Indian Institute of Foreign Trade, Delhi

Organization Behaviour
Term Project: Managerial Behavior in Organization

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Submitted To:
Dr. Priyanka Jaiswal
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3M: A Business Overview

1. Founding and Early History:

● Founded: 1902 in Two Harbors, Minnesota, USA.

● Originally a mining venture (Minnesota Mining and Manufacturing Company)

2. Business Evolution and Growth:

● Transitioned into industrial and consumer products in the 1920s.

● Invented iconic products like Scotch Tape (1930) and Post-it Notes (1980), cementing
its reputation for innovation.
● Diversified across healthcare, electronics, transportation, and consumer goods.

3. Growth:

● Entered the global market in the 1950s, expanding to over 70 countries.

● Achieved consistent growth by investing 6% of annual revenue in R&D, driving
innovations like N95 masks.

4. Core Strengths:

● Innovation: Over 100,000 patents, with a focus on solving practical problems.

● Global Presence: 60% of sales from international markets.
● Sustainability: Focus on environmentally friendly practices and products.

5. Recent Performance:

● Shifted focus toward sustainability and health care, addressing global needs like
renewable energy and healthcare innovation.

3M’s business is built on a foundation of innovation, adaptability, and diversification. By

continually investing in R&D and aligning with market demands, it remains a global leader in
multiple industries.

Organizational Challenge in Managing Workforce

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Key Challenges:

3M, a global innovation leader, faces significant organizational challenges in managing its
diverse and dynamic workforce. These challenges stem from its expansive presence in over 70
countries, requiring a fine balance between global strategies and local sensitivities.

1. Globalization:
Operating across different geographies introduces complexities in managing a
workforce characterized by diverse cultural backgrounds, languages, and values. For
instance, policies and practices that work effectively in one region might not resonate
well in another. This requires adaptability in management styles and ensuring global
goals are achieved without compromising local relevance.

2. Technology:
As a company known for its technological innovation, 3M must consistently ensure its
employees are up-to-date with the latest tools and technologies. Upskilling and reskilling
employees to embrace new innovations is critical for maintaining a competitive edge in
the market.

3. Diversity and Inclusion:

As a forward-thinking organization, 3M prioritizes equitable representation across roles
and levels, striving to eliminate bias and create inclusive environments. This involves
addressing challenges such as unconscious bias in hiring, promoting equitable growth
opportunities, and fostering a workplace culture that values all perspectives.

OB Theories and Application:

To address these challenges effectively, 3M integrates key Organizational Behavior theories into
its management practices:

1. Contingency Approach:
Recognizing that there is no one-size-fits-all solution, 3M adapts its management
strategies based on the cultural and operational needs of its various regional teams. This
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approach ensures flexibility while aligning local practices with the organization's
overarching goals.

2. Procedural Justice:
Fairness and transparency in processes, particularly performance evaluations, are
central to 3M’s workforce management. The company ensures consistent and unbiased
procedures across regions to maintain trust and employee satisfaction.

Real-Life Example:

To tackle diversity and inclusion challenges, 3M has implemented Employee Resource

Networks (ERNs). These ERNs, such as the Women’s Leadership Forum, LGBTQ+ initiatives, and
other affinity groups, create platforms for employees to connect, share experiences, and drive
inclusivity within the organization.

For instance:

● The Women’s Leadership Forum works to empower female employees by providing

mentorship, networking opportunities, and resources to foster career growth.
● LGBTQ+ initiatives promote a safe and inclusive environment where employees feel
comfortable expressing their identities.

Such initiatives demonstrate 3M's commitment to leveraging diversity as a strength while

fostering a unified and collaborative organizational culture.

Analysis of 3M's Organizational Leadership

Introduction
3M is renowned for its innovative culture, largely driven by strong and visionary leadership. The
company exemplifies both transformational and servant leadership, focusing on inspiring
employees, fostering inclusiveness, and ensuring employee development.

1. Leadership Styles at 3M
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3M's leadership is a blend of transformational and servant leadership styles. Transformational

leaders at 3M inspire employees to transcend their own interests for the good of the
organization. They motivate employees by setting clear goals, sharing a compelling vision, and
encouraging innovation—attributes central to transformational leadership. For instance, 3M's
CEO, Inge Thulin, emphasized innovation as a core principle, setting a vision that encouraged
product development and exploration of new ideas, which led to the creation of thousands of
new products annually.

In terms of servant leadership, 3M's leaders focus on serving their employees. The company's
approach is not solely profit-oriented; instead, it values the growth and well-being of its people.
Leaders at 3M act as facilitators, providing employees with the tools and support they need. For
instance, the "15% rule," which allows employees to spend 15% of their work time on projects of
personal interest, demonstrates the company's commitment to employee empowerment and
creativity.

2. Correlation with Leadership Theories

Path-Goal Theory: This theory suggests that leaders should clarify the path to achieving goals
and help remove obstacles that employees might face. At 3M, leaders ensure that employees
understand organizational objectives and have the necessary support to innovate. By providing
autonomy (e.g., the 15% rule) and resources, 3M removes barriers to creativity, aligning with the
directive and supportive leadership behaviors outlined in the Path-Goal Theory.

Leader-Member Exchange (LMX) Model: At 3M, leaders form strong relationships with their
teams, focusing on inclusiveness and collaboration. For example, leaders regularly engage with
cross-functional teams, fostering an environment of open communication and inclusivity, which
correlates with the LMX model’s concept of building high-quality relationships between leaders
and their subordinates.

Emotional Intelligence (EI): 3M emphasizes emotional intelligence as a critical aspect of

leadership. Leaders at 3M are encouraged to develop high levels of EI, focusing on empathy,
enthusiasm, and ethics, which are crucial for motivating teams. During challenging times, such
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as economic downturns, emotionally intelligent leadership has helped 3M maintain employee

morale and commitment by addressing concerns transparently and empathetically.

3. Case Study: 3M's Response to Market Challenges

One notable instance that demonstrates 3M's effective leadership was during the COVID-19
pandemic. 3M faced a significant increase in demand for personal protective equipment (PPE),
particularly N95 masks. The leadership at 3M exemplified transformational leadership by quickly
pivoting operations to ramp up production. CEO Mike Roman set a clear direction, aligned teams
across the globe, and inspired employees to meet unprecedented demand levels.

Under Roman's leadership, 3M doubled its global output of N95 masks from 50 million to 100
million per month within a few months, showcasing agility and effective crisis management. The
decision to collaborate with the U.S. government and other stakeholders to ensure the
availability of PPE also highlights the company's servant leadership approach, focusing on the
greater good rather than just profit margins.

4. Key Leadership Takeaways

Inclusiveness and Empowerment: The "15% rule" is a powerful example of how 3M empowers
employees, encouraging them to innovate and contribute beyond their defined roles. This
correlates with the concept of inclusiveness discussed in the presentation, where leaders
involve employees in decision-making, thereby enhancing motivation and creativity.

Leading with Head and Heart: 3M's leadership style also aligns with the "Leading with Head and
Heart" concept. Leaders at 3M use data and strategic thinking (the head) to make informed
decisions, while also focusing on employee well-being and motivation (the heart). This dual
approach has been critical in maintaining 3M's status as an innovation leader.

Adaptability: 3M's response to the pandemic is a testament to the importance of adaptability in

leadership. By setting a clear vision, aligning teams, and motivating employees, 3M successfully
navigated the crisis, highlighting the effectiveness of transformational leadership in times of
uncertainty.
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3M's organizational leadership is a strong example of how combining transformational and

servant leadership styles can foster innovation, employee empowerment, and resilience. By
correlating leadership practices with established theories, it is evident that 3M's success is
driven by a leadership approach that values both the "head" (strategy and direction) and the
"heart" (employee well-being and motivation). The company's ability to adapt quickly to
challenges, empower employees, and maintain a culture of inclusiveness serves as a valuable
case study for effective organizational leadership.

Motivation used for employees

1) Encouraging Autonomy and Creativity:
● 3M’s “15% Rule” allows employees to dedicate up to 15% of their time to personal
innovation projects.
● This aligns with Self-Determination Theory, which emphasizes autonomy as a key
motivator. Employees feel empowered to explore their interests and contribute to the
company’s innovative culture.

2) Recognition and Rewards Programs:

● Programs like the “Carlton Society” recognize employees for outstanding innovations
and contributions.
● The “Golden Step” program rewards employees whose products reach significant sales
milestones.
● These practices align with Herzberg’s Two-Factor Theory, where recognition and
achievement are motivators that lead to job satisfaction.
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3) Alternative Work Arrangements:

● 3M offers flexible work schedules and opportunities for remote work, promoting
work-life balance.
● This approach corresponds to Job Design Theories, emphasizing job enrichment and
alternative work arrangements like telecommuting and flextime.

4) Training and Development Opportunities:

● 3M invests heavily in employee upskilling programs, ensuring that employees remain at
the forefront of technological and industry advancements.
● This practice ties to Maslow’s Hierarchy of Needs, addressing the growth and
self-actualization needs of employees.
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5) Collaborative and Inclusive Work Environment:

● Employees work in cross-functional teams, fostering collaboration and inclusivity.
● Through participative decision-making processes, 3M incorporates Equity Theory,
ensuring that employees feel valued and treated fairly in team settings.

6) Financial Incentives and Stock Options:

● 3M offers variable-pay programs, such as performance bonuses and stock options,
which provide financial motivation.
● This aligns with Expectancy Theory, where employees are motivated if they perceive that
effort leads to performance and rewards (instrumentality) and value those rewards
(valence).
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Team and groups task & performance

1. 1Cross-Functional Teams for Innovation:
● 3M employs cross-functional teams to drive innovation and efficiency. By uniting R&D,
marketing, and manufacturing, the company fosters collaboration, encourages creative
problem-solving, and shortens product development cycles across diverse product lines.
● Tuckman’s Stages of Team Development
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2. Building Open Supervisor-Employee Relationships:

● In 2021, 3M launched a program aimed at enhancing the relationship dynamics between
supervisors and employees, particularly focusing on creating an environment where
vulnerability and openness are encouraged. This initiative was part of a broader cultural
shift within the organization to improve employee engagement and performance.
● Leader-Member Exchange (LMX) Theory: This approach emphasized strong
leader-member relationships for better satisfaction and performance:
● Mutual Trust: Leaders like Mike McCullough build trust by sharing vulnerabilities,
encouraging open communication.
● Supportive Environment: 3M's training equipped supervisors with active listening and
empathy skills to support teams effectively.
● Increased Engagement: Employees felt more engaged when supervisors showed
genuine interest in their well-being, boosting team performance.
● Initiative: Building Open and Vulnerable Supervisor-Employee Relationships:

Program Details: Training sessions for supervisors on how to foster open

communication were designed to help leaders understand the value of being
approachable & relatable.
Implementation: Supervisors would share their own challenges & failures with their
teams. It aimed to break down hierarchical barriers & promote a culture where
employees felt safe expressing their ideas and concerns. Supervisors would share their
own challenges & failures with their teams. It aimed to break down hierarchical barriers &
promote a culture where employees felt safe expressing their ideas and concerns.

Organizational change and development

1. Six Sigma Implementation:
● 3M implemented Six Sigma in 2001 to improve operational efficiency and eliminate
waste. This initially resulted in cost savings and improved financial metrics. However, it
conflicted with 3M’s culture of innovation and experimentation, creating resistance
among employees.
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● Lewin’s Three-Step Change Model

2. Pandemic-Era Restructuring
● In 2020, 3M introduced a global operating model in response to disruptions caused by
the COVID-19 pandemic. This change aimed to improve operational efficiency, enhance
digital engagement, and refocus on high-growth sectors like healthcare and
e-commerce.
● Planned Changes: Prioritized key markets, and adopted digital tools for better customer
engagement. Leadership communicated the need for change, reducing resistance and
aligning employees with organizational goal
● Unplanned Changes: The pandemic disrupted supply chains and altered customer
needs, prompting 3M to quickly adapt its strategy for resilience. Real-time feedback
mechanisms allowed 3M to quickly respond to unforeseen challenges.

3. Creating a Culture for Change: Innovation

● 3M’s "30/4 Rule" mandates that 30% of revenue should come from products developed
in the past four years, driving rapid innovation. This approach reflects the innovation
mindset, where organizational structures, cultural support, and freedom for creativity
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combine to create a dynamic environment capable of transforming industries and

markets.
● Innovation Mindset at 3M: The Innovation Mindset in Action
Stimulating a Culture of Innovation: 3M’s approach encourages experimentation and
risk-taking, with the “15% Rule” allowing scientists and engineers to pursue self-chosen
projects, driving innovation and unexpected breakthroughs.
Encouraging Resourcefulness: 3M’s systems and structures, including seed capital and
dual-career ladders, allow employees to navigate obstacles and pursue their ideas
without fear of failure.

● 3M’s "and thinking" balances short-term goals with long-term innovation. By fostering
resourcefulness and expanding its R&D budget, even during downturns, 3M ensures
continuous innovation. For example, its investment in advanced materials contributed to
the development of medical adhesive products used in surgical dressings and wound
care.