FUNDAMENTALS

OF MANAGEMENT

SEVENTH CANADIAN EDITION

STEPHEN P. ROBBINS
San Diego State University

DAVID A. DECENZO
Coastal Carolina University

MARY COULTER
Missouri State University

IAN ANDERSON
Algonquin College

Toronto
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Library and Archives Canada Cataloguing in Publication

Fundamentals of management / Stephen P. Robbins . . . [et al.].

—7th Cdn. ed.

Includes bibliographical references and index.

ISBN 978-0-13-260692-9

1. Management—Textbooks. I. Robbins, Stephen P., 1943–

HD31.R5643 2013 658.4 C2012-905692-8

ISBN 978-0-13-260692-9
Brief Contents
Preface 00
Acknowledgments 00
About the Authors 00

Part One Introduction to Management and Organizations 2

Chapter 1: Introduction to Management and Organizations 2
Supplement 1: Small and Medium-Sized Enterprises and Organizations 22
Chapter 2: Environmental Constraints on Managers 32
video case incidents 64

Part Two Planning 66

Chapter 3: Planning and Strategic Management 66
Chapter 4: Decision Making 100
video case incidents 136

Part Three Organizing 138

Chapter 5: Organizational Structure and Design 138
Chapter 6: Communication and Information Technology 166
Chapter 7: Human Resource Management 194
video case incidents 230

Part Four Leading 232

Chapter 8: Leadership 232
Chapter 9: Motivating Employees 264
Chapter 10: Understanding Groups and Teams 294
video case incidents 322

Part Five Controlling 324

Chapter 11: Foundations of Control 324
Chapter 12: Managing Change 360
video case incidents 390

Endnotes 408
Glossary 410
Subject Index and Name and Organization Index 456
List of Canadian Companies, by Province 463
List of International Companies, by Country 465
Photo Credits 469

iii
Contents
Preface x
Acknowledgments xvii
About the Authors xviii

Part 1 Defining the Manager’s The Systems Approach 29

The Systems Approach and Managers 29
Terrain 2 The Contingency Approach and Managers 30
Summarizing Management Theory 31
Chapter 1 Introduction to Management
and Organizations 2 Chapter 2 Environmental Constraints
Who Are Managers? 4 on Managers 32
Types of Managers 4 The Manager: How Much Control? 34
What Is Management and What Do The External Environment 35
Managers Do? 6 The Specific Environment 36
Efficiency and Effectiveness 6 The General Environment 37
Management Functions 6
Understanding the Global Environment 40
Management Roles 8
Global Trade 41
Management Skills 10
The Cultural Environment 42
What Is an Organization? 11 Doing Business Globally 44
The Size of Organizations 12 Different Types of International Organizations 45
The Types of Organizations 12 How Organizations Go Global 46
Why Study Management? 13 How the Environment Affects Managers 48
The Universality of Management 14
Assessing Environmental Uncertainty 48
The Reality of Work 14 Review and Apply
Self-Employment 15 Summary of Learning Objectives 00 • Snapshot
Review and Apply Summary 00 • MyManagementLab Summary 00
Summary of Learning Objectives 00 • Snapshot • Interpret What You Have Read 00 • Apply What
Summary 00 • MyManagementLab You Have Learned 00 • Develop Your Management
Learning Resoucres 00 • Interpret What Skills 00 • Team Exercises 00 • Business Cases 00
You Have Read 00 • Apply What You Have Management Case Incident
Learned 00 • Develop Your Management
Continuing Case: Starbucks 60
Skills 00 • Team Exercises 00 • Business Cases 00
video case incidents
Supplement 1: History of Management Mountain Equipment Co-op 65
Trends 22
Historical Background of Management 23
Scientific Management 23 Part 2 Planning 66
Important Contributions 23
The Quantitative Approach 27 Chapter 3 Planning and Strategic
Important Contributions 27 Management 66
How Do Today’s Managers Use the Quantitative What Is Planning? 67
Approach? 27 Purposes of Planning 68
Organizational Behaviour 27 Planning and Performance 69
Early Advocates 27

v
vi | CONTENTS

How Do Managers Plan? 69 Step 6: Select an Alternative 105

Approaches to Establishing Goals 69 Step 7: Implement the Alternative 105
Steps in Goal Setting 71 Step 8: Evaluate Decision Effectiveness 106
Developing Plans 71 The Manager as Decision Maker 106
Criticisms of Planning 74 Making Decisions: Rationality, Bounded Rationality,
Organizational Strategy: Choosing a Niche 76 and Intuition 107
Step 1: Identify the Organization’s Current Mission, Types of Problems and Decisions 109
Goals, and Strategies 76 Decision-Making Conditions 111
Step 2: Do an Internal Analysis 77 Decision-Making Styles 112
Step 3: Do an External Analysis 79 Group Decision Making 114
Step 4: Formulate Strategies 80 Individual vs. Group Decision Making 115
Step 5: Implement Strategies 81 Decision-Making Biases and Errors 115
Step 6: Evaluate Results 81 Ethics, Corporate Social Responsibility,
Types of Organizational Strategies 81 and Decision Making 117
Corporate Strategy 82 Four Views of Ethics 118
Business Strategy 85 Improving Ethical Behaviour 119
Functional Strategy 90 Corporate Social Responsibility 120
Quality as a Competitive Advantage 90 Review and Apply
Summary of Learning Objectives 00 • Snapshot
How Can Benchmarking Help Promote
Summary 00 • MyManagementLab Summary 00
Quality? 90 • Interpret What You Have Read 00 • Apply What
What Is the ISO 9000 Series? 90 You Have Learned 00 • Develop Your Management
How Can Attaining Six Sigma Signify Quality? 91 Skills 00 • Team Exercises 00 • Business Cases 00
Review and Apply video case incidents
Summary of Learning Objectives 00 • Snapshot Joe Six-Pack and Four Canadian Entrepreneurs 136
Summary 00 • MyManagementLab Summary 00
Ben & Jerry’s in Canada 137
• Interpret What You Have Read 00 • Apply What
You Have Learned 00 • Develop Your Management
Skills 00 • Team Exercises 00 • Business Cases 00 Endnotes 408
Glossary 440
Chapter 4 Decision Making 100 Subject Index 451
The Decision-Making Process 101 Name and Organization Index 456
Step 1: Identify a Problem 102 List of Canadian Companies, by Province 463
Step 2: Identify Decision Criteria 102 List of International 00
Step 3: Allocate Weights to Criteria 103 Companies, by Country 00
Step 4: Develop Alternatives 104 Photo Credits 00
Step 5: Analyze Alternatives 104
Preface
Welcome to the seventh Canadian edition of Fundamentals of Management, by Stephen P.
Robbins, David A. DeCenzo, Mary Coulter, and Ian Anderson. This edition continues the
textbook’s fresh approach to management coverage through
● current and relevant examples
● updated theory
● a new pedagogically sound design
The philosophy behind this revision was to put additional emphasis on the idea that
“management is for everyone.” Students who are not managers, or who do not envision
themselves as managers, may not always see why studying management is important. We
use examples from a variety of settings to help students understand the relevance of studying
management to their day-to-day lives.

CHAPTER PEDAGOGICAL FEATURES

We have enhanced the
seventh Canadian edition PART 1 DEFINING THE MANAGER’S
Explain

CHAPTER Introduction
Tell
LEARNING
does study-

through a rich variety of 1.1

what makes
someone 1.4
ing manage-
ment make
a manager? a difference? OBJECTIVES

1 to Management
p.26 p.36
pedagogical features, in-
and
Describe
cluding the following: 1.3
what
characteristics
define an

Organizations
organization?
p.33
● Learning objectives
Define
to guide student 1.2
what is
management
and what do

learning begin each managers do?

p.28

chapter. These ques-

tions are repeated Heading if any
at the start of each Brian Scudamore was an 18-year-old university student in need
of money when he founded Vancouver-based 1-800-GOT-JUNK?
Think About It
What kinds of skills do managers
North America’s largest junk-removal service.1 “An inspira-
major chapter sec- tion came to me when I was in a McDonald’s drive-through in
Vancouver. I saw a beaten-up pickup truck with plywood panels
need? Put yourself in Brian Scuda-
more’s shoes. W hat kinds of leader-
ship skills would you need to manage

tion to reinforce the advertising junk pickup and hauling.”

At first, hauling junk was meant to get him through university.
franchises in four countries? Does
managing in a franchise organiza-
tion differ from managing in a large
However, by the third year of his studies, the business had grown corporation, a small business, or a

learning objective. enough that he dropped out of school to manage it full time.
Scudamore started his business in 1989 with a $700 pickup
government organization?

● An opening case truck, but now has over 300 franchises throughout Canada, the United
States, Australia, and the United Kingdom. He says he based his business
model on Federal Express, which offers on-time service and up-front rates.
starts the body of Drivers wear clean uniforms and drive shiny, clean trucks.
Scudamore learned about business by doing business. He also learned

the chapter and is that it is important for managers to involve employees in decision making:
“As soon as I stopped trying to be the CEO who’s got everything under con-
trol, there was an instant shift,” he says. “My managers started seeing me as
threaded throughout someone they could disagree with—and that makes all of us stronger.”

3
the chapter to help
students apply a
story to the concepts
they are learning.
● Think About It questions follow the opening case to give students a chance
to put themselves in the shoes of managers in various situations.
● Integrated questions (in the form of yellow notes) throughout the chapters ning, organizing, com-
management textbooks
help students relate management to their everyday lives ent functions: planning,

● Tips for Managers boxes provide “take-aways” from the chapter—things But you do not have to
lead, and control, so un-
that managers and would-be managers can start to put into action right now, et’s briefly define what

based on what they have learned in the chapter.

vii
viii | PREFACE

END-OF-CHAPTER APPLICATIONS SUPPLEMENT 1

systems based on output, they are using
The entire end-of-chapter section, Review and Apply, provides a wealth the principles of scientific management.
But current management practice is not TIPS MANAGERS FO
R
restricted to scientific management.

of exercises and applications. In fact, we can see ideas from the next
major approach—general administrative Fayol’s 14 Principles of Management
theory—being used as well. Q&A S1.2 ✹ Division of work. Specialization increases output by making employees
more efficient.

✹ Authority. Managers must be able to give orders, and authority gives them
● The Summary of Learning Objectives provides responses to the out- GENERAL
ADMINISTRATIVE
this right.
✹ Discipline. Employees must obey and respect the rules that govern the or-
THEORY ganization.

come-based questions identified at the beginning of each chapter. Another group of writers looked at the
subject of management but focused on
✹ Unity of command. Every employee should receive orders from only one su-
perior.

✹ Unity of direction. The organization should have a single plan of action to

Accompanying this feature is a Snapshot Summary box that pro- the entire organization. These general
administrative theorists developed
more general theories of what managers
guide managers and employees.

✹ Subordination of individual interests to the general interest. The inter-

do and what constitutes good manage- ests of any one employee or group of employees should not take prece-

vides a quick look at the organization of the chapter topics. ment practice. Let’s look at some impor-
tant contributions that grew out of this
dence over the interests of the organization as a whole.

✹ Remuneration. Employees must be paid a fair wage for their services.

perspective.
✹ Centralization. This term refers to the degree to which subordinates are in-
● The MyManagementLab Learning Resources table provides a Important Contributions
The two most prominent theorists
volved in decision making.

✹ Scalar chain. The line of authority from top management to the lowest ranks
is the scalar chain.

synopsis of all of the tools found on the MyLab. behind general administrative theory
were Henri Fayol and Max Weber. ✹ Order. People and materials should be in the right place at the right time.
✹ Equity. Managers should be kind and fair to their subordinates.
HENRI FAYOL
● Interpret What You Have Read allows students to review their un- We mention Fayol in Chapter 1 because
he described management as a universal
✹ Stability of tenure of personnel. Management should provide orderly
personnel planning and ensure that replacements are available to fill
vacancies.
set of functions that included planning,
derstanding of the chapter content. organizing, commanding, coordinating,
and controlling. Because his ideas were
✹ Initiative. Employees who are allowed to originate and carry out plans will
exert high levels of effort.

✹ Esprit de corps. Promoting team spirit will build harmony and unity within the
important, let’s look more closely at
organization.
● Analyze What You Have Read helps students see the application of what he had to say.6
Fayol wrote during the same time pe-
riod as Taylor. While Taylor was con-

theory to management situations. cerned with first-line managers and the

scientific method, Fayol’s attention was
directed at the activities of all managers.
tribution, and other typical business fundamental rules of management that
● Assess Your Skills gives students an opportunity to discover things about He wrote from personal experience be-
cause he was the managing director of a
functions. His belief that management could be taught in schools and applied
wasendeavours
an activity common to all human in all organizational situations.
large French coal-mining firm. in business, government, principles are shown in Tips These
for Man-
Fayol described the practice of man-
and even in the home led him to de- agers—Fayol’s 14 Principles of
themselves, their attitudes, and their personal strengths and weaknesses. agement as something distinct from
accounting, finance, production, dis-velop 14 principles of management— Management. Q&A S1.3

Each chapter includes one self-assessment exercise that students can fill
out and refers students to the MyManagementLab website where
therbligs managers do and what constitutes good manage- zational situations.
A classification scheme for labelling 17 basic hand ment practice.
bureaucracy
motions. principles of management A form of organization characterized by division of
general administrative theorists Fourteen fundamental rules of management that
labour, a clearly defined hierarchy, detailed rules
Writers who developed general theories of what could be taught in schools and applied in all organi - and regulations, and impersonal relationships.

they can access additional interactive self-assessment exercises. 27

● Practise What You Have Learned lets students apply material

to their daily lives as well as to real business situations related
to the chapter material, helping them see that planning, lead-
1 Review and Apply
ing, organizing, and controlling are useful in one’s day-to-day Summary and Implications
1.1 What makes someone a manager? Managers work (where the emphasis is on providing charity or serv-

life too. This feature includes several exercises, such as the with and through other people by coordinating em-
ployee work activity in order to accomplish organiza-
tional goals. Managers may have personal goals, but
ices rather than on making a profit).
Brian Scudamore owns his company and thus is ultimately
responsible to himself. Most managers report to someone else.

ones described below: management is not about personal achievement—it’s

about helping others achieve for the benefit of the or-
ganization as a whole.
1.4 Does studying management make a difference?
There are many reasons why students end up in man-
agement courses. Some of you are already manag-
● Dilemma presents an everyday scenario for students to
As we saw with Brian Scudamore, he sees his role as a cheer-
ers and are hoping to learn more about the subject.
leader to help everyone in the organization do a better job.
Some of you hope to be managers someday. And
1.2 What is management and what do managers do? some of you might not have ever thought about being

resolve using management tools. Management is coordinating work activities of peo-

ple so that they are done efficiently and effectively.
Efficiency means “doing things right” and getting
managers. Career aspirations are only one reason to
study management, however. Any organization you
encounter will have managers, and it is often useful
things done at the least cost. Effectiveness means “do- to understand their responsibilities, challenges, and
● Becoming a Manager provides suggestions for students ing the right things” and completing activities that
will help achieve the organization’s goals. To do their
experiences. Understanding management also helps us
improve organizations.
jobs, managers plan, organize, lead, and control. This

on activities and actions they can do right now to help means they set goals and plan how to achieve those
goals; they figure out what tasks need to be done, and
who should do them; they motivate individuals to
SNAPSHOT SUMMARY

Who Are Managers?

them prepare to become a manager. achieve goals, and communicate effectively with oth-
ers; and they put accountability measures into place to
make sure that goals are achieved efficiently and ef-
1.1 Types of Managers

fectively.
● Developing Your Diagnostic and Analytical Skills asks In Brian Scudamore’s role as CEO of 1-800-GOT-JUNK? he
sets the goals for the overall organization, working with the
1.2
What Is Management and What Do
Managers Do?
Efficiency and Effectiveness
various franchise partners. One of the challenges he faces is
Management Functions

students to apply chapter material to analyze a case. determining how rapidly his company can expand without
diluting its brand.
Management Roles
Management Skills
1.3 What characteristics define an organization? There

● Developing Your Interpersonal Skills emphasizes the is no single type of organization. Managers work in a
variety of organizations, both large and small. They 1.3
What Is an Organization?
The Size of Organizations
also work in a variety of industries, including manu- The Types of Organizations

importance of communication and interaction skills. facturing and the service sector. The organizations
they work for can be publicly held (meaning shares
are traded on the stock exchange and managers are 1.4
Why Study Management?
The Universality of Management
responsible to shareholders), privately held (meaning The Reality of Work
● Team Exercises gives students a chance to work together in shares are not available to the public), public sector
(where the government is the employer), or nonprofit
Self-Employment

groups to solve a management challenge and includes two

MyManagementLab For more resources, please visit www.pearsonglobaleditions.com/mymanagementlab

new exercises: 3BL: The Triple Bottom Line and Be the Con- 16 CHAPTER 1 | INTRODUCTION TO MANAGEMENT AND ORGANIZATIONS 17
sultant. Both of these exercises were added to the seventh
MyManagementLab Learning Resources
Canadian edition in order to increase the sustainability com-
ponent of the text and to give students more of a hands-on Resources
perspective into consulting. Explore and enhance your understanding of key
chapter topics through the following online resources:

● The Business Cases are decision-focused cases that ask students Student PowerPoints
Audio Summary of Chapter
to determine what they would do if they were in the situation Annotated Exhibits
CBC Videos for Part [X]

described. MySearchLab

Test your progress with Study Plan Pre-Tests and Post-Tests.The Pre-Tests help identify chapter concepts
you’ve understood, and guides you to study tools for the areas in which you might need a little more practice.The
Post-Tests confirm your mastery of the chapter concepts.

MYMANAGEMENTLAB Build on your knowledge and practice real-world applications

using the following online activities:

An access code to MyManagementLab is included with the textbook Interpret Analyze Practice

Fundamentals of Management. MyManagementLab is an online study Opening Case Activity: Opening Case Activity: Opening Case Activity:
What Does Planning Strategic Planning at Appraise Maple Leaf
tool for students and an online homework and assessment tool for facul- Involve?
Review and Apply:
Maple Leaf Foods
Review and Apply:
Foods’ Strategic
Situation

ty. For the seventh Canadian edition, MyManagementLab resources and Solutions to Interpret
section questions and
activities
Solutions to Analyze
section questions and
activities
Review and Apply:
Solutions to Practice
section questions and

features have been specifically tailored by two innovative and experi- Glossary Flashcards
Chapter Quiz
Management Skills
Management Mini-
activities
BizSkills Simulations:
Case for Chapter X [Insert simulation
enced Canadian contributors. This new author team has ensured that key ROLLS: [Insert relevant
questions and activities
title(s) here]
Decision Making
here] Simulations: [Insert
chapter concepts are supported by specific and easy-to-navigate online Self-Assessment Library
[Insert relevant
simulation title(s) here]

and instructor activities highlighted with icons in the textbook, MyMan- question sections here]

agementLab, and the Instructor’s Manual.

 PREFACE | ix

The new MyManagementLab resources and features are built on an instructor-driven

philosophy of presenting activities that challenge students on many different levels of
learning. Key MyManagementLab activities have been highlighted in the text using carefully
placed icons that link key concepts and examples to corresponding online study and assess-
ment tools. This new framework and set of activities support the established and popular
features of MyManagementLab, such as the Personalized Study Plan, Auto-Graded Tests
and Assignments, Pearson eText, Glossary Flashcards, Robbins OnLine Learning System
(R.O.L.L.S.), the Self-Assessment Library, and much more! Learn more about MyManage-
mentLab at www.pearsoned.ca/mymanagementlab.
For more details about the philosophy and vision for the new textbook, MyManagementLab,
and supplement integration strategy, see the MyManagementLab authors’ message below.

A Message from our

MyManagementLab Author Team
As instructors who have used Fundamentals of Management over the past several years in
our management courses, we are delighted to be involved in the development of the seventh
Canadian edition. The world of business affects our lives every day, and “management” will
affect the lives of all of us who work for a living. Our goal, therefore, has been to help deliver
a text, supplemental materials, and online learning package that will engage students in a
positive and direct manner as they build their fundamental knowledge of business in general
and management in particular. In addition to viewing the material from the student perspec-
tive, we also strove to facilitate the instructor’s use and application of the rich subject mate-
rial and resources to provide a dynamic, interactive, and enjoyable classroom experience.
As a preamble, we thought it would be helpful to outline the basic assumptions and phi-
losophy underlying our contributions to the Fundamentals of Management text, MyManage-
mentLab, and supplemental materials. First, we know that for most students this course is their
introduction to business and to management. For this reason, we approach the subject material
with a view to building the student’s knowledge one block at a time. Second, we believe that
once students learn the material, they should have an opportunity to “play” with it as they think
about it. The interactive nature of MyManagementLab offers the perfect environment within
which students may play and learn. Finally, we want to encourage students, as they master the
material, to reach into their new “tool kit” to problem solve, and in doing so, understand the
relevance of the concepts to both their personal, and eventually, working lives. Again, we are
ever mindful of providing the instructor with his or her own tool box for delivering the material
in an interesting and engaging manner.
To reinforce our building-block approach, our directives to Interpret, Analyze, and Prac-
tise, in alignment with the learning objectives, have been based upon the following pedagogy:
● Comprehension—Interpret What You Have Read
● Application—Analyze What You Have Read
● Synthesis/Evaluation—Practise What You Have Learned
To these ends we have
● Used the learning objectives as our guide in linking chapter content with the
MyManagementLab activities and in the preparation of related exercises and activities;
● Prepared activities to complement the in-text cases and exercises, and to encourage
students to interpret, analyze, and practise the subject material;
● Indicated which MyManagementLab content is best linked to the textbook by explicitly
referencing this material as part of our exercises and activities;
● Identified where and with what material we believe the content icons directing students
to Interpret, Analyze, and Practise should be associated in the chapter;
● Prepared directives, located within each chapter, in conjunction with the icons.
We sincerely hope that both student and instructor will find this text and the accompa-
nying supplemental materials to be a practical and enjoyable route to learning and using the
fundamental tools of business management.
Amanda Bickell (Kwantlen Polytechnic University) and Floyd Simpkins (St. Clair College)
x | PREFACE

Study on the Go
Featured at the end of each chapter, you will find a unique barcode providing access to
Study on the Go, an unprecedented mobile integration between text and online content.
Students link to Pearson’s unique Study on the Go content directly from their smartphones,
allowing them to study whenever and wherever they wish! Go to one of the sites below to
see how you can download an app to your smartphone for free. Once the app is installed,
your phone will scan the code and link to a website containing Pearson’s Study on the Go
content, including the popular study tools Glossary Flashcards, Audio Summaries, and
Quizzes, which can be accessed anytime.
ScanLife
http://get.scanlife.com/
NeoReader
http://get.neoreader.com/
QuickMark
http://www.quickmark.com.tw/

NEW TO THE SEVENTH CANADIAN EDITION

In addition to the new pedagogical features highlighted on previous pages, wewe
pages,
have introduced or revised other learning aids and made significant changes
hangestoto
content.

Case Program
This edition offers a variety of cases that can be used in or out of the class
class-
room.
● End of Chapter Cases
At the end of each chapter we offer brief, chapter-specific cases in th the
Practice What You Have Learned and Business Cases sections. Th seese
cases include a variety of open-ended questions for classroom discussi onn
or small-group assignment.
● End of Part Cases
For more dynamic case presentation, we have provided two video
cases at the end of each part, for a total
of 10 cases. The cases are based on high MANAGEMENT CASES
MANAGEMENT CASES

quality videos that range in length from 3 Management C ases

voluntary board ofofdirectors
voluntary board
orities. Volunteer board
orities. Volunteer
associations.
directorswhich
board members
YMCA Canada’s
associations. YMCA
which
members were
Canada’sPresident
oversawnational
nationalplans
ere nominated
nominated by
Presidentand
andCEO
plans and
by the
and pri-
the member
CEOwas accountable
accountable
spirits, minds and bodies, while building strong kids, strong
families and strong communities;
• assists people to participate
participate in
inthe
theYMCA
YMCAwhowhootherwise
strong

otherwise

to 18 minutes. They focus on several man-

to the board
boardforfornational
nationaloperations.
operations.TheThenational
nationaloffice
officehadhadonly
only2020 could not afford to be involved;
involved;
employees in 2005, reflecting the relative autonomy autonomy of the member • is seen asas aa valued
valuedcontributor
contributortotothe
thecommunity;
community;
associations
associations.
• has the capacity to influence the community relative to its its
As inin the
therest
restofofthe
theworld,
world,YMCAs
YMCAs in in
Canada
Canada served people
served people

agement issues within a part and include The case “The YMCA of London, Ontario” focuses on the need to THE Y MCA
engage in long-term strategic planning, while developing commu-
CA
The YoungMen’s en’sChristian
ChristianAssociation
Association(YMCA)
(YMCA)was an interna-
interna-
of all ages, backgrounds and
They dedicated
were dedicated
encouraging
to helping
and abilities
to helping
abilities and
peoplepeople
encouraging them to get involved in making their
and through
through all
attainattain
healthy
all stages
a healthy
stages of

their community
oflife
lifestylelifestyle
and and
community abet-
life.

bet-
strategic priorities;

goals;
priorities;
• has quality programs
programs that
that help
helpmembers
membersmeet
meettheir
theirpersonal
personal

a set of all new objectives-based ques-

nity relations. At the same time, the organization is facing a number ter place.
place. AsAs charities
charities,thetheYMCA
YMCAmember
member associations
associations relied on • demonstrates growth in participation over time; time;
of internal struggles because of the different business models of the tional federation ion of
of autonomous
autonomous not-for-profit
not-for-profit community
community service the support
support of oftheir
theircommunities,
communities,the theprivate
privatesector,
sector,governments
governments • offers a variety of programs that are accessible to the com-
dedicated to meeting the health and human
serviceservice com-
core service areas. What can management do to effectively address organizations dedicated to meeting the health and human and other
other agencies.
agencies. YMCA
YMCAfundraising
fundraisingcampaigns
campaignshelpedhelpedtotoprovide
provide
munity;
the internal and external concerns raised in this case? needs of men,, and women andinchildren
children in their communities.
their communities. The The better programs
programs and andfacilities,
facilities, well greater
as well accessibility
as greater and
accessibility and
YMCA was oundedfounded inin London,
London, England
England in in 1844,
1844, in response to financial assistance
assistance to toinclude
includeasasmany
manypeople possible. 55
peopleasaspossible. • has a culture of involving their members continually by en- en-

tions. Sandra Wellman (Seneca College) MC-1

the unhealthy social conditions resulting from the industrial
tion. Its founder,
er, George
GeorgeWilliams,
and prayer for life on the
Williams,hoped
thestreets
streetsfor
forthe
themany rural
industrial revolu-
hopedtotosubstitute
substitute Bible
ruralyoung
revolu-
Bible study
u men who
Earlier in 2005, YMCA Canada, in conjunction
associations,
associations, hadhaddeveloped
prised a wide rangeof ofperformance
conjunction with its member
developeda strong association
associationprofile,
profile,which
performance measures similar too a balanced
which m-
com-
couraging them to give their time, talent and treasure to the
YMCA
YMCA;
• as
hasidentified
identifiedkey keyaudiences
audiences and
and has
the

has a communications plan

plan
had moved to the cities for jobs. By 1851, there were 24 YMCAs scorecard. Implementation of this measurement tool was voluntary, that addresses each audience.

carefully selected the videos and wrote The YMCA of

in Great Britain and the first YMCA in North America had opened
in Montreal. Three years later, in 1854, there were 397 separate
YMCAs in seven nations, with a total of 30,400 members.2
although YMCA Canada encouraged individual associations to use
it to assess their performance and to compare their performance with The London Y had piloted an earlier version of the strong association
other associations. According to the YMCA Canada strong associa- profile and had already set annual targets for 2005 through to 2010
(see Exhibit 1). The London Y planned to implement these targets
London, Ontario From its start, the YMCA was unusual in that it crossed the rigid tion profile, a strong YMCA position profile is as follows:

the cases and questions to provide in- lines that separated the different churches and social classes in Eng-
land at the time. This openness was a trait that would lead eventually
to YMCAs including all men, women and children regardless of race,
• demonstrates that it is having an impact on individuals’
and measures as part of its 2005 strategic planning cycle.

As Shaun Elliott, chief executive officer, prepared for the last se- religion or nationality. In 2005, the YMCA was in more than 120 1 The YMCA of London Participation Targets

structors with engaging material for their

EXHIBIT
nior management planning session in 2005, he reflected on what the countries around the world and each association was independent and
YMCA of London (the London Y or the association) had achieved reflected its own unique social, political, economic and cultural situ- Traditional Organization New Organization
in the last four years. Since joining in 2001, Elliott had led the or- ation. YMCAs worldwide shared a commitment to growth in spirit,

students. The videos are available on the 1

ganization from a deficit of $230,000 to a projected surplus of al- mind and body, as well as a focus on community service, social
most $1 million by the end of this fiscal year. This turnaround had change, leadership development and a passion for youth.3
been accomplished through a careful balance of internal cost cutting A similar, although separate organization, the Young Women’s
Childcare
2005 2006 2007 2008 2009 2010 5 yr inc Avg inc

Infant 70 70 70 70 70 70 0% 0%
and growth through partnering and program expansion. Innovative Christian Association (YWCA) was founded in 1855 in England. 4

MyManagementLab and in DVD format partnerships with other organizations had allowed the London Y to It remained a separate organization; however, some YMCA and
expand its programs and facilities with minimal capital investment.
In addition to its now solid financial performance, the London Y communities.
YWCAs chose to affiliate in order to best serve the needs in their
Toddler
Preschool

School Age
140
608

316
140
672

316
140
736

316
140
832

316
140
928

316
140
1,024

316
0%
68%

0%
0%
14%

0%
was on track to exceed its targeted participation level of 46,500 in- Childcare Total

(ISBN 978-0-13-511763-7).
1,134 1,198 1,262 1,358 1,454 1,550 37% 7%
dividuals by the end of 2005. It was now time for Elliott to turn his
THE YMCA IN CANADA Camping and Educational Services
attention to achieving the next level of growth: participation levels
CQE 1,815 2,215 2,215 2,439 2,471 2,471 36% 7%
of 102,000 individuals by 2010. He knew that to achieve an increase The London Y was a member of YMCA Canada, the national body
of this magnitude, senior management would need to increase their of the 61 Canadian member associations. YMCA Canada’s role was Day Camp 5,350 5,457 5,566 5,677 5,791 5,907 10% 2%

Management Mini-Cases (MyMan- focus and its capacity and that he would need to spend more time on to foster and stimulate the development of strong member associa-
longer term strategic initiatives and community relations. He won- tions and advocate on their behalf regionally, nationally and inter-
Outdoor Education

Children’s Safety Village

5,800 6,960 9,048
12,000 13,500 14,000 14,000 14,000 14,000
9,953 10,948 12,043 108%
17%
22%
3%

● dered if this was possible given the current situation. nationally. YMCA Canada was a federation governed by a national
Community School Programs 1,630 1,880 2,130 2,380 2,630 2,880 77% 15%

agementLab) 1
2
3
All funds in Canadian dollars unless specified otherwise.
http://www.ymca.net/about_the_ymca/history_of_the_ymca.html. Accessed February 23, 2006.
Camping Total
Health Fitness and Recreation
CBY full fee
26,595 30,012 32,959 34,449 35,840 37,301

5,450 5,580 5,750 5,825 6,000 6,200

40%

14%
8%

3%
http://www.ymca.ca/eng_worldys.htm. Accessed Feb. 23, 2006.
4
http://www.ywca.org/site/pp.asp?c=djISI6PIKpG&b=281379. Accessed February 23, 2006. CBY assisted 2,210 2,330 2,450 2,500 2,525 2,650 20% 4%
CBY programs 4,200 4,580 4,975 5,750 6,875 8,050 92% 18%
Pat MacDonald prepared this case under the supervision of W. Glenn Rowe solely to provide material for class discussion. The authors do not
intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other BHY full fee 1,500 1,525 1,900 2,100 2,400 2,700 80% 16%

Hosted within MyManagementLab and identifying

information to protect confidentiality.
Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. This material is not covered
BHY assisted
BHY programs
300
1,600
305
7,565
380 420
9,100 10,195 11,480 13,125
480 540 80%

720%
16%

144%
under authorization from CanCopy or any reproduction rights organization.

tied to each chapter are a set of 12 Man-

ELY full fee 1,025 1,050 1,050 1,075 1,200
Copyright © 2006, Ivey Management Services Version: (A)2006-04-11.
One-time permission to reproduce granted by Ivey Management Services on October 30, 2009. 5 (continued)
http://www.ymca.ca/eng_abouty.htm. Accessed February 23, 2006.
34 35

agement Mini-Cases with associated

 PREFACE | xi

multiple-choice questions. These mini-cases are perfect for Chapter 5

assignments, as the students’ results feed directly into the
● Updated opening case on Maple Leaf Sports and
MyManagementLab Gradebook.
Entertainment
● NEW Multi-Chapter Cases (MyManagementLab) ● New EOC material (Be the Consultant, 3BL, Business
Cases, etc.)
Hosted within MyManagementLab and prepared by the text-
book author, Ian Anderson, are three NEW, medium-length, Chapter 6
multi-chapter cases for Parts 2 (Planning), 3 (Organizing) and ● Updated opening case on Facebook and social networking
4 (Leading). Assessments for these multi-chapter cases include
● New material on mental models
online multiple-choice and short-answer questions.
● New Tips for Mangers box on Communication with
Diverse Individuals
● New tips on Receiving Feedback added to Tips for Manag-
CHAPTER-BY-CHAPTER HIGHLIGHTS ers box on Giving Feedback
● Enhanced information on email and instant messaging,
Below, we highlight the new material that has been added to and new material on wikis and blogs
this edition. ● New Tips for Managers box on Getting Started with Social
Chapter 1 Media
● New material on social media strategies
● Updated opening case on 1-800-GOT-JUNK? ● New EOC material (Be the Consultant, 3BL, Business
● New end-of-chapter (EOC) material (Be the Consultant, Cases, etc.)
3BL, Business Cases, heavily revised Dilemma/Becoming a
Manager, etc.) Chapter 7

Supplement 1 ● New opening case on the Calgary Chamber of Voluntary

Organizations
● Brand new supplement on Small and Medium-Sized En- ● Material on organizational change (moved from Chapter 11),
terprises and Organizations demographic trends, and technology added to Human
Chapter 2 Resource Management Process
● New Exhibit 7-1 on the Human Resource Management
● New opening case on TransCanada and the Keystone Pipe- Process
line Project ● New material on job design added to Human Resource
● Heavily revised The General Environment, with all sub- Requirements
sections updated plus new material added on environmen- ● Reduced sub-section on Types of Selection Devices in Staff-
tal conditions ing the Organization (reviewers found that Exhibit 7-5
● New EOC material (Be the Consultant, 3BL, Business sufficiently explained these devices)
Cases, etc.) ● Updated Tips for Managers box, which now covers
Chapter 3 Behavioural and Situational Questions
● Updated and reorganized Compensation and Rewards—
● New opening case on Maple Leaf Foods Learning Objective #6 now focuses on how “Total Re-
● Criticisms of Planning moved to early in the chapter wards” motivate employees (this change was well received
● New material on forecasting, contingency planning, by reviewers)
scenario planning, and benchmarking ● New Learning Objective #7 (What can organizations do to
● New exhibit on SWOT Analysis and new material on maximize employee relations?)—corresponding chapter
PESTEL Analysis sections incorporate some material from the sixth edition
● Learning Objective #5 from the sixth Canadian edition section Current Issues in HRM as well as new and updated
(How can quality be a competitive advantage?) and its cor- topics on occupational health and safety, corporate wellness
responding chapter material on quality management, ISO initiatives, sexual harassment, and employee engagement
9000, and Six Sigma deleted ● New EOC material (Networking, 3BL, Business Cases,
● New EOC material (Be the Consultant, 3BL, Business Cases, revised Becoming a Manager, etc.)
revised Dilemma/Becoming a Manager, etc.) ● Note: a primary goals for this chapter was to make it more
Chapter 4 concise and more relevant to students taking an introductory
overview of management (versus an introductory HR course)
● New opening case on Nurse Next Door
Chapter 8
● New material on bounded decision making
● New material on employee involvement in decision making ● New material on the difference between managers and
● New EOC material (Be the Consultant, 3BL, Business leaders
Cases, etc.) ● New material on female leaders
xii | PREFACE

● New Tips for Leaders material

● New EOC material (Networking, 3BL, Business Cases,
ACKNOWLEDGMENTS
revised Becoming a Manager, etc.) A number of people have worked hard to update and enliven this
seventh Canadian edition of Fundamentals of Management. Alex-
Chapter 9 andra Dyer was developmental editor on this project. Her under-
standing, patience, helpfulness, support, and organizational skills
● New opening case on Yellow House Events made working on this textbook enjoyable and enriching. She also
● New material on four-drive theory (replaces Job Charac- played a key role in handling many aspects of the editorial work
teristics Model) needed during the production process. Nick Durie, acquisitions
● New EOC material (Networking, 3BL, Business Cases, editor, was very supportive of finding new directions for the text-
revised Becoming a Manager, etc.) book. Kathleen McGill, sponsoring editor, continues to be easy to
work with on various projects and is always in the author’s corner.
Chapter 10 I’d also like to thank project manager Marissa Lok, project
● New opening case on Great Little Box Company editor Rashmi Tickyani, and copy editor Carolyn Zapf, as well
● New material on what makes up a team and teamwork as the many others—proofreaders, designers, permissions
● New material on turning groups into teams researchers, marketing and sales representatives—who have
● New EOC material (Networking, 3BL, Business Cases, all contributed to the transformation of my manuscript into this
revised Becoming a Manager, etc.) textbook and seen it delivered into your hands. The Pearson
Canada sales team is an exceptional group, and I know they will
do everything possible to make the book successful. I continue
Chapter 11 to appreciate and value their support and interaction, particu-
larly that of Molly Armstrong, my local sales representative.
● New opening case on Canadian Curling Association
Thank you to Floyd Simpkins and Amanda Bickell for
● New EOC material (Networking, 3BL, Business Cases, developing new features and resources in MyManagementLab
revised Becoming a Manager, etc.) and making it more integrated with the textbook in this edition,
and to Sandra Wellman for selecting and writing the new video
Chapter 12 cases. Finally, I would like to thank the reviewers of this text-
● New opening case on BP book for their detailed and helpful comments:
● New Learning Objective #4 and corresponding section
on Common Approaches to Organizational Change J. J. Collins, St. Clair College
● New EOC material (Be the Consultant, 3BL, revised Ronald Gallagher, New Brunswick Community College
Becoming a Manager, etc.) Cheryl Dowell, Algonquin College
Michael Khan, University of Toronto–Mississauga
Tim Richardson, Seneca College
SUPPLEMENTS Allan MacKenzie, Wilfrid Laurier University
Yan Yabar, Red Deer College
For instructors, we have created an outstanding supplements
Larry Chung, Camosun College
package, conveniently available online through MyManage-
Halinka Szwender, Camosun College
mentLab in the special instructor area and downloadable from
Al Morrison, Camosun College
our product catalogue at www.pearsoncanada.ca.
Karen Stephens, Camosun College
● Instructor’s Manual (includes video teaching notes, de- Troy Dunning, Camosun College
tailed lecture outlines, and suggestions on how to integrate Tim Kemp, Camosun College
the MyManagementLab material into your course), pre- Nancy Nowlan, Capilano University
pared by Floyd Simpkins of St. Clair College and Amanda Hana Carbert, CMA-BC
Bickell of Kwantlen Polytechnic University Robert Willis, Vancouver Island University
● PowerPoint Slides, prepared by Floyd Simpkins of St. Michael Pearl, Seneca College
Clair College and Amanda Bickell of Kwantlen Polytech- Foster Stewart, SAIT
nic University Horatio Morgan, Ryerson University
● MyTest, prepared by Floyd Simpkins of St. Clair College Michael Hobeck, Nova Scotia Community College
and Amanda Bickell of Kwantlen Polytechnic University
● Video cases (available in DVD format (ISBN 978-0-13- I dedicate this book to my two sons, Shaun and Isaac.
511763-7) and on the MyManagementLab), prepared by Ian Anderson
Sandra Wellman of Seneca College August 2012
About the Authors
STEPHEN P. ROBBINS received his Ph.D. from the University of Arizona. He previ-
ously worked for the Shell Oil Company and Reynolds Metals Company and has taught at
the University of Nebraska at Omaha, Concordia University in Montreal, the University of
Baltimore, Southern Illinois University at Edwardsville, and San Diego State University.
He is currently professor emeritus in management at San Diego State.
Dr. Robbins’s research interests have focused on conflict, power, and politics in organ-
izations, behavioral decision making, and the development of effective interpersonal skills.
His articles on these and other topics have appeared in such journals as Business Horizons,
the California Management Review, Business and Economic Perspectives, International
Management, Management Review, Canadian Personnel and Industrial Relations, and The
Journal of Management Education.
Dr. Robbins is the world’s best-selling textbook author in the areas of management
and organizational behavior. His books have sold more than 5 million copies and have been
translated into 20 languages. His books are currently used at more than 1,500 U.S. colleges
and universities, as well as hundreds of schools throughout Canada, Latin America, Aus-
tralia, New Zealand, Asia, and Europe.
Dr. Robbins also participates in masters track competition. Since turning 50 in 1993,
he’s won 23 national championships and 14 world titles. He was inducted into the U.S.
Masters Track & Field Hall of Fame in 2005 and is currently the world record holder at
100m and 200m for men 65 and over.

DAVID A. DECENZO (Ph.D., West Virginia University) is president of Coastal Carolina

University in Conway, South Carolina. In his capacity as president, Dr. DeCenzo is respon-
sible for the overall vision and leadership of the university. He has been at Coastal since
2002 when he took over leadership of the E. Craig Wall Sr. College of Business. Since then,
the college established an economics major and developed an MBA program. During that
period, student enrollment and faculty positions nearly doubled. The college also estab-
lished significant internship opportunities locally, nationally, and internationally in major
Fortune 100 companies. As provost, Dr. DeCenzo worked with faculty leadership to pass
a revised general education core curriculum as well as institute a minimum salary level for
the university’s faculty members. Before joining the Coastal faculty in 2002, he served as
director of partnership development in the College of Business and Economics at Towson
University in Maryland. He is an experienced industry consultant, corporate trainer, and
public speaker. Dr. DeCenzo is the author of numerous textbooks that are used widely at
colleges and universities throughout the United States and the world.
Dr. DeCenzo and his wife, Terri, have four children and reside in Pawleys Island,
South Carolina.

MARY COULTER (Ph.D., University of Arkansas) held different jobs including high
school teacher, legal assistant, and city government program planner before completing her
graduate work. She has taught at Drury University, the University of Arkansas, Trinity Uni-
versity, and Missouri State University. She is currently professor emeritus of management
at Missouri State University. Dr. Coulter’s research interests were focused on competitive
strategies for not-for-profit arts organizations and the use of new media in the educational
process. Her research on these and other topics has appeared in such journals as Interna-
tional Journal of Business Disciplines, Journal of Business Strategies, Journal of Business
Research, Journal of Nonprofit and Public Sector Marketing, and Case Research Journal.
In additional to Fundamentals of Management, Dr. Coulter has published other books with

xiii
xiv | ABOUT THE AUTHORS

Prentice Hall including Management (with Stephen P. Robbins), Strategic Management in

Action, and Entrepreneurship in Action.
When she’s not busy writing, Dr. Coulter enjoys puttering around in her flower gar-
dens, trying new recipes, reading all different types of books, and enjoying many different
activities with Ron, Sarah and James, Katie and Matt, and especially with her new grand-
daughter, Brooklynn. Love ya’my sweet baby girl!

IAN ANDERSON received his Bachelor of Business Administration from the University
of Regina, including studies at the University of Ottawa. Before commencing his college
teaching career, he was the Director of HR for a large Ottawa-based IT company. Ian
is also an HR and Management consultant with Association Management, Consulting &
Educational Services (AMCES) and has been actively consulting for more than 25 years.
At Algonquin College, Ian is a Professor and Coordinator in Marketing and Management
Studies, and coaches students in business case and college marketing competitions.
In Ian’s “other life,” he is a Sommelier and works regularly with Groovy Grapes pro-
viding tutored tastings and wine and scotch education. Ian’s parents, Bob and Katharine,
are from the Niagara area, and Ian has visited wine regions in Australia, New Zealand,
Canada, the United States, Austria, and Germany. Ian has coached hockey and soccer for
more than 20 years.