MBA – 504 BUSINESS STATISTICS
Instructor: Dr. Abdus Sattar
Instructor: Dr. Abdus Sattar
TOPIC – 1: INTRODUCTION
STATISTICS: The science of collecting, organizing, presenting, analyzing, and interpreting data to assist in making more effective decisions.
Types of statistics: Statistics is usually divided into two categories:
Descriptive statistics and
Inferential statistics.
Descriptive Statistics: Methods of organizing, summarizing, and presenting data in an informative way.
Example: the population of Bangladesh in 1991 was 112 million and in 2001was 115 million.
Inferential statistics : The methods used to determine something about a population, based on a sample.
Inferential statistics also called statistical inference and inductive statistics.
POPULATION: A collection of all possible individuals, objects, or measurements of interest.
To infer something about a population, we usually take a sample from the population.
SAMPLE: A portion, or part, of the population of interest.
Why take a sample instead of studying every member of the population?
Some of the major reasons for sampling are:
The destructive nature of certain tests. For example, testing the length of life of the bulbs in factory.
The physical impossibility of checking all items in the population. The population of fish, birds, snakes, mosquitoes, and the like are large and are constantly moving, being born and dying.
The cost of studying all the items in a population is often prohibitive. For example, public opinion polls. The cost of contacting millions of voters in a country before an election is prohibitive.
The adequacy of sample results. Even if funds were available, it is not necessary to study the entire population in most problems. For example, to determine the monthly index of food prices, it is not necessary to collect prices of milk, bread etc. from all the stores of the country. Since the prices of these items do not vary much from store to store.
To contact the whole population would often be time consuming.
DEFINING A VARIABLE:
Variable: A variable is a characteristic, often but not always quantitatively measured, containing two or more values or categories that can vary from person to person, object to object or from phenomenon to phenomenon.
Examples of variables – Age, height, weight, hair color, monthly income etc.
Types of Variables: There are two basic types of data-
those obtained from a qualitative population and
those obtained from a quantitative population.
When the characteristic or variable being studied is not numeric
( numerical measurement is not possible), it is called a qualitative variable or an attribute.
Examples of qualitative variables are:
gender, (b) religious affiliation, (c) type of automobile owned, and (d) eye color.
Qualitative data are often summarized in charts and bar graphs.
When the variable studied can be reported numerically, the variable is called a quantitative variable.
Examples of quantitative variables are:
(a) the balance in your deposit account, (b) the ages of company presidents, (c) the life of a battery and (d) the number of children in a family.
Quantitative variables are either discrete or continuous.
Discrete variables can assume only certain values (isolated values), and there are usually “gaps” between the values.
Examples of discrete variables are:
the number of bed rooms in a house, (b) the number of cars at a parking place, (c) the number of students in each section of a statistics course.
Most discrete variables can assume only values 0, 1, 2, …. , but this need not be so. Size of the floppy disc (3.5//, 5.25//) is an example of a discrete variable.
Discrete variables result from counting.
A Continuous Variable can assume any value within a specific range.
Examples of continuous variables are:
Weight of grain (15.0 tons, 15.01 tons, 15.013 tons, etc.)
Time it takes to fly from Dhaka to Chittagong (1 hour, 1 hour and 15 minutes, 1 hour 20 minutes etc.)
Age of a group of people (15 years, 15 years and 6 months 15 years and 9 months etc.)
Continuous variables result from measuring something.
LEVELS OF MEASUREMENTS
Data can be classified according to levels of measurement. There are actually four levels of measurement: nominal, ordinal, interval, and ratio.
Nominal Level Data:
In the nominal level of measurement, the observations can only be classified and counted. There is no particular order to the labels.
Example:
Marital status ( Unmarried, married, divorced, separated, widowed)
Hair color (Black, Brown, Grey and others)
Gender (male, female)
Subject of specialization (Physics, Chemistry, statistics).
The categories must be mutually exclusive and exhaustive.
Mutually exclusive: A property of a set of categories such that an individual, object, or measurement is included in only one category.
Exhaustive: A property of a set of categories such that each individual, object, or measurement must appear in a category.
The nominal level data have the following properties:
Data categories are mutually exclusive and exhaustive.
Data categories have no logical order.
Ordinal Level Data:
The next higher level of data is the ordinal level. When there is an ordered relationship among the categories, the variable is said to be an ordinal variable.
Example:
HSC results: 1st division, 2nd division, 3rd division and others.
The ordinal level data have the following properties:
Data categories are mutually exclusive and exhaustive
Data classification are ranked or ordered.
Interval level data(Numerical data):
Includes all the characteristics of the ordinal level data, but in addition, the difference between values is a constant size.
Example: Temperatures of 3 consecutive days of Dhaka city:
29, 31, 20 degree Celsius.
[Can be ordered and can determine the difference between temperatures.]
Ratio Level Data:
All quantitative data are ratio level measurement. It has all the characteristics of the interval level, but in addition, the ratio between two numbers is meaningful.
Example:
It is quite meaningful to say that a 4-feet tall boy is twice as tall as a 2-feet tall boy.
A family with 6 children is twice as large as of a family with 3 children.
STA 101. Instructor: Dr. Abdus Sattar
TOPIC 2
ORGANIZATION AND PRESENTATION OF DATA
Constructing a Frequency distribution:
Frequency Distribution: A grouping of data into mutually exclusive classes showing the number of observations in each.
How do we prepare a frequency distribution?
The first step is to tally the data into a table that shows the classes (categories) and the number of observations in each category.
We will describe the steps involved by using an example:
Example: The sales price of the 80 vehicles sold last month at a show room are given below:
$23197 23372 20454 23591 26651 27453 17266
18021 28683 30872 19587 23169 35851 19251
20047 24285 24324 24609 28670 15546 15935
19873 25251 25277 28034 24533 27443 19889
20004 17357 20155 19688 23657 26613 20895
20203 23765 25783 26661 32277 20642 21981
24052 25799 15794 18263 35925 17399 17968
20356 21442 21722 19331 22817 19766 20633
20962 22845 26285 27896 29076 32492 18890
21740 22374 24571 25449 28337 20642 23613
24220 30655 22442 17891 20818 26237 20445
21556 21639 24296.
What is the typical selling price? What is the highest selling price? What is the lowest selling price?
Organize the raw or ungrouped data into a frequency distribution.
The profits (in lakh Taka) of 30 companies for the year 2002 – 2003 are given below:
20, 22, 35, 42, 37, 42, 48, 53, 49, 65, 39, 48, 67, 18, 16, 23, 37, 35, 49, 63, 65, 55, 45, 58, 57, 69, 25, 29, 58, 65.
Prepare a frequency table (frequency distribution).
Solution: We refer to the unorganized information above as raw data or ungrouped data.
The Steps for Organizing Data into a Frequency Distribution:
Step 1. We find out the lowest and the highest profits:
The Lowest: 16
The Highest: 69
The range = 69 – 16 = 53
Total Number of Observations, n = 30
Step 2. Determine the class interval or width. Generally the class interval or width should be the same for all classes.
Class interval,
-2-
Where,
i is the class interval.
In our example,
In practice this interval size is rounded up to some convenient number, such as a multiple of 5 or 10 or 100. The value of 10 will be used in our case.
Step 3. Set the Individual Class Limits.
Step 4. Tally the Profits into the Classes.
Step 5. Count the Number of Items in Each Class.
Table 1.Frequency Distribution of the Profits
Profits(in lakh taka) Tally Number of companies (Frequency)
15 – 24 5
25 – 34 2
35 – 44 7
45 – 54 6
55 – 64 5
65 – 74 6
Total 30
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Introduction to Organizational Behavior
Presented
By
Prof. Dr. M. Ekramul Hoque
Presented
By
Prof. Dr. M. Ekramul Hoque
Meaning of Organizational Behavior
Organizational behavior (often abbreviated as OB) is a field of study that investigates the impact that individuals, groups and structure have on behavior within organizations for the purpose of applying such knowledge toward improving an organization’s effectiveness. Let us break it down.
Organizational behavior is a field of study. This statement means that it is a distinct area of expertise with a common body of knowledge.
What does it study? It studies three determinants of behavior in organizations: individuals, groups and structure.
In additions, OB applies the knowledge gained about individuals, groups and the effect of structure on behavior in order to make organizations work more effectively.
Basic Concepts of Organizational Behavior
Organizational behavior starts with a set of fundamental concepts revolving around the Nature of People and the Nature of Organizations.
Concepts related to the Nature of People:
Individual differences,
perception,
a whole person,
motivated behavior,
desire for involvement, and
value of the person.
Individual Differences
People have much in common (they become excited by an achievement; they are grieved by the loss of a loved one), but each person in the world is also individually different.
Individual differences mean that management can motivate employees best by treating them differently.
If it were not for individual differences, some standard way of dealings with employee could be adopted.
Individual differences require that a manger’s approach to employees be individual not statistical.
Perception
Employees see their work worlds differently Their view of their objective environment is filtered by perception, which is the unique way in which each person sees, organizes, and interprets things.
They may differ because of difference in their personalities, needs, demographic factors, and past experiences etc.
Whatever the reasons, they tend to act on the basis of their perceptions.
Managers must learn to expect perceptual differences among their employees, accept people as emotional beings and manage them in individual ways.
A whole Person
People function as total human beings. Skill does not exist apart from background or knowledge. Home life is not totally separable from work life, and emotional conditions are not separate from physical conditions.
When management applies the principles of organizational behavior, it is trying to develop a better employee, but it also wants to develop a better person in terms of growth and fulfillment.
Employees belong to many organizations other than their employer, and they play many roles inside and outside the firm.
If the whole person can be improved, then benefits will extend beyond the firm into the larger society in which each employee lives.
Motivated Behavior
From psychology we learn that normal behavior has certain causes. These may relate to a person’s needs or the consequences that result from acts.
In the case of needs, people are motivated not by what we think they ought to have but by what they themselves want.
Motivation is essential to the operation of organizations. No matter how much technology and equipment an organization has, these resources cannot be put to use until they are released and guided by people who have been motivated.
Desire for Involvement
Many employees today are actively seeking opportunities at work to become involved in relevant decisions, thereby contributing their talents and ideas to the organization’s success. They hunger for the chance to share what they know and to learn from the experience.
Consequently, organizations need to provide opportunities for meaningful involvement. This can be achieved through employee empowerment – a practice that will result in mutual benefit for both parties.
Value of the Person
People deserve to be treated differently from other factors of production (land, capital, technology) because they are of a higher order in the universe.
Because of this distinction, they want to be treated with caring, respect and dignity.
Increasingly, they demand such treatment from their employers. They refuse to accept the old idea that they are simply economic tools.
They want to be valued for their skills and abilities and to be provided with opportunities to develop themselves.
Basic Concepts of Organizational Behavior
Concepts related to the Nature of Organizations:
Social systems,
Mutual interest, and
Ethics
Social System
Organizations are social systems; consequently, activities therein are governed by social laws as well as psychological laws.
Their behavior is influenced by their group as well as by their individual drives.
In fact, two types of social systems exist side by side in organizations: formal social system, and informal social system.
The existence of a social system implies that the organizational environment is one of dynamic change.
All parts of the system are interdependent, and each part is subject to influence by any other part.
Mutual Interest
Organization needs people, and people need organizations.
Managers need employees to help them reach organizational objectives; people need organizations to help them reach individual objectives.
If mutuality is lacking, trying to assemble a group and develop cooperation makes no sense, because there is no common base on which to build.
Mutual interest provides a superordinate goal – one that can be attained only through the integrated efforts of individuals and their employers.
Ethics
In order to attract and retain valuable employees organizations must treat employee in ethical fashion.
Ethics is the use of moral principles and values to affect the behavior of individuals and organizations with regard to choices between what is right and wrong.
More and more firms are recognizing this need and are responding with a variety of programs (codes of ethics, ethics training, role models, and handle misconduct ) to ensure a higher standard of ethical performance by mangers and employees alike.
They have begun to recognize that since organizational behavior always involves people, ethical philosophy is involved in one way or another in each action they take.
Challenges and Opportunities for OB
Responding to Globalization
Managing Workforce Diversity
Improving Quality and Productivity
Responding to the Coming Labor Shortage
Improving Customer Service
Empowering People
Stimulating Innovation and Change
Coping with “Temporariness”
Working in Networked Organizations
Working in Networked Organizations
Helping Employee Balance Work/Life Conflicts
Improving Ethical Behavior
Responding to Globalization
Globalization refers to the tendency of firms to extend their sales, ownership, and /or manufacturing to new markets abroad.
Organizations are no longer constrained by national borders. The world has become a global village. In the process, the manger’s job is changing.
Increase Foreign Assignment
Working with People from Different Cultures
Coping with Anticapitalism Backlash
Overseeing Movement of Jobs to countries with Low-Cost Labor.
Managing Workforce Diversity
One of the most important challenges currently facing organizations is adapting to workforce diversity.
While globalization focuses on differences between people from different countries, workforce diversity addresses differences among people within given countries.
Workforce diversity means the organizations are becoming a more heterogeneous mix of people in terms of gender, age, race, and ethnicity.
Managing this diversity has become a global concern. The challenge for organizations, therefore, is to make themselves more accommodating to diverse groups of people by addressing their different lifestyles, family needs, and work styles.
Implications of Workforce diversity
Managers have to shift their philosophy from treating everyone alike to recognizing differences and responding to those differences.
This shift includes, for instance, providing diversity training and revamping benefits programs to accommodate the different needs of different employees.
Diversity if managed positively can increase creativity and innovation in organizations as well as improve decision making.
When diversity is not managed properly, there is a potential for higher turnover, more-difficult communication, and more interpersonal conflicts.
Improving Quality and Productivity
Today, almost every industry suffers from excess supply.
Excess capacity translates into increased competition. And increased competition is forcing mangers to reduce cost while, at the same time, improving their organization’s productivity and the quality of the products and services they offer.
To achieve these ends, mangers are implementing programs such as quality management and process reengineering – programs that require extensive employee involvement.
Responding to the Coming Labor Shortage
US statistics shows that shortage of skilled labor will be prevalent in most of Europe including U.S.A. for about 10 to 15 years because of decline birth rate and labor participation rates particularly in USA and most of Europe.
In times of labor shortage, good wages and benefits aren’t going to be enough to get and keep skilled employee.
Managers will need sophisticated recruitment and retention strategies.
In addition, mangers will need to modify organizational practices to reflect the needs of an older workforce and consider ways to motivate younger workers who fell stuck when older colleagues don’t retire.
Improving Customer Service
Today the majority of employees in developed countries are work in service jobs. The common characteristic of these jobs is that they require substantial interaction with an organization’s customers.
OB can contribute to improving an organization’s performance by showing manger’s how employee attitudes and behavior are associated with customer satisfaction.
Management needs to create a customer-responsive culture where employees are friendly and courteous, accessible, knowledgeable, prompt in responding to customer needs, and willing to do what’s necessary to please the customer.
Empowering People
There is an increasing trend in some organizations (for example, Marriotto, W.L.Gore and National Westminster Bank) to empower employees.
They are putting employee in charge of what they do. And in so doing, mangers are having to learn how to give up control, and employees are having to learn how to take responsibility for their work and make appropriate decisions.
Empowerment is changing leadership styles, power relationships, the way work is designed, and the way organizations are structured.
Stimulating Innovation and Change
Today’s successful organizations must foster innovation and master the art of change.
Victory will go to the organizations that maintain their flexibility, continually improve their quality, and beat their competition to the marketplace with a constant stream of innovative products and services.
An organization’s employees can be the impetus for innovation and change or they can be a major stumbling block.
The challenge for mangers is to stimulate their employee’s creativity and tolerance for change.
The field of OB provides a wealth of ideas and techniques to aid in realizing these goals.
Coping with “Temporariness”
Most managers and employees today work in a climate best characterized as “temporary.”
Jobs are being continually redesigned; tasks are increasingly being done by flexible teams rather than individuals; companies are relying more on temporary workers; job are being subcontracted out to other firms; and pensions are being redesigned to move with people as they change jobs.
Workers need to update their knowledge and skills continually to perform new job requirements.
Today’s managers and employees must learn to cope with temporariness.
Working in Networked Organizations
Computerization, the Internet, and the ability to link computers within organizations and between organizations have created a different workplace for many employees – a networked organization.
It allows people to communicate and work together even though they may be thousands of miles apart. It also allows people to become independent contractors, telecommuting via computer to workplaces around the globe, and changing employers as the demand for their services change.
The manger’s job is different in a networked organization, especially when it comes to managing people. For instance, motivating and leading people and making collaborative decisions “online” requires different techniques than does dealing with individuals who are physically present in a single location.
Helping Employee Balance Work/Life Conflicts
Employees are increasingly complaining that the line between work and nonwork time has become blurred, creating personal conflicts and stress.
A number of forces have contributed to blurring the lines between employees’ work life and personal life.
This makes it increasingly difficult for married employee to find the time to fulfill commitments to home, spouse, children, parents, and friends.
Employees are increasingly recognizing that work is squeezing out personal lives, and they’re not happy about it.
Organizations that don’t help their people achieve work/life balance will find it increasingly hard to attract and retain the most capable and motivated employees.
Improving Ethical Behavior
Members of organizations are increasingly finding themselves facing ethical dilemmas, situations in which they are required to define right and wrong conduct.
For example, should they ‘blow the whistle’ if they uncover illegal activities taking place in their company? Should they follow orders with which they don’t personally agree? Do they give an inflated performance evaluation to an employee whom they like? Do they allow themselves to play politics in the organization if it helps their career advancement?
Today’s manger needs to create an ethically healthy climate for his or her employees, where they can do their work productively and confront a minimal degree to ambiguity regarding what constitutes right and wrong behaviors.
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Age-Turnover
It is found from a number of studies on age-turnover that the older you get, the less likely you are to quit your job.
As workers get older, they have fewer alternative job opportunities.
In addition, older workers are less likely to resign than are younger workers because their long tenure tends to provide them with higher wage rates, longer paid vacations, and more attractive pension benefits.
Age-Absenteeism
Most studies on age-absenteeism show an inverse relation.
But close examination finds that the age-absence relationship is partially a function of whether the absence is avoidable or unavoidable.
In general older employees have lower rates of avoidable absence than do younger employees.
However, they have higher rates of unavoidable absence, probably due to the poorer health associated with aging and the longer recovery period that older workers need when injured.
Age-Performance
There is widespread belief that productivity declines with age.
The evidence, however, contradicts that belief and those assumptions.
It is found from research that age and job performance are unrelated.
Age and Job satisfaction
Regarding the relationship between age and job satisfaction the evidence is mixed.
Most studies indicate a positive association between age and satisfaction, at least up to age 60.
Other studies, however, have found a U-shaped relationship.
Several explanations could clear up these results, the most plausible being that these studies are intermixing professional and nonprofessional employee. When the two types are separated, satisfaction tends to increase continually among professional as they age, whereas, it falls among unprofessional during middle age and then rises again in the later years.
Gender-Job Performance
Research evidence suggests that there are few, if any, important differences between men and women that will affect their job performance.
There are, for instance, no consistent male-female differences in problem-solving ability, analytical skills, competitive drive motivation, sociability, or learning ability.
Psychological studies have found that women are more willing to conform to authority and that man are aggressive and more likely than women to have expectations of success, but those differences are minor.
You should operate on the assumption that there is no significant difference in job productivity between men and women.
Gender-Turnover-Absenteeism
With regard to turnover the evidence indicates no significant differences.
Women’s quit rates are similar to those for men.
The research on absence, however, consistently indicates that women have higher rates of absenteeism than men do.
Tenure-productivity
Extensive reviews of the seniority-productivity relationship have been conducted.
If we define seniority as time on a particular job, we can say that the most recent evidence demonstrates a positive relationship between seniority and job productivity.
So tenure, expressed as work experience, appears to be a good predictor of employee productivity.
Tenure-absenteeism-turnover- Job satisfaction
Studies consistently demonstrate seniority to be negatively related to absenteeism.
Tenure is also a potent variable in explaining turnover. The longer a person is in a job, the less likely he or she is to quit.
The evidence indicates that tenure and satisfaction are positively related.
In fact, when age and tenure are treated separately, tenure appears to be more consistent and stable predictor of job satisfaction than is chronological age.
Ability
Ability refers to an individual’s capacity to perform the various tasks in a job.
It is a current assessment of what one can do.
An individual’s overall abilities are essentially made up of two sets of factors:
Intellectual and
physical.
Intellectual Abilities
Intellectual abilities are those needed to perform mental activities – for thinking, reasoning, and problem solving.
Intelligence quotient (IQ) test, for example, are designed to ascertain one’s general intelligence.
The seven most frequently cited dimensions making up intellectual abilities are number aptitude, verbal comprehension, perceptual speed, inductive reasoning, deductive reasoning, spatial visualization, and memory.
Number aptitude is the ability to do speedy and accurate arithmetic.
Verbal comprehension is the ability to understand what is read or heard and the relationship of words to each other.
Perceptual speed is the ability to identify visual similarities and differences quickly and accurately.
Inductive reasoning is the ability to identify a logical sequence in a problem and then solve the problem.
Deductive reasoning is the ability to use logic and assess the implication of an argument.
Spatial visualization is the ability to imagine how an object would look if its position in space were changed.
Memory is the ability to retain and recall past experiences.
Multiple Intelligence
The most recent evidence suggests that intelligence can be better understood by breaking it down into four subparts:
Cognitive intelligence encompasses the aptitudes that have long been tapped by traditional intelligence tests.
Social intelligence is a person’s ability to relate effectively to others.
Emotional intelligence is the ability to identify, understand, and mange emotions.
Cultural intelligence is awareness of cross-cultural differences and the ability to function successfully in cross-cultural situations.
Nine Basic Physical Abilities
Physical abilities gain importance for doing less-skilled ad more-standardized jobs successfully.
It can be categories into nine basic physical abilities:
Dynamic strength: Ability to exert muscular force repeatedly or continuously over time.
Trunk strength: Ability to exert muscular strength using the trunk (particularly abdominal) muscles.
Static strength: Ability to exert force against external objects.
Explosive strength: ability to expend a maximum of energy in one or a series of explosive acts.
Extent flexibility: Ability to move the trunk and back muscles as for as possible.
Dynamic Flexibility: Ability to make rapid, repeated flexible movement.
Body coordination: Ability to coordinate the simultaneous actions of different parts of the body.
Balance: Ability to maintain equilibrium despite forces pulling off balance.
Stamina: Ability to continue maximum effort requiring prolonged effort over time.
Learning
Learning is any relatively permanent change in behavior that occurs as a result of experience.
First, learning involves change.
Second, the change must be relatively permanent.
Third, our definition is concerned with behavior. Learning takes place when there is a change in actions. A change in an individual’s thought process or attitudes, if not accompanied by change in behavior, would not be learning.
Finally some form of experience is necessary for learning. Experience may be acquired directly through observation or practice, or it may be acquired indirectly through reading.
Theories of Learning
Classical Conditioning: Classical conditioning grew out of experiments to teach dogs to salivate in response to the ringing of a bell, conducted in the early-1900s by Russian psychologist Ivan Pavlov.
Classical conditioning is a type of conditioning in which an individual responds to some stimulus that would not ordinarily produce such a response.
In an organizational setting, we can also see classical conditioning operating.
Operant Conditioning: Operant conditioning argues that behavior is a function of its consequences.
People learn to behave to get something they want or to avoid something they don’t want.
Operant behavior means voluntary or learned behavior in contrast to reflexive or unlearned behavior. The tendency to repeat such behavior in influenced by the reinforcement or lack of reinforcement brought about by the consequences of the behavior. Therefore, reinforcement strengthens a behavior and increases the likelihood that it will be repeated.
Harvard psychologist B.F. Skinner argued that creating pleasing consequences to follow specific forms of behavior would increase the frequency of that behavior.
Social Learning
Social Learning: Individuals can also learn by observing what happens to other people and just by being told about something, as well as by direct experiences.
So, for example, much of what we have learned comes from watching models – parents, teachers, peers, motion picture and television performers, bosses, and so forth.
This view that we can learn through both observation and direct experience is called social learning theory.
The influence of models is central to the social learning viewpoint.
Four processes have been found to determine the influence that a model will have on an individual.
Attention process: People learn from a model only when they recognize and pay attention to its critical features.
Retention Processes: A model’s influence will depend on how well the individual remembers the model’s action after the model is no longer readily available.
Motor reproduction processes: After a person has seen a new behavior by observing the model, the watching must be converted to doing.
Reinforcement process: Individuals will be motivated to exhibit the modeled behavior if positive incentives or rewards are provided.
Shaping Behavior
When we attempt to mold individuals by guiding their learning in graduated steps, we are shaping behavior.
We shape behavior by systematically reinforcing each successive step that moves the individual closer to the desired response.
Methods of Shaping Behavior
Positive reinforcement: Following a response with some pleasant is called positive reinforcement.
Negative reinforcement: Following a response by terminating or withdrawal of something unpleasant is called negative reinforcement.
Punishment: punishment is causing an unpleasant condition in an attempt to eliminate an undesirable behavior.
Extinction: Eliminating any reinforcement that is maintaining a behavior is called extinction.
Both positive and negative reinforcement result in learning. They strengthen a response and increase the probability of repetition.
Behavior Modification
Behavior modification popularly known as OB Mod represents the application of reinforcement concepts to individuals in work setting. It involves five-step problem-solving model:
Identifying critical behaviors: The first step in OB Mod is to identify the critical behaviors that make a significant impact on the employee’s job performance.
The second step requires the manager to develop some baseline performance data. This is obtained by determining the number of times the identified behavior is occurring under present conditions.
The third step is to perform a functional analysis to identify the behavioral contingencies or consequences of performance. This tells the manger the antecedent cues that emit the behavioral and the consequences that are currently maintaining it.
Once the functional analysis is complete, the manger is ready to develop and implement an intervention strategy to strengthen desirable performance behaviors and weaken undesirable behaviors. The appropriate strategy will entail changing some elements of the performance-reward linkage – structure, process, technology, groups, or the task – with the goal of making high-level performance more rewarding.
The final step in OB Mod is to evaluate performance improvement.
Implications for Management
The most important conclusions we can draw after our review of the evidence are that age seems to have no relationship to productivity, older workers and those with longer tenure are less likely to resign, and there is no significant difference in job productivity and turnover rate between men and women. The research on absence, however, consistently indicates that women have higher rates of absenteeism than men do.
Ability directly influences an employee’s level of performance and satisfaction through the ability-job fit. Given management’s desire to get a compatible fit, what can be done?
First, an effective selection process will improve the fit. A job analysis will provide information about jobs currently being done and the abilities that individuals need to perform the jobs adequately. Applicants can then be tested, interviewed and evaluated on the degree to which they possess the necessary abilities.
Second, promotion and transfer decisions affecting individuals already in the organization’s employ should reflect the abilities of candidates. As with new employees, care should be taken to assess critical abilities that incumbents will need in the job and to match those requirements with the organization’s human resources.
Third, the fit can be improved by fine-tuning the job to better match an incumbent’s abilities. Often, modification’s can be made in the job that, while not having a significant impact on the job’s basic activities, better adapts it to the specific talents of a given employee. Examples would be to change some of the equipment used or to reorganize tasks within a group of employees.
A final alternative is to provide training for employees. This is applicable to both new workers and job incumbents. Training can keep the abilities of incumbents current or provide new skills as times and conditions change.
Any observable change in behavior is prima facie evidence that learning has taken place.
We found that positive reinforcement is a powerful tool for modifying behavior. By identifying and rewarding performance-enhancing behaviors, management increases the likelihood that they will be repeated.
Our knowledge about learning further suggests that reinforcement is a more effective tool than punishment.
Although punishment eliminates undesired behavior more quickly than negative reinforcement does, punished behavior tends to be only temporarily suppressed rather than permanently changed.
And punishment may produce unpleasant side effects such as lower morale and higher absenteeism or turnover. In addition, the recipients of punishment tend to become resentful of the punisher. Managers, therefore, are advised to use reinforcement rather than punishment.
Managers should also expect that employees will look to them as models. Mangers who are constantly late to work, or take two hours for lunch, or help themselves to company office supplies for personal use should expect employees to read the message they are sending and model their behavior accordingly.
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A single value that summarizes a set of data.
The following are the important measures of central location:
The Arithmetic Mean
The Median
The Mode
The Geometric Mean
The Harmonic Mean
The Arithmetic Mean
THE POPULATION MEAN:
Many studies involve all the values in a population. For ungrouped data,
the population mean, where, N=Number of items in the population
= sum of the X values.
Example: There are 30 companies in the city of Dhaka. Their profits (in lakh taka) in the year 2001-2002 are given below:
MEASURES OF CENTRAL TENDENCY
A single value that summarizes a set of data.
The following are the important measures of central location:
The Arithmetic Mean
The Median
The Mode
The Geometric Mean
The Harmonic Mean
Parameter: A characteristic of a population.
THE SAMPLE MEAN:
Frequently we select a sample from the population in order to find something about a specific characteristic of the population. It may be expensive and time consuming to collect data from all the companies under consideration. Therefore, a sample of 5 companies might be selected and the mean of five companies calculated in order to estimate the mean income of all the companies.
The mean of a sample and the mean of a population are computed in the same way.
The formula for the mean of a sample is:
Sample Mean, Where,
n= sample size.
Example: From our previous example, we take sample of 5 companies as below:
65, 22, 48, 55, 29.
Find the average income of the companies from the sample data
20, 22, 35, 42, 37, 42, 48, 53, 49, 65, 39, 48, 67, 18, 16, 23, 37, 35, 49, 63, 65, 55, 45, 58, 57, 69, 25, 29, 58, 65.
What is the average profit of the companies?
Statistic: A characteristic of a sample.
Arithmetic Mean for Grouped Data:
Quite often data on incomes, ages, and so on are grouped and presented in the form of a frequency distribution.
The mean of a sample of data organized in a frequency distribution is computed by the following formula:
Arithmetic Mean of Grouped data
Example:
We organize the raw data from our previous example and present in the form of a frequency distribution ( We consider the data as sample):
The Properties of the Arithmetic Mean:
The arithmetic mean is a widely used measure of the central location. It has several important properties:
Every set of interval-level data has a mean.
All the values are included in computing the mean.
A set of data has only one mean. The mean is unique.
The mean is a useful measure for comparing two or more populations.
The arithmetic mean is the only measure of central tendency where the sum of the deviations of each value from the mean will always be zero.
Expressed symbolically,
The arithmetic mean has some disadvantages.
The mean uses the value of every item in a sample, or population, in its computations. If one or two of these values are either extremely large or extremely small, the mean might not be an appropriate average to represent the data.
Example: suppose the annual profits of a small group of companies are
( in taka): 62900, 61600, 62500, 60800, and 1.2 million.
The mean profit is 289560 taka. Obviously, it is not representative of this group, because all but one company has a profit in the 60000 to 63000 taka range. One profit 1.2 million taka is unduly affecting the mean.
The mean is also inappropriate if there is an open-ended class for data tallied into a frequency distribution.
THE MEDIAN:
For data containing one or two very large or very small values, the arithmetic mean may not be representative. The centre point of such data can be better described using a measure of central tendency called the median.
Median: The midpoint of the values after they have been ordered from the smallest to the largest, or the largest to the smallest. Fifty percent of the observations are above the median and fifty percent below the median.
Median for ungrouped data:
When n is an odd number,
Order the values in an ascending or descending manner.
Example: Find the median of the following values:
11, 9, 13, 4, 7
Solution: First we array the data in an ascending order as follows:
4, 7, 9, 11, 13
Median = Arithmetic mean of
Example: Find the median of the following values: 11, 9, 13, 4, 7,15
Solution: First we array the data in an ascending order as follows: 4, 7, 9, 11, 13,15
Median = Arithmetic mean of
= Arithmetic mean of
The major properties of the median are:
The median is unique; that is like the mean, there is only one median for a set of data.
It is not affected by extremely large or small values and is therefore a valuable measure of central tendency when such values do occur.
It can be computed for a frequency distribution with an open-ended class if the median does not lie in an open-ended class.
It can be computed for ratio-level, interval-level, and ordinal-level data. Suppose five people rated the service of a commercial bank as follows: excellent, very good, good, fair and poor. The median response is "good". Half the responses are above "good"; and other half are below
MEDIAN FOR GROUPED DATA
EXAMPLE: VEHICLE SELLING PRICES.
THE MODE
Mode - The value of the observation that appears most frequently.
The mode is especially useful in describing nominal and ordinal levels of measurements. We can determine the mode for all levels of data - nominal, ordinal, interval, and ratio.
The mode also has the advantage of not being affected by extremely high or low values. Like the median, it can be used as a measure of central tendency for distributions with open-ended classes.
The mode does have a number of disadvantages: For many sets of data, there is no mode because no value appears more than once. For example, there is no mode for this set of price data: tk.19, tk.21, tk.23, tk.20, and tk.18.
For some data sets there is more than one mode. Suppose the ages of a group of people are 22, 27, 26, 27, 31, 35, and 35. Both the ages 27 and 35 are modes. This grouping of ages is referred to as bimodal (having two modes).
Mode for grouped data:
The mode is defined as the value that occurs most often. For data grouped into a frequency distribution, the mode can be approximated by the midpoint of the class containing the largest number of class frequencies.
Example: Done on the board.
Self-Review: 3 - 3. Page - 75. Exercises: 16, 17, 18, 20. Page-75.
Self - Review 3 - 5 Page - 81.Exercises: 30, 31, 32,33,34. Page 82
Self - Review - 3 - 6. Page - 85.
Exercises: 43, 45, 51, 52, 61, 63 Pages: 90 - 94.
THE GEOMETRIC MEAN
The geometric mean is useful in finding the average of percentages, ratios, indexes, or growth rates. It has a wide application in business and economics because we are often interested in finding the percentage changes in sales, salaries, or economic figures, such as the Gross National Product.
The geometric mean of a set of n positive numbers is defined as the nth root of the product of n values.
The formula is:
The geometric mean profit is 3.46 percent.
A second application of the geometric mean is to find average percent increase over a period of time.
The formula is: [ From the board.]
Example: The population of a small village in 1990 was 2 persons, by 2000 it was 22. What is the average annual rate of percentage increase during the period?
Solution: Done on the board.
Self - Review: 3 - 4. Page - 79. Exercises: 21, 23, 25, 27.Page - 79.
POSITIONAL MEASURES OF LOCATION
There are measures of location that divide a set of observations into equal parts. These measures include quartiles, deciles, and percentiles.
Quartiles divide a set of observations into four equal parts. We call the middle value of a set of data arranged from smallest to largest the median. That is, 50 percent of the observations are larger than the median and 50 percent are smaller. The median is a measure of location because it pinpoints the center of the data.
In a similar fashion quartiles divide a set of observations into four equal parts. The first quartile, usually labeled Q1, is the value below which 25 percent of the observations occur and the third quartile, usually labeled Q3, is the value below which 75 percent of the observations occur. Q2 is the median. The values corresponding to Q1, Q2, and Q3 divide a set of data into four equal parts.
In a similar fashion deciles divide a set of observations into 10 equal parts and percentiles into 100 equal parts.
Computational Procedure:
Let Lp refer to the location of a desired percentile. So if we wanted to find the 33rd percentile we would use L33 and if we wanted the median, the 50th percentile, then L50 .
The number of observation is n, so if we want to locate the middle observation, its position is at (n+1)/2, or we could write this as
(n+1)(P/100), where P is the desired percentile.
LOCATION OF A PERCENTILE,
Example:
Listed below are the commissions earned last month by a sample of 15 brokers:
Locate the first quartile and the third quartile for the commissioned earned.
Solution: The first step is to organize the data from the smallest to the largest.
(in $): 1460, 1471, 1637, 1721, 1758, 1787, 1940, 2038, 2047, 2054, 2097, 2205, 2287, 2311, 2406.
Quartiles divide a set of observations into four equal parts. Hence 25 percent of the observations will be less than the first quartile (Q1 ).
75 percent of the observations will be less than the third quartile (Q3 ).
To locate the first quartile, we use the above formula, where n = 15 and P = 25:
and to locate the third quartile, n = 15 and P = 75:
The fourth value in the ordered array is $1,721 and the twelfth is $2,205. Q1 = $1,721 and Q3 = $2,205.
Example: Suppose a data set contained the six values: 91, 75, 61, 101, 43, and 104.
Locate the first quartile.
Solution: We order the values from the smallest to the largest:
43, 61, 75, 91, 101, 104.
The first quartile is located at
The position formula tells us that first quartile is located between the first and the second value and that it is .75 of the distance between the first and the second values.
The first value is 43 and the second is 61. So the distance (61-43) between these two values is 18. To locate the first quartile, we need to move .75 of the distance between the first and second values, so .75(18) = 13.5. We add 13.5 to the first value and the first quartile is: 43 + 13.5 = 56.
Self - Review: 4 - 8. Page - 124. Exercises: 35 - 38 Page-124.5.
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Organizational behavior (often abbreviated as OB) is a field of study that investigates the impact that individuals, groups and structure have on behavior within organizations for the purpose of applying such knowledge toward improving an organization’s effectiveness. Let us break it down.
Organizational behavior is a field of study. This statement means that it is a distinct area of expertise with a common body of knowledge.
What does it study? It studies three determinants of behavior in organizations: individuals, groups and structure.
In additions, OB applies the knowledge gained about individuals, groups and the effect of structure on behavior in order to make organizations work more effectively.
Basic Concepts of Organizational Behavior
Organizational behavior starts with a set of fundamental concepts revolving around the Nature of People and the Nature of Organizations.
Concepts related to the Nature of People:
Individual differences,
perception,
a whole person,
motivated behavior,
desire for involvement, and
value of the person.
Individual Differences
People have much in common (they become excited by an achievement; they are grieved by the loss of a loved one), but each person in the world is also individually different.
Individual differences mean that management can motivate employees best by treating them differently.
If it were not for individual differences, some standard way of dealings with employee could be adopted.
Individual differences require that a manger’s approach to employees be individual not statistical.
Perception
Employees see their work worlds differently Their view of their objective environment is filtered by perception, which is the unique way in which each person sees, organizes, and interprets things.
They may differ because of difference in their personalities, needs, demographic factors, and past experiences etc.
Whatever the reasons, they tend to act on the basis of their perceptions.
Managers must learn to expect perceptual differences among their employees, accept people as emotional beings and manage them in individual ways.
A whole Person
People function as total human beings. Skill does not exist apart from background or knowledge. Home life is not totally separable from work life, and emotional conditions are not separate from physical conditions.
When management applies the principles of organizational behavior, it is trying to develop a better employee, but it also wants to develop a better person in terms of growth and fulfillment.
Employees belong to many organizations other than their employer, and they play many roles inside and outside the firm.
If the whole person can be improved, then benefits will extend beyond the firm into the larger society in which each employee lives.
Motivated Behavior
From psychology we learn that normal behavior has certain causes. These may relate to a person’s needs or the consequences that result from acts.
In the case of needs, people are motivated not by what we think they ought to have but by what they themselves want.
Motivation is essential to the operation of organizations. No matter how much technology and equipment an organization has, these resources cannot be put to use until they are released and guided by people who have been motivated.
Desire for Involvement
Many employees today are actively seeking opportunities at work to become involved in relevant decisions, thereby contributing their talents and ideas to the organization’s success. They hunger for the chance to share what they know and to learn from the experience.
Consequently, organizations need to provide opportunities for meaningful involvement. This can be achieved through employee empowerment – a practice that will result in mutual benefit for both parties.
Value of the Person
People deserve to be treated differently from other factors of production (land, capital, technology) because they are of a higher order in the universe.
Because of this distinction, they want to be treated with caring, respect and dignity.
Increasingly, they demand such treatment from their employers. They refuse to accept the old idea that they are simply economic tools.
They want to be valued for their skills and abilities and to be provided with opportunities to develop themselves.
Basic Concepts of Organizational Behavior
Concepts related to the Nature of Organizations:
Social systems,
Mutual interest, and
Ethics
Social System
Organizations are social systems; consequently, activities therein are governed by social laws as well as psychological laws.
Their behavior is influenced by their group as well as by their individual drives.
In fact, two types of social systems exist side by side in organizations: formal social system, and informal social system.
The existence of a social system implies that the organizational environment is one of dynamic change.
All parts of the system are interdependent, and each part is subject to influence by any other part.
Mutual Interest
Organization needs people, and people need organizations.
Managers need employees to help them reach organizational objectives; people need organizations to help them reach individual objectives.
If mutuality is lacking, trying to assemble a group and develop cooperation makes no sense, because there is no common base on which to build.
Mutual interest provides a superordinate goal – one that can be attained only through the integrated efforts of individuals and their employers.
Ethics
In order to attract and retain valuable employees organizations must treat employee in ethical fashion.
Ethics is the use of moral principles and values to affect the behavior of individuals and organizations with regard to choices between what is right and wrong.
More and more firms are recognizing this need and are responding with a variety of programs (codes of ethics, ethics training, role models, and handle misconduct ) to ensure a higher standard of ethical performance by mangers and employees alike.
They have begun to recognize that since organizational behavior always involves people, ethical philosophy is involved in one way or another in each action they take.
Challenges and Opportunities for OB
Responding to Globalization
Managing Workforce Diversity
Improving Quality and Productivity
Responding to the Coming Labor Shortage
Improving Customer Service
Empowering People
Stimulating Innovation and Change
Coping with “Temporariness”
Working in Networked Organizations
Working in Networked Organizations
Helping Employee Balance Work/Life Conflicts
Improving Ethical Behavior
Responding to Globalization
Globalization refers to the tendency of firms to extend their sales, ownership, and /or manufacturing to new markets abroad.
Organizations are no longer constrained by national borders. The world has become a global village. In the process, the manger’s job is changing.
Increase Foreign Assignment
Working with People from Different Cultures
Coping with Anticapitalism Backlash
Overseeing Movement of Jobs to countries with Low-Cost Labor.
Managing Workforce Diversity
One of the most important challenges currently facing organizations is adapting to workforce diversity.
While globalization focuses on differences between people from different countries, workforce diversity addresses differences among people within given countries.
Workforce diversity means the organizations are becoming a more heterogeneous mix of people in terms of gender, age, race, and ethnicity.
Managing this diversity has become a global concern. The challenge for organizations, therefore, is to make themselves more accommodating to diverse groups of people by addressing their different lifestyles, family needs, and work styles.
Implications of Workforce diversity
Managers have to shift their philosophy from treating everyone alike to recognizing differences and responding to those differences.
This shift includes, for instance, providing diversity training and revamping benefits programs to accommodate the different needs of different employees.
Diversity if managed positively can increase creativity and innovation in organizations as well as improve decision making.
When diversity is not managed properly, there is a potential for higher turnover, more-difficult communication, and more interpersonal conflicts.
Improving Quality and Productivity
Today, almost every industry suffers from excess supply.
Excess capacity translates into increased competition. And increased competition is forcing mangers to reduce cost while, at the same time, improving their organization’s productivity and the quality of the products and services they offer.
To achieve these ends, mangers are implementing programs such as quality management and process reengineering – programs that require extensive employee involvement.
Responding to the Coming Labor Shortage
US statistics shows that shortage of skilled labor will be prevalent in most of Europe including U.S.A. for about 10 to 15 years because of decline birth rate and labor participation rates particularly in USA and most of Europe.
In times of labor shortage, good wages and benefits aren’t going to be enough to get and keep skilled employee.
Managers will need sophisticated recruitment and retention strategies.
In addition, mangers will need to modify organizational practices to reflect the needs of an older workforce and consider ways to motivate younger workers who fell stuck when older colleagues don’t retire.
Improving Customer Service
Today the majority of employees in developed countries are work in service jobs. The common characteristic of these jobs is that they require substantial interaction with an organization’s customers.
OB can contribute to improving an organization’s performance by showing manger’s how employee attitudes and behavior are associated with customer satisfaction.
Management needs to create a customer-responsive culture where employees are friendly and courteous, accessible, knowledgeable, prompt in responding to customer needs, and willing to do what’s necessary to please the customer.
Empowering People
There is an increasing trend in some organizations (for example, Marriotto, W.L.Gore and National Westminster Bank) to empower employees.
They are putting employee in charge of what they do. And in so doing, mangers are having to learn how to give up control, and employees are having to learn how to take responsibility for their work and make appropriate decisions.
Empowerment is changing leadership styles, power relationships, the way work is designed, and the way organizations are structured.
Stimulating Innovation and Change
Today’s successful organizations must foster innovation and master the art of change.
Victory will go to the organizations that maintain their flexibility, continually improve their quality, and beat their competition to the marketplace with a constant stream of innovative products and services.
An organization’s employees can be the impetus for innovation and change or they can be a major stumbling block.
The challenge for mangers is to stimulate their employee’s creativity and tolerance for change.
The field of OB provides a wealth of ideas and techniques to aid in realizing these goals.
Coping with “Temporariness”
Most managers and employees today work in a climate best characterized as “temporary.”
Jobs are being continually redesigned; tasks are increasingly being done by flexible teams rather than individuals; companies are relying more on temporary workers; job are being subcontracted out to other firms; and pensions are being redesigned to move with people as they change jobs.
Workers need to update their knowledge and skills continually to perform new job requirements.
Today’s managers and employees must learn to cope with temporariness.
Working in Networked Organizations
Computerization, the Internet, and the ability to link computers within organizations and between organizations have created a different workplace for many employees – a networked organization.
It allows people to communicate and work together even though they may be thousands of miles apart. It also allows people to become independent contractors, telecommuting via computer to workplaces around the globe, and changing employers as the demand for their services change.
The manger’s job is different in a networked organization, especially when it comes to managing people. For instance, motivating and leading people and making collaborative decisions “online” requires different techniques than does dealing with individuals who are physically present in a single location.
Helping Employee Balance Work/Life Conflicts
Employees are increasingly complaining that the line between work and nonwork time has become blurred, creating personal conflicts and stress.
A number of forces have contributed to blurring the lines between employees’ work life and personal life.
This makes it increasingly difficult for married employee to find the time to fulfill commitments to home, spouse, children, parents, and friends.
Employees are increasingly recognizing that work is squeezing out personal lives, and they’re not happy about it.
Organizations that don’t help their people achieve work/life balance will find it increasingly hard to attract and retain the most capable and motivated employees.
Improving Ethical Behavior
Members of organizations are increasingly finding themselves facing ethical dilemmas, situations in which they are required to define right and wrong conduct.
For example, should they ‘blow the whistle’ if they uncover illegal activities taking place in their company? Should they follow orders with which they don’t personally agree? Do they give an inflated performance evaluation to an employee whom they like? Do they allow themselves to play politics in the organization if it helps their career advancement?
Today’s manger needs to create an ethically healthy climate for his or her employees, where they can do their work productively and confront a minimal degree to ambiguity regarding what constitutes right and wrong behaviors.
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FOUNDATION OF INDIVIDUAL BEHAVIOUR
Age-Turnover
It is found from a number of studies on age-turnover that the older you get, the less likely you are to quit your job.
As workers get older, they have fewer alternative job opportunities.
In addition, older workers are less likely to resign than are younger workers because their long tenure tends to provide them with higher wage rates, longer paid vacations, and more attractive pension benefits.
Age-Absenteeism
Most studies on age-absenteeism show an inverse relation.
But close examination finds that the age-absence relationship is partially a function of whether the absence is avoidable or unavoidable.
In general older employees have lower rates of avoidable absence than do younger employees.
However, they have higher rates of unavoidable absence, probably due to the poorer health associated with aging and the longer recovery period that older workers need when injured.
Age-Performance
There is widespread belief that productivity declines with age.
The evidence, however, contradicts that belief and those assumptions.
It is found from research that age and job performance are unrelated.
Age and Job satisfaction
Regarding the relationship between age and job satisfaction the evidence is mixed.
Most studies indicate a positive association between age and satisfaction, at least up to age 60.
Other studies, however, have found a U-shaped relationship.
Several explanations could clear up these results, the most plausible being that these studies are intermixing professional and nonprofessional employee. When the two types are separated, satisfaction tends to increase continually among professional as they age, whereas, it falls among unprofessional during middle age and then rises again in the later years.
Gender-Job Performance
Research evidence suggests that there are few, if any, important differences between men and women that will affect their job performance.
There are, for instance, no consistent male-female differences in problem-solving ability, analytical skills, competitive drive motivation, sociability, or learning ability.
Psychological studies have found that women are more willing to conform to authority and that man are aggressive and more likely than women to have expectations of success, but those differences are minor.
You should operate on the assumption that there is no significant difference in job productivity between men and women.
Gender-Turnover-Absenteeism
With regard to turnover the evidence indicates no significant differences.
Women’s quit rates are similar to those for men.
The research on absence, however, consistently indicates that women have higher rates of absenteeism than men do.
Tenure-productivity
Extensive reviews of the seniority-productivity relationship have been conducted.
If we define seniority as time on a particular job, we can say that the most recent evidence demonstrates a positive relationship between seniority and job productivity.
So tenure, expressed as work experience, appears to be a good predictor of employee productivity.
Tenure-absenteeism-turnover- Job satisfaction
Studies consistently demonstrate seniority to be negatively related to absenteeism.
Tenure is also a potent variable in explaining turnover. The longer a person is in a job, the less likely he or she is to quit.
The evidence indicates that tenure and satisfaction are positively related.
In fact, when age and tenure are treated separately, tenure appears to be more consistent and stable predictor of job satisfaction than is chronological age.
Ability
Ability refers to an individual’s capacity to perform the various tasks in a job.
It is a current assessment of what one can do.
An individual’s overall abilities are essentially made up of two sets of factors:
Intellectual and
physical.
Intellectual Abilities
Intellectual abilities are those needed to perform mental activities – for thinking, reasoning, and problem solving.
Intelligence quotient (IQ) test, for example, are designed to ascertain one’s general intelligence.
The seven most frequently cited dimensions making up intellectual abilities are number aptitude, verbal comprehension, perceptual speed, inductive reasoning, deductive reasoning, spatial visualization, and memory.
Number aptitude is the ability to do speedy and accurate arithmetic.
Verbal comprehension is the ability to understand what is read or heard and the relationship of words to each other.
Perceptual speed is the ability to identify visual similarities and differences quickly and accurately.
Inductive reasoning is the ability to identify a logical sequence in a problem and then solve the problem.
Deductive reasoning is the ability to use logic and assess the implication of an argument.
Spatial visualization is the ability to imagine how an object would look if its position in space were changed.
Memory is the ability to retain and recall past experiences.
Multiple Intelligence
The most recent evidence suggests that intelligence can be better understood by breaking it down into four subparts:
Cognitive intelligence encompasses the aptitudes that have long been tapped by traditional intelligence tests.
Social intelligence is a person’s ability to relate effectively to others.
Emotional intelligence is the ability to identify, understand, and mange emotions.
Cultural intelligence is awareness of cross-cultural differences and the ability to function successfully in cross-cultural situations.
Nine Basic Physical Abilities
Physical abilities gain importance for doing less-skilled ad more-standardized jobs successfully.
It can be categories into nine basic physical abilities:
Dynamic strength: Ability to exert muscular force repeatedly or continuously over time.
Trunk strength: Ability to exert muscular strength using the trunk (particularly abdominal) muscles.
Static strength: Ability to exert force against external objects.
Explosive strength: ability to expend a maximum of energy in one or a series of explosive acts.
Extent flexibility: Ability to move the trunk and back muscles as for as possible.
Dynamic Flexibility: Ability to make rapid, repeated flexible movement.
Body coordination: Ability to coordinate the simultaneous actions of different parts of the body.
Balance: Ability to maintain equilibrium despite forces pulling off balance.
Stamina: Ability to continue maximum effort requiring prolonged effort over time.
Learning
Learning is any relatively permanent change in behavior that occurs as a result of experience.
First, learning involves change.
Second, the change must be relatively permanent.
Third, our definition is concerned with behavior. Learning takes place when there is a change in actions. A change in an individual’s thought process or attitudes, if not accompanied by change in behavior, would not be learning.
Finally some form of experience is necessary for learning. Experience may be acquired directly through observation or practice, or it may be acquired indirectly through reading.
Theories of Learning
Classical Conditioning: Classical conditioning grew out of experiments to teach dogs to salivate in response to the ringing of a bell, conducted in the early-1900s by Russian psychologist Ivan Pavlov.
Classical conditioning is a type of conditioning in which an individual responds to some stimulus that would not ordinarily produce such a response.
In an organizational setting, we can also see classical conditioning operating.
Operant Conditioning: Operant conditioning argues that behavior is a function of its consequences.
People learn to behave to get something they want or to avoid something they don’t want.
Operant behavior means voluntary or learned behavior in contrast to reflexive or unlearned behavior. The tendency to repeat such behavior in influenced by the reinforcement or lack of reinforcement brought about by the consequences of the behavior. Therefore, reinforcement strengthens a behavior and increases the likelihood that it will be repeated.
Harvard psychologist B.F. Skinner argued that creating pleasing consequences to follow specific forms of behavior would increase the frequency of that behavior.
Social Learning
Social Learning: Individuals can also learn by observing what happens to other people and just by being told about something, as well as by direct experiences.
So, for example, much of what we have learned comes from watching models – parents, teachers, peers, motion picture and television performers, bosses, and so forth.
This view that we can learn through both observation and direct experience is called social learning theory.
The influence of models is central to the social learning viewpoint.
Four processes have been found to determine the influence that a model will have on an individual.
Attention process: People learn from a model only when they recognize and pay attention to its critical features.
Retention Processes: A model’s influence will depend on how well the individual remembers the model’s action after the model is no longer readily available.
Motor reproduction processes: After a person has seen a new behavior by observing the model, the watching must be converted to doing.
Reinforcement process: Individuals will be motivated to exhibit the modeled behavior if positive incentives or rewards are provided.
Shaping Behavior
When we attempt to mold individuals by guiding their learning in graduated steps, we are shaping behavior.
We shape behavior by systematically reinforcing each successive step that moves the individual closer to the desired response.
Methods of Shaping Behavior
Positive reinforcement: Following a response with some pleasant is called positive reinforcement.
Negative reinforcement: Following a response by terminating or withdrawal of something unpleasant is called negative reinforcement.
Punishment: punishment is causing an unpleasant condition in an attempt to eliminate an undesirable behavior.
Extinction: Eliminating any reinforcement that is maintaining a behavior is called extinction.
Both positive and negative reinforcement result in learning. They strengthen a response and increase the probability of repetition.
Behavior Modification
Behavior modification popularly known as OB Mod represents the application of reinforcement concepts to individuals in work setting. It involves five-step problem-solving model:
Identifying critical behaviors: The first step in OB Mod is to identify the critical behaviors that make a significant impact on the employee’s job performance.
The second step requires the manager to develop some baseline performance data. This is obtained by determining the number of times the identified behavior is occurring under present conditions.
The third step is to perform a functional analysis to identify the behavioral contingencies or consequences of performance. This tells the manger the antecedent cues that emit the behavioral and the consequences that are currently maintaining it.
Once the functional analysis is complete, the manger is ready to develop and implement an intervention strategy to strengthen desirable performance behaviors and weaken undesirable behaviors. The appropriate strategy will entail changing some elements of the performance-reward linkage – structure, process, technology, groups, or the task – with the goal of making high-level performance more rewarding.
The final step in OB Mod is to evaluate performance improvement.
Implications for Management
The most important conclusions we can draw after our review of the evidence are that age seems to have no relationship to productivity, older workers and those with longer tenure are less likely to resign, and there is no significant difference in job productivity and turnover rate between men and women. The research on absence, however, consistently indicates that women have higher rates of absenteeism than men do.
Ability directly influences an employee’s level of performance and satisfaction through the ability-job fit. Given management’s desire to get a compatible fit, what can be done?
First, an effective selection process will improve the fit. A job analysis will provide information about jobs currently being done and the abilities that individuals need to perform the jobs adequately. Applicants can then be tested, interviewed and evaluated on the degree to which they possess the necessary abilities.
Second, promotion and transfer decisions affecting individuals already in the organization’s employ should reflect the abilities of candidates. As with new employees, care should be taken to assess critical abilities that incumbents will need in the job and to match those requirements with the organization’s human resources.
Third, the fit can be improved by fine-tuning the job to better match an incumbent’s abilities. Often, modification’s can be made in the job that, while not having a significant impact on the job’s basic activities, better adapts it to the specific talents of a given employee. Examples would be to change some of the equipment used or to reorganize tasks within a group of employees.
A final alternative is to provide training for employees. This is applicable to both new workers and job incumbents. Training can keep the abilities of incumbents current or provide new skills as times and conditions change.
Any observable change in behavior is prima facie evidence that learning has taken place.
We found that positive reinforcement is a powerful tool for modifying behavior. By identifying and rewarding performance-enhancing behaviors, management increases the likelihood that they will be repeated.
Our knowledge about learning further suggests that reinforcement is a more effective tool than punishment.
Although punishment eliminates undesired behavior more quickly than negative reinforcement does, punished behavior tends to be only temporarily suppressed rather than permanently changed.
And punishment may produce unpleasant side effects such as lower morale and higher absenteeism or turnover. In addition, the recipients of punishment tend to become resentful of the punisher. Managers, therefore, are advised to use reinforcement rather than punishment.
Managers should also expect that employees will look to them as models. Mangers who are constantly late to work, or take two hours for lunch, or help themselves to company office supplies for personal use should expect employees to read the message they are sending and model their behavior accordingly.
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MEASURES OF CENTRAL TENDENCY
Instructor: Dr. Abdus Sattar
Instructor: Dr. Abdus Sattar
The following are the important measures of central location:
The Arithmetic Mean
The Median
The Mode
The Geometric Mean
The Harmonic Mean
The Arithmetic Mean
THE POPULATION MEAN:
Many studies involve all the values in a population. For ungrouped data,
the population mean, where, N=Number of items in the population
= sum of the X values.
Example: There are 30 companies in the city of Dhaka. Their profits (in lakh taka) in the year 2001-2002 are given below:
MEASURES OF CENTRAL TENDENCY
A single value that summarizes a set of data.
The following are the important measures of central location:
The Arithmetic Mean
The Median
The Mode
The Geometric Mean
The Harmonic Mean
Parameter: A characteristic of a population.
THE SAMPLE MEAN:
Frequently we select a sample from the population in order to find something about a specific characteristic of the population. It may be expensive and time consuming to collect data from all the companies under consideration. Therefore, a sample of 5 companies might be selected and the mean of five companies calculated in order to estimate the mean income of all the companies.
The mean of a sample and the mean of a population are computed in the same way.
The formula for the mean of a sample is:
Sample Mean, Where,
n= sample size.
Example: From our previous example, we take sample of 5 companies as below:
65, 22, 48, 55, 29.
Find the average income of the companies from the sample data
20, 22, 35, 42, 37, 42, 48, 53, 49, 65, 39, 48, 67, 18, 16, 23, 37, 35, 49, 63, 65, 55, 45, 58, 57, 69, 25, 29, 58, 65.
What is the average profit of the companies?
Statistic: A characteristic of a sample.
Arithmetic Mean for Grouped Data:
Quite often data on incomes, ages, and so on are grouped and presented in the form of a frequency distribution.
The mean of a sample of data organized in a frequency distribution is computed by the following formula:
Arithmetic Mean of Grouped data
Example:
We organize the raw data from our previous example and present in the form of a frequency distribution ( We consider the data as sample):
The Properties of the Arithmetic Mean:
The arithmetic mean is a widely used measure of the central location. It has several important properties:
Every set of interval-level data has a mean.
All the values are included in computing the mean.
A set of data has only one mean. The mean is unique.
The mean is a useful measure for comparing two or more populations.
The arithmetic mean is the only measure of central tendency where the sum of the deviations of each value from the mean will always be zero.
Expressed symbolically,
The arithmetic mean has some disadvantages.
The mean uses the value of every item in a sample, or population, in its computations. If one or two of these values are either extremely large or extremely small, the mean might not be an appropriate average to represent the data.
Example: suppose the annual profits of a small group of companies are
( in taka): 62900, 61600, 62500, 60800, and 1.2 million.
The mean profit is 289560 taka. Obviously, it is not representative of this group, because all but one company has a profit in the 60000 to 63000 taka range. One profit 1.2 million taka is unduly affecting the mean.
The mean is also inappropriate if there is an open-ended class for data tallied into a frequency distribution.
THE MEDIAN:
For data containing one or two very large or very small values, the arithmetic mean may not be representative. The centre point of such data can be better described using a measure of central tendency called the median.
Median: The midpoint of the values after they have been ordered from the smallest to the largest, or the largest to the smallest. Fifty percent of the observations are above the median and fifty percent below the median.
Median for ungrouped data:
When n is an odd number,
Order the values in an ascending or descending manner.
Example: Find the median of the following values:
11, 9, 13, 4, 7
Solution: First we array the data in an ascending order as follows:
4, 7, 9, 11, 13
Median = Arithmetic mean of
Example: Find the median of the following values: 11, 9, 13, 4, 7,15
Solution: First we array the data in an ascending order as follows: 4, 7, 9, 11, 13,15
Median = Arithmetic mean of
= Arithmetic mean of
The major properties of the median are:
The median is unique; that is like the mean, there is only one median for a set of data.
It is not affected by extremely large or small values and is therefore a valuable measure of central tendency when such values do occur.
It can be computed for a frequency distribution with an open-ended class if the median does not lie in an open-ended class.
It can be computed for ratio-level, interval-level, and ordinal-level data. Suppose five people rated the service of a commercial bank as follows: excellent, very good, good, fair and poor. The median response is "good". Half the responses are above "good"; and other half are below
MEDIAN FOR GROUPED DATA
EXAMPLE: VEHICLE SELLING PRICES.
THE MODE
Mode - The value of the observation that appears most frequently.
The mode is especially useful in describing nominal and ordinal levels of measurements. We can determine the mode for all levels of data - nominal, ordinal, interval, and ratio.
The mode also has the advantage of not being affected by extremely high or low values. Like the median, it can be used as a measure of central tendency for distributions with open-ended classes.
The mode does have a number of disadvantages: For many sets of data, there is no mode because no value appears more than once. For example, there is no mode for this set of price data: tk.19, tk.21, tk.23, tk.20, and tk.18.
For some data sets there is more than one mode. Suppose the ages of a group of people are 22, 27, 26, 27, 31, 35, and 35. Both the ages 27 and 35 are modes. This grouping of ages is referred to as bimodal (having two modes).
Mode for grouped data:
The mode is defined as the value that occurs most often. For data grouped into a frequency distribution, the mode can be approximated by the midpoint of the class containing the largest number of class frequencies.
Example: Done on the board.
Self-Review: 3 - 3. Page - 75. Exercises: 16, 17, 18, 20. Page-75.
Self - Review 3 - 5 Page - 81.Exercises: 30, 31, 32,33,34. Page 82
Self - Review - 3 - 6. Page - 85.
Exercises: 43, 45, 51, 52, 61, 63 Pages: 90 - 94.
THE GEOMETRIC MEAN
The geometric mean is useful in finding the average of percentages, ratios, indexes, or growth rates. It has a wide application in business and economics because we are often interested in finding the percentage changes in sales, salaries, or economic figures, such as the Gross National Product.
The geometric mean of a set of n positive numbers is defined as the nth root of the product of n values.
The formula is:
The geometric mean profit is 3.46 percent.
A second application of the geometric mean is to find average percent increase over a period of time.
The formula is: [ From the board.]
Example: The population of a small village in 1990 was 2 persons, by 2000 it was 22. What is the average annual rate of percentage increase during the period?
Solution: Done on the board.
Self - Review: 3 - 4. Page - 79. Exercises: 21, 23, 25, 27.Page - 79.
POSITIONAL MEASURES OF LOCATION
There are measures of location that divide a set of observations into equal parts. These measures include quartiles, deciles, and percentiles.
Quartiles divide a set of observations into four equal parts. We call the middle value of a set of data arranged from smallest to largest the median. That is, 50 percent of the observations are larger than the median and 50 percent are smaller. The median is a measure of location because it pinpoints the center of the data.
In a similar fashion quartiles divide a set of observations into four equal parts. The first quartile, usually labeled Q1, is the value below which 25 percent of the observations occur and the third quartile, usually labeled Q3, is the value below which 75 percent of the observations occur. Q2 is the median. The values corresponding to Q1, Q2, and Q3 divide a set of data into four equal parts.
In a similar fashion deciles divide a set of observations into 10 equal parts and percentiles into 100 equal parts.
Computational Procedure:
Let Lp refer to the location of a desired percentile. So if we wanted to find the 33rd percentile we would use L33 and if we wanted the median, the 50th percentile, then L50 .
The number of observation is n, so if we want to locate the middle observation, its position is at (n+1)/2, or we could write this as
(n+1)(P/100), where P is the desired percentile.
LOCATION OF A PERCENTILE,
Example:
Listed below are the commissions earned last month by a sample of 15 brokers:
Locate the first quartile and the third quartile for the commissioned earned.
Solution: The first step is to organize the data from the smallest to the largest.
(in $): 1460, 1471, 1637, 1721, 1758, 1787, 1940, 2038, 2047, 2054, 2097, 2205, 2287, 2311, 2406.
Quartiles divide a set of observations into four equal parts. Hence 25 percent of the observations will be less than the first quartile (Q1 ).
75 percent of the observations will be less than the third quartile (Q3 ).
To locate the first quartile, we use the above formula, where n = 15 and P = 25:
and to locate the third quartile, n = 15 and P = 75:
The fourth value in the ordered array is $1,721 and the twelfth is $2,205. Q1 = $1,721 and Q3 = $2,205.
Example: Suppose a data set contained the six values: 91, 75, 61, 101, 43, and 104.
Locate the first quartile.
Solution: We order the values from the smallest to the largest:
43, 61, 75, 91, 101, 104.
The first quartile is located at
The position formula tells us that first quartile is located between the first and the second value and that it is .75 of the distance between the first and the second values.
The first value is 43 and the second is 61. So the distance (61-43) between these two values is 18. To locate the first quartile, we need to move .75 of the distance between the first and second values, so .75(18) = 13.5. We add 13.5 to the first value and the first quartile is: 43 + 13.5 = 56.
Self - Review: 4 - 8. Page - 124. Exercises: 35 - 38 Page-124.5.
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