Fundamentals of management ricky w griffin pdf

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Fundamentals of

MANAGEMENT Eighth Edition

Ricky W. Griffin

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Fundamentals of Management, Eighth Edition Ricky W. Griffin

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Brief Contents

Preface xxi Acknowledgments xxv

PART 1 An Introduction to Management

CHAPTER 1 Understanding the Manager’s Job 1

CHAPTER 2 The Environments of Organizations and Managers 34

PART 2 Planning

CHAPTER 3 Planning and Strategic Management 65

CHAPTER 4 Managing Decision Making 98

CHAPTER 5 Entrepreneurship and New Venture Management 127

PART 3 Organizing

CHAPTER 6 Organization Structure and Design 159

CHAPTER 7 Organization Change and Innovation 191

CHAPTER 8 Managing Human Resources in Organizations 223

PART 4 Leading

CHAPTER 9 Basic Elements of Individual Behavior in Organizations 260

CHAPTER 10 Managing Employee Motivation and Performance 292

CHAPTER 11 Leadership and Influence Processes 326

CHAPTER 12 Communication in Organizations 361

CHAPTER 13 Managing Work Groups and Teams 391

PART 5 Controlling

CHAPTER 14 Basic Elements of Control 424

CHAPTER 15 Managing Operations, Quality, and Productivity 456

Appendix: Interpretations of Skills Self-Assessment Instruments 490 Name Index 502 Organization and Product Index 505 Subject Index 510

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Contents

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxi Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xxv

PART 1 An Introduction to Management

CHAP T E R 1 Understanding the Manager’s Job . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 An Introduction to Management 3

Kinds of Managers 4 Levels of Management, 4 • Managing in Different Areas of the Organization, 5

Basic Management Functions 6 Planning and Decision Making, 6 • Organizing, 6 • Leading, 7 • Controlling, 7

Fundamental Management Skills 7 Toward Zero Waste 8

Technical Skills, 8 • Interpersonal Skills, 8 • Conceptual Skills, 8 • Diagnostic Skills, 9 • Communication Skills, 9 • Decision-Making Skills, 9 • Time Management Skills, 9

The Science and the Art of Management 9 The Science of Management, 9 • The Art of Management, 10

The Evolution of Management 10 The Importance of Theory and History 11

Why Theory?, 11 • Why History?, 11 The Historical Context of Management 11 The Classical Management Perspective 12

Scientific Management, 12 • Administrative Management, 13 • The Classical Management Perspective Today, 14

The Behavioral Management Perspective 14 The Hawthorne Studies, 15 • The Human Relations Movement, 16 • Contemporary

Behavioral Science in Management, 17 • The Behavioral Management Perspective Today, 17

The Quantitative Management Perspective 17 Management Science, 17 • Operations Management, 18 • The Quantitative Management

Perspective Today, 19 Contemporary Management Perspectives 19

The Systems Perspective 19 The Contingency Perspective 20 Contemporary Management Issues and Challenges 21

Contemporary Applied Perspectives, 21 • Contemporary Management Challenges, 21 The Rise of the Service Sector 23

Summary of Learning Outcomes and Key Points 24 Discussion Questions 25 Building Effective Time Management Skills 26 Building Effective Decision-Making Skills 26

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Skills Self-Assessment Instrument 27 Experiential Exercise 28 Management at Work 29 You Make the Call: Reed Hastings Doesn’t Like Standing Still 31 Endnotes 31

CHAP T E R 2 The Environments of Organizations and Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 The Organization’s Environments 37

The General Environment 37 The Economic Dimension, 37 • The Technological Dimension, 37

What Goes Around… 38 The Political–Legal Dimension, 38

The Task Environment 39 Competitors, 39 • Customers, 39 • Supplier, 39 • Regulators, 40 • Strategic

Partners, 40 The Internal Environment 41

Owners, 41 • Board of Directors, 42 • Employees, 42 • Physical Work Environment, 42

The Ethical and Social Environment of Management 43 Individual Ethics in Organizations 43

Managerial Ethics, 43 • Managing Ethical Behavior, 44 Emerging Ethical Issues 45

Ethical Leadership, 45 • Corporate Governance, 46 • Ethics and Information Technology, 46

Social Responsibility in Organizations 47 Arguments for Social Responsibility, 47 • Arguments Against Social Responsibility, 47

Managing Social Responsibility 48 Formal Organizational Dimensions, 48

Greening the Business Environment: HP Keeps Itself in the Recycling Loop 49 Informal Organizational Dimensions, 50

The International Environment of Management 51 Trends in International Business 51 Levels of International Business Activity 51

Exporting and Importing, 52 • Licensing, 52 • Strategic Alliances, 53 • Direct Investment, 53

The Context of International Business 53 The Cultural Environment, 53 • Controls on International Trade, 54 • Economic

Communities, 55 • The Role of the GATT and WTO, 56 The Organization’s Culture 56

The Importance of Organizational Culture 56 Determinants of Organizational Culture 57 Managing Organizational Culture 57

Summary of Learning Outcomes and Key Points 58 Discussion Questions 58 Building Effective Interpersonal Skills 59 Building Effective Communication Skills 60 Skills Self-Assessment Instrument 60 Experiential Exercise 61 Management at Work 61 You Make the Call: Social Entrepreneurship at Its Finest 63 Endnotes 63

Contents vii

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PART 2 Planning

CHAP T E R 3 Planning and Strategic Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Planning and Organizational Goals 67

Organizational Goals 68 Purposes of Goals, 68 • Kinds of Goals, 69

Kinds of Organizational Plans 69 Strategic Plans, 69 • Tactical Plans, 69

Setting a New Direction for General Motors 70 Operational Plans, 70

The Nature of Strategic Management 71 The Components of Strategy 71 Types of Strategic Alternatives 72

Using SWOT Analysis to Formulate Strategy 72 Evaluating an Organization’s Strengths 72 Evaluating an Organization’s Weaknesses 74 Evaluating an Organization’s Opportunities and Threats 74

Formulating Business-Level Strategies 74 Porter’s Generic Strategies 74 Strategies Based on the Product Life Cycle 75

Formulating Corporate-Level Strategies 77 Single-Product Strategy 77 Related Diversification 77 Unrelated Diversification 78

Managing Diversification, 79 • BCG Matrix, 79 The Little-White-Lie Strategy 80 GE Business Screen 82

Tactical Planning 83 Developing Tactical Plans 83 Executing Tactical Plans 84

Operational Planning 84 Single-Use Plans 85

Programs, 85 • Projects, 85 Standing Plans 85

Policies, 86 • Standard Operating Procedures, 86 • Rules and Regulations, 86 Contingency Planning and Crisis Management 86

Summary of Learning Outcomes and Key Points 89 Discussion Questions 90 Building Effective Decision-Making Skills 91 Building Effective Communication and Interpersonal Skills 91 Skills Self-Assessment Instrument 92 Experiential Exercise 93 Management at Work 94 You Make the Call: Google’s Strategy for Dominance 96 Endnotes 96

CHAP T E R 4 Managing Decision Making . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 The Nature of Decision Making 100

viii Contents

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Decision Making Defined 100 Types of Decisions 101 Decision-Making Conditions 102

Decision Making Under Certainty, 102 • Decision Making Under Risk, 102 • Decision Making Under Uncertainty, 103

The Wide World of Risk 104

Rational Perspectives on Decision Making 104 The Classical Model of Decision Making 104 Steps in Rational Decision Making 105

Recognizing and Defining the Decision Situation, 105 • Identifying Alternatives, 105 • Evaluating Alternatives, 107 • Selecting the Best Alternative, 108 • Implementing the Chosen Alternative, 108 • Following Up and Evaluating the Results, 109

Evidence-Based Management 110 Behavioral Aspects of Decision Making 111

The Administrative Model 111 Political Forces in Decision Making 112 Intuition and Escalation of Commitment 113

Intuition, 113 • Escalation of Commitment, 113 A Bad Decision at Wesabe 114 Risk Propensity and Decision Making 115 Ethics and Decision Making 115

Group and Team Decision Making in Organizations 116 Forms of Group and Team Decision Making 116

Interacting Groups or Teams, 116 • Delphi Groups, 116 • Nominal Groups, 117 Advantages of Group and Team Decision Making 117 Disadvantages of Group and Team Decision Making 118 Managing Group and Team Decision-Making Processes 118

Summary of Learning Outcomes and Key Points 119 Discussion Questions 119 Building Effective Conceptual Skills 120 Building Effective Technical Skills 120 Skills Self-Assessment 121 Experiential Exercise 121 Management at Work 122 You Make the Call: The Embargo Grinds On 124 Endnotes 124

CHAP T E R 5 Entrepreneurship and New Venture Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 The Nature of Entrepreneurship 129 The Role of Entrepreneurship in Society 129

Job Creation 131 Innovation 132 Importance to Big Business 133

Strategy for Entrepreneurial Organizations 133 Choosing an Industry 133

Services, 133 • Retailing, 134

Contents ix

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A New Model for Going Green 135 Construction, 136 • Finance and Insurance, 136 • Wholesaling, 137

• Transportation, 137 • Manufacturing, 137 Emphasizing Distinctive Competencies 139

Identifying Niches in Established Markets, 139 • Identifying New Markets, 139 Samuel Adams Makes Headway 140

First-Mover Advantages, 141 Writing a Business Plan 141 Entrepreneurship and International Management 141

Structure of Entrepreneurial Organizations 142 Starting the New Business 142

Buying an Existing Business, 142 • Starting from Scratch, 143 Financing the New Business 143

Personal Resources, 143 • Strategic Alliances, 144 • Lenders, 144 • Venture Capital Companies, 144 • Small-Business Investment Companies, 144 • SBA Financial Programs, 145

Sources of Management Advice 145 Advisory Boards, 145 • Management Consultants, 145 • The Small Business

Administration, 146 • Networking, 147 Franchising 147

The Performance of Entrepreneurial Organizations 148 Trends in Small-Business Start-Ups 149

Emergence of E-Commerce, 149 • Crossovers from Big Business, 150 • Opportunities for Minorities and Women, 150 • Better Survival Rates, 151

Reasons for Failure 151 Reasons for Success 151

Summary of Learning Outcomes and Key Points 152 Discussion Questions 153 Building Effective Diagnostic Skills 153 Building Effective Conceptual Skills 154 Skills Self-Assessment Instrument 154 Experiential Exercise 155 Management at Work 155 You Make the Call: Putting the Greek into Yogurt 157 Endnotes 157

PART 3 Organizing

CHAP T E R 6 Organization Structure and Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 The Basic Elements Of Organizing 162

Job Specialization 162 Benefits and Limitations of Specialization, 162 • Alternatives to Specialization, 162

Grouping Jobs: Departmentalization 164 Functional Departmentalization, 165 • Product Departmentalization, 166 • Customer

Departmentalization, 166 • Location Departmentalization, 166 Establishing Reporting Relationships 166

Chain of Command, 166 • Span of Management, 167 • Tall Versus Flat Organizations, 167

x Contents

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Distributing Authority 167 The Delegation Process, 167

Delayering as a Defense Mechanism 168 Decentralization and Centralization, 169

A Panel of Your Peers 170 Coordinating Activities 170

The Need for Coordination, 171 • Structural Coordination Techniques, 171 • Electronic Coordination, 172

The Bureaucratic Model of Organization Design 172 Situational Influences on Organization Design 173

Core Technology 174 Environment 175 Organizational Size and Life Cycle 176

Basic Forms of Organization Design 177 Functional (U-Form) Design 177 Conglomerate (H-Form) Design 178 Divisional (M-Form) Design 179 Matrix Design 179 Hybrid Designs 181

Emerging Issues in Organization Design 182 The Team Organization 182 The Virtual Organization 182 The Learning Organization 182

Summary of Learning Outcomes and Key Points 183 Discussion Questions 184 Building Effective Conceptual Skills 184 Building Effective Diagnostic Skills 185 Skills Self-Assessment Instrument 185 Experiential Exercise 186 Management at Work 187 You Make the Call: Authority & Function at A&F 189 Endnotes 189

CHAP T E R 7 Organization Change and Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 The Nature of Organization Change 194

Forces for Change 194 External Forces, 194 • Internal Forces, 195

Planned Versus Reactive Change 195 Managing Change in Organizations 195

Steps in the Change Process 196 The Lewin Model, 196 • A Comprehensive Approach to Change, 196

Understanding Resistance to Change 197 Uncertainty, 197 • Threatened Self-Interests, 198 • Different Perceptions, 198 • Feelings

of Loss, 198 Overcoming Resistance to Change 198

Participation, 198 Charting a “New” Old Course 199

Education and Communication, 200 • Facilitation, 200 • Force-Field Analysis, 201

Contents xi

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Areas of Organization Change 201 Changing Organization Structure and Design 201 Changing Technology and Operations 202 Changing People, Attitudes, and Behaviors 203 Changing Business Processes 204

The Need for Business Process Change, 204 To Offshore or Not to Offshore 205

Approaches to Business Process Change, 206 Organization Development 207

OD Assumptions, 207 • OD Techniques, 207 • The Effectiveness of OD, 208 Organizational Innovation 209

The Innovation Process 209 Innovation Development, 209 • Innovation Application, 210 • Application

Launch, 210 • Application Growth, 210 • Innovation Maturity, 210 • Innovation Decline, 210

Forms of Innovation 210 Radical Versus Incremental Innovations, 211 • Technical Versus Managerial

Innovations, 211 • Product Versus Process Innovations, 211 The Failure to Innovate 212

Lack of Resources, 212 • Failure to Recognize Opportunities, 212 • Resistance to Change, 212 • Promoting Innovation in Organizations, 213 • The Reward System, 213 • Organization Culture, 213 • Intrapreneurship in Larger Organizations, 213

Summary of Learning Outcomes and Key Points 215 Discussion Questions 215 Building Effective Decision-Making Skills 216 Building Effective Diagnostic Skills 216 Skills Self-Assessment Instrument 217 Experiential Exercise 218 Management at Work 219 You Make the Call: Cultivating Innovation at IKEA 221 Endnotes 221

CHAP T E R 8 Managing Human Resources in Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 The Environmental Context of HRM 226

The Strategic Importance of HRM 226 The Legal Environment of HRM 227

Equal Employment Opportunity Title VII of the Civil Rights Act of 1964, 228 • Compensation and Benefits, 228

Labor Relations 229 Health and Safety, 230 • Emerging Legal Issues, 230

Attracting Human Resources 230 Human Resource Planning 230

Job Analysis, 230 • Forecasting Human Resource Demand and Supply, 231 • Matching Human Resource Supply and Demand, 232

Recruiting Human Resources 232 Selecting Human Resources 233

Application Blanks, 233 • Tests, 234 • Interviews, 234 • Assessment Centers, 234 • Other Techniques, 234

xii Contents

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Developing Human Resources 234 Training and Development 235

Assessing Training Needs, 235 • Common Training Methods, 235 • Evaluation of Training, 235

Darden Invests in Employee Development 236 Performance Appraisal 237

Common Appraisal Methods, 237 • Errors in Performance Appraisal, 238 Performance Feedback 239

Maintaining Human Resources 240 Determining Compensation 240 Holding True at Nucor Steel 241

Wage-Level Decision, 242 • Wage Structure Decision, 242 • Individual Wage Decisions, 243

Determining Benefits 243 Managing Workforce Diversity 244

The Meaning of Diversity 244 The Impact of Diversity 244

Diversity as a Competitive Advantage, 244 • Diversity as a Source of Conflict, 244 Managing Diversity in Organizations 245

Individual Strategies, 245 • Organizational Approaches, 245 Managing Labor Relations 246

How Employees Form Unions 246 Collective Bargaining 248

New Challenges in the Changing Workplace 249 Managing Knowledge Workers 249

The Nature of Knowledge Work, 249 • Knowledge Worker Management and Labor Markets, 249

Contingent and Temporary Workers 250 Trends in Contingent and Temporary Employment, 250 • Managing Contingent and

Temporary Workers, 250

Summary of Learning Outcomes and Key Points 251 Discussion Questions 252 Building Effective Decision-Making Skills 252 Building Effective Technical Skills 253 Skills Self-Assessment Instrument 254 Experiential Exercise 255 Management at Work 255 You Make the Call: No Company for Old-Fashioned Management 257 Endnotes 257

PART 4 Leading

CHAP T E R 9 Basic Elements of Individual Behavior in Organizations . . . . . . . . . . . . . . . . . . . . . . . 260 Understanding Individuals in Organizations 262

The Psychological Contract 262 The Person–Job Fit 263 The Nature of Individual Differences 264

Personality and Individual Behavior 264

Contents xiii

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The “Big Five” Personality Traits 264 The Myers–Briggs Framework 266 Other Personality Traits at Work 267 Emotional Intelligence 268

Attitudes and Individual Behavior 269 Work-Related Attitudes 269

Job Satisfaction or Dissatisfaction, 269 Toss It, or Recycle It? 270

Organizational Commitment, 271 Affect and Mood in Organizations 271

Perception and Individual Behavior 272 Basic Perceptual Processes 272

Selective Perception, 272 • Stereotyping, 272 Perception and Attribution 273

Stress and Individual Behavior 273 Causes and Consequences of Stress 275

Causes of Stress, 275 • Consequences of Stress, 276 Managing Stress 276 When Stress Becomes Too Tough to Handle 277

Creativity in Organizations 279 The Creative Individual 279

Background Experiences and Creativity, 279 • Personal Traits and Creativity, 280 • Cognitive Abilities and Creativity, 280

The Creative Process 280 Preparation, 280 • Incubation, 280 • Insight, 281 • Verification, 281

Enhancing Creativity in Organizations 281 Types of Workplace Behavior 282

Performance Behaviors 282 Withdrawal Behaviors 282 Organizational Citizenship 283 Dysfunctional Behaviors 283

Summary of Learning Outcomes and Key Points 284 Discussion Questions 285 Building Effective Interpersonal Skills 285 Building Effective Time Management Skills 286 Skills Self-Assessment Instrument 286 Experiential Exercise 287 Management at Work 287 You Make the Call: Putting In the Hours 289 Endnotes 289

CHAP T E R 1 0 Managing Employee Motivation and Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292 The Nature of Motivation 294 Content Perspectives on Motivation 295

The Needs Hierarchy Approach 296 The Two-Factor Theory 297 Individual Human Needs 298

Process Perspectives on Motivation 299

xiv Contents

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Expectancy Theory 299 Effort-to-Performance Expectancy, 300 • Performance-to-Outcome Expectancy, 300

• Outcomes and Valences, 300 • The Porter–Lawler Extension, 301 Equity Theory 302 Goal-Setting Theory 302

Goal Difficulty, 303 • Goal Specificity, 303 Reinforcement Perspectives on Motivation 304

Kinds of Reinforcement in Organizations 304 To Reward or To Punish? … That Is the Question 305 Providing Reinforcement in Organizations 306

Popular Motivational Strategies 307 Empowerment and Participation 307 Alternative Forms of Work Arrangements 307 Service with a Smile 308

Variable Work Schedules, 309 • Flexible Work Schedules, 309 • Job Sharing, 309 • Telecommuting, 310

Using Reward Systems to Motivate Performance 310 Merit Reward Systems 311 Incentive Reward Systems 311

Incentive Pay Plans, 311 • Other Forms of Incentive, 312 Team and Group Incentive Reward Systems 312 Common Team and Group Reward Systems 313

Other Types of Team and Group Rewards, 313 Executive Compensation 314

Standard Forms of Executive Compensation, 314 • Special Forms of Executive Compensation, 314 • Criticisms of Executive Compensation, 315

New Approaches to Performance-Based Rewards 316

Summary of Learning Outcomes and Key Points 316 Discussion Questions 317 Building Effective Interpersonal and Communication Skills 318 Building Effective Decision-Making Skills 318 Skills Self-Assessment Instrument 319 Experiential Exercise 319 Management at Work 321 You Make the Call: Motivating the Whole Person 323 Endnotes 323

CHAP T E R 1 1 Leadership and Influence Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 The Nature of Leadership 328

The Meaning of Leadership 329 Leadership and Management 329 Leadership and Power 329

Legitimate Power, 329 • Reward Power, 330 • Coercive Power, 331 • Referent Power, 331 • Expert Power, 331

Generic Approaches to Leadership 331 Leadership Traits 331 Leadership Behaviors 332

Michigan Studies, 332 • Ohio State Studies, 332 • Managerial Grid, 333 Situational Approaches to Leadership 334

Contents xv

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Leadership Tips for Tough Times 335 LPC Theory 336

Favorableness of the Situation, 337 • Favorableness and Leader Style, 337 • Flexibility of Leader Style, 338

Path-Goal Theory 338 Leader Behavior, 339 • Situational Factors, 339

Vroom’s Decision Tree Approach 340 Basic Premises, 340 • Decision-Making Styles, 342 • Evaluation and Implications, 343

The LMX Approach 343 Related Approaches to Leadership 344

Substitutes for Leadership 344 Charismatic Leadership 344 Transformational Leadership 345

Emerging Approaches to Leadership 346 Strategic Leadership 346 Cross-Cultural Leadership 346 Diversity Still Lagging in the Boardroom 347 Ethical Leadership 348

Political Behavior in Organizations 348 Common Political Behaviors 349 Impression Management 349 Managing Political Behavior 350

Summary of Learning Outcomes and Key Points 351 Discussion Questions 352 Building Effective Diagnostic Skills 352 Building Effective Interpersonal Skills 353 Skills Self-Assessment Instrument 354 Experiential Exercise 355 Management at Work 356 You Make the Call: When to Stand on Your Head and Other Tips from the Top 357 Endnotes 358

CHAP T E R 1 2 Communication in Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361 Communication and the Manager’s Job 364

A Definition of Communication 364 Characteristics of Useful Information 365

Accurate, 365 • Timely, 365 • Complete, 365 • Relevant, 366 The Communication Process 366

Forms of Communication in Organizations 367 Interpersonal Communication 367

Oral Communication, 367 • Written Communication, 367 • Choosing the Right Form, 368

Communication in Networks and Work Teams 368 Organizational Communication 369

Vertical Communication, 369 • Horizontal Communication, 370 Digital Communication 371

Information Systems, 371 The Brutally-Honest-Opinion Business 372

Personal Digital Technology, 374

xvi Contents

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Informal Communication in Organizations 375 The Grapevine 375 Management by Wandering Around 377 Nonverbal Communication 377 Say It with a Smile 378

Managing Organizational Communication 379 Barriers to Communication 379

Individual Barriers, 379 • Organizational Barriers, 380 Improving Communication Effectiveness 381

Individual Skills, 382 • Organizational Skills, 383

Summary of Learning Outcomes and Key Points 383 Discussion Questions 384 Building Effective Technical Skills 385 Building Effective Interpersonal Skills 385 Skills Self-Assessment Instrument 386 Experiential Exercise 387 Management at Work 387 You Make the Call: “Que Pasa in the Ad Agency?” 389 Endnotes 389

CHAP T E R 1 3 Managing Work Groups and Teams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391 Groups and Teams in Organizations 394

Types of Groups and Teams 394 Functional Groups, 394 • Informal or Interest Groups, 394 • Task Groups, 395

Using Customer-Created Groups for Competitive Advantage 396 Why People Join Groups and Teams 398

Interpersonal Attraction, 399 • Group Activities, 399 • Group Goals, 399 • Need Satisfaction, 399 • Instrumental Benefits, 400

Stages of Group and Team Development 400 Characteristics of Groups and Teams 402

Role Structures 402 Role Ambiguity, 402 • Role Conflict, 403 • Role Overload, 403

Measuring Carbon Footprints 404 Behavioral Norms 405

Norm Generalization, 406 • Norm Variation, 406 • Norm Conformity, 406 Cohesiveness 407

Factors That Increase Cohesiveness, 407 • Factors That Reduce Cohesiveness, 408 • Consequences of Cohesiveness, 408

Formal and Informal Leadership 409 Interpersonal and Intergroup Conflict 409

The Nature of Conflict 409 Causes of Conflict 410

Interpersonal Conflict, 410 • Intergroup Conflict, 411 • Conflict Between Organization and Environment, 412

Managing Conflict in Organizations 412 Stimulating Conflict 413 Controlling Conflict 413 Resolving and Eliminating Conflict 414

Negotiation 414

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Summary of Learning Outcomes and Key Points 416 Discussion Questions 417 Building Effective Conceptual Skills 417 Building Effective Communication Skills 418 Skills Self-Assessment Instrument 418 Experiential Exercise 419 Management at Work 419 You Make the Call: Managing by Clowning Around 421 Endnotes 421

PART 5 Controlling

CHAP T E R 1 4 Basic Elements of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424 The Nature of Control 426

The Purpose of Control 427 Adapting to Environmental Change, 427 • Limiting the Accumulation of

Error, 427 • Coping with Organizational Complexity, 428 • Minimizing Costs, 428 Types of Control 428 Engineering Time 429

Areas of Control, 430 • Levels of Control, 430 • Responsibilities for Control, 431 Steps in the Control Process 432

Establishing Standards, 432 • Measuring Performance, 433 • Comparing Performance Against Standards, 433 • Considering Corrective Action, 434

Operations Control 434 Preliminary Control 434 Screening Control 435 Postaction Control 436

Financial Control 436 Budgetary Control 436

Types of Budgets, 437 • Developing Budgets, 438 • Strengths and Weaknesses of Budgeting, 439

Other Tools for Financial Control 440 Financial Statements, 440 • Ratio Analysis, 440 • Financial Audits, 440

Structural Control 441 Bureaucratic Control 442 Decentralized Control 443

Strategic Control 443 Managing Control in Organizations 444

Characteristics of Effective Control 444 Integration with Planning, 444 • Flexibility, 444

Balancing Control with Fun 445 Accuracy, 445 • Timeliness, 446 • Objectivity, 446

Resistance to Control 446 Overcontrol, 446 • Inappropriate Focus, 447 • Rewards for Inefficiency, 447 • Too Much

Accountability, 447 Overcoming Resistance to Control 447

Encourage Employee Participation, 447 • Develop Verification Procedures, 448

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Summary of Learning Outcomes and Key Points 448 Discussion Questions 449 Building Effective Time Management Skills 449 Building Effective Technical Skills 450 Skills Self-Assessment Instrument 451 Experiential Exercise 451 Management at Work 453 You Make the Call: Shifting Gears in the Auto Industry 454 Endnotes 455

CHAP T E R 1 5 Managing Operations, Quality, and Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456 The Nature of Operations Management 459

The Importance of Operations 459 Manufacturing and Production Operations 460 Service Operations 460 The Role of Operations in Organizational Strategy 461

Designing Operations Systems 461 Determining the Product–Service Mix 462 Capacity Decisions 462 Facilities Decisions 462

Location, 462 • Layout, 463 How to Get2 a Human 464

Organizational Technologies 465 Manufacturing Technology 466

Automation, 466 • Computer-Assisted Manufacturing, 467 • Robotics, 468 Service Technology 468

Implementing Operations Systems Through Supply Chain Management 469 Operations Management as Control 469 Combining Technology and Artistry 470 Purchasing Management 471 Inventory Management 472

Managing Total Quality 473 The Meaning of Quality 473 The Importance of Quality 474

Competition, 474 • Productivity, 474 • Costs, 475 Total Quality Management 475

Strategic Commitment, 475 • Employee Involvement, 476 Technology, 476 • Materials, 476 • Methods, 476

TQM Tools and Techniques 476 Value-Added Analysis, 476 • Benchmarking, 476 • Outsourcing, 477 • Reducing Cycle

Time, 477 • ISO 9000:2000 and ISO 14000, 478 • Statistical Quality Control, 478 • Six Sigma, 478

Managing Productivity 478 The Meaning of Productivity 479

Levels of Productivity, 479 • Forms of Productivity, 479 The Importance of Productivity 479 Productivity Trends 480 Improving Productivity 481

Improving Operations, 481 • Increasing Employee Involvement, 482

Contents xix

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Summary of Learning Outcomes and Key Points 482 Discussion Questions 483 Building Effective Communication Skills 484 Building Effective Diagnostic Skills 484 Skills Self-Assessment Instrument 485 Experiential Exercise 485 Management at Work 486 You Make the Call: Orchestrating Outcomes 488 Endnotes 488 Appendix: Interpretations of Skills Self-Assessment Instruments . . . . . . . . . . . . . . . . . . 490 Name Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502 Organization and Product Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 505 Subject Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 510

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Preface

Literally hundreds of books have been written for introductory management courses. As the body of material comprising the theory, research, and practice of management has grown and expanded, textbook authors have continued to mirror this expansion of mate- rial in their books. Writers have understood the importance of adding new material about traditional topics, such as planning and organizing, while simultaneously adding coverage of emerging newer topics, such as sustainability, ethics, and social media. As a by-product of this trend, our general survey textbooks have grown longer and longer, making it increasingly difficult to cover all the material in one course.

Another trend in management education is a focus on teaching in a broader context— that is, introductory management courses are increasingly being taught with less emphasis on theory alone and more emphasis on application of concepts. Teaching students how to apply management concepts successfully often involves focusing more on skills development and the human side of the organization. This trend requires that textbooks cover theoretical concepts within a flexible framework that enables instructors to make use of interactive tools such as case studies, exercises, and projects. It also dictates that a text be as relevant to students as possible. Hence, while this book draws examples and cases from older large firms like Ford, IBM, and Nissan, it also makes extensive use of newer firms such as Google, Netflix, Facebook, Star- bucks, Urban Outfitters, and others.

This textbook represents a synthesis of these trends toward a more manageable and practical approach. By combining concise text discussion, standard pedagogical tools, lively and current content, an emphasis on organizational behavior, and exciting skills development material, Fundamentals of Management answers the need for a new approach to management education. This book provides almost limitless flexibility, a solid foundation of knowledge-based material, and an action-oriented learning dimen- sion unique in the field. Indeed, over half a million students were introduced to the field of management using the first seven editions of this book. This eighth edition builds solidly on the successes of the earlier editions.

ORGANIZATION OF THE BOOK Most management instructors today organize their course around the traditional man- agement functions of planning, organizing, leading, and controlling. Fundamentals of Management uses these functions as its organizing framework. The book consists of five parts, with fifteen chapters.

Part One introduces management through two chapters. Chapter 1 provides a basic overview of the management process in organizations, and Chapter 2 introduces students to the environment of management. Part Two covers the first basic management func- tion, planning. Chapter 3 introduces the fundamental concepts of planning and discusses strategic management. Managerial decision making is the topic of Chapter 4. Finally, Chapter 5 covers entrepreneurship and the management of new ventures.

The second basic management function, organizing, is the subject of Part Three. In Chapter 6, the fundamental concepts of organization structure and design are introduced

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and discussed. Chapter 7 explores organization change and organizational innovation. Chapter 8 is devoted to the management of human resources.

Many instructors and managers believe that the third basic management function, leading, is especially important in contemporary organizations. Thus, Part Four consists of five chapters devoted to this management function. Basic concepts and processes asso- ciated with individual behavior are introduced and discussed in Chapter 9. Employee motivation is the subject of Chapter 10. Chapter 11 examines leadership and influence processes in organizations. Communication in organizations is the topic of Chapter 12. The management of groups and teams is covered in Chapter 13.

The fourth management function, controlling, is the subject of Part Five. Chapter 14 introduces the fundamental concepts and issues associated with management of the con- trol process. A special area of control today, managing for total quality, is discussed in Chapter 15.

SKILLS-FOCUSED PEDAGOGICAL FEATURES Both the overarching framework and streamlined topical coverage make it possible to address new dimensions of management education without creating a book so long that it is unwieldy. Specifically, each chapter is followed by an exciting set of skills-based exercises and related activities. These resources have been created to bring an active and a behavioral orientation to management education by requiring students to solve problems, make decisions, respond to situations, and work in groups. In short, these materials simulate many of the day-to-day challenges and opportunities that real man- agers face.

Among these skills-based exercises are two different Building Effective Skills features organized around the set of basic management skills introduced in Chapter 1. The Skills Self-Assessment Instrument exercise helps readers learn something about their own approach to management. Feedback for the Self-Assessment Instruments can be found in the Appendix. Finally, an Experiential Exercise provides additional action-oriented learning opportunities, usually in a group setting.

New to the eighth edition, each chapter also contains interesting boxed features, two per chapter, centered around sustainability, leadership, the service sector, and managing during tough times. These features depart briefly from the flow of the chapter to highlight or extend especially interesting or emerging points and issues related to boxed feature titles.

In addition to the end-of-chapter exercises, every chapter includes important standard pedagogy: learning objectives, a chapter outline, an opening incident, key terms, a sum- mary of key points, questions for review, questions for analysis, and an end-of-chapter case with questions.