The Association on Employment Practices and Principles (AEPP

)
Proceedings of the 18th Annual International Conference 2009 ISBN 1-878583-64-6

Conference Theme: Modern Workforce Challenges, Responsibilities and Rights in the Global Community

September 29 – Oct. 1, 2010 San Francisco, CA

Edited by:

John P. Keenan, Ph.D The Institute for Leadership and Global Education (ILGE)

www.aepp.net

© 2010 Association on Employment Practices and Principles (AEPP). All rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without the prior permission of the AEPP.

Published by the Association on Employment Practices and Principles, Orchard Park, NY, USA, October 2010.

ISBN 1-878583-64-6 2

AEPP 2010 Conference Proceedings Table of Contents
Contents i. Acknowledgments ii. Letter from the President iii. The Association On Employment Practices And Principles (AEPP) iv. 18th Annual International Conference Organizers For AEPP 2009 v. AEPP 2010 Conference Program vi. Call For Papers – AEPP 2011, 19th Annual International Conference FULL PAPERS 1. Improving Organizational Performance Ali M. Al-Khouri, Emirates Identity Authority, United Arab Emirates 2. Linking Leadership For Reducing Performance Inhibiting Worldplace Dynamics: Implications for Organizational Effectiveness Brian A. Altman and Mesut Adkere, University of Wisconsin-Milwaukee 3. Leaders and Listening: An Empirical Exploration of Nonprofit Leaders Jyoti Bachani, St. Mary’s College of California and Mary Vradelis, Consultant, Second Wind Consulting, Berkeley, CA 4. The Determinants of Trust Among the Turkish Consumers in Online Retail Banking (ROB) Dababrata Chowdhury, SLM, University of Plymouth Business School, Vipul Mudgal,,Orange France Telecomms,Plymouth, UK, Lynne Butel, University of Plymouth Business School Drake Circus, Plymouth, UK, and Murat Kasimoglu, Canakkale Onsekiz Mart University,Biga,Turkey 5. A Research Devoted to the Perception of University Students on Diversity Murat Colak and Guler Tozkporan, Dokuz Eylul University, Turkey 6. The Role of Situation Awareness (SA) in Command Decision Making: A Phenomenological Examination of the Statue of Liberty/Ellis Island Decision Makers on September 11, 2001 Diane H. Dayson and Jean Gordon, Walden University 7. The Incompatibility of the Dual-Concern Model and Conflict Management Styles Scales Serkan Dolma,Yagizhan Yaza and Oslem Yavas, Istanbul University, Turkey 24 38 Page 8 9 10 12 14 19

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8. The Black Swans and Retirement Strategies: Is “Buy and Hold Best? Barry Doyle, Robert Mefford, and Nicholas Tay, University of San Francisco 9. What Financial Risk Managers Can Learn From Six Sigma Quality Programs Barry Doyle, Robert Mefford, and Nicholas Tay, University of San Francisco 10. Labor Reform Through Executive Orders and EFCA: The Impact on Workers Today Anne M. Fiedler, Barry University, and Mark A. Aeschleman, Caterpillar Inc. 11. Business Education, Social Responsibility, and Non-Profit Opportunities Phil Man and Anne Fiedler, Barry University 12. A Hostile Sexual Environment: How Hostile Does it Have to Be? Henry Findley, Eva Dodd-Walker, Lee Vardman, Ping He, and Robert Wheatley, Troy Univesity 13. The Nature and Purpose of Decision Making James R. Forcier, University of San Francisco 14. Long Term Incentive Plans: Not a Panacea for Executive Compensation William J. Heisler, Troy University 15. Temporary Staffing Agencies: State-of-the-Art Practices of Personnel Selection Ghardir Ishqaidef, University of Kansas 16. Modern Workforce Challenges: Leadership and Partnership in Education Marilyn O. Jenkins, Barry University and Jia Wang, Texas A & M University 17. Succession Planning: A Modern Workforce Challenge in Public Administration Marilyn O. Jenkins, Barry University and Kirsten K. Loutzenhiser, Troy University

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18. Organizational and Career Expectations of Turkish College Students Tugba Karabulut, Istanbul Commerce University, Turkey 19. Teachers’ Cultural Values and Conflict Approaches Aylin Kirisci and Ali Ilker Gumuseli, Yildiz Technical University, Istanbul Turkey 20. Modern Workforce Challenge: Appropriately Evaluation Employees” Job Performance Jack N. Kondrasuk, Nick Slepnikoff, Justin Gomez, Jessica Peters, and Danielle Castr, University of Portland 21. Facilitating Workforce Adaptation To Changing Global Work Realities Mitchell L. Marks, San Francisco State University 22. Is Glass Ceiling In Turkey Thicker Than It Seems? A Study of ISE 100 (Istanbul Stock Exchange) Zeynep Duren, Istanbul University and S. Ahmet Mentes, European University of Lefke, Turkey 23 Changing Face of Women Workforce: A Qualitative Study on Women Entrepreneurs in Istanbul Zeynep Hale Oner, Dogus University, Istanbul, Turkey 24. Transactional and Transformational Leadership and Their Effects on Individual and Organization Marie-Elene Roberge and Ozge Ucan 25. Managerial Responsibility for Meritocracy – Perspectives on the Pay System in Japan Tomokazu Sakumoto, Okinawa International University, Japan 26. The Effects of Downsizing: A Case Study of an IT Company in Turkey Alaeddin Tileylioglu, Çankaya University, Turkey 27. Internalization vs Externalization of Human Capital Strategy: A Trust Climate Perspective Chih-Yuan Wang and Nien-Chi Liu, National Central University, Graduate Institute of Human Resource Management, Taiwan

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DEVELOPMENTAL PAPERS 5

28. Procedural Justice and Its Effects on Organizational Outcomes Nida H. Afridi and Fatima Junaid, Institute of Management, Pakistan 29. Integrated Workforce Enrichment Solution for Modern Workforce Challenges Ripple Gupta and Sudhir Rai, Prin L.N. Weleingkar Institute of Management Development and Research, Mumbai, India 30. The Status of Parking Lot Gun Laws: Annie Get Your Gun 1 Marsha Katz, Governors State University, and Helen LaVan, Yvette Lopez, Wm Marty Martin, Charles Naquin, DePaul University 31. Volunteerism and Gender in Terms of Ethics of Care Cigdem Kirel and Ilke Oruc, Anadolu University, Turkey 32. Employees in Performing Nonprofits: Workers Adrift in the Ephemeral Arts Paul Lorton, Jr. University of San Francisco 33. Building Sustainable Capacity Development Through Participatory Governance and Sub-National Capacity Development: Why Development and International Support Failures in Africa? Call for Action Israel Jacob Massuanganhe, Center of Excellence in Public Policies And Local Governance, University Agostinho Neto, Angola 34. The Impact of the Economic Crisis on Youth Employment in Slovenia Jasmina Pavlin, Mojca Bernik, and Miha Maric, University of Maribor, Slovenia 35. ’Being Human’ – The Essence of Being a Successful Human Resource Professional
Ranjan Phadke, Pune India

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36. Gender, Organizational Justice, Job Attitudes and Absenteeism
Betty Jane Punnett, Priscilla Glidden, and Dion Greenidge, University of Wes

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Indies, Barbados ABSTRACTS 37. Corporate Innovation: Growing New Business Through New 298

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Keenan. Inc. Marilyn Cash Mathews. Kinawa International University. S. Seguros Bolivar. Strategic Management of Corporate Social Responsibility and Workforce Issues in the Global Arena Michele V. Emerging Trends in Leadership and Management Education and Development John P. "The Effect of Privatization on Efficiency and Working Values: Turkey's Cement Industry Example" by Murat Colak and Oguz Kara 2.. Saint George. Emirates Identity Authority. Challenges and Opportunities in American Higher Education Raj Parikh and James Klein. Pate. New Trends of Human Resource Management in Public and Business Organizations of Pakistan M. Colombia 40. University of Karachi.A. Southern Oregon University 44. International Perspectives on Responsible Employment Pracatices and Principels in Times of Economic Uncertainty John P. 1. Thailand. Raj Parikh. University of North Dakota 41. University of Hawaii at Manoa.Business Incubators.A. Gee. University of San Francisco 45. Seguros Bolivar S. Challenges and Solutions Roger (Rongxin) Chen. Network for Teaching Entrepreneurship. Ali M. CA 304 299 300 301 302 305 307 308 FOLLOWING ARTICLES WERE INADVERTANTLY OMITTED FROM THE PROCEEDINGS and SHOULD HAVE BEEN INCLUDED. An Examination of the Information Processing and Emotional Tendencies of Software Entrepreneurs Larry E. The Institute for Leadership and Global Education. Sutada Mekrungruengkul. adn Lynn Michelle Thomas 7 . Spain. Barry Doyle. Sonia Ghumann. Networker. Al-Khouri. Nonthaburi. San Implementation Road Map for High-Impact. Cathy Taylor. United Arab Emirates. National Institute of Development Administratio.. Utah. Colomba 43. Low-Cost Employee Assistance Strategies for the Bolivar Group Experience Debra McKinney and Javier Sanchez-Rueda. Abuzar Wajidi. WE APOLOGIZE FOR THE OMISSION. Keenan. "A Case Study About Workplace Bullying and Harassment from a Non-Supervisory Basis" by Heather Zeng. Nuria Calvo. San Francisco. Tomokazu Sakumot. Pakistan WORKSHOPS/PANELS 42. Institute for Leadership and Global Education (ILGE). University of Wisconsin-Parkside 39. Bogota. Bogota. Debra McKinney Gehman. How Youth Entrepreneurship Fosters Creativity in High School Students and May Help You in Teaching College Undergraduates Krista Katsantonis.. Southern Oregon University. University of Coruna. University of San Francisco 38.

Tim Loney. We also gratefully acknowledge numerous reviewers and/or session chairs. Hank Findley. Robert Preziosi. 8 . Anne Walsh. Thank you all. We also owe special recognition to Dean Mike Duffy of the University of San Francisco’s College’s School of Business and Professional Studies for his grant to help make this year’s Conference a success. Conference President and Program Chair. The AEPP gratefully acknowledges the assistance of the AEPP 2010 conference committee. Alev Efendioglu.ACKNOWLEDGMENTS The AEPP wishes to acknowledge and thank Dr. Deniz Kebabci. We also owe thanks for the ongoing support of the Institute for Leadership and Global Education (ILGE) for AEPP. with special thanks to Tugba Karabulut. Ginette Roberge. Marilyn Jenkins. Askin Keser. Bill Heisler. of the University of San Francisco who worked tirelessly for the success of the Eighteenth Annual International Conference of the Association on Employment Practices and Principles (AEPP). Eugene Muscat. Gleb Nikitenko. and all others involved. Lynne Bennington..

29 – Oct. Our conferences are deliberately limited in number of participants to foster a supportive and friendly environment. Keenan. networking and social interaction among academics. who has demonstrated ongoing commitment to AEPP over many years. and shopping in one of world’s most beautiful cities and favorite tourist destination. and also to his colleague Dr. 1. President. Special emphasis this year will include encouraging “practitioner” engagement in varied track areas in addition to our traditional scholar emphasis. 2010. Alev Efendioglu.. We also sponsor the International Journal for Responsible Employment Practices and Principles (IJREPP). Dean of the Business and Professional Studies at the University of San Francisco for financial support. The Council on Employee Responsibilities and Rights (CERR) Editor-in-Chief. Conference President and Program Chair. AEPP international conferences focus on providing a national and international forum for professional development. We are very fortunate this year to be sponsored by the University of San Francisco with special thanks to Mike Duffy. California.LETTER FROM THE PRESIDENT Dear Conferees. consultants. San Francisco. This year's conference theme is "Modern Workforce Challenges. We will look forward to meeting you again next year. I look forward to personally greeting you all and my best wishes to you for a wonderful conference here in San Francisco. please contact the Editor-in-Chief Dr John Keenan at cerr@institute-leadership-global. Ph.D. people and performance within the context of the higher levels of ethical principles and practices. John P. The Association focuses on organizational concepts and practices for the effective managing of organizations. executives and practicing managers. and would love to hear from you if you wish to support next year's program planning to help make the 2011 AEPP great again. arts. Attendees will have an excellent selection of hotels to choose from including those close to the University. close to downtown. Responsibilities. The University setting is ideal and our location in San Francisco provides ready access to the culture. Selected papers will be invited to be submitted for review for possible publication in the official publication arm of CERR and the Association – the International Journal for Responsible Employment Practices and Principles (IJREPP). Hawaii. our official journal that continues in the tradition of our 22 year history of accomplishments and success in developing and editing the premier journal in this field. Welcome to the 18th Annual International Meeting of the Association on Employment Practices and Principles (AEPP) in San Francisco. Association on Employment Practices and Principles (AEPP) Executive President. You will find the early call for papers in these proceedings. Our venue this year is at the beautiful campus of the University of San Francisco. For further information on IJREPP. fine cuisine. IJREPP 9 . Sept. and Rights in the Global Community”.org I encourage you to participate fully in this year's conference and to note in your diaries the dates for the 2011 conference in Honolulu.

After the conclusion of twenty years of publication success.THE ASSOCIATION ON EMPLOYMENT PRACTICES AND PRINCIPLES (AEPP) How it all started The Council on Employee Responsibilities and Rights (CERR) is a duly established and registered non-profit 501(c)(3) organization founded in 1985 by Dr. 10 . with Dr. Chimezie Osigweh. Norfolk State University. After much discussion and debate. This is now the official top-tier publication. and Associate Professor of Management and Founding Director of Leadership Programs at the University of Wisconsin Madison's School of Business. One of the branches. and promotes concrete problem solving to bridge the gap between organizational concepts and practices in the effective managing of organizations. people and performance. CERR has replaced it with the newly launched International Journal for Responsible Employment Practices and Principles (IJREPP). a name change for CERR was proposed to better reflect the purpose. Executive Vice President on the Board of Directors of CERR. Keenan oversees CERR's diverse initiatives in collaboration with CERR's Board of Directors and holds the position of Editor-in-Chief of the International Journal for Responsible Employment Practices and Principles (IJREPP) as well as AEPP President. and image to be projected to the public and business communities. Virtually all topics and issues confronting diverse organizations and businesses are addressed by members. evaluates existing and new methods. managers and professionals at all organizational levels. John P. School of Business. organizational psychology. Dr. Virginia Distinguished Professor of Management. succeeded Dr. it was decided in 1992 to maintain the original name of CERR but to create two branches: one branch would include scholars and practitioners while the other branch would include practicing executives. Keenan. labor relations. Thousands of businesses have been assisted by AEPP members in dealing with the many problems and opportunities that exist in the ever changing realm of today's business and organizational environments. He and a small group of fellow faculty members felt that the timing was right and the interest level present to create an association of scholars and practitioners focused on both a scholarly as well as a pragmatic approach to the changing nature of employer/employee responsibilities and rights. human resource management. Birth of AEPP In 1990. the development of a widely respected top-tier journal . the Association on Employment Practices and Principles (AEPP) is an international organization of scholars and practitioners dedicated to providing a forum which encourages conceptual and empirical research.Employee Responsibilities and Rights Journal (ERRJ) and holding an annual meeting. In 1997. entrepreneurship. goals. Osigweh moving on with other professional activities. technology and innovation management. The association reinforces the need to include the integration of an ethical and value-driven dimension in all areas addressed. Dr. Areas of specialized interests vary widely inclusive of ethics and philosophy. The approach adopted included an appeal to a broad-based and interdisciplinary membership base. and advanced leadership and management education and research. Some of the top scholars and practitioners in the field who shared an active interest in these issues were recruited and helped shaped the beginning stages of CERR. Osigweh to become CERR's Executive President.

in-depth exchange of ideas. Hawaii. the conference encourages: an interchange of ideas between practitioners and academics. Within the context of an informal. and stimulating environment. Some of the top scholars and practitioners in the field who shared an active interest in these issues were recruited and helped shape the beginning stages of the organization. Miami Beach. Next year’s conference will be held in Honolulu. relaxed. Baltimore. Boston. close-knit interaction. San Francisco. AEPP holds an annual international meeting each year and currently attracts scholars and practitioners from across the globe. and academic and personal growth. and Chicago. Dr. and Montreal. Keenan became AEPP's Founding President and in 2008 AEPP is celebrating its sixteenth anniversary. San Diego. Past conferences have been held in major cities as New York City. Canada. New Orleans. relationship building. As the conference arm of CERR.In 1992. 11 .

and Rights in the Global Community" September 29 – Oct 1. University of San Francisco. The Institute for Leadership and Global Education (ILGE). Michigan Robert Preziosi. Riverdale. The Institute for Leadership and Global Education (ILGE). FL AEPP 2010 Proceedings Sponsor The Institute for Leadership and Global Education (ILGE) List of Reviewers Brian Altman Lynne Bennington Andy Li-Yueh Chen Dababrata Chowdhury Bobbie Dillon Alev Efendioglu Ann Fiedler Hank Findley Bill Heisler Marilyn Jenkins Tugba Karabulut Jahanvash Karim Marsha Katz Deniz Kebabci Askin Keser Jack Kondrusak Tim Loney Suleyman Ments 12 . San Francisco. Orchard Park. Dubai. Ft. Dearborn. Manhattan College. RMIT University. Responsibilities. University of Michigan – Dearborn. CA John P Keenan. UAE Alev Efendioglu. San Francisco. 2010. Melbourne. Nova Southeastern University.18TH ANNUAL INTERNATIONAL CONFERENCE ORGANIZERS FOR AEPP 2009 "Modern Workforce Challenges. NY Richard FitzPatrick. NY Ben Lev. Australia Amalia De Jesus. CA University of San Francisco Conference Chair Alev Efendioglu Conference Host University of San Francisco. CA AEPP Executive Committee Lynne Bennington. Lauderdale. San Francisco.

Eugene Muscat Gleb Nikitenko Hale Oner Ginnette Roberge Rizwan Saleem Cathy Taylo Alaeddin Tileylioglu Anne Walsh Michael Whittey 13 .

Eva DoddWalker. Job Attitudes and Absenteeism (D) Modern Workforce Challenge: Appropriately Evaluating Employees’ Job Performances (F) Session 2 3:45pm – 5:15pm Hank Findley. Priscilla Glidden. Nick Slepnikoff. Heisler. President of AEPP Alev Efendioglu . September 30th Session 3 8:30am to 10:00 Abuzar Wajidi William J. and Danielle Castro Changing face of women workforce: A qualitative study on women entrepreneurs in Istanbul (F) Gender. Conference President and Program Chair Session 1 2:00 pm – 3:30pm Hale Oner Betty Punnett. Kondrasuk. Organizational Justice. Ping He. Ahmet Menteş and Zeynep Duren Cathy Taylor and Heather Zeng A Hostile Sexual Environment: How hostile does it have to be? (F) Is Glass Ceiling in Turkey Thicker Than It Seems? A Study on ISE 100 (Istanbul Stock Exchange) (F) A Case Study About Workplace Bullying and Harassment From a Non-Supervisory Basis (F) Welcome Reception/Social – 5:15pm – 7:00pm Room MC 252 DAY II– Thursday. Jessica Peters. and Robert Wheatley S.2010 CONFERENCE PROGRAM DAY I – Wednesday September 29 Room MH 250 Opening Session 1:00am – 1:45 Dean Mike Duffy – USF College of Business and Professional Studies John Keenan. Marilyn Room: MH 230 New Trends of Human Resource Management in Public and Business Organizations of Pakistan (D) 14 . Lee Vardaman. Justin Gomez. Dion Greenidge Jack N.

and Henry Findley Murat Colak and Guler Tozkoporan William Heisler Room: MC 251 Faculty Recruiting: Do’s and Don’ts in the Search for Talent (F) A Research Devoted to the Perception of University Students on Diversity (F) Long-Term Incentive Plans: Not a Panacea for Executive Compensation (F) Session 8 10:30am to 12:00 Barry Doyle. and Nicholas Tay Room: UC222 Black Swans and Retirement Strategies: Is “Buy and Hold Best”? (F) 15 . Mojca Bernik. Robert Mefford. and Impact of Economic Crises on Youth Employment in Miha Marič Slovenia (D) Marie-Elene Roberge and Ozge Ucan Transactional and Transformational Leadership And Their Effects on Individuals and Organizations (D) Session 5 8:30am to 10:00 Nuria Calvo Room: UC222 Analysis of the effects of contraction in demand on maintaining knowledge at consulting companies (F) A Research On Determining The Relations Of Corporate Governance Between The Corporate Performance And Reputation (F) Linking Leadership for Reducing Performance Inhibiting Workplace Dynamics: Implications for Organizational Effectiveness (F) Ebru Karpuzoglu Brian Altman and Mesut Akdere Session 6 10:30am to 12:00 Marilyn Ohlsen Jenkins and Jia Wang Aylin Kirisci and Ali Ilker Gumuseli Monika Hudson and EdenReneé Pruitt Room: MH 230 Modern Workforce Challenges: Leadership and Partnership in Education (F) Teachers’ Cultural Values and Conflict Approaches (F) Intersecting Identities: Impacts on Workplace Behaviors (A) Session 7 10:30am to 12:00 Donald Lee Vardaman. and Hank Findley Best Practices in Talent Selection and Talent Management (PANEL) Duration 1hour Session 4 8:30am to 10:00 Jyoti Bachani and Mary Vradelis Room: MH 251 Leaders and Listening: An Empirical Exploration of Nonprofit Leaders (F) Jasmina Pavlin. Jr. Anne Fiedler.Ohlsen Jenkins.

LowCost Employee Assistance Strategies. 2001 (F) The Incompatibility of the Dual-Concern Model and Conflict Management Styles Scales (F) Diane Dayson. and Barry Doyle Room: MH230 Organizational Expectations and Career Expectations of Turkish College Students (F) Challenges and Opportunities in American Higher Education (PANEL) Durations 1hr Session 12 3:30pm – 5:00pm Roger (Rongxin) Chen Room: UC222 Corporate Innovation: Growing New Business through New Business Incubators. and David Milen Serkan Dolma. James Klein.Alaeddin Tileylioglu The Effects of Downsizing: A Case Study in IT Company in Turkey (F) Building Sustainable Capacity Development Through Participatory Governance and SubNational Capacity Development: Why development and international support failure in Africa? (D Israel Jacob Massuanganhe Lunch – 12:00 – 1:30pm Room MC 250 Keynote Speaker: Dean Mike Duffy. Jean Gordon. Yag zhan Yazar. Raj Parikh. and Ozlem Yavas Session 10 1:30pm – 3:00pm Room: UC222 Strategic Management of Corporate Social Responsibility and Workforce Issues in the Global Arena: A Developmental Paper (D) Influence of Workplace Religiosity on Transfer of Training in Banking Sector (F) Succession Planning: A Modern Workforce Challenge in Public Administration (F) Michele V. School of Business and Professional Studies . The Bolivar Group Debra McKinney 16 . Gee Yalman Ansari Marilyn Ohlsen Jenkins and Kirsten Kim Loutzenhiser Session 11 3:30pm – 5:00pm Tugba Karabulut John Keenan. Forcier (F) Room: MH230 The Nature and Purpose of Firm Decision-Making The Role Situation Awareness (SA) in Command Decision Making: A Phenomenological Examination of Statue of Liberty/Ellis Island Decision Makers on September 11. Challenges and Solutions (A) An Implementation Road Map for High-Impact.USF Session 9 1:30pm – 3:00pm James R.

and Debra McKinney Gehman Room: MC251 Modern Workforce Challenges. Social Responsibility.Sarwar Chaudhary e-Idealized Influence Attributed Leadership Development (A) Welcome Reception/Social – 5:15pm – 7:00pm Room MC 251 DAY III– Friday. Wm Marty. Martin Charles Naquin Nida Afridi and Fatima Junaid Room: UC222 The Status of Parking Lot Gun Laws: Annie Get Your Gun (D) Procedural Justice and Its Effects on Organizational Outcomes (D) 17 . Al-Khouri. Fiedler and Mark A. Helen LaVan. Yvette Lopez. and Nonprofit Opportunities (F) Employees in Performing Nonprofits: Workers Adrift in the Ephemeral Arts (D) Volunteerism and Gender in Terms of Ethics of Care (D) Session 16 10:30am – 12:00 Marsha Katz. Aeschleman Room: UC222 Temporary Staffing Agencies: State-of-the-Art Practices of Personnel Selection (F) Labor Reform through Executive Orders and EFCA: The Impact on Workers Today (F) Facilitating Workforce Adaptation to Changing Global Work Realities (F) Mitchell Marks Session 15 10:30am – 12:00 Phil Mann and Anne M. Fiedler Paul Lorton Cigdem Kirel and Ilke Oruc Room: MC251 Business Education. Sutada Mekrungruengkul. and Rights in the Global Community (PANEL) Duration 1hr Session 14 8:30am – 10am Ghadir Ishqaidef Anne M. Responsibilities. and Rights in the Global Community (D) International Perspectives on Modern Workforce Challenges. Ali M. Tomokazu Sakumoto. Responsibilities. Nuria Calvo Babío. October 1 Session 13 8:30am – 10am Ripple Gupta and Sudhir Rai John Keenan.

Amalia De Jesus. Chowdhury. Marilynn Cash Mathews. Robert Mefford. Externalization of Human Capital Strategy: A Trust Climate Perspective (F) The Determinants of Trust among the Turkish Consumers in Online Retail Banking (ORB) (F) Improving Organisational Performance (D) Chih-Yuan Wang and NienChi Liu Dababrata N.5hrs John Keenan. and Nicholas Tay Murat Colak Tomokazu Sakumoto Session 19 3:30pm – 5pm Room: MC251 How Youth Entrepreneurship Fosters Creativity in High School Students and May Help You in Teaching College Undergraduates (Workshop) Duration 1.Ranjan Phadke ‘Being Human’ .The Essence of Being a Successful Human Resource Professional (D) Lunch/Conference Awards – 12:00 – 1:30pm Room MC 250 Session 17 1:30pm – 3pm Room: MC251 Internalization vs. Vipul Mudgal. and Lynne Butel Ali Al-Khouri Session 18 1:30pm – 3pm Room: UC222 “What Financial Risk Managers Can Learn from Six Sigma Quality Programs” (F) The Effect of Privatization on Efficiency and Working Values: Turkey’s Cement Industry Example (F) Managerial Responsibility for Meritocracy: Perspectives on the Japanese Wage System (F) Barry Doyle. and Raj Parikh ENJOY SAN FRANCISCO RESTAURANTS AND ENTERTAINMENT!!! 18 .5hrs Krista Katsantonis and Deborah Reinerio Session 19 3:30pm – 5pm Room: UC222 Emerging Trends in Leadership and Management Education and Development (PANEL) Duration 1. Murat Kasimoglu.

Hawaii Location Reasonably Priced Room Rates Keynote Speaker on Conference Theme Special Night on the Town Conference Theme: Global Organization of the Future: New Workforce Challenges and Opportunities Modern organizations. while protecting the interests and needs of employees at all levels.CALL FOR PAPERS/PROPOSALS The Association on Employment Practices and Principles (AEPP) Nineteenth Annual International Conference Oct. social responsibility and justice. We also sponsor the International Journal for Responsible Employment Practices and Principles (IJREPP). For managers and leaders. layoffs. and changes in the makeup of society and the workforce which place additional pressure on all employers to be more astute in ensuring that they develop management systems and practices. unemployment. we particularly welcome submissions that deal with any aspect of modern workforce challenges in the global community. Ph. 19 . Also. delocalization of firms. and promote an awareness of ethics. work-life balance. HI Sponsored By: University of Hawaii at Manoa Raj Parikh.. as well as employment practices that enable them to not only compete but thrive. Southern Oregon University The Association on Employment Practices and Principles (AEPP) and its parent. changing times include the continuation of technological advances. government regulation. there is a need to improve organizational efficiency. We host annual international conferences that are personal. new regulations on employment. Conference President and Program Chair. Honolulu. supportive and democratic. Special emphasis this year will include encouraging “practitioner” engagement in varied track areas in addition to our traditional scholar emphasis. faced with increased domestic competition and seeking growth opportunities. 5-7. 2011 University of Hawaii at Manoa. multi-cultural issues. our official journal that continues in the tradition of our 21 year history of accomplishments and success in developing and editing the premiere journal in this field. Special Paper Awards Best Paper Award Best Practitioner Award Best Paper Based On a Dissertation Award Best Case Studies Paper Award Highlights From Honolu Honolulu. inclusive. for 2011. Topics of interest are broad in nature including global organizations. have become more and more global in their focus. While submissions in all areas outlined below are welcome. global economic and competitive issues. focus on the quality of life in work organizations. This creates human resource challenges – where to find or how to train a workforce comfortable operating in this global environment characterized by multiple cultures and economic uncertainty. the Council on Employee Responsibilities and Rights (CERR). boundary-less careers.D.

Technology Management. Issues might be approached from the internal and micro point-of-view. Conflict. economic development effects. cross cultural leadership. Bullying. Health Strategy. operations strategy. accounting. special problems of entrepreneurs (including small businesses). leadership legacy. facility location and layout. Feminist. Compensation. and venture capital management. Employee and Employer Rights and Responsibilities: Ethics. strategies. Labor and Employee Relations. Performance Management. Entrepreneurship and Innovation: The development and management of new businesses. leading in times of economic crises. Benefits. and economics. health insurance. Health Policy. Entrepreneurship. Privacy. Public Administration. International Comparative Studies. Business and Society. Alliances and Ventures. Emotions at Work. Corporate Governance. Knowledge Management. Collective Bargaining. Eclectic Paradigms and Perspectives: Postmodernist. Psychological Contracts. rights to privacy. organizational leadership. Outsourcing. with respect to relationships to current employment practices and principles. as well as inter-cultural dynamics. Production/ Operations Management: The design. to the more external and macro aspect. 20 • • • • • • • • • • • . virtual leadership. leadership education. Leadership: Strategic leadership. Education and Training. capacity planning. and other areas. leadership assessment. production and inventory control. such as inter-organizational alliances and relationships. training and development. Strategic Management: Corporate Social Responsibility. such as employee relations and HR practices. CSR.executive compensation. New Methodological Approaches. innovative health programs in the health industry. Finance/Accounting/Economics: The traditional disciplines of finance. health strategy. Strategic Human Resource Management. or Critical Perspectives and Insights. Equal Opportunity and Affirmative Action. Marginalization and Discrimination. just-in-time production systems. and employee health benefits and programs. Industry Studies. Health Insurance and Health Programs: Health policy. new venture ideas. process technologies. operation and control of production systems in both manufacturing and service organizations. case studies. Content Areas/Tracks • Management and Organization Studies: Organizational Behavior. International Trade Agreements. leadership models and frameworks. International health programs and health policy submissions are encouraged. innovation strategies Policy and Administration: Regulation. ethical dimensions. Organization Change Management. Human Resource Planning. Papers and proposals from both academics and practitioners are welcomed. Human Resource Management and Development: Management Development. Organization Theory. Curriculum/Instruction: Issues and challenges associated with teaching in the above areas as well as specific strategies or innovations.

ethical issues. ALL SUBMISSIONS MUST CONFORM TO THESE GUIDELINES IN ORDER TO GO FOR REVIEW. CRM implementation strategies. Education Sector: Administrative leadership. terrorism and its causes. Information Technology: Development and operation of computer-based information systems related to human and organizational factors. research and development. privacy. decision making and strategic management related to public sector organizations. innovative educational initiatives. continuing education. Only full. In addition to formal page submissions. employee abuse.• • • • • • Human Resource Management in the International Context: Contemporary issues and practices in HRM related to the evolving international context. Bullying. teacher education and professional development. higher education.” based on audience feedback and response will be invited to submit their papers for publication consideration in a special issue of the International Journal for Responsible Employment Practices and Principles (IJREPP). formal public and private partnerships. provides specific details for the proper format for submissions. Submissions to the developmental thread should be extended abstracts of 1000-2000 words (excluding references). SUBMISSIONS (Either complete papers. case studies in exemplary customer relations management programs. complete papers (no abstracts) may be submitted and will be double-blind peer reviewed. Coordinators of such proposals should include a 21 . forms of violence. developmental papers. strategic approaches to control. The main focus of the sessions will be on discussion rather than on a standard presentation. All developmental papers will be presented together in the same sessions during the conference. Authors of “best papers. roundtables. and Terrorism: The causes and consequences of violence in the workplace. The purpose of developmental papers is to allow authors to discuss work that is still in its developmental stage. we invite submission of proposals for panels. For Proposals. For Developmental Papers. and related topics. secondary education. property rights. www. Accepted papers will be published in the Conference Proceedings “CD and website Publication”. and related areas. or workshops. strategic planning in marketing and development. customer relations management. policy making and decision making. terrorism and its impact on business and governmental institutions. access. cross-cultural studies. Public Sector: Labor relations in public management. curriculum and instruction. symposium. bullying. A comment should be included at the end of the extended abstract on how the authors expect to advance the paper between now and the conference. Marketing and Customer Relations Management: Marketing management.aepp. public personnel management leadership.net. training and development issues and perspectives. strategies to control terrorism. The AEPP website. social psychological factors impacting violence. or proposals) For Papers. primary education. Violence in the Workplace.

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Figure 1 illustrates the differences between the two sides of the brain. Our thinking is shaped by our very existence in our world.ae ABSTRACT This article explores some thoughtful considerations for management related to understanding and improving the overall performance of individuals and teams in organisations. our thinking styles and sensory preferences.IMPROVING ORGANISATIONAL PERFORMANCE Ali M. LEFT-BRAIN AND RIGHT BRAIN MANAGEMENT If our life experiences and culture shape our mental models of the world then our own unique thinking styles and sensory preferences will shape the way we know the world . ali. Al-Khouri. It reflects thoughts and learnings from several implementations of small and large projects in public sector... Abu Dhabi. needs and behaviours. skills. tools and frameworks and how they can be used to improve overall organisational performance.alkhouri@emiratesid. what influences people to do what they do. and particularly.. the ability to achieve and maintain high performance and productivity in organisations is a key challenge facing management today. We also reflect our learnings and make sense of the presented theories in relation to our experiences. INTRODUCTION In today's dynamic and rapidly changing workplace and globalised economy. to explain the diversified behaviours. team building. Our experience shows that management need to give higher attention towards understanding individual differences. 2. UAE.. Emirates Identity Authority. Such understanding is considered important in helping individuals develop effective learning styles that is aligned with organisational objectives and needs. development of organisational performance is associated with the development personal performance. beliefs and values that motivate our behaviours and impact the overall learning process we may decide to follow. motivation. as well as their criticality to enable them to understand and manage organisational complexity. performance. Most of us have one side of our brains dominant which influence the choice of thinking and learning styles. Keywords: competency development. 24 . knowledge and experience [1][2][3]. [4] A useful theory for management to always keep in mind is the Right-Brain and Left-Brain thinking. these styles and preferences are the ones we have always been comfortable with and familiarity is comforting. A variety of theories regarding human nature and motivation in particular are explored here. However. It also sheds light on various theories. 1. Our primary learning is touching the subject of perceptions.

to engage both sides of the brain) to analyse and identify elements that contribute towards the achievement and maintenance of highest performance and productivity levels see also [6]. concerning itself with cash flow and the dire consequences of mismanagement of finances. it often comes at the risk of long-term sustainability and growth. It was found vital that we constantly promote this way of thinking to enhance the overall performance of projects.. and sequential thinking. The right side is often based on intuitive. It processes information in an analytical and sequential way. The left-brain and right-brain model goes beyond mere issues of management style but it reflects organisational thinking and how it approaches problem solving. The left side has an exasperating devotion to numerical figures. Our experience in projects also shows that it is important that we follow a 'balanced-thinking' (i. emotional decisions. with rigorous planned strategies. 3. the most significant learning from the different projects was about how things like beliefs and perceptions can inhibit us from learning and development or in other words. it processes information in an intuitive way. BELIEFS AND PERCEPTIONS Perhaps.e. then putting them together to get the whole. analysis. staff with balanced and mixed thinking skills can produce more efficient and innovative organisational outcomes [7].Figure 1: Left and Right Brain thinking model Numerous management styles can originate from the left or the right side of the brain[5]. looking first at the whole picture then filling in details. and holistic thinking i. how our 25 . and can better addresses the situational uniqueness of projects and conquer the challenges of contemporary projects. looking first at the pieces. While this approach can yield immediate success in the short run. Organisations aiming to improve productivity. etc. synthesis..e. time-bound logic. details.

that are not subject to conscious perception or control but that often affect conscious thoughts and behavior. 26 . it is strongest when it comes from our inner values [8]. understanding motivation should empower us to better understand ourselves and others. and thoughts i.. Figure 3 uses an iceberg metaphor to facilitate the understanding of Freud's topographical theory. Thus. such as memories or repressed desires. showing how behaviour can determine our beliefs. • Preconscious: memories or feelings that are not part of one's immediate awareness but that can be recalled through conscious effort • Unconscious: part of mind containing elements of psychic makeup.. We correlate this to Freud's topographical model [9] that represents the configuration of the mind. in turn. enable us to change and/or further improve our behaviours and performance. sensations. and needs. how beliefs may be part of our unconscious mind and play the role of regulating many of our behaviours and actions we take in life.e. The model makes three classifications of the human mind: • Conscious: awareness of one's environment and one's own existence. This should. habits. Figure 2: Motivation Factors To it is also important for management to understand the association between our unconscious mind and how it may determine particular motivated behaviours i.beliefs and perceptions may inhibit us from doing any right brain thinking. Motivation is a hidden power that stems from a deep rooted belief that activates and drives behavior and gives it direction. We can verbalize about our conscious experience and think about it in a logical fashion. part of the mind that holds what we are aware of. Figure 2 demonstrates different motivation layers.e. It shows that more than 90% of an iceberg is beneath the water (preconscious and unconscious) whereas only 10% of it is visible (conscious).

g. Our mental models and maps are 'configured' by the very nature of our experiences. whereas the Australian Aboriginal notion of time is very holistic! Neither are right or wrong they are just different". we can utilise our abilities and potentials towards escalating our talents. inability to deal with change.80% Figure 3: Mental iceberg of Freud's view of the human mind Using Freud’s topographical model of the mind. etc. achieving our goals and attaining significant success in almost every dimension of our progressive life. substances from these two levels can easily slip into the unconscious mind. [10] A survey of global employers in 2005 [11] revealed that: • • • • More than 50% of employees lack the motivation to keep learning and improving. The western concept of time is very linear. It is our unconscious mind that effects what we can or cannot accomplish. and • Primary derailleur of top executives: a lack of impulse control. 4 in 10 people cannot work cooperatively. communicate. By challenging and changing some of our beliefs and perceptions. and requires more than just possessing the right technical skills. 4. Subsequently. In today's competitive knowledge-driven organisations. Only 19% of entry level-applicants have enough adequate self-discipline for their jobs. Today's leaders need to 27 . the unconscious substances (e. and we reflect on each based on our experience.. THEORIES AND PRACTICE "We all have preferred unconscious and conscious habits of thought that influence how we make decisions. learn and interact with others…. they are 'configured' by our cultures. 70% of all change initiatives fail due to people issues-inability to lead. The following section explores various theories that represent the most common held views as to what motivates behaviour. Rationally..15% Unconscious level Unconscious is allotted 75% . leadership is more important than ever.Thoughts Conscious level Perceptions Only 10% of an iceberg is visible ( conscious) The preconscious is allotted approximately Memories Preconscious level Fears Violent Motives Immoral Urges Selfish Needs Stored Knowledge Unacceptable Sexual Desires Irrational Wishes Shameful Experiences 10% . lack of teamwork. unconscious fears and previous experiences) can very much direct our behaviours and instinctively make several decisions for us. we can see that a substance may pass back and forth between the conscious and preconscious mind. unwillingness to take initiative.

improve productivity. values. See also Figure 4. we need to recognise people as individuals and to work with their individual differences.1 Theory X and Theory Y We have always believed that the main success factor for us in both our own personal life and at work is the ability to develop a positive environment. expectations. promote greater cooperation and team work and increase retention of top talent. All of us are individuals. we need first to treat people as individuals and appreciate their personal differences. 4. The different learning lessons from our projects indicate that in order to build such an environment. People in Theory X have negative perceptions of other people's potential and attitudes. increase morale and motivation. We each change over time as well. 28 . and goals. Table 1 provides further examples of the perceptions of the two theories. We have different personalities.recognise their own feelings and those of others to motivate themselves and effectively manage relationships. and assume that other people can be self-directing and seek responsibility. Figure 4: Theory X & Theory Y Our personal philosophies often influence the motivational approaches we normally select to deal with such differences. whereas those in Theory Y have an opposite view. we have different needs. Therefore. Such philosophies or attitudes towards others can be mapped to Theory X and Theory Y [12]. We think differently. wants.

4. managers should closely supervise employees Mangers should create strict work rules and implement a well defined system of rewards and punishments to control employees Theory Y Employees are not inherently lazy. Many methods have been developed to explain why people choose to follow particular behaviours. Negative leadership styles are based on the manager's ability to withhold items of value from employees. our perceptions. Two categories of motivation theories are covered next. Negative Motivation [13] As we have stated this earlier. employees will do what is good for the organisation. and will try to do as little as possible To ensure that employees work hard. Given the chance. Maslow's theory. we need to look at such motivators which would probably help us modify our perceptions and thereafter our behaviours. Content theories are concerned with what motivates behaviour.2 Maslow's Hierarchy of Needs Theory (Content Theory) 29 . Process theories are concerned with how the content of motivation influences behaviour. dislikes work. managers must create a work setting that provides opportunities for workers to exercise initiatives and self direction. beliefs and values. The same applies to others around us. where managers are viewed with distrust and seen as dictators rather than as leaders or team players.Table 1: Theory X & Theory Y perceptions [3] Theory X The average employee is lazy. attitudes and behaviours are normally driven and motivated by our needs. The next section starts the discussion with a content theory. • • • • • • • • • • Opportunities for advancement Responsibility Recognition Financial rewards Praise Threats Reprimands Financial penalties Suspension Termination Positive Motivation Negative Motivation Figure 5: Positive vs. If we want to understand ourselves and/or others. To allow employees to work in the organisation's interest. Managers should decentralise authority to employees and make sure employees have the resources necessary to achieve organisational goals Figure 5 also presents a continuum containing positive and negative motivations. Positive leadership styles encourage development of employees and higher levels of job satisfaction. content and process theories. The result of negative leadership may be an environment of fear.

and water to survive. prestige. physical. Figure 6: Maslow's Hierarchy of Needs [14] Maslow's theory is one of the very common tools used to understand human needs. it will cease to influence behaviour.e. shelter) to the most complex (esteem and self-actualisation). the theory represented a workable motivation framework that we utilised in analysing specific attitudes and behaviours to identify a particular need level an individual may attempt to satisfy. Once a need is satisfied. Also contains need for self-confidence & strength Love The desire to be loved & to love. 4. Esteem Need for reputation.Self-Actualization desire for self-fulfillment. or hygiene factors: factors that lead to dissatisfaction. To Become the best one is capable of becoming. air.. social.. To us. which gave us the opportunity in turn to assist and or/guide the individual to satisfy those needs. it will become a priority need again. & recognition from others. if satisfaction is not maintained for a need. 30 . The principle argument of the theory is based around the following four premises: (1) individual's needs are arranged in a hierarchical order that starts from the most basic needs (water.3 Herzberg's Two-Factor Theory (Content Theory) Another relevant needs theory is called the two-factor theory. (2) only an unsatisfied need can influence behaviour. safety. (3) a person will at least minimally satisfy each level of need before feeling the need at the next level. esteem and self-actualisation needs. (4) the level of satisfaction of needs always fluctuates i. Contains the needs for affection & belonging Safety Consists of the need to be safe from physical & psychological harm. Physiological Most basic need Entails having enough food. food. It mainly identifies five basic levels of needs as illustrated in Figure 6 namely. It principally uncovers two sets of factors: (1) motivators: factors that produce satisfaction and motivation (2) maintenance. where a satisfied need is not considered to be a motivator.

to causing high dissatisfaction. with Subordinates Job security Working conditions Salary Esteem Belongingness. social. with supervisors. where if they are not present. Figure 8 Shows overlapping features shared by both Maslow's and Herzber's theories where: (1) Hygiene factors are predominantly related to lower level needs. can provide low to high satisfaction. the Hygiene factors range from causing no dissatisfaction. and love Motivators Safety and Security Basic needs Physiological Hygiene conditions Figure 8: Maslow vs. Herzberg 31 .Motivators Absence of factor More Motivators Satisfaction Presence of factor Less • • • • • Promotion opportunities Opportunities for personal growth Recognition Responsibility Achievement • Hygiene Factors Absence of factor More Hygiene Factors Satisfaction Presence of factor Less • • • • • Pay Organisational policies Physical working conditions Relations with others Job security Figure 7: Herzberg's Two-Factor Theory As illustrated in Figure 7 above. if they are not present in sufficient quality [14][15]. no satisfaction can result (ibid. if they are present in any given environment. Motivators. Maslow (need hierarchy) Self-actualization Higher order needs Herzberg (two-factor theory) The work itself • Responsibility • Advancement • Growth Achievement Recognition Quality of interpersonal relations among peers. if present in. (2) Herzberg’s motivators target higher level needs.).

4. This is to say that behaviour is heavily influenced by perceptions of possible outcomes (see also Figure 10). For instance. managers have the power to make subordinates jobs more rewarding by granting them more responsibility. he or she will exhibit the required 32 . making them feel that they are succeeding. and wants it badly enough.The theory in our view can be used to focus on ensuring presence and quality of maintenance factors as a foundation on which to build motivation. See also Figure 9.Expectancy Theory. If an individual expects a certain outcome. It occurs in direct proportion to perceived or expected rewards. an individual will evaluate various possibilities on the basis of how much work is involved and what the reward is. explains why people choose a particular behaviour to satisfy their needs. Figure 10: Performance dimensions The strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual [17]. It states that before choosing a behaviour.4 Vroom's Expectancy Theory (Process Theory) Figure 9: Expectancy Theory [16] Vroom's theory also referred to as Valence-Instrumentality. possesses the competence to achieve it. Motivation is a function of how badly individuals want something and how likely they think they are to get it. praising their accomplishments. and so on.

we see those theories still valid today as tools and frameworks for understanding human motivation. self-actualisation • Provide the foundation to build motivation and influence behaviour • A framework to understand why people choose particular need (behaviour influence by perception of outcome) We argue that performance improvement is more of a function of ability and motivation. we are the product of our own thoughts.). Such understanding should enable us to enhance and improve our own thinking styles. and training. motivation. he or she will be less inclined to exhibit that behaviour. From our own personal perspectives. Table 2 shows some examples of our interpretations and understanding of the presented theories.behaviour. the theories explored here provide sound theoretical frameworks to better analyse and understand the basis of individuals' perceptions. a person who knows the other person's expectation and desires can tailor outcomes associated with specific behaviours to produce motivation. with the belief that they continuously and characteristically strive for an upper level of our capabilities (ibid.e. Motivation is more related to our thoughts i. For example. It rather promotes the idea of focusing on human potentials. we agree with Maslow that only an unsatisfied need can motivate a person's behaviour. behaviours. Some of the presented theories also do not believe that human beings are pushed and pulled by mechanical forces. thinking that what we do not have will seemingly make us happier. The aim of motivation is to improve the quality of our 33 . either of stimuli and reinforcements (behaviorism) or of unconscious instinctual impulses (psychoanalysis) [20]. This is our nature. and overall performance. experience. and attitudes. Table 2: Theories & Further Reflection Theory Theory X & Theory Y Maslow's Need Theory Herzberg's Theory Vroom's Expectancy Theory Examples • perceptions of how people view human behaviour mainly at work and organisational life • Confirms that human needs are an important part of human nature. We are never satisfied with what we have as we always want more. If a person expects that a specific behaviour will produce an outcome that he or she perceives as undesirable. SOME FURTHER REFLECTION There has been so much debate about the applicability of the presented theories in today's world specially that some of them have been developed as early as 1920's [3][18][19]. In our opinion.. • Identity trial model vs. In this light. Ability depends on education.

recognizing. needs. where social competencies are those that determine how we handle relationships. It sets out the skills. and intuitions Awareness • • • Emotional awareness: Recognizing one's emotions and their effects Accurate self-assessment: Knowing one's strengths and limits Self-confidence: A strong sense of one's self-worth and capabilities Social Awareness: Awareness of others feelings. and meeting customers' needs • • 34 . Thus motivation. Such interventions should involve well managed learning processes which should in turn lead towards continuous performance-driven competence development. It requires an analysis of the deeper. abilities. Personal Competence Social Competence Self-Awareness: Knowing one's internal states. Leading in successively larger contexts (from individuals to groups to organisation-wide efforts) requires successively larger sets of competencies in terms of knowledge. it is important for management to foster change processes within the organisation to allow competency development.thoughts. underlying systemic blockages for performance in organisations and/or broader systems by the actors [21]. for organisations need to be considered essential to learn best and maximise effectiveness. and taking an active interest in their concerns Organisational awareness: Reading a group's emotional currents and power relationships Service orientation: Anticipating. The framework looks at two prime competencies. personal and social. Personal competencies are those that determine how we manage ourselves. effective performance improvement needs to deal with the performance of the organisational system as a whole. To create the conditions and space necessary for such an objective. preferences. and personal qualities that leaders need to develop. Figure 11 shows a competency framework that we used to develop core personal competencies. We used this framework to develop leadership competencies and further identify training and development needs. skills and abilities. For management. and concerns • Empathy: Sensing others' feelings and perspectives. resources.

and facing the challenges of contemporary projects.Self-Management: Managing ones' internal states. The presented lessons. The presented theories are considered important tools and frameworks for management to understanding human motivation. personal empowerment. For example. An understanding and appreciation of this fact is essential to effective employee motivation and therefore effective management and leadership of result oriented organisations. management need to exercise the weaker side of the organisational brain. To acquire a functional balance. overall. and interpersonal relationships. systems. assertive communication [22]. impulses. and resources • • • Actions Self-control: Keeping disruptive emotions and impulses in check Trustworthiness: Maintaining standards of honesty and integrity Conscientiousness: Taking responsibility for personal performance Adaptability: Flexibility in handling change Achievement Orientation: Striving to improve or meeting a standard of excellence Initiative: Readiness to act on opportunities Social Skills: Adeptness at inducing desirable responses in others • Developing others: Sensing others' development needs and bolstering their abilities Leadership: Inspiring and guiding individuals and groups Influence: Wielding effective tactics for persuasion Communication: Listening openly and sending convincing messages Change catalyst: Initiating or managing change Conflict management: Negotiating and resolving disagreements Building Bonds: Nurturing instrumental relationships Teamwork & Collaboration: Working with others toward shared goals. The content of this article was prepared to raise management awareness and provide them with some fundamental pieces of knowledge about behaviours in organsiations and how much they are determined by perceptions and personalities. 35 . enhancing personal behaviours [23]. and procedures and at the same time with direction and results. a team with left-brain skills should include individuals with right-brain minded. should assist in formulating an effective learning contract for management to understanding the rudiments for building complementary teams. yet very complex. played a major role in clearing out what is to be 'set of foundations and pivotal ingredients' for self motivation. • • • • • • • • • • Figure 11: Competency Framework [10] CONCLUSION Human nature can be very simple. concerned with methods. Creating group synergy in pursuing collective goals. The different learning lessons from the projects and the work we carried out to complete this paper. who could participate creatively in problem solving.

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Bahrain. Milwaukee. 3. Leaders should also work to engage followers in this process for addressing performance inhibiting workplace dynamics. performance inhibiting workplace dynamics. Enderis Hall. 38 . Email: baaltman@uwm. such efforts by leaders can ideally lead to an organizational culture in which there is awareness of and a reduction in performance inhibiting workplace dynamics. p. These efforts can lead to improved performance. Working within and influencing organizational culture.edu Mesut Akdere University of Wisconsin-Milwaukee Department of Administrative Leadership 2400 East Hartford Avenue. performance.edu ABSTRACT A process of the role of leaders in addressing performance inhibiting workplace dynamics is presented. Altman University of Wisconsin-Milwaukee Department of Administrative Leadership 2400 East Hartford Avenue. Manama. italics in original]. Leaders should strive to: understand that workplace dynamics can inhibit performance. Altman and Akdere reviewed literature indicating that interpersonal dynamics in the workplace can be associated with reduced employee performance. WI 53211 Tel: (414) 229-5771. Human Resource Development (HRD) INTRODUCTION Noting that there are many definitions of leadership. identify such dynamics in their organizational contexts. 2 A prior version of this paper was presented as a Work-in-Progress Paper at the 2009 Academy of Human Resource Development Annual Research Conference (Asia and MENA Chapters). which can adversely impact quality. Keywords: Leadership. and the team and the organization levels [1]. Milwaukee. WI 53211 Tel: (414) 229-6684. and implement behavioral and/or systemic changes to reduce the prevalence of such dynamics. Enderis Hall. and proposed a theoretical model of performance inhibiting workplace dynamics in which problematic employee interactions taking place in the workplace can have a negative influence on the performance of individual employees. Email: akdere@uwm. Northouse incorporates what he sees as the key aspects of leadership in his definition of leadership as “a process whereby an individual influences a group of individuals to achieve a common goal” [13.LINKING LEADERSHIP FOR REDUCING PERFORMANCE INHIBITING WORKPLACE DYNAMICS: IMPLICATIONS FOR ORGANIZATIONAL EFFECTIVENESS 2 Brian A.

in general the wide range of leadership models that have been proposed to explain and recommend forms of leadership in organizations [13] have not focused on this role. leaders can reduce performance inhibiting workplace dynamics themselves 39 . we propose a model that illustrates a process through which leaders can play a vital role in working towards employee and organizational performance by addressing workplace dynamics which inhibit employee performance. and style-based leadership models). or styles (see [13] for trait. and in so doing extends the prior literature on performance inhibiting workplace dynamics [1] [2]. and Edwards describe “eliminates barriers to performance” [19. Walsh. Leaders and Influence on Organizational Followers At the top left of Figure 1. and the issue does not appear in a recent review of current leadership literature [4]. In particular. p. A MODEL FOR LEADERS TO REDUCE PERFORMANCE INHIBITING WORKPLACE DYNAMICS In Figure 1. Although there is a role for organizational leadership in reducing workplace dynamics that interfere with performance [2]. we intend for this process to be applicable by leaders who draw from a range of different leadership approaches and models. Wilson. the leader teaches the team to…resolve group conflicts” [5. 57]. and Baker. Exceptions are Kogler Hill’s model of team leadership which incorporates team leaders addressing team member conflicts which harm team level performance [10]. However. rather than integrating the process into only one or several of the host of leadership models and approaches extant in the literature. p. Boudreaux. It would also be most broadly applicable if such a model is open to all leaders. without requiring that they possess particular unique traits. we aim to present this process to have resonance for an international audience and with applicability across national and global contexts. the notion of performance inhibiting workplace dynamics is broader than the notion of conflicts in teams. the two arrows extending from the “Organizational Leaders” box represent the two roles that leaders need to play with regard to performance inhibiting workplace dynamics. 92] as a leadership competency with reference to the individual level of performance. skill. it is important for those leaders to address factors that inhibit individual employee performance. skills. First. Furthermore. The intent of this conceptual paper is to work within the framework of Northouse’s definition of leadership cited above to propose a process through which leaders can play a role in improving performance by reducing performance inhibiting workplace dynamics. There is a need for models of leadership addressing the leadership phenomenon at all levels and in a broad range of contexts that incorporate the notion of leaders addressing and ultimately eliminating performance inhibiting workplace dynamics. This paper begins this task by outlining the role leaders should play in reducing performance inhibiting workplace dynamics. Possible responses by managers and consultants in addressing such performance inhibiting workplace dynamics have been articulated [2].The interested reader is referred to Altman and Akdere [1] for a full discussion and examples of performance inhibiting workplace dynamics. and Marjerison’s suggestion that “to bring out the best performance in the team. If leaders aim to help their organizations achieve performance goals and improve performance.

as cited in 13] to influence organizational followers to address performance inhibiting workplace dynamics as well. Both leaders and their organizational followers must realize that 40 . products. instructing individuals to address these dynamics in their organizational units. Second. This can take place by encouraging others to address performance inhibiting workplace dynamics. or inadvertent) Change behaviors and/or systems to reduce performance inhibiting workplace dynamics [2] Improved performance Organizational Culture Leaders must engage in this influence in an ethical way [13] and with respect to the organizational and national cultural contexts in which they are operating. Our proposed process suggests that leaders should ethically use their influence to bring others in the organization to address performance inhibiting workplace dynamics. engage others in addressing performance inhibiting workplace dynamics. leaders are working to address performance inhibiting workplace dynamics through a process by engaging in that process themselves and by influencing others to engage in the same process. and fostering dialogue about these dynamics. This is even more crucial in today’s global economy where organizations constantly interact and depend on each other’s work.through their own involvement in the process illustrated in Figure 1. Understanding that Workplace Dynamics Can Inhibit Performance For both leaders and their organizational followers. which is explained below. subtle. FIGURE 1 The Role of Leaders in Addressing Performance Inhibiting Workplace Dynamics Organizational Leaders Organizational Followers Understand workplace dynamics can inhibit performance Identify performance inhibiting workplace dynamics in context (may be overt. legitimate. reward. and based on their own personal assessment of what would be most effective in their context. In this way. the process of addressing performance inhibiting workplace dynamics begins with an understanding that certain workplace dynamics can inhibit performance. and services. leaders can use the influence aspect of leadership—various forms of social power (referent. and coercive) [French & Raven. expert. and crucially.

Alternatively. in essence. and Baumgartner. and have an understanding that interpersonal dynamics in the workplace can hurt employee performance. we should think about interpersonal dynamics as well as issues such as a lack of necessary functioning equipment and other non-interpersonal factors which might more quickly come to mind. Using this framework. For example. graduate courses for leaders could include this content. Merriam. Extending a suggestion made for HRD scholars and practitioners [1] and for leaders with reference to signs of workplace bullying [20]. For example. when leaders encounter examples of performance that is lower than expected. subtle. drawing on work by Coombs. or inadvertent [3] [8] [11] [15] 41 . it may be that many leaders and organizational followers have already acquired this learning. non-formal settings. Finally. Caffarella. and informal contexts” [12.interpersonal dynamics must be added to their personal conceptualizations of factors that can potentially inhibit individual work performance within their organizational contexts. In other words. or in combination with other factors such as resource issues and non-interpersonal employee actions. How can leaders gain an understanding that certain workplace dynamics can inhibit performance? We posit that this is. as part of the leadership role. an act of learning. 29] as well as online. and that this equipment is in good working order. Leaders could also gain awareness of the performance inhibiting aspects of some workplace dynamics through their own informal reading and discussions. the next step is to identify performance inhibiting workplace dynamics in their unique organizational contexts. The process of identifying performance inhibiting workplace dynamics is not a simple one. conceptualize adult learning as taking place in “formal institutional settings. leaders might gain this learning through workplace training and development programs implemented by Human Resource Development (HRD) professionals. However this conceptualization of factors that inhibit employee performance. all leaders and organizational followers would likely agree that individual employees cannot perform at the best of their abilities if they do not have the equipment necessary to do their jobs. they should carefully examine the situation to see if negative interpersonal dynamics may be one of the root causes for the diminished performance. The dynamics that are inhibiting performance may be overt. which includes a lack of necessary functioning equipment. And. we suggest that the learning that workplace dynamics can inhibit performance can occur in any of these settings. should be extended to include the notion that certain interpersonal dynamics are additional factors that can inhibit performance at the individual level. leaders can gain awareness of performance inhibiting workplace dynamics simply by observation in their workplaces. One way to identify performance inhibiting workplace dynamics in the organizational setting is as follows. Identifying Performance Inhibiting Workplace Dynamics in Context Once leaders and followers gain an understanding that certain workplace dynamics can inhibit employee performance. Such dynamics may be causing the reduced performance in and of themselves. p. It is important for organizational leaders and followers to analyze their organizations with an eye to dynamics that are reducing performance. when we think of factors that inhibit employee performance.

italics in original]. leaders should work to change their own behaviors to reduce performance inhibiting workplace dynamics and encourage others to do the same. leaders should respond to performance inhibiting workplace dynamics when found in the organization by addressing such dynamics as individual situations. Leaders must consider whether their own behaviors related to interpersonal dynamics might be negatively influencing the performance of others. if such leaders also influence others in the organization to take up this effort. engage in strategies to address performance inhibiting workplace dynamics in the larger organization by addressing individual situations and/or improving organizational systems to reduce performance inhibiting workplace dynamics. In addition. 130]. We suggest that organizational culture influences the process of leaders addressing performance inhibiting workplace dynamics. p. Tsui. and in so doing have negative repercussions for the team and organizational systems. Xin.” which he defines as “the social ability to actually see what is going on between people” [9. norms. Leaders can influence organizational culture [6] [16] [18] but are also in turn influenced by organizational culture themselves [6]. to examine their own behavior for dynamics that negatively influence the performance of others. It is an awareness of interpersonal dynamics within the workplace that are interfering with employee performance that is needed by both leaders and followers. Taking Action to Reduce Performance Inhibiting Workplace Dynamics The next step is for leaders and other organizational followers to take action to reduce performance inhibiting workplace dynamics. leaders should influence other organizational followers to engage in these processes. We are asking leaders and followers to develop what Hogg calls “outsight. Nevertheless. but also that this process has the potential for influencing the organizational culture. leaders and those that they influence must identify performance inhibiting workplace dynamics if they are to address them in their organizations. p. we 42 . Improved Performance The final stage of the process illustrated in Figure 1 is the result of these behavioral and systemic changes. based on Altman and Akdere’s [2] application of Swanson’s [17] Taxonomy of Performance. Wang. then this is likely to lead to improved employee performance. 64. If organizational leaders successfully reduce performance inhibiting workplace dynamics in their own behaviors.[21]. Organizational Culture We depict the entire process in Figure 1 as taking place within organizational culture. which will have positive ripple effects at the team and organizational levels. Hogg contrasts this with insight. or values that shape the preferences or actions of participants” [18. work to reduce these behaviors in themselves. “shared social knowledge about the prevalent rules. and act in the organization to reduce these behaviors in the larger context. and finally. and Wu offer the following definition of organizational culture. and/or changing organizational systems to reduce the future prevalence of performance inhibiting workplace dynamics. Ideally. Zhang. as noted above. Second. which is an understanding of one’s own mental processes. First.

the leaders will be motivated to search for such dynamics in their own organization. CHARACTERISTICS OF THIS PROCESS This process of leadership with regard to reducing performance inhibiting workplace dynamics is open to all leaders. 130] are oriented towards an awareness of and a reduction in performance inhibiting workplace dynamics. and to what degree are they engaging in efforts to identify and reduce performance inhibiting workplace dynamics? Beyond these issues of prevalence. future research should work to identify what obstacles leaders perceive in engaging in the process outlined in Figure 1. p. or values that shape the preferences or actions of participants” [18. In particular. Leaders. For example. and take action related to them. programs designed for high potential employees being groomed for leadership roles might include discussions of performance inhibiting workplace dynamics and how leaders can address them. To what degree are leaders in organizations aware of how performance goals may be thwarted by certain interpersonal dynamics in the workplace? Further. There are also several other ways in which the process of leadership to address performance inhibiting workplace dynamics has implications for HRD practice. Such insights will be of value to HRD practitioners working to improve performance.would hope that such a process over time influences the organizational culture to develop into one in which “the prevalent rules. norms. Those individuals providing mentoring for leaders can draw on the steps in this process as well. Future empirical research should explore the prevalence of leader awareness of the negative performance implications of certain workplace dynamics. HRD practitioners should consider ways in which they can incorporate these ideas in training and development programs for leaders. and what strategies they have used to successfully circumvent those obstacles. HRD practitioners should consider how the leadership process for addressing performance inhibiting workplace dynamics is applicable to their organizational contexts. Also of benefit to practitioners. We hypothesize that if leaders become aware that certain interpersonal dynamics can negatively influence performance and quality in their organizations. because of their interest in achieving performance and quality. future research should explore how those leaders who are aware of performance inhibiting workplace dynamics came to that awareness. to what degree are leaders working to influence others in the organization to address performance inhibiting workplace dynamics. and is conceptualized based on leaders’ understanding of performance inhibiting workplace dynamics and then on subsequent leader behaviors. as part of their 43 . IMPLICATIONS FOR THEORY AND RESEARCH Researchers who are developing models of leadership should incorporate the notion of performance inhibiting workplace dynamics into their conceptualizations of leaders’ awareness and behaviors. IMPLICATIONS FOR HRD PRACTICE In general.

J. working within and influencing the organizational culture. & Akdere. F. International Journal for Responsible Employment Practices and Principles. REFERENCES [1] Altman. Leaders should understand that workplace dynamics can inhibit performance.M. Annual Review of Psychology. 1(1). & Akdere. and evaluation of such training and development programs. CONCLUSION As organizational leaders work to help their organizations achieve performance goals and improve performance. 2009. HRD practitioners can be involved in leaders’ efforts to engage in systemic organization development (OD) to reduce performance inhibiting workplace dynamics. Furthermore. Leadership: Current Theories. [3] Andersson. 10-21. & Pearson. B. We have presented a process of the role of leaders in addressing performance inhibiting workplace dynamics. Furthermore. 25].J. leadership will be instrumental in addressing the reduction of such dynamics in the entire organization as a result of a successful OD intervention.O. M. implementation. 2009. M. [2] Altman. Research. An OD effort that takes performance inhibiting workplace dynamics into consideration in a change effort will be more likely to succeed. Therefore. 44 . 7(4).M. such efforts would contribute to the initial reduction and ultimate elimination of these dynamics in the workplace.A. Tit for Tat? The Spiraling Effect of Incivility in the Workplace. Leaders should also work to engage followers to implement these steps. Conversely. it is important for those leaders to address factors that inhibit employee performance. Furthermore. Employees often perceive training programs as safe places to be open about issues and problems that have an impact on them. identify such dynamics. 2008. Towards a Theoretical Model of Performance Inhibiting Workplace Dynamics. Responding to Interpersonal Dynamics Inhibiting Workplace Performance. B.efforts to influence others in the organization to address performance inhibiting workplace dynamics. 452-471. Such an effort would involve HRD practitioners in the formulation. the process involves “Consultation with a Behavioral Science Expert” [7. and implement behavioral and/or systemic changes to reduce the prevalence of such dynamics. Human Resource Development Review. L. Academy of Management Review. T. the OD process will naturally seek out signs and indications of any performance inhibiting workplace dynamics during this stage. B. 60. p. we would also encourage HRD professionals to bring these issues to the attention of organizational leaders and to incorporate this process into the content of their training and development activities for the organizational followers. & Weber. Therefore. [4] Avolio. such efforts by leaders can ideally lead to an organizational culture in which there is awareness of and a reduction in performance inhibiting workplace dynamics. and Future Directions. as champions of change in the organization. 24(3). C. 1999. Walumbwa.A.. 408-423. Whether it is an internal or external OD intervention. We argue that these efforts can lead to improved performance. can support HRD professionals in incorporating the need to address performance inhibiting workplace dynamics into training and development programs for organizational followers. 421-449.

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we thought it would be useful to test it in the real world. We started this exploratory study with the crucial assumption that the nonprofit and the government sectors require integrative leadership. we found that leading a nonprofit organization has its own special set of challenges. Saint Mary's College of California. Keywords: Leadership. win the commitment of its employees. and designing a radically different income stream than the average business model. Consultant. “What do integrative leaders do? And what. A nonprofit’s success depends on being able to serve its constituents. Integrative. keep the trust of its donors. Second Wind Consulting Berkeley. and how they lead. We review the literature and argue that more research is needed in the combined area of leadership studies and listening. Rheem Campus. We interviewed eight leaders of nonprofit organizations to learn first-hand what leadership means to them. Values INTRODUCTION In this study. CA 94556 bachani. As expected. and collaborate with other organizations that serve the same constituency. The leaders in this study 46 . Our data shows that successful nonprofit leaders use their listening skills to gather input from various stakeholders and then use values.948-4090 Mary Vradelis. The most consistent skill for these leaders was the ability to listen. traits and behaviors characterize integrative leaders?” The Center for Integrative Leadership at the University of Minnesota defined the concept of an integrative leader as a boundary-spanning leader. we find that listening to stakeholders from within and outside their organizations is an essential behavior or skill. Nonprofit.com. CA 94706 maryv@secondwindconsulting. proposing that the most intractable problems of society can only be solved by leaders who can work across the boundaries of their organizations to integrate all key stakeholders.368-0587 ABSTRACT In this interview-based study of nonprofit leaders. including balancing increasing service needs with diminishing resources. Since the concept of integrative leadership is relatively new.net. Moraga. Leadership literature does not focus on listening. Leadership also requires a significant amount of boundary-spanning activities.LEADERS AND LISTENING: AN EMPIRICAL EXPLORATION OF NONPROFIT LEADERS Jyoti Bachani. Assistant Professor. (their own and their organization’s) to construct a legislative power that engages the support of their extended community. This assumption was based on the anecdotal evidence that these organizations have to work with multiple constituents more routinely than for-profit organizations. Phone: 650. Phone: 510. Listening. Graduate Business. we set out to answer the questions.jyoti@gmail. 380 Moraga Road. if any.

This study points to the potential for further work: to include listening literature more actively with leadership literature and develop specific propositions on how leaders and managers can use listening to be more effective. mission. (4) Questioning all of the stated or unstated assumptions. We interviewed a total of eight leaders of different nonprofit and government organizations from all over the United States. Shannon Leadership Institute. we wanted to learn from these leaders about what they do and what leadership meant to them. and describe the role. (3) Systemic thinking to help groups resolve problems and support the solutions. This is an exploratory and descriptive study. The following is a sub-set of the answers that were present across all of the interviews: 47 . their information has been disguised. Our inquiry included understanding the leader’s personal values in relation to the organization’s mission. Based on our combined prior work experiences of over four decades. Because the interviewees had all participated in the Shannon Institute. and (6) Innovation. The Center for Integrative Leadership (CIL) defines an integrative leader to be one who has one or more off the following six behaviors (found on the CIL website): (1) Inclusion of stakeholders who can affect change. METHOD. day to day activities.engaged their constituents in a continuing and coherent dialog that reflected their co-created visions and values. we asked them for their Myers-Briggs personality type and their three core values (both components of the institute’s curriculum). We had explicitly asked three of the informants how they saw these major differences. Identifying these unique challenges can help modify the organizational theories in a manner that would make these more applicable to this context. we set out to collect detailed descriptions of the leader’s values. since they had extensive experience in both sectors. we found there to be a significant gap in the research and support of listening as a key to successful leadership – particularly for organizations where input from diverse stakeholders is essential. (5) Constructive dialogue. we recognized some of the key differences between nonprofit and for-profit organizations. In this exploratory study. Until the informants give permission. We also asked about the organization where they worked. including examples of conflicts of values and their resolutions. activities and skills that integrative leaders may display. To understand their professional experiences in their own language. AND ANALYSIS The purpose of this research is to empirically explore the concept of integrative leadership. After that. After reviewing the literature on leadership behaviors. we made a critical assumption that integrative leaders are more likely to be found in not-for-profit organizations. Challenges faced by nonprofit organizations Based on analyzing the data collected during our interviews. and primary programs. particularly its values. (2) Identification of shared purpose to build sustainable solutions. PROCESS. rather than confirming or disproving any theoretical model of leadership. an institute that is dedicated to the personal and professional renewal of leaders in community-serving organizations. what they were working on. The leaders were all referred to us as alumni of the James P. interviewing occurred in an open-ended free format that would allow us the flexibility to follow the conversation where it led us. what mattered to them.

Problem-solving. they often expect a work-life balance that is not common in the highly competitive corporate world. 48 . They displayed a lot of empathy for others. and inspire the followers. 2) The role of funding for a nonprofit organization makes it substantially different from a business organization. Establishing high standard of excellence and methods of evaluation. Table I: Leadership Behaviors • • • • • • • Establishing goals and timelines. Leaders often made personal sacrifices in salary and life-style choices. they were ready to take personal risks and showed a high degree of self-awareness in championing their cause. employees. how it is to be done. The challenges of meeting a high level of existing demand with decreasing resources are seldom a problem in the business world. including what is to be done. In return. all but one.1) Within the nonprofits sector. Providing a strong role model Defining roles. who is responsible to do it. We decided to compare the definition of an integrative leader with the more traditional definitions of leadership. We compiled a list of leadership behaviors from a number of definitive articles in the edited volume of a popular Leadership textbook (Northhouse. They had long tenures in the job. In our sample. including demonstrating confidence in their capabilities and consulting to obtain their ideas and opinions. and are therefore usually willing to work for lower compensation than they would expect in the for-profit world. reported the challenges of funding their cause and organizations. Existing literature primarily focuses on the role of the leader as the one to create a vision. while carrying a constant burden of generating ongoing financial resources needed for their work. Motivating subordinates to perform at highest level possible. organizations serve an existing and often growing unmet need. including their closest business or relationship partners truly understood what they needed to feel supported in their roles. 4) The nonprofit leaders were unusually dedicated to their cause or organization’s mission and showed a high level of commitment. and leaders that are deeply and personally committed to the organization’s mission. but did not feel that anyone. Nonprofit leaders’ behaviors: listening and engaging Apart from the features listed in the previous section. communicate it. to achieve collective action for meeting some goals. There was a sense amongst a number of them that there was inadequate understanding or empathy for their roles in the face of these challenges. Some lamented that they had to devote 50% of their time to fund-raising efforts. 3) Nonprofits tend to attract employees who are loyal to the cause of the organization. 2007). This means that sometimes businesslike policies adopted by the nonprofit leaders may end up de-motivating their employees rather than motivating them. Giving directions. The nonprofit organizations address huge unmet demand for their services by involving volunteers. The behaviors were grouped and listed in Table I. there were no clear patterns in the data that focused on the values and personality types of all the interviewees. sometimes with charisma.

Specifically. The last activity listed in Table I. policy makers. Based on these empirical findings. too. By listening to all the stakeholders.. by listening.” They needed to find out what their employees. with an annual operating budget of one million dollars. and thus was an important part of the hiring process and the final decision. They listened to the community they served by including various opinion leaders for their cause. they learned about the key challenges in terms of the issues and the donations. who are much greater in strength of sheer numbers. The process to hire a new executive director for this organization took a total of nine months. In describing their day to day activities. Recognizing how popular and effective the school programs were. they learned that a major donor group had become alienated from the organization and had decreased the amount of their donations. ‘consulting with subordinates. A Board Search Committee designed a consultative process to solicit input from the organization’s stakeholders so they could formulate the right job description and find the right person. within and outside the organization. They listened to their donors who would donate based on the trust in the vision and leadership of the executive director. Below are two examples of the way the nonprofit leaders. In response. This helped formulate what was expected from the person taking the position.O. we found that depending on the organization and its leader. customers. were engaging in listening. the leaders are able to capture the imagination of their followers and articulate their collective aspirations. we propose that listening is a significant activity essential to the role of a leader.O. and about what the leader was expected to achieve. a leader needs to be a good listener and an empathetic one. The data shows that listening really well is what allows a leader to capture the zeitgeist and the collective aspirations of the followers. and various other stakeholders needed or wanted. A Chief Operating Officer (C. To be able to do that with any authenticity. By listening and paying attention to the content and emotion of what they hear. there were 12 employees who were responsible for the largest advocacy group in the state on a certain issue. Another organization’s purpose was to provide enrichment programs for grade school students. Explicit examples of their activities and projects helped us identify which of their activities was not theoretically represented in the abstract theoretical descriptions.When we reviewed the typical leadership activities identified in Table I. The board listened to the employees who would be led by this person. the selection included the ability to re-build connections with this specific donor group and reintegrate them to serve their shared cause. The strategy was developed by the senior management team and presented to the employees in a meeting. However. he created a growth strategy for the organization. A board member for this small organization. In one organization.) was hired because he brought over a decade’s experience from the corporate world. we believe a leader articulates the aspirations of a collective of followers. who we interviewed. collaborators. some of these activities were more salient for some than for others. the nonprofit leaders we interviewed explicitly mentioned how a majority of the activities they engaged in were essentially “to listen. The data showed that all the leaders spent a lot of their time in various situations that required them to be actively listening. The goal was to serve a million 49 . We consider it an important leadership activity that needs to be listed explicitly in addition to the others in Table I. boards. donors. who worked in the corporate world. felt that a similar position within the business world would have been filled in a fraction of the time.’ implies a listening role for the leader but often becomes an exercise in ‘selling’ the leader’s ideas or a low level ‘involvement’ by the followers.

were listening-. The revised strategy focused less on target numbers and more on the impact of the programs on participating youth. LITERATURE REVIEW: LEADERSHIP AND LISTENING As mentioned before. their employees.O. This implicit theoretical treatment of an important empirical activity is a big gap in theorizing about leadership. Hence. In these examples. It was critical for leaders to listen to the employees. the leaders recognized that listening and paying attention to all stakeholders was critically important for achieving the goals of their organization. the community they serve and to understand how these different needs and demands can be balanced to achieve the organization’s mission. We want to emphasize that the leaders are not just listening to build consensus. the assumptions the leader makes. The leader’s ability to listen well affected the vision.'s corporate experience. the donors. They told the C. without appreciating how they were different. They were not interested in doing that. the role the leader.paying attention to understand empathetically the real concerns. the review of leadership behavior included listening as implicit in a number of these activities. listened intently to their concerns and agreed to reconsider the strategy. their effectiveness really depended on how they engaged their organizations. He reformulated it to be more consistent with the organization’s key resource. that he was attempting to bring the corporate world’s growth-for-growth’s sake mentality to their mission. and management communication. donors and their constituents once they had listened and learned. but it is not explicitly mentioned anywhere. The implied skills of communication do not focus on listening either. he expected a specific target-oriented strategy to motivate employees and align their actions to help achieve the corporate objectives. without compromising on the main goal and vision and values of the organization. They are also not just listening to provide what is being asked for by the various stakeholders. interests play out? The data we collected showed that effective listening was combined with the ability to engage the different constituents in a manner that brought a balance to the different interests using the leader’s personal values and/or the organization’s declared mission as the uniting thread.O. but when we looked deeper. They publicly declared their concerns about how this growth would impact the quality of the programs and the work-life of the employees. The leaders in our study.O. 50 . Based on the C. or maybe even be transferred to new locations. We conducted a broader library and internet based search for articles with the key words: leadership and listening. it had the opposite impact. communication. none of the communication models in the literature even mentioned listening. even the implicit inclusion of listening in theories is incomplete and completely divorced from the experiential descriptions of what integrative leaders are really doing. and sometimes conflicting. The C.O.O. While the evidence in the previous section focuses on how the leaders were listening. The staff members hated it and were de-motivated by it. Program employees would be required travel to schools far away from their home districts. The communication models direct the leader to focus on other areas like coding the message and selecting the appropriate channel for communicating the message but not on the critical skill of listening.school students in 20 cities by 2020. How does the balancing act with multiple. They then found a way to address concerns. In this nonprofit organization. and how the leader communicates his/her vision to the employees.O. Communication appears explicitly as an important leadership activity. its people.

g. A few other authors have recognized the importance of listening for managers and supervisors (Ambrose. 1995). empathetic listening. For this group of managers listening is an important leadership activity.” (1987a) and “Manipulation versus persuasion” (1987b). problem solving. and motivated subordinates. The earliest reference that we found was the 1925 work. according to one count. based on research already available. 1964. This professional organization hosts annual meetings and publishes the International Journal of Listening. 1991). paraphrasing to ensure understanding the speaker’s message. Lyman K. There are different ways to practice the art of listening based on general properties of listening (Duker. only 1. Orrick offers some prescriptions for leaders on how to be more effective listeners by looking the speaker in the eye. and being respectful by not betraying the confidence of the speaker (Orrick. he wrote. 1989). 1993). 1976. In 1972. keeping an open mind and not getting emotional or defensive. Nichols. trained in the behaviors of active listening. Listening can affect success at work (Sypher. Thompson. growth. trust. teaching and research of listening. Listening in certain contexts can create healing. 51 . and knowledge advancement (Barrett-Lennard. Leaders can be measured on their listening competence. Yet. Listening as an area of research does not seem to be as active as it is important. Imberman. knowledge creation. for e. What is urgently needed is research that will focus on how leaders and managers can use active listening skills to get organizationally beneficial outcomes. One study acknowledged that it is the ‘toughest management skill” (Brownell.5% of articles in business journals dealt with listening effectiveness (Smeltzer. started the International Listening Association to promote the practice. 1998). Their effectiveness really depends on their ability to use listening to truly engage the stakeholders in the collective endeavors of the organization. active listening. 1987). like effective relationship building. Listening ability and effectiveness affects the perceptions of individual performance in general and communicative competence in particular. we want to emphasize that leadership literature has a huge gap until it starts to include listening as an important leadership skill. and Weinrauch & Swanda 1975). 1993). 1984. relationship enrichment. tension reduction. This gap in research is particularly puzzling since business practitioners and academics claim to recognize listening as one of the most important skills for effective professionals (Smeltzer. Bostrom. Tucker. Ralph G. intrinsic motivation and performance (Stine. Johnson & Bechler. 2002). Our empirical data offers an illustration of how these nonprofit managers are using listening to engage with their stakeholders and communities to do just this. His successor.” “Listening is a 10-part skill. 1988). The most recent review of the listening literature that we could find was by Witkin (Witkin. 1988). Duker & Petrie 1964.The only studies that explicitly mentioned listening in the context of leadership were these: One study found that perceptions of leadership were positively correlated with listening effectiveness (Bechler & Johnson 1995. etc. 1969. the ‘father of listening’ was Late Dr. et al. “Manny” Steil. problem solving. Yet. Managers and leaders can use listening for all these. Supervisory listening impacts subordinate support. 1990). “Listening is good business. We also focused on the research related to listening. in the workplace (Haas & Arnold. 1995) and affects community building efforts (Purdy. Bigelow. et al. Barrett-Lennard. “Science of listening” authored by W. of the University of Minnesota. Based on this survey.

The data we have collected is describing the world in the words of the practitioners without theoretical filters creating any biases. Listening should also be made an explicit part of theoretical communication models. This study may be based on a small sample. nonprofit leaders advance their organizational missions by listening to the concerns of their employees. Without use of executive authority. that because of their diverse stakeholders. This study points to the potential for further work: to include listening literature more actively with leadership literature and develop specific propositions for listening strategies that leaders and managers can use to be more effective. References available upon request from Mary Vradelis (maryv@secondwindconsulting. and know how to. to create an engaged community that supported their mission. However. but from the same one as them. Although we did find some research that supports our intuition that this was a good place to start. Jim Collins suggests that for-profit leaders have executive powers to reward or punish based on being higher up in the pyramidal hierarchical structure of the business world. Leaders in these types of organizational structures deal with similar challenges of having to satisfy multiple stakeholders and may benefit from better listening skills. We feel that by inductively arriving at our findings from the evidence we collected systematically. nonprofit leaders must rely on legislative powers. this is not unusual. so we can see and appreciate the world they live in. and may be a distinguishing characteristic of integrative leaders. and re-framing their message in an empathic manner. This assumption needs to be tested out by further work in other contexts. We feel that the next logical extension of our results will be to the networked flat organizations in the corporate world. while being guided by their values. donors and constituents. and do not need good listening skills. We would like to use a larger sample to better describe and document how leaders listen and engage their constituents to create effective organizations. but for qualitative research.net) 52 . listen. Weick (1999) made a call for ‘feeling theories’ that theorize from the perspective of the people and the situations they face. In his monograph written for nonprofits Good to Great and the Social Sectors. they may be less relevant to the more traditional hierarchical organizations where leaders can rely exclusively on their executive and reward powers. we see that these differences do not preclude the generalizability of these results. based on our starting assumption that we are more likely to see integrative behaviors in this context. When we review the initial comparison of for-profit and nonprofit organizations. he conjectures. We would also like to conduct a comparative study with leaders of for-profit businesses. While. we have provided such a key discriminating feature of integrative leaders – those who want to. Our sample constituted leaders of nonprofit and public sector organizations only. not from our own or some neutral external perspective.LIMITATIONS AND FUTURE RESEARCH We found evidence to convince us that listening is fundamental and crucial for leadership studies. We are now most concerned with how far can we generalize this claim.

as banking industry is considered to be the biggest industry in the world which covers more than 50% of the overall sector of all the industries. Plymouth. as Rempel and Zanna (1985) define trust as “a generalized expectancy held by 53 . Email:mkasimoglu@yahoo. Email: daba.co. Plymouth. Today. the online banking be beneficial to build exchange relationships between bank and the customers (B-2-C). The increasing usage of the internet in the banking sector has brought considerable changes. Therefore. but this study is based on the most important reason or the determinant in the relation of the seller (here as banks providing internet banking services) and the buyer (consumers using internet banking services). UK. Devon. Opportunistic Behavior. 2003). University of Plymouth Business School.Drake Circus. Undoubtedly people in Turkey are getting aware of the importance of the e-commerce in their day to day life. Turkey INTRODUCTION Retail online banking in Turkey has not always been a successful model for the banking industry.. Email: mudgal_vipul@hotmail. This exploratory research investigates the effect of e-banking on the development of retail banking relationships in Turkey. For instance. UK. The findings of Morgan Stanley internet research concluded that. Head of Business Administration Department. Vast levels of globalisation have given birth to more competition. Canakkale Onsekiz Mart University. Shared value. TRUST. Programme Manager for SLM.chowdhury@plymouth. Asst.Orange France Telecomms. therefore. Similarly. the banks across the world face new challenges and opportunities.Turkey. with the increasing number of online users. the web is more important for the retail financial industry as compared to any other industry (Nath and Mukherjee. Associate Head of University of Plymouth Business School Drake Circus. the data of 155 samples of internet users by the means of online questionnaire has been gathered. What is trust? There are many definitions on trust by different authors. To justify this study.co. PL4 8AA.ac. Manager (Operations in Product Support). Online Retail Banking (ORB). Pl4 8AA. Key Words: Trust.THE DETERMINANTS OF TRUST AMONG THE TURKISH CONSUMERS IN ONLINE RETAIL BANKING (ROB) Dababrata Chowdhury. banks can easily reduce the cost of serving customers. Today. opportunistic behavior. which are shared value.ac. electronic commerce has a great significance in each and every field of business.uk ABSTRACT The online banking has changed to great extent since the introduction of e-commerce. the e-commerce models like Business-to-Consumer (B2C) have gained lot of attention from various market players in the retail banking industry.uk Murat Kasimoglu. Email: lynne.Biga.uk Vipul Mudgal. attraction and communication. There may be many reasons for such a low number of internet banking users. A literature review dealing with the concept of measuring trust with help of four different antecedents.butel@plymouth. viz.uk Lynne Butel. banking is one sector which has a high degree of value amongst many people.

the customer is the one who should always be considered. marketing. “The building of long term. High customer service emphasis. p. On looking more in the detail of the theory. undoubtedly internet banking is the fully customer oriented market. has been noticed.315) trust is “willingness to relay on the exchange partner in whom one has confidence”. is the commitment-trust theory of relationship marketing given by Morgan and Hunt (1994). therefore. High customer contact. incorporating ideas from economics. organisation behaviour. the relationship commitment theory comprises of: Focus on Customer retention. 1998).According to the researcher the customer’s trust always influenced by the attractive services (Kassim et al 2006). The author means by this that if the website of the bank is attractive and looks prominent than the chances of trading through it increases. information systems and decision sciences”( Nath and Mukherjee. (Ratnasingham. 1997). promise or statement of the company can be relied upon”. One of the models is: 54 . committed and profitable relationships with potential and existing customers through communication and the provision of quality good and services” (Irving et al. people are increasingly unwilling to take risks and demand greater protections against the probability of betrayal”. Long timescale. THE THEORETICAL BACKGROUND There are many research papers who explained various models of measuring trust.customer that word. For example. Barclays Bank has made a major commitment to relationship marketing though the implementation of the Corporate Market Programme (CPM). p. evidence which again points the whole study towards trust viz. Similarly. Quality is the concern of all. In the same literature we have come across the other. According to Payne. sociology. strategy.The paper links the three components as “trust is the calculation of the likelihood of future cooperation and is a defining feature of virtual cooperation. it has been noticed that the most common approach in all of the studies conducted to find the level of trust in the internet banking till date. 2003.This is the reason of their high profits in every year’s balance sheet. While researching the literature for the study. (1995).6). In all of the studies different variables have been taken to measure trust. psychology. royal. Orientation to customers values. in one of the study the proper implementation of relationship commitment theory in one of the UK’s largest bank Barclays. There are many definitions on trust which will be discussed in the review of the literature LITERATURE REVIEW According to Nath and Mukherjeee.In the process of the literature review many studies on the different trust models in e-tailing of online banking has been noted. according to Moorman et al (1992. “trust is a cross-disciplinary concept. As trust declines.

Source: (Nath and Mukherjee, 2003) In the above figure, the stated model was proposed in the research paper, ‘Trust model in the internet banking’. The trust in the research was mainly measured by measuring the different antecedents of trust. The paper stated that the trust is a bond of three antecedents’ viz. Shared Value, Communication and Opportunistic Behaviour. Again the communication factor can be seen in the Barclays Bank Corporate Market Programme (CPM). We will discuss about the different antecedents of trust in the later part of the literature review. In the similar way on looking at the other research, then some of the similar and some different antecedents of trust can be noticed.There are three main antecedents of trust are identified from relationship commitment and trust theory (Morgan and Hunt, 1994) viz. Social bond, Opportunistic behaviour and Communication. The other study Trust and its Determinants in Internet Banking, 2004, also measures trust with same antecedents or determinants like Social bond, Opportunistic behaviour and Communication. Similar antecedents were taken in one of the other study which we have already discussed. THE ANTECEDENTS OF TRUST Now as we going to see the different antecedents through which we measure the trust. In our research we have used four antecedents viz. Shared Value, Opportunistic Behaviour, Attraction ,Communication. The reason for choosing all these four antecedents is their bonding with trust. We have left the one of antecedent viz. Social bond. And in place of the social bond the shared value has been chosen. As social bond only reflects the emotional contents and on the

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other hand shared value comprises more of the common beliefs of the bank and the customers. Now let’s discuss these antecedents in more detail. a) Shared Value Shared value in general means when both the parties has the common beliefs of what goals, polices and behaviours are important or unimportant, right or wrong or appropriate or inappropriate (Morgan and Hunt, 1994). As far as the shared value antecedent in context with the online banking is concern, it exemplifies the degree to which the customers and the banks share the common beliefs on the values like ethics, security and privacy. In other sense all these three critical values are nothing but the bond of trust. The critical factors like privacy, ethics and security are important elements in the internet banking (Nath and Mukherjee, 2003). Ethical values determine the chances of bank manifesting or selling the customer information to the third party or providing the customer with the wrong information. This always been the major concern for the online customers. There are also evidences to suggest that, there are many ethical issues regarding to financial services, many of which relate to the disclosure of information (McAlexander and Scammon, 1998). In broad sense ethics and honesty are features of good business mortality, build trust (Huemer, 1998). Even privacy as concern is the other critical issue, as customers generally hesitate from providing their information and especially when it comes to the online transaction. There are lots of vulnerabilities in the information systems due to which customer never feel safe while online banking or transaction. Even the increasing amount of phishing, sophistication of spam, semantic attacks increasing users’ uncertainty about the results of their actions and their distrust towards online parties like banks ( Kumaraguru et al, 2007 ). Therefore, risk of loss privacy is the significant problem for the customers which is also considers being the important factor for building trust (Nath and Mukherjee, 2003). Similarly, security is also another critical issue for the online banking customer. The area which gets affected the most due to the security reasons is the online transaction. Users always think that making payments via internet are not secure, thus this reduces the customers level of trust in the online banking or the transactions (Kassim et al, 2006). Now with the change in the time and the technologies, the security systems of the banks are getting better day by day. Now, security is not identified as the major factor in distinguishing critical online activity (Nath and Mukherjee, 2003). Therefore, now we can say that the higher is the level of shared value among the customer, the higher is the level of trust in customer for the online banking, or vice versa. b) Opportunistic Behaviour Opportunistic behaviour can be defined as the “Self-interest seeking with guile” (Williamson (1975), Nath and Mukherjee (2003) p.8). In the easy terms, the opportunistic behaviour is something which one party knows without informing to the second party. For instance, when bank informs about the new services say, credit card, but hide some of the key information’s such as any hidden charges or cost. However, sometimes exaggerate the quality of the product and services than of what it worth. When the customers believes that the bank is engaged in opportunistic behaviour, then such impression will affect the trust bonding by taking it towards negative flow. As originally suggested by (Clay and Strauss, 2000) and later referred by (Nath and Mukherjee, 2003), that with the high risk of opportunistic behaviour by the banks sprouting and

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inadequately developed rules and regulations, customers frequently have low levels of trust in online banking.Even sometimes, the customer’s perception about the bank taking undue advantage of the customer lack of knowledge or opportunistic behaviour is due to its limited or less technical knowledge about the system. As customer trust on an automated system is dependent on the systems perceived technical competence and performance (Jarvenpaa et al, 2000). Due to this fact the customer always think negatively even if he or she is getting the accurate information as they sometimes unable to explore the whole database of the bank website. This certainly will reduce the customer trust in online banking. Lastly, due to the lack of adequate regulatory control and the presence of substantial information asymmetries (Bejou et al, 1998), could also affect customer’s trust when engaging in online activities such as banking. Therefore, the higher risk of opportunistic behaviour in online bank may result to low levels of trust in the internet banking (Kassim et al, 2006). c) Communications:Communication is a major precursor of trust. It can be defined as the formal as well as the informal sharing meaningful and timely information between firms (Anderson and Narus, 1984, 1990). Anderson (1984) also suggested that communication is positively related to trust in marketing channels. As suggested by Moorman (et al, 1993) and Etgar (1979), that communication in internet banking refers fostering trust by assisting in resolving issues like “disputes and ambiguities” and further arranging perceptions and expectations. Further, Nath and Mukherjee (2003), considered such communication in terms of speed of responses, openness and quality of information. As these are the parts of social communication, therefore, displaying high degree of social communication by the bank on their website, leads to high degree of customer trust and as a result will increase the chances of the customer engaging themselves in the online banking and transactions. Further, Duncan and Moriarty (1998), identified the factors like accurate, comprehensive and two-way communication lead to an increase in trust. To explain this further, they have resembled computer as a device which allows two-way dialogue that assist in information sharing and creating acquaintances. In the similar way, the information technology in the form of the banks website can also prove to be great support in the communication by providing all the information under one tree. This type of information is both ways (Rogers, 1995). The IT is such tools for the banking industries that can prove to be very helpful for the communication purpose, which definitely make the communication bond strong, which again lead it to the high degree of customer trust. This is because, once the customer realises that he or she is being responded in the proper way, they automatically starts trusting the bank. This will increase the chances of the customer engaging themselves in the online banking and transactions. (Kassim et al, 2006), suggested that favourable communication environment results in the customer attraction towards internet banking. After analysing the importance of the communication in the online banking, it can easily be said that this is the one of the most important antecedent in the study, and which need to be seen very carefully. d) Attraction :Attraction means that there is something which makes the customer interesting to a given service provider say bank, or vice versa ([Gronroos, 2001] and [Kassim et al, 2006]). Attraction can be based on the three factors such as financial, technology and social constructs ([Sathye, 1999] and [Kassim et al, 2006]). Attraction is somewhat very important antecedent in the customer and bank trust. In this fast growing arena of technology, every service provider wants to gain the competitive advantage to remain in the race. For instance take the example of

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the banking industry which is regarded the toughest industry to remain in. Therefore, every bank wants to take the maximum benefits of the technology to attract most of the customers. This can only be possible if the appropriate technology is used for example online banking websites. If the websites are more users friendly and attractive as well, means easy to operate (Wang et al, 2003). Similarly, in the internet banking relations, comfort of adoption includes aspects such as the accessibility of information, functionality and navigation (Dabholkar, 1996). As suggested by Prahalad and Ramaswamy (2000) and later posited by Kassim et al (2006), that if customer find complicated menus which makes them annoyed then they might judge the company’s product by the degree to which a product gives them the experience they want. This can also be in terms of the services for what they are paying, means the customer is fully satisfied with the services of the banks or not. Similarly, if the reputation of the service provider is stupendous then might be there are chances when the customer gets attracted towards the respective banks online banking services. On scrutinizing the importance of the antecedent attraction in the relationship of online banking and trust, it can be relate that, higher is the level of attraction among the customer towards the bank, the higher is the level of trust in customer for the online banking, or vice versa. Hypothesis Based on the review of the literature, a link between online banking and the level of trust in the customer for it has been developed. The level of trust in the online banking among the Turkeyn customers can only be measured by finding out the impact of the antecedents of customer trust in online banking viz. Shared Value, Opportunistic Behaviour, Attraction and Communication. For this the hypothesis has been made to measure the impact of the antecedents of trust in the online banking. H1 : There is a positive relationship between online shared value provided by the bank and the customer’s trust in the internet banking. There is a positive relationship between online communication and customer’s trust in H2 : the internet banking. H3 : There is a positive relationship between online attraction and customer’s trust in the internet banking. There is a negative relationship between perceived bank online opportunistic behaviour H4 : and the customer’s trust in the internet banking. Data collection: As the study has been analysed by the means of primary data, therefore the questionnaire is designed and used to collect data. In order to analyse the collected data, the whole questionnaire has been divided in six different sections. Each section represents one variable. As used earlier in some studies of Kassim et al (2006), Malhotra et al (2007), where the results are based on the questionnaire data, the same Likert interval scale method (Oakshott, 2006) has been used, where all the items are placed on the five point rating, ranging from 5 to 1, where ‘1’ refers least or strongly disagree and ‘5’ refers to most or strongly agree.Before launching the final questionnaire, a pilot survey was done. The pilot surveys with 30 questions were launched and the sample of 15 respondents was taken. Out of the 30 question, four of the questions were found to be unrealistic as the respondents hesitated to answer them. The overall score of these questions were quite low in comparison with the other question. Therefore, to get appropriate and accurate data, those four questions has been deleted from the final questionnaire.

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Hence this drafted and then amended questionnaire has been selected for the final administration on the targeted 200-250 respondents. As Turkey is mentioned to be one of the important market for the banking industry in the world (Mukherjee and Nath, 2003). Therefore, it is very important to study the market very carefully, due to its wide range and complexity. To overcome, this type of problem a different method of collecting data has been adopted. The survey was launched via source of internet. The final drafted survey was launched though the American based survey site, Zoomerang (www.zoomerang.com). Then the link to the direct online survey viz. http://www.zoomerang.com/Survey/?p=WEB227JYDRS4J3 has been sent to the respondents. Even to make sure that one respondent do the survey only one time, the Internet Protocol (IP) address conflict was applied to the survey. Under this technique, with the help of the website, the administrator (website) records each and every respondents IP address and therefore not allow them to answer the survey twice. In this way, the chance of survey becoming bias reduces to very extant. The selection method of the respondents is again one of most important job in any survey (Oakshott, 2006). For this study for very limited sector of people has been targeted. The targeted group are the computer literate people. To select such kind of people the simple strategy of selection has been adopted. The professional like teachers, multi-national executives, students and others has been selected. Finally, the link of survey was sent by the means of social networking websites, like Face-book and Google’s Orkut. Further the respondents have been asked to further distribute the link in their social circle. In this way the questionnaire has been circulated and responded by the successful respondents. DATA ANALYSIS AND RESULTS The total numbers of respondents who have hit or clicked the counter of the survey were 222, but out of this only 172 have gone through the whole survey and clicked the survey end button. Out of 172 respondents as well, 17 were such respondents who doesn’t fit to the selection criteria of online banking user. Out of these 17 respondents, there were some who are the online banking user but have completed the survey partially. Therefore such respondents have been deleted from the final included data for the analysis. Finally the total 155 respondent’s data has been taken into consideration for the further analysis. As the whole study is based on to investigate that whether there is any relationship or the impact of the trust antecedents on the trust among the online banking customers. Therefore to find out the relationship, the Regression method of the quantitative data analyses has been used. As regression has become a powerful tool for summarising the nature of relationship between variables of both types i.e. dependent and independent (Alan Bryman et al, 2002), therefore such method has been adopted in this research. On the basis of the hypothesis the following model of dependent and interdependent variables has been formed

Shared Value
(H1) (H3)

Attraction

Trust
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(H2)

(-H4) Proposed model

Communication

Opportunistic Behaviour

Figure 1: Model for analysis (Dependent and Independent variables) The above figure shows the dependent and independent variables. The dependent variable is the TRUST, whereas the independent variables are ATTRACTION, COMMUNICATION, SHARED VALUE and OPPORTUNISTIC BEHAVIOUR. On the bases of these derived variables, the further analyses have been conducted. The analyses and the results calculations have been done on the basis of the various tables generated while doing the regression tests. The analysis has been done by comparing group or sections of the questionnaire. But as in the regression test only one dependent variable can be taken, therefore, each section representing different antecedents of trust is taken for three times to relate with the three aspects of trust i.e. reliability, integrity and confidence, or with the three different questions based on these aspects to describe trust. Results on the basis of correlation and regression test between trust and variables Antecedents Mean Standard Deviation Β Shared value 7.89 0.99 0.243 Communication 2.16 0.98 0.357 Opportunistic 7.59 0.99 - 0.294 behaviour Attraction 8.03 0.99 0.33 RESEARCH RESULTS Selection of Hypothesis based on the Regression and Correlation test Further, these regression and correlation analysis from all the calculated values, brought out these findings in focus, that there is a significant positive influence of online communication on customer’s trust in online banking (β = 0.357 and p<0.05). Hence, the Null hypothesis (H0) that ‘there is no relationship between online Communication and the customer’s trust in internet banking’ proved wrong and rejected. On the other hand, the alternate hypothesis (H2) gets accepted. Similarly, there is a significant positive influence of shared value (β = 0.243 and p< 0.05) on trust, thus the null hypothesis (H0) that is ‘there is no relationship between online shared value provided by the bank and the customer trust in internet banking’ stands to be rejected and the alternate hypothesis (H1) is accepted. Again, online attraction has a significant positive influence on customer’s trust in the internet banking (β = 0.33 and p<0.05). Therefore, the alternate hypothesis (H3) is accepted and the null hypothesis (H0) that ‘there is no relationship between online attraction and the customer trust in internet banking’ is rejected. It has been found, that there is a significant negative influence of online opportunistic behaviour on

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bank managers need to provide full customer satisfaction so that customers realize that they have been taken care of by the bank. As this has been proved that trust plays the vital role in the online banking. Further. which in no doubt has increased the overall score but made the relationship weak.customer trust (β = . This will be clearer by looking at the responses of the online banking customers. the score for ‘bank managers never contact’ is high up to 25%. in this chapter the findings and some facts which has been discovered during our study will be discussed. In the last findings. Therefore. which again has been proved (correlation score of trust and bank managers contact is 0. But. such as time saving more effective. but on looking the results more carefully. DISCUSSION After scrutinizing the entire research and the analysis. 61 .05. The other interesting finding of this study is that there is no respondent who has not answered ‘Yes’. As it has already proved that there is significance in both the tested dependent and independent variables. has been rejected and the alternate hypothesis (H4) is accepted. let’s put the regression test results under scan.294 and p<0. lots of recommendations are need to be given to the banks for establishing higher level of trust in online banking with customers. banks have started to realize the importance of online banking. The highest ‘not sure’ ratio is 35% in question number 25 (survey questionnaire) where the customers have been asked to rate that sometimes their bank online transactions cannot be trusted fully. it can be concluded that for opportunistic behaviour. As communication score is low in the study. This shows that banks need to make the customers aware of the online banking advantages. On taking out the average R-value for all of the variables is 60% (approx). Which is a good sign that suggests. on been asking that whether there bank offers internet banking. But in most of the questions the customers agreed ratio is higher in comparison of the other value in the question. But. suggesting that the level of communication has not reached to the optimum level. it has been noticed that there is not a strong relationship between each other. it has been seen that most of the customers still want to bank via face to face communication. Most of the customers responded that their bank offers two way communications (92%). easy etc. As all the R-values are not too close to 1. Even on being positively related. therefore banks need to work on it without delay if they really want to grow the online banking customers and take the benefits of it. in fact some of the R-values are as low as 65%. although the relationship is significantly proved. this relationship cannot be termed as very strong. But still it has a significance level of p < 0. the null hypothesis that ‘there is no relationship between perceived bank online opportunistic behaviour and customer’s trust in internet banking’. and efficient it could be in overall cost saving for them.0. FINDINGS After the analysis of the results and on that base the selection of the appropriate hypothesis has been done. This shows that the customer has a trust on the banks but not to that level which make them feel of doing more risk related work via online banking such as transactions and all. To start with. but the score is low (79%) when they have been asked about the information of changes via email. banks again need to assure the customers about the reliability and authenticity of the online banking so that the trust level of the customers increases. the results also shows that the bank managers do not contact the customers regularly.Thus. The other reason behind the weak positive relationship is that most of the respondents have chosen to be neutral.431).05).

and the sample size is small (n=155). therefore. and then generally customers are not aware of the security policies of the government such as Data Protection and Privacy Law in Turkey. 62 . Finally. bank can make them aware about the security policies. sometimes the results came out to be negative when positive result was expected. the banks even have to increase the online banking customers by making the websites more attractive and user friendly.which may increase the level of trust and they start to use online services more frequently. as it performs on the set pattern. Similarly. Similarly. therefore. References available on request. As a result of it. bank should always encourage customers of using online banking by proper promotions of it. even all the analysis is based on the results from the questionnaire. Secondly. there are many other factors that can influence the online banking awareness. the analysis results have to be accepted and on its bases the recommendation have also been drafted. Future research can study the impact of other variables such as on different consumers segment of online banking. the customers hesitated little bit and for these reasons there is a high ratio of ‘not sure’ answers. therefore it cannot be measured that whether the information provided by the respondents are best according to them. such as tie ups with the certain online secure transaction agents. therefore. There is no proof for it that all the customers have seriously taken the survey. In this regard. As the study is related to the sentiments of the customer where the questions of reliability and trust are been asked. The other limitation of the study is the nature of it. the researcher has to relay on whatever information has been gathered from Turkey. like pay-pal. which increase or decrease the level of trust in the online banking. Further. the chances of accurate results reduces. Further. even if needed all the bank customer representatives may also tell the customer about the reliability of the internet banking and its advantages. shared value can also be increase by assuring the customers about the banks online transactions are fully secured. e-trust and others. then the trust of the customer is more likely to increase as it shows the authenticity of the website. As transaction is the most important factor. therefore. In that case analysing the results is little bit more difficult. Customer always hesitated in doing online banking due to the security reasons. all the analysis has been done by using the SPSS software. as the study is based on the Turkish customers and the study has been taken from UK. LIMITATIONS AND FUTURE RESEARCH As the study is conducted by the means of online. As far as the information sharing is concern. If the bank provide all the information to the customer at one place. even due to the possibility of the information being shared. in and outside the banks. but still the results are authentic. Lastly.

In recent years. working in unity towards a common goal. race. The objective of this study is to determine the tolerance of university students towards a diverse range of people since the university students are are thought to be individuals that will have the opportunity to work with people from different cultures and will be exposed to innovations in 63 . sex. According to research findings. diversity dimensions INTRODUCTION Due to globalization affecting many countries worldwide with an increasing speed. and ethnic origin. a sample of 1460 students. Turkey ABSTRACT The objective of this research is to determine the diversity perception of university students. multi-cultural environments have become inevitable especially within businesses.tr phone: +902324204180/20298 Izmir. nationality. according to analysis results of whether perceptions vary in relation to demographic variables or not. chosen from the department of Economics and Administration Sciences at Dokuz Eylül University in Izmir. was used in this research. Keywords: Diversity. is a management exercise based on workers with different characteristics. borders between countries are gradually being eliminated.colak@deu. the most important management exercise has become the enabling of the harmony between workers from different demographics. In line with these developments. To this end.tr phone: +902324204180/20610 Izmir. the third biggest city in Turkey.edu. The leading actors of such a multi-cultural life are a labor force that has diversity in language. especially collaborations between different countries and different nations. religion. culture.tozkoparan@deu. diversity perception towards colleagues was again the highest. Managing diversity.edu.A RESEARCH DEVOTED TO THE PERCEPTION OF UNIVERSITY STUDENTS ON DIVERSITY Murat Çolak Dokuz Eylül University Faculty of Economics and Administrative Sciences email: m. In addition. managing diversity. Turkey Güler Tozkoparan Dokuz Eylül University Faculty of Economics and Administrative Sciences email: g. the diversity perception of university students was highest for their colleagues. perception of diversity. which has become inevitable due to the changes experienced and the importance of which increases day by day. together with the increase in the number of multi-national businesses.

sexual tendency and physical capacity). occupational experience. Differences exist in the definition of dimensions of diversity also just as in the definition of it as a concept. inherent dimensions (those. race. marital status. educational status etc) and organizational dimensions (content of the job. and acceptances in a certain manner has become an issue. Researches carried out show that the labor force composition in organizations is undergoing a drastic change and that this change will continue to increase in the future [3] [4]. so that the stabilization of organizational power. external dimensions (income. adopted values. race. have forced new management styles to be put on the agenda that aim for integration and unity instead of assimilation in organizations. give up or change them making an effective effort 64 . Primary dimension has a very important effect on personal identity and shapes an individual’s image and world-view as well as directly affecting his/her occupational and general behavior and attitude towards other individuals and groups [13] [14]. It is seen in the aforementioned classifications that diversities are mostly handled in two dimensions as primary and secondary. Diversity Dimensions Notion of “diversity” in literature points at the diversity in personal characteristics between individuals [10]. These are demographic diversity. which can partially be realized/seen like age. However. Programs for management of diversity. if practiced successfully. These new circumstances. will result in creation of equal opportunities for every individual. People may intentionally choose. For example. For instance motivating workers from different demographic characteristics. The elements that account for secondary dimension of diversity are characteristic features.today’s rapidly changing world of information and technology. work experience. Within this contextwe first define what we mean by managing diversity and then explain the dimensions of diversity and finally illustrate a research carried out related to the subject. gender. physical capacity and sexual tendency [15]. ethnic origin. managerial position etc) [11]. membership to the union. organizational diversity and socio-cognitive diversity [12].It is normal for new management approaches to be put on the agenda as well as encountering some issues due to the increasing labor force diversity in organizations. participation in making resolution and organizational competition advantage are ensured [8] [9]. They consist respectively of personality (those. department. cultural background. The approach of management of diversities offer suitable solutions that maximize potential advantages of diversity while minimize their disadvantages for organizations [7]. gender. adapt. ethnic origin. Choy defines three dimensions for diversity. DIVERSITY MANAGEMENT Definition and Importance of Managing Diversity Interaction with identities in a wider range becomes more critical as organizations geographically spread and free circulation of labor between countries increases [1] [2]. It consists of the elements of age. which cannot be realized/seen at first sight). physical appearance. One of these management styles is managing diversity [5] [6]. Gardenswartz and Rowe (1994) define four dimensions for diversity.

it was tried to measure students’ diversity perceptions about the personnel to be recruited by them in the future if they achieve managerial positions since most students have the potential for managerial positions due to their educational status. Accordingly. The form also includes seven questions about demographic information.. The online questionnaire has been sent to the e-mail addresses of 65 . dimensions of diversity were mostly studied at primary and secondary levels. position in family. The form consists of 62 questions in total. 2004. diversity perceptions of students were analyzed via three categories. political views. a unique questionnaire form was prepared based on the most frequently used diversity dimensions in literature to fit both the qualifications of the sample and the objective of the study. the main objective of the study is to determine the diversity perception of students. Sampling method from similar test subjects (survey) and questionnaire method were employed in the study. general dimensions perceived by students as diversity were discovered and in the second category. The questions in the last group measure students’ diversity perceptions while they recruit personnel if they achieve managerial positions. The questions in the third group measure students’ diversity perceptions about their colleagues when they start to work. faith. Descriptive statistics. According to the literature review about management of diversity. Salomon and Schork compare dimensions of diversity with an iceberg and they classified them as visible that may be understood easily and invisible that are not understood at first sight but only realized later [20].0 version. socio-economic status. Thus. competency and work experience [18] [19]. The data obtained from the research were loaded to the SPSS program and the required analyses were conducted in 15. t-test. The questions in the first group measure general diversity perceptions of students while those in the second group measure the points that a student feels himself diversified from the minority. Faculty of Economic and Administrative Sciences. They are listed as education. Kandola. t-test between two matched groups and single-way variance analysis were used in the analyses. Since no scale suitable for the objective of this study was found in the literature. In the third category. the present study focused on the same dimensions. In the form. status about military obligation. settlement. The Target Population and Sample of the Research Target population of the research is students of Dokuz Eylül University. METHODOLOGY The Objective and Importance of the Research The essential question of the study is “How diversity is perceived according to students studying at university”. Thus.(Schermerhorn et al. their diversity perceptions related to their friends in cooperation with them were discovered. The Method and Technique of the Research The determinant (determining status) model was employed in conducting the study. 1995) [16] [17]. In the first category. 5option Likert scale was used. marital status.

70633 As the students participating in the research declared that they could easily work together with a diverse group of people. it may be concluded that the question form used in the research is reliable. Individual’s general perception of diversity α = 0.88 As Alpha values are not much lower than 1. 43. Mean and standard deviation values of the questions analyzing the students’ perception of diversity for the three cases are given below in Table 2.the students of the six departments of the faculty. 52. and 40% were brought up according to the Aegean Region culture. Statistical Findings Mean and standard deviation values related to students’ perception of diversity in general. which is deemed to be full reliability.7128 .1345 3. Table 1 Mean and Standard Deviation Value of Diversity Perception of the Individual Variables Mean Standard Deviation The General Diversity Perception of the Individual The diversity perception of the individual regarding their work colleagues The diversity perception of the individual regarding their staff when they are managers 2. regarding their colleagues and regarding their staff when they are managers are given in the following table.8% of the sample is male students.88713 .62735 . Demographical findings related to the sample obtained by descriptive statistics and 59% of the students participating in the research are between the ages of 20 to 22.2% are Regular High School graduates.89 Individual’s perception of diversity regarding colleagues α = 0. 1460 of the questionnaires were filled and sent back. Students participating in the research are mostly students of Business. it can be concluded that their tolerance for diversity regarding their colleagues is high. Target population of the research contains 5642 active students.8980 4. general reliability value of the question form used in the research (Cronbach Alpha Coefficient) is as follows for three criteria.4% of the sample is constituted of first and fourth year students. 35. 66 .9%. therefore the reply ratio was 25. 61. Whereas 39% of the sample has graduated from Anatolian/Science High Schools. Labor Economics & Industrial Relationships. RESEARCH FINDINGS Demographical Findings According to reliability analysis findings.00.90 Individual’s perception of diversity regarding his/her staff when he/she is a manager α = 0.6% of the sample lived with his/her friends. and Economics Departments.

90 3.45 3.341 1.042 . Students were asked to find out which criteria of diversity would influence their selection when employing new personnel if they were managers and the findings showed that criteria of gender.304 . In addition to the diversity criteria included in the questionnaire.45 3.64 2.40 4.Table 2 The Mean and Standard Deviations Values based on the Questions Associated with Diversity Perception Under the Three Situations for the Individual General Diversity Perception Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Standard Deviation 1. sexual preference in question 8 (Q8). marital status and socioeconomic status and disabled people while they were hesitant about working together with individuals of different sexual preference in question 36 and convicted individuals in question 39.798 . nationality.74 2. disability. they were hesitant as for the criteria of age. disability and sexual preference.114 1.360 1.22 4.848 .20 4.998 s41 s42 s43 s44 s45 s46 s47 s48 s49 s50 s51 s52 s53 1: Strongly Disagree 5: Strongly Agree α=0.867 . marital status and socioeconomic status would not affect their employee selection.05 Questions analyzing students’ perception of diversity comprised the components of gender.289 1.48 3.42 4.327 1. nationality. religion.10 2.725 1.003 .30 2.40 2. students indicated education.31 4.02 4.041 .305 1.372 1.998 . sexual preference. whereas students had an explicit negative attitude against previous conviction. age. race.62 4. previous conviction.382 Work Colleague Perception s29 s30 s31 s32 s33 s34 s35 s36 s37 s38 s39 s40 s41 Standard Deviation . students assess the others as different in the criteria of age in question 4 (Q4).840 .161 .90 2.14 4. attitude and manners.59 2. age. when values of general perception of diversity are examined.929 1.149 1. religion.27 4. point of view and political views as criteria of diversity in 67 . disability in question 45. sexual preference in question 48 and previous conviction in question 51 were different.087 .31 3.810 . ethnicity. it may be concluded that students’ tolerance of diversity against individuals with such differences is relatively low.208 1.374 1.30 4. nationality.983 1. age. marital status. race.01 4.840 Management Perception Mean 2.33 4.25 4.119 1. On the other hand. ethnicity.07 Standard Deviation 1.211 1. ethnicity.344 1. When the questions inquiring the students’ perception of diversity regarding their colleagues when they started working were analyzed. previous conviction in question 11 (Q11) and socioeconomic status in question 12 (Q12).14 3.62 3.80 2.27 Mean 4.09 3. socioeconomic status and mother tongue. religion. attitudes against criteria of age in question 44.17 3.984 1.865 . intelligence.810 1. Accordingly.56 4. According to the findings given in Table 2.74 Mean 4.25 4. physical appearance.419 1. Thus.40 2. physical appearance.811 . some students declared that they could easily work together with individuals of different gender.366 1.19 4.07 4.34 3.834 .385 1. race.

393 0. H2: There is a significant difference between the individual’s general perception of diversity and perception of diversity regarding the staff when he/she is a manager.236 -0. and this difference is statistically significant. In the Post Hoc test made to determine from which group the difference found in the single way variance analysis emanated. Findings of the analyses are given below in Table 4. These hypotheses are. t-test and single way variance analysis were made.811 -24. Table 4 T-Test and Anova Analysis Results for the Diversity Perception of Individuals Demographic Variables Sex School year General Diversity Perception t/F 0. perception of diversity regarding colleagues came out to be higher than other groups. The students indicated that they would be more tolerant against the diversity of their colleagues.538 p 0.862 0. physical appearance and socioeconomic criteria were observed.030 0.000 *1= Individual’s general perception of diversity 2= Perception of diversity regarding colleagues 3= Perception of diversity regarding staff when he/she is a manager ** Sig. Table 3 Comparison of Group regarding Diversity Perception Groups Compared* 1-2 1-3 2-3 Diversity Mean -1. the second group. As it can be observed in the table.05 significance level “Paired samples test” was used to test the hypotheses.001 6. but no distinct differentiation was observed. therefore hypotheses were verified.(2-tailed) value at 0. T-Test and Anova (analysis of variance) Analysis Results Three basic hypotheses were tested in the research.672 0. As a result of the analysis.656 Diversity Perception Towards Work Colleagues t/F P 11. significant differences were found between each group. H1: There is a significant difference between the individual’s general perception of diversity and perception of diversity regarding colleagues.584 0.their opinions.160 26.003 1. In order to determine whether there was a deterministic correlation between the students’ perception of diversity in the three cases and the demographical variables.815 0.(2-tailed)** 0.388 0.000 0. In another question. Only relative differences related to age.320 p (Sig. Besides. which is a t-test between two matched groups.171 68 .000 0.421 t -40. a bonferroni test was used. students mainly perceived themselves as different from the majority in their character and frame of mind. H3: There is a significant difference between the individual’s perception of diversity regarding colleagues and the perception of diversity regarding the staff when he/she is a manager. students were asked to define the criteria in which they felt themselves different from the majority.000 Diversity Perception Towards Staff for a Manager p t/F 8.

Whereas no significant correlation was found in the individual’s general perception of diversity and perception of diversity regarding staff when the individual is a manager against the high school the individual has graduated from. Setting out of this importance. CONCLUSION AND RECOMMENDATIONS The principle of diversity management based on accepting diversities as they are and not making any discrimination against anyone is not to separate people but to unite them around common goals. results of age group 23-25 are higher than that of age group 20-22.091 Whereas no significant difference was found between genders regarding general perception of diversity.683 1.246 0.921 1.Age High School Graduated From Who they live with 5. As for perception of diversity regarding colleagues. individuals or groups will create an important added value for the companies and thus will play an important role in helping both the individuals and the organizations reach their goals.000 2.281 3.940 7. Individual’s perception of diversity regarding colleagues is higher in graduates of Anatolian/Science High Schools compared to graduates of Regular High Schools. fourth year students’ perception of diversity regarding colleagues came out to be higher than that of first year students.637 0.358 2.266 0.008 0. Whereas perception of diversity regarding staff when the individual is a manager is higher in students of age 17-19 in comparison to that of students of age 26 or older. A significant correlation was found between the individual’s age and general perception of diversity. a significant correlation was determined between the the individual’s general perception of diversity and his/her perception of diversity regarding colleagues.001 0. According to the results of analysis.000 0.008 0. perception of diversity regarding colleagues and perception of diversity regarding staff when the individual is a manager. General perception of diversity in the students of age 26 or older came out to be higher than students of age 20 to 22. a research on university students has been carried out in this study since 69 .042 0. there was a significant correlation between individual’s perception of diversity regarding colleagues and the high school the individual has graduated from.104 0. Whereas no significant difference was found between years of instruction regarding general perception of diversity and perception of diversity regarding staff when the individual is a manager. Individuals living with their families had a higher perception of diversity compared to those living in the dormitories.747 1. significant differences were found between genders regarding students’ perception of diversity regarding colleagues and perception of diversity regarding staff when they are managers.056 5. Hence instead of being outcast due to their differences when seen as a source of richness. a significant correlation was found between the individual’s perception of diversity regarding colleagues and year of instruction. Whereas no significant correlation was found in the individual’s general perception of diversity and perception of diversity regarding staff when the individual is a manager against with whom the individual lives.

A. accepting them as they are and understanding their diversities. 415-431. for example they have stated that as a colleague a certain type of manner will not affect them but at other times it can affect him/her. B. physical appearance. K.. the diversity perception of the students change for criteria such as age. since they have not yet started their careers. Hartel. 21: 1. Organization Theory: Modern Symbolic and Postmodern Perspectives. “when they are work colleagues” and “when they are managers”. Stead. M. 70 . judicial record and socio-economic criteria according to different cases. J & Daus. it has been tested whether there are any significant differences among these three different situations and among the demographic variables and these three variables. C. Seventh Edition. & Ivancevich. Diversity. Bell.M. To this end. Human Resource Management Review. New York: Oxford University Press. C. a different viewpoint and age. sexual orientation. Diversity Management: Anew Organization Paradigm. REFERENCES [1]Ashkanasy. S. G. Journal of Business Ethics. [6]Loosemore. J. M & Al Muslmani. 95-100. S. The Influence of Diversity Context on White Men’s and Racial Minorities’ Reactions to Disproportionate Group Harm.A. J. Strategic Human Resource Management: Employee Involvement. E. (2002). it may be stated that within the limits of the sample group. university students have a high tolerance towards those that are different from themselves. 307-338. the students might be suggested to attend training sessions on building awareness about this topic. Besides.. N. New Jersey: Prentice Hall. respecting those that are different from us. [3]Certo. (2003). Modern Management. M. 14: 4. [2]McMahan. 28: 3. Our principle suggestion about this will be to place courses in their curriculum related to diversity management and giving training sessions on sensitivity to diversities and empathy both for the students and the teachers and carrying out projects that encourage more cooperation with people of diversity. P. 61-76. J. (1997). and International Issues. Within the framework of this research the diversity perception of students towards people that they think are different from them has been tried to be determined on the basis of “general”. (1998).. S. 193-214. According to the results obtained from the analyses. & Virick. 17: 2. (1999). Journal of Management. Diversity and Emotion: The New Frontiers in Organizational Behavior Research. Construction Project Management in the Persian Gulf: Inter-cultural Communication. [4]Hatch. M. C. [7]Mollica. International Journal of Project Management. C. 8 : 3. This result is thought to be obtained due to the fact that there are many students together in various cities of Turkey and that the city where the research was carried out has a multicultural structure. M. Hence interest in this topic will be kept alive and important contributions can be made to enlighten society and increase awareness about this topic. H. (1999). The Journal of Social Psychology. (1997). [5]Gilbert. At this point.A.being the workers and managers of the future they will be subject to working with a multicultural and varying workforce. Our suggestion to researchers who will work in this field is to make similar analyses at different cities in the country and indeed make international studies that will enable international comparisons keeping in mind the different cultures.

. (2000). J. R. 71 . New York: John Wiley & Sons Inc. Globalisation and Workforce Diversity : HRM Implications for Multinational Corporations in Singapore. 37-44.R. Porter. The International Journal of Management Science. M. & Schork. 367-377. M. M. The Systemic Approach to the Encouragement of Innovativeness through Employee Diversity Managemen. Organizational Behavior. Maximizing Workforce Diversity in Project Teams:A Network Flow Approach. (2000). & David. & Moffitt. R. J. J. Report to Department of Immigration and Multicultural Affairs Business Benefits of Productive Diversity. Kybernetes. ResearchTechnology Management. L. (2000).. (2003). 28. L. Mighty. (2000). [14]Christian. Journal of Environmental Health. 46: 4. Diversity and Effective Leadership in Multicultural Workplaces. A. [15]Parvis. O. 143153. L & Richard. British Journal of Management. S. A. (2003). 36: 2. S. & Leahy.T. 37-65. (2006). E. 11: 3.46. Case Studies.&Damar. & Osborn. S. Cultural Diversity at Work : The Effects of Diversity Perspectives on Work Group Processes and Outcomes. M. Administrative Science Quarterly.. Defense Equal Opportunity Management Institute Directorate of Research. Impact of Marketing Work-Place Diversity on Employee Job Involvement and Organizational Commitment. The Journal of Social Psychology. 144-156. K. 9: 4. Workplace Diversity and Group Relations: An Overview.[8]Kirby. (1994). (2007). (2000). [18]Ely. 140: 3. [17]Knouse. [11]Gardenswartz. H. F. W. C. Turn Diversity to Your Advantage. 65: 7. (2007). [13]Treven. N. Group Processes & Intergroup Relations. The Managing Diversity – Survival Guide. W. J. (2001). B. J. H. S. USA.29: 2. G. Hunt. L. Singapore Management Review. & Matjaz. (2008). Vol. & Rowe.. 459-466. Boston: McGraw Hill. G. October. Issues in Diversity Management. [19]Lorbiecki. A. W. J. Critical Turns in The Evolution of Diversity Management. [12]Choy. [9]Schermerhon. [10]Bhadury. [20]Salomon. [16]Bertone.

The purpose of this phenomenological study was to address how SA influenced Statue of Liberty/Ellis Island decision makers and their CDM ability during the World Trade attacks of September 11.edu 219-365-0927 ABSTRACT The World Trade attacks of September 11.com 954-923-2404 David Milen Walden University 155 5th Avenue South Minneapolis.THE ROLE OF SITUATION AWARENESS (SA) IN COMMAND DECISION MAKING: A PHENOMENOLOGICAL EXAMINATION OF STATUE OF LIBERTY/ELLIS ISLAND DECISION MAKERS ON SEPTEMBER 11. The conceptual framework for this study was based on the theories of Endsley.gordon@waldenu. Crisis Management. Situation INTRODUCTION The Role of Situation Awareness in Command Decision Making: A Phenomenological Examination of Statue of Liberty/Ellis Island Decision Makers During World Trade Attacks of 72 .com 602-626-5122 Jean Gordon Walden University 155 5th Avenue South Minneapolis. Minnesota 55401-2511 diane. Situation awareness (SA) contributes to how command decisions are made in times of crisis management. 2001 Diane H. Minnesota 55401-2511 jean. Decision Makers. Keywords: Awareness Command Decision Making.edu jeanie613@aol. Minnesota 55401-2511 david. Klein.edu dhdayson@gmail.milen@waldenu. and Gasaway concerning SA and CDM in times of emergencies and crisis management. 2001.dayson@waldenu. Dayson* Walden University 155 5th Avenue South Minneapolis. 2001 required the immediate analysis of the command decision making (CDM) for public safety within the New York metropolitan area.

and maintain SA for CDM in times of crisis management. and the park’s resources. next section briefly discusses literature review. In spite of this. and its influences on STLI/ELLIS decision makers during the 9/11. there was a void in the academic literature in understanding the impact of SA and CDM on STLI/ELLIS decision makers during the 9/11 attacks. On that day. 2001 Overview will begin with brief introduction and background. and final section provides conclusion. SA was a contributing factor in the decision making. form. p. The study sought to identify. The purpose of this phenomenological study was to advance the understanding STLI/ELLIS decision makers ability to make command decisions under high levels of stress. This theory and theoretical framework states “that improving the understanding of SA barriers may enhance CDM under stress” [4. then research and findings. courage. 4]. This model was developed following a study to understand how decisions were made on the fireground. visitors. As park managers these decision makers are considered stewards of the park land. and understand the lived experiences of STLI/ELLIS decision makers’ ability to develop. Gasaway [4] on command decisions and situational awareness in stressful environments. These men and women were expected to assess the situation quickly and make command decisions to insure the safety of the employees. there was an opportunity for scholarly investigation to understand SA. The second theoretical model contributing to the conceptual framework of this study comes from focusing on the role of one component of RPD model that being Endsley’s [3] work with SA. Prior research has been conducted by Richard B. Like so many others. 2001 created a day of total chaos and confusion among those who experienced the event firsthand. They “bear significant responsibilities for decisions about park resources that affect how future generations will see this multifaceted natural and cultural heritage” [11].September 11. The World Trade Terrorist attacks of September 11. STLI/ELLIS National Monuments decision makers were expected to accomplish. The National Park System’s mission is: Caring for the American Legacy: to promote and regulate the use of the national parks which purpose is to conserve the scenery and the natural and historic objects and the wild life therein 73 . The attacks were a true test of strength. However. The theoretical framework draws upon two models: the first theoretical model comes from the seminal work of Klein [5] [7] [8] [9] and his Recognition Primed Decision (RPD) model [6]. this is just what the National Park Service (NPS). This monument is considered an international icon and management policies are clear as to the mission and responsibility of the STLI/ELLIS decision makers. BACKGROUND The STLI/ELLIS National Monuments are a part of the National Park System. the ability to assess the situation and make command decisions. its effects on CDM. the STLI/ELLIS decision makers had never experienced an incident of this magnitude and were placed in a dilemma to make command decisions prior to any assistance from other agencies. describe. The research findings from other environments supported the notion that when decisions are made under stress.

advice or insights offered by subject matter experts and others who have relevant knowledge and experience. [11] STLI/ELLIS decision makers are considered the stewards of these two sites and have a responsibility for the care and sustainability of the resources. and that takes into account the decision maker’s education. Ohio. One exemplar of an NDM method is the Recognition-Primed Decision model that “attempts to describe what people actually do under conditions of time pressure. and changing conditions”[5. but by translating it into actionable knowledge that can be exploited in the decision making process” [13]. and. To understand CDM superiority one must understand the components that create a naturalistic decision making paradigm. As a result of this conference. training. p. There are many different components that contribute to a decision makers’ superiority. Recognition-Primed Decision (RPD) Model 74 . and experience. illdefined goals. “Decision superiority is achieved not just by acquiring and assessing the right information. National Park Service policies have defined professional judgment as: A decision or opinion that is shaped by study and analysis and full consideration of all the facts.S. and scholarship.and to provide for the enjoyment of the same in which such manner and by such means as will leave them unimpaired for the enjoyment of future generations. LITERATURE REVIEW Naturalistic Decision Making (NDM) Paradigm CDM is of significant importance in times of crisis management. The Recognition –Primed Decision (RPD) model and the role that SA plays in all three variations is essential to CDM and contributes to how decisions are made. whenever appropriate. often with ill-defined goals. “This means that decision maker must consider the impacts of the proposed action and determine that the activity will not lead to an impairment of park resources and values” [11]. with emphasis on decisions made under time pressure. [11]. The U. ambiguous information. STLI/ELLIS decision makers were well aware of these management policies and had challenges adhering to them during the events of 9/11. The conference provided an opportunity for the researchers to discover their work shared a common theme. and the presence of high personal stakes [10]. with high levels of uncertainty. 1989 in which 30 behavioral scientists attended. the Naturalistic Decision Making (NDM) paradigm emanated and resulted in a research study focused on how decision makers functioned in their real-world decision making environments. the results of civic engagement and public activities relating to the decision. It is important to understand the model and how it applies SA and CDM. In times of emergencies and crisis the “National Park Service decision maker must use his or her professional judgment” [11]. 287]. good science. Army Research Institute sponsored a conference in Dayton.

p. As a result of the study. The 75 . The RPD model reveals that if the situation being evaluated by the decision maker is ambiguous. The RPD model stresses the roles of SA [6] and how decision makers form SA by sizing up the situation and respond with the first options they identify [10]. Third. The explanation was “the key is that people use expertise to evaluate the situations and recognize typical courses of action as the first ones to be considered” [9. the RPD model relies heavily on the decision maker’s expertise to properly identify and process cues in the formation of their SA [10]. The components within the data collection procedure entailed a three step process predicated on research participants’ shared lived experiences and interview protocol. the decision maker will implement that decision. The RPD model was a result of research conducted to determine how decisions were made in NDM environments. understanding. the experienced decision maker relies on a process when he or she fits the cues together to build a story in his or her mind about what is happening. RESEARCH The research using phenomenological approach sought to advance the understanding and describe through lived experiences STLI/ELLIS decision makers’ abilities to develop and maintain SA for CDM during the events of September 11. without comparing and weighing out options to find the optimal solution) [8]. 2001. 2001. Klein formulated the Recognition-Primed Decision (RPD) model to explain how decision makers in naturalistic environments were able to make decisions in nontraditional ways (i. It was stated.. Finally. this study identified lessons learned and best practices for developing and maintaining SA for CDM barriers in times of crisis. Then the decision maker mentally simulates the events leading up to what is currently being observed to help form his or her SA [7] [12]. This research finding uncovered that SA is an essential contributing factor in the process. this study intended to understand the importance of SA in times of crisis management. p. This was significant to describing. and capturing the true essences of the lived experiences of STLI/ELLIS decision makers during the World Trade attacks of September 11. In support it was observed that “expertise in a particular domain has a significant role in allowing people to develop and maintain SA in the face of high volumes of information transfer and system complexity”[1. First. Fourth. this study sought to identify how STLI/ELLIS decision makers can successfully use SA in times of crisis management. If the mental simulation results in an acceptable result. In addition. It was also stated that the expertise used in NDM centered on the decision maker’s ability to establish and maintain SA [9]. repeating the process until an acceptable result is achieved and the decision is implemented [10]. evaluate the next course of action in the same way. it was revealed that the decision maker can mentally simulate a chosen course of action into the future to see if it will work. If not.e. Second this study sought to understand the how SA influenced CDM of STLI/ELLIS decision makers during 9/11. The research examined five areas to determine the influences of SA on CDM. the decision maker.637].55]. the study sought to understand the effects of SA on STLI/ELLIS decision makers. The model provides evidence that a decision maker can evaluate a single course of action without comparing it to other options. will.RPD model was developed by using cognitive task analysis (CTA) methodology to determine how critical decisions were made under stress. in serial fashion.

the ability to assess the situation and make command decisions during this catastrophic event. Describe how you developed and maintained SA. The significance of this study was to increase decision makers understanding and ability to utilize SA to make command decisions in times of crisis. It sought to advance the understanding of developing and maintaining SA. The semi probe questions the decision makers responded to were: 1. Endsley revealed in the development of SA . and working as a team were key components for SA and CDM. and visitors. offer some advice for novice decision makers that would help them to develop and maintain all three levels of SA for CDM in times of crisis management. employees. decision makers must grasp incoming cues and clues. All participants agreed that effective communication. Discuss SA and the effects it may have had on your ability to make command decisions during the events of September 11. 2001. 4. In the height of the chaotic events the STLI/ELLIS decision makers had to quickly develop and maintain SA for CDM. make sense of what those cues and clues mean (in context to other cues and clues that are present and absent). which is an essential part of Recognition Prime Decision (RPD) model for making decisions under stress [8]. 2001 and provide answers to semi-probe questions to enhance the understanding of their lived experiences. and use those cues and clues to formulate mental models to forecast subsequent events [3]. 5. available to STLI/ELLIS decision makers for developing and maintaining SA and its influences on CDM during the events of September 11. 2001. if any. experience. Describe how you overcame the challenges that may have influenced levels of SA in CDM on September 11. Under high levels of stress the STLI/ELLIS decision makers were able to use cues and clues to effectively develop and maintain SA to influence CDM for park resources. definitions and key terms. The attacks were a true test of strength. and interview protocol for the research participants and study. 3. Describe how the levels of SA influenced command decisions on September 11. training. 76 . The procedures for this study involved having STLI/ELLIS decision makers share their lived experiences of the events of September 11. institutional knowledge and memory. FINDINGS The data analysis and findings revealed that the research participants’ responses to SA and command decisions were similar to those reported in previous research studies. Like so many on that day. 2. Discuss any challenges that may have occurred with the levels of SA and CDM. 6. employees and visitors. courage. There was very little information. 7.researcher instituted the following steps: overview of the research. STLI/ELLIS decision makers were the first responders of their park resources. 2001. Share what you learned as a result of developing and maintaining SA to make command decisions during this crisis. these decision makers had to take action and rely on themselves to protect park lands. 2001. As a result. Based on your experience.

There is an opportunity to further explore other public-private organizations and the influences of SA in CDM in times of crisis management. and what knowledge or best practices can be transferred to others. training and working as a team were vital components of SA. 2001. 77 . And the best practices included planning. and communities at large to be prepared for developing and maintaining SA for CDM times of crisis management. This study identified several issues that influenced STLI/ELLIS decision makers’ SA during the event of 9/11: effective communication. institutional knowledge and memory. The purpose of this study was to advance the understanding of STLI/ELLIS decision makers’ ability to develop and maintain SA for command decisions making under high levels of stress. The world continues to experience natural disasters and manmade disasters. In addition. Ericsson. Feltovich. and visitors. J. This research study was conducted to generate further thinking about the three levels of SA and influences on CDM in times of emergencies and crisis management. R. there was a significant finding that can also be further studied. (2006).RECOMMENDATION FOR FURTHER STUDY This study revealed opportunities for future research. M. CONCLUSION The STLI/ELLIS National Monument decision makers played a major role in CDM during the World Trade attacks of September 11. what challenges can impact situational awareness and CDM in times of crisis management. 633-652). employees. In K. To be effective in it will be important for individuals. This was accomplished by examining 5 topics: what are the effects of situational awareness on CDM. The significant finding in this study was that institutional knowledge and institutional memory are of vital importance and plays a significant role in developing and maintaining SA for CDM. The research focused solely on STLI/ELLIS decision makers which was a small sample population. Hoffman (Eds. What unfolded as a result of the study was that experience. These decision makers were responsible for sizing up the situation and making command decisions for the safety and protection of the park resources. Expertise and situation awareness. N. Charness. This study did not seek to define and examine institutional knowledge influence on SA or public-private organizations and their ability to develop and maintain SA during high levels of stress and crisis management. public-private organizations. training and working as a team. experience. how can decision makers understand the importance of situational awareness in times of crisis management. A. & R. and training for decision makers to understand and have the ability to develop and maintain SA in times of crisis management. how can situational awareness contribute to successful CDM in times of crisis management. The Cambridge Handbook of Expertise and Expert Performance (pp. These shortcomings provide for future research. It could be argued that institutional knowledge and institutional memory does influence developing and maintaining of SA for CDM in times of crisis management. New York: Cambridge University Press. R. REFERENCES [1] Endsley.). institutional knowledge and memory. communication. P. reporting systems.

2. (2001). Calderwood. J. Santa Monica. Journal of Experimental Psychology: Learning Memory. R. Local Applications of the Ecological Approach to Human Machine Systems. R. J. E. Mahwah. (2008). M. G. G. In P. (1988). In C. & Weick. [4] Gasaway. The recognition-primed decision (RPD) model: Looking back. K. CA: Human Factors Society. In Proceedings of the 30th Annual Meeting of the Human Factors Society. M. [12] Pennington. 37(6). Orasanu. B. 285-292.) Advances in manmachine systems research . looking forward. Across the Board. [9] Klein. A.[2] Endsley. Management policies: Decision making requirements to identify and avoid impairments. [5] Klein. & Crandall.. [6] Klein. Theoretical underpinnings of situation awareness: A critical review. G. Taking stock of naturalistic decision making. C. Vol. G. Falck. G. In M. E. A. In W. 78 . Journal of Behavioral Decision Making 14:5. Mahwah. R. (1995). N.gov/policy/mp/policies. R. G. 39-48. CT: JAI. M. The role of mental simulation in naturalistic decision making. & Salas. Caird. 208 pages. Decision superiority process model.5. (2000). [11] National Park Service (2006). NJ: Lawrence Erlbaum Associates. Santa Monica. B. Decisions. [7] Klein. http://www. J. (2008). (1986). Greenwich.). A. [10] Lipshitz. & Madni. 331-352. Endsley & d. Capella University. B. Hancock. Rapid decision making on the fire ground. Klein. A. [8] Klein. Vicente (Eds. & K. Madni. Mahwah. NJ: Lawrence Erlbaum Associates. [13] Sorenson. Design and evaluation of situation awareness enhancement. 324-358. (1989).. Situation Awareness Analysis and Measurement (pp. CA: Human Factors Society. R. and Cognition. 521-533. J. . Naturalistic Decision Making . 576-580. R. 14:3. Society for Design and Process Science. A. 47-92. 3-32). & Clinton-Cirocco. C. Explanation-based decision making: Effects on memory structure on judgment. & Hastie.Vol. Klein. In review. AAT 3310697. Rouse (Ed. [3] Endsley. (1997).html.nps. B.R. Garland (Eds.. D. Recognition-primed decisions. 12(4). ( June 2000). In Proceedings of the Human Factors Society 32nd Annual Meeting (97-101). Fireground command decision making: Understanding the barriers challenging command situation awareness. Zsambok & G. NJL Erlbaum. (1988).)..

such as Thomas [15] and Rahim [11]. To put it differently. are required to act as a mediator or a third party. Although there are several scales designed to tap individuals’ behavioral intentions in conflict situations. Amongst scientific studies on organizational conflict. These dimensions. Managers allocate a considerable portion of their time to handle conflicts in their organizations. Dual-Concern Model. Keywords: Conflict Management Styles. THE DUAL-CONCERN MODEL The majority of the conflict management research bases their model on the “dual-concern” framework. b) avoiding (low concern for self and for other). (b) independent variables [3] [10] [8] or (c) mediator/moderator variables [12] [13] [4] [14] in a given conflict management research. contrary to the general assumption. due to its association with both individual and organizational performance. reinterpreted and revised by others. “concern about self” and “concern about other (party)”. we believe that these scales are not congruous with the dual-concern model. namely. Some of these conflict management studies investigate the predictors or the antecedents of individual’s Conflict Management Styles (CMS). This real world significance of this concept also made conflict a reasonably popular research topic among organizational behavior and management scholars. 79 . CMS may be one of the (a) dependent variables [1] [9] [7].edu. subsequently define five conflict management styles (see Figure 1).tr ABSTRACT Dual-Concern model of conflict management styles is the main framework that is adopted by most of the scholars in conflict management field. d) obliging (low concern for self and high concern for other) and finally e) compromising (moderate concern for self and for other). essentially suggests that there are two dimensions that affect individuals behavioral intentions on conflict-handling strategies. those which investigate employees or managers’ “Conflict Management Styles” outnumber the studies on most of the other conflict-related topics. The dual-concern model (although it has several variations). whereas others inquire about the effects or the outcomes of CMS. whether they are directly involved in these conflicts or. and yet others explore the role of CMS in understanding the nature of the relationship between other two or more organizational variables. c) dominating (high concern for self and low concern for other). a) integrating (high concern for self and for other). Factor Analysis INTRODUCTION The conflict concept is one of the most important phenomena in organizational behavior management. which was originally developed by Blake and Mouton [2].THE INCOMPATIBILITY OF THE DUAL-CONCERN MODEL AND CONFLICT MANAGEMENT STYLES SCALES Serkan Dolma Yagizhan Yazar Ozlem Yavas Istanbul University Email: dolma@istanbul.

Instead. Manifold scales are developed. ‘supposedly’ based on this approach to measure individual’s behavioral intentions toward dealing with conflict. The Dual-Concern model is also very popular among applied researchers. The MODE scale [16] had also a wide currency in the past. however. 80 . In other words. The theory. 333-336]. or simply in one these five areas. are utilized by most of the researchers in this field. pp. when facing conflict situations. according to her level of concern for herself and for the other party. Rahim’s [11] ROCI-II and Van de Vliert and his colleagues’ DUTCH [6]. also suggests that none of these five conflict management styles should be seen as a universally best strategy. choose between different styles when handling the conflict based on these two concerns. two axes form a two dimensional coordinate a system which is theoretically divided into five different areas (although some scholars. such as van de Vliert and Kabanoff [17] assert that the styles should be viewed as specific points defined by the two dimensions and not as areas) and one can be positioned in this hypothetical coordinate system. it is stressed that the optimum style is likely to vary according to situational factors and the context of the conflict [5. only two of these scales (or the modified versions of them). and the combination of their level of concern for these two dimensions determine their conflict management style.FIGURE 1 Conflict Management Styles Concern for Self (Party’s Desire for Own Concern) Dominating (Competing) (Forcing) Integrating (Collaborating) (Problem Solving) Compromising Avoiding Obliging (Accommodating) (Yielding) Concern for Others (Party’s Desire to Satisfy Others Concern) The Model claims that individuals.

measurement instruments which are developed based on dual-concern approach would be designed to assess the respondents’ location (level) on the two dimensions. the confirmatory factory analysis is conducted by letting the factors correlate (sometimes after conducting an orthogonally rotated exploratory factor analysis for an additional farcicality). However.but due to its ipsative nature and low psychometric properties. means that one can theoretically encounter respondents that earn high or.e. they do not. Instead. contrary to their intended purpose. their level of concern for themselves and for the other party in a conflict situation. which are formed according to the combination of the respondents’ positions on two aforementioned dimensions. its popularity has decreased in the recent years). these two measurement instruments (and their modified versions) are incongruous with the dual-concern model. “dominating” is only the name of the category (style) whose members have a high desire to satisfy their own concerns. 81 . these so-called five conflict management styles are only the names of the categories. However common it is. curiously. In a typical CMS scale development process. while sustaining a low desire to satisfy the other party’s concern. let alone accepting them as “independent” abstractions. then. One may think that. In other times. It is better to reemphasize that the famous conflict management styles are just the names of the ends of the two orthogonal continua. which is in the center of the coordinate space). It would not be a misapplication to use the dual-concern model as long as the conflict situations of interest are win-win situations (This provision will shortly be discussed later). however. the maximum scores for both of the scales. nor include it in a scientific research as a variable. the Exploratory Factor Analysis (or Principal Component Analysis) is applied with the desire to extract five independent factors (‘independent’. i. naming a state of affairs would be enough to neither consider it as a construct. On the other hand we claim that these popular CMS scales are incompatible with the dual-concern framework and should not be used if the research model is grounded in the dual-concern approach. THE PROBLEM WITH CMS SCALES Let us first make it explicit that we do not recommend completely abandoning the Dual-Concern model in conflict management studies. these scales ignore the two dimensions and try to measure individual’s location on five management styles as if these styles are independent constructs. For example. The constructs that should be of an interest in a CMS study are the two concern dimension. (or dimensions) which theoretically represent an individual’s level of concern for the parties in a given conflict situation (except the compromising style. we believe that deeming these so-called styles as constructs. It should be borne in mind that having two scales to measure the opposite ends of a continuum. is unreasonable. because the default varimax rotation is almost always preferred). In reality. even worse. items that are believed to tap respondents’ intentions (or actual behaviors) regarding five styles are generated first. It is our assertion that.

This could be justified by the condition that she is conversant with the fact that styles are not related with the dual-concern model. If the dual-concern approach is adopted. which supposedly measure two distinct phenomena. Otherwise it would not be possible to talk about two separate dimensions since an increase in concern for self automatically means a decrease in concern for the other party.The absurdity of accepting conflict management styles as constructs and trying to measure them. Suppose that a gym teacher seeks to measure her students’ heights. what would be a totally senseless possibility. Reliability and validity analyses (especially factor analysis) should be conducted separately for these two constructs. which means making it possible for a student be a tall and a short at the same time) instead of developing a scale to measure the heights of the students? Another example. in lieu of using the existing five-factor CMS scales. where both parties can. CONCLUSION To conclude. “avoider” and “collaborator”. therefore reliability and validity analysis should be conducted separately for each one of the styles. tries to assess the level of her employees’ job satisfaction. probably called “highsatisfaction” and “low-satisfaction”. as long as win-win conflict situations (i. What is more. (An even better practice would be using Rasch analysis in place of factor analysis due to its sounder measurement philosophy and lack of interval scale assumption). at least theoretically. REFERENCES 82 .e. an employee can theoretically and practically have the highest scores on both of these scales. measuring and categorizing a student as short and tall at the same time is equivalent in nonsensicality to simultaneously considering a conflict party as for instance. our recommendations for researchers who are interested in conducting a study on conflict management styles are enumerated below: There is nothing problematic about using the dual-concern model as a framework for studying CMS. should be viewed again as individual constructs. it is inappropriate to apply a single factor analysis for all of the items of a given CMS scale as if these items were indicators of a single construct. however. One may still have an interest in including all or some of the renowned five conflict management styles. develops (or use) two different scales. Other than that. aiming to measure these two constructs. benefit or win) are of interest. would be when a manager.. Would not it be ludicrous if she devises two different scales to measure the “shortness” and “tallness” of the students. For example. but rather than creating (or using) a single job satisfaction scale. (while letting a student have a maximum score in both imaginary scales. rather than trying to measure the two “concern dimensions” can be best illustrated with examples. non-zero sum situations. one should determine the concern for self and the concern for others as her constructs of interest and should develop two distinct unidimensional scales. The only difference between using CMS scales in a conflict management research and the above examples is that CMS scales are two dimensional. These styles.

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[16] Thomas. H.. W. 147168. Thomas-Kilmann Conflict Mode Instrument. H. Academy of Management Journal. Chicago.[14] Shih. E. (1976). 33:1. (Ed. and job performance in public organizations. ‘Conflict and conflict management’ In: Dunnette.) Handbook of Industrial and Organizational Psychology. International Journal of Conflict Management. (2010). emotional intelligence.D. 21:2. K.. 199-209. Palo Alto. & Kabanoff. Consulting Psychologists Press. & Susanto. 84 .. 889-935. Rand McNally. Vliert E. B. K. CA [17] Van de. Conflict management styles. Toward theory-based measures of conflict management. (1990). (1974). M. [15] Thomas. R. & Kilmann.

mefford@usfca. Our objective is to investigate empirically the tradeoffs that will arise from using a protective put strategy for hedging retirement portfolios over an investment horizon that is long enough to be comparable to the average holding period for retirement portfolios Keywords: risk management. we should not expect the protective strategy to produce excess returns. portfolio design INTRODUCTION The recent market crash which has led to as much as a 47% drop in the value of the S&P500 index has made some of us wonder if there is a cost effective way for us to hedge our retirement portfolios against such a drastic loss. 415-422-6100 ABSTRACT The recent market crash which has led to as much as a 47% drop in the value of the S&P500 index has made some of us wonder if there is a cost effective way for us to hedge our retirement portfolios against such a drastic loss. University of San Francisco.edu. 415-422-6408 Nicholas Tay. has been buy and hold for the equity portion of the portfolio. VaR. doyleb@usfca. Would the losses that could be averted with the protective put strategy justify the hedging costs for a long term investment strategy? From an efficient market view point. a straight forward approach to hedge against such downside risk is to simply long a put (protective put) on the S&P 500 index.edu. Results are presented in Section III. University of San Francisco.BLACK SWANS AND RETIREMENT STRATEGIES: IS “BUY AND HOLD BEST? Barry Doyle. if the put option is correctly priced. to the advocacy of Vanguard’s John Bogle. Numerous people in the academic and practitioner fields have advocated this. Our results favor the use of a protective put strategy for hedging retirement portfolios. Since the modern day option markets were not developed until the 70s. recent studies [12] [13] have suggested that market participants tend to underestimate the likelihood of black swan events. options could be underpriced and this may make it worthwhile to pursue the protective put strategy described above. any long-term investment strategy. we have a relatively short period of time series of actual option price data. to the recent advice of popular advisors such as Suze Orman.edu. Our objective is to investigate empirically the tradeoffs that will arise from using a protective put strategy for hedging retirement portfolios over an investment horizon that is long enough to be comparable to the average holding period for retirement portfolios. In the case of a portfolio that tracks the S&P500 index. 415-422-6129 Robert Mefford. beginning with Burton Malkiel’s academic classic “A Random Walk down Wall Street”. The conventional wisdom for retirement planning and. However. University of San Francisco. However. If this is true. tay@usfca. the recent drastic plunge in 85 . In a later section we describe how further extensions of this work will provide more robust justification for our strategy. indeed. Black Swan event.

Of course.25 [6] [8]. If this condition did not exist.6%. current market prices reflect all available public information. Most of the advocates of buy and hold have made the implicit assumption of “semi-strong” market efficiency. From a practical perspective. on average. if you missed the best 50 days. If you could avoid the worst fifty days. Further. exhibit superior performance over subsequent time periods Portfolio theory has generally focused on achieving an efficient portfolio: one that achieves the minimum amount of risk for a given level of expected return.90. for example) . avoiding the ten worst days would generate ending wealth of $28. However. Clearly there are good reasons for advocating the buy-and-hold strategy.Or you could have just bought the gold ETF and made 17%. the cost of any type of portfolio insurance should offset any gains associated with avoiding the impact of the worst performing days. attacks on the value of portfolio theory often center on comments such as “…. a buy and hold strategy will generate ending wealth of $15.2%. There is ample empirical evidence in the literature that show that on average active professional money managers are unable to outperform a passive index (see [10]. That’s the difference figuring out which way the wind is blowing can make” [4]. your mean annual return would have been a mere 2. Conversely. Absent access to inside information. though. Conversely. Malkiel [11] and others find the performance of most professional money managers to be inconsistent from one period to the next which suggest that these managers are not skillful investors and therefore it is useless to invest in actively managed mutual funds. the answer to the preceding question should be “no”. missing the ten best days over this time period would have reduced your ending wealth to $8.07 from an initial $1 investment. attempts to time the market will ultimately prove fruitless. The value of market timing should not be underestimated.equity value is making some of us wonder if the buy and hold strategy is in fact the best approach to retirement planning. Analyses of other time periods yield similar results. In the popular business press. This result emphasizes the danger of attempting to time the market (and “missing”). the question arises: absent market timing skills. In the period from 1978 until 2005 the S&P500 earned a mean annual return of 9. Fund managers that have superior performance over one time period do not .7%. One well known piece of evidence from the Vanguard Group shows that on average actively managed equity mutual funds underperforms the Wilshire 5000 index by about 1.09% annually for the period from 1972 to 2001. in the period from January 1960 through December 2008. generating superior returns is easy if one knows how the market will move next month or next year. your mean annual return would have been 18. we show evidence that a strategy exists that will outperform basic buy and hold investing over the long term by taking advantage of potential inefficiencies in the pricing of 86 . or even tomorrow. that is. However. portfolio managers would exploit any existing inefficiencies and drive insurance prices into equilibrium. can an investor avoid some of the losses associated with the worst performing days without sacrificing the gains associated with the best days? Does one need a crystal ball to achieve superior performance? In an efficient long-term investment market. In such a market.

as noted in the introduction. The value comes from the long-term application of this strategy. Whenever historical data is used to predict future events. We further demonstrate that the value of our strategy arises from the existence of “Black Swan” events: rare events that have a large impact on outcomes. Of course. as it will underperform the benchmark 87 . As such. Casual observation. in the markets than are inconsistent with underlying distributional assumptions of B-S. consistent long-term mispricing of long put options must exist. Our strategy requires the annual purchase of put options on the S&P 500. The existence of swans by itself should not provide an adequate explanation for the availability of a strategy to generate long term returns in excess of a buy-and-hold strategy. this return characteristic is often described as being “fattailed” relative to the normal. Why might one expect to observe systematic mispricing of a widely traded financial instrument? Estimated option prices derived via the Black-Scholes (B-S) model are highly sensitive to volatility. suggests that a substantial portion of returns to the S&P 500 (as well as any well-diversified equity portfolio) are contained in a relatively few number of days. as well as providing a possible explanation for our observed results. Both of the factors influencing model reliability form the core of our motivation to develop the theory. We observe large price swings. by definition. rare. The impact of a few days of unusual returns on long term returns. one must choose an appropriate historical time period over which to make estimates. and substantially outperform it on an infrequent basis. First. The very nature of it takes advantage of the large gain associated with the swan events against the relatively small outflows required to maintain the position. As a consequence. Research has shown that large daily returns occur more frequently than are consistent with a normal distribution. other model inputs are generally known with a fair degree of certainty. substantial monthly cash outflows are required to follow it. the B-S model assumes that volatility has a normal distribution. Second. Several articles [1] [7] have questioned the reliability of underlying distributional assumption of B-S. We show that a strategy of consistently “rolling over” a long position in one year put options yielded a long-term return that exceeds the return associated with a simple buy and hold strategy. Since the model volatility input is forward-looking--. STRATEGY DESCRIPTION AND MOTIVATION Motivation For our strategy to provide superior performance. this process assumes that the future distribution of events will approximate past distributions. one may estimate volatility from historical data. We characterize these influential events as “Black Swans” (henceforth “swans”). both positive and negative. discussed earlier.the volatility that will occur over the time to expiration--. this implies that returns to this strategy will underperform a buyand-hold for most periods.S&P 500 index put options. is well known. The motivation is likely to be found by examining the time horizon over which the strategy operates. though. As swans are. two major factors influence the reliability of the estimate: first. The existence of this apparent opportunity for excess long term returns must have another motivation. following the strategy requires considerable discipline. confirming the fat-tailed nature of observed return distributions.it is implicitly unknown.

at-the-money options are generally more liquid than other options. In practice. DATA AND RESULTS We use data from VFINX (Vanguard Index Trust 500 Index). We have made the following assumptions in constructing the graphs: • • Contribute $10. the number of puts purchased will rise as the portfolio accumulates value. new options are purchased in the same fashion. Implied volatility is the volatility consistent with the current market price of the option according to the B-S pricing model. as the base equity portfolio. The intended market for this strategy is not sophisticated investors. we purchase at-the-money put options (or. Description To implement our strategy. this is appropriate for the average investor with a 401-k type retirement asset that wishes to provide some insurance against a dramatic decline in asset values. These long near-the-money puts provide a form of portfolio insurance. other forms of insurance may well provide better results. In the other we simulate an investment in one year treasury strips. These “near-the-money” options are used for this strategy to take advantage of the relatively well known characteristic of the put option “smile”. a portfolio consisting of the S&P 500 index is formed. the option position pays off in the event of a drop in the underlying portfolio. this strategy to not provide higher ending wealth than a basic buy-and-hold. we simulate a 1-year constant maturity treasury portfolio that invests/rollovers the entire contribution annually in treasury bonds with one year remaining to maturity. As noted in the Introduction. We also use two treasury investments as a benchmark. a priori. the put option that is closest to at the money). more precisely.000 annually in each of the portfolios from Dec 96 to Dec 2008 The buy and hold portfolio invests the entire contribution in SP500 index or VFINX 88 . specifically. the implied volatility of put options is lowest for at the money options. As the option expires in the following year. Certainly. We construct the protective put portfolio by purchasing long positions on 365 day index put options such that there are just enough puts to cover the amount invested in the portfolio at the beginning of the time period. one would expect. the number of index put options is equal to the value of the portfolio. as the option premiums should offset any gains associated with the insurance payoff. and are a potentially fruitful avenue for future research. thus generating the “roll-over” strategy. Further. The results of our analysis are shown in Figure 1. We provide results only for the rather simple strategy of buying one year put options on the S&P 500 index for a very pragmatic reason. During each year that the portfolio is in existence. rather. In one. The implications of this will be explored further in the Results section following. thus reducing the spread associated with the transaction.during most time periods. a tradable index security. Consequently.

[3]. such an analysis. is uncomplicated. of course. the protective put portfolio will underperform a buy and hold one. retirement or not. A more robust argument may be made by estimating option prices in earlier years based upon historical volatility. The results over the specified time period of 1996 to 2008 show that the protective put portfolio is superior to the buy and hold strategy. In effect. the bootstrapping methodology would assume that observed market returns over the past decades represent samples from a larger underlying population. Chernick. Investors look at these returns as well. as applied to this paper. 89 . which begs a rather obvious question: since this strategy. but are suggestive of the value of such a strategy in a volatile market. why isn’t it widely used? A possible explanation lies with the manner in which portfolios are measured . would still not provide a rigorous justification for following this retirement strategy. while showing the superiority of the protective put versus a buy and hold strategy. 1-year. By analyzing multiple simulations. In brief. The 1-year constant maturity treasury portfolio invests/rollovers the entire contribution annually in treasury bonds with one year remaining to maturity The 365-day zero coupon portfolio invests the entire contribution in 365-day zero coupon STRIPS. However. notably B-S. do not provide compelling evidence of such a strategy providing superior performance in future. Our results indicate that the protective put strategy may well be superior to a buy and hold. by design. the puts purchased are at-the-money or nearest to the money 365-day puts. Virtually all portfolios. while providing more evidence than the restricted sample that we provide. A proposed approach to providing a more robust justification is to use a bootstrapping technique to evaluate our proposed strategy. The business literature. A challenge for managers of a portfolio based upon these results would be as follows: how to convince investors that underperformance for substantial periods of time (a likely occurrence) is in their best interests. both academic and popular. specific to this particular time period. is filled with stories about how managers focus on short term performance. During “normal” return years. and often base investment decisions based upon them.• • • The protective put portfolio invests the entire contribution in a mixture of SP500 shares and long positions in put in such a manner that there are just enough puts to cover the investment in the SP500 (VFINX) shares that are held in the protective put portfolio. and perhaps 10-year performance measures. and Davison & Hinkley [5] provide a comprehensive overview of bootstrapping technique. one may make robust inferences of the value of the proposed strategy versus a buy and hold one. The results are. one can argue that if index options existed in the earlier parts of the twentieth century. The results presented here. then the prices of such options would be consistent with the inputs of current options pricing models. using samples from the observed returns distribution. provide quarter. IMPLICATIONS/FUTURE RESEARCH POTENTIAL The current results obtain only from late 1996 as index options were not widely available prior to that time. 5-year.

Yan. M. Nickels versus Black Swans: Reputation. R. 2002 [11] Malkiel. and M. Bootstrap Methods. Such a portfolio will often underperform a similar buy and hold strategy over many shorter holding periods. and the Dow. H.. Hinkley. This type of portfolio is designed to be held long term. and N. edited by Don Luskin.). [4] Considine. REFERENCES [1] Abbas. . . 1999. Black Swans. 1988 [10] Ibbotson. D.R.H. Working Paper. Portfolio Insurance: A Short Introduction. E.. C. A practitioner's guide. Taleb. 08-26. S. S. [13] Taleb. Bootstrap Methods and their Application. The evolution of portfolio insurance in Dynamic Hedging: A Guide to Portfolio Insurance. Article 64111 [5] Davison. Yale ICF Working Paper No. S. 2008. [2] Bouye. 1995. [7] Goldstein. [3] Chernick. 2007. 2009. Seeking Alpha.. Market Timing. Working Paper. 50. SSRN #1416790. [8] Harris. [12] Mallinaris. Results suggest that such a strategy may be superior to a buy and hold strategy. Returns from Investing in Equity Mutual Funds 1971-1991. (8th ed. We argue that this strategy is particularly well suited for retirement portfolios. 2002.. B. Hedging the Black Swan: Conditional Heteroskedasticity and Tail Dependence in S&P 500 and VIX. Rubinstein. and Asset Prices. Investing: In Search of Better Odds in Retirement Planning. [9] Leland..CONCLUSION We have proposed an alternative equity investment strategy: purchase one year index put options to provide protection against sharp downturns in the market (black swans). Black Swans. Random House. Cambridge: Cambridge Series in Statistical and Probabilistic Mathematics.. Nassim. G. D. SSRN# 970480. Wiley Series in Probability and Statistics. John Wiley and Sons. 2006. E. The Black Swan: The Impact of the Highly Improbable. Poon and J Tawn. J. 2007 90 . and we have purposely constructed in to be simple and easily replicated by a typical investor with a 401-k type of retirement holding. [6] Estrada. Working Paper. Do Winners Repeat With Style? Summary of Findings. Trading Strategies. 2009. SSRN #1086300. We Don’t Quite Know What We Are Talking About When We Talk About Volatility. Portfolio Theory and Market Timing: 12 comments. and A. NY Times. 2007. and H. Patel. Working Paper. 2009.. Ibbotson Associates. A. Journal of Finance.

and liquidity risk were all inadequately modeled by supposedly sophisticated financial institutions employing dozens of financial engineers with advanced degrees. and equity markets plummeted. no income verification mortgages issued by many reputable financial institutions may have started the problems. University of San Francisco. The problems would probably not have grown to be a global financial crisis if so many other financial institutions had not purchased these risky assets including many banks in Europe and hedge funds around the world. With increasing power of computer 91 . What had caused so many prominent financial institutions to succumb in such a short time? The common explanation is sub-prime mortgages defaulting. many had invested millions of dollars in risk modeling and believed that they had a good handle on risk management. but the real problem is much more fundamental—a failure of risk management. liquidity dried up. University of San Francisco.edu. tay@usfca. Correcting these modeling flaws is one approach to preventing a reoccurrence. there are some flaws in the models used by financial firms to assess risk. 415-422-6129 Robert Mefford. and interactive and systemic effects were improperly modeled. Merrill Lynch had been acquired by Bank of America. Wachovia merged with Wells Fargo. volatility. The outcome became a financial crisis leading to a global recession which still continues. and reliability engineering Keywords: risk management.edu.WHAT FINANCIAL RISK MANAGERS CAN LEARN FROM SIX SIGMA QUALITY PROGRAMS Barry Doyle.edu. doyleb@usfca. The no down-payment. mefford@usfca. 415-422-6100 ABSTRACT As the financial crisis of 2008 has revealed. It is now clear that some of the underlying assumptions of the statistical models utilized were seriously flawed. Black Swan event. Credit. Once the dominos began falling. How could these sophisticated financial institutions have been so wrong in their assessment of credit and market risk? After all. another approach is suggested by Six Sigma quality programs used in manufacturing and service industries. Bear Stearns had been considered one the best Wall Street firms in managing risk. American International Group (AIG) was bailed out by the federal government and many hedge funds have failed. Some basic tenets of the Six Sigma programs are directly applicable to improving risk management in financial firms and in portfolio design. However. These include the features of over-engineering. 415-422-6408 Nicholas Tay. and Washington Mutual with JP Morgan Chase. but they would not have spread worldwide without the explosive advance in securitization of these assets (Collateralized Debt Obligations or CDO’s) by financial firms and the high credit ratings assigned to them by the rating agencies Standard & Poor’s and Moody’s. VaR. University of San Francisco. Within a few months Lehmann Brothers had gone bankrupt. portfolio design INTRODUCTION In March of 2008 Bear Stearns was acquired by JP Morgan Chase after becoming insolvent. robust design. Six Sigma.

Clearly there were some critical elements in the risk models that caused them to fail when they were most needed. This means that rare events such as a sharp fall in a market occur much more frequently than a normal distribution would predict. statisticians. In the next section we will examine some of the deficiencies of these models. The probabilities were based on historic price and volatility data for various types of assets.e. as recent events have dramatically illustrated some of the underlying assumptions are clearly not valid. By specifying an acceptable confidence level for unlikely occurrences (such as a 20% chance of a fall in the price of a stock). 92 . The 2008 crash can be seen as a Black Swan event that the models did not predict. what can a risk modeler do? Suggestions will be offered below on how to mitigate the consequences of such events. often driven by competitive pressures. [8]. a probability so small that it can be neglected and is essentially unpredictable with conventional forecasting models [16]. has an extreme impact. With the Gaussian model an event like the September 29. but they confidently used them to take ever-riskier positions to increase profitability. The Cauchy curve is leptokurtic. Since a Black Swan event cannot be predicted. risk managers could feel comfortable that these rare events had such a low probability they could be neglected. firms were able to build complicated models using advanced statistical techniques and Monte Carlo simulations. meaning it has much more area in the tails (i. It is based on the Gaussian or normal probability distribution widely used for many applications in business. and computer scientists. Very few top executives responsible for risk management likely understood these models. A three sigma confidence level indicates a 0. education and other fields. This stochastic approach to risk management seemed safe and reasonable as long as the underlying assumptions of the statistical model are valid.3 percent chance (3 in 1000) of the event occurring. The last section draws some conclusions. science. These Black Swan events happen much more often than any Gaussian model can predict.hardware and software. drop in the DJIA of 777 points or 7% had a probability of 1 in a billion. The most serious flaw in the VaR models is the assumption that the underlying distribution is Gaussian when in fact it is often Cauchian. [5]. However. In subsequent sections Six Sigma quality programs will be explained and it will be shown how the process and methods of Six Sigma can be applied to financial instrument and portfolio design. There is much evidence that many asset prices follow a distributive pattern that is closer to a Cauchy than a Gaussian distribution [10]. 2008. a fat-tailed distribution) than the normal distribution. To develop these models they hired dozens of mathematicians. and is retrospectively (though not prospectively) predictable. Short-term oriented compensation schemes fostered excess risk-taking in many of these financial firms. Taleb [14] defines a Black Swan event as one that is rare. Few believed that there were any flaws in the model. even with a low probability (which would make it a Grey Swan event). The case will be made for robust portfolio design and reliability engineering used as the way to achieve robustness. FLAWS IN RISK MODELING The most commonly used model to measure risk is the VaR or Value-at-Risk. physicists. and a new profession was created—the financial engineer.

Therefore. The basic idea behind Six Sigma is to reduce variability in processes to improve quality and increase efficiency. designing in very high levels of individual component performance is essential to reliability of the finished product. these objections are not valid. hospitals.000 parts and components. and other factors all affect process results. An example is a metal plating process where temperature. Mean shifts. Rather than assume that we are correctly modeling the underlying distribution with the Gaussian. as it is assumed likely to do. This concept is used in product design where failure of one component can lead to failure of others and even complete product failure. Design of financial products can also take account of the interactive effects of the 93 . To many observers this seems like an unnecessarily high level of quality that is not only unattainable but too expensive. The name Six Sigma refers to six standard deviations from the mean. when one considers several characteristics of products and processes as well as how Six Sigma programs are carried out. etc) and improved process efficiency far outweigh the costs of implementing the program [4]. An example is an auxiliary power or hydraulic system on a airplane that kicks in if the main system fails.SIX SIGMA QUALITY PROGRAMS Beginning in the 1980’s at Motorola Corporation. The cost criticism can be rejected based on the experience of companies like GE that have found that the savings from reduction in defects (i. the overall reliability of the product is about three sigma (3 defects per thousand). Six Sigma quality programs face a similar problem in complex processes with many interacting variables. This suggests one fundamental aspect of Six Sigma that has direct applicability to financial modeling—what we might call over-engineering. Many products have more than one thousand parts—a car has about 2000-3000 parts and a jetliner 200. A further weakness of traditional financial models is the interactive effects between financial instruments and markets. another weakness of financial models. in Six Sigma the confidence level is still very high. Six Sigma has developed ways to analyze these interactive effects and determine the best combination of variables to maximize process efficiency. For a product with multiple parts.e. humidity. the high levels of sigma applied provide a much greater safety margin than the normal three sigma assumption of VaR. is allowed for explicitly in Six Sigma by targeting a high level of standard deviations. and even government. each one having a reliability of six sigma. the reliability of the product is a multiplicative function of the reliability of its component parts. Six Sigma builds in a margin or error for fat tails. rework. Although Six Sigma statistical processes are also based on the normal distribution. Even if the mean does shift. scrap. Especially when components operate in series it is essential to build in high levels of reliability and use redundant systems as backup. in a product with a thousand parts. For example. fluidity. This again illustrates the concept of over-engineering the process to account for rare but expected or unexpected occurrences. Another element of Six Sigma that has applicability to financial risk modeling is reliability engineering. Six Sigma quality programs have slowly spread through American manufacturing and recently have been applied in service businesses like banking. warranties. However.000-300. This signifies a level of quality equal to three defects per billion opportunities based on the normal distribution.

It would involve extensive stress testing and simulation of performance under a variety of conditions. the failure of risk managers to account for systemic risks in investment portfolios contributed to the financial crisis. The analogue in financial product design would be to perform statistical tests and simulations using historical data to determine the density distributions of the instruments. not by the quant’s developing the products. More advanced measurements would attempt to find the systemic effects on the portfolio of liquidity and credit crises. Applying a Six Sigma Approach to Risk Management Six Sigma quality programs emphasize a process approach to improving system reliability and performance. This concept will be considered in the next section along with other suggestions and a process for applying Six Sigma to the design of financial products. In this section we will discuss how the DMAIC process can be used by financial firms to better design investment products and control for risk. The most widely used framework is the DMAIC process developed at General Electric which includes the following steps: Define Measure. and Control (DMAIC). These interactive effects 94 . financial engineers will not have clear guidance in terms of the products they should develop. A process approach stresses the sequencing and interactive effects in a system rather than compartmentalizing the steps and activities. The third stage of the DMAIC process is to Analyze. A process capability study determines the distribution of results of a machine or process in terms of a density function (usually the normal distribution) to see if it can meet design specifications. Improve. This same approach is applicable to portfolio design for financial instruments and risk management systems for these portfolios. For financial products this could involve the technique called Design of Experiments (DOE). the types of instruments that can be considered. Without these parameters clearly defined. The first stage in applying the DMAIC process to portfolio design is to Define the types of financial products to be considered in terms of the desired return to risk profile. interactive effects between financial instruments such as varying and asymmetric correlations were poorly understood and modeled. As the recent financial crisis illustrates. The goal of these tests would be to ascertain how the instruments perform independently and together in a portfolio. The second step in the DMAIC process is to Measure. As was discussed above. For example. This method has been used in manufacturing for many years to determine interactive effects in processes.instruments and markets and attempt to build in reliability. and the investment horizon. this failure to have clear goals and constraints led to some products being offered that were not well thought out and introduced a high level of unexpected and undesired risk. For financial instruments this could be done by simulation methods. As noted above. This was a deficiency in the design of many of the financial products that imploded in 2007 and 2008 such as CDO’s. In a manufacturing process this would normally involve collecting statistical data and finding process capabilities. For a financial instrument this would involve finding the distribution of returns over a period. DOE provides a tool to analyze these kinds of influences on an investment portfolio. These of course should be determined by top management of the firm. various asset categories could be combined in a systematic way in hypothetical portfolios to see how they perform under differing market scenarios. Analyze.

but can be an effective hedge against credit risk if used properly. The overall process for designing and controlling financial products following the DMAIC model will allow for a more systematic and thorough process that has the potential to prevent some of the problems which surfaced in the recent financial crisis. It should be at a high enough level in the firm to have real control which was a problem with some of the financial firms most impacted by the recent crisis where control responsibility was diffuse and ineffective. In the next section we will discuss the case for robust portfolio design. This can take the form of parallel systems that backup the primary system in case of failure. Standardization tends to make physical products more robust because of fewer number of parts reducing complexity and interactive effects and the streamlining of assembly and testing improving quality and reliability. CDF’s contributed to the recent financial crisis because of the huge volume outstanding and their lack of transparency. The first of these is reliability engineering. they are the main focus of the last stage for financial products. Although risk management issues should be considered throughout all five steps in the process. The last stage of the DMAIC process is to Control. Redundancy is an essential element in complex products to assure reliability. and a more integrated and rational process is clearly called for. To Improve is the next step in designing financial products by the DMAIC process. and reporting roles. There are various ways to achieve this in an investment portfolio by taking offsetting long and short positions and the use of options. This is accomplished through several techniques including standardization and redundant systems as well as the previously discussed DOE. The most important part of the control process is assigning clear-cut responsibility for this activity. Applied to financial products the analogue would be to use established financial instruments that have a track record of performance under different market conditions rather than new and customized instruments. Compensation systems should not encourage excessive risk taking. Here a couple of techniques from the Six Sigma tool box can be useful.are a key element in another portion of analysis of portfolios called stress testing. Stress testing using DOE and simulations can provide valuable insight into how investment portfolios will respond under different economic and market scenarios. The ad hoc and diffuse nature of risk management in many financial firms was revealed during this crisis. sales. Control also involves frequent reporting of essential information and separation of the trading. For hedging against counterpart risk. In the case of financial products this could be achieved by the use of financial hedges that will offset any opposite movement in the underlying instrument. Credit Default Swaps (CDF) can be used. They were undoubtedly being used as a speculative instrument rather than a hedge by many of the participants. Reliability engineering involves designing products to be robust under difficult operating conditions. The concept of portfolio insurance is relevant here. 95 . The systemic effects of disappearing market liquidity and rapidly changing credit-worthiness on portfolios were poorly modeled in the recent crisis. A common hedge is to take out-the-money puts to hedge against a large market drop.

Goh. over-margining of positions. In contrast Basel-II did not provide the necessary protection to banks that it was designed for. Not one derivates exchange experienced distress in the crisis [15]. private equity funds. As was mentioned previously. Basel-II was based on a belief that banks had sophisticated risk modeling and could establish the levels of capital needed to assure solvency. However. The primary approach to establishing margin requirements at most derivative exchanges is the SPAN (Standard Portfolio Analysis of Risk) developed by the Chicago Mercantile Exchange (CME) in 1988.The Case for Robust Portfolio Design The financial crisis that began in 2007 affected many financial firms in commercial and investment banking. The margins that counterparties must maintain with the exchange are very conservative. Attempts have been made to improve upon VaR which have some potential. ES allows losses to be calculated in the tail of a fat-tailed distribution whereas VaR does not. et al [7] recently developed PVaR for Partitioned Value-atRisk. These are the derivatives exchanges throughout the world. But one major category of financial institution escaped the havoc. His model is able to explain some anomalies in financial markets such as negative volatility skewing and realized 96 . deterministic non-linear transformation of a log-normal hidden process. In the next section we will discuss some new approached to stress testing and reliability engineering methods that can contribute to robust portfolio design. This conservative approach worked well with the chaos in the global asset and credit markets in the face of a sudden increase in volatility and correlation breakdowns. Varma [15] calls Basel-II a “sophisticated but fragile” system in contrast to the derivatives exchanges risk management approach which is “crude but robust”. It is a financial equivalent of over-engineering. This can be accomplished by using a power law as described in Varma [15]. Increasingly there is interest in Expected Shortfall (ES) models that focus on the area in the tails of the distribution rather than the cutoff at 95% or 99% confidence levels as VaR does. He does not assume stationarity nor normality and thus his approach can deal with asymmetric and leptokurtic distributions. these risk models were mainly VaR types of models and proved clearly inadequate to the task. Their method divides the asset return distribution into positive (gains) and negative (losses) half-spaces. The ES models are specifically designed to measure the potential for large losses and the amount of capital required to be prepared. The reason for this is that derivative exchanges apply. Pang’s [12] approach models the stock or option prices as a simple. SPAN calculates the potential worst-case asset loss based on several price and volatility scenarios to set the margin. The need for a conservative approach and a margin of safety is revealed here. asymmetrical and non-normal distributions cannot be modeled adequately using VaR techniques. hedge funds. Reliability Engineering for Robust Financial Products The obvious failure of risk management models based on VaR has triggered a search for new approaches that improve upon VaR or replace it. Several methods that adjust VaR for asymmetries and non-normality were discussed in the previous section. and insurance companies. This generates better risk-return tradeoffs for portfolio optimization than the Markowitz model and is useable when asset return distributions are skewed or abnormal. and have applied for years.

Other methods of portfolio insurance will probably be developed in reaction to recent events allowing for further refinement of reliability engineering for investment portfolios. the portfolio must be over-engineered. 97 . These positions can be costly in terms of return that is sacrificed to reduce risk. This can be accomplished through several hedging methods that provide portfolio insurance. and the investor is much better off to insure the portfolio against extreme events. of course. By definition Black Swan events are unpredictable and thus cannot be mathematically modeled [14]. Since these events can have devastating effects on an investment portfolio. must assume some risk to do so. Conversely. They are able to represent graphically “wild randomness” after the fact but are not useful for prediction [2]. an investor who missed the 10 best days during this same period would have a portfolio 65% less valuable than a passive investor. But to be truly robust. but this can break down as markets become more correlated in times of market stress. For a series of premium payments counterparty risk can be transferred to someone else. This has application for options pricing and determining hedge ratios as well as giving indications of rich-cheap stocks or options. Predicting these market booms and busts is practically impossible. To reduce the premium cost further one can write an offsetting option but. Simulations [6] find that out-of-the-money put options reduce ES and coincident extreme losses. particularly in the short-run [2]. There are several persuasive reasons to insure an investment portfolio against large and unexpected losses. Portfolio insurance methods include the use of offsetting long and short positions for price and market risk.volatility being lower than implied volatility. how can an investor or a firm prepare for them? There is no way to completely prepare for an unpredictable event but one can certainly mitigate its effects. Building portfolios to maximize returns and minimize volatility using historical data and sophisticated models is essential in portfolio design. The flaws in the VaR models were discussed above and include non-normal distributions with fat-tails and skewness and non-stationarity. This of course assumes that the CDS counterparty does not themselves default which has turned out to be a problem in the recent credit crisis. It has proven extremely difficult to “time the market” and foresee changes in direction. To insure against counterparty risk one instrument that can be used is the Credit Default Swap (CDS). Diversification across asset categories and countries can provide some degree of risk mitigation in a portfolio. The most obvious is the revealed weaknesses of VaR models to protect against large losses. Estrada [3] found that if an investor had been able to avoid the 10 worst days on the NYSE from 1900 to 2006. In an investment portfolio this can be accomplished through the Six Sigma methods outlined in this paper. This leads to poor performance of these models. CONCLUSIONS Fractal models can mimic what happens in market crises [11]. they would have had a portfolio 206% more valuable than a passive investor in the Dow Jones Industrial Average (DJIA). Another hedging method is to use options. Far out-of-the-money options can be used to insure against extreme price moves at a modest cost of the premium which is low for such options.

Journal of Political Economy. B. . REFERENCES [1] Black.. W. Portfolio Value-at-Risk Optimization for Asymmetrically Distributed Asset Return. 2009. and R. [14] Taleb. M. Capital Asset Prices: A Theory of Market Equilibrium. 2008. 1963. 98 . Mitra. Three key concepts of Six Sigma quality programs have direct applicability to design of investment portfolios. . Lindsay. 36. 244-280 [6] Goldberg. K. These are the principles of over-engineering. 2008. The (mis)Behavior of Markets. 2009. [5] Fama. and W. 1952. Menchero. Models of Stock Returns—A Comparison. H. 77-91 [10] Mandelbrot.Y. [12] Pang. The Pricing of Options and Corporate Liabilities. the result is a robust design for the portfolio that will be able to respond in predictable ways to both expected and unexpected market shocks and survive Grey and Black Swan events. Seeking Alpha. 47.1-29 [7] Goh. Indian Institute of Management. 1965. 2009-02-06.J. Journal of Finance. B. 637-654 [2] Considine. 81(3). 2009.. 2007 [15] Varma. and other instruments and requires stress testing and simulation to build in reliability and robustness. 39.. J. New York: Random House. 64111 [3] Estrada. robust design.New York: Basic Books.. J. S. Reliability engineering provides an extra layer of protection using portfolio insurance methods to hedge for extreme events using options. G. Journal of Finance.. J. “Portfolio Selection”.. Journal of Finance. Credit Default Swaps. and reliability engineering. Managing for Quality and Performance Excellence. Thomson/South-Western.. Extreme Risk Analysi”. and develop financial products with an integrative plan-achieve-control structure as part of the process. H. James R. and the Dow. and I. 1984. September 1964. 7. Journal of Business. Black Swans. L. Black Swans. It provides a structured approach to collect data. Mason. J. Scholes. Hayes..F.P. The Variation of Certain Speculative Prices. 147-165 [9] Markowitz. Eugene. F. 2007. Journal of Business. Portfolio Theory and Market Timing: 12 comments. 394-419 [11] Mandelbrot. The Behavior of Stock Prices. MSCI Barra Research Insights. Hudson. Sim. Lim. N. analyze it.First. A Novel Simple but Empirically Consistent Model for Stock Price and Option Pricing. SSRN 1374688 [23] Sharpe. Over-engineering of a financial product involves combining different instruments that provide an optimal returnrisk tradeoff that is immune to extreme tail events. Ahmedabad W.. . SSRN 1394922 [8] Kon. M.. Risk Management Lessons from the Global Financial Crisis For Derivative Exchanges. 2004. If well done. and William M. SSRN 1086300 [4] Evans.M. 1973. No.. Market Timing. OH. 2009. Zhang. & M. the Six Sigma process can be applied to the design of risk management systems. Article. The Black Swan.

99 . President Obama plans to push through the Employee Free Choice Act. Johnson [2]. A recent study published by Cornell University provides a data-driven look at the claims in the EFCA controversy. aescham@ymail. However. 82. Aeschleman Caterpillar Inc. While much has been written on the direct impact of these laws and unionization in general on companies. Based on a survey of employees involved in National Labor Relations Board (NLRB) union representation elections and card-check campaigns. Now.LABOR REFORM THROUGH EXECUTIVE ORDERS AND EFCA: THE IMPACT ON WORKERS TODAY Anne M. In the case of the Employee Free Choice Act. This ushered in what some describe as the most pro-labor administration since Lyndon B. card check. INTRODUCTION Employees operated at the whims of employers until the mid-1930s when the National Labor Relations Act was passed.com ABSTRACT The Obama administration has begun to issue executive orders and is pushing pieces of legislation such as the Employee Free Choice which will have the greatest impact on labor since the passage of the National Labor Relations Act in 1935. Fiedler Andreas School of Business Barry University Miami Shores. The labor agenda was temporarily put on the hold so that the President could focus on healthcare reform and deal with the economic crisis. The AFL-CIO spent $53 million in 2008 to help elect Barack Obama to the Presidency of the United States [1].barry. At the start of his term in office. this paper presents some of these recent initiatives and discusses the positive and negative impact that these measures could have on American workers. These rights are enforced by the NLRB. FL 33161 afiedler@mail. the strongest pro-labor legislation since the National Labor Relations Act. the study found that management pressure on employees to oppose unionization is greater than pressure from co-workers of union organizers to support the union. an overwhelming majority of the respondents (elections. Since then labor has had the right to organize and bargain collectively with their employers free from restraint and coercion. The pro-labor executive orders tend to encourage unionization or make it harder for employers to fight unionization in their companies.edu 305-899-3545 Mark A.5%. Many question whether enabling employees to limit or avoid managerial intervention in union campaigns is an appropriate goal for federal law [3]. it will be easier for workers to unionize. Obama signed into law numerous prolabor executive orders. backed by a Democratic Congress.

However. supervisors or union representatives during work hours. Distressed by antiunion violence the Congress passed the National Labor Relations Act (also known as the Wagner Act) in 1935 [6]. The Act also established the National Labor Relations Board to administer and enforce this law. The purpose of the NLRA was to encourage a healthy relationship between private-sector workers and their employers.89.” EO 13495. The authors then discuss the impact that the executive orders and the pending legislation could have on today’s workers. This paper reviews the pro-labor executive orders issued under the Obama administration and the pending Employee Free Choice Act. NATIONAL LABOR RELATIONS ACT (WAGNER ACT) The 1930s saw the United States go from a time of great prosperity of one of severe economic troubles with a high unemployment rate and a rapidly declining standard of living for the American worker. they fail to recognize the negative impact that this law could have on American workers. and some owners even hired thugs to beat them up. EO 13495 and 13496 actually overturned previous executive orders issued by President George W. To remedy this. [7] LABOR RELATED EXECUTIVE ORDERS UNDER THE OBAMA ADMINISTRATION Within 10 days of being sworn in as President. (2) hiring or consulting legal counsel or consultants. Owners fought these attempts to form unions. Barack Obama issued three executive orders on labor issues [2]. “Economy in Government Contracting. It prohibits federal contractors from passing on to contracting agencies the costs of attempting to persuade employees to exercise – or to refrain from exercising – their rights to organize or engage in collective bargaining. Pro-labor groups such the AFL-CIO promise better benefits. EO 13494. The order does allow for costs associated with "maintaining satisfactory relations between the contractor and its employees. The order specifically disallows costs associated with the following activities when they are undertaken to persuade employees to exercise or not exercise their rights to organize and bargain collectively: (1) preparing and distributing materials. Such costs include 'costs of labor-management committees.” Executive Order 13495 100 . employee publications (other than those undertaken to persuade employees to exercise or not to exercise. the right to organize and bargain collectively)." were signed on January 30. Executive Order 13494 The purpose of Executive Order 13494 is to promote economy and efficiency in Government contracting. or concerning the manner of exercising.4%) said that they felt free to decide whether or not to support the union [4]. Workers labored in factories and mines often under deplorable conditions. (3) holding meetings (including paying the salaries of attendees). and (4) planning or conducting activities by managers. Organizers were fired. workers sought the right to organize so that they could bargain collectively on more equal terms with their employers. “Nondisplacement of Qualified Workers Under Service Contracts” and EO 13496 "Notification of Employee Rights Under Federal Labor Laws. wages and working conditions as a result of the passage of EFCA [5]. and other related activities'. 2009. Bush. which policy makers viewed as vital to the national interest.

Noncompliance with Executive Order 13495 may result in orders requiring hiring of the employees not offered right of refusal and payment of wages lost. many successor contractors will probably have to recognize and bargain with the labor unions that represented their employees when they were employed by the predecessor contractor. However. The contractor may also face federal-contract ineligibility for up to three years. In addition. and activities. (2) to employ any employee who has worked for the successor contractor for at least three months immediately preceding the commencement of the federal service. The new order requires government contractors to post notices informing employees of their right to organize under the National Labor Relations Act and to designate representatives of their own choosing for the purpose of negotiating the terms and conditions of their employment. which was issued by President Bush in 2001. or suspension of the contract and being declared ineligible for future government contracts. and (4) not to offer a right of first refusal to any employee of the predecessor contractor who has failed to perform suitably on the job based on the employee's past performance. As a result employers will participate in more antiunion communication and legal proceedings. Additionally. status. for federal contractors the costs of these communications will no longer be due to the issuance of executive order 13494. termination. and 13496 These executive orders are expected to have a profound effect on federal contractors relative to their labor costs. until then no employment openings under the contract exist. The requirement of Executive Order 13496 to notify employees of their rights under federal labor law will likely result in more union organizing campaigns as well as increased litigation. subcontractors are contractually obligated to these hiring requirements as well. or federal contractors who are awarded a contract for the same services and location as an expiring service contract. 13085. [11] Impact of Executive Orders 13494. (3) not to offer a right of first refusal to any employee of the predecessor employer who is not a service employee within the meaning of the Service Contract Act of 1965. Executive Order 13495 applies to successor federal contractors who obtain a federal service contract of $100.’ [9] Successor federal contractors are now required to offer qualified non-managerial employees of the predecessor employer a right of first refusal for open positions they are qualified to perform for at least ten days. The successor contractor has following rights: (1) to employ fewer employees than the predecessor contractor. 101 . [9] As a result of Executive Order 13495. Failure to comply may result in possible cancellation. [10] Executive Order 13496 Executive Order 13496 repeals a Bush order which had stated that government contracts and subcontracts must include a clause requiring government contractors and subcontractors to post notices informing their employees that they have the right to refuse to join a union.Executive Order 13495 revokes Executive Order 13204.000 or more ‘that succeeds a contract for performance of the same or similar services at the same location. this includes every subcontract entered into in connection with its federal contracts.

EFCA was reintroduced by Democrats in Congress indicating that it would help the troubled economy. However. Subsequently. the respondents indicated that when faced with organizing efforts. On March 10. the law would provide for liquidated damages of three times back pay. A study conducted by the University of Illinois at Chicago found that 91% of employers require employees to attend one-on-one anti-union meetings with their supervisors during union organizing drives. the union and employer still have not agreed on a contract. EMPLOYEE FREE CHOICE ACT EFCA is the No. vs. Union leaders also believe that the current union election system favors employers. just 7. Further. you’d be hit with a $20.S. the Senate version was introduced by Senator Edward Kennedy on March 30. more than 20% in the mid-'70s.The requirement that successor contractors offer employment to predecessor employees under EO 13495 means that many federal contractors that are presently union-free will be forced to assume their predecessors' collective-bargaining obligations. Today. [12] The Employee Free Choice Act of 2007 was passed on March 1. an employer must begin bargaining within 10 days after the union is certified. Businesses stepped up their opposition to the bill saying that it would add to their costs while hurting their ability to boost productivity and to keep their work forces flexible enough to respond to changing markets [13]. by the House of Representatives with a vote of 241 to 185 as an amendment to the National Labor Relations Act. 30% of employers fire pro-union workers. a federal arbitrator would be empowered to determine the terms of the agreement. 2009. and your employees would lose their current right to ratify the terms of the agreement. If the union and the employer cannot agree upon the terms of a first collective-bargaining contract within 90 days. 102 . but the so-called card check bill would potentially subject workers to strong-arm tactics [which] could lead to illegitimate collective representation because of that coercion. a federal mediator steps in. This is because employers have access to workers on the job while unions can only contact them offsite.000 penalty per occurrence if the National Labor Relations Board or a court finds against you. Members of the Society for Human Resource Management (SHRM) lobbied against the bill stating that “the organization [SHRM] is not anti-union. and 51% of employers coerce workers into opposing unions with bribery or favoritism.5% of U. after 30 days of mediation. but it did not have enough votes to pass. 2007. If an employer is found to have unlawfully terminated pro-union employees. If. 1 legislative priority for labor leaders who hope to boost union membership. a union would have the right to be recognized as the exclusive bargaining representative of your employees without a secret ballot election if a majority of those employees sign authorization cards. The main provisions of the 2007 version were as follows: • • • • • Employees could still hold a secret ballot election if 30% of the bargaining unit signs authorization cards. If a majority of employees sign cards. 2007. private sector workers are in unions.” [14]. 49% threaten to close the worksite. In addition.

found that 46% of the employees felt that management pressured them to oppose the unions during the election process. Arlen Specter (PA-D). The previously discussed Cornell University study on employees involved in National Labor Relations Board union representation elections. stated that they could not vote for the bill in its present form. less obvious form of coercion involves delaying the election date. The distribution of information by the employer may be slightly reduce by Executive Order 13494 which prohibits using funds from a federal contract to prepare and distribute materials or to hold meetings regarding. Some of the possible provisions of EFCA such as granting union organizers equal access to company property or possibly banning mandatory employee meetings held by the company would could help to equalize the situation. The most obvious benefit of the pro-labor legislation is that not only is information on organizing more readily available as a result of EO 13496 which requires government 103 .4% felt that they were pressured by management during the card check process [4]. some Democratic senators. They found merit in 40% of these cases [4]. during which time management can apply various types of pressure on their employees such as repeatedly requiring employees to sit through anti-union meetings. 20.000 per violation be levied if an employer is found to have willfully or repeatedly violated employees’ rights during an organizing campaign or while bargaining for a first contract might curb these types of violations. an additional form of coercion involves unfair labor practices such as threatening or even firing employees involved in organizing efforts. The one-sided distribution of information arises from the fact that under current labor law. Another.000 unfair-labor-practice charges were filed. such as Sen. [15] THE IMPACT OF LABOR REFORM ON EMPLOYEES The labor-related executive orders already issued by the Obama administration and the Employee Free Choice Act that is pending in Congress may have some positive as well as negative impacts on American workers. The provision that fines of up to $20. The proposed EFCA “rapid” election provision (suggested in place of the card-check provision) that mandates no more than a 10-day period between the time a union petitions for a vote and an actual election would eliminate this. The NLRB reports that in 2008. the employer has the right to call mandatory meetings regarding the union election as long as they do not threaten or coerce the employees or call the meetings within 24 of the election.Also. Positive Impact of the Pro-Labor Laws The most obvious benefit of the EFCA is the limiting of opportunity for coercion by employers. This section will discuss how these laws will impact workers now and in the near future. while 23. This coercion comes from two aspects of the current election system: the one-sided distribution of information within the company and the prolonged time before the election. Though already illegal under the NLRA. A new Employee Free Choice Act is still being hammered out with the hope of getting it through Congress before the next election.

The pro-labor executive orders will encourage unionization while the passage of EFCA (whether with the card check provision or the rapid election provision) will make unionization easier. Nevertheless. however. and co-workers [16]. Negative Impact of the Pro-Labor Laws While proponents of the pro-labor initiatives. For many employees the illusion of better pay and benefits is a significant motivator for organizing and. this would reduce the slide in union membership thereby turning around the economy and rebuilding the middle class. and Thomas ([16] report that nonunion employees have a significantly higher level of job satisfaction than their union counterparts. but also the increased ease of organizing that resulting from EFCA’s proposed card-check or rapid election provisions. once employees have left their union jobs. job satisfaction increases in relationship to the extent of time they are removed from their unionized job. More importantly. relationships between management and union employees become less business-like and often develop into an “Us vs. the impact of binding arbitration on worker decision-making will also be examined.contractors to post notices informing employees of their right to organize under the National Labor Relations Act. which further diminishes job satisfaction. as discussed in the next section. Abraham. the card check provision has all but been removed from the bill. The AFL-CIO states that. they begin to realize that pay and promotion opportunities are limited as a result of union seniority rules. after unionization their illusions become a reality. Initially. Job Satisfaction. in many cases. but over time. This is because nonunion employees are more satisfied in the areas of communications. Friedman. Also. However. better pay and benefits do not necessarily translate into improved job satisfaction. working conditions. and senior leadership while 104 . union workers are excited about the prospects of better pay and benefits. According to the AFL-CIO website [5]. Further. For example. It is widely accepted that if EFCA becomes law it will not pass in its current form. However. such as the AFL-CIO extol the benefits reaped by workers now and in the future. union workers will exhibit a lower intent to leave then non-union workers [16]. their level of job satisfaction diminishes over time. promotion. Research indicates there are approximately 60 million nonunion workers that would prefer some form of collective representation [18]. it will be included in this discussion. the work itself. because union members believe that union’s have “voice face”. this does not mean that union members are more satisfied with their jobs than non-union members. “union members are 52 percent more likely to have job-provided health care. nearly three times more likely to have guaranteed pensions and earn 28 percent more than nonunion workers. opponents of this movement point out the downside for employers as well as workers. What follows is a discussion of the negative impact unionization has on employee job satisfaction and employment levels as well as the threat to freedom of choice. the immediate supervisor. Them” relationship. even if they are dissatisfied with their job. [17] The reason for this is that there are five facets of work experience that impacts an employee’s overall job satisfaction: pay. therefore. However. supervision.” Also. Studies have shown that job satisfaction of union members is high during the early stages of their membership. Proponents of EFCA state that employees will benefit from this law because obstacles to union certification will be eliminated. This relationship restricts employee participation in workplace decisions. there are many EFCA proponents that vow to make card check a reality.

union employees are less likely to leave their jobs than nonunion employees when dissatisfied [16] because employee dissatisfaction with pay. an unintended impact of this bill will be in the area of overall unemployment rates. organizational changes. Additionally. employers are required to dedicate more resources to wages and benefits. union membership will increase substantially due to the less-restrictive organizing structure afforded by the EFCA bill and the pro-union environment created by the executive orders. and opponents see the passage of EFCA as a significant attack on employee’s freedom of choice. legislative acts often result in unintended outcomes. Deere and Tracy [21]. Even though EFCA has been coined as the most significant legislation on labor since the enactment of the National Labor Relations Act. it is predicted that job creation will decrease by nearly 1. former president of Service Employees International Union (SEIU). As employer’s profit margins begin to shrink. While it may be true that the decline in union membership will be reversed. and employment relationship [19]. An analysis by Layne-Farrar [20] indicates that a 3% growth in union membership will result in a 1% increase in unemployment. Decreased investments in capital will ultimately slow the growth of the company and. as the cost of supporting the union membership increases. benefits. The same procedure would apply with the card 105 . employers will reduce union positions [20]. Impact on Employment.5 million jobs. The reasons behind this are three-fold: economic impact.5% [22]. a vote in favor of unionization.union members place greater significance on the relationship between job satisfaction and benefits. Andy Stern. It is estimated that the implementation of EFCA would translate into a loss of more than 600. union employees had negative attitudes towards the union and their employer. Despite this differential in satisfaction.000 jobs [2]. and working conditions are voiced though the union. Surveys found that following a strike. The Card Check component of EFCA is designed to allow for immediate certification of the union and does not provide an opportunity for employers to develop a campaign against the unionizing effort. or work stoppage. Without question. Yet another study found that a one percentage point increase in bargaining coverage will increase unemployment rates by 7. Job satisfaction can also be impacted when an employee experiences a strike.1%. predicts that the passage of EFCA will increase union membership by as much as 1. in many cases. Freedom of Choice and Threat of Coercion. which have a negative impact on capital investments. As employees unionize. In addition. in a study determined that a 10 percent increase in union growth would translate into a decrease in employment by as much as 1. This increased voice results in a reduction in the intent to leave their job on the part of the union member. This is not. The card check procedure would replace the current procedure whereby employees sign an authorization card expressing their interest in collective bargaining. Proponents of EFCA and the pro-labor executive orders believe that these measures will increase union membership without creating any negative impact on the economy.5 million annually for the next 10 years [20]. however. Bronars. There are various reasons behind the projected rise in unemployment rates due to increased unionization. may cause a decline [22]. they will begin to seek other alternatives in the area of labor such as sending jobs offshore [22].

check process except instead of the employee expressing merely an interest in holding an election. Currently. The Employee Free Choice bill has been around since Barak Obama co-sponsored it as a junior senior in 2003. Currently. This action creates turmoil for the employee often resulting in giving up their resolve and signing the card. However. president of the AFL-CIO for nearly 30 years. if you ask the average citizen about EFCA. EFCA does not. Employees may be intimidated and harassed by co-workers in an attempt to have them sign authorization card. and it has come up in Congress on more than one occasion. Furthermore. Under compulsory arbitration. If that happens. Through arbitration. George Meany. probably before the next election. Although they are required to bargain in “good faith. employers may be completely unaware that an organizing attempt is being made which disallows employees from being presented both sides of the unionization story. Compulsory Arbitration. However. Many workers as well as small business persons are not even aware of the bill’s existence. address or prevent coercive action by union bosses or coworkers during the authorization process. the union can call a strike. Because it is the darling of labor leaders who helped to put the President as well as many Democratic Congressmen in office. workers do not get this vote. that card would suddenly become a vote in favor of unionization. A portion of the EFCA bill that is often overshadowed by the card check option is compulsory arbitration which would take place 120 days after certification if the company and union cannot come to an agreement on a contract. The decision of the lawyer is final. Michigan voters rejected a union-sponsored ballot proposition that would have extended compulsory arbitration to all state employees. Compulsory arbitration nudged some Michigan cities into bankruptcy. This was costly not only to the taxpayers. An argument can be made that this would violate the employee’s freedom of choice. CONCLUSIONS With all the focus on the economy and healthcare reform. Knowing that both sides feel the other is asking for too much. it is destined to rise again. Compulsory arbitration is now being rejected in Michigan and other states as an alternative to negotiation. This is even more the case with the pro-labor executive orders which quietly crept in becoming rules that affect many businesses without any 106 . a government-appointed lawyer determines what is fair for both sides. it has to be ratified through a vote of rank-and-file members. little attention has been paid to the current labor movement. compulsory arbitration is a real likelihood in many instances. but to the workers whose jobs were subsequently cut. For example. strikes are costly to both sides and a compromise is typically reached. This form of coercion and one-sided communication does not afford employees the opportunity to make an educated decision [23]." [25] There are numerous instances where arbitration has not served the people well.” an agreement is not always reached. As a result workers have lost their right to vote twice: first. employers and the union negotiate a contract. if the majority sign the card. however. [24]. refers to the lack of voice resulting from mandatory arbitration as "an abrogation of freedom. once a contract is negotiated by union officials and management. they are likely to give you a blank stare (unless they read the AFL-CIO website). to certify the union and then to ratify the contract [24]. There is much talk about how EFCA will eliminate employer’s ability to use coercive actions to prevent unionization. Recently.

Yet. these executive orders and laws can also have far reaching positive and negative effects on the worker. they can have far reaching effects for employers as well employees.edu 107 . voters. It is important that law makers. References available upon request from Anne Fiedler at afiedler@mail. but also the long term consequences of these rulings before determining the whether or not this is the direction we need to go. and workers examine not only the short term.barry. However. labor leaders. Many sources document the cost of unionization to the organization.accompanying fan fair.

and discussions with students in entrepreneurship classes. Duke University. FL 33161 pmann@mail.edu 305-899-3545 ABSTRACT This paper deals with a need for the inclusion of information regarding nonprofit organizations and social responsibility into business school curriculum. Dean George Daly of Georgetown University’s McDonough School of Business discussed the idea of “weaning students off traditional MBA careers. AND NONPROFIT OPPORTUNITIES Phil Mann Andreas School of Business Barry University Miami Shores. It was noted that areas of content related to nonprofit businesses and social responsibility were given little if any attention.edu 305-899-3523 Anne M. marketing. and leadership were analyzed. Seventeen texts in business-related areas such as entrepreneurship. 108 . Nonprofits can be big business with profit-related components that offer a variety of opportunities for our graduates. SOCIAL RESPONSIBILITY. re-setting student expectations and getting them to consider careers at nonprofit. Recommendations made regarding curriculum modifications and possible new inclusions are discussed that would cover social responsibility and also enable students to gain a better understanding of the world of nonprofit business. and government-related companies.” The study of nonprofit organizations is as a whole sparse or often given cursory attention in many courses.BUSINESS EDUCATION. the present content in courses in business. Support for this recommendation is based on several factors that include the state of nonprofit organizations nationally. and nationally is underestimated. management.barry. regionally. or at small or mid-sized firms around the region.barry. Fiedler Andreas School of Business Barry University Miami Shores. A number of correlates can be extrapolated: 1. INTRODUCTION In an article published by the Wall Street Journal [1] entitled “Dean’s Set Priorities for Tough Times” several Deans (University of California. and Georgetown University) were interviewed regarding challenges that face their students after graduation.” He further stated that the “biggest challenge might be. FL 33161 afiedler@mail. The size and needs of nonprofit organizations locally.

Nonprofits are sustained through donations. flexibility. Nonprofits depend mainly upon grants and donations 109 . also known as not for profit entities. some aspect of health or poverty and probably would be better served under the purview of social work. Issues related to social concerns in identified countries are deemed important. The area of nonprofit organization study and response to needs of this sector in terms of business continuing education and community involvement is neglected. Nonprofit organizations are involved in endeavors that significantly enhance the quality of life of the community and address issues such as homelessness. These attitudes often vitiate acceptance of this area of business as important and include: • • • • • There is little opportunity for entrepreneurial activity in nonprofit endeavors. If you are doing business in India. and social services.” (Edelman SA. and adaptability.” BACKGROUND Nonprofits. Areas of study related to nonprofit organizations and needs are not usually an important part of regular business school curriculum. it cannot be avoided. • Further research is needed in the areas of the perception of nonprofit organizations by various groups. “Nearly three fourths of the nonprofits surveyed by Bridgespan indicated that they value for-profit experience. stretching scarce resources.2. education. In the area of social responsibility it is becoming evident that a growing number of companies are looking to business schools for assistance in redefining the concept of social responsibility with respect to strategic planning and the delineation of leadership responsibilities of key company employees. Nonprofits do not engage in for-profit activities. substance abuse. and economic concerns that deal with developing pathways out of poverty. Business education is the same for nonprofits as it is for for-profit firms so why “tamper with” existing courses. AIDS awareness and treatment. a large financial-service company). The Bridgespan Group. A Wall Street Journal article [2] stated that “fifty-seven percent of consumers say a company or brand has earned their business because it supports good causes.000 managers by 2016 as workers retire and organizations grow larger [3]. 3. for example. Companies have also expressed concern over the type of branding that highlights their social effect on communities and the efforts made to shape community perception of their public image. play a significant role in providing accessible health. a nonprofit-advisory firm projects longterm shortages of up to 640. There are a number of attitudes that seem to be prevalent among some faculty and some students questioned in classes that need to be considered. cultural. Skills most in demand include project management. Nonprofits do not play a significant role in the economy of the United States. These plans also include specific initiatives that pertain to global expansion. There are only a few nonprofit organizations and most of them deal with religion.

Total number of nonprofit organizations in Florida in 2009 was 69.000 paid workers and an additional 250.000 workers including 380. management. They have a special legal designation that distinguishes them from for profit businesses which enables them to receive tax exempt status.to maintain their operations. These purpose driven companies have been able to apply business practices to solving societal problems. Many nonprofits have for profit components. the following information was published in a report dated 1/14/2010: • • • • Total number of registered nonprofit organizations in the United States in 2009 was 1. and leadership indicated the following: • All seventeen texts did not include the word nonprofit in their index. Florida’s nonprofit sector is the fourth largest employer among Florida industries with nearly 630. According to Lester Salamon. After expenses.9% of the total workforce (1 out of every 20 workers). The workforce of Florida’s nonprofits alone represents a significant 4. This same report stated that nonprofit enterprises account for 7% of the GDP capital of the United States. and what is revealing is that this set of organizations is far more important than we have realized. funds remaining are used to support their goals and objectives. Most colleges and universities tend to offer little substantive information dealing with nonprofit organizations in their business school curriculum. This represents more than the state’s banking and insurance industry. Under Estimated In the United States as well as in Europe and in Latin America where nonprofits are known as civil society sector programs. marketing. The combining of business and social responsibility as an intrinsic concept has been gaining recognition in recent years.629. A survey of seventeen selected texts used nationally in courses dealing with entrepreneurship.” [4] According to the National Center for Charitable Statistics (NCCS) [5].515. “We now have an officially sanctioned method for capturing the economic scale and importance of civil society and volunteering around the world. not for profit organizations contribute as much to gross domestic product as such major industries as construction and finance. director of the Johns Hopkins Center for Civil Society Studies.000 full-time equivalent volunteer workers [6]. Total number of nonprofit organizations in Miami-Dade County (the location of Barry University) was 9.804. • • Under Studied Nonprofit organizations function quietly without fanfare and their importance is rarely understood by the general public.591. This structure requires certain accountability and auditing provisions. Some colleges and universities have begun to include social entrepreneurship and nonprofit business organization content into their curriculum. In the United States. nonprofits incorporate in the state in which they exist and are governed by a board of directors. 110 . but still remains a neglected area of study.

Funding alternatives for general operating support Funding information associated with organizational capacity building programs Information regarding access to volunteer experts to provide technical assistance Information dealing with board recruitment and engagement Suggestions for accessing and utilizing management consultants to provide technical assistance Under Served Most universities have as part of their mission to provide service and technical assistance both to for-profit firms as well as to underserved organizations found in the nonprofit sector.• • None of the texts defined the terms nonprofit or not for profit. Marketing information that would provide greater visibility to organizations and their programs 3. but some did deal briefly with the concept of ethics and business. 2. planning and adjustments 4. Suggestions regarding board roles in strategic planning 5. Some of the concerns indicated by nonprofits that have important implications for higher education were uncovered in a survey conducted by a C-One Survey dealing with the effects of the economy on nonprofits serving Miami-Dade County published in March 2009 [7]. The demand for services has become “a key driver” in terms of adding new programs or expanding the scope of existing programs. 3. internships. The findings indicated that there is a paucity of donors and the fact that private funds continue to be cut back in our present economy. operational inefficiencies. One of the texts did deal with social responsibility in a more comprehensive manner. the demand for services is up having important implication for future jobs for our graduates. It was also noted that sixteen of the texts made no reference to social responsibility. 4. They found that the main concerns for these organizations centers around three themes: quality of services. 111 . It is predicted that this will continue for some time in the future. Information regarding the role of boards in fund raising 2. Conversely given the decrease in funding. 1. and staff burnout. Giving students an understanding of the value of community service and social responsibility through teaching. This appears to be both a national and international trend. Suggested strategies for collaboration and partnering with others to jointly raise funds Methods or types of support in five major areas were selected as top priority: 1. 5. five major areas have been identified that need to be considered in terms of continued business education. With respect to educational needs related to identified strategies. Programs addressing internal operations. and other “hands on” experiences in the nonprofit sector should be an important ingredient of the program.

What began as a limited SWOT Analysis of a local correctional institution became a comprehensive survey of six circuits 112 . marketing. Case studies that provide for a differentiation between forprofit and nonprofit firms are useful. In a larger sense providing services to nonprofit organizations has been shown to have a positive effect onsite in strategic areas in neighborhood revitalization. it becomes a matter of including supplementary materials and developing activities that would introduce students to this area. marketing. IMPLICATIONS FOR MANAGEMENT EDUCATION Since there is a paucity of information about nonprofits in many business texts. it cannot be expected that students will become focused on this area as relevant to their studies in business. Therefore. The needs of nonprofit organizations have generated a list of community service areas that with student involvement could be improved and expanded. Examples such as analyzing mining accidents or oil spills as well as other corporate catastrophes are informative. a governmental nonprofit organization. One goal is to broaden exposure and identify sources of potential assistance for the community. The C-One Survey of nonprofit organizations [7] generated a list of community service areas that could be improved or expanded with additional training and support. Another major application of workshops and seminars is to assist nonprofit firms in securing grants and contracts as well as to be in a better position to offer more comprehensive services in meeting community needs. There are a variety of moral quandaries that can be introduced into courses through case studies involving nonprofit organizations. and entrepreneurship course. Nonprofit organizations need assistance in the development of business plans. Many of the topics identified as integral relate to the utilization of business model practices that focus on management. The SWOT Analysis technique has been introduced and found to be very useful in these situations. Simulation activities are good that involve reenacting problem solving situations designed to stimulate a mindset for thinking about responsible behavior. The following suggestions are meant to be practical and doable. An example of how a simple nonprofit case study requirement for an MBA Course in Entrepreneurship can have far-reaching implications is a study done by a student of the Florida Department of Juvenile Justice.Students should understand the effects nonprofits have on communities and their role in bringing vitality to local economies. There are several activities that have been successfully implemented that resulted in a better understanding of the area of nonprofit organizations with concomitants in social responsibility. Case studies involving nonprofit organizations and situations dealing with social responsibility should be a part of the requirements of every management. accounting. and fund raising as well as governance issues.

“Shadowing” experiences where the student spends a number of hours (days) following the daily routine of a CEO or CFO of a nonprofit firm.(institutions) in Florida. In viewing recent trends in nonprofit organizations growth and capabilities. This industry generates and expends billions of dollars. Additional recommendations include the following: • • • • • • • A section of an existing course in entrepreneurship. it becomes evident that programs are needed that will respond to the present and future educational needs of these organizations. It is also apparent that students in both 113 . and does in fact employ a significant portion of our workforce. Internship in nonprofit situations can be provided for students. This activity has been an excellent learning experience for students who shadowed (followed) the CEO of a local hospital. Case studies can be presented dealing with nonprofit enterprises. and courses that would complement standard business information offered [8]: Measuring/Assessing Performance Managing the Nonprofit Organization Community Needs Assessment How to Start a Nonprofit Enterprise Website Auditing Techniques Developing and Managing Volunteers Developing Service Programs Sustainability Issues Basics of Grants and Other Funding Project Development and Management Grant Writing Fundraising Methods Budgeting Essentials Community Demographics The Strategic Planning Process Use of Social Enterprises Board Governance Roles of Foundations Doing a SWOT analysis Use of Social Networking Tools Board Selection and Development Organizational Assessment Techniques Creating Visions and Missions Supply Chain Management Issues Finance and Accounting for Nonprofits Branding the Organization Role of the Executive Director Tax (990) Considerations Economic Indicators Affecting the Legal Requirements Organization SUMMARY AND CONCLUSION Our research indicates that the nonprofit sector is an economic powerhouse with the possibility of employing thousands of our graduates. It also provides a variety of small nonprofit business opportunities. Voluntary services in nonprofit organization can be made available. for example. workshops. SWOT Analysis assignments centered on nonprofit enterprises offer experiential opportunities. can be geared to benefit the students interested in nonprofit business employment. The following is a list of topics that could be covered in seminars. the student accomplished a very useful basis for offering possibilities for better coordination of South Region correctional services. Students can do business plans developed around a nonprofit start up or expansion. In collaboration with the Chief Probation Officer/Superintendent.

(2010). [5] National Center for Charitable Statistics (2009). Retrieved on January 14. [3] Smith. 114 . 2010. A. Topics for Nonprofit Seminars and Workshops. Barry Institute for Community and Economic Development (BICED). J. [8] Kleban.undergraduate and graduate programs need more information regarding this aspect of business and its implications for future employment as well as for interaction within the world of commerce. [6 ] Joint report of the Johns Hopkins center for civil society studies and the Florida Philanthropic network (2008). Florida’s Nonprofit Sector: An Economic Force. [7] C-One Survey (March. The Wall Street Journal. 2010. The Wall Street Journal. REFERENCES [1] Middleton. Kiplinger’s. 88. November 19. Retrieved on January 14. A. New courses can also be created in nonprofit stewardship that would contain a variety of cogent topics. Deans Set Priorities for Tough Times. (2009) Networking for Social Responsibility. Number of Nonprofit Organizations by State. 2009. (2010). 2009) The Effects of the Economy on Nonprofits Serving MiamiDade County. [4 ] Johns Hopkins Economic Data Project based on ES-202 data. How to switch careers. 2010. D. 2010. Retrieved January 14. Fall 2010. [2] Dizik. Many of the topics associated with nonprofits can be integrated within the current curriculum through projects and modules of study.K. (June 2010). Retreived January 14.

. 2001]. Few studies have examined the courts’ interpretation of the sexual harassment guidelines based on the rules set forth by the Supreme Court in 1998.lvardaman@troy. and is such a controversial and complex issue.8% increase [EEOC]. AL. AL.475 [EEOC]. sexual harassment cases comprise 14.edu. INTRODUCTION Sexual harassment has been recognized as a violation of the Civil Rights Act under Title VII since the late 1970’s [Twomey.TROY University.A HOSTILE SEXUAL ENVIRONMENT: HOW HOSTILE DOES IT HAVE TO BE? Henry Findley. pinghe@troy.Troy. There has been comparatively little recent research on court interpretation of the sexual harassment guidelines [Shoenfelt. Over 200 usable cases were identified and examined for guiding principles as to the circumstances that constitute an illegal sexual hostile environment. TROY University. City of Boca Raton. Since then. AL. is very costly to organizations. Given that sexual harassment litigation represents a significant amount of the EEOC caseload.hfindley@troy. the review should focus on the area where there is the most confusion and litigation--sexual hostile environment.edu. it would be helpful to review the recent case law interpreting the EEOC regulations on the subject. Troy.TROY University. 334-670-3709 Robert Wheatley. Cases cited are representative or highlight special issues/circumstances that assist in determining the hostile environment threshold.334-670-3271 Eva Dodd-Walker. To that end. AL.334-670-3976 Lee Vardaman.334-670-3151 Ping He. This article reviews over 200 cases and provides guiding principles and recommendations for practitioners. Currently. Troy. City of Boca Raton [Faragher v.11]. Keywords: Sexual Harassment. In 1980 the Equal Employment Opportunity Commission [EEOC] propagated guidelines regulating sexual harassment in the workplace [29CFR1604. rwheat@troy. Miller. Maue & Nelson. when they suddenly displayed a 10. TROY University. 1998]. Maue & Nelson..edu. 334-670-3459 ABSTRACT Hostile sexual environment continues to be an important issue in the workplace.5% of all claims filed with the agency.edu. harassment.TROY University. Recommendations for administrators and legislators are provided.Troy. 115 . In particular. a LEXIS-NEXIS key word search was conducted that yielded over 400 cases at the appeals court level [chosen because the legal principles are more settled and accepted than at the district level] since the Supreme Court set forth its hostile environment guidelines in Faragher v.edwalker@troy. Complaints slowly declined until 2008. is rising again. Female on male and same-sex harassment cases were not included because some research has suggested there are differences among the sexes as to their perceptions/reactions to sexual harassment [Shoenfelt.edu.Troy. charges have steadily risen until they peaked in 2001 at 15. 2007]. hostile environment. AL. 2002. 2002].

1986]. and isolated incidents [unless extremely serious] will not amount to discriminatory changes in the terms and conditions of employment” [Faragher v. Vinson that no one is guaranteed a pristine work environment [Meritor Savings v. The Eleventh Circuit found no proof these actions 116 . City of Boca Raton. The Supreme Court upheld the EEOC guidelines in Meritor Savings v. It is the third definition that deals with hostile environment cases and is the subject of this article. However. Vinson. such as the sporadic use of abusive language. at 286]. one that a reasonable person would find hostile or abusive” [Faragher v. Simple teasing. it is unprotected activity. City of Boca Raton. and occasional teasing [Faragher v. or [3] such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating. offhand comments. at 286]. City of Boca Raton. the Supreme Court had previously made clear in Meritor Savings v.11]. these cases do occur. and other verbal or physical conduct of a sexual nature…when [1] submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment. about once a week. [2] submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual. The Supreme Court pointed out that “Title VII does not prohibit genuine but innocuous differences in the ways men and women routinely interact with members of the same sex and the opposite sex. it must “be both objectively and subjectively offensive. NONSEXUAL CONDUCT Even though nonsexual behavior may be boorish and unprofessional.HOSTILE SEXUAL ENVIRONMENT Sexual harassment is defined under the EEOC guidelines as “unwelcome sexual advances. It should go without saying that nonsexual behavior is not covered by the guidelines. all circumstances must be examined. in Dianne Tatt v. Atlanta Gas. an office assistant would present her supervisor with paperwork to sign. or a mere offensive utterance. at 286]. and whether it unreasonably interferes with an employee’s work performance” [Faragher v. The Faragher Court underscored this point when it said that the guidelines when properly applied would filter out “the ordinary tribulations of the work place. 2005]. or offensive working environment” [29CFR1604. its severity. Vinson and distinguished between quid pro quo and hostile environment claims [Meritor Savings v. For example. including the “frequency of the discriminatory conduct. 1986]. Vinson. he would pretend to unzip his pants and urinate all over the paperwork. at 286]. In fact. gender-related jokes. the Supreme Court clearly enunciated the factors to be considered in determining hostile environment claims filed under Title VII [Faragher v. 1998]. whether it is physically threatening or humiliating. First. City of Boca Raton. he would yell across the office at her saying why don’t you take off early and go on down to the American Legion and pull on some long necks [Dianne Tatt v. Atlanta Gas. In Faragher v. City of Boca Raton. while others were present. Nearly everyday. requests for sexual favors. City of Boca Raton. Second. hostile.

While it is not the focus of this article. the calls were not sexual. but the manager refused. of Youth Services. SEXUALLY RELATED CONDUCT A hostile sexual environment can generally be classified into three main categories: physical. 2005]. a male supervisor at a college touched a female subordinate’s ring and bracelet. 2008]. Cases usually. 1998]. Florida Board of Regents. he pulled her to him by her hair. 2006]. they were not severe or pervasive enough to create a hostile work environment [Dianne Tatt v. However. along with other verbal comments. The nature of the job does not necessarily ameliorate the conduct of the perpetrator[s] [Randolph v. While the agency tried to argue that a single isolated event of assault was not pervasive. Ohio Depart. Chertoff. It further explained that the continued presence of the perpetrator exacerbates and reinforces the fear and anxiety suffered by the victim [Lapka v. The court found that these actions.were sexual in nature and the court noted even if they were. the Tenth Circuit Court of Appeals found the offending conduct was both physically threatening and humiliating. 2006]. Chertoff. A female prison guard was subjected to multiple physical attacks. however. intimidating or threatening]. the victim was able to prove a hostile environment existed with only one incident of physical touching [Lockard v. Atlanta Gas. 1998]. We will examine each in turn. grabbed her breast. It noted that sexual assault alone can be sufficient to create an objectively hostile work environment because such an act by its very nature is considered severe [Lapka v. of Youth Services. Pizza Hut. involve a combination of these types of conduct. Ohio Depart. she asked to be reassigned to another customer. 2008]. Chertoff. For example. Following this incident. even though in a prison setting. 2008]. a female adjudication officer with the Bureau of Customs and Immigration Services was assaulted by a fellow employee on a business trip [Lapka v. Additionally. and her knee [briefly] over a 6 to 7 month period [Gupta v. or visual. In a case involving customers physically harassing a waitress. Upon returning to the customer. verbal. and invited her to lunch 117 . the hem of her dress [moving it a few inches]. it was sufficiently severe and pervasive to be declared illegal [Lockard v. PHYSICAL CONTACT Physical touching of another person is generally the most serious form of conduct according to the Supreme Court. were severe and breached prevailing social norms and would be traumatic and humiliating to anyone in that situation [Randolph v. Nevertheless. it should be noted that in all of the cases reviewed the offending conduct had been made known to be clearly unwelcome. Florida Board of Regents. A male customer at a Pizza Hut pulled the waitress’s hair. complimented her on her looks. Pizza Hut argued that this was just one isolated incident and as such did not qualify as a hostile environment. less extreme forms of physical conduct do not always result in a hostile environment. 2000]. Gupta v. Pizza Hut. and then placed his mouth on her breast. Chertoff. in addition to verbal harassment and threats. in Lapka v. In an often cited case. he repeatedly called her at her home [though of personal nature. the Seventh Circuit disagreed. therefore.

were ruled to be isolated... they were very serious and both were physically threatening and humiliating [McPherson v. Associated Outdoor Club. and his actions were neither physically threatening nor humiliating [Gupta v. Florida Board of Regents. in Harvil v. The dress shirt incident was found to be nonsexual. which were partially opened. 1998]. the appeals court found the conduct fell in the realm of simple teasing. For example. a sales associate filed a hostile environment claim after she had been touched twice on the buttocks by two different co-workers and asked by another if she had seen or worn panties with a “built in butt” [Dar Dar v.several times. 2004]. 2000]. the appeals court did not find the conduct to be sufficiently severe. He also made various sexually related comments. This includes a hand on the shoulder. inappropriate. fingers. he was putting on his dress shirt and tucking it in his pants. City of Waukegan. he lifted her shirt up and pulled her pants down slightly to view her tattoo. 2004]. 2005]. For example. Motorola. Quality Dining. Quality Dining. However. The Eleventh Circuit Court of Appeals denied the claim because much of this conduct occurs in normal workplace interactions. The touching of the hem and knee. 2005]. on one occasion. a peck on the cheek. Inc. even though it was only two actions. Inc. City of Waukegan. The same result occurred in Quinn v. Westward Communications. Nevertheless. Given that the incidents occurred over a 22-month period. in the same case.. Even a supervisor pulling back a lady’s shirt to see the type of bra she was wearing has been ruled to be insufficient due to the isolated/infrequent nature of the action [McPherson v. an attempted kiss on the lips. the work environment became hostile when the supervisor later put his hands inside her blouse and felt her breasts and then a few days later did it again along with running his hand down inside her pants and touching her private areas. Motorola. City of Chicago when in four separated incidents a coworker briefly touched a female employee’s arm. Associated Outdoor Club. infrequent momentary events. more frequent but “less serious” physical acts can create a sexually hostile work environment. 2007]. Green Tree. Inc. Motorola. or pinch on the buttocks as long as these incidents occur infrequently [Hosteletler v. Green Tree. The Seventh Circuit has gone so far as to say that some physical contact that is relatively minor and infrequent may be considered insufficiently abusive to be described as severe or pervasive [Hosteletler v. In another Eleventh Circuit case. or repetitive enough to create a hostile work environment [Bussell v. there was no hostile environment in Adusumilli v. pervasive. Another worker once told her that he had seen a “whale of a d--k” in the restroom [Dar Dar v. Inc. and isolated incidents [not extremely serious][Dar Dar v. Associated Outdoor Club. and buttocks over a 10-month period [Adusumilli v. though more serious. 1998]. at 85]. a 118 . While the behavior was crass. 2000]. Inc. At this point. where a male supervisor deliberately touched a subordinate’s breasts with some papers he was holding and on another occasion told her she had been voted the sleekest ass in the office [Quinn v. over a seven month period. 2000]. City of Chicago. at 85]. a brief hug. and unprofessional. a hand on the thigh. offhand remarks. a temporary employee was subjected to a co-worker rubbing up against her back as he passed her in cramped quarters some 10 to15 times over a two-month period [Bussell v. In Bussell v. once when she walked into his office.

Robinson Worldwide. these acts occurred frequently enough to create a hostile work environment [Harvil v. and sources and indications of female sexual arousal [Reeves v. 2006]. In general. She was also once exposed to a pornographic image on a co-worker’s computer. Taken together. When leaving the party he suggested that he join her in her hotel room. Comments included referring to women as “c--ts” or “whores” as well as vulgar references to sexual acts such as “f--. particularly because she was the only female in the work group. patted her on the buttocks [at least once a week]. The court noted that while no single episode crossed the Title VII threshold. 2006].” conversations concerning ejaculation. the conduct was pervasive throughout the work environment. Over the next 3 to 4 months. a transportation sales representative was subjected to nearly three years of co-workers using sex specific language in her presence and playing sexually offensive radio programs every morning [Reeves v. In Schiano v. Clearly. and asked what type of underwear she wore. men’s erotic dreams.male co-worker. During this time. 2008]. he came from behind her on 5 to 6 occasions and placed his hands on her back or neck and leaned into her while she worked. Robinson Worldwide. Robinson Worldwide. In Reeves v. City of Waukegan [2004]. The court pointed out that her performance could have also been adversely affected because she testified that all of the conduct made it difficult for her to concentrate and caused her to often leave her workstation and stand in the hallway [Reeves v.your sister. Quality Payroll. VERBAL CONDUCT The vast majority of hostile environment charges involve verbal comments of a sexual nature. None of the conduct was physically threatening. a corporate financial assistant was subjected to a co-worker putting his hand on her thigh at a company party. Westward Communications. the Second Circuit reversed a summary judgment for the employer stating that the jury could find the harasser’s actions repetitive enough as to change the conditions of the victim’s work environment to one that was hostile [Schiano v. not only grabbed and kissed a new female employee on the cheek. Robinson Worldwide at 1145]. he then pulled her skirt up a few inches and took a picture of his hand on her thigh. 2008]. As a result. but the language and radio programs could be found to be a humiliating work environment. and came and rubbed his body parts against her [from behind]. popped rubber bands at her breasts. it was the repeated exposure over three years to the verbal comments and the pervasive nature of all the actions that 119 . but repeatedly made comments about her sex life. verbal comments must be more frequent in order to reach the hostile environment threshold. Quality Payroll. Even after complaining about his behavior several times. he made various verbal comments to her: He told her that she was sleeping with the wrong employee. remarked she was really hot. female sexual anatomy. Quality Payroll. She also claimed that she started to shake when she was exposed to the pornographic image. fondled her breasts. 2008]. the comments could be considered severe in that the words or phrases used fell within the spectrum of language that is particularly offensive to most women [Reeves v. Although not as serious as the actions in McPherson v. 2005]. verbal comments are considered less serious by the courts than physical contact. Robinson Worldwide. he would pass by her cubical and leer at her [Schiano v. In this case.

The Seventh Circuit concluded that “sporadic use of abusive language. at 867]. 2002]. the Eleventh Circuit Court of Appeals reversed a summary judgment for the company and remanded the case. Orange County Sheriff’s. On another occasion. Indiana Department of Corrections. Wal-Mart. although crass [Anne B.” commented on physical appearance of female job applicants. “told a joke about a boy’s anatomy. He also made sexually related comments to others outside her presence. eight gender-based comments over several years. Raciot v. Indiana Department of Corrections at 905]. a co-worker talked down to a secretary and other females. a co-worker made sexually-related comments to a female reservations clerk when she visited the company café during her breaks [Lockett v. made a reference to her “tits. As a result. in Rhonda L. gender-related jokes.” and that she needed “to get with a real guy” [Lockett v. and occasional teasing are fairly commonplace in some employment settings and do not amount to actionable harassment” [Rhonda L. at 1019].” told several new male employees to “watch out because she likes good-looking men. yelling at the victim. 2009].” used profanity in her presence. Choice Hotels. In Lockett v. however. Moser v. offensive statements must occur in the victim’s presence]. the Seventh Circuit went so far as to state that using vulgar language [such as calling an employee “a f---ing bitch” or cursing]. In Patt v.” that “her boyfriend ain’t f---ing her right. he talked about sexual positions and indicated that “he would lick her p---y. Family Health Systems. For example. but the courts generally do not allow these comments into evidence [that is.” were not pervasive enough to support a hostile environment claim [Patt v. Choice Hotels. 2006]. Indiana Department of Corrections at 904]. over a three month period. she refused. Columbia Palms.” that “he would go down on her good. In another case that failed to meet the conditions of a hostile work environment. Moser v. Choice Hotels. but when she returned he indicated that he wanted to hug her. nor does five phone calls at night over several weeks asking for dates [Nurse “BE” v. 2005]. Similarly. that she looked hot. isolated sexual advances such as indicating one wants to have relations with the opposite sex while grabbing one’s private parts does not create a hostile work environment [Pomales v. but it did not affect her performance. and that he wished his wife wore hot clothes. made comments [about once or twice a week] to her about wearing tighter clothes. She stopped going to the café for three weeks. The Eleventh Circuit Court of Appeals concluded that based on the totality of the circumstances the offending behavior did not meet the threshold of a hostile work environment because it was infrequent.created the hostile environment. 120 . and “made an innuendo about his penis size when a dimension was mentioned by a female co-worker”[Rhonda L.” asked her “if she had gotten a new set of legs. In a recent Wal-Mart case. once he also made a comment to her husband over her cell phone that he was “eating her” [Webb-Edwards v. and making isolated comments about older women in the workplace over a five month period was not actionable. 2007]. many charges involving sexually-related comments that are less repetitive and over a relatively short period of time do not lead to a hostile environment. insufficiently severe or pervasive [Lockett v. he touched her bottom quickly. Family Health Systems. However. a supervisor of a female deputy sheriff. 2009]. which included hearing “the only valuable thing to a woman is that she has breasts and a vagina. Celulares Telefonica. Over a four month period. Choice Hotels. Moser v.

little or nothing was done and the comments continued. Also. He once commented when she was bending over that she should remain in that position as it was perfect. a female forensic treatment specialist at a maximum-security facility for the criminally insane was called the “b” word almost daily for several months. However. 2007]. Pamela Morrison.” “bitch. These included on at least five or more occasions telling her that women do not belong in the production area and that women think they know everything [Boumehdi v. General Extrusions. At any given time. he asked her if she had gotten a breast enlargement over the weekend. he once told her that he had to leave work to get a lap dance down the street [Boumehdi v. He also told her that women should work in flower shops and that she should wear a low cut blouse and shorter shorts. Plastag Holdings. The Second Circuit found “these 121 .” sometimes in front of the foreman [Parker v. and he also told her to clean the production room. The victim. pornography was left in bathrooms and the staff office where meetings were held. Co-workers would yell to one another with comments about their private parts. When she was pregnant. In Parker v. the supervisor of a female production worker. it doesn’t have to take nearly a year or more to obtain a hostile environment ruling. she was also called a whore approximately 10 to15 times [Fairbrother v. Although she complained a number of times. 2007]. “she was asked why she wasn’t wearing a French maid outfit” [Fairbrother v. General Extrusions. General Extrusions at 600]. over about a three year period. Plastag Holdings. Plastag Holdings. Pamela Morrison. The Seventh Circuit concluded that the sexist comments were pervasive and frequent enough to reverse a summary judgment for the company [Boumehdi v. 2007]. 2007]. was referred to as a “f---ing whore” and endured vulgar comments about her possible sexual activities.” “slut. In Boumehdi v. In Fairbrother v. he told her that her gender did not exempt her from taking out the trash. The Sixth Circuit found that the harassment was sufficiently continuous and serious enough and that given her performance was adversely affected by the leaves of absence were sufficient grounds to create a hostile work environment [Parker v. there were at least two or three sexually offensive jokes posted on the staff office bulletin boards [Fairbrother v. General Extrusions at 600]. Plastag Holdings. 2005]. 2007]. upon finding out that she had miscarried. Plastag Holdings. Additionally. given enough repetition and seriousness of the comments a hostile environment will occur. Eventually. Pamela Morrison. over a period of 10 months made at least 18 sex-based comments to her [Boumehdi v. 2007]. he asked her what business she had getting pregnant at her age [Boumehdi v. a “loose” atmosphere pervaded the night shift of a fabrication department where there was a tremendous amount of horseplay in the work area replete with shop/locker room talk that included the use of profanity as well as crude and vulgar terms [Parker v. Plastag Holdings. On another occasion. Male employees routinely made sexual comments about and to female employees. noting that he did not ask men to do the cleaning because that’s what women were supposed to do [Boumehdi v. he told her that she should consider it a compliment.” and “crybaby. Pamela Morrison at 52]. 2007]. When she reported the problems to her supervisor. Over about a six-month period. male employees routinely talked about their sexual activities and asked her about hers. Plastag Holdings. She was repeatedly referred to as “whore. implying that she was promiscuous [Parker v. all of the inappropriate conduct caused her to take two separate medical leaves of absence. 2007]. General Extrusions. 2005].Nevertheless.

can mitigate the severity of the conduct. City of Burlington. and the male police officers would come in and undress or urinate while the janitorial staff cleaned [Duguie v. staring can rise to the level of actionable hostile environment as it did in Billings v. Scollon Productions [2003]. In reversing a summary judgment for the city. a co-worker in the City’s Department of Transportation rubbed his crotch in front of the victim nearly every day for about six months [Valentine v. Town of Grafton. 2006]. VISUAL CONDUCT Conduct of a visual nature can lead to a legitimate hostile environment claim as well. City of Burlington. Even after complaining. and use sexually-related gestures. This lasted for some two and a half years. However.circumstances are egregious enough to permit a reasonable juror to conclude that the conditions of Fairbrother’s employment were altered because of the hostile work environment she faced undermined her ability to perform her job” [Fairbrother v. causing her to experience anxiety. repetitive. the conduct did not stop. talk about intimate sexual activities with their wives or girlfriends. On at least 6 occasions. He also humiliated her in front of her co-workers with an unwelcome sexual prank that involved him mimicking masturbating. involving a female-form mannequin [Ocheltree v. The context. and depression. In Valentine v. there were only a few such isolated incidents and they were not considered sufficiently severe or pervasive to create a hostile work environment. a new female shoe production worker began to be increasingly subjected to male sexual antics that went on for about a year. She started avoiding being alone with him and would hold a piece of paper in front of her chest while walking through the office. Scollon Productions. City of Chicago at 681]. and the pervasiveness of the conduct. He would make eye contact then his eyes would shift to her breasts and he would stare at them for approximately five seconds or longer. 2003]. staring. A secretary to the town administrator began to notice after a few months that her supervisor was looking at her chest during conversations with her. Visual conduct includes gestures. Scollon Productions. the male employees would make sexually explicit comments. it continued. In Duguie v. Town of Grafton. The harassment was so offensive at times that it would drive the victim from the workroom. City of Chicago. he rubbed her arm or shoulder. janitorial staff would be cleaning men’s bathrooms in a police department. Pamela Morrison at 53]. He once stared at her so many times in the first half hour of the day that she went home to change the sweater she was wearing [Billings v. and revealing or directing attention to body parts. He repeatedly asked her for dates [30 to 40 times] and made repeated comments about her “tits” and “ass”. severity. City of Chicago. inability to concentrate. The courts found the actions to be pervasive. he also asked her on at least 20 occasions to leave her fiancé [Valentine v. These actions included fondling the mannequin and demonstrating various sexual techniques on it. Even though she continually made him aware that his behavior was unwelcome. however. In Ocheltree v. Although usually innocuous. 2003]. The Seventh Circuit reversed a summary judgment for the employer and allowed the case to go to trial because of the frequency. the First 122 . 2008]. 2006]. Almost daily. displaying pornography. and humiliating enough as to create a hostile work environment [Ocheltree v.

2008]. There were no systematic discernable differences among the various circuit courts. In Bright v. CONCLUSION Determination of a hostile environment is not a simple process because each case must be considered in its own context with varying circumstances requiring interpretation of the conduct involved. Nettle Creek School. it is difficult to present precise directions as to determining an exact hostile environment legal threshold.Circuit stated that the conduct was not isolated and could be found by a jury to be satisfactorily severe and pervasive [Billings v. Hill’s Pet Nutrition. in Lucero v. and they would make streams of misogynistic invective remarks [Bright v. Often. Given that the exposure was brief. Exposure to pornographic pictures in just a handful of incidents can lead to a hostile environment verdict. the nature of her job was such that she was used to seeing nudity as part of her job. However. In Criswell v. therefore. Consolidated City of Indianapolis and Marion County. a female crime lab worker discovered two pornographic videotapes left by a man who had retired. male production workers would try to make women view pornographic material on the men’s computers while they were training them [Bright v. the courts found no violation [Lucero v. or vulgar language is not commonly protected activity. While the courts found these incidents to be deplorable behavior that no teacher should be subjected to. 2007]. 2007]. some general guidelines can be provided. When the women refused to view the pictures. the workplace was replete with unwelcome sexual overtures by males. which is inherently complex. on one occasion a student held up a picture of a student's naked buttocks. less severe forms of physical touching that are nonthreatening when isolated and occur over a number of months are not usually deemed illegal. However. Teasing. it takes a significant amount of frequent unwelcome sexually-related behavior over a considerable period of time to cross the hostile environment demarcation point unless it is clearly humiliating and involves touching of private parts and/or is threatening. but less severe incidents may take many occurrences and months to create a hostile environment. 123 . Visually related behavior that is severe only takes a few instances to create a hostile workplace. based on the appeals court decisions reviewed. In addition. Intellirisk. 2007]. this may be due to the comparative lack of usable cases for a number of the circuits.Intellirisk. Nettle Creek School. Town of Grafton. joking. and on another occasion 20 playboys were placed in the same teacher’s classroom by some of her students [Lucero v. Usually. Nettle Creek School. Nettle Creek School at 730]. sexually related comments by themselves must generally be more frequent and often take 6 to 10 months or more to become hostile [though not always]. In general. the men would not conduct any further training. in Coolidge v. 2008]. and due to the accidental nature of the discovery. This lasted for over two years and was ruled to constitute a hostile environment. Hill’s Pet Nutrition. However. Likewise. 2009]. the Eleventh Circuit Court of Appeals ruled that exposure to explicit pornographic pictures on three separate occasions were so extreme and severe that a hostile environment ruling was appropriate [Criswell v. Hill’s Pet Nutrition. the incidents were nevertheless “isolated and were neither sufficiently severe nor pervasive as to rise to the level of actionable harassing conduct” [Lucero v.

morale. or unprofessional [sexually-related or not] behavior in the workplace.Administrators are under no legal obligation to withhold corrective action until the hostile environment limit is reached. education. religion. This would be particularly important for high profile managerial and media positions as well as government. It would also be important in other work environments as well. it will minimize legal exposure to sexual harassment litigation. Second. In fact. and perhaps more important. which can only detract from workplace productivity and ultimately affect worker motivation. such as hazardous occupations where “horse play” of any type can result in serious injury. legislators at both the federal and state level should at the very least consider tightening the sexual harassment rules governing these types of occupations and work environments. 124 . Nor are they required to tolerate teasing. and child care institutions which are often held to higher social standards due to the nature of their work. however benign. This accomplishes two important purposes. it makes much more sense for organizations to propagate policies that are intolerant of such behavior. and performance. crass. Even though workers are not guaranteed a pristine environment. In fact. sexually-related behavior and any unprofessional or vulgar behavior could affect workplace productivity and morale long before legal stipulations are breached. In any event. vulgar. well-being. organizations are well within their legal rights to formulate policies and procedures that go so far as to have virtually zero tolerance for such conduct. it creates a work environment free from unprofessional and sexually-related conduct. These policies may be in addition to or incorporated into the organization’s current sexual harassment policy. First.

Family Health Systems. Pizza Hut. Fairbrother v. 2005]. 2008]. Florida Board of Regents. Meghan Bussel v. City of Burlington. Geraldine Dar Dar v. Inc.3d 1013 [11th Cir.3d 1302 [11th Cir. 525 F. 212 F. 379 F.1998]. 2006].3d 781 [7th Cir. Appx. Vicki Criswell v. What the general practitioner needs to know to recognize sexual harassment claims. Lapka v. Atlanta Gas Light Company. [2009] http://archive.. 2000]. 2006]. 164 F. Lucero v. Julie Boumehdi v. 2008]. P [2007] Labor & Employment Law Text and Cases Thompson/West. 1986. 2008]. [2006] 29CFR1604. City of Chicago. Columbia Palms West Hospital.3d 353 [7th Cir. Inc. Town of Grafton. July. 1998]. [4th Cir. 490 F.3d 428 [5th Cir. Appx. Meritor Savings Bank v.3d 79 [1st Cir. 491 F. 2005]. 515 F. City of Chicago. 2004]. 280 F. Shoenfelt L. 2006. 04-3468 [6th Cir. Twomey. 2009]. Robinson Worldwide. Reasonable person versus reasonable woman. Nancy Parker v. Hostetler v. EEOC. 248 fed. General Extrusions. 2003].3d 798 [7th Cir. City of Waukegan. 2006]. Ann M. G. Motorola. 489 F. Donna Randolph v.3d 720 [7th Cir. Vinson.html.3d 430 [7th Cir. 145 [11Cir. Latrece Lockett v.. 2008]. Magalena Pomales v. Appx.3d 597 [2nd Cir. 10. Nicole Schiano v.3d 670 [7th Cir. Mary Dianne Tatt v. Faragher v. 335 F. Green Tree Credit Corp. 2007]. 433 F. Indiana Department of Corrections. Hill’s Pet Nutrition.S. 2005]. & Nelson J. 452 F. Plastag Holdings. Elaine Webb-Edwards v.3d 974 [7th Cir. Celulares Telefonica. Intellirisk Management Corporation. 2002].11. 162 F. Appx. 406 F. The Alabama Lawyer. McPherson v.[1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39] REFERENCES Adusumilli v. [2001]. 412 F. 2000]. 819 [11th Cir. No. 660 [11th Cir. Elizabeth A.3d 675 [7th Cir.3d 571 [11th Cir. Bright v. Inc. Inc.3d 895 [7th Cir. Appx. 161 Fed. American University Journal of Gender Social Policy & Law. Anne B. 218 f. 2008]..eeoc. Leah A. 445 F. Consolidated City of Indianapolis and Marion County. 2007]..3d 39 [1st Cir. Inc.. 447 F. [2nd Cir. Rhonda L. Billings v. Nurse “BE” v. Raciot v.H.3d 766 [7th Cir. 62. 2009].S.3d 39 [2nd Cir. 524 U.gov/stats/harass. Inc. 2005].3d 1062 [10th Circuit. [2002].. 775 [1998]. Patt v. Australia. Kelly S..3d 749 [7th Cir. Inc. 82 [11th Cir. Westward Communications. Wal-Mart Stores. City of Boca Raton. 510 F. Harvil v.3d 731 [7th Cir. Quality Dining. Quality Payroll Systems. 633. 57.. Code of Federal Regulations.3d 596 [6th Cir. Lisa L. Moser v. Inc.L. 505 F. 1998]. Rena Lockard v. 525 F. LLC. Coolidge v. Pamela Morrison. 2007].3d 325. Michael Chertoff. Maue A. Inc. 2007]. 286 Fed. Sharon A. 2006]. 517 F. 141 Fed.3d 1139 [11th Cir. D. Patricia Duguie v. Scollon Productions. Miller. 159 f. Srabana Gupta v. 477 U. Ingrid Reeves v. Appx. 315 Fed. Quinn v. 2006]. 414 F. 862 [11th Cir.. Orange County Sheriff’s Office. Inc. Nancy M.. 2005].. Donna Valentine v. 138 Fed. Ocheltree v. 246. C. 125 .3d 759 [2th Cir.. 2007]. 2007]. 2005]. 566 F. Nettle Creek School Corporation. Choice Hotels International. Ohio Department of Youth Services. Associated Outdoor Club.

and information-based goods and services are predominant. the locus of business decision-making is moving closer to the consumer through disintermediation of the production chain. innovation THE NATURE AND PURPOSE OF FIRM DECISION-MAKING Over a fifteen-year period. DECISION-MAKING EVOLUTION Advanced markets. As the American economy transitions to a post-industrial model in which knowledge. • Greater decision volume/complexity and competitive market pressures have transformed the former “labor” factor of production into “intellectual capital” which is now the firm’s predominant competitive differentiator. management choices that were once the domain of officers and chief 126 . the management of intellectual capital has not kept pace with changes in the decision environment. Suggestions for fostering firm innovation are offered. Growth in the number of such decisions has transformed the former labor production factor into intellectual capital which is now the firm’s predominant competitive differentiator. ABSTRACT Using economic data from companies in multiple industries.edu. Forcier School of Business & Professional Studies University of San Francisco 2130 Fulton Street San Francisco. new organizational designs. forcier@usfca. The research concludes that: • Flattened firm hierarchies have pushed greater responsibility to managers at the operating level who must function within environments that are characterized by increasing market sophistication and decision complexity.THE NATURE AND PURPOSE OF FIRM DECISION-MAKING James R. 415-422-5036 (F). human capital. California. and firms are at risk of failing to generate the innovation needed for success in the competitive marketplace. research and direct observations were undertaken at 37 firms in conjunction with business strategy and microeconomic analysis consultations [1]. • The management of intellectual capital has not kept pace with the changes in decisionmaking and economic production. and changed means of production – as well as growing technological sophistication – are transferring business decision-making responsibility to the individual. and firms often fail to generate the innovation essential for success in the competitive marketplace. 1. As a result. USA 94117 415-422-2127 (O). However. the paper suggests that costs and competitive pressures have flattened firm hierarchies and pushed greater responsibility to operating managers who function within environments of increased decision complexity. Key Words: Decision-making.

Particularly vulnerable are managers working in high technology. In other words. DECISION-MAKING INFLUENCES It falls to the decision-maker to function effectively within this daunting milieu. but not in identifying which applications and data to use for a given decision. 2. The burden such decisions impose on business managers is significant. nor in determining whether specific analytical findings are decision-relevant. Software applications available as decision aides may help in aggregating. for their decisions are disproportionately characterized by transaction complexity and market sophistication. As a result. decision difficulty has increased as responsibility is pushed downward and subject matter complexity grows in conjunction with technological advancement. and financial services.and low-level managers. Research carried out over fifteen years across multiple sector industries suggests that individual managers’ approaches to handling market and decision complexity are driven by “educational”. 127 . The ease with which such a theoretical ideal may be achieved diminishes with the complexity of a given transaction and the evolutionary state of the environment in which it is made. “experiential”. the diminished time-frames in which transactions are carried out. and provides a baseline against which real-world transactions may be evaluated. the realm in which decisions are made varies. and are carried-out through a process of what might be called “collaborative determination.executives increasingly fall to a wide-array of informally tethered mid. and choice-making processes appropriate to both the subject matter and the decision context. and comparing data. Most economic needs are met in developed nations through market transactions using a form of “bounded” maximizing behavior [2][3] and a process that might be called a “free market transactional model. and “intuitive” decision-making influences. The challenges of decisionmaking are also heightened as a result of the evolved environment in which today’s choices are made: the growing sophistication of economic participants. shaped by societal and cultural influences.” This process vests individual managers with greater authority to make decisions under the implicit understanding that they will do so in collaboration with their colleagues. In addition to the greater volume of decisions that is being handled at lower organizational levels. the increased velocity of capital flows.” The model captures the components needed to achieve a transfer of property rights perceived as beneficial by the contracting parties. pharmaceuticals. organizing. managers exhibit less reliance on programmed or academic/research-type tools than on what they have learned in school and in the workplace. the internationalization of markets. In the latter cases. today’s business decisions demand that managers function on a higher plane – by making use of better tools. more accurate and targeted data.

popularly publicized techniques (“excellence. For despite the free market’s reliance on the use of a rational decision process by its participants.” “Kaizen”). firm and industry “ways of doing business”. social. community • Preordination v. and workplace. molded. loser” mentality common Engineering (EE) • Technical/product orientation • Emphasis on the physical and functional • Technique misapplication common Experiential Department-Specific Approaches: • Supervisor-preferred • Prevailing/accepted in department • Prevailing/accepted in function or discipline Firm-Specific Approaches: • Top management-preferred • Prevailing/accepted in firm Intuitive Socio-Economic: • Market-based economy • Peer affiliations • High quality schooling • Available information • Emphasis on trade & travel Cultural: • “Western” v. and cultural. empowerment • Politico/military viability & stability • Strength of religious and political institutions Market/Technology Developmental: • State of economic and institutional evolution • Technological status Firm Culture-Influenced Approaches: • (Use and rank depends on market share and prestige of firm) Industry-Specific Approaches: • Prevailing/accepted in industry • Industry-leading firm-preferred Organizational Planning & Development (MA) • Human resources orientation • Emphasis on organizational design • Paternalism/humanism common Industry Culture-Influenced Approaches: • (Use and rank depends on public attention to and prestige of industry) The implications of the above influences are profound. and re-directed by: the methods and orientation learned in one’s school. 128 . democracy • Self-sufficiency v. DECISION-MAKING INFLUENCES Educational Business Administration (MBA) • Business case study orientation • Emphasis on prevailing Bschool approaches • Tool du jour influence common Accounting & Finance (MA. the reality is a process that is limited. and predilections.” “benchmarking. and political norms. ephemeral. “eastern” orientation • Strong v. MBA) • Numerical/analytical orientation • Emphasis on statistics/ operations research • “Quantifying the unquantifiable” common Legal/Regulatory (JD) • Legal case study orientation • Emphasis on contracts/ confrontation • “Winner vs. biases. weak work ethic • Prevalence of literacy (esp. religious. profession. English) • Emphasis on knowledge-based decision-making Geographical: • Climate • Hemispherical location • Abundance of natural resources • Proximity to cultural & commercial centers Religious/Political: • Authoritarianism v.TABLE 1.

5 percent of America's employed work on farms and ranches. but a lot of technology and capital. sold stock to raise capital. Because service production is labor intensive. 3. we now use predominately intellectual inputs to provide services from just about any location on the globe and employ technologies ranging from 129 . Today we make use of relatively little land and traditional labor. and our noblest attempts doomed to achieve satisfactory rather than optimum results. Where we once required land for a factory or farm. and employed workers in repetitive tasks using basic skills.In addition to the above-mentioned limitations to maximizing decision-making outcomes may be added decision-makers’ inability to achieve the theoretical ideal of “perfect information”: there are limits to one’s ability to identify and gather relevant information. our ability to provide more services with a smaller percentage of workers lies in changed production factors.S. clear choices. Today. over 90 percent of the U.S. and employ it accurately. Manufacturing employed 38 percent of the workforce in the 1950s. Traditional industry now employs just 16 percent of American workers. economy has undergone enormous evolutionary changes since the industrial revolution. our rationality is still “bounded”. analyze it effectively. comprehensible market environments. as shown in Figure 2. FIGURE 1. TRANSFORMATION OF THE ECONOMIC FACTORS OF PRODUCTION The U. only about 1. two hundred years ago. For example. cooperative peers guided by “the good of the organization”). Even in marshalling our best efforts under the best of conditions (sufficient information. workforce was dedicated to agriculture. PRODUCTION FACTOR TRANSFORMATION Factors of Production: Economic Significance 1907 2007 Land Capital Technology Labor Land Capital Technology Labor Another change has taken place in the economic “factors of production” – the major inputs that businesses need to function. while the percentage in service jobs has grown steadily and employs 82 percent of our workforce today [3].

The manner in which the value of intellectual capital may be maximized relates specifically to the firm’s situation. and use increasingly sophisticated technologies in more challenging markets. the firm’s approach to developing. its unique means of providing value to stakeholders. its primary means of achieving competitive differentiation. they have greater need for “intellectual capital” as a factor input. The workforce is the firm’s stock of productive skills and technical knowledge. THE ENDS OF DECISION-MAKING As a result of the “flattening” of corporate structures and the dispersion of decision-making authority. Intellectual capital doesn’t only reside in the longstanding enterprise and capital factors. It includes intellectual property. and supporting products and services. as once was the case. intellectual capital refers to the information. Because firms today demand “knowledge workers” rather than physical laborers. knowledge. and capabilities that enable a firm to compete in its markets. These changes have implications for decision-making. create fewer physical products in favor of services. As used here. 4. producing. FROM LABOR TO INTELLECTUAL CAPITAL Intellectual Capital as Production Factor Intellectual Capital Land Capital Technology Labor 100% 80% 60% 40% 20% 0% Labor Capital Technology As the key competitive differentiator.micro circuitry to super colliders. and the catalyst that enables and strengthens the contributions of other production factors through multi-factor productivity. FIGURE 2. the workforce – through its decisions and actions – has become the major source of 130 . business model. It is also housed in the relatively small labor factor (see Figure 5). and all of its value-creating internal and external relationships. and strategic objectives. it is imperative that businesses acquire intellectual capital and put it to the best possible competitive uses.

its officers. Work Group Blends Scholars such as Cohen. and to reinforce the change process. Inordinate attention is paid to educational qualifications (which are easy to verify) . less expensively?” “What entirely new things should we be doing to delight our customers and enter new or grow existing markets?” 3) Implement processes and tools to support new ways of thinking. augmented by an interview of 1 to 3 of the leading candidates. company-wide awareness of the need to change. Given time and resource constraints. faster. and increasingly rely on internet searches and automated tools to identify. but to achieve efficiency in production and effectiveness in meeting customer needs. For example. It is the predominant driver of superior profitability and value creation. innovation is “the most important building block of competitive advantage” [4]. the firm must be dedicated to the pursuit of innovation in support of not only its products and services. sort and track candidates – rather than assess their ability to function effectively in given positions.competitive advantage and the primary determinant of success in today’s business environment. and the ascendancy of global competition. emphasize resumes versus capabilities. a primary driver of business value – productivity – is determined by the effectiveness with which human capital transforms a firm’s inputs into outputs. but most importantly embrace – and be willing to tolerate and pay for – failures that the firm will experience. As Charles Hill and Gareth Jones have noted. or maintain its costs below those of competitors. Yet firms perform cursory candidate assessments. Four aspects of a culture of innovation were observed in this research: 1) Ensure a company-wide awareness of need to change to the point where managers know they must step outside their pre-existing comfort zones. candidate-provided work histories. March and Olsen demonstrate convincingly that work group are human capital blends from which any addition or withdrawal results in a unique decision reflecting the 131 . 4) Adopt attitudes and mechanisms to minimize risk. at the expense of the competencies that are essential for achieving strategic objectives. 2) Encourage innovative ways of thinking – to not only assess what is and isn’t working. salespeople and customer service representatives must have the requisite knowledge and skills for their roles. Given the growing sophistication of goods and services. But the greatest contribution made by human capital is innovation. but to continually promote improvement. managers. Innovation allows a business to charge a premium for the uniqueness of its products. A firm’s workforce. the disintermediation of production chains and transactions. and the ability to upgrade them as the changing marketplace requires. the internationalization of markets. “How can we do this better. Staffing with Innovators The seminal step in maximizing intellectual capital’s value through the pursuit of innovation is acquiring superior human assets. continue to provide the bulk of the evidentiary support for external hiring.

the increased velocity of transactional flows. firms require “intellectual capital” rather than “labor” as a factor input. Another means of building innovation competency is what is referred to as “open innovation. While decisionmaking aides are available. but in the use of crossfunctional integration to maximize the likelihood of innovation success. As a result. 132 . One way in which this process is formalized is by means of a “development funnel” that isolates and routinizes [6] the major components of the assessment process. and “intuitive” decision-making influences and the limitations of rationality and cognition. 5. and the economic means of production are transferring business decision-making responsibility to the individual manager. think tanks. and the diminished time-frames in which decisions are carried out. The Development Funnel & Open Innovation In their explicit pursuit of an innovative culture. Doing so requires an innovation culture fostered through such means as effective staffing. inventors. technology. Intellectual capital is the key competitive differentiator for businesses which must deploy innovation as the predominant driver of superior profitability. and that innovation-related decisions are aligned with the firm’s prevailing business model and strategic objectives [4].” Rather than set up an internal “skunk works” or R&D group. processes. open innovation is outer-directed: The firm collaborates with and enlists the support of customers. innovation leads to new products. that development costs and time-to-market are minimized. some firms have adopted a process for identifying and selecting among promising ideas at an early stage of their development. how the alternatives are analyzed. these participant mixtures have influence not only at the margins of decision-making. SUMMARY AND CONCLUSION Advances in markets. decision-makers demand a wider array of tools. As a result of this evolution in decision-making. work group configurations. and the manner in which choices are implemented. Over time. and ensures that ideas are not subject to personal or departmental interests that might obstruct an objective evaluation of them. data. and processes. “experiential”. but can – and frequently do – alter the slate of decision alternatives. and open innovation.participants who contributed to it [5]. the growth and internationalization of markets. and strategies that create competitive advantage. suppliers. The complexity and resolution difficulty of decisions have also increased due to more sophisticated economic participants. This is an important consideration not only in the general hiring process. universities. organizations. Cross functional integration can the firm ensure that new products reflect customer needs and are designed for ease of manufacture. Further. and makers of complementary goods who then contribute to the development of products. development funnels. services or processes. managers rely greatly on what they have learned in school and in the workplace and are constrained by “educational”.

M. Deloitte Consulting. New York: McGraw-Hill/Irwin. Mjuice. Mason. Strategic Management: An Integrated Approach. VISA USA. 17. C. Amaranth Advisors. CPRi. Pathology Consultants of New Mexico. DocuStop. The Economy Today.2010: AirTouch Communications. [3] Schiller. HandTrade. NY: The Free Press. Olsen. Ashram Networks. 12th ed. [5] Cohen. 1-25. Ivus. Charles Schwab. Berkeley City Ballet. Market Answers. H. 1976. (1947). 2010. 3rd ed.. Digital Island. J. Pacific Telesis. BigTribe. BMC Software. Jones. 1972. Ohio: South-Western. ProConscience Funds. Santa Fe Pacific Pipelines. G. Apple Computer. PCTel. IC Growth. A... Round 1 Corporation." Administrative Science Quarterly. R. New York: Oxford University Press. March.. M. TechPartners International. PG&E. Sun Microsystems. [6] Weber. ARTISTdirect. J. Theory of Social and Economic Organization. "A Garbage Can Model of Organizational Choice. Liquidity Partners. Comcast. AT&T. New York. 2010. B. Play Inc. Pacific Rim Transport. Administrative Behavior: A Study of Decision-Making Processes in Administrative Organization. 133 . Cisco Systems. [4] Hill. R. Televoke. Avolent.REFERENCES [1] Businesses at which decision-making research and observations were performed 1995 . 9th ed. ZYZZYVA. Optimal Technologies. W. [2] Simon.

discusses the alleged advantages of long-term incentive awards.S. and annual incentive bonuses in particular. Other companies are taking yet a different tact. plans to defer at least a portion of its executive bonuses for 2009 for their top 30 executives. identifies features of long-term incentive plans that can lead to unfair monetary compensation for executives. The use of these annual incentives in the financial services industry over the past several years has been cited as one of the causes leading to the recession of 2008-2009. To blunt criticism over bonus pay. there are many features of long-term incentive plans that can also lead to unfair and excessive executive compensation. many researchers and business practitioners are advocating the increased use of long-term incentive plans in hopes of mitigating the undesirable effects of annual incentive awards.edu ABSTRACT Recently. or SERPS [22]. Heisler Sorrell College of Business Troy University Troy. Rather than placing as much money in bonus opportunities. This paper examines the concerns associated with short-term annual incentive awards. executive pay. Most of the criticism has been directed at the alleged excess of executive pay packages. Morgan Stanley. This so-called abuse has been heightened by two factors: (1) the award of large bonuses to executives by banks who received TARP funds to help them survive the economic meltdown that occurred in the fall of 2008 as a result of the mortgage crisis and (2) the recession which followed the meltdown that has resulted in the loss of approximately four million jobs and produced an unemployment rate just shy of 10% [6] [23]. these companies are directing more money into supplemental executive retirement plans. executive pay – particularly short-term incentive awards – has come under a great deal of public scrutiny and criticism. incentives. As a result. bonus. many companies have taken unprecedented steps with regard to their executive compensation programs. Some company executives have forgone bonuses all together [25]. But other industries face similar concerns. the second-largest securities firm in the U. However. has come under a barrage of criticism [8] [12] [14] [21] [26]. Goldman Sachs Group has stated it will pay bonuses for 30 top executives in stock that can’t be sold for five years [9]. LTIP INTRODUCTION In recent years. and offers suggestions for improving the design of long-term incentive plans to minimize these dysfunctional effects. others are raising executive salaries instead [19]. 134 . Alabama Email: wheisler@troy. Key words: executive compensation.LONG-TERM INCENTIVE PLANS: NOT A PANACEA FOR EXECUTIVE COMPENSATION William J. These moves have been largely overlooked amid the backlash surrounding executive pay – particularly at banks and other companies receiving taxpayer bailouts.

Most annual executive compensation payouts are in fact “incentive awards” in that they are based on meeting or exceeding preset performance targets. the problems cited with incentive pay include the following. within any organization. First. these incentives are purported to be based on performance. reducing R&D. annual incentive awards (also referred to as shortterm incentive plans or STI plans) were viewed skeptically by many. that measures of financial performance encourage abuse from impatient CEOs who may manipulate their outcomes by delaying maintenance and capital investment. Thus. This is the form of annual award that is used by most large business organizations as part of the executive compensation package. bonuses are typically based on financial measures alone. have merely happened to be in the right place at the right time.S. In Germany. Another concern he cites is the assumption that the CEO and a few other top executives are primarily responsible for the success of the organization. Second. and quite correctly. Typically. Bonuses are discretionary and more subject to abuse because they tend to be based on subjective decision making processes. a “bonus” is a discretionary payment awarded after-the-fact for performance that occurred during a previous time period. An excellent discourse on the dysfunctional aspects of executive bonuses appeared recently in an op-ed piece in the Wall Street Journal [17]. However. banking regulators are initiating regulatory actions to curb bonuses in financial firms by voiding or reducing bonuses if the regulators felt that the performance of the individual or job did not warrant it [2]. Incentive awards are determined more objectively because they are based on measured performance against target. he notes. or eliminating various forms of customer service.S. criticism is raised regarding executive bonuses. this term is erroneous in most instances. he contends. those awards that are performance-based rather than discretionary. France. This paper discusses the problems associated with annual incentive awards. Even prior to the recent economic meltdown. they are typically directed at a relatively small percentage of the workforce. individual incentives will create haves and have not’s.000 [10]. proposes to sooth public outcry by enacting a one-time tax of 50% on bonuses awarded to bank employees that exceed $40. for one. 135 . not just the select few at the top who receive massive bonus payouts. First. but performance is not always easy to measure and often bonuses are paid to executives even when the organization’s performance has declined. government is also considering ways to curb what it considers executive excess by restricting pay practices in companies that have received TARP funds and by undertaking other reforms of executive pay practices to bring greater accountability to the U. Written by the noted management expert Henry Mintzberg. Further. The United Kingdom has proposed a special windfall profits tax of up to 50% on the bonus pools of banks that have received government assistance [27].Governments worldwide are also responding to the criticism surrounding excessive executive bonuses. financial system [14]. Many at the top. The U. ANNUAL INCENTIVE AWARDS In most of the media-related discussion of executive compensation. He argues that the success of an organization depends on the contributions of all the players. which Mintzberg contends is ineffective because companies are more complicated than that.

and (2) individual incentives do not foster a collaborative approach. is the determination of the range of company performance that will qualify for bonus consideration. and little else. they may propose payouts of up to 200% for performance at 120% of target. Many CEOs also serve as Chairman of the board of directors. Gebhart & Milkovich [11] note that (1) individual incentives often lead to motivating employees to do only what they get rewarded for. Among the most popular appreciation-based LTI plans are stock options and stock appreciation rights. there is growing interest among researchers and some organizations to place less emphasis on short-term. If performance targets are set too low. First is the process for setting performance targets. The third area is the level of interdependence between executive and director compensation. in an article in Director’s Monthly. Incentive plans work effectively only if targets are set realistically with “stretch goals” for maximum payout opportunity. in an effort to curb some of the abuse and the criticism surrounding annual incentive awards. long-term incentives (LTI) are “inducements offered in advance to influence longer-rate (multi-year) results. the bottom line is that “the system can’t be fixed” and.Others have also raised issues with individual annual incentives. for example. threshold payout of perhaps 50% at 80% of target). Second. LONG-TERM INCENTIVE AWARDS According to Milkovich and Newman [16]. executive bonuses should be eliminated. depending on plan design. executives can reap maximum rewards for “average” performance or. Both the diversity and use of long-term incentive plans have grown considerably [4].” Their intent is to get executives to focus on long-term organizational objectives. but in many instances the company CEO often is the one who recommends increases in the compensation of directors – often at the same meeting.g. For Mintzberg. Vroom [24]) that incentives do motivate performance. Performance-based plans can include any of the stock plans identified previously except that they incorporate vesting conditions based on company performance against pre-set performance standards. In addition to the criticisms cited by Mintzberg [17]. even some level of payout for subpar performance. The appropriate level of payout at various levels of performance depends primarily on the rigor embedded in the target performance level.. There is widespread belief and ample supporting theory (see. The proportion of executive pay that is comprised of long-term incentives has also increased and is now approximately one-half the total value of the executive’s pay [18]. Full-share programs are typified by restricted stock. most will not. Typically. However. Heisler [13] identifies additional areas in which annual executive incentive awards can be manipulated. Further. Most long-term incentive plans can be categorized as either appreciation-based or performance-based. these plans are performance 136 . Companies may propose that executives qualify for a partial payout at certain performance levels below target (e. While some companies and Wall Street analysts may agree with this perspective. the objectivity and independence of the compensation-setting process is itself questionable. The relationship between executives and the board of directors is relatively cozy when it comes to compensation. It is the board of directors that approves executive compensation plans. Similarly. annual incentive awards and place greater emphasis on long-term incentive plans to encourage a longerterm strategic executive focus [7]. and related to the first. Thus. Long-term incentives now take several forms. therefore.

However. it is a more secure form of compensation. Each year. company performance is compared to that year’s goals and shares are earned based on the terms of the plan.000 shares if the objective is exceeded. However. it may simply be a move to ensure that executives have a greater guarantee of receiving the value originally conveyed by the stock grant. When this occurs. however. in a given year an executive could be awarded 3. the change to restricted stock may also be viewed as an action by company executives to move to a form of compensation that has greater potential to provide a guarantee of value to executives. Prior to the recent recession which began in 2008. many companies have suggested the need to turn from stock options to restricted stock in their executive compensation plans. However. primarily in the form of stock options. Depending on the terms of the LTI plan. a major international accounting and consulting firm. the executive could earn the 1. Hence. several observations are necessary regarding changes in the use of other types of stock plans by companies. they can even become “underwater.000 performance shares which could be earned over a three-year period at a rate of 1. a company’s stock price must appreciate back to the original grant price before the option can again achieve positive value. the change to restricted stock is being reported as a responsible move by companies to reduce the criticism associated with the wealth built up by executive stock option grants during the last bull market. While this article will focus on the use of performance share/unit plans because these are the most performance-driven types of plans. executive compensation plans were heavily stock-based. Options have value only if the price of the underlying stock appreciates.000 shares per year. retains a positive value as long as the company does not enter bankruptcy. In a recent study [1] conducted by Deloitte. earned shares are paid out in company stock. Sixty-four percent of these companies offered granted stock options. Performance share and performance unit plans provide executives with an opportunity to earn cash or stock payouts when specific organizational goals are achieved or exceeded over a multiyear period. In fact. Restricted stock. and forty-five percent used multi-year performance plans payable in stock or cash. sixty-seven percent of companies participating in a compensation survey stated that they offered long-term incentives to motivate and compensate high-performing employees and executives. executives are awarded contingent grants of stock annually that can be earned over a multi-year period. At the end of the full period. Under performance share plans. sixty-seven percent awarded restricted stock.share plans or performance unit plans.g. the company normally retains the option to pay the executive the equivalent cash value in lieu of stock. While its value will rise and fall with the company’s stock price. Under both of these plans.000 shares if the objective is not met or more than 1. EPS target). While the change to the use of restricted stock on the part of companies may appear to be more “sensitive” to the current economic climate. due to the volatility of stock prices and the prospect of depressed stock prices for the near term. Restricted stock retains the value of the underlying stock. the executive could earn less than 1. Often. For 137 . typically three years. For example..000 shares in year 1 for meeting the company’s objective (e. it is unlikely to be worth nothing. Stock options have the potential for unlimited gain.” That means that the current value of the company’s stock is less than the exercise value or grant price of the option. but they also have the ability to drop to a value of zero.

increasing market share.example. or more than the 3. they are seen as a way to reduce the likelihood of executives focusing on short-term gains at the expense of a company’s longer-term strategic perspective. The same opportunity would be afforded the executive in years 2 and 3. it is first necessary to explain more about how performance share/unit plans are developed. similarly. in addition to the overlapping performance periods.000 shares. companies also use performance units to focus on goals they want to achieve other than stock price performance (e. at the end of the three-year term of the grant. Primarily.g. Long-term incentive plans are being advocated as an alternative to annual incentive awards or bonuses for several reasons. the terms of the plan may include additional vesting requirements for restricted stock payouts that can serve as a vehicle for executive retention. And since both performance share plans and performance unit plans involve performance targets. Thus. Thus. At the end of the performance period. three years).g. While performance goals or targets can also be based on increases stock price or earnings per share. an executive is given a number of performance units. CONCERNS WITH LONG-TERM INCENTIVE AWARDS While there is much that is appealing about long-term incentive awards when contrasted with annual incentives or bonuses. LTI plans bear a marked similarity to STI plans in terms of the problems that may be encountered. they communicate to executives the financial measures and levels that drive company value and create a greater link between executive and shareholder rewards.. In this type of plan. To understand the concerns. EPS goals) for the performance period (e. at any given time. An illustration of an annual grant schedule with a three-year maturity is shown below: Year 1 Year 2 Year 3 Year 4 Year 5 XXXXXXX XXXXXXX XXXXXXX Grant 1 XXXXXXX XXXXXXX XXXXXXX Grant 2 XXXXXXX XXXXXXX XXXXXXX Grant 3 Performance unit plans (PUPs) are very similar to performance share plans. executives could earn up to 150% or even 200% of the share award if actual results are 120% of the performance target. Performance share plans are particularly attractive because they typically pay out in restricted stock which provides executives with an ownership interest in the company.g. If the executive achieves the stated goals over a defined period (e. less than the 3. the executive may have earned the full 3. In most companies these 138 . achieving a greater number of new products). they may not resolve the multitude of concerns that have been raised about executive pay. Hence.000 shares of the original grant.000 shares.g. earned shares are paid out in the form of restricted stock. these plans are performance target plans. 3 – 5 years). If desired.... each unit earns a cash award based on the percentage of attainment of specified goals. They involve setting performance targets (e. As noted previously. another three-year grant may be awarded to the executive. Each year. Many plans also permit a cash payout in case sufficient shares of stock are not available for issue. which have no value when issued. the executive is earning stock from three separate annual performance share grants with overlapping performance periods. many plans call for executives to earn 50% of the share award if 80% of the performance target is attained.

the initial EPS targets will be based on actual earnings from the previous year as well as future earnings expectations. For each grant year. it would award the executive 6. the EPS target each year according to the terms of the LTI plan.42 $2.50 Year 4 $2.02 Having described how performance share LTIPs work. year 2. For example. the executive would be eligible to earn 2.75 Year 5 $3. since new data regarding company EPS performance is now available. depending on the terms of the plan.000 of compensation in the form of performance shares.00 $2. the award to the executive will identify the targets for each of the three years comprising the performance period. If the performance period is three years. These targets should be set in conjunction with expected company earnings as determined by the company’s finance department and the finance committee of the board of directors. if the company. if the performance target is exceeded. For example. Typical LTIP Grant Schedule Year 1 Year 2 $2.25 Grant #2 Grant #3 Year 3 $2. these plans typically afford the executive the opportunity to earn more than the awarded number of shares in a given year if the performance target is exceeded. the EPS targets for Grant #2 in years 1 and 2 will not necessarily be the same as the EPS targets of Grant #1 for years 2 and 3 (refer back to previous annual grant schedule illustration). and year 3 of the new grant. performance targets established in the grant are recommended by the company and approved by the board of 139 . and $2. Earned shares are based on a comparison of actual EPS vs. $2.” Also. Below is a grant schedule (Table 1) using fictitious data for the EPS targets and projecting an EPS growth rate of 10% per year. the grant award will identify the target EPS values for year 1. if earnings per share (EPS) is the metric. the executive may receive another LTI grant with new EPS targets for year 1. as with annual bonuses. a grant of 6000 performance shares may have EPS targets of $2. as part of its pay package. However. as can issues involving their use to remedy problems associated with excessive executive compensation. In the grant year.72 $2. year 2. the LTI plan often includes the opportunity to earn a percentage of the shares even if the target is not met since achieving the target involves a level of “risk” if the targets involve “stretch goals. if actual performance reaches 80% of the performance target. The following year.20 in year 2.000 performance shares.20 Grant #1 $2.000 performance shares per year if the performance targets for each of the three years are met. using the example cited above. As with similar annual incentive programs. the executive may earn up to 150% or even 200% of the shares awarded.three-year grants are made annually to executives based on the value of compensation that the company desires to award to the executive. wants to provide an executive with $120. the plan may specify that the executive may earn 50% of the shares awarded. For example.30 in year 3. Table 1. similarly. and if the value of the company’s stock at the time of the grant is $20.47 $2. and year 3 of the grant.00 per share.00 in year 1. First. the concerns associated with LTI plans can be better understood. Thus.

In addition. While the Yang and Holthausen studies cited previously relate to annual incentive awards. except perhaps in the case of extraordinary. so can actual performance outcomes. while examining confidential annual bonus plans. in effect. The onus is on the compensation committee to select the right performance measure and the appropriate performance conditions. and Sloan [15]. are established by company executives in coordination with the compensation committee of the board of directors. This evidence strongly suggests that the performance targets established in LTI plans may be understated and that actual performance may consistently exceed established targets. they discovered that the annual payouts. This can occur for several reasons. the board of directors should insist that performance targets be developed in terms relative to the industry. providing a hedge against future earnings weakness that could adversely affect bonus payouts. restraining earnings in a given year will make it more likely to achieve higher payouts in the following year as these earnings are carried forward. SUGGESTIONS FOR IMPROVING LTIPS It is apparent from the preceding discussion that the key to improved LTI design involving performance-based plans is to ensure accurate setting of performance targets. and that EPS growth targets (annual earnings increases projected in the plan) were lower than historical EPS growth for the firm and its industry. As currently structured. outside directors. they found that EPS targets established by companies were lower than analyst consensus. Thus. For example. were 114% of the established targets. most LTI plans appear to provide motivation for executives to understate performance targets rather than motivate them to improve performance. or even payouts that are just substantially above target. whether EPS or otherwise. they are still heavily influenced by what the company’s CEO and CFO say is feasible in terms of future performance. Larcker. Holthausen. in the table shown above. average performance. The targets in the annual grant are fixed for the entire term of the performance period. executives may not want the board of directors to begin to question the level of performance targets. the executive is likely to receive maximum share awards for what is. In a sample of S&P 500 firms over a three year period. Additionally. if executives are already likely to achieve the maximum payout. performance-based LTI plans are subject to the same earnings issues and concerns. found evidence that executives manipulate annual earnings downward when their bonuses are at the maximum. As it currently stands. That is. on average. LTI performance targets. And this windfall will be cumulative since grant targets for a given year’s performance share award do not change with the award of the next grant. While the compensation committee must be made up of independent. rather than basing award payouts on the attainment of absolute 140 .directors. This concern over the setting of performance targets is reinforced by the results of a recent study by Yang and Kim [28]. Second. While performance targets can be manipulated. Primarily. The establishment of performance targets remains key to the likely success of the LTI plan in equitably rewarding performance. if the EPS targets for years 1 – 3 are set unrealistically low. unforeseen events. it is incumbent upon the board of directors to scrutinize the proposed performance targets to ensure that they appropriately reflect a realistic outlook for the firm’s performance.

However. award ranges at various levels of performance. This approach would require the company to attempt better longrange forecasting and. Conversely. 50% for achieving 80% of target and up to 150% for attaining 120% of target or higher) would be better justified.all the more reason to move toward relative measures. LTI has become. payouts should be based on how much better or worse the company performs than its industry peers. LTI plan designs could simply incorporate a single performance target as of the end of the total performance period (e. in a given grant.. length of performance period).42 for year 3. the plan will not reward executives for simply improving with everyone else in an up market. For example.. This approach would remove the “annual” characteristics of a LTI plan with shares earned each year.g. in relative terms.. and 3 used both. 141 . the purpose of LTI is to improve the company’s performance in the longterm. Alternatively. In a survey of 82 companies. Company boards of directors must demand greater performance accountability in LTI plans to put the risk back into this form of compensation. After all. Another suggestion is for the compensation committee of the board of directors to retain its own outside consultant to advise it in the development of LTI plan parameters (e. a company could establish performance goals that match the median EPS growth for a peer group. the EPS targets for year 2 and year 3 could be increased to better reflect the realities of the company’s performance. This distribution most certainly reflects the fact that executives prefer absolute performance measures over which they have more control -. they must still meet or exceed the performance of their peer group to qualify for share vesting. The annual nature of LTIP vesting leads many executives to view them as a series of annual awards rather than as an incentive to improve longterm performance. Executive payouts could be based on how well this target is attained at the end of the entire performance period. shares can be earned only if the company’s performance exceeds the median of a peer group on the performance measure used in the plan. it is intended to be “at-risk” pay. if the EPS target was stated as $2. The consultants should report to and be paid by the board of directors.targets proposed by the company. a year 3 performance target for a three-year performance period). A number of companies currently rely on recommendations by consultants that work with and are paid by executive management. downward adjustment in targets would be prohibited. but actual performance in year 1 resulted in an EPS of $2. A relative approach also protects executives from unexpected factors that may affect their company and the industry as they can still outperform their peers even in a down market.g. Bickford [3] found that 65 of the companies used absolute measures. to ensure that the LTI plan doesn’t become merely a series of annual incentives and retains its risk-based characteristics. However. Rather. a guaranteed amount of compensation for executives.g. For example. a company could establish performance goals that increase EPS by 10% per year. For example. 14 used relative measures. the payout range for performance above and below target that is typically associated with a LTIP (e. in absolute terms. but is not intended to be.20 for year 2 and $2.45. because a higher level of risk would be associated with a target three years out. That could be more or less than 10% per year. LTI plans could also be designed to incorporate a clause permitting the board of directors to amend or revise the EPS targets in outlying years of a grant based on actual performance during the preceding year.

March/April. 14-29. p. 13 (3). (2009. J. 52 (7). because of the design characteristics of most LTI plans there is no assurance that executive compensation abuses or excesses will be remedied. [5] Bones. Retrieved on March 7. p. reduction or elimination of 401(k) plans. 2010 from: http://www. E. & Sorkin.htm [7] Chapman. The intent of this approach is to make the future value of compensation earned by executives under these plans dependent upon the continued success of the company. one has to wonder if Henry Mintzberg just might be correct: “Scrap the whole thing. A. (2010. After all. Banks resume their payouts.. [9] Choudhury. CONCLUSION Although companies are turning more toward the use of LTI compensation to defray the criticism of annual bonus plans.g. January 25). However. should the executive depart the company prior to retirement. Where executive & employee compensation is headed in the next 12 months. & Appelbaum.. B9.bls. PR Newswire. Bank may make bonuses stock-heavy. 22-25. (2010. December 15). [2] Anonymous. [3] Bickford. [4] Bickford. part 5: Selecting the right program. Long-Term incentives for management. the findings indicated that companies with long-term incentive plans provide returns no better than those from firms without such incentives. 38-46. The system simply can’t be fixed. such action is unlikely as the proposals run counter to executives’ motivation to maximize personal gain. New York. 142 . D. The trust would only pay out at the time of retirement or a set period after leaving the organization (e. USDL-100256. Workspan.. L. can attempt to improve the likelihood of LTI success and reduce public outrage by implementing the suggestions outlined previously in this paper.release/empsit. & Martinuzzi. [8] Cho. p. (1981). They note that selecting the wrong measures of performance and failure to set targets properly are the greatest shortcomings of these plans. Human Resources.nr0. Others have also suggested that stock awarded under performance share plans be put into a trust for the executive [5]. Boards of directors. Compensation and Benefits Review. January 15). Adopting the proposals made in this paper requires ethics and integrity on the part of executives and the board of directors. Most LTI plans share many of the characteristics of annual bonus plans that lead to concern and public outrage.gov/news. Derivatives Week. How to restructure executive pay. (1990). it’s easier to set performance targets that are unrealistically low than it is to actually improve company performance. B. NY.” REFERENCES [1] Anonymous. Corporate compensation strategies driven by past pessimism rather than future optimism: Deloitte Study. or annual merit increases of 2-3%. E. Boston Globe. (2009. three years). C. January 14). The Washington Post. (2010. Anger over big bonuses resurfaces. Employment situation summary. (2009). Action is definitely needed as other company employees struggle with the fear of job loss. L. Long-term incentives for management. In today’s environment. (2010. in concert with company executives. 19. In a study by Rich and Larson [20]. part 6: Performance attainment plans. October). Compensation Review. Germany plots bonus crackdown. [6] Bureau of Labor Statistics.. March 5).Independence is an absolute necessity to ensure that the LTI plan structure and features are comparable with other plans within the industry and are also most appropriate for the company. A17.

A18. Dunnette and L. C. Retrieved on March 16. D. A4. Wall Street Journal (Eastern Edition). Jobs picture.org/publications/entry/20090904_jobs_picture/ [24] Vroom. Tax the windfall banking bonuses. Compensation Review. Economic Policy Institute.. There’s more to long-term incentives than stock options. Toward more rational executive compensation. A2. R. (2009. H.html [20] Rich. December 18). Canadian HR Reporter. December 17). 19 (1). [14] Herb. E. H. & Ng. & Newman. C1. (2009. 2010 from: http://www. [11] Gebhart.. W. March 18). M. 16 (1). 39-55. The Christian Science Monitor. & Larson.com/2010/03/04/89815/no-bonuses-for-wells-fargo-executives. Retrieved on March 16. November 3). G. Pensions for executives on rise – Arcane techniques. [19] Rexrode.. Boston Globe. V. (1992). Financial Times. May). (2009. World news: France plans to tax bankers’ bonuses at 50%. Director’s Monthly. & Kim. Work and motivation. [21] Rollert. [27] Wolf. generous formulas boost payouts as share prices fall. (1964). Employee compensation: Research and practice. (2009. pp. Compensation – No more executive bonuses! The problem isn’t that they are poorly designed. Rochester. p. Wall Street Journal (Eastern Edition). J. E. 9. (2010.mcclatchydc. September 4). Annual bonus schemes and the manipulation of earnings. J. & Rothacker. October 9). Beating the target: A closer look at annual incentive plans. Hough (Eds. T. The New York Times. L. J. & Sloan. [15] Holthausen. December 14). NY: John Wiley and Sons. NY. No bonuses for 7 senior executives at Goldman. Bonuses seen as abuse prone. [23] Shierholz. J.. (2005). [25] White. [28] Yang. p. 2010 from: http://www. Obama slams ‘Fat Cat’ bankers.[10] Gauthier-Villars.. Larcker. 29-75. W. Journal of Accounting and Economics. Goldman Sachs bonuses: more than just bad PR. D. (2006. [16] Milkovich. New York: McGraw-Hill. CA. (2009. In. 15-17.. McClatchy Newsletter. (2009. Wall Street Journal (Eastern Edition).. Volume 3. 2010 from http://www. The problem is that they exist.com/2008/11/17/business/economy/17goldman. 16-19. Compensation. R.). (2010. p. R3. [17] Mintzberg. G. Frank taking aim at Wall Street bonuses: Panel to discuss ways of capping executive bonuses. 143 . (1995). & Milkovich. J. D. B.epi. March 4). & McGinty. M. [13] Heisler. p.html [26] Williamson.. November 20). Consulting Psychologists Press: Palo Alto. (1984). [22] Schultz.nytimes. [18] Moate. (2006. p. No bonuses for Wells Fargo executives – just bigger salaries and stock grants. R. J. (2008. Los Angeles Times. Wall Street Journal (Eastern Edition). November 16). (2009. M. Retrieved on March 7. (2009.. January 22). B1. Why some long-term incentives fail. November 30). B. New York. (2010). p. Handbook of industrial and organizational psychology. [12] Hamilton. p. SSRN Working paper series.

144 . staffing companies in the US placed more than 11 million in job assignments. IT/technical. 2006 & 2008). Contrary to widely held misconceptions. This paper attempts to adopt the staffing agency perspective to better understand the staffing practices that enhance its performance. Australia (Hall. Literature has considered the market mediated labor trend in other countries as well such as Germany (Mitlacher. Now. America’s staffing companies place millions of people in jobs every day.TEMPORARY STAFFING AGENCIES: STATE-OF –THE ART PRACTICES OF PERSONNEL SELECTION Ghardir Ishqaidef School of Business University of Kansas 1300 Sunnyside Ave. UK (Forde & Slater.8 billion in 2000 and $17 billion in year 1990. professional accounting and finance. up from almost 1 million in 1990. up from $63.5 billion in sales from search and permanent placement services in 2007 (ASA. health care. Models explaining the staffing agency-client organization relationship are reviewed.9 million workers. Kansas 66045 Telephone: (484) 686-4777 Fax: (785)864-5328 E-mail: ghadir@ku. Over the course of 2007. executive and management. The intermediary staffing business has grown for decades as work force and businesses alike appreciate flexibility and choice that temporary staffing provides. 2006). temporary staffing companies. Temporary staffing sales totaled $73. Furthermore. the staffing industry generated $17. personnel selection. legal. 2008). 2005. Statistics by the American Staffing Association show that 2007 annual average daily employment for temporary staffing companies exceeded 2. The shift in the staffing paradigm from traditional to strategic and the implications of selection practices are addressed by discussion leading questions: Who is involved? Why has the use of staffing agencies expanded among companies? Why do employees choose to take temporary positions via staffing companies? What makes staffing agencies more successful at what they do? What are staffing agencies’ state-of-the-art selection practices? Keywords: Employee screening. the temporary staffing industry employs workers from occupations including office-clerical. Lawrence. industrial.edu ABSTRACT The expansion of temporary staffing business and its impact on economy warrants a better understanding than the current status of research provides on staffing personnel selection practices. The strong effect of this industry on the economy is not unique to the United States.5 billion in 2007.

g. The key member involved in this relationship is the temporary worker. social security. 2006. I will focus the majority of the paper on the agency’s perspective. Traditionally. Despite the significant economic impact of temporary agency work. 2004) and the Netherlands (Torka & Schyns. Those firms recruit. Mitlacher. client organizations pay the staffing company fees plus markup to cover labor costs. Drucker & Stanworth. train. a fee based on employee annual salary is then due to the staffing firm. Things look differently now for all parties involved. Davis-Blake & Uzzi. 2009). temporary workers used to pay the agency to place them in one of the openings at client sites. select. 2006. Purcell et al. 2001. is one part of this labor intermediary relationship. The staffing paradigm has witnessed a shift from traditional to strategic involvement with client firms. screening. 2002. the staffing company is considered the employer and responsible for required insurance (e. the client companies and candidates who will become temps. Bauer & Truxillo. compensate and manage workers’ performance in client companies (Heneman & Judge. 2004).g. screen. Legally. Although some portion of this paper will describe the current nature of the temporary staffing business. Rarely has this subject been studied from the staffing agency’s perspective (e. For these services. The agency.Stanworth & Drucker. Moorman & Harland. also known as temporary help agency. Cai & Kleiner. Feldman et al. usually. 2004. 2007.g. Qualitative and quantitative literature on this arena has considered the subject from the perspectives of temporary workers (e. selection and placement of talent warrants the need to understand such practices and how they influence performance. 2001. The staffing agency has to cater to two different customers. Business between the agency and client organizations will not be done without the labor performed by employees. we must understand the reasons beneath this relationship. 2000). and client organization (e. does not get any money till the temp is placed on client primes and the latter is satisfied with the service. In order to better understand this “triangular” employment relationship. Torka & Schyns. 2001. 2007). Between attending to sales calls for new business and keeping a sufficient flow of temporary workers in line and ready to fill incoming positions. 1993). The fact that staffing agencies major services offered to client organizations are the search. Houseman. Mitlacher. In an attempt to understand this shift and its implications of selection practices are addressed by discussion-leading questions: Who is involved? Why has the use of staffing agencies’ services expanded among firms? Why do employees choose to take temporary positions via staffing companies? What makes staffing agencies more successful at what they do? What are staffing agencies’ state-of-the-art selection practices? Who is Involved in the Temporary Staffing Process? Staffing firm. 145 . a careful balance of effort within the temporary staffing agency is required.g. If the client decides to hire the temp on permanent basis. This paper attempts to fill the gap in literature on staffing agency practices. There is strong reason to lament the scarcity of theoretical and empirical research on personnel selection methods used by staffing agencies. academic research on this topic is still in the initial stage. workers compensation). 2004. Ward et al.

employers. have altered the traditional view. 1998). so managers can use temporary employees to take over simpler tasks while core workers free up to more important tasks. Since organizations spend a significant amount of time and money on the recruitment and selection steps. Several research papers have been dedicated entirely to address these questions. workplace managers asserted that despite the hourly rate and agency fees they had to pay. I will begin by summarizing the literature addressing the employers’ perspective followed by employees’. employers prefer temporary employment as a way to drive labor costs down. 1997). Whether the interim need is for unique skills or simply massive effort in such projects (Paul & Townsend. temporary worker could fill in if internal labor falls short. In addition to flexibility. they still saved money from avoiding paid vacation and sick leaves had the temporary employees been on their payroll (Ward et al. Companies first started to use the temporary staffing option to fill in for core employees’ sick and vacation leaves. Companies now have positions that are staffed only by temporary workers (Von Hippel et al. One obvious way is the shift of “employer” responsibility to the staffing agency as the latter is responsible for the costs of recruitment and testing. 1999). Some researchers argue that permanent workers might end up with the most socially and cognitively demanding tasks (Connelly & Gallagher. In addition. Some of the core employees in client companies are overworked (Cuyper et al. Employers found haven with staffing agencies as they secured a solution for the internal labor shortage. Temp workers can also assist in special or new projects that companies implement every now and then. 2001). 1993). a 2004 poll conducted by the American Staffing Association shows that 9 out of 10 businesses appreciated the flexibility offered by the staffing agencies.Why has the Use of Staffing Agencies Expanded Among Companies? And Why Do Employees Choose to Take Temporary Positions Via Staffing Companies? Answering these two questions in combination would potentially explain the thriving staffing business and the implications on personnel selection procedures. 2008). Having noticed the strategic potential of temporary work. 2004. Intensity and cost of screening was measured by number of screening methods (Gramm & Schnell. skill 146 . During an interview conducted for research purposes. Another flexibility venue that employers appreciate is the ability to reassign tasks. paying for benefits and administration of payroll. companies would have to pay considerable amount of money on developing and acquiring the best recruitment and testing methods that agencies can provide as part of their service (Byham & Riddle. In particular. The noticeable flexibility became an attractive solution to solve several interlocking issues. 1999). use of flexible staffing arrangements was found to be positively related to intensity and cost of screening core employees. No matter how employers perceive flexibility. with the help from staffing agencies. Doing business with staffing agencies saves the company a lot of time as staffing agencies enjoy economies of scale that allow them to screen and place more candidates faster (Byham & Riddle. 2001) or by a scale of selecting methods including intelligence tests. training. Some companies frequently deal with unsteady business through the year as demand might pick up around particular events or seasons. Davis-Blake & Uzzi. This goal can be achieved in several ways.

there is ample evidence that businesses now use staffing agencies and temporary workers for strategic reasons that allow them to hold on to their core employees and at the same time remain 147 . Other temps might find in temporary work a way to get their foot at the door especially in highly competitive industries or in prestigious companies (Smith & Neuwirth. physical exams. 2001). With the use of temporary work. Temporary workers too have their reasons to actually seeking employment through temporary staffing agencies. Even if some of such facts do exist (e. and learn new skills (Von Hippel et al. to warrant job security for their core employees. 2006) especially if they were unable to get a job on their own due to competitive industry or highly sought after corporations (Smith & Neuwirth. 2008). lack of experience). Others registered with agencies with the hope of finding a permanent position (Hall. Hiring temporary workers with the intention to screen them for future permanent position is welcomed by both temps and managers. They can closely observe workers’ behaviors and assess their value to the organization (Hall. workers are paid to get a realistic perspective of the job and preview the company as a potential employer (Von Hippel et al. even in tough economic times. Both of them get a chance to assess the situation and actual job conditions without long-term commitment (Paul & Townsend.tests. Another reason to use temporary staffing arrangements is to screen temps for potential permanent positions in the organization. lack experience or loyalty to organizations. 2001). This stereotype depicts temps as lazy workers. the typical profile of a temporary worker used to be a mother with children or a student who looked for a few hours a day for work. It is not surprising to assume that candidates approach temporary agencies with a specific choice of company to work for as they might learn from other temp workers who are registered in the agency about the various client companies. 1998). Hedger recommends that managers “think temp to hire” as a way to strengthen the quality of their staff (2008). the focus should be on the intention of temporary workers to eventually land permanent positions. in their survey of one thousand temporary workers. who are not productive. 2003). Interestingly. 2008). and drug tests (Roger Ko. 2006). Employers may increase productivity and simultaneously reduce costs of screening (Houseman. Employers believe this kind of flexibility allows them. Employers did not escape the criticism for using temporary work as they were accused of lacking commitment to their core employees. 1997). 1997) that would make them more marketable and eventually get them full-time permanent positions. First. That kind of demand for flexibility allowed staffing companies to seek more and different talent.g. That is. get trained. employees work as temps because they need to earn business experience. Employers are comforted with the “try out” option and the fact that they do not have to deal with the unpleasant experience of firing those who do not fit (Houseman. Beside flexibility and ability to preview the company without commitment. employers find it reasonable to use temporary staffing arrangements as a buffer of their core employees when they use more extensive selection methods as turnover costs will be higher for companies that use more intensive selection procedures. unable to find jobs or maintain full-time status. Von Hippel and her colleagues (1997) found that respondents worked as temps because of the quality of job assignments and the variety in temporary jobs. The commonly cited reasons for that are as follows. These research findings displaying reasons from both sides refute the stereotypical view of temporary workers that probably still exist today but in a lesser magnitude. employers are sometimes viewed as breakers of the psychological contract. letters of reference. However. At the same token.

Lepak and Snell (1999) suggest that not all jobs are appropriate for outsourcing. and hiring for that partner companies on continuous basis. the staffing company usually provides all of the services previously mentioned in addition to on-site management services to all business units on a permanent basis. (4) partners. At a minimum. administer the selection process and validate the selection system. Purcell. From a human capital and transaction cost economics perspectives. this universalistic view does not make sense to employers anymore as they are moving into partnership with agencies that do hire temps. staffing agencies have found solid grounds to offering more services to client firms which go beyond recruiting. (2) supplier-customer. select testing batteries and other selection methods. they identify two types of jobs that are appropriate for outsourcing to staffing companies: (1) jobs that can be performed by workers with low levels of human capital and do not require training to better understand internal operations and (2) jobs that are performed by workers with high human capital but do not need firm-specific skills to perform satisfactorily. This new model imposes a supply relationship in which the staffing company learns the skill needs for the client company and continuously attracts and the appropriate labor to register (Purcell. The expanding role of staffing companies certainly does not follow the footsteps of this model. Jeffery Pfeffer (1998) would argue that use of temporary work is not the best message to send core employees on job security. and (5) strategic partners. These five levels are: (1) vendor-customer. screening and placing temps. Different models of the agency-client relationship management and strategic partnership have been suggested in the literature. forecasting. 148 . Staffing company at this level has a lot of discretion in the client company’s staffing and recruitment functions. With this said. consulting. In fact. design selection and assessment procedures. & Tailby. exposure to previously suggested models might be helpful. For example. However. In fact. Types of services offered and expected from staffing agencies vary and increase in sophistication as the level increases. Forde and Slater (2006) found firms that have a formal strategic plan covering the staffing requirements were more likely to use agency workers. clients retain full responsibility for staffing and recruiting and staffing companies might conduct or assist in few of the following: analyzing key job requirements. They moved towards strategic partnerships offering on-site management.competitive. companies using innovative work systems were not more or less likely to use flexible staffing options (Forde & Slater. The main criticism to Lepak and Snell’s model is that there are not many jobs that do not require firm-specific skills or training on internal operations. But how are staffing agencies are managing this triangular employment relationship? What makes them fulfill their complex and dynamic role successfully? Before I attempt to answer this question. Byham and Riddle (1999) suggest five different levels of outsourcing relationship between staffing companies and hiring organizations. Models of Staffing Agency – Client Company Relationship Some previous research that was not concerned with developing models of the staffing agencyclient company relationship at least addressed the fact that staffing companies ought to adopt the new paradigm. At a higher level of this relationship. (3) strategic supplier-customer. 2004). 2006).

Their advice is not generic to all organizations as dedication to temporary workers would range based on company’s philosophy towards them: strategic partners. Figure I: Proposed model of testable relationships . The nature of the triangular relationship causes communication issues especially when strategic agency-client relationship does not exist. training and orientation. This is frequently overcome by agency when they do site visits and ask specific questions on clients’ expectations. dissatisfaction. agency recruiters cannot explain the nature of the job (e.Specific skills training .Intensive selection process .Von Hippel and her colleagues advise organizations to establish policies on staffing. Figure 1 proposes a preliminary model of testable relationships. absenteeism. Moreover. However. The in depth understanding of this triangular performance is essential to the advancement of temporary staffing business. better understanding of what constitutes temporary workers’ performance in clients’ companies helps staffing companies become more successful at what they do. Satisfaction 149 . Staffing firms came to realize if they offer cutting edge and creative solutions to emerging labor problems. a win-win-win situation. lower productivity and loyalty. and rewards if they want to attract and motivate temporary workers (1997). career development paths. and guarantee their service. with a stronger agency-client relationship. Temporary workers’ performance influences both the client and the staffing companies. As a result. and possibly early project turnover are expected outcomes of temp-client mismatch. The staffing agency business generally suffers from a criterion problem.Benefits --------------------------------. or avoid if possible. temps would quickly become dissatisfied because they were not informed of what to expect. the client gets to be involved in the selection process while the agency is involved with managing its own employees on the client’s premises. their clients will become more dependent on them and eventually take them as strategic partners. necessary evil. Frustration. Thus. Such issues are resembled in the lack of understanding the culture of the client organization. jobs and assignments to be staffed by the agency.Manage expectations Insert Figure . Criteria on the basis of which employees are being screened are not always clear to the staffing agency. an understanding of how are these interlocking relationships are cycling is important. With this kind of operating environment. What Makes Staffing Agencies More Successful at What they Do? A quick answer to this question is that they strive to understand and acquire strategic long-term relationships with both their client companies and employees.Perception of Agency I about here fairness --------------------------------Repeat business Repeat staffing techniques in case of strategic Partnership Staffing Agency Performance Employee Performance Success in Placement and Matching Client Org. if it is temp-to-hire) and will not be able to manage their workers’ expectations.g.

production. Having this policy forces the agency to tease out the reasons for service failure and quickly remedy and avoid them in the future. Other employees enter the market with the anticipation to earn experience and learn new skills. 1988) because they have implemented 100% customer satisfaction strategy via service guarantee. cooperation. On the other hand. In a study that was concerned with agency compliance with EEO requirements in a staffing agency performance was considered as the criterion. one of the largest players in the staffing industry. They also know their clients watch for financial stability and market share position. With service guarantee. temporary staffing agencies must guarantee their service if they want to build strong relationships with their clients. but such opportunities are not always available. 2000) is another empirical study that looked into temp-to-perm employees’ progression overtime used client organization objective and subjective ratings of performance as proxies for temporary selection success. They want to be perceived as fair and generous in their benefits and training opportunities. In fact additional research in this arena is needed (Connelly & Gallagher. grooming. Smith and Neuwirth (2008) call this “aligning aspirations with opportunities. successful agencies manage their image very carefully. 2004). Furthermore. Moorman Harland (2002) suggest that in this case. Such employees might have more developed career aspirations that might affect their performance on site. Moorman and Harland (2002) suggest that in this case.” I have pointed out previously that one of the reasons individuals register with staffing companies is to locate permanent positions. Successful staffing agencies have developed a deeper understanding of their workers’ needs. they assure their clients that they care about their needs and that they do not have to pay for what does not satisfy them. 150 . (Bauer & Truxillo. In addition to understanding what constitutes performance. pre-employment screening that focuses on employees’ reasons for joining the temporary agency might positively influence organizational citizenship behavior. Manpower. has long adopted this practice. Successful agencies show professional and respectful treatment of their candidates. and attendance (Ryan & Schmit. 1996). They learned to listen to them in order to better manage their expectations and communicate to them the opportunities they have in a realistic manner that would hopefully close up the gap between the agency’s opportunities and the temps’ expectations.There is not much consensus in the research on performance in the staffing context. The scale was based on client supervisor ratings of temporary workers on measures such as accuracy. They did not necessarily pay more for their screening procedures. they manage their image in front of their candidates. they just made them better over time. They care to be perceived as capable with strong practices and market specialization. punctuality. Their skillstesting methods and customer-needs diagnosis cost them less overtime (Hart.

In case they locate good employment opportunity for temps. for example. written and oral communication task proficiency. One of the most critical characteristics of testing and screening procedures in staffing companies is their flexibility to fit in the need of the client companies (Mitlacher. The three present in most jobs are: non-job specific task proficiency. Staffing agencies managers understand the “benefits of scientific analysis. pp. they seek out good talent that accepts the reality of temporary work. Campbell et al (1993) suggest 8 components to job performance. needs. maintaining personal discipline. In addition to being successful with establishing a strong market for their services. A qualitative study of the temporary staffing business in Chicago. Successful staffing agency selection is based on both the ability and the willingness of workers to perform in a temporary environment detecting the candidates with the good temp profile. Manpower. Staffing companies. the power to control outcomes and the industry’s concern with its high quality product” (Smith & Neuwirth. abilities. From an agency’s perspective. staffing agencies could be relying. However. 2006). and behaviors) and by offering service guarantee. Antecedents show that staffing industry practice is based on a systematic approach to eliminating guesswork and client service dissatisfaction. Many organizations use the structured interview as an attempt to understand the temporary worker. 1995). they test them further on work skills. The three present in any job are: Job specific task proficiency. 41: 2008) which can be achieved by testing (technical skills. Three of which are present in any job and three others are present in almost all jobs. work preferences and availability to work (Wiley. at the least. They suggest that intensive preliminary screening gives staffing firms functioning in this segment a competitive edge to cut further screening costs (e. on those criteria for future temp performance prediction. interests. research on this issue is rather scarce. specific knowledge and work-related behaviors. Therefore. drug tests and criminal background checks) and to provide the best quality of daily temporary workers. 151 . personality. aptitude. demonstrating effort. they must strive to have the most valid selection techniques that allow the agency flexibility to tailor testing to fit clients’ needs. and facilitating peer and team performance. Note taking and record keeping are important steps in the interview. want to make sure they know who is motivated and able to perform what so they can insure a highly successful matching rate.g. It selects assignments that are most suited for workers based on their skills. abilities and tasks preferences. Peck and Theodore (1998) state that structured interviews and techniques of employee of assessments are more common in the highly unstable daily-based temporary staffing. in the condition of lack of knowledge on nature of position. The fact that staffing agencies have to continuously screen candidates for temporary and temp-to-hire positions even though they do not have vacant positions at the time of assessment makes it harder on them to determine prematurely the types of questions they ought to interview their candidates for. successful like Manpower. uses a job-related testing approach. some agencies review the interview notes.What are Staffing Agencies’ State-of-the-Art Selection Practices? As mentioned before. their skills. After they select their employees. generic questions that can be applied to a wide array of settings cannot be difficult. and call back the temp for another interview during which they ask more specific questions targeting that particular position and client organization.

Furthermore. 1992). Lancaster and her colleagues found that job applicants at an employment agency who had similar cognitive ability and vocational interests chose similar jobs. The survey interestingly points out that 840 consultancies base their choice of selection methods is restrained by expectations of clients who in turn prefer predictors of low validity (e. Structured and behavioral interviews.g. they were not able to show that applicants with similar personality characteristics chose similar jobs (Lancaster et al. However. They test such requirements by general cognitive ability batteries. research supports that employees who are sensation seekers and show a higher degree of occupational self-efficacy will be more satisfied with agency work (Torka & Schyns. some agencies rely on basic requirements. Another research studied the personality and cognitive differences between the employed and unemployed staffing company workers and found that the sensing-perceiving type of personality was associated with lack of employment for some temps. 1999). Below I attempt to review some relevant yet perplexing research. astrology and graphology). and vocabulary and were supposed to predict job performance. Unfortunately. reference checks and more special skill testing would follow. This kind of research is still in its infancy. contradicts this general belief of the staffing market practice. They are able to better their understanding through systematic techniques of employee ability and trait assessment. research is behind in understanding current practice and its role in explaining staffing agency success. Staffing companies partnering with clients with such profile must upgrade their skill search and screening techniques. In a less glamorous picture of staffing testing practice. They reported that the agency used three short ability tests in their screening for all jobs. In a study attempting to measure Equal Employment Opportunity statistics in a temporary staffing agency located in the Midwest. Those tests were measuring math skills. personality and vocational interest batteries in addition to initial telephone interviews help agencies build an initial picture of workers’ interests. 1996). that I am aware of. 2007).Staffing agencies use various tests and inventories to become more familiar with the “good temp” profile. Unstructured interview and references were widely used by recruitment consultancies while less than 45 percent of them used psychological tests. It also found that a mixed or no clear thinking style was more prevalent among the unemployed temps (40. An alarming finding shows that over 70 percent of those executive consultancies never used cognitive ability tests and over 64 percent never used personality tests.3 percent) compared to employed temps (23. What worked for agencies a few years ago did certainly change in today’s 152 . 2006). the expectations of accuracy and efficiency go way up (Byham & Riddle. 1994). This finding is not generalizeable as the use of graphology and astrology is much less prevalent in the US. When recruiting and selection practices are considered strategic and competitive tools of a client organization.6 percent) (McTurk & Shakespeare-Finch. Cognitive ability. researchers considered the employment tests as predictors of performance (Ryan & Schmit. Evidence from the only survey-based research. proofreading. The survey which addresses predictors of performance shows that executive recruitment consultancies in the UK employ selection methods with low validity and higher reliance on subjective judgment (Clark.

Adecco uses Xpert assessment and training system that evaluates candidates on proven skills. inventory. 10-key. work style. and placement methods implemented by temporary staffing firms. spelling. assembly. payroll. References available on request. industrial skills. etc. dishonest. 153 . Future research should systematically assess current recruiting.). electronics. In addition. through behavioral assessments. In Express. workplace safety. office services workers are assessed on ability to perform basic computer skills (Word. personality and requirements of the business in need. and experience. can evaluate an applicant's likelihood of success in a particular position and find out if it is something they will enjoy doing. They also offer applicants to complete integrity testing to determine the probability of violent. selection. Express brags its hands-on and computerized test system which includes analyses of manual dexterity. understanding the effectiveness of employment agency-client firm relationship can be an interesting venue for future research. Furthermore. For example. Snelling evaluates candidates based on the clients’ unique culture. fraudulent or unreliable behavior to avoid placing applicants with those tendencies.practice. Express. general maintenance. and basic office skills. warehouse. sales. industrial math. motivation and attitude. Excel. and manufacturing skills. light manufacturing and many others. ensuring the right fit both clients and employees in areas such as clerical. math.

For-profit and non-profit institutions have risen drastically in number. and have moved rapidly into territories that traditionally were occupied by local colleges and universities. and purpose in light of these challenges. FL 33161-6695 mjenkins@mail. Many institutions struggle with their identity. as well as the leadership traits and characteristics that contribute to the success of that UPC. Culture INTRODUCTION Leaders of today’s educational institutions are facing intense challenges worldwide. Managing a UPC has proven to be challenging due to the complexity and diversity of organizational cultures. mission. and better prepare graduates for the changing workplace. create innovative programs and learning options that satisfy the students’ needs. LEADERSHIP IN EDUCATION 154 . Technology has ushered in a new modern type of learning institution which has no geographic boundaries.barry. Key Words: Leadership. Partnering with other academic institutions is one strategy to meet students’ needs and survive the market competition. These factors have propelled educational institutions to actively seek strategies that enable them to reach more students. while facing competition from many educational institutions. and (b) leadership qualities that contribute to the positive culture in the UPC. Partnership. TX 77843 jiawang@tamu. This case study explored leadership and organizational culture with a specific focus on two lines of inquiry: (a) the practice of leaders in creating a shared culture in the UPC. This paper examines one shared university partnership center (UPC).edu Phone: 979-862-7808 ABSTRACT Leaders of educational organizations are being challenged to offer more diverse programs and better respond to their community. One strategy to meet these challenges was to develop a university partnership center (UPC).MODERN WORKFORCE CHALLENGES: LEADERSHIP AND PARTNERSHIP IN EDUCATION Marilyn Ohlsen Jenkins Barry University 11300 NE Second Avenue Miami Shores. What was once Leaders also face a global demand for a high quality workforce. Ext 16 Jia Wang Texas A&M University College Station.edu Phone: 239-278-3041.

Obviously. they seek alternative solutions for growth and expansion of curriculum. laissez-fare leadership. display high moral and ethical standards. McLaurin and Al Amri (2008) suggest that charismatic and transformational leadership styles have evolved from a change-oriented perspective of leadership. they need to be put in a specific context for consideration. where leaders allow the organization to essentially run itself.g. 2007). 2000). be active in the community. These ever-changing educational environments have not only made organization management more complex. PARTNERSHIP IN EDUCATION As educational leaders become increasingly concerned with competition. Al-Alawi (2007) describes organizational culture as knowledge sharing (critical for an organization’s success). Lewis et al. communication. Leaders are the conduit for communicating and clarifying shared organizational meaning and vision in educational institutions (Bennis. Mann 1959.Most educational leaders now operate in performance-driven cultures. & Alliger 1986. however. motivational and intellectual stimulation to the organization. sociability (e. 1993). expand enrollment. information systems. collaborate. One means to accomplishing this growth is through partnerships (Idsvoog. (2006) explores the use of Appreciative Inquiry in effective leadership where it was noted that effective leaders facilitate. 1993). 1974) continue to be important. people. and delegating. rewards and organization structure. does not attempt to help organizations grow. participating. DeVader. this approach focuses on the influence of trait on leadership. The leaders of educational institutions today must manage their workforce. and participate in the organization. manage budgets. please the board of trustees. and deal with increasing competition. facilitate student interaction. Stogdill 1948. Northouse (2007) presents a trait approach to leadership. ensure new curriculum is developed. coaching. p. Academia has had to transition to a more corporate entity while facing increasing challenges and threats (Yorke. 1991. determination. Schein (1992) considers leadership and organizational culture as “two sides of the same coin with a constant interplay between these two constructs” (Bass & Avolio 1993. According to Ensby (2005). First developed as “great man” theories aimed at identifying the innate qualities that differentiate leaders from followers. Northouse 2007. deal with legal issues. In contrast. 115). fundraise.. leadership. reward system. directing. While personal factors related to leadership. Lord. What characterizes an effective leader that can handle these diverse responsibilities? Some institutions seek self-confident transformational leaders who bring charisma. process. leadership for there is constant interplay between culture and leadership (Bass et al. many factors contribute to creating culture. such as intelligence. maintain and expand the physical campus. this study focuses on one factor. while others seek transactional leadership where there is a bargaining exchange process between leaders and followers (Bass & Avoli. There is a long history of educational institutions 155 . which is created through trust. but also prompted the need for leaders with more qualifications. and organizational structure. self-confidence. resolve problems. 2000). there are four general styles of leadership namely. ensure accreditation. maintain political relationships. Kirkpatrick & Locke. integrity. Gupta (2000) proposes six major categories of organizational culture: information systems.

and (2) what leadership qualities contribute to the development of a collaborative culture in the UPC? The leadership theory that guided this study is the social exchange theory. LEADERSHIP OF UNIVERSITY PARTNERSHIP CENTERS Leadership of UPCs varies by person. 2007). 23). may now remain in their own communities. Leaders of UPC’s must have the ability to create a collaborative and cohesive organizational culture. which had little access to diversified growth in sectors associated with professional programs and technology. The rewards and benefits in a UPC might include exclusive use of preferred classrooms or assigning larger or additional office space. METHOD A qualitative case study approach was adopted for this study. the partners work within the rules and norms of the host college (reducing their autonomy) and accept the authority of the leader of the partnership in exchange for rewards and benefits that the leader might bring to them. who might have left their home community for particular degree programs. This type of partnership is a strategic choice to enhance communities where there is little access to specific programs in higher education. however the partners were willing to abide by the UPC’s policies and procedures in exchange for a positive relationship with the UPC director and staff. Managing a UPC is a challenging task due to the complexity and diversity of the partners. Communities. responsibilities. this is critical to a UPC’s success. complimentary advertising. social exchange theory is best suited for academic organizations. It posits that “there is a reciprocal relationship whereby leaders provide needed services to a group in exchange for the group’s approval and compliance with leader’s demands… the group agrees to collectively reduce its own autonomy and to accept the authority of the leader in exchange for the rewards and benefits the leader can bring to them” (Birnbaum. It is an “inquiry that investigates a contemporary 156 . are able to tap these resources through UPCs. title. xi).partnering with local businesses and high schools to expand enrollment bases and offer internships for students. According to Birnbaum (1988). p. A relatively new partnership model is the establishment of a UPC where a variety of different education institutions are invited by one college to conduct their business side-by-side under one roof in one community. or personal invitations to join external or internal college groups. THEORETICAL FRAMEWORK This study explores leadership in one UPC located in southern US with two specific foci: (1) what did UPC leaders do to help build a collaborative culture in the UPC. coming to understand its activity within important circumstances” (Stake. Partners from public institutions may have very different beliefs and ideas about organizational goals and standards of behavior to achieve these goals (Risher. Students. A case study is “the study of the particularity and complexity of a single case. Partners from private institutions may be more bottom-line focused because they are tuition driven (Risher. In the case studied. 2007). 1988. and qualifications. In a UPC. the Director of the UPC had no direct control of the employees of partner colleges and universities. p. 1996.

• We have many welcoming rituals. Interview data was transcribed verbatim by the first author and sent to the participants to check for accuracy. The credibility issue was addressed using multiple sources for data collection and checking with the participants for verification. This center was purposely chosen because this UPC was known for its success as a viable growing partnership center. Leadership Practices in the UPC When participants were asked to describe the culture of the UPC and to explain what they thought created this culture. p. Each interview was tape recorded and lasted approximately one hour and was conducted with an interview guide consisting of seven pre-developed open-ended questions. and it may reveal information about a phenomenon that might not be revealed otherwise (Merriman1988). Findings were organized and reported around the two research questions. semistructured interview was conducted with 13 employee participants who represented three distinct groups within the UPC: one group worked for the community college at the partnership center location. Second. First. Table I summarizes findings in these respects. and review of organizational archival data. they emphasized that the welcoming culture was created by the leadership. An open-ended. including individual face-to-face interviews. two issues became apparent. they unanimously described the UPC culture in a very positive manner. Open coding was used to identify major themes. • Logistics are important • The leadership & culture stress values. The case study method was selected because it is unique. All the participants were fully informed of the purpose of the study and their right as study participants prior to the actual interviewing. The entire data was sorted and segmented prior to analysis. The case selected for this study was a UPC located in southern United States. Table I Leadership and Culture in the UPC Theme Supporting Evidence The organizational culture was created by the • Respect and loyalty is important here. but were not associated with the management of the university center. 13). 2003. FINDINGS The following major themes were elicited from our data analysis. participant observations. Data was collected from multiple resources. the unit of analysis included two levels—the UPC as a whole and the 13 interviewees. They are organized around two research questions: leadership practices and leadership qualities.phenomenon within its real-life context. especially when the boundaries between phenomenon and context are not clearly evident” (Yin. 157 . leadership • The leadership & culture is wholesome. another group worked for the partner colleges and universities that have face-to-face classes (not on-line). the final group worked for the community college and were associated with the management of the university center. The constant comparative analytical method was employed to analyze each data set and across different sets. In this case. bounded.

The frequency of these comments is noted in Table II below. knowledge. intellectual stimulation. flexibility. In addition. In describing the center director specifically. an organizational culture is composed of employees who internalize their commitment to the actions and choices made by the organization. Supporting the theme that organizational culture was created by the leadership were statements such as the leadership and culture is “wholesome. and was good at building relationships. Leaders with transformational factors such as charisma. The leadership & culture makes me appreciate my job. and individual consideration typically had employees who indicated high levels of job satisfaction and organizational commitment (Emery 2007). and integrity were highlighted by most of the participants as the top five traits that led to this success. being caring and visionary. The leadership & culture is inviting. all validated the actions and choices of the leaders in some manner.” “stress values.”Of the 13 participants in this study. interpersonal skills. including problem solving skills.• • • • • • The leadership & culture stress collaboration and cohesion. The leadership & culture is friendly. Emery (2007) suggests that the effects of transactional and transformational leadership styles have a correlation to organizational commitment and job satisfaction. • Flexibility Frequency of Occurrence 11/13 9/13 8/13 158 .” “makes me appreciate my job. the fact that the leaders in the UPC encouraged cooperation and collaboration reflects a partnership leadership style (Evink.’s (2000) argument that in an ideal setting. They indicated that positive communication (both informal and formal) and the ability to communicate regularly with their leaders were crucial for them to do their jobs. Among these. Leadership and conflict. enthusiasm. Branson (2007) argues that people want leaders with moral codes. Six other elements were identified by half of the interviewees as equally important. 2000). Communication was noted by almost all the participants as a critical factor for successful leadership in the UPC. Table II Key Leadership Qualities in the UPC Theme Top Qualities Leadership qualities • Communication contribute to the positive • Interpersonal skills culture in the UPC.” and “stress collaboration and cohesion. This is consistent with French et al.” “is friendly. being open minded. participants perceived him as a good problem solver who made thoughtful decisions. communication. Diversity is important. Key Qualities for Leadership of the UPC The 13 participants identified 29 different key leadership qualities when asked about what leadership qualities might have contributed to the successful organizational culture of the UPC.” “is inviting.

This finding is consistent with other studies of leadership traits and characteristics (e. One participant indicated: “(The leader) is very protective of the UPC and flexible with all of us. but innovators. and qualities of a successful leader) provides valuable insights. It is particularly significant for educational leaders and institutions that might be entering into a partnership relationship. If he was rigid.. Northouse 2007. Kirkpatrick & Locke 1991. Armandi (2003) argues that leaders create a vision of an emotional image that is inspirational and value centered. The finding that leadership can create a positive. Continued research on similar partnerships is necessary to provide reliability of the findings of this study.. styles. values. friendly and ethical) was primarily the direct result of effective leadership. Findings from the constant comparative analysis of the 13 participants as well as well as observation and archival data revealed that the cooperative and cohesive culture of the partnership center (in terms such as positive. Lord et al. this study is a necessary and timely effort. which was not identified by the participants as an important attribute.• • • • • • • • Knowledge Integrity & Honesty Problem solving Open mindedness Enthusiasm Community orientation Caring Vision 8/13 7/13 6/13 6/13 6/13 6/13 6/13 6/13 In addition to good communication.” Noticeably absent was the importance of the leader’s experience. IMPLICATIONS AND NEED FOR FURTHER RESEARCH This study contributes to education and leadership by examining the important connection between leadership and partnership. Specifically. 1986. Mann 1959. Bennis (2000) tell us that people who are able to change the focus of an organization are not just leaders.g. Findings of this study also illuminated several innovative leadership qualities that were significant to the success of the partnership. the patterns. even though we are like lottery balls—all different. and cohesive organizational culture through good communication and inclusiveness is consistent with the current literature (Bennis 2000). 159 . responsibility. caring. Stogdil 1948. this study examined the notions of leadership and culture in a successful university partnership center. Since educational partnerships are an emerging phenomenon on which little research has been done. purpose and respect are all shared by the employees in the partnership. 1974).e. DISCUSSION Within the context of higher education. the qualitative information on leadership practice as revealed by this study (i. The UPC leadership under study could be understood from the visionary leadership perspective where power. it would never work…we are all loyal to him. the participants highlighted other qualities such as flexibility.

63-66. Organizational culture and knowledge sharing: critical success factors. [4] Bass. (2000). Journal of Educational Administration 45(4). (2000). such as quantitative methods to examine a larger sample pool. The Academy of Management Executive 14(2). managing effective change. (2007). & Avolio. DeVader. CA: Jossey-Bass. (2007). Al-Marzooqi. B. this study focused on one case of success. (2000). Cambridge. Management Decision 41(10). Improving leadership by nurturing moral consciousness through structured self-reflection. Organization Development Journal 24(1). R. Journal of Applied Psychology 71. MA: Irwin McGraw-Hill. Leadership: Do traits matter? The Executive 5. Boston. we are likely to learn from the cases of failures. [7] Branson.. L. 471-495. 22-39. R. & Aronson. (2003). American Society for Quality ASQ World Conference on Quality and Improvement 59. R. Y. Transformational leadership and organizational culture. (1993).. [2] Armandi. [11] French. MA. Organization development and transformation. K. B. [13] Kirkpatrick. [8] Emery. [14] Idsvoog. (1986). S. (1999). Oppedisano. Managing the Dream: Reflections on Leadership and Change. 128-131. REFERENCES [1] Al-Alawi. B. D. Re-examining the components of transformational and transactional leadership using the multifactor leadership questionnaire. J..441-463. [12] Gupta. C. [3] Avolio. J. 341-347. G. C. 87-100. [10] Evink. & Mohammed. E. A meta-analysis of the relation between personality traits and leadership perceptions: An application of validity generalization procedures.. Ilyer. 48-60. B. S. J. p. Malone. Y. [15] Lewis.. San Francisco. [16] Lord. Journal of Occupational & Organizational Psychology 72(4). (2005).. There is a need for studies using different methods. How colleges work. Public Administration Quarterly 17(1). (1991). Perseus Publications. Bell. Murphy. A longitudinal approach could also be used to trace the developmental process of specific UPCs or other types of partnerships. & Bass. 160 . & Alliger. (2000)... [9] Ensby. Nieman Reports 61(3). C. (1988). W. A. Industrial & Data Systems 100(1). & Sherman. 17-21. The effect of transactional and transformational leadership styles on the organizational commitment and job satisfaction of customer contact personnel. K.. Appreciative leadership: defining effective leadership models. Last but not the least. While we can learn much from the success stories. qualitative case study. [5] Bennis.112-122. Communication. Journal of Knowledge Management 11(2). Leadership theory and practice: A “case” in point.Methodologically. Knowledge management practices and challenges. this study presented one approach. [6] Birnbaum. M. B. Quality leadership situational style. & Zawacki. 1076-1080. (2006). Other qualitative approaches such as ethnography and phenomenology will also be useful in generate deeper insights into the culture of a UPC and lived experiences of members within this partnership could look more closely at the individual experience with partnership. (2007). and Conflict 11(1). W. Journal of Organizational Culture. et al. M. H. C. Leadership & spirit: breathing new vitality and energy into individuals and organizations. & Barker. Adapt or die of irrelevance. J. 402-410. it is worth studying partnerships that have failed to create a shared vision and culture. Medland. B. 77-95. & Locke.. (2007). In that sense.

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this generation has a population of 77. Key Words: succession.kim@gmail. Succession planning is important for every organization. This paper will examine succession planning in the public sector. Baby Boomers are the largest generation in the history of the United States.1% of all Baby Boomers were employed. This generation is perceived to be the result of increased birth rates between the years 1946 to 1964. Leaders will be the most difficult vacancies to replace. compared to 71% employed age 18-41 and 21.980.. Florida 33609 dr. The federal government has created an extensive guide for succession planning.barry. the equivalent of one fourth of the U. Barry University 11300 NE Second Avenue Miami Shores. population. challenges.SUCCESSIION PLANNING: A MODERN WORKFORCE CHALLENGE IN PUBLIC ADMINISTRATION Marilyn Ohlsen Jenkins. This includes front line workers.6% employed age 61and older.S.S. an employer who has the potential to lose much of its workforce due to retirements of the Baby Boomer generation. It is well known that the Baby Boomer generation is preparing for retirement. The federal government is the largest single employer in the United States.S. 74. public managers and leaders. population. public and private.com 786-246-6932 ABSTRACT This paper looks at the definition. Census (2006). FL 33161-6695 mjenkins@mail. In 2006. and benefits of succession planning in government. Succession planning has come to the forefront of many government agendas because of rapidly changing demographics of talent in the work force. In 2030 it is 162 . Linking and aligning succession management and other human resource strategies with organizational mission and goals is critical to the success of succession management programs.kirsten. making them the largest segment in the employed U. Ext 16 Kirsten Kim Loutzenhiser Troy University 5201 West Kennedy Blvd. therefore special emphasis should be placed on developing and attracting leaders whose values and goals mirror the public organization. According to the U.edu Phone: 239-278-3041. government INTRODUCTION All organizations must understand that to ensure their future vitality and meet their strategic mission and goals. they must have prepared adequate succession planning. Suite 110 Tampa. however the success of these plans both depends on the ability of personnel and an appropriate budget.296. planning. The competency of a public organization depends on the diversity of talent at all levels.

000 respondents found that one in every three federal employees was considering leaving their job. although there is an underlying theme of recruitment and selection. determining future workforce needs. 2008). retain and develop intellectual capital and knowledge for the future. it’s more often associated with the “private sector” (Schall. The International Public Management Association for HR (2010) defines workforce planning as strategic alignment of an organization’s human capital with a focus on business that includes a methodical process of analyzing the current workforce. 53% of federal civil servants and 71% of federal senior executives were eligible to retire.” Crumpacker (2007) portrays succession planning as the way an organization identifies and strategically develops a methodology to reduce or eliminate gaps in human capital that take into account skills and leadership. there will be a loss of over 20. There has been a lack of attention on public sector transitions of Baby Boomers retiring until recently (Schall. and develop leadership to enhance performance. According to Helton & Jackson (2007) succession planning (or workforce planning) is usually considered to be a broad plan that impacts an organization’s entire workforce. not only for the organization’s future leadership plan.000. 2000). and encourage individual advancement. goals and objectives. DEFINING SUCCESSION PLANNING The terminology “succession planning” is not commonly used by public administrators. Today’s public agencies and organizations must prepare. Census Bureau. Baby Boomers that retire leave behind vacancies without available workers with experience and skills to fill their jobs.S. Kim (2003) identifies succession planning as an ongoing process to identify. Without targeted planning there will be no way to maintain a viable pool of civil servants or ensure that organizational knowledge is maintained through transitions of talent. Reester (2006) claims that more than 46 percent of existing state and local governments are comprised of Baby Boomers age 45 and older. skills and abilities are identified that are necessary to a job. Along these aging demographics.estimated that when the Baby Boomers retire. assess. The Baby Boomers represent the most highly educated segment of the U. Succession planning is defined by Rothwell (2005) as the way to “identify and ensure leadership continuity in key positions. Anderson (2008) defines succession planning as a future-oriented procedure where knowledge. then a plan is developed to prepare 163 . and multi-task to ensure smooth transitions between retiring and hiring. 1997). plan. a 2002 survey to 100. population (U. bringing a new challenge for organizations to hire educated employees for the future workforce. According to Liebowitz (2004). Schall (1997) argues that succession planning and change management must be on the agendas of all public organizations. Succession planning has many definitions.S. 1997). Some have called succession planning in government two dirty words when it clashes with merit system principles and traditional hiring practices of filling one position at a time after it becomes vacant (Green. fewer persons are in the talent pipeline and less people are going into government service.000 working people. but for the public good. identifying the gap between the present and future and implementing solutions so the organization can accomplish its mission. In 2004.

and management of human capital programs. 4121) mandating that the head of each federal agency shall establish a comprehensive management succession program to provide training to employees to develop managers. 90 percent of our nation’s federal managers run some of the largest public programs (Bilms. measurement.9 million persons and represents the largest single employer in the United States. Congress established (5 U. The OPM provides a very detailed step-by-step guide to succession planning. The strategic alignment system is led by the upper level management team to ensure the initiative is aligned with the “the agency mission.S. The HCAAF. planning. OPM reports that there will be “large deficits in leadership” in the 21st century. Herra (2002) portrays succession planning as the “who” and the “how” in staffing. Leadership and Knowledge Management 3. Accountability Planning and Goal Setting Implementation Implementation Implementation Evaluating Results Defining and understanding each of the five human capital systems of the SLSM Model is crucial to implementation. “OPM recognizes the need for a strategic succession planning system for strengthening current and future organizational leadership capacity rather than just replacing individuals” (U. who takes the place of an employee after the position becomes vacant. 2009). objectives through analysis. Congress has recognized that there is a succession planning crisis in the United States. the Federal Workplace Flexibility Act of 2004 requires all federal agency leaders to establish a succession program to develop future leaders in consultation with the OPM. in conjunction with the OPM. developed the following five human capital systems as the core of the SLSM Model: 1.multiple individuals to perform those jobs. To that effect they mandated the creation of a succession planning model for federal agencies. Results-Oriented Performance Culture 4. 2009). The Chief Human Capital Officers (CHCO) Act of 2002 sets up expectations for human capital management in government.S. Many of these employees hold management positions in government. Talent Management 5. In response to Congress. and how the position is filled after the employee is gone. and they designed this model to “build leadership capacity and shape Federal agency leadership. Office of Personnel Management. SUCCESSION PLANNING IN THE FEDERAL GOVERNMENT The federal government employs more than 1. Strategic Alignment 2.C.” Some of this language carries many similarities with strategic planning literature which offers a 164 . the United States Office of Personnel Management (OPM) created a comprehensive 165 page document titled A Guide to the Strategic Leadership Succession Management Model (2009). Furthermore. goals.” OPM developed the Strategic Leadership Succession Management Model (SLSM Model) in conjunction with the Human Capital Assessment and Accountability Framework (HCAAF) for federal employees. More than half of these employees are scheduled to retire in the next 20 years. and in accordance with all of these federal laws and mandates. investment.

3) develop succession management plan (analyze current policies. Key to the success of this system is change management. and 5) evaluate succession strategies by analyzing results and recommending improvements. The OPM (2009) established five phases of implementation for the SLSM Model: 1) establish strategic alignment (analyze requirements. develop evaluation and accountability plan). practices. This involves a continuous scanning of the external environment and the major forces that influence the organization. accountability gaps and talent needs. also known as a SWOT analysis with emphasis on culture. To accomplish step three. The Results-Oriented Performance Center system enables performance management and awards systems and programs to be enacted and maintained. Step five: Implement the strategic plan. Strategic Succession Planning Process Many types of strategic succession planning instruments and processes are available in the private sector that could be modified to accommodate public agencies. it is possible to make succession planning an urgent priority. alliance partners) and how they interact. opportunities. core employees. integrity and inspiring employee commitment. threats. supporting labor. STRATEGIC SUCCESSION PLANNING PROCESS Linking and aligning succession management and other strategies with organizational mission and goals is critical to the success of any succession program. identify strategies. governments must know the composition of their workforce (strategic knowledge workers. By addressing benchmark strength. particularly in mission-critical occupations” and ensures recruitment for these positions. This is the time when the new strategic plan is put into place. assessment. opinions and judgments). Step 4: Forecast into the future for organizational threats. Human capital readiness will be determined by applying this internal analysis to the key processes of the organization. This forecast must include corporate strategy. strategies are evaluated and the 165 . The Accountability system is the monitoring. Strategic succession planning includes a defined process and an understanding of the benefits and barriers. weaknesses and strengths. develop implementation plan. Forecasting the demand for future employees can be accomplished quantitatively (through statistical analysis) and qualitatively (through interviews. capabilities and composition. strengths and weaknesses. The Talent Management system identifies “competency gaps. Succession planning is not strategic unless it includes a systematic way to comply with merit systems and representative bureaucracies. and business strategy. continuous learning.streamlined succession planning that does more than seeking continuity from one leader to the next. strategic vision and core values of an organization. During this step. programs. or through a combination of both methods. and evaluation arm of the HCAAF. 4) implement succession plan (and accompanying strategies for recruitment. develop business plan). 2) identify succession targets & analyze talent pool. Step 3: Develop the strategic succession plan through an internal analysis of environmental opportunities. Step 2: Conduct an external analysis of the environment. We will examine one model presented by Bohlander & Snell (2010) who purport succession planning as a strategic planning process with six distinct steps: Step 1: Understand the mission. selection. and knowledge management. development and retention including collection of metrics data). strategic alliances.

and management skills necessary to meet future demands and expectations. Roddy (2004) adds that mentoring and coaching are a key component in succession planning. age. a continual process that ensures a strategic focus on succession planning. (b) allow leaders to identify and tap key people who are available to fill critical work functions. Assessment activities must be continual to meet the needs of the agency in the future. These barriers exist in a context of a political environment that has constant shifts and changes. Barriers To Succession Planning Succession planning may face many barriers in public agencies. constant communication. (c) provide avenues for present and future succession planning and discussions about how to develop talent. gender. they (a) enable organizations to assess its talent needs by establishing competency models. (d) define career pathways for employees to increase the breadth and depth of their organizational knowledge. The detailed OPM succession plan. problem solving. Another benefit of succession planning is the ability of organizations to hire strategically to develop a diverse workforce. Plans must evaluate technical skills. time management. To ensure the ability of the agency to meet the public need. Diverse employees will also bring new ideas to the organization and new ways to solve problems. Roddy (2004) indicates that succession planning is a critical component of human capital management that must take a strategic look at the organization 10 years into the future. In addition there is the notion that the scope of a leader does not mean providing for a smooth transition. ability to develop business proposals) and soft skills (administration. Adjustments to current employees working conditions and terms of employment may be deployed in this step.organizational capability to change and be flexible will be evident. First there may be a reluctance of leaders to take on succession tasks. There is also a lack of understanding on how to frame succession. Management skills involve hard skills (budgeting. (e) provide for a higher return on investment from employees and (f) lead to the appropriate promotion of people to meet organizational goals. Diversity in culture. finance and reporting requirements). many of these barriers can be overcome by addressing organizational change and organizational culture simultaneously. and ethnic heritage enhances a public organization’s ability to serve their diverse community. Benefits to Strategic Succession Planning Helton & Jackson (2007) present the following benefits of succession planning. leadership skills. diversity. not just to build leadership capacity but to strengthen organizational loyalty which will enhance the transfer of knowledge. and alignment with the strategic plan of each department. is not likely to succeed without commitment by the leadership. Another problem is that the OPM mandate for federal agencies to 166 . Step 6: Evaluation and assessment. and any succession plan. talent pools should be developed with a strategic emphasis on diversity. The OPM plan is very detailed will require motivated leaders to shepherd the plan through an organization. According to the literature. Should it be strategic positioning or replacing leaders? There is also a lack of information on how to do strategic succession planning.

p. Organizations may want to consider offering retirees partial benefits. and if there are potential employees in the external environment whose values and goals would match the organization. We propose that all public organizations take an immediate in depth look at their employee demographics and determine employees who will be eligible to retire over the upcoming decade. along with an accurate budget and timeline using one or more of the existing succession planning instruments developed for private or public organizations. 2008) “implementing a succession plan is one of the key strategies for organizations to reduce turnover costs. the cost of hiring someone for a wrong for a senior management position is $100. it is difficult to sell the importance and timeliness of succession planning in the public sector.do succession planning does not offer a budgetary incentive to commit each agency is set with the task of budgeting for their succession planning. more time off. Organizations will want to develop mentoring. According to Green (2004) several generational characteristics of younger employees must be considered when creating succession plans: (1) younger employees hired today have shorter career cycles. This means that there is likely to be a huge variation in budgets depending on the level of commitment. coaching. Organizations must also consider the generational trends of the younger employees that will eventually become future leaders. Ongoing budgeting for succession management must not be an oversight.000. According to Bohlander (2010. If there is a shortage of candidates with potential. According to the Society for Human Resource Management (Logan.” PROPOSAL Significant to succession planning is the projected demographics of future workforces. (3) employees want to continually learn in the workplace.000. Organizations must also take a close look at the younger employees in their existing workforce and determine which younger employees might be candidates for future promotion. Succession plans must become an integral part of government budgets. (2) younger employees not only accept but demand technology. and ensure for smooth transition. Friendly individual conversations with these employees might establish a more accurate timeline of when they intend to retire. and education programs to fast track all individuals who have been identified as potential candidates for promotion. they typically will not stay in same job in 20 years. or determine if they might be willing to remain in a full time or part time status after retirement age. training. and (4) there is renewed focus on lifestyle as a condition of employment. the budget crisis provides additional reasons to do succession planning. similar to the federal government’s OPM model. The true costs of replacing retirees will need to be established. Without specific federal dollars budgeted. 254) “the cost of hiring someone wrong for an intermediate position is approximately $20. These generational characteristics bring the realization that organizations will have to continually develop and enhance the workplace with specific strategies and benefits to attract and retain 167 . Conversely. and flexible work schedules to retain older employees past their retirement threshold. Strategic succession plans must be developed to determine if there are employees in the pipeline to promote.” Every hiring decision must be a strategic hire that aligns with the succession plan. Many agencies may have to become more flexible to encourage these employees to remain. the organization should focus on hiring.

There is little empirical research on succession planning in the public sector (Boyne and Dahya 2002). The Boston Globe. [3] Bohlander. C. April 15). [3] Boyne G. (2008). their human resource professionals. Effective plans provide leaders with a strategy to tap the institutional knowledge that would be lost due to retirement. How low should succession plans go? Society for Human Resource Management Online. Effective succession plans consider the quantity of available candidates and focus on the quality of the candidates. and develop a pool of talented individuals who are willing to fill positions when needed. and attrition. While flexibility and government are not often found in the same context. M. [2] Bilmes. governments will have to adapt to a more flexible workplace to attract and retain employees of all ages. Without a focus on succession planning and a willingness to implement one. The next phase of this research might be a quantitative study of age demographics of select government agencies and a study of their individual succession plans. there is a gap in research in public management succession planning. CONCLUSION Succession planning cannot be an afterthought.younger employees. (2002). (2007) Succession planning and generational stereotypes: should HR consider age-based values and attitudes a relevant factor or a passing fad? Public Personnel Management 36(4). while at the same time becoming more flexible and creative to retain both older and younger employees. IMPLICATIONS AND NEED FOR FURTHER RESEARCH. (2010) Managing Human Resources. Succession planning provides a proactive and future focused step-by-step methodology for organizational leaders to assess. 168 . L. REFERENCES [1] Anderson. promotion. (2009. & Dahya J. S. Understanding the importance of succession planning would be of interest to all government agency leaders. Help wanted in public service. Succession planning is a critical component of management at the every level of government. their leaders. This research would be of special interest to all public organizations. skills and abilities on a daily basis. (15 ed) South-Western Cenage Learning. A qualitative study of agencies that have implemented succession planning might include the degree of success they have managed. 179-200. 80(1). Succession management is not only about leadership but also about representative government talent and diversity. Public Administration. and the younger generation of potential leaders. [4] Crumpacker M. Executive succession and the performance of public organizations. today’s succession planning requires an organization wide effort of all talent in an organization. This does not happen without strategic systematic methods such as succession planning. & Snell. the public service loses knowledge. 349-369. Although succession planning is common in the private sector. Talent pools should not just happen. & Crumpacker J. There must be a deliberate effort by government agencies to bring new talent and new diversity into the workplace. While much emphasis has been placed on the transition of leaders. G. evaluate.

R. p. S. [11] Logan. 237-253. M. (1997). A guide to the strategic leadership. K. W. (2004) Recruitment and selection of public workers: an international compendium of modern trends and practices. K. N. E. (2003). Bridging the knowledge and skills gap: tapping federal retirees. 533-547. Public Personnel Management.opm. 2009 from www. [13] Roddy. Public Personnel Management 33(3). Public-sector succession: a strategic approach to sustaining innovation. Employment Relations Today. Public Personnel Management . (2008).D. page 3-4.org/Research. J.[5] Green. & Braaten. [6] Helton. W. (2007) Navigating Pennsylvania’s dynamic workforce: succession planning in a complex environment. 4-10.census. 22(4). S. Public Personnel Management 33(4). [15] Schall. 29:2. Selected characteristics of baby boomers 42-60 years old in 2006. Retrieved November 18. http://www. 335-347. 487-496. (2002) Demystifying succession planning. Percentage of Employees Involved in Succession Plans. May. Census (2008).gov/hrd/lead/index. K. M. p. [9] Lavigna. an example in succession planning management. (2004).) New York: Amacom. 32(4). say Colorado municipal executives. 2009 from www. p 435-444. F. 36:4. [8] Kim. J. (2008). E. 421-448. [7] Herrera. & Hays. Linking employee assessments to succession planning. J. R. Public Administration Review. [12] Reester.asp 169 . Public Personnel Management 29 (4). Succession planning NOW. (2005) Effective succession planning: ensuring leadership continuity and building talent from within (3rd ed. (2000) Beware and prepare: the government workforce of the future.gov [17] United States Office of Personnel Management (2009). 57(1). [16] United States Census Bureau. (2004) Leadership capacity building model: developing tomorrow’s leadership in science and technology. Public Personnel Management. [14] Rothwell. American Society for Public Administrators. Age and Special Populations Branch of the U.S. Society for Human Resource Management. A. [10] Liebowitz.shrm. Retrieved November 18. & Jackson. 25-31.

College students who are aware of global changes in career offerings can have high expectations from companies. formation of structural skills. work experience and organizational characteristics. Thus. and work experience and career offerings. of Management Selman-i Pak Cad. creative. innovation supportive.edu. top to bottom and written communication [1][2]. minimum job description.ORGANIZATIONAL AND CAREER EXPECTATIONS OF TURKISH COLLEGE STUDENTS Tuğba Karabulut stanbul Commerce University. and hierarchical structures can not respond to environmental changes. network and virtual organizations have become popular [2]. tensor. Keywords: Organizational Expectations. Turkish College Students. coordination. Dept. [1]. Career Expectations. Turkey ORGANIZATIONAL CHARACTERISTICS AND CAREER OFFERINGS OF COMPANIES College students are aware of changes in organizational characteristics to figure out the appropriate organization to work for. labour sharing. They prefer to work for modern. The frequency distribution analyses. etc. 170 . hierarchy.tr Phone: +90-216-5539422/2278 ext. Nowadays. authority. The study was conducted on 131 senior college students in the faculty commercial sciences in a foundation university in Turkey. Faculty of Commercial Sciences. clearly expressed tasks. sex and career offerings. Likert’s organizational structures with communicating groups. mean analyses and chi-square analyses were conducted to the data. formalization. Modern organizations have the following characteristics: staff participation. The study also tries to find out the associations between sex and organizational characteristics. work specialization. team oriented. They prefer to work for companies which make long term career planning. bureaucratic. Large. decentralized and teamoriented companies which they can manage themselves and play leadership roles. companies have to restructure their organizations continuously to adapt internal and external changes. The characteristics of traditional organizations are centralization. divisional. bureaucracy. development of the communication system. functional divisions. The characteristics of entrepreneurial organizations are autonomy. 34672 Üsküdar stanbul Turkey E-mail: tkarabulut@iticu. the delegation of tasks and responsibilities. bottom. linear-staff-organizations are criticized whereas matrix. linear. stability. horizontal. ABSTRACT The purposes of this study are to explore the organizational and career expectations of Turkish college students from companies which they will work for when they graduate. functional.

317-377]. achievement. good work atmosphere. positive job attitudes. shares). food services/subsidized cafeterias. work conditions. retaining. 252-259]. Companies also focus on managing stress. pp. job design. work-life balance) [5. wish to belong a social group. comprehensive and tailored compensation packages. learning and development) and communal rewards (leadership. Base pay. and physical fitness programs [3. Companies can provide paid vacations. Companies focus on flexible work arrangements such as flextime. rating scales. incentive pays. social and economic work motivations can determine positive work attitude [7]. understanding supervisor. prestige. They want to work to have financial independence and continue their education in lifelong learning concept. On the other hand. financial services. pp. and results based system as performance appraisal methods [3. quick career. compressed work weeks. Employee services can include relocation. transactional rewards (pensions. values. flexibility). ergonomics. 540-542]. managerial and executive incentive pay are widely used pay system methods [4. recognizing and motivating employees. work guarantees. It was found that happiness with a financial situation during the past 6 months vary depending on age. and safety rules [5. merit pay. pp. The job market needs to know the characteristics and expectations of students to tailor conditions to hire. sales incentives. Companies can use 360 degree feedback evaluation method. relational rewards (training. more work/fewer hours to provide worklife balance and adapt the needs of the business environment and workforce. Money in the past indicated that when families’ economic situation change during childhood and the perception of importance of money for their family members and themselves vary according to age and gender. Major objectives of companies in human resource management are attracting. telecommuting. possibilities of promotion. Employers have to get precautions for employee safety. sick pay and paid time off. 635-641]. bonuses. repetitive stress injuries. good interpersonal relations. permanent part-time work. essay method. contingent pay. behaviorally anchored rating scales method. groupbased incentive plans. legal services. recognition. profit sharing. scholarships for dependents. other perks. pp. perceptions about their families’ financial position varied according to family type. possibility to use skills and knowledge. Money in the 171 . money attitudes of college students relating to past and future were linked to some demographics especially gender and age variables. 255-297]. career development. Rewards can be categorized as follows: individual rewards (base pay. forced distribution method. incentives. bonuses. Most of the students want to perform as better as possible regardless their salaries [6]. A study conducted on undergraduate business students in US shows that male students expect higher starting salaries than female students [8]. personal development opportunities. STUDIES ON CAREER EXPECTATIONS OF STUDENTS The needs of students from work can be determined as salary. holidays. Job satisfaction. job sharing. retain and motivate them. create a safety culture and provide training to employees to understand nature hazards of the workplace. work standards method. pp. sabbaticals as payment for time not worked. A study conducted in Lithuania and Estonia shows that students have positive attitudes to work. work ethics. ranking method. critical incident method. burnout. healthcare.provide safe working environment. According to a study conducted on Turkish college students. Performance appraisals are critical to determine the appropriate compensation strategy.

On the other hand. The 5% significance level is used for chi square analyses. The study was conducted on 131 senior college students in the faculty of commercial sciences in a foundation university in Turkey. The data was collected via questionnaire which had questions in three sections. These students took courses in the fields of management and human resource management. The frequency distribution analyses. neither important. Family leave is the most important benefit for both women and men [11]. work experience and organizational characteristics. mean analyses and chi-square analyses were conducted to the data. major and work experiences of students. age. Women also believe that maternity leave and paternity leave are more important than men. The second section has 19 questions about organizational expectations of students.748 whereas the Cronbach´s Alpha for career offerings is 0. The purposes of this study are to explore the organizational and career expectations of Turkish college students from companies which they will work for when they graduate. 172 . 9% of them are 25 years old and 3% of them are more than 25 years old. The questionnaires were filled by students before their courses in their classrooms. expectations related to their country’s economic situation in the next 5 years varied according to gender [9]. FINDINGS OF THE STUDY The findings of the study show that 55% of respondents are males whereas 45% of them are females. Peake & Harris (2002) conducted studies in the literature about the future expectations of work and family activities of students [10]. & Steele-Clapp (1998). When the ages of the respondents are analyzed. METHODOLOGY This study is a leading study to determine organizational and career expectations of Turkish college students. The 5 point Likert scale was used to learn expectations of students for the second and the third sections. The observed frequencies were merged to conduct chi-square analyses (very important and important were merged as one of the observed frequency whereas very unimportant. 26% of respondents have more than 2 years and 10% of respondents have 1-2 years job experiences. The first section consists of questions about sex. nor unimportant were merged as another observed frequency in a crosstab). Most of the respondents (64%) have less than a year job experience. 30% of them are 22 years old. Novack & Novack (1996).future indicated that changes in expectations about their economic situation in the next 5 years varied according to gender and age. The third section has 29 questions about career expections of students. However. Lengnick-Hall. Lengnick-Hall. sex and career offerings. sick leave and vacation leave are more important to women than to men. Sanders. Stone & McKee (2000). 21% of them are banking and finance major and 20% of them are tourism major. Most of the students (59%) worked in any business whereas few of them (41%) did not have any job experience except internships. work experience and career offerings. The Cronbach´s Alpha for organizational characteristics is 0. The study also tries to find out the associations between sex and organizational characteristics. Thorn & Gilbert (1998).866. The findings show that 34% of respondents are international trade major. 13% of them are 21 years old. 25% them are business administration major. 32% of respondents are 23 years old. A study shows that family leave. 13% of them are 24 years old. unimportant.

Relations of employees with people inside and outside of organization are written & determined 7. The organizational structure of the company is hierarchical 10.978 1.0) 131(100.2) 51 (38.5) 0 (0) 13 (9.3) 131(100.305 4.695 0.131 4.0) 71 (54. Giving authority to employees to use organizational resources 17.5) Very Unimportant n (%) 0 (0) 0 (0) 0 (0) 1 (0.9) 23 (17. The manager-subordinate relations are based on giving commands & sending reports 11.2) 130 (99.7) 49 (37. Developing leadership characteristics of employees Very Important n (%) 61 (46. Employees are tied (bound) to one manager 14.5) 33 (25.714 0.690 0. Performance appraisals of employees are conducted based on their job descriptions.4) 16 (12.8) 14 (10.3) 24 (18.5) 4 (3.5) 36 (27. Responsibilities of employees are written 6.341 4.8) 2 (1.942 1.3) 4 (3.4) 0 (0) 0 (0) 6 (4. Employees can work in teams with their colleagues 15.092 4.8) 2 (1.0) Missing n (%) 1 (0.593 0. Dev.192 4.7) 61 (46.2) 37 (28.2) 131 (100.0) Mean 4.9) 126 (96.7) 12 (9.0) 35 (26.8) 17 (13.0) 173 .5) 13 (9.0) 131(100.0) 131(100.2) 129 (98.830 0.3) 37 (28.5) 30 (22.5) 47 (35. The organization has a leader 19.7) 130 (99. systematically & regularly 8.3) 55 (42.8) Total n (%) 130 (99.4) 131 (100.8) 3 (2.0) 130 (99.313 3.8) 4 (3.838 0.695 0.1) 3 (2.011 1.696 1.233 3.1) 23 (17.7) Important n (%) 59 (45.9) 2 (1.1) 15 (11.2) 131 (100. Awards of employees are based on their performance appraisals 9.8) 131(100.2) 45 (34.1) 5 (3.688 2.7) 14 (10.9) 57 (43.9) Unimportant n (%) 3 (2.727 0. The company is institutionalized 2.443 4.5) 0 (0) 0 (0) 0 (0) 0 (0) 1 (0. Authorities of employees are written 5.1) 18 (13.8) 1 (0.9) 128 (97.369 4. Job descriptions of employees are written 4.3) 8 (6. Importance of Organizational Characteristics of The Company Neither Important.8) 131(100.282 1 (0.7) 49 (37.4) 43 (32.1) 15 (11.2) 19 (14. The manager makes decisions by himself without the participation of subordinates 13.6) 10 (7.6) 60 (45.937 3.5) 20 (15.7) 57 (43. Nor Unimportant n (%) 7 (5.4) 56 (42.9) 23 (17.5) 3 (2.086 0.4) 54 (41.2) 128 (97.0) 131(100.2) 53 (40.6) 13 (9.0) 69 (52.6) 7 (5.1) 73 (55. Employees can manage themselves (being autonomous) 16.3) 24 (18.8) 2 (1.3) 9 (6.0) 131(100.5) 2 (1.0) 131 (100.5) 19 (14.0) 4.9) 25 (19.3) 0 (0) 6 (4.6) 52 (39.8) 22 (16.095 4.8) 3 (2.9) 29 (22.5) 128 (97.5) Total n (%) 131(100.2) 54 (41.350 1.0) 131(100.260 4.4) 61 (46.504 2 (1.7) 47 (35.1) 2 (1.2) ORGANIZATIONAL CHARACTERISTICS OF THE COMPANY 1.5) 17 (13.769 0.898 0.111 0.9) 57 (43.6) 3 (2. 0. The general manager and key managers of the company are professional managers 3.3) 4 (3.2) 58 (44.2) 12 (9.9) 51 (38.6) 49 (37.0) 40 (30.6) 43 (32.101 0.0) 131(100.016 3.2) 11 (8.6) 1 (0.5) 67 (51. The decisions are made centrally by top management 12.Table I.0) 127 (96.3) 11 (8.408 4.0) 3.0) 125 (95.0) 131(100.366 Std.6) 131(100.5) 131 (100.191 4.0) 50 (38. Forming innovative/creative organization climate 18.0) 129 (98.757 6 (4.7) 131 (100.5) 1 (0.3) 1 (0.7) 127 (96.

they seem that they are aware of the real working conditions in Turkey. They can also be considered as hygiene factors. It can be concluded that employers in Turkey need to consider sexes and work experiences of their employees to determine organizational characteristics and career offerings of their companies. It is also tried to determine the associations between sex and organizational characteristics. love/belonging needs. promoting employees satisfy self-actualization needs of employees. Although respondent students attend to a foundation university and pay tuitions around 8. good business relations. there are also several companies which work off-the book. and shuttle service for employees satisfy physiological and security needs of employees. It can be considered as motivation factor. Promoting. They don’t have very high expectations from companies which they will work in the future. achievement. Herzberg distinguishes two factors which companies need to provide for their employees: hygiene factors and motivation factors. training and personal development can be considered as motivation factors in Turkey. The GNP per capita is around 10. recognition. students who have work experiences want to work with leaders more than students who don’t have work experiences. gym etc. interpersonal relations and status are motivation factors [12. sex and career offerings. advancement and growth are hygiene factors whereas working conditions. distance working opportunities. However. Work itself. 174 . responsibility. They would like to manage themselves and have authorities to use organizational resources. nonmonetary rewards. When the findings about the importance of career offerings of the company are analyzed (Table II). than male students. On the other hand. They are physiological needs.The findings about the importance of organizational characteristics of the company show that students prefer to work in modern. salary. safety/security needs. Female students give more importance to work for organizations where they can work independently. clean and modern working place. work experience and organizational characteristics. decentralized organizations which support innovation/creativity (Table I). However. 53-702]. They want to be promoted to satisfy their self-actualization needs. On the other hand.000 USD every year. work experience and career offerings in this paper. p. nursery. Students who have work experiences give more importance to work in organizations which have leaders than students who don’t have work experiences. students are aware of the importance of institutionalization and prefer to work institutional organizations where they can work with professional managers and be awarded based on their performance appraisals. career opportunities abroad. these factors can be motivation factors for employees in developing countries such as Turkey. good business relations. career opportunities abroad and in the country. maternal/paternal leave and family leave can be considered as hygiene factors for employees in developed countries such as US. Female students prefer to work in decentralized and ethical organizations which will help them to improve themselves and ease their lives more than male students. have authority to use organizational resources and behave according to work ethics than male students. They focus on finding hygiene factors more than motivation factors in their workplaces. The rejected hypotheses are shown in Table III. Hygiene and motivation factors can vary depending upon the development level of a country. nonmonetary rewards. Although there are laws and regulations in Turkey. esteem needs and self-actualization needs. Providing legal social security insurance. gym. maternal/paternal leave and nursery. Maslow define five needs of people. meal coupons/meals. supervision. company’s policies and administration.000 USD. providing long term career planning. Providing flexible working hours. They also give more importance to work for organizations which will provide shuttle service. prestige. job security. it is found out that students would like to satisfy their physiological and safety/security needs.

4) 36 (27.7) 128 (97.1) 7 (5.0) 131 (100.047 4.747 CAREER OFFERINGS OF THE COMPANY 1. Providing flexible working hours to employees 26.419 175 .0) 18 (13.3) 2 (1.8) 47 (35.7) 129 (98.5) 2 (1. gym etc.0) Std.1) 3 (2.9) 9 (6.298 4.419 4.7) 129 (98.2) 28 (21.375 4.6) 2 (1.1) 42 (32.8) 54 (41.0) 131(100.5) 3 (2.250 4.637 0.1) 4 (3.659 4.1) 42 (32.047 3.602 3.0) 131(100.3) 3 (2.7) 129 (98.6) 69 (52.922 4.458 4.438 4.0) 131 (100.5) 3 (2.333 4.7) 33 (25. Promoting employees 21.9) 24 (18.040 0.5) 2 (1.0) 131 (100.266 4.5) 71 (54. Providing prestige to careers and personal lives of employees 14.6) 51 (38.0) 131 (100.5) 77 (58. Providing distance working opportunities to employees 27.5) 129 (98.6) 8 (6.631 0.0) 131 (100.3) 3 (2.2) 63 (48.1) 7 (5.884 0.5) 128 (97.760 3.5) 17 (13. The working place is clean and modern 9.0) 131 (100.726 0. Providing private retirement insurance (pension) for employees 6.2) 52 (39.1) 61 (46.5) 0 (0) 10 (7.673 0.865 1.7) 48 (36.6) 8 (6.3) 29 (22.0) 131 (100.8) 129 (98.999 0.0) 131 (100.5) 129 (98.0) 3 (2.6) 1 (0.5) 127 (96. 0.1) 1 (0.1) 34 (26.5) 129 (98.0) 131 (100.049 0.924 1.3) 3 (2.0) 131(100. Providing precautions for work safety of employees in the workplace 22.3) 3 (2.2) 81 (61.832 0.3) 1 (0.8) 88 (67.5) 129 (98.7) 49 (37.7) 23 (17.5) 3 (2.0) 52 (39.Table II.1) 34 (26.0) 8 (6.5) 0 (0) 2 (1.5) 69 (52.2) 30 (22.0) 131 (100.5) 58 (44.445 4.5) Missing n (%) 2 (1.8) 2 (1.0) 131(100.5) 14 (10.8) 0 (0) 129 (98.0) 131(100. Providing meal coupons/meals to employees 7.8) 2 (1.6) 28 (21.2) 69 (52.0) 131(100.3) 42 (32.5) 129 (98.7) 128 (97.8) 2 (1.5) 2 (1.3) 4 (3.623 0. Providing arrrangements in machineries & tools for employees to work comfortably & appropriately 23.3) 2 (1.722 0.628 4.930 4.7) 91 (69.078 3. Providing monetary rewards to employees 18.5) 128 (97.7) 129 (98.5) 2 (1.2) 15 (11.8) 1 (0.5) 0 (0) 6 (4.703 0.5) 3 (2.5) 3 (2.7) 36 (27.7) 128 (97.9) 128 (97.4) 50 (38.3) 2 (1.8) 53 (40.7) 15 (11.7) 128 (97.2) 22 (16.0) 131 (100.1) 36 (27. Providing training & personal development opportunities to employees 24. Dev.4) 43 (32.3) 2 (1.5) 2 (1.5) 10 (7.7) 56 (42.614 0.609 4.7) 51 (38.7) 124 (94. Behaving according to work ethics in the organization 25.442 4.3) 5 (3.5) 5 (3.8) 3 (2.5) Total n (%) 131(100. Providing nursery. Providing nonmonetary rewards to employees 20.5) 2 (1.740 0.8) 22 (16.7) 128 (97.3) 3 (2.5) 0 (0) 8 (6.465 3.0) 131(100.0) 131 (100.5) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 2 (1.5) 128 (97. Importance of Career Offerings of the Company Very Important n (%) 63 (48.8) 129 (98.8) 2 (1.3) 7 (5.9) 5 (3.8) 1 (0.566 0.3) 0 (0) 0 (0) 2 (1.539 4.5) 129 (98.3) 38 (29. The job requires travel abroad 11.9) 52 (39.0) 131 (100.9) 8 (6.6) 39 (29.1) 88 (67. Providing company cell phones. Providing good business relations (network) 12.3) 2 (2. Nor Very Unimportant Unimportant Unimportant Total n (%) n (%) n (%) n (%) 8 (6. Providing maternal/paternal leave to employees 29.980 0.0) 131 (100. Providing legal social security insurance to employees 4.0) 131 (100. Providing long term career planning for employees 2.845 4.1) 0 (0) 0 (0) 4 (3.832 0.9) 16 (12.1) 64 (48. Providing company stocks to employees as monetary rewards 19.8) 128 (97.1) 2 (1.3) 3 (2.3) 8 (6.3) 2 (1.0) 131 (100.3) 7 (5.5) 3 (2.9) 91 (69.0) 32 (24.5) 15 (11. to employees 17.9) 73 (55.753 0.6) 9 (6.005 1.5) 2 (1.0) 49 (37.1) 1 (0.3) 3 (2.5) 45 (34.708 0.0) 131 (100.3) 9 (6.5) 129 (98.1) 60 (45. Providing career opportunities abroad 15.5) 3 (2.0) 131 (100.0) 30 (22. Providing private health insurance to employees 5.4) Neither Important. Providing family leave for employees for their sick relatives Mean 4.1) 45 (34. Providing career opportunities in the country 13.0) 131 (100. to employees 28.9) 58 (44. Providing sector average salaries to employees 3.4) 21 (16.0) 131 (100.645 0.9) 35 (26.0) 131 (100. Providing company cars to employees 16.4) 52 (39.7) 6 (4.687 0.5) 4 (3.7) 43 (32.5) 3 (2.3) 10 (7. laptop etc.5) 2 (1.7) 67 (51.8) 65 (49.5) 38 (29.1) 0 (0) 0 (0) 1 (0.042 1.638 0.3) 3 (2.194 4.5) 0 (0) 0 (0) 0 (0) 1 (0.943 0.434 4.5) 63 (48.411 4. Providing shuttle service for employees 8.3) 2 (1.8) 47 (35.5) 2 (1.5) 129 (98.7) Important n (%) 57 (43.5) 128 (97.5) 2 (1.508 4.4) 71 (54.8) 55 (42. The job requires travel in the country 10.693 0.7) 129 (98.395 3.

84 3. There is an evidence in the data against the hypothesis. and being awarded based on performance appraisals. Several public and private companies use bureaucratic management style. The null hypothesis is rejected at the 5% level. safe.022 0. First. clean. The null hypothesis is rejected at the 5% level.307 8. they also focus on promotion and training and personal development to satisfy their self-actualization needs. The null hypothesis is rejected at the 5% level.507 6. being autonomous and having authority to use organizational resources.009 0 0. There is an evidence in the data against the hypothesis. 1 1 1 1 1 1 1 1 1 5.530 8. gym etc. to employees H9: There is no association between sex and providing maternal/paternal leave to employees H10: There is no association between having work experience and having a leader in the organization df 1 X2 5.84 CONCLUSION Turkey is a developing country.84 3.84 3. Functional organizational structure is widely used by companies. Turkish students have low career expectations. There is an evidence in the data against the hypothesis. The null hypothesis is rejected at the 5% level.026 0. Their major focus is not having company cars.007 0. The Rejected Hypotheses of The Study & Results of The Chi Square Analyses Hypotheses H1: There is no association between sex and being autonomous (employees can manage themselves) H2: There is no association between sex and giving authority to employees to use organizational resources H3: There is no association between sex and providing shuttle service for employees H4: There is no association between sex and providing good business relations H5: There is no association between sex and providing career opportunities abroad H6: There is no association between sex and providing nonmonetary rewards to employees H7: There is no association between sex and behaving according to work ethics in the organization H8: There is no association between sex and providing nursery. They focus on hygiene factors more than motivation factors. they give importance to institutionalization. Most of them are noninstitutionalized family businesses. There is an evidence in the data against the hypothesis.527 0.003 3.Table III. comfortable working place.84 3. prestige. 176 . The null hypothesis is rejected at the 5% level.052 4. Almost 99% of companies are SMEs in Turkey.966 8. The null hypothesis is rejected at the 5% level. national and international career opportunities are not their priorities. they focus on satisfying their physiological and safety/security needs by having sector average salaries.84 3. meals. However. There is an evidence in the data against the hypothesis. There is an evidence in the data against the hypothesis.206 P 0.004 0. The null hypothesis is rejected at the 5% level. There is an evidence in the data against the hypothesis. Students in this study have learned modern organizational structures but they have not experienced them.84 3.005 0. The null hypothesis is rejected at the 5% level. There is an evidence in the data against the hypothesis.114 6. network.011 0. modern. decentralized organizations which offer creative/innovative organizational climate. There is an evidence in the data against the hypothesis. They do not demand comprehensive compensation packets. legal social security.245 7. Having nonmonetary rewards. On the other hand. They prefer to work in modern.023 Table value 3. They give importance to work ethics and family leave.84 3.84 3. The null hypothesis is rejected at the 5% level.873 15. There is an evidence in the data against the hypothesis. They don’t care alot about travel requirements of their jobs.84 Results The null hypothesis is rejected at the 5% level.

3(53).W. R. Companies can use the findings of this study to make organizational changes and customize their offerings to new graduates. An Empirical Study of the Work Attitudes of Generation Y College Students in the USA: The Case of Hospitality and Merchandising Undergraduate Majors.: Pearson Prentice Hall. R. 2008. However. Turkish College Students’ Attitudes Towards Money. V. Journal of Services Research. Koval. Harlow: FT Prentice Hall. Hall.S. 365-366. L. 65-70. Students who have work experiences understand the importance of working with leaders more than students who do not have work experiences. Economics and Management. and students who have work experiences and students who don’t have work experiences. 493-501. 103-109. satisfy their self-actualization needs and work easily than male students. This study is a leading study to determine organizational and career expectations of Turkish college students. [9] Özgen Ö. Engineering Economics.. C. A. Atlantic Economic Journal. Human Resource Management: An Experiential Approach. [3] Mondy.G. T-V. F. Since. and ethical organizations where they can be appreciated. 36.. N... they can not judge its difficulties and opportunities. Kavaliauskas. Boston: McGraw Hill. T. Organizational Structure Forming Problems in Modern Industrial Enterprise. other differences can be observed between male and female students. It is believed that when the development level of Turkey increases. Baum. International Fourth Edition. 2007. 2009. Dotter. A. 14. A. Female students give more importance to work for modern. H.. J.J. S.. & Alas. 582-588. A.M. Crosscultural studies can be conducted to find out the differences in the expectations of students in developed and developing countries. If this study is conducted on larger sample of students. 9(1). 2007. 2009.. Conducting this study in only one foundation university in Turkey and its sample size are major limitations of this study. 7th Edition. R. S. & Taylor. G.J. & Bayoğlu. B. 2005. students will be more demanding about their organizations and careers. Upper Saddle River. [8] Black.laptops. Socioeconomic Factors and Business Student Plans and Expectations. Interaction of Learning Organization and Organizational Structure. & Devine. Crutsinger. there are differences between female and male students for their organizational and career expectations. Human Resource Management. K. 177 . As it is observed that Turkish college students are not very demanding about organizational characteristics and career offerings of companies. 2008. * This paper is financially supported by Istanbul Commerce University. etc.. Human Resource Management. [7] Josiam.. On the other hand. [4] Bernardin. respondent students have not experienced real worklife. D. 1(51).. International Journal of Consumer Studies. Engineering Economics. it is a leading study in Turkey to figure out organizational and career expectations of college students. 2008. 15-30. [6] Kumpikaite V. & Sakalas.. [2] Sakalas.. & Benavides.. 29(6). decentralized.S. A. [5] Torrington. Students’ Attitudes to Work and Studies: Practical Case.S. & Venskus. Reynolds. 2007. REFERENCES [1] Kubrak. Thozhur.

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The mean of the traditional approach statements of teachers to conflict is higher than the mean of their modern approach statements. Hedonism value type is related to both openness to change and self-enhancement value groups [22. Keywords: value. Triandis [26]. They classify the value types into ten and then divide these ten value types into two dimensions.25]: “Culture is to a human collectivity what personality is to an individual”. self-enhancement. consists of traditional (i. and it gains different meanings as various disciplines define it in their own boundaries.com Phone: +90 0505 887 71 68 Ali Ilker Gumuseli Yildiz Technical University Faculty of Education Istanbul-Turkey aligumuseli@gmail. has been developed throughout the history.TEACHERS’ CULTURAL VALUES AND CONFLICT APPROACHES Aylin Kirisci Yildiz Technical University Faculty of Education Istanbul-Turkey aylinkirisci@gmail. attitudes and common behaviors. Among value groups. culture. There are positive correlations between the traditional approaches to conflict and the value placed on openness to change. p. Kluckhohn & Strodtbeck [13]. The first dimension represents “openness to change” (combining value types of self-direction and stimulation) versus “conservation” (combining security. Schwartz and Bilsky [21] define values as people’s conceptions of goals that serve as guiding principles in their lives. historically derived and selected) ideas. Therefore there is no consensus on its definition. In the present study. based on Hofstede [7] [9]. conflict. conformity and tradition). and lastly. secondly conservation. thirdly openness to change. Bodur & Kabasakal [3] and Harcar [6]’s work: “Culture distinguishes the members of one human group from another. There is a positive correlation between the modern approaches to conflict and the value placed on openness to change value group. teachers CULTURE AND VALUES The concept of culture is a widely analyzed social subject. The second dimension represents “self-transcendence” (combining benevolence and universalism) versus “selfenhancement” (combining power and achievement)”.e. teachers prefer mostly self-transcendence. in the words of Hofstede [7. values.” Schwartz [23] has pointed out that values are considered the most appropriate means for measuring and comparing two cultures. conservatism.90] [25]: 179 .com Phone: +90 212 383 48 20 Fax: +90 212 383 48 08 ABSTRACT This study aims to figure out whether there are statistically significant relationships between teachers’ value preferences and approaches to conflict. p. In support. self-enhancement and self-transcendence. the following definition is utilized.

different needs and points of view. However the modern view of conflict emphasizes the necessity of conflict. and states that “healthy” organizations should have intra-organizational conflict to a certain extent. organizations and nations) come into contact with one another. Organizational effectiveness could only be possible via harmony. cooperation and the absence of conflict. beliefs and skills. groups. In order to attain the objectives. Lewin. When two or more social entities (i. Conflict is a crucial concept for organizations as well as social issues. Are there any statistically significant relationships between teachers’ cultural value preferences and approaches to conflict? 180 . the following research questions were asked: 1. “Organizational conflict is an important topic for both managers and for scientists interested in understanding the nature of organizational processes”.7-15]: According to the classical organization theorists such as Fayol. There are three views about organizational conflict [19. Taylor.CULTURAL VALUES AND CONFLICT MANAGEMENT Conflict is inevitable among humans. What are the cultural value preferences of teachers? 2.198] indicates. values. a symptom of the lack of social skills. having different interests and abilities. Gulick and Urwick. p. at different maturity levels. Again neo-classical organization theorists such as Mayo. What are the teachers’ approaches to conflict? 3. A moderate amount of conflict is not necessarily dysfunctional for organizations. Weber conflict was detrimental to organizational efficiency and should be minimized. So they tried to eliminate it by improving the social system of the organization. there may be inconsistent relationships due to different attitudes. pp. individuals.e. and their perceptions of conflicts. As Baron [2. and Whyte viewed conflict as an evil. OBJECTIVES OF THE STUDY The main aim of this study is to verify the personal value preferences of teachers having various socio-economic and ethnic backgrounds.

data were collected from 367 teachers. RESULTS AND DISCUSSION Results about the Cultural Values of Teachers The value preferences of teachers according to the Schwartz’s two dimensions are given in Table I: Table I: Mean and Standard Deviation of Teachers’ Value Preferences Values Openness to Change Conservation Self-Enhancement Self-Transcendence N 367 367 367 367 S 1. Furthermore Schwartz [23] put conservation and self transcendence value groups under the umbrella of collectivism. By random sampling. There is a total of 3674 teachers working in these schools.808) is the last value.045 4.062 0.014 0. is very much in line with the social structure of Turkish people.432) is the second. To prioritize.808 4. and series of t-tests. conservatism ( =4.977 As it is seen from the table.871 4.METHOD Sample The universe participants of this study are the teachers working at 81 public schools in the counties of Sisli and Esenler in Istanbul. 201 from Sisli and 165 from Esenler (the two counties of Istanbul having different socio-economic background) during the 2008-2009 education year. Therefore we can say that quite naturally teachers discount the value type of openness to change. Turkey. Because self transcendence value group consists of the values supporting the refusal of selfishness for the benefit of the people and the nature. followed by Schwartz’s Value Survey consisting of 57 values. Measures Data were collected by means of a questionnaire containing closed-ended questions. In this regard. On the other hand. Turkish culture highlights the importance of the maintenance of custom and usage and finds change as a malign thing [4]. The questionnaire has got three sections: 7 multiple choice questions of demographic information. The third value group chosen by teachers was found as openness to change. Data were analyzed by percentage. ANOVA and LSD tests and Pearson product – correlation.977) more than others.875 1. the results are in consistent with the expectations and coherent with the values that are desired to be internalized by teachers. institutions and approaches over the traditional values [15]. Teachers chose conservation as the second value group in ranking. standard deviation. Turkish teachers value self-transcendence ( =4. Turkish society has a new structure adopting the western technology. and self-enhancement ( = 3. Therefore it can be inferred that teachers are in consistent with the collectivist structure of Turkish society [1] [9] [18] [20]. Conservation consists of conformity and security value types. It is very favorable and positive that teachers chose self transcendence as the first value group in ranking. arithmetical mean. and the Survey of Approaches to Conflict [12] consisting of 22 items. openness to change ( =4. The 181 .432 3.045) is the third.

p.” On the other hand this result can mean that teachers don’t find conflict as a chance for revolution or change. Results about the Conflict Approaches of Teachers The teachers’ approaches to conflict are given in Table II: Table II: Mean and Standard Deviation of Teachers’ Approaches to Conflict Values Modern Approach Traditional Approach N 367 367 S 0.304 As seen from the table.last value group in the rank was found as self enhancement which includes the value types of power.] This is reflected in a high power distance score indicating low participation and reluctance to disagree with superiors [7].61927 0.17222 0. Turkish teachers’ approaches to conflict are respectively = 2. On the other hand unmanaged or uncontrolled conflicts are dysfunctional [11.750 2.9]. Moreover the relationship among people hasn’t taken shape of a stabilized capitalist relation as it is in Western societies and so Turkish society is not a real industrialized society. Just looking at the means. 406] think similarly: “Turkey is a country in transition to mature industrialized society. we can say that although traditional approach has a higher mean. We can say that this is reasonably appropriate to the requirements of being a teacher and appropriate to the expectations..03902* Modern approach sees conflict as an inevitable occurrence and accepts it to a certain extent as a prerequisite for efficiency.965 3. This can be interpreted as Kongar [14] indicated: “Turkish society has lost its traditional values though lots of reforms placed with the republican era and it hasn’t possessed the “modern” characteristics yet.05 Dependent Variable: Modern Approach Coefficients Standard Error 2. as a violation of order and a problem that should immediately be solved.04130 t-statistic 15.304 on a scale of 5 point Likert.965 and = 3.20922 2. achievement and hedonism. teachers said “neither agree nor disagree” for both traditional and modern approaches. Openness to change value group combines value types of self182 . 255] claims.” Kozan and Ergin [17.07140 P 0. Results about the Relationship between the Cultural Values and Conflict Approaches of Teachers As it is seen from the table III. and its culture reflects a duality created by the coexistence of Western institutions and traditional values [….00000 0. p. but rather.805 0. a positive relationship between the modern approach to conflict and the openness to change value group is observed: Table III: Regression Analysis between the Modern Approach and Openness to Change Value Group Independent Variables Constant Openness To Change *p<.08556 0. This can be a result of bureaucratic structure and being a civil servant. Because government agencies and state-owned companies are subject to by-laws and regulations so as Kozan and Ergin [16. formal mechanisms may substitute for the traditional methods of conflict resolution used in the society. p.

The whim of personality and the role of personal values in administrative decisions are comparatively more limited in state bureaucracies.69876 P 0. This may be the reflection of being a civil servant and working in a government school. Self-direction means independent thought and action-choosing. it is very reasonable to say that teachers who prefer openness to change value group are brave and open to take risks so they don’t hesitate in taking part in conflicts. Formal mechanisms may substitute for the traditional methods of conflict resolution used in the society. p.63602 2. government agencies and state owned companies are subject to a myriad of laws. so during conflicts their being self assertive. There is a statistically significant positive relationship between the traditional approach and conservatism value group. because traditional approach advocates conflict as an evil and dysfunctional whereas people standing in the openness to change value group are brave and take risks. Because as Kozan and Ergin [16.99044 0.” From a different point of view. teachers favoring harmony and stability of society and relationships. inclinations likely to upset or harm others and violate social 183 . and regulations. restraint of actions.05 Dependent Variable: Traditional Approach Coefficients Standard Error 2.24431 0.04835 t-statistic 18. by-laws. Because of this. and independent. These place restrictions on the conflict management choices available to members. stimulation means excitement. conformity and security value types.00000 0.05 Dependent Variable: Traditional Approach Coefficients Standard Errors 2.21858 0. they choose their own goals. Teachers adopting such values are expected to prefer modern approach. they are independent and they favor change to passive self-restriction. We can say that the government organizations choose traditional approach to conflict according to their administration strategies. However statistical results show that teachers in openness to change value group prefer traditional approach during conflict. creating and exploring. 255] states: “Compared to private companies. Table V shows this relationship: Table V: Regression Analysis between the Traditional Approach and Conservatism Value Group Independent Variables Constant Conservatism *p<.direction and stimulation. because teachers who have traditional approach to conflict most probably adopt traditional value group combining tradition.04298 t-statistic 11.19412 0. In the light of these definitions. teachers who are situated in the openness to change value group are self indulgent. in other words their adoption of traditional approach to conflict is not an unsurprising thing. There is a positive relationship between the traditional approach to conflict and openness to change value group.07751 0.04475* This is an unexpected result. novelty.00000* This is an expected result.42879 5. obstinate and oppressive. and challenge in life [24]. challenging.24491 0.01398 P 0. So we can say that. and even they can start conflict when necessary. The table below shows this: Table IV: Regression Analysis between the Traditional Approach and Openness to Change Independent Variables Constant Openness to Change *p<. it may not be an inconsistent situation that self indulgent and brave teachers favoring the change adopt traditional approach in order not to submit the suppressive structure of conflict in government schools.00000 0.

see conflict as an undesirable occurrence and do their best to suppress it. For this reason we can say that their adoption of traditional approach is not an unexpected result.00598* The self enhancement value group is an orientation toward self-interest which means priority of individual interest. Schwartz [23] [16. competing. The table below shows this: Table VI: Regression Analysis between the Traditional Approach and SelfEnhancement Value Group Independent Variables Constant Self Enhancement *p<. It includes the value types of power.22346 0. p. devout and respectful for tradition. achievement and hedonism.10113 0. think the benefit of the people and the nature. From this perspective it could be said that the existence of conflict in schools. humble.11600 3. they are benevolent and universal people.e. So they may choose avoidance or accommodation in order to prevent or suppress conflict. students.00000 0.91886 0. it is not a surprising result that teachers who adopt these values see conflict from the traditional viewpoint and try to suppress it by using force and dominance. being moderate. Gumuseli [5.14457 0.03657 t-statistic 20.expectations or norms. There is a statistically significant positive relationship between the traditional approach and self enhancement value group.72503 P 0. Kozan and Ergin [16. Therefore. CONCLUSION Conflict is a very natural phenomenon in democratic societies.2] finds conflict because of cultural differences very usual and common and says that conflicts are more evident in schools since the main input.253] expected a relationship between forcing (i.00023* Teachers situating in self transcendence value group have given up their selfish purposes.04423 t-statistic 11.253] also provides empirical evidence for this relationship.18963 2. in the prisoner dilemma experiment.05 Dependent Variable: Traditional Approach Coefficients Standard Errors 2.00000 0. control or dominance over people and resources” [23. parents. p. p. There is a statistically significant positive relationship between the traditional approach and self transcendence value group.76488 P 0. 184 . Most probably they don’t want any conflict to occur. As a value type power stresses “social status and prestige. dominating) style in conflict and values of power and achievement. benevolence and universalism were the best predictors of concern for others’ gains. p.3] Similarly. process and output of schools are humans. between headteachers and teachers or among teachers is also very natural and healthy. Accommodation places high concern for others and low concern for self. administrators and other stakeholders from society. Table VII shows this relationship: Table VII: Regression Analysis between the Traditional Approach and Self Transcendence Value Group Independent Variables Constant Self Enhancement *p<. The school environment is appropriate to conflicts between and among teachers.05 Dependent Variable: Traditional Approach Coefficients Standard Errors 2.48397 0. Even the promotion of conflict in order to enhance the efficiency and productivity of the organization could be the case.16475 0.

(Doctoral Disertation. R. Turkiye-Arap Kumesinde Kurumsal Kultur: GLOBE Arastirmasi. 1994. [10] Kagitcibasi.gov. H. G. 1997. G.tr/ [7] Hofstede. Praeger. Cultures and Organizations: Software of the Mind. G. Retrieved from http://tez2. Organizational Conflict. Ozel Okul Ogretmenlerinin Catisma Yaklasimlari Ile Catismayi Yonetme Stilleri. Culture's Consequences: International Differences In Work-Related Values. Catisma Yonetimi. Baskent Universitesi. 2-22. 2(1). Yildiz Technical University). E. (7th edition). (2nd edition) Thousand Oaks. Therefore it is very important to display the conflict approaches and the reasons of these approaches of teachers. Ankara: Turk Psikologlar Dernegi Yayinlari: 2000. Ed. D. 2001. [3] Bodur. Toplumsal Kulturun Kurumsal Kultur ve Insan Kaynaklari Uygulamalari Uzerine Etkileri. M. Afzalur Rahim. Doktora Tezi. [12] Kilic. secondly conservation. R. 1980. the results of the research are below: 1. Newbury Park. [11] Karip. Turkiye’de Yonetim. T. There is a positive relationship between the modern approach to conflict and the openness to change value group. Istanbul: Beta Yayinlari. There is a positive relationship between the traditional approach to conflict and openness to change. thirdly openness to change and lastly self-enhancement as a value group. Liderlik ve Insan Kaynaklari Uygulamalari. 2000’li Yillarda Amerikan ve Turk Yoneticilerinin Bireysel Yoneticilik Degerlerine Iliskin Iki Kultur Arasi Karsilastirmaya Yonelik Bir Arastirma. Sosyal Bilimler Enstitusu. 25-53. 2003. 4. There is not any significant relationship between the teachers’ having modern approach to conflict and preferring conservatism.yok. 5. Izmir Ortaogretim Okullari Yoneticilerinin Ogretmenler ile Aralarindaki Catismalari Yonetme Bicimleri. In other words teachers who are open to change choose modern approach during conflict. Ali Ilker. [2] Baron. CA: Sage. 2006. Egitim Yonetimi ve Planlamasi Anabilim Dali. (Master’s Thesis.& Kabasakal. Teachers prefer traditional approach to conflict more than modern approach. 2. Behaviors. [5] Gumuseli. [8] Hofstede. Culture’s Consequences: Comparing Values. Ankara Universitesi. 1985. Insan ve Insanlar. Insan ve Davranisi. 3. Theory and Research in Conflict Management. Istanbul: Remzi Kitabevi. self transcendence and self enhancement value groups. Istanbul University).tr/ 185 . 1991. Teachers prefer mostly self-transcendence.yok. 2005. To sum up. London: McGraw-Hill. S.One of the keys of conflict management is to detect the exact source of the conflict and to clear out the approaches to conflict. C. & Kanungo. [9] Hofstede. N.gov. Yonetim Arastirmalari Dergisi. (3rd edition) Ankara: PegemA Yayincilik. Retrieved from http://tez2. 2002. REFERENCES [1] Aycan. Z. [4] Cuceloglu. USA. [6] Harcar. 1990. conservatism. CA: Sage. M. nstitutions And Organizations Across Nations. self transcendence and self enhancement value groups.

[15] Kozan. [17] Kozan..& Ergin. Kulturler Arasi Farklilasma ve Yonetim. International Journal of Conflict Management. P. 21-55 Retrieved from http://segrdid2. S. IL: Row. 45. Lehmann. S. 2001. F. R.2009].pdf [25] Schwartz. Toward a Universal Psychological Structure of Human Values.jstor. M.apa.& Ilter. Third Party Roles Played by Turkish Managers in Subordinates Conflicts. C. Third Party in Conflict Management in Turkish Organizations. 32 (5).pdf [24] Schwartz. B. In A. Tamayo & J. 249-267. Petrópolis.palermo. 1987. 2001. The Influence of Intra-Cultural Value Differences on Conflict Management Practices.unict. Ankara: mge Yayinevi. Managing Conflict in Organizations. Toplumsal Degisme Kuramlari ve Turkiye Gercegi. 2005. E. [18] Kusdil. Journal of Organizational Behavior. S.3. S. 186 . Extending the cross-cultural validity of the theory of basic human values with a different method of measurement. Peterson.& Bilsky. 550-562. Melech.. Turk Ogretmenlerin Deger Yonelimleri ve Schwartz Deger Kurami. E. Retrieved from http://www. Journal of Cross-cultural Psychology. Olson. Brazil: Vozes. 58. Social Psychology Quarterly. Bowling Green. M. 1998. A. Journal of Personality and Social Psychology. H. Porto (Eds.doiLanding&doi=10.1037/0022-3514. & Owens. S.04.550 [22] Schwartz. Retrieved from http://psycnet. [23] Schwartz. C. H. 59-79. The Ontario Symposium. 1994. 1994. H. G. & M. 8. Basic human values: Their content and structure across countries. V. S. Zanna (Eds. Value Priorities and Behavior: Applying a Theory Integrated Value System.edu/cienciassociales/publicaciones/pdf/Psico2/2Psico%2007. [19] Rahim. Burgess. H. C. 405-415.53.. 15(5). [14] Kongar. 519-542.) The Psycology of Values. [16] Kozan.) Values and Behavior In Organizations. S.fmag. A.& Ergin.org/pss/2787148 [12. H. 1995.. 53. 2000. Evanston. In C. New York: McGraw-Hill. 1961. 88-107. Seligman. H. K. & Kagitcibasi C. Human Organization. L. Istanbul:Remzi Kitabevi.org/?fa=main. 58(4). S.it/Allegati/convegno%207-8-10-05/Schwartzpaper. 453-466. K. [21] Schwartz. M. F. [20] Sargut. 1995.. Value Priorities and Religiosity In Four Western Religions. & Huismans. Turkish Journal of Psychology.& Strodtbeck. S. J. 1999. M. [26] Triandis. K. 2001. Culture and social behavior. 119-144 Retrieved from http://www.[13] Kluckhohn. London: Quorum Books. 1996. Variations in Value Orientations. W. Harris. (3rd edition).

but an ideal form still eludes us. and probably the most disliked human resource management activity. neither’s suggestions for changes are solicited nor acted upon.MODERN WORKFORCE CHALLENGE: APPROPRIATELY EVALUATING EMPLOYEES’ JOB PERFORMANCES Jack N. peers). 3) adding an appraisal category. 4) better timing. “has remained a largely unsatisfactory endeavor” for years even though it is a very important HRM area. Additional changes included 1) clarifying goals of performance appraisal. Thomas and Bretz state that managers and employees dislike the PA process because neither was involved in developing the forms nor processes. most common.S. organizations use a variety of performance appraisal formats. kondrasu@up. 321].edu 1-503-943-7278 1-503-943-8041 (fax) ABSTRACT U. “both managers and employees tend to approach appraisal feedback sessions with fear and loathing” [p. reducing biases. training those involved. Willamette Blvd.A. Performance appraisal systems are improved by rectifying common shortcomings (e. 306]. 2) focusing on both results and behaviors. This article is designed to move closer to an ideal performance appraisal system. as typically conducted. that performance appraisal (PA) will be done in each case—whether by the supervising manager or others (e.S. The latest edition of one of the most prominent human resource management textbooks [1] points out that “every manager needs some way to appraise employees’ performance” [p. Oregon 97219 U. Portland. 28]. Thomas and Bretz [8] state that PA. and 5) better involving constituencies. Research conducted to ascertain all problems that are occurring with present performance appraisal systems produced a list of 76 performance appraisal problems (reduced to 4 general categories). The appraisal of employee job performance is one of the most important.g. managers don’t like to give nor do subordinates like to receive negative messages. INTRODUCTION Performance appraisal is both very important to the functioning of organizations and also very problematic. and “few things managers do are fraught with more peril than appraising subordinates.g. using formats with research substantiation). Kondrasuk* Nick Slepnikoff Justin Gomez Jessica Peters Danielle Castro *Pamplin School of Business Administration University of Portland 5000 N. negative PA ratings have negative effects on employee careers and perceptions 187 . performance” [p.

of their managers. these were reduced to four general categories. The ideal PA system proposed here will seek to rectify the problem areas and achieve the goals of PA. BACKGROUND OF PA Performance Appraisal” (PA) has been synonymous with performance review. 3) a system of setting employee job expectations/employee actual job performance/assessing that performance/feedback to the employee on the performance assessment and how to improve it in the future/setting new goals and expectations for another period. performance evaluation. PA systems have been criticized in many areas. what are the problem areas encountered in typical performance appraisals. More recently a fifth entry has been Integrated Organizational Performance Management with vertical and horizontal loadings and strategic/operating plans and individual goals and metrics as described by McGrath [6]. and there are no rewards for taking the manager’s valuable time to appropriately conduct the PA. The ideal PA system is meant to be theoretical but with enough details to make it pragmatically useful now. RECENT SUGGESTIONS FOR IMPROVING PA Academic scholars and industrial practitioners have suggested many aspects to change. Kilzer. confusing list of problems regarding the typical PA system. and then propose an ideal PA to meet the concerns. It would seem that the present problems could be ascertained by surveying the research and practitioner literature about PA. It is still an overwhelming. over time. 2) Employee performance 188 . and other terms and combinations of terms. comprehensive list of PA problems. That is the definition of PA that we will use in this study. Crowell. Purpose of the Paper What would be an ideal PA? The purpose of this paper is to develop an ideal PA—or come as close as possible to a panacea in this area. or tweak. WHAT ARE THE PROBLEMS IN DOING PA? It is much easier to find problems in doing PA than to find solutions or suggestions for improvement. At the present time. referred to 1) an instrument or form to assess an employee's job performance. not an exhaustive list of all references to those problems. PA has. Such a survey was completed which led to 76 different problems with PA as it is typically conducted. and Teeley [5] found 76 problem areas in present PA systems. 3) what is measured and how. The categories are problems with: 1) the purpose of PA. how is PA usually conducted. and 4) the system and process of PA. The list of problems seeks to be a representative. PA typically refers to more of a systems approach as stated in #3 in the preceding. We start with the general background and the specific definition of PA. Grote [3] recently stated that the ideal PA should consist of a 4-step process: 1) Employee performance planning where the manager meets with each employee for an hour at the beginning of the year to discuss goals for the year. or 4) performance management with job performance appraisal a part of it [1]. To accomplish this we need to understand the terminology in the field (define PA). 2) an interview where an employee's job performance is assessed and feedback is given to the employee. 2) those involved with PA. Performance appraisal has been said to be “one of six deadly diseases” that keep organizations from performing at their peak [7]. Kondrasuk. add. Dillon.

1. 4) adding an appraisal category. They also suggested that there should be more rewards for appropriately using the PA system. Thomas and Bretz [8] suggested that managers and subordinates both be more involved in the development of the general PA system/process as well as the PA forms used. 3) appraising that employee’s job performance. Those as well as some others listed here should be employed if possible. They set a date to reconvene to set next year’s goals/start the process over and set individual improvement plans. it has often been recommended that the appraisers be trained in the process of appraisal. and periodically and continually auditing/reviewing the effectiveness of the PA system. have even developed mathematical approaches to comparing and selecting the best PA technique to use in given circumstances. it is more likely to get input from 189 . and legal (especially regarding EEO requirements). there are six additional aspects where important changes could be made to produce a more “ideal” performance appraisal system. 4) reviewing the appraisal process. At the middle of the year. measurable expectations that are as free from biases as possible. This learning should never stop. Those aspects are: 1) Performing the changes recently recommended. specific. the HR specialist can better convey the corporation's culture and values as well as the legal aspects of PA. Present employees should go through refresher training annually to brush up or learn new and improved elements of the PA process. reduce biases in appraising employees. 4) Employee PA interview where the manager meets with the appraisee for an hour to discuss the manager’s appraisal. In fact. like Jafari. Perform the Changes Recently Recommended Recent articles recommend improvements to conduct PA such as those mentioned above. New employees should also be trained in PA as part of their corporate orientation. Strive for clear. For instance. There is also unanimity among authors that the ideal PA should be pragmatic. This way the manager can have more motivation and more skills to do a better job of appraising her subordinates’ job performances. should be required to participate in PA training. However. A strong emphasis is being placed on better training of those involved in the PA system. Other authors have recommended trying to produce more measurable goals to begin with. 5) properly timing the PA process. and 5) continuing the cycle of steps 1-4. Use evidence-based techniques that are shown by quality research to be valid and reliable. some. Bourouni. Regarding what is measured and how. All managers who currently perform performance appraisals. & Amiri [4]. 3) Employee performance assessment where the manager fills out the PA form and discusses it with his boss before discussing it with the subordinate. ENHANCEMENTS TO THE IDEAL PA To have an “Ideal Performance Appraisal System” it is assumed that many present performance appraisal (PA) system components should be retained in general. the subordinate’s self-appraisal. cost-effective. the manager and subordinate meet to discuss progress toward achieving those goals. give more frequent feedback on performance to the operating employee. and how to improve. With the greater use of computerization. The components to retain are 1) establishing expectations for employee performance. and 6) involving more constituencies in the process. 2) clarifying the goals and role of performance appraisal.execution where the employee performs his job and seeks to achieve his established goals. 2) allowing the employee the resources to perform the job. regarding who does the measuring--the evaluator. 3) focusing on both results and behaviors. A trained HR specialist should conduct the training programs. or any who would potentially do so.

Many years ago it was asserted that organizations typically try to concurrently achieve two goals in their PA’s which produces a conflict and less than ideal results. the appraisee tends to selectively hide potentially damaging information that could hurt his being judged highly but tends to openly state weaknesses that could be rectified when the appraiser is acting as a counselor. The appraiser must act as a judge in the former and a guide/counselor in the latter. Make sure that users of the PA system are rewarded for properly/accurately conducting the PA system and applying the results. understand. the ideal PA system could refer to a specific instrument. Organizations seek to use the PA to a) make administrative decisions (such as whether to fire/retain/promote. This separation also 190 . the ideal PA system must be practical in the sense that it is easy to use. This could include daily progress reports/feedback sessions between supervisor and subordinate(s). We need to clarify the purpose of the PA system. Clarifying the Goals of Performance Appraisal As stated previously.) and b) improve employee performance (by learning the shortcomings of the employee and seek to help the employee improve in those areas). Have PA manuals (preferably online) available for further review and as-needed information. the level of pay increase. It should be clear when the appraiser is evaluating the evaluatee on administrative standards (tied to organization goals) or on developmental goals (tied to what the employee personally wants to achieve in that work setting). It is very difficult to be a judge and counselor at the same time. Also have specialists from the human resource department (HR) review the PA results for the same reason and to pick up biases [7]. 2. or performance management. and administer. Many have recommended that there be more training of appraisers on how to appraise and how to use the results. the PA interview. meeting standards gets a 3 % raise while exceeding standards obtains a 6 % pay increase. the top management of the organization. etc. assess the evaluatee’s job performance on a more frequent basis—continuously if possible. It must be useful for making decisions. Responses to different achievement levels should also be relatively standardized. training needs. It is very important to realize that the ideal PA system is a format (process) and not a form (specific instrument). The first is a judicial process where the latter is a counseling process. We have chosen to focus on PA as a system as described above. a PA system. So there are conflicts within both the appraiser and the appraisee in a typical PA. Have the performance appraisals flow through the total organization including. and it must be cost effective. For example. The proposed best way to deal with these conflicts is to clearly separate the two goals (administrative and developmental) so that both the appraisee and the appraiser know when each purpose is occurring.additional sources (e. It has also been recommended that all PA’s be conducted at the same time in the calendar year—not on each employee’s anniversary date—to be more consistent in standards used for judgment. 360-degree feedback) for a more well-rounded and accurate view of the appraisee’s job performance. Make sure that audits of the PA system are conducted—that the system is reviewed frequently to spot problems and to make improvements. But as with any other area of PA. g. and having support from. Regarding the process of the PA system. On the other side of the desk. Make the PA system clear and relatively easy to perform so appraisers are not overwhelmed and over-extended.

has implications for the training of appraisers; they should be trained in how to be a good counselor as well as a good evaluator. 3. Focus on Both Results and Behaviors Appraisals As some have previously stated, if we assess both objective aspects like results and subjective aspects like attitudes, we get a fuller picture of the employee’s performance. Likewise, if we assess both specific end results and also the process/behaviors that led to the results, we get a fuller picture of the employee’s performance. But let’s take that another step further. If we go back to the basic goals of the PA, we start with goals of making administrative decisions and improving employee performance. Now let’s separate those two goals and tie them into the results and process dimensions. If our goal is to make better administrative decisions (e.g. regarding employee retention and promotion, compensation, training), focus on objective appraisals like performance results. If the goal is to develop the employee and improve that employee’s job performance, focus on the subjective/process elements. Administrative decisions, such as employee termination, should and often are legally required to be based on objective data—not subjective opinions. The number of items produced or sold, the revenues or profits obtained, even the number of hours worked to achieve the end result are all objective results and can be defended to the employee or the judge/jury in a court setting. However, when we talk about improving an employee’s performance, we tend to take the objective results as givens and focus on what the employee could do differently; the employee must behave differently to achieve different (better) results. Doing the same thing (behaviors) should get the same results (less than perfect performance results). So to improve job performance, the behaviors (and their motivation, attitude, etc.) should be changed. The employee should do something differently/behave better to get better objective results. 4. Adding an Appraisal Category Changing job behaviors may not always be the most efficacious move to make to increase job performance. We assume that if the employee changes/improves his job performance behaviors, that his job performance results will improve. However, that assumption misses one very important ingredient of job performance—the situation. If the economy deteriorates or the salesperson is suddenly assigned a territory with a dearth of prospects or the engineer’s computer breaks down or the store check-out clerk has vastly fewer customers, the job performance will diminish in all cases even if the employee adds job skills and increases her motivation to perform better. Consequently, the ideal PA must measure the situation—the opportunity to perform and the organization’s support to perform well. As to how to assess the appraisee’s situation, one could look at the instrument to assess the situation in Fiedler’s [2] contingency theory of leadership. His “situation favorableness” assessment instrument is not necessarily a panacea to measure the situation for performance appraisals, but it can be a starting point for developing such an instrument. 5. Timing and Arrangement of the Process An important aspect in developing the ideal PA system is the timing and arrangement of the elements in the process. The typical PA has been conducted by setting goals with each employee at the beginning of the year. This is laborious and also contentious as the typical 191

conflicting appraiser PA goals of guiding and judging cause the skeptical appraisee to withhold information and resist suggestions or demands by the evaluator for the evaluate to list certain goals. Since the supervisor, at whatever level, tends to meet with each subordinate one at a time and each session averages about an hour, it is very time consuming. Considering that the supervisor has other responsibilities to attend to such as producing products or services for customers, PA interviews can be drawn out over lengthy periods of time. Likewise at the end of the period when the supervisor sits down with the evaluatee to discuss the annual or semi-annual appraisal of the employee’s performance, that also takes a great deal of time and has even more subordinate resistance whenever the employee is judged for administrative decisions such as pay raises or promotions. After all, the average employee believes he is above average—or at least 75% of the employees believe they are above average. So how do we deal with these challenges? To alleviate some of these aforementioned problems, it is recommended that the PA be split into two parts with quick decisions being made regarding administrative decisions at the front end in setting the standards for the position for the year (or other time period) and at the end where the PA is done based on achieving the standards based on objective (measurable) results) and subjective (process, behaviors) evaluations. This will reduce the “limbo” time between ending one period and starting another as well as increase the consistency of evaluations across appraises. Then take more time to establish the developmental goals at the beginning and the end-appraisal of individual goal achievement at the end of the period. The discussions of extent of goal achievement are to help the subordinate look at how to meet his personal goals (e.g. be rated ”excellent”) for improving his work performance (e.g. sell more widgets) to achieve what he wants to on the job (e.g. be promoted to manager). The supervisor does not have to act as a nasty judge because all administrative decisions have already been made. The supervisor can focus on helping the self-motivated subordinate achieve her personal goals-- what she wants to accomplish—and increase the job performance of that employee. Focusing on employee goals encourages more involvement and engagement of the employee—thus increasing employee motivation to do the work on the job. 6. Involve More Constituencies in the Process The more people that are involved, the more chances for better ideas and fewer mistakes— to a point. If more sources can make suggestions to improve the job standards and goals, they should be “better” standards and goals—more accurate, more challenging, more measurable, etc. Therefore, besides the supervisor and the subordinate(s) developing the goals, reviewing it by specialists in the organization’s human resource department (someone who knows the qualities required to write good objectives and who has a systemwide view of what needs to be done and what others are doing) should result in “better” employee goals. Also, at the other (performance appraisal) end, having input from others (basically a 360-degree appraisal) should give a more complete picture of the actual achievements in comparison with the expectations of what to accomplish (the goals, standards). Getting evaluations toward the standards and goals from the supervisor and self-evaluations from the subordinate are routine. Getting evaluations from interacting and knowledgeable peers and the subordinate’s subordinates have been recommended. It is also recommended to get assessments from the subordinate’s customers. Even with all of these recommendations for changes to improve the PA, it is still questionable if it will work in all situations for all people. Can the same, ideal PA be 192

applied the same way in all situations? Will there still be problems with different appraisers, evaluatees, jobs and levels of jobs, companies, sizes of organizations, types (public and private; local, regional, national, international), industries, geographical locations, cultures, countries? Many questions still remain unanswered. More will be known about that after these suggestions are applied and further research is conducted. CONCLUSION The ideal PA system is a format, not a form. It is a process that involves setting expectations (of the supervisor and subordinate), having the subordinate perform to achieve the expectations, of appraising and feeding back the results, and applying the results of the assessment in ways that benefit the organization, the supervisor, and the subordinate involved. Remember that the ideal PA system has two separate purposes (administrative and developmental)—which must be separated and not attempted to be achieved simultaneously. It appraises both standards applied to many as well as goals applied uniquely to each individual. Administrative decisions, based on standards and objective results, should be made first and quickly; Developmental aspects, based on individual goals, are made later and take more time. Both assess objective and subjective aspects of the employee’s job performance. The appraisal considers the appraisee’s skills and motivation within the context of a changing job situation to judge the appraisee’s job performance. The process and techniques applied are based on evidence-based management that applies valid and reliable approaches. Implementation of the ideal performance appraisal may not be feasible, or possible, for all organizations. But for those who can and do use the PA system proposed herein, it should be an improvement. REFERENCES [1] Dessler, Gary. (2011). .Human Resource Management. 12th ed., Upper Saddle River: Pearson Education Inc. [2] Fiedler, F. E., Chemers, M. M., and Mahar, L. (1977). Improving Leadership Effectiveness: The Leader-Match Concept. New York: Wiley. [3] Grote, Dick (2010). Employee performance appraisal—An ideal system. Buzzle.com, Retrieved 7 April 2000 at http://www.buzzle.com/articles/employee-performance-appraisalideal-system.html. [4] Jafari, Mostafa, Bourouni, Atieh, and Amiri, Roozbeh Hesam. (2009). A new framework for selection of the best performance appraisal method. European Journal of Social Sciences, 7 (3), 92-100. [5] Kondrasuk, J. N.; Crowell, Emi; Dillon, Kelly; Kilzer, Steven; & Teeley, Jarad (2008). Appraising performance appraisal: The problems. Proceedings of the 16th International Conference 2008 of the Association on Employment Practices and Principles, Chicago, IL. [6] McGrath, Chris (2010). Integrated organizational performance management. The Industrial-Organizational Psychologist. 47 (3), 17-19. [7] Staff of Employee Recruitment & Retention (January, 2010). Performance appraisals: Improve the process and avoid the problems. Employee Recruitment & Retention, Retrieved April 12, 2010 from http://www.managementresources.com/ME2/Sites/dirmod.asp?sid=&nm=&type =Publishing&mod=Publications::Article&mid=8F3A7027421841978F18BE895 F87F791&SiteID=473418383454426DA53DD03044F159BD&tier=4&id=5C3C 747F192D44528E2412F439748CA7. 193

[8] Thomas, S. L., and Bretz, R.D., Jr. (1994). Research and practice in performance appraisal: Evaluating employee performance in America’s largest companies. SAM Advanced Management Journal, Spring, 59(2), pp. 28-34 Special thanks to the following University of Portland students for their help in developing this paper: Emi Crowell, Kelly Dillon, Steven Kilze, and Jared Teeley.

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FACILITATING WORKFORCE ADAPTATION TO CHANGING GLOBAL WORK REALITIES Mitchell Lee Marks Department of Management San Francisco State University San Francisco, CA 94132 (415) 817-4343 marks@sfsu.edu

ABSTRACT One outcome of the global economic crisis has been a sharp increase in the number of downsizings, restructurings, mergers, acquisitions and other organizational transitions. Mismanaged transitions have unintended negative consequences on organizations and their members. Ironically, the characteristic of transitions that prompts individual and organizational strife—the capacity to disrupt the status quo—also enables an opportunity for organization and individual renewal. This presentation provides a framework for facilitating adaptation to organizational transition, to both overcome the unintended consequences of transitions and to accelerate achievement of the transition’s strategic objectives. Keywords: Transition, mergers, acquisitions, restructurings, downsizings. FACILITATING WORKFORCE ADAPTATION TO CHANGING GLOBAL WORK REALITIES Studies consistently show that, in the aftermath of transitions involving layoffs, survivors’ job attitudes such as job satisfaction, job involvement, organizational commitment, and intention to remain with the organization become more negative (Hallier & Lyon, 1996). Organizational trust falls (Cascio, 1993), while fear increases (Buch & Aldridge, 1991). Layoff survivor sickness has been well documented, including symptoms ranging from job insecurity, feelings of unfairness, depression, stress and fatigue to reduced risk-taking, lessened motivation, distrust and betrayal, and lack of management credibility, (Brockner, 1992). The unintended consequences of mismanaged transitions are manifested behaviorally as well as attitudinally. Staw, Sandelands & Dutton (1992) note that under conditions of threat, an event or situation which individuals or groups perceive as having negative or harmful consequences (e.g., downsizing), organizations undergo a “mechanistic shift” (p. 516) and centralize information, restrict communication, and rely on habitual responses that are likely to be dysfunctional. More specific to downsizings, mergers, and other major transitions, studies have shown that organizational communication deteriorates (Dougherty & Bowman, 1995) and managerial rigidity increases (Cameron, Sutton, & Whetton, 1987). In addition, employees who survive major transitions report a lack of direction in prioritizing work, risk avoidance, and increases in role ambiguity, political behavior, and work team dysfunction (Marks & DeMeuse, 2003). They also report working harder but not any more effectively— the workload doesn’t get smaller when the work force does (Greenberg, 1990). Adaptation Following Workplace Transitions 195

The capacity for a transition to disrupt the current equilibrium and jar people from their status quo—that is, to unfreeze them (Lewin, 1947)—also gives transitions the potential to be an impetus for renewal at both the organizational and individual levels. If properly managed, a transition can be used to replace outmoded organizational structures, cultures, and processes with new ones more consistent with emerging environmental conditions and competitive challenges. Concurrently, a transition can be a stimulus for helping individuals abandon attitudes, expectations and behaviors that may have been congruent with old workplace realities and identify and adopt new attitudes, expectations, and behaviors consistent with new global work realities. Despite this opportunity to spark renewal, research shows that “holding on” tends to predominate over “letting go” during and after transitions as organizations and their members tend to maintain the status quo during difficult times (Chattopadyhah, Glick, & Huber, 2001). Thus, employees are likely to experience real or perceived unintended consequence of transitions but not realize enhancements to their personal work situation or to overall organizational effectiveness. The Two Tasks and Two Levels of Facilitating Adaptation Progress through the adaptation process will occur only when people are prepared to relinquish what they hold dear for the purpose of acquiring something new or can find ways of carrying what they value in the old into the new. In the event that it does not exist naturally, it may be necessary for the organization to create transitional phenomena through planned interventions (Morgan, 1997). This would aid the letting go of attitudes, expectations, and behaviors appropriate to the pre-transition organization and adoption of attitudes, expectations, and behavior congruent with the post-transition organization. The forces for the old and for the new are varied and cover both the emotional realities and business imperatives associated with a transition or a series of transitions. Emotional realities are the ways in which people experience transition in the workplace. Research has shown that workplace transitions are always connected with emotional experiences (Kusstatscher & Cooper, 2005). Leaders who manage transition effectively rely on and cope with emotions by bringing them to the surface and understanding how they affect work activities and relationships as groups face challenges and organizational changes (Urch Druskat & Wolff, 2001). In the ending of the old phase, adaptation benefits from weakening emotional forces that individuals carry over with them from before the transition and that may be inadvertently generated during a mismanaged transition. In the accepting of the new phase, adaptation benefits from strengthening the emotional pull of the characteristics of the new organizational realities that motivate employees and attract their attention. Business imperatives comprise what needs to get done for business success to occur. These include everything from setting strategies to selecting work procedures, from patterns of communicating with people to ways of rewarding them. To facilitate ending the old, certain aspects of the organization should be abandoned or made less prominent—that is, the forces for their maintenance should be weakened. To strengthen forces for accepting the new, employees should understand not only what is changing, but also why the changes are being made and how those changes will contribute to both 196

Empathy facilitates adaptation by legitimizing employees’ responses to the transition. downsizing. raising their awareness of the adaptation process and accelerating the pace at which they move through it.business and personal success. or restructuring. Figure I A Framework for Facilitating Adaptation to Changing Global Work Realities Tasks Weakening the Old Levels Emotional Realities Business Imperatives Empathy The first element weakens emotional forces for holding on to the old by conveying empathy to employees regarding what they have experienced during a difficult transition. Empathy. 3. Energy. 2. and views of employees who have lived through a merger. 4. The objective of empathy is to make clear that leadership is cognizant of the needs. Sensemaking activities are particularly critical in dynamic and turbulent contexts. problems. acquisition. feelings. for at least awhile longer. Enforcement. This contributes to the social process of “organizational sensemaking” through which organization members interpret their environment through interactions with others and construct accounts that allow them to comprehend the world and act collectively (Weick. Letting people know leadership acknowledges that things have been difficult and. Engagement. 1996). where the need to create and maintain coherent understandings that sustain relationships and enable collective action is especially important and challenging (Gioia and Thomas. Creating understanding of and support for the need to end the old and accept new organizational realities. Solidifying new mental models that are congruent with the desired post-transition organization. A FRAMEWORK FOR FACILITATING ADAPTATION TO CHANGING GLOBAL WORK REALITIES The two tasks and two levels produce four elements for facilitating individual adaptation to workplace transitions brought on by changing global work realities (see Figure I): 1. Getting people excited about the new organizational realities and supporting them in realizing them. will continue to be difficult. Tannenbaum and Hanna (1985) have identified three steps in the process of holding on 197 EMPATHY ENGAGEMENT ENERGY ENFORCEMENT Strengthening the New . 1995).

meaningful. and the loss of what was once satisfying. Consciousness raising helps employees acknowledge what they are personally holding on to and become aware of their reasons for doing so. Letting go is completed through an active mourning of what is being left behind—old ways of seeing and doing things. Engagement The second element weakens forces for the status quo by engaging employees at an intellectual level in understanding the business imperatives associated with needing to end the old and by identifying and eliminating roadblocks to the adaptation process. fear. To aid in the reexperiencing step. Engaging employees directly or through representation has long been advocated as a method to help people contend with disruptions to their work situation (Coch & French. and frustration common in organizations during and after transitions (Krackhardt & Hanson. 2000). reexperiencing. distrust. anger. and frequent counters feelings of uncertainty. Engagement would seem especially pertinent to major transitions such as mergers and downsizings in which survivors experience a perceived lack of control over their fate (Marks & Mirvis. 1948). This mourning is sometimes accompanied by remorse—a sense of guilt for the time wasted. The reasons for and implications of holding on become truly understood only when they are expressed experientially. A carefully facilitated venting meeting can get people to open up in a supportive and safe environment. most employees find it difficult to express negative feelings at the workplace (Ciulla. Yet it also instills a sense of renewal and rebirth. researchers found that employees who were given a realistic assessment of the transition and insight into the adaptation process had less negative reactions in both job satisfaction scores and actual work productivity than employees who attended a workshop with a sanguine content (Schweiger & DeNisi. This is typically an emotional and highly charged process. organizations can sanction events in which employees vent their pent up anger and other negative feelings. vicariously listening to others express similar views is beneficial in weakening the negative emotions left over from living through a difficult transition (Marks. 1993). or simply familiar. the life that could have been but will never be. Effective top-down communication that is open. timely. 1991). However. 1993). and mourning—that provide a sequencing for activities to convey empathy. there is also a need to convey to employees the principal 198 . there has always been a recognized need for rituals to carry individuals form one phase of life to another (Morgan. Workshops or other learning interventions promote consciousness raising by educating employees on the difficulties of transitions and making the internal process of adaptation explicit to them. During difficult times. From the most primitive to the most modern cultures. Adaptation is facilitated through symbolic events. 2010). abandoned hopes and expectations. 2003b). Talking through where they have been and what they are currently experiencing as a result of the transition helps employees bring their feelings to a conscious level. like funerals or graduation ceremonies to mark the transition from ending the old to accepting the new (Gutknecht & Keys. and an acceptance for what lies ahead. 1997). in contrast to the more intellectual level at which initial consciousness raising occurs. Even for employees who do not speak up.and letting go—consciousness raising. One way to engage people is to communicate with them. In a study of an acquired manufacturing firm.

1997). they need something new to latch onto to direct their contributions in the workplace and continue progress through the adaptation process. This gives them a distorted picture of progress and false assurance that problems will pass so long as they stay the present course. The potential negative effects of high demands were counterbalanced by an engagement strategy that enhanced work characteristics including clarity and participation. & Wall. perceived or real. Pederit (2000) suggests that. there were significant increases in both employee productivity and employee well-being despite an increase in demands placed on the survivors (Parker. This addresses key unintended consequences of a difficult transition in ways including renewing trust and breeding confidence that leadership has a plan for realizing new opportunities. But when they consult exclusively with their peers and direct reports. 1998). employees may be more ambivalent to change rather than outright resistant to it. Common employee research methods such as attitude surveys and focus group interviews can be used to identify barriers to letting go. in most work settings. As organizational members come to terms with ending the accustomed old. which typically is all they have time for during and after transition. for example. & Gioja. A starting point for generating energy is a clear sense of strategic direction and a compelling mission for the organization. Millemann. 1997). These barriers may range from structural issues like narrow job categories that undermine efforts to adopt new approaches to getting work done to the political power bases of superiors who refuse to change themselves and who downplay the requirements of adaptation or the need to rebuild relationships. Shared commitment to a vision can be built either through wide-scale participation in the act of its creation or through involvement immediately thereafter in its dissemination. Comprehending the vision also counters the decreases in sense of direction. 2010). especially when numbed by constant and on-going change and transition. a clear vision of a new and better organization (Kotter. Despite being a natural and healthy response to transition. the human adaptation process is rarely facilitated. Chmiel. It is likely that many forces inhibiting the letting go process are present in the work environment. In a four-year longitudinal study of survivors of a downsizing in which a full 40% of the workforce was eliminated.business challenges facing the organization and to involve them in addressing those challenges (Pascale. 2005). 1995). Energy The third element strengthens forces for desired change by generating energy for its attainment. that employees feel are hindering their progression. let alone acknowledged. risk taking and innovation that typically accompany major organizational transitions 199 . what managers hear is often censored and self-serving (Marks & Mirvis. Employee engagement also is useful for weakening forces inhibiting the adaptation process itself. This occurs on an emotional level by getting people excited about the prospects of the post-transition organization and reviving their confidence in themselves and their workplace. Participation gives survivors a sense of control over their destinies and a means of influencing events that heretofore had been seen as threats to their livelihood and well-being (Graddick & Cairo. It also prevents them from speeding up the adaptation process by identifying and eliminating barriers. Employee participation in matters directly related to their work situation also weakens forces against ending the old and helps movement through the adaptation process. that is. Leaders frequently think they know what is going well and what is not during and after transitions (Marks & Baitch.

Thus. a component of generating and sustaining energy would be to set expectations with middle managers and lower level supervisors to be sources of emotional as well as practical support for employees. Trial-and-error is a powerful way to learn. This occurs. 2003). should be more likely to rebound from a difficult transition with innovative approaches to getting work done and an energized work force looking forward to new realities rather than holding onto the old. 2001). A second component of enforcement is to align the various components of the post200 . Pursar & Petranker (2005) note that transformational change occurs when a critical mass of people can actually "live the vision" in everyday organizational life. and workplace behaviors that are congruent with the desired post-transition organization. and measurement. Enforcement The fourth element solidifies perceptions. by linking individual roles and responsibilities with the new vision and business strategy (Burke. rational planning in order to avoid uncertainty. accept the confusion and backsliding as normal and give their people time to move through the natural adaptation process. Enforcement brings the momentum for desired change to the level of consistency required for true cognitive and cultural change (Cartwright & McCarthy. sustaining the energy for moving forward is enhanced by developing a learning environment in which employees can experiment with and deliberate the value of new approaches to achieving personal and organizational success. 1991). expectations. & Huber. alignment. Abandoning old routines and then identifying and adopting new approaches to work require trial-and-error learning in the neutral zone between the old and the new (Bridges. One way to do this—both because they know the work and because involving them in problem analysis generates ownership of solutions—is to have employees participate in bringing the desire post-transition organization to life. but only after the constricting structures of the old organization have been unfrozen and people—as well as their time and other resources—are freed up to dream. 2005). Thus. It complements the emotional base of energy by supporting people on a practical level in conducting work and. think about. and enliven the post-transition organization. The literature on large scale organizational change suggests three components of enforcement—involvement. provide emotional support. 1995. Glick. this support would be most beneficial coming from immediate superiors (Larkin & Larkin. in particular. Involvement also can contribute to strengthening forces for the new. With research showing that managers and supervisors having more impact on shaping employees’ reactions to a transition than senior executives. Workplaces having leaders and managers who connect with their people. 2002).(Chattopadyhah. not by engaging in detached. Marks (2003a) describes a process for living the vision which builds upon senior leadership’s vision and strategic direction for the post-transition organization. however. Involvement is a basic component of organizational change management (Kotter. Burke. but also a painful way to learn—relatively few organizations reward employees for raising up and discussing their errors. and its role in weakening forces for the status has been discussed. 1996).

quality. or when it receives legal approval from regulators?) or is “over. IMPLICATIONS FOR RESEARCH AND PRACTICE The framework presented here guides both research and action in facilitating the process of individual adaptation to workplace transitions brought on by changing global work realities. gaining access to workplace approaching. However. have the added benefits of involving people and enhancing upward and downward communication. However.transition organization. This seems especially important when the newly espoused vision includes intentions to increase involvement and communication. or designing and delivering management development interventions may have been downsized from the organization.” 201 . Collecting valid data and monitoring the extent to which the desired organization is truly being realized—that is. given that even the most carefully planned and successfully implemented transitions like mergers and acquisitions are characterized by flexibility and mid-course corrections (Marks & Mirvis.g. Some methods for tracking the development of the desired new organization are objective (e. facilitating group effectiveness. some elements of the organization typically lag behind others as transition unfolds. This is important. On-going periodic measurements also alert leadership to when things are veering off course. The four elements of empathy. and voluntary turnover). there are many methodological dilemmas when studying transitions such as when a merger “begins” (i. others. To begin. in the midst of. or recovering from a transition is difficult.. including its structure.e. and people. when it is announced.” Contributing to the difficulty of alignment following a difficult transition is that many of people who specialized in designing compensation systems. like attitude surveys and focus group interviews. energy. does a merger begin when it is planned. measures of productivity. Consistency compels people to accept new organizational realities and abandon old perceptions or expectations. A compensation system that punishes team leaders for short-term declines in productivity when they experiment with new ways of approaching work will not sustain a CEO’s vision of “innovation. And. tasks.” Boring staff meetings plagued by dysfunctional group dynamics will not contribute a desired culture of “teamwork and respect. The basis of the model—the need to weaken forces for the old organizational order and strengthen forces for the new organizational order at both the emotional and intellectual levels—has solid conceptual support through enduring models of organizational change management as well as anecdotal support through practitioner reports.. the extent to which forces for maintaining the old are being weakened and forces for developing the new are being strengthened— provides the foundation for feedback to all organizational members. researchers seeking to study organizational transitions face some substantial hurdles. A third way to enforce the desired post-transition organization is to measure and track its development. culture. 2010). engagement.” Managers and supervisors who feel their authority is undermined by involving rank and file employees in determining how to approach work will sabotage a process like “living the vision. and enforcement—along with their component activities—should direct empirical inquiry into factors that can facilitate the natural adaptation process during and after major organizational transitions.

Facilitating the adaptation process should counter the many undesirable consequences of difficult transitions by focusing people on looking ahead and weakening their attachments to the “good old days” during pre-transition or “dark days” of the transition itself. it contributes to a sense of workplace stability in the ever changing global environment. downsizings. it also should contribute to building optimism for the future and strengthening attention to new ways of thinking and acting congruent with emerging global realities. acquisitions. in fact. essential if transitions are truly to be used by organizational leaders as vehicles for becoming more highly competitive and responsive to environmental demands and if employees are expected to adapt to changing global work realities. Given that poorly managed mergers.edu 202 . and restructurings have had a substantial negative impact on organizational effectiveness and employee well being. A formal effort to facilitate adaptation provides employees with a clear sense of where the organization is headed and how individual success can be achieved as that vision is attained. In addition to wringing out pent up emotions and loosening grips on the old ways. The pace of change and the intensity of major transitions are much more likely to increase rather than decrease globally. REFERENCES References are available upon request from Mitchell Lee Marks at marks@sfsu. And. the need to facilitate the natural adaptation seems substantial and.

Lefke. p. It is defined as an impassable wall or barrier made up of procedures.tr Tel: 90 (212) 440 0000 S. The study discusses the different factors that should be taken into account at analyzing the problem. 69). p. 416).Mersin/Turkey amentes@eul.tr Tel: 90 (392) 660 2000 Ext: 2795 ABSTRACT The detection of glass ceiling on boards of directors is an interesting issue because it provides a good opportunity to observe the obstacles confronted by women in the corporate world. structures. INTRODUCTION The term “glass ceiling” which indicates the obstacles confronted by women.edu.7). 203 .IS GLASS CEILING IN TURKEY THICKER THAN IT SEEMS? A STUDY ON ISE 100 (ISTANBUL STOCK EXCHANGE) Zeynep Duren Istanbul University Faculty of Social Sciences Beyazit-Istanbul/ Turkey zeyduren@istanbul. Ownership Concentration. p. the portion of female board members is 10. In 1995. beliefs or habits that complicate a woman’s access to high directive positions (Powell & Butterfield 1994. As of 2009. assuming that the intensity of glass ceiling problem in Turkey is not any worse than in Europe can be misleading. Board of Directors. power relations.S.edu. Ahmet Menteş European University of Lefke Department of Business Administration Gemikonagı. Culture I. Department of Labor's Glass Ceiling Commission issued a report saying: “a glass ceiling exists and that it operates substantially to exclude minorities and women from top levels of management"(United States Department of Labor 1995. The descriptive study analyzes ISE100 firms for the period of 2002-2009. Although the averages are close. who aim for the senior management positions in various organizations was introduced by Hymowitz and Schellhardt at a Wall Street Journal report in 1986. Keywords: Glass Ceiling.07% which is close to EU average. the U. A vast number of articles have dealt the issue and found that the glass ceiling exists in executive market (Duleep & Sanders 1994.

The Turkish society has traditionally relegated women to a secondary role in the labor market.3 2008 64. the weakening and cracking glass ceiling is not just a false hope. but has some substance (Hu & Yun 2008. Families are not only the controlling shareholders.4 2005 62. This study mainly discusses and evaluates the change in female presence in boards of ISE100 firms and analyzes the developments experienced for the period of 2002 to 2009.4 65. researchers are optimistic and conclude that.6 61.7 59.1 2004 62.2 2007 63.7 204 . The low rate of women’s participation in labor force in Turkey looks more alarming when compared to positive trends witnessed in EU. p. It is obvious that in societies that have relegated women to secondary role the presence of glass ceiling will be more evident. but they also are very involved with the management of the family firms. 10).8 66. The evidence shows that. studying women’s presence on boards of directors is especially interesting because board of directors represents the last step (the peak) in a professional career and a good opportunity to quantify the obstacles confronted by women (glass ceiling) in the corporate world. Family members hold the key management positions. 211).3 60. They find the participation of female executives at Standard & Poor’s firms has been growing dramatically through the period 1992-1997 and point out that female's increasing access to larger firms is the main reason for the cracking glass ceiling (Bertrand & Hallock 2001. The study will give a special emphasis to the females on boards of directors who are members of the controlling shareholder of the family firm.7 60. p.1 65. Judging from relative compensation and increasing female representation in the top rung in the executive market. Table I: Female Labor Force Participation Rates EU OECD Major Seven 2002 60. women’s participation in the labor market is not only low but also has a decreasing trend in Turkey. It is not a surprise that female members of the families will hold executive positions.1 60.3 66. board memberships and CEO positions in the family firms (Yurtoglu 2000.3). Within this context.2 61. A distinguishing feature of Turkish firms is the fact that they are mostly owned by families.7 65.6 65. though not as fast and widespread as hoped. The presence and the perception of women’s role in business life differ from one culture to another.0 2003 61. ANALYSIS AND IMPLICATIONS OF THE LOW PRESENTATION OF FEMALES ON THE BOARDS OF DIRECTORS OF TURKISH FIRMS.2 59. This is really important because the change in number of female board members who are also the members of the controlling shareholder family may give us more insight about the changing management culture in Turkish firms.Bertrand and Hallock conclude that the glass ceiling is cracking in the executive market. II.1 66. p. OECD and other countries (Table I).7 2006 63.

p. In taste based discrimination employers have a ‘taste for discrimination. Women and girls continue to lag behind men and boys at all levels of education and that significant discrepancies exist in the literacy levels of women and men (CEDAW 2005. p. identifying their causes is a key issue.5 Bureu.7 tables https://www. the situation in the private sector is far from satisfactory. 28. the firms that failed to report the required data or have missing information at 205 . by favoring competency and career based skills.S. in the Turkish labor market. The low women’s representation on Turkish boards of directors can be considered as an indicator that.33).xls Census 29. 5).17).1 27.gov/compendia/statab/2010/ There are many reasons for the low rate of women participation to labor market in Turkey. pregnant or have children may be denied employment and face discrimination in promotion or access to in-service trainings. Statistical discrimination differs from taste-based discrimination in assuming no prejudice by employer or employee. Hence. In theory there are two types of discrimination. p. there must be some kinds of discrimination. The persisting patriarchal values and unfavorable economic conditions adversely affect the educational status of girls. /10s1330. p.’ which means that there is a disamenity value to employing minority workers (women in our case). In 1999. by accepting a lower wage for same level of productivity. Also. Phelps and Arrow have concantrated on the statistical theory of discrimination (Phelps 1972. national regulations establishing objective criteria for promotion of governmental employees for lower and middle level management was adopted in Turkey. minority workers may have to ‘compensate’ employers by being more productive at a given salary or. These measures. ISE 100 firms for the period of 2002-2009 are used for the study. However.83). The statistical discrimination literature has the assumption that firms have limited information about the skills of job applicants. There are no effective regulatory mechanisms other than that of an investigation upon a complaint (CEDAW 2003. It treats two groups of workers differently may be the rational response of employers to uncertainty about the individual's productivity.7 25. have been effective in preventing and gender discrimination in promotions. It is often almost impossible to identify statistical discrimination versus taste-based discrimination (Grout et al 2009. These are taste based discrimination and statistical discrimination.census.Turkey Source: U. The firms that dropped out of ISE 100 for the period covered are excluded from the study. In this paper. because the type of existing discrimination would provide different conclusions about how to obtain a greater presence of women on the boards and even about whether it is actually desirable to increase their presence. equivalently.0 26.7 26. Research reveals that women who are married.5 26. In fact. Becker’s 1957 book introduced the taste based discrimination (Becker 1957). the intensity of the glass ceiling problem and the evaluation of this problem in recent years in Turkey is discovered.

After excluding the firms that do not fit the criteria the number of firms that will be included in the study are 88.68 8.74 9.imkb. There are tradeoffs associated with different board sizes. The descriptive statistics of the firms are given at the table below (Table II).77 10. On the other hand. p.68 8.07%) in the period of 2002 to 2009. The average size of Turkish board is smaller compared to European average board size which is 11. Although the average size of Turkish boards are in line with Jensen’s reccommendations the reason behind the comperative smaller size of Turkish boards is closely related with the high ownership concentration of Turkish firms.68 8. This information is valuable for both the advisory and monitoring functions of boards.77% 43 34 11 2008 693 7.89 0. they are less likely to function effectively and are easier for the CEO to control (Jensen 1994.60 0. the major disadvantages of large boards are the coordination costs and free rider problems (Lehn et al 2003. and so forth.01 0. A more careful look at the figures reveal the fact that this is mostly due to a decrease in the number of firms that have no female directors on their board of directors (the number of firms that have no females on their board decreased from 55 to 40 by year 2009). such as product markets. 15).5% (from 7. The major advantage of large boards is the collective information that the board possesses about factors that affect the value of firms.4).66 8.ISE web site (http://www.60 to 7.65% 44 33 11 2007 684 7. Average size of Turkish BOD (Board of Directors) has showed an immaterial increase from 7. p.23 % 48 27 13 2006 694 7.73 % 46 28 14 2005 705 8.47% 55 22 11 2003 673 7.17% 51 24 13 2004 687 7.57 7. p.65 0.81 0. In other words.07% 40 34 14 Source: By the authors. Table II: Descriptive Statistics for the Boards of Directors of ISE 100 firms 2002 Size of BODs Average number of directors Average number of female directors % of female directors Number of firms without female directors Number of firms with one female director Number of firms with multiple female directors 669 7.6 (Heidrick & Struggles 2009a.77 0. 19).67 0. The size of boards is a contreversial issue. technology. It is clearly observable from Table II that the percentage of female board members has increased almost 2. When boards exceed seven or eight people.67.38% 42 32 14 2009 675 7. Jensen argues that keeping boards small can help improve their performance.63 8. the numbers of firms that have one female on their boards of directors have increased from 22 to 34 and the 206 .62% to 10.88 0. mergers and acquisitions.tr) are not included to study.gov. regulation.

2 154. Table III shows that of 68 female board members in 2009. Both of findings are very close to the findings of this study which calculates the presence of female on Turkish boards as 10.5 107.8 129.7 119. Table III: Composition of Female Board Members 2002 50 2003 55 2004 60 2005 58 2006 60 2007 60 2008 65 2009 68 Total Index to 2002 # of Family Member Female Index to 2002 # of Non Family Member Female Index to 2002 100.0 116. Female board members that have the same last name with the controlling shareholder are assumed to be the family member of the controlling shareholder.0 130. p.2% indexed to year 2002.2 120.2% increase when indexed to year 2002.3 137. This figure jumped to 37 in year 2009 which represent a 54. 207 .2 154.5 129.0 110. unfavorable economic conditions adversely affect the educational status of girls and female labor force participation rates are very low. In year 2002 only 24 of the females sitting at the board of directors were non family members.2 111. Yearly composition of female board members is given at Table III. The last names of female board members are used to identify their relationship with the controlling shareholder. 5). Heidrick & Struggles report calculate the female presence on European boards average 10 %.0 120.2 Source: By the authors. For a country like Turkey where patriarchal values persist.5 24 32 103.8 103.8 119. The Turkey supplement of the same report calculates the female presence on Turkish boards as 8% (Heidrick & Struggles 2009b.0 26 23 27 27 31 29 28 31 100. The reasons behind this unexpected result are discovered and analyzed in this study. The kinship of female board members to the controlling shareholder is suspected to be the potential reason behind the unexpectedly high female presence on the boards Turkish firms (compared to EU average). On the other hand the number of family member board members increased from 26 to 31 which constitutes an increase of 19.07% (Table II). 31 are the members of controlling shareholder families and that figure constitutes to 45% (52% in 2002) of all female board members.0 120.number of firms that have more than (multiple) female directors have increased from 11 to 14. having almost the same percentage of female presence on boards is unexpected and surprising.0 133.2 33 31 29 31 37 37 100.0 88.0 136.0 120.

66). This can be considered as an indicator of the reduction of the so-called statistical discrimination since. those companies in which the shareholders have great power when hiring directors. quicklearner personality” is far from explanatory (Heidrick & Struggles 2009b. The society fosters strong 208 . The concentration of ownership of shares in the largest public companies is negatively related to investor protections (La Porta et al 1998. might influence a country’s choice of corporate law. women seem to be less exposed to being judged according to the average characteristics of their group (Mateos de Cabo et al 2007. the optimal ownership structure obliges families to hold large equity stakes (Himmelberg et al 2002. cohesive in-groups. p. Licht and others find empirical evidence that corporate laws related with investor protection exhibit systematic cultural characteristics (Bebchuk & Roe 1997. p. holding companies had direct ownership stakes in most of the companies and pyramidal structures were common (Yurtoglu 2000. p. p. The highest proportions of female directors are found in family-owned firms. There are numerous studies that observed that equity ownership in Turkish firms is highly concentrated. An investor in a French civil law country is poorly protected by both the laws and the system that enforces them. In countries like Turkey where investor protections are ostensibly weaker. in general. explaining this with an argument such as “reduction of statistical discrimination” or “ highlight of Turkey’s open-minded. cooperatives and. Loyalty in a collectivist culture is extremely important and over-rides most other societal rules and regulations. not only value maximization and self-interest. p. (La Porta et al 2000. p. 8).37. Legal System and Ownership Structure: Common law countries have the strongest protection of investors (both shareholders and creditors) whreas French civil law countries like Turkey have the weakest protection. It is also known that the family members have a heavy presence not only on the board of directors but also at critical management positions of these firms (Ararat & Ugur 2003. p. In Turkey families hold the control and the ultimate ownership of the firms using these pyramidal structures called holding companies. as the company has easier access to individual information about the board candidates. 1141). 6). p. 38).Some researchers try to explain the existence of female family members on boards by reduction of statistical discrimination. p. Licht et al 2001. Culture: Culture and ideology. ownership structure and culture are believed to be the main reasons of the heavy presence of female family members in Turkish boards. Although the figures show that the presence of female board members in ISE100 firms is proportionaly very close to European avarage of 10%. 2). 3). Hofstede’s study on dimensions of culture classify Turkey as a highly collectivist culture. Factors like legal system. In other words. In collectivist societies people from birth onwards are integrated into strong. weak investor protection causes ownership concentration. 216).

These factors are legal system. Studying women’s presence on boards of directors is especially interesting because board of directors represents the last step (the peak) in a professional career and a good opportunity to quantify the obstacles confronted by women (glass ceiling) in the corporate world.relationships where everyone takes responsibility for fellow members of their group (like family) (Hofstede.edu.com).tr.Lefke. Assuming that the glass ceiling problem in Turkey is not any worse than EU. The composition of female board members reveals the fact that as of 2009 almost 45% of the female board members are also the members of the controlling shareholder family. European University of Lefke. Department of Business Administration.geert-hofstede. If there exists a glass ceiling. The findings definitely show a progress in the pathway for cracking the glass ceiling and extinguishing the gender discrimination in boards of directors.com. it will definitely affect the representation of females in the board of directors. The findings for Turkey clearly exhibit that the presence of women on Turkish boards has increased 36% for the period of 2002-2009. Loyalty as a dominant future of collectivist cultures is one of the most important explanatory factors of the dominant presence of family members on company boards and at other executive positions of Turkish firms. Tel: 90 (392) 660 2000 Ext: 2795 209 . The heavy presence of female board members who are also the members of the controlling shareholder family can be explained by three factors. Increased foreign direct investment is also expected to change the management culture and organizational dynamics of Turkish firms. by only comparing the yearly figures can be misleading. Using this type of headcount approach may cause us to misjudge about the density of glass ceiling problem in Turkey. The study analyzes the presence of women on Turkish boards. Gemikonagı. It is obvious that there is still a long way ahead before gender equality is achieved and the glass ceiling is removed in the Turkish executive market. Increasing merger and acquisition activity caused by globalization has and will play an important role in cracking the glass ceiling in Turkey.Mersin/Turkey amentes@eul. www. ownership structure and culture. Ahmet Menteş. References available upon request from S. The findings exhibit that the percentage of women on Turkish boards are very close to that of EU. III. ahmetmentes@yahoo. CONCULUSION The glass ceiling is a barrier against women's advancement into the top rung in the highpaying and high-skill labor market.

an ageing population coupled with a more skill-dependent economy dictates countries to make better use of their female population. 2010). 19 % in Spain. there is a relatively small number of sectors where women entrepreneurs are concentrated (Aslesen. Findings indicate that major motivating factors driving Turkish women to set up their own business is a desire for independence. leaving all other things equal. The unutilized potential of women labor has to be mobilized in the best and effective way possible for economic welfare in today’s increasing instability and economic uncertainty. 2010). honer@dogus. 16% in Japan. whereas it is only 23. increasing women’ s participation in the labor market to male levels will boost GDP by 21% in Italy. Goldman Sachs calculates that.Turkey. Moreover. Women’s entrepreneurship has become a new component of neo-liberal program for the struggle against poverty as well as the participation of women in the labor force has proved to be a major factor in sustainable development (Ecevit.edu. Turkey. in EU countries 52%. France and Germany and 8% in Great Britain (The Economist. Keywords: Women Entrepreneurs. committed to entrepreneurial ideals rejecting conventional female roles.e. face to face interviews with 20 female entrepreneurs were conducted in Istanbul exploring their motivation for establishing their own business as well as the level of support they received from their personal social networks and women entrepreneurship organizations. while men are more evenly spread across a wider range of sectors (Spilling 210 . 9% in America. civil society organizations. economic necessity and fulfillment of their dreams.tr tel: 0090 216 544 55 55 ext: 1435 ABSTRACT This study presents an exploratory investigation of Turkish female entrepreneurs in Istanbul. 1998).CHANGING FACE OF WOMEN WORKFORCE: A QUALITATIVE STUDY ON WOMEN ENTREPRENEURS IN ISTANBUL Zeynep Hale Öner Doğuş University Acıbadem. Turkey. Turkey is a country. 2007). More men than women start up their own business and the tendency for women to run business which are on average smaller in size and less growth-oriented than those run by men. The level of female entrepreneurial activity is relatively low compared to EU and OECD countries. Moreover. where paternalistic norms and collectivistic values are highly valued and hence women face difficulties to become involved in entrepreneurial activities. The female entrepreneurs have identified themselves mainly as innovator type of entrepreneur i. governmental institutions and international organizations.5% in Turkey (Kagider. Semi-structured. the issue of women entrepreneurship has increasingly become one of the main topics on the agendas of women organizations. Kadıköy. 34722 stanbul. The women employment in the OECD countries is 62%. Social network support INTRODUCTION Starting from the 1990’s. Innovator type.

e. there was a rapid breakaway from agricultural employment.. However. 211 . The negative family reactions and financial difficulties as well as family demands as mothers do not support women entrepreneurs. the necessity to work much harder as a woman to gain confidence in a man’s world is another main problem of Turkish women entrepreneurs. According to KEIG’s report (2009). 2004). there is an increasing desire for self actualization and the will to use individual rights as women. A more in depth analysis shows that 14. Within this framework. Godwyn. 47% is salaried and 39% unpaid household workers (European commission.33% versus 19. Tyson and Zahidi. Ozen Kutanis (2003)’s study on women entrepreneurship shows that the women’s roles in cultural and social domains are very rigid and predetermined in Turkey. 2008). M. Ozen Kutanis & Bayraktaroglu.& Jordfald.9% working in cities (Toprak and Kalaycioglu. out of 100 women 14% is self employed. there is limited empirical evidence about the reasons why Turkish women choose to become entrepreneurs. As a result. explore the motivating factors of Turkish women to develop their entrepreneurial capacity in Turkey. WBC directors noted that disproportionate domestic and family obligations were both motivations for and obstacles to women starting businesses. this paper intends to enable a better understanding of a range of issues pertaining to female Turkish entrepreneurs. Although Greene and Johnson (1995) theorize that women entrepreneurs draw support from their family and friends. the national household labor force survey of TUIK (Turkish Statistics Institution) November 2008 data shows that the share of agricultural employment in the overall employment of women is 45%. 1996. I will firstly analyze the conditions of women workforce and employment in Turkey. but 98% of women working in agricultural jobs in the rural areas of Turkey are not registered and thus are excluded from the social security system. the women participation in labor force was 34. however opportunities in nonagricultural areas of employment for women were far from compensating the resulting gap in favor of women employment (Kegik. against all these hardships. economic participation and opportunity (Hausmann.1% in service industry.4% of employed women work in industrial sector and 37. the nonagricultural unemployment rate of women in rural areas increased from 11% to 19%. and provide a foundation for further policy action to be taken in female entrepreneurial activity in Turkey. 2009 Turkish Progress report). this finding was replicated in this study as well.2009 ). 24. many Women Business Center (WBC) directors gave examples where women’s families actively discouraged them from setting up their businesses because the role of an entrepreneur conflicted with women’s caretaking role ( Langowitz et al. There are more women working in rural areas i. 2006). Although the rate of women’s employment in rural areas decreased from 41% to 31% during 2001-2007 due to the neoliberal policies. (cf. Given this important gap in the literature. 2002). Moreover. As will be discussed later.9% in 2006 according to CEDAW’s reports (Kader. The World Economic Forum’ s Global Gender Gap 2008 report shows that Turkey ranks 123rd among 130 countries in women’s political empowerment. 2009). Outlook of women workforce and employment in Turkey In Turkey. 2009).1% in 1990. Based on this context.

Apart from this existing inequality. This exploratory research is guided by the following key questions: 1) What are the factors motivating Turkish women to become involved in entrepreneurial type of activities? 2) What type of entrepreneurship are they? 3) What are the key characteristics of their entrepreneurial activities? 4) What is their source of financial support? Approaches to women entrepreneurship When we analyze the basic instincts to become entrepreneurs. trait theory states that entrepreneurs have distinctive characteristics i. RESEARCH METHODOLOGY AND SAMPLE SELECTION This study was carried out with 20 women entrepreneurs in Istanbul from both Asian and European continents during the last three months of 2009. the classical economic theories dictate that the maximization of individual wealth and benefits is a key factor in motivating people to become entrepreneurs (Yazıcı and Sahin. During the one to one interviews. In this respect.000 (Gulay. 1998): Need for achievement. the above statistics prove the unfavorable conditions for women labor force and their insufficient representation in unions and boards in Turkey.e. the respondents were given cards which had written descriptions of different types of entrepreneurs (see Goffe and Scase. 2006). The selection of respondents for the empirical research was done through referrals i. risk taking propensity. and self efficacy. 212 . Thomas (2000) and Koh (1996). The female entrepreneurs were interviewed by using a structured questionnaire. Women workers make up only 10% of union members and are not represented in union boards where only 19% out of 489 board members are women (Celik. The sample mainly consisted of women entrepreneurs in the service sector. 1997. 1985) and they were asked to choose one definition to identify their entrepreneurship style. The pay gap between women and men in the private sector is more than 50% which is an indicator of an undeniable wage inequality between sexes when education and work experience are factored in. there is the reality about the male –dominated structure of unions which excludes women union members. locus of control.e. Hansemark. The respondents were distributed the surveys and then they were interviewed in a face to face fashion at their workplaces. The face to face interviews were conducted with semi-structured surveys. 2006). The rate of unionization in Turkey is around 9% and the union membership is 892. unique values and behaviours that define them to be different than non-entrepreneurs. there is a huge pay gap of 22% between the average wages of women and men in cities of Turkey (World Bank. 2007). According to Mueller. innovativeness. The traits theory define the following characteristics to be common to entrepreneurs (cf. tolerance for ambiguity. Teoh ve Foo. Therefore a need for a policy update and encouragement of women entrepreneurship is in urgent need. snowball effect.Even if women succeed to participate in the labor force. Other factor effecting the emergence of entrepreneurship is the personality and environmental factors. 2007).

Although these personality factors are at work for the emergence of entrepreneurship. the other 30% for economic reasons. 45% of the interviewed entrepreneurs has no kids. %10 more than 30 years. The 50% of the women entrepreneurs were not aware of the existence of the support of women entrepreneurs associations and out of the other half of the sample. Simpson (1993) summarizes these four categories as follows: Conventional women entrepreneurs are the traditional ones that bring their entrepreneurial spirit and tie them with gender related roles. and use of credit (15%). attachment to entrepreneurial values such as individualism and self reliance versus the commitment to conservative gender roles. The educational background of the women entrepreneurs is as follows: 20% primary school. family aid (5% ). The analysis of their business existence since their set up is as follows: 45% of women declared to have been in business between 0-9 years.e. The face to face interviews show that 30 % of women entrepreneurs have set up their business to be their own boss. 10% has one kid and 45% has two kids. 25% has two and 10% has no siblings. 25% to realize their dreams. there is an undeniable impact of the environmental factors i. Domestics are driven by traditional female gender roles. 30% high school. thus their vision of success in business is somewhat limited. the declared membership rate is 15%. 15% for social status. 15% declared dissatisfaction due to limited time for self. 35% between 10-19 years. 45% of the sample has three siblings and more. however. Radicals are those types of women entrepreneurs who rationalize their entrepreneurial ideals as to fight women subordination. %10 between 20-29 years. 20% has three. RESULTS The age group of the sample ranged from 20 to 50 plus. use of debt (20%). 2008). brochures (15%). I will use the four categories of Goffe and Scase (1985) to analyze women entrepreneurship. and no expectations in any ways (25%). 40% is single 10% is widow. 213 . 50% of the women entrepreneurs were married. The women entrepreneurs choose different ways to promote their business that is through internet (5%). They try to achieve a nice balance with work and family. Innovators are keenly motivated by their entrepreneurial ideals and that idealism causes them to prioritize work against family. The gender factor in entrepreneurship For this study. The expectations of the women entrepreneurs from the government is tax deduction (45%). 90% of the women entrepreneurs employ workers whereas 10% do not.e. half of the sample being within 40 to 49 age range. %85 of the respondents expressed satisfaction to be doing their own business as entrepreneurs. word of mouth (10%) and all of the mentioned ways (60%). limited income generation and wish to be in a different sector. easiness of payment of debts (30%). 45% university and 5% graduate school. These four categories of woman entrepreneurs are based on two factors i. market mechanisms and state/government politics (IGIAD Entrepreneurship Report. The women entrepreneurs have set up their business with personal savings (60%). referrals (10%).

develop their own ideas and set up their own business. Thus they are still the main caretakers of children and home. Thus Carter and Cannon (1992) state that there is tendency for female entrepreneurs to hit a balance between interests of family and business. it aims to serve the literature as an exploratory study to reveal women entrepreneurship motivations. 15% for social status. but it is only 23. the other 30% for economic reasons. they still either try to balance their work/life or prioritize family over work. However. Tang. prioritize work (40%) and prioritize home (30%). This study took place in Istanbul and the sample in question is not reflective of the whole Turkish population and thus can not be generalized in any ways.e. community and friends. 1997. 2010). 1995).Lastly. This variation can only be homogenized by working women friendly initiatives at workplaces or may be a motivator for women to be either entrepreneurs or non working women workforce. the type of 214 . children daily care centers should be obligatory for institutions employing minimum 150 employees and a national action plan is urgently required to mandate these rules (Sener. Moore & Buttner. The fact. reflects the gender perspective view (Kyro. that 30 % of women entrepreneurs have set up their business to be their own boss. in EU countries 52% in Turkey. CONCLUSION The results show that there is supporting evidence to Goffe and Scase (1985)’s theory: suggestion on female entrepreneurship differing from male entrepreneurship in that women entrepreneurs view their business as part of a wider system of relationships inclusive of family. women with an attempt to fulfill their dreams. The push from the government and other organizations to pull women into labor force for economic welfare as well as the urbanization of women forced women to change. according to the findings of the report. % 25 to realize their dreams. Although women tend to be at work. DISCUSSION This study has limitations due to the lack of adequate sampling size to draw any conclusions. TEPAV (Turkish politics of economy research institution) (Sener. 2010). Many women entrepreneurs were considered creative with a strong desire for getting things done (Yeager. The Global Gender report (2009) draws attention to the concept of ‘motherhood gap’ The term ‘motherhood gap’ is defined as the extent of compatibility of motherhood with employment.5% (Kagider. This research gives supporting evidence to the abovementioned view as the women respondents in our sample expressed difficulties while they were trying to survive in a man’s world and have to work extra to gain extra trust from customers. is related to the compatibility of marriage and motherhood with a lifestyle where women can work. women entrepreneurs questioned about their work-life balance have declared that they were trying to have a balance between home and work (30%). 2010) ’s report firmly states that care service has to be institutionalized and socialized. Thus the difference in employment rate of working women within the ages of 35-44 with no children in comparison with the same age group of working women with kids shows a great variation according to countries. Despite this school of thought. women are continually viewed as ‘the other’ in a world where the norms of an entrepreneur is still that of a male and male characteristics are exhibited in entrepreneurial activities. That is a good sign as the women employment in the OECD countries is 62%. the role of Turkish women in Turkish society is undergoing significant changes due to the globalization in the world. The employment gap. Hence. 1999. 2001) i.

and religion have been widely used for analysis of entrepreneurial activity and economic development. M and et al. This gives supporting evidence to Aldrich (1989) as he suggests that social structures such as workplace. The difference between these two studies can be attributed to the regional differences as well as the different sector make up of the sample. This shows that women also experienced the process of polarization. 2007). we must note that the share of routine non-manual as well as the managerial and professional. Furthermore.women entrepreneurs in Turkey. While some portion of female workers entered into the labor force at the very bottom and most often on a temporary basis. 1989) is a good indicator for this change. for women serve the above mentioned purposes. It is also worth noticing that ‘entrepreneurship is a mechanism by which many people enter the society’s economic and social mainstream. population integration and social mobility’ (Hisrich. There is a call for further research to explore the reasons for the movement of all women workers from agriculture as well as more interviews with women entrepreneurs in rural and urban locations of Turkey. According to Ozen Kutanis and Bayraktaroglu (2002). Langan-Fox. as a tool. 2009). which reflects the sociological dimension of entrepreneurship which examines the relationship between group characteristics and the initiation of business activity. Thus entrepreneurship. family. and Grant. Godwyn. and entrepreneurial classes expanded at very significant rates with the contraction of women's employment in agriculture. there have been recent efforts to extend sociological research to include gender as a salient group characteristic in its relationship to entrepreneurial activity (cf. Women show signs of empowerment and self actualization. M. the common type of women entrepreneur between the two samples is the domestic/traditional type. Eastern Marmara region and Kocaeli / Adapazari are more industrial and less urbanized. This finding may be an indication of the changing values of societies due to globalization.1997). Lerner. an increasing number of women are establishing stable careers at the middle and the top of the social strata.. entrepreneurial enterprises directly contribute to group assimilation (cf. Thus.’ Although race. Kaya (2008) suggests that ‘the process of proletarianization with economic globalization in Turkey was also a process of increasing utilization of female labor force. The female movement at the end of the 19th century in Turkey (Sirman. gender has increasingly become to be perceived as an important factor. and social life affect women’s access to entrepreneurial opportunities. aiding culture formation. However. 2009).. Godwyn. this result may be interpreted as the cultural expectation of women roles in the Turkish society. whereas in this study the results show that the women are mostly innovator and traditional entrepreneur types. M. fulfillment of their dreams and economic reasons. the major motivating factors for our sample to become entrepreneurs are desire for independence. Following our examination of the available literature. it seems reasonable to conclude that this study highlights the changing trends in Turkey. As another sociological analysis of this issue. By creating economic stability for a given population and establishing a place in the social and economic power structure. ethnicity. These factors have proved to be the same for the Israeli women entrepreneurs (cf. 215 . educational sector unlike this study which is only service sector. However. Ozen Kutanis and Bayraktaroglu (2002)’s study reflects results on a sample of health and service sector. so the type of women entrepreneurs are more traditional and conventional.

216 . the research results are encouraging as it signals a positive change. further research should explore the extent to which network affiliations of Turkish women entrepreneurs become prevalent for their success and the reasons underlined. However. it is the intention of this paper that further research is pursued in a wide setting of Turkey with a larger sample size to provide feedback for policy actions. Thus policy implications are in immediate request. this is also a call for help for women as they need more help to cope up with this responsibility. References are available upon request from Hale Oner honer@dogus. Lastly.edu. Based on my finding that only 50% of the women entrepreneurs sample showed interest in network affiliations.tr.Although the gender inequality and the urbanization of women in a patriarchal society with rigid family roles of women make it difficult for women to be entrepreneurs. It is inspiring to see evidence that a majority of women either prioritize their work as number one or try to balance work and family.

Mount Prospect.com 224-210-0375 ABSTRACT This article presents information about the transformational and transactional leadership. education. The research examines the effects of transformational and transactional leaderships on organizational culture. The directions for future of transformational leadership are discussed. learning. and organizations. technological change. and development focused on leadership as only a transactional exchange between the leader and its followers until the last twenty years. Saint Louis Avenue. Three decades ago. history and components of transactional and transformational leadership. and quality management. economic. Transactional leadership is based on an exchange of something the leader possesses or controls that the followers want in return for his/her services. and the crucial role of leadership style on development of an organization. INTRODUCTION Leadership theory. In this exchange. Transformational leadership “…occurs when one or more persons engage with others in such 217 . and trust. satisfaction. The recent literature in leadership is overflowing with articles and books describing the “transactional and transformational” leadership. There is a positive relationship between transformational leadership with organizational culture. IL 60056 ozgeersoy@hotmail. In this article. global.edu 773-463-1785 Ozge Ucan 1205 N. their history. Then a new paradigm of transformational-transactional leadership was introduced that better reflected the practices of the best leaders. the focus is on the effects of these leadership styles on individuals. organizational learning. There are two reasons for this: the first one is rapid. Transformational leadership has a positive impact on individual’s motivation. Wheeling Ave. after definition. give instructions to clarify conditions. and the other is the failures of the known leadership theories (behavioral and contingency) to explain atypical qualities of leaders.TRANSACTIONAL AND TRANSFORMATIONAL LEADERSHIP AND THEIR EFFECTS ON INDIVIDUAL AND ORGANIZATIONS Marie-Elene Roberge 5500 N. groups. the components of these leaderships. control and reward. IL. 60625. leaders emphasize goal setting. the interest in transactional and transformational leadership becomes more popular. m-roberge@neiu. quality management. DEFINITION OF TRANSACTIONAL AND TRANSFORMATIONAL LEADERSHIP Transactional leadership “…occurs when one person takes the initiative in making contact with others for the purpose of an exchange of valued things” [1]. This article also examines empathy as a key component of the transformational leadership. Finally. and individuals. Chicago. research. and major differences between them. futures directions of this leadership styles are presented.

Two major leadership models found contingency leadership [8] and path-goal leadership [9]. which transactional management cannot produce. Leaders in this group help employees with personal problems. 218 . that leader makes sure that the work gets done. Transformational leadership can be seen as a parent of transactional leadership.The transformational style inspires followers to share the leader’s values and connect with the leader’s vision. Transformational leaders are successful because they tap into some of our most basic human needs such as the need for a sense of identity. Second is oriented toward people. The path-goal leadership model incorporates situational variables to explain employee motivation. Researchers have used prior behavioral leadership research to create the concept of transactional and transformational leadership. According to Ohio State Studies. What transformational leaders do are that formulating an inspiring vision. whereas the transactional style can be seen as a manager of planning and implementing policies and procedures [3]. Transformational leaderships use energy-producing characteristics that generate new changes for the organization. there are two different kinds of leaders. Leaders assign tasks and expect workers to maintain definite standards of perform.a way that leaders and followers raise one another to higher levels of motivation and morality”[1]. Whereas the transactional style uses the power and authority that already exists in the organization. Another view is that the transformational style creates new structure in an organization. and the need to feel that we are achieving something worthwhile with our lives. the transformational leader motivates people to work for a new and greater good and to create changes in the environment [5]. There is evidence that more effective leader’s exhibit a higher level of transformational leadership than transactional leadership [2]. Major Differences between Transformational and Transactional Leadership Transformational and transactional leadership are complementary to each other as the circumstances dictate. and support them. These studies established that successful leaders use many types of power and that power alone does not explain leader’s effectiveness in influencing people [10]. Leaders exhibit various degrees of transformational and transactional behaviors as needed. Behavioral leadership models have not successfully predicted which leaders could lead organizational change. and encourage short term sacrifices [6]. There is no formula that dictates when one is more relevant than the other. The History of Transformational and Transactional Leadership Research on leadership theory has evolved over the past fifty years. Early leadership research focused on identifying personal characteristics of leaders (trait approach) then researchers focused on leader behaviors that increased followers’ productivity. The transformational style can be seen in a leader of innovation. treat all employees equal. First is oriented toward task. The contingency approach proposes that appropriate leadership style is depending on situation. It provides the reference to the transaction of power within the organization [7]. the need to feel good about our efforts. the need to belong. the need to believe that our future is a hopeful extension of our past. facilitating the vision. the need to feel that we are part of something special. while the transactional style depends on existing structures [4].

With this method.3. Research in transformational leadership focuses more on its outcomes other than its antecedents. integrity. Followers trust 219 . The Components of Transformational Leadership Transactional leadership provides a basis for effective leadership. The term of transformational comes from inspiring and developing followers and pushing them to higher levels. In passive.1. transformational leadership can be seen when “leaders and followers make each other to advance to a higher level of moral and motivation". According to Burns [1]. Contingent Reward: This transaction is effective under certain circumstances. innovation. Through the strength of leader’s vision and personality. People motivation and its role in leadership formation and development are related. and motivations to work towards common goals. and errors to occur and then takes action. Transformational leaders act as mentors to their followers by encouraging learning. passionate and ethical [12]. the leader waits for deviances. transformational leaders are able to inspire followers to change expectations. The literature identifies five dimensions of transformational leadership. Transformational leaders garner trust. According to all research. courage. The study of motivation as an antecedent of transformational leadership shows that leaders’ motivation is highly correlated with their transformational behaviors [13]. These are creativity. In the other one. Later. perceptions. Bass expanded upon Burns’ original ideas to develop what is today referred to as Bass’ Transformational Leadership Theory [11].2. life experience. and individual development. but satisfaction. the leader actively monitors deviances and mistakes and takes action as necessary. and motivation. There isn’t any transaction or exchange between leader and follower. Management by Exception: This transaction is less effective than contingent reward or the transformational leadership. Idealized Influence: Followers see their leaders as role models and try to copy them. According to Bass [11].The concept of transformational leadership was initially introduced by leadership expert and presidential biographer James Macgregor Burns [1]. the leader assigns what needs to be done and rewards followers in exchange for doing assignments. empower. Responsibilities of leaderships are ignored. Transformational leaders have six central personal characteristics. and effectiveness can be achieved through transformational leadership. and laissez-faire [14]. researcher Bernard M. management by exception. respect and admiration from their followers. mistakes. Laissez-Faire: This means absence of leadership. visionary. and foster a climate of trust. interaction.1. It can be passive or active. it is the one that most ineffective. Decisions are not made and actions are delayed. evoke emotions. Other theories of leadership also emphasize the importance of communication. They provide challenges. The Components of Transactional Leadership Transactional leadership occurs when the leader rewards the followers depending on the performance. achievement. transformational leadership can be defined based on the impact that it has on followers. The majority of antecedents research of transformational leadership emphasis personality. Transactional leadership depends on contingent reward.

followers’ performance reaches a higher level of quantity and quality. In this dimension. people are more likely to perceive themselves as different from another. This communication turns the team’s objectives into common identity of groups. Newcomers are easily integrated into the group. Transformational leadership provides the visionary leadership needed for successful quality management. leaders pay attention to the followers’ achievements. This increases individual motivation. positive affects and the environment enhance problem solving and decision making. By offering new learning opportunities. That leads to innovation. The firms with a higher level of quality management have a higher transactional and transformational leadership. enthusiasm. Good communication skills are highly important for this dimension. the relationship between transformational leadership and organization performance has been analyzed and found out positive relationship between them. leaders make clear expectations and show commitment to goals. and performance variance becomes smaller. A research found that the spread of positive emotions among a group could enhance group cooperation and reduce group conflict [18]. The reason for this is that the leader considers followers’ needs over his or her needs. creation.4. Also. Inspirational Motivation: Leaders show empathy. satisfaction.3. EFFECTS OF TRANSFORMATIONAL AND TRANSACTINAL LEADERSHIP ON GROUPS AND ORGANIZATIONS In literature. They act as a coach or mentor for followers. Effects on Organizational Learning: Organizational learning and innovation are positively affected by transformational leadership.and admire their leaders. This common identity increases the team spirit. their leader will be there. and group cohesion. and approaching situations in new ways. Especially in diverse work environment. questioning conditions. However. Therefore. Transformational leaders trigger followers’ behavior such as Organizational Citizenship Behavior (OCB). OCB can be seen in extra-role behaviors such as helping newcomers. so they are less likely to empathize with one 220 . there is little research on the mediating process between leadership and organizational success. The relationship between organizational learning and leadership provides the creation of a positive synergy that increases organizational performance [16]. OCB mediates the relationship between transactional leadership and follower performance [17]. self efficacy. Effects on Quality Management: Transformational leadership is also associated with quality management. Transactional leaders change their environments by influencing followers to embrace positive visions and ideals. And leaders search new ideas and solutions to problems from followers. and success. 2. Researches on mediating process have been focusing on followers’ trust. In general terms. successful firms use a higher level of transactional leadership than unsuccessful firms use [15]. and optimism. then group works efficiently. Intellectual Stimulation: Leaders stimulate followers by changing problems. Followers know that whenever they need help. Individualized Consideration: Leaders consider individual’s growth and success. Transformational leaders communicate the team’s objectives effectively.

leaders should manage this asset successfully. Transformational leaders facilitate higher level of knowledge creation and sharing. 221 . share information. the founder and CEO of the Southwest Airlines. In this complex and fast moving world. EFFECTS OF TRANSACTIONAL AND TRANSFORMATIONAL LEADERSHIP ON INDIVIDUALS Transformational leaders understand followers and inspire them to achieve higher outcomes. motivate them on a day to day basis and encourage them to share ideas with a firm. give feedback. and coach them. as a result of what transformational leaders do.another. They reward individuals for coming up with new ideas and sharing the ideas with others. they become open to hear negative feedback and motivated to change. He became involved in helping out employees personally. Transformational leadership has a positive impact on the development of followers’ motivation in terms of their self actualization needs and extra effort. in high technology firms and other knowledge based companies. Leaders are the ones for creating structure that foster knowledge creation and cultivation. and managing effectively. Herb Kelleher. then it turns into an environment for more effective individual growth and organizational performance [20]. sharing.As a transformational leader. He reached down and got to know the employees. so employees understood what he really believed in and why they should trust him [21]. guidance for improvements. identify their strengths and challenges. Jobs created a vision for computer and pushed his Apple employees to reach higher goals. Leaders support. Leaders empower their followers and this leads to higher motivation. Steve Job used a transformational and transactional leadership style to find out systems and structures that create. Effects on Organizational Culture: In transformational leadership process. and convert it into a product. one of the key elements of competitive advantages of companies is knowledge creating. Especially. focused on building relationships with employees. This leads to higher levels of individual performance [23]. the organizational culture changes. When people feel they are valued.The environment in transformational organizations consists of long-term commitments toward organizational goals and mutual interests. Also transformational leaders influence the culture beyond the people of the organization as well as the culture among the people of the organization . as well as leaders and followers who can pass over their self-interests for the good of the organization. Leaders transform organization and its culture. Transformational leaders trigger follower conscientiousness. Leaders act as feeling for and having mutual empathy the people work together create an increase group effectiveness and performance [19]. Leaders individually consider their followers. transformational leaders increase the level of knowledge creating and sharing. Basically. Transformational leaders increase their subordinates’ satisfaction and trust . While knowledge as an asset is continuously growing. Transformational leadership has a positive impact on follower’s performance [22]. Transformational organization cultures are based on shared interdependence. For example. mentor. and support them. After culture becomes transformational. their followers value them.

Transcendental leadership incorporates managerial aspects of transactional leadership and the charismatic aspects of transformational leadership. a leader who is empathetic toward his/her followers is able to take the place of followers and feels for their welfare and wellbeing. It is the ability to understand follower’s emotional conditions. No leader can lead if she/he cannot respond to the wants of the followers. Empathy helps leaders understand the cultural differences and hear the message beneath the words being spoken. A team leader can sense and understand the view points of people around the table. The world is being reshaped by globalization. and transcendental [26]. Sanders. Without empathy. A strong connection between leaders and followers brings higher organizational performance [24]. Transformational leaders are the ones who lead the companies effectively and successfully in this decade. Empathy plays a role that increases team performance. desires and really care for them with help of empathy. the world is going through a transformation. needs. and point of view. and diversity. The first reason is in business. a person with high level of technical skill. empathy. Overall. Truly effective transformational leaders are distinguished by a high level of emotional intelligence that includes self awareness. According to a study. transformational. the use of teams is really increasing. The last reason is reduction of turnover in today’s economy. Leaders who are simply power holders cannot be effective in the long run and not see the ethical effects of their work. leader’s development along with consciousness (mind). but division leaders without emotional intelligence underperformed by the same amount [25]. cultural and ethnical differences are getting larger in work places. For the future of transformation leadership. politics. self regulation. This transformation affects business. and if she/he cannot empower followers. IQ. Transcendental leadership is developing of leaders beyond the ego towards a 222 . senior managers who had emotional intelligence over performed goal by 20%. An important measurement of emotional intelligence is emphatic response. if she/he cannot produce change through innovation. motivation. Empathy is the key element that enables the leaders to balance meeting their own goals with regard for people whom they lead. and analytical mind can’t be a great and effective leader. Empathy distinguishes transformational leaders from other leader types. Leaders understand follower’s wants.TRANSFORMATIONAL LEADERSHIP AND EMPATHY Emotional intelligence is a strong prerequisite for effective transformational leadership. Future of Transformational Leadership In the 21st century. A major characteristic of transactional leaders is relying on empathy to understand employees’ thoughts. moral character (heart) and faith (soul) is associated with these dimensions of leadership accomplishment. Empathy is especially important today as a component of transformational leadership. feelings. industry. information technology. economy. Leaders who show empathy to followers can improve organizational efficiency. a research proposes a model that suggests three dimensions of leadership accomplishment. and etc. The second reason is with increasing globalization. In this model. With the help of empathy leaders develop and keep good people. and social skills. These dimensions are transactional.

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and strongly tied to. the labor market is not a factor than affects pay scales. the following features of personnel management. Layoffs are perceived as being the last resort for handling managerial difficulties. so payment within a company is not so much related to the specific types of jobs undertaken. Okinawa. Employees are appraised for potential and demonstrated ability but are expected to do whatever work they are assigned. the length of service with the company (specifically. this study identifies some general characteristics of meritocracy in Japan and in the US as revealed from investigation of corporate pay systems. with specific consideration given to such labor issues as long-term employment. Japan 904-0116 Email stomo@okiu. comparatively few workers who have obtained a secure job are willing to change to a different employer. Chatan-cho. despite actual age at graduation. Meritocracy. promotion and raises in salary are affected by. most Japanese companies prefer long-term employment in which the accrued duration of the working period is closely linked to increases in the employee’s pay. the initial pay scale is fundamentally determined by the year of graduation. so there is a financial incentive not to delay or prolong one’s education. Overall View of Meritocracy in Japan and in the US Corporations in Japan have. Ability is either ‘existent’ or ‘potential. Given the fact that each country has its own cultural structures. Under such a seniority-pay system. 225 . Additionally. though this is only a custom and is not clearly prescribed by the contract. Pay System. In addition.’ Evaluation is either ‘job evaluation’ or ‘individual evaluation. in-house service). in general. Because companies usually ignore previous work experience in the determination of payment or rank.’ This categorization enables contrastive differentiation of characteristics of meritocracy in Japanese and US corporations.jp Office Tel/Fax +81-98-893-7128 Mobile: +81-90-2859-8507 ABSTRACT Trends in pay systems of Japanese corporations are considered in terms of comparison to personnel management in the United States.MANAGERIAL RESPONSIBILITY FOR MERITOCRACY ~PERSPECTIVES ON THE PAY SYSTEM IN JAPAN ~ Tomokazu Sakumoto Graduate School of Regional Business and Economics Okinawa International University Residence: Chatan 2-6-8. In Japan. Human Resources Management MERITOCRACY IN JAPAN AND IN THE US The expression ‘meritocracy’ as used it in this paper refers to pay systems reflecting abilitycentered evaluation.ac. It is surmised that long-term evaluation systems such a those associated with meritocracy in Japanese corporations are likely to be increasingly significant for the career development of a company’s core workers as implemented by Managerial Responsibility. Workers expect to remain with their employer until their designated retirement age.

emphasis on EA and IV results in pay for skill and knowledge whereas emphasis on PA and JV results in pay reflecting the working period. By contrast. and performance can be job evaluation (JV) or individual evaluation (IV). 1.Corporations in the US. In the case of strong EA and JV. more than 86% of employees hope to remain in long-term employment until retirement. by contrast. As evident in Figure 1. Ability and Evaluation in Japanese and US Corporations The characteristic features of Japanese personnel management compared with US corporations and their payment systems can be categorized according to variant perceptions of employee ability. Salaries thus become competitive. The opposition of these factors is revealed in the differing pay systems of Japanese and US corporations: the pay system for US corporations more strongly reflects EA and JV while the Japanese pay scale is seen to put emphasis on PA and IV. there is pay for the job and performance. but sometimes the resulting discrepancies in pay and benefits tend to promote resentment among employees and loss of corporate loyalty. The degree of emphasis on each of these four factors provides a basis for recognizing the comparative degree of corporate (or cultural) meritocracy. tend to hire and lay off employees according to the current needs of the company. Existent Ability (EA) US Corporation Pay for Job Pay for Performance Job Evaluation (JV) Individual Evaluation (IV) Pay for Skill and Knowledge Pay for Seniority and Service Japanese Corporation Pay for Personal Ability Pay for Qualification Potential Ability (PA) FIG. it has been found that workers are remaining supportive of long-term employment and seniority pay/promotion. Payment is strongly affected by conditions current in the labor market and is less affected by a worker’s duration with the company. The Relation of Pay System and Meritocracy Recently in Japan. Ability can be existent ability (EA) or potential ability (PA). and over 71% willingly accept the seniority system for maintenance of their living 226 . strong PA and IV results in pay for potential ability and qualification. These factors are closely related with the formation of each pay system. Such corporate and employee uncertainty and instability favors short-term management planning within a more fluid market. and the establishment of a connection between that perception and the resultant pay system. Management in terms of payment systems can be categorized based on the type of assessment of employee ability and performance. Corporations seek to improve competitive competence by actively seeking either better or cheaper employees. According to the survey of a labor institute in Japan.

..26 3 26 3.... The specific figures are given below in Table 1.7%)...56 4 56 6 08 6 08 6.45 9 45 5 27 5 27 5. Japanese companies’ non-manager pay determinants were composed primarily of the following five factors..64 6 64 3.... Japanese workers still support retention of long-term employment without contractual specification......07 6 07 1002 1002 3 55 3 55 2 96 2 96 8 86 8 86 8991 8991 3...9%).. most Japanese corporations ranked the following as significant factors for payment: seniority system (61..55 9 55 9 37 9 37 9. According to a questionnaire of the Ministry of Health. in descending order: job content...96 6 96 1.... school career.55 2.. ability (80.27 6 27 oohcS oohcS lllloohcS oohcS 6 64 6 64 3 96 3 96 7 27 7 27 9002 9002 6..... job ability. Moreover.96 8. as reported in a recent survey.37 9 37 6 27 6 27 6.96 3 96 7. Some of Toyota’s distinctive managerial characteristics are as follows.46 2 46 7.. Clearly.97 7 97 8..86 8991 tnemeve hcA yt bA boJ tnetnoC boJ reganaM noN tnemeve hcA yt bA boJ tnetnoC boJ reganaM noN tnemeveiiiihcA ytiiiilllliiiibA boJ tnetnoC boJ reganaM noN tnemeve hcA yt bA boJ tnetnoC boJ reganaM noN 9 64 9 64 9 96 9 96 9 77 9 77 9002 9002 9.. It appears that the pay systems of these companies overlap each other.27 7 27 9002 9002 3 26 3 26 3 77 3 77 6 07 6 07 1002 1002 3.... and job content (56.......64 9 64 9.55 1 55 6.27 8 27 1002 1002 1 55 1 55 6 96 6 96 1 07 1 07 8991 8991 1.. Toyota had by the year 2000 grown to over sixty-eight thousand employees with product sales valued around 120 billion dollars. As for a similar investigation viewed from the side of the companies. It seems that recent pay systems in Japan exhibit several factors combined with employees’ in-house training under long-term employment systems..... Labour and Welfare in 2009....status [1].. almost 96% of Japanese corporations are trying to keep the lifetime employment system with seniority...... though the percentage points of personal elements such as seniority and potential ability has gradually decreased in 2007 survey [3].87 oohcS oohcS lllloohcS oohcS 9 55 9 55 9..36 7 36 0 97 0 97 0.96 9 96 9.......... 7 36 7 36 7.9%).08 6 08 5 87 5 87 5. For example.27 5 27 AN AN AN AN yt ro neS yt ro neS ytiiiiroiiiineS yt ro neS 227 ...5 million vehicles in 2001... This may indicate increased reliance on in-house training. almost 76% of companies retain long-term employment with employee training at company expense because of their belief that employee training is important for a Japanese company to be able to succeed indefinitely into the future [2].97 0 97 AN AN AN yt ro neS yt ro neS ytiiiiroiiiineS yt ro neS 9 45 9 45 9.. the contribution of school career has decreased the most in the past decade..07 1 07 8991 8991 tnemeve hcA yt bA boJ tnetnoC boJ reganaM tnemeve hcA yt bA boJ tnetnoC boJ reganaM tnemeveiiiihcA ytiiiilllliiiibA boJ tnetnoC boJ reganaM tnemeve hcA yt bA boJ tnetnoC boJ reganaM )%( stnan mreteD yaP )%( stnan mreteD yaP )%( stnaniiiimreteD yaP )%( stnan mreteD yaP . and job achievement. in the case of general workers.htlaeH fo yrtsiniM 4 56 4 56 4.....77 9 77 9002 9002 2 46 2 46 7 97 7 97 8 27 8 27 1002 1002 2. PAYMENT FEATURES OF SPECIFIC CORPORATIONS Toyota Motor Corporation in Japan Established at 1937..9002~8991 ”asohC nekuoJ oruhS“ erafleW dna ruobaL .77 3 77 6. TABLE 1 It is worth noting that of these five pay determinants. The production of cars amounted to about 4... seniority..

the designation of blue-collar and white-collar position is not according to assigned job but by skill grade. may receive different pay because of a “broadband” pay scale that includes appraisal for job-related functions such as evidence of skill and success at problem-solving.Paternalism: Toyota’s CEO Hiroshi Okuda insists that a company which parts too readily with its employees will suffer from the loss of reliability of their workers. 228 . promotion and increase of pay is dependent on global personal appraisal by MBO (Management by Objective) and perception of competency based on evidence of understanding of the Toyota Way. For blue-collar workers. the Toyota Way is a kind of managerial philosophy which includes long-term employment. it is based on job grade 30%. personal skill development for multiple skills. a model of competency. and age 20%.and blue-collar workers is similar. and human development according to the philosophy of the Toyota Way. emphasis is on working-period experience. Okuda also stresses education for human development to make better quality vehicles. as shown in Table 2. process and product improvement. In times when the company is in need of many workers.” This system is seen to promote the learning/teaching of skills on a long-term basis in both job categories. the company will be unable to retain eligible workers and as a result will lose its competitiveness. An internship system has been developed for providing 2 or 4 weeks of work experience along with reports and lectures given without pay except for commuting fees. manager training. Workers at the same grade. The purpose was to educate employees for knowledge. loyalty that supports an “upbringing” attitude towards other employees. For blue-collar workers. lodging and meals. In-house training: In 2002. and an unceasing effort at improvement “from the bottom up. However. The purpose is to promote company appeal and to foster creative personal development. which shows skill development with working experience. Pay for white-collar workers is based on job grade (50%) and personal job function (50%). As explained by the CEO. Pay: For four hundred positions which are surveyed and evaluated. the Toyota Institute for Human Development was established.” Toyota’s Pay Systems in Japan and at NUMMI The Toyota system of pay for white. personal job function 30%. Toyota’s managerial philosophy encompasses human development. experience 20%. however. and capacity for teaching their “know-how.

Therefore NUMMI workers have only job experience but do not learn solution skills for unusual operation as is the case with workers in Japan. California. As seen overall. including a type of competency and broadband pay scale such as used by Toyota corporations. RECENT TRENDS OF PAY SYSTEMS IN JAPAN Most corporations in Japan have tried to use job-based pay systems for both blue-collar and white-collar workers under long-term employment. many Japanese corporations have tried to employ several types of pay system in heading towards personal ability-centered pay [5]. It seems that the pay system in Japan is converging for working flexibility and employee training. difficulties such as cost and time for job evaluation and the lack of working flexibility. and there is no need for a broadband pay range to accommodate the different skill capacities of each worker. Unfortunately. with 50/50 investment by Toyota and GM. though NUMMI adopted only a division-internal rotation system. this seems to have created several difficulties of the evaluation system based on jobs or performance. Pay raises are relatively small and automatically allotted according to six-month working periods without personal-performance evaluation [4]. The payment of union members is at a uniform rate without appraisal except for maintenance workers. Evaluation tends to center on personal potentiality because personal ability does not link so well with job performance under group-focused working situations without a definite working sphere. which was established in 1984 in Fremont. Several corporations employed pay systems for personal ability. I would like to stress that most CEOs in Japan have a 229 . This paper has attempted to consider more relevant pay system under the long-term viewpoint of Meritocracy. The variability of the pay system of Toyota in Japan is clearly related to rotation of production and maintenance workers. For this reason. the NUMMI pay scales are separated.TABLE 2 Pay System in Toyota Position Profesional White Collar Pay Grade 1 Grade 2 Grade 3 Grade Expert 4 Grade 5 Grade 6 Grade 7 Grade Based Pay Position CX Blue Collar Pay Grade 1 Grade Based Pay Base on Job Grade 30% Experience 20% Personal Job Function 30% Age 20% Clerk 2 Grade 3 Grade EX 50% 4 Grade Personal 5 Grade Mid Skill 6 Grade Job Function 7 Grade Skill 8 Grade 50% Basic Skill 9 Grade Toyota Motor Corporation in 2002. Job Grade SX Hourly pay for the job is used for blue-collar workers at NUMMI (New United Motor Manufacturing Incorporated).

management philosophy to encourage employee career development within long-term employment and to keep in balance employees’ pay. REFERENCES [1] The Japan Institute for Labor Policy and Training. most Japanese companies have employed pay systems for meritocracy based on personal potentiality under long-term employment. 230 . This is closely related to the pay system under OJT in long-term employment. “Nihonteki jinji seido no genjo to kadai ” 2000-2008. “Kinro seikatsu ni kansuru chosa” 2004 and 2007. [3] Japan Productivity Center. Considering general pay systems. It appears to me that considerable managerial responsibility remains in combined pay systems based on career development of employees. [2] Japan Productivity Center. “Nihonteki jinji seido no genjo to kadai ” 2008. Local Agreement in 2004. as is done in the Toyota Way. more so than the average US corporations. [5] The Japan Institute for Labor Policy and Training. “Kongo no kigyou keiei to chingin no arikata ni kansuru chosa” 2009. [4] NUMMI and UAW.

global financial crises INTRODUCTION Downsizing refers to planned reduction in the size of the workforce with intent to cut costs and to improve organizational performance (Kets de Vries & Balazs. re-organization. The organization chooses this strategy when executives are unable to predict future business activity and the environment and particularly at times of downturn of the economy. commitment. survivor. Key words: Downsizing. The present study. This decision was unusual for implementation of permanent termination. the implementers. investigated the three groups of the concerned parties: the ‘victims’ of termination. 231 . in this paper made an in-depth analysis of several issues: We examined the feelings of the ‘victims’ after returning to the company. Not many empirical studies have paid attention to the processes by which downsizing can be accomplished. We. the post-downsizing ‘survivor syndrome’. (Cummings & Worley. 2002). which describes experiences of top management team together with the human resource (HR) managers implementing a downsizing program in an IT company in Turkey. Smith. Kozlowski. and management feelings and their interpretation of the situation. It is also referred as rightsizing. 1993). restructuring. According to Noronha & D’Cruz. downsizing will have impact not only on those who are separated from the organization but also on those who survive the lay-off and stay in the organization. the management made a decision to re-call all terminated ‘victims’ to offer them their old positions. those involved in executing the downsizing intervention in the organization. lay-off. however. No: 14 Yuzuncuyıl 06531 Ankara-Turkey ala@cankaya. as well as the implementers. & Hedlund.edu. Chao. The explanation given by management was that ‘since the company has contracted a sizeable project. 1997.THE EFFECTS OF DOWNSIZING: A CASE STUDY OF AN IT COMPANY IN TURKEY Alaeddin Tileylioglu Çankaya University Ögretmenler cad. 2006. the ‘survivors’ and the decision makers of the downsizing. but due to a new development only three months later. Downsizing was intended as a permanent separation. The downsizing practice took place at the end of 2009 due to the ‘global financial crises’. therefore. now we can afford to re-employ all the ‘victims’ of the downsizing’.tr phone: +90 312 2844500/237 fax: +90 312 2871672 ABSTRACT This paper presents findings of a case study.

Positive consequences involve decrease in personnel cost and increase in efficiency and productivity while negative effects include reduced job involvement (Allen et al. In addition it increases the need for new organizational form and for re-allocation of resources and power. increases moral problems and reduces motivation and increases the need to develop new skills among survivors. It employs 350 people more than half of whom are computer. in the last 3 years prior to 2009. 2001) and reduced performance of the survivors (Brockner. it was growing at a very fast rate reaching eight to ten times its previous software sales. in Ankara. each of which is run by a director. reduced commitment to the organization (Brockner. due to the very high growth and particularly diversification in their outputs. In 2009 due to the world financial crises. and Haltiwanger 1994. According to some researchers (Baily. Martin & Bies. 1992). There are more empirical studies indicating the long-term negative effects of downsizing on surviving employees. Reed & DeWitt. In addition to the contracts that are already under operation. Cooper Schneider. The company is owned by both private sector entrepreneurs as well as the state defense industry companies.. productivity. THE COMPANY The company under consideration. Lewin and Johnston 2000) there is lack of explicit evidence supporting long-term benefits of downsizing. downsizing is also studied as a violation of the psychological contract (Spreitzer & Mishra. 2002). 2001). the top management started to seriously talk about restructuring the organization. Downsizing effects work processes as well: it causes loss of individual security as a result of job losses. Folger. with highly centralized structure. let’s call it XYZ. XYZ started to show a decrease in its activities. the business started to slow down and 232 . Over 90% of the employees are graduates of very good universities. Dougherty and Bowman 1995. Konovsky. XYZ’s uses a matrix type organization. The company has been very successful and profitable over the years. was established in 1992 in the capital city of Turkey. and profitability (Madrick 1995. The use of downsizing as management's strategic response to environmental and institutional changes is prevalent in many industries. Grover. They also have strong human resource as well as marketing and sales departments. at the end of 2008 and beginning of 2009 they contracted several other projects that would resume work at the beginning of 2010. and contracts and programs. Bartelsman. particularly during the times of recession and financial crises. (Armstrong-Strassen 1998). Rubach 1995) than its long-term benefits. It has four operations departments: namely software. many of them hold a master degree in various relevant fields. making their shareholders extremely happy. During the last year.. system. XYZ is managed by a general manager and two deputy general managers. But following the world financial crises. it reduces commitment to the company by survivors. It was established to produce software to the strongly growing defense industry of the country. 1994) reduced self-esteem (Wiesenfeld et al. Despite very strong competitors.Downsizing may have positive or negative consequences. certification. in 2009. software and electronic engineers. Cascio 1995.

some of the ‘victims’ believe that managers did not do this to harm their ex-employees. Top management met twice to discuss the situation. In selecting people to terminate performance appraisal results were not used. They believe that XYZ will not need that many software engineers. it was decided that the day of the receipt of the letter that is sent through the Public Notary would also be the last day worked. but also the survivors. some of the contractors asked XYZ to cancel their software project’s contracts while some others asked for negation or deferment. neither other criterion. They believed that if they lose some more contracts. There were no termination interviews after the operation.as a result. They also informed the ‘victims’ that their legal severance and notice pay will be made immediately. There was discussion over how much notice employees should be given prior to termination day. The selection criteria used were not comprehensive at all. The immediate supervisors were not involved in the process. However. Senior managers together with the human resource manager decided to proceed with a downsizing program as follows: A list of employees who would be terminated was drawn up. There was a rumor that some of the senior managers asked their main competitors not to hire any of terminated employees in the short run. such as seniority. Terminations were not handled properly. Senior managers decided to lay-off most of the software engineers upon the recent cancellation of work contracts. Some of new hires together with those who have been working in XYZ since its establishment were terminated. The decision was made to reduce overhead cost significantly. The top managers met again and decided to re-call all the 170 ex-employees. it was reported that the best of the ‘victims’ were offered jobs in other companies. they shared the downsizing decision with the human resource manager and decided to implement it immediately as an effective step towards saving XYZ. instead probably they did it because they thought they would need to rehire some of them in the near future. Due to the concern that there could be destruction particularly of software. According to the human resource manager about 90% of the laid-off employees returned to their old jobs with no change in their previous status or salaries. it was decided that outplacement services would not be provided. The meetings were held in secrecy. The management of XYZ was alarmed. In the third meeting. Top management believed that they need to reduce the number of software engineers. They did not even inform the human resource manager of the company. 233 . Three month later. The process started with sending to each of the selected170 employees. Still this rumor was strong enough to shock not only those who were laid-off. professionals and other support personnel. including payroll expenses. They panicked. Following considerable debate among senior managers about use of outplacement services. During the operation they did not take into account performance data. The operation ended with a loss of several best employees. at least in the short run. through the public Notary. Despite this rumor. the high cost of very qualified professional employees may lead to an inevitable collapse of the company. a letter informing them that their work contract was terminated as of the day of the receipt of the letter. or until business activity is better. Final decisions on which employees should be sent were made by the senior managers through selective judgments. unexpectedly XYZ won a large new contract.

On the question about not including the human resource manager in the two meetings prior to the downsizing decision: They said that firstly. FINDINGS The findings of the investigation provide insight into an unusually awkward situation that can set example to other downsizing practitioners and raise questions about top managers’ making decisions about implementation of downsizing. Because we had no idea about how long the world financial crises will last. since nearly all employees were very qualified and we were happy to work with them. a questionnaire filled by both the returning ‘victims’ and survivors (total of 46) and a focus group interview which included a total of 40 employees selected by the HR department among both survivors and re-called ‘victims’. When senior managers were asked about how they selected employees to be terminated they said that ‘it was not easy to make such a decision. They stood behind the decision to advise the Board of Directors for reducing the work force. For these reasons most of the meeting has ‘top secret’ priority. This is why we were forced to make a very fast decision’. But frankly. there would be very little work for particularly the software engineers in the company. The pressure was due to cancellation of two very large contracts that they were expecting to round 2010 and 2011 profitably. Therefore we considered our action to be understood as permanent separation. this is why we did not mention any dates for re-calling employees. They’ did not want any information leaking before a decision is made for a downsizing operation. We also were not very optimistic about the future of the market. Interview with top managers The interview with top managers revealed that the decision for downsizing was very sound at the time it was taken. it was top management meeting and secondly they are a software company producing software to the defense industry and the arm forces of country. They replied ‘No. Also top management was concerned with investigating the need for restructuring the organization. We believe that everybody understood it that way. They admitted that they were under pressure during the time of the decision. In addition the company’s documents were also analyzed. we were not happy to hear rumors that we asked our competitors not to hire the 234 . METHODOLOGY Data for this study were collected with the help of primary sources through face-to-face interviews with the top management team (total of 7 people).Soon after the re-call is made XYZ invited an expert to investigate the present situation in the company and particularly to report any positive or adverse effect caused by the two recent decisions made. Many companies were closing down and many others were reducing their workforce. We asked them if they had in mind re-calling employees at the time of lay-off. They added that the human resource manager was involved in every other step of the downsizing operation. We were afraid that the uncertainty will prevail for longer time than we foresee. For that reason we believe that until a new and sizeable work contract is underway.

‘No. ‘they are happy to be re-called. authority and responsibility. Did you notice any change in the attitudes of the ‘survivors’ after the downsizing.’ They believe that ‘they should have been more selective’. some of them seem to lost selfconfidence and they were communicating less with management. participation in decision making. In addition. They said that ‘the decision was taken very quickly.‘victims’. We were ‘also’ hoping that the economic crisis will not last very long. But they still seem to feel insecure. ‘We were also criticized for this. They seemed to concentrate on doing their jobs only. do you think that the decision of downsizing was wrong? Do you regret your decision? This question was answered by the general manager and a director as ‘We still think that our decision was correct at the time it was taken. We could have used this as a good example for publicity. were not that sure about their decision. performance appraisal and reward. motivation. It would have been very unethical to mention anything like this. Accordingly since their return to the company they do not seem happy. we asked. We could have done so. They believe that during a new crises. They were very valuable for us. performance feedback. structure of wages. Now. they should have used performance criterion in the process. autonomy. For all of these reasons our management was triggered to ask an expert to investigate the situation’. Therefore we think the whole process would have been handled better’. training and development. ‘On the one hand we believe they were happy and grateful to have survived the downsizing which left nearly 50% of total employees jobless. delegation. After all in such a market situation it would have been very difficult for them to find a decent job. For that reason we never regretted it. We also believe that they lost their trust in management. But this was expected because after all they have lost their best friends and they have uncertainty about their future. Another question asked was related to the re-calls or ‘victims’. This was never the case. the level of communication. there was no reason to do so. Besides. Similar to the ‘survivors syndrome’ they lost self-confidence and trust in the top management. they will be first to get lay-off. we can observe a change of attitude: the ‘survivors’ are feeling insecure. On the other hand.’ Why did you not offer them outplacement services? We asked. trust by customers. human resources compared with competitors. having re-called everyone. It was taken during a ‘panic attack’ we believe that we lacked experience of such decisions’.’ Do you mean they are more productive than they used to be? We asked.’ Questionnaire results The questionnaire was designed to find out about several important organizational issues including relationship between employees and top managers. We sincerely were sorry to lose them. According to the top managers.’ They also said that ‘involvement of the human resource manager in the process from the very beginning would have ended in more satisfactory results both for the company and the employees. We believe that they should work hard to bring back the previous climate of XYZ. Two other top managers despite standing behind their decisions said that ‘XYZ lost several its excellent software engineers to their competitors during this operation. they were somehow less productive and we think they are concentrating on their jobs less than before.’ Other directors and the deputy general manager however. 235 . we did not want to lose them to our competitors’ they said.

The end result of this is plenty of gossips and rumors taking over the real facts in the company. reward. In other words it is claimed that too much responsibility and very little authority is handed over to them. This makes the company one step ahead of their competitors with their good pool of human resource and specialists. and the effect of fast growth on XYZ. During the last few years the image of the company in the market improved greatly. The present state of communication has never satisfied the employees’ expectations. not only senior management. There is also a wide belief held by employees that the senior managers are not empowered enough by the Board to make critical decisions on their own.corporate culture. since he/she would have very little contact with you during that period. their performance was evaluated by the manager of the department they originally worked for. This situation eventually leads employees to refrain from making comments on issues raised by senior managers. The Human Resource Department uses the training budget to cater for the need of XYZ and also to fill the needs of employees. Another point the employees stress in the questionnaire is related with the balance between authority and responsibility assigned to employees. Employees claim that this is the result of very hard work by everybody. instead of being assessed by their team leader with whom they are presently working. Employees are grateful to the senior managers for their emphasis on training and development. This belief reduces the respect to top managers and impairs their relations with employees. They are very susceptible to criticism. This makes the relations very fragile. One of the issues that reduced the trust is related to performance appraisal and reward. A summary of the findings is presented below It is established that the relationship between top management and employees have never been very warm. This should have been recognized and declared. This is also important from the point of view of their autonomy. Trust by customers is also excellent. This situation weakens their positions and forces them to consult with their immediate supervisors or managers on every point under their responsibility. Our aim was to reveal some of the realities underlying the decisions made to lay-off half of the workforce and after a short period of time to re-call them all. The employees claim that while they are working on a particular project that last more than a year. 236 . wage increase as well as times of economic crises. Particularly during review periods of performance. Another issue is related to the level of communication between managers and employees. trust in the top management. They believe that it is not fair to be evaluated by someone who knows little about your recent work. top management trust in employees. Some employees openly declare that management is not open at all to communication and particularly to criticism. Training activities are becoming part of the corporate culture. Another topic of interest raised was on participatory management. They tend to take nearly every point raised by employees personal. Sharing views or decisions with employees is not very common in XYZ.

Employees trust each other but have no trust or faith in the management at all. This feeling has worsened after the terminations. They expressed their opinion on trust with no fear. We think after what has happened during the last three months such feeling did not surprise senior managers. This made employees lose their commitment towards the company. Another point criticized by employees is related with salaries and monetary rewards. They are upset because while XYZ has been growing and making considerable amount of profit, no salary increase or performance reward was made during the last two years. Senior managers admitted that it is time for reviewing the salary structure and performance reward. An investigation is also underway about some managers and supervisors not providing feedback related to the performance of the employees. Another common point derived from the questionnaire was on the growth rate experienced by the company in the recent years. It is said that fast growth rate of XYZ is to blame for many of the above problems. It had adverse affect not only on the structure of the organization but also on several issues that have been mentioned above. Focus Group The meeting with the focus group was very fruitful. We talked to 20 survivors and 20 recalled ‘victims’ selected by the human resource manager to represent several departments. It was interesting to observe the similarities of thought that were expressed. The company’s goals and strategies are not discussed or shared with employees properly. This is viewed as weakness by employees. They feel as if they are deprived from learning about long-run plans of the company. They are only informed of daily duties, they said. They interpret this situation as de-motivating. The explanation given by top managers to such a complaint is more interesting. They say that even they do not know much about the companies long term objectives. This is mostly due to the uncertainties of the Turkish economy. They are forced to revise the goals and strategies very often. Due to the fast growth of the company the organization need restructuring, according to the focus group. The number of employees has increased and the span of control is wider now. Similarly a new department is established to deal with projects for the Navy. The first contract won by this department is far from being a software or consultancy project. It is a production contract. This alone requires a thought for restructuring the organization. In addition one of the two Deputy General Managers positions is vacant. The general manager is substituting this position. It should be filled urgently. Otherwise the general manager, occupied with daily operations, will be losing the control of strategic issues and the company. It was also indicated that there are too many different job titles that creates confusion. They should be simplified. Another weakness of the present organization is that all support departments are directly under control of the general manager. They explain this with the general manager’s possessiveness of authority. Both the ‘survivors’ and ‘victims’ agree that they have no trust in the management. This was highlighted by the way downsizing was handled: instead of holding a meeting and informing employees about what is happening, management chose to inform employees of the downsizing through Public Notary. Particularly those who have been working in the company since XYZ was established were very upset about it.

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SUMMARY AND CONCLUSIONS As it was indicated earlier in text, downsizing effects work processes, it causes loss of individual security as a result of job losses, it reduces commitment to the company by survivors, increases moral problems and reduces motivation and increases the need to develop new skills among survivors. It will reduce personnel cost and increase efficiency and productivity. But due to loss of self confidence and motivation it may also reduce productivity. It may also have an adverse affect on job involvement. In addition it increases the need for new organizational form as well as re-allocation of resources and power. In the present study we have observed similar behavior from both the ‘survivors’ and ‘victims’. Fast growths of companies’, unless intervened on time, may adversely affect the organizational structure, and impair relations in the company. In XYZ probably most of the recent chain of events was caused by the unforeseen fast growth of the company. To cope with and manage the change brought by sudden growth, both management and employees must spend dedicated effort. The feeling of employees about trusting senior managers or those involved in the implementation of the downsizing is a serious problem. The management, in our opinion, should hold several meetings and try very hard to repair the broken relationship. When they make promises they should live up to these promises. They should try to be more transparent in their management style and let employees participate in some of the decisions they take. Particularly in those that concern human resources. The most important lesson to derive from this case and other downsizing implementation, in my opinion, is to smoothly execute the process without too much harming the company, survivors and ‘victims’. To do so, the practitioners should observe the following points carefully: Inform employees about the reasons for downsizing, include HR manager from the very beginning in the process, select the most appropriate criteria for employees to be laidoff, such as seniority or performance appraisal, use outplacement services and exit interviews.
REFERENCES

Allen, T.D., Freeman, D.M., Russell, J.E.A., Reizenstein, R.C., & Rentz, J.O. (2001). Survivor reactions to organizational downsizing: Does time ease the pain? Journal of Occupational and Organizational Psychology, 74, 145-164. Armstrong-Stassen, M. (2002). Designated redundant but escaping lay-off: A special group of lay-off survivors. Journal of Occupational and Organizational Psychology, 75, 1-13. Bailey, M., E. Bartelsman, and J. Haltiwanger. 1994. Downsizing and Productivity Growth: Myth or Reality? Cambridge, MA: National Bureau of Economic Research. Brockner, J., Konovsky, M., Cooper-Schneider, R., Folger, R., Martin, C., & Bies, R.J. (1994). Interactive effects of procedural justice and outcome negativity on victims and survivors of job loss. Academy of Management Journal, 37(2), 397-409.

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Brockner, J., Grover, S., Reed, T., & DeWitt, R.L. (1992). Layoffs, job insecurity, and survivors’ work effort: Evidence of an inverted-U relationship. Academy of Management Journal, 35, 413-425. Cascio, W. 1995. Guide to Responsible Restructuring. Washington, DC: U.S. Department of Labor, Office of the American Workplace. Cummings, T.G., & Worley, C.G. (2002). Organizational Development and Change. 7 Edition, South Western College Publishing: Thomson. Dougherty, D., and E. Bowman. 1995. "The Effects of Organizational Downsizing on Product Innovation." California Management Review 37 (4): 28-44. Kets De Vries, M.F.R., & Balazs, K. (1997). The downside of downsizing. Human Relations, 50, 11-50. Lewin, J. E., and W. J. Johnston. 2000. "The Impact of Downsizing and Restructuring on Organizational Competitiveness." Competitiveness Review 10 (1): 45-55. Madrick, J. 1995. "Corporate Surveys Can't Find a Productivity Revolution, Either." Challenge 38 (6): 31-44. Noronha, Ernesto, & D’Cruz, Premilla. (2006). A necessary evil: The experiences of managers implementing downsizing programmes. The Qualitative Report, 11 (1), 88-112. Rubach, L. 1995. "Downsizing: How Quality Is Affected as Companies Shrink." Quality Progress 28 (4): 23-25. Spreitzer, G.M., & Mishra, A.K. (2002). To stay or to go: Voluntary survivor turnover following an organizational downsizing. Journal of Organizational Behavior, 23, 707-729. Wiesenfeld, Batia M., Brockner, Joel, Petzall, Barbara, Wolf, Richard, & Bailey, James. (2001). Stress and coping among layoff survivors: A self-affirmation analysis. Anxiety, Stress and Coping, 14, 15-34.

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INTERNALIZATION VS. EXTERNALITATION OF HUMAN CAPITAL STRATEGY: A TRUST CLIMATE PERSPECTIVE Chih-Yuan Wang1 and Nien-Chi Liu2 National Central University, Graduate Institute of Human Resource Management, No.300 Jhongda Rd., Jhongli, Taoyuan, Taiwan, 974407001@cc.ncu.edu.tw, (886)34229588 2 National Central University, Graduate Institute of Human Resource Management, No.300 Jhongda Rd., Jhongli, Taoyuan, Taiwan, nliu@cc.ncu.edu.tw, (886)3422-9588 ABSTRACT We extend human resource management thinking regarding how human capital strategies affect the trust climate and then facilitates employee outcomes. An empirical study of 497 employees employed in 25 IC design companies in Taiwan shows that internal human capital strategy enforces trustworthy perception, which in turn elicits positive outcomes. In contrast, external human capital strategy may create a cautious perception that negatively relates to employee outcomes. The results suggest that firms need to carefully choose their humancapital-enhancing approaches as well as the ways they implement them in order to effectively elicit appropriate employee outcomes. Keywords: Human capital strategy; trust climate; social exchange theory; employee attitudes and behaviors INTRODUCTION Strategic human resource management (SHRM) theorists have devoted much effort toward the relationship between human resource (HR) practices and organizational performance [12]. In particular, it is proposed that superior competitive advantage is achieved when multiple practices are combined into a coordinated system or a complementary bundle, also known as high-performance work practices (HPWPs) [24]. However, there is much confusion about how the substitutes among HPWPs can really work and motivate employees. Research have proposed that some HR practices may produce ‘deadly combination’ when one practice substitutes another and send inconsistent or conflicting messages [9]. For example, there is a typical ‘make-or-buy’ dilemma between internal development and external staffing practices [23]. Internal approach brings about greater stability and predictability of a firm’s stock of KSAs. External staffing approach acquires ‘ready-made’ talents from outside labor market. Although these two human capital strategies are regarded as important parts of HPWPs [18], the underlying philosophy might be distinct. Indeed, it may lead to different attributions that employees make toward the purpose of management in implementing these human capital practices [26]. This study suggests that the two human capital strategies are likely to be substitutes, and employees may perceive in a different way toward these practices. We propose that the core mechanism between human capital strategies and employee outcomes is trust climate. Trust is one’s expectations, assumptions, or beliefs about the likelihood that another’s future actions will be beneficial, favorable, or at least not detrimental to one’s interests [27]. When firms adopt internal human capital strategy as principal development mechanism, employees would like to believe that their efforts are worth for future advancement. They would like to establish a long-term commitment and investment relationship with the firm to collaborate 240
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and help others [15] [29]. In contrast, external human capital strategy reflects a short-term and purely economic exchange relationship. This situation may hardly result in voluntary reciprocal obligations from employees to contribute off-role behaviors because implementing well-specified job is the only expectation in this exchange relationship [29]. Therefore, it is interesting and worthwhile to investigate to what extent of trust climate within an organization will be influenced by these two human capital strategies simultaneously, as well as their subsequent effects on employees’ attitudinal outcome of affective organizational commitment and behavioral outcome of organizational citizenship behavior (OCB). LITERATURE REVIEW AND HYPOTHESES Human capital simply refers to individual employee’s knowledge, skills, and expertise that provide economic value to firms [31] [32]. The premise of SHRM studies is that HR practices constitute investment in human capital to create sustained competitive advantage of a firm [32]. Traditionally, firms can increase human capital by internally developing the knowledge and skills of their current labors or attracting individuals with high levels of knowledge and skills from the external labor market [23]. However, our focus of here is not further to discuss the antecedents of human capital strategy. In our view, both identifying and attracting potentials from the outside and developing and retaining human capital within the firm are important. The problem is that ‘make-or-buy’ decisions on human capital strategies may influence employees’ perceptions on organizational climate, and then their subsequent attitudes and behaviors. To explore the relationships of human capital strategies and employees’ outcomes, we first examine the theoretical and empirical findings for both internal labor market and external labor market. Internal and External Human Capital Strategies. Internal human capital strategy is considered as an important part of HR practice in acquiring talents and motivating employees [12] [18]. Several studies have proposed that the reasons why organizations promote employees from within [6] [22] [23]. First, specific human capital can be kept. Firms utilize promote-from-within to retain employees with firm-specific skills. Second, internal human capital strategy reduces uncertainty. For the current employees, firms have abundant information advantage over external labor market and avoid the risk of adverse selection. The third and the most important reason is that firms can elicit self-commitment from employees, that is, internal promotion as an incentive system. According to the human capital theory [7], both employers and employees evaluate the advantages and disadvantages whether their rewards or feedbacks are worthy of continued investments. Tsui and colleagues [29] suggest that both employers and employees hold expectations about the nature of exchange and then affect the social process. When employers treat employment relationship as a combination of economic and social exchange, they are willing to pay more attention in employee wellbeing [29]. Furthermore, employees are given ample opportunities and a strong motivation to develop their own career on a long-term relationship with the firm and engage in collaborative behaviors [3] [10]. Contrary to the internalization, the externalization of human capital has been concerned that it may reduce employees’ commitment toward the organization. In the essence of exchange, Lepak and Snell [23] used the term ‘symbiotic’ to illustrate the relationship between employees and employers. Employers search for job applicants who have relevant skills to quickly implement designated tasks. Employees ‘sell’ their talents to a variety of 241

organizations to exchange the highest returns on human capital investment. Neither the employers nor employees bear any further obligations and expectations to receive anything from the other party beyond the exchange. Since externally oriented firms less concerned employment security and personal potential, employees pay much attention in investing themselves and seeking next employment opportunity rather than developing social exchange with the firms [3]. Therefore, employees working in an externalization setting may engage only in their core tasks but not for non-specified job behaviors. That is, citizenship behaviors or other helping behaviors are likely to be low because such behaviors are not expected in a symbiotic relationship [23] [29]. Drawing on the above rationale, we propose that the following hypotheses: Hypothesis 1: Employees will show positively (a) affective organizational commitment and (b) OCB when firms are with higher emphasis on internal human capital strategy. Hypothesis 2: Employees will show negatively (a) affective organizational commitment and (b) OCB when firms are with higher emphasis on external human capital strategy. Trust Climate as a Mediator. Trust is the essence of social exchange relationship in which employees will engage in positive work-related behaviors as currency for reciprocating their treatment (Robinson et al 1994). Several studies have also proposed that trust is a determinant of success or failure of HR activities [27] [30]. Trust begins with an exchange of activity, tangible or intangible, and more or less rewarding or costly, between two or more persons and develops a mutual obligation [30]. That is, employees should perceive the reciprocated care and concern from the company; then, they will put forth more efforts in learning and demonstrating their KSAs as reciprocity. Thus, in an internalization setting, trust is a manifestation of social exchange and elicits the expression of mutual investment, affection, and long-term relationship. In contrast, when employees work in a mistrust environment, they will seek to reduce their vulnerability by emphasizing only those performance areas that can be objectively tabulated and defended [11] [17]. Executing external human capital strategy is difficult to elicit employees’ willingness to show altruistic cooperative behaviors because these behaviors may be perceived as risk from employees. Thus, an outward-oriented human capital strategy is less likely to induce employees’ vulnerability to act benevolently and engage in non-specified behaviors. These arguments suggest a mediating effect of trust between human capital strategy and employee attitudes and behaviors by hypothesis 3 and 4. Hypothesis 3: The link between internal human capital strategy and (a) affective organizational commitment and (b) OCB is positively mediated by trust climate. Hypothesis 4: The link between external human capital strategy and (a) affective organizational commitment and (b) OCB is negative mediated by trust climate. METHODS Sample and Data Collection. We limit our participants only in IC design industry in Taiwan. According to the lists of Taiwan Stock Exchange (TSE) and traded over the counter (OTC), there are totally 92 companies within the industry as our targets. We mailed a survey packet to HR director of these 92 companies in January 2009. Each company would receive 3 HR questionnaires and 35 employee questionnaires. The first questionnaire, responded by the 242

01 -.e.01 -. Tenure 485 3.08 -.40 * (. Trust Climate 497 3. The study includes two human capital strategies as independent variables. Commitment 494 3.09 * p < . A 9-item by [16] is used to measure OCB. Standard Deviations. means.41 ** . which assess internal selection and career development practices.62 . and Correlations for All Variables Variables N Mean SD 1 2 3 4 5 6 7 1. used to measure organizational commitment. The results of Model 4 and Model 7 indicate that TABLE 1 Means. Sex 491 . Three months later.05 -. trust climate and assess the demographic characteristics. Internal human capital strategy is measured by 5 items from the study of [13]. rwg(j)) which refers to the absolute consensus in scores furnished by respondents for 25 firms [19]. External HCS 497 3. External human capital strategy is measured by 5 items from the prior studies [28] [30]. the value of rwg(j) is between .58 .23 2. The employee questionnaires.85 and . PhD = 22) 243 c . b Sex is a dummy variable (1=male.02 .88) b - 6. which assess internal career opportunities. we separately average the scores of trust within each firm to stand for each firm’s trust climate. We then compute interrater agreement (i. is used to measure firm’s human capital strategy. we receive 49 HR questionnaires and 497 employee questionnaires from 25 IC design firms.87) 5.65 . standard variations. OCB.14 ** . master = 18.25 ** . ** p < . Using a scale from 1 (strongly disagree) to 5 (strong agree). RESULTS Table 1 presents the sample size.e.90) 4. university = 16. For all firms.38 -. Cronbach’s alpha and correlations for all variables.37 .96. a HCS = Human Capital Strategy.26 ** (. Measures.69) 3. Employees were asked to assess the degree to which they agreed from 1 (strongly disagree) to 5 (strongly agree).04 -.65 .80) a 2.Org. Thus.HR managers. Trust is measured with a 4-item scale adapted from [14].10 * -.83 .00 -. Affective organizational commitment is measured by 8 items reported by [1]. Internal HCS a 497 3.11* 8.56 (. All items are measured on a scale from 1 (strongly disagree) to 5 (strong agree). This study uses two criteria as our outcome variables. The figures in diagonal are Cronbach’s alpha. Table 2 presents the results of the Ordinal Least Square (OLS) regression.64 .07 * -.31 .07 .10 * . OCB 493 3.01.11 1. 0=female) Education level is recorded from categories variable to continuous variable based on years of school education (i. Mediation analyses [4] are conducted to test whether trust climate mediates the relationships between human capital strategies and employees’ outcomes.49 .10 * .03 .66 ** (.35 -.32 ** - 7.09 * -.04 .24 . Education 486 17.17 ** (.48 .07 -... suggesting strong agreement among the respondents within each firm. and from the study of [10].07 -.01 . we asked HR managers at each firm to rate each item of human capital strategies.05.

454** .e. 0=female) c Education level is recorded from categories variable to continuous variable based on years of school education (i.02) (.00 ** (.01 Unstandardized coefficients are reported.51) .08) -.18 ** (.41 ** (.04) -.131 .01) (.01) .023 5.e. b s.00 .01 (. b s.023 .e.02) (.033 . b s.10 * .01 -.TABLE 2 Results of Hierarchical Regression Analysis Trust Climate Organizational Commitment OCB (N=483) (N=480) (N=479) Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7 Model 8 b s.004 1.05 * .06) -.09 * (.048 12.04) (.01 (.01) -.01) -.07 (.02 (.185 .08) .60) 3.22 ** (. ** p < .235 .062 .30) 3.05.687 * .79 ** (. b s. master = 18.03) -.38) 1.13 ** (..01) (.01 * (.81 ** (.05) (.02 .e.e.02) (.090** -.08) -.014 .055 28.00 .052 .e.02) (.02 .077 .14 (.05) -.01 a a Variables Intercept Sex b Education Tenure Internal HCS External HCS Trust Climate R Adjusted R2 ∆R2 ∆F 2 .02) (.008 2.017 . university = 16. a HCS = Human Capital Strategy b Sex is a dummy variable (1=male.133 78.114 31.04) -.01 (. b s.10 ** (.651 .e.18) 4. b s.82 ** (.56 ** (.38 ** (.10 .01) .07) -.07) (.08) . 3.04 (.02) (.04 * .541** .04 * .06) -.47) -.663** * p < .07) (.08) (.05 (.44 ** (. the figures in parentheses are standard errors.01) -.010 2.09) .01) .010 .e.06) (.088 .04 * .02 .04) .37) 3.122 .01) (.00 (.14 (.04) .30 ** (.05 * .23) 2.08 -.01 (. b s.195 .66 ** (. PhD = 22) 244 .e.06 ** (.01) .58 ** (.278** .

exchange. contribute. That is. According to social exchange theory [8]. employees may be more sensitive to outward-oriented human . we also provide evidences that employees just gain contradictory perceptions from these two human capital strategies. How organizations facilitate a climate of actively participation. Model 8 shows that when trust climate is entered into the equation. The success of IC design companies relies on invention and innovation in their business strategy.internal human capital strategy has significantly positive effect on organizational commitment but an insignificant effect on OCB. education and tenure. External human capital strategy has significantly negative effect on organizational commitment and OCB. we also find that external human capital strategy affects organizational commitment and OCB through trust. First. It is much important for our research participants that IC design industry is facing a relatively dynamic environment and short-life-cycle product market. It’s much important because most of our research participants are R&D professionals employed in IC design industry. Employees are not only required to put forth greater efforts on knowledge creation and exchange. trust does not mediate the relationship between internal human capital strategy and OCB.05) in affecting OCB. However. Hypothesis 3a and 4a are supported that trust climate fully mediates the relationship between human capital strategies and organizational commitment.14 (n. Furthermore.10 (p < . Some important implications arise from the above findings.s.) separately. The possible reason is that trust is easier to destroy than create [2].08 (n.) and b= -. Therefore. As predicted. but also expected of emotional attachment which keeps firms’ human capital investment. 2a and 2b are therefore supported. Second. The firms deploy a significant percentage of their financial resources to R&D and employ a relatively high percentage of knowledge-intensive professionals who learn. Hypothesis 1a. Model 5 shows that when trust climate is regressed on organizational commitment. a long-term mutual investment relationship should be developed when individuals perceive high levels of trust.s. the regression coefficient of external human capital strategy has declined from -. Similarly. assimilate. and combine their KSAs [25].22 (p < . We argue that the core mechanism in the reciprocal relationship is trust climate. the regression coefficients of internal human capital strategy and external human capital strategy decline significantly to b= . the results revealed that internal human capital strategy indeed elicits employees’ affective attachment and external human capital strategy has negative relationship with affective commitment and OCB. mutual trust and effective communication to induce spontaneous sociability is a key to gain competitive advantage [4] [21]. employees would evaluatethe treatments by employers and then decide exchange relationship with them. Hypothesis 4b is supported that external human capital strategy affects OCB through trust climate. Model 2 shows that both internal human capital strategy and external human capital strategy are related to employees’ perception of trust after controlling sex.01) to -. DISCUSSIONS This study tries to examine how human capital strategies affect employees’ perceptions of trust climate and then influence their attitudinal outcome of organizational commitment and behavioral outcome of OCB.

the cross-sectional research design precludes our inferences about causal relationship. It is possible that other climates are appropriate to explain the effects of HR practices on desirable outcomes.P. & Rodgers. NY: John Wiley & Sons.M. As with most studies. D. climate of trust among employees has been damaged. and Statistical Considerations. 1983. [4] Barney. Exchange and Power in Social Life. we do not consider the influences of contingent variables which may affect the research result. R. [9] Boxall. J. Luck. 1173-1182. [5] Baron. 32(10). & Prucell. IL: University of Chicago Press. 11(6). 2000. Management Science.A. 1-18. 1986. The Moderator-mediator Variable Distinction in Social Psychological Research: Conceptual. R. 2000. 1231-1241. The last limitation is that we only discuss the role of trust in mediating the relationship between HR practices and individual outcomes. 51(6). Internal Promotion versus External Recruitment in Industrial Plants in Spain. & Kenny. P. [8] Blau. Strategic. Journal of Occupational Psychology. However. are easily to acquire ‘ready-made’ human capital. REFERENCE [1] Allen. A. J. 183-203. [2] Barber. How Are Internally Oriented HRM Polices Related to Highperformance Work Practices? Evidence from Singapore.E. 59(3). or more than one dimension of organizational climate will be affected due to the nature and scope of the particular HR practices [20]. [6] Bayo-Moriones. New Brunswick.S. 451-470. B. First. 2(2). 1986.A. 1990. G. 2006. We provide initial evidence that outward-oriented human capital strategy. & Meyer. International Journal of Human Resource Management. Industrial and Labor Relations Review. and Business Strategy. P. J.M. Finally. though SHRM researchers have devoted much effort toward understanding the combination effects of HR practices [24]. more studies need to be addressed. M. [7] Becker. The Measurement and Antecedents of Affective. The Logic and Limits of Trust. Journal of Personality and Social Psychology. N. our research has several limitations. Chicago.J. [3] Barnard. such as competitive compensation and extensive selection process. and Normative Commitment to the Organization.capital strategy than inward-oriented human capital strategy because the former injures their expectation and weaken the vulnerability. 63(1). Second. & Ortín-Ángel. 1986. P. More studies to investigate the effects of other social mechanisms will be valuable. 1017-1046. Continuance. 1975. such as intensive training for teamwork but appraisals for individualistic behaviors. 246 . Human Capital. limited efforts have been spent on understanding how these practices interact with each other and whether HR bundles result in a contradictory or deadly combination [9]. Whether the same dilemma appears in different set of HR practices or different industries. Strategic Factor Markets: Expectations. Strategic Human Resource Management: Where Have We Come from and Where Should We Be Going? International Journal of Management Review. decreases their affective commitment to organization and willingness to represent OCB. NJ: Rutgers University Press. in turn.

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Boston.W. M. & Tripoli. Pearce. and Firm Performance. [30] Whitner. 337-360. D.A. 836-866. [32] Youndt. Journal of Managerial Issues. 1997. A.P.W.M.[29] Tsui. and Organizational Performance.. E. M.A. Snell. Intellectual Capital. J. 1997. August.L.A. Human Resource Management.. [31] Youndt. 39(4). 1089-1121.. 40(5). Dean. 16(3). Manufacturing Strategy.. Alternative Approaches to the Employee-organization Relationship: Does Investment in Employees Pay Off? Academy of Management Journal. Academy of Management Journal. M. 1996. L. MA. Porter. J. Human Resource Configurations. Paper presented at the Academy of Management Meeting. S. Patterns of Social Exchange: The Relationship between Perceptions of Human Resource Practices and Employee Attitudes. S. 2004..S. A.A. & Lepak. & Snell. 248 .

249 . were considered as "work-in-progress" and were accepted as a "developmental-paper". Some the papers submitted as "full-paper". based on reviewers' comments and internal review.DEVELOPMENTAL PAPERS* * These papers were either submitted as a "full-paper" or as a"developmental paper". The ones submitted as "developmental paper" were not sent out for blind review and a determination was made based on internal review.

com. These outcomes are consistent with many past researches in the same field. 1985). It has been compared to distributive (McFarlin and Sweeney. and several other variables.e.h. the acts that are perceived to be just by majority of individuals. Procedural justice deals with the norms about the proper procedures (Lind and Tyler 1988). This study judged the employee’s perception of procedural justice and its effects on organizational commitment. (2) consistency. Justice is considered to be a social phenomenon if Cropanzano and Greenberg (1997) are to be believed for their view of justice i.afridi@gmail. correctability and (6) representativeness . PROCEDURAL JUSTICE AND CORRELATES Procedural justice has been analyzed by different angles such as the influence of work environment on the perception of fairness (Greenberg. organizational commitment. PROCEDURAL JUSTICE The concept of procedural justice deals with the fairness of procedures governing decisions as perceived by individuals. (4) ethics. Phone: +9291-5829988 Fatima Junaid (Co-author). organizational commitment and intent to leave the workplace.PROCEDURAL JUSTICE AND ITS EFFECTS ON ORGANIZATIONAL OUTCOMES Nida Hameed Afridi (Author). Hayatabad. (3) unbiasedness. Representativeness has been erased because it overlaps with the concept of voice. This concept has 250 . The findings achieved after the data analysis suggests that procedural justice has a significant positive relationship with organizational commitment and job satisfaction. Peshawar. Phase 7. organizational commitment. job satisfaction ORGANIZATIONAL JUSTICE The concept of justice is said to be first grounded in the social exchange theory. Keywords: Procedural justice. turnover intention. concern of the resources obtained during the process or as an outcome. job satisfaction and turnover intention in the private banking sector only. 1986) for its effects on job satisfaction. 1990a). are just. Phone: +92091-9217452 ABSTRACT This study attempts to find out the importance of justice in the private financial institution like banks and to determine the employee satisfaction. The research is conducted by personal visits to nine different private banks of Peshawar. Leventhal( 1976: 1980) has given the attributes Of procedural justice : (1) accuracy. Institute of Management Sciences. Institute of Management Sciences. Peshawar. (5). fatimaajunaid@gmail.e. 1992) and interactional justice (Bies and Moag. Voice has been discussed by Thibaut and Walker (1975) where they explained the concept of instrumental and non instrumental voices. nida. Hayatabad.com. It is the equity and the perceived fairness in order to make decisions (Folger and Greenberg. turnover intention. Phase 7. The methodology used for the collection of data is questionnaire. On the other hand the association of procedural fairness with turnover intention is found to be negative. It represents that procedural as well as distributive justice has a single justice motive – the resource motive i.

2005) and it is justified because the rewards and compensation received by the employee are reflective of his success and failure in performing a task. 2004). There are several reasons that compel employees to quit from one organization to another. 251 . The initial researches were carried out by Greenberg (1979). If their jobs are justly evaluated. Mellor.been further explained by Greenberg and Folger (1983) that if the employees are given an opportunity to express their opinion in the decision making process affecting them. Loquet. Harrison.” On the basis of the above discussion.Cropanzano and Folger (1989) and Tyler ( 1990) showing the relationship between procedural justice and these behavioral and organizational constructs. higher will be job satisfaction and organizational commitment which will in turn lead to a decreased level of turnover intention (Poon. The image theory model (Beach. Brownell. Therefore. They concluded that “the great practical value of procedural justice lies in …its value as a source of… satisfaction. 1990) has analyzed that employees leave the organization only when they have discovered the reasons for leaving. The effects of job related stress (job stress). the following hypothesis can be proposed: Hypothesis 1: Procedural Justice Is Positively Related To Job Satisfaction. Turnover intention is a very important issue as Robbins (1998) puts it as a behavior that leads to leaving the organization as well as looking for a new job. It is also one noteworthy construct that is influenced by the job satisfaction and organizational commitment of the employee (Mobley. Job satisfaction and organizational commitment are mostly studied together. A research by Kim (2009) also suggests that when individuals were fairly treated they showed more commitment towards the organization as well as a higher degree of trust and satisfaction. managers always strive to minimize turnover. Job satisfaction is an extremely essential dependant variable as evident by the Lind and Tyler (1998) research in which they discovered job satisfaction as one of the principal consequences of procedural fairness. it leads to job satisfaction (Hopwood. Moore.Folger and Konovsky (1989). 2004). 1982. it enhances their perception of fairness but also brings with itself a possibility of a much lower level of fairness perception if the authorities fail to respond to the employee’s input. Job satisfaction.g. Higher the perceived fairness. though both procedural and distributive justices are related to organizational commitment. Job satisfaction is undoubtedly a major behavioral outcome if the perception of fairness is higher in employees. organizational commitment and turnover intention are taken as dependent variables. Every organization makes huge investments in training. lack of commitment in the organization and job dissatisfaction make employees to quit (Firth. McFarlin and Sweeney (1992) seconded the findings saying that distributive justice was a much better predictor of personal outcomes like job satisfaction whereas the reverse was true for procedural justice that predicted the organizational outcomes like organizational commitment and evaluation of the supervisor. developing and maintaining their employees. Lau and Sholihin. A fairly recent research by Arti. Kuldeep & Ekta (2009) also indicates that distributive justice is significantly related to job satisfaction whereas procedural justice does not. 1982). 1972:174). The extensive work of Folger and Konovsky (1989) found that procedural justice is a much stronger predictor of organizational commitment as compared to job satisfaction. Several studies link performance evaluation procedures to job satisfaction (e. 1992.

Magner and Welker. Steer and Porter (1979) for organizational commitment etc. The relationship of turnover intention as a dependent variable along with procedural justice is also studied. Knowles (2004) research discusses some personal. if they perceive the organizational procedures to be unfair and compensation to be inadequate. 1972. Welker& Campbell. Supporting the finding of Knowles (2004).390 units will be witnessed in organizational commitment. it is causal in nature. It confirms the positive relationship between procedural justice and organizational commitment and it also shows that if a unit increase in procedural justice happens to occur. they hold unfavorable views of their organization which give rise to lower organizational commitment (McFarlin and Sweeney. It indicates that procedural justice has a positive relationship with job satisfaction and the value indicates that one unit increase in procedural justice will increase the job satisfaction by .e.05 so it shows that procedural justice has a significant relationship with job satisfaction i. 1992).297. The model for job satisfaction is significant but the relationship between procedural justice and job satisfaction is weak. an increase of 0. METHOD This research is a cross sectional (one shot) study which is based on data collected at one point in time. For organizational commitment.. 1995). If employees believe that the organization’s procedures for the determination of compensation and evaluation of performance are fair. The significance value lies below 252 . Simple random sampling was used for the selection of banks. Hence. though it is positive in nature.g Mowday. 1994. they do not develop adverse feelings towards the organization even if their compensation is inadequate On the contrary.390). it is hypothesized: Hypothesis 3: Procedural justice is negatively related to turnover intention These hypotheses demonstrates a relationship of the dependant variables with procedural justice that has been previously analyzed by Folger and Konovsky (1989). 1992. As we can see that. The employees of the nine private banks were surveyed. procedural justice is a predictor of job satisfaction. The instruments used for the variables were previously used several times e. we found out that the value of beta is positive (0. McFarlin and Sweeney (1992).Another dependent variable is organizational commitment. 1989. I propose: Hypothesis 2: Procedural justice is positively related to organizational commitment.3 %. Folger and Konovsky. RESULTS For job satisfaction. 101 employees gave their response with the response rate of 67. Accordingly. It is perceived to be associated with the fairness of procedures (Hopwood. the value of beta is positive (. Altogether. contextual and institutional factors that can prove to be principle antecedents of turnover intention. The data were collected through questionnaires. Magner. McFarlin and Sweeney. the significance value is below 0.297). A total of 150 structured questionnaires were distributed by the researcher herself. Poon ( 2004) finds out that disrespectful behavior and unfair reward system can influence turnover compelling the employee to leave the organization.

The banks were randomly selected and the results are based only on branch level analysis. This finding is congruent with that of McFarlin and Sweeney (1992). Commitment is extremely important for every organization in order to reach their set goals and targets. For turnover intention. The relationship between them is found to be significant and that they have a positive association with each other. job satisfaction and turnover intention.05 even in this case indicating that procedural justice is a significant predictor of organizational commitment.e. 1989) carried out on procedural fairness. The findings in the research report indicate the procedural fairness is one of the predictors of job satisfaction. Some researches regarding procedural fairness do not consider it to be a very strong predictor as far as job satisfaction is concerned (McFarlin and Sweeney.e. Turnover intention is also in a significant relationship with procedural justice but the relationship is found to be weak. the value of beta is negative which means that procedural justice has a negative relationship with turnover intention. This means that fair procedures effects an employee’s satisfaction at the work place. Folger and Konvosky.23). The model for organizational commitment suggests that the model is significant and the relationship found between them is weak.com) 253 . The model for turnover intention is also significant but the relationship of turnover and procedural justice is weak. On the other hand.h. and is negative in nature. This shows that.. It predicts that according to our study.0. though procedural justice is not a very significant predictor of organizational commitment yet it is a stronger predictor than job satisfaction. The positivity of the relationship shows that higher procedural justice is a determinant of higher organizational commitment. These findings are fairly consistent with the findings of previous researches (McFarlin and Sweeney. The effect was studied on three important aspects of organizational commitment. 1992.390). yet there exists a positive relationship between the two. the fairness of the processes being run in the private banks of Peshawar. The significant value is lesser than 0. A change brought about in the organization commitment due to the effects of procedural justice happens to be 39 %( β=0. turnover intention does not have any major effect due to procedural fairness in the processes of the organization.afridi@gmail. Our results are also aligned with the past researches indicating only a 30% (β= 0.05 even for turnover intention which means that procedural justice is a predictor of turnover intention.228 units change in turnover intention. Folger and Konovsky (1989) and Konovsky and colleagues (1987). 23% (β= 0.297) change in job satisfaction due to procedural justice. the significance tests of procedural justice considering organizational commitment as dependent variable shows quite a significant association. 1989). 1992. Folger and Konvosky. The amount of change brought about by perceived fairness in the intent of leaving the organization is very low i. DISCUSSION This study was conducted to in order to judge the effects of procedural justice i. References available upon request from Nida Hameed Afridi (nida. It is predicted that employees who are treated fairly even go out of their way to favor the organization. It also explains that a unit change in procedural justice will bring a change of 0.

Welingkar Institute of Management Development & Research. 254 . increasing competition and significantly higher demands on limited HR resources. sudhir.com Sudhir Rai. each with very different needs. near Matunga (Central Rly).gupta@gmail.rai15@gmail.N. ripple. +91-9821738819 .com Prin L. India – 400019 ABSTRACT In an age of fast changing markets. increased regulatory compliance issues. Mumbai. The key challenges they have come up are: What are each generation’s most pressing concerns with regard to choosing a new job? How do we attract the right mix of employees to meet our skill needs now and in the future? How can we effectively leverage the experience and knowledge of each generation to benefit the whole organization? How can we balance meeting the diverse needs of our employees in a simple. In this paper we have highlighted the three most critical and serious workforce challenges and designed an integrated solution to alleviate these issues.INTEGRATED WORKFORCE ENRICHMENT SOLUTION FOR MODERN WORKFORCE CHALLENGES Ripple Gupta. limited budgets. These issues are: • • • Multi Generational Workforce Issues & Generational Dynamics Meaning of Work and Employee Retention Cross-Cultural & Geographical Workforce Differences The employee needs to overcome these challenges to be successful at work and the organization needs to overcome these to grow in a global economy. drivers and learning styles. most workforce development strategies have become obsolete.+91-9920337178. WORKFORCE CHALLENGES AND SOLUTION Challenge 1: “Multi Generational Workforce Issues & Generational Dynamics” The workforce now comprises four generations. Lakhmi Napoo Road. costeffective manner? Solution: Multi-Generational Workforce Collaboration Model This solution shows how the rights and responsibilities of the employees and the organizations can be brought together to resolve the multi-generational workforce issue. Maharashtra.

Systematic Workforce Retention Model 255 . Solution: There are three primary drivers of employee retention: We suggest workforce retention model. help them out.What Employees can do What Organizations can do Share knowledge. new ideas. work towards a common goal and see the positive results of their pitching in. energy and resources but results are worth it. get answers instantly Knowledge Management Display flexibility to collaborate and accept ideas of others Collaborative Innovation Challenge 2: “Meaning of Work and Employee Retention” The workplace should be a place where employees can make constructive contributions by doing their job well and where they have a chance to engage with others. Employee retention involves being sensitive to people's needs and imbibing a sense of belongingness towards the company. new ideas. which incorporates the 3 drivers in the whole process. lessons learned. best practices and inculcate mentoring Workforce Planning Analytics Find experts irrespective of generation. To retain good people they should be supported in terms of Environment. Growth and Compensation. best practices Learning & Development Share knowledge. Employee retention takes effort. Support. lessons learnt. Relationship.

serving coffee) Emotional or motivational: confidence and commitment to adapt to a new culture (e. shaking hands..Challenge 3: “Cross-Cultural & Geographical Workforce Differences” Due to globalization companies have started spending more resources in the process of recruiting and training workforce to work in cultures that are foreign to them.g.g. Cultural Intelligence (CQ) can be defined as: your capability to grow personally through continuous learning and good understanding of diverse cultural heritage..g.. Solution: Cultural Adaptability Evolution Model 256 . shared preferences) Physical: adopting habits and gestures of another culture (e. punctuality. overcoming obstacles and setbacks) It is the responsibility of employers to help their employees to improve their CQ and employee in-turn is responsible to study and work on his cultural intelligence. Employers these days emphasis on CQ and employees should work on increasing their CQ. Cultural intelligence requires having or acquiring the following aspects: • • • Cognitive: creating learning strategies to recognize cultural traits (e. wisdom and values. and to deal effectively with people from different cultural background and understanding.

The employees should experience. behavioral and geographical diversities at the workplace and macro-environment and should readily adopt and display the similar traits as a part of continuous evolution process. 257 . learn the various ethnic. cultural. INTEGRATED SOLUTION The diagram below shows an overall view of the Integrated Solution to the aforementioned three critical workforce challenges that need to be resolved now and in near future.

Kentucky that left eight dead (at a plastics plant). 2007).1 million private industry business establishments in the United States had an incident of workplace violence in the year prior to the 2005 survey. Homicide. a dealer for John Deere equipment.edu Helen LaVan.edu Yvette Lopez. including reports of violence in the workplace. is considered the fourth leading cause of job-related deaths (OSHA. DePaul University MARTYM@depaul. Although the total number of killings in American workplaces remains relatively low. there were the recent shootings in Henderson. DePaul University YLOPEZ9@depaul. Louis that left three dead (at a power plant). Precipitating incidents can range from being laid off. Thirty-two percent of all State government workplaces reported some form of workplace violence. before eventually turning the gun on himself (Ames. killed a person whom he allegedly “targeted. Governors State University m-katz@govst. Furthermore. the most severe form of violence. For example.” then fired several more shots into the equipment. they still average more than one a day.edu Anyone who reads or listens to the news is bombarded with reports about violence within our society. was recently laid off after ten years from the company. DePaul University hlavan@depaul.a violation of company policy. As this abstract is being written the following workplace homicides have been reported: James Badasci. State government workers reported higher percentages of all types of workplace violence than did local government or private industry. the rates of homicide from customers and clients has steadily increased.edu Charles Naquin. and at Alabama University that left three dead. An employee of the Publix store in Tarpon Springs. The dismissal was related to the gunwoman being reported to management for working on her own time .edu Wm Marty Martin. The Bureau of Labor Statistics reported nearly five percent of the 7. Florida was killed in the store parking lot and another escaped injury by a dismissed co-worker. 2006).THE STATUS OF PARKING LOT GUN LAWS: ANNIE GET YOUR GUN3 Marsha Katz. 3 The musical by Irvin Berlin 258 . Lee (2009) reported that while workplace homicides did not increase between 1997 and 2007 (just over 600 occurred in 2007). Publix policy did not allow employees to bring handguns into the workplace. The Bureau of Labor Statistics (2007) reports that there were 516 workplace homicides across all employees in the United States in 2006. Local government reported 15 percent of their workplaces experience some type of workplace violence (BLS. or no precipitating incident whatsoever. being reported to management. He showed up with a shotgun. DePaul University CNAQUIN@depaul. 2009). In addition. in St.

The second type. although no one was injured (Chesteron Tribune. there seemed to be a rash of work-related violence in post offices. it has been categorized into three major types based on the assailant’s relationship to the workplace. v. 1986. convenience store employees and gas station attendants. harassment and intimidation. In general. There can be Fifth Amendment issues relating to the confiscation of the gun without due compensation. 2002). This paper will be dealing with only gun violence in the workplace. known as "Crazy Pat" to some who knew him. the perpetrator. Remarkably. Attorney General of Florida ("Florida Retail")) handguns are permitted in the parking lot where the homicide occurred (Kennedy. 259 . For example. the offender is an employee or former employee of the workplace (LeBlanc. and then retrieved a shotgun from his car that he fired twice at a state Department of Workforce Development office. the trauma associated with a gun in the workplace can be exceedingly psychologically damaging. Barling (2009) notes that there are many definitions of workplace violence. He faces a charge of attempted murder. the perpetrator of the violence has no legitimate business relationship with the targeted workplace and enters the establishment to commit a criminal act such as robbery. the Fourteenth Amendment prohibits the deprivation of liberty or property without due process of law. Moreover. This can occur when gun owners are deprived of their property interest in their guns or when owners of workplace property are deprived of their right to use their property. 2009).. state and municipal ordinances are seemingly in conflict with each other. The legal issues surrounding the Second Amendment are complex. According to Florida parking lot law. Even if there is no resulting death. at a post office in Edmond. (which has recently been upheld in Florida Retail Federation. This type of behavior has captured the public’s attention. shot two of his supervisors then continued his rampage killing a total of 14 co-workers and injuring seven others.but the gunwoman brought one anyway. Mitch Daniels which allows workers to keep firearms locked in their vehicles while parked on company property is a bad idea. The Workplace Violence Research Institute’s definition of workplace violence includes threats. After this incident. In the third case. 221 years after the Second Amendment (Right to bear arms). "going postal (Montaldo. employers' duties under OSHA would seemingly conflict with the aforementioned constitutional protections. there is still no agreement on the role of possessing guns within the workplace. there is a Constitutional Amendment right to bear arms. hence the term. the statement “going postal” came into our vocabulary on August 20. Ultimately. On one hand. Kelloway. Schat and Kelloway (2005) definition is a behavior by an individual or individuals within or outside an organization that is intended to physically or psychologically harm a worker or workers and occurs in a work-related context. The Indiana Chamber of Commerce says an office shooting in Portage shows why the law recently signed by Gov. when employee Patrick Henry Sherrill. Furthermore. Inc. Oklahoma. 2010). In the first type. Police say a 60-year-old employee became upset during his job review. On the other hand. Some have handgun bans while others permit gun possession in workplace parking lots. he turned the gun on himself and committed suicide. 2010). is a recipient of an object or service provided by the target workplace. The most common victim are health care provides and social service employees. The major occupations that experience this type of violence are taxicab drivers.

2005. except a convicted felon. a number of interested companies filed suit. such as when a government regulation has substantially devalued a property. The Fourteenth Amendment prohibits the deprivation of liberty or property without due process of law. In the District of Columbia v. or from transporting and storing firearms locked in or locked to a motor vehicle on any property set aside for any motor vehicle” (Steines. Thus. 2005). These raise two important social issues: what about the legitimate rights of gun owners who are hunters and court challenges on both sides of the issue. the strictest in the country. the court declined to say whether the Second Amendment in general applies to state and local governments. employer. A taking can occur even without the actual physical seizure of property. a California court disagreed on the issue. there have been several recent court cases on this issue. leading many legal experts to predict a further expansion of gun rights (Schwartz. tenant. Judge Easterbrook ruled that there was no basis for the court to apply the Second Amendment to the states. The amended sections states: “No person. also known as carrying-concealedweapons laws ("CCW laws"). establish. With the advent of shall-issue-concealed-carry laws. the Supreme Court struck down parts of Washington's gun control ordinance. However. seeking to enjoin the law's enforcement. not the appeals court should make such a decision.” Several months later. or enforce any policy or rule that has the effect of prohibiting any person. Oklahoma became the first state to pass such a law by adding new sections to the Oklahoma Self-Defense Act and the Oklahoma Firearms Act on March 31. Heller (2008). 2009). Steines. property owner. These laws are now known as the “parking lot laws. 260 4 . 2004. 2009). while it held that the Second Amendment guarantees a personal. However.Some studies have found that businesses that allow firearms are five to seven times more likely to have a homicide occur on the premises than those that ban firearms (Loomis et al. or business entity shall maintain. 2008). and stated for the first time that the Second Amendment gives individuals a right to keep and bear arms for personal use. Chicago’s ban on automatic weapons and concealed handguns was upheld. He stated that only the Supreme Court. individual right to keep and bear arms. In response to the increasing number of businesses that ban firearms from their premises. many employers and gun-control advocates argue that employers must ban firearms from their property in order to provide for a safe workplace environment. from transporting and storing firearms in a locked motor vehicle. The legal issues behind gun control have been under scrutiny lately. While other states such as Florida. the National Rifle Association (NRA) is pushing state legislatures to pass laws that prohibit property owners from banning firearms from their parking lots (Erickson. However. 5 The Fifth Amendment Takings clause is when the government acquires private property and fails to compensate an owner fairly. the companies claimed that such "parking-lot laws" violated their property rights under both the Fourteenth Amendment's Due Process Clause4 and the Fifth Amendment's Takings Clause5. The National Rifle Association has been pushing for the passage of parking-lot laws in all fifty states claiming such laws are necessary for employees to be able to freely exercise their rights to self-defense. Among other assertions.. it also conceded that reasonable regulations on gun ownership might be acceptable (Miller. The differing opinions mean that the whole issue of city and state gun laws will probably head back to the Supreme Court for clarification. 2008).

Volokh. The Fifth Amendment states. 2010. Businesses may also "refuse entry or bring a criminal trespass action against anyone who violates" their policies (Beaver. the National Rifle Association has successfully lobbied for similar laws in 12 other states (Allen.Georgia. Some such terminated employees have attempted to challenge their employers' gun-free policies that led to their firings. 261 . the NRA then launched a national boycott of ConocoPhillips and erected billboards that read. there are differences in the states on not only whether or not guns can be owned by individuals.by posting signs. Thus. In addition. References available on request. a number of national and Oklahoma-based companies have challenged the Oklahoma law's constitutionality. These businesses must effectively publicize their policies . but also on whether they can be concealed and whether or not an employer can ban guns on their property including the parking lot. which suggest States have the right to ban guns. Research Plans for paper for AEPP This study will analyze Federal and State cases that are illustrative of the conflicts between Federal Constitutional Issues of the Second Amendment and States Rights including the Fifth Amendment and the Fourteenth Amendment of Due Process. 2008). Indiana was the most recent state to enact legislation that says employees may keep legally permitted firearms out of sight in their locked vehicles while they are working. The ConocoPhillips plaintiffs alleged that the Oklahoma parking-lot law was a "taking" of their property without just compensation in violation of the Fifth Amendment. Thus. Some businesses have gone so far as to fire employees who have violated their gun-free policies. "ConocoPhillips is No Friend of the Second Amendment" (Steines. it will also analyze the Federal regulations that are imposed by OSHA regulations to have a safe working environment. On October 4. "private property shall not be taken for public use. without just compensation (Steines. Furthermore. In addition. for example . and also to make recommendations for improving employee relations and subsequently reduce workplace homicides. and Kansas have followed Oklahoma's lead in passing these laws.S. 2006). 2008). in light of the disturbing levels of gun violence in the workplace the focus of this paper will be to ascertain the current legal status of guns in the workplace. District Court for the Northern District of Oklahoma issued an order in ConocoPhillips Co. v. Henry permanently enjoining the enforcement of the law against employers. 1997). Businesses that are in shall-issue states must adopt explicit gun-free policies in order to prevent individuals from bringing firearms onto their properties. the U. 2007.to encourage employees and customers to abide by the ban.

taking relationships as basis. skills. ethics of care and gender. Because of these reasons. Starting from this. time. Activities done regarding certain social problems and troubles incurred by others support issues advocated by relationship ethics. Relationship ethics developing within feminist ethics emphasize importance paid to others. self-sacrificing involves giving more importance to wellbeing of others than those of one’s own. Those studying on feminist ethics try to reveal the inadequacy of the perspective of ethical theories towards women. 1]. Pragmatically. This is a qualitative study and the opinions of ten married ten couples working as academicians at a university regarding volunteerism were obtained through individual interviews. experience and other resources by individuals with their own will in order to increase life quality and to achieve important targets for the benefit of the society without expecting a financial compensation as part of social philantrophy. Voluntariness means transferring knowledge. Concept of voluntariness also includes activities indicating care about others. and voluntariness is about working for the wellbeing of others without expecting something in return [2.VOLUNTEERISM AND GENDER IN TERMS OF ETHICS OF CARE Cigdem Kirel and Ilke Oruc Anadolu University College of Economics and Administrative Sciences Eskisehir 26470 Email: ackirel@anadolu.edu. 1-18]. Key Words: Volunteerism. It will be interesting to examine the role of gender differences in giving importance to others and sharing social responsibilities. Voluntariness and ethics of care The relationship between self-sacrificing and voluntariness is quite obvious. it can be concluded that there is no significant evidence indicating a difference regarding the volunteerism of the sample with high educational background. pp. 262 .tr. pp. 89-104] [7]. voluntariness involves individuals’ and organizations’ transferring their resources for the wellbeing of public [10. INTRODUCTION Feminist ethics criticises gender blindness and contradictions in traditional ethics and proposes gender sensitive alternatives [4. pp. concepts of voluntariness and ethics of care mentioned above must be clarified.tr Phone: (90) 22 335 05 80 Fax: (90) 222 335 05 95 ABSTRACT This study basically aims at exploring what employees (different gender) in organizations think about volunteerism in terms of ethics of care. As a result of this study. they focus on actual status of individuals and human relationships caused by the social order [14].edu. ioruc@anadolu.

social development. sustaining and repairing relationships [13] [16. Human relationships involve three components necessary to sustain care. Voluntariness. pp. Later vis-à-vis interviews were made with the individuals considering the possibility of couples being influenced by each other. This research is a qualitative case study. we can highlight these values as follows: It is important to maintaning and repairing relationships. Lack of education. care theory believes people are primarily relational not individual or free [5. The approaches from feminist theory provide a general approach for the emergence of ethics of care and the involvement of experiences by women in the process. It also focuses on broader social issues such as justice and unfairness by considering individual relationships.111]. lack of trust. FINDINGS They reported that voluntariness is the activities carried out for the wellbeing of society without expecting something in return or any kind of benefit provided as part of social philantrophy.pp. Sample population was selected from a group with an even level of education in order to determine whether they asses the subject matter in the same perspective or not. inequality in income. pp. first interview records were transcribed and then these data were analysed. Main themes of the study were defined taking interview questions as basis and subthemes were determined according to the answers of the participants.21]. Solution. Therefore. Intellect and intuition are both valued [15]. METHOD AND DATA ANALYSIS The main problem of this study is to determine the opinions of individuals in organizations about voluntariness and about non-governmental organizationsin terms of ethics of care. The main scope of the study is to discuss whether the perception of voluntariness differs according to genders on the basis of ethics of care. Motivation guides actions. Voluntary activities are believed to foster individual development. Society. pp. economic development. From ethics of care point of view. pp. Based on the quantitative research. Contributions to students’ development. membership. NGO’s. Self is interdependent with others. 10 male) were selected. Situational approach is basic to understanding and care. position.24]. The data clearly presents positive ideas about voluntariness.Care highlights various values such as not giving harm to others.43] [1. Family. giving importance to relationships with others. Awareness. time Since the current study is based on qualitative research method. pp. Problem. Subthemes were defined by classifying answers of the participants. namely being open to others. individual development and contribution for the future career. increase awareness and develop sensitivity to social issues. Women. it might also include devotion and the consideration of others’ physical and psychological needs. it is necessary to mention about the values ethics of care. Feelings and emotions are legitimate and valuable. pp.family conflict.213). 263 . No harm should be given to others.3] [12. First of all.15]. which provides various opportunities and risks for social conflicts.pp. to get used to inappropriate conditions. feelings and affection cannot be avoided while making moral judgement. In order to analyse data obtained by these interviews. accepting other creatures and supporting others when they need help [15. The study was realised in Anadolu University. Subthemes.137-138] [6] [3. Relationships. democratization. Themes. and interpersonal relationships are at micro level [11. Work. Ethics of care. is in fact a different approach [8. Individual development. satisfaction. the data cannot be realized to larger contexts. In this perspect society is at macro level [9]. 10 married couples (10 female. Education. From a different point of view.

they feel less anxious and stressful than women. this feeling of solidarity is highly likely to trigger future voluntary activities in collaboration with non-governmental organizations”. the campaigns of non-governmental organizations in Turkey simply try to fill in these gaps”. stated: “The government gives up its social practices due to increasing liberalization and the problems increase. It is inevitable that such a multiple roles conflict leads to considerable stress. This idea was stated by a male participant as follows: “I believe that this course contributes a lot to students. which is in harmony with the principles of ethics of care. it should not be a lesson and students should not chosen because it is a lesson that be passed easily. As for the question about membership to non-governmental organizations. it is clear that women tend to be interested in NGOs working on issues related to women or children. despite the fact that males have more tendencies to help their wifes for child care. However. There is no possibility to be perfect in both. Nowadays. it was found that 6 participants are members of such organizations: 3 male and 3 female. it helps students for personality development and social solidarity. However. If we are not successful in these attempts. A female participant stated: “It is impossible not to have any conflicts since these two (family and job) are quite different areas. First of all. they see that they do something useful for the society thanks to this course and have invaluable experiences they might use in the future. Finally. Since this is a collective work. most of the participants suggested economic development and quality education. In addition. who attributed the problems mainly to economy. Although male participants reported about similar conflicts. In my opinion. We cannot solve these problems without eliminating them completely. Generally speaking. Those who do not give this course stated that the projects in the course should be based on voluntariness. All of the participants thought that the course Practices in Social Services contributed a lot to students in terms of personal development.However. they are reluctant to do housework. women were observed to experience such conflicts between the family and job more than men. female participants care about taking part in voluntary activities and relationships in general more than males. The most interesting result here is that some of the couples did not remember whether they are members of a non-governmental organization or not. Another outstanding result is the insufficient number of memberships although the participants highlighted the importance of NGOs for a society. some male participants were observed to care about the time they spend in their jobs as well. so it is quite natural to have conflicts if you want perfection”. The questions about the course Practices in Social Services showed that 9 out of 20 participants have given this course at the university. Especially. The data shows that all the participants were quite sensitive to social problems. education is the main reason of social problems according to female participants. The answers given for the question about the conflicts between family and job responsibilities reflected similar ones observed in almost all societies. A male participant. male participants believed that economic inequality is the most important factor for such problems. One female participant talked about problems as follows: “all of our problems are due to lack of organized actions. It is important to create feeling of being useful for the society by serving people in the society. As for the solutions to these problems. lack of education and the continuing presence of feudal structure in Turkey”. increased awareness about social issues and acquiring teamwork spirit through voluntary activities. 264 . we just fill in some gaps temporarily.

S. 2005.242. [2] Chesters. Citizenship and Ethics of Care: Feminist Consideration on Justice. 3(1). Interviews questions created according to ethics of care values and we are trying to connect volunterism concept. New York: Routledge. 10-27. 30(4). Leadreship and Ethics of Care.C. 777-98. London: Routledge. Contracts and Kolhberg. J. [10] Schwab. Philantrophy. 2005. 2(1). Ethical Comportment in Organziation: A Synthesis of the Feminist Ethics of Care and Buddist Ethics of Compassion. The Ethics of Care and Empathy. 2004. & Dunn C. Morality and Politics. M. 1998. [3] Ciulla. 2007. Reconciling Equality To Difference: Caring (F)or Justice For People With Disabilities. 2006. [8] Meagher. C. 1994. G. T. G. 6(2). other people and family but other hand observed indivituation. 88. B. Non-goverment Organizations and Indigenous Development. [4] DiQuinzo. [16] Wood. 20(3). 208-224. 10(1). 133-147. 1996. 1-18. J. 2007. Hypatia. Who Cares? Women Care and Culture. M. M. Southern Illinois University Press. Feminist Ethics without Feminist Ethical Theory. 1999. This study may provide an approach to topic from different perspectives. [6] Engster. Turkey’s have feminine values. D. 90–104. International Journal of Value-Based Management. The Business Doing Good: An Australasian Perspective on Corporate Philantrophy.RESULTS AND DISCUSSION That study tries to find voluntariness value aspect on ethics of care. [7] Godfrey. [13] Tronto. 1998. & Young I. Feminist Ethics as Moral Grounding for Stakeholder Theory. New York: Routledge. Discussion Paper No. Hypatia. J. Journal of Business Ethics. 3-4. P. Moral Understandings.D. J.G. Business Ethics Quarterly. 50–74. 1995. Rethinking Care Theory: The Practice and Obligation to Care. & Parton N. 1993. Philispohy Documentation Center. 2002. & Sutherland D. All people sensitive society. Data showed that results very related to Hofstede’s findings in Turkish culture. 12. [5] Donleavy. [9] Nobbis. Academy of Management Review. This perspective used micro (family) and amcro (society) level. REFERENCES [1] Burton. Moral Boundaries. & Lawrance S. 109-128. [15] White. Care. [14] Walker. N. U. [11] Sevenhuijsen. [12] Slote. R. B. P. 2009. P. The relationship between corporate philanthropy and shareholder wealth: a risk management perspective. The Journal of Corporate Citizenship (JCC ) . Center for Aboriginial Economic Policy Research. International Review of Business Research Papers. Modernizing Social Work and The Ethic of Care. 213-225. Social Work&Society. 265 . Routledge.

Australia-wide tour by an A-list international artist now costs between $6 million and $10 million. The conditions of the employment arrangements are. p73] Live entertainment is expensive and risky.”[2] 266 . These activities are also labor intensive and the people working in the organizations must bear the brunt of any short fall in the box office (which is never sufficient to meet the payroll) and the solicited contributions. by and large. In particular. From this context we will examine the 21st century components of the nonprofit performing arts workforce (performers. SETTING THE FRAME Performing arts are a significant component of not only the workforce but also the preservation of our cultural heritage. depending on the act. front of the house personnel and management) to delineate the elements and conditions they share with the broader workforce and those which are unique to their chosen careers which include the elements that impinge on their role as fully franchised members of the labor force. those who work for not-for-profit organizations such as Ballet companies. “ to stage an average full-scale. and the revenue contributed by the audience that shared that moment. directors.EMPLOYEES IN PERFORMING NONPROFITS: WORKERS ADRIFT IN THE EPHEMERAL ARTS Paul Lorton. more akin to those of the 18th century than those of the 21st. Faine [1] noted.” the needs of labor and hardscrabble sources of funding have created some very unique issues for those who seek a living in an industry that may trade on their passion for the art form.edu ABSTRACT In this discussion. The event. only exists at a moment in time. When that moment has past. Jr School of Business and Professional Studies . in the finest sense of ephemeral. [1. the event is gone leaving only the memories.University of San Francisco 2130 Fulton St. Operas or Symphonies are charged with keeping the classical arts alive and actively in our present. The confluence of the emotion of “culture. technical staff. These organizations do not make a profit and have to work very hard to break even. from his long experience. as noted in the Sidney Morning Herald 3 Dec 2004. designers. perhaps recorded. but more likely be between management and union on one side confronting the source of funding on the other. that: in all probability future collective bargaining in the arts will not be between management on one side and the union on the other. we will briefly look at the history of performing artists and at the divergence of performing art forms that could be engaged in “for-profit” from those for whom profit was left behind. San Francisco CA 94117-1045 415 422 6185 email: lorton@usfca. The cost of presenting an event can be astronomical. For example.

Sets. Performing artists live to perform. Boards In addition to this list. put food on the table or guarantee the necessities of life. MODERN SCENE One of the most significant developments of the last 100 years. For example: International Alliance of Theatrical Stage Employees (IATSE) 1893. A gradual movement from the 18th century toward allowing more freedom of expression for the individual also provided performing artists with a less restrictive environment in which to display their creativity. Ushers. Mozart’s Opera Cosi Fan Tutti requires six lead singers and a chorus of 12. specifically. Box office. because they are perhaps more affected by the labor practices in these arts. for example. They need protection. Directors: Artistic Directors. [4] Other laws and regulations throughout history constrained and restricted the performing artist severely. Management: Producers. Front of the House personnel: House Management. and not uniformly treated with respect or even tolerance. They can find it by joining AGMA. he shall be beaten with a rod until he dies. The IATSE serves wide variety of skilled individual who are part of the craft of the theater and work. or writes a poem for the purpose of insulting him.[3] SOME HISTORY Performers have been around for a very long time. etc. in the 267 . or rendering him infamous. has been the union movement that codified guilds and other workers organizations under the protection of the law. we will most especially want to look at those who support the performing artist: 1. Props 2. the American Guild of Musical Artists adds a useful Schedule “C” to its contracts that define performing roles from Leading and Featured soloist to “Mute Bit” roles of supernumeraries. Technical staff : Stage Managers. artists may be vulnerable to exploitation or illegal discrimination.The components of the performing arts with which we are concerned include performers but. their skill and the beauty they create won't necessarily pay the rent. 4. Stage hands and Technicians 3. When anyone publicly abuses another in a loud voice. [5] Various organizations to protect the employment rights of those in the performing arts were established in the 20th century. Supplementing this schedule is a lengthy list of Operas and the cast requirements. A widely acknowledged first reference to public performing is found in the Twelve Tables of Roman Law: Table VII. Bizet’s Opera Carmen requires 14 named roles and a minimum of 36 in the Chorus. the American Guild of Musical Artists. LAW VIII. Designers: Costume. of course. Without forceful advocacy and defense of their rights. But their talents. Stage Directors 5.

Television Broadcast. These organizations recognize that nonprofit performing arts groups are not as capable of producing revenue as they are in producing opportunities for performers. With a for-profit company the damage can be as large and the knock-on effect substantial (think only of strikes by flight attendants during the summer travel season). [6] These are members of the labor force the attending public seldom see or. performing artists live to perform but they need to put food on the table and pay their rent just the same as those without their talent who are employed in the sectors of the economy that produce more tangible goods and services. Other groups to organize to protect their constituent skills and craft groups include: American Society of Composers. Front of House. see [5]). NO CONCESSIONS FOR NONPROFITS The various associations noted above are dedicated to protecting their workers. Treasurers and Ticket Sellers.. Laboratory. Post Production. As noted in the statement from the AGMA. the ultimate conflicts between wanting to ply one’s trade – create an ephemeral experience for an audience . For a profit producing organization. There was an impasse with enough finger-pointing to populate a year’s supply of a French glove maker. In some cases accommodation can be made (e. they are all nonprofit. Motion Picture and Television Production. 
Trade Show/Exhibition. they were one of the first groups to organize to defend their working rights and improve their work conditions. as Nutcracker seasons usually contribute 50% of a ballet company’s annual revenue (as well as a substantial amount of community support as the event is perennially popular with the young making them fans of the art form) the damage was extensive. 268 . as one provider of weapons for the stage states. This caused the whole organization to shut down and. Thus. THE KNOCK-ON EFFECT In 2005 the Washington ballet voted for the AGMA as their bargaining representative. As a consequence of the “misunderstanding” the staging of Tchaikovsky’s Nutcracker Ballet was cancelled for the season. Authors and Publishers (ASCAP) 1914 [7] Actors Equity Association 1913 [8] Screen Actors Guild (SAG) 1933 [9] American Guild of Musical Artists (AGMA) 1936 [5] Even with this range of associations available to support and represent those working in the performing arts. 
Stagehands. guest artist agreement from the AGMA. as is the case with ticket sellers and other front of the house personnel are part of a general background to which attention is seldom paid.g. Projection and AudioVisual Scenic Artists. The solution is also with them. But in most cases there is no available accommodation for a nonprofit for.following areas: Animation / Computer Generated Imagery.and need for compensation in order to continue to be able to do that leads to significant opportunities for the workers to be failed by the system. 
Makeup and Hair. the pain hits those for whom the profit is a reward. and Wardrobe.

Including The Twelve Tables. S. Authors.With a nonprofit company.org/sps/sps01_1.html [3] http://www. THE CIVIL LAW. 
edited. raising prices to cover the costs is never attractive.ascap. 70-77 [2] Sidney Morning Herald 3 Dec 2004 www. a process that can educate the public in the need to support these artists (for the general public is. the solution is never easy to find. 62.html [4] Scott. which has some very good arrangements to make sure reproductions of a live performance that create revenue transfer some of that revenue to the creative artists – but they represent the creators (Composers. INTELLECTUAL PROPERTY One of the ways to recover some income and gain productivity is to have some title to the created work – the song.” The American Economic Review. In fact their agreement on residuals with broadcasters sends nothing back to the performers.au/news/Music/The-price-offame/2004/12/03/1101923322669.smh. REFERENCES [1] Faine .org/AboutEquity/historicaloverview. 1.org/content/about-us 269 . Vol I.com. Vol.musicalartists. the ballet or opera might be performed by others with some tribute (symbolic but monetary is usually most appreciated). Thus the solution inflicts more pain than it relieves. it is the board who may have to make up that difference from their own resources of that of their friends. “Unions and the Arts. P. In a business where bringing the artistry to the public does focus on prices that are affordable.sag.org/agreements_schedule_c. As a small additional wrinkle in this opportunity to make additional revenue from a performance.iatse-intl. and compared with all accessible systems 
of jurisprudence ancient and modern.htm) [5] www. 1932 (Reproduced on www. 1/2 (Mar. after all.actorsequity. … Translated from the original Latin.org [6] www. the origins of copyright law came from the desire of booksellers to preserve their monopoly on a certain work and not from the creator.musicalartists. Publishers) and not performers.com/about [8] www. the play. Deceased 
Publishers. Scott. ASCAP. Even now. Cincinnati 
The Central Trust Company 
Executor of the Estate Samuel P. pp. the beneficiary of the artist’s performances and willingness to do so) as well as an effort to make sure that the trade organizations fully realize their obligation to facilitate these artists’ professional desires. for more money cannot simply come from charging enough for the public performance to cover the costs.org/about/crafts. EVOLVING APPROACHES To allow those who wish to perform in the nonprofits sector to do so without exploitation. Hyman R. No.constitution.html [7] www. 1972).asp [9] www. Often with nonprofit performing companies experience a short fall in revenue.

by strengthening institutions (formal and informal structures) and public participation to address national and local development agenda. it because the nature to work at local level. and as a means for securing the MDGs. less attention has been devoted to grassroots perspective and political leadership. resources. and essential skills to influence local community and control over the territory and cultural transmission. today is 31st December 2014. Sustainable development cannot be realized without robust strong institutions and active citizenry engaged in key decision-making. Increasingly participatory governance is emerging as a key focal area. functional local structures and ancestral systems are of particular importance to the flourishing of a strong 270 . Traditional institutions and authorities are rarely included within plans of development that are formulated. Decentralization is a vehicle to achieve the MDGs due its nature to operate at local and community level and planning is crucial to ensure participation in governance and local development. civil society and grassroots organizations and structures that are the real agents of local development. and capacity. Decentralization and participatory processes are complex and takes years to implement. Many developing countries have initiated this process in an effort to improve the quality of service delivery and strengthen sustainable local development. possesses large extension of arable land with diversity agro-ecologic conditions.com ABSTRACT A recurrent question in Africa development debates has been: Why development and international support failures in Africa? Africa. which is seen as “modernisation and scientific knowledge”. What the poor will be told tomorrow about the commitment made to reduce poverty? (Any idea?). This is evident because 1) the concept of Poverty is vague and does not reflect the real dimension of who feels and 2) the concept of capacity development in many debates has mostly stopped at the national level and rarely does the concept sufficient extended to sub national level where needs are felt. both in its own right. which involves a transfer of powers.massuanganhe@gmail. Have mostly disregarded their potential for collective action that inheres within these institutions. Imagine. One way to increase the effectiveness of local government is through democratic decentralization. but are recognized that should play critical role to achieve the MDGs. knowledge.Faculty of Law . Furthermore. spiritual power. services are demanded and less attention is devoted to the role of local institutions and traditional authorities. but hungry and misery affects more that 1/2 of the population.BUILDING SUSTAINABLE CAPACITY DEVELOPMENT THROUGH PARTICIPATORY GOVERNANCE AND SUB-NATIONAL CAPACITY DEVELOPMENT: Why development and international support failures in Africa? Call for Action Israel Jacob Massuanganhe Public Policies.Angola Email: jacob. Political leaders should promote good Governance. partly because of ignorance and partly also because development paradigm. looking local institutions and the role of traditional authorities who are leaders. with enough natural resources. Governance and Local Development Center of Excellence in Public Policies and Local Governance University Agostinho Neto . In Africa development. holding local traditional power. with major incidence in Sub-Sahara Africa. and especially poverty reduction.

Nevertheless. the continent adopted fundamental reforms . The more aid poured into Africa. Child and women mortality. other direct and/or indirect forms of assistance were provided via technical cooperation/ assistance by multilateral or bilateral partners. Africa. vibrant.59 percent between 1975 and 2000. Conscious that Africa’s poor are getting poorer and that good governance is essential for successful economic development. The paradigm should consider a) strengthening of Local governments. while local institutions create enable set to address local structures and systems to promote local development.com/2005/07/strengthening-african-leadership. it’s crucial to promote citizen´s engagement at all levels. with enough natural resources.cato.Africa's years of wars.html http://www.The New Partnership for Africa’s Development (NEPAD) 8. leaders and traditional authorities. INTRODUCTION A recurrent question in Africa development debates has been: Why development and international support failures in Africa? This old continent has been to the international community the most privileged recipient of donor support during last 20 years. Additionally. capacity.org/pubs/edb/edb2. In this connection.small and medium enterprises through stimulation of local economic development interventions that generate employment and income for the poor. and decentralized governance. democratic.blogspot. associated with high HIV/AIDS prevalence rate. one issue has been part of the agenda: The need of strong Africa Leadership. with major incidence in Sub-Sahara Africa. Per capita GDP of Africans living south of the Sahara declined at an average annual rate of 0. and on other hand.html 271 . but hungry and misery affects more that 1/2 of the population. more that 70 percent of African nations have experienced internal conflicts in the last three decades. which is prerequisite to any meaningful. especially in women. Instead of increasing development. More than $500 billion in foreign aid6 – the equivalent of four Marshall Aid Plans – was invested in Africa between 1960 and 1997 in development programmes. In many debates about Africa development. coups and civil strife are responsible for more hunger than the natural problems that befall it7. African agriculture itself is in crisis. the lower its standard of living. refugee movements and returnees. on one hand. including communities. In view to address local development.service delivery. Africa is the poorest in the globe and still being affected by chronic poverty. and finally c) Promotion of emerging Private sector .htm 8 http://africaunchained. The new development paradigm involves political commitment.globalpolicy.org/socecon/develop/africa/2006/0131sistcrisis. The implication is clear . meaning strengthen institutions and public administration reforms to address 6 7 https://www. possesses large extension of arable land with diversity agro-ecologic conditions. illiteracy and low enrollment level are some critical challenges to be addressed in Africa development agenda. this has left 200 million people malnourished. authority and resources have to transferred. aid has created dependence. it is particularly highlighted political problems such as civil strife. 1. b) building capacity of Civil society organizations. violence and unstable regimes that are called to carry long term development vision of their people. By some measures. and according to the International Food Policy Research Institute. Researchers have been pointed out that the critical issue in Africa leadership is Good Governance.

etc). e. The variable determining the MDGs. services are demanded. The MDG’s implies strong commitment. civil society and grassroots organizations and structures that are the real agents of local development. It is noted that less attention has been devoted to the role of local authorities. long term development vision and will not be achieved if the governments do not strengthen institutions of governance and build capacity at local level. less attention has been devoted to local governance perspective. the variable determining the MDGs are related to endogen factors and internal capability to sustain local development. In most cases. public policies. less attention has been devoted to local perspective. meaning that there is a critical need to promote participatory governance and inclusive local development. There are actions to taken in view to touch the poor. One way to increase the effectiveness of local government is through democratic decentralization.g. since in many debates has mostly stopped at the national level and rarely does the concept sufficient extended to sub national level where needs are felt. Considering that tomorrow is 1st January 2015. resources. meaning that the critical variables have to be identified (e. Simultaneously. looking local institutions. This paper is a grassroots perspective that aims to bring the concept of Poverty and MDGs close to the poor. good governance. which involves a transfer of powers. how far were honored the commitments made to achieve the MDGs? What will be told the world about eradication of the extreme poverty? In many debates about Africa development. economic growth. one issue has been part of the agenda: The need of strong Africa Leadership. It’s consensual that Africa good governance. but in market economy is to have state intervening on behalf of the poor (regulatory) and let the poor brings his voice (devolution).national development agenda. It is consensual that transferring capacity and resources to the poor is the most direct and immediate way to reduce poverty and to achieve the Millennium Development Goals. It will lead to enhance effectiveness and efficiency of public interventions by the central government. traditional authorities and their capacity towards response to the local demands and to address local development agenda.org/static/doc9693. institutions. Persistent rural poverty is one of the most stubborn social problems facing Africa. The concept of institutions in many good governance debates has mostly stopped at the level of sub national authorities (local governments) and rarely does the concept sufficient extended to civil society and grassroots organizations and structures that are the real agents of local governance9. The concept of poverty is rhetoric and based on our self perceptions and never incorporates the grassroots perspectives or the poor dimension of who fells. Good governance does not means to advocate strong states or centralism. leadership. almost are critical and under control of the governments.g promote leadership. what is poverty. The exercise of modeling the MDGs[1] is critical to identify the variable and support the governments to forecast what needs to be done today to achieve the MDGs tomorrow. population. and assets to local structures.eldis. Effective local governments are vital to achieving the Millennium Development Goals. looking local institutions and their capacity towards response to the local demands and to address decentralization and local development issues. and pro-active systems that provide better 9 www. In Africa good governance debate. who are distant from the point where needs are felt and service delivery are needed: demand-driven public administration.htm 272 . national and sub-national debates are needed.

Africa's years of wars. refugee movements. The implication is clear . essential and powerful tool for poverty reduction in the medium to long term. 1995). Child and women mortality. The more aid poured into Africa. In many debates about Africa development. this has left 200 million people malnourished. and livelihoods improvement. the needed poverty reduction. Africa. and returnees. possesses large extension of arable land with diversity agro-ecologic conditions. how to target them. This recognition does not minimise the importance of economic growth in poverty reduction and rural development. Democracy and transparent and accountable governance and administration in all sectors of society are indispensable foundations for the realisation of social and people-centred sustainable development (Declaration of the World Summit for Social Development. rapid growth is a necessary. Emerging evidence. and according to the International Food Policy Research Institute. the continent adopted fundamental reforms . In this connection. as result. with major incidence in Sub-Sahara Africa. More than US$1 trillion in foreign aid[2] – more that the equivalent of four Marshall Aid Plans – was invested in Africa between 1960 and 2005 in development programmes. capacity development. African agriculture itself is in crisis.59 percent between 1975 and 2000. it is particularly highlighted political problems such as civil strife. other direct and/or indirect forms of assistance were provided via technical cooperation/ assistance by multilateral or bilateral partners. illiteracy and low enrollment level are some critical challenges to be addressed in Africa development agenda. In interventions that target poverty. Nevertheless. however. especially in women. Participatory Governance and Local Development A recurrent question in development debates has been: Why development agenda and international support failure in Africa? This old continent has been to the international community the most privileged recipient of donor support during last 20 years. coups. one issue has been part of the agenda: The need of strong Africa Leadership. the lower its standard of living. associated with high HIV/AIDS prevalence rate. If not. one of the primary conceptual hurdles is to define who the poor are and. in a sustainable way. and civil strife are responsible for more hunger than the natural problems that befall it[3]. For a long time. Proper targeting of 273 . the worsening rural poverty levels in Africa were explained principally in terms of poor economic performance. but hungry and misery affects more that 1/2 of the population. aid has created dependence. Additionally.services. Conscious that Africa’s poor are getting poorer and that good governance is essential for successful economic development. By some measures. It is particularly worthy to observe that Africa possess extremely low growth elasticities of poverty reduction[5]. Per capita GDP of Africans living south of the Sahara declined at an average annual rate of 0. and externally prescribed economic remedies predominated in policy prescriptions.The New Partnership for Africa’s Development (NEPAD) [4]. in 2015 the world will continue being constrained and affected by current problems. Instead of increasing development. violence and unstable regimes that are called to carry long term development vision of their people. more that 70 percent of African nations have experienced internal conflicts in the last three decades. Africa is the poorest in the globe and still being affected by chronic poverty. For poor countries. consequently. with enough natural resources. shows that economic growth alone is not sufficient to bring about.

the economy. The other challenge regards how best to ensure that there is local ownership of the interventions. and administrative authority to manage a society’s affairs. organizations and individuals that constitute civil society and the private sector. looking local institutions and their capacity towards response to the local demands and to address decentralization and local development issues. It’s evident that the reluctance of decentralization in developing countries mainly is associated with weak systems. but in market economy is to have state intervening on behalf of the poor (regulatory) and let the poor brings his voice (devolution). citizens and their communities. the parliament. UNDP[6] defines governance as the exercise of political. and society. Local governments can play a major role in this effort by ensuring more effective and accountable local infrastructure and service delivery for the poor and by improving the dialogue between the state. References and full paper available on request. 274 ." In Africa good governance debate. Researchers have been pointed out that the critical issue is Good Governance. especially Sub-Saharan Africa. while a decentralised and participatory approach has resulted in poverty reduction. and as a means for securing the Millennium Development Goals. One of the lessons from the past failures of poverty-focused interventions is the importance of avoiding a ‘top down’ approach to project design and implementation. Failure of institutional setting will result in poor outcomes. as the world’s foremost development challenge. weak capacity and administrative diseconomies. The global community has recognised the development of Africa.the poor has generally proved to be elusive and this is one area where more work is still required. decentralization of its administration. and the institutions. Community developers must understand both how to work with individuals and how to affect communities' positions within the context of larger social institutions[7]. Good governance doesn’t means to advocate strong states or centralism. meaning strengthen institutions and public administration reforms to address national and local development agenda. Elements contributing to the latter concept of good governance include the basic laws and institutions of a nation. as this invariably results in ineffectiveness of the interventions. and especially poverty reduction. and transparency. less attention has been devoted to local governance perspective and political leadership. Increasingly participatory governance is emerging as a key focal area. This broad concept encompasses the organizational structures and activities of central. the judiciary. poor institutions. all of these are needed to support people's participation in every aspect of politics. Institutional capacity plays a central role in any decentralization process. Governance requires concerted efforts by those managing the affairs of developing countries. These are therefore necessary components of good governance as "the government functioning as the basis for participatory development. economic. This consideration brings to the fore the issues of local governance. both in its own right. and the private sector. regional and local government. There is a growing consensus that democratic governance creates the conditions for sustainable development and poverty reduction. the administrative competence. and the creation of an appropriate market environment.

Young people in modern society are placed in a contradictory situation. but also those with higher education. Since the start of the current economic crisis. miha. This not only includes those with low education. Faculty of Organisational Sciences Kidričeva cesta 55a. Mojca Bernik*. Miha Marič.maric@fov. The employability of young people or firsttime jobseekers is a major problem in Slovenia. mojca. focusing on current trends and issues that they are facing. the situation in the labor markets has become even worse. crisis INTRODUCTION Within the dynamics of transitions between the different situations of young people. This paper highlights the situation of youth in the Slovenian labor market. SI-4000 Kranj. the transitions from education to employment remain the most demanding and critical. youth. the period of education and economic independence has been extended.si University of Maribor.uni-mb.bernik@fov. YOUTH EMPLOYMENT PROBLEMS IN SLOVENIA Youth labor market in Slovenia 275 . We have examined the problem of the employability of young people who are seeking employment and are often without the experience necessary for the work place.uni-mb. Keywords: employment. but also in the form of negative psychological and broader social consequences [14]. on the one hand. We will also examine programs aimed at solving youth unemployment. unemployment. Youth unemployment is not a problem only in terms of placement in the system of work and future career opportunities of young people.si. On the other hand. A particularly vulnerable group in this difficult situation is youth.pavlin@fov. while the number of newly employed people has decreased.THE IMPACT OF THE ECONOMIC CRISIS ON YOUTH EMPLOYMENT IN SLOVENIA Jasmina Pavlin. The aim was to make a systematic review of the programs for promoting youth employment that are carried out in Slovenia and that may reduce the number of unemployed youth.si. as well as throughout the European Union. they are forced into earlier and more informed.uni-mb. which implies a shift of responsibility for their own lives in childhood [11]. Slovenia ABSTRACT Companies in Slovenia have implemented a number of measures to cope with the recent economic crisis and to adapt to market conditions. which is a sharp contrast to the requirements of the early choices and taking responsibilities [15]. One of these measures has been eliminating jobs and reducing the number of employees. jasmina. This led to an expansion in the number of unemployed.

059 people below the age of 25 who were unemployed. part-time jobs. Youth as jobseekers are currently confronted with a more flexible. Youth unemployment in Slovenia Youth unemployment is a major and an increasingly critical issue problem in Slovenia.The term "youth" is usually used for people during the period from childhood to maturity. and the brain drain of highly educated young people. regional development disparities affecting youth employment opportunities. i. since they have a difficult time competing with educated young people as well as with older people with lower education [14]. and 4.016 found it in 2009. it is especially important to emphasize “student work” via student services that is liberally regulated Slovenia.2009. we can see that there were 12. In the case of flexible employment forms. Regarding the problem of youth labor market in Slovenia. a mismatch of education with labor market requirements. The group of first-time job seekers without experience is currently increasing. young people are often also the least protected sector of the workforce [14]. This is primarily the social exclusion of relatively high proportion of young people who do not finish school. with fixed-term jobs. less secure forms of employment in comparison to the older work force. The term “youth workforce market” identifies the segment in which youth are seeking their first job as well as the supply of jobs that employers are willing to offer to youth without work experience. we also have to highlight some problems directly related to this topic.287 with general secondary education (four years) [20]. 7. this type of labor is the cheapest and the least demanding form of workforce engagement. a lack of skills and experience in seeking their first job. At the same time. and where pressures for flexibility and adaptability are the greatest.462 found it in 2008 and 6. with occasional or temporary jobs under contracts [13]. A general finding is that youth with high education respond much more to changes in economic opportunities than those with low education levels [12]. for employers. By looking at the data of registered unemployment in Slovenia on 31. lengthening the period of education to avoid unemployment. Such student work has been and is often criticized as one of the key causes for high youth unemployment in Slovenia. unemployed young graduates are separated into two major groups: first-time job seekers and persons seeking re-employment [17].704 with no education..852 with secondary school (three years). According to the cause for the application to the Employment Service of Slovenia. these are very low numbers compared to the data on how many there were searching for it in the selected 276 . Youth labor markets constitute the segment of the labor market that is most greatly exposed to different fluctuations.12. we should emphasize low-educated young people. Indeed. Of young people searching for their first employment. As a particularly vulnerable group among unemployed youth. 2. Of these. this form of work is certainly the reason for lengthening the period of education and massive enrollment in higher education because it offers many young people a way to “survive” for several years.e. At the same time. the largest groups of unemployed young people were 3. because employers meet their needs for unskilled or less qualified workers with student labor.

The Active Employment Policy Programme (AEP) has been designed to assist in obtaining employment for the unemployed and for the preservation of threatened jobs and is especially intended for those target groups that face any handicap to entering the labor market [2.3% in 2009 [20]. Part of the attention in the AEP program is also given to tackle youth employment. The main substantive attention in 2010 is focused on operations to promote the establishment of scholarships. Measures and incentives to tackle unemployment are summarized in active employment policies. Young people in Slovenia are exposed to the uncertainties in the form of great flexibility.years. The high rate of inactivity among young people (apart from the participation in education and training) and the failure to integrate into the labor market is usually associated with high overall unemployment [3]. they remain a burden longer for their parents. social isolation and the mental health problems [10]. substance use disorders and suicidal behaviors that were between 1. of which Slovenia is one.4 times higher than their non-unemployed peers. not only in the labor market. The consequences of youth unemployment in Slovenia Social exclusion and marginalization are usually indicated as the main consequence of unemployment. YOUTH EMPLOYMENT POLICY IN SLOVENIA The European Union and its member states. Fergusson et al. but also in other areas of life. the promotion of 277 . which consequently leads to reduced ability of full economic and social independence because of uncertainty in the youth labor market [1]. criminal offense. leave home later and create their own families later. [4] argue that unemployment among youth is also associated to increasing risks of disorder. Youth unemployment in Slovenia is a key risk factor that impedes young people’s overall long-term involvement in society. principally from the European Social Fund [20]. Employment policies focus more attention on young people. because there are fewer opportunities to have children [7]. among which are not just employment measures aimed at first-time job seekers and unemployed young people. The programs for solving unemployment in Slovenia and as a target group include young people are: the Programs of Measures to Promote Entrepreneurship and Competitiveness for the period 2007–2013. but also the meaning and place that the issue of youth employment has in employment policies [5]. The rate of unemployment among those who are searching for their first employment was 14. Results of the research showed that young people exposed to six months or greater unemployment in any given year had rates of mental health problems. which represent key state interventions in the labor market and are targeted at specific groups of people [6]. the Operational Programme for Human Resource Developments for the period 2007–2013. Moreover. the partnership program “Young People in the World of Work” for the period 2007–2013 and the Program of Active Employment Policy for the period 2007–2013 [16]. The state plays a major role in solving youth unemployment. The program is partly financed from the state budget and the rest of the money is obtained from European funds. The result of this delay is also lowering the fertility rate.4 and 8. various regional development programs. Research findings indicate that the accumulation of bad experiences of unemployment among youth contribute to economic deprivation. 9]. have given a clear priority to young people as the main target group.

e. For the actual situation of young people following the completion of education in the labor market. the promotion of employment of disadvantaged persons. it is therefore necessary to analyze the quality of their employment. The employer must enter into a full-time employment contract with its new employee and keep the new employee for at least one year. in which incentives are implemented in the form of subsidies for the employment of disadvantaged groups. work and participate actively in society is essential for the economic and social development of the country.9 million in 2011 [8]. i.employment of young first job seekers. the project has intended projected budget of €39. boosting the development of new employment programs for the most vulnerable people in the labor market. The second project “Training of graduates in the workplace and the subsidy for employment of graduates – Graduate. i.. the remaining 15% is provided from the state budget [20]. Activate and Employ Yourself” [18] and the project “Employ.. In 2010. in order to enable them to obtain relevant work experience and subsidized employment through public tenders via the project. In 2009. The main goal of the project "Employ. Only in this case. Training lasts from one to six months. 278 . Young people are particularly exposed to the program of the third measure. there is €18 million for the tender: 85% of these funds are supplied by the European Union through the European Social Fund (ESF).000 is awarded to employers for employment of graduates for full-time for at least six months [20]. Employers are reimbursed for eligible costs of training graduates as the grant of €2. the unemployment rates are not the only important indicator of unemployment. Labour markets urgently need to respond to these challenges to use the potential of the youth population [3]. Here. we should emphasize two projects aim at reducing youth unemployment: a pilot project “Graduate. and some other measures that also affect young people. The subsidy amounts to €4. For the period of 2010–2011. is it expected that the investment in education of these people is in fact recovered through an appropriate increase of value added in the economy [17].me” [19]. developing new opportunities for job creation and others. This is especially true considering the fact that the economy is knowledge-based.me" is to include young people into training at the workplace.2 million and €23.000 and is paid after the recruitment of unemployed persons.e. Activate and Employ Yourself” aims at mobilizing students during graduation to enable them to undergo training in the workplace and to gain the knowledge and skills to facilitate the integration into work as well as promoting the employment of graduates after training for the same employer through an employment subsidy. promoting the creation of new jobs. CONCLUSION Using the full potential of young people and creating a favorable environment in which young people can develop their skills. of which there were 944 below 26 years of age. and that we live in an aging society in which it is essential to give all young people the opportunity to fully develop their potential. but also the question of whether they have managed to get jobs that are appropriate for their qualifications. For an overall assessment.904 people involved in this program. A subsidy in this project is offered for employment of particularly youth seeking their first job. the promotion of employment and self employment. there were 2.

The paper does not cover the role of grants and scholarships in the education and their impact and connection with the recruitment of young people. which is a specific group of young people and requires much attention.Young people today face many complex challenges. REFERENCES References available upon request from the authors. The issue of young people in the labor market is extensive and requires comprehensive investigation. achieve independence and realize their personal aspirations. but also to broader the search for multidimensional measures that enable young people to get good and decent employment. It is important not only to narrow search channels to raise the employability of young people. we have highlighted only some of them. We have also touched the problem of employment for youth with special needs. and conditions that will enable them to find their place in society. 279 . Searching for solutions to increase employability is only one aspect of a much wider problem on the labor market. In this article.

com Being Human. 3) Aware of social responsibilities. In the hard world of business. This statement aptly summarizes the perception and frustrations surrounding Human Resource functions in today’s business world. Lane No 15. Ramdhun. 4) A sense of humor. 9) Selfless. what does that mean? Prof Ramnath Narayan Swami from the prestigious Indian Institute of Management – Bangalore and one of the pioneers in the field of ‘Creativity in Management’ once said. Pune-411004.‘BEING HUMAN’ – THE ESSENCE OF BEING A SUCCESSFUL HUMAN RESOURCE PROFESSIONAL Ranjan Phadke 65/1. Erandavana. 7) Ability to analyze facts within the back-drop of emotions. As part of this introduction. However since business today is more about profit than people. 2) Uncompromising about ethics. 1) Basically good natured. being HUMAN”. So what does it mean to be human? Does a human resource professional need to have certain personality traits that make them suitable for the role? Do they need to have a code that can dictate their actions towards employees? There has to be one. INDIA Mobile – 91-9890930647 Email. 8) Ability to express thoughts clearly. 10) Good balance between being a conformist and non-conformist 280 . “You know what the problem with today’s Human Resource Professionals is? They have forgotten the meaning of the first word. Prabhat Road. that task has been given to the HR department. To be fair all managers and leaders need have an HR person within them. 5) Natural ability to mentor and counsel.rvphadke@gmail. let us try and define some traits that an HR professional must have. an HR person has the ‘designated’ job to take care of people. 6) Creativity.

Modernity is a series of reforming cultural movements in art. urbanization. values related to globalization. The reason that the above traits and not others are the most important is due to modernity. all these have an indelible influence on today’s youth which is tomorrows work force. architecture. literacy. Let us consider examples. rootlessness. They have no significance in the solution. A person is a number. representative democracy. My targets – A person is a target Many believe that an HR professionals targets are defined by numbers. my appraisal is doomed. a) Recruitment – My target is to hire 50 people in a month. If I don’t meet them. increasing role of science and technology. information technology. media.These I believe are a few decisive character traits that will define the future human resource professional. numbers are important only for analysis of problems. When it comes to people. Rise in capitalism. advances in medicine. pollution. social movement. We will now discuss some aspects directly related to an HR professionals job and how they are dealt with today and how they can be dealt with better. music etc. 281 . literature. individualism. climate change.

ability and performance. This is the most common way an HR unit or team or person approaches his or her job.b) Training and Development – I have to cover 50 employees a month on conflict management. skills and motivations. which is the reverse of what the training intended to achieve. future growth targets. The concept of training needs analysis is often lost while conducting ‘behavioral’ training modules. an HR professional will quickly reduce the threshold for entry consciously or sub-consciously. reasonably common targets that traditionally have seemed to work. current standard of living. Such en-mass trainings only increase training costs. position and placement of employee. Most behavioral trainings are related to a person’s leadership capabilities. loyalty and honestly. c) Compensation and Benefits – To lose sight of employee welfare while deciding remuneration and benefits is common. In a recession 282 . creates unproductive time hence reduces morale as well as profits. Employees need a certain environment. current company profits. Hence it not uncommon to have these conducted for all. experience and interest in attending and gaining from such programs. This affects quality and right fitment in terms or work as well as culture. create disillusionment amongst those who are not suited for them. which in this case is difficult. c) Compensation and Benefits – I have to ensure a critical balance between giving the least possible raise and still lose the least possible number of employee’s due to a competitor offering more. else I have failed. d) Employee Relations – I have to have no more than 10% attrition or labor turnover and nothing more than 5% daily absenteeism. As is often found. Unfortunately. b) Training and Development – It’s a myth that the more people you cover the better chances of improved performance. On the face of it. The consequences of such an approach or attitude are also extremely common and usually the root of all problems that an organization faces. as they are now in a job that they are either not suitable for or at times too good to do. these seem like normal. inflation. a) Recruitment – If you are stretched to hire 50 people a month. it is a difficult and tedious task to assess training needs for behavioral aspects. Compensation has to be decided on . most first look at the market scenario. This has an effect on not only the organization but also the candidate.

year. Social and Religious Ceremonies: Social and religious functions divert the workers attention from the work. It is the childhood mentality of looking at what the other does and then follow. Maladjustment with Working Conditions: If the working conditions of the company are poor. Here are some common reasons for absenteeism stated by Dr Rao. Most employees today have to give traditional holidays and engagements a miss. This can create a bit of frustration and lead to increased absenteeism during such periods. the line manager or team leader addresses these on the spot and hence such incidents are never documented. d) Employee relations – Absenteeism is an aspect which most ER’s professionals fail to address effectively. performance etc an employee can be positively motivated to stay and continue working with an organization by providing for generous yet appropriate increments. I will either match it or give a little less and still hope to keep people. consideration of facts and figures. Industrial Fatigue: This is simply being drained out. iv. It’s definitely not the sole domain of the top management. increments will be stopped. regardless of company profits. working extra hours. compensation and benefits. the workers cannot adjust themselves with them. The common misconception amongst leaders in the human resource industry is that ‘Compensation and Benefits can never be employee friendly’. Excess noise. 283 . With proper research. low lighting. which is prevalent in CnB departments. What is also missing is ‘communication’. On most occasions. they often fail miserably to communicate the real problem to their employees. poor ventilation. Then they prefer to stay away. If my competitor is giving an 8% hike. ii. doing 12 instead of 9 hours of work and then finally the employee feels the need to stay away from work. In certain genuine cases where an organization is not able to provide the expected raise. genuine care of employee welfare. The worst mistake is to consider the employee unequal and unworthy of being part of the larger picture. iii. or at home. i. Unhealthy Working Conditions: Poor and intolerable working conditions might irritate the employee. poor control over the central air conditioning which either keeps the indoors too warm or too cold for comfort.

In relation to company policies. A policy which allows employees to enroll in courses. young employees have been known to be lavish in their spending where parties and boozing trips might find common place in their life. The problem of focusing just on 10% attrition or 5% absenteeism is that you are ignoring most employees as long as the numbers are right. not. hence might result in absenteeism. The thought that having a ‘fun’ work place by arranging a party will reduce problems is false. viii. A fun work place is one where an employee feels welcome. having a party. where they have the freedom to make decisions. It is also indicative of a growing casualness in approach by the management towards employee relations and problems. vi. where their work is considered important. Being in debt: Many employees. crèches etc. unsound personnel policies. to cover their costs might end up borrowing from friends and colleagues at the workplace. such as stress. Alcoholism: Urban. Have a party – boost morale The most disturbing trend in employee relations is to have a party to boost morale. inadequate leave facilities and low level of wages might tend to keep the employees away from work as well. Continuing education policy really a retention tool Most organizations have this. These if done during the weekday will lead to absenteeism the next day as they will not even be in a position to wake up. first aid appliances. Employees dissatisfied with these facilities tend to stay away from the work place. This is the worst solution to employee problems. Inability to repay them. what 284 . Maladjustment with the Job Demands: The fast changing technology demands higher level of skill and there is a constant pressure to meet targets. Most organizations provide financial assistance to such initiatives. rest rooms. These factors give true meaning to the phrase “A fun work place”. Some employees fail to meet these expectations and feel ashamed. let alone come to work. The fact that HR professionals and the management now resort to such initiatives is proof of the dying art of understanding people and problems. their opinions are respected. diploma’s all in the name of skill enhancement and employee welfare. One would ask. canteen. master’s degrees. disinterest. vii. absenteeism. washing. This leads them to skip work. might lead to them not wanting to face them.v. shelter. ambulance. drinking water. Such problems can be analyzed and avoided if a little care is given in understanding the human nature of work. Poor Welfare Facilities: Poor welfare facilities include poor sanitation. attrition etc. to avoid the constant negativity surrounding their performance.

These have an SLA and time to resolve. But no one will ever think of meeting the 285 . asking questions to search for the right skills. In some cases even this is outsourced and done over the phone. To avoid ‘thinking’. Though most organizations now offer online. CV centric hiring. Recruitment. Hence the employee or candidate stands to lose twice. It only seems that recruiters now don’t even want to read CV’s let alone ask right questions. devised by brilliant but inconsiderate management and HR professionals. since done while working full time. Many a talented candidates fail to make the cut since their CV’s may not fall exactly in the job description and candidate profile given to the HR from Operations. The reason for this is that HR professionals are often considerably removed from the real work environment.is wrong? It seems like a win-win situation. but a disastrous approach in finding the best or right candidate. Human resource professionals seldom afford the candidate the same consideration as candidates with full-time degrees. when an employee changes jobs and decides to apply for better opportunities based on new degree’s and skills acquired the market does not accept this degree’s as anything special. Hence I conclude that such a policy is a cold “save attrition” gimmick. probe and search the best candidate often leads to random. are conducted in double the normal duration of a full-time course. Understanding your problems. by the end of the course. Hence many now resort to dealing with employee problems over the phone. This inability to assess. Another troubling fact is. over the phone Most HR professionals have many employees to handle. considerate judgments about a person’s skills and abilities. This maybe an efficient way to dispose of thousands of applications. you don’t fit in the template Most recruiters today have a template. that though almost all organizations have these programs. the recruiter depends on the template come what may. If you do not fit EXACTLY in the profile mentioned no one will consider you. Hence they have no experience to bank on to make informed. the organization has no plan to help the employee use their newly acquired skills. ask questions. most organizations have software’s and systems in place to allow the employee to ‘register’ their complaints online. distance learning or weekend learning Master’s degree in association with local institutes. Most of these courses. Even worse. This keeps the employee locked within the current job as the organization might be providing financial assistance for the same. Unfortunately the reality is different. the time and enormous effort spent in achieving success in work and study and now being considered unequal to full time degrees. Such work and study degrees are often considered second rate. We have also now seen a trend of automated software’s filtering profiles based on the choices you select from drop-downs.

not only does an employee not get paid for it. It’s no secret that professionals today face a burn out far earlier in life. They feel privileged even obliged to be able to work with great companies for high salaries. Overtime is becoming so common that. targets. we are paying the employee a lot of money. In the blind greed for profits. This is such a common trend. After all.employee personally. what’s that? If you work in the IT field then chances are that you work more than 9 hours every day. reprimanded and sometimes even laid off if targets are not met. a reality that is so simple yet never considered. Overtime. have higher instances of health related issues and usually have a miserable family and social life. the work pressure is enormous and I have no choice. The worst part is that no one complains. this is the most dangerous of them all. they must meet targets. Losing human touch and one-on-one interaction. It is observed that such systems and methods of addressing employee concerns or questions over the phone fail to give an accurate solution leaving the employee even more distressed. even if they have to work 24 hours a day. we are losing touch with reality every day. is the start of losing the employee for good. Why have targets that require more than 9 hours of work in a day? Of all the trends that I have discussed in this paper. Why? It’s expected. It is important that businesses treat their 286 . success. they are often looked down upon.

employees as human beings. ‘Being human’ is that difficult in business? 287 . mind and body is over. replaceable after the warranty and service period on ones. not money minting machines.

These negative attitudes will result in withdrawal behaviors. This explanation can be questioned. Latham & Pinder. 2005. There are many possible explanations for these findings. 2005. 2005. and lower levels of organizational commitment and loyalty. and survey instruments have been designed to measure these facets. it seems likely that women will perceive lower levels of justice at work. 1997. Given the differential treatment of women at work. including women taking more home focussed responsibility for children.. JOB ATTITUDES AND ABSEENTEEISM Betty Jane Punnett. Maniero & Sullivan. 1989. 2006). a variety of facets of job satisfaction have also been identified. 2001. Rentsch & Steel. Diekman & Eagly. 2007. 2009. ORGANIZATIONAL JUSTICE. The more satisfied employees are with the workplace. There is literature which more generally links these attitudes and behaviors in both men and women (Cohen-Charash & Spector. 2004. Jackson. Colquitt et al. Cole. intrinsic job satisfaction has been differentiated from extrinsic job satisfaction – intrinsic is defined as 288 . 2001. We plan to test this proposition using data from a job attitude survey across 24 organizations. 2001. The European Commission. 2010). and cliffs (Burke and McKeen. Tyson & Zahidi. Hausmann. Broadly. Job satisfaction is a broad concept. 246-256-6434. Priscilla Glidden. particularly when good alternatives exist for these responsibilities and where men often have similar responsibilities. The strongest evidence from research in North America is a consistent relationship between job satisfaction and attendance at work. 2000. Cave Hill Campus. 2006). THE VARIABLES AND MEASURES Various job characteristics have been investigated as predictors of absenteeism (Johns. 1990. Barbados. University of the West Indies. for example facing glass wall. 2003. Eagley. eureka@caribsurf. There is abundant literature to show that women are treated differently from men at work (Catalyst. An alternative explanation is that women experience a sense of discrimination in the workplace which impacts negatively on their attitudes toward the job and organization. International Labour Office. this in turn will lead to lower levels of satisfaction. such as absenteeism. and while a global satisfaction variable has been shown to be related to absenteeism.GENDER. Patton & Johns. 1998). 2003. Powell and Graves. Dion Greenidge Department of Management Studies.com ABSTRACT Background There is a body of literature which finds that women have higher absenteeism rates than men (Akyeampong. the more likely they are to attend (Hackett. 2007). Punnett et al. Harrison & Martocchio. aging parents and so on. ceilings. 1998). Johannesen-Schmidt & van Eagen. 2009. Dionne & Dostie. We propose that the relationships will be particularly salient in the case of women.. Bernerth. because of their differential treatment and perceptions of injustice. Walter & Holt. In addition these negative attitudes may result in higher levels of stress which also leads to withdrawal behaviors. 1997.

and interactional justice. continuance commitment. p < .77 versus 3.satisfaction with the job itself. Bennett. 1998). while those who see the workplace as unjust or unfair are more likely to be absent. Lok & Crawford. 1989. Specifically. Employees who believe they are treated equitably at work are more likely to attend.59. 1991. Dawis. and the more likely they are to attend work . 2001.81. 2001).05). 2002. 1967 • • Organizational Commitment . England. 1999. and found them.males and four hundred and seventy eight . or perceptions of equity. general job satisfaction. Niehoff and Moorman. with male employees having higher levels of intrinsic job satisfaction 3. 1998. to be related to absenteeism. Dawis.05). 289 . distributive justice. Allen & Smith.2% . Table 1 gives the means for all employees and the reliabilities for the scales. 2006.38. England.22. 765) = 2.Weiss. • general job satisfaction (t (98. There were significant differences on (results are summarized in Tables 2): • intrinsic job satisfaction (t (92. the more satisfied they are. 2000). 1967). It seems that if employees are satisfied with the job itself (intrinsic) and with the workplace environment (extrinsic) they will want to attend.Moorman.55 versus 3. comparing male and female respondents on the relevant variables.Meyer.61. Yousef. Schaubroeck & Aryee. Some research has suggested that satisfaction leads to loyalty and loyalty in turn leads to attendance. with males employees having higher levels of general job satisfaction 3.99.8% -females). procedural justice.13 versus 2.05). with males having higher levels of extrinsic job satisfaction 3.loyalty and commitment are thus positively correlated with both satisfaction and attendance (Addae & Parboteeah. 285) = 4. Lam. Results of studies in North America have found that the more loyal and committed employees are. to varying degrees. • extrinsic job satisfaction (t (12. 1989). and avoid absences. 2002. p < . has also been identified as contributing to absenteeism (Guerts. The survey instruments used in the project were all existing instruments with previously demonstrated high levels of reliability and validity. A variety of instruments were examined.14. so that loyalty is an intervening variable (Hackett. Schaufeli & Rutte. 679) = 3. affective commitment. Lok & Crawford. Organizational justice.1993 SAMPLE AND INITIAL ANALYSIS Based on 773 usable responses (two hundred and ninety five – 38. the instruments were: • The Minnesota Satisfaction Questionnaire (MSQ short form) . Moorman. 1993). 1993 Perceptions of Organizational Justice . & Lofquist. and extrinsic as the satisfaction with factors external to the job (Weiss. & Lofquist. Two other organizational characteristics that have received substantial attention are loyalty and justice (Harrison & Martocchio. Some research suggests that intrinsic job satisfaction may be the best predictor of absenteeism (Hackett. extrinsic job satisfaction. Neihoff & Moorman. Research has looked at these facets of job satisfaction extensively in North America. p < . we have done an initial analysis. and these were selected as the best available. Harrison & Martocchio. An independent sample t-test was computed to test for significant differences between male and female employees on intrinsic job satisfaction. 1991.

• procedural justice (t (12.96.81 . • interactional justice (t (12.49. with males perceiving higher levels of procedural justice 4.82 . with females having higher levels of continuance commitment 4.00 4.98 .96 290 .06 3. with males to perceiving higher levels of interactional justice 4.05). 4=midpoint) Overall Organizational Commitment Affective Commitment Continuance Commitment Normative Commitment Organizational Justice (scores 1-7. p < .55 versus 4.05).05).74 . with males having higher levels of affective commitment 4. 765) = 2.05).83 . p < .30 .32.89 .04 .91. • continuance commitment (t (12.16 versus 3.42 1.65 3.05).25 4. The results of the t-test showed no significant differences on normative commitment and overall organizational commitment (all ps >.44 .05).23 1. p < . 765) = 2.71 . with males perceiving higher levels of distributive justice 4.15.74 4.20 versus 4.00.44 3.36 1. p < .80 .19 versus 3.87 4.16.42 versus 4.33 1. Table 1 Employee Survey Responses Variables Job Satisfaction (scores 1-5.• affective commitment (t (12.04 4.61 . 765) = 2.07 4.83 . 3=midpoint) General Job Satisfaction Intrinsic Job Satisfaction Extrinsic Job Satisfaction Organizational Commitment (scores 1-7.93 1. 4=midpoint) Distributive Justice Procedural Justice Interactional Justice Standard Reliability Mean Deviation 3.61 .65.40 1. . p < .22. 765) = 2. 765) = 2.89. • distributive justice (t (12.

01 .48 .56 4.49 12 .96 1.64 .49 .32 .12 .30 . 291 .06 .46 Test for equality of means t df p 4.00 1.15 3.55 .42 .35 1.48 .17 .41 .67 .00 2.00 1. but women were higher on continuance commitment and there were no significant differences on normative and overall commitment.36 12 .22 7.91 1.16 1.36 4.00 1.58 2.77 . satisfaction and organizational justice clearly show more positive attitudes among men. organizational justice.28 3.00 2.01 .43 .79 3.06 2.03 4. and job attitudes.38 .06 3.84 3. This analysis will be completed prior to the conference.68 .42 4.99 .32 4.03 3. Men were more positive in terms of affective commitment.08 12 12 12 12 .55 3.03 -2. Taken together these results suggest support for the proposition that women’s experiences at work may result in negative attitudes which result in withdrawal behaviors.81 98 .04 4.93 1.33 1. Advancing the Paper Our intent is to model gender.55 .03 Variables Intrinsic Job Satisfaction Extrinsic Job Satisfaction General Job Satisfaction Affective Commitment Continuance Commitment Normative Commitment Overall Organizational Commitment Distributive Justice Procedural Justice Interactional Justice Levene's Test F p 9.32 3.16 .00 2.94 .21 4.Table 2 Independent Sample T-test Males (n =291) M SD 3.80 .20 1. References available on request.64 2.13 .14 92 .22 12 .71 -.64 4.16 12 .00 .52 Of the variables investigated.41 Females (n=476) M SD 3.29 4. The results are not as clear cut for commitment.96 2.94 1.48 1.59 .38 1.89 4.19 4. relative to absenteeism (see Figure 1).

Job Attitudes and Absenteeism 292 .Figure 1 A Gender Difference Model of Organizational Justice.

Keywords: Organizational Decision-making Process.com ABSTRACT The developing research study on The Government Decision-making Process on the Policy Level towards Thai State Owned Enterprises (SOEs) Operating within Metropolitan Areas:) offers some ideas that may provide a useful interpretation of the government decisionmaking process on the policy level to the discipline of public administration. Satisficing Model. Analytical Framework The developing research analytical framework aims to interpret the dynamics of metropolitan areas or urban regions [1]. Prachachyen Road. The researcher would like to focus on the social forces and SOEs operation and administration within metropolitan environments. National Institute of Development Administration (NIDA) 10 293 . The Government’s policy on TMN Privatization and National Shipping Line Establishment Policy by the Thai Maritime Navigation Company Limited (TMN) Joint Venture with 23 Ship-owner Companies and the Government’s policy on the Suvarnabhumi Airport Construction by the Airports of Thailand Public Company Limited (AOT). The Garbage-can model in political institutions as according to Kingdon’s Theory. Pak Kred. + 66 2 984 5492 (Home).mod@gmail. Nonthaburi 11120. + 66 2 696 8624 (Work) E-mail:sutada. Having an assumption that the social forces and SOEs operation and administration are altering the patterns of local decision making from institutional to non-institutional and cross-institutional forms of governance. 11 DPA Candidate at the Faculty of Public Administration. Incremental Model. the metropolitan environments are unique places than they were decades before: the metropolitan This research is developed from the dissertation submitted to the Faculty of Public Administration.THE GOVERNMENT DECISION-MAKING PROCESS ON THE POLICY LEVELTOWARDS THAI STATE OWNED ENTERPRISES (SOEs) OPERATING WITHIN METROPOLITAN AREAS10 Sutada Mekrungruengkul11 43/51 Moo Ban Pokaew. The researcher aims to propose a better understanding towards government policy formulation and implementation towards Thai SOEs through two case studies. National Institute of Development Administration (NIDA) in Partial Fulfillment of the Requirements for the Degree of Doctor of Public Administration. THAILAND Telephone: + 66 1 809 5401 (Cell). Garbage-can Model. State Owned Enterprises (SOEs).

Developmental Research The research questions explored in the developing research is how are administrative. the developed research aims to offer some ideas that may provide a useful interpretation of the SOEs operating within the Metropolitan context from which we can understand metropolitan environments and the way in which decisions are made within these environments. and policy decisions formed in complex metropolitan environments? This research question contains two different concepts. the emphasis of the quality of decisions is viewed as a result of a form of rationality that seeks to order policy decisions around the criterion of efficiency. the Government decision-making on Policy Level towards SOEs Operating within Metropolitan Areas will be understood as a set of skills and tools that are framed around collaborative efforts designed to meet cross-jurisdictional and cross-boundary needs of publics [3]. The first concept is the deeply traditional frame of reference that relies on the oft-touted principles of rational decision making. Drawing upon insights from complexity theory [5]. Under this concept.have transformed into more complex environments of diversified power centers with crossjurisdictional issued and demands [2]. privates and non government organizations (NGOs) [4]. political. and most approaches rely on the underlying principles and assumptions of the rationality in conducting and understanding decision making in public administration [6]. Long traditional in public administration. Rational Decision making Choices Solutions Efficiency Problems The second concept places emphasis on the very different question of who is involved ion the decision process. The second concept that focus on expanding participation will lead to a more fully developed sense of understanding the problem at hand and a more fully committed response to the problem solution once meaningful involvement is achieved. Therefore. This approach to decision is representative of what is referred to as postpositivist [7] in which there is a reliance on expanding the decision frames of reference to improve policy and administrative deliberation. rational decision making theories are the bulwark of the field. 294 .

more inclusive nature of administrative and political decision making in public administration as refer to as the “logic of appropriateness” [10] which the decisions are based on shared understandings of the decision situation. KS. C. J. 1989 [2] Wikstrom.. the decision makers do not make decisions independent of their environments. References [1[ Stone. The researcher believed that this understanding to examining organizations varies greatly from that outlined by rational choice theory and being replaced by organizations “subjected to economic analysis in attempts to make them accountable or productive or competitive [9]. 2002. 1946-1986. DC. The literatures review will emphasis the boarder.. The core value concepts will be derived from the work of Waldo [11]. Hence. and Nalbandian. Eds. N. pp 21-38. where it is understand that decision making is deeply contextual and are more attuned to the notions of social construction and sense making [14]. Lawrence. March and Olsen [12] and March [13]. International City/County Management Association.G. 295 . Regime Politics: Governing Atlanta. Univrsity Press of Kansas.Choices Solutions Communities Representative Decision making Improve policy and administrative deliberation Problems Policy evaluation and adaptive strategies Research Objectives The developing research aims to assess the use of rationality in the study of organizational behavior. As argued by Mary Zey’s [8] that organizational change and adaptation is best understood within the various contexts of organizations. In The Future of Loca Government Administration.. Frederickson. It is to this mentality that this research will focus on. The city in the regional mosaic.N.. Washington. H.

H. Rational Choice Theory and Organizational Theory: A Critique. The Public Administration Theory Primer. A Primer on Decision Making: How Decisions Happen. H. K. Sage. New York. [10] Ferderickson. K... R. J. 1998..Sage. and Smith. 2005 [6] Ferderickson. Sensemaking in Organizations.. Working Across Boundaries: Making Collaboration Work in Government and Nonprofit Organizations.. M.G. J. 46... Citizens. Rediscovering Institutions. San Francisco...M. Development of theory of democratic administration. Information Age Publishing . Arlington. F. CA. Boulder. Experts and Environment: The Politics of Local Knowledge. D. R. 2003. and Smith. The Public Administration Theory Primer. J. American Political Science Review. 1989 [14] March. 1994 15] Weick. K. [11] Waldo.G. C 296 . 81-103. The Free Press. Boulder. K. Jossey-Bass. 2003.. Thousand Osks. Thousand Oak. Application. Theory.B.E. [7] Fischer.A. Durtham.B. New York.[3] Agranoff.Ed. 2002 [5] Richardson. Managing Organizational Complexity: Philosophy .and Olsen. The Free Press. 1952 [13] March.. pp 88] Zey. CT. 2003 [4] Linden. Leveraging Networks: A Guide for Public Managers Working Across Organizations. IBM Endowment for the Business of Government.. 2000 [8] [9. Greenwich. Westview Press. Duke University Press. Westview Press.

ABSTRACTS* * These submissions were designated as "abstracts" by the author(s). 297 . They were internally reviewed to determine their contribution to the conference and a decision was made based on these determinations.

As a result. and even in conflict with those required for established business. Yet growing emerging business is a major challenge to many companies as the organizational capabilities and processes required for new business are drastically different from. Does this corporate venture strategy work? Can venture units help companies develop future core business or general financial returns? What are the challenges and lessons of pursuing such a strategy? Although these issues have received a lot of attention. If some of the new business turn out to be not fitting with companies’ strategic directions. Xerox. P&G. Nokia.CORPORATE INNOVATION: GROWING NEW BUSINESS THROUGH NEW BUSINESS INCUBATORS. Nortel. Globalization and Strategy School of Business and Professional Studies University of San Francisco Emai: chenr@usfca. Department of Marketing. NEC. our research reveals some important lessons that have not been adequately addressed in the past. HP etc. many companies set up separate venture departments/units to incubate new business. the companies can spin off or sell the ventures thus to generate financial returns. 298 .edu ABSTRACT Launching a new business is a key element in corporate innovation strategy. The objective is to use such new venture units to explore and grow future core business. CHALLENGES AND SOLUTIONS Roger (Rongxin) Chen Professor of Management. our findings have important implications for companies trying to pursue such corporate venture strategies. Intel. Based on detailed case studies and interviews with executives of companies such as IBM. Chair.

School of Business & Technology University of Wisconsin-Parkside 900 Wood Road. the relevancy of CSR is becoming increasingly important given the current state of national. Furthermore. 53141 gee@uwp.D. Ph. Gee. Keywords: corporate social responsibility.STRATEGIC MANAGEMENT OF CORPORATE SOCIAL RESPONSIBILITY AND WORKFORCE ISSUES IN THE GLOBAL ARENA Michele V. WI. Kenosha. Issues to be explored include differing views of corporate social responsibility and its relationship to global workforces. multinational corporations 299 . There is increasing pressure for corporations to be more socially responsible. regional.edu ABSTRACT Corporate social responsibility (CSR): What does it mean philosophically and operationally from the varied perspectives of multinational corporations? This paper examines CSR in the global workplace. Immense social and environmental challenges confront organizations and employees operating internationally. and global economies.

D. +571-243-4166. enhancing and interrelating existing programs. creating internal and external alliances.com ABSTRACT The Bolivar Group has a decade of successful experience in low-cost. high-impact strategies designed to improve the quality of life for employees and their families. +571-243-4427 debra. high-impact. The key processes include building on existing infrastructure. 10 #28-49. This paper focuses on practical implementation of specific programs: small businesses as a source of income generation for unemployed family members.sanchez@segurosbolivar. piso 5 Bogota. The first program follows a branching linear path.C.A. and psycho-social wellness and prevention services for employees and their families. LOW-COST EMPLOYEE ASSISTANCE STRATEGIES THE BOLIVAR GROUP EXPERIENCE Debra McKinney Javier Sanchez-Rueda Seguros Bolivar S. strategy 300 .AN IMPLEMENTATION ROAD MAP FOR HIGH-IMPACT. low-cost. Keywords: Employee assistance. quality of life. and a simple growth and development process for strategies.mckinney@segurosbolivar. while the second employs a cluster strategy.com javier. Colombia South America Phone: +571-243-6888. Cra.

AN EXAMINATION OF THE INFORMATION PROCESSING AND EMOTIONAL TENDENCIES OF SOFTWARE ENTREPRENEURS Larry E. 301 . college graduates.und. Subjects were mostly male. 701-777-6380 larry. and between the ages of 23-29. Findings support 8 of the 10 hypotheses. Software entrepreneurs were found to be mostly Flexible with Integrative back-up in their Operating Style. but Decisive with Hierarchic back-up in Role Style. and rigidity/stability of the decision patters of 217 entrepreneurs who started software businesses between January 2002 through December 2005. Subjects completed the 45-item Driver Decision Style Exercise (DDSE) measure of Operating Style.pate@business. the 60-item Driver-Streufert Complexity Index (DSCI) measure of Role Style. emotional patterns. Implications of the findings for entrepreneurship education and research are discussed. the 72-item Emotional Reactions Inventory (ERI) measure of emotional patterns. Department of Entrepreneurship College of Business & Public Administration 293 Centennial Drive. ND 58202 Tel. Pate Professor and Burwell Endowed Chair in Entrepreneurship Chair.edu ABSTRACT This paper examines the primary and back-up information processing patterns. Stop 8098 University of North Dakota Grand Forks. and the 15-item ACES Questionnaire (ACESQ) measure of rigidity/stability in their decision patterns.

Global markets are today in easy access of nations by virtue of advancement in communication technology. the change brought about in the process of HRM will bring in development of the organizations as well as of the individuals. Application of modern trends of human resource management is visible in several organizations of private sector. Abuzar Wajidi University of Karachi. human resource management. acceptance of change in the public sector organizations seems to be a big and stubborn challenge. on the people themselves.NEW TRENDS OF HUMAN RESOURCE MANAGEMENT IN PUBLIC AND BUSINESS ORGANIZATIONS OF PAKISTAN M. However. Case of Pakistan is also not different. Public & Business Organizations 302 . human resources in this country have remained greatly underutilized. For this purpose. Pakistan needs to raise quality of its products and reduce costs to compete in the international markets. Key Words: New Trends. thereby reshaping outlook of the entire society. This country with a large population of about 185 million faces various political. obviously. Pakistan Email: abuzar_wajidi@hotmail. For these obvious reasons. The agricultural outlook of its economy has left majority of its population un-educated. The ultimate impact falls on the economy and. developed human resources remain in large demand in this country. the productivity and quality of service delivery are affected. social and economic problems.com ABSTRACT Developing countries lag behind in progress because their response to change is very slow. Since the new trends of HRM tend to filter deficiencies in the organization of human resources. This uneducated segment of population finds it very hard to accept and adopt changes. This situation leaves the human resource of these organizations unable to contribute their efforts for their organizations with the result that citizens find their grievances and problems increasing day by day. Since the public sector organizations have influence on the production sector. For various reasons. As observed. the story of the public sector organizations is different. quality of human resource needs changes according to new trends of human resource management in order to play its role in the development. therefore.

303 .WORKSHOPS/PANELS* * These submissions were to provide tools and techniques (workshop) and to discuss concepts. issues in a topical area to provide ideas to attendees for future research or personal growth. These were internally reviewed and a decision was made based on the value of the session and possibility of interest by the conference attendees.

The focus will be on socio-cultural factors across countries as well as recommendations and strategies for improvements. Institute for Leadership and Global Education (ILGE) Email: john@institute-leadership-global. Spain e-mail: nuriacb@udc.sutada@gmail. Colombia Email: Debra. Thailand mod.AlKhouri@emiratesid.com Tomokazu Sakumoto PhD.ae Sutada Mekrungruengkul DPA student at School of Public Administration. Both scholarly as well as practitioner perspectives will be included. John P. Japan Email stomo@okiu.A. of Business Management Okinawa International University Okinawa.org Nuria Calvo Babío Facultad de Ciencias Económicas y Empresariales Economic Analysis and Business Administration Department.INTERNATIONAL PERSPECTIVES ON RESPONSIBLE EMPLOYMENT PRACTICES IN TIMES OF ECONOMIC UNCERTAINTY Overview This interactive.ac.es Ali M. S. Bogotá. Emirates Identity Authority United Arab Emirates Ali. The National Institute of Development Administration (NIDA) Nonthaburi. Keenan (Session Chair) President and Professor of Leadership Studies.Mckinney@segurosbolivar. Al-Khouri Managing Director. international panel examines current and emerging issues with respect to responsible employment practices in times of economic uncertainty as these pertain to individual countries and regions.jp Debra McKinney Gehman Directora Centro de Formación Gerencial Seguros Bolívar.com 304 . University of A Coruña.

George. Today there is an increasing need for more impactful and effective leadership training and development programs.com Sonia Ghumann. President. etc.EMERGING TRENDS IN LEADERSHIP AND MANAGEMENT EDUCATION AND DEVELOPMENT Overview This interactive roundtable examines the emerging trends in the fields of leadership studies. approaches. Networker. This presentation focuses on emerging new perspectives on developing leadership competencies for the 21st century.John Keenan International research studies conclude that traditional leadership development training and development programs and methods provide no evidence to support that they actually help executives and managers make substantial long-term improvements in their leadership behaviors and performance. Ashland. Curbing Illegal Corporate Behavior: Where Do We Go From Here? .. break-through thinking. and transformation. “real world” focus and be grounded in new “leadership” paradigms which emphasize principles and practices of personal growth. If this is to be achieved. it seems our efforts didn’t deter corporate criminal activity. development. and diverse development programs and initiatives from a global and futuristic perspective. there will need to be new strategies. Utah Email: mcm@networkeronline.com Raj Parikh. Traditional as well as eclectic approaches are discussed with a focus on both scholarly work and practitioner applications. Dean. Inc. and models to initiate real leadership development and change that impacts organizational performance outcomes.org Marilynn Cash Mathews. John P.edu Emerging Trends in Leadership Development . President and Professor of Leadership Studies. management education. 305 . etc. Email: ghumman@hawaii. Keenan (Session Chair). Oregon. Jeffrey Skilling. USA Email: rajparikh@aol. Shidler College of Business University of Hawaii at Manoa. Email: john@institute-leadership-global. Southern Oregon University. Effective leadership development programs and learning methods will need to have more of an applied. St.Marilynn (Cash) Mathews While we researchers and academicians were busy engaging in ethics training in corporations and writing about the importance of company codes of ethics. School of Business. Corporate managers and executives just keep engaging in unethical and illegal behavior – the latest such as Bernie Madoff. Assistant Professor. Institute for Leadership and Global Education (ILGE).

Rapidly developing countries such as China and India. the ethics training. Yet the ethics codes. developing team work skills. Is illegal activity by some corporate executives a type of gambling or addictive behavior? 2. as well as smaller nations such as the United Arab Emirates and Vietnam.Beyond the ethics training and writing and revising company codes of ethics. As organizations become global. Although masculine leadership styles are traditionally desired in organizations. Women in Leadership: Embracing the Values of Feminine Leadership Styles . low aspirations. and lack of support. low self esteem. do not seem to have made a difference. feminine leadership styles can provide a competitive advantage for managing in an increasing global environment. the need for flexible decentralized structures is becoming more necessary as is the need for collaboration and cooperation over competition. but to directly address the growing need for organizations to embrace female values in leadership roles. Research has focused considerably on addressing various reasons for the underrepresentation of women in leadership positions.Sonia Ghumman Compared to women. work-family conflict. Is there a personality type that is more predisposed to engaging in illegal behavior in corporations? 3. The presentation focuses on what sort of new educational model is necessary for success. discrimination. have looked to the United States as a possible provider of business education. and illustrates the model through a few examples. the threat of imprisonment. Is illegal behavior by corporate executives “contagious” within the organization? Emerging Trends in Higher Education – Raj Parikh The growth in international trade has caused an increased demand for business education that conforms to generally-accepted international academic standards. it seemed clear since the late1990’s that corporate wrongdoers would be held legally responsible. Consequently. men are not only more likely to hold leadership positions but to also be rated more favorably in such positions. 306 . This presentation will highlight the emerging trends for more feminine leadership styles that encourage participatory decision making. This new model is in contrast with the thousands of international students coming to the US each year to study. where do we go from here? Why don’t ethics training and ethics codes work? Where did we go wrong? We can start by examining other other possible causes. and building long-term relationships. autocratic styles of leadership associated with masculine values might be too rigid for modern organizations and leaders might benefit by shifting towards more democratic leadership styles associated with feminine values. This has resulted in direct investments by US institutions in these countries as well as collaborative ventures between American institutions and host country academic institutions. The new model requires a new kind of leadership – both at the institutional level and at the regulatory level. Was anyone deterred? Now we have to ask. such as: 1. gender role stereotypes. The purpose of this presentation is to not just explore the barriers confronting women leaders.

CHALLENGES AND OPPORTUNITIES IN AMERICAN HIGHER EDUCATION Overview This panel discusses some of the opportunities and challenges facing American higher education. Faced with shrinking budgets and uncertain economic conditions, American institutions have sought to become more entrepreneurial and expanded domestically and abroad. Panelists present case studies on how their institutions have sought to maintain the quality and viability of their institutions through a variety of activities. Raj Parikh (Session Chair) Professor and Dean, School of Business Southern Oregon University Ashland, Oregon James Klein Provost and Vice President for Academic Affairs Southern Oregon University Ashland, Oregon Barry Doyle Associate Dean University of San Francisco San Francisco, CA

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HOW YOUTH ENTREPENEURSHIP FOSTERS CREAIVITY IN HIGH SCHOOL STUDENTS AND MAY HELP YOU IN TEACHING COLLEGE UNDERGRADUATES Krista Katsantonis Program Director Network for Teaching Entrepreneurship San Francisco Bay Area t 415 422 4438 m 415 797 8048 krista.katsantonis@nfte.com http://bayarea.nfte.com ABSTRACT This 1 hour workshop session is intended to expose educators to techniques used in youth entrepreneurship education which foster creativity and inspiration in the classroom while developing skills necessary for success in the modern workforce. The United States currently has one of the highest dropout rates of any industrialized nation, with only 7 out of 10 students graduating from high school. This failure rate poses a direct threat to the competitiveness of the American workforce in the global economy. According to a Bill and Melinda Gates Foundation report, nearly 47% of students who dropped out of high school did so because their classes weren’t interesting and 69% said they were not motivated or inspired to work hard. Three-fourths (74%) said that if they were able to relive the experience, they would have stayed in school Entrepreneurship education has been used successfully for more than 20 years by NFTE Certified Entrepreneurship Teachers to engage at risk and hard to reach youth by helping them see the relevance of their core studies in language arts and mathematics through the process of developing a business plan for their own small business idea. Participants in this workshop will be exposed to some of the core strategies and experiential activities used to help NFTE students engage in a creative process in the classroom. Participants will learn about how teaching the process of opportunity recognition and learning the fundamentals of business ownership enhances students’ learning, increases their professional and educational aspirations and ultimately can make them more productive members of the workforce. Objective: By the end of this session, participants will be exposed to a unique population of youth entrepreneurs and a specific set of experiential activities that have been successfully used to develop creativity and innovation in the classroom. They will learn about the NFTE model for engaging students in learning and helping them foster a sense of ownership for their futures including their potential for post-secondary education. Description of Presenters: Deborah Reinerio is a high school teacher who has been teaching NFTE youth entrepreneurship education since 2002. She specializes in integrating creativity and innovation into her classroom and is a certified small business ownership and management teacher credentialed in CLAD. She

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is also a successful entrepreneur, operating her own graphic design business Red Hot Design since 1980. She was NFTE’s Teacher of the Year in 2009. Krista Katsantonis is the Program Director for NFTE Bay Area where she has led program development and teacher training since 2007. A former advertising media manager for advertising agencies and Gap, Inc, she has worked training and advocating for entrepreneurs since 2001. She earned her MBA at the Monterey Institute of International Studies. The Network for Teaching Entrepreneurship (NFTE) provides entrepreneurship education programs to students (11-18) from low-income communities. NFTE's award-winning curriculum and experiential learning activities help middle and high school students engage in their education and improve their academic, business and life skills. NFTE trains teachers to implement its entrepreneurship program in schools and provides ongoing program support. NFTE students learn business concepts including negotiation and pricing and work to complete individual business plans.

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THE EFFECT OF PRIVATIZATION ON EFFICIENCY AND WORKING VALUES: TURKEY’S CEMENT INDUSTRY EXAMPLE Murat Çolak Dokuz Eylül University Faculty of Economics and Administrative Sciences email: m.colak@deu.edu.tr phone: +902324204180/20298 Izmir, Turkey Oğuz Kara Dumlupınar University Faculty of Economics and Administrative Sciences email: oguz.kara@deu.edu.tr phone: +902324204180/20298 Kütahya, Turkey ABSTRACT The objective of the study is to measure the efficiency of factor usage, by starting with selected cement industry example of Turkey from Public Economic Enterprises which are subject to privatization, and to reveal the interaction between efficiency scores and working values. In the study, regarding to cement industries it is based on first and second data bases and it is benefited from efficiency measure techniques and working values analysis. According to the findings, a hypothesis such as: “The efficiency change, which appears related to the ownership change after privatization in Public Economic Enterprises, is effective on working values” is confirmed. Keywords: Privatization, Efficiency, Values, Working Values. Introduction After the Second World War period, with the influence of Keynesian policies, almost in every country a considerable increase of public sector was seen in economy. But stagflation crisis in 1970s and economic problems related to this crisis caused to interrogate the role of public in economy. After these developments, beginning from 1980s, especially after the importance of Neo-liberal policies the opinion that Public Economic Enterprises cannot use the resources efficiently came out. It is argued out in lots of empirical and theoretical studies whether privatization actually increases efficiency or not. Nowadays, arguments about privatization continue not only in economic meaning but also in social meaning. Privatization has importance not only for the efficiency of public firms but also it has importance for the workers of these firms. Economic change, which comes into existence after privatization period in privatized firms, causes the workers- who constitute the social completeness of the firms- to change. Each working individual’s sense, thought, attitude and behavior about firm is effected by such a change. With this transformation, lots of working values such as individual’s income requirement, capacity, family, knowledge, education, sense of achievement, interests and pleasures are becoming different. Public Economic Enterprises which essentially have social utility maximization motive tend to profit maximization motive in conjunction with privatization. This tendency causes worker/manager section to take different priorities in working values. Related to the privatization process, change in ownership also reveals changes in efficiency/productivity of

firms, on the other hand, due to change in institutional identity it effects the workers’ value judgements. This study starts with examples in cement industry and as a reference, it takes efficiency change before and after privatization and reveals change in working values of managers and assistant managers in this sector empirically.

LITERATURE The Rationality of Privatization and Working Values Privatization increases the global competition and it is presented as a competition strategy for publicly owned firms in order to gain a sustainable regulation and competition power. Here, the fundamental assumption is that public firms can not gain a sustainable regulation power in order to obtain competition superiority and thereby, public firms will be drag to a structure which has a lack of entrepreneurship, creativity; and not being collaborator, not being adaptable to technological developments [1]. There are a lot of studies that extract the necessity of privatization and evaluate the results. In this context, it is reach to a result that in general, public enterprises are less efficient than private sector enterprises which are acting in the same field. And according to the Public Choice Approach, the efficiency which reveals is based upon to a bureaucratic structure which operates on weak comptition conditions and it is based upon to a inspection mechanism which cannot be operated directly [2]. Besides, some fundamental reasons which are the sources of inefficiency in public enterprises can be regard as multiple aspect of aims, form of ownership, market structure, insufficient encouragement on management, bureaucratic and political self-interest relations [3]. In some empirical studies which are made for countries/sectors it is found that in some of countries/sectors public enterprises; in others private enterprises use the factors efficiently. It points out that, as a theoretical aspect, there is not a direct connection between form of ownership and factor usage efficiency [4]. The ownership which varies with privatization changes efficiency/productivity level of firms and related to this, values of firm workers vary. Values, which can be reveal as a measure of individuals’ thought, manner and behavior structure, wholly constitute the components of social integrity. Individuals accept the values of places where they live/work, group/firm, society and culture and use them as a measure of evaluations and choices. So, they reach to general judgements such as much better, more correct, more convenient, more beautiful and more important [5]. Values are cognitive structures which can explain the individuals’ ideals, principles and choices of behavior priorities [6].Values can effect individual’s decisions, people whom they trust, time and energy [7]. In this context, values are “general tendencies which can prefer obvious situations of the events against others” [8]. Values, which shape the individuals’ viewpoint to the components around them, can be classified among themselves according to the degree of importance and they are targets which individuals wish to attain [9]. Perceiving working as a value is related to perceive working as an activity in society or it is related to an approach which working is undertaking as ethical [10]. Working values, which are the individual’s lower group of total values, are the quality, compensation and satisfaction that individual seeks or desires to find at work [11]. According to another definition, working values are general and relative stationary aims which individuals wish to reach at work [12].

In accordance with other definitions, working values are tried to describe with terms like these: social responsibility, honesty, being judicious, golden rules, religious belief, fair working, evident self-interests, comparison of good-bad, conscience, law, social justice, being honourable, things to be required, virtue, leadership, character, being mortal, God, privacy and belonging to society [13]. METHODOLOGY Aim of the Application and Fundamental Hypothesis Starting from theoretical and methodological analyses which were argued out in the first section of this study, the aim of this application is; a. For a selected industry, to investigate the factor usage efficiency before and after privatization in Public Economic Enterprises which are subject to privatization, b. To measure working values of managers and manager candidates after privatization in Public Economic Enterprises which are subject to privatization As it is stated above, within general aims, the fundamental hypothesis of this study is The efficiency change, which appears related to the ownership change after privatization in Public Economic Enterprises, is effective on working values. As far as the institutional results (efficiency thesis), which reveal gain/loss in enterprise scale, also changes on working values must be considered. Starting out from this fundamental principle, the derivative hypotheses below were tested: • An increase on firm’s efficiency, which will occur after privatization, will create an increase on values of firm managers’ and manager candidates’. These values are such as power, stimulation, achievement and self-direction. • A decrease on firm’s efficiency, which will occur after privatization, will create a decrease on values of firm managers’ and manager candidates’. These values are such as benevolence, security and peace, tradition and conformity. • Even though the efficieny does not change after privatization, due to the change of ownership, there will be a change (increase/decrease) on values of firm managers’ and manager candidates’. Because of psychological effects there will be a change on values such as hedonism, security and peace, achievement and stimulation. Application Method and Description of Variables The efficiency and working values for 16 completely privatized firms are analyzed in cement industry. For efficiency measurements between 1991-2007 years as input, quantity of total labour force and total capital stock of firms were used; as output, prodution level variables were used. On working values analysis 81 questionnaires were applied to firm managers and manager candidates. Variables which were used for efficiency measurements of industry were obtained from Turkish Privatization Administration, activity reports of firms’, financial reports of firms’which were audited by in dependent auditing firms-such as balance sheet and income schedules. Monetary variables, which were used in order to calculate capital stock, were deflated with Gross Domestic Product, taking 1987 year as a base. Related to the working value analyses primary data base was used and questionnaires were applied to firms. Some of the questionnaires were applied face to face and others were filled by the managers.

1994. there is a recovery on production technologies.88 0.78 0. Reliability Results According to Value Judgements Value Judgement Power Achievement Hedonism Stimulation Self-direction Universalism Benevolence Tradition Conformity Security and Peace Alpha Value 0.are evaluated as a whole.86 0. Such values are stated in appendix 1. Factor analysis was applied to data collected by Schwartz’s Value Survey and reliability of them were tested. Besides. Working values which are placed in questionnaires were classified from 1 to 7. it is seen that in general. When sources of change in efficiency parameters are examined it is seen that 1997 and 2001 crises have been influential. negative effects of crises on production and investment have effected the factor usage of sector. As explained above. Each value shows the managers’ viewpoint to working. regarding to determine the working values there were placed some judgements which show working values of managers and manager candidates. It is seen that. 2001) was used.82 . relationships between factors and factors which are related with values were estimated by correlation analysis.79 0. in order to measure performance effects of privatization on the basis of firm and industry it is benefited from DEA (data envelope) analysis. average capacity usage rate of most firms was 115 %. As a matter of fact. working values were separated to 10 value tendencies. 7 indicates that working value has a great importance. technical efficiency speed is becoming bad but in return. Alpha values. certain and past periods of production processes were taken into consideration.76 0.92 0. and then it declined to 16 % in 2001. In questionnaires. While 1 indicates that working value has no importance.79 0.70 0.62 0. In order to fix working values Schwartz’s Value Survey (1992. were obtained by Schwartz Value Survey and they are seen on the table below: Table 1. APPLICATION RESULTS While DEA analysis results -which covers results of previous and following period of privatization in cement industry. which are connected with working values. but it declined to 80 % in 1997. before privatization. Industry based whole efficiency and productivity calculations were done with the assistance of a computer programme called DEA Solver Pro 4. Before privatization number of workers was 4841 and after privatization it declined to 3253.1. In efficiency analyses. In order to designate individual working values of managers and manager candidates 41 value judgements were used in the study.In literature. The changes of productivity on whole factors or on some factors were measured with total factor productivity (TFP) measurement literature (Malmquist-CRS) index.

43. it is seen that change level of TFP for 16 firms is average 1. The most important factor among workers was power value. Power by taking 6. which is because of change in ownership. Application results can be enumerate as below: As efficieny analysis results are evaluated in cement industry for the period discussed.007196. while reliability of working values is examined it is seen that achievement. stimulation and self-direction has a higher value but universalism and tradition has a lower reliability value.318. the change in efficiency level. the importance of working values was indicated by managers and manager candidates. Here. Figure 1. achievement by taking 6.104 were described very important for the management group. an increase is seen in technological change level. Conclusion and Evaluation According to the aim of the study.265. As it is mentioned in theoretical part of this study. If psychological and sociological dimension on industry is evaluated with working values it is seen that: after .219. but the least important value was security and peace. which covers the previous and following period of privatization of Public Economic Enterprises.168 and hedonism by taking 6. Also psychological and sociological dimentions of privatization on workers have great importance. Value Analysis of Managers in Cement Industry In figure 2. in application part of the study it is started by a data base. negative change of technical efficiency parameter is because of decreasing (especially after an economic crisis in 2001) capacity usage rates. stimulation by taking 6. in response a decrease is seen in technical efficiency level. tradition and conformity were in a second plan of importance.007 can be a sign of increasing returns to scale but while the sources of efficiency is investigated. security and peace symbolized the least importance in order of values. universalism by taking 6. in cement industry is important. self-direction by taking 6. an increase of 0. Benevolence. It is undersood that.According to the table above.

J. Netter. & Lopez-Calva. This point can be explained with individual’s increase of working performance and request of having power. A. A. L. Toplum Bilimlerine Giriş. W. stimulation. Hayek (Eds. which are brought by competition. B. Nash. it is thought that decrease of employment is effective on decrease of values. According to the other results on working values. R. These values are such as benevolence. J. (1996). O. (2004). tradition and conformity values of managers. which will occur after privatization. The derivative hypothesis of the study. . N. DEU SBE. [4] Megginson. As a matter of fact.A. But for an individual being not able to predict her/his own future influences dependence values. (1978). Sociology. after privatization managers lose dependency to their firms. (1985). In F. Vol. Introduction to Sociology. Consequently. Journal of Finance. they are not able to work peacefully. avhievement and self-direction” is confirmed by efficiency and working values analyses. will create a decrease on values of firm managers’ and manager candidates’. According to the results of the questionnaire other values which are standing out among managers are (achievement. Economics and the History of Ideas. & Poulsen.: 26. F. labour security) forces individuals to be different and productive. A. [9] Henslin. self-direction and stimulation. New York: Mc GrawHill Inc. like this: power. Cesifo Economic Studies. New Jersey: Prentice Hall. Ekonomik Regülasyon Modelleri ve Özelleştirme Üzerine Dışsallık İçsellik Analizleri: Türkiye Örneği (1980-2008). J. New Studies in Philosophy. M. [6] Macionis. (1997). is effective on working values” is confirmed. [2] Hayek. the values which managers and manager candidates attach importance are. (2003). Security and peace is seen as the lowest value among managers. E. Politics. 429–459. London: Routledge & Kegan Paul. such as “An increase on firm’s efficiency.privatization. The Confusion of Language in Political Thought. References [1] Kara. security and peace. which will occur after privatization. It can be said that. F. Ankara: Adım Yayıncılık. J. Pressure that occurs with privatization (efficiency. Delaware Journal of Corporate Law. W. [3] Sheshinski. such as “The efficiency change. Also another derivative hypothesis such as “A decrease on firm’s efficiency. Decrease of this value shows that managers’ confidence decreases to the institution they work and thus. selfdirection and stimulation) efficiency and support to increase competition. 49: 3.). Yayımlanmamış Doktora Tezi. Privatization and Its Benefits: Theory and Evidence. (2004). The increase of individual’s performance provides to increase the performance of the firm at the same time. Çalışma Sosyolojisi. [8] Stewart. E. The Choice of Private Versus Public Capital Markets: Evidence from Privatizations.. (2009). These values are such as power. in order. While the employment structure of privatized ciment firms is investigated. A. tradition and conformity” is confirmed by analysis results.. (1998). 59. The Mother of All Parh Dependencies Toward A Cross Cultural Theory of Corporate Governance Systems. which appears related to the ownership change after privatization in Public Economic Enterprises. each individual wishes to have a safe environment in business life. will create an increase on values of firm managers’ and manager candidates’. Because of the change in ownership after privatization “power” value is the most important value among managers. Isparta. productivity. [5] Tolan. M. & Glynn. [7] Licht. [10] Özkul. achievement. J. Essentials of Sociology. (2001). 2835– 2870. it is seen that there is a decrease of benevolence. but also it causes to self-interest conflicts. Boston: Pearson. the fundamental hypothesis of the study.

: 4. Making Sense of a New Employment Relationship: Psychological Contract-Related Information Seeking and the Role of Work Values and Locus Control. P. .13: 1. [13] Lewis. E. [12] De Vos. D. (2005). Like Nailing Jello To A Wall. (1970). D. (1985). Defining Business Ethics. R. & Schalk. Journal Of Business Ethics. Bunyens.[11] Super. International Journal of Selection and Assessment. Vol. A. Boston: Houghton Mifflin. Work Values Inventory Manual..

.zeng@park. Parkville. With a perplexing sigh. for those more seasoned workers.edu. Cathy. Hopefully. BSM Park University.Taylor@park. This case study identifies aspects of workplace bullying and highlights bullying originating from employees and peers. 8700 NW River Park Drive. When this cartoon is presented to college students with limited work experience. J.rr.D. students question. “Is this really the world of work?” Yet. 229-232-5233. these resources will provide a springboard from which critical dialogue can begin. the nervous laugh emitted after viewing the cartoon is reflective of a realization of the pain and predicament of being in the ranks and having fallen prey to the likes of either the characters or the organizations portrayed therein. and inhuman environment of the workplace. This highlighting of employee situations is furthered in the research literature as an attempt to address how these negative behaviors can emerge unexpectedly within organizations. Increased economic concerns affirm higher incidences of mental health issues in the workplace.edu.A CASE STUDY ABOUT WORKPLACE BULLYING AND HARASSMENT FROM A NON-SUPERVISORY BASIS Heather Zeng. these formed in the following scenario from employee misperceptions of appropriate and acceptable workplace behavior. CASE SCENARIO: MRS. injustices.. the cartoon falls short in laughs and understanding.D. workplace bullying. BULLYING OF A MANAGER BY EMPLOYEES *Note: Names have been changed to protect identities. Keywords: Workplace incidents. 2010 ABSTRACT Case studies in workplace bullying and harassment can provide objective frameworks from which to uncover challenging issues in the workplace. Cathy Taylor.com 786-246-6232. instead. MO 64152 Heather. 816-389-3842 Submitted August 20. A case study with commentary follows with questions for further critical thinking. & Lynn Michelle Thomas. mobbing OVERVIEW The popular cartoon Dilbert [1] focuses on the inequities. A review of applicable literature is provided. MchellThomas@kc. which goes contrary to much attribution theory that suggests a supervisory basis. Also. Employers often are ill prepared to approach these issues. Ph. 1 . This case disputes the common belief that supervisors are the harbingers of these negative workplace phenomena. M*. an overview of questions is included in the appendix as a springboard for dialogue and effective decision making around the issues. The authors approach workplace mobbing and subsequent decision making by the employee.

some of the other employees in this branch were having several exclusionary meetings. was approached by one of her female co-workers that had she thought was a friend and was told that the other female employees were planning to write up a statement and take to the management in reference to the aggressive behavior of their immediate supervisor. she had completed the three year probation time that civilians must complete to become a career employee. began working in the civil service educational Division for a Federal Prison. the group of co-workers that had submitted their statements to management continued to ridicule and intentionally make each and every day at the workplace a dreaded event.. although in reality she was very involved with teamwork and assisted others within her Division at all times. thus establishing close and mission-oriented professional relationships with her co-workers. Mrs. Other colleagues outside the initial group that submitted the statements to management still communicated with her and offered support while dealing with the horrible conditions in her branch. as a leader. she moved upward into progressively demanding and higher graded positions. knew that in order to move forward and progress in her career. being a new employee in this Division. M. M. reaped negative treatment for not being part of the group. a Federal civilian employee. so losing her job was not going to be an issue as she had originally thought. M.Facts of Case Mrs. did not feel comfortable with writing up a statement because. other colleagues were temporarily assigned to the positions. she was not seen as a team player. This individual had no intentions of retiring early or moving to another position. With these two men removed. M. After applying for another position at another office located on the same Federal Installation where she worked. was known as a hard worker. M daily. Mrs. 2 . they had been part of the original complaining group. Mrs. Outcome The aggressive supervisor was removed from the branch and placed into another Division on the Installation although rumors were circulating that he was to be let go from his position. She was able to work with both other Federal civilian employees as well as the Federal guard force. M.. For example. she was selected for a similar series position and a promotion! After nine months on the job at the new location. M. Work conditions became even worse for Mrs. so Mrs. M. Her immediate supervisor held the highest position in the education section and was a career employee. her new supervisor openly noted that he had not hired Mrs. it would be necessary to apply for positions outside of her present work location. Eventually. there was a lot of tension and Mrs. had done nothing visible to correct the aggressiveness of one of his subordinates. the comments from the other co-workers turned very negative. Unfortunately.’s supervisor was aware that high-ranking employees were involved in an inquiry. With this. Consequently. M. She was seen as an outsider. the previous supervisor had hired her. Luckily. During this time. As her expertise grew. Mrs. she had not experienced any bad situations with this supervisor.. M. up until that time. The frightening feeling that her job could be in danger loomed over Mrs. The Director was also removed from the Division because he.

Mrs.This was overlooked entirely. though. Mrs. 276]. The authors coin this process as “upwards bullying” a relatively unexamined area of this workplace behavior. [12] It does. which the group of statement submitting employees were receiving twofold. she has received two promotions and is now a senior staff member. such as a restructure were described as occurring prior to the inappropriate behaviors and then playing a role in creating fear and uncertainty is a type of bullying” [3. Yet the dark times that she experienced gave her the awareness never to allow this type of situation to occur again. and counterproductive work behaviors. M. but others. M’s case in that for “over half of those employees who discussed an experience of upwards bullying organizational changes. A continuum of behaviors can be problematic in the workplace. M. This matches Mrs. there were as noted lingering effects to the experience as noted in anxiety and lesson learned from the experience. Subsequently. M. make a big difference if a person is not in an environment that creates these types of problems. Djurkovic & McCormack’s (2006) research confirmed that management must prevent bullying and intervene when it occurs because of the psychosomatic effects of bullying. and she has not been having any reoccurring issues to date. [3] The authors confirm as in Mrs. [6] These will be furthered explored from the research literature as follows. Her doctor prescribed a medication to assist with these symptoms. now has a new position and. to causing or threatening workplace violence. did not seek out any professional counseling. M assisted and provided guidance to were not given a second review. M. who Mrs. pp. M made a psychological break from this situation. PSYCHOSOMATIC EFFECTS OF BULLYING Mrs. but did find that she was a bit anxious and anxiety arose from time to time. she was placed in the worst job locations within the Division and was not allowed to attend training. attend professional development just like her colleagues.’s experience of issues of in-group behavior and the pressure presented to coalesce with the majority to complain against a superior manager in the workplace. in some ways implementing emotional cutoff utilized by members of a family system. M. as told to her by her co-workers. They received praise and accolades instead. Branch et al (2007) research on managers as the recipients of bullying by staff supports Mrs. M. another leader suggested that Mrs. Mobbing 3 . re-work projects. workplace aggression. from mobbing. in her transfer. The sense of distrust was always in the back of her mind due to the uncivil treatment that she had been subjected to when the leadership was removed from this division. unity in work units is necessary to get the work done. They acknowledged the need for acknowledgement for this as well as mechanisms to help leaders deal with this type of workplace bullying After two years of enduring this treatment. M. regardless of the cause’s validity. MacIntosh (2005) confirmed in research that bullying affects the whole person. Yet. Often participants are left with physical and emotional symptoms as in the case of Mrs. She was not offered professional development for three years and was consistently made to feel that any work she completed was not good enough.’s case scenario. Unfortunately. The supervisor made Mrs. Branch et al (2007) also expanded the perception in an examination of upwards bullying that is particularly targeted at managers and upper management.

or “psychological terror…. By examining these components of individual differences in personality. selection and enhancing job satisfaction were all ways to inhibit CPB behaviors. They found that Post Traumatic Stress Disorder (PTSD) is worsened if traumatic situations last a long time and individual rights are violated. & Rostow (2007) examined aspects of cognitive ability and counterproductive work behaviors studied applicants for police officer jobs. [where] the victim is subjected to a systematic stigmatization process and encroachment of his or her civil rights” [10. [8] Leyman and Gustafsson (1996) described mobbing at work as “ganging up on someone”. multi-determined. and unrealistic anxiety. [2] Stewart (2007) posited that workplace aggressive behavior is complex. exaggerated. These authors review of qualitative and quantitative studies findings revealed that integrity testing. pp. The individuals continually felt that their life was threatened and something dangerous could happen. have been observed. Findings revealed that mobbing could affect individuals with a profound. The Roberts. one can only then begin to understand this complex and destructive workplace aggression. situational. ranges. This certainly confirms aspects of screening and testing so as to identify the potential for this behavior. “bullying”. Harms. They described the instances as being high frequency and duration ultimately resulting in the onset of considerable psychological and psychosomatic suffering. and limits of this behavior. it would bode well for managers to understand the perceptions. [10] Workplace Aggression As Beugre (2005) affirmed that the consequences of aggression in the workplace are damaging to the workplace. 252]. [2] Beugre also contended that because aggression and the perception of its occurrence depends on a threshold for injustice. What types of personal factors contribute to CPB behaviors in the workplace? Dilchert. Overall this also inhibited the individual’s level of self confidence and overall psychological health. 73].Beyond bullying by one person. The authors found that high cognitive ability tended to inhibit individuals as their analytical processes tended to project possible consequence of actions. [5] Other studies examining individual differences experienced further valuable insight. cognitive. and stems from the interplay of individual. & Ho (2003) defines counterproductive behaviors (CPB) as “voluntary organizational behaviors that affect an individual’s job performance or undermine organizational effectiveness” [9. events (stressors). Groeblinghoff and Becker (1996) examined two cases that were extreme in duration of a man and a woman in the same institution and exemplifies the progression of psychological diagnosis and treatment. Tung. or mobbing. Mobbing holds implications because often the individual has few resources or little support to turn to. and affective components. pp. group forms of bullying. Caspi and Moffitt (2007) study confirmed that individuals diagnosed with childhood and adolescent conduct disorder were more prone to commit counterproductive work 4 . managers need to understand further the cognitive processes involved. [10] Leyman and Gustafsson (1996) studied sixty-four patients in a clinic using a diagnostic intake process that takes two to four hours. and cognitions about the event as well as emotional reactions through an integrative model. [15] Counterproductive Work Behaviors Lau. Davis. Ones.

S. J. REFERENCES [1] Adams. Journal of Business and Psychology. [4] Cohen-Charash. Tung A.behaviors.’s (2003) study of critical incidents and chronic stress in the workplace confirm that these factors can either lead to psychological morbidity or personal growth. [8] Groeblinghoff. (2006). & McCormack. 18 (1). Y. K.. and legal dimensions can help begin education on these prevalent occurrences. FUTURE DIRECTIONS This case study presents a scenario for students and employees to consider along with possible activities for a prospective curriculum in advising or career counseling in the appendix. organizational. & Barker. & Barling. [7] All of these confirm the relevance and importance of individual differences as organizations work to mediate these issues. (2006). N. (2007). 11 (1).. [6] Djurkovic. A case study of mobbing and the clinical Treatment of mobbing victims. 73-99. 277-294. [3] Branch. 5 (2). 264-281. & Rostow. European Journal of Work and Organizational Psychology. Predicting and preventing supervisory workplace aggression.. Dupre and Barling (2006) found that although perceived injustice is a predictor of workplace aggression. (2008). [16] Offering cases such as these for professionals to consider is critical for an organization’s effectiveness in advocating wellness for their employees. C. Retrieved on May 10. [9] Lau. Journal of Management & Organization. this relationship is minimized when individuals know that there are organizational sanctions that can help prevent it. Ones. Cognitive ability predicts objectively measured counterproductive work behaviors. Managers in the firing line: Contributing factors to workplace bullying by staff. 21 (1/2)...an interview study. [7] Dupre. D. D... Journal of Applied Psychology. & Mueller’s (2007) study found that both envy and perceived unfairness had correlation to the potential for negative implications to the workplace. Further critical thinking on individual. D. The authors suggest further cases that integrate culture. M. M. (1996). J. Van der Ploeg et al. Neuroticism and the psychosomatic model of workplace bullying. & Becker. S. J. 291-301. & Mueller. S. ethical. Journal of Occupational Health Psychology. Davis.. 73-88. S. (2003). A Qualitative and Quantitative Review of Antecedents of Counterproductive behavior in organizations. [14] Cohen-Charash. Ramsay. A range of human resource and training officials as well as educators in these like subjects can benefit by candid discourse of this case – and of the potentially negative individual and systemic implications. 2008 at http://www.dilbert. Issues of diversity tolerance and the multicultural workplace are not approached here yet should be considered in further case studies as they can have distinct implications to analyzing an incident.. diversity issues. 92 (3) 616-627. (2005). Dilbert Cartoon. 20 (2). [4] The authors suggested that reducing these can have benefit to avoiding counterproductive work behavior (CPB). & Ho. Reacting aggressively to injustice at work: A cognitive stage model. Journal of Business and Psychology.com/. Does perceived unfairness exacerbate or mitigate interpersonal counterproductive work behaviors related to envy? Journal of Applied Psychology. 13. 92 (3). [4] Finally. [2] Beugre. 666-680. V. R.. (2007). Journal of Managerial Psychology. C. (2007). [5] Dilchert. 5 . 13-26.. and workplace incidents.

14271436.. B. [11] Comment further how you think reading about other’s experiences in similar workplace incidents and stressors might help her.. such as Mrs. 109. & Moffitt. M. 26. Dorresteijn. Are stress management programs indicators of good places to work? Results of a national survey. For example. [17] Von Bergen. [14] Roberts. P.. Coursol. (2002). Zavaletta. Harms. Predicting the counterproductive employee in a child-to-adult prospective study. T. Experiences of workplace bullying in a rural area... (2003). Lewis et al (2002) suggest bibliotherapy as a resource to help individuals. to write down and affirm the following: (a) positive aspects of her work organization and her job and. 223-233. 10 (4) 345-460.[10] Leyman. Journal of Occupational Health Psychology. J. M. M. E. Journal of Applied Psychology 92 (5). APPENDIX Application for Curriculum Integration To use this scenario in class. 14-40.’s decision making was effective? 2. & Gustafsson. (2007). A. 32(3). Issues in Mental Health Nursing. 157-166. Journal of Employment Counseling. & Kleber. Small Group Activity: A Decision. The Business Review. S (2007). S. [16] Van der Ploeg. (2005). Why do you think that individuals persist even within uncomfortable instances such as the one described by Mrs. [13] Nigam. she may be able to influence the direction of other people’s lives as a teacher. Mobbing at work and the development of posttraumatic stress disorders. and (c) what other contributions she can make by working at the prison. (2003). (2006). & Wahl. which aspects these categories would you deem as present in Mrs. What aspects of Mrs.. Addressing issues of workplace harassment: counseling the targets. A. Based on the critical incidents described. H. Caspi. L. An integrative framework of workplace stress and aggression.. C.’s workplace? 3. Do you think that these were easy to identify? 4. & Soper.? 5. K. 6. J. Critical incidents and chronic stressors at work: Their impact on forensic doctors.. D. J. [15] Stewart. International Journal of Stress Management. 8 (1).Making Process toward Individual Advocacy Develop a decision making chart that allows Mrs. B. 39.. M.116. Comment further on the assets and liabilities to this approach. 893-910. Murphy. 251-275. [11] Lewis. Employee Relations Law Journal. European Journal of Work and Organizational Psychology. & Swanson. 6 . R. J. M. (1996). [12] MacIntosh.. Herting.. Legal remedies for workplace bullying: Grabbing the bully by the horns. N. 8 (2).. (b) positive aspects of the work organization and how working there provides for her family. who are targets to become involved in their empowerment and recovery from such an incident. 5 (2). one could use the following questions for small group discussion or individually ask students these questions: 1..

she might note that the stressful environment contributes to her lack of enjoyment when with her family outside of work (because she is always thinking about the unresolved issues at work and this distracts her). there are no federal or state bullying laws address this specific problem. One area identified is called an” intentional infliction of emotional distress (IIED) claims. is there an employment assistance program (EAP) available or other mediation such as an Equal Employment Official (EEO) that might be used? Nigam et al (2003) affirmed that organizations that offered stress management programs also tended to have other support services to facilitate worker health and well being. 7 . although instances must be identified as extreme” [17. as of yet. After completing this decision-making process. [13] An individual might ask if this type of program exists prior to accepting a job offer or before working for an organization. However. [17] This certainly could leverage individual’s movement to seek out legal consultation to further address infringement of individual rights. List what each resource might do to advocate for change and to help reduce stress. For example. 26]. moving out. Another consideration in this case is to identify what career development options exist. discuss what further resources and help might have existed within the organization. or a lateral assignment in a different setting? Von Bergen et al (2006) confirmed that U.Now. pp. jurisdictions are considering making it unlawful to subject an employee to bullying or abuse in the workplace. List as well contributions that may be limited in this work environment. consider listing the negative aspects of the work organization for her and her family.S. New employees can work to foster policy changes in those organizations that lack such programs. Should one seek moving up. For example.

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