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RICHARD L. DAFTVanderbilt University
Eigh th E d i t i o n
T D-0 Q OVQ S O BSD
SOUTH-WESTERN
T
A U S T R A L I A I B R A Z I L 1 C A N A D A I M E X I C O « S I N G A P O R E I S P A I N I U N I T E D K I N G D O M 1 U N I T E D S T A T E S
CONTENTS
ou
Manager's ShoptalkDo You Really Want to Be aManager? 18
New Manager Self-TestManager Role andReality 20
Unlocking InnovativeSolutions ThroughTechnology Click Here forLower Taxes 24
Unlocking InnovativeSolutions ThroughTechnology Of Railroadsand Web Sites 40
New Manager Self-TestEvolution of Style 48
Manager's ShoptalkEbbs and Flows ofManagement Innovations,1950-2000 51
8 f j j INTRODUCTION TO MANAGEMENT 2
Innovative Management for Turbulent Times 4
Manager's Challenge 5The Definition of Management 7
The Four Management Functions 8Planning 8 o Organizing 8 o Leading 9 n Controlling 9
Organizational Performance 10Management Skills II
Conceptual Skills 11 n Human Skills 11 n Technical Skills 12
D When Skills Fail 12
Management Types 13Vertical Differences 14 n Horizontal Differences 15
What Is It Like to Be a Manager? 16
Making the Leap: Becoming a New Manager 16 n Manager Activities 17
D Manager Roles 20
Managing in Small Businesses and Nonprofit Organizations 23Management and the New Workplace 25
Forces on Organizations 26 D The Innovative Response 26
D New Management Competencies 27 n Turbulent Times: Managing Crises
and Unexpected Events 28
Manager's Solution 29Discussion Questions 30Management in Practice: Experiential Exercise 31Management in Practice: Ethical Dilemma 32Case for Critical Analysis 32End notes 33
The Evolution of Management Thinking 36
Manager's Challenge 37Management and Organization 38Classical Perspective 40
Scientific Management 41 n Bureaucratic Organizations 42 '
D Administrative Principles 44
Humanistic Perspective 46Human Relations Movement 46 n Human Resources Perspective 47
D Behavioral Sciences Approach 50
Management Science Perspective 50Recent Historical Trends 52
Systems Theory 52 o Contingency View 53 n Total Quality Management 54
Innovative Management Thinking for Turbulent Times 54The Learning Organization 55 o Managing the Technology-Driven Workplace 56
Manager's Solution 59Discussion Questions 60Management in Practice: Experiential Exercise 61Management in Practice: Ethical Dilemma 61Case for Critical Analysis 62Endnotes 62
CONTINUING CASE 66
THE ENVIRONMENT OF MANAGEMENT 68
78
82
92
Cultural Leadership 94
The Environment and Corporate Culture 70
Manager's Challenge 71The External Environment 72
General Environment 73 o Task EnvironmentThe Organization-Environment Relationship 81
Environmental Uncertainty 81 n Adapting to the EnvironmentThe Internal Environment: Corporate Culture 85
Symbols 87 n Stories 87 D Heroes 87 o Slogans 88 n CeremoniesEnvironment and Culture 89
Adaptive Cultures 89 o Types of Cultures 90, Shaping Corporate Culture for Innovative Response
Managing the High-Performance Culture 93Manager's Solution 96Discussion Questions 97Management in Practice: Experiential Exercise 98Management in Practice: Ethical Dilemma 99Case for Critical Analysis 99Endnotes 100
Managing in a Global Environment 104
Manager's Challenge 105A Borderless World 106
Getting Started Internationally 108Outsourcing 109 D Exporting 109 n Licensing 110 n Direct Investing 111
o China Inc. 112
The International Business Environment 113The Economic Environment 114
Economic Development 115 n Infrastructure 115
Markets 115 a Exchange Rates 116The Legal-Political Environment 116
Political Risk and Instability 116 D Laws and RegulationsThe Sociocultural Environment 117
SocialValues 117 n Other Cultural Characteristics 121International Trade Alliances 122
GATT and the World Trade Organization 122 n European Uniono North American Free Trade Agreement (NAFTA) 124D Other Trade Alliances 125 n The Globalization Backlash 126
Multinational Corporations 126Managing in a Global Environment 127
Developing Cultural Intelligence 127 o Managing Cross-Culturally 129
Resource and Product
117
123
Manager's ShoptalkThe Ties That Bind 75
New Manager Self-TestManager Mind and theEnvironment 83
Unlocking InnovativeSolutions Through PeopleIt's Power (and Respon-sibility) to the People 95
Oo
Unlocking InnovativeSolutions ThroughTechnology Nighthawksto the Rescue 110
Manager's Shoptalk HowWellC lYou Play theCultui t Game? 120
New Manager Self-TestCultural Intelligence 128
Manager's ShoptalkChallenging the Boss onEthical Issues 145
New Manager Self-TestManager Courage 148
Unlocking InnovativeSolutions Through PeopleSouth Mountain Prac-tices CommunityEntrepreneurism 163
New Manager Self-TestImprovisation 176
Unlocking InnovativeSolutions Through PeopleWhite Dog Enterprises:Doing Well by DoingGood 186
Manager's ShoptalkHelpful Hints for Writingthe Business Plan 188
Manager's Solution 130Discussion Questions 131
Management in Practice: Experiential Exercise 132Management in Practice: Ethical Dilemma 133Case for Critical Analysis 133Endnotes 134
Ethics and Social Responsibility 138Manager's Challenge 139What Is Managerial Ethics? 140Criteria for Ethical Decision Making 142
Utilitarian Approach 142 • Individualism Approach 143
• Moral-Rights Approach 143 • Justice Approach 144Factors Affecting Ethical Choices 144
The Manager 145 i The Organization 149What Is Social Responsibility? 150Organizational Stakeholders 151
The Ethic of Sustainability and the Natural Environment 153Evaluating Corporate Social Responsibility 155
Economic Responsibilities 155 a Legal Responsibilities 156
• Ethical Responsibilities 156 • Discretionary Responsibilities 157Managing Company Ethics and Social Responsibility 157
Ethical Individuals 157 • Ethical Leadership 158
• Organizational Structures and Systems 159Ethical Challenges in Turbulent Times 162
The Business Case for Ethics and Social Responsibility 162
• Economic Performance 164Manager's Solution 165Discussion Questions 166Management in Practice: Experiential Exercise Ethical Work Climates 166Management in Practice: Ethical Dilemma 167Case for Critical Analysis 167Endnotes 168
6 Managing Small Business Start-Ups 172Manager's Challenge 173What Is Entrepreneurship? 174Entrepreneurship and the Environment 175
Entrepreneurship Today 176 • Definition of Small Business 179
• Impact of Entrepreneurial Companies 179Who Are Entrepreneurs? 181
Diversity of Entrepreneurs 182 • Personality Traits 183Social Entrepreneurship: An Innovative Approach to Small Business 185Launching an Entrepreneurial Start-Up 186
Starting with the Idea 187 • Writing the Business Plan 187
• Choosing a Legal Structure 189 • Getting Financing 190• Tactics for Becoming a Business Owner 191
Managing a Growing Business 194Stages of Growth 194 • Planning 195 • Organizing 196 • Leading 196i Controlling 197
Manager's Solution 197Discussion Questions 198Management in Practice: Experiential Exercise 199Management in Practice: Ethical Dilemma 199Case for Critical Analysis 200Endnotes 201
CONTINUING CASE 204
PLANNING 206
Managerial Planning and Goal Setting 208
Manager's Challenge 209Overview of Goals and Plans 210Purposes of Goals and Plans 211Goals in Organizations 213
Organizational Mission 213 •Criteria for Effective Goals 217Planning Types 219
Management by Objectives 219
• Contingency Plans 222Planning in a Turbulent Environment 223
' Building Scenarios 224 • Crisis Planning 224Planning for High Performance 226
Traditional Approaches to Planning 227
to Planning 227Manager's Solution 230Discussion Questions 231Management in Practice: Experiential Exercise 232Management in Practice: Ethical Dilemma 232Case for Critical Analysis 233Endnotes 234
Goals and Plans 214 • Alignment of Goals 216
Single-Use and Standing Plans 221
High-Performance Approaches
New Manager Self-TestDoes Goal-Setting Fit YourManagement Style? 211
Manager's ShoptalkRegulating E-mail in theWorkplace 223
Unlocking InnovativeSolutions ThroughTechnology Fighting Firesat Symantec 229
no
239
Levels of Strategy 244
Strategy Formulation and Implementation 236
Manager's Challenge 237Thinking Strategically 238
What Is Strategic Management? 239 I Grand Strategy
I Global Strategy 240 I Purpose of Strategy 242 •The Strategic Management Process 246
Strategy Formulation Versus Implementation 247 • Situation AnalysisFormulating Corporate-Level Strategy 249
Portfolio Strategy 249 • The BCG Matrix 249Formulating Business-Level Strategy 251
Porter's Competitive Forces and Strategies 251Formulating Functional-Level Strategy 257Strategy Implementation and Control 258
Leadership 259 • Structural Design 261 I
Systems 261 I Human Resources 262Implementation During Turbulent Times 262
Global Mind-Set 262 • Corporate Culture 262 i Information Technology 263Manager's Solution 263Discussion Questions 264
247
Partnership Strategies 255
Information and Control
Unlocking InnovativeSolutions Through PeopleFour Seasons Hotels:Managing by the GoldenRule 254
New Manager Self-TestWhat Is Your StrategyStrength? 259
Manager's Shoptalk Tipsfor Effective StrategyImplementation 260
Management in Practice: Experiential Exercise 265Management in Practice: Ethical Dilemma 265Case for Critical Analysis 266Endnotes 267
Unlocking InnovativeSolutions ThroughTechnology SouthwestUses Technology to Keep aHawk's Eye on Costs 277
Manager's ShoptalkDecision Biases toAvoid 284
New Manager Self-TestYour Decision-MakingBehavior 287
Managerial Decision Making 270Manager's Challenge 271Types of Decisions and Problems 272
Programmed and Nonprogrammed Decisions 272 • Certainty, Risk, Uncertainty,
and Ambiguity 273
Decision-Making Models 275
Classical Model 275 • Administrative Model 277 I Political Model 279
Decision-Making Steps 281
Recognition of Decision Requirement 282 I Diagnosis and Analysis of Causes 282
i Development of Alternatives 283 • Selection of Desired Alternative 283
Implementation of Chosen Alternative 285 I Evaluation and Feedback 285
Personal Decision Framework 286
Increasing Participation in Decision Making 288
The Vroom-Jago Model 288 • New Decision Approaches for Turbulent
Times 292
Manager's Solution 295Discussion Questions 295Management in Practice: Experiential Exercise 296Management in Practice: Ethical Dilemma 297Case for Critical Analysis 298Endnotes 299CONTINUING CASE 302
ORGANIZING 304
Manager's Shoptalk Howto Delegate 312
Unlocking InnovativeSolutions Through PeopleTeams Work at ImaginationLtd. 321
New Manager Self-TestAuthority Role Models 331
10 Designing Adaptive Organizations 306Manager's Challenge 307Organizing the Vertical Structure 308
Work Specialization 309 • Chain of Command 309 • Span of Management 311
i Centralization and Decentralization 313
Departmentalization 314
Vertical Functional Approach 316 a Divisional Approach 316 • MatrixApproach 318 • Team Approach 320 • The Virtual Network Approach 321• Advantages and Disadvantages of Each Structure 323
Organizing for Horizontal Coordination 326
The Need for Coordination 326 • Task Forces, Teams, and Project Management 327
• Reengineering 329Factors Shaping Structure 331
Structure Follows Strategy 332 I Structure Reflects the Environment 333
• Structure Fits the Technology 335
Manager's Solution 338
Discussion Questions 339
Management in Practice: Experiential Exercise 340Management in Practice: Ethical Dilemma 341Cases for Critical Analysis 341Endnotes 342
11 Managing Change and Innovation 346
Manager's Challenge 347Turbulent Times and the Changing Workplace 348Changing Things: New Products and Technologies 348
Exploration 349 • Cooperation 351 • Entrepreneurship 354
Changing People and Culture 357Training and Development 357 a Organization Development 358
Model of Planned Organizational Change 362
Forces for Change 363 • Need for Change 364
Implementing Change 365Resistance to Change 365 • Force-Field Analysis 367
• Implementation Tactics 368Manager's Solution 371Discussion Questions 372Management in Practice: Experiential Exercise 372Management in Practice: Ethical Dilemma 373Case for Critical Analysis 374Endnotes 374
New Manager Self-TestTaking Charge ofChange 356
Unlocking InnovativeSolutions Through PeopleThe Spies Who Came infrom the Cold 360
Manager's ShoptalkMaking Change Stick 366
12 Human Resource Management 378
Manager's Challenge 379Jhe Strategic Role of Human Resource Management 380
Environmental Influences on HRM 381Competitive Strategy 381 > Federal Legislation 384
The Changing Nature of Careers 385
The Changing Social Contract 385 I HR Issues in the New Workplace 386
Attracting an Effective Workforce 389Human Resource Planning 390 • Recruiting 391 • Selecting 395
Developing an Effective Workforce 399Training and Development 399 • Performance Appraisal 401
Maintaining an Effective Workforce 404Compensation 404 I Benefits 406 I Termination 406
Manager's Solution 407Discussion Questions 408
Management in Practice: Experiential Exercise 409Management in Practice: Ethical Dilemma 409Case for Critical Analysis 410Endnotes 411
Unlocking InnovativeSolutions ThroughTechnology TopCodertothe Rescue 394
New Manager Self-TestPeople on the Bus 396
Manager's Shoptalk TheRight Way to Interview a JobApplicant 398
Oo
13 Meeting the Challenge of Diversity 414
Manager's Challenge 415Valuing Diversity 417
Dimensions of Diversity 418 I Attitudes Toward Diversity 419
The Changing Workplace 420Challenges Minorities Face 422 a Management Challenges 422
Current Debates About Affirmative Action 424The Glass Ceiling 425
The Opt-Out Trend 426 • The Female Advantage 427
Current Responses to Diversity 428Changing the Corporate Culture 428 • Changing Structures and Policies 430• Diversity Training 432
Manager's ShoptalkA Guide for ExpatriateManagers in America 421
New Manager Self-TestSubtle Biases 429
Unlocking InnovativeSolutions Through PeopleGoogle Chow 436
Defining New Relationships in Organizations 434
434 Sexual Harassment 434
Unlocking InnovativeSolutions ThroughTechnology Can SuccessBe Guaranteed in Affairs ofthe Heart? 466
New Manager Self-TestSelf-Confidence 468
Manager's ShoptalkWhat's Your CrisisEQ? 469
New Manager Self-TestInterpersonal Patterns 493
Unlocking InnovativeSolutions Through PeopleThe De La Salle SpartansWin with Soul 497
Manager's Shoptalk AreYou a CharismaticLeader? 507
• Communication Differences 437
438
Employee Network Groups 439
Emotional IntimacyGlobal Diversity 435
Selection and Training 436Diversity in a Turbulent World
Multicultural Teams 438 iManager's Solution 440Discussion Questions 441Management in Practice: Experiential Exercise 441Management in Practice: Ethical Dilemma 442Case for Critical Analysis 443Endnotes 444CONTINUING CASE 448
LEADING 450
14 Dynamics of Behavior in Organizations 452
Manager's Challenge 453Organizational Behavior 454Attitudes 454
Components of Attitudes 455 I High-Performance Work Attitudes 457
• Conflicts Among Attitudes 459
Perception 460Perceptual Selectivity 460 • Perceptual Distortions 461 • Attributions 462
Personality and Behavior 463Personality Traits 464 I Emotional Intelligence 465 I Attitudes and Behaviors
Influenced by Personality 467 I Person-Job Fit 472
Learning 473The Learning Process 473 • Learning Styles 474 a Continuous Learning 475
Stress and Stress Management 476Type A and Type B Behavior 476 • Causes of Work Stress 477 • Innovative
Responses to Stress Management 478Manager's Solution 479Discussion Questions 480Management in Practice: Experiential Exercise 481Management in Practice: Ethical Dilemma 484Case for Critical Analysis 484Endnotes 485
15 Leadership 488
Manager's Challenge 489The Nature of Leadership 490Leadership for Contemporary Times 490
Level 5 Leadership 491 I Women's Ways of LeadingLeadership Versus Management 493Leadership Traits 494Behavioral Approaches 495
Ohio State Studies 495 • Michigan Studies 496 • The Leadership Grid 496
Contingency Approaches 498Hersey and Blanchard's Situational Theory 498• Matching Leader Style to the Situation 501• Substitutes for Leadership 504
492
Fiedler's Contingency TheoryPath-Goal Theory 502
500
Leading Change 505
Charismatic and Visionary Leadership 505 •
Power and Influence 508
Position Power 509 • Personal Power 509
Tactics 510Enduring Leadership Approaches 511
Servant Leadership 512 a Moral Leadership 512
Manager's Solution 513
Discussion Questions 514
Management in Practice: Experiential Exercise 514Management in Practice: Ethical Dilemma 515Case for Critical Analysis 516Endnotes 517
Transformational Leaders 507
Interpersonal Influence
16 Motivation 520
Manager's Challenge 521The Concept of Motivation 522Foundations of Motivation 524
Traditional Approach 524 • Human Relations Approach 524 I Human
Resource Approach 524 • Contemporary Approach 524
Content Perspectives on Motivation 525
Hierarchy of Needs Theory 525 I ERG Theory 526 I Two-Factor Theory 528
• Acquired Needs Theory 529
Process Perspectives on Motivation 530
EquityTheory 530 • Expectancy Theory 532 • Goal-Setting Theory 533
Reinforcement Perspective on Motivation 535
Reinforcement Tools 535 • Schedules of Reinforcement 536
Job Design for Motivation 539
Job Simplification 540 • Job Rotation 540 • Job Enlargement 541
• Job Enrichment 541 • Job Characteristics Model 541
Innovative Ideas for Motivating 543
Empowering People to Meet Higher Needs 545 • Giving Meaning to Work 546
Manager's Solution 548
Discussion Questions 549
Management in Practice: Experiential Exercise 550Management in Practice: Ethical Dilemma 551Case for Critical Analysis 551Endnotes 552
New Manager Self-TestEmployee Engagement 523
Manager's Shoptalk TheCarrot-and-Stick Contro-versy 539
Unlocking InnovativeSolutions Through PeopleNucor: Giving People aStake in the Business 544
17 Communication 556
Manager's Challenge 557
Communication and the Manager's Job 558What Is Communication? 559 • The Communication Process 559
Communicating Among People 561
Communication Channels 561 • Communicating to Persuade and Influence
Others 563 • Nonverbal Communication 564 • Listening 565
Organizational Communication 568
Formal Communication Channels 568 I Team Communication Channels 572
• Personal Communication Channels 573
Communicating During Turbulent Times 577
Open Communication 577 • Dialogue 578 I Crisis Communication 579• Feedback and Learning 579
Unlocking InnovativeSolutions Through PeopleManagers at Kwik-Fit LearnThat It Pays to Listen 566
New Manager Self-TestPersonal Networking' 574
Manager's ShoptalkLeaping over LanguageBarriers 582
Managing Organizational Communication 580Barriers to Communication 581 • Overcoming Communication Barriers
Manager's Solution 584Discussion Questions 585Management in Practice: Experiential Exercise 585Management in Practice: Ethical Dilemma 586Case for Critical Analysis 587Endnotes 588
582
Unlocking InnovativeSolutions ThroughTechnology MySQL:Creating a Twenty-First-Century GlobalTeam 601
New Manager Self-TestManaging Conflict 613
Manager's ShoptalkHow to Run a GreatMeeting 618
Manager's ShoptalkCyberslackers Beware: TheBoss Is Watching 635
Unlocking InnovativeSolutions Through PeopleControlling With Love, NotFear 645
New Manager Self-TestFreedom Versus "Regulation 647
18 Teamwork 592
Manager's Challenge 593Teams at Work 594
What Is a Team? 594 a Model of Work Team Effectiveness 595
Types of Teams 596
Formal Teams 596 i Self-Directed Teams 598
• Teams in the New Workplace 599
Team Characteristics 602Size 602 • Diversity 603 • Member Roles 603
Team Processes 605Stages of Team Development 605 I Team Cohesiveness 607
i Team Norms 609
Managing Team Conflict 611
Balancing Conflict and Cooperation 611 • Causes of Conflict 612 • Styles to
Handle Conflict 613 • Negotiation 615
Work Team Effectiveness 617Productive Output 617 • Satisfaction of Members 617 • Capacity to Adapt
and Learn 619Manager's Solution 619Discussion Questions 620Management in Practice: Experiential Exercise 620Management in Practice: Ethical Dilemma 621Case for Critical Analysis 622Endnotes 623CONTINUING CASE 626
CONTROLLING 628
630
634 Feedback Control 634
19 Managerial and Quality Control
Manager's Challenge 631The Meaning of Control 632Organizational Control Focus 633
Feedforward Control 633 a Concurrent Control
Feedback Control Model 636Steps of Feedback Control 636 a Application to Budgeting
Financial Control 640
Financial Statements 640 a Financial Analysis: Interpreting the Numbers
The Changing Philosophy of Control 643
638
641
Total Quality Management 646
TQM Techniques 646 • TQM Success Factors 650Trends in Quality and Financial Control 650
International Quality Standards 651 I New Financial Control Systems 651
Innovative Control Systems for Turbulent Times 652
Open-Book Management 652 • The Balanced Scorecard 654
a New Workplace Concerns 656Manager's Solution 657Discussion Questions 658Management in Practice: Experiential Exercise 659Management in Practice: Ethical Dilemma 659Case for Critical Analysis 660Endnotes 661
20 Information Technology and E-Business 664
Manager's Challenge 665Information Technology Has Changed Everything 666
Boundaries Dissolve; Collaboration Reigns 666
a People Do Better Work 667 a Things Are More Efficient 667
a Employees Are Engaged 668 a People Can Suffer from Information
Overload 669
The Evolving World of Information Technology 670
t A New Generation of IT 670 a Applying New IT Within Organizations 671
Types of Information Systems 671Data Versus Information 672 a Operations Information Systems 672
a Management Information Systems 673
The Internet and E-business 676E-Business Strategies 678 a E-Marketplaces 681 a Enterprise Resource
Planning Systems 682 a Customer Relationship Management 685 a Turning
Data and Information into Knowledge 686
Manager's Solution 688Discussion Questions 689Management in Practice: Experiential Exercise 689Management in Practice: Ethical Dilemma 690Case for Critical Analysis 691Endnotes 692
New Manager Self-TestBrain Hemispheric Domi-nance 669
Manager's ShoptalkPutting PerformanceDashboards to Work 675
Unlocking InnovativeSolutions Through PeopleGrant). Hunt Co. Likes thePersonal Touch 684
21 Operations and Value Chain Management 694
Manager's Challenge 695The Organization as a Value Chain 696
Manufacturing and Service Operations 697 a Operations Management and
Competitive Strategy 698 a The Integrated Enterprise 699
Designing Operations Management Systems 701Product and Service Design 701 a Procurement 703 a Facilities Layout 704a Technology Automation 707 a Facility Location 710 a CapacityPlanning 711
Inventory Management 711The Importance of Inventory 712 a Economic Order Quantity 713a Material Requirements Planning 714 a Just-in-Time Inventory 714a Logistics and Distribution Management 716
New Manager Self-TestPolitical Skills 702
Manager's Shoptalk AGerman Factory Shows Howto Be Fast and Flexible 706
Unlocking InnovativeSolutions ThroughTechnology At PrairieStonePharmacy, Smaller ls<Better 708
Lean Manufacturing and Productivity 716
Lean Manufacturing 716 a Measuring Productivity 717a Improving Productivity 718
Manager's Solution 720Discussion Questions 720Management in Practice: Experiential Exercise 721Management in Practice: Ethical Dilemma 721Case for Critical Analysis 722Endnotes 723CONTINUING CASE 726
Appendix: Video Case LibraryGlossary 778Indexes 791
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