Case: "Managing Motivation in a Difficult Economy"
Due Sep 7, 2014 11:59 PM
ERA OF THE DISPOSABLE WORKER
Learning Objectives: Define organizational behavior (OB); Show the value to OB of systematic study; Demonstrate the importance of interpersonal skills in the workplace; Describe the manager’s functions, roles, and skills; Identify the challenges and opportunities managers have in applying IB concepts; Demonstrate why few absolutes apply to OB
Learning Outcomes: Define organizational behavior and identify the variables associated with its study; Describe the factors that influence the formation of individual attitudes and values; Apply the study of perception and ...view middle of the document...
As Peter Cappelli of the University of Pennsylvania’s Wharton School notes, “Employers are trying to get rid of all fixed costs. First they did it with employment benefits. Now they’re doing it with the jobs themselves. Everything is variable.”
We might suppose these corporate actions are largely taking place in an era of diminishing profitability. However, data from the financial sector is not consistent with this explanation. Among Fortune 500 companies, 2009 saw the second-largest jump in corporate earnings in the list’s 56-year history. Moreover, many of these gains do not appear to be the result of increases in revenue. Rather, they reflect dramatic decreases in labor costs. One equity market researcher noted, “The largest part of the gain came from lower payrolls rather than the sluggish rise in sales…” Wages also rose only slightly during this period of rapidly increasing corporate profitability.
Some observers suggest the very nature of corporate profit monitoring is to blame for the discrepancy between corporate profitability and outcomes for workers. Some have noted that teachers whose evaluations are based on standardized test scores tend to “teach to the test,” to the detriment of other areas of learning. In the same way, when a company is judged primarily by the single metric of a stock price, executives naturally try their best to increase this number, possibly to the detriment of other concerns like employee well-being or corporate culture. On the other hand, others defend corporate actions that increase the degree to which they can treat labor flexibly, noting that in an increasingly competitive global marketplace, it might be necessary to sacrifice some jobs to save the organization as a whole.
The issues of how executives make decisions about workforce allocation, how job security and corporate loyalty influence employee behavior, and how emotional reactions come to surround these issues are all core components of organizational behavior research.
1. To what extent can individual business decisions (as opposed to economic forces) explain deterioration in working conditions for many workers?
Individual business decisions like focusing on stock prices, focusing on only one stakeholder (the shareholder) returns, etc. lead management to treat other stakeholders as a liability. This liability induced view of employees and society, forces business managers to ignore the requirements of this section. So, with time as managers focus more on increasing profit by reducing costs, they tend to cut employee benefits, and other workplace facilities, thereby deteriorating the working conditions. Example – Many companies focus on manufacturing in developing nations which offer labor at a cheap rate and ask only basic necessities, thereby ignoring safe and good workplace practice in lieu of reduced costs, which has...