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MBA-111 (General Management) Text Book - 1

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1 Chapter 1

Par t

The World of Innovative

Management
Manager Achievement After studying this chapter, you should be able to:
Chapter Outline

Learning Outcomes

Management Competencies 1. Describe five management competencies that are becoming crucial
for Today’s World in today’s fast-paced and rapidly changing world.

The Basic Functions 2. Define the four management functions and the type of management
of Management activity associated with each.
Planning Organizing 3. Explain the difference between efficiency and effectiveness and their
Leading Controlling importance for organizational performance.

Organizational Performance 4. Describe technical, human, and conceptual skills and their relevance
for managers.
Management Skills
Technical Skills Human Skills 5. Describe management types and the horizontal and vertical differ-
Conceptual Skills When Skills Fail ences between them.
6. Summarize the personal challenges involved in becoming a new
Management Types
manager.
Vertical Differences
Horizontal Differences 7. Define ten roles that managers perform in organizations.

What Is a Manager’s Job Really Like? 8. Explain the unique characteristics of the manager’s role in small
Making the Leap: Becoming a businesses and nonprofit organizations.
New Manager
Manager Activities
Manager Roles
New Manager Self-Test:
Managing Your Time
Managing in Small Businesses
and Nonprofit Organizations

Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
3
1

Introduction
Manager Achievement
Welcome to the world of management. Are you ready for it? This questionnaire will help you see whether your priorities
align with the demands placed on today’s managers.

Instructions: Rate each of the following items based on your orientation toward personal achievement. Read
each item and, based on how you feel right now, check either Mostly True or Mostly False. 2

Environment
Mostly True Mostly False

1. I enjoy the feeling I get from mastering a new skill. __________ __________
2. Working alone is typically better than working in a group. __________ __________
3. I like the feeling I get from winning. __________ __________
4. I like to develop my skills to a high level. __________ __________
5. I rarely depend on anyone else to get things done. __________ __________ 3
6. I am frequently the most valuable contributor to a team. __________ __________

Planning
7. I like competitive situations. __________ __________
8. To get ahead, it is important to be viewed as a winner. __________ __________

Scoring and Interpretation: Give yourself one point for each Mostly True answer. In this case, a low
score is better. A high score means a focus on personal achievement separate from others, which
is ideal for a specialist or individual contributor. However, a manager is a generalist who gets things
done through other people. Spending time building relationships is key. A desire to be an individual
winner may cause you to compete with your people rather than develop their skills. You would not 4
succeed as a lone achiever who does not facilitate and coordinate others, which is the primary job of

rganizing
a manager. If you checked 3 or fewer as Mostly True, your basic orientation is good. If you scored 6
or higher, your focus may be on being an individual winner. You will want to shift your perspective to
become an excellent manager.

OOrganizing
M
ost people think of Jon Bon Jovi as an aging rock star. What many don’t realize
is that Bon Jovi is still one of the world’s top-selling bands (in terms of both
5
record sales and concert touring) because their lead singer is also a consummate

Le a d i n g
manager. “In the late 1980s,” one music historian wrote, “it seemed inconceivable that [the
group] would last five years.” In 2011, Jon Bon Jovi was ranked No. 2 on Forbes’s list of the
year’s highest-paid musicians.1 As the group prepared for the launch of its most recent
tour in February 2013, Jon Bon Jovi was hidden away in the arena at the Mohegan Sun
casino in Uncasville, Connecticut, for days, overseeing nearly 100 people organized into
various teams such as lighting, sound, and video. It is an activity that he performs again and
again when the band is touring, managing a tightly coordinated operation similar to set-
ting up or readjusting a production line for a manufacturing business. Yet Bon Jovi is also 6
performing other management activities throughout the year—planning and setting goals
Controlling

for the future, organizing tasks and assigning responsibilities, influencing and motivating
band members and others, monitoring operations and finances, and networking inside and
outside the organization (in perhaps the most prestigious example, he was appointed to
President Barack Obama’s White House Council for Community Solutions in 2010).
Efficiency and effectiveness are key words in his vocabulary. “Jon is a businessman,” said

former co-manager David Munns. “He knows how to have a great-quality show, but he
also knows how to be efficient with money.”2
Jon Bon Jovi was smart enough to hire good people who could handle both production
activities and the day-to-day minutia that go along with a global music business. However,
it took several years to develop and hone his management skills. He assumed top manage-
ment responsibilities for the band in 1992, about 10 years after founding it, because he had
a vision that his professional managers weren’t supporting. “Most of my peers wanted to be
on the cover of Circus [a magazine devoted to rock music that was published from 1966 to
2006],” he said. “I wanted to be on the cover of Time.”3
One particular surprise for many people when they first step into a management role
is that they are much less in control of things than they expected to be. The nature of
management is to motivate and coordinate others to cope with diverse and far-reaching
challenges. Many new managers expect to have power, to be in control, and to be personally
responsible for departmental outcomes. However, managers depend on subordinates more
than the reverse, and they are evaluated on the work of other people rather than on their
own achievements. Managers set up the systems and conditions that help other people
perform well.
In the past, many managers exercised tight control over employees. But the field of
management is undergoing a revolution that asks managers to do more with less, to
engage employees’ hearts and minds as well as their physical energy, to see change rather
than stability as natural, and to inspire vision and cultural values that allow people to
create a truly collaborative and productive workplace. This textbook introduces and
explains the process of management and the changing ways of thinking about the world
that are critical for managers. By reviewing the actions of some successful and not-so-
successful managers, you will learn the fundamentals of management. By the end of this
chapter, you will recognize some of the skills that managers use to keep organizations on
track, and you will begin to understand how managers can achieve astonishing results
through people. By the end of this book, you will understand the fundamental manage-
ment skills for planning, organizing, leading, and controlling a department or an entire
organization.

Management Competencies
for Today’s World
Management is the attainment of organizational goals in an effective and efficient manner
through planning, organizing, leading, and controlling organizational resources, as Jon Bon
Jovi does for his rock band, and as he did as co-owner of the Phila-
“I was once a command- delphia Soul indoor football team in the Arena Football League. You
will learn more about these four basic management functions later
and-control guy, but the in this chapter.
environment’s different There are certain elements of management that are timeless,
but environmental shifts also influence the practice of management.
today. I think now it’s a In recent years, rapid environmental changes have caused a funda-
mental transformation in what is required of effective managers.
question of making people Technological advances such as social media and mobile apps, the
feel they’re making a rise of virtual work, global market forces, the growing threat of
cybercrime, and shifting employee and customer expectations have
contribution.” led to a decline in organizational hierarchies and more empowered
—Joseph J. Plumeri, Chairman and CEO of workers, which calls for a new approach to management that may be
Willis Group Holdings

Introduction
From Traditional Approach To New Competencies

Management
Principle
Overseeing Work From Controller To Enabler
T

From supervising
Accomplishing Tasks T
To leading teams
individuals

From conflict and T collaboration, including use

To
Managing Relationships
competition o social media
of

To
T empowering, sometimes
Leading From autocratic
bossless

From maintaining
Designing T
To mobilizing for change
stability

quite different from managing in the past.4 Exhibit 1.1 shows the shift from the traditional
management approach to the new management competencies that are essential in today’s
environment.
Instead of being a controller, today’s effective manager is an enabler who helps people
do and be their best. Managers help people get what they need, remove obstacles, pro-
vide learning opportunities, and offer feedback, coaching, and career guidance. Instead
of “management by keeping tabs,” they employ an empowering leadership style. Much
work is done in teams rather than by individuals, so team leadership skills are crucial.
People in many organizations work at scattered locations, so managers can’t monitor
behavior continually. Some organizations are even experimenting with a bossless design
that turns management authority and responsibility completely over to employees.
Managing relationships based on authentic conversation and collaboration is essential
for successful outcomes. Social media is a growing tool for managers to enhance
communication and collaboration in support of empowered or bossless work
environments. In addition, managers sometimes coordinate the work of people
who aren’t under their direct control, such as those in partner organizations, and Read the “Ethical
they sometimes even work with competitors. They have to find common ground Dilemma” on
among people who might have disparate views and agendas and align them to go pages 32–33, which
in the same direction. pertains to managing
Also, as shown in Exhibit 1.1, today’s best managers are “future-facing.” That in the new workplace.
is, they design the organization and culture to anticipate threats and opportunities Think about what
from the environment, challenge the status quo, and promote creativity, learning, you would do in this
adaptation, and innovation. Industries, technologies, economies, governments, situation and why,
and societies are in constant flux, and managers are responsible for helping their so you can begin
organizations navigate through the unpredictable with flexibility and innovation.5 understanding how
Today’s world is constantly changing, but “the more unpredictable the environ- you will solve thorny
ment, the greater the opportunity—if [managers] have the . . . skills to capitalize management problems.
on it.”6

One manager who exemplifies the new management skills and competencies is Vineet
Nayar of India’s HCL Technologies (HCL), with 80,000 employees and operations in
more than 25 countries.

Innovative HCL Technologies is a leading global information technology (IT) services and software
Way development company and India’s fourth-largest IT services exporter. When Vineet Nayar
Vineet Nayar, HCL (currently vice chairman and joint managing director) took over as CEO in 2005, HCL was
Technologies LLC a traditional, hierarchical, command-and-control workplace, but Nayar shifted the company’s
mindset to treat its employees like customers. He is always on the lookout to upgrade man-
agement competencies to serve employees and help them do their jobs better. When HCL
needed to cut expenses by $100 million due to the global recession, managers asked the
employees to come up with ideas for cutting costs without issuing massive layoffs.
Nayar reorganized the whole company on the principle of “employees first, customers
second” (EFCS). He had to start by building trust, so he decided to share financial information
with everyone in the company. Then he took a bold step: He created an open online forum
where employees could post questions and leaders would answer them. This could expose
weaknesses and problems that anyone—including outside customers and competitors—
could see. Indeed, it did. “It was clogged with complaints,” Nayar says. “It hurt.” But interesting
things began to happen, too. People were overjoyed that leaders were willing to acknowledge
the problems. Some employees took this a step further and felt empowered to offer solu-
tions. The site ultimately was the beginning of a transfer of the power and responsibility for
solving problems from top executives to employees themselves. In the new HCL, the job of
managers became to serve the employees.7

As Nayar learned, applying new management competencies can really pay off. Guided
by the EFCS philosophy, HCL’s revenues have grown by over 3.6 times, and net income
has increased by 91 percent since 2005. But the shift to a new way of managing isn’t easy
for traditional managers who are accustomed to being “in charge,” making all the decisions,
and knowing where their subordinates are and what they’re doing at every moment. Even
more changes and challenges are on the horizon for organizations and managers. This is
an exciting and challenging time to be entering the field of management. Throughout this
book, you will learn much more about the new workplace, about the new and dynamic
roles that managers are playing in the twenty-first century, and about how you can be an
effective manager in a complex, ever-changing world.

Remember This
• Managers get things done by coordinating and motivat- • Traditional management competencies could include a
ing other people. command-and-control leadership style, a focus on indi-
• Management is often a different experience from what vidual tasks, and standardizing procedures to maintain
people expect. stability.
• Management is defined as the attainment of organiza- • New management competencies include the ability to be
tional goals in an effective and efficient manner through an enabler rather than a controller, using an empowering
planning, organizing, leading, and controlling organiza- leadership style, encouraging collaboration, leading
tional resources. teams, and mobilizing for change and innovation.
• Turbulent environmental forces have caused a signifi- • Vineet Nayar, CEO of India’s HCL, illustrates many of
cant shift in the competencies required for effective the new management competencies.
managers.

Introduction
of Management “Good management is the
Every day, managers solve difficult problems, turn organizations art of making problems
around, and achieve astonishing performances. To be successful,
every organization needs good managers. The famed management so interesting and their
theorist Peter Drucker (1909–2005), often credited with creating solutions so constructive
the modern study of management, summed up the job of the man-
ager by specifying five tasks, as outlined in Exhibit 1.2.8 In essence, that everyone wants
managers set goals, organize activities, motivate and communicate,
measure performance, and develop people. These five manager ac-
to get to work and deal
tivities apply not only to top executives such as Mark Zuckerberg with them.”
at Facebook, Alan Mulally at Ford Motor Company, and Ursula
—Paul Hawken, environmentalist,
Burns at Xerox, but also to the manager of a restaurant in your
entrepreneur, and author of
hometown, the leader of an airport security team, a supervisor at
Natural Capitalism
a Web hosting service, or the director of sales and marketing for a
local business.
The activities outlined in Exhibit 1.2 fall into four fundamental management func-
tions: planning (setting goals and deciding activities), organizing (organizing activities and
people), leading (motivating, communicating with, and developing people), and control-
ling (establishing targets and measuring performance). Depending on their job situation,
managers perform numerous and varied tasks, but they all can be categorized within these
four primary functions.

exhibit 1.2 What Do Managers Do?

1. Set Objectives
Establish
ish goals for the
group and decide what
must be done to
achievee them

5. Develop Peopleople
Recognize the he value of
2. Organize
employees and develop
Divide work into
this critical organizational
g
manageable activities
asset
and select people to
accomplish tasks

4. Measure 3. Motivate and

Set targets and Communicate
standards; appraise Create teamwork via
performance decisions on pay,
promotions, etc., and
through communication

SOURCE: Based on “What Do Managers Do?” The Wall Street Journal Online, http://guides.wsj.com/management/developing-a
-leadership-style/what-do-managers-do/ (accessed August 11, 2010), article adapted from Alan Murray, The Wall Street Journal
Essential Guide to Management (New York: Harper Business, 2010).

exhibit 1.3 The Process of Management

Management Functions

Planning
Select goals and
ways to attain them

Resources Performance
Human Controlling Organizing Attain goals
Financial Monitor activities Assign Products
Raw materials and make corrections responsibility for task Services
Technological accomplishment Efficiency
Information Effectiveness

Leading
Use influence to
motivate employees

Exhibit 1.3 illustrates the process of how managers use resources to attain organi-
zational goals through the functions of planning, organizing, leading, and controlling.
Chapters of this book are devoted to the multiple activities and skills associated with each
function, as well as to the environment, global competitiveness, and ethics that influence
how managers perform these functions.

Planning
Planning means identifying goals for future organizational performance and deciding on
the tasks and use of resources needed to attain them. In other words, managerial planning
defines where the organization wants to be in the future and how to get there. A good ex-
ample of planning comes from General Electric (GE), where managers have sold divisions
such as plastics, insurance, and media to focus company resources on four key business
areas: energy, aircraft engines, health care, and financial services. GE used to relocate senior
executives every few years to different divisions so that they developed a broad, general
expertise. In line with recent strategic refocusing, the company now keeps people in their
business units longer so they can gain a deeper understanding of the products and custom-
ers within each of the four core businesses.9

Organizing
Organizing typically follows planning and reflects how the organization tries to accomplish
the plan. Organizing involves assigning tasks, grouping tasks into departments, delegating
authority, and allocating resources across the organization. In recent years, organizations
as diverse as IBM, the Catholic Church, Estée Lauder, and the Federal Bureau of Inves-
tigation (FBI) have undergone structural reorganization to accommodate their changing
plans. Organizing was a key task for Oprah Winfrey as she tried to turn around her strug-
gling start-up cable network, OWN. She took over as CEO of the company, repositioned
some executives and hired new ones, and cut jobs to reduce costs and streamline the com-
pany. Along with programming changes, such as the comedy series Tyler Perry’s For Better
or Worse and the drama series The Haves and the Have Nots, structural changes brought
a lean, entrepreneurial approach that helped put OWN on solid ground. Winfrey said
“I prided myself on leanness,” referring to the early days of her TV talk show. “The opposite
was done here.”10

Introduction
Leading is the use of influence to moti-
vate employees to achieve organizational
goals. Leading means creating a shared
culture and values, communicating goals
to people throughout the organization,
and infusing employees with the desire
to perform at a high level. As CEO of

Michael Weber/imageBROKER / Alamy

Chrysler Group, Sergio Marchionne
spends about two weeks a month in
Michigan meeting with executive teams
from sales, marketing, and industrial
operations to talk about his plans and
motivate people to accomplish ambitious
goals. Marchionne, who spends half his
time in Italy running Fiat, rejected the
15th-floor executive suite at Chrysler John Stonecipher finds that as the president and CEO of Guidance Aviation,
headquarters so he could provide more a high-altitude flight school in Prescott, Arizona, his job involves all four
management functions. Once he’s charted the course for the operation
hands-on leadership from an office close (planning) and put all the necessary policies, procedures, and structural
to the engineering center.11 One doesn’t mechanisms in place (organizing), he supports and encourages his
have to be a top manager of a big cor- 50+ employees (leading) and makes sure that nothing falls through the
poration to be an exceptional leader. cracks (controlling). Thanks to his strengths in all of these areas, the
U.S. Small Business Administration named Stonecipher a National Small
Many managers working quietly in both Business Person of the Year in 2013.
large and small organizations around the
world provide strong leadership within
departments, teams, nonprofit organiza-
tions, and small businesses.

Controlling
Controlling is the fourth function in the management process. Controlling means moni-
toring employees’ activities, determining whether the organization is moving toward its
goals, and making corrections as necessary. One trend in recent years is for companies to
place less emphasis on top-down control and more emphasis on training employees to
monitor and correct themselves. However, the ultimate responsibility for control still rests
with managers. Michael Corbat, the new CEO of Citigroup, for example, is taking a new
approach to control at the giant company, which was kept afloat during the financial crisis
with $45 billion in government aid. “You are what you measure,” Corbat says, and he is
implementing new tools to track the performance of individual managers as a way to bring
greater accountability and discipline.12
The U.S. Secret Service recently became embroiled in a public relations nightmare,
partly due to a breakdown of managerial control. When news broke that members of the
Hot
security team sent to prepare for President Obama’s visit to Cartagena, Colombia, en-
gaged in a night of heavy drinking, visited strip clubs, and brought prostitutes to their hotel Topic
rooms, there was a public and legislative uproar. Several agents were fired, and director
Mark Sullivan and other managers were called before a Senate subcommittee to explain
the breakdown in control. The widespread investigation also brought other allegations of
agent misconduct and “morally repugnant behavior” to light. One response from managers
has been to create stricter rules of conduct, rules that apply even when agents are off duty.13

Remember This
• Managers perform a wide variety of activities that fall • Leading means using influence to motivate employees
within four primary management functions. to achieve the organization’s goals.
• Planning is the management function concerned with • Controlling is concerned with monitoring employees’
defining goals for future performance and how to attain activities, keeping the organization on track toward
them. meeting its goals and making corrections as necessary.
• Organizing involves assigning tasks, grouping tasks • The U.S. Secret Service agency prostitution scandal can
into departments, and allocating resources. be traced partly to a breakdown of management control.

Organizational Performance
The definition of management also encompasses the idea of attaining organizational goals
in an efficient and effective manner. Management is so important because organizations are
so important. In an industrialized society where complex technologies dominate, organiza-
tions bring together knowledge, people, and raw materials to perform tasks that no individ-
ual could do alone. Without organizations, how could technology be provided that enables
us to share information around the world in an instant; electricity be produced from huge
dams and nuclear power plants; and millions of songs, videos, and games be available for
our entertainment at any time and place? Organizations pervade our society, and manag-
ers are responsible for seeing that resources are used wisely to attain organizational goals.

Green Power
Local Impact
Logistics giant Deutsche Post DHL Group has 38 loca- protection), “Go Help” (disaster relief), and “Go
tions in Thailand, where Buddhist teachings about Teach” (education). Each pillar in this corporate plan
caring for one another lend themselves to helping is indicative of broad goals—such as a 30 percent
and teaching the local population. Deutsche Post reduction in CO2 emissions by 2020—that are cus-
DHL Group plans for corporate social responsibility tomized to fit local needs and cultures. For exam-
with sustainability at the local level. By pinpoint- ple, DHL Thailand asks potential business partners
ing local needs and issues, DHL planned site-specific to buy into the company’s “Go Green” philosophy,
strategies, such as efficient lighting and the reduc- reflecting a giant leap in sustainability at the local
tion of air conditioner demand in Thailand’s hot level.
climate, and the installation of global positioning
satellite (GPS) systems to minimize fuel consumption. Source: Based on David Ferguson, “CSR in Asian Logistics: Operationalisation
DHL’s commitment to social responsibility is within DHL (Thailand),” Journal of Management Development 30, 10 (2011):
reflected in its three pillars: “Go Green” (climate 985–999.

Our formal definition of an organization is a social entity that is goal-directed and

deliberately structured. Social entity means being made up of two or more people. Goal
directed means designed to achieve some outcome, such as make a profit (Target Stores),
win pay increases for members (United Food & Commercial Workers), meet spiritual
needs (Lutheran Church), or provide social satisfaction (college sorority Alpha Delta Pi).

Introduction
mance is assigned to organization members. This definition applies to all organizations,
including both profit and nonprofit ones. Small, offbeat, and nonprofit organizations are
more numerous than large, visible corporations—and just as important to society.
Based on our definition of management, the manager’s responsibility is to coordinate
resources in an effective and efficient manner to accomplish the organization’s goals. Orga-
nizational effectiveness is the degree to which the organization achieves a stated goal, or
succeeds in accomplishing what it tries to do. Organizational effectiveness means providing
a product or service that customers value. Organizational efficiency refers to the amount
of resources used to achieve an organizational goal. It is based on how much raw material,
money, and people are necessary for producing a given volume of output. Efficiency can be
defined as the amount of resources used to produce a product or service. Efficiency and
effectiveness can both be high in the same organization.
Many managers are using mobile apps to increase efficiency, and in some cases, the apps
can enhance effectiveness as well.14 The current winner in this category is Square, created by
Twitter-founder Jack Dorsey in 2010. Square is revolutionizing small business by enabling
any smartphone to become a point-of-sale (POS) terminal that allows the user to accept
credit card payments. Millions of small businesses and entrepreneurs in the United States
and Canada who once had to turn customers away because they couldn’t afford the fees
charged by credit card companies can now use Square to process credit cards. Customers get
their need to pay with a card met, and businesses get a sale that they might have missed.15
All managers have to pay attention to costs, but severe cost cutting to improve
efficiency—whether it is by using cutting-edge technology or old-fashioned frugality—
can sometimes hurt organizational effectiveness. The ultimate responsibility of managers
is to achieve high performance, which is the attainment of organizational goals by using
resources in an efficient and effective manner. Consider the example of Illumination Enter-
tainment, the film production company behind Dr. Seuss’ The Lorax. Managers continually
look for ways to increase efficiency while also meeting the company’s goal of producing
creative and successful animated films.

You can’t quite make a blockbuster movie on a dime, but Christopher Meledandri is out to prove
Innovative
that strict cost controls and hit animated films aren’t mutually exclusive. Most computer-generated Way
animated films cost at least $100 million, with some budgets pushing $150 million. In contrast,
Illumination
Illumination Entertainment made the hit film Despicable Me for only $69 million. The budget for Entertainment
Hop came in at a mere $63 million. And the company produced its third blockbuster, Dr. Seuss’
The Lorax, for $70 million—less than the movie earned at the box office on its opening weekend.
Managers at Illumination use many approaches to increase efficiency. For example, when
making Despicable Me, they decided to eliminate details such as animal fur, which the audience
couldn’t see on the screen. Other details that were extremely costly to render in computer
graphics but that weren’t central to the story were also cut, saving the detail work for sets that
were used repeatedly.The company paid big bucks for the voice of Steve Carell, but it hired other
vocal talent with less star power, a practice that managers follow for all their films.They also seek
out first-time directors and young, enthusiastic, less experienced animators, who often cost less
than half of what a more experienced artist commands. Organizational details also contribute to
efficiency—Meledandri keeps layers of the hierarchy to a minimum so that decisions can be made
fast and movies don’t languish for years in development, eating up money. Offices are located
in a low-rent area behind a cement plant rather than being housed in sumptuous surroundings.
Moviegoing in general is down, but animated family films are hot. And Illumination has
had some of the hottest movies going. Peter Chernin, former president of News Corpora-
tion, said of Meledandri: “It is rare to find people whose business sense is as strong as their
creative sense.” Meledandri and his management team are using their business sense to run
an efficient operation, and their creative instincts to put money in the right places to produce
popular, often critically acclaimed animated films.16

So far, Illumination Entertainment has managed to adhere to its efficient, low-cost

model while being highly effective in meeting its goals. Compare that to what happened at
music company EMI. Weak sales led managers to focus on financial efficiency, which suc-
cessfully trimmed waste and boosted operating income. However, the efficiencies damaged
the company’s ability to recruit new artists, who are vital to record companies, and also led
to internal turmoil that caused some longtime acts like the Rolling Stones to leave the label.
Thus, the company’s overall performance suffered. Managers are struggling to find the right
balance between efficiency and effectiveness to get EMI back on the right track.17

Remember This
• An organization is a social entity that is goal-directed • Some managers are using mobile apps to increase effi-
and deliberately structured. ciency; one example is Square, used to process credit and
• Good management is important because organizations debit card payments with a smartphone.
contribute so much to society. • Performance is defined as the organization’s ability
• Efficiency pertains to the amount of resources—raw to attain its goals by using resources in an efficient and
materials, money, and people—used to produce a effective manner.
desired volume of output. • Managers at Illumination Entertainment are concerned
• Effectiveness refers to the degree to which the organi- both with keeping costs low (efficiency) and producing
zation achieves a stated goal. animated films (such as The Lorax) that are critically and
financially successful (effectiveness).

Management Skills
A manager’s job requires a range of skills. Although some management theorists propose a
long list of skills, the necessary skills for managing a department or an organization can be
placed in three categories: conceptual, human, and technical.18 As illustrated in Exhibit 1.4,
the application of these skills changes dramatically when a person is promoted to manage-
ment. Although the degree of each skill that is required at different levels of an organiza-
tion may vary, all managers must possess some skill in each of these important areas to
perform effectively.

exhibit 1.4 Relationship of Technical, Human, and Conceptual Skills to Management

Contributors)

Technical Skills
Nonmanagers

Human Skills
(Individual

Conceptual
Skills
(

Technical
Middle Managers

Skills
g

Human Skills

Conceptual Skills

Introduction
Many managers get promoted to their first
management jobs because they have dem-
onstrated understanding and proficiency
in the performance of specific tasks, which
is referred to as technical skills. Techni-
cal skills include mastery of the methods,
techniques, and equipment involved in

Brandy Baker/Detroit News/PSG/Newscom

specific functions such as engineering,
manufacturing, or finance. Technical skills
also includes specialized knowledge, ana-
lytical ability, and the competent use of
tools and techniques to solve problems
in that specific discipline. Technical skills
are particularly important at lower orga-
nizational levels. However, technical skills
become less important than human and Holding degrees in both physics and economics, entrepreneur Elon Musk
conceptual skills as managers move up the certainly possesses his share of technical skills. He designed and created
the first viable electric car—the Tesla roadster—as well as the Web-based
hierarchy. Top managers with strong tech- payment service PayPal and a spacecraft that will enable private citizens to
nical skills sometimes have to learn to step travel to outer space. But it is his stellar conceptual skills that allow him to
back so others can do their jobs effectively. lead the innovative companies that are making these products and services
David Sacks, founder and CEO of Yam- available to people worldwide.

mer, designed the first version of the prod-

uct himself, but now the company has 200 employees and a dozen or so product managers
and design teams. Sacks used to “walk around and look over the designers’ shoulders to see
what they were doing,” but says that habit prevented some people from doing their best
work.19

Human Skills
Human skills involve the manager’s ability to work with and through other people and to
work effectively as a group member. Human skills are demonstrated in the way that a man-
ager relates to other people, including the ability to motivate, facilitate, coordinate, lead,
communicate, and resolve conflicts. Human skills are essential for frontline managers who
work with employees directly on a daily basis. A recent study found that the motivational
skill of the frontline manager is the single most important factor in whether people feel
engaged with their work and committed to the organization.20
Human skills are increasingly important for managers at all levels and in all types of
organizations.21 Even at a company such as Google, which depends on technical expertise,
human skills are considered essential for managers. Google analyzed performance reviews
and feedback surveys to find out what makes a good manager of technical people and found
that technical expertise ranked dead last among a list of eight desired manager qualities, as
shown in Exhibit 1.5. The exhibit lists eight effective behaviors of good managers. Notice
that almost all of them relate to human skills, such as communication, coaching, and team-
work. People want managers who listen to them, build positive relationships, and show an
interest in their lives and careers.22 A recent study found that human skills were signifi-
cantly more important than technical skills for predicting manager effectiveness.23 Another
survey compared the importance of managerial skills today with those from the late 1980s
and found a decided increase in the role of skills for building relationships with others.24

exhibit 1.5 To know how to build better managers, Google executives studied performance reviews, feedback
Google’s Rules: Eight Good surveys, and award nominations to see what qualities made a good manager. Here are the “Eight
Behaviors for Managers Good Behaviors” they found, in order of importance:
1. Be a good coach.
2. Empower your team and don’t micromanage.
3. Express interest in team members’ successes and personal well-being.
4. Don’t be a sissy: Be productive and results-oriented.
5. Be a good communicator and listen to your team.
6. Help your employees with career development.
7. Have a clear vision and strategy for the team.
8. Have key technical skills so you can help advise the team.

SOURCE: “Google’s Quest to Build a Better Boss,” by Adam Bryant, published March 12, 2011, in The New York Times.
Courtesy of Google, Inc.

Conceptual Skills
Conceptual skills include the cognitive ability to see the organization as a whole
system and the relationships among its parts. Conceptual skills involve knowing
where one’s team fits into the total organization and how the organization fits into
Complete the the industry, the community, and the broader business and social environment. It
“Experiential Exercise” means the ability to think strategically—to take the broad, long-term view—and to
on pages 31–32, identify, evaluate, and solve complex problems.25
which pertains to Conceptual skills are needed by all managers, but especially for managers at the
management skills. top. Many of the responsibilities of top managers, such as decision making, resource
Reflect on the strength allocation, and innovation, require a broad view. For example, Ursula Burns, who in
of your preferences 2009 became the first African American woman to lead a major U.S. corporation,
among the three needs superb conceptual skills to steer Xerox through the tough economy and the
types of skills and the rapidly changing technology industry. Sales of copiers and printers have remained
implications for you as flat, prices have declined, and Xerox is battling stronger competitors in a consolidat-
a manager. ing industry. To keep the company thriving, Burns needs a strong understanding not
only of the company, but also of shifts in the industry and the larger environment.26

When Skills Fail

Good management skills are not automatic. Particularly during turbulent times, managers
really have to stay on their toes and apply all their skills and competencies in a way that
benefits the organization and its stakeholders—employees, customers, investors, the com-
munity, and so forth. In recent years, numerous highly publicized examples have shown
what happens when managers fail to apply their skills effectively to meet the demands of
an uncertain, rapidly changing world.
Everyone has flaws and weaknesses, and these shortcomings become most apparent
under conditions of rapid change, uncertainty, or crisis.27 Consider the uproar that resulted
Hot in 2013 from the decision of managers at the Internal Revenue Service (IRS) to apply ad-
Topic ditional screening to tax-exempt applications from conservative Tea Party groups. When
a manager for so-called “Group 7822,” an IRS office that screens and processes thousands
of applications a year from organizations seeking tax-exempt status, noticed a growing
number of applications from groups identifying themselves as part of the Tea Party, the
manager advised workers to flag them and similar groups to see if their purpose was too
political to be eligible under the rules for tax exemption. It has long been a practice to
give extra scrutiny to certain kinds of groups that present a potential for fraudulent use
of tax exempt status, but critics say the agency went too far in how it applied the practice

Introduction
gressional investigators are probing whether agency activities constituted discrimination
against conservative groups, and the full story of what happened and why is still emerg-
ing.28 IRS managers at all levels involved in the decision appear to have needed stronger
conceptual skills to prevent this crisis from happening, and higher-level executives had to
call upon all their conceptual and human skills to resolve the dilemma and work to restore
the public trust.
The numerous ethical and financial scandals of recent years have left people cynical
about business and government managers and even less willing to overlook mistakes. Cri-
ses and examples of deceit and greed grab the headlines, but many more companies fal-
ter or fail less spectacularly. Managers fail to listen to customers, are unable to motivate
employees, or can’t build a cohesive team. For example, the reputation of Zynga, maker
of games like Farmville that were ubiquitous on Facebook for a while, plummeted along
with its share price in 2012. Although there were several problems at Zynga, one was
that founder and former CEO Mark Pincus had an aggressive style that made it diffi-
cult to build a cohesive team. The exodus of key executives left the company floundering,
and the company’s shares fell 70 percent. Pincus stepped down as CEO in July 2013, and
former Xbox executive Don Mattrick took over to try to revive the once-hot game maker.29
Exhibit 1.6 shows the top ten factors that cause managers to fail to achieve desired results,
based on a survey of managers in U.S. organizations operating in rapidly changing business
environments.30 Notice that many of these factors are due to poor human skills, such as the
inability to develop good work relationships, a failure to clarify direction and performance
expectations, or an inability to create cooperation and teamwork. The number one reason
for manager failure is ineffective communication skills and practices, cited by 81 percent
of managers surveyed. Especially in times of uncertainty or crisis, if managers do not com-
municate effectively, including listening to employees and customers and showing genuine
care and concern, organizational performance and reputation suffer.

exhibit 1.6 Top Causes of Manager Failure

1. Ineffective communication skills and practicess 81%

2. Poor work relationships/interpersonal skillss 78%

3. Person - job mismatch

h 69%
6

4. Failure to clarify direction or performance expectationss 64%

5. Failure to adapt and break old habitss 5

57%

6. Breakdown of delegation and empowermentt 56%

7. Lack of personal integrity and trustworthinesss 52%

8. Inability to develop cooperation and teamworkk 50%

9. Inability to lead/motivate otherss 47%

10. Poor planning practices/reactionary behaviorr 45%

0% 50% 90%
SOURCE: Adapted from Clinton O. Longenecker, Mitchell J. Neubert, and Laurence S. Fink, “Causes and Consequences of
Managerial Failure in Rapidly Changing Organizations,” Business Horizons 50 (2007): 145–155, Table 1, with permission from Elsevier.

Remember This
• Managers have complex jobs that require a range of • Conceptual skills are the cognitive abilities to see the
abilities and skills. organization as a whole and the relationship among its
• Technical skills include the understanding of and parts.
proficiency in the performance of specific tasks. • The two major reasons that managers fail are poor com-
• Human skills refer to a manager’s ability to work with munication and poor interpersonal skills.
and through other people and to work effectively as part • A manager’s weaknesses become more apparent during
of a group. stressful times of uncertainty, change, or crisis.

Management Types
Managers use conceptual, human, and technical skills to perform the four management
functions of planning, organizing, leading, and controlling in all organizations—large
and small, manufacturing and service, profit and nonprofit, traditional and Internet-
based. But not all managers’ jobs are the same. Managers are responsible for different
departments, work at different levels in the hierarchy, and meet different requirements
for achieving high performance. Twenty-five-year-old Daniel Wheeler is a first-line
supervisor in his first management job at Del Monte Foods, where he is directly involved
in promoting products, approving packaging sleeves, and organizing people to host
sampling events.31 Kevin Kurtz is a middle manager at Lucasfilm, where he works with
employees to develop marketing campaigns for some of the entertainment company’s
hottest films.32 And Denise Morrison is CEO of Campbell Soup Company, the com-
pany that also makes Pepperidge Farm baked goods.33 All three are managers and must
contribute to planning, organizing, leading, and controlling their organizations—but in
different amounts and ways.

Vertical Differences
An important determinant of the manager’s job is the hierarchical level. Exhibit 1.7 illus-
trates the three levels in the hierarchy. A study of more than 1,400 managers examined how
the manager’s job differs across these three hierarchical levels and found that the primary
focus changes at different levels.34 For first-level managers, the main concern is facilitating
individual employee performance. Middle managers, though, are concerned less with indi-
vidual performance and more with linking groups of people, such as allocating resources,
coordinating teams, or putting top management plans into action across the organization.
For top-level managers, the primary focus is monitoring the external environment and
determining the best strategy to be competitive.
Let’s look in more detail at differences across hierarchical levels. Top managers are at
the top of the hierarchy and are responsible for the entire organization. They have titles
such as president, chairperson, executive director, CEO, and executive vice president. Top
managers are responsible for setting organizational goals, defining strategies for achieving
them, monitoring and interpreting the external environment, and making decisions that
affect the entire organization. They look to the long-term future and concern themselves
with general environmental trends and the organization’s overall success. Top managers are
also responsible for communicating a shared vision for the organization, shaping corporate
culture, and nurturing an entrepreneurial spirit that can help the company innovate and
keep pace with rapid change.35

Introduction
CEO
Top Managers
Vice-
Corporate President
or Group of Adminis-
Head tration

Business Unit Head

General Administrator
People at these Manager
levels may also Middle Managers
have horizontal Department Manager
project manager
responsibility Product Line or Information
Service Manager Services Manager

Functional Head
Production, Sales, IT, HRM, First-Line
R&D Supervisor Accounting Supervisor Managers

Team Leaders and

Nonmanagerial Employees
Line jobs Staff jobs

SOURCE: Adapted from Thomas V. Bonoma and Joseph C. Lawler, “Chutes and Ladders: Growing the General Manager,” Sloan
Management Review (Spring 1989): 27–37.

Middle managers work at middle levels of the organization and are responsible for
business units and major departments. Examples of middle managers are department head,
division head, manager of quality control, and director of the research lab. Middle manag-
ers typically have two or more management levels beneath them. They are responsible for
implementing the overall strategies and policies defined by top managers. Middle manag-
ers generally are concerned with the near future, rather than with long-range planning.
The middle manager’s job has changed dramatically over the past two decades. Many
organizations improved efficiency by laying off middle managers and slashing middle man-
agement levels. Traditional pyramidal organization charts were flattened to allow informa-
tion to flow quickly from top to bottom and decisions to be made with greater speed. In
addition, technology has taken over many tasks once performed by middle managers, such
as monitoring performance and creating reports.36 Exhibit 1.7 illustrates the shrinking of
middle management.
Yet even as middle management levels have been reduced, the middle manager’s job has
taken on a new vitality. Research shows that middle managers play a crucial role in driv-
ing innovation and enabling organizations to respond to rapid shifts in the environment.37
“These are the people who figure out ‘how’ to do the ‘what,’” says Andrew Clay, a manager
at a medical devices company.38 The success of an organization depends partly on middle
managers effectively implementing the company’s strategy, which can make the middle
manager’s job quite stressful. “No glory, no fame,” says middle manager Ruby Charles. “All
the glory goes to your subordinates, and all the fame goes to your boss. Meanwhile, none of
it could happen without you.”39

Concept Connection A study by Nicholas Bloom and John Van Reenen sup-
ports the idea that good middle managers are important to
organizational success. In an experiment with textile facto-
ries in India, improved middle management practices were
introduced into 20 factories in India, and the results were
compared to factories that did not improve management
procedures. After just four months of training in better man-

BOB PEPPING/KRT/Newscom
agement methods, the 20 factories cut defects by 50 percent,
boosted productivity and output, and improved profits by
$200,000 a year.40
Middle managers’ status also has escalated because of the
growing use of teams and projects. A project manager is
responsible for a temporary work project that involves the
Perhaps one of the best-known leaders in baseball, Billy Beane
participation of people from various functions and levels of
is general manager and minority owner of the Oakland the organization, and perhaps from outside the company as
A’s. Beane is famous for finding and developing talented young well. Many of today’s middle managers work with a variety
players who are less expensive to hire than the big names, of projects and teams at the same time, some of which cross
which has allowed Beane to keep his payroll low while still
winning four division titles. Beane was the subject of the best-
geographical and cultural boundaries as well as functional
selling book and hit film Moneyball. ones.
First-line managers are directly responsible for the pro-
duction of goods and services. They are the first or second
level of management and have such titles as supervisor, line manager, section chief, and
office manager. They are responsible for teams and non-management employees. Their
primary concern is the application of rules and procedures to achieve efficient produc-
tion, provide technical assistance, and motivate subordinates. The time horizon at this
level is short, with the emphasis on accomplishing day-to-day goals. Consider the job
of Alistair Boot, who manages the menswear department for a John Lewis department
store in Cheadle, England.41 Boot’s duties include monitoring and supervising shop floor
employees to make sure that sales procedures, safety rules, and customer service policies
are followed. This type of managerial job might also involve motivating and guiding young,
often inexperienced workers; providing assistance as needed; and ensuring adherence to
company policies.

Horizontal Differences
The other major difference in management jobs occurs horizontally across the organiza-
tion. Functional managers are responsible for departments that perform a single func-
tional task and have employees with similar training and skills. Functional departments
include advertising, sales, finance, human resources, manufacturing, and accounting. Line
managers are responsible for the manufacturing and marketing departments that make or
sell the product or service. Staff managers are in charge of departments, such as finance and
human resources, that support line departments.
General managers are responsible for several departments that perform different
functions. A general manager is responsible for a self-contained division, such as a
Nordstrom department store or a Honda assembly plant, and for all the functional depart-
ments within it. Project managers also have general management responsibility because
they coordinate people across several departments to accomplish a specific project.

Introduction
• There are many types of managers, based on their pur- • Most new managers are first-line managers—
pose and location in an organization. managers who are at the first or second level of the
• A top manager is one who is at the apex of the orga- hierarchy and are directly responsible for overseeing
nizational hierarchy and is responsible for the entire groups of production employees.
organization. • A functional manager is responsible for a department
• Middle managers work at the middle level of the that performs a single functional task, such as finance
organization and are responsible for major divisions or or marketing.
departments. • General managers are responsible for several depart-
• A project manager is a manager who is responsible ments that perform different functions, such as the man-
for a temporary work project that involves people from ager of a Macy’s department store or a Ford automobile
various functions and levels of the organization. factory.

What Is a Manager’s Job Really Like?

“Despite a proliferation of management gurus, management consultants, and management
schools, it remains murky to many of us what managers actually do and why we need
them in the first place,” wrote Ray Fisman, a Columbia Business School professor.42 Unless
someone has actually performed managerial work, it is hard to understand exactly what
managers do on an hour-by-hour, day-to-day basis. One answer to the question of what
managers do to plan, organize, lead, and control was provided by Henry Mintzberg, who
followed managers around and recorded all their activities.43 He developed a description
of managerial work that included three general characteristics and ten roles. These char-
acteristics and roles, discussed in detail later in this section, have been supported by other
research.44
Researchers also have looked at what managers like to do. Both male and female man-
agers across five different countries report that they most enjoy activities such as lead-
ing others, networking, and leading innovation. Activities that managers like least include
controlling subordinates, handling paperwork, and managing time pressures.45 Many new
managers in particular find the intense time pressures of management, the load of admin-
istrative paperwork, and the challenge of directing others to be quite stressful as they adjust
to their new roles and responsibilities. Indeed, the initial leap into management can be one
of the scariest moments in a person’s career.

Making the Leap: Becoming a New Manager

Many people who are promoted into a manager position have little idea what the job actu-
ally entails and receive little training about how to handle their new role. It’s no wonder
that, among managers, first-line supervisors tend to experience the most job burnout and
attrition.46
Making the shift from individual contributor to manager is often tricky. Mark
Zuckerberg, whose company, Facebook, went public a week before he turned 28 years old,
provides an example. In a sense, the public has been able to watch as Zuckerberg has “grown
up” as a manager. He was a strong individual performer in creating the social media platform
and forming the company, but he fumbled with day-to-day management, such as interac-
tions with employees and communicating with people both inside and outside Facebook.
Zuckerberg was smart enough to hire seasoned managers, including former Google execu-
tive Sheryl Sandberg, and cultivate advisors and mentors who have coached him in areas

exhibit 1.8 Making the Leap from Individual Performer to Manager

From To
Individual Manager
Identity Identity Generalist;
G e
S
Specialist;
p
performs co
coordinates
specific tasks
sp diverse tasks
div

Gets things Gets things

done through done through
own efforts others

An individual A network
actor builder

Works in highly
Works relatively
interdependent
independently
manner

SOURCE: Based on Exhibit 1.1, “Transformation of Identity,” in Linda A. Hill, Becoming a Manager: Mastery of a New Identity,
2d ed. (Boston, MA: Harvard Business School Press, 2003), p. 6.

where he is weak. He also shadowed David Graham at the offices of The Post Company
(the publisher of The Washington Post before it was purchased by Jeff Bezos) for four days
to try to learn what it is like to manage a large organization. Now that Facebook is a public
company, Zuckerberg is watched more closely than ever to see if he has what it takes to be
a manager of a big public corporation.47
Harvard professor Linda Hill followed a group of 19 managers over the first year
of their managerial careers and found that one key to success is to recognize that be-
coming a manager involves more than learning a new set of skills. Rather, becoming
Can you make a manager means a profound transformation in the way people think of themselves,
a personal called personal identity, which includes letting go of deeply held attitudes and habits
transformation from and learning new ways of thinking.48 Exhibit 1.8 outlines the transformation from
individual performer to individual performer to manager. The individual performer is a specialist and a “doer.”
manager, accomplishing His or her mind is conditioned to think in terms of performing specific tasks and ac-
work by engaging and tivities as expertly as possible. The manager, on the other hand, has to be a generalist
coordinating other and learn to coordinate a broad range of activities. Whereas the individual performer
people? Look back strongly identifies with his or her specific tasks, the manager has to identify with the
at your results on broader organization and industry.
the questionnaire at In addition, the individual performer gets things done mostly through his or her
the beginning of this own efforts and develops the habit of relying on self rather than others. The manager,
chapter to see how though, gets things done through other people. Indeed, one of the most common
your priorities align mistakes that new managers make is wanting to do all the work themselves, rather
with the demands than delegating to others and developing others’ abilities.49 Hill offers a reminder
placed on a manager. that, as a manager, you must “be an instrument to get things done in the organization
by working with and through others, rather than being the one doing the work.”50

Introduction
to do what they think is best for the organization. In reality, though, managers find them-
selves hemmed in by interdependencies. Being a successful manager means thinking in
terms of building teams and networks and becoming a motivator and organizer within a
highly interdependent system of people and work.51 Although the distinctions may sound
simple in the abstract, they are anything but. In essence, becoming a manager means be-
coming a new person and viewing oneself in a completely new way.
Many new managers have to make the transformation in a “trial by fire,” learning on the
job as they go, but organizations are beginning to be more responsive to the need for
new manager training. The cost to organizations of losing good employees who can’t
make the transition is greater than the cost of providing training to help new manag-
ers cope, learn, and grow. In addition, some organizations use great care in selecting How will you make
people for managerial positions, including ensuring that each candidate understands the transition to a new
what management involves and really wants to be a manager. manager’s position
and effectively manage
your time to keep up
Manager Activities with the hectic pace?
Most new managers are unprepared for the variety of activities that managers rou- Complete the “New
tinely perform. One of the most interesting findings about managerial activities is Manager Self-Test” on
how busy managers are and how hectic the average workday can be. page 22 to see how
good you are at time
Adventures in Multitasking management.
Managerial activity is characterized by variety, fragmentation, and brevity.52 The
widespread and voluminous nature of a manager’s tasks leaves little time for quiet
reflection. A recent study by a team from the London School of Economics and Harvard
Business School found that the time CEOs spend working alone averages a mere six hours
a week. The rest of their time is spent in meetings, on the phone, traveling, and talking with
others inside and outside the organization.53
Managers shift gears quickly. In his study, Mintzberg found that the average time a top
executive spends on any one activity is less than nine minutes, and another survey indicates
that some first-line supervisors average one activity every 48 seconds!54 Significant crises
are interspersed with trivial events in no predictable sequence. Every manager’s job is simi-
lar in its diversity and fragmentation to what Workforce Management described as a typical
day in the life of human resources (HR) manager Kathy Davis:55
●● 6:55 a.m.—Arrives at work early to begin investigating a complaint of sexual harass-
ment at one of the factories, but as she’s walking to her office, she bumps into someone
carrying a picket sign that reads “Unfair Hiring! Who Needs HR?” Spends a few min-
utes talking with the young man, who is a temp that she had let go due to sloppy work.
●● 7:10 a.m.—Finds the factory shift supervisor and a security staff member already wait-
ing outside her door to discuss the sexual harassment complaint.
●● 7:55 a.m.—Sue, a member of Kathy’s team who has just arrived and is unaware of the
meeting, interrupts to let Kathy know there is someone picketing in the hallway out-
side her office and the CEO wants to know what’s going on.
●● 8:00 a.m.—Alone at last, Kathy calls the CEO and explains the picketing situation,
and then she begins her morning routine. Checking voice mail, she finds three mes-
sages that she must respond to immediately, and she passes four others to members of
her team. She begins checking e-mail but is interrupted again by Sue, who reminds her
they have to review the recent HR audit so that the company can respond promptly
and avoid penalties.

Ne w Manager Self-Test
Managing Your Time
Instructions: Think about how you normally handle tasks 7. My workspace and paperwork
during a typical day at work or school. Read each item and are well organized.
check whether it is Mostly True or Mostly False for you.
8. I am good at record keeping.

Mostly Mostly 9. I make good use of waiting time.

True False

1. I frequently take on too many tasks. 10. I am always looking for ways
to increase task efficiency.
2. I spend too much time on
enjoyable but unimportant activities. Scoring and Interpretation: For questions 3 and 5–10,
give yourself one point for each Mostly True answer. For ques-
3. I feel that I am in excellent control tions 1, 2, and 4, give yourself one point for each Mostly False
of my time. answer.Your total score pertains to the overall way that you
use time. Items 1–5 relate to taking mental control over how
4. Frequently during the day, you spend your time. Items 6–10 pertain to some mechanics
I am not sure what to do next. of good time management. Good mental and physical habits
make effective time management much easier. Busy managers
5. There is little room for have to learn to control their time. If you scored 8 or higher,
improvement in the way your time-management ability is good. If your score is 4 or
I manage my time. lower, you may want to reevaluate your time-management
practices if you aspire to be a manager. How important is good
6. I keep a schedule for events, time management to you? Read the Manager’s Shoptalk box
meetings, and deadlines. on page 24 for ideas to improve your time management skills.

●● 9:15 a.m.—As she is reviewing the audit, Kathy gets a call from manager Pete Chan-
ning, asking if she’s sent the offer letter to a prospective hire. “Don’t send it,” Pete said,
“I’ve changed my mind.” Weeks of interviewing and background checks, and now Pete
wants to start over!
●● 11:20 a.m.—Kathy is getting to the end of her critical e-mail list when she hears a
commotion outside her door and finds Linda and Sue arguing. “This report IT did for
us is full of errors,” Linda says, “but Sue says we should let it go.” Kathy agrees to take
a look at the IT department’s report and discovers that there are only a few errors, but
they have critical implications.
●● 12:25 p.m.—As she’s nearing the end of the IT report, Kathy’s e-mail pings an “urgent”
message from a supervisor informing her that one of his employees will be absent from
work for a few weeks “while a felony morals charge is worked out.” This is the first she’s
heard about it, so she picks up the phone to call the supervisor.
●● 1:20 p.m.—Time for lunch—finally. She grabs a sandwich at a local supermarket and
brings one back for the picketer, who thanks her and continues his march.
●● 2:00 p.m.—Meets with CEO Henry Luker to review the audit and IT reports, discuss
changes to the company’s 401(k) plan, and talk about ideas for reducing turnover.

Introduction
with the manufacturing facilities manager, who has asked Kathy to “shadow” him and
share ideas about training and skills development.
●● 3:15 p.m.—As she gets out of her car at the facility, Kathy runs into a man who had
attended a supervision training course a few months earlier. He tells her that the class
really helped him—there are fewer misunderstandings, and the staff seems to respect
him more.
●● 3:30 p.m.—Arrives right on time and spends the next couple of hours observing and ask-
ing questions, talking to employees to learn about the problems and obstacles they face.
●● 5:40 p.m.—All is quiet back in the HR department, but there’s a message from Sue
that Kathy has an appointment first thing tomorrow morning with two women who
had gotten into a fight in the elevator. Sighing, Kathy returns to her investigation of the
sexual harassment complaint that she had begun at 7:00 that morning.

Life on Speed Dial

The manager performs a great deal of work at an unrelenting pace.56 Managers’ work is
fast-paced and requires great energy. Most top executives routinely work at least 12 hours
a day and spend 50 percent or more of their time traveling.57 Calendars are often booked
months in advance, but unexpected disturbances erupt every day. Mintzberg found that
the majority of executives’ meetings and other contacts are ad hoc, and even scheduled
meetings are typically surrounded by other events such as quick phone calls, scanning of
e-mail, or spontaneous encounters. During time away from the office, executives catch up on
work-related reading, paperwork, phone calls, and e-mail. Technology, such as e-mail, text
messaging, cell phones, and laptops, has intensified the pace. Brett Yormark, the National
Basketball Association (NBA)’s youngest CEO (he heads the Brooklyn Nets), typically re-
sponds to about 60 messages before he even shaves and dresses for the day, and employees
are accustomed to getting messages that Yormark has zapped to them in the wee hours of
the morning.58
The fast pace of a manager’s job is illustrated by
Michelle Davis, an analytics director at Fair Isaac Concept Connection
Corporation (FICO). As a middle manager at this
company, best known for calculating consumer
credit scores, Davis oversees three direct reports and
three other subordinates assigned to her teams. On
a typical day, she arrives at work at 6:00 a.m. so she
© Monkey Business Images/Shutterstock.com

can pick up her children in the early afternoon, and

she uses the first hour and a half of quiet time to
catch up on messages and respond to urgent requests
for data. At 7:30, she has her first meeting, often a
conference call with the analytics board of directors.
Then Davis leads an hour-long training session for a
few dozen staffers on new analytics products, stay-
ing longer to answer questions and talk about how
clients might use the data. At 10:30 a.m., she checks
Between the long hours and the high degree of responsibility and
in with senior members of the product develop-
stress that is typical of advanced positions, it can be challenging
ment and product management teams and sorts out for managers to maintain a healthy balance between their work
various problems. Lunch is a quick stop at the com- lives and their personal lives. Oliver Bussmann, chief information
pany cafeteria then on to present a few slides at the officer of UBS, blogged about his rules for finding balance, saying
that he puts his family first as his top priority, pays attention to his
monthly lunch-and-learn session. Davis squeezes
health and fitness, and takes time to give back to his community
in an hour or so of hands-on work time before it’s in a meaningful way. He feels that these are the keys to success in
back to more meetings. Afternoon meetings often any career.
run long, meaning she has to scramble to pick up

Manager ’s Shoptalk
Time Management Tips for New Managers

B
ecoming a manager is considered by most people • “D” items are tasks that you can delegate to
to be a positive, forward-looking career move, someone else.
and indeed, life as a manager offers appealing
• Schedule Your Workday. Some experts propose that
aspects. However, it also holds many challenges,
every minute spent in planning saves 10 minutes in
not the least of which is the increased workload and
execution. Take your to-do list a step further and
the difficulty of finding the time to accomplish ev-
plan how you will accomplish each task or project
erything on one’s expanded list of duties and respon-
you need to handle. Planning to tackle the big
sibilities. The following classic time management
tasks first is a good idea because most people are
techniques can help you eliminate major time-wasters
at peak performance early in the day. Save the
in your daily routines.
e-mails and phone calls for less productive times.
• Keep a To-Do List. If you don’t use any other sys-
• Do One Thing at a Time. Multitasking has become
tem for keeping track of your responsibilities and
the motto of the early twenty-first century, but
commitments, at the very least you should main-
too much multitasking is a time-waster. Research
tain a to-do list that identifies all the things that
has shown that multitasking reduces rather
you need to do during the day. Although the na-
than enhances productivity. The authors of one
ture of management means that new responsibili-
study suggest that an inability to focus on one
ties and shifting priorities occur frequently, it’s a
thing at a time could reduce efficiency by 20 to
fact that people accomplish more with a list than
40 percent. Even for those whose job requires
without one.
numerous brief activities, the ability to concentrate
• Remember Your ABCs. This is a highly effective fully on each one (sometimes called spotlighting)
system for prioritizing tasks or activities on your saves time. Give each task your full attention, and
to-do list: you’ll get more done and get it done better, too.
• An “A” item is something highly impor- Sources: Based on information in Pamela Dodd and Doug Sundheim, The 25
tant. It must be done, or you’ll face serious Best Time Management Tools & Techniques (Ann Arbor, MI: Peak Performance
consequences. Press, Inc., 2005); Brian Tracy, Eat That Frog: 21 Great Ways to Stop Procrastinating
and Get More Done in Less Time (San Francisco: Berrett-Koehler, 2002); Joshua
• A “B” item is a should do, but consequences S. Rubinstein, David E. Meyer, and Jeffrey E. Evans, “Executive Control of
will be minor if you don’t get it done. Cognitive Processes in Task Switching,” Journal of Experimental Psychology: Human
Perception and Performance 27, no. 4 (August 2001): 763–797; Sue Shellenbarger,
• “C” items are things that would be nice to get “Multitasking Makes You Stupid: Studies Show Pitfalls of Doing Too Much at
done, but there are no consequences at all if Once,” The Wall Street Journal (February 27, 2003): D1; and Ilya Pozin, “Quit
Working Late: 8 Tips,” Inc. (June 26, 2013), http://www.inc.com/ilya-pozin/8-ways
you don’t accomplish them.
-to-leave-work-at-work.html (accessed August 19, 2013).

her three children. While the kids eat snacks and play in the backyard, Davis catches up on
e-mail and phone calls. After dinner with her husband, she tries to stay away from work,
but admits that she keeps an eye on her text messages until bedtime.59

Where Does a Manager Find the Time?

With so many responsibilities and so many competing demands on their time, how do
managers cope? One manager who was already working 18-hour days five days a week
got assigned another project. When the CEO was informed of the problem, he matter-
of-factly remarked that by his calculations, she still had “30 more hours Monday through
Friday, plus 48 more on the weekend.” That is surely an extreme example, but most man-
agers often feel the pressure of too much to do and not enough time to do it.60 The Wall
Street Journal’s “Lessons in Leadership” video series asked CEOs of big companies how

Introduction
about how to manage their time.61 Time is a manager’s most valuable resource, and one
characteristic that identifies successful managers is that they know how to use time effec-
tively to accomplish the important things first and the less important things later.62 Time
management refers to using techniques that enable you to get more done in less time
and with better results, be more relaxed, and have more time to enjoy your work and your
life. New managers in particular often struggle with the increased workload, the endless
paperwork, the incessant meetings, and the constant interruptions that come with a man-
agement job. Learning to manage their time effectively is one of the greatest challenges that
new managers face. The “Manager’s Shoptalk” box offers some tips for time management.

Manager Roles
Mintzberg’s observations and subsequent research indicate that diverse manager activities
can be organized into ten roles.63 A role is a set of expectations for a manager’s behavior.
Exhibit 1.9 describes activities associated with each of the roles. These roles are divided
into three conceptual categories: informational (managing by information), interpersonal

exhibit 1.9 Ten Manager Roles

Informational Interpersonal
Monitor: Seek and receive Figurehead: Perform ceremonial
information; scan Web, and symbolic duties such as
periodicals, reports; maintain greeting visitors, signing legal
personal contacts documents
Disseminator: Forward Leader: Direct and motivate
information to other organization subordinates; train, counsel, and
members; send memos and communicate with subordinates
reports, make phone calls Liaison: Maintain information links
Spokesperson: Transmit inside and outside the organization;
information to outsiders use e-mail, phone, meetings
through speeches, reports

Decisional
cisional
Entrepreneur: Initiate
iate improvement
projects; identify newew ideas, delegate idea
thers
responsibility to others
Disturbance Handler: ler: Take corrective action during
conflicts or crises; resolve disputes among subordinates
Resource Allocator: Decide who gets resources;
schedule, budget, set priorities
Negotiator : Represent team or department’s
interests; represent department during
negotiation of budgets, union contracts,
purchases

SOURCE: Adapted from Henry Mintzberg, The Nature of Managerial Work (New York: Harper & Row, 1973), pp. 92–93; and
Henry Mintzberg, “Managerial Work: Analysis from Observation,” Management Science 18 (1971), B97–B110.

Concept Connection (managing through people), and decisional (managing

through action). Each role represents activities that man-
agers undertake to ultimately accomplish the functions of
planning, organizing, leading, and controlling. Although it is
necessary to separate the components of the manager’s job to

FREDERIC J. BROWN/AFP/Getty Images

understand the different roles and activities of a manager, it
is important to remember that the real job of management
isn’t practiced as a set of independent parts; all the roles
interact in the real world of management.

Informational Roles
Informational roles describe the activities used to maintain
and develop an information network. General managers
As the executive vice president of marketing at Microsoft, Tami spend about 75 percent of their time communicating with
Reller plays a number of significant interpersonal roles. She other people. The monitor role involves seeking current
serves as the top leader for the company’s bevy of marketers
information from many sources. The manager acquires
on functions like advertising, media usage, and distribution,
and she is often Microsoft’s liaison with the public, providing information from others and scans written materials to
information about Windows and other products. stay well informed. The disseminator and spokesperson
roles are just the opposite: The manager transmits current
information to others, both inside and outside the orga-
nization, who can use it. Boeing CEO Jim McNerney struggled with the spokesperson
Hot role after the 787 Dreamliner passenger plane was grounded around the world in early
Topic 2013 due to problems with the electrical system that led to battery fires. As soon as it
became apparent that the first fire wasn’t an isolated incident, McNerney orchestrated
an intense internal investigation, but he left the job of communicating with investors,
analysts, the media, and the general public to other executives, including chief engi-
neer Mike Sinnett. A few weeks after the first fire, during a conference call to discuss
fourth-quarter financial results, McNerney deflected questions from investors and ana-
lysts, saying “I can’t predict the outcome and I’m not going to. We’re in the middle of
an investigation.” Although McNerney has been harshly criticized for not being more
forthcoming with investors and analysts, some customers have praised Boeing for its
overall communications strategy during the crisis. Explaining his decision to stay behind
the scenes, McNerney said, “I’m the one who has to stand up with absolute confidence
when Boeing proposes a solution. . . . And the only way I know how is to dive in deeply
with the people doing the scientific and technical work.”64

Interpersonal Roles
Interpersonal roles pertain to relationships with others and are related to the human skills
described earlier. The figurehead role involves handling ceremonial and symbolic activities
for the department or organization. The manager represents the organization in his or her
formal managerial capacity as the head of the unit. The presentation of employee awards
by a branch manager for Commerce Bank is an example of the figurehead role. The leader
role encompasses relationships with subordinates, including motivation, communication,
and influence. The liaison role pertains to the development of information sources both
inside and outside the organization. Consider the challenge of the leader and liaison roles
Hot for managers at National Foods, Pakistan’s largest maker of spices and pickles. Managers in
Topic companies throughout Pakistan struggle with growing political instability, frequent power
outages, government corruption and inefficiency, and increasing threats of terrorism,
all of which makes the leader role even more challenging. “In the morning, I assess my
workers,” says Sajjad Farooqi, a supervisor at National Foods. If Farooqi finds people who
are too stressed or haven’t slept the night before, he changes their shift or gives them easier
work. Farooqi also pays a lot of attention to incentives because people are under so much

Introduction
only related to the business, but safety and security concerns as well.65

Decisional Roles
Decisional roles pertain to those events about which the manager must make a choice and
take action. These roles often require conceptual as well as human skills. The entrepreneur
role involves the initiation of change. Managers are constantly thinking about the future
and the changes needed to achieve a future goal or vision. The disturbance handler role
involves resolving conflicts among subordinates or between the manager’s department and
other departments. The resource allocator role pertains to decisions about how to assign
people, time, equipment, money, and other resources to attain desired outcomes. The
manager must decide which projects receive budget allocations, which of several customer
complaints receive priority, and even how to spend his or her own time. The homicide rate
in New York City dropped significantly in 2013 due to decisions managers made regarding
resource allocation.

In the first 178 days of 2013, New York City averaged less than a murder a day. The drop
Innovative
from 202 murders during the first half of 2012 to 154 during the first half of 2013 surprised Way
even police administrators. New York City Police
Analyzing the findings, Police Commissioner Raymond W. Kelly attributed the decrease Department
partly to changes in how resources are allocated. For example, Kelly increased the number
of cops assigned to high-crime neighborhoods and poured resources into a new anti-gang
strategy aimed at preventing retaliatory violence among neighborhood gangs. The strategy
relies heavily on closely tracking the activities of gangs and trying to prevent shootings before
they happen. Kelly said the initiative led to a 52 percent decline in shootings in one precinct.
Another program receiving additional resources is aimed at identifying and monitoring abu-
sive husbands whose behavior seems likely to turn lethal.
Deciding how to allocate resources in the country’s biggest police force is similar to the
job of a CEO in a midsize Fortune 500 company—except that the stakes are much higher
because the metrics by which performance is measured have to do with life and death.
In addition to fighting everyday crime, the New York Police Department (NYPD) has to
battle terrorism. Kelly has put an emphasis on hiring native speakers of languages such as
Farsi, Arabic, Urdu, Pashto, and Hindi, and set up a counterterrorism bureau and intelligence
division that deploys NYPD cops in foreign cities. He has also invested $100 million in a
surveillance network that oversees wide portions of Manhattan and the outer boroughs.66

Kelly’s decisions, such as the surveillance network and revised search practices, have not
come without criticism of civil rights violations, but many people credit him with making
life in New York City safer and giving foreign investors the confidence to bring hundreds
of millions of dollars back to the city.
The relative emphasis that a manager puts on the ten roles shown in Exhibit 1.9
depends on a number of factors, such as the manager’s position in the hierarchy, natural
skills and abilities, type of organization, or departmental goals to be achieved. Exhibit 1.10
illustrates the varying importance of the leader and liaison roles as reported in a survey of
top-, middle-, and lower-level managers. Note that the importance of the leader role typi-
cally declines, while the importance of the liaison role increases, as a manager moves up the
organizational hierarchy.
Other factors, such as changing environmental conditions, also may determine which
roles are more important for a manager at any given time. Robert Dudley, who took over
as CEO of troubled oil giant BP after Tony Hayward was forced out due to mishandling
the Deepwater Horizon crisis in 2010, found informational roles and decisional roles at

exhibit 1.10 Leader role

Hierarchical Levels and
Liaison role
Importance of Leader and High
Liaison Roles

Importance
Med

Low

Supervisory Middle Top

Managers Managers Managers
SOURCE: Based on information from A. I. Kraut, P. R. Pedigo, D. D. McKenna, and M. D. Dunnette, “The Role of the Manager:
What’s Really Important in Different Management Jobs,” Academy of Management Executive 3 (1989), 286–293.

the top of his list as he has personally worked to repair relationships with U.S. government
officials, mend fences with local communities, carve a path toward restoring the company’s
reputation, and take steps to prevent such a disastrous event from ever happening again.67
Managers stay alert to needs both within and outside the organization to determine which
roles are most critical at various times. A top manager may regularly put more emphasis
on the roles of spokesperson, figurehead, and negotiator, but the emergence of new com-
petitors may require more attention to the monitor role, or a severe decline in employee
morale and direction may mean that the CEO has to put more emphasis on the leader
role. A marketing manager may focus on interpersonal roles because of the importance of
personal contacts in the marketing process, whereas a financial manager may be more likely
to emphasize decisional roles such as resource allocator and negotiator. Despite these dif-
ferences, all managers carry out informational, interpersonal, and decisional roles to meet
the needs of the organization.

Remember This
• Becoming a new manager requires a shift in thinking • A role is a set of expectations for one’s behavior.
from being an individual performer to playing an inter- • Managers at every level perform ten roles, which are
dependent role of coordinating and developing others. grouped into informational roles, interpersonal roles,
• Because of the interdependent nature of management, and decisional roles.
new managers often have less freedom and control than • As one aspect of his decisional role, New York City
they expect to have. Police Commissioner Raymond W. Kelly allocates
• The job of a manager is highly diverse and fast-paced, so resources such as money, technology, and the time of
managers need good time-management skills. street cops and investigators.

Introduction
and Nonprofit Organizations
Small businesses are growing in importance. Hundreds of small businesses open every
month, but the environment for small business today is highly complicated. Chapter 6
provides detailed information about managing in small businesses and entrepreneurial
startups.
One interesting finding is that managers in small businesses tend to emphasize roles
different from those of managers in large corporations. Managers in small companies
often see their most important role as that of spokesperson because they must promote
the small, growing company to the outside world. The entrepreneur role is also critical
in small businesses because managers have to be innovative and help their organizations
develop new ideas to remain competitive. At LivingSocial, for example, founder and CEO
Tim O’Shaughnessy spends a lot of his time promoting the rapidly growing daily-deal site
and talking with department heads about potential new products and services.68 Small-
business managers tend to rate lower on the leader role and on information-processing
roles, compared with their counterparts in large corporations.
Nonprofit organizations also represent a major application of management talent.69
Organizations such as the Salvation Army, Nature Conservancy, Greater Chicago Food
Depository, Girl Scouts, and Cleveland Orchestra all require excellent management. The
functions of planning, organizing, leading, and controlling apply to nonprofits just as they
do to business organizations, and managers in nonprofit organizations use similar skills
and perform similar activities. The primary difference is that managers in businesses direct
their activities toward earning money for the company and its owners, whereas managers
in nonprofits direct their efforts toward generating some kind of social impact. The char-
acteristics and needs of nonprofit organizations created by this distinction present unique
challenges for managers.70
Financial resources for government and charity nonprofit organizations typically come
from taxes, appropriations, grants, and donations rather than from the sale of products
or services to customers. In businesses,
managers focus on improving the organi- Concept Connection
zation’s products and services to increase
sales revenues. In nonprofits, however,
services are typically provided to nonpay-
ing clients, and a major problem for many
organizations is securing a steady stream
of funds to continue operating. Nonprofit
managers, committed to serving clients
with limited resources, must focus on
keeping organizational costs as low as pos-
sible.71 Donors generally want their money
to go directly to helping clients rather than
WITT/SIPA/Newscom

for overhead costs. If nonprofit managers

can’t demonstrate a highly efficient use of
resources, they might have a hard time se-
curing additional donations or government
appropriations. Although the Sarbanes- Despite having launched and sold several successful start-ups already, San
Oxley Act (the 2002 corporate governance Francisco–based small business owner Loïc Le Meur is still a hands-on kind
reform law) doesn’t apply to nonprofits, of manager. His daily blog about the blogosphere and the Web in general
for example, many are adopting its guide- is read by hundreds of thousands of people worldwide, and he is the chief
organizer behind Europe’s largest annual tech conference, LeWeb.
lines, striving for greater transparency and

accountability to boost credibility with constituents and be more competitive when seek-
ing funding.72
In addition, some types of nonprofit organizations, such as hospitals and private univer-
sities that obtain revenues from selling services to clients, do have to contend with a bottom
line in the sense of having to generate enough revenues to cover expenses, so managers
often struggle with the question of what constitutes results and effectiveness. It is easy to
measure revenues compared to expenses, but the metrics of success in nonprofits are typi-
cally much more ambiguous. Managers have to measure intangibles such as “improve pub-
lic health,” “upgrade the quality of education,” or “increase appreciation for the arts.” This
intangible nature also makes it more difficult to gauge the performance of employees and
managers. An added complication is that managers in some types of nonprofits depend
on volunteers and donors who cannot be supervised and controlled in the same way that a
business manager deals with employees. Many people who move from the corporate world
to a nonprofit are surprised to find that the work hours are often longer and the stress
greater than in their previous management jobs.73
The roles defined by Mintzberg also apply to nonprofit managers, but they may differ
somewhat. We might expect managers in nonprofit organizations to place more emphasis
on the roles of spokesperson (to “sell” the organization to donors and the public), leader
(to build a mission-driven community of employees and volunteers), and resource alloca-
tor (to distribute government resources or grant funds that are often assigned top-down).
Managers in all organizations—large corporations, small businesses, and nonprofit or-
ganizations—carefully integrate and adjust the management functions and roles to meet
challenges within their own circumstances and keep their organizations healthy.

Remember This
• Good management is just as important for small • Managers in nonprofit organizations direct their
businesses and nonprofit organizations as it is for large efforts toward generating some kind of social im-
corporations. pact rather than toward making money for the
• Managers in these organizations adjust and integrate the organization.
various management functions, activities, and roles to • Managers in nonprofit organizations often struggle with
meet the unique challenges they face. what constitutes effectiveness.
• Managers in small businesses often see their most
important roles as being a spokesperson for the business
and acting as an entrepreneur.

Ch1 Discussion Questions

1. How do you feel about having management responsi- modification. You notice that every memo you receive
bilities in today’s world, characterized by uncertainty, from the marketing manager has been copied to senior
ambiguity, and sudden changes or threats from the en- management. At every company function, she spends
vironment? Describe some skills and competencies that time talking to the big shots. You are also aware that
you think are important to managers working in these sometimes when you and the other project members
conditions. are slaving away over the project, she is playing golf
2. Assume that you are a project manager at a biotech- with senior managers. What is your evaluation of her
nology company, working with managers from re- behavior? As project manager, what do you do?
search, production, and marketing on a major product

Introduction
in September 2012, prompting this response: skills. Do you think people skills can be learned, or do
“@JeffImmelt how come my grandfather got on twitter you need to rethink your career path? If people skills
before you?” Do you think managers should use Twitter can be learned, how would you go about doing it?
and other social media? Can you be an effective man- 7. If managerial work is characterized by variety, fragmen-
ager today without using new media? Why? tation, and brevity, how do managers perform basic
4. Why do some organizations seem to have a new management functions such as planning, which would
CEO every year or two, whereas others have top lead- seem to require reflection and analysis?
ers who stay with the company for many years (e.g., 8. A college professor told her students, “The purpose of a
John Chambers at Cisco)? What factors about the management course is to teach students about manage-
manager or about the company might account for this ment, not to teach them to be managers.” Do you agree
difference? or disagree with this statement? Discuss.
5. Think about the highly publicized safety problems at 9. Discuss some of the ways that organizations and jobs
General Motors (GM). One observer said that a goal have changed over the past ten years. What changes
of efficiency had taken precedence over a goal of qual- do you anticipate over the next ten years? How might
ity within this company. Do you think managers can these changes affect the manager’s job and the skills
improve both efficiency and effectiveness simultane- that a manager needs to be successful?
ously? Discuss. How do you think GM’s leaders should
10. How might the teaching of a management course be
respond to the safety situation?
designed to help people make the transition from indi-
6. You are a bright, hard-working, entry-level manager vidual performer to manager in order to prepare them
who fully intends to rise up through the ranks. Your for the challenges they will face as new managers?
performance evaluation gives you high marks for your

Ch1 Apply Your Skills: Experiential Exercise

Management Aptitude Questionnaire 6. When I have a project or assignment, I really get into
Rate each of the following questions according to the the details rather than the “big picture” issues.
following scale: 1 2 3 4 5
1 I am never like this. 7. I would rather sit in front of my computer than spend
a lot of time with people.
2 I am rarely like this.
1 2 3 4 5
3 I am sometimes like this.
8. I try to include others in activities or discussions.
4 I am often like this.
1 2 3 4 5
5 I am always like this.
9. When I take a course, I relate what I am learning to
1. When I have a number of tasks or homework to do, I other courses I took or concepts I learned elsewhere.
set priorities and organize the work around deadlines. 1 2 3 4 5
1 2 3 4 5
10. When somebody makes a mistake, I want to correct
2. Most people would describe me as a good listener. the person and let her or him know the proper answer
1 2 3 4 5 or approach.
3. When I am deciding on a particular course of action for 1 2 3 4 5
myself (such as hobbies to pursue, languages to study, 11. I think it is better to be efficient with my time when
which job to take, or special projects to be involved in), talking with someone, rather than worry about the
I typically consider the long-term (three years or more) other person’s needs, so that I can get on with my real
implications of what I would choose to do. work.
1 2 3 4 5 1 2 3 4 5
4. I prefer technical or quantitative courses rather than 12. I have a long-term vision of career, family, and other
those involving literature, psychology, or sociology. activities and have thought it over carefully.
1 2 3 4 5 1 2 3 4 5
5. When I have a serious disagreement with someone, 13. When solving problems, I would much rather analyze
I hang in there and talk it out until it is completely some data or statistics than meet with a group of
resolved. people.
1 2 3 4 5 1 2 3 4 5

14. When I am working on a group project and someone Scoring and Interpretation
doesn’t pull a fair share of the load, I am more likely Subtract your scores for questions 6, 10, 14, and 17 from
to complain to my friends rather than confront the the number 6, and then add the total points for the follow-
slacker. ing sections:
1 2 3 4 5
1, 3, 6, 9, 12, 15 Conceptual skills total score _____
15. Talking about ideas or concepts can get me really en-
thusiastic or excited. 2, 5, 8, 10, 14, 17 Human skills total score _____
1 2 3 4 5 4, 7, 11, 13, 16, 18 Technical skills total score _____
16. The type of management course for which this book These skills are three of the skills needed to be a good
is used is really a waste of time. manager. Ideally, a manager should be strong (though not
1 2 3 4 5 necessarily equal) in all three. Anyone noticeably weaker in
17. I think it is better to be polite and not hurt people’s any of these skills should take courses and read to build up
feelings. that skill. For further background on the three skills, please
refer to the explanation on pages 12–14.
1 2 3 4 5
18. Data and things interest me more than people.
1 2 3 4 5

Ch1 Apply Your Skills: Small Group Breakout

Your Best and Worst Managers The worst manager I ever had did the following:
Step 1. On your own, think of two managers that you _______________________________________
have had—the best and the worst. The managers could be
anyone who served as an authority figure over you, includ-
_______________________________________
ing an instructor, a boss at work, a manager of a student
organization, a leader of a student group, a coach, a vol-
unteer committee in a nonprofit organization, and so on. _______________________________________
Think carefully about the specific behaviors that made each
manager the best or the worst and write down what that _______________________________________
manager did. Step 2. Divide into groups of four to six members. Each
The best manager I ever had did the following: person should share his or her experiences, one at a time.
Write on a sheet or whiteboard separate lists of best-
_______________________________________ manager and worst-manager behaviors.
Step 3. Analyze the two lists. What themes or patterns
_______________________________________ characterize “best” and “worst” manager behaviors? What
are the key differences between the two sets of behaviors?
_______________________________________ Step 4. What lessons does your group learn from its
analysis? What advice or “words of wisdom” would you give
_______________________________________ managers to help them be more effective?

Ch1 Apply Your Skills: Ethical Dilemma

Can Management Afford to Look the director of human resources, mentioned that Harry should
Other Way?74 expect a phone call about Roger Jacobs, manager of new
product development. Jacobs had a history of being “pretty
Harry Rull had been with Shellington Pharmaceuticals
horrible” to his subordinates, she said, and one disgruntled
for 30 years. After a tour of duty in the various plants and
employee asked to speak to someone in senior manage-
seven years overseas, Harry was back at headquarters,
ment. After lunch, Harry did some follow-up work. Jacobs’s
looking forward to his new role as vice president of U.S.
performance reviews were stellar, but his personnel file also
marketing.
contained a large number of notes documenting charges
Two weeks into his new job, Harry received some
of Jacobs’s mistreatment of subordinates. The complaints
unsettling news about one of the managers that he super-
ranged from “inappropriate and derogatory remarks” to
vised. During a casual lunch conversation, Sally Barton, the

Introduction
dropped). What was more disturbing was the fact that the
number and the severity of the complaints had increased 1. Ignore the problem. Jacobs’s contributions to new prod-
with each of Jacobs’s ten years with Shellington. uct development are too valuable to risk losing him,
When Harry questioned the company president about and the problems over the past ten years have always
the issue, he was told, “Yeah, he’s had some problems, but worked themselves out anyway. There’s no sense start-
you can’t just replace someone with an eye for new prod- ing something that could make you look bad.
ucts. You’re a bottom-line guy; you understand why we let 2. Launch a full-scale investigation of employee complaints
these things slide.” Not sure how to handle the situation, about Jacobs and make Jacobs aware that his documented
Harry met briefly with Jacobs and reminded him to “keep history over the past ten years has put him on thin ice.
the team’s morale up.” Just after the meeting, Barton called 3. Meet with Jacobs and the employee to try to resolve
to let him know that the problem that she’d mentioned over the current issue, and then start working with Barton
lunch had been worked out. However, she warned, another and other senior managers to develop stronger poli-
employee has now come forward, demanding that her com- cies regarding sexual harassment and treatment of
plaints be addressed by senior management. employees, including clear-cut procedures for handling
complaints.

Ch1 Apply Your Skills: Case for Critical Analysis

SmartStyle Salons both women and instruct them that, when they return to
Jamika Westbrook takes pride in her position as salon work, they are to bring a doctor’s statement and a copy of
manager for SmartStyle Salon, one of six local hair salons any prescriptions that they were given. “They had better be
associated with a large retail store chain located in the sick!” Jamika shouts as she enters her office, slamming the
Southeast and one of five chain store groups under the door more forcefully than she intended. Startled employees
Gold Group umbrella. She oversees a staff of 30, includ- and early-morning customers hear the outburst, and, after
ing hairdressers, a nail technician, receptionists, shampoo a momentary pause, they resumed their activities and quiet
assistants, and a custodian. She enjoys a reputation as a conversation, surprised by the show of managerial anger.
manager who works very hard and takes care of her people. Jamika knows she has let Holly and Carol Jean get away
Hairdressers want to work for her. with unwarranted absences before and worries that she will
Following the salon’s new-hire policy, Jamika began as do it again. She needs every head of hair that they can style
a shampoo assistant and quickly became a top hairdresser to help the salon’s profit.
in the company through a combination of skill, a large and Jamika takes a deep breath and sits at her desk, turning
loyal client base, and long hours at work. In 2007, retiring on the computer and checking e-mails, including one from
manager Carla Weems hand-picked Jamika as her succes- the group manager reminding her to send the salon’s status
sor, and the board quickly approved. report in advance of tomorrow’s meeting. She buzzes
Initially, the salon, located in a suburban mall, managed Marianne on the intercom to request final figures for the
a strong, steady increase, holding its position as one of the report on her desk by 1:00 p.m.
corporate’s top performers. But economic woes hit the area Picking up the phone, she calls Sharon, a manager at
hard, with increases in unemployment, mortgage woes, and another SmartStyle salon. “I really lost my cool in front of
foreclosures among current and potential customers. As everyone, but I’m not apologizing,” Jamika admits, adding
families sought ways to save, the luxury of regular visits to that she wished she had the guts to fire both stylists. “But
the hair salon was among the first logical budget cuts. The this is not the day for that drama. I’ve got that report hang-
past year has reflected this economic reality, and Jamika’s ing over my head. I have no idea how to make things look
salon saw a sharp decrease in profits. better than they are, but I have to come up with something.
Jamika’s stomach is in knots as she arrives at the salon Things look pretty dismal.”
on Monday. Scheduled to fly to Atlanta the next morn- Sharon assures her that she did the best she could deal-
ing for a meeting at corporate, she fears potential staffing ing with two “irresponsible” employees. “What will you do
cuts, but more important, she fears the loss of opportunity if they show up tomorrow with no doctor’s statement?”
to secure her dream job, replacing the retiring manager at “I don’t know. I hope I scared them enough so that
Riverwood Mall, the top-performing salon located in an they’ll come in with something.”
upscale area of the city. “I know you’re worried about the report and the effect
Distracted, Jamika walks past the receptionist, Mari- it might have on the Riverwood job,” Sharon says. “But ev-
anne, who is busily answering the phones. Hanging up the eryone knows you can’t control the economy and its effect
phone, Marianne tells Jamika that Holly and Carol Jean, on the business. Just focus on the positive. You’ll be fine.”
two popular hairdressers, called in sick, and Jamika now At 10:30, as Jamika struggles to put the best possible
has to reschedule their clients. Jamika had denied their spin on the report, she is paged to the receptionist desk
earlier request to travel out of town to attend a concert, to speak to an angry customer. “Another interruption,”
and her irritation is obvious. She orders Marianne to call Jamika fumes to herself. Just then, the door opens and top

stylist/assistant manager Victoria Boone sticks her head herself wanting to hide Victoria’s competence, and she has
into the office. condescendingly reminded management that Victoria is a
“I know you’re busy with the report. I’ll handle this,” “great help to me.”
she says enthusiastically. Now, thinking of Victoria’s cheerful “I’ll handle this,”
“Thanks,” Jamika replies. Jamika rises from her desk and marches to the door. No,
No sooner has she handed off the irate client to Victo- Jamika thinks, I’ll take care of this personally.
ria than she second-guesses the decision. In addition to her
talents as a hairdresser, Victoria had experience as the man- Questions
ager of a successful salon in another city before moving to
the area. Recognizing her organizational and people skills, 1. What positive and negative managerial characteristics
Jamika promoted Victoria to assistant manager soon after does Jamika possess?
her arrival. Now each “I’ll handle this” remark by Victoria 2. How do these traits help or hinder her potential to get
convinces Jamika that her assistant manager is positioning the top position at the Riverwood Mall salon?
herself as a potential rival for the Riverwood job. Jamika
3. How do you think Jamika should have handled each
appreciates her enthusiastic attitude, but she’s also trying
of the incidents with Marianne? Holly and Carol Jean?
to limit her opportunities to lead or appear too competent
Victoria?
before staff, customers, and company officials. Jamika finds

Ch1 On the Job Video Cases

On the Job: The World of Innovative Management
Questions 3. List two activities that leaders at Camp Bow Wow
perform daily, and identify which of the ten managerial
1. List the three broad management skill categories and roles discussed in the chapter figure prominently for
explain which skills are needed most for each of the each.
Camp Bow Wow leaders highlighted in the video.
2. Which activities at Camp Bow Wow require high
efficiency? Which activities require high effectiveness?

Ch1 Endnotes
1. Steven Hyden, “The Winners’ History of Rock and 4. This discussion is based on ideas in Paul J. H. Schoe-
Roll, Part 3: Bon Jovi,” Grantland ( January 21, 2013), maker, Steve Krupp, and Samantha Howland, “Strategic
http://www.grantland.com/story/_/id/8860424 Leadership: The Essential Skills,” Harvard Business
/the-winners-history-rock-roll-part-3-bon-jovi (accessed Review ( January–February 2013): 131–134; Stephen
August 15, 2013); Zack O’Malley Greenburg, “The Denning, “Masterclass: The Reinvention of Manage-
World’s Highest-Paid Musicians 2011,” Forbes ( June 15, ment,” Strategy & Leadership 39, no. 2 (2011): 9–17;
2011), http://www.forbes.com/sites/zackomalley Julian Birkinshaw and Jules Goddard, “What Is Your
greenburg/2011/06/15/the-worlds-highest-paid Management Model?” MIT Sloan Management Review
-musicians/ (accessed August 14, 2013). (Winter 2009): 81–90; Paul McDonald, “It’s Time for
2. Quoted in Zach O’Malley Greenburg, “Jon Bon Jovi: Management Version 2.0: Six Forces Redefining the
Still Rockin, and Making a Killing,” Forbes.com (May Future of Modern Management,” Futures (October
18, 2011), http://www.forbes.com/2011/05/17 2011): 797ff; and Jeanne C. Meister and Karie Willyerd,
/celebrity-100-11-jon-bon-jovi-kanye-west-bieber-still “Leadership 2020: Start Preparing People Now,” Leader-
-rocking.html (accessed August 13, 2013). ship Excellence ( July 2010): 5.
3. This example is based on John Jurgensen, “A Rocker 5. See Joshua Cooper Ramo, The Age of the Unthinkable:
Tunes Up,” Wall Street Journal Online (February 7, 2013), Why the New World Disorder Constantly Surprises
http://online.wsj.com/article/SB1000142412788 Us and What We Can Do About It (New York: Little
7323951904578288213834313862.html (accessed Brown, 2009); and Richard Florida, The Great Reset:
August 14, 2013); Greenburg, “Jon Bon Jovi: Still Rockin, How New Ways of Living and Working Drive Post-Crash
and Making a Killing”; and Hyden, “The Winners’ Prosperity (New York: Harper Collins, 2010).
History of Rock and Roll, Part 3: Bon Jovi.” (The quote 6. Schoemaker, Krupp, and Howland, “Strategic Leader-
from Bon Jovi is from the Greenburg article.) ship: The Essential Skills.”

Introduction
You Kidding?” (CEO Chronicles), Chief Executive Wall Street Journal, August 15, 2009.
(November–December 2010): 14–16; “HCL Tech- 18. Robert L. Katz, “Skills of an Effective Administrator,”
nologies CEO, Vineet Nayar, Gets ‘Leader in the Digital Harvard Business Review 52 (September–October
Age’ Award at CeBIT 2011,” Entertainment Close-Up 1974): 90–102.
(March 11, 2011); Birkinshaw and Goddard, “What 19. David Sacks, “The Way I Work: Yammer,” Inc.
Is Your Management Model?”; Denning, “Masterclass: (November 2011): 122–124.
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10. Christopher S. Stewart, “Oprah Struggles to Build Her C-Suite,” Harvard Business Review (March 2011):
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“Oprah Strikes Exclusive Multi-Year Partnership with ship 2020: Start Preparing People Now,” Leadership
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“Inquiry Hears of Wider Secret Service Misbehavior,” for Predicting Effectiveness,” Journal of Managerial
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14. Anton Troianovski, “Apps: The New Corporate Cost- zation Development Journal 29, no. 2 (2008): 167–181.
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the Mercantile,” Fast Company (March 2012), 82–85, Succession at Xerox,” BusinessWeek ( June 8, 2009):
146–147 (part of the section, “The World’s 50 Most 18–22.
Innovative Companies”). 27. Clinton O. Longenecker, Mitchell J. Neubert, and
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Lesson #1: Skip the Fur,” The Wall Street Journal ( July 15, Managerial Failure in Rapidly Changing Organizations,”
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29. Sydney Finkelstein, “The Five Worst CEOs of 2012,” The Boot, an Assistant Manager at the John Lewis Store
Washington Post, December 18, 2012, http://articles in Cheadle, Talks to Miles Brignall,” The Guardian,
.washingtonpost.com/2012-12-18/national/35907884 October 4, 2003.
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ber 20, 2012); and Josh Williams, “Why Ex-Xbox Boss 43. Henry Mintzberg, Managing (San Francisco: Berrett-
Don Mattrick May Be Zynga’s Savior,” VentureBeat.com, Kohler Publishers, 2009); Mintzberg, The Nature of
July 10, 2013, http://venturebeat.com/2013/07/10 Managerial Work (New York: Harper & Row, 1973);
/why-ex-xbox-boss-don-mattrick-may-be-zyngas-savior/ and Mintzberg, “Rounding Out the Manager’s Job,”
(accessed September 11, 2013). Sloan Management Review (Fall 1994): 11–26.
30. Longenecker, Neubert, and Fink, “Causes and Conse- 44. Robert E. Kaplan, “Trade Routes: The Manager’s
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Organizations.” ics (Spring 1984): 37–52; Rosemary Stewart, “The
31. Eileen Sheridan, “Rise: Best Day, Worst Day,” The Nature of Management: A Problem for Management
Guardian, September 14, 2002. Education,” Journal of Management Studies 21 (1984):
32. Heath Row, “Force Play” (Company of Friends column), 323–330; John P. Kotter, “What Effective General Man-
Fast Company (March 2001): 46. agers Really Do,” Harvard Business Review (November–
33. Rani Molla, “Meet the Women CEOs of the Fortune December 1982): 156–167; and Morgan W. McCall,
500,” The Wall Street Journal, March 7, 2014, http:// Jr., Ann M. Morrison, and Robert L. Hannan, “Studies
blogs.wsj.com/atwork/2014/03/07/meet-the-women of Managerial Work: Results and Methods,” Technical
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34. A. I. Kraut, P. R. Pedigo, D. D. McKenna, and M. D. boro, NC, 1978.
Dunnette, “The Role of the Manager: What’s Really 45. Alison M. Konrad, Roger Kashlak, Izumi Yoshioka,
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Management Executive 19, no. 4 (2005): 122–129. Managers Like to Do? A Five-Country Study,” Group
35. Christopher A. Bartlett and Sumantra Ghoshal, and Organizational Management 26, no. 4 (December
“Changing the Role of Top Management: Beyond Sys- 2001): 401–433.
tems to People,” Harvard Business Review (May–June 46. For a review of the problems faced by first-time manag-
1995): 132–142; and Sumantra Ghoshal and Christo- ers, see Linda A. Hill and Kent Lineback, “Being the
pher A. Bartlett, “Changing the Role of Top Manage- Leader: Observe Three Imperatives,” Leadership Excel-
ment: Beyond Structure to Processes,” Harvard Business lence (November 2012): 15–16; Linda A. Hill, “Becom-
Review ( January–February 1995): 86–96. ing the Boss,” Harvard Business Review ( January 2007):
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Harvard Business Review ( January–February 2011): 36. Time Manager: A Practical Guide to the Management
37. Melissa Korn, “What It’s Like Being a Middle Manager of People, 5th ed. (New York: AMACOM, 2005); J. W.
Today; Pushed to Do More with Less, Today’s Midlevel Lorsch and P. F. Mathias, “When Professionals Have to
Managers Try to Get By,” The Wall Street Journal Manage,” Harvard Business Review ( July–August 1987):
(August 6, 2013), B1; Paul Osterman, “Recognizing the 78–83; R. A. Webber, Becoming a Courageous Manager:
Value of Middle Management,” Ivey Business Journal Overcoming Career Problems of New Managers (Engle-
(November–December 2009), http://www.iveybusiness wood Cliffs, NJ: Prentice Hall, 1991); D. E. Dougherty,
journal.com/article.asp?intArticle_id=866; Lisa Haneberg, From Technical Professional to Corporate Manager: A
“Reinventing Middle Management,” Leader to Leader (Fall Guide to Career Transition (New York: Wiley, 1984);
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Managers,” Harvard Business Review (September 2003): ing Management (March 1989): 42–83; M. K. Badawy,
72–79; Rosabeth Moss Kanter, On the Frontiers of Man- Developing Managerial Skills in Engineers and Scientists:
agement (Boston: Harvard Business School Press, 2003). Succeeding as a Technical Manager (New York: Van
38. “Using Their Own Words, Middle Managers Describe Nostrand Reinhold, 1982); and M. London, Developing
the Nature of Their Jobs,” The Wall Street Journal Managers: A Guide to Motivating and Preparing People
(August 7, 2013), B9. for Successful Managerial Careers (San Francisco, CA:
39. Ibid. Jossey-Bass, 1985).
40. Reported in Ray Fisman, “In Defense of Middle Man- 47. Based on Evelyn Rusli, Nicole Perlroth, and Nick
agement,” The Washington Post, October 16, Bilton, “The Hoodie amid the Pinstripes: As Facebook

Introduction
pany?” International Herald Tribune, May 14, 2012, 17. M. Pavett and Alan W. Lau, “Managerial Work:
48. This discussion is based on Linda A. Hill, Becoming a The Influence of Hierarchical Level and Functional
Manager: How New Managers Master the Challenges of Specialty,” Academy of Management Journal 26 (1983):
Leadership, 2d ed. (Boston: Harvard Business School 170–177; and Colin P. Hales, “What Do Managers
Press, 2003), 6–8; and Hill, “Becoming the Boss.” Do? A Critical Review of the Evidence,” Journal of
49. See also the “Boss’s First Steps” sidebar in Erin White, Management Studies 23 (1986): 88–115.
“Learning to Be the Boss,” The Wall Street Journal, 64. Monica Langley, “Chief of Embattled Boeing Steers Clear
November 21, 2005, http://online.wsj.com/news of the Spotlight,” The Wall Street Journal (February 22,
/articles/SB113252950779302595 (accessed May 11, 2013): A1; and Daniel Michaels and Andy Pasztor,
2014); and Belker and Topchik, The First-Time Manager. “Large Boeing Buyer Praises Communication,” The Wall
50. Quoted in Eileen Zimmerman, “Are You Cut Out Street Journal ( January 22, 2013), http://online.wsj.com
for Management?” (Career Couch column), The /article/SB10001424127887324624404578257120942
New York Times, January 15 2011, www.nytimes 399436.html (accessed August 19, 2013).
.com/2011/01/16/jobs/16career.html (accessed June 65. Naween Mangi, “Convoys and Patdowns: A Day
14, 2012). at the Office in Pakistan,” Bloomberg Businessweek
51. Hill and Lineback, “Being the Leader.” ( July 25–July 31, 2011): 11–13.
52. Mintzberg, Managing, 17–41. 66. Joseph Goldstein, “City Homicides Drop Sharply,
53. Study reported in Rachel Emma Silverman, “Where’s Again; Police Cite New Antigang Strategy,” The New
The Boss? Trapped in a Meeting,” The Wall Street Jour- York Times ( June 28, 2013), http://www.nytimes
nal, February 14, 2012, http://online.wsj.com/article .com/2013/06/29/nyregion/city-homicides-drop
/SB100014240529702046426045772150135045675 -sharply-again-police-cite-new-antigang-strategy.html
48.html (accessed June 14, 2012). ?_r=0 (accessed August 19, 2013); and David Whitford,
54. Mintzberg, Managing, pp. 17–41. “Does Ray Kelly Have the World’s Toughest Job?”
55. Based on Allan Halcrow, “A Day in the Life of Kathy Fortune (October 29, 2012): 152–160.
Davis: Just Another Day in HR,” Workforce Manage- 67. Guy Chazan and Monica Langley, “Dudley Faces
ment 77, no. 6 ( June 1998): 56–62. Daunting To-Do List,” The Wall Street Journal Europe,
56. Mintzberg, Managing, pp. 17–41. July 27, 2010.
57. Carol Hymowitz, “Packed Calendars Rule,” The Asian 68. Tim O’Shaughnessy, “The Way I Work: LivingSocial,”
Wall Street Journal, June 16, 2009; and “The 18-Hour Inc. (March 2012): 104–108.
Day,” The Conference Board Review (March–April 69. Jean Crawford, “Profiling the Non-Profit Leader of
2008): 20. Tomorrow,” Ivey Business Journal (May–June 2010),
58. Adam Shell, “CEO Profile: Casting a Giant (New www.iveybusinessjournal.com/topics/leadership
Jersey) Net,” USA TODAY, August 25, 2008; Matthew /profiling-the-non-profit-leader-of-tomorrow (accessed
Boyle and Jia Lynn Yang, “All in a Day’s Work,” Fortune June 14, 2012).
(March 20, 2006): 97–104. 70. The following discussion is based on Peter F. Drucker,
59. Korn, “What It’s Like Being a Middle Manager Today.” Managing the Non-Profit Organization: Principles and
60. Frankki Bevins and Aaron De Smet, “Making Time Practices (New York: HarperBusiness, 1992); and
Management the Organization’s Priority,” McKinsey Thomas Wolf, Managing a Nonprofit Organization
Quarterly ( January 2013), http://www.mckinsey.com (New York: Fireside/Simon & Schuster, 1990).
/insights/organization/making_time_management 71. Christine W. Letts, William P. Ryan, and Allen Gross-
_the_organizations_priority (accessed August 19, 2013). man, High Performance Nonprofit Organizations (New
61. “Four CEOs’ Tips on Managing Your Time,” The Wall York: Wiley & Sons, 1999), pp. 30–35.
Street Journal, February 14, 2012, http://online.wsj 72. Carol Hymowitz, “In Sarbanes-Oxley Era, Running
.com/article/SB1000142405297020488330457722155 a Nonprofit Is Only Getting Harder,” The Wall Street
1714492724.html (accessed June 14, 2012). Journal, June 21, 2005; and Bill Birchard, “Nonprofits by
62. Bevins and De Smet, “Making Time Management the the Numbers,” CFO ( June 2005): 50–55.
Organization’s Priority”; A. Garrett, “Buying Time to 73. Eilene Zimmerman, “Your True Calling Could Suit
Do the Things That Really Matter,” Management Today a Nonprofit” (interview, Career Couch column), The
( July 2000): 75; and Robert S. Kaplan, “What to Ask New York Times, April 6, 2008, http://www.nytimes
the Person in the Mirror,” Harvard Business Review .com/2008/04/06/jobs/06career.html?_r=0 (accessed
( January 2007): 86–95. May 11, 2014).
63. Mintzberg, Managing; Lance B. Kurke and Howard 74. Based on Doug Wallace, “A Talent for Mismanagement:
E. Aldrich, “Mintzberg Was Right! A Replication What Would You Do?” Business Ethics 2 (November–
and Extension of The Nature of Managerial Work,” December 1992): 3–4.

The Evolution of
Management Thinking
Are You a New-Style or After studying this chapter, you should be able to:
Chapter Outline

Learning Outcomes

an Old-Style Manager? 1. Summarize how historical forces influence the practice of

The Historical Struggle management.
The Things of Production Versus the
2. Explain how social business is bridging the historical struggle
Humanity of Production
between managing the “things of production” and the “humanity
Is Social Business the Answer? of production.”
Classical Perspective
3. Describe the major components of the classical and humanistic
Scientific Management
management perspectives.
Bureaucratic Organizations
Administrative Principles 4. Discuss the management science approach and its current use in
organizations.
Humanistic Perspective
Early Advocates 5. Explain the major concepts of systems thinking and the contingency
Human Relations Movement view.
New Manager Self-Test: 6. Provide examples of contemporary management tools and explain
Evolution of Style why these trends change over time.
Human Resources Perspective 7. Describe the management changes brought about by a technology-
Behavioral Sciences Approach driven workplace, including the role of big data analytics and supply
Management Science chain management.
Recent Historical Trends 8. Explain how organizations are implementing the ideas of bossless
Systems Thinking Contingency View workplaces and employee engagement to facilitate a people-driven
Innovative Management Thinking workplace.
Into the Future
Contemporary Management Tools
Managing the Technology-Driven
Workplace
Managing the People-Driven Workplace

Introduction
Are You a New-Style or an Old-Style Manager?1
Instructions: The following are various behaviors in which a manager may engage when relating to subordinates.
Read each statement carefully and rate each one Mostly True or Mostly False, to reflect the extent to
which you would use that behavior.

2
Mostly True Mostly False

Environment
1. Supervise my subordinates closely to get better work from them. __________ __________
2. Set the goals and objectives for my subordinates and sell them on the merits of
__________ __________
my plans.
3. Set up controls to ensure that my subordinates are getting the job done. __________ __________
4. Make sure that my subordinates’ work is planned out for them. __________ __________
5. Check with my subordinates daily to see if they need any help. __________ __________
6. Step in as soon as reports indicate that progress on a job is slipping. __________ __________ 3
7. Push my people if necessary in order to meet schedules. __________ __________

Planning
8. Have frequent meetings to learn from others what is going on. __________ __________

Scoring And Interpretation: Add the total number of “Mostly True” answers and mark your score on
the scale below. Theory X tends to be “old-style” management and Theory Y “new-style” because
the styles are based on different assumptions about people. To learn more about these assumptions,
you can refer to Exhibit 2.4 later in this chapter and review the assumptions related to Theory X and
Theory Y. Strong Theory X assumptions are typically considered inappropriate for today’s workplace.
Where do you fit on the X-Y scale? Does your score reflect your perception of yourself as a current 4
or future manager?

rganizing
X-Y Scale
Theory X 10 5 0 Theory Y

OOrganizing
W
hen members of Sonya Green’s customer support team at Git-Hub, a collabo-
ration software company in San Francisco, want to change a procedure, they
5
just do it. No need to check with Green, who is ostensibly a team leader. Green

Le a d i n g
is what Git-Hub refers to as a “primarily responsible person (PRP).” The company avoids
the term manager because top executives here expect and assume that people can manage
themselves.2 It is an extreme Theory Y approach being adopted by a number of companies
that are embracing the trend toward less-hierarchical, even bossless, organizations (Theory Y
will be explained in detail later in the chapter). At least 18 organizations around the
world, including French automotive components manufacturer FAVI, tomato processor
Morning Star, based in Woodland, California, and Spain’s diversified Mondragon Corpo-
ration, are operated as primarily bossless workplaces.3 Although some management and 6
human resource (HR) professionals and scholars question whether the bossless trend will
Controlling

last for long,4 it is interesting to note that some of these companies have been operating
without traditional bosses for decades. When Jean-François Zobrist took over as CEO of
FAVI in 1983, he eliminated two things: the personnel department and the bosses. “I have
no idea what people are doing,” Zobrist told Fast Company magazine. He believes that since

the people on the front lines are the ones with the expertise to do the work, they are capable
of working without someone looking over their shoulders.5
Some organizations will continue to operate with little or no hierarchy, and others will
move toward a more hierarchical structure. Managers are always on the lookout for fresh
ideas, innovative management approaches, and new tools and techniques. Management
philosophies and organizational forms change over time to meet new needs and respond
to current challenges. The workplace of today is different from what it was 50 years ago—
indeed, from what it was even 10 years ago—yet historical concepts form the backbone of
management education.6 In addition, some management practices that seem modern
have actually been around for a long time. Techniques can gain and lose popularity
because of shifting historical forces and the persistent need to balance human needs
Go to the “Small with the needs of production activities.7
Group Breakout” This chapter provides a historical overview of the ideas, theories, and manage-
on page 65, which ment philosophies that have contributed to making the workplace what it is today.
pertains to how The final section of the chapter looks at some recent trends and current approaches
historical events and that build on this foundation of management understanding. This foundation illus-
forces shape the lives trates that the value of studying management lies not in learning current facts and
of individuals. research, but in developing a perspective that will facilitate the broad, long-term view
needed for management success.

The Historical Struggle

Studying history doesn’t mean merely arranging events in chronological order; it means
developing an understanding of the impact of societal forces on organizations. Studying
history is a way to achieve strategic thinking, see the big picture, and improve conceptual
skills. Social, political, and economic forces in the broader society influence organizations
and the practice of management over time.8 Social forces refer to those aspects of a cul-
ture that guide and influence relationships among people. What do people value? What
are the standards of behavior among people? These forces shape what is known as the
social contract, which refers to the unwritten, common rules and perceptions about rela-
tionships among people and between employees and management. Political forces refer to

Green Power
Drop Back and Punt
Glenn Rink’s innovative product—popcornlike built a reputation for offering low-cost alternatives to
sponges for absorbing oil spills—received a cool re- address the cleanup needs of cities struggling with a
ception in the 1990s. Corporate skeptics said that variety of water pollution problems. The strategy paid
traditional skimming of oil off water remained the off. In 2011, a revitalized Abtech, maker of the Smart
preferred choice for disaster cleanup. Blocked by Sponge Plus, partnered with the huge company Waste
resistance to his product, Rink, founder of Abtech Management Inc. as the exclusive North American
Industries, followed the historic and time-honored distributor to cities, and oil cleanup orders began
tradition of football teams, which sometimes need pouring in. To date, Smart Sponge Plus has been used
to drop back and punt before they can go on of- in more than 15,000 spill locations worldwide.
fense again. Source: “Innovation #71: Glenn Rink, Founder of Abtech Industries,” Fast
Rink decided to focus on smaller-scale disasters Company (June 2012): 136 (part of “The 100 Most Creative People in
instead. For more than a decade, Abtech Industries Business 2012,” pp. 78–156).

Introduction
The People-Driven Workplace
(Bossless)
Social Business
(Social Media)
The Technology - Driven Workplace
(Big Data)
Total Quality Management

Contingency View

Systems Thinking

Management Science Perspective

Humanistic Perspective

Classical
Perspective

1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

the influence of political and legal institutions on people and organizations. Some manag-
ers expect increasing government regulation in the coming years, for example, which will
strongly affect organizations.9 Economic forces pertain to the availability, production, and
distribution of resources in a society. Governments, military agencies, churches, schools,
and business organizations in every society need resources to achieve their goals, and eco-
nomic forces influence the allocation of scarce resources.
Management practices and perspectives vary in response to social, political, and eco-
nomic forces in the larger society. Exhibit 2.1 illustrates the evolution of significant man-
agement perspectives over time. The timeline reflects the dominant time period for each
approach, but elements of each are still used in today’s organizations.10

The Things of Production Versus the Humanity

of P roduction
One observation from looking at the timeline in Exhibit 2.1 is that there has long been
a struggle within management to balance “the things of production” and “the humanity
of production.”11 When forces either outside or within the organization suggest a need
for change to improve efficiency or effectiveness, managers have often responded with a
technology or numbers-oriented solution that would make people little more than a cog in
a big machine. For instance, as the United States shifted from a world of small towns and
small businesses to an industrialized network of cities and factories in the late nineteenth
century, people began looking at management as a set of scientific practices that could be
measured, studied, and improved with machinelike precision (the classical perspective).
Frederick Taylor wrote that “the best management is a true science, resting upon clearly
defined laws, rules, and principles.” By the 1920s, there was a minor rebellion against this
emphasis on the quantifiable with a call for more attention to human and social needs
(the humanistic perspective). In the first issue of the Harvard Business Review (1922),
Dean Wallace B. Donham wrote that the “development, strengthening, and multiplication

Concept Connection of socially-minded business men is the central problem of

business.”12 This dilemma—the scientific numbers-driven
push for greater productivity and profitability and the call
for more humanistic, people-oriented management—has
continued to the present day.

Is Social Business Answer?

© iStockphoto.com/Blend_Images
the
Social business, which refers to using social media tech-
nologies for interacting with and facilitating communication
and collaboration among employees, customers, and other
stakeholders, is one current answer to the historical struggle.
Social media programs include company online com-
Social media initiatives, such as setting up a Facebook page or munity pages, wikis for virtual collaboration, social media
Twitter account, have become commonplace among businesses sites such as Facebook or LinkedIn, video channels such
large and small. However, all businesses need to keep track of as YouTube, microblogging platforms such as Twitter, and
how these steps are affecting the business. Some results—such
as customer sentiment and goodwill—are hard to measure,
company online forums.
while other results—such as an increase in sales following a For the first time, a new technology (thing of production)
particular social media advertising campaign—can be used to adds directly to the humanity of production. Social media
quantify the financial gains realized from social media initiatives. technology can improve efficiency, increase productivity,
and facilitate faster and smoother operations by improving
communication and collaboration within and across firms.13
Social media can also improve the human aspect of organizations
by facilitating communication, collaboration, and knowledge sharing
to tap into employee capabilities and create a competitive advantage.
“Social media is no longer In addition, social media technology is being used by com-
panies to build trusting relationships with customers.14 An early
the wave of the future. It leader in this realm was Morgan Stanley Wealth Management. As
is already a state-of-the- director of digital strategy, Lauren Boyman worked closely with the
company’s sales manager and investment advisors to use Twitter
art leadership tool that and other social media for communicating with clients.15 Dell
launched a social media command room to monitor what is being
surpasses many traditional said about the company on social media platforms.16 Managers
approaches to listening in other companies set up alerts on Google or Bing that let them
know when something has been said on social media about them,
and communicating with their company, their products, and so forth.17
stakeholders.” Just as important, social media can build stronger, more authen-
tic relationships between managers and employees. Mark Reuss left
—Leslie Gaines-Ross, chief reputation General Motors (GM) in Australia to run GM’s operations in North
strategist at Weber Shandwick and America just after the company filed for bankruptcy in 2009 and
author of CEO Capital: A Guide to Building
was implementing plans to eliminate more than 2,000 U.S. dealer-
CEO Reputation and Company Success
ships. Reuss chose to communicate with the dealer network through
a “get to know you” messaging part of Facebook rather than through
e-mails or other corporate communications. The strategy helped
Hot build trust and credibility because Reuss made himself accessible and was willing to engage
Topic others authentically. “No matter what happened,” Reuss said, “they knew that I was listen-
ing and that they had . . . someone to talk to in the company and they could do it instantly.
And if you look at how we got through that period and the dealers that we have and the
trust that I have built . . . it’s because of that conversation on Facebook.”18 Other managers
are also finding social media a great way to quickly build trust and credibility. Shortly after
arriving as the new CEO of MassMutual, Roger Crandall attended the company’s biggest
sales conference and was asked by an employee with a Flip cam if she could record him at

Introduction
the Life” was available for the whole company to watch in real time, and “was a great way to
create a personal connection,” Crandall said.19 Some managers have begun incorporating
video streams into their blogs because they allow them to engage with people in real time
on a highly personal level.20
Social business is one of the most recent approaches in the evolution of management
thinking and practice, as shown in Exhibit 2.1. In the following sections, we describe some
of the other major management perspectives listed in the exhibit that reflect the historical
struggle.

Remember This
• Managers are always on the lookout for new techniques • Economic forces affect the availability, production, and
and approaches to meet shifting organizational needs. distribution of a society’s resources.
• Looking at history gives managers a broader perspective • The struggle to balance “the things of production” with
for interpreting and responding to current opportunities the “humanity of production” has continued from the
and problems. 19th century to today.
• Management and organizations are shaped by forces in • Social business, which refers to using social media
the larger society. technologies for interacting with and facilitating com-
• Social forces are aspects of a society that guide and munication and collaboration among employees, cus-
influence relationships among people, such as their tomers, and other stakeholders, is one current answer to
values, needs, and standards of behavior. the historical struggle.
• Political forces relate to the influence of political and • Social media programs include company online
legal institutions on people and organizations. community pages, wikis for virtual collaboration, social
• The increased role of government in business is one media sites such as Facebook or LinkedIn, video chan-
example of a political force. nels such as YouTube, microblogging platforms such as
Twitter, and company online forums.

Classical Perspective
The practice of management can be traced to 3000 b.c., to the first government organiza-
tions developed by the Sumerians and Egyptians, but the formal study of management is
relatively recent.21 The early study of management as we know it today began with what is
now called the classical perspective.
The classical perspective on management emerged during the nineteenth and early
twentieth centuries. The factory system that began to appear in the 1800s posed chal-
lenges that earlier organizations had not encountered. Problems arose in tooling the plants,
organizing managerial structure, training employees (many of them non-English-speaking
immigrants), scheduling complex manufacturing operations, and dealing with increased
labor dissatisfaction and resulting strikes.
These myriad new problems and the development of large, complex organizations de-
manded a new approach to coordination and control, and a “new sub-species of economic
man—the salaried manager”22—was born. Between 1880 and 1920, the number of profes-
sional managers in the United States grew from 161,000 to more than 1 million. 23 These
professional managers began developing and testing solutions to the mounting challenges
of organizing, coordinating, and controlling large numbers of people and increasing worker
productivity. Thus began the evolution of modern management with the classical perspective.

Concept Connection This perspective contains three subfields, each with a

slightly different emphasis: scientific management, bureau-
cratic organizations, and administrative principles.24

Scientific Management
emphasizes scientifically deter- Scientific management
mined jobs and management practices as the way to improve
efficiency and labor productivity. In the late 1800s, a young
engineer, Frederick Winslow Taylor (1856–1915), proposed
that workers “could be retooled like machines, their physi-

Hulton Archive/Getty Images

cal and mental gears recalibrated for better productivity.”25
Taylor insisted that improving productivity meant that man-
agement itself would have to change and, further, that the
manner of change could be determined only by scientific
study; hence, the label scientific management emerged. Taylor
Automaker Henry Ford made extensive use of Frederick
suggested that decisions based on rules of thumb and tra-
Taylor’s scientific management techniques, as illustrated by dition be replaced with precise procedures developed after
this automobile assembly line at a Ford plant circa 1930. Ford careful study of individual situations.26
replaced workers with machines for heavy lifting and moving The scientific management approach is illustrated by the
autos from one worker to the next. This reduced worker hours
and improved efficiency and productivity. Under this system, a
unloading of iron from rail cars and reloading finished steel
Ford car rolled off the assembly line every 10 seconds. for the Bethlehem Steel plant in 1898. Taylor calculated that
with the correct movements, tools, and sequencing, each
man was capable of loading 47.5 tons per day instead of the
typical 12.5 tons. He also worked out an incentive system that paid each man $1.85 a day
for meeting the new standard, an increase from the previous rate of $1.15. Productivity at
Bethlehem Steel shot up overnight.
Although known as the father of scientific management, Taylor was not alone in this
area. Henry Gantt, an associate of Taylor’s, developed the Gantt chart, a bar graph that
measures planned and completed work along each stage of production by time elapsed.
Two other important pioneers in this area were the husband-and-wife team of Frank
B. and Lillian M. Gilbreth. Frank B. Gilbreth (1868–1924) pioneered time and motion
study and arrived at many of his management techniques independent of Taylor. He
stressed efficiency and was known for his quest for the one best way to do work. Al-
though Gilbreth is known for his early work with bricklayers, his work had great impact
on medical surgery by drastically reducing the time that patients spent on the operat-
ing table. Surgeons were able to save countless lives through the application of time
and motion study. Lillian M. Gilbreth (1878–1972) was more interested in the human
aspect of work. When her husband died at the age of 56, she had 12 children ages 2 to
19. The undaunted “first lady of management” went right on with her work. She pre-
sented a paper in place of her late husband, continued their seminars and consulting,
lectured, and eventually became a professor at Purdue University.27 She pioneered in
the field of industrial psychology and made substantial contributions to human resource
management.
Exhibit 2.2 shows the basic ideas of scientific management. To use this approach, man-
agers should develop standard methods for doing each job, select workers with the ap-
propriate abilities, train workers in the standard methods, support workers and eliminate
interruptions, and provide wage incentives.
The ideas of scientific management that began with Taylor dramatically increased
productivity across all industries, and they are still important today. Indeed, the idea of
engineering work for greater productivity has enjoyed a renaissance in the retail industry.

Introduction
General Approach
• Developed standard method for performing each job
• Selected workers with appropriate abilities for each job
• Trained workers in standard methods
• Supported workers by planning their work and eliminating interruptions
• Provided wage incentives to workers for increased output
Contributions
• Demonstrated the importance of compensation for performance
• Initiated the careful study of tasks and jobs
• Demonstrated the importance of personnel selection and training
Criticisms
• Did not appreciate the social context of work and higher needs of workers
• Did not acknowledge variance among individuals
• Tended to regard workers as uninformed and ignored their ideas and suggestions

Supermarket chains such as Meijer Inc. and Hannaford, for example, use computerized
labor waste elimination systems based on scientific management principles. The system
breaks down tasks such as greeting a customer, working the register, scanning items, and
so forth, into quantifiable units and devises standard times to complete each task. Ex-
ecutives say the computerized system has allowed them to staff stores more efficiently
because people are routinely monitored by computer and are expected to meet strict
standards.28
A Harvard Business Review article discussing innovations that shaped modern manage-
ment puts scientific management at the top of its list of 12 influential innovations. Indeed,
the ideas of creating a system for maximum efficiency and organizing work for maximum
productivity are deeply embedded in our organizations.29 However, because scientific man-
agement ignores the social context and workers’ needs, it can lead to increased conflict
and clashes between managers and employees. The United Food and Commercial Work-
ers Union, for instance, filed a grievance against Meijer in connection with its cashier-
performance system. Under such performance management systems, workers often feel
exploited—a sharp contrast from the harmony and cooperation that Taylor and his fol-
lowers had envisioned.

Bureaucratic Organizations
A systematic approach developed in Europe that looked at the organization as a whole
is the bureaucratic organizations approach, a subfield within the classical perspective.
Max Weber (1864–1920), a German theorist, introduced most of the concepts on bureau-
cratic organizations.30
During the late 1800s, many European organizations were managed on a personal,
family-like basis. Employees were loyal to a single individual rather than to the orga-
nization or its mission. The dysfunctional consequence of this management practice
was that resources were used to realize individual desires rather than organizational
goals. Employees in effect owned the organization and used resources for their own
gain rather than to serve customers. Weber envisioned organizations that would be
managed on an impersonal, rational basis. This form of organization was called a
bureaucracy. Exhibit 2.3 summarizes the six characteristics of bureaucracy as specified
by Weber.

exhibit 2.3 Characteristics of Weberian Bureaucracy

Division of labor,
with clear definitions
of authority and
responsibility

Personnel selected and

Positions organized in a
promoted based on
hierarchy of authority
technical qualifications

Managers subject to
Administrative acts
rules and procedures that
and decisions recorded
will ensure reliable,
in writing
predictable behavior

Management separate
from the ownership of the
organization

SOURCE: Adapted from Max Weber, The Theory of Social and Economic Organizations, ed. and trans. A. M. Henderson and Talcott Parsons
(New York: Free Press, 1947), pp. 328–337.

Weber believed that an organization based on rational authority

would be more efficient and adaptable to change because continuity
“Students would be more is related to formal structure and positions rather than to a particular
person, who may leave or die. To Weber, rationality in organizations
likely to have a positive meant employee selection and advancement based not on whom you
impact on the future of know, but rather on competence and technical qualifications, which
are assessed by examination or according to specific training and
management if they were experience. The organization relies on rules and written records for
continuity. In addition, rules and procedures are impersonal and ap-
more engaged with the plied uniformly to all employees. A clear division of labor arises from
history and traditions of distinct definitions of authority and responsibility, legitimized as of-
ficial duties. Positions are organized in a hierarchy, with each posi-
management—particularly tion under the authority of a higher one. The manager gives orders
that of a German successfully not on the basis of his or her personality, but on the legal
power invested in the managerial position.
sociologist [Weber] who The term bureaucracy has taken on a negative meaning in today’s
organizations and is associated with endless rules and red tape. We
died nearly 100 years ago.” have all been frustrated by waiting in long lines or following seem-
—Stephen Cummings and Todd Bridgman, ingly silly procedures. However, the value of bureaucratic principles
Victoria University of Wellington, is still evident in many organizations, such as United Parcel Service
New Zealand (UPS), sometimes nicknamed Big Brown.

Introduction
UPS is the largest package delivery company in the world and a leading global provider of
specialized transportation and logistics services. The company operates in more than 200 Way
countries and territories worldwide.
UPS
Why has UPS been so successful? One important factor is the concept of bureaucracy.
UPS operates according to strict rules and regulations. It teaches drivers an astounding 340
steps for how to deliver a package correctly, such as how to load the truck, how to fasten
their seat belts, how to walk, and how to carry their keys. Specific safety rules apply to driv-
ers, loaders, clerks, and managers. Strict dress codes are enforced—clean uniforms (called
browns), every day, black or brown polished shoes with nonslip soles, no beards, no hair below
the collar, no tattoos visible during deliveries, and so on. Before each shift, drivers conduct a
“Z-scan,” a Z-shaped inspection of the sides and front of their vehicles. Employees are asked
to clean off their desks at the end of each day so they can start fresh the next morning. Man-
agers are given copies of policy books with the expectation that they will use them regularly,
and memos on various policies and rules circulate by the hundreds every day.
UPS has a well-defined division of labor. Each plant consists of specialized drivers, loaders,
clerks, washers, sorters, and maintenance personnel. UPS thrives on written records, and it
has been a leader in using new technology to enhance reliability and efficiency. All drivers
have daily worksheets that specify performance goals and work output.Technical qualification
is the criterion for hiring and promotion. The UPS policy book says the leader is expected to
have the knowledge and capacity to justify the position of leadership. Favoritism is forbidden.
The bureaucratic model works just fine at UPS, “the tightest ship in the shipping business.”31

As this example shows, there are positive as well as negative aspects associated
with bureaucratic principles. Weber also struggled with the good and bad sides of
bureaucracy.32 Although he perceived bureaucracy as a threat to basic personal liber- Read the “Ethical
ties, he recognized it as the most efficient and rational form of organizing. Rules and Dilemma” on pages
other bureaucratic procedures provide a standard way of dealing with employees. 65–66, which pertains
Everyone gets equal treatment, and everyone knows what the rules are. Almost every to problems with
organization needs to have some rules, and rules multiply as organizations grow bureaucracy.
larger and more complex. Some examples of rules governing employee behavior in a
furniture manufacturing company, for example, might include:33
●● Employees must wear protective eye and ear equipment when using machines.
●● Employees must carry out any reasonable duty assigned to them, including shop
maintenance. What would it be like for
●● Employees must maintain an accurate time sheet, showing job and activity. you to be a manager in a
bureaucratic organization?
●● The following will be considered causes for dismissal: excessive tardiness or ab-
Complete the
senteeism; willful damage to equipment; continual careless or unsafe behavior;
“Experiential Exercise,”
theft; being under the influence of alcohol or illegal drugs while at work.
on pages 64–65, to find
out if you would thrive in
that type of environment.
Administrative Principles
Another major subfield within the classical perspective is known as the administrative
principles approach. Whereas scientific management focused on the productivity of the
individual worker, the administrative principles approach focused on the total organi-
zation. The major contributor to this approach was Henri Fayol (1841–1925), a French
mining engineer who worked his way up to become head of a large mining group known
as Comambault. Pieces of Comambault survive today as part of ArcelorMittal, the world’s
largest steel and mining company. In his later years, Fayol wrote down his concepts on ad-
ministration, based largely on his own management experiences.34

In his most significant work, General and Industrial Management, Fayol discussed 14
general principles of management, several of which are part of management philosophy
today. For example:
●● Unity of command. Each subordinate receives orders from one—and only one—superior.
●● Division of work. Managerial work and technical work are amenable to specialization
to produce more and better work with the same amount of effort.
●● Unity of direction. Similar activities in an organization should be grouped together
under one manager.
●● Scalar chain. A chain of authority extends from the top to the bottom of the organiza-
tion and should include every employee.
Fayol felt that these principles could be applied in any organizational setting. He also
identified five basic functions or elements of management: planning, organizing, command-
ing, coordinating, and controlling. These functions underlie much of the general approach to
today’s management theory.
The overall classical perspective as an approach to management was very powerful and
gave companies fundamental new skills for establishing high productivity and effective treat-
ment of employees. Indeed, the United States surged ahead of the world in management
techniques, and other countries, especially Japan, borrowed heavily from American ideas.

Remember This
• The study of modern management began in the late • Another subfield of the classical perspective is the
nineteenth century with the classical perspective, which bureaucratic organizations approach, which
took a rational, scientific approach to management and emphasizes management on an impersonal, rational
sought to turn organizations into efficient operating basis through elements such as clearly defined authority
machines. and responsibility, formal recordkeeping, and separation
• Scientific management is a subfield of the classical of management and ownership.
perspective that emphasizes scientifically determined • Max Weber introduced most of the concepts about
changes in management practices as the solution to bureaucratic organizations.
improving labor productivity. • The administrative principles approach is a subfield of
• Frederick Winslow Taylor is known as “the father of the classical perspective that focuses on the total organi-
scientific management.” zation rather than the individual worker and delineates
• Scientific management is considered one of the the management functions of planning, organizing,
most significant innovations influencing modern commanding, coordinating, and controlling.
management. • Henri Fayol, a major contributor to the administrative
• Some supermarket chains are using computerized principles approach, outlined 14 general principles of
systems based on scientific management principles to management, several of which are a part of management
schedule employees for maximum efficiency. philosophy today.

Humanistic Perspective
The humanistic perspective on management emphasized the importance of understand-
ing human behaviors, needs, and attitudes in the workplace, as well as social interactions
and group processes.35 There are three primary subfields based on the humanistic perspec-
tive: the human relations movement, the human resources perspective, and the behavioral
sciences approach.

Introduction
This 1914 photograph shows
Two early advocates of a more hu-
the initiation of a new arrival at
manistic approach were Mary Parker a Nebraska planting camp. This
Follett and Chester I. Barnard. Mary initiation was not part of the
Parker Follett (1868–1933) was formal rules and illustrates the
significance of the informal
trained in philosophy and political
organization described by
science, but she applied herself in Barnard. Social values and
many fields, including social psychol- behaviors were powerful forces
ogy and management. She wrote that could help or hurt the
planting organization, depending
of the importance of common su-
on how they were managed.
perordinate goals for reducing con-
flict in organizations.36 Her work
was popular with businesspeople of
her day but was often overlooked
by management scholars.37 Follett’s
National Archives

ideas served as a contrast to scientific

management and are re-emerging
as applicable for modern managers
dealing with rapid changes in today’s
global environment. Her approach to
leadership stressed the importance of
people rather than engineering techniques. She offered the pithy admonition, “Don’t hug
your blueprints,” and analyzed the dynamics of management-organization interactions.
Follett addressed issues that are timely today, such as ethics, power, and leading in a way
that encourages employees to give their best. The concepts of empowerment, facilitating
rather than controlling employees, and allowing employees to act depending on the author-
ity of the situation opened new areas for theoretical study by Chester Barnard and others.38
Chester I. Barnard (1886–1961) studied economics at Harvard but failed to receive
a degree because he did not take a course in laboratory science. He went to work in the
statistical department of AT&T, and in 1927, he became president of New Jersey Bell. One
of Barnard’s significant contributions was the concept of the informal organization. The
informal organization occurs in all formal organizations and includes cliques, informal net-
works, and naturally occurring social groupings. Barnard argued that organizations are not
machines and stressed that informal relationships are powerful forces that can help the orga-
nization if properly managed. Another significant contribution was the acceptance theory of
authority, which states that people have free will and can choose whether to follow manage-
ment orders. People typically follow orders because they perceive positive benefit to them-
selves, but they do have a choice. Managers should treat employees properly because their
acceptance of authority may be critical to organization success in important situations.39

Human Relations Movement

The human relations movement was based on the idea that truly effective control comes
from within the individual worker rather than from strict, authoritarian control.40 This
school of thought recognized and directly responded to social pressures for enlightened
treatment of employees. The early work on industrial psychology and personnel selection
received little attention because of the prominence of scientific management. Then a series
of studies at a Chicago electric company, which came to be known as the Hawthorne
studies, changed all that.
Beginning about 1895, a struggle developed between manufacturers of gas and electric
lighting fixtures for control of the residential and industrial market.41 By 1909, electric
lighting had begun to win, but the increasingly efficient electric fixtures used less total

Concept Connection power, which was less profitable for the electric companies.
The electric companies began a campaign to convince indus-
trial users that they needed more light to get more productiv-
ity. When advertising did not work, the industry began using
experimental tests to demonstrate their argument. Manag-
ers were skeptical about the results, so the Committee on
Industrial Lighting (CIL) was set up to run the tests. To fur-
ther add to the tests’ credibility, Thomas Edison was made
honorary chairman of the CIL. In one test location—the

Western Electric Photographic Services

Hawthorne plant of the Western Electric Company—some
interesting events occurred.
The major part of this work involved four experimen-
tal and three control groups. In all, five different tests were
conducted. These pointed to the importance of factors other
than illumination in affecting productivity. To examine these
factors more carefully, numerous other experiments were
conducted.42 The results of the most famous study, the first
This is the Relay Room of the Western Electric Hawthorne,
Illinois, plant in 1927. Six women worked in this relay assembly
Relay Assembly Test Room (RATR) experiment, were ex-
test room during the controversial experiments on employee tremely controversial. Under the guidance of two Harvard
productivity. Professors Mayo and Roethlisberger evaluated professors, Elton Mayo and Fritz Roethlisberger, the RATR
conditions such as rest breaks and workday length, physical studies lasted nearly six years (May 10, 1927 to May 4,
health, amount of sleep, and diet. Experimental changes were
fully discussed with the women and were abandoned if they
1933) and involved 24 separate experimental periods. So
disapproved. Gradually, the researchers began to realize many factors were changed and so many unforeseen factors
they had created a change in supervisory style and human uncontrolled that scholars disagree on the factors that truly
relations, which they believed was the true cause of the contributed to the general increase in performance over that
increased productivity.
time period. Most early interpretations, however, agreed
on one point: Money was not the cause of the increased
output.43 It was believed that the factor that best explained increased output was
human relations. Employees performed better when managers treated them in a posi-
Before reading on, take tive manner. Recent re-analyses of the experiments have revealed that a number of
the “New Manager factors were different for the workers involved, and some suggest that money may
Self-Test.” This test will
well have been the single most important factor.44 An interview with one of the
original participants revealed that just getting into the experimental group meant a
give you feedback about
huge increase in income.45
how your personal
These new data clearly show that money mattered a great deal at Hawthorne. In
manager frame of
addition, worker productivity increased partly as a result of the increased feelings
reference relates to the
of importance and group pride that employees felt by virtue of being selected for
perspectives described this important project and the camaraderie that developed among group members.46
in this chapter. One unintended contribution of the experiments was a rethinking of field research
practices. Researchers and scholars realized that the researcher can influence the out-
come of an experiment by being too closely involved with research subjects. This phenom-
enon has come to be known as the Hawthorne effect in research methodology. Subjects
behaved differently because of the active participation of researchers in the Hawthorne
experiments.47
From a historical perspective, whether the studies were academically sound is less im-
portant than the fact that they stimulated an increased interest in looking at employees as
more than extensions of production machinery. The interpretation that employees’ output
increased when managers treated them in a positive manner started a revolution in worker
treatment for improving organizational productivity. Despite flawed methodology or inac-
curate conclusions, the findings provided the impetus for the human relations movement.
This approach shaped management theory and practice for well over a quarter-century,
and the belief that human relations is the best area of focus for increasing productivity
persists today.

Self-Test

Introduction
Ne w Manager
Evolution of Style
Instructions: This questionnaire asks you to describe Scoring and Interpretation: Managers typically view
yourself. For each item, give the number “4” to the phrase their world through one or more mental frames of reference.
that best describes you, “3” to the item that is next best, and (1) The structural frame of reference sees the organization as
on down to “1” for the item that is least like you. a machine that can be economically efficient and that pro-
vides a manager with formal authority to achieve goals. This
1. My strongest skills are: manager frame became strong during the era of scientific
______ a. Analytical skills management and bureaucratic administration. (2) The human
______ b. Interpersonal skills resource frame sees the organization as people, with manager
emphasis given to support, empowerment, and belonging.
______ c. Political skills
This manager frame gained importance with the rise of
______ d. Flair for drama the humanistic perspective. (3) The political frame sees the
organization as a competition for resources to achieve goals,
2. The best way to describe me is: with manager emphasis on negotiation and hallway coalition
______ a. Technical expert building. This frame reflects the need within systems theory
______ b. Good listener to have all the parts working together. (4) The symbolic frame
______ c. Skilled negotiator of reference sees the organization as a theater—a place to
______ d. Inspirational leader achieve dreams—with the manager emphasizing symbols,
vision, culture, and inspiration. This manager frame is impor-
3. What has helped me the most to be successful is my tant for today’s adaptive organizations.
ability to: Which frame reflects your way of viewing the world? The
first two frames of reference—structural and human resource—
______ a. Make good decisions
are more important for new managers. These two frames
______ b. Coach and develop people usually are mastered first. As new managers gain experience
______ c. Build strong alliances and a power base and move up the organization, they should acquire political
______ d. Inspire and excite others skills and also learn to use symbols for communication. It is
important for new managers not to be stuck for years in one
4. What people are most likely to notice about me is my: way of viewing the organization because their progress may
______ a. Attention to detail be limited. Many new managers evolve through and master
______ b. Concern for people each of the four frames as they become more skilled and
experienced.
______ c. Ability to succeed in the face of conflict
and opposition
______ d. Charisma Compute your scores as follows:
5. My most important leadership trait is: ST 5 1a 1 2a 1 3a 1 4a 1 5a 1 6a 5 ________________
______ a. Clear, logical thinking
HR 5 1b 1 2b 1 3b 1 4b 1 5b 1 6b 5 ________________
______ b. Caring and support for others
______ c. Toughness and aggressiveness PL 5 1c 1 2c 1 3c 1 4c 1 5c 1 6c 5 ________________
______ d. Imagination and creativity
SY 5 1d 1 2d 1 3d 1 4d 1 5d 1 6d 5 ________________
6. I am best described as:
______ a. An analyst The higher score represents your way of viewing the organi-
zation and will influence your management style.
______ b. A humanist
______ c. A politician Source: © 1988, Leadership Frameworks, 440 Boylston Street, Brookline,
MA 02146. All rights reserved. Used with permission.
______ d. A visionary

Human Resources Perspective

The human relations movement initially espoused a dairy farm view of management—just
as contented cows give more milk, satisfied workers will produce more work. Gradually,
views with deeper content that elevated the “humanity of production” began to emerge.
The human resources perspective maintained an interest in worker participation and
considerate leadership but shifted the emphasis to considering the daily tasks that people
perform. The human resources perspective combines prescriptions for design of job tasks
with theories of motivation.48 In the human resources view, jobs should be designed so that
tasks are not perceived as dehumanizing or demeaning but instead allow workers to use
their full potential. Two of the best-known contributors to the human resources perspec-
tive were Abraham Maslow and Douglas McGregor.
Abraham Maslow (1908–1970), a practicing psychologist, observed that his patients’
problems usually stemmed from an inability to satisfy their needs. Thus, he generalized
his work and suggested a hierarchy of needs. Maslow’s hierarchy started with physiological
needs and progressed to safety, belongingness, esteem, and, finally, self-actualization needs.
Chapter 16 discusses his ideas in more detail.
Douglas McGregor (1906–1964) had become frustrated with the early, simplistic human
relations notions while president of Antioch College in Ohio. He challenged both the classi-
cal perspective and the early human relations assumptions about human behavior. Based on
his experiences as a manager and consultant, his training as a psychologist, and the work of
Maslow, McGregor formulated Theory X and Theory Y, which are explained in Exhibit 2.4 .49
McGregor believed that the classical perspective was based on Theory X assumptions about
workers. He also felt that a slightly modified version of Theory X fit early human relations
ideas. In other words, human relations ideas did not go far enough. McGregor proposed
Theory Y as a more realistic view of workers for guiding management thinking.
The point of Theory Y is that organizations can take advantage of the imagination
and intellect of all their employees. Employees will exercise self-direction and self-control
to contribute to organizational goals when given the opportunity. A few companies today
still use Theory X management, but many are using Theory Y techniques. Consider how
Semco applies Theory Y assumptions to tap into employee creativity and mind power.

exhibit 2.4 Theory X and Theory Y

Assumptions of Theory X
• The average human being has an inherent dislike of work and will avoid it if possible.
• Because of the human characteristic of dislike for work, most people must be coerced, con-
trolled, directed, or threatened with punishment to get them to put forth adequate effort
toward the achievement of organizational objectives.
• The average human being prefers to be directed, wishes to avoid responsibility, has relatively
little ambition, and wants security above all.
Assumptions of Theory Y
• The expenditure of physical and mental effort in work is as natural as play or rest. The average
human being does not inherently dislike work.
• External control and the threat of punishment are not the only means for bringing about effort
toward organizational objectives. A person will exercise self-direction and self-control in the ser-
vice of objectives to which he or she is committed.
• The average human being learns, under proper conditions, not only to accept but to seek
responsibility.
• The capacity to exercise a relatively high degree of imagination, ingenuity, and creativity in the
solution of organizational problems is widely, not narrowly, distributed in the population.
• Under the conditions of modern industrial life, the intellectual potentialities of the average
human being are only partially utilized.

SOURCE: Douglas McGregor, The Human Side of Enterprise (New York: McGraw-Hill, 1960), pp. 33–48. © McGraw-Hill
Companies, Inc. Reprinted by permission.

Introduction
The Brazil-based company Semco’s fundamental operating principle is to harness the wisdom
of all its employees. It does so by letting people control their work hours, location, and even Way
pay plans. Employees also participate in all organizational decisions, including what businesses Semco
Semco should pursue.
Semco leaders believe that economic success requires creating an atmosphere that puts
power and control directly in the hands of employees. People can veto any new product
idea or business venture. They choose their own leaders and manage themselves to accom-
plish goals. Information is openly and broadly shared so that everyone knows where they
and the company stand. Instead of dictating Semco’s identity and strategy, leaders allow it
to be shaped by individual interests and efforts. People are encouraged to seek challenges,
explore new ideas and business opportunities, and question the ideas of anyone in the
company.
This high level of trust in employees has helped Semco achieve decades of high profit-
ability and growth despite fluctuations in the economy and shifting markets. “At Semco, we
don’t play by the rules,” says Ricardo Semler. Semler, whose father started the company in the
1950s, says it doesn’t unnerve him to “step back and see nothing on the company’s horizon.”
He is happy to watch the company and its employees “ramble through their days, running on
instinct and opportunity. . . .”50

For managers like Ricardo Semler, command and control is a thing of the past,
with the future belonging to those companies that build leadership throughout the
organization. The Theory Y approach has helped Semco succeed in a tough environ- Look back at your
ment. As described at the beginning of this chapter, a number of companies are using scores on the
less hierarchical management systems that rely on Theory Y principles that are more questionnaire at
in line with today’s emphasis on employee engagement and involvement. the beginning of
this chapter related
Behavioral Sciences Approach to Theory X and
Theory Y. How will
The behavioral sciences approach uses scientific methods and draws from sociol- your management
ogy, psychology, anthropology, economics, and other disciplines to develop theories assumptions about
about human behavior and interaction in an organizational setting. This approach people fit into an
can be seen in practically every organization. When a company such as Zappos.com organization today?
conducts research to determine the best set of tests, interviews, and employee profiles
to use when selecting new employees, it is using behavioral science techniques. When
Best Buy electronics stores train new managers in the techniques of employee motivation,
most of the theories and findings are rooted in behavioral science research.
One specific set of management techniques based in the behavioral sciences approach
is organization development (OD). In the 1970s, OD evolved as a separate field that
applied the behavioral sciences to improve the organization’s health and effectiveness
through its ability to cope with change, improve internal relationships, and increase
problem-solving capabilities.51 The techniques and concepts of OD have since been
broadened and expanded to address the increasing complexity of organizations and the
environment, and OD is still a vital approach for managers. OD will be discussed in
detail in Chapter 11. Other concepts that grew out of the behavioral sciences approach
include matrix organizations, self-managed teams, ideas about corporate culture, and
management by wandering around. Indeed, the behavioral sciences approach has influ-
enced the majority of tools, techniques, and approaches that managers have applied to
organizations since the 1970s.
All the remaining chapters of this book contain research findings and management
applications that can be attributed to the behavioral sciences approach.

Remember This
• The humanistic perspective emphasized understanding • The Hawthorne studies were important in shaping
human behavior, needs, and attitudes in the workplace. ideas concerning how managers should treat workers.
• Mary Parker Follett and Chester I. Barnard were early • The human resources perspective suggests that jobs
advocates of a more humanistic approach to management. should be designed to meet people’s higher-level needs
• Follett emphasized worker participation and empower- by allowing employees to use their full potential.
ment, shared goals, and facilitating rather than control- • The behavioral sciences approach draws from psy-
ling employees. Barnard’s contributions include the chology, sociology, and other social sciences to develop
acceptance theory of authority. theories about human behavior and interaction in an
• The human relations movement stresses the satisfac- organizational setting.
tion of employees’ basic needs as the key to increased • Many current management ideas and practices can be
productivity. traced to the behavioral sciences approach.

Management Science
World War II caused many management changes. To handle the massive and complicated
problems associated with modern global warfare, managerial decision makers needed more
sophisticated tools than ever before. Management science, also referred to as the quantitative
perspective, provided a way to address those problems. This view is distinguished for its appli-
cation of mathematics, statistics, and other quantitative techniques to management decision
making and problem solving. During World War II, groups of mathematicians, physicists,
and other scientists were formed to solve military problems that frequently involved moving
massive amounts of materials and large numbers of people quickly and efficiently. Managers
soon saw how quantitative techniques could be applied to large-scale business firms.52
Picking up on techniques developed for the military, scholars began cranking out nu-
merous mathematical tools for corporate managers, such as the application of linear pro-
gramming for optimizing operations, statistical process control for quality management,
and the capital asset pricing model.53
These efforts were enhanced with the development and perfection of the computer.
Coupled with the growing body of statistical techniques, computers made it possible for
managers to collect, store, and process large volumes of data for quantitative decision mak-
ing, and the quantitative approach is widely used today by managers in a variety of indus-
tries. The Walt Disney Company used quantitative techniques to develop FastPass, a
sophisticated computerized system that spares people the ordeal of standing in long lines
for the most popular rides. Disney theme parks have machines that issue coupons with a
return time that’s been calculated based on the number of people standing in the actual
line, the number who have already obtained passes, and each ride’s capacity. The next gen-
eration of technology, FastPass+, lets visitors book times for rides before they even leave
home for their Disney vacation.54 Let’s look at three subsets of management science.
Operations research grew directly out of the World War II military groups (called opera-
tional research teams in Great Britain and operations research teams in the United States).55 It
consists of mathematical model building and other applications of quantitative techniques
to managerial problems.
Operations management refers to the field of management that specializes in the physi-
cal production of goods or services. Operations management specialists use management
science to solve manufacturing problems. Some commonly used methods are forecasting,
inventory modeling, linear and nonlinear programming, queuing theory, scheduling, simu-
lation, and break-even analysis.

Introduction
most recent subfield of management sci-
ence, which is often reflected in manage-
ment information systems designed to
provide relevant information to manag-
ers in a timely and cost-efficient man-
ner. IT has evolved to include intranets
and extranets, as well as various software
programs that help managers estimate
costs, plan and track production, manage
projects, allocate resources, or schedule
employees. Most of today’s organizations
have IT specialists who use quantitative

Umit Bektas/Reuters
techniques to solve complex organiza-
tional problems.
However, as events in the mortgage
and finance industries show, relying too
heavily on quantitative techniques can At Catholic Health Partners, a nonprofit hospital, hospice, and wellness center
cause problems for managers. Mortgage system that spans a number of Midwestern states, information technology
companies used quantitative models that (IT) is a top priority. IT is critical to the efficient running of all aspects of the
showed their investments in subprime healthcare system, as well as to maintaining up-to-the-minute, completely
accurate records on patients.
mortgages would be okay even if default
rates hit historically high proportions.
However, the models didn’t take into account that no one before in history had thought it
made sense to give $500,000 loans to people making minimum wage!56 “Quants” also came to
Hot
dominate organizational decisions in other financial firms. The term quants refers to finan-
cial managers and others who base their decisions on complex quantitative analysis, under
Topic
the assumption that using advanced mathematics and sophisticated computer technology
can accurately predict how the market works and help them reap huge profits. The virtu-
ally exclusive use of these quantitative models led aggressive traders and managers to take
enormous risks. When the market began to go haywire as doubts about subprime mortgages
grew, the models went haywire as well. Stocks predicted to go up went down, and vice versa.
Events that were predicted to happen only once every 10,000 years happened three days in a
row in the market madness. Scott Patterson, a Wall Street Journal reporter and author of The
Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It,
suggests that the financial crisis that began in 2008 is partly due to the quants’ failure to ob-
serve market fundamentals, pay attention to human factors, and heed their own intuition.57

Remember This
• Management science became popular based on its • Three subsets of management science are operations
successful application in solving military problems research, operations management, and information
during World War II. technology (IT).
• Management science, also called the quantitative • Quants have come to dominate decision making
perspective, uses mathematics, statistical techniques, and in financial firms, and the Wall Street meltdown in
computer technology to facilitate management decision 2007–2008 shows the danger of relying too heavily on
making, particularly for complex problems. a quantitative approach.
• The Walt Disney Company uses management science
to solve the problem of long lines for popular rides and
attractions at its theme parks.

Recent Historical Trends

Despite heavy use of management science techniques, the post–World War II period also
saw a return to the humanistic side of management. Peter Drucker’s books Concept of the
Corporation (1946) and The Practice of Management (1954) emphasized the corporation
as a social and human institution. He revived interest in the work of Mary Parker Follett
from the 1920s in his call for managers to involve and respect employees.58 Thus, although
many managers continued to use management science techniques, among the approaches
that we’ve discussed so far, the humanistic perspective has remained most prevalent from
the 1950s until today. The post–World War II period saw the rise of new concepts, along
with a continued strong interest in the human aspect of managing, such as team and group
dynamics and other ideas that relate to the humanistic perspective. Two new concepts that
appeared were systems thinking and the contingency view.

Systems Thinking
Systems thinking is the ability to see both the distinct elements of a system or situation
and the complex and changing interaction among those elements. A system is a set of
interrelated parts that function as a whole to achieve a common purpose.59 Subsystems
are parts of a system, such as an organization, that depend on one another. Changes in
one part of the system (the organization) affect other parts. Managers need to understand
the synergy of the whole organization, rather than just the separate elements, and to learn
to reinforce or change whole system patterns.60 Synergy means that the whole is greater
than the sum of its parts. The organization must be managed as a coordinated whole.
Managers who understand subsystem interdependence and synergy are reluctant to make
changes that do not recognize the impact of subsystems on the organization as a whole.
Many people have been trained to solve problems by breaking a complex system, such
as an organization, into discrete parts and working to make each part perform as well as
possible. However, the success of each piece does not add up to the success of the whole.
In fact, sometimes changing one part to make it better actually makes the whole system
function less effectively. For example, a small city embarked on a road-building program to
solve traffic congestion without whole-systems thinking. With new roads available, more
people began moving to the suburbs. Rather than reduce congestion, the solution actually
increased traffic congestion, delays, and pollution by enabling suburban sprawl.61
It is the relationship among the parts that form a whole system—whether a community,
an automobile, a nonprofit agency, a human being, or a business organization—that mat-
ters. Systems thinking enables managers to look for patterns of movement over time and
focus on the qualities of rhythm, flow, direction, shape, and networks of relationships that
accomplish the performance of the whole. When managers can see the structures that un-
derlie complex situations, they can facilitate improvement. But doing that requires a focus
on the big picture.
An important element of systems thinking is to discern circles of causality. Peter Senge,
author of The Fifth Discipline, argues that reality is made up of circles rather than straight
lines. For example, Exhibit 2.5 shows circles of influence for increasing a retail firm’s profits.
The events in the circle on the left are caused by the decision to increase advertising; hence
the retail firm adds to the advertising budget to aggressively promote its products. The ad-
vertising promotions increase sales, which increase profits, which provide money to further
increase the advertising budget.
But another circle of causality is being influenced as well. The decision by marketing
managers will have consequences for the operations department. As sales and profits in-
crease, operations will be forced to stock up with greater inventory. Additional inventory
will create a need for additional warehouse space. Building a new warehouse will cause a

Introduction
Build
Warehouse

Decision to Sales Stocking Up

Advertise

Advertising Delay
Profits
Budget

Added Cost Hire

People

SOURCE: Based on concepts presented in Peter M. Senge, The Fifth Discipline: The Art and Practice of the Learning Organization
(New York: Doubleday/Currency, 1990).

delay in stocking up. After the warehouse is built, new people will be hired, all of which
add to company costs, which will have a negative impact on profits. Thus, understanding all
the consequences of their decisions via circles of causality enables company leaders to plan
and allocate resources to warehousing as well as to advertising to ensure stable increases in
sales and profits. Without understanding system causality, top managers would fail to un-
derstand why increasing advertising budgets could cause inventory delays and temporarily
reduce profits.

Contingency View
A second recent extension to management thinking is the contingency view. The classical
perspective assumed a universalist view. Management concepts were thought to be univer-
sal; that is, whatever worked in one organization in terms of management style, bureau-
cratic structure, and so on would work in any other one. In business education, however, an
alternative view exists. In this case view, each situation is believed to be unique. Principles
are not universal, and one learns about management by experiencing a large number of
case problem situations. Managers face the task of determining what methods will work in
every new situation.
To integrate these views, the contingency view emerged, as illustrated in Exhibit 2.6.62
Here, neither of the other views is seen as entirely correct. Instead, certain contingencies, or
variables, exist for helping managers identify and understand situations. The contingency
view tells us that what works in one setting might not work in another. Contingency means

exhibit 2.6 Contingency View of Management

Case View
“Every situation Contingency View
is unique.”
Organizational phenomena exist
in logical patterns.
Managers devise and apply
Universalist “There is similar responses to common
View one best way.” types of problems.

that one thing depends on other things, and a manager’s response to a situation depends
on identifying key contingencies in an organizational situation.
One important contingency, for example, is the industry in which the organization op-
erates. The organizational structure that is effective for an online company, such as the
microblogging services Twitter and China’s Sina Weibo, would not be successful for a large
auto manufacturer, such as Toyota or Ford. A management-by-objectives (MBO) system
that works well in a manufacturing firm, in turn, might not be right for a school system.
When managers learn to identify important patterns and characteristics of their organiza-
tions, they can fit solutions to those characteristics.

Remember This
• A system is a set of interrelated parts that function as a • Subsystems are parts of a system that depend on one
whole to achieve a common purpose. An organization is another for their functioning.
a system. • The concept of synergy says that the whole is greater
• Systems thinking means looking not just at discrete than the sum of its parts. The organization must be
parts of an organizational situation, but also at the managed as a whole.
continually changing interactions among the parts. • The contingency view tells managers that what
• When managers think systemically and understand works in one organizational situation might not work
subsystem interdependence and synergy, they can in others. Managers can identify important contin-
get a better handle on managing in a complex gencies that help guide their decisions regarding the
environment. organization.

Innovative Management Thinking

Into the Future
All of the ideas and approaches discussed so far in this chapter go into the mix that
makes up modern management. Dozens of ideas and techniques in current use can trace
their roots to these historical perspectives.63 In addition, innovative concepts continue to
emerge to address new management challenges. Smart managers heed the past but know
that they and their organizations have to change with the times. Recall the example of
UPS discussed earlier in this chapter. The company still emphasizes efficiency, but when
third-party logistics services became a growing part of the business, managers knew
they had to expand employees’ mindsets and encourage them to be more innovative
and flexible as well. They did it by giving employees a history lesson—talking about the
many moments of innovation and transformation in the long history of UPS, such as
the shift from bicycle delivery to trucks and the move into air freight with the introduc-
tion of the company’s own cargo liner. Employees began to see that UPS had been both
efficient and innovative all along, and that the two were not incompatible.64 Compare
UPS managers’ approach to that of General Motors (GM). GM was the “ideal” organi-
zational model in a post–World War II environment, but by 2009, it had collapsed into
bankruptcy and sought billions of dollars in government aid because managers failed
to pay attention as the world changed around them.65 GM managers assumed that
the preeminence of their company would shelter it from change, and they stuck far too
long with a strategy, culture, and management approach that were out of tune with the
shifting environment.

Introduction
Managers are always looking for new techniques and approaches that more adequately
respond to customer needs and the demands of the environment. A recent survey of Euro-
pean managers reflects that managers pay attention to currently fashionable management
concepts. The following table lists the percentage of managers reporting that they were
aware of these selected management trends that have been popular over the past decade.66

Concept Awareness (%)

E-business 99.41
Decentralization 99.12
Customer relationship management (CRM) 97.50
Virtual organization 91.19
Empowerment 83.41
Reengineering 76.65

Managers especially tend to look for fresh ideas to help them cope during difficult times.
The “Manager’s Shoptalk” lists a wide variety of ideas and techniques used by today’s man-
agers, as revealed by the “2013 Management Tools and Trends” survey by Bain & Company.
In the Bain survey, the majority of executives said that they are concerned about the slow
economic recovery so they are looking for new and creative approaches that can help them
both cut costs and have more money to invest in innovation for the future. Other top concerns
of managers as revealed in the survey include rising health care costs, decreasing customer
loyalty, the growing potential for cyber attacks against organizations, and the demands of
younger employees for changes in workplace cultures and practices.67 Responding to these and
other concerns, the tools most used by today’s managers tend to fall into the dual categories
of managing the technology-driven workplace and managing the people-driven workplace.

Managing the Technology-Driven Workplace

Managers see IT presenting both opportunities and threats to their organizations. A total
of 65 percent of managers surveyed said that their company’s spending on IT must in-
crease over the next three years to keep pace with evolving needs and technology. Two
popular new uses of this technology are big data analytics and supply chain management.

Big Data Analytics

The newest business technology is big data analytics, which refers to technologies, skills,
and processes for searching and examining massive, complex sets of data that traditional
data processing applications cannot handle to uncover hidden patterns and correlations.68
Facebook, for example, uses the personal data that you put on your page and tracks and
monitors your online behavior, then searches through all that data to identify and suggest
potential “friends.”69 Amazon.com collects tons of data on customers, including what books
they buy, what else they look at, how they navigate through the Web site, how much they
are influenced by promotions and reviews, and so forth. The company uses algorithms that
predict and suggest what books a customer might be interested in reading next. Moreover,
the predictions get better every time a customer responds to or ignores a recommenda-
tion.70 Another example of the power of big data analytics comes from the world of online
dating Web sites such as eHarmony and Match.com, which sift through huge amounts
of data to compare millions of people across hundreds of different variables and make
matches for users in a matter of minutes, sending new matches out on a daily basis. The

Manager ’s Shoptalk
Current Use of Management Tools and Trends

O
ver the history of management, many fashions Popularity. In the most recent survey, strategic plan-
and fads have appeared. Critics argue that new ning and customer relationship management (CRM)
techniques may not represent permanent solu- zoomed to the top of the list. Across all geographical
tions. Others feel that managers must adopt areas and industries, CRM emerged as managers’ most
new techniques for continuous improvement in a fast- important investment priority, reflecting a concern
changing world. In 1993, Bain & Company started a with the decline in customer loyalty. Managers also
large research project to interview and survey thou- put a priority on investing in employee engagement
sands of corporate executives about the 25 most popu- based on evidence of a link between highly motivated
lar management tools and techniques. employees and customer loyalty. Outsourcing declined
The Top Ten. The list of the top ten tools for 2012– significantly in usage from the previous year’s survey
2013 is shown here. How many of the tools are you as managers decreased their heavy emphasis on cost-
familiar with? For more information on specific tools, cutting and efficiency. Three tools that ranked high in
see Bain’s Management Tools 2013: An Executive’s both use and satisfaction were strategic planning, mis-
Guide at http://www.bain.com/Images/MANAGEMENT sion and vision statements, and CRM, which can guide
_TOOLS_2013_An_Executives_guide.pdf. managers’ thinking on strategic issues during times of
rapid change.
Global Trends. Firms in Asia-Pacific and North
Percentage Saying They America reported using the largest number of tools.
Tool or Technique Plan to Use in 2013 Among firms in Latin America and Europe, the Middle
CRM 83 East, and Africa (EMEA), tool use substantially declined
from the previous year’s survey. In North America, the
Strategic planning 81 most widely used tool was employee engagement sur-
Benchmarking 80 veys, which aim to measure and improve employee
Mission and vision
motivation and by extension productivity, whereas
statement 79 in EMEA, balanced scorecards, which help companies
measure and improve manager performance, topped
Core competencies 78 the list in terms of usage. Asia-Pacific region firms
Change management use CRM more than any other tool, while managers
programs 77 in Latin America favor business process reengineer-
Supply chain ing, which didn’t even make the top-ten list for usage
management 74 among firms overall.
Employee engagement Source: Darrell Rigby and Barbara Bilodeau, “Management Tools and Trends
surveys 73 2013,” Copyright © 2013, Bain & Company, Inc., http://www.bain.com
/publications/articles/management-tools-and-trends-2013.aspx. Reprinted by
Balanced scorecard 73
permission.
Outsourcing 71

professional networking site LinkedIn recently announced a similar idea with its “People
You May Want to Hire” recruiting feature. The company will plumb the depths of its huge
data mines and provide a list of perfect candidates for a company’s job openings.71
However, big data is not just for online companies. Big data analytics can be thought of
as a direct descendant of Frederick Winslow Taylor’s scientific management and the most
recent iteration of the quantitative approach to management.72 Walmart collects more than
2.5 petabytes of data (a petabyte is about a million gigabytes, or the equivalent of about
20 million filing cabinets of written data) every hour from customer transactions and uses
those data to make better decisions.73 The gaming corporation Caesars Entertainment

Introduction
Suppliers Manufacturers Distributors Retailers

Flow of Products

SOURCE: Adapted from an exhibit from the Global Supply Chain Games Project, Delft University and the University of Maryland, R. H. Smith
School of Business, www.gscg.org:8080/opencms/export/sites/default/gscg/images/supplychain_simple.gif (accessed February 6, 2008).

analyzes customer data to fine-tune customer segments and build effective loyalty pro-
grams for its casinos and resorts. Researchers at the Johns Hopkins School of Medicine
found that they could use data from Google Flu Trends (which Google uses to collect and
aggregate flu-related search terms) to predict surges in flu-related emergency room visits a
week before warnings came from the Centers for Disease Control (CDC).74

Supply Chain Management

Supply chain management refers to managing the sequence of suppliers and purchas-
ers, covering all stages of processing from obtaining raw materials to distributing finished
goods to consumers.75 Exhibit 2.7 illustrates a basic supply chain model. A supply chain
is a network of multiple businesses and individuals that are connected through the flow
of products or services.76 Many organizations manage the supply chain with sophisti-
cated electronic technology. In India, for example, Walmart managers have invested in an
efficient supply chain that electronically links farmers and small manufacturers directly to
the stores, maximizing value for both ends.77 However, today’s global supply chains create
many challenges for managers. Several garment factory fires in Bangladesh in 2012 and
Hot
the collapse of another apparel plant in 2013 that killed 1,100 workers put the spotlight
on poor working conditions in that country. The problem for retailers such as Walmart,
Topic
H&M, Target, and other big companies is that similar poor working conditions exist in
other low-wage countries such as Pakistan, Cambodia, Indonesia, and Vietnam, which
produce most of the world’s clothing. Both European and U.S. retailers have announced
plans aimed at improving safety in overseas factories, but the challenge of monitoring con-
tractors and subcontractors in low-wage countries is a massive one. Even when an organi-
zation such as H&M thinks that it is hiring a responsible supplier, that company might
subcontract or obtain materials from less responsible ones.78 Supply chain management
will be discussed in detail in the Appendix.

Managing the People-Driven Workplace

Organizations are undergoing tremendous changes. Some are related to new technology,
whereas others are brought about primarily because of shifting needs of people. Recall that
one of the concerns of executives in Bain’s 2013 survey was the demands of younger em-
ployees for changes in workplace cultures and practices. Two responses to these issues are
the bossless workplace and a renewed emphasis on employee engagement.

The Bossless Workplace

As described at the beginning of this chapter, a few bossless work environments have ex-
isted for decades, but this has become a real trend in recent years. For one thing, how and
where work gets done has shifted in major ways because many people can work from home
or other locations outside a regular office with ease. At Symantec, for example, most em-
ployees used to work in cubicles, but now many of them work from home or other remote
locations scattered all over the world.79 When everyone has access to the information they
need and the training to make good decisions, having layers of managers just eats up costs
and slows down response time.80
Many bossless companies, such as Valve Software (Web platform for video games),
Netflix (video streaming and rentals), and Atlassian (enterprise software) operate in
technology-related industries, but companies as diverse as GE Aviation (aviation man-
ufacturing), W. L. Gore & Associates (best known for Gore-Tex fabrics), Whole Foods
Market (supermarkets), and Semco (diversified manufacturing, described previously),
have succeeded for years with bossless structures. One of the most interesting examples of
a bossless work environment is a tomato processor.

Innovative Chris Rufer, founder of Morning Star, the world’s largest tomato processor, with three fac-
Way tories that produce products for companies such as Heinz and Campbell Soup Company,
Morning Star believes that if people can manage the complexities of their own lives without a boss, there
is no reason they can’t manage themselves in the workplace. Rufer organized Morning Star,
where 400 or so employees produce over $700 million a year in revenue, based on the
following principles of self-management:
• No one has a boss.
• Employees negotiate responsibilities with their peers.
• Everyone can spend the company’s money.
• There are no titles or promotions.
• Compensation is decided by peers.
How does such a system work? As the company grew from the original 24 colleagues (as
employees are called) to around 400, problems occurred. Some people had trouble work-
ing in an environment with no bosses and no hierarchy. Thus, Rufer created the Morning
Star Self-Management Institute to provide training for people in the principles and systems
of self-management. Every colleague now goes through training, in small groups of 10–15
people, to learn how to work effectively as part of a team, how to handle the responsibilities
of “planning, organizing, leading, and controlling” that are typically carried out by managers,
how to balance freedom and accountability, how to understand and effectively communicate
with others, and how to manage conflicts.
Today, every associate writes a personal mission statement and is responsible for ac-
complishing it, including obtaining whatever tools and resources are needed. That means that
anyone can order supplies and equipment, and colleagues are responsible for initiating the
hiring process when they need more help. Every year, each person negotiates a Colleague
Letter of Understanding (CLOU) with the associates most affected by his or her work. Every
CLOU has a clearly defined set of metrics that enable people to track their progress in
achieving their goals and meeting the needs of their colleagues. “Around here,” one associate
said, “nobody’s your boss and everybody’s your boss.”81

In a bossless work environment such as that at Morning Star, nobody gives orders, and
nobody takes them. Accountability is to the customer and the team rather than to a man-
ager. There can be many advantages to a bossless work environment, including increased

Introduction
commitment, and better and faster deci-
sion making.82 However, bossless work
environments also present new chal-
lenges. Costs may be lower because of
reduced overhead, but money has to be
invested in ongoing training and devel-

Emil Matveyev/ITAR-TASS Photo Agency/Alamy

opment for employees so that they can
work effectively within a bossless system.
The culture also has to engage employees
and support the nonhierarchical environ-
ment. Employee engagement is essential
for a successful bossless workplace.

Employee Engagement
Employee engagement means that
people are emotionally involved in their Research has shown that organizations can deliberately create a culture that
jobs and are satisfied with their work engages employees and encourages greater job satisfaction. At international
conditions, contribute enthusiastically shipping company Deutsche Post DHL Group (DHL), for example, the
company is big on thanking employees for their contributions through thank-
to meeting team and organizational
you notes, monetary rewards, and more. Other engagement tactics include
goals, and feel a sense of belonging and communicating honestly with employees, supporting career development, and
commitment to the organization and its enabling employees to serve their communities.
mission.83 To engage employees, man-
agers unite people around a compelling
purpose that encourages them to give their best. Young Generation Y employees (some-
times called Millennials), the most educated generation in the history of the United States,
grew up technologically adept and globally conscious. Unlike many workers in the past,
they typically are not hesitant to question their superiors and challenge the status quo.
They want a flexible, collaborative work environment that is challenging and supportive,
with access to cutting-edge technology, opportunities to learn and further their careers and
personal goals, and the power to make substantive decisions in the workplace. Meeting the
shifting needs of this generation is one reason that organizations put employee engage-
ment surveys near the top of the list of tools and techniques they are using (the technique
ranked number one in North America).84
Meanwhile, smart managers are looking ahead to the next generation, alternatively
called the Pluralist Generation, Generation Z, or the Re-Generation (Re-Gens). Re-Gens,
born beginning around 1995, will soon be flooding into the workforce, bringing their own
changes and challenges to the practice and evolution of management. Some observers pre-
dict that a sense or meaning and commitment, especially environmental responsibility, will
be high on their list of priorities. 85

Remember This
• Modern management is a lively mix of ideas and tech- • Two recent trends are the transition to a more
niques from varied historical perspectives, but new con- technology-driven workplace and a corresponding
cepts continue to emerge. emphasis on a people-driven workplace.
• Managers tend to look for innovative ideas and ap- • Supply chain management refers to managing the
proaches, particularly during turbulent times. sequence of suppliers and purchasers, covering all stages
(Continued)

of processing from obtaining raw materials to distribut- organizational goals, and feel a sense of belonging and
ing finished goods to consumers. commitment to the organization and its mission.
• Two ideas related to a people-driven workplace are the • Managers are looking ahead to the next generation of
bossless work environment and employee engagement. employees, sometimes called Re-Gens, to try to predict
• Engagement means that people are involved in their what changes and challenges they may bring to the evo-
jobs and are satisfied with their work conditions, lution of management thinking.
contribute enthusiastically to meeting team and

Ch2 Discussion Questions

1. How would you feel about working in a bossless orga- management of the human element of the organization
nization? What might be your role as a “manager” in or the management of technology? Discuss.
such an environment? Do you think this is a trend that 6. Why do you think Mary Parker Follett’s ideas tended
will continue to grow or fade away? Why? to be popular with businesspeople of her day but were
2. Big data analytics programs (analyzing massive data ignored by management scholars? Why are her ideas
sets to make decisions) use gigantic computing power appreciated more today?
to quantify trends that would be beyond the grasp 7. Explain the basic idea underlying the contingency view.
of human observers. As the use of this quantitative How would you go about identifying key contingencies
analysis increases, do you think it may decrease the facing an organization?
“humanity of production” in organizations? Why?
8. Why can an event such as the Hawthorne studies be
3. Can you think of potential drawbacks to retailers using a major turning point in the history of management,
labor-waste elimination systems based on scientific even if the results of the studies are later shown to be in
management principles, as described in the text? Do error? Discuss.
you believe that scientific management characteristics
9. How would you apply systems thinking to a problem
will ever cease to be a part of organizational life, since
such as poor performance in your current academic
they are now about 100 years old? Discuss.
studies? What about a problem with a romantic part-
4. A management professor once said that for successful ner or family member? Try to identify all the elements
management, studying the present was most important, and their interdependencies.
studying the past was next, and studying the future
10. Can a manager be effective and successful today
should come last. Do you agree? Why?
without using social media? What do you see as
5. As organizations become more technology-driven, the most important ways for managers to use this
which do you think will become more important—the technology?

Ch2 Apply Your Skills: Experiential Exercise

Security or Autonomy86
Respond to each statement here based on whether you Mostly Agree or Mostly Disagree with it.
Mostly Mostly
Disagree Agree
1. I value stability in my job. ______ ______
2. Rules, policies, and procedures generally frustrate me. ______ ______
3. I enjoy working for a firm that promotes employees based heavily on seniority. ______ ______
4. I’d prefer some kind of freelance job to working for the government. ______ ______
5. I’d be proud to work for the largest and most successful company in its field. ______ ______
6. Given a choice, I’d rather make $90,000 a year as a VP in a small company than
$100,000 a year as a middle manager in a large company. ______ ______

Introduction
8. I generally prefer to multitask and be involved in multiple projects. ______ ______
9. Good employee benefits are important to me. ______ ______
10. Rules are made to be broken. ______ ______
Scoring: Give yourself one point for each answer of Mostly working in a large bureaucracy and would prefer more of a
Agree to the odd-numbered questions and one point for bossless organization instead.
each Mostly Disagree to the even-numbered questions. A large, bureaucratic organization provides security,
Interpretation: Your answers determine whether your benefits, and certainty compared to smaller or entrepre-
preferences would fit better with a bureaucratic organiza- neurial firms, where freedom and autonomy are greater. Do
tion. If your score is 8–10, a large, formal company would you want to optimize security or autonomy in your career?
be most compatible with your style and wishes. A score of Would you be more satisfied in a large formal organization
4–7 suggests that you would receive modest satisfaction or in an organization that emphasizes a human resources
from working within a bureaucratic organization. A score or even bossless perspective? Compare your scores with
of 1–3 suggests that you would likely be frustrated by other students’ scores and discuss any differences.

Ch2 Apply Your Skills: Small Group Breakout

Turning Points on the Road Step 2. Divide into groups of four to six members. One
to Management person at a time, share what you learned about a manager’s
career turning points. What themes or patterns character-
Step 1. Interview a manager whom you know at your
ize the turning points among the managers interviewed?
university or place of employment, or a parent or friend
who is a manager, and ask the following question: “What Step 3. Have you personally experienced any turning
was a turning point in your life that led you to become the points in your life? Each group member should describe
person, and manager, that you are today?”(A turning point your personal turning point to the group. With the addi-
could be an event, such as a divorce, birth of a child, busi- tional turning points, analyze again for themes and patterns
ness failure, loss of job; or a decision, such as to quit college across all the turning points.
and start a business, go back to school, get married, and so Step 4. What lessons does your group learn from its
on.) Collect information on a second turning point if the analysis? How does history (events, decisions) play a role
interviewee has one to describe. Your goal is to learn the in the lives and careers of the managers interviewed, and in
specifics about how each turning point led to the person’s the lives of your group members?
current position in life.

Ch2 Apply Your Skills: Ethical Dilemma

The New Test87 strengthened the entire agency. Because of the board’s new
The Civil Service Board in a midsize city in Indiana de- ruling, however, Sheryl would have to complete the exam
cided that a written exam should be given to all candidates in an open competition—anyone could sign up and take
for promotion to supervisor. A written test would assess it, even a new employee. The board wanted the candidate
mental skills and would open access to all personnel who with the highest score to get the job but allowed Maxine, as
wanted to apply for the position. The board believed a manager of the agency, to have the final say.
written exam for promotion would be completely fair and Because Sheryl had accepted the provisional opening
objective because it eliminated subjective judgments and and proved herself on the job, Maxine was upset that the
personal favoritism regarding a candidate’s qualifications. entire clerical force was deemed qualified to take the test.
Maxine Othman, manager of a social service agency, When the results came back, she was devastated. Sheryl
loved to see her employees learn and grow to their full placed twelfth in the field of candidates, while one of her
potential. When a rare opening for a supervising clerk oc- newly hired clerks placed first. The Civil Service Board,
curred, Maxine quickly decided to give Sheryl Hines a shot impressed by this person’s high score, urged Maxine to give
at the job. Sheryl had been with the agency for 17 years and the new clerk the permanent supervisory job over Sheryl;
had shown herself to be a true leader. In her new position, however, it was still Maxine’s choice. Maxine wondered
Sheryl worked hard at becoming a good supervisor, just whether it was fair to base her decision only on the results
as she had always worked hard at being a top-notch clerk. of a written test. The board was pushing her to honor the
She paid attention to the human aspects of employee prob- objective written test, but could the test really assess fairly
lems and introduced modern management techniques that who was the right person for the job?

What Would You Do? 3. Press the board to devise a more comprehensive set
of selection criteria—including test results, but also
1. Ignore the test. Sheryl has proven herself via work taking into account supervisory experience, ability
experience and deserves the job. to motivate employees, and knowledge of agency
2. Give the job to the candidate with the highest score. procedures—that can be explained and justified to the
You don’t need to make enemies on the Civil Service board and to employees.
Board, and, although it is a bureaucratic procedure, the
test is an objective way to select a permanent placement.

Ch2 Apply Your Skills: Case for Critical Analysis

More Hassle from HR? “Yeah.” Vitorio scrolled up and down the document.
In their three years at Vreeland Pharmaceuticals, Vitorio “Any business student could have written this.”
Nuños and Gary Shaw had rarely crossed paths, and they “I hear the HR crew put in lots of overtime,” said Gary.
had exchanged no more than a dozen sentences. But here Vitorio smirked. “For this? I’ll tell you . . . and this is
they were, seatmates on a plane headed to company head- just between you and me, but I really resent this, and we’re
quarters in Kansas City, Missouri. And suddenly, they had some of the newer members of management. I would love
a lot to say to each other. to hear what the older managers are saying.”
“What I’d like to know is why we’re wasting a trip to “I know Connie,” Gary said. “She and her staff are
Kansas City to hash out some new policies about leader going to come in tomorrow all gung-ho on this.” He turned
competencies,” Vitorio said. the tablet in order to see it easier. “We already know what’s
“Because Connie Wyland is HR at Vreeland, and you expected of us.” He scrolled down, stopping at key phrases.
and I both know that policies and models and all of that “Look at this . . . ‘critical values’ . . . ‘core behaviors’ . . . ‘foster-
touchy-feely people stuff are the lifeblood of HR,” Gary re- ing conflict resolution’ . . . and here’s one—‘implementing
plied. “I also think a lot of this is the result of panic on the employee involvement strategies.’ How does she think
heels of the scandals in sales last year.” we got these jobs in the first place?” Gary paused. “What
“I don’t think there’s cause for panic. The company really makes me angry is that I heard Connie is going to
fired the guys, apologized, and then you just move on,” said start manager training sessions where she will teach us the
Vitorio. behaviors associated with each value! Can you believe that?
Gary laughed sarcastically. “No, you fire them, you She will have us role-playing and stuff. I will fight this if it
apologize, and then you analyze the whole thing ad nau- goes beyond general value statements that we can follow in
seam, and then you hamstring your management team with our own way.”
endless rules and bureaucratic standards just to make sure “I can’t wait to hear what Vreeland says,” Vitorio
it doesn’t happen again.” remarked.
“So we all pay for their mistakes,” replied Vitorio. “Are you kidding? He’ll go along with it. He’ll spend 10
“We pay because HR feels guilty that those guys to 15 minutes telling us how great we all are and insinuat-
moved up so high in the system,” Gary replied. “So now ing that we don’t really need this, and then he’ll back Con-
Connie and her staff have devised the ultimate solution nie all the way. Face it, this is the way it’s going to be, and he
to the problem. I don’t know why we all have to go in to really doesn’t need our input or approval. It just looks good,”
discuss it; she’s already decided what she’s going to do, commented Gary.
and she’s positive this is the cure-all to prevent any further Vitorio turned off and closed the tablet. “I just feel that
embarrassment to the company.” imposing something like this on management is a slap at
“Let’s look at the document,” Vitorio said. He reached every one of us. We know what’s expected. We don’t need
under the seat, retrieved and unpacked his tablet, placed training. We also know our people and we have to have some
it on the tray table, and turned it on. flexibility within a broad set of boundaries. This sort of
“Too much glare,” Gary said, peeking over. Vitorio thing just hamstrings us. Connie wants the Stepford Wives.”
pulled down the window shade. “I just hope a couple of senior managers speak up
“Is that better?” at this meeting and voice some concerns. Maybe it will
Gary nodded. The two men read through the be toned down a little,” Gary said. “You and I are middle
document. management and we haven’t been with the company long
“I resent the term ‘rogue leaders,’ ” Gary remarked, enough. All we can do at this meeting is sit and nod.”
pointing to the phrase.
Vitorio shrugged. “It’s a rough draft. They’ll clean up Questions
the language . . . I think.”
“It’s really just a rehash of the mission statement and 1. Are Connie and her staff on the right track to avoid man-
all of the things we learned in training. This is stuff we all ager mishaps by defining a new set of leader rules and
learned in business school. I feel like I’m being lectured.” core values and imposing it by fiat, from the top down?

Introduction
can be imposed on managers with value statements and Might the emphasis on core leadership behaviors be
training sessions? Why? handled in a different way? What do you suggest?

Ch2 On the Job Video Cases

On the Job: Barcelona Restaurant Group: The Evolution
of Management Thinking
Questions 3. What aspects of restaurant work are especially
challenging to wait staff, and how does Barcelona’s
1. In what ways is Barcelona’s management approach approach to management help employees overcome
consistent with modern developments in management the downsides of the job?
thinking?
2. In what ways does Barcelona’s management approach
run counter to contemporary developments in manage-
ment thinking?

Ch2 Endnotes
1. This questionnaire is from William Pfeiffer and John E. 7. Walter Kiechel III, “The Management Century,”
Jones, eds., “Supervisory Attitudes: The X-Y Scale,” in Harvard Business Review (November 2012): 62–75;
The 1972 Annual Handbook for Group Facilitators (New Eric Abrahamson, “Management Fashion,” Academy
York: John Wiley & Sons, 1972), pp. 65–68. This mate- of Management Review 21, no. 1 ( January 1996):
rial is used by permission of John Wiley & Sons, Inc. The 254–285.
X-Y scale was adapted from an instrument developed by 8. Daniel A. Wren, The Evolution of Management Thought,
Robert N. Ford of AT&T for in-house manager training. 4th ed. (New York: Wiley, 1994).
2. Rachel Emma Silverman, “Some Tech Firms Ask: Who 9. Jena McGregor, “‘There Is No More Normal,’” Business-
Needs Managers?” The Wall Street Journal (August 6, Week (March 23 and 30, 2009): 30–34.
2013), http://online.wsj.com/article/SB10001424127 10. Robert Tell and Brian Kleiner, “Organizational Change
887323420604578652051466314748.html (accessed Can Rescue Industry,” Industrial Management (March–
August 20, 2013). April 2009): 20–24.
3. Lisa Thorell, “How Many Bossless Companies Exist 11. This discussion is based on Walter Kiechel III, “The
Today?” Innovatini (April 1, 2013), http://www Management Century,” Harvard Business Review
.innovatini.com/how-many-bossless-companies (November 2012): 62–75.
-are-there/ (accessed August 20, 2013). 12. These quotes are from Kiechel, “The Management
4. See John Hollon, “The Bossless Office Trend: Don’t Century.”
Be Surprised If It Doesn’t Last Long,” HR Manage- 13. Jacques Bughin, Michael Chui, and James Manyika,
ment, TLNT.com ( July 2, 2012), http://www.tlnt “Capturing Business Value with Social Technologies,”
.com/2012/07/02/the-bossless-office-trend-dont-be McKinsey Quarterly (November 2012), http://www
-surprised-if-it-doesnt-last-long/ (accessed August 20, .mckinsey.com/insights/high_tech_telecoms_internet
2013). /capturing_business_value_with_social_technologies
5. Matthew E. May, “Mastering the Art of Bosslessness,” (accessed September 27, 2013).
Fast Company (September 26, 2012), http://www 14. Roland Deiser and Sylvain Newton, “Six Social-Media
.fastcompany.com/3001574/mastering-art-bosslessness Skills Every Leader Needs,” McKinsey Quarterly, Issue 1
(accessed August 20, 2013). (February 2013), http://www.mckinsey.com/insights
6. M. S. S. el Namaki, “Does the Thinking of Yesterday’s /high_tech_telecoms_internet/six_social-media_skills
Management Gurus Imperil Today’s Companies?” _every_leader_needs (accessed August 21, 2013).
Ivey Business Journal (March–April 2012), www 15. David Kiron, Douglas Palmer, and Robert Berkman,
.iveybusinessjournal.com/topics/strategy/does-the “The Executive’s Role in Social Business,” MIT Sloan
-thinking-of-yesterdays-management-gurus-imperil Management Review (Summer 2013): 83–89.
-todays-companies (accessed June 19, 2012). 16. Ibid.

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