eBook Understanding Management 12e By Richard L. Daft, Dorothy Marcic
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Get Complete eBook Download By email at student.support@hotmail.com Get Complete eBook Download By email at student.support@hotmail.com Get Complete eBook Download By email at student.support@hotmail.com g n i d n a t s r e t n e m e g a n Ma d n U e 2 1 Daft . L d r a Rich & arcic yM Doroth Australia ● Brazil ● Canada ● Mexico ● Singapore ● United Kingdom ● United States Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it. For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest. Important Notice: Media content referenced within the product description or the product text may not be available in the eBook version. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Understanding Management, Twelfth Edition Last three editions, as applicable: © 2023, © 2019, © 2017 Richard L. Daft and Dorothy Marcic Copyright © 2023 Cengage Learning, Inc. ALL RIGHTS RESERVED. 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Senior Content Manager: Julia Chase Digital Delivery Quality Partner: Beth Ross Library of Congress Control Number: 2021914334 Director, Product Marketing: Danaë April Student Edition: Understanding Management Executive Product Marketing Manager: John Loose-leaf Edition: Understanding Management Carey ISBN: 978-0-357-71689-2 ISBN: 978-0-357-71690-8 Intellectual Property Analyst: Diane Garrity Production Service: MPS Limited Senior Art Director: Bethany Bourgeois/Chris Doughman Cover Image Credit: Evgeny Karandaev/ Shutterstock.com Cengage 200 Pier 4 Boulevard Boston, MA 02210 USA Cengage is a leading provider of customized learning solutions with employees residing in nearly 40 different countries and sales in more than 125 countries around the world. Find your local representative at www.cengage.com. To learn more about Cengage platforms and services, register or access your online learning solution, or purchase materials for your course, visit www.cengage.com. Printed in the United States of America Print Number: 01 Print Year: 2022 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com To my parents, who started my life toward outcomes that I could not understand at the time. —R. L. D. To Nelson, Samantha, Roman, and Phoenix, who have opened pathways of love and fascination I never dreamed of. —D. M. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Brief Contents Part 1 Introduction to Management 1 Leading Edge Management Part 2 02 02 The Environment of Management 52 2 The Environment and Corporate Culture 52 3 Managing in a Global Environment 84 4 Managing Ethics and Social Responsibility 116 Part 3 Planning 148 5 Planning and Goal Setting 148 6 Managerial Decision Making 192 Part 4 Organizing 226 7 Designing Organization Structure 226 8 Managing Innovation and Change 266 9 Managing Human Talent and Diversity/Inclusion Part 5 Leading 360 10 Understanding Individual Behavior 11 Leadership 400 12 Motivating Employees 438 13 Managing Communication 472 14 Leading Teams 508 Part 6 298 Controlling 360 544 15 Managing Quality and Performance 544 Glossary 576 Endnotes 584 Name Index 634 Company Index 637 Subject Index 640 iv Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Contents Part 1 Introduction to Management Chapter 1 Leading Edge Management Michelin 5-Star Caffè Panna 06 Recipe for Success Morning Star 07 Urban Roots 09 Creating a Greener World A Local Market in a Box 10 Take a Moment: Know Yourself 19 Sunny Side Up Time Management Tips for New Managers 20 Half-Baked Management Boeing 22 Recipe for Success Second Harvest Food Bank of Middle Tennessee 24 Creating a Greener World Don’t Toss That iPhone! 33 Take a Moment: Know Yourself 36 Made from Scratch Buurtzorg 38 Current Use of Management Tools and Trends 40 Part 2 02 2 Management Competencies for Today’s World 5 Leading-Edge Management Competencies 5 The Trend Toward Bosslessness 7 The Basic Functions of Management 8 Organizational Performance 11 Management Skills 12 When Skills Fail 14 Challenges Facing New Managers 15 What Is a Manager’s Job Really Like? 17 Manager Activities 18 Manager Roles 21 Managing in Nonprofit Organizations 23 The Historical Struggle: The Things of Production Versus the Humanity of Production 25 Classical Perspective 27 Scientific Management 27 Bureaucratic Organizations 28 Administrative Principles 30 Management Science 31 Humanistic Perspective 34 Early Advocates 34 Human Relations Movement 35 Human Resources Perspective 37 Behavioral Sciences Approach 39 Management Thinking into the Future 39 Managing the New Technology-Driven Workplace 40 Managing the New People-Driven Workplace 42 The Historical Struggle: Is Artificial Intelligence the Answer? 44 The Environment of Management Chapter 2 The Environment and Corporate Culture Recipe for Success Bridge City Brinery 56 Made from Scratch Costco 57 Creating a Greener World There Is No Finish Line for Sustainability 61 52 52 The External Environment 54 Task Environment 55 General Environment 58 The Organization–Environment Relationship 63 Environmental Uncertainty 63 Adapting to the Environment 64 The Internal Environment: Corporate Culture 67 What Is Culture? 67 Toxic Cultures 69 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. v Get Complete eBook Download By email at student.support@hotmail.com Michelin 5-Star Commit to Green 65 Sunny Side Up The Bossless Workplace 68 Half-Baked Management Company Misconduct: CBS, Nike, McDonald’s, Google 69 Made from Scratch TubeMogul 72 Salesforce 73 Take a Moment: Know Yourself 74 Interpreting/Shaping Culture 69 Symbols 70 Stories 70 Heroes 70 Slogans 70 Ceremonies 71 Types of Culture 71 Adaptability Culture 71 Achievement Culture 72 Involvement Culture 73 Consistency Culture 73 Shaping Corporate Culture for Innovative Response 75 Managing the High-Performance Culture Cultural Leadership 77 75 Chapter 3 Managing in a Global Environment 84 Sunny Side Up Bosslessness Emerges Around the Globe 87 Half-Baked Management Chevron Ecuador 89 Made from Scratch TwoBillionEyes Foundation 90 Xiaomi 93 Creating a Greener World China’s Plastic Purge 94 Recipe for Success Godrej & Boyce 96 Starbucks 99 Michelin 5-Star Vermont Maple Ltd. 100 Take a Moment: Know Yourself 107 A Borderless World 86 Globalization 87 Developing a Global Mind-Set 89 The Changing International Landscape 92 China Rising 92 India, the Service Giant 93 Multinational Corporations 95 Characteristics of Multinational Corporations 95 Serving the Bottom of the Pyramid 96 Getting Started Internationally 97 Legal–Political Challenges 99 Sociocultural Challenges 102 Social Values 102 Communication Challenges 105 International Trade Alliances 108 GATT and the WTO 108 European Union 108 United States–Mexico–Canada Agreement 109 Chapter 4 Managing Ethics and Social Responsibility Half-Baked Management Wells Fargo 120 Recipe for Success Coffee of Grace 125 Take a Moment: Know Yourself 129 Creating a Greener World Disrupting Brazil’s Deforestation 134 vi 116 What Is Managerial Ethics? 118 Ethical Management Today 119 The Business Case for Ethics and Social Responsibility 121 Ethical Dilemmas: What Would You Do? 122 Frameworks for Ethical Decision Making 123 Utilitarian Approach 124 Individualism Approach 124 Moral-Rights Approach 124 Justice Approach 125 Practical Approach 126 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Michelin 5-Star Asarasi 135 Sunny Side Up Cultivating a Volunteerism Mind-Set 139 Part 3 The Individual Manager and Ethical Choices 127 The Stages of Moral Development 127 Giving Versus Taking 128 What Is Corporate Social Responsibility? 130 A New Purpose for the Corporation: Stakeholders 131 The Green Movement 133 Sustainability and the Triple Bottom Line 134 Benefit Corporations and B Lab 136 Managing Company Ethics and Social Responsibility 138 Values-Oriented Approach 138 Structure-Oriented Approach 140 Whistle-Blowing 141 Planning 148 Chapter 5 Planning and Goal Setting 148 Recipe for Success Chipotle Mexican Grill 150 Michelin 5-Star Brutus Bakeshop 151 Take a Moment: Know Yourself 155 Recipe for Success Brinker International 160 Creating a Greener World The Bees Buzz 161 Sunny Side Up Should We Use OKRs? 162 Half-Baked Management Indiana State Fair 168 Take a Moment: Know Yourself 170 Take a Moment: Know Yourself 175 Recipe for Success Elevate Packaging 177 Sunny Side Up Kroger’s 177 Creating a Greener World Transferring to Clean Power 179 Goal Setting and Planning Overview 150 Levels of Goals and Plans 151 The Organizational Planning Process 153 Goal Setting in Organizations 155 Organizational Mission 156 Managing Goal Conflict 157 Performance Management 159 Criteria for Effective Goals 160 Management by Objectives 161 Benefits and Limitations of Planning 164 Planning for a Turbulent Environment 165 Contingency Planning 166 Scenario Building 166 Setting Stretch Goals for Excellence 167 Crisis Planning 168 Thinking Strategically 172 What Is Strategic Management? 173 Purpose of Strategy 173 SWOT Analysis 176 Formulating Corporate-Level Strategy 179 Portfolio Strategy 179 The BCG Matrix 180 Diversification Strategy 181 Formulating Business-Level Strategy 182 Porter’s Five Competitive Forces 182 Porter’s Competitive Strategies 183 vii Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. 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Get Complete eBook Download By email at student.support@hotmail.com Chapter 6 Managerial Decision Making Creating a Greener World Business Decision, Social Benefits 196 Michelin 5-Star Mulan Dumplings 201 Recipe for Success Rose Acre Farms 209 Take a Moment: Know Yourself 210 Half-Baked Management JPMorgan 215 Sunny Side Up Do Biases Influence Your Decision Making? 215 Part 4 192 Types of Decisions and Problems 195 Programmed and Nonprogrammed Decisions 195 Facing Uncertainty and Ambiguity 196 Decision-Making Models 199 The Ideal, Rational Model 199 How Managers Make Decisions 200 The Political Model 203 Decision-Making Steps 205 Recognition of Decision Requirement 205 Diagnosis and Analysis of Causes 206 Development of Alternatives 207 Selection of the Desired Alternative 207 Implementation of the Chosen Alternative 208 Evaluation and Feedback 208 Personal Decision Framework 210 Why Do Managers Make Bad Decisions? 213 Innovative Decision Making 217 Start with Brainstorming 217 Use Hard Evidence 217 Engage in Rigorous Debate 218 Avoid Groupthink 218 Know When to Bail 219 Do a Premortem and Postmortem 219 Organizing 226 Chapter 7 Designing Organization Structure 226 Half-Baked Management Deepwater Horizon 232 Take a Moment: Know Yourself 232 Michelin 5-Star Chef Oya’s The TRAP 235 Creating a Greener World Love the Sun 236 Sunny Side Up The Bossless Upside-Down Structure 247 Recipe for Success Sweetgreen 255 viii Organizing the Vertical Structure 228 Division of Labor 229 Chain of Command 230 Span of Management 233 Centralization and Decentralization 235 Departmentalization 238 Vertical Functional Approach 238 Divisional Approach 240 Matrix Approach 242 Team Approach 244 Virtual Network Approach 247 Organizing for Horizontal Coordination 251 The Need for Coordination 251 Task Forces, Teams, and Project Management 252 Relational Coordination 253 Factors Shaping Structure 256 Structure Follows Strategy 257 Structure Fits the Workflow Technology 258 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 8 Managing Innovation and Change 266 Recipe for Success HN Agri Serve 269 Creating a Greener World Tiny Innovation—Big Result 272 Recipe for Success Zingerman’s 274 Sunny Side Up Use Six Thinking Hats for Better Ideas 275 Take a Moment: Know Yourself 276 Michelin 5-Star Rockefeller Foundation Food Initiative 288 Innovation and the Changing Workplace 268 Disruptive Innovation 268 The Ambidextrous Approach 270 Changing Things: New Products and Processes 271 Discovery 273 Horizontal Collaboration and Open Innovation 277 Innovation Roles and Structures 280 Changing People and Culture 282 Training and Development 282 Organization Development 283 Implementing Innovation and Change 285 Implementation Stages 285 Why Do People Resist Change? 286 Create a Sense of Urgency 287 Use Implementation Tactics 289 Half-Baked Management WeWork 289 Chapter 9 Managing Human Talent and Diversity/Inclusion 298 Recipe for Success bwè kafé 302 Creating a Greener World The “You” in Sustainability 305 Take a Moment: Know Yourself 307 Recipe for Success Kraft Heinz 311 Sunny Side Up Ace the Interview 318 Michelin 5-Star Caffè Panna 322 Take a Moment: Know Yourself 328 Creating a Greener World Using Business as a Force for Good 335 Take a Moment: Know Yourself 340 Half-Baked Management Google 343 Sunny Side Up How Women Might Hold Themselves Back 347 The Strategic Role of HRM Is to Drive Organizational Performance 300 The Strategic Approach 300 Building Human Capital to Drive Performance 303 The Impact of Federal Legislation on HRM 305 The Changing Social Contract 308 The End of Lifetime Employment 308 Leading-Edge HR Practices 310 Finding the Right People 312 Human Resource Planning 313 Recruiting 313 Selecting 316 Developing Talent 321 Training and Development 321 Performance Management 323 Maintaining an Effective Workforce 326 Rewards 326 Benefits 327 Termination 328 Diversity in the Workplace 330 Diversity Challenges in Corporate America 331 Diversity Challenges on a Global Scale 334 Managing Diversity 335 Diversity and Inclusion 335 Diversity of Thought 336 Dividends of Workplace Diversity 337 Factors Shaping Personal Bias 339 Unconscious Bias 339 Workplace Prejudice, Discrimination, and Stereotypes 341 Challenges Underrepresented Employees Face 343 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. 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Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. ix Get Complete eBook Download By email at student.support@hotmail.com Factors Affecting Women’s Careers 344 The First Rung of the Management Ladder 345 The Female Advantage 346 Diversity Initiatives and Programs 348 Enhance Structures and Policies 348 Expand Recruitment Efforts 348 Establish Sponsor Relationships 350 Provide Personal Coaching and Feedback 350 Increase Awareness of Sexual Harassment 351 Encourage Employee Resource Groups 351 Part 5 Leading 360 Chapter 10 Understanding Individual Behavior 360 Creating a Greener World Empowering Passions 366 Recipe for Success Frank’s Little Farm 367 Half-Baked Management Nikola 373 Sunny Side Up The Rise of the Introverted Manager 374 Michelin 5-Star Land of the Tamal 376 Take a Moment: Know Yourself 383 Understanding Yourself and Others 362 The Value and Difficulty of Knowing Yourself 362 Enhance Your Self-Awareness 363 Job Satisfaction and Trust 365 Job Satisfaction 365 Trust 367 Perception and Attributions 368 Perception and Perceptual Distortions 368 Attributions: A Special Case of Perception 370 Personality and Behavior 372 Personality Traits 372 Attitudes and Behaviors Influenced by Personality 375 Problem-Solving Styles and the Myers-Briggs Type Indicator™ Emotions 381 Positive and Negative Emotions 381 Emotional Intelligence 382 Managing Yourself 385 Basic Principles for Self-Management 385 A Step-By-Step Guide for Managing Your Time 386 Stress and Resilience 388 Challenge Stress and Threat Stress 388 Causes of Work Stress 389 Enhancing Resilience 390 Chapter 11 Leadership x 379 400 The Nature of Leadership 403 From Management to Leadership Contemporary Leadership 406 Level 5 Leadership 406 Servant Leadership 408 Authentic Leadership 410 Interactive Leadership 411 405 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. 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Get Complete eBook Download By email at student.support@hotmail.com Half-Baked Management Beam Financial 402 Sunny Side Up Be a Leader, Not a Boss 404 Michelin 5-Star Union Kitchen 408 Recipe for Success Popeyes 409 Yola 418 Creating a Greener World In the Hands of a Matador 423 Take a Moment: Know Yourself 427 Chapter 12 Motivating Employees 438 Sunny Side Up Motivating in a Bossless Environment 443 Recipe for Success Publix 447 Mars Incorporated 448 Take a Moment: Know Yourself 449 Half-Baked Management Twinkies 452 Creating a Greener World Green Motivates Green 455 Michelin 5-Star Hudson Valley Fisheries 464 Chapter 13 Leadership Traits 413 Behavioral and Contingency Approaches 415 Behavioral: Task Versus People 415 Contingency: The Situational Model of Leadership 416 Contingency: Fiedler’s Contingency Theory 418 Contingency: Situational Substitutes for Leadership 420 Charismatic and Transformational Leadership 421 Charismatic Leadership 421 Transformational Versus Transactional Leadership 422 Followership 424 Power and Influence 428 Hard Position Power 429 Personal Soft Power 429 Other Sources of Power 430 Interpersonal Influence Tactics 430 Individual Needs and Motivation 440 Intrinsic and Extrinsic Rewards 441 Content Perspectives on Motivation 444 The Hierarchy of Needs 445 ERG Theory 446 A Two-Factor Approach to Motivation 447 Acquired Needs 449 Process Perspectives on Motivation 451 Goal Setting 451 Equity Theory 452 Expectancy Theory 454 Reinforcement Perspective on Motivation 457 Direct Reinforcement 457 Social Learning Theory 459 Job Design for Motivation 459 Job Enrichment 460 Job Characteristics Model 460 Leading-Edge Ideas for Motivating 462 Empowering People to Meet Higher Needs 462 Giving Meaning to Work Through Engagement 463 Managing Communication 472 Michelin 5-Star Brutus Bakery 477 Made from Scratch UWS Yoga and Wellness 479 Communication Is the Manager’s Job 474 What Is Communication? 475 A Model of Communication 476 Purpose-Driven Communication 478 Communicating Vision, Mission, and Values 478 Communicating to Persuade and Influence Others 479 xi Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Sunny Side Up Gender Differences in Communication 481 Recipe for Success Hudson Valley Cold Pressed Oils 483 Creating a Greener World Local Impact 489 Take a Moment: Know Yourself 496 Half-Baked Management College Admissions Scandal 499 Communicating Effectively with Others 481 Open Communication Climate 482 Communication Channels 484 Giving Feedback 486 Communicating with Candor 487 Asking Questions 488 Listening 489 Nonverbal Communication 490 Workplace Communication 492 Social Media 492 Personal Communication Networks 494 Formal Communication Channels 498 Chapter 14 Leading Teams Recipe for Success Yum! Brands 512 Michelin 5-Star Tandem Bakery 513 Creating a Greener World Subaru’s Teams Turn Green 514 Half-Baked Management Comcast 521 Sunny Side Up How to Run a Great Meeting 523 Take a Moment: Know Yourself 526 Recipe for Success Grilled Cheeserie 529 Part 6 508 The Value of Teams 510 What Is a Team? 511 Contributions of Teams 512 Types of Teams 514 Virtual Teams 518 The Personal Dilemma of Teamwork 520 Model of Team Effectiveness 522 Team Demographics 524 Size 525 Diversity 525 Member Roles 525 Team Processes 528 Stages of Team Development 528 Building a Cohesive Team 530 Establishing Team Norms 531 Managing Team Conflict 533 Types of Conflict 533 Balancing Conflict and Cooperation 533 Causes of Conflict 534 Styles of Handling Conflict 535 Ways of Expressing Conflict 536 Negotiation 537 Controlling 544 Chapter 15 Managing Quality and Performance xii 544 The Meaning of Control 546 Feedback Control Model 549 Four Steps of Feedback Control 549 The Balanced Scorecard 552 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Half-Baked Management Zoom 547 Sunny Side Up Quantify Yourself 548 Recipe for Success Little Mosque on the Prairie 550 The Hershey Company 551 Michelin 5-Star Zingerman’s 553 Take a Moment: Know Yourself 554 Recipe for Success L&L Foods 559 Creating a Greener World The Changing Philosophy of Control 554 Hierarchical Versus Decentralized Approaches 555 The Dilemma of Algorithmic Control 557 Total Quality Management 558 TQM Techniques 560 TQM Success Factors 562 Budgetary Control 563 Expense Budget 564 Revenue Budget 564 Cash Budget 564 Capital Budget 565 Zero-Based Budget 565 Financial Control 566 Financial Statements 567 Financial Analysis: Interpreting the Numbers 568 The Honeybee Style 562 Glossary 576 Endnotes 584 Name Index 634 Company Index 637 Subject Index 640 xiii Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Preface Leading-Edge Management xiv The years 2020–21 presented unique and far-reaching challenges to managers in organizations of all types and sizes. The effects of the COVID-19 pandemic put some companies out of business for good and forced managers in all organizations to adapt to new ways of working. Shifting economic conditions and widespread social and political unrest in the United States as well as other countries around the world added to the turmoil and further eroded the myth of a stable environment. Even before the recent dramatic upheavals, managers and organizations were being buffeted by far-reaching competitive, social, technological, and economic changes. Business schools, as well as managers, are scrambling to cope with the turbulence, keep up with fast-changing events, and evaluate the impact that this volatile period of history will have on organizations in the future. This edition of Management addresses themes and issues that are directly relevant to the current, fast-shifting business environment. We revised Understanding Management, 12th edition, with a goal of helping current and future managers find leading-edge solutions to the problems that plague today’s organizations— whether they are everyday challenges or once-in-a-lifetime crises. The world in which most students will work as managers is undergoing a tremendous upheaval. Ethical and social turmoil, the need for crisis management skills, e-commerce and mobile commerce, economic instability, rapidly changing technologies, globalization, outsourcing, cybersecurity threats, increasing government regulation, social media, global supply chains—all of these challenges, and more, place demands on managers that go beyond the techniques and ideas traditionally taught in management courses. Managing today requires the full breadth of management skills and capabilities. This text provides comprehensive coverage of both traditional management skills and the new competencies needed in a turbulent environment characterized by economic and social turmoil, political confusion, and general uncertainty. In the traditional world of work, management’s job was to control and limit people, enforce rules and regulations, seek stability and efficiency, design a top-down hierarchy, and achieve bottom-line results. But to spur innovation, adapt to rapid environmental shifts, and achieve high performance, managers need different skills. Managers must find ways to engage workers’ hearts and minds, as well as take advantage of their labor. The new workplace asks that managers focus on building trust, inspiring commitment, leading change, harnessing people’s creativity and enthusiasm, finding shared visions and values, and sharing information and power. Teamwork, collaboration, participation, and learning are guiding principles that help managers and employees maneuver the bumpy terrain of today’s chaotic business environment. Rather than controlling their employees, savvy managers focus on training them to adapt to new technologies and extraordinary environmental shifts, and thus achieve high performance and total corporate effectiveness. Our vision for this edition of Understanding Management is to present the newest management ideas in a way that is both interesting and valuable to students, while retaining the best of traditional management thinking. To achieve this vision, we have included the most upto-date management concepts and research and have shown the contemporary application of management ideas in organizations. At the end of each major chapter section, a “Remember This” feature offers a quick review of the salient concepts and terms that students should remember. Within each chapter, a wealth of examples, called Snapshots, highlight the application of concepts to the real world, and a “Creating a Greener World” feature illustrates how various organizations are responding to the growing demands for socially and environmentally responsible ways of doing business. With the theme of this edition being the food industry, we Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com have interviewed many food entrepreneurs and have included their stories in the chapters in the “Michelin 5-Star” and “Recipe for Success” features. In addition, each chapter highlights a failure of management in the “Half-Baked Management” feature. Thoughtful or inspiring quotes within each chapter—some from business leaders, but others from novelists, philosophers, and everyday people—help students expand their thinking about management issues. The combination of established scholarship, new ideas, and real-life applications gives students a taste of the energy, challenge, and adventure inherent in the dynamic field of management. The Cengage Learning staff have worked together with us to provide a textbook that is better than any other at capturing the excitement of organizational management. Leading-Edge Understanding Management: New to the 12th Edition Our primary focus when revising the 12th edition has been to relate management concepts and theories to events in today’s turbulent environment by bringing in present-day issues that reallife managers face. Learning Opportunities The 12th edition includes several innovative pedagogical features to help students understand their own management capabilities and learn what it is like to manage in an organization today. Each chapter begins with a “Know Yourself ” self-assessment questionnaire that directly relates to the theme of the chapter and enables students to see how they respond to situations and challenges typically faced by real-life managers. A second “Know Yourself ” within each chapter provides an additional opportunity for students to understand their management abilities. These short questionnaires provide feedback to the students that compares their responses to those of their classmates and gives students insight into how they would function in the real world of management. “Remember This” bullet-point summaries at the end of each major chapter section enable students to quickly review the key points and concepts covered in that section. The end-of-chapter questions have been carefully revised to encourage critical thinking and application of chapter concepts. The end-of-chapter “Self-Learning” has been enhanced with “Group Learning” and “Action Research” features. These features give students the opportunity to apply concepts while building teamwork skills. Ethical dilemma scenarios, cases for analysis, and MindTap activities help students “think like a manager” and sharpen their diagnostic skills for management problem solving. Chapter Content Within each chapter, many topics have been added or expanded to address the current issues that managers face. Every chapter includes at least one real-life example related to the extraordinary challenges that the COVID-19 pandemic created for managers around the world. The text has also been tightened and sharpened to provide greater focus on the key topics that count the most for management today. The essential elements concerning operations and information technology—subject matter that is frequently covered in other courses—have been combined into an appendix for students who want more information about these topics. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. xv xvi Get Complete eBook Download By email at student.support@hotmail.com Preface Chapter 1 includes a discussion of the leading-edge management competencies that have become so critical to the success of organizations today and will remain so into the future. This introductory chapter discusses the trend toward bossless organizations, introduces the basic functions and skills of management, and gives students an idea of what the manager’s job entails. It also describes the challenges involved in making the leap from being an individual contributor in the organization to becoming a manager and getting work done primarily through the efforts of others. The chapter touches upon the skills and competencies needed to manage organizations effectively, including issues such as managing one’s time, maintaining appropriate control, and building trust and credibility. In addition, the chapter provides solid coverage of the historical development of management and organizations. It begins with an overview of the historical struggle within the field of management to balance the machinery and the humanity of production. The chapter includes sections on managing the technology-driven workplace and managing the people-driven workplace; it ends with a consideration of artificial intelligence (AI) and nudge management as possible answers to the human–machine struggle. Managing the peopledriven workplace includes discussions of the trend toward radical decentralization and using engagement to manage Generation Z and Millennial employees. Chapter 2 contains an updated view of current issues related to the business environment and corporate culture, including a discussion of organizational ecosystems, the growing importance of the international environment, and trends in the sociocultural environment, including shifting social views on issues such as same-sex marriage and alternative lifestyles. The chapter also describes the use of social media analytics for boundary spanning, the growing challenges to large tech companies related to privacy and security issues, and the current widespread concern about how some companies with strong cultures have handled sexual harassment and misconduct. The chapter closes with a discussion of how managers can shape a high-performance culture as an innovative response to a shifting environment. Chapter 3 takes an updated look at the changing international landscape, including the growing clout of China and India and what this development means for managers around the world, including a broader and more complex array of political risks. The chapter looks at the shifting geography of the Fortune Global 500 companies, describes the importance of cultural intelligence (CQ) and a global mind-set, and considers communication challenges, including a discussion of the role of implicit communication. The chapter also discusses the bottom-ofthe-pyramid (BOP) concept, and describes changes in the European Union and the new U.S.– Mexico–Canada Agreement (USMCA). Chapter 4 makes the business case for incorporating ethical values into the organization and con- siders how managers can create an ethical organization using both a values-based approach and a structure-based approach. It includes an updated discussion of the state of ethical management today, the pressures that can contribute to unethical behavior in organizations, the difference between “giving” and “taking” corporate cultures, and criteria that managers can use to resolve ethical dilemmas. The chapter considers corporate social responsibility issues as well, including the recent approach of assessing performance on environmental, social, and governance (ESG) dimensions, the Business Roundtable’s new “Statement on the Purpose of a Corporation,” the growth of the green movement, and the increasing interest in benefit corporations. Chapter 5 delves into the overall planning and goal-setting process, including the importance of aligning goals and plans and the use of strategy maps for aligning goals. The chapter covers some of the benefits and limitations of planning and goal setting, and includes a discussion of using management by means (MBM) as a way to lessen the problem of too much pressure to attain goals. The final section describes planning approaches for use in a turbulent environment, including contingency and scenario planning, the use of stretch goals, and crisis planning. It also focuses on the basics of formulating and implementing strategy, including levels of strategy, the elements of competitive advantage, and Michael E. Porter’s competitive strategies. It includes a section on SWOT analysis, a discussion of the biggest barriers to strategy execution, and the various strategic options for global business. In addition, the chapter updates the Boston Consulting Group (BCG) matrix and diversification strategy, looking at how managers may use unrelated diversification, related diversification, or vertical integration as strategic approaches in shifting environments. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Preface Chapter 6 gives an overview of managerial decision making, including decision-making models, personal decision styles, and a revised and updated discussion of biases that can cloud managers’ judgment and lead to bad decisions. The chapter includes an examination of the use of AI in programmed decision making, a section on quasirationality, an expanded discussion of ambiguity and conflict, and a short discussion of the 5 Whys technique. The final section looks at innovative group decision making, including the concept of evidence-based decision making, ways to avoid groupthink and escalating commitment, and premortems and postmortems (also called after-action reviews). Chapter 7 discusses basic principles of organizing and describes both traditional and contemporary organizational structures in detail. The chapter includes an expanded discussion of outsourcing and the virtual network structure and looks at the essential role of coordination and collaboration in today’s digitally advanced organizations. It provides an overview of the strengths and weaknesses associated with each structural approach, looks at the trend toward decentralization, and highlights experiments with bosslessness. Chapter 8 focuses on the critical role of managing innovation and change in today’s business environment. The chapter includes a revised and expanded discussion of disruptive innovation, including self-disruption. The content on the ambidextrous approach has been enhanced with a discussion of exploration and exploitation in the innovation process. The chapter also describes the bottom-up approach to innovation, ways to encourage corporate intrapreneurship, and the use of innovation contests. The section on collaboration and open innovation has been enhanced with a discussion of the growing use of internal crowdsourcing and in-house ventures. The final sections of the chapter examine the reasons why many people resist change and provide a threestage model for effectively implementing change. Chapter 9 has been thoroughly revised to reflect the shifting role of human resource manage- ment (HRM) in today’s turbulent environment. The chapter includes expanded discussions of aligning HR strategies with the organization’s strategic direction, new approaches to interviewing, new training challenges, and new types of benefits. It also takes a look at the gig economy and the shadow workforce and examines the use of AI and virtual approaches to recruiting and hiring. Further, the chapter has been completely updated to reflect the most recent thinking on today’s complex organizational diversity issues. The chapter includes an updated discussion of demographic and social changes occurring in the domestic and global workforce and how organizations are responding to these shifts. Expanded sections explore the challenges that women and members of underrepresented groups face in organizations, including a deeper discussion of the problem of implicit or unconscious bias and the challenge of reaching the “first rung” of the management ladder. Chapter 10 maintains its solid coverage of the basics of understanding individual behavior, including personality, attitudes, perception, and emotions. In addition, the chapter now includes an expanded section on the value and difficulty of self-awareness, techniques for enhancing selfawareness and recognizing blind spots, and brief discussions of positive and negative attributions, grit, negativity bias, and emotional contagion. The chapter also describes self-management and gives a step-by-step guide to time management. The section on stress management has been enhanced with a discussion of resilience, the distinction between challenge stress and threat stress, and strategies that both individuals and organizations can implement to help people develop resilience and combat the harmful effects of too much stress. Chapter 11 examines contemporary approaches to leadership, including Level 5 leadership, authentic leadership, servant leadership, and interactive leadership. The chapter also discusses the difference between management and leadership, formal versus informal leadership, charismatic and transformational leadership, task versus relationship leadership behaviors, gender differences in leadership, the importance of leaders discovering and honing their strengths, and the crucial role of followers. The section on leadership power describes the differences between hard versus soft power and outlines various interpersonal influence tactics that leaders use. Chapter 12 covers the foundations of motivation and incorporates sections on positive versus negative approaches to motivating employees and the use of intrinsic versus extrinsic rewards. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. xvii xviii Get Complete eBook Download By email at student.support@hotmail.com Preface The chapter also describes using reinforcement for motivation, the job characteristics model, and leading-edge motivational methods such as empowering people to meet their higher-level needs and giving meaning to people’s work through engagement. Chapter 13, which explores the basics of good communication, has been updated to incorporate the use of new communication and collaboration platforms in today’s organizations. The chapter includes discussions of purpose-driven communication, giving feedback, communicating with candor, the importance of listening and asking questions, and the role of nonverbal communication. Sections also focus on communicating to persuade and influence, using internal and external social media, using new communication tools for team collaboration, and the role of personal networks and the grapevine. Chapter 14 takes a fresh look at the contributions that teams make in organizations. It acknowledges that work teams are sometimes ineffective and explores the reasons for their shortcomings, including such problems as free riders and lack of trust. The chapter differentiates between putting together a team and building teamwork, defines the types of teams, and describes the stages of team development. In addition, it examines some of the challenges faced by today’s remote workers and virtual teams, and explores the role of team leadership and technology in these situations. The chapter includes a discussion of the growing use of self-managed and agile teams, describing the characteristics of such teams. It also considers how factors such as team diversity, member roles, norms, and team cohesiveness influence effectiveness. Finally, the section on negotiation and managing conflict offers an explanation of task versus relationship conflict and suggests different ways of expressing and managing conflict. Chapter 15 provides an overview of financial and quality control, including the importance of control, the feedback control model, use of the balanced scorecard, and total quality management techniques such as Six Sigma, quality partnering, benchmarking, and kaizen. The chapter explores the difference between decentralized and hierarchical control, the dilemma of using algorithmic control, the use of zero-based budgeting, and basic concepts of budgetary and financial control. In addition to the topics listed previously, this text integrates coverage of the Internet, social media, and new technology into the various topics covered in each and every chapter. We have also incorporated management responses to the challenges brought about by the COVID-19 pandemic in every chapter of this revision. Organization The chapter sequence in Understanding Management is organized around the management functions of planning, organizing, leading, and controlling. These four functions effectively encompass both management research and the characteristics of the manager’s job. Part 1 introduces the world of management, including the nature of management, issues related to today’s chaotic environment, historical perspectives on management, and the technologydriven workplace. Part 2 examines the environments of management and organizations. This section includes material on the business environment and corporate culture, the global environment, ethics and social responsibility, and the environment for small businesses and entrepreneurship. Part 3 presents three chapters on planning, including organizational goal setting and planning, strategy formulation and execution, and the decision-making process. Part 4 focuses on organizing processes. These chapters describe dimensions of structural design, the design alternatives that managers can use to achieve strategic objectives, structural designs for promoting innovation and change, the design and use of the human resource function, and the significance of the approach to managing diverse employees for the organizing function. Part 5 is devoted to leadership. This section begins with a chapter on understanding individ- ual behavior, including self-awareness and self-understanding. This exploration paves the way for subsequent discussions of leadership, motivation of employees, communication, and team management. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Preface Part 6 describes the controlling function of management, including TQM’s basic principles, the design of control systems, and the difference between hierarchical and decentralized control. Innovative Text Features A major goal of this book is to offer better ways of using the textbook medium to convey management knowledge to the reader. To this end, the book includes several innovative features that draw students in and help them contemplate, absorb, and comprehend management concepts. Cengage Learning has brought together a team of experts to create and coordinate color photographs, beautiful artwork, and supplemental materials for the best management textbook and package on the market. Chapter Outline and Objectives. Each chapter begins with a clear statement of its learning objectives and an outline of its contents. These signposts provide an overview of what is to come and can be used by students to guide their study and test their understanding and retention of important points. Take a Moment: Know Yourself Self-Assessments. At the beginning of each chapter, a selfassessment questionnaire grabs students’ attention immediately by giving them a chance to actively participate in the chapter content. Students answer personal questions related to the topic and score the assessment based on their answers. These self-assessments provide insight into what to expect and how students might perform in the world of the new manager. An additional “Know Yourself ” feature strategically located within each chapter invites students to “Take a Moment” to respond to another self-assessment questionnaire that relates to the concepts being discussed. Boxed Inserts. Current topics and exploratory material are covered in a range of boxed inserts. Students can learn more about concepts in the chapter by reading the following boxes: Creating a Greener World, Michelin 5-Star, Made from Scratch, Half-Baked Management, Spotlight on Skills, Recipe for Success, and Sunny Side Up. Concept Connection Photo Essays. A key feature of the book is the use of photographs accom- panied by detailed photo essay captions that enhance learning. Each caption highlights and illustrates one or more specific concepts from the text to reinforce student understanding of the concepts; collectively, they also convey the vividness, immediacy, and concreteness of management events in today’s business world. Snapshot Examples. Every chapter contains numerous “Snapshot” examples of management incidents. These features are placed at strategic points in the chapter and are designed to illustrate the application of concepts to specific companies. The in-text examples—indicated by red lettering and an icon in the margin—include well-known U.S. and international organizations, including Netflix, Twitter, Siemens Gamesa, Airbus, TikTok, Didi Chuxing, Facebook, Nike, Boeing, Snapchat, Xiaomi, Volkswagen, Uber, Goya Foods, Haier, Synchrony Financial, Publix, Instagram, Zara, Toyota, Academy of Motion Picture Arts and Sciences, Popeye’s, Huawei, Google and Alphabet, Amazon, National Foods Limited, General Electric (GE), and Unilever, as well as lesser-known companies and not-for-profit organizations, including Girl Scouts of the USA, SCA (Svenska Cellulosa Aktiebolaget), Dialpad, Second Harvest Food Bank, Plante Moran, Taulia, Earl’s Kitchen 1 Bar, Simple Green Smoothies, Buurtzorg, Junior League, Adient Lerma, Sadler’s Wells Theatre, Sweetgreen, Godrej & Boyce, Carilion Clinic, and the San Diego Zoo. The Snapshots put students in touch with the real world of organizations so that they can appreciate the value of management concepts. Exhibits. Several exhibits have been added or revised in this edition to enhance student understanding. Many aspects of management are research based, and some concepts tend to be abstract and theoretical. The many exhibits throughout this book enhance students’ awareness and understanding of these concepts. These exhibits consolidate key points, indicate relationships among concepts, and visually illustrate concepts. They also make effective use of color to enhance their imagery and appeal. Remember This. At the end of each major section of a chapter is a “Remember This” bullet- point summary of the key concepts, ideas, and terms discussed in that section. This feature gives Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. xix xx Get Complete eBook Download By email at student.support@hotmail.com Preface students an easy way to review the salient points covered in the chapter. The short summaries also include one or more of the examples from the section to remind students how the concepts were applied in a real organization. Glossaries. Learning the vocabulary of management is essential to understanding contemporary management. This process is facilitated in three ways in this book. First, key concepts are boldfaced and completely defined where they first appear in the text. Second, brief definitions are set out at the end of each major section in the “Remember This” lists for easy review and follow-up. Third, flashcards are found in the MindTap “Study It” folder. Discussion Questions. Each chapter closes with discussion questions that will enable students to check their understanding of key issues, to think beyond basic concepts, and to determine areas that require further study. Practice Your Skills Exercises. End-of-chapter exercises called “Practice Your Skills: SelfLearning” and “Practice Your Skills: Ethical Dilemma” provide self-tests for students and opportunities to experience management issues in a personal way. These exercises take the form of questionnaires, scenarios, and activities. An “In-Class/Online Application” has been added to each “Self-Learning” in this edition. Small Group Breakout Exercises. “Group Learning” and “Action Research” exercises at the end of each chapter give students a chance to develop both team and analytical skills. Completing the small-group activities will help students learn to use the resources provided by others in the group, to pool information, and to develop a successful outcome together. The “Group Learning” and “Action Research” provide experiential learning that leads to deeper understanding and application of chapter concepts. Case for Critical Analysis. Also appearing at the end of each chapter is a brief but substantive case that offers an opportunity for student analysis and class discussion. These cases are based on real management problems and dilemmas, but the identities of companies and managers have been disguised. They allow students to sharpen their diagnostic skills for management problem solving. MindTap’s Innovative Digital Features Today’s leading digital platform, MindTap, gives you complete control of your course—equipping you to craft unique learning experiences that challenge students, build confidence, and elevate performance. Use MindTap as-is or customize it to meet your specific needs. You can even integrate it easily into your institution’s Learning Management System (LMS). A MindTap presents complex concepts using a blend of engaging narrative and media assets clearly linked to assessments. So, students can start applying concepts to real-world situations from the beginning of your course with content that progresses from understanding core concepts to critical thinking and, ultimately, application. Product Features. MindTap’s outcome-based learning design propels students from memoriza- tion to mastery. It’s the only platform today that gives you complete ownership of your course. With MindTap you can challenge every student, build confidence, and empower today’s learners to be unstoppable. Anchor Learning with Improved Learning Path Design. MindTap helps students focus by dividing the Learning Path into groups of bite-size activities that are anchored to a single concept. Access Everything You Need in One Place. Cut down on prep with preloaded, organized course materials in MindTap. Teach more efficiently with interactive multimedia, assignments, quizzes, and focused resources all on one screen. Control Your Course, Your Content. Only MindTap gives you complete control of your course. You have the flexibility to reorder textbook chapters, add your own notes and embed a variety of Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Preface content, including OER. Personalize course content to your students’ needs by editing question text or answer choices. They can even read your notes, add their own, and highlight key text to aid their progress. Count on Our Dedicated Team, Whenever You Need Them. MindTap is not simply a comprehensive tool—it’s a network of support from a personalized team eager to further your success. We’re ready to help—from setting up your course to tailoring MindTap resources to meet your specific objectives. You’ll be ready to make an impact from day one. And, we’ll be right here to help you and your students throughout the semester—and beyond. MindTap Table of Contents MindTap brings together quality learning and convenience through seamless, LMS integrated access to a curated set learning tools designed intentionally for the Principles of Management learner. Each MindTap follows a “Learn It, Apply It, Study It” structure that guides students through bite-sized learning exercises, followed by authentic scenario-based application opportunities and then gives them the necessary tools to prepare for quizzes and exams. Why Does [This Topic] Matter to Me? Each part of the course is introduced in MindTap with a “Why Does [This Topic] Matter” to help showcase relevance and applicability of the material students are about to learn—in an engaging, fun format. Self-Assessments. Online questionnaires ask students to answer questions related to the topic and automatically scores the assessment and provides feedback based on their answers. These self-assessments provide insight into what to expect and how students might perform in the world of the new management. Chapter-Level eBook. Dynamic eBook brings the value, concepts, and applications of the printed text to life. Students open an active learning experience as each chapter provides opportunities to interact with content using the approach that’s best for the individual learner. Learn It Activities. New “Learn It” modules aligned to each learning objective and are designed to help students learn the basics of theories and concepts presented in a chapter through digestible summaries and randomized questions that help check their comprehension of the chapter material. Apply It. “Apply It” Chapter Assignments and Case Activities bridge the understanding of concepts with their real-world applications in the practice of management. Study It. The “Study It” module for each chapter includes Practice Tests powered by A1 Test Prep, a student-powered practice exam tool that allows them to tailor practice tests to fit their needs, and receive immediate feedback and links back to the material they need to review. The “Study It” module also contains digital flashcards to help students practice key terminology and a student-facing version of the PowerPoint slides that accompany the text. Additional Resources. ● ● Concept Clips: These short concept videos bring to life concepts from the text. On the Job Videos: These videos enhance the learning experience by giving students the chance to hear from real-world business leaders so they can see the direct application of the management theories they have learned. You Make the Decision. Part level You Make the Decision mini-simulation activities build critical thinking and decision-making skills by challenging students to use what they know about concepts and theories in the context of a scenario as it unfolds. Throughout the scenario, the student would be provided with information and subsequently faced with decisions. The scenario can change dynamically based on the decisions the students make throughout the short simulation, resulting in different end points that showcase the consequences of the decisions made along the way. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. xxi xxii Get Complete eBook Download By email at student.support@hotmail.com Preface Of Special Interest to Instructors Instructors will find a number of valuable resources available on our Cengage Instructor Center, accessed through your instructor account (www.cengage.com). These include the following: Instructor’s Manual. Designed to provide support for instructors new to the course, as well as innovative materials for experienced professors, the Instructor’s Manual includes activities and assessments for each chapter and their correlation to specific learning objectives, an outline, key terms with definitions, a chapter summary, and ideas for engaging with students—such as discussion questions, ice breakers, case studies, and social learning activities that may be conducted in an on-ground, hybrid, or online modality. Cengage Learning Testing Powered by Cognero. Cognero is a flexible online system that allows you to author, edit, and manage test bank content from multiple Cengage Learning solutions; create multiple test versions in an instant; and deliver tests from your LMS, your classroom, or wherever you want. PowerPoint Lecture Presentation. The PowerPoint Lecture Presentations provide ample opportunities for generating classroom discussion and interaction. They offer ready-to-use, visual outlines of each chapter, which may be easily customized for your lectures. Guide to Teaching Online. This guide presents technological and pedagogical considerations and suggestions for teaching the management course when you can’t be in the same room with students. Transition Guide. This guide highlights all of the changes in the text and in the digital offerings from the previous edition to this edition. Educator Guide. This guide walks you through what the unique activities are in the MindTap, where you’ll find them, and how they’re built for easier curriculum integration. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com About the Authors Richard L. Daft, Ph.D., is the Brownlee O. Currey, Jr., Professor in the Owen Graduate School of Management at Vanderbilt University. Professor Daft specializes in the study of organization theory and leadership; he is a fellow of the Academy of Management and has served on the editorial boards of the Academy of Management Journal, Administrative Science Quarterly, and Journal of Management Education. He was the associate editor-in-chief of Organization Science and served for three years as associate editor of Administrative Science Quarterly. Professor Daft has authored or co-authored 14 books, including The Leadership Experience (Cengage/South-Western, 2018), Organization Theory and Design (Cengage, 2021), The Executive and the Elephant: A Leader’s Guide for Building Inner Excellence ( Jossey-Bass, 2010), and Understanding Management (with Dorothy Marcic; Cengage, 2020). He has also written dozens of scholarly articles, papers, and chapters in other books. His work has been published in Organizational Dynamics, Administrative Science Quarterly, Academy of Management Journal, Academy of Management Review, Strategic Management Journal, Journal of Management, Accounting Organizations and Society, Management Science, MIS Quarterly, California Management Review, and Organizational Behavior Teaching Review. In addition, Professor Daft is an active teacher and consultant. He has taught management, leadership, organizational change, organizational theory, and organizational behavior. Professor Daft has served as associate dean, produced for-profit theatrical productions, and helped manage a start-up enterprise. He has been involved in management development and consulting for many companies and government organizations, including the National Academy of Science, Aluminum Bahrain (Alba), Oak Ridge National Laboratory, Cardinal Healthcare, American Banking Association, AutoZone, Aegis Technology, Bridgestone, Bell Canada, Allstate Insurance, Vulcan Materials, the National Transportation Research Board, the Tennessee Valley Authority (TVA), State Farm Insurance, Tenneco, the U.S. Air Force, the U.S. Army, Eli Lilly, Central Parking System, Entergy Sales and Service, Bristol-Myers Squibb, First American National Bank, and the Vanderbilt University Medical Center. Courtesy of the Author Dr. Dorothy Marcic is a professor, writer, and playwright, whose productions have played in 92 cities, including more than nine years of her off-Broadway musical, SISTAS, which has also aired on BET-TV. She is an adjunct professor at Columbia University and a former professor at Vanderbilt University in Nashville. She was a Fulbright Scholar at the University of Economics-Prague, has three masters (including creative writing) and a doctorate, and is the author of 18 books, including the best-selling Understanding Management and RESPECT: Women and Popular Music. In 2003, Dorothy left full-time academia for playwriting. She turned her RESPECT book into a musical (also called This One’s for the Girls), tracing women’s development through Top-40 music with contentanalysis research of how women are depicted in popular music lyrics. Having been a delegate for 12 years to the United Nations Commission on the Status of Women, Dorothy recently wrote and produced a UN event for 1,500 people in the General Assembly Hall about ending harmful practices against girls and women. Michael Bolton and Ashley Judd were on the program. She has also been a consultant/speaker to such organizations as Hallmark, Ford Motor Company, HewlettPackard, the National Nursing Association, the Governor/Cabinet of North Dakota, the U.S. State Department, and USAA Insurance. Her recent project is a podcast, based on the true crime book, With One Shot: Family Murder and the Search for Justice, about the murder of her uncle. The Wondery podcast is called MANslaughter and garnered nearly 600,000 downloads in its first week. She is the writer/story creator of three award-winning short films, Great Expectations, Spillings, and Last Resort. Dorothy is originally from Wisconsin and has also lived in Minneapolis, Phoenix, Pittsburgh, Prague, and now New York City. Dorothy started her career in the arts as a production assistant on the TV program, Mister Rogers’ Neighborhood while in graduate school. She has appeared on C-SPAN, CMT, and Bravo Network and is on IMDB. Francois Bonneau Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. xxiii Get Complete eBook Download By email at student.support@hotmail.com Acknowledgments A gratifying experience for us was working with the team of dedicated professionals at Cengage Group, who all are committed to the vision of producing the best management educational products ever. We are grateful to Joe Sabatino, product director, Heather Mooney and Mike Worls, senior product managers, whose support, interest, and creative ideas kept this title’s spirit alive. Julia Chase, senior content manager and Courtney Wolstoncroft, learning designer, provided encouragement, excellent suggestions and feedback, and superb project coordination that helped the team meet a demanding and sometimes arduous schedule. Bethany Bourgeois and Chris Doughman, art directors, contributed their design vision and deserve a special thank-you for their layout expertise and commitment to producing an attractive, high-quality textbook. Thanks also to, Beth Ross digital delivery lead, product assistants Nick Perez and Adam Graber, marketing manager, John Carey, and IP analyst Diane Garrity. At Vanderbilt, Dick Daft wants to extend special appreciation to my assistant, Linda Roberts. Linda provided excellent support and assistance on a variety of projects that gave me time to write. I also want to acknowledge an intellectual debt to my colleagues, Bruce Barry, Ranga Ramanujam, Bart Victor, and Tim Vogus. Thanks also to Dean Eric Johnson and Associate Dean Richard Willis, who have supported my writing projects and maintained a positive scholarly atmosphere at the school. At Columbia, Dorothy Marcic wants to send appreciations to Victoria Marsick, Lyle Yorks, Yana Zeltzer, Marjorie Orcel-Cozart, Marie Volpe, Peter Neaman, and Cindy Lin, who have all provided me with immense support and collegiality. Another group of people who made a major contribution to this textbook are the management experts who suggested content updates to this edition: David Cooper Limestone College Kelly Mollica University of Memphis Jerrold Van Winter Hood College Angie Davis Drury University Behnam Nakhai Millersville University Mike Wade Moraine Valley College Carol Decker Tennessee Wesleyan College Michael Scharff Limestone College Lynn Guhde Oglethorpe University Michael Shaner Saint Louis University Yingchun Wang University of Houston–Downtown Stephen R. Hiatt Catawba College Ted Teweles California State UniversityLong Beach Keith Keppley Limestone College Kim Whitney Pasco-Hernando Community College We would also like to continue to acknowledge those reviewers who have contributed comments, suggestions, and feedback on previous editions: xxiv David C. Adams Manhattanville College David Arseneau Eastern Illinois University David Alexander Christian Brothers University Reginald L. Audibert California State University— Long Beach Erin M. Alexander University of Houston–Clear Lake Hal Babson Columbus State Community College Reuel Barksdale Columbus State Community College Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Acknowledgments Gloria Bemben Finger Lakes Community College Byron L. David City College of New York Alexandra Giesler Augsburg College Pat Bernson County College of Morris V. J. Daviero Pasco Hernando Community College Yezdi H. Godiwalla University of Wisconsin–Whitewater Andy Bertsch Minot State University H. Kristl Davison University of Mississippi Carol R. Graham Western Kentucky University Art Bethke Northeast Louisiana University Robert DeDominic Montana Tech Gary Greene Manatee Community College Mark DeHainaut California University of Pennsylvania James Halloran Wesleyan College Frank Bosco Marshall University Burrell A. Brown California University of Pennsylvania Paula Buchanan Jacksonville State University Deb Buerkley Southwest Minnesota State University Richard De Luca William Paterson University Joe J. Eassa, Jr. Palm Beach Atlantic University John C. Edwards East Carolina University Ken Harris Indiana University Southeast Kathy Hastings Greenville Technical College Paul Hayes Coastal Carolina Community College Mary Ann Edwards College of Mount St. Joseph Dennis Heaton Maharishi University of Management, Iowa Paul Ewell Bridgewater College Stephen R. Hiatt Catawba College Diane Caggiano Fitchburg State College Mary M. Fanning College of Notre Dame of Maryland Jeffrey D. Hines Davenport College Douglas E. Cathon St. Augustine’s College Janice M. Feldbauer Austin Community College Peggy Cerrito Augsburg College Merideth Ferguson Baylor University Camille Chapman Greenville Technical College Daryl Fortin Upper Iowa University James N. Holly University of Wisconsin– Green Bay Bruce Charnov Hofstra University Karen Fritz Bridgewater College Genelle Jacobson Ridgewater College Jim Ciminskie Bay de Noc Community College Michael P. Gagnon New Hampshire Community Technical College C. Joy Jones Ohio Valley College Gloria Cockerell Collin College Richard H. Gayor Antelope Valley College Jody Jones Oklahoma Christian University Dan Connaughton University of Florida Dan Geeding Xavier University, Ohio Kathleen Jones University of North Dakota Bruce Conwers Kaskaskia College James Genseal Joliet Junior College Sheryl Kae Lynchburg College Jack Cox Amberton University Peter Gibson Becker College Jordan J. Kaplan Long Island University Thomas Butte Humboldt State University Peter Bycio Xavier University, Ohio Bob Hoerber Westminster College Betty Hoge Bridgewater College Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. xxv xxvi Get Complete eBook Download By email at student.support@hotmail.com Acknowledgments J. Michael Keenan Western Michigan University Daniel B. Marin Louisiana State University Lori A. Peterson Augsburg College Jerry Kinard Western Carolina University Michael Market Jacksonville State University Clifton D. Petty Drury College Renee Nelms King Eastern Illinois University Joan McBee Southern Oregon University James I. Phillips Northeastern State University Gloria Komer Stark State College Wade McCutcheon East Texas Baptist College Michael Provitera Barry University Paula C. Kougl Western Oregon University James C. McElroy Iowa State University Linda Putchinski University of Central Florida Cynthia Krom Mount St. Mary College Tom D. McFarland Tusculum College Abe Qastin Lakeland College Sal Kukalis California State University– Long Beach Dennis W. Meyers Texas State Technical College Kenneth Radig Medaille College Alan N. Miller University of Nevada–Las Vegas Gerald D. Ramsey Indiana University Southeast Mukta Kulkarni University of Texas–San Antonio Donna LaGanga Tunxis Community College William B. Lamb Millsaps College Ruth D. Lapsley Lewis-Clark State College Robert E. Ledman Morehouse College George Lehma Bluffton College Joyce LeMay Bethel University Cynthia Lengnick-Hall University of Texas–San Antonio Janet C. Luke Georgia Baptist College of Nursing Jenna Lundburg Ithaca College Walter J. MacMillan Oral Roberts University Iraj Mahdavi National University Myrna P. Mandell California State University, Northridge Irene A. Miller Southern Illinois University Tom Miller Concordia University W. J. Mitchell Bladen Community College James L. Moseley Wayne State University Micah Mukabi Essex County College David W. Murphy Madisonville Community College Nora Nurre Upper Iowa University Ross O’Brien Dallas Baptist University Tomas J. Ogazon St. Thomas University Allen Oghenejbo Mills College John Okpara Bloomsburg University Linda Overstreet Hillsborough Community College Ken Peterson Metropolitan State University Holly Caldwell Ratwani Bridgewater College Barbara Redmond Briar Cliff College William Reisel St. John’s University–New York Terry L. Riddle Central Virginia Community College Walter F. Rohrs Wagner College Meir Russ University of Wisconsin– Green Bay Marcy Satterwhite Lake Land College Don Schreiber Baylor University Kilmon Shin Ferris State University Daniel G. Spencer University of Kansas Gary Spokes Pace University M. Sprencz David N. Meyers College Shanths Srinivas California State Polytechnic University, Pomona Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Acknowledgments Barbara Stasek Pasco Hernando Community College Jeffrey Stauffer Ventura College William A. Stower Seton Hall University Mary Studer Southwestern Michigan College James Swenson Moorhead State University, Minnesota Thomas Sy California State University– Long Beach Irwin Talbot St. Peter’s College Andrew Timothy Lourdes College Frank G. Titlow St. Petersburg Junior College John Todd University of Arkansas Kevin Wayne Rivier College Kevin A. Van Dewark Humphreys College Mark Weber University of Minnesota Linn Van Dyne Michigan State University Emilia S. Westney Texas Tech University Philip Varca University of Wyoming Stan Williamson Northeast Louisiana University Dennis L. Varin Southern Oregon University Gina Vega Merrimack College George S. Vozikis University of Tulsa Noemy Wachtel Kean University Peter Wachtel Kean University Alla L. Wilson University of Wisconsin– Green Bay Ignatius Yacomb Loma Linda University Imad Jim Zbib Ramapo College of New Jersey Vic Zimmerman Pima Community College Bruce C. Walker Northeast Louisiana University I’d like to pay special tribute to my longtime editorial associate, Pat Lane. I can’t imagine how I would ever complete such a comprehensive revision on my own. Pat provided truly outstanding help throughout every step of writing this edition of Understanding Management. She skillfully drafted materials for a wide range of chapter topics, features, and cases; researched topics when new sources were lacking; and did an absolutely superb job with the copyedited manuscript and page proofs. Her commitment to this text enabled us to achieve our dream for its excellence. I also express my gratitude to DeeGee Lester for drafting material for the “Creating a Greener World” features and for several of the cases in this edition. Finally, I want to acknowledge the love and support from my daughters—Danielle, Amy, Roxanne, Solange, and Elizabeth—who make my life special during our precious time together. Thanks also to B. J., Kaitlyn, Kaci, Matthew, Nelson, Samantha, Phoenix, Roman, Reed, and Brielle for their warmth and smiles that brighten my life during our times together. Richard L. Daft Nashville, Tennessee Writing, though a solitary endeavor, depends on a community of relationships, both professional and personal. My colleagues at Columbia University, mentioned above, are an intellectual life-blood for me, while a host of friends nourish me emotionally and intellectually. They are scattered from New York City to Nashville, to California, Minnesota, Wisconsin, and all over the globe. Finally, I just give great gratitude to my daughters, who have become outstanding human beings, both personally and professionally, and have given me grandchildren of great energy, curiosity, and enthusiasm, who provide me with endless love and fascination. Dorothy Marcic New York City Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. xxvii Get Complete eBook Download By email at student.support@hotmail.com Part 1 Chapter 1 Chapter Outline Leading Edge Management Management Competencies for Today’s World Leading-Edge Management Competencies The Trend Toward Bosslessness The Basic Functions of Management Organizational Performance Management Skills When Skills Fail Challenges Facing New Managers Learning Objectives What Is a Manager’s Job Really Like? Manager Activities Manager Roles Managing in Nonprofit Organizations The Historical Struggle: The Things of Production Versus the Humanity of Production Classical Perspective Scientific Management Bureaucratic Organizations Administrative Principles Management Science Humanistic Perspective Early Advocates Human Relations Movement Human Resources Perspective Behavioral Sciences Approach Management Thinking into the Future Managing the New Technology-Driven Workplace Managing the New People-Driven Workplace The Historical Struggle: Is Artificial Intelligence the Answer? After studying this chapter, you should be able to: 1.1 1.2 1.3 Explain five management competencies and the trend toward bosslessness in today’s world. 1.4 1.5 1.6 1.7 Describe technical, human, and conceptual skills and their relevance for managers. 1.8 Describe the current uses of the management science approach and the major components of the humanistic management perspective. 1.9 Describe the management changes brought about by a technology-driven workplace and those that facilitate a people-driven workplace. Define the four management functions and the type of management activity associated with each. Explain the difference between efficiency and effectiveness, as well as their importance for organizational performance. Define the management types and roles that managers perform in organizations. Explain the unique characteristics of the manager’s role in nonprofit organizations. Summarize the historical struggle between managing the “things of production” and the “humanity of production.” 1.10 Explain how artificial intelligence may help bridge the historical struggle between managing the “things of production” and the “humanity of production.” 2 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Take a Moment: Know Yourself #Ready for Management? Manager Achievement Welcome to the world of management. Are you ready for it? This questionnaire will help you see whether your priorities align with the demands placed on today’s managers. Instructions: Rate each of the following items based on your orientation toward personal achievement. Read each item and, based on how you feel right now, check either Mostly True or Mostly False. Mostly True Mostly False 1. I enjoy the feeling I get from mastering a new skill. 2. Working alone is typically better than working in a group. 3. I like the feeling I get from winning. 4. I like to develop my skills to a high level. 5. I rarely depend on anyone else to get things done. 6. I am frequently the most valuable contributor to a team. 7. I like competitive situations. 8. To get ahead, it is important to be viewed as a winner. Before reading this chapter, please circle either “Mostly True” or “Mostly False” for each of the five questions below. 1 I am good at multi-tasking. Mostly True Mostly False [see page 18] 2 I’d be a good manager because I enjoy telling people what to do. Mostly True Mostly False [see page 5] 3 I get easily distracted if I have frequent interruptions in my work. Mostly True Mostly False [see page 19] 4 I like to be systematic when solving problems. Mostly True Mostly False [see page 27] 5 I have a keen awareness of other people’s needs. Mostly True Mostly False [see page 35] Scoring and Interpretation: Give yourself one point for each “Mostly True” answer. In this case, a low score is better. A high score means a focus on personal achievement separate from others, which is ideal for a specialist or individual contributor. However, a manager is a generalist who gets things done through other people. Spending time building relationships is key. A desire to be an individual winner may cause you to compete with your people, rather than to develop their skills. You would not succeed as a lone achiever who does not facilitate and coordinate others, which is the primary job of a manager. If you checked 3 or fewer as “Mostly True” answers, your basic orientation is good. If you scored 6 or higher, your focus may be on being an individual winner. You will want to shift your perspective to become an excellent manager. 3 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management “In the late 1980s, it seemed inconceivable that Bon Jovi would last five years,” wrote one music historian. Yet more than three decades after the rock group was founded, it is still one of the world’s top-selling bands. Bon Jovi has been inducted into the Rock and Roll Hall of Fame, and Jon Bon Jovi regularly shows up on Forbes list of “America’s Wealthiest Celebrities.” The band has been so successful partly because its lead singer and namesake is a consummate manager. For example, as the group prepared for the launch of a recent tour, Jon Bon Jovi was hidden away in the arena for days, managing a tightly coordinated operation similar to setting up or readjusting a production line for a manufacturing business. Yet Bon Jovi is also performing other management activities throughout the year—planning and setting goals for the future, organizing tasks and assigning responsibilities, influencing and motivating band members and others, monitoring operations and finances, and networking inside and outside the organization. “Jon is a businessman,” said former comanager David Munns. “He knows how to have a greatquality show, but he also knows how to be efficient with money.”1 Being efficient with money is one of the many management skills Bon Jovi also applies as chairman of the JBJ Soul Foundation, a nonprofit he formed in 2006 to combat hunger and homelessness. At the JBJ Soul Kitchen restaurants in New Jersey, people can either make a minimum donation or perform work at the restaurant in exchange for a meal. Bon Jovi implemented procedures to make sure no one knows which diners are paying guests and which are working for their meal. One regular says Bon Jovi and his wife run the place like it’s their own kitchen and pitch in to do whatever needs to be done when they come to the restaurant. “They’re like everybody else, except with better hair,” he said. During the COVID-19 pandemic in 2020, the restaurants shifted to carry out orders only for people in need, and Bon Jovi’s help was needed even more because of the limited number of volunteers. JBJ Soul Kitchen posted a photo on Instagram of Jon washing dishes, with the caption, “If you can’t do what you do . . . do what you can!”2 Good managers are needed in all types of both business and nonprofit organizations. The nature of management is to motivate and coordinate others to cope with diverse and farreaching challenges. Managers set up the systems and conditions that help other people perform well. But managing is not easy, and many new managers are surprised by the quantity, variety, and scope of difficulties they encounter. Management missteps can damage an organization. For example, Travis Kalanick, co-founder and former CEO of Uber, helped the company expand rapidly by applying his bold and competitive management style. However, the aggressive and combative corporate culture that this style instilled ultimately hurt Uber. Deception of government authorities and defiance of regulations around the world, accusations of theft of a rival’s technology, and charges of discrimination and sexual harassment damaged Uber’s public reputation. Inside the company, workers and managers were fighting against one another rather than working together for the good of the organization. Uber began losing significant market share to competitors in the United States and ceased operating in several countries. In 2018, Dara Khosrowshahi replaced Kalanick as CEO, with one of his primary goals to build a more collaborative culture and repair Uber’s reputation.3 Khosrowshahi faces a tough challenge in maintaining Uber’s bold competitiveness while also instilling positive values of caring for and collaborating with others. The field of management is undergoing a transformation that asks managers to do more with less, to engage employees’ hearts and minds as well as their physical energy, to see change rather than stability as natural, and to inspire a vision and cultural values that allow people to create a truly collaborative and productive workplace. This textbook introduces and explains the process of management and the changing ways of thinking about the world that are critical for managers. Good management matters, as substantiated by a McKinsey Global Institute study. In collaboration with the Centre for Economic Performance at the London School of Economics and partners from Stanford and Harvard Universities, McKinsey collected data over a dozen years from roughly 14,000 organizations in more than 30 countries. The data show that wellmanaged companies have higher productivity, higher market value, and greater growth, as well Paul Zimmerman/WireImage/Getty Images 4 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management as a superior ability to survive difficult conditions.4 Companies such as Apple, Amazon, and Microsoft amply demonstrate that good management creates and sustains good organizations.5 By reviewing the actions of some successful and not-so-successful managers, you can learn the fundamentals of management. Later in this chapter, you will recognize some of the skills that managers use to keep organizations on track, and you will begin to understand how managers can achieve astonishing results through people. By the end of this book, you will understand the fundamental management skills for planning, organizing, leading, and controlling a department or an entire organization. 1-1 Management Competencies for Today’s World Management is the attainment of organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational resources, as Jon Bon Jovi does for his rock band and as chairman of the Jon Bon Jovi Soul Foundation. You will learn more about these four basic management functions later in this chapter. 1-1a Leading-Edge Management Competencies Certain elements of management are timeless, but environmental shifts also influence the practice of management. In recent years, rapid environmental changes have caused a fundamental transformation in what is required of effective managers. Technological advances such as social media and mobile apps, the move to a knowledge/information-based economy, the rise of artificial intelligence, global market forces, the growing threat of cybercrime, and shifting employee and customer expectations have led to a decline in organizational hierarchies and more empowered workers, which calls for a new approach to management that may be quite different from managing in the past.6 Exhibit 1.1 shows the shift from the traditional management approach to the new management competencies that are essential in today’s environment. Instead of being a controller, today’s effective manager is an enabler who helps people do and be their best.7 Managers shape the cultures, systems, and conditions of work and then give people the freedom to move the organization in the direction it needs to go. They help people get what they need, remove obstacles, provide learning opportunities, and offer feedback, coaching, and career guidance. Instead of “management by keeping tabs,” they employ an empowering leadership style. Much work is done in teams rather than by individuals, so team leadership skills are crucial. Managing relationships based on authentic conversation and collaboration is essential for successful outcomes. “I was once a command-andcontrol guy, but the environment’s different today. I think now it’s a question of making people feel they’re making a contribution.” —Joseph J. Plumeri, Former Chairman and CEO of Willis Group Holdings Exhibit 1.1 Management Competencies for Today’s World From Traditional Approach To New Competencies Management Principle Overseeing Work From controller To enabler Accomplishing Tasks From supervising individuals To leading teams Managing Relationships From conflict and competition To collaboration, including use of social media Leading From autocratic To empowering, sometimes bossless Designing From maintaining stability To mobilizing for change Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 5 Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management Also, as shown in Exhibit 1.1, today’s best managers are “future-facing.” That is, they design the organization and culture to anticipate threats and opportunities from the environment, challenge the status quo, and promote creativity, learning, adaptation, and innovation. Industries, technologies, economies, governments, and societies are in constant flux, and managers are responsible for helping their organizations navigate through the unpredictable with flexibility and innovation.8 The COVID-19 pandemic challenged many parts of the economy, with countless businesses going under. Restaurants were one segment hit especially hard. Hallie Meyer used her business acumen and creativity to reorganize the brand-new Caffè Panna shortly after it was forced to close down. Michelin 5-Star Caffè Panna At age 26, Hallie Meyer opened her gelateria-influenced Caffè Panna just six months before the pandemic lockdown in New York City. Before the pandemic, Caffè Panna was serving their gelato-inspired ice cream in pints, in sundaes, in affogatos, and in scoops while patrons also sat at tables sipping coffee and eating pastries. It was heady times with multiple newspaper stories and a growing loyal customer base, who, like Meyer, were obsessed with ice cream, especially the frequent changing of selections and the freshness. “If you eat it today, it was made today,“ Meyer says. “We do our flavors weekly, if not daily, and we make everything in house.” Such devotion to quality was instilled in Meyer when she started, in eighth grade, cooking dinners for her family—a practice she savored. Then came the lockdown. On March 16, 2020, all restaurants were closed except for take-out and delivery. Almost overnight, cafés had to adapt to completely new requirements, with no end in sight, and over 4,000 eating establishments in New York City ending up closing in the coming months. But Hallie Meyer knows how to pivot. She shuttered the café for two weeks to figure out what to do. There was no way to keep the previous 25 staff members, but could she manage to employ some of them? It was more important for certain team-members’ well-being, and she really wanted to get ice cream to her loyal customers. At first, with two other staff, she opened a retail window one day a week selling pints, which had to be pre-ordered within a preset time slot. Then they added delivery with the pre-orders. When that went well, she began offering walkup ordering because some people were starting to go outside again. By now she is up to 19 employees, and the business is very streamlined. Hallie sees the pandemic as an opportunity for businesses to try new things, because no one would get angry if you changed it next week. Well, almost no one. . . . Currently there is no front-of-the-house waitstaff to take orders, service, and clean up, so staffing costs are less. Employees take orders at the window and fulfill them on the spot, as opposed to guiding guests through a line, tasting ice creams (something that is hard on all JEENAH MOON/The New York Times/Redux 6 ice cream shops and that the pandemic provides a good excuse out of!). Add that to the efficiencies she’s made in ice cream production, and you have higher productivity with more focus on product volume. The store used to be open seven days a week, 12 hours a day, doing scoops, coffee bar, and pastries. Now they are open four days a week and focus on pints. Because they have increased other channels such as nationwide shipping and wholesale, only four retail days are needed to make the bottom line work. In fewer hours with less labor, the café makes more money in retail. Caffè Panna sells pints and scoops at the walk-up, delivers locally, and has partnered with GoldBelly so they can ship their dry-iced products nationwide. In addition, they do wholesale business in a number of grocery stores and with other retailers. For example, they have partnered with a buffalo farmer, who delivers buffalo milk to them. They use the milk to make buffalo ice cream, which he then sells. With the economy still in flux and plenty of other— often more convenient—ice creams available, does Meyer worry about losing business? She thinks not. “Our customers come for the Oreo with peanut butter flecks, “ Meyer says. “They are literally flavor-obsessed.” SOURCES: Jackie Cooperman, “Hallie Meyer Charts Her Own Course,” Worth Magazine, September 30, 2019; and Hallie Meyer, personal communication, January 2020. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management Managers in all types of organizations are learning to apply the new management skills and competencies, and you will encounter some of them throughout this textbook. For example, today’s sports teams reflect the shift toward new management ideas. In 2018, the New York Mets, the Washington Nationals, and the Boston Red Sox all replaced their team managers with younger, gentler leaders who demonstrated an ability to connect personally with players and to create a positive, nurturing, relationship-oriented environment. “It speaks to the importance of the personal qualities—communication, collaboration—as opposed to just what’s going on on the field,” said Mets former general manager Sandy Alderson, who is now a senior advisor with the Oakland A’s. Alderson emphasizes that for today’s team managers, a commitment to fostering relationships is “one of the most important aspects of the job description.” Seattle Mariners manager Scott Servais agrees. Servais made a commitment to speak individually with each player every day, usually about something other than baseball. Many teams are also doing away with the traditional approach of yelling at players in favor of a softer, more caring method of motivation and correction.9 A similar approach is also being used more often in other types of organizations. Research has found that the “drill sergeant approach” doesn’t go over well with many of today’s employees, so managers in all types of organizations are using a softer, more collaborative style of management. The shift to a new way of managing isn’t easy for traditional managers who are accustomed to being “in charge,” making all the decisions, and knowing where their subordinates are and what they’re doing at every moment. Even more changes and challenges are on the horizon for organizations and managers. This is an exciting and challenging time to be entering the field of management. Throughout this book, you will learn much more about the new workplace, about the new and dynamic roles that managers are playing in the twenty-first century, and about how you can be an effective manager in a complex, ever-changing world. 1-1b The Trend Toward Bosslessness A few organizations are even experimenting with a bossless design that turns management authority and responsibility over to employees. At least 18 organizations around the world, including French automotive components manufacturer FAVI; tomato processor Morning Star, based in Woodland, California; and Spain’s diversified Mondragon Corporation, are operated as primarily bossless workplaces.10 Although some management and human resource (HR) professionals and scholars question whether the bossless trend will last for long,11 it is interesting to note that some of these companies have been operating without traditional bosses for decades. When Jean-François Zobrist took over as CEO of FAVI in 1983, he eliminated two things: the personnel department and the bosses. At FAVI, team spirit and autonomy are leading goals, and people on the front lines work directly with one another and with customers without someone looking over their shoulders.12 One reason for the trend toward bossless design is that how and where work gets done has shifted in major ways now that new technology enables people to work from home or other Recipe for Success Morning Star Many people are surprised to learn that the world’s largest tomato processor is a company that has no titles or promotions, no hierarchy, and no managers. Morning Star, where 400 or so employees (called colleagues) produce more than $700 million in annual revenue, relies on contract-style agreements called Colleague Letters of Understanding (CLOUs). If someone needs an expensive piece of equipment to fulfill their CLOU, they can buy it without seeking permission. Similarly, if a colleague needs an additional worker, they can go ahead and hire one. People negotiate responsibilities and compensation with their peers and are expected to consult widely with colleagues before making major decisions. Everyone goes through training to learn how to work effectively as part of a team; how to handle the responsibilities of “planning, organizing, leading, and controlling” that are typically carried out by managers; how to balance freedom and accountability; how to understand and effectively communicate with others; and how to manage conflicts. “Around here,” one colleague said, “nobody’s your boss and everybody’s your boss.”13 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 7 Get Complete eBook Download By email at student.support@hotmail.com 8 Part 1 Introduction to Management locations outside a regular office. Many bossless companies, such as Valve Corporation, a leader in the PC gaming market, and Peakon, a maker of human resources and employee engagement software, operate in technology-related industries. Even so, companies as diverse as W.L. Gore & Associates (best known for Gore-Tex fabrics), Whole Foods Market (supermarkets), and Semco (diversified manufacturing) have succeeded with bossless structures.14 One particularly interesting example of bosslessness is tomato processor Morning Star. A bossless work environment can have advantages, including increased flexibility, greater employee initiative and commitment, and better and faster decision making. However, bossless work environments also present new challenges. Costs may be lower because of reduced overhead, but money must be invested in ongoing training and development for employees so that they can work effectively within a bossless system. The culture also must engage employees and support the nonhierarchical environment.15 Remember This ● ● ● ● ● empowering leadership style, encouraging collaboration, leading teams, and mobilizing for change and innovation. Managers get things done by coordinating and motivating other people. Management is defined as the attainment of organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational resources. Turbulent environmental forces have caused a significant shift in the competencies required for effective managers. Traditional management competencies include a command-and-control leadership style, a focus on individual tasks, and a standardization of procedures to maintain stability. New management competencies include being an enabler rather than a controller, using an ● ● ● Caffè Panna survived the pandemic by keeping to its core mission but reaching customers differently. Several Major League Baseball teams, including 2019 World Series champions the Washington Nationals, have hired new managers who demonstrate some of the new management competencies. A number of companies are experimenting with a bossless organization design that turns authority and responsibility over to people throughout the organization. 1-2 The Basic Functions of Management “Good management is the art of making problems so interesting and their solutions so constructive that everyone wants to get to work and deal with them.” —Paul Hawken, Environmentalist, Entrepreneur, and Author of Natural Capitalism Every day, managers solve difficult problems, turn organizations around, and achieve astonishing performances. To be successful, every organization needs good managers. The famed management theorist Peter Drucker (1909–2005), often credited with creating the modern study of management, summed up the job of the manager by specifying five tasks.16 In essence, managers set goals, organize activities, motivate and communicate, measure performance, and develop people. These five manager activities apply not only to top executives such as Tim Cook at Apple, Mary Barra at General Motors, and Kenneth Frazier at Merck, but also to the manager of a restaurant in your hometown, the leader of an airport security team, a supervisor at a Web hosting service, and the director of sales and marketing for a local business. Performance should be measured in large and small organizations. When Thomas McQuillan was hired as Baldor’s Director of Food Sales and Sustainability, he saw a great deal of waste and an opportunity to help the company perform better and contribute positively to the environment. The activities outlined in Exhibit 1.2 fall into four fundamental management functions: planning (setting goals and deciding activities), organizing (organizing activities and people), leading (motivating, communicating with, and developing people), and controlling (establishing targets and measuring performance). Depending on their job situation, managers perform numerous and varied tasks, but they all can be categorized within these four primary functions. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com 9 Chapter 1 Leading Edge Management Recipe for Success Urban Roots Where someone sees waste, Thomas McQuillan, Baldor’s Director of Food Sales and Sustainability, sees opportunity. Before he arrived, 150,000 pounds of waste were derived each week from the million pounds of produce delivered to Baldor’s plant in the Bronx. What to do with the strawberry tops, carrot peels, onion skins, etc.? Previously, all went to the landfill. McQuillan believed that because it was food, it should be treated as food. Currently, nothing is hauled to the dump. Skins and other parts of veggies are bagged and sold to chefs for soups or sauces. Fruit leftovers are offered to juiceries, which use them in cold-pressed juices. Non-edible waste, such as rind from cantaloupes, is used for animal feed. Baldor discovered it could blend scraps into completely new products and started a new line in organic food stores. Urban Roots sells items that derive from “dry vegetable blend,” which contains 20 different veggies, dehydrated and crushed into a flourlike ingredient for gluten-free baked goods and other foods. The new venture saves money because hauling scraps to the dump had cost 10 cents per pound, and it turns out that carrot scraps sell for 30 cents a pound. Who knew? Part of the challenge is getting the word out to food preparers, such as chef Adam Kaye. He uses the pale inner leaves of celery hearts for spice stocks, and he marinates the tough lettuce cores of lettuce heads. “We talk about the nose-to-tail approach in butchery,” he says, and we need to “apply that same approach to vegetables.” McQuillan isn’t stopping there. He’s experimenting with reusing packaging and rethinking the unrecyclable produce containers in grocery stores. He is confident Baldor will find solutions. “We can do things differently.” SOURCES: “How One Company Has Built Sustainability Initiatives That Drive Meaningful Reductions in Food Waste,” ReFed.com, October 24, 2019; and Adele Peters, “Peel Appeal,” INC Magazine (August 2017): 54–56. Exhibit 1.2 The Process of Management Management Functions Planning Select goals and ways to attain them Resources Human Financial Raw materials Technological Information Organizing Controlling Performance Assign responsibility for task accomplishment Monitor activities and make corrections Attain goals Products Services Efficiency Effectiveness Leading Use influence to motivate employees John Stonecipher finds that as the president and CEO of Guidance Aviation, a high-altitude flight school in Prescott, Arizona, his job involves all four management functions. Once he’s charted the course for the operation (planning) and put all the necessary policies, procedures, and structural mechanisms in place (organizing), he supports and encourages his 50-plus employees (leading) and makes sure that nothing falls through the cracks (controlling). Thanks to his strengths in all of these areas, the U.S. Small Business Administration named Stonecipher a National Small Business Person of the Year. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Don Bartletti/Los Angeles Times/Getty Images Concept Connection Get Complete eBook Download By email at student.support@hotmail.com 10 Part 1 Introduction to Management Can a huge corporation that is frequently targeted by environmental activists be a force for social good? Coca-Cola managers believe so. The company has set specific goals to improve the well-being of the communities in which it operates, achieve water neutrality in its products and production, and empower women entrepreneurs. One tangible project is the Ekocenter, an off-the-grid, modular “community market in a box.” At the Ekocenter, customers can charge their mobile devices, send a fax, access the Internet, pick up educational materials on hygiene and health issues, and buy basic products. Each Ekocenter has solar panels that provide consistent power and reduce the facility’s environmental footprint. The general manager of the Ekocenter project explains the need for thinking green: “We only have one planet and we are using it like there’s five of them,” he said. A Local Market in a Box Karolina Grabowska/Pexels Creating a Greener World SOURCES: Based on Donna Berry, “Coca-Cola’s Ekocenter Empowers Disadvantaged Communities Through Social Enterprise,” Food Business News (April 17, 2018), https://www .foodbusinessnews.net/articles/11662-coca-colas-ekocenter-empowers-disadvantaged -communities-through-social-enterprise (accessed January 8, 2019); and Eric J. McNulty, “Teaching the World to Do More Than Sing,” Strategy 1 Business (September 8, 2015), http:// www.strategy-business.com/article/00358?gko=a9ace (accessed February 15, 2016). The four basic functions of management (planning, organizing, leading, and controlling) will be covered in the chapters of this book. All are important, for different reasons, to keep an organization functioning and successful. But you don’t have to be a top manager of a big corporation to be an exceptional leader. Many managers working quietly in both large and small organizations around the world provide strong leadership within departments, teams, nonprofit organizations, and small businesses. One trend in recent years is for companies to place less emphasis on top-down control and more emphasis on training employees to monitor and correct themselves. However, the ultimate responsibility for control still rests with managers. For example, the co-founders of Instagram realized they needed someone to help them maintain order and avoid wasting time and resources as the company expanded. When Marne Levine was hired as chief operating officer (COO), the photo-sharing app company didn’t even have a budget. Managers leading the various teams didn’t communicate regularly about their spending, so different teams were adding new employees and making other resource commitments without coordinating their efforts. Creating a formal budget so Instagram managers could keep track of spending as the company grew was one of Levine’s first tasks. The enhanced control enabled Instagram to launch new features more rapidly and deal with growing competition from Snapchat.17 Remember This ● ● ● Managers perform a wide variety of activities that fall within four primary management functions. Planning is the management function concerned with defining goals for future performance and how to attain them. Organizing involves assigning tasks, grouping tasks into departments, and allocating resources. ● ● ● Leading means using influence to motivate employees to achieve the organization’s goals. Controlling is concerned with monitoring employees’ activities, keeping the organization on track toward meeting its goals and making corrections as necessary. One of Marne Levine’s first tasks as COO at Instagram was to create the company’s first formal budget. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management 1-3 Organizational Performance The definition of management also encompasses the idea of attaining organizational goals in an efficient and effective manner. Management is so important because organizations are so important. In an industrialized society where complex technologies dominate, organizations bring together knowledge, people, and raw materials to perform tasks that no individual could do alone. Our formal definition of an organization is a social entity that is goal-directed and deliberately structured. Social entity means being made up of two or more people. Goal directed means designed to achieve some outcome, such as make a profit (Target Stores), win pay increases for members (United Food & Commercial Workers), meet spiritual needs (Lutheran Church), or provide social satisfaction (college sorority Alpha Delta Pi). Deliberately structured means that tasks are divided, and responsibility for their performance is assigned to organization members. This definition applies to all organizations, both for-profit and nonprofit. Small, offbeat, and nonprofit organizations are more numerous than large, visible corporations—and just as important to society. Do managers really make a difference? To some, it might seem that managers have little to do with the “real work” that goes on in an organization. Management work is often intangible and unseen and is thus easy to undervalue.18 Yet without good management, no organization can achieve operational excellence—an outcome that is a challenge for many companies. Consider the fall of WeWork, a company that sublets office space. WeWork was considered one of the most promising start-ups in the United States in the early 2010s. But in 2019, the company turned out to be worth $40 billion less than its presumed value. Senior leaders had done an excellent job at creating hype, but they had failed at achieving operational excellence—hence the collapse in value.19 It takes solid management throughout an organization to achieve excellence. A study by Nicholas Bloom and John Van Reenen calls attention to the importance of good middle managers to an organization’s success. In an experiment with textile factories, improved middle management practices were introduced into 20 factories in India, and the results were compared to factories that did not improve management procedures. After just four months of training in better management methods, the 20 factories had cut defects by 50 percent, boosted productivity and output, and improved profits by $200,000 a year.20 Other studies also show that good management correlates with high performance.21 Tech giants Amazon, Microsoft, and Apple took the top three spots out of 820 firms analyzed in the Drucker Institute’s annual Management Top 250 ranking. How did they achieve such high scores? These three companies excelled because of superb management throughout the organization that did almost everything right. Other companies that achieved high rankings across various performance metrics include Google’s parent Alphabet, The 3M Company, PepsiCo, Mastercard Inc., Walmart, and Procter & Gamble.22 Few companies achieve that level of excellence—because management is harder than it looks. Based on our definition of management, the manager’s responsibility is to coordinate resources in an effective and efficient manner to accomplish the organization’s goals. Organizational effectiveness is the degree to which the organization achieves a stated goal or succeeds in accomplishing what it tries to do. Organizational effectiveness means providing a product or service that customers value. Organizational efficiency refers to the amount of resources used to achieve an organizational goal. It is based on how much raw material, money, and people are necessary for producing a given volume of output. Efficiency can be defined as the amount of resources used to produce a product or service. Efficiency and effectiveness can both be high in the same organization. Many managers are using mobile apps to increase efficiency, and in some cases, the apps can enhance effectiveness as well.23 For example, Square has revolutionized small business by enabling any smartphone to become a point-of-sale (POS) terminal that allows the user to accept credit card payments. Millions of small businesses and entrepreneurs in the United States and Canada who once had to turn customers away because they couldn’t afford the fees charged by credit card companies can now use Square to process credit cards. Customers get their need to pay with a card met, and businesses get a sale that they might have missed. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 11 Get Complete eBook Download By email at student.support@hotmail.com 12 Part 1 Introduction to Management All managers must pay attention to costs, but severe cost cutting to improve efficiency— whether accomplished by using cutting-edge technology or old-fashioned frugality—can sometimes hurt organizational effectiveness. The ultimate responsibility of managers is to achieve high performance, which is the attainment of organizational goals by using resources in an efficient and effective manner. Think of what happened when weak sales at music company EMI led managers to focus too heavily on financial efficiency. The severe approach they adopted successfully trimmed waste and boosted operating income, but the efficiencies damaged effectiveness by reducing the company’s ability to recruit new artists. The cost cutting also created internal turmoil that caused some long-term bands to leave the company. Thus, overall performance suffered. After struggling for several years, the century-old music company was split in two and sold for $4.1 billion to Universal Music Group and Sony Corporation.24 Remember This ● ● ● ● An organization is a social entity that is goaldirected and deliberately structured. ● Good management is easily underestimated, yet it is vital to organization success. ● Efficiency pertains to the amount of resources—raw materials, money, and people—used to produce a desired volume of output. Some managers are using mobile apps to increase efficiency; one example is Square, which is used to process credit and debit card payments with a smartphone. Performance is defined as the organization’s ability to attain its goals by using resources in an efficient and effective manner. Effectiveness refers to the degree to which the organization achieves a stated goal. 1-4 Management Skills A manager’s job requires a range of skills, which can be placed in three categories: conceptual, human, and technical.25 As illustrated in Exhibit 1.3, the application of these skills changes dramatically when a person is promoted to management. Although the degree of each skill required at different levels of an organization may vary, all managers must possess some skill in each of these important areas to perform effectively. Middle Managers Nonmanagers (Individual Contributors) Exhibit 1.3 Relationship of Technical, Human, and Conceptual Skills to Management Technical Skills Human Skills Conceptual Skills Technical Skills Human Skills Conceptual Skills Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management 13 Holding degrees in both physics and economics, entrepreneur Elon Musk certainly possesses his share of technical skills. He designed and created the first viable electric car—the Tesla roadster—as well as the Web-based payment service PayPal and a spacecraft that will enable private citizens to travel to outer space. But it is his stellar conceptual skills that allow him to lead the innovative companies that are making these products and services available to people worldwide. Uber Bilder/Alamy Stock Photo Concept Connection Many managers get promoted to their first management jobs because they have demonstrated understanding and proficiency in the performance of specific tasks. But this is not enough for a supervisor. Human skills are increasingly important for managers at all levels and in all types of organizations.26 Even at a company such as Google, which depends on technical expertise, human skills are considered essential for managers. When Google analyzed performance reviews and feedback surveys to find out what makes a good manager of technical people, it found that technical expertise ranked low on the list of desired manager qualities, as shown in Exhibit 1.4. The exhibit lists 10 effective behaviors of good managers. Notice that almost all of them relate to human skills, such as communication, coaching, and teamwork. People want managers who listen to them, build positive relationships, and show an interest in their lives and careers.27 One study found that human skills were significantly more important than technical skills for predicting manager effectiveness.28 Another survey compared the importance of managerial skills Exhibit 1.4 Google’s Rules: Top 10 Behaviors for Managers To determine how to build better managers, Google executives studied performance reviews, feedback surveys, and award nominations to see what qualities made a good manager. Here are the “Top 10 Behaviors” Google found, in order of importance: 1. Be a good coach. 2. Empower your team and don’t micromanage. 3. Create an inclusive team environment, showing concern for success and well-being. 4. Be productive and results-oriented. 5. Be a good communicator and listen to your team. 6. Support career development and discuss performance. 7. Have a clear vision and strategy for the team. 8. Have key technical skills so you can help advise the team. 9. Collaborate across Google. 10. Be a strong decision maker. SOURCES: Melissa Harrell and Lauren Barbato, “Great Managers Still Matter: The Evolution of Google’s Project Oxygen,” Google Blog (February 27, 2018), https://rework.withgoogle.com/blog/the-evolution-of-project -oxygen/ (accessed January 8, 2019); Adam Bryant, “Google’s Quest to Build a Better Boss,” The New York Times, March 12, 2011. Courtesy of Google, Inc.; and Zack Friedman, Google Says the Best Managers Have these 10 Qualities, Forbes Magazine, https://www.forbes.com/sites/zackfriedman/2018/08/30/best-managers-google/?sh=383d06b14f26 (accessed August 30, 2018). Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 14 Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management today with those from the late 1980s and found a decided increase in the role of skills for building relationships with others.29 Conceptual skills include the cognitive ability to see the organization as a whole system and the relationships among its parts. Conceptual skills are needed by all managers, but especially by managers at the top. Many of the responsibilities of top managers—such as decision making, resource allocation, and innovation—require a broad view. For example, Ursula Burns, who in 2009 became the first African American woman to lead a major U.S. corporation, needed superb conceptual skills to transform a company once known only for paper copies into a business that could compete effectively in a rapidly changing technology industry. Steering Xerox through a tough economy in a consolidating industry required a strong understanding of not only the company, but also shifts in the industry and the larger environment. After six years as Xerox CEO, Burns stepped down after the company split into two public companies: Conduent, a $7 billion business process outsourcing company, and the new Xerox, an $11 billion stand-alone company focused on document technology.30 1-4a When Skills Fail Good management skills are not automatic or guaranteed among managers. Particularly during turbulent times, managers really have to stay on their toes and apply all their skills and competencies in a way that benefits the organization and its stakeholders—employees, customers, investors, the community, and so forth. In recent years, numerous highly publicized examples have shown what happens when managers fail to apply their skills effectively to meet the demands of an uncertain, rapidly changing world. Everyone has flaws and weaknesses, and these shortcomings become most apparent under conditions of rapid change, uncertainty, or crisis.31 Consider the diesel emissions scandal at Volkswagen (VW). The company reached management’s goals of tripling U.S. sales and becoming the world’s largest automaker in 2015, but the rapid growth also brought problems. VW’s CEO resigned and several other high-level managers were fired after VW admitted to using software in diesel vehicles designed to cheat U.S. emissions tests. Although the top leader said he had no knowledge of the trickery, others suggested that his meticulous attention to every technical detail and the hard-driving culture he created put enormous pressure on managers to meet high goals. A new chief executive, Matthias Müller, guided VW through the worst of the crisis and renewed the company’s financial health, but Müller was also forced out as competitive pressures in the auto industry continued to increase. New CEO Herbert Diess is working to reform VW’s corporate culture and help the automaker move faster without pushing legal and ethical boundaries.32 The numerous ethical and financial scandals of recent years have left many people cynical about business and government managers and even less willing to overlook mistakes. Crises and examples of deceit and greed may grab the headlines, but many more companies falter or fail less spectacularly. Some managers fail to listen to customers, are unable to motivate employees, or can’t build a cohesive team. Exhibit 1.5 shows the top 10 factors that cause managers to fail to achieve the desired results, based on a survey of managers in U.S. organizations operating in rapidly changing business environments.33 Notice that many of these factors reflect poor human skills, such as the inability to develop good work relationships, a failure to clarify direction and performance expectations, or an inability to create cooperation and teamwork. The number one reason for manager failure is ineffective communication skills and practices— a shortcoming cited by 81 percent of managers surveyed. Especially in times of uncertainty or crisis, if managers do not communicate effectively, including listening to employees and customers and showing genuine care and concern, organizational performance and reputation will suffer. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com 15 Chapter 1 Leading Edge Management Exhibit 1.5 Top Causes of Manager Failure 1. Ineffective communication skills and practices 81% 2. Poor work relationships/interpersonal skills 78% 3. Person job mismatch 69% 64% 4. Failure to clarify direction or performance expectations 5. Failure to adapt and break old habits 57% 6. Breakdown of delegation and empowerment 56% 7. Lack of personal integrity and trustworthiness 52% 8. Inability to develop cooperation and teamwork 50% 9. Inability to lead/motivate others 47% 10. Poor planning practices/reactionary behavior 45% 0% 50% 90% SOURCE: Adapted from Clinton O. Longenecker, Mitchell J. Neubert, and Laurence S. Fink, “Causes and Consequences of Managerial Failure in Rapidly Changing Organizations,” Business Horizons 50 (2007): 145–155, Table 1, with permission from Elsevier. Remember This ● ● ● ● Managers have complex jobs that require a range of abilities and skills. ● Technical skills include the understanding of and proficiency in the performance of specific tasks. Human skills refer to a manager’s ability to work with and through other people and to work effectively as part of a group. Conceptual skills are the cognitive abilities to see the organization as a whole and the relationship among its parts. ● ● Ursula Burns, former CEO of Xerox, needed superb conceptual skills to transform a company once known only for paper copies into a business that could effectively compete in a rapidly changing technology industry. The two major reasons that managers fail are poor communication and poor interpersonal skills. A manager’s weaknesses become more apparent during stressful times of uncertainty, change, or crisis. 1-5 Challenges Facing New Managers Many people who are promoted into a managerial position have little idea what the job entails and receive little training about how to handle their new role. It’s no wonder that, among managers, first-line supervisors tend to experience the most job burnout and attrition.34 Making the shift from individual contributor to manager is often difficult and thorny. Mark Zuckerberg, whose company, Facebook, went public a week before he turned 28 years old, provides an example of the challenge that arises when starting out in the CEO’s job. In a sense, the public has been able to watch Zuckerberg “grow up” as a manager. He was a strong individual Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 16 Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management performer in creating the social media platform and forming the company, but he fumbled with day-to-day management, such as interactions with employees and communicating with people both inside and outside Facebook. Zuckerberg was smart enough to hire seasoned managers, including former Google executive Sheryl Sandberg, and cultivate advisors and mentors who have coached him in areas where he is weak. However, Facebook and Zuckerberg are now watched more closely than ever as they have grappled with one scandal after another in recent years. Facebook was fined $5 billion for missteps with user privacy, including Facebook’s conduct with Cambridge Analytica that contributed to Russian interference in the 2016 U.S. presidential election, as well as incidents of hate speech and bullying, combined with slow and inadequate responses from Facebook managers. Zuckerberg, Sandberg, and other managers are struggling to find the right approach to dealing with the multiple crises.35 When Harvard professor Linda Hill followed a group of 19 managers over the first year of their managerial careers, she found that one key to success is to recognize that becoming a manager involves more than learning a new set of skills. Rather, becoming a manager means a profound transformation in the way people think of themselves, called personal identity, which includes letting go of deeply held attitudes and habits and learning new ways of thinking.36 Exhibit 1.6 outlines the transformation from individual performer to manager. The individual performer is a specialist and a “doer.” This person’s mind is conditioned to think in terms of performing specific tasks and activities as expertly as possible. The manager, by contrast, has to be a generalist and learn to coordinate a broad range of activities. While individual performers strongly identify with their specific tasks, managers must identify with the broader organization and industry. In addition, the individual performer gets things done mostly through personal efforts and develops the habit of relying on self rather than others. The manager, though, gets things done through other people. Indeed, one of the most common mistakes that new managers make is wanting to do all the work themselves, rather than delegating to others and developing others’ abilities.37 Hill offers a reminder that, as a manager, you must “be an instrument to get things done in the organization by working with and through others, rather than being the one doing the work.”38 Exhibit 1.6 Making the Leap from Individual Performer to Manager From Individual Identity Specialist; performs specific tasks To Manager Identity Generalist; coordinates diverse tasks Gets things done through own efforts Gets things done through others An individual actor A network builder Works relatively independently Works in highly interdependent manner SOURCE: Based on Exhibit 1.1, “Transformation of Identity,” in Linda A. Hill, Becoming a Manager: Mastery of a New Identity, 2d ed. (Boston, Ma: Harvard Business School Press, 2003), p. 6. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management 17 Another problem for many new managers is that they expect to have greater freedom to do what they think is best for the organization. In reality, managers typically find themselves hemmed in by interdependencies. Being a successful manager means thinking in terms of building teams and networks and becoming a motivator and organizer within a highly interdependent system of people and work.39 Although the distinctions may sound simple in the abstract, they are anything but. Becoming a manager means becoming a new person and viewing oneself in a completely new way. Many new managers make the transformation in a “trial by fire,” learning on the job as they go, but organizations are beginning to be more responsive to the need for new-manager training. The cost to organizations of losing good people who can’t make the transition is greater than the cost of providing training to help new managers cope, learn, and grow. In addition, some organizations use great care in selecting people for managerial positions, including ensuring that each candidate understands what management involves and really wants to be a manager. Remember This ● ● Becoming a new manager requires a shift in thinking from being an individual performer to playing an interdependent role of coordinating and developing others. While individual performers strongly identify with their specific tasks, managers must identify with the broader organization and industry. ● ● Because of the interdependent nature of management, new managers often have less freedom and control than they expect to have. At Facebook, Mark Zuckerberg hired seasoned managers and advisors to help move the company forward as he struggled with the transition from being an expert individual contributor to handling the demands of managing a growing company. 1-6 What Is a Manager’s Job Really Like? “Despite a proliferation of management gurus, management consultants, and management schools, it remains murky to many of us what managers actually do and why we need them in the first place,” wrote Ray Fisman, a Columbia Business School professor.40 Unless someone has performed managerial work, it is hard to understand exactly what managers do on an hour-by-hour, day-to-day basis. One answer to the question of what managers do to plan, organize, lead, and control was provided by Henry Mintzberg, who followed managers around and recorded all their activities.41 He developed a description of managerial work that included three general characteristics and 10 roles. These characteristics and roles have been supported by other research.42 Perhaps one of the best-known leaders in baseball is Billy Beane of the Oakland A’s. Before he was promoted to executive vice president of baseball operations in late 2015, Beane served for 17 years as general manager of the A’s. Beane is famous for finding and developing talented young players who were less expensive to hire than the big names, which allowed Beane to keep his payroll low while still winning six division titles. Beane was the subject of the best-selling book and hit film Moneyball. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Dennis Ku/Shutterstock.com Concept Connection Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management 1-6a Manager Activities Most new managers are unprepared for the variety of activities that managers routinely perform. One of the most interesting findings about managerial activities is how busy managers are and how hectic the average workday can be. Adventures in Multitasking Every manager’s job is similar in its diversity and fragmentation.43 The schedule that follows is a typical morning for an HR manager.44 7:00 a.m. Arrives at work. Studies the calendar and visualizes the goals for the day. 7:15 a.m. Meets with the shift supervisor about a sexual harassment complaint. 7:45 a.m. An assistant interrupts to say that the CEO wants to meet about picketers. 8:00 a.m. Checks voice mail and finds seven messages. Forwards four to team members. Returns three calls and leaves voice-mail messages. 8:15 a.m. Meets with a team member to discuss a prospective hire. 8:45 a.m. A team member comes in to complain that an IT report is full of errors. Discussion ensues. 9:00 a.m. E-mail pings with an “urgent” message from a supervisor about an employee who will be absent for the next 30 days. 9:10 a.m. Focuses on reading and returning e-mails. Asks the assistant to schedule a call with the CEO. 9:30 a.m. Explains the picket situation to CEO. Studies the IT report. Confirms errors and writes message to go with the report when it is sent back to IT. 10:00 a.m. Takes a phone call from the HR manager at another company. Schedules a dinner meeting. 10:15 a.m. Back to e-mail. 10:45 a.m. Walks to the canteen for a cup of coffee and a short break. Chats briefly with people in line. 11:00 a.m. Back-to-back short stand-up meetings. 11:30 a.m. Catches up with the VP of Communications. 11:45 a.m. Meets with the team on a new vacation policy draft write-up. 12:15 p.m. Back to e-mail. 12:45 p.m. Heads for a lunch meeting with marketing managers about hiring challenges. Managerial activity is characterized by variety, fragmentation, and brevity.45 The widespread and voluminous nature of a manager’s tasks leaves little time for quiet reflection. A study by a team from the London School of Economics and Harvard Business School found that the time CEOs spend working alone averages a mere six hours a week. The rest of their time is spent in meetings, on the phone, traveling, and talking with others inside and outside the organization.46 Managers shift gears quickly. In his study, Mintzberg found that the average time a top executive spends on any one activity is less than nine minutes, and another survey indicates that some first-line supervisors average one activity every 48 seconds!47 Concept Connection New managers sometimes find themselves overwhelmed by the various activities, multiple responsibilities, long hours, and fast pace that come with management. A manager’s life on speed dial requires good time management skills. Managers must also find ways to maintain a healthy balance between their work and personal lives. ImageFlow/Shutterstock.com 18 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management Take a Moment: Know Yourself How Do You Manage Your Time? Instructions: Think about how you normally handle tasks during a typical day at work or school. Read each item and check whether it is Mostly True or Mostly False for you. Mostly True Mostly False 1. I frequently take on too many tasks. 2. I spend too much time on enjoyable but unimportant activities. 3. I feel that I am in excellent control of my time. 4. Frequently during the day, I am not sure what to do next. 5. There is little room for improvement in the way I manage my time. 6. I keep a schedule for events, meetings, and deadlines. 7. My workspace and paperwork are well organized. 8. I am good at recordkeeping. 9. I make good use of waiting time. 10. I am always looking for ways to increase task efficiency. Scoring and Interpretation: For questions 3 and 5–10, give yourself one point for each “Mostly True” answer. For questions 1, 2, and 4, give yourself one point for each “Mostly False” answer. Your total score pertains to the overall way that you use time. Items 1–5 relate to taking mental control over how you spend your time. Items 6–10 pertain to some mechanics of good time management. Good mental and physical habits make effective time management much easier. Busy managers have to learn to control their time. If you scored 8 or higher, your time-management ability is good. If your score is 4 or lower, you may want to reevaluate your time-management practices if you aspire to be a manager. How important is good time management to you? See the “Sunny Side Up” feature for ideas to improve your time management skills. Life on Speed Dial The manager performs a great deal of work at an unrelenting pace.48 Managers’ work is fast-paced and requires great energy. Most top executives routinely work at least 12 hours a day and spend 50 percent or more of their time traveling.49 Calendars are often booked months in advance, but unexpected disturbances erupt every day. Mintzberg found that most executives’ meetings and other contacts are ad hoc, and even scheduled meetings are typically surrounded by other events such as quick phone calls, scanning of e-mail, or spontaneous encounters. During time away from the office, executives catch up on work-related reading, paperwork, phone calls, and e-mail. Technology, such as e-mail, text messaging, smartphones, tablets, and laptops, has intensified the pace. Brett Yormark, CEO of the National Basketball Association (NBA) team the Brooklyn Nets, typically responds to about 60 messages before he even shaves and dresses for the day, and employees are accustomed to getting messages that Yormark has zapped to them in the wee hours of the morning.50 Where Does a Manager Find the Time? With so many responsibilities and so many competing demands on their time, how do managers cope? One manager who was already working 18-hour days five days a week got assigned another project. When the CEO was informed of the problem, he matter-of-factly remarked that by his calculations, she still had “30 more hours Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 19 Get Complete eBook Download By email at student.support@hotmail.com 20 Part 1 Introduction to Management Monday through Friday, plus 48 more on the weekend.” That is surely an extreme example, but most managers often feel the pressure of too much to do and not enough time to do it.51 When The Wall Street Journal’s “Lessons in Leadership” video series asked CEOs of big companies how they managed their time, it found that many of them carve out time just to think about how to manage their time.52 Time is a manager’s most valuable resource, and one characteristic that identifies successful managers is that they know how to use time effectively to accomplish the important things first and the less important things later.53 Time management refers to using techniques that enable you to get more done in less time and with better results, be more relaxed, and have more time to enjoy your work and your life. New managers in particular often struggle with the increased workload, the endless paperwork, the incessant meetings, and the constant interruptions that come with a management job. Learning to manage their time effectively is one of the greatest challenges that new managers face. The “Sunny Side Up” feature offers some tips for time management. Sunny Side Up Time Management Tips for New Managers ● ● Stokkete/Shutterstock.com ● Becoming a manager is considered by most people to be a positive, forward-looking career move. Indeed, life as a manager offers appealing aspects. However, it also holds many challenges, not the least of which is the increased workload and the difficulty of finding the time to accomplish everything on one’s expanded list of duties and responsibilities. The following classic time management techniques can help you eliminate major time-wasters in your daily routines. ● ● Keep a To-Do List. If you don’t use any other system for keeping track of your responsibilities and commitments, at the very least you should maintain a to-do list that identifies all the things that you need to do during the day. Although the nature of management means that new responsibilities and shifting priorities occur frequently, it’s a fact that people accomplish more with a list than without one. Remember Your ABCs. This is a highly effective system for prioritizing tasks or activities on your to-do list: ● ● An “A” item is something highly important. It must be done, or you’ll face serious consequences. A “B” item is a should do, but consequences will be minor if you don’t get it done. ● “C” items are things that would be nice to get done, but there are no consequences at all if you don’t accomplish them. “D” items are tasks that you can delegate to someone else. Schedule Your Workday. Some experts suggest that every minute spent in planning saves 10 minutes in execution. Take your to-do list a step further and plan how you will accomplish each task or project you need to handle. Planning to tackle the big tasks first is a good idea because most people are at peak performance early in the day. Save the e-mails and phone calls for less productive times. Do One Thing at a Time. Multitasking has become the motto of the early twenty-first century, but too much multitasking is a time-waster. Research has shown that multitasking reduces—rather than enhances—productivity. The authors of one study suggest that an inability to focus on one thing at a time could reduce efficiency by 20 to 40 percent. Even for those managers whose jobs require numerous brief activities, the ability to concentrate fully on each one (sometimes called spotlighting) saves time. Give each task your full attention, and you’ll get more done and get it done better, too. SOURCES: Based on information in David Allen, Getting Things Done: The Art of Stress-Free Productivity (London: Penguin Books, 2015); Pamela Dodd and Doug Sundheim, The 25 Best Time Management Tools & Techniques (Ann Arbor, MI: Peak Performance Press, 2005); Brian Tracy, Eat That Frog: 21 Great Ways to Stop Procrastinating and Get More Done in Less Time (San Francisco: Berrett-Koehler, 2002); Joshua S. Rubinstein, David E. Meyer, and Jeffrey E. Evans, “Executive Control of Cognitive Processes in Task Switching,” Journal of Experimental Psychology: Human Perception and Performance 27, no. 4 (August 2001): 763–797; Sue Shellenbarger, “Multitasking Makes You Stupid: Studies Show Pitfalls of Doing Too Much at Once,” The Wall Street Journal, February 27, 2003; and Ilya Pozin, “Quit Working Late: 8 Tips,” Inc. (June 26, 2013), https://www.inc.com/ilya-pozin/8-ways-to-leave-work-at-work.html (accessed January 14, 2020). Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management 1-6b Manager Roles Mintzberg’s observations and subsequent research indicate that diverse manager activities can be organized into 10 roles.54 A role is a set of expectations for a manager’s behavior. Exhibit 1.7 describes activities associated with each of the roles. These roles are divided into three conceptual categories: informational (managing by information), interpersonal (managing through people), and decisional (managing through action). Each role represents activities that managers undertake to ultimately accomplish the functions of planning, organizing, leading, and controlling. Although it is necessary to separate the components of the manager’s job to understand the different roles and activities of a manager, it is important to remember that the real job of management isn’t practiced as a set of independent parts; that is, all the roles interact in the real world of management. The disseminator and spokesperson roles become crucial during times of crisis. The relative emphasis that a manager puts on the 10 roles shown in Exhibit 1.7 depends on a number of factors, such as the manager’s position in the hierarchy, natural skills and abilities, type of organization, and departmental goals to be achieved. Exhibit 1.8 illustrates the varying importance of the leader and liaison roles as reported in a survey of top-, middle-, and lower-level managers. Note that the importance of the leader role typically declines, and the importance of the liaison role increases, as a manager moves up the organizational hierarchy. Exhibit 1.7 Ten Manager Roles Informational Interpersonal Monitor: Seek and receive information; scan Web, periodicals, reports; maintain personal contacts Disseminator: Forward information to other organization members; send memos and reports, make phone calls Spokesperson: Transmit information to outsiders through speeches, reports Figurehead: Perform ceremonial and symbolic duties such as greeting visitors, signing legal documents Leader: Direct and motivate subordinates; train, counsel, and communicate with subordinates Liaison: Maintain information links inside and outside the organization; use e-mail, phone, meetings Decisional Entrepreneur: Initiate improvement projects; identify new ideas, delegate idea responsibility to others Disturbance Handler: Take corrective action during conflicts or crises; resolve disputes among subordinates Resource Allocator: Decide who gets resources; schedule, budget, set priorities Negotiator : Represent team or department’s interests; represent department during negotiation of budgets, union contracts, purchases SOURCES: Adapted from Henry Mintzberg, The Nature of Managerial Work (New York: Harper & Row, 1973), pp. 92–93; and Henry Mintzberg, “Managerial Work: Analysis from Observation,” Management Science 18 (1971), B97–B110. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 21 Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management Half-Baked Management Boeing Former Boeing CEO Dennis Muilenburg botched these roles after two fatal crashes of the company’s 737 MAX jetliner. Muilenburg’s tendency to rely on hard data and legal advice and the failure to apply a more diplomatic and sensitive approach to the growing crisis amplified, rather than soothed, tensions with customers and regulators. In mid-December 2019, Boeing’s board of directors voted to suspend production of the troubled jetliner and ousted Muilenburg, largely because he mishandled the company’s relationship with the Federal Aviation Administration (FAA) and other outsiders. The 737 MAX crisis led to Boeing losing its title of world’s largest planemaker to rival Airbus. One of the top challenges for Boeing’s new CEO David Calhoun is to be an effective spokesperson who can help the company emerge from the long crisis.55 Consider the challenge of the leader and liaison roles for managers at National Foods, Pakistan’s largest maker of spices and pickles, who struggle with political instability, frequent power outages, government corruption and inefficiency, and increasing threats of terrorism. “In the morning, I assess my workers,” says Sajjad Farooqi, a supervisor at National Foods. If Farooqi finds people who are too stressed or haven’t slept the night before, he changes their shift or gives them easier work. Farooqi also pays a lot of attention to incentives because people are under so much pressure. In the liaison role, National Foods managers have to develop information sources that are related not only to the business, but to safety and security concerns as well.56 Other factors, such as changing environmental conditions, also may determine which roles are more important for a manager at any given time. Managers stay alert to needs both inside and outside the organization to determine which roles are most critical at various times. A top manager may regularly put more emphasis on the roles of spokesperson, figurehead, and negotiator, but the emergence of new competitors may require more attention to the monitor role, or a severe decline in employee morale and direction may mean that the CEO must more strongly exhibit the leader role. A marketing manager may focus on interpersonal roles because of the importance of personal contacts in the marketing process, whereas a financial manager may be more likely to emphasize decisional roles such as resource allocator and negotiator. Despite these differences, all managers carry out informational, interpersonal, and decisional roles to meet the needs of the organization. Exhibit 1.8 Hierarchical Levels and Importance of Leader and Liaison Roles Leader role Liaison role High Med Importance 22 Low Supervisory Managers Middle Managers Top Managers SOURCE: Based on information from A. I. Kraut, P. R. Pedigo, D. D. McKenna, and M. D. Dunnette, “The Role of the Manager: What’s Really Important in Different Management Jobs,” Academy of Management Executive 3 (1989), 286–293. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management Remember This ● ● There are many types of managers, based on their purpose and location in an organization. The job of a manager is highly diverse and fast-paced, so managers need good time management skills. ● ● A role is a set of expectations for one’s behavior. Managers at every level perform 10 roles, which are grouped into informational roles, interpersonal roles, and decisional roles. 1-7 Managing in Nonprofit Organizations Nonprofit organizations represent a major application of management talent.57 Organizations such as Second Harvest Food Bank, United Way, the Salvation Army, Nature Conservancy, Boys and Girls Clubs of America, and the Museum of Modern Art all require excellent management. The functions of planning, organizing, leading, and controlling apply to nonprofits just as they do to business organizations, and managers in nonprofit organizations use similar skills and perform similar activities. The primary difference is that managers in businesses direct their activities toward earning money for the company and its owners, whereas managers in nonprofits direct their efforts toward generating some kind of social impact. The characteristics and needs of nonprofit organizations created by this distinction present unique challenges for managers.58 Many nonprofits are designed to help in a crisis, but a crisis can also devastate a nonprofit organization.59 For example, Stephanie Cartier spent nearly 3 years building up her nonprofit No Limits, a café operated by people with intellectual disabilities. Cartier started the organization to benefit a daughter with Down syndrome and others like her. It took only a few days for the COVID-19 tidal wave to close the restaurant indefinitely.60 During the COVID-19 pandemic, practically every nonprofit was receiving less revenue, and many had skyrocketing demand. Crucial spring fundraisers were cancelled and donors were stretched across more requests while feeling less prosperous after the stock market crash. Rules against large gatherings forced the closing of many nonprofit offices and facilities. Managers at Meals on Wheels in Portland, Oregon, closed 22 neighborhood dining locations and switched to a no-touch delivery system for the organization’s 15,000 clients. To reduce contact even more, deliveries were cut to only three days a week. Demand soared from a typical 10 to 15 new meal requests per day to around 100. Offsetting this demand, managers were able to sign up new volunteers at an equally fast rate.61 Financial resources for government and charity nonprofit organizations typically come from taxes, appropriations, grants, and donations rather than from the sale of products or services to customers. In businesses, managers focus on improving the organization’s products and services to increase sales revenues. In nonprofits, however, services are typically provided to nonpaying clients, and a major problem for many organizations is securing a steady stream of funds to continue operating. Nonprofit managers, committed to serving clients with limited resources, must focus on keeping organizational costs as low as possible.62 Donors generally want their money to go directly to helping clients rather than for overhead costs. Some types of nonprofit organizations, such as hospitals and private universities that obtain revenues from selling services to clients, do have to contend with a bottom line in the sense of having to generate enough revenues to cover expenses. In such ventures, managers often struggle with the question of what constitutes results and effectiveness. It is easy to measure revenues compared to expenses, but the metrics of success in nonprofits are typically much more ambiguous. Managers have to account for intangibles such as “improve public health,” “upgrade the quality of education,” or “increase appreciation for the arts.” This intangible nature also makes it more difficult to gauge the performance of employees and managers. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 23 Get Complete eBook Download By email at student.support@hotmail.com 24 Part 1 Introduction to Management Recipe for Success Second Harvest Food Bank of Middle Tennessee NurPhoto/Getty Images Second Harvest Food Bank of Middle Tennessee cut waste by 50 percent after managers decided to invest in new technology to manage inventory. Like other food banks, Second Harvest needs to deliver perishable items before they expire and save as many canned and dried foods as it can to distribute in the months when donations tend to decline. Second Harvest managers didn’t have the millions of dollars that Amazon.com or Walmart stores have poured into their own specialized inventory management systems, but with the cost of technology declining, they were able to buy logistics software that records when food products are received and their “use-by” dates. Volunteers and employees rely on automated alerts to let them know when goods are expiring and where they are located in the warehouse. The ability to know in an instant what needs to be used immediately and what can be stored for later use helps Second Harvest get the most out of its limited resources.63 An added complication is that managers in some types of nonprofits depend on volunteers and donors, who cannot be supervised and controlled in the same way that a business manager deals with employees. Many people who move from the corporate world to a nonprofit are surprised to find that the work hours are often longer and the stress level greater than in their previous management jobs. The roles defined by Mintzberg also apply to nonprofit managers, but they may differ somewhat. We might expect managers in nonprofit organizations to place more emphasis on the roles of spokesperson (to “sell” the organization to donors and the public), leader (to build a mission-driven community of employees and volunteers), and resource allocator (to distribute government resources or grant funds that are often assigned in a top-down manner). Managers in nonprofit organizations must carefully decide how to allocate resources. Managers in all organizations—large corporations, small businesses, and nonprofit organizations—carefully integrate and adjust the management functions and roles to meet challenges within their own circumstances and keep their organizations healthy. Remember This ● ● ● Good management is just as important for nonprofit organizations as it is for small businesses and large corporations. Managers in these organizations adjust and integrate the various management functions, activities, and roles to meet the unique challenges they face. ● ● Managers in nonprofit organizations direct their efforts toward generating some kind of social impact rather than toward making money for the organization. Managers in nonprofit organizations often struggle with what constitutes effectiveness. Second Harvest Food Bank of Middle Tennessee invested in new technology to manage inventory and allocate resources more efficiently. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com 25 Chapter 1 Leading Edge Management 1-8 T he Historical Struggle: The Things of Production Versus the Humanity of Production John Bunch used to be a technical adviser at online retailer Zappos. Today, Bunch doesn’t have a title—no one at Zappos does. Zappos did away with all job titles and abolished the organizational hierarchy in favor of a radical system of self-management called holacracy. Five hundred departments evolved into 500 impermanent “circles” made up of numerous self-managed teams. No one has a supervisor, and employees voluntarily join the various circles, where they come up with their own job descriptions and decide which projects they will undertake.64 Managers are watching to see how this extreme Theory Y approach will work at Zappos (Theory Y is explained in detail later in the chapter). Managers at a number of companies are embracing this trend toward less-hierarchical, even bossless, organizations, which we described earlier in this chapter. Some organizations will continue to operate with little or no hierarchy, whereas others will move toward a more hierarchical structure. Managers are always on the lookout for fresh ideas, groundbreaking management approaches, and new tools and techniques. Management philosophies and organizational forms change over time to meet new needs and respond to current challenges. The workplace of today is different from what it was 50 years ago—indeed, from what it was even 10 years ago—yet historical concepts form the backbone of management education.65 In addition, some management practices that seem modern have actually been around for a long time. Techniques can gain and lose popularity because of shifting historical forces and the persistent need to balance human needs with the needs of production activities.66 This section provides a historical overview of the ideas, theories, and management philosophies that have contributed to making the workplace what it is today. The final section of the chapter looks at some recent trends and current approaches that build on this foundation of management understanding. This foundation illustrates that the value of studying management lies not in learning current facts and research, but rather in developing a perspective that will facilitate the broad, long-term view needed for management success. Studying history doesn’t mean merely arranging events in chronological order; it means developing an understanding of the impact of societal forces on organizations. Studying history is a way to achieve strategic thinking, see the big picture, and improve conceptual skills. Management practices and perspectives vary in response to social, political, and economic changes in the larger society.67 Exhibit 1.9 illustrates the evolution of significant management Exhibit 1.9 Management Perspectives over Time The People-Driven Workplace (Employee Engagement, Radical Decentralization) The Technology-Driven Workplace (Internet of Things, Big Data Analytics) Artificial Intelligence (Administration, Nudge Management) Total Quality Management Contingency View Systems Thinking Humanistic Perspective (Humanity of Production) Classical Perspective (Things of Production) 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com 26 Part 1 Introduction to Management Exhibit 1.10 The Tension Between Historical Forces in Management Thinking Focus on Things of Production: Management focus is on production efficiency via organization design and workflow systems and control Organization Focus on Humanity of Production: Management focus is on meeting human needs for greater motivation and engagement to increase effectiveness perspectives over time. This timeline reflects the dominant time period for each approach, but elements of each continue to be used in organizations today.68 One observation from looking at the timeline in Exhibit 1.9 is that the earliest focus of management (the classical perspective), dating from more than a century ago, was on the things of production. In other words, the needs of people were often ignored in the interest of higher production efficiency and profit. By the 1920s and 1930s, the needs of and positive treatment of employees were discovered as another path to efficiency and profit. Since then, there has been a struggle of sorts within management to balance a management preference for “the things of production” versus a consideration of “the humanity of production.”69 Exhibit 1.10 illustrates the management struggle between the desire for efficient production and the desire to meet human needs for greater motivation. When forces either outside or within the organization suggest a need for change to improve efficiency or effectiveness, managers have often responded with a technology- or numbersoriented solution that assumes people are little more than cogs in a big machine. For instance, as the United States shifted from a world of small towns and small businesses to an industrialized network of cities and factories in the late nineteenth century, people began looking at management as a set of scientific practices that could be measured, studied, and improved with machinelike precision (the classical perspective). Frederick Taylor wrote, “the best management is a true science, resting upon clearly defined laws, rules, and principles.”70 By the 1920s, a minor rebellion had occurred against this emphasis on the quantifiable, with the public calling for more attention to human and social needs (the humanistic perspective). This dilemma—the scientific numbers-driven push for greater productivity and profitability and the call for more humanistic, people-oriented management—has continued to the present day. In this section, we look first at management approaches that focus primarily on production and efficiency (the things of production). Later in the chapter, we will examine management approaches that focus more on human needs (the humanity of production). Remember This ● ● ● Managers are always on the lookout for new techniques and approaches to meet shifting organizational needs. Zappos did away with the organizational hierarchy in favor of a radical system of self-management called holacracy. ● ● Management and organizations are shaped by forces within the larger society. The struggle to balance “the things of production” with the “humanity of production” has continued from the nineteenth century to today. Looking at history gives managers a broader perspective for interpreting and responding to current opportunities and problems. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management 1-9 Classical Perspective Hulton Archive/Getty Images Although the practice of management can be traced to 3000 b.c. and the first government organizations developed by the Sumerians and Egyptians, the formal study of management is relatively recent.71 The early study of management as we know it today began with what is now called the classical perspective. The classical perspective on management (primary focus on the things of production) emerged during the nineteenth and early twentieth centuries. The factory system that began to appear in the 1800s posed challenges that earlier organizations had not encountered. Problems arose in tooling the plants, organizing managerial structure, training employees (many of whom were non-English-speaking immigrants), scheduling complex manufacturing operations, and Concept Connection dealing with increased labor dissatisfaction and resulting strikes. Automaker Henry Ford made extensive use of These myriad new problems and the development of large, comFrederick Taylor’s scientific management techplex organizations demanded a new approach to coordination and niques, as illustrated by this automobile assembly control, and a “new sub-species of economic man—the salaried line at a Ford plant circa 1930. Ford replaced workers manager”72—was born. Between 1880 and 1920, the number of with machines for heavy lifting and moving autos professional managers in the United States grew from 161,000 to from one worker to the next. This reduced worker more than 1 million.73 These professional managers began develophours and improved efficiency and productivity. ing and testing solutions to the mounting challenges of organizing, Under this system, a Ford car rolled off the assembly coordinating, and controlling large numbers of people and increasing line every 10 seconds. worker productivity. Thus began the evolution of modern management with the classical perspective. This perspective contains four subfields, each with a slightly different emphasis: scientific management, bureaucratic organizations, administrative principles, and management science.74 1-9a Scientific Management Scientific management emphasizes scientifically determined jobs and management practices as the way to improve efficiency and labor productivity. In the late 1800s, a young engineer, Frederick Winslow Taylor (1856–1915), proposed that workers “could be retooled like machines, their physical and mental gears recalibrated for better productivity.”75 Taylor insisted that improving productivity meant that management itself would have to change and, further, that the manner of change could be determined only by scientific study; hence, the label scientific management emerged. Taylor suggested that decisions based on rules of thumb and tradition be replaced with precise procedures developed after careful study of individual situations.76 The scientific management approach is illustrated by the unloading of iron from rail cars and reloading finished steel for the Bethlehem Steel plant in 1898. Taylor calculated that with the correct movements, tools, and sequencing, each man was capable of loading 47.5 tons per day instead of the typical 12.5 tons. He also worked out an incentive system that paid each man $1.85 a day for meeting the new standard, an increase from the previous rate of $1.15. Productivity at Bethlehem Steel shot up overnight. Although known as the father of scientific management, Taylor was not alone in this area. Henry Gantt, an associate of Taylor’s, developed the Gantt chart, a bar graph that measures planned and completed work along each stage of production by time elapsed. Two other important pioneers in this area were the husband-and-wife team of Frank B. and Lillian M. Gilbreth. Frank B. Gilbreth (1868–1924) pioneered time and motion study and arrived at many of his management techniques independent of Taylor. He stressed efficiency and was known for his quest for the one best way to do work. Although Gilbreth is known for his early work with bricklayers, his work had its great impact on medical surgery, drastically reducing the amount of time that patients spent on the operating table. Surgeons were able to save countless lives through the application of time and motion study. Lillian M. Gilbreth (1878–1972) was more interested in Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 27 28 Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management Exhibit 1.11 Characteristics of Scientific Management General Approach Contributions Criticisms Developed standard method for performing each job Selected workers with appropriate abilities for each job Trained workers in standard methods Supported workers by planning their work and eliminating interruptions Provided wage incentives to workers for increased output Demonstrated the importance of compensation for performance Initiated the careful study of tasks and jobs Demonstrated the importance of personnel selection and training Did not appreciate the social context of work and higher needs of workers Did not acknowledge variance among individuals Tended to regard workers as uninformed and ignored their ideas and suggestions the human aspect of work. When her husband died at the age of 56, she had 12 children ages 2 to 19. The undaunted “first lady of management” went right on with her work. She presented a paper in place of her late husband, continued their seminars, consulted, lectured, and eventually became a professor at Purdue University.77 She pioneered in the field of industrial psychology and made substantial contributions to human resource management. Exhibit 1.11 shows the basic ideas of scientific management. To use this approach, managers should develop standard methods for doing each job, select workers with the appropriate abilities, train workers in the standard methods, support workers and eliminate interruptions, and provide wage incentives. The ideas of scientific management that began with Taylor dramatically increased productivity across all industries, and they remain important today. Indeed, the idea of engineering work for greater productivity has enjoyed a renaissance in the retail industry. Supermarket chains such as Meijer Inc. and Hannaford, for example, use computerized labor waste elimination systems based on scientific management principles. These systems break down tasks such as greeting a customer, working the register, scanning items, and so forth into quantifiable units and devise standard times for completing each task. Executives say computerized systems have allowed supermarket managers to staff stores more efficiently because people are routinely monitored by computer and are expected to meet strict standards.78 A Harvard Business Review article discussing innovations that shaped modern management puts scientific management at the top of its list of 12 influential innovations. Indeed, the ideas of creating a system for maximum efficiency and organizing work for maximum productivity are deeply embedded in our organizations.79 However, because scientific management ignores the social context and workers’ needs, it can lead to increased conflict and clashes between managers and employees. The United Food and Commercial Workers Union, for instance, filed a grievance against Meijer in connection with its cashier-performance system. Under such performance management systems, workers often feel exploited—a sharp contrast from the harmony and cooperation that Taylor and his followers had envisioned. 1-9b Bureaucratic Organizations A systematic approach developed in Europe that looks at the organization as a whole is the bureaucratic organizations approach, a subfield within the classical perspective. Max Weber (1864–1920), a German theorist, introduced most of the concepts on bureaucratic organizations.80 During the late 1800s, many European organizations were managed on a personal, family-like basis. Employees were loyal to a single individual rather than to the organization or its mission. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management Exhibit 1.12 Characteristics of Weberian Bureaucracy Division of labor, with clear definitions of authority and responsibility Personnel selected and promoted based on technical qualifications Positions organized in a hierarchy of authority Administrative acts and decisions recorded in writing Managers subject to rules and procedures that will ensure reliable, predictable behavior Management separate from the ownership of the organization SOURCE: Adapted from Max Weber, The Theory of Social and Economic Organizations, ed. and trans. A. M. Henderson and Talcott Parsons (New York: Free Press, 1947), pp. 328–337. The dysfunctional consequence of this management practice was that resources were used to realize individual desires rather than organizational goals. Employees in effect owned the organization and used resources for their own gain rather than to serve customers. Weber envisioned organizations that would be managed on an impersonal, rational basis. This form of organization was called a bureaucracy. Exhibit 1.12 summarizes the six characteristics of bureaucracy as specified by Weber. Weber believed that an organization based on rational authority would be more efficient and adaptable to change because continuity is related to formal structure and positions rather than to a particular person, who may leave or die. To Weber, rationality in organizations meant employee selection and advancement based not on whom you know, but rather on competence and technical qualifications, which are assessed by examination or according to specific training and experience. The organization relies on rules and written records for continuity. In addition, rules and procedures are impersonal and applied uniformly to all employees. Distinct definitions of authority and responsibility and clearly defined duties create a clear division of labor. Positions are organized in a hierarchy, with each position under the authority of a higher one. Managers give orders successfully based on the legal power invested in the managerial position, not on the basis of their personality. The term bureaucracy has taken on a negative meaning in today’s organizations and is associated with endless rules and red tape. We have all been frustrated by waiting in long lines or following seemingly silly procedures. However, the value of bureaucratic principles is still evident in many organizations, such as United Parcel Service (UPS), sometimes nicknamed Big Brown. “If you have a reputation as a big, stiff bureaucracy, you’re stuck.” —Jack Welch, Former CEO of General Electric Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 29 30 Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management UPS is the largest package delivery company in the world. One important factor in the company’s success is the concept of bureaucracy. UPS operates according to meticulous rules and regulations. Strict dress codes are enforced. New drivers attend intensive training courses and memorize the company’s more than 600 mandatory “methods,” including precise steps for how to correctly deliver a package, such as how to load the truck, how to fasten their seat belts, how to walk, and how to carry their keys. Specific safety rules apply to drivers, loaders, clerks, and managers. Drivers use delivery-information acquisition devices that record the time and location of all deliveries, and more than 200 sensors on each delivery truck track everything from backup speeds to seat-belt use. Current CEO David Abney began his career as a part-time package loader while in college and worked his way up the hierarchy.81 Clearly, there are both positive and negative aspects associated with bureaucratic principles, an issue with which Weber also struggled.82 Although he perceived bureaucracy as a threat to basic personal liberties, he recognized it as the most efficient and rational form of organizing. Rules and other bureaucratic procedures provide a standard way of guiding employee behavior. Everyone gets equal treatment, and everyone knows what the rules are. Almost every organization needs to have some rules, and rules multiply as organizations grow larger and more complex. Rules governing employee behavior in a furniture manufacturing company, for example, might include:83 ● ● ● ● Employees must wear protective eye and ear equipment when using machines. Employees must carry out any reasonable duty assigned to them, including shop maintenance. Employees must maintain an accurate time sheet, which shows job and activity. The following will be considered causes for dismissal: excessive tardiness or absenteeism; willful damage to equipment; continual careless or unsafe behavior; theft; being under the influence of alcohol or illegal drugs while at work. 1-9c Administrative Principles Another major subfield within the classical perspective is known as the administrative principles approach. Whereas scientific management focuses on the productivity of the individual worker, the administrative principles approach considers the total organization. A major contributor to this approach was Henri Fayol (1841–1925), a French mining engineer who worked his way up to become head of a large mining group known as Comambault. Pieces of Comambault survive today as part of ArcelorMittal, the world’s largest steel and mining company. In his later years, Fayol wrote down his concepts on administration, based largely on his own management experiences.84 In his most significant work, General and Industrial Management, Fayol discussed 14 general principles of management, several of which are part of management philosophy today. For example: ● ● ● ● Unity of command. Each subordinate receives orders from one—and only one—superior. Division of work. Managerial work and technical work are amenable to specialization to produce more and better work with the same amount of effort. Unity of direction. Similar activities in an organization should be grouped together under one manager. Scalar chain. A chain of authority extends from the top to the bottom of the organization and should include every employee. Fayol felt that these principles could be applied in any organizational setting. He also identified five basic functions or elements of management: planning, organizing, commanding, coordinating, and controlling. These functions underlie much of the general approach to today’s management theory. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management Another significant contributor to the administrative principles approach was Charles Clinton Spaulding, who has been called the “father of African-American management.”85 Spaulding, the son of a farmer, worked his way up to become president of North Carolina Mutual Life Insurance Company (the Mutual), the largest and oldest African American life insurance company in the United States. In his classic 1927 article, “The Administration of Big Business,” Spaulding outlined eight “fundamental necessities,” many of which were later addressed by Fayol. For example:86 ● ● ● ● Authority and responsibility. There should be a manager who has the responsibility and authority to decide on every fundamental issue. Division of labor. Departmental divisions should function separately under the direction of managers. Adequate manpower. There must be a reliable system for acquiring and training the best employees. Cooperation and teamwork. Cooperation, unity, and regular communication among managers is essential. Spaulding applied the principles as leader of the Mutual, and his ideas continue to influence management thought and practice. Remember This ● ● ● ● ● The study of modern management began in the late nineteenth century with the classical perspective, which took a rational, scientific approach to management and sought to turn organizations into efficient operating machines. Scientific management is a subfield of the classical perspective that emphasizes scientifically determined changes in management practices as the solution to improving labor productivity. ● ● ● Frederick Winslow Taylor is known as “the father of scientific management.” Scientific management is considered one of the most significant innovations influencing modern management. Some supermarket chains are using computerized systems based on scientific management principles to schedule employees for maximum efficiency. ● Another subfield of the classical perspective is the bureaucratic organizations approach, which emphasizes management on an impersonal, rational basis through elements such as clearly defined authority and responsibility, formal recordkeeping, and separation of management and ownership. Max Weber introduced most of the concepts about bureaucratic organizations. The administrative principles approach is a subfield of the classical perspective that focuses on the total organization rather than the individual worker and delineates the management functions of planning, organizing, commanding, coordinating, and controlling. Henri Fayol and Charles Clinton Spaulding were major contributors to the administrative principles approach. Fayol outlined 14 general principles of management, several of which are a part of management philosophy today. 1-9d Management Science Another management approach that falls within the classical perspective is management science, which dates from the mid-twentieth century. World War II caused many management changes. To handle the massive and complicated problems associated with modern global warfare, managerial Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 31 Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management decision makers needed more sophisticated tools than ever before. Management science, also referred to as the quantitative perspective, provided a way to address those problems. This view is distinguished for its application of mathematics, statistics, and other quantitative techniques to management decision making and problem solving. During World War II, groups of mathematicians, physicists, and other scientists were formed to solve military problems that frequently involved moving massive amounts of materials and large numbers of people quickly and efficiently. Managers soon saw how such quantitative techniques could be applied to large-scale business firms.87 Picking up on techniques developed for the military, scholars began cranking out numerous mathematical tools for corporate managers, such as the application of linear programming for optimizing operations, statistical process control for quality management, and the capital asset pricing model.88 These efforts were enhanced by the development and perfection of the computer. Coupled with the growing body of statistical techniques, computers made it possible for managers to collect, store, and process large volumes of data for quantitative decision making, and the quantitative approach is widely used today by managers in a variety of industries. For example, the Walt Disney Company used quantitative techniques to develop FastPass, a sophisticated computerized system that spares people the ordeal of standing in long lines for the most popular rides at its amusement parks. Disney theme parks have machines that issue coupons with a return time that’s been calculated based on the number of people standing in the actual line, the number who have already obtained passes, and each ride’s capacity. The next generation of technology, FastPass1, lets visitors book times for rides before they even leave home for their Disney vacation.89 Concept Connection At Catholic Health Partners, a nonprofit hospital, hospice, and wellness center system that spans a number of Midwestern states, information technology (IT) is a top priority. Many health care firms are becoming digital organizations because advanced IT is critical to the efficient running of all aspects of the health care system, as well as to maintaining up-to-the-minute, completely accurate patient records. Kaspars Grinvalds/Shutterstock.com 32 Let’s look at three subsets of management science. First, operations research grew directly out of the World War II military groups (called operational research teams in Great Britain and operations research teams in the United States).90 It consists of mathematical model building and other applications of quantitative techniques to managerial problems. Second, operations management refers to the field of management that specializes in the physical production of goods or services. Operations management specialists use management science to solve manufacturing problems. Some commonly used methods are forecasting, inventory modeling, linear and nonlinear programming, queuing theory, scheduling, simulation, and breakeven analysis. Third, information technology (IT) is the most recent subfield of management science, and it is often reflected in management information systems designed to provide relevant information to managers in a timely and cost-efficient manner. IT has evolved to include intranets and extranets, as well as various software programs that help managers estimate Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com 33 Chapter 1 Leading Edge Management Inside an unmarked building in Austin, Texas, a complicated robotic system, called Daisy, disassembles unusable iPhones into scraps of pure plastic, metal, and glass. Apple management prides itself on its green credentials. All of Apple’s facilities worldwide, for example, became 100 percent powered by renewable energy in 2018. Now managers have turned to another thorny problem—the often-toxic waste from discarded electronic gear. World e-waste in 2016 was the equivalent of 4,500 Eiffel Towers. At Apple, management’s goal is to recycle all unusable iPhones and eventually make all Apple products from recycled material. Daisy represents a breakthrough in electronic recycling and a crucial step toward management’s goals. The robot debuted last year and can disassemble 200 iPhones an hour. Together this machine and another Daisy in the Netherlands are disassembling about 1 million iPhones collected Don’t Toss That iPhone! oneinchpunch/Shutterstock.com Creating a Greener World through Apple’s trade-in program. So remember, don’t toss that iPhone! SOURCE: Erika Fry and Matt Heimer, “Someday, Your New Phone Could Be Made from Your Old Phone,” Fortune (September 2019): 78. costs, plan and track production, manage projects, allocate resources, and schedule employees. The term digital organization is becoming popular as computers and the Internet take over more tasks in organizations, to the point where digital technology becomes a primary competitive weapon in both internal and external operations. Most of today’s organizations have operations and digital specialists who use quantitative techniques to solve complex organizational problems. One problem many organizations face today is how to dispose of old smartphones. Apple invented a recycling solution described in the “Creating a Greener World” feature. As events in the mortgage and finance industries show, relying too heavily on quantitative techniques can cause problems for managers. Some observers believe the U.S. economy is still feeling the effects of the mortgage crisis more than a decade after it erupted in 2007–2008. Mortgage companies used quantitative models that showed that their investments in subprime mortgages would be okay even if default rates hit historically high proportions. However, the models didn’t take into account that no one before in history had thought it made sense to give $500,000 loans to people making minimum wage!91 “Quants” also came to dominate organizational decisions in other financial firms. The term quants refers to financial managers and others who base their decisions on complex quantitative analysis, under the assumption that using advanced mathematics and sophisticated computer technology can accurately predict how the market works and help them reap huge profits. The virtually exclusive use of these quantitative models led aggressive traders and managers to take enormous risks. When the market began to go haywire in 2008 as doubts about subprime mortgages grew, the models went haywire as well. Stocks predicted to go up went down, and vice versa. Events that were predicted to happen only once every 10,000 years happened three days in a row in the market madness.92 The overall classical perspective as an approach to management was very powerful and gave companies fundamental new skills for establishing high productivity and effective treatment of employees. Indeed, the United States surged ahead of the world in management techniques, and other countries, especially Japan, borrowed heavily from American ideas. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com 34 Part 1 Introduction to Management Remember This ● ● ● Management science became popular based on its successful application in solving military problems during World War II. Management science, also called the quantitative perspective, uses mathematics, statistical techniques, and computer technology to facilitate management decision making, particularly for complex problems. The Walt Disney Company uses management science to solve the problem of long lines for popular rides and attractions at its theme parks. ● ● ● Three subsets of management science are operations research, operations management, and information technology (IT). A digital organization is one in which computers and the Internet take over more tasks in organizations, to the point where digital technology becomes a primary competitive weapon in both internal and external operations. Quants have come to dominate decision making in financial firms, and the Wall Street meltdown in 2007–2008 shows the danger of relying too heavily on a quantitative approach. 1-10 Humanistic Perspective The humanistic perspective on management (primary focus on the humanity of production) emphasizes the importance of understanding human behaviors, needs, and attitudes in the workplace, as well as social interactions and group processes.93 There are three primary subfields based on the humanistic perspective: the human relations movement, the human resources perspective, and the behavioral sciences approach. National Archives 1-10a Early Advocates Concept Connection This 1914 photograph shows the initiation of a new arrival at a Nebraska planting camp. This initiation was not part of the formal rules and illustrates the significance of the informal organization described by Barnard. Social values and behaviors were powerful forces that could either help or hurt the planting organization, depending on how they were managed. Two early advocates of a more humanistic approach were Mary Parker Follett and Chester I. Barnard. Mary Parker Follett (1868–1933) was trained in philosophy and political science, but she applied herself in many fields, including social psychology and management. She wrote of the importance of common superordinate goals for reducing conflict in organizations.94 Her work was popular with businesspeople of her day but was often overlooked by management scholars.95 Follett’s ideas served as a contrast to scientific management and are re-emerging as applicable for modern managers dealing with rapid changes in today’s global environment. Her approach to leadership stressed the importance of people rather than engineering techniques. She offered the pithy admonition, “Don’t hug your blueprints,” and analyzed the dynamics of management– organization interactions. Follett addressed issues that are timely today, such as ethics, power, and leading in a way that encourages employees to give their best. The concepts of empowering, facilitating rather than controlling employees, and allowing employees to act depending on the authority of the situation opened new areas for theoretical study by Chester Barnard and others.96 Chester I. Barnard (1886–1961) studied economics at Harvard but failed to receive a degree because he did not take a course in laboratory science. He went to work in the statistical department of AT&T, and in 1927, he became president of New Jersey Bell. One of Barnard’s significant contributions was the concept of the informal organization. The informal organization occurs within all formal organizations and includes cliques, informal networks, and naturally occurring social groupings. Barnard argued that organizations are not machines and stressed that informal relationships are powerful forces that can help the organization if properly managed. Another significant contribution was his Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management 35 acceptance theory of authority, which states that people have free will and can choose whether to follow management orders. People typically follow orders because they perceive a positive benefit to themselves, but they do have a choice. Managers should treat employees properly because their acceptance of authority may be critical to organization success in important situations.97 1-10b Human Relations Movement The human relations movement was based on the idea that truly effective control comes from within the individual worker rather than from strict, authoritarian control.98 This school of thought recognized and directly responded to social pressures for enlightened treatment of employees. The early work on industrial psychology and personnel selection received little attention because of the prominence of scientific management. Then a series of studies at a Chicago electric company, which came to be known as the Hawthorne studies, changed all that. Beginning about 1895, a struggle developed between manufacturers of gas and electric lighting fixtures for control of the residential and industrial market.99 By 1909, electric lighting had begun to win, but the increasingly efficient electric fixtures used less total power, which was less profitable for the electric companies. The electric companies began a campaign to convince industrial users that they needed more light to get more productivity. When advertising did not work, the industry began using experimental tests to demonstrate their argument. Managers were skeptical about the results, so the Committee on Industrial Lighting (CIL) was set up to run the tests. To further add to the tests’ credibility, Thomas Edison was made honorary chairman of the CIL. In one test location—the Hawthorne plant of the Western Electric Company—some interesting events occurred. The major part of this work involved four experimental and three control groups. In all, five different tests were conducted. These pointed to the importance of factors other than illumination in affecting productivity. To examine these factors more carefully, numerous other experiments were conducted.100 The results of the most famous study, the first Relay Assembly Test Room (RATR) experiment, were extremely controversial. Under the guidance of two Harvard professors, Elton Mayo and Fritz Roethlisberger, the RATR studies lasted nearly six years (May 10, 1927–May 4, 1933) and involved 24 separate experimental periods. So many factors were changed and so many unforeseen factors uncontrolled that scholars disagree on the factors that truly contributed to the general increase in performance over that time period. Most early interpretations, however, agreed on one point: Money was not the cause of the increased output.101 Instead, it was believed that the factor that best explained increased output was human relations. Employees performed better when managers treated them in a positive manner. Recent reanalyses of the experiments have revealed that numerous factors were different for the workers involved, and some suggest that money may well have been the single most important factor.102 An interview with one of the original participants revealed that just getting into the experimental group meant a huge increase in income.103 This is the Relay Room of the Western Electric Hawthorne, Illinois, plant in 1927. Six women worked in this relay assembly test room during the controversial experiments on employee productivity. Professors Mayo and Roethlisberger evaluated conditions such as rest breaks and workday length, physical health, amount of sleep, and diet. Experimental changes were fully discussed with the women and were abandoned if they disapproved. Gradually, the researchers began to realize they had created a change in supervisory style and human relations, which they believed was the true cause of the increased productivity. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. © Western Electric Photographic Services Concept Connection Get Complete eBook Download By email at student.support@hotmail.com 36 Part 1 Introduction to Management These new data clearly show that money mattered a great deal at Hawthorne. In addition, worker productivity increased partly as a result of the increased feelings of importance and group pride that employees felt by virtue of being selected for this important project and the camaraderie that developed among group members.104 One unintended contribution of the experiments was a rethinking of field research practices. Researchers and scholars realized that the researcher can influence the outcome of an experiment by being too closely involved with research subjects. This phenomenon has come to be known as the Hawthorne effect in research methodology. Subjects behaved differently because of the active participation of researchers in the Hawthorne experiments.105 From a historical perspective, whether the studies were academically sound is less important than the fact that they stimulated an increased interest in looking at employees as more than extensions of production machinery. The interpretation that employees’ output increased when managers treated them in a positive manner started a revolution in worker treatment aimed at improving organizational productivity. Despite flawed methodology or inaccurate conclusions, the findings provided the impetus for the human relations movement. This approach shaped management theory and practice for well over a quarter-century, and the belief that human relations is the best area of focus for increasing productivity persists today. Take a Moment: Know Yourself What Is Your Manager Frame?106 Answer these questions for feedback about how your personal manager frame of reference relates to the perspectives described in this chapter. For each item, give the number “4” to the phrase that best describes you, “3” to the item that is next best, and so on down to “1” for the item that is least like you. 1. My strongest skills are: a. Analytical skills b. Interpersonal skills c. Political skills d. Flair for drama 2. The best way to describe me is: a. Technical expert b. Good listener c. Skilled negotiator d. Inspirational leader 3. What has helped me the most to be successful is my ability to: a. Make good decisions b. Coach and develop people c. Build strong alliances and a power base d. Inspire and excite others 4. What people are most likely to notice about me is my: a. Attention to detail b. Concern for people c. Ability to succeed in the face of conflict and opposition d. Charisma Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management 5. My most important leadership trait is: a. Clear, logical thinking b. Caring and support for others c. Toughness and aggressiveness d. Imagination and creativity 6. I am best described as: a. An analyst b. A humanist c. A politician d. A visionary Scoring and Interpretation: Managers typically view their world through one or more mental frames of reference. (1) The structural frame of reference sees the organization as a machine that can be economically efficient and that provides a manager with formal authority to achieve goals. This manager frame was prominent during the era of scientific management and bureaucratic administration. (2) The human resource frame sees the organization as people, with manager emphasis given to support, empowerment, and belonging. This manager frame gained importance with the rise of the humanistic perspective. (3) The political frame sees the organization as a competition for resources to achieve goals, with manager emphasis on negotiation and hallway coalition building. This frame reflects the need within systems theory to have all the parts working together. (4) The symbolic frame of reference sees the organization as a theater—a place to achieve dreams—with the manager emphasizing symbols, vision, culture, and inspiration. This manager frame is important for today’s adaptive organizations. Which frame reflects your way of viewing the world? The first two frames of reference—structural and human resource—are more important for new managers. These two frames usually are mastered first. As managers gain experience and move up the organization, they should both acquire political skills and learn to use symbols for communication. It is important for managers not to become stuck for years in one way of viewing the organization because their progress may be limited. Many managers evolve through and master each of the four frames as they become more skilled and experienced. Compute your scores as follows: ST 5 1a 1 2a 1 3a 1 4a 1 5a 1 6a 5 HR 5 1b 1 2b 1 3b 1 4b 1 5b 1 6b 5 PL 5 1c 1 2c 1 3c 1 4c 1 5c 1 6c 5 SY 5 1d 1 2d 1 3d 1 4d 1 5d 1 6d 5 The higher score represents your way of viewing the organization and will influence your management style. 1-10c Human Resources Perspective The human relations movement initially espoused a dairy farm view of management: Just as contented cows give more milk, so satisfied workers will produce more work. Gradually, views with deeper content that elevated the “humanity of production” began to emerge. The human resources perspective maintained an interest in worker participation and considerate leadership but shifted the emphasis to considering the daily tasks that people perform. This perspective combines prescriptions for design of job tasks with theories of motivation.107 In the human resources view, jobs should be designed so that tasks are not perceived as dehumanizing or demeaning but instead allow workers to use their full potential. Two of the best-known contributors to the human resources perspective were Abraham Maslow and Douglas McGregor. Abraham Maslow (1908–1970), a practicing psychologist, observed that his patients’ problems usually stemmed from an inability to satisfy their needs. Thus, he generalized his work and suggested a hierarchy of needs. Maslow’s hierarchy started with physiological needs and progressed to safety, belongingness, esteem, and, finally, self-actualization needs. Chapter 12 discusses his ideas in more detail. Douglas McGregor (1906–1964) had become frustrated with the early, simplistic human relations notions while president of Antioch College in Ohio. He challenged both the classical perspective and the early human relations assumptions about human behavior. Based on his experiences as a manager and consultant, his training as a psychologist, and the work of Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 37 38 Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management Exhibit 1.13 Theory X and Theory Y Assumptions of Theory X • The average human being has an inherent dislike of work and will avoid it if possible. • Because of the human characteristic of dislike for work, most people must be coerced, controlled, directed, or threatened with punishment to get them to put forth adequate effort toward the achievement of organizational objectives. • The average human being prefers to be directed, wishes to avoid responsibility, has relatively little ambition, and wants security above all. Assumptions of Theory Y • The expenditure of physical and mental effort in work is as natural as play or rest. The average human being does not inherently dislike work. • External control and the threat of punishment are not the only means for bringing about effort toward organizational objectives. A person will exercise self-direction and self-control in the service of objectives to which that person is committed. • The average human being learns, under proper conditions, not only to accept but also to seek responsibility. • The capacity to exercise a relatively high degree of imagination, ingenuity, and creativity in the solution of organizational problems is widely—not narrowly—distributed in the population. • Under the conditions of modern industrial life, the intellectual potentialities of the average human being are only partially utilized. SOURCE: Douglas McGregor, The Human Side of Enterprise (New York: McGraw-Hill, 1960), pp. 33–48. © McGraw-Hill Companies, Inc. Reprinted by permission. Maslow, McGregor formulated Theory X and Theory Y, which are explained in Exhibit 1.13.108 McGregor believed that the classical perspective was based on Theory X assumptions about workers. He also felt that a slightly modified version of Theory X fit early human relations ideas. In other words, human relations ideas did not go far enough. McGregor proposed Theory Y as a more realistic view of workers for guiding management thinking. Theory Y suggests that organizations can take advantage of the imagination and intellect of all their employees. It assumes that employees will exercise self-direction and self-control to contribute to organizational goals when given the opportunity. A few companies today still use Theory X management, but many are using Theory Y techniques. Some are doing away with bosses altogether, such as Zappos, described in the opening example. Another company that provides a good illustration of applying Theory Y assumptions to tap into employee creativity and mind power is the Netherlands-based home health care organization Buurtzorg. Made from Scratch Buurtzorg When Buurtzorg needs to rent new office space, the decision isn’t made by administrators or consultants. Instead, teams of nurses decide where the offices will be located. The same goes for deciding which patients to serve, how to allocate resources and tasks, which doctors to work with, and how to coordinate with local hospitals. Founder Jos de Blok believes that if nurses are entrusted with responsibility, they will do what is best for the patient. Nurses work in self-managed teams of 10 to 12, with a mission of helping people live rich and autonomous lives rather than a goal of providing care as efficiently as possible. Management tasks are spread across team members, with teams even monitoring their own performance and taking corrective action when needed. With more than 9,000 nurses, Buurtzorg needs fewer than 50 administrative and support personnel. Studies have found that Buurtzorg’s self-management system, combined with a holistic approach and innovative technology, results in higher productivity, greater employee and client satisfaction, better patient care, and lower costs than are achieved by other home health care providers.109 For managers like Jos de Blok, command and control is a thing of the past, with the future belonging to those companies that build leadership throughout the organization. The Theory Y approach has helped Buurtzorg grow and succeed and has enabled nurses to provide better care. As described earlier in this chapter, a number of companies are using less hierarchical management systems that rely on Theory Y principles, which are more in line with today’s emphasis on employee engagement and involvement. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management 1-10d Behavioral Sciences Approach The behavioral sciences approach uses scientific methods and draws from sociology, psychology, anthropology, economics, and other disciplines to develop theories about human behavior and interaction in an organizational setting. This approach can be seen in practically every organization. When a company such as Instagram conducts research to determine the best set of tests, interviews, and employee profiles to use when selecting new employees, it is using behavioral science techniques. When Kohl’s department stores or Wendy’s restaurants train new managers in the techniques of employee motivation, most of the theories and findings are rooted in behavioral science research. One specific set of management techniques based in the behavioral sciences approach is organization development (OD). In the 1970s, OD evolved as a separate field that applied the behavioral sciences to improve the organization’s health and effectiveness through its ability to cope with change, improve internal relationships, and increase problem-solving capabilities.110 The techniques and concepts of OD have since been broadened and expanded to address the increasing complexity of organizations and the environment, and OD remains a vital approach for managers. Chapter 8 will discuss OD in detail. Other concepts that grew out of the behavioral sciences approach include matrix organizations, self-managed teams, ideas about corporate culture, and management by wandering around. Indeed, the behavioral sciences approach has influenced most of the tools, techniques, and approaches that managers have applied to organizations since the 1970s. All the remaining chapters of this book contain research findings and management applications that can be attributed to the behavioral sciences approach. Remember This ● ● ● ● ● ● The humanistic perspective emphasizes understanding human behavior, needs, and attitudes in the workplace. Mary Parker Follett and Chester I. Barnard were early advocates of a more humanistic approach to management. ● ● Follett emphasized worker participation and empowerment, shared goals, and facilitating rather than controlling employees. Barnard’s contributions include the acceptance theory of authority. The human relations movement stresses the satisfaction of employees’ basic needs as the key to increased productivity. The Hawthorne studies were important in shaping ideas concerning how managers should treat workers. The human resources perspective suggests that jobs should be designed to meet people’s higher-level needs by allowing employees to use their full potential. ● ● Douglas McGregor formulated Theory X and Theory Y, proposing that managers use Theory Y principles to engage the imagination and intellect of all their employees. Netherlands-based Buurtzorg applied Theory Y principles, with 9,000 nurses working in completely self-managed teams, resulting in higher productivity, greater employee and client satisfaction, and better patient care. The behavioral sciences approach draws from psychology, sociology, and other social sciences to develop theories about human behavior and interaction in an organizational setting. Many current management ideas and practices can be traced to the behavioral sciences approach. 1-11 Management Thinking into the Future All of the ideas and approaches discussed so far in this chapter go into the mix that makes up modern management. Dozens of ideas and techniques in current use can trace their roots to these historical perspectives.111 In addition, innovative concepts continue to emerge to address new management challenges. Wise managers heed the lessons of the past, but also recognize that they and their organizations must change with the times. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 39 40 Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management Managers are always looking for new techniques and approaches that more adequately respond to customer needs and the demands of the environment. The “Recipe for Success” feature lists a wide variety of ideas and techniques used by today’s managers, as revealed by Bain & Company’s recent “Management Tools and Trends” survey. The Bain study also gauges manager attitudes and compares sentiments and tool use in the context of previous surveys. Five important trends noted in the most recent report are a broad move away from hierarchical structures toward empowered teams, a desire to make the most of digital technology, a greater focus on building corporate culture, an emphasis on strengthening customer relationships, and a renewed emphasis on cost control.112 Note that these trends and the tools most used by today’s managers tend to fall into the same dual categories of managing the “things of production” and managing the “humanity of production,” discussed earlier in this chapter. The following sections discuss current approaches in these dual categories by looking at the technology-driven workplace and the people-driven workplace. 1-11a Managing the New Technology-Driven Workplace Managers see IT as presenting both opportunities and threats to their organizations. Two popular uses of new digital technology are big data analytics and platform-based organizations. Made from Scratch Current Use of Management Tools and Trends Over the history of management, many fashions and fads have come and gone. Critics argue that new techniques may not represent permanent solutions. Others believe that managers must adopt new techniques for continuous improvement in a fast-changing world. In 1993, Bain & Company started a large research project to interview and survey thousands of corporate executives about the 25 most popular management tools and techniques. Reengineering (67%) Change management programs (34%) Strategic alliances (62%) Total quality management (34%) Cycle time reduction (55%) Digital transformation (32%) Self-directed teams (55%) Mission and value statements (32%) The Top 10 The chart below shows how the list of the top 10 tools from 2017 (the most recent survey available) compares to the tools managers were using most often in 1993. How many of the tools are you familiar with? 1993 Top 10 Tools 2017 Top 10 Tools Mission and vision statements (88%) Strategic planning (48%) Customer satisfaction (86%) Customer relationship management (48%) Total quality management Benchmarking (46%) (72%) Competitor profiling (71%) Advanced analytics (42%) Benchmarking (70%) Supply chain management (40%) Pay-for-performance (70%) Customer satisfaction (38%) Tool Use over Time The use of management tools rises and falls in cycles. The Bain survey found tool use in 2017 to be near its low, with managers reporting using an average of 7.5 tools, whereas they were using twice that number a decade earlier. You can also see in the chart that even the most popular tools are used by fewer managers than were the tools in the original 1993 survey. Four tools that were used in both 1993 and 2017 are benchmarking, customer satisfaction, total quality management, and mission and vision statements. In the most recent survey, managers ranked strategic planning and customer relationship management at the top of the list. Survey results also show that managers are embracing digital tools such as advanced analytics and digital transformation, which means integrating digital technologies into an organization’s strategy and operations. Globally, tool use increased in AsiaPacific and Latin America. Asia-Pacific managers in particular are adopting new tools faster than managers in other regions. SOURCE: Darrell Rigby and Barbara Bilodeau, “Management Tools and Trends” (April 5, 2018), www.bain.com/insights/management-tools-and-trends-2017/ (accessed January 15, 2019). Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management Big Data Analytics One of the newest business technologies is big data analytics. Big data analytics refers to technologies, skills, and processes for searching and examining massive, complex sets of data that traditional data processing applications cannot handle, with the aim of uncovering hidden patterns and correlations.113 For example, Amazon collects tons of data on its customers, including what they buy, what else they look at, how they navigate through the Web site, how much they are influenced by promotions and reviews, and so forth. The company uses algorithms that predict and suggest what a customer might be interested in buying next. Moreover, the predictions get better every time a customer responds to or ignores a recommendation.114 The most recent increase in the use of digital information technology is driven by the jump from the Internet that connects people to the Internet of Things (IoT), in which impersonal “things” are connected and can themselves generate and receive data by communicating with each other. Now every “thing” can have a chip inserted to communicate data to other devices. A “thing” could be a hairbrush, a home thermostat, a shirt or dress, a toaster, a refrigerator, a fitness collar for your dog, or a baby thermometer. In business, countless tiny sensors can be woven into things as large as a jet engine or a railroad locomotive or a factory machine, all of which are transmitting data via the Internet. Each of these dumb items can become smart, with capability for two-way communication. For example, in a “smart” home, keyless door locks send a text message when activated and containers holding medications “note” whether a patient has taken prescribed pills and send an e-mail or text message reminder.115 Siemens Gamesa, a leader in renewable energy, uses the IoT to maintain the industry’s largest amount of historical data in a database growing daily with data collected from more than 10,000 wind turbines worldwide. Inside each smart turbine are hundreds of sensors that continuously transmit more than 200 GB of data per day to a state-of-the-art diagnostic center in Denmark. At this center, advanced analytics and 24/7 human monitoring convert raw data into valuable insights. Siemens Gamesa uses data analytics techniques and experienced personnel to “see” what is happening inside the wind turbines to prevent unscheduled breakdowns.116 Platform-Based Organizations The IoT also enabled the latest innovation in digital organizing, which is a new platform-based form of organization. The traditional organization form can be thought of as a linear or “pipe” organization. Pipe firms work in a linear order, acquiring resources at one end of the pipe, making stuff within the pipe, and pushing the result out the other end for sale to customers. The pipe represents a sequential process to produce a good or service. Every consumer product that people have used in the past essentially came to us through a pipe organization. All manufacturing runs on a pipe model. Television and radio services are also pipes discharging content for us. The education system is a pipe because teachers push knowledge out of the school pipe.117 Platform-based organizations connect and enable users to both create and consume something of value. As a business, a platform allows users to create value on the platform for other users to consume. In a platform-based organization, producers and consumers are connected via digital technology (computers, smartphones). For example, YouTube or Airbnb are digital connectors that link thousands of independent producers (videographers; individuals with homes, rooms, or apartments for rent) with thousands of consumers (video watchers, vacationers). The owners of the platform-based business provide the software and the central processing computers that connect other people into a self-sustaining system. The users both create and consume any product or service.118 The owners of the platform can earn money by charging a fee for the transaction or by exposing users to advertising. As illustrated in Exhibit 1.14, a platform is a business model that creates value by facilitating exchanges (connections) between people in two or more interdependent groups, usually consumers and producers. To encourage exchanges, platforms create communities that allow users to interact directly with one another via their digital media devices. Platform businesses such as Facebook, Uber, and Alibaba do not create and control inventory via a supply chain in the same way that linear, or pipe, organizations do. Instead, successful platforms facilitate connections by dramatically reducing the cost of exchanges between producers and consumers.119 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 41 42 Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management Exhibit 1.14 A Platform-Based Digital Organization Ecosystem Producers Consumers Platform Enables Connections and Transactions E co syste m Uber is one of the better-known platform-based companies and operates unlike traditional organization forms. Interactions with the company are strictly digital. To get a ride on Uber, you download the app and create an account. When you open the app, your location is detected via GPS. The app also shows nearby drivers on the map. When you agree to the estimated fare, you are connected to an Uber driver within seconds. The driver receives data on the rider’s previous Uber experience and can accept or reject a request. Uber uses a bidirectional rating system to flush out bad riders and drivers, who can be deactivated. You can track the car on your screen as it approaches. The driver has your desired destination in the built-in GPS. When the ride is completed, the fare is automatically paid through the app.120 A platform-based business is a giant change from traditional businesses that use a supply chain and operational processes to make and sell products and services. Platforms do not create stuff and push it out to customers. The fundamental shift in management thinking is that the amount of physical assets a company owns matters less to its value than the resources it can connect. Platform-based organizations like Facebook, Alibaba, Uber, Google, and YouTube quickly became among the largest and most profitable companies in the world. 1-11b Managing the New People-Driven Workplace Organizations are undergoing tremendous changes. Some of these changes are related to new technology, whereas others are brought about primarily because of shifting needs of people. For example, younger employees are seeking more purpose in their work, which often brings changes in workplace cultures and practices. Barry Schwartz, professor of psychology at Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management 43 Swarthmore College and author of Why We Work, says that as “the Millennials ascend, they will change organizations” because “meaning is an important part of their agenda.”121 Two responses to these issues are radical decentralization and a renewed emphasis on employee engagement. Radical Decentralization As noted earlier, the Bain & Company survey of executives around the world found a decided trend toward pushing power and responsibility to frontline employees in organizations. Nearly 80 percent of survey respondents agreed with the statement “Today’s business leaders must trust and empower people, not command and control them,” with only 5 percent disagreeing with that sentiment.122 The move toward less hierarchy and greater self-management and decentralization of authority is happening across all industries, in both small and large companies, and in both emerging and developed countries. Radical decentralization means that decentralization of authority is radical rather than incremental. Instead of delegating some authority to employees, the hierarchical reporting relationship between the manager and the subordinate is almost completely eliminated, and employees have full authority to make key decisions about their work. For example, employees who make a product would have authority to inspect it for quality and ship it to the customer.123 Ideas that are central to the concept of radical decentralization include:124 ● ● ● ● “If you put fences around people, you get sheep.” —William L. McKnight, Former Chairman of the Board of Directors at 3M People tend to flourish when they are given more responsibility. It makes sense to give decision-making authority to the people who are closest to the work being done. People will bring higher levels of energy, passion, and creativity to their work when they feel free to fully express themselves. People are happier when they have control over their own work. As described earlier in this chapter, some companies have even moved to a bossless work environment. In organizations that have undertaken radical decentralization, accountability is to the team and the customer rather than to a manager. Even in companies that haven’t moved to a bossless or completely self-managed design, the trend is toward greater participation and democratic decision making. At online discount site 1Sale.com, for example, employees voted on whether the company should continue serving free lunch or apply that money to lowering health-insurance premiums for workers (90 percent voted for lower premiums). People also get to vote on whether a job candidate is a “hire” or a “no hire,” although managers make the final decision.125 Concept Connection Research has shown that organizations can deliberately create a culture that engages employees and encourages greater job satisfaction. At international shipping company Deutsche Post DHL Group (DHL), for example, the company is big on thanking employees for their contributions through thank-you notes, monetary rewards, and more. Other engagement tactics include communicating honestly with employees, supporting career development, and enabling employees to serve their communities. Using Engagement to Manage Gen Z and Millennials For movement toward radical decentralization to be successful, the culture must engage employees and support the nonhierarchical environment. Employee engagement is essential in even partially self-managed workplaces. Employee engagement means that people are emotionally involved in their jobs and are satisfied with their work conditions, contribute enthusiastically to meeting team and organizational goals, and feel a sense of belonging and commitment to the organization and its mission.126 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com 44 Part 1 Introduction to Management Plante Moran, an accounting and business advisory firm based in Detroit, was founded nearly a century ago with employee engagement in mind. Founder Frank Moran called his goal to create an accounting firm where the best people couldn’t wait to get in the door and clients were lining up to receive exceptional service his “grand experiment.” Today, Plante Moran has more than 3,100 employees and one of the lowest turnover rates in the industry.127 To engage employees, managers must unite people around a compelling purpose that encourages them to give their best.128 Millennial and Gen Z employees grew up technologically adept and globally conscious. Unlike many workers in the past, they typically are not hesitant to question their superiors and challenge the status quo. They want to work for a clear, meaningful purpose in a flexible, collaborative work environment that is challenging and supportive, with access to cutting-edge technology, opportunities to learn and further their careers and personal goals, and the power to make substantive decisions in the workplace. Remember This ● ● ● ● ● ● Modern management is a lively mix of ideas and techniques from varied historical perspectives, but new concepts continue to emerge. Managers tend to look for innovative ideas and approaches, particularly during turbulent times. ● ● Two recent trends are the transition to a more technology-driven workplace and a corresponding emphasis on a people-driven workplace. Big data analytics refers to technologies, skills, and processes for searching and examining massive, complex sets of data to uncover hidden patterns and correlations. ● ● The most recent jump in the use of digital technology is the Internet of Things (IoT), in which impersonal “things” are connected and can themselves generate and receive data by communicating with each other. Siemens Gamesa uses the IoT by collecting and analyzing more than 200 GB of data per day from over 10,000 “smart” wind turbines worldwide. Human personnel can easily see what is going on inside each turbine and help prevent breakdowns. ● The platform is a new business model that creates value by facilitating exchanges (connections) between people in two or more interdependent groups, usually producers and consumers, rather than producing a product or service of its own to sell. Platform-based organizations, such as TikTok, YouTube, Uber, and Airbnb, connect producers and consumers via digital technology (computers, smartphones) and enable users to both create and consume something of value. Two ideas related to a people-driven workplace are radical decentralization and employee engagement. Radical decentralization means that decentralization of authority is radical rather than incremental; the hierarchical reporting relationship between the manager and the subordinate is almost completely eliminated, and employees have full authority to make key decisions about their work. Employee engagement means that people are involved in their jobs and are satisfied with their work conditions, contribute enthusiastically to meeting team and organizational goals, and feel a sense of belonging and commitment to the organization and its mission. 1-12 T he Historical Struggle: Is Artificial Intelligence the Answer? One possible answer to the historical struggle within management to balance the things of production and the humanity of production is artificial intelligence. Artificial intelligence (AI) encompasses techniques used to teach computer systems to learn, reason, perceive, infer, communicate, and make decisions similar to or better than human beings can. For example, new AI Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management software is automating mundane office tasks in operations such as accounting, billing, payments, and customer service. AI programs can scan documents, check the accuracy of customer records, enter numbers into spreadsheets, and make payments.129 AI is having its greatest effect on the boring, routine, mechanical, and administrative work of organizations. For the first time, a new technology (thing of production) may add directly to the humanity of production by doing the work that humans find unsatisfying. AI has been accused of eliminating low-level routine jobs, but that may allow humans to focus on the remaining work that involves more thinking and analysis. As AI improves in the future to the point of taking over some of the thinking and analytical tasks in organizations, employees will gravitate toward the interpersonal and empathetic tasks that AI cannot do. Human workers tend to focus on the work of which machines and AI are not capable. Humans will have a primary role in jobs that involve communicating and coordinating with others and establishing and maintaining interpersonal relationships.130 Just as important, AI can augment human capabilities by helping develop more authentic relationships among employees and between managers and employees. A recent application using AI to support managers has been referred to as nudge management.131 Nudge management applies insights from the behavioral sciences to design elements of the organization in a way that guides people toward behaviors that support organizational goals and values. For instance, many companies are using open-plan offices that encourage people to collaborate and share knowledge. New digital technology is also being used to nudge people toward desired behaviors. For instance, start-up company Humu, founded by three former Google employees, uses AI to analyze data and identify behavioral changes that can have the biggest impact on employee happiness and engagement. In a company where a manager routinely fails to consult team members about important decisions, Humu could send the manager a nudge via e-mail or text message, a bite-sized reminder to ask members of the team for input. Sanjiv Razdan, COO of salad chain Sweetgreen, says he originally thought the idea was “hocus-pocus happiness nonsense,” but the track record at Google led him to give Humu a try. Now, Razdan likes the idea of nudges because they make it easy for him to take action right away on things that have a positive impact on employees and the company.132 AI-fostered nudge management is one of the most recent approaches in the evolution of management thinking and practice, as shown in Exhibit 1.9 earlier in this chapter. As managers confront new challenges and shifting environmental conditions and technology, management continues to evolve, incorporating ideas from the past with new concepts for changing times. Remember This ● ● ● Artificial intelligence encompasses techniques used to teach computer systems to learn, reason, perceive, infer, communicate, and make decisions similar to or better than human beings can. AI is having a big impact on routine administrative processes in organizations, including spreadsheets, checking customer records and employee expense accounts, and making payments. AI also has potential for coaching managers and other employees toward better relationships through nudge management. ● ● Nudge management applies insights from the behavioral sciences to design elements of the organization in a way that guides people toward behaviors that support organizational goals and values. Sweetgreen uses Humu, a new artificial intelligence application that identifies and sends bite-size reminders, or nudges, to managers or employees that encourage them toward behaviors that benefit employees and the organization. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 45 46 Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management Chapter 1 Discussion Questions 1. Assume that you are a project manager at a biotechnology company and that you work with managers from research, production, and marketing on a major product modification. You notice that every memo you receive from the marketing manager has been copied to senior management. At every company function, she spends time talking to the big shots. You are also aware that sometimes when you and the other project members are slaving away over the project, she is playing golf with senior managers. What is your evaluation of her behavior? As project manager, what do you do? 2. Jeff Immelt, when he was CEO of GE, tweeted for the first time in September 2012, prompting this response: “@JeffImmelt how come my grandfather got on twitter before you?” Do you think managers should use Twitter and other social media? Can you be an effective manager today without using new media? Why? 3. What did Hallie Meyer do to keep Caffè Panna successful during the pandemic? when it comes to people skills. Do you think people skills can be learned, or do you need to rethink your career path? If people skills can be learned, how would you go about it? 6. A college professor told her students, “The purpose of a management course is to teach students about management, not to teach them to be managers.” Do you agree or disagree with this statement? Discuss. 7. Why do you think there is a trend toward greater democracy and decentralization in organizations today? Would a radical decentralized system be effective with Gen Z employees? Why? 8. Big data analytics programs (which analyze massive data sets to make decisions) use gigantic computing power to quantify trends that would be beyond the grasp of human observers. As the use of this quantitative analysis increases, do you think it may decrease the “humanity of production” in organizations? Why? 4. Think about the highly publicized safety grounding of Boeing’s 737 MAX jetliner. One observer said that the goal of profit had taken precedence over the goal of safety within the company. Do you think managers can succeed at both profit and safety simultaneously? Discuss. 9. Can you think of potential drawbacks to retailers using labor-waste elimination systems based on scientific management principles, as described in the text? Do you believe that scientific management characteristics will ever cease to be a part of organizational life, since they are now about 100 years old? Discuss. 5. You are a bright, hard-working, entry-level manager who fully intends to rise through the ranks. Your performance evaluation gives you high marks for your technical skills, but low marks 10. Why can an event such as the Hawthorne studies be a major turning point in the history of management, even if the results of the studies are later shown to be in error? Discuss. Chapter 1 Practice Your Skills: Self-Learning Aptitude Questionnaire Rate each of the following questions according to the following scale: ① I am never like this. ② I am rarely like this. ③ I am sometimes like this. ④ I am often like this. ⑤ I am always like this. 1. When I have a number of tasks or homework to do, I set priorities and organize the work around deadlines. 1 2 3 4 2. Most people would describe me as a good listener. 1 2 3 4 5 3. When I am deciding on a particular course of action for myself (such as hobbies to pursue, languages to study, which job to take, or special projects to be involved in), I typically consider the long-term (three years or more) implications of what I would choose to do. 1 2 3 4 5 5 Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management 4. I prefer technical or quantitative courses rather than those involving literature, psychology, or sociology. 1 2 3 4 5 14. When I am working on a group project and someone doesn’t pull their fair share of the load, I am more likely to complain to my friends than to confront the slacker. 1 2 3 4 5 5. When I have a serious disagreement with someone, I hang in there and talk it out until it is completely resolved. 15. Talking about ideas or concepts can get me really enthusiastic or excited. 6. When I have a project or assignment, I really get into the details rather than the “big picture” issues. 16. The type of management course for which this book is used is really a waste of time. 7. I would rather sit in front of my computer than spend a lot of time with people. 17. I think it is better to be polite and not hurt people’s feelings. 8. I try to include others in activities or discussions. 18. Data and things interest me more than people. 9. When I take a course, I relate what I am learning to other courses I took or concepts I learned elsewhere. Scoring and Interpretation: Subtract your scores for questions 6, 10, 14, and 17 from the number 6, and then add the total points for the following sections: 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5 10. When somebody makes a mistake, I want to correct the person and let them know the proper answer or approach. 1 2 3 4 5 11. I think it is better to be efficient with my time when talking with someone, rather than worry about the other person’s needs, so that I can get on with my real work. 1 2 3 4 5 12. I have a long-term vision of career, family, and other activities and have thought it over carefully. 1 2 3 4 5 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4 5 5 5 5 1, 3, 6, 9, 12, 15 Conceptual skills total score 2, 5, 8, 10, 14, 17 Human skills total score 4, 7, 11, 13, 16, 18 Technical skills total score These are three of the skills needed to be a good manager. Ideally, a manager should be strong (though not necessarily equal) in all three. Anyone noticeably weaker in any of these skills should take courses and read to build up that skill. For further background on the three skills, refer to the explanation in the Management Skills section of the chapter. In-Class Application: Break into groups of three to four members and discuss your respective scores. What do your respective scores suggest about possible management aptitudes? 13. When solving problems, I would much rather analyze some data or statistics than meet with a group of people. 1 2 3 4 5 Chapter 1 Practice Your Skills: Group Learning Your Best and Worst Managers Step 1. On your own, think of two managers whom you have had—the best and the worst. The managers could be anyone who served as an authority figure over you, including an instructor, a boss at work, a manager of a student organization, a leader of a student group, a coach, a volunteer committee in a nonprofit organization, and so on. Think carefully about the specific behaviors that made each manager the best or the worst, and write down what that manager did. Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 47 48 Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management The best manager I ever had did the following: one at a time. On a sheet of paper or on a whiteboard, write separate lists of best-manager and worst-manager behaviors. Step 3. Analyze the two lists. What themes or The worst manager I ever had did the following: patterns characterize “best” and “worst” manager behaviors? What are the key differences between the two sets of behaviors? Step 4. What lessons does your group learn Step 2. Divide into groups of four to six mem- bers. Each person should share their experiences, from its analysis? What advice or “words of wisdom” would you give managers to help them be more effective? Chapter 1 Practice Your Skills: Action Learning Think about some time in your life when you were a leader or had some authority over others. It could have been on a school committee, or as camp counselor, youth coordinator in church/synagogue, yearbook/ prom organizer, etc. Either individually, or in a group of two to four members, ask yourself the following questions. If you are in a group, someone else can ask the questions. Question Your Answer Describe a situation where you handled a problem with competence. List another situation where the outcome was less than ideal. What are the differences between the positive and less-than-positive situations you described above? Was it the type of supervision, your own skills, the complexity of the problem? What would you do differently in any of the scenarios you described? What is your best strength as a manager? Find a theory in the chapter that relates to your strength. White a short (one to two pages) paper comparing the situations you encountered and what you learned. Your instructor may ask you to discuss insights in groups, being prepared to share with the whole group. Chapter 1 Practice Your Skills: Ethical Dilemma The New Test133 The Civil Service Board in a midsize city in Indiana decided that a written exam should be given to all candidates for promotion to supervisor. A written test would assess mental skills and would open access to all personnel who wanted to apply for the position. The board believed a written exam for promotion would be completely fair and objective because it eliminated subjective judgments and personal favoritism regarding a candidate’s qualifications. Maxine Othman, manager of a social service agency, loved to see her employees learn and grow to their full potential. When a rare opening for a supervising Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Chapter 1 Leading Edge Management clerk occurred, Maxine quickly decided to give Sheryl Hines a shot at the job. Sheryl had been with the agency for 17 years and had shown herself to be a true leader. In her new position, Sheryl worked hard at becoming a good supervisor, just as she had always worked hard at being a top-notch clerk. She paid attention to the human aspects of employee problems and introduced modern management techniques that strengthened the entire agency. Because of the board’s new ruling, however, Sheryl would have to complete the exam in an open competition—anyone could sign up and take it, even a new employee. The board wanted the candidate with the highest score to get the job but allowed Maxine, as manager of the agency, to have the final say. Because Sheryl had accepted the provisional opening and proved herself on the job, Maxine was upset that the entire clerical force was deemed qualified to take the test. When the results came back, she was devastated. Sheryl placed twelfth in the field of candidates, while one of her newly hired clerks placed first. The Civil Service Board, impressed by this person’s high score, urged Maxine to give the new clerk the permanent supervisory job over Sheryl; however, it was still Maxine’s choice. Maxine wondered whether it was fair to base her decision only on the results of a written test. The board was pushing her to honor the objective written test, but could the test really assess fairly who was the right person for the job? What Would You Do? 1. Ignore the test. Sheryl has proven herself via work experience and deserves the job. Do the right thing in your mind. 2. Give the job to the candidate with the highest score. You can’t afford to make enemies on the Civil Service Board, and, although it is a bureaucratic procedure, the test is an objective, justifiable way to select a permanent placement. 3. Press the reluctant board to devise a more comprehensive set of selection criteria—including test results, but also taking into account supervisory experience, recommendations, ability to motivate employees, and knowledge of agency procedures—that can be explained and justified to the board and to employees. Chapter 1 Practice Your Skills: Case for Critical Analysis SmartStyle Salons Keisha Westbrook takes pride in her position as salon manager for SmartStyle Salon, one of six local hair salons associated with a large retail store chain located in the Southeast and one of five chain store groups under the Gold Group umbrella. She oversees a staff of 30, including hairdressers, a nail technician, receptionists, shampoo assistants, and a custodian. She enjoys a reputation as a manager who works very hard and takes care of her people. Hairdressers want to work for her. Following the salon’s new-hire policy, Westbrook began as a shampoo assistant and quickly became a top hairdresser in the company through a combination of skill, a large and loyal client base, and long hours at work. In 2017, retiring manager Carla Weems handpicked Westbrook as her successor, and the board quickly approved. Initially, the salon, located in a suburban mall, managed a strong, steady increase in revenue, holding its position as one of the corporation’s top performers. But an economic downturn hit the area hard, with increased rates of unemployment, mortgage woes, and foreclosures among current and potential customers. As families sought ways to save, the luxury of regular visits to the hair salon was among the first logical budget cuts. The past year has reflected this economic reality, and Westbrook’s salon saw a sharp decrease in its business and profits. Westbrook’s stomach is in knots as she arrives at the salon on Monday. Scheduled to fly to Atlanta the next morning for a meeting at corporate headquarters, she fears potential staffing cuts. More important, she fears the loss of the opportunity to secure her dream job: replacing the retiring manager at the Riverwood Mall location, which is the top-performing salon and is located in an upscale area of the city. Distracted, Westbrook walks past the receptionist, Marianne, who is busily answering the phones. Hanging up the phone, Marianne tells Westbrook that Carol Jean, a popular hairdresser, called in sick, and they now have to reschedule their clients. Moreover, Marianne said that Carol Jean was badmouthing the salon on Facebook again. Westbrook had denied her earlier request to miss a day to travel out of town to attend a concert, and her irritation is obvious. The Facebook post slammed the salon for its declining business and being a poor place to work. Westbrook orders Marianne to call Carol Jean and instruct her that, when she returns to work, she is to bring a doctor’s statement and a copy of any prescriptions that she was given. “She had better be sick!” Westbrook shouts as she enters her office, slamming the door more forcefully than she intended. Startled employees and early-morning customers hear the outburst, and, after a momentary pause, they resume Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 49 50 Get Complete eBook Download By email at student.support@hotmail.com Part 1 Introduction to Management their activities and quiet conversation, surprised by the show of managerial anger. Westbrook knows she has let Carol Jean get away with unwarranted absences and negative Facebook comments before, and she worries that she might engage in such behavior again. She needs every head of hair that they can style to help the salon’s profit. Westbrook takes a deep breath and sits at her desk, turning on the computer and checking e-mails, including one from the group manager reminding her to send the salon’s status report in advance of tomorrow’s meeting. She buzzes Marianne on the intercom to request final figures for the report on her desk by 1:00 p.m. Picking up the phone, she calls Sharon, a manager at another SmartStyle Salon. “I really lost my cool in front of everyone, but I’m not apologizing,” Westbrook admits, adding that she wished she had the guts to fire the stylist. “But this is not the day for that drama. I’ve got that report hanging over my head. I have no idea how to make things look better than they are, but I have to come up with something. Things look pretty dismal.” Sharon assures her that she did the best she could dealing with an “irresponsible” employee. “What will you do if she shows up tomorrow with no doctor’s statement?” “I don’t know. I hope I scared her enough so that she’ll come in with something.” “I know you’re worried about the report and the effect it might have on the Riverwood job,” Sharon says. “But everyone knows you can’t control the economy and its effect on the business. Just focus on the positive. You’ll be fine.” At 10:30, as Westbrook struggles to put the best possible spin on the report, she is paged to the receptionist desk to speak to an angry customer. “Another interruption,” she fumes to herself. Just then, the door opens and top stylist/assistant manager Victoria Boone sticks her head into the office. “I know you’re busy with the report. I’ll handle this,” she says enthusiastically. “Thanks,” Westbrook replies. No sooner has she handed off the irate client to Victoria than she second-guesses the decision. In addition to her talents as a hairdresser, Victoria had experience as the manager of a successful salon in another city before moving to the area. Recognizing her organizational and people skills, Westbrook promoted Victoria to assistant manager soon after her arrival. Now each “I’ll handle this” remark by Victoria convinces Keisha that her assistant manager is positioning herself as a potential rival for the Riverwood job. Westbrook appreciates her enthusiastic attitude, but she’s also trying to limit her opportunities to lead or appear too competent before staff, customers, and company officials. Westbrook finds herself wanting to hide Victoria’s competence, and she has condescendingly reminded management that Victoria is a “great help to me.” Now, thinking of Victoria’s cheerful “I’ll handle this,” Westbrook rises from her desk and marches to the door. No, she thinks, I’ll take care of this personally. Questions 1. What positive and negative managerial characteristics does Keisha Westbrook possess? How do her characteristics align with the technical, human, and conceptual skills described in the chapter? 2. How do these traits help or hinder her potential to get the top position at the Riverwood Mall salon? 3. How would you have handled each of the incidents with Marianne? Carol Jean? Victoria? Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Get Complete eBook Download By email at student.support@hotmail.com Get Complete eBook Download By email at student.support@hotmail.com Copyright 2023 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
