Management Principles
v. 1.1
This is the book Management Principles (v. 1.1).
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Table of Contents
About the Authors................................................................................................................. 1
Acknowledgments................................................................................................................. 3
Dedications............................................................................................................................. 6
Preface..................................................................................................................................... 7
Chapter 1: Introduction to Principles of Management............................................... 10
Case in Point: Doing Good as a Core Business Strategy............................................................................ 13
Who Are Managers?..................................................................................................................................... 17
Leadership, Entrepreneurship, and Strategy............................................................................................ 23
Planning, Organizing, Leading, and Controlling ...................................................................................... 31
Economic, Social, and Environmental Performance ................................................................................ 37
Performance of Individuals and Groups.................................................................................................... 43
Your Principles of Management Survivor’s Guide ................................................................................... 49
Chapter 2: Personality, Attitudes, and Work Behaviors ............................................ 63
Case in Point: SAS Institute Invests in Employees.................................................................................... 66
Personality and Values................................................................................................................................ 70
Perception..................................................................................................................................................... 88
Work Attitudes............................................................................................................................................. 96
The Interactionist Perspective: The Role of Fit ...................................................................................... 102
Work Behaviors.......................................................................................................................................... 105
Developing Your Positive Attitude Skills ................................................................................................ 119
Chapter 3: History, Globalization, and Values-Based Leadership.......................... 121
Case in Point: Hanna Andersson Corporation Changes for Good ......................................................... 123
Ancient History: Management Through the 1990s................................................................................. 127
Contemporary Principles of Management .............................................................................................. 135
Global Trends.............................................................................................................................................. 141
Globalization and Principles of Management......................................................................................... 149
Developing Your Values-Based Leadership Skills .................................................................................. 155
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Chapter 4: Developing Mission, Vision, and Values .................................................. 161
Case in Point: Xerox Motivates Employees for Success ......................................................................... 164
The Roles of Mission, Vision, and Values................................................................................................ 167
Mission and Vision in the P-O-L-C Framework....................................................................................... 172
Creativity and Passion............................................................................................................................... 180
Stakeholders............................................................................................................................................... 191
Crafting Mission and Vision Statements................................................................................................. 198
Developing Your Personal Mission and Vision....................................................................................... 206
Chapter 5: Strategizing.................................................................................................... 216
Case in Point: Unnamed Publisher Transforms Textbook Industry .....................................................219
Strategic Management in the P-O-L-C Framework ................................................................................ 224
How Do Strategies Emerge? ...................................................................................................................... 233
Strategy as Trade-Offs, Discipline, and Focus......................................................................................... 237
Developing Strategy Through Internal Analysis.................................................................................... 248
Developing Strategy Through External Analysis.................................................................................... 260
Formulating Organizational and Personal Strategy With the Strategy Diamond ..............................272
Chapter 6: Goals and Objectives..................................................................................... 281
Case in Point: Nucor Aligns Company Goals With Employee Goals......................................................283
The Nature of Goals and Objectives ......................................................................................................... 286
From Management by Objectives to the Balanced Scorecard ............................................................... 291
Characteristics of Effective Goals and Objectives................................................................................... 300
Using Goals and Objectives in Employee Performance Evaluation ......................................................307
Integrating Goals and Objectives with Corporate Social Responsibility..............................................314
Your Personal Balanced Scorecard .......................................................................................................... 322
Chapter 7: Organizational Structure and Change...................................................... 329
Case in Point: Toyota Struggles With Organizational Structure........................................................... 331
Organizational Structure .......................................................................................................................... 335
Contemporary Forms of Organizational Structures............................................................................... 344
Organizational Change .............................................................................................................................. 349
Planning and Executing Change Effectively............................................................................................ 361
Building Your Change Management Skills.............................................................................................. 368
Chapter 8: Organizational Culture ................................................................................ 370
Case in Point: Google Creates Unique Culture ........................................................................................ 372
Understanding Organizational Culture ................................................................................................... 376
Measuring Organizational Culture........................................................................................................... 380
Creating and Maintaining Organizational Culture................................................................................. 389
Creating Culture Change ........................................................................................................................... 405
Developing Your Personal Skills: Learning to Fit In............................................................................... 410
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Chapter 9: Social Networks............................................................................................. 413
Case in Point: Networking Powers Relationships................................................................................... 416
An Introduction to the Lexicon of Social Networks............................................................................... 419
How Managers Can Use Social Networks to Create Value ..................................................................... 425
Ethical Considerations With Social Network Analysis........................................................................... 437
Personal, Operational, and Strategic Networks...................................................................................... 445
Mapping and Your Own Social Network.................................................................................................. 452
Chapter 10: Leading People and Organizations.......................................................... 459
Case in Point: Indra Nooyi Draws on Vision and Values to Lead .......................................................... 462
Who Is a Leader? Trait Approaches to Leadership ................................................................................. 466
What Do Leaders Do? Behavioral Approaches to Leadership................................................................ 472
What Is the Role of the Context? Contingency Approaches to Leadership .........................................477
Contemporary Approaches to Leadership............................................................................................... 487
Developing Your Leadership Skills .......................................................................................................... 502
Chapter 11: Decision Making.......................................................................................... 506
Case in Point: Bernard Ebbers Creates Biased Decision Making at WorldCom ...................................508
Understanding Decision Making .............................................................................................................. 512
Faulty Decision Making ............................................................................................................................. 528
Decision Making in Groups ....................................................................................................................... 533
Developing Your Personal Decision-Making Skills................................................................................. 541
Chapter 12: Communication in Organizations ........................................................... 543
Case in Point: Edward Jones Communicates Caring ............................................................................... 545
Understanding Communication ............................................................................................................... 548
Communication Barriers........................................................................................................................... 554
Different Types of Communication.......................................................................................................... 567
Communication Channels......................................................................................................................... 575
Developing Your Personal Communication Skills.................................................................................. 586
Chapter 13: Managing Groups and Teams ................................................................... 591
Case in Point: General Electric Allows Teamwork to Take Flight......................................................... 593
Group Dynamics......................................................................................................................................... 596
Understanding Team Design Characteristics.......................................................................................... 607
Organizing Effective Teams ...................................................................................................................... 623
Barriers to Effective Teams....................................................................................................................... 630
Developing Your Team Skills.................................................................................................................... 633
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Chapter 14: Motivating Employees ............................................................................... 635
Case in Point: Zappos Creates a Motivating Place to Work ................................................................... 638
Need-Based Theories of Motivation......................................................................................................... 641
Process-Based Theories............................................................................................................................. 650
Developing Your Personal Motivation Skills .......................................................................................... 671
Chapter 15: The Essentials of Control .......................................................................... 674
Case in Point: Newell Rubbermaid Leverages Cost Controls to Grow...................................................676
Organizational Control.............................................................................................................................. 679
Types and Levels of Control...................................................................................................................... 690
Financial Controls...................................................................................................................................... 696
Nonfinancial Controls................................................................................................................................ 706
Lean Control ............................................................................................................................................... 714
Crafting Your Balanced Scorecard ........................................................................................................... 721
Chapter 16: Strategic Human Resource Management .............................................. 727
Case in Point: Kronos Uses Science to Find the Ideal Employee ........................................................... 730
The Changing Role of Strategic Human Resource Management in Principles of Management........733
The War for Talent..................................................................................................................................... 740
Effective Selection and Placement Strategies......................................................................................... 746
The Roles of Pay Structure and Pay for Performance............................................................................ 753
Designing a High-Performance Work System......................................................................................... 760
Tying It All Together—Using the HR Balanced Scorecard to Gauge and Manage Human Capital,
Including Your Own................................................................................................................................... 767
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About the Authors
Mason Carpenter
Mason A. Carpenter (Ph.D., 1997, UT Austin) is the M.
Keith Weikel Professor of Leadership in UW Madison’s
Wisconsin School of Business. He is responsible for the
MBA and Executive MBA courses in business, corporate,
and global strategy, and the curriculum offered through
Wisconsin’s Strategic Leadership Institute. He is
coauthor of Strategic Management: A Dynamic Perspective,
second edition, with Dr. Gerry Sanders and published by
Prentice Hall. His research concerns corporate
governance, top management teams, social networks,
and the strategic management of global start-ups, and is
published widely in top management and strategy
journals. He is Associate Editor of the Academy of
Management Review and the Strategic Management Area
Editor for Business Expert Press, and serves on a handful of editorial boards. His
teaching accomplishments include MBA Professor of the Year, notoriety as one of
the two most popular professors in several Business Week MBA program polls, the
Larson Excellence in Teaching Award from the School of Business, and, most
recently, a Distinguished Teaching Award from the University of
Wisconsin–Madison.
Talya Bauer
Talya Bauer (Ph.D., 1994, Purdue University) is the Gerry
and Marilyn Cameron Professor of Management at
Portland State University. Dr. Bauer is an awardwinning teacher who specializes in teaching
organizational behavior, management, power and
influence, and negotiations, as well as training and
development at the graduate and undergraduate level.
She conducts research about relationships at work.
More specifically, she works in the areas of leadership,
selection, and new employee onboarding, which have
resulted in dozens of journal publications. She has acted
as a consultant for a variety of government, Fortune
1000, and start-up organizations. Dr. Bauer is involved
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in professional organizations and conferences at the national level, such as serving
on the Human Resource Management Executive Committee of the Academy of
Management and SIOP Program Chair and member-at-large for SIOP. She is the
editor of Journal of Management and is on the editorial boards for the Journal of
Applied Psychology and Industrial and Organizational Psychology: Perspectives on Science
and Practices, was recognized as one of the most published authors of the 1990s, and
is a Fellow of SIOP and APS.
Berrin Erdogan
Berrin Erdogan (Ph.D., 2002, University of Illinois at
Chicago) is the Express Employment Professionals
Endowed Professor at Portland State University. Dr.
Erdogan is an award-winning teacher who teaches
management, organizational behavior, and human
resources management. Her research interests focus on
individual attachment to organizations through
fairness, leader-subordinate relations, contextual
factors such as organizational culture, and personorganization fit. Her work has been published in
journals such as Academy of Management Journal, Journal
of Applied Psychology, and Personnel Psychology. She has
conducted managerial seminars on the topics of
motivation, organizational justice, performance
appraisals, and training and development, and has worked as a corporate trainer.
She serves on the editorial boards of Journal of Applied Psychology, Journal of
Management, Journal of Organizational Behavior, and Personnel Psychology.
About the Authors
2
Acknowledgments
We want to thank Margaret Lannamann for doing such a great job keeping all the
balls in the air, and Jeff Shelstad and Eric Frank for having the vision and
persistence to bring Unnamed Publisher into being and for their faith in us as
among the first Unnamed Publisher authors. Many thanks, too, to the talented
Andrea Meyer, who was an invaluable resource in providing background content
for several of our chapters. We also thank Elsa Peterson for her tireless and amazing
developmental editing, Brett Guidry for helping to keep everything on track, and
Sharon Koch and Evelyn Forte for their expertise and contagiously positive
perspectives. We further thank Dean Scott Dawson and Portland State University,
and Michele Yoder and the University of Wisconsin–Madison for supporting our
work.
We would also like to thank the following colleagues whose comprehensive
feedback and suggestions for improving the material helped make this a better text:
Erin Atchley, University of Tennessee at Knoxville
Laura Bulas, Central Community College
Val Calvert, San Antonio College
Sylvia Charland, Fitchburg State College
Dexter Davis, Niagara University
Matt DeLuca, Baruch College
Charles Englehardt, St. Leo University
Jeff Fahrenwald, Rockford College
Carolyn Fausnaugh, Florida Institute of Technology
Don Furman, SUNY New Paltz/SUNY OCCC
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Shelly Gardner, Augustana College
Hugh Graham, Loras College
Bruce Gillies, California Lutheran University
Susan Greer, Horry-Georgetown Technical College
Dewey Hemphill, Crichton College
Kirk Heriot, Columbus State University
Betty Hoge, Bridgewater College
Gerald Hollier, University of Texas at Brownsville
Kathleen Jones, University of North Dakota
Claire Kent, Mary Baldwin College
Daniel Kent, Northern Kentucky University
Anita Leffel, The University of Texas at San Antonio
Damian Lonsdale, University of South Dakota
Daniel Morrell, University of South Carolina
Francine Newth, Providence College
Roy Pipitone, Erie Community College
Michael Provitera, Barry University
Linda Sargent, University of Texas Pan American
Acknowledgments
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Mukesh Sud, Augustana College
Nicholas Twigg, Coastal Carolina University
Nkuma Uche, Central Community College
Donna Waldron, Manchester Community College
Carolyn Youssef, Bellevue University
The authors also appreciate the efforts of those instructors who have contributed to
the project with their work on supplementary materials. Anita Leffel from the
University of Texas at San Antonio developed the Student Quizzes and the Test Item
File, and Laura Bulas from Central Community College created the PowerPoint slide
presentations.
In addition, two instructors assisted the development of this material by using it in
their classrooms. Their input, along with their students’ feedback, has provided us
with valuable feedback and confirmation that the material is effective in the
classroom:
Dexter Davis, Niagara University
P. Gerald Shaw, Dean College
The cadre of copy editors, graphics designers, and technical designers involved in
this first-of-its-kind global publishing project also garner our heartfelt thanks.
Finally, this book would not have the incredible value and meaning it does without
the support and interest of the faculty and students who have commented on early
iterations and will serve to make this “their book” in the many years to come.
Acknowledgments
5
Dedications
Mason Carpenter
This book is dedicated to my wife, Lisa, and energetic boys, Zachary and Wesley.
The content is inspired by my students, coauthors, professional and business
colleagues, and publishers who, together, will create the better times we will all
enjoy in the years to come.
Talya Bauer
This book is dedicated to my husband, Horst, and our children, Nicholas and
Alexander, who supported this project from the start and who helped me celebrate
when it was done.
Berrin Erdogan
This book is dedicated to my husband, Emre, for being a constant source of support
for my career and to our son, Devin, for making me appreciate the importance of
leading a balanced life.
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Preface
Welcome to the textbook revolution (you will have to read on to learn more about
the revolution that you have joined in using this material for your class). We are
happy to have you on Carpenter, Bauer, and Erdogan’s Principles of Management
team! Given that Principles is likely to be one of the first management courses, if not
one of the first business courses, that students take, our objective in developing this
material was to provide students and instructors with a solid and comprehensive
foundation on the fundamentals of management. Each of the 16 chapters is
comprehensive but succinct, and action-oriented but not busy (as in busy work).
Moreover, the book and supplements have been written in a direct and active style
that we hope students and instructors find both readily accessible and relevant.
Delivering on Our Promise
So how are we delivering on these promises? Let’s consider the top three ways cited
by instructors and students. First, your Principles book is organized around the wellestablished planning, organizing, leading, and controlling framework (or, simply,
P-O-L-C). The first three chapters introduce you to the managerial context, while
the remaining 13 chapters are mapped to one of the four P-O-L-C sections. The P-OL-C structure provides a number of benefits. Each chapter opens with a brief
discussion of how the chapter topic fits in P-O-L-C. For instructors, the use of P-O-LC as an overarching framework helps with the organization of class material,
development of the class calendar, and making choices about adding or removing
readings and real-life examples. It also provides them with an invaluable reference
point at the beginning and conclusion of each class session to share with students
“where we’ve been, and where we’re going next.” Pedagogically, this is a simple yet
powerful tool to aid and promote student learning. For students, the P-O-L-C
typology provides them with an enduring framework for processing and organizing
just about everything they will learn and experience, during and beyond their
classroom-based education, related to the management of organizations.
Second, there are three underlying themes carried through all the chapters. These
themes are strategic thinking, entrepreneurial thinking, and active management.
Strategy, for instance, is explicitly concerned with the determinants of high
performance. Importantly, you will find that we treat performance using the notion
of the triple bottom line—the idea that economic performance allows individuals
and organizations to perform positively in social and environmental ways as well.
The triple bottom line is financial, social, and environmental performance.
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The entrepreneurial dimension reflects an underlying and growing trend that
shows that students and instructors see themselves as entrepreneurs and active
change agents, not just managers. By starting fresh with an entrepreneurial/change
management orientation, we provide an exciting perspective on the principles of
management.
Finally, starting with the opening chapter, we incorporate an active management
perspective to show how leaders and leadership are essential to personal and
organizational effectiveness and effective organizational change. Moreover, the
concluding section of each chapter is focused on the assessment and development
of particular management skills. Students and instructors are active as leaders at an
increasingly early age and are sometimes painfully aware of the leadership failings
they see in public and private organizations. It is the leader and leadership that
bring Principles together.
Third, your author team is bringing a truly interdisciplinary perspective to your
Principles course. The book that is the foundation for how you learn about, study,
and teach Principles is titled Principles of Management: A Behavioral Approach, and
behavioral has very important implications for our emphasis on skills and decision
making, coupled with the strategic, entrepreneurial, and leadership orientations.
Your authors are award-winning teachers who couple a deep knowledge and
experience about the book’s conceptual underpinnings with a sincere appreciation
for experiential teaching approaches.
Thank You for Joining the Revolution
In adopting Carpenter, Bauer, and Erdogan, you are joining the revolution that is
otherwise known as Unnamed Publisher, our partner and publisher. For this we
thank you. The people at Unnamed Publisher and your author team share a
common vision about the future of management education that is based on powerful
but fun and simple-to-use teaching and learning tools. Moreover, Unnamed Publisher
gives you—you the student and you the instructor—the power to choose. Our 16
chapters are written using a “modular” format with self-contained sections that can
be reorganized, deleted, “added to,” and even edited at the sentence level. Using
our build-a-book platform, you can easily customize your book to suit your needs
and those of your students. An extensive author-prepared instructors’ manual and
excellent set of PowerPoint slides provide teaching support to instructors. A test
item file developed using state-of-the-art assessment techniques supports faculty in
evaluating student performance.
Only with Unnamed Publisher learning platforms do you have the power to choose
what your Principles book looks like, when and how you access your Principles
Preface
8
material, what you use and don’t use, when it will be changed, how much you pay
for it, and what other study vehicles you leverage. These innovative study vehicles
range from book podcasts, flash cards, and peer discussion groups organized in
social network formats. Nowhere else on the planet can this combination of userfriendliness, user choice, and leading edge technologies be found for business
education and learning.
Thank you for joining the revolution—please spread the word!
Mason, Talya, and Berrin
Preface
9
Chapter 1
Introduction to Principles of Management
Figure 1.1
Managers make things happen through strategic and entrepreneurial leadership.
© 2010 Jupiterimages Corporation
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WHAT’S IN IT FOR ME?
Reading this chapter will help you do the following:
1. Learn who managers are and about the nature of their work.
2. Know why you should care about leadership, entrepreneurship, and
strategy.
3. Know the dimensions of the planning-organizing-leading-controlling (PO-L-C) framework.
4. Learn how economic performance feeds social and environmental
performance.
5. Understand what performance means at the individual and group levels.
6. Create your survivor’s guide to learning and developing principles of
management.
We’re betting that you already have a lot of experience with organizations, teams,
and leadership. You’ve been through schools, in clubs, participated in social or
religious groups, competed in sports or games, or taken on full- or part-time jobs.
Some of your experience was probably pretty positive, but you were also likely
wondering sometimes, “Isn’t there a better way to do this?”
After participating in this course, we hope that you find the answer to be “Yes!”
While management is both art and science, with our help you can identify and
develop the skills essential to better managing your and others’ behaviors where
organizations are concerned [Show Less]