Emotions are an integral part of life. They are as important as logical thinking and a well-weighed approach to the decision-making process. Cognition and emotion have a strong relationship, as emotions are the result of the cognitive process. More complex concepts such as teamwork, decision-making, and organizational power/politics are based on emotions to a certain extent. Deep understanding of the cognition process that causes emotions can offer a better understanding of such concepts like power and approach in terms of organizational management. Considering the peculiarities of the chosen area, the paper aims at exploring such key concepts (and some of their sub-concepts) as cognition and emotion, teamwork, decision-making, and organizational power/politics change management, and trade unions, participation, and representation to evaluate cognition and emotion concepts in detail, and provide reflection regarding their practical use in daily life.
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Cognition and Emotion
Cognition and emotion are interconnected. The following processes can be referred to cognition: language use, exploitation of memory, solving of various problems, focusing on something that draws attention, and planning. Emotions are the psychological states that may vary from happiness to depression, including disgust, anger, joy, and many others (de Sousa 2014; Hermans & de Houwer 2010). Heuristics and risk aversion are among the key methods determining the decision-making process.
The human mind tends to simplify problems to solve them to the extent suitable for its level of development. Heuristics are the methods of simplification aimed at achieving immediate results. These methods are often called ‘rules of thumb’. Heuristic methods or heuristics allow the human brain to pass the stage of complex and stressful calculations and come to the necessary conclusions, appropriate for the particular situation (Quartz 2009, p. 209).
In other words, it is the process of determining the minimal necessary basis to make some decisions in the environment of uncertainty. The solutions made may not be optimal or the most effective. However, they allow resolving a situation with acceptable outcomes. People tend to assess situations assuming probabilities via their relation rather to the characteristics of events than to the events themselves (Quartz 2009, p. 210). In this light, heuristics are used to choose one solution from several possible alternatives.
Risks seem something unusual for the regular life of typical people. However, risks are an essential part of life, and people face them much more often than expected. Risk aversion is the concept that describes the particular choice of a person when the lower risks are preferred under the pressure of uncertainty. Such a situation is common for cautious gamblers preferring to choose lesser but guaranteed winnings rather than risk again to lose them all (Andersson et al. 2013, p. 10). Most people are risk aversive by nature, which can be a substantial obstacle on the road to success. It is one of the protective mechanisms making the emotion of fear of loss prevail over the emotion of excitement.
Teamwork, Decision Making, and Organizational Power/Politics
A work environment is the source of uncertainty as well as any other environment that includes people’s communication and cooperation. Uncertainty is the source of negative emotions, and usually, it may lead to the emergence of conflicts during teamwork (Neck, Houghton & Murray 2015, p. 119). It can influence the decision-making process very negatively. Therefore, the appropriate organizational power/politics serves as the method of managing teams, reducing uncertainty, and facilitating the decision-making process (Neck, Houghton & Murray 2015, p. 120). The concepts of power and approach are used to organize the management process most efficiently.
The concept of power can be described as the ability to change the state of others by assuring or withholding the necessary resource base and controlling punishments in terms of their application. In any organization, power is the prerogative of the executive management and the managers of the middle level (Fairholm 2009, p. 48). Power can provide the tools and methods of motivating as well as discouraging employees. It can be used to assure resources and freedom, and it would be high power. In the case of resources’ restrictions and implementing numerous constraints, it would be low power.
High power assures the following approach to managing organizations. It is based on the attention to rewards, as they are important for the effective employees’ motivation. The high power approach also utilizes positive emotions in daily practice to create a positive teamwork environment. Such an approach presupposes automatic cognition as well as the state/trait driven behavior (Fairholm 2009, p. 62). Finally, it is disinhibited, so there are not subjective constraints to motivate personnel.
Management of organizations is a complex and multidimensional process. Change management is even more complicated due to the need for changes’ implementation. The process of change is usually not welcomed by all parties involved in the processes within an organization (Clegg Kornberger & Pitsis 2011, p. 117). Change managers have to face numerous challenges and issues that have to be resolved in the form of the compromise to satisfy the needs of all stakeholders in an organization (Fairholm 2009, p. 205). Among the challenges to manage, organizations need to know how to manage the competing institutional logics and consider the factors influencing cultural anomalies.
Competing Institutional Logics
Changes in an organization usually lead to a certain confrontation between the past and the future. In other words, the implementation of changes may create a situation when the competing institutional logics interferes with the process of innovations and positive changes (Fairholm 2009, p. 185). Such changes may lead to the personnel reduction and renewal of the top executive management pool. Certain opposition within an organization is inevitable.
Factors Influencing Cultural Anomalies
The organizational change needs to consider the factors that influence cultural anomalies within an organization. It is important in terms of decreasing turnover and keeping the specialists valuable for the organization going through the change process (Fairholm 2009, p. 187). The globalization of businesses leads to the creation of the particular cultural groups within one organization, so the interests of all groups should be taken into consideration during the process of implementing changes.
Trade Unions, Participation, and Representation
Organizations that represent the interests of the workforce are very important in the modern world. Trade unions were common in the past as the only instrument of influencing employers. Today, their role has changed. Modern trade unions work in a multinational setting as the contemporary business is globalized and diverse. The participation of as many workers as possible is important today to generate awareness about the problems they have. Trade unions are eligible for employees’ representation legally when the situation cannot be settled within a company between an employer and employee (Fairholm 2009, p. 360). However, employees must be ready to be involved in the unions’ activities.
Industrial Relations vs. Human Resources
The concept of industrial relations (IR) refers to the relationships between the actual employer and its workforce. Human resource (HR) management refers to the process of managing all workforce that includes executive managers along with the workforce, customers, and the pool of suppliers (Fairholm 2009, p. 363). In other words, IR is the sub-concept of HR management.
MNC´s and Worker Movements
Multinational corporations or MNCs have always been in the natural opposition to worker movements. The reason is simple: workers always want to improve their work conditions such as workplace environment, paycheck, benefits, rewards, and other factors influencing employee satisfaction while MNCs always try to optimize expenditures, including the approach to do it at the cost of employees’ work conditions (Fairholm 2009, p. 380). The opposition usually has a rather civilized form of negotiations between an MNC’s management and trade unions.
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Cognition and Emotion in Detail
Heuristics and risk aversion may seem irrelevant to the concept of management. Their purpose is to simplify and keep somebody from risk acceptance. However, these concepts are essential for any managerial or any other activity. Heuristics can be used for various reasons. For example, decision-makers might not know how to solve some problems in the best possible or optimal way even if there is a solution that will be ideal for everyone (Hermans & de Houwer 2010, p. 23). They may not possess the sources that would allow them to find help or the costs associated with solving this problem might be too high for them. Decision-makers may not be in a position to have the necessary information to solve the problem optimally or they may get it before they have to make a decision. Even having obtained all the necessary information, they may not make all calculations to solve the issue on time. Having appropriate optimization techniques does not mean that they will be suitable to solve some problems.
Some formulas that seem to guarantee success may prompt decision-makers, who usually try to calculate everything, to deviate from the course of actions even for some time. However, they should know the additional risks associated with the successful formulas, and such risks may outweigh all benefits (Hermans & de Houwer 2010, p. 50). If there are problems with implementing the calculations, it would be wise and advisable to use heuristics. With appreciable uncertainty, heuristics may be the approach of choice. Heuristic shortcuts are to be used when there is a need to find approximate results of calculations.
Heuristics can be different. Some can save efforts, and they can be autonomic and reflexive as well as non-cognitive. They belong to Type 1. It is appropriate to use them when there is a necessity in deciding on something very quickly or when there is not much risk involved (Hermans & de Houwer 2010, p. 75). Type 2 heuristics, with their cognitive nature, require more efforts and they should be used in the case of high stakes.
Risk aversion only seems simple and easy. It is the process of deciding on the pressure of numerous uncertainties. The Prospect Theory (PT) was developed to help in modeling the choices that emerge under the influence of uncertainty. It was created and developed by Kahneman and Tversky in 1992 to provide a more precise description of the decision-making process since the existing expected utility theory was not able to provide such an accuracy (Campos-Vazquez & Cuilty 2013, p. 3).
According to PT, the process of the choice is performed in two steps. First, a person determines the potential outcomes that look equivalent and finds the point of reference. Then, less appropriate outcomes are considered as losses while the more appropriate outcomes become gains. The process of the outcomes’ determination is performed using a heuristic approach. Second, a person ‘calculates’ a final value or utility that comes from the loss’ and gain’s potential to occur (Shapiro 2014, p. 56). The final stage is the choice of the alternative that has the greatest utility.
It is possible to exemplify risk aversion as follows. A man wants to sell a couch. It is not new and it needs to be repaired. This man (seller) does not describe the couch as the one that needs to be fixed in his advertisement. The buyer comes to the seller and offers $30-smaller price to take the couch with him right now even not checking its functionality. The seller is under uncertainty: he can sell it right now and get rid of trouble or he can wait until someone else will come and possible notice (or not) the issue and will buy it for the price, which is $30 higher. He calculates the utility and sells it for $30 less. This is risk aversion.
Simplification is critical in difficult life situations. For example, there was a situation when the client returned the iPhone he had recently bought and said he would file a lawsuit because the store had caused the breakup with his girlfriend. After half an hour of high tone conversation, he said that she had managed to find some photos of girls in it. The customer claimed that the store had sold him a used phone, and he wanted to get compensation for his financial and non-pecuniary damage. The hard way was to call for the company’s layer who would explain the customer the situation using legal education as the basis for the negotiations.
However, it would lead to the immediate client loss, a negative image of the store, and continuous arguments of the angry client and the lawyer not intending to lose in this case. The situation was resolved by the administrator of the store. The administrator offered the following solution. They called the girlfriend of the client and asked her to come to the store. Both received the latest models of iPhones according to their choice and a 50% discount on the next purchase of any product in the store.
The situation was resolved with the smiles and happy faces of the client and his girlfriend because he wanted to buy her an iPhone soon. She realized that it was not his fault that those photos were there. It was risk aversion but the gains were the happy clients, the image of the store was not influenced anyhow, and the store received the loyal client who would buy something having such a discount. The attitude of the administrator and the simplicity of the solution have helped to avoid numerous problems.
Summing, the paper explored such key concepts (and some of their sub-concepts) as cognition and emotion, teamwork, decision making, and organizational power/politics change management, and trade unions, participation, and representation evaluated cognition and emotion concepts in detail and provided reflection regarding their practical use in daily life.
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