CSUN Nazarian|College of Business & Economics
Chapter 2
MGT 360 · Chapter Two
Individual
Behavior
The person, or the situation?
When do individual differences drive behavior at work, and when does the situation overwhelm them?
Prof. Deone Zell
Department of Management
David Nazarian College of Business and Economics
Department of Management
David Nazarian College of Business and Economics
California State University
Northridge
Northridge
Individual Behavior
This week we’re taking a look at individual behavior, which celebrates diversity in all of its’ forms. This short lecture will ask the question: What is the impact of individual behavior on the workplace, and vice versa? Which affects which, and which is more powerful?
CSUN Nazarian|College of Business & Economics
Chapter 2
The hook
Two first impressions
Two companies, eight years apart, one obvious reading.
Microsoft · February 2014
Empathy, and a culture to fix
- First email led with empathy, not strategy
- Know-it-all traded for learn-it-all
- $300B in 2014; past $3 trillion in 2024
X · October 2022
Speed, and a smaller company
- Acquired for $44 billion in October 2022
- 7,500 staff to about 1,500, an 80 percent cut
- Ad revenue down 45 percent; a slow climb back
Two first impressions, eight years apart, and the outcomes point opposite ways.
Two first impressions
Let’s start with two companies. One is Microsoft, who I’m sure you know about; the other is X, who I’m also sure you know about! It’s February two thousand fourteen. An unknown engineer named Satya Nadella from Microsoft takes over a giant company that Wall Street had already written off. When he arrived his opening message was not about strategy or targets. It was about empathy, and about trading a know-it-all culture for a learn-it-all one. Eight years later, at another company called X, run by Elon Musk, in October two thousand twenty-two, forty-four billion dollars changes hands and roughly eighty percent of the staff are gone inside six months. Now look at the numbers. The first company had crossed three trillion dollars. The other was marked down to about a third of what was paid for it, and has been climbing back since. But don’t draw any simple conclusions yet.
CSUN Nazarian|College of Business & Economics
Chapter 2
The unresolved question
When does the person
decide, and when
does the situation?
The unresolved question
Before we go any further, let me hand you the fact that wrecks the easy answer. It’s tempting to pin everything that happened at X on Elon Musk. But this is the same Musk, the same disposition, no personality transplant in between, who built the most valuable car company in the world and the rocket company NASA depends on. So if character is destiny, why did that character produce triumph at one place and collapse at another? Now run it the other way. If situations decide, why did dozens of Microsoft executives sitting in exactly that situation fail to do what Nadella did? Thoughtful people disagree about this, and they have been disagreeing since nineteen sixty-eight. And knowing which company ended up worth more does not tell you why.
CSUN Nazarian|College of Business & Economics
Chapter 2
Chapter roadmap
The route through the chapter
Six tools. Each arrives with a name, a date and a boundary.
- 01Barrick & Mount 1991What personality predicts
- 02Mischel 1968When the situation takes over
- 03Ross 1977How we misjudge people
- 04Judge and colleagues 2001What satisfaction buys
- 05Hochschild 1983The work of managing feelings
- 06Judge, Locke & Durham 1997The self we bring to work
The route through the chapter
So how do we get anywhere on a question smart people have been fighting over for almost sixty years? With tools. Six of them, each with a name and a year attached. Barrick and Mount, nineteen ninety-one, go first, because they tell you what personality actually predicts, which is less than the internet believes and rather more than the sceptics allow. Then Mischel, nineteen sixty-eight, who nearly demolished the whole field, and the truce they reached is the part I use most. Ross, nineteen seventy-seven, hands you the errors you make judging other people, including the ones you are making about these two chief executives at this exact moment. Then Judge and colleagues, two thousand one, on what job satisfaction actually buys. Then Hochschild, nineteen eighty-three, on feelings as a job requirement, which sounds strange until you have done the job. And last, Judge, Locke and Durham, nineteen ninety-seven, on the self you carry into the room. And every one of them has a limit. The limits almost never survive the trip to a summary. We are keeping them.
CSUN Nazarian|College of Business & Economics
Chapter 2
Personality · the Big Five
Five dimensions, not five types
Traits recoverable across languages, cultures and instruments.
Each of the five is a continuum with two poles, not a bin.
The Big Five as five continua
First stop is personality itself. And before we can ask whether it predicts anything, we have to agree on what we are even measuring. There are two big personality tests you should know about. One is the Myers-Briggs, and the other is the Big Five. The Myers-Briggs is wonderful, because no matter what you answer, the result makes you feel good about yourself. The Big Five is less flattering, and it is also the one with the serious evidence behind it. These traits keep turning up across languages, across cultures, and across completely different tests, which is more than most personality tests survive. So let’s look at the five. And notice the shape of them. Each one is a line with a pole at either end, not a box you get sorted into. You land somewhere along it, and so does everyone else. That difference matters more than anything else on this slide, because the four-letter industry runs on turning a line into a bin. What the Big Five gives you instead is a decent vocabulary, a way to describe a colleague without reaching for words like toxic or natural leader.
CSUN Nazarian|College of Business & Economics
Chapter 2
Barrick & Mount 1991
One trait travelled everywhere
117 studies, nearly 24,000 people, five occupational groups.
Correlational syntheses of mostly self-report measures: tendencies across thousands, not guarantees about any one person. Dashed grey means the chapter names no occupations there.
One trait predicted performance in every occupation studied; the other four did not.
Barrick & Mount: what generalises
Now, does any of this actually predict anything at work? That is the right question to ask of any personality framework, and in nineteen ninety-one Barrick and Mount went looking for the answer. They pooled everything the field had across five occupational groups, and the counts are on the slide if you want them. They found this. One trait showed up in all five groups. Conscientiousness. If you only ever get to learn one thing about a future colleague, learn how conscientious they are. Extraversion shows up in two of them, sales and management, which makes sense the moment you say it out loud. The empty rows are genuinely empty, because the chapter names no occupations there. Now keep your expectations calibrated. The correlations are modest, and a good predictor is not a fortune teller. Conscientiousness taken to an extreme starts to look a lot like rigidity. Modest still beats guessing, and I would take the bet. Hand me two résumés and one fact about each person, and that is the fact I would want. There is a second finding I want you to have. Extraversion, conscientiousness and openness together show the most consistent link to who emerges as a leader and how well they do, at a correlation near point four eight. That is substantial, and it is still a long way from destiny.
CSUN Nazarian|College of Business & Economics
Chapter 2
Mischel 1968 · situation strength
Strong situations, weak situations
Trait measures rarely topped r = .30 against single behaviors.
The chapter's own caution: strength is easier to invoke after the fact than to quantify in advance. Use it to make predictions, not excuses.
As constraints shrink, the same people behave more differently.
Situation strength
Conscientiousness travels. Hold onto that, because in nineteen sixty-eight somebody came along and nearly knocked the whole thing over. A psychologist named Walter Mischel pointed out that trait measures rarely predicted any single behaviour above about point three. That is a small number, and it very nearly took the field down. His answer is on this slide, and the interesting part is that it is about rooms rather than people. Start at the left. The rails sit close together. Clear rules, clear norms, somebody watching. Picture a courtroom, a flight deck, a call centre with a screen telling you what to say next. In places like that people behave remarkably alike, and personality barely registers. Now travel right. The rails come apart, and the paths come apart with them. Ambiguity, no accountability, nobody to answer to. And notice what is actually happening out there. Nobody’s personality is changing. There is just nothing holding them in. That one idea explains how the same person can flourish at one company and combust at the next. One caution, and it comes with a test. Situation strength is very easy to declare once you already know how the story ended. So if you cannot call a room strong or weak before you see the outcome, you are not predicting, you are excusing. Use it forwards.
CSUN Nazarian|College of Business & Economics
Chapter 2
The hinge of the whole chapter
Behavior is the person,
the situation, and
their interaction.
Person, situation, interaction
Mischel handed us rooms. The trait researchers had people, and the two camps spent about twenty years arguing about which one mattered. This sentence is how it ended, and both sides signed it. Read the third clause closely, because it is the one everybody drops. Not person plus situation. Person, situation, and the interaction between them, which is a different thing from either one on its own. Let me show you what I mean. Think of somebody you have been stuck with on a group project who was an absolute nightmare. Disappeared for two weeks, missed every deadline, turned up at the end wanting their name on it. Now picture that same person at a job they actually care about, with a manager who notices, and a deadline that is real. A lot of them are completely fine. Nothing about the person changed. What changed is the fit between them and the setting, and you cannot work out the fit by looking at either side alone. That is what the interesting management questions are actually about. Not is this a good person. Not is this a good company. But does this person and this setting fit. And look at what that gets you. If fit is the variable, you have two levers instead of one. You can change who is in the room, or you can change the room.
CSUN Nazarian|College of Business & Economics
Chapter 2
Ross 1977 · perception
How we explain each other
The information is always incomplete, so perception runs on shortcuts.
Explaining you, we reach for character; explaining ourselves, for whichever flatters.
The attribution mirror
Fit is the right question to ask. The trouble is that we are terrible at judging it, and the problem is not the people being judged. It is the judge. We never have complete information about anybody, so perception runs on shortcuts, and the shortcuts are not random. Look at which way the arrows point. That is the argument. On the left, every shortcut we use on other people lands in the same place. He failed because he is incompetent arrives a lot faster than he failed because the task was impossible. Halo does the same thing in reverse. One famous success, and suddenly every other judgement about that person is coloured. Now look right. Same machinery, aimed at ourselves, and it quietly stops being consistent. My success was me. My failure was the circumstances. Ross named that first one in nineteen seventy-seven, and it is no curiosity. It causes bad hires, unfair performance reviews, and most of what you have ever read about a chief executive.
CSUN Nazarian|College of Business & Economics
Chapter 2
Perception · the hook re-read
The chapter's own hook is bait
Each story has a rival explanation the character version leaves out.
Write the situational explanation first, then see what character still has to explain.
The corrective ordering
Now I owe you a confession. The hook I opened with was bait, and I set it on purpose. Give Nadella’s character full credit for Microsoft’s decade and you have quietly skipped past the fact that he inherited Azure, a cloud shift already in motion, and an artificial intelligence wave nobody controlled. Blame Musk alone for X and you have skipped an industry-wide advertising recession that hit every platform in twenty twenty-two and twenty twenty-three. Look at the badges. Reading order puts character first, because that is the order it arrives in. Writing order puts situation first, because that is the discipline. Write the situational explanation down first, then see what character still has left to explain. Simple to say. Genuinely hard to do. I use it constantly.
CSUN Nazarian|College of Business & Economics
Chapter 2
Judge, Thoresen, Bono & Patton 2001
What satisfaction buys
312 samples, more than 54,000 employees.
About point three, in both directions, with third factors pushing both.
Satisfaction and performance
That is personality, and that is perception. Now attitudes, and we start with the oldest argument in the business. Does a happy worker actually work harder? For most of the twentieth century the textbooks said no, that the link was a myth. Judge and colleagues put that to rest in two thousand one, and the corrected correlation came out around point three. That is moderate, and it holds up. Now the part people skip. The arrow runs both ways. Satisfaction fuels performance, and performing well is satisfying, and the data cannot pull the two apart. Now look up at the top of the picture. Good management, fair pay and personality itself push both boxes at once, which means some of that point three is not a relationship between them at all. So this is correlational, and I would still act on it. If you are running a team, making the work satisfying is one of the very few levers that plausibly moves both boxes at the same time.
CSUN Nazarian|College of Business & Economics
Chapter 2
Gallup 2025 · the aggregate
What satisfaction does not buy
21%
Engaged worldwide in 2024.
Gallup, self-reported global survey
$438B
Estimated cost of disengagement.
Gallup's own estimate, not audited
Satisfaction is an evaluation of the job; engagement is about energy. Neither one is loyalty.
Not laziness: effort re-set to what the job requires, nothing more.
Engagement and the bargain
So satisfaction buys you something. Now for what it does not buy. There are two numbers on this slide, and both of them need a small asterisk. Twenty-one percent engaged worldwide in twenty twenty-four comes from Gallup asking people about themselves. It is a survey, not an audit. And four hundred and thirty-eight billion dollars in lost productivity is Gallup’s own estimate. Somebody built a model to get to that number. Nobody counted it. Now the picture, because this is the part I want you to walk out with. Quiet quitting is not a new kind of laziness, and the slide shows you why. Look at what disappears and what stays. The job still gets done. Both bars have that. What goes away is the extra, the part nobody was ever measuring, and people stop giving it when they decide the deal has gone bad. And keep these two straight, because managers mix them up all the time. Satisfaction is what you think about your job. Engagement is how much energy you put into it. Neither one is loyalty, which is why somebody perfectly happy at a shrinking company still keeps their résumé updated. Next week, equity theory, which is this same idea with the arithmetic filled in.
CSUN Nazarian|College of Business & Economics
Chapter 2
Hochschild 1983 · emotional labor
Two ways to do the feeling work
Display rules are the organization's script for which emotions to show: cheerfulness in service, calm in medicine, sternness in collections. Roughly two thirds of the U.S. labor force works in services.
Surface acting opens a gap between felt and shown; deep acting closes it.
Surface acting and deep acting
People pull back effort when the deal feels bad. And a lot of what gets pulled back at work is not hours. It is feelings. I want to make the case that this is not a soft topic. About two thirds of the American labour force works in services, which means most people are paid, in part, to produce an emotion. Organisations even have a script for it, called display rules. Cheerfulness in service, calm in medicine, sternness in collections. Arlie Hochschild spent time with Delta flight attendants in the early eighties and put a name to what that costs. They were not being trained to smile. They were being trained to really smile, which is a completely different instruction and a much more expensive one. There are two lanes here. In the top lane the rule says be warm, you produce warm, and what you actually feel does not budge. That gap is what she called dissonance. In the bottom lane you go back and work on the feeling itself. You reframe the abusive customer as somebody having the worst day of their year, and the gap closes. Same job, same script, two very different costs. The next slide puts a number on that difference.
CSUN Nazarian|College of Business & Economics
Chapter 2
Hülsheger & Schewe 2011
The gap, measured
95 studies and 494 correlations, heavily cross-sectional and self-reported. Longitudinal work suggests the arrow runs both ways: exhausted people also fall back on faking.
The gap is what costs; regulating the feeling is far cheaper.
What the meta-analysis found
So which lane costs more? Hülsheger and Schewe pooled the literature in twenty eleven to find out, and the number goes right onto the bracket. Surface acting runs from about point three nine to point four eight against burnout, emotional exhaustion and psychosomatic complaints. For this literature, those are big. Deep acting comes out much weaker, and sometimes at nothing at all. So the cost is not the emotional work. The cost is the gap. Now the honest caveat. This evidence is mostly a snapshot rather than a film, and the causal story is unsettled, because exhausted people also fall back on faking, which runs the arrow the other way. And I would still manage as though it were true, because both readings point in the same direction. If you are the manager, reduce the need for it in the first place. Realistic display rules, some autonomy with abusive customers, and time to recover.
CSUN Nazarian|College of Business & Economics
Chapter 2
Judge, Locke & Durham 1997 · Dweck 2006
The self you bring to the work
A higher-order trait, assembled from four self-appraisals.
Dweck's growth mindset is the second self-view here, and its most defensible workplace use was Nadella's: a cultural norm rather than a personal diagnosis. Popular treatments oversell it against the replication evidence.
Four appraisals compose one trait; mindset worked as a norm, not a diagnosis.
Core self-evaluations
Last tool, and this one is about you. What do you actually carry into the room on a Monday morning? Four things fold into one here. Self-esteem. A general sense that you can do things. Emotional stability. And the belief that outcomes are yours to affect. Judge, Locke and Durham put those four together in nineteen ninety-seven and argued they are really one thing underneath, and people high in it pick harder goals, stay with them longer, and read a setback as a problem rather than a verdict. Now the mindset piece, and this one is worth slowing down for, because the popular version oversells it. The most defensible use of Dweck at work is not diagnosing individuals. It is what Nadella did with it, which was making it safe to say you don’t know something. That is a change to the room, not a change to the people, and that is the argument this chapter keeps coming back to. One last thing to notice. Emotional stability turns up twice in this chapter, once as a Big Five trait in its own right, and again here inside core self-evaluations. That overlap is real, and it comes straight from the chapter.
CSUN Nazarian|College of Business & Economics
Chapter 2
Clance & Imes 1978
The same machinery, run backwards
First documented in 1978 among high-achieving women.
Clance and Imes described an experience among demonstrably high achievers; it is a research construct, not a clinical diagnosis. The correction is perceptual: write down what you actually did.
The same machinery, run backwards: successes to luck, failures to self.
The imposter phenomenon
And here is the version of that self a lot of you will recognise. You have seen this picture before, seven slides ago, and I put it there twice on purpose. On the left, the bias doing what it usually does. My success was me, my failure was the room. On the right, the same two arrows with their heads swapped. Success gets handed to luck. Failure gets kept. Clance and Imes documented this in nineteen seventy-eight among women whose achievements were a matter of public record and who privately expected to be found out. Two things to hold onto. This is a research construct describing an experience, not a diagnosis. And the correction is perceptual rather than motivational, so don’t argue with the feeling, just write down what you actually did. If self-doubt is getting in the way of daily life, that is a professional’s territory, not a framework’s.
CSUN Nazarian|College of Business & Economics
Chapter 2
Case A · X
Personality at full volume
Acquired October 2022 for $44 billion. A theory test, not a verdict.
The chapter's figures: 7,500 staff to about 1,500; ad revenue down more than 45 percent, about $2.5 billion in 2023; Fidelity's mark near a third, then about $13 billion by December 2024 as advertisers returned.
A sole owner at the weak end: the dispositions arrive undiluted.
Case A: X
Six tools in hand. Now let’s go back to those two companies and actually use them, starting with X. And this is a theory test, not a verdict. Same band you saw earlier, one marker added, and it sits on the far right for a reason. A sole owner. No board majority to answer to. No advertiser relationships he felt bound by. A direct channel to hundreds of millions of people. That is about as little situational dampening as modern capitalism offers anybody. So whatever the dispositions are, and we are not diagnosing anyone from here, the world got them at full strength. The chapter’s figures are underneath. Seven thousand five hundred staff down to about fifteen hundred. Ad revenue down more than forty-five percent, to around two and a half billion in twenty twenty-three. And here is the theory test. The same behavioural signature built breakthrough engineering at SpaceX, where the audience is physics, and physics does not organise a boycott. At X the customers were brand safety departments. The traits did not change. The fit did.
CSUN Nazarian|College of Business & Economics
Chapter 2
Case B · Microsoft
Changing the situation itself
Took over February 2014, valued around $300 billion.
The chapter's figures: Office shipped on iOS and Android; Azure, GitHub, LinkedIn and OpenAI compounded over a decade; past $3 trillion on January 24, 2024, the second company ever.
Inside a strong situation, he loosened one norm and tightened another.
Case B: Microsoft
So that is what happens when nothing damps the signal. Now the opposite case, and watch where the marker is not. It does not slide. A hundred and thirty thousand employees, a board, institutional investors. That is a strong situation, and no chief executive controls it directly. So what he did instead was reach into the rails themselves. The norm that punished admitting you were wrong, loosened, so learning became safe. The norms around listening first and customer obsession, tightened. Office shipped on iPhones and Android. Azure, GitHub, LinkedIn and OpenAI compounded over a decade, and the company passed three trillion dollars on January twenty-fourth, twenty twenty-four, only the second company ever to do it. That is a deliberate redesign of the room from inside a job he could not step out of, and it is why the culture outlasted any particular meeting. The tempting reading is that an empathic leader beat a combative one. The better reading is that he used his own personality to change the room. And the case against him belongs in the case too. Azure’s momentum predates him.
CSUN Nazarian|College of Business & Economics
Chapter 2
The comparison
Both columns, one framework
X
Microsoft
Situation strength
Extremely weak: sole owner, no board, direct audience
Strong: 130,000 staff, a board, investors; norms redesigned
Trait expression
Undiluted; as at Tesla and SpaceX
Filtered; empathy made a norm
Outcome to date
~80% cut; ad revenue down >45%; ~1/5 to 1/3 of price
$300B to $3T; second company ever
Rival explanation
Ad recession, 2022 to 2023
Cloud and AI waves; Azure momentum
Perceptual trap
Attribution error: all character
Halo: success backfills every trait
One framework has to explain both columns.
The two cases, side by side
One case at each end of the band. Now put them side by side, two columns and one framework. And notice that neither header is red, because a red column would be me telling you which company won, and three of these rows have no winner in them at all. Look at the last row especially. Each side has a different perceptual trap waiting for you, not a better one. With X you are tempted to explain everything by character. With Microsoft you are tempted by the halo, where a big success quietly backfills every trait as a virtue. So read across, not down. A pure trait theory has to explain why the same dispositions built a rocket company. A pure situationist theory has to explain why nobody before Nadella did what Nadella did.
CSUN Nazarian|College of Business & Economics
Chapter 2
Analytical interpretation
What the pairing cannot show
What the pairing does support is the interactionist synthesis.
Not an experiment
No control, no counterfactual. Two episodes compared after the fact.
Still running
X was marked back up to about $13 billion by December 2024, with advertisers returning.
Selected on the outcome
Survivor-story selection: the cloud and AI waves lifted every incumbent that caught them.
Neither case is an experiment, and both stories are still running.
What the cases do not show
Before we land this, let me tell you what these two cases cannot do, because that is part of using evidence honestly. Three boxes here, and they are empty on purpose. No control group. No counterfactual Microsoft that kept the old culture, and no counterfactual X with a board. Both stories are also still running, which is easy to forget when a case study has a tidy ending. X was marked back up to about thirteen billion by December twenty twenty-four, with advertisers returning. And selection is doing some work here too. The cloud and artificial intelligence waves lifted every incumbent that caught them, so we are looking at a survivor and calling it a lesson. What the pairing does support is the interactionist synthesis, and I would defend that one anywhere. It is just a smaller conclusion than the story wants to be.
CSUN Nazarian|College of Business & Economics
Chapter 2
Part four · synthesis
The chapter's four answers
Four conclusions survive the evidence.
- 01Traits predict, modestly and in aggregateConscientiousness comes closest to universal
- 02Situation strength decides the volumeWeak amplifies; strong mutes
- 03Perception tilts toward dispositionsWrite the situational explanation first
- 04Feelings are part of the jobDesign work that requires less pretending
Traits are real. Their payoff depends on the situation.
The chapter's four answers
So where does all of that leave us? Four answers survive the evidence, and each one comes with a boundary attached. Traits predict, modestly and in aggregate, and conscientiousness comes closest to universal. Situation strength decides the volume. Weak situations amplify, strong ones mute, and that is the idea that finally settled the nineteen-sixties fight. Perception tilts toward character, silently, underneath every hiring decision and every performance review you will ever read, so write the situational explanation first. And feelings are part of the job, which makes the manager’s task designing work that requires less pretending. What I take away is this. Traits are real and they matter. What they are worth depends on where you put them.