Management

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Management

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Management

PEOPLE

/

PERFORMANCE

/

CHANGE

Luis R. Gomez-Mejia

Arizona State University

David B. Balkin

University of Colorado

PRENTICE HALL

Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montre´al Toronto Delhi Mexico City Sa~o Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo

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Library of Congress Cataloging-in-Publication Data Gomez-Mejia, Luis R.

Management/Luis R. Gomez-Mejia, David B. Balkin. p. cm.

ISBN 13: 978-0-13-217640-8 ISBN 10: 0-13-217640-8

1. Management. I. Balkin, David B., 1948- II. Title. HD31.G58955 2012

658—dc22 2010042395

10 9 8 7 6 5 4 3 2 1 ISBN 10: 0-13-217640-8 ISBN 13: 978-0-13-217640-8

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Dulce Maria, and my wife, Ana—LG-M

to my parents, Daniel and Jeanne—DBB

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PART 1 Overview

2

Chapter 1 Management and Its Evolution 2

PART 2 The Culture of Management

34

Chapter 2 Managing in a Global Environment 34 Chapter 3 Managing Social Responsibility and Ethics 72 Chapter 4 Managing Organizational Culture and Change 104

PART 3 Management Strategy and Decision Making

132

Chapter 5 Managing the Planning Process 132 Chapter 6 Decision Making 166

Chapter 7 Strategic Management 194

Chapter 8 Entrepreneurship and Innovation 230

PART 4 Organization Management

254

Chapter 9 Managing the Structure and Design of Organizations 254 Chapter 10 Human Resource Management 282

Chapter 11 Managing Employee Diversity 318

PART 5 Leadership in Management

348

Chapter 12 Leading and Motivating Others 348 Chapter 13 Managing Teams 382

Chapter 14 Managing Communication 414

PART 6 Operations and Information System Management

444

Chapter 15 Operations Management and Management Control 444 References 471

Glossary 499 Photo Credits 511 Index 513

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PART 1 Overview

2

Chapter 1 Management and Its Evolution 2

Gaining and Losing a Competitive Edge: The Case of the Automobile Companies 2

Management in the New Millennium 4

The Four Management Functions 9 Managerial Roles 10

The Evolution of Management Thought 12 Early Management Thought 12

The Operational Perspective 14 Bureaucratic Management 18 Administrative Management 19 Behavioral Perspective 20

Contemporary Management Perspectives 22

Emerging Perspectives and Issues 24

The Modular Organization 25 The Intangible Organization 25

Concluding Thoughts 25

Focusing on the Future: Using Management Theory in Daily Life 26 Summary of Learning Objectives 28

Discussion Questions 29

Management Minicase 1.1:Biz Majors Get an F for Honesty 30 • Management Minicase

1.2:Google: Using a Company’s Culture to Conquer the World 30 • Individual/

Collaborative Learning Case 1.1:Is the United States Falling Behind in Global

Brain Race? 31 • Internet Exercise 1.1: Lincoln Electric 32 • Manager’s Checkup

1.1:Self-assessment of Your Own Theory X or Theory Y Orientation 32

PART 2 The Culture of Management

34

Chapter 2 Managing in a Global Environment 34

Toys that Travel the World 34

The Environment of International Business 36

The Changing Pattern of International Business 36

Major Factors Affecting International Business 44 Entry Strategy 49

Choosing Foreign Countries 49 When to Enter Foreign Countries 50 Scale of involvement 52 Mode of Entry 52 Exporting 53 Turnkey Projects 53 Licensing 54 Franchising 54

Joint Ventures and Strategic Alliances 54 Wholly Owned Subsidiaries 56

Managing the Global Firm 56

Selection 58 Training 60

Career Development 61 Compensation 61

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Ethics and Social Responsibility 62 Concluding Thoughts 64

Focusing on the Future: Using Management Theory in Daily Life 64

Summary of Learning Objectives 65 Discussion Questions 67

Management Minicase 2.1:Sweatshop Swipe 67 • Management Minicase 2.2: Drug Testing Goes Offshore 68 • Individual/Collaborative Learning Case 2.1: Got 6,000 Euros? Need a New Car? 68 • Internet Exercise 2.1: Colgate’s Clean Sweep 69 • Manager’s Checkup 2.1: Careers in Global

Management 69 Manager’s Checkup 2.2: Analyzing Your Own Values 69

Chapter 3 Managing Social Responsibility and Ethics 72

Eating for Credit 72

What Are Business Ethics? 74 Ethics Approaches 75

Utilitarianism 75 Individualism 75 Rights Approach 76 Justice Approach 77

Applications of Ethics Approaches 77 Comparison of Ethics Approaches 77

Codes of Ethics 79

Corporate Credos 79 Ethical Policy Statements 79

Managing Ethics 81

Ethics Training 81 Ethical Structures 82 Whistleblower Policies 82 Personal Ethics 83

Ethical Dilemmas in the Workplace 85

Performance Appraisal 85 Employee Discipline 85 Office Romance 86

Giving Gifts in the Workplace 86

Social Responsibility 88

The Benefits of Social Responsibility 88 The Costs of Social Responsibility 89

Organizational Stakeholders 91 Owners 92 Employees 92 Governments 92 Customers 93 Community 93 Competitors 93 Social Activist Groups 94

Strategies for Managing Stakeholders 94

Confrontation 95 Damage Control 95 Accommodation 95 Proactive 95

Concluding Thoughts 96

Focusing on the Future: Using Management Theory in Daily Life 97 Summary of Learning Objectives 97

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Management Minicase 3.1:Starbucks Gambles that Encouraging Its Coffee Suppliers to Act Socially Responsible Is Good for Business 99 • Management Minicase 3.2: New Belgium Brewing Company Takes Environmental Responsibility

Seriously 100 • Individual/Collaborative Learning Case 3.1: Do Pay Incentives Cause Employees to Behave Unethically? 100 • Internet Exercise 3.1: Social Responsibility at Levi Strauss 101 • Manager’s Checkup 3.1: What Are Your Beliefs about Business Ethics? 101

Chapter 4 Managing Organizational Culture and Change 104

Cisco’s Collaborative Culture Enables It to Deal with Change 104

Understanding the Nature of Culture and Change 106 Section I: Organizational Culture 106

The Importance of Culture 108

Employee Self-Management 108 Stability 109

Socialization 110

Implementation of the Organization’s Strategy 111 Beware the Dark Side 111

Managing Cultural Processes 111

Cultural Symbols 112

Company Rituals and Ceremonies 112 Company Heroes 113

Stories 113 Language 113 Leadership 113

Organizational Policies and Decision Making 113

Characteristics and Types of Organizational Culture 114

Cultural Uniformity versus Heterogeneity 114 Strong versus Weak Cultures 115

Culture versus Formalization 115 National versus Organizational Culture 115 Types 115

Managing Organizational Change 116

Types of Change 116 Forces for Change 117 Resistance to Change 118

Models of Organizational Change 120

Implementing Organizational Change 122 Tactics for Introducing Change 122

Concluding Thoughts 124

Focusing on the Future: Using Management Theory in Daily Life 124 Summary of Learning Objectives 125

Discussion Questions 126

Management Minicase 4.1:Domino’s Delivers Change in Its Pizza Recipe 127 • Management

Minicase 4.2:How Jack Welch Changed Culture at General Electric 127 • Individual/

Collaborative Learning Case 4.1:A Culture of Empowerment Transforms Pike Place Fish Market 128 • Internet Exercise 4.1: Charles Schwab: Recommending Change as a Customer 128 • Manager’s Checkup 4.1: How Comfortable Are You with Change? 128

PART 3 Management Strategy and Decision Making

132

Chapter 5 Managing the Planning Process 132

Disney in Hong Kong: Bad Luck, or Bad Planning? 132

What Is Planning? 134 The Benefits of Planning 135

Assessment of External Forces 136

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Identifying the Factors that Affect the Organization 136 Encouraging Participation 136

Coordination of Efforts 136 Establishment of Priorities 137

Focusing Attention on Different Time Horizons 137

Understanding Circumstances Contributing to Past Success or Failure 137 Ensuring the Availability of Adequate Resources 137

Establishing Performance Standards 137 Supporting Organizational Control Systems 138 Developing “What If” Scenarios 138

Management Development 138

The Pitfalls of Planning 140

Poor Forecasts of Future Conditions 140 Plans Imposed from Above 141 Planning as a Self-Contained Activity 141 Extensive Bureaucratization 141

Inflexible Adherence to Objectives and Processes 141

Keys to Successful Planning 143

Decentralizing the Planning Process 143

Using Both Numerical and Judgmental Methods 143

Viewing Planning as Continuous and Capable of Adapting to Change 143 Avoiding Paralysis of the Analysis 144

Concentrating on a Manageable Set of Issues 144

Formal Planning and Opportunistic Planning 145 The Formal Planning Process 145

Setting Objectives 145 Charting a Course of Action 148 Implementation 152

Management Minicase 5.1:Newspapers: A Plan that Seemed Like a Godsend Is Turning Sour 161 • Management Minicase 5.2: Disaster Planning: How Wal-Mart Saved the Day 161 • Individual/Collaborative Learning Case 5.1: Why Did NASA Stick with the Space Shuttle So Long? 162 • Internet Exercise 5.1: E-Business Goes E-Bankrupt but Survivors Are Doing Well 163 • Manager’s Checkup 5.1: Ethical Checklist 163

Chapter 6 Decision Making 166

Google Decides about China 166

Characteristics of Management Decision Making 168

Programmability 168 Uncertainty 169 Risk 169 Conflict 169 Decision Scope 170 Crisis Situations 171

Stages of Decision Making 172

Identifying and Diagnosing the Problem 172 Generating Alternative Solutions 173 Evaluating Alternatives 173 Choosing the Best Alternative 175 Implementing the Decision 175 Evaluating the Results 175

The Limits of Rational Decision Making 176

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Emotions and Personal Preferences 177 Illusion of Control 178

Intuition and Escalation of Commitment 178

Nonrational Decision-Making Models 179

Administrative Model 179 Garbage Can Model 180

Personal Decision-Making Styles 180 Decision Making in Groups 181

The Benefits and Problems of Group Decision Making 181 Managing Group Decision Making 182

Decision-Making Skills 185

Time Management 185 Delegation 185

Management Minicase 6.1:Circuit City’s Decision to Lay Off Experienced Employees Backfires 190 • Management Minicase 6.2: Merck’s Decision to Withdraw Its Vioxx Drug from the Market 191 • Individual/Collaborative Learning Case 6.1: Intel Recalls the Pentium Chip 191 • Internet Exercise 6.1: Decision Making at Coca-Cola 192

• Manager’s Checkup 6.1:Determining Decision Risk and Uncertainty Preferences 192

Chapter 7 Strategic Management 194

The Universe of iPod and iPad 194

The Strategic Management Process 196

Step One: Analyzing External and Internal Environments 198

The External Environment 198 Components of External Analysis 200 Scope of the External Analysis 201 The Internal Environment 207 Resource Types 208

Analyzing the Firm’s Capabilities 209

Step Two: Strategic Intent and Mission 211 Step Three: Strategy Formulation 213

Corporate-Level Strategy 213 Business-Level Strategy 217

Step Four: Strategy Implementation 218

Strategic Leadership 218 Organizational Controls 219 Organizational Structures 219 Cooperative Strategies 220 Human Resource Strategies 221

Corporate Entrepreneurship and Innovation 221

Step Five: Strategic Outcomes 222 Concluding Thoughts 223

Focusing on the Future: Using Management Theory in Daily Life 223 Summary Learning Objectives 225

Management Minicase 7.1:Why Would Microsoft Sell the Xbox at a Loss? 226 • Management Minicase 7.2: Why Are Rebates Becoming so

Popular? 227 • Individual/Collaborative Learning Case 7.1: Analyzing Threats: Can Walgreen Co. Survive? 227 • Internet Exercise 7.1: Internet Strategies 227

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Chapter 8 Entrepreneurship and Innovation 230

Starting a Company in the Kitchen 230

What Is Entrepreneurship? 232

Entrepreneurship Myths 232

A Distinction between an Entrepreneurial Venture and a Small Business 233

The Importance of Entrepreneurship 233

Job Creation 233 Innovation 233

Opportunities for Diverse People 234

Entrepreneurial Characteristics and Skills 234

Characteristics of Entrepreneurs 235 Entrepreneurial Skills 235

Starting and Managing an Entrepreneurial Venture 238

New Business Ideas 238 Why Entrepreneurs Fail 238 Business Plan 239 Legal Forms 239

Sources of Financial Resources 242 Managing Growth 243

Alternative Forms of Entrepreneurship 244

Intrapreneurship 244 Spin-Offs 244 Franchises 245

Innovation 245

What Is Innovation? 245 The Importance of Innovation 246 The Innovation Process 246

Management Minicase 8.1:From a Pretzel Stand to a Franchise Business

at Auntie Anne’s 250 • Management Minicase 8.2: An Innovation Marketplace on the Internet 251 • Individual/Collaborative Learning Case 8.1: Running a Sole Proprietorship 251 • Internet Exercise 8.1: How the Kauffman Foundation Supports Entrepreneurship 252 • Manager’s Checkup 8.1: Should You Start Your Own Business? 252

PART 4 Organization Management

254

Chapter 9 Managing the Structure and Design of

Organizations 254

United and Continental Airlines Announce a Merger 254

The Vertical Dimension of Organization Structure 256

Unity of Command 256

Authority, Responsibility, and Accountability 256 Span of Control 259

Centralization and Decentralization 259 Formalization 260

The Horizontal Dimension of Organization Structure 260

Functional Structure 261 Divisional Approach 261 Matrix Approach 264

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Coordination Mechanisms 265

Meetings 266

Organizationwide Reward Systems 266 Task Forces and Teams 266

Liaison Roles 267 Integrating Managers 267 Organizational Culture 268 Organization Design 268 Mechanistic Organizations 269 Organic Organizations 270 Boundaryless Organizations 271 Redesigning Organizations 273 Concluding Thoughts 275

Management Minicase 9.1:Decentralization Works at Johnson & Johnson 279 •

Management Minicase 9.2:Restructuring the 3M Company for Growth and

Profitability 279 • Individual/Collaborative Learning Case 9.1: Fast Food’s Yummy Secret 280 • Internet Exercise 9.1: PepsiCo: A World Leader in Food and

Beverages 280 • Manager’s Checkup: Do You Follow the Chain of Command? 280

Chapter 10 Human Resource Management 282

Hire a Hero 282

The Importance of Human Resource Management 284 Environment of Human Resources 285

Workforce Diversity 285 Globalization 286 Legislation 286 Unions 289

The Human Resource Management Process 291

Human Resource Planning 292 Staffing Process 294 Employee Training 301 Career Development 303 Performance Appraisal 304

Measurement Approaches to Performance Apprasisal 306 Compensation 307

Management Minicase 10.1:Rewards for Good Teaching? 314 • Management Minicase

10.2:Balancing Family Issues and Work 315 • Individual/Collaborative Learning Case

10.1:How to Reduce Turnover 316 • Internet Exercise 10.1: Help on the Web 316

Chapter 11 Managing Employee Diversity 318

Eleven Decades of Ensuring that Employee Diversity Equals Corporate Success 318

The Meaning of Diversity 320

Advantages of Employee Diversity 321 The Challenges of Diversity 323

Diversity Today 326

African Americans 328 Asian Americans 329 Disabled Americans 329

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Foreign-Born Americans 330 Hispanic Americans 331 Homosexuals 331 Older Workers 332 Religious Diversity 333 Undocumented Workers 333 Women 334 Building on Diversity 336

Top Management Commitment 336

Linking Diversity Initiatives to Business Strategies and Objectives 336 Management Responsibility and Accountability 337

Diversity Audits 337 Developmental Activities 337 Encouraging Diversity Networks 339 Accommodating Family Needs 339

Management Minicase 11.1:We Are All Getting Older! 342 • Management

Minicase 11.2:Despite Past Cases, Wall Street Has Yet to Shake a Boys’ Club

Image 344 • Individual/Collaborative Learning Case 11.1: Approaching a Demographic Milestone 344 • Internet Exercise 11.1: Managing Employee Diversity 345

PART 5 Leadership in Management

348

Chapter 12 Leading and Motivating Others 348

Management Beyond 2020:Leadership 348

What Makes an Effective Leader? 350

Management versus Leadership 351 Power and Leadership 351

Why a Person Becomes a Leader: Traditional Explanations 353

Trait Theories 353 Behavioral Theories 353 Leadership style 354 Contingency Theories 354

Contemporary Leadership Issues 357

Attribution Theory 358 Leadership Substitute 358 Charismatic Leadership 358

Transformational versus Transactional Leadership 359 Postheroic Leadership 361

Self-Leadership 361

Leadership and Emotional Intelligence 361

Leadership–Member Exchange: Relationships between Leaders and Followers 361

Motivation 362

Goal-Setting Theory 362 Reinforcement Theory 363 Need Theories 365

Human Relations Perspective 367 Work Design Theories 368

The Role of People’s Perceptions 370 Commitment and Motivation 372

Summary of Learning Objectives 374 Discussion Questions 375

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Management Minicase 12.1:Executives for Rent 376 • Management Minicase 12.2: Does Money Motivate? 376 • Management Minicase 12.3: Working in

Heaven? 377 • Individual/Collaborative Learning Case 12.1: What Caused the So-called “Financial Meltdown” of 2008–2011? 377 • Individual/Collaborative

Learning Case 12.2:Motivating Low-Wage Workers 378 • Internet Exercise 12.1: Leading the Pack 379 • Internet Exercise 12.2: Test Your Emotional Intelligence 379

Chapter 13 Managing Teams 382

Rapid-Response Teams Save Lives at Tenet Healthcare Corporation www.tenethealth.com 382

The Benefits of Teams 384

Costs and Productivity 385 Quality Improvements 385 Speed 386 Innovation 386 Types of Teams 386 Self-Managed Teams 387 Project Teams 388 Parallel Teams 389 Virtual Teams 389

Managing Team Performance 390

Stages of Team Development 390 Roles of Team Members 391 The Role of the Team Leader 392

Behavioral Dimensions of Effective Teams 393

Team Performance Problems 397

Free Riders 397

The Nonconforming High Performer 398 Lack of Rewards for Teamwork 399

Team Management Skills 400

Conflict Management Skills 400 Negotiation Skills 403

Management Minicase 13.1:Companies Use Different Approaches to Encourage Teamwork 409 • Management Minicase 13.2: Whole Foods: Using Teamwork as a Recipe for Success 410 • Individual/Collaborative Learning Case 13.1: Managing Rewards for Teams 411 • Internet Exercise 13.1: Teamwork at Taco Bell 412

Chapter 14 Managing Communication 414

Call Center Jobs Are Outsourced to the Home Thanks to Broadband Communications Technology 414

The Process of Communication 416

A Model of Communication 417 Barriers to Effective Communication 418

Patterns of Organizational Communications 420

Downward Communication 420 Upward Communication 420 Horizontal Communication 420

Managing Organizational Communications 422

Face-to-Face Communication 423 Written Communication 424 Electronic Communication 425 Informal Communication 428

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Communication Skills 429

Assertive Communication Skills 429 Presentation Skills 430

Nonverbal Communication Skills 431 Listening Skills 433

Management Minicase 14.1:Employee Blogs Are Becoming the New Virtual

Watercooler 438 • Management Minicase 14.2: Actions Speak Louder than Words All Around the World 439 • Individual/Collaborative Learning Case 14.1: Selecting the Most Effective Form of Communication 440 • Internet Exercise 14.1: Whole Foods, Whole Philosophy 441 • Manager’s Checkup 14.1: Listening Self-Inventory 441

PART 6 Operations and Information System

Management

444

Chapter 15 Operations Management and Management Control 444

When BP Lost Control of Its Drilling Operations in the Gulf of Mexico 444

What Is Operations Management? 446

Three Stages of Operations 446 Planning 446

Strategic Planning 446

Acquiring Inputs 448

Materials Requirements Planning 448 Inventory 449

The Conversion Process 449

Designing the Process 449 Monitoring the Process 452

Disposition of the Product 453 Managing Quality 454

The Quality Management Approach 454

Kaizen (Continuous Improvement) and Efficiency 457 Just-in-Time Systems 459

Other Quality Management Systems 460

What Is Management Control? 461

Bureaucratic Control 461

Management Minicase 15.1:Customers Report Problems with Apple’s Latest

Smart Phone 467 • Management Minicase 15.2: Facebook Users Want to Control More of Their Personal Information 468 • Internet Exercise 15.1: Andersen Windows 468

References 471 Glossary 499 Photo Credits 511 Index 513

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Ask your incoming students what “management” is and they’ll talk about the kind of man-agement they know from their own (limited) work experience. Managers assign people their hours, give raises or promotions, tell people what job to do—the manager, in other words, is “the boss.”

In most other work settings, however, management means something far more impor-tant and complex. In addition to people, managers also manage performance, processes, relationships, and more increasingly in today’s world, they deal with the pressure and flux of constant change. This, coupled with the fact that workplaces have steadily become less hierarchical and more team- and group-driven, means that the traditional responsibili-ties of the manager have gradually been dispersed throughout the organization. Students preparing to work in today’s business environment may not start in a corner office with an assistant, but they still need to think like managers and understand the strategic goals of the organization.

Management prepares your students to join a new kind of workplace, one where manage-ment is everyone’s business.

In order to prepare your students for a rapidly changing workplace, Management seeks to go beyond the scope of other management textbooks in our approach and our content. It does this in three key aspects:

Beyond the Ordinary

Your students start the course thinking of managers as little more than traditional “bosses.” Management helps your students to move beyond this perception by offering coverage and exercises that emphasize the multifaceted nature of modern management. In particular, the “Management Close-Up” boxed feature offers unique perspectives. Each close-up has a theme of Ethics, Customer Focus, or Dealing With Change, which illustrates contempo-rary issues that managers and organizations confront that go beyond merely “being the boss.”

Beyond Theory

Nothing as complex as management can be understood by merely reading about theory. While Management is careful to ground students in the relevant theories, it also gives your students numerous opportunities to apply their learning to real-world management situations. Strategically placed throughout the chapter, the Learning Objective Check-Ins, or LOC-lns, help students apply information they have just read by asking scenario-based multiple choice questions based on a Learning Objective at the beginning of the chapter.

Beyond Your Expectations

We’ve worked hard to make this Management textbook more comprehensive, more useful, and more flexible than any other on the market. It opens whole new avenues of teaching for you while at the same time being easy to read. Hundreds of contemporary examples are provided throughout the text to illustrate key points.

Text Features

Management is full of innovative chapter features to make studying productive and hassle-free. The following are examples of the kind of engaging, helpful pedagogical features that make up Management’s powerful approach.

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Learning Objective Check-Ins or LOC-Ins

In response to the need for better assessment of learning objective goals, these scenario-based multiple choice questions occur within each chapter and directly correspond to a Learning Objective specified at the beginning of the chapter. Each question is designed to assess the appli-cation of the Learning Objective, with answers found in the Instructor’s Manual. Professors can choose to share the answers with their students by either posting to an online course-delivery site or by printing and distributing them.

Manager’s Notebook

These features supplement chapter content with a practicing manager’s perspective. Manager’s Notebooks provide valuable insider tips for dealing with common situations, and they are ideal jumping-off points for classroom discussion.

Management Close-Ups

To help students get an up-close look at the issues real managers deal with, Management includes “Management Close-Up” boxes. The Ethics, Customer Focus, and Dealing With Change subtitles in these boxes highlight aspects of management that are particularly important today.

ETHICS Ethical conduct in business has become an increasingly public issue. Whether the issue lies in recognizing the importance of stakeholders, a regulatory matter, or concerns with employees, ethical behavior and policies cut across all areas of management. Nearly every chapter of Management includes these special illustrations of how ethics and trust play an important role in all aspects of business.

CUSTOMER FOCUS In today’s hyper-competitive world, relationships and trust are increasingly important. For the manager, everyone is a customer, whether internal or external. Within their organizations, managers rely on maintaining good relationships with managers and employees in other departments to get things done. Just as important are relationships with external customers, potential partnerships, and alliances. The Customer Focus boxes offer real-world examples of how relationships play crucial roles in the success of organizations.

DEALING WITH CHANGE New technology or new CEOs, globalization and the information economy, regulatory changes: all of these factors constantly conspire to reshape the contemporary business workplace or a particular organization. The successful manager needs to be able to anticipate and adapt to change, and these boxes illustrate how a particular change can impact the successful functioning of a firm.

Focusing on the Future

Appearing before the Summary, “Focusing on the Future” boxes give students a glimpse of how they will use the skills they are acquiring from the text in their future careers. “Day in the life” snapshots from five types of managers—accounting/finance, operations/general, human resources, marketing/communications, and entrepreneurs—show students how work-ing managers use the theories discussed in the text to solve real-world problems. The author of the feature, Carol Moore, California State University–Hayward, interviewed real-life man-agers, including: Roxana Carbajal—HR Director, Embassy Suites; “Barbara DeLong”—HR Director, telecommunications industry; Mary Kelley—CEO, Sleep Garden; Mark Hasting— Group Vice President, Target Corporation; Brendan Geary—Director of Human Resources, Panalpinia Corporation; David Moore—Pastor, New Summit Presbyterian Church.

End-of-Chapter Exercises and Applications

The end-of-chapter material provides a variety of exercises, including skill-building exercises, individual/collaborative learning cases and exercises, management mini-cases, and Internet exer-cises to further facilitate student assimilation of the concepts.

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Skill-Building Exercises

Most chapters include skill-building exercises that summarize management skills crucial to workplace effectiveness. “Manager’s Check-Up” exercises provide students fun and interesting ways to practice and refine those skills.

Individual/Collaborative Learning Cases and Exercises

Each chapter includes a case accompanied by critical thinking questions that can be answered individually, in-class, or as an assignment. It also has a collaborative learning exercise designed to be completed in teams. Teams read the case and then recommend a course of action for resolv-ing the issue or problem presented in the exercise.

Management Mini-Cases

Each chapter has two Management Mini-Cases that provide excellent, real-life examples to stimulate class discussion.

Internet Exercises

Each chapter has at least one Internet exercise relevant to the chapter material. Internet exer-cises demonstrate how to find specific information online and offer additional current resources.

Supplements

At the Instructor Resource Center, www.pearsonhighered.com/irc, instructors can access a variety of print, digital, and presentation resources to accompany this text in downloadable format. Registration is simple and gives you immediate access to new titles and new editions. As a registered faculty member, you can download resource files and receive immediate access to and instructions for installing course management content on your campus server. In case you ever need assistance, a dedicated technical support team is ready to help with media supplements that accompany this text. Visit http://247.pearsoned.com for answers to frequently asked questions and toll-free user support phone numbers.

The following supplements are available for download to adopting instructors: 䊉 Instructor’s Manual

䊉 Test Item File

䊉 TestGen (test-generating program) 䊉 PowerPoint Slides

Videos on DVD

Video segments illustrate the most pertinent topics in management today and highlight relevant issues that demonstrate how people lead, manage, and work effectively. Contact your Pearson representative for the DVD.

CourseSmart eTextbook

CourseSmart is an exciting new choice for students looking to save money. As an alternative to purchasing the print textbook, students can purchase an electronic version of the same content. With a CourseSmart etextbook, students can search the text, make notes online, print out read-ing assignments that incorporate lecture notes, and bookmark important passages for later review. For more information, or to purchase access to the CourseSmart eTextbook, visit www. coursesmart.com.

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Luis R. Gomez-Mejia

holds the Benton Cocanougher Chair in Business at the Mays Business School, Texas A&M University. Before joining Texas A&M, he taught at Arizona State University, the University of Colorado, and the University of Florida. He has also been on the faculty at University Carlos III de Madrid and Instituto de Empresas and has offered seminars in both Spanish and English in many countries and universities around the world.

He received his Ph.D. and M.A. in industrial relations from the College of Business at the University of Minnesota and a B.A. (summa cum laude) in economics from the University of Minnesota. Prior to entering academia, Professor Gomez-Mejia worked in human resources for the City of Minneapolis and Control Data Corporation and served as consultant to numerous organizations.

He has served three terms on the editorial board of the Academy of Management Journal and is editor and cofounder of two journals: Journal of High Technology Management Research and Management Research and Management Research. Dr. Gomez-Mejia has published more than 150 articles in the most prestigious management journals including the Academy of Management Journal, Academy of Management Review, Administrative Science Quarterly, Strategic Management Journal, Industrial Relations, and Personnel Psychology. He has also written and edited a dozen management books. His research has been cited approximately 8,000 times (as per Google scholar, 2011), making him one of the most highly cited members in the field of Management.

Dr. Gomez-Mejia has received numerous awards including “best article” in the Academy of Management Journal and the Outstanding Alumni Award at University of Minnesota. He has been named a Dean’s Council of 100 Distinguished Scholar at Arizona State University every year since 1994, holds the Horace Steel Chair at Arizona State University, was a member of the Academy of Management Journal’s Hall of Fame, and is a Fellow of the Academy of Management.

He was also president and founder of the Iberoamerican Academy of Management (an affiliate of the Academy of Management), which covers Spain and Portugal, all of Latin America, and Hispanic faculty in U.S. universities.

David B. Balkin

is Professor of Management at the Leeds School of Business at the University of Colorado at Boulder. He received his Ph.D. in industrial relations from the University of Minnesota. Prior to joining the faculty of the University of Colorado, he served on the faculties of Louisiana State University and Northeastern University. He has published over 60 articles appearing in such journals as the Academy of Management Journal, Strategic Management Journal, Personnel Psychology, Journal of Organizational Behavior, Journal of Business Venturing, and Journal of Management Studies. One of his publications (coauthored with Luis R. Gomez-Mejia) was selected as the best article published in 1992 in the Academy of Management Journal. Professor Balkin has written or edited several books on human resources, the management of innovation, compensation, and other topics. He has served as Chair of the Management Department at University of Colorado and also served on advisory boards of non-profit organizations. Professor Balkin is currently the associate editor for Human Resource Management Review and has previously served on the editorial boards of the Academy of Management Journal and the Journal of Management. As an expert witness, he has provided testimony in civil cases dealing with employment and pay discrimination. Professor Balkin has extensive international experience as a scholar and teacher and was a visiting professor at University of Toulouse (France), Copenhagen Business School (Denmark), Helsinki University of Technology (Finland), University of Regensburg (Germany), National University of Singapore, Hong Kong University of Science and Technology, HEC Montreal (Canada), and Indian School of Business (India).

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1

Learning Objectives

1 Understand the challenges organizations

face in the new millennium.

2 Specify the functions and roles of successful

managers.

3 Explain the origins of management as an

academic discipline.

4 Describe the bureaucratic and administrative

approaches to the study of management.

5 Explain the behavioral perspective in

analyz-ing management issues.

6 Interpret recent approaches to the study

of management.

Gaining and Losing a

Competitive Edge: The

Case of the Automobile

Companies

By the end of 2009 the bad news for American automo-bile manufacturers kept on mounting: 60,000 U.S. and Canadian jobs gone, 24 factories closed, GM and Chrysler declaring bankruptcy, and the federal government bailing out GM and acquiring 61 percent of its stock. The majority of these troubles were attributed to a combination of bloated bureaucracy, poor management, a disconnect with customers, overly generous labor contracts, and high pro-duction costs with poor attention to quality.

Around the same time Toyota had become the indis-putable winner in the automobile industry, with a reputa-tion for high innovareputa-tion, low manufacturing cost, strong cooperation with suppliers, high employee engagement, excellent customer service, and near perfect quality. Then disaster struck Toyota in 2010 after wide negative media exposure, the filing of hundreds of legal suits against the company, congressional hearings, and the recall of more than 8 million Toyota cars. Faulty brakes and other mechanical troubles in some of Toyota’s models allegedly had caused a number of serious highway accidents, some involving deaths. The reputation that took decades to build was seriously damaged in just a few months and may

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Management and Its Evolution

take a long time to repair. As noted by BusinessWeek, “Toyota got carried away with high-speed growth, market share, and productivity gains year in and year out. All that slowly dulled the commitment to quality embedded in Toyota’s corporate culture. Then the tent came crushing down in a hurry.”

In the meantime VW sees Toyota’s troubles as a historic opportunity and is bent on displacing Toyota as the world’s biggest car company by the year 2018.

Sources: Based on D. Welch, “The man with the toughest job at GM,” BusinessWeek, March 1, 2010; D. Welch, “Why VW is the car giant to watch.” BusinessWeek, January 25, 2010, 16–18; A. Ohnsman, J. Green, and K. Inoue, “The humbling of Toyota,” BusinessWeek, March 22, 2010, 17–19; D. Welch, N. Naughton, and B. Helm, “Detroit’s big chance,” BusinessWeek, February 22, 2010, 22–23; B. Saporito, “Toyota got tan-gled” BusinessWeek, February 22, 2010, 29–32; L. Denning, “Detroit’s life after death is no paradise,” BusinessWeek, January 11, 2010, 39–40; M. Dolan, “Ford to begin hiring at new lower wages,” Wall Street Journal, January 26, 2010; B. Saporito, “Toyota’s recall,” BusinessWeek, February 25, 2010, 32–24; K. Linebaugh, “Toyota heir faces crisis at the wheel,” Wall Street Journal, January 28, 2010; K. Linebaugh and N. Shirouzu, “Toyota’s U.S. chief is on the hot seat,” Wall Journal Street, February 8, 2010, C-1.

CRITICAL THINKING QUESTIONS

1. Why did the U.S. automobile manufacturers allow their financial situation to deteriorate while Toyota was prospering?

2. Why was Toyota (a foreign company) so successful in entering the U.S. market, beating the largest domestic automobile manufacturers on their own turf?

3. Even though some of the brake allegations against Toyota were later shown to be exaggerated, why did Toyota seem to fall off its pedestal so quickly at the begin-ning of this decade?

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We’ll revisit these questions again in our Concluding Thoughts on page 25, after you have had the opportunity to read the discussion in this chapter.

This chapter provides the “big picture,” or an overview, of the field of management. First, we explain what management is. We discuss the different types of managers, the functions that man-agers perform, and the skills needed to successfully carry out managerial activities. Next, we describe the history and evolution of the field, along with ideas that have affected the practice of management. Some ideas, such as bureaucratic management, were in vogue and then fell out of favor, while other ideas have withstood the test of time and continue to be used by managers today.

Management in the New Millennium

Organizational performance depends, to a large extent, on how resources are allocated and agement’s ability to adapt to changing conditions. In successful organizations, people are man-aged wisely and resources are used efficiently and effectively. This helps managers reach key organizational goals, such as keeping the company functioning in a changing external environ-ment in which technology, governenviron-mental activities, and competition create constant challenges.

To be successful, a company must be both efficient and effective. A firm is efficient when it makes the best possible use of people, money, the physical plant, and technology. It is effective when goals are met which sustain a company’s competitive advantage. A firm with excellent goals could still fail miserably by being inefficient, meaning that the company hired the wrong people, lost key contributors, relied on outdated technology, and made poor investment deci-sions. A firm is ineffective when it fails to reach goals that sustain a company’s competitive advantage. High quality companies do things right (they are efficient) and do the right things (they are effective).

The 21st century world of business is strongly influenced by three issues. The first is the management of change. Organizational leaders must cope with and adapt to rapid change on a daily basis. Change creates uncertainty and risk. The number of competitors and product offer-ings are greater than ever before. Globalization means that most firms are exposed to competitive challenges both domestically and internationally. Many products (such as software) become obsolete in a matter of a few years or even months, forcing the firm to continuously innovate or die. Today’s managers must effectively deal with a host of technological, legal, cultural, and organizational changes, such as downsizing, restructuring, and mergers.

Skills for Managing 1.1 on page 5 provides an exercise to help you and your classmates think about your future career in light of these changes.

The second major new issue is an increasing emphasis on customer service. The company must satisfy the needs of customers in ways that contribute to long-term loyalty. The term customer is now used in a broader sense. It refers to anyone who receives a service from an employee. Customers are both external (current or prospective consumers of the firm’s products or service) and internal (other managers or employees who depend on the manager’s performance or inputs in some capacity). For most successful operations, the customer represents the starting

point and an ending point for almost every activity.

Globalization is playing an increasingly important role in the process of serving both internal and external customers as many companies are outsourcing entire functions overseas (see Management Close-Up 1.1, “How Outsourcing Is Transforming Whole Industries and Changing the Way We Work” on page 6).

The third critical issue affecting the management profes-sion in the 21st century is the need for higher business ethics. Ethics are the standards and values which are considered necessary for the collective interests of employees, sharehold-ers, and society. Several well-publicized examples of cheating, dishonesty, and use of the firm’s resources for personal gain have emerged in firms such as WorldCom, Tyco, General Dynamics, Enron, Arthur Andersen, and Radio Shack. In the long run, these violations will have a negative impact on

Among the many cultural changes facing business managers today is the rising number of Hispanic consumers in the United States, which advertisers see as akin to the baby boom, and the increasing assimilation of Latino culture into the mainstream.

Companies’ desire to reach this fast-growing market with its divergent tastes and preferences is spurring a creative revolution in Spanish-language television advertising.

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those who are influenced by such managers’ bad decisions, including employees, other man-agers, and customers.

Globalization also complicates ethical decision making as companies may feel that they have to compromise ethical standards to do business in certain countries. For instance, during 2006–2007 Yahoo!, Google, Microsoft, and Cisco came under criticism after revelations that they have cooperated with the Chinese government to censor online searches and even to turn in dissidents to the government.1

Many organizations are appointing ethics officers to advise top executives, enforce ethical standards, and monitor potential misconduct at any level within the firm (see Management Close-Up 1.2, “Enforcing Ethics at Work” on page 7).

In this book, we will deal with managing change and improving customer service, along with various ethical concerns as various topics are discussed. We will provide examples of what we consider to be both good and bad management practices.

Traditionally, the term manager referred only to individuals responsible for making resource allocation decisions and with the formal authority to direct others. There are three levels of man-agement: strategic managers, the senior executives with overall responsibility for the firm; tactical managers responsible for implementing the directives of strategic managers; and operational managers responsible for day-to-day supervision.

In varying degrees successful managers at any level have certain things in common. Each chapter of this book has a feature called “Management Is Everyone’s Business” that summarizes how successful managers apply sound principles derived from that particular chapter. A broad set of managerial implications of the contents discussed in this introductory chapter, several of which will be explored in greater detail in subsequent chapters, appears in Management Is Everyone’s Business 1.1 on page 7.

Managers still have authority over people and financial resources, but today’s organizations are more decentralized than ever before, and employees have more autonomy to define their

strategic managers

The firm’s senior executives who are responsible for overall management.

tactical managers

The firm’s management staff who are responsible for translating the general goals and plan developed by strategic managers into specific objectives and activities.

operational managers

The firm’s lower-level managers who supervise the operations of the organization.

SKILLS FOR MANAGING 1.1

What the Future Will Bring

You might think that 21st century college students aren’t looking much farther into the future than next week’s exam or Friday’s beer bash. During this second decade, college students are contemplating something quite different, say campus recruiters and researchers: their future security.

As companies begin their next round of campus visits to recruit the undergraduate class, recruiters say it’s clear that the bad news of the past few years has shaken this new crop of grads. More than any recruits in memory, they’re asking employ-ers for assurance of security, so they don’t wind up on the unemployment line or flipping hamburgers for minimum wage.

Students have learned from watching the financial crash a few years back that corporate fortunes can turn—and campus job offers can be rescinded—on a dime. Grads are showing a preference for stable, diversified companies, helping propel such giants as Lockheed Martin and Johnson & Johnson sharply higher in Universum’s rating of grads’ “ideal employers” among big corporations in all fields, from consulting and finance to manufacturing and retailing. Martin Slevin, manager, retail recruitment, for Walgreen Co., says today’s campus recruits are far more interested in his company’s 110-year history and 36 straight years of record profits than grads have been in the past. Before the financial crash at the end of the first decade busi-ness school seniors were graduating with two or three job offers and starting salaries that often exceeded $50,000 with big sign-ing offers. Then came what is now known as the great recession

and only a small percentage of graduates were lucky enough to land a position with any promising future.

Gender seems to make a big difference in how business graduates see their career prospects. While women now exceed men in most business schools, less than half as many women as men believe that future opportunities to move into middle man-agement or executive ranks are equal for men and women.

Skill Building Exercise

Make a list of five things that are highest in priority for you when considering alternative employment opportunities. Submit your list to your instructor, who will merge the lists pro-vided by you and the rest of your class members and distribute it to the entire class (with names removed). As a class, discuss what it is that new employees expect from their organizations, whether or not those expectations are realistic, and what factors are likely to impinge upon companies’ success or failure in meet-ing those expectations.

Sources: S. Needleman, “Study asks: Who has easy path to top?” Wall

Street Journal, January 28, 2010, A-1; G. Gloeckler, “With jobs scarce,

Business Schools get creative,” BusinessWeek, March 15, 2010, 18–19; L. Gerdes, “The best places to launch a career,” BusinessWeek, September 15, 2010, 22–23; S. Shellenberger, “Avoiding the next Enron: Today’s crop of soon to be grads seeks’ job security,” Wall Street Journal, February 16, 2010, C-1.

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MANAGEMENT CLOSE-UP

1.1

THEME: CUSTOMER FOCUS

How Outsourcing Is Transforming Whole Industries

and Changing the Way We Work

In theory, it is becoming possible to buy, off the shelf, practically any function you need to run a company. Some examples follow below:

䊉 Want to start a budget airline but don’t want to invest in a huge back office? Accenture’s Navitaire unit can manage reservations, plan routes, assign crew, and calculate optimal prices for each seat.

䊉 Have a cool new telecom or medical device but lack market researchers? For about $5,000, analytics outfits such as New Delhi-based Evalueserve Inc. will, within a day, assemble a team of Indian patent attorneys, engineers, and business analysts, start mining global databases, and call dozens of U.S. experts and wholesalers to provide an independent appraisal.

䊉 Want to quickly market a new mutual fund or insurance policy? IT services providers such as India’s Tata Consultancy Services Ltd. are building software platforms that furnish every business process needed and secure all regulatory approvals.

䊉 The $57 billion consumer-products company Procter and Gamble has outsourced everything from IT infrastructure and human resources to management of its offices from Cincinnati to Moscow.

䊉 If a Penske truck is held up at a weigh station because it lacks a certain permit, the driver calls an 800 number. Genpact staff in India obtains the document over the Web. The weigh station is notified electronically, and the truck is back on the road within 30 minutes.

䊉 Outsourcing figures heavily in pharmaceutical company Lilly’s strategy to lower costs. The drugmaker maker now does

20 percent of its chemistry work in China for one-quarter the U.S. cost and helped fund a start-up lab, Shanghai’s Chem-Explorer Co., with 230 chemists. Lilly now is trying to slash the costs of clinical trials on human patients, which range from $50 million to $300 million per drug, and is expanding such efforts in Brazil, Russia, China, and India.

䊉 More and more American hospitals are using radiologists in India who work around the clock virtually interpreting CT scans and x-rays and then send their reports back to the hospitals. This is all done at a fraction of the expense it would take in the United States where radiologists typically earn over $300,000 a year.

䊉 OnStor Inc., a Los Gatos, California, developer of storage sys-tems, says its tie-up with the Bangalore engineering-services outfit HCL Technologies Ltd. enables it to get customized prod-ucts to clients twice as fast as its major rivals. “If we want to recruit a great engineer in Silicon Valley, our lead time is three months,” says CEO Bob Miller. “With HCL, pick up the phone and get somebody in two or three days.”

Based on M. Ihiwan “While Sony bets on outsourcing TV’s, the Korean giant is build-ing an edge by makbuild-ing its own,” BusinessWeek, January 18, 2010,11–12; P. Conlin, M. Conlin, and M. Herbst, “The disposable worker,” BusinessWeek, January 18, 2010, 19–21; B. Steverman, “The action stays offshore,” BusinessWeek, January 4, 2010, 34–36; S. Federico, “Outsourcing versus integration at home or abroad and firm heterogeneity,” Empirica, 37(1), February, 2010, 15–28; “Can’t afford employ-ees? Then outsource/subcontract,” www.prlog.org., 2011.

Penske Truck Leasing and India’s Genpact collaborate closely on the documentation required when Penske buys a truck and leases it to a U.S. customer. Genpact’s Indian staff works remotely to secure titles, registrations, and permits online. When the truck comes back, the driver’s log and other documen-tation for fuel and taxes are forwarded to Genpact’s Mexican office for entry to Penske’s computer system. Genpact in Hyderabad, India, processes the data for tax filings and accounting.

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MANAGEMENT CLOSE-UP

1.2

THEME: ETHICS

Enforcing Ethics at Work

Patrick J. Gnazzo is among the more visible examples of a new species of executive: high-profile former government lawyers and judges who have been tapped, usually by scandal-tainted companies, to police employees. Others in this group include former Securities and Exchange Commission Chairman Richard C. Breeden, who was named outside monitor of KPMG in 2006 and is now taking a similar role at Hollinger International Inc. Eric R. Dinallo and Beth L. Golden, alumni of New York Attorney General Eliot Spitzer’s office, have taken jobs at Morgan Stanley and Bear, Stearns & Co., respectively. Old-style ethics officers reported to managers far down the ladder. But now they can report directly to the board, bypassing even the CEO. For instance, Gnazzo has the power to go right to independ-ent directors with problems. Whenever needed, he can quiz CEO John Swainson, the former IBM vice president who joined CA to clean it up. He also confers regularly with the CEO and five other top officers on a new disclosure committee that meets to talk about SEC filings and news releases. In the words of Gnazzo, “You did the right thing. You created an ethics program for your organization

built around a workable and enforceable code of behavior for employees. You appointed compliance or ethics officers to adminis-ter the program, and you built a structure to receive employee alle-gations and feedback.

Have you done enough? No.

Here’s a simple truth: A certain number of your employees will not raise issues to management unless they are promised confiden-tiality throughout the process, including in any potential litigation. Under current law, your ethics program cannot guarantee that protection. Consequently, you will not hear some things that you should.”

Sources: Based on G. R. Wratney “Are you serious about ethics: For companies that can’t guarantee confidentiality the answer is no,” The Conference Board, www.conference-board.org., 2011; M. O’Connor, “Federal Procurement Ethics: The complete legal guide,” http://books.google.com, 2010; A. Onifade, “ The indispensa-ble secretary,” Journal of Social Science, 2010, 22(1); 47–51; J. Goldberg, ”Compliance officers take their own path,” New York Law Journal, 2007, April 19, 15–25; J. Weber, “The New Ethics Enforcers, BusinessWeek, February 13, 2006, pp. 75–77.

MANAGEMENT IS EVERYONE’S BUSINESS 1.1

WORKING AS A MANAGER To become a successful manager requires that you learn how to be flex-ible and adaptable to be able to do a variety of things:

䊉 Develop an appreciation for the big picture as well as how the details fit into the big picture.

䊉 Be in touch with what is happening inside and outside your unit, as well as externally, with an eye toward setting goals that capitalize on opportunities and deal with potential threats.

䊉 Plan activities to meet personal and organizational goals making best use of resources available to you.

䊉 Treat your peers and those below and above you with respect.

䊉 Energize subordinates to fully use their talents and provide them with an example to imitate of highly ethical behaviors.

䊉 Be fair, honest, and consistent in your dealing with subordinates, but build on their unique strengths.

䊉 Communicate clearly and persuasively, making effective and accurate use of all information avail-able to you.

䊉 Do not be afraid to make bold decisions, but be sure that these are made after careful considera-tion of all available data and the inputs of various parties who have a stake in these decisions. jobs, prioritize tasks, allocate time, monitor their own work, and set their own objectives. By being empowered to make these important choices, employees are less dependent on superiors to tell them what to do and are encouraged to use their own expertise and ideas. In a very real sense, employees are increasingly being asked to manage themselves.

Each chapter of this book has a “Management Is Everyone’s Business” feature that empha-sizes working as an individual and that summarizes the practical implications of the material being discussed for your individual success in organizations, whether or not you have or will have supervisory responsibilities. The first such Management Is Everyone’s Business feature reflects much of what we discuss in this introductory chapter, although these issues will be revis-ited in greater depth in future chapters. See Management Is Everyone’s Business 1.2 on page 8.

Barriers between departments are also breaking down. Functional areas, rivalries, and divi-sions cause people to develop narrow, parochial views of their jobs and this discourages innovation. Departmentalization prevents employees from understanding corporatewide objectives and

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MANAGEMENT IS EVERYONE’S BUSINESS 1.3

WORKING AS A TEAM Most successful organizations nowadays strongly support the team concept, believing that employees with diverse skills working together on common problems are more likely to be innovative and that employees working as part of a team are more committed to doing a good job. This means that organizations that truly believe in the team concept should:

䊉 Evaluate and reward team performance, not just the contribution of individual employees.

䊉 Give sufficient autonomy for teams to make their own decisions.

䊉 Select team members who are different yet complement each other.

䊉 Form teams to deal with identifiable problems or issues, but also support teams whose task is to be creative and “think outside the box.”

䊉 Select and train managers capable of coordinating or linking the activities of various teams.

MANAGEMENT IS EVERYONE’S BUSINESS 1.2

WORKING AS AN INDIVIDUAL To succeed in most modern organizations you will be asked as an individual to meet multiple expectations:

䊉 Show initiative. Most successful firms value individuals capable of acting autonomously without close supervision. Some people refer to it as “self-leadership.”

䊉 Show a capacity to become a leader. This means that you should be able to influence others and not simply follow directions.

䊉 Learn to appreciate the organization’s culture and how you can work within that culture.

䊉 Be trusted. This means that you are reliable, honest, loyal, and keep your word.

䊉 Show a capacity to keep on learning. Challenging assignments most likely will go to individuals who can stretch their knowledge and skills and strive for personal growth.

䊉 Be willing to change your approach as situations change. Inflexible people are unlikely to succeed in a rapidly changing environment.

promotes interunit conflict rather than cooperation, so the organization loses flexibility and is unable to respond to competitive challenges in a more integrated, cohesive fashion. For this reason, firms are increasingly relying on employee teams that form to work on common projects. When these teams are composed of individuals from different parts of the organization, they are referred to as functional teams; when team members have diverse backgrounds, the teams are cross-disciplinary. Teams are asked to perform many of the managerial roles of traditional managers. That is, rather than relying on a superior for direction, a team often defines the problem, sets objec-tives, establishes priorities, proposes new ways of doing things, and assigns members to different tasks. Teams fulfill important managerial roles by linking various parts of the organization to focus on common problems, issues, and complex tasks that require integration and concerted actions by dissimilar individuals.

Each chapter has a “Management Is Everyone’s Business” feature that centers on working as a team and that points out how the materials discussed in the chapter help teams operate more effectively. The first such feature is Management Is Everyone’s Business 1.3, summarizing the practical implications for teams of the concepts presented in this introductory chapter. As was the case for managers and individuals (Management Is Everyone’s Business 1.1 and 1.2), these implications for teams will be discussed in greater depth in future chapters.

The next sections of the chapter describe the critical aspects of most management jobs. Figure 1.1 summarizes these aspects, namely, the ability to perform basic managerial functions (planning and strategizing, organizing, leading, and controlling) and the ability to perform major managerial roles (interpersonal, informational, and decisional). While the relative importance of each aspect may vary (for instance, strategic managers may be more involved in planning and strategizing than are operational managers), those capable of doing well on each of these job aspects are more likely to have a successful managerial career and be promoted to more respon-sible positions over time.

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LOC-In

1 Learning Objective Check-In

Gen-Art is a custom framing and art service boutique that is considering expansion into the sur-rounding regional market. The 20-person company has highly decentralized job authority and decision making. Instead of strict functional areas, the firm uses a team-based approach to satis-fying client needs. Gen-Art avoids many levels of management in favor of a barebones approach to structure, with executives, project managers, and teams of technical staff. Ginny and Mercedes are two managers at Gen-Art.

1. Ginny is the Vice President of Operations at Gen-Art. She helps make decisions regarding growth, goals, and longer-term issues. Ginny is a .

a. strategic manager b. operational manager c. front-line manager d. tactical manager

2. As one of the project managers for Gen-Art, Mercedes operates at the level. She is the direct link between the executive level of the firm and the technical staff she oversees. a. strategic

b. controlling management c. tactical

d. bureaucratic management

Interpersonal Informational Decisional

Perform managerial roles effectively What it takes to be a successful manager Perform managerial functions effectively Leading Controlling Organizing Planning and strategizing FIGURE 1.1 Key Aspects of Managerial Success

The Four Management Functions

More than once the question has been posed, “What do managers do?” Or perhaps more precisely, “What should they do?” Whether at the managerial, individual, or team level, the management process should include planning and strategizing, organizing, leading, and controlling. Some of these activities are typically performed at particular organizational levels; for example, planning and strategy making are core activities for senior executives. However, in most contemporary