WHAT IS MANAGEMENT



Management Functions

and Styles

Other Teaching Tools 6.3

Video Notes 6.4

Brief Chapter Outline and Learning Goals 6.5

Lecture Outline and Lecture Notes 6.7

Career and Study Skills Notes 6.27

Career Development: Basics of Career Planning Objectives 6.27

study skills: Return on My Investment 6.29

Lecture Links 6.30

lecture link 6-1 The Culture of the Real Rocket Scientists 6.30

lecture link 6-2 Why Good Employees Can Be Bad Managers 6.31

LectURE LINK 6-3 Learning Management Skills 6.31

LectURE LINK 6-4 Making Teams Work in a Changing Market 6.32

LectURE LINK 6-5 Using Control Principles at Pixar 6.33

LectURE LINK 6-6 Beware of Bad Bosses 6.34

Bonus Internet Exercises 6.37

Bonus INternet Exercise 6-1 Researching Mission Statements 6.37

Bonus INternet Exercise 6-2 Self-Assessment for Leading as a 6.38

Manager

Critical Thinking Exercises 6.39

critical thinking exercise 6-1 Management Functions 6.39

Critical thinking Exercise 6-2 Group Project: Organizing Production 6.40

critical thinking exercise 6-3 Testing Your Planning Skills 6.42

critical thinking exercise 6-4 Career SWOT Analysis 6.43

critical thinking exercise 6-5 Evaluating Alternative Courses 6.44

critical thinking exercise 6-6 Rate Your Management Skills 6.45

critical thinking exercise 6-7 Leadership Situations 6.47

Bonus Cases 6.48

Bonus case 6-1 Panera Bread: Bread Lines Are Back at Panera! 6.48

(Video Case)

Bonus case 6-2 One Smooth Stone (Video Case) 6.50

Bonus case 6-3 Structural Collapse: Responsibility and Accountability 6.52

Bonus case 6-4 The Supermarket Manager 6.54

Bonus case 6-5 Oreck: After the Storm 6.56

Other Teaching Tools

FOR A DESCRIPTION OF EACH OF THESE VALUABLE TEACHING TOOLS, PLEASE SEE THE PREFACE IN THIS MANUAL.

Student Learning Tools

Student Online Learning Center (OLC) diasbusiness

Student Study Guide

Spanish Translation Glossary (OLC)

Spanish Translation Quizzes (OLC)

Instructor Teaching Tools

Annotated Instructor’s Resource Manual

IRCD (Instructor’s Resource Manual, Test Bank, PowerPoints, EZtest)

Asset Map

Online Learning Center (OLC) diasbusiness

PageOut

PowerPoint Presentations (on IRCD and OLC)

Test Bank

Business Videos on DVD

Enhanced Cartridge option

Spanish Translation Glossary (OLC)

video NOTES

TWENTY VIDEOS ARE AVAILABLE, GEARED TO INDIVIDUAL CHAPTER TOPICS. THE TEACHING NOTES FOR THESE VIDEOS ARE ALSO INCLUDED IN THE VIDEO NOTES SECTION OF THIS INSTRUCTOR’S RESOURCE MANUAL, BEGINNING ON PAGE V.1.

Video 6: “Panera Bread: Bread Lines are Back at Panera!”

This video focuses on the various management techniques CEO Ron Shaich has used to successfully expand his company, Panera Bread. Shaich explains the significance of a strong organizational culture and discusses why he relies on his business plan, Concept Essence.

(Bonus Case 6-1, “Panera Bread: Bread Lines are Back at Panera!” on page 6.48 of this manual relates to this video.)

Alternative: “One Smooth Stone”

One Smooth Stone is an entrepreneurial start-up that hosts and manages customized meetings and events for its corporate clients. The video shows how the company’s decentralized, nimble, team-oriented structure helps it to succeed.

(Bonus Case 6-2, “One Smooth Stone” on page 6.50 of this manual relates to this video.)

BRIEF CHAPTER OUTLINE AND LEARNING GOALS

CHAPTER 6

Management Functions and Styles

I. What Is Management?

LEARNING OBJECTIVE 1

Define management.

II. Functions of Management

LEARNING OBJECTIVE 2

Explain the four functions of management.

A. Planning

Learning objective 3

Understand the use of three tools: SMART, SWOT, and PEST analysis.

1. Write a Mission Statement

2. SWOT and PEST

B. Organizing

Learning objective 4

Understand the basics of organizational structure.

1. Tasks and Skills at Different Levels of Management

C. Leading

D. Controlling

E. What Else Do Managers Do?

III. Management Styles

LEARNING OBJECTIVE 5

Describe various management styles and know when they are appropriate.

A. Autocratic Leadership

B. Participative Leadership

C. Free-Rein Leadership

D. Theory X

E. Theory Y

F. Theory Z

IV. Management Challenges

LEARNING OBJECTIVE 6

Explain the challenges for management in the new century.

V. SUMMARY

LECTURE OUTLINE AND LECTURE NOTES

CHAPTER OPENING PROFILE

ASCENTIUM CORPORATION (TEXT PAGES 174-175)

The chapter opening profile focuses on Ascentium Corporation, founded by Jim Beebe and Curt Doolittle. The corporation has successfully used effective management principles to grow to over 300 employees in just six years. The management uses goal setting, strategic planning, and open communication to motivate workers. Ascentium is structured as a corporation operating as a partnership. There are very few levels of management allowing empowerment of individual employees.

|Lecture outline lecture notes |

| I. What Is Management | |

|Learning objective 1 |PowerPoint 6-1 |

|Define management. (Text page 176) |Chapter Title |

|A. Management is needed to plan, organize, control, and lead the business. |(Refers to text page 174) |

|1. Leadership is different from management. | |

|a. Management is an appointed position. |PowerPoint 6-2 |

|b. Leadership has a broader scope. |Learning Objectives |

|2. All managers must be leaders; however, all leaders do not necessarily have to be managers. |(Refers to text page 175) |

|3. A good manager must perform all four functions of management well. | |

|B. MANAGEMENT is the process of planning, organizing, leading, and controlling people and other |PowerPoint 6-3 |

|available resources to accomplish organizational goals and objectives. |What Is Management? |

|1. Without management, organizations would be able to accomplish very little. |(Refers to text pages 176-178) |

|2. Managers must make decisions and make sure organizational tasks are accomplished. | |

| |Bonus Case 6-1 |

| |Panera Bread: Bread Lines Are Back at |

| |Panera! (Video Case) |

| |Panera Bread Company has used |

| |strategic planning and participative |

| |leadership to succeed in a very |

| |competitive market. (See complete |

| |case, discussion questions, and |

| |suggested answers on page 6.48 of this|

| |manual.) |

| | |

| II. Functions of Management |Bonus Case 6-2 |

|Learning objective 2 |One Smooth Stone (Video Case) |

|EXPLAIN THE FOUR FUNCTIONS OF MANAGEMENT. (TEXT PAGES 176-178) |One Smooth Stone is a company that |

|A. The four main functions of management are planning, organizing, leading, and controlling. |provides materials for big corporate |

|1. PLANNING is anticipating trends and determining the best strategies and tactics to achieve |meetings. It uses project teams to |

|organizational goals and objectives. |come up with original creative |

|a. Today most companies have planning teams monitor the environment. |presentations for customers. (See |

|b. Planning is called the key management function because the other functions depend on having a good|complete case, discussion questions, |

|plan. |and suggested answers on page 6.50 of |

|2. ORGANIZING is designing the structure of the organization and creating conditions and systems in |this manual.) |

|which everyone and everything work together to achieve the organization’s goals and objectives. | |

|a. Many organizations today are designed around the customer. | |

|b. Organizations must remain flexible and adaptable to respond to customers’ changing needs. |critical thinking |

|3. LEADING means creating a vision for the organization and communicating, guiding, training, |exercise 6-1 |

|coaching, and motivating others to work effectively to achieve the organization’s goals and |Management Functions |

|objectives. |This exercise asks students to |

|a. Today, most managers empower employees, giving employees as much freedom as possible to become |organize managerial activities they |

|self-directed and self-motivated. |have performed into the four |

|b. This means giving employees the authority and the responsibility to respond quickly to customers. |management functions. (See complete |

|i. Authority is the right to make a decision without consulting the manager. |exercise on page 6.39 of this manual.)|

|ii. Responsibility is the requirement to accept the consequences of one’s actions. | |

|c. This function was once known as directing; that is, telling employees exactly what to do. | |

|d. Leadership is still needed to keep employees focused on the right tasks at the right time. |critical thinking |

|4. CONTROLLING involves establishing clear standards to determine whether an organization is |exercise 6-2 |

|progressing toward its goals and objectives, rewarding people for doing a good job, and taking |Group Project: Organizing Production |

|corrective action if they are not. |This is a fun exercise to give |

|B. Planning |students first-hand experience in |

|Learning objective 3 |creating an organization—and producing|

|UNDERSTAND THE USE OF THREE TOOLS: SMART, SWOT, AND PEST ANALYSIS. (TEXT PAGES 179-182) |a product. (See complete exercise on |

|1. Planning involves setting the organizational vision, mission, goals, and objectives. |page 6.40 of this manual.) |

|a. A VISION is a forward-looking statement that provides an encompassing explanation of why the | |

|organization exists and where it is headed in the future. | |

|b. A MISSION STATEMENT is an outline of the fundamental purposes of the organization. |TEXT REFERENCE |

|2. Writing a mission statement |Real World Business Apps |

|a. A well-designed mission statement should address: |(Box in text on page 177) |

|i. customer needs; |Alice Nguyen is a sales associate in a|

|ii. company philosophy and goals; |retail store. She is in school |

|iii. the organization’s self-concept; |full-time, but her manager has asked |

|iv. long-term survival; |her if she wants to become a store |

|v. the nature of the company’s products or services; |manager at a smaller store. She is |

|vi. social responsibility; |considering the leadership style she |

|vii. care for employees. |will use. |

|b. An effective mission statement is developed with input from all the members of the organization. | |

|c. The mission statement becomes the foundation for setting specific goals. | |

|i. GOALS are the broad, long-term accomplishments an organization wishes to attain. | |

|ii. OBJECTIVES are specific, short-term statements detailing how to achieve the organizational goals.| |

|d. Using a framework called SMART objectives helps make goals and objectives more effective; goals | |

|should be: | |

|i. Specific | |

|ii. Measurable | |

|iii. Achievable | |

|iv. Realistic | |

|i. Time relevant | |

|3. SWOT and PEST | |

|a. SWOT analysis is an analysis of the organization’s strengths, weaknesses, opportunities, and | |

|threats. | |

|i. Strengths and weaknesses are internal to the firm. | |

|ii. Opportunities and threats are often external to the firm and cannot always be anticipated. | |

|b. The external environment consists of: | |

|i. The micro, or specific, environment is comprised of factors such as a firm’s customers, suppliers,| |

|and competitors. | |

|ii. The macro, or general, environments include factors that affect an organization indirectly. | |

|4. PEST analysis is an analysis of outside factors that could affect a business: Political, Economic,| |

|Social, and Technological. | |

|a. These four external areas affect the organization’s future. | |

|b. Political factors include political, legal, and regulator issues (example: increase in the federal| |

|minimum wage). | |

|c. Economic factors include interest rates, unemployment rates, availability of credit, inflation | |

|rates, and so on (example: higher unemployment rates). | |

|d. Sociocultural factors include factors such as number of births, immigration and emigration rates, | |

|and so forth. | |

|e. Technology changes (such and the impact of the Internet) can affect a business. | |

|5. Forms of planning | |

|a. STRATEGIC PLANNING is setting long-term goals for the company. | |

|i. It is the process of deter-mining the major goals of the organization and the policies and | |

|strategies needed for obtaining and using resources to achieve those goals. | |

|ii. It provides the foundation for the policies, procedures, and strategies to achieve goals. | |

|iii. The text uses the example of the Mountain City Coffeehouse and Creamery. | |

|b. TACTICAL PLANNING is the development of several objectives for each goal. | |

|i. These are the short-term goals that must be achieved to attain long-term goals. | |

|ii. Detailed, short-term statements are needed about what is to be done, who is to do it, and how it | |

|is to be done. |TEXT FIGURE 6.1 |

|c. OPERATIONAL PLANNING is scheduling, budgeting, and any other necessary plans used to meet the |Mission and Vision of ABC Supply Co. |

|tactical objectives. |(Box in text on page 178) |

|i. Operational planning focuses on specific supervisors and individual employees. | |

|ii. The operational plan is the department manager’s tool for daily operations. | |

|d. CONTINGENCY PLANNING is planning for “what if” scenarios and secondary plans in case the original | |

|ones do not work. | |

|i. An organization needs to have alternative plans ready for environmental changes. |TEXT FIGURE 6.2 |

|ii. Crisis planning, a part of contingency planning, involves reacting to sudden changes in the |Other Sample Mission Statements (Box |

|environment. |in text on page 179) |

|C. Organizing | |

|Learning objective 4 | |

|UNDERSTAND THE BASICS OF ORGANIZATIONAL STRUCTURE. (TEXT PAGES 187-190) | |

|1. Organizing includes designing the structure of the organization and allocating resources, |PowerPoint 6-4 |

|assigning tasks, and establishing procedures for achieve the organization’s goals and objectives. |Planning (Refers to text pages |

|2. After planning a course of action, managers must organize the firm to accomplish their goals. |178-180) |

|a. The ORGANIZATION CHART is a visual diagram that shows relationships among people and divided the | |

|organization’s work. | |

|b. An organization chart includes top, middle, and first-line or supervisory managers. | |

|c. It also shows the span of control, the optimal number of subordinates (employees) a manager |critical thinking |

|supervises; also called span of management. |exercise 6-3 |

|3. Levels of management |Test Your Planning Skills |

|a. TOP MANAGEMENT is the highest level of management, and consisting of the president and other key |This exercise asks students to use |

|company executives. |planning concepts to organize a |

|i. Top managers develop strategic plans. |company blood drive. (See complete |

|ii. Titles include Chief Executive Officer (ceo), Chief Operating Officer (coo), Chief Financial |exercise on page 6.42 of this manual.)|

|Officer (cfo), and Chief Knowledge Officer (cko). | |

|iii. The CEO is responsible for all top-level decisions in the firm. | |

|iv. The COO is responsible for putting the plans into effect. | |

|v. The CFO is responsible for obtaining fund, planning, budgets, collecting funds, and so on. | |

|vi. The CIO or CKO is responsible for getting the right information to other managers. |bonus internet |

|b. MIDDLE MANAGEMENT consists of general managers, division managers, and plant managers or |exercise 6-1 |

|supervisors. |Researching Mission Statements |

|i. Middle managers are responsible for tactical planning and controlling. |Adobe Systems has carefully developed |

|c. SUPERVISORY (first-line) MANAGEMENT are those who are directly responsible for supervising workers|its mission and vision statements. |

|and evaluating their daily performance. |This Internet exercise asks students |

|4. Tasks and skills at different levels of management |to explore the company’s long-term |

|a. Managers are usually are not trained to be managers—they are workers with specific skills who are |vision more closely. (See complete |

|promoted. |exercise on page 6.37 of this manual.)|

|b. The higher a person moves up in the organization the more they need to be visionaries, planners, | |

|communicators, and motivators. | |

|c. Managers must have three categories of skills: | |

|i. TECHNICAL SKILLS, the skills required to do a specific job, involving the ability to perform tasks| |

|in a specific discipline (such as selling a product) or department (such as marketing). | |

|ii. HUMAN RELATIONS SKILLS, the ability to communicate and work with others, involving communication | |

|and motivation; they enable managers to work through and with people. | |

|iii. CONCEPTUAL SKILLS, the ability to see the “big” picture, involving the ability to picture the |Lecture link 6-1 |

|organization as a whole and the relationships among its various parts. |Culture of the Real Rocket Scientists |

|d. First-line managers need less conceptual skills and more technical and human relations skills. |For 40 years the Jet Propulsion |

|e. Top managers need few technical skills and greater human relations and conceptual skills. |Laboratory has planned interplanetary |

|5. Organization structure |missions for NASA guided by a few key |

|a. An organizational structure is the way a company is organized and where all employees fit into the|rules. (See complete lecture link on |

|big picture. |page 6.30 of this manual.) |

|i. A line-and-staff structure is one where the staff personnel advise the line personnel in meeting | |

|organizational goals. | |

|ii. Line personnel are part of the chain of command that is responsible for directly achieving | |

|organizational goals. | |

|iii. A matrix organization teams people from various departments to accomplish a common goal. | |

|b. Departmentalization means to “group” related jobs or work processes into separate units. | |

|i. Functional departmentalization: | |

|(a) is the most widely used grouping for small-to-medium-size organizations | |

|(b) groups workers into departments based on similar tasks or resources used | |

|ii. Product departmentalization groups individuals and tasks around the firm’s major product lines. |TEXT FIGURE 6.3 |

|iii. Customer departmentalization groups activities around the customers. |Guidelines for Setting SMART |

|iv. Organizations can group tasks and processes by different geographic regions. |Objectives (Box in text on page 180) |

|v. A few firms separate activities by process. | |

|vi. Many firms use a hybrid structure, a combination of these. | |

|6. Staffing is recruiting, hiring, motivating, and retaining the best people available to accomplish | |

|the company’s objectives. | |

|a. Managing diversity means building systems and cultures that unite different people in a common | |

|pursuit. | |

|b. Diversity includes differences in race, gender, ethnicity, sexual orientation, abilities, and | |

|religious affiliation. |PowerPoint 6-5 |

|D. Leading |Planning (Refers to text pages |

|1. Good leadership includes: |180-184) |

|a. communicating a vision and rallying others around that vision; | |

|b. establishing company values; | |

|c. promoting corporate ethics; | |

|d. embracing change. | |

|E. Controlling |TEXT FIGURE 6.4 |

|1. The control process provides the feedback that helps managers adjust to changes. |SWOT Matrix (Box in text on page 181) |

|2. Controlling involves five steps: | |

|a. establishing clear performance standards; | |

|b. monitoring and recording actual performance; |critical thinking |

|c. comparing results against plans and standards; |exercise 6-4 |

|d. communicating results and deviations to the employees involved; |Career SWOT Analysis |

|e. taking corrective action when needed and providing positive feedback for work well done. |SWOT analysis, the key tool in the |

|F. What Else Do Managers Do? |strategic planning process, can also |

|1. The kinds of things managers do varies with the type of industry. |be applied to career planning. (See |

|2. Setting the tone of ethics: |complete exercise on page 6.43 of this|

|a. Employees tend to look up to managers for guidance and example. |manual.) |

|b. If a manager skirts rules, employees feel free to do so, also. | |

|3. Creating an environment for a good work-life balance: | |

|a. Work-life balance is the idea that an individual should have control over interactions between | |

|work and home. | |

|b. A positive work-life balance means a person feels satisfied about their personal life while also | |

|feeling satisfied by their work life. | |

|c. Managers can create work-life imbalance when they expect more than their employees can accomplish | |

|during work hours. | |

|d. Deadlines sometimes take precedence over work-life balance, but that shouldn’t happen frequently. | |

|4. Ensuring good-quality products: | |

|a. Total quality management (TQM) is a management strategy where quality is reviewed at every phase | |

|of the production process, even in service organizations. | |

|b. The manager must inspire employees to be concerned about providing excellent quality. | |

|c. TQM involves satisfying customer needs and continuous improvement through the organization. | |

|SELF Check Questions (Text page 194) | |

|What are the four functions of management? Which do you think is the most important? Why? | |

|Perform an analysis and a PEST analysis on your school bookstore. | |

|Why do you think TQM is so important in today’s businesses? | |

|Provide possible goals, objectives, and tactical plans for a company of your choice. | |

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| |TEXT FIGURE 6.5 |

| |Planning Functions (Box in text on |

| |page 182) |

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| |critical thinking |

| |exercise 6-5 |

| |Evaluating Alternative Courses |

| |Because of shrinking market share and |

| |declining profits, Monmouth Thermics, |

| |a subsidiary of a large conglomerate, |

| |needs a recovery plan. (See complete |

| |exercise on page 6.44 of this manual.)|

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| |TEXT REFERENCE |

| |Career Development: |

| |Basics of Career Planning Objectives |

| |(Box in text on page 183) |

| |An additional exercise and discussion |

| |is available on page 6.27 of this |

| |manual. |

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| |PowerPoint 6-6 |

| |Organizing (Refers to text pages |

| |184-185) |

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| |Bonus Case 6-3 |

| |Structural Collapse: |

| |Responsibility and Accountability |

| |Because of engineering errors and poor|

| |planning, the skywalks of a newly |

| |constructed hotel collapsed, killing |

| |over 100 people. What caused the |

| |disaster? (See complete case, |

| |discussion questions, and suggested |

| |answers on page 6.52 of this manual.) |

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| |TEXT FIGURE 6.6 |

| |Levels of Management (Box in text on |

| |page 185) |

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| |PowerPoint 6-7 |

| |Organizing (Refers to text pages |

| |185-190) |

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| |lecture link 6-2 |

| |Why Good Employees Can Be Bad Managers|

| |Good technical employees can make good|

| |managers, of course, but many do not. |

| |(See complete lecture link on page |

| |6.31 of this manual.) |

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| |TEXT FIGURE 6.7 |

| |Skills Needed at Various Levels of |

| |Management (Box in text on page 186) |

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| |lecture link 6-3 |

| |Learning Management Skills |

| |Another way of classifying specific |

| |management skills is presented here. |

| |(See complete lecture link on page |

| |6.31 of this manual.) |

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| |critical thinking |

| |exercise 6-6 |

| |Rate Your Management Skills |

| |This exercise expands the |

| |classification of management skills |

| |(based on ll 6-3 above) and asks |

| |students to rate themselves. (See |

| |complete exercise on page 6.45 of this|

| |manual.) |

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| |TEXT FIGURE 6.8a |

| |Line-and-Staff vs. Matrix Organization|

| |(Box in text on page 187) |

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| |TEXT FIGURE 6.8b |

| |Line-and-Staff vs. Matrix Organization|

| |(Box in text on page 188) |

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| |TEXT FIGURE 6.9 |

| |Ways to Departmentalize (Box in text |

| |on page 189) |

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| |lecture link 6-4 |

| |Making Teams Work in a Changing Market|

| |Two partners decided to abandon the |

| |traditional departmentalized structure|

| |and group their employees into account|

| |teams. (See complete lecture link on |

| |page 6.32 of this manual.) |

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| |TEXT FIGURE 6.10 |

| |Geographic Departmentalization with |

| |Matrix Style Organization (Box in text|

| |on page 190) |

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| |bonus internet |

| |exercise 6-2 |

| |Self-Assessment for Leading as a |

| |Manager |

| |An online self-assessment tool helps |

| |identify leadership strengths and |

| |weaknesses. (See complete exercise on |

| |page 6.38 of this manual.) |

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| |PowerPoint 6-8 |

| |Leading (Refers to text pages 190-191)|

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| |lecture link 6-5 |

| |Using Control Principles at Pixar |

| |Control principles can be used in any |

| |organization, any industry. Pixar |

| |Animation uses control principles to |

| |improve the company’s animated films. |

| |(See complete lecture link on page |

| |6.33 of this manual.) |

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| |PowerPoint 6-9 |

| |Controlling (Refers to text pages |

| |191-192) |

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| |TEXT FIGURE 6.11 |

| |The Control Process (Box in text on |

| |page 192) |

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| |PowerPoint 6-10 |

| |What Else Do Managers Do? (Refers to |

| |text pages 192-194) |

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| |TEXT REFERENCE |

| |Study Skills: Return on My Investment |

| |(Box in text on page 193) |

| |An additional exercise and discussion |

| |is available on page 6.29 of this |

| |manual. |

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| III. Management Styles | |

|Learning objective 5 | |

|DESCRIBE VARIOUS MANAGEMENT STYLES AND KNOW WHEN THEY ARE APPROPRIATE. (TEXT PAGES 194-199) |PowerPoint 6-11 |

|A. There are several leadership styles by which to achieve goals. |Management Styles |

|1. No one style is better than another. |(Refers to text pages 194-196) |

|2. It depends on the situation. | |

|B. AUTOCRATIC LEADERSHIP involves making managerial decisions without consulting others. |TEXT FIGURE 6.12 |

|C. PARTICIPATIVE (DEMOCRATIC) LEADERSHIP consists of managers and employees working together to make |Leadership Styles (Box in text on page|

|decisions. |194) |

|1. Research shows that employee participation usually increases job satisfaction. | |

|2. Organizations that have successfully used this style include Ascentium, IBM, FedEx, and most | |

|smaller firms. | |

|3. Employees discuss management issues and resolve those issues together in a democratic manner. |TEXT REFERENCE |

|D. Free-Rein Leadership |Thinking Critically: |

|1. FREE-REIN (laissez-faire) LEADERSHIP involves managers setting objectives and then employees being|Chess, Not Checkers |

|relatively free to do whatever it takes to accomplish those objectives. |(Box in text on page 196-197) “Average|

|2. This style can be used when employees know the job well and management-employee trust exists. |managers play checkers, while great |

|3. It is often successful when dealing with technical workers or other professionals |managers play chess.” This quote |

|4. The personal traits needed include warmth, friendliness, and understanding. |illustrates that great managers value |

|E. Theory X |the unique abilities of their |

|1. Douglas McGregor observed that managers’ attitudes generally fall into one of two different sets |employees and learn how to integrate |

|of managerial assumptions: Theory X and Theory Y. |them into a coordinated plan. |

|2 Theory X managers believe: | |

|a. The average person dislikes work and will avoid it if possible. | |

|b. Because of this dislike, workers must be forced, controlled, directed, or threatened with | |

|punishment to be motivated to put forth the effort to achieve the organization’s goals. | |

|c. The average worker prefers to be directed, wishes to avoid responsibility, has relatively little | |

|ambition, and wants security. | |

|d. Primary motivators are fear and money. |lecture link 6-6 |

|3. The consequence of such attitudes is a manager who watches people closely. |Beware of Bad Bosses |

|a. Motivation is more punishment for bad work, rather than reward for good work. |Bad bosses have always been with us. |

|b. Theory X managers give workers little responsibility, authority, or flexibility. |This lecture link explains how to |

|c. This type of motivation may work in the short term, but is unlikely to work in the long term. |handle them. (See complete lecture |

|F. Theory Y |link on page 6.34 of this manual.) |

|1. THEORY Y manager make entirely different assumptions about people: | |

|a. Most people like work; it is as natural as play or rest. | |

|b. Most people naturally work toward goals to which they are committed. | |

|c. The depth of a person’s commitment to goals depends on the perceived rewards for achieving them. | |

|d. Under certain conditions, most people not only accept, but seek responsibility. | |

|e. People are capable of using a high degree of imagination, creativity, and cleverness to solve | |

|problems. | |

|f. In industry, the average person’s intellectual potential is only partially realized. | |

|g. People are motivated by a variety of rewards; each worker is stimulated by a reward unique to that| |

|worker. | |

|2. Theory Y emphasizes a relaxed managerial atmosphere in which workers are free to set objectives | |

|and be flexible. | |

|G. Theory Z | |

|1. In the 1980s William Ouchi developed Theory Z, a management theory that focuses on trust and | |

|intimacy within the work group. | |

|2. This style combines characteristics from Japanese and American management styles. | |

|3. Managers implementing Theory Z believe in: | |

|a. long-term employment; | |

|b. collective decision making; | |

|c. individual responsibility for the outcome of decisions; | |

|d. slow evaluation and promotion; | |

|e. moderately specialized career path; | |

|f. holistic concern for employees. | |

|H. Leadership is actually a continuum with varying amounts of employee participation. | |

|1. The best leadership style to use depends on: | |

|a. the goals and values of the firm; | |

|b. who is being led; | |

|c. in what situations. |PowerPoint 6-12 |

|2. Any one manager can use a variety of leadership styles. |Management Styles |

|3. Successful leaders use the leadership style that is appropriate to the situation and the employees|(Refers to text pages 196-199) |

|involved. | |

|SELF Check Questions (Text page 199) | |

|Do you think you would work well under free-rein leadership? Why or why not? | |

|Have you had a Theory X, Y, or Z manager? Describe your experience working for that person. | |

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| |Bonus Case 6-4 |

| |The Supermarket Manager |

| |A new employee develops some creative |

| |suggestions for improving performance,|

| |but her boss reacts badly. (See |

| |complete case, discussion questions, |

| |and suggested answers on page 6.54 of |

| |this manual.) |

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| |TEXT FIGURE 6.13 |

| |A Comparison of Theories X, Y, and Z |

| |(Box in text on page 199) |

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| |critical thinking |

| |exercise 6-7 |

| |Leadership Situation |

| |Different situations call for |

| |different leadership styles. This |

| |exercise asks students to identify |

| |specific situations. (See complete |

| |exercise on page 6.47 of this manual.)|

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| IV. Management Challenges | |

|Learning objective 6 | |

|EXPLAIN THE CHALLENGES FOR MANAGEMENT IN THE NEW CENTURY. (TEXT PAGES 200-203) | |

|A. Managers face unique challenges dealing with a constantly changing workplace. | |

|B. Intense Management Scrutiny | |

|1. Both large and small companies have been involved in shady, unethical practices. |PowerPoint 6-13 |

|2. These scandals have led to new laws. |Management Challenges |

|C. Constant Change in Business |(Refers to text pages 200-203) |

|D. Global Competition | |

|1. Competition among companies has greatly increased globally. | |

|2. Outsourcing to India and other countries has fueled a debate. | |

|E. Technological Changes | |

|1. The acceleration of technological change has created a new breed of worker, more educated and more|TEXT REFERENCE |

|skilled than previously. |Ethical Challenge |

|2. These workers demand more freedom of operation and different management styles. |Focus on Ethics: What Would You Do? |

|F. Diversity in the Workplace |(Box in text on page 201) |

|1. Immigration and diverse national backgrounds in the workplace create management challenges. |This box presents two situations that |

|G. Elimination of Managerial and Other Jobs Due to Downsizing |require a thoughtful solution. What is|

|1. Downsizing (rightsizing) is elimination of many management jobs, and other types of jobs, by using|ethical? What would you do? |

|cost-cutting methods and technology, such as computers. | |

|2. Downsizing refers to shrinking of the organization by reducing the workforce. | |

|3. Rightsizing may be defined more precisely as matching resources to the need. | |

|4. Both methods reflect reduction in jobs. | |

|5. This can be emotionally draining for the managers who have to decide who gets laid off. |TEXT REFERENCE |

|H. The Need to Get Things Done by Working with New Generations of Employees with Different Attitudes |Career Spotlight: So You Think You |

|1. Managers get things done by using organizational resources. |Want to Be … |

|2. At one time, managers were called bosses, and their job was to tell people what to do. |a Manager (Box in text on page 203) |

|3. Today managers must guide, train, support, motivate, and coach employees rather than telling them | |

|what to do. | |

|4. Most modern managers emphasize teamwork and cooperation rather than discipline and order-giving. | |

|I. To be effective, managers must rely on appropriate leadership skills and motivational techniques. | |

|SELF Check Questions (Text page 203) | |

|Why are managers facing intense scrutiny? | |

|How is diversity affecting today’s work environment? | |

|Define downsizing. Is downsizing the same as rightsizing? Explain. | |

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| |TEXT REFERENCE |

| |Real World Business Apps |

| |(Box in text on page 204) |

| |Alice has decided that she wants to be|

| |a participative manager. She studies |

| |her organization and identifies key |

| |organizational concepts. |

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| |Bonus Case 6-5 |

| |Oreck: After the Storm |

| |Hurricane Katrina affected every |

| |organization in its path. This case |

| |focuses on Oreck Corporation’s |

| |decision to close its Mississippi |

| |plant at Long Beach. (See complete |

| |case, discussion questions, and |

| |suggested answers on page 6.56 of this|

| |manual.) |

| | |

| V. SUMMARY | |

career and study skills notes

Career Development Box:

BASICS OF CAREER PLANNING OBJECTIVES (TEXT PAGE 183)

Instructor’s Notes for Text Box Six:(Objectives to consider and implement to increase students’ knowledge, usage, and understanding of the concepts).

By now, your career objectives should be more easily understood. Putting your objectives into a usable context can be of value and the payoff worth the time invested. The following exercise is intended to help you in the career development process and its potential payoff. Take a look at the following questions and answer them with the understanding that a better-planned career has a better return on the investment of time and resources used. It is also understood that the information you provide can and will change as you and your career goals change going forward. All information that is provided is not static and has new meaning as your own career moves in new directions. Be honest and use this guide as it is intended. The payoff is worth all the energy and education that you will find in the learning process.

Career Objectives Worksheet

What is your ideal career? Explain:

______________________________________________________________________________

______________________________________________________________________________

What companies would you consider to be a good fit to the career you are striving for?

______________________________________________________________________________

______________________________________________________________________________

What skills do you have that are a good fit to your ideal career?

______________________________________________________________________________

______________________________________________________________________________

What additional skills might be necessary to help get better results in the career that you are seeking?

______________________________________________________________________________

______________________________________________________________________________

How confident are you that you can find and get a job in this career?

______________________________________________________________________________

______________________________________________________________________________

What is the desired salary and benefits you expect when you get into this career?

______________________________________________________________________________

______________________________________________________________________________

Are you willing to relocate for this career or job?

______________________________________________________________________________

______________________________________________________________________________

What is keeping you from obtaining this career or job? Explain:

______________________________________________________________________________

______________________________________________________________________________

Study Skills Box:

Return on My Investment (Text page 193)

Instructor’s Notes for Text Box Six:(Objectives to consider and implement to increase students’ knowledge, usage, and understanding of the concepts).

Where can this list lead me? This question is better asked: what is my return on my investment? If I spend more time on studying, what can this do for my overall improvement in my study effectiveness and grade point average? To best answer this question, you must look at the work you have done to this point. More time studying might help, but if you are not aware of your shortcomings and deficiencies, then more time doing the same thing incorrectly will not help you to arrive at a better outcome. As a result, only through personal assessment and learning to develop new strategies will you find a changed outcome. Go back to your list and focus on what are truly your weak areas and learn to develop new strategies to get better results. You will be amazed at the transformation that can happen. Develop strategies for staying on track; otherwise, falling back on old habits can set you back and create new frustrations that might be even larger challenges to overcome.

Student Exercises:

1. DISCUSS THE BENEFITS OF IMPROVED STUDY SKILLS. ASK STUDENTS TO ADD ADDITIONAL “IMPROVEMENTS” THAT MIGHT BE IN ADDITION TO THE LIST ABOVE. LIKE A GOOD ADVERTISEMENT, THE FOCUS IS ALWAYS ON THE “BENEFITS” AND IN THE SAME MANNER, STUDENTS MUST SEE THE BENEFITS BEFORE THEY MAKE THE INVESTMENT TO SPEND MORE TIME AND ENERGY ON IMPROVING THEIR STUDY SKILLS.

2. Explain to the students the concept, as used in the business world, “return on investment” (a performance measure used to evaluate the efficiency of an investment). Make the comparison of their own investment to improve their study skills and the expected improved outcome.

3. Finally, explain the focus needed to keep the change of behavior of the newly improved skills, i.e., staying on track once they’ve learned new skills and behaviors. Otherwise, falling back into old habits can bring greater challenges and higher levels of frustrations that might be more difficult to overcome.

lecture links

lecture link 6-1

THE CULTURE OF THE REAL ROCKET SCIENTISTS

Celebrations at the Jet Propulsion Laboratory (JPL) in Pasadena, California, have come virtually back-to-back in recent years. The Pathfinder Lander successfully landed on Mars in 1997, then the Spirit and Opportunity rovers followed in 2004. Later that year, the Cassini probe went into orbit around Saturn.

In the four decades it has been affiliated with NASA, the Lab has dispatched probes to seven of the planets and dozens of their moons. According to the deputy director of Mars exploration Pete Theisenger, “We do interplanetary. … We’re not the only people who can do it, but we’re the only ones who have done it for 40 years.”

JPL is not owned by NASA, but rather is a non-profit, federally-funded research center managed by the California Institute of Technology. It does its work for NASA under contract. What is responsible for this success? One reason: a handful of straightforward rules that JPL has always taken care to follow.

Culture of Critique. For big businesses, research and development is a secretive thing. JPL scientists come from the academic field and live by peer review, in which theoretical work isn’t considered sound until a lot of objective eyes have looked at it. When smart people ask questions of other smart people, often as not they get smart answers.

Pie-in-the-Sky Thinking. The Lab has a fondness for wild ideas, going back to the 1960s, when the Lab established an office to dream up plans for future missions. An engineer crunching numbers one day happened to notice that in 1977, Jupiter, Saturn, Uranus, and Neptune would fall into a rare planetary line up. This insight set the stage for the four-planet Voyager flights during the 1970s and 1980s. Today this blue-sky thinking has become institutionalized with a 20-person group called the Advanced Projects Design Team—or Team X. Scientists with a suggestion for a future mission book time with Team X and pay for it out of their own operating budget. In a given year, 70 or more missions come before Team X, and only one or two are recommended to NASA. The group technique assures that those two missions are well thought out.

Each One Teach One. The greatest resource JPL has is not good ideas as much as the people who generate them. Having Caltech next door provides a steady stream of intelligent recruits. The first thing young engineers who come to work at the Lab must do is learn the culture of JPL as an institution. The Lab uses the concept of “each one teach one,” in which senior members of any team are charged with the responsibility of bringing at least one junior member along, assuring institutional memory.

Tolerance for Flops. The true test of the Lab’s business model comes when something goes wrong. Every mission means billions of dollars and decades of planning are at risk. JPL not only accepts the likelihood of the occasional costly flop, but also expects it. JPL’s first director William Pickering headed the moon probe missions in the 1960s. Pickering’s probes flopped six times before Ranger 7 succeeded. The Lab encourages employees to push the limits in a thoughtful way.

In JPL’s future are more missions to Mars and possibly to Pluto.[i]

lecture link 6-2

WHY GOOD EMPLOYEES CAN BE BAD MANAGERS

You have a good employee, a hard worker, technically proficient. You promote him and it turns out to be a bad decision. You have promoted your best technical employee, but in the process, you lose a good employee and gain a poor manager. How does this happen?

Good technical employees can make good managers, of course, but many do not. Good technical specialists—engineers, accountants, computer gurus, financial analysts, statistical experts—are more likely to have introvert personalities. Introverts prefer to work alone. They revel in painstaking details, meaningful paperwork, tedious activities, and precision. They can focus for hours on extracting meaningful data from mounds of information. The presence of ambiguity and clutter motivates them to find the “perfect solution.”

The traits that make technical experts successful actually get in the way of managing others. The world of the worker encourages them to seek precision and order. By contrast, the management role is messy, complicated, and ambiguous. Additionally, the sense of pride and reward for completing a task is missing. Relationship complexities are more dynamic than task complexities. Management must deal with distasteful political elements, egos, pride, insecurities, envy, hurt feelings, and petty conflicts.

To make the successful transition to leadership, technical experts learn to rely more upon their instincts, insights, intuitions, tolerance for human equations, underlying values, and their “feel” for things. Rational analysis is still important; but by itself is not enough.

lecture link 6-3

LEARNING MANAGEMENT SKILLS

Now that you know some of the broad categories of skills needed by various levels of management, we can look at the more specific skills an aspiring manager needs to learn. Remember that customer satisfaction is the key to success in almost all businesses.

In general, it’s a good idea to take as many courses as you can in oral communication, writing, computers, and human relations. In all managerial jobs, these are the skills in greatest demand. Naturally, it’s also important to develop technical skills in some selected area. To develop managerial potential, students need at least six skills: verbal, writing, computer, human relations, time management, and other technical.

Verbal Skills

Most of a manager’s duties involve communicating with others. Managers have to give talks, conduct meetings, make presentations, and generally communicate their ideas to others. To prepare for such tasks, students should take oral communication courses and become active in various student groups. It helps to become an officer and assume responsibility for conducting meetings and giving speeches. Also helpful: joining a choir or other group to become comfortable performing in front of others.

At least half of communication is skilled listening. A good manager mixes with other managers, workers, clients, stockholders, and others outside the firm. He or she listens to recommendations and complaints and acts on them. Active listening requires asking questions and feeding back what you’ve heard to let others know you’re truly interested in what they say.

Writing Skills

Managers must also be able to write clearly and precisely. Much of what they want others to do must be communicated through memos, reports, policies, and letters. What was previously communicated by phone or letter is now transmitted by e-mail or fax. While in the past, secretaries often wrote and/or corrected letters, today managers themselves send most e-mail and fax messages. Consequently, organizations everywhere are complaining about many college graduates’ inability to write clearly. If students develop good writing skills, they will be miles ahead of the competition. That means taking courses in grammar, composition, and keyboarding. To learn to write, people must practice writing. It helps to write anything: a diary, letters, notes, and so on. With practice, people will develop the ability to write easily—just as they speak. With this skill, they will be more ready for a career in management.

Computer Skills

The office of the future will be an office full of computers and related technology. As noted above, memos, charts, letters, e-mail and fax messages, and most other communication efforts will involve the computer. The truly efficient manager of the future will be able to effectively use and take advantage of the continuing developments in technology. That includes being able to use the Internet to find needed facts and figures quickly.

Human Relations Skills

A manager works with people, and that means that good managers know how to get along with people, motivate them, and inspire them. People skills are learned by working with people. That means aspiring managers should join student groups, volunteer to help at their church or temple and local charities, and get involved in political organizations. They should try to assume leadership positions where they are responsible for contacting others, assigning them work, and motivating them. Good leaders begin early by assuming leadership positions in sports, community groups, and so on.

Time Management Skills

One of the more important skills for new managers to learn is how to budget their time effectively. There are many demands on managers’ time that they need to control: telephone interruptions, visits from colleagues, questions from team members, meetings scheduled by top management, etc. Time management courses or workshops will help you develop such skills as setting priorities, delegating work, choosing activities that produce the most results, doing your work when you’re at your best, and dealing with interruptions.

Technical Skills

To rise through the ranks of accounting, marketing, finance, production, or any other functional area, it is important to be proficient in that area. Therefore, students should choose some area of specialization. To rise to top management, it’s a good idea to supplement undergraduate studies with an M.B.A. (master of business administration) or some similar degree in government, economics, or hospital administration. More and more students are going on to take advanced degrees, so you too may need such a degree to keep up with your colleagues.

(Critical Thinking Exercise 6-6, “Rate Your Management Skills,” on page 6.45 gives students an opportunity to evaluate their skill level for these five important skills.)

lecture link 6-4

MAKING TEAMS WORK IN A CHANGING MARKET

Winning the Malcolm Baldrige National Quality Award is no small feat. To receive the Baldrige award, a company must excel in three major measurements of quality: (1) customer satisfaction, (2) product and service quality, and (3) quality of internal operations. Previous winners have included such companies as Solectron and the General Motors Saturn Division.

Taking home the Baldrige award was the last thing on the minds of Judith Corson and her partner, Jeffrey Pope, when they evaluated the situation at their Minneapolis-based market research firm, Custom Research, in the early 1990s. The two partners faced a market full of client companies that had downsized and were asking more of Custom Research. The problem for Corson and Pope was that Custom Research was experiencing a flattening of growth. The firm had neither the resources it needed to expand its employee base nor the technological capacity it needed to meet the growing demands. The business partners were facing the hard reality that to survive in the market they would have to provide better management of clients’ work with their current staff and resources. Corson and Pope realized they had to do something quickly.

The two partners decided to abandon the traditional departmentalized structure of the organization and group their 100 or so employees into account teams. Each account team would have an account and research team leader assigned to facilitate the direction of the team. In just a short time, communication and the tracking of work improved. Workers were more interested and involved, and clients were expressing satisfaction at a job well done. The business began to thrive.

But after the system had been in place for a couple of years, the partners saw a problem developing. Team members were becoming limited, learning only about the clients or the business categories handled by their group. Corson and Pope swung into action again. They decided that once or twice a year, employees would reorganize into new teams with their size determined by the volume of work at hand.

Using the team approach at Custom Research changed things quite a bit. The firm watched its billings go from $10 million in 1985 to $22 million in 1996. Revenue per full-time employee rose by 70%. The firm met or exceeded its client expectations on 97% of its projects and was rated by 92% of its clients as better than the competition. Such outstanding performance enabled Custom Research to become not only the smallest but also the first professional-services firm to receive the prestigious Malcolm Baldrige Award. Leonard Berry, a professor at Texas A&M University, identified Custom Research as one of the 14 best service companies in the world in his book Discovering the Soul of Service. Berry describes Custom Research as “a highly progressive marketing research company that has built a strong business with Fortune 500 clients through team service delivery, innovative practices, competence, and an emphasis on continuous improvement.”

Corson says her company always did strategic planning, but in hindsight, it wasn’t very focused. The Baldrige contest emphasized the need to concentrate on just a few “key business drivers”—the very core of the business. So Custom changed its strategy to identify its key drivers and list goals each year that would enhance each one. Besides helping growth, the strong planning kept missteps to a minimum. “You don’t have as many gaps or surprises,” Judith Corson says of the company’s concentration on its core competencies.

lecture link 6-5

USING CONTROL PRINCIPLES AT PIXAR

Many textbooks discuss control principles in terms of production and quality control. However, these concepts can be used in any organization, in any industry. For example, Ed Catmull, president of Pixar Animation Studios, uses control principles to improve the company’s animated films.

Catmull began his film career at Lucasfilm, the special effects studio created by George Lucas. In 1986, Steve Jobs bought Lucasfilm’s computer division, and Catmull became one of the co-founders of a new, stand-alone company, christened Pixar. The company hit its stride in 1995 with the blockbuster Toy Story. Then came Monsters Inc., Finding Nemo, The Incredibles, and Toy Story 2. Over the past two decades, Pixar has earned the reputation as a place where creative genius thrives. Pixar’s hands-off management style and culture of artistic excellence have helped it become the benchmark for the rest of the industry.

When shooting a picture, it is easy to get overwhelmed with special effects to the detriment of the story. Catmull tries to strike a balance. “We have some amazing technical abilities,” he says. “But we still have to rely on good old-fashioned storytelling.”

One part of this management philosophy is to keep creative technicians from getting complacent about their abilities. He encourages his people to think in terms of steps—every new movie is a stepping-stone where you can learn new things about what works and what doesn’t.

Pixar also stresses intense self-scrutiny. Catmull recounts an incident that occurred while filming Toy Story 2. The firm crew was nearing completion of the movie, but Catmull was concerned. The film just wasn’t taking shape. Given the tight production deadline, it would have been virtually impossible to revamp the existing story. His solution: “We threw the script away and started over. We redid the entire movie.” It usually takes four years to create an animated feature. Toy Story 2 was made in nine months.

At the end of every project, Pixar personnel conduct what Catmull refers to as a “brain dump.” It is a candid assessment, not a session of placing blame. “Out of this self-assessment we come up with an operating theory for the next film. During the next film, we’ll fix those problems, and we’ll discover new ones. You can never perfect the process.”

In early 2006, the Walt Disney Co. bought Pixar. Some Pixar animators were concerned that the company wouldn’t be able to maintain its freewheeling culture. However, for the time being, Disney executives have pledged to protect Pixar’s independence. Pixar has hooked up with Disney before. The companies worked together for five years in a partnership to distribute Pixar films.[ii]

lecture link 6-6

BEWARE OF BAD BOSSES

Bad bosses—whether jerks, bullies, or micro-managers—have always been with us. Today, however, there seem to be more bad bosses than ever before. As a result of downsizing, overextended managers are both short-tempered and too busy to provide staff with the support they need. No one has as much power as a bad boss to unnerve you and wreak havoc on your sense of self-esteem. This is why it is commonly said that people don’t quit jobs, they quit bosses. What makes for a bad boss? Some are just plain nasty, but often a bad boss is all in the eye of the beholder. One person’s boss from hell may be another person’s pin-up.

The key to getting on with a boss is to manage him by understanding his underlying motivations, which may be different than you think. Here are some common types of bad bosses, their motivations, and strategies for dealing with them.

The Weak Manager

She won’t stand up for you. She aggressively avoids taking risks. She’s vague, and her commitments have the sticking power of water. But the underlying causes of her behavior can vary. Often, she simply wants to be liked by everyone and can’t stand conflict. It’s also possible she’s too busy to understand when there is a problem or she is too burned out to care. Frequently, such managers are reluctant to be managers at all, and would much rather be doing their own work. They may also be ill-trained and lack management skills.

If you are dealing with a weak manager, identify the problem. For example, if your manager needs to be liked by everyone, avoid communications that suggest contentious or highly charged emotional issues. Where you can, solve conflicts yourself. If her problem is that she is spineless and refuses to take on any leadership role, consider talking to your boss’s boss.

If your boss is too burned out to care or is a reluctant manager, work around her. Take the initiative to set out the parameters of the work. Make her life easy by only talking to her about critical issues. If your boss is lacking management skills, tell her what you need from her to do your job. Then cover yourself by sending an e-mail.

The Political Manager

He has an unerring ability to know what will make him look good. He will go to bat for you only on issues that serve his political agenda. He’s sneaky and plays favorites. He won’t think twice about using you as a sacrificial lamb to support his own career goals. Support his high need for recognition by making him look good on strategic projects. Focus your own efforts on “high-value” work. Be prepared to share the limelight, even if it kills you. Don’t trust him to have your own interests at heart. Pitch him on work you want to do by emphasizing its profile and importance to senior management.

The Obsessive Micro-Manager

She trusts you the way you’d trust a five-year-old behind the wheel of the car. No matter how much detail you give her, or how many times you redo a piece of work, it’s still not right. You’re completely unmotivated and have lost your sense of competence. Why is she so distrusting? Is she anxious about failing to please her boss, or is she simply a control freak? If the problem is her own insecurity, anticipate issues that will make her anxious by reassuring her that you have covered all the bases. Say, for example, “In completing this I spoke to Jane Doe and took the following issues into account . . .” Write it down as well, as she may be too anxious to fully process what you are saying.

The Invisible Manager

You have no one to go to for direction. She doesn’t have a clue about the volume or pace of your work. You’re killing yourself, but no one notices or gives you feedback. This manager shares many of the underlying motivations of the weak manager. She may be invisible because she’s too busy, or is a reluctant or unskilled manager. If she is pressed for time, do your homework before you meet with her to make the meeting as efficient as possible. Give yourself direction and feedback by setting milestones and regularly evaluating your effectiveness against them. Establish a mechanism for getting direction, whether it be weekly or monthly meetings at an agreed time. Hold her to her commitment.

The Task Master

He doesn’t have a life and doesn’t expect you to either. You’re drowning in work, but he keeps heaping on more. His timelines are ridiculous. Sometimes an extremely task-focused manager is simply shy, or preoccupied, or so focused on getting the work done that he’s not aware of the impact of his behavior on the people around him. Is he aware of your work load? If you’ve talked to him and he still doesn’t get it, create your own standards for evaluating what is realistic and doable. Don’t be apologetic about wanting time for a personal life. Work-life balance is your right, not a privilege. If your organization wants to “be an employer of choice,” remind your boss of the incongruity between policy and behavior.

The Nasty Manager

She’s ruthless. She seems to take pleasure in watching you squirm. She has pets, and you are not one of them. Sometimes an apparently nasty boss is simply so task-focused that she is oblivious to how her behavior makes you feel. Underneath a gruff exterior, as the saying goes, may be the heart of a pussycat. When you confront her, does she apologize or get mad? Regardless of what type of boss you have, your first line of defense is to speak to her, as she may not be aware of her behavior. Don’t make sweeping generalizations about her personality. Rather, talk to the specific behavior in question and tell her how it makes you feel. You can soften your comments and avoid defensiveness by allowing your boss to save face. Introduce your statements with “You may not be aware …” or “You may not realize ...” or “You may not intend …”

If none of these strategies work, you have two choices. If you have good personal reasons for staying in your job—you love your work, you’re learning a lot, you like the people you’re working with—you can hold your nose and ignore your boss as best you can. Or, you can quit: use the experience to learn and then move on.[iii]

Bonus Internet exercises[iv]

Bonus Internet Exercise 6-1

RESEARCHING MISSION STATEMENTS

The second largest computer software company in the U.S. is Adobe Systems, developer of Adobe Acrobat, Adobe Photoshop, Adobe Illustrator, and other software packages. The company has been named as one of the ‘‘Best Places to Work’’ by Fortune magazine. One reason is a carefully developed and articulated mission and vision statement. Visit the company’s website () to answer the following questions. (Sometimes the web address for a location changes. You might need to search to find the exact location mentioned.)

1. Summarize the Adobe mission:

2. What are the core values and beliefs listed?

3. Adobe lets web users download its Adobe Acrobat viewer free of charge. The software allows viewers to transfer documents from websites without conversion. Why would a company give away its software?

Bonus Internet Exercise 6-2

SELF-ASSESSMENT FOR LEADING AS A MANAGER

Knowing yourself, your strengths, and your needs for development form the foundation of effective leadership. A self-assessment tool is provided on the Massachusetts Institute of Technology’s online education site (.) (Sometimes the web address for a location changes. You might need to search to find the exact location mentioned.)

After completing the self-assessment, answer the following questions:

1. Which skills and competencies did you think you do “frequently” or “nearly always?”

2. Which skills and competencies did you think you “almost never do” or “seldom do?”

3. What can you do to develop skills to balance your leadership effectiveness?

Critical thinking exercises

critical thinking exercise 6-1

MANAGEMENT FUNCTIONS

Remember the four management functions? They are: planning, organizing, leading, and controlling. Think of a job you have now or one you’ve had in the past. List the managerial activities you have done or observed. If you have never had a paid job, remember it takes management skills to manage a home, run a baseball team, and lead a church group. Classify each activity of your job according to whether it involved planning, organizing, leading, or controlling.

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|PLANNING |ORGANIZING |LEADING |CONTROLLING |

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critical thinking exercise 6-2

GROUP PROJECT: ORGANIZING PRODUCTION

You will need about 20 sheets of paper (regular-length scratch paper, old handouts, discarded photocopy paper, etc.) for each student and one large cardboard box for each group of students.

Designate groups of five to six students as “production groups” and one group as “evaluators.” Explain that each group is a production team. Each production group’s objective is to profitably produce as many quality paper airplanes as possible in 15 minutes. The planes’ quality is to be judged on the basis of (1) uniformity of design, (2) accuracy, and (3) distance of flight when tossed. Each plane must have a company logo to prevent confusion with the planes of other groups. Completed planes are to be placed in the cardboard production box designated for each group.

The evaluation team’s task is to determine which production group meets the quality criteria and to verify the production teams’ profit. The evaluation team can plan its evaluation process while the production groups are in production. At the end of the 15-minute production period, each production team will calculate the profit for the production run. ()

Stage 1: Organizing for production (10 minutes). Each team will design the product, develop a simple logo, build a prototype, assign duties, and discuss quality criteria: (1) uniformity of design, (2) accuracy, and (3) distance of flight.

Stage 2: Production (15 minutes). One member of each team should be designated “Financial Officer”—he or she will keep records of preliminary revenue and production costs. The rest of the team will be Production Staff, producing as many finished products as possible while meeting quality criteria.

Stage 3: Profit calculation. Have each production group use the profit calculation worksheet on the following page to calculate profit. Each production unit (airplane) that meets quality criteria will be purchased for $2.50. Defective products will be valued at $0. Raw materials (paper) cost $1.00 per unit. Production equipment (box) costs $25 rental. Each team member will be paid $5 in labor cost.

Critical thinking exercise 6-2

PROFIT CALCULATION WORKSHEET

Each production unit (paper airplane) that meets quality criteria will be purchased for $2.50. Defective products will be valued at $0. Raw materials (paper) cost $1.00 per unit. Production equipment (box) costs $25 rental. Each team member will be paid $5 in labor cost.

Revenue:

______ acceptable units @ $2.50 ________________

Expenses:

Raw material costs:

______ units of raw material @ $1.00 ________________

(include defective units)

Equipment cost ____$25.00_______

Labor costs:

______ team members @ $5.00 each ________________

Total Expenses: ________________

Profit (Loss) ________________

(Revenue minus expenses)

critical thinking exercise 6-3

TESTING YOUR PLANNING SKILLS

Anise Terrisian, general manager at Spinnacle Electronics’ Pricedale Facility, has just named you as chairperson of the first annual blood drive, to be conducted at the site headquarters. A strong believer in the company’s participation in community affairs and herself a member of the local Red Cross board of directors, Terrisian has committed the division’s 200 employees to the blood drive.

Your committee will set the exact dates for the drive, which is to be held in three or four months. As chairperson, you have been assigned a team of four other company employees to plan and implement the project. All members are highly respected, competent people, representing a true cross section of the employees. One is a production worker who is president of the local union; another, an engineer, represents the professional segment; the human resources manager represents the management group; and a payroll clerk represents the administrative office group. Terrisian was given your name by your boss, who expressed confidence in your ability to lead a successful donor campaign at the plant. At 27, you are the youngest person on the committee and anxious to do a good job.

You have called the first committee meeting, which you have advertised as a “preliminary planning meeting,” to identify key factors that must be planned for in order for the committee to meet its objective: having a successful blood drive at Spinnacle Pricedale.

Instructions:

1. MAKE A LIST OF WHAT YOU CONSIDER THE KEY PLANNING ISSUES TO BE ADDRESSED AT THIS INITIAL PLANNING MEETING.

2. Of the items on your list, which two or three do you believe are the most crucial? Why?

3. Identify major problems that could prevent accomplishment of your objective. What contingency planning could be done to avert them or minimize their impact?

4. To help in your preparation for the planning meeting, identify six to ten steps that you feel will be needed to achieve a successful blood drive. These steps might be such things as

• Determine a date

• Identify a location

• Secure commitment from Red Cross

critical thinking exercise 6-4

CAREER SWOT ANALYSIS

SWOT analysis, the key tool in the strategic planning process, can also be applied to career planning. A SWOT analysis focuses on the internal and external environments, examining strengths and weaknesses in the internal environment and opportunities and threats in the external environment.

Use Figure 6.4, “SWOT Matrix,” presented on text page 181 and conduct an analysis of your career planning. SWOT diagrams are also available at numerous websites such as or .

1. Strengths:

• What advantages do you have?

• What do you do well?

• What relevant resources do you have access to?

• What do other people see as your strengths?

2. Weaknesses:

• What could you improve?

• What do you do badly?

• What should you avoid?

3. Opportunities:

• Where are the good opportunities facing you?

• What are the interesting trends you are aware of?

• What changes in technology and markets are occurring on both a broad and narrow scale?

• What changes are occurring in social patterns, population profiles, lifestyle changes, etc?

4. Threats:

• What obstacles do you face?

• Are the required specifications for your career changing?

• Is changing technology threatening your plan?

• Do you have bad debt or cash flow problems?

• Could any of your weaknesses seriously threaten your future?

critical thinking exercise 6-5

EVALUATING ALTERNATIVE COURSES

Monmouth Thermics, a subsidiary of General Standard, a large conglomerate, manufactures thermometers. Your primary customers are large companies who purchase the thermometers to use for specialty advertising. Over the last several years, however, low-cost overseas competitors have pulled away many of the company’s long-time customers.

General Standard has become concerned about the loss of market share and declining profit. You, as Monmouth general manager, have been asked to put together a recovery plan to present to the General Standard board of directors. Your management team has pulled together the following options:

• Cut costs by imposing an across-the-board pay cut for all personnel. This would save enough money to bring the company back to profitability.

• Expand operations into specialty printing. Currently the thermometers are sold to other companies for printing. The additional printing expense would add 23¢ to the cost of each unit, but would also add 40¢ to the unit sale price.

• Expand sales of the current thermometer line to retail outlets such as Wal-Mart and Target.

• Manufacture and market a new product the R&D department has developed, a combination thermometer/barometer housed in an oak case. The product would be marketed through specialty stores. Two new production lines would have to be added—for the barometer and for the wood case. The “Thermbarometer” could be manufactured for about $30 per unit and sold for $100.

Which option would you recommend to the General Standard board of directors? Defend your choice.

critical thinking exercise 6-6

RATE YOUR MANAGEMENT SKILLS

Rate yourself on each of these key management skills.

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|SKILL NEEDED |PERSONAL EVALUATION |

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| |Excellent |Good |Fair |Need work |

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|Computer skills | | | | |

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NOTES ON critical thinking exercise 6-6

LECTURE LINK 6-3, “LEARNING MANAGEMENT SKILLS,” ON PAGE 6.31 DISCUSSES THESE SIX IMPORTANT MANAGEMENT SKILLS.

critical thinking exercise 6-7

LEADERSHIP SITUATIONS

Under the situational approach to leadership, different situations call for different leadership styles. Outline specific situations in which you would employ each of the following styles.

Autocratic

Laissez-Faire

Democratic

Bonus cases

Bonus case 6-1

PANERA BREAD: BREAD LINES ARE BACK AT PANERA! (VIDEO CASE)

(NOTE: This case can be used with the Video on DVD for this chapter.)

During the Great Depression, people sadly stood in long lines waiting to get bread. Today, people are eager to wait in lines (which are much shorter and faster) to get at the bread, soup, and sandwiches at Panera Bread. The company started out in 1981 and was known as Au Bon Pain. In 1991, the company went public (sold stock to people) and bought the St. Louis Bread Company. In 1994, Ron Shaich, the president of the organization, prepared a vision he called “Concept Essence” that described how the company should compete in the marketplace. Since then, the company has been working diligently to apply the concepts from that original vision.

Based on the vision, Shaich developed long-term goals for the firm. Broad strategic plans led to tactical plans that would direct the company to the goals Shaich identified. Every step along the way called for decision making: Defining the situation, collecting information, developing alternatives, choosing the best alternative, and so forth. That process led to the company’s decision to focus solely on Panera Bread and to sell all other business units, including the original Au Bon Pain stores. The idea was to focus on the mission and keep that focus. That meant, among other things, placing the stores in the right locations, keeping the stores relatively small, maintaining the atmosphere of friendliness, and building a team of employees who enjoy the work and serve customers well. Of course, the whole enterprise was built upon offering quality products.

Periodically, the company has to examine its strengths, weaknesses, opportunities, and threats. It’s always tempting to grow rapidly, but that might lead to poorer quality. Similarly, one may be tempted to look overseas for growth, but choosing to do so should not be at the expense of maintaining control over quality and personnel.

So, how do the managers at Panera Bread test how well they are doing? They listen to customers and then they listen again and again. They also listen to employees and anyone else who has interesting ideas and suggestions. The key question today for most firms is: “Would you recommend us to others?” In Panera’s case, the answer is a resounding YES. What do they love? It depends. Some love the soups. Others the bagels. Others the coffee. And, clearly, some like it all.

First-line managers (supervisors) at Panera must have strong technical skills needed to keep the place running smoothly. They must also have great human relations skills to work successfully with employees. It takes a wise manager to step back and let the employees do the work and not step in and do it for them. The word to describe that process is empowerment. It is one of the more difficult managerial tasks to learn. But when people are given the freedom to make decisions on their own and they can respond to customer wants and needs without delay, the whole company benefits. Proof is in the rapid growth of the company.

The kind of leadership that works best for Panera is participative (democratic). While employees need goals, direction, and guidance, they also need to be able to give input on how to reach those goals. Employees are the front-line people who hear what customers have to say day after day. They know what’s working and what’s not. Working with management as a team, the store’s personnel enjoy the surroundings and create a great atmosphere for customers.

discussion questions for BONUS case 6-1

1. WHO ARE THE MAJOR COMPETITORS TO PANERA BREAD IN YOUR AREA? WHAT MANAGERIAL DIFFERENCES, IF ANY, DO YOU SEE? GIVEN THE DESCRIPTION OF PANERA BREAD IN THIS CASE, FOR WHICH COMPANY WOULD YOU RATHER WORK? WHY?

2. Thus far Panera Bread has not gone international, nor does it open stores as fast as some franchises do. What do you see as the benefits and drawbacks of such a policy?

3. Ron Shaich has applied almost everything you learned in this chapter to the management of Panera Bread. Would these management skills be equally useful to him if he were to go to a different organization to work? What about a nonprofit organization?

answers to discussion questions for BONUS case 6-1

1. WHO ARE THE MAJOR COMPETITORS TO PANERA BREAD IN YOUR AREA? WHAT MANAGERIAL DIFFERENCES, IF ANY, DO YOU SEE? GIVEN THE DESCRIPTION OF PANERA BREAD IN THIS CASE, FOR WHICH COMPANY WOULD YOU RATHER WORK? WHY?

This question can only be answered by the students in your area.

2. Thus far Panera Bread has not gone international, nor does it open stores as fast as some franchises do. What do you see as the benefits and drawbacks of such a policy?

Panera can focus more on the franchises it has and give them more service. Furthermore, it does not have to adapt to foreign tastes. On the other hand, the brand is less well known and thus less popular, cutting potential business.

3. Ron Shaich has applied almost everything you learned in this chapter to the management of Panera Bread. Would these management skills be equally useful to him if he were to go to a different organization to work? What about a nonprofit organization?

Management skills are applicable in all organizations. You might want to discuss differences in a nonprofit organization.

Bonus case 6-2

ONE SMOOTH STONE (VIDEO CASE)

(NOTE: This case can be used with the Video on DVD for this chapter.)

David slew Goliath with one smooth stone, and thus was born the name of the company One Smooth Stone (OSS.) It’s an unusual name for an unusually interesting company. The company is in the business of providing materials for big corporate events: sales meetings, client meetings, and product presentations. Most people in the industry have attended many such meetings, so to keep them entertained is a major challenge. And that’s where OSS comes in: It uses project teams to come up with original and captivating presentations for its customers.

OSS is one company that understands the importance of esprit de corps. It is a fun and interesting place to work, and turnover is very low. The company follows few of the traditional organization rules. Quite the contrary, OSS is structured to be flexible and responsive to its clients. There are no set rules, and the company is certainly not consistent with its projects. Everything is custom-made to the needs of each client.

OSS uses a flat organization structure. There are a few project managers, who have workers under them, but they don’t look over the employees’ shoulders telling them what to do or how to do it. That means there is decentralized authority. Whereas many companies are structured by department—design, engineering, marketing, finance, accounting, and so forth—OSS is structured using project teams. Each team is structured to meet the needs of an individual client. For example, the company will go out and hire people with specific skills as they are needed. The term for this is outsourcing, and OSS outsources many of its tasks to freelance professionals. Together, they work as self-managed teams. The focus of the team is on client needs. There are some staff workers to help with personnel, legal, and other such services.

The company is not keen on making strategic plans because its environment changes so rapidly that such plans are obsolete as soon as they are made. So the company does what is called “strategic improvising.” Although OSS sounds less structured and more informal than most companies, it still focuses on total quality and it practices continuous improvement.

In addition, the company is particularly concerned about its corporate culture. It has three values: smart, fast, and kind. It works smart, responds quickly, and is always kind to others, including its own workers. Because of its culture and responsiveness, the company has been able to capture big accounts like Motorola, Sun Microsystems, and International Truck and Engine.

The long-run success of the firm, however, is based on its project management teams. They carefully listen to what clients are trying to accomplish and then come up with solutions to their problems. You can see the creativity in this video. Clearly, OSS has been able to impress the Goliaths of big business with its presentations.

discussion questions for BONUS case 6-2

1. WHAT ARE THE ADVANTAGES OF USING TEAMS AS AN ORGANIZATIONAL TOOL RATHER THAN THE TRADITIONAL LINE OR LINE AND STAFF FORMS OF ORGANIZATION?

2. Does working at OSS look like more or less fun than working for a company with a more traditional approach to organizational structure and operations? Why?

3. Do you have any idea what the core competencies of the company might be? What are they?

answers to discussion questions for BONUS case 6-2

1. WHAT ARE THE ADVANTAGES OF USING TEAMS AS AN ORGANIZATIONAL TOOL RATHER THAN THE TRADITIONAL LINE OR LINE AND STAFF FORMS OF ORGANIZATION?

Teams are often much better at responding quickly to clients’ wants and needs. By combining the skills of people from design, marketing, and other departments, the team is able to provide creative solutions to problems that would appeal to a wide range of people—because there are a wide range of people on the team. In a typical line and staff organization, a lot of time is spent on coordinating the work of various departments and response time is slowed as a result.

2. Does working at OSS look like more or less fun than working for a company with a more traditional approach to organizational structure and operations? Why?

This is a purely subjective answer, but most people believe that working on teams is more fun and rewarding. That is not to say, however, that working in teams is easy. One has to be team-oriented (not a superstar who wants all the glory). Compensating teams is difficult because individual contributions are hard to tease out. This question opens the door to a comprehensive discussion of teams and other forms of organization.

3. Do you have any idea what the core competencies of the company might be? What are they?

The core competencies of the company include creativity, originality, and excitement. Such skills are less tangible than other core competencies might be, but they are invaluable to making presentations. This question opens the floor to a whole discussion about outsourcing in general, core competencies in general, delegation of authority, flat organization structures, and more.

Bonus case 6-3

STRUCTURAL COLLAPSE: RESPONSIBILITY AND ACCOUNTABILITY

To publicize its newly opened nightspot, a major hotel instituted weekly “tea dances” in the lobby of the hotel. A local band played 1940s-era music while dancers competed in friendly contests. On a Friday night in July, the band was playing Duke Ellington’s “Satin Doll” when two skywalks spanning the lobby of the year-old hotel collapsed. Sixty-five tons of concrete, metal, glass, and dance spectators plunged four floors to the sidewalk below, killing 114 people and injuring 216 others.

The investigation after the collapse revealed that the collapse resulted from poor judgment and a series of events that, in combination, produced a disastrous result. The study showed a history of oversights, misunderstandings, and safety problems plaguing the 40-story, 780-room luxury hotel during construction and for months after its opening.

Mishaps aren’t uncommon on big projects, of course. But this huge project, which was built on an accelerated schedule, encountered a series of accidents and near-accidents during construction. At one point, the building’s owner dismissed its general contractor and barred an inspection company from bidding on future company projects.

The hotel was erected using the “fast track” method, a fairly common procedure in which construction proceeds before all drawings are complete. With a $40 million construction loan outstanding and all building costs soaring, the owner wanted the hotel up and open as quickly as practical.

Design changes are common on fast track projects, making clear communications more critical than usual. The owners of the building had circulated a 27-page procedures manual explaining the proper channels for design changes and approved drawings. But the procedures weren’t always followed, and other mistakes slipped in. Because some connections were misplaced on the drawings, for instance, workers installed a sweeping cantilevered stairway without fully attaching it to a wall.

The investigation found that the skywalks fell as a result of a design change made during a telephone call between the structural engineering company and the steel fabricator. Stress calculations would have shown that the redesigned skywalks were barely able to support their own weight, let alone the weight of dozens of dance spectators. However, court depositions of the two engineers who made the telephone redesign indicate that each person assumed it was the other’s responsibility to make new calculations, and neither did.

Edward Pfrang, then chief of the structures division of the National Bureau of Standards and a participant in the investigation, says, “One thing that’s clear after … [this] failure and a few others is that there isn’t a clear-cut set of standards and practices defining who is responsible in the construction process.”

discussion questions for BONUS case 6-3

1. WHO WAS RESPONSIBLE FOR THE COLLAPSE? EXPLAIN.

2. Identify several key time points at which the problem could have been corrected.

3. Is this a failure of planning, organizing, leading, or controlling?

answers to discussion questions for BONUS case 6-3

1. WHO WAS RESPONSIBLE FOR THE COLLAPSE? EXPLAIN.

Identifying who is to blame is the function of the legal system. Clearly, many people shared in the blame, but not all of them may be liable in a legal sense. Such a case shows the dangers of trying to get a project done quickly instead of safely.

2. Identify several key time points at which the problem could have been corrected.

During construction. During the safety inspection. When the times were set for competition. Safety considerations don’t take place at any one time. They must be in mind at ALL times.

3. Is this a failure of planning, organizing, leading, or controlling?

This failure occurred at all three stages. (1) At the planning stage, because the project was hurried. (2) At the organization stage because responsibility was not made clear. (3) At the control stage because periodic inspections should have found the flaws.

This case is based on the collapse of the skywalk at the Kansas City Hyatt Regency in 1981. Hundreds of lawsuits were filed against its owner, Hallmark Cards Inc., its operator, Hyatt Hotels Corp, and against the building companies involved. Millions of dollars in damage claims have been paid out.

bonus case 6-4

THE SUPERMARKET MANAGER

Fred Ferrell is the store manager of the Right-Way Supermarket in Beaumont, a small suburban area of some 1,300 families. The store’s staff consists of a produce manager, a meat manager and butcher, five checkers, four stockers, and a receiving clerk. The store operates six days per week from 9.00 a.m. until 9:00 p.m.

Last week Mr. Ferrell hired Amy Caldwell to replace the store’s receiving clerk. Since graduating from high school last June, Amy has worked for one other supermarket full time. She applied for the job at Right-Way to gain new experiences and because the job paid $1 more per hour than she was making at the other store. Amy likes the retail food business and hopes one day to manage a store of her own. She plans to start school again next fall.

After two ten-hour days of training under Mr. Ferrell, Amy felt she knew the operation and procedures well enough to proceed on her own. But Mr. Ferrell thought otherwise. For the rest of Amy’s first week, Fred Ferrell looked over Amy’s shoulder on a regular basis. It seemed that Amy couldn’t do anything without Ferrell’s checking it out for himself. Amy’s tasks included receiving, inspecting, arranging, and stacking inventory received from a central supply warehouse owned and operated by the parent company. She was also responsible for the various inventory control procedures and related paperwork.

Over the weekend between her first and second weeks, Amy studied the inventory procedures and records. She roughed out a system for streamlining inventory handling and felt she had found a way to reduce the amount of paperwork by combining several forms into one and using the computer system to print forms simultaneously. Amy felt if she could sell these proposals to Mr. Ferrell, not only his store, but all stores in the chain, could benefit. After some hasty calculations, she figured that nearly one hour per day would be saved and several hundred dollars in unnecessary forms could be eliminated.

Amy started work at 6:30 a.m. the following Monday, full of enthusiasm. When Mr. Ferrell arrived at 8:00 a.m., Amy was waiting for him at the door, her notes in hand. Before Amy could speak, however, Ferrell asked her what she was doing up front. Amy replied that she had already handled this morning’s deliveries and wanted to talk over a “proposal” with Mr. Ferrell. Ferrell then pulled a piece of paper out of his pocket and began to go over each item on this checklist with Amy. When he got to item 10 on the list, Amy replied that she would take care of that this afternoon. Ferrell told her to take care of it now. Amy tried again to explain that she had some ideas to speed up the receiving operation. Ferrell replied, “You kids are really something else. You’ve been here a week and already you’re running the place. What makes you think you know a better way? The procedures we use come from downtown. That is good enough for me. Now get to those cases out back.”

discussion questions for BONUS case 6-4

1. WHAT MANAGERIAL APPROACH IS MR. FERRELL USING?

2. Amy has asked your advice. What would you suggest that she do? What are her alternatives?

3. What advice would you have for the general manager of Right-Way’s Supermarket parent corporation?

answers to discussion questions for BONUS case 6-4

1. WHAT MANAGERIAL APPROACH IS MR. FERRELL USING?

He is applying McGregor’s Theory X approach. It implies that the average person dislikes work and will avoid it if possible, and will avoid responsibility, with little ambition. Of course, he was wrong on all counts. This theory does work, but only with the kind of people who meet the description of disliking work and so forth.

2. Amy has asked your advice. What would you suggest that she do? What are her alternatives?

Note the timing of her approach to Ferrell—she met him at the door at 8:00 a.m. on Monday morning. Could she have picked a worse time? Amy should wait until a more appropriate moment—most likely after work—to discuss her ideas with her boss. She should acknowledge the fact that some employees may prosper by merely following the rules, but that she is more ambitious than that and has some ideas. She may submit those ideas in writing so that the boss can implement them without losing face. If there is no response or a negative response to her suggestions, then, and only then, may she take them to a higher-level supervisor. Since this situation is far from unique, it should make for some lively class discussion.

3. What advice would you have for the general manager of Right-Way’s Supermarket parent corporation?

Management training is a continuous process and managers who fail to adopt the best motivational strategies need to be identified and given additional training or, if necessary, terminated. You could explain the newest concepts, such as employee empowerment, and the motivational techniques that go with them. Theory Y, for example, is much more appropriate for today’s more motivated and educated workers.

Bonus case 6-5

ORECK: AFTER THE STORM

Ten days after Hurricane Katrina tore through Long Beach, Mississippi, the Oreck Corporation reopened the storm-damaged plant where it assembled its widely advertised vacuum cleaners. It hauled in generators, imported trailers to house its workers, and was hailed as a local hero. Oreck’s plant, in an industrial park well north of the beach, did not flood, but it suffered damage, losing millions of dollars in inventory, according to Oreck president Thomas A. Oreck.

Then, 16 months later, Oreck announced it would close the plant and move its manufacturing out of the hurricane zone, to a new plant in Cookeville, Tennessee. The move caused an uproar across the region. Local newspapers and state officials, including Mississippi Senator Trent Lott, criticized the relocation.

The company argued it could not get enough insurance to cover the Gulf Coast plant, and could not hire enough skilled workers to replace those who never returned after the storm, mostly because they had nowhere to live. “The decision to move this plant was a very difficult one, a very painful one,” said Oreck, the company president. But in late 2006 “we came to realize that conditions on the Gulf Coast had changed in ways that made doing business here very difficult.”

Following the storm, finding workers was a challenge all along the coast. Signal International, which makes and repairs offshore drilling rigs, brought 200 welders and other craftsmen from India to work in its shipyard in Pascagoula, on the eastern end of Mississippi’s damaged coast.

Workers who are available are more expensive. High-paying jobs, first in federal recovery programs and then in construction, lured many workers from longtime employers. Fast-food restaurants were forced to pay 50% more than the minimum wage to attract workers.

The job market is good news for displaced workers, who will have no problem finding new jobs. Finding a new owner for the closed Oreck plant will be more difficult in the face of soaring commercial insurance rates. Because the Mississippi legislature passed a bill to limit rate increases for businesses, the remaining businesses face increases of 100%, rather than the 270% projected rate increase before the act was passed.

The company, which has its headquarters in New Orleans, is owned by private investors and the Oreck family. Oreck said he was grateful to his workers who had helped save the business by getting the plant up and running so quickly. Some government officials are suspicious of the move; perhaps because some tax breaks on the plant were due to expire soon.[v]

discussion questions for BONUS case 6-5

1. WHY WAS THE ORECK MOVE SO DIFFICULT TO ACCEPT?

2. What could the Oreck company have done differently?

3. What does this decision by Thomas Oreck say about his leadership skills?

4. Does Oreck have just cause for his decision? Should he have supporters for his decision to move to Tennessee? What decision would you have made considering the situation?

answers to discussion questions for BONUS case 6-5

1. WHY WAS THE ORECK MOVE SO DIFFICULT TO ACCEPT?

In a time of crisis, those who accept the challenge and work together to make the best of the circumstances are always going to be viewed more favorably. Oreck chose to relocate. The move was a blow to the local economy faced with many uphill battles to turn negative situations into more positive outcomes.

2. What could the Oreck company have done differently?

Most who criticized Oreck see a company owner, who has many resources available to him not putting these resources to good use. Oreck had an opportunity to not only restructure his business based on the disaster but to be a conduit to helping other businesses do the same. His leaving the location now adds to the problems for this area. Instead of contributing to its currents needs and future success, he chose to relocate from an economy that supported his business for many years.

3. What does this decision by Thomas Oreck say about his leadership skills?

Unfortunately, Oreck now has disappointed those who expected more from a company president. He chose to neglect his company mission with regard to the needs of the society that has an impact on his business. When companies are only interested in making profits and do not contribute to the betterment of the society they serve in, this sends a bad signal as to the real goals and mission of the company. In the process, Oreck is not seen as a great leader and has left many questions as to his business intentions both in the market he chose to leave and the new market in which he will soon operate.

4. Does Oreck have just cause for his decision? Should he have supporters for his decision to move to Tennessee? What decision would you have made considering the situation?

Oreck has his own agenda and it was revealed in his decision to leave Mississippi and relocate to Tennessee. While this is very frustrating to the local patrons and politicians of Mississippi, there will always be those who agree with his strategy to cut losses and get into a better situation. Oreck has shown one way to handle this disaster as a decision-maker for his company. This is a good time to get students to either to support the decision made by Oreck or to explain how they would have handled the situation given what resources and opportunities he might have had to work with, considering his stature and decision making latitudes as a company president.

Endnotes

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[i] Sources: Jeffrey Kluger and Dan Cray, “Management Tips from the Real Rocket Scientists,” Time Business, November 2005; Hutchinson, Harry, “Another Arm for Mars,” Mechanical Engineering; November 1, 2006; and Markels, Alex, “Guiding the Path to Mars,” U.S. News & World Report, Oct 30, 2006.

[ii] Sources: Justin Martin, “The Pixar Dream Factory,” Fortune Small Business, February 2003; and Richard Drezen, “Pixar’s Magic Touch; Upstart Animation Shop Became the Industry’s Benchmark,” The Washington Post, January 25, 2006.

[iii] Sources: Barbara Moses, “Bad Bosses and How to Handle Them,” Globe & Mail, May 6, 2002 and Cori Bolger, “When a Royal Pain Reigns, Morale, Productivity Suffer,” The Clarion-Ledger, October 14, 2005.

[iv] The Internet is a dynamic, changing information source. Web links noted in this manual were checked at the time of publication, but content may change over time. Please review the website before recommending it to your students.

[v] Sources: Leslie Eaton, “Vacuum Maker Hailed as Savior Quits Gulf Town,” The New York Times, January 15, 2007; J. R. Welsh, “Long Beach Plant Closing Feared,” Sun Herald (Biloxi MS), December 2, 2006; and Wally Northway, “Oreck Implementing New Call Center Plan, Closing Long Beach Facility,” Mississippi Business Journal, September 4, 2006.

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