CPA Chapter 5 #1Last NameFirst Name1. T.docx

CPA Chapter 5 #1
Last Name:
First Name:
1. The manager of a new research and development firm wants
to ensure that all business performed follows ethical practices.
Compose a brief company policy statement that explains the
concept of "ethical behavior" in a way that all employees
understand expectations. Be sure to make clear the relationship
between ethics, law, and free choice.
2. Briefly explain the justice approach to ethics and then
explain the three types of justice.
3. List the five approaches that are used to describe values for
guiding ethical decision making. Briefly describe each.
4. What is social responsibility? Why is it considered a difficult
concept to grasp?
5. List and define the criteria of corporate social responsibility.
6. Many companies routinely use Facebook and other social
media outlets as part of their management practice. In a climate

where so much information is so readily available to him, why
is it important for a manager to be ethical when using social
media for business purposes? Write a short essay that answers
the above question and argues whether or not social media can
be used ethically to monitor employee behavior and to gather
competitive intelligence.
Page 1 of 1
Management
RICHARD L. DAFT
Vanderb i l t Un i ve r s i t y
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Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain
• United Kingdom • United States
Management
RICHARD L. DAFT

NINTH EDITION
© 2010, 2008 South-Western, Cengage Learning
ALL RIGHTS RESERVED. No part of this work covered by the
copyright hereon
may be reproduced or used in any form or by any means—
graphic, electronic,
or mechanical, including photocopying, recording, taping, Web
distribution,
information storage and retrieval systems, or in any other
manner—except as
may be permitted by the license terms herein.
Library of Congress Control Number: 2008943508
Student Edition ISBN 13: 978-0-324-59584-0
Student Edition ISBN 10: 0-324-59584-0
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Management, Ninth Edition
Richard L. Daft, with the assistance of
Patricia G. Lane
Vice President of Editorial, Business: Jack
W. Calhoun
Editor-in-Chief: Melissa S. Acuña
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With deep appreciation to Dorothy,
the playwright and partner in my life,
and to my parents, who started my life
toward outcomes that I could not understand at the time.

vii
About the Author
Richard L. Daft, PhD, is the Brownlee O. Currey, Jr., Pro-
fessor of Management in the Owen Graduate School
of Management at Vanderbilt University. Professor
Daft specializes in the study of organization theory
and leadership. Dr. Daft is a Fellow of the Academy of
Management and has served on the editorial boards
of Academy of Management Journal, Administrative Sci-
ence 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 12 books,
including Organization Theory and Design (South-Western,
2007), The Leadership Experience (South-Western, 2008),
and What to Study: Generating and Developing Research
Questions (Sage, 1982). He published Fusion Leadership:
Unlocking the Subtle Forces That Change People and Orga-

nizations (Berrett-Koehler, 2000, with Robert Lengel). He has
also authored dozens of
scholarly articles, papers, and chapters. His work has been
published in Administra-
tive 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 Organi-
zational Behavior Teaching Review. Professor Daft is currently
working on a new book,
The Executive and the Elephant. He also is an active teacher
and consultant. He has
taught management, leadership, organizational change,
organizational theory, and
organizational behavior.
Professor Daft served as associate dean, produced for-profi t
theatrical produc-
tions, and helped manage a start-up enterprise. He has been
involved in management
development and consulting for many companies and
government organizations,
including the American Banking Association, Bridgestone, Bell

Canada, the National
Transportation Research Board, Nortel, TVA, Pratt & Whitney,
State Farm Insur-
ance, Tenneco, the United States Air Force, the United States
Army, J. C. Bradford &
Co., Central Parking System, Entergy Sales and Service,
Bristol-Myers Squibb, First
American National Bank, and the Vanderbilt University Medical
Center.
ix
Preface
Managing for Innovation in a Changing World
In recent years, organizations have been buffeted by massive
and far-reaching social,
technological, and economic changes. Any manager who still
believed in the myth of

stability was rocked out of complacency when, one after
another, large fi nancial insti-
tutions in the United States began to fail. Business schools, as
well as managers and
businesses, were scrambling to keep up with the fast-changing
story and evaluate its
impact. This edition of Management addresses themes and
issues that are directly rel-
evant to the current, fast-shifting business environment. I
revised Management with
a goal of helping current and future managers fi nd innovative
solutions to the prob-
lems 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 turmoil, the need for
crisis management
skills, e-business, rapidly changing technologies, globalization,
outsourcing, global
virtual teams, knowledge management, global supply chains, the
Wall Street melt-
down, and other changes 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 turmoil,
political confusion, and
general uncertainty.
In the traditional world of work, management was to control and
limit people,
enforce rules and regulations, seek stability and effi ciency,
design a top-down hier-
archy, and achieve bottom-line results. To spur innovation and
achieve high per-
formance, however, managers need different skills to engage
workers’ hearts and
minds as well as take advantage of their physical labor. The
new workplace asks that
managers focus on leading change, harnessing people’s
creativity and enthusiasm,
fi nding shared visions and values, and sharing information and
power. Teamwork,
collaboration, participation, and learning are guiding principles
that help managers

and employees maneuver the diffi cult terrain of today’s
turbulent business environ-
ment. Managers focus on developing, not controlling, people to
adapt to new tech-
nologies and extraordinary environmental shifts, and thus
achieve high performance
and total corporate effectiveness.
My vision for the ninth edition of Management is to present the
newest manage-
ment ideas for turbulent times in a way that is interesting and
valuable to students
while retaining the best of traditional management thinking. To
achieve this vision, I
have included the most recent management concepts and
research and have shown
the contemporary application of management ideas in
organizations. I have added
a questionnaire at the beginning of each chapter that draws
students personally into
the topic and gives them some insight into their own
management skills. A chapter
feature for new managers, called the New Manager Self-Test,
gives students a sense of
what will be expected when they become managers. 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 fi eld of
management. The South-
Western/Cengage Learning staff and I have worked together to
provide a textbook
better than any other at capturing the excitement of
organizational management.
I revised Management to provide a book of utmost quality that
will create in stu-
dents both respect for the changing fi eld of management and
confi dence that they can
PREFACEx
understand and master it. The textual portion of this book has
been enhanced through
the engaging, easy-to-understand writing style and the many in-
text examples, boxed
items, and short exercises that make the concepts come alive for
students. The graphic

component has been enhanced with several new exhibits and a
new set of photo essays
that illustrate specifi c management concepts. The well-chosen
photographs provide
vivid illustrations and intimate glimpses of management scenes,
events, and people.
The photos are combined with brief essays that explain how a
specifi c management
concept looks and feels. Both the textual and graphic portions
of the textbook help
students grasp the often abstract and distant world of
management.
Focus on Innovation: New to the Ninth Edition
The ninth edition of Management is especially focused on the
future of management
education by identifying and describing emerging ideas and
examples of innovative
organizations and by providing enhanced learning opportunities
for students.
Learning Opportunities
The ninth edition has taken a leap forward in pedagogical
features to help students
understand their own management capabilities and learn what it

is like to manage in
an organization today. New to this edition is an opening
questionnaire that directly
relates to the topic of the chapter and enables students to see
how they respond to
situations and challenges typically faced by real-life managers.
New Manager Self-
Tests in each chapter provide further opportunity for students to
understand their
management abilities. These short feedback questionnaires give
students insight into
how they would function in the real world of management. End-
of-chapter questions
have been carefully revised to encourage critical thinking and
application of chap-
ter concepts. End-of-chapter cases and ethical dilemmas help
students sharpen their
diagnostic skills for management problem solving.
Chapter Content
Within each chapter, many topics have been added or expanded
to address the cur-
rent issues managers face. At the same time, chapter text has
been tightened and
sharpened to provide greater focus on the key topics that count

for management
today. This tightening has resulted in a shortening of the text
from 21 to 19 chapters.
The essential elements about operations and technology have
been combined into one
chapter. An appendix on entrepreneurship and small business
has been provided for
students who want more information on managing in small
businesses start-ups.
Chapter 1 includes a section on making the leap from being an
individual contribu-
tor in the organization to becoming a new manager and getting
work done primarily
through others. The chapter introduces the skills and
competencies needed to manage
organizations effectively, including issues such as managing
diversity, coping with glo-
balization, and managing crises. In addition, the chapter
discusses today’s emphasis
within organizations on innovation as a response to a rapidly
changing environment.
Chapter 2 continues its solid coverage of the historical
development of management

and organizations. It also examines new management thinking
for turbulent times.
The chapter includes a new section on systemic thinking and an
expanded discussion
of post-World War II management techniques. The fi nal part of
the chapter looks at
issues of managing the technology-driven workplace, including
supply chain man-
agement, customer relationship management, and outsourcing.
Chapter 3 contains an updated look at current issues related to
the environment and
corporate culture, including a new section on issues related to
the natural environ-
ment and managers’ response to environmental advocates. The
chapter also illus-
trates how managers shape a high–performance culture as an
innovative response to
a shifting environment.
PREFACE xi
Chapter 4 takes a look at the growing power of China and India

in today’s global
business environment and what this means for managers around
the world. The
chapter discusses the need for cultural intelligence, and a new
section looks at under-
standing communication differences as an important aspect of
learning to manage
internationally or work with people from different cultures. In
addition, the complex
issues surrounding globalization are discussed, including a
consideration of the cur-
rent globalization backlash. A new section on human resources
points out the need
for evaluating whether people are suitable for foreign
assignments.
Chapter 5 makes the business case for incorporating ethical
values in the organi-
zation. The chapter includes a new discussion of the bottom-of-
the-pyramid business
concept and how managers are successfully applying this new
thinking. The chapter
also has an expanded discussion of ethical challenges managers
face today, includ-
ing responses to recent fi nancial scandals. It considers global

ethical issues, as well,
including a discussion of corruption rankings of various
countries.
Chapter 6 provides a more focused discussion of the overall
planning process and
a new discussion of using strategy maps for aligning goals. This
chapter also takes
a close look at crisis planning and how to use scenarios. The
chapter’s fi nal section
on planning for high performance has been enhanced by a new
discussion of intelli-
gence teams and an expanded look at using performance
dashboards to help manag-
ers plan in a fast-changing environment.
Chapter 7 continues its focus on the basics of formulating and
implementing strategy.
It includes a new section on diversifi cation strategy, looking at
how managers use
unrelated diversifi cation, related diversifi cation, or vertical
integration as strategic
approaches in shifting environments. This chapter also looks at
new trends in strat-
egy, including the dynamic capabilities approach and

partnership strategies.
Chapter 8 gives an overview of managerial decision making
with an expanded dis-
cussion of how confl icting interests among managers can create
uncertainty regard-
ing decisions. A new section on why managers often make bad
decisions looks at the
biases that can cloud judgment. The chapter also includes a new
section on innova-
tive group decision making and the dangers of groupthink.
Chapter 9 discusses basic principles of organizing and describes
both traditional and
contemporary organizational structures in detail. The chapter
includes a discussion
of organic versus mechanistic structures and when each is more
effective. Chapter 9
also provides a description of the virtual network organization
form.
Chapter 10 includes a more focused discussion of the critical
role of managing change
and innovation today. The chapter includes a new discussion of
the ambidextrous

approach for both creating and using innovations and has
expanded material on
exploration and creativity, the importance of internal and
external cooperation, and
the growing trend toward open innovation.
Chapter 11 includes an expanded discussion of the strategic role
of HRM in building
human capital. The chapter has new sections on coaching and
mentoring and the trend
toward part-time and contingent employment. New ways of
doing background checks
on applicants, such as checking their pages on social networks,
are discussed, and the
chapter also looks at the changing social contract between
employers and employees.
Chapter 12 has been revised and updated to refl ect the most
recent thinking on organiza-
tional diversity issues. The chapter looks at how diversity is
changing the domestic and
global workforce and includes a new section on the traditional
versus inclusive models
for managing diversity. This chapter also contains new coverage
of the dividends of

diversity; an expanded discussion of prejudice, discrimination,
and stereotypes; and a
new look at the difference between stereotyping and valuing
cultural differences. The
chapter includes a new fi ve-step process for achieving cultural
competence.
Chapter 13 continues its solid coverage of the basics of
organizational behavior, includ-
ing personality, values and attitudes, perception, emotional
intelligence, learning and
PREFACExii
problem-solving styles, and stress management. Many exercises
and questionnaires
throughout this chapter enhance students’ understanding of
organizational behavior
topics and their own personalities and attitudes.
Chapter 14 has been enriched with a discussion of followership.
The chapter empha-
sizes that good leaders and good followers share common

characteristics. Good lead-
ership can make a difference, often through subtle, everyday
actions. The discussion
of power and infl uence has been expanded to include the
sources of power that are
available to followers as well as leaders. The discussions of
charismatic, transforma-
tional, and interactive leadership have all been revised and
refocused.
Chapter 15 covers the foundations of motivation and also
incorporates recent think-
ing about motivational tools for today, including an expanded
treatment of employee
engagement. The chapter looks at new motivational ideas such
as the importance of
helping employees achieve work-life balance, incorporating fun
and learning into
the workplace, giving people a chance to fully participate, and
helping people fi nd
meaning in their work.
Chapter 16 begins with a discussion of how managers facilitate
strategic conversa-
tions by using communication to direct everyone’s attention to

the vision, values,
and goals of the organization. The chapter explores the
foundations of good com-
munication and includes a new section on gender differences in
communication, an
enriched discussion of dialogue, and a refocused look at the
importance of effective
written communication in today’s technologically connected
workplace, including
the use of new forms of manager communication such as blogs.
Chapter 17 includes a new section on the dilemma of teams,
acknowledging that
teams are sometimes ineffective and looking at the reasons for
this, including such
problems as free riders, lack of trust among team members, and
so forth. The chapter
then looks at how to make teams effective, including a signifi
cantly revised discus-
sion of what makes an effective team leader. The chapter covers
the types of teams
and includes a new look at effectively using technology in
virtual teams. The chapter
also includes a section on managing confl ict, including the use
of negotiation.

Chapter 18 provides an overview of fi nancial and quality
control, including Six
Sigma, ISO certifi cation, and a new application of the balanced
scorecard, which
views employee learning and growth as the foundation of high
performance. The dis-
cussion of hierarchical versus decentralized control has been
updated and expanded.
The chapter also addresses current concerns about corporate
governance and fi nding
a proper balance of control and autonomy for employees.
Chapter 19 has been thoroughly revised to discuss recent trends
in operations man-
agement, information technology, and e-business. The chapter
begins by looking at
the organization as a value chain and includes an expanded
discussion of supply chain
management and new technologies such a radio frequency
identifi cation (RFID). The
discussion of information technology has been updated to
include the trend toward
user-generated content through wikis, blogs, and social
networking. The chapter

explores how these new technologies are being applied within
organizations along
with traditional information systems. The chapter also discusses
e-commerce strate-
gies, the use of business intelligence software, and knowledge
management.
In addition to the topics listed above, this text integrates
coverage of the Internet
and new technology into the various topics covered in each and
every chapter.
Organization
The chapter sequence in Management is organized around the
management functions
of planning, organizing, leading, and controlling. These four
functions effectively
encompass both management research and characteristics of the
manager’s job.
Part One introduces the world of management, including the
nature of management,
issues related to today’s chaotic environment, the learning
organization, historical
perspectives on management, and the technology-driven

workplace.
PREFACE xiii
Part Two examines the environments of management and
organizations. This sec-
tion includes material on the business environment and
corporate culture, the global
environment, ethics and social responsibility, and the natural
environment.
Part Three presents three chapters on planning, including
organizational goal setting
and planning, strategy formulation and implementation, and the
decision-making
process.
Part Four focuses on organizing processes. These chapters
describe dimensions of
structural design, the design alternatives managers can use to
achieve strategic objec-
tives, structural designs for promoting innovation and change,
the design and use of

the human resource function, and the ways managing diverse
employees are signifi -
cant to the organizing function.
Part Five is devoted to leadership. The section begins with a
chapter on organiza-
tional behavior, providing grounding in understanding people in
organizations. This
foundation paves the way for subsequent discussion of
leadership, motivation of
employees, communication, and team management.
Part Six describes the controlling function of management,
including basic principles
of total quality management, the design of control systems,
information technology,
and techniques for control of operations management.
Innovative 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 innova-
tive features that draw students in and help them contemplate,
absorb, and comprehend

management concepts. South-Western has brought together a
team of experts to create
and coordinate color photographs, video cases, 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 devices
provide an overview
of what is to come and can also be used by students to guide
their study and test their
understanding and retention of important points.
Opening Questionnaire. The text grabs student attention
immediately by giving the
student a chance to participate in the chapter content actively by
completing a short
questionnaire related to the topic.
Take a Moment. At strategic places through the chapter,
students are invited to Take
a Moment to apply a particular concept or think about how they
would apply it as a

practicing manager. This call to action further engages students
in the chapter con-
tent. Some of the Take a Moment features also refer students to
the associated New
Manager Self-Test, or direct students from the chapter content
to relevant end-of-
chapter materials, such as an experiential exercise or an ethical
dilemma.
New Manager Self-Test. A New Manager Self-Test in each
chapter of the text provides
opportunities for self-assessment as a way for students to
experience management
issues in a personal way. The change from individual performer
to new manager is
dramatic, and these self-tests provide insight into what to
expect and how students
might perform in the world of the new manager.
Concept Connection Photo Essays. A key feature of the book is
the use of photo-
graphs accompanied by detailed photo essay captions that
enhance learning. Each
caption highlights and illustrates one or more specifi c concepts
from the text to rein-

force student understanding of the concepts. Although the
photos are beautiful to
look at, they also convey the vividness, immediacy, and
concreteness of management
events in today’s business world.
Contemporary Examples. Every chapter of the text contains
several written examples
of management incidents. They are placed at strategic points in
the chapter and are
PREFACExiv
designed to illustrate the application of concepts to specifi c
companies. These in-text
examples—indicated by an icon in the margin—include well-
known U.S. and inter-
national companies such as Toyota, Facebook, UPS, LG
Electronics, Google, Unilever,
Siemens, and eBay, as well as less-well-known companies and
not-for-profi t organi-
zations such as Red 5 Studios, Strida, Genmab AS, ValueDance,
and the U.S. Federal

Bureau of Investigation (FBI). These examples put students in
touch with the real world
of organizations so that they can appreciate the value of
management concepts.
Manager’s Shoptalk Boxes. A Manager’s Shoptalk box in each
chapter addresses a
specifi c topic straight from the fi eld of management that is of
special interest to stu-
dents. These boxes may describe a contemporary topic or
problem that is relevant to
chapter content, or they may contain a diagnostic questionnaire
or a special example
of how managers handle a problem. The boxes heighten student
interest in the sub-
ject matter and provide an auxiliary view of management issues
not typically avail-
able in textbooks.
Video Cases. The six parts of the text conclude with video
cases, one per chapter, that
illustrate the concepts presented in that part. The 19 videos
enhance class discussion,
because students can see the direct application of the
management theories they have

learned. Companies discussed in the video package include
Recycline, Flight 001,
and Numi Organic Teas. Each video case explores the issues
covered in the video,
allowing students to synthesize the material they’ve just
viewed. The video cases
culminate with several questions that can be used to launch
classroom discussion or
as homework. Suggested answers are provided in the Media
Case Library.
Exhibits. Several exhibits have been added or revised in the
ninth 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 con-
solidate key points, indicate relationships among concepts, and
visually illustrate con-
cepts. They also make effective use of color to enhance their
imagery and appeal.
Glossaries. Learning the management vocabulary is essential to

understanding con-
temporary management. This process is facilitated in three
ways. First, key concepts
are boldfaced and completely defi ned where they fi rst appear
in the text. Second,
brief defi nitions are set out in the margin for easy review and
follow-up. Third, a
glossary summarizing all key terms and defi nitions appears at
the end of the book
for handy reference.
A Manager’s Essentials and Discussion Questions. Each chapter
closes with a sum-
mary of the essential points that students should retain. The
discussion questions are
a complementary learning tool that will enable students to check
their understand-
ing of key issues, to think beyond basic concepts, and to
determine areas that require
further study. The summary and discussion questions help
students discriminate
between main and supporting points and provide mechanisms
for self-teaching.
Management in Practice Exercises. End-of-chapter exercises

called “Management
in Practice: Experiential Exercise” and “Management in
Practice: Ethical Dilemma”
provide a self-test for students and an opportunity to experience
management issues
in a personal way. These exercises take the form of
questionnaires, scenarios, and
activities, and many also provide an opportunity for students to
work in teams. The
exercises are tied into the chapter through the Take a Moment
feature that refers stu-
dents to the end-of-chapter exercises at the appropriate point in
the chapter content.
Case for Critical Analysis. Also appearing at the end of each
chapter is a brief but
substantive case that provides an opportunity for student
analysis and class discus-
sion. Some of these cases are about companies whose names
students will recog-
nize; others are based on real management events but the
identities of companies and
managers have been disguised. These cases allow students to
sharpen their diagnos-
tic skills for management problem solving.

PREFACE xv
Continuing Case. Located at the end of each part, the
Continuing Case is a run-
ning discussion of management topics appropriate to that part as
experienced by
General Motors Company. Focusing on one company allows
students to follow the
managers’ and the organization’s long-term problems and
solutions in a sustained
manner.
Supplementary Materials
Instructor’s Manual. Designed to provide support for instructors
new to the course,
as well as innovative materials for experienced professors, the
Instructor’s Man-
ual includes Chapter Outlines, annotated learning objectives,
Lecture Notes, and
sample Lecture Outlines. Additionally, the Instructor’s Manual
includes answers
and teaching notes to end-of-chapter materials, including the

video cases and the
continuing case.
Instructor’s CD-ROM. Key instructor ancillaries (Instructor’s
Manual, Test Bank,
ExamView, and PowerPoint slides) are provided on CD-ROM,
giving instructors the
ultimate tool for customizing lectures and presentations.
Test Bank. Scrutinized for accuracy, the Test Bank includes
more than 2,000 true/
false, multiple-choice, short-answer, and essay questions. Page
references are indi-
cated for every question, as are designations of either factual or
application so that
instructors can provide a balanced set of questions for student
exams. Each question
is also tagged based on AACSB guidelines.
ExamView. Available on the Instructor’s Resource CD-ROM,
ExamView contains all
of the questions in the printed Test Bank. This program is an
easy-to-use test cre-
ation software compatible with Microsoft Windows. Instructors
can add or edit ques-

tions, instructions, and answers, and select questions (randomly
or numerically) by
previewing them on the screen. Instructors can also create and
administer quizzes
online, whether over the Internet, a local area network (LAN),
or a wide area network
(WAN).
PowerPoint Lecture Presentation. Available on the Instructor’s
Resource CD-ROM
and the Web site, the PowerPoint Lecture Presentation enables
instructors to custom-
ize their own multimedia classroom presentation. Containing an
average of 27 slides
per chapter, the package includes fi gures and tables from the
text, as well as outside
materials to supplement chapter concepts. Material is organized
by chapter and can
be modifi ed or expanded for individual classroom use.
PowerPoint slides are also
easily printed to create customized Transparency Masters.
Study Guide. Packed with real-world examples and additional
applications for help-
ing students master management concepts, this learning

supplement is an excellent
resource. For each chapter of the text, the Study Guide includes
a summary and com-
pletion exercise; a review with multiple-choice, true/false, and
short-answer ques-
tions; a mini case with multiple-choice questions; management
applications; and an
experiential exercise that can be assigned as homework or used
in class.
Video Package. The video package for Management, ninth
edition, contains two
options: On the Job videos created specifi cally for the ninth
edition of Daft’s Man-
agement and BizFlix videos. On the Job videos use real-world
companies to illustrate
management concepts as outlined in the text. Focusing on both
small and large busi-
ness, the videos give students an inside perspective on the
situations and issues that
corporations face. BizFlix are fi lm clips taken from popular
Hollywood movies such
as Failure to Launch, Rendition, and Friday Night Lights, and
integrated into the ninth
edition of Daft. Clips are supported by short cases and

discussion questions at the
end of each chapter.
Web Site (www.cengage.com/management/daft). Discover a rich
array of online
teaching and learning management resources that you won’t fi
nd anywhere else.
www.cengage.com/management/daft
PREFACExvi
Resources include interactive learning tools, links to critical
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Acknowledgments
A gratifying experience for me was working with the team of
dedicated professionals
at South-Western who were committed to the vision of
producing the best manage-
ment text ever. I am grateful to Joe Sabatino, executive editor,
whose enthusiasm,
creative ideas, assistance, and vision kept this book’s spirit
alive. Emma Newsom,
managing developmental editor, provided superb project
coordination and offered
excellent ideas and suggestions to help the team meet a
demanding and sometimes
arduous schedule. Kimberly Kanakes, executive marketing
manager, and Clint
Kernen, marketing manager, provided keen market knowledge
and innovative ideas
for instructional support. Martha Conway, senior content project
manager, cheerfully

and expertly guided me through the production process. Tippy
McIntosh contributed
her graphic arts skills to create a visually dynamic design. Ruth
Belanger, editorial
assistant, and Sarah Rose, marketing coordinator, skillfully
pitched in to help keep
the project on track. Joe Devine deserves a special thank you
for his layout expertise
and commitment to producing an attractive, high-quality
textbook. Additionally, BJ
Parker, Copyshop, USA, contributed the Continuing Case.
Here at Vanderbilt I want to extend special appreciation to my
assistant, Barbara
Haselton. Barbara provided excellent support and assistance on
a variety of proj-
ects that gave me time to write. I also want to acknowledge an
intellectual debt to
my colleagues, Bruce Barry, Ray Friedman, Neta Moye, Rich
Oliver, David Owens,
Ranga Ramanujam, Bart Victor, and Tim Vogus. Thanks also to
Deans Jim Bradford
and Bill Christie who have supported my writing projects and
maintained a positive
scholarly atmosphere in the school. Another group of people

who made a major con-
tribution to this textbook are the management experts who
provided advice, reviews,
answers to questions, and suggestions for changes, insertions,
and clarifi cations. I
want to thank each of these colleagues for their valuable
feedback and suggestions
on the ninth edition:
David Alexander
Christian Brothers
University
Reginald L Audibert
California State
University—Long Beach
Burrell A. Brown
California University of
Pennsylvania
Paula Buchanan
Jacksonville State
University

Diane Caggiano
Fitchburg State College
Bruce Charnov
Hofstra University
Gloria Cockerell
Collin College
Jack Cox
Amberton University
Paul Ewell
Bridgewater College
Mary M. Fanning
College of Notre Dame of
Maryland
Merideth Ferguson
Baylor University
Karen Fritz
Bridgewater College

Yezdi H. Godiwalla
University of Wisconsin—
Whitewater
James Halloran
Wesleyan College
Stephen R. Hiatt
Catawba College
Betty Hoge
Bridgewater College
Jody Jones
Oklahoma Christian
University
www.cengage.com/login
PREFACE xvii
Jerry Kinard

Western Carolina
University
Sal Kukalis
California State
Joyce LeMay
Bethel University
Wade McCutcheon
East Texas Baptist College
Tom Miller
Concordia University
W J Mitchell
Bladen Community College
John Okpara
Bloomsburg University
Lori A. Peterson
Augsburg College

Michael Provitera
Barry University
Abe Qastin
Lakeland College
Holly Caldwell Ratwani
Bridgewater College
Terry L. Riddle
Central Virginia Commu-
nity College
Thomas Sy
California State
Kevin A. Van Dewark
Humphreys College
Noemy Watchel
Kean University
Peter Wachtel
Kean University

David C. Adams
Manhattanville College
Erin M. Alexander
University of Houston–
Clear Lake
Hal Babson
Columbus State Community
College
Reuel Barksdale
Columbus State Community
College
Gloria Bemben
Finger Lakes Community
College
Pat Bernson
County College of Morris
Art Bethke
Northeast Louisiana

University
Thomas Butte
Humboldt State University
Peter Bycio
Xavier University, Ohio
Diane Caggiano
Fitchburg State College
Douglas E. Cathon
St. Augustine’s College
Jim Ciminskie
Bay de Noc Community
College
Dan Connaughton
University of Florida
Bruce Conwers
Kaskaskia College
Byron L. David

The City College of New
York
Richard De Luca
William Paterson
University
Robert DeDominic
Montana Tech
Linn Van Dyne
Michigan State University
John C. Edwards
East Carolina University
Mary Ann Edwards
College of Mount St. Joseph
Janice M. Feldbauer
Austin Community College
Daryl Fortin
Upper Iowa University

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New Hampshire Community
Technical College
Richard H. Gayor
Antelope Valley College
Dan Geeding
Xavier University, Ohio
James Genseal
Joliet Junior College
Peter Gibson
Becker College
Carol R. Graham
Western Kentucky
University
Gary Greene
Manatee Community
College
Ken Harris

Indiana University
Southeast
Paul Hayes
Coastal Carolina Commu-
nity College
Dennis Heaton
Maharishi University of
Management, Iowa
Jeffrey D. Hines
Davenport College
Bob Hoerber
Westminster College
James N. Holly
University of Wisconsin–
Green Bay
Genelle Jacobson
Ridgewater College
C. Joy Jones

Ohio Valley College
Kathleen Jones
University of North Dakota
Sheryl Kae
Lynchburg College
Jordan J. Kaplan
Long Island University
I would also like to continue to acknowledge those reviewers
who have contrib-
uted comments, suggestions and feedback on previous editions:
PREFACExviii
J. Michael Keenan
Western Michigan
University
Gloria Komer
Stark State College

Paula C. Kougl
Western Oregon University
Cynthia Krom
Mount St. Mary College
Mukta Kulkarni
University of Texas–San
Antonio
William B. Lamb
Millsaps College
Robert E. Ledman
Morehouse College
George Lehma
Bluffton College
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
Myrna P. Mandell
California State University,
Northridge
Daniel B. Marin
Louisiana State University
Michael Market
Jacksonville State
University
James C. McElroy
Iowa State University
Dennis W. Meyers
Texas State Technical

College
Alan N. Miller
University of Nevada–Las
Vegas
Irene A. Miller
Southern Illinois University
James L. Moseley
Wayne State University
Micah Mukabi
Essex County College
David W. Murphy
Madisonville Community
College
Nora Nurre
Upper Iowa University
Tomas J. Ogazon
St. Thomas University

Allen Oghenejbo
Mills College
Linda Overstreet
Hillsborough Community
College
Ken Peterson
Metropolitan State
University
Clifton D. Petty
Drury College
James I. Phillips
Northeastern State
University
Linda Putchinski
University of Central
Florida
Kenneth Radig
Medaille College

Gerald D. Ramsey
Indiana University
Southeast
Barbara Redmond
Briar Cliff College
William Reisel
St. John’s University–New
York
Terry Riddle
Central Virginia Commu-
nity College
Walter F. Rohrs
Wagner College
Meir Russ
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
Jeffrey Stauffer
Ventura College
William A. Stower
Seton Hall University

Mary Studer
Southwestern Michigan
College
Bruce C. Walker
Northeast Louisiana
University
Mark Weber
University of Minnesota
Emilia S. Westney
Texas Tech University
Stan Williamson
Northeast Louisiana
University
Alla L. Wilson
Green Bay
Ignatius Yacomb
Loma Linda University

Imad Jim Zbib
Ramapo College of New
Jersey
Vic Zimmerman
Pima Community College
James Swenson
Moorhead State University,
Minnesota
Irwin Talbot
St. Peter’s College
PREFACE xix
Andrew Timothy
Lourdes College
Frank G. Titlow
St. Petersburg Junior
College

John Todd
University of Arkansas
Philip Varca
University of Wyoming
Dennis L. Varin
Southern Oregon
University
Gina Vega
Merrimack College
George S. Vozikis
University of Tulsa
Bruce C. Walker
Northeast Louisiana
University
Mark Weber
University of Minnesota
Emilia S. Westney
Texas Tech University

Stan Williamson
Northeast Louisiana
University
Alla L. Wilson
Green Bay
Ignatius Yacomb
Loma Linda University
Imad Jim Zbib
Ramapo College of New Jersey
Vic Zimmerman
Pima Community College
I’d like to pay special tribute to my long-time 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 the ninth
edition of Management. She skillfully drafted materials for a

wide range of chapter
topics, boxes, 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
want to pay tribute to Mary Draper, who stepped in to help with
the research and
revision of this edition. Mary also did a superb job with the
copyedited manu-
script and page proofs. We could not have completed this
revision without Mary’s
excellent assistance.
Finally, I want to acknowledge the love and contributions of my
wife, Dorothy
Marcic. Dorothy has been very supportive during this revision
as we share our lives
together. I also want to acknowledge the love and support from
my fi ve daughters—
Danielle, Amy, Roxanne, Solange, and Elizabeth—who make
my life special during
our precious time together. Thanks also to B. J. and Kaitlyn and
Kaci and Matthew for

their warmth and smiles that brighten my life, especially during
our days together
skiing and on the beach.
Richard L. Daft
Nashville, Tennessee
December 2008
xxi
Part 1
INTRODUCTION TO MANAGEMENT
1 Innovative Management for Turbulent Times 2
2 The Evolution of Management Thinking 32
Part 2
THE ENVIRONMENT OF MANAGEMENT

3 The Environment and Corporate Culture 62
4 Managing in a Global Environment 94
5 Managing Ethics and Social Responsibility 128
Part 3
PLANNING
6 Managerial Planning and Goal Setting 158
7 Strategy Formulation and Implementation 184
8 Managerial Decision Making 212
Part 4
ORGANIZING
9 Designing Adaptive Organizations 242
10 Managing Change and Innovation 276
11 Managing Human Resources 306
12 Managing Diversity 340
Part 5
LEADING
13 Dynamics of Behavior in Organizations 376
14 Leadership 408
15 Motivating Employees 440

16 Managing Communication 470
17 Leading Teams 502
Part 6
CONTROLLING
18 Managing Quality and Performance 536
19 Managing the Value Chain, Information Technology,
and E-Business 568
APPENDIX A: MANAGING SMALL BUSINESS START-UPS
601
Glossary 625
Indexes 639
Brief Contents

xxiii
Part 1
INTRODUCTION TO MANAGEMENT
1 Innovative Management for Turbulent
Times 2
Are You Ready to Be a Manager? 3
Why Innovation Mat ters 4
The Defi nition of Management 4
The Four Management Functions 5
Planning 5 | Organizing 6 | Leading 6
Controlling 7
Organizational Performance 7
Management Skills 8
Conceptual Skills 8 | Human Skills 9 |
Technical Skills 9 | When Skills Fail 10
Management Types 10
Vertical Differences 11 | Horizontal
Differences 12

What Is It Like to Be a Manager? 13
Making the Leap: Becoming a New Manager 13
New Manager Self-Test: Manager Achievement 14
Manager’s Shoptalk: Do You Really Want To Be A
Manager? 16
Manager Activities 17 | Manager Roles 18
Managing in Small Businesses and Nonprofi t
Organizations 20
Management and the New Workplace 21
New Workplace Characteristics 21 | New
Management Competencies 23
A Manager’s Essentials: What Have We Learned? 23
Discussion Questions 24
Management in Practice: Experiential
Exercise 25
Management in Practice: Ethical Dilemma 26
Case for Critical Analysis 26
ON THE JOB VIDEO CASE 27
BIZ FLIX VIDEO CASE 28
Endnotes 29

2 The Evolution of Management Thinking 32
Are You a New-Style or an Old-Style Manager? 33
Management and Organization 34
Manager’s Shoptalk: Contemporary Management
Tools 35
Classical Perspective 36
Scientifi c Management 37 | Bureaucratic
Organizations 38 | Administrative Principles 40
Humanistic Perspective 41
Human Relations Movement 42 | Human
Resources Perspective 43
New Manager Self-Test: Evolution of Style 44
Behavioral Sciences Approach 45
Management Science Perspective 46
Recent Historical Trends 47
Systems Theory 47 | Contingency
View 48 | Total Quality Management 49
Innovative Management Thinking For Turbulent

Times 50
The Learning Organization 50
Managing the Technology-Driven Workplace 50
Management in Practice: Experiential Exercise 53
Endnotes 57
Continuing Case 60
3 The Environment and Corporate
Culture 62
Are You Fit for Managerial Uncertainty? 63
The External Environment 64
General Environment 65
Manager’s Shoptalk: Creating Guanxi in China 67
Task Environment 69

The Organization–Environment Relationship 72
Environmental Uncertainty 72 | Adapting to the
Environment 73
Part 2
THE ENVIRONTMENT OF MANAGEMENT
Contents
xxiv
The Internal Environment: Corporate Culture 75
Symbols 77 | Stories 77 | Heroes 77
Slogans 78 | Ceremonies 78
Environment and Culture 78
Adaptive Cultures 79 | Types of Cultures 79
New Manager Self-Test: Culture Preference 82
Shaping Corporate Culture for Innovative Response 82
Managing the High-Performance
Culture 83 | Cultural Leadership 85

Endnotes 91
4 Managing in a Global Environment 94
Are You Ready To Work Internationally? 95
A Borderless World 96
Getting Started Internationally 98
Exporting 98 | Outsourcing 99 | Licensing 99
Direct Investing 100 | China Inc. 101
The International Business Environment 102
The Economic Environment 103
Economic Development 103 | Resource and
Product Markets 103 | Exchange Rates 104
The Legal-Political Environment 104

The Sociocultural Environment 105
Social Values 105
Manager’s Shoptalk: How Well Do You Play The
Culture Game? 108
Communication Differences 109 | Other Cultural
Characteristics 110
International Trade Alliances 111
GAT T and the World Trade
Organization 112 | European
Union 112 | North American Free Trade
Agreement (NAF TA) 113
The Globalization Backlash 113
Multinational Corporations 114
Managing in a Global Environment 115
Developing Cultural Intelligence 115 | Managing
Cross-Culturally 116
New Manager Self-Test: Are You Culturally
Intelligent? 117

Endnotes 124
5 Managing Ethics and Social
Responsibility 128
Will You Be a Courageous Manager? 129
What Is Managerial Ethics? 130
Ethical Dilemmas: What Would You Do? 131
Criteria for Ethical Decision Making 132
Utilitarian Approach 132
Individualism Approach 132 | Moral-Rights
Approach 133 | Justice Approach 133
Manager Ethical Choices 134
Manager’s Shoptalk: How to Challenge the Boss on
Ethical Issues 136
New Manager Self-Test: Self and Others 137
What Is Corporate Social Responsibility? 138

Organizational Stakeholders 138 | The Bottom of
the Pyramid 140
The Ethic of Sustainability 141
Evaluating Corporate Social Responsibilit y 142
Managing Company Ethics and Social
Responsibilit y 144
Code of Ethics 144 | Ethical
Structures 145 | Whistle-Blowing 146 | The
Business Case for Ethics and Social
Responsibility 147
Endnotes 153
Continuing Case 156
6 Managerial Planning and Goal Setting 158
Does Goal Set ting Fit Your Management Style? 159

Overview of Goals and Plans 160
Levels of Goals and Plans 160 | Purposes of
Goals and Plans 160 | The Organizational
Planning Process 162
Goals in Organizations 162
New Manager Self-Test: Your Approach to
Studying 163
Organizational Mission 163
Goals and Plans 164 | Aligning Goals with
Strategy Maps 166
Part 3
PLANNING
CONTENTS
xxv
Operational Planning 167
Criteria for Effective Goals 168 | Management

by Objectives 168 | Single-Use and Standing
Plans 171
Manager’s Shoptalk: Regulating E-Mail in the
Workplace 171
Planning for a Turbulent Environment 172
Contingency Planning 172 | Building
Scenarios 173 | Crisis Planning 173
Planning for High Performance 175
Traditional Approaches to Planning 175 | High-
Performance Approaches to Planning 175
Endnotes 182
7 Strategy Formulation and
Implementation 184

What Is Your Strategy Strength? 185
Thinking Strategically 186
New Manager Self-Test: Your Approach to Studying,
Part 2 187
What Is Strategic Management? 188
Purpose of Strategy 188 | Levels of Strategy 190
The Strategic Management Process 191
Strategy Formulation Versus
Execution 191 | SWOT Analysis 192
Formulating Corporate-Level Strategy 194
Portfolio Strategy 194 | The BCG
Matrix 194 | Diversifi cation Strategy 195
Formulating Business-Level Strategy 196
Porter’s Five Competitive
Forces 196 | Competitive Strategies 198
New Trends in Strategy 199
Innovation from Within 200 | Strategic
Partnerships 200
Global Strategy 200

Globalization 201 | Multidomestic
Strategy 202 | Transnational Strategy 202
Strategy Execution 203
Manager’s Shoptalk: Tips for Effective Strategy
Execution 204
Endnotes 210
8 Managerial Decision Making 212
How Do You Make Decisions? 213
Types of Decisions and Problems 214
Programmed and Nonprogrammed
Decisions 214 | Facing Certainty and
Uncertainty 215
Decision-Making Models 217

The Ideal, Rational Model 217 | How Managers
Actually Make Decisions 218
New Manager Self-Test: Making Important
Decisions 220
Political Model 221
Decision-Making Steps 222
Recognition of Decision
Requirement 222 | Diagnosis and
Analysis of Causes 222 | Development of
Alternatives 223 | Selection of Desired
Alternative 224 | Implementation of Chosen
Alternative 224 | Evaluation and Feedback 225
Personal Decision Framework 226
Why Do Managers Make Bad Decisions? 227
Innovative Group Decision Making 228
Manager’s Shoptalk: Evidence-Based
Management 229
Start with Brainstorming 229
Engage in Rigorous Debate 230 | Avoid
Groupthink 230 | Know When to Bail 231

Endnotes 237
Continuing Case 240
9 Designing Adaptive Organizations 242
What Are Your Leadership Beliefs? 243
Organizing the Vertical Structure 244
Work Specialization 244 | Chain of
Command 245 | Span of Management 247
Manager’s Shoptalk: How to Delegate 248
Centralization and Decentralization 250
Departmentalization 250
Vertical Functional Approach 252 | Divisional
Approach 252 | Matrix Approach 254 | Team

Part 4
ORGANIZING
CONTENTS
xxvi
Approach 255 | The Virtual Network
Approach 256 | Advantages and Disadvantages of
Each Structure 258
Organizing for Horizontal Coordination 260
The Need for Coordination 260 | Task Forces,
Teams, and Project Management 262
Reengineering 263
Struc ture Follows Strategy 264
New Manager Self-Test: Authority Role Models 266

Endnotes 273
10 Managing Change and Innovation 276
Are You Innovative? 277
Innovation and the Changing Workplace 278
Changing Things: New Products and Technologies 279
Exploration 279 | Cooperation 281
Entrepreneurship 284
New Manager Self-Test: Taking Charge of
Change 286
Changing People and Culture 287
Training and Development 287 | Organization
Development 287
Implementing Change 291
Need for Change 291 | Resistance to
Change 291
Manager’s Shoptalk: Making Change Stick 292
Force-Field Analysis 293 | Implementation

Tactics 294
Endnotes 301
11 Managing Human Resources 306
Getting the Right People on the Bus 307
The Strategic Role of HRM Is to Drive Organizational
Performance 308
The Strategic Approach 308 | Building
Human Capital to Drive Performance 309 |
Globalization 311
The Impac t of Federal Legislation on HRM 311
New Manager Self-Test: What Is Your HR Work
Orientation? 313
The Changing Nature of Careers 314

The Changing Social Contract 314 | Innovations
in HRM 315
Finding the Right People 316
Human Resource Planning 317 | Recruiting 318
Selecting 321
Manager’s Shoptalk: What Makes a Good Interview
Go Bad? 323
Managing Talent 324
Training and Development 324 | Performance
Appraisal 326
Maintaining an Effective Workforce 329
Compensation 329 | Benefi ts 330
Termination 330

Endnotes 336
12 Managing Diversity 340
Do You Know Your Biases? 341
The Changing Workplace 342
Diversity in the United States 343 | Diversity on a
Global Scale 345
Manager’s Shoptalk: A Guide for Expatriate Managers
in America 346
Managing Diversity 346
What Is Diversity? 346 | Dividends of Workplace
Diversity 348
Factors Shaping Personal Bias 350
Prejudice, Discrimination, and
Stereotypes 350 | Ethnocentrism 352
Factors Affecting Women’s Careers 353
Glass Ceiling 353 | Opt-Out Trend 354
New Manager’s Self-Test: Are You Tuned Into Gender
Differences? 355

The Female Advantage 356
Cultural Competence 356
Diversity Initiatives and Programs 358
Changing Structures and Policies 358 | Expanding
Recruitment Efforts 358 | Establishing
Mentor Relationships 358 | Accommodating
Special Needs 360 | Providing Diversity Skills
Training 360 | Increasing Awareness of Sexual
Harassment 361
New Diversity Initiatives 362
Multicultural Teams 362 | Employee Network
Groups 362
Endnotes 370
Continuing Case 374

CONTENTS
xxvii
13 Dynamics of Behavior in
Organizations 376
Are You Self-Confi dent? 377
Organizational Behavior 378
Attitudes 378
Components of Attitudes 379 | High-Performance
Work Attitudes 380 | Confl icts Among
Attitudes 382
Perception 382
Perceptual Selectivity 383 | Perceptual
Distortions 384 | Attributions 384
Personality and Behavior 385
Personality Traits 386 | Emotional
Intelligence 388 | Attitudes and Behaviors
Infl uenced by Personality 388

New Manager Self-Test: What’s Your EQ? 389
Manager’s Shoptalk: Bridging the Personality
Gap 390
Person–Job Fit 393
Learning 394
The Learning Process 394 | Learning Styles 395
Stress and Stress Management 396
Type A and Type B Behavior 397 | Causes of
Work Stress 397 | Innovative Responses to Stress
Management 398
Endnotes 406
14 Leadership 408

What’s Your Personal Style? 409
The Nature of Leadership 410
Contemporary Leadership 410
Level 5 Leadership 411 | Interactive
Leadership 412
New Manager Self-Test: Interpersonal Patterns 413
From Management to Leadership 414
Leadership Traits 415
Behavioral Approaches 415
Ohio State Studies 416 | Michigan Studies 416
The Leadership Grid 417
Contingency Approaches 418
Hersey and Blanchard’s Situational
Theory 418 | Fiedler’s Contingency
Theory 419 | Matching Leader Style to the
Situation 420 | Substitutes for Leadership 421
Charismatic and Transformational Leadership 422
Charismatic and Visionary Leadership 422
Manager’s Shoptalk: Are You a Charismatic

Leader? 423
Transformational Versus Transactional Leadership 424
Followership 424
Power and Infl uence 426
Position Power 426 | Personal
Power 427 | Other Sources of
Power 427 | Interpersonal Infl uence Tactics 428
Leadership as Service 429
Servant Leadership 429 | Moral Leadership 430
Endnotes 437
15 Motivating Employees 440
Are You Engaged or Disengaged? 441
The Concept of Motivation 442

Content Perspectives on Motivation 443
The Hierarchy of Needs 443 | ERG
Theory 445 | A Two-Factor Approach to
Motivation 446 | Acquired Needs 447
Process Perspectives on Motivation 448
Goal-Setting 448 | Equity
Theory 449 | Expectancy Theory 450
New Manager Self-Test: Your Approach
to Motivating Others 452
Reinforcement Perspective on Motivation 452
Job Design for Motivation 454
Job Simplifi cation 454 | Job Rotation 455
Manager’s Shoptalk: The Carrot-and-Stick
Controversy 455
Job Enlargement 456 | Job
Enrichment 456 | Job Characteristics Model 457
Innovative Ideas for Motivating 458
Empowering People to Meet Higher Needs 459
Giving Meaning to Work Through Engagement 460

Endnotes 468
Part 5
LEADING
CONTENTS
xxviii
16 Managing Communication 470
Are You Building a Personal Network? 471
Communication Is the Manager’s Job 472
What Is Communication? 473 | The
Communication Process 474

Communicating Among People 475
Manager’s Shoptalk: Breaking Down Language
Barriers 475
Communication Channels 476 | Communicating
to Persuade and Infl uence Others 478 | Gender
Differences in Communication 479 | Nonverbal
Communication 480 | Listening 480
New Manager Self-Test: What Is Your Social
Disposition? 482
Organizational Communication 483
Formal Communication Channels 483 | Team
Communication Channels 486 | Personal
Communication Channels 487
Innovations in Organizational Communication 489
Dialogue 489 | Crisis
Communication 490 | Feedback and
Learning 491 | Climate of Trust and
Openness 492

Endnotes 499
17 Leading Teams 502
How Do You Like to Work? 503
Why Teams at Work? 504
What Is a Team? 504 | The Dilemma of
Teams 505
How to Make Teams Effective 506
Model of Team Effectiveness 506 | Effective Team
Leadership 507
Types of Teams 507
Formal Teams 507 | Self-Directed Teams 508
Innovative Uses of Teams 509
Virtual Teams 509 | Global Teams 511

Team Characteristics 512
Size 512 | Diversity 512 | Member
Roles 513
Team Processes 513
Stages of Team Development 514 | Team
Cohesiveness 516 | Team Norms 517
Managing Team Confl ict 517
Balancing Confl ict and Cooperation 518 | Causes
of Confl ict 519 | Styles to Handle Confl ict 519
Negotiation 520
New Manager Self-Test: Managing Confl ict 522
Work Team Effectiveness 522
Productive Output 523 | Satisfaction of
Members 523 | Capacity to Adapt and
Learn 523
Manager’s Shoptalk: How to Run a Great
Meeting 524

Endnotes 531
Continuing Case 534
18 Managing Quality and Performance 536
What Is Your Attitude Toward Organizational
Regulation and Control? 537
The Meaning of Control 538
Manager’s Shoptalk: Cyberslackers Beware: The Boss
Is Watching 539
Choosing Standards and Measures 539
The Balanced Scorecard 540
Feedback Control Model 541
Steps of Feedback Control 541 | Application to
Budgeting 544
Financial Control 546
Financial Statements 546 | Financial Analysis:
Interpreting the Numbers 547

The Changing Philosophy of Control 548
Hierarchical versus Decentralized
Approaches 548 | Open-Book
Management 550
New Manager Self-Test: What Is Your Control
Approach? 551
Total Quality Management 552
TQM Techniques 553 | TQM Success
Factors 556
Trends in Quality and Financial Control 557
International Quality Standards 557 | New
Financial Control Systems 557
Part 6
CONTROLLING
CONTENTS

xxix
Endnotes 565
19 Managing the Value Chain, Information
Technology, and E-Business 568
Which Side of Your Brain Do You Use? 569
The Organization As a Value Chain 570
Manufacturing and Service
Operations 571 | Supply Chain
Management 572
Facilities Layout 573
Process Layout 573
New Manager Self-Test: Political Skills 574
Product Layout 574 | Cellular
Layout 576 | Fixed-Position Layout 576

Technology Automation 576
Radio-Frequency Identifi cation
(RFID) 577 | Flexible Manufacturing
Systems 577 | Lean Manufacturing 578
Inventory Management 578
The Importance of Inventory 579 | Just-in-Time
Inventory 579
Information Technology Has Transformed
Management 580
Boundaries Dissolve; Collaboration
Reigns 580 | Knowledge
Management 580 | Management Information
Systems 581 | Enterprise Resource Planning
Systems 582
Manager’s Shoptalk: Putting Performance Dashboards
to Work 583
A New Generation of Information Technology 585
The Internet and E-Business 586
E-Business Strategy: Market

Expansion 588 | E-Business Strategy: Increasing
Effi ciency 589
Endnotes 595
Continuing Case 598
Appendix A: Managing Small Business Start-Ups 601
Glossary 625
Name Index 639
Company Index 653
Subject Index 657
CONTENTS

Management
RICHARD L. DAFT
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e After studying this chapter, you should be able to:
1. Describe the four management functions and the type of
management
activity associated with each.
2. Explain the difference between effi ciency and effectiveness
and their
importance for organizational performance.
3. Describe conceptual, human, and technical skills and their
relevance for
managers.

4. Describe management types and the horizontal and vertical
differences
between them.
5. Defi ne ten roles that managers perform in organizations.
6. Appreciate the manager’s role in small businesses and
nonprofi t
organizations.
7. Understand the personal challenges involved in becoming a
new
manager.
8. Discuss characteristics of the new workplace and the new
management
competencies needed to deal with today’s turbulent
environment.
Are You Ready to Be a Manager?
Why Innovation Matters
The Defi nition of Management
The Four Management Functions

Planning
Organizing
Leading
Controlling
Organizational Performance
Management Skills
Conceptual Skills
Human Skills
Technical Skills
When Skills Fail
Management Types
Vertical Differences
Horizontal Differences
What Is It Like to Be a Manager?
Making the Leap: Becoming a
New Manager
New Manager Self-Test: Manager
Achievement
Manager Activities

Manager Roles
Managing in Small Businesses and
Nonprofi t Organizations
Management and the New Workplace
New Workplace Characteristics
New Management Competencies
PART 1 INTRODUCTION TO MANAGEMENT4
In the past, many managers did exercise tight control over
employees. But the fi eld
of management is undergoing a revolution that asks managers to
do more with less, to
engage whole employees, to see change rather than stability as
natural, and to inspire
vision and cultural values that allow people to create a truly
collaborative and produc-
tive workplace. In today’s work environment, managers rely
less on command and con-
trol and more on coordination and communication. This
approach differs signifi cantly

from a traditional mind-set that emphasizes tight top-down
control, employee separa-
tion and specialization, and management by impersonal
measurement and analysis.
This textbook introduces and explains the process of
management and the chang-
ing ways of thinking about the world that are critical for
managers. By reviewing
the actions of some successful and not-so-successful managers,
you will learn the
fundamentals of management. By the end of this chapter, you
will already recognize
some of the skills 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 fundamental management
skills for planning,
organizing, leading, and controlling a department or entire
organization.
WHY INNOVATION MAT TERS
The theme of this text is innovation. To gain or keep a
competitive edge, managers

have renewed their emphasis on innovation, shifting away from
a relentless focus on
controlling costs toward investing in the future. In a survey of
nearly 1,000 executives
in North America, Europe, South America, and Asia, 86 percent
agreed that “innova-
tion is more important than cost reduction for long-term
success.”3
Why does innovation matter? Innovations in products, services,
management sys-
tems, production processes, corporate values, and other aspects
of the organization
are what keeps companies growing, changing, and thriving.
Without innovation, no
company can survive over the long run. The growing clout and
expertise of compa-
nies in developing countries, particularly China and India, have
many Western man-
agers worried. In a hypercompetitive global environment,
companies must innovate
more—and more quickly—than ever. Throughout this text, we
will spotlight various
companies that refl ect this new innovation imperative. In
addition, Chapter 10 dis-

cusses innovation and change in detail. First, let’s begin our
adventure into the world
of management by learning some basics about what it means to
be a manager.
THE DEFINITION OF MANAGEMENT
Every day, managers solve diffi cult problems, turn
organizations around, and
achieve astonishing performances. To be successful, every
organization needs good
managers.
What characteristic do all good managers have in common?
They get things done
through their organizations. Managers are the executive
function of the organization,
responsible for building and coordinating an entire system
rather than performing
specifi c tasks. That is, rather than doing all the work
themselves, good managers cre-
ate the systems and conditions that enable others to perform
those tasks. As a boy,
Wal-Mart founder Sam Walton made $4,000 a year at his paper
route. How? Walton
had a natural talent for management, and he created a system

whereby he hired
and coordinated others to help deliver papers rather than simply
delivering what he
could on his own.4
By creating the right systems and environment, managers ensure
that the depart-
ment or organization will survive and thrive beyond the tenure
of any specifi c super-
visor or manager. Consider that Jack Welch was CEO of
General Electric through 20
amazingly successful years, but the leadership transition to Jeff
Immelt in 2001 was
as smooth as silk, and GE has stayed at or near the top of lists
such as Fortune mag-
azine’s “Most Admired Companies,” the Financial Times “most
respected” survey,
CHAPTER 1 INNOVATIVE MANAGEMENT FOR
TURBULENT TIMES 5
Introduction
1

and Barron’s most admired companies. People who have
studied GE aren’t surprised. The company has thrived for
more than a century because managers created the right
environment and systems. In the late 1800s, CEO Charles
Coffi n emphasized that GE’s most important product
was not lightbulbs or transformers, but managerial talent.
Managers at GE spend a huge amount of time on human
resources issues—recruiting, training, appraising, men-
toring, and developing leadership talent for the future.5
Recognizing the role and importance of other people is
a key aspect of good management. Early twentieth-century
management scholar Mary Parker Follett defi ned manage-
ment as “the art of getting things done through people.”6
More recently, noted management theorist Peter Drucker
stated that the job of managers is to give direction to their
organizations, provide leadership, and decide how to use
organizational resources to accomplish goals.7 Getting
things done through people and other resources and pro-
viding leadership and direction are what managers do.
These activities apply not only to top executives such as Eric
Schmidt of Google or Indra Nooyi of PepsiCo, but also to
the manager of a restaurant in your home town, the leader
of an airport security team, a supervisor of an accounting
department, or a director of sales and marketing. Thus, our

defi nition of management is as follows:
Management is the attainment of organizational goals in an
effective and effi -
cient manner through planning, organizing, leading, and
controlling organizational
resources.
This defi nition holds two important ideas: (1) the four
functions of planning, orga-
nizing, leading, and controlling, and (2) the attainment of
organizational goals in an
effective and effi cient manner. Let’s fi rst take a look at the
four primary management
functions. Later in the chapter, we’ll discuss organizational
effectiveness and effi ciency,
as well as the multitude of skills managers use to successfully
perform their jobs.
As a new manager, remember that management means getting
things done through
other people. You can’t do it all yourself. As a manager, your
job is to create the
environment and conditions that engage other people in goal
accomplishment.

THE FOUR MANAGEMENT FUNCTIONS
Exhibit 1.1 illustrates the process of how managers use
resources to attain organiza-
tional goals through the functions of planning, organizing,
leading, and controlling.
Although some management theorists identify additional
management functions,
such as staffi ng, communicating, or decision making, those
additional functions
will be discussed as subsets of the four primary functions in
Exhibit 1.1. Chapters
of this book are devoted to the multiple activities and skills
associated with each
function, as well as to the environment, global competitiveness,
and ethics, which
infl uence how managers perform these functions.
Planning
Planning means identifying goals for future organizational
performance and decid-
ing on the tasks and use of resources needed to attain them. In
other words, mana-
gerial planning defi nes where the organization wants to be in
the future and how

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A business may develop from a
founder’s talent, but good management and vision can take it to
the next level. Tattoo artists Ami James (left) and Chris Núñez
(right)
started the business Miami Ink, which is the namesake of the
TLC/
Discovery reality television program in its fourth season in
2008.
The partners pitched the concept for the show with a friend and
turned their business into the most well-known tattoo design
studio
in the United States. Planning for life after reality TV, James

and
Núñez are creating another Miami tattoo studio, Love Hate
Tattoo,
because TLC/Discovery will own the rights to the name Miami
Ink
when the series ends.
mmmmmmanagement The attainmentntntt t
ooooof organizational goals in an
eeeeefffe ective and effi cient manner
tttthhrough planning, organizing,
lllleeeading, and controlling
ooooorganizational resources.
ppppplanning The management
fffufuunction concerned with defi n--
iiinnng goals for future organiza-
tttiioiionalnal pe perforformarmancence an and dd deciecidd-
iiininnng on the tasks and resources
nnnnnneeded to attain them.

to get there. An example of good planning comes from Time
Warner, Inc., where
the marketing chiefs of the various divisions—HBO, Time Inc.,
Turner Broadcasting,
Warner Bros., AOL, New Line Cinema, and Time Warner
Cable—get together every
three weeks to talk about future projects and how the divisions
can work together to
make them more successful. Thanks to careful planning, for
example, almost every
division is involved in promoting major fi lms such as The
Golden Compass, Hairspray,
and The Lord of the Rings trilogy.8
Organizing
Organizing typically follows planning and refl ects how the
organization tries to
accomplish the plan. Organizing involves assigning tasks,
grouping tasks into depart-
ments, delegating authority, and allocating resources across the
organization. In recent
years, companies as diverse as IBM, the Catholic Church,
Motorola, and the Federal Bureau of Investigation have
undergone structural reorganizations to accommodate

their changing plans. At Avon Products, where sales have
stalled and overhead costs have run amok, CEO Andrea
Jung recently trimmed seven layers of management and
reorganized the company into a structure where more
decisions and functions are handled on a global basis to
achieve greater effi ciency of scale.9
Leading
Leading is the use of infl uence to motivate employees
to achieve organizational goals. Leading means creat-
ing a shared culture and values, communicating goals
to employees throughout the organization, and infusing
employees with the desire to perform at a high level.
Leading involves motivating entire departments and
divisions as well as those individuals working immedi-
ately with the manager. In an era of uncertainty, global
competition, and a growing diversity of the workforce,
the ability to shape culture, communicate goals, and
motivate employees is critical to business success.
E X H I B I T 1 .1 The Process of Management
©
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As Chairman and CEO of Google,
Eric Schmidt works with co-founders Sergey Brin and Larry
Page to
strike the right balance between innovation and discipline.
These
managers place a high priority on leading through shared values
and goals to keep Google’s employees motivated and energized.
Yet
from his experience of engineering a turnaround at struggling
Novell,
Schmidt knows the other management functions of planning,
organizing, and controlling are just as important for success. In
discussing his management role at Google, Schmidt says, “I
keep
things focused.”
oooooorganizing The managemennttt tt
fffufuunff ction concerned with assign--
iiinnng tasks, grouping tasks into
ddddddepdd artments, and allocating
rrrrereesr ources t to d departtme tnts.

llllleading TheThe ma managnagemeementnt
ffffuuunction that involves the
uuuuuuse of infl uence to motivate
eeeeemmployees to achieve the
oooorororgrgo anization’s goals.
TURBULENT TIMES 7
Introduction
1
One doesn’t have to be a well-known top manager to be an
exceptional leader.
Many managers working quietly in both large and small
organizations around the
world also provide strong leadership within departments, teams,
nonprofi t organiza-
tions, and small businesses. For example, Cara Kakuda is an
area general manager
in Hawaii for Nextel Partners, the rural-market division of
Nextel Communications.

Kakuda earned the job because of her ability to motivate and
inspire employees. “Peo-
ple give her 150 percent,” said a Nextel executive.10
Controlling
Controlling is the fourth function in the management process.
Controlling means
monitoring employees’ activities, determining whether the
organization is on tar-
get toward its goals, and making corrections as necessary.
Managers must ensure
that the organization is moving toward its goals. Trends toward
empowerment
and trust of employees have led many companies to place less
emphasis on top-
down control and more emphasis on training employees to
monitor and correct
themselves.
Information technology is helping managers provide needed
organizational
control without strict top-down constraints. Companies such as
Cisco Systems and
Oracle use the Internet and other information technology to
coordinate and monitor

virtually every aspect of operations, which enables managers to
keep tabs on perfor-
mance without maintaining daily authoritarian control over
employees.11
ORGANIZATIONAL PERFORMANCE
The other part of our defi nition of management is the
attainment of organizational
goals in an effi cient and effective manner. Management is so
important because
organizations are so important. In an industrialized society
where complex tech-
nologies dominate, organizations bring together knowledge,
people, and raw mate-
rials to perform tasks no individual could do alone. Without
organizations, how
could technology be provided that enables us to share
information around the world
in an instant; electricity be produced from huge dams and
nuclear power plants;
and thousands of videogames, compact discs, and DVDs be
made available for our
entertainment? Organizations pervade our society, and managers
are responsible for
seeing that resources are used wisely to attain organizational

goals.
Our formal defi nition 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 profi t (Wal-Mart),
win pay increases for members (AFL-CIO), meet spiritual needs
(United Methodist
Church), or provide social satisfaction (college sorority).
Deliberately structured means
that tasks are divided and responsibility for their performance is
assigned to orga-
nization members. This defi nition applies to all organizations,
including both profi t
and nonprofi t. Small, offbeat, and nonprofi t organizations are
more numerous than
large, visible corporations—and just as important to society.
Based on our defi nition of management, the manager’s
responsibility is to coor-
dinate resources in an effective and effi cient 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 effec-
tiveness means providing a product or service that customers
value. Organizational
effi ciency refers to the amount of resources used to achieve an
organizational goal. It
is based on how much raw materials, money, and people are
necessary for producing
a given volume of output. Effi ciency can be calculated as the
amount of resources
used to produce a product or service. Effi ciency and
effectiveness can both be high in
the same organization. Managers at retailer Target, for instance,
continually look for
ways to increase effi ciency while also meeting the company’s
quality and customer
satisfaction goals.
ccccccontrolling The managementntt t
fffufuuunction concerned with moni--
tttooort ing employees’ activities, keep---
iiininnng the organization on track
ttttoowt ard its goals, and making
ccccoorrections as needed.

oooorganization A social entity
ttthhat is goal directed and delib-
eeeerrately structured.
eeeeeffectiveness The degree to
wwwwwhiw ch the organization achievesss
aaaa stated goal.
eeeeeffi ciency The use of minimall
rrrrreesources—raw materials, monn---
eeeeyeyy, andd peoplle—to prodduce a
ddddddesd ired volume of output.
Expect more, pay less. An astonishing 97 percent of Americans
recognize Target’s red-and-
white bull’s-eye brand, and almost as many are familiar with the
slogan. “Sometimes we
focus a little bit more on the ‘pay less,’ sometimes on the
‘expect more,’ but the guardrails
are there,” says Gregg Steinhafel, who took over as CEO of the

trendy retailer in May 2008.
Target’s slogan not only offers a promise to customers, it also
refl ects the company’s
emphasis on both effectiveness and effi ciency. Target has an
elite, secret team, called the
“creative cabinet” that is made up of outsiders of various ages,
interests, and nationalities
who provide ideas and insights that keep the company on the
cutting edge of consumer
trends and give their input regarding managers’ strategic
initiatives. Innovation, design, and
quality are key goals, and managers focus on providing a fun
store experience and a unique,
exciting product line. At the same time, they keep a close eye
on costs and operating effi cien-
cies to keep prices low. “I talk a lot about gross margin rate and
the key drivers to improve
our metrics and performance,” Steinhafel says. In its
SuperTarget centers, the retailer is able
to consistently underprice supermarkets on groceries by about
10 percent to 15 percent and
comes very close to Wal-Mart’s rock-bottom prices.
As the economy slows, Target, like other retailers, has found

the need to adjust worker
hours and look for other effi ciencies, which has drawn
unfavorable attention from worker
advocacy groups. Managers have to walk a fi ne line to continue
to meet their goals for both
effi ciency and effectiveness.12
All managers have to pay attention to costs, but severe cost
cutting to improve
effi ciency can sometimes hurt organizational effectiveness. The
ultimate responsibil-
ity of managers is to achieve high performance, which is the
attainment of organiza-
tional goals by using resources in an effi cient and effective
manner.
MANAGEMENT SKILLS
A manager’s job is complex and multidimensional and, as we
shall see throughout
this book, requires a range of skills. Although some
management theorists propose a
long list of skills, the necessary skills for managing a
department or an organization
can be summarized in three categories: conceptual, human, and
technical.13 As illus-

trated in Exhibit 1.2, the application of these skills changes as
managers move up in
the organization. Although the degree of each skill necessary at
different levels of an
organization may vary, all managers must possess skills in each
of these important
areas to perform effectively.
Conceptual Skills
Conceptual skill is the cognitive ability to see the organization
as a whole system
and the relationships among its parts. Conceptual skill involves
the manager’s think-
ing, information processing, and planning abilities. It involves
knowing where one’s
department fi ts into the total organization and how the
organization fi ts into the
industry, the community, and the broader business and social
environment. It means
the ability to think strategically—to take the broad, long-term
view—and to identify,
evaluate, and solve complex problems.14
Target

In
no
va
tiv
e
W
ay
pppppperformance The organiza-
tttiion’s ability to attain its goals
bbbbbyy bb using resources in an ef-
fififififificfi fifi ient and effective manner.
cccconceptual skill The cogni-
tttiiive ability to see the orga-
nnnnnnization as a whole and the
rrrrerereelelr ationshipps among ig ts parp ts.
E X H I B I T 1 . 2 Relationship of Conceptual, Human, and
Technical Skills to Management

TURBULENT TIMES 9
Introduction
1
Conceptual skills are needed by all managers but are especially
important for
managers at the top. Many of the responsibilities of top
managers, such as decision
making, resource allocation, and innovation, require a broad
view. Consider how
recent strategic changes at General Electric refl ect the
conceptual skills of CEO Jeff
Immelt. Immelt is remaking GE by thinking on a broad, long-
term scale about the
types of products and services people around the world are
going to need in the
future. He’s pushing for growth by investing heavily in basic
scientifi c and tech-
nological research, looking toward the needs of developing
countries, and making
structural and cultural changes that focus GE toward creating
innovative products

and services to meet shifting customer needs.15
Human Skills
Human skill is the manager’s ability to work with and through
other people and to
work effectively as a group member. Human skill is
demonstrated in the way a man-
ager relates to other people, including the ability to motivate,
facilitate, coordinate,
lead, communicate, and resolve confl icts. A manager with
human skills allows sub-
ordinates to express themselves without fear of ridicule,
encourages participation,
and shows appreciation for employees’ efforts. Heather Coin,
manager of the Sher-
man Oaks, California, branch of The Cheesecake Factory,
demonstrates exceptional
human skills. She considers motivating and praising her staff a
top priority. “I really
try to seek out moments because it’s so hard to,” she says. “You
could defi nitely
go for days without doing it. You have to consciously make that
decision [to show
appreciation].”16

Human skills are essential for managers who work with
employees directly
on a daily basis. Organizations frequently lose good people
because of front-line
bosses who fail to show respect and concern for employees.17
However, human
skills are becoming increasingly important for managers at all
levels. In the past,
many CEOs could get by without good people skills, but no
longer. Today’s
employees, boards, customers, and communities are demanding
that top execu-
tives demonstrate an ability to inspire respect, loyalty, and even
affection rather
than fear. “People are expecting more from the companies
they’re working for,
more from the companies they’re doing business with, and more
from the com-
panies they’re buying from,” says Raj Sisodia, a professor of
marketing at Bentley
College and co-author of a recent book called Firms of
Endearment.18
Technical Skills
Technical skill is the understanding of and profi ciency in the

performance of specifi c
tasks. Technical skill includes mastery of the methods,
techniques, and equipment
involved in specifi c functions such as engineering,
manufacturing, or fi nance. Tech-
nical skill also includes specialized knowledge, analytical
ability, and the competent
use of tools and techniques to solve problems in that specifi c
discipline. Technical
skills are particularly important at lower organizational levels.
Many managers get
promoted to their fi rst management jobs by having excellent
technical skills. How-
ever, technical skills become less important than human and
conceptual skills as
managers move up the hierarchy. For example, in his seven
years as a manufactur-
ing engineer at Boeing, Bruce Moravec developed superb
technical skills in his area
of operation. But when he was asked to lead the team designing
a new fuselage for
the Boeing 757, Moravec found that he needed to rely heavily
on human skills in
order to gain the respect and confi dence of people who worked
in areas he knew

little about.19
Complete the experiential exercise on page 25 that pertains to
management
skills. Refl ect on the strength of your preferences among the
three skills and the
implications for you as a manager.
TakeaMoment
hhhhhhhuman skill The ability to
wwwwwwwork with and through other
pppppeop ple and to work effectively
aaaass a group member.
tttttechnical skill TheThe un underder-
ssssttas nding of and profi ciency
iiinnnnn thethe pe perforformarmancence of of sp speciecificfi c
ttttataasastt ks.
When Skills Fail

Everyone has fl aws and weaknesses, and these shortcomings
become most appar-
ent under conditions of rapid change and uncertainty.20
Therefore, during turbulent
times, managers really have to stay on their toes and apply all
their skills and com-
petencies in a way that benefi ts the organization and its
stakeholders—employees,
customers, investors, the community, and so forth. In recent
years, numerous highly
publicized examples showed us what happens when managers
fail to effectively and
ethically apply their skills to meet the demands of an uncertain,
rapidly changing
world. Companies such as Enron, Tyco, and WorldCom were fl
ying high in the 1990s
but came crashing down under the weight of fi nancial scandals.
Others, such as Rub-
bermaid and Kmart, are struggling because of years of
management missteps.
Although corporate greed and deceit grab the headlines, many
more companies
falter or fail less spectacularly. Managers fail to listen to
customers, misinterpret sig-

nals from the marketplace, or can’t build a cohesive team and
execute a strategic plan.
Over the past several years, many CEOs, including Bob Nardelli
at Home Depot,
Carly Fiorina at Hewlett-Packard, and Michael Eisner at Disney
have been ousted
due to their failure to implement their strategic plans or keep
stakeholders happy.
Recent examinations of struggling organizations and executives
offer a glimpse
into the mistakes managers often make in a turbulent
environment.21 One of the big-
gest blunders is managers’ failure to comprehend and adapt to
the rapid pace of
change in the world around them. A related problem is top
managers who create
a climate of fear in the organization so that people are afraid to
tell the truth and
strive primarily to avoid the boss’s wrath. Thus, bad news gets
hidden and impor-
tant signals from the marketplace are missed. People stop
thinking creatively, avoid
responsibility, and may even slide into unethical behavior if it
keeps them on the

boss’s good side.22
Other critical management missteps include poor
communication skills and fail-
ure to listen; poor interpersonal skills; treating employees as
instruments to be used;
a failure to clarify direction and performance expectations;
suppressing dissenting
viewpoints; and the inability to build a management team
characterized by mutual
trust and respect.23 Bob Nardelli was forced out at Home Depot
largely because he
was unable to build trust and cohesiveness among his board and
management team,
and his brusque and unfeeling style alienated executives and
rank and fi le workers
alike. Using expletives for emphasis at one meeting soon after
his arrival as CEO,
Nardelli reportedly said, “You guys don’t know how to run a . .
. business.” At the
annual meeting where shareholder advocates were protesting
Nardelli’s extravagant
pay package, the CEO limited shareholder questions to one
minute, sealing his image
as a callous executive unwilling to listen and compromise. He

tried to redeem himself
by going on a “listening tour,” but the damage had been done.24
Contrast Nardelli’s
approach with that of Jim McNerney, who spent his fi rst six
months as CEO of Boeing
talking with employees around the company to understand
Boeing’s strengths and
challenges and emphasizing the need for cooperation and
teamwork.25
MANAGEMENT TYPES
Managers use conceptual, human, and technical skills to
perform the four manage-
ment functions of planning, organizing, leading, and controlling
in all organiza-
tions—large and small, manufacturing and service, profi t and
nonprofi t, traditional
and Internet-based. But not all managers’ jobs are the same.
Managers are responsi-
ble for different departments, work at different levels in the
hierarchy, and meet dif-
ferent requirements for achieving high performance. Twenty-fi
ve-year-old Daniel
Wheeler is a fi rst-line supervisor in his fi rst management job
at Del Monte Foods,

where he is directly involved in promoting products, approving
packaging sleeves,
and organizing people to host sampling events.26 Kevin Kurtz
is a middle manager
at Lucasfi lm, where he works with employees to develop
marketing campaigns
TURBULENT TIMES 11
Introduction
1
for some of the entertainment company’s hottest fi lms.27 And
Domenic Antonellis
is CEO of the New England Confectionary Co. (Necco), the
company that makes
those tiny pastel candy hearts stamped with phrases such as “Be
Mine” and “Kiss
Me.”28 All three are managers and must contribute to planning,
organizing, leading,
and controlling their organizations—but in different amounts
and ways.

Vertical Differences
An important determinant of the manager’s job is hierarchical
level. Exhibit 1.3 illus-
trates the three levels in the hierarchy. A recent study of more
than 1,400 managers
examined how the manager’s job differs across these three
hierarchical levels and
found that the primary focus changes at different levels.29 For
fi rst-level managers,
the main concern is facilitating individual employee
performance. Middle manag-
ers, though, are concerned less with individual performance and
more with linking
groups of people, such as allocating resources, coordinating
teams, or putting top
management plans into action across the organization. For top-
level managers, the
primary focus is monitoring the external environment and
determining the best strat-
egy to be competitive.
Let’s look in more detail at differences across hierarchical
levels. Top managers are
at the top of the hierarchy and are responsible for the entire
organization. They have

such titles as president, chairperson, executive director, chief
executive offi cer (CEO),
and executive vice president. Top managers are responsible for
setting organizational
goals, defi ning strategies for achieving them, monitoring and
interpreting the external
environment, and making decisions that affect the entire
organization. They look to the
long-term future and concern themselves with general
environmental trends and the
organization’s overall success. Top managers are also
responsible for communicating a
shared vision for the organization, shaping corporate culture,
and nurturing an entrepre-
neurial spirit that can help the company innovate and keep pace
with rapid change.30
tttttotop manager A manager whoo o
iiisssss s atat thethe to top op of tf thehe
orgorganianizatzationionaall aal
hhhhhhiehhieh rarrarchychy an and id is rs respesponsonsiblible
fe forrorr
tttthhhhethththehet en entirtire oe orgargag niznizatiationon.
Text not available due to copyright restrictions

Middle managers work at middle levels of the orga-
nization and are responsible for business units and major
departments. Examples of middle managers are depart-
ment head, division head, manager of quality control,
and director of the research lab. Middle managers typi-
cally have two or more management levels beneath them.
They are responsible for implementing the overall strate-
gies and policies defi ned by top managers. Middle man-
agers generally are concerned with the near future rather
than with long-range planning.
The middle manager’s job has changed dramati-
cally over the past two decades. Many organizations
improved effi ciency by laying off middle managers and
slashing middle management levels. Traditional pyrami-
dal organization charts were fl attened to allow informa-
tion to fl ow quickly from top to bottom and decisions to
be made with greater speed. Exhibit 1.3 illustrates the
shrinking middle management.

Yet even as middle management levels have been
reduced, the middle manager’s job has taken on a new vital-
ity. Rather than managing the fl ow of information up and
down the hierarchy, middle managers create horizontal net-
works that can help the organization act quickly. Research
shows that middle managers
play a crucial role in driving innovation and enabling
organizations to respond to rapid
shifts in the environment.31 As Ralph Stayer, CEO of
Johnsonville Sausage said, “Leaders
can design wonderful strategies, but the success of the
organization resides in the execu-
tion of those strategies. The people in the middle are the ones
who make it work.”32
Middle managers’ status has also escalated because of the
growing use
of teams and projects. Strong project managers are in hot
demand. A project
manager is responsible for a temporary work project that
involves the participa-
tion of people from various functions and levels of the
organization, and perhaps
from outside the company as well. Many of today’s middle

managers work with a
variety of projects and teams at the same time, some of which
cross geographical
and cultural as well as functional boundaries.
First-line managers are directly responsible for the production
of goods and
services. They are the fi rst or second level of management and
have such titles as
supervisor, line manager, section chief, and offi ce manager.
They are responsible for
groups of nonmanagement employees. Their primary concern is
the application of
rules and procedures to achieve effi cient production, provide
technical assistance,
and motivate subordinates. The time horizon at this level is
short, with the empha-
sis on accomplishing day-to-day goals. For example, Alistair
Boot manages the
menswear department for a John Lewis department store in
Cheadle, England.33
Boot’s duties include monitoring and supervising shop fl oor
employees to make
sure sales procedures, safety rules, and customer service
policies are followed. This

type of managerial job might also involve motivating and
guiding young, often
inexperienced workers, providing assistance as needed, and
ensuring adherence to
company policies.
Horizontal Differences
The other major difference in management jobs occurs
horizontally across the orga-
nization. Functional managers are responsible for departments
that perform a sin-
gle functional task and have employees with similar training
and skills. Functional
departments include advertising, sales, fi nance, human
resources, manufacturing,
and accounting. Line managers are responsible for the
manufacturing and marketing
departments that make or sell the product or service. Staff
managers are in charge of
departments such as fi nance and human resources that support
line departments.
mmmmmmiddle manager A managerrr
wwwwwwwho works at the middle levelsss
ooooof the organization and is re-

ssssspponsible for major departmentss...
ppppproject manager A managerr
rrrreesponsible for a temporary
wwwwwork project that involves the
pppparparticticipaipatiotion on of of othether pr peopeoplele
fffrffrrofr m various functions and
lllleeevels of the organization.
fififififi rst-line manager A mA mana-
ggggggerg who is at the fi rst or second
mmmmmmanmmanageagemenment lt leveevel al andnd isis
dirdirectectlylyyyy lyly
rrrrreesr ponsible for the production
oooofof goodds dand se irvices.
fffffunctional manager A manaa----
gggggger who is responsible for a
ddddddepartment that performs a
sssssiingle functional task and has
eeeeemmployees with similar trainingggg
aaaaannd skills.
Supported in part by USAID and
published by The Killid Group, a media company headquartered

in
Kabul, Mursal is the fi rst nationally distributed women’s
magazine
in Afghanistan’s history. Aimed at average women, most of
whom
are illiterate due to the lack of educational opportunities, the
publication makes liberal use of photographs to cover a wide
range
of women’s issues. It is the job of middle managers, such as the
Mursal editors shown here talking with board member Palwasha
Hassan, to help realize an organization’s strategic goals, which
are
typically defi ned by top management.
©
S
U
ZA
N
N
E
PL

U
N
KE
TT
/A
SS
O
C
IA
TE
D
P
R
ES
S

TURBULENT TIMES 13
Introduction
1
General managers are responsible for several depart-
ments that perform different functions. A general manager
is responsible for a self-contained division, such as a Macy’s
department store or a General Motors assembly plant, and
for all the functional departments within it. Project manag-
ers also have general management responsibility because
they coordinate people across several departments to
accomplish a specifi c project.
WHAT IS IT LIKE TO BE A
MANAGER?
Unless someone has actually performed managerial work,
it is hard to understand exactly what managers do on an
hour-by-hour, day-to-day basis. The manager’s job is so
diverse that a number of studies have been undertaken in
an attempt to describe exactly what happens. The ques-
tion of what managers actually do to plan, organize, lead,
and control was answered by Henry Mintzberg, who

followed managers around and recorded all their activi-
ties.34 He developed a description of managerial work that
included three general characteristics and ten roles. These
characteristics and roles, discussed in the following sec-
tions, have been supported in subsequent research.35
More recent research has looked at what managers like to do.
The research found
that both male and female managers across fi ve different
countries reported that
they most enjoy activities such as leading others, networking,
and leading inno-
vation. Activities managers like least include controlling
subordinates, handling
paperwork, and managing time pressures.36 Many new
managers in particular
fi nd the intense time pressures of management, the load of
administrative paper-
work, and the challenge of directing others to be quite stressful
as they adjust to
their new roles and responsibilities. Indeed, the initial leap into
management can
be one of the scariest moments in a person’s career.
How will you make the transition to a new manager’s position?

Complete the
New Manager Self-Test on page 14 to see how prepared you are
to step into a
management role.
Making the Leap: Becoming a New Manager
Many people who are promoted into a manager position have
little idea what the job
actually entails and receive little training about how to handle
their new role. It’s no
wonder that, among managers, fi rst-line supervisors tend to
experience the most job
burnout and attrition.37
Organizations often promote the star performers—those who
demonstrate indi-
vidual expertise in their area of responsibility and have an
ability to work well with
others—both to reward the individual and to build new talent
into the managerial
ranks. But making the shift from individual contributor to
manager is often tricky.
Dianne Baker, an expert nurse who was promoted to supervisor
of an out-patient
cardiac rehabilitation center, quickly found herself

overwhelmed by the challenge of
supervising former peers, keeping up with paperwork, and
understanding fi nancial
and operational issues.38 Baker’s experience is duplicated
every day as new man-
agers struggle with the transition to their new jobs. Harvard
professor Linda Hill
TakeaMoment
©
N
EW
SC
O
M
The father-son team of Don (left)
and Donnie (right) Nelson have both held the position of
general
manager for the NBA Mavericks. In 1997, when Don Nelson
took
over as general manager and head coach of the Mavericks, the

bas-
ketball team was in a freefall. Donnie joined his father the next
year
as assistant coach to help build the team. They were rewarded
for
their efforts in 2003 when the team broke through with a
dynamic
defense. Donnie moved into the general manager position in
2005
when his father stepped down and enjoyed overseeing the
Mavericks
play in the NBA fi nals in 2007 and 2008.
ggggggeneral manager A managererrrr
wwwwwwwho is responsible for several
ddddddepartments that perform
dddddifferent functions.
followed a group of 19 managers over the fi rst year of their
managerial careers and
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 pro-
found transformation in the way people think of themselves,
called personal identity,
that includes letting go of deeply held attitudes and habits and
learning new ways
of thinking.39 Exhibit 1.4 outlines the transformation from
individual performer to
manager.
Recall our earlier discussion of the role of manager as the
executive function of the
organization, the person who builds systems rather than doing
specifi c tasks. The indi-
vidual performer is a specialist and a “doer.” His or her mind is
conditioned to think in
terms of performing specifi c tasks and activities as expertly as
possible. The manager,
on the other hand, has to be a generalist and learn to coordinate
a broad range of activi-
ties. Whereas the individual performer strongly identifi es with
his or her specifi c tasks,
the manager has to identify with the broader organization and
industry.

In addition, the individual performer gets things done mostly
through his or her
own efforts, and develops the habit of relying on self rather
than others. The man-
ager, though, gets things done through other people. Indeed, one
of the most common
mistakes new managers make is wanting to do all the work
themselves rather than
Manager Achievement
Rate each item below based on your orientation
toward personal achievement. Read each item and
check either Mostly True or Mostly False as you
feel right now.
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 impor-
tant to be viewed as a
winner.

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 others. A desire to
be a winner may put you in competition with your
people rather than a focus on developing their
skills. As a manager, you will not succeed as a lone
achiever who does not facilitate and coordinate
others. If you checked three or fewer as Mostly
True, your basic orientation is good. If you scored
six or higher, your focus is on being an individual
winner. You will want to shift your perspective to
become an excellent manager.
N
ew
M
an
ag
er

Se
lf-
T
es
t
TURBULENT TIMES 15
Introduction
1
delegating to others and developing others’ abilities.40 Lisa
Drakeman made this mis-
take when she moved from teaching religion to being CEO of a
biotechnology startup.
Lisa Drakeman was teaching religion at Princeton when her
husband asked her to help
out at Medarex, a new biotechnology company he founded to

develop antibody-based
medicines for cancer, infl ammation, and infectious disease.
Drakeman began performing
various tasks part-time, but soon found herself heading up a
spinoff company, Genmab
AS of Denmark.
One of the toughest things Drakeman had to learn was to stop
doing everything herself.
In the beginning, she attended every meeting, interviewed every
job candidate, and read every
draft of clinical trial designs. She soon realized that she
couldn’t master every detail and that
trying to do so would stall the company’s growth. Although it
was hard to step back, Drake-
man eventually made the transition from doing individual tasks
to performing the executive
function. She established clear procedures and began delegating
the details of products and
clinical trials to others. Rather than interviewing job candidates
herself, she set up human
resources systems to enable others to interview, hire, and train
employees. By developing
from individual performer to manager, Drakeman helped
Genmab grow from 25 employees

to around 200 within a few years.41
Another problem for many new managers is that they expect to
have greater free-
dom to do what they think is best for the organization. In
reality, though, manag-
ers fi nd themselves hemmed in by interdependencies. Being a
successful manager
means thinking in terms of building teams and networks,
becoming a motivator
and organizer within a highly interdependent system of people
and work. Although
the distinctions may sound simple in the abstract, they are
anything but. In essence,
becoming a manager means becoming a new person and viewing
oneself in a com-
pletely new way.
Can you make a personal transformation from individual
performer to manager,
accomplishing work by engaging and coordinating other people?
Look back at
your results on the questionnaire at the beginning of this
chapter to see how your
priorities align with the demands placed on a manager.

Lisa Drakeman,
Genmab AS
Innovative W
ay
TakeaMoment
• Specialist, performs
specific tasks
• Gets things done
through own efforts
• An individual actor
• Works relatively
independently
• Generalist, coordinates
diverse tasks
• Gets things done
through others

• A network builder
• Works in highly
interdependent manner
From Individual
Identity
To Manager
Identity
E X H I B I T 1 . 4
Making the Leap from
Individual Performer to
Manager
SOURCE: Based on Exhibit 1.1, “Transformation of Identity,”
in Linda A. Hill, Becoming a Manager :
Mastery of a New Identity, 2nd ed. (Boston, MA: Harvard
Business School Press, 2003): 6.

Many new managers have to make the transformation in a “trial
by fi re,” 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 employees
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 of
today’s organizations are
using great care in selecting people for managerial positions,
including ensuring that
each candidate understands what management involves and
really wants to be a
manager. A career as a manager can be highly rewarding, but it
can also be stressful
and frustrating. The Manager’s Shoptalk further examines some
of the challenges
new managers face. After reading the Shoptalk, can you answer
“Yes” to the question
“Do I really want to be a manager?”
Is management for you? Becoming a manager
is considered by most people to be a positive,

forward-looking career move and, indeed, life as a
manager offers appealing aspects. However, it also
holds many challenges, and not every person will be
happy and fulfi lled in a management position. Here
are some of the issues would-be managers should
consider before deciding they want to pursue a man-
agement career:
1. Th e increased workload. It isn’t unusual for
managers to work 70 to 80 hours per week, and
some work even longer hours. A manager’s job
always starts before a shift and ends hours after
the shift is over. When Ray Sarnacki was pro-
moted to manager at an aerospace company, he
found himself frustrated by the incessant travel,
endless paperwork, and crowded meeting sched-
ule. He eventually left the job and found happi-
ness in a position earning about one-fi fth of his
peak managerial salary.
2. Th e challenge of supervising former peers. This
issue can be one of the toughest for new manag-
ers. They frequently struggle to fi nd the right
approach, with some trying too hard to remain
“one of the gang,” and others asserting their

authority too harshly. In almost all cases, the
transition from a peer-to-peer relationship to a
manager-to-subordinate one is challenging and
stressful.
3. Th e headache of responsibility for other people.
A lot of people get into management because
they like the idea of having power, but the real-
ity is that many managers feel overwhelmed by
the responsibility of hiring, supervising, and dis-
ciplining others. New managers are often aston-
ished at the amount of time it takes to handle
“people problems.” Kelly Cannell, who quit her
job as a manager, puts it this way: “What’s the
big deal [about managing people]? The big deal
is that people are human. . . . To be a good man-
ager, you have to mentor them, listen to their
problems, counsel them, and at the end of the day
you still have your own work on your plate. . . .
Don’t take the responsibility lightly, because no
matter what you think, managing people is not
easy.”
4. Being caught in the middle. Except for those

in the top echelons, managers fi nd themselves
acting as a backstop, caught between upper
management and the workforce. Even when
managers disagree with the decisions of top
executives, they are responsible for implement-
ing them.
For some people, the frustrations of management
aren’t worth it. For others, management is a fulfi ll-
ing and satisfying career choice and the emotional
rewards can be great. One key to being happy as a
manager may be carefully evaluating whether you
can answer yes to the question, “Do I really want to
be a manager?”
SOURCES: Erin White, “Learning to Be the Boss,” The Wall
Street Journal, November 21, 2005; Jared Sandberg, “Down
Over Moving Up: Some New Bosses Find They Hate Their
Jobs,” The Wall Street Journal, July 27, 2005; Heath Row, “Is
Management for Me? That Is the Question,” Fast Company
(February–March 1998): 50–52; Timothy D. Schellhardt, “Want
to Be a Manager? Many People Say No, Calling Job Miser-
able,” The Wall Street Journal, April 4, 1997; and Matt Murray,
“Managing Your Career—The Midcareer Crisis: Am I in This
Business to Become a Manager?” The Wall Street Journal,

July 25, 2000.
Do You Really Want To Be A Manager?
M
an
ag
er
’s
Sh
op
ta
lk
TURBULENT TIMES 17
Introduction
1

Manager Activities
Most new managers are unprepared for the variety of activities
managers routinely
perform. One of the most interesting fi ndings about managerial
activities is how busy
managers are and how hectic the average workday can be.
Adventures in Multitasking Managerial activity is characterized
by variety,
fragmentation, and brevity.42 The widespread and voluminous
nature of a manager’s
involvements leaves little time for quiet refl ection. The average
time spent on any one
activity is less than nine minutes.
Managers shift gears quickly. Signifi cant crises are
interspersed with trivial events
in no predictable sequence. Every manager’s job, while in most
cases not as poten-
tially dangerous, is similar in its diversity and fragmentation to
that of U.S. Marine
Corps offi cers managing the reconstruction efforts in Iraq.
Consider the diverse
events in a typical day for Capt. Sean Miller in Fallujah, Iraq:43

▪ Begins the day meeting with tribal sheiks and local offi cials
to decide which proj-
ects to fi nance.
▪ Drives to a command center to check the status of a job that a
contractor has left
unfi nished.
▪ Walks to a nearby school to discuss awards for students who
recite passages from
the Koran.
▪ Is interrupted by a handful of people who have come with
questions or demands:
one asks about a relative he says had been detained several
years ago; another
pushes a contract for review into Miller’s hands; a third is
seeking work; and so
on.
▪ Finally returns to the discussion of student awards.
▪ Agrees to a tour of the school, where a contractor explains his
request for a $50,000
generator that Miller thinks can be obtained for $8,000.

▪ Checks the recently cleaned grounds at another school and fi
nds that papers and
other trash once again litter the area.
▪ Notices a man running a pipe from his roof and warns him
against running his
sewage to the school.
▪ Calms and directs his marines, who grow skittish as children,
some in their upper
teens, rush from the school building.
▪ Stops by a café to hear young men’s complaints that they are
asked to pay bribes
to get a job on the police force.
▪ Near sunset, takes photos of a still-damaged cemetery door
that contractors have
been paid to repair.
Life on Speed Dial The manager performs a great deal of work
at an unrelenting
pace.44 Managers’ work is fast paced and requires great energy.
The managers observed

by Mintzberg processed 36 pieces of mail each day, attended
eight meetings, and took
a tour through the building or plant. As soon as a manager’s
daily calendar is set,
unexpected disturbances erupt. New meetings are required.
During time away from
the offi ce, executives catch up on work-related reading,
paperwork, phone calls, and
e-mail. Technology, such as e-mail, instant messaging, cell
phones, and laptops, inten-
sifi es the pace. For example, Brett Yormark of the New Jersey
Nets typically responds
to about 60 messages before he even shaves and dresses for the
day.45
The fast pace of a manager’s job is illustrated by Heather Coin,
the Cheese-
cake Factory manager we introduced earlier in the chapter. “I
really try to keep the
plates spinning,” Coin says, comparing her management job to a
circus act. “If I see
a plate slowing down, I go and give it a spin and move on.” She
arrives at work
about 9:30 a.m. and checks the fi nancials for how the
restaurant performed the day

before. Next comes a staff meeting and various personnel
duties. Before and after the
lunch shift, she’s pitching in with whatever needs to be done—
making salads in the
kitchen, expediting the food, bussing the tables, or talking with
guests. After lunch,
from 3:00 to 4:30 p.m., Heather takes care of administrative
duties, paperwork, or
meetings with upper management, media, or community
organizations. At 4:30, she
holds a shift-change meeting to ensure a smooth transition from
the day crew to the
night crew. Throughout the day, Heather also mentors staff
members, which she con-
siders the most rewarding part of her job. After the evening
rush, she usually heads
for home about 10 p.m., the end of another 12.5-hour day.46
Manager Roles
Mintzberg’s observations and subsequent research indicate that

diverse manager
activities can be organized into 10 roles.47 A role is a set of
expectations for a man-
ager’s behavior. Exhibit 1.5 provides examples of 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 manage-
ment cannot be practiced as a set of independent parts; all the
roles interact in the real
world of management. As Mintzberg says, “The manager who
only communicates
or only conceives never gets anything done, while the manager
who only ‘does’ ends
up doing it all alone.”48

Informational Roles Informational roles describe the activities
used to maintain
and develop an information network. General managers spend
about 75 percent
Category Role Activity
Informational Monitor Seek and receive information, scan
periodicals and
reports, maintain personal contacts.
Disseminator Forward information to other organization mem-
bers; send memos and reports, make phone calls.
Spokesperson Transmit information to outsiders through
speeches, reports, memos.
Interpersonal 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 both inside and outside

organization; use e-mail, phone calls, meetings.
Decisional Entrepreneur Initiate improvement projects; identify
new ideas,
delegate idea responsibility to others.
Disturbance handler Take corrective action during disputes or
crises;
resolve confl icts among subordinates; adapt to
environmental crises.
Resource allocator Decide who gets resources; schedule,
budget, set
priorities.
Negotiator Represent department during negotiation of union
contracts, sales, purchases, budgets; represent
departmental interests.
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.

E X H I B I T 1 . 5
Ten Manager Roles
rrrrrorole AA sA s tetet fofof expexp tectect tiatiationsons ffo
forr
oooooononne’’s b hbeh iavior.
TURBULENT TIMES 19
Introduction
1
of their time talking to other people. The monitor role
involves seeking current information from many sources.
The manager acquires information from others and scans
written materials to stay well informed. The disseminator
and spokesperson roles are just the opposite: The manager
transmits current information to others, both inside and
outside the organization, who can use it. One colorful
example of the spokesperson role is Mick Jagger of the
Rolling Stones. The rock band is run like a large, mul-
tinational organization with Jagger as the CEO. Jagger
surrounds himself not only with talented artists, but also

with sophisticated and experienced business executives.
Yet it is Jagger who typically deals with the media and
packages the band’s image for a worldwide audience.49
Interpersonal Roles Interpersonal roles pertain to rela-
tionships with others and are related to the human skills
described earlier. The fi gurehead role involves handling
ceremonial and symbolic activities for the department or
organization. The manager represents the organization in
his or her formal managerial capacity as the head of the
unit. The presentation of employee awards by a division
manager at Taco Bell is an example of the fi gurehead role. The
leader role encompasses
relationships with subordinates, including motivation,
communication, and infl u-
ence. The liaison role pertains to the development of
information sources both inside
and outside the organization. Stephen Baxter, managing director
of Scotland’s Glas-
gow Airport, illustrates the liaison role. Baxter led a rapid
expansion of the airport by
coordinating with executives at other organizations to fi nd
ways to woo new airlines
to use Glasgow. He recently took on an extra role as president
of the Glasgow chamber

of commerce, enabling him to develop more sources of
information and support.50
Decisional Roles Decisional roles pertain to those events about
which the man-
ager must make a choice and take action. These roles often
require conceptual as well
as human skills. The entrepreneur role involves the initiation of
change. Managers
are constantly thinking about the future and how to get there.51
Managers become
aware of problems and search for innovations that will correct
them. Susan Whit-
ing, Chief of Research for Nielsen Media Research, scheduled
dozens of individual
and group meetings with clients to talk about how to adapt the
Nielsen ratings for
an era in which more and more shows are being viewed on
computers, video iPods,
and other digital devices.52 The disturbance handler role
involves resolving confl icts
among subordinates or between the manager’s department and
other departments.
The resource allocator role pertains to decisions about how to
allocate people, time,

equipment, money, and other resources to attain desired
outcomes. The manager
must decide which projects receive budget allocations, which of
several customer
complaints receive priority, and even how to spend his or her
own time. The nego-
tiator role involves formal negotiations and bargaining to attain
outcomes for the
manager’s unit of responsibility. The manager meets and
formally negotiates with
others—a supplier about a late delivery, the controller about the
need for additional
budget resources, or the union about a worker grievance.
The relative emphasis a manager puts on these ten roles depends
on a number of
factors, such as the manager’s position in the hierarchy, natural
skills and abilities,
type of organization, or departmental goals to be achieved. For
example, Exhibit 1.6
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 while the importance of the liaison

role increases as a
manager moves up the organizational hierarchy.
C
O
U
R
TE
SY
O
F
SB
TV
.C
O
M
Small business owners often assume
multiple management roles. Here on the right Susan Solovic,

founder
and CEO of sbtv.com, functions as spokesperson in an interview
with
Tess Rafols of KTVK. She also is an entrepreneur, developing
new
ideas for the online television channel. Solovic fi lls the
monitor role
by keeping an eye on current trends that might be helpful to her
evolv-
ing company as well as to the small businesses her channel
serves.
Other factors, such as changing environmental conditions, may
also determine
which roles are more important for a manager at any given time.
A top manager may
regularly put more emphasis on the roles of spokesperson, fi
gurehead, and negotia-
tor. However, 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 has to put more emphasis on the leader role. A
marketing manager may
focus on interpersonal roles because of the importance of
personal contacts in the
marketing process, whereas a fi nancial 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. Managers stay alert to needs both
within and outside the
organization to determine what roles are most critical at various
times.
MANAGING IN SMALL BUSINESSES AND NONPROFIT
ORGANIZATIONS
Small businesses are growing in importance. Hundreds of small
businesses are
opened every month, but the environment for small business
today is highly compli-
cated. Small companies sometimes have diffi culty developing
the managerial dexter-
ity needed to survive in a turbulent environment. One survey on

trends and future
developments in small business found that nearly half of
respondents saw inade-
quate management skills as a threat to their companies, as
compared to less than 25
percent of larger organizations.53 Appendix A provides detailed
information about
managing in small businesses and entrepreneurial startups.
One interesting fi nding is that managers in small businesses
tend to emphasize
roles different from those of managers in large corporations.
Managers in small com-
panies often see their most important role as that of
spokesperson because they must
promote the small, growing company to the outside world. The
entrepreneur role is
also critical in small businesses because managers have to be
innovative and help
their organizations develop new ideas to remain competitive.
Small-business manag-
ers tend to rate lower on the leader role and on information-
processing roles, com-
pared with their counterparts in large corporations.

E X H I B I T 1 . 6
Hierarchical Levels and
Importance of Leader and
Liaison Roles
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.
TURBULENT TIMES 21
Introduction
1
Nonprofi t organizations also represent a major application of
management
talent. Organizations such as the Salvation Army, Nature
Conservancy, Greater
Chicago Food Depository, Girl Scouts, and Cleveland Orchestra
all require excellent

management. The functions of planning, organizing, leading,
and controlling apply
to nonprofi ts just as they do to business organizations, and
managers in nonprofi t
organizations use similar skills and perform similar activities.
The primary differ-
ence is that managers in businesses direct their activities toward
earning money for
the company, whereas managers in nonprofi ts direct their
efforts toward generating
some kind of social impact. The unique characteristics and
needs of nonprofi t organi-
zations created by this distinction present unique challenges for
managers.54
Financial resources for nonprofi t organizations typically come
from government
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 nonprofi ts, however,
services are typically
provided to nonpaying clients, and a major problem for many
organizations is secur-

ing a steady stream of funds to continue operating. Nonprofi t
managers, committed
to serving clients with limited resources, must focus on keeping
organizational costs
as low as possible.55 Donors generally want their money to go
directly to helping cli-
ents rather than for overhead costs. If nonprofi t managers can’t
demonstrate a highly
effi cient use of resources, they might have a hard time securing
additional donations
or government appropriations. Although the Sarbanes-Oxley Act
(the 2002 corporate
governance reform law) doesn’t apply to nonprofi ts, for
example, many are adopting
its guidelines, striving for greater transparency and
accountability to boost credibility
with constituents and be more competitive when seeking
funding.56
In addition, because nonprofi t organizations do not have a
conventional bottom line,
managers often struggle with the question of what constitutes
results and effective-
ness. It is easy to measure dollars and cents, but the metrics of
success in nonprofi ts

are much more ambiguous. Managers have to measure
intangibles such as “improve
public health,” “make a difference in the lives of the
disenfranchised,” or “increase
appreciation for the arts.” This intangible nature also makes it
more diffi cult to gauge
the performance of employees and managers. An added
complication is that managers
often depend on volunteers and donors who cannot be
supervised and controlled in
the same way a business manager deals with employees.
The roles defi ned by Mintzberg also apply to nonprofi t
managers, but these may
differ somewhat. We might expect managers in nonprofi t
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 top-down).
Managers in all organizations—large corporations, small

businesses, and nonprofi t
organizations—carefully integrate and adjust the management
functions and roles to
meet challenges within their own circumstances and keep their
organizations healthy.
MANAGEMENT AND THE NEW WORKPLACE
Rapid environmental shifts, such as changes in technology,
globalization, and shifting
social values, are causing fundamental transformations that
have a dramatic impact
on the manager’s job. These transformations are refl ected in
the transition to a new
workplace, as illustrated in Exhibit 1.7.
New Workplace Characteristics
The primary characteristic of the new workplace is the
digitization of business,
which has radically altered the nature of work, employees, and
the workplace
itself.57 The old workplace is characterized by routine,
specialized tasks, and

standardized control procedures. Employees typically perform
their jobs in one
specifi c company facility, such as an automobile factory
located in Detroit or an
insurance agency located in Des Moines. Individuals
concentrate on doing their
own specifi c tasks, and managers are cautious about sharing
knowledge and infor-
mation across boundaries. The organization is coordinated and
controlled through
the vertical hierarchy, with decision-making authority residing
with upper-level
managers.
In the new workplace, by contrast, work is free-fl owing and fl
exible. Structures are
fl atter, and lower-level employees make decisions based on
widespread informa-
tion and guided by the organization’s mission and values.58
Empowered employees
are expected to seize opportunities and solve problems as they
emerge. Knowledge
is widely shared, and people throughout the company keep in

touch with a broad
range of colleagues via advanced technology. The valued
worker is one who learns
quickly, shares knowledge, and is comfortable with risk,
change, and ambiguity. Peo-
ple expect to work on a variety of projects and jobs throughout
their careers rather
than staying in one fi eld or with one company.
The new workplace is organized around networks rather than
rigid hierarchies,
and work is often virtual, with managers having to supervise
and coordinate people
who never actually “come to work” in the traditional
sense.59 Flexible hours, telecommuting, and virtual teams
are increasingly popular ways of working that require
new skills from managers. Using virtual teams allows
organizations to tap the best people for a particular job,
no matter where they are located. Teams may include
outside contractors, suppliers, customers, competitors,
and interim managers. Interim managers are manag-
ers who are not affi liated with a specifi c organization
but work on a project-by- project basis or provide exper-
tise to organizations in a specifi c area.60 This approach

enables a company to benefi t from specialist skills with-
out making a long-term commitment, and it provides
fl exibility for managers who like the challenge, variety,
and learning that comes from working in a wide range of
organizations.
Technology also enables companies to shift signifi -
cant chunks of what were once considered core func-
tions to outsiders via outsourcing, joint ventures, and
other complex alliances. U.S. companies have been send-
ing manufacturing work to other countries for years to
cut costs. Now, high-level knowledge work is also being
outsourced to countries such as India, Malaysia, and
South Africa.61
The New Workplace The Old Workplace
Characteristics
Technology Digital Mechanical
Work Flexible, virtual Structured, localized
Workforce Empowered; diverse Loyal employees;
homogeneous

Management Competencies
Leadership Empowering Autocratic
Doing Work By teams By individuals
Relationships Collaboration Confl ict, competition
E X H I B I T 1 . 7
The Transition to a
New Workplace
©
BE
BE
TO
M
AT
TH
EW
S/
A

SS
O
C
IA
TE
D
P
R
ES
S
At New York City’s Colors, a
project of the Restaurant Opportunities Center, collaboration
and teamwork are the keys to success. Many of the restaurant’s
employee-owners, immigrants hailing from about 22 different
nations, worked in the World Trade Center’s North Tower
Windows
on the World restaurant before its destruction on September 11,
2001. They share a strong commitment to a mission of honoring
the 73 Windows employees who died and improving the

restaurant
industry working conditions. General manager Stefan
Mailvaganam
(left), shown with head chef Raymond Mohan (right), says the
goal
of Colors is to be “a restaurant with a conscience.”
iiiiinininterim manager A mA mA manan-an
aaaaagger who is not affi liated with aa
sssssppecifi c organization but works
ooooon a project-by-project basis or
ppppprovides expertise to organiza-
ttttiiioot ns in a specifi c area.
TURBULENT TIMES 23
Introduction
1
New Management Competencies
In the face of these transitions, managers must rethink their
approach to organizing,
directing, and motivating employees. Today’s best managers

give up their command-
and-control mind-set to focus on coaching and providing
guidance, creating organi-
zations that are fast, fl exible, innovative, and relationship-
oriented.
Instead of “management-by-keeping-tabs,” managers employ an
empowering lead-
ership style.62 When people are working at scattered locations,
managers can’t con-
tinually monitor behavior. In addition, they are sometimes
coordinating the work
of people who aren’t under their direct control, such as those in
partner organiza-
tions. They have to set clear expectations, guide people toward
goal accomplishment
through vision, values, and regular communication, and develop
a level of trust in
employees’ commitment to getting the job done.
Read the ethical dilemma on page 25 that pertains to managing
in the new
workplace. Think about what you would do and why to begin
understanding
how you will solve thorny management problems.

Success in the new workplace depends on the strength and
quality of collabora-
tive relationships. New ways of working emphasize
collaboration across functions
and hierarchical levels as well as with other companies. Team-
building skills are
crucial. Instead of managing a department of employees, many
managers act as
team leaders of ever-shifting, temporary projects. When a
manager at IBM needs
to staff a project, he or she gives a list of skills needed to the
human resources
department, which provides a pool of people who are qualifi ed.
The manager
then puts together the best combination of people for the
project, which often
means pulling people from many different locations. IBM
estimates that about
40 percent of its employees participate in virtual teams.63
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
many new manag-
ers have a hard time with today’s fl exible work environment.
Managers of depart-
ments participating in Best Buys’ Results-Only Work
Environment program, which
allows employees to work anywhere, anytime as long as they
complete assignments
and meet goals, for example, fi nd it diffi cult to keep
themselves from checking to see
who’s logged onto the company network.64
Even more changes and challenges are on the horizon for
organizations and
managers. It’s an exciting time to be entering the fi eld of
management. Throughout
this book, you will learn much more about the new workplace,
about the new and
dynamic roles managers are playing in the twenty-fi rst century,
and about how you
can be an effective manager in a complex, ever-changing world.
TakeaMoment
▪ This chapter introduced the topic of management and defi ned

the types of roles
and activities managers perform. Managers are responsible for
attaining organi-
zational goals in an effi cient and effective manner through the
four management
functions of planning, organizing, leading, and controlling.
Managers are the
executive function of the organization. Rather than performing
specifi c tasks,
they are responsible for creating systems and conditions that
enable others to
achieve high performance.
▪ To perform the four functions, managers need three types of
skills—conceptual,
human, and technical. Conceptual skills are more important at
top levels of the
ch1 A MANAGER’S ESSENTIALS: WHAT HAVE WE
LEARNED?

organization; human skills are important at all levels; and
technical skills are
most important for fi rst-line managers.
▪ A manager’s job varies depending on whether one is a top
manager, middle man-
ager, or fi rst-line manager. A manager’s job may also differ
across the organization,
to include project managers and interim managers as well as
functional managers
(including line managers and staff managers) and general
managers.
▪ Becoming a manager requires a shift in thinking. New
managers often struggle
with the challenges of coordinating a broad range of people and
activities, del-
egating to and developing others, and relating to former peers in
a new way.
▪ Managers’ activities are associated with ten roles: the
informational roles of
monitor, disseminator, and spokesperson; the interpersonal roles
of fi gurehead,
leader, and liaison; and the decisional roles of entrepreneur,

disturbance handler,
resource allocator, and negotiator.
▪ Rapid and dramatic change in recent years has caused signifi
cant shifts in the
workplace and the manager’s job. Rather than managing by
command and con-
trol, managers of today and tomorrow use an empowering
leadership style that
focuses on vision, values, and communication. Team-building
skills are crucial.
Instead of just directing tasks, managers focus on building
relationships, which
may include customers, partners, and suppliers.
1. How do you feel about having a manager’s respon-
sibility in today’s world characterized by uncer-
tainty, ambiguity, and sudden changes or threats
from the environment? Describe some skills and
qualities that are important to managers under
these conditions.
2. Assume you are a project manager at a biotech-
nology company, working with managers from
research, production, and marketing on a major

product modifi cation. 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 manag-
ers. What is your evaluation of her behavior? As
project manager, what do you do?
3. Jeff Immelt of GE said that the most valuable thing
he learned in business school was that “there are
24 hours in a day, and you can use all of them.”
Do you agree or disagree? What are some of the
advantages to this approach to being a manager?
What are some of the drawbacks?
4. Why do some organizations seem to have a new
CEO every year or two, whereas others have top
leaders who stay with the company for many years
(e.g., Jack Welch’s 20 years as CEO at General Elec-
tric)? What factors about the manager or about the
company might account for this difference?
5. Is effi ciency or effectiveness more important to orga-

nizational performance? Can managers improve
both simultaneously?
6. You are a bright, hard-working entry-level man-
ager who fully intends to rise up through the
ranks. Your performance evaluation gives you
high marks for your technical skills but low marks
when it comes to people skills. Do you think peo-
ple 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?
7. If managerial work is characterized by variety, frag-
mentation, and brevity, how do managers perform
basic management functions such as planning,
which would seem to require refl ection and analysis?
8. A college professor told her students, “The pur-
pose of a management course is to teach students
about management, not to teach them to be man-
agers.” Do you agree or disagree with this state-
ment? Discuss.
9. Discuss some of the ways organizations and jobs
changed over the past 10 years. What changes do

you anticipate over the next 10 years? How might
these changes affect the manager’s job and the
skills a manager needs to be successful?
10. How might the teaching of a management course
be designed to help people make the transition
from individual performer to manager in order to
prepare them for the challenges they will face as
new managers?
ch1 DISCUSSION QUESTIONS
TURBULENT TIMES 25
Introduction
1
Management 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 5
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, lan-
guages to study, which job to take, 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
4. I prefer technical or quantitative courses rather
than those involving literature, psychology, or
sociology.
1 2 3 4 5

5. When I have a serious disagreement with some-
one, I hang in there and talk it out until it is com-
pletely resolved.
1 2 3 4 5
6. When I have a project or assignment, I really
get into the details rather than the “big picture”
issues.
1 2 3 4 5
7. I would rather sit in front of my computer than
spend a lot of time with people.
1 2 3 4 5
8. I try to include others in activities or discussions.
1 2 3 4 5
9. When I take a course, I relate what I am learn-
ing to other courses I took or concepts I learned
elsewhere.
1 2 3 4 5
10. When somebody makes a mistake, I want to cor-

rect the person and let her or him know the proper
answer or approach.
1 2 3 4 5
11. I think it is better to be effi cient 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 know my long-term vision of career, family, and
other activities and have thought it over carefully.
1 2 3 4 5
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
14. When I am working on a group project and some-
one doesn’t pull a fair share of the load, I am more

likely to complain to my friends rather than con-
front the slacker.
1 2 3 4 5
15. Talking about ideas or concepts can get me really
enthused or excited.
1 2 3 4 5
16. The type of management course for which this
book is used is really a waste of time.
1 2 3 4 5
17. I think it is better to be polite and not to hurt peo-
ple’s feelings.
1 2 3 4 5
18. Data or things interest me more than people.
1 2 3 4 5
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, 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 skills are three abilities 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 the skills should take courses and
read to build up that skill. For further background
on the three skills, please refer to the explanation on
pages 8–9.
NOTE: This exercise was contributed by Dorothy Marcic.
ch1 MANAGEMENT IN PRACTICE: EXPERIENTIAL
EXERCISE
Can Management Afford to Look the Other Way?
Harry Rull had been with Shellington Pharmaceuti-
cals for 30 years. After a tour of duty in the various
plants and seven years overseas, Harry was back at
headquarters, looking forward to his new role as vice
president of U.S. marketing.

Two weeks into his new job, Harry received some
unsettling news about one of the managers under his
supervision. Over casual lunch conversation, the direc-
tor of human resources mentioned that Harry should
expect a phone call about Roger Jacobs, manager of
new product development. Jacobs had a history of
being “pretty horrible” to his subordinates, she said,
and one disgruntled employee asked to speak to some-
one in senior management. After lunch, Harry did
some follow-up work. Jacobs’ performance reviews
had been stellar, but his personnel fi le also contained a
large number of notes documenting charges of Jacobs’
mistreatment of subordinates. The complaints ranged
from “inappropriate and derogatory remarks” to sub-
sequently dropped charges of sexual harassment. What
was more disturbing was that the amount as well as
the severity of complaints had increased with each of
Jacobs’ ten years with Shellington.
When Harry questioned the company president
about the issue, he was told, “Yeah, he’s had some
problems, but you can’t just replace someone with
an eye for new products. You’re a bottom-line guy;
you understand why we let these things slide.” Not
sure how to handle the situation, Harry met briefl y

with Jacobs and reminded him to “keep the team’s
morale up.” Just after the meeting, Sally Barton from
HR called to let him know that the problem she’d
mentioned over lunch had been worked out. How-
ever, she warned, another employee had now come
forward demanding that her complaints be addressed
by senior management.
What Would You Do?
1. Ignore the problem. Jacobs’ contributions to new
product development are too valuable to risk los-
ing him, and the problems over the past ten years
have always worked themselves out anyway. No
sense starting something that could make you look
bad.
2. Launch a full-scale investigation of employee com-
plaints about Jacobs, and make Jacobs aware that
the documented history over the past ten years has
put him on thin ice.
3. Meet with Jacobs and the employee to try to
resolve the current issue, then start working with
Sally Barton and other senior managers to develop

stronger policies regarding sexual harassment and
treatment of employees, including clear-cut proce-
dures for handling complaints.
SOURCE: Based on Doug Wallace, “A Talent for
Mismanagement: What
Would You Do?” Business Ethics 2 (November!December
1992): 3!4.
ch1 MANAGEMENT IN PRACTICE: ETHICAL DILEMMA
Elektra Products, Inc.
Barbara Russell, a manufacturing vice president,
walked into the monthly companywide meeting with
a light step and a hopefulness she hadn’t felt in a long
time. The company’s new, dynamic CEO was going
to announce a new era of employee involvement and
empowerment at Elektra Products, an 80-year-old,
publicly held company that had once been a leading
manufacturer and retailer of electrical products and
supplies. In recent years, the company experienced a
host of problems: market share was declining in the
face of increased foreign and domestic competition;
new product ideas were few and far between; depart-
ments such as manufacturing and sales barely spoke

to one another; morale was at an all-time low, and
many employees were actively seeking other jobs.
Everyone needed a dose of hope.
Martin Griffi n, who had been hired to revive the
failing company, briskly opened the meeting with a
challenge: “As we face increasing competition, we
need new ideas, new energy, new spirit to make this
company great. And the source for this change is
you—each one of you.” He then went on to explain
that under the new empowerment campaign, employ-
ees would be getting more information about how the
company was run and would be able to work with
their fellow employees in new and creative ways.
Martin proclaimed a new era of trust and cooperation
at Elektra Products. Barbara felt the excitement stir-
ring within her; but as she looked around the room,
she saw many of the other employees, including her
friend Simon, rolling their eyes. “Just another pile of
corporate crap,” Simon said later. “One minute they
try downsizing, the next reengineering. Then they
dabble in restructuring. Now Martin wants to push
empowerment. Garbage like empowerment isn’t a
substitute for hard work and a little faith in the people
who have been with this company for years. We made

ch1 CASE FOR CRITICAL ANALYSIS
TURBULENT TIMES 27
Introduction
1
it great once, and we can do it again. Just get out of
our way.” Simon had been a manufacturing engineer
with Elektra Products for more than 20 years. Barbara
knew he was extremely loyal to the company, but
he—and a lot of others like him—were going to be an
obstacle to the empowerment efforts.
Top management assigned selected managers to
several problem-solving teams to come up with ideas
for implementing the empowerment campaign. Bar-
bara loved her assignment as team leader of the man-
ufacturing team, working on ideas to improve how
retail stores got the merchandise they needed when
they needed it. The team thrived, and trust blossomed
among the members. They even spent nights and
weekends working to complete their report. They

were proud of their ideas, which they believed were
innovative but easily achievable: permit a manager
to follow a product from design through sales to cus-
tomers; allow salespeople to refund up to $500 worth
of merchandise on the spot; make information avail-
able to salespeople about future products; and swap
sales and manufacturing personnel for short periods
to let them get to know one another’s jobs.
When the team presented its report to department
heads, Martin Griffi n was enthusiastic. But shortly
into the meeting he had to excuse himself because of a
late-breaking deal with a major hardware store chain.
With Martin absent, the department heads rapidly
formed a wall of resistance. The director of human
resources complained that the ideas for person-
nel changes would destroy the carefully crafted job
categories that had just been completed. The fi nance
department argued that allowing salespeople to make
$500 refunds would create a gold mine for unethi-
cal customers and salespeople. The legal department
warned that providing information to salespeople
about future products would invite industrial spying.
The team members were stunned. As Barbara
mulled over the latest turn of events, she considered

her options: keep her mouth shut; take a chance and
confront Martin about her sincerity in making empow-
erment work; push slowly for reform and work for
gradual support from the other teams; or look for
another job and leave a company she really cares
about. Barbara realized she was looking at no easy
choices and no easy answers.
Questions
1. How might top management have done a better job
changing Elektra Products into a new kind of organi-
zation? What might they do now to get the empower-
ment process back on track?
2. Can you think of ways Barbara could have avoided
the problems her team faced in the meeting with
department heads?
3. If you were Barbara Russell, what would you do
now? Why?
SOURCE: Based on Lawrence R. Rothstein, “The Empowerment
Effort That Came Undone,” Harvard Business Review (January–
February 1995): 20–31.

ch1 ON THE JOB VIDEO CASE
Numi Organic Tea: Innovative
Management for Turbulent Times
When Danielle Oviedo showed up for her fi rst day
as the manager of the Distribution Center at Numi
Organic Tea in Oakland, California, her new direct
reports were not happy about the change. They
loved Oviedo’s predecessor, who was more like a
friend to them. Numi’s director of operations, Brian
Durkee, was looking for someone with specifi c skills
and experience when he hired Danielle; popularity
wasn’t on the list. Durkee hired Danielle because of
her effectiveness and success as a manager in pre-
vious positions. She also had experience leading
much bigger teams in similar departments. Growing
180 percent in one year can wreak havoc at a small
company like Numi; Durkee needed managers who
could respond to the demands of rapid expansion,
minimize the bumps along the way, and grow with
the organization.
Prior to Danielle’s arrival, lead times for customer
orders were far from competitive, and Numi’s inability

to process orders effi ciently had caught up with them.
Most of Numi’s food service customers sell Numi
teas exclusively in their cafes, restaurants, or hotels.
Although loyal customers love Numi’s products, some
were considering taking their business elsewhere
because inventory receipt was unpredictable.
Danielle quickly observed that each employee in
the Distribution Center tended to perform his or her
task in isolation with little attention to anything else.
To solve this problem, she trained all the Distribu-
tion Center employees in every critical task and pro-
cess, explaining how all the pieces fi t together. In the
future, everyone on her staff would perform multiple
tasks depending on what pressing deadlines loomed.
In Good Company
A corporate takeover brings star advertising execu-
tive Dan Foreman (Dennis Quaid) a new boss who
is half his age. Carter Duryea (Topher Grace), Dan’s
new boss, wants to prove his worth as the new mar-
keting chief at Sports America, Waterman Publish-

ing’s fl agship magazine. Carter applies his unique
approaches while dating Dan’s daughter, Alex (Scar-
lett Johansson).
Management Behavior
This sequence starts with Carter Duryea entering
Dan Foreman’s offi ce. It follows Foreman’s interac-
tion with Teddy K. (Malcolm McDowell), Globecom
CEO, after Teddy K.’s speech. Carter Duryea enters
while saying, “Oh, my God, Dan. Oh, my God.” Mark
Steckle (Clark Gregg) soon follows. The sequence
ends with Carter asking, “Any ideas?” Dan Forman
says, “One.” The fi lm cuts to the two of them arriving
at Eugene Kalb’s (Philip Baker Hall) offi ce building.
What to Watch for and Ask Yourself
▪ Which management skills discussed in this chapter
does Mark Steckle possess? Which does he lack?
▪ The sequence shows three people who represent
different hierarchical levels in the company. Which
hierarchical levels do you attribute to Carter Dur-
yea, Dan Foreman, and Mark Steckle?

▪ Critique the behavior shown in the sequence. What
are the positive and negative aspects of the behav-
ior shown?
ch1 BIZ FLIX VIDEO CASE
A great example of today’s new manager, Danielle
helped her team understand their jobs on a conceptual
level so they could see how their work and success
linked directly to Numi’s larger goals and success.
Turning this very different group of workers into
a well-oiled team that felt invested in the future of
the company didn’t happen overnight. Some people
resisted and resented the added responsibility; they
weren’t used to the fl exibility or increased communi-
cation required by this new way of working.
Eventually Danielle’s team started to click. Their
new-found effectiveness, combined with her plan-
ning and organizing skills, as well as some key inno-
vations, made a huge impact on lead times. With
additional tweaks and time to practice the new Distri-
bution Center regime, Danielle’s team cut lead times
for international orders by about 75 percent—from
15 to 5 days. Lead times for domestic orders histori-

cally averaged 3 to 5 days. Since Danielle has gotten
things under control, orders often ship the same day
or within a maximum of 2 to 3 days.
Numi’s customer service manager, Cindy Graf-
fort, is thrilled about Danielle’s achievements and
said none of these changes were possible before Dan-
ielle arrived, even though serious attempts had been
made previously to address ineffi ciencies. According
to Cindy, the dramatic changes were a direct result
of Danielle’s ability to come up with innovative
solutions to the problems plaguing the Distribution
Center. When asked for more insight into Danielle’s
managerial success, Cindy can’t say enough about
Danielle’s impressive human skills. Unlike old-school
managers, who would hide in their warehouse offi ces
and manage employees from afar, Danielle usually
can be found out on the fl oor “working with her
teammates to ensure they understand the process and
being supportive.”
According to Durkee, Danielle is a “calm and
assertive leader [who people] grab on to . . . and fol-
low.” No matter how crazy things get in the ware-
house with huge, time-sensitive orders coming in and
going out, Danielle keeps a “calm, cool head,” which

helps her team stay calm and focused. She inspires
confi dence that everything will get done—and it does.
As for Danielle’s take on her management style,
she thinks her practice of asking team members for
their suggestions yields amazing results. While she
implements many of their ideas, the real coup is that
her team members come to work every day knowing
anything is possible.
Discussion Questions
1. What are some drawbacks of Danielle’s predeces-
sor’s tendency to treat her employees like friends?
2. How likely is Danielle to become a candidate for
top management someday?
3. Can conceptual skills be cultivated easily? Explain.
TURBULENT TIMES 29
Introduction

1
1. This questionnaire is adapted from
research fi ndings reported in Linda
A. Hill, Becoming a Manager: How
New Managers Master the Challenges
of Leadership, 2nd ed. (Boston, MA:
Harvard Business School Press,
2003); and John J. Gabarro, The
Dynamics of Taking Charge (Boston,
MA: Harvard Business School Press,
1987).
Bruce Moeller, as told to Stepha-2.
nie Clifford, “The Way I Work,” Inc.
Magazine (July 2007): 88–91.
Darrell Rigby and Barbara 3.
Bilodeau,“The Bain 2005 Manage-
ment Tool Survey,”Strategy & Lead-
ership 33, no. 4 (2005): 4–12.
Todd G. Buchholz, “The Right Stuff to 4.
be CEO,” The Conference Review Board
(November–December 2007): 13.
Geoffrey Colvin, “What Makes GE 5.
Great?” Fortune (March 6, 2006):
90–96; and Betsy Morris, “The GE

Mystique,” Fortune (March 6, 2006):
98–104.
James A. F. Stoner and R. Edward 6.
Freeman, Management, 4th ed.
(Englewood Cliffs, NJ: Prentice Hall,
1989).
Peter F. Drucker, 7. Management Tasks,
Responsibilities, Practices (New York:
Harper & Row, 1974).
George Anders, “AOL’ s True Believers,” 8.
Fast Company (July 2002): 96–104.
Nanette Byrnes, “Avon: More Than 9.
Cosmetic Changes,” BusinessWeek
(March 12, 2007): 62–63.
Jacy L. Youn, “True Calling,” 10. Hawaii
Business (July 1, 2005): 13.
Eryn Brown, “Nine Ways to Win on 11.
the Web,” Fortune (May 24, 1999):
112–125.
Jennifer Reingold, “Target’s Inner 12.
Circle,” Fortune (March 31, 2008):
74–86.
Robert L. Katz, “Skills of an Effective 13.
Administrator,” Harvard Business
Review 52 (September–October

1974): 90–102.
Troy V. Mumford, Michael A. 14.
Campion, and Frederick P.
Morgeson, “The Leadership Skills
Strataplex: Leadership Skills
Requirements Across Organization-
al Levels,” The Leadership Quarterly
18 (2007): 154–166.
Geoffrey Colvin, “The Bionic Man-15.
ager,” Fortune (September 19, 2005):
88–100.
Spielberg, “The Cheesecake Factory.”16.
Sue Shellenbarger, “From Our 17.
Readers: The Bosses That Drove
Me to Quit My Job,” The Wall Street
Journal (February 7, 2000): B1.
Quoted in Linda Tischler, “The 18.
CEO’s New Clothes,” Fast Company
(September 2005): 27–28.
Eric Matson, “Congratulations, 19.
You’re Promoted. (Now What?),”
Fast Company (June–July 1997):
116–130.
Clinton O. Longenecker, Mitch-20.

ell J. Neubert, and Laurence S.
Fink, “Causes and Consequences
of Managerial Failure in Rapidly
Changing Organizations,” Business
Horizons 50 (2007): 145–155.
Based on Sydney Finkelstein, “7 21.
Habits of Spectacularly Unsuc-
cessful Executives,” Fast Company
(July 2003): 84–89; S. Finkelstein,
Why Smart Executives Fail (New
York: Portfolio, 2003); Charan and
Useem, “Why Companies Fail”; and
John W. Slocum Jr., Cass Ragan,
and Albert Casey, “On Death and
Dying: The Corporate Leadership
Capacity of CEOs,” Organizational
Dynamics 30, no. 3 (Spring 2002):
269–281.
Patricia Wallington, “Toxic!” 22. CIO
(April 15, 2006): 34–36.
Based on Longenecker, et al., 23. Causes
and Consequences of Managerial
Failure in Rapidly Changing Orga-
nizations; Finkelstein, “7 Habits of
Spectacularly Unsuccessful Execu-

tives”; Charan and Useem, “Why
Companies Fail”; and Slocum et al.,
“On Death and Dying.”
Alan Murray, “Behind Nardelli’s 24.
Abrupt Exit; Executive’s Fatal
Flaw: Failing to Understand New
Demands on CEOs,” The Wall Street
Journal, January 4, 2007; Brian Grow,
“Out at Home Depot,” Business-
Week (January 15, 2007): 56–62.
Diane Brady, “‘Being Mean is So 25.
Last Millennium,’” BusinessWeek
(January 15, 2007), sidebar in
Murray, “Behind Nardelli’s
Abrupt Exit.”
Eileen Sheridan, “Rise: Best Day, 26.
Worst Day,” The Guardian
(September 14, 2002): 3.
Heath Row, “Force Play” (Company 27.
of Friends column), Fast Company
(March 2001): 46.
Charles Fishman, “Sweet Company,” 28.
Fast Company (February 2001):
136–145.

A. I. Kraut, P. R. Pedigo, D. D. 29.
McKenna, and M. D. Dunnette,
“The Role of the Manager: What’s
Really Important in Different Man-
agement Jobs,” Academy of Manage-
ment Executive 19, no. 4 (2005):
122–129.
Christopher A. Bartlett and 30.
Sumantra Ghoshal, “Changing the
Role of Top Management: Be-
yond Systems to People,” Harvard
Business Review (May–June 1995):
132–142; and Sumantra Ghoshal
and Christopher A. Bartlett, “Chang-
ing the Role of Top Management:
Beyond Structure to Processes,”
Harvard Business Review (January–
February 1995): 86–96.
Quy Nguyen Huy, “In Praise of Mid-31.
dle Managers,” Harvard Business
Review (September 2003): 72–79;
Rosabeth Moss Kanter, On the
Frontiers of Management (Boston:
Harvard Business School Press,
2003).

Lisa Haneberg, “Reinventing Middle 32.
Management,” Leader to Leader (Fall
2005): 13–18.
Miles Brignall, “Rise; Launch Pad: 33.
The Retailer; Alistair Boot, An As-
sistant Manager at the John Lewis
Store in Cheadle, Talks to Miles
Brignall,” The Guardian (October 4,
2003): 3.
Henry Mintzberg, 34. The Nature of
Managerial Work (New York: Harper
& Row, 1973); and Mintzberg,
“Rounding Out the Manager’s Job,”
Sloan Management Review (Fall
1994): 11–26.
Robert E. Kaplan, “Trade Routes: 35.
The Manager’s Network of Rela-
tionships,” Organizational Dynamics
(Spring 1984): 37–52; Rosemary
Stewart, “The Nature of Manage-
ment: A Problem for Management
Education,” Journal of Management
ch1 ENDNOTES

Studies 21 (1984): 323–330; John
P. Kotter, “What Effective General
Managers Really Do,” Harvard Busi-
ness Review (November–December
1982): 156–167; and Morgan W.
McCall, Jr., Ann M. Morrison, and
Robert L. Hannan, “Studies of Man-
agerial Work: Results and Methods,”
Technical Report No. 9, Center for
Creative Leadership, Greensboro,
NC, 1978.
Alison M. Konrad, Roger Kashlak, 36.
Izumi Yoshioka, Robert Waryszak,
and Nina Toren, “What Do Manag-
ers Like to Do? A Five-Country
Study,” Group and Organizational
Management 26, no. 4 (December
2001): 401–433.
For a review of the problems faced 37.
by fi rst-time managers, see Linda A.
Hill, “Becoming the Boss,” Harvard

Business Review (January 2007):
49–56; Loren B. Belker and Gary S.
Topchik, The First-Time Manager:
A Practical Guide to the Manage-
ment of People, 5th ed. (New York:
AMACOM, 2005); J. W. Lorsch and
P. F. Mathias, “When Professionals
Have to Manage,” Harvard Busi-
ness Review (July–August 1987):
78–83; R. A. Webber, Becoming a
Courageous Manager: Overcoming
Career Problems of New Managers
(Englewood Cliffs, NJ: Prentice
Hall, 1991); D. E. Dougherty, From
Technical Professional to Corporate
Manager: A Guide to Career Transi-
tion (New York: Wiley, 1984); J.
Falvey, “The Making of a Manager,”
Sales and Marketing Management
(March 1989): 42–83; M. K. Badawy,
Developing Managerial Skills in
Engineers and Scientists: Succeeding
as a Technical Manager (New York:
Van Nostrand Reinhold, 1982); and
M. London, Developing Managers:

A Guide to Motivating and Prepar-
ing People for Successful Managerial
Careers (San Francisco: Jossey-Bass,
1985).
Erin White, “Learning to Be the 38.
Boss; Trial and Error Is the Norm as
New Managers Figure Out How to
Relate to Former Peers,” The Wall
Street Journal, November 21, 2005.
This discussion is based on Linda 39.
A. Hill, Becoming a Manager: How
New Managers Master the Chal-
lenges of Leadership, 2nd ed.
(Boston, MA: Harvard Business
School Press, 2003), pp. 6–8; and
L.A. Hill, “Becoming the Boss,”
Harvard Business Review (January
2007): 49–56.
See also “Boss’s First Steps,” sidebar 40.
in White, “Learning to Be the Boss”;
and Belker and Topchik, The First-
Time Manager.
Jeanne Whalen, “Chance Turns 41.
a Teacher into a CEO; Religion

Lecturer Leaves Academic Path and
Learns to Run a Biotech Start-Up,”
Theory & Practice column, The
Wall Street Journal, October 17,
2005.
Henry Mintzberg, “Managerial 42.
Work: Analysis from Observation,”
Management Science 18 (1971):
B97–B110.
Based on Damien Cave, “A Tall Or-43.
der for a Marine: Feeding the Hand
That Bit You,” The New York Times,
December 30, 2007.
Mintzberg, “Managerial Work.”44.
Matthew Boyle and Jia Lynn Yang, 45.
“All in a Day’s Work,” Fortune
(March 20, 2006): 97–104.
Spielberg, “The Cheesecake Factory.”46.
Lance B. Kurke and Howard E. 47.
Aldrich, “Mintzberg Was Right!: A
Replication and Extension of The
Nature of Managerial Work,” Man-
agement Science 29 (1983): 975–984;
Cynthia M. Pavett and Alan W. Lau,
“Managerial Work: The Infl uence of

Hierarchical Level and Functional
Specialty,” Academy of Management
Journal 26 (1983): 170–177; and
Colin P. Hales, “What Do Manag-
ers Do? A Critical Review of the
Evidence,” Journal of Management
Studies 23 (1986): 88–115.
Mintzberg, “Rounding out the Man-48.
ager’s Job.”
Andy Serwer, “Inside the Rolling 49.
Stones Inc.,” Fortune (September 30,
2002): 58–72.
Valerie Darroch, “High Flyer with 50.
Feet on Home Ground; Gorbals-
Born Stephen Baxter Combines
His Role as Glasgow Airport Boss
with Heading the City’s Chamber
of Commerce,” Sunday Herald,
February 6, 2005.
Harry S. Jonas III, Ronald E. Fry, and 51.
Suresh Srivastva, “The Offi ce of the
CEO: Understanding the Executive
Experience,” Academy of Manage-
ment Executive 4 (August 1990):
36–48.

Carol Hymowitz, “Smart Execu-52.
tives Shed Some Traditional Tasks to
Focus on Key Areas,” The Wall Street
Journal, June 19, 2006.
Edward O. Welles, “There Are No 53.
Simple Businesses Anymore,” The
State of Small Business (1995):
66–79.
This section is based on Peter F. 54.
Drucker, Managing the Non-Profi t
Organization: Principles and Prac-
tices (New York: HarperBusiness,
1992); and Thomas Wolf, Manag-
ing a Nonprofi t Organization (New
York: Fireside/Simon & Schuster,
1990).
Christine W. Letts, William P. Ryan, 55.
and Allen Grossman, High Perfor-
mance Nonprofi t Organizations
(New York: Wiley & Sons, 1999), pp.
30–35.
Carol Hymowitz,“In Sarbanes-56.
Oxley Era, Running a Nonprofi t
Is Only Getting Harder,” The

Wall Street Journal, June 21, 2005;
and Bill Birchard, “Nonprofi ts by
the Numbers,” CFO (June 2005):
50–55.
This section is based on “The 57.
New Organization: A Survey of
the Company,” The Economist
(January 21, 2006); Harry G.
Barkema, Joel A. C. Baum, and
Elizabeth A. Mannix, “Manage-
ment Challenges in a New Time,”
Academy of Management Jour-
nal 45, no. 5 (2002): 916–930;
Michael Harvey and M. Ronald
Buckley, “Assessing the ‘Conven-
tional Wisdoms’ of Management
for the 21st Century Organiza-
tion,” Organizational Dynamics
30, no. 4 (2002): 368–378; and
Toby J. Tetenbaum, “Shifting Para-
digms: From Newton to Chaos,”
Organizational Dynamics (Spring
1998): 21–32.
Caroline Ellis, “The Flattening Cor-58.
poration,” MIT Sloan Management

Review (Summer 2003): 5.
Christopher Rhoads and Sara Silver, 59.
“Working at Home Gets Easier,”
The Wall Street Journal, December
29, 2005; Edwards, “Wherever You
Go, You’re on the Job”; and Kelley
Holland, “When Work Time Isn’t
Face Time,” The New York Times, De-
cember 3, 2006.
Kerr Inkson, Angela Heising, and 60.
Denise M. Rousseau, “The Interim
TURBULENT TIMES 31
Introduction
1
Manager: Prototype of the 21st
Century Worker,” Human Relations
54, no. 3 (2001): 259–284.
Keith H. Hammonds, “Smart, 61.
Determined, Ambitious, Cheap:
The New Face of Global

Competition,” Fast Company
(February 2003): 91–97.
Holland, “When Work Time Isn’t 62.
Face Time.”
Carla Johnson, “Managing Virtual 63.
Teams,” HR Magazine (June 2002):
69–73; “The New Organisation,” The
Economist (January 21, 2006).
Holland, “When Work Time Isn’t 64.
Face Time.”
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After studying this chapter, you should be able to:
1. Understand how historical forces infl uence the practice of
management.
2. Identify and explain major developments in the history of
management

thought.
3. Describe the major components of the classical and
humanistic man-
agement perspectives.
4. Discuss the management science perspective and its current
use in
organizations.
5. Explain the major concepts of systems theory, the
contingency view, and
total quality management.
6. Explain what a learning organization is and why this
approach has
become important in recent years.
7. Describe the management changes brought about by a
technology-
driven workplace, including the role of supply chain
management, cus-
tomer relationship management, and outsourcing.
Are You a New-Style or an Old-Style

Manager?
Management and Organization
Classical Perspective
Scientifi c Management
Bureaucratic Organizations
Administrative Principles
Humanistic Perspective
Human Relations Movement
Human Resources Perspective
Behavioral Sciences Approach
New Manager Self-Test: Evolution of Style
Management Science Perspective
Recent Historical Trends
Systems Theory
Contingency View
Total Quality Management
Innovative Management Thinking For
Turbulent Times
The Learning Organization

Managing the Technology-Driven
Workplace
33
The Evolution of
Management Thinking
C
ontrolling
6
Planning
3
Environm
ent
2

4O
rganizing
5Leading
Introduction
1
ARE YOU A NEW-STYLE OR AN OLD-STYLE MANAGER?1
The following are various behaviors that a manager may
engage in when relating to subordinates. Read each state-
ment carefully and rate each one Mostly True or Mostly False
to refl ect the extent to which you would use that behavior.
Mostly
True
Mostly
False
1. Closely supervise my subordinates
in order to get better work from
them.
2. Set the goals and objectives for

my subordinates and sell them on
the merits of my plans.
3. Set up controls to ensure that my
subordinates are getting the job
done.
4. Make sure that my subordinates’
work is planned out for them.
5. Check with my subordinates daily
to see if they need any help.
6. Step in as soon as reports indi-
cate that the job is slipping.
7. Push my people to meet sched-
ules if necessary.
8. Have frequent meetings to learn
from others what is going on.
SCORING AND INTERPRETATION: Add the total
number of Mostly True answers and mark your score on
the scale below. Theory X tends to be “old-style” manage-

ment and Theory Y “new-style,” because the styles are
based on different assumptions about people. To learn
more about these assumptions, you can refer to Exhibit
2.4 and review the assumptions related to Theory X and
Theory Y. Strong Theory X assumptions are typically con-
sidered inappropriate for today’s workplace. Where do
you fi t on the X–Y scale? Does your score refl ect your per-
ception of yourself as a current or future manager?
X-Y Scale
Theory X 10 5 0 Theory Y
The fi eld of management is undergoing tremendous change.
The questionnaire you
just completed describes two differing philosophies about how
people should be man-
aged, and you will learn more about these ideas in this chapter.
Both approaches still
apply in today’s organizations. However, many managers fi nd
themselves caught in
a situation where the methods and patterns that kept the
organization successful in
the past no longer seem right to keep it thriving today and into
the future.

Management philosophies and organizational forms change over
time to meet
new needs. The workplace of today is different from what it was
50 years ago—
indeed, from what it was even 10 years ago. Yet some ideas and
practices from the
past are still highly relevant and applicable to management.
Many students wonder why history matters to managers. A
historical perspective
provides a broader way of thinking, a way of searching for
patterns and determining
whether they recur across time periods. For example, certain
management practices
that seem modern, such as open-book management or employee
stock ownership, have
actually been around for a long time. These techniques have
repeatedly gained and lost
popularity since the early twentieth century because of
historical forces.2 A study of the
past contributes to understanding both the present and the
future. It is a way of learning
from others’ mistakes so as not to repeat them; learning from
others’ successes so as to

repeat them in the appropriate situation; and most of all,
learning to understand why
things happen to improve our organizations in the future.
This chapter provides an overview of the ideas, theories, and
management philos-
ophies that have contributed to making the workplace what it is
today. We examine
several management approaches that have been popular and
successful throughout
the twentieth century. The fi nal 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 cur-
rent facts and research but in developing a perspective that will
facilitate the broad,
long-term view needed for management success.

MANAGEMENT AND ORGANIZATION
Studying history doesn’t mean merely arranging events in
chronological order; it
means developing an understanding of the impact of societal
forces on organiza-
tions. Studying history is a way to achieve strategic thinking,
see the big picture, and
improve conceptual skills. Let’s start by examining how social,
political, and eco-
nomic forces have infl uenced organizations and the practice of
management.3
Social forces refer to those aspects of a culture that guide and
infl uence relation-
ships among people. What do people value? What do people
need? What are the
standards of behavior among people? These forces shape what is
known as the social
contract, which refers to the unwritten, common rules and
perceptions about relation-
ships among people and between employees and management.
A signifi cant social force today is the changing attitudes, ideas,
and values of Gen-
eration Y employees (sometimes called Nexters).4 These young

workers, the most edu-
cated generation in the history of the United States, grew up
technologically adept and
globally conscious. Unlike many workers of the past, they
typically are not hesitant to
question their superiors and challenge the status quo. They want
a work environment
that is challenging and supportive, with access to cutting-edge
technology, opportu-
nities to learn and further their careers and personal goals, and
the power to make
substantive decisions and changes in the workplace. In addition,
Gen Y workers have
prompted a growing focus on work/life balance, refl ected in
trends such as telecom-
muting, fl extime, shared jobs, and organization-sponsored
sabbaticals.
Political forces refer to the infl uence of political and legal
institutions on people
and organizations. Political forces include basic assumptions
underlying the political
system, such as the desirability of self-government, property
rights, contract rights,
the defi nition of justice, and the determination of innocence or

guilt of a crime. The
spread of capitalism throughout the world has dramatically
altered the business
landscape. The dominance of the free-market system and
growing interdependencies
among the world’s countries require organizations to operate
differently and manag-
ers to think in new ways. At the same time, strong anti-
American sentiments in many
parts of the world create challenges for U.S. companies and
managers.
Economic forces pertain to the availability, production, and
distribution of
resources in a society. Governments, military agencies,
churches, schools, and busi-
ness organizations in every society require resources to achieve
their goals, and eco-
nomic forces infl uence the allocation of scarce resources. One
trend is the growing
economic power of less-developed countries. The rapid growth
of China and India
and their rise in the global marketplace dominated the 2007
World Bank-International
Monetary Fund annual meetings, for example.5 Another force is

the shifting of the
economy of the United States and other developed countries,
with the sources of
wealth, the fundamentals of distribution, and the nature of
economic decision making
undergoing signifi cant changes. Today’s economy is based as
much on ideas, informa-
tion, and knowledge as it is on material resources. Supply
chains and distribution of
resources have been revolutionized by digital technology.
Surplus inventories, which
once could trigger recessions, are declining or completely
disappearing.6
As a new manager, do you appreciate a historical perspective to
help you interpret
current opportunities and problems? Social, economic, and
political forces often
repeat themselves, so your understanding will facilitate a
broader view of how
organizations adapt and succeed in today’s environment.
TakeaMoment
ssssssocial forces The aspects of aaa a

ccccuulc ture that guide and infl uenceee e
rrrreelr ationships among people—
ttthhheir values, needs, and standarddsss
ooooffoff behbehaviavioror.
pppppolitical forces The infl uencee
ooooff oo political and legal institutionsss
ooooonn o people and organizations.
eeeeconomic forces Forces that
aaaaafffect the availability, productionn,,,,
aaaaannda distribution of a society’s re--
ssssosoouous rces among cg omppeting g userss.s..
CHAPTER 2 THE EVOLUTION OF MANAGEMENT
THINKING 35
Introduction
1
Management practices and perspectives vary in response to
these social, political,
and economic forces in the larger society. During diffi cult

times, managers look for
ideas to help them cope with environmental turbulence and keep
their organizations
vital. The Manager’s Shoptalk lists a wide variety of ideas and
techniques used by
today’s managers. Management idea life cycles have been
growing shorter as the
pace of change has increased. A recent study by professors at
the University of Loui-
siana at Lafayette found that, from the 1950s to the 1970s, it
typically took more than a
decade for interest in a popular management idea to peak. By
the 1990s, the interval
had shrunk to fewer than three years.7
Over the history of management, many fashions and
fads have appeared. Critics argue that new techniques
may not represent permanent solutions. Others feel
that managers adopt new techniques for continuous
improvement in a fast-changing world.
In 1993, Bain and Company started a large research
project to interview and survey thousands of corpo-
rate executives about the 25 most popular manage-
ment tools and techniques. The list for 2007 and their

usage rates are below. How many tools do you know?
For more information on specifi c tools, visit the Bain
website: http://www.bain.com/management_tools/
home.asp.
Fashion. Over the last decade, tools such as
activity-based management, one-to-one marketing, sce-
nario planning, and virtual teams have dropped out
of the top 25. Business process reengineering has been
mercurial, with 69% usage in 1995, dropping to 38%
in 2000, increasing again to 69% in 2007.
Global. North American executives are more
likely to look outward, using strategic alliances and
collaborative innovation more than companies in other
parts of the world. European executives are big users
of customer segmentation. Latin American executives
use the fewest number of tools. Asia-Pacifi c execu-
tives report higher use of newer tools like consumer
ethnography and corporate blogs.
SOURCE: Copyright 2007 by Emerald Group Publishing
Limited. Reproduced with permission of Emerald Group
Publishing Limited in the format Textbook via Copyright

Clearance Center.
Contemporary Management Tools
M
an
ag
er
’s
Sh
op
ta
lk
Significantly
below overall
mean
Usage

Significantly
above overall
mean
Mean 62%
RFID
Corporate Blogs
Consumer Ethnography
Offshoring
Six Sigma
Mergers and Acquisitions
Loyalty Management Tools
Collaborative Innovation
Lean Operations
Shared Service Centers
Growth Strategy Tools
Supply Chain Management

Balanced Scorecard
Strategic Alliances
Knowledge Management
Scenario and Contingency Planning
Business Process Reengineering
Outsourcing
Core Competencies
Mission and Vision Statements
Benchmarking
Customer Segmentation
Customer Relationship Management
Strategic Planning
23%
30%
35%
37%

40%
50%
51%
53%
54%
55%
64%
65%
66%
66%
68%
69%
69%
69%
77%
79%
79%
81%
82%
84%
88%

0 20 40 60 80 100
http://www.bain.com/management_tools/home.asp
http://www.bain.com/management_tools/home.asp
E X H I B I T 2 .1 Management Perspectives over Time
Recent challenges such as a tough economy and rocky stock
market, environ-
mental and organizational crises, lingering anxieties over war
and terrorism, and the
public suspicion and skepticism resulting from corporate
scandals have left today’s
executives searching for any management tool—new or old—
that can help them get
the most out of limited resources. This search for guidance is
refl ected in a prolifera-
tion of books, scholarly articles, and conferences dedicated to
examining management
fashions and trends.8 Exhibit 2.1 illustrates the evolution of
signifi cant management
perspectives over time, each of which will be examined in the

remainder of this chap-
ter. The timeline refl ects the dominant time period for each
approach, but elements of
each are still used in today’s organizations.
CLASSICAL PERSPECTIVE
The practice of management can be traced to 3000 b.c., to the fi
rst government
organizations developed by the Sumerians and Egyptians, but
the formal study
of management is relatively recent.9 The
early study of management as we know it
today began with what is now called the
classical perspective.
The classical perspective on manage-
ment 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
them non-English-speaking immigrants),

scheduling complex manufacturing oper-
ations, and dealing with increased labor
dissatisfaction and resulting strikes.
These myriad new problems and the
development of large, complex organiza-
tions demanded a new approach to coordi-
nation and control, and a “new sub-species ©
TH
E
G
R
A
N
G
ER
C
O
LL

EC
TI
O
N
, N
EW
Y
O
R
K
Frederick Winslow Taylor
(1856–1915). Taylor’s theory
that labor productivity could
be improved by scientifi cally
determined management
practices earned him the
status of “father of scientifi c
management.”

ccccclclassical perspective A
mmmmmanagement perspective that
eeeeemmerged during the nineteenthh
aaaannd early twentieth centuries
ttthhat emphasized a rational,
sssscsccis ent fiifi c approachh to thhe studdyy
oooooff o management and sought to
mmmm kmmakm e orga iniz tiations f effifi ciientt
oooopopopepeopeperatratingingg ma machichinesnes..
THINKING 37
Introduction
1
of economic man—the salaried manager”10—was born.
Between 1880 and 1920, the
number of professional managers in the United States grew from
161,000 to more than
1 million.11 These professional managers began developing and
testing solutions to
the mounting challenges of organizing, coordinating, and
controlling large numbers

of people and increasing worker productivity. Thus began the
evolution of modern
management with the classical perspective.
This perspective contains three subfi elds, each with a slightly
different emphasis:
scientifi c management, bureaucratic organizations, and
administrative principles.12
Scientifi c Management
Scientifi c management emphasizes scientifi cally determined
jobs and management
practices as the way improve effi ciency 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.”13 Taylor insisted that improving productivity
meant that management
itself would have to change and, further, that the manner of
change could be deter-
mined only by scientifi c study; hence, the label scientifi c
management emerged. Taylor
suggested that decisions based on rules of

thumb and tradition be replaced with pre-
cise procedures developed after careful
study of individual situations.14
Taylor’s philosophy is encapsulated
in his statement, “In the past the man has
been fi rst. In the future, the system must
be fi rst.”15 The scientifi c management ap-
proach is illustrated by the unloading of
iron from rail cars and reloading fi nished
steel for the Bethlehem Steel plant in 1898.
Taylor calculated that with correct move-
ments, 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 scientifi c management,
Taylor was not alone in this area. Henry Gantt, an associ-
ate 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 independen-
tly of Taylor. He stressed effi ciency and was known for
his quest for the one best way to do work. Although
Gilbreth is known for his early work with brick-
layers, his work had great impact on medical sur-
gery by drastically reducing the time 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 the human aspect of work.
When her husband died at the age of 56, she had 12 children
ages 2 to 19. The
undaunted “fi rst lady of management” went right on with her
work. She presented
©
T
H
E
G
R

A
N
G
ER
C
O
LL
EC
TI
O
N
Automaker Henry Ford made extensive
use of Frederick Taylor’s scientifi c management techniques, as
illustrated
by this assembly of an automobile at a Ford plant circa 1930.
Ford
replaced workers with machines for heavy lifting and moving
autos

from one worker to the next. This reduced worker hours and
improved
effi ciency and productivity. Under this system, a Ford rolled
off the
assembly line every 10 seconds.
sssssscientifi c management A
ssssuubuubfiefi eldld ofof thethe cl classassicaical ml
manaanage--ge
mmmmenmmment pt perserspecpectivtive te thathat em
emphapha-
ssssiisiizss ded isci tentifiifi lcallly y ddetermiinedd
ccccchhanges in management prac-
tttiiiices as the solution to improvinggggg
llllalaaababl or prop ductivityy.
Lillian M. Gilbreth (1878–1972),
Frank B. Gilbreth (1868–1924).
This husband-and-wife team
contributed to the principles
of scientifi c management. His
development of time and
motion studies and her work in
industrial psychology pioneered
many of today’s management

O
D
/C
O
R
BI
S
a paper in place of her late husband, continued their seminars
and consulting, lec-
tured, and eventually became a professor at Purdue
University.16 She pioneered in the
fi eld of industrial psychology and made substantial
contributions to human resource
management.
Exhibit 2.2 shows the basic ideas of scientifi c 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 scientifi c management that began with Taylor
dramatically increased
productivity across all industries, and they are still important
today. A recent Harvard
Business Review article discussing innovations that shaped
modern management puts
scientifi c management at the top of its list of 12 infl uential
innovations. Indeed, the
ideas of creating a system for maximum effi ciency and
organizing work for maxi-
mum productivity are deeply embedded in our organizations.17
However, because scientifi c management ignored the social
context and workers’
needs, it led to increased confl ict and sometimes violent
clashes between managers
and employees. Under this system, workers often felt
exploited—a sharp contrast

from the harmony and cooperation that Taylor and his followers
had envisioned.
Bureaucratic Organizations
A systematic approach developed in Europe that looked at the
organization as a
whole is the bureaucratic organizations approach, a subfi eld
within the classical per-
spective. Max Weber (1864–1920), a German theorist,
introduced most of the concepts
on bureaucratic organizations.18
During the late 1800s, many European organizations were
managed on a per-
sonal, family-like basis. Employees were loyal to a single
individual rather than
to the organization or its mission. The dysfunctional
consequence of this manage-
ment 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 2.3
summarizes the six character-
istics of bureaucracy as specifi ed by Weber.
Weber believed that an organization based on rational authority
would be more
effi cient 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
E X H I B I T 2 . 2
Characteristics of Scientifi c
Management
General Approach
• 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.

Contributions
• Demonstrated the importance of compensation for
performance.
• Initiated the careful study of tasks and jobs.
• Demonstrated the importance of personnel selection and
training.
Criticisms
• 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.
bbbbbbbbureaucratic organizations
AAAAAAA sA ubfi eld of the classical manage--
mmmmmment perspective that emphasizedd
mmmmmanmmanageagemenment ot on an an in
impempersorsonalnal, r, raa--aa
ttttiioott nal basis through such elementtss
aaaaass a lcle larl dy d fiefi dned au htho irity a dnd
rrrrereesr pon ibsibiliilitty, f formall reco drd-
kkkkkee iping, dand separ iation fof
mmmmmmanagement and ownership.

THINKING 39
Introduction
1
not on whom you know, but rather on competence and technical
qualifi cations,
which are assessed by examination or according to 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. A clear
division of labor arises from distinct defi nitions of authority
and responsibility,
legitimized as offi cial duties. Positions are organized in a
hierarchy, with each
position under the authority of a higher one. The manager
depends not on his or
her personality for successfully giving orders but on the legal
power invested in

the managerial position.
Read the ethical dilemma on pages 53–54 that pertains to
problems of bureaucracy.
What would it be like for you to be a manager in a bureaucratic
organization? Would
you thrive in that environment?
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, rules and
other bureaucratic procedures provide a standard way of dealing
with employees.
Everyone gets equal treatment, and everyone knows what the
rules are. This foun-
dation enables many organizations to become extremely effi
cient. Consider United
Parcel Service (UPS), sometimes called Big Brown.
TakeaMoment
E X H I B I T 2 . 3 Characteristics of Weberian Bureaucracy

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.
UPS specializes in the delivery of small packages, delivering
more than 13 million every busi-
ness day. In addition, UPS is gaining market share in air
service, logistics, and global infor-
mation services. Why has UPS been so successful? One
important factor is the concept of
bureaucracy. UPS is bound up in rules and regulations. It
teaches drivers an astounding 340
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.
Specifi c safety rules apply to driv-
ers, loaders, clerks, and managers. Strict dress codes are
enforced—clean uniforms (called
browns), every day, black or brown polished shoes with nonslip

soles, no beards, no hair
below the collar, and so on. Supervisors conduct three-minute
inspections of drivers each
day. The company also has rules specifying cleanliness
standards for buildings, trucks, and
other properties. No eating or drinking is permitted at employee
desks. Every manager is
given bound copies of policy books and is expected to use them.
UPS has a well-defi ned division of labor. Each plant consists
of specialized drivers, load-
ers, clerks, washers, sorters, and maintenance personnel. UPS
thrives on written records, and
it has been a leader in using new technology to enhance
reliability and effi ciency. Drivers use
a computerized clipboard to track everything from miles per
gallon to data on parcel delivery.
All drivers have daily worksheets that specify performance
goals and work output.
Technical qualifi cation is the criterion for hiring and
promotion. The UPS policy book
says the leader is expected to have the knowledge and capacity
to justify the position of lead-
ership. Favoritism is forbidden. The bureaucratic model works

just fi ne at UPS, “the tightest
ship in the shipping business.”19
Administrative Principles
Another major subfi eld within the classical perspective is
known as the adminis-
trative principles approach. Whereas scientifi c management
focused on the produc-
tivity of the individual worker, the administrative principles
approach focused on
the total organization. The contributors to this approach
included Henri Fayol, Mary
Parker Follett, and Chester I. Barnard.
Henri Fayol (1841–1925) was a French mining engineer who
worked his way up
to become head of a major mining group known as Comambault.
Comambault sur-
vives today as part of Le Creusot-Loire, the largest mining and
metallurgical group
in central France. In his later years, Fayol wrote down his
concepts on administration,
based largely on his own management experiences.20
In his most signifi cant work, General and Industrial

Management, Fayol discussed
14 general principles of management, several of which are part
of management phi-
losophy 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 special-
ization 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 orga-
nization and should include every employee.
Fayol felt that these principles could be applied in any
organizational setting. He
also identifi ed fi ve basic functions or elements of

management: planning, organizing,
commanding, coordinating, and controlling. These functions
underlie much of the gen-
eral approach to today’s management theory.
Mary Parker Follett (1868–1933) was trained in philosophy and
political science at
what today is Radcliffe College. She applied herself in many fi
elds, including social
psychology and management. She wrote of the importance of
common superordinate
goals for reducing confl ict in organizations.21 Her work was
popular with business-
people of her day but was often overlooked by management
scholars.22 Follett’s ideas
United Parcel
Service (UPS)
In
no
va
tiv

e
W
ay
aaaaaadministrative principles AAAA AAA
sssssuubs fi eld of the classical managee---
mmmmmment perspective that focuses
oooonon thethe to totaltal or organganizaizatiotion rn
rathatherer
tttthhatt n the individual worker,
ddddd lddeld iine iating hthe management
fffufuffuunfu tictions f of l planniing, orga iniz-
iiinnnng, comm dandiing, coordidin iating,g,
aaaaannd controlling.
THINKING 41
Introduction
1
served as a contrast to scientifi c management and are
reemerging 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 ana-
lyzed the dynamics of management-organization interactions.
Follett addressed issues
that are timely today, such as ethics, power, and how to lead in
a way that encourages
employees to give their best. The concepts of empowerment,
facilitating rather than con-
trolling employees, and allowing employees to act depending on
the authority of the
situation opened new areas for theoretical
study by Chester Barnard and others.23
Chester I. Barnard (1886–1961) stud-
ied economics at Harvard but failed
to receive a degree because he lacked a
course in laboratory science. He went
to work in the statistical department of
AT&T and in 1927 became president of
New Jersey Bell. One of Barnard’s signifi -
cant contributions was the concept of the

informal organization. The informal orga-
nization occurs in all formal organizations
and includes cliques and naturally occur-
ring social groupings. Barnard argued
that organizations are not machines and
stressed that informal relationships are
powerful forces that can help the organi-
zation if properly managed. Another sig-
nifi cant contribution was the acceptance
theory of authority, which states that peo-
ple have free will and can choose whether
to follow management orders. People
typically follow orders because they per-
ceive positive benefi t to themselves, but
they do have a choice. Managers should
treat employees properly because their
acceptance of authority may be criti-
cal to organization success in important
situations.24
The overall classical perspective as
an approach to management was very
powerful and gave companies funda-
mental new skills for establishing high
productivity and effective treatment of

employees. Indeed, the United States
surged ahead of the world in manage-
ment techniques, and other countries,
especially Japan, borrowed heavily from
American ideas.
HUMANISTIC PERSPECTIVE
Mary Parker Follett and Chester Barnard were early advocates
of a more humanis-
tic perspective on management that emphasized the importance
of understanding
human behaviors, needs, and attitudes in the workplace as well
as social interactions
and group processes.25 We will discuss three subfi elds based
on the humanistic per-
spective: the human relations movement, the human resources
perspective, and the
behavioral sciences approach.
hhhhhhhumanistic perspective
AAAAAAA management perspective
tttthhat emerged near the late
nnnnnninn eteenth century and
eeeemmpe hasized understanding
hhhhhuman behavior, needs, and

aaaatttitudes in the workplace.
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
signifi cance of the informal or-
ganization described by Barnard.
Social values and behaviors were
powerful forces that could help
or hurt the planting organization
depending on how they were
managed.
FR
O
M
N
AT
IO
N

A
L
A
RC
H
IV
ES
Mary Parker Follett (1868–1933).
Follett was a major contributor
to the administrative principles
approach to management. Her
emphasis on worker participa-
tion and shared goals among
managers was embraced by
many businesspeople of the day
and has been recently “rediscov-
ered” by corporate America.
C
O

U
R
TE
SY
, M
A
RY
P
A
R
KE
R
F
O
LL
ET
TE

F
O
U
N
D
AT
IO
N
A
N
D
R
EA
D
IN
G
U

N
IV
ER
SI
TY
, U
K
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 con-
trol.26 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 scien-
tifi c 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 fi xtures for control of the residential and
industrial market.27 By 1909,
electric lighting had begun to win, but the increasingly effi
cient electric fi xtures used
less total power. 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 Edi-
son 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, fi ve different tests were conducted. These pointed to the
importance of factors
other than illumination in affecting productivity. To more
carefully examine these fac-
tors, numerous other experiments were conducted.28 The results
of the most famous
study, the fi rst Relay Assembly Test Room (RATR)
experiment, were extremely con-
troversial. Under the guidance of two Harvard professors, Elton
Mayo and Fritz
Roethlisberger, the RATR studies lasted nearly six years (May
10, 1927 to 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 thing:
Money was not the cause
of the increased output.29 It was believed that the factor that

best explained increased
output was human relations. Employees performed bet-
ter when managers treated them in a positive manner.
Recent re-analyses of the experiments have revealed
that a number of factors were different for the workers
involved, and some suggest that money may well have
been the single most important factor.30 An interview
with one of the original participants revealed that just
getting into the experimental group had meant a huge
increase in income.31
These new data clearly show that money mattered a
great deal at Hawthorne. In addition, worker productiv-
ity increased partly as a result of the increased feelings
of importance and group pride employees felt by virtue
of being selected for this important project.32 One unin-
tended contribution of the experiments was a rethinking
of fi eld research practices. Researchers and scholars real-
ized that the researcher can infl uence 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.33

From a historical perspective, whether the studies
were academically sound is of less importance than the
fact that they stimulated an increased interest in look-
ing at employees as more than extensions of production
FR
O
M
W
ES
TE
R
N
E
LE
C
TR
IC

P
H
O
TO
G
R
A
PH
IC
S
ER
VI
C
ES
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.
hhhhhhhuman relations movementtt
AAAAAA mA ovement in management
ttthhhittt nking and practice that em-
pppphapppphap sizsizeses satsatisfisfactactionion of of em
emploploy--y
eeeeeees’b’ b iasic n deeds a ts thhe kkey t to
iiinnnncreased worker productivity.
HHHHHawthorne studies A series
ooooof experiments on worker pro-
dddddductivity begun in 1924 at the
HHHHHHawthorne plant of Western
EEEEEElectric Company in Illinois;

aaaaatttributed employees’ increased
ooooouutput to managers’ better treat--
mmmmmmmemenm t of them during tg he study.dy.yy
THINKING 43
Introduction
1
machinery. The interpretation that employees’ output increased
when managers
treated them in a positive manner started a revolution in worker
treatment for improv-
ing organizational productivity. Despite fl awed methodology or
inaccurate conclu-
sions, the fi ndings 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 approach for
increasing productivity
persists today.

Before reading on, take the New Manager Self-Test on page 44.
This test will give
you feedback about how your personal manager frame of
reference relates to the
human resources and other perspectives described in this
chapter.
Human Resources Perspective
The human relations movement initially espoused a dairy farm
view of management—
contented cows give more milk, so satisfi ed workers will give
more work. Gradually,
views with deeper content began to emerge. The human
resources perspective main-
tained an interest in worker participation and considerate
leadership but shifted the
emphasis to consider the daily tasks that people perform. The
human resources per-
spective combines prescriptions for design of job tasks with
theories of motivation.34
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, fi nally, self-actualization needs. Chapter 15 discusses his
ideas in more detail.
Douglas McGregor (1906–1964) had become frustrated with the
early simplis-
tic human relations notions while president of Antioch College
in Ohio. He chal-
lenged 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 Maslow,
McGregor formulated his
Theory X and Theory Y, which are explained in Exhibit 2.4.35

McGregor believed
TakeaMoment
E X H I B I T 2 . 4
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 he or she is committed.
• The average human being learns, under proper conditions, not
only to accept but 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.
hhhhhhhuman resources

ppppperspective A management
pppperspective that suggests jobs
sssshhoshhoulduld be be de desigsignedned to to me meetet
hhhhhhigh her-level needs by allowing
wwwwwwworw kers to use their full
pppppototpopppp ential.
Evolution of Style
This questionnaire asks you to describe yourself.
For each item, give the number “4” to the phrase
that best describes you, “3” to the item that is
next best, and 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 confl ict and
opposition
_____ d. Charisma
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

INTERPRETATION: New 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 effi cient and that provides a man-
ager with formal authority to achieve goals. This
manager frame became strong during the era of
scientifi c management and bureaucratic admin-
istration. (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 empha-
sis on negotiation and hallway coalition build-
ing. This frame refl ects the need within systems
theory to have all parts working together. (4) The
symbolic frame of reference sees the organization as
theater—a place to achieve dreams—with manager
emphasis on symbols, vision, culture, and inspira-
tion. This manager frame is important for learning
organizations.

Which frame refl ects your way of viewing the
world? The fi rst two frames of reference—structural and
human resource—are more important for new managers.
These two frames usually are mastered fi rst. As
new managers gain experience and move up the
organization, they should acquire political skills
and also learn to use symbols for communica-
tion. It is important for new managers not to be
stuck for years in one way of viewing the organiza-
tion because their progress may be limited. Many
new managers evolve through and master each of
the four frames as they become more skilled and
experienced
SCORING: Higher score represents your way of
viewing the organization and will infl uence your
management style. Compute your scores as
follows:
ST " 1a # 2a # 3a # 4a # 5a # 6a " _______
HR " 1b # 2b # 3b # 4b # 5b # 6b " ______
PL " 1c # 2c # 3c # 4c # 5c # 6c " ________

THINKING 45
Introduction
1
that the classical perspective was based on Theory X
assumptions about workers.
He also felt that a slightly modifi ed version of Theory X fi t
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.
Look back at your scores on the questionnaire at the beginning
of this chapter
related to Theory X and Theory Y. How will your management
assumptions about
people fi t into an organization today?
The point of Theory Y is that organizations can take advantage
of the imagination
and intellect of all their employees. Employees will exercise
self-control and will con-

tribute to organizational goals when given the opportunity. A
few companies today
still use Theory X management, but many are using Theory Y
techniques. Consider
how hearing-aid maker Oticon applies Theory Y assumptions to
tap into employee
creativity and mind power.
Oticon, a Danish company that made the world’s fi rst digital
hearing aid, was once a typical
hierarchical organization with a rather stodgy culture. That all
changed in the early 1990s,
when chief executive Lars Kolind turned everything on its head
by throwing out the old struc-
tures and controls.
Kolind believed workers would be more creative, more
productive, and more satisfi ed if
they had fewer controls and limitations. Suddenly, employees
were free to work on any proj-
ect and join any team they chose. There was no hierarchy, no
organization charts, no titles,
and few rules. Permanent desks were done away with in favor of
fi ling cabinets on wheels that
people pushed from project to project. Kolind called it “the

spaghetti organization” because
the company held together without a fi xed structure. Ideas
began bubbling up and turning
into hot new products, such as a hearing aid that required less
adjustment. Productivity
increased, and sales and profi ts soared.
Some of the old structures were reinstated as the company grew
larger and after Kolind
left the company. For example, everyone now reports to a direct
supervisor, and people no
longer have complete freedom to choose projects. New top
leaders believe some structure is
helpful as long as workers aren’t constrained and burdened by
tight controls. The Theory Y
spirit survives at Oticon, helping to keep the company an
innovation leader.36
Behavioral Sciences Approach
The behavioral sciences approach uses scientifi c methods and
draws from soci-
ology, 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
IBM conducts
research to determine the best set of tests, interviews, and
employee profi les to use
when selecting new employees, it is using behavioral science
techniques. When
Best Buy electronics stores train new managers in the
techniques of employee
motivation, most of the theories and fi ndings are rooted in
behavioral science
research.
One specifi c set of management techniques based in the
behavioral sciences
approach is organization development (OD). In the 1970s,
organization development
evolved as a separate fi eld that applied the behavioral sciences
to improve the orga-
nization’s health and effectiveness through its ability to cope
with change, improve
internal relationships, and increase problem-solving
capabilities.37 The techniques
and concepts of organization development have since been
broadened and expanded
to address the increasing complexity of organizations and the

environment, and OD
TakeaMoment
Oticon
Innovative W
ay
bbbbbbbehavioral sciences approach h
AAAAAAA subfi eld of the humanistic
mmmmmmanagement perspective that
aaaaapppa lies social science in an
oooorgo anizational context, drawinggg g
ffffrrom economics, psychology,
ssssoociology, and other discipliness.
is still a vital approach for managers. OD will be discussed in
detail in Chapter 10.
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 infl uenced the
majority of tools, techniques, and approaches that managers
have applied to organi-
zations since the 1970s.
All the remaining chapters of this book contain research fi
ndings and manage-
ment applications that can be attributed to the behavioral
sciences approach.
MANAGEMENT SCIENCE PERSPECTIVE
World War II caused many management changes. The massive
and complicated problems
associated with modern global warfare presented managerial
decision makers with the
need for more sophisticated tools than ever before. The
management science perspective
emerged to address those problems. This view is distinguished
for its application
of mathematics, statistics, and other quantitative techniques to
management deci-
sion making and problem solving. During World War II, groups

of mathematicians,
physicists, and other scientists were formed to solve military
problems. Because
those problems frequently involved moving massive amounts of
materials and large
numbers of people quickly and effi ciently, the techniques had
obvious applications
to large-scale business fi rms.38
Management scholar Peter Drucker’s 1946 book Concept of the
Corporation sparked
a dramatic increase in the academic study of business and
management. Picking up
on techniques developed for the military, scholars began
cranking out numerous
mathematical tools for corporate managers, such as the
application of linear pro-
gramming for optimizing operations, statistical process control
for quality manage-
ment, and the capital asset pricing model.39
These efforts were enhanced with the development and
perfection of the com-
puter. IBM introduced the fi rst automatic, general purpose
computer in 1944. It was

essentially a calculator with 760,000 parts and 500 miles of
wire that took 11 seconds
to perform simple division.40 Further developments over the
1950s and 1960s made
this new tool increasingly useful as a data processor, reporting
system, and data
repository for managers.41 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.42 Let’s look at three
subsets of the manage-
ment science perspective.
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).43 It consists of mathematical model building and other
applications of quan-
titative techniques to managerial problems.
Operations management refers to the fi eld of management that
specializes in the
physical production of goods or services. Operations

management specialists use
quantitative techniques to solve manufacturing problems. Some
commonly used
methods are forecasting, inventory modeling, linear and
nonlinear programming,
queuing theory, scheduling, simulation, and break-even
analysis.
Information technology (IT) is the most recent subfi eld of the
management science
perspective, which is often refl ected in management
information systems. These
systems are designed to provide relevant information to
managers in a timely and
cost-effi cient manner. More recently, information technology
within organizations
evolved to include intranets and extranets, as well as various
software programs that
help managers estimate costs, plan and track production,
manage projects, allocate
resources, or schedule employees. Most of today’s organizations
have departments
of information technology specialists who use management
science techniques to
solve complex organizational problems.

mmmmmmanagement science
ppppperspective A management
ppppperspective that emerged
aaaaffter World War II and applpp ied
mmmmmmatm hematics, statistics, and
oooothotho er qua tintit ttatiive t te hchniiques
tttootoo t manmanageageriarial pl probroblemlemss.
THINKING 47
Introduction
1
RECENT HISTORICAL TRENDS
The post–World War II period saw the rise of new concepts,
along with a continued
strong interest in the human aspect of managing, such as team
and group dynamics
and other concepts that relate to the humanistic perspective, as
described earlier in
the chapter. Among the approaches we’ve discussed, the
humanistic perspective has

remained most prevalent from the 1950s until today. Three new
concepts that appeared
were systems theory, the contingency view, and total quality
management.
Systems Theory
A system is a set of interrelated parts that function as a whole
to achieve a common
purpose.44 A system functions by acquiring inputs from the
external environment,
transforming them in some way, and discharging outputs back to
the environ-
ment. Exhibit 2.5 shows the basic systems theory of
organizations. It consists of
fi ve components: inputs, a transformation process, outputs,
feedback, and the
environment. Inputs are the material, human, fi nancial, or
information resources
used to produce goods and services. The transformation process
is management’s
use of production technology to change the inputs into outputs.
Outputs include
the organization’s products and services. Feedback is
knowledge of the results that
infl uence the selection of inputs during the next cycle of the

process. The envi-
ronment surrounding the organization includes the social,
political, and economic
forces noted earlier in this chapter.
Some ideas in systems theory signifi cantly affected
management thinking. They
include open and closed systems, synergy, and subsystem
interdependencies.45
Open systems must interact with the environment to survive;
closed systems
need not. In the classical and management science perspectives,
organizations were
frequently thought of as closed systems. In the management
science perspective,
closed system assumptions—the absence of external
disturbances—are sometimes
used to simplify problems for quantitative analysis. In reality,
however, all organiza-
tions are open systems, and the cost of ignoring the environment
may be failure.
Synergy means that the whole is greater than the sum of its
parts. When an orga-

nization is formed, something new comes into the world.
Management, coordina-
tion, and production that did not exist before are now present.
Organizational units
working together can accomplish more than those same units
working alone. The
sales department depends on production, and vice versa.
E X H I B I T 2 . 5
The Systems View of
Organizations
ssssssystem A set of interrelated
pppparp ts that function as a whole
ttttoo achieve a common purpose.
sssssystems theory An extensionnn
oooofof thethe hu humanmanististicic perperspespectictiveve
tttthhatt t describes organizations
aaaassass opeopen sn systystemsems ch charaaractecterizrizeded
bbbbyy bbyy entroppy, y, syny erggy, y, and sub-
sssssyyssyy tem interdeppendence.
oooopen system A system that
iiinnnnteracts with the external

eeeeennvironment.
cccclosed system A system
ttthhhat does not interact with the
eeeeexxternal environment.
sssssynergy The concept that the
wwwwwwwhole is greater than the sum
ooooofofof fo itsi pap rts.
Subsystems depend on one another as parts of a system.
Changes in one part of
the organization affect other parts. The organization must be
managed as a coordi-
nated whole. Managers who understand subsystem
interdependence are reluctant
to make changes that do not recognize subsystem impact on the
organization as a
whole. Consider Toyota’s highly successful application of the
“just-in-time” inven-
tory control system, which aims to keep inventory at its lowest.

Managers knew that
the best way to make the system work was to let employees on
the factory fl oor con-
trol the fl ow of materials. Thus, the change in production
required that the company
also make changes in culture and structure. Toyota
decentralized decision making
so that employees doing the work were empowered to make
choices about how to
accomplish it. Cultural values were shifted to encourage every
employee to think
creatively about improving his or her particular piece of the
organization and to see
problems as opportunities for learning and improving.46
As the example of Toyota shows, when managers learn to think
systemically, they
have a powerful tool for changing outcomes and improving
performance. Systemic
thinking means looking both at the distinct elements of a
situation and at the inter-
action among those elements.47 The fundamental assumption of
systemic thinking
is that everything in the world affects and is affected by the
things around it. For

example, all managers know that price, cost, volume, quality,
and profi t are all inter-
related. Changing one will affect the others. However, most
managers tend to think
analytically, by breaking things down to their distinct elements.
Systemic thinking
takes a further step. To think systemically, managers look not
only at the distinct
parts of a system or situation but also at the interactions among
those parts, which
are continually changing and affecting each other differently. A
systemic thinking
process allows managers to get a handle on highly complex
problems and situations
in a way that analytical thinking cannot.
Contingency View
A second contemporary extension to management thinking is the
contingency
view. The classical perspective assumed a universalist view.
Management concepts
were thought to be universal; that is, whatever worked—leader
style, bureaucratic
structure—in one organization would work in another. In
business education, how-

ever, an alternative view exists. In this case view, each situation
is believed to be
unique. Principles are not universal, and one learns about
management by experi-
encing a large number of case problem situations. Managers
face the task of deter-
mining what methods will work in every new situation.
To integrate these views the contingency view emerged, as
illustrated in
Exhibit 2.6.48 Here neither of the other views is seen as
entirely correct. Instead, cer-
tain contingencies, or variables, exist for helping management
identify and under-
stand situations. The contingency view tells us that what works
in one setting might
not work in another. Contingency means that one thing depends
on other things and
a manager’s response to a situation depends on identifying key
contingencies in an
organizational situation.
E X H I B I T 2 . 6 Contingency View of Management
sssssusubsystems Parts of a systemm

tttthhat depend on one another forr
ttthhhhett ir ffunctioning.
sssssystemic thinking SeeSeeinging
bbbbbbothh thhe didis itinct lelements fof a
sssssiituation and the complex and
ccccchhanging interaction among
ttthhhose elements.
ccccontingency view An exten-
sssssiion of the humanistic perspec-
tttiiive in which the successful
rrrrreesolution of organizational
ppppproblems is thought to dependd
ooooon managers’ identifi cation of
kkkkkey variations in the situation
aaaatatat t a hand.
THINKING 49
Introduction
1

As a new manager, learn to think systemically. Learn to see
both the discrete
elements of a situation as well as the ever-changing interactions
among elements.
Identify important contingencies that will help you understand a
situation and fi nd
good solutions.
One important contingency, for example, is the industry in
which the organization
operates. The organizational structure that is effective for an
Internet company such as
Google would not be successful for a large auto manufacturer
such as Ford. A management-
by-objectives (MBO) system that works well in a manufacturing
fi rm, in turn, might
not be right for a school system. When managers learn to
identify important pat-
terns and characteristics of their organizations, they can then fi
t solutions to those
characteristics.
The theme of quality is another concept that permeates
current management thinking. The quality movement is

strongly associated with Japanese companies, but these
ideas emerged partly as a result of American infl uence
after World War II. The ideas of W. Edwards Deming,
known as the “father of the quality movement,” were
initially scoffed at in the United States, but the Japanese
embraced his theories and modifi ed them to help rebuild
their industries into world powers.49 Japanese compa-
nies achieved a signifi cant departure from the American
model by gradually shifting from an inspection-oriented
approach to quality control toward an approach empha-
sizing employee involvement in the prevention of quality
problems.50
During the 1980s and into the 1990s, total quality
management (TQM), which focuses on managing the
total organization to deliver quality to customers, moved
to the forefront in helping U.S. managers deal with
global competition. The approach infuses quality values
throughout every activity within a company, with front-
line workers intimately involved in the process. Four sig-
nifi cant elements of quality management are employee
involvement, focus on the customer, benchmarking, and
continuous improvement.
Employee involvement means that achieving quality

requires companywide participation in quality control.
All employees are focused on the customer; companies fi nd
out what customers want and try to meet their needs and
expectations. Benchmarking refers to a process whereby
companies fi nd out how others do something better than
they do and then try to imitate or improve on it. Con-
tinuous improvement is the implementation of small, incre-
mental improvements in all areas of the organization on
an ongoing basis. TQM is not a quick fi x, but companies
such as General Electric, Texas Instruments, Procter &
Gamble, and DuPont achieved astonishing results in effi -
ciency, quality, and customer satisfaction through total
quality management.51 TQM is still an important part
of today’s organizations, and managers consider bench-
marking in particular a highly effective and satisfying
management technique.52
TakeaMoment
C
O
U
R

TE
SY
O
F
H
YU
N
D
A
I
The inclusion of Hyundai Motor
Company’s Elantra SE and Santa Fe in the 2008 top ten autos
by Consumer Reports shows how commitment to total quality
management can improve a company’s products and market
position. When Hyundai entered the U.S. market in 1999, its
autos
got low quality ratings from consumers. First, managers
increased
the quality team from 100 to 865 people and held quality
seminars

to train employees. They also benchmarked products, using
vehicle
lifts and high-intensity spotlights to compare against competing
brands. Committing to continuous improvement, Hyundai
delayed
several new models to resolve problems. Within fi ve years
Hyundai
earned quality ratings comparable to Honda and just behind
Toyota.
ttttotototal quality management
((((TQM) A concept that
fffffoocuses on managing the total
oooorganization to deliver quality
tttoo customers. Four signig fi cant
eeeelleee ments of TQM are employeee
iiiinnnvolvement,, focus on the
cccccuusc tomer, benchmarking, and
ccccoononcoc tinuous imprp ovement.
Some of today’s companies pursue highly ambitious quality

goals to demonstrate
their commitment to improving quality. For example, Six
Sigma, popularized by Motor-
ola and General Electric, specifi es a goal of no more than 3.4
defects per million parts.
However, the term also refers to a broad quality control
approach that emphasizes a
disciplined and relentless pursuit of higher quality and lower
costs. TQM will be
discussed in detail in Chapter 18.
INNOVATIVE MANAGEMENT THINKING
FOR TURBULENT TIMES
All of the ideas and approaches discussed so far in this chapter
go into the mix that
makes up modern management. A recent book on management
thinking indicates
dozens of ideas and techniques in current use that can trace
their roots to these his-
torical perspectives.53 In addition, innovative concepts
continue to emerge to address
management challenges in today’s turbulent world.
Organizations experiment with
new ways of managing that more adequately respond to the
demands of today’s

environment and customers. Two recent innovations in
management include the
shift to a learning organization and managing the technology-
driven workplace.
The Learning Organization
One of the toughest challenges for managers today is to get
people focused on adap-
tive change to meet the demands of an uncertain and rapidly
changing environment.
Few problems today come with ready-made solutions, and they
require that people
throughout the company think in new ways and learn new values
and attitudes.54 These
needs demand a new approach to management and a new kind of
organization.
Managers began thinking about the concept of the learning
organization after the
publication of Peter Senge’s book, The Fifth Discipline: The
Art and Practice of Learning
Organizations.55 Senge described the kind of changes managers
needed to undergo to
help their organizations adapt to an increasingly chaotic world.
These ideas gradually

evolved to describe characteristics of the organization itself.
The learning organiza-
tion can be defi ned as one in which everyone is engaged in
identifying and solv-
ing problems, enabling the organization to continuously
experiment, change, and
improve, thus increasing its capacity to grow, learn, and achieve
its purpose.
The essential idea is problem solving, in contrast to the
traditional organization
designed for effi ciency. In the learning organization all
employees look for problems,
such as understanding special customer needs. Employees also
solve problems,
which means putting things together in unique ways to meet a
customer’s needs.
Today’s best managers know that sustained competitive
advantage can come only by
developing the learning capacity of everyone in the
organization.
Managing the Technology-Driven Workplace
The shift to the learning organization goes hand-in-hand with
the current transition to

a technology-driven workplace. Today, many employees
perform much of their work
on computers and may work in virtual teams, connected
electronically to colleagues
around the world. Even in factories that produce physical goods,
machines have taken
over much of the routine and uniform work, freeing workers to
use more of their
minds and abilities. Moreover, companies are using technology
to keep in touch with
customers and collaborate with other organizations on an
unprecedented scale.
Supply Chain Management Supply chain management refers to
managing the
sequence of suppliers and purchasers, covering all stages of
processing from obtain-
ing raw materials to distributing fi nished goods to
consumers.56 Exhibit 2.7 illustrates
lllllelelearning organization An
ooooorganization in which everyoneee
iiisss engaged in identifying and
ssssolsools iving p brobllems, enablibling ththe
oooorgorganianizatzationion to to co contintinuonuousluslyy

eeeeexxpeexxperierimenment,t, impimprovrove,e, andand
iiinnncinncreareasese itsits ca capabpabiliilityty.
sssssupply chain management
MMMMMManaging the sequence of sup---
pppppliers and purchasers, coveringg
aaaaalll stages of processing from
ooooobtaining raw materials to dis-
tttrrributing fi nished goods to fi nall
cccccuustomers.
THINKING 51
Introduction
1
a basic supply chain model. A supply chain is a network of
multiple businesses and
individuals that are connected through the fl ow of products or
services.57 Today, many
organizations manage the supply chain with sophisticated
electronic technology. In

the retail industry, Wal-Mart used end-to-end digital supply
chain technology as a
competitive weapon to expand rapidly in the United States and
is now trying to do
the same around the world. In India, for example, Wal-Mart
managers are investing
in an effi cient supply chain that will electronically link farmers
and small manufac-
turers directly to the stores, maximizing value for both ends.58
Supply chain manage-
ment will be discussed in detail in Chapter 19.
As a new manager in today’s workplace, be prepared to apply
technology as a tool to
build relationships with employees, customers, and other
organizations and to help
employees think and act creatively.
Customer Relationship Management One of today’s
most popular applications of technology is for customer
relationship management. Customer relationship manage-
ment (CRM) systems use the latest information technol-
ogy to keep in close touch with customers and to collect
and manage large amounts of customer data. These
data can help employees and managers act on customer

insights, make better decisions, and provide superior
customer service. For example, when you check in at a
Marriott hotel, it is likely that the desk clerk is well aware
of your past requests for a king-size bed, non-smoking
room, and access to the Internet in your room.59
There has been an explosion of interest in CRM in just
a few short years. In the Manager’s Shoptalk on page 35,
CRM is the second most used management tool at 84 per-
cent. Only 35 percent of companies reported using CRM in
2000. How things have changed! Meeting customer needs
and desires is a primary goal for organizations, and using
CRM to give customers what they really want provides a
tremendous boost to customer service and satisfaction.
TakeaMoment
Suppliers Manufacturers
Flow of Products
Distributors Retailers
E X H I B I T 2 . 7 Supply Chain for a Retail Organization

SOURCE: Adapted from an exhibit from Global Supply Chain
Games Project, Delft University and the University of
Maryland, R. H. Smith School of Business, http://
www.gscg.org:8080/opencms/export/sites/default/gscg/images/s
upplychain_simple.gif (accessed February 6, 2008).
©
B
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IC
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The BMW subsidiary MINI offers
customers a voice in everything from personalizing their credit
cards
to designing their cars. BMW Financial Services’s MINI
Platinum
Visa cardholders can customize the MINI image that graces
their card
by accessing the Web page, shown here. There they can choose
from
four body styles, 36 different wheels, 21 body colors, and 24
roof
options. Similar software allows individuals to customize their
actual
MINI vehicles. “No two MINIs are exactly alike,” the MINI
Web site
proclaims. This type of collaborative customer experience is the
next
step in customer relationship management (CRM), as companies
court Internet-savvy Gen X and Gen Y consumers.
ccccccustomer relationship

mmmmmanagement (CRM)
SSSSyysS tems that help companies
kkkkeep in close touch with customm--
eeeeerrse , collect and manage customeerrrr r
dddddatd a, , and collaborate with cus-
ttttoomt ers to provide the most valu--
aaaaablblaba e pproducts and services.
http://www.gscg.org:8080/opencms/export/sites/default/gscg/im
ages/supplychain_simple.gif
http://www.gscg.org:8080/opencms/export/sites/default/gscg/im
ages/supplychain_simple.gif
Outsourcing Information technology has also contributed to the
rapid growth
of outsourcing, which means contracting out selected functions
or activities to other
organizations that can do the work more cost effi ciently.
Today’s companies are out-
sourcing like crazy to free up cash for investment in long-term
research and innova-
tion. Outsourcing, like supply chain management and CRM,

requires that managers
not only be technologically savvy but that they learn to manage
a complex web of
relationships. These relationships might reach far beyond the
boundaries of the phys-
ical organization; they are built through fl exible e-links
between a company and its
employees, suppliers, partners, and customers.60
ch2 A MANAGER’S ESSENTIALS: WHAT HAVE WE
LEARNED?
▪ An understanding of the evolution of management helps
current and future
managers appreciate where we are now and continue to progress
toward bet-
ter management. Elements of various historical approaches go
into the mix that
makes up modern management.
▪ Three major perspectives on management evolved since the
late 1800s: the clas-
sical perspective, the humanistic perspective, and the
management science
perspective. Each perspective encompasses several specialized

subfi elds that pro-
vided important ideas still relevant in organizations today.
▪ Recent extensions of those perspectives include systems
theory, the contingency
view, and total quality management. Systemic thinking, which
means look-
ing not just at discrete parts of a situation but also at the
continually changing
interactions among the parts, is a powerful tool for managing in
a complex
environment.
▪ The most recent thinking about organizations was brought
about by today’s
turbulent times and the shift to a new workplace described in
Chapter 1. Many
managers are redesigning their companies toward the learning
organization,
which fully engages all employees in identifying and solving
problems.
▪ The shift to a learning organization goes hand-in-hand with
the transition to a
technology-driven workplace. Important new management

approaches include
supply chain management, customer relationship management,
and outsourc-
ing. These approaches require managers to think in new ways
about the role of
employees, customers, and partners. Today’s best managers
value employees for
their ability to think, build relationships, and share knowledge,
which is quite
different from the scientifi c management perspective of a
century ago.
1. How do societal forces infl uence the practice
and theory of management? Do you think new
management techniques are a response to these
forces?
2. Based on your experience at work or school, describe
some ways in which the principles of scientifi c man-
agement and bureaucracy are still used in organiza-
tions. Do you believe these characteristics will ever
cease to be a part of organizational life? Discuss.
3. A management professor once said that for success-
ful management, studying the present was most

important, studying the past was next, and studying
the future was least important. Do you agree? Why?
4. As organizations become more technology-driven,
which do you think will become more impor-
tant—the management of the human element of
the organization or the management of technol-
ogy? Discuss.
ch2 DISCUSSION QUESTIONS
ooooooutsourcing Contracting outt
sssselseelss tect ded ffun tictions or actitivitiities
oooofooof o anan orgorganianizatzationion to to ot otherher
ooooorrganizations that can do the
wwwwwwwoworw k more cost effi ciently.y
THINKING 53
Introduction
1
5. Why do you think Mary Parker Follett’s ideas

tended to be popular with business people of her
day but were ignored by management scholars?
Why are her ideas appreciated more today?
6. Explain the basic idea underlying the contingency
view. How would you go about identifying key
contingencies facing an organization?
7. Why can an event such as the Hawthorne studies
be a major turning point in the history of manage-
ment even if the idea is later shown to be in error?
Discuss.
8. What does it mean to “think systemically”? How
would you apply systemic thinking to a problem
such as poor performance in your current academic
studies? To a problem with a romantic partner or
family member?
9. Do you think management theory will ever be as
precise as theories in the fi elds of fi nance, account-
ing, or experimental psychology? Why or why
not?

10. In the Bain survey of management tools, corporate
blogs were used in 30 percent of companies and
also have the highest projected growth rates among
managers. What might explain this? Do you think
corporate blogs will ever become as popular as cus-
tomer relationship management systems?
Best Manager–Worst Manager
Think of two managers you have known—the best
and the worst. These managers could be anyone in a
formal or informal management position with respect
to you, such as a coach, teacher, student club or team
leader, a volunteer leader at a church or volunteer
group, a boss at work, or a family member. List below
the specifi c qualities and behaviors of each manager
that made them the best and worst.
Best manager qualities and behaviors: ______________
________________________________________________
Worst manager qualities and behaviors: ____________
________________________________________________
Now describe the impact of each manager’s behavior

on your motivation and performance. How did the
manager make you feel, and how did the manager
affect the performance of yourself and others in your
situation? Were you and others motivated or de-moti-
vated, performing at a minimum or maximum?
My feelings and performance resulting from best
manager: _______________________________________
________________________________________________
My feelings and performance resulting from worst
manager: _______________________________________
________________________________________________
Your answers to the above questions are data points.
What principles of effective management can you
infer from the answers? Are differences in the best
manager–worst manager behavior and impact related
to differences among the classical perspective, human
resources perspective, behavioral sciences approach,
management science perspective, or the learning
organization?
Divide into small groups of three to fi ve members.
Each person in turn will share your answers with the

group. Listen carefully. What are the common quali-
ties, behaviors, and outcomes associated with best
manager and worst manager across group members?
________________________________________________
________________________________________________
Based on the analysis, what are three practices the
group recommends that managers use to be effective?
1.
2.
3.
ch2 MANAGEMENT IN PRACTICE: EXPERIENTIAL
EXERCISE
The Supervisor
Karen Lowry, manager of a social service agency in
a midsized city in Illinois, loved to see her employ-
ees learn and grow to their full potential. When a
rare opening for a supervising clerk occurred, Karen
quickly decided to give Charlotte Hines a shot at the
job. Charlotte had been with the agency for 17 years
and had shown herself to be a true leader. Charlotte

ch2 MANAGEMENT IN PRACTICE: ETHICAL DILEMMA
worked hard at being 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 tech-
niques that strengthened the entire agency.
However, the Civil Service Board decided that a
promotional exam should be given to fi nd a perma-
nent placement for the supervising clerk position.
For the sake of fairness, the exam was an open com-
petition—anyone, even a new employee, could sign
up and take it. The board wanted the candidate with
the highest score to get the job but allowed Karen, as
manager of the agency, to have the fi nal say-so.
Because she had accepted the provisional open-
ing and proved herself on the job, Charlotte was
upset that the entire clerical force was deemed quali-
fi ed to take the test. When the results came back, she
was devastated. Charlotte placed twelfth in the fi eld
of candidates while one of her newly hired clerks

placed fi rst. The Civil Service Board, impressed by the
high score, is urging Karen to give the new clerk the
permanent supervisory job. Karen wonders whether
it is fair to base her decision only on the results of a
written test.
What Would You Do?
1. Ignore the test. Charlotte has proved herself and
deserves the job.
2. Give the job to the candidate with the highest
score. You don’t need to make enemies on the Civil
Service Board, and, after all, it is an objective way
to select a permanent placement.
3. Devise a more comprehensive set of selection
criteria—including test results as well as super-
visory experience, ability to motivate employees,
and knowledge of agency procedures—that can
be explained and justifi ed to the board and to
employees.
SOURCE: Based on Betty Harrigan, “Career Advice,” Working

Woman
(July 1986): 22–24.
ch2 CASE FOR CRITICAL ANALYSIS
SIA Corporation
In the early years of the new century, it wasn’t hard
to see that SIA Corporation couldn’t keep doing busi-
ness the old-fashioned twentieth-century way. Chief
knowledge offi cer Jerry Seibert fully realized he owed
his new position in the newly created knowledge
management department to this challenge.
Headquartered in the Midwest, SIA was an
umbrella organization offering a wide range of
insurance products to commercial customers of all
sizes throughout the country and, increasingly, to
multinational corporations throughout the world.
Over the years it had diversifi ed into various types
of insurance by absorbing smaller companies until
it now consisted of more than 30 separate business
units. Each had its own hierarchy, characterized
by strong top-down administration and the well-
defi ned rules and procedures typical of the insur-
ance industry; virtually every employee possessed
specialized knowledge about a narrowly defi ned
market niche.

Upper-level management had given the mat-
ter considerable attention and concluded that SIA’s
refi ned division of labor into technical specialists
needed to give way to a collaborative learning organi-
zation, one where employee empowerment and open
information made it possible for a single underwriter
to be knowledgeable about a variety of products.
Jerry’s knowledge management department, housed
within human resources, could make a contribution
toward this goal.
Jerry devised an elegant solution, if he did say so
himself. He oversaw the development of software that
allowed any SIA employee to post a query, have that
question directed only to those employees with rel-
evant expertise, and then receive an answer, often in a
matter of minutes and usually before the day was out.
The only hitch was that hardly anyone was posting
queries on the easy-to-use system.
Why? Rachel Greenwell, a veteran SIA under-
writer, clued him in. Especially after weathering a
turbulent period, one that had seen plenty of layoffs
in the insurance industry, many employees viewed
the restructuring as the fi rst step in a process that
would lead to pink slips landing on their desks.

Some employees, in fact, saw their own highly spe-
cialized knowledge as a kind of job insurance policy.
“I know that’s not what your knowledge-sharing
efforts are about and that their fears are unfounded,”
she reassured him. “But you’ve got about 9,999 other
employees who are at least willing to entertain the
possibility that sharing what they know isn’t in their
best interests.”
Questions
1. What are some of the social, political, and eco-
nomic forces that are infl uencing SIA’s decision to
become a learning organization?
THINKING 55
Introduction
1
ch2 ON THE JOB VIDEO CASE

Mitchell Gold ! Bob Williams:
The Evolution of Management
Thinking
Mitchell Gold and Bob Williams, founders of MG #
BW, have had the mantra “Break the rules whenever
possible!” from the beginning. Following the outdated
rules governing the upholstery manufacturing indus-
try when they started their company in 1989 would
have put them on a path to destruction. Few, if any,
management philosophies taking hold in the larger
business world were on the minds of manufacturing
executives. Industry-wide, supply chain manage-
ment and customer service was a joke. Total quality
management (TQM), let alone customer resource
management (CRM), was nowhere to be found. When
a customer placed an order for a custom upholstery
couch, a customer service representative (CSR) told
the customer the couch would arrive in ten weeks.
Ten weeks later, however, the couch wasn’t ready and
no one knew when it would be.
Rules Broken by MG ! BW
Produce Mission-Style Furniture, Not Mission
Statements
Until recently, furniture manufacturers’ idea of mis-

sion was limited to a style of heavy oak furniture.
Gold and Williams had a clear sense of how they
wanted to run their business, so they wrote it down.
Following is a summarized version of the MG # BW
mission:
▪ Guarantee comfort.
▪ Minimize costs to ensure price points represent
understandable value to customers.
▪ Enforce rigorous standards for quality materials
and quality control to achieve no returns and real
consumer satisfaction.
▪ Sincerely treat all customers as we want to be
treated.
▪ Create styling that we want in our homes—inviting,
warm, an oasis of quiet and calm.
▪ Manufacture products in a way that preserves our
rich environment for future generations.
Make a Profit from Cutting Corners
Furniture manufacturers are notorious for skimp-

ing on materials whenever possible, especially when
the difference might seem imperceptible to custom-
ers. For example, many manufacturers use low-cost
materials such as soft woods, particleboard, or plastic
to construct their frames. MG # BW uses solid kiln-
dried hardwoods, logged using sustainable methods,
to construct its products. Gold and Williams are con-
vinced that using cheap materials only hurts compa-
nies in the end.
Pay Factory Workers by the Hour
To meet delivery promises to customers, MG # BW
needed to run a more effi cient operation, so the com-
pany instituted an incentive-based pay structure at its
Taylorville, North Carolina, factory. Most production
is done by hand, so instead of hourly wages, factory
employees get paid for each piece they complete.
When they work faster, everybody wins. Quality
assurance meetings involving representatives from
the factory fl oor are held regularly to identify process
improvements.
2. If you were a specialist at SIA, how and why would
you respond to the proposed changes? What steps
would you suggest Jerry take to increase employee

utilization of the knowledge-sharing system in par-
ticular? How can he encourage SIA employees to
share information?
3. What general obstacles would you foresee in a
company such as SIA trying to make the transition
from a hierarchical, or bureaucratic, to a learning
organization? What are some general measures
managers can take to smooth the way?
SOURCES: Based on Megan Santosus, “Case Files: CNA
Underwriting
Knowledge,” CIO Magazine (September 1, 2002):
http://www.cio.com/
archive/090102/underwriting.html; and Eric Lesser and
Laurence
Prusak, “Preserving Knowledge in an Uncertain World,” MIT
Sloan
Management Review (Fall 2001): 101–102.
http://www.cio.com/archive/090102/underwriting.html
http://www.cio.com/archive/090102/underwriting.html

Casino
Martin Scorcese’s fi lm is a lengthy, complex, and
beautifully photographed study of Las Vegas gam-
bling casinos and their organized crime connections
during the 1970s. It completes his trilogy that includes
Mean Streets (1973) and Goodfellas (1990).1 Ambition,
greed, drugs, and sex destroy the mob’s gambling
empire. The fi lm includes strong performances by
Robert De Niro, Joe Pesci, and Sharon Stone. The vio-
lence and the expletive-fi lled dialogue give Casino its
R rating.
Organizational Form
This scene is part of “The Truth about Las Vegas”
sequence that appears early in the fi lm. It follows the
scenes of the casino deceiving the Japanese gambler.
The scene starts with a close-up of Sam “Ace”
Rothstein (Robert De Niro) standing between his two
casino executives (Richard Amalfi tano and Richard F.
Strafella). In a voice-over narration he says, “In Vegas,
everybody’s gotta watch everybody else.” The scene
ends after Rothstein describes the former cheaters

who monitor the gambling fl oor with binoculars.
The fi lm continues with the introduction of Ginger
(Sharon Stone).
What to Watch for and Ask Yourself
▪ Which organizational form discussed in this chap-
ter best fi ts this scene from Casino?
▪ Apply Fayol’s principles of management to this
scene. Which ones appear in the scene? Give exam-
ples from the scene of what you see.
▪ Compare the Theory X and Theory Y assumptions
shown in Exhibit 2.4 to this scene. Which assump-
tions appear in this scene from Casino?
1 J. Craddock, ed., VideoHound’s Golden Movie Retriever
(Detroit, MI:
Gale Cengage Learning, 2008), p. 182.
ch2 BIZ FLIX VIDEO CASE
Full Employee Benefits Are Optional
By industry standards, MG # BW’s approach to bene-

fi ts is pretty unusual. Apparently, offering full benefi ts
to employees and generous benefi ts to spouses, part-
ners, and other family members is downright radical.
For its employees, MG # BW also built a health-
conscious café, a gym and indoor walking track, and
the fi rst on-site daycare ever to exist in the furniture
industry. College scholarships are awarded annually
to the employees’ children as well.
Cater to the Masses
Uninterested in catering to the lowest common
denominator, MG # BW was the fi rst in its indus-
try to target a niché market. Gold loves to say, “Our
emphasis is on taking care of a small and highly select
number of customers extremely well.”
Strategic Alliances Are for Countries
To reach its customers, MG # BW blazed new trails
in channel strategy, starting with a deal to produce
private-label furniture for Pottery Barn. Additional
partners include Crate & Barrel, Restoration Hard-
ware, Chambers (catalog), and more. Thanks to
another strategic coup, the W Hotels furnish their
rooms with MG # BW’s furniture, too.

Gold and Williams have become the Couch Kings.
The competition tries to play by their rules now. As
they celebrate 20 years in business and $100 million in
sales, it seems their renegade methods have paid off.
Discussion Questions
1. How does the humanistic perspective apply to
MG # BW’s treatment of employees?
2. How does MG # BW’s approach to manage-
ment refl ect thinking about open systems and
contingencies?
3. In what ways does MG # BW practice total quality
management?
THINKING 57
Introduction
1

This questionnaire is from William 1.
Pfeiffer and John E. Jones, eds.,
“Supervisory Attitudes: The X–Y
Scale,” The 1972 Annual Handbook
for Group Facilitators (New York:
John Wiley & Sons, 1972), pp. 65–68.
This material is used by permission
of John Wiley & Sons, Inc. The X–Y
scale was adapted from an instru-
ment developed by Robert N. Ford
of AT&T for in-house manager
training.
Eric Abrahamson, “Management 2.
Fashion,” Academy of Management
Review 21, no. 1 (January 1996):
254–285. Also see “75 Years of
Management Ideas and Practice,”
a supplement to the Harvard Busi-
ness Review (September–October
1997), for a broad overview of
historical trends in management
thinking.
Daniel A. Wren,3. The Evolution
of Management Thought, 4th ed.
(New York: Wiley, 1994). Much of

the discussion of historical forces
comes from Arthur M. Schlesinger,
Political and Social History of the
United States, 1829–1925 (New York:
Macmillan, 1925); and Homer C.
Hockett, Political and Social History
of the United States, 1492–1828
(New York: Macmillan, 1925).
Based on Stephanie Armour, “Gen-4.
eration Y: They’ve Arrived at Work
with a New Attitude,” USA Today
(November 6, 2005): www.usatoday
.com/money/workplace/2005-11-06
-gen-y_x.htm; and Marnie E. Green,
“Beware and Prepare: The Govern-
ment Workforce of the Future,” Pub-
lic Personnel Management (Winter
2000): 435ff.
Aziz Hannifa, “India, China Growth 5.
Dominates World Bank Meet,” India
Abroad (New York edition), Novem-
ber 2, 2007.
Thomas Petzinger, Jr., “So Long 6.
Supply and Demand,” The Wall
Street Journal, January 1, 2000.

Study reported in Phred Dvorak, 7.
“Why Management Trends Quickly
Fade Away (Theory and Practice
column), The Wall Street Journal,
June 26, 2006.
See Keith Leslie, Mark A. Loch, and 8.
William Schaninger, “Managing Your
Organization by the Evidence,”
McKinsey Quarterly, Issue 3 (2006);
Thomas H. Davenport, Laurence
Prusak, and H. James Wilson, What’s
the Big Idea? Creating and Capital-
izing on the Best New Management
Thinking (Boston: Harvard Business
School Press, 2003); Daniel James
Rowley, “Resource Reviews,” Acad-
emy of Management Learning and
Education 2, no. 3 (2003): 313–321;
Jane Whitney Gibson, Dana V.
Tesone, and Charles W. Blackwell,
“Management Fads: Here Yesterday,
Gone Today?” SAM Advanced Man-
agement Journal (Autumn 2003):
12–17; David Collins, Management

Fads and Buzzwords: Critical-
Practices Perspective, (London, UK:
Routledge, 2000); Timothy Clark,
“Management Research on Fashion:
A Review and Evaluation,” Human
Relations 54, no. 12 (2001): 1650–
1661; Brad Jackson, Management
Gurus and Management Fashions
(London: Routledge, 2001); Patrick
Thomas, Fashions in Management
Research: An Empirical Analysis
(Aldershot, UK: Ashgate, 1999).
Daniel A. Wren, “Management His-9.
tory: Issues and Ideas for Teaching
and Research,” Journal of Manage-
ment 13 (1987): 339–350.
Business historian Alfred D. Chan-10.
dler, Jr., quoted in Jerry Useem,
“Entrepreneur of the Century,” Inc.
(20th Anniversary Issue, 1999):
159–174.
Useem, “Entrepreneur of the 11.
Century.”
The following is based on Wren,12.
Evolution of Management Thought,

Chapters 4, 5; and Claude S.
George, Jr., The History of Manage-
ment Thought (Englewood Cliffs, NJ:
Prentice-Hall, 1968), Chapter 4.
Cynthia Crossen, “Early Industry 13.
Expert Soon Realized a Staff Has
Its Own Effi ciency,” The Wall Street
Journal, November 6, 2006.
Alan Farnham, “The Man Who 14.
Changed Work Forever,” Fortune
(July 21, 1997): 114; Charles D.
Wrege and Ann Marie Stoka,
“Cooke Creates a Classic: The Story
Behind F. W. Taylor’s Principles of
Scientifi c Management,” Academy
of Management Review (October
1978): 736–749; Robert Kanigel, The
One Best Way: Frederick Winslow
Taylor and the Enigma of Effi ciency
(New York: Viking, 1997); and “The
X and Y Factors: What Goes Around
Comes Around,” special section in
“The New Organisation: A Survey
of the Company,” The Economist

(January 21–27, 2006): 17–18.
Quoted in Ann Harrington, “The 15.
Big Ideas,” Fortune (November 22,
1999): 152–154.
Wren,16. Evolution of Management
Thought, 171; and George, History of
Management Thought, 103–104.
Gary Hamel, “The Why, What, and 17.
How of Management Innovation,”
Harvard Business Review (February
2006): 72–84; Peter Coy, “Cog or Co-
Worker?” BusinessWeek (August 20
& 27, 2007): 58–60.
Max Weber,18. General Economic
History, trans. Frank H. Knight
(London: Allen & Unwin, 1927);
Max Weber, The Protestant Ethic and
the Spirit of Capitalism, trans. Talcott
Parsons (New York: Scribner, 1930);
and Max Weber, The Theory of Social
and Economic Organizations, ed. and
trans. A. M. Henderson and Talcott
Parsons (New York: Free Press,
1947).
Kelly Barron, “Logistics in Brown,” 19.

Forbes (January 10, 2000): 78–83;
Scott Kirsner, “Venture Vérité:
United Parcel Service,” Wired (Sep-
tember 1999): 83–96; “UPS,” The
Atlanta Journal and Constitution,
April 26, 1992; and Kathy Goode,
Betty Hahn, and Cindy Seibert,
“United Parcel Service: The Brown
Giant” (unpublished manuscript,
Texas A&M University, 1981).
Henri Fayol,20. Industrial and General
Administration, trans. J. A.
Coubrough (Geneva: Interna-
tional Management Institute, 1930);
Henri Fayol, General and Industrial
Management, trans. Constance Storrs
(London: Pitman and Sons, 1949);
and W. J. Arnold et al., Business-
Week, Milestones in Management
(New York: McGraw-Hill, vol. I, 1965;
vol. II, 1966).
Mary Parker Follett,21. The New State:
Group Organization: The

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