Emotions and Moods in Organizational Behavior

Introduction: Leadership and Organizational Culture

Creating a highly effective work environment and culture within an organization begins when leaders choose to concentrate on being transformational in their approach rather than merely transactional or short-term in focus. Many of the best-run and most perennially profitable organizations today have embraced transformational leadership and its contributing factors of trust, clarity, and full disclosure — including open communication about financial performance and the reasons behind organizational change. When a platform of trust exists, organizations thrive and the culture reflects openness and innovation, with a fair degree of risk-taking as well.

In closed cultures where leadership is more focused on transactional approaches to management — namely immediate rewards or punishment — creativity withers and innovation stalls. Over time, these transactionally oriented organizations find themselves being overtaken on the competitive track of new products and services by far more nimble, transformationally led competitors. It is instructive to observe how these differences impact employees' daily lives and how they shape perceptions of job roles and expectations.

How Leaders Shape Employee Emotions and Moods

Despite what many theorists have argued, managers and leaders exert a very strong influence on employees' internal perceptions of events and their valuation — whether positive or negative. Many managers and company leaders do not realize it, but their attitudes and reactions to events and information are emulated and even amplified by their subordinates. A negative reaction from leadership can send a reverberating shock wave through the entire company. Likewise, leaders can dramatically improve morale and ongoing productivity by framing an event, news item, or competitive development from an opportunistic standpoint rather than a fearful or purely risk-averse one.

All of these signals from leaders have a major impact on organizational culture, morale, and employees' perception of how the company is performing. They also form the fabric of how employees view themselves, their value, and their role — regardless of the organization's size.

Transformational Leadership, Vision, and Motivation

Leaders owe it to their subordinates to be transformational rather than transactional. Excellent leaders have the ability to define a compelling vision and then provide individualized guidance and support — including coaching and mentoring — so that each employee not only understands their value to the vision but also sees how their own progress contributes to its achievement. This is what genuinely energizes employees. It is not money; it is the ability to participate in making a compelling, fascinating vision a reality. As Daniel Pink has argued in his work on motivation, autonomy, mastery, and purpose matter more than cash incentives.

Conclusion: Trust as a Catalyst for Organizational Renewal

Changing the behavior and morale of a business starts with a focus on transformational leadership and proceeds through the creation and continual strengthening of trust. The best-run organizations today have been able to transform trust into a catalyst of continual renewal, growth, and change. Apple's well-known culture of internal secrecy may appear extreme from the outside, yet internally the trust it generates has proven such a powerful accelerator that few competitors in smartphones, tablet PCs, or digital media have been able to overtake it. This organization and others like it have learned that building a strong fabric of interpersonal reliance and trust can accomplish more in less time and for less money than even the most advanced enterprise-wide planning and execution systems.