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Management
Fourth Canadian Edition
DANIEL G. B ACHRACH
University of Alabama
BARRY WRIGHT
Brock University
VICE PRESIDENT, EDUCATION Tim Stookesberry
DIRECTOR, BUSINESS, ACCOUNTING, AND FINANCE Michael McDonald
EXECUTIVE EDITOR Lisé Johnson/Christine Moore
DEVELOPMENT EDITOR Daleara Hirjikaka
EDITORIAL ASSISTANT Ethan Lipson
SENIOR MARKETING MANAGER Anita Osborne
SENIOR CONTENT MANAGER Dorothy Sinclair
PRODUCTION EDITOR AND MEDIA SPECIALIST Meaghan MacDonald
DESIGN Wiley
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COVER DESIGN Joanna Vieira/Wiley
COVER PHOTO © Justin Lewis / Getty Images
PRODUCTION SERVICE Jackie Henry, Aptara Inc.
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10 9 8 7 6 5 4 3 2 1
About the Authors
B A R R Y W R I G H T M A , P H . D. , is an associate professor University of Hong Kong, on-site coordinator of the Ohio
and previously the interim dean at the Goodman School of University MBA and Executive MBA programs in Malaysia, and
Business at Brock University in St. Catharines, Ontario, and is Kohei Miura visiting professor at Chubu University in Japan.
the former director of the Niagara Community Observatory. He has served as adjunct professor at the National University
Dr. Wright has over 25 years of experience in the classroom. of Ireland at Galway and advisor to the Lao-American College
Prior to joining the faculty at Brock, he worked as a professor in Vientiane, Laos. He presently teaches an MBA course at
at St. Francis Xavier University, and taught at the International Università Politecnica Delle Marche in Ancona, Italy, and
Study Centre in Herstmonceux, United Kingdom, and at Ph.D. seminars in the Knowledge and Innovation Manage-
Queen’s University in Kingston, Ontario. He has also worked as ment doctoral program at Bangkok University, Thailand. At
an administrator with the City of Red Deer, Alberta. During his Ohio University he has twice been Director of the Center for
career as an educator, Barry has received several excellence Southeast Asian Studies.
in teaching awards at both the undergraduate and graduate A member of the Academy of Management, Dr. Schermerhorn
student levels. was chairperson of the Management Education and Devel-
At home in the classroom, Barry is also comfortable in the opment Division. Management educators and students alike
boardroom. He has served on several boards of directors, most know him as author of Exploring Management 4e (Wiley,
recently as board chair of the Niagara Health System, and has 2014) and Management 12e (Wiley, 2013) and co-author of
also provided a variety of training and research consultations Organizational Behavior 4e (Wiley, 2014). Dr. Schermerhorn
to a number of Canadian private and public organizations. has also published numerous articles, including ones in the
These services have included the development and implemen- Academy of Management Journal, Academy of Management
tation of programs in leadership, employee motivation, strate- Review, Academy of Management Executive, Organizational
gic planning, diversity management, stress management, and Dynamics, Asia-Pacific Journal of Management, Journal of Man-
managing organizational change. Barry also provides one-on- agement Development, and Journal of Management Education.
one “coaching” sessions for senior executives who have ex- Ohio University named Dr. Schermerhorn a University
pressed a desire for outside counsel. Professor, the university’s highest campus-wide honour for
He received his MA (Sport Psychology) and Ph.D. (Man- excellence in undergraduate teaching. He is a popular guest
agement) degrees from Queen’s University. His academic re- speaker at colleges and universities. He is available for student
search focuses on understanding and solving leadership chal- lectures and classroom visits, as well as for faculty workshops
lenges, change and its influence on organizational members, on scholarly manuscript development, textbook writing,
and creating effective work environments. high engagement teaching, and instructional and curriculum
Barry enjoys being married and being a father, coaching innovations.
sports, a trip to the art gallery, travelling, and a good laugh. D R . DA N I E L (DA N) G . B AC H R AC H is the Robert C. and
D R . J O H N R . S C H E R M E R H O R N , J R . , is the Charles G. Rosa P. Morrow Faculty Excellence Fellow and Professor
O’Bleness Professor of Management Emeritus in the College of Management in the Culverhouse College of Commerce
of Business at Ohio University, where he teaches graduate and Business Administration at the University of Alabama,
courses in management and organizational behaviour. Dr. where he teaches graduate and undergraduate courses
Schermerhorn earned a Ph.D. in organizational behaviour in management. Dr. Bachrach earned a Ph.D. in organiza-
from Northwestern University, an MBA (with distinction) in tional behaviour and human resource management—with
management and international business from New York a minor emphasis in strategic management—from Indiana
University, and a BS in business administration from the State University’s Kelley School of Business, an MS in industrial/
University of New York at Buff alo. He previously taught at organizational psychology from the University of Wisconsin-
Tulane University, the University of Vermont, and Southern Oshkosh, and a BA in psychology from Bates College in
Illinois University at Carbondale, where he also served as head Lewiston, Maine.
of the Department of Management and associate dean of the A member of the Academy of Management and the Society
College of Business Administration. for Industrial and Organizational Psychology, Dr. Bachrach
International experience adds a unique global dimen- serves on the editorial boards of the Journal of Applied Psy-
sion to Dr. Schermerhorn’s teaching and writing. He holds an chology and Organizational Behavior and Human Decision
honorary doctorate from the University of Pécs in Hungary. Processes. He is co-editor of the Handbook of Behavioral
He was a visiting professor of management at the Chinese Operations Management: Social and Psychological Dynamics
iii
iv About the Authors
in Production and Service Settings (Oxford University Press, Journal of Applied Psychology, Strategic Management Journal,
2014), co-author of Transformative Selling: Becoming a Re- Organizational Behavior and Human Decision Processes,
source Manager and a Knowledge Broker (Axcess Capon, 2014), Personnel Psychology, Journal of Management, Leadership
and senior co-author of 10 Don’ts on Your Digital Devices: The Quarterly, Production and Operations Management, Journal
Non-Techie’s Survival Guide to Digital Security and Privacy of Operations Management, Journal of Supply Chain Manage-
(Apress, 2014). Dr. Bachrach also has published extensively in a ment, and Journal of Personal Selling and Sales Management.
number of academic journals, including Organization Science,
Preface
Today’s global workplace requires careful navigation. Some- to life in discussions, activities, and individual and team
times the waters are choppy and sometimes it’s smooth sailing. assignments: Evaluate Career Situations, Reflect on the
No matter the conditions, a successful organization requires Self-Assessment, Contribute to the Class Exercise, Manage
skilled leaders at the helm and confident team members who a Critical Incident, Collaborate on the Team Activity, and
know the ropes. Analyze the Case Study. These instructional enrichments are
With ever-changing technology and market conditions introduced at the very beginning of each chapter as part of
and opportunities, today’s organizations must be nimble. It What to Look for Inside: Skills Make You Valuable.
requires strategy, planning, teamwork, communication, and
preparation to be able to change course quickly. It is no longer
an option to remain safe in the harbour; organizations know
that taking risk is the path to success. Management 4e Philosophy
As you embark on your learning journey, this text will give
you a firm understanding of management theory and practices Today’s students are tomorrow’s leaders and managers. They
that will prepare you to launch your career, no matter which are our hope for the future during this time of social transfor-
way the winds blow. Whether you want to become a captain or mation. New values and management approaches are appear-
a valued crew member, Management 4e presents the tools to ing; organizations are changing forms and practices; jobs are
succeed from a Canadian perspective. being redefined and relocated; the age of information is a
major force in our lives; and the intricacies of globalization
are presenting major organizational and economic challenges.
New to Management 4e
Management 4e is designed to help students discover
Management 4e has been revised and updated with a focus on their true potential and accept personal responsibilities
real-world anchors for timely content, student engagement in for developing career skills.
critical thinking about real-world and personal career issues,
and instructor opportunities for enriched classroom activities
and assignments. Management 4e and its rich selection of timely examples
Timely content—All content has been updated. Examples and thought-provoking features for analysis and reflection is
of new and expanded coverage include triple bottom line and designed for this new world of work. It is crafted to help students
shared value view (Chapter 3), disruptive innovation and hu- understand that management is real and is an everyday part of
man sustainability (Chapter 4), reshoring and tax inversions their lives. By engaging with Management 4e, students explore
(Chapter 5), social entrepreneurship and crowdfunding (Chap- the essentials of management while also discovering their true
ter 6), data mining and analytics (Chapter 7), goal management potential for developing useful career skills. The content,
and goal alignment (Chapter 8 and Chapter 16), employment pedagogy, and features of this edition were carefully blended to
issues and controversies (Chapter 13), leadership and follower- support management educators who want their students to:
ship (Chapter 14), technology personality and mood contagion
(Chapter 15), and team virtuousness (Chapter 17). • grow in career readiness,
Student engagement features—Student engagement is an • become attractive internship and job candidates,
embedded theme in Management 4e. Look for these features
• gain confidence in critical thinking,
that bring life to disciplinary content: Analysis—Make Data Your
Friend, Choices—Think before You Act, Ethics—Know Right from • identify timely social and organizational issues, and
Wrong, Insight—Keep Learning about Yourself, and Wisdom— • embrace lifelong learning for career success.
Learn from Role Models. Each feature is designed and visually
presented to attract student attention and engage them in
reflection and critical thinking. These features are introduced
at the very outset of each chapter as part of What to Look for Management 4e Pedagogy
Inside: Management Is Real.
Enriched classroom opportunities—The active and enriched The pedagogical foundations of Management 4e are based on
classroom is also an embedded theme in Management 4e. Look four constructive balances that are essential to higher educa-
for these opportunities that make it easy to bring text content tion for business and management.
v
vi Preface
• The balance of research insights with formative education. The timely content offers flexibility in meeting a wide
As educators we must be willing to make choices when bring- variety of course objectives and instructor preferences. The
ing the theories and concepts of our discipline to the atten- material is organized in five logical parts—Management,
tion of the introductory student. We cannot do everything in Environment, Planning and Controlling, Organizing, and
one course. The goal should be to make good content choices Leading. The parts and the accompanying material can be
that set the best possible foundations for lifelong learning. used in any order and combination. All content has been
updated and enriched with new features and examples from
the latest current events.
Our goal as educators should be to make good con-
tent and pedagogical choices that set the best pos-
sible foundations for lifelong learning. Learning Model
The Management 4e learning model makes it easy for students
• The balance of management theory with management to read, study, reflect, and use critical thinking. Their attention
practice. As educators we must understand the compel- is focused on building management skills and competencies
ling needs of students to learn and appreciate the applica- through active learning, and on discovering that management
tions of the material they are reading and thinking about. issues and themes permeate current events that affect every-
We must continually bring to their attention interesting day living.
and relevant examples.
• The balance of present understandings with future pos-
The Management 4e learning model makes it easy for
sibilities. As educators we must continually search for the
students to study, reflect, and use critical thinking as
directions in which the real world of management is head-
they read.
ing. We must select and present materials that can both
point students in the right directions and help them develop
the confidence and self-respect needed to best pursue them.
Each chapter opens with a compelling photo and quote,
• The balance of what “can” be done with what is, purely followed by a learning dashboard that provides a Chap-
and simply, the “right” thing to do. As educators we are ter Quick Start overview, list of Takeaway Questions, and a
role models; we set the examples. We must be willing to What to Look for Inside directory in two parts: Management
take stands on issues such as managerial ethics and social Is Real—with features on Analysis, Choices, Ethics, Insight,
responsibility. We must be careful not to let the concept and Wisdom; and Skills Make You Valuable—with features
of “contingency” betray the need for positive “action” and to Evaluate, Reflect, Contribute, Manage, Collaborate, and
“accountability” in managerial practice. Analyze. Figures and online animations provide visual sup-
port for student comprehension as concepts, theories, and
terms are introduced. The Management Learning Review
We are role models . . . we must be willing to take section helps students prepare for quizzes and exams by
stands on issues such as managerial ethics and completing a Takeaway Question Summary and Self-Test.
social responsibility. Interactive self-assessments give students a chance to en-
gage with some of the end-of-chapter questions in an online
environment.
Our students have pressing needs for direction as well as sug-
gestion. They have needs for application as well as information.
They have needs for integration as well as presentation. And they Self-Reflection, Active Learning,
have needs for confidence that comes from solid understanding.
Our goal is to put into your hands and into those of your students and Critical Thinking
a learning resource that can help meet these needs.
The What to Look for Inside guide in the learning dashboard
points out the many features in Management 4e that provide
students with important opportunities for self-reflection, ac-
Management 4e Highlights tive learning, and critical thinking. Management Is Real features
current events, timely issues, and real people and situations to
Management 4e introduces the essentials of management as build awareness and stimulate personal reflection.
they apply to organizations and careers in a complex global At the end of each chapter, Skills Make You Valuable fea-
society. The subject matter is carefully chosen to meet Associa- tures provide a variety of opportunities to build management
tion to Advance Collegiate Schools of Business (AACSB) accred- skills through individual and team learning activities.
itation guidelines, while still allowing extensive flexibility to fit A sampling of the Management Is Real and Skills Make You
various course designs, class sizes, and delivery formats. Valuable features follows:
Preface vii
Acknowledgements
Writing is always a big task and there are many people who have contrib- I am grateful to the following colleagues who offered their percep-
uted greatly to this project. Special thanks go to Lisé Johnson, Acquisi- tive and very useful feedback during development and contributed to
tions Editor, for her support and vision for the project. I would very much the related supplements.
like to acknowledge Deanna Durnford, Daleara Hirjikaka, and Meaghan
Ann Conquergood, Athabasca University
MacDonald of John Wiley & Sons Canada, Ltd. The support each has
Burchell Hanson, Humber College
provided to me is truly above and beyond—thank you. I would also like
Judy Kovacs, Northern Alberta Institute of Technology
to thank Anita Osborne, Senior Marketing Manager, for her very helpful
Richard Michalski, McMaster University
counsel on making the content faculty-focused and student-friendly.
Horatio Morgan, Ryerson University
I would also like to thank Laurel Hyatt (a truly gifted writer), Lana
Sui Sui, Ryerson University
Okerlund, and Belle Wong for their extraordinary editorial contributions.
Wendy Tarrel, Nova Scotia Community College
I would like to offer my particular thanks to Linda Bramble, who
Gerhard Trippen, University of Toronto
was both innovative and instrumental in creating many of the Cana-
dian features and cases in this offering. She is a talented writer and In closing, I would especially like to thank my family—my lovely
scholar and I am blessed to have her join me on this project. wife Mary, darling daughters Monica and Kit, and happy son John
I am also thankful for the expert sales team that Wiley Canada has Emmett—who all offered hugs and help along the way. To my father
in place. Each and every one of them is a true delight to work with (go and mother Herb and Mable Wright, for all your guidance, strength,
for the gold). To all, my heartfelt thanks. and love, I dedicate this book.
Barry Wright
St. Catharines, Ontario
August 2017
Brief Contents
Part One Management Part Five Leading
1. Management Today 1 14. Leading and Leadership Development 263
3. Ethics and Social Responsibility 40 16. Motivation Theory and Practice 304
ix
Contents
Part One Management 3 Ethics and Social
1 Management Today 1 Responsibility 40
x
Contents xi
Management Today
Canada geese fly in formation to conserve energy and financial turmoil and uncertainties, environmental challenges,
communicate better on their long journeys. Likewise, and complex global economics and politics are regularly in the
good managers can help organizations reach their news. Today’s organizations are fast changing, as is the nature
ultimate destination. of work itself. Talent and technology reign supreme in the most
desired jobs. Learning, performance, and flexibility are in as
Welcome to the fourth Canadian edition of Management and individual attributes; habit, complacency, and free riding are
its theme of personal development for career success. We live out. Employers expect the best from us, and the best employers
and work in a very complex world. Unemployment and job provide us with inspiring leadership and supportive work envi-
scarcities, ethical miscues by business and government leaders, ronments full of respect, involvement, teamwork, and rewards.1
1
2 CHA PT E R 1 Management Today
1.1 Working Today 1.1 Recognize the challenges of 1.1 What are the challenges of
working in the new economy. working in the new economy?
1.2 Organizations 1.2 Describe the nature of 1.2 What are organizations like as
organizations as work settings. work settings?
1.3 Managers 1.3 Discuss what it means to be a 1.3 What does it mean to be a
manager. manager?
1.4 The Management Process 1.4 Explain the functions, roles, and 1.4 What are the functions, roles, and
activities of managers. activities of managers?
1.5 Learning How to Manage 1.5 Identify essential managerial skills 1.5 What are the essential managerial
and discuss how they are learned. skills and how do we learn them?
Social Media Searches Linked with Discrimination in Hiring • Contribute To the Class Exercise:
My Best Manager
1.3 Wisdom Learn from Role Models
• Manage A Critical Incident:
Tonia Jahshan Turned Over a New Leaf
Team Leader Faces Test
1.4 Choices Think before You Act • Collaborate On the Team Activity:
Want Vacation? Take as Much as You Want The Amazing Great Job Race
1.5 Insight Keep Learning about Yourself • Analyze The Case Study:
Self-Awareness and the Johari Window Vancity: On Top of Its Game
In her book The Shift: The Future of Work Is Already Here, scholar Talent
Lynda Gratton describes why things are changing so quickly to-
day and how young people can navigate their careers through A study by management scholars Charles O’Reilly and Jeffrey
these changes. “Technology shrinks the world but consumes all Pfeffer found that high-performing companies are better than
Working Today 3
their competitors at getting extraordinary results from employ- allow you to achieve important career goals or to meet even
ees. “These companies have won the war for talent,” they ar- basic performance requirements. It takes both competency
gue, “not just by being great places to work—although they are and commitment to generate intellectual capital. The views of
that—but by figuring out how to get the best out of all of their various generations on work elements such as competency and
people, every day.”3 commitment are discussed in Management Is Real 1.1.
People and their talents—what they know, what they Workplace talents in today’s age of information, technol-
learn, and what they achieve—are the crucial foundations for ogy, and change are dominated by knowledge workers whose
organizational performance. They represent what managers minds—their creativity and insight—are critical assets.6 Futurist
call intellectual capital, which is the combined brainpower Daniel Pink says we will soon enter a conceptual age where the
and shared knowledge of an organization’s employees.4 Intel- premium will be on “whole mind” competencies. Those who
lectual capital is a strategic asset that organizations can use have them will be both “high concept”—creative and good with
to transform human creativity, insight, and decision-making ideas—and “high touch”—joyful and good with relationships.7
into performance. Intellectual capital also is a personal asset, Management scholar and consultant Gary Hamel talks about
one to be nurtured and continually updated. It is the package a creative economy “where even knowledge itself is becom-
of intellect, skills, and capabilities that sets us apart, and that ing a commodity” and “the most important differentiator will
makes us valuable to potential employers. be how fast you can create something new.”8 Mastering these
Think about the personal implications of this intellectual intellectual challenges requires ongoing development of mul-
capital equation: Intellectual Capital = Competency × tiple skill sets that always keep your personal competencies
Commitment.5 What does it suggest in terms of developing aligned with—and at the forefront of—emerging job trends.
your talents for career success? Competency represents your
personal talents or job-related capabilities. Although extremely
important, by itself competency won’t guarantee success. You Technology
have to be committed. Commitment represents how hard
you work to apply your talents and capabilities to important Technology continuously tests our talents and intrudes into
tasks. Both are essential. Having one without the other won’t every aspect of our lives. Think Skype, Twitter, Instagram,
Facebook, and more. We are continuously bombarded with a radiologist in India, and business records are maintained by
advertisements for the latest developments—smart phones, accountants in the Philippines.
smart apparel, smart cars, smart homes. We struggle to keep One controversial consequence of globalization is job
up with our social media involvements, stay connected with migration, which is the shifting of jobs from one country to
messaging, and deal with inboxes full of email and voice mail. another. While Canada has been a net loser to job migration,
It is likely that, right now, you are reading this “book” on your countries like China, India, and the Philippines have been net
favourite tablet or smart phone rather than in its traditional gainers. Politicians and policy-makers regularly debate the
form. Given what has already happened with how we use tech- costs of job migration as local jobs are lost and communities
nology, what will things look like tomorrow? lose economic vitality. One side looks for new government poli-
It is critical to build and to maintain a high Tech IQ—the cies to stop job migration and protect Canadian jobs. The other
ability to use current technologies at work and in your personal side calls for patience, arguing that the national economy will
life, combined with the commitment to keep yourself updated grow jobs in the long run as the global economy readjusts.
as technology continues to evolve. Whether you’re checking in- The flip side of job migration is reshoring, which is the
ventory, making a sale, ordering supplies, sourcing customers, shift of manufacturing and jobs back home from overseas.
prioritizing accounts, handling payrolls, recruiting new hires, or Rising global manufacturing and transportation costs, increas-
analyzing customer preferences, Tech IQ is indispensable. More ing labour costs in China and other manufacturing countries,
and more people spend at least part of their workday telecom- growing worries about intellectual property protection in coun-
muting or working from home or in mobile offices. Workplaces tries like China, and shortened supply chain lead times have
are full of “virtual teams” with members who meet, access led manufacturing firms such as Caterpillar, Ford, and General
common databases, share information and files, make plans and Electric to do more reshoring.13 A recent report by BDO Canada,
decisions, solve problems together, and complete tasks without an accounting firm that provides business advisory services,
ever meeting face to face. Tech IQ is a baseline foundation comments on the growing tendency toward reshoring: “A firm’s
for succeeding in this fast-changing world of technological proximity to its customers is once again becoming a strategic
innovation. asset and competitive advantage.”14
Even finding work and succeeding in the job selection pro-
cess today involves skilled use of technology. Poor communi-
cation, sloppy approaches, and under-researched attempts do Ethics
not work in the world of electronic job search. Filling in your on-
line profile with the right keywords does work. Many employers It’s old news now that Bernard Madoff was sentenced to 150
use sophisticated software to scan online profiles for indicators years in jail for a Ponzi scheme costing investors billions of dol-
of real job skills and experiences that fit their needs. Most re- lars. But the message is still timely and crystal clear: Commit
cruiters today also check social media for negative indicators white-collar crime and you will be punished.15 Madoff’s crime
about applicants. did terrible harm to numerous individuals who lost their life sav-
ings, charitable foundations that lost millions in charitable gifts,
and employees who lost their jobs. Our society also paid a large
Globalization price as investors’ faith in the business system was damaged by
the scandal. Although very high profile, the Madoff scandal was
National boundaries hardly count anymore in the world of by no means a unique or isolated case of bad behaviour by a
business.9 Over 1.9 million people work in Canada for foreign lone executive. Fresh scandals regularly make the news.
employers.10 We buy cars like Toyota and Honda that are as- The issues here move beyond criminal behaviour and into
sembled in Canada. We buy appliances from the Chinese firm the broader notion of ethics—a code of moral principles that
Haier and Tetley Tea from India’s Tata Group. Top managers at sets standards for conduct that is “good” and “right” as well as
Starbucks, IBM, Sony, Ford, and other global companies have “bad” and “wrong.”16 At the end of the day we depend on indi-
little need for the words “overseas” or “international” in their viduals, working at all organizational levels, to conduct them-
vocabulary. They operate as global businesses serving custom- selves in ethical ways. We also expect employers to act ethically
ers around the world. They source materials and talent wher- (see Management Is Real 1.2). And even though ethics failures
ever in the world it can be found at the lowest cost. get most of the publicity, you’ll find many examples of manag-
These are among the many consequences of globaliza- ers who demonstrate moral leadership and integrity. Believing
tion, which is the worldwide interdependence of resource that most CEOs are overpaid, the former CEO of Dial Corpo-
flows, product markets, and business competition.11 Under its ration, Herb Baum, once gave his annual bonus to the firm’s
influence, government leaders worry about the competitive- lowest-paid workers.17 In his book The Transparent Leader, he
ness of nations, just as corporate leaders worry about business argues that integrity is a key to leadership success and that the
competitiveness.12 Countries and people are interconnected responsibility for setting an organization’s ethical tone begins
through labour markets, employment patterns, and financial at the top. Shareholders in several companies in Canada are
systems. We are hardly surprised anymore to find that our cus- getting more aggressive when it comes to voting against unrea-
tomer service call is answered in Ghana, CT scans are read by sonable executive compensation.18
Working Today 5
One indicator of ethics in organizations is the emphasis up to 14.1 million people will be members of a visible minority,
given to social responsibility and sustainability practices. Telus which is approximately 3 in 10 Canadians. South Asians, includ-
Corporation was named among Canada’s top socially respon- ing Indians, Pakistanis, and Sri Lankans, are expected to make
sible companies in 2015. “Sustainability is a holistic mindset,” up the largest visible minority group.23 Statistics Canada proj-
says Andrea Goertz, Telus’s Chief Sustainability Officer, ects that roughly 37 percent of the population will be at least
“that guides every decision we make and challenges us to 65 years old.
innovate.”19 Despite these changes, the way we deal with diversity in
Another ethics indicator is the strength of corporate gov- the workplace remains complicated. Women now lead global
ernance. Think of it as the active oversight of top management companies like IBM, PepsiCo, Xerox, and Kraft, but they hold
decisions, corporate strategy, and financial reporting by a com- just 5 percent of the top jobs.24 The proportion of women at
pany’s board of directors. the top is growing, but female CEOs are also getting fired at a
higher rate than their male counterparts.25
Why aren’t there more women and people of colour lead-
Diversity ing organizations? To what extent does diversity bias still influ-
ence recruitment and selection decisions? Researchers have
The term workforce diversity describes the composition of a found that resumés with white-sounding first names, such as
workforce in terms of gender, age, race, ethnicity, religion, sex- Brett, receive 50 percent more responses from employers than
ual orientation, and able-bodiedness.20 The changing demo- equivalent resumés with black-sounding first names, such as
graphics in society are well recognized. Members of minority Kareem.26 Researchers also note that white leaders are viewed
groups now constitute more than one-fifth of the Canadian as more successful than non-white leaders, and that white lead-
population,21 and women make up almost half (47 percent) of ers are expected to succeed because of competence while non-
the Canadian workforce.22 By the year 2031, it is predicted that white leaders are expected to succeed despite incompetence.27
6 CHA PT E R 1 Management Today
The stage for diversity bias is set by prejudice—the dis- glass ceiling effect, an invisible barrier or ceiling that prevents
play of negative, irrational opinions and attitudes regarding women and visible minorities from rising to top jobs.
members of diverse populations. An example of bias is linger- Scholar Judith Rosener warns that discrimination of any
ing prejudice against working mothers. The non-profit Families sort leads to “undervalued and underutilized human capital.”30
and Work Institute reported that in 1977, 49 percent of men and To avoid this problem, the position of chief diversity officer, or
71 percent of women believed that mothers can be good em- CDO, is gaining stature in organizations. Its presence recog-
ployees; by 2008 the proportions had risen to 67 percent and nizes that diversity is not only a moral issue but an opportu-
80 percent.28 Don’t you wonder why there isn’t 100 percent sup- nity for real performance gains. The job of CDO is to make sure
port for working mothers? And how do you account for a study the work environment allows women and members of other
that sent faux resumés to recruiters and found that the least groups to flourish, and fully utilizes their talents.31
desirable candidates were women with children?29 The inspir-
ing story of one working mother is in Management Is Real 1.3.
Prejudice becomes active discrimination when members Careers and Connections
of some groups are unfairly treated and denied the full bene-
fits of organizational membership. One example of discrimina- When the economy is down and employment markets are tight,
tion is a manager inventing reasons not to interview a visible the task of finding a career entry point can be daunting. It al-
minority job candidate. Another example is a supervisor who ways pays to remember the importance of online resumés and
refuses to promote a working mother for fear that parent- job searches, and the power of social networking with estab-
ing responsibilities will make it hard for her to do a good job. lished professionals. In addition, job seekers should consider
This thinking shows a subtle form of discrimination called the internships as pathways to first-job placements. But everything
still depends on the mix of skills you can offer a potential em- Google+, and Reddit—that connect users with similar inter-
ployer and how well you communicate those skills. Picture ests have become the great equalizer. They make the process
yourself in a job interview. The recruiter asks this question: of connecting much easier and more democratic than ever
“What can you do for us?” How do you reply? Your answer can before. Importantly, they are readily available ways for you to
set the stage for your career success . . . or something less. make connections that can help with job searches and career
British scholar and consultant Charles Handy uses the advancement.
analogy of the shamrock organization to highlight the
challenges of developing skill portfolios that fit the new
workplace.32 The first leaf in the shamrock is a core group of Learning Check 1.1
permanent, full-time employees who follow standard career
paths. The number of people in this first leaf is shrinking.33 They
Takeaway Question 1.1
are being replaced by a second leaf of “freelancers” and “in-
What are the challenges of working in the new economy?
dependent contractors” who offer specialized skills and talents
on a contract basis, then change employers when projects are Be Sure You Can • describe how intellectual capital, ethics, diversity,
completed.34 Full-time employees are also being replaced by globalization, technology, and the changing nature of careers influ-
ence working in the new economy • define intellectual capital, work-
a third leaf of temporary part-timers. They often work without
force diversity, and globalization • explain how prejudice, discrimina-
benefits and are the first to lose their jobs when an employer
tion, and the glass ceiling can hurt people at work
runs into economic difficulties.
The fact is that you will have to succeed in a free-agent
economy, one where people change jobs more often and work
on flexible contracts with a shifting mix of employers over time.
Skills like those in the list below must be kept up to date and 1.2 Organizations
portable.35 They can’t be gained once and then forgotten. They
must be carefully maintained and upgraded all the time. All this LEARNING OBJECTIVE 1.2
places a premium on your capacity for self-management—
being able to assess yourself realistically, recognize strengths Describe the nature of organizations as work settings.
and weaknesses, make constructive changes, and manage
your personal development. Here are the early career survival
skills to acquire.
Learn More About
• Mastery: You need to be good at something. You need to be
able to contribute real value to your employer. Organizational purpose • Organizations as systems • Organi-
zational performance • Changing nature of organizations
• Networking: You need to know people and get connected.
Networking with others within and outside the organiza-
tion is essential.
As pointed out earlier, what happens from this point forward
• Entrepreneurship: You must act as if you are running your in your career is largely up to you. So, let’s start with organiza-
own business, spotting ideas and opportunities and pur- tions. In order to make good employment choices and perform
suing them. well in a career, you need to understand the nature of organiza-
• Technology: You have to embrace technology. You have to tions and recognize how they work as complex systems.
stay up to date and fully utilize all that is available.
• Marketing: You need to communicate your successes and
progress—both yours personally and those of your work Organizational Purpose
team.
• Renewal: You need to learn and change continuously, always An organization is a collection of people working together to
improving yourself for the future. achieve a common purpose. It is a unique social phenomenon
that enables its members to perform tasks far beyond the reach
Connections count highly in the free-agent economy. They of individual accomplishment. This description applies to or-
open doors to opportunities and resources that otherwise ganizations of all sizes and types that make up the life of any
wouldn’t be available. People with connections gain access community, from large corporations to small businesses, as
to valuable information about potential jobs and often score well as such non-profit organizations as schools, government
more interviews and better jobs than those without connec- agencies, and hospitals.
tions. While in the past the best connections may have been The broad purpose of any organization is to provide goods
limited to people who had gone to the “right” kinds of schools or services of value to customers and clients. A clear sense of
or came from the “right” kinds of families, this is no longer the purpose tied to “quality products and services,” “customer
case. Social networking tools—such as LinkedIn, Facebook, satisfaction,” and “social responsibility” can be an important
8 CHA PT E R 1 Management Today
Consumer feedback
Poor Good
Resource Utilization
Changing Nature of Organizations In an article titled “Putting People First for Organizational Suc-
cess,” Jeffrey Pfeffer and John F. Veiga argue forcefully that orga-
Change is a continuing theme in our society, and organizations nizations perform better when they treat their members better.41
are no exception. The following list shows some organizational Managers in these high-performing organizations don’t treat
trends and transitions relevant to the study of management.40 people as costs to be controlled; they treat them as valuable
strategic assets to be carefully nurtured and developed. So,
• Focus on valuing human capital: The premium is on high- who are today’s managers and just what do they do?
involvement work settings that rally the knowledge, expe-
rience, and commitment of all members.
• Demise of “command-and-control”: Traditional top-down What Is a Manager?
“do as I say” bosses are giving way to participatory bosses
You find them in all organizations and with a wide variety of
who treat people with respect.
job titles—team leader, department head, supervisor, project
• Emphasis on teamwork: Organizations are becoming less manager, president, administrator, and more. We call them
hierarchical and more driven by teamwork that pools tal- managers, people in organizations who directly support, su-
ents for creative problem solving. pervise, and help activate the work efforts and performance
• Pre-eminence of technology: Developments in computer accomplishments of others. Whether they are called direct re-
and information technology keep changing the way orga- ports, team members, work associates, or subordinates, these
nizations operate and how people work. “other people” are the essential human resources whose con-
• Importance of networking: Organizations and their mem- tributions represent the real work of the organization. And as
bers are networked for intense, real-time communication pointed out by management scholar Henry Mintzberg, being
and coordination. a manager remains an important and socially responsible job.
“No job is more vital to our society than that of the manager,”
• New workforce expectations: A new generation of workers
he says. “It is the manager who determines whether our social
is less tolerant of hierarchy, attentive to performance merit,
institutions serve us well or whether they squander our talents
more informal, and concerned for work–life balance.
and resources.”42
• Concern for sustainability: Social values call for more attention
on the preservation of natural resources for future genera-
tions and understanding how work affects human well-being. Levels of Managers
At the highest levels of business organizations, as shown in
Learning Check 1.2 Figure 1.3, we find a board of directors whose members are
elected by shareholders to represent their ownership interests.
Takeaway Question 1.2 In non-profit organizations such as a hospital or university, this
level is often called a board of trustees, and it may be elected by
What are organizations like as work settings?
local citizens, appointed by government bodies, or invited by
Be Sure You Can • describe how organizations operate as open
existing members. The basic responsibilities of board members
systems • explain productivity as a measure of organizational per-
are the same in both business and the public sector—to make
formance • distinguish between performance effectiveness and per-
formance efficiency • list several ways in which organizations are
sure that the organization is always being well run and man-
changing today aged in a lawful and ethical manner.43
Common job titles just below the board level are chief ex-
ecutive officer (CEO), chief operating officer (COO), chief finan-
cial officer (CFO), chief information officer (CIO), chief diversity
1.3 Managers officer (CDO), president, and vice president. These top man-
agers constitute an executive team that reports to the board
and is responsible for the performance of an organization as
LEARNING OBJECTIVE 1.3 a whole or for one of its larger parts. It is common to find the
members of an organization’s top management team referred
Discuss what it means to be a manager. to as part of the C-suite.
Top managers are supposed to set strategy and lead the
organization consistent with its purpose and mission. They
should pay special attention to the external environment and
Learn More About be alert to potential long-run problems and opportunities. The
Importance of managers • Levels of managers • Types of best top managers are strategic thinkers able to make good de-
managers • Managerial performance • Changing nature cisions under highly competitive and even uncertain conditions.
of managerial work A CEO at Procter & Gamble once said the job of top managers
is to “link the external world with the internal organization . . .
10 CH A PT E R 1 Management Today
Non-managerial
Workers
make sure the voice of the consumer is heard . . . shape values responsible for activities covering many functional areas. An
and standards.”44 example is a plant manager who oversees everything, includ-
Reporting to top managers are the middle managers, who ing purchasing, manufacturing, human resources, finance,
are in charge of relatively large departments or divisions consist- and accounting. In public or non-profit organizations, manag-
ing of several smaller work units. Examples include clinic direc- ers may be called administrators. Examples include hospital
tors in hospitals; deans in universities; and division managers, administrators, public administrators, and city administrators.
plant managers, and regional sales managers in businesses. Job
descriptions for middle managers may include working with top
managers, coordinating with peers, and supporting lower-level Managerial Performance
team members to develop and pursue action plans that imple-
ment organizational strategies to accomplish key objectives. All managers help people, working individually and in teams,
A first job in management typically involves serving as a to perform. They do this while being personally accountable for
team leader or supervisor—someone in charge of a small work results achieved. Accountability is the requirement of one per-
group composed of non-managerial workers.45 Typical job titles son to answer to a higher authority for performance results in
for these first-line managers include department head, team his or her area of work responsibility. This accountability flows
leader, and supervisor. The leader of an auditing team, for ex- upward in the traditional organizational structure (Figure 1.4). The
ample, is considered a first-line manager, as is the head of an
academic department in a university. Even though most people HIGHER
enter the workforce as technical specialists such as engineer, MANAGEMENT
market researcher, or systems analyst, at some point they prob-
ably advance to positions of initial managerial responsibility.
Accountability
Types of Managers
Manager
Many types of managers comprise an organization. Line manag-
ers are responsible for work that makes a direct contribution to
the organization’s outputs. For example, the president, retail man-
ager, and department supervisors of a local department store all Dependency
have line responsibilities. Their jobs in one way or another are di-
rectly related to the sales operations of the store. Staff managers,
by contrast, use special technical expertise to advise and support
the efforts of line workers. In a department store chain like
Nordstrom or Hudson’s Bay, the corporate director of human
resources and chief financial officer would have staff responsibilities.
W k tteam members
Work b
Functional managers have responsibility for a single
area of activity such as finance, marketing, production, hu- FIGURE 1.4 Accountability in the traditional
man resources, accounting, or sales. General managers are organization.
Managers 11
team leader is accountable to a middle manager, the middle making the most of opportunities they find.”47 These comments
manager is accountable to a top manager, and even the top describe a workplace where the best managers are known more
manager is accountable through corporate governance to a for helping and supporting than for directing and order-giving.
board of directors or board of trustees. The words coordinator, coach, and team leader are heard as of-
But what, you might ask, constitutes excellence in man- ten as supervisor or boss.
agerial performance? When is a manager “effective”? A good The concept of the upside-down pyramid shown in Fig-
answer is that effective managers successfully help others ure 1.5 fits well with the changing mindset of managerial work
achieve both high performance and satisfaction in their work. today. Notice that the operating and front-line workers are at
This dual concern for performance and satisfaction introduces the top of the upside-down pyramid, just below the custom-
quality of work life (QWL) as an indicator of the overall quality ers and clients they serve. They are supported in their work
of human experiences at work. A “high-QWL” workplace offers efforts by managers below them. These managers aren’t just
such things as respect, fair pay, safe conditions, opportunities order-givers; they are there to mobilize and deliver the support
to learn and use new skills, room to grow and progress in a ca- others need to do their jobs best and serve customer needs.
reer, and protection of individual rights and wellness. Sitting at the bottom are top managers and C-suite executives;
Scholar Jeffrey Pfeffer considers QWL a high-priority issue of their jobs are to support everyone and everything above them.
human sustainability. Why, he asks, don’t we give more attention The upside-down pyramid view leaves no doubt that the entire
to human sustainability and “organizational effects on employee organization is devoted to serving customers and that the job
health and mortality”?46 What do you think? Should managers be of managers is to support the workers who make this possible.
held accountable not just for performance accomplishments of
their teams and work units, but also for the human sustainability
of those who work with and for them? In other words, shouldn’t Learning Check 1.3
productivity and quality of working life go hand in hand?
Takeaway Question 1.3
What does it mean to be a manager?
Changing Nature of Managerial Work Be Sure You Can • describe the various types and levels of manag-
ers • define accountability and quality of work life, and explain their im-
Cindy Zollinger, president and CEO of Cornerstone Research, portance to managerial performance • discuss how managerial work
directly supervises more than 20 people. But, she says: “I don’t is changing today • explain the role of managers in the upside-down
really manage them in a typical way; they largely run them- pyramid view of organizations
selves. I help them in dealing with obstacles they face, or in
Serve
Support
Support
Top managers
Keep organization’s
mission and
strategies
clear
Learn More About Organizing Once plans are set, they must be imple-
Functions of management • Managerial roles and activi- mented. This begins with organizing, the process of assigning
ties • Managerial agendas and networks tasks, allocating resources, and coordinating the activities of
individuals and groups to accomplish plans. Organizing is how
managers put plans into action by defining jobs and tasks, as-
The ultimate “bottom line” in every manager’s job is to help an signing them to responsible persons, and then providing support
organization achieve high performance by best utilizing its hu- such as technology, time, and other resources. One Canadian
man and material resources. This is accomplished through the company’s innovative way of organizing employee time is dis-
four functions of management in what is called the manage- cussed in Management Is Real 1.4.
ment process of planning, organizing, leading, and controlling. Many organizations are being recognized for the plans they
are making and the steps they are taking to build diverse and
inclusive workplaces. For instance, the William Osler Health
Functions of Management System in Brampton, Ontario, was recently recognized as one of
Canada’s best diversity employers. Its Diversity Advisory Council
All managers, regardless of title, level, type, and organizational rotates co-chairs to increase engagement and share additional
setting, are responsible for the four management functions diverse perspectives. Seventy employees volunteer as diver-
shown in Figure 1.6. These functions are continually engaged sity champions who are responsible for adopting diversity and
as a manager moves from task to task and opportunity to op- equity best practices. Most recently they created a multidisci-
portunity in his or her work. plinary LGBTQ advisory group with both clinical and non-clinical
staff to develop guidelines for working with and caring for LGBTQ
Planning Planning is the process of setting performance communities. They also have diversity programs for people with
objectives and determining what actions should be taken to disabilities, members of visible minorities, LGBTQ newcomers,
accomplish them. Through planning, a manager identifies and members of linguistic, cultural, and religious minorities.49
desired results—goals and objectives, and ways to achieve
them—action plans. Leading Leading is the process of arousing people’s en-
There was a time, for example, when top management thusiasm and inspiring their efforts to work hard to fulfill
at EY (previously Ernst & Young) became concerned about the plans and accomplish objectives. Managers lead by building
Planning
Setting performance
objectives and deciding
how to achieve them
Controlling Organizing
The
Measuring performance Management Arranging tasks, people,
and taking action to Process and other resources
ensure desired results to accomplish the work
Leading
Inspiring people to
work hard to achieve
high performance
“We trust our employees like owners and they pay is they can take off no more than four consecutive weeks, as many
that trust back to us, acting like owners.” times over the course of the year, although if a manager thought a
request was reasonable, he or she could sign off for a longer period.
A policy of unlimited vacation is an indication of the changing
Want Vacation? Take as Much as You Want
nature of the workplace.
BuildDirect, a Vancouver-based company that sells home improve-
ment and building materials at wholesale prices, offers its 300 em- What’s Your Take?
ployees access to unlimited paid vacation. CEO Jeff Booth believes So, is this approach to vacation time something that more em-
in the integrity of his employees. “Instead of measuring hours we ployers should be planning? Is it the next hot thing sought by
measure output.” new graduates? What are the risks and limits for employers, if
The policy means that all employees, even the staff in the any? How about the “motivation” issues? Would this be a turn-on
warehouse, have access to the plan. for you, something that would keep you productive and loyal? If
“We trust our employees like owners,” says Booth, “and they unlimited vacation time is such a good idea, why aren’t more
pay that trust back to us, acting like owners.” The only limitation employers doing it?
commitments to a common vision, encouraging activities that Managerial Roles and Activities
support goals, and influencing others to do their best work on
the organization’s behalf. The management process and its responsibilities for planning,
organizing, leading, and controlling are more complicated than
Controlling The management function of controlling is they appear at first glance. They must be successfully accom-
the process of measuring work performance, comparing results plished during a workday that can be very challenging. In a
with objectives, and taking corrective action as needed. Man- classic book, The Nature of Managerial Work, McGill researcher
agers exercise control by staying in active contact with people Henry Mintzberg describes the daily work of corporate chief ex-
as they work, gathering and interpreting performance mea- ecutives as follows: “There was no break in the pace of activity
surements, and using this information to make constructive during office hours. The mail . . . telephone calls . . . and meet-
changes. Control is indispensable in the management process. ings . . . accounted for almost every minute from the moment
Things don’t always go as anticipated, and plans must often be these executives entered their offices in the morning until they
modified and redefined to fit new circumstances. departed in the evenings.”50 Today, we might add to Mintzberg’s
At EY, Laskawy and Deborah K. Holmes, who was then list of executive preoccupations relentless “work anytime and
the head of the firm’s Office of Retention, documented what anywhere” demands of smart phones, ever-full email and voice
the firm’s retention rates for women were when they started mail inboxes, chat and instant message streams, and social
the new programs. This gave them a clear baseline against media alerts.
which they were able to track progress. They regularly mea-
sured retention rates for women and compared them with the Managerial Roles In trying to better understand the
baseline. They were able to identify successes and pinpoint complex nature of managerial work, Mintzberg identified a set of
where they needed to further improve their work–life balance roles commonly filled by managers.51 Shown in Figure 1.7, they
programs. Over time, collected data showed that turnover describe how managers must be prepared to succeed in a variety
rates for women were reduced at all levels. of interpersonal, informational, and decisional responsibilities.