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MBA Leadership and Organisational Behaviour Course Guide Template

Competencies, 13-session roadmap, key concepts, biases, power, leadership theories, culture, Tallow Creek mini-case and teaching note, rubric, exam plan

MBA 및 경영대학원전체Kahneman and Tversky 1979; French and Raven 1959; Burns 1978; Bass 1985; Schein 1985leadershipguide

사용법: Use it when you start the leadership and organisational behaviour core or prepare its exam. Map your syllabus onto the roadmap first, then prepare the Tallow Creek mini-case alone before reading the teaching note. The main pitfall is naming models without applying them to the evidence in the exhibits.

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Course Guide: Leadership and Organisational Behaviour, [Course name and term]

A course guide for the leadership and organisational behaviour (OB) core of a leading MBA programme: individual differences, perception and decision biases, motivation, teams, power and influence, leadership theories, organisational culture, leading change and ethics in leadership. It gives a 13-session roadmap, a key-concepts table that links every card, an original mini-case at Tallow Creek Medical Center with exhibits and a teaching note, grading rubrics, an exam plan and a self-test. It is for incoming and current MBA students, and for managers who want the core of the course in one place. Source basis: the original works of the field (for example Kahneman and Tversky 1979; French and Raven 1959; Burns 1978; Bass 1985; Schein 1985; Hackman 2002; Kotter 1996), written up in original words. Every person, organisation and number in the mini-case is fictional and was computed in Python. Replace every [bracketed] value and every row marked Example.

Document control

FieldValue
Course[Course name, code, term]
Programme[Full-time MBA / EMBA / part-time]
Faculty[Professor names]
Learning team[Team name or number]
Grading weights[Example: participation 30%, individual case write-up 25%, team project 20%, final exam 25%]
Main textbook or reader[As listed in the syllabus]
Reviewed by[Mentor, coach or second-year student]
Version[0.1]
Last updatedYYYY-MM-DD

Contents

What the course is for

Most MBA graduates are hired for analytical skill and promoted, or not, for how well they lead people. The OB and leadership core gives you evidence-based models of why people and groups behave as they do at work, and practice in using them to diagnose situations and act. Unlike finance or accounting, there is rarely one right number; the skill being graded is the quality of diagnosis (which model fits, what the evidence says), the realism of the action plan and your own self-awareness as a leader.

The course builds the competencies that accreditation bodies and employers expect from graduate business education. As of October 2026, AACSB members ratified the Global Standards for Business Education on 20 April 2026, replacing the 2020 standards: nine standards grouped under Strategic Management, Learner Success and Pathways to Impact. AACSB describes 2026-27 as a pilot year, with the new standards required for continuous-improvement visits from 2027-28 (check https://www.aacsb.edu for the current text). The competency map below uses the common learning-goal areas set out for this library in mba/mba-core-curriculum-map.

CompetencyWhat this course addsWhere in the roadmap
Analytical and quantitative reasoningDiagnosing behaviour with models; reading engagement, turnover and survey data; expected-value reasoning about people decisionsSessions 2, 4, 6, 10
Ethical decision makingBounded ethicality, ethical leadership, speaking up, incentive side effectsSessions 2, 4, 12
CommunicationFraming, influence, giving and receiving feedback, case discussionSessions 7, 9, 11
Leadership and teamworkLeadership theories, team design, psychological safety, conflictSessions 5, 6, 8, 9
Global perspectiveCultural dimensions, leadership across culturesSessions 1, 10
Technology, data and AIChange management for technology adoption, people analytics limitsSessions 6, 11

Prerequisites

PrerequisiteWhyTemplate
Case method basicsMost sessions are case discussionsmba/mba-case-reading-guide, mba/mba-case-prep-sheet
A working learning teamTeam sessions use your own team as datamba/mba-learning-team-charter
Basic descriptive statisticsReading survey means, spread and agreementmba/pre-mba-quant-refresher
Expected valueSession 2 decision exercisesmba/mba-decision-trees-card
A record of your own leadership experienceSelf-assessment and reflection papersmba/mba-readiness-self-assessment, mba/mba-learning-journal

Session roadmap

SessionTopicCard to readCase or exerciseDeliverable
1Individual differences: personality, values, culturemba/mba-leadership-360-reflectionSelf-assessment and a cultural-values comparisonPersonal leadership baseline (one page)
2Perception, attribution and decision biasesThis guide, "Perception and decisions"Mini-case Exhibit 4 (framing pair)Bias audit of one past decision
3Motivation I: needs, self-determination, job designmba/mba-motivation-cardJob redesign exercise (Worked example A, parts 1 and 2)MPS for your last job
4Motivation II: goals, expectancy, fairness, incentivesmba/mba-motivation-cardIncentive design (Worked example A, parts 3 and 4)Critique of an incentive plan
5Teams I: development and psychological safetymba/mba-team-dynamics-cardTeam-health survey of your learning teamSurvey summary and two actions
6Teams II: decisions, conflict, diversitymba/mba-team-dynamics-cardGroup decision exercise with hidden informationDecision log and debrief
7Power, politics and influenceThis guide, "Power, politics and influence"; mba/mba-negotiation-guideInfluence map for a change you want to makeStakeholder and influence plan
8Leadership I: traits, behaviours, contingencymba/mba-leadership-360-reflectionSituational diagnosis of three direct reportsStyle-fit table
9Leadership II: transformational, authentic, servantmba/mba-interpersonal-dynamics-journalLeadership story exerciseJournal entry on a moment of influence
10Organisational cultureThis guide, "Culture"Mini-case (full preparation)Case prep sheet (mba/mba-case-prep-sheet)
11Leading changemba/mba-change-management-cardChange plan for the mini-case or a field projectForce field, stakeholder map, ADKAR plan
12Ethics in leadershipmba/mba-ethics-guideSpeaking-up dilemma role playPersonal ethics commitments
13Integration and personal leadership planAll cardsMini-case discussion and teaching noteFinal case write-up and leadership plan

Key concepts

ConceptOriginator and yearOne-line meaningCard or section
Big Five personality traitsBarrick and Mount 1991 (job performance meta-analysis)Openness, conscientiousness, extraversion, agreeableness, neuroticism; conscientiousness predicts performance across jobsCore ideas: individual differences
Heuristics and biasesTversky and Kahneman 1974Mental shortcuts (availability, representativeness, anchoring) cause systematic errorsCore ideas: perception and decisions
Prospect theoryKahneman and Tversky 1979Outcomes judged as gains or losses from a reference point; losses loom largerCore ideas; mini-case Exhibit 4
Framing effectTversky and Kahneman 1981Equivalent descriptions of the same choice lead to different choicesMini-case Exhibit 4
Bounded rationalitySimon 1955People satisfice under limits of information and attentionCore ideas
Fundamental attribution errorRoss 1977Over-attributing others' behaviour to disposition, under-weighting the situationTeaching note
Escalation of commitment, sunk costStaw 1976; Arkes and Blumer 1985Continuing a failing course because of past investmentTeaching note
Needs, job design, expectancy, goals, equity, self-determinationMaslow 1943; Herzberg 1959; Vroom 1964; Adams 1965; Hackman and Oldham 1976; Deci and Ryan 1985; Locke and Latham 1990Why people put effort into workmba/mba-motivation-card
Team stages, psychological safety, team conditionsTuckman 1965; Edmondson 1999; Hackman 2002How teams develop and what makes them effectivemba/mba-team-dynamics-card
Groupthink, social loafing, conflict typesJanis 1972; Latané et al. 1979; Jehn 1995Predictable group process lossesmba/mba-team-dynamics-card
Bases of powerFrench and Raven 1959Reward, coercive, legitimate, referent and expert powerCore ideas: power
Principles of influenceCialdini 1984Reciprocity, commitment and consistency, social proof, liking, authority, scarcity (unity added in the 2021 edition)Core ideas: power
Trait approachStogdill 1948; Judge et al. 2002Some traits relate to leader emergence and effectiveness, modestlyCore ideas: leadership
Consideration and initiating structureJudge, Piccolo and Ilies 2004 (meta-analysis of the Ohio State dimensions)People-oriented and task-oriented leader behaviourCore ideas: leadership
Contingency and situational modelsFiedler 1967; Hersey and Blanchard 1969; House 1971The best style depends on followers and situationCore ideas: leadership
Transformational leadershipBurns 1978; Bass 1985Leaders raise followers' motivation and goals beyond self-interestCore ideas: leadership
Authentic and servant leadershipAvolio and Gardner 2005; Greenleaf 1977Self-awareness and transparency; leading by serving followers' growthCore ideas: leadership
Levels of cultureSchein 1985Artefacts, espoused beliefs and values, basic underlying assumptionsCore ideas: culture
Leading changeLewin 1947; Kotter 1996; Hiatt 2006Force field, eight stages, individual ADKAR sequencemba/mba-change-management-card
Ethical leadershipBrown, Treviño and Harrison 2005Leaders who model and reward ethical conductmba/mba-ethics-guide

Core ideas by topic

Individual differences

People differ in stable traits, abilities, values and preferences, and these differences predict behaviour at work modestly but reliably. The Big Five model is the most widely used trait framework. Barrick and Mount (1991) found in a meta-analysis that conscientiousness was a consistent predictor of job performance across occupations; other traits mattered for some jobs (extraversion for sales and management). Judge, Bono, Ilies and Gerhardt (2002) found extraversion the strongest Big Five correlate of leadership, with conscientiousness and openness also related. The practical lessons: use structured, job-related assessment rather than intuition in hiring, do not over-read type labels from popular instruments, and remember that situations often matter as much as traits.

Culture is a second source of difference. Hofstede (1980) described national cultural dimensions such as power distance and individualism; the GLOBE study (House et al. 2004) linked cultural values to preferred leadership attributes. These are averages for countries, not descriptions of individuals; use them as hypotheses to test, never as stereotypes.

Perception and decisions

Managers decide with limited time, information and attention. Simon (1955) called this bounded rationality: people "satisfice", choosing the first option that is good enough. Tversky and Kahneman (1974) showed that judgement relies on heuristics that cause predictable errors: availability (judging frequency by how easily examples come to mind), representativeness (judging probability by similarity to a stereotype, neglecting base rates) and anchoring (insufficient adjustment from a starting number). Prospect theory (Kahneman and Tversky 1979) describes choice under risk: people evaluate outcomes as gains or losses relative to a reference point, the value function is concave for gains and convex for losses, and losses weigh more than equal gains. The framing effect (Tversky and Kahneman 1981) follows: the same options described as gains lead to risk aversion, described as losses to risk seeking. Kahneman (2011) summarised the field in terms of a fast, intuitive System 1 and a slow, deliberate System 2.

Other errors that matter in organisations are the fundamental attribution error (Ross 1977), in which we explain others' behaviour by their character and our own by the situation; escalation of commitment (Staw 1976) and the sunk cost effect (Arkes and Blumer 1985), in which past investment keeps a failing course alive; and overconfidence. Practical de-biasing tools: decide the decision criteria before seeing options, use outside-view base rates, ask "what would have to be true", run a pre-mortem, separate who proposes from who evaluates, and reframe a choice both as a gain and as a loss before deciding.

Motivation

See mba/mba-motivation-card. The key exam skill is matching the theory to the problem: job design when the work is thin, goals and expectancy when the path from effort to reward is unclear, equity and justice when people see the system as unfair, self-determination when control and growth are missing.

Teams

See mba/mba-team-dynamics-card: development over time, psychological safety, Hackman's five conditions, decision rules, groupthink, social loafing and conflict types, with a computed team-health survey.

Power, politics and influence

Power is the capacity to influence others. French and Raven (1959) identified five bases: reward (control over things people value), coercive (ability to punish), legitimate (authority of the role), referent (identification and respect) and expert (knowledge). Raven later added informational power. Positional bases (reward, coercive, legitimate) secure compliance; personal bases (referent, expert) more often secure commitment. Influence tactics turn power into action. Cialdini (1984) described principles of persuasion that operate across settings: reciprocity, commitment and consistency, social proof, liking, authority and scarcity; the 2021 edition added unity (shared identity). Use them to communicate a good case well; using them to manipulate is an ethical failure and usually backfires when discovered. Organisational politics is the use of influence outside formal channels; mapping who holds which power and who cares about an issue (the stakeholder map in mba/mba-change-management-card) is the practical tool.

Leadership theories

ApproachCore claimEvidence and limitsManagerial use
Trait (Stogdill 1948; Judge et al. 2002)Some personal traits relate to emerging as and being an effective leaderStogdill found no universal trait list; later meta-analyses find modest correlationsSelf-awareness, development, selection with care
Behavioural (Ohio State dimensions; Judge, Piccolo and Ilies 2004)Consideration and initiating structure both matterBoth relate to outcomes; consideration more to satisfactionBalance task clarity and care
Contingency (Fiedler 1967)Effectiveness depends on fit between a stable style and situation favourablenessMixed support; measurement debatedChange the situation, not only the person
Situational (Hersey and Blanchard 1969)Adjust directing and supporting to the follower's readiness for the taskIntuitive and widely taught; limited empirical supportDiagnose each person per task
Path-goal (House 1971)Leaders clarify paths to goals and remove obstacles, adapting style to task and followerPartial supportLinks leadership to expectancy theory
Transformational (Burns 1978; Bass 1985)Leaders raise followers' aims through idealised influence, inspirational motivation, intellectual stimulation and individualised consideration, beyond transactional exchangeStrong correlations with outcomes (Judge and Piccolo 2004); contingent reward also effectiveVision with individual attention
Authentic (Avolio and Gardner 2005; Walumbwa et al. 2008)Self-awareness, balanced processing, internalised moral perspective, relational transparencyOverlaps with transformational and ethical leadershipReflection, feedback, consistency
Servant (Greenleaf 1977; Eva et al. 2019)Leaders prioritise followers' growth and well-being and the wider communityGrowing evidence; definitions variedCoaching, removing obstacles, stewardship

A useful exam answer does not pick one theory as true. It uses the trait and behavioural view to describe the leader, the contingency view to judge fit, and the transformational, authentic or servant view to propose how the leader could raise commitment, and it names the limits of each.

Organisational culture

Schein (1985, 1990) defined culture as the pattern of basic assumptions a group has learned while solving its problems, which has worked well enough to be taught to new members. He described three levels: artefacts (visible structures, processes, dress, language, rituals: easy to see, hard to decode), espoused beliefs and values (strategies, goals, stated philosophies) and basic underlying assumptions (taken-for-granted beliefs that actually drive behaviour). When espoused values and assumptions conflict ("we value speaking up" versus "people who raise problems get side-lined"), behaviour follows the assumptions. Leaders shape culture mainly through what they pay attention to, measure and control, how they react to crises, what they reward, and whom they hire, promote and remove.

Leading change

See mba/mba-change-management-card: force-field analysis, Kotter's eight stages, ADKAR barrier points, resistance, stakeholder mapping and a computed change plan.

Ethics in leadership

Brown, Treviño and Harrison (2005) defined ethical leadership as showing appropriate conduct personally and promoting it in followers through communication, reinforcement and decisions. Bazerman and Tenbrunsel (2011) argue that most unethical behaviour in organisations comes from ordinary people who do not see the ethical dimension of a decision (bounded ethicality), helped by goals, incentives and framing that hide it. Leaders reduce the risk by naming the ethical dimension of decisions, designing goals with guard-rails (mba/mba-motivation-card), protecting people who speak up, and acting visibly when standards are broken. See mba/mba-ethics-guide.

Mini-case: the emergency department at Tallow Creek

Situation

Daniel Mensah had been director of nursing for the emergency department (ED) at Tallow Creek Medical Center for five months when the chief nursing officer, Priya Raman, asked him for a 90-day plan. Tallow Creek is a 420-bed regional hospital. Its ED had long been proud of its speed, and the hospital's values statement, framed in every corridor, began with "Every voice keeps patients safe."

Daniel came from the hospital's intensive care unit, where he had led a stable, highly experienced team that preferred a hands-off manager. In the ED he found a different picture. Visits had grown every year (Exhibit 3), while the number of registered nurses actually employed had fallen (Exhibit 1). Agency nurses filled the gaps at almost twice the hourly cost of employed staff (USD 118 against USD 61). His predecessor had run the department through tight control: rotas and assignments were decided by the director and two day-shift charge nurses, and problems were dealt with in private.

In his second month, Daniel agreed with the ED medical director, Dr. Lucía Ferreira, to introduce a split-flow model in which lower-acuity patients are seen in a separate stream. It was a sound idea with good evidence from other hospitals. Daniel announced it by e-mail with a three-week start date, attaching a 30-page protocol. Day-shift staff had been part of the design group; the night shift had not. Two weeks after the launch, two senior night nurses resigned. Daniel told Priya that they "had never been team players".

Tomasz Wójcik, the longest-serving night charge nurse, was widely respected: new nurses asked him rather than the protocol what to do. He told Daniel in a corridor that the night shift felt "managed by e-mail". He also mentioned that a medication near-miss two weeks earlier had not been reported until a patient's daughter complained; the nurse involved said she "did not want to be the next person written up".

The pulse survey (Exhibit 2) arrived in the same week. The ED scored below the hospital average on every item, most of all on recommending the ED as a place to work.

The chief financial officer, Grace Liu, proposed renewing the agency contract for two years to lock in the current rate. Daniel had signed the agency expansion a year earlier and had defended it at two budget meetings. An alternative came from the nurses' practice council: a USD 450,000 retention programme (self-scheduling, a night-shift preceptor role, protected education time and a clear clinical ladder). Grace's memo described it as "a gamble that could add USD 450,000 to a budget that is already over"; the council's memo described the same programme as "the only option that could save more than USD 600,000 a year". Exhibit 4 sets out the numbers both memos used.

Priya was clear about what she needed: "I want a plan that fixes staffing and makes the ED safe to speak up in. And I want to know what you will do differently as a leader."

Exhibit 1: ED registered nurse staffing (fictional)

ItemFY2024FY2025FY2026Excel formula (FY2026 column D)
Budgeted RN positions969698input
Average RNs employed888479input
Vacancies81219=D2-D3
Vacancy rate8.3%12.5%19.4%=(D2-D3)/D2
RN separations (leavers)141924input
Turnover rate15.9%22.6%30.4%=D6/D3
Agency hours9,80016,40024,600input
Agency spend at USD 118 per hourUSD 1,156,400USD 1,935,200USD 2,902,800=D8*118
Agency premium over employed rate (USD 118 - 61)USD 558,600USD 934,800USD 1,402,200=D8*(118-61)
Turnover cost at USD 52,000 per leaver (assumption)USD 728,000USD 988,000USD 1,248,000=D6*52000

Exhibit 2: Pulse survey, mean scores on a 1 to 5 scale (fictional)

Item (original wording)EDHospitalGap
I can raise a safety concern without fear2.93.8-0.9
My manager explains the reasons for decisions2.63.5-0.9
Workload is manageable on most shifts2.13.0-0.9
I see a path to grow here3.03.3-0.3
I would recommend the ED as a place to work2.43.6-1.2
Average of the five items2.603.44-0.84

Exhibit 3: Patient flow (fictional)

ItemFY2024FY2025FY2026
ED visits61,20064,80068,900
Visits per day167.7177.5188.8
Median door-to-provider time (minutes)344152
Left without being seen2.1%3.4%4.8%
Patients who left without being seen1,2852,2033,307
Visits per average employed RN695771872

From FY2024 to FY2026, visits rose 12.6% (=68900/61200-1) while employed RNs fell 10.2% (=79/88-1).

Exhibit 4: The retention decision, as both memos used it (fictional)

Status quo for FY2027 assumes FY2026 repeats. The programme costs USD 450,000. The council estimates a 60% chance that it works, cutting leavers to 14 and agency hours to 15,000; if it fails, FY2026 costs repeat plus the programme cost.

ScenarioAgency premiumTurnover costProgrammeTotalExcel formula
Status quo (renew agency only)USD 1,402,200USD 1,248,0000USD 2,650,200=24600*57+24*52000
Programme works (60%)USD 855,000USD 728,000USD 450,000USD 2,033,000=15000*57+14*52000+450000
Programme fails (40%)USD 1,402,200USD 1,248,000USD 450,000USD 3,100,200=2650200+450000
Programme, expected costUSD 2,459,880=0.6*2033000+0.4*3100200

The finance memo framed the programme as a possible USD 450,000 loss; the council memo framed it as a possible USD 617,200 saving (=2650200-2033000). Both are correct descriptions of the same gamble.

Discussion questions

  1. Use Exhibits 1 and 3 to describe the ED's situation in three sentences. What is cause and what is symptom?
  2. How did Daniel explain the two resignations, and which attribution error might he be making? What other explanations do the exhibits and the situation support?
  3. Compute the expected saving of the retention programme and the probability of success at which it breaks even. How do framing and Daniel's earlier commitment to the agency expansion shape the decision?
  4. Analyse the ED's culture with Schein's three levels. Which basic assumption explains the unreported near-miss?
  5. Diagnose Daniel's leadership with a situational and a transformational lens. Which power bases does he rely on, and which does Tomasz hold?
  6. Draft Daniel's 90-day plan: three actions on staffing, three on psychological safety and one on his own leadership, each with a measure.

Typical assignments and how they are graded

Assignment (Example)Typical formWeightWhat is assessed
Class participationCold calls and voluntary contributions in case discussion20 to 40%Quality over quantity: analysis, building on others, moving the discussion forward (log it in mba/mba-class-participation-log)
Individual case write-up1,500 to 2,500 words or a short memo with exhibits20 to 30%Diagnosis with theory, use of case evidence and numbers, realistic recommendations
Reflection paper or leadership planPersonal analysis using 360 feedback and course models10 to 25%Self-awareness, honest evidence, specific development actions
Team projectField study or analysis of an organisation, with a presentation15 to 25%Insight, use of course concepts, team process (peer evaluation often adjusts individual grades)
Final examCase-based, open or closed book0 to 30%Speed and accuracy of diagnosis under time pressure

Rubric for a case write-up (Example).

CriterionExcellentAdequateWeak
Diagnosis (30%)Identifies root causes, separates them from symptoms, uses two or three models that fitIdentifies main issues, uses one model correctlyRestates the case, models named but not applied
Use of evidence (25%)Uses exhibits with correct computations, notes data limitsSome numbers, mostly correctNo numbers or wrong computations
Recommendations (25%)Specific, sequenced, owner and measure for each, trade-offs and risks statedReasonable but generalVague ("improve communication")
Self and ethics (10%)Names the ethical dimension and the leader's own roleMentions ethicsIgnores both
Writing (10%)Clear structure, executive summary, within the limitReadableDisorganised or over the limit

Exam preparation plan

WhenActivityTemplate
Week -3Turn the key-concepts table into flashcards; self-test dailymba/mba-concept-flashcards
Week -3Redo the self-tests in the motivation, team dynamics and change cards from memoryThe three cards
Week -2Do two timed case analyses (90 minutes each), one of them this mini-casemba/mba-case-prep-sheet
Week -2Log every miss and its causemba/mba-error-log
Week -1Write a one-page "which model when" map; practise explaining each model aloud in two minutesmba/mba-exam-prep
Day -2Light review of flashcards and the error log; no new materialmba/mba-exam-prep

Exam technique for case-based OB exams: spend the first 15% of the time reading and diagnosing, state the problem in one sentence, choose two or three models that fit, use at least two numbers from the exhibits, and finish with a sequenced action plan with measures.

Common struggles

  1. "It is just common sense." Many findings contradict intuition (contingent rewards and interest, task conflict on average, the illusion of unanimity). Know the evidence, not just the label.
  2. Name-dropping models. Graders reward applying one model well over listing five.
  3. Ignoring the numbers. OB cases have exhibits; turnover, engagement and cost data make a diagnosis credible.
  4. Blaming individuals. Look at the situation, the system and the leader's own part first (attribution error).
  5. Generic recommendations. "Improve communication" earns little; "weekly night-shift huddle led by the director for 8 weeks, measured by the speak-up survey item" earns a lot.
  6. Reflection papers without evidence. Use 360 feedback, specific incidents and what you will do differently.
  7. Treating culture as values statements. Culture is in the assumptions that drive behaviour.
  8. Under-preparing for participation. Prepare two or three specific points per case and track them.

Reading list

  • Barrick, M. R., and Mount, M. K. (1991). The Big Five personality dimensions and job performance: a meta-analysis. Personnel Psychology, 44(1), 1-26.
  • Judge, T. A., Bono, J. E., Ilies, R., and Gerhardt, M. W. (2002). Personality and leadership: a qualitative and quantitative review. Journal of Applied Psychology, 87(4), 765-780.
  • Hofstede, G. (1980). Culture's Consequences. Sage. House, R. J., et al. (eds.) (2004). Culture, Leadership, and Organizations: The GLOBE Study of 62 Societies. Sage.
  • Simon, H. A. (1955). A behavioral model of rational choice. Quarterly Journal of Economics, 69(1), 99-118.
  • Tversky, A., and Kahneman, D. (1974). Judgment under uncertainty: heuristics and biases. Science, 185(4157), 1124-1131.
  • Kahneman, D., and Tversky, A. (1979). Prospect theory: an analysis of decision under risk. Econometrica, 47(2), 263-291.
  • Tversky, A., and Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211(4481), 453-458.
  • Tversky, A., and Kahneman, D. (1992). Advances in prospect theory: cumulative representation of uncertainty. Journal of Risk and Uncertainty, 5(4), 297-323.
  • Kahneman, D. (2011). Thinking, Fast and Slow. Farrar, Straus and Giroux.
  • Ross, L. (1977). The intuitive psychologist and his shortcomings: distortions in the attribution process. Advances in Experimental Social Psychology, 10, 173-220.
  • Staw, B. M. (1976). Knee-deep in the big muddy: a study of escalating commitment to a chosen course of action. Organizational Behavior and Human Performance, 16(1), 27-44.
  • Arkes, H. R., and Blumer, C. (1985). The psychology of sunk cost. Organizational Behavior and Human Decision Processes, 35(1), 124-140.
  • French, J. R. P., and Raven, B. (1959). The bases of social power. In D. Cartwright (ed.), Studies in Social Power. Institute for Social Research, University of Michigan.
  • Cialdini, R. B. (1984). Influence: The Psychology of Persuasion. William Morrow. New and expanded edition (2021), Harper Business.
  • Stogdill, R. M. (1948). Personal factors associated with leadership: a survey of the literature. Journal of Psychology, 25(1), 35-71.
  • Judge, T. A., Piccolo, R. F., and Ilies, R. (2004). The forgotten ones? The validity of consideration and initiating structure in leadership research. Journal of Applied Psychology, 89(1), 36-51.
  • Fiedler, F. E. (1967). A Theory of Leadership Effectiveness. McGraw-Hill.
  • Hersey, P., and Blanchard, K. H. (1969). Life cycle theory of leadership. Training and Development Journal.
  • House, R. J. (1971). A path goal theory of leader effectiveness. Administrative Science Quarterly, 16(3), 321-339.
  • Burns, J. M. (1978). Leadership. Harper and Row.
  • Bass, B. M. (1985). Leadership and Performance Beyond Expectations. Free Press.
  • Judge, T. A., and Piccolo, R. F. (2004). Transformational and transactional leadership: a meta-analytic test of their relative validity. Journal of Applied Psychology, 89(5), 755-768.
  • Avolio, B. J., and Gardner, W. L. (2005). Authentic leadership development: getting to the root of positive forms of leadership. The Leadership Quarterly, 16(3), 315-338.
  • Walumbwa, F. O., Avolio, B. J., Gardner, W. L., Wernsing, T. S., and Peterson, S. J. (2008). Authentic leadership: development and validation of a theory-based measure. Journal of Management, 34(1), 89-126.
  • Greenleaf, R. K. (1977). Servant Leadership. Paulist Press.
  • Eva, N., Robin, M., Sendjaya, S., van Dierendonck, D., and Liden, R. C. (2019). Servant leadership: a systematic review and call for future research. The Leadership Quarterly, 30(1), 111-132.
  • Schein, E. H. (1985). Organizational Culture and Leadership. Jossey-Bass. Schein, E. H. (1990). Organizational culture. American Psychologist, 45(2), 109-119.
  • Brown, M. E., Treviño, L. K., and Harrison, D. A. (2005). Ethical leadership: a social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97(2), 117-134.
  • Bazerman, M. H., and Tenbrunsel, A. E. (2011). Blind Spots: Why We Fail to Do What's Right and What to Do about It. Princeton University Press.
  • Motivation, teams and change: see the sources in mba/mba-motivation-card, mba/mba-team-dynamics-card and mba/mba-change-management-card.
  • Textbooks, by name only: Robbins, S. P., and Judge, T. A., Organizational Behavior (Pearson); Yukl, G., Leadership in Organizations (Pearson); Northouse, P. G., Leadership: Theory and Practice (Sage); Bazerman, M. H., and Moore, D. A., Judgment in Managerial Decision Making (Wiley).
  • Open resource: OpenStax, Organizational Behavior (CC BY-NC-SA 4.0), https://openstax.org/details/books/organizational-behavior.

Self-test

  1. Name the five bases of power in French and Raven (1959). Which ones tend to produce commitment rather than compliance?
  2. What does prospect theory predict about choices framed as gains and as losses? Give the evidence from Tversky and Kahneman (1981).
  3. Explain the difference between transactional and transformational leadership, with the originators.
  4. Name Schein's three levels of culture and give one ED example of each from the mini-case.
  5. Using Exhibit 1, compute the FY2025 turnover rate and vacancy rate with the Excel formulas.
  6. Using Exhibit 4, compute the programme's expected saving and its break-even probability of success.
  7. Which Big Five trait most consistently predicts job performance (Barrick and Mount 1991), and which is most strongly related to leadership (Judge et al. 2002)?
  8. What is the main criticism of situational leadership (Hersey and Blanchard 1969)?
  9. Define bounded ethicality and give one leadership practice that reduces it.
  10. Give three de-biasing techniques a leader can build into a team's decision process.

Answer key

  1. Reward, coercive, legitimate, referent, expert. Referent and expert power tend to produce commitment; positional bases tend to produce compliance.
  2. With gains, people prefer the sure option (risk averse); with losses, they prefer the gamble (risk seeking). Tversky and Kahneman (1981) showed that an equivalent pair of programmes described in terms of lives saved led most people to the sure option, while the same programmes described in terms of deaths led most to the risky option.
  3. Transactional leadership exchanges rewards for performance; transformational leadership raises followers' goals and motivation beyond self-interest through vision, intellectual stimulation, individual attention and example. Burns (1978) introduced the distinction; Bass (1985) developed it for organisations and its measurement.
  4. Artefacts: the framed values statement, rotas decided by the director, near-misses handled in private. Espoused value: "every voice keeps patients safe". Basic assumption: "raising a problem gets you written up", which explains the unreported near-miss.
  5. Turnover 19 / 84 = 22.6% (=C6/C3); vacancy rate (96 - 84) / 96 = 12.5% (=(C2-C3)/C2).
  6. Expected saving = 2,650,200 - 2,459,880 = USD 190,320 (=2650200-(0.6*2033000+0.4*3100200)). Break-even probability p solves p x 617,200 = (1 - p) x 450,000, so p = 450,000 / 1,067,200 = 42.2% (=450000/(617200+450000)).
  7. Conscientiousness for job performance; extraversion for leadership.
  8. Limited and mixed empirical support, and questions about how follower readiness is defined and measured; it is intuitive and popular in training more than it is validated.
  9. Bounded ethicality: systematic limits that stop ordinary people from seeing the ethical dimension of their own decisions. Practices: name the ethical question explicitly in decisions, add guard-rails to goals, reward people who raise concerns.
  10. Any three: set criteria before seeing options; collect views in writing before discussion; assign a devil's advocate; run a pre-mortem; use base rates from comparable cases; reframe the choice as both gain and loss; separate proposal from evaluation.

Teaching note for the mini-case

Teaching objectives. Apply attribution, framing and escalation concepts to a real-feeling people decision; read staffing and survey data; diagnose culture with Schein's levels; connect leadership style, psychological safety and change management; produce a 90-day plan with measures.

Question 1: the situation. Visits grew 12.6% in two years while employed RNs fell 10.2%, so visits per employed nurse rose from 695 to 872 (+25.4%, =(68900/79)/(61200/88)-1). Turnover nearly doubled (15.9% to 30.4%) and vacancies more than doubled (8 to 19). The flow measures (door-to-provider from 34 to 52 minutes, 3,307 patients leaving unseen) are symptoms of capacity strain; workload (survey 2.1) and the loss of experienced nurses are the mechanism. Agency staffing is a cost symptom, not the cause, and can worsen the cause if permanent staff carry more of the orientation and the hardest patients.

Question 2: attribution. Daniel explains the resignations by the leavers' character ("never team players"), the fundamental attribution error. The situation offers stronger explanations: the night shift was left out of the design, the change was announced by e-mail with three weeks' notice, workload was already the lowest-rated item, and the department's history punished people who raised problems. The same facts would lead an observer to expect more resignations unless the situation changes.

Question 3: framing and escalation. The expected saving is USD 190,320 and the break-even probability is 42.2%, so on the council's own estimate (60%) the programme is worth funding, with a margin for error. The finance memo frames it as a loss relative to the budget, which invites risk aversion; the council frames it as a gain, which invites enthusiasm. A disciplined approach states both outcomes, the probabilities and the expected value, and asks what evidence would update the 60% (results from comparable hospitals, a pilot on nights first). Daniel's prior public defence of the agency expansion creates a risk of escalation of commitment: the money already spent on agency staff is sunk and should not count in the choice. Under prospect theory, if Daniel treats the current budget overrun as a loss already suffered, he might even prefer risky options he would normally avoid; naming the reference point explicitly helps.

Question 4: culture. Artefacts: the framed values statement, decisions by the director and two day-shift charges, problems handled privately, change announced by e-mail. Espoused value: "every voice keeps patients safe". Underlying assumption: "speaking up is risky and decisions come from the top", learned under the previous director and confirmed by Daniel's e-mail launch. The unreported near-miss is the assumption in action. Changing the poster will not help; leaders must change what they attend to and reward, for example thanking the first nurse who reports a near-miss in a huddle and showing what changed as a result.

Question 5: leadership and power. Daniel's ICU style (hands-off with experts) and his e-mail launch (directive without explanation) both misfit an under-staffed, distrustful team facing change; a situational lens calls for more direction on the new process combined with much more support and explanation. A transformational lens points to what is missing: individual consideration (especially for nights) and a shared purpose framed with the staff. Daniel relies on legitimate power; Tomasz holds referent and expert power. A leader who recruits Tomasz as a co-designer and messenger gains influence that no memo can give. Servant-leadership moves (removing obstacles on nights, being present on night shifts) fit the survey's lowest items.

Question 6: a strong 90-day plan (Example).

AreaActionMeasure
StaffingFund the retention programme with a night-shift pilot first; renew agency for 12 months only, not 24Leavers per quarter; agency hours per month
StaffingSelf-scheduling pilot co-designed with night staffSurvey item "workload is manageable"
StaffingStay interviews with every nurse in the first year of serviceShare of first-year nurses retained at 90 days
SafetyBlame-free near-miss reporting policy agreed with the practice council; director thanks reporters in huddlesNear-miss reports per month (expected to rise first)
SafetyNight-shift huddles attended by the director twice a week for 8 weeksSurvey item "I can raise a safety concern without fear"
SafetyRelaunch split flow with an ADKAR pulse by shift and Tomasz as night leadSplit-flow use on nights; door-to-provider time
Own leadership360 feedback at day 60; a named coach; explain reasons for every decision in personSurvey item "my manager explains the reasons for decisions"

Common weak answers. Recommending the agency renewal "because it is certain" without the expected-value comparison; proposing "better communication" without specifying channel, frequency and owner; ignoring the near-miss or treating it as an individual nurse's failure; and blaming Daniel entirely without proposing what he should do.

Closing point for discussion. The case is not about choosing between finance and nursing. It is about a leader recognising how his own attributions, framing and earlier commitments shape what he sees, and changing the conditions so that the team can tell him what he needs to hear.

Revision history

VersionDateAuthorChange summary
0.1YYYY-MM-DD[Your name]First draft from the template
0.2YYYY-MM-DD[Your name]Example: Mapped the roadmap onto my school's 12-session syllabus and replaced the rubric with the faculty's

Standard and licence note

Based on the original works of organisational behaviour and leadership research cited in the reading list (for example Kahneman and Tversky 1979; French and Raven 1959; Burns 1978; Bass 1985; Schein 1985) and on the AACSB 2026 Global Standards for Business Education as described on aacsb.edu in October 2026 for the competency framing. The text, roadmap, rubric, mini-case, exhibits, questions and teaching note are original; no published case, survey instrument or textbook text is reproduced, and Tallow Creek Medical Center and everyone in the case are fictional. This guide is independent and not affiliated with or endorsed by any business school, accreditation body or publisher. Check your own syllabus and the current AACSB text before you rely on it. Template licence: MIT.

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