Moder managemenrt concepts and case 12e certo 1

Preface xAbout the Authors xxi PART 1 Introduction to Modern Management 2 Chapter 1 Introducing Modern Management: Concepts and Skills 2 CHALLENGE CASE: Universal Opens Harry Potter Them

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MODERN MANAGEMENT

Steinmetz Professor of Management

Roy E Crummer Graduate School of Business

Rollins College

Dean’s Council of 100 Scholars

W P Carey School of Business Arizona State University

PRENTICE HALL

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Preface x

About the Authors xxi

PART 1 Introduction to Modern

Management 2

Chapter 1 Introducing Modern Management:

Concepts and Skills 2

CHALLENGE CASE: Universal Opens Harry Potter

Theme Park 3

Exploring Your Management Skill 4

The Importance of Management 4

The Management Task 5

䊏 How Managers Do It: Did Home Depot Overpay its

CEO? 6

The Role of Management 6

Defining Management 7

The Management Process: Management Functions 7

Management Process and Goal Attainment 8

Management and Organizational Resources 9

䊏 How Managers Do It: Achieving Effectiveness at

Telstra Corporation 10

The Universality of Management 11

The Theory of Characteristics 11

Management Skill: The Key to Management

Success 11

Defining Management Skill 11

Management Skill: A Classic View 11

䊏 How Managers Do It: Honing Cultural Skills at

Dean Foster Associates 12

Management Skill: A Contemporary View 12

Management Skill: A Focus of This Book 13

䊏 Class Discussion Highlight: Modern Research and

Management Skill 15

Management Careers 15

A Definition of Career 15

Career Stages, Life Stages, and Performance 16

Promoting Your Own Career 17

Special Career Issues 18

CHALLENGE CASE SUMMARY 20

Management Skill Activities 21

Chapter 2 Managing: History and Current

Thinking 26

CHALLENGE CASE: Handling Competitors at

Burger King 27

The Classical Approach 28

Lower-Level Management Analysis 28

䊏 How Managers Do It: Getting Efficient at Pace

Productivity 30

iii

Comprehensive Analysis of Management 32 Limitations of the Classical Approach 33

The Behavioral Approach 34

The Hawthorne Studies 34 Recognizing the Human Variable 35 The Human Relations Movement 35

䊏 How Managers Do It: Building a “People”

Environment at SAS 35

䊏 Class Discussion Highlight: Modern Research and Comprehensive Management Skill 36

The Management Science Approach 36

The Beginning of the Management Science Approach 36

Management Science Today 37 Characteristics of Management Science Applications 37

The Contingency Approach 38The System Approach 38

Types of Systems 38 Systems and “Wholeness” 39 The Management System 39

䊏 How Managers Do It: Tracking Customer Opinion with ReviewPro 40

Information for Management System Analysis 40

Learning Organization: A New Approach? 41CHALLENGE CASE SUMMARY 42

Management Skill Activities 43PART 2 Modern Management Challenges 50

Chapter 3 Corporate Social Responsibility, Ethics,

Varying Opinions on Social Responsibility 54

䊏 Research Highlight: Does Social Responsibility Help

a Company’s Bottom Line? 55 Conclusions About the Performance of Social Responsibility Activities by Business 56

Social Responsiveness 57

Determining Whether a Social Responsibility Exists 58 Social Responsiveness and Decision Making 58 Approaches to Meeting Social Responsibilities 58

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Social Responsibility Activities and Management

Functions 60

Planning Social Responsibility Activities 60

Organizing Social Responsibility Activities 60

Influencing Individuals Performing Social Responsibility

Activities 61

Controlling Social Responsibility Activities 61

䊏 How Managers Do It: Responding Responsibly to

Stakeholders at Volcom, Inc 62

Business Ethics 62

A Definition of Ethics 63

Why Ethics Is a Vital Part of Management Practices 63

A Code of Ethics 64

Creating an Ethical Workplace 66

Following the Law: Sarbanes–Oxley Reform

Standards 67

Sustainability 68

Defining Sustainability 68

Defining a Sustainable Organization 69

䊏 How Managers Do It: Building a Sustainable

Organization at PepsiCo 69

Why Sustainability? 69

Steps for Achieving Sustainability 70

Chapter 4 Management and Diversity 80

CHALLENGE CASE: Siemens Focuses on Global

Diversity 81

Defining Diversity 82

The Social Implications of Diversity 82

Advantages of Diversity in Organizations 83

Gaining and Keeping Market Share 83

䊏 How Managers Do It: Profiting Through Diversity at

Ethnocentrism and Other Negative Dynamics 86

䊏 How Managers Do It: Legal Outreach Feeds the

Diversity Pipeline 87

Negative Dynamics and Specific Groups 87

䊏 How Managers Do It: Minorities and Diversity at

Promoting Diversity Through Pluralism 93

䊏 Class Discussion Highlight: Modern Research and Diversity Skill 94

The Role of the Manager 96

Planning 96 Organizing 96 Influencing 96 Controlling 97 Management Development and Diversity Training 97

CHALLENGE CASE SUMMARY 100Management Skill Activities 101

Chapter 5 Managing in the Global Arena 108

CHALLENGE CASE: Wal-Mart Facing Global Problems in Japan 109

Exploring Your Management Skill 110Managing Across the Globe: Why? 110Fundamentals of International Management 110

䊏 How Managers Do It: Going Global at JP Morgan Chase 111

Categorizing Organizations by InternationalInvolvement 112

Domestic Organizations 112 International Organizations 113 Multinational Organizations: The Multinational Corporation 113

Defining the Multinational Corporation 113

䊏 How Managers Do It: Building Global Market Share at BRK Electronics 114

Complexities of Managing the Multinational Corporation 114

Risk and the Multinational Corporation 116 The Workforce of Multinational Corporations 116

䊏 Class Discussion Highlight: Modern Research and Global Management Skill 118

Management Functions and MultinationalCorporations 118

Planning in Multinational Corporations 119 Organizing Multinational Corporations 122 Influencing People in Multinational Corporations 124 Controlling Multinational Corporations 126

䊏 How Managers Do It: Controlling Costs

at Kimberly-Clark 126 Transnational Organizations 127

International Management: Special Issues 127

Maintaining Ethics in International Management 127 Preparing Expatriates for Foreign Assignments 128

Chapter 6 Management and

Entrepreneurship 138

CHALLENGE CASE: Google Entrepreneurs Win Big 139

Exploring Your Management Skill 140Fundamentals of Entrepreneurship 140

䊏 Class Discussion Highlight: Modern Research and Entrepreneurship Skill 141

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䊏 How Managers Do It: Exploiting Opportunities at

Advantage Fitness Products 145

Financing Exploitation 146

Corporate Entrepreneurship 147

Social Entrepreneurship 148

䊏 How Managers Do It: Helping Third-World

Entrepreneurs at Grameen Bank 148

How Do Commercial and Social Entrepreneurship

Differ? 149

Success Factors in Social Entrepreneurship 150

PART 3 Planning 158

Chapter 7 Principles of Planning 158

CHALLENGE CASE: Quality Bicycle Products Plans for the

Future 159

General Characteristics of Planning 160

Defining Planning 160

Purposes of Planning 160

䊏 How Managers Do It: Affirmative Planning at

Whole Foods Market 161

Planning: Advantages and Potential

Disadvantages 161

Primacy of Planning 161

Planning Skill 162

Steps in the Planning Process 162

䊏 How Managers Do It: Planning to Give Back to

Communities at Target Corporation 164

The Planning Subsystem 164

Organizational Objectives: Planning’s

Foundation 165

Definition of Organizational Objectives 165

Areas for Organizational Objectives 167

Working with Organizational Objectives 167

䊏 How Managers Do It: “Going Back to the Basics”

at MySpace 168

Guidelines for Establishing Quality Objectives 169

Management by Objectives (MBO) 169

Factors Necessary for a Successful MBO Program 170

MBO Programs: Advantages and Disadvantages 170

Planning and the Chief Executive 171

Final Responsibility 171

Planning Assistance 171

The Planner 171

Qualifications of Planners 172 Evaluation of Planners 172

Chapter 8 Making Decisions 180

CHALLENGE CASE: Making Difficult Decisions at NBC Universal 181

Exploring Your Management Skill 182Fundamentals of Decisions 182

Definition of a Decision 182 Types of Decisions 182 The Responsibility for Making Organizational Decisions 183

䊏 How Managers Do It: Making Business Decisions at Green Queens 184

Elements of the Decision Situation 185

䊏 How Managers Do It: Trusting Employees to Make Decisions at ShopRite 186

The Rational Decision-Making Process 186 Identifying an Existing Problem 187

䊏 How Managers Do It: Addressing—and Eliminating—Barriers at Molson 187 Listing Alternative Solutions 188 Selecting the Most Beneficial Alternative 188

䊏 Class Discussion Highlight: Modern Research and Decision-Making Skill 189

Implementing the Chosen Alternative 189 Gathering Problem-Related Feedback 190

Bounded Rationality 190Decision Making and Intuition 190

Decision-Making Heuristics and Biases 190 Decision-Making Conditions: Risk and Uncertainty 190

Decision-Making Tools 191

Probability Theory 192 Decision Trees 192

Group Decision Making 193

Advantages and Disadvantages of Using Groups to Make Decisions 193

Processes for Making Group Decisions 194 Evaluating Group Decision-Making Processes 195

Chapter 9 Strategic Planning: Strategies, Tactics,

and Competitive Dynamics 202

CHALLENGE CASE:Samsung Plans for the Future 203Exploring Your Management Skill 204

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Planning Skill 210

䊏 How Managers Do It: Pursuing Growth by

Acquisition at Black & Decker 215

Chapter 10 Plans and Planning Tools 226

CHALLENGE CASE: Microsoft Plans for Small

Businesses 227

Plans: A Definition 228

Dimensions of Plans 228

䊏 How Managers Do It: Planning for Expansion at

Nationwide Children’s Hospital 228

Why Plans Fail 232

Planning Areas: Input Planning 232

䊏 How Managers Do It: Overcoming Cultural

Obstacles in HR Planning at Raba 234

Planning Tools 235

Forecasting 235

Scheduling 239

PART 4 Organizing 248

Chapter 11 Fundamentals of Organizing 248

CHALLENGE CASE: Sony Organizes for Success 249

Definitions of Organizing and Organizing

Skill 250

The Importance of Organizing 250

䊏 How Managers Do It: Developing Managers at

General Electric 251

The Organizing Process 251

Classical Organizing Theory 252

Weber’s Bureaucratic Model 253

䊏 How Managers Do It: Eliminating Bureaucracy at

CHALLENGE CASE: Toyota to Delegate Authority 273

Exploring Your Management Skill 274Responsibility 274

䊏 How Managers Do It: Accepting Responsibility for Actions at Goldman Sachs 274

The Job Description 274 Dividing Job Activities 275 Clarifying Job Activities of Managers 276

Authority 277

Authority on the Job 277 Acceptance of Authority 278 Types of Authority 278

䊏 How Managers Do It: Exercising Functional Authority at Kroger Company 280

Accountability 281

Delegation 281

Steps in the Delegation Process 281 Obstacles to the Delegation Process 282 Eliminating Obstacles to the Delegation Process 282

Centralization and Decentralization 283

䊏 Class Discussion Highlight: Modern Research and Responsibility and Delegation Skill 283

䊏 How Managers Do It: Reaping the Benefits of Decentralization at Johnson & Johnson 284

Chapter 13 Human Resource Management 294

CHALLENGE CASE: Cisco Recruits the Best Minds

in China 295

Exploring Your Management Skill 296Defining Appropriate Human Resources 296Steps in Providing Human Resources 296

Recruitment 296

䊏 How Managers Do It: Recruiting at the “Invest in America” Alliance 301

Selection 302 Training 304

䊏 How Managers Do It: Investing in Training Programs at South Coast Health System 305 Performance Appraisal 307

䊏 Class Discussion Highlight: Modern Research and Human Resources Skill 308

䊏 How Managers Do It: Using a New Performance Appraisal System at Aetna 309

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Chapter 14 Organizational Change: Stress,

Conflict, and Virtuality 318

CHALLENGE CASE: Wrigley Continues to Change 319

Fundamentals of Changing an Organization 320

Defining Changing an Organization 320

Change Versus Stability 321

Factors to Consider When Changing an

Organization 321

The Change Agent 322

Determining What Should Be Changed 322

䊏 How Managers Do It: Making Technological

Change at University Health System 323

The Kind of Change to Make 323

䊏 How Managers Do It: Implementing People

Change at Caterpillar, Inc 324

Individuals Affected By the Change 326

Organizational Change Skill 327

Evaluation of the Change 328

Change and Stress 328

Defining Stress 329

The Importance of Studying Stress 329

Managing Stress in Organizations 329

Change and Conflict 331

The Virtual Office 334

䊏 How Managers Do It: Managing a Virtual Office at

OnSite Consulting 335

䊏 How Managers Do It: Increasing Listening at McDonald’s 360

Leader Versus Manager 370

The Trait Approach to Leadership 371The Situational Approach to Leadership: A Focus onLeader Behavior 372

Leadership Situations and Decisions 372

䊏 Class Discussion Highlight: Modern Research and Leadership Skill 377

Superleadership 385 Servant Leadership 387

䊏 How Managers Do It: Servant Leadership at Zappos.com 387

CHALLENGE CASE:Motivation Savvy Management at

Bristol-Myers Squibb Ensures Cutting-Edge Internet Presence 399

Exploring Your Management Skill 400The Motivation Process 400

Defining Motivation 400 Process Theories of Motivation 400

䊏 Class Discussion Highlight: Modern Research and Motivation Skill 401

䊏 How Managers Do It: Addressing Pay Inequity at American Airlines 403

Content Theories of Motivation: Human Needs 404

䊏 How Managers Do It: Achievement Motivation at

C Crane 406

Motivating Organization Members 407

The Importance of Motivating Organization Members 407

Strategies for Motivating Organization Members 407

䊏 How Managers Do It: Distributing Incentives at Comarco 414

PART 5 Influencing 344

Chapter 15 Influencing and Communication 344

CHALLENGE CASE: Jetstar Airways Soars on

䊏 How Managers Do It: Dealing with Increasing

Needs For Information at the White House 351

Interpersonal Communication in Organizations 356

䊏 How Managers Do It: Podcasts Enhance

Downward Communication at Ericsson 356

Communication Skill 358

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Chapter 18 Groups and Teams 424

CHALLENGE CASE: Teamwork Spreads at Xerox 425

Groups 426

Kinds of Groups in Organizations 426

Formal Groups 426

䊏 How Managers Do It: Committee for Recruitment

at Red Robin Gourmet Burgers 428

Informal Groups 431

Managing Work Groups 432

Determining Group Existence 432

Understanding the Evolution of Informal Groups 433

Teams 435

Groups Versus Teams 435

䊏 How Managers Do It: Buidling a Team at

Renaissance Executive Forums 435

Types of Teams in Organizations 436

Stages of Team Development 437

Team Effectiveness 438

Team Skill 440

Trust and Effective Teams 440

䊏 How Managers Do It: Building Trust at

Burberry 440

Chapter 19 Managing Organization Culture 450

CHALLENGE CASE: BP’s Attempt to Establish a Safety

Culture Failed 451

Fundamentals of Organization Culture 452

Defining Organization Culture 452

The Importance of Organization Culture 453

Functions of Organization Culture 453

䊏 How Managers Do It: Amending the Code of

Conduct at Tocquigny 453

Types of Organization Culture 454

Building a High-Performance Organization

Culture 456

Organization Culture Skill 459

Keeping Organization Culture Alive and Well 459

Establishing a Vision of Organization Culture 459

䊏 How Managers Do It: Modifying Innovative

Maintaining the Health of Organization Culture 466

Chapter 20 Encouraging Creativity and

䊏 How Managers Do It: Promoting Creativity at Activision 479

Increasing Creativity in Organizations 480

䊏 How Managers Do It: Supporting Employee Creativity at Coca-Cola Company 482

Innovation 483

Defining Innovation 483

䊏 How Managers Do It: Innovating for Success at Amazon 483

Linking Innovation and Creativity 484

䊏 Class Discussion Highlight: Modern Research and Creativity and Innovation Skill 485

The Innovation Process 485

Catalyst for Creativity and Innovation: Total Quality

Essentials of Total Quality Management (TQM) 488

Creative Ideas Based on TQM Expertise 493

CHALLENGE CASE SUMMARY 494Management Skill Activities 495PART 6 Controlling 500

Chapter 21 Controlling, Information, and

䊏 How Managers Do It: Establishing Standards at General Electric 505

䊏 How Managers Do It: Using Technology to Support Planning at Stein Mart 507

Power and Control 507

A Definition of Power 507 Total Power of a Manager 508 Steps for Increasing Total Power 508 Making Controlling Successful 509

Essentials of Information 509

Factors Influencing the Value of Information 510 Evaluating Information 512

Information Technology 513The Information System (IS) 513

Describing the IS 514 Managing Information Systems 516

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䊏 How Managers Do It: Scaling Data Systems for

New Users at Sage 516

Controlling Skill 518

Chapter 22 Production and Control 526

CHALLENGE CASE: Delta Attempts to Boost

䊏 How Managers Do It: Boosting Productivity

Through Smart Grid Technology at Duke

Energy 529

Quality and Productivity 529

䊏 How Managers Do It: Balancing Quality and Low

Prices at Wal-Mart 531

Automation 532

Strategies, Systems, and Processes 533

Operations Management 533

Defining Operations Management 533

Operations Management Considerations 534

䊏 How Managers Do It: Filling the Pipeline at

䊏 Class Discussion Highlight: Does Quality Control Matter? 543

Selected Operations Control Tools 544

Using Control Tools to Control Organizations 544 Inspection 544

Management by Exception 544 Management by Objectives 545 Break-Even Analysis 545 Other Broad Operations Control Tools 548

Exploring Your Management Skill Answers 556Glossary 557

Photo Credits 568Name Index 569Subject Index 573

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Managers of today continue to face new opportunities and challenges These opportunities include muchpublicized tasks like Florida’s Universal Studios opening a new Harry Potter attraction and Apple encour-aging technology innovation beyond the iPad and the iPhone At the same time, other companies faceintense challenges, such as BP’s task of cleaning up an oil well leak in the Gulf of Mexico Perhaps becausethese opportunities and challenges are so daunting, managers today arguably have the ability to earn higherfinancial rewards than at any other time in history.

This 12th edition of the Modern Management Learning Package, this text plus its ancillaries, continues a

recognized and distinctive tradition in management education that has extended more than 30 years As in

all previous editions, this current edition of the Modern Management Learning Package has focused on a single

objective: maximizing student learning of critical management concepts All revisions reflect instructor andstudent feedback regarding ways to refashion the package to further enhance student learning Starting withthe text, the following sections explain each major component of this revision

New to This Edition

Professors and students need and deserve textbooks that are modern In this context, modern involvesadding the latest concepts and empirical research as well as including the most recent examples of manage-ment in the business world Modern also refers to how the text material is presented—the pedagogy used

to help students learn the concepts.This edition of the Modern Management Learning Package, this text and its ancillaries, is undoubtedly modern in terms of both management concepts and pedagogy Overall, this

䊉 Half of the chapter-introductory Challenge Cases are new to this edition

䊉 Half of the chapter-ending Concluding Cases are new to this edition

䊉 We have added a new How Managers Do It feature Each chapter includes at least three such features

䊉 Approximately half of the Research Highlights are new to this edition

䊉 A new Key Terms section has been added at the end of each chapter

䊉 Sequencing of pedagogical features like Target Skill, Learning Objectives, and Exploring YourManagement Skill has been improved in all chapters to enhance student learning

䊉 Half of the VideoNet Exercises are new to this edition

More detail on each of these new features is integrated within the following discussion

Text: Theory Overview

Decisions about which concepts to include in this revision were difficult Such decisions were heavily enced not only by colleague and student feedback, but also by information from accrediting agencies such

influ-as The Association to Advance Collegiate Schools of Business (AACSB), professional manager influ-associationssuch as the American Management Association (AMA), and academic organizations like the Academy ofManagement

Overall, management theory in this edition is divided into the following six main sections:Introduction to Management, Modern Management Challenges, Planning, Organizing, Influencing, andControlling.The following sections discuss the changes we made in this edition to continue the tradition of

stressing the modern in Modern Management.

Part One: Introduction to Modern Management

This section contains the foundation concepts necessary to obtain a worthwhile understanding of management

䊉 Chapter 1, “Introducing Modern Management: Concepts and Skills” This chapter exposes students towhat management is and gives insights about how to build their careers.This chapter also pinpointsx

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management skills emphasized throughout the book and sets the stage for learning management

concepts and developing related skills Given high student interest, the chapter-opening case on Harry

Potter and Universal Studios has been extensively revised Also, new management compensation data

has been added to give students a realistic view of recent management pay levels A new extended

example of achieving efficiency and effectiveness at Telstra, Australia’s largest telecommunications

company, was added to help students see the relevance of chapter concepts A new experiential

exer-cise was added at the end of the chapter to help students gain insight on gauging the progress of a

career A new VideoNet Exercise exploring management roles at azTeen Magazine was also added

䊉 Chapter 2, “Managing: History and Current Thinking” This chapter presents several fundamental,

but different, ways managers can perceive their jobs The work of management pioneers like

Frederick W Taylor, Frank and Lillian Gilbreth, and Henry L Gantt is highlighted Students are

given insights into how to combine the work of management pioneers into a more comprehensive

view of management New discussion on the impact of Taylor’s work on unions and product quality

has been added More depth on the work of the Gilbreths has also been added A new extended

illustration of how to build human relations into an organization is based on events at SAS, the

world’s largest privately held software company Another illustration of how to track customer

opinions focuses on ReviewPro, software that allows management to track and organize opinions of

hotel customers A new experiential exercise was added to help students better understand the

impact of a time study job on career development A new concluding case on present-day

chal-lenges at the New York Times has been added A new VideoNet Exercise exploring the rewards and

challenges of being a manager at Campus MovieFest was also added

Part Two: Modern Management Challenges

This section helps students focus on understanding major challenges that modern managers face Detail on

each chapter in this section follows

䊉 Chapter 3, “Corporate Social Responsibility, Ethics, and Sustainability” This chapter discusses the

responsibilities managers have to society and how business ethics applies to modern management

Major revision to this chapter is the addition of a new topic: sustainability This chapter defines

sustain-ability and a sustainable organization and discusses the triple bottom line, reasons why organizations

should become sustainable, and steps to follow for building sustainable organizations A new

introduc-tory Challenge Case on Verizon, a new Research Highlight on the impact of social responsibility on

the organization’s bottom line, and a new example of how PepsiCo builds sustainability have all been

added to maximize chapter newness and freshness A new career experiential exercise encourages

students to explore how communicating about social responsibility activities can impact careers

䊉 Chapter 4, “Management and Diversity” This chapter defines diversity, explains the advantages of

promoting diversity in organizations, outlines ways in which managers can promote it, and discusses

some key challenges and dilemmas managers face in attempting to build a diverse workforce A new

Challenge Case on Siemens and global diversity has been added Other new additions for this edition

include coverage of Muslims in American society, an extended example of diversity in the legal

pro-fession, discussion of how Morgan Stanley highlights diversity information, and about how Walgreens

Company actively hires workers with disabilities A new experiential exercise focuses on gender bias

and a woman’s career A new VideoNet Exercise on diversity in organizations was also added

䊉 Chapter 5, “Managing in the Global Arena” This chapter covers domestic versus international,

multinational, and transnational organizations The chapter also emphasizes expatriates,

repatria-tion, and international market agreements The introductory Challenge Case on Wal-Mart and

Japan has been updated New discussion regarding JP Morgan’s attempts to target business in

Brazil, China, and India has also been added A new illustration of Kimberly-Clark controlling

global operational costs also appears Students will also see newly updated information regarding

U.S investment abroad—where investment in the United States has been originating and where

U.S investment in foreign countries has been focused A new experiential exercise focuses

on raising students’ sensitivity to the types of topics they must study to build a global career A

new chapter-ending case on Jarden’s global reach has also been added

䊉 Chapter 6, “Management and Entrepreneurship” This chapter focuses on the discovery, evaluation,

and exploitation of business opportunities.We have added extensive examples describing

entrepre-neurial efforts in the agricultural, financial, and health and fitness industries.The Challenge Case on

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Google has been updated to reflect some of the company’s latest efforts.We have also included anew Research Highlight reviewing the primary reasons why entrepreneurs start new businesses.Thechapter includes a new chapter-ending case on Heritage Auction Galleries, an entrepreneurial firmthat sells collectibles all over the world Finally, the chapter includes a new VideoNet exercise based

on Boston Boxing and Fitness

Part Three: Planning

This section elaborates on planning as a primary management function

䊉 Chapter 7, “Principles of Planning” This chapter details the primary concepts involved with planning.The chapter includes a new Challenge Case detailing the planning efforts at Quality Bicycle Products.The chapter also includes new examples illustrating the role of planning in a diverse set of companiesincluding Target, ConocoPhillips, and MySpace.The chapter concludes with a new VideoNet exerciseillustrating how managers plan at Kaneva

䊉 Chapter 8, “Making Decisions” This chapter details the primary concepts involved with decisionmaking.The chapter begins with a new Challenge Case summarizing the decision that NBC execu-tives made to replace Conan O’Brien with Jay Leno as host of “The Tonight Show.”We also included

a new Research Highlight examining how timely information improves decision making.We rate new content discussing the role of hubris and overconfidence in understanding executive deci-sion making Finally, the chapter includes new examples illustrating the role of decision making inthe recycling and retailing industries

incorpo-䊉 Chapter 9, “Strategic Planning: Strategies,Tactics, and Competitive Dynamics” This chapter was sively revised to include the latest research on strategic planning In addition to the chapter’s existingcoverage of strategies and tactics, this chapter now includes an in-depth discussion of competitivedynamics.This new section on competitive dynamics helps students understand how and why firms actand react when competing with their rivals Specifically, we introduce the framework suggesting that afirm’s awareness, motivation, and capabilities influence its competitive actions.We introduce an exam-ple of the rivalry between Amazon.com and Barnes & Noble to illustrate how these concepts influencecompetitive actions.The chapter includes a new Challenge Case detailing the role of strategic planning

exten-in understandexten-ing the success of Samsung Electronics.The chapter concludes with a new VideoNetExercise on Nom Nom

䊉 Chapter 10, “Plans and Planning Tools” This chapter details the fundamental tools that help improveplanning success.This chapter includes a new Challenge Case on Microsoft to help students betterunderstand how planning tools can improve organizational effectiveness.We also included a diverseset of examples to illustrate how planning tools assist both non-profit organizations (e.g., NationwideChildren’s Hospital) as well as more prominent companies such as H&M and Apple.The chapterconcludes with a new VideoNet Exercise that describes how employees at Triple Rock Brewingemploy planning tools

Part Four: Organizing

This section discusses organizing activities as a major management function

䊉 Chapter 11, “Fundamentals of Organizing” This chapter details the key concepts involved with zation.The chapter includes new examples illustrating the importance of organization for companies

organi-such as General Electric, General Motors, and EnergySolutions We also included in this chapter a new

Research Highlight examining how organizational structure influences the ability of companies tomass customize their products for customers.This example also provides a discussion of the distinc-tions between organic versus mechanistic organizational structures.The chapter concludes with a newchapter-ending case describing the challenges involved with 3M’s organizational structure

䊉 Chapter 12, “Responsibility,Authority, and Delegation” This chapter details the importance of bility, authority, and delegation in managerial effectiveness.The chapter begins with a new ChallengeCase summarizing the roles of responsibility, authority, and delegation in understanding the qualitychallenges that recently troubled Toyota.The chapter also includes new examples illustrating how theseimportant concepts influenced managerial effectiveness at Goldman Sachs and Johnson & Johnson

responsi-䊉 Chapter 13, “Human Resource Management” This chapter covers the primary concepts involved inunderstanding effective human resource management New examples have been added to illustrate

a variety of issues in human resource management For instance, new examples highlight the

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practices Intel uses to recruit new employees as well as the tactics used by Health South when

lay-ing off employees We also included a new Research Highlight illustratlay-ing how the timlay-ing of a job

offer (i.e., how soon after an interview a job offer was made to a candidate) influences the

likeli-hood that a candidate accepts the offer This chapter concludes with a new chapter-ending case

describing how Raising Cane’s employed social media to attract and hire new employees

䊉 Chapter 14, “Organizational Change: Stress, Conflict, and Virtuality” This chapter emphasizes ways

in which managers change organizations and the stress-related issues that can accompany such action

Coverage also emphasizes building alternative work situations, communicating successfully in virtual

offices, and handling change-related conflict New extended examples of organizational change focus

on changing a data technology system at University Health Systems, people change at Caterpillar, and

identifying workplace bullying New coverage has also been added on “storytelling” as a technique for

initiating change A new experiential exercise allows students to explore the role of change in career

management A new chapter-ending case focuses on change at P&G A new VideoNet Exercise

exploring change at homestarrunner.com was also added

Part Five: Influencing

This section discusses ways managers should deal with people Reflecting the spirit of AACSB guidelines,

encouraging thorough coverage of human factors in business curriculum, the influencing section is quite

comprehensive

䊉 Chapter 15, “Influencing and Communication” This chapter introduces the topic of managing people,

defines interpersonal communication, and presents organizational communication as the primary

vehicle managers use to interact with people A new introductory Challenge Case was added In

addition, more coverage of emotional intelligence has been added New extended examples on

com-munication strategy at the White House and the use of podcasts for comcom-munication at Ericsson have

also been newly added New emphasis in this chapter explores informal communication during an

economic downturn and the relationship between trust in a manager and the manager’s credibility as

a communicator.The new experiential exercise for this chapter focuses on the relationship between a

manager’s personal communication philosophy and his or her career.The end-of-chapter VideoNet

Exercise focuses on communication at Zifty.com

䊉 Chapter 16, “Leadership” This chapter highlights more traditional concepts, such as the

Vroom-Yetton-Jago leadership model, the path–goal theory of leadership, and the life-cycle theory of leadership

Coverage also includes more recently developed and evolving concepts such as servant leadership,

trans-formational leadership, coaching, super-leadership, and entrepreneurial leadership.The new introductory

Challenge Case for this chapter is on Sotoru Iwata, the president of Nintendo New research coverage

focuses on the relationship between leader traits and charismatic leadership, and leader flexibility and

“quick wins.” New extended examples feature transformational leadership at Ben & Jerry’s and servant

leadership at Zappos.com.We also added a new Research Highlight examining the role of

transforma-tional leadership in understanding group performance.The new career experiential exercise for this

chapter helps students explore the role of leadership opportunities within an organization and choosing

to take a job within that organization.The newly designed concluding case is “Oprah Leads an Empire.”

䊉 Chapter 17, “Motivation” This chapter defines motivation, describes the motivation process, and provides

useful strategies managers can use in attempting to motivate organization members Both content and

process theories of motivation are discussed in detail New extended examples of how American Airlines

addresses pay inequity, how entrepreneur Bob Crane handles achievement motivation, and distributing

incentives at Comarco are all included to help students see how chapter concepts can impact real

man-agers Research findings related to Theory X–Theory Y, the relationship between job satisfaction and

economic recession, the findings of others that are seemingly consistent with Herzberg’s ideas, job

rota-tion, and communicating about incentive programs have been added to enrich chapter content.This

chap-ter includes a new Research Highlight examining how goal-setting may influence the motivation—and

performance—of individuals.The new career experiential exercise helps students explore the relationship

between punishment and career development.The new case for this chapter is “Motivation at United Way.”

䊉 Chapter 18, “Groups and Teams” This chapter emphasizes managing clusters of people as a means of

accomplishing organizational goals Coverage focuses on managing teams Coverage also focuses on

groups versus teams, virtual teams, problem solving, self-managed and cross-functional teams, stages of

team development, empowerment, the effectiveness of self-managed teams, and factors contributing to

team effectiveness An extended example of how committees function focuses on the committee for

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recruitment at Red Robin Gourmet Burgers Another such example focuses on building teams atRenaissance Executive Forums New coverage discusses groupthink, the relationship between trust andteam effectiveness, and integrating informal groups within formal organization structure.We also added

a new Research Highlight that discusses how personality type may influence the extent to which anindividual is able to influence group decision making.The new career-oriented experiential exercise forthis chapter helps students explore the location of a first job and its impact on their careers.The newlydesigned concluding case for this chapter focuses on team building at Best Buy

䊉 Chapter 19, “Managing Organization Culture” The chapter opens with an extensively revised case on

BP that focuses on an oil leak in the Gulf of Mexico and the company’s attempt to establish an tion culture emphasizing safety Major topics include defining organization culture, the importance ofculture, and building a high-performance organization culture Special discussion focuses on cultural arti-facts: organizational values, myths, sagas, language, symbols, ceremonies, and rewards New contentincludes comments on the difficulty in defining a particular culture, what beekeeping can teach us aboutbuilding values within an organization, and the impact of economic turbulence on organizational social-ization New extended examples illustrate issues related to changing a code of conduct at Tocquigny andrecruiting within a law firm to provide new employees who fit the organization culture.We also included

organiza-a new Reseorganiza-arch Highlight discussing how organiza-aspects of orgorganiza-anizorganiza-ationorganiza-al culture influence employee turnover.The new career experiential exercise for this chapter emphasizes the impact of organization culture onjob choice.The new concluding case designed for this chapter explores organization culture and Cintas

䊉 Chapter 20, “Encouraging Creativity and Innovation” The chapter details new research on creativityand innovation and updates the efforts of the most innovative companies in America.The chapteralso includes a new example illustrating the importance of creativity for Activision, a video gamedeveloper.We also added a new example illustrating how Amazon.com continues to innovate andchange its overall business model A new Research Highlight in this chapter highlights the importantlink between creativity and innovation in entrepreneurial firms.The chapter concludes with a newcase describing the importance of innovation for Inventables

Part Six: Controlling

This section presents control as a major management function Major topics include fundamentals of trol, controlling production, and information technology

con-䊉 Chapter 21, “Controlling, Information, and Technology” The chapter opens with a new Challenge Casediscussing how Sperry Van Ness, a commercial real estate brokerage, employs controlling, information,and technology to improve operational efficiency and effectiveness.To better understand these con-cepts, we also include new examples illustrating how companies like Stein Mart and Sage use the latestinformation technologies to improve operations.We also include the most recent research available toexpand our discussion of power in the organizational context.The chapter concludes with a newVideoNet Exercise demonstrating how Platinum Autobody uses information technology

䊉 Chapter 22, “Production and Control” We updated the Challenge Case in this chapter to reflect thecontrol issues that surround Delta’s recent merger with Northwest.We also included examplesillustrating how Duke Energy, Chrysler, and Domino’s implement controls to improve operationaleffectiveness.The chapter concludes with a new VideoNet Exercise illustrating the roles of produc-tion and control at Sound in Motion.We also included a new chapter-ending case to highlight howMichael’s on East uses various controls to reduce costs

Modern Management 12th edition: The Skills

From a pedagogy standpoint, the 12th edition of Modern Management continues its unique focus in the marketplace of developing students’ management skills across all of the primary management functions Each

chapter opens by identifying a specific management skill on which the chapter focuses The remainder ofthe chapter contains a number of purposefully placed features designed to help students develop that skill.This focus on skill development is consistent with the Association to Advance Collegiate Schools ofBusiness (AACSB), which provides higher education professionals with sound standards for maintaining excel-lence in management education AACSB standards indicate that excellence in modern management education

is achieved when students acquire both knowledge about management concepts and skill in applying that

knowledge According to these standards, management educators must help students understand and ciate both the “why” of management as well as the “how” of management

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appre-The following sections discuss pedagogical features in this text that help students learn management

theory and how to apply it

1 Chapter Target Skill: Each chapter opens by identifying and defining the target management skill

emphasized in that chapter By focusing on this target skill early in the chapter, students immediately

have a context for learning chapter concepts.As an example of a chapter target skill, see the definition of

corporate social responsibility skill on page 50

2 Learning Objectives: For each chapter, a list of learning objectives follows the Chapter Target Skill.These

objectives flow from the chapter target skills to help students further focus on learning critical chapter

con-cepts See page 2 for an example of how a chapter target skill and learning objectives work together to help

students focus their learning on how to make decisions

3 Challenge Case: Each chapter opens with an introductory Challenge Case.The purpose of a Challenge

Case is to introduce students to real challenges faced by real managers and to demonstrate the usefulness

of chapter concepts and related management skills in meeting those challenges Each case summarizes a

set of issues for a manager within a company and asks students how they would resolve the issues Over

half the cases in this edition are new or updated New cases in this edition focus on companies such as

Best Buy, United Way, and Harpo Productions.Turn to page 451 to see this edition’s new introductory

Challenge Case on BP

4 How Managers Do It: New to this edition, each chapter contains two or three features called

How Managers Do It This feature shows students concrete steps practicing managers have actually

taken that are consistent with chapter concepts.This feature focuses on companies such as 3M,

Zappos, and Caterpillar For a sample of this feature, see “Committee for Recruitment at Red Robin

Gourmet Burgers” on page 428

5 Research and Class Discussion Highlights: Each chapter includes a “Research Highlight” or

“Class Discussion Highlight” that focuses on recent research related to chapter content.These

high-lights include specific questions to help students better understand the implications of recent

man-agement research on chapter content and manman-agement skills.These questions are designed primarily

for in-class discussion but could be used for out-of-class study Half of the highlights are new to this

edition New highlights cover such topics as organizational culture, recruiting tactics, and team

deci-sion making For a sample of this feature, see “Modern Research and Human Resources Skill:The

Timing of Job Offers” on page 308

6 You and Your Career: Each chapter contains an Experiential Exercise that helps students understand

the relationship between the targeted skill of the chapter and the development of their own careers

This feature includes a number of questions designed to help students appreciate the importance of

managing their own careers.To see a sample You and Your Career exercise turn to page 23

7 Challenge Case Summary: Each chapter ends with a Challenge Case Summary.This section

provides extensive narrative on how chapter concepts relate to issues in the chapter-opening

Challenge Case.To better understand this pedagogical feature, see the Challenge Case Summary for

the BP introductory case on page 467

8 Management Skill Activities: Each chapter ends with a rich array of learning activities that helps

students better understand management concepts and develop skills in applying those concepts

Specific activities are listed and explained below

A Understanding Management Concepts: This section helps students review and understand

chapter concepts

1 Know Key Terms is a section in which key terms in a chapter are listed along with page

numbers on which they are discussed For an example Know Key Terms section, see key

terms in the Strategic Planning chapter on page 220

2 Know How Management Concepts Relate is a section containing essay questions related

to chapter material.These questions help students focus on the interrelationships of chapter

concepts and how they relate to the management process For the Influencing and

Communication chapter, see a sample Know How Management Concepts Relate on page 362

B Developing Management Skills: This chapter-ending section contains many activities that

focus on helping students develop skills related to chapter content

1 Exploring Your Management Skill: Part 1 This exercise starts the Developing

Management Skill section of each chapter Taken before studying the chapter, Part 1 is a

true-false, multiple-choice test (self-scored or electronically-scored) that helps students to

assess their level of expertise in a chapter target skill before studying the chapter.The questions

focus on how a manager in a Challenge Case might apply chapter content to organizational

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issues For an example of Exploring Your Management Skill: Part 1, check out page 266 inthe Fundamentals of Organizing chapter.

2 Exploring Your Management Skill: Part 2 This exercise is actually repeating the same

Exploring Your Management Skill: Part 1 test after studying the chapter Students retake the

test in Part 2 to see the impact of studying and to assess their learning as encouraged inAACSB guidelines on assurance of learning For an example of Exploring Your ManagementSkill: Part 2, check out page 267 in the Fundamentals of Organizing chapter

3 Your Management Skills Portfolio An activity at the end of each chapter is specially

designed to allow students to demonstrate management skill learned in that chapter.Instructors may choose to have students turn in hard or electronic copies of thisassignment In addition, instructors may ask students to present their completedportfolios in class If completed online, a student can accumulate this evidence and print a portfolio covering as many chapters as desired, to help win a job during anemployment interview See “Delegating Basketball Duties at Texas A&M” on page 289

as an example of a Your Management Skills Portfolio

4 Experiential Exercises Each chapter concludes with two types of experiential exercises.

Type one is specially designed to help students develop knowledge and skill related to chapter

content For an example of this type of experiential exercise, see Analyzing Study Results onpage 419 of the Motivation chapter

Type two is an exercise that focuses on helping students use chapter content to better

manage their own careers.These exercises are called You and Your Career A sample of thistype of experiential exercise, can be found on page 154 of the Management and

Entrepreneurship chapter

5 Cases Each chapter concludes with two cases.The first concluding case is based on the

chapter’s introductory Challenge Case Students are given a series of discussion questionsthat stimulate further discussion of the Challenge Case Page 448 contains an example ofsuch questions related to “Teamwork Spreads at Xerox,” the Challenge Case for the Groupsand Teams chapter

The second concluding case is specifically designed to illustrate real-life management issuesand the steps necessary to face those issues Half of these specially designed cases are new to thisedition An example of this type of case, new to this edition, is “Best Buy’s Extreme TeamBuilding” on page 448 of the Groups and Teams chapter

6 VideoNet Exercises Each chapter ends with a unique learning tool called a VideoNet Exercise.

This exercise begins with students watching a video of an actual company and discussing chaptercontent as it relates to the company featured in the video Next, students enrich what they’ve

learned by completing an Internet activity—an online exploration of the company featured in the

video Half of the VideoNet Exercises are new to this edition For a sample VideoNet exercise, see

“Production and Control: Sound in Motion” on page 553 of the Production and Control chapter

Modern Management: The Student Learning Process

Students often ask professors to suggest the best way to study to maximize learning By using the components

of Modern Management in a conscientious and systematic fashion, students can build their knowledge about management concepts and their skill to apply it Although the components of Modern Management are flexible

and can be used for many different study processes, one suggested study process is discussed below

As shown in Figure 1, students can start chapter study by experiencing Exploring Your ManagementSkill: Part 1 This activity will introduce students to concepts and skills emphasized in the chapter and helpthem assess how much they know in these areas before studying the chapter

Once students have been introduced via Exploring Your Management Skill: Part 1, they can startlearning management concepts.They learn concepts by reading and studying the chapter and checking theirprogress in meeting the learning objectives stated at the beginning of the chapter as well as being able toanswer essay questions at the end of the chapter By checking their learning progress, students can pinpointareas in which further study is needed before moving forward

Once students are satisfied that they have learned chapter content, they can experience Exploring YourManagement Skill: Part 2 This exercise will reemphasize the knowledge and skills focus in the chapter andgive students feedback about how much they’ve learned in the chapter If students are not satisfied withtheir feedback, they can restudy material to improve

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Part 1

Read a chapter

Have you metchapter learningobjectives?

Part 2

Perform assignedskills activities

Cases

1 Target management skill

2 Challenge Case Summary

Review:

Management Skills Portfolio

VideoNet Exercises

Experiential Exercises

FIGURE 1

A systematic method for maximizing learning when studying Modern Management

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When students are satisfied with this feedback, they can focus more on learning management skillsrelated to chapter content Students focus on learning how to apply management concepts by performingapplication exercises assigned by professors and referring to chapter content as often as necessary to fur-ther clarify concepts and how to apply them Students might also work on exercises independently and dowork not assigned by the professor Application exercises can include the Management Skills Portfolio,Experiential Exercises, Cases, and VideoNet Exercises.

Instructor/Student Supplements

The Modern Management Web Site—New to This Edition

The Modern Management author Web site (www.twocertos.com) is new to this edition and a unique feature for principles of management textbooks.This site provides professors using Modern Management with a rich

array of content aimed at making the text as close to real-time as possible Content on the site includes tures like experiential exercises, videos, podcasts, and research updates By integrating this content with

fea-the text, professors can deliver courses that are content appropriate and current The Modern Management

Web site is maintained by the authors of the text, who personally choose and include the content that bestcomplements and continuously updates text content

Because instructors around the world teach courses and concepts at different times, the authors designedthis site so instructors can quickly identify and use relevant content when they need it.The site allows instruc-tors to search the entries by either chapter or content type This design allows instructors to access contentavailable for each teaching topic quickly and easily as needs arise

Instructor Resource Center

At the Instructor Resource Center, www.pearsonhighered.com/irc, instructors can access a variety of print,digital, and presentation resources available with this text in downloadable format Registration is simple andgives you immediate access to new titles and new editions As a registered faculty member, you can down-load resource files and receive immediate access to and instructions for installing course management con-tent on your campus server In case you ever need assistance, our dedicated technical support team is ready

to help with the media supplements that accompany this text.Visit http://247.pearsoned.com for answers

to frequently asked questions and toll-free user support phone numbers

The following supplements are available for download to adopting instructors:

䊉 Instructor’s Manual

䊉 Test Item File

䊉 TestGen (test-generating program)

䊉 PowerPoint Slides

Videos on DVD—Video segments that illustrate the most pertinent topics in management today and

highlight relevant issues that, demonstrate how people lead, manage, and work effectively Contact yourPearson representative for the DVD

CourseSmart eTextbook—CourseSmart is an exciting new choice for students looking to save

money As an alternative to purchasing the printed textbook, students can purchase an electronic sion of the same content With a CourseSmart eTextbook, students can search the text, make notesonline, print out reading assignments that incorporate lecture notes, and bookmark important pas-sages for later review For more information, or to purchase access to the CourseSmart eTextbook,visit www.coursesmart.com

ver-MyManagementLab (www.mymanagementlab.com) is aneasy-to-use online tool that personalizes course contentand provides robust assessment and reporting to measure individual and class performance All of theresources that students need for course success are in one place—flexible and easily adapted for your stu-dents’ course experience Some of the resources include an eText version of all chapters, quizzes, videoclips, simulations, assessments, and PowerPoint presentations that engage your students while helping themstudy independently

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The overwhelming success of Modern Management has now continued for three decades The Modern

Management Learning Package, this book and its ancillaries, has become a generally accepted academic

stan-dard for high-quality learning materials in colleges and universities throughout the world These materials

have been published in special “country editions,” serving the special needs of management students in

countries like Canada and India Modern Management has also been published in foreign languages including

Portuguese and Spanish and is commonly used in professional management training programs

Obviously, we have received much personal satisfaction and professional recognition for the success of

this text over the years In truth, however, much of the credit for this success continues to rightfully belong

to many of our respected colleagues Many key ideas for text development and improvement have come

from others We’re grateful for the opportunity to recognize the contributions of these individuals and

extend to them our warmest personal gratitude for their professional insights and encouragement

through-out the life of this project

For this edition, several colleagues made valuable contributions through numerous activities like

reviewing manuscript and providing unsolicited ideas for improvement.These individuals offered different

viewpoints that required us to constructively question our work Thoughtful comments, concern for

stu-dent learning, and insights regarding instructional implications of the written word characterized the

high-quality feedback we received.These individuals are:

Helen Davis, Jefferson Community

College–Downtown Louisville

E Gordon DeMeritt, Shepherd University

Theresa Freihoefer, Central Oregon

Community College

George Gannage,West Central Technical

College

Wayne Gawlik, Joliet Jr College

Ashley Geisewite, Southwest Tennessee

Duanne Schecter, Muskegon CommunityCollege

M Smas, Kent State UniversityPaul Thacker, Macomb Community CollegeBob Waris, University of Missouri Kansas City

Many colleagues have made significant contributions to previous editions of this project that are still

impacting this 12th edition A list of such respected colleagues includes:

Don Aleksy, Illinois Valley College

Karen Barr, Penn State University

Dan Baugher, Pace University

Wayne Blue, Allegany College of Maryland

Elise A Brazier, Northeast Texas Community

College

Michael Carrell, Morehead State University

Lon Doty, San Jose State University

Megan Endres, Eastern Michigan University

Joyce Ezrow, Anne Arundel Community

College

William Brent Felstead, College of the Desert

Robert Freeland, Columbia Southern

University

Adelina Gnanlet, California State University

Joseph Goldman, University of Minnesota

Heidi Helgren, Delta College

Jo Ann Hunter, Community College ofAllegheny County

Steven E Huntley, Florida CommunityCollege at Jacksonville

Robert E Kemper, Northern ArizonaUniversity

Toni Carol Kind, Binghamton UniversityDennis L Kovach, Community College ofAllegheny County

Loren Kuzuhara, University of WisconsinGosia Langa, University of MarylandTheresa Lant, New York UniversityMaurice Manner, Marymount CollegeMichelle Meyer, Joliet Junior CollegeMarcia Miller, George Mason University

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Jennifer Morton, Ivy Tech Community CollegeRhonda Palladi, Georgia State UniversityDonald Petkus, Indiana UniversityJames I Phillips, Northeastern StateUniversity

Richard Ratliff, Shari Tarnutzer, and theircolleagues, Utah State University

Johnny Shull, Central Carolina CommunityCollege

Denise M Simmons, Northern VirginiaCommunity College

Joe Simon, Casper CollegeRandi L Sims, Nova Southern University

Gregory Sinclair, San Francisco StateUniversity

L Allen Slade, Covenant CollegeCharles I Stubbart, Southern IllinoisUniversity Carbondale

Dr Peter Szende, Boston UniversityTom Tao, Lehigh UniversityDon Tobias, Cornell UniversityLarry Waldorf, Boise State UniversityGloria Walker, Florida Community College atJacksonville

Cindy W.Walter, Antelope Valley College

In addition, several colleagues have worked diligently on developing text ancillaries of only the est quality Such colleagues worked tirelessly to provide instructional aids to all of us and we thank them fortheir time and efforts For this edition, we also thank Steve Stovall for his work on the end of chapter casesand Patricia Lanier for her work on the VideoNet exercises

high-We will always owe Professor Lee A Graf, Professor Emeritus, Illinois State University, a huge debt

of gratitude for helping to build the success of Modern Management throughout the early years of this

proj-ect Dr Graf’s countless significant contributions in many different areas have certainly been instrumental

in building the reputation and widespread acceptance of the Modern Management Learning Package More

important than our professional relationship, Dr Graf is our friend

Members of our Prentice Hall family deserve personal and sincere recognition Our book team hasbeen nothing but the best: Sally Yagan, Editorial Director; Kim Norbuta, Acquisitions Editor; ClaudiaFernandes, Editorial Project Manager; Carter Anderson, Editorial Assistant; Lynn Savino, ProductionProject Manager; Judy Leale, Senior Managing Editor; and Nikki Jones, Marketing Manager Needless to

say, without our Prentice Hall colleagues, there would be no Modern Management.

Sam Certo would like to give special recognition to Craig McAllaster, Dean of the Crummer GraduateSchool of Business at Rollins College and Charles “Chuck” Steinmetz, entrepreneur extraordinaire Personaland professional support demonstrated by these individuals over the years has helped to ensure the inten-sity, growth, and excitement necessary to maintain a vigorous, long-term writing schedule Probablyunknown to them, McAllaster and Steinmetz have been invaluable in the completion of this text

Last and arguably most importantly, Sam Certo would like to thank his wife, Mimi, for her continual port throughout this revision She constantly made personal sacrifices “beyond the call of duty” in support ofthe completion of this project Thank you! Brian, Sarah and Andrew, Matthew and Lizzie, and Trevis andMelissa, continually but unknowingly help to build my confidence and focus.Thank you! To Skylar, Lexie, andLandon, a very special thanks.You guys always help “Pop” to remember that “adult things” aren’t always asimportant as adults make them out to be

Trevis Certo: I would like to thank my colleagues at Arizona State University for their continued port I would also like to thank my wife Melissa for her patience with my writing schedule I would alsolike to thank Skylar, Lexie, and Landon for humbling me every day Finally, and most importantly, I wouldlike to thank God for blessing me with a beautiful and healthy family

sup-Samuel C Certo

S Trevis Certo

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Dr Samuel C Certois presently the Steinmetz Professor of Management at the Roy E.Crummer Graduate School of Business at Rollins College Over his career, Dr Certo has receivedmany prestigious awards including the Award for Innovative Teaching from the Southern BusinessAssociation, the Instructional Innovation Award granted by the Decision Sciences Institute, and theCharles A.Welsh Memorial Award for outstanding teaching.

Dr Certo has written several successful textbooks including Modern Management, Strategic Management: Concepts and Applications, and Supervision: Concepts and Applications His textbooks have

been translated into several foreign languages for distribution throughout the world Having receivedsix different teaching awards in the last four years alone, Dr Certo constantly focuses on crafting all

of his books to facilitate both the instructional and student learning processes Dr Certo’s numerous

publications include articles in such journals as Academy of Management Review,The Journal of Change Management, Business Horizons,The Journal of Experiential Learning and Simulation, and Training.

A past chairperson of the Management Education and Development Division of the Academy ofManagement, he has been honored by that group’s Excellence of Leadership Award Dr Certo hasalso served as president of the Association for Business Simulation and Experiential Learning, as asso-

ciate editor for Simulation & Games, and as a review board member of the Academy of Management Review His consulting experience has been extensive with notable experience on boards of directors

in both private and public companies

Dr S Trevis Certois an associate professor and a Dean’s Council of 100 Scholar in the W P.Carey School of Business at Arizona State University Dr Certo holds a Ph.D in strategic manage-ment from the Kelley School of Business at Indiana University His research focuses on corporategovernance, top management teams, initial public offerings (IPOs), and research methodology Dr

Certo’s research has appeared in the Academy of Management Journal, Academy of Management Review, Strategic Management Journal, Journal of Management, California Management Review, Journal of Business Venturing, Entrepreneurship Theory and Practice, Business Ethics Quarterly, Journal of Business Ethics, Business Horizons, Journal of Developmental Entrepreneurship, and Across the Board Dr Certo’s research has also been featured in publications such as BusinessWeek, New York Times,Wall Street Journal,Washington Post, and Money magazine.

Dr Certo is a member of the Academy of Management and the Strategic Management Society

and serves on the editorial review boards of the Academy of Management Journal, Journal of Management, Entrepreneurship Theory and Practice, Journal of Management and Governance, and Business Horizons Prior

to joining the faculty at Arizona State, he taught undergraduate, MBA, EMBA, and Ph.D courses instrategic management, research methodology, and international business at Indiana University,TexasA&M University,Tulane University, and Wuhan University (China)

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o b j e c t i v e s

TO HELP BUILD MY MANAGEMENT SKILL, WHEN STUDUDYING

THIS CHAPTER, I WILL ATTEMPT TO ACQUIRE:

To help build my management skill,

when studying this chapter, I will

attempt to acquire:

importance of management to

society and individuals

of management

in several different ways

4 An ability to list and deﬁne the

basic functions of management

effectiveness and managerial efﬁciency

managers become successful

management careers are and how they evolve

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UNIVERSAL OPENS HARRY POTTER

THEME PARK

AFTER MONTHS OF MEDIA SPECULATION and then

additional months in development, Universal

Studios debuted its latest theme park, “The

Wizarding World of Harry Potter.” The park opened

in June 2010 at the Universal Orlando Resort in

Florida, in what Universal calls “a theme park within

a theme park.”1

The new park, developed as a partnership

between Warner Bros Entertainment Inc and

Universal Orlando Resort, creates the world’s first

fully immersive Harry Potter–themed environment

based on the best-selling books by J K Rowling

and wildly successful feature ﬁlms from Warner Bros

The author worked with a creative team to make

sure the park resembles her work.2

Pressure to build an attraction that is

true to the Harry Potter brand was intense,

as Universal’s chairperson, Tom Williams,

noted However, early visitors to the park

claim it has successfully captured the smells,

sounds, and texture of Hogwarts Castle and

the Forbidden Forest Universal reportedly

worked closely with Warner Bros to ensure

that marketing for the new park (launched in

the form of advertising during the 2010 Super

Bowl) aligned closely with the global Harry

Potter brand The 20-acre facility includes

“meticulously re-created” versions of Hogwarts

Castle and other settings from the series, along

with amusements, dining, and shopping Rides

include Harry Potter and the Forbidden Journey,

Flight of the Hippogriff, and a pair of high-speed

roller coasters known as Dragon Challenge.3

The power of the Harry Potter brand is

impres-sive Rowling has sold more than 400 million Harry

Potter books in more than 63 languages, and the

movies have generated billions of dollars in

rev-enues.4 An estimated 8 out of 10 people already

recognize the Harry Potter name, which is also an

important draw for park visitors.5

Industry observers say the Harry Potter themepark is an attempt by Universal to better competewith Walt Disney World, the leading attraction inOrlando with more than 45 million visitors in a recentyear—as compared with Universal’s Orlando park ﬁg-ures of just over 11 million during the same period.6Going from concept to the reality of operating aproﬁtable enterprise, however, is a formidable chal-lenge that rests squarely in the hands of manage-ment Management must avoid classic mistakessuch as recruiting the wrong employees, not creat-ing a motivating work environment, and failing tokeep the park’s many systems operating properly.Competent managers will meet the challenge,whereas incompetent management will not Onlytime will tell

■Bringing a massive project like a new HarryPotter theme park to life requires many types ofmanagement skills at all levels of the organization

3

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EXPLORING YOUR MANAGEMENT SKILL

THE MODERN MANAGEMENT CHALLENGE

The Challenge Case illustrates just a few of the challenges that

face Universal Orlando management at its new Harry Potter

theme park The remaining material in this chapter explains the

basic concepts of modern management and helps to develop

the corresponding management skill you will need to meet

such challenges throughout your career After studying chapter concepts, read the Challenge Case Summary at the end of the chapter to help you to relate chapter content to meeting the management challenges at “The Wizarding World of Harry Potter.”

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FIGURE 1.1

The variety of management

positions available

You can explore your level of management skill before

study-ing the chapter by completstudy-ing the exercise “Explorstudy-ing Your

Management Skill: Part 1” on page 21 and after studying this

chapter by completing the exercise “Exploring Your Management Skill: Part 2” on page 22.

THE IMPORTANCE OF MANAGEMENT

Managers influence all phases of modern organizations Plant managers run manufacturing ations that produce the clothes we wear, the food we eat, and the automobiles we drive Salesmanagers maintain a salesforce that markets goods Personnel managers provide organizationswith a competent and productive workforce The “jobs available” section in the classified adver-tisements of any major newspaper describes many different types of management activities andconfirms the importance of management (see Figure 1.1)

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oper-TABLE 1.1 The 10 Highest Compensated CEOs, 2009

Source: “CEO Compensation,” Forbes, April 22, 2009, http://www.forbes.com.

THE MANAGEMENT TASK

In addition to understanding the significance of managerial work to themselves and society

and its related benefits, prospective managers need to know what the management task

entails The sections that follow introduce the basics of the management task through

discus-sions of the role and definition of management, the management process as it pertains to

management functions and organizational goal attainment, and the need to manage

organiza-tional resources effectively and efficiently

Our society could neither exist as we know it today nor improve without a steady stream

of managers to guide its organizations Peter Drucker emphasized this point when he stated

that effective management is probably the main resource of developed countries and the

most needed resource of developing ones.7In short, all societies desperately need good

managers

Management is important to society as a whole as well as vital to many individuals who earn

their livings as managers Government statistics show that management positions have increased

from approximately 10 percent to 18 percent of all jobs since 1950 Managers come from

vary-ing backgrounds and have diverse educational specialties Many people who originally trained to

be accountants, teachers, ﬁnanciers, or even writers eventually make their livelihoods as

man-agers Although in the short term, the demand for managers varies somewhat, in the long term,

managerial positions can yield high salaries, status, interesting work, personal growth, and intense

feelings of accomplishment

Over the years, Forbes magazine has become well known for its periodic rankings of total

compensation paid to top managers in the United States Based on the 2009 Forbes compensation

study, Table 1.1 shows the names of the 10 most highly paid chief executives, the company they

worked for, and how much they earned In the study, total compensation includes factors such as

salary, bonuses, and stock options

An inspection of the list of highest paid executives in Table 1.1 reveals that the executives are

all men Based on the results of a recent survey at the Wall Street Journal, Figure 1.2 illustrates a

broad salary gap between men and women According to Figure 1.2, while women and men make

up roughly the same proportion of the workforce, men hold a disproportionate number of higher

paying jobs In addition, a recent study by the American Association of University Women

indi-cated that the discrepancy between the pay of men versus women is a national phenomenon and

is not isolated to a particular state or region.8

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$75,000 or more

16% 20%

47%

6% 12%

FIGURE 1.2

The salary gap between genders

Some evidence suggests that societal concern about management compensation goes wellbeyond one manager at one company.11A recent Senate Commerce Committee meeting, forexample, focused on justifying lavish pay programs for managers at companies such as TycoInternational and American Airlines, whose companies were in financial trouble and laying offemployees Senators seemed unified in questioning the logic that justifies the average chief exec-utive officer salary being more than 400 times higher than a production worker’s wages ThisSenate Committee meeting should be an important signal that managers who do not exercisejudicious self-control about their salaries may face future legislative control

The Role of Management

Essentially, the role of managers is to guide organizations toward goal accomplishment All izations exist for certain purposes or goals, and managers are responsible for combining and usingorganizational resources to ensure that their organizations achieve their purposes Managementmoves an organization toward its purposes or goals by assigning activities organization membersperform If the activities are designed effectively, the production of each individual worker willcontribute to the attainment of organizational goals Management strives to encourage individualactivity that will lead to reaching organizational goals and to discourage individual activity thatwill hinder the accomplishment of those goals Because the process of management emphasizesthe achievement of goals, managers must keep organizational goals in mind at all times.12

organ-Pedictably, concerns that certain managers are paid too much have beenraised For example, consider the notable criticism in recent yearsregarding the high salary paid to Robert R Nardelli, former CEO ofHome Depot.9 Disapproval of the excessive compensation paid toNardelli surfaced in the popular press as well as in statements bystockholders An article in the Wall Street Journal, for example,questioned whether Nardelli was worth the amount hereceived.10 Nardelli had been paid $63.5 million during a five-year period at Home Depot, while company shares lost 6 percent of theirvalue In the end, as with any manager, Nardelli’s compensation should bedetermined by how much value he adds to the company The more value

he adds, the more compensation he deserves As a result of the growingcriticism about Nardelli’s compensation and Nardelli’s resistance to modifyhis compensation level, he was ﬁred ■

h o w m a n a g e r s d o i t

Did Home Depot

Overpay Its CEO?

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Deﬁning Management

Students of management should be aware that the term management can be, and often is, used in

different ways For instance, it can refer simply to the process that managers follow in order to

accomplish organizational goals It can also refer to a body of knowledge; in this context,

manage-ment is a cumulative body of information that furnishes insights on how to manage The term

management can also refer to the individuals who guide and direct organizations or to a career

devoted to the task of guiding and directing organizations An understanding of the various uses

and related deﬁnitions of the term will help you avoid miscommunication during

management-related discussions

As used most commonly in this text, management is the process of reaching organizational

goals by working with and through people and other organizational resources A comparison of

this deﬁnition with the deﬁnitions offered by several contemporary management thinkers

indi-cates broad agreement that management encompasses the following three main characteristics:

1 It is a process or series of continuing and related activities.

2 It involves and concentrates on reaching organizational goals.

3 It reaches these goals by working with and through people and other organizational

resources

A discussion of each of these characteristics follows

The Management Process: Management Functions

The four basic management functions—activities that make up the management process—

are described in the following sections

Planning Planning involves choosing tasks that must be performed to attain organizational

goals, outlining how the tasks must be performed, and indicating when they should be performed

Planning activity focuses on attaining goals Through their plans, managers outline exactly what

organizations must do to be successful Planning is essential to getting the “right” things done.13

Planning is concerned with organizational success in the near future (short term) as well as in the

more distant future (long term).14

Organizing Organizing can be thought of as assigning the tasks developed under the planning

function to various individuals or groups within the organization Organizing, then, creates a

mechanism to put plans into action People within the organization are given work assignments

that contribute to the company’s goals Tasks are organized so that the output of individuals

con-tributes to the success of departments, which, in turn, concon-tributes to the success of divisions,

which ultimately contributes to the success of the organization Organizing includes determining

tasks and groupings of work.15Organizing should not be rigid, but adaptable and ﬂexible to meet

challenges as circumstances change.16

Inﬂuencing Inﬂuencing is another of the basic functions within the management process.This

function—also commonly referred to as motivating, leading, directing, or actuating—is concerned

primarily with people within organizations.*Inﬂuencing can be deﬁned as guiding the activities of

organization members in appropriate directions An appropriate direction is any direction that

helps the organization move toward goal attainment The ultimate purpose of inﬂuencing is to

increase productivity Human-oriented work situations usually generate higher levels of

produc-tion over the long term than do task-oriented work situaproduc-tions, because people ﬁnd the latter type

less satisfying

*In early management literature, the term motivating was commonly used to signify this people-oriented management

function.The term inﬂuencing is used consistently throughout this text because it is broader and permits more

ﬂexi-bility in discussing people-oriented issues Later in the text, motivating is discussed as a major part of inﬂuencing.

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FIGURE 1.3

Classic mistakes commonly

made by managers in carrying

out various management

functions

Organizational Goals

Planning

Organizing Influencing Controlling

FIGURE 1.4

Relationships among the four

functions of management used

to attain organizational goals

Controlling Controlling is the management function through which managers:

1 Gather information that measures recent performance within the organization.

2 Compare present performance to preestablished performance standards.

3 From this comparison, determine whether the organization should be modified to meet

preestablished standards

Controlling is an ongoing process Managers continually gather information, make their parisons, and then try to find new ways of improving production through organizationalmodification

com-History shows that managers commonly make mistakes when planning, organizing, ing, and controlling Figure 1.3 shows a number of such mistakes managers make related to eachfunction Studying this text carefully should help managers avoid making such mistakes

inﬂuenc-Management Process and Goal Attainment

Although we have discussed the four functions of management individually, planning, organizing,inﬂuencing, and controlling are integrally related and therefore cannot be separated in practice

Figure 1.4 illustrates this interrelationship and also indicates that managers use these activities solelyfor reaching organizational goals Basically, these functions are interrelated because the performance

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Finished Products

Goods Services

FIGURE 1.5

Transformation of organizational resources into ﬁnished products through the production process

of one depends on the performance of the others For example, organizing is based on

well-thought-out plans developed during the planning process, and inﬂuencing systems must be tailored to reﬂect

both these plans and the organizational design used to implement them The fourth function,

con-trolling, involves possible modiﬁcations to existing plans, organizational structure, or the motivation

system used to develop a more successful effort

To be effective, a manager must understand how the four management functions are practiced,

not simply how they are defined and related Thomas J Peters and Robert H Waterman, Jr.,

studied numerous organizations—including Frito-Lay and Maytag—for several years to

deter-mine what management characteristics best describe excellently run companies In their book, In

Search of Excellence, Peters and Waterman suggest that planning, organizing, influencing, and

controlling should be characterized by a bias for action; a closeness to the customer; autonomy

and entrepreneurship; productivity through people; a hands-on, value-driven orientation;

“stick-ing to the knitt“stick-ing”; a simple organizational form with a lean staff; and simultaneous loose–tight

properties

This brief introduction to the four management functions will be further developed in Parts 3

through 6 of this text

Management and Organizational Resources

Management must always be aware of the status and use of organizational resources These

resources, composed of all assets available for activation during the production process, are of

four basic types:

1 Human

2 Monetary

3 Raw materials

4 Capital

As Figure 1.5 shows, organizational resources are combined, used, and transformed into

ﬁn-ished products during the production process

Human resources are the people who work for an organization The skills they possess and

their knowledge of the work system are invaluable to managers Monetary resources are

amounts of money that managers use to purchase goods and services for the organization Raw

materials are ingredients used directly in the manufacturing of products For example, rubber is

a raw material that Goodyear would purchase with its monetary resources and use directly in

manufacturing tires Capital resources are machines used during the manufacturing process

Modern machines, or equipment, can be a major factor in maintaining desired production

lev-els Worn-out or antiquated machinery can make it impossible for an organization to keep pace

with competitors

Managerial Effectiveness As managers use their resources, they must strive to be both

effective and efﬁcient Managerial effectiveness refers to management’s use of organizational

resources in meeting organizational goals If organizations are using their resources to attain their

goals, the managers are said to be effective In reality, however, managerial effectiveness can be

measured by degrees The closer an organization comes to achieving its goals, the more effective

its managers are considered to be Managerial effectiveness, then, exists on a continuum ranging

from ineffective to effective.

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As an example of achieving efﬁciency and effectiveness, consider TelstraCorporation, Australia’s largest telecommunication company Like itscounterparts the world over, Telstra faces the challenges of a changingindustry where mobile phones are fast becoming more popularthan the landline business on which it built its fortunes To survive,Telstra is scrambling to create a nimble management team andprune the bureaucracy that slows down decision making andinternal operations In a recent reorganization of his executiveteam, Telstra CEO David Thodey created four groups—customer sales andsupport, product and marketing innovation, operations, and corporatesupport—all focused on effectiveness, getting more competitive while alsoattracting and retaining customers.19 ■

to production)

Not reaching goals and not wasting resources

Reaching goals and not wasting resources

Not reaching goals and wasting resources

Reaching goals and wasting resources

Inefficient

(few resources contribute

Managerial Efﬁciency Managerial efﬁciency is the proportion of total organizational

resources that contribute to productivity during the manufacturing process.17The higher thisproportion, the more efﬁcient is the manager The more resources wasted or unused during the

production process, the more inefﬁcient is the manager In this situation, organizational resources

refer not only to raw materials that are used in manufacturing goods or services but also to relatedhuman effort.18Like management effectiveness, management efﬁciency is best described as being

on a continuum ranging from inefficient to efficient Inefficient means that a small proportion of total resources contributes to productivity during the manufacturing process; efficient means that

a large proportion of resources contributes to productivity

As Figure 1.6 shows, the concepts of managerial effectiveness and efficiency are obviouslyrelated A manager could be relatively ineffective—with the consequence that the organization ismaking little progress toward goal attainment—primarily because of major inefficiencies or poorutilization of resources during the production process In contrast, a manager could be somewhateffective despite being inefficient if demand for the finished goods is so high that the manager canget an extremely high price per unit sold and thus absorb inefficiency costs Thus a manager can

be effective without being efﬁcient, and vice versa.To maximize organizational success, however,both effectiveness and efﬁciency are essential

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THE UNIVERSALITY OF MANAGEMENT

Management principles are universal:That is, they apply to all types of organizations (businesses,

churches, sororities, athletic teams, hospitals, etc.) and organizational levels.20 Naturally,

man-agers’ jobs vary somewhat from one type of organization to another because each organizational

type requires the use of specialized knowledge, exists in a unique working and political

environ-ment, and uses different technology However, job similarities are found across organizations

because the basic management activities—planning, organizing, inﬂuencing, and controlling—are

common to all organizations

The Theory of Characteristics

Henri Fayol, one of the earliest management writers, stated that all managers should possess

certain characteristics, such as positive physical and mental qualities and special knowledge

related to the specific operation.21B C Forbes emphasized the importance of certain more

personal qualities, inferring that enthusiasm, earnestness of purpose, confidence, and faith in

their own worthiness are primary characteristics of successful managers Forbes described

Henry Ford as follows:

At the base and birth of every great business organization was an enthusiast, a man

con-sumed with earnestness of purpose, with conﬁdence in his powers, with faith in the

worthwhileness of his endeavors The original Henry Ford was the quintessence of

enthusiasm In the days of his difﬁculties, disappointments, and discouragements, when

he was wrestling with his balky motor engine—and wrestling likewise with poverty—

only his inexhaustible enthusiasm saved him from defeat 22

Fayol and Forbes can describe desirable characteristics of successful managers only because of

the universality concept: The basic ingredients of successful management are applicable to all

organizations

MANAGEMENT SKILL: THE KEY

TO MANAGEMENT SUCCESS

Thus far, the introduction to the study of management has focused on discussing concepts such as

the importance of management, the task of management, and the universality of management

This section continues the introduction to management by deﬁning management skill and

pre-senting both classic and more contemporary views of management skills thought to ensure

man-agement success

Deﬁning Management Skill

No introduction to the ﬁeld of management would be complete without a discussion of

manage-ment skill Managemanage-ment skill is the ability to carry out the process of reaching organizational

goals by working with and through people and other organizational resources Learning about

management skill and focusing on developing it are of critical importance because possessing such

skill is generally considered the prerequisite for management success.23Because management

skills are so critical to the success of an organization, companies commonly focus on possible steps

that can be taken to improve the skills of their managers

Management Skill: A Classic View

Robert L Katz has written perhaps the most widely accepted early article about management

skill.24Katz states that managers’ ability to perform is a result of their managerial skills.A manager

with the necessary management skills will probably perform well and be relatively successful One

without the necessary skills will probably perform poorly and be relatively unsuccessful

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Technical skills are among the

types of skills necessary for

successful management.

MANAGEMENT LEVELS

Top management

Needs

Middle management

Human skills

Conceptual skills

Supervisory or operational management

Technical skills

SKILLS NEEDED

Needs

FIGURE 1.7

As a manager moves from the

supervisory to the

top-management level, conceptual

skills become more important

than technical skills, but human

skills remain equally important

Katz indicates that three types of skills are important for successful management ance: technical, human, and conceptual skills

perform-• Technical skills involve the ability to apply specialized knowledge and expertise to

work-related techniques and procedures Examples of these skills are engineering, computer gramming, and accounting Technical skills are mostly related to working with

pro-“things”—processes or physical objects

• Human skills build cooperation within the team being led.They involve working with

atti-tudes and communication, individual and group interests—in short, working with people

• Conceptual skills involve the ability to see the organization as a whole A manager with

conceptual skills is able to understand how various functions of the organization complementone another, how the organization relates to its environment, and how changes in one part ofthe organization affect the rest of the organization

As one moves from lower-level management to upper-level management, conceptual skillsbecome more important and technical skills less important (see Figure 1.7) The supportiverationale is that as managers advance in an organization, they become less involved with the actualproduction activity or technical areas, and more involved with guiding the organization as awhole Human skills, however, are extremely important to managers at top, middle, and lower(or supervisory) levels.26The common denominator of all management levels, after all, is people

Management Skill: A Contemporary View

More current thought regarding management skills is essentially an expansion of the classic viewlist of skills managers need to be successful.This expansion is achieved logically through two steps:

1 Deﬁning the major activities that managers typically perform

2 Listing the skills needed to carry out these activities successfully

As an example illustrating how companies need to develop theirmanagers’ skills, consider the importance of preparing managers forworking with people of other cultures An increasingly global businessworld requires that managers who travel be aware of and graspcultural differences in their dealings with coworkers, clients, andthe public Professionals at New York-based Dean FosterAssociates, an intercultural consulting ﬁrm, provide cross-culturaltraining that helps businesspeople prepare for work overseas Forexample, for a client heading to Japan, Foster conducted a ﬁve-hour sessionthat included a traditional Japanese meal, coaching on Japanese diningetiquette, and information on business customs, socializing, and developingthe proper mind set for working outside one’s native country.25 ■

h o w m a n a g e r s d o i t

Honing Cultural Skills

at Dean Foster Associates

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The major activities that modern managers typically perform are of three basic types.27

1 Task-related activities are management efforts aimed at carrying out critical

manage-ment-related duties in organizations Such activities include short-term planning, clarifying

objectives of jobs in organizations, and monitoring operations and performance

2 People-related activities are management efforts aimed at managing people in

organiza-tions Such activities include providing support and encouragement to others, providing

recognition for achievements and contributions, developing skill and conﬁdence of

organiza-tion members, consulting when making decisions, and empowering others to solve problems

3 Change-related activities are management efforts aimed at modifying organizational

components Such activities include monitoring the organization’s external environment,

proposing new strategies and vision, encouraging innovative thinking, and taking risks to

pro-mote needed change

Important management skills deemed necessary to successfully carry out these management

activities appear in Figure 1.8 This ﬁgure pinpoints 12 such skills, ranging from empowering

organization members to envisioning how to change an organization Remember that Figure 1.8

is not intended as a list of all skills managers need to be successful, but as an important list

con-taining many of the necessary skills One might argue, for example, that skills such as building

efﬁcient operations or increasing cooperation among organization members are critical

manage-ment skills and should have prominence in Figure 1.8

Management Skill: A Focus of This Book

The preceding sections discussed both classic and contemporary views of management skills in

modern organizations A number of critical management skills were presented and related to top,

middle, and supervisory management positions

One common criticism of such management skill discussions is that although understanding

such rationales about skills is important, skills categories—such as technical skill, human skill, and

conceptual skill—are often too broad to be practical Many management scholars believe that

these broad skills categories contain several more narrowly focused skills that represent the more

practical and essential abilities for successfully practicing management.28These more narrowly

focused skills should not be seen as valuable in themselves, but as “specialized tools” that help

man-agers meet important challenges and successfully carry out the management functions of planning,

organizing, inﬂuencing, and controlling.Table 1.2 summarizes the management functions and

chal-lenges covered in this book and corresponding management skills that help address them

Because management skill is generally a prerequisite for management success, aspiring

man-agers should strive to develop such skill In developing such skill, however, manman-agers should keep

To increase the probability of being successful, managers should have competence in

Clarifying roles: assigning tasks and explaining job responsibilities, task objectives, and

performance expectations

Monitoring operations: checking on the progress and quality of the work, and evaluating

individual and unit performance

Short-term planning: determining how to use personnel and resources to accomplish a

task efficiently, and determining how to schedule and coordinate unit activities efficiently

Consulting: checking with people before making decisions that affect them, encouraging

participation in decision making, and using the ideas and suggestions of others

Supporting: acting considerate, showing sympathy and support when someone is upset or

anxious, and providing encouragement and support when there is a difficult, stressful task

Recognizing: providing praise and recognition for effective performance, significant

achievements, special contributions, and performance improvements

Developing: providing coaching and advice, providing opportunities for skill development,

and helping people learn how to improve their skills

FIGURE 1.8

Skills for increasing the probability of management success

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TABLE 1.2 Management Functions and Challenges Covered in This Text and Corresponding

Management Skills Emphasized to Help Address Them Introduction to Modern Management

Chapter 1—Management Skill: The ability to work with people and other organizational resources to plish organizational goals.

accom-Chapter 2—Comprehensive Management Skill: The ability to collectively apply concepts from various major management approaches to perform a manager’s job.

Modern Management Challenges Chapter 3—Corporate Social Responsibility Skill: The ability to take action that protects and improves both the welfare of society and the interests of the organization.

Chapter 4—Diversity Skill: The ability to establish and maintain an organizational workforce that represents a combination of assorted human characteristics appropriate for achieving organization success.

Chapter 5—Global Management Skill: The ability to manage global factors as components of organizational operations.

Chapter 6—Entrepreneurship Skill: The identiﬁcation, evaluation, and exploitation of opportunities.

Planning Chapter 7—Planning Skill: The ability to take action to determine the objectives of the organization as well as what is necessary to accomplish these objectives.

Chapter 8—Decision-Making Skill: The ability to choose alternatives that increase the likelihood of accomplishing objectives.

Chapter 9—Strategic Planning Skill: The ability to engage in long-range planning that focuses on the organization as a whole.

Chapter 10—Planning Tools Skill: The ability to employ the qualitative and quantitative techniques necessary

to help develop plans.

Organizing Chapter 11—Organizing Skill: The ability to establish orderly uses for resources within the management system Chapter 12—Responsibility and Delegation Skill: The ability to understand one’s obligation to perform assigned activities and to enlist the help of others to complete those activities.

Chapter 13—Human Resource Management Skill: The ability to take actions that increase the contributions of individuals within the organization.

Chapter 14—Organizational Change Skill: The ability to modify an organization in order to enhance its contribution to reaching company goals.

Inﬂuencing Chapter 15—Communication Skill: The ability to share information with other individuals.

Chapter 16—Leadership Skill: The ability to direct the behavior of others toward the accomplishment of objectives Chapter 17—Motivation Skill: The ability to create organizational situations in which individuals performing organizational activities are simultaneously satisfying personal needs and helping the organization attain its goals Chapter 18—Team Skill: The ability to manage a collection of people so that they inﬂuence one another toward the accomplishment of an organizational objective(s).

Chapter 19—Organization Culture Skill: The ability to establish a set of shared values among organization members regarding the functioning and existence of their organization to enhance the probability of organizational success.

Chapter 20—Creativity and Innovation Skill: The ability to generate original ideas or new perspectives on existing ideas and to take steps to implement these new ideas.

Controlling Chapter 21—Controlling Skill: The ability to use information and technology to ensure that an event occurs

as it was planned to occur.

Chapter 22—Production Skill: The ability to transform organizational resources into products.

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in mind that the value of individual management skills will tend to vary from manager to

man-ager, depending on the speciﬁc organizational situations faced For example, managers facing

seri-ous manufacturing challenges might find the skill to encourage innovative thinking aimed at

meeting these challenges is their most important skill On the other hand, managers facing a

dis-interested workforce might ﬁnd the skill of recognizing and rewarding positive performance is

their most valuable skill Overall, managers should spend time deﬁning the most formidable tasks

they face and sharpening skills that will help to successfully carry out these tasks

Skills Needed to Manage in Vietnam

A study by Neupert, Baughn, and Dao investigated

the skills necessary to be a successful manager in

Vietnam The researchers focused on the opinions

of practicing managers in Vietnam in generating

their list of skills for managerial success

To gather their information, the researchers used

the critical incident method This method asked

managers in an interview format to tell the story of

theirworst nightmare or biggest challenge in their

management positions The researchers also asked

managers their opinion about what skills were

necessary to be a successful manager in Vietnam

Through this critical incident process, a commonly

used research technique, the researchers hoped to

identify skills necessary to be a successful manager

in Vietnam

The researchers interviewed 50 local Vietnamesemanagers and 24 managers from other countries.Interviews lasted between 45 and 90 minutes andwere conducted in English or Vietnamese, depending

on manager preference The managers interviewedwere from a number of ﬁrms in various industries fromtwo major Vietnamese business centers: Hanoi and

Ho Chi Minh City

Do you think that the local Vietnamese andforeign managers suggested the same skills formanagerial success in Vietnam? Why? If not, how

do you think the suggested skills differed? Why?

Source: Kent E Neupert, C Christopher Baughn, and Thi Thanh Lam Dao, “International Management Skills for Success in Asia:

A Needs-Based Determination of Skills for Foreign Managers and Local Managers,” Journal of European Industrial Training 29, nos 2/3 (2005): 165–180.

class discussion highlight

MODERN RESEARCH AND MANAGEMENT SKILL

MANAGEMENT CAREERS

Thus far, this chapter has focused on outlining the importance of management to society,

present-ing a deﬁnition of management and the management process, and explainpresent-ing the universality of

management Individuals commonly study such topics because they are interested in pursuing a

management career.This section presents information that will help you preview your own

man-agement career It also describes some of the issues you may face in attempting to manage the

careers of others within an organization.The speciﬁc focus is on career deﬁnition, career and life

stages and performance, and career promotion

A Deﬁnition of Career

A career is a sequence of work-related positions occupied by a person over the course of a

life-time.29As the deﬁnition implies, a career is cumulative in nature: As people accumulate

success-ful experiences in one position, they generally develop abilities and attitudes that qualify them to

hold more advanced positions In general, management positions at one level tend to be

stepping-stones to management positions at the next higher level In building a career, an individual should

be focused on developing skills necessary to qualify for the next planned job and not simply

tak-ing a job with the highest salary.30

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The relationships among career

stages, life stages, and

performance

Career Stages, Life Stages, and Performance

Careers are generally viewed as evolving through a series of stages.31These evolutionary stages—exploration, establishment, maintenance, and decline—are shown in Figure 1.9, which highlightsthe performance levels and age ranges commonly associated with each stage Note that the levelsand ranges in the figure indicate what has been more traditional at each stage, not what isinevitable According to the Census Bureau, the proportion of men in the U.S population age 65and older who participated in the labor force in 2008 reached 17.8 percent This participationrate was the highest since 1985.The proportion for women in this age group was 9.1 percent, thehighest since 1975.32As more workers beyond age 65 exist in the workforce, more careers will

be maintained beyond the traditional benchmark of age 65, as depicted in Figure 1.9

Exploration Stage The ﬁrst stage in career evolution is the exploration stage, which

occurs at the beginning of a career and is characterized by self-analysis and the exploration of ent types of available jobs Individuals at this stage are generally about 15 to 25 years old and areinvolved in some type of formal training, such as college or vocational education.They often pursuepart-time employment to gain a richer understanding of what a career in a particular organization orindustry might be like.Typical jobs held during this stage include cooking at Burger King, stocking at

differ-a Federdiffer-ated Depdiffer-artment Store, differ-and working differ-as differ-an ofﬁce differ-assistdiffer-ant differ-at differ-a Ndiffer-ationwide Insurdiffer-ance ofﬁce

Establishment Stage The second stage in career evolution is the establishment stage,

during which individuals about 25 to 45 years old start to become more productive, or higher formers (as Figure 1.9 indicates by the upturn in the dotted line and its continuance as a solid line).Employment sought during this stage is guided by what was learned during the exploration stage

per-In addition, the jobs sought are usually full-time jobs per-Individuals at this stage commonly move todifferent jobs within the same company, to different companies, or even to different industries

Maintenance Stage The third stage in career evolution is the maintenance stage In this

stage, individuals who are 45 to 65 years old show either increased performance (career growth),stabilized performance (career maintenance), or decreased performance (career stagnation)

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From the organization’s viewpoint, it is better for managers to experience career growth

than maintenance or stagnation For this reason, some companies such as IBM, Monsanto, and

Brooklyn Union Gas have attempted to eliminate career plateauing—deﬁned as a period of

lit-tle or no apparent progress in a career.33

Decline Stage The last stage in career evolution is the decline stage, which involves

peo-ple about 65 years old whose productivity is declining.These individuals are either close to

retire-ment, semi-retired, or fully retired People in the decline stage may ﬁnd it difﬁcult to maintain

prior performance levels, perhaps because they have lost interest in their careers or have failed to

keep their job skills up-to-date

As Americans live longer and stay healthier into late middle age, many of them choose to

become part-time workers in businesses such as Publix supermarkets and McDonald’s or in

vol-unteer groups such as the March of Dimes and the American Heart Association Some retired

executives put their career experience to good social use by working with the

government-spon-sored organization Service Corps of Retired Executives (SCORE) to offer management advice

and consultation to small businesses trying to gain a foothold in their market

Promoting Your Own Career

Both practicing managers and management scholars agree that careful formulation and

imple-mentation of appropriate tactics can enhance the success of a management career.34Planning your

career path—the sequence of jobs that you will ﬁll in the course of your working life—is the ﬁrst

step to take in promoting your career For some people, a career path entails ascending the

hier-archy of a particular organization Others plan a career path within a particular profession or

series of professions Everyone, however, needs to recognize that career planning is an ongoing

process, beginning with the career’s early phases and continuing throughout the career

In promoting your own career, you must be proactive and see yourself as a business that you

are responsible for developing.You should not view your plan as limiting your options First

con-sider both your strengths and your liabilities and assess what you need from a career.Then explore

all the avenues of opportunity open to you, both inside and outside the organization Set your

career goals, continually revise and update these goals as your career progresses, and take the

steps necessary to accomplish these goals

Another important tactic in promoting your own career is to work for managers who carry out

realistic and constructive roles in the career development of their employees.35Table 1.3 outlines

what career development responsibility, information, planning, and follow-through generally

include It also outlines the complementary career development role for a professional employee

Promoting your own career may require you to continually demonstrate your skills and abilities These production managers in California are teleconferencing with project managers in India, although the time difference requires them to convene at 7:30 in the evening local time.

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To enhance your career success, you must learn to be proactive rather than reactive.36That is,you must take speciﬁc actions to demonstrate your abilities and accomplishments.You must alsohave a clear idea of the next several positions you should seek, the skills you need to acquire tofunction appropriately in those positions, and plans for acquiring those skills Finally, you need tothink about the ultimate position you want and the sequence of positions you must hold in order

to gain the skills and attitudes necessary to qualify for that position

Special Career Issues

In the business world of today, countless special issues signiﬁcantly affect how careers actuallydevelop.Two issues that have had a signiﬁcant impact on career development in recent years are:

1 Women managers

2 Dual-career couples

The following sections discuss each of these factors

Women Managers Women in their roles as managers must meet the same challenges intheir work environments as men However, because they have more recently joined the ranks ofmanagement in large numbers, women often lack the social contacts that are so important in thedevelopment of a management career.Another problem for women is that, traditionally, they havebeen expected to manage families and households while simultaneously handling the pressures andcompetition of paid employment Finally, women are more likely than men to encounter sexualharassment in the workplace

Interestingly, some management theorists believe that women may have an enormous tage over men in future management situations.37

advan-They predict that networks of relationships will replace rigid organizational structures andstar workers will be replaced by teams made up of workers at all levels who are empowered tomake decisions Detailed rules and procedures will be replaced by a ﬂexible system that calls forjudgments based on key values and a constant search for new ways to get the job done Strengthsoften attributed to women—emphasizing interrelationships, listening, and motivating others—will be the dominant virtues in the corporation of the future

Despite this optimism, however, some reports indicate that the proportion of men to women

in management ranks seems to have changed little in the last 10 years.38This stabilized tion can probably be explained by a number of factors For example, perhaps women are not opt-ing to move into management positions at a greater pace than men because of trade-offs they have

propor-to make, such as not having or delaying the birth of a baby In addition, women often indicate that

TABLE 1.3 Manager and Employee Roles in Enhancing Employee Career Development Dimension Professional Employee Manager

Responsibility Assumes responsibility for

individual career development

Assumes responsibility for employee development

Information Obtains career information

through self-evaluation and data collection:

What do I enjoy doing?

Where do I want to go?

Provides information by holding up

a mirror of reality:

How manager views the employee How others view the employee How “things work around here” Planning Develops an individual plan

to reach objectives

Helps employee assess plan

Follow-through Invites management support

through high performance on the current job by understanding the scope of the job and taking appropriate initiative

Provides coaching and relevant mation on opportunities

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infor-it’s more difﬁcult for them to move into management positions than men because of the lack of

female mentors and role models in the corporate world Table 1.4 lists seven steps that

manage-ment can take to help women advance in an organization.39

Dual-Career Couples With an increasing number of dual-career couples, organizations

who want to attract and retain the best performers have found it necessary to consider how

dual-career couples affect the workforce Those in dual-dual-career relationships even have a Facebook

community devoted to their concerns.40The traditional scenario in which a woman takes a

supporting role in the development of her spouse’s career is being replaced by one of equal work

and shared responsibilities for spouses This arrangement requires a certain amount of ﬂexibility

on the part of the couple as well as the organizations for which they work Today such burning

issues as whose career takes precedence if a spouse is offered a transfer to another city and who

takes the ultimate responsibility for family concerns point to the fact that dual-career relationships

involve trade-offs and that it is difﬁcult to “have it all.”

How Dual-Career Couples Cope Studies of dual-career couples reveal that many cope

with their career difﬁculties in one of the following ways.41The couple might develop a

commit-ment to both spouses’ careers so that when a decision is made, the right of each spouse to pursue

a career is taken into consideration Both husband and wife are ﬂexible about handling home- and

job-oriented issues.They work out coping mechanisms, such as negotiating child care or

schedul-ing shared activities in advance, to better manage their work and their family responsibilities

Often, dual-career couples ﬁnd that they must limit their social lives and their volunteer

responsi-bilities in order to slow their lives to a manageable pace Finally, many couples ﬁnd that they must

take steps to consciously facilitate their mutual career advancement An organization that wants to

retain an employee may ﬁnd that it needs to assist that employee’s spouse in his or her career

development as well

TABLE 1.4 Seven Steps Management Can Take to Encourage the Advancement

of Women in Organizations

1 Make sure that women know the top three strategic goals for the company Knowing these

goals will help women focus their efforts on important issues As a result, they’ll be better able

to make a meaningful contribution to goal attainment and become more likely candidates for

promotion.

2 Make sure that women professionals in the organization have a worthwhile understanding of career

planning Having a vision for their careers and a career planning tool at their disposal will likely

enhance the advancement of women in an organization.

3 Teach women how to better manage their time The most effective managers are obsessed with

using their time in the most valuable way possible Helping women know where their time is being

invested and how to make a better investment should better ready them for promotion.

4 Assign outstanding mentors to women within the organization Women continually indicate that

mentors are important in readying themselves for promotion Assigning outstanding leaders in an

organization to women organization members should accelerate the process of readying women

for management positions.

5 Have career discussions with women who have potential as managers Career discussions involving

both managers and women with the potential to be managers should be held regularly Helping

women to continually focus on their careers and their potential for upward mobility should help them

to keep progressing toward management positions.

6 Provide opportunities for women organization members to make contributions to the community.

In today’s environment, managers must be aware of and contribute to the community in which the

organization exists Experience within the community should help ready women for management

positions.

7 Encourage women to take the initiative in obtaining management positions Women must be

proactive in building the skills necessary to become a manager or be promoted to the next level of

management They should set career goals, outline a plan to achieve those goals, and then move

forward with their plan.

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