Chapter 1 (18 Files Merged)

Managing and
Performing
Chapter One
Quote
Ma age e t means, in the last analysis, the

substitution of thought for brawn and muscle, of
knowledge for folklore and tradition, and of
cooperation for for e.
Peter Drucker
Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 2
Learning Objectives
LO 1 Summarize the major challenges of managing in the
new competitive landscape.
LO 2 Describe the sources of competitive advantage for a
company.
LO 3 Explain how the functions of management are
e ol i g i toda s usi ess e iro e t.
LO 4 Compare how the nature of management varies at
different organizational levels.
LO 5 Define the skills you need to be an effective
manager.
LO 6 Discuss the principles that will help you manage
your career.
Managing in the New Competitive
Environment
Globalization
Technological Changes
Knowledge Management
Collaboration Across Borders

Globalization
Toda s enterprises are global, with offices and
production facilities in countries all over the
world.
This means that a o pa s tale t a o e
from anywhere.
Technological Change: The Internet
The Internet provides a:
Marketplace.
Means for manufacturing goods and services.
Distribution channel. Online delivery
An information service.
Technological Change: The Internet
Drives down costs and speeds up
globalization.
Improves efficiency of decision making.
Facilitates design of new products.
Knowledge Management
Knowledge management
Finding, unlocking, sharing, and altogether capitalizing
on the most precious resources of an organization:
Peoples e pertise.
Skills.
Wisdom.
Relationships.
Knowledge workers
Workers whose primary contributions are ideas and
problem-solving expertise.
Collaboration across Boundaries
Requires productive Companies must
communications among motivate and capitalize
different departments, on the ideas of people
divisions, or other outside the organization
subunits of the e.g. its consultants, ad
organization. agencies, and suppliers.
Companies must realize that the need to serve the

customer drives everything else.
Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education
9
Staying Ahead of the Competition
Innovation Quality Service
Cost
Speed Competitiveness Sustainability
Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 10/39
Question
___________ is the fast and timely execution,
response, and delivery of results.
A. Innovation
B. Quality
C. Speed
D. Service
Managing for Competitive Advantage
Innovation
The introduction of new goods and services.
A firm must:
Adapt to changes in consumer demands and to
new competitors.
Be ready with new ways to communicate with
customers and deliver the products to them.
Quality
The excellence of your

product (goods or
services).
13
Quality
Historically, quality referred to attractiveness,
lack of defects, reliability, and long-term
dependability.
Today quality is about preventing defects

before they occur, achieving zero defects in
manufacturing, and designing products for
quality.
Service
Giving customers what they want or need, when
they want it.
Continually meeting the needs of customers to
establish mutually beneficial long-term
relationships.
Speed
Fast and timely execution, response, and delivery
of results.
Cost competitiveness
Keeping costs low to achieve profits and be able to
offer prices that are attractive to consumers.
Sustainability
Minimizing the use of resources, especially those
that are polluting and nonrenewable.
Social Enterprise
Global Business Leaders Push for
Zero CO2 Emissions
Sir Richard Branson, CEO of Virgin, and other
leaders of multinational companies are
encouraging world government officials to set
the goal of reaching net zero CO2 and other
greenhouse gas (GHG) emissions by 2050.
Social Enterprise Questions
Global Business Leaders Push for
Zero CO2 Emissions
To what degree do you agree or disagree with
the B-Tea s goal to reach net zero CO2
emissions by 2050?
Should governments of developing economies
like China and Brazil be held to the same goals
for the reduction of greenhouse gas (GHG)
emissions as the governments of developed
nations?
The Functions of Management
Management
The process of working with people and resources
to accomplish organizational goals.
Efficiently, effectively.
Question
____________ is monitoring performance and
making needed changes.
A. Planning
B. Organizing
C. Leading
D. Controlling
Planning Organizing
Leading Controlling
Planning
Systematically making decisions
about the goals and activities that
will be pursued.
Organizing
Assembling and coordinating the
resources needed to achieve goals.
22
Leading
Stimulating people to be high
performers.
Controlling
Monitoring performance and making
needed changes.
23
Performing All Four Management
Functions
A typical day for a manager is not neatly
divided into the four functions.
Days are busy and fractionated, and spent
dealing with interruptions, meetings, and
firefighting.
Good managers devote adequate attention
and resources to all four management
functions.
Management Levels
Top-Level
Managers
Middle-Level
Managers
Frontline
Managers
25
Management Levels
Top-level managers - CEO / Director / GM
Senior executives responsible for the overall
management and effectiveness of the organization.
Middle-level managers - Engineers / Executives
Managers located in the middle layers of the
organizational hierarchy, reporting to top-level
executives.
Frontline managers - Clerk / Technicians
Lower-level managers who supervise the operational
activities of the organization.
Transformation of Management
Roles and Activities Exhibit 1.2
Roles of Management
Informational
Monitor, Disseminator, Spokesperson.
Decisional
Entrepreneur, Disturbance handler,
Resource allocator, Negotiator.
Interpersonal
Leader, Liaison, Figurehead.
28
Question
Which management skill is the ability to lead,
motivate, and communicate effectively with
others?
A. Technical
B. Conceptual
C. Decision
D. Interpersonal
Management Skills
Technical
Conceptual
Interpersonal
Management Skills
Technical skill
The ability to
perform a specialized
task involving a
particular method or
process.
31
Management Skills
Conceptual and Interpersonal and

decision skills communication skills
Skills pertaining to the People skills; the ability
ability to identify and to lead, motivate, and
resolve problems. communicate.
32
You and Your Career
Emotional intelligence
The skills of understanding yourself, managing
yourself, and dealing effectively with others.
Social capital
Goodwill stemming from your social relationships.
You and Your Career
Be both a specialist and a generalist.
Be self-reliant.
Connect.
Actively manage your relationship with your
organization.
Survive and thrive.
34
Two Relationships:
Which Will You Choose?
Exhibit 1.5
35
Exhibit 1.6
Opportunity to Contribute
Managerial Action Is Your
36
Common Practices of Successful
Executives
The ask What eeds to e do e? ot just What
do I a t to do?
The rite a a tio pla . The do t just thi k, the

do, based on a sound, ethical plan.
They take responsibility for decisions.
They focus on opportunities rather than problems.
37
Management in Action - Onward
Working for Bezos at Amazon
To succeed, Amazon managers have to get
used to defining problems in terms of
customer needs and benefits.
Amazon managers must appreciate the
o pa s lo -price strategy.
Innovation is a constant at Amazon.
Management in Action - Questions
Working for Bezos at Amazon
As an early career employee at Amazon, what
steps could you take to get noticed and
position yourself for eventual promotion to
frontline manager?
How could you manage your career to be a
successful middle manager at Amazon?
The External
and Internal
Environments
Chapter Two
Quote
The essence of a business is outside itself.
Peter Drucker
2
Learning Objectives
LO 1 Describe how environmental forces influence
organizations and how organizations can
influence their environments.
LO 2 Distinguish between the macroenvironment and
the competitive environment.
LO 3 Explain why managers and organizations should
attend to economic and social developments.
LO 4 Identify elements of the competitive
environment.
3
Learning Objectives (cont.)
LO 5 Summarize how organizations respond to
environmental uncertainty.
LO 6 Define ele e ts of a orga izatio s culture.
LO 7 Discuss ho a orga izatio s ulture and climate
affects its response to its external environment.
4
Open Systems
Inputs- Goods and

services organizations
take in and use to create
Organizations that products or services.
are affected by,
and that affect,
their environment. Outputs- The products
and services
organizations create.
5
Open-System Perspective of an
Organization
Exhibit 2.1
6
Open Systems
External environment
All rele a t for es outside a fir s ou daries, su h as
competitors, customers, the government, and the
economy.
Competitive environment
The immediate environment surrounding a firm;
includes suppliers, customers, rivals, and the like.
Macroenvironment
The general environment; includes governments,
economic conditions, and other fundamental factors
that generally affect all organizations.
7
The External and Internal Environments
Exhibit 2.2
8
The Economy
The economic Interest and inflation

environment rates affect the
dramatically affects availability and cost of
a agers a ility to capital, growth
function effectively opportunities, prices,
and influences their costs, and consumer
strategic choices. demand for products.
9
Percent Change in Nonfarm Payroll
Employment since Start of Each Recession
Exhibit 2.3
10
The Economy
In publicly held
Managers may focus
companies, managers
on short-term results
may feel required to
at the expense of long-
eet Wall Streets
term success.
earnings expectations.
Some managers may be

tempted to engage in
unethical or unlawful
behavior that misleads
investors.
11
Technology
Technological advances create new products,
advanced production techniques, and better
ways of managing and communicating.
As technology evolves, new industries,
markets, and competitive niches develop.
12
Laws and Regulations
Regulators include agencies such as:
Occupational Safety and Health

Administration (OSHA).
Interstate Commerce Commission (ICC).
Federal Aviation Administration (FAA).
Equal Employment Opportunity Commission
(EEOC).
National Labor Relations Board (NLRB).
13
Demographics
Demographics
Measures of various characteristics of the people
who make up groups or other social units.
Trends
Growth of the labor force.
Increasing education and skill levels.
Immigration.
Increased numbers of women in the workforce.
Increasingly diverse workforce.
14
Social Issues
Societal trends regarding how people think and
behave have major implications for management of
the labor force, corporate social actions, and
strategic decisions about products and markets.
Family leave, domestic partner benefits, flexible

working hours, and child care assistance.
15
Social Enterprise
Terracycle Wants to Eliminate All Waste
Tom Szaky, founder and CEO of Terracycle, is
o a issio to fi d aste a d tur it i to
so ethi g useful, at a profit.
Since its founding in 2001 as a college
dormitory room start up, Terracycle has
prevented 2.5 billion pieces of waste from
entering landfills.
16
Terracycle Wants to Eliminate All Waste
To what extent do you agree with Szaky that
organizations can be profitable while making a
positive impact on the environment and
society?
Can you envision a world that doesn't produce
waste? If so, what changes would need to be
made before that could happen?
17
The Competitive Environment
Exhibit 2.5
18
Competitors
There are many

direct
competitors.
Competition is
Industry growth
most intense is slow.
when:
Product/service
is not easily
differentiated.
19
New Entrants
Conditions that prevent new

companies from entering an
industry.
Barriers to Government policy, capital
entry requirements, brand
identification, cost
disadvantages, and
distribution channels.
20
Substitutes and Complements
Substitutes -alternative Complements-
products or services. products or services
that increase purchases
Exhibit 2.6
of other products.
21
Question
____________ costs are fixed costs buyer face if
they change suppliers.
A. Exchange
B. Lever
C. Switching
D. Transfer
22
Suppliers
Suppliers
Provide resources or inputs needed for
production.
Switching costs
Fixed costs buyer face if they change suppliers.
Supply chain management
Managing the acquisition of materials, their
transformation into products, and the distribution
of products to customers.
23
Environmental Uncertainty
Environmental uncertainty
Lack of information needed to understand or predict the
future.
Environmental complexity
The number of issues that must be attended to as well as
the interconnectedness of these issues.
Environmental dynamism
The degree of discontinuous change that occurs within an
industry.
24
Environmental Analysis
Environmental Competitive
scanning intelligence
Searching for Information that helps
information that is managers determine
unavailable to most, how to compete
sorting that better.
information and
interpreting what is
important.
25
Scenario development
A narrative that describes a set of future
conditions.
Best-case, worst-case.
Forecasting
Method for predicting how variables will change
the future.
26
Question
What is the process of comparing an
orga izatio s pra ti es a d te h ologies ith
those of other companies?
A. Comparative technology
B. Benchmarking
C. Process synchronization
D. Process asynchronization
27
Benchmarking
The process of comparing
a orga izatio s
practices and
technologies with those
of other companies.
28
Changing the Environment
You are In
Strategic maneuvering
A orga izatio s o s ious efforts to ha ge the
boundaries of its task environment.
Domain selection
Entrance to a new market or industry with an
existing expertise.
Diversification
Occurs when a firm invests in a different product,
business, or geographic area.
29
You are In
Mergers
One or more companies combine with
another.
Acquisitions
One firm buys another.
Divestiture
A firm sells one or more businesses.
30
You are In
Prospectors
Continuously change the boundaries of their
task environment by seeking new products
and markets, diversifying and merging, or
acquiring new enterprises.
Defenders
Stay within a stable product domain
as a strategic maneuver.
31
Influencing Your Environment
Independent Cooperative
strategies strategies
Strategies that an Strategies used by
organization acting two or more
on its own uses to organizations
change some aspect working together to
of its current manage the external
environment. environment.
32
Independent Action
Exhibit 2.8
33
Cooperative Action
Exhibit 2.10
34
Adapting to the Environment
Buffering
Creating supplies of excess resources in case of
unpredictable needs.
Smoothing
Leveling normal fluctuations at the boundaries of
the environment.
35
Organization Culture
The set of In strong cultures, the

important majority of people within
assumptions the organization agree on
about the organizational goals.
organization
and its goals
and practices In weak cultures, different
that members people hold different
of the company values and there is
share. confusion about corporate
goals.
36
Competing Values Model
of Culture
Exhibit 2.13
37
Can Mark Zuckerberg Help Facebook Reach the
Next Level?
During a recent Facebooksponsored conference for
developers, Mark Zuckerberg made it clear that
Facebook will be producing tools for developers to
grow and make more revenue from their apps on the
social networking site.
I tur , this goal ill ake users happier a d
marketers smarter, so business owners will be able to
ore easily rea h large audie es.
38
Can Mark Zuckerberg Help Facebook Reach the
Next Level?
How well do you think Facebook has been
responding to its fast-changing environment?
Identify risks it is taking that could negatively
impact its future growth.
How a Mark Zu ker erg stre gthe Fa e ooks
culture to help the company fulfill its mission?
39
Managerial
Decision
Making
Chapter Three
1
Copyright 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Quote
The usi ess e e uti e is professio a

decision maker. Uncertainty is his opponent.
O er o i g it is his issio .
John McDonald
2
Learning Objectives
LO1 Describe the kinds of decisions you will face as
a manager.
LO2 Su arize the steps i aki g ratio al
decisions.
LO3 Recognize the pitfalls you should avoid when
making decisions.
LO4 Evaluate the pros and cons of using a group to
make decisions.
3
LO5 Identify procedures to use in leading a
decision-making group.
LO6 Explain how to encourage creative decisions.
LO7 Discuss the process by which decisions are
made in organizations.
LO8 Describe how to make decisions in a crisis.
4
Characteristics of
Managerial Decisions
Exhibit 3.1
5
Lack of Structure
Programmed decisions
Decisions encountered and made before, having
objectively correct answers, and solvable by using
simple rules, policies, or numerical computations.
Nonprogrammed decisions
New, novel, complex decisions having no proven
answers.
6
Comparison of Types of Decisions
Exhibit 3.2
7
Uncertainty and Risk
Certainty Uncertainty
The state that exists when The state that exists when
decision makers have decision makers have
accurate and comprehensive insufficient information.
information.
Risk
The state that exists when the probability of
success is less than 100 percent and losses may
occur.
8
Conflict
Conflict
Opposing pressures
from different
sources, occurring on
the level of
psychological conflict
or of conflict
between individuals
or groups.
9
Two Levels of Conflict
1. Individual decision makers experience
psychological conflict when several options
are attractive, or when none of the options is
attractive.
2. Conflict arises between people.
10
The Phases of Decision Making
Identifying and Diagnosing the Problem
Generating Alternative Solutions
Evaluating Alternatives
Making the Choice
Implementing the Decision
Evaluating the Decision

11
Identifying and Diagnosing
the Problem
Typically, a manager realizes some discrepancy
between the current state (the way things are)
and a desired state.
Discrepancies may be detected by comparing

current performance against:
Past performance.
The current performance of other organizations.
Future expected performance as determined by
plans and forecasts.
12
Generating Alternative Solutions
Ready-made solutions
Ideas that have been seen or tried before.
Custom-made solutions
New, creative solutions designed specifically

for the problem.
13
Evaluating Alternatives
Involves determining the value or

Evaluating adequacy of the alternatives that were
alternatives generated.
Which solution will be the best?
Alternative courses of action that can

Contingency
be implemented based on how the
plans future unfolds.
14
Question
___________ is achieving the best possible
balance among several goals.
A. Maximizing
B. Satisficing
C. Optimizing
D. Minimizing
15
Making the Choice
A decision realizing the best

Maximizing possible outcome.
Achieving the best possible balance

Optimizing among several goals.
Choosing an option that is

Satisficing acceptable, although not
necessarily the best or perfect.
16
Social Enterprise
Saul Garli ks So ial Enterprise
While still in high school, Saul Garlick founded
a nonprofit to fight poverty in Africa by
encouraging entrepreneurship.
He later decided he could best do the work of
his non-profit o erti g it to a forprofit
social enterprise, ThinkImpact.
17
Saul Garli ks So ial E terprise
What are the advantages and disadvantages
of market-based solutions to problems in
developing countries?
Would you consider attending a ThinkImpact
learning program in an international location?
Why or why not?
18
Determine how things will look when the decision is fully
operational.
Chronologically order the steps necessary to achieve a
fully operational decision.
List the resources and activities required to implement
each step.
Estimate the time needed for each step.
Assign responsibility for each step to specific individuals.
19
What problems could this action cause?
What can we do to prevent the problems?
What unintended benefits or opportunities
could arise?
How can we make sure they happen?
How can we be ready to act when the
opportunities come?
20
Evaluating the Decision
Feedback that Negative feedback

suggests the decision means that either the
is working implies implementation will
that the decision require more
should be continued resources or the
and applied decision was a bad
elsewhere in the one.
organization.
21
Question
___________ is the process in which a decision
maker carefully executes all stages of decision
making.
A. Innovation
B. Quality
C. Satisficing
D. Vigilance
22
The Best Decision
Vigilance
A process in which a
decision maker
carefully executes all
stages of decision
making.
23
Barriers to Decision Making
Psychological biases
Time pressure
Social realities
24
Psychological Biases
Illusion of control
Peoples elief that the a i flue e e e ts, e e
when they have no control over what will happen.
Framing effects
A decision bias influenced by the way in which a
problem or decision alternative is phrased or
presented.
Discounting the future
A bias weighting short-term costs and benefits more
heavily than longer-term costs and benefits.
25
Pros and Cons of Using a
Group to Make Decisions
Exhibit 3.7
26
Potential Problems of
Using a Group
Groupthink Goal displacement
Occurs when people A condition that
choose not to occurs when a
disagree or raise decision-making
objections because group loses sight of
the do t a t to its original goal and a
break up a positive new, less important
team spirit. goal emerges.
27
Managing Group Decision Making
Exhibit 3.8
28
Constructive Conflict
Cognitive conflict Affective conflict
Issue-based Emotional
differences in disagreement
perspectives or directed toward
judgments. other people.
29
Constructive Conflict
Devils advocate Dialectic
A person who has A structured debate
the job of criticizing comparing two
ideas to ensure that conflicting courses of
their downsides are action.
fully explored.
30
Encouraging Creativity
Exhibit 3.9
31
Brainstorming
Brainstorming
A process in which group members generate as
many ideas about a problem as they can; criticism
is withheld until all ideas have been proposed.
32
Models of Organizational
Decision Processes
Bounded rationality
A less-than-perfect form of rationality in which
decision makers cannot be perfectly rational
because decisions are complex and complete
information is unavailable or cannot be fully
processed.
Incremental model
Model of organizational decision making in which
major solutions arise through a series of smaller
decisions.
33
Models of Organizational
Decision Processes
Coalitional model Garbage can model
Model of decision Model of organizational
making in which groups decision making
with differing depicting a chaotic
preferences use power process and seemingly
and negotiation to random decisions.
influence decisions.
34
Two Disasters
Exhibit 3.11
35
Decision Making in a Crisis
What kinds of crises could your company
face?
Can your company detect a crisis in its early
stages?
How will it manage a crisis if one occurs?
How can it benefit from a crisis after it has
passed?
36
Elements of a Crisis Plan
Strategic actions
Technical and structural actions
Evaluation and diagnostic actions
Communication actions
Psychological and cultural actions
37
Boeing Contends With A Crisis
The Boeing 787 Dreamliner was designed
using innovative electrical systems.
Shortly after introduction, two 787s caught
fire, one in flight.
All 787s were grounded by the Federal
Aviation Administration (FAA), and the
Japanese and the U.S. governments launched
investigations.
38
Boeing Contends With A Crisis
Co pare Boei gs de isio aki g duri g a
crisis (the battery fire) with its process of
deciding to make the Dreamliner. How does a
crisis make the process harder?
What principles of group decision making
could help Boeing make decisions during this
crisis?
39
Planning and
Strategic
Management
Chapter Four
1
Quote
Manage your destiny, or someone else will.
Jack Welsh
2
Learning Objectives
LO1 Summarize the basic steps in any planning
process.
LO2 Describe how strategic planning should be
integrated with tactical and operational
planning.
LO3 Identify elements of the external environment
and internal resources of the firm to analyze
before formulating a strategy.
3
LO4 Define core capabilities and explain why they
provide the foundation for business strategy.
LO5 Summarize the types and choices available for
corporate strategy.
LO6 Discuss how companies can achieve
competitive advantage through business
strategy.
LO7 Describe the keys to effective strategy
implementation.
4
Decision Making Stages and
Formal Planning Steps
Exhibit 4.1
5
Planning
Conscious, systematic process of making
decisions about goals and activities that an
individual, group, work unit, or organization
will pursue in the future.
6
The Basic Planning Process
Step 1 Situational Analysis
Step 2 Alternative Goals and Plans
Step 3 Goal and Plan Evaluation
Step 4 Goal and Plan Selection
Step 5 Implementation
7
Situational Analysis
A process planners use, within time and
resource constraints, to gather, interpret, and
summarize all information relevant to the
planning issue under consideration.
8
Alternative Goals and Plans
Should stress creativity and encourage
managers and employees to think in broad
terms about their jobs.
Goal
A target or end that management desires to
reach.
SMART goals are effective:
Specific, measurable, attainable, relevant, time-bound.
9
Question
___________ are the actions or means
managers intend to use to achieve
organizational goals.
A. Missions
B. Plans
C. Strategies
D. Services
10
Alternative Goals and Plans
Plans
The actions or means managers intend to use to
achieve organizational goals.
Contingency plans
Actions to be taken when the initial plans have not
worked well or events in the external environment
require a change.
11
Goal and Plan Evaluation
Managers evaluate the advantages, disadvantages,

and potential effects of each alternative goal and
plan.
Managers prioritize those goals and even eliminate

some of them.
Managers must consider carefully the implications

of alternative plans for meeting high priority goals.
12
Goal and Plan Selection
Managers will The evaluation Scenarios may

select the process will be used to
option that is identify the describe a
most priorities and particular set of
appropriate and trade-offs future
feasible. among the conditions.
goals and plans.
13
Implementation
Successful
Managers and
implementation
employees must
requires a plan to
understand the
be linked to other
plan, and have the
systems in the
resources and
organization (e.g.,
motivation to
budget and reward
implement it.
systems).
14
Monitor and Control
Managers must:
Continually monitor the actual performance of
their ork u its agai st the u its goals a d pla s.
Develop control systems to measure that
performance and allow them to take corrective
action when the plans are implemented
improperly or when the situation changes.
15
Social Enterprise
Novo Nordisk Monitors Progress Regarding its
Triple Bottom Line (TBL)
Novo Nordisk, follows a TBL strategy meaning
de isio s are ased o the elief that a
healthy economy, environment, and society
are fundamental to long-term business
su ess.
To ensure that the TBL philosophy would stick,
Novo Nordisk took the uncommon step of
incorporating it into their company bylaws.
16
Novo Nordisk Monitors Progress Regarding its
Triple Bottom Line (TBL)
Why do you think so few companies have
incorporated TBL reporting into their bylaws?
Assume you want your employer to consider
adopting a TBL philosophy. How would you
pitch the idea?
17
Strategic Planning
Strategy - A pattern of actions and resource
allo atio s desig ed to a hie e the orga izatio s
goals.
Strategic planning- Set Strategic goals- Major

of procedures for targets or end results
making decisions about that relate to the long-
the orga izatio s lo g- term survival, value,
term goals and and growth of the
strategies. organization.
18
Effective Strategies Answer Five
Questions
Where will we be active?
How will we get there?
How will we win in the marketplace?
How fast will we move and in what sequence will we make

changes?
How will we obtain financial returns?
19
Hierarchy of Goals and Plans
Exhibit 4.4
20
Tactical and Operational Planning
Tactical planning
Set of procedures for translating broad strategic
plans into specific goals and plans that are
relevant to a distinct portion of the organization
(e.g., marketing department).
Operational planning
The process of identifying the specific procedures
and processes required at lower levels of the
organization.
21
The Strategy Map
Exhibit 4.5
22
Strategic Management
A process that involves managers from all parts of the
organization in the formulation and implementation of
strategic goals and strategies
Exhibit 4.6
23
Question
A orga izatio s __________ is the asi
purpose and scope of operations.
A. Mission
B. Strategy
C. Goal
D. Policy
24
Establishment of Mission, Vision,
and Goals
Mission
A orga izatio s asi purpose a d s ope of
operations.
Strategic vision
The long-term direction and strategic intent of a
company.
Provides a perspective on where the organization
is headed and what it can become.
25
Analysis of External Opportunities
and Threats
Stakeholders
Groups and
individuals who
affect and are
affected by the
achievement of the
orga izatio s
mission, goals, and
strategies.
26
Analysis of Strengths
and Weaknesses
Exhibit 4.8
Resources and Core Competencies
Exhibit 4.9
28
Analysis of Strengths and Weaknesses
Benchmarking
Pro ess of assessi g ho ell o e o pa ys
basic functions and skills compare with those of
another company or set of companies.
Goal of benchmarking is to thoroughly understand
the est pra ti es of other fir s a d to
undertake actions to achieve both better
performance and lower costs.
29
SWOT Analysis
A comparison of strengths, weaknesses,
opportunities, and threats that helps
executives formulate strategy.
30
Strategy Formulation
Corporate strategy
Set of businesses, markets, or industries in which
an organization competes and the distribution of
resources among those entities.
Concentration
A strategy employed for an organization that
operates a single business and competes in a
single industry.
31
Vertical integration
The acquisition or development of new businesses
that produce parts or components of the
orga izatio s produ t.
Concentric diversification
A strategy used to add new businesses that
produce related products or are involved in
related markets and activities.
32
Summary of Corporate Strategies
Exhibit 4.11
33
BCG Matrix
Exhibit 4.12
34
Low-cost strategy Differentiation
A strategy an strategy
organization uses to A strategy an to build
build competitive competitive
advantage by being advantage by being
efficient and offering unique in its industry
a standard, no-frills along one or more
product. dimensions.
35
Strategy Implementation
Define strategic risks.
Assess organization capabilities.
Develop an implementation agenda.
Create an implementation plan.
36
Strategic Control
Strategic control system
A system designed to support managers in
e aluati g the orga izatio s progress regardi g
its strategy and, when discrepancies exist, taking
corrective action.
37
Walt Dis ey Co pa ys Strategy
Under Robert Iger
Walt Dis ey Co pa ys issio state e t
o e as Make people happy.
The state e t has e ol ed to: to e o e of
the orlds leadi g produ ers a d pro iders of
entertainment and information, using its
portfolio of brands to differentiate its content,
ser i es a d o su er produ ts.
38
Walt Dis ey Co pa ys Strategy
Under Robert Iger
Ho lear is Walt Dis ey Co pa ys issio
and how well does its strategy support the
mission?
In the BCG matrix where would you place
Dis eys ai usi esses?
39
Ethics, Corporate
Responsibility,
and Sustainability
Chapter Five
1
.
Quote
It is truly e ough said that a orporatio has o

conscience; but a corporation of conscientious
men is a corporation with a conscience.
Henry David Thoreau
2
Learning Objectives
LO1 Describe how different ethical perspectives
guide decision making.
LO2 Explain how companies influence their
ethics environment.
LO3 Outline a process for making ethical
decisions.
LO4 Summarize the important issues
surrounding corporate social responsibility.
3
Learning Objectives
LO5 Dis uss reaso s for usi esses gro i g
interest in the natural environment.
LO6 Identify actions managers can take to
manage with the environment in mind.
4
Ethics
Ethics
The system of rules that governs the ordering of
values.
5
Telling the Truth and Lying:
Possible Outcomes
Exhibit 5.1
6
Its a Perso al Issue
Most of us think we are Managers often:
good decision makers, Hire people who are like
ethical, and unbiased. them.
Most people have Think they are immune
unconscious biases that to conflicts of interest.
favor themselves and Take more credit than
their own group. they deserve.
Blame others when
they deserve some
blame themselves.
7
Its a Perso al Issue
If the employer pays
for the computer and
the time you spend
sitting in front of it, is it
ethical for you to use
the computer to do
tasks unrelated to your
work?
8
Ethics
Ethical issue
Situation, problem, or opportunity in which an
individual must choose among several actions that
must be evaluated as morally right or wrong.
Business ethics
The moral principles and standards that guide
behavior in the world of business.
9
Ethical Systems
Moral philosophy
Principles, rules, and values people use in deciding
what is right or wrong.
Universalism
The ethical system stating that all people should
uphold certain values that society needs to
function.
10
Caux Principles
Caux Principles
Ethical principles
established by
international
executives based in
Caux, Switzerland, in
collaboration with
business leaders
from Japan, Europe,
and the United
States.
11
Caux Principles
Kyosei
Living and working together for the common
good, allowing cooperation to coexist with
healthy and fair competition.
Human dignity
Concerns the value of each person as an end,
ot a ea s to the fulfill e t of others
purposes.
12
Question
Which ethical system bases ethical behavior on
the opinions and behaviors of relevant other
people?
A. Egoism
B. Utilitarianism
C. Relativism
D. Virtue ethics
13
Ethical Systems
Egoism Utilitarianism
An ethical system An ethical system
defining acceptable stating that the
behavior as that greatest good for the
which maximizes greatest number
consequences for the should be the
individual. overriding concern.
14
Ethical Systems
Relativism
Philosophy that bases ethical behavior on the
opinions and behaviors of relevant other people.
Virtue ethics
Classification of people based on their level of
moral judgment.
15
Ethical Systems
Kohl e gs odel of og itive o al
development
Perspective that what is moral comes from what a
ature perso ith good oral hara ter ould
deem right.
16
Current Ethical Issues in
Business
Exhibit 5.3
Question
What act passed into law by Congress in 2002
established strict accounting and reporting
rules?
A. Wagner Act
B. Sarbanes-Oxley Act
C. Chapin Act
D. GAAP Act
18
The Ethics Environment
Sarbanes-Oxley Act
An act passed into law by Congress in 2002 to
establish strict accounting and reporting rules in
order to make senior managers more accountable
and to improve and maintain investor confidence.
19
Business Ethics
Ethical climate Ethical leader
In an organization, One who is both a
the processes by moral person and a
which decisions are moral manager
evaluated and made influencing others to
on the basis of right behave ethically.
and wrong.
20
Danger Signs
Excessive emphasis on short-term revenues over longer-term
considerations.
Failure to establish a written code of ethics.
A desire for simple, ui k fix solutio s to ethical problems.

An unwillingness to take an ethical stand that may impose
financial costs.
Consideration of ethics solely as a legal issue or a public
relations tool.
Lack of clear procedures for handling ethical problems.
Responding to the demands of shareholders at the expense of
other constituencies.
21
Ethics Programs
Compliance-based ethics programs
Company mechanisms typically designed by
corporate counsel to prevent, detect, and punish
legal violations.
Integrity-based ethics programs
Company mechanisms designed to instill in people
a personal responsibility for ethical behavior.
22
A Process for Ethical Decision Making
Exhibit 5.7
23
Ethical Decision Making
Making ethical decisions takes:
Moral awareness
realizing the issue has ethical implications.
Moral judgment
knowing what actions are morally defensible .
Moral character
the strength and persistence to act in accordance
with your ethics despite the challenges.
24
Courage
Behaving ethically requires not

just moral awareness and moral
judgment but also moral
character, including the courage
to take actions consistent with
your ethical decisions.
25
Corporate Social Responsibility
Corporate social
responsibility (CSR)
Obligation toward
society assumed by
business.
Triple bottom line.
26
Economic responsibilities
To produce goods and services that society wants at a
price that perpetuates the business and satisfies its
obligations to investors.
Legal responsibilities
To obey local, state, federal, and relevant
international laws.
Ethical responsibilities
Meeting other social expectations, not written as law.
27
Philanthropic
responsibilities
Additional behaviors
and activities that
society finds
desirable and that
the values of the
business support.
28
Pyramid of Global Corporate Social
Responsibility and Performance
Exhibit 5.8
29
Social Enterprise
Can a Former Yoga Instructor Clean Up the
Trucking Business?
As a tee , Caitli Wel y sa her fa ilys tru ki g
business as destroying the environment.
Rather than joining the business, she became a
yoga instructor and spent time traveling.
With no one else to step in, she became CEO of
the business at age 32.
Welby has set out to transform an industry that
she sees as convoluted, overly complicated and
inefficient.
30
Can a Former Yoga Instructor Clean Up the
Trucking Business?
How might Welby pivot her company so that it
can become more environmentally sustainable
while remaining profitable?
Will Wel ys a kgrou d help or hi der her
efforts to transform the trucking enterprise?
31
Transcendent education
An education with five higher goals that balance
self-interest with responsibility to others.
Empathy, generativity, mutuality, civil aspiration,
intolerance of ineffective humanity.
32
Contrasting Views
First - holds that managers act as agents for
shareholders and, as such, are obligated to
maximize the present value of the firm.
Second - managers should be motivated by
principled moral reasoning.
33
Reconciliation
Profit maximization and corporate social
responsibility used to be regarded as
antagonistic, leading to opposing policies. But
the two views can converge.
Recent attention has also been centered on
the possible competitive advantage of socially
responsible actions.
34
Ecocentric Management
Ecocentric management
Goal is the creation of sustainable economic
development and improvement of quality of life
worldwide for all organizational stakeholders.
35
Sustainable growth
Economic growth and development that

meet present needs without harming the
needs of future generations.
36
Life-cycle analysis
(LCA)
A process of analyzing all
inputs and outputs,
though the entire
radle-to-gra e life of a
product, to determine
total environmental
impact.
37
Management in Action- Onward
IBM Takes Responsibility
IBM understands that corporate citizenship
includes practices related to the natural
environment.
IBM has had policies for protecting the
environment and conserving resources since
1967.
Currently, their product recycling programs are
designed to resell, refurbish, or recycle at least 97
percent of its end-of-life products.
38
IBM Takes Responsibility
Ho is IBMs o it e t to orporate so ial
responsibility good for IBM as a business?
Improving energy efficiency saves IBM millions
of dollars, but recycling its used electronics
requires hiring hundreds of people. Is the
recycling program justifiable?
39
International
Management
Chapter Six
1
.
Quote
It was once said that the sun never set on the

British Empire. Today, the sun does set on the
British Empire, but not on the scores of global
empires, including those of IBM, Unilever,
Volkswagen, and Hitachi.
Lester Brown
2
Learning Objectives
LO1 Discuss what integration of the global
economy means for individual companies
and their managers.
LO2 Describe how the world economy is
becoming more integrated than ever
before.
LO3 Define the strategies organizations use to
compete in the global marketplace.
3
LO4 Compare the various entry modes
organizations use to enter overseas
markets.
LO5 Explain how companies can approach the
task of staffing overseas operations.
LO6 Summarize the skills and knowledge
managers need to manage globally.
LO7 Identify ways in which cultural differences
across countries influence management.
4
Implications of a Flat World
Expansion of international trade.
Foreign direct investment (FDI) is playing an ever-

increasing role in the global economy.
I ports are pe etrati g deeper i to the orlds

largest economies.
Companies are finding their home markets under

attack from foreign competitors.
5
Implications of a Flat World
(continued)
Opportunities are greater.
Environment is more complex and competitive.
6
U.S. Exports as a Share
of U.S. Output
Exhibit 6.1
7
Relative Growth in World Merchandise
Exports by Major Product Group
Exhibit 6.2
8
The Role of Outsourcing
Outsourcing
Contracting with an
outside provider to
produce one or more
of a orga izatio s
goods or services.
Offshoring
Moving work to
other countries.
9
Factors to Consider for Offshoring
What is the competitive advantage of the
products they offer?
Is the business in its early stages?
Can production savings be achieved locally?
Can the entire supply chain be improved?

10
The Global Environment
The global economy is Other developing

dominated by countries countries and regions
in three regions: North represent important
America, Western areas for economic
Europe, and Asia. growth.
11
Key Issues of the Global
Environment
Exhibit 6.4
12
European Unification
Certain structural
Europe is integrating
issues within Europe
economically to
need to be corrected
form the largest
for the EU to
market in the world.
function effectively.
13
Top U.S. Trading Partners
Based on Total Imports and Exports
Exhibit 6.5
14
Question
What economic pact that combined the
economies of the United States, Canada, and
Mexico?
A. HAFTA
B. NAFTA
C. EU
D. South American FTA
15
North American Free Trade Agreement
(NAFTA)
An economic pact that combined the
economies of the United States, Canada, and
Me i o i to o e of the orlds largest tradi g
blocs.
16
Social Enterprise
Student Social Entrepreneurs Compete
for $1 Million
The Hult Prize Foundation is a student
business competition and start-up accelerator
that awards $1 million to social entrepreneurs
from universities around the world.
The competition identifies and provides seed
fu di g to pro isi g start-up social
enterprises that tackle grave issues faced by
billions of people.
17
Student Social Entrepreneurs Compete
for $1 Million
Brainstorm five activities/ideas that you
ould pit h for i lusio i the
competition.
Is the o petitio the est use of the
$1 million dollar prize money?
18
Organizational Models
Exhibit 6.6
19
Choosing a Global Strategy
International model
Co posed of a o pa s o erseas su sidiaries a d
characterized by greater control by the parent
company over the research function and local
product and marketing strategies than in the
multinational model.
Multinational model
Consists of the subsidiaries in each country in which
a company does business and provides a great deal
of discretion to those subsidiaries to respond to
local conditions.
20
Global model
Co sists of a o pa s o erseas
subsidiaries and characterized by
centralized decision making and tight
control by the parent company over
most aspects of worldwide operations.
21
Characterized by centralizing certain
functions in locations that best
Transnational achieve cost economies.
model
Basing other functions in the
o pa s atio al su sidiaries to
facilitate greater local responsiveness.
Fosters communication among
subsidiaries to permit transfer of
technological expertise and skills.
22
Comparison of Entry Modes
Exhibit 6.8
23
Exporting
Advantages of exporting:
Provides scale economies by
avoiding the costs of
manufacturing in other
countries.
Consistent with a pure global
strategy.
24
Licensing / Franchising
International licensing Franchising
An arrangement by The company sells
which a licensee in limited rights to use its
another country buys brand name to
the rights to franchisees in return for
manufacture a a lump-sum payment
o pa s produ t i its and a share of the
own country for a fra hisees profits.
negotiated fee (typically,
royalty payments on the
number of units sold).
25
Joint Ventures
Joint ventures benefit a company through:
Lo al part ers k o ledge of the host
ou tr s o petiti e o ditio s, ulture,
language, political systems, and business
systems.
Sharing of development costs and/or risks
with the local partner.
26
Question
What is a foreign national brought in to work at
the parent company?
A. Expatriate
B. Non-patriate
C. Inpatriate
D. Unpatriate
27
Managing across Borders
Parent-company nationals who are sent to
Expatriates work at a foreign subsidiary.
Host-country Natives of the country where an overseas

nationals subsidiary is located.
Third-country Natives of a country other than the home or

nationals the host country of an overseas subsidiary.
Foreign nationals brought in to work at the

Inpatriates parent company.
28
Stressors and Coping Responses in
the Developmental Stages of
Expatriate Executives
Exhibit 6.9
29
Skills of the Global Manager
15% of all employee transfers are to
international locations.
Failure rate ranges from 20%-70%.
Failure rate:
the number of expatriate managers of an overseas
operation who come home early.
communication is key to reducing the failure rate.
30
Identifying International Executives
Exhibit 6.10
31
How to Prevent Failed
Global Assignments
Develop
Structure Create clear job performance
assignments clearly. objectives. measurements
based on objectives.
Use effective,
Prepare expatriates Create a vehicle for
validated selection
and families for ongoing
and screening
assignments. communication.
criteria.
Anticipate
Consider developing
repatriation to
a mentor program.
facilitate reentry.
32
Understanding Cultural Issues
Ethnocentrism
The tendency to judge others by the standards of
o es group or ulture, hi h are see as superior.
Culture shock
The disorientation and stress associated with
being in a foreign environment.
33
Power distance Uncertainty avoidance
the extent to which a the extent to which people
society accepts the fact that in a society feel threatened
power in organizations is by uncertain and
distributed unequally. ambiguous situations.
Individualism/ Masculinity/femininity
collectivism the extent to which a
the extent to which people society values quantity of
act on their own or as a life over quality of life.
part of a group.
34
Positions of 40 Countries on the Power
Distance and Individualism Scales
Exhibit 6.12
Americans tend to have specific

views about the purpose of
meetings and how much time can
be spent.
Individuals from other cultures may

have different ideas about the
nature and length of meetings;
managers should make sure foreign
nationals are comfortable with the
American approach or adjustments
may be required.
36
Workers from other countries can work long hours
but, in countries with strong labor organizations,
often get many more weeks of vacation than
American workers.
Europeans in particular may balk at working on

weekends.
37
Managing Lenovo Across National Boundaries
Lenovo CEO Yang is patient in building the
o pa s ra d i the United States.
Yang intends to use the o pa s reputation
as the maker of business computers as the
basis for selling high-end PCs to consumers.
He said recent prototypes have been exciting,
but the final versions suffered from
compromises made to lower costs.
38
Managing Lenovo Across National Boundaries
What advantages does Lenovo have from its
choice of entry modes?
What cultural issues should an American-born
manager at Lenovo be prepared to handle?
39
Entrepreneurship
Chapter Seven
Quote
A man is known by the company he orga izes.
Ambrose Bierce
2
Learning Objectives
LO1 Describe why people become entrepreneurs and what
it takes, personally.
LO2 Summarize how to assess opportunities to start a new
company.
LO3 Identify common causes of success and failure.
LO4 Discuss common management challenges.
LO5 Explain how to increase your chances of success,
including good business planning.
LO6 Describe how managers of large companies can foster
entrepreneurship.
3
Entrepreneurship
The pursuit of lucrative opportunities by
enterprising individuals.
Discovering, evaluating, and capitalizing on
opportunities to create new and future goods
and services.
4
Entrepreneurship
A business having fewer than

100 employees, independently
Small business owned and operated, not
dominant in its field, and not
characterized by innovative
practices.
Entrepreneurial A new business having growth

venture and high profitability as primary
objectives.
5
Some Myths About Entrepreneurship
Entrepreneurs
are born, not Anyone can start Entrepreneurs
made. a business. are gamblers.
Entrepreneurs Entrepreneurs
Entrepreneurs
are their own work longer and
want the whole
bosses and harder than
show to
completely managers in big
themselves.
independent. companies.
6
Some Myths About Entrepreneurship
Continued
Entrepreneurs If an entrepreneur is
experience a great deal talented, success will
of stress and pay a high happen in a year or
price. two.
Unless you attained

Entrepreneurs are lone 600+ on your SATs or
wolves and cannot work GMATs, youll e er e
with others. a successful
entrepreneur.
7
Entrepreneurship
Entrepreneur
Individuals who establish a
new organization without
corporate sponsorship.
Intrapreneurs
New-venture creators
working inside big
companies.
8
Mega-Entrepreneurs Who
Started in Their 20s
Exhibit 7.2
9
Who is The Entrepreneur?
Exhibit 7.3
10
The Idea
A great product, a
viable market, and
good timing are
essential ingredients
in any recipe for
success.
11
Opportunities Entrepreneurs Should
Consider
Technological Demographic Lifestyle and

discoveries changes taste changes
Government
Economic
Calamities initiatives and
dislocations
rule changes
12
What Business Should You Start?
Franchising
An entrepreneurial alliance between a franchisor
(an innovator who has created at least one
successful store and wants to grow) and a
franchisee (a partner who manages a new store of
the same type in a new location).
13
Question
Which Internet model charges fees to advertise
on a site?
A. Transaction fee model
B. Subscription model
C. Advertising support model
D. Affiliate model
14
The Internet
Transaction fee model

Charging fees for goods and services.
Subscription model
Charging fees for site visits.
Advertising support model

Charging fees to advertise on a site.
15
The Internet
Intermediary model
Charging fees to bring buyers and sellers
together.
Affiliate model
Charging fees to direct site visitors to other
o pa ies sites.
16
Social Entrepreneurship
Leveraging resources to address social problems.
17
Examples of Social
Enterprises
Exhibit 7.4
18
Social Enterprise
Empowering Latina Entrepreneurs
Nely Galan founded Adelante, a movement
desig ed to e po er Lati as i the U.S.
economically through inspiration, motivation,
trai i g, a d resour es o e trepre eurship.
Galan feels that by helping Latinas become more
financially successful, she will have a positive
impact on their communities and families.
19
Empowering Latina Entrepreneurs
What factors are motivating Galan to help
Latinas become successful entrepreneurs?
Why do you think Coca-Cola, a consumer
products company, is collaborating with Galan
to empower women entrepreneurs?
20
What Does it Take, Personally?
Commitment and Opportunity

Leadership
determination obsession
Tolerance of risk, Creativity, self-

Motivation to
ambiguity, and reliance, and
excel
uncertainty ability to adapt
21
Entrepreneurial Strategy
Matrix
Exhibit 7.5
22
Success and Failure
Consider the
role of the Utilize
Anticipate
economic business
risk.
environment. incubators.
Realize there Going public

are common with an initial
management public offering
challenges. (IPO).
23
Question
A _____________ is a protected environment
for small businesses.
A. Business incubator
B. Small business office
C. SBA
D. Service incubator
24
Success and Failure
Business incubators
Protected
environments for
new, small
businesses.
25
Common Management Challenges
Growth
You might not Survival is
creates new
enjoy it. difficult.
challenges.
Its hard to Misuse of

Poor controls.
delegate. funds.
Mortality and
succession.
26
Initial public offering (IPO)
Sale to the public,

for the first time, of
federally registered
and underwritten
shares of stock in
the company.
27
Increasing Your Chances of Success
Opportunity analysis
A description of the good or service, an
assessment of the opportunity, an assessment of
the entrepreneur, specification of activities and
resources needed to translate your idea into a
viable business, and your source(s) of capital.
28
Opportunity Analysis
Exhibit 7.6
29
Planning
Business plan
A formal planning
step that focuses on
the entire venture
and describes all the
elements involved in
starting it.
30
Outline of a Business Plan
EXECUTIVE SUMMARY
THE INDUSTRY AND THE COMPANY AND ITS
PRODUCT(S) OR SERVICE(S)
MARKET RESEARCH AND ANALYSIS
THE ECONOMICS OF THE BUSINESS
MARKETING PLAN
DESIGN AND DEVELOPMENT PLANS

31
Outline of a Business Plan Continued
MANUFACTURING AND OPERATIONS PLAN
MANAGEMENT TEAM
OVERALL SCHEDULE
CRITICAL RISKS, PROBLEMS AND ASSUMPTIONS
THE FINANCIAL PLAN
PROPOSED COMPANY OFFERING
APPENDIXES
32
Five Key Factors
The The
The people
opportunity competition
Risk and
The context
reward
33
Nonfinancial Resources
Legitimacy
Peoples judg e t of a o pa ys a epta e,
appropriateness, and desirability, generally
stemming from company goals and methods that
are consistent with societal values.
Social capital
A competitive advantage in the form of
relationships with other people and the image
other people have of you.
34
Building Support for your Idea
Clear the investment with your immediate
boss.
Make cheerleaders who will support your idea.
Horse trading for support, time, money, and

other resources.
Get the blessing of relevant higher-level

officials.
35
Building Intrapreneurship
Skunkworks
A project team designated to produce a new,
innovative product.
Bootlegging
Informal work on projects, other than those
offi ially assig ed, of e ployees o hoosi g
and initiative.
36
Characteristics of
Entrepreneurial Orientation
Entrepreneurial orientation
The tendency of an organization to identify and
capitalize successfully on opportunities to launch
new ventures by entering new or established
markets with new or existing goods or services.
Allow independent action.
Innovativeness.
Risk taking.
Proactiveness.
Competitive aggressiveness.
37
The People and Passion of Popchips
Despite his own track record as a successful
entrepreneur, Keith Belling never tried to start
Popchips alone. He built a network of
relationships to launch the company.
Recently, the venture capital firm that provided
an initial 25 million dollars of start-up funding
sold their stake in the company for 670 million.
38
The People and Passion of Popchips
What actions described in this case increase
Pop hips ha es of lo g-term success?
Why do you think the innovation of popped
snacks came from an entrepreneur like Keith
Belling instead of from a big snack company?
39
Organization
Structure
Chapter Eight
Quote
Take my assetsbut leave me my organization

a d i fi e ears Ill ha e it all a k.
Alfred P. Sloan Jr.
2
Learning Objectives
LO 1 Explain how differentiation and integration
i flue e a orga izatio s stru ture.
LO 2 Summarize how authority operates.
LO 3 Define the roles of the board of directors and
the chief executive officer.
LO 4 Discuss how span of control affects structure
and managerial effectiveness.
LO 5 Explain how to delegate effectively.
3
LO 6 Distinguish between centralized and
decentralized organizations.
LO 7 Summarize the ways organizations can be
structured.
LO 8 Identify the unique challenges of the matrix
organization.
LO 9 Describe important integrative mechanisms.
4
Fundamentals of Organizing
Organization chart
The reporting
structure and
division of labor in an
organization.
5
Conventional Organization
Chart
Exhibit 8.1
6
Fundamentals of Organizing
Differentiation
The organization is composed
of many different units that
work on different kinds of
tasks, using different skills and
work methods.
Integration
The degree to which
differentiated work units work
together and coordinate their
efforts.
7
Differentiation
Division of labor
The assignment of different tasks to different
people or groups.
Specialization
A process in which different individuals and
units perform different tasks.
8
Integration
Coordination
The procedures that link the various parts
of an organization for the purpose of
a hie i g the orga izatio s o erall issio .
9
Authority in Organizations
Authority
The legitimate right
to make decisions
and to tell other
people what to do.
10
Authority in Organizations
Board of Directors
Chief Executive Officer
Top Management Team
11
Hierarchical Levels
Hierarchy
The authority levels of the organizational pyramid.
Corporate governance
The role of a orporatio s e e uti e staff a d
oard of dire tors i e suri g that the fir s
a ti ities eet the goals of the fir s
stakeholders.
12
Span of Control
Span of control refers to the number of
subordinates who report directly to a supervisor.
Exhibit 8.2
13
Question
What is the assignment of new or additional
responsibilities to a subordinate?
A. Subordination
B. Delegation
C. Designation
D. Allocation
14
Delegation
Delegation
The assignment of new or additional
responsibilities to a subordinate.
Responsibility
The assignment of a task that an employee is
supposed to carry out.
Accountability
The expectation that employees will perform
a job, take corrective action when necessary,
and report upward on the status and quality
of their performance.
15
Advantages of Delegation
Le erages a agers e erg a d tale t.
Allows managers to accomplish more than
they could on their own.
Helps develop effective subordinates.
Promotes a sense of being a contributing
member of the organization, so employees
tend to feel a stronger commitment.
16
Steps in Effective Delegation
Define the goal succinctly.
Select the person for the task.
Soli it the su ordi ates ie s a out suggested approa hes.
Give the subordinate the authority, time, and resources

(people, money, equipment) to perform the assignment.
Schedule checkpoints for reviewing progress.
Follow through by discussing progress at appropriate intervals.

17
Decentralization
Centralized organization
An organization in which high-level executives

make most decisions and pass them down to
lower levels for implementation.
Decentralized organization
An organization in which lower-level managers

make important decisions.
18
The Horizontal Structure
Line Staff
departments departments
Units that deal Units that
directly with support line
the departments.
orga izatio s e.g., Human
primary goods resources
and services. department
e.g., Sales
department
19
The Functional Organization
The functional organization is structured

around specialized activities such as
production, marketing, and human resources.
Exhibit 8.4
20
Advantages of Functional
Organizations
Economies of scale can be realized.
Monitoring of the environment is more effective.
Performance standards better maintained.
Greater opportunity for specialized training and skill

development.
People have greater opportunity for specialized training and in-

depth skill development.
Decision making and lines of communication are simple and

clearly understood.
21
The Divisional Organization
A form of departmentalization that groups
units around products, customers, or
geographic regions.
Exhibit 8.6
22
Advantages of the
Product Approach
Information needs are managed more easily.
People have a full-time commitment to a

particular product line.
Task responsibilities are clear.
People receive broader training.
23
Social Enterprise
Kiva Organizes by Function
Kiva connects a global network of lenders with
entrepreneurs in impoverished communities.
Over the past ten years 1.3 lenders have made
it possible for Kiva to make over $692.5
million in loans to individuals in 86 different
countries.
Kiva uses a functional departmentalization
structure.
24
Kiva Organizes by Function
Why do you think Kiva is using a functional
approach to structuring its organization?
Referring to the eight areas illustrated below,
which would be considered staff activities? Line
activities?
25
The Matrix Organization
An organization composed of dual reporting
relationships in which some managers report
to two superiorsa functional manager and a
divisional manager.
Exhibit 8.9
26
Advantages of a Matrix Design
Better linkage of employees to the

ADVANTAGES
o pa s goals a d strateg .
More information sharing.
Communication is fostered.
Greater responsiveness.
Creative ideas from cross-functional work.
Loyalty to the organization as a whole
rather than to a function or division.
27
Disadvantages of a Matrix Design
Unclear responsibilities and competing priorities.
Violation of the unity-of-command principle.
Accountability difficult to define.
DISADVANTAGES
Conflict and stress for employees who must
manage a dual reporting role.
Additional time required for meetings and other
communications.
Extensive collaboration needed but not always
easy to reward.
28
Disadvantages of a Matrix Design
Exhibit 8.11
29
The Network Organization
A collection of
independent,
mostly single-
function firms
that collaborate
on a good or
service.
Exhibit 8.12
30
The Network Organization
Dynamic network
Temporary arrangements among partners that can
be assembled and reassembled to adapt to the
environment.
Broker
A person who assembles and coordinates
participants in a network.
31
Question
___________ is establishing common routines
and procedures that apply uniformly to
everyone.
A. Coordination by standardization
B. Coordination by plan
C. Coordination by mutual adjustment
D. Coordination by service
32
Coordination by Standardization
Standardization Formalization
The presence of rules

Establishing common
and regulations
routines and procedures
governing how people in
that apply uniformly to
the organization
everyone.
interact.
33
Coordination by Plan and Adjustment
Coordination by Coordination by
plan mutual adjustment
Interdependent units are

Units interact to make
required to meet
accommodations to
deadlines and objectives
achieve flexible
that contribute to a
coordination.
common goal.
34
Reducing the Need for Information
Slack resources
extra resources on which organizations can rely in
a pinch so that if they get caught off guard, they
can still adjust.
Creating self-contained tasks
changing from a functional organization to a
product or project organization and giving each
unit the resources it needs to perform its task.
35
Increasing Information-Processing
Capability
Direct contact among managers who share a problem.
Liaison roles to handle communication between two departments.
Task forces brought together temporarily to solve a common problem.
Teams, or permanent interdepartmental decision-making groups.
Product, program, or project managers.
Matrix organizations.
36
Managing High Information-Processing
Demands
Exhibit 8.13
37
Regrouping and Changing the Culture at General
Motors
Mary Barra, worker her way up within the
ranks to become the CEO of General Motors.
Previously as a senior vice president, she
found the procedures and organization of her
group were often an impediment to
innovation and implemented changes.
As CEO Barra is looking to change the culture
of GM.
38
Regrouping and Changing the Culture at General
Motors
How might Barra's efforts at changing the
culture at GM increase the chances that the
structural changes will be effective in the long-
term?
What perso al fa tors are likel to affe t GMs
success in achieving greater organizational
integration?
39
Organizational
Agility
Chapter Nine
Quote
I came to the conclusion long ago that limits to

innovation have less to do with technology or
creativity than organizational agility. Inspired
individuals can only do so much.
Ray Stata
2
Learning Objectives
LO 1 Discuss why it is critical for organizations to be
responsive.
LO 2 Describe the qualities of an organic organization
structure.
LO 3 Identify strategies and dynamic organizational
co cepts that ca i p o e a d o ga izatio s
responsiveness.
LO 4 Explain how a firm can be both big and small
LO 5 Summarize how firms organize to meet customer
requirements.
LO 6 Identify ways that firms organize around different
types of technology.
3
The Responsive Organization
Mechanistic organization
A form of organization that
seeks to maximize internal
efficiency.
Organic structure
An organizational form
that emphasizes flexibility.
4
Organic Structure
Jobholders have broader responsibilities that change as the need
arises.
Communication occurs through advice and information rather than
through orders and instructions.
Decision making and influence are more decentralized and informal.
Expertise is highly valued.
Jobholders rely more heavily on judgment than on rules.

Obedience to authority is less important than commitment to the
o ga izatio s goals.
Employees depend more on one another and relate more informally
and personally.
5
Two Ways to Describe
an Organization
Exhibit 9-1
6
Organizing around
Core Competencies
Acquire or build core
Identify existing core competencies that will
competencies. be important for the
future.
Keep investing in Extend competencies

competencies so that to find new
the firm remains applications and
world class and better opportunities for the
than competitors. markets of tomorrow.
7
Question
What is a formal relationship created among
independent organizations with the purpose of
joint pursuit of mutual goals?
A. Knowledge organization
B. Learning organization
C. Strategic alliance
D. Wholly-owned subsidiary
8
Strategic Alliances
Formal relationship created among independent
organizations with the purpose of joint pursuit
of mutual goals.
9
Ho Is Ca Beco e Wes
Exhibit 9.3
10
The Learning Organization
An organization skilled
at creating, acquiring,
and transferring
Learning
knowledge, and at
organization
modifying its behavior to
reflect new knowledge
and insights.
11
How do Firms Become
Learning Organizations?
Engage in disciplined thinking and attention to details,
making decisions based on data and evidence rather
than guesswork and assumptions.
Search for new knowledge and ways to apply it.
Review successes and failures looking for lessons and

deeper understanding.
Benchmark - identify and implement best practices.
Share ideas throughout the organization.

12
The High-Involvement Organization
A type of organization in
Organization
High-Involvement
which top management

ensures that there is
consensus about the
direction in which the
business is heading.
13
Organizational Size and Agility
Large organizations are typically less organic
and more bureaucratic.
Jobs tend to become more specialized in large
organizations.
With size comes greater complexity and a
need for increased control.
14
The Case for Big
Larger size helps

Larger size helps
develop
create economies
economies of
of scale.
scope.
15
The Case for Small
Large Large Smaller
organizations organizations organizations
can have are more can:
difficulty difficult to Move faster.
managing coordinate and
relationships control. Inspire greater.
involvement
with customers from their
and among its people.
own units. Avoid
diseconomies
of scale.
16
Social Enterprise
Making More Impact: Scaling Social Enterprises
What happens when social enterprises want
to scale their operations to impact more
people?
Leaders of SEs need to consider the following
issues when planning for growth.
Alliances with governments.
Partnerships with big businesses.
Not losing sight of what matters.
17
Making More Impact: Scaling Social Enterprises
As Social Enterprises try to get larger, what

unique challenges do they face?
What are some of the drawbacks associated
with partnering with governments or big
businesses? If you ran an SE, which of these
options would you pursue?
18
Being Big and Small
Downsizing
The planned elimination
of positions or jobs.
Rightsizing
A successful effort to
achieve an appropriate size
at which the company
performs most effectively.
19
Downsizing
Survivors sy dro e
Loss of productivity
and morale in
employees who
remain after a
downsizing.
20
Customers and the
Responsive Organization
The point of structuring a responsive, agile

organization lies in enabling it to meet and exceed
the expectations of its customers.
Managers must stay focused in three key areas:

The company
The competition. The customer.
itself.
21
The Strategy Triangle
Exhibit 9.5
22
Customer Relationship Management
Customer relationship management (CRM)
A multifaceted process focusing on creating two-
way exchanges with customers to foster intimate
knowledge of their needs, wants, and buying
patterns.
Value chain
The sequence of activities that flow from raw
materials to the delivery of a good or service, with
additional value created at each step.
23
Generic Value Chain
Exhibit 9.6
24
Total Quality Management (TQM)
An integrative approach to management that
supports the attainment of customer
satisfaction through a wide variety of tools
a d tech i ues
that esult i high-quality goods and
services.
25
ISO 9001
A series of quality standards developed by a
committee working under the International
Organization for Standardization to improve
total quality in all businesses for the benefit of
producers and consumers.
26
Reengineering
Revolutionizing key organizational systems
a d p ocesses to a s e the uestio : If you
were the customer, how would you like us to
ope ate?
Processes are redesigned from scratch as if
the organization was just starting out.
27
Types of Technology Configurations
Small batch
Technologies that produce goods and services
in low volume.
Large batch
Technologies that produce goods and services
in high volume.
Continuous process
A process that is highly automated and has a
continuous production flow.
28
Organizing for Flexible Manufacturing
Mass customization
The production of
varied, individually
customized products
at the low cost of
standardized, mass-
produced products.
29
Mass Customization (Exh. 9.8)
Key Features in
30
Computer-Integrated Manufacturing
Computer-integrated manufacturing (CIM)
The use of computer-aided design and computer-
aided manufacturing to sequence and optimize a
number of production processes.
Flexible factories
Manufacturing plants that have short production
runs, are organized around products, and use
decentralized scheduling.
31
Lean Manufacturing
An operation that strives to achieve the

highest possible productivity and total quality,
cost effectively, by eliminating unnecessary
steps in the production process and
continually striving for improvement.
32
Time-Based Competition (TBC)
Strategies aimed at
reducing the total time
needed to deliver a
good or service.
33
Question
___________ is the movement of the right
goods in the right amount to the right place at
the right time.
A. Logistics
B. Supply chain management
C. Value chain analysis
D. Customer Service
34
Logistics
The movement of the
right goods in the right
amount to the right
place at the right time.
35
Just-in-time (JIT)
A system that calls for Advantages:

subassemblies and Elimination of waste.
components to be Perfect quality.
manufactured in very Reduced cycle times.
small lots and Employee involvement.
delivered to the next Value-added
stage of the manufacturing.
production process Discovery of problems and
just as they are prevention of recurrence.
needed.
36
Concurrent Engineering
A design approach in which all

relevant functions cooperate
jointly and continually in a
maximum effort aimed at
producing high-quality products
that eet custo e s eeds.
37
GES Pu suit of High Quality a d Leanness
To improve quality, GE applies six sigma, and

to improve efficiency by eliminating waste, it
uses the lean initiative methods.
These methods are not just for manufacturing,
either; six sigma has been used for finance,
human resources, and their key areas within
the company.
38
GES Pu suit of High Quality a d Leanness
How else might GE become more responsive

to its customers?
Based on the information in the case, how
ould you ate GEs o ga izatio al agility?
39
Human
Resource
Management
Chapter Ten
Quote
You can get capital and erect buildings, but it

takes people to build a business.
Thomas J. Watson
2
Learning Objectives
LO 1 Discuss how companies use human resources
management to gain competitive advantage.
LO 2 Give reasons companies recruit both internally
and externally for new hires.
LO 3 Identify various methods for selecting new
employees.
LO 4 Evaluate the importance of spending on training
and development.
3
LO 5 Explain alternatives for who appraises an
e plo ees perfor a e.
LO 6 Describe the fundamental aspects of a reward
system.
LO 7 Summarize how unions and labor laws influence
human resources management.
4
Human Resource Management
Human resources
management (HRM)
Formal systems for
the management of
people within an
organization.
5
Strategic Human Resources Management
Creates
value
Is organized Is rare
Is difficult
to imitate
6
Strategic Human Resources
Management
Human capital
The knowledge, skills,
and abilities of
employees that have
economic value.
7
The HR Planning Process
Demand forecasts Supply of labor

How many and what
Determining how
types of employees
many and what type
the organization
of people are needed.
actually will have.
8
An Overview of the HR
Planning Process
Exhibit 10.1
9
Question
What tool is used for determining what is done
on a given job and what should be done on that
job?
A. Job description
B. Job specification
C. Job analysis
D. Occupation breakdown
10
The HR Planning Process
Job analysis
A tool for determining
what is done on a
given job and what
should be done on that
job.
11
Social Enterprise
Are Business School Graduates Willing to Work
for Social Enterprises?
Maso Ar olds orga izatio deli ers fresh,
nutritious food in a way that does not
damage the environment.
His Austin, Texas-based social enterprise,
Greenling, purchases food from farms that use
chemical-free land.
As Greenling grows, so will its impact on
consumers, farmers, and the environment.
12
Are Business School Graduates Willing to Work
for Social Enterprises?
Assume you were the manager of a social
enterprise like Greenling. How would you go
about attracting individuals to work for your
organization?
To what degree would you or your fellow
students consider working for a social
enterprise?
13
Staffing the Organization
Recruitment
The development of a
pool of applicants for Selection
jobs in an
organization. Choosing from among
Internal and external. qualified applicants to
hire.
14
Selection
Applications Reference
Interviews
and Rsums Checks
Background Personality
Drug Testing
Checks Tests
Cognitive Performance Integrity

Ability Tests Tests Tests
15
Interviews
Structured interview
Selection technique
that involves asking
all applicants the
same questions and
comparing their
responses to a
standardized set of
answers.
16
Screening Tools Used Most Often
Exhibit 10.2
17
Performance Tests
Assessment center
A managerial performance test in which
candidates participate in a variety of exercises and
situations.
18
Reliability and Validity
Reliability Validity
The consistency of test The degree to which a
scores over time and selection test predicts
across alternative or correlates with job
measurements. performance.
Criterion, content.
19
Workforce Reductions
Outplacement
The process of helping people
who have been dismissed
from the company regain
employment elsewhere.
Employment-at-will
The legal concept that an
employee may be
terminated for any reason.
20
Advice on Termination
Exhibit 10.3
21
Legal Issues and
Equal Employment Opportunity
Adverse impact
When a seemingly
neutral employment
practice has a
disproportionately
negative effect on a
protected group.
22
U.S. Equal Employment Laws
Exhibit 10.4
23
U.S. Equal Employment Laws (cont.)
Exhibit 10.4 Continued
24
Training and Development
Needs
Training Development
assessment
An analysis Teaching Helping
identifying the lower-level managers and
jobs, people, employees professional
and how to employees
departments perform their learn the
for which present jobs. broad skills
training is needed for
necessary. their present
and future
jobs.
25
Training Delivery Methods:
Percent of Total Hours
Exhibit 10.5
26
Types of Training
Orientation Training designed to introduce new employees

to the company and familiarize them with
training policies, procedures, culture, and the like.
Team Training that provides employees with the

skills and perspectives they need to collaborate
training with others.
Programs that focus on identifying and

Diversity reducing hidden biases against people with
training differences and developing the skills needed to
manage a diversified workforce.
27
Performance Appraisal
Performance Trait
appraisal (PA) is
the assessment
of a e plo ees
job performance. Behavior Results
28
Management by objectives
(MBO)
A process in which
objectives set by a
subordinate and a
supervisor must be
reached within a given
time period.
29
Question
___________ is the process of using multiple
sources of appraisal to gain a comprehensive
perspe ti e o o es perfor a e.
A. 360-degree appraisal
B. Peer appraisal
C. Content appraisal
D. Equity appraisal
30
Process of using
multiple sources of
360-degree appraisal to gain a
appraisal comprehensive
perspe ti e o o es
performance.
31
Tips for Giving Feedback
1. Su arize the e plo ees perfor a e, a d e
specific.
2. E plai h the e plo ees ork is i porta t to
the organization.
3. Thank the employee for doing the job.
4. Raise any relevant issues, such as areas for
improvement.
5. E press o fide e i the e plo ees future good
performance.
32
Factors Affecting the Wage Mix
Exhibit 10.8
33
Pay Structure
Exhibit 10.9
34
Employee Benefits
Cafeteria benefit program
An employee benefit program in which employees
choose from a menu of options to create a benefit
package tailored to their needs.
35
Labor Relations
Labor relations Union shop
The system of relations An organization with a
between workers and union and a union
management. security clause
specifying that workers
must join the union after
a set period of time.
Right-to-work
Legislation that allows
employees to work
without having to join a
union.
36
Determinants of Union
Voting Behavior
Exhibit 10.10
37
Google Gears up for More Labor Market
Competition
Googles recruiting and selection practices
have helped it meet its goals for hiring the
best talent, but their HR strategy has been
shaken by up-and-coming high-tech firms.
High-tech workers still love Google, but many
are drawn to opportunities at rising stars in
the industry.
38
Google Gears up for More Labor Market
Competition
Ho is Googles approa h to e plo ee
benefits more effective than a simple decision
to offer the biggest benefits package?
Do ou thi k Googles HR strateg ill e a le
it to maintain a competitive advantage? Why
or why not?
39
Managing the
Diverse
Workforce
Chapter Eleven
Quote
e pluribus unum
or
"Out of many, one"
2
Learning Objectives
LO 1 Describe how changes in the U.S. workforce make diversity
a critical organizational and managerial issue.
LO 2 Distinguish between affirmative action and managing
diversity.
LO 3 Explain how diversity, if well managed, can give
organizations a competitive edge.
LO 4 Identify challenges associated with managing a diverse
workforce.
LO 5 Define monolithic, pluralistic, and multicultural
organizations.
LO 6 List steps managers and their organizations can take to
cultivate diversity.
3
Managing Diversity
Managing a culturally diverse

workforce by recognizing the
characteristics common to specific
groups of employees while dealing
with such employees as individuals
and supporting, nurturing, and
utilizing their differences to the
orga izatio s ad a tage.
4
Diversity: A Brief History
Most immigrants to the U.S. from late 1800s to
early 1900s were from Italy, Poland, Ireland, and
Russia.
It was considered poor business practice for white

Protestant-dominated insurance companies to hire
Irish, Italians, Catholics, or Jews.
It was not until the 1960s that the struggle for

acceptance by various ethnic and religious groups
had on the whole succeeded.
5
Whe the Wo e s Rights Mo e e t as lau ched
in 1848, most occupations, colleges, and professional
schools were off limits to women.
Women could not vote and lost all property rights
once they were married.
Until the Civil Rights Act of 1964, women:
Were excluded from certain jobs.
Needed a male cosigner for a bank loan.
Were not issued credit cards if they were married.
6
Racial segregation remained

for 100 years after the end of
the Civil War.
Blacks suffered voting right

suppression and
discrimination in education,
employment, and housing.
Brown v. Board of Education (1954) declared segregation

unconstitutional setting the stage for the Civil Rights Act of
1964.
7
Components of a
Diversified Workforce
Exhibit 11.1
8
Diversity Today
Diversity Managing diversity
Differences that include Not just tolerating or
religious affiliation, age, accommodating all sorts
disability status, military of differences, but
experience, sexual supporting, nurturing,
orientation, economic and utilizing these
class, educational level, differences to the
lifestyle, gender, race, orga izatio s
ethnicity, and advantage.
nationality.
9
Examples of Diversity Programs in
S&P 100 Companies
Exhibit 11.2
10
Gender Issues
Almost 60 percent
Women make up
of marriages are
about 47 percent of
dual-earner
the workforce.
marriages.
One of every four married

women in two-income
households earns more than
her husband does.
11
Question
A(n) ___________ is an invisible barrier making it
difficult for women and minorities to move
beyond a certain level in the corporate hierarchy.
A. Organization chart
B. Glass ceiling
C. Glass limit
D. Personnel limit
12
Gender Issues
Glass ceiling
An invisible barrier
that makes it difficult
for women and
minorities to move
beyond a certain
level in the corporate
hierarchy.
13
Sexual Harassment
Quid pro quo
Sexual Submission to or rejection of sexual
harassment conduct is used as a basis for
employment decisions.
Conduct of a
sexual nature Hostile environment
that has
negative Occurs when unwelcome sexual
conduct has the effect of
consequences unreasonably interfering with job
for performance or creating an
employment. intimidating or hostile, working
environment.
14
Top Ten Most Powerful Women
Executives
Exhibit 11.3
15
Basic Components of an Effective
Sexual Harassment Policy
Develop a comprehensive organization-wide policy.
Hold training sessions with supervisors.
Establish a formal complaint procedure.
Act immediately when employees complain of
sexual harassment.
Discipline the offenders at once.
Follow up on all cases.

16
Minorities and Immigrants
Black, Asian, Asian and By 2020, more

and Hispanic Hispanic than 18 percent
workers are workforces are of the
about one-fifth growing the workforce is
of the labor fastest in the expected to be
force in the United States, people of
United States. followed by the Hispanic origin.
African
American
workforce.
17
Minorities and Immigrants
Four states (California, Hawaii, New Mexico,
and Texas) and the District of Columbia have
become majority minority.
Foreign-born workers make up more than 16
percent of the U.S. civilian labor force.
Close to half of these workers are Hispanic.
Nearly one-fourth of these workers are
Asian.
18
Mentally and Physically Disabled
People
The largest unemployed minority in the
United States.
The share of the population with a disability is
growing.
Assistive technologies make it easier for
companies to comply with the Americans with
Disabilities Act.
19
The Age of the Workforce
The median age of workers is rising substantially while

the number of young workers is growing only slightly.
The Bureau of Labor Statistics projects that entry-level

workers will be in short supply in the future.
70% of workers between 45-74 intend to work in

retirement.
20
Utilizing Older Employees
A recent study found Organizations are

87 percent of increasingly making
employers view their workplace adaptations
older workers as to help older workers
valuable resources cope with the physical
for training, problems they
mentoring, and experience as they age,
sharing institutional such as poorer vision,
knowledge. hearing, and mobility.
21
A Note on Affirmative Action
Affirmative action and diversity management
are complementary, not identical
Special efforts to recruit and hire qualified
members of groups that have been
discriminated against in the past.
Affirmative action programs are required for
certain organizations like government agencies
and federal contractors/sub-contractors.
22
Competitive Advantage through Diversity
and Inclusion
Ability to Attract and Retain Motivated
Employees.
Better Perspective on a Differentiated
Market.
Ability to Leverage Creativity and Innovation
in Problem Solving.
Enhancement of Organizational Flexibility.
23
Challenges of Diversity
and Inclusion
Unexamined Assumptions
Lower Cohesiveness
Communication Problems
Mistrust and Tension
Stereotyping
24
Beyond Affirmative Action:
Key Practices to Leverage Employee
Differences
Exhibit 11.8
25
Diversity Assumptions and Their
Implications for Management
Exhibit 11.9
26
Social Enterprise
Managing Diversity at Change.org
Jen Dulski, COO of Change.org, has realigned internal
culture and employee composition with that of its
customers.
Change.org is "embracing ope ess.
Dulski suggests the following steps to create change:
Make everyone part of the mission and make
diversity part of your core values.
Improve the hiring process.
Create the right culture .
27
Managing Diversity at Change.org
What internal and external forces drove Jen
Dulski and other managers at Change.org to
reexamine their commitment to diversity?
Why was it important for the company to hire
more female and international employees?
28
Multicultural Organizations
Monolithic organization
An organization that has a low degree of structural
integrationemploying few women, minorities, or
other groups that differ from the majorityand thus
has a highly homogeneous employee population.
Pluralistic organization
An organization that has a relatively diverse employee
population and makes an effort to involve employees
from different gender, racial, or cultural backgrounds.
29
Question
A ___________ organization is an organization
that values cultural diversity and seeks to
utilize and encourage it.
A. Multi-spatial
B. Multidimensional
C. Multicultural
D. Multi-temporal
30
Multicultural Organizations
Multicultural
organizations value
cultural diversity and
seeks to utilize and
encourage it.
31
How Organizations Can Cultivate
a Diverse Workforce
1. Securi g top a age e ts leadership a d
commitment.
2. Assessi g the orga izatio s progress to ard
goals.
3. Attracting employees.
4. Training employees in diversity.
5. Retaining employees.
32
Attracting Employees
Recruitment
Accommodating Work and Family Needs
Alternative Work Arrangements
33
Guidelines for Diversity Training
Distinguish
Position training in
Do a thorough between
your broad
needs analysis. education and
diversity strategy.
training.
Incorporate
Test the training diversity programs
Use a participative
thoroughly before into the core
design process.
rollout. training
curriculum.
34
Retaining Employees
Support Groups
Mentoring
Career Development and Promotions
Systems Accommodation
Accountability
35
Question
___________ are higher-level managers who
help ensure that high-potential people socialized
into the norms and values of the organization.
A. Trainers
B. Mentors
C. HR specialists
D. Employee coaches
36
Retaining Employees
Mentors
Higher-level managers who help ensure that high-
potential people are introduced to top
management and socialized into the norms and
values of the organization.
37
On Diversity, NASCAR Leaders Show They Mean
Business
NASCARs has lau ched a Dri e for Diversity
program and participants say it works.
When a driver let slip a racial slur during an
interview, disciplinary action was swift.
NASCAR has invested over $500,000 to
provide diversity training to all of its
employees.
38
Management in Action- Questions
On Diversity, NASCAR Leaders Show They Mean
Business
Assess NASCARs respo se to a dri ers use of
a racial slur. What did it do right? What else
should it have done?
Assess NASCARs leadership a d co it e t
concerning diversity. What else should it do?
39
Leadership
Chapter Twelve
Quote
Every soldier has a right to competent

command.
Julius Caesar
2
Learning Objectives
LO 1 Discuss what it means to be a leader.
LO 2 Summarize what people want and what
organizations need from their leaders.
LO 3 Explain how a good vision helps you be a better
leader.
LO 4 Identify sources of power in organizations.
LO 5 List personal traits and skills of effective leaders.
3
LO 6 Describe behaviors that will make you a better
leader and identify when the situation calls for
them.
LO 7 Distinguish between charismatic and
transformational leaders.
LO 8 Describe types of opportunities to be a leader in
an organization.
LO 9 Discuss how to further your own leadership
development.
4
Leadership
Leader Key Leader Behavior
One who influences 1. Challenge the process.
others to attain goals. 2. Inspire a shared vision.
3. Enable others to act.
4. Model the way.
5. Encourage the heart.
5
Vision
Vision Reasons why visions fail

A mental image of
a possible and
desirable future
state of the
organization.
Exhibit 12.2
6
Leading and Managing
Supervisory Strategic
leadership leadership
Behavior that Behavior that gives
provides guidance, purpose and meaning
support, and to organizations,
corrective feedback envisioning and
for day-to-day creating a positive
activities. future.
7
Question
___________ is the ability to influence others.
A. Innovation
B. Charisma
C. Power
D. Clout
8
Exhibit 12.4
Power and Leadership
Power- The ability to influence others.

9
Traditional Approaches to
Understanding Leadership
Trait approach
A leadership
perspective that
attempts to
determine the
personal
characteristics that
great leaders share.
10
Personality Characteristics That
Increase Leader Effectiveness
Exhibit 12.5
11
Leader Behaviors
Behavioral approach
A leadership perspective that attempts to identify
what good leaders dothat is, what behaviors
they exhibit.
Three general categories of leadership behavior:
Task performance.
Group maintenance.
Employee participation.
12
Leader Behaviors
Task performance behaviors
Actions taken to ensure that the work group or
organization reaches its goals.
13
Group Maintenance
Group maintenance Leader-Member
behaviors Exchange (LMX) theory
Actions taken to ensure Highlights the
the satisfaction of group importance of leader
members, develop and behaviors not just
maintain harmonious toward the group as a
work relationships, and whole but toward
preserve the social individuals on a personal
stability of the group. basis.
14
Questions Assessing Task Performance
and Group Maintenance Leadership
15
Exhibit 12.6
Question
Which leadership philosophy is characterized by
an absence of managerial decision making?
A. Autocratic
B. Democratic
C. Laissez-faire
D. Egalitarian
16
Participation in Decision Making
Autocratic Democratic Laissez-faire
leadership leadership Leadership
A form of A form of philosophy
leadership in leadership in characterized
which the which the by an absence
leader makes leader solicits of managerial
decisions on his input from decision
or her own and subordinates. making.
then
announces
those decisions
to the group.
17
Exhibit 12.7
Leadership Grid
18
Situational Approaches
to Leadership
Situational approach
A leadership perspective proposing that
universally important traits and behaviors
do not exist, and that effective leadership
behavior varies from situation to situation.
19
Fiedlers Co ti ge y Model
A situational approach to leadership
postulating that effectiveness depends on the
personal style of the leader and the degree to
which the situation gives the leader power,
control, and influence over the situation.
20
Fiedlers Co ti ge y Model
Task-motivated leadership
Leadership that places primary emphasis on
completing a task.
Relationship-motivated leadership
Leadership that places primary emphasis on
maintaining good interpersonal
relationships.
21
Fiedlers A alysis of Situatio s
Exhibit 12.8
22
Hersey a d Bla hards
Situational Theory
A life-cycle theory of leadership postulating
that a a ager should o sider a e ployees
psychological and job maturity before deciding
whether task performance or maintenance
behaviors are more important.
23
Hersey a d Bla hards
Situational Theory
Job maturity Psychological
The level of the maturity
e ployees skills a d A e ployees self-
technical knowledge confidence and self-
relative to the task respect.
being performed.
24
Path-Goal Theory
A theory that concerns how leaders influence
su ordi ates per eptio s of their ork goals
and the paths they follow toward attainment
of those goals.
Exhibit 12.9
25
Substitutes for Leadership
Factors in the workplace that can exert the
same influence on employees as leaders
would provide.
26
Contemporary Perspectives
on Leadership
Charismatic leader
A person who is
dominant, self-confident,
convinced of the moral
righteousness of his
beliefs, and able to
arouse a sense of
excitement and
adventure in followers.
27
on Leadership
Transformational leader Transactional leaders
A leader who Leaders who manage
motivates people to through transactions,
transcend their using their legitimate,
personal interests for reward, and coercive
the good of the group. powers to give
commands and
exchange rewards for
services rendered.
28
on Leadership
Level 5 leadership
A combination of strong professional will

(determination) and humility that builds
enduring greatness.
29
Social Enterprise
Richard L. Murphy Served Thousands
Richard Murphy established a center in Harlem to
help truant students.
Murphy continued in his work instituting a
program to use several public schools, after
hours, as community centers.
The use of schools as community centers has
been replicated in several cities throughout the
United States.
30
Richard L. Murphy Served Thousands
What made Richard Murphy such an effective
leader? Explain.
In addition to being a servant leader, to what
degree as Murphy a le el-5 leader?
31
Authenticity
Authentic Pseudo-
leadership transformational
leaders
A style in which the Leaders who talk about
leader is true to himself positive change but
or herself while allow their self-interest
leading. to take precedence
o er follo ers eeds.
32
Opportunities for Leaders
Servant-leader
A leader ho ser es others eeds hile
strengthening the organization.
Intergroup leader
A leader who leads collaborative
performance between different groups or
organizations.
33
Opportunities for Leaders
Shared leadership
Rotating leadership, in which people rotate through
the leadership role based on which person has the
most relevant skills at a particular time.
Lateral leadership
Style in which colleagues at the same hierarchical
level are invited to collaborate and facilitate joint
problem solving.
34
HPs Future A ordi g to Meg Whitman
At HP, CEO Meg Whitman has been fearless in
making tough decisions.
Whitman has sought to restore a culture more like
the one that prevailed under the founderswhere
technology is revered and technology workers are
valued.
She eliminated the fenced off executive parking lot
and executive suites, working in a cubicle like
everyone else.
35
HPs Future A ordi g to Meg Whitman
What evidence, if any, do you see that
Whitman is a charismatic leader? A
transformational leader? An authentic leader?
A servantleader?
Do you believe Whitman has been a
successful leader of HP? Why or why not?
36
Motivating for
Performance
Chapter Thirteen
Quote
The worst mistake a boss can make is not

to say well done.
John Ashcroft
The reward of a thing well done is to have

done it.
Ralph Waldo Emerson
2
Learning Objectives
LO 1 Identify the kinds of behaviors managers
need to motivate in people.
LO 2 List principles for setting goals that
motivate employees.
LO 3 Summarize how to reward good
performance effectively.
LO 4 Des ri e the key eliefs that affe t peoples
motivation.
3
LO 5 Dis uss ays i hi h peoples i di idual
needs affect their behavior.
LO 6 Define ways to create jobs that motivate.
LO 7 Summarize how people assess fairness and
how to achieve it.
LO 8 Identify causes and consequences of a
satisfied workforce.
4
Motivating for Performance
Motivation
For es that e ergize, dire t, a d sustai a perso s
efforts.
Managers must motivate people to:
join the organization.
remain in the organization.
come to work regularly.
5
Setting Goals
Goal-setting theory
A motivation theory stating that people have
conscious goals that energize them and direct
their thoughts and behaviors toward a particular
end.
Stretch goals
Targets that are particularly demanding,
sometimes even thought to be impossible.
6
Reinforcing Performance
Law of effect
A law formulated by Edward Thorndike in 1911
stating that behavior that is followed by positive
consequences will likely be repeated.
Reinforcers
Positive consequences that motivate behavior.
7
Question
___________ is the withdrawing or failing to
provide a reinforcing consequence.
A. Positive reinforcement
B. Negative reinforcement
C. Punishment
D. Extinction
8
Reinforcing Performance
Positive reinforcement Negative reinforcement
Applying consequences that Removing or withholding
increase the likelihood that an undesirable
a person will repeat the consequence.
behavior that led to it.
Punishment Extinction
Administering an aversive Withdrawing or failing to
consequence. provide a reinforcing
consequence.
9
The Consequences of Exhibit 13.3
Behavior
10
The Greatest Management
Principle in the World
Exhibit 13.4
11
Performance-Related Beliefs
Expectancy theory
A theory proposing that people will behave
based on the perceived likelihood that
their effort will lead to a certain outcome
that is a highly valued outcome.
12
Question
___________ is the value an outcome holds
for the person contemplating it.
A. Expectancy
B. Valence
C. Instrumentality
D. Anticipation
13
The Performance-to-Outcome Link
Expectancy
E ployees per eptio of the likelihood that their
efforts will enable them to attain their performance
goals.
Instrumentality
The perceived likelihood that performance will be
followed by a particular.
Valence
The value an outcome holds for the person
contemplating it.
14
Basic Concepts of Expectancy Theory
Exhibit 13.5
15
Managerial Implications of
Expectancy Theory
Increase expectancies.
Identify positively valent outcomes.
Make performance instrumental toward

positive outcomes.
16
Maslo s Need Hierar hy
A conception of human
needs organizing
needs into a hierarchy
of five major types.
Exhibit 13.6
17
Maslo s Need Hierar hy
1. Physiological (food, water, sex, and shelter).
2. Safety or security (protection against threat and
deprivation).
3. Social (friendship, affection, belonging, and love).
4. Ego (independence, achievement, freedom, status,
recognition, and self esteem).
5. Self-a tualizatio (realizi g o es full pote tial,
becoming everything one is capable of being).
18
Alderfers ERG Theory
A human needs Growth needs
theory suggesting Motivate people to
productively or creatively
that people have change themselves or their
three basic sets of environment.
needs that can Relatedness needs
Involve relationships with
operate other people and are
simultaneously. satisfied through the
process of mutually sharing
thoughts and feelings.
Existence needs
All material and
physiological desires.
19
M Clella ds Needs
Need for achievement
Characterized by a strong orientation toward
accomplishment and an obsession with success and
goal attainment.
Need for affiliation
Reflects a strong desire to be liked by other people.
Need for power
A desire to influence or control other people.
20
Designing Motivating Jobs
Extrinsic reward
Reward given to a person
by the boss, the company,
or some other person.
Intrinsic reward
Reward a worker derives
directly from performing
the job itself.
21
Social Enterprise
Giving Veterans a Renewed Sense of Purpose
Jake Wood co-founded Team Rubicon.
Staffed by veterans, the organization bridges the gap
between the moment a natural disaster happens and
when other aid organizations respond.
Wood seeks to solve two problems:
Respond rapidly duri g the ru ial i do of
time immediately following a disaster.
Better reintegrate veterans into society after
serving in the military.
22
Giving Veterans a Renewed Sense of Purpose
Of those veterans who would like to work for

Team Rubicon, what types of rewards are
likely to keep them motivated: extrinsic,
intrinsic, or both?
To what degree do you think Team Rubicon
will make a positive impact on natural disaster
victims? Explain.
23
Job Rotation, Enlargement,
and Enrichment
Job Rotation
Changing from one task to another to alleviate
boredom.
Job Enlargement
Giving people additional tasks at the same time
to alleviate boredom.
Job Enrichment
Changing a task to make it inherently more
rewarding, motivating, and satisfying.
24
Herz ergs T o-Factor Theory
Hygiene factors Motivators

Characteristics of the Factors that make a job
workplace, such as more motivating, such as
company policies, working additional job
conditions, pay, and responsibilities,
supervision, that can make opportunities for personal
people dissatisfied but do growth and recognition,
not lead to motivation. and feelings of
achievement.
25
Exhibit 13.7
The Hackman and Oldham
Model of Job Design
26
Model of Job Design
Skill variety
Different job activities involving several skills and
talents.
Task identity
The completion of a whole, identifiable piece of
work.
Task significance
An important, positive impact on the lives of
others.
27
Model of Job Design Continued
Autonomy
Independence and discretion in making decisions.
Feedback
Information about job performance.
28
Model of Job Design Continued
Growth need
strength
The degree to which
individuals want
personal and
psychological
development.
29
Empowerment
The process of sharing power with

employees, thereby enhancing their
confidence in their ability to perform
their jobs and their belief that they
are influential contributors to the
organization.
30
Achieving Fairness
Equity theory
A theory stating that people assess how fairly they
have been treated according to two key factors:
outcomes and inputs.
Exhibit 13.8
31
Equity Theory
Outcomes Inputs
The various things the The contributions the
person receives on the person makes to the
job: recognition, pay, organization: effort,
benefits, satisfaction, time, talent,
security, job performance, extra
assignments, and commitment, and
punishments. good citizenship.
32
Procedural Justice
Procedural justice
Using fair process in
decision making and
making sure others
know that the
process was as fair as
possible.
33
Quality of Work Life
Quality of work life (QWL) programs
Programs designed to create a workplace that
enhances employee well-being.
34
QWL Programs
1. Adequate and fair compensation.
2. A safe and healthy environment.
3. Jobs that develop human capacities.
4. A chance for personal growth and security.
5. A social environment that fosters personal.
identity, freedom from prejudice, a sense of
community, and upward mobility.
35
QWL Programs Continued
6. Constitutionalism, or the rights of personal
privacy, dissent, and due process.
7. A work role that minimized infringement on
personal leisure and family needs.
8. Socially responsible organizational actions.
36
Psychological Contract
A set of perceptions of
what employees owe
their employers, and
what their employers
owe them.
37
How SAS Makes Work Motivating
Jennifer Ma , SASs i e preside t of hu a
resour es, says e eryo e there is orki g
toward the same vision and inspiring each
other to do their est ork.
SAS emphasizes management responsibility
for employee development, a culture of trust
and ensures that work is meaningful.
38
How SAS Makes Work Motivating
How does SAS make its jobs motivating? What
other principles of job design could enhance
motivation at SAS?
What ele e ts of SASs approa h to
motivation do you think would contribute
more to job satisfaction than to performance?
Why?
39
Teamwork
Chapter Fourteen
Quote
No o e a histle a sy pho y. It takes a

orchestra to play it.
Halford Luccock
2
Learning Objectives
LO 1 Discuss how teams can contribute to an
orga izatio s effe ti e ess.
LO 2 Describe different types of teams.
LO 3 Summarize how groups become teams.
LO 4 Explain why groups sometimes fail.
LO 5 Describe how to build an effective team.
LO 6 List ethods for a agi g a tea s relatio ships
with other teams.
LO 7 Identify ways to manage conflict.
3
The Contributions of Teams
Building blocks for
organizational
structure.
Increase quality and
productivity while
reducing costs.
Enhance speed and be
powerful forces for
innovation and change.
4
Types of Teams
Work teams
Teams that make or do things like manufacture,
assemble, sell, or provide service.
Project and development teams

Teams that work on long term projects but disband
once the work is completed.
5
Types of Teams (Continued)
Parallel teams
Teams that operate separately from the regular
work structure, and exist temporarily.
Management teams
Teams that coordinate and provide direction to the
subunits under their jurisdiction and integrate
work among subunits.
6
Types of Teams (Continued)
Transnational teams Virtual teams

Work groups Teams that are
composed of physically dispersed
multinational and communicate
members whose electronically more
activities span than face-to-face.
multiple countries.
7
Best Practices of Effective
Virtual Team Leaders
Establish and Ensure diversity in Manage virtual
maintain trust the team is work cycle and
through the use of understood, meetings.
communication appreciated, and
technology. leveraged.
Monitor team Enhance external Ensure individuals

progress through visibility of the benefit from
the use of team and its participating in
technology. members. virtual teams.
Teaming
A strategy of
teamwork on the fly,
creating many
temporary, changing
teams.
9
How Groups Become Real Teams
A small number of people with
complementary skills who are committed to a
common purpose, set of performance goals,
and approach for which they hold themselves
mutually accountable.
10
Self-Managed Teams
Traditional work groups
Groups that have no managerial responsibilities.
Self-managed teams
Autonomous work groups in which workers are
trained to do all or most of the jobs in a unit and
make decisions previously made by frontline
supervisors.
Autonomous work groups

Groups that control decisions about and execution
of a complete range of tasks.
11
Self-Managed Teams (Continued)
Self-designing teams
Teams with the
responsibilities of
autonomous work
groups, plus control
over hiring, firing,
and deciding what
tasks members
perform.
12
Categories of Team Development
Exhibit 14.2
13
Teaming Challenges
Building
Emphasizing the
psychological
tea s purpose.
safety.
Putting conflict to
Embracing failure.
work.
14
Building Effective Teams
Productive output of the team
meets or exceeds standards of
quantity and quality.
Team
effectiveness Team members realize
satisfaction of their personal
is defined by needs.
three criteria.
Team members remain
committed to working
together again.
15
Motivating Teamwork
Social loafing
Working less hard and
being less productive
when in a group.
Social facilitation effect
Working harder when in a
group than when working
alone.
16
Question
___________ are shared beliefs about how
people should think and behave.
A. Roles
B. Norms
C. Expectations
D. Customs
17
Norms and Roles
Norms
Shared beliefs about
how people should
think and behave.
Roles
Different sets of
expectations for how
different individuals
should behave.
18
Roles
Task specialist role

Role requiring stronger job-related skills
and abilities.
Team maintenance specialist role

Role that develops and maintains team
harmony.
19
Social Enterprise
Paying for Coworking Space with Social Capital
Remote workers turn to coworking spaces to access

tools like high speed Wi-Fi and a work-focused
i e. These spa es also pro ide opportunities for
exchanging business ideas.
Netherlands-based Seats2Meet offers early 80,000
seats across its locations in exchange for nothing
more than the sharing of knowledge and expertise. It
earns its revenue by offering another 240,000 seats
for a daily fee.
20
Paying for Coworking Space with Social Capital
Do you think the model used by Seats2Meet

would work in the United States? Why or why
not?
In what ways can social capital help you in
running a start-up firm or doing freelance
projects?
21
Cohesiveness
The degree to which

a group is attractive
to its members,
members are
motivated to remain
in the group, and
members influence
one another.
22
Cohesiveness, Performance Norms,
and Group Performance
Exhibit 14.3
23
Building Cohesiveness and
High-Performance Norms
1. Recruit members with similar attitudes, values, and
backgrounds.
2. Maintain high entrance and socialization standards.
3. Keep the team small.
4. Help the team succeed, and publicize its successes.
5. Be a participative leader.
6. Present a challenge from outside the team.
7. Tie rewards to team performance.
24
Managing Outward
Gatekeeper
A team member who
keeps abreast of
current developments
and provides the team
with relevant
information.
25
Managing Outward (Continued)
Informing Parading
A team strategy that A team strategy that
entails making entails simultaneously
decisions with the emphasizing internal
team and then team building and
informing outsiders of achieving external
its intentions. visibility.
26
Managing Outward (Continued)
Probing
A team strategy that
requires team
members to interact
frequently with
outsiders, diagnose
their needs, and
experiment with
solutions.
27
Lateral Role Relationships
Work-flow relationships
Emerge as materials are passed from one group to
another.
Service relationships
Exist when top management centralizes an activity to
which a large number of other units must gain
access.
Advisory relationships
Created when teams with problems call on
centralized sources of expert knowledge.
28
Lateral Role Relationships (Continued)
Audit relationships
Develop when people not directly in the chain of
command evaluate the methods and performances
of other teams.
Stabilization relationships
Involve auditing before the fact.
Liaison relationships
Involve intermediaries between teams.
29
Question
Which style of conflict involves moderate
atte tio to oth parties o er s?
A. Avoidance
B. Accommodation
C. Compromise
D. Competing
E. Collaboration
30
Five Conflict Styles
Avoidance
A reaction to conflict that involves ignoring the
problem by doing nothing at all, or deemphasizing
the disagreement.
Accommodation
A style of dealing with conflict involving
cooperation on behalf of the other party but not
ei g asserti e a out o es o i terests.
31
Five Conflict Styles (Continued)
Compromise
A style of dealing with conflict involving moderate
atte tio to oth parties o er s.
Competing
A style of dealing with conflict involving strong
fo us o o es o goals a d little or o o er
for the other perso s goals.
32
Five Conflict Styles (Continued)
Collaboration
A style of dealing with conflict emphasizing both
cooperation and assertiveness to maximize both
parties satisfa tio .
33
Conflict Management Strategies
Exhibit 14.5
34
Managing Conflict
Superordinate goals
Higher-level goals taking priority over specific
individual or group goals.
35
Being a Mediator
Mediator
A third party who
intervenes to help
others manage their
conflict.
Exhibit 14.6
36
Electronic and Virtual Conflict
When teams are geographically dispersed, as is
often the case for virtual teams, team members
tend to experience more conflict and less trust.
Monitor and reduce or eliminate problems as
soon as possible.
When problems arise, express your willingness to
cooperate, and then actually be cooperative.
37
Cohesiveness and Conflict at Whole Foods
The sense of mission and shared values unifies
employees at Whole Foods Market.
Serving on a team fulfilling a mission gives
each team member a sense of purpose.
The o pa ys appre iatio of di ersity ay
be a challenge to cohesiveness.
38
Cohesiveness and Conflict at Whole Foods
How does Whole Foods promote team
cohesiveness? What else can it do?
How should Whole Foods manage the conflict
in its Albuquerque store? What should it do to
minimize similar conflicts in the future?
39
Communicating
Chapter Fifteen
Quote
The single biggest problem with

communication is the illusion that it has taken
place.
G.B. Shaw
2
Learning Objectives
LO 1 Discuss important advantages of two-way
communication.
LO 2 Identify communication problems to avoid.
LO 3 Describe when and how to use the various
communication channels.
LO 4 Summarize ways to become a better
sender and receiver of information.
3
LO 5 Explain how to improve downward,
upward, and horizontal communication.
LO 6 Summarize how to work with the company
grapevine.
LO 7 Describe the boundaryless organization
and its advantages.
4
Interpersonal Communication
Communication
The transmission of information and meaning
from one party to another through the use of
shared symbols.
5
The sender initiates the process by conveying information
to the receiverthe person for whom the message is
intended.
The sender has a meaning he or she wishes to

communicate and encodes the meaning into symbols
(the words chosen for the message).
Then the sender transmits, or sends, the message

through some channel, such as a verbal or written
medium.
6
Interpersonal Communication (cont.)
The receiver decodes the message and attempts to

i terpret the se ders ea i g.
The receiver may provide feedback to the sender by

e codi g a essage i respo se to the se ders
message.
7
Noise Examples
Interference in the Ringing telephones.
system. Thoughts about
Blocks perfect other things.
understanding . Simple fatigue or
stress.
8
One-Way Communication
One-way communication
A process in which information flows in only
one directionfrom the sender to the
receiver, with no feedback loop.
Exhibit 15.1
9
Two-Way Communication
A process in which
information flows in
two directionsthe
receiver provides
feedback, and the
sender is receptive
to the feedback.
10
Question
___________ is the process of withholding,
ignoring, or distorting information
A. Perception
B. Filtering
C. Acuity
D. Discernment
11
Communication Pitfalls
The process of receiving

and interpreting
Perception information.
The process of
withholding, ignoring, or
Filtering distorting information.
12
Oral and Written Channels
Oral communication
Includes face-to-face discussion, telephone
conversations, and formal presentations and
speeches.
Written communication
Includes e-mail, memos, letters, reports,
computer files, and other written
documents.
13
Oral Communication
Advantages
Questions can be asked and answered.
Feedback is immediate and direct.
More persuasive.
Disadvantages
It can lead to spontaneous, ill-considered
statements (and regret).
There is no permanent record of it.
14
Written Communication
Advantages
Message can be revised.
Provides for a permanent record.
Message unchanged even if relayed.
Receiver has more time to analyze the message.
Disadvantages
Sender has no control over where, when, or if the
message is read.
Sender does not receive immediate feedback.
Receiver may not understand parts of the message.
15
Electronic Media
Teleconferencing
Groups of people in different locations interact
over telephone lines and perhaps also see one
another on monitors as they participate in group
discussions (videoconferencing).
16
Advantages of Electronic
Communication
The sharing of more information.
The speed and efficiency in delivering routine

messages to large numbers of people across vast
geographic areas.
Can save companies untold amounts of paper,

postage, meetings, travel budgets, conference calls.
17
Disadvantages of Electronic
Communication
Difficulty of solving complex problems that require

more extended, face-to-face interaction.
Inability to pick up subtle, nonverbal, or inflectional
clues about what the communicator is thinking or
conveying.
Electronic messages sometimes are seen by those for

whom they are not intended.
18
The Virtual Office
A mobile office in which people can work
anywhere, as long as they have the tools to
communicate with customers and colleague.
There are numerous, minimally short term,
benefits associated with virtual offices.
The longer term impact on productivity and
morale is still in question.
19
Media Richness
The degree to which a communication
channel conveys information.
Exhibit 15.2
20
Adding Power to Your Presentation
1. Spend adequate time on content.
2. Clearly understand your objective.
3. Tell the audience the purpose of the
presentation.
4. Provide meaning, not just data.
5. Practice, practice, practice.
21
Adding Power to Your Presentation
(Continued)
6. Remember that a presentation is more like a
conversation than a speech.
7. Remember eye contact.
8. Allow imperfection.
9. Be prepared for tough questions.
10. Provide a crisp wrap-up to a question-and-
answer session.
22
Nonverbal Skills
1. Use time
appropriately.
2. Make your office
arrangement
conducive to open
communication.
3. Remember your body
language.
23
Listening
Reflection
Process by which a
person states
what he or she
believes the other
person is saying.
e.g., So hat
youre sayi g is
24
Ten Keys to Effective Listening
Judge
Find an area Hold your Listen for
content, not
of interest. fire. ideas.
delivery.
Resist Exercise your Keep your

Be flexible.
distraction. mind. mind open.
Capitalize on
Work at
thought
listening.
speed.
25
Observing
A vital source of useful observations comes
from personally visiting people, plants, and
other locations to get a firsthand view.
You must accurately interpret what you
observe.
26
Organizational Communication
Downward
communication
Information that
flows from higher to
lower levels in the
orga izatio s
hierarchy.
Exhibit 15.5
27
Coaching
Dialogue with a goal of helping another be more
effective and achieve his or her full potential on
the job.
Open-book management
Practice of sharing with employees at all levels of
the organization vital information previously
ea t for a age e ts eyes only.
28
Upward communication
Information that flows from lower to
higher le els i the orga izatio s
hierarchy.
May be facilitated by techniques
such as MBWA.
Management must not hold a
grudge if they receive negative
information.
29
Horizontal communication
Information moving between people on the same
hierarchical level.
Allows sharing of information, coordination, and
problem solving among units.
Helps solve conflicts.
Provides social and emotional support to people.
30
Social Enterprise
Co fusio Still Surrou ds the Social E terprise
Concept
The Twin Cities chapter of the Social Enterprise
Alliance and local practitioners worked together to
identify a simple definition of social enterprise.
They defined a social enterprise as a y orga izatio
that sells products and services in order to achieve
its social purpose.
31
Co fusio Still Surrou ds the Social E terprise
Concept
Can you identify some organizations that fit both of
the criteria of (1) officially having a social purpose
and (2) selling products or services?
Assume that Khan Academy wanted to move from
being a nonprofit to a social enterprise. What
products or services could it sell?
32
Question
What is the social network of informal
communications?
A. Second Life
B. Facebook
C. Grapevine
D. Scuttlebutt
33
Informal Communication
Grapevine
The social network of informal communications.
Provides people with information.
Helps them solve problems.
Teaches them how to do their work successfully.
34
Managing Informal Communication
Do t allo alicious
gossip.
Managers should talk to
the key people involved
to get the facts and
their perspectives.
Neutralize rumors once
they have started.
35
Managing Informal Communication
Suggestions for preventing rumors from
starting include:
Explaining events that are important but have not
been explained.
Dispelling uncertainties by providing facts.
Working to establish open communications and
trust over time.
36
Boundarylessness
Boundaryless organization
An organization in which there are no barriers to
information flow.
Implies information available as needed moving
quickly and easily enough so that the organization
functions far better as a whole than as separate
parts.
37
Formal and Informal Communication at Yahoo
CEO Marissa Mayers i itial o ths at Yahoo

showed her to be concerned about formal and
informal communication.
To increase informal communication, Mayer
ended work-at home arrangements.
38
Formal and Informal Communication at Yahoo
How could Mayer make her downward
communication more effective?
How could Yahoo make informal
communication among employees more
constructive?
39
Managerial
Control
Chapter Sixteen
Quote
More than at any time in the past, companies

will not be able to hold themselves together
with the traditional methods of control:
hierarchy, systems, budgets, and the like. . . . The
bonding glue will increasingly become
ideological.
Collins and Porras

2
Learning Objectives
LO 1 Explain why companies develop control systems for
employees.
LO 2 Summarize how to design a basic bureaucratic control system.
LO 3 Describe the purposes for using budgets as a control device.
LO 4 Define basic types of financial statements and financial ratios
used as controls.
LO 5 List procedures for implementing effective control systems.
LO 6 Identify ways in which organizations use market control
mechanisms.
LO 7 Discuss the use of clan control in an empowered organization.
3
Managerial Control
Control
Any process that directs the activities of
individuals toward the achievement of
organizational goals.
4
Symptoms of an
Out-of-Control Company
Exhibit 16.1
5
Managerial Control
Bureaucratic control
The use of rules, regulations, and authority to
guide performance.
Market control
Control based on the use of pricing mechanisms
and economic information to regulate activities
within organizations.
Clan control
Control based on the norms, values, shared goals,
and trust among group members.
6
The Control Cycle
Setting performance
standards.
Taking action to
correct problems Measuring
and reinforce performance.
successes.
Comparing
performance against
the standards and
determining
deviations.
7
Setting Performance Standards
Standard
Expected performance for a given goal:
a target that establishes a desired
performance level, motivates
performance, and serves as a
benchmark against which actual
performance is assessed.
8
Measuring Performance
Written reports
Oral reports
Personal observation
9
Comparing Performance with
the Standard
A managerial principle stating that

Principle control is enhanced by
of concentrating on the exceptions to
exception or significant deviations from the
expected result or standard.
10
After-action review
After-action review
A frank and open-minded discussion of four basic
questions aimed at continuous improvement.
Exhibit 16.4
11
Approaches to Bureaucratic Control
Feedforward control
The control process used before operations begin, including
policies, procedures, and rules designed to ensure that
planned activities are carried out properly.
Concurrent control
The control process used while plans are being carried out,
including directing, monitoring, and fine-tuning activities as
they are performed.
Feedback control
Control that focuses on the use of information about previous
results to correct deviations from the acceptable standard.
12
Social Enterprise
Beyond Counting: Alternative Ways to Measure
Social Impact
Many social enterprises measure their impact by
counting the number of people they serve.
Despite its popularity, counting outcomes is an
incomplete measure.
Measures beyond counting are being developed
and include the following.
Impact value chain (IVC).
Progress Out of Poverty Index (PPI).
B Impact Assessment (BIA).
13
Beyond Counting: Alternative Ways to Measure
Social Impact
Assume the role of Devil's advocate: Why is
counting outcomes an adequate way of assessing
a social enterprise's social impact?
If you ran a social enterprise to reduce poverty in
India, which of the three measures (IVC, PPI, or
BIA) would you likely use to measure your
enterprise's social impact?
14
The Role of Six Sigma
At a six-sigma level, a process is producing fewer

than 3.4 defects per million, which means it is
operating at a 99.99966 percent level of accuracy.
Six Sigma companies have close to zero defects,

substantially lower production costs and much
higher levels of customer satisfaction.
15
The Role of Six Sigma
Exhibit 16.5
16
Question
___________ is an evaluation of the
effectiveness and efficiency of various systems
within an organization.
A. External audit
B. Internal audit
C. Management audit
D. HR Audit
17
Management Audits
External audit
Management An evaluation conducted by
audit one organization, such as a
An evaluation of CPA firm, on another.
the effectiveness
and efficiency of Internal audit
various systems A periodic assessment of a
within an o pa s ow pla i g,
organization. organizing, leading, and
controlling processes.
18
Management Audits (Continued)
Internal Audit
Assesses what the company has done for itself.
What it has done for its customers or other recipients of its
goods or services.
External Audit
Investigates other organizations for possible merger or
acquisition.
Determines the soundness of a company that will be used
as a major supplier.
Discovers the strengths and weaknesses of a competitor to
maintain or better exploit the competitive advantage of
the investigating organization.
19
Budgetary Controls
Budgeting
The process of investigating what is being done
and comparing the results with the corresponding
budget data to verify accomplishments or remedy
differences.
Also called budgetary controlling.
20
A Sales-Expense Budget
Exhibit 16.6
21
Types of Budgets
Sales Production
Cost Cash
Capital Master
22
Types of Budgets
Accounting audits
Procedures used to
verify accounting
reports and
statements.
23
Activity-Based Costing
A method of cost accounting designed to
identify streams of activity and then to
allocate costs across particular business
processes according to the amount of time
employees devote to particular activities.
24
Activity-Based Costing
Example: ABC Medical Clinic
Exhibit 16.7
25
Financial Controls
Balance sheet
A report that shows the financial picture of a
company at a given time and itemizes assets,
lia ilities, a d sto kholde s e uit .
Assets = Liabilities + Stockholders equity
26
Financial Controls
Assets
The values of the various items the corporation
owns.
Liabilities
The amounts a corporation owes to various
creditors.
Stockholde s e uity
The a ou t a ui g to the o po atio s ow e s.
27
The Profit and Loss Statement
Profit and loss statement
An itemized financial statement of the income and
e pe ses of a o pa s ope atio s.
Controlling by profit and loss is most commonly
used for the entire enterprise and, in the case of a
diversified corporation, its divisions.
28
The Profit and Loss Statement
Exhibit 16.9
29
Financial Ratios
Current ratio Debt-equity ratio

A liquidity ratio that A leverage ratio that
indicates the extent to i di ates the o pa s
which short term assets ability to meet its long-
can decline and still be term financial
adequate to pay short- obligations.
term liabilities.
Return on investment
A ratio of profit to capital used, or a rate of
return from capital.
30
Question
___________ is focusing on short-term earnings
and profits at the expense of longer-term
strategic obligations.
A. Management amblyopia
B. Personnel myopia
C. Management myopia
D. Short-sighted angst
31
Using Financial Ratios
Management myopia
Focusing on short-term
earnings and profits at
the expense of longer-
term strategic
obligations.
32
The Downside of Bureaucratic Control
Rigid bureaucratic behavior
Tactical behavior
Resistance to control
33
Designing Effective Control Systems
Provide
Establish Ensure
adequate
valid acceptability
information
performance to
to
standards. employees.
employees.
Maintain open Use multiple

communication. approaches.
34
Balanced Scorecard
A control system combining four sets of
performance measures.
Financial.
Customer.
Business process.
Learning and growth.
35
Examples of Market Control
Exhibit 16.11
36
Guidelines for Managing in an
Empowered World
Put control where the operation is.
Use real-time rather than after-the-fact controls.
Rebuild the assumptions underlying management

control to build on trust rather than distrust.
Move to control based on peer norms.
Rebuild the incentive systems to reinforce

responsiveness and teamwork.
37
Was ROWE a Problem for Best Buy or Part of
the Solution?
When Hu e t Jol e a e Best Bu s CEO, he
focused operating efficiently. He found the
o pa s ROWE p og a i o siste t with his
approach.
The Results Oriented Work Environment (ROWE)
program was developed to promote employee
discussion of goals and work arrangements with their
manager.
38
Was ROWE a Problem for Best Buy or Part of
the Solution?
How well did ROWE meet the criteria of an
effective performance system? Will
eliminating it be more or less effective? Why?
How can clan control help Best Buy improve
its performance?
39
Managing
Technology
and Innovation
Chapter Seventeen
Quote
The imperatives of technology and

organization, not the images of ideology,
are what determine the shape of economic
society.
John Kenneth Galbraith
2
Learning Objectives
LO 1 List the types of processes that spur
development of new technologies.
LO 2 Describe how technologies proceed
through a life cycle.
LO 3 Discuss ways to manage technology for
competitive advantage.
LO 4 Summarize how to assess technology
needs.
3
LO 5 Identify alternative methods of pursuing
technological innovation.
LO 6 Define key roles in managing technology.
LO 7 Describe the elements of an innovative
organization.
LO 8 List characteristics of successful
development projects.
4
Technology and Innovation
Technology
The systematic
application of
scientific
knowledge to a
new product,
process, or service.
5
Question
___________ is a change in method or
technology.
A. Innovation
B. Quality
C. Speed
D. Service
6
Innovation
Changes in method or technology.
Positive, useful departure from previous ways of
doing things.
Three types of innovation:
Product innovation.
Process innovation.
Business model innovation.
7
Exhibit 17.1
8
Social Enterprise
Detecting Landmines and Saving Lives
Landmines kill 4,000 people a year.
Selene Biffis orga izatio de eloped the
podte tor that houses a etal dete tor,
ground-penetrating radar, and sensor for
vapors from explosives.
The podte tor is ade fro a porta le
water container and other off-the-shelf
components. It can be carried on the end a
stick.
9
Detecting Landmines and Saving Lives
How would you classify Bibak's work? Does it
represent a process or product innovation (or
both)?
To what degree has Bibak created an
innovative business model?
10
Forces Driving
Technological Development
Must be a need, or demand, for the
technology.
Meeting the need must be theoretically

possible, and the knowledge to do so must be
available from basic science.
Must be able to convert the scientific
knowledge into practice in both engineering
and economic terms.
11
Forces Driving
Technological Development (cont.)
The funding, skilled labor, time, space, and
other resources needed to develop the
technology must be available.
Entrepreneurial initiative is needed to

identify and pull all the necessary elements
together.
12
Technology Life Cycle
A predictable pattern followed by a
technological innovation, from its inception
and development to market saturation and
replacement.
Exhibit 17.2
13
Diffusion of Technological Innovations
Exhibit 17.3
14
Diffusion of Technological Innovations
An innovation will spread quickly if it:

Has a great advantage over its predecessor.
Is compatible with existing systems,
procedures, infrastructures, and ways of
thinking.
Has less rather than greater complexity.
Can be tried and tested easily without
significant cost or commitment.
Can be observed and copied easily.
15
Advantages and Disadvantages of
Technology Leadership
Exhibit 17.4
16
Technology Followership
A a agers de isio o he to adopt e
technology also depends on the potential
benefits of the new technology, as well as the
orga izatio s te h ology skills.
Following the technology leader can save
development expense.
17
Dy a i For es of a Te h ologys
Competitive Impact
Exhibit 17.5
18
Question
What is the process of clarifying the key
technologies on which an organization
depends?
A. Managerial audit
B. Benchmarking
C. External audit
D. Technology audit
19
Assessing Technology Needs
Technology audit
Process of clarifying the
key technologies on
which an organization
depends.
20
Measuring Current Technologies
Emerging technologies are still under

development and thus are unproved.
Pacing technologies have yet to prove their full

value but have the potential to alter the rules of
competition by providing significant advantage.
21
Measuring Current Technologies
Key technologies have proved effective, but

they also provide a strategic advantage
because not everyone uses them.
Base technologies are those that are

commonplace in the industry; everyone must
have them to be able to operate.
22
Question
What is the process of comparing the
orga izatio s pra ti es a d te h ologies
with those of other companies?
A. Benchmarking
B. Quality control
C. Scanning
D. Environmental scanning
23
Assessing External
Technological Trends
Benchmarking
The pro ess of o pari g the orga izatio s
practices and technologies with those of other
companies.
Scanning
Focuses on what can be done and what is being
developed.
Places greater emphasis on identifying and
monitoring the sources of new technologies for an
industry.
24
Framing Decisions about
Technological Innovation
Exhibit 17.6
25
Sourcing and Acquiring
New Technologies
Make-or-buy decision
The question an organization asks itself about
whether to acquire new technology from an
outside source or develop it itself.
26
New Technologies
Internal development Purchase
Contracted development Licensing
Research partnerships
Technology trading
and joint ventures
Acquisition of the owner

of the technology
27
New Technologies
Managers should ask the following basic
questions:
Is it important Are the time, Is the
(and possible) skills, and technology
in terms of resources for readily
competitive internal available
advantage that development outside the
the technology available? company?
remain
proprietary?
28
Technology Acquisition Options
Exhibit 17.7
29
Question
Which executive is in charge of information
technology strategy and development?
A. COO
B. CEO
C. CTO
D. CIO
30
Technology and Managerial Roles
Chief information officer (CIO)
Executive in charge of information technology
strategy and development.
Coordinates the technological efforts of the
various business units.
Identifies ways that technology can support the
o pa ys strategy.
Supervises new-technology development.
31
Technology and Managerial Roles
Technical innovator
A person who develops a new technology or has the
key skills to install and operate the technology.
Product champion
A person who promotes a new technology
throughout the organization in an effort to obtain
acceptance of and support for it.
Executive champion
An executive who supports a new technology and
protects the product champion of the innovation.
32
Requirements for Innovation
Exhibit 17.8
33
Organizing for Innovation
Unleashing creativity involves encouraging
creativity and celebrating failure.
Bureaucracy busting is necessary because
bureaucracy is the enemy of innovation.
34
3Ms Rules for a I o ati e Culture
Exhibit 17.9
35
Organizing for Innovation
Development project
A focused organizational effort to create a new
product or process via technological advances.
Sociotechnical systems
An approach to job design that attempts to
redesign tasks to optimize operation of a new
te h ology hile preser i g e ployees
interpersonal relationships and other human
aspects of the work.
36
Compensation Practices in Traditional
and Advanced Manufacturing Firms
Exhibit 17.10
37
Tesla Motors as Innovator and Technology
Partner
Tesla Motors is a start-up operating an industry
that requires an enormous amount of capital.
Tesla, in partnership with Panasonic, has initiated
construction of a massive electric battery factory.
The new factory is expected to produce batteries
at lower costs due to innovative manufacturing
and economies of scale.
38
Tesla Motors as Innovator and Technology
Partner
How does Tesla Motors source and acquire
new technologies? What are the advantages
of this approach?
Ho ould you ad ise Teslas a agers to
continue unleashing creativity as the company
grows?
39
Creating and
Leading Change
Chapter Eighteen
Quote
The world hates change, yet that is the only

thing that has brought progress.
Charles Kettering
M interest is in the future because I am going

to spend the rest of my life there.
Charles Kettering
2
Learning Objectives
LO 1 Discuss what it takes to be world class.
LO 2 Describe how to manage and lead change
successfully.
LO 3 Describe strategies for creating a
successful future.
3
Becoming World Class
Being world class

requires applying:
The best and latest World-class companies
knowledge and create high-value
ideas. products and earn
Having the ability to superior profits over
operate at the the long run.
highest standards of
any place anywhere.
4
Sustainable, Great Features
Great companies
Have strong core values.
Are driven by goals.
Change continuously.
Focus on beating
themselves, not on
beating the competition.
5
Built-to-Last Companies
Core Ideologies in
Exhibit 18.1
6
The Tyranny of the Or
The belief that things must be

either A or B and cannot be both;
that only one goal and not
another can be attained.
7
The Tyranny of the Or
Examples
You must choose either change or stability.
Be conservative or bold.
Have control and consistency or creative freedom.
Do well in the short term or invest for the future.
Plan methodically or be opportunistic.
Create shareholder wealth or do good for the
world.
Be pragmatic or idealistic.
8
The Genius of the And
Genius of the and; Examples
organizational Purpose beyond profit
ambidexterity and pragmatic pursuit
of profit.
Ability to achieve
Relatively fixed core
multiple objectives values and vigorous
simultaneously. change and movement.
Clear vision and
direction and
experimentation.
9
Achieving Sustained Greatness
Strategy
Focused on customers,
continually fine-tuned based on
marketplace changes, and clearly
communicated to employees.
Execution
Good people, with decision-
making authority on the front
lines, doing quality work and
cutting costs.
10
Achieving Sustained Greatness
Culture
One that motivates, empowers people to
innovate, rewards people appropriately, entails
strong values, challenges people, and provides a
satisfying work environment.
Structure
Making the organization easy to work in and easy
to work with, characterized by cooperation and
the exchange of information and knowledge
throughout the organization.
11
Organization Development
Organization development (OD)
The system wide application of behavioral science
knowledge to develop, improve, and reinforce the
strategies, structures, and processes that lead to
organizational
effectiveness.
12
Strategic interventions
Helping organizations conduct mergers and
acquisitions, change their strategies, and
develop alliances.
Technostructural interventions
Relating to organization structure and design,
employee involvement, and work design.
13
Human resources management
interventions
Attracting good people, setting goals, and
appraising and rewarding performance.
Human process interventions

Conflict resolution, team building,
communication, and leadership.
14
Managing Change
Shared leadership is crucial to the success of
most change efforts.
People must be not just supporters of change
but also implementers.
An essential task is to motivate people fully to
keep changing in response to new business
challenges.
15
Question
O e reaso for a e plo ees resista e to

change is ___________.
A. Inertia
B. Quality
C. Speed
D. Service
16
General Reasons
for Resistance to Change
Inertia Timing
Surprise Peer pressure
17
Change-Specific Reasons
for Resistance to Change
Self-interest Misunderstanding
Different assessments Management tactics
18
A General Model for
Managing Resistance
Unfreezing
Realizing that current practices are inappropriate and that
new behavior is necessary.
Performance gap - The difference between actual
performance and desired performance.
Moving
Instituting the change.
Refreezing
Strengthening the new behaviors that support the change.
19
Force-field Analysis
An approach to implementing the
unfreezing/ moving/refreezing model by
identifying the forces that prevent people
from changing and those that will drive
people toward change.
20
A General Model for
Managing Resistance
Exhibit 18.4
21
Methods for Managing
Resistance to Change
Participation
Education and Facilitation and
and
communication support
involvement
Explicit and
Negotiation Manipulation
implicit
and rewards and cooptation
coercion
22
Harmonizing Multiple Changes
There are no silver bullets or single-shot methods of

changing organizations.
Single shots rarely hit a challenging target.
Usually many issues need simultaneous attention.
Any single, small change may be absorbed by the

prevailing culture and disappear.
23
Harmonizing Multiple Changes
Total organization change
Introducing and sustaining multiple policies,
practices, and procedures across multiple units
and levels.
24
Sources of Complacency
Exhibit 18.7
25
Exhibit 18.6
Leading Change
26
Social Enterprise
Using Co-creation to Build a Better Future
Co-creation is when diverse stakeholders come
together to develop new practices.
Stephanie Schmidt, Managing Director of Ashoka
Europe, believes the social sector can learn from
hat o pa ies do ell: It is s ale, ut also
efficiency in terms of operations, product
de elop e t, distri utio , as ell as i o atio .
27
Using Co-creation to Build a Better Future
Can you think of additional examples in which
diverse organizations have joined forces to
address social or environmental problems?
Do you believe this co-creation movement is
sustainable or a passing fad? Explain.
28
Shaping the Future
Reactive change
A change effort that
occurs under pressure;
problem-driven change.
Proactive change
A change effort that is
initiated before a
performance gap has
occurred.
29
Creating the Future
Adapters Shapers
Companies that take Companies that try to
the current industry change the structure
structure and its of their industries,
evolution as givens, creating a future
and choose where to competitive landscape
compete. of their own design.
30
Exhibit 18.8
Vast Opportunity
31
Which Should You and
Your Firm Do?
Preserve old
Lock in old markets or
advantages or create
create new markets?
new advantages?
Take the path of

Be only a
greatest familiarity or
benchmarker or a
the path of greatest
pathbreaker?
opportunity?
32
Which Should You and
Your Firm Do?
Place priority on
Do only what seems
short-term financial
doable or what is
returns or on making
difficult and
a real, long-term
worthwhile?
impact?
Change what is or Look to the past or

reate hat is t? live for the future?
33
Learning and Leading
The philosophy of continuous learning helps a
company achieve lower cost, higher quality,
better service, superior innovation, greater
sustainability, and greater speedand helps
one grow and develop on a personal level.
34
Learning Cycle:
Explore, Discover, Act
Exhibit 18.9
35
Exhibit 18.10
Level 5 Hierarchy
36
A Collaborative,
Sustainable Future?
As you lead and learn into the future,
you should:
Bear in mind the long run, in addition

to the immediate demands you must
face.
Consider collaboration as a key to
sustained success.
37
Shell Oils Ma agers Fa e-off with Investors Over
Climate Change
Since its founding in 1907, Shell has adapted
successfully to a myriad of external pressures.
Many believe that current social,
environmental, and political forces are
combining in a way that will force disruptive
change in the energy industry.
38
Shell Oils Ma agers Fa e-off with Investors Over
Climate Change
How much influence do external stakeholders
e ert o Shells top a age e t?
Do you think Shell should maintain its current
pace of change or move faster toward greener
energy technologies?
39

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Managing and

Ma age e t means, in the last analysis, the

Collaboration Across Borders

Companies must realize that the need to serve the

Innovation Quality Service

The excellence of your

Today quality is about preventing defects

Conceptual and Interpersonal and

Be both a specialist and a generalist.

The rite a a tio pla . The do t just thi k, the

They take responsibility for decisions.

They focus on opportunities rather than problems.

The essence of a business is outside itself.

Inputs- Goods and

The economic Interest and inflation

Some managers may be

Regulators include agencies such as:

Occupational Safety and Health

Family leave, domestic partner benefits, flexible

There are many

Conditions that prevent new

The set of In strong cultures, the

The usi ess e e uti e is professio a

Generating Alternative Solutions

Making the Choice

Implementing the Decision

Evaluating the Decision

Discrepancies may be detected by comparing

Ideas that have been seen or tried before.

New, creative solutions designed specifically

Involves determining the value or

Alternative courses of action that can

A decision realizing the best

Achieving the best possible balance

Choosing an option that is

Estimate the time needed for each step.

Assign responsibility for each step to specific individuals.

Feedback that Negative feedback

Technical and structural actions

Evaluation and diagnostic actions

Psychological and cultural actions

Manage your destiny, or someone else will.

Step 1 Situational Analysis

Step 2 Alternative Goals and Plans

Step 3 Goal and Plan Evaluation

Step 4 Goal and Plan Selection

Managers evaluate the advantages, disadvantages,

Managers prioritize those goals and even eliminate

Managers must consider carefully the implications

Managers will The evaluation Scenarios may

Strategic planning- Set Strategic goals- Major

How will we get there?

How will we win in the marketplace?

How fast will we move and in what sequence will we make

How will we obtain financial returns?

Define strategic risks.

Assess organization capabilities.

Develop an implementation agenda.

Create an implementation plan.

It is truly e ough said that a orporatio has o

Henry David Thoreau

A desire for simple, ui k fix solutio s to ethical problems.

Behaving ethically requires not

Economic growth and development that