RICHARD L. DAFT

RICHARD L. DAFTVanderbilt University

Eigh th E d i t i o n

T D-0 Q OVQ S O BSD

SOUTH-WESTERN

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A U S T R A L I A I B R A Z I L 1 C A N A D A I M E X I C O « S I N G A P O R E I S P A I N I U N I T E D K I N G D O M 1 U N I T E D S T A T E S

CONTENTS

ou

Manager's ShoptalkDo You Really Want to Be aManager? 18

New Manager Self-TestManager Role andReality 20

Unlocking InnovativeSolutions ThroughTechnology Click Here forLower Taxes 24

Unlocking InnovativeSolutions ThroughTechnology Of Railroadsand Web Sites 40

New Manager Self-TestEvolution of Style 48

Manager's ShoptalkEbbs and Flows ofManagement Innovations,1950-2000 51

8 f j j INTRODUCTION TO MANAGEMENT 2

Innovative Management for Turbulent Times 4

Manager's Challenge 5The Definition of Management 7

The Four Management Functions 8Planning 8 o Organizing 8 o Leading 9 n Controlling 9

Organizational Performance 10Management Skills II

Conceptual Skills 11 n Human Skills 11 n Technical Skills 12

D When Skills Fail 12

Management Types 13Vertical Differences 14 n Horizontal Differences 15

What Is It Like to Be a Manager? 16

Making the Leap: Becoming a New Manager 16 n Manager Activities 17

D Manager Roles 20

Managing in Small Businesses and Nonprofit Organizations 23Management and the New Workplace 25

Forces on Organizations 26 D The Innovative Response 26

D New Management Competencies 27 n Turbulent Times: Managing Crises

and Unexpected Events 28

Manager's Solution 29Discussion Questions 30Management in Practice: Experiential Exercise 31Management in Practice: Ethical Dilemma 32Case for Critical Analysis 32End notes 33

The Evolution of Management Thinking 36

Manager's Challenge 37Management and Organization 38Classical Perspective 40

Scientific Management 41 n Bureaucratic Organizations 42 '

D Administrative Principles 44

Humanistic Perspective 46Human Relations Movement 46 n Human Resources Perspective 47

D Behavioral Sciences Approach 50

Management Science Perspective 50Recent Historical Trends 52

Systems Theory 52 o Contingency View 53 n Total Quality Management 54

Innovative Management Thinking for Turbulent Times 54The Learning Organization 55 o Managing the Technology-Driven Workplace 56

Manager's Solution 59Discussion Questions 60Management in Practice: Experiential Exercise 61Management in Practice: Ethical Dilemma 61Case for Critical Analysis 62Endnotes 62

CONTINUING CASE 66

THE ENVIRONMENT OF MANAGEMENT 68

78

82

92

Cultural Leadership 94

The Environment and Corporate Culture 70

Manager's Challenge 71The External Environment 72

General Environment 73 o Task EnvironmentThe Organization-Environment Relationship 81

Environmental Uncertainty 81 n Adapting to the EnvironmentThe Internal Environment: Corporate Culture 85

Symbols 87 n Stories 87 D Heroes 87 o Slogans 88 n CeremoniesEnvironment and Culture 89

Adaptive Cultures 89 o Types of Cultures 90, Shaping Corporate Culture for Innovative Response

Managing the High-Performance Culture 93Manager's Solution 96Discussion Questions 97Management in Practice: Experiential Exercise 98Management in Practice: Ethical Dilemma 99Case for Critical Analysis 99Endnotes 100

Managing in a Global Environment 104

Manager's Challenge 105A Borderless World 106

Getting Started Internationally 108Outsourcing 109 D Exporting 109 n Licensing 110 n Direct Investing 111

o China Inc. 112

The International Business Environment 113The Economic Environment 114

Economic Development 115 n Infrastructure 115

Markets 115 a Exchange Rates 116The Legal-Political Environment 116

Political Risk and Instability 116 D Laws and RegulationsThe Sociocultural Environment 117

SocialValues 117 n Other Cultural Characteristics 121International Trade Alliances 122

GATT and the World Trade Organization 122 n European Uniono North American Free Trade Agreement (NAFTA) 124D Other Trade Alliances 125 n The Globalization Backlash 126

Multinational Corporations 126Managing in a Global Environment 127

Developing Cultural Intelligence 127 o Managing Cross-Culturally 129

Resource and Product

117

123

Manager's ShoptalkThe Ties That Bind 75

New Manager Self-TestManager Mind and theEnvironment 83

Unlocking InnovativeSolutions Through PeopleIt's Power (and Respon-sibility) to the People 95

Oo

Unlocking InnovativeSolutions ThroughTechnology Nighthawksto the Rescue 110

Manager's Shoptalk HowWellC lYou Play theCultui t Game? 120

New Manager Self-TestCultural Intelligence 128

Manager's ShoptalkChallenging the Boss onEthical Issues 145

New Manager Self-TestManager Courage 148

Unlocking InnovativeSolutions Through PeopleSouth Mountain Prac-tices CommunityEntrepreneurism 163

New Manager Self-TestImprovisation 176

Unlocking InnovativeSolutions Through PeopleWhite Dog Enterprises:Doing Well by DoingGood 186

Manager's ShoptalkHelpful Hints for Writingthe Business Plan 188

Manager's Solution 130Discussion Questions 131

Management in Practice: Experiential Exercise 132Management in Practice: Ethical Dilemma 133Case for Critical Analysis 133Endnotes 134

Ethics and Social Responsibility 138Manager's Challenge 139What Is Managerial Ethics? 140Criteria for Ethical Decision Making 142

Utilitarian Approach 142 • Individualism Approach 143

• Moral-Rights Approach 143 • Justice Approach 144Factors Affecting Ethical Choices 144

The Manager 145 i The Organization 149What Is Social Responsibility? 150Organizational Stakeholders 151

The Ethic of Sustainability and the Natural Environment 153Evaluating Corporate Social Responsibility 155

Economic Responsibilities 155 a Legal Responsibilities 156

• Ethical Responsibilities 156 • Discretionary Responsibilities 157Managing Company Ethics and Social Responsibility 157

Ethical Individuals 157 • Ethical Leadership 158

• Organizational Structures and Systems 159Ethical Challenges in Turbulent Times 162

The Business Case for Ethics and Social Responsibility 162

• Economic Performance 164Manager's Solution 165Discussion Questions 166Management in Practice: Experiential Exercise Ethical Work Climates 166Management in Practice: Ethical Dilemma 167Case for Critical Analysis 167Endnotes 168

6 Managing Small Business Start-Ups 172Manager's Challenge 173What Is Entrepreneurship? 174Entrepreneurship and the Environment 175

Entrepreneurship Today 176 • Definition of Small Business 179

• Impact of Entrepreneurial Companies 179Who Are Entrepreneurs? 181

Diversity of Entrepreneurs 182 • Personality Traits 183Social Entrepreneurship: An Innovative Approach to Small Business 185Launching an Entrepreneurial Start-Up 186

Starting with the Idea 187 • Writing the Business Plan 187

• Choosing a Legal Structure 189 • Getting Financing 190• Tactics for Becoming a Business Owner 191

Managing a Growing Business 194Stages of Growth 194 • Planning 195 • Organizing 196 • Leading 196i Controlling 197


CONTINUING CASE 204

PLANNING 206

Managerial Planning and Goal Setting 208

Manager's Challenge 209Overview of Goals and Plans 210Purposes of Goals and Plans 211Goals in Organizations 213

Organizational Mission 213 •Criteria for Effective Goals 217Planning Types 219

Management by Objectives 219

• Contingency Plans 222Planning in a Turbulent Environment 223

' Building Scenarios 224 • Crisis Planning 224Planning for High Performance 226

Traditional Approaches to Planning 227

to Planning 227Manager's Solution 230Discussion Questions 231Management in Practice: Experiential Exercise 232Management in Practice: Ethical Dilemma 232Case for Critical Analysis 233Endnotes 234

Goals and Plans 214 • Alignment of Goals 216

Single-Use and Standing Plans 221

High-Performance Approaches

New Manager Self-TestDoes Goal-Setting Fit YourManagement Style? 211

Manager's ShoptalkRegulating E-mail in theWorkplace 223

Unlocking InnovativeSolutions ThroughTechnology Fighting Firesat Symantec 229

no

239

Levels of Strategy 244

Strategy Formulation and Implementation 236

Manager's Challenge 237Thinking Strategically 238

What Is Strategic Management? 239 I Grand Strategy

I Global Strategy 240 I Purpose of Strategy 242 •The Strategic Management Process 246

Strategy Formulation Versus Implementation 247 • Situation AnalysisFormulating Corporate-Level Strategy 249

Portfolio Strategy 249 • The BCG Matrix 249Formulating Business-Level Strategy 251

Porter's Competitive Forces and Strategies 251Formulating Functional-Level Strategy 257Strategy Implementation and Control 258

Leadership 259 • Structural Design 261 I

Systems 261 I Human Resources 262Implementation During Turbulent Times 262

Global Mind-Set 262 • Corporate Culture 262 i Information Technology 263Manager's Solution 263Discussion Questions 264

247

Partnership Strategies 255

Information and Control

Unlocking InnovativeSolutions Through PeopleFour Seasons Hotels:Managing by the GoldenRule 254

New Manager Self-TestWhat Is Your StrategyStrength? 259

Manager's Shoptalk Tipsfor Effective StrategyImplementation 260


Unlocking InnovativeSolutions ThroughTechnology SouthwestUses Technology to Keep aHawk's Eye on Costs 277

Manager's ShoptalkDecision Biases toAvoid 284

New Manager Self-TestYour Decision-MakingBehavior 287

Managerial Decision Making 270Manager's Challenge 271Types of Decisions and Problems 272

Programmed and Nonprogrammed Decisions 272 • Certainty, Risk, Uncertainty,

and Ambiguity 273

Decision-Making Models 275

Classical Model 275 • Administrative Model 277 I Political Model 279

Decision-Making Steps 281

Recognition of Decision Requirement 282 I Diagnosis and Analysis of Causes 282

i Development of Alternatives 283 • Selection of Desired Alternative 283

Implementation of Chosen Alternative 285 I Evaluation and Feedback 285

Personal Decision Framework 286

Increasing Participation in Decision Making 288

The Vroom-Jago Model 288 • New Decision Approaches for Turbulent

Times 292

Manager's Solution 295Discussion Questions 295Management in Practice: Experiential Exercise 296Management in Practice: Ethical Dilemma 297Case for Critical Analysis 298Endnotes 299CONTINUING CASE 302

ORGANIZING 304

Manager's Shoptalk Howto Delegate 312

Unlocking InnovativeSolutions Through PeopleTeams Work at ImaginationLtd. 321

New Manager Self-TestAuthority Role Models 331

10 Designing Adaptive Organizations 306Manager's Challenge 307Organizing the Vertical Structure 308

Work Specialization 309 • Chain of Command 309 • Span of Management 311

i Centralization and Decentralization 313

Departmentalization 314

Vertical Functional Approach 316 a Divisional Approach 316 • MatrixApproach 318 • Team Approach 320 • The Virtual Network Approach 321• Advantages and Disadvantages of Each Structure 323

Organizing for Horizontal Coordination 326

The Need for Coordination 326 • Task Forces, Teams, and Project Management 327

• Reengineering 329Factors Shaping Structure 331

Structure Follows Strategy 332 I Structure Reflects the Environment 333

• Structure Fits the Technology 335

Manager's Solution 338

Discussion Questions 339

Management in Practice: Experiential Exercise 340Management in Practice: Ethical Dilemma 341Cases for Critical Analysis 341Endnotes 342

11 Managing Change and Innovation 346

Manager's Challenge 347Turbulent Times and the Changing Workplace 348Changing Things: New Products and Technologies 348

Exploration 349 • Cooperation 351 • Entrepreneurship 354

Changing People and Culture 357Training and Development 357 a Organization Development 358

Model of Planned Organizational Change 362

Forces for Change 363 • Need for Change 364

Implementing Change 365Resistance to Change 365 • Force-Field Analysis 367

• Implementation Tactics 368Manager's Solution 371Discussion Questions 372Management in Practice: Experiential Exercise 372Management in Practice: Ethical Dilemma 373Case for Critical Analysis 374Endnotes 374

New Manager Self-TestTaking Charge ofChange 356

Unlocking InnovativeSolutions Through PeopleThe Spies Who Came infrom the Cold 360

Manager's ShoptalkMaking Change Stick 366

12 Human Resource Management 378

Manager's Challenge 379Jhe Strategic Role of Human Resource Management 380

Environmental Influences on HRM 381Competitive Strategy 381 > Federal Legislation 384

The Changing Nature of Careers 385

The Changing Social Contract 385 I HR Issues in the New Workplace 386

Attracting an Effective Workforce 389Human Resource Planning 390 • Recruiting 391 • Selecting 395

Developing an Effective Workforce 399Training and Development 399 • Performance Appraisal 401

Maintaining an Effective Workforce 404Compensation 404 I Benefits 406 I Termination 406

Manager's Solution 407Discussion Questions 408


Unlocking InnovativeSolutions ThroughTechnology TopCodertothe Rescue 394

New Manager Self-TestPeople on the Bus 396

Manager's Shoptalk TheRight Way to Interview a JobApplicant 398

Oo

13 Meeting the Challenge of Diversity 414

Manager's Challenge 415Valuing Diversity 417

Dimensions of Diversity 418 I Attitudes Toward Diversity 419

The Changing Workplace 420Challenges Minorities Face 422 a Management Challenges 422

Current Debates About Affirmative Action 424The Glass Ceiling 425

The Opt-Out Trend 426 • The Female Advantage 427

Current Responses to Diversity 428Changing the Corporate Culture 428 • Changing Structures and Policies 430• Diversity Training 432

Manager's ShoptalkA Guide for ExpatriateManagers in America 421

New Manager Self-TestSubtle Biases 429

Unlocking InnovativeSolutions Through PeopleGoogle Chow 436

Defining New Relationships in Organizations 434

434 Sexual Harassment 434

Unlocking InnovativeSolutions ThroughTechnology Can SuccessBe Guaranteed in Affairs ofthe Heart? 466

New Manager Self-TestSelf-Confidence 468

Manager's ShoptalkWhat's Your CrisisEQ? 469

New Manager Self-TestInterpersonal Patterns 493

Unlocking InnovativeSolutions Through PeopleThe De La Salle SpartansWin with Soul 497

Manager's Shoptalk AreYou a CharismaticLeader? 507

• Communication Differences 437

438

Employee Network Groups 439

Emotional IntimacyGlobal Diversity 435

Selection and Training 436Diversity in a Turbulent World

Multicultural Teams 438 iManager's Solution 440Discussion Questions 441Management in Practice: Experiential Exercise 441Management in Practice: Ethical Dilemma 442Case for Critical Analysis 443Endnotes 444CONTINUING CASE 448

LEADING 450

14 Dynamics of Behavior in Organizations 452

Manager's Challenge 453Organizational Behavior 454Attitudes 454

Components of Attitudes 455 I High-Performance Work Attitudes 457

• Conflicts Among Attitudes 459

Perception 460Perceptual Selectivity 460 • Perceptual Distortions 461 • Attributions 462

Personality and Behavior 463Personality Traits 464 I Emotional Intelligence 465 I Attitudes and Behaviors

Influenced by Personality 467 I Person-Job Fit 472

Learning 473The Learning Process 473 • Learning Styles 474 a Continuous Learning 475

Stress and Stress Management 476Type A and Type B Behavior 476 • Causes of Work Stress 477 • Innovative

Responses to Stress Management 478Manager's Solution 479Discussion Questions 480Management in Practice: Experiential Exercise 481Management in Practice: Ethical Dilemma 484Case for Critical Analysis 484Endnotes 485

15 Leadership 488

Manager's Challenge 489The Nature of Leadership 490Leadership for Contemporary Times 490

Level 5 Leadership 491 I Women's Ways of LeadingLeadership Versus Management 493Leadership Traits 494Behavioral Approaches 495

Ohio State Studies 495 • Michigan Studies 496 • The Leadership Grid 496

Contingency Approaches 498Hersey and Blanchard's Situational Theory 498• Matching Leader Style to the Situation 501• Substitutes for Leadership 504

492

Fiedler's Contingency TheoryPath-Goal Theory 502

500

Leading Change 505

Charismatic and Visionary Leadership 505 •

Power and Influence 508

Position Power 509 • Personal Power 509

Tactics 510Enduring Leadership Approaches 511

Servant Leadership 512 a Moral Leadership 512




Transformational Leaders 507

Interpersonal Influence

16 Motivation 520

Manager's Challenge 521The Concept of Motivation 522Foundations of Motivation 524

Traditional Approach 524 • Human Relations Approach 524 I Human

Resource Approach 524 • Contemporary Approach 524

Content Perspectives on Motivation 525

Hierarchy of Needs Theory 525 I ERG Theory 526 I Two-Factor Theory 528

• Acquired Needs Theory 529

Process Perspectives on Motivation 530

EquityTheory 530 • Expectancy Theory 532 • Goal-Setting Theory 533

Reinforcement Perspective on Motivation 535

Reinforcement Tools 535 • Schedules of Reinforcement 536

Job Design for Motivation 539

Job Simplification 540 • Job Rotation 540 • Job Enlargement 541

• Job Enrichment 541 • Job Characteristics Model 541

Innovative Ideas for Motivating 543

Empowering People to Meet Higher Needs 545 • Giving Meaning to Work 546




New Manager Self-TestEmployee Engagement 523

Manager's Shoptalk TheCarrot-and-Stick Contro-versy 539

Unlocking InnovativeSolutions Through PeopleNucor: Giving People aStake in the Business 544

17 Communication 556

Manager's Challenge 557

Communication and the Manager's Job 558What Is Communication? 559 • The Communication Process 559

Communicating Among People 561

Communication Channels 561 • Communicating to Persuade and Influence

Others 563 • Nonverbal Communication 564 • Listening 565

Organizational Communication 568

Formal Communication Channels 568 I Team Communication Channels 572

• Personal Communication Channels 573

Communicating During Turbulent Times 577

Open Communication 577 • Dialogue 578 I Crisis Communication 579• Feedback and Learning 579

Unlocking InnovativeSolutions Through PeopleManagers at Kwik-Fit LearnThat It Pays to Listen 566

New Manager Self-TestPersonal Networking' 574

Manager's ShoptalkLeaping over LanguageBarriers 582

Managing Organizational Communication 580Barriers to Communication 581 • Overcoming Communication Barriers


582

Unlocking InnovativeSolutions ThroughTechnology MySQL:Creating a Twenty-First-Century GlobalTeam 601

New Manager Self-TestManaging Conflict 613

Manager's ShoptalkHow to Run a GreatMeeting 618

Manager's ShoptalkCyberslackers Beware: TheBoss Is Watching 635

Unlocking InnovativeSolutions Through PeopleControlling With Love, NotFear 645

New Manager Self-TestFreedom Versus "Regulation 647

18 Teamwork 592

Manager's Challenge 593Teams at Work 594

What Is a Team? 594 a Model of Work Team Effectiveness 595

Types of Teams 596

Formal Teams 596 i Self-Directed Teams 598

• Teams in the New Workplace 599

Team Characteristics 602Size 602 • Diversity 603 • Member Roles 603

Team Processes 605Stages of Team Development 605 I Team Cohesiveness 607

i Team Norms 609

Managing Team Conflict 611

Balancing Conflict and Cooperation 611 • Causes of Conflict 612 • Styles to

Handle Conflict 613 • Negotiation 615

Work Team Effectiveness 617Productive Output 617 • Satisfaction of Members 617 • Capacity to Adapt

and Learn 619Manager's Solution 619Discussion Questions 620Management in Practice: Experiential Exercise 620Management in Practice: Ethical Dilemma 621Case for Critical Analysis 622Endnotes 623CONTINUING CASE 626

CONTROLLING 628

630

634 Feedback Control 634

19 Managerial and Quality Control

Manager's Challenge 631The Meaning of Control 632Organizational Control Focus 633

Feedforward Control 633 a Concurrent Control

Feedback Control Model 636Steps of Feedback Control 636 a Application to Budgeting

Financial Control 640

Financial Statements 640 a Financial Analysis: Interpreting the Numbers

The Changing Philosophy of Control 643

638

641

Total Quality Management 646

TQM Techniques 646 • TQM Success Factors 650Trends in Quality and Financial Control 650

International Quality Standards 651 I New Financial Control Systems 651

Innovative Control Systems for Turbulent Times 652

Open-Book Management 652 • The Balanced Scorecard 654

a New Workplace Concerns 656Manager's Solution 657Discussion Questions 658Management in Practice: Experiential Exercise 659Management in Practice: Ethical Dilemma 659Case for Critical Analysis 660Endnotes 661

20 Information Technology and E-Business 664

Manager's Challenge 665Information Technology Has Changed Everything 666

Boundaries Dissolve; Collaboration Reigns 666

a People Do Better Work 667 a Things Are More Efficient 667

a Employees Are Engaged 668 a People Can Suffer from Information

Overload 669

The Evolving World of Information Technology 670

t A New Generation of IT 670 a Applying New IT Within Organizations 671

Types of Information Systems 671Data Versus Information 672 a Operations Information Systems 672

a Management Information Systems 673

The Internet and E-business 676E-Business Strategies 678 a E-Marketplaces 681 a Enterprise Resource

Planning Systems 682 a Customer Relationship Management 685 a Turning

Data and Information into Knowledge 686


New Manager Self-TestBrain Hemispheric Domi-nance 669

Manager's ShoptalkPutting PerformanceDashboards to Work 675

Unlocking InnovativeSolutions Through PeopleGrant). Hunt Co. Likes thePersonal Touch 684

21 Operations and Value Chain Management 694

Manager's Challenge 695The Organization as a Value Chain 696

Manufacturing and Service Operations 697 a Operations Management and

Competitive Strategy 698 a The Integrated Enterprise 699

Designing Operations Management Systems 701Product and Service Design 701 a Procurement 703 a Facilities Layout 704a Technology Automation 707 a Facility Location 710 a CapacityPlanning 711

Inventory Management 711The Importance of Inventory 712 a Economic Order Quantity 713a Material Requirements Planning 714 a Just-in-Time Inventory 714a Logistics and Distribution Management 716

New Manager Self-TestPolitical Skills 702

Manager's Shoptalk AGerman Factory Shows Howto Be Fast and Flexible 706

Unlocking InnovativeSolutions ThroughTechnology At PrairieStonePharmacy, Smaller ls<Better 708

Lean Manufacturing and Productivity 716

Lean Manufacturing 716 a Measuring Productivity 717a Improving Productivity 718

Manager's Solution 720Discussion Questions 720Management in Practice: Experiential Exercise 721Management in Practice: Ethical Dilemma 721Case for Critical Analysis 722Endnotes 723CONTINUING CASE 726

Appendix: Video Case LibraryGlossary 778Indexes 791

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RICHARD L. DAFT