Book Contents Management Book by Koontz 13 Edition

Thirteenth EditionThirteenth Edition University of San Francisco Heinz Weihrich University of San Francisco Mark V. Cannice University of California Los Angeles Harold Koontz Tata McGraw Hill Education Private Limited NEW DELHI McGraw-Hill Offices New Delhi New York St Louis San Francisco Auckland Bogotá Caracas Kuala Lumpur Lisbon London Madrid Mexico City Milan Montreal San Juan Santiago Singapore Sydney Tokyo Toronto Tata McGraw Hill Published by the Tata McGraw Hill Education Private Limited, 7 West Patel Nagar, New Delhi 110 008. Management: A Global and Entrepreneurial Perspective, 13e Copyright © 2010, by Tata McGraw Hill Education Private Limited. No part of this publication may be reproduced or distributed in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise or stored in a database or retrieval system without the prior written permission of the publishers. 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Management: A Global and Entrepreneurial Perspective. His consulting. His current research interests are in improving the global competitiveness of enterprises and nations. and Spanish languages. Korea. and the KAIST (Korea Advanced Institute of Science and Technology) Business School in Seoul. He has authored more than 90 books. and the University of Applied Science in Ludwigshafen. Jamaica. Greek. and career strategy. Kuwait. Dr Weihrich has been active in management consulting as well as in management and organizational development in the United States. Long Range Planning. strategic management.About the Authors Heinz Weihrich is Professor Emeritus of Global Management and Behavioral Science at the University of San Francisco (USF). and behavioral science. The book Management has been the best-seller around the world for many years and has been the best-seller in the Spanish-language edition for more than 25 years. Weihrich has taught at Arizona State University. Volkswagen. the East China University of Science and Technology (ECUST) in Shanghai. Italian. Japanese. business and teaching experiences include working with companies such as Eastman Kodak. Management International Review. Switzerland. Mexico. Africa. His fields of work are management. formerly co-authored by the late Horold Koontz and the late Cyril O’Donnell (translated into 16 languages in its various editions). He is a visiting professor at Peking University in Beijing. China (Beijing and Shanghai). Germany. and Essentials of Management (also in several language editions). Taiwan. He has also been a faculty member at the Graduate School of Business in Zurich. He received his doctorate from the University of California at Los Angeles (UCLA) and an honorable doctorate from San Martin University in Peru. Management Excellence—Productivity Through MBO. successoriented management system. UCLA. He was a visiting scholar at the University of California in Berkeley. France. In addition to pursuing his academic interests. and is the co-author of the classic Management: A Global Perspective. international management. Germany. . China. South Korea. The Academy of Management Executive. Malaysia. German. and Thailand. and the European Business Review (“Analyzing the Competitive Advantages and Disadvantages of Germany with the TOWS Matrix—an Alternative to Porter’s Model” was selected as the most outstanding paper in 1999). the Harvard Business School. The book has been translated into Chinese. Another book. including its various editions and translations. and in countries such as Austria. Over 140 of his articles have been published in the United States and overseas in several languages in journals such as Human Resource Planning. D. Five Thousand Personalities of the World.S. and his web site at http://www. and service.) Prof.S.g..edu/facstaff/weihrichh/ Mark V. Xinhua News Service. given keynote address to CEO/CTO. carried globally on Bloomberg Professional Services in 125 countries (Bloomberg ticker symbol: USFSVVCI). Men of Achievement. teaching. Pacific Business Development. Journal of High Technology Management Research. teacher. from the United States Naval Academy (Annapolis). New York Times. International Leaders in Achievement. He writes a similar quarterly report on the Chinese venture capital industry. and M. Naval Reserves. Marquis’ Who’s Who in the West. He also served nine years as a Naval Flight Officer in the U. is an internationally recognized scholar. and speaker on entrepreneurship and venture capital. an international trading firm. Inc. and private equity manger audiences. He also founded his own company. National Public Radio. from Indiana University Kelley School of Business. He holds a Ph.S. He is also the Founder and Executive Director of the USF Entrepreneurship Program (recognized among the nation’s leading entrepreneurship programs). etc. an MBA from USF. He has given many speeches on global management topics in the United States. Venture Capital: An International Journal of Entrepreneurial Finance. Dictionary of International Biography. He has been a Visiting Professor at the Hong Kong University of Science and Technology (2006) and Peking University (2005)—China’s top two universities. and Latin America on entrepreneurial education. Cannice. Der Spiegel. and many other media.D. and the Institute Pembangunan Keusahawanan (Malaysia). and was promoted to Commander in the U. Management International Review. Mexico. and Peru. Who’s Who in American Education. Europe. usfca. China Venture Capitalist Confidence Index ReportTM (Bloomberg ticker symbol: CVCCI). CNBC. Asia. and advised numerous start-up ventures. Wall Street Journal. Europe.vi About the Authors Hughes Aircraft. For more biographical information on this author see International Businessmen’s Who’s Who. China Resources Co. where he has been recognized for outstanding research. Journal of Small Business and Entrepreneurship. Cannice writes the widely-followed quarterly Silicon Valley Venture Capitalist Confidence Index Report® which is published by ProQuest. . ABB (Switzerland).. He is a Professor of Entrepreneurship and Innovation with the University of San Francisco School of Business and Professional Studies. the highest honor conferred by the international management movement. Navy—most notably as a Patrol Plane Mission Commander throughout the Pacific. Reuters. Who’s Who in America. attorney. Ph. Who’s Who in California. Who’s Who in the World. Guangdong Enterprises (China). Africa. Cannice has advised and lectured governmental organizations and universities from Asia. Prof.S. He founded and directed the prestigious international business plan competitions at the University of San Francisco and the Hong Kong University of Science and Technology. and a B. He has been elected as a Fellow of the International Academy of Management. Professor Cannice’s research in venture capital and technology management has been published in many leading academic journals (e. Mercedes-Benz. and has been referenced in the Economist. and Who’s Who in the World. Purex Corporation. and General Telephone Company. and Director of Sales for Convair. Hughes Tool Company. Professor Koontz’s honors included election as a Fellow of the American Academy of Management and the International Academy of Management and a term of service as President of the former. which was originally called Principles of Management. management consultant. Dr Koontz served as Assistant to the Trustees of the New Haven Railroad. university professor.About the Authors vii Harold Koontz was an active as a business and government executive. He acted as management consultant for. From 1950 he was Professor of Management and from 1962 Mead Johnson Professor of Management at UCLA. Occidental Petroleum Corporation. He received the Mead Johnson Award in 1962 and the Society for Advancement of Management Taylor Key Award in 1974 and is listed in Who’s Who in America. Hughes Aircraft Company. After his doctorate at Yale. lecturer to the top management of organizations worldwide. Assistant to the President of Trans World Airlines. company board chairman and director. Chief of the Traffic Branch of the War Production Board. He was the author or coauthor of 19 books and 90 journal articles. . and an author. from 1978 to 1982 he was World Chancellor at the International Academy of Management. He passed away in 1984. among others. Assistant to the Vice-President of the Association of American Railroads. Who’s Who in Finance and Industry. His Board of Directors and Effective Management was given the Academy of Management Book Award in 1968. Metropolitan Life Insurance Company. including this book. KLM Royal Dutch Airlines. . In memory of Harold Koontz A pioneer in management education who “untangled the management theory jungle” by organizing managerial knowledge according to the management functions. To my wife Ursula Heinz Weihrich To my family Mark Cannice . the framework used in today’s popular textbooks. . and rewarding managerial career. but also includes the very important topic of entrepreneurship. A systems model. They include students in colleges and universities—who will one day join organizations—aspiring managers. In this edition. The Latin American editions have been bestsellers in the Spanish-speaking world for more than a decade. other professionals who want to understand the organization in which they work. middle managers. but it not only adds much new information pertinent to the 21st century. attention is given to topics in the European Union and Asia. the book takes an international view of managing. For many years. managerial knowledge is classified according to the functions of planning. and teaching in many countries. The managerial functions are essentially the same for first-line supervisors. Beyond the discussion of managerial issues in the Americas. To be sure. which has been translated into 16 languages. we strive to include an innovative perspective to the practice of management not found in other management texts. and other not-for-profit enterprises. there are considerable variations in the environment. they have responded by using this book. regions that are sometimes neglected in other management textbooks. We also now highlight the Silicon Valley entrepreneurial perspective in this text. we have drawn from our business experiences and integrate theory with practice. managers who want to become more effective. At the same time. Through our experience of working with many leaders in the entrepreneurial eco-system of Silicon Valley. WHO WILL BENEFIT FROM THIS BOOK? All persons who work in organizations and entrepreneurs will benefit from learning about contemporary managing. such as governments. previous editions of this book have been bestsellers globally. and entrepreneurs who need to learn how to plan new businesses and communicate their competitive edge to investors. educational institutions. ORGANIZATION OF THE BOOK As in previous editions. integrates . Consequently. organizing. health-care providers. and top executives. indicates. The international perspective is essential because national barriers are crumbling and new alliances among companies and peoples are being formed. This book has had an international orientation long before it became fashionable to do so. and controlling. The entrepreneurial viewpoint is integrated throughout the book. Management: A Global and Entrepreneurial Perspective. This book is for people in all kinds of organizations. and professors and listened to their challenges. travels. As the title. and types of problems in the various positions. Yet all managers undertake the same basic functions to obtain results by establishing an environment for effective and efficient performance of individuals working together in groups. we have learned from students. leading.Preface The objective of this book is to prepare men and women for an exciting. we realize that it is an entrepreneurial spirit that drives much organizational and personal success. managers. Through our research. scope of authority. The 13th edition builds on that tradition. used throughout the book. staffing. as in previous ones. challenging. Parts 2 through 6 discuss the managerial functions of planning. this edition builds on the strong characteristics of previous editions. especially those being applied to management from the behavioral. it also introduces the systems model that serves as the framework of this book. REVISION WORK IN THIS EDITION While material that was well received over the years has been retained. executives. significant additional focus on the managerial environment in India and China has been included through cases and perspectives throughout the text. Furthermore. Part 1 covers the basis of global management theory and practice. social. as the external environment has become more challenging through internationalization and more open to communication over the Internet. scholars.xii Preface these functions into a system. All chapters have been updated with current international and entrepreneurial perspectives on management. leading. such as breadth. we have responded to three major influences. and advanced techniques. The final influence on the new edition has come from entrepreneurs. for each function are summarized in Appendix A at the end of the book. In revising this book. and attorneys from Silicon Valley have been included to bring current and deep insights to the principal of managing entrepreneurially. certain revision work should be pointed out. Specifically. the closings for Parts 1 to 6 have an international and entrepreneurial focus section that gives special attention to important issues such as China as a new economic power and the entrepreneurial environment of Silicon Valley. The discussion and application of entrepreneurship is carried on throughout the book — not just added to it. and decision-making heuristics has been introduced as they apply to the management function. to emphasize the international orientation. To exemplify the global competitiveness of automobile companies. Although not all changes can be mentioned here. and quality management. New theoretical content on the blue ocean strategy. techniques. One is the valuable feedback from teachers. venture capitalists. many modern ideas. new ideas. and to assist new entrepreneurs. the use of examples. comparative. or guides. The integration of the Value Chain concept with the systems approach to management has also been added to provide a deeper appreciation for the power of these approaches to management. and students in the United States and abroad who have used past editions of this book at various levels of academic and practical management education in a wide variety of universities and enterprises. The relevant principles. The entrepreneurial and international perspectives of managing are emphasized upon in each of the part’s closing section. and physical sciences as well as information technology. much new information has been added. Part 2 (Chapters 4 to 6) presents new cases on management in India as well as numerous interviews and insights from Silicon . it also includes a chapter on global. venture capitalists. Part 1 includes chapters on management and its relations to the external environment. and attorneys who generously shared their experiences. Moreover. at the same time. and features have been added. and controlling. especially those providing an Asian perspective of managing. Another major influence to which we have responded is the great volume of research. New interviews with leading entrepreneurs. and ethics. The suggested open systems view is even more important now than in the past. organizing. a global car industry case is presented in each part closing. and cases. balanced scorecard. For example. social responsibility. To provide the perspective of the book. Part 1 (Chapters 1 to 3) now includes a discussion on management during the global financial crisis and the pursuit of energy independence as well as cases on China and the EU. we include a business plan outline in the format expected by business professionals in Silicon Valley. depth. staffing. it also links the enterprise with its environment. The emphasis is on managerial practice based on sound theory. for the managerial functions of planning. The text in the left margins gives an overview of the key points in the chapter. Professor Koontz and we are indebted to so many persons contributing to the various editions that a complete acknowledgment would be encyclopedic. The Management Excellence Survey can be used for managerial and organizational development. writers. To relate these ideas and concepts to the “real” world. These closings. LEARNING AIDS To aid learning. The managerial function of leading is discussed in Part 5 (Chapters 14 to 17). which have been continuously updated. It begins with the objectives that are to be accomplished after reading the chapter. or guides. Readers are encouraged to make use of the World Wide Web by conducting Internet research. Part 6 (Chapters 18 to 20) deals with the managerial function of controlling. Indeed. Staffing issues are examined in Part 4 (Chapters 11 to 13) with the identification of the “best companies to work for” as well as the “most admired companies” based on research by Fortune magazine along with a discussion of human resource management in India and Silicon Valley. and theories presented. a framework now used around the world. ACKNOWLEDGMENTS The late Dr. includes new perspectives on managing for operational efficiency and effectiveness as well as new theoretical content on the balanced scorecard approach and value chain activities. He will never be forgotten for his contributions to management. staffing. The purpose of both appendixes is to facilitate the integration of theory with practice. The principles allow students and managers to check whether organizational problems can be traced to the violation of managerial principles. Two appendixes are at the end. give the book a truly global perspective of management theory and practice. The use of international and entrepreneurial perspectives illustrates the concepts. It also aids in reviewing key concepts. The first summarizes the principles. Harold Koontz is sorely missed. Each chapter concludes with a summary and a list of key ideas and concepts for review. The various issues of organizing are considered in Part 3 (Chapters 7 to 10) focusing on topics such as the “boundaryless” organization as practiced by General Electric along with new insights into the management of intellectual property for competitive advantage. Focus on Tata and Cisco has been included along with a perspective on the impact of proper corporate communications. and a global car industry case. and managers are acknowl- . Included in the margins as well are websites to refer readers to further information related to the organization or topic under discussion. and controlling in Appendix A. The second Appendix (B) is even more specific. leading. Each of the closings contains an international focus discussion with a challenging topic. principles. What makes this book different from many other management textbooks is the addition of the closing section in each of the six parts.Preface xiii Valley. At a memorial session at an Academy of Management meeting. preserved in his numerous articles and his many books. Professor Ronald Greenwood stated that Howdy Koontz was many years ahead of his time. Many scholars. A case with questions ends each chapter. his inspiration and guidance popularized the classification of management knowledge according to managerial functions. together with the discussion of international management issues throughout the book. organizing. each chapter is organized as follows. identifying specific areas critical for the success of managers and organizations. exercises and action steps are suggested. a current entrepreneurial discussion. special appreciation was expressed to those who contributed in many important ways. government. Thailand. HEINZ WEIHRICH MARK CANNICE . Weihrich’s mentors at the University of California. we thank our wives Ursula and Gay for their continuing support. Moreover. In previous editions. and Gene Seyna. and Chulalongkorn University in Bangkok provided valuable insights into managerial practices in their countries. Finally. the managers in executive programs in Switzerland. consultants. venture capitalists. For this edition we would like to express our appreciation to all the people at Tata McGraw Hill in India for their interest in and contribution to our book. George S. We thank the many executives. and Hong Kong provided us with opportunities to learn about their cultures and their managerial practices. the students and executives at the China Europe International Business School (CEIBS) in Shanghai. They have contributed greatly to make the book a bestseller in the Spanish-speaking world. Los Angeles. to those executives with whom we have been privileged to work as directors. to whom Weihrich’s book Management Excellence: Productivity through MBO has been dedicated. Hong Kong University of Science and Technology. China. especially Professor George S. Steiner. Thousands of managers in all kinds of enterprises in various countries have honored us over the years by allowing us to test our ideas in executive training classes and lectures. While they are not named here. or teachers. Odiorne. Malaysia. entrepreneurs. Many managers with whom we have served in business. Professors Peter F.xiv Preface edged through references in the text. scholars. Specifically. and other enterprises have contributed by word and example. Especially helpful were the many executives around the world who generously shared their international experiences. Peking University in Beijing. and attorneys who generously provided their insightful perspectives to make this book more vital and valuable to its readers. Many colleagues. have sharpened the thinking about goal-driven management systems and managerial productivity. The late Professor Keith Davis of Arizona State University was particularly generous with his time. Drucker. managers. Kuwait. educational. and students have contributed their ideas and suggestions to this book. We would like to thank the many adopters and contributors to the best-selling Spanish-language editions of Management: A Global Perspective and the many people at McGraw-Hill Interamericana who were involved in publishing previous editions. For example. their contributions have been important for this edition too. have done much to stimulate the interest in the development of the TOWS Matrix for strategic planning. we are grateful for the opportunity to gain the clinical practice of managing. 6 Time spent in carrying out managerial functions Skills and management levels Approaches to management The management process.1 TOWS matrix—A conceptual model C2.1 4.2 1.2 TOWS matrix for India 143 145 156 157 .2 The Baldrige award criteria framework: dynamic relationships 3.1 1.2 4.1 The organization and its external environment 38 Chapter 3 Figure Figure Figure Figure 3.1 TWOS Matrix for the competitive situation of China 59 75 77 85 Chapter 4 Figure Figure Figure Figure 4.3 The European Foundation for Quality Management model for business excellence C1. approach Input–output model Systems approach to management 6 6 17 22 22 24 Chapter 2 Figure 2.3 1.4 Strategic planning process model TOWS Matrix for strategy formulation Dynamics of the TOWS Matrix Business portfolio matrix 19 123 125 127 Chapter 6 Figure Figure Figure Figure 6.List of Figures Chapter 1 Figure Figure Figure Figure Figure Figure 1.4 Close relationship of planning and controlling Steps in planning Relationship of objectives and the organizational hierarchy Systems approach to management by objectives 96 101 105 110 Chapter 5 Figure Figure Figure Figure 5.1 Forms of international business 3.2 5.2 The nature of problems and decision making in the organization C2. or operational.5 1.3 5.3 4.1 5.1 Bases for selecting from among alternative courses of action 6.4 1. 2 8.3 13.4 Figure C2.5 8.3 Management by processes Figure 7.2 The appraisal process Formulation of a career strategy 276 285 Chapter 13 Figure Figure Figure Figure 13.1 8.1 Formal and informal or informational organizations 225 Chapter 11 Figure Figure Figure Figure 11.2 11.4 Manager development process and training Analysis of training needs Moving an organizational equilibrium A model of the organization development process 295 296 304 307 .1 Figure 12.2 Organization structures with narrow and wide spans Figure 7.2 13.5 TOWS Matrix for Chrysler Corporation before the merger TOWS Matrix for Daimler-Benz before the merger TOWS Matrix for Daimler-Chrysler after the merger 166 167 168 Chapter 7 Figure 7.1 13.1 Formal and informal organizations Figure 7. organization grouping (in a manufacturing company) Customer departmentation (in a large bank) A product organization grouping (in a manufacturing company) Matrix organization (in engineering) Typical strategic business unit organization (in a large industrial chemical company) 192 193 194 195 197 198 Chapter 9 Figure 9.6 A functional organization grouping (in a manufacturing company) A territorial.3 11.4 The organizing process 175 177 183 185 Chapter 8 Figure Figure Figure Figure Figure Figure 8.1 Centralization and decentralization as tendencies 210 Chapter 10 Figure 10.1 11.3 8.4 Systems approach to staffing Manager inventory chart Personnel actions based on manager supply and demand within the enterprise Systems approach to selection 245 247 248 255 Chapter 12 Figure 12. or geographic.xvi List of Figures Figure C2.4 8.3 Figure C2. 3 Sample Value Chain Activities and Managerial Actions for a Computer Manufacturer C6.List of Figures xvii Chapter 14 Figure 14.1 Increased complexity of relationships through increase in group size Figure 16.2 PERT flowchart Figure 19.1 Figure 18.2 Which comparison line is the same length as the standard line? 381 383 Chapter 17 Figure 17.3 Feedback loop of management control Comparison of simple feedback and feedforward systems System of inputs for feedforward inventory control 429 432 433 Chapter 19 Figure 19.1 Transition from a Gantt chart to PERT Figure 19.3 Matrix for e-commerce 449 451 465 Chapter 20 Figure Figure Figure Figure Figure 20.2 Comparison of Maslow’s and Herzberg’s theories of motivation Figure 14.4 Equity theory Figure 14.2 Illustration of Milestones and Financing to Achieve Rapid Growth and Liquidity 477 482 490 498 502 .1 Operations management system 20.2 The managerial grid Figure 15.3 The purpose and function of communication A communication process model Information flow in an organization 392 393 396 Chapter 18 Figure 18.2 Figure 17.1 The future of global management matrix C6.2 Figure 18.1 Maslow’s hierarchy of needs Figure 14.5 Objective or goal setting for motivation 330 332 334 335 336 Chapter 15 Figure 15.3 Continuum of manager–nonmanager behavior Figure 15.5 Path–goal approach to leadership effectiveness 357 359 361 364 366 Chapter 16 Figure 16.1 The flow of influence with three leadership styles Figure 15.3 Porter and Lawler’s motivation model Figure 14.1 Figure 17.2 Inventory control model 20.4 Fiedler’s model of leadership Figure 15. . 1 Illustrations of organization culture and management practice Table C3.1 Examples of nonverifiable and verifiable objectives Table 4.2 Intellectual Property Overview Chapter 11 Table 11.1 Table 3.1 Table 9.1 Factors influencing the span of management Advantages and limitations of decentralization Chapter 9 Chapter 10 Table 10.1 Comparison of Business Entities Table C3.1 Table 19. federal laws governing equal employment opportunity Sample questions for appraising managers as managers An Example of the Balanced Scorecard Approach for Operationalizing Strategic Objectives Examples of operations systems Mass production versus lean production managerial practices Chapter 12 Chapter 19 453 478 487 Chapter 20 Table 20.2 Checklist of manager objectives Chapter 7 Table 7.S.1 Table 2.1 Table 3.1 Table 12.2 The emergence of management thought Arguments For and Against Social Involvement of Business Managing Domestic and International Enterprises Five Dimensions of Behavior 12 43 58 66 107 108 178 214 227 235 237 250 280 Chapter 2 Chapter 3 Chapter 4 Table 4.2 .List of Tables Chapter 1 Table 1.1 Table 20.1 Major U. . on Social Responsibility in Entrepreneurial Management 44 International Perspective: Energy Independence—The Need of the Time 45 International Perspective: Harley Davidson Motorcycles for the Rich in India 45 International Perspective: Scandals and Corporate Governance 46 International Perspective: Code of Ethics for Government Service 47 International Perspective: Truth in Advertising Regulations Differ in Various Countries 50 Entrepreneurial Perspective: Ethics and Trust for the Entrepreneur and Investor 51 Chapter 3 International Perspective: Cheap Cars are “In” Entrepreneurial Perspective: Interview with Bryant Tong. Venture Capitalist Partner with Nth Power. the Year of the Global Financial Crisis? International Perspective: Asia Business Week Ranking of the Top 50 Companies Entrepreneurial Perspective: The Fastest-Growing Companies International Perspective: The Wisdom of Peter Drucker 7 8 10 15 Chapter 2 International Perspective: How Do Companies Provide Service in Times of an Economic Crisis? 39 International Perspective: The Third Wave: The Knowledge Age 39 International Perspective: The Bhopal Plant in India 40 International Perspective: The Greening of GM 41 International Perspective: Social Responsiveness at Infosys 42 Entrepreneurial Perspective: Interview with David Epstein. on Cultural Differences and Entrepreneurial Management International Perspective: Multinational Challenges and Opportunities in India for Companies like Wipro Entrepreneurial Perspective: Can eBay’s Success Continue? International Perspective: Thailand’s Competitive Advantage: Pickup Trucks International Perspective: Is There a European Management Model? International Perspective: Are Japanese Workers Happy? International Perspective: A Comparison of China and India International Perspective: Is China Losing It’s Competitive Advantage? International Perspective: General Motors’s (GM) Expansion in India 60 61 62 63 65 68 70 72 72 73 . Management Consultant with Epstein Advisors.List of Perspectives Chapter 1 International Perspective: Who Manages Best in 2008. Decisions. Decisions International Perspective: The Battle of the Titans: Boeing vs. Co-founder of Bharosa. Managing Director with Nth Power 98 99 102 103 103 108 109 Chapter 5 International Perspective: Value. Fisher. eBay’s Mistake? 117 120 121 124 127 128 129 Chapter 6 International Perspective: Decisions. an Oracle Corporation company Entrepreneurial Perspective: Interview with Art Ciocca.and Policy-driven Samsung Strives for Global Recognition Entrepreneurial Perspective: Interview with Jon B. on the Investment Decision Process International Perspective: Boeing’s Decision to Go Digital in Developing the 777 International Perspective: IBM’s Louis Gerstner as Decision Maker Entrepreneurial Perspective: Interview with Girish Acharya. Engineering Director in SRI’s Artificial Intelligence Center. on Managing for Innovation International Perspective: Innovation in India: Microfinancing International Perspective: Learning Innovation from Emerging Countries International Perspective: How 3M Fosters Innovation 139 141 142 145 146 147 148 149 149 Chapter 7 Entrepreneurial Perspective: What Is in Your Future? International Perspective: Post-it Note Pads International Perspective: Reengineering and Lean Production at Starbucks? 180 181 183 Chapter 8 International Perspective: Organizing the Chrysler Fiat Strategy International Perspective: Organizational Challenges at the TATA Conglomerate 196 199 .500 Nano Car International Perspective: Evaluating Alternative Courses for the Indian Automakers to Mitigate the Environmental Impact Entrepreneurial Perspective: Writing a Business Plan for a New Venture International Perspective: Public Goal Setting May be Risky.xxii List of Perspectives Chapter 4 International Perspective: Bill Ford’s Global Policy Decision International Perspective: Procedures and Rules Imposed by the Outside International Perspective: Planning Hurdles for the $2. But it Worked at Nissan Entrepreneurial Perspective: Interview with Bryant Tong. Chairman of the Wine Group International Perspective: Where Did All the Saturns Go? International Perspective: Zipcar International Perspective: Corporate Strategy at the Tata Group Entrepreneurial Perspective: Buying Skype. Venture Capitalist Partner with JAFCO Ventures. Airbus Entrepreneurial Perspective: Interview with Jeb Miller. Clara Tao. on Evaluating Managers of Venture-backed Portfolio Firms International Perspective: How About a Twitter Performance Evaluation? International Perspective: Pay for Performance at Lincoln Electric International Perspective: What is Your Career Path? International Perspective: Career Planning in the New Economy 277 279 283 287 288 Chapter 13 International Perspective: International Perspective: International Perspective: International Perspective: India’s Leadership Needs Managing Human Resources at PriceWaterhouseCoopers in China How to Get into the Business School of Your Choice Thinking about the Future at Singularity University 294 296 299 300 . Tragon. Director of Consumer Insights. on Aligning Organizational Structure with Market Intelligence 200 201 Chapter 9 International Perspective: Empowerment at the Ritz-Carlton Hotel International Perspective: Line or Staff ? What Is Your Career Goal? Entrepreneurial Perspective: Managing Entrepreneurial Managers 208 209 210 Chapter 10 Entrepreneurial Perspective: How to Create a Value-based Organization Culture International Perspective: Corporate Structure and Culture at Acer in Taiwan and around the World Entrepreneurial Perspective: Metaphors may Reveal Implicit Organizational Culture for Entrepreneurs and Investors 227 228 230 Chapter 11 International Perspective: Looking for a Company to Work For? Try Infosys Entrepreneurial Perspective: Why Leave a “Dream Job” at Microsoft? International Perspective: Wipro’s Development Center in Atlanta International Perspective: Managing Human Resources at Wal-Mart Perspective: What Do You Do after you Retired to Get Fired? International Perspective: Where Do Chinese Companies Recruit? Entrepreneurial Perspective: How to Staff an Entrepreneurial Firm? International Perspective: HRM in India and Other Countries International Perspective: Creating an Environment that People Enjoy International Perspective: The Future of Work 248 249 252 253 255 260 261 265 265 267 Chapter 12 Entrepreneurial Perspective: Interview with Shomit Ghose. Venture Capitalist Partner with Onset Ventures.List of Perspectives xxiii Entrepreneurial Perspective: Structuring a Start-up Company Entrepreneurial Perspective: Interview with Dr. Tata—Leadership at the TATA Group Entrepreneurial Perspective: The Body Shop International International Perspective: Leadership at Italian ITALTEL Entrepreneurial Perspective: Interview with Tom Lounibos. Cisco Systems. Senior Manager of Corporate Quality Solutions. Reginald Chatman. CEO of Soasta on Leadership Entrepreneurial Perspective: Leadership at the Chinese Haier Group and Volkswagen 351 352 352 354 355 356 358 360 365 367 Chapter 16 International Perspective: Corporate Governance Entrepreneurial Perspective: Advisory Boards for New Ventures International Perspective: What People Say about Committees International Perspective: Pressure toward Conformity: How Would You Respond? Entrepreneurial Perspective: Interview with Mr. Costco’s CEO – A Leader with Heart or Smart? International Perspective: Leadership on the New York Hudson River International Perspective: Leadership at Southwest Airlines International Perspective: Canon’s Fumio Mitarai: Not the Typical Japanese CEO International Perspective: Meet Wipro’s Azim Premji.xxiv List of Perspectives International Perspective: Cisco’s Talent Development in India and Elsewhere International Perspective: Making Management Education Relevant Entrepreneurial Perspective: How Do Entrepreneurial Managers Initiate Change In Their Firms? International Perspective: Successful Teamwork International Perspective: Wal-Mart’s Global Learning 302 302 305 307 308 Chapter 14 International Perspective: Disillusioned Middle Managers International Perspective: Self-motivation Entrepreneurial Perspective: How to Manage Entrepreneurial Managers International Perspective:The Other Side of the Coin International Perspective: Executive Pay for Performance International Perspective: QWL in Action 327 328 331 339 340 341 Chapter 15 Perspective: Jim Sinegal. on Managing Work Teams 377 378 380 382 385 Chapter 17 International Perspective: Cross-Cultural Barriers Entrepreneurial Perspective: Accepting Negative Feedback International Perspective: Management by Walking Around International Perspective: Lack of Upward Communication Can Be Disastrous International Perspective: Can a Person Fearful of Public Speaking Become the Head of the Largest Publicly-Owned Corporation? International Perspective: Country Differences in Explicit and Implicit Communication 394 395 396 397 399 401 . India’s Leading High-Tech Architect International Perspective: Ratan N. List of Perspectives xxv 402 404 407 International Perspective: The Multi-Lingual CEO Entrepreneurial Perspective: Interview with Lori Teranishi. Co-Principal. Gordon Biersch Brewing Company. LLP. CEO of Soasta on Controlling 425 428 430 434 435 Chapter 19 Entrepreneurial Perspective: In New Ventures Cash is King International Perspective: Planning and Control in Engineering International Perspective: Will China Assume the Role of India in IT Outsourcing? International Perspective: UPS—From Time Management to Information Technology (IT) International Perspective: Netbooks: The Product for Difficult Economic Times? International Perspective: Cisco’s Approach to “Convergence” International Perspective: Apple’s iPhone a Truly Global Product International Perspective: WiMax a Break-Through Technology? International Perspective: Mobile Phone Services 447 450 454 457 458 460 461 463 465 Chapter 20 International Perspective: GE’s Transformation from Products to Services Entrepreneurial Perspective: Google Brings Quality Measures to the Advertising Industry International Perspective: Volkswagen’s High Operating Costs—Should VW Refocus Its Strategy? International Perspective: How an Information System Facilitates Operations International Perspective: GE’s Contribution to India’s Outsourcing Boom International Perspective: Quality Circles in Japan International Perspective: Managing Quality for Success International Perspective: Merging the Production Systems of Daimler and Chrysler—A Mission Possible? International Perspective: The Future of the Global Car Industry International Perspective: The Interconnected Global Supply Chain Management 475 476 480 480 484 485 486 488 489 491 . on Developing an Effective Enterprise Communication Strategy International Perspective: Learning from Newscasters Chapter 18 International Perspective: Special Considerations in Controlling International Companies International Perspective: Examples of Feedback Systems Entrepreneurial Perspective: Interview with Dan Gordon. VPG. on Controlling for Product Quality International Perspective: Planning and Controlling at Grupo Modelo Entrepreneurial Perspective: Interview with Tom Lounibos. Co-Founder. and obsolete practices show up best when desirable and actual organization structures are compared. their contributions. there is no one best way. effectiveness. “Lack of design [in organization] is illogical. as used in this book. cruel. It requires a network of decision and communication centers for coordinating efforts toward group and enterprise goals. excessive red tape. and efficiency 6. Unless it knows what managerial personnel will be needed and what experience should be demanded. planning will reduce compromising the necessity for principal whenever changes occur in personnel. and sketching out consequent authority relationships. Duplication of effort. What works will always depend on the specific situation. and principles must be put into practice. but the background of each enterprise’s operation and needs must be considered in applying these principles. As with the other functions of managing.Visual 1 Management: Science. Organization structure needs to be tailor-made. explain the concepts of productivity. Thus.. Organizing involves developing an intentional structure of roles for effective performance. and by comparing the present structure with it. describe the various approaches to management. enterprise leaders know what changes should be made when possible. As Lyndall Urwick said in his classic book The Elements of Administration. an organization structure must be understood. Planning the organization structure helps determine future personnel needs and required training programs. show how the management process. Nevertheless. an enterprise cannot intelligently recruit people and train them. attitudes. The search entails charting the main lines of organization. The ultimate form established. understand how this book is organized Learning Objectives Each chapter begins with learning objectives which outline what each chapter aims at achieving and what the reader should know on its completion. unclear lines of authority. Furthermore. understand that management. establishment of objectives and orderly planning are necessary for good organization. whether authority should be centralized as much as possible or whether enterprise operations should be divided into semi-independent product or territorial divisions). leading. an ideal organization plan constitutes a standard. the only choice is to modify the structure to fit individual capabilities. in organizing. Principles of organizing have general application. it depends on the specific situation. identify the trends in information technology and globalization 5. in this case one is first organizing around the goals to be met and activities to be undertaken and only then making modifications for the human factor. as well as their limitations 8. define the managerial functions of planning. and continual remolding of the ideal plan is normally necessary. To work. and controlling 11. recognize that the aim of all managers is to create a surplus 4. Advantages of Organization Planning Planning the organization structure helps determine future personnel needs and required training programs. As emphasized earlier. there is no one best way. like all other plans. Theory. Also included in the margins are websites for readers to refer to for further information related to the organization or the topic under discussion. wasteful. as elsewhere in managing. applies to all kinds of organizations and to managers at all organizational levels 3. staffing. . An organizer must always be careful not to be blinded by popular notions in organizing because what may work in one enterprise may not work in another. realize that managing requires a systems approach and that practice must always take into account situations and contingencies 10. organizing. seldom remains unchanged. Although this modification may seem like organizing around people. organization planning can disclose weaknesses. describe the evolution of management and some recent contributions to management thought 7. you should be able to: 1. approach to management theory and science has a basic core of its own and draws from other approaches 9. AVOIDING MISTAKES IN ORGANIZING BY PLANNING Establishment of objectives and orderly planning are necessary for good organization. Planning for the Ideal The search for an ideal organization to reflect enterprise goals under given circumstances is the impetus to planning. considering the organizational philosophy of the enterprise managers (e. overlong lines of communication. explain the nature and purpose of management 2. and inefficient. and Practice LEARNING OBJECTIVES After studying this chapter. Modification for the Human Factor If the available personnel do not fit into the ideal structure and cannot or should not be pushed aside.g. or limitations. or operational process. They also aid in reviewing key concepts.”1 Margin Notes These notes in the text margins give an overview of the key points in the chapter. 220 Part 3 Organizing In organizing. Google began providing online payment and telephone service that compete with eBay’s Skype and PayPal. Instead. Brazil. Do Do Do we have something to offer that competitors do not? we wish to take legal steps to discourage competition? we need. Television. skills. Video Instruction. videotapes on a variety of subjects are available for instruction and learning in the university or company classroom.6 IBM is well known for its classroom training of its personnel. recommendation Outputs Completed bicycles Students with enhanced knowledge. the future of the application of artificial intelligence to assume certain functions of the brain. experiential exercises. eBay’s CEO. In this innovative program. college credits can be obtained. The objective of the program is to teach managers how the real world works. Therefore. This means living in circumstances different from their home country – not luxury hotels with CNN connections. But the real world is different from the classroom. and theories presented in each chapter. premises. while the tables give details pertaining to these concepts. principles. Located at the NASA Ames Research Center in California. In this discussion. After an end product has been selected. The design of an operations system requires decisions concerning the location of facilities. eBay’s Mistake?25 The acquisition of Skype at a very high price.. supporting services? What are the best pricing strategy and policy for our operation? How can we best serve our customers? Entrepreneurial Perspective: Buying Skype. The integration with eBay’s main business was not done well. and the quality of the product. International Perspective: Thinking about the Future at Singularity University7 Boxed Items Boxes containing International and Entrepreneurial Perspectives illustrate the concepts. selection of an alternative. and attitudes Client problem Tables and Figures The figures illustrate the concepts discussed in the chapter. Singularity University is not a traditional university. businesses to help them upgrade their technologies and improving the water quality. and Online Education8 Another approach to development is planned reading of relevant and current management literature. the aim is to attract executives who deal with disruptive technologies in the rapidly-changing environment dealing with such topics as robotics. and can we supply. evaluation of alternatives. This one-month program will not make the participants instant global experts. South Africa and others to learn about the culture and to become a kind of global citizen. term papers Consulting: data collection and analysis. Perhaps even more important was Google’s entry into the market enabling people to find buyers for their goods. cases. the production of physical products is emphasized. IBMers spend a month in countries such as India. factory machines. may have been a mistake by the otherwise very successful Margaret Whitman.Walkthrough 478 Part 6 Controlling Table 20. management and other topics are featured in television instruction programs. but they learn that the earth is flatter in which people from different cultures work together to achieve common goals. Malaysia. . the quantity to be produced. and strategies of an enterprise (discussed in Part 2) determine the search for and the selection of a product or service as its output. for example.1 Maslow’s hierarchy of needs Still another example of in-house development is the IBM’s Peace Corps -Type Training. A manager may be aided by the training department. but the concepts can also be applied to the provision of services. people.1 Examples of operations systems Inputs Transformation Assembling bicycles Lectures. skills. Moreover. This learning experience can be enhanced through discussion of articles and books with other managers and the superior. Increasingly. For certain programs. Planning Operations The objectives. Readings. materials Students with limited knowledge. universities. Skype’s internet venture was a new phenomenon in 2005. Applicants from some 60 countries explore. the process to be used. This is essentially self-development. which often develops a reading list of valuable literature. the HR department initiated a program that is modeled after the US Peace Corps program. and attitudes Consultant’s report recommending course of action Plant. but guest houses eating local food. the specifications are determined and the technological feasibility of producing it is considered. Figure 14. The participants work in small groups to explore new ideas. Moreover. Program participants work in teams with local governments. By 2007/2008 Skype was not the success envisioned. it learned from them. (The largest is Exxon Mobil). Retailers such as Kmart and Sears focused on big towns. which emphasize maintaining good relationships with staff as well as suppliers.x?cookieSet=1. see www.management-issues. Yet its headquarters are located in a small town in Bentonville. accessed February 3. which will help the readers in upgrading their knowledge. 3.Visual Summary Leading is the process of influencing people so that they will contribute to organizational and group goals. Wal-Mart had become the second largest company in the world in terms of sales. While working toward goals. . an effective human resource policy. Exercises/Action Steps 1. What are Theory X and Theory Y assumptions? State your reasons for agreeing or disagreeing with these assumptions. Douglas McGregor. desires. See also http://www. DC: National Conference of Catholic Bishops.com/2006/8/24/research/organisations-get thumbs-downfrom-disillusioned-managers. International Case Each chapter ends with a case with questions. What are some misunderstandings of these theories? Chapter-end Features Summary: Each chapter concludes with a summary which gives a gist of the chapter. This is also one of the important messages in the Second Draft—Pastoral Letter on Catholic Social Teaching and the U. For reviews of his works. 2. Exercises/Action Steps: These exercises will encourage readers to relate the ideas and concepts given in the chapter to the real world.” which has become the familiar company slogan. and a clever use of information technology to manage its inventory. References: A comprehensive list of material for further reading is provided at the end of each chapter. 2006. and contribute to. it is based on careful planning of a unique strategy. People assume different roles. International Case Wal-Mart in America and around the Globe13 By 2001. a manager must take into account the dignity of the whole person. This will help readers recapitulate what all has been dealt with in the different topics covered. Key Ideas and Concepts for Review Leading Human factors in managing Individual dignity Motivation References 1.1365-2934.blackwell-synergy. Success did not come by accident. October 7. What is motivation? How does effective managing take advantage of. When the company made mistakes. It is also the biggest private employer in the world.html. The small-town orientation in its business approach contributed to its value-based success story. motivation? 2.uwo. and other forces. and Economic Justice for All: Catholic Social Teaching and the U. 1960). rather. needs. Arkansas. Motivation is not a simple concept. an inspiring leadership style initiated by founder Sam Walton. 1985.1111/j. it pertains to various drives. 2007. The instructor may take a survey in the class and ask students to respond to two questions: (1) “Can you describe in detail when you felt exceptionally good about your job?” and (2) “Can you describe in detail when you felt exceptionally bad about your job?” Students should write their answers on a h f Th h d d l h ld b d h h h d db d k Internet Research 1. Economy. The Background It all began in 1962 in a small town in Arkansas when Sam Walton noted the need for serving customers in small towns. Surf the Internet for the term “motivation.S. 1996).ca/business/dougmcgregor. 2007 and http://www. This will be helpful for the reader to have a quick review of the main points of the chapter. Key Ideas and Concepts for Review: A list of important terms and concepts has been given at the end of each chapter. a simple organization structure. Managers motivate by providing an environment that induces organization members to contribute.” You will get many “hits. This small-town orientation is reflected in the company’s values. Internet Research: This part lists out addresses of some websites which will be useful to readers for further knowledge – both broader and in-depth. Moreover. For Discussion 1. For Discussion: These questions will encourage readers to think about and discuss the topics taught in the chapter.2005. and its questions help in initiating discussion on the topic. This case exemplifies the concepts discussed in this chapter. The focus on cost savings enables the company to offer “everyday low prices.00612. accessed October 2.” Select one for class discussion. rather. One concern is whether the strategy of invading rural areas will also work in the urban areas of America and in the global environment. com/doi/pdf/10. wishes.S. accessed February 3.lib. the company has one of the most sophisticated logistic systems controlled by computers. and there is no average person. Sam Walton’s values and his philosophy of simplicity and frugality live on after his death. The Human Side of Enterprise (New York: McGraw-Hill.asp. Economy (Washington. This created an opportunity for Wal-Mart to fill people’s needs in rural areas. if many firms close down in the transformation process. However. could result in political unrest. 377. Subject Index Achievement needs. To implement the ambitious plan. the key abstractions need to be applied with due consideration for the situation-and this is an art. Recentralization Authority-level principle. 311 Biological needs. leading. China has to reduce the tariffs on many goods to operate in the WTO. experience and observation of managing indicate certain fundamental managerial principles or guides. and several lower-end products. 338. 464 Balance. 308. 362 Index A two-level comprehensive name index and subject index will aid the readers in locating the entries in the text accurately and easily. Marisa.”2 The plan was to form large corporations operating in industries such as high-tech electronics. thus constraining more productive. and products “Car Share”. 50 Bellisario. flexible. a current entrepreneurial discussion. Craig R. Provisions have to be made for helping them meet housing and medical expenses as well as for pensions. 118. The revolutionary economic development. Chester. 138 selection from. 356 B2B transactions. 464 B2C transactions. Leading. 12. 121. 141 Appraisal: approaches to. 9. 269 BASF. 337. 366 Action plans. 338. 63–64 Alternatives: determination of. 407 Academy of Management. privately owned firms. To be sure. 139 . 138. or guides. Gary. Mr. and New York. 508 Behavior modification (motivation approach). management education aims to make managers and students of management more effective in their performance. Stafng. Shanghai and Hong Kong can become financial centers rivaling those in London. in turn. They not only provide managers with a conceptual scheme but also indicate to scholars areas for research. for the managerial functions of planning. Thus.Walkthrough 84 Part 1 The Basis of Global Management Theory and Practice Part Closing The entrepreneurial and international perspectives of managing are emphasized upon in each of the part’s closing section. interrelated principles has not been discovered and codified. Although the issue of ownership was only vaguely mentioned. We will illustrate the international environment by the rising economic power of China (referring to the People’s Republic of China in this book). His plan was to convert most of the 305. 314 Belardo. 1997. 330. but they used most of the available capital. It was only in 1992 that the goal of the market economy (although a socialistic one) was declared. 139 identification of. 60. then. The Management Excellence Survey can be used for managerial and organizational development. 182 ABC. spearheaded first by the late Deng Xiaoping (who. however. staffing. It has been a breathtaking transformation since the country opened its doors. Appendix B identifies specific areas critical for the success of managers and organizations. 111. 105. 150. 397 Barnard. was accompanied by rising expectations. Appendix A summarizes the principles. those adversely affected must be taken care of. China attracts significant amounts of foreign investment. With this growth rate and a population of about one-fifth of the world total. 88. 127 3M. Decentralization. workers also need to be trained for the demands created by the market economy. Still. needs. 508 Autocratic leaders. 139 evaluation of. or acceptance. Jiang had to deal with the industry dinosaurs on which 100 million workers depended for their living. 138. 300 Becker. Jiang made an even bolder statement at the July 1. Appendix A Summary of Major Principles … The Basis of Global and Entrepreneurial Management The closing part first focuses on the global environment. 274–280 criteria. The unique aspects of the entrepreneurial environment in the Silicon Valley near San Francisco in California will then be analyzed. 498 Best practices. 59. 138 planning &. In his path-setting speech to the 15th Party Congress on September 12. 127 “WeCar”.000 largest firms remained under the control of the government.000 state-owned companies to shareholding firms that would be exposed to international competition. 273 see also Centralization. (2) to improve skills in the analysis of cases and in conducting research. was not an economist) and continued by the then President Jiang Zemin. 201 “Bounded” rationality. The purpose of both appendices is to facilitate the integration of theory with practice. skills. telecommunication. 341 Alliances (of companies). International Focus China—The New Economic Giant1 During the past 25 years. 308. most of them would have to compete in the marketplace. 387 Achievement-oriented leadership. At that time. 124 Alliances (of countries). organizing. garments. and a global car industry case. and Controlling Although a complete set of empirically proven. some companies declared bankruptcy. 127 “I-GO”. These principles allow students and managers to check whether organizational problems can be traced to the violation of managerial principles. principle of. Although the 1997 speech may have laid the basis for the future direction of China. 331 Board of directors. 288 Affiliation. Besides providing a social safety net. when he suggested that the party should engage capitalists to increase its “influence and cohesiveness. In this appendix. Therefore. 175 Barrett.. and controlling. In short. Tokyo. Jiang announced some sweeping changes. 378 Body language see Nonverbal communication Boundaryless organizations. benefits that were previously granted by their employers. by the way. Appendix B Management Excellence Survey INTRODUCTION Broadly speaking. 427. Finally. and petrochemicals. and (4) to transfer knowledge. the 1. state-owned companies still produced about 40 percent of industrial output. Mr. which perhaps would be more appropriately ll d id pp i d ( hi yb k i ) di h i lf i f g Appendix Two appendices are given at the end. China is already a major exporter of appliances. 2001 party meeting. 102 development of. Name Index This index contains the names of people. Each of the closings contains an international focus discussion with a challenging topic. 9. the principles. 337 Benchmarking. and attitudes to the workplace. Salvatore. the objectives of management education are (1) to increase managerial knowledge. Organizing. 332. 53 Bank of America. organization. Part 1 Closing 505 Appendix A Summary of Major Principles or Guides for the Managerial Functions of Planning. Its continual hyper-growth of 9 to 10 percent annually was achieved without excessive inflation. the discussion will conclude with the global car industry case. China has been transformed from a Marxist system to an entrepreneurial force. the ambitious plans are accompanied by the risk of massive unemployment which. (3) to examine one’s attitudes and their impact on managing. yet Mr. . Decision Making PART 3 7. Social Responsibility. Policies. and Decentralization Effective Organizing and Organization Culture PART 4 Staffing 173 190 206 219 11. and Group Decision Making Communication PART 6 Controlling 325 350 375 391 18. Organizing 95 116 137 The Nature of Organizing. Global. 8. and Ethics 3. 9. Management and Society: The External Environment. and Quality Management Part 2 Planning 4. Strategies. and Planning Premises 6.Brief Contents About the Authors Preface List of Figures List of Tables List of Perspectives Visual Walkthrough v xi xv xix xxi xxvi PART 1 The Basis of Global Management Theory and Practice 3 37 57 1. Management: Science. 17. 10. Managing Change through Manager and Organization Development PART 5 14. Theory. Teams. Performance Appraisal and Career Strategy 13. Human Resource Management and Selection 12. Entrepreneuring. and Practice 2. Comparative. 16. Empowerment. Essentials of Planning and Managing by Objectives 5. 15. and Reengineering Organization Structure: Departmentation Line/Staff Authority. Leading 243 272 293 Human Factors and Motivation Leadership Committees. The System and Process of Controlling 423 . Operations Management. Leading. Productivity. and Total Quality Management Appendix A Summary of Major Principles or Guides for the Managerial Functions of Planning. and Controlling Appendix B Management Excellence Survey Name Index Subject Index 446 473 505 514 523 529 .19. Organizing. Control Techniques and Information Technology 20. Staffing. Management and Society: The External Environment. Social Responsibility.Contents About the Authors Preface List of Figures List of Tables List of Perspectives Visual Walkthrough v xi xv xix xxi xxvi PART 1 1. The Basis of Global Management Theory and Practice 3 Management: Science. and Ethics Operating in a Pluralistic Society 39 The Technological Environment 39 The Ecological Environment 40 The Social Responsibility of Managers 41 Ethics in Managing 45 Trust as the Basis for Change Management 50 Summary 51 Key Ideas and Concepts for Review 51 For Discussion 52 Exercises/Action Steps 52 37 . Theory. and Practice Definition of Management: Its Nature and Purpose 4 Managing: Science or Art? 11 The Evolution of Management Thought 11 History of Innovation and Fads 15 Patterns of Management Analysis: A Management Theory Jungle? 16 The Systems Approach to the Management Process 21 The Functions of Managers 25 The Systems Model of Management and the Organization of This Book 27 Summary 28 Key Ideas and Concepts for Review 28 For Discussion 29 Exercises/Action Steps 29 Internet Research 30 International Case: McDonald’s: Serving Fast Food Around the World 30 References 33 2. Strategies. Policies. and Planning Premises The Nature and Purpose of Strategies and Policies 117 The Strategic Planning Process 118 The TOWS Matrix: A Modern Tool for Analysis of the Situation 122 Blue Ocean Strategy: In Pursuit of Opportunities in an Uncontested Market 125 The Portfolio Matrix: A Tool for Allocating Resources 127 Major Kinds of Strategies and Policies 128 Hierarchy of Company Strategies 129 Porter’s Industry Analysis and Generic Competitive Strategies 129 Premising and Forecasting 130 Summary 132 Key Ideas and Concepts For Review 132 95 116 . and Quality Management International Management and Multinational Corporations 58 Country Alliances and Economic Blocs 63 International Management: Cultural and Country Differences 66 Porter’s Competitive Advantage of Nations 72 Gaining a Global Competitive Advantage through Quality Management 73 Summary 78 Key Ideas and Concepts for Review 78 For Discussion 79 Exercise/Action Steps 79 Internet Research 79 International Case: Starbucks–Quality Plus Social Conscious Sells Around the World 80 References 81 Part 1 Closing: The Basis of Global and Entrepreneurial Management 84 Part 2 Planning 4. Essentials of Planning and Managing by Objectives Types of Plans 96 Steps in Planning 100 Objectives 104 Evolving Concepts in Management by Objectives 109 Summary 111 Key Ideas and Concepts for Review 112 For Discussion 112 Exercise/Action Steps 113 Internet Research 113 International Case: Developing Verifiable Goals 113 References 114 5. Comparative. Global.xxxiv Contents Internet Research 53 International Case: Spirituality in the Workplace References 54 53 57 3. and Risk 146 Creativity and Innovation 147 Summary 151 Key Ideas and Concepts for Review 151 For Discussion 152 Exercise/Action Steps 152 Internet Research 152 International Case: Carrefour—Which Way to Go? 152 References 153 Part 2 Closing: Global and Entrepreneurial Planning 155 PART 3 Organizing 7. Decision Making The Importance and Limitations of Rational Decision Making 138 Development of Alternatives and the Limiting Factor 139 Heuristics in Decision Making 140 Evaluation of Alternatives 140 Selecting an Alternative: Three Approaches 142 Programmed and Nonprogrammed Decisions 145 Decision Making under Certainty. the Cheapest Car in the World References 134 133 137 6. and Reengineering Formal and Informal Organization 174 Organizational Division: The Department 175 Organizational Levels and the Span of Management 176 An Organizational Environment for Entrepreneuring and Intrapreneuring 179 Reengineering the Organization 182 The Structure and Process of Organizing 184 Basic Questions for Effective Organizing 184 Summary 186 Key Ideas and Concepts for Review 186 For Discussion 187 Exercises/Action Steps 187 Internet Research 187 Entrepreneurial Case: Expanding a Venture Capital Firm from Silicon Valley to Bangalore References 188 8. Organization Structure: Departmentation Departmentation by Enterprise Function 191 Departmentation by Territory or Geography 193 Departmentation by Customer Group 194 173 187 190 .Contents xxxv For Discussion 133 Exercises/Action Steps 133 Internet Research 133 International Case: Tata’s Nano. The Nature of Organizing. Entrepreneuring. Uncertainty. xxxvi Contents Departmentation by Product 194 Matrix Organization 196 Strategic Business Units 197 Organization Structures for the Global Environment 199 The Virtual Organization 200 The Boundaryless Organization 201 Choosing the Pattern of Departmentation 201 Summary 202 Key Ideas and Concepts for Review 203 For Discussion 203 Exercises/Action Steps 203 Internet Research 204 International Case: GM—General Motors. Government Motors References 205 204 9. and Decentralization 206 Authority and Power 207 Empowerment 208 Line/Staff Concepts and Functional Authority 209 Decentralization of Authority 210 Delegation of Authority 211 The Art of Delegation 211 Recentralization of Authority and Balance as the Key to Decentralization 213 Summary 214 Key Ideas and Concepts for Review 215 For Discussion 215 Exercises/Action Steps 216 Internet Research 216 Global Car Industry Case: How the Lexus Was Born—and Continued Its Success in the United States. Effective Organizing and Organization Culture Avoiding Mistakes in Organizing by Planning 220 Avoiding Organizational Inflexibility 221 Making Staff Work Effective 222 Avoiding Conflict by Clarification 223 Ensuring Understanding of Organizing 225 Promoting an Appropriate Organization Culture 226 Summary 229 Key Ideas and Concepts for Review 230 For Discussion 230 Exercise/Action Steps 230 Internet Research 233 International Case: Restructuring at Korea’s Daewoo 231 219 . but will Lexus Succeed in Japan? 216 References 218 10. Empowerment. Line/Staff Authority. Generous Motors. and Instruments 261 Orienting and Socializing New Employees 265 Managing Human Resources While Moving Toward 2020 266 Summary 267 Key Ideas and Concepts for Review 268 For Discussion 268 Exercises/Action Steps 269 Internet Research 269 International Case: Recruiting Talents at Infosys 269 References 270 12.Contents xxxvii References 233 Part 3 Closing: Global and Entrepreneurial Organizing PART 4 234 Staffing 243 11. Performance Appraisal and Career Strategy Choosing Appraisal Criteria 273 Appraising Managers against Verifiable Objectives 274 Appraising Managers as Managers: A Suggested Program 279 A Team Evaluation Approach 281 Application of Performance Review Software 281 Rewards and Stress of Managing 282 Formulating the Career Strategy 284 Summary 289 Key Ideas and Concepts For Review 290 For Discussion 290 Exercises/Action Steps 290 Internet Research 290 International Case: Woman CEO Manages by the Textbook 291 References 291 13. Techniques. Managing Change through Manager and Organization Development Manager Development Process and Training 294 Approaches to Manager Development: On-the-Job Training 297 Approaches to Manager Development: Internal and External Training 299 272 293 . Human Resource Management and Selection Definition of Staffing 244 The Systems Approach to Human Resource Management: An Overview of the Staffing Function 244 Situational Factors Affecting Staffing 249 Selection: Matching the Person with the Job 254 The Systems Approach to Selection: An Overview 254 Position Requirements and Job Design 256 Skills and Personal Characteristics Needed in Managers 258 Matching Qualifications with Position Requirements 259 Selection Process. Human Factors and Motivation Human Factors in Managing 326 Motivation 328 An Early Behavioral Model: McGregor’s Theory X and Theory Y 328 Maslow’s Hierarchy of Needs Theory 330 Alderfer’s ERG Theory 331 Herzberg’s Motivation–Hygiene Theory 332 The Expectancy Theory of Motivation 333 Equity Theory 335 Goal Setting Theory of Motivation 336 Skinner’s Reinforcement Theory 337 McClelland’s Needs Theory of Motivation 337 Special Motivational Techniques 338 Job Enrichment 342 A Systems and Contingency Approach to Motivation 343 Summary 344 Key Ideas and Concepts for Review 345 For Discussion 345 Exercises/Action Steps 346 Internet Research 346 International Case: Managing the Hewlett-Packard Way—Will It Continue? 346 References 347 15.xxxviii Contents Evaluation and Relevance of Training Programs 302 Managing Change 303 Organizational Conflict 305 Organization Development 306 The Learning Organization 308 Summary 309 Key Ideas and Concepts for Review 310 For Discussion 310 Exercises/Action Steps 310 Internet Research 311 International Case: Jack Welch Leading Organizational Change at GE References 312 Part 4 Closing: Global and Entrepreneurial Staffing 314 PART 5 Leading 325 311 14. or Contingency. Approaches to Leadership 362 Transactional and Transformational Leadership 367 350 . Leadership Defining Leadership 351 Ingredients of Leadership 353 Trait Approaches to Leadership 354 Leadership Behavior and Styles 355 Situational. and CEO Fiorina 388 References 389 17. Standards. and Teams 386 Summary 386 Key Ideas and Concepts for Review 386 For Discussion 387 Exercises/Action Steps 387 Internet Research 388 International Case: To Merge or Not to Merge—That Is the Question for HP. The System and Process of Controlling The Basic Control Process 424 Critical Control Points. Teams. and Benchmarking 423 425 . Groups. Compaq. Communication The Purpose of Communication 392 The Communication Process 393 Communication in the Organization 395 Barriers and Breakdowns in Communication 400 Toward Effective Communication 404 Electronic Media in Communication 408 Summary 410 Key Ideas and Concepts for Review 410 For Discussion 411 Exercises/Action Steps 411 Internet Research 411 International Case: Could the Challenger Accident Have Been Avoided? 411 References 412 Part 5 Closing: Global and Entrepreneurial Leading 414 PART 6 Controlling 370 375 391 18. and Group Decision Making The Nature of Committees and Groups 376 Reasons for Using Committees and Groups 377 Disadvantages and Misuse of Committees 379 Successful Operation of Committees and Groups 380 Additional Group Concepts 381 Teams 384 Conflict in Committees.Contents xxxix Summary 368 Key Ideas and Concepts for Review 369 For Discussion 369 Exercises/Action Steps 369 Internet Research 370 Entrepreneurial Case: Profiles of Two Visionaries—Bill Gates and Steve Jobs References 372 16. Committees. E-Commerce. and Total Quality Management Productivity Problems and Measurement 474 Production and Operations Management: Manufacturing and Service 475 Quality Measurement in the Information Age 476 The Operations Management System 476 Tools and Techniques for Improving Productivity 481 Supply Chain and Value Chain Management 488 Integration of the Value Chain with the Managerial Functions 489 Summary 491 Key Ideas and Concepts for Review 492 For Discussion 492 473 . and M-Commerce 463 Summary 467 Key Ideas and Concepts for Review 468 For Discussion 469 Exercises/Action Steps 469 Internet Research 469 International Case: Can eBay’s Success Continue? 470 References 470 20.xl Contents Control as a Feedback System 428 Real-Time Information and Control 429 Feedforward. Operations Management. or Preventive. Control Techniques and Information Technology The Budget as a Control Device 447 Traditional Nonbudgetary Control Devices 448 Time–Event Network Analyses 448 The Balanced Scorecard 452 Information Technology 453 The Use of Computers in Handling Information 456 Opportunities and Challenges Created by Information Technology 458 The Digital Economy. Control 430 Control of Overall Performance 434 Profit and Loss Control 434 Control through Return on Investment 435 Management Audits and Accounting Firms 436 Bureaucratic and Clan Control 436 Requirements for Effective Controls 437 Summary 439 Key Ideas and Concepts for Review 439 For Discussion 440 Exercises/Action Steps 440 Internet Research 440 International Case: Wal-Mart in America and around the Globe References 443 441 446 19. Productivity. and Controlling Appendix B Name Index Subject Index Management Excellence Survey . Staffing. Organizing.Contents xli Exercises/Action Steps 493 Internet Research 493 Global Car Industry Case: Toyota’s Global Production Strategy 493 References 495 Part 6 Closing: Global Controlling and Challenges and Entrepreneurial Controlling 497 505 514 523 529 Appendix A Summary of Major Principles or Guides for the Managerial Functions of Planning. Leading.