Angelo Kinicki
Arizona State University
Kent State University
Brian K. Williams
management
NINTH EDITION
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MANAGEMENT: NINTH EDITION
Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2020 by McGraw-Hill
Education. All rights reserved. Printed in the United States of America. Previous editions © 2018, 2016,
and 2013. No part of this publication may be reproduced or distributed in any form or by any means, or
stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education,
including, but not limited to, in any network or other electronic storage or transmission, or broadcast for
distance learning.
Some ancillaries, including electronic and print components, may not be available to customers outside
the United States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 LWI 21 20 19
ISBN 978-1-260-07511-3
MHID 1-260-07511-7
Editorial Director: Michael Ablassmeir
Product Developer: Anne Ehrenworth
Executive Marketing Manager: Debbie Clare
Content Project Managers: Harvey Yep (Core)/Keri Johnson (Assessment)
Buyer: Susan K. Culbertson
Design: Jessica Cuevas
Content Licensing Specialists: Carrie Burger
Cover Image: ©Olivier Renck/Aurora/Getty Images
Compositor: Aptara®, Inc.
All credits appearing on page or at the end of the book are considered to be an extension of the
copyright page.
Library of Congress Cataloging-in-Publication Data
Names: Kinicki, Angelo, author. | Williams, Brian K., 1938- author.
Title: Management : a practical introduction / Angelo Kinicki, Arizona State
University, Brian K. Williams.
Description: Ninth edition. | New York, NY : McGraw-Hill Education, [2020]
Identifiers: LCCN 2018047636| ISBN 9781260075113 (alk. paper) | ISBN
1260075117 (alk. paper)
Subjects: LCSH: Management.
Classification: LCC HD31 .K474 2020 | DDC 658—dc23 LC record available at
https://lccn.loc.gov/2018047636
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website
does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education
does not guarantee the accuracy of the information presented at these sites.
mheducation.com/highered
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brief contents
Walkthrough Preface of 9e xv
PART 1
9 Human Resource Management: Getting the Right
People for Managerial Success 322
Introduction
1
The Exceptional Manager: What You Do, How You
Do It 2
2
Management Theory: Essential Background for the
Successful Manager 42
PART 2
The Environment of Management
3 The Manager’s Changing Work Environment and
Ethical Responsibilities: Doing the Right Thing 76
4 Global Management: Managing across Borders 116
10 Organizational Change and Innovation: Lifelong
Challenges for the Exceptional Manager 374
PART 5
Leading
11 Managing Individual Differences and Behavior:
Supervising People as People 408
12 Motivating Employees: Achieving Superior
Performance in the Workplace 456
13 Groups and Teams: Increasing Cooperation,
Reducing Conflict 502
14 Power, Influence, and Leadership: From Becoming a
Manager to Becoming a Leader 534
PART 3
Planning
5 Planning: The Foundation of Successful
Management 156
6 Strategic Management: How Exceptional Managers
Realize a Grand Design 188
Learning Module 1: Entrepreneurship 220
7 Individual and Group Decision Making: How
Managers Make Things Happen 238
15 Interpersonal and Organizational Communication:
Mastering the Exchange of Information 580
PART 6
Controlling
16 Control Systems and Quality Management:
Techniques for Enhancing Organizational
Effectiveness 630
Learning Module 2: The Project Planner’s Toolkit:
Flowcharts, Gantt Charts, and Break-Even Analysis 681
PART 4
Organizing
8 Organizational Culture, Structure, and Design:
Building Blocks of the Organization 280
Chapter Notes CN-1
Name Index IND-1
Organization Index IND-5
Glossary/Subject Index IND-11
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dedication
To Joyce Kinicki, the love of my life, best friend, and the wind beneath
my wings.
—Angelo
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about the author
Courtesy of Angelo Kinicki
Angelo Kinicki is an emeritus professor of management and held the
Weatherup/Overby Chair in Leadership from 2005 to 2015 at the W.P. Carey
School of Business at Arizona State University. He joined the faculty in 1982,
the year he received his doctorate in business administration from Kent State
University. He was inducted into the W.P. Carey Faculty Hall of Fame in 2016.
Angelo currently is the Dean's Scholar in Residence at Kent State University.
He is teaching in the MBA program and serves on the Dean's National Advisory
Board.
Angelo is the recipient of six teaching awards from Arizona State
University, where he taught in its nationally ranked MBA and PhD programs.
He also received several research awards and was selected to serve on the
editorial review boards for four scholarly journals. His current research
interests focus on the dynamic relationships among leadership;
organizational culture; organizational change; and individual, group, and
organizational performance. Angelo has published over 95 articles in a
variety of academic journals and proceedings and is co-author of eight
textbooks (32 including revisions) that are used by hundreds of universities
around the world. Several of his books have been translated into multiple
languages, and two of his books were awarded revisions of the year by
McGraw-Hill. Angelo was identified as being among the top 100 most
influential (top .6%) Organizational Behavioral authors in 2018 out of a total
of 16,289 academics.
Angelo is a busy international consultant and is a principal at Kinicki and Associates, Inc., a
management consulting firm that works with top management teams to create organizational
change aimed at increasing organizational effectiveness and profitability. He has worked with
many Fortune 500 firms as well as numerous entrepreneurial organizations in diverse
industries. His expertise includes facilitating strategic/operational planning sessions,
diagnosing the causes of organizational and work-unit problems, conducting organizational
culture interventions, implementing performance management systems, designing and
implementing performance appraisal systems, developing and administering surveys to
assess employee attitudes, and leading management/executive education programs. He
developed a 360° leadership feedback instrument called the Performance Management
Leadership Survey (PMLS) that is used by companies throughout the world.
Angelo and his wife of 37 years, Joyce, have enjoyed living in the beautiful Arizona desert
for 36 years. They are both natives of Cleveland, Ohio. They enjoy traveling, hiking, and
spending time in the White Mountains with Gracie, their adorable golden retriever. Angelo also
has a passion for golfing.
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new to the ninth edition
We are pleased to share these exciting updates
and new additions!
Two major changes were implemented in the ninth edition. The first involved a new strategic
career readiness theme throughout the product to address employers’ concerns about
students graduating without being career ready. The second was to extend our emphasis on
the practical application of management. Below is a review of these substantive changes.
Career Readiness Theme Promotes Employable Skills
Global surveys of CEOs and recruiters reveal that college graduates do not possess the knowledge, skills, and attributes desired by employers, resulting in a lack of career readiness. We want
to promote the development of your students’ career readiness competencies so that they are
more employable. Therefore, we’ve introduced a new strategic theme of career readiness to create a link between the principles of management and the objective of providing students with the
tools they need to flourish on their chosen employment path. This integration takes five forms:
• The career readiness theme is thoroughly introduced in Chapter 1. We introduce a major
section, 1.7, entitled “Building Your Career Readiness,” and present a model of career
readiness along with a table of competencies desired by employers.
• Over 40 of the product’s 66 Self-Assessments pertain directly to a career readiness
competency. Feedback from these self-assessment can be used to assist students in
creating a development plan focused on being career ready.
• Each chapter concludes with a new section entitled “Career Corner: Managing Your
Career Readiness.” This section serves two purposes. First, it assists students in linking
chapter content with the competencies of career readiness, which provides a powerful
association between the principles of management and the skills desired by employers.
Second, this material provides students with practical tips for developing targeted career
readiness competencies. We believe students can become more career ready by following
the advice in these Career Corner sections.
• We developed a targeted set of exercises in Connect, our online teaching and learning
platform, that give students hands-on experience working with the career readiness
competencies desired by employers.
• We created a set of experiential exercises for each chapter in our unique Teaching
Resource Manual that are targeted to develop students’ career readiness competencies.
Extending the Practical Application of Management Concepts
Practical application has always been a major feature of this product. We want students to
understand how to use what they are learning in both their personal and professional lives.
We extend our emphasis on practicality by:
• Every chapter begins with a new feature entitled “Manage U.” It replaces the Manager’s
Toolbox and provides students with actionable tips for applying the material in each chapter.
• Each chapter includes two new boxes that provide testimonials from millennials about
their experiences with effective and ineffective management. “I wish I . . .” boxes
illustrate real-world examples in which students recall an instance when they or their
boss could have better applied certain management concepts. “I’m glad I . . .” boxes
discuss positive applications of management concepts.
• To promote mastery of management concepts, we developed a continuing case on Uber
for each chapter. Application learning can be assessed in Connect.
• To promote critical thinking and problem solving, a key career readiness competency,
we revamped our Management in Action Cases. They now focus on higher levels of
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learning by asking students to solve real organizational problems using relevant
management concepts.
Fully revised Teaching Resource Manual (TRM) provides complete guidance for instructors
The TRM was new to the eighth edition and was developed to provide instructors with a
turnkey solution to fostering a discussion-based and experiential learning experience. It
amounts to a traditional instructor’s manual on steroids by providing suggestions for
creatively teaching topics, suggested videos outside of the McGraw Hill arsenal (e.g.,
YouTube, The Wall Street Journal, etc.), group exercises, lecture enhancers, and supplemental
exercises that correspond with cases and Self-Assessments. The TRM has been praised by
instructors around the world for its depth, navigation, and experiential-based content. We
improved this resource based on feedback from faculty.
Our first change acknowledges that many of us teach online or in larger, in-person classes
(sometimes both!). The ninth edition TRM not only includes revised activities for the traditional
classroom, but also includes new online and large, in-person class activities for every chapter.
The next set of changes involve providing follow-up activities for the new career
readiness–based exercises in Connect because we believe students need these developmental
activities to increase their career readiness. We also provide in-depth teaching notes for new
Manager’s Hot Seat videos and Application-Based Activities in the form of simulations.
Finally, we provide new web video links for each chapter. These free, short videos allow
instructors to illustrate the practical applications of management principles. We also include
new current online article links instructors can use to discuss material that supplements the text.
“
“
”
The TRM is top of the line.
—Todd Korol,
Monroe Community College
The TRM is by far the most comprehensive and useful on the market. It is very user friendly for both
faculty and students.
”
—Gerald Schoenfeld,
Florida Gulf Coast University
Completely revamped, revised, and updated
chapters
In each chapter, we refreshed examples, research, figures, tables, statistics, and photos, as
well as modified the design to accommodate new changes to this ninth edition. We have
also largely replaced topics in such popular features as Example boxes, Practical Action
boxes, Management in Action cases, and Legal/Ethical Challenges cases.
While the following list does not encompass all the updates and revisions, it does highlight some of the more notable changes.
CHAPTER 1
• New Manage U feature: Using Management Skills for College
Success.
• Section 1.1—New Example box on efficiency versus
effectiveness discusses how Delta Airlines handled an
emergency at Atlanta’s Hartsfield-Jackson Airport. Updated
CEO pay and labor statistics. New example of museum
curator in discussion of rewards of management.
• Section 1.2—New boxed feature “I wish my manager was
more of a leader than a manager.”
• Section 1.3—This section was moved to section 1.7 and
section 1.4 was moved here. Introduces new key term
“nonmanagerial employees.” Updated salary information for
first-line managers. New examples for “for-profit” and
“nonprofit” organizations. New data in “Managers for Three
Types of Organizations.”
• Section 1.4—Section 1.6 became section 1.4, “Roles
Managers Must Play Successfully.” New example of Mary
Bara, CEO of GM, to illustrate managerial work activities. New
Practical Action box on mindfulness. New example of Google
CEO Sundar Pichai in discussion of informational roles.
New to the ninth edition
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• Section 1.5—New running example of Mary Bara used to
explain the skills needed to manage. New boxed interview
feature “I’m glad I have conceptual skills.” New Practical
Action box on developing soft skills.
• Section 1.6—Updated Example box about Airbnb. Introduces
new key terms “information technology application skills” and
“meaningfulness.” New discussion of the Fourth Industrial
Revolution. Updated statistics regarding workforce diversity.
New discussion of Volkswagen and ethical standards.
Updated Practical Action box on cheating. New reference to
sexual harassment in discussion of ethical standards. New
suggestions for building meaning into your life.
• Section 1.7—Entire new section on building career readiness.
Introduces new key terms “attitude,” “career readiness,”
“proactive learning orientation,” and “resilience.” Includes
Figure 1.3 regarding gaps in college graduates and
employers’ assessment of students’ career readiness; Table
1.2 description of KSAOs needed for career readiness; Figure
1.4, Model of Career Readiness; and discussion of
developing career readiness. New Self-Assessment 1.2, To
What Extent Do You Accept Responsibility for Your Actions?
• Section 1.8—New section titled “Career Corner: Managing
Your Career Readiness.” Includes Figure 1.5, Process for
Managing Career Readiness, and review of its application.
• New Management in Action case: Did Major League Baseball
Value Money over Bob Bowman’s Behavior?
• New continuing case on Uber.
CHAPTER 2
• New Manage U feature: What Type of Work Do I Prefer?
• Section 2.1—New Example box explores the successes and
failures of Zappos’ management experiment called “holacracy.”
• Section 2.2—New coverage of Charles Clinton Spaulding’s
role in administrative management.
• Section 2.3—New Example boxes including the new boxed
feature “I’m glad I work in an organization with a Theory Y
culture” and an update to the Example box studying open-plan
offices as an application of the behavioral science approach.
• Section 2.4—New Example box discussing operations
management at Intel.
• Section 2.5—New Example box applying systems thinking.
• Section 2.6—New Example box applying the contingency
viewpoint with manufacturers “pitching” jobs to parents of
college students hoping they’ll influence their children to
consider open positions after high school graduation. A new
Practical Action box exploring Big Data.
• Section 2.7—New boxed feature “I wish my manager
believed in a quality-management viewpoint,” as well as
expanded content to include a deeper discussion of Six
Sigma and ISO 9000, including definitions of both as well as
practical examples of companies using each approach.
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• Section 2.8—Expanded and updated in-content examples to
showcase the three parts of a learning organization as well
as expanded content examples on the three roles managers
play in building learning organizations. Updated company
examples for learning organizations, including a discussion of
Google Buzz, American Express, and Apple.
• New Career Corner feature on Managing Your Career Readiness.
• New Management in Action case: The Decline of Sears.
• New continuing case on Uber.
CHAPTER 3
• New Manage U feature: Increase Ethical Behavior by
Fostering an Ethical Climate.
• Section 3.1—Updated content regarding Millennials and their
search for meaning.
• Section 3.2—Updated content and company applications for
internal stakeholders at SAS and the board of directors at
Facebook.
• Section 3.3—New Example box discussing United Airlines and
its responsibilities to its stakeholders versus customers. New
boxed feature “I wish I kept a closer eye on trends affecting
our suppliers.” Updated statistics regarding unions. New
Example box discussing Amazon’s new headquarters and
whether it will benefit the city chosen. New boxed feature “I’m
glad I kept current on my industry’s general environment.”
Updated Example discussing the Internet of Things. Introduces
new key term “LGBTQ.” New figure showcasing the states in
which marijuana is legal. Various content updates, including
company examples for the task environment (including an
updated list of “America’s Most Hated Companies”) and special
interest groups with a discussion of the #MeToo movement and
international forces such as Brexit. Updated examples for
sociocultural forces to include seismic changes. Updated
statistics for demographic forces of change.
• Section 3.4—New Example box featuring Volkswagen and
ethics. Introduces new key term “abusive supervision.”
Updated statistics on workplace cheating. New Example box
discussing “whistleblowing” photographer Simon Edelman’s
photos of the Trump administration and the fallout. Updated
content examples for recent Sarbox cases and the most
common ethics violations at work.
• Section 3.5—New content example of Tom’s Shoes as a
company showcasing social responsibility. New example of
the benefits to Coca-Cola for going green and new table
showing how being ethical and socially responsible pays off.
• Section 3.6—New Example box discussing HD Supply
Holdings and Fox News and the good and bad of corporate
governance.
• New Career Corner feature on Managing Your Career
Readiness.
• New Management in Action case: Who’s to Blame for College
Basketball’s Dark Underbelly?
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• Updated Legal/Ethical Challenge: Should You Apply to Have
Your Student Loans Forgiven?
• New continuing case on Uber.
CHAPTER 4
• New Manage U feature: Working Successfully Abroad:
Developing Cultural Awareness.
• Section 4.1—Updated section opener with new statistics
regarding United States imports in 2016. Updated Table 4.1
and corresponding content with competitiveness rankings for
2016–2017. New Example box featuring international
e-commerce company Alibaba. Updated content on the
positive and negative effects of globalization. New content
examples featuring recent megamergers including CVS/
Dignity Health, Amazon/Wholefoods.
• Section 4.2—New Example box discussing how to get an edge
in the global job market. Introduces new key term “crosscultural awareness.” The career readiness competency of
cross-cultural awareness is defined and leads into the
corresponding Practical Action box. Features an updated
discussion of U.S. brands that are foreign owned. New boxed
feature “I wish I considered the impact of ethnocentrism.”
• Section 4.3—Updated discussion on the foreign
manufacturing of Apple products. An updated discussion of
why companies expand internationally, including Netflix,
Amazon, and Ford Motor Company and expanded
discussion of foreign subsidiaries. Updated examples for
how companies expand internationally, including Under
Armour. Updated examples of global outsourced jobs,
including an updated Table 4.2 with top exporting countries
through 2016. Updated list of U.S. companies opening
franchises overseas, including Chick-fil-A and Cold Stone.
• Section 4.4—Updated Table 4.3 with the U.S.’s top ten
trading partners. Updated content regarding tariffs with a
discussion of the Trump administration as well as updated
content pertaining to import quotas, dumping, and
embargoes and sanctions. New table featuring organizations
promoting international trade. Updated discussion on NAFTA,
the EU, and other trading blocs complete with a new Example
box discussing Brexit’s impact on Britain and the EU. Updated
Example box to showcase the exchange rates on various
common products like rent, Starbucks, and designer jeans.
Updated statistics for major economies, including China,
India and Brazil.
• Section 4.5—Changed the section title to “The Value of
Understanding International Differences” and expanded the
opening with a discussion on international differences. An
updated discussion on language and personal space with a
discussion on learning foreign language online and through
apps and a new Example box discussing the differences in
personal space in various countries. Updated content on
differences in communication. New Practical Action box
discussing how to run an international meeting. New Figure
4.2 discussing current followers of world religions. Current
examples of expropriation, corruption, and labor abuses. An
updated discussion on expatriates and why U.S. managers
often fail. New boxed feature “I’m glad I understood the
GLOBE Project’s cultural dimensions.”
• New Career Corner feature: Managing Your Career
Readiness: Working Overseas. New key term “context.”
• New Management in Action case: The Growth and Stall of
Didi Chuxing.
• New Legal/Ethical Challenge: Should Qatar Be Hosting the
2022 World Cup?
• New continuing case on Uber.
CHAPTER 5
• New Manage U feature: Making an Effective Plan for Starting
Your Career.
• Section 5.1—New Example box on how to write a business plan.
The previous discussion of VRIO was moved from this section
to Chapter 6. New research on the benefits of planning.
• Section 5.2—Opens with a new Table 5.1 discussing and
summarizing mission, vision, and values statements. New
example box on Coca-Cola includes the company’s mission,
vision, and values statements. A new Example box discusses
Coca-Cola’s six long-term strategies. New boxed feature “I
wish my manager put more effort into operational planning.”
• Section 5.3—New boxed feature “I’m glad I developed an
action plan.” Updated Example box pertaining to long and
short-term goals at Southwest Airlines.
• Section 5.4—New Example box on setting clear goals at
Snapchat. Included new research on goal setting programs.
Revised the three types of goals used in MBO: performancebased, behavioral-based, and learning-based. New SelfAssessment determining whether students have a proactive
learning orientation. Added Tornier as an example of an
Action Plan. New Practical Action box for small businesses
and goal setting.
• Section 5.5—New Example box applying the planning/control
cycle through Tesla’s Model 3.
• New Career Corner feature: Managing Your Career
Readiness.
• New Management in Action case: Fender Rebrands to Stay in
Tune with the Times.
• New Legal/Ethical Challenge: Is Pfizer Putting Profits above
Alzheimer’s Patients?
• New continuing case on Uber.
New Learning Module: Entrepreneurship
• New Manage U feature: So You Want to Start a Business?
• Section LM 1.1—Introduces entrepreneurship and its
foundation, including a discussion of Elon Musk. Introduces
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the concept of intrapreneurship, leading to a new Example
box discussing Intel’s Genevieve Bell. Discusses how
entrepreneurship is different from self-employment. A new
figure LM 1.1 lists the characteristics of entrepreneurs. New
Self-Assessment to determine if students have an
“entrepreneurial spirit.” A discussion of entrepreneurship
across the globe. New Table LM 1.1 with facts about small
business.
• Section LM 1.2—Begins by discussing how entrepreneurs
come up with ideas to start a business. Discusses how to
write a business plan. Reviews the options for creating a
legal structure for a business and how to obtain financing.
The importance of creating the right organizational culture
and design is explored. New Example box featuring the start
and growth of a small business.
CHAPTER 6
• New Manage U feature: Building Your Personal Brand.
• Section 6.1—New coverage regarding levels of strategy.
New Figure 6.1 shows three levels of strategy. Introduces
the new key term “functional level strategy.” Updated
research on strategic planning at small and large firms. New
Example box illustrates strategic planning at Evernote and
Groove HQ.
• Section 6.2—The five steps of the strategic management
process were changed to reflect current thinking. New boxed
feature “I wish my company would have evaluated its current
reality before opening the doors for business.” New SelfAssessment on strategic thinking.
• Section 6.3—Begins with new key term “sustainable
competitive advantage.” Updated Example box of SWOT
analysis for Toyota; VRIO discussion from Chapter 5 now
featured in this section with updated content and a new
Figure 6.3. New Example box on developing competitive
advantage in the Internet economy. Updated Example box
with contingency planning in the wake of Hurricane Harvey
with a discussion on CVS, Walgreens, and Fed Ex.
• Section 6.4—Renamed “Establishing Corporate Level
Strategy.” Section now opens with Three Overall Types of
Corporate Strategy and includes a new table showcasing
how a company can implement overall corporate level
strategies. New discussion of the BCG Matrix and different
diversification strategies. Introduces new key term “unrelated
diversification.” Discussion on Porter’s five competitive forces
and four competitive strategies moved to Section 6.5.
• Section 6.5—Renamed “Establishing Business Level
Strategy.” The discussion on Porter’s competitive forces and
strategies moved to this section. New examples used to
illustrate these concepts.
• Section 6.6—Renamed “Executing and Controlling Strategy.”
New boxed feature “I’m glad my company adjusts its strategy
as we go.”
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• New Career Corner feature: Managing Your Career
Readiness.
• New Management in Action case: General Electric’s Evolving
Strategy.
• New Legal/Ethical Challenge: Is Your School Selling Your Bank
Accounts?
• New continuing case on Uber.
CHAPTER 7
• New Manage U feature: How to Make Good Decisions.
• Section 7.1—Updated Example box on Starbucks. Expanded
content on intuition with a new Example box on the power of
intuition and a new Practical Action box on how to improve
intuition.
• Section 7.2—Section opens with updated examples on
business ethics including medication profiteering, the
#MeToo movement, CEOs being punished for unethical
behavior, and as a contrast to bad behavior, philanthropists
Bill and Melinda Gates. New boxed feature “I’m glad I found
an employer who cares about ethics more than just making
money.”
• Section 7.3—Begins with an updated discussion of ethics at
Google. New examples of companies using evidenced-based
decision making. Updated Example box on using analytics in
sports. Use of Big Data at companies such as Target, JetBlue,
HP Labs, and the Obama administration is discussed. New
Example box on data and hacking, featuring the Equifax breech.
• Section 7.4—New examples of various decision-making
styles of CEOs, including Elon Musk, Jeff Bezos, Ginni
Rometty, and Madeline Bell.
• Section 7.5—Renamed “Decision-Making Biases and the Use
of Artificial Intelligence.” Section opens with a discussion on
heuristics and leads into updated content and discussion
illustrating overconfidence bias with BP oil and the
government’s spy plane for the escalation of commitment
bias. Introduces a new section on AI, reviewing its pros and
cons. The use of AI at various companies is highlighted,
including Google and Microsoft.
• Section 7.6—New boxed feature “I wish my workplace
didn’t have a toxic group decision-making environment.”
New discussion on the Delphi technique and devil’s advocacy,
along with a figure illustrating their implementation.
Section concludes with an introduction to the concept of
project post-mortems with practical examples from Disney
and Pixar.
• New Career Corner feature: Managing Your Career
Readiness.
• New Management in Action case: New York Subway System.
• New Legal/Ethical Challenge: It’s All about a Peacock
(featuring a discussion on emotional support animals).
• New continuing case on Uber.
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CHAPTER 8
• New Manage U feature: How to Get Noticed in a New
Job: Fitting into an Organization’s Culture in the First
60 Days.
• Section 8.1—New boxed feature “I wish my company had
integrated its corporate strategy and organizational culture.”
New Table 8.1 reviews the drivers of organizational culture.
Updated Example box on how strategy affects culture at
Cleveland Clinic.
• Section 8.2—New examples illustrate the three levels of
organizational culture. New examples used to explain the
four types of culture within the competing values framework.
New examples used to explain how employees learn culture.
Updated research on person-organization fit.
• Section 8.3—New boxed feature “I’m glad management
embraced an empowering culture during a merger.” New
examples used to illustrate the 12 methods organizations use
to change culture.
• Section 8.5—New Practical Action box on how to effectively
delegate.
• Section 8.6—Opens with an updated discussion on Google
and its culture of innovation. An updated Example box on
Whole Foods is used to explain horizontal designs.
• Section 8.7—Section is introduced with a new key term:
“contingency approach to organizational design.” New
example of Etsy is used to frame discussion of mechanistic
and organic organizations.
• New Career Corner feature: Managing Your Career
Readiness.
• New Management in Action case: Wells Fargo’s Sales Culture
Fails the Company.
• Updated Legal/Ethical Challenge: Should Socializing Outside
Work Hours Be Mandatory?
• New continuing case on Uber.
CHAPTER 9
• New Manage U feature: How to Prepare for a Job
Interview.
• Section 9.1—New examples from Fortune’s 10 best work
places for Millennials, including Ultimate Software, SAS,
Quicken Loans, Salesforce, and Encompass Home Health and
Hospice. Updated research on the effectiveness of HR
practices. New information on company rewards. New
examples to illustrate human and social capital including New
Brunswick Power and Inter-American Development Bank.
• Section 9.2—New statistics on recruiting trends and
examples for internal and external recruiting, including Visto
and Glassdoor. New boxed feature “I’m glad my company is
serious about its recruiting and selection processes.”
Updated Example box discussing the changing job market,
Millennials, and the gig economy. New research regarding
the lies job applicants tell. New boxed feature “I wish my
company used a structured interview process.” A new
Practical Action box discussing what employers are looking
for in a job interview. Updated information on the legality of
employment tests. New Example box listing the pros and
cons of personality tests and updated information on
personality tests including Myers-Briggs. Section closes with
a discussion on AI and how it is changing the recruitment and
selection process.
• Section 9.3—Updated statistics on benefits, including a new
discussion regarding gender-based preferences.
• Section 9.4—Renamed “Orientation and Learning and
Development.” Opens with a new example of onboarding
with Facebook’s new employee boot camp. New content on
learning and development including Millennials, SAS, and
Estee Lauder. Updated research on L&D programs. New
Example box on Keller Williams and its learning and
development program.
• Section 9.5—New Example box on performance management
at Edward Jones. Updated research on performance
management and performance appraisal, and new
performance management examples pertaining to Deloitte,
Accenture, Cigna, Microsoft, and Adobe. Discussion of how
forced ranking is losing favor. New discussion of how to give
effective performance feedback.
• Section 9.6—Updated Practical Action box on the right way to
handle a dismissal.
• Section 9.7—Updated statistics and information regarding
workplace discrimination and bullying. New Example box
discussing sexual harassment at work.
• Section 9.8—Opens with updated statistics on labor unions.
Updated Figure 9.4 showing right-to-work states.
• New Career Corner feature: Managing Your Career Readiness.
• New Management in Action case: Difficulties Attracting and
Retaining Human Capital in the Nursing Profession.
• New Legal/Ethical Challenge: Should Noncompete
Agreements Be Legal?
• New continuing case on Uber.
CHAPTER 10
• New Manage U feature: How Can I Be More Creative at Work?
• Section 10.1—New Example box discussing the decline of
Toys R Us. New examples of companies experiencing change.
Updated Example box on BP and the oil spill in the Gulf of
Mexico. New examples to explain the forces for change.
Updated Example box on ridesharing and self-driving cars.
• Section 10.2—New examples to illustrate three kinds of
change. New boxed feature “I’m glad my company unfroze
employees before implementing organizational change.”
Added a new section on applying the systems model of
change featuring Stora Enso.
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• Section 10.3—Updated statistics regarding the effectiveness
of organizational development.
• Section 10.4—This section was completely rewritten,
restructured, and renamed “Organizational Innovation.”
Introduces the new key term “innovation.” New Figure 10.5
shows the various approaches to innovation. A new figure
illustrates the supporting forces for innovation. A new table
lists the most innovative companies. A new Self-Assessment
measures organizational climate for innovation. New boxed
feature “I wish my company considered the components of
an innovation system.” Introduces new key term
“crowdsourcing.” New Example box discussing IDEO’s
approach to innovation. Recent research is used to support
our discussion of innovation.
• Section 10.5—Updated research regarding resistance to change.
• New Career Corner feature: Managing Your Career Readiness.
New key terms “self-affirmations” and “self-compassion.”
• New Management in Action case: Chipotle Needs to Change.
• New Legal/Ethical Challenge: Did L’Oreal Go Too Far in Firing
Its Patent Lawyer?
• New continuing case on Uber.
CHAPTER 11
• New Manage U feature: How to Make a Positive First
Impression at Work.
• Section 11.1—Opens with updated information and
statistics for employment and personality testing and the
Big Five personality dimensions. Updated research
regarding personality and individual behavior and work
attitudes. Introduced the new key term “generalized
self-efficacy” with a discussion on the topic and its tie to
career readiness with a new Self-Assessment measuring
levels of generalized self-efficacy. A new Practical Action
box discussing how technology can be used to develop
Emotional Intelligence.
• Section 11.2—New Self-Assessment to measure the career
readiness competency of having a positive approach to work.
New Practical Action box on using cognitive reframing to
reduce cognitive dissonance.
• Section 11.3—Updated research regarding stereotypes and
implicit bias. Updated discussion on distortions in perception,
including gender stereotypes. New Example box discussing
the halo effect and how body weight affects careers. New
Example box on the Pygmalion effect.
• Section 11.4—Opens with entirely new content on employee
engagement with a new table showing the predictors of
engagement. Updated research on job satisfaction,
organizational commitment, and important workplace
behaviors like performance, organizational citizenship, and
counterproductive behavior. Updated the Example box on
toxic workplaces.
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• Section 11.5—Updated examples and statistics regarding
trends in workplace diversity, including age, gender pay gap,
race, and sexual orientation. New example discussing Google’s
internal memo regarding women in tech and how it showcases
a barrier to diversity. Updated research pertaining to barriers to
diversity. New boxed feature “I’m glad my manager embraced
diversity and fostered inclusiveness.” New Example box
showcasing Ultimate Software.
• Section 11.6—Updated research on stress and its
consequences. Introduces new key term “work–life conflict.”
New Table 11.4 discusses the negative consequences of
conflict, including work, family, and other life demands. A
new boxed feature “I wish my manager alleviated my workrelated stress.” Reworked the content regarding workplace
stress and its consequences. New coverage of resilience and
its role in career readiness. A new Self-Assessment assesses
levels of resilience. Updated content on holistic wellness and
a new Example box showcasing Google’s corporate wellness
program.
• New Career Corner feature: Managing Your Career Readiness.
• New Management in Action case: Does the Financial Services
Industry Lack Diversity?
• New Legal/Ethical Challenge: Should Airlines Accommodate
Oversized People?
• New continuing case on Uber.
CHAPTER 12
• New Manage U feature: Managing for Motivation: Building
your Own Motivation.
• Section 12.1—New company examples and statistics on
extrinsic and intrinsic rewards, including Uber, McDonald’s,
Outback Steakhouse, and MARS. A new section provides an
overview of all motivation theories discussed in the chapter.
• Section 12.2—Added a quick summation of the
motivation theories discussed in the section. Updated
Example box on hotel company Joie de Vivre. Updated
research on need theories. New boxed feature
“I’m glad I fostered employees’ sense of competence.”
Updated research regarding the application of Herzberg’s
two factor theory.
• Section 12.3—Updated research on process theories of
motivation. Updated statistics on CEO pay. New examples to
illustrate the application of equity theory. New Example box
showcasing transparency at Buffer. New examples of Tesla
and Kronos to demonstrate the application of expectancy
theory. New coverage of stretch goals and two types of goal
orientations—learning goal orientation and performance goal
orientation.
• Section 12.4—Updated research on job design. New Example
box on how job characteristics matter in the modern
workforce.
New to the ninth edition
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• Section 12.5—Updated research on rewards. New
examples to illustrate the four types of reinforcement. New
boxed feature “I wish my manager used positive
reinforcement rather than punishment.”
• Section 12.6—Updated research on compensation,
nonmonetary incentives, and other rewards. Updated
statistics on money as a motivator. Updated content on
incentive plans. Updated the example box on successful
workspaces. New Practical Action box on how managers can
encourage gratitude.
• New Career Corner feature: Managing Your Career
Readiness.
• New Management in Action case: Motivation Challenges in
the Fast-Food World.
• New Legal/Ethical Challenge: Are Workplace Wellness
Programs Using Proper Motivational Tools?
• New continuing case on Uber.
CHAPTER 13
• New Manage U feature: Effectively Managing Team
Conflict.
• Section 13.1—Updated research on teams. Updated Example
box on informal groups and informal learning. Updated
content regarding self-managed and virtual teams. Updated
Practical Action box regarding best practices for virtual
teams.
• Section 13.2—Updated content on punctuated equilibrium
and its tie to Brexit.
• Section 13.3—Updated research regarding building highperformance teams. Updated discussion on collaboration,
including new a new study of the relationship between
listening to happy music, mood, and collaboration. New
boxed feature “I’m glad my manager fosters collaboration.”
New Example box focuses on building trust. New Practical
Action box on building effective team norms. Added new
material regarding effective team processes and their role in
building high-performance teams. Introduces the new key
terms “team processes,” “team charter,” “team reflexivity,”
and “team voice.”
• Section 13.4—Updated research on conflict. New examples
of dysfunctional and functional conflict. New boxed feature “I
wish I was able to manage interpersonal conflict more
effectively.” Updated the discussions on kinds of conflict.
Updated discussion on ways intergroup conflicts are
expressed, including an example for ambiguous jurisdictions
with a racial-profiling incident at Starbucks. New Example box
on playing the devil’s advocate as a way to resolve conflict.
Section closes with a new figure on five conflict handling
styles.
• New Career Corner feature: Managing Your Career
Readiness.
• New Management in Action case: IBM Wants Its Employees
Back in the Office.
• New Legal/Ethical Challenge: When Employees Smoke
Marijuana Socially: A Manager’s Quandary.
• New continuing case on Uber.
CHAPTER 14
• New Manage U feature: Improving Your Leadership Skills.
• Section 14.1—Introduces key term “leadership coaching”
and the difference between leading and managing, including
a new Table 14.1 showing the characteristics of managers
and leaders. Introduces new key term “managerial
leadership.” New coverage of managerial leadership and
coping with complexity versus coping with change. Updated
Table 14.2 on influence tactics with new example of
exchange and legitimizing tactics. Developed a new
integrated model of leadership (Figure 14.1) to foreshadow
the theories covered in the chapter.
• Section 14.2—Opens with an example of Phebe Novakovic,
CEO of General Dynamics, as someone who embodies the
trait approach to leadership. Table 14.3 updated to show
how the Big Five personality traits, which were introduced in
Chapter 11, represent positive, task-oriented traits.
Expanded the discussion on narcissism and gender and
leadership. Updated the Example box discussing great
worldwide leaders. Renamed “strategic skills” in Table 14.4
to “conceptual skills.” New for theories drawn from trait
theory, including Martha Stewart as a micromanager. New
company examples for organizations using trait assessments,
including Citigroup, ExxonMobil, Ford Motor, Procter &
Gamble, Hewlett-Packard, and JPMorgan. Replaced the
discussion on “cross-cultural competency” with a “global
mind-set” and illustrated its tie to career readiness. Updated
research on leadership traits.
• Section 14.3—New examples of initiating structure
leadership, including Meg Whitman and David Miliband. New
examples for transactional and empowering leadership,
including Nick Saban and Sheryl Sandberg. New Example box
showcasing Lauren Bush Lauren’s values-driven leadership.
Introduces key term “passive leadership.” Updated research
on behavioral approaches.
• Section 14.4—Updated research on contingency leadership.
• Section 14.5—New Example box discussing Pepsi’s Indra
Nooyi and her transactional and transformational leadership.
New examples of John Hennessy, Dr. Donald Hopkins, Meg
Whitman, and John Mackey used to illustrate the four key
behaviors of transformational leaders. New boxed feature
“I’m glad I understood the value of using individualized
consideration.” Section closes with an updated summary on
what we know about transformational leadership. Updated
research on transformational leadership.
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• Section 14.6—Expanded the discussion on the usefulness of
the LMX model. New boxed feature “I wish I had known
about the impact of a poor LMX: I do now!” Updated research
on LMX and humility.
• New Career Corner feature: Managing Your Career
Readiness. New key term “Dunning-Kruger effect.”
• New Management in Action case: VA Turnaround: A Waiting
Game.
• New Legal/Ethical Challenge: Should Starbucks Have a
Corporate Loitering Policy?
• New continuing case on Uber.
CHAPTER 15
• New Manage U feature: Improving Your Use of Empathy.
• Section 15.1—Kicks off with new research on communication
effectiveness. New boxed feature “I’m glad my manager was
an effective communicator.” New example of noise. Updated
the Example box on “Secrecy and Silence” to include
Volkswagen and Theranos. Updated research on media
richness and selecting the best medium.
• Section 15.2—Updated discussion and research on the
grapevine. Updated Practical Action box on how to
streamline meetings.
• Section 15.3—Updated discussion on the physical barriers of
communication, including open office plans. Updated
discussion and statistics for personal barriers to
communication and nonverbal communication. New Example
box discussing personal and cross-cultural barriers to
communication and how they adversely affect organizations.
New Practical Action box on improving communications
between men and women.
• Section 15.4—Updated Figure 15.3 showing the use of social
media across various age groups. Updated research on social
media and managerial and organizational effectiveness. New
Practical Action box on building your own social media brand.
New examples for crowdsourcing. New Example box on TD
Bank and its use of social media. New content pertaining to
the downsides of social media, including new key term
“FOMO” and a discussion of microaggressions and recent
threats to cybersecurity, including attacks at Target, Equifax,
and Verizon. New boxed feature “I wish I didn’t have FOMO.”
Updated Table 15.8 to show elements of an effective social
media policy. New Example box illustrating samples of social
media policies at IBM, Best Buy, McDonald’s, Walmart,
Washington Post, and Intel.
• Section 15.5—New statistics on the cost of poor
communication. Expanded the discussion of empathy.
Updated and expanded Table 15.11, which discusses rules
for business writing. Updated research on nondefensive
communication, empathy, and listening.
• New Career Corner feature: Managing Your Career Readiness.
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• New Management in Action case: Fyre and Fury.
• Updated Legal/Ethical Challenge: Was ESPN Fair in Firing
Curt Schilling for His Social Media Post?
• New continuing case on Uber.
CHAPTER 16
• New Manage U feature: Using a Mentor to Exercise Control in
Your Career.
• Section 16.1—New examples on why control is needed and
new company examples for control, including Takata, FedEx,
UPS, The New York Times, and Uber. New boxed feature “I’m
glad my company made employees feel valued and engaged
by regularly monitoring performance.” Introduces the new
key term “control charts” with a discussion on the topic,
including an example and new figure. New example of
feedforward control at Southwest Airlines.
• Section 16.2—New Example box regarding fair labor
practices at Adidas. New examples on levels of control and
the supply chain at KFC in the UK.
• Section 16.3—New examples of the balanced scorecard,
including an internal business perspective at National Marrow
Donor Program and an innovation and learning perspective at
Tolko Industries LTD. New example of cascading a strategy map.
• Section 16.4—New examples for internal audits, including
Citigroup.
• Section 16.5—Opens with updates to the winner of the
Baldrige Award, Bristol Tennessee Essential Services (BTES).
New boxed feature “I wish my company were focused on
continuously improving work processes.” New examples to
illustrate Deming’s PDCA framework. New Example box
discussing Hyundai and its challenge to the luxury car
market. Kia Motors is introduced as a new example of
improvement orientation. Updated Example box on Kaizen
principles. New Example box on service excellence with a
discussion including Nordstrom’s and Trader Joes. Updated
statistics on outsourcing. Updated discussion on ISO 9000
standards.
• Section 16.6—New discussion on managing micromanagers.
• Section 16.7—Updated Table 16.2 with statistics for GDP
through 2018. Updated statistics on productivity growth.
New content on processes used to increase productivity,
including new key terms “benchmarking” and “best
practices.” Updated content on managing individual
productivity.
• New Career Corner feature: Managing Your Career
Readiness.
• New Management in Action case: Is Tesla Out of Control?
• New Legal/Ethical Challenge: Should Companies use GPS to
Track Employees?
• New continuing case on Uber.
New to the ninth edition
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Walkthrough Preface of 9e
Kinicki/Williams, Management: A Practical Introduction, 9e empowers students to develop the
management career skills necessary in everyday life through the practical and relevant application of theory.
Developed to help students learn management with a purpose, K/W 9e takes a student-centered approach.
The revision introduces a new strategic career readiness theme throughout to address employers’
concerns about students graduating without being career ready and extends our emphasis
on practicality. The hallmark strengths that have made it the market best-seller have been maintained
and include:
• A student-centered approach to learning.
• Imaginative writing for readability and reinforcement.
• Emphasis on practicality.
• Resources that work.
Our product covers the principles that most management instructors have come to expect in an
introductory text—planning, organizing, leading, and controlling—plus current issues that students need to
be to be aware of to succeed: customer focus, globalism, diversity, ethics, social media, entrepreneurship,
teams, innovation, artificial intelligence, Big Data, and empowerment.
“
It (the book) is well written and provides relevant examples in the text with great online support. The
TRM (Teaching Resource Manual) is very useful and important in teaching the course. I have found
the product to be one of the best I have ever used.
”
—Jerry D. Stevens,
Texas Tech University
Based on a wealth of instructor feedback and blending Angelo’s scholarship, teaching, publishing, and
management-consulting with Brian’s writing and publishing background, we have worked tirelessly to
create a research-based yet highly readable, practical, and motivational product for the introductory
principles of management course. Our goal to make a difference in the lives of you and your students.
xv
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Focus on Career Readiness
Global research shows that employers are finding it hard to find college graduates who possess the
skills needed to be successful. These employers also think that colleges and universities need to do
a better job making students career ready. Our goal in 9e is to contribute to overcoming this problem
with new content and a variety of developmental techniques.
Introduction
PART 1
32
FIGURE 1.4
Building Your Career Readiness
Knowledge
(K)
Model of career readiness
©2018 Kinicki and Associates, Inc.
Soft skills
(S)
Chapter 1 contains a section devoted to explaining the need, value, and process for becoming career ready. It includes a model of career
readiness along with a table of competencies desired by employers.
Career
outcomes
Career
readiness
Attitudes
(A)
Other
characteristics
(O)
30
PART 1
Introduction
The Manager’s Changing Work Environment and Ethical Responsibilities
TABLE 1.2
1.7 Building Your Career Readiness
expensive camera
equipment behind. He
was subsequently told
KSAO
COMPETENCY
his contract with the department would not be renewed as promised—essentially
he was fired—and he has
filed a federal lawsuit
Knowledge
Task-Based/Functional
seeking whistle-blower protection, reinstatement, and an ethics
investigation into Perry and Murray for “public corruption.”134
Retaliation against whistle-blowers is against
federal Technology
law; the DOE
Information
135
Application
is calling Edelman’s accusations “ridiculous.”
Whistlebloweraid.org is a nonprofit law firm that assists
Cross-Cultural
Competency
government whistle-blowers like Edelman
with confidential
free legal advice, especially if they witness lawbreaking when
the evidence is classified and don’t know where to turn.136
Though he is working with the group, Edelman insists his
THE BIG PICTURE
Companies want to hire career-ready college graduates. In this section we describe a model of career readiness and offer tips for building your readiness.
LO 1-7
Define the knowledge,
soft skills, attitudes, and
other characteristics
needed for career
readiness and discuss
how they can be
developed.
About 80,000 undergraduate students from over 350 universities across the United
States rated 2017’s most attractive employers. The top 10 were: (1) Google, (2) Walt
Disney Company, (3) Apple, (4) Nike, (5) Amazon, (6) J.P. Morgan, (7), Goldman
Sachs, (8) Ernst & Young, (9) Deloitte, and (10) FBI.115 Would you like to work at
these companies or another like them? If so, you need to be career ready.
Computational Thinking
Career readiness represents the extent to which you possess the knowledge, skills, and
attributes desired by employers. How ready do you believe you are? Recent surveys of
Understanding the Business
college graduates and recruiters reveal a big gap in the degree of readiness each group
perceives in students. Figure 1.3 shows the results of a study of 400 employers and 613
college students. The majority of students rated themselves as career-ready on 11 of 17
skills, while the majority of employers did not perceive students to be well-prepared on
any of the skills.116 The three largest gaps were in critical/analytical thinking, written
communication, and locating, organizing, and evaluating information, skills that are
very important to employers.117 Other studies have similarly demonstrated that employers see a major skills gap in college students’ interpersonal skills.118
You’ll want to close these gaps for three reasons:
CHAPTER 3
99
Description of KSAO Skills Needed for Career Readiness
photos
are in the public domain. “I’m definitely proud of what I
DESCRIPTION
did,” he says. “I know that I did the right thing. I just hope that
more
people take
as inspiration
that
they knowledge
can also speak
Demonstrated
abilitythis
to apply
academic and
practical
in pursuit of
uporganizational
and blow and
theindividual
whistle goals/assignments.
because it’s an important part of
democracy.”137
Effective use of IT and learning new applications as needed.
FOR DISCUSSION
What are some of the reasons someone might become a whisAwarenessWhy
of cross-cultural
differences;
respect
diverse
cultures,
tleblower?
would someone
choose
not toforbe?
Is that
posi- races,
ages,
genders, and
religions;
andofdemonstrated
inclusiveness,
tion
defensible
given
the value
job attitudesopenness,
like professional
andethical
ability tostandards?
interact with
diverse
people.
and
Why
or why
not? What would you have
done in Edelman’s position?
Ability to use numbers to distill abstract concepts and conduct data-based
reasoning. Ability to work with and interpret Big Data.
Understanding of the company’s business and strategies and the needs of
stakeholders, and ability to see how your work fits into the larger
organizational puzzle.
In exposing unethical behavior, then, it’s important to be clear why you’re doing it
New Media Literacy
Ability to develop, evaluate, and use new media forms, and to apply these
(trying to help the company or just get someone in trouble), media
not report
something for
for persuasive communication. Ability to stay up-to-date with the latest
the wrong reason (discuss your concerns with someone whomedia
has trends
similar
andvalues),
leverage and
them in the interest of the organization.
follow proper channels (like addressing the supervisor of the supposed culprit). Don’t
try to reportSoft
externally
(lashing
out
on
Facebook,
for
instance)
without
to
Skills
Critical Thinking/Problem
Sound reasoning speaking
to analyze situations,
make decisions, and solve problems.
138
those who might resolve the problem.
Solving
Ability to obtain, interpret, and analyze both qualitative and quantitative
Some people view ethics in ideal terms, which means that information
ethical principles
or stanwhile creatively
solving problems.
dards apply universally across situations and time. Others, however, take a relativistic
view and believe that what is ethical
dependsCommunication
on the situation.
These
differences
Oral/Written
Ability
to effectively
expresscan
your thoughts, ideas, and messages to diverse
create conflict among managers trying to make decisions. people in oral and written form. Public speaking skills and ability to write/edit
emails,
letters,
and technical
Consider the situation faced by a group of executives working
with
Angelo
to makereports.
a
decision about opening a new office overseas. Angelo was consulting with a global comTeamwork/Collaboration
Abilitypay
to work
effectively
with
pany that was dealing with the issue
of whether or not it should
local
officials
forand build collaborative relationships with
diverse
people,
work withinthat
a team structure, and manage interpersonal
helping establish a new office overseas. Some executives in the
meeting
concluded
conflict.
the company should pay these officials because it was a normal
cost of doing business
in this country. Others viewed the situation quite differently. They thought the payLeadership
influencing aultimately
group of people to achieve common goals. Ability to
ments amounted to bribes and were
totally against the idea.Skill
Theat company
and develop
others.
decided that it would not make the payments, which resultedmotivate,
in theircoach,
inability
to open
the new office.
Decision
Ability tendencies.
to collect, process,
All told, it is important for you to
learn Making
more about your ethical
Thisand
willanalyze information in order to identify and
choose from alternative solutions that lead to optimal outcomes.
help you to behave in ways that are consistent with your values and beliefs. ●
1. To get a job and earn more money. Today’s jobs require greater interpersonal or
soft skills, and employers are willing to pay higher salaries to those possessing
them.119
2. To impress employers with your self-awareness. Companies prefer to hire people
with realistic perceptions of their own strengths and weaknesses. This underscores the need to obtain information about your strengths and weaknesses
throughout your career.
3. To create your own motivation to learn. Studies of human behavior reveal that
people won’t spend time on personal development unless they feel the need.
Overinflated perceptions of career readiness will not motivate you to develop
the attributes that enhance that readiness. You need to motivate yourself to
learn and develop.
Moreover, these gaps are critical to employers too. Kate Davidson, a reporter for
The Wall Street Journal, concluded that a lack of soft skills “is limiting organizational
productivity,” and “it is becoming increasingly difficult to find applicants who can communicate clearly, take initiative, problem-solve and get along with co-workers.”120
Knowing this, we want reading our textbook to help you become career-ready. The process starts with focusing on the ideas and suggestions in this section.
Self-Assessments
SELF-ASSESSMENT 3.1
kin75117_ch01_002-041.indd 32
A Model of Career Readiness
Over 66 Self- Assessments
allow
students
to assess
the extent
Being career-ready is a lifelong
process requiring
you to continually
learn and develop
in response to changes in organizational needs and skill requirements. It is not a onetime event that stops after graduation. Consider what René Steiner, President/CEO of
to which they possess
aspects
of career
thereadiness.
career
readiness
Büler North America,
had to say about
“Realize
that learning is not
complete when you graduate. Today, more so than in the past, there is the opportunity
continue to develop,
through education, learning company culture, and exploring
competenciestodifferent
desired
by employers.
areas of business. And, you need to adapt to future needs.” Authors of the
CAREER READINESS
Assessing My Perspective on Ethics
This survey is designed to assess your views about ethics. It
provides feedback about your status on the Career Readiness
“other characteristic” of professionalism/work ethic.
Please be prepared to answer these questions if your
instructor has assigned Self-Assessment 3.1 in Connect.
121
1.
2.
3.
4.
12/3/18 6:20 PM
Are your views more idealistic or more relativistic?
What do you think about students cheating on homework
assignments in school? What about cheating on exams?
Are your answers consistent with your score? Explain.
What can you say during an interview to demonstrate an
ethical orientation?
Future Work Skills 2020 report similarly concluded that individuals “will increasingly be
Management Theory
kin75117_ch01_002-041.indd 30
Career Corner
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Each chapter concludes with a new section entitled “Career Corner:
Managing Your Career Readiness.” This material provides students with
practical tips for developing targeted career readiness competencies.
2.9 Career Corner: Managing Your Career
Readiness
Figure 2.5 shows the model of career readiness we discussed in Chapter 1. What does a
chapter on management history have to do with your career readiness? How about its
application to the Knowledge competency of understanding the business? This competency was defined in Table 1.2 as the extent to which you understand a company’s business and strategies and the needs of its stakeholders. It comes into play whenever you
interview for a job.
Recruiters expect you to do some research, just as you would for a class assignment. They want you to act like Sherlock Holmes and do some snooping. That’s good
for both you and a potential employer in that it helps identify the likely level of fit
between the two of you. Good fit, in turn, is associated with more positive work attitudes and task performance, lower intentions to quit, and less job-related stress. 65
Moreover, doing your homework on a company makes you a more attractive job candidate. It shows interest on your part, and recruiters are impressed by the fact that
you took the time to learn about the business.66 It also prepares you to ask smart
questions, a behavior recruiters want to see. Remember, sometimes it’s the small
things like this that land a job.
New exercises in Connect allow students to demonstrate lower
levels of learning regarding career readiness. The Teaching Resource
Manual provides opportunities for higher levels of learning for career
readiness competencies.
xvi
kin75117_fm_i-xxxviii-1.indd 16
Soft skills
(S)
Attitudes
(A)
69
07/12/18 9:48 PM
LO 2-9
Describe how to develop
the career readiness
competency of
understanding the
business.
FIGURE 2.5
Knowledge
(K)
Concept Mastery
CHAPTER 2
Model of Career Readiness
©2018 Kinicki and Associates, Inc.
Career
readiness
Career
outcomes
Other
characteristics
(O)
So, what does it take to demonstrate that you understand a business? We recommend that you learn the following seven things about a company before showing up at a
job interview:67
1. The company’s mission and vision statements. These statements tell you why
the company exists and what it wants to become or achieve over time. The
question to answer is whether you support these pursuits and would like to be
part of the journey. If you do, you will be a better fit for the company. This is
important because employees are more likely to be productive and stay at a
company when they fit in. For example, if you like outdoor activities, you will
most likely be a better fit at Recreational Equipment, Inc. (REI), which sells
sporting goods, camping gear, and outdoor clothing, than Whole Foods. You
can find this information on the company’s website.
2. The company’s core values and culture. The values an organization endorses
represent the foundation of its culture. You can find clues about this by studying a company’s website. Try to find a list of company values. What do these
10/12/18 7:59 PM
Student-Centered Approach to Learning
Our writing style and product design is based on neuroscience research. Greater learning occurs
when information is “chunked” to keep student attention. We break down topics into easily digestible
portions with purposeful pedagogy to make theories and concepts easier to learn and apply. This
accounts for the use of purposeful color, an extensive photo program, bulleted lists, and headings to
appeal to the visual sensibilities, time constraints, and diverse learning styles of today’s students.
5
Chapter Openers
PLANNING
Planning
The Foundation of Successful Management
After reading this chapter, you should be able to:
LO 5-1
Discuss the role of strategic management.
LO 5-2
Compare mission, vision, and value
statements.
LO 5-3
Discuss the types and purposes of goals and
plans.
LO 5-4
Describe SMART goals and their
implementation.
LO 5-5
Outline the planning/control cycle.
LO 5-6
Describe how to develop the career readiness
competency of proactive learning orientation.
Introduction
PART 1
44
•
©Olivier Renck/Aurora/Getty Images
Each chapter begins with a list of key learning objectives that appeal to
students concern about “what’s in it for me?” and to help them read
with purpose.
PART 3
2.1 Evolving Viewpoints: How We Got to Today’s
Management Outlook
THE BIG PICTURE
After studying theory, managers may learn the value of bringing rationality to the decision-making process.
This chapter describes two principal theoretical perspectives—the historical and the contemporary. Studying
management theory provides understanding of the present, a guide to action, a source of new ideas, clues
to the meaning of your managers’ decisions, and clues to the meaning of outside events.
FORECAST
What’s Ahead in This Chapter
We describe planning and its link to strategy. We define planning, strategy,
LO 2-1
Describe the development
of current perspectives on
management.
and strategic management and state why they are important. We deal with the
“The best way to predict the future is to create it,” Peter Drucker said.
The purpose of this book is, to the extent possible, to give you the tools to create your
own future in your career and as a manager.
fundamentals of planning, including the mission, vision, and value statements,
and the three types of planning—strategic, tactical, and operational. We con-
Chapter
Sections
Creating Modern Management: The Handbook of
sider goals, operating plans, and action plans; SMART goals, management by
objectives, and cascading goals; and finally the planning/control cycle. We
conclude with a Career Corner that focuses on how you can develop the ca-
Peter Drucker
Within each chapter, sections are organized according to the
major learning objectives. Generous use of headings and
bulleted lists provide students with bite-sized chunks of
information to facilitate retention. Each section begins with a
recap of the Learning Objective and includes The Big Picture,
which presents an overview of how the section addresses the
stated objective.
reer readiness competency of proactive learning orientation.
Who is Peter Drucker? “He was the creator and inventor of modern management,” says
management guru Tom Peters (author of In Search of Excellence). “In the early 1950s,
nobody had a tool kit to manage these incredibly complex organizations that had gone
out of control. Drucker was the first person to give us a handbook for that.”5
An Austrian trained in economics and international law, Drucker came to the United
States in 1937, where he worked as a correspondent for British newspapers and later
became a college professor. In 1954, he published his famous text The Practice of
Management, in which he proposed the important idea that management was one of the
major social innovations of the 20th century and should be treated as a profession, like
medicine or law.
In this and other books, he introduced several ideas that now underlie the organization and practice of management—namely:
■
■
■
■
True learner. In his 70-year
career, Peter Drucker published
over 35 books and numerous
other publications, received the
Presidential Medal of Freedom,
and achieved near rockstar
status for his management
ideas, which influenced
organizations from General
Electric to the Girl Scouts. A true
learner who constantly
expanded his knowledge, he
understood that new
experiences are key to nurturing
new ideas and new ventures.
Do you have this kind of
curiosity? ©Jonathan Alcorn/
“
ZUMAPRESS/Newscom
kin75117_ch02_042-075.indd 44
“
kin75117_ch05_156-187.indd 156
10/12/18 7:56 PM
Forecast
That workers should be treated as assets.
That the corporation could be considered a human community.
That there is “no business without a customer.”
That institutionalized management practices are preferable to charismatic
cult leaders.
Shown below the learning objectives, the forecast provides
a high-level of summary of what is covered in the chapter.
Many ideas that you will encounter in this book—decentralization, management by
objectives, knowledge workers—are directly traceable to Drucker’s pen. “Without his
analysis,” says one writer, “it’s almost impossible to imagine the rise of dispersed, globespanning corporations.”6 In our time, Drucker’s rational approach has culminated in
evidence-based management, as we describe in Section 2.6 in this chapter.
Six Practical Reasons for Studying This Chapter
“Theory,” say business professors Clayton Christensen and Michael Raynor, “often gets
a bum rap among managers because it’s associated with the word ‘theoretical,’ which
connotes ‘impractical.’ But it shouldn’t.”7
After all, what could be more practical than studying different approaches to see
which work best?
Indeed, there are six good reasons for studying theoretical perspectives:
Many management texts are simply dense and a slog to read. Kinicki is far more approachable in its
pedagogy. It is well organized—the topics are arranged very logically in each chapter. The approach
speaks directly to the student. This personalized, conversational approach engages my students. It has
a new career theme that is critical to help our students demonstrate employable skills. The Teaching
Resource Manual is also the best in its class.
1. Understanding of the present. “Sound theories help us interpret the present, to
understand what is happening and why,” say Christensen and Raynor.8 Or as
12/3/18 6:41 PM
”
—Todd Korol,
Monroe Community College
Layout, highlighted captions, use of boxes, bolding, pictures, and color are all great. It’s easier for
students to read than other textbooks I have used. The key points summaries at end of chapters are
useful and it’s overall very user-friendly and engaging.
”
—Linsey Willis,
Florida Atlantic University
xvii
kin75117_fm_i-xxxviii-1.indd 17
10/12/18 7:59 PM
Extended Emphasis on Practicality
We want this ninth edition to be a cherished resource that students keep as they move into future
courses and their future careers. We give students a great deal of practical advice in addition to
Often these are thought of as “soft skills.”
covering
the fundamental
concepts
of management.
As discussed in Section 1.7, developing
your soft skills is
The Exceptional Manager
CHAPTER 1
21
Soft skills are interpersonal “people” skills
needed for success at all levels.
an ongoing, lifelong effort.
During her more than three decades at GM, Barra has demonstrated exceptionally
strong soft skills. She has “an ability with people,” says her previous boss, that is critical to
Manage
U
GM’s team-first approach. “She is known inside GM as a consensus builder who calls her
56
staff together on a moment’s notice to brainstorm on pressing issues,” says another report.57
“She’s fiercely intelligent yet humble and approachable,” says a third account. “She’s collaborative but is often the person who takes charge. And she’s not afraid to make changes.”58
Among her most significant changes: hiring people with “diverse views, diverse backgrounds, diverse experiences,” she says, to try to reshape the company’s notoriously
insular corporate culture and to bring GM into the age of Apple and Google.
This new feature provides a pedagogical device that gives students practical, actionable
tips for applying the material in each chapter. Students will find it interesting and valuable
to their
future
careers.
The Most
Valued
Traits in Managers
Clearly, Barra embodies the qualities sought in star managers, especially top managers.
“The style for running a company is different from what it used to be,” says a top executive recruiter of CEOs. “Companies don’t want dictators, kings, or emperors.”65 Instead
of someone who gives orders, they want executives who ask probing questions and
invite people to participate in decision making and power sharing.
Among the chief skills companies seek in top managers are the following:
Practical Action boxes
The thought of starting a career (or switching to a new
one) can be either intimidating or exciting. What’s the
difference? Having goals and a plan.
Setting Goals and Making a Plan
Here are some steps in the career-management process
for you to consider as you set about building your career.1
1. Identify your options. Use the career readiness
skill of self-awareness to write down areas and ideas that
interest and are important to you and the functional, crosscultural, computational, interpersonal, and other skills you
can offer an employer. Then make a written list of the
opportunities available to you through your networking,
earlier work and volunteer experience, and other
resources (don’t forget the alumni and placement offices
at your school). Now match up the two lists to discover
where you should focus your career-building efforts.
Practical
Action boxes offer students practical and interesting advice on issues
The ability to motivate and engage others.
The ability to communicate.
they will
inoutside
thetheworkplace.
Workface
experience
United States.
The Manager’s Changing Work Environment and Ethical Responsibilities
Making an Effective Plan for Starting Your Career
CHAPTER 3
99
■
■
photos are in the public domain. “I’m definitely proud of what I
expensive camera equipment behind. He was subsequently told
did,” he says. “I know that I did the right thing. I just hope that
his contract with the department would not be renewed as prom66
■
High
energy levels
meet the
demands
of global
and
a 24/7
●
ised—essentially
he wastofired—and
he has
filed a federal
lawsuittravel
more
people
takeworld.
this as inspiration
that they can also speak
up and blow the whistle because it’s an important part of
seeking whistle-blower protection, reinstatement, and an ethics
investigation into Perry and Murray for “public corruption.”134
democracy.”137
Retaliation against whistle-blowers is against federal law; the DOE
PRACTICAL
ACTION
Developing Your SoftFOR
Skills
DISCUSSION
is calling Edelman’s accusations “ridiculous.”135
Whistlebloweraid.org is a nonprofit law firm that assists
What are some of the reasons someone might become a whisgovernment
whistle-blowers
tleblower?
Why would
someone conflict,
choose nottotolead
be? Isand
that posiAre you persistent,
creative,
curious? Howlike
doEdelman
you dealwith
withconfidential
frustradirection
without
generating
motivate
free
legal
advice,
especially
if
they
witness
lawbreaking
when
tion
defensible
given
value ofothers
job attitudes
like professional
tion or anxiety? Do you see yourself as part of a larger whole that 136 groups and teams,
to the
influence
including
“difficult” peothe evidence is classified and don’t know where to turn.
and ethical standards? Why or why not? What would you have
gives your work
purpose? How do you perceive problems—as
ple,done
to offer
effective feedback, and to get things done in an atThough he is working with the group, Edelman insists his
in Edelman’s position?
■
2. Explore conditions in your target field. The
career readiness skill of understanding the business will
guide you to identify important factors like the demand for
new hires in your chosen field or fields, the competencies
expected of incoming employees, the likely salary range
and opportunities for advancement, and any geographic
limitations or requirements in the industry to be aware of. If
your field or industry is concentrated in one or two parts of
the country, for instance, be ready to move.
3. Create your action plan. Using what you learned
from steps 1 and 2, write a list of actions you can take to
achieve your goal of breaking into a new career. You are
more likely to achieve your goals if they are “SMART”—
specific, measurable against clear criteria to show
progress, attainable with a chance of 50% or higher,
relevant to you, and time bound with target dates for
completion. We discuss the process of writing SMART
goals in Section 5.4. Try to keep your steps or goals to a
manageable number; somewhere between three and five
is recommended. Prioritize and schedule them to create
your plan, and if it helps you to give each one a name, by
all means do so.
temporary and solvable, or as a personal burden you are doomed
mosphere of trust and respect. The seminar topics are a
to bear? Are you a good listener? Your answers will give you an
comprehensive list of essential soft skills employers look for in
idea about how well developed some of your soft skills are.
college graduates and new hires—and say they seldom find:
More than 90 percent of respondents to a recent Global
communication proficiency, which includes verbal, nonverbal,
Human Capital Trends survey by the consulting firm Deloitte
and listening skills; self-understanding, lack of defensiveness,
identified soft In
skills
like communication,
emotional
understanding
exposing
unethical behavior,
then,understandit’s important toand
be emotional
clear why you’re
doing it and responsiveness; the ability to
59
ing, and problem
a critical
priority.
productively
manage
conflict;
Many
employers
(tryingsolving
to helpasthe
company
or just
get someone
in trouble),
not report
something
for and an understanding of team dethe
wrong
reason
(discuss
your
concerns
with
someone
who has similar
values),
velopment
and the
role of and
a team player in getting work done.
say these skills are hard to find in college graduates, who often
60
followmore
proper
channels
(like addressing
the supervisor
supposed
culprit).
Companies
are eagerly
looking of theFor
those who
wantDon’t
to learn online and at their own pace,
value hard skills
highly.
tryastowell,
report
externally
(lashing
on Facebook,
without speaking
to
for soft skills
however;
Google,
for out
example,
now pri- for instance)
many inexpensive
online classes
are available.64 These short
those who might resolve the problem.138
oritizes persistence and curiosity in its hiring process.61 The
interactive programs are geared for everyone from CEOs to
Some people view ethics in ideal terms, which means that ethical principles or stangood news dards
is thatapply
soft skills
can beacross
taught.situations
Employers
aretime.
find-Others,
entry-level
employees.
They cover everything from selfuniversally
and
however, take
a relativistic
confidence
to differences
emotional intelligence,
coaching teams, building
ing it worthview
investing
moneythat
to develop
in on
their
and believe
what is these
ethicalabilities
depends
the situation.
These
can
employees.create
A newconflict
study shows
trainingtrying
employees
soft
healthy work relationships, handling business etiquette, resolving
amongthat
managers
to makeindecisions.
the situation
faced
by a group
of executives working
with
Angelomaking,
to makereading
a
skills doesn’t Consider
just marginally
improve
individual
performance
conflicts,
decision
body language, negotiating,
decision
about opening
a newbetters
office overseas.
Angelo wasdealing
consulting
a global
com-to becoming a successful leader.
and employee
retention;
it actually
these metrics
withwith
angry
customers
pany that
was dealing
thefinancial
issue ofinvestment
whether oranot it should pay local officials for
enough to provide
a 250%
return with
on the
helping establish a new office overseas. Some executives in
the meeting
YOUR
CALLconcluded that
company makes in training programs.62
the company should pay these officials because it was a normal cost of doing business
For firmsinthat
spare their
employees
forsituation
three days,
thedifferently.
Look back
the firsttheparagraph
in this Practical Action box.
thiscan
country.
Others
viewed the
quite
Theyatthought
payAmerican Management
Association
offers
a soft-skills
WhichThe
of the
soft skills
listed there would you like to improve by
ments amounted
to bribes(AMA)
and were
totally
against the idea.
company
ultimately
seminar fordecided
managers
levels
supervithe time
you inability
graduate,toinopen
order to make yourself a more attracthatatitall
would
notincluding
make thefront-line
payments,
which resulted
in their
the new
office.they can gain are the ability to give
sors.63 Among
tive candidate to prospective employers?
the skills
4. Track your progress. You’ll see as you study this
chapter that monitoring or controlling progress toward
goals is an inherent part of the planning process. Each
time you get a result from one of your efforts, whether it’s
positive or negative, that result constitutes feedback on
how well you’ve selected your goals and how effective
your plan is. If one step doesn’t work out as planned, don’t
give up. Rely on your positive attitude and ability to adapt
(more career readiness skills) and realize you have other
opportunities to succeed. Try broadening your search, and
begin again.
Staying Resilient during the Process
Here are a few ideas about what else you can do to keep
your hopes—and your finances—afloat during the careerbuilding process.
1. Know that it takes time to find a job, especially
one that’s a good fit for both you and the company
that hires you. College graduates spend about six
months, on average, landing their first job after graduation.2
If you are already working, even part-time, stay in the job
while you pursue a new one. It’s always easier to find a job
if you have one. If you are not working, consider taking a
part-time or short-term job to generate some income.
since you’ll want to avoid running up credit card debt.
2. Create a budget to be sure your income will
cover your day-to-day expenses. This is a lifelong
habit that will serve you well.
3. Avoid making any major financial commitments
until you’ve actually landed your target job. You
won’t know how much you can afford to pay for a car until
you know your salary, for instance, and you may not want
to be encumbered by a new lease if your dream job
requires you to relocate. As long as you have an
appropriate interview outfit, even splurging on a
professional wardrobe can wait until you know the dress
code at your new employer.
For Discussion What fields or industries are interesting
or appealing to you as places to work? What news and
information about these areas can you start tracking now,
and how will you will do that? Is there anyone in your
network who can help you increase your understanding of
the way this industry works? If not, how could you find
someone?
Self-Assessments
All told, it is important for you to learn more about your ethical tendencies. This will
help you to behave in ways that are consistent with your values and beliefs. ●
kin75117_ch05_156-187.indd 157
kin75117_ch01_002-041.indd 21
SELF-ASSESSMENT 3.1
12/3/18 6:13 PM
CAREER READINESS
Assessing My Perspective on Ethics
This survey is designed to assess your views about ethics. It
provides feedback about your status on the Career Readiness
“other characteristic” of professionalism/work ethic.
Please be prepared to answer these questions if your
instructor has assigned Self-Assessment 3.1 in Connect.
1.
2.
3.
4.
Are your views more idealistic or more relativistic?
What do you think about students cheating on homework
assignments in school? What about cheating on exams?
Are your answers consistent with your score? Explain.
What can you say during an interview to demonstrate an
ethical orientation?
04/12/18 9:23 PM
Self-Assessment evaluations help students relate what they are learning
to their own experiences and promote self-reflection, engagement, and
development of their career readiness. Of the 66 total Self-Assessments
included, nearly 40 of them pertain to a career readiness competency.
For each of these,
students are asked to consider how they might display
Douglas McGregor and Theory X versus Theory Y Having been a college president for a time (at Antioch College in Ohio), Douglas McGregor came to realize that
it wasin
not an
enoughemployment
for managers to try to beinterview.
liked; they also needed to be aware of their
the competency
attitudes toward employees. Basically, McGregor suggested in a 1960 book, these attiManagement Theory
CHAPTER 2
53
22
Testimonials from Millennials
kin75117_ch03_076-115.indd 99
Each chapter includes two new boxed features
that provide testimonials from millennials
about their experiences with effective and
ineffective management. “I wish I . . .”
boxes illustrate real-world examples in which
students recall an instance when they or their
boss could have better applied certain
management concepts. “I’m glad I . . .”
boxes discuss positive applications of
management concepts.
xviii
07/12/18 9:48 PM
tudes could be thought of eitherGlobal
“X” or
“Y,” which weCHAPTER
introduced
in the chapter
opener
Management
4
125
about people-focused organizations.
Theory X represents a pessimistic, negative view of workers. In this view, workers are
considered to be irresponsible, to be resistant to change, to lack ambition, to hate work,
and to want to be led rather than to lead.
Theory Y represents a human relations outlook—an optimistic, positive view of work…considered the impact
ofcapable
ethnocentrism.
ers as
of accepting responsibility, having self-direction and self-control, and
being imaginative and creative.
Jordin Hansen
is Theory
a senior
was not taken
consideration
was thatoffered
English by
wasthe Theory
Why
X/TheoryWhat
Y Is Important:
Theinto
principal
contribution
director ofX/Theory
strategic Y
operanotisthe
main
language
for a majority
of thehow
company’s
globalaffect their
perspective
that
it helps
managers
understand
their beliefs
tions for a behavior.
global information
stakeholders.
One of the terms
chosen
to betopart
of the company
For example,
Theory X managers
are more
likely
micromanage,
which leads
technologyto company.
She
nomenclature
“solution.”
As Jordin explained,
this word
employee dissatisfaction,
becausewas
they
believe employees
are inherently
lazy.
experienced a clashing of culmeans very different things to people of different cultures.
tures when her company
“The word ‘solution’ in our industry in the United States can
developed nomenclature as
mean a piece of a larger solution; whereas in Europe when you
part of a global business
talk about solutions it usually means the full end-to-end supply
strategy.
chain or product,” said Jordin.
…work
withbenefits
a Theory
Y culture.
An executive
team inin
the an organization
There may have been short-term
to quickly announcJordin Hansen Courtesy Jordin
United
States
was
put
ing and implementing company vocabulary, but the long-term
Hansen
Cameron
Monkelien
works
thenegative.
banking
personally taken several risks because I have
together to develop a global
effects in
were
The team had to rethink the strategy several
industry
as
a
team
leader.
He
believes
his
comenough confidence in my performance and
business strategy for a new
times, and the buy-in from stakeholders was minimal. “We took
belief in my team that I can go out on a limb for
doesinvolved
a great job oftwo
making
business within a larger company. Part of thepany
strategy
steps employees
forward justat
to take fourteen steps back,” said Jordin.
levels
feel included
and Perhaps
empowered.
them and for myself,” said Cameron. But ultideciding on company vocabulary. “When youallrun
a global
orgathe most negative impact of presenting company
mately, Cameron believes his direct supervisor
large company
withnot
a culturally sensitive was a loss of crednization, having consistent nomenclature in howCameron
you talk works
about for avocabulary
that was
popular
name
and
a
lot
of
power,
but,
as
an environment where employees
things is extremely important, especially when you have global
ibility and trust among stakeholders. “This overstepped cultivates
the
Cameron
puts
it,
“It
really
has
its
head
on
its
feel safe to take risks and make mistakes. “My
customers,” said Jordin.
opinions and the input of the global stakeholders. It ruined
does a really good job about not
They give a lot
of tools and
capabili- later down the road that we wantedsupervisor
The approach that was used to decideshoulders.
on the company
credibility
for anything
to
ties toThe
everybody—not
supervisorssaid
and mandown on us when something goes
nomenclature was a very top-down approach.
strategy just
implement,”
Jordin. “In a world where relationships coming
are
wrong. Instead she asks, ‘How can we improve
butbut
all the
way down
to the bottom
team claimed they were listening to outside agers,
opinions
really
everything,
this islevel.”
incredibly important.”
Cameron
feels
interconnected
with
all
this
going
forward?’”
moved forward with what they thought was the best decision.
Courtesy of Jordin Hansen
aspects of his job because of the documentaCameron takes this lesson from his supervisor and works to make sure his own employees
tion and networking his company has worked
many years to build. “There isn’t a guessing
feel safe taking risks. “The first time one of my
Cameron Monkelien Courtesy
Ethnocentric views also affect our purchasing
believe
employees had a setback was almost two years
game wheredecisions.
you have toSome
figurepeople
out who
you that
Cameron Monkelien
What
we should only purchase products made
in to
our
country.
need
talkhome
to or where
you42need
to are
go toyour
get views
into his role. He felt like it was such a personal
about being an ethnocentric consumer?information.
You can find
outsomething
by taking that
Self-Assessment
That’s
a lot of my 4.1.
defeat on his part. I had to have a discussion
other jobs didn’t have: a database and network
with him where I said, ‘Having a failure does
of people and documents that point you in the right direction in
not mean that you are a failure. It means that there is still
room for growth, room for learning, and room for
given situation,” said Cameron.
SELF-ASSESSMENT 4.1 anyAnother
way that the company works to make its employimprovement.’”
ees feel included is to have monthly meetings where employCameron’s company has taken additional steps to create an
ees can interact with people
than
their direct
supervisors.
environment
of empowerment by changing some of the job
1. other
Are you
surprised
by the
results? What do
they suggest
Assessing Your Consumer Ethnocentrism
This helps employees to feelabout
like upper
management
is listen-Whattitles.
“Instead
of being a manager or a supervisor, you get the
your purchasing
decisions?
are the
pros and
This survey is designed to assess your consumer
ethnocening to their
concerns and ideas,
and
they
really make
a
title of ‘leader’ because it instills the idea that instead of being
cons
of that
being
an can
ethnocentric
consumer?
trism. Please be prepared to answer thesedifference
questionswithin
if your
in
charge
of
your
the organization.
2. How do American companies, associations, and unions employees, you are leading them.”
instructor has assigned Self-Assessment 4.1 in Connect.
Cameron also feels safe encourage
to take risks
and
make
mistakes
us to be ethnocentric consumers?
rather than fearing the consequences of doing so. “I have
Courtesy of Cameron Monkelien
I Wish I…
I’m glad I…
Polycentric Managers—“They Know Underlying
Best” Polycentric
managers
the view theories is the notion that more job
both Maslow’s
and take
McGregor’s
that native managers in the foreign offices
best understand
native
personnel
practices,
satisfaction
leads to
greater
workerand
performance—an
idea that is somewhat controverand so the home office should leave them
alone.
Thus,discuss
the attitude
of polycentric
managsial,
as we’ll
in Chapter
11.
ers is nearly the opposite of that of ethnocentric managers.
Geocentric Managers—“What’s Best Is What’s Effective, Regardless of Origin”
Geocentric managers accept that there are differences and similarities between home and
foreign personnel and practices and that they should use whatever techniques are most
effective. Clearly, being an ethno- or polycentric manager takes less work. But the payoff
kin75117_ch02_042-075.indd 53
12/3/18 6:43 PM
for being a geocentric manager can be far greater. ●
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kin75117_ch04_116-155.indd 125
08/12/18 7:29 AM
10/12/18 7:59 PM
Understanding the Chapter: What Do I Know?
1. How would you explain the difference between
internal and external stakeholders?
2. Among external stakeholders, what’s the difference
between the task environment and the general
environment?
3. Of the 11 groups in the task environment, which five
do you consider most important, and why?
4. Of the six groups in the general environment, which
one do you think has the least importance, and why?
5. Distinguish among the four approaches to deciding
ethical dilemmas.
Management in Action cases
Management in Action
Rather than using stories about companies, the new
Management in Action cases now focus on higher
levels of learning by asking students to solve real
organizational problems using relevant management
concepts.
Who’s to Blame for College Basketball’s
“Dark Underbelly”?
Legal/Ethical Challenge cases
Legal/Ethical Challenge cases ask students to resolve real
ethical challenges faced by managers and organizations. They
help develop students critical thinking and problem-solving
skills around ethical issues.
athletesCollegiate
are students
or being
paid under
the table.
Thethe
National
Athletic
Association
(NCAA)
just wantorganization
to see the games.
Thus,tothe
is “aThey
member-led
dedicated
thereward
well- far
188
outweighs
any risk,
and the
the NCAA
being
and lifelong
success
of chances
college that
athletes.”
wouldinaddress
andNCAA
attempt“functions
to stop a as
lucrative
black
Founded
1906, the
a general
market and
of player
peddling the
highestforbidder
legislative
administrative
authority
men’sstretches
and
the limits
of credibility.
It can be
to bite the
hand
women’s
intercollegiate
athletics”
andhard
“formulates
and
that feeds
you.”211
enforces
the rules
of play for various sports and the
eligibility criteria for athletes.”189
NOW
WHAT?
One of the “bedrock principles” of the NCAA is
Justice Joon
Kimofdescribed
those indicted
as “assismaintaining
the spirit
amateur competition.
Students
coaches to
of be
major
Division athletes,
I schoolseducation
with top-tier
are tant
not allowed
professional
programs”
whoand
haveall“been
in and
around
game for
holds
top priority,
athletes
receive
a fairthe
chance
190 All of them had the trust of players they
a
long
time.
to compete. The NCAA outlines specific rules athYoung
men whoamateur
looked status
up to and,
themthus,
and beletesrecruited.
must follow
to maintain
lieved to
their
coaches
had their
best interests
heart.”212
eligibility
continue
playing
collegiate
sports. at
Student
Kim described
scenario
of coaches
“taking
athletes
are, amonga other
things,
prohibited
fromcash
191 circling blue-chip prosbribes,
managerscompanies
and advisers
and from receiving
publicly
endorsing
pects for
like athletic
coyotes,participation
and employees
a globalfrom
sportsa salary
or ofbenefits
wear company
prospective
agents.192funneling cash to families of high
213
Kim added,prohibit
“Monthcorporate
after month,
school recruits.”
Although
NCAA guidelines
the defendants
exploited
the hoop dreams
of athletes
sponsorships
at the
individual-athlete
level, college
around
country,
allegedly
treatingsince
them1977,
as little
teams
have the
benefited
from
such alliances
more
than opportunities
to Sonny
enrich Vaccaro
themselves
through
when
shoe-company
executive
“signed
bribery
and fraud
schemes
. The defendants’
alleged
several
coaches
he knew
. . . to. . contracts
with Nike.”
conducttonot
only sullied
spiritchanged’
of amateur
athletics,
According
Vaccaro,
“‘thethe
world
in 1987,
butNike
it showed
contempt
for thedeal”
thousands
of players
when
signed its
first all-school
to sponsor
all
andUniversity
coaches who
follow athletic
the rules
and With
play the
game
of the
of Miami’s
teams.
these
thesaid
right
way.”214“you own everything in that school.
deals,
Vaccaro,
193
As acompany
result ofisthe
and
subsequent inThat shoe
nowinvestigation
your business
partner.”
dictments, “the NCAA has established a Commission
on College
basketball”
with AMATEURISM
members including “forA BLURRY
LINE
BETWEEN
mer
Secretary of State Condoleezza Rice, former
AND
PROFESSIONALISM
Chairman of the Joint Chiefs of Staff Gen. Martin
Benefits aside, strategic relationships between apparel
Dempsey, and former NBA stars David Robinson and
companies and215universities blur the line between
Grant Hill.” Further, the federal courts have stated
areThe
the
first in a of
series
of many
112 that these indictments
PART 2
Environment
Management
that will come to light in the coming months. The FBI
has set up a tip line where those with knowledge regarding these schemes can call and share information.216
Sources believe the ongoing probe will likely implicate
additional
kin75117_ch03_076-115.indd
112 college programs, sports apparel companies,
and agents.217
6. What’s the difference between insider trading and a
Ponzi scheme?
7. How would you summarize Kohlberg’s levels of
personal moral development?
8. What are four ways that organizations can promote
ethics?
9. Describe the levels in Carroll’s corporate social
responsibility pyramid. Where does trying to achieve
sustainability fit in?
10. How would you explain the concept of corporate
governance?
amateurism and professionalism for two reasons.
The first is money flowing to universities. Companies
such as Nike, Under Armour, and Adidas “pay tens
There is hope that these indictments will send a
of millions of dollars a year to equip (and, from a
strong message that these behaviors will not be tolermarketing standpoint, align themselves) with major
ated and will be punished to the fullest extent of the
university programs.” 194 These alliances benefit
law. “With the federal government’s threat of serious
universities due to increased revenues generated by the
punishment, coaches are more likely to operate within
sponsorships, and they earn sports apparel companies
NCAA rules. At the very least, they will think twice,
not only exclusive rights to partner with large academic
knowing that indictments, potential jail time and huge
institutions, but also insider access
to the country’s top
legal fees are on the table.”218
athletic talent.
William Sweeney Jr., the Assistant Director-inThe second reason is money for college athletes.
Charge of the FBI’s New York office, said the “arrests
A particular challenge in NCAA basketball is the reality
serve as a warning to others choosing to conduct busithat some athletes don’t intend to graduate from
ness this way in the world of college athletics: We have
college. Due in large219part to the NBA’s “one-and-done”
your playbook.”
rule prohibiting athletes from playing professionally
before
their
19th birthday, elite players often attend
FOR
DISCUSSION
classes for a year until they age into the NBA draft.195
Problem Solving Perspective
Apparel sponsors are often overly eager to secure exclu1. What
is the
underlying
in this
from the
sive deals
with
elite
athletes problem
who may
earncase
coveted
government’s
perspective?
spots in federal
the NBA
because these
arrangements generate
lots of2.money
foryou
thethink
sponsors.
Why do
assistant coaches play such a significant role in these scandals?
ASSISTANT COACHES AND FEDERAL
3. How do you think the NCAA and the Commission
INDICTMENTS
on College basketball should move forward to prevent
Assistant coaches serve as the primary recruiters of top
illegal behavior from occurring in the future?
high-school talent and are expected to act as salesperof Chapter and
Content
sonsApplication
for their universities
build strong relationships
with prize recruits.196 They are expected to follow
1. How do you think the basketball teams’ task environNCAA guidelines, and they do not always do so.
ment, particularly competitors, allies, customers, regIn November 2017, four assistant college basketball
ulators, and media, played into the corruption in the
coaches were among 10 individuals indicted by a fedNCAA?
eral grand jury. Fortune described the lead-up to the
2. Are the
school
who accepted
bribes
indictments
as “ahigh
detailed
andrecruits
clandestine
FBI investifromexposed
apparel alleged
companies
and coaches purely
victims
gation that
under-the-table
payments
in this
situation,
should to
their
behaviortalented
also be conto agents,
coaches,
andorparents
influence
unethical?
Explain your
answer to
using
one of
athletessidered
to choose
particular
colleges
play
the four approaches to deciding ethical dilemmas.
3. What might the NCAA do to promote higher ethical standards among its schools, coaches, players,
and allies?
4. How do you think the scandal has and will continue
to affect customers, players’ attitudes on the court,
and NCAA sales?
12/3/18 6:55 PM
Legal/Ethical Challenge
Defense” or “Defense to Repayment” sponsored by the
Should You Apply to Have Your Student
2.Education
Continue Department
funding Alzheimer’s
R&D. As a global
Other big drug makers are not letting profit and limited
offers a lifeline.
Loans
Forgiven?
leader
in the pharmaceutical
Pfizer has
anobcapacity get in their way. A top scientist at Eli Lilly, one of
The program
is available forindustry,
those students
who
Student
loan debttold
nearly
tripledTimes
in the
decade,
obligation
society
find treatments
for diseases
Pfizer’s
competitors,
Financial
thatlast
“Taking
tained
loanstofrom
thetogovernment’s
Direct
Loan proto increased
attendance
for-profitcost
colleges
affecting
millions
of
people.
This
wouldtoalso
be in
carethanks
of Alzheimer’s
patients
is a hugeateconomic
to
gram. “The law says students are entitled
forgiveness
220
along
with
tuition
expenses.
line
with
its
mission
statement
and
values.
society
and
nowrising
is notcollege
the time
to giveand
up.”living
Eli Lilly’s
most
of any existing debt—and, possibly, reimbursement of
For hundreds
of thousands
buried
student
loan
advanced
Alzheimer’s
drug failed in
a largeintrial
in 2016,
repaid loans—if
they
show
that their
school
3.any
Contribute
to agencies
suchcan
as the
National
Institutes
a little has
known
1994
programAlzheimer’s
called “Borrower
butdebt,
the company
vowed
to continue
treatviolated
statesolaw
in getting
them totheir
take studies
out the debt.
of Health
they
can continue
of
ment R&D.80 Another U.S. competitor, AstraZeneca, also
Alzheimer’s.
114 committed toPART
2
Environment of Management
remains
fighting
theThe
disease.
4. Suggest other options.
SOLVING THE CHALLENGE
What would you do if you were Pfizer’s CEO?
1. Move on to other projects. Pfizer has an obligation to
its shareholders not to throw money at projects that
prove to be unsuccessful.
kin75117_ch03_076-115.indd 114
Uber Continuing cases
These new cases ask students to synthesize and apply what
they’ve learned across the course to Uber. Based on reviewer
feedback, we’ve introduced these at the chapter level.
12/3/18 6:55 PM
Uber Continuing Case
Learn how Uber’s corporate strategies have changed from those pursued by founder
and CEO Travis Kalanick to those identified by current CEO Dara Khosrowshahi.
Assess your ability to apply concepts discussed in this chapter to the case by going to
Connect.
186
kin75117_ch05_156-187.indd 186
PART 3
Planning
04/12/18 10:29 PM
xix
kin75117_fm_i-xxxviii-1.indd 19
25
27
29
31
33
37
10/12/18 7:59 PM
506
PART 5
Leading
Formal versus Informal Groups
Groups can be either formal or informal.9
■
Formal groups—created to accomplish specific goals. A formal group is a group
assigned by organizations or its managers to accomplish specific goals. A formal
group may be a division, a department, a work group, or a committee. It may
be permanent or temporary. In general, people are assigned to them according
to their skills and the organization’s requirements.
Informal groups—created for friendship. An informal group is a group formed by
Imaginative Writing for Readability and Reinforcement
■
people whose overriding purpose is getting together for friendship or a common
interest. An informal group may be simply a collection of friends who hang out
with one another, such as those who take coffee breaks together, or it may be as
Research shows that products written in an imaginative, story-telling
improve
organizedstyle
as a prayersignificantly
breakfast, a bowling team,
a service club, a company “alumni
group” (for example, former Apple employees), or a voluntary organization.
students’ ability to retain information. We employ numerous journalistic
devices
to
make
the
material
What’s important for you as a manager to know is that
informal
groups can advance
or undercut the plans of formal groups. The formal organization may make efforts, say,
to speed up the plant assembly line or to institute workplace reforms. But these attempts
engaging and relevant to students lives.
may be sabotaged through the informal networks of workers who gossip over e-mails
and informal gatherings, such as meeting after work for a beer.10
However, interestingly, informal groups can also be highly productive—even more so
than formal groups.
EXAMPLE
Example boxes
We utilize numerous Example boxes to
emphasize the practical applications of
business. These mini cases use snapshots of
real-world companies to explain text concepts.
Your Call questions stimulate class discussions
and help students develop their critical thinking
skills. Suggestions for how to use the Example
boxes are found in the Teaching Resource
Manual (TRM).
Informal Groups and Informal Learning: Sharing Knowledge in the
Lunchroom and on Social Media
As a manager, what would you think if you saw employees
making brief conversation near the lunchroom coffeepot? Are
they talking about the season finale of their favorite show, or is
something more productive taking place? Office kitchens have
been hidden out of sight for generations, an unloved necessity
kept stark to make sure workers didn’t linger, says the Los
Angeles Times. Companies are now seeing office kitchens in a
new light. Kitchens are being turned into showplaces intended
to boost morale, encourage collaboration, and create a learning environment.11 Why the change of heart?
Workplace Learning: Mostly Informal
Research has found that 70 percent of
workplace learning is informal.12
Organizations are taking notice of this
phenomenon. For example, Siemens
managers have placed overhead projectors and empty pads of paper in the
lunchroom to facilitate the exchange of
information.13 The highest-performing
Google employees teach and support
those employees looking to improve.
Google certainly has the resources to
afford fancy training programs. The
company instead opts for peer-to-peer
training in order to foster a culture of
learning that values continuous development and the sharing of knowledge
and expertise.14
Online Peer-to-Peer Networks What about when employees are in far-flung places? “Sales reps are out in the field
and they’re kind of on islands,” pointed out an Indianapolis
software-firm executive. “It’s a challenge to keep everyone
connected.”15 So when the 75 reps started overwhelming
the sales-support staff with questions about product details
and client information, the company created a website on
which the reps could post and answer questions in an informal peer-to-peer learning setting.16 These types of portals
can also be used for employees in distant locations to
tell each other personal and professional stories to share
experiences. Research has shown
that when people talk informally,
65 percent of the time they are telling stories. So providing an online
venue for storytelling can be quite
effective.17
Talking it out. Ever worked in a job in which you got a
lot of informal training through conversations over
coffee? Could this be done with social networking?
©Jacobs Stock Photography/Photodisc/Getty Images
YOUR CALL
Can games (such as the online multiplayer game Second Life) or other
social media (Facebook, Twitter,
Instagram, etc.) be used to foster
informal workplace collaboration?
How about allowing employees to
BYOD—“bring your own device” to
work, such as their own smartphone
or tablet?18
kin75117_ch13_502-533.indd 506
“
“
12/3/18 4:02 AM
Readability is very good for the undergraduate audience. Updates are frequent and
provide current examples.
—Justin Davis,
University of West Florida
”
The order and quality of information within the textbook (is great). Logical for faculty,
plenty of examples for students; Kinicki provides better detail and examples, and good
supplemental materials.
”
—Alex Williams,
Texas A&M Commerce
xx
kin75117_fm_i-xxxviii-1.indd 20
10/12/18 7:59 PM
Resources That Work
No matter how you teach your course: face-to-face, hybrid, or online—you’re in the driver’s seat. We offer
the most robust set of resources to enhance your Principles of Management course. In addition to our unique
Teaching Resource Manual, packed with additional activities and supplemental teaching tools; PowerPoint
presentations; and Test Bank questions, we have a wealth of assignable resources available in Connect®.
Connect®
The ninth edition continues to build on the power of
Connect and furthers our quest to help students move from
comprehension to application. McGraw-Hill Connect® is a
personalized teaching and learning tool powered by adaptive
technologies so your students learn more efficiently, retain
more, and achieve better outcomes. We used this platform to
create exercises that are auto-graded in order to assist
students in developing their career readiness. Here you will
find a wide variety of learning resources that develop
students’ higher-order thinking skills, including:
• SmartBook®—As part of Connect, students have access
to SmartBook®, fueled by LearnSmart, an adaptive
learning and reading tool. SmartBook prompts students
with questions based on the material they are studying.
By assessing individual answers, SmartBook learns what
each student knows and identifies which topics they
need to practice. This adaptive technology gives each
student a personalized learning experience and path to
success. SmartBook provides students with a seamless
combination of practice, assessment, and remediation.
• Click & Drag exercises—These activities help make the
connection between theory and application through
matching, ranking, or grouping. Every Career Corner
has an exercise to help you assess students understanding about how to improve targeted career readiness
competencies.
• iSeeIt animated videos—These brief, contemporary
videos offer dynamic student-centered introductions,
illustrations, and animations to guide students through
challenging concepts. Ideal for before class as an
introduction, during class to launch or clarify a topic,
or after class for formative assessment.
• Self-Assessments—Designed to promote student selfawareness and self-reflection, these research-based
activities also provide personal and professional
development. For this edition, five new assessments
were created to measure different career readiness
competencies. In addition, new structured feedback
explains how students should interpret their scores.
“
kin75117_fm_i-xxxviii-1.indd 21
• Case Analyses and Video Cases—Our assortment of
written and video cases challenge students to analyze
concepts as they manifest in scenarios related to a reallife product or company, fostering students’ ability to
think critically in lecture and beyond. Thought-provoking
questions check the students’ application of the course
material and develop their workplace readiness skills.
• Manager’s Hot Seat videos—These actor-portrayed videos
depict real-life situations where a manager is faced with a
dilemma that needs to be analyzed based on management
concepts. The videos have been a hit throughout the
years because they put students at the center of
controversial situations and contribute to their use of
critical thinking to solve problems. Eleven new Manager’s
Hot Seats have been added to Connect for concepts such
as motivation, decision making, organizational structure,
and more. Each Hot Seat includes follow-up multiplechoice questions that are assignable and auto-gradable.
• Uber Continuing Case—Students understand the
application of and relationship between different concepts
by applying them to the same company throughout the
semester. We conducted an extensive revision to the case
based on current events and the need to offer a more
flexible method for using it. Instructors now have a
continuing case on Uber that can be used for every
chapter or as a summary case for each part. Each chapter
case includes multiple-choice questions that are assignable
and auto-gradable, as well essay-based questions.
• Application-Based Activities—These activities provide
students valuable practice using problem-solving skills to
apply their knowledge to realistic scenarios. Students
progress from understanding basic concepts to using their
knowledge to analyze complex scenarios and solve reallife problems. Along the way, students see the implications
of their decisions and are provided with feedback on how
management theory should be informing their actions.
They also receive detailed feedback at the conclusion of
the activity. The simulations are assignable and autogradable. Ten new application-based activities have been
added to Connect for concepts such as ethics,
organizational culture, change management, and more.
It is the best Management textbook on the market. Most importantly, and the key competitive advantage,
is the Connect material. LearnSmart/SmartBook is above and beyond anything else out there.
”
—Gerald Schoenfeld,
Florida Gulf Coast University
10/12/18 7:59 PM
Students—study more efficiently, retain
more and achieve better outcomes.
Instructors—focus on what you love—
teaching.
SUCCESSFUL SEMESTERS INCLUDE CONNECT
For Instructors
You’re in the driver’s seat.
Want to build your own course? No problem. Prefer to use our turnkey,
prebuilt course? Easy. Want to make changes throughout the semester?
Sure. And you’ll save time with Connect’s auto-grading too.
65%
Less Time
Grading
They’ll thank you for it.
Adaptive study resources like SmartBook® help
your students be better prepared in less time. You
can transform your class time from dull definitions to
dynamic debates. Hear from your peers about the
benefits of Connect at www.mheducation.com/
highered/connect
Make it simple, make it affordable.
Connect makes it easy with seamless integration using any of the
major Learning Management Systems—Blackboard®, Canvas, and
D2L, among others—to let you organize your course in one
convenient location. Give your students access to digital materials
at a discount with our inclusive access program. Ask your
McGraw-Hill representative for more information.
©Hill Street Studios/Tobin Rogers/Blend Images LLC
Solutions for your challenges.
A product isn’t a solution. Real solutions are affordable,
reliable, and come with training and ongoing support
when you need it and how you want it. Our Customer
Experience Group can also help you troubleshoot
tech problems—although Connect’s 99% uptime
means you might not need to call them. See for
yourself at status.mheducation.com
kin75117_fm_i-xxxviii-1.indd 22
10/12/18 7:59 PM
For Students
Effective, efficient studying.
Connect helps you be more productive with your study
time and get better grades using tools like SmartBook,
which highlights key concepts and creates a personalized
study plan. Connect sets you up for success, so you walk
into class with confidence and walk out with better
grades.
I really liked this app it
“made
it easy to study when
—
you don't have your textbook
in front of you.
”
- Jordan Cunningham,
Eastern Washington University
©Shutterstock/wavebreakmedia
Study anytime, anywhere.
Download the free ReadAnywhere app and access
your online eBook when it’s convenient, even if you’re
offline. And since the app automatically syncs with
your eBook in Connect, all of your notes are available
every time you open it. Find out more at www.
mheducation.com/readanywhere
No surprises.
The Connect Calendar and Reports
tools keep you on track with the work
you need to get done and your
assignment scores. Life gets busy;
Connect tools help you keep learning
through it all.
13
14
Chapter 12 Quiz
Chapter 11 Quiz
Chapter 13 Evidence of Evolution
Chapter 11 DNA Technology
Chapter 7 Quiz
Chapter 7 DNA Structure and Gene...
and 7 more...
Learning for everyone.
McGraw-Hill works directly with Accessibility Services
Departments and faculty to meet the learning needs of all
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kin75117_fm_i-xxxviii-1.indd 23
10/12/18 7:59 PM
acknowledgments
I have the pleasure of working with one of the best teams in the business. Their dedication and effort significantly contribute to the quality of this revision. It all begins with
the captain of the team, Michael Ablassmier. As my editorial director he provides
the internal support to launch and manage the revision process. He also spends
much time traveling in support of my products. Thanks for your continuing support
over the last 10 years! To Anne Ehrenworth, product developer, thank you for paying
attention to the details, keeping us all focused on the schedule, and coordinating all the
moving pieces.
To Debbie Claire, executive marketing manager, you are the energizer bunny who works
tirelessly in support of this product. Your creativity, passion, and effort make you the absolute best at your job, and you push me more than anyone to raise my “marketing” game.
Thank you! To Harvey Yep, your knowledge and experience with the production process
keep us on schedule and responsive to all the change requests.
To Patrick Soleymani, your support as my digital faculty consultant is invaluable. Your
work on the Teaching Resource Manual and writing cases were instrumental in creating
essential teaching materials. To Denise Breaux Soignet, your efforts in writing cases and
developing digital activities to assess student learning greatly enhanced the product.
To Sarah Thomas, market development manager, Keri Johnson, content project manager; and Jessica Cuevas, designer, thanks for all you do to in support of the product.
I would also like to thank Elisa Adams for her editorial assistance; Lindy Archambeau,
Barbara Larson, Grace McLaughlin, and Jennifer Muryn for their work on the Teaching
Resource Manual; Shelly Arneson for the PowerPoint slides; and to Ken Carson for his
work on the Self-Assessments for Connect.
To McGraw-Hill company, it is a world-class publisher and I am grateful to be a member
of the family.
Warmest thanks and appreciation go to the individuals who provided valuable input
during the developmental stages of this edition, as follows:
Dr. M. Ruhul Amin,
Bloomsburg University of
Pennsylvania
Joel Andexler,
Cuyahoga Community College
Lindy Archambeau,
Warrington College of Business,
University of Florida
Joseph Aranyosi,
University of Phoenix
Shelly Arneson,
Colorado State University
Lisa Augustyniak,
Lake Michigan College
Tanya Balcom,
Macomb Community College
Amy S. Banta,
Ohio University
Valerie Barnett,
Kansas State University
Lynn Becker,
Univeristy of Central Florida
Reginald Bruce,
University of Louisville
William Belcher,
Troy University
Regina Cannon,
Tarrant County College
Jessie Bellflowers,
Fayetteville Technical Community
College
Tara Carr,
University of Wisconsin–Green Bay
Michael Bento,
Owens Community College
George Bernard,
Seminole State College of Florida
Stephen Betts,
William Patterson University
Jim Bishop,
New Mexico State University
Alison Bolton,
Solano Community College
Anne Brantley,
Central Piedmont Community
College
Shari Carpenter,
Eastern Oregon University
Anastasia Cortes,
Virginia Tech
Justin L. Davis,
University of West Florida
Carrie L. Devone,
Mott Community College
Jennifer Egrie,
Keiser University
Bennie Felts,
North Carolina Wesleyan College
Charla Fraley,
Columbus State Community College
xxiv
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10/12/18 7:59 PM
Dana Frederick,
Missouri State University
Bobbie Knoblauch,
Wichita State University
Thomas Philippe,
St. Petersburg College
Patricia Galitz,
Southeast Community College
Todd Korol,
Monroe Community College
Michael Pirson,
Fordham University
Barbara Garrell,
Delaware County Community College
Zahir Latheef,
University of Houston Downtown
Beth Polin,
Eastern Kentucky University
Terry Girdon,
Pennsylvania College of Technology
Dave Lanzilla,
College of Central Florida
Elizabeth Prejean,
Northwestern State University
Lacey Gonzalez-Horan,
Lehigh Carbon Community College
Barbara Larson,
Northeastern University
Kenneth Rasheed,
Chattahoochee Technical College
Jan Grimes,
Georgia Southern University
Zahir Latheef,
University of Houston–Downtown
Chelsea Hood Reese,
Southeast Community College
William Habacivch,
Central Penn College
Blaine Lawlor,
University of West Florida
Martha Robinson,
University of Memphis
Gordon Haley,
Palm Beach State College
Benjamin Lipschutz,
Central Penn College
David Ruderman,
University of Colorado–Denver
R. Hall,
Tarleton State University
Charles Lyons,
University of Georgia
Jerry Schoenfeld,
Florida Gulf Coast University
Lisa M. Harris,
Southeast Community College
Professor Cheryl Macon,
Butler County Community College
Marina Sebastijanovic,
University of Houston
Joanne Hartsell,
East Carolina University
Zengie Mangaliso,
University of Massachusetts–Amherst
Sarah Shike,
Western Illinois University
Ahmad Hassan,
Morehead State University
Christine Marchese,
Nassau Community College
Raj K. Singh,
University of California–Riverside
Karen H. Hawkins,
Miami Dade College–Kendall Campus
D. Kim McKinnon,
Arizona State University
Paula Kirch Smith,
Cincinnati State
Cathy Henderson,
Stephen F. Austin State University
Ben McLarty,
Mississippi State Univerisity
Dustin Smith, PhD.,
Webster University
Nhung Hendy,
Towson University
Erin McLaughlin,
University of Alabama–Huntsville
George E. Stevens,
Kent State University
Lara Hobson,
Western Michigan University
Christine Miller,
Tennessee Tech University
Jerry Stevens,
Texas Tech University
Anne Hoel,
University of Wisconsin–Stout
Lorianne Mitchell,
East Tennessee State University
Gregory A. Hoffeditz,
Southern Illinois University–Carbondale
Debra L. Moody,
Virginia Commonwealth University
C. Justice Tillman,
Baruch College, City University of
New York
James Hopkins,
University of Georgia
Vivianne Moore,
Davenport University
Tammy Hunt,
University of North Carolina–
Wilmington
Byron Morgan,
Texas State University
Perwaiz Ismaili,
Metropolitan State University
Jacquelyn Jacobs,
University of Tennessee
Paul D. Johnson,
University of Mississippi
Jennifer Muryn,
Robert Morris University
Troy Nielson,
Brigham Young University
Paul O’Brien,
Keiser University
Sue Joiner,
Tarleton State University
Nathan Oliver,
University of Alabama at
Birmingham
John Kirn,
University of Kentucky
Rhonda Palladi,
Georgia State University
Jim Turner,
Davenport University
Brandi Ulrich,
Anne Arundel Community College
George Valcho,
Bossier Parish Community College
Tim Waid,
University of Missouri
Wendy Walker,
University of North Georgia
Charlene Walters,
Strayer University
Rick Webb,
Johnson County Community College
Joette Wisnieski,
Indiana University of Pennsylvania
Acknowledgments
kin75117_fm_i-xxxviii-1.indd 37
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Anthony Weinberg,
Daymar College
Wallace Alexander Williams Jr.,
Texas A&M University–Commerce
M. Susan Wurtz,
University of Northern Iowa
David Wernick,
Florida International University
Dr. Linsey Willis,
Florida Atlantic University
Jan Zantinga,
University of Georgia
I would also like to thank the following colleagues who served as manuscript reviewers during the development of
previous editions:
Steven W. Abram,
Kirkwood Community College
Larry Bohleber,
University of Southern Indiana
Jack Cichy,
Davenport University
G. Stoney Alder,
University of Nevada–Las Vegas
Melanie Bookout,
Greenville Technical College
Anthony Cioffi,
Lorain County Community College
Phyllis C. Alderdice,
Jefferson Community and Technical
College
Robert S. Boothe,
University of Southern Mississippi
Deborah Clark,
Santa Fe Community College
Carol Bormann Young,
Metropolitan State University
J. Dana Clark,
Appalachian State University
Susan M. Bosco,
Roger Williams University
Dean Cleavenger,
University of Central Florida
David Allen Brown,
Ferris State University
Sharon Clinebell,
University of Northern Colorado
Jeffrey L. Anderson,
Ohio University
Roger Brown,
Northwestern Oklahoma State
University
Loretta Fergus Cochran,
Arkansas Tech University
Darlene Andert,
Florida Gulf Coast University
Marit Brunsell,
Madison Area Technical College
John Anstey,
University of Nebraska at Omaha
Jon Bryan,
Bridgewater State University
Maria Aria,
Camden County College
Becky Bryant,
Texas Woman’s University
Mona Bahl,
Illinois State University
Paul Buffa,
Jefferson College, Missouri Baptist
University
Laura L. Alderson,
University of Memphis
Danielle Beu Ammeter,
University of Mississippi
William Scott Anchors,
University of Maine at Orono
Pamela Ball,
Clark State Community College
Valerie Barnet,
Kansas State University
Neil Burton,
Clemson University
James D. Bell,
Texas State University–San
Marcos
Barbara A. Carlin,
University of Houston
Jessie Bellflowers,
Fayetteville Technical Community
College
Victor Berardi,
Kent State University
Patricia Bernson,
County College of Morris
Mark David Burdsall,
University of Pittsburgh
Pamela Carstens,
Coe College
Julie J. Carwile,
John Tyler Community College
Daniel A. Cernas Ortiz,
University of North Texas
Glenda Coleman,
South University
Ron Cooley,
South Suburban College
Melissa M. Cooper,
School of Management, Texas
Woman’s University
Gary Corona,
Florida State College
Keith Credo,
University of Louisiana–Lafayette
Derek E. Crews,
Texas Woman’s University
Daniel J. Curtin,
Lakeland Community College
Ajay Das,
Baruch College
Tom Deckelman,
Owens Community College
Linda I. DeLong,
University of La Verne
Margaret Deck,
Virginia Tech
David Bess,
University of Hawaii
Glen Chapuis,
St. Charles Community
College
Stephen Betts,
William Paterson University
Rod Christian,
Mesa Community College
E. Gordon DeMeritt,
Shepherd University
Randy Blass,
Florida State University
Mike Cicero,
Highline College
Kathleen DeNisco,
Erie Community College
xxvi
kin75117_fm_i-xxxviii-1.indd 26
Kate Demarest,
University of Baltimore
Acknowledgments
10/12/18 7:59 PM
Anant R. Deshpande,
SUNY Empire State College
Lucy R. Ford,
Saint Joseph’s University
Karen H. Hawkins,
Miami Dade College, Kendall Campus
John DeSpagna,
Nassau Community College
Charla Fraley,
Columbus State Community College
Samuel Hazen,
Tarleton State University
Pamela A. Dobies,
University of Missouri–Kansas City
Gail E. Fraser,
Kean University
Jack Heinsius,
Modesto Junior College
David Dore,
Pima Community College
Dana Frederick,
Missouri State University
Duane Helleloid,
University of North Dakota
Lon Doty,
San Jose State University
Tony Frontera,
Binghamton University
Evelyn Hendrix,
Lindenwood University
Ron Dougherty,
Ivy Tech Community College/
Columbus Campus
Dane Galden,
Columbus State Community College
Kim Hester,
Arkansas State University
Michael Garcia,
Liberty University
Anne Kelly Hoel,
University of Wisconsin–Stout
Evgeniy Gentchev,
Northwood University
Mary Hogue,
Kent State University
Lydia Gilmore,
Columbus State Community
College
David Hollomon,
Victor Valley College
Scott Droege,
Western Kentucky University
Ken Dunegan,
Cleveland State University
Steven Dunphy,
Indiana University Northwest
James Glasgow,
Villanova University
Tammy Hunt,
University of North Carolina–
Wilmington
Ronnie Godshalk,
Penn State University
Aviad Israeli,
Kent State University
Connie Golden,
Lakeland Community College
Edward Johnson,
University of North Florida
Jack Dustman,
Northern Arizona University
Deborah Cain Good,
University of Pittsburgh
Nancy M. Johnson,
Madison Area Technical College
Ray Eldridge,
Lipscomb University
Kris Gossett,
Mercyhurst University
Kathleen Jones,
University of North Dakota
Bob Eliason,
James Madison University
Marie Gould,
Horizons University
Rusty Juban,
Southeastern Louisiana University
Valerie Evans,
Kansas State University
Tita Gray,
Maryland University of Integrative
Health
Dmitriy Kalyagin,
Chabot College
Linda Durkin,
Delaware County Community
College
Subhash Durlabhji,
Northwestern State University of
Louisiana
W. Randy Evans,
University of Tennessee at
Chattanooga
Paul A. Fadil,
University of North Florida
Ryan Greenbaum,
Oklahoma State University–
Stillwater
Heesam Kang,
Trident University International
Marvin Karlins,
University of South Florida
Kevin S. Groves,
Pepperdine University
Marcella Kelly,
Santa Monica College
Joyce Guillory,
Austin Community College
Richard Kimbrough,
University of Nebraska–Lincoln
Reggie Hall,
Tarleton State University
Renee N. King,
Eastern Illinois University
Judy Fitch,
Augusta State University
Stephen F. Hallam,
The University of Akron
Shaun C. Knight,
Penn State University
Carla Flores,
Ball State University
Marie DK. Halvorsen-Ganepola,
University of Notre Dame
Bobbie Knoblauch,
Wichita State University
Christopher Flynn,
University of North Florida
Charles T. Harrington,
Pasadena City College
Todd Korol,
Monroe Community College
David Foote,
Middle Tennessee State University
Santhi Harvey,
Central State University
Leo C. Kotrodimos,
NC Wesleyan College
Crystal Saric Fashant,
Metropolitan State University
Jud Faurer,
Metropolitan State University of
Denver
Acknowledgments
kin75117_fm_i-xxxviii-1.indd 37
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Sal Kukalis,
California State University–Long
Beach
Brenda McAleer,
University of Maine at Augusta
John Orife,
Indiana University of Pennsylvania
Daniel W. McAllister,
University of Nevada–Las Vegas
Eren Ozgen,
Florida State University–Panama City
David McArthur,
Utah Valley University
Fernando Pargas,
James Madison University
Tom McFarland,
Mount San Antonio College
Jack Partlow,
Northern Virginia Community College
Joe McKenna,
Howard Community College
Don A. Paxton,
Pasadena City College
Zack McNeil,
Metropolitan Community College
John Paxton,
Wayne State College
Jeanne McNett,
Assumption College
John Pepper,
The University of Kansas
Spencer Mehl,
Coastal Carolina Community College
David Levy,
United States Air Force Academy
Clifford R. Perry,
Florida International University
Mary Meredith,
University of Louisiana
Chi Lo Lim,
Northwest Missouri State University
Lori Merlak,
Kirkwood Community College
Sheila Petcavage,
Cuyahoga Community College–
Western Campus
Natasha Lindsey,
University of North Alabama
Douglas Micklich,
Illinois State University
Beverly Little,
Western Carolina University
Christine Miller,
Tennessee Tech University
Shaun Pichler,
Mihaylo College of Business,
California State University, Fullerton
Guy Lochiatto,
MassBay Community College
Val Miskin,
Washington State University
Anthony Plunkett,
Harrison College
Mary Lou Lockerby,
College of DuPage
Kelly Mollica,
University of Memphis
Tracy H. Porter,
Cleveland State University
Michael Dane Loflin,
York Technical College
Gregory Moore,
Middle Tennessee State University
Paula Potter,
Western Kentucky University
Jessica Lofton,
University of Mount Olive
Rob Moorman,
Elon University
Cynthia Preston,
University of Northwestern Ohio
Paul Londrigan,
Charles Stewart Mott Community
College
Jaideep Motwani,
Grand Valley State University
Ronald E. Purser,
San Francisco State University
Troy Mumford,
Colorado State University
Gregory R. Quinet,
Kennesaw State University
Robert Myers,
University of Louisville
George Redmond,
Franklin University
Christopher P. Neck,
Arizona State University
Deborah Reed,
Benedictine College
Patrick J. Nedry,
Monroe County Community College
Rosemarie Reynolds,
Embry Riddle Aeronautical
University
Chalmer E. Labig Jr.,
Oklahoma State University
Wendy Lam,
Hawaii Pacific University
Robert L. Laud,
William Paterson University
Rebecca Legleiter,
Tulsa Community College
David Leonard,
Chabot College
Chris Levan,
University of Tennessee–
Chattanooga
Tom Loughman,
Columbus State University
Ivan Lowe,
York Technical College
Gregory Luce,
Bucks County Community College
Margaret Lucero,
Texas A & M–Corpus Christi
Francine Newth,
Providence College
James Manicki,
Northwestern College
Christine I. Mark,
University of Southern Mississippi
Margie Nicholson,
Columbia College, Chicago
Marcia A. Marriott,
Monroe Community College
Thomas J. Norman,
California State University–Dominguez
Hills
Dr. David Matthews,
SUNY Adirondack
Joanne Orabone,
Community College of Rhode Island
xxviii
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Barbara Petzall,
Maryville University
H. Lynn Richards,
Johnson County Community College
Leah Ritchie,
Salem State College
Gary B. Roberts,
Kennesaw State University
Sean E. Rogers,
University of Rhode Island
Acknowledgments
10/12/18 7:59 PM
Katherine Rosenbusch,
George Mason University
Barbara Rosenthal,
Miami Dade Community College/
Wolfson Campus
Martin St. John,
Westmoreland County Community
College
Tom Voigt Jr.,
Judson University
Carolyn Waits,
Cincinnati State
Raymond Stoudt,
DeSales University
Bruce C. Walker,
University of Louisiana at Monroe
Gary Ross,
Cardinal Stritch University
Barb Stuart,
Daniels College of Business
Catherine Ruggieri,
St. John’s University–Staten Island
Robert Scott Taylor,
Moberly Area Community College
Tekle O. Wanorie,
Northwest Missouri State
University
Storm Russo,
Valencia Community College
Virginia Anne Taylor,
William Patterson University
Charles Warren,
Salem State College
Cindy Ruszkowski,
Illinois State University
Wynn Teasley,
University of West Florida
Kerry Webb,
Texas Woman’s University
William Salyer,
Illinois State University
Marguerite Teubner,
Nassau Community College
Brian D. Webster,
Ball State University
Diane R. Scott,
Wichita State University
Jerry Thomas,
Arapahoe Community College
Velvet Weems-Landingham,
Kent State University–Geauga
Alex J. Scrimpshire,
Xavier University
C. Justice Tillman,
Baruch College–City University of
New York
Allen Weimer,
University of Tampa
Marianne Sebok,
College of Southern Nevada
Thomas J. Shaughnessy,
Illinois Central College
Jody Tolan,
University of Southern California,
Marshall School of Business
Joanna Shaw,
Tarleton State University
Joseph Tomkiewicz,
East Carolina University
Randi Sims,
Nova Southeastern University
Robert Trumble,
Virginia Commonwealth University
Frederick J. Slack,
Indiana University of
Pennsylvania
Joy Turnheim Smith,
Elizabeth City State University
David A. Wernick,
Florida International University
James Whelan,
Manhattan College
John Whitelock,
Community College of Baltimore/
Catonsville Campus
Eric S. Williams,
University of Alabama– Tuscaloosa
Joette Wisnieski,
Indiana University of Pennsylvania
Erika E. Small,
Coastal Carolina University
Isaiah Ugboro,
North Carolina Agricultural & Technical
State University
Jim Smas,
Kent State University
Brandi Ulrich,
Anne Arundel Community College
Wendy V. Wysocki,
Monroe County Community College
Gerald F. Smith,
University of Northern Iowa
Anthony Uremovic,
Joliet Junior College
Mark Smith,
University of Southwest
Louisiana
Barry Van Hook,
Arizona State University
Carol Bormann Young,
Metropolitan State University,
Minnesota
Shane Spiller,
Western Kentucky University
Jeff Stauffer,
Ventura College
George E. Stevens,
Kent State University
Scot W. Vaver,
University of Wisconsin–Stout
Susan Verhulst,
Grand View University
Annie Viets,
Prince Mohammad Bin Fahd
University
Colette Wolfson,
Ivy Tech Community College
Ned D. Young,
Sinclair Community College
Jan T. Zantinga,
University of Georgia
Mary E. Zellmer-Bruhn,
University of Minnesota
Mark Zorn,
Butler County Community College
Finally, I would like to thank my wife, Joyce, for being understanding, patient, and encouraging throughout the process of writing this edition. Your love and support helped me endure
the trials of completing this text.
I hope you enjoy reading and applying the book. Best wishes for success in your career.
Angelo Kinicki
Acknowledgments
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contents
3. Human Skills—“Soft Skills,” the Ability to Interact
Well with People 20
Walkthrough Preface of 9e xv
PART 1
Introduction
The Most Valued Traits in Managers 21
1.6
CHALLENGE #1: Managing for Competitive
CHAPTER ONE
Advantage—Staying Ahead of Rivals 23
The Exceptional Manager: What You Do,
How You Do It 2
1.1
CHALLENGE #2: Managing for Information
Technology—Dealing with the “New Normal” 24
CHALLENGE #3: Managing for Diversity—The Future
Management: What It Is, What Its Benefits
Are 4
Won’t Resemble the Past 26
CHALLENGE #4: Managing for Globalization—The
The Rise of the Die Maker’s Daughter 4
Expanding Management Universe 26
Key to Career Growth: “Doing Things I’ve Never
Done Before” 4
CHALLENGE #5: Managing for Ethical Standards 27
CHALLENGE #6: Managing for Sustainability—The
The Art of Management Defined 5
Business of Green 28
Why Organizations Value Managers: The Multiplier
Effect 6
CHALLENGE #7: Managing for Happiness and
The Financial Rewards of Being an Exceptional
Manager 6
How Strong Is Your Motivation to Be a Manager? The
First Self-Assessment 29
What Are the Rewards of Studying and Practicing
Management? 7
1.2
Meaningfulness 28
1.7
Organizing: Discussed in Part 4 of This Book 9
Developing Career Readiness 35
Let Us Help 36
1.8
Leading: Discussed in Part 5 of This Book 10
Pyramid Power: Levels and Areas of
Management 11
Three Levels of Management 11
Areas of Management: Functional Managers versus
General Managers 13
Managers for Three Types of Organizations:
For-Profit, Nonprofit, Mutual-Benefit 14
Different Organizations, Different Management? 14
1.4
CHAPTER TWO
Management Theory: Essential
Background for the Successful
Manager 42
2.1
Roles Managers Must Play Successfully 15
Six Practical Reasons for Studying This
Chapter 44
Three Types of Managerial Roles: Interpersonal,
Informational, and Decisional 17
Two Overarching Perspectives about Management:
Historical and Contemporary 46
The Skills Exceptional Managers Need 19
1. Technical Skills—The Ability to Perform a Specific
Job 19
2. Conceptual Skills—The Ability to Think
Analytically 19
Evolving Viewpoints: How We Got to Today’s
Management Outlook 44
Creating Modern Management: The Handbook of
Peter Drucker 44
The Manager’s Roles: Mintzberg’s Useful
Findings 15
1.5
Career Corner: Managing Your Career
Readiness 37
Key Terms Used in This Chapter 38
Key Points 38
Understanding the Chapter: What Do I Know? 39
Management in Action 39
Legal/Ethical Challenge 41
Controlling: Discussed in Part 6 of This Book 10
The Traditional Management Pyramid: Levels and
Areas 11
Building Your Career Readiness 30
A Model of Career Readiness 30
What Managers Do: The Four Principal
Functions 9
Planning: Discussed in Part 3 of This Book 9
1.3
Seven Challenges to Being an Exceptional
Manager 22
2.2
Classical Viewpoint: Scientific and
Administrative Management 47
Scientific Management: Pioneered by Taylor and the
Gilbreths 47
xxx
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Administrative Management: Pioneered by Spaulding,
Fayol, and Weber 49
The Problem with the Classical Viewpoint:
Too Mechanistic 50
2.3
Behavioral Viewpoint: Behaviorism, Human
Relations, and Behavioral Science 51
Early Behaviorism: Pioneered by Munsterberg, Follett,
and Mayo 51
The Human Relations Movement: Pioneered by Maslow
and McGregor 52
3.1
The Millennials’ Search for Meaning 78
3.2
Quantitative Viewpoints: Management Science
and Operations Management 56
Internal Stakeholders 79
3.3
The General Environment 87
3.4
Operations Management: Being More Effective 57
Four Approaches to Resolving Ethical Dilemmas 95
Systems Viewpoint 58
White-Collar Crime, SarbOx, and Ethical Training 95
The Four Parts of a System 59
How Organizations Can Promote Ethics 97
3.5
Contingency Viewpoint 61
Is Social Responsibility Worthwhile? Opposing and
Supporting Viewpoints 100
Evidence-Based Management: Facing Hard Facts,
Rejecting Nonsense 62
One Type of Social Responsibility: Climate Change,
Sustainability, and Natural Capital 103
Quality-Management Viewpoint 63
Quality Control and Quality Assurance 63
Another Type of Social Responsibility: Undertaking
Philanthropy, “Not Dying Rich” 104
Total Quality Management: Creating an Organization
Dedicated to Continuous Improvement 63
Six Sigma and ISO 9000
2.8
The Learning Organization in an Era of
Accelerated Change 66
The Learning Organization: Handling Knowledge and
Modifying Behavior 66
Does Being Good Pay Off? 104
3.6
The Need for Trust 106
3.7
PART 2
The Environment of
Management
CHAPTER THREE
The Manager’s Changing Work Environment
and Ethical Responsibilities: Doing the Right
Thing 76
Career Corner: Managing Your Career
Readiness 108
Focus on the Greater Good and on Being More Ethical 108
Become an Ethical Consumer 109
Career Corner: Managing Your Career
Readiness 69
Key Terms Used in This Chapter 71
Key Points 71
Understanding the Chapter: What Do I Know? 72
Management in Action 73
Legal/Ethical Challenge 74
Corporate Governance 106
Ethics and Corporate Governance 106
How to Build a Learning Organization: Three Roles
Managers Play 67
2.9
The Social Responsibilities Required of You as a
Manager 100
Corporate Social Responsibility: The Top of the
Pyramid 100
Gary Hamel: Management Ideas Are Not Fixed, They’re
a Process 61
2.7
The Ethical Responsibilities Required of You as a
Manager 92
Defining Ethics and Values 93
The Systems Viewpoint 59
2.6
The Community of Stakeholders Outside the
Organization 82
The Task Environment 82
Management Science: Using Mathematics to Solve
Management Problems 56
2.5
The Community of Stakeholders Inside the
Organization 79
Internal and External Stakeholders 79
The Behavioral Science Approach 54
2.4
The Triple Bottom Line: People, Planet, and
Profit 78
Key Terms Used in This Chapter 110
Key Points 110
Understanding the Chapter: What Do I Know? 112
Management in Action 112
Legal/Ethical Challenge 114
CHAPTER FOUR
Global Management: Managing across
Borders 116
4.1
Globalization: The Collapse of Time and
Distance 118
Competition and Globalization: Who Will Be No. 1
Tomorrow? 118
The Rise of the “Global Village” and Electronic
Commerce 119
One Big World Market: The Global Economy 120
Contents
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Three Types of Planning for Three Levels of
Management: Strategic, Tactical,
and Operational 166
Cross-Border Business: The Rise of Both Megamergers
and Minifirms Worldwide 121
4.2
You and International Management 122
Why Learn about International Management? 123
4.3
5.3
The Successful International Manager: Geocentric,
Not Ethnocentric or Polycentric 124
Long-Term and Short-Term Goals 169
Why and How Companies Expand
Internationally 126
Types of Plans: Standing Plans and Single-Use
Plans 171
Why Companies Expand Internationally 126
The Operating Plan and Action Plan 169
5.4
How Companies Expand Internationally 127
4.4
The World of Free Trade: Regional Economic
Cooperation and Competition 131
Management by Objectives: The Four-Step Process for
Motivating Employees 173
Organizations Promoting International Trade 133
Cascading Goals: Making Lower-Level Goals Align with
Top Goals 176
Major Trading Blocs: NAFTA and the EU 134
Most Favored Nation Trading Status 136
Exchange Rates 136
The Value of Understanding Cultural
Differences 139
The Importance of Deadlines 177
5.5
The Planning/Control Cycle 178
5.6
Career Corner: Managing Your Career
Readiness 180
The Importance of National Culture 140
Becoming More Proactive 181
Cultural Dimensions: The Hofstede and GLOBE Project
Models 140
Keeping an Open Mind and Suspending
Judgment 181
Other Cultural Variations: Language, Interpersonal
Space, Communication, Time Orientation, Religion, and
Law and Political Stability 144
Key Terms Used in This Chapter 182
Key Points 182
Understanding the Chapter: What Do I Know? 183
Management in Action 184
Legal/Ethical Challenge 185
U.S. Managers on Foreign Assignments: Why Do They
Fail? 148
4.6
Career Corner: Managing Your Career
Readiness 149
1. Listen and Observe 149
2. Become Aware of the Context 150
3. Choose Something Basic 150
Key Terms Used in This Chapter 151
Key Points 151
Understanding the Chapter: What Do I Know? 153
Management in Action 153
Legal/Ethical Challenge 154
PART 3
CHAPTER SIX
Strategic Management: How Exceptional
Managers Realize a Grand Design 188
6.1
Levels of Strategy 191
Does Strategic Management Work for Small as Well as
Large Firms? 192
6.2
The Strategic-Management Process 193
The Five Steps of the Strategic-Management
Process 193
6.3
CHAPTER FIVE
Using VRIO to Assess Competitive Potential: Value,
Rarity, Imitability, and Organization 199
Forecasting: Predicting the Future 200
Planning and Strategy 158
Benchmarking: Comparing with the Best 202
Planning, Strategy, and Strategic Management 158
Why Planning and Strategic Management Are
Important 159
Assessing the Current Reality 196
SWOT Analysis 196
Planning: The Foundation of Successful
Management 156
5.2
Strategic Positioning and Levels of
Strategy 190
Strategic Positioning and Its Principles 190
Planning
5.1
Promoting Consistencies in Goals: SMART
Goals, Management by Objectives, and Goal
Cascading 172
SMART Goals 172
Barriers to International Trade 131
4.5
Goals and Plans 169
6.4.
Establishing Corporate-Level Strategy 203
Three Overall Types of Corporate Strategy 203
Fundamentals of Planning 162
The BCG Matrix 204
Mission, Vision, and Values Statements 163
Diversification Strategy 205
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6.5
6.6
Establishing Business-Level Strategy 206
Porter’s Five Competitive Forces 206
Stage 4: Implement and Evaluate the Solution
Chosen 243
Porter’s Four Competitive Strategies 207
What’s Wrong with the Rational Model? 244
Executing and Controlling Strategy 209
Nonrational Decision Making: Managers Find It Difficult
to Make Optimal Decisions 244
Executing the Strategy 209
Maintaining Strategic Control 209
7.2
The Dismal Record of Business Ethics 247
Execution: Getting Things Done 209
Road Map to Ethical Decision Making: A Decision
Tree 248
The Three Core Processes of Business: People,
Strategy, and Operations 210
How Execution Helps Implement and Control
Strategy 211
6.7
7.3
In Praise of Analytics 252
“Big Data”: What It Is, How It’s Used 254
7.4
1. The Directive Style: Action-Oriented Decision Makers
Who Focus on Facts 258
2. The Analytical Style: Careful Decision Makers Who
Like Lots of Information and Alternative Choices 258
LEARNING MODULE 1: Entrepreneurship 220
3. The Conceptual Style: Decision Makers Who
Rely on Intuition and Have a Long-Term
Perspective 258
LM1.1 Entrepreneurship: Its Foundations and
Importance 221
4. The Behavioral Style: The Most People-Oriented
Decision Makers 258
Entrepreneurship: It’s Not the Same as
Self-Employment 222
Entrepreneurship Matters across the Globe 226
Which Style Do You Have? 259
7.5
LM1.2 Starting a Business 229
Decision-Making Biases and the Use of Artificial
Intelligence 260
Nine Common Decision-Making Biases: Rules of Thumb,
or “Heuristics” 260
Businesses Start with an Idea 229
Writing the Business Plan 230
Choosing a Legal Structure 232
The Decision-Making Potential of Artificial
Intelligence 262
Obtaining Financing 233
Pros and Cons of Artificial Intelligence 263
Creating the “Right” Organizational Culture and
Design 234
7.6
Key Terms Used in This Learning Module 237
Key Points 237
Groupthink 266
Characteristics of Group Decision Making 267
Individual and Group Decision Making: How
Managers Make Things Happen 238
Two Kinds of Decision Making: Rational and
Nonrational 240
Group Decision Making: How to Work with
Others 265
Advantages and Disadvantages of Group Decision
Making 265
CHAPTER SEVEN
7.1
Four General Decision-Making Styles 257
Value Orientation and Tolerance for Ambiguity 257
Key Terms Used in This Chapter 215
Key Points 215
Understanding the Chapter: What Do I Know? 217
Management in Action 217
Legal/Ethical Challenge 219
Characteristics of Entrepreneurs 224
Evidence-Based Decision Making and
Analytics 250
Evidence-Based Decision Making 251
Career Corner: Managing Your Career
Readiness 213
Why Is Strategic Thinking Important to New
Graduates? 213
Making Ethical Decisions 247
Group Problem-Solving Techniques: Reaching for
Consensus 269
More Group Problem-Solving Techniques 269
Decision Making in the Real World 241
Career Corner: Managing Your Career
Readiness 272
Rational Decision Making: Managers Should Make
Logical and Optimal Decisions 242
Improving Your Critical Thinking and
Problem-Solving Skills 272
Stage 1: Identify the Problem or Opportunity—
Determining the Actual versus the Desirable 242
Reflect on Past Decisions 272
Stage 2: Think Up Alternative Solutions—Both the
Obvious and the Creative 242
Stage 3: Evaluate Alternatives and Select a
Solution—Ethics, Feasibility, and Effectiveness 242
7.7
Key Terms Used in This Chapter 274
Key Points 274
Understanding the Chapter: What Do I Know? 276
Management in Action 276
Legal/Ethical Challenge 278
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PART 4
8.7
Organizing
Three Factors to Be Considered in Designing an
Organization’s Structure 311
CHAPTER EIGHT
1. The Environment: Mechanistic versus Organic
Organizations—the Burns and Stalker Model 311
Organizational Culture, Structure, and
Design: Building Blocks of the
Organization 280
8.1
Aligning Strategy, Culture, and Structure 282
How an Organization’s Culture and Structure Are Used
to Implement Strategy 282
8.2
2. The Environment: Differentiation versus Integration—
the Lawrence and Lorsch Model 313
3. Linking Strategy, Culture, and Structure 313
8.8
Becoming More Adaptable 315
Key Terms Used in This Chapter 316
Key Points 316
Understanding the Chapter: What Do I Know? 318
Management in Action 318
Legal/Ethical Challenge 320
Four Types of Organizational Culture: Clan, Adhocracy,
Market, and Hierarchy 287
How Employees Learn Culture: Symbols, Stories,
Heroes, Rites and Rituals, and Organizational
Socialization 290
The Importance of Culture 291
CHAPTER NINE
What Does It Mean to “Fit”? Anticipating a Job
Interview 292
Human Resource Management: Getting the
Right People for Managerial Success 322
The Process of Culture Change 293
9.1
2. Slogans and Sayings 293
Planning the Human Resources Needed 326
3. Rites and Rituals 293
5. Leader Reactions to Crises 294
Recruitment and Selection: Putting the Right
People into the Right Jobs 329
6. Role Modeling, Training, and Coaching 294
Recruitment: How to Attract Qualified Applicants 329
7. Physical Design 294
Selection: How to Choose the Best Person for the
Job 333
4. Stories, Legends, and Myths 294
9.2
8. Rewards, Titles, Promotions, and Bonuses 295
9. Organizational Goals and Performance Criteria 295
9.3
10. Measurable and Controllable Activities 295
Incentives 339
12. Organizational Systems and Procedures 296
Benefits 339
Don’t Forget about Person–Organization Fit 297
Organizational Structure 298
9.4
Learning and Development: Helping People Perform
Better 341
The Organization Chart 298
Common Elements of Organizations: Four Proposed by
Edgar Schein 300
9.5
Performance Appraisals: Are They Worthwhile? 345
Two Kinds of Performance Appraisal: Objective and
Subjective 346
Basic Types of Organizational Structures 304
1. Traditional Designs: Simple, Functional, Divisional,
and Matrix Structures 304
2. The Horizontal Design: Eliminating Functional Barriers
to Solve Problems 307
3. Designs That Open Boundaries between Organizations:
Hollow, Modular, and Virtual Structures 309
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Performance Appraisal 344
Performance Management in Human Resources 344
Common Elements of Organizations: Three More That
Most Authorities Agree On 301
8.6
Orientation and Learning and Development 340
Orientation: Helping Newcomers Learn the Ropes 340
The Organization: Three Types 298
The Major Elements of an Organization 300
Managing an Effective Workforce: Compensation
and Benefits 339
Wages or Salaries 339
11. Organizational Structure 296
8.5
Strategic Human Resource Management 324
Human Resource Management: Managing an
Organization’s Most Important Resource 324
1. Formal Statements 293
8.4
Career Corner: Managing Your Career
Readiness 314
Understanding the Business and Where You “Fit” In 314
What Kind of Organizational Culture Will You Be
Operating In? 286
The Three Levels of Organizational Culture 286
8.3
Contingency Design: Factors in Creating
the Best Structure 311
Who Should Make Performance Appraisals? 347
Effective Performance Feedback 348
9.6
Managing Promotions, Transfers, Disciplining,
and Dismissals 350
Promotion: Moving Upward 350
Transfer: Moving Sideways 351
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Disciplining and Demotion: The Threat of Moving
Downward 351
Dismissal: Moving Out of the Organization 351
9.7
The Legal Requirements of Human Resource
Management 354
1. Labor Relations 354
Fear and Resistance 399
The Causes of Resistance to Change 399
Ten Reasons Employees Resist Change 400
10.6 Career Corner: Managing Your Career
Readiness 402
2. Compensation and Benefits 354
Applying Self-Affirmation Theory 402
3. Health and Safety 354
Practicing Self-Compassion 403
4. Equal Employment Opportunity 356
Workplace Discrimination, Affirmative Action, Sexual
Harassment, and Bullying 356
9.8
10.5 The Threat of Change: Managing Employee
Labor–Management Issues 361
How Workers Organize 361
Key Terms Used in This Chapter 404
Key Points 404
Understanding the Chapter: What Do I Know? 405
Management in Action 405
Legal/Ethical Challenge 407
How Unions and Management Negotiate a Contract 362
The Issues Unions and Management Negotiate
About 362
Settling Labor–Management Disputes 364
9.10 Career Corner: Managing Your Career
Readiness 366
Becoming a Better Receiver 366
Key Terms Used in This Chapter 368
Key Points 368
Understanding the Chapter: What Do I Know? 371
Management in Action 371
Legal/Ethical Challenge 373
CHAPTER TEN
Organizational Change and Innovation:
Lifelong Challenges for the Exceptional
Manager 374
10.1 The Nature of Change in Organizations 376
PART 5
Leading
CHAPTER ELEVEN
Managing Individual Differences and
Behavior: Supervising People as People 408
11.1 Personality and Individual Behavior 410
The Big Five Personality Dimensions 410
Core Self-Evaluations 411
Emotional Intelligence: Understanding Your Emotions
and the Emotions of Others 414
11.2 Values, Attitudes, and Behavior 416
Organizational Behavior: Trying to Explain and Predict
Workplace Behavior 416
Values: What Are Your Consistent Beliefs and Feelings
about All Things? 416
Fundamental Change: What Will You Be Called
On to Deal With? 376
Attitudes: What Are Your Consistent Beliefs and Feelings
about Specific Things? 416
Two Types of Change: Reactive and Proactive 378
Behavior: How Values and Attitudes Affect People’s
Actions and Judgments 419
The Forces for Change Outside and Inside the
Organization 380
10.2 Types and Models of Change 383
Three Kinds of Change: From Least Threatening
to Most Threatening 383
Lewin’s Change Model: Unfreezing, Changing, and
Refreezing 384
A Systems Approach to Change 385
10.3 Organizational Development: What It Is,
What It Can Do 389
What Can OD Be Used For? 389
How OD Works 390
The Effectiveness of OD 391
10.4 Organizational Innovation 392
Approaches to Innovation 392
An Innovation System: The Supporting Forces for
Innovation 394
11.3 Perception and Individual Behavior 420
The Four Steps in the Perceptual Process 420
Five Distortions in Perception 420
The Self-Fulfilling Prophecy, or Pygmalion Effect 424
11.4 Work-Related Attitudes and Behaviors Managers
Need to Deal With 426
1. Employee Engagement: How Connected Are You to
Your Work? 426
2. Job Satisfaction: How Much Do You Like or Dislike
Your Job? 428
3. Organizational Commitment: How Much Do You
Identify with Your Organization? 428
Important Workplace Behaviors 429
11.5 The New Diversified Workforce 431
How to Think about Diversity: Which Differences Are
Important? 431
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Trends in Workforce Diversity 433
Barriers to Diversity 437
11.6 Understanding Stress and Individual
Behavior 441
The Toll of Workplace Stress 441
How Does Stress Work? 442
The Sources of Job-Related Stress 442
Reducing Stressors in the Organization 445
11.7 Career Corner: Managing Your Career
Readiness 448
Fostering a Positive Approach 448
Self-Managing Your Emotions 449
Key Terms Used in This Chapter 450
Key Points 450
Understanding the Chapter: What Do I Know? 452
Management in Action 452
Legal/Ethical Challenge 454
CHAPTER TWELVE
Motivating Employees: Achieving Superior
Performance in the Workplace 456
12.1 Motivating for Performance 458
Motivation: What It Is, Why It’s Important 458
The Four Major Perspectives on Motivation:
An Overview 460
12.2 Content Perspectives on Employee
12.6 Using Compensation, Nonmonetary Incentives,
and Other Rewards to Motivate: In Search of the
Positive Work Environment 487
Is Money the Best Motivator? 487
Motivation and Compensation 487
Nonmonetary Ways of Motivating Employees 489
12.7 Career Corner: Managing Your Career
Readiness 494
1. Identify Your “Wildly Important” Long-Term Goal 494
2. Break Your Wildly Important Goal into
Short-Term Goals 495
3. Create a “To-Do” List for Accomplishing Your
Short-Term Goals 495
4. Prioritize the Tasks 495
5. Create a Time Schedule 495
6. Work the Plan, Reward Yourself, and
Adjust as Needed 495
Key Terms Used in This Chapter 496
Key Points 496
Understanding the Chapter: What Do I Know? 498
Management in Action 498
Legal/Ethical Challenge 500
CHAPTER THIRTEEN
Groups and Teams: Increasing Cooperation,
Reducing Conflict 502
13.1 Groups versus Teams 504
Motivation 461
Groups and Teams: How Do They Differ? 505
Maslow’s Hierarchy of Needs Theory: Five Levels 461
Formal versus Informal Groups 506
McClelland’s Acquired Needs Theory: Achievement,
Affiliation, and Power 463
Types of Teams 507
Deci and Ryan’s Self-Determination Theory:
Competence, Autonomy, and Relatedness 464
Herzberg’s Two-Factor Theory: From Dissatisfying
Factors to Satisfying Factors 466
12.3 Process Perspectives on Employee
Motivation 469
Equity/Justice Theory: How Fairly Do You Think You’re
Being Treated in Relation to Others? 469
Expectancy Theory: How Much Do You Want and How
Likely Are You to Get It? 473
Goal-Setting Theory: Objectives Should Be Specific and
Challenging but Achievable 475
12.4 Job Design Perspectives on Motivation 478
Fitting People to Jobs 478
Fitting Jobs to People 478
The Job Characteristics Model: Five Job Attributes for
Better Work Outcomes 479
12.5 Reinforcement Perspectives on Motivation 483
The Four Types of Reinforcement: Positive, Negative,
Extinction, and Punishment 483
Using Reinforcement to Motivate Employees 484
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13.2 Stages of Group and Team Development 510
Tuckman’s Five-Stage Model 510
Punctuated Equilibrium 512
13.3 Building Effective Teams 513
1. Collaboration—the Foundation of Teamwork 513
2. Trust: “We Need to Have Reciprocal Faith in Each
Other” 514
3. Performance Goals and Feedback 515
4. Motivation through Mutual Accountability and
Interdependence 516
5. Team Composition 516
6. Roles: How Team Members Are Expected to
Behave 517
7. Norms: Unwritten Rules for Team Members 518
8. Effective Team Processes 520
Putting It All Together 520
13.4 Managing Conflict 521
The Nature of Conflict: Disagreement Is Normal 521
Can Too Little or Too Much Conflict Affect
Performance? 522
Three Kinds of Conflict: Personality, Intergroup, and
Cross-Cultural 523
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How to Stimulate Constructive Conflict 524
Five Basic Behaviors to Help You Better Handle
Conflict 526
Dealing with Disagreements: Five Conflict-Handling
Styles 526
13.5 Career Corner: Managing Your Career
Readiness 528
Become a More Effective Team Member 528
Become a More Effective Collaborator 529
Key Terms Used in This Chapter 530
Key Points 530
Understanding the Chapter: What Do I Know? 531
Management in Action 531
Legal/Ethical Challenge 533
CHAPTER FOURTEEN
Power, Influence, and Leadership: From
Becoming a Manager to Becoming a
Leader 534
14.1 The Nature of Leadership: The Role of Power
and Influence 536
What Is the Difference between Leading and
Managing? 536
Managerial Leadership: Can You Be Both a Manager and
a Leader? 537
Coping with Complexity versus Coping with Change:
The Thoughts of John Kotter 538
Five Sources of Power 538
Common Influence Tactics 540
Match Tactics to Influence Outcomes 542
An Integrated Model of Leadership 542
14.2 Trait Approaches: Do Leaders Have Distinctive
Traits and Personal Characteristics? 544
Positive Task-Oriented Traits and Positive/Negative
Interpersonal Attributes 544
What Do We Know about Gender and Leadership? 545
Are Knowledge and Skills Important? 548
So What Do We Know about Leadership Traits? 548
14.3 Behavioral Approaches: Do Leaders Show
Distinctive Patterns of Behavior? 550
Task-Oriented Leader Behaviors: Initiating-Structure
Leadership and Transactional Leadership 550
Relationship-Oriented Leader Behavior: Consideration,
Empowerment, Ethical Leadership, and Servant
Leadership 551
2. The Path–Goal Leadership Model: House’s
Approach 559
So What Do We Know about the Situational
Approaches? 561
14.5 The Uses of Transformational Leadership 563
Transformational Leaders 563
The Best Leaders Are Both Transactional and
Transformational 563
Four Key Behaviors of Transformational
Leaders 564
So What Do We Know about Transformational
Leadership? 567
14.6 Three Additional Perspectives 568
Leader–Member Exchange Leadership: Having
Different Relationships with Different
Subordinates 568
The Power of Humility 569
Followers: What Do They Want, How Can They
Help? 570
14.7 Career Corner: Managing Your Career
Readiness 572
Becoming More Self-Aware 572
Key Terms Used in This Chapter 574
Key Points 574
Understanding the Chapter: What Do I Know? 576
Management in Action 576
Legal/Ethical Challenge 578
CHAPTER FIFTEEN
Interpersonal and Organizational
Communication: Mastering the Exchange of
Information 580
15.1 The Communication Process: What It Is, How It
Works 582
Communication Defined: The Transfer of Information
and Understanding 582
How the Communication Process Works 583
Selecting the Right Medium for Effective
Communication 586
15.2 How Managers Fit into the Communication
Process 588
Formal Communication Channels: Up, Down, Sideways,
and Outward 588
Informal Communication Channels 589
15.3 Barriers to Communication 592
Passive Leadership: The Lack of Leadership Skills 555
1. Physical Barriers: Sound, Time, Space 592
So What Do We Know about the Behavioral
Approaches? 556
2. Personal Barriers: Individual Attributes That Hinder
Communication 593
14.4 Situational Approaches: Does Leadership Vary
with the Situation? 557
1. The Contingency Leadership Model: Fiedler’s
Approach 557
3. Cross-Cultural Barriers 595
4. Nonverbal Communication: How Unwritten and
Unspoken Messages May Mislead 596
5. Gender Differences 598
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15.4 Social Media and Management 600
16.4 Some Financial Tools for Control 650
Social Media Has Changed the Fabric of Our Lives 600
Budgets: Formal Financial Projections 650
Social Media and Managerial and Organizational
Effectiveness 601
Financial Statements: Summarizing the Organization’s
Financial Status 651
Downsides of Social Media 608
Managerial Implications of Texting 611
Managerial Considerations in Creating Social Media
Policies 612
15.5 Improving Communication Effectiveness 615
Audits: External versus Internal 652
16.5 Total Quality Management 654
Deming Management: The Contributions of W. Edwards
Deming to Improved Quality 655
Nondefensive Communication 615
Core TQM Principles: Deliver Customer Value and Strive
for Continuous Improvement 655
Using Empathy 617
Applying TQM to Services 659
Being an Effective Listener 618
Some TQM Tools, Techniques, and
Standards 661
Being an Effective Writer 619
Being an Effective Speaker 620
15.6 Career Corner: Managing Your Career
Readiness 623
Improve Your Face-to-Face Networking Skills 623
Key Terms Used in This Chapter 625
Key Points 625
Understanding the Chapter: What Do I Know? 626
Management in Action 627
Legal/Ethical Challenge 628
Takeaways from TQM Research 663
16.6 Managing Control Effectively 664
The Keys to Successful Control Systems 664
Barriers to Control Success 665
16.7 Managing for Productivity 667
What Is Productivity? 667
Why Is Increasing Productivity Important? 668
What Processes Can I Use to Increase Productivity? 669
Managing Individual Productivity 670
16.8 Career Corner: Managing Your Career
Readiness 671
PART 6
1. Make Every Day Count 672
Controlling
2. Stay Informed and Network 672
CHAPTER SIXTEEN
4. Roll with Change and Disruption 673
3. Promote Yourself 672
Control Systems and Quality Management:
Techniques for Enhancing Organizational
Effectiveness 630
16.1 Control: When Managers Monitor
Performance 632
Why Is Control Needed? 632
Steps in the Control Process 635
Types of Controls 639
16.2 Levels and Areas of Control 641
Levels of Control: Strategic, Tactical, and
Operational 641
Six Areas of Control 641
Controlling the Supply Chain 643
Control in Service Firms 644
16.3 The Balanced Scorecard and Strategy
Maps 645
The Balanced Scorecard: A Dashboard-like View of the
Organization 645
Strategy Mapping: Visual Representation of the Path to
Organizational Effectiveness 648
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5. Small Things Matter during Interviews 673
Epilogue: The Keys to Your Managerial Success 674
Key Terms Used in This Chapter 676
Key Points 676
Understanding the Chapter: What Do I Know? 678
Management in Action 678
Legal/Ethical Challenge 680
LEARNING MODULE 2: The Project Planner’s
Toolkit: Flowcharts, Gantt Charts, and
Break-Even Analysis 681
Tool #1: Flowcharts—for Showing Event Sequences and
Alternate Decision Scenarios 681
Tool #2: Gantt Charts—Visual Time Schedules for Work
Tasks 683
Tool #3: Break-Even Analysis—How Many Items Must
You Sell to Turn a Profit? 684
CHAPTER NOTES CN-1
NAME INDEX IND-1
ORGANIZATION INDEX IND-5
GLOSSARY/SUBJECT INDEX IND-11
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management
NINTH EDITION
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5
PART 3
•
PLANNING
Planning
The Foundation of Successful Management
©Olivier Renck/Aurora/Getty Images
After reading this chapter, you should be able to:
LO 5-1
Discuss the role of strategic management.
LO 5-2
Compare mission, vision, and value
statements.
LO 5-3
Discuss the types and purposes of goals and
plans.
LO 5-4
Describe SMART goals and their
implementation.
LO 5-5
Outline the planning/control cycle.
LO 5-6
Describe how to develop the career readiness
competency of proactive learning orientation.
FORECAST
What’s Ahead in This Chapter
We describe planning and its link to strategy. We define planning, strategy,
and strategic management and state why they are important. We deal with the
fundamentals of planning, including the mission, vision, and value statements,
and the three types of planning—strategic, tactical, and operational. We consider goals, operating plans, and action plans; SMART goals, management by
objectives, and cascading goals; and finally the planning/control cycle. We
conclude with a Career Corner that focuses on how you can develop the career readiness competency of proactive learning orientation.
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Making an Effective Plan for Starting Your Career
The thought of starting a career (or switching to a new
one) can be either intimidating or exciting. What’s the
difference? Having goals and a plan.
Setting Goals and Making a Plan
Here are some steps in the career-management process
for you to consider as you set about building your career.1
1. Identify your options. Use the career readiness
skill of self-awareness to write down areas and ideas that
interest and are important to you and the functional, crosscultural, computational, interpersonal, and other skills you
can offer an employer. Then make a written list of the
opportunities available to you through your networking,
earlier work and volunteer experience, and other
resources (don’t forget the alumni and placement offices
at your school). Now match up the two lists to discover
where you should focus your career-building efforts.
2. Explore conditions in your target field. The
career readiness skill of understanding the business will
guide you to identify important factors like the demand for
new hires in your chosen field or fields, the competencies
expected of incoming employees, the likely salary range
and opportunities for advancement, and any geographic
limitations or requirements in the industry to be aware of. If
your field or industry is concentrated in one or two parts of
the country, for instance, be ready to move.
3. Create your action plan. Using what you learned
from steps 1 and 2, write a list of actions you can take to
achieve your goal of breaking into a new career. You are
more likely to achieve your goals if they are “SMART”—
specific, measurable against clear criteria to show
progress, attainable with a chance of 50% or higher,
relevant to you, and time bound with target dates for
completion. We discuss the process of writing SMART
goals in Section 5.4. Try to keep your steps or goals to a
manageable number; somewhere between three and five
is recommended. Prioritize and schedule them to create
your plan, and if it helps you to give each one a name, by
all means do so.
4. Track your progress. You’ll see as you study this
chapter that monitoring or controlling progress toward
goals is an inherent part of the planning process. Each
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time you get a result from one of your efforts, whether it’s
positive or negative, that result constitutes feedback on
how well you’ve selected your goals and how effective
your plan is. If one step doesn’t work out as planned, don’t
give up. Rely on your positive attitude and ability to adapt
(more career readiness skills) and realize you have other
opportunities to succeed. Try broadening your search, and
begin again.
Staying Resilient during the Process
Here are a few ideas about what else you can do to keep
your hopes—and your finances—afloat during the careerbuilding process.
1. Know that it takes time to find a job, especially
one that’s a good fit for both you and the company
that hires you. College graduates spend about six
months, on average, landing their first job after graduation.2
If you are already working, even part-time, stay in the job
while you pursue a new one. It’s always easier to find a job
if you have one. If you are not working, consider taking a
part-time or short-term job to generate some income.
since you’ll want to avoid running up credit card debt.
2. Create a budget to be sure your income will
cover your day-to-day expenses. This is a lifelong
habit that will serve you well.
3. Avoid making any major financial commitments
until you’ve actually landed your target job. You
won’t know how much you can afford to pay for a car until
you know your salary, for instance, and you may not want
to be encumbered by a new lease if your dream job
requires you to relocate. As long as you have an
appropriate interview outfit, even splurging on a
professional wardrobe can wait until you know the dress
code at your new employer.
For Discussion What fields or industries are interesting
or appealing to you as places to work? What news and
information about these areas can you start tracking now,
and how will you will do that? Is there anyone in your
network who can help you increase your understanding of
the way this industry works? If not, how could you find
someone?
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PART 3
Planning
5.1 Planning and Strategy?
THE BIG PICTURE
The first of four functions in the management process is planning, which involves setting goals and deciding
how to achieve them and which is linked to strategy. We define planning, strategy, and strategic management. We then describe three reasons strategic management and strategic planning are important.
LO 5-1
Discuss the role of
strategic management.
The management process, as you’ll recall (from Chapter 1), involves the four management
functions of planning, organizing, leading, and controlling, which form four of the part divisions of this book. In this and the next two chapters, we discuss planning and strategy.
Planning, Strategy, and Strategic Management
“Move fast and break things.”
Is that a plan or strategy? No, it’s a slogan. In fact, it used to be Facebook’s mantra
to its software developers, suggesting that “moving quickly is so important that we were
even willing to tolerate a few bugs in order to do it,” as Facebook CEO Mark Zuckerberg
explained.3 (Then, he says, the company realized “that it wasn’t helping us to move
faster because we had to slow down to fix these bugs.”)
Planning, which we discuss in this chapter, is used in conjunction with strategy and
strategic management, as we describe in Chapter 6. Let’s consider some definitions.
Planning: Coping with Uncertainty As we’ve said (Chapter 1), planning is defined
as setting goals and deciding how to achieve them. Another definition: planning is coping
with uncertainty by formulating future courses of action to achieve specified results.4 A plan
is a document that outlines how goals are going to be met. When you make a plan, you
make a blueprint for action that describes what you need to do to realize your goals.
Example: One important type of plan is a business plan, a document that outlines a
proposed firm’s goals, the strategy for achieving them, and the standards for measuring success. Here you would describe the basic idea behind your business—the business model,
which outlines the need the firm will fill, the operations of the business, its components and
functions, as well as the expected revenues and expenses. It also describes the industry
you’re entering, how your product will be different, how you’ll market to customers, how
you’re qualified to run the business, and how you will finance your business.
EXAMPLE
Why Write a Business Plan?
More than 5 in 10 Millennials say that if they had the resources
they need, they’d start their own business in the next year.
Most are attracted to the idea of being their own boss and
making a lot of money by opening a business of their own if
they could.5 But planning and management control are critical
to the success of small businesses as only 33 percent of them
survive 10 years or more according to the Bureau of Labor
Statistics.6
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It was by planning, not by accident, that popular singer
Rihanna recently launched a cosmetics business that got off
to a spectacular start and was immediately named one of
the “best inventions of 2017” by Time magazine. Her company, Fenty Beauty (a brand of the luxury label LVMH),
boasts a jaw-dropping 40 different shades of foundation in
order to cater to women of every color and every skin type.
In its first month in business alone, Fenty far outsold a rival
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celebrity line, Kylie Cosmetics, which has earned hundreds
of millions of dollars in its first two years. In its second
month, Fenty sales were already up 34% and showing no
signs of slowing.
Rihanna experimented with beauty products for years
before finally deciding the void in the market—for products
designed for hard-to-match skin tones—was hers to fill.
Among the many business factors for which she had to plan in
starting her company were the target market, women who are
underserved by existing beauty lines but who spend generously on makeup (averaging almost $500 a year); her promotional plan, which included outreach to her 60 million
Instagram followers; and her financial plan, which relies on the
backing of LVMH. To her knowledge of existing makeup lines,
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Rihanna added close scrutiny of her chosen competitors, Kylie
and KKW Beauty (Kim Kardashian West’s brand). And she
explored her distribution options, choosing online sales and
in-store distribution by Sephora. As Time reported, Fenty has
become the brand to beat, as even established companies like
L’Oreal begin launching marketing campaigns aimed at its
long-neglected market.7
YOUR CALL
Got an idea for a business? Think about your pre-launch planning process. What questions about your product or service,
your target market, your promotional plans, and your distribution method would you need to answer before you made
the leap?
Strategy: Setting Long-Term Direction A strategy, or strategic plan, sets the longterm goals and direction for an organization. It represents an “educated guess” about
what long-term goals or direction to pursue for the survival or prosperity of the organization. We hear the word expressed in terms like “Apple’s ultimate strategy . . .” or
“Visa’s overseas strategy . . .” or financial strategy, marketing strategy, and human
resource strategy.
An example of a strategy is “Grow the business organically,” which means “Increase
revenue from existing and new customers rather than from acquiring other companies.”
However, strategy is not something that can be decided on just once. It generally is
reconsidered every year because of ever-changing business conditions.
Strategic Management: Involving All Managers in Strategy
In the late 1940s,
most large U.S. companies were organized around a single idea or product line. By the
1970s, Fortune 500 companies were operating in more than one industry and had
expanded overseas. It became apparent that to stay focused and efficient, companies
had to begin taking a strategic-management approach.
Strategic management is a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals. This
definition doesn’t mean that managers at the top dictate ideas to be followed by people
lower down. Indeed, precisely because middle managers in particular are the ones who
will be asked to understand and implement the strategies, they should also help to formulate them.
As we will see, strategic management is a process that involves managers from all
parts of the organization—top managers, middle managers, and first-line managers—in
the formulation, implementation, and execution of strategies and strategic goals to
advance the purposes of the organization. Thus, planning covers not only strategic planning (done by top managers), but also tactical planning (done by middle managers) and
operational planning (done by first-line managers).
Planning and strategic management derive from an organization’s mission and vision
about itself, as we describe in the next section. (See Figure 5.1.)
Why Planning and Strategic Management
Are Important
An organization should adopt planning and strategic management for three reasons:
They can (1) provide direction and momentum, (2) encourage new ideas, and above all
(3) develop a sustainable competitive advantage.8 Let’s consider these three matters.
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FIGURE 5.1
Planning and strategic management
The details of planning and strategic management are explained in Chapters 5 and 6.
1. Establish
the mission
and vision
and values
2. Assess
the current
reality
3. Formulate
the grand strategy
& strategic,
tactical, &
operational plans
4. Implement
the strategy
5. Maintain
strategic
control
1. Providing Direction and Momentum Some executives are unable even to articulate what their strategy is.9 Others are so preoccupied with day-to-day pressures that
their organizations can lose momentum. But planning and strategic management can
help people focus on the most critical problems, choices, and opportunities.
If a broad group of employees is involved in the process, that can foster teamwork,
promote learning, and build commitment across the organization. Indeed, as we
describe in Chapter 8, strategy can determine the very structure of the organization—for
example, a top-down hierarchy with lots of management levels, as might be appropriate
for an electricity-and-gas power utility, versus a flat organization with few management
levels and flexible roles, as might suit a fast-moving social media start-up.
Unless a plan is in place, managers may well focus on just whatever is in front of
them, putting out fires—until they get an unpleasant jolt when a competitor moves out
in front because it has been able to take a long-range view of things and act more
quickly. In recent times, this surprise has been happening over and over as companies
have been confronted by some digital or Internet trend that emerged as a threat—as
Amazon.com was to Borders bookstores; as Uber has been to taxi cabs; as Google
News, blogs, and citizen media were to newspapers.
Of course, a poor plan can send an organization in the wrong direction. Bad planning usually results from faulty assumptions about the future, poor assessment of an
New Barbies. Mattel, maker of the famous Barbie doll,
whose sales have been cut by rival brands, is adding tall,
petite, and curvy dolls to its product line, trying to better
connect with young girls. Parents and interested
grassroots organizations have long been campaigning to
make children’s toys less stereotypical, but social media
have amplified their voices and forced companies to listen.
Mattel and other companies are also bringing out
inexpensive (under $400) 3-D printers that allow children
to create their own plastic toys, including doll-like ones
(monsters). Do you think Mattel should plan for the gradual
elimination of Barbie? ©Mattel/Splash News/Newscom
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organization’s capabilities, ineffective group dynamics, and failure to use management
control as a feedback mechanism.10 And it needs to be said that while a detailed plan
may be comforting, it’s not necessarily a strategy.11
2. Encouraging New Ideas Some people object that planning can foster rigidity,
that it creates blinders that block out peripheral vision and reduces creative thinking
and action. “Setting oneself on a predetermined course in unknown waters,” says one
critic, “is the perfect way to sail straight into an iceberg.”12
Actually, far from being a straitjacket for new ideas, strategic planning can help
encourage them by stressing the importance of innovation in achieving long-range success. Management scholar Gary Hamel says that companies such as Apple have been
successful because they have been able to unleash the spirit of “strategy innovation.”
Strategy innovation, he says, is the ability to reinvent the basis of competition within
existing industries—“bold new business models that put incumbents on the
defensive.”13
Some successful innovators are companies creating new wealth in the food and
restaurant industries, where Starbucks Coffee, Trader Joe’s, ConAgra, and Walmart,
for example, developed entirely new grocery product categories and retailing concepts. Starbucks, when entering the Chinese market, decided not to threaten China’s
tea-drinking culture and, instead, introduced drinks with green tea along with a chic
restaurant interior that made young Chinese feel “cool and trendy.”14 GrubHub
Seamless, an online takeout and delivery company, serves customers armed with cell
phones and delivery apps, delivering pizzas and other foods anywhere they want—at
the gym, in the park, on the playground.15 Vending machines are now serving everything from salads to smoothies to caviar, and supermarkets are experimenting with
personalized pricing, using complex shopping data to ascertain the unique needs of
individual customers.16
3. Developing a Sustainable Competitive Advantage Strategic management
can provide a sustainable competitive advantage, which, you’ll recall (from Chapter 1), is
the ability of an organization to produce goods or services more effectively than its
competitors do, thereby outperforming them. We discuss the manner in which companies create competitive advantage more thoroughly in Chapter 6. You will learn that
companies must have products or services that are valuable, rare, and non-imitable, and
an organization poised to exploit its strengths. In today’s global marketplace, competitive advantage can vary across countries. Uber is a good example.
Uber definitely had, and still has, competitive advantage when it comes to ride sharing in the U.S. It’s a different story when it comes to Africa. A start-up called Taxify
created its own competitive advantage by being the first company to offer motorbikehailing. Motorbikes, which are called boda bodas, were a hit because they were more
nimble when traveling through congested streets and communities. Taxify’s success is
clearly linked to its ability to localize it product offerings more quickly than larger firms
like Uber. It also gained competitive advantage by paying drivers with mobile money, “a
technology popular in Uganda and other emerging economies because it allows people
to receive and immediately store funds using a mobile phone.”17 ●
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5.2 Fundamentals of Planning
THE BIG PICTURE
Planning consists of translating an organization’s mission and vision into objectives. The organization’s
purpose is expressed as a mission statement, and what it becomes is expressed as a vision statement;
both should represent the organization’s values, expressed in a values statement. From these are derived
strategic planning, then tactical planning, then operational planning.
LO 5-2
Compare mission, vision,
and value statements.
FIGURE 5.2
Making plans
An organization’s reason for
being is expressed in a mission
statement. What the
organization wishes to become
is expressed in a vision
statement. The values the
organization wishes to
emphasize are expressed in a
values statement. From these
are derived strategic planning,
then tactical planning, and
finally operational planning. The
purpose of each kind of
planning is to specify goals and
action plans that ultimately
pave the way toward achieving
an organization’s vision.
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Are you hopeful? That’s a good thing. Students who have more hope reportedly have
higher grades and are more apt to finish college.
“Hope is the belief that the future will be better than the present,” says columnist
Elizabeth Bernstein, “and that you have some power to make it so.” People who are
hopeful “don’t just have a goal or a wish, they have a strategy to achieve it and the motivation to implement their plan.”18
First, however, you must determine your “goal or wish”—that is, your purpose. An
organization must determine its purpose, too—what’s known as its mission. And managers must have an idea of where they want the organization to go—the vision. Both mission and vision should express the organization’s values. The approach to planning can
be summarized in the diagram below, which shows how an organization’s mission
becomes translated into action plans. (See Figure 5.2.)
Mission
statement:
“What is our
reason for
being?”
Vision
statement:
“What do
we want to
become?”
Strategic
planning:
Done by top
managers for
the next
1–5 years
Tactical
planning:
Done by
middle
managers
for the next
6–24 months
Values
statement:
“What values do
we want to
emphasize?”
Operational
planning:
Done by firstline managers
for the next
1–52 weeks
Goals
Goals
Goals
Action plans
Action plans
Action plans
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Mission, Vision, and Values Statements
The planning process begins with three attributes: a mission statement (which answers
the question “What is our reason for being?”), a vision statement (which answers the
question “What do we want to become?”), and a values statement (which answers the
question “What values do we want to emphasize?”). (See Table 5.1.)
TABLE 5.1
Mission, Vision, and Values Statements
MISSION STATEMENTS: DOES YOUR COMPANY’S MISSION STATEMENT ANSWER
THESE QUESTIONS?
1.
2.
3.
4.
5.
6.
7.
8.
9.
Who are our customers?
What are our major products or services?
In what geographical areas do we compete?
What is our basic technology?
What is our commitment to economic objectives?
What are our basic beliefs, values, aspirations, and philosophical priorities?
What are our major strengths and competitive advantages?
What are our public responsibilities, and what image do we wish to project?
What is our attitude toward our employees?
VISION STATEMENTS: DOES YOUR COMPANY’S VISION STATEMENT ANSWER
“YES” TO THESE QUESTIONS?
1.
2.
3.
4.
5.
6.
Is it appropriate for the organization and for the times?
Does it set standards of excellence and reflect high ideals?
Does it clarify purpose and direction?
Does it inspire enthusiasm and encourage commitment?
Is it well articulated and easily understood?
Does it reflect the uniqueness of the organization, its distinctive competence, what it stands for,
what it’s able to achieve?
7. Is it ambitious?
VALUES STATEMENTS: DOES YOUR COMPANY’S VALUES STATEMENT ANSWER
“YES” TO THESE QUESTIONS?
1. Does it express the company’s distinctiveness, its view of the world?
2. Is it intended to guide all the organization’s actions, including how you treat employees,
customers, etc.?
3. Is it tough, serving as the foundation on which difficult company decisions can be made?
4. Will it be unchanging, as valid 100 years from now as it is today?
5. Does it reflect the beliefs of those who truly care about the organization—the founders, CEO, and
top executives—rather than represent a consensus of all employees?
6. Are the values expressed in the statement limited (five or so) and easy to remember, so that
employees will have them top-of-mind when making decisions?
7. Would you want the organization to continue to hold these values, even if at some point they
become a competitive disadvantage?
Sources: B. Nanus, Visionary Leadership: Creating a Compelling Sense of Direction for Your Organization (San
Francisco: Jossey-Bass, 1992), pp. 28–29; “How to Write a Vision Statement,” Cleverism, March 2, 2017, https://
www.cleverism.com/write-vision-statement; P. M. Lencioni, “Make Your Values Mean Something,” Harvard Business
Review, July 2002, pp. 113–117; and A Loehr, “6 Steps to Defining Your Organizational Values,” Rework, March 7,
2016, https://www.cornerstoneondemand.com/rework/6-steps-defining-your-organizational-values.
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The Mission Statement—“What Is Our Reason for Being?”
An organization’s mission is its purpose or reason for being.
Determining the mission is the responsibility of top management and the board of directors. It is up to them to formulate
a mission statement, which expresses the purpose of the
organization.
“Only a clear definition of the mission and purpose of the
organization makes possible clear and realistic . . . objectives,”
said Peter Drucker.19 Whether the organization is for-profit or
nonprofit, the mission statement identifies the goods or services the organization provides and will provide. Sometimes
it also gives the reasons for providing them (to make a profit
or to achieve humanitarian goals, for example).
The Vision Statement—“What Do We Want to Become?”
A vision is a long-term goal describing “what” an organization
wants to become. It is a clear sense of the future and the actions
needed to get there. “[A] vision should describe what’s hap-
pening to the world you compete in and what you want to do
about it,” says one Fortune article. “It should guide
decisions.”20
After formulating a mission statement, top managers
need to develop a vision statement, which expresses what
the organization should become, where it wants to go
strategically.
EXAMPLE
Mission, Vision, and Values at Coca-Cola
With 500 brands, 21 of which are worth more than $1 billion
dollars each, Coca-Cola is the world’s largest beverage company. Consumers in nearly every country in the world consume a Coca-Cola–branded beverage every day, for a total
of almost 2 billion servings. Headquartered in Atlanta, the
company is more than 130 years old. It employs about
700,000 people worldwide and has received a 100% rating
on the Human Rights Campaign’s corporate equality index
for 11 years in a row. Some of its best-known brands are
Coke, Coke Zero, Powerade, Schweppes, Dasani, Minute
Maid, Fanta, Sprite, Vitamin Water, and Smart Water. Many of
its beverages are available in low-calorie or no-calorie
­versions.21
The company’s website lists its mission, vision, and values,
which comprise its “Roadmap for winning,” as follows.
Our Mission22
Our Roadmap starts with our mission, which is enduring. It
declares our purpose as a company and serves as the standard
against which we weigh our actions and decisions.
• To refresh the world . . .
• To inspire moments of optimism and happiness . . .
• To create value and make a difference.
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©heromen30/Shutterstock
Our Vision
Our vision serves as the framework for our Roadmap and
guides every aspect of our business by describing what we
need to accomplish in order to continue achieving sustainable,
quality growth.
• People: Be a great place to work where people are
inspired to be the best they can be.
• Portfolio: Bring to the world a portfolio of quality beverage
brands that anticipate and satisfy people’s desires and
needs.
• Partners: Nurture a winning network of customers and
suppliers, together we create mutual, enduring value.
• Planet: Be a responsible citizen that makes a difference by
helping build and support sustainable communities.
• Profit: Maximize long-term return to shareowners while
being mindful of our overall responsibilities.
• Productivity: Be a highly effective, lean and fast-moving
organization.
Live Our Values
Our values serve as a compass for our actions and describe
how we behave in the world.
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•
•
•
•
•
•
•
Leadership: The courage to shape a better future
Collaboration: Leverage collective genius
Integrity: Be real
Accountability: If it is to be, it’s up to me
Passion: Committed in heart and mind
Diversity: As inclusive as our brands
Quality: What we do, we do well
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YOUR CALL
What do you think of Coca-Cola’s mission, vision, and values?
Are they explicit enough to guide employee behavior and company actions? Why or why not? Could any of them apply equally
well to other businesses? Why or why not?
The concept of a vision statement also is important for individuals. Harvard professor Clayton Christensen believes that creating a personal life vision statement is
akin to developing a strategy for your life. He finds that people are happier and lead
more meaningful lives when they are directed by personal vision statements.23
Do you have a vision for your future career? Is it vague or specific? The following
self-assessment was created to help you evaluate the quality of your career vision
and plan.
SELF-ASSESSMENT 5.1
CAREER READINESS
Assessing Career Behaviors and Future
Career Identity
This self-assessment is designed to help you reflect on the
vision of your career identity. Please be prepared to answer
these questions if your instructor has assigned Self-Assessment
5.1 in Connect.
1. What did you learn about your future career identity? Are
you surprised by the results?
2.
3.
4.
Write a personal mission and vision statement using ideas
discussed in this section. Share it with a friend for feedback.
Based on your results, what might you do to enhance
your future career identity? Explain.
What things can you say during an interview to demonstrate
that you possess the career-readiness competency of
Career Management.
The Values Statement—“What Values Do We Want to Emphasize?”
Values, we said in Chapter 3, are the relatively permanent and deeply held underlying beliefs and attitudes that help determine a person’s behavior: integrity, dedication, teamwork, excellence, compassion, or whatever. Values reflect the qualities
that represent an organization’s deeply held beliefs, highest priorities, and core
guiding principles.
After formulating a vision statement, then, top managers need to develop a values
statement, also called a core values statement, which expresses what the company stands
for, its core priorities, the values its employees embody, and what its products contribute to
the world.24 Values statements “become the deeply ingrained principle and fabric that
guide employee behavior and company decisions and actions—the behaviors the company and employees expect of themselves,” says former executive Eric Jacobsen.
“Without a statement, the company will lack soul.”25
Are you a gamer? Have you played “World of Warcraft”? If yes, then you will appreciate the values that guide Blizzard Entertainment’s operations. Headquartered in
Irvine, California, the company is a top developer and publisher of wildly popular
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entertainment software, including the Warcraft, StarCraft, and Diablo series and the
online-gaming service Battle.net. Its eight core values, described on the company website, are: Gameplay first, commit to quality, be nice—play fair, embrace your inner
geek, every voice matters, think globally, lead responsibly, and learn and grow. These
are unique values and they define what matters most to the company. Would you like
to work at Blizzard?
Three Types of Planning for Three Levels of
Management: Strategic, Tactical, and Operational
Inspiring, clearly stated mission statements and vision statements provide the focal
point of the entire planning process. Then three things happen:
■
Strategic planning by top management. Using their mission and vision statements, top managers do strategic planning—they determine what the organization’s long-term goals should be for the next one to five years with the resources
they expect to have available. “Strategic planning requires visionary and direc-
tional thinking,” says one authority.26 It should communicate not only general
goals about growth and profits, but also ways to achieve them. Today, because
of the frequency with which world competition and information technology
alter marketplace conditions, a company’s strategic planning may have to be
done closer to every one or two years than every five. Still, at a big company
like Boeing or Ford or Amazon, top executives cannot lose sight of long-range,
multiyear planning.
A lighthouse is a great metaphor for
strategic planning. A lighthouse provides a
navigational aid and it warns boats about
dangerous or hazardous areas. A strategic
plan similarly provide direction to both
employees and shareholders. It defines
what an organization is trying to achieve
and signifies what markets or opportunities
are not going to be pursued. ©George
Diebold/Blend Images LLC
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EXAMPLE
167
Coca-Cola’s Five-Plus Strategies
Coca-Cola recently announced progress made on five strategic
actions it has taken to revamp its business:27
1. Focused on driving revenue and profit growth. In
emerging markets, the focus was on increasing volume
with affordable products, and in developed markets that
meant improving profitability with more small and premium packages.
2. Invested in our brands and business. More and better
marketing was the goal of this strategy, which meant a
boost of more than $250 million in the company’s media
ad budget.
3. Became more efficient. “Zero-based work” assumes that
organizational budgets begin at zero and must be justified
every year. One result of adopting this budgeting strategy
was realizing “more than $600 million in productivity
improvements in 2015,” some of which was reinvested in
the company and some of which went to shareholders.
4. Simplified our company. Coca-Cola eliminated one layer
of management, streamlined some internal business processes, and connected its regional operations more
closely to headquarters.
■
CHAPTER 5
5. Refocused on our core business model. Among
the company’s more than 500 brands are 20 that
generate more than a billion dollars a year. To retain
focus on these core products, the company has begun
franchising out the 18% of its bottling operations
that it still handled itself, aiming to reduce that
amount to 3%.
A year later, in 2017, the company added a sixth strategy
for “our way forward”:28
6. Keep people at the heart of our company. This means
rethinking package sizes in all the company’s markets
and more heavily promoting low- and no-sugar drinks in
order to reduce sugar intake and help the global fight
against obesity.
YOUR CALL
Does it surprise you that a large company like Coca-Cola would
frequently revisit and revise its strategic plans? Why or why
not? Which of the first five goals listed here do you think best
support(s) goal 6?
Tactical planning by middle management. The strategic priorities and policies
are then passed down to middle managers, who must do tactical planning—that
is, they determine what contributions their departments or similar work units can
make with their given resources during the next 6–24 months.
■
Operational planning by first-line management. Middle managers then pass
these plans along to first-line managers to do operational planning—that is, they
determine how to accomplish specific tasks with available resources within the
next 1–52 weeks.
I Wish My Manager…
…and I put more effort into operational planning.
Josephine Schulte works
as a procurement manager
for a telecommunications
company. The company had
to change its process for
onboarding vendors after
acquiring another company.
The company hit a lot of road
bumps because of poor operational planning while rolling
Courtesy Josephine Schulte
out the new process.
“There has been a lot of change management around what
the process is to get vendors on board and bring them onsite,”
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said Josephine, “I wish we would have planned better up front
in terms of the process of getting the correct information in
front of the people who needed it so they could understand
what needed to happen and the timeline involved with getting
a vendor on board.”
The new process for onboarding vendors involves making
sure the vendors have contracts in place if they need one and
routing those contracts for signatures and internal approval.
What the company did to implement the training of this new
process was to schedule a few training sessions with managers
from each business unit.
“We rolled the process out to a group of people with the
intent that they would push it down through their business
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units, but it is hard to get that to happen,” said Josephine. Each
business unit had its own unique questions as to how the process would work for its specific groups. This made it difficult
to present the same training to one group of representatives to
relay back to each business unit.
“We are very decentralized, so it was hard to figure out who
to talk to about rolling the process out. We originally spoke
to the facilities directors, but there wasn’t a good way for
them to send the information out to the business units in their
regions. Essentially, we presented this to about 12 people in a
company of 100,000 employees—and of course, not every person needs to know about this process, but there are quite a
few that do, and they are all in different business units in different locations throughout the country,” said Josephine.
One of the biggest hurdles the company had was making sure
that all necessary employees were caught in the initial training so
they did not have to go back later and train some employees on
an individual basis. This would save time and money.
In hindsight, Josephine had several suggestions for what the
company could have done better when rolling this process out
to the employees. “I would have sent a step-by-step slide deck
out to the employees right away,” said Josephine. “I would have
gotten as many people as possible across the business units
and company to attend those virtual trainings. A recorded webinar would have been the best move up front because we were
saying the same thing in every training session and it would
have saved a lot of time to record one session.”
Josephine admits that the process could have been much
smoother if only more planning had gone into the training and
implementation of the new system before rolling it out.
Courtesy of Josephine Schulte
The three kinds of managers are described further in the following figure. (See Figure 5.3.) ●
FIGURE 5.3
Three levels of management, three types of planning
Each type of planning has different time horizons, although the times overlap because the plans are somewhat elastic.
Top management
Strategic planning:
1–5 years
Make long-term decisions
about overall direction of
organization. Managers need
to pay attention to
environment outside the
organization, be future oriented,
deal with uncertain
and highly competitive
conditions.
Middle management
functional managers,
product-line managers,
department managers
Tactical planning:
6–24 months
Implement policies and plans
of top management, supervise
and coordinate activities of
first-line managers below,
make decisions often without
base of clearly defined
information procedures.
First-line management
unit managers, team leaders,
first-line supervisors
Operational planning:
1–52 weeks
Direct daily tasks of
nonmanagerial personnel;
decisions often predictable,
following well-defined set of
routine procedures.
president, vice president,
general managers,
division heads
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5.3 Goals and Plans
THE BIG PICTURE
The purpose of planning is to set a goal and then an action plan. There are two types of goals, short-term
and long-term, and they are connected by a means-end chain. Types of plans include standing and singleuse plans.
Whatever its type—long term or short term—the purpose of planning is to set a goal and
then to formulate an action plan.
Long-Term and Short-Term Goals
LO 5-3
Discuss the types and
purposes of goals and
plans.
A goal, also known as an objective, is a specific commitment to achieve a measurable
result within a stated period of time. Goals may be long-term or short-term.
Long-term goals are generally referred to as strategic goals. They tend to span one to
five years and focus on achieving the strategies identified in a company’s strategic plan.
An example is to increase revenue from new customers by 10% over the next 12 months.
Short-term goals are sometimes referred to as tactical or operational goals, or just
plain goals. They generally span 12 months and are connected to strategic goals in a hierarchy known as a means-end chain.
A means-end chain shows how goals are connected or linked across an organization.
For example, a low-level goal such as responding to customer inquiries in less than
24 hours is the means to accomplishing a higher-level goal of achieving 90% customer
satisfaction.
As we will see later in Section 5.4, goals should be SMART—specific, measurable,
attainable, results-oriented, and with target dates.
The Operating Plan and Action Plan
Larry Bossidy, former CEO of both Honeywell International and Allied Signal, and
global consultant Ram Charan define an operating plan as a plan that “breaks long-term
output into short-term targets” or goals.29 In other words, operating plans turn strategic
plans into actionable short-term goals and action plans.
An action plan defines the course of action needed to achieve a stated goal. Whether
the goal is long-term or short-term, action plans outline the tactics that will be used to
achieve a goal. Each tactic also contains a projected date for completing the desired
activities (read about Amanda Lawrence’s experience in the I’m Glad . . . feature).
I’m Glad I…
…developed an action plan.
Amanda Lawrence served as the president of a nonprofit organization for women in business. She was in charge of planning
a first annual fundraising event for her organization, and the
action plan that she developed resulted in a successful event
that has been running for almost 10 years.
Amanda began by looking at the big picture to get a better
idea of the long-term goal of the project. Once she had
kin75117_ch05_156-187.indd 169
long-term goals in place, she was able to develop action plans
and begin delegating tasks to others based on their skillsets.
“Planning was integral for an event that had never been
done before. I had to start with the big picture of what the
goals and objectives of the event were, and then figure out
how to reach those goals and determine who was going to
take care of each area of the event,” said Amanda.
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There were several things
that Amanda had to think about
when organizing the event, from
venue and keynote speakers to
alternate weather plans.
“We had to find a venue based
on how many people we expected
would attend an event like this.
We had to determine how much
we wanted to charge for the tickets—did we want this to be a $20
per ticket event with a cash bar, or
Courtesy Amanda Lawrence
did we want this to be a $200 per
chair black tie event? We determined we wanted to be somewhere in the middle of the road,
about $50 per ticket with a good meal and a keynote speaker who
would provide value to the event,” said Amanda.
“We also had a rainy day plan. We were in Phoenix, Arizona,
so we planned to host the event in April so it would be warm
but not too warm, but we still had to consider the possibility of
rain. We planned an outdoor, covered dinner with an outdoor,
EXAMPLE
uncovered cocktail hour. We planned for people to have
umbrellas to walk the guests from their cars to the venue if it
rained,” said Amanda. “We talked through all of our contingency plans ahead of time.”
Once plans were in place, Amanda began to delegate a person to each area of the event. “I took on the venue and the
catering, and then we discussed what each board member’s
individual strengths were and what they felt they could help
the most with,” said Amanda. “One of our board members had
some experience with selling tickets for another event, so she
took on the research to determine what the best way for us to
sell tickets would be. We had someone else who felt comfortable approaching some corporate females in the area to build
our guest list. We had another person who was a marketer by
day, so she handled the marketing calendar.”
The event sold out and raised $5,000 for Amanda’s organization in the first year alone, and it has been running strong for
almost 10 years. The event’s success can be attributed to
Amanda’s strong planning skills.
Courtesy of Amanda Lawrence
Long-Term and Short-Term Goals at Southwest Airlines
Ranking No. 8 among Fortune’s 2018 Most Admired
Companies, a list on which it has appeared for 24 years in a
row, Dallas-based Southwest Airlines has continually achieved
its strategic goals and as of 2018 had been profitable for 45
consecutive years.30
$543 million in profit sharing in 2017, amounting to more than
5 weeks’ pay per person.32
The goal of Southwest’s top managers is to ensure that the
airline is highly profitable, and for years it has followed the
general strategy of (a) keeping costs and fares down, to appeal
to budget rather than business
Long-Term Strategic Goals.
travelers, (b) offering a supeEmployee engagement, cusrior on-time arrival record and
tomer satisfaction, and profitsqueezing more flights per
ability have been key strategic
day from every plane, and (c)
goals for Southwest since its
keeping passengers happy
inception. Employee engagewith its cheerful cabin crew
ment is created through the
and staff. One of the most
company’s corporate culture,
important strategic decisions
which focuses on employee
Southwest made was to fly
satisfaction and well-being.
just one type of airplane—
The page of the company
Boeing 737s, 692 of them—to
Lookalikes. One key to the success of Southwest Airlines is that all the
website announcing its vision
hold down training, mainteplanes in its fleet have been the same type, Boeing 737s, which saves on
and mission includes this cennance, and operating
maintenance and training costs. ©Charles Rex Arbogast/AP Images
tral statement about its
expenses.33 Competing head
employees: “We are committo head with legacy carriers,
ted to provide our Employees a stable work environment with
Southwest now flies to key airports of major cities—and even
equal opportunity for learning and personal growth. Creativity
on international routes, principally to Latin America and the
and innovation are encouraged for improving the effectiveness
Caribbean.
of Southwest Airlines. Above all, Employees will be provided
the same concern, respect, and caring attitude within the orgaShort-Term Goals. Cutting costs and keeping fares low have
nization that they are expected to share externally with every
traditionally been key operational goals for Southwest. To
Southwest Customer.”31 Employees were awarded a total of
achieve its second operational goal, a superior on-time arrival
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record, the company did away with guaranteed seat reservations before ticketing so that no-shows wouldn’t complicate
(and therefore delay) the boarding process. To attract business travelers, Southwest changed the reservations policy
slightly to ensure that passengers paying extra for “business
select” fares would be placed at the front of the line. It also
rewards “high-level” business travelers with what is called
the “A-List” designation. These individuals get automatic
check-in and are guaranteed to board with the A-group or
immediately before the B-group starts boarding. In addition,
the airline tries to turn planes around in exactly 20 minutes so
that on-time departures are more apt to produce on-time
arrivals.
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The company plans to improve pre-tax revenue by about $200
million thanks to a new reservation system and to continue reducing operating costs. It recently announced plans to add Hawaii to
its many destinations.34 Said CEO Gary C. Kelly, “Overall, our
strong financial performance, solid outlook, healthy balance
sheet, and significantly lower federal income taxes, provide the
cash flow to continue to reward our Employees, keep our costs
and fares low for our Customers, reinvest in our business, return
value to our Shareholders, and support our communities.”35
YOUR CALL
Do you think the company will continue to achieve its strategic
goals? Why or why not?
Types of Plans: Standing Plans and Single-Use Plans
Plans are of two types—standing plans and single-use plans. (See Table 5.2.) Standing
plans cover activities that are repeated or occur frequently over time. A standing plan,
for example, might direct the way employees in a retail store should handle returns.
L.L.Bean recently changed its standing plan on returned items and will now accept
them for only one year from purchase rather than indefinitely as it once did. Forever 21,
which used to accept returns only for exchange or credit, now has a standing plan that
offers refunds36 for returned items.
A single-use plan directs activity, such as a project, that is unlikely to be repeated.
The successful 2018 launch of the Falcon Heavy, the rocket built by entrepreneur Elon
Musk’s space exploration company SpaceX, was a program consisting of a number of
activities37 and directed by a single-use plan. ●
PLAN
DESCRIPTION
• Standing plan
For activities that occur repeatedly over a period of time
• Policy
Outlines general response to a designated problem or situation
• Procedure
Outlines response to particular problems or circumstances
• Rule
Designates specific required action
• Single-use plan
For activities not likely to be repeated in the future
• Program
Encompasses a range of projects or activities
• Project
Has less scope and complexity than a program
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TABLE 5.2
Standing
Plans and Single-Use Plans
There are three types of
standing plans and two types
of single-use plans.
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5.4 Promoting Consistencies in Goals: SMART
Goals, Management by Objectives, and Goal
Cascading
THE BIG PICTURE
This section discusses SMART goals—goals that are specific, measurable, attainable, results-oriented, and
have target dates. It also briefly discusses a technique for setting goals, management by objectives (MBO),
a four-step process for motivating employees. Finally, it introduces the concept of goal cascading, which
attempts to ensure that higher-level goals are communicated and aligned with the goals at the next levels
down in the organizational hierarchy.
Anyone can define goals. But as we mentioned earlier, the five characteristics of a good
goal are represented by the acronym SMART.
LO 5-4
Describe SMART goals
and their implementation.
SMART Goals
A SMART goal is one that is specific, measurable, attainable, results-oriented, and has
­target dates.
Specific
Goals should be stated in specific rather than vague terms. The goal “As
many planes as possible should arrive on time” is too general. The goal that “Ninety
percent of planes should arrive within 15 minutes of the scheduled arrival time” is
specific.
FIGURE 5.4
Relationship between goal
difficulty and performance
Performance
Source: Adapted from E. A. Locke
and G. P. Latham, A Theory of Goal
Setting and Task Performance
(Englewood Cliffs, NJ: Prentice
Hall, 1990).
High
Measurable Whenever possible, goals should be measurable, or quantifiable (as in
“90% of planes should arrive within 15 minutes”). That is, there should be some way to
measure the degree to which a goal has been reached.
Of course, some goals—such as those concerned with improving quality—are not precisely quantifiable. In that case, something on the order of “Improve the quality of customer relations by instituting 10 follow-up telephone calls every week” will
do. You can certainly quantify how many follow-up phone calls were made.
Attainable
B
A
C
Low
Low Moderate
Impossible
Challenging
Performance
A Committed individuals with
adequate ability
B Committed individuals who
are working at capacity
C Individuals who lack commitment
to high goals
kin75117_ch05_156-187.indd 172
Goals should be challenging, of course, but above all, they
should be realistic and attainable. It may be best to set goals that are quite
ambitious so as to challenge people to meet high standards. Always, however,
the goals should be achievable within the scope of the time, equipment, and
financial support available. (See Figure 5.4.)
If too easy (as in “half the flights should arrive on time”), goals won’t
impel people to make much effort. If impossible (“all flights must arrive on
time, regardless of weather”), employees won’t even bother trying. Or they
will try and continually fail, which will end up hurting morale. Or they will
cheat. (An example was the unrealistic goal of cutting wait times for
appointments by more than half at Veterans Affairs hospitals, as revealed
in ongoing scandals in which VA administrators were found to have falsified figures.)38
Results-Oriented
Only a few goals should be chosen—say, five for any
work unit. And they should be results-oriented—they should support the organization’s vision.
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In writing out the goals, start with the word “To” and follow it with action-oriented
verbs—“complete,” “acquire,” “increase” (“to decrease by 10% the time to get passengers
settled in their seats before departure”).
Some verbs should not be used in your goal statement because they imply activities—
the ways used to accomplish goals (such as having baggage handlers waiting). For example, you should not use “to develop,” “to conduct,” “to implement.”
Target Dates Goals should specify the target dates or deadline dates when they are
to be attained. For example, it’s unrealistic to expect an airline to improve its on-time
arrivals by 10% overnight. However, you could set a target date—three to six months
away, say—by which this goal is to be achieved. That allows enough time for lower-level
managers and employees to revamp their systems and work habits and gives them a
clear time frame in which they know what they are expected to do.
EXAMPLE
Setting Goals: Are Snapchat’s Goals Clear?39
Snapchat’s user base grew slowly following its first public offering of stock in early 2017, and investors became concerned
that profits might dip. In response, Snapchat’s parent company,
Snap Inc., announced that the app would be redesigned in
order to make it easier for a wider audience to use, with the
stated goal of increasing its user base in 2018. The announcement represented a change in the company’s main goal, which
had been to provide an inviting home for chat and video for
people looking for real connections, not to build a platform for
billions of users such as Facebook and YouTube have become.
Some observers were doubtful that Snapchat could achieve
its new goal with the specific design changes it announced.
The plan to essentially lump messages and videos from friends
together in a single hub, separate from content produced by
publishers, didn’t convince everyone that the app would now
be easier for new users. CEO Evan Spiegel’s explanation
seemed off-target to some commentators, too. Spiegel spoke
of the dangers of getting news and information from online
sources that select from a narrow set of sources. Separating
“the social from the media,” as the company described it, isn’t
necessary a bad idea, given the proliferation of fake news in
social media, but how would it enlarge the app’s user base?
Snapchat didn’t say.
By the fall of 2017, the company’s revenues were still running below expectations, and costs and losses were higher
than expected. Snap’s stock price seemed stuck at a point
below its initial offering price of $17 a share. Five million new
users had been added, but analysts had expected 8 million.
Investors were thus still unclear what the company’s goal
was—and how and even whether it would achieve it. When the
updated Snapchat was rolled out in February 2018, initial reactions from users were largely negative, especially among
younger fans who called the new version “twisted” and “super
confusing.”40
YOUR CALL
Do you think Snapchat’s goal was attainable? Was it communicated clearly? What could the company have done better?
Management by Objectives: The Four-Step Process
for Motivating Employees
First suggested by Peter Drucker in 1954, management by objectives has spread largely
because of the appeal of its emphasis on converting general objectives into specific ones
for all members of an organization.41
Management by objectives (MBO) is a four-step process in which (1) managers and
employees jointly set objectives for the employee, (2) managers develop action plans, (3)
managers and employees periodically review the employee’s performance, and (4) the
manager makes a performance appraisal and rewards the employee according to results.
The purpose of MBO is to motivate rather than to control subordinates.
Before we begin discussing these four steps, you may want to consider the quality of
the goal-setting process in a current or former employer. Management by objectives and
goal cascading will not work without an effective goal setting process. The following
self-assessment was developed to provide insight into the quality of goal setting within
an organization.
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SELF-ASSESSMENT 5.2
What Is the Quality of Goal Setting within a
Current or Past Employer?
This self-assessment is designed to assess the quality of goal
setting in a company. Please be prepared to answer these
questions if your instructor has assigned Self-Assessment 5.2
in Connect.
1.
2.
3.
What are the strengths and weaknesses of goal setting in
the company you selected?
Based on your results, what recommendations would you
provide to senior management about improving the goalsetting process in this company? Explain.
What actions could you take to improve the goal-setting
process in this company? Be specific.
1. Jointly Set Objectives
You sit down with your manager and the two of you
jointly set objectives for you to attain. Research shows that an assigned goal from your
boss is just as effective as setting goals participatively. Moreover, people tend to set their
own personal goals in response to receiving an assigned goal. A team of goal-setting
experts noted that “the assignment of a goal encourages individuals to also set a personal
performance goal, which in turn contributes to their performance.”42 It is important to
remember what we learned about SMART goals. Managers garner greater acceptance
to goal setting when employees believe the goal is attainable and they possess the skills
and resources to achieve it.43 Managers tend to set three types of objectives, shown in
the following table. (See Table 5.3.)
Jointly setting objectives. An important part of MBO is joint manager/subordinate participation in setting objectives.
Have you ever held a job that featured this kind of process? ©Chris Ryan/age fotostock
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TABLE 5.3
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Three Types of Objectives Used in MBO: Performance, Behavioral, and Learning
PERFORMANCE OBJECTIVES
Focus Express the objective as an outcome or end-result. Examples “Increase sport utility sales by 10%.” “Reduce food spoilage by 15%.”
BEHAVIORAL OBJECTIVES
Focus Express the objective as the behaviors needed to achieve an outcome. Examples “Greet all potential automobile customers with a
smile and offer to assist.” “Ensure food is stored in seal-proof containers.” “Attend five days of leadership training.” “Learn basics of
Microsoft Office software by June 1.”
LEARNING OBJECTIVES
Focus Express the objective in terms of acquiring knowledge or competencies. Examples “Attend sales training class.” “Learn how the
features in our sports utility vehicles compare to competitors.”
Source: These descriptions were based on G. Latham, G. Seijts, and J. Slocum, “The Goal Setting and Goal Orientation Labyrinth: Effective Ways for
Increasing Employee Performance,” Organizational Dynamics, October–December 2016, pp. 271–277.
We want to briefly focus on the career readiness competency of proactive learning orientation because it fuels the achievement of learning objectives. Proactive learning orientation
represents a desire to learn and improve one’s knowledge, soft skills, and other characteristics in pursuit of personal development. Employers value this attitude because it helps
drive the creativity and innovation needed in today’s global economy. They also desire
this competency because the “fast-paced business environment requires employees to
refine and enhance their skills sets throughout their careers.”44 So where do you stand on
this competency? Find out by taking the proactive learning orientation self-assessment.
SELF-ASSESSMENT 5.3
CAREER READINESS
Do I Have a Proactive Learning Orientation?
This self-assessment is designed to assess the extent to which
you possess a proactive learning orientation. Please be prepared to answer these questions if your instructor has assigned
Self-Assessment 5.3 in Connect.
1. What is your level of learning orientation? How might it
affect a recruiter’s perception of your employability?
2.
3.
Based on your results, what might you do to increase the
career readiness competency of proactive learning
orientation? Explain.
What things might you say during an interview to
demonstrate that you possess this career readiness
competency?
2. Develop Action Plan Once objectives are set, employees are encouraged to prepare an action plan for attaining them. Action plans may be prepared for both individuals and work units, such as departments. For example, teams of employees at Tornier, a
medical device manufacturer in Amsterdam, meet every 45, 60, and 90 days to create
action plans for completing their goals. Implementation of the plans can take between
six and 18 months depending on the complexity of the goal.45 Setting and using action
plans also reduces procrastination. If this is sometimes a problem for you, break your
goals into smaller and more specific subgoals.46 This will get you going.
3. Periodically Review Performance You and your manager should meet reasonably often—either informally as needed or formally every three months—to review progress, as should you and your subordinates. Indeed, frequent communication is necessary
so that everyone will know how well he or she is doing in meeting the objectives.
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During each meeting, managers should give employees feedback, and objectives
should be updated or revised as necessary to reflect new realities. Feedback is
essential for improving performance.47 If you were managing a painting or landscaping business, for example, changes in the weather, loss of key employees, or a financial downturn affecting customer spending could force you to reconsider your
objectives.
4. Give Performance Appraisal and Rewards, If Any
At the end of 6 or 12
months, you and your subordinate should meet to discuss results, comparing performance
with initial objectives. Deal with results, not personalities,
emotional issues, or excuses.
Because the purpose of MBO is to motivate employees, performance that meets the objectives should be
rewarded—with compliments, raises, bonuses, promotions, or other suitable benefits. Failure can be
addressed by redefining the objectives for the next 6- or
12-month period, or even by taking stronger measures,
such as demotion. Basically, however, MBO is viewed
as being a learning process. After step 4, the MBO
cycle begins anew.
Cascading Goals: Making LowerLevel Goals Align with Top Goals
A good performance appraisal is like kicking a field goal. It feels good, is
rewarding, and fosters continued motivation. Have you had good and bad
reviews? What makes a performance review effective versus ineffective?
©Steven Puetzer/Getty Images
For goal setting to be successful, the following three
things have to happen.
1. Top Management and Middle Management
Must Be Committed “When top-management
commitment [to MBO] was high,” said one review, “the average gain in productivity
was 56%. When commitment was low, the average gain in productivity was only 6%.”48
2. The Goals Must Be Applied Organizationwide The goal-setting program has
to be put in place throughout the entire organization. That is, it cannot be applied in
just some divisions and departments; it has to be done in all of them.
3. Goals Must “Cascade”—Be Linked Consistently Down through the Organization Cascading goals is the process of ensuring that the strategic goals set at the
top level align, or “cascade,” downward with more specific short-term goals at lower levels
within an organization, including employees’ objectives and activities. Top managers set
strategic goals, which are translated into divisional goals, which are translated into
departmental goals, which are translated into individual goals. The cascading process
ends when all individuals have a set of goals that support the overall strategic goals.
This process helps employees understand how their work contributes to overall corporate success.
Example: The Vice President of the Claims Division of an automobile insurance
company, which pays off requests (or claims) by customers seeking insurance payments
to repair damage to their cars, may set the major goal (and SMART goal) of “increase
customer satisfaction in Claims Division by 10%.” In the cascading goals process, the
same goal would be embraced by the Assistant Vice President of Claims and the
Recovery Director beneath him or her. Further down the hierarchy, the Recovery Unit
Manager would reword the goal to be more specific: “Decrease the number of customer
complaints about claims by 10% over last year’s average.” For the individual Recovery
Analyst at the lowest level, the goal could become: “Return all customer phone calls
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about claims within 24 hours.”49 Thus, all the subgoals in the organization are in alignment with the major goal of top management.
The Importance of Deadlines
There’s no question that college is a pressure cooker for many students. The reason, of
course, is the seemingly never-ending deadlines. But consider: Would you do all the
course work you’re doing—and realize the education you’re getting—if you didn’t have
deadlines?
As we saw under the “T” (for “has target dates”) in SMART goals, deadlines are as
essential to goal setting in business as they are to your college career. Because the whole
purpose of planning and goals is to deliver to a client specified results within a specified
period of time, deadlines become a great motivator, both for you and for the people
working for you.
It’s possible, of course, to let deadlines mislead you into focusing too much on immediate results and thereby ignoring overall planning—just as students will focus too much
on preparing for a test in one course while neglecting others. In general, however, deadlines can help you keep your eye on the “big picture” while simultaneously paying attention to the details that will help you realize the big picture. Deadlines can help
concentrate the mind, so that you make quick decisions rather than put them off.
Deadlines help you ignore extraneous matters (such as cleaning up a messy desk) in
favor of focusing on what’s important—realizing the goals on time and on budget.
Deadlines provide a mechanism for giving ourselves feedback. ●
PRACTICAL ACTION
Setting Goals for a Small Business
Goal setting can seem like an intimidating process, but it’s both a
necessary and a helpful one for the millions of small businesses
in the United States. These firms, officially defined as having
500 or fewer employees, produce almost half of U.S. non-farm
GDP and two-thirds of the nation’s new private-sector jobs.50
What are some typical goal-setting steps for a small business?51
1. Break large goals down into smaller ones.
Anita-Maria Quillen is the owner and manager of Diversified Engineering & Plastics (DER), a profitable auto parts
manufacturer with 78 employees in Jackson, MI. She
hopes to keep her small business profitable despite a
recent drop in U.S. auto sales that will eventually affect
sales of her company’s mirror brackets, pistons, and window frames as car makers seek to cut their costs. Quillen
is firmly focused on her bottom line; one of her business
practices is to break her annual profit goal into monthly
sales goals.
2. Track progress toward goals.
DER tracks sales monthly sales and recently posted its
most profitable month in several years.
3. Keep the goal in sight.
One of Quillen’s goals is to increase her personal contacts in the industry in order to drive orders to the firm.
“I need to be out meeting people, establishing those
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relationships, getting those potential work opportunities
in the door,” she said. She recently attended a business
fair in Dearborn in order to meet buyers from potential
customer firms like Fiat Chrysler and Toyota.
4. Accept that setbacks will come.
Quillen sometimes meets with potential customers over
the phone to pitch her company’s products. One recent
phone meeting was a disappointment; DER had presented a prototype of a new product, but the customer
said her company would have to bid the order out to
other suppliers before making a purchase. Because DER
had invested money in developing its product, Quillen
feared her price would be undercut in the bidding
process.
5. Celebrate success.
On learning her company had posted its most profitable
month in several years, Quillen celebrated with a toast
shared with company executives. Then it was back to
work.
YOUR CALL
What major goal of your own have you broken into smaller
parts? If you have never done this, for what future goal do you
think it would be an effective strategy for you?
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5.5 The Planning/Control Cycle
THE BIG PICTURE
The four-step planning/control cycle helps you keep in control, to make sure you’re headed in the right
direction.
LO 5-5
Outline the planning/
control cycle.
Once you’ve made plans, how do you stay in control to make sure you’re headed in the
right direction? Actually, there is a continuous feedback loop known as the planning/
control cycle. (The “organizing” and “leading” steps within the Planning—Organizing—
Leading—Controlling sequence are implied here.) The planning/control cycle has two
planning steps (1 and 2) and two control steps (3 and 4), as follows: (1) Make the plan. (2)
Carry out the plan. (3) Control the direction by comparing results with the plan. (4) Control
the direction by taking corrective action in two ways—namely, by (a) correcting deviations
in the plan being carried out or (b) improving future plans. (See Figure 5.5.) (We will see
this model echoed later in Chapter 16 in the discussion of the Plan-Do-CheckAct cycle.)
The planning/control cycle loop exists for each level of planning—strategic, tactical, and operational. The corrective action in step 4 of the cycle (a) can get a project
back on track before it’s too late or (b) if it’s too late, can provide data for improving
future plans. ●
FIGURE 5.5
The planning/control cycle
This describes a constant feedback loop designed to ensure plans stay headed in the right direction.
Source: Robert Kreitner, Management, 8th edition.
The Two
Planning Steps
The Two
Control Steps
kin75117_ch05_156-187.indd 178
1 Make the plan
4 Control the direction
in two ways:
(a) by correcting
deviations in the
plan being carried
out (return to
step 2), or
(b) by improving
future plans (go
to step 1 to
start over)
2 Carry out the plan
3 Control the
direction by
comparing the
results with the plan
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Planning
EXAMPLE
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179
The Planning/Control Cycle: Tesla’s Long-Awaited Model 3
By early 2018, Tesla’s Model 3, the electric-car company’s long
United States to be put back together again, which apparently
anticipated, more affordable new vehicle (whose price begins
had still not happened by early 2018. “We view the 2,500 target
at $35,000) had missed its announced production goals at
in March, in particular, as extremely aggressive due to manageleast twice. In the summer of 2017, the company had promised
ment’s acknowledgment of needing to get the robotic equipto make 20,000 Model 3 vehicles by December, but it actually
ment in Germany disassembled, shipped to the US, and then
made fewer than 300 during that year’s third quarter, and
reassembled and programmed in order to hit roughly 2,000 to
orders placed at that time were not expected to be filled until
2,500 units per week,”53 said one market analyst.
the middle of 2018, a projection that was later pushed back to
Tesla’s CEO Elon Musk said he was confident that the differ“late 2018 or early 2019.” The date by which the company
ence between projections and reality was “getting smaller with
would achieve its foreeach passing week.” But
casted production run of
in the fourth quarter of
5,000 cars a week was
2017, only 2,425 units
also moved, from the end
were made, and only
of 2017 to the end of the
1,550 were delivered to
second quarter of 2018,
customers (leaving
with the expectation that
almost 300,000 people
in the first quarter only
still waiting for their
2,500 cars a week would
cars).54 But almost 800 of
come off the assembly
those fourth-quarter cars
line. According to Tesla,
had rolled off the line in a
the change to a slower
mere seven days, leading
ramp-up was meant “to
some to hope that Tesla
focus on quality and effihad begun producing
ciency rather than simply
faster than its newly conpushing for the highest
servative projections sugThe Tesla model 3 has experienced tremendous production and logistics problems.
possible volume in the
gested. One possible
One cause is that the company does not have the ability to custom-build the cars in a
shortest period of time.”52
reason was the compatimely fashion to meet customer demand. This demand is partly driven by the car’s
features and a competitive price of roughly $49,000. CEO Elon Musk has totally
“Production bottleny’s decision to pull
immersed himself in the production process in order to improve the planning/control
necks” were blamed for
workers off the producprocess. ©Salwan Georges/The Washington Post/Getty Images
these disappointing
tion of two of the comparesults, along with the fact
ny’s other cars and assign
that some production systems were not running as quickly as the
them to the Model 3. “The whole team is on it, we’ve got it
company had planned. The assembly line was less fully autocovered, it’s just going to take us a few months longer than
mated than Tesla had wanted, for example, with human workers
expected,” Musk said.55
filling the gaps. The company plans to make production as fully
YOUR CALL
automated as possible but hasn’t yet achieved that goal. Battery
production has also been slower than hoped, after Tesla was
Some analysts believe Tesla would have been better off
forced to bring it back in house when outside suppliers failed to
announcing less ambitious production plans for the Model 3 in
deliver. The company addressed that problem by creating autothe first place. Are they right? Do you think the company is
matic assembly lines for its batteries. But these lines were built in
doing a good job of making and controlling its paces for the
Germany, so they needed to be disassembled and shipped to the
Model 3? Why or why not?
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Planning
5.6 Career Corner: Managing Your Career
Readiness
LO 5-6
Describe how to develop
the career readiness
competency of proactive
learning orientation.
FIGURE 5.6
Model of Career Readiness
©2018 Kinicki and Associates, Inc.
Planning is not one of the career readiness competencies associated with the model
shown below. (See Figure 5.6.) The reason is not that employers don’t value planning
skills. Rather, it’s the fact that other Career Readiness competencies are foundational to
good planning. The soft skill of critical thinking/problem solving is a prime example.
The competency of critical thinking/problem solving is defined as sound reasoning to
analyze situations, make decisions, and solve problems. These are all critical activities
associated with planning and require the ability to obtain, interpret, and analyze both
qualitative and quantitative information. In turn, this competency is driven by another
career readiness competency: proactive learning orientation. Let’s consider the link
between planning, critical thinking, and proactive learning in more detail.
Critical thinkers don’t make quick or rash decisions during the planning process.
Instead, they consider alternative solutions to problems and remain open-minded. They
remain open-minded by obtaining and considering a wide range of information before
making a judgment. This is precisely what happens when someone has a proactive
learning orientation. Proactive learners seek information and knowledge so that they
expand their knowledge base, which makes them more effective planners. The point is
that good planning requires critical thinking, which in turn requires a proactive learning
orientation. This process ultimately results in expanding the career readiness competency of task-based/functional knowledge.
Effective planning requires you to be a proactive learner in areas beyond the technicalities of your profession. It also applies to two additional career readiness competencies: understanding the business and networking. Organizations want all of us to stay
abreast of what is happening in the industries and markets in which we work. Doing so
enables us to consider a wider bandwidth of information when planning. For example,
staying current about trends in higher education enables us as authors to do a better job
in planning the revisions of this product. We also find that many people fail to keep
their social and professional networks up to date over time. This is a mistake! Failing to
proactively maintain such networks means that we are losing contacts and valuable
information that can aid the planning process and our career progression. As authors,
for instance, we rely on our social networks to get feedback about what students and
educational institutions are looking for in a textbook. As you can see, effective planning
is grounded in information that comes from staying current about events within the
industry in which we work and with people in our social networks.
Knowledge
(K)
Soft skills
(S)
Attitudes
(A)
Career
readiness
Career
outcomes
Other
characteristics
(O)
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181
Becoming More Proactive
Being “intentionally proactive” is the first step to becoming a proactive learner. “Being
proactive means relying on your own choices instead of luck and circumstances. It’s
about controlling the situation rather than simply waiting for the outcomes,” said one
business writer.56 Lina Tinsley, a brand manager at MARS, put this recommendation
into practice. “I give my 100 percent every day and I’m committed to be intentional in
all I do. For me, work is an opportunity to live my purpose and bring my best, to deliver
consistent results, and to positively influence the people around me,” she said.57 You
can put Lina’s beliefs into practice by following four key recommendations:58
1.
2.
3.
4.
Focus on solutions rather than problems.
Take initiative and rely on yourself.
Set realistic goals and don’t overpromise.
Participate and contribute to personal and professional conversations.
Keeping an Open Mind and Suspending Judgment
Keeping an open mind and suspending judgment are essential for developing a proactive learning orientation. This exercise was designed to assist you in this pursuit. Focus
on your school work or a current job to practice the technique. You can repeat this
process in the future whenever you desire to be open-minded.59
■
■
■
Step 1 Make a list of your current tasks, projects, or commitments at school
or work.
Step 2 For each task listed in step one, identify the key moments it would be
important to be open-minded and suspend judgment.
Step 3 For each of these moments, think of how you might apply the four key
skills of being open minded:60
Question your beliefs. Many of us make decisions based on false beliefs and
assumptions. You can check yourself by asking: What specific evidence
supports my view? Is my knowledge based on facts or my experience? Why
am I arguing with others who have more experience and knowledge? Am I
offering an opinion or being opinionated? Based on answers to these questions, you can either proceed in the discussion or take a step back and
allow your mind to take in new information.
Pause and seek feedback. Observe how others respond to your opinions
and recommendations. Don’t be married to a perspective. If the goal of a
discussion is to conduct better planning and make better decisions, then it
does not matter whether people agree or disagree with your views. Your
goal is to arrive at better decisions and help people to grow.
Watch for communication blocks. Be aware of words, concepts, or communication styles that elicit emotional responses from you and others.
Emotionality leads to defensiveness and the blocking of listening. Be aware
of your emotions when talking with others.
4. Check the accuracy of your past judgments and predictions. If your judgments and predictions have been wrong, consider the reasons and adjust in
the future. ●
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Key Terms Used in This Chapter
operating plan 169
operational goals 169
operational planning 167
plan 158
planning 158
planning/control cycle 178
policy 171
procedure 171
program 171
project 171
rule 171
short-term goals 169
action plan 169
business model 158
business plan 158
cascading goals 176
goal 169
long-term goals 169
management by objectives
(MBO) 173
means-end chain 169
mission 164
mission statement 164
objective 169
single-use plans 171
SMART goal 172
standing plans 171
strategic goals 169
strategic management 159
strategic planning 166
strategy 159
tactical goals 169
tactical planning 167
values statement 165
vision 164
vision statement 164
Key Points
5.1 Planning and Strategy
• Planning is defined as setting goals and deciding
how to achieve them. It is also defined as coping with
uncertainty by formulating future courses of action to
achieve specified results.
• A plan is a document that outlines how goals are
going to be met. One important type of plan is a
business plan, a document that outlines a proposed
firm’s goals, the strategy for achieving them, and the
standards for measuring success. The business plan
describes the business model, which outlines the
need the firm will fill, the operations of the business,
its components and functions, as well as the
expected revenues and expenses.
• A strategy, or strategic plan, sets the long-term goals
and direction for an organization.
• Strategic management is a process that involves
managers from all parts of the organization in the
formulation and implementation of strategies and
strategic goals.
• An organization should adopt planning and strategic
management for three reasons: They can (1) provide
direction and momentum, (2) encourage new ideas,
and above all (3) develop a sustainable competitive
advantage.
5.2 Fundamentals of Planning
• An organization’s reason for being is expressed in a
mission statement.
• A vision is a long-term goal describing “what” an
organization wants to become. It is a clear sense of
the future and the actions needed to get there. A
vision statement expresses what the organization
should become, where it wants to go strategically.
• Both mission and vision should express the
organization’s values. A values statement, or core
values statement, expresses what the company
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stands for, its core priorities, the values its employees
embody, and what its products contribute to the
world.
• From these are derived strategic planning, then
tactical planning, then operational planning. In
strategic planning, managers determine what the
organization’s long-term goals should be for the next
1–5 years with the resources they expect to have
available. In tactical planning, managers determine
what contributions their work units can make with
their given resources during the next 6–24 months.
In operational planning, they determine how to
accomplish specific tasks with available resources
within the next 1–52 weeks.
5.3 Goals and Plans
• Whatever its type, the purpose of planning is to set a
goal and then formulate an action plan.
• Goals are of two types: long-term and short-term.
• Long-term goals are generally referred to as strategic
goals. They tend to span one to five years and focus
on achieving the strategies identified in a company’s
strategic plan.
• Short-term goals are sometimes referred to as
tactical goals, operational goals, or just plain goals.
They generally span 12 months and are connected
to strategic goals in a hierarchy known as a meansend chain.
• A means-end chain shows how goals are connected
or linked across an organization. The
accomplishment of low-level goals is the means
leading to the accomplishment of high-level goals or
ends.
• Strategic goals are set by and for top management
and focus on objectives for the organization as a
whole. Tactical goals are set by and for middle
managers and focus on the actions needed to
achieve strategic goals. Operational goals are
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04/12/18 10:29 PM
•
•
•
•
•
•
set by first-line managers and are concerned with
short-term matters associated with realizing tactical
goals.
An operating plan is a plan that breaks long-term
output into short-term targets or goals. Operational
plans turn strategic plans into actionable short-term
goals and action plans.
An action plan defines the course of action needed
to achieve the stated goal. Whether the goal is longterm or short-term, action plans outline the tactics
that will be used to achieve the goal. Each tactic also
contains a projected date for completing the desired
activities.
The goal should be followed by an action plan, which
defines the course of action needed to achieve the
stated goal. The operating plan, which is typically
designed for a one-year period, defines how you will
conduct your business based on the action plan; it
identifies clear targets such as revenues, cash flow,
and market share.
Plans may be either standing plans, developed for
activities that occur repeatedly over a period of time,
or single-use plans, developed for activities that are
not likely to be repeated in the future.
There are three types of standing plans: (1) A policy
is a standing plan that outlines the general response
to a designated problem or situation. (2) A procedure
outlines the response to particular problems or
circumstances. (3) A rule designates specific
required action.
There are two types of single-use plans: (1) A program
encompasses a range of projects or activities.
(2) A project is a single-use plan of less scope
and complexity.
5.4 Promoting Consistencies in Goals: SMART
Goals, Management by Objectives, and Goal
Cascading
• The five characteristics of a good goal are
represented by the acronym SMART. A SMART goal
is one that is specific, measurable, attainable, resultsoriented, and has target dates.
• Management by objectives (MBO) is a four-step
process in which (1) managers and employees jointly
set objectives for the employee, (2) managers develop
action plans, (3) managers and employees periodically
review the employee’s performance, and (4) the
manager makes a performance appraisal and rewards
the employee according to results. The purpose of
MBO is to motivate rather than to control subordinates.
• For MBO to be successful three things have to
happen. (1) The commitment of top management is
essential. (2) The goals must be applied
organizationwide. (3) Goals must cascade—be linked
consistently down through the organization.
Cascading goals is the process of ensuring that the
strategic goals set at the top level align, or “cascade,”
downward with more specific short-term goals at
lower levels within an organization, including
employees’ objectives and activities.
• Deadlines are essential to planning because they
become great motivators both for the manager and
for subordinates.
5.5 The Planning/Control Cycle
• Once plans are made, managers must stay in control
using the planning/control cycle, which has two
planning steps (1 and 2) and two control steps (3 and
4), as follows: (1) Make the plan. (2) Carry out the
plan. (3) Control the direction by comparing results
with the plan. (4) Control the direction by taking
corrective action in two ways—namely, by (a)
correcting deviations in the plan being carried out or
(b) improving future plans.
5.6 Career Corner: Managing Your Career
Readiness
• Planning requires the use of multiple career
readiness competencies, including critical thinking/
problem solving, proactive learning orientation, taskbased/functional knowledge, understanding the
business, and networking.
• You can increase the competency of proactive
learning orientation by becoming more proactive and
keeping an open mind and suspending judgement.
Understanding the Chapter: What Do I Know?
1. What are planning, strategy, and strategic
management?
2. Why are they important?
3. What is the difference between a mission and a
vision, a mission statement and a vision statement?
4. What are three types of planning?
5. What are two types of goals?
6.
7.
8.
9.
What are different kinds of plans?
What are SMART goals?
What is management by objectives?
What three things have to happen for MBO to be
successful?
10. Explain the planning/control cycle.
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Management in Action
Fender Rebrands to Stay in Tune with the Times
Fender Musical Instruments Corporation produces
some of the most recognized electric and bass guitars
in the world. The organization was one of the first to
mass produce guitars and has an illustrious history dating back to the late 1940s. Fender’s guitars revolutionized popular music by allowing smaller groups of
musicians to play together.61
Today, these small groups include megastar customers like Eric Clapton, Sheryl Crow, and U2. With stars
of this caliber using Fender guitars on stage, you might
imagine business is booming. Sadly, it is not. Fortune
reports that Fender “spent the better part of the past
decade struggling with debt and a lack of growth, and
in 2012 abandoned an IPO, citing unfavorable market
conditions.”62 Andy Mooney was hired as CEO in 2015
to turn around the company. Let’s consider his plan.
A NEW PLAN FOR AN UNRELIABLE
CONSUMER
Fender began its transformation by coming to terms
with the high quit-rate of beginning guitar players.
According to Mooney, “Almost everyone who picks up
a guitar, about 90 percent, abandons it within the first
year.”63 There are two main contributors to this dire
statistic—the method of learning the instrument and
the cost associated with doing so.
Fender’s plan focused on how amateur players preferred to learn. Ethan Kaplan, Fender’s general manager of digital, noted that “The way that I learned piano
when I was a kid is no longer the way most people
learn. They sit at a computer. They sit on an iPhone.
They do things in little bites versus sitting through
hour-long lessons.”64 Mooney and Kaplan’s assessment
of Fender’s current reality provided crucial insight into
the cost of lessons. According to Fortune, “ . . . new
players spend four times as much on lessons as they do
on the instrument.”65
The company’s plan to overcome these challenges
was based on experimenting with different apps. The
plan strives to ensure that beginning guitar players can
easily use digitized materials to quickly learn how to
play guitar at a reasonable cost.
Fender’s first app was Fender Play. This subscription-based app can be used on a mobile device as a way
to assist a “do-it-yourself” society learn how to quickly
play the guitar. The app uses bite-sized, multi-angle
video lessons focused on helping new players learn
popular songs. A professional guitarist provides step-bystep lessons in the videos, and players can track their
progress in the app. Beginners quickly learn how to
play a familiar song from bands such as the Rolling
Stones, Foo Fighters, Tim McGraw, and Coldplay.
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They will be less likely to quit once they achieve this
milestone and more likely to buy more Fender guitars
in the future.66 Players will also be spending much less
than they would have with private lessons, since the
subscription costs only $20 a month.
The software may not be for everybody, though. As
Business Insider reports, “No program of instruction
will be perfect, and Fender Play isn’t going to work for
everyone . . . And for those who don’t like it, there are
many free options on the web, and you can always hire
a real, live teacher!”67 Obviously, Fender cannot rely on
a one-product-fits-all plan.
The company has developed additional apps to
speed up the learning process. For example, Fender
developed Fender Tune to teach players how to tune a
guitar without having any level of proficiency. “When
the kid plugs [the guitar] in for the first time, it doesn’t
sound like a screaming cat when it comes out of an
amp,” according to Mooney.68
Fender is also looking to release a practice-room app
that can assist someone in playing any song in its music
library. This provides an opportunity for amateur players to practice and develop their skills.
Another app lets an amp emulate the sounds of
famous guitarists. The company’s newest amp model will
be able to connect to this app wirelessly, through
Bluetooth, so players can alter and share sound effects.69
IMPACT ON THE BOTTOM LINE
Although Fender has built guitars for Eric Clapton,
Stevie Ray Vaughn, and Jimi Hendrix, its growth plan
is based on the needs of amateur musicians. According
to Kaplan, “We never really concentrated on those 45%
of players who buy a guitar for the first time every
year.” Even a slight improvement in that 90% abandonment statistic would be significant for the company. If
Fender can get a 10% increase in the number of beginners who stick with their guitar, it could double the size
of its instrument business.70
Fender also plans on tapping into an important evolution process with its digital products. If it can get players hooked on cheap starter guitars, then have them
upgrade to fancier guitars as they become more committed to playing, it may be able to turn players into collectors. The company would be able to realize more
revenue by following the lifecycle of its customers.71
Fender’s sales strategy goes beyond digital. The company does almost all its business through traditional
retailers, with online sales from its website making up less
than 2% of North American sales. However, the National
Retail Federation says that online sales hit a record
$108.2 billion during the 2017 holiday season (a 14.7%
increase from the year before).72 These statistics suggest
that Fender’s strategy of using traditional retailers may be
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outdated. Mooney doesn’t seem to be worried. “Players
need to touch, feel, and play a guitar before they buy
one,” he says. Fender, he says, prefers to use the Internet
as a learning tool, rather than a sales mechanism.73
Some factors seem to be out of the company’s control.
As Bloomberg reports, “Detractors have predicted the
death of the electric guitar for years, pointing to the rise of
rap and electronic music on pop charts.” Fender doesn’t
seem overly concerned about this either. “More women
are playing guitar these days,” says Mooney, a trend he
credits to singer Taylor Swift. The company is also quick
to point to rising guitar sales over the past decade. “The
pendulum swings back and forth,” Mooney says.
Can Fender’s new digital strategy swing the pendulum in its direction?
FOR DISCUSSION
Problem-Solving Perspective
1. What is the underlying problem in this case from
Fender CEO Andy Mooney’s perspective?
What are some of the causes of this problem?
3. Do you believe Fender’s strategy and plans will turn
around the company? Explain.
Application of Chapter Content
1. Using the steps in Figure 5.1, describe how Fender is
transforming into a digital company.
Define one specific strategic, tactical, and operational
plan that Fender can utilize for its transformation.
3. Develop a simple strategic goal, operational goal, and
action plan for Fender Play: The goals need to be
SMART. Then utilize a means-end chain to illustrate
the relationship among the three.
4. Assume 8% of Fender’s current customers are
women. Would it be wise for the company to set a
strategic goal of increasing this number to 40% in the
next 12 months? Why or why not? Explain your
response using Figure 5.4.
5. Based on CEO Mooney’s standard for success in
making sure beginners stick with their guitars,
develop a planning/control cycle to make sure Fender
is headed in the right direction.
Legal/Ethical Challenge
Is Pfizer Putting Profits above Alzheimer’s
Patients?
Planning and strategy go together, and they flow from
a company’s mission and vision. Decisions made in
the pursuit of corporate strategy are challenging
because they ultimately involve choices about how to
spend valuable resources. U.S. pharmaceutical giant
Pfizer is a good illustration.
Pfizer decided in January 2018 to no longer pursue
new research and development (R&D) in treatments
for Alzheimer’s disease, resulting in the loss of hundreds of jobs. Worse yet, the approximately 5.5 million
U.S. adults with this neurological disease no longer
have one of the biggest pharmaceutical companies in
their corner.74 Pfizer made this challenging decision
because of either low profitability or limited capacity.
With respect to profitability, Alzheimer’s research
has proven to be costlier than most other R&D pursuits. A neuroscientist at Edinburgh University told
BBC Radio that “More than 99% of trials for Alzheimer’s drugs have failed in past 15 years.”75 Investors thus
are pressuring pharmaceutical companies to spend
less on this research when they can pursue more profitable projects, such as treatments for anxiety disorders
and erectile dysfunction.
Capacity becomes an issue in pharmaceutical
research and development because it’s difficult to run
multiple large-scale R&D programs at the same time.
This has led pharmaceutical companies to focus only
on specific drugs. A former head of research and
development at Pfizer told the Financial Times that
“You can’t run several programmes of that size, even
with a budget like Pfizer’s. . . . How many times can
these companies take another shot when other parts of
science like gene therapy are exploding, and when
there’s a desperate need for new drugs to replace opioids? There are many more areas where you can see
the goal lines.”76 Pfizer’s management team apparently
agrees with this conclusion. The organization said in a
statement that not pursuing Alzheimer’s research “was
an exercise to reallocate [spending] across our portfolio, to focus on those areas where our pipeline, and our
scientific expertise, is strongest.”77
Though Pfizer may be changing its strategy and its
resource allocations, the company has kept its mission statement the same: “To be the premier, innovative biopharmaceutical company.” Its values include
“customer focus” and “integrity.”78 However, its latest
decision is seen by some as contradictory to its mission and values. Alzheimer’s Research UK says that
companies should be encouraged to invest in research
into neuroscience. For its part, the Alzheimer’s Society called Pfizer’s decision “disappointing” and a
“heavy blow” to those living with dementia.79
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Other big drug makers are not letting profit and limited
capacity get in their way. A top scientist at Eli Lilly, one of
Pfizer’s competitors, told Financial Times that “Taking
care of Alzheimer’s patients is a huge economic cost to
society and now is not the time to give up.” Eli Lilly’s most
advanced Alzheimer’s drug failed in a large trial in 2016,
but the company has vowed to continue Alzheimer’s treatment R&D.80 Another U.S. competitor, AstraZeneca, also
remains committed to fighting the disease.
2. Continue funding Alzheimer’s R&D. As a global
leader in the pharmaceutical industry, Pfizer has an
obligation to society to find treatments for diseases
affecting millions of people. This would also be in
line with its mission statement and values.
3. Contribute to agencies such as the National Institutes
of Health so they can continue their studies of
Alzheimer’s.
4. Suggest other options.
SOLVING THE CHALLENGE
What would you do if you were Pfizer’s CEO?
1. Move on to other projects. Pfizer has an obligation to
its shareholders not to throw money at projects that
prove to be unsuccessful.
Uber Continuing Case
Learn how Uber’s corporate strategies have changed from those pursued by founder
and CEO Travis Kalanick to those identified by current CEO Dara Khosrowshahi.
Assess your ability to apply concepts discussed in this chapter to the case by going to
Connect.
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