Henry Fonda in Twelve Angry Men

o   Emotional Contrast: Emotion can be used to capture attention, but people can desensitize to it, so you need an emotional contrast to attract attention.  Quickly return to equilibrium.  Examples:

§  Physical proximity (e.g. looking over shoulders)

§  Voice volume

o   Push v. Pull Techniques: Better to use push techniques (persuading, asserting) when majority; better to use pull techniques (attracting, compromise, bridging) when minority

§   Create new outcomes so it’s not you v. me, could be a third answer

o   Framing Dissent: Dissent must be framed to attack the issue, not the majority.

§  Frame the question in a favorable way (not trying to prove innocence, just see if we are 100% sure he is guilty)

§  Don’t act like you’re standing in the way of the group

o   Identify Allies: Look for those who are similar, lack conviction, or sit on the periphery.

§  Similarity (sympathy), lack of conviction (wavering), or dissatisfaction with the majority (Periphery)

o   Rationality: Effective dissenters must appear “hyper-rational.” Emotion must be situation appropriate, or professionally displayed.

§  Asking questions

§  Let opponents make difficult-to-defend, absolute statements, then disprove (knife example)

o   Voting: When in the minority, ask for a private vote to encourage dissent; when in the majority, ask for a public vote to discourage dissent.

o   Silence is awkward, and people will often try to fill the air and end up offering compromise; it also enables catharsis, letting others vent their emotions; no one can sustain high emotion for too long

·         Foot in the Door Technique: After committing to a position, people are more likely to comply with requests that are consistent with their original position (commitment and consistency)

o   Study: Sign-in yard; agreement rate went from 17% to 76%

o   Ex: “Can you do me a favor?” before asking for favor

·         Four Walls Technique: operates when a series of interview questions box the target into a tight space, forcing compliance (each question acts as a wall, closing in on the target).

o   Ex: Encyclopedia salesman example

Robert Cialdini

•Liking: People like those who like them. Two keys ways to develop liking: similarity & genuine praise. Positive remarks abt person’s attitude, traits, performance.

Reciprocity: give what you want to receive. “glad to help. I know how important it is for me to count on your help when I need it.”

Social Proof: use peer power whenever available. 

Eg: if friends donate, probability of our donation increases

Testimonials from fellow customers work better than sales man’s pitch

Eg: canned laughter, salting “tip jars”

•Consistency: make their commitments active, public and voluntary

Once people commit to something in public, they stay consistent.

Eg: if u get something in writing, odds are high that it will get done. People live up to what they have written down to demonstrate consistency.

Eg: ask for a small favor to support a cause, then ask more more favor…(commitment & consistency)

Principle of Authority: Expose your expertise, don’t assume its self-evident.

Very often, people mistakenly assume that others recognize and appreciate their experience.

Eg: physical therapy doctors

Scarcity: people want more of what they cant get. Highlight unique benefit and exclusive information. Frame your conversation in terms of what people stand to loose

Networking

·         ·         Optimal Network Design: Certain structures (strong, diverse contacts) and processes (trust, mutually beneficial, consistent) yield greater returns

·       Your network is not just people who you are friends with.

Nucelie of network are important.

Motivation

Cash vs Gift: gift is better. because people compare cash to what they already have.·    

Unexpected rewards increase the value.  rewards must be aligned with strategy. You get what you inspect and not what you expect.

     Direct supervisors have the most influence over employee motivation -- not peers, or subordinates, or even top leaders.

·         Extrinsic motivation – desire to perform a behavior to acquire material rewards (pay, benefits, etc.) or to avoid punishment.

o   Amount of pay

o   Quality of fringe benefits

o   Having job security

·         

o   SMART Goals: Specific // Measurable // Achievable // Reasonable // Timetable

·         Positive Reinforcement (increase desired behavior) does not necessarily lead to the same incentivized outcome as negative reinforcement (reduce undesirable behavior) Overall, negative reinforcement helps achieve performance above a critical threshold and then positive reinforcement helps above that. 

o   E.G. “Stop hitting your brother,” but real goal is to stop pestering

o   But must use negative reinforcement as well (or children become quitters)

o   Shorter intervals are better than longer ones

·         Loss Aversion: Losses are more painful than gains are satisfying

o   Loss aversion is difficult to avoid in bonus-based incentive systems

·         Unexpected rewards produce dopamine, but expected rewards do not.

·         Intrinsic motivation –

o   Learning something new

o   Accomplishing something worthwhile

o   Developing skills and abilities

o   Most people underestimate the extent and importance of intrinsic motivation

§  Ex: giving blood example, tenure, grade non-disclosure

·         How To Increase Intrinsic Motivation As A Manager

o   Autonomy: What can I do to give my subordinate more independence?

                      §  Have people choose their own workstreams

o   Mastery: How can I help my subordinate improve/demonstrate their competence?

              §  People like to be good at what they do and work harder when they believe they’ll get better

o   Relatedness: How can I help my subordinate feel connected to others?

                  §  Relationships (Study:  Grant & Hoffman, 2010, Hand hygiene)

§  Responsibility

§  Recognition

· 
        We are not wired to give people the benefit of the doubt and assume they are appreciative or thankful. eg. Say thank you!

o   Purpose: How can I remind my employee of the greater purpose?

            §  Purpose can be to win, impact, help, lead, etc – but must be shared

             §  Ex: Genentech showed customer testimonials to its R&D employees. 

·         

o   Four factors explain why so many fouled-up reward systems:

            §  Fascination with “objective” criterion (managers seek quantifiable standards that may not be relevant)

         §  Overemphasis on highly visible behaviors (behaviors that are hard to observe and measure are also hard to reward)

o

o   Ex: insurance, tracks returned checks and complaints, so “when in doubt, pay it out”

We hope for…	But we often reward…
Long-term growth	Quarterly earnings
Teamwork	Individual effort
Setting challenging “stretch” objectives	Achieving goals, “making the numbers”
Downsizing, rightsizing, restructuring	Adding staff, adding budget
Commitment to total quality	Shipping on schedule, even with defects
Candor, surfacing bad news early	Reporting good news, agreeing with the boss

Negotiation

·         Distributive Issues – Are they equally important to all parties? “Zero-sum issue”

o   Compromising or Splitting the difference is only optimal if issues are equally distributive

·       

·       o   Logrolling, or integrative bargaining = trading issues that are important to you with issues important to your partner.

·   

·         Sandbagging (Strategic Misrepresentation): Offering seeming concessions that benefits the offerer more than the recipient (Ex: Roosevelt pamphlet)

o   But if they learn about this, this reduces trust in future negotiations

o   Must ask the right questions and take the other’s perspective

o   Always better to work with multiple issues at a time to identify tradeoffs

§  Learn to offer packages and be careful offering ranges

§  BATNA: Best Alternative To Negotiated Agreement

o   First offers: If you are more clear on the bargaining range, better to make first offer

§  Initial offer can be a signal of its value

§  Ex: eBay starting price

o   You don’t get what you don’t ask for!!!  Many people are afraid to initiate negotiations (e.g. for salary increases)

·         

Mediation

facilitate perspective taking

Communication

·         

·         Illusion of transparency: we assume others understand what’s in our head (Ex: tapping a song)

·         Social Proof: People are more likely to comply with requests if they are consistent with what similar others are doing: “We are sheep, we are lemmings”

o   Ex: Canned laughter, salting tip jars, sidewalk study (looking up), fads, etc.

o   Ex: “If operators are busy, please call again.”

o   Ex: Hotel says other guests are reusing towels (Robert Caildini study at Holiday Inn)

o   Ex: “Every year, thousands of people steal fossils…” Caused 3x increase in theft

o   Ex: Time Magazine article on “Tax Cheating: Bad and getting worse”

o   Ex: “Discipline of Market Leaders” book, authors bought books to win NYT bestseller

·     

         Relative information is far more valuable than absolute because we remember it longer and process it instantly; absolute data without any benchmarks is almost useless

·      Dark side of social proof is    Diffusion of responsibility (bystander effect): Tendency to accept less responsibility as group size increases; Everyone assumes others are handling it

o    As a manger, to avoid: (1) Enhance individual accountability, (2) Watch out for large group size, (3) Clarify job responsibilities

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