Exploring Management, 2nd Edition Solution Manual

Type:

Solution Manual

Resource:

Exploring Management

Edition:

2nd Edition

Author(s):

John R. Schermerhorn

Schermerhorn Exploring Management 2nd edition

Module 1 The Management Process Everyone becomes a manager someday Module Objectives Each module contains several inset features designed to assist the student reader in applying the concepts to relevant examples. “Trendsetters” features a management professional that illustrates the module concepts in a novel, visionary or inspirational way. “News Feed” features examples of business, individuals or books that illustrate current events or trends relevant to module concepts plus “Reflect and React” questions that may be used for class discussion in the classroom or online for distance learning. “Tips to Remember” extends learning on a specific topic with in-depth information or examples. “Stay Tuned” features summaries of research or surveys related to module concepts.

Module 1 begins to explore the fundamental notions of what a manager actually does, the requirements for a manager, and the expectations. Both the benefits and challenges are discussed.

It may be worthwhile to have the class reflect at the outset on a person for whom they may have already worked or played sports with that they believe was a good manager. Then perhaps ask students to describe some of this person’s traits and leave for further reinforcement and discussion as you present Module 1.

Suggested learning activities for “Trendsetters” and “News Feed” are included at the end of each module in this Instructor’s Resource Guide.

The objectives of Module 1 may be summarized as: 1.

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To describe the varying types and levels of managers To convey how managers are measured for effectiveness To define accountability, especially in the face of changing and multiple expectations To describe the intensity and stress of managing To explain the four key functions of managers: Plan, Organize, Lead, and Control To describe managers in terms of skills as well as roles enacted To define ethics and corporate governance To explain globalization, job migration and other trends; and how students can begin to prepare for the contemporary organization in light of these trends, issues and concerns 9. To define diversity and discrimination 10. To review how talent and intellectual capital drive high-performance organizations

Module Outline 1.1 What Does it Mean to Be a Manager?

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Managers are persons who directly supervise, support, and help activate work efforts to achieve the performance goals of individuals, teams, or even an organization as a whole.

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Organizations have different types and levels of managers ✓ Figure 1.1 depicts an organization as a series of “layers,” each of which represents different levels of work and managerial responsibilities. ✓ First-line manager is someone who leads a group of people who perform nonmanagerial duties. ➢ Common titles are department head, team leader, supervisor ✓ Middle Managers are persons in charge of relatively large departments or divisions consisting of several smaller work units or teams. ➢ Usually supervise several first-line managers ➢ Examples are clinic directors in hospitals, plant managers, and regional sales managers in businesses ✓ Top managers are responsible for the performance of the organization as a whole. ➢ Chief Executive Officer (CEO), President, Vice Presidents ➢ Expected to be alert to trends in the external environment, recognize problems and opportunities, and to lead the organization to long-term success ➢ Best are strategic thinkers, can communicate well, and keep organization members focused on important objectives ✓ Board of Directors ➢ Responsible for Corporate Governance (see Module 1) and is the active oversight of the affairs of the organization and the performance of its top management ➢ The CEO or President typically reports to the Board of Directors who are responsible for the hiring, firing and compensation of senior executives ➢ In non-profit organizations, may be called the Board of Trustees •

Accountability is a cornerstone of managerial performance ✓ Describes the requirement of one person to answer to a higher authority for performance achieved in his or her area of work responsibility ➢ Accountability flows upward in organizations ➢ Managers are also dependent on others to do the required work

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Effective managers strive for both performance and satisfaction ✓ Quality of work life (QWL) is integral to managers being a success ✓ QWL includes respect and valued employees, fair pay, safe working conditions, learning and growth opportunities, and pride in the workplace

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Managers must meet multiple and changing expectations ✓ Managers today often referred to as “coaches” or “coordinators”

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✓ See Figure 1.3–an upside-down pyramid depicting a new mindset for managers acting as coaches; the organization exists to serve its customers 1.1 Questions for discussion suggested answers 1) Each of us will be “managers” in several ways beyond work lives: managing our career; volunteer organizations; households; sports teams; daily priorities, etc.

2) Quality of work life connects directly to employee satisfaction and productivity and customer satisfaction. If employee morale is poor and/or if employees are not viewed as individuals with unique goals and concerns, this will impact current sales and profitability; it will also impact retention, and the costs associated with replacing experienced employees are quite high.

3) The upside down view emphasizes the importance of customers and employees who serve those customers. That pyramid view of an organization mirrors reality better than the notion that CEOs alone drive success.

1.2 What Do Managers Do? •

Managerial work is often intense and demanding. ✓ Henry Mintzberg describes daily managerial work in this manner in The Nature of Managerial Work ➢ In addition to the long hours, Mintzberg described a day spent at an intense pace at fragmented and varied tasks, using many types of communication media, working largely through relationships.

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Managers plan, organize, lead and control. ✓ Four functions in the management process-see Figure 1.4 ✓ The Management Process - planning, organizing, leading and controlling ✓ All managers in any organization are responsible for doing each of these functions well ✓ Planning is the process of setting performance objectives and determining what actions should be taken to accomplish them ✓ Organizing is the process of assigning tasks, allocating resources, and coordinating the activities of individuals and groups ✓ Leading is the process of arousing people’s enthusiasm to work hard and inspiring their efforts to fulfill plans and accomplish objectives ✓ Controlling is the process of measuring work performance, comparing results to objectives, and taking corrective action as needed

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Managers enact informational, interpersonal, and decisional roles performance. ✓ The four management functions are not performed step-by-step ✓ Mintzberg identified three sets of roles that he believed all good managers enact successfully ➢ Through these roles, the manager fulfills the four management functions ✓ Informational roles focus on the giving, receiving, and analyzing of information

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✓ Interpersonal roles reflect interaction with people inside and outside the work unit ✓ Decisional roles involve using information to make decisions to solve problems or address opportunities •

Managers pursue agendas and engage in networking. ✓ Agenda setting is used by managers to develop action priorities; these agendas may be incomplete and loosely connected in the beginning ✓ Networking is the building, maintenance, and use of positive relationships with other people, ideally those who may be useful someday ➢ Networks create the opportunity through which many agenda items can be fulfilled ➢ Most managers maintain extensive networks not only with their own organization, but also with customers, suppliers, and community representatives

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Managers use a variety of technical, human, and conceptual skills. ✓ Technical skill is the ability to use a special proficiency or expertise to perform particular tasks ➢ Examples are accountants, engineers, and systems analysts ➢ Technical skills are very important at career entry levels ✓ Human skill is the ability to work well with others ➢ High self awareness, capacity for empathy, trusting, and enthusiasm with others ➢ Emotional Intelligence (EI) (described by Daniel Goleman) is the ability to manage ourselves and our relationships effectively ➢ See the inset summarizing the five facets of EI ✓ Conceptual skill is the ability to think critically and analytically; the capacity to break down problems into smaller parts, see the relations between the parts and recognize the implications of any one problem for others ➢ Conceptual skills actually grow in importance as one moves up to higher management responsibilities

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Managers learn from experience. ✓ Lifelong learning - the process of continuously learning from our daily experiences and opportunities

1.2 Questions for discussion suggested answers 1) The world is becoming more complex and more technologically connected globally. In order to compete, organizations and individuals can no longer partition their lives into 40 hour work weeks from “8-5.” The paradox of improving the speed of communications is that it makes our lives less separable from our “jobs.” Having a BlackBerry or other smartphone and laptop means 24/7/365 availability. Students may consider the types of communication they used 5 to 10 years ago (land lines, cell-phones, instant messaging) and the ones they use now (texting, Facebook, Twitter) and the increased amount of time spent communicating. Are they ready for their personal and professional lives to merge as the communication needs of both increase?

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Even though such a world may entail more stress and long hours, it also provides more flexibility, freedom, and mobility. Moreover, in order to compete, one must accept such consequences or another person somewhere in the world that is more willing to do so, may take your position.

2) The Katz model indicates that in order to obtain a good entry-level position, it is imperative that my interpersonal skills and technical skills be outstanding. Human or interpersonal skills will remain high throughout my career, but it is important to acquire a strategic or “big picture” view of the organization, competitors, and customers early to distinguish myself and ascend to the “top.”

3) We all know someone who has or had “great potential” but who has somehow not been able to translate that potential into actuality because of personal issues, including poor discipline, bad time management, losing one’s temper, and many other reasons.

Developing emotional intelligence and self-awareness enables us to eliminate obstacles and create opportunities.

1.3 What Issues and Concerns Complicate the New Workplace?

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Recession, globalization and job migration are changing the world of work. ✓ “Borderless world” (Kenichi Ohmae) – disappearance of national boundaries ✓ Trend for companies to operate and have employees in multiple countries ✓ Globalization is the worldwide interdependence of resource flows, product markets, and business competition ➢ Global outsourcing is hiring workers and contracting for supplies and services in other countries. ➢ Global outsourcing can create savings and efficiency gains through manufacturing or providing service with lower labor costs in some countries ✓ Job Migration is the shifting of jobs from one country to another. ➢ The U.S. is a net loser at present ➢ Countries such as China, India and the Philippines are net gainers ➢ Not limited to unskilled labor; engineers, accountants, health professionals and scientists are as low as one-fifth the cost of an equivalent U.S. worker ✓ Politicians and policymakers debate solutions to the high costs of job migrationprotection or patience and time for eventual strengthening of the national economy Failures of ethics and corporate governance are troublesome. ✓ Recent sensational ethical failures ➢ Bernard Madoff convicted of $65 billion dollar fraudulent Ponzi scheme ➢ Wide and huge impact on personal savings, investments ➢ How would you recover from a major loss? ✓ Ethics ➢ Ethics is a Code of moral principles that sets standards of conduct for what is “good” and “right” as opposed to “bad” and “wrong” ➢ World of work still includes a lot of good

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o High value on personal integrity and ethical leadership o Concerns for natural environment, safety, protection of human rights o Many organizations declare their values ✓ Corporate Governance ➢ Corporate Governance is the active oversight of management decisions, corporate strategy, and financial reporting by Boards of Directors ➢ Typical Board of Directors responsible for hiring, firing and compensation of senior executives ➢ Individual Board members are accountable, including consequences for failures of responsibility such as fines •

Diversity and discrimination are continuing social priorities. ✓ Workplace diversity describes the composition of a workforce in terms of differences among the members, such as gender, age, race ethnicity, religion, sexual orientation, and able-bodiness. ➢ U.S. Census predicts that by 2050 whites will be in the minority and the combined populations of African Americans, Native Americans, Asians and Hispanics will be in the majority. By 2030, more than 20% of the U.S. population will be over 65 years old. ✓ U.S. laws strictly prohibit the use of demographic characteristics in human resource management decisions, such as hiring, promotion, and firing. ➢ Actions not always in compliance with laws ➢ One study showed that names affect selection of resumes by employers ➢ Glass ceiling effect occurs when an invisible barrier or “ceiling” prevents members of diverse populations from advancing to high levels of responsibility in organizations ✓ Diversity bias still exists ➢ Prejudice is the holding of negative irrational attitudes regarding people who are different from us ➢ Discrimination is when prejudice becomes active; when organizations unfairly treat minority members and deny them full membership benefits ✓ Scholar Judith Rosener says discrimination comes at high cost in “undervalued and underutilized” human capital

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People and intellectual capital drive high-performance organizations. ✓ Herman Miller values statement shows respect and value for all employees ✓ Charles O’Reilly and Jeffery Pfeffer conclude that high-performance companies do better because they get extraordinary results from the people working for them ✓ Intellectual capital is the collective brainpower or shared workforce of an organization’s workforce. ➢ Can be a personal asset: brains, skills, capabilities ➢ Can be viewed as formula with two components: Intellectual Capital = Competency x Commitment ✓ Competency represents our talents or job-relevant capabilities; commitment represents our willingness to work hard in applying them to important tasks. Both are essential.

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✓ Knowledge workers are persons whose minds, not just their physical capabilities, are critical assets ➢ Futurist Daniel Pink describes a conceptual age we are moving into where intellectual capital will rest with people who are both “high concept”- creative and good with ideas, and “high touch”- joyful and good with relationships. The future will belong to those of us with “whole mind” competencies - combining left-brain analytical and right-brain intuitive thinking.

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Career success requires continuous learning and capacity for self management. ✓ The future will be more of a free agent economy; many people will be changing jobs more often and working on flexible contracts with a shifting mix of employers over time (like professional athletes) ✓ British scholar and consultant Charles Handy uses the analogy of the shamrock organization to describe three types of workers, each depicted by a leaf: ➢ Core - full-time workers with critical skills and standard career paths ➢ Contract - workers with short- and long term-contracts; specialized skills and talents supporting the core workers ➢ Part-time temporary - workers hired as the needs of the business grows and let go when business fails ➢ Today’s college graduates must be prepared to work as all three types of worker a portfolio of skills will be required that is both current and attractive to employers ➢ Former IBM CEO Lou Gerstner describes “lifetime employability” as a goal for which we must accept personal responsibility ✓ Self management - realistically assessing your self and actively managing your personal development ✓ Personal “brand” - a unique and timely package of skills and capabilities of real value to a potential employer ➢ Management consultant Tom Peters advises your brad should be “remarkable, measurable, distinguished and distinctive” relative to the competition

1.3 Questions for discussion suggested answers 1) Most textbooks and courses in Introduction to Business, Management, and Accounting include a separate chapter on Ethics, and the instructors spend considerable time on this topic. Additionally, Ethics may be an entire required course in the graduation track curriculum to obtain a business degree.

2) Avoiding the “hurt” may involve two aspects: 1) the personal feelings that are normal from a reaction to the glass ceiling effect; and 2) protecting oneself against being discriminated against in a culture that allows “glass ceilings.”

As the name implies, it is never easy-if at all possible – to discern if a glass ceiling exists in a particular culture.

The best evidence, though, is to objectively examine and investigate how many

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minorities are in senior management. If an organization is quite large and is devoid of minority senior executives, that organization’s culture deserves further scrutiny before you accept a position. It is also a reasonable area to explore during the interview process.

If one is a victim of glass ceiling discrimination, the matter should be brought to the attention of appropriate agencies and within the company itself. But if the discrimination is subtle and hard to “pin down” it is better to recognize that and not to invest valuable years in such an organization.

3) Self management is perhaps the most valuable area/trait for personal growth for one’s career. Change is occurring at an increasing rate and the “life” of many companies and organizations may be shorter due to fierce competition. Each individual can build their resume through “modules” or chunks of skills with what is likely to be many employers for most people today. Self-discipline and self-awareness are essential in such a climate.

Globalization and technology advances mean that each person may be more of a “free agent” than was the case in prior generations.

Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed The News Feed feature for this Module is entitled “Good and Bad News for Middle Managers”.

(Page 17).” Author Paul Osterman reports how the role of middle management is changing and reports the opportunities and frustrations of those holding middle management positions.

Ask students to complete the “Reflect and React” exercise following the News Feed. This exercise will work well as a take-home assignment or for distance learning.

Here are a few questions for the class to consider and discuss: •

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Have the class “pair up” and list the aspects of a position in middle management that they would like, and aspects that would frustrate them. You may need to set a minimum number such as five of each to get them to get a little creative and go beyond those listed in the News Feed feature.

What could an organization do to enhance the things they would like and reduce the things they would not like?

Identify an organization they have in common such as the college, and list the positions or people (department heads, deans) they believe have middle management positions.

Ask those people to address the good and frustrating aspects of the position.

Trendsetters

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Ursula Burns, CEO of Xerox, started as an intern and worked her way up to the top position through “hard work and high performance”. She assumed the CEO position at a difficult time for the document management company. Sales and profits declined as businesses are becoming “paperless” and buying less equipment (see Trendsetters box on page 12).

Questions for class discussion (or an assignment): • •

Burns is the second woman to head Xerox at a time when women CEOs of Fortune 500 firms are rare. What might Xerox do differently in developing management talent than other large firms?

Which of the issues and concerns complicating the new workplace as listed in Module 1 seem to be most relevant to the challenges facing Xerox? How might Xerox face these challenges in the future?

Self Assessment The assessment for this module is entitled “Personal Management Foundations” (page 24). This assessment tool is intended to help students reflect on their own strengths and weaknesses and areas where they can grow and develop in preparation for management. As students proceed through the entire text and course, they will acquire a broader knowledge of themselves.

A worthwhile exercise is to ask students to maintain their scores on each assigned assessment and, as a special project, reflect and summarize their manager-readiness near the end of the quarter/semester, what they have learned about themselves, and how they plan to continue improving.

Case Snapshot The case for this Module describes “Trader Joe’s – Managing With a Cool Edge.” Instructors may consider suggesting students visit the Trader Joe’s website at www.traderjoes.com for further preparation as they prepare case answers.

Case discussion questions and suggested answers: 1. In what ways does Trader Joe’s demonstrate the importance of each responsibility in the management process – planning, organizing, leading and controlling?

Planning is the process of setting performance objectives and actions taken to accomplish them. References to their commitment to thrift, cost savings and “relentless pursuit of value” (“Every penny we save is a penny you save”) and ways they demonstrate that commitment are numerous in the case. Their simple four-part philosophy and approach to stocking guides purchasing plans.

Organizing involves arranging resources to accomplish organizational goals efficiently.

Compensation at Trader Joe’s is high for the industry. This usually allows employers to hire better qualified employees even in a tight labor market, reducing training and turnover expenses. Their training programs (Trader Joe’s

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University) help develop employee potential to support their promote from within policy.

Leading inspires people to work hard to achieve high performance. One responsibility of leadership that Trader Joe’s takes seriously is establishing a strong culture. Employees and customers alike are drawn to the chain’s “charming blend of low prices, tasty treats and laid-back but enthusiastic customer service”.

Not only is the attitude casual, employee dress and store décor are a nautical and tropical theme. The company hires employees to fit the culture with desired soft skills such as “ambitious, adventurous, enjoy smiling and have a strong sense of values”.

Controlling measures performance to ensure the desired results. Control, hand in hand with planning, measures the success of the plan by measuring results. Store size, inventory control and aggressive cost cutting are measured and adjusted as necessary.

2. This is a German company operating in America and sourcing products from around the world. What are the biggest risks that international ownership and global events pose for Trader Joe’s performance effectiveness and performance efficiency?

The risks would include economic risks like recession, currency valuation risk and problems with global sourcing such as the issues with Chinese food imports.

Globalization also presents opportunities like the ability to work with providers world wide to find low cost products.

3. In a casual and nontraditional work environment like the one at Trader Joe’s, what are the keys to a team leader or supervisor becoming an effective manager?

Several management practices enable Trader Joe’s to develop managerial talent: • Strong culture • Hiring with job descriptions that describe desirable personality traits and attitudes • Training • Promote-from-within policy 4. Further Research – Students are directed to research Trader Joe’s and make comparisons with competitors. Caution students to conduct their online research with objective media sources. The college library may offer free searches such as EBSCO Host that access a large number of periodicals including industry publications that may provide thorough and accurate comparisons as well as current industry trends.

Suggested Team Exercise for Module 1 Emotional Intelligence Exercise Module 1 includes an inset listing five facets of EI on page 13.

Break the class into teams of three or four and ask each group to collectively discuss these five facets.

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Ask them to list well known managers or celebrities who seem to possess some or all of the facets, and provide examples to share with the class. Also ask them to provide examples of the failure of well known managers or celebrities who lack one or more of the five facets.

Upon completion of all teams, have each team (a volunteer from the team) discuss their examples. This will allow the class to learn collaboratively and recognize the values of EI. Conceptual Skill Exercise Module 1 includes a review of conceptual skills. This exercise is designed to have teams use conceptual skills to create ideas for a new business in the community Organize the class into teams of three or four students each. Ask each team to “create” a concept for a new business in the local community that serves a need or want they have observed (they should be prepared to support/explain this perceived need or want). They should be told that they can assume that they have the needed financing for a local business. It is useful to share with them an example such as the Geek Squad or a Starbucks, both of which first started as local companies in one community.

Allow teams about 45 minutes for this exercise. The teams should report to the class their “concept” as well as a “name” for the business that is communicative and “catchy” (again, Geek Squad is an example, or perhaps Stub Hub, the on-line ticket broker.)

The Instructor should summarize the concepts and names. Then the Instructor may want to pick “winners” of the “best concept” and “best name” based on his or her discretion and share the reasons with the class.

Students enjoy this exercise and it allows them to see how valuable conceptual skills are. It adds interest and excitement to assign “bonus points” to teams that win, either as extra credit toward their grade or added points (example 3-5 points) on their upcoming test/exam.

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MODULE 2 Management Learning Great things grow from strong foundations Module Objectives Module Two provides the theoretical and historical underpinnings of management principles.

Classical, behavioral, and modern management approaches are reviewed

The objectives of Module 2 may be summarized as: 1. To explain scientific management, bureaucratic organizations, and administrative principles.

2. To explain behavioral management approaches 3. To describe management as complex networks of systems and sub-systems 4. To explain contingency thinking in management 5. To describe knowledge management and organizational learning 6. To describe the application of evidence-based management

Module Outline 2.1 What can we learn from management thinking?

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Taylor’s scientific management seeks efficiency in job performance ✓ See Figure 2.1“Major branches in the classical approaches to management. ✓ 1911 book by Frederick Taylor ThePrinciples of Scientific Management ➢ Identify basic steps and motions of jobs and determine the most efficient ways of doing them ➢ Four principles of scientific management: o Develop a science for each job o Hire workers with the right abilities o Train and motivate workers o Support workers by planning and assisting work with job science ➢ Still in use today (example is UPS calibrated productivity standards). See “Tips to Remember” page 29.

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Weber’s bureaucratic organization is supposed to be efficient and fair ✓ Late-19th century German intellectual insights have made a significant impact on management and sociology of organizations ➢ Bureaucracy type of organization could be highly efficient and very fair ➢ Relies on logic, order, and legitimate authority ➢ Government agencies or large colleges may be examples

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Administrative principles describe managerial duties and practices ✓ Henri Fayol published Administration Industrielle et Générale, outlining his views on proper management of organizations. ✓ Fayol’s five “rules” or “duties” closely resemble the four functions used in management today: Foresight, Organization, Command, Coordination and Control.

2.1 Questions for discussion suggested answers 1) Taylor focused on individual tasks and efficiency, assigning very narrow and repetitive jobs for speed. Weber, meanwhile, focused more on the overall organizational approach, rewards and rules.

2) Weber’s concepts still have value but perhaps not in isolation as a sole management philosophy. Every one of his tenets is used today by most companies, with the exception of such a clear division of labor-as companies have learned that flexibility and job enrichment are more satisfying and can improve performance.

3) The risk is that executives may have a narrow or short-sighted view that is out of touch with employee’s behaviors and motivations.

2.2 What is Unique about the Behavioral Management Approaches?

• Note: See Figure 2.2 “Foundations of the Behavioral or Human Resource Approaches” •

Follett viewed organizations as communities of cooperative action ✓ Mary Parker Follett believed that a groups or a sense of community were important aspects of organizations. ➢ Managers should foster cooperation with workers without domination ➢ Follett suggested that employee ownership would create feelings of collective responsibility ➢ Emphasis was placed on making profits while considering the public good, a predecessor of corporate social responsibility.

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The Hawthorne studies focused attention on the human side of organizations ✓ Elton Mayo of Harvard University commenced a study in 1924 at the Western Electric Company to determine how economic incentives and physical conditions of the workplace affected the output of workers ➢ No direct relationship was found ➢ Instead, workers responded to increased attention by their managers ➢ Hawthorne effect – the tendency to live up to expectations; a person’s performance will be affected by the way they are treated by their managers ➢ Groups can have a strong negative, as well as positive, influence on the behavior of their members

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Maslow described a hierarchy of human needs with self-actualization at the top

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✓ Human need is a physical or psychological deficiency that a person feels compelled to satisfy ✓ Maslow described five levels of human needs that affect behavior (see Figure 2.3) ✓ Progression principle - a need at any level becomes activated only after the next-lowerlevel need is satisfied ✓ Deficit principle – a satisfied need doesn’t motivate behavior; people act to satisfy needs for which a satisfaction “deficit” exists ✓ Only at the highest level, self actualization, do both the deficit and progression principles cease to exist •

Mc Gregor believed managerial assumptions create self-fulfilling prophesies ✓ Douglas McGregor wrote the classic book The Human Side of Enterprise ✓ Theory X – set of negative assumptions about workers; they dislike work, lack ambition, resist change, and prefer to follow rather than lead ✓ Theory Y – set of positive assumptions about workers; they like work, are capable of self direction and control, responsible and creative ✓ Theory X managers likely to be “command and control” managers ✓ Theory Y managers likely to be “participative” managers ✓ Self fulfilling prophecy –workers respond to the way they are treated

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Argyris suggests that workers treated as adults will be more productive ✓ Chris Argyris wrote the book Personality and Organization ✓ Many organizations treat workers like children, which is counterproductive ✓ Networks create the opportunity through which many agenda items an be fulfilled ✓ Most managers maintain extensive networks not only with their own organization, but also with customers, suppliers, and community representatives

2.2 Questions for Discussion suggested answers 1) Hawthorne’s work shifted the focus from a scientific perspective to a more humanistic view. Employees were no longer viewed simply as “machines” or a part of the assembly line, but as humans whom could be affected by motivation, reward systems, and attention.

2) An effective manager needs to understand that each employee has unique needs and that one blanket approach will not suffice for all employees. Knowing each employee’s needs enables managers to tailor their development, rewards, and management to each person for higher performance.

3) Fundamentally, Argyris’ theory says to treat people like adults-with respect, trust and genuine caring. This is also what Theory Y in McGregor’s theory effectively would suggest.

2.3 What are the foundations of the modern management approaches?

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Managers use quantitative analysis and tools to solve complex problems ✓ Management science and operations research are used interchangeably to describe mathematical techniques used for management problem solving and planning. ✓ Gantt charts illustrate the interrelationships between complex tasks on a large project such as developing a shopping center or new building on a college campus. Figure 2.4 illustrates a Gantt chart for a building project such as a home. ✓ Operations management is the study of how to improve operations to deliver goods and services with the most efficient and effective use of resources.

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Organizations are open systems that interact with their environments ✓ Open systems obtain resources from the external environment; perform work activities to transform resources into goods or services for the external environment (Figure 2.5). ✓ Customer-driven organizations focus goals and energy on satisfying needs of customers and clients.

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Organizations operate as complex networks of cooperating subsystems ✓ Subsystems or smaller components include activities that individually and collectively support the work of the larger system. Figure 2.6 illustrates the relationship. ✓ Examples of subsystems are purchasing, accounting, sales, etc.

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Contingency thinking recognizes there is no one best way to manage ✓ Contingency thinking - belief that the way one manages depends on organizational complexities and demands of situations

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Quality management focuses attention on continuous improvement ✓ W. Edwards Deming assisted Japanese industry in the 1950s with quality control techniques that included: tally defects, analyze and trace them to the source, make corrections and keep a record of what happened afterward, using statistics. ✓ Total Quality Management or TQM grew out of Deming’s work. TQM links strategic objectives and applies them to all aspects of an organization’s activities. ✓ Joseph Juran was a contemporary of Deming and is known for his slogan “there is always a better way,” and “plan, control, improve”. ✓ Continuous Improvement is the goal of always looking for new ways to improve performance. ✓ ISO certification established internationally recognized standards for quality in operations and output.

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Knowledge management and organizational learning provide continuous adaptation. ✓ Knowledge management is the process of using information technology to develop, organize and share knowledge for performance success. Some organizations have created the position of Chief Knowledge Officer or CKO, recognizing the importance of managing and using the organization’s vast supply of data. ✓ Learning organizations continually learn and adapt to new circumstances such as a changing environment. Emphasis is on information sharing, teamwork, empowerment and participation as well as embracing change and new opportunities.

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Evidence-based management seeks hard facts about what really works ✓ Evidence-based management is the process of using data from a large number of organizations to determine facts about effective management practices that can be validated by research. ✓ Decision makers are encouraged to challenge conventional wisdom regarding “what works” (example: merit pay encourages better performance) and encourage others to do the same. Decisions should be made with clear evidence that the solution or practice will achieve the desired result.

2.3 Questions for discussion suggested answers 1) Municipal governments and colleges are often organized and also function as Open Systems and Subsystems. For example, the zoning department and tax assessment departments are separate departments (or divisions in larger cities) yet both are somewhat related to property matters as the larger “system” and both are subsystems of the entire city structure.

Colleges, similarly, have departments such as Financial Aid, Cashier’s Office, and Registrar, all which have some role in handling Finances in most colleges. In that case, each is a “subsystem” while Finance would be a “system.” The Department of Business or English would be another example of separate “subsystems” within the educational/teaching “system” of the college or university.

2) An effective manager should have a contingency plan for such areas as weather-related or crisis-related matters such as plant closings to ensure timely resumption (and security and access for such areas as Information Systems) continuity of operations with minor or no interruptions of customer service.

Tornado drills and/or fire drills are routine drills performed in “normal” times but are also examples of necessary and important employee safety contingency plans. Finally, having a sound risk management and insurance program is an integral part of any company’s management today.

3) A learning organization comes about because of mutual and ongoing learning between workers and managers. Indeed, continuous improvement and effective strategic plans rely on the involvement and “give-and –take” of both constituencies within any organization.

Mangers learn about the day-to-day needs and opportunities for enhanced operations and efficiencies from the “experts” who are doing the jobs-workers. Meanwhile, workers learn from managers the direction and objectives that the larger enterprise is targeting.

Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed

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The News Feed feature for this Module is entitled “Noted Author Believes Practice Beats Intelligence Among Super Achievers.” (Page 36).

Ask students to complete the “Reflect and React” exercise following the News Feed. This exercise will work well as a take-home assignment or for distance learning.

Additional questions for the class to consider and discuss: •

Catherine Arnst points out that Gladwell’s book suggests that “timing, persistence and an eye for the main chance” are keys to success. Ask students how they will know when the “main chance” arrives and how they will be ready. Are there any more “main chances” left to discover? What might they be?

•

Ask students to list the skills that managers would be able to practice for 10,000 hours.

•

Can they provide examples of managers or leaders that seem to have achieved great things through practice?

Trendsetters In the Trendsetters feature on Page 41, Yahoo CEO Carol Bartz is profiled as a take-charge executive that is fair but tough and isn’t afraid of making mistakes.

Questions for class discussion (or an assignment): • •

•

Yahoo has faced many competitors since it’s creation from small “start-ups” to the enormously successful Google and now Microsoft’s “Bing”. How do you suppose Yahoo uses quantitative analysis to keep up with the competition?

If Yahoo is an open system, what would you describe as the resource inputs they take from the external environment, the transformation process they perform to transform resources into outputs and the product outputs or finished goods they provide to consumers?

Many organizations feel that an upside down pyramid organization is more responsive to customers, yet Bartz explains that she believes in a “more top-down management approach” and that Yahoo needs “structure”. How does this seem to fit with the concept of “contingency thinking”?

Stay Tuned The Stay Tuned inset in module 2 on page 33 provides a survey of employee satisfaction and retention by Salary.com. These questions may be used in class or online for discussion in addition to the questions listed in the “Your Thoughts” section: •

How would you explain the discrepancy between the employee survey results and the results of the employer survey?

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• •

Does this seem to indicate that pay is a determining factor in job satisfaction? Why or why not?

How would you explain the survey findings based on any of the management theories explained in Module 2?

Self Assessment The assessment for this module is entitled “Managerial Assumptions (page 45).” The assessment tool is intended to help students reflect on their own management style or current orientation.

Ask students to maintain their scores and reflections throughout the course and write a summary of the areas they want to strengthen, or change, as they develop as managers or employees.

This may be a comprehensive special project near the end of the quarter/semester.

Case Snapshot Instructors may wish to assign online additional work to allow students an opportunity to strengthen their skills and/or understanding of concepts presented in the module. In order to retain student interest, these assignments may be varied between Skill Builder, Experiential Exercises, and Project under Pathways to WileyPLUS at the end of each Module.

The case for this Module is “Zara International – Fashion at the Speed of Light.”

DISCUSSION QUESTIONS 1. In what ways are elements of the classical management approaches evident at Zara International?

Classical management finds the best way to produce a product or service so both workers and employers benefit from increased efficiencies. Zara seems to have embraced the efficiencies found in Weber's bureaucratic form of organizations. The rapid response to fashion trends require efficient design, production, distribution and inventory management. All departments must clearly know their purpose with a clear division of labor, levels of authority are clearly defined, rules and procedures facilitate the fast turnaround necessary to get fresh fashions in the store within days of design.

Fayol's administrative principles are in evidence in Zara's clear foresight or plan of action, organization allows fast mobilization of resources, command is evident in the vision and leadership of founder and Chairman, Amancio Ortega Gaona, over the 80,000 workers, coordination requires close communication and efficient operations, and control is seen in their ambitious goals for growth.

2. How are insights of the behavioral management approaches being used by Zara’s management team?

Behavioral management advocates that managers remember that people are social and self-actualizing. They respond to a group atmosphere and want to feel like they are making a contribution. Although there is little coverage of how Zara's management interacts or motivates workers, they are certainly appreciative of their contribution to

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bringing high fashion items to customers at affordable prices.

3. How can systems concepts and the notion of contingency thinking explain the success of some Zara’s distinctive practices?

Systems interact with their environments to obtain resources that are transformed into outputs for consumers. Zara uses fabrics, labor and the latest fashion trends from other designers to create high fashion at an affordable price. The subsystems at Zara include purchasing and inventory, distribution, information and technology, operations management and accounting and financial systems to transform the ideas and raw materials into fashionable garments. Zara chooses to keep most of these subsystems within the company rather than outsource them to outside contractors.

Zara's organizational network of subsystems is designed to be responsive to new fashion trends and consumer buying patterns. They seem to be specifically designed to respond quickly to change. Contingency thinking is the process of adapting management to the unique circumstances of the organization. Management at Zara seems to have responded to the necessity for fast response to fashion trends and need for cost efficiencies to achieve their goals of low cost high fashion. In fact, their ability to respond quickly seems to be a strong competitive advantage.

4. FURTHER RESEARCH—Gather the latest information on competitive trends in the apparel industry, and the latest actions and innovations of Zara. Is the firm continuing to do well? Is it adapting in ways needed to stay abreast of both its major competition and the pressures of a changing global economy? Is Inditex still providing worthy management benchmarks for other firms to follow?

Students should be encouraged to research Inditex as well as Zara. Caution students to conduct their online research with objective media sources. The college library may offer free searches such as EBSCO Host that access a large number of periodicals including industry publications that may provide thorough and accurate comparisons as well as current industry trends.

Suggested Team Exercise for Module 2 Bureaucracy Exercise Module 2 describes Max Weber’s characteristics of an ideal bureaucracy on page 30, in table 2.1.

Break the class into teams of three or four and ask each group to collectively discuss these five characteristics.

Ask them to list organizations that, in their view, have many (or all) of these characteristics.

What organizations, if any, seem to be best suited for such a style/type of organization?

Students then should discuss the benefits and disadvantages of the organizations they have discussed. Some examples would be state or federal governmental agencies (license tags, passports, etc.), state colleges, large banks, the military etc.

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Allow teams about 45 minutes for this exercise. The teams will then report to the class the summaries of their conclusions.

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MODULE 3 Ethics and Ethical Behavior Character doesn’t stay at home when we go to work Module Objectives Module Three provides a thorough review of ethics in contemporary organizations. This includes a definition of ethics; how ethics can be perceived differently in varying cultures; guidelines when one is confronted with an ethical dilemma; and the role of managers.

The objectives of Module 3 may be summarized as: 1.

2.

3.

4.

5.

6.

7.

8.

To define ethics and ethical behavior.

To explain how ethics varies across cultures and among moral reasoning approaches.

To define ethical dilemmas and how personal and contextual factors affect ethical conduct.

To explain the role of training and whistleblowers in organizations.

To review the that role managers and codes of ethics have in organizations.

To explain the concept of social responsibility by providing examples.

To contrast the classical and socioeconomic views of corporate social responsibility.

To define corporate governance.

Module Outline 3.1 How Do Ethics and Ethical Behavior Play Out in the Workplace?

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Ethical behavior can always be described as what is “good” or “right.” ✓ Ethics is a code of moral principles or behavior that sets standards of what is right and wrong regardless of whether the behavior is legal. ✓ Ethical Behavior describes the actions we accept as good and right.

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Ethical behavior is values driven. ✓ Values are the underlying beliefs and judgments regarding what is right or desirable and that influence individual attitudes and behaviors ➢ Terminal values focus on desired ends ➢ Instrumental values concern the means for accomplishing these ends ➢ These values tend to be enduring for an individual but may vary considerably from one person to the next

•

What is considered ethical varies among moral reasoning approaches. ✓ See Figure 3.1 on page 52 ✓ Utilitarian view is that ethical behavior should deliver the greatest good to the greatest number of people

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✓ Individualism view is that ethical behavior should focus on the long-term advancement of self-interests ✓ Justice view is that ethical behavior is when people are treated impartially and fairly, according to legal rules and standards ➢ Procedural justice involves the fair administration of policies and rules ➢ Distributive justice involves the allocation of outcomes without regard to individual characteristics such as gender, race, ethnicity or age ➢ Interactional justice focuses on the treatment of others with dignity and respect ✓ Moral-rights view is that ethical behavior should respect and protect the fundamental rights of people •

What is considered ethical can vary across cultures. ✓ See figure 3.2 on page 54 ➢ Based on work of scholar and ethicist Thomas Donaldson ✓ Cultural relativism is the belief that cultural context alone determines ethical behavior ✓ Moral absolutism is the belief that certain values and practices are universally good and bad ➢ Ethical imperialism is externally imposing one’s own ethical standards on others

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Ethical dilemmas arise as tests of personal ethics and values. ✓ Ethical dilemma is a situation requiring a decision about a course of action that, although offering potential benefits, may be considered unethical ➢ May be no clear consensus on what is “right” or “wrong” ✓ See Table 3.1 inset ➢ Harvard Business Review survey said many dilemmas arise out of conflicts with superiors, customers, and subordinates ➢ Unrealistically high performance goals high on the list of factors

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People have tendencies to rationalize unethical behaviors. ✓ It’s not really illegal ✓ It’s in everyone’s best interests ✓ No one will ever know about it ✓ The organization will stand behind me

3.1 Questions for discussion suggested answers 1) Students may debate the merits of all approaches. Ask them to give examples of where each may be appropriate such as “the justice view is the view that seems most fitting for a CEO with a diverse workforce”. The instructor may also consider assigning different approaches to small groups of students and ask them to come up with an example that would advocate one approach as the best for the situation.

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2) Cultural relativism in all likelihood will cause problems, since, as the name implies, there is no “clear” boundary of what is right and wrong. Given a profit motivation, the temptation would be great to make decisions that err on the wrong side of ethics.

3) Ethical dilemmas can be opportunities. This is particularly true if it is a learning opportunity for the organization. An example might be when one company learns of a competitor’s “secret” through a supplier etc. By choosing not to exploit such a secret and use it, the manager or decision maker is sending a very strong message and setting a tone for the entire organization.

3.2 How Can We Maintain High Standards of Ethical Conduct?

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Personal factors and moral development influence ethical decision making. ✓ Ethical frameworks are well-thought-out personal rules and strategies for ethical decision-making ✓ Organization and action contexts influence workplace ethics ✓ Conditions in the external environment also influence organizations and their members (includes laws and regulations, and social norms and values) ✓ Lawrence Kohlberg describes three levels of moral development that individuals progress through (see Figure 3.3 on page 57). ➢ Preconventional or Self-Centered Behavior ➢ Conventional or Social-Centered Behavior ➢ Postconventional or Principle-Centered Behavior

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Training in ethical decision making may improve ethical conduct. ✓ Ethics training helps employees understand and best deal with ethical aspects of decision making ✓ See Tips to Remember in inset box on page 58 ✓ “Spotlight questions” ➢ How would I feel if my family found out about my decision? ➢ How would I feel if the local newspaper printed my decision?

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Protection of whistleblowers can encourage ethical conduct. ✓ Whistleblowers are people who expose organizational misdeeds in order to preserve ethical standards and protect against wasteful, harmful, or illegal acts ✓ The very nature of organizations as power structures creates potential barriers to whistleblowing ➢ Strict chain of command ➢ Strong work group identities ➢ Ambiguous priorities

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Managers as positive role models may inspire ethical conduct. ✓ The way top mangers approach ethics issues can have a powerful effect on what happens in their organizations ➢ Policies that set high ethics standards ➢ Set a personal example of the behavior you expect, “Walk the talk”.

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➢ Figure 3.4 page 60 illustrates three ways managers may choose to behave: • Immoral manager • Amoral manager • Moral manager •

Formal codes of ethics set standards for ethical conduct. ✓ Codes of ethics formally state the values and ethical principles that members are expected to display ➢ Some require employees to read and agree as a condition of employment ➢ Can be very specific guidelines on how to behave in situations ➢ Increasingly common

3.2 Questions for discussion suggested answers 1) It is not only right for a company to require ethics training; it is the responsible action that every company should take. It also reduces a company’s exposure even if an employee does commit an ethics violation. For instance, it increases the defense that the company is not a climate for sexual harassment if training can be demonstrated to have occurred. Most importantly, it explicitly sets out the ethics rules, and lets employees know that they are important enough to pay workers to attend.

2) Whistleblowers are entitled to complete protection and are protected by law and policies.

They are taking a high risk for actions that may jeopardize their careers or may even threaten their personal safety. The benefits to society for avoidance of situations such as Enron far outweigh any undesired or unintended costs of added federal or state protective laws and regulations.

3) Yes - there is perhaps no better way to reinforce the importance of ethics than rewarding (or penalizing) managers for their ethical conduct.

3.2 What Should We Know About the Social Responsibilities of Organizations?

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Social responsibility is an organization’s obligation to best serve society. ✓ Corporate Social Responsibility (CSR) advocates organizational behavior that serves its own mission and interests by acting in a way that serves the best interests of all stakeholders, including society as a whole. ✓ Triple bottom line is a concept that evaluates organizational performance on financial, social and environmental criteria rather than just financial.

•

Scholars argue cases for and against social responsibility. ✓ Classical view of CSR – “The business of business is business” meaning that the goal of business is to produce profits for the owners or stockholders. Milton Friedman advocated, along with many others, that society’s best interests are served by managers who strive for profits without expanding the business mission to include social causes.

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✓ Socioeconomic view of CSR – Business must focus on all stakeholders including society at large. This may lead to improved financial performance as a positive perception of the business leads to a “virtuous circle”.

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Social business and social entrepreneurship point the way in social responsibility. ✓ Social business has as its foundation the goal of addressing a social problem, yet may still return a profit. The chapter-opening example of the Grameen Bank founded by Nobel Prize winner Mohammad Yunus is a good example. ✓ Social entrepreneurship seeks to solve social problems through entrepreneurship

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Failures or ethics and social responsibility prompt calls for stronger governance. ✓ Corporate governance –activities of a board of directors that set standards, sets business strategy and looks out for the interests of stockholders. ✓ Criticism – has been level at boards that have allowed skyrocketing CEO compensation even when company performance has been poor or even failing. ✓ Sarbanes-Oxley Act (SOX) – law that requires accountability for financial conduct of corporations. Requires additional reporting of transactions and allows prosecution of executives who engage in misconduct.

3.3 Questions for discussion suggested answers 1. The social audit would include criteria to assess the organization’s performance in terms of the impact a wide range of stakeholder groups as listed in Figure 3.5. Criteria would include Economic Responsibility, Legal Responsibility, Ethical Responsibility and Discretionary Responsibility. This would be an interesting small group activity, requiring all groups to audit different organizations.

2. Responses will differ along the same arguments as the classical view of CSR and socioeconomic view of CSR. Students may have read research that supports the view that socially responsible companies are more profitable over time than those that hold a more classical view. Others may have research that supports the classical view. Ask them to compare with examples.

3. Recent corporate governance failures of AIG and other financial institutions may tip student opinion to favor more government involvement. The reporting requirements and regulations added by the Sarbanes – Oxley Act do not appear to have prevented behavior students perceive to be unethical. The question needs to be asked: “can any amount of regulation prevent unethical behavior of amoral or immoral behavior of managers such as Bernard Madoff?”

Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

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News Feed The News Feed feature for this Module is entitled “Welcome ‘Corporate Greens’ and the new ECOnomics” (Page 63). This feature may stimulate discussion in-class or on-line for distance learning. Instructors may also assign discussion questions as a take-home assignment.

Questions for the class to consider and discuss: • • •

How do the initiatives of Subaru seem to support the socioeconomic view of CSR? How might the concepts of social business or social entrepreneurship address the need for business innovation to deal with climate change?

Research other businesses that have embraced “corporate green” practices.

Trendsetters See the Trendsetters feature on Page 65, “Former Microsoft Executive Fights Illiteracy with Room to Read.”

Questions for class discussion (or an assignment): • • •

Can you think of any situation that was an extraordinary example of generosity or consideration by an individual or organization?

What social causes would you consider devoting your time to?

John Wood’s former boss and Microsoft founder, Bill Gates, has also left Microsoft and now works full-time at the Bill and Melinda Gates foundation which sponsors many world-wide philanthropic initiatives. Why do you believe Wood and Gates have chosen these “second chapters” in their lives?

Self Assessment The assessment for this module is entitled “Terminal Values Survey. (Page 69).” The assessment tool is intended to help students reflect on their values. Ask students to maintain their scores and reflections throughout the course and write a summary of the areas they want to strengthen, or change, as they develop as managers or employees.

This may be a comprehensive special project near the end of the quarter/semester.

Case: Tom’s of Maine The case for this Module is: Tom’s of Maine: “Doing Business” Means “Doing Good”.

Instructors may consider suggesting students visit the Tom’s of Maine website at http://www.tomsofmaine.com/ for further information as they prepare case answers.

Case discussion questions and suggested answers:

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1.

Does the Tom’s of Maine experience prove that one can “do business with principles,” or are there business realities that make it hard for others to copy this principled management model?

The Tom's of Maine experience may prove that success while conducting "business with principles," is possible but it also shows that it isn't easy. Businesses with a "postconventional" view of principle-centered behavior that act according to internal principles and live up to or exceed societal expectations often run into the business realities of stockholder profit expectations and board demands for quicker profits. The socioeconomic view of corporate social responsibility can be defended by evidence of a "virtuous circle" that increases performance, but customers may abandon principled providers of toothpaste in a recession when a less principled competitor provides a lower cost toothpaste or deodorant.

2.

What examples and incidents from this brief history of Tom’s of Maine illustrate how the personal ethics and values of founders can positively influence a firm and its culture as it deals with the challenges of start-up and growth?

Tom's of Maine is a good example of an organization that has realized the "virtuous circle" mentioned above. The strong ethical behavior and clear mission establish a culture of social responsibility that consumers are happy to support. The benefits of the strong ethics and culture extend to employee motivation as well. Respect for employees is shown by providing meaningful work and encouraging employee volunteerism supports Herzberg's two-factor theory of motivation and Maslow's hierarchy of motivation.

Motivated employees are usually more productive and have lower turnover.

3.

What are the biggest threats that Tom’s faces in its new life within Colgate’s global corporate structure, and especially with respect to maintaining what Tom and Kate call “the character, spirit, and values of our company”?

Threats to the culture are threats to the Tom's of Maine brand. Colgate was chosen as a good fit, but management does change and stockholders get restless. Anything that consumers see as an unethical act or even an ethical shortcut can lose the loyalty of satisfied and devoted customers and possibly even employees. High ethical standards, commitment to the mission and culture are critical the continued success of "Tom's".

FURTHER RESEARCH—Find news items reporting on what has happened at Tom’s of Maine since being purchased by Colgate. Has the firm been able to operate with the ethics and independence that Tom and Kate had hoped for? Is the company starting to lose its way now that it’s part of a global corporate giant?

Research is a great way to stimulate class discussion. Online or face-to-face students can discuss their topics in pairs or small groups and each student may write a 2 sentence summary of the research of the other students in the class. Students may be asked to select one article from the group to present to the class. This may or may not be the student who originally researched the article. This is easily adapted to online classes through threaded discussions or chat.

4.

Suggested Team Exercises for Module 3

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Ethics Exercise Break the class into teams of three or four and ask each group to take a survey within their group, summarize their findings and discuss the implications.

Note: The questions listed below should be phrased if they know “anyone” who has ever done the behavior described, and not to disclose whether they themselves have. This will allow for more open discussion while providing personal privacy.

Here are ten questions (you may write these on the board, post on a message board, or use handout surveys) to discuss and summarize results (ask them to provide a specific tally count for each question) within each group: “Have you ever known anyone (this may include yourself) who …

• • • • • • • • • •

Worked in a restaurant or bar and did not report all tips earned to the IRS? Paid money to a babysitter for child care but did not report it to the IRS? Painted, built decks, or did other types of contracting work, and did not report all income to the IRS? Cheated on an exam?

Took supplies such as copy paper, pens, etc. from work?

Used the telephone at work for long-distance personal calls?

Called in sick when not sick for a “free” day off?

Lied on an expense report (exaggerated actual meal cost etc.)?

Stole from a warehouse that they worked in?

Has witnessed an ethical issue by another at work or school and did not report it to the teacher, authorities or the manager etc.?

Students then should discuss these questions and discuss how “serious “each is perceived to be.

Are some very accepted in our society? If so, why is that?

Is it a big “leap” from these behaviors to CEO “scandals “such as the Enron fraud case? As individuals get promoted, does ethical behavior improve, stay the same, or worsen?

Allow teams about 20-30 minutes for this exercise. The teams will then report to the class the summaries of their conclusions.

Take the students tally and summarize the total tally by questions. The results will provoke further questions and discussion.

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MODULE 4 Managers as Decision Makers There Is No Substitute for a Good Decision Module Objectives Module Four provides a review of problem solving and decision-making. It includes a review of decision making and problem solving styles, methods, and conditions. The decision-making process steps are outlined. Finally, decision making by groups, using heuristics, and integrating ethics are reviewed.

The objectives of Module 4 may be summarized as: 1.

2.

3.

4.

5.

6.

7.

8.

To review how managers deal with problems and their varying styles To explore the conditions under which decisions are made To classify types of decisions as programmed or non-programmed To identify the five steps in the decision-making process To explain heuristics and other biases in decision making To explore group decision-making To explain and examine the impact of making decisions within a crisis context To review the ethical dimensions of decisions

Module Outline 4.1 How Do Managers Use Information to Make Decisions and Solve Problems?

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Managers deal with problems posing threats and offering opportunities ✓ Problem-solving - the process of identifying a discrepancy between an actual and desired state of affairs and then taking action to resolve it ✓ Knowledge workers - definition of "persons whose value to organizations rests with their intellectual, not physical, capabilities" is very appropriate for managers ✓ Information competency - the ability to locate, retrieve, evaluate, organize, and analyze information to make decisions that solve problems ✓ Performance threat - an actual or potential performance deficiency ➢ Examples include Hurricane Katrina, sub-prime mortgage crisis, General Motors and Chrysler bankruptcies ✓ Performance opportunity - a situation that offers the possibility of a better future

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Managers can be problem avoiders, problem solvers, or problem seekers ✓ Problem avoiders - persons who ignore information that would signal the presence of a performance threat or opportunity ✓ Problem solvers - person who make decisions and try to solve problems when required; reactive

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✓ Problem seekers - persons who are always looking for problems to solve or opportunities to explore; information gatherers; proactive •

Managers display systematic and intuitive thinking in problem-solving ✓ Systematic thinking - a person who approaches problems in a rational, step-by-step, and analytical fashion ✓ Intuitive thinking - a person who is more flexible and spontaneous than the systematic thinker; the person may also be quite creative

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Managers use different cognitive styles to process information for decision making ✓ Sensation Thinkers - impersonal and realistic in problem solving, prefer facts, certainty and control ✓ Intuitive Thinkers - idealistic and intellectual, comfortable with abstract and unstructured situations, impersonal manner and low attention to details ✓ Intuitive Feelers - take a broad and global view of issues, insightful, short on details, flexible with a high priority on relationships ✓ Sensation Feelers - analytical but place relationships as a high priority, realistic and factual, good communicators and sensitive to feelings and values of others ✓ Learning Activity - Students may take a few minutes to classify a manager or professor with whom they have worked into one of the categories. Students may discuss their reasoning in small or large groups.

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Managers make decisions under conditions of certainty, risk, and uncertainty ✓ Certain environment - an ideal situation where factual information exists for the possible alternative courses of action and their consequences (a student loan cost is an example; you know the interest rate, the time periods etc.) ✓ Risk environment - information and facts are incomplete ➢ Alternative courses of action can be assigned probabilities (chances of occurring) ✓ Uncertain environment - the most difficult condition; facts are few and information is poor ✓ See Figure 4.3 on page 77.

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Managers make programmed and non-programmed decisions when solving problems ✓ Decision - a choice among possible alternative course of action ✓ Programmed decisions - can use preplanned solutions based on the lessons of past experience; best for structured problems, frequently are the subject of policies and procedures that promote continuity and uniformity in management decisions ✓ Non-programmed decisions - for unusual situations full of ambiguities and information deficiencies; novel solutions crafted to meet the unique demands ✓ Learning Activity - Students may be asked to determine whether Capt. Sullenberger's emergency landing in the Hudson River (page 76) provides an example of a programmed or non-programmed decision

4.1 Questions for discussion suggested answers

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1) A manager needs to be able to prioritize, including whether a problem is worth involvement or attention. For example, an employee who is having personal issues that may be affecting work may not merit attention unless such behavior continues for some time and is affecting performance.

2) Neither is innately “better” than the other; both systematic and intuitive workers have important roles in organizations. It is important, however, to match employee thinking patterns with job requirements. Intuitive workers may not perform well in such welldefined and structured jobs as, say, tax accounting. Systematic workers may perform poorly in jobs that require creativity. Customer Service positions would probably be best handled by a Sensation Feeler decision making style.

3) Yes, pilots in high-risk or critical situations such as Capt. Sullenberger have extensive training that allows them to face unique situations with a background of similar procedures for programmed situations. Fire, tornado and earthquake drills for schools are examples.

4.2

What Are The Steps in the Decision-Making Process?

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Step 1 is to identify and define the problem ✓ Common mistakes in identifying problems - See inset box on page 81. ➢ Identifying the problem too broadly ➢ Dealing with symptoms rather than problems ➢ Choosing the wrong problem ✓ Stage of information gathering, processing and deliberation ✓ Stage where goals are clarified to specify exactly what a decision should accomplish

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Step 2 is to generate and evaluate alternative courses of action ✓ Criteria for evaluating alternatives See inset box on page 81. ➢ Cost benefit analysis - compares what an alternative will cost with its expected ➢ Timeliness - how long until we see results? ➢ Acceptability - will stakeholders accept the alternative? ➢ Ethical soundness - does it fit our ethical requirements

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Step 3 is to decide on a preferred course of action ✓ Classical and behavioral models of decision-making - see Figure 4.5 on page 82 for a comparison. ✓ Classical decision model - views the manager as acting rationally and in a fully informed manner; he or she makes an optimizing decision (that gives the absolute best solution to the problem) ✓ Behavioral decision model - assumes that people act only in terms of their perceptions, which are frequently imperfect; he or she makes a satisficing decision by choosing the first solution that appears satisfactory to them

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Step 4 is to implement the decision

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✓ Lack of participation error-when managers don’t include in the decision-making process those persons whose support is necessary for implementation •

Step 5 is to evaluate results ✓ This is a form of control ✓ Gathering data to measure performance results against initial goals; examining both positive and negative outcomes; may involve redoing steps in the decision-making process

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Ethical reasoning is important at all steps in decision making ✓ Conduct an "ethics double check" ✓ Ethical criteria ➢ utility - does the decision satisfy all stakeholders? ➢ rights - does the decision respect rights and duties of all? ➢ justice - does the decision administer justice? ➢ caring - is the decision consistent with responsibility to care? ✓ Spotlight questions ➢ How would I feel if my family found out? ➢ How would I feel if it were in the local paper or internet? ➢ What would a person I respect say about the decision?

4.2 Questions for discussion suggested answers 1) Yes, the steps are intended to be sequential, but if evaluation of results (step 5) is unsatisfactory, the process begins again with re-defining the problem (step 1).

2) Absolutely. Perceptions are frequently imperfect. Mangers may be certain that they understand the problem or stakeholders, but not have correct information. Some managers may “shoot from the hip” and make decisions too fast based on poor information or “instinct.” The consequences may be costly. Involving additional stakeholder groups may prevent a "lack of participation error" that would correct the faulty perception.

3) The ethics double-check depend upon the decision maker to have several basic concepts.

A clear understanding of all relevant stakeholders, applicable rights and duties, justice and the ability to care are all necessary for the decision maker to make correct answers to the four ethical questions.

The spotlight questions require the decision maker to feel a responsibility to a family or community that would make value judgments on the morality of the decision and its consequences.

If a decision maker lacked the ability to understand these criteria or lacked a value system that would cause guilt or embarrassment, he or she could answer the questions incorrectly and make an unethical decision. This might particularly be true if the decision maker were in an unfamiliar country or culture and did not adequately understand the relevant rights or duties or did not have any expectation that family or a home community would find out about or understand the decision. The spotlight questions might also present a

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problem if the organization was large enough that the decision maker was confident that the decision would be attributed to the organization and no one would find out who was responsible.

4.3

What Are Some Current Issues in Managerial Decision Making?

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Personal factors help drive creativity in decision making ✓ Creativity -generation of a novel idea or unique approach that solves a problem ✓ Personal Creativity Drivers build creativity in the workplace (inset box page 85). ➢ task expertise - creativity is an expansion of an existing skill ➢ task motivation - drive to work hard to resolve a problem ➢ creativity skills - "right brain" thinking such as imagination, intuition, holistic processing and the ability to make random associations. ✓ Learning Activity: Students may do extended research by taking one of many online quizzes that assess tendencies to right or left brain thinking. Author Dan Pink explores the impact of right brain thinking and careers in the future in the book "A Whole New Mind". Students may read the book and report on Pink's findings or present one of the many online videos of Pink discussing the subject.

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Situational factors help drive creativity in decision making ✓ Situational Creativity Drivers can stimulate creativity and unlock the potential of creative workers (inset box page 86). ➢ group creativity skills - selecting individuals with creative abilities ➢ management support - leaders with patience for creative processes and a commitment to provide resources necessary to develop ideas ➢ organizational culture - making creativity a core value of the organization such as Apple, Mattel, Google, Amazon

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Group decision-making has both advantages and disadvantages ✓ Advantages (Table 4.1 on page 87) ➢ more information ➢ more alternatives ➢ increased understanding ➢ greater commitment ✓ Disadvantages ➢ social pressure to conform to group opinion ➢ domination by a few members ➢ time delays ✓ Learning Activity- Lost at Sea, an Online Interactive Learning Resource. After the activity, students may discuss how the advantages and disadvantages of group decision making influences their group choices.

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Judgmental heuristics and other biases may cause decision-making errors ✓ Availability heuristic - using easily available information to assess the situation without further research, although it may be incomplete, irrelevant or wrong

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✓ Representativeness heuristic - assessing a situation based on a stereotype without regard for unique circumstances ✓ Anchoring and adjustment heuristic - adjusting a previous decision or action without regard for the correctness of the previous decision. ✓ Framing error - when mangers evaluate and resolve a problem in the context in which they perceive it ✓ Confirmation error - decision maker only notices or accepts information that confirms the decision recently made ✓ Escalating commitment - tendency to increase effort and perhaps apply more resources to pursue a course of action that signals indicate is not working; an inability to call it quits ➢ how to avoid wasting resources on an escalating commitment to a bad decision: - set advance limits on resources - make up your own mind rather than follow others - ask why you are continuing the course of action - consider saving the resources or costs for another purpose •

Managers must be prepared for crisis decision-making ✓ Crisis - an unexpected problem that can lead to disaster if not handled quickly and appropriately ✓ Manager mistakes - a common error in a crisis is for managers to become isolated and limit the sources of information when in fact they should do exactly the opposite.

Seek many sources of information before taking action. ✓ Crisis Management Programs train managers in how to handle crisis situations

4.3 Questions for discussion answers 1) If the company for which you work uses an “anchor and adjustment” system, there are a couple ways to mitigate the possible negative consequences: • Perform at a high level and the “adjustment” portion should, in most organizations, grow at a very steep rate. Over time, you may outperform the market.

• Gather convincing evidence that the compensation which you receive is below that which you could earn at comparable positions in other companies. This method requires god interpersonal skills, but managers do not want to lose great employees. If your performance is at a high level, you will have a concerned listener in your manager. Arm him or her with “ammunition” regarding competitive compensation.

2) Here are several real-world examples of escalating commitment: • You win several hundred dollars gambling in Las Vegas, a total of $800 “net.” Then you begin to lose and eventually are down by $200 below the initial sum you brought with you, say $500. Rather than walk out the door with the $300 you have left, you continue to play to “get back to” the initial $500.

• One world leader presents objective evidence that indicates that a war is not being waged successfully. In discussing this, the other party notes that “we have already invested many lives and millions of dollars already” and we cannot exit because of those factors.

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You invest $1000 in the stock market by buying one company’s shares. After the stock price increases in value several months in a row, it drops substantially and the news is bad (liability issues, ethics, losses etc.) You decide to “sell” but want to wait until you get back to what you initially invested, $1000 rather than “cut your losses.”

3) A crisis can be turned into an opportunity in a number of ways.

• The way a manager handles a crisis can be an opportunity to demonstrate the integrity of the company. For example, Johnson & Johnson handled a crisis extremely well when they were a victim of product tampering in 1982. Extra Strength Tylenol was contaminated with cyanide, killing seven people in the Chicago area. Johnson & Johnson acted swiftly to remove the product from the market and took effective steps to warn consumers about the danger. Their swift response was seen as responsible and ethical. Within a year, Tylenol had regained much of its pre-crisis market share and Johnson & Johnson was seen as an example of corporate responsibility.

• US Airways saw a similar effect following the 2009 ditching of a disabled aircraft in the Hudson River. The actions of Captain Sullenberger and his crew were seen as heroic, and US Airways received praise.

• Another way a crisis can be turned into an opportunity is to evaluate all actions after the crisis has passed to turn it into a learning experience for future experience. US Airways and other airlines have used the lessons learned from the experience to determine ways to reduce the bird strikes that were responsible for damaging the aircraft and make water landings safer and survivable.

Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed The News Feed feature for this Module is entitled “Shareholders Push to Regulate Executive Pay” (Page 78).

Ask students to complete the “Reflect and React” exercise following the News Feed. This exercise will work well as a take-home assignment or for distance learning.

Additional questions for the class to consider and discuss: •

Recent examples in the news of excessive executive compensation

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How would you feel if you took pay cuts or were recently laid off and found out that the top executive of your company did not take a pay cut or possibly received a bonus?

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Is it possible that executive compensation is not based on merit but is more reflective of a supply and demand market for scarce skills?

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Trendsetters In the Trendsetters feature on Page 83, “Indra Nooyi Brings New Style and a Sharp Eye to Pepsi.” Pepsico CEO Indra Nooyi is profiled as having a unique business sense, strong work ethic along with "heart and a sense of humor".

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Nooyi is only the 12th woman to head a Fortune 500 firm. Ask students to discuss whether men and women have different approaches to decision making.

Assign students a research project investigate the decisions by Pepsico to sell Taco Bell, Pizza Hut and KFC; the merger with Quaker Oats and purchase of Tropicana. Do these decisions seem to have been examples of management as a problem avoider, problem solver or problem seeker?

Which situation would best describe the environment under which the decisions were made, certainty, risk or uncertainty?

Evaluate Nooyi's comment about assuming others have positive intent, ending with "Maybe they are saying something to me that I am not hearing?" What can students learn about her decision-making style from that comment?

Stay Tuned The Stay Tuned inset in Module 4 on page 88 provides information on green-house gas emissions as a concern of business. The carbon footprint of several common items are listed.

These questions may be used in class or online for discussion in addition to the questions listed in the "Your Thoughts" section: •

How would the different views of moral reasoning approaches (utilitarian, individualism, justice and moral rights) in module 3 view the responsibility of business to control greenhouse gasses?

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Using the steps in the decision-making process listed in module 4 (figure 4.4, page 80), how would students define the problem? What are some problems in defining the problem? Extended discussion may continue through all 5 steps.

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Track your personal carbon footprint for a week. Do you view the problem any differently?

Self Assessment The suggested assessment for this module is entitled "Cognitive Style." Students may discuss how their personal cognitive style influences their decision-making style.

Case Snapshot

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The case for this Module is “Amazon.com - One e-store Rules Them All.” Students have probably visited Amazon.com as a customer. Encourage them to visit the website again from the perspective of evaluating the decision making process of the company.

1. In what ways does Bezos's decision to develop and deliver the Kindle show systematic and intuitive thinking?

Systematic thinking approaches problems in a rational, step-by-step, analytical way. Problems are broken down into smaller components. Students may suggest that Amazon breaks down potential markets in the same way. Music and video have been digital download products for some time, digital books are a logical extension of the technology.

Intuitive thinking is flexible, spontaneous and creative. Bezos is quoted in the text as saying “you have to rely on experienced executives who’ve honed their instincts and are able to make good judgments". This seems to indicate his preference for creative thinking.

2. How do you describe the competitive risk in Amazon.com's environment as it enters the market for digital downloads?

Students will have a wide variety of views of the competitive environment. This can be tied into discussion of Module 4 concepts by discussing whether their views are examples of Amazon as a problem avoider, problem solver or problem seeker. Problem seeker seems the most appropriate because Amazon seems to be forward thinking and looks for problems to solve or opportunities to explore.

Another way to tie in concepts from Module 4 is to discuss whether the competitive risk indicates a certain, risk or uncertain environment.

3. Which decision errors and traps are the greatest threats to the success of Bezos's decision making as Amazon's CEO and why?

The possibilities are endless. Amazon has always been a trailblazer in delivering products, but the Kindle is a step into producing product too. Concepts from Module 4 to apply include: • Defining the problem too broadly or narrowly • Dealing with symptoms, not causes • Focusing on the wrong problem • Costs outweigh benefits • Timing • Acceptability to stakeholders • Ethical soundness • Lack of participation error 4. FURTHER RESEARCH - What are the latest initiatives coming out of Amazon? How do they stack up in relation to actual or potential competition? Is Bezos making the right decisions as he guides the firm through today's environmental challenges?

Research is a great way to stimulate class discussion. Online or face-to-face students can discuss their findings in pairs or small groups and each student may write a two-sentence summary of the research of the other students in the class.

Students may be asked to select one article from the group to present to the class.

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This may or may not be the student who originally researched the article. This is easily adapted to online classes through threaded discussions or chat.

Suggested Team Exercise for Module 9 Assign teams to develop a decision-making process for buying a used car for, say, $7,000. This should include a consensus ranking of the top 5 criteria they would use and evaluate in their selection. Where would they look for the cars? How many cars or models would they examine before they would feel comfortable making their decision? What are the benefits of looking at more cars? What are the disadvantages, if any? Were they able to optimize or satisfice?

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MODULE 5 Plans and Planning Techniques Goals and objectives get you there faster Module Objectives Module Five provides a review of planning and planning techniques and tools. The module includes a definition of planning and a review of its benefits and the varying types of plans, used by most organizations. The distinction between policies and procedures is explained. A variety of specific types of planning support tools or specific types of planning are reviewed including forecasting, contingency, budgets, project and scenario planning. Benchmarking and its definition are provided. Finally, the merits and disadvantages of staff planners and participatory planning are discussed.

The objectives of Module 10 may be summarized as: 1.

2.

3.

4.

5.

To define planning and its benefits To classify types of planning by time horizon, and their level of detail and use To explain policies and procedures To define specific planning used for budgets and project management To provide various planning tools and techniques, such as forecasting, contingency and scenario planning, and benchmarking 6. To review the use and benefits of staff planners and participatory planning

Module Outline 5.1 How and Why Do Managers Plan?

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Planning is one of the four functions of management ✓ Planning – is a process of setting goals and objectives, and determining how to best accomplish them ✓ Planning comes first among the four functions; it sets the stage for every other function (figure 5.1 illustrates the four functions).

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Planning sets objectives and identifies how to achieve them ✓ See Table 5.1 on page 97 which explains the 5 steps in the planning process ✓ Step 1 - Define objectives - the specific results or desired goals one hopes to achieve ➢ Stretch goals - performance targets that require extra hard work and stretch to reach ✓ Step 2 - Determine current status compared to objectives - where are you now, and how far do you need to go to accomplish the objectives ✓ Step 3 - Develop premises regarding future conditions - what could possibly happen? ✓ Step 4 - Analyze alternatives and make a plan.

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➢ Plan - a list of actions that must be taken in order to pursue the alternative and accomplish the objectives ✓ Step 5 - Implement the plan and evaluate results - take action and decide if it was the correct one to take.

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Planning improves focus and action orientation ✓ See the inset on page 97 for the benefits of good planning ➢ Action oriented ➢ Priority oriented ➢ Advantage oriented ➢ Change oriented

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Planning improves coordination and control ✓ Planning provides a link with control, setting a goal with which to measure success. ✓ Hierarchy of objectives - lower level objectives help to accomplish higher ones ✓ Figure 5.2 illustrates the hierarchy with examples

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Planning improves time management ➢ Helps make choices that allocate time among competing demands ➢ See Tips to Remember - Do's and Don'ts for Managing Your Time on page 99

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Learning Activity - Challenge students to describe the planning steps as they would follow them to achieve a personal goal such as earning an “A” on the next management exam, graduating on time or getting a job.

5.1 Questions for discussion suggested answers 1) All employees need to plan effectively. This skill will enable higher job performance and illustrates to supervisors that an employee is ready for promotion to positions where planning will become increasingly important.

2) Deciding where to go (or objectives) is the most difficult. Once those are determined, the other steps are much easier to perform. Deciding on objectives is perhaps the most unstructured area in planning.

3) Individuals should prepare a strategic plan for themselves and their career. What objectives do I want to accomplish? When do I want to achieve each objective? What resources will I need? What tactics such as training or degrees will I need? Which types of experiences will I need to gain to advance and how will I gain that experience?

5.2 What types of plans do managers use?

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Managers use short-range and long-range plans ✓ Short-range plans - usually cover a year or less ✓ Long-range plans - look ahead three or more years into the future

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✓ Elliot Jacques, researcher, found that very few people have the capacity to think long-term; most of us work comfortably with only three month time spans (figure 5.3 on page 101).

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Managers use strategic and operational plans ✓ Strategic plans - set broad, comprehensive, and longer-term action directions ✓ Vision - organization's purpose and hopes for the future ✓ Tactical or Operational plans - define what each functional work unit needs to do to implement strategic plans in specific terms. Examples of functional plans include: ➢ Production plans - methods and technology needed by people in their work ➢ Financial plans - deal with money required to support various operations ➢ Facilities plans - deal with facilities and work layouts ➢ Marketing plans - deal with the requirements of selling and distributing goods or services ➢ Human resource plans - deal with the recruitment, selection, and placement of people into various jobs

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Organizational policies and procedures are plans ✓ A policy communicates broad guidelines for taking action and making decisions in specific circumstances ✓ Procedures or rules describe exactly what actions to take in specific situations

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Budgets are plans that commit resources to activities ✓ A budget is a plan that commits resources to activities, programs, or projects ➢ A fixed budget allocates a set amount of resources for a specific purpose ➢ A flexible budget allocates resources that vary in proportion with various levels of activity ➢ A zero-based budget allocates resources as if each budget was brand new

5.2 Questions for Discussion Suggested Answers 1) Yes, long-range planning is very important, especially in complex industries, such as the automotive, defense, aerospace, and pharmaceutical industries, where product development cycles are lengthy.

2) Companies need to have policies for human resources, safety and health, environmental compliance, ethics, and perhaps company intellectual property.

3) Yes, zero-based budgeting has the disadvantage of requiring more time in preparation and justification of expenses and programs. Using existing budgets as a “base-line” allows for easier incremental changes.

5.3 What are some useful planning tools and techniques?

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Forecasting tries to predict the future

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✓ Forecasting is the process of predicting what will happen in the future ➢ Qualitative forecasting relies on expert opinions ➢ Quantitative forecasting relies on mathematical models and/or statistical analysis •

Contingency planning creates back-up plans for when things go wrong ✓ Contingency planning identifies alternative courses of action to take when things go wrong. The recession caused many organizations to realize the importance of contingency plans.

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Scenario planning crafts plans for alternative future conditions ✓ Scenario planning identifies alternative future scenarios and makes plans to deal with each

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Benchmarking identifies best practices used by others ✓ Benchmarking uses external comparisons to gain insights for planning ✓ Best practices are methods that lead to superior performance

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Staff planners provide special expertise in planning

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Participatory planning improves implementation capacities ✓ Participatory planning includes the people whose ideas and inputs can benefit the plans and whose support will be needed for implementation ✓ Figure 5.4 on page 107 depicts how participation helps build commitment to plans

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Goal setting helps align plans and activities throughout an organization ✓ Goal setting can make a difference in how well plans are implemented ✓ Suggestions for creating "great goals" that result in successful plans are illustrated on page 108 ➢ Specific ➢ Timely ➢ Measurable ➢ Challenging ➢ Attainable

5.3 Questions for Discussion Suggested Answers 1) Forecasting, even if imperfect, still provides directional guidance in most cases and is better than “randomness” or the lack of total direction.

2) Some plans involve decisions that are so inconsequential or low in cost or importance that a contingency plan is not worth the effort in time it would require. For instance, it would not make sense to have a contingency plan for grocery shopping if your favorite tissue brand is out-of-stock.

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3) Most workers today prefer participatory planning; they want to be involved in decisions and direction that affects them.

Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed The News Feed feature for this Module is entitled “Recession is a Good Time for Setting Priorities” (Page 105).

Ask students to complete the “Reflect and React” exercise following the News Feed. This exercise will work well as a take-home assignment or for distance learning.

Additional questions for the class to consider and discuss: •

What examples do you find of contingency planning in Brune's comments?

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How do planning and control seem to be linked at Allstate?

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Brune would like to see more women majoring in IT. What is the trend for women enrolling in IT in your college? Ask the IT faculty or college recruiters what factors contribute to the trend.

Trendsetters In the Trendsetters feature on Page 102, “Don Thompson Keeps McDonald's USA on Focus,” McDonald's USA President Don Thompson is profiled as a young executive with an unusual career path that lead him from an engineering career at Northrop Grumman to McDonald's. This is a good case study illustrating how important it is to keep flexible in pursuing career goals.

Suggested questions for further discussion: •

Thompson became discouraged when he failed to win a coveted award. Is this a good reason for changing career plans?

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Why do you think his move to operations provided the attention necessary for advancement?

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What evidence do you see that Thompson puts a high priority on participatory planning?

Stay Tuned

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The Stay Tuned inset in Module 5 on page 103 provides information on romance between coworkers as a concern of business. Statistics on the types of policies that organizations have about office romance are included. These questions may be used in class or online for discussion in addition to the questions listed in the "Your Thoughts" section: •

What would be the benefit of developing a policy on employees becoming romantically involved?

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Could there be any disadvantages of having such a policy?

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Should the policy apply at all levels of the organization? Why or why not?

Self Assessment The assessment for this Module is entitled “Time Management Profile”” (Page 111).” The assessment tool is intended to help students assess their time management abilities/skills.

Students that find they could manage their time more effectively might be encouraged to follow the steps in the planning process (page 97) to develop a plan to improve time management.

Case Snapshot The case for this Module is “Lands' End - Living by the Golden Rule” 1. How could the planning process be followed to create a plan for continuous improvements in Lands’ End’s online customer service?

Continuous improvement (Module 2) involves constantly evaluating products, processes and performance to determine how they can be improved. In Module 2, Deming and Juran are profiled as advocating a link between planning and control to improve performance. Lands' End can use the planning process (Module 5) to determine objectives, establish current status, develop alternative scenarios, make a plan, implement the plan and evaluate results. This process would set objectives or goals for the improvements in customer service they want to achieve, determine the current levels of customer satisfaction, use participatory planning to develop alternative scenarios and solutions, develop a plan for improving the customer service areas that have been identified as a target for improvement (response time, delivery time, product quality, ease of return), and finally implement the plan and evaluate if the plan achieved the targeted results.

2. If you were hired by Lands’ End to help benchmark its customer service performance, which three companies would you choose and why.

Several sources evaluate customer service satisfaction of online retailers.

Companies that consistently receive high marks of customer satisfaction are Amazon, Netflix, Barnes & Noble and L.L. Bean. These would be good targets of customer service performance benchmarks.

3. How could MBO at Lands’ End build a clear hierarchy of objectives, improve goal alignment and help with implementing plans within the customer services area

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A Hierarchy of objectives (page 98) is a way to follow a management objective through the processes and levels in the organization that must be involved to accomplish the goal. In this situation, the management goal would be to improve customer service with a specific measurable objective. The next step is to determine which departments in the organization contribute to customer service and establish their goals for improvement. This might include manufacturing, purchasing, distribution or actual customer service representatives.

4. FURTHER RESEARCH—Browse the Lands’ End web site and check the business news for updates to learn as much as you can about the company. Do the same for L.L. Bean. Does one firm or the other have any special advantage in respect to planning for future success? Why or why not Suggested Team Exercise for Module 5 Assign teams to develop a strategic plan and an operational plan for a residential interior painting service that they are planning to launch in the local market. When their plans are complete, they may be required to contact local painting contractors and determine how feasible their plans really are.

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MODULE 6 Controls and Control Systems What gets measured happens Module Objectives Module Six provides a comprehensive discussion of Controls and Control Systems including the use of objectives and standards, the importance of measurement and correction, and the focus on work inputs, throughputs, and outputs. Additionally the control process is examined in the context of organizations including management by objectives performance systems, employee discipline, and purchasing and quality control processes. The use, computation and benefits of breakeven analysis are also explored.

The objectives of Module 6 may be summarized as: 1.

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6.

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To define and explain controlling and its benefits To explain management by objectives To review employee discipline as a control method To explore purchasing, inventory and quality control systems To review the computation, use and benefits of breakeven analysis To identify types of control systems used by organizations To explain the purpose of financial ratios and balanced scorecards

Module Outline 6.1 What Is Important to Know about the Control Process?

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Controlling is one of the four functions of management ✓ An after-action review identifies lessons learned in a completed project, task force, or special operation ✓ Controlling is the process of measuring performance and taking action to ensure desired results

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Control begins with objectives and standards ✓ An output standard measures performance results (outcomes or work) in terms of quantity, quality, cost, or time ✓ An input standard to measure work efforts that go into a performance task

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Control measures actual performance ✓ Accurate ad timely measurement is essential ✓ Learning Activity - To help students understand the role of control as measurement, ask them to identify how they use control in their personal lives by setting objectives and measuring performance. Examples may include using a scale to calculate weight

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lost, keeping track of their grades to keep a certain grade point, keeping to a personal budget or looking for a car with a minimum gas mileage rating.

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Control compares results with objectives and standards ✓ Need for action = Desired performance-Actual performance ✓ Engineering comparisons - carefully calculated and predetermined standards ✓ Historical comparisons - past experiences as a basis to measure

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Control takes corrective action as needed ✓ Management by exception - the practice of giving attention to situations that show the greatest need for action

6.1 Questions for Discussion Suggested Answers 1) Standards for an emergency room might include: time from admission to procedure; mortality rates; patients successfully treated per evening; litigation expense; national or community ratings.

Standards for a fire department might include response time to leave station from dispatch call; saved buildings; lives lost; fireman injuries and/or deaths.

2) Yes, and example would be conformance standards-does the item meet customer requirements. This would be true for both incoming raw materials and outgoing finished goods.

3) Management by exception presumes that the “norm” or the “baseline” is satisfactory, and therefore may lessen opportunities for all units or departments to continuously improve.

Managers must also be observant of problem situations on items of any level of priority so they may be corrected, and opportunity situations on any level should provide lessons to improve future performance.

6.2 How Do Managers Exercise Control?

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Managers use feedforward, concurrent and feedback controls ✓ Organizations are open systems that interact with their environment with a cycle of input, throughput and output that is controlled by management. ✓ Figure 6.3 depicts three types of managerial controls ➢ Feed-forward controls - (preliminary controls) take place before work begins/prevent problems before they occur; proactive ➢ Concurrent controls - (steering controls) focus on what happens during the work process ➢ Feedback controls - (post action controls) take place after completing an action ✓ Learning Activity - Students may be asked to consider the areas they identified earlier for control in their personal lives and determine how they use feedforward, concurrent and feedback controls to accomplish their objectives.

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Managers use both internal and external controls ✓ Internal control - managers encourage workers to use self discipline to keep focused in achieving goals at work. ✓ External control - systems established by management to directly control work processes ➢ Bureaucratic control - policies, procedures, job descriptions, budgets and supervision all keep behavior in line with organizational objectives ➢ Clan control - organizational culture influences employee behavior ➢ Market control - market competition forces organizations to adjust products, pricing and other practices to maintain a competitive advantage ✓ Learning Activity - Complete self-assessment "Internal/External Control" on page 133.

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Management by objectives integrates planning and controlling ✓ Management by objectives (MBO) is a process of joint objective setting between a superior and subordinate ➢ Important to state as specifically and quantitatively as possible ➢ Measurable end product ➢ Verifiable work activities ➢ Figure 6.4 depicts the MBO process ✓ Improvement objectives - specific performance improvement is stated so it can be measured ✓ Personal development objectives are for employee development or personal growth ✓ Learning Activity - After reviewing "Tips to Remember - How to write a good performance objective" on page 124, direct students to write a Personal Development Objective. This may be implemented as a group activity in face to face or online classes as students get into small groups and share goals and do peer review to determine if they fulfill the steps in "Tips to Remember".

6.2 Questions for Discussion Suggested Answers 1) Bureaucratic control is a formal system of policies, procedures and supervision established by management to directly control employees. Clan control is an informal control of employee behavior that is reinforced by employees to maintain organizational culture. New employees are taught the culture or "the way we do things around here" and reinforce appropriate behavior and discourage inappropriate behavior.

2) McGregor's Theory Y type manager would feel that people are willing to use internal controls or self discipline in their work, but they are more likely to do this when they have some participation in setting performance objectives.

3) MBO probably would fail if there is a relationship problem between a team leader and a team member. Mutual support and trust is a key aspect of success in a team as well as for MBO to work well. If MBO is administered well, it may improve team leader and team member relations.

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6.3 What Are Some Useful Organizational Control Systems and Techniques?

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Quality control is a foundation of modern management - the work of W. Edwards Deming is the foundation of the quality movement so important to modern management. ✓ ISO certification - International Standards Organization certifies that organizations adhere to quality standards. Increasingly important in a global economy where businesses use sources worldwide for products and services. ✓ Total quality management - process of emphasizing quality as an objective and striving for zero defects in products or services. ✓ Continuous improvement - constantly looking for ways to improve performance ✓ Control charts - graphical representation of performance that indicate trends. These trends can be used to identify whether performance is "in control". Students who have taken statistics courses will recognize the control limits in control charts. ✓ Six Sigma - quality standard that tolerates no more than 3.4 defects per million units produced. ✓ Learning Activity - students may apply the concepts of total quality management, continuous improvement and control charts to academic performance in a management class. How are academic performance indicators and student effort similar to quality control in industry?

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Gantt charts and CPM/PERT are used in project management and control. ✓ Project management - area of management that is responsible for planning and control of a project such as an event, product development or building project. Project managers are responsible for completing an activity on time and on budget. ✓ Gantt chart - graphic depiction of the scheduling necessary to complete tasks on time for project completion. ✓ CPM/PERT - charts depict a critical path in a project. A critical path is a sequence of events that can slow down completion of a project if delayed.

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Inventory controls help save costs - and make sure that inventory is adequate for current demand but not so large that there is expensive surplus inventory. ✓ Economic order quantity - automatic order of a pre-determined amount of inventory when inventory falls to a certain level. Examples include college bookstores and supermarkets. ✓ Just-in-time scheduling (JIT) - inventory arrives exactly when it is needed for production or sale.

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Breakeven analysis shows where revenues will equal costs ✓ Breakeven point - revenue equals costs. When revenue exceeds this point a product or service will earn a profit. ➢ Breakeven Point = Fixed Costs ÷ (Price - Variable Costs) ➢ Figure 6.8 on page 162 illustrates the concept graphically ✓ Breakeven analysis - determines breakeven point when costs change.

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Financial ratios and balanced scorecards strengthen organizational controls

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✓ Financial ratios - calculations that track financial success of the organization. Table 6.1 on page 129 lists the most common financial ratios used for control ➢ Liquidity - ability to meet short term financial obligations (pay bills) ➢ Leverage - measures use of debt ➢ Asset management - measures how well inventory is managed ➢ Profitability - determines if the firm is producing a return on the owner's investment ✓ Balanced scorecard - financial ratios measure one aspect of organizational performance. Other things should be measured to keep performance focused on achieving organizational goals efficiently. ➢ Financial Performance ➢ Customer Satisfaction ➢ Internal Process Improvement ➢ Innovation and Learning Questions for Discussion Suggested Answers If control results in shortages of inventory, demand might drop as customers determine that the organization rarely has the items that are advertised or are in high demand. Good inventory management manages inventory costs so they are held to a minimum but do not result in shortages.

Students will likely agree that it is not out of date, particularly if they have used a defective product or had a vehicle recalled. This would be an opportunity to ask them why total quality management is still so important. Why after 50 years of understanding the importance of quality production do we still have defective products?

Balanced scorecards build on financial analysis to measure organizational performance in other financial measures, customer satisfaction, internal process improvement and innovation and learning.

Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed The News Feed feature for this Module is entitled “Elsewhere Class” Struggles to Balance Work and Leisure (page 122).

Ask students to complete the “Reflect and React” exercise following the News Feed. This exercise will work well as a take-home assignment or for distance learning.

Additional questions for the class to consider and discuss:

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How could the "Elsewhere Class" balance their conflicting priorities better if they applied the steps of the control process?

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What influence does Clan Control have in establishing the "Elsewhere Class"?

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Apply the elements of the balanced scorecard to the "Elsewhere Class" and the pursuit of work-life balance.

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Dan Conley feels that one aspect contributing the problem is that so much of our work is intangible. How can planning and control help workers see results in a job that seems to produce intangible results?

Trendsetters In the Trendsetters feature on page 119, "Patricia Karter Shows Brands with Values Are Really Sweet," Dancing Deer Bakery founder Patricia Karter is profiled as an entrepreneur balancing growth with a strong commitment to her values and social responsibility. This short case is a good study in keeping true to your mission while changing your business plan. Suggested questions for further discussion: •

What influence might Market Control have on Dancing Deer Bakery's successes?

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What role did control have in Karter's decision to decline a large order from Williams Sonoma?

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Apply the elements of the balanced scorecard to the performance of Dancing Deer Bakery. How would the mission and vision of the company influence the elements you choose to measure?

Stay Tuned The Stay Tuned feature in Module 6 on page 118 provides information on employee theft.

Statistics on theft are included. These questions may be used in class or online for discussion in addition to the questions listed in the "Your Thoughts?' section: •

How might Management by Objectives be used as a tool to reduce employee theft?

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How could other types of control prevent or reduce employee theft?

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Is theft a bigger problem with the "lower level" employee as described in the feature, or is it a bigger problem with upper level employees that steal larger amounts of money?

Explain your thoughts

Self Assessment

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The assessment for this module is entitled “Internal/External Control” (Page 133). The assessment tool is intended to help students assess their tendencies toward an internal or external locus of control.

For extended learning, students could be grouped by their scores and discuss characteristics of people with their level of internal or external control. Ask students if they would prefer to have employees or a manager with an internal or external locus of control. The advantages and disadvantages of each type may be listed and shared with the class.

Case Snapshot The case for this Module is “Electronic Arts: Inside Fantasy Sports” 1) How can feedforward, concurrent and feedback controls each help Electronic Arts achieve its quality goals for video games?

Feedforward, Concurrent and Feedback controls are three types of managerial controls that illustrate how an organizations react with their environments as they control internal processes. For EA, these types of control would help achieve quality goals for video games: • Feedforward or preliminary controls ensure that EA is producing the correct products to achieve their mission and excite their target market. To do this they must keep track of their own product sales, track the sales of competing products, and keep on top of the popularity of the celebrity players depicted in the sports games they develop. Students may have many other suggestions such as new gaming technology or economic trends. It is also important to use the right resource inputs. This might include talented programmers, licensing of the NFL, rights to use player likeness.

• Concurrent Controls ensure that the right things are being done in the workflow process to make sure that a quality product is being produced. For EA, this would include accurate development and programming of the game to prevent glitches.

• Feedback Controls ensure that the final results are up to desired standards.

Product testing and customer feedback would be two ways to effectively test games. Students with a strong background in testing prototype games are very likely to have much greater insight into this process than all but the most game-savvy instructor or professor!

2) What output standards and input standards would be appropriate for the control process as applied to video game production?

• Output standards measure outcomes or work results. Applying output standards to the control process of video game production would require determining measureable factors that indicate that the games have found success with consumers. Market share, sales, consumer and critical reviews, programming errors and costs of production would be possible output standards.

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Input standards also measure work efforts and are used when outputs are difficult to measure. EA may choose to measure the use of resources such as time spent in game development or costs incurred in securing or licensing players' images.

3) If you were the head of a project to create and commercialize a new sports video game for teaching math to primary students, how could you use CPM/PERT to assist in project management?

CPM/PERT charts are project management tools that establish a time line until completion of a product. EA may use CPM/PERT Charts to determine the steps necessary in developing a math game and identify a critical path that will show which parts of the project would slow delivery of the game if delayed. The CPM/PERT diagram may be necessary to determine if the game can be delivered in time for a new school year or holiday season sales.

4) Further Research - Did Electronic Arts succeed in its quest to take over Take-TwoInteractive? If it did make the purchase, was it a good move for EA? If EA didn’t make the purchase, what are the consequences in terms of EA’s strategic positioning for future high performance? Overall, does EA’s top management still seem to be on “top of its game?”

Consolidation in the gaming industry continues and speculation on possible mergers and takeovers provide ample opportunity for students to research Electronic Arts, Take-Two and other gaming companies.

Suggested Team Exercise for Module 6 Break the class into pairs and be sure that at least one student has a calculator in each pair.

Calculate the breakeven costs for this hamburger restaurant: The selling price for each hamburger is $ 2.00 each The average cost per burger is Meat Paper Condiments Bread Labor

.60 .10 .15 .20 .20

In addition, the cost per year for rent, insurance, property taxes, and utilities which are on all the time is $75,000.

A) How many hamburgers does the restaurant need to sell to break-even?

B) How many do they need to sell to make a profit of $150,000 a year?

Calculations:

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a) Unit costs are $1.25 per burger obtained by adding the costs above.

Therefore, BEP = Fixed Costs/Price per Unit -Variable Cost per Unit = $75,000/ ($2.00-$1.25) = 100,000 burgers b) The goal is to make a profit of $150,000 after covering all costs. Since we already know the BEP is 100,000 burgers and we know that we make $.75 per burger, then the restaurant needs to “cover” the goal of the $ 150,000 by selling an added 200,000 burgers.

So the total is the 200,000 needed to break-even PLUS the added 150,000 burgers needed to make a profit of $ 150,000 annually.

OR 350,000 TOTAL burgers will generate a profit of $150,000.

Proof: 200,000 burgers X a profit of $.75 each per burger = $150,000 annually

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MODULE 7 Strategy and Strategic Management Insights and hard work deliver results Module Objectives Module Seven provides a definition of strategy and a review of its importance to organizational success. Additionally the various types of strategies employed by organizations are examined as well as their applicability. Porter’s models and SWOT analysis are outlined and explored as valuable tools in developing and analyzing both company and industry strategy and competitiveness.

The objectives of Module 7 may be summarized as: 1.

2.

3.

4.

To define and explain strategy To categorize and explain the main strategies utilized by organizations To review a framework used by organizations in developing strategies To review Porter’s models as useful tools in understanding competitive position of a company and the challenges of an industry 5. To define and explore how SWOT analysis is used as a basis for developing strategies

Module Outline 7.1 What types of strategies are used by organizations?

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Strategy is a comprehensive plan for achieving competitive advantage ✓ A strategy is a comprehensive action plan that identifies long-term direction for an organization and guides resource utilization to accomplish its goals ✓ “Best guess” about what to do to be successful in the face of rivalry and changing conditions ✓ Strategic intent is a unifying target or goal ✓ Competitive advantage is an “edge” or method of operations that allows an organization to outperform rivals ➢ Sustainable Competitive Advantage is a way of operating that is difficult to imitate

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Organizations use strategy at the corporate, business and functional levels ✓ Corporate strategy provides direction and guides resource allocations as a whole ✓ Business strategy provides direction and guides resource allocations for an individual unit or division within a larger enterprise ✓ Functional strategy guides activities to implement strategies at a detail or specific operations level ➢ Such as Marketing, Finance, Manufacturing, Marketing, and Human Resources

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Growth and diversification strategies focus on expansion ✓ Growth strategies are those designed to increase the size of current operations ➢ Concentration strategies focus on an existing business area ➢ Diversification strategies focus on entering new business areas o Related – similar or complementary business areas o Unrelated – entirely new business areas o Vertical integration - acquire suppliers (backward) or customers (forward)

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Restructuring and divestiture strategies focus on consolidation ✓ A retrenchment strategy seeks to correct weaknesses by making radical changes to current ways of operating ➢ Liquidation – when a business closes and sells is assets to pay creditors ✓ A restructuring strategy seeks to correct weaknesses by reducing the scale or mix of operations ➢ Chapter 11 bankruptcy - protects an organization from creditors as it reorganizes in an attempt to restore solvency. ✓ Downsizing seeks to decrease the size of operations ✓ Divestiture sells off parts of the organization to refocus attention on core business areas

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Global strategies focus on international business initiatives ✓ Globalization strategy adopts standardized products and advertising for worldwide use ➢ Gillette razors ✓ Multidomestic strategy customizes products and advertising to meet local cultural needs ➢ Proctor & Gamble consumer products ✓ Transnational strategy seeks efficiencies of global operations with attention to local markets ➢ Ford, Sony

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Cooperative Strategies find opportunities in alliances and partnerships ➢ Strategic alliances - two or more organizations create a partnership to pursue an area of mutual interest or strengthen competitive advantage. ➢ Airlines often create strategic alliances with foreign airlines to facilitate easier foreign travel ticketing for travelers and create a competitive advantage for the airlines. ➢ Supply chain cooperation - suppliers have preferred relationships with others in the supply chain to facilitate smooth flow of supplies. ➢ Co-opetition - competitors share information or technology with the intent of creating a larger market for both ➢ IBM and Red Hat cooperate on some aspects of Linux development

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E-business strategies focus on using the Internet for business transactions

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✓ Table 7.1 on page 142 summarizes the types of web-based business models ✓ E-business strategy uses the internet to gain competitive advantage ➢ B2B – business to business; uses web portals and IT to link organizations vertically in supply chains ➢ B2C – business to customers; uses web portals and IT to link organizations with customers 7.1 Questions for discussion Suggested Answers 1) It is much more difficult to sustain an advantage today, with the speed of change and technology. However, companies can create a sustainable culture than allows a sustainable advantage through ongoing commitments to innovation and continuous improvement. Examples are Apple, 3M, Proctor and Gamble, Toyota, and many other companies.

2) Growth is popular because so many owners and investors desire growth in their returns on capital. Additionally, American culture in particular is growth-oriented compared to other cultures.

3) Usually restructuring plans are treated as “good news” for investors. The reason for this is that such plans are usually developed when a company is experiencing financial difficulties or sales are slowing, etc. The restructuring plan sends a signal to the market and investors that management is addressing issues and has a plan in place for improving results.

12.2 How are strategies formulated and implemented?

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The strategic management process formulates and implements strategies ✓ Strategic management is the process of formulating and implementing strategies to accomplish long-term goals and sustain competitive advantage ✓ See Figure 7.1 for a depiction of the steps in the strategic management process ✓ Strategy formulation is the process of creating strategies ✓ Strategy implementation is the process of putting strategies into action

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Strategy formulation begins with the organization's mission and objectives ✓ Mission is the organization’s reason for existence or purpose ✓ Operating objectives are specific short-term results that organizations try to achieve ➢ See inset on page 174 for common objectives (such as profitability, market share, etc.)

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SWOT analysis identifies strengths, weaknesses, opportunities, and threats ✓ SWOT analysis is a tool used in strategic planning to determine the current status of the organization ➢ Internal assessment of the organizational strengths and weaknesses ➢ External assessment of environmental opportunities and threats ✓ See Figure 12.2 for a depiction of SWOT analysis

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✓ Core competency is a special strength that gives and organization a competitive advantage •

Porter’s five forces model examines industry attractiveness ✓ Figure 7.3 on page 146 illustrates the five forces model which include competitors, new entrants, suppliers, customers and substitutes ✓ Unattractive industry – intense rivalry, easy entry, substitute products, powerful suppliers and customers ✓ Attractive industry – low rivalry, barriers to entry, few or no substitute products, weak supplier and customer power

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Porter’s competitive strategies model examines business or product strategies ✓ A differentiation strategy seeks competitive advantage seeks competitive advantage through uniqueness ✓ A cost leadership strategy seeks competitive advantage through operating with lower costs than competitors ✓ A focused differentiation strategy seeks competitive advantage through concentration on one special market segment and offering a unique product to that segment’s customers ✓ A focused cost leadership strategy seeks competitive advantage through concentration on one special market segment and being the low cost provider to that market segment’s customers ✓ See Figure 7.4 for a depiction of these in the soft drink industry

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Portfolio planning examines strategies across multiple businesses or products ✓ Useful for companies that operates a variety of businesses (portfolio) ✓ BCG matrix analysis is a planning tool for such companies ✓ See Figure 7.5 for a depiction of the BCG matrix approach ➢ Stars - high market share in high growth markets ➢ Cash cows - high market share in low growth markets ➢ Question marks - low market share in high growth markets ➢ Dogs - low market share in low growth markets

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Strategic leadership ensures strategy implementation and control ✓ Requires good organization structures and cultures, and the right staffing ✓ Strategic leadership - the capability to inspire people to successfully engage in a process of continuous change, performance enhancement, and implementation of organizational strategies ✓ Strategic control - responsibility of top managers to keep in touch with strategy, how well it is being implemented and if it needs to be changed to be more effective in accomplishing the mission ✓ A strategic leader has to: ➢ Be a guardian of trade-offs ➢ Create a sense of urgency ➢ Make sure that everyone understands the strategy ➢ Be a teacher

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➢ Be a great communicator 7.2 Questions for discussion Suggested Answers 1) Yes, a strategy answers the question “how” we will succeed; the mission says “what” the purpose of the organization is. If a company has a poorly written mission statement that allows for a “jack of all trades” business definition, the company may attempt to become a conglomerate and fail, or perform with mediocrity, even though the strategies in each separate business/ market may be sound. On the other hand, a company may see its mission as very narrowly defined and miss out on opportunities for growth or adaptation.

2) Monopolies would be very close and may receive a perfect score. The only area where this may be less than perfect is the power of suppliers. Even a monopoly must rely on suppliers. Unless the monopoly happens to also be the sole customer for the supplier’s products (unlikely for most resources), then that aspect would make the “score” less than perfect.

3) Yes, the BCG matrix oversimplifies strategic positions and strategic planning. It offers a “formula” approach and may lead to abandoning a business that may yield very high returns if management attention is focused on the business in question. Very few companies use the BCG matrix; it was popular in the 1970’s when conglomerates were in vogue.

Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed The News Feed feature for this Module is entitled Clean Energy Strategy Hurt by Financial Crisis (page 141).

Ask students to complete the “Reflect and React” exercise following the News Feed. This exercise will work well as a take-home assignment or for distance learning.

Additional questions for the class to consider and discuss: •

What companies might be a good fit for a strategic alliance with Think Global?

•

Compile a SWOT analysis for Think Global.

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Which of Porter's competitive strategies seems to apply best to Think Global and the other electric car manufacturers mentioned?

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How would the BCG matrix apply to the electric car manufacturers?

Trendsetters In the Trendsetters feature on page 139, "Roger W. Ferguson Jr. Ready for Strategic Leadership at TIAA-CREF," Ferguson is profiled as a CEO with a strong background in finance and economics who also has the ear of President Obama. TIAA-CREF is a financial services organization that does retirement planning for employees in education and medicine among other career fields. Suggested questions for further discussion: •

If you were to prepare a SWOT analysis of TIAA- CREF, how would the background of CEO Ferguson fit and why?

•

How does promoting diversity apply to the mission statement of a financial services company?

Stay Tuned The Stay Tuned feature in Module 7 on page 150 provides information about ways companies have cut costs during the recession. These questions may be used in class or online for discussion in addition to the questions listed in the "Your Thoughts?” section: •

How have cuts affected your employment or education?

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Were those cuts necessary? What alternatives can you suggest?

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What do the examples of cost-cutting in the feature indicate about the strategy of an organization?

Self Assessment The assessment for this module is entitled “Facts and inferences” (Page 153). The assessment tool is intended to help students assess their ability to distinguish facts from inferences, an important trait for a manager participating in the planning process.

For extended learning, students may discuss how perception of facts and inferences influence strategic management. For example, what role does personal perception of facts influence the establishment of mission or a SWOT analysis?

Case Snapshot The case for this Module is "Dunkin Donuts: Betting Dollars on Donuts."

1. What does a Porter’s Five Forces analysis reveal about the industry in which Dunkin’ Donuts and Starbuck’s compete, and what are its strategic implications for Dunkin’ Donuts?

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Porter's Five Forces model analyzes factors that influence a specific industry to help managers understand the industry in which they compete. An analysis of the factors would seem to indicate that the industry is very competitive and competitive advantages can be very quickly copied. The Five Factors as they apply to Dunkin’ Donuts and Starbucks would include: • New entrants - Dunkin’ and Starbucks sell breakfast beverages and pastries and are branching out to other breakfast foods. Competition would include expansion of similar regional companies like Caribou Coffee or companies like McDonald’s who extend their beverage offerings to include premium coffees.

• Customers - the bargaining power of buyers is very influential to the industry. The current recession has resulted in the closing of hundreds of Starbucks locations, while relatively few of the franchised Dunkin’ Donuts have closed.

• Substitute products - the large number of substitute beverages and breakfast alternatives makes this a huge factor in the industry.

• Suppliers - occasionally the supply of coffee beans is limited, driving up the cost of the beverage. This often makes the substitute products such as home-brewed coffee and more attractively priced fast food coffee and pastries a strong competitive force.

• Industry competition - Starbucks and other regional coffee shops; convenience stores like 7-Eleven and Circle K; and fast food restaurants like McDonald’s and Burger King.

2. In what ways is Dunkin’ Donuts presently using strategic alliances, and how could cooperative strategies further assist with its master plan for growth?

Strategic alliances exist when two or more companies join forces to pursue an area of mutual interest or to gain competitive advantage. Examples in the case include Dunkin’ pairing with Wal-Mart, Stop & Shop and Great Wolf Lodge plus a variety of other cooperative alternatives such as convention registration areas, gift shops and general stores. Can college student centers be far behind?

These cooperative strategies increase brand recognition as they increase sales. Families that enjoy Dunkin’ Donuts products while on a vacation stay at Great Wolf Lodge will be very receptive to expansion of the brand to their hometown.

Co-opetition describes an alliance of competitors for mutual benefit. If Starbucks or McDonald's were to join forces with Dunkin to research lower fat and healthier ingredient alternatives, there would likely be a larger market for all to share.

3. Which of the globalization strategies will work best in Dunkin’ Donuts’ global expansion and why?

International growth strategies include globalization that advertises and sells a standard product worldwide, multidomestic strategies that customize products and advertising to fit local cultures, and transnational strategies that utilize worldwide resources and try to operate without a strong national identity. International tastes vary widely, so that rules out a straight global strategy. Dunkin would most likely choose a multidomestic strategy that customizes products and advertising to local markets, much like McDonald’s.

4. FURTHER RESEARCH—Gather information on industry trends, as well as current developments with Dunkin’ Donuts and its competitors. Use this information to build an up-

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to-date SWOT analysis for Dunkin’ Donuts. If you were the CEO of the firm, what would you consider to be the strategic management implications of this analysis, and why?

Suggested Team Exercise for Module 7 Break the class into pairs or small (no more than four students) teams.

Assign each team an industry (pick industries that students can relate to such as chocolate candy; automobiles; clothing; shoes; fast food; beer; cell phones; computers, etc.)

Have each pair or team identify (and explain if needed): The company or product using a cost leadership strategy (example Chery from China) The company or product using a differentiation strategy (example Scion) The company or product using a focused cost leadership strategy (example Focus) The company or product using a focused differentiation strategy (example Porsche)

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MODULE 8 Organization Structures It’s all about working together Module Objectives Module Eight defines organizations and their importance in effective management of any organization or company. The module reviews both informal and formal structures. Functional, divisional, matrix, team and network structures are explained and applied. Current trends in organizational design such as flatter organizations with more decentralization and delegation are introduced.

The objectives of Module 8 may be summarized as: 1. To define and explain organizational structure 2. To distinguish between formal and informal structures 3. To identify functional, divisional, matrix, team and network structures and explain when each is most appropriate to an organization.

4. To identify trends in organizational design and explain their influence on the organization.

Module Outline 8.1 What is organizing as a managerial responsibility?

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Organizing is one of the management functions ✓ Organizing arranges people and resources to work toward a goal

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Organization charts describe the formal structures of organizations ✓ Organization structure is a formal arrangement that links the various parts of an organization to another ✓ Organization chart is a diagram of positions and reporting relationships within an organization ➢ Division of labor - people and groups performing different jobs, ideally ones for which they are skilled ➢ Formal structure - the “official” structure, the way things are supposed to operate ➢ See Table 8.1 on page 159 for a full listing of what can be learned from an organization chart

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Organizations also operate with important informal structures ✓ Informal structure - a “shadow” organization made up of unofficial but often critical working relationships between members.

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Informal structures have good points and bad points ✓ Social network analysis identifies the informal structure by discovering who employees communicate with and ask for help.

8.1 Questions for discussion suggested answers 1) Organization is important because typically it enhances the opportunity for both efficiency and effectiveness in organizations. Organizing usually results in the most efficient use of financial and human resources.

2) Even imperfect organization charts provide some sense of direction, responsibilities, and accountabilities. An analogy can be made to taking a trip without a map or a compass.

3) It’s difficult to tell, since as a practical matter, every organization is going to have informal structure. Informal structures can provide enhanced communication and ideas and working relationships between sub-groups in organizations.

8.2 What are the most common types of organization structures?

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Functional structures group together people using similar skills ✓ Departmentalization – division of labor whose parts are well coordinated ✓ See Figure 8.4 for a depiction of typical functional structures ✓ A functional structure groups people together into formal work units based on their similar skills and performing similar tasks. Example: Marketing, Finance, Production and Human Resources. ✓ Work well in smaller organizations and stable organizations ✓ Sharing of expertise within departments ✓ Functional chimneys (or functional silos) – when performance suffers due to a lack of communication, coordination, and problem solving across functions ✓ See inset on page 164 for the advantages of functional structures

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Divisional structures group together people by products, customers, or locations ✓ See inset on page 165 for advantages of divisional structures ✓ A divisional structure groups people together into formal work units based on their working on the same product, in the same area, or with similar customers. Figure 8.6 on page 165 illustrates the concept. ➢ Product - groups jobs and activities devoted to a single product or service ➢ Geographical - groups jobs and activities in the same location or region ➢ Customer - groups jobs and activities that serve the same customers or clients ➢ Process - groups jobs and activities devoted to the same process

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Matrix structures combine the functional and divisional structures ✓ Sets up permanent teams that operate across functions to support specific products, projects, or programs

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✓ Workers belong to at least two formal groups (a functional and a project group) and have two bosses ✓ See Figure 8.7 on page 166 for a depiction of a matrix structure ✓ Cross functional teams are teams whose members come together from different functional departments, to work on a common task. ✓ See inset on page 167 for advantages of Matrix structures •

Team structures use many permanent and temporary teams ✓ Team structures use permanent and temporary cross-functional teams to improve lateral relations and solve problems, projects, and for day-to-day tasks ✓ See Figure 8.8 on page 167 for a depiction of a team structure ✓ See inset on page 168 for advantages of team structures

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Network structures extensively use strategic alliances and outsourcing ✓ A network structure links a central core with “networks” of relationships with outside contractors and partners that supply essential services ✓ May lower costs, increase speed, and offers flexibility ✓ A strategic alliance – cooperation with other firms to pursue business activities of mutual interest ➢ Outsourcing alliances – contract to purchase important services from another organization ➢ Supplier alliances – link businesses in preferred supplier-customer relationships that guarantee a smooth and timely flow of quality supplies among the partners ✓ See Figure 8.9 on page 168 for a depiction of a network structure ✓ A virtual organization – uses information technologies to operate a constantly shifting network of alliances

8.2 Questions for discussion suggested answers 1) Despite their disadvantages, most companies use functional organizations because they offer opportunities for career development; mentoring; resource leveraging within the function; and improved communication within the function.

2) Matrix organizations are ideal for law firms, consulting firms, accounting firms, landscaping and construction companies, or other project-based organizations where skills can be leveraged over multiple projects.

3) Group decision making can hurt teams if : 1) the dominant members are incompetent, uncooperative or simply unwilling to work hard; 2) the team lacks technical expertise required to perform the tasks; the expert or competent team members are passive and do not fully participate or offer suggestions. Teams often suffer from “the lowest common denominator” syndrome, where the “weakest link” becomes the norm.

8.3 What are the trends in organizational design?

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Organizations are becoming flatter with fewer levels of management ✓ Organizational design is the process of aligning the structure of the organization to best accomplish the organizational mission and respond to the challenges of the external environment. ✓ Span of control is the number of people reporting to an individual manager. ➢ Narrow - managers supervise a small number of people ➢ Wide - managers supervise a larger number of people ➢ Flatter organizational structures mean span of control is wider ➢ Inset on page 172 illustrates the concept

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Organizations are increasing decentralization ✓ Centralization - top management keeps strong control over decision-making ✓ Decentralization - top management allows decision-making responsibility to be distributed throughout the organization to those who are best qualified. ✓ Information technology makes it easier for top management to decentralize much decision-making responsibility yet stay informed about day-to-day performance results.

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Organization are increasing delegation and empowerment ✓ Delegation is the process of entrusting work to others by giving them the right to make decisions and take action; involves deciding what work you should do yourself and what work you should allow others to accomplish ➢ Authority should match responsibility ➢ Inset on page 172 explains the three steps in delegation ✓ Empowerment is the process of giving people the freedom to contribute ideas, make decisions, show initiative, and to do their jobs in the best possible ways

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Organizations are becoming more horizontal and adaptive ✓ A bureaucracy emphasizes formal authority, rules, order, fairness, and efficiency ✓ Mechanistic designs are bureaucratic, using a centralized and vertical structure ✓ Organic designs are adaptable using a decentralized and horizontal structure ✓ Based on work of Burns and Stalker ✓ Figure 8.10 on page 173 depicts these two approaches ✓ Learning activity - students may list 3-4 organizations with which they are familiar, including their employer, employers of friends and family or your college. Evaluate the organizations on the aspects of mechanistic or organic designs. They may do this individually, then in teams or a large group discussion.

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Organizations are using more alternative work schedules ✓ Compressed workweek - full time work is completed in less than five days. For example, a 4-10 work week means that employees work four 10 hours days and have an extra day off each week. Other compressed schedules are spread over two weeks. ✓ Flexible working hours or flextime offer employees a choice of starting and ending times each day, while still working an entire work day. ✓ Job sharing - splits a job between two or more people who divide the responsibilities and schedule

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✓ Telecommuting - using technology like the internet and videoconferencing to work outside the office 8.3 Questions for discussion suggested answers 1) Two trends are unlikely to persist, at least at the rate we have seen recently: Organizations are unlikely to become much flatter. The recession has most likely required organizations to cut as much as possible. Most companies which had bloated levels of management have already been forced to reduce levels of management significantly. Newer organizations are now being designed with lean organizations.

Organizations are increasing delegation and empowerment. The reductions in staff and levels of management have been enormous, as noted above. Much of the “shifting” of decisions and responsibilities that had previously been performed by upper levels of management has already been redistributed. The opportunities for added delegation and empowerment are not significant; a case can be made that too much delegation could tax lower level managers and teams to the detriment of a loss in the controls of an organization.

2) This answer will vary by student. Probe their responses to make them identify aspects of their personality that makes their choice of organizational design a good fit. The self assessment "Organizational Design Preference" on page 178 may be used before the activity or after the discussion. Students should report if their scores differed from their expressed preference.

3) Alternative work schedules lead to greater job satisfaction and often increase productivity. Employees are able to achieve work-life balance. Turnover is reduced and recruiting top talent is easier.

Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed The News Feed feature for this Module is entitled “Job Fears the Talk of the Informal Structure” (Page 161).

Ask students to complete the “Reflect and React” exercise following the News Feed. This exercise will work well as a take-home assignment or discussions for online classes.

How can management gain access to employee rumors and gossip and help reduce the anxiety and associated productivity problems that they create?

Which would be more susceptible to rumors, mechanistic or organic designs?

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Trendsetters The Trendsetters feature for Module 8 explains how Alan Mulally went from being an executive at Boeing to the CEO at Ford Motor Company. Mulally is credited with re-structuring Ford prior to the recession and putting it in a position to weather the economy better than most other automakers.

Suggested questions for further discussion: •

Explain the changes Mulally made at Ford that seem to be most responsible for Ford's movement from a bureaucratic organization with mechanistic design to one with a more adaptive organization with organic design.

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Which type of organizational structure seems to be most appropriate for a car manufacturer?

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Why do you think Ford choose to adopt a more centralized approach to decision-making for global operations when the current trend is toward more decentralized decisionmaking?

Stay Tuned The Stay Tuned inset in Module 8 on page 174 provides information on job losses in the early months of the recession that began in late 2008. These questions may be used in class or online discussions in addition to the questions listed in the "Your Thoughts" section: •

How have the statistics on monthly job loss changed since the chart that ends in February of 2009? Which industries seem to be most impacted?

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Go to the Bureau of Labor Statistics website to determine which industries seem to have stable employment or are showing recovery. Does this influence your choice of career or employer?

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Research the use of alternative work schedules during the recent recession. How have employers used creative scheduling to avoid layoffs or postpone hiring?

Self Assessment The assessment for this module is entitled “Organizational Design Preference” (Page 178). The assessment tool is intended to help students determine whether they would prefer to work in an organization that is mechanistic or organic in design Students may refer to Figure 8.10 on page 173 and evaluate several potential employers to determine if they seem to fit the student's organizational design preference.

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Case Snapshot The case for this Module is "Nike - Spreading Out to Stay Together" 1. When Nike CEO Phil Knight stepped down and handed his job to Bill Perez, he stayed on as chairman of the board. In what ways could Knight’s continued presence on the board have created an informal structure that prevented Perez from achieving full and complete leadership of Nike?

Informal structures are the shadow organization that represents the actual working and communication relationships that may not resemble the formal organizational chart.

When Knight remained on the board, old communication relationships may have survived his departure from the CEO position, cutting Perez off from valuable information. Knight's access to the informal communication network may have worked to spread rumors to Knight and back down the communication chain. These rumors may have contained inaccurate information, caused resistance to change and distract members from their work (p. 161). This may have reinforced Perez's position as an outsider.

2. How can Nike utilize both traditional and newer organization structures to support the firm’s heavy strategic commitment to outsourcing?

The case doesn't give any concrete indication of Nike's current structure, but students will probably surmise that some aspects of a network structure (p. 168) exists due to the heavy dependence on outsourcing.

3. Given the problems Nike has had with sweatshop labor being used by some of its foreign contractors, are there subsystems of the firm that need to be run with a mechanistic rather than organic design? Give examples to support your answer.

Mechanistic designs are highly centralized and bureaucratic with an emphasis on command and control. This might persuade some students that mechanistic designs are appropriate for manufacturing in foreign countries. Organic designs are adaptive, decentralized and tend to respond to change more quickly. This would probably be a good fit for an organization that has far flung operations in different countries with different cultures that try to respond to rapidly changing technology, fashion, customer demands and economic conditions. Decentralized control present in an organization that uses organic designs is still control. Organization members in an organic/adaptive company that are responsible for monitoring foreign contractors and labor conditions may be just as committed to control standards as members of a mechanistic/bureaucratic company.

4. FURTHER RESEARCH—Gather information on Nike’s recent moves and accomplishments, and those of its rival, Adidas. Are both firms following the same strategies and using the same structures to support them? Or, is one doing something quite different from the other? Based on what you learn, what do you predict for the future? Will Nike stay on top, or is Adidas the next industry leader?

Suggested Team Exercise for Module 8 This exercise will only work in classrooms in the same physical setting (not distance learning).

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Break the class into teams of five.

Supply each team with • one stapler (with ample supply of staples) • one small “post it” type note pad • a red pen • a supply of paper clips.

Tell the class that each team is a “company.” Their product is a “FoleyO.” The “FoleyO” manufacturing process is as follows: Note: The instructor or Professor should have one example or “prototype” to show each team as an example of the completed “product”. This will also be provided to a class “inspector” (one for the entire class who will not be on any team but will get equal credit, if any given, for this exercise) as a template for “quality control.” Products that match the “prototype” will count as “good” production or “finished products.” All other will count as “rejects” or “scrap” production.

1) Pull one sheet off the “post it” pad 2) Fold the sheet exactly in half 3) Staple the folded sides together by putting a staple at the very middle and top of the folded page-the staple must be horizontal or parallel to the paper 4) One student per team is the “signer” who looks at the product which has gone through steps 1-3 above and must sign his or her initials legibly as a type of “logo.”

5) Paper clips should be used for each set of 10 pages that have gone through steps 1-4 above.

The instructor should tell the teams to meet and decide how they will organize their production.

They may shuffle chairs etc. or face each other as they wish. (Note: students may decide to “combine” steps-one student may do two tasks, but do not offer this suggestion unless someone asks the question. This is effectively comparable to downsizing for efficiencies, etc.)

Allow 15 minutes from the “start” time and call off the last minute by 15 second increments.

When time has expired, each team should take their finished production to the inspector. The instructor should count each piece of abandoned paper by each team as a scrap product. These should be added to those rejected by the inspector as not meeting quality standards. a) Count the accepted (approved by the inspector) products b) Count the rejected products from above c) Multiply the Number of rejected products by 2 as a penalty for low quality production d) Subtract the total in “c’ from the total in “a” This is the net “good” production e) Rank the teams You may wish to make this game more realistic by adding incentives (similar to piecework) for the top or winning team (maybe an added 5 points each on a future test or exam). This creates a high level of class energy and interest.

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Then, the teams should assess what went “right” and “wrong” on their teams. Did they match skills to jobs? Did they combine jobs? Did they change physical arrangements? Was speed (efficiency) more important than quality (effectiveness)?

Finally, a combined class discussion will reinforce the values of organization (as well as planning).

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MODULE 9 Organizational Culture, Innovation, and Change Adaptability and Values Set the Tone Module Objectives Module Nine reviews culture, innovation and change in organizations, and how managers can lead change processes. This module also explores the characteristics of creative organizations, and the ways in which change can occur. The stages of the change process are outlined. Finally the role of mangers and organization development in establishing the climate and leading change processes is investigated.

The objectives of Module 9 may be summarized as: 1.

2.

3.

4.

5.

6.

7.

8.

9.

To define and explain organizational culture To review the importance of customer-driven and performance-oriented culture To differentiate and to explore observable and core cultures To review creativity and innovation as sources of competitive advantage To explore the types of change and the change processes in organizations To review what characteristics creative organizations have in common To examine common pitfalls of negotiation To review management strategies for change and the role of change leaders To outline organization development as a way of building capacities for change

Module Outline 9.1 What is the nature of organizational culture?

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Organizational culture is the personality of the organization ✓ Organizational culture is the system of shared beliefs and values that develops within an organization and guides the behavior of its members

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Great organizational cultures are customer-driven and performance oriented ✓ Strong cultures - cultures which are clear, well-defined, and widely shared among members

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The observable culture is what you see and hear as an employee or customer ✓ Includes how people dress at work, arrange their offices, speak to and behave toward one another, and talk about and treat their customers ✓ Found in stories, heroes, rituals, and symbols ✓ See Figure 9.1 on page 184 for a depiction of the main components of organizational culture

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Learning Activity - ask students to individually indentify the elements of observable culture (stories, heroes, rituals, and symbols) of an organization they are familiar with such as an employer or your college. Ask them to share their thoughts in a small group and have the small groups report to the class.

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The core culture is the underlying values of the organization ✓ Core culture is the second and deeper level of organizational culture ✓ Core values - underlying assumptions and beliefs that shape and guide people’s behaviors

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Values based management is managing with a commitment to actively develop, communicate, and represent shared values within an organization ✓ Values based management can be evaluated by core values ➢ Relevance - core values support key objectives ➢ Integrity - core values provide ethical values ➢ Pervasiveness - core values are understood by all members on all levels ➢ Strength - core values are accepted by all members ✓ Workplace spirituality are practices that create meaning and community ➢ Spirituality does not necessarily include religion ➢ Common elements are meaningful work, respect for diversity, work-life balance, ethical behavior ➢ Symbolic leaders communicate culture and values through symbolic language and behavior. Common examples are Mary Kay Ash and Herb Kelleher.

9.1 Questions for discussion suggested answers 1) Companies with strong cultures are much more likely to outperform companies without that advantage, whether organizational design is strong or weak. Culture affects processes, motivation and execution in a direct fashion. A weak culture will adversely impact performance.

2) Bank employees dress somewhat formally - often wearing suits or blazers, have shorter and no facial hair, less stylish or “avant garde” dress, behave more rigidly, and are unlikely to make decisions that are not “their job.”

3) I would select the following core values: customer above all; employee freedom to fail, but with accountability for results; an ethical culture; number one or two in market share; pride in developing future managers; and continuous process improvement; strong work ethic combined with a strong play ethic; sense of humor and a positive attitude.

9.2 How do organizations support and achieve innovation?

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Organizations pursue process, product and business model innovations ✓ Innovation is the process of taking a new idea and putting it into practice ✓ Process innovations result in an improved process such as faster processing of online product purchases or banking transactions

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✓ Product innovations result in new or improved goods or services such as the Amazon Kindle or Barnes and Noble Nook readers, or textbook rentals. ✓ Business model innovations result in new ways to expand existing businesses such as the University of Phoenix developing a completely online college, or your college developing an online degree program.

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Green innovations pursue and support the goals of sustainability ✓ Green innovation is the process of turning ideas into innovations or business models that are earth-friendly or reduce the organization's carbon footprint. ✓ Examples include wind and solar farms, recycling, carbon offsets, developing products that use little or no energy from fossil fuels.

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Social business innovations seek solutions to important societal problems ✓ Social entrepreneurship seeks new and unique ways to solve the world's social problems. ✓ Examples include the Grameen Bank making micro loans in Bangladesh; One Acre Fund lending money for helping farmers in Kenya; One Laptop Per Child distributing computers where little or no education is available; or Heifer International providing livestock to families around the world.

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Learning Activity - Challenge students to develop projects that would benefit a social entrepreneurship organization of their choice such as purchasing a $100 laptop for One Laptop Per Child, making a micro loan or purchasing livestock through Heifer International.

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Commercializing innovation puts new ideas into use ✓ Figure 9.2 on page 190 illustrates the steps in the commercializing innovation process. ✓ Commercializing innovation turns ideas into products, services or processes that the organization can use to produce profits.

▪ Idea creation ▪ Initial experimentation ▪ Feasibility determination ▪ Final application ✓ Wheel of innovation is the full set of responsibilities for commercializing innovation. The steps include: ▪ Imagining ▪ Designing ▪ Experimenting ▪ Assessing ▪ Scaling

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Innovative organizations share many common characteristics ✓ Innovative organizations incorporate innovation into the core values and culture of the organization. Common characteristics include: ▪ Strategy supports innovation

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▪ Culture values innovation ▪ Structure supports innovation ▪ Management supports innovation ▪ Staffing supports innovation ✓ Figure 9.3 on page 192 illustrates the concept. ✓ Skunkworks is a term for special units whose goal is innovation and operate outside the normal structure.

9.2 Questions for discussion suggested answers 1) A traditional view of business social responsibility is that the organization's mission is to create a return for the owners or investors. If social responsibility is not one of the core values of the organization or part of its mission, investors might become upset. Many organizations have social responsibility as a core value and would value green innovation as an important way to create sustainability and competitive advantage.

2) Many factors might reduce support for innovation. Management may not support new ideas; management may slow the process allowing competitors to reach the market faster; there may be a lack of focus on customer needs; a culture that does not value innovation; a structure that makes innovation difficult; or a lack of visionary staff.

3) Organizational leaders play a huge role. Leaders set the culture and core values that would support innovation. Top managers must tolerate criticism and differences in opinion, eliminate barriers to innovation and willingness to fail.

9.3 How do managers lead the processes of organizational change?

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Organizations pursue both transformational and incremental changes ✓ Change leaders take leadership responsibility for changing the existing pattern of behavior. ✓ Figure 9.4 on page 195 illustrates the differences between change leaders and status quo leaders. ✓ Transformational change results in a major and comprehensive redirection of the organization ✓ Incremental change tweaks and nudges existing systems and practices to better align them

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Unfreezing, changing, and refreezing are three phases of planned change ✓ Kurt Lewin described planned change as a process with three phases ▪ Unfreezing - preparing a system for change ▪ Changing - making actual changes in the system ▪ Refreezing - stabilizing the system after change ✓ See Figure 9.5 on page 197 which depicts the change leader’s responsibility in the three phases

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Managers use force-coercion, rational persuasion, and power change strategies

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✓ See Figure 9.6 on page 198 for a depiction of three common change strategies ▪ Force-Coercion uses the primary power bases of legitimacy, rewards, and punishments as the primary inducements to change; most useful as a unfreezing strategy o Direct forcing - direct and unilateral command that change takes place o Political maneuvering - works indirectly to gain special advantage over other person in making the change ▪ Rational persuasion - bring about change through persuasion backed by special knowledge, information, facts, and rational argument ▪ Shared power - encourages people in a collaborative process of identifying values, assumptions, and goals from which support for change will naturally emerge •

Change leaders identify and deal positively with resistance to change ✓ See Table 9.1 on page 200 for a summary of why people may resist change ✓ Positive resistance tactics: ▪ Education and communication ▪ Participation and involvement ▪ Facilitation and support ▪ Negotiation and agreement ✓ Negative resistance tactics: ▪ Manipulation and cooptation ▪ Explicit and implicit coercion

9.3 Questions for discussion suggested answers 1) Not all changes are radical enough to be considered transformational. Incremental change faces mangers on a daily basis as changes are required in existing practices, procedures and policies.

2) It may not be possible to “refreeze” change in a rapidly-changing environment. Lewin's three phase change process assumes a stable external environment. Few organizations enjoy the luxury of a predictable environment, particularly in challenging economic times such as a recession. Change in many organizations is indeed an ongoing daily part of the culture. Examples would be companies such as GE, Apple, Google, E-Bay, etc.

3) No, force-coercion may be needed in situations where the very survival of the company is at stake (GM) or if all other efforts have failed to convince a firmly entrenched opposition to a new process or policy.

Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed

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The News Feed feature for this Module is entitled “Google and Procter & Gamble Swap Workers to Fuel Innovation" (Page 191).

Ask students to complete the “Reflect and React” exercise following the News Feed. This exercise will work well as a take-home assignment or for distance learning.

In a classroom discussion, ask students • •

Which step of the "wheel of innovation" process might be most stimulated by a job swap?

What would be important characteristics of an organization that would be accepting of the job swap idea?

Trendsetters In the trendsetters feature on page 199, "Tom Szaky Takes Idea from Dorm Room to Wal-Mart", entrepreneur Tom Szaky explains the process he went through to establish his firm "TerraCycle".

His experience is a good starter for discussions on innovation and culture. Suggested questions for further discussion: •

How would the elements of observable culture apply to TerraCycle?

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How would the core culture and values of TerraCycle be explained?

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What is the most important characteristic of TerraCycle as an innovative organization?

Self Assessment The assessment for this module is entitled "Tolerance for Ambiguity" (Page 203). The assessment tool is intended to help students assess their ability to accept ambiguity or uncertainty.

After determining their scores, you may ask students how innovative they are likely to be as a manager and what type of organizational culture would be a good fit for them.

Case Snapshot The case for this Module is "Apple Inc. - People and Design Create the Future".

1) Apple sells stylish and functional computers as well as a variety of electronic devices, and it operates retail stores. Which type of organization structure would best help Apple keep its creative edge, and why?

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The question is a good way to tie in Module 8 on structure. When used to review Module 8, students will probably find that matrix or team structures are used in many innovative organizations.

An alternative or additional question could be used such as: Identify the elements of observable culture as they apply to Apple Inc. This may require a visit to a nearby Apple Store or some online research.

2) Should Apple’s board of directors be expecting the CEO to push transformational change or incremental change, or both, at this point in time? Why? Both have their place. Apple has transformational change as a core value and is a good example of an organization that welcomes change and views it as an opportunity. Incremental change may be used in areas such as software where improvements to existing products must be made, but when customers are familiar and happy with a type of software product such as productivity software or an operating system, incremental change would keep it cutting edge, yet familiar.

3) How could organization development be used to help the teams involved with iPhone development make sure that they are always working together in the best ways as they pursue the next generations of iPhones and innovative product extensions?

Although Apple is already known for innovation, organizational development that works with teams to further improve communication, and creative thinking couldn't hurt. Managers could also use some OD to remind them how to foster a culture of creativity and innovation.

4) FURTHER RESEARCH—Review what the analysts are presently saying about Apple.

Make a list of all the praises and criticisms, organize them by themes, and then put them in the priority order you would tackle if taking over from Steve Jobs as Apple’s new CEO. In what ways can the praises and criticisms be used to create a leadership agenda for positive change?

Suggested Team Exercise for Module 9 Break the class into teams and have the teams perform the following discussion task.

Identify a sports team at the college or professional level that exemplifies strong culture. Identify the key elements (symbols, heroes, stories, and rituals) of the observable culture of the team that you select.

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MODULE 10 Human Resource Management Nurturing turns potential into performance Module Objectives Module Ten reviews Human Resource Management and its importance within the context of an organization. The primary responsibilities of the human resource function are detailed including recruiting, selection, socialization, training and career planning and development.

The objectives of Module 10 may be summarized as: 1. To define human resource management 2. To review the impact of the legal environment on the employment and human resource management process 3. To review recruitment and selection, and socialization and orientation 4. To define performance appraisal and explain varying methods 5. To define training 6. To review performance management techniques 7. To review career development strategies 8. Identify current issues and concerns in human resource management 9. Differentiate between different types of compensation plans 10. Explain the legal environment of employee relations and collective bargaining

Module Outline 10.1 What is the purpose and legal context of human resource management?

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Human resource management attracts, develops, and maintains a talented workforce ✓ Human Resource Management (HRM) ensures that an organization is always staffed with the best people available so that it gets important jobs done in the best possible ways. Three major responsibilities of HRM include: 1. Attracting a quality workforce 2. Developing a quality workforce 3. Maintaining a quality workforce Strategic human resource management aligns human capital with organizational strategies. ✓ Human capital is the value of workers that have skills, knowledge, innovation, creativity, energy and commitment to offer to the organization. ✓ Strategic human resource management aligns people and their jobs in the most effective way to achieve the organization's strategic plan, purpose and mission.

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Government legislation protects workers against employment discrimination ✓ Job discrimination - occurs when an organization denies employment or a job assignment or an advancement opportunity for reasons that are not performance relevant. ✓ See Table 10.1 for a summary of laws designed to protect workers from job discrimination ✓ Equal employment opportunity (EEO) – the right to employment without regard to sex, race, color, national origin, or ➢ Title VII of the Civil Rights Act of 1964, amended by the Equal Employment opportunity Act of 1972 and the Civil Rights Act (EEOA) of 1991 protect these rights ➢ Intent is that employment should be based only on ability and job performance ➢ Generally applies to organizations that employ 15 or more people ✓ Affirmative action – is an effort to give employment preference to women and minority group members ➢ Affirmative action plans - designed to ensure that an organization’s workforce represents women and minorities in proportion to their labor market availability ➢ Reverse discrimination - claims of discrimination by majority populations ➢ Bona fide occupational qualifications - criteria for employment that an organization can clearly demonstrate as relating to a person’s capacity to perform a job

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Employee rights and other issues influence the legal environment of work ✓ Comparable worth - holds that person performing jobs of similar importance should receive comparable pay ✓ Pregnancy discrimination - complaints seem to be on the increase ✓ Workplace privacy - the right of individuals to privacy on the job, becoming complicated by technology ✓ Independent contractor - worker who works “as needed” for an agreed-upon time for an agreed upon task without becoming part of the permanent workforce ➢ Permatemps – regularly employed person but denied access to standard health care, pension, and other fringe benefits

10.1 Questions for discussion suggested answers 1) Globalization will likely require that Human Resources: • Be at least bi-lingual with departmental language skills mirroring those of the countries of employment • Put a higher reliance on local interviewing and internet testing and screening • Develop a higher need for technology skills among human resource professionals • Maintain awareness and understanding of cultural differences between countries • Be able to understand employment laws and employee protections in other countries 2) There are many laws that protect Americans. It would seem that enforcement and compliance will be the emphasis now.

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3) Hiring of illegal workers is a major concern; many jobs are being lost to individuals who have broken the law and come into the U.S. across borders. It is clear and well-known that many employers are “winking” at the laws. Students and Americans who would be able to work in those jobs do not have the opportunity because enforcement is so low, and employers continue the practice because such workers will work for much lower wages and with no or few benefits. Virtually every poll shows that a significant majority of Americans want the laws enforced that already exist, including large penalties and even imprisonment for those who flaunt the law. Some estimates are that as many as 30 million workers are in the United States illegally.

15.2 What are the essential human resource management practices?

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Human resource planning matches staffing with organizational needs ✓ Human resource planning is the process of analyzing and organization’s staffing needs and determining how to best fill them

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Recruitment and selection attract and hire qualified job applicants ✓ Recruitment - what organizations do to attract a qualified pool of applicants to an organization ✓ Selection - involves choosing to hire from the pool the persons who offer the greatest performance potential ✓ Realistic job preview - gives a candidate both the good points and bad points of the job and the organization ✓ Reliability - means that a selection device or test provides a consistent measurement, returning the same results over time ✓ Validity - means that the test or selection device score is a good predictor of future job performance ✓ Assessment centers - evaluates a person’s job potential by observing his or her performance in experiential activities designed to simulate daily work ✓ Work sampling - working on the actual job while observers grade your performance

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Socialization and orientation integrate new employees into the organization ✓ Socialization - the process of influencing the expectations, behavior, and attitudes of a new employee in a desirable way ✓ Orientation - a set of activities designed to familiarize new employees with their jobs, co-workers, and key values, policies, and other aspects of the organization as a whole

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Training continually improves employee skills and capabilities ✓ Coaching - an experienced person provides performance advice to someone else ✓ Mentoring - a new or early career employee is assigned as a protégé to someone senior in their area of expertise, perhaps a high level manager

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Reverse mentoring - younger employees serve as a mentor to senior executives, frequently providing expertise on technology and social media

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Performance management appraises and rewards accomplishments ✓ Performance appraisal -a process of formally assessing and providing feedback on someone’s work accomplishments ➢ Evaluation - document and let people know how they are doing ➢ Development - identify how training and support can improve performance ✓ Graphic rating scale - a checklist or scorecard for rating an employee on preselected personal traits or performance characteristic such as work quality, attendance, and punctuality ✓ Behaviorally anchored rating scale (BARS) - describes actual behaviors that exemplify various levels of performance achievement in a job ✓ See Figure 10.1 for a depiction of a Behaviorally anchored rating scale ✓ Critical incident technique – keeps an actual log of a person’s effective and ineffective job behaviors ✓ 360 degree feedback - gathers inputs from the many people that work and depend on the person being appraised (boss, subordinates, peer, and others) ✓ Multi-person comparison - rate people relative to each other

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Retention and career development provide career paths and options ✓ Career development - the process of managing how a person grows and progresses in responsibility from one point in a career to the next ✓ Career planning - the process of systematically matching career goals and individual capabilities with opportunities for their fulfillment

10.2 Questions for discussion suggested answers 1) The more successful the company, the more likely that job interviews will be realistic.

Successful companies recognize that they are attractive to recruits and need not portray the job opportunity unrealistically. For less successful companies and small companies, human nature combined with competition from more attractive employers makes realistic job interviews less likely.

2) Most companies do not assign a coach or mentor; this typically occurs through networking or spontaneous contacts in the course of working. A new employee should take the time to understand the organization and its culture then identify persons who would seem to be possible coaches. Often, coaches or mentors are not even aware they are doing “coaching” or “mentoring” yet the benefits still can occur.

3) The biggest “downside” to 360 feedback is the danger that a disgruntled subordinate or peer who is competing for promotion will “sabotage” the rating by deliberately underrating or rating poorly the employee. The manager to whom the person reports needs to be cognizant of such possibilities and look at the holistic results of the ratings.

10.3 What are some of the current issues in human resource management?

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Today's lifestyles increase demands for flexibility and work-life balance

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✓ Work-life balance involves balancing career demands with personal and family needs •

Compensation plans influence employee recruitment and retention ✓ Merit pay - ties compensation to performance. High performing employees receive larger pay increases. ✓ Bonus pay - provides one-time payments to employees in recognition of contribution or performance ✓ Profit sharing - distributes a portion of profits to employees as a reward and incentive ✓ Gain sharing - distributes a portion of savings when costs are reduced

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Fringe benefits are an important part of employee compensation packages ✓ Fringe benefits - non monetary compensation such as health insurance and retirement plans ✓ Family friendly benefits - help employees achieve better work-life balance.

Examples include childcare and flextime ✓ Flexible benefits - allow employees to personalize benefits within a set allowance ✓ Employee assistance programs - help employees cope with personal stresses and problems

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Labor relations and collective bargaining are closely governed by law ✓ Labor unions - organizations to which employees belong and that deal with employers on the workers’ behalf; a collective “voice” for their members for added power ✓ Labor contracts – a formal agreement between a union and an employer which typically specify the rights and obligations of employees and management with respect to wages, work hours, work rules, seniority, hiring, grievances, and other conditions of work ✓ Collective bargaining - the process that brings management and union representatives together in negotiating, administering and interpreting labor contracts ✓ See Figure 10.2 for a depiction of what happens when labor-management relations become adversarial

10.3 Questions for discussion suggested answers 1. No. The issue of work-life balance becomes a real concern as employees increasingly feel that there is little "down time" when they are connected to work nearly 24/7 via smart phones and the Internet. Globalization has increased business dependence on 24/7 availability for many businesses. Separation of personal and work life becomes a real concern when employees find it difficult to "unplug".

2. Many things must go right for merit pay to work. Systems can become quite complicated, so it must be clearly explained to and understood by employees. The system of performance appraisal must be seen as valid and fair by employees. The amount of money offered must provide an incentive. Employees must see the pay as a valid

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incentive with clear criteria that fairly rewards those who deserve it. Failure of any of these will reduce its effectiveness.

3. Unions are gaining popularity, but not in traditional occupations. The unions seeing increasing membership are those in the service industries such as public service and the hospitality industry.

Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed The News Feed feature for this Module is entitled “Age Bias Complaints Are on the Increase” (Page 210).

Ask students to complete the “Reflect and React” exercise following the News Feed. This exercise will work well as a take-home assignment or for distance learning.

Additional questions for the class to consider and discuss: • •

If you were CEO of a company, what types of programs would you develop and implement to best assure that capable older workers continue to contribute meaningfully within the organization?

How can their experience best be transferred to younger workers?

Trendsetters The Trendsetters feature on page 219 features Susan Arnold, who recently left her position as a top executive at Procter & Gamble at age 55. Her track record of success at P&G and her relatively young age have created much speculation that she may be convinced to take a CEO position at a Fortune 500 job.

Questions for discussion: • •

Does Susan Arnold's career success seem to indicate that gender and sexual preference discrimination in U.S. organizations may be a thing of the past?

Arnold spent 29 years at Procter & Gamble. Is this a common goal of career planning for today's college graduates?

Stay Tuned The Stay tuned inset in Module 10 “Union membership declines among U.S. workers overall” provides information on union membership trends in the U.S. These questions may be used in class or online discussion in addition to the questions listed in the "Your Thoughts" section:

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Ask students to identify reasons or factors for the decline in union membership from 1995 to 2008.

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Why do you think that white-collar unions are showing faster growth?

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Given that 67 percent of the people surveyed feel that unions are too involved in politics, do you believe that unions would gain more members if they reduced their political involvement? Why or why not?

Self Assessment The assessment for this module is entitled “Performance Appraisal Assumptions” (Page 228).

The assessment tool is intended to help students determine whether students, as managers or potential future managers, are more prone to regard appraisals as evaluation or development tools.

Case Snapshot The case for this Module is “Netflix - Making Movie Magic".

1. What is the best performance appraisal method for making sure that only the “best” are kept on the Netflix team?

Multi-person comparisons that require managers to rate people relative to one another would be the best choice. The options include rank-ordering people from best to last, paired comparisons that rank everyone in comparison to everyone else, or forced distribution that categorize everyone into percentile rankings, sometimes leading to a "rank and yank" policy forcing mangers to fire employees falling into the lowest groups.

2. What are the limitations and risks of Hastings’ human resource management practices?

Appraisal systems that require managers to fire low performers require extensive training of mangers involved in the appraisal process to make the system effective and fair. These systems are also very time-consuming for managers and HRM. Compensation systems that pay salaries above the market may end up with inflated compensation expense, especially if the high starting salaries are increased annually with larger raises. Evidence does suggest that companies that pay higher than average starting salaries recruit better qualified employees and incur lower recruiting and training costs.

3. If Hastings was on the board of a firm like Procter & Gamble or Home Depot, would his ideas on human resource management work for them? Why or why not?

Hastings' policies may prove effective if highly qualified and high performing employees are attracted to the firm because of the pay policies.

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4. FURTHER RESEARCH—Check up on Hastings and Netflix. How is the firm doing right now? How has it changed since the case information was prepared? Are the human resource management practices described here still active at the firm? What else is Netflix doing to create human capital for sustained competitive advantage?

Suggested Team Exercise for Module 10 Break the class into teams and have the teams perform the following discussion tasks: • •

“Identify five questions that you might ask during an interview process to help obtain a realistic view of what the company is ‘really like’? “ As a group, reflect and discuss how your present or past employers (including part-time work) have provided performance appraisal information to you. Summarize your discussion to include the typical frequency, honesty, and value of the process. Also share any very poor or outstanding examples of how a “boss” helped you improve as an employee.

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MODULE 11 Leadership A leader lives in each of us Module Objectives Module Eleven reviews Leadership and its importance to the successful performance of any organization. The module also looks at traits and styles of effective leadership, as well as varying theories regarding contingency leadership.

The objectives of Module 11 may be summarized as: 1.

2.

3.

4.

To define leadership and review it as one of the four functions of management To review the impact of traits and style upon leadership effectiveness To define contingency leadership and its supporting theories To identify current issues and directions in leadership

Module Outline 11.1 What are the foundations for effective leadership?

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Leadership is one of the four functions of management ✓ Leading builds the commitments and enthusiasm for people to apply their talents to turn plans into action

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Leaders use position power to achieve influence ✓ Power is the ability to get someone else to do something that you want done; the ability to make things happen the way you want them to. ✓ Position power - the power of a position, and includes coercion. Rewards, and legitimacy ➢ Reward power - the capability to offer something of value as a means of influencing the behavior of other people ➢ Coercive power - the capability to punish or withhold positive outcomes as a means of influencing the behavior of other people ➢ Legitimate power - the capability to influence through authority; the right by virtue of one’s status as a manager, or the person in charge, to exercise control over persons in subordinate positions

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Leaders use personal power to achieve influence ✓ Personal power - who you are and what your presence means in a situation ➢ Expert power - the capability to influence the behavior of other people because of special knowledge and skills

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➢ Referent power - the capability to influence the behavior of other people because they admire and want to identify positively with you.

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Leaders bring vision to leadership situations ✓ Vision is a clear sense of the future ✓ Visionary leadership - is the ability to communicate a clear sense of the future and how to accomplish the vision

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Leaders display different traits in the quest for leadership effectiveness ✓ Research shows that physical characteristics make no difference ✓ Research has shown that people want leaders who are honest, competent, forwardlooking, inspiring, and credible ✓ Table 11.1 on page 235 explains more traits shared by effective leaders ✓ Learning Activity - ask students to individually list the three most important characteristics they want in a leader. Next, put them in groups of three and have them compile their lists and come to a consensus on the top three. Ask them if they displayed any of the highly rated characteristics in their group interaction.

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Leaders display different styles in the quest for leadership effectiveness ✓ Leadership style is the pattern of behaviors a leader exhibits ✓ Autocratic leaders hold on to authority and act in a unilateral "command and control" fashion ✓ Human relations leaders emphasize a high concern for people over task completion ✓ Democratic leaders encourage participation with a strong emphasis on both task and people ✓ Laissez-faire leaders show little concern for people or tasks and do just enough to not get fired ✓ Figure 11.3 on page 236 illustrates the concept

11.1 Questions for discussion suggested answers 1) Coercive power may be needed in situations where there is a threat of danger to the manager, the employee themselves, or other employees. It may also be needed when an employee has lost emotional control or an open confrontation develops in the workplace.

Finally, a crisis situation may require coercion if someone is reticent or unable to function because of fear.

2) Personal power is acquired as people understand the leader as a person and what he or she has to offer. Likeable personal characteristics are a good way to start to acquire referent power which is the ability to influence others because they admire or want to positively emulate the leader. Another type of personal power is acquiring influence because of special knowledge or skills. Special computer, technical or other related skills that help a new employee gain recognition would be an example of expert power.

Reverse mentoring mentioned in the previous chapter would be an example.

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3) Human relations leaders may have problems if the workers were not well trained, the job was not clearly defined, they didn't value high performance or were a little too immature to understand how important their task was. A good example might be managing young workers in a fast food restaurant.

11.2 What are the contingency leadership theories?

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Contingency leadership perspective suggests that successful leadership varies by the circumstances, task, the leader and the people.

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Fiedler’s contingency model matches leadership styles with situational differences ✓ Least Preferred Co-Worker Scale (LPC) - instrument used to classify leadership styles as either task or relationship motivated ✓ The Least Preferred Co-worker Scale is the Self Assessment for this chapter on page 250 ✓ See Figure 11.4 on page 238 for a depiction of Fiedler’s contingency model

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The Hersey-Blanchard situational leadership model matches leadership styles with the maturity of the followers ✓ Hersey-Blanchard situational leadership model suggests that successful leaders adjust their styles based on the maturity of followers and their readiness to perform the task at hand ✓ Leadership styles can be adjusted based on the amount of "Task Behavior" or guidance required and "Relationship Behavior" or support required ➢ Delegating - low task, low relationship ➢ Participating - low task, high relationship ➢ Selling - high task, high relationship ➢ Telling - high task, low relationship ✓ Figure 11.5 on page 239 illustrates the concept

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House’s path-goal theory matches leadership styles with task and follower characteristics ✓ Path-goal theory suggests that leaders are effective when they help followers move along paths to achieve both work and personal goals ✓ Four leadership styles ➢ Directive leader ➢ Supportive leader ➢ Achievement oriented leader ➢ Participative leader ✓ See inset box on page 240 for an explanation of the 4 path-goal leadership styles

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Leader-member exchange theory describes how leaders treat in-group and outgroup followers ✓ Leader-member exchange (LMX) recognizes that in most leadership situations, the leader does not treat everyone the same

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✓ In-groups are considered the best performers and receive special high-exchange relationships with the leader ✓ Out-groups have low-exchange relationships with the leader and are often excluded from some information and privileges •

The Vroom-Jago model describes a leader's choice of alternative decision-making methods ✓ Authority decision - is made by the leader and communicated to the group ✓ Consultative decision - is made by a leader after receiving input from the group ✓ Group decision - is made by the group themselves ✓ Figure 11.7 on page 242 illustrates the criteria involved in determining which of these is the best match for the situation ➢ Decision quality ➢ Decision acceptance ➢ Decision time

11.2 Questions for discussion suggested answers 1) Fiedler's contingency leadership model indicates that leadership success depends on a match between the leadership style of the leader, task structure, and the amount of position power the leader has. For career development, managers should understand their personal leadership style tendencies (take LPC scale at the end of the module) and understand how they must adjust to accommodate the workers, amount of task structure and how much control the manger has in the situation. Figure 11.4 on page 238 illustrates the adjustments that must be made to be effective.

2) The Hersey-Blanchard situational leadership model suggests that successful leaders must know the maturity level or "readiness" of those they lead and adjust leadership style.

There are four basic types of leadership to choose from based on the maturity or readiness of the employees. Delegating style works well with employees with a high degree of readiness, Selling works well with moderate to high readiness, Participative works with low to moderate readiness and telling works best with a low degree of follower readiness.

3) It would be better to put everyone in the in-group, allowing everyone equal access to information, assignments and privileges. Equity theory suggests that those in the outgroup would be less motivated and productive if they feel that their efforts do not receive the same rewards as the in-group.

11.3 What are current issues and directions in leadership development?

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Transformational leadership inspires enthusiasm and extraordinary performance ✓ Charismatic leadership - the ability to inspire others in exceptional ways ✓ Transactional leadership - somewhat “mechanical” in style; directs through tasks, rewards, and structures

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✓ Transformational leadership - the ability by leaders to use their personalities to inspire followers, to strive for extraordinary performance accomplishments ✓ See Tips to Remember on page 250 for characteristics of a transformational leader •

Emotionally intelligent leadership handles emotions and relationships well ✓ Emotional intelligence (EI) - an ability to understand emotions in oneself and others, and use this understanding to handle one’s relationships effectively ➢ Self awareness - the ability to understand our own moods and emotions ➢ Social awareness - the ability to empathize, to understand the emotions of others, and to use this understanding to better deal with them ➢ Self-management is the ability to think before acting and to be in control of otherwise disruptive impulses ➢ Relationship management is the ability to establish rapport with other in ways that build good relationships and influence their emotions in positive ways

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Interactive leadership emphasizes communication, listening, and participation ✓ Gender similarities hypothesis holds that males and females are very similar to one another in terms of psychological properties ✓ Interactive leadership style - democratic, participative, and inclusive, often approaching problems and decisions through teamwork ✓ Interactive leadership style - often associated with female leadership

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Moral leadership builds trust from a foundation of personal integrity ✓ Ethical leadership - leaders who practice high ethical standards, build ethical cultures, and who both help and require others to behave ethically in their work ✓ Integrity - honest, credible, and consistent behavior that puts sound values into action and earns the trust of followers

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Servant leadership is follower centered and empowering ✓ Servant leadership - based firmly on a commitment to serving others, to helping people use their talents to full potential while working together for organizations that benefit society ✓ Other-centered rather than self-centered; followers more important than the leader ✓ Empowerment - the process through which leaders give people job freedom and help them gain power to achieve influence within the organization

11.3 Questions for discussion suggested answers 1) No, most managers will not be able to excel at transformational leadership. This style requires a high degree of personal charisma and an ability to communicate vision which not all individuals possess. Additionally, it requires a high ability to make important and often difficult decisions with high consequences. This is also a rare trait.

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2) The gender similarities hypothesis suggests that they have similar psychological properties and both are capable of effective leadership. That being said, our perceptions of men and women as leaders have been the focus of several studies. Some results include these facts: women tend to be less directive; more participative; strong on motivating others, emotional intelligence, persuasion, communication, mentoring others; and supportive of high quality work.

3) Moral leadership involves integrity and ethical leadership, and putting values into action.

Servant leadership means that leaders view leadership as a responsibility and value followers highly. Servant leadership seems to be a way one would demonstrate moral leadership.

Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed The News Feed feature for this Module is entitled “Why Peter Drucker’s leadership advice still matters” (Page 253).

Ask students to complete the "Reflect and React" exercise following the News Feed. This exercise will work well as a take-home assignment or for a discussion topic for distance learning.

Additional questions for the class to consider and discuss: • • •

What is the value of saying to followers “I am not going to give you any answers…..I’m going to give you the questions you should ask.” Is this helpful from an employee’s perspective?

Evaluate the notion that “every decision is risky.” Do you know anyone who struggles with decisions (perhaps yourself)? If you know that all decisions involve some element of risk, how does this affect your perspective?

Reflect on the notion that “organizations exist not to satisfy themselves but to fill a customer need.” How does this concept or perspective affect the way an organization might be managed? Can you think of any organizations that seem to embrace such a notion and operate this way?

Trendsetters The Trendsetters feature for this Module is entitled “Lorraine Monroe's leadership turns vision into inspiration” (Page 240).

Suggested questions for further discussion: •

What is a “vision” from a leadership standpoint?

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• •

Can you give any examples of visions provided by leaders?

Can you think of any leaders who seem to “uplift people?” How do they do this?

Stay Tuned The Stay Tuned inset in this module on page 252 provides information on worker's attitudes towards their jobs and employers. These questions may be used in class or online for discussion in addition to the questions listed in the "What Are Your Thoughts?" section.

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Why do you think that organizations do not pick the best people for leadership? What factors contribute to this (or do you believe the perception is inaccurate)?

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Only 22% see leaders as “ready to admit mistakes.” Why is this a high number? What elements of our society or culture, if any, contribute to this in your opinion? Do we equate mistakes with failure?

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Are most managers leaders based on your experience? What factors might inhibit managers from being stronger leaders?

Self Assessment The assessment for this module is the "Least Preferred Co-Worker Scale” (Page 257). The assessment tool is intended to help students determine whether they have tendencies toward either relationship motivated or task motivated leadership on Fiedler's Contingency Model.

Students sometimes argue with their results, insisting that their own personal "least preferred coworker" was really, really bad. Reassure them that Fiedler understood that all of our least preferred co-workers were pretty bad. The scale evaluates how we viewed them, and relationship motivated leaders tend to be a little more positive in their perceptions of the least preferred coworker than the task motivated leaders. If they insist on describing their own personal nightmare experience, use it as a teachable moment and discuss ways to adjust leadership style for the "worst employee ever."

Case Snapshot The case for this Module is "Southwest Airlines - How Herb Kelleher Led the Way.” DISCUSSION QUESTIONS 1) Does the history of Southwest Airlines indicate that Herb Kelleher was a visionary leader, a servant leader, or both? How do you support your answer?

One could make a good case that Kelleher has a strong sense of vision, but servant leadership is probably more descriptive of Kelleher's leadership style. Servant leadership is focused on the follower and committed to helping people use their talents to full potential. There is a shift of focus to "other centered" rather than "self centered" Module 11

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leadership. These best describe Kelleher's leadership and the culture he established at Southwest.

2) What leadership style predominates at Southwest Airlines, and how has this style influenced the firm’s culture and management practices.

Transformational leadership seems to be a good fit with the unique culture of Southwest.

Transformational leadership includes the ability by leaders to use their personalities to inspire followers, to strive for extraordinary performance accomplishments. At Southwest, employees are considered "Customers with a capital C" and "luv" describes the culture.

3) To what extent do Kelleher’s and Barrett’s leadership approaches show consistency with Drucker’s notions of “good old-fashioned leadership?”

Note: This aspect of Drucker's work is not included in the 2nd edition of the text but it is included in the presentation slides. Consider these alternative questions: • Explain the types of position and personal power that seem to be exhibited by Herb Kelleher, Colleen Barrett and Gary Kelley.

• Which of the leadership styles in the Hersey-Blanchard Situational Model would apply to the leadership at Southwest? Explain your choice.

4) FURTHER RESEARCH—Gary Kelley has had some time now to bring his personal leadership to Southwest Airlines. And he has certainly faced some trying times with the economic recession. How well is Kelley doing? Does he have what it takes to keep the airline moving forward in the turbulent environment of the airlines industry?

Suggested Team Exercise for Module 11 Break the class into teams and have the teams perform the following discussion tasks: •

•

Ask students to individually list the three most important characteristics they want in a leader. Next, put them in groups of three and have them compile their lists and come to a consensus on the top three. Ask them if they displayed any of the highly rated characteristics in their group interaction.

Could an outstanding leader in one organization move into an entirely different organization and still be an outstanding leader? For example, could a great football coach with evident leadership abilities be hired as a CEO of a large company such as General Motors and be equally successful? How important I expertise? Can you provide any “real-life” examples of the “transferability” or “portability” of leadership?

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MODULE 12 Communication Listening can be the key to understanding Module Objectives Module Twelve reviews communications as a process together with its various elements of sender, message, receiver, channels, and filtering. Additionally, various ways to improve communication in terms of physical conditions, technology or listening are summarized. Finally, cross cultural communications are explored.

The objectives of Module 12 may be summarized as: 1.

2.

3.

4.

5.

6.

7.

To define communications To review the various parts of the communication process To describe the importance of communications to effective management To explore filtering and how it can impact communications To review the effects of alternative office design upon communication To evaluate the influence of technology in communication To review cross cultural communication and how sensitivity and etiquette can enhance this particular type of communication

Module Outline 12.1 What is communication and when is it effective?

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Communication is a process of sending and receiving messages with meanings attached ✓ Communication is the interpersonal process of sending and receiving symbols with messages attached to them ✓ Involves a sender encoding an intended message into meaningful symbols, both verbal and nonverbal; he or she sends the message through a communication channel to a receiver; the receiver then decodes or interprets the meaning; when present, feedback reverses the process and conveys the receiver’s response back to the sender ✓ See Figure 12.2 on page 255 for a depiction of the communication process

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Communication is effective when the receiver understands the sender’s message ✓ Messages aren't always interpreted by the receiver in the way the sender intended.

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Efficient communication is when communication occurs at minimum cost in terms of resources expended ✓ Cost includes time, expense and convenience

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Communication is persuasive when the receiver acts as the sender intends ✓ Persuasive communication is getting someone else to accept, support, and act consistent with the sender’s message ✓ Credible communication-trust, respect, and integrity in the eyes of others

12.1 Questions for discussion suggested answers 1) This may occur in situations where the information is very structured, factual, numerical, or transactional, and routine in nature. Examples would be the transmission of data or orders etc., using information systems. Other examples might include situations with a low probability that the message would be misunderstood so an inexpensive delivery method such as text or e-mail would be appropriate.

2) Persuasive communication requires at least “perceived” credibility, even with little or no expertise or integrity. This is “acting” a role and can be seen nightly on infomercials or “scams” that exploit vulnerable or gullible persons. Many such individuals are called “con artists” and may even run large companies like Madoff Securities. Supermarket tabloids and the "office gossip" would be good examples 3) Credibility takes place when a sender has the trust and respect of the receiver. Students will have many ideas about how to earn trust and respect. At the foundation of most responses will be the fact that a track record of honest and sincere communication builds trust and respect and eventually, credibility.

12.2 What are the major barriers to effective communication?

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Poor use of communication channels makes it hard to communicate effectively. ✓ Noise is anything that interferes with the communication process ✓ Figure 12.3 on page 259 illustrates the concept with a list of several distractions that are considered "noise". ✓ Learning activity - Ask students to make a list of "noise" that interferes with the communication process in your classroom. Their list will may include: environmental noise, texting, Facebook on laptops, neighbors talking, hunger, listening in a second language, faculty speaking in a boring, monotone way . . . . ✓ Communication channel is the medium used to carry a message ✓ Channel richness is the ability of a communication channel to effectively carry information ✓ Figure 12.4 on page 260 illustrates the concept with a continuum of low richness media to high richness media.

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Poor written or oral expression makes it hard to communicate effectively ✓ Table 12.1 lists Essential Ingredients of Successful Presentations ✓ Communication needs to be clear to be understood. Most managers need to practice written communication and presentation skills

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Failure to spot nonverbal signals makes it hard to communicate effectively ✓ Nonverbal communication takes place through gestures, expressions, posture and use of interpersonal space. ✓ Mixed messages result when words communicate one message and actions, body language

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Physical distraction make it hard to communicate effectively ✓ Physical distractions can be avoided or minimized by planning the message to minimize interruptions. Most of us don't multi-task effectively when communicating.

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Status differences make it hard to communicate effectively ✓ Filtering is intentional distortion of information to make it more favorable to the recipient ✓ Unpleasant information is minimized or eliminated

12.2 Questions for discussion suggested answers 1) SMS text is a low context medium, but it is very inexpensive. That means that it is not very effective, but very efficient. Messages that require high effectiveness would not be a good choice for text. An example might be anything that might need clarification with two way communication, or a complex message about a sensitive subject, like a firing, discipline or even compliment. This might be a tough sell to students that feel that texting can convey about anything.

2) A great idea would be to take a college writing or speech class. If that isn't an option, reading articles, going to workshops, joining an organization like Toastmasters, taking a Dale Carnegie class or even reading the suggestions in table 12.1 on page 260 would be a good idea.

3) A manager that is approachable and displays emotional intelligence will find that direct reports are much more comfortable in presenting information of any kind. A policy of "Management by Wandering/Walking Around (MBWA)" will help employees feel that the manger is accessible and approachable.

12.3 How can we improve communication with people at work?

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Active listening helps people say what they really mean ✓ Active listening is the process of taking action to help someone else say what he or she really means ✓ Rules for better listening 1) Listen for message content 2) Listen for feelings 3) Respond to feelings 4) Note all cues 5) Paraphrase and restate

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Constructive feedback is specific, timely, and relevant ✓ Feedback is the process of telling other people how you feel about something they did or said, or about the situation in general ✓ See the Tips to Remember inset box on page 265 for criteria for giving constructive feedback

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Open communication channels build trust and improve upward communication ✓ Management By Wandering (Walking) Around (MBWA) – when managers get out of their offices and simply spend time walking around and talking face-to-face with people ✓ Open office hours-setting time aside for walk in visitors ✓ Employee group meetings-a rotating schedule of face-to-face “shirtsleeve” meetings between top managers and mixed employee groups (some organizations use computer conferencing, videoconferencing or employee advisory councils)

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Office spaces can be designed to encourage interaction and communication ✓ Proxemics is the study of the way we use space ✓ Physical distance between people conveys varying intentions in terms of intimacy, openness, and status as they communicate with one another

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Appropriate technology can facilitate more and better communication ✓ E-mail, text, and social networking communication may or may not be appropriate in the organization or circumstance. Know your audience and plan the best medium for the message ✓ Electronic grapevine uses technology to transmit information around informal networks inside and outside organizations ➢ Some organizations monitor employee communication

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Sensitivity and etiquette can improve cross-cultural communication ✓ Ethnocentrism is a major source of intercultural difficulties ✓ Ethnocentrism is the tendency to consider one’s culture superior to any and all others ✓ Cultural etiquette is the use of appropriate manners and behaviors when communicating with people from other cultures

12.3 Reflect/React Suggested Answers 1) Most people do not listen to message content. This can occur because they are formulating a response or are distracted.

2) MBWA cannot be the sole source of information for a manager. It may contain employee bias or error. But MBWA is a very effective tool for building trust and communication and credibility with employees.

3) The desk should face visitors as they enter through the open door; the environment should be at least comfortable, if not inviting-a side chair would be helpful in this regard.

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A small conference table either round or oval in design would enable open communication.

Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed The News Feed feature for this Module is entitled “Millenials May Need Special Handling” (Page 262).

Ask students to complete the “Reflect and React” exercise following the Newsline. This exercise will work well as a take-home assignment or for distance learning.

Additional questions for the class to consider and discuss: • •

Does their increased use of technology make millenials more effective communicators than previous generations? More efficient?

How can conflict between millenials and older workers be minimized by better communication?

Trendsetters The Trendsetters feature for this Module is entitled “Evan Williams and Biz Stone Have Us All a-Twitter.” (Page 256).

Questions for discussion: • • •

Brainstorm ways that businesses or managers might utilize Twitter.

Evaluate the effectiveness and efficiency of Twitter How could your college use Twitter?

Stay Tuned See “Electronic monitoring by employers (as reported by American Management Association)” in inset box on page 254.

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Ask students if they are surprised to learn that their e-mails or telephone calls at work may be monitored.

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What are the ethical considerations of such monitoring by employers?

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What are the ethical responsibilities of employees?

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Do you know anyone who was “caught” at work for inappropriate e mails, use of the internet, or phone calls etc.?

Self Assessment •

The assessment for this module is entitled “Feedback and Assertiveness” (Page 272). The assessment tool is intended to help students determine how students perceive their own assertiveness and how they are perceived by others. Assertiveness is an important personal communication skill and may be an area that students need to develop.

Case Snapshot The Case for this Module is "Facebook - Communicating the Web2.0 Way" 1. Can effective communication be achieved via social networking sites such as Facebook?

It might depend on the way the user utilizes the features of Facebook. In Module 12, communication is described as effective if the receiver accurately understands the sender's message. Figure 12.4 illustrates a continuum of channel richness, and communication richness could be interpreted as adding meaning to communication. If a Facebook user only posts updates, the channel richness would be low and the possibility of misinterpretation would be relatively high.

This would make Facebook ineffective. Facebook allows posting longer messages than Twitter, and also allows posting photos. Actually, it allows posting lots of photos. This would allow for higher channel richness, therefore more effective communication.

This leaves an opening for a lively discussion with students. If their Facebook page has a large number of "social" photos, would that give an accurate view of the student to a viewer such as a professor of prospective employer? Something to think about!

2. What should Facebook keep in mind as it broadens and diversifies its user base? As users “friend” each other around the globe, what happens in their cross-cultural communication?

This will become a real concern since the international growth at Facebook is considerable. Students may have a great deal of experience communicating with people from different cultures. Their experience is relative to the discussion.

Related topics from the Module include Ethnocentrism and Cultural Etiquette.

3. Sheryl Sandberg is certainly under a lot of pressure to bring a mature edge to Facebook.

What are the most significant challenges that she most likely faces when communicating with her younger peers, and how would you advise her to best deal with them?

Since she is new and quite a bit older than the founder and many employees, she's going to need to gain access to their thoughts and earn their trust in order to avoid "filtering" of information she needs from employees. She will seem more

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approachable if she adopts a "Management by Wandering/Walking Around" style.

4. FURTHER RESEARCH—Find as much information as you can about Mark Zuckerberg. What kind of constructive feedback would you give him?

Suggested Team Exercise for Module 12 Break the class into teams and ask the teams to consider each of the flowing communication scenarios and to discuss and summarize their answers to each scenario: 1. You are the CEO of a company and, because of very poor sales due to the recent recession, have determined that you need to terminate 10% of your workforce as a cost control measure. How would you communicate this message to all employees in a large company with multiple locations?

2. You need to advise an employee who works in customer service that he or she is too abrasive with customers based on surveys that you have received. Where and how would you communicate this issue?

3. You are the Manager of Employee Benefits and want to communicate a change in the car mileage reimbursement rate from $.55 a mile to $.50 a mile for use of employees’ personal automobiles for company business. How would you do this?

4. You are the CEO of a pharmaceutical company and have just learned that the Food and Drug Administration has approved one of your drugs for use in cancer treatment. You need to advise your immediate executive staff. However this is very sensitive information. How would you do this?

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MODULE 13 Individual Behavior There’s beauty in individual differences Module Objectives Module Thirteen reviews individual behavior and the impact it has on organizations and performance. The module defines personalities and categorizes different traits which may compose one’s personalities. The module also reviews stress and its impact on the individual.

Additionally, perception is defined and the various ways in which perceptions can be distorted are examined. Finally attitudes and job satisfaction are explored.

The objectives of Module 13 may be summarized as: 1.

2.

3.

4.

5.

6.

To define personality To review the various types of traits that distinguish individuals To describe stress and its positive and negative consequences To explore perceptions and how they may distort behavior To review attitudes and how they may affect behavior To review job satisfaction and its impact on performance

Module Outline 13.1 How do perceptions influence individual behavior?

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Perceptual distortions can obscure individual differences ✓ Perception is the process through which people receive and interpret information from the environment ✓ See Figure 13.1 on page 276 for a depiction of the effects of perception on communication ✓ Stereotypes occur when a person identifies someone with a group or category, and then use the attributes associated with the group or category to describe the individual ✓ Halo effect occurs when we use one characteristic of a person or situation to form an overall impression ✓ Selective perception is the tendency to single out for attention those aspects of a situation or person that reinforce or appear consistent with one’s existing beliefs, values, or needs ✓ Projection occurs when we assign our personal attributes to other individuals

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Perception can cause attribution errors as we explain events and problems ✓ Attribution is developing explanations or assigning causes for events ✓ Fundamental attribution error is a tendency to blame other people when things go wrong, whether or not this is really true

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✓ Self-serving bias is the tendency for people to blame their personal failures or problems on external causes and underestimate the role of personal responsibility •

Impression management is a way of influencing how others perceive us ✓ Impression management – the systematic attempt to influence how others perceive us

13.1 Questions for discussion suggested answers 1) There are not many situations where having self-serving bias is constructive; it can lead to poor decisions and deflect needed improvement in personal skills. The exception to this may be in entry level positions at a very early stage when it may instill confidence until one arms himself or herself with stronger skills.

2) Advertising uses stereotypes to help promote the appeal or products or services.

Stereotypes help target products to the appropriate market such as men or women.

3) There is no conflict between trying to look your best or promote or market yourself with personal integrity. A conflict could occur if you did so at the expense of another person to gain an “edge.”

13.2 How do personalities influence individual behavior?

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The Big Five personality traits describe work-related individual differences ✓ Personality is the combination of characteristics that makes us unique. ✓ See table 13.1 on page 281 for “How to Identify the Big Five Personality Traits”: Extroversion, agreeableness, conscientiousness, emotional stability, and openness

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The Myers-Briggs type indicator is a popular approach to personality assessment ✓ Myers-Briggs type indicator - based on work of psychologist Carl Jung ✓ Three main dimensions of personality ➢ Extraversion/Introversion - how we relate to others ➢ Sensation/Intuition - how we gather information ➢ Thinking/Feeling - how we evaluate information ➢ Added fourth dimension: Judging/Perceiving how we react to the outside world

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Many personality traits influence work behavior ✓ Locus of control - belief in the amount of control a person has over personal destiny ➢ Internal- belief in personal control over success or failure, self confident ➢ External - belief that what happens is beyond personal control. Fate, luck and chance are strong influence. Less self confident. ✓ Authoritarianism - degree to which a person respects authority and accepts status differences.

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✓ Machiavellianism -emotionally detached and uses power and political behavior to manipulate others ➢ Hi-Mach - exploitative, believes the ends justify the means even if questionable ethical behavior is necessary ➢ Low-Mach - allows other to exert power over them ✓ Self-monitoring - open to feedback and able to adjust as circumstances change •

People with Type A personalities tend to stress themselves ✓ Stress is a state of tension experienced by individuals facing extraordinary demands, constraints or opportunities ✓ Type A personality describes someone that is high in achievement orientation, impatience, and perfectionism ✓ Stressors - sources of stress

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Stress has consequences for work performance and personal health ✓ Constructive stress is a positive influence on effort, creativity and diligence in work ✓ Destructive stress is dysfunctional when it is or seems to be so intense or long lasting that it overloads and breaks down a person’s physical and mental systems ✓ Job burnout is a sense of physical and mental exhaustion that can be incapacitating both personally and professionally ✓ Workplace rage - overly aggressive behavior toward co-workers, bosses, or customers ✓ Personal wellness - the pursuit of a personal health-promotion program

13.2 Questions for discussion suggested answers 1) I would add “effort.” Individuals vary significantly in their individual effort and energy expended at work. This may range from “driven” and “committed” to “lazy” at the opposite extreme.

2) Diversity brings creativity to problem solving. Organizations need creative, outgoing, reflective, thoughtful, detail oriented and intuitive people to avoid "group think" and represent many points of view.

3) Yes. Although many entrepreneurs and managers share type A characteristics there is a strong need for managers with strong people skills that do not necessarily need to be as driven and focused as a type A manager.

13.3 How do attitudes influence individual behavior?

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Attitudes predispose people to act in certain ways ✓ An attitude is a predisposition to act in a certain way toward people and environmental factors ✓ Cognitive dissonance is the discomfort we feel in situations where our attitude is inconsistent with our behavior

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✓ See Figure 13.3 on page 286 for the three components of individual attitudes: cognition, affect, and behavior •

Job satisfaction is a positive attitude toward one’s job and work experiences ✓ Job satisfaction is the degree to which an individual feels positive or negative about various aspects of his job and work experiences ✓ Components of job satisfaction are the job itself, quality of supervision, co-workers, pay, work conditions, and security

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Job satisfaction influences work behavior ✓ Withdrawal behaviors - such as absenteeism and turnover indicate employees are not satisfied with jobs ✓ Organizational citizenship behaviors - such as going the extra mile and willingness to do more than required ✓ Employee engagement - sense of belonging and connection with work and employer.

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Job satisfaction has a complex relationship with job performance ✓ Modest link between job satisfaction and performance and vice versa ✓ Figure 13.4 illustrates the relationship between job satisfaction and performance

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Emotions and moods are positive and negative states of mind that influence behavior ✓ Emotional Intelligence (EI) - ability to understand and manage emotions ✓ Emotions - strong feelings directed toward someone or something ✓ Moods - generalized positive and negative feelings or state of mind ✓ Mood contagion - influence of one's positive or negative moods onto others.

13.3 Questions for discussion suggested answers 1) Cognitive dissonance can be both a good or negative influence on us. It may be easier to display a positive attitude even though our internal feelings are not satisfactory or happy.

In that case, communications may lack candor. In other cases, most of us encounter aspects of our jobs or responsibilities that we disdain on occasion. Displaying a “different” positive attitude ay be incongruent, but may be more effective if we conclude that it is simply not “a big deal.”

2) If a worker is satisfied but is performing at a low level, the best way to deal with such an employee is to discuss the performance with that employee. Then challenges and specific goals and deadlines for improved performance should be detailed and communicated clearly.

3) It's an old saying that attitudes are contagious. Mood contagion certainly backs that up. A new supervisor should demonstrate the moods or attitudes that he or she would like to see mirrored back by employees.

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Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed The New Feed feature for this Module is entitled “Racial Bias Embedded in the Perceptions of Many” (Page 277).

Ask students to complete the “Reflect and React” exercise following the News Feed. This exercise will work well as a take-home assignment or for distance learning.

Additional questions for the class to consider and discuss: •

What roles do "selective perception" and "projection" have on stereotypes?

•

What can managers do to avoid stereotyping in assessing the potential of employees?

Trendsetters The Trendsetters feature for this Module is entitled “Richard Branson Leads with Personality and Flamboyance,” and can be found on page 279. Suggested questions for discussion: •

What type of personality traits do you think entrepreneurs such as Mr. Branson typically possess?

•

Evaluate Locus of Control as you believe it applies to Mr. Branson

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How would you evaluate Branson's approach to "impression management"?

Stay Tuned The Stay tuned inset in Module 13 on page 287 provides information from a survey on job satisfaction. These questions may be used in class or online for discussion in addition to the questions listed in the "Your Thoughts" section: •

What behaviors are dissatisfied workers likely to exhibit?

•

What should a manager do when these behaviors are observed?

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What do you look for in a job that you could be completely satisfied with?

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Self Assessment The assessment for this module is entitled “Stress Test” (Page 292). The assessment tool is intended to help students who have a tendency to have a "Type A" personality. After taking the assessment, group students by their scores and ask them to list the personality traits of their particular style.

Case Snapshot The case for this module is "Panera Bread - Positive Attitude Is a Recipe for Success". If location and class size allow, consider either having your class visit a Panera location or invite a Panera manager to speak to your class.

1. How might consumers' perception of Panera's menu and atmosphere affect their dining experience?

The menu and atmosphere support a perception of fast food or a bistro setting because of the counter service, serving food on trays and self-bussing of the tables.

2. Describe how fast food industry stereotypes might positively and negatively impact Panera.

Perceptual distortions may interfere with our ability to observe individual differences.

Customers that view Panera as fast food may limit their visits to the restaurant to lunch, breakfast and times when a quick meal is necessary.

3. What are Panera's competitive advantages? Can any of them be deemed "sustainable"?

Competitive advantages include high quality food with fresh ingredients, a varied menu, casual atmosphere and wi-fi, among others. Many find Panera to be an ideal place for business lunches and meetings because of the availability of these factors. They are certainly sustainable, but are also easy to imitate.

FURTHER RESEARCH - See if you can find data reporting on how Panera's sales were affected by the recent economic downturn in the U.S. economy and if the effects were different in various regions of the country. Does this company have special strengths that help it deal better than others with challenges such as those posed by a declining economy?

Suggested Team Exercise for Module 13 Break the class into teams and have the teams discuss various techniques or methods that individuals in the team have found to be successful in dealing with stress. Each team should develop a list of “tactics to deal with stress” based on their team discussions. After the teams have had sufficient time to develop their lists, have each team report and share their ideas with the rest of the class.

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MODULE 14 Motivation Respect Unlocks Human Potential Module Objectives Module Fourteen reviews motivation and the various theories that researchers have developed regarding this topic. Each theory is explored, including potential benefits and limitations or challenges. The theories are organized into human needs, thought processes and decisions, and reinforcement and their impact on motivation.

The objectives of Module 14 may be summarized as: 1.

2.

3.

4.

5.

To define motivation To distinguish between theories of motivation To review how human needs influence motivation to work To review how thought processes influence motivation to work To review how reinforcement influences motivation to work

Module Outline 14.1 How do human needs influence motivation to work?

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Maslow described a hierarchy of needs topped by self-actualization ✓ Abraham Maslow’s developed the theory of hierarchy of needs. ✓ See Figure 14.1 on page 297 for a depiction of the management opportunities found in Maslow’s hierarchy of needs. ✓ Lower order needs are physiological, safety, and social concerns ✓ Higher order needs are esteem and self-actualization ✓ Deficit principle states that a satisfied need is not a motivator of behavior ✓ Progression principle states that people try to satisfy lower level needs first, then move step-by-step up the hierarchy

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Alderfer’s ERG theory focuses on existence, relatedness, and growth needs ✓ Clayton Alderfer developed the ERG theory which collapses Maslow’s five needs into three: ➢ Existence (desires for physiological and material well-being) ➢ Relatedness (desires for satisfying interpersonal relationships) ➢ Growth (desires for continued psychological growth and development) ✓ Frustration-regression principle says that an already satisfied lower level need can be reactivated when a higher level need cannot be satisfied

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McClelland identified acquired needs for achievement, power, and affiliation ✓ David McClelland and colleagues identified three basic acquired needs that are central to understanding motivation: ➢ Need for achievement is the desire to do something better or more efficiently ➢ Need for power is the desire to control other people ➢ Need for affiliation is the desire to establish and maintain friendly and warm relations with other people ✓ There are also two forms of power need: ✓ The need for personal power is exploitative and involves manipulation for the pure sake of personal gratification ✓ The need for social power involves the use of power in a socially responsible way, one that is directed toward group or organizational objectives rather than personal ones

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Herzberg’s two-factor theory focuses on higher-order need satisfaction ✓ Frederick Herzberg developed the two-factor theory. Figure 14.2 on page 299 illustrates the concept. ➢ Satisfier factors (motivator factors) are part of job content; sense of achievement, feelings of recognition, a sense of responsibility, the opportunity for advancement, and feelings of personal growth ➢ Hygiene factors (“turn off workers”; dissatisfier factors) are part of job context; working conditions, interpersonal conditions, interpersonal relations, organizational policies and administration, technical quality of supervision, and base wage or salary ✓ Job satisfaction cannot be increased by improving the hygiene factors; you will only get less dissatisfaction. You can only improve job satisfaction by improving the satisfier factors ✓ Job enrichment involves building into a job more opportunities for people to manage themselves and exercise self-control over their work. Job enrichment increases job satisfaction according to Herzberg

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The core characteristics model integrates motivation and job design ✓ Job design is the allocation of specific work tasks to individuals and groups ✓ Job enrichment increases the content of a job by adding opportunities for satisfying higher order needs (Maslow) by adding opportunities for planning and controlling work. ✓ Five "core" job characteristics include" ➢ Skill variety ➢ Task identity ➢ Task significance ➢ Autonomy ➢ Feedback from the job itself

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14.1 Questions for discussion suggested answers 1) Yes, most humans want to be fulfilled doing whatever it is they are most skilled at and that makes them most happy. Very few are able to ever reach that pinnacle-but it is nevertheless a goal for most of us.

2) The need for achievement is a mostly positive force and can result in a healthy drive for meaningful accomplishment as well as contributions to society. Taken to extremes or used unethically, it can result in undesirable, even dangerous behavior. Ruthless dictators or dishonest CEOs or corrupt politicians are examples of drive combined with a lack of ethics that has negative consequences. For most individuals with ethics, excessive drive can lead to an unhealthy balance between career and personal life/family happiness.

3) Not everyone approaches work with the maturity or intellect necessary to desire more responsibility or self control in work. Young part-time workers and temporary workers among others may desire job simplification rather than job enrichment.

14.2 How do thought processes and decisions affect motivation to work?

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Equity theory explains how social comparisons can motivate human behavior ✓ J. Stacy Adams developed this theory. Figure 14.4 on page 303 illustrates the concept ✓ Equity Theory says that employees continually compare their situations to others; any perceived inequities in those comparisons will motivate them to engage in behaviors which correct the inequities ✓ Perceived negative inequity creates a sense of anger; and causes employees to try and restore perceived equity to the situation, such as by reducing current work efforts to compensate for the missing rewards or by even quitting the job ✓ Perceived positive inequity is associated with a sense of guilt; and the individual restores perceived equity by increasing the quantity or quality of work, taking on more difficult assignments or working overtime

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Expectancy theory considers motivation = expectancy x instrumentality x valence ✓ Developed by Victor Vroom. Figure 14.5 on page 305 illustrates the concept. ✓ Motivation = Expectancy x Instrumentality x Valence ✓ Expectancy is a persons’ belief that working hard will result in achieving a desired level of task performance ✓ Instrumentality is a persons’ belief that successful performance will lead to rewards ✓ Valence is the value a person assigns to the possible rewards and other work-related outcomes ✓ See Figure 14.6 on page 305 which summarizes the management implications of expectancy theory

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Goal-setting theory says that well chosen and well set goals can be motivating ✓ Developed by Edwin Locke

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✓ Goal-setting theory says that task goals can be highly motivating, but only if they are the right goals and if they are set in the proper way ✓ MBO can be a good example 14.2 Questions for discussion suggested answers 1) People are as different as snowflakes and their motives are equally complex. Some may see inequity and decide to work harder to correct it, but others may see the deck stacked against them and decline any more effort than is necessary because they see no possible reward.

2) Expectancy is the belief that hard work will result in achieving a desired level of task performance. Low expectancy would indicate that a worker wouldn't believe that working hard would achieve the expected level of performance. This would likely create a worker that put forth a half-hearted effort because he or she didn't believe that working any harder would help. This may be pretty common for new employees learning a complex task, or someone learning to play an instrument or learning a new sport like snowboarding. In most of these cases, it takes a manager, teacher or coach to help develop expectancy in the discouraged newcomer.

3) It's very common to have goals established without input from workers. Deciding how to best accomplish the goals may be empowering and motivational.

14.3 What role does reinforcement play in motivation?

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Operant conditioning is the process of applying the law of effect to influence behavior by controlling its consequences ✓ Law of effect says that people generally repeat behavior that results in a pleasant outcome and avoid behavior that results in an unpleasant outcome ✓ Operant conditioning is the process of is the process of applying the law of effect to influence behavior by manipulating its consequences ✓ Positive reinforcement strengthens or increases the frequency of desirable behavior by making a pleasant consequence contingent on its occurrence ✓ Negative reinforcement strengthens or increases the frequency of desirable behavior by making the avoidance of an unpleasant consequence contingent on its occurrence ✓ Punishment decreases the frequency of or eliminates undesirable behavior by making an unpleasant consequence contingent on its occurrence ✓ Extinction decreases the frequency of or eliminates undesirable behavior by making the removal of a pleasant consequence contingent on its occurrence ✓ See Figure 14.7 for a depiction of how to apply reinforcements strategies to influence work behavior (page 308)

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Positive reinforcement connects desirable behavior with pleasant consequences ✓ Law of contingent reinforcement states: for a reward to have maximum reinforcing value, it must be delivered only if the desired behavior is exhibited ✓ Law of immediate reinforcement states: the more immediate a reward after the desired behavior is exhibited, the greater the reinforcing value of the reward. Table 14.1 (page 310) list guidelines for using these laws in the workplace.

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✓ Shaping is the creation of a new behavior by the positive reinforcement of successive approximations to it ✓ Continuous reinforcement schedule administers a reward each time a desired behavior occurs ✓ Intermittent reinforcement schedule rewards behavior only periodically ✓ Generally, continuous reinforcement will elicit a desired behavior more quickly than intermittent reinforcement ✓ Behavior acquired under an intermittent schedule will be more permanent than will behavior acquired under a continuous schedule •

Punishment connects undesirable behavior with unpleasant consequences

14.3 Questions for discussion suggested answers 1) One of the concerns that many people have regarding operant conditioning is that it is, in fact, a manipulative methodology. Nevertheless, in certain situations, especially shortterm in nature, it is an effective technique.

2) Punishment is appropriate when an employee has performed poorly, endangered others, committed a crime, or other serious offenses or incidents. Progressive discipline policies apply punishment for unacceptable behavior in the workplace.

3) It is not likely that a manager or parent will only be able to use positive reinforcement.

Humans will make mistakes and not always operate at perfectly or even at a high level.

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Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed The News Feed feature for this Module is entitled “Volunteers find they do well by doing good” (Page 300).

Ask students to complete the “Reflect and React ” exercise following the News Feed. This exercise will work well as a take-home assignment or for distance learning.

Additional questions for the class to consider and discuss: •

Applying the motivation theories in Module 14, how can employers increase motivation by encouraging employees to volunteer, possibly even doing it on company time?

•

List the benefits that volunteers may receive from volunteering for non-profit organizations in their community.

•

What additional benefits may the unemployed find?

Trendsetters The Pacesetters feature for this Module is entitled “Pat Christen fights disease with video game therapy,” and can be found on page 309.

Questions for discussion: •

Applying Expectancy theory, how can using video games encourage young cancer patients to take their medication on schedule?

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In addition to Expectancy theory, which motivation theory seems to best explain the reasons video games help young cancer patients?

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Would gaming have the same effect on adults? Why or why not?

Stay Tuned See the inset box on page 304 titled "Women still behind in pay and top jobs".

•

Ask students which statistics are most surprising and why?

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•

How might the statistics on the small number of women in top positions affect the expectancy theory equation for young women?

•

How might the statistics be explained by equity theory?

Self Assessment The assessment for this module is entitled “Two Factor Profile” (Page 289). The assessment tool is intended to help students determine the relative importance students place on motivation (satisfier) factors or hygiene (dissatisfier) factors in the workplace.

Once students have completed the assessment, refer them back to Herzberg's two-factor theory (list in figure 14.2 on page 299) and have them list the factors in the appropriate category in order of importance. Group or class discussion of results will follow.

Case Snapshot The case for this Module is "Pixar - Animated Geniuses" 1) For Steve Jobs, with all his wealth and success, how can the needs theories explain his motivation?

Maslow's Hierarcy of needs - Need for higher order needs such as esteem and self-actualization seem to explain Steve Jobs. The need for creative and challenging work certainly applies to his career.

McClelland's Acquired needs - the Need for achievement and power are recurring themes in Job's career Herzberg's Two-factor theory - Satisfiers such as achievement and recognition are evident.

2) When Pixar was struggling and Jobs was investing more and more money to keep it afloat, he could have made the decision to sell and go off to invest his money and time in other pursuits. But he didn’t. How can Jobs’s decision to stick with Pixar be explained using (a) Vroom’s expectancy theory and (b) Locke’s goal-setting theory? a. Vroom's expectancy theory explains motivation as the product of the equation Motivation = Expectancy x Instrumentality x Valence. Jobs has high expectations that his work can achieve a high level of task performance, a strong belief that his successful performance will lead to rewards (instrumentality) and places a high value on rewards (valence). b. Jobs is clearly a visionary that thrives on setting challenging goals and achieving them.

3) Pixar relies heavily on creative people who are motivated to do their best under production schedules that can sometimes be highly stressful. How could a human resource executive utilize the notion of “flexibility” to provide a highly motivating work environment for such people?

Flexibility is used in many organizations that rely on intrinsically motivated creative professionals. Flexibility also indicates an element of trust, autonomy and

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control in the work environment. These are key elements of motivation in Maslow's hierarchy (self actualization) McClelland's acquired needs (need for power), Herzberg's two factor theory (motivation factor), responsibility and job enrichment (autonomy). Allowing employees to have or earn flexibility on how and when they do their jobs can be recruiting factor in attracting creative and motivated employees and as a motivator for current employees.

4) FURTHER RESEARCH—Some predict that Pixar’s best days are over and that it will be hard for it to stay creative as a Disney business. Find out how Pixar is doing now. In what ways is its current performance consistent with or different from the predictions, and why?

Suggested Team Exercise for Module 14 Break the class into teams and have the teams to consider and develop responses to each of the following questions: 1. Can ‘fear’ motivate? Have you ever played a sport or been in a class where fear improved your performance?

2. You are a manager of a local fast food operation (such as Domino’s Pizza). You recognize that most of your employees are working to earn money for college or working only until they can find another job. (Turnover is very high in the fast food industry).

Your boss, a regional manager, has given you authority to design programs to reduce turnover and help lengthen employee stays. What ideas would you submit and why?

3. You have just been hired as manager of a department in a new company. After watching employee performance after your first six months, you are surprised that one of your best supervisors, a female, is making $40,000 for the same position that a male counterpart (who is also performing his job well) with similar experience and skills, is making $50,000. Neither presumably knows what the other makes since pay is confidential (but you aren’t certain that employees don’t share such information). How would you handle this issue?

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MODULE 15 Teams and Teamwork Two heads really can be better Module Objectives Module Fifteen covers the topic of teams and their importance within organizations. They various types of teams are explored. The benefits as well as the potential pitfalls of teams are reviewed. Finally, ways to improve team effectiveness are examined, along with the variables that impact team performance.

The objectives of Module 15 may be summarized as: 1.

2.

3.

4.

5.

6.

To differentiate the various types of teams in organizations To explain the advantages and disadvantages of teams To review how people and processes impact team effectiveness To examine what factors affect team performance To explain how to improve team performance To discuss how teams can improve job satisfaction

Module Outline 15.1 Why is it important to understand teams and teamwork?

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Teams offer synergy and other benefits to their members and the organization ✓ A team is a collection of people with complementary skills who work together to accomplish shared goals while holding each other mutually accountable for performance results ✓ Teamwork is people working together to accomplish a shared goal ➢ Synergy is the creation of a whole that exceeds the sum of its parts

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Teams often suffer from common performance problems ✓ Social loafing is the presence of “free-riders” who slack off and allow other team members to do the work ✓ To prevent social loafing: ➢ Make task assignments more interesting ➢ Keep group size small ✓ Other problems can be personality conflicts, differences in work styles, ambiguous agendas, or members who can’t or won’t do group work

•

Organizations are networks of formal teams and informal groups ✓ A formal team is officially designated for a specific organizational purpose ➢ Department

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➢ Work units ➢ Teams ➢ Divisions ✓ An informal group comes from natural or spontaneous relationships among people ➢ Interest groups ➢ Friendship groups ➢ Support groups •

Organizations use a variety of committees, task forces, and cross-functional teams ✓ A committee brings together people outside of their daily job assignments to work in a small team for a specific purpose; the task agenda is specific and ongoing ✓ Project teams or task forces bring together people from various parts of the organization to work on common problems ✓ Cross-functional team has members from different functional units ✓ Employee-involvement team has members who meet on a regular basis to apply their expertise to continuous improvement ✓ Quality circle is a group of workers that meets regularly to discuss and plan specific ways to improve work quality

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Virtual teams are increasingly common in organizations ✓ The virtual team is a group of people who work together and solve problems through computer-mediated rather than face to face interactions

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Self-managing teams are a form of job enrichment for groups ✓ Self-managing teams - have authority to make decisions about how they share and complete their work. ✓ Figure 15.2 illustrates the concept

15.1 Questions for discussion suggested answers 1) Teams can perform well under shorter deadlines, as long as the deadlines are realistic.

Most teams seem to plan and organize better under some targeted deadline that produces modest pressure to get things done and goals accomplished. Exceptions would be for complex projects such as systems integration, construction or surgery where rushing may contribute to mental judgment errors; or creative teams that need for freedom.

2) Interviews and important customer sales or service visits are examples of situations that are more effective when done face-to-face. This allows for improved personal interaction, as well as reading body language. Face to face allows for more "channel richness".

3) Most people do not want to confront others-it is not a comfortable feeling for many people. This is particularly true if the parties are likely to have ongoing contact at work or other daily interactions.

15.2 What are the building blocks of successful teamwork?

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Teams need the right members and inputs to be effective ✓ See Figure 15.3 on page 324 for a depiction of the foundations of team effectiveness ✓ An effective team should be accomplishing three output goals – task performance, member satisfaction, and viability for future action ✓ Membership composition is the mix of abilities, skills, backgrounds, and experiences of the members ✓ Diverse teams are generally more creative ✓ Homogenous teams may be easier to manage ✓ Inputs that affect team performance ➢ Team size - teams larger than 6-7 members can be difficult to manage ➢ Nature of the task - complex tasks require more information exchange and interaction than simple ones ➢ Organizational setting - the key issue is support in information, resources, technology, rewards, and even physical space

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Teams need the right processes to be effective ✓ Team process is the way the members actually work together as they transform inputs into outputs

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Teams move through different stages of development ✓ Figure 15.4 on page 326 illustrates the concept ✓ Forming stage-initial task orientation and interpersonal testing ✓ Storming stage-period of high emotionality ✓ Norming stage-members begin to coordinate their efforts as a working unit and tend to operate with shared rules of conduct ✓ Performing stage-members are more mature, organized, and well functioning ✓ Adjourning stage-members prepare to achieve closure and disband, ideally with a sense that they have accomplished important goals

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Teams performance is affected by norms and cohesiveness ✓ Norms are behaviors expected of team members; rules or standards that guide behaviors ✓ Cohesiveness is the degree to which members are attracted to and motivated to remain on a team ✓ Figure 15.6 on page 329 depicts how norms and cohesiveness impact team performance

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Team performance is affected by task and maintenance roles ✓ Task activities contribute directly to the team’s purpose ✓ Maintenance activities support the emotional side of teams as an ongoing social system ✓ Distributed leadership makes every member continually responsible for recognizing and taking actions when task or maintenance activities are needed ✓ Disruptive behaviors such as aggressiveness, excessive joking and non-participation cause problems and limit effectiveness

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Team performance is affected by use of communication networks ✓ Decentralized communication networks - all members communicate directly with each other ✓ Centralized communication networks - when members divide up the work and then simply coordinate the final results ✓ Restricted communication networks exist when subgroups fail to adequately communicate with one another, become antagonistic and restrict communication. ✓ See Figure 15.7 on page 330 for a depiction of the communication networks

15.2 Questions for discussion suggested answers 1) Teams that cannot get past the storming stage usually complete the work quickly and poorly to get “it over with.” Some teams may dissolve altogether.

2) Sometimes, employees can be so cohesive they “protect” each other and resist change that may seem to adversely affect another member of the group. They may also, intentionally or unintentionally, shield the manager from “bad news” and by so doing, lose opportunities for improvement. Groupthink is more likely to occur in cohesive teams.

3) Cohesiveness is how much the team members are committed to the team, value membership, control behavior to conform to norms and get satisfaction from team performance. Teams are more cohesive when they are smaller in size, reward team outcomes rather than individual performance, compete with other teams and have members that are similar to each other.

15.3 How can managers create and lead high-performance teams?

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Team building helps team members learn to better work together ✓ Team building is a set of collaborative activities to analyze how well a team functions and make constructive changes to increase team effectiveness ✓ Decision making is a process of selecting a course of action from alternatives ✓ Consensus means that after thorough discussion, most team members encourage one decision alternative and the other members agree to support it

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Teams performance suffers when groupthink leads to bad decisions ✓ Groupthink is the tendency for members of highly cohesive groups to lose their critical evaluative capabilities ✓ Table 15.1 on page 334 lists symptoms of groupthink

✓ Special techniques can increase creativity in team decision making ✓ Brainstorming encourages group members to contribute ideas in an open discussion without concern for practicality ➢ Freewheeling is encouraged ➢ Quantity of ideas is more important than quality

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➢ Criticism in prohibited ✓ Nominal group technique uses a structured agenda to encourage participation and restrict criticism

15.3 Questions for discussion suggested answers 1) Teambuilding is for everyone that participates in a team. The goal of teambuilding is to create a more effectively performing team, so all team members must participate. If a team member just cannot adjust to the team environment, it might be best to find a job where team involvement is not required.

2) Unanimity involves everyone agreeing to a course of action. Consensus means that everyone has participated in the discussion, but not all agree on a first choice of action.

The minority agrees to support the choice of the majority.

3) Groupthink exists in highly cohesive teams out of a desire for unanimity. Pre-cohesive teams may arrive at a unanimous solution because some group members are not committed enough to honestly contribute (social loafing).

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Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed The News Feed feature for this Module is entitled “Reality TV rubs off on 'Reality Team Building'".” (Page 332).

Ask students to complete the “Reflect and React” exercise following the News Feed. This exercise will work well as a take-home assignment or for distance learning. Note: It is recommended that teams or pairs be used for answers because of the nature of the module topic.

Additional questions for the class to consider and discuss: •

How would a team go through the stages of team development (forming, storming, norming, performing and adjourning) when forced to live together if they already worked together?

•

Which of the stages of team development would be most affected? Why?

Trendsetters The Trendsetters feature for this Module is entitled “Amazon's Jeff Bezos Believes in Two-Pizza Teams” (Page 325).

Questions for discussion: •

How does Bezos' "two-pizza philosophy” fit with management knowledge about teams covered in Module 15?

•

What role does Bezos' leadership style have in creating effective teams?

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What type of pizza is best for teambuilding and effective teamwork?

This is absolutely just for fun, although team discussions may turn relevant if you choose to ask students the question. They'll laugh first and that's good.

The correct answer is pepperoni.

Stay Tuned See the inset box on page 320.

•

Module 15

What other concerns can you add to the list?

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What role do smart phones and Wi-Fi play in making team meetings more or less productive?

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As a team leader, how can you make meetings more productive?

Self Assessment The assessment for this module is entitled “Team Leader Skills” (Page 337-8). The assessment tool is intended to help students identify and understand their strengths and weakness on seven dimensions of team leadership. After taking the assessment, ask students to list their highest two scores and lowest two scores. In teams of 3-4, ask them to discuss how they might improve their scores.

Case Snapshot The case for this case is "NASCAR - Fast cars, passion and teamwork create wins."

1. What are the teamwork and team building challenges that must be mastered to create synergy when a new NASCAR driver joins an established racing team and pit crew?

When a new driver joins an established team, the team must adjust to the new membership and will most likely be required to go through the stages of team development (forming, storming, norming, performing and adjourning). Power struggles and role identification are likely to be redefined as senior members of the team adjust to their new roles. This would be much like having a new manager, assistant manager or colleague join any work team. Students will be able to discuss this from their own work experience.

2. How can a NASCAR owner use insights from the open systems model of team effectiveness to build a true high performance racing team?

The open systems model of team effectiveness (Foundations of team effectiveness) is listed in Figure 15.3 on page 324. Team owners may need to review the inputs, throughputs and outputs in assessing how to make teams more effective. This is an opportunity to compare these elements of team effectiveness to the elements of control (feedforward, concurrent and feedback) in Module 6. Is controlling team effectiveness much different than controlling other work processes?

3. In what ways can a driver’s behavior help with or hinder a crew chief’s efforts to build the right norms and a high level of cohesiveness in a pit crew?

Drivers are the visible element of the racing team. Drivers that see themselves as an important role in a team, yet part of the team are likely to receive strong support from other team members. NASCAR is a fast growing spectator sport and students are likely to have favorite drivers, and drivers that they dislike. Ask them to identify the cohesiveness of those teams and their feelings about the drivers' roles. If you have NASCAR fans, you're likely to have a spirited discussion.

4. FURTHER RESEARCH—Pit crews are often in the news. See what you can find out about pit crew performance. Ask: What differentiates the “high performance” pit crews from the “also rans?” If you were to create a seminar for NASCAR crew chiefs on

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“Insights for Successful and Effective Pit Crews,” what would you include in the seminar and why?

Suggested Team Exercise for Module 15 Break the class into teams and have the teams to consider and develop responses to each of the following questions: 1. Today distance learning is growing at a very fast rate. What type of courses do you think are best suited for distance learning? Which courses are least suited for distance learning?

Explain your reasoning for each answer.

2. What are the limitations of distance learning as contrasted with traditional “classroom learning”? What are the advantages of it?

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MODULE 16 Conflict and Negotiation Working together isn’t always easy Module Objectives Module Sixteen covers conflict and negotiation, two very useful skills frequently used by managers and individuals in organizations. The causes and types of conflict are reviewed. The styles and approaches in which people respond to conflict are examined. Negotiation is defined and the ways of reaching agreement are reviewed. Finally, common negotiation pitfalls are outlined along with the use of third-party negotiations.

The objectives of Module 16 may be summarized as: 1. To review the causes and types of conflict 2. To explore how managers resolve conflict; their styles and approaches 3. To review how people each agreement and the conditions for ethical and successful negotiation 4. To examine common pitfalls of negotiation 5. To review mediation and arbitration as forms of third-party negotiations

Module Outline 16.1 What should we know about dealing with conflict?

• Conflicts can occur over substantive or emotional issues ✓ A conflict is a disagreement among people ✓ Substantive conflict - involves disagreements over such things as goals and tasks, the allocation of resources, rewards, policies and procedures, and job assignments ✓ Emotional conflict - involves disagreements from feelings of anger, distrust, dislike, fear, and resentment, as well as relationship problems •

Conflicts can be both functional and dysfunctional ✓ A functional conflict stimulates greater work efforts, more creativity in problem solving, and even to cooperate more with others; is constructive ✓ A dysfunctional conflict results in overloading people physically and/or mentally, making it hard to cooperate more with others; is destructive ✓ See Figure 161 on page 343 for a depiction of the relationship between conflict intensity and performance

•

Organizations have many sources of potential conflict ✓ See table 16.1 on page 344 for the sources of conflicts in organizations ✓ Intrapersonal conflict-caused by incompatible goals or expectations ✓ Approach-approach conflict occurs when a person selects between two positive and equally attractive alternatives

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✓ Avoidance-avoidance conflict-caused by incompatible goals or expectations ✓ Interpersonal conflict-between individuals and may be over substantive or purely emotional ✓ Intergroup conflict-occurs between representatives of different groups expectations (for example, the marketing and manufacturing departments) ✓ Interorganizational conflict-occurs between representatives of different organizations (for example, labor unions and employers, or between nations) •

People use different interpersonal conflict management styles ✓ Figure 16.2 on page 345 illustrates the different conflict management styles and how they relate to cooperation and assertiveness ✓ Avoidance is when everyone withdraws and pretends that conflict doesn’t really exist, hoping that it will go away ✓ Accommodation plays down differences and highlights similarities and areas of agreement ✓ Both accommodation and avoidance create lose-lose conflict, where no one achieves his or her true desires ✓ Competition is when one party wins through superior skill or outright domination ✓ Compromise occurs through trade-offs ✓ Both compromise and competition are forms of win-lose conflict, where each party strives to gain something at the other party’s expense ✓ Collaboration tries to find and address the problem and reconcile the real differences underlying a conflict ✓ Collaboration is the most effective conflict resolution style and is a form of win-win conflict, that tries to resolve things to the mutual benefit of all conflicting parties

•

Structural approaches can help to deal with conflicts in organizations ✓ Make more resources available ✓ Appealing to higher-level goals ✓ Changing the people ✓ Altering the physical environment ✓ Integrating devices ✓ Changing reward systems ✓ Changing policies and procedures ✓ Training in interpersonal skills

16.1 Questions for discussion suggested answers 1) Substantive conflict involves disagreements over issues such as an allocation of resources or effort. Emotional conflict involves disagreements over personal behavior and involves emotions and perspectives that may be hard to understand. For this reason, I think emotional conflicts are more difficult. Just ask your local police department how they feel about responding to domestic disputes! Of course, answers will vary here and could lead to a spirited class discussion.

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2) Some conflict is useful and may be productive. Conflict, if handled properly, can result in new ideas, products or processes that may improve performance. The absence of conflict is likely to produce a stale environment and one devoid of challenges to elevate the current way of “doing things.”Group Think (Module 15) can also result from a lack of conflict.

3) When a problem is minor with few or no consequences, it is likely “not worth it.” This is particularly true when it involves a person who may be experiencing personal issues such as divorce, a death in the family, or serious illness. Another reason to avoid a conflict may be if more information will be available at a future point that may resolve the issue.

16.2 How can we negotiate successfully?

•

Negotiation is a process of reaching agreement ✓ Negotiation is the process of making joint decisions when the parties involved have alternative preferences ✓ Substance goals focus on outcomes ✓ Relationship goals focus on the people issues and procedures ✓ It is a mistake to weight either substance or process over the other; both are important ✓ Effective negotiation resolves an issue while maintaining positive relations between the parties

•

Negotiation can be approached in distributive or integrative ways ✓ Distributive negotiation is a process in which each party focuses mainly on staking out claims for certain preferred outcomes ➢ Hard distributive negotiation – things become highly competitive as each party focuses on narrow self-interests, trying to gain from losses by the other ➢ Soft distributive negotiation – one party basically backs off and accepts a loss, perhaps “just to get things over with” ✓ Integrative negotiation is often called principled negotiation and considers the interests of all parties; based on the merits of individual claims, and that serves each party’s desires as much as possible

•

Integrative agreements require commitment, trust, and information ✓ Fisher and Ury provide four rules for integrative negotiations (see inset box on page 350) ✓ See Figure 16.3 for a depiction of a typical case of labor negotiations ✓ A bargaining zone is the area between one party’s minimum reservation point and the other party’s maximum reservation point ✓ A key task for a negotiator is to discover each party’s reservation points

•

Successful negotiations should meet high ethical standards

•

Negotiators should guard against common pitfalls

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✓ Myth of the “fixed pie” assumes that in order for one person to gain, the other must give something up; fails to realize that the pie can be expanded or better utilized for everyone’s benefit ✓ Non-rational escalation of conflict - the negotiator becomes committed to previously stated demands and allows personal needs for ego enhancement and saving face to exaggerate the perceived importance of satisfying them ✓ Overconfidence and ignoring the other’s needs - the negotiator fails to understand the needs of the other party and the merits of their position ✓ Too much telling and too little hearing - poor communication ✓ Premature cultural comfort - negotiator mistakenly assumes that he or she understands the intentions, positions and meanings communicated by a negotiator from another culture.

•

Mediation and arbitration are forms of third-party negotiations ✓ Mediation involves a neutral third party who tries to improve communication between negotiating parties and keep them focused on relevant issues ✓ Arbitration involves a neutral third party who acts as a “judge” and issues a final binding decision ✓ Alternative dispute resolution - utilizes mediation and arbitration, but only after direct attempts to negotiate agreements between the conflicting parties has failed

16.2 Questions for discussion suggested answers 1) Most individuals will give in more easily when they have a positive relationship with someone. Indeed, this is one of the foundations of sound customer relationships and salesmanship; to attempt to cultivate a good relationship so that the customer finds it harder to say “no.”

2) Yes, by using the principles of integrative negotiation, both parties may recognize and, in fact, realize, a win-win outcome.

3) Usually, suggesting a break from negotiations is helpful, so both sides have an opportunity for a fresh perspective. Often, it helps for one party to concede a small item, or to restate the needs of the other party; then say, positively, “let’s see if there is a way we can meet your needs and my (the company’s) needs.”

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Teaching Notes In this section, ideas, exercises, and assignments are provided to assist you in integrating the concepts in Exploring Management for your students, especially the special features of the text.

News Feed The News Feed feature for this Module is entitled “Bloggers' Rights a Growing Point of Conflict” (Page 342).

Ask students to complete the “Reflect and React” exercise following the News Feed. This exercise will work well as a take-home assignment or for distance learning.

Additional questions for the class to consider and discuss: • Does the nature of the conflict between Sanderson and her employer seem to be substantive or emotional?

•

Apply the conflict resolution strategies as they were used by Sanderson and her employer.

•

Would an integrative negotiation settlement using Fisher and Ury's four rules of integrative negotiation have been possible? Which of the rules would have been most difficult to apply?

Trend Setters The Trend Setters feature for this Module is entitled “Conflict and negotiation are center stage when nations meet.” (Page 352) Questions for discussion: • Is it possible to be CEO of a major organization or oversee an organization such as the United Nations without conflict management skills?

•

Can you identify ways to strengthen your own conflict resolution skills? Make a list of three actions you could take or ways you could begin to accomplish this.

•

What types of jobs do not involve conflict resolution? Are there any?

Stay Tuned See the inset box on page 344.

• Does the change in attitudes among workers toward more flexible work arrangements create inevitable conflict with employers? Which type of conflict is likely?

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•

How can employers approach employee demands for more flexibility?

•

What positive outcomes may result from these growing work-life conflicts?

Self Assessment The assessment for this module is entitled “Conflict Management Strategies” (Page 356). The assessment tool is intended to help students identify and understand their conflict management style.

Case Snapshot The case for this Module is "AFL-CIO - Managing Dissent While Supporting Labor".

1. What have been the primary sources of conflict that affected the working relationships of the AFL and CIO, and the unions that are part of each?

The primary sources of historical conflict have been substantive and have included issues such as competition with other unions over membership, and internal conflict of the AFL and CIO over their roles. Current issues continue to be substantive and include membership and representation with unions that have chosen to leave the AFL-CIO umbrella.

2. Is the ongoing tension within the AFL-CIO functional or dysfunctional for the accomplishment of its mission? Why? It depends on how they handle it. If the unions choose to establish a foundation of trust in their negotiations, it may be a functional conflict that strengthens the employee's rights to representation of a strong union, increasing task performance. In the past, politics and personal agendas have clouded issues in union management. Continuation of these destructive forces will lead to dysfunctional conflict.

3. If you were a union negotiator for the United Auto Workers and were leading a delegation that was to negotiate a new three-year contract with Ford Motor Company, what ground rules would you set for your negotiating team to help ensure that the bargaining would be successful?

Fisher and Ury's four rules for integrative negotiation would be a solid foundation. Ethical behavior and avoiding common negotiation pitfalls (myth of the fixed pie, non rational escalation of conflict, overconfidence and ignoring the other's needs and too much telling and too little hearing) should be avoided also.

4. FURTHER RESEARCH—Review the Web site of the AFL-CIO. What are the current issues that the organization is tackling on behalf of labor? What are its strategies and with whom does it cooperate in trying to address these issues? Overall, is the AFL-CIO on or off track in today’s economy?

Suggested Team Exercise for Module 16

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Break the class into teams and ask the teams to consider and develop responses to each of the following questions: 1. Have you been on teams in a class where conflict developed and in which you took an active role in resolving the conflict? How did you resolve the conflict?

2. Have you been in a conflict with someone where you simply conceded rather than continue the conflict or tension surrounding it? Was this a deliberate decision that “it just isn’t that big a deal”?

3. Have you ever felt that you “gave in” when you felt strongly that your position was a reasonable one or one that you felt strongly about, and it was an important one? What feelings or “aftermath” does this typically produce?

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After Meeting/Project Review After participating in a meeting or a group project, complete the following assessment.

1. How satisfied are you with the outcome of the meeting project?

Note at all satisfied

Totally satisfied

1

2 3 4 5 6

7

2. How do you think other members of the meeting/project group would rate you in terms of your influence on what took place?

No influence

Very high influence

1

2 3 4 5 6

7

3. In your opinion, how ethical is any decision that was reached.

Highly unethical 1

Highly ethical 2 3 4 5 6

7

4. To what extent did you feel “pushed into” going along with the decision.

Not pushed into it at all 1

Very pushed into it 2 3 4 5 6

7

5. How committed are you to the agreements reached?

Not at all committed 1

Highly committed 2 3 4 5 6

7

6. Did you understand what was expected of you as a member of the meeting or project group?

Not at all clear 1

Perfectly clear 2 3 4 5 6

7

7. Were participants in the meeting/project group discussions listening to each other?

Never 1

Always 2 3 4 5 6

7

8. Were participants in the meeting/project group discussions honest and open in communicating with one another?

Never 1

Always 2 3 4 5 6

7

9. Was the meeting/project completed efficiently?

Not at all 1

Very much 2 3 4 5 6

7

10. Was the outcome of the meeting/project something that you felt proud to be a part of?

Not at all 1

Very much 2 3 4 5 6

7

Instructions In groups (actual meeting/ project group or as assigned by the instructor) share results and discuss their implications (a) for you, and (b) for the effectiveness of meetings and group project work in general.

Source: Developed from Roy J. Lewicki, Donald D. Bowen, Douglas T. Hall, and Francine S. Hall, Experiences in Management and Organizational Behavior, 4th ed. (New York: Wiley, 1997), pp. 195-197.

American Football Instructions Form into groups as assigned by the instructor. In the group do the following: 1. Discuss “American Football” - the rules, the way the game is played, the way players and coaches behave, and the roles of owners and fans.

2. Use “American Football” to create an analogy that explains the way U. S. Corporations are run and how they tend to behave in terms of strategies and goals.

3. Prepare a class presentation as if you were presenting to a group of Japanese business executives who were interested in learning more about American business so that they can best compete with the large U.S. corporations in the global marketplace. In this presentation use the analogy of “American Football”: (1) to explain American business strategies and practices to the Japanese. (2) to critique the potential strengths and weaknesses of the American business approach in terms of success in the global marketplace.

Beating the Time Wasters Preparation 1. Make a list of all the things you need to do tomorrow. Prioritize each item in terms of how important it is to create outcomes that you can really value. Use this classification scheme: A. Most important, top priority B. Important, not top priority C. Least important, low priority Look again at all activities you have classified as B. Reclassify any that are really A's or C's. Look at your list of A's. Reclassify any that are really B's or C's. Double-check to make sure you are comfortable with your list of C's.

2. Make a list of all the “time wasters” that often interfere with your ability to accomplish everything you want to on any given day.

Instructions Form into groups as assigned by the instructor. Have all group members share their lists and their priority classifications. Members should politely “challenge” each other's classifications to make sure that only truly “high-priority” items receive an A rating. They might also suggest that some C items are of such little consequence that they might not be worth doing at all. After each member of the group revises his or her “to do” list based on this advice, go back and discuss the time wasters identified by group members. Develop a master list of time wasters and what to do about them. Have a group spokesperson be prepared to share discussion highlights and tips on beating common time wasters with the rest of the class.

Source: Developed from Roy J. Lewicki, Donald D. Bowen, Douglas T. Hall, and Francine S. Hall, Experiences in Management and Organizational Behavior, 3rd ed. (New York: Wiley, 1988), pp. 314-16.

Compensation and Benefits Debate Preparation Consider the following quotations.

On compensation: “A basic rule of thumb should be-pay at least as much, and perhaps a bit more, in base wage or salary than what competitors are offering.”

On benefits: “When benefits are attractive or at least adequate, the organization is in a better position to employ highly qualified people.”

Instructions Form groups as assigned by the instructor. Each will be given either one of the preceding position statements or one of the following alternatives.

On compensation: “Given the importance of controlling costs, organizations can benefit by paying as little as possible for labor.”

On benefits: “Given the rising cost of health-care and other benefit programs and the increasing difficulty many organizations have staying in business, it is best to minimize paid benefits and let employees handle more of the cost on their own.”

Each group should prepare to debate a counterpoint group on its assigned position. After time is allocated to prepare for the debate, each group will present its opening positions. Each will then be allowed one rebuttal period to respond to the other group. General class discussion on the role of compensation and benefits in the modern organization will follow.

Conflict Dialogues Contributed by Edward G. Wertheim, Northeastern University Procedure 1. Think of a conflict situation at work or at school and try to re-create a segment of the dialogue that gets to the heart of the conflict.

2. Write notes on the conflict dialogue using the following format Introduction o o o o

Background My goals and objectives My strategy Assumptions I am making

Dialogue (re-create part of the dialogue below and try to put what you were really thinking in parentheses). o o o o

Me: Other: Me: Other, etc.

3. Share your situation with members of your group. Read the dialogue to them, perhaps asking someone to play the role of "other."

4. Discuss with the group: 1. The style of conflict resolution you used (confrontation, collaboration, avoidance, etc.)

2. The triggers to the conflict, that is, what really set you off and why 3. Whether or not you were effective 4. Possible ways of handling this differently 5. Choose one dialogue from within the group to share with the class. Be prepared to discuss your analysis and also possible alternative approaches and resolutions for the situation described.

Confronting Ethical Dilemmas Preparation Read and indicate your response to each of the situations below. a. Ron Jones, vice president of a large construction firm, receives in the mail a large envelope marked “personal.” It contains a competitor's cost data for a project that both firms will be bidding on shortly. The data are accompanied by a note from one of Ron's subordinates saying: “This is the real thing!” Ron knows that the data could be a major advantage to his firm in preparing a bid that can win the contract. What should he do? b. Kay Smith is one of your top-performing subordinates. She has shared with you her desire to apply for promotion to a new position just announced in a different division of the company. This will be tough on you since recent budget cuts mean you will be unable to replace anyone who leaves, at least for quite some time. Kay knows this and in all fairness has asked your permission before she submits an application. It is rumored that the son of a good friend of your boss is going to apply for the job. Although his credentials are less impressive than Kay's, the likelihood is that he will get the job if she doesn't apply. What will you do? c. Marty Jose got caught in a bind. She was pleased to represent her firm as head of the local community development committee. In fact, her supervisor's boss once held this position and told her in a hallway conversation, “Do your best and give them every support possible.” Going along with this, Marty agreed to pick up the bill (several hundred dollars) for a dinner meeting with local civic and business leaders. Shortly therafter, her supervisor informed everyone that the entertainment budget was being eliminated in a cost-saving effort. Marty, not wanting to renege on supporting the community development committee, was able to charge the dinner bill to an advertising budget. Eventually, an internal auditor discovered the mistake and reported it to you, the personnel director. Marty is scheduled to meet with you in a few minutes. What will you do?

Instructions Working alone, make the requested decisions in each of these incidents. Think carefully about your justification for the decision. Meet in a group assigned by your instructor. Share your decisions and justifications in each case with other group members. Listen to theirs. Try to reach a group consensus on what to do in each situation and why. Be prepared to share the group decisions, and any dissenting views, in general class discussion.

Decision-Making Biases Instructions How good are you at avoiding potential decision-making biases? Test yourself by answering the following questions: 1. Which is riskier: a. driving a car on a 400-mile trip? b. flying on a 400-mile commercial airline flight?

2. Are there more words in the English language: a. that begin with r? b. that have r as the third letter?

3. Mark is finishing his MBA at a prestigious university. He is very interested in the arts and at one time considered a career as a musician. Is Mark more likely to take a job: a. in the management of the arts? b. with a management consulting firm?

4. You are about to hire a new central-region sales director for the fifth time this year. You predict that the next director should work out reasonably well since the last four were “lemons” and the odds favor hiring at least one good sales director in five tries. Is this thinking a. correct? b. incorrect?

5. A newly hired engineer for a computer firm in the Boston metropolitan area has 4 years' experience and good all-round qualifications. When asked to estimate the starting salary for this employee, a chemist with very little knowledge about the profession or industry guessed an annual salary of $35,000. What is your estimate? $ ___ per year Scoring Your instructor will provide answers and explanations for the assessment questions.

Interpretation Each of the preceding questions examines your tendency to use a different judgmental heuristic.

In his book Judgment in Managerial Decision Making, 3rd ed. (New York: Wiley, 1994), pp. 6-7, Max Bazerman calls these heuristics “simplifying strategies, or rules of thumb” used in making decisions. He states, “In general, heuristics are helpful, but their use can sometimes lead to severe errors. . .. If we can make managers aware of the potential adverse impacts of using heruistics, they can then decide when and where to use them.” This assessment offers an initial insight into your use of such heuristics. An informed decision maker understands the heuristics, is able to recognize when they appear, and eliminates any that may inappropriately bias decision making.

Test yourself further. Write next to each item the name of the judgmental heuristic that you think applies (see Chapter 7).

Source: Incidents from Max H. Bazerman, Judgment in Managerial Decision Making, 3rd ed.

(New York: Wiley, 1994), pp. 13-14. Used by permission.

Defining Quality Preparation Write your definition of the word quality here. QUALITY= Instructions Form groups as assigned by your instructor. (1) Have each group member present a definition of the word quality. After everyone has presented, come up with a consensus definition of quality.

That is, determine and write down one definition of the word with which every member can agree. (2) Next, have the group assume the position of top manager in each of the following organizations. Use the group's quality definition to state for each a quality objective that can guide the behavior of members in producing high-“quality” goods and/or services for customers or clients. Elect a spokesperson to share group results with the class as a whole.

Organizations: a. b. c. d. e. f. g. h. i.

A college of business administration A community hospital A retail sporting goods store A fast-food franchise restaurant A United States post office branch A full-service bank branch A student-apartment rental company A used textbook store A computer software firm

Entrepreneurs Among Us Instructions Form into groups as assigned by the instructor. In the group do the following: 1. Create a list of students that you know that are “entrepreneurial.”

2. For each student describe what they are doing that is entrepreneurial.

3. For each student create a listing of their personal characteristics - personalities, talents, hobbies, interests, academic accomplishments, etc.

4. Examine the lists created under #3 to see what characteristics the student entrepreneurs do and do not share in common.

5. Have each student in your class group describe ways in which he or she is also entrepreneurial. Choose one of your members as “Star Entrepreneur of the Group.”

6. Prepare and make a presentation to the class as whole that summarizes the student entrepreneurs that your our group identified, and also introduce to the class your “star entrepreneur.”

Force-Field Analysis 1. Form into your class discussion groups.

2. Review the concept of force-field analysis-the consideration of forces driving in support of a planned change and forces resisting the change.

3. Use this force-field analysis worksheet in the assignment: List of Driving Forces (those supporting the change) _______ _______ . . . list as many as you can think of List of Resisting Forces (those working against the change) _______ _______ . . . list as many as you can think of> 4. Apply force-field analysis and make your lists of driving and resisting forces for one of the following situations: a. Due to rapid advances in web-based computer technologies, the possibility exists that the course you are presently taking could be in part offered online. This would mean a reduction in the number of required class sessions but an increase in students' responsibility for completing learning activities and assignments through computer mediation. b. A new owner has just taken over a small walk-in-and-buy-by-the-slice pizza shop in a college town. There are presently eight employees, three of whom are fulltime and five of whom are part-timers. The shop is presently open seven days a week from 10:30 a.m. to 10:30 p.m. each day. The new owner believes there is a market niche available for late-night pizza and would like to stay open each night until 2 a.m. c. A situation assigned by the instructor.

5. Choose the three driving forces that are most significant to the proposed change. For each force develop ideas on how it could be further increased or mobilized in support of the change.

6. Choose the three resisting forces that are most significant to the proposed change. For each force develop ideas on how it could be reduced or turned into a driving force.

7. Be prepared to participate in a class discussion led by the instructor.

How to Give, and Take, Criticism Preparation The “criticism session” may well be the toughest test of a manager's communication skills.

Picture Setting 1-you and a subordinate meeting to review a problem with the subordinate's performance. Now picture Setting 2-you and your boss meeting to review a problem with your performance. Both situations require communication skills in giving and receiving feedback.

Even the most experienced person can have difficulty, and the situations can end as futile gripe sessions that cause hard feelings. The question is “How can such 'criticism sessions' be handled in a positive manner that encourages improved performance . . . and good feelings?”

Instructions Form into groups as assigned by the instructor. Focus on either Setting 1 or Setting 2, or both as also assigned by the instructor. First, answer the question from the perspective assigned. Second, develop a series of action guidelines that could best be used to handle situations of this type.

Third, prepare and present a mini-management training session to demonstrate the (a) unsuccessful and (b) successful use of these guidelines.

If time permits, outside of class prepare a more extensive management training session that includes a videotape demonstration of your assigned criticism setting being handled first poorly and then very well. Support the videotape with additional written handouts and an oral presentation to help your classmates better understand the communication skills needed to successfully give and take criticism in work settings.

JOB SATISFACTION AROUND THE WORLD Question

Are workers happier in the United States or elsewhere in the world?

Possible Research Directions

• • • •

Gather together recent reports on job satisfaction among workers in the United States.

Gather similar data from workers in other countries - eg. Canada, United Kingdom, Germany, Japan, India.

Compare the job satisfaction data across countries to answer the project question.

Consider pursuing your results further by researching how the various countries compare on working conditions, labor laws and related matters. Use this information to add context to your findings.

Leading Through Participation Preparation Read each of the following vignettes. Write in the margin whether you think the leader should handle the situation with an individual decision (I), consultative decision (C), or group decision (G).

Vignette I You are a general supervisor in charge of a large team laying an oil pipeline. It is now necessary to estimate your expected rate of progress in order to schedule material deliveries to the next field site. You know the nature of the terrain you will be traveling and have the historical data needed to compute the mean and variance in the rate of speed over the type of terrain. Given these two variables, it is a simple matter to calculate the earliest and latest times at which materials and support facilities will be needed at the next site. It is important that your estimate be reasonably accurate; underestimates result in idle supervisors and workers, and overestimates result in materials being tied up for a period of time before they are to be used. Progress has been good, and your 5 supervisors along with the other members of the gang stand to receive substantial bonuses if the project is completed ahead of schedule.

Vignette II You are supervising the work of 12 engineers. Their formal training and work experience are very similar, permitting you to use them interchangeably on projects. Yesterday, your manager informed you that a request had been received from an overseas affiliate for 4 engineers to go abroad on extended loan for a period of 6 to 8 months. He argued and you agreed that for a number of reasons this request should be filled from your group. All your engineers are capable of handling this assignment, and from the standpoint of present and future projects there is no particular reason that any one should be retained over any other. The problem is complicated by the fact that the overseas assignment is in what is generally regarded in the company as an undesirable location.

Vignette III You are the head of a staff unit reporting to the vice president of finance. He has asked you to provide a report on the firm's current portfolio including recommendations for changes in the selection criteria currently employed. Doubts have been raised about the efficiency of the existing system in the current market conditions, and there is considerable dissatisfaction with prevailing rates of return. You plan to write the report, but at the moment you are quite perplexed about the approach to take. Your own specialty is the bond market, and it is clear to you that a detailed knowledge of the equity market, which you lack, would greatly enhance the value of the report. Fortunately, 4 members of your staff are specialists in different segments of the equity market. Together, they possess a vast amount of knowledge about the intricacies of investment.

However, they seldom agree on the best way to achieve anything when it comes to the stock market. Whereas they are obviously conscientious as well as knowlegeable, they have major

differences when it comes to investment philosophy and strategy. The report is due in 6 weeks, You have already begun to familiarize yourself with the firm's current portfolio and have been provided by management with a specific set of constraints that any portfolio must satisfy. Your immediate problem is to come up with some alternatives to the firm's present practices and select the most promising ones for detailed analysis in your report.

Vignette IV You are on the division manager's staff and work on a wide variety of problems of both an administrative and technical nature. You have been given the assignment of developing a universal method to be used in each of the 5 plants in the division for manually reading equipment registers, recording the readings, and transmitting the scoring to a centralized information system. All plants are located in a relatively small geographical region. Until now there has been a high error rate in the reading and/or transmittal of the data. Some locations have considerably higher error rates than others, and the methods used to record and transmit the data vary between plants. It is probable, therefore, that part of the error variance is a function of specific local conditions rather than anything else, and this will complicate the establishment of any system common to all plants. You have the information on error rates but no information on the local practices that generate these errors or on the local conditions that necessitate the different practices. Everyone would benefit from an improvement in the quality of the data because it is used in a number of important decisions. Your contacts with the plants are through the quality control supervisors responsible for collecting the data. They are a conscientious group committed to doing their jobs well but are highly sensitive to interference on the part of higher management in their own operations. Any solution that does not receive the active support of the various plant supervisors is unlikely to reduce the error rate significantly.

Instructions Form groups as assigned by the instructor. Share you choices with other group members and try to achieve a consensus on how the leader should best handle each situation. Refer back to the discussion of the Vroom-Jago “leader-participation” theory presented in Chapter 13. Analyze each vignette according to their ideas. Do you come to any different conclusions? If so, why?

Nominate a spokesperson to share your results in general class discussion.

Source: Victor H. Vroom and Arthur G. Jago, The New Leadership (Englewood Cliffs, NJ: Prentice Hall, 1988). Used by permission.

Lost at Sea Sextant

_____ _____ _____

Shaving mirror

_____ _____ _____

5 gallons water

_____ _____ _____

Mosquito netting

_____ _____ _____

1 survival meal

_____ _____ _____

Maps of Pacific Ocean

_____ _____ _____

Flotable seat cushion

_____ _____ _____

2 gallons oil-gas mix

_____ _____ _____

Small transistor radio

_____ _____ _____

Shark repellent

_____ _____ _____

20 square feet black plastic _____ _____ _____ 1 quart 20-proof rum

_____ _____ _____

15 feet nylon rope

_____ _____ _____

24 chocolate bars

_____ _____ _____

Fishing kit

_____ _____ _____

Consider This Situation You are adrift on a private yacht in the South Pacific when a fire of unknown origin destroys the yacht and most of its contents. You and a small group of survivors are now in a large raft with oars. Your location is unclear, but you estimate that you are about 1,000 miles south-southwest of the nearest land. One person has just found in her pockets 5 $1 bills and a packet of matches.

Everyone else's pockets are empty. The items at the right are available to you on the raft.

Instructions 1. Working alone, rank in Column A the 15 items in order of their importance to your survival (“1” is most important and “15” is least important).

2. Working in an assigned group, arrive at a “team” ranking of the 15 items and record this ranking in Column B. Appoint one person as group spokesperson to report your group rankings to the class.

3. Do not write in Column C until further instructions are provided by your instructor.

Source: Adapted from “Lost at Sea: A Consensus-Seeking Task,” in The 1975 Handbook for Group Facilitators. Used with permission of University Associates, Inc.

Organizational Metaphors Instructions Form into groups as assigned by the instructor. In the group do the following: 1. Think about organizations and how they work.

2. Think of the following: the human brain, a spider web, a rock band, a cup of decaf coffee latte with almond syrup, about the fifth date in an increasingly serious courtship, a beehive, and a cement mixer.

3. Choose or have your instructor choose one of the examples listed in #2. Brainstorm in your group how this metaphor can be used to describe how organizations work.

4. Draw a picture or create a short skit to illustrate your metaphor of an organization.

5. Present your metaphorical view of organizations to the class.

6. Be prepared to defend your metaphor and engage in class discussion.

Personal Career Planning Preparation Complete the following three activities, and bring the results to class. Your work should be in a written form suitable for your instructor's review.

Step 1: Strengths and Weaknesses Inventory Different occupations require special talents, abilities, and skills if people are to excel in their work. Each of us, you included, has a repertoire of existing strengths and weaknesses that are “raw materials” we presently offer a potential employer. Of course, actions can (and should!) be taken over time to further develop current strengths and to turn weaknesses into strengths. Make a list identifying your most important strengths and weaknesses at the moment in relation to the career direction you are most likely to pursue upon graduation. Place a * next to each item you consider most important to address in your courses and student activities before graduation.

Step 2. Five-Year Career Objectives Make a list of 3 to 5 career objectives that are appropriate given your list of personal strengths and weaknesses. Limit these objectiveness to ones that can be accomplished within 5 years of graduation.

Step 3. Five-Year Career Action Plans Write a specific action plan for accomplishing each of the 5 objectives. State exactly what you will do, and by when, in order to meet each objective. If you will need special support or assistance, identify it and state how you will obtain it. Remember, an outside observer should be able to read your action plan for each objective and end up feeling confident that (a) he or she knows exactly what you are going to do and (b) why.

Instructions Form into groups as assigned by the instructor. Share your career-planning analysis with the group; listen to those of others. Participate in a discussion that examines any common patterns and major differences among group members. Take advantage of any opportunities to gather feedback and advice from others. Have one group member be prepared to summarize the group discussion for the class as a whole. Await further class discussion led by the instructor.

Source: Developed in part from Roy J. Lewicki, Donald D. Bowen, Douglas T. Hall, and Francine S. Hall, Experiences in Management and Organizational Behavior, 3rd ed. (New York: Wiley, 1988), pp. 261-67. Used by permission.

Sources and Uses of Power Preparation Consider the way you have behaved in each of the situations described below. They may be from a full-time or part-time job, student organization or class group, sports team, or whatever. If you do not have an experience of the type described, try to imagine yourself in one; think about how you would expect yourself to behave.

1. You needed to get a peer to do something you wanted that person to do but were worried he or she didn't want to do it.

2. You needed to get a subordinate to do something you wanted her or him to do but were worried the subordinate didn't want to do it.

3. You needed to get your boss to do something you wanted him or her to do but were worried the boss didn't want to do it.

Instructions Form into groups as assigned by the instructor. Start with situation 1 and have all members of the group share their approaches. Determine what specific sources of power (see Chapter 13) were used. Note any patterns in group members' responses. Discuss what is required to be successful in this situation. Do the same for situations 2 and 3. Note any special differences in how situations 1, 2, and 3 should be or could be handled. Choose a spokesperson to share results in general class discussion.

Strategic Scenarios Preparation In today's turbulent environments, it is no longer safe to assume that an organization that was highly successful yesterday will continue to be so tomorrow-or that it will even be in existence.

Changing times exact the best from strategic planners. Think about the situations currently facing the following well-known organizations. Think, too, about the futures they may face.

McDonald's Apple Computer Yahoo.com L.L. Bean Delta Airlines National Public Radio Instructions Form into groups as assigned by your instructor. Choose one or more organizations from the prior list (as assigned) and answer for the organization the following questions: 1. What in the future might seriously threaten the success, perhaps the very existence, of this organization? (As a group develop at least three such future scenarios.)

2. Estimate the probability (0 to 100 percent) of each future scenario occurring.

3. Develop a strategy for each scenario that will enable the organization to successfully deal with it.

Thoroughly discuss these questions withinthe group and arrive at your best possible consensus answers. Be prepared to share and defend your answers in general class discussion.

Source: Suggested by an exercise in John F. Veiga and John N. Yanouzas, The Dynamics of Organization Theory: Gaining a Macro Perspective (St. Paul, MN: West, 1979), pp. 69-71.

The Case of the Contingency Workforce Preparation Part-time and contingency work is a rising percentage of the total employment in the United States. Go to the library and read about the current use of part-time and contingency workers in business and industry. Ideally, go to the Internet, enter a government database, and locate some current statistics on the size of the contingent labor force, the proportion that is self-employed and part-time, and the proportion of part-timers who are voluntary and involuntary.

Instructions In your assigned work group, pool the available information on the contingency workforce.

Discuss the information. Discuss one another's viewpoints on the subject as well as its personal and social implications. Be prepared to participate in a classroom “dialogue session” in which your group will be asked to role-play one of the following positions: a. Vice president for human resources of a large discount retailer hiring contingency workers. b. Owner of a local specialty music shop hiring contingency workers. c. Recent graduate of your college or university working as a contingency employee at the discount retailer in (a). d. Single parent with two children in elementary school, working as a contingency employee of the music shop in (b).

The question to be answered by the (a) and (b) groups is “What does the contingency workforce mean to me?” The question to be answered by the (c) and (d) groups is “What does being a contingency worker mean to me?”

The Future Workplace Instructions Form groups as assigned by the instructor. Brainstorm to develop a master list of the major characteristics you expect to find in the future workplace in the year 2020. Use this list as background for completing the following tasks: 1. Write a one-paragraph description of what the typical “Workplace 2020 manager's” workday will be like.

2. Draw a “picture” representing what the “Workplace 2020 organization” will look like.

Choose a spokesperson to share your results with the class as a whole and explain their implications for the class members.

The Great Management History Debate Preparation Consider the question “What is the best thing a manager can do to improve productivity in her or his work unit?”

Instructions The instructor will assign you, individually or in a group, to one of the following positions.

Complete the missing information as if you were the management theorist referred to. Be prepared to argue and defend your position before the class.

• • • •

Position A: “Mary Parker Follett offers the best insight into the question. Her advice would be to . . . ” (advice to be filled in by you or the group).

Position B: “Max Weber's ideal bureaucracy offers the best insight into the question. His advice would be to . . . ” (advice to be filled in by you or the group).

Position C: “Henri Fayol offers the best insight into the question. His advice would be to . . . ” (advice to be filled in by you or the group).

Position D: “The Hawthorne studies offer the best insight into the question. Elton Mayo's advice would be to . . . ” (advice to be filled in by you or the group).

The MBO Contract Listed below are performance objectives from an MBO contract for a plant manager. a. b. c. d. e. f. g. h.

To increase deliveries to 98% of all scheduled delivery dates To reduce waste and spoilage to 3% of all raw materials used To reduce lost time due to accidents to 100 work days/year To reduce operating cost to 10% below budget To install a quality-control system at a cost of less than $53,000 To improve production scheduling and increase machine utilization time to 95% capacity To complete a management development program this year To teach a community college course in human resource management

1. Study this MBO contract. In the margin write one of the following symbols to identify each objective as an improvement, maintenance, or personal development objective.

I =Improvement objective M =Maintenance objective P =Personal development objective 2. Assume that this MBO contract was actually developed and implemented under the following circumstances. After each statement, write “yes” if the statement reflects proper MBO procedures and write “no” if it reflects poor MBO procedures. a. The president drafted the 8 objectives and submitted them to Atkins for review. b. The president and Atkins thoroughly discussed the 8 objectives in proposal form before they were finalized. c. The president and Atkins scheduled a meeting in 6 months to review Atkins's progress on the objectives. d. The president didn't discuss the objectives with Atkins again until the scheduled meeting was held. e. The president told Atkins his annual raise would depend entirely on the extent to which these objectives were achieved.

3. Share and discuss your responses to parts 1 and 2 of the exercise with a nearby classmate.

Reconcile any differences of opinion by referring back to the chapter discussion of MBO. Await further class discussion.

The Network University Instructions Form into groups as assigned by the instructor. In the group do the following: 1. Discuss the concept of the network organization structure as described in the textbook.

2. Create a network organization structure for your college or university. Identify the “core staffing” and what will be outsourced. Identify how outsourcing will be managed.

3. Draw a diagram depicting your Network “U.” 4. Identify why Network “U” will be able to meet two major goals: (a) create high levels of student learning, (b) operate with cost efficiency.

5. Present and justify your design for Network “U” to the class.

Upward Appraisal Instructions Form into work groups as assigned by the instructor. The instructor will then leave the room. As a group, complete the following tasks: 1. Within each group create a master list of comments, problems, issues, and concerns about the course experience to data that members would like to communicate with the instructor.

2. Select one person from the group to act as spokesperson and give your feedback to the instructor when he or she returns to the classroom.

3. The spokespersons from each group should meet to decide how the room should be physically arranged (placement of tables, chairs, etc.) for the feedback session. This should allow the spokespersons and instructor to communicate while they are being observed by other class members.

4. While the spokespersons are meeting, members remaining in the groups should discuss what they expect to observe during the feedback session.

5. The classroom should be rearranged. The instructor should be invited in.

6. Spokespersons should deliver feedback to the instructor while observers make notes.

7. After the feedback session is complete, the instructor will call on observers for comments, ask the spokespersons for their reactions, and engage the class in general discussion about the exercise and its implications.

Source: Developed from Eugene Owens, “Upward Appraisal: An Exercise in Subordinate's Critique of Superior's Performance,” Exchange: The Organizational Behavior Teaching Journal, vol. 3 (1978), pp. 41-42.

What Would the Classics Say? Preparation Consider this situation: Six months into his new job, Bob, a laboratory worker, is performing just well enough to avoid being fired. When hired he was carefully selected and had the abilities required to do the job really well. At first Bob was enthusiastic about his new job, but now he isn't performing up to this high potential. Fran, his supervisor, is concerned and wonders what can be done to improve this situation.

Instructions Assume the identify of one of the following persons: Frederick Taylor, Henri Fayol, Max Weber, Abraham Maslow, Chris Argyris. Assume that as this person you have been asked by Fran for advice on the management situation just described. Answer these questions as you think your assumed identity would respond. Be prepared to share your answers in class and to defend them based on the text's discussion of this person's views.

1. As (your assumed identity), what are your basic beliefs about good management and organizational practices?

2. As (your assumed identity), what do you perceive may be wrong in this situation that would account for Bob's low performance?

3. As (your assumed identity), what could be done to improve Bob's future job performance?

Which Organizational Culture Fits You? Instructions Indicate which one of the following organizational cultures you feel most comfortable working in.

1. A culture that values talent, entrepreneurial activity, and performance over commitment; one that offers large financial rewards and individual recognition.

2. A culture that stresses loyalty, working for the good of the group, and getting to know the right people; one that believes in “generalists” and step-by-step career progress.

3. A culture that offers little job security; one that operates with a survival mentality, stresses that every individual can make a difference, and focuses attention on “turnaround” opportunities.

4. A culture that values long-term relationships; one that emphasizes systematic career development, regular training, and advancement based on gaining functional expertise.< Interpretation These labels identify the four different cultures: 1=“the baseball team,” 2=“the club,” 3=“the fortress,” and 4=“the academy.”

Discuss results in work groups assigned by your instructor. To some extent, your future career success may depend on working for an organization in which there is a good fit between you and the prevailing corporate culture. This exercise can help you learn how to recognize various cultures, evaluate how well they can serve your needs, and recognize how they may change with time. A risk taker, for example, may be out of place in a “club” but fit right in with a “baseball team.” Someone who wants to seek opportunities wherever they may occur may be out of place in an “academy” but fit right in with a “fortress.”

Source: Developed from Carol Hymowitz, “Which Corporate Culture Fits You?” Wall Street Journal (July 17, 1989), p. B1.

Why Do We Work?

Preparation Read the following “ancient story.”

In days of old a wandering youth happened upon a group of men working in a quarry. Stopping by the first man, he said, “What are you doing?” The worker grimaced and groaned as he replied, “I am trying to shape this stone, and it is backbreaking work.” Moving to the next man, he repeated the question. This man showed little emotion as he answered, “I am shaping a stone for a building.” Moving to the third man, our traveler heard him singing as he worked. “What are you doing?” asked the youth. “I am helping to build a cathedral,” the man proudly replied.

Instructions In groups assigned by your instructor, discuss this short story. Ask and answer the question: “What are the lessons of this ancient story for (a) workers and (b) managers of today?” Ask members of the group to role-play each of the stonecutters, respectively, while they answer a second question asked by the youth: “Why are you working?” Have someone in the group be prepared to report and share the group's responses with the class as a whole.

Source: Developed from Brian Dumaine, “Why Do We Work,” Fortune (December 26, 1994), pp. 196-204.

Work Team Dynamics Preparation Think about your course work group, a work group you are involved in for another course, or any other group suggested by the instructor. Indicate how often each of the following statements accurately reflects your experience in the group. Use this scale: 1=Always 2=Frequently 3=Sometimes 4=Never ___ 1. My ideas get a fair hearing. ___ 2. I am encouraged to give innovative ideas and take risks. ___ 3. Diverse opinions within the group are encouraged. ___ 4. I have all the responsibility I want. ___ 5. There is a lot of favoritism shown in the group. ___ 6. Members trust one another to do their assigned work. ___ 7. The group sets high standards of performance excellence. ___ 8. People share and change jobs a lot in the group. ___ 9. You can make mistakes and learn from them in this group. ___ 10. This group has good operating rules.

Instructions Form groups as assigned by your instructor. Ideally, this will be the group you have just rated.

Have all group members share their ratings, and make one master rating for the group as a whole.

Circle the items over which there are the biggest differences of opinion. Discuss those items and try to find out why they exist. In general, the better a group scores on this instrument, the higher its creative potential. If everyone has rated the same group, make a list of the five most important things members can do to improve its operations in the future. Nominate a spokesperson to summarize the group discussion for the class as a whole.

Source: Adapted from William Dyer, Team Building, 2nd ed. (Reading, MA: Addison-Wesley, 1987), pp. 123-125.

Work vs. Family -You Be the Judge 1. Read the following situation.

Joanna, a single parent, was hired to work 8:15 a.m. to 5:30 p.m. weekdays selling computers for a firm. Her employer extended her workday until 10 p.m. weekdays and from 8:15 a.m.-5:30 p.m. on Saturdays. Joanna refused to work the extra hours, saying that she had a six-year old son and that so many work hours would lead to neglect. The employer said this was a special request during a difficult period and that all employees needed to share in helping out during the “crunch.” Still refusing to work the extra hours, Joanna was fired. She sued the employer.

2. You be the judge in this case. Take an individual position on the following questions: Should Joanna be allowed to work only the hours agreed to when she was hired? Or is the employer correct in asking all employees, regardless of family status, to work the extra hours? Why? 3. Form into groups as assigned by the instructor. Share your responses to the questions and try to develop a group consensus. Be sure to have a rationale for the position the group adopts. Appoint a spokesperson who can share results with the class. Be prepared to participate in open class discussion.

Source: This case scenario is from Sue Shellenbarger, “Employees Challenge Policies on Family and Get Hard Lessons,” Wall Street Journal (December 17, 1997), p. B1.