CH-1-4 Innovative Management for a Changing World – Understanding Management : Book Guide

This Document Contains Chapters 1 to 4 CHAPTER 1 INNOVATIVE MANAGEMENT FOR A CHANGING WORLD SUGGESTED ANSWERS TO END OF CHAPTER DISCUSSION QUESTIONS 1. How do you feel about having management responsibilities in today’s world, characterized by uncertainty, ambiguity, and sudden changes or threats from the environment? Describe some skills and qualities that are important to managers working in these conditions. Answer: Students should understand that even with the high levels of uncertainty, ambiguity, and sudden changes or threats present in today’s environment, managers still have at least some useful information about alternative courses of action, the outcomes of those alternatives, and the likelihood of occurrence for each alternative, for each decision they face, and that information will help them make decisions that may well have a reasonably high payoff. During turbulent times, managers must apply all their skills and competencies in a way that benefits the organization and its stakeholders. The number one reason for manager failure is ineffective communication skills and practices. Especially in times of uncertainty or crisis, if managers do not communicate effectively, including listening to employees and customers and showing genuine care and concern, organizational performance and reputation suffer. Managers must be able to quickly find the information they need in a wide variety of situations. Doing so requires both conceptual and technical skills, but may require a high level of human skills to create the relationships necessary to sustain the manager in times of crisis. The decision-making role becomes even more critical in this environment, as managers attempt to sort out the uncertainties and threats they face. Managing in today’s world of uncertainty and rapid change requires adaptability, resilience, and strong problem-solving skills. Key qualities include: 1. Adaptability: Ability to adjust strategies and plans quickly. 2. Resilience: Capacity to bounce back from setbacks and maintain focus under pressure. 3. Vision: Skill in anticipating trends and envisioning future scenarios. 4. Communication: Clear and transparent communication to guide teams through change. 5. Decision-Making: Rapid and effective decision-making, often with incomplete information. 6. Emotional Intelligence: Understanding and managing one's own emotions and those of the team to maintain morale and cohesion. These skills help managers navigate and lead effectively through unpredictable and challenging environments. 2. Assume that you are a project manager at a biotechnology company, working with managers from research, production, and marketing on a major product modification. You notice that every memo you receive from the marketing manager has been copied to senior management. At every company function, she spends time talking to the big shots. You are also aware that sometimes when you and the other project members are slaving away over the project, she is playing golf with senior managers. What is your evaluation of her behavior? As project manager, what do you do? Answer: The marketing manager seems to want to move up the management hierarchy as quickly as possible. There are two behaviors illustrating this desire. Sending copies of memos to senior management helps her maintain visibility in the company and lets senior management know of her management skills and accomplishments. Socializing with senior management at company functions or on the golf course also helps her maintain high visibility. These behaviors will help her to not be overlooked when deliberations for special projects or promotions are being made by senior management. The appropriateness of her behavior is another issue. If she is performing on the joint project as promised, then what she does otherwise is her business. If you, as the research scientist, also are looking for advancement opportunities, you should try to increase visibility, also. Look for ways to do so in ways that are acceptable to senior management in this organization culture. 3. Jeff Immelt of GE said that the most valuable thing he learned in business school was that “there are 24 hours in a day, and you can use all of them.” Do you agree or disagree? What are some of the advantages to this approach to being a manager? What are some of the drawbacks? Answer: Immelt seems to be suggesting that many managers waste too much time doing unimportant things or nonbusiness-related things. Time management is an important skill for managers, and is becoming increasingly important with technological advances, because as is noted in the chapter, managerial activity is characterized by variety, fragmentation, and brevity. The average time spent on any one activity is less than nine minutes, and managers must be able to shift gears quickly. Managers perform a great deal of work at an unrelenting pace, requiring great energy, and the amount of work and the pace at which it must be performed continue to increase. 4. Think about Toyota’s highly publicized safety problems. One observer said that a goal of efficiency had taken precedent over a goal of quality within Toyota. Do you think managers can improve both efficiency and effectiveness simultaneously? Discuss. How do you think Toyota’s leaders should respond to the safety situation? Answer: Organizational effectiveness is the degree to which the organization achieves a stated goal, or succeeds in accomplishing what it tries to do. Organizational efficiency refers to the amount of resources used to achieve an organizational goal. It is based on the how much raw materials, money, and people are necessary for producing a given volume of output. The ultimate responsibility of managers is to achieve high performance, which is the organization’s ability to attain its goals by using resources in an efficient and effective manner. Although efficiency and effectiveness are both important for performance, most people would probably say that effectiveness is the more important concept. The reason is that internal efficiency has no value if it does not enable the organization to achieve its goals and respond to the external environment. On the other hand, an organization that is effective does achieve its goals, by definition. One of these goals should involve continuously increasing efficiency. Managers can and should improve both efficiency and effectiveness simultaneously. As noted above, one of any organization’s primary goals should be to continuously improve efficiency. To the extent that the organization increases its success in achieving this goal, along with others, its effectiveness also improves. Toyota’s leaders should respond by increasing the company’s efficiency in reducing safety problems. Doing so will, by definition, move the company toward eliminating safety problems, which should be one of its organizational goals. 5. You are a bright, hard-working, entry-level manager who fully intends to rise up through the ranks. Your performance evaluation gives you high marks for your technical skills, but low marks when it comes to people skills. Do you think people skills can be learned, or do you need to rethink your career path? If people skills can be learned, how would you go about doing it? Answer: Some students may distinguish between skills and attitudes. A manager can develop techniques which have a positive motivational impact and may even learn how to act in a manner as if he or she were sincere but it may be difficult to concerning a negative attitude. Yes, people skills can be learned. To improve, seek feedback, attend relevant training, find a mentor, practice active listening, work on empathy, read related books, and observe effective managers. Developing these skills will enhance your management effectiveness and career growth. 6. Discuss some of the ways that organizations and jobs have changed over the past ten years. What changes do you anticipate over the next ten years? How might these changes affect the manager’s job and the skills that a manager needs to be successful? Answer: In the new workplace, work is free-flowing and flexible to encourage speed and adaptation, and empowered employees are expected to seize opportunities and solve problems. The workplace is organized around networks rather than vertical hierarchies, and work is often virtual. These changing characteristics have resulted from forces such as advances in technology and e-business, globalization, increased diversity, and a growing emphasis on change and speed over stability and efficiency. Managers need new skills and competencies in this new environment. Leadership is dispersed and empowering. Customer relationships are critical, and most work is done by teams that work directly with customers. These changes will continue over the next 10 years, driven largely by the rapidly increasing rate of technological advancement. In the new workplace, managers must focus on building relationships, which may include customers, partners, and suppliers. In addition, they must strive to build learning capability throughout the organization in order to keep up with technological developments. 7. How might the teaching of a management course be designed to help people make the transition from individual performer to manager in order to prepare them for the challenges they will face as new managers? The 2010–2011 Bain survey of management tools and trends found that the use of social media programs is growing, but as a tool, social media also has one of the lowest satisfaction ratings. How would you explain this? Answer: Management courses can be designed to emphasize the use of technology, the importance of work flexibility, and the tools and processes used in virtual organizations and virtual teams to achieve goals and assess performance. In addition, practical aspects of empowerment such as the training necessary to ensure empowered employees can make effective decisions that are aligned with organizational goals should be incorporated. Student activities should focus on developing collaborative environments and teamwork. Management Course Design: Focus on leadership skills, role-playing, mentorship, and feedback. Social Media Satisfaction: Low satisfaction may be due to complexity, limited ROI, and poor implementation. This low satisfaction ratings of social medial tools would most likely improve as more and more businesses and nonprofit organizations are adopting them as part of their communications and marketing strategy. Companies are able to gather ideas and determine what their customers are saying about them. These programs also provide insights into customer behaviors and needs with research and analytics. With the ability of targeted messages to enable brand positioning and promote marketing campaigns, social media tools are becoming increasingly evitable. 8. Why do you think Mary Parker Follett’s ideas tended to be popular with businesspeople of her day but were ignored by management scholars? Why are her ideas appreciated more today? Answer: Mary Parker Follet’s ideas were probably popular with business people of her day because they recognized that they could reduce conflict and improve productivity by involving employees to a greater extent and showing concern for their needs. Management scholars at that time were still focused on work efficiency studies and had not yet begun to understand the importance of social factors and human relations in the workplace. That would not come until later, as a result of the Hawthorne studies. Follet’s ideas are appreciated today because her work provides insights that can help managers deal with the rapid changes in today’s global environment. In addition, she emphasized issues such as ethics and power, issues that have become very important in recent years with the collapse of Enron and other corporate scandals. 9. Why can an event such as the Hawthorne studies be a major turning point in the history of management, even if the results of the studies are later shown to be in error? Discuss. Answer: One point that could be made is that social science is not perfect. Another is that the findings from the Hawthorne studies had legitimacy because Harvard professors conducted them. Moreover, if findings meet a need for society—that is, if they seem like a good idea—they can be rapidly adopted and believed. In this case, the idea that treating people well will make more productive employees was important because employees had been treated as if they were machinery for many years. Interestingly, although the scientific studies did not necessarily prove the accuracy of the idea, it may still be valid. The idea was widely adopted, and many organizations came to believe that productivity was associated with employee treatment. Even the most recent thinking, as reflected in the Japanese management and achieving excellence perspectives, supports good treatment of employees as a way to assure a productive organization. Thus, the idea may have been correct and fit the needs of the time, and those things were more important than the scientific basis for the findings. APPLY YOUR SKILLS: EXPERIENTIAL EXERCISE Management Aptitude Questionnaire Students should complete the questionnaire using the 5 point Likert scale. The scale is designed to give a general idea (it is not validated) of management issues. Such a scale can be used as a kind of “mirror” to the student. Undergraduates, particularly, lack knowledge about what the job of a manager is. Helping them to look at these three skill areas can be of some assistance in assessing their own abilities to be good managers. After the students score their questionnaires, you may ask them to share their scores in small groups of 4 5 and discuss their potential strengths and weaknesses as managers. Also, you may ask them to share answers to the following questions. These questions may be used with the entire class, without any small group discussions. 1. Why do you think the three skills are all needed to be an effective manager? Give examples of times when each one is used. Answer: The three essential management skills—technical, human, and conceptual—are all necessary for effectiveness because they cover different aspects of management. 1. Technical skills: Needed for understanding and performing specific tasks. Example: A marketing manager uses technical skills to analyze market data. 2. Human skills: Important for working with and motivating people. Example: A team leader resolves conflicts between employees. 3. Conceptual skills: Crucial for seeing the big picture and making strategic decisions. Example: An executive envisions the long-term direction of the company during a major reorganization. APPLY YOUR SKILLS: SMALL GROUP BREAKOUT Your Best and Worst Managers and Action Learning These exercises help students understand how different management styles affect their behavior and motivation, ultimately impacting performance. Stress to students that the purpose of group discussions is to share insights and help each other rather to grade people on “right” or “wrong” answers. APPLY YOUR SKILLS: ETHICAL DILEMMA The New Test 1. Ignore the test. Sheryl has proved herself via work experience and deserves the job. Answer: Option 1 is likely to cause hard feelings in the department. In addition, Option 1 places Maxine in direct opposition to the Civil Service Board. Maxine is however wise to consider that test scores may not be the best indicator of who can do the job. 2. Give the job to the candidate with the highest score. You don’t need to make enemies on the Civil Service Board, and, although, it is a bureaucratic procedure, the test is an objective way to select a permanent placement. Answer: Options 1 and 2 both are likely to cause hard feelings in the department. Considering that Maxine has the final say with regard to the opening, she should be sure if the test really assesses fairly the right person for the position. 3. PRESS the board to devise a more comprehensive set of selection criteria—including test results as well as supervisory experience, ability to motivate employees, and knowledge of agency procedures—that can be explained and justified to the board and to employees. Answer: Option 3 is probably the best choice, although Maxine must be careful that she does not develop a set of criteria that is designed simply to justify giving the job to Sheryl, and she may want to involve others in helping devise selection criteria. The job still may go to someone besides Sheryl Hines, but this option takes into consideration her skills, knowledge, and experience. The selection criteria, in addition to the employment test, should include an application, structured interview, reference check. APPLY YOUR SKILLS: CASE FOR CRITICAL ANALYSIS Smart Style Salons 1. What positive and negative managerial characteristics does Jamika possess? Answer: A manager’s job requires a range of skills that includes conceptual, human, and technical skills. During turbulent times, managers really have to stay on their toes and apply all their skills and competencies in a way that benefits the organization and stake holders— employees, investors, customers, and the community. Jamika’s hard work and combination of skills made her the manager of the salon. Jamika’s failure to clarify direction or performance expectation from her employees is one of her negative managerial characteristics. Poor planning practices and reactionary behavior are the other negative traits that Jamika possess. 2. How do these traits help or hinder her potential to get to the top position at Riverwood Mall Salon? Answer: Jamika’s failure to clarify direction or performance expectation from her employees Holly and Jean, lead to scheduling problems for the clients. This would be bad for the business and would hamper her chances to get to the top position at Riverwood Mall Salon. Poor planning practices and Jamika’s reactionary behavior would also hinder her climb up the ladder. 3. How do you think Jamika should have handled each of the incidents with Marianne? Holly and Carol Jean? Victoria? Answer: Jamika should not have displayed the outburst of anger when Marianne informed her about Holly and Carol Jean’s leave, as Marianne was merely doing her job of being a receptionist. With regard to Holly and Carol Jean, Jamika should have told them about what their performance expectations were. She should have clarified about the leave scenario to them and not let them get away with unwarranted absences in the first place. Jamika should empower her team and not micromanage as in the case with Victoria. She should help Victoria in her career development rather than wanting to hide Victoria’s competencies. ON THE JOB VIDEO CASE ANSWERS Camp Bow Wow: Innovative Management for a Changing World 1. List the three broad management skill categories and explain which skills are needed most for each of the Camp Bow Wow leaders highlighted in the video. Answer: Three general categories of management skills are conceptual skills, human skills, and technical skills. Conceptual skill, which is the most important skill category for top managers, is the cognitive ability to see the organization as a whole system and the relationship among its parts. Human skill, which is highly important for middle managers, is the ability to work with and through other people and to work effectively as a group member. Technical skill, which is most important for first-line managers and nonmanagers, is the understanding of and proficiency in the performance of specific tasks. While all managers at Camp Bow Wow require some degree of each of the three skill sets, Camp Bow Wow franchise owner Sue Ryan needs to have well-developed conceptual skills to think strategically about her business, to understand how it interacts with market trends, and to manage the ongoing relationship with corporate headquarters. General Manager Candace Stathis needs to specialize in human skills—especially as the primary person responsible for building good relationships with clients. Camp counselors at Camp Bow Wow need to have technical skill in managing dog care and general office work. 2. Which activities at Camp Bow Wow require high efficiency? Which activities require high effectiveness? Answer: Effectiveness is the degree to which the organization achieves a stated goal; efficiency refers to the amount of resources used to achieve an organizational goal. A high performance company is one that achieves organizational goals to the maximum extent possible (effectiveness) while making the best use of limited resources (efficiency). According to Candace Stathis, the dog care tasks at Camp Bow Wow require high efficiency so that everything gets done on time and according to schedule. In contrast, she says customer service needs to be effective but not necessarily efficient, since overemphasis on efficiency could interfere with quality customer interactions. “Customer service has to be effective as opposed to efficient because it’s important for the owners to know that you care about their dogs,” Stathis said. “If you’re just trying to be efficient, then it’s not going to make them want to come back, and it’s not going to make them feel that you know them or their dog.” She points out that the hardest part of her job is trying to juggle the customer service side of the business with the pet care side. 3. List two activities that leaders at Camp Bow Wow perform daily, and identify which of the ten managerial roles discussed in the chapter figure prominently for each. Answer: Candace Stathis performs the interpersonal roles of figurehead and liaison whenever she meets with dog owners. Owner Sue Ryan performs the decisional roles of entrepreneur and resource allocator in starting a franchise business and hiring managers and counselors to help her operate the new business. CHAPTER 2 THE ENVIRONMENT AND CORPORATE CULTURE Suggested Answers to End Of Chapter Discussion Questions 1. What are the characteristics of a flat world, a term used by Thomas Friedman to describe today’s business environment? What challenges do they pose? How can you prepare to manage in a flat world? Answer: In his book The World Is Flat, Thomas Friedman challenges managers to view global markets as a level playing field where geographical divisions are irrelevant. A flat world, Friedman argues, creates opportunities for companies to expand into global markets and build a global supply chain. As managers plan for expansion into global markets, they have to consider the international dimension of the external environment, which includes events originating in foreign countries, as well as new opportunities for U.S. companies in other countries. The international environment provides new competitors, customers, and suppliers and shapes social, technological, and economic trends as well. 2. Would the task environment for a cellular phone provider contain the same elements as that for a government welfare agency? Discuss. Answer: There are three components of the task environment: competitors, suppliers, and customers. An analysis of each of these components for the two organizations illustrates the differences in their task environments. Competitors for cellular phone companies include not only other cellular phone companies, but also traditional phone companies, broadband phone services, and other electronic communication services. It is debatable whether there are competitors for most government welfare agencies. Churches and other charitable organizations often provide similar services, but do not really compete with the agencies. Suppliers of cellular phone companies include the cell phone and other electronic device manufacturers, investors, and companies that build and operate cell phone towers. Suppliers of government agencies, in addition to material suppliers, are ultimately the taxpayers. Customers of cellular phone companies generally include businesses and members of the general public who are financially sound and able to afford the services offered by the cellular phone companies. Customers or clients of a government welfare agency are generally persons who are financially weak. 3. What strategic issues have the potential to create environmental uncertainty in the following four industries: (a) automobile; (b) social media; (c) newspaper; and (d) medical services? Answer: The forces influencing the environment are competitors, resources, technology, and economic conditions. The general environment forces include natural, international, technological, social, economic, and legal-political dimensions. The task environment includes those sectors that have a direct working relationship with the organization, among them customers, competitors, suppliers, and the labor market. Organizations are challenged by uncertainty in the market place and must be able to respond quickly to changing conditions. These forces impact management and create uncertainty, especially in the general environment. A manager must be able to utilize a contingency approach to planning and control events and activities as they develop. 4. Contemporary best-selling management books often argue that customers are the most important element in the external environment. Do you agree? In what company situations might this statement be untrue? Answer: Companies in the public and private sector must be customer driven to remain competitive. Management and employees must be customer sensitive and custom deliver the right bundle of utilities to create optimal customer satisfaction. Every organization must have a customer focus and this should be reflected in the mission, goals, and strategies of every firm. 5. Why do you think many managers are surprised by environmental changes and hence are less able to help their organizations adapt? Answer: Managers sometimes do not realize the need to carefully monitor the environment so that they can anticipate and prepare for changes, and there are also things that happen in the environment that cannot reasonably be predicted. By definition, uncertainty means that managers lack sufficient information about environmental factors to understand and predict needs and changes. Companies have to make an effort to adapt to the rapid changes in their environments. 6. Why are interorganizational partnerships so important for today’s companies? What elements in the current environment might contribute to either an increase or decrease in interorganizational collaboration? Discuss. Answer: Interorganizational partnerships are important for today’s companies to survive and grow in the future. Sharing information and resources is essential to cost effectiveness and satisfying stockholders of these organizations. Technological advancements will continue to increase the ease with which interorganizational collaboration occurs. 7. Consider the factors that influence the environmental uncertainty (rate of change in factors and number of factors in the environment) that are presented in Exhibit 2.4. Classify each of the following organizations as operating in either (a) a low-uncertainty environment or (b) a high-uncertainty environment: Hyundai, Facebook, a local Subway franchise, FedEx, a cattle ranch in Oklahoma, and McDonald’s. Explain your reasoning. Answer: In a high uncertainty environment, the external factors change rapidly whereas in a low uncertainty environment, there are few external factors involved and they are relatively stable. Hyundai, Facebook, FedEx, Subway, and McDonald’s would be classified as organizations operating in a high uncertainty environment as there are number of external factors involved that change rapidly. In the case of a cattle ranch in Oklahoma, there are few external factors involved and would be relatively stable, hence categorized as organizations operating in a low-uncertainty environment. 8. Cultural symbols are usually noticed through sight, sound, touch, and smell. For example, Costco displays a limited amount of low-priced merchandise in a no-frills, self-service warehouse with concrete floors. What do these elements communicate as symbols about its corporate culture? Answer: Symbols are important to corporate culture because they are tangible objects, acts, or events that embody deeper values shared by organization members. Astute managers create symbols to help reinforce key values. For example, Mary Kay Cosmetics uses a “golden rule” marble that is given to senior employees to symbolize that the golden rule will be used in all of their dealings. Almost anything can serve as a symbol. Thus, stories, heroes, slogans, and ceremonies all serve their own purpose, but also have symbolic value by indicating to employees the values and understandings that are especially significant for the organization. 9. Both China and India are rising economic powers. How might your approach to doing business with Communist China, a communist country, be different from your approach to doing business with India, the world’s most populous democracy? In which country would you expect to encounter the most rules? The most bureaucracy? Answer: China will have many more rules and much more bureaucracy than will India, as its government tries to strictly control the activities of foreign businesses, as well as those of its own citizens. Doing business in India will be considerably easier than in China due, in large measure, to the greater openness of its society and government. Additionally, there may be less risk of government interference or even takeover of company facilities and properties in India than there is in China. 10. As described in this chapter, Zynga CEO Mark Pincus is obsessed with high performance, and demanding deadlines define the corporate culture. Describe how this culture may be good for the short term but ultimately could hurt the organization’s long-term sustainability. Answer: Zynga represents itself as an organization that is focused primarily on bottom-line results and pays little attention to organizational values. This approach is profitable in the long run, but the success is difficult to sustain over the long term because the “glue” that holds the organization together—that is, shared cultural values—is missing. The relentless focus on financial performance began to take a toll when employees started voicing their frustration, complaining about long hours and aggressive deadlines. Former employees describe emotionally charged encounters, including loud outburst from Mark Pincus, threats from top managers, and moments when colleagues broke down in tears. Little attention is paid to cultural values that bind people into a unified whole. The company’s success likely cannot be sustained without an increased focus on building a more positive culture. Already, valued employees are being lured away by competitors in an industry where talent is scarce. Apply Your Skills: Experiential Exercise Working in an Adaptability Culture Although this exercise deals with culture in the workplace, some students may not have much experience with workplace cultures, so it may be useful to ask students about norms on their campus—a culture with which they may be more familiar. Are there styles of dress, books, bags, hangout places, modes of talking, drinking, and dressing or fitness, that govern what reaction students give to one another? You might also ask them about the clubs or organizations to which they belong. If there are strong norms, then there is a strong culture, whether it is a positive or negative one. Often sororities and fraternities have strong cultures and they have been criticized for that in recent years because of harsh “hazing” practices. Ask them to compare, if possible, a club or organization with a strong culture and one with a weaker culture and see what the differences are. The discussion of norms on campus and in clubs or other organizations can then be compared to culture in work organizations. Apply Your Skills: Small Group Breakout Organizational Culture in the Classroom and Beyond This exercise asks students to identify cultural norms from their own experiences in three different settings, then discuss the identified norms in groups of four to six students and group the norms by common themes and give each group of norms a title. Students will also discuss the origins of norms, the difference between espoused norms and enacted norms, and responsibility for establishing norms. Apply Your Skills: Ethical Dilemma Competitive Intelligence Predicament 1. Go ahead and use the documents to the company’s benefit, but make clear to your boss that you don’t want him passing confidential information to you in the future. If he threatens to fire you, threaten to leak the news to the press. Answer: This is probably not a good option, since Miquel would feel uncomfortable using the information, knowing that it was received illegally, and it’s almost never a good idea to get into a threat/counter threat argument with your boss. 2. Confront your boss privately and let him know you’re uncomfortable with how the documents were obtained and what possession of them says about the company’s culture. In addition to the question of the legality of using the information, point out that it is a public relations nightmare waiting to happen. Answer: This is probably the best initial option. Miquel should be up front with his boss and let him know he doesn’t intend to do anything illegal. If the boss insists on doing it anyway, or threatens him with being fired if he doesn’t, then he might consider moving on to Option 3. 3. Talk to the company’s legal counsel and contact the Society of Competitive Intelligence Professionals for guidance. Then with their opinions and facts to back you up, go to your boss. Answer: After being up front with his boss, Miquel should then go elsewhere if the boss does not support him in this matter. Apply Your Skills: Case for Critical Analysis Not Measuring Up 1. Do you think Zeitland’s desire for changes in culture are related to changes in the external environment? Explain. Answer: The task environment component of the external organizational environment includes competitors, suppliers, customers, and the labor market. The organization also has an internal environment, which includes the current employees, management, and corporate culture. An increasingly younger workforce, changing consumer tastes, and technology changes in the industry had caused Zeitland to look more closely at culture and employee satisfaction. The goal of survey and scoring process was to provide feedback in order to assure continuous improvement across a variety of criteria. Hence, Zeitland’s desire for changes in culture is related to changes in the external environment as well as internal environment. 2. What additional investigation might Wheeling and Zeitland undertake before settling on a plan of action? Answer: Wheeling and Zeitland undertake additional investigation before settling on a plan of action as Cam’s score on his management skills and job performance had not improved despite Cam implementing several of the changes from last year’s survey. Wheeling and Zeitland should talk to employees and Cam separately to figure out the problem areas. 3. In which quarter of Exhibit 3.8 would you place Cam? What are some steps you would recommend that Cam consider to better connect with the employees who report to him? Answer: Cam could be placed in the first quarter of Exhibit 2.8 under Quadrant A as he meets the performance goals but fails to uphold cultural values. Cam is unable to build a cohesive team. Cam must communicate more to ensure that employees understand him better. He should emphasize on both values and business results to create a high-performance culture. On the Job Video Case Answers Camp Bow Wow 1. What aspects of Camp Bow Wow’s corporate culture are visible and conscious? What aspects are invisible and unconscious? Answer: Visible aspects of Camp Bow Wow’s culture include the company logo, the presence of dogs in workspaces, the dress code, the camp imagery, and Heidi Ganahl’s life story, which is told and retold during franchisee meetings. Founder Heidi Ganahl says that one of the unique things about working at Camp Bow Wow’s corporate headquarters is that “you get to bring your dog to work with you every day.” Employees keep baby gates at offices to hold dogs, and the company encourages regular dog-walking breaks. According to Heidi Ganahl, having pets at work keeps everyone focused on the company mission and what’s best for the brand. Invisible aspects of Camp Bow Wow’s culture include values such as overcoming adversity to achieve success—a core value communicated through Heidi Ganahl’s life story. Another invisible value embraced at Camp Bow Wow is the idea of providing a humanitarian service to dogs and dog lovers. This invisible value has led to the creation of the Bow Wow Buddies Foundation, a non-profit division of Heidi Ganahl’s company that finds homes for unwanted pets, invests in animal disease-prevention research, and promotes humane treatment of animals. 2. Why did Camp Bow Wow have to change its culture when it became a national franchise? Answer: Camp Bow Wow’s early family-business culture was useful in the startup phase of Camp Bow Wow’s growth. However, Founder Heidi Ganahl says her company required a different culture once it became a national franchise. In particular, Ganahl says the focus had to shift from a family-based culture to a business-and-performance-oriented culture. She states that the big challenge for any franchise is to get hundreds of franchisees on the same page and committed to one vision and one way of achieving goals. Ganahl says this requires a strong culture that “doesn't allow for people to color outside of the lines, yet taps into their creativity and innovation.” 3. What impact does Heidi Ganahl’s story have on employees at Camp Bow Wow? Answer: The story of Heidi Ganahl is famous at all levels of the Camp Bow Wow organization. Consumers and franchisees who come in contact with Camp Bow Wow learn about the company by hearing the details of her story. Boulder franchisee Sue Ryan says that Ganahl’s story is inspiring to her because it deals with perseverance through tough times. Ryan adds that while business owners don’t experience Ganahl’s specific tragedy, they do understand adversity. Finally, the story offers a personal connection between employees and the founder. According to Ganahl, the takeaway from her story is that people inevitably face challenges in life and business, but our response to adversity determines whether we will be successful or unsuccessful. CHAPTER 3 MANAGING IN A GLOBAL ENVIRONMENT Suggested Answers to End Of Chapter Discussion Questions 1. What specifically would the experience of living and working in another country contribute to your skills and effectiveness as a manager in your own country? Answer: Generally speaking, the global exposure of working in another country helps people develop skills and networks that will grow over time and instills a greater level of sensitivity to opportunities. More specifically, such exposure helps managers understand other cultures and learn to work more effectively with them by learning about the social values of those other cultures. This is increasingly more critical even in one’s own country, as the workforce becomes more and more diverse. Also, because effective management styles differ from one country to another, learning to work effectively in another country will make managers more flexible in dealing with a variety of cultural and ethnic situations in the U.S. 2. Do you think it is realistic that BOP business practices can have a positive effect on poverty and other social problems in developing countries? Discuss. Answer: The bottom of the pyramid (BOP) concept proposes that corporations can alleviate poverty and other social ills, as well as make significant profits, by selling to the world’s poorest people. The term bottom of the pyramid refers to the more than four billion people who make up the lowest level of the world’s economic “pyramid”, as defined by per capita income. An example of how bottom of the pyramid business practices can have a positive effect on poverty and other social problems is Unilever’s (formerly Lever Brothers) efforts over many years to prevent the spread of disease in poor areas of the world by introducing very inexpensive soap products to the people there. Another example is Procter & Gamble’s efforts to get people in developing countries to use diapers and feminine hygiene products that sell at low prices. In these cases and others, companies positively impact the general health of the population or even reduce disease by providing products at prices specifically set to be affordable to those in very low per capita areas of the world. 3. Somnio, a start-up running shoe company in California, decided to start selling its products around the world from the very beginning. In general terms, name some of the challenges a start-up company such as Somnio might face internationally. Answer: The basic management functions of planning, organizing, leading, and controlling are the same whether a company operates domestically or internationally. However, managers will experience greater difficulties and risks when performing these management functions on an international scale. When operating on an international basis, it is important for managers to give considerable thought to economic, legal-political and sociocultural factors. International businesses get affected by the infrastructure and economic problems of the countries where the business has to set up. Differing laws and regulations make doing business a challenge for international firms. Managers working internationally should also guard against ethnocentrism, which is the natural tendency among people to regard their own culture as superior to others. 4. Do you think it’s possible for someone to develop a global mindset if they never live outside their native country? How might they do that? Answer: It is possible for someone to develop a global mindset even if they never live outside their native county by understanding and appreciating differences in social values. People from some cultures tend to pay more attention to the social context (social setting, nonverbal, social status, etc.) of their verbal communication. For example, American managers working in China have discovered that social context is considerably more important in that culture, and they need to learn to suppress their impatience and devote the time necessary to establish personal and social relationships. 5. Compare the advantages associated with the market entry strategies of exporting, licensing, and wholly owned subsidiaries. What information would you need to collect and what factors would you consider when selecting a strategy? Answer: Of these four entry strategies, exporting is considered to be low risk and low cost. The reason is that the firm keeps its production facilities in its home country and uses middlemen or foreign distributors to market its products abroad, thereby avoiding the costs of setting up its own marketing channels. The problem with exporting is that the firm has little control over the marketing of its product and no direct contact with foreign customers. Foreign licensing requires a somewhat greater capital investment, and licensees are apt to have better contacts and greater experience with marketing in their own countries. The international firm also maintains some control over foreign production and marketing, and will have some opportunity for direct contact with foreign producers and customers. The problem with licensing is that licensees may eventually become competitors, and they also may fail to maintain rigid quality standards in production or marketing, thereby damaging the reputation of the international firm. A wholly owned subsidiary represents the greatest costs and the greatest risks, but also the greatest potential return. Owning a subsidiary gives the firm more control over production and marketing than either exporting or licensing. The firm and its managers are close to the market and may actually send managers to the foreign countries to run the business in the host country. If the business is successful, the international firm will get to keep the profits. The problem with wholly owned subsidiaries is that establishing operating production facilities in foreign countries is costly and directly exposes the firm’s assets and personnel to economic and political risks. In deciding which strategy to use, some things to consider include the firm’s available investment capital, available personnel to staff a foreign facility, and all of the dimensions of the economic, political-legal, and sociocultural aspects of the country in which the firm is considering developing business activities. 6. Should a multinational corporation operate as a tightly integrated, worldwide business system, or would it be more effective to let each national subsidiary operate autonomously? Answer: There is no single correct answer to this question because arguments can be made both ways. The answer depends partly on the goals and strategy of the multinational corporation. Operating as an integrated, worldwide system means that the parent company and its foreign affiliates work together to fulfill common business objectives. Such global integration allows a multinational corporation to attain economies of scale in production and also to acquire resources and component parts wherever in the world it is most advantageous to do so. Operating as an integrated system is often associated with a globalization strategy and with a decentralized decision making process. The reason for going multinational is to gain the advantage of operating in several countries simultaneously, which is often facilitated through uniform policies as well as standard products and business practices. This approach can produce cost savings and uniformly high quality performance throughout the firm. Letting each subsidiary operate autonomously means that subsidiaries are free to respond to economic, political, and cultural conditions of the nation in which they are located. Headquarters personnel are not likely to be familiar with conditions in each country or be capable of quickly responding to changes in local conditions. The strongest argument in favor of a decentralized organization that lets subsidiaries operate autonomously is the diversity of environments that exist around the world. Autonomy also may reduce political risk by overcoming the image of outside control. 7. Why do you think many people are so frightened by globalization? Based on what is occurring in the world today, do you expect the globalization backlash to grow stronger or weaker over the next decade? Answer: Generally, it may be that people who are afraid of globalization think they will somehow come out on the losing end as globalization runs its course. They may be frightened by the sheer size and power of large multinational corporations, sensing that they are simply and gradually losing all vestiges of control over their lives as these enormous organizations become more and more powerful, driving the needs of society and the agendas of world governments to an ever-greater extent. More specifically, the globalization backlash may be primarily the result of public perception that other countries benefit from free trade to a much greater extent than does the United States. The dramatic loss of jobs resulting from expansion of outsourcing to other countries has led to increasing public resentment. Managers and companies may face significant public relations difficulties in response to outsourcing actions. Managers may even face the outsourcing of their own jobs as up to 3.3 million mostly white-collar jobs shift from the U.S. to low-wage countries by 2015. Interestingly, though, U.S. companies are also finding a growing interest on the part of overseas companies in outsourcing to the U.S. The backlash against globalization is likely to become stronger over the next decade as trade agreements with India, China, and other countries continue to expand and MNCs become larger and more powerful in an environment of minimal regulation. 8. Two U.S. companies are competing to take over a large factory in the Czech Republic. One delegation tours the facility and asks questions about how the plant might be run more efficiently. The other delegation focuses on ways to improve working conditions and produce a better product. Which delegation do you think is more likely to succeed with the plant? Why? What information would you want to collect to decide whether to acquire the plant for your company? Answer: There is no clear answer to this question. The Czech Republic is a former communist-bloc country and a newly emerging democratic economy, and its people have been used to manufacturing facilities run by the government. The plant may need substantial improvements in efficiency. On the other hand, the working conditions there may be in need of substantial improvement as well, and product quality will be important to success. It would be important to gather a great deal of information about each of the dimensions of the economic, legal-political, and sociocultural aspects of the Czech Republic and, in particular, the local area in which the plant is located. The delegation focusing on improving working conditions and product quality is likely to succeed. Information to Collect: 1. Financials: Profitability and costs. 2. Efficiency: Operational processes. 3. Employee Morale: Satisfaction and conditions. 4. Market Position: Competitive standing. 5. Compliance: Regulatory adherence. 9. Which style of communicating do you think would be most beneficial to the long-term success of a U.S. company operating internationally—high-context or low-context communications? Why? Answer: It seems likely that high-context communications would be more beneficial to the long-term success of a U.S. company operating internationally because the most rapidly developing economies are in Asian and Arab countries, which tend to be high-context cultures. This may present significant difficulties for American managers, most of whom are males from low-context cultures. 10. How might the social value of low versus high power distance influence how you would lead and motivate employees? What about the value of low versus high performance orientation? Answer: Power distance refers to the extent to which accept inequality in power among institutions, organizations, and people. Low power distance means that people expect equality in power. In countries with low power distance, it will be important to show equality in both tangible and intangible ways. Status symbols such as large offices or reserved parking spaces for executives will cause problems among the workforce. Employees will expect to participate in decision-making and teamwork is likely to be an effective structure for the organization. In a high power distance country, people will expect those at higher levels in the organization to have certain perks and will also expect them to make the decisions. A society with a high performance orientation places high emphasis on performance and rewards people for performance improvements and excellence. Employees in a high performance orientation society can be motivated by rewards for excellent performance and by developing innovative ways to improve performance. A low performance orientation means people pay less attention to performance and more attention to loyalty, belonging, and background. Employees in low performance orientation societies can be motivated by the perception that their managers and companies are loyal to them, and by the creation of a ‘family’ atmosphere within their companies. In addition, they are likely to go to great lengths in their performance for managers who show an obvious interest in their employees as individuals and fellow human beings. Apply Your Skills: Experiential Exercise Rate Your Global Management Potential The world is truly shrinking and the number of companies doing business abroad increases each year. In coming years it will become harder and harder to find medium- and large¬-sized companies that do not have some international interactions, whether that be importing or exporting parts and supplies, needs for assembling abroad, or international subsidiaries, joint ventures or strategic alliances. Professionals incapable of being flexible in their work and interpersonal approaches will have a difficult time adapting in this new environment and can therefore be the cause of the loss of millions of dollars for their companies. Other cultures may value things differently than Americans. These sometimes include socializing before deal making rather than rushing right into the business negotiations. This is because in some other cultures relationships are more important than contracts (which are more important here), and therefore the relationships must be solid. Trustworthiness is determined there by knowing the person rather than relying on words written in papers. Some other cultures are more patient and introspective than the American one. Therefore, they see Americans as too pushy and impatient. If you want to work in such an environment, you must learn to be more patient and to allow for silence at times. One of the best ways to begin to prepare yourself for this world of globalized business is to begin reading about events in other parts of the world, studying other cultures, learning a language, traveling without being merely a “tourist,” and seeking out foreign restaurants, as well as foreign students. Look at the differences as something new and fascinating. The people who fail in international assignments are often those who are “ethnocentric” and cannot see the beauty in other cultures, but tend to constantly compare them in terms of how deficient they are compared to the U.S. Successful American expatriates, though, view new cultures with an attitude of curiosity and a sense of wonder. Apply Your Skills: Small Group Breakout Global Entrepreneurship IQ? This exercise asks students to compare questions in terms of the ease of doing business. Since they would not likely know the answers, this will give them an opportunity to make a guess and then compare their guess to the results of researching the World Bank 2013 information given as the source for the questions. 1. Singapore 2. Poland 3. Surinam 4. Georgia 5. Saudi Arabia 6. Colombia 7. Latvia 8. Rwanda 9. El Salvador 10. Madagascar Apply Your Skills: Ethical Dilemma AH Biotech 1. Do the clinical trials in Albania. You’ll be able to bring the drug to market faster and cheaper, which will be good for AH Biotech’s employees and investors and good for the millions of people who suffer from anxiety attacks. Answer: The problem with this option is that when the trials end in Albania, free treatment for those patients will be discontinued and they are likely to be too poor to buy the drug even if it was marketed there. 2. Do the clinical trials in the United States. Even though it will certainly be more expensive and time-consuming, you’ll feel as if you’re living up to the part of the Hippocratic Oath that instructed you to “prescribe regimens for the good of my patients according to my ability and my judgment and never do harm to anyone.” Answer: This option may be best if Hassan’s primary concern lies in not violating his own values with regard to the Hippocratic Oath and he does not want to, or has doubts about his ability to establish a compassionate use program in Albania after trials there are completed. Of course, if he considers the delay of doing the trials in the U.S. to be doing harm to those individuals who might be able to get the drug sooner if the trials were done in Albania, then this may not be the best option. 3. Do the clinical trials in Albania, and if the drug is approved, use part of the profits to set up a compassionate use program in Albania, even though setting up a distribution system and training doctors to administer the drug, monitor patients for adverse effects, and track results will entail considerable expense. Answer: If Hassan believes the drug will eventually produce adequate profits to pay for a compassionate use program in Albania to continue treatment for those who participate in clinical trials there, and that the drug will be approved following those trials, then this is probably the best option for him. He can get the drug to patients in the U.S. sooner and he will not be abandoning the Albanian patients who participate in the trials, thus upholding his Hippocratic Oath in both respects. Apply Your Skills: Case for Critical Analysis We Want More Guitars! 1. How accurate is Adam Wainwright’s analysis of the situation at Guitarras Dominguez? Do you think craftsmanship is incompatible with increasing productivity in this company? Why? Answer: Adam Wainwright’s analysis of the situation at Guitarras Dominguez is not accurate. Adam does not understand the working and management at Guitarras Dominguez. There are major differences in social values between Guitarras Dominguez in Spain and Adam Wainwright’s work place in the U.S. Craftsmanship is incompatible with increasing productivity in this company, as each guitar is a creation rather than a streamlined product. At Guitarras Dominguez, craftsmanship is given paramount importance, not productivity. 2. What social values are present in Guitarras Dominguez, that seem different from U.S. social values (Exhibit 3.6 and Exhibit 3.7)? Explain. Answer: The social values present in Guitarras Dominguez are quite different from U.S. social values. There is greater emphasis on high performance in the U.S. whereas in Spain the emphasis is on loyalty, belonging, and background. 3. What do you recommend Wainwright do to increase production in a business setting that does not seem to value high production? Answer: Wainwright should communicate more with Salvador and explain to him the need for increased production. In a business setting that does not seem to value high production, Wainwright should not suggest about the operations in the U.S. rather he should ask Salvador what best can be done to increase production in the Spanish set up. On the Job Video Case Answers Holden Outerwear 1. Identify Holden’s primary approach to entering the international market. What are the benefits of this entry strategy? Answer: For small businesses that want to “go global,” exporting, global outsourcing, and licensing represent low-cost ways of conducting business internationally. To reach global consumers and keep manufacturing costs low, Holden uses an outsourcing strategy. The manufacture of Holden apparel takes place in factories in China. Owner Mikey LeBlanc states that this strategy slashes the cost of his products in half. Outsourcing also provides a steady source of skilled labor and textile materials. Large well-established firms tend to use more costly market entry strategies, such as acquisitions and greenfield ventures. Although high cost market entry strategies involve significant risk and resources, they offer maximum control over business processes and profits. 2. Based on what you know of Holden from this video, do managers seem to have a global mindset? Discuss. Answer: Ask students to summarize what they understand as being involved in a global mindset. Then have them list evidence that would indicate the extent to which such is the case for the managers. Based on the video, if Holden managers demonstrate a global mindset, they would show an understanding of and sensitivity to international markets, cultural differences, and global business practices. This involves adapting strategies to diverse environments and valuing global perspectives. If they lack these traits, they may struggle with international expansion and cultural integration. 3. What are the challenges of international management for leaders at Holden? Answer: While the four management functions of planning, organizing, leading, and controlling are the same whether a company operates domestically or internationally, managers experience greater challenges and risks when performing functions in an international setting. In the video, Mikey LeBlanc explains that to obtain the benefits of China’s low cost manufacturing, managers had to carefully oversee 12 different shipping companies. The situation required extensive paperwork and resources. In addition, garments with multiple components often failed to deliver together at the same time, creating long delays. Though not discussed specifically in the video, Holden’s managers face additional challenges in the economic, legal-political, and sociocultural environment of business. Difficulties include political unrest, government takeovers, tariffs, language and cultural barriers, poor infrastructure, and even globalization protests. To help manage people, global managers should understand cultural differences, including Hofstede’s value dimensions: power distance, uncertainty avoidance, individualism/collectivism, masculinity/femininity, and long-term/short-term orientation. CHAPTER 4 MANAGING ETHICS AND SOCIAL RESPONSIBILITY Suggested Answers to End Of Chapter Discussion Questions 1. Is it reasonable to expect that managers can measure their social and environmental performance on the same level as they measure their financial performance with a triple bottom line? Discuss. Answer: With a philosophy of sustainability, managers weave environmental and social concerns into every strategic decision so that the financial goals are achieved in a way that is socially and environmentally responsible. Managers that embrace sustainability measure performance in terms of financial performance, social performance, and environmental performance, referred to as triple bottom line. This is sometimes called the three Ps: People, Planet, and Profit. Based on the principle that what you measure is what you strive for and achieve, using a triple bottom line approach to measuring performance ensures that managers take social and environmental factors into account rather than blindly pursuing profit, no matter the cost to society and the natural environment. 2. What various stakeholder groups did oil giant BP have to respond to in regard to the massive 2010 oil spill in the Gulf of Mexico? From what you know about the BP oil spill, how would you evaluate BP executives’ behavior in terms of corporate social responsibility? Answer: It would be very difficult to provide an exhaustive list of the stakeholders to whom BP needed to respond, but some of them include shrimpers, fishermen, and others who make their living from the collection of marine life in the Gulf, people involved in the tourist industry around the Gulf, restaurant owners, operators, and employees, local governments and residents of coastal communities, the U.S. public at large, BP shareholders and employees, and many others. Evaluation of BP executives’ behavior depends on many factors, such as how much news coverage students have seen, the extent of bias contained in that coverage, students’ own world views, etc., and will range from those who believe BP executives did everything possible to uphold their social responsibility to those who believe those efforts were minimal at best and nothing more than a smokescreen as BP continued to rake in excessive profits. 3. Imagine yourself in a situation of being encouraged by colleagues to inflate your expense account. What factors do you think would influence your choice? Explain. Answer: While most students will probably want to answer that they would be most affected by their individual moral development, this may be an idealistic exaggeration. As pointed out by the text, most managers have not advanced beyond the conventional level where one feels that good behavior is living up to what is expected by others and the social system. Many are still on the preconventional level and would act in accordance with their own self interests. Persons on both of these levels would probably go ahead and inflate their expense accounts. Only persons on the principled level would resist the pressure and not inflate the expense account if they felt it was ethically wrong. Factors influencing your choice would include: 1. Ethical Standards: Personal and professional integrity. 2. Consequences: Potential repercussions if caught, including legal and professional impacts. 3. Peer Pressure: Influence from colleagues and the work environment. 4. Company Culture: Organizational norms and values regarding ethics and honesty. 4. Is it socially responsible for organizations to undertake political activity or join with others in a trade association to influence the government? Discuss. Answer: Generally speaking, most students will probably agree that it is socially responsible for organizations to undertake political activities. The question is whether organizations should sit back and passively adapt to the external environment or whether they should be assertive and attempt to control the external environment. Political activities and trade associations are attempts to control the external environment to reduce uncertainty and obtain necessary resources. Political activities do not violate the economic, legal, or ethical responsibilities of the organization. Unless the organization is breaking laws, bribing officials, or doing some other inappropriate behavior, it may make its views known and attempt to move in an appropriate direction. An organization unwilling to be assertive with respect to the external environment may ultimately lose out to competitors. It can be socially responsible for organizations to engage in political activity or join trade associations if done transparently and ethically. It allows businesses to advocate for policies that align with their values and can lead to positive societal impacts. However, it should be balanced with accountability to avoid undue influence or conflicts of interest. 5. Managers at some banks and mortgage companies have argued that providing subprime mortgages was based on their desire to give poor people a chance to participate in the American dream of home ownership. What is your opinion of this explanation in terms of ethics and social responsibility? Answer: As with the BP evaluation in Question 2 above, the answer to this question revolves largely around one’s own worldview. Some will see this as an attempt to help people who could not otherwise afford to buy a home, thereby providing them an opportunity to improve their quality of life, while others will highlight the irresponsibility of extending attractive loan offers to high-risk borrowers, thereby trapping them in financial obligations they are unable to uphold. 6. A noted business executive said, “A company’s first obligation is to be profitable. Unprofitable enterprises can’t afford to be socially responsible.” Discuss why you agree or disagree with this statement. Answer: The business executive’s statement is a bit of a red herring. Of course, for-profit organizations must make at least some profit to stay in business. They cannot put social responsibility ahead of profits over the long term without eventually being forced to go out of business. The question here really centers on what it means to “be profitable”. If “being profitable” means to maximize profits in ever-increasing amounts, then an “unprofitable” enterprise would be unable to afford social responsibility efforts, since diverting any funds or resources toward those activities would mean it was not maximizing profits. On the other hand, if “being profitable” means achieving a positive net income, companies can certainly afford to devote funds and other resources to socially responsible activities and still make a profit. 7. Do you believe it is ethical for organizational managers to try to get access and scrutinize the Facebook pages of employees or job applicants? Discuss. Answer: Under the moral-rights approach, such activity could be viewed as a violation of the right of free consent and/or the right of privacy. At a minimum, firms must be very careful about obtaining and storing personal data in order to avoid litigation over violation of privacy laws. The key to determining the ethics of such activity may lie in whether companies view only what is publicly authorized for viewing by the employee or applicant, or uses tactics designed to circumvent the employee’s or applicant’s privacy settings within the social networking site. 8. Which do you think would be more effective for shaping long-term ethical behavior in an organization: a written code of ethics combined with ethics training or strong ethical leadership? Which would have more impact on you? Why? Answer: Codes of ethics and ethics training are important within an organization; however, simply posting a code of ethics and holding ethics training once a year or even once a month will not suffice. Creating an ethical culture in an organization requires that ethics be part of virtually everything a company does. Ethics should be emphasized in daily meetings, weekly meetings, monthly meetings, at luncheons, during the hiring process, during the orientation and socialization processes, during promotion ceremonies, and during retirement ceremonies. That will only happen with strong ethical leadership. The bottom line is that employees will do what their managers do, so managers must consistently and continuously demonstrate that ethical behavior is important. 9. The technique of stakeholder mapping lets managers classify which stakeholders they will consider more important and will invest more time to satisfy. Is it appropriate for management to define some stakeholders as more important than others? Should all stakeholders be considered equal? Answer: For an organization to succeed, its managers must define goals and specify activity that will help the organization achieve them. In the pursuit of its strategies and goals, managers must make choices. In a noncompetitive world, all stakeholders might be considered equal. In a capitalist economy, the manager’s responsibility is to define which stakeholders are most valued. This does not mean that low ranking stakeholders will be exploited; it simply means that some stakeholders are more instrumental in helping the organization attain its goals. Indeed, the definition of ethical behavior is that organizations should treat individuals equally except when differences are relevant to goals and tasks. The treatment of individuals should not be capricious, but should help the organization accomplish its goals. To expect organizations to treat all stakeholders equally is not reasonable. 10. According to a survey, many people think cheating is more common today than it was a decade ago. Do you think cheating is really more common or does it just seem so? Why? Answer: An argument for those who believe cheating only seems more common today is that, with the rise of the internet and 24/7 cable news, people are simply more aware of behavior that has always been part of the human experience. The argument on the other side might be that the widespread knowledge of corporate scandals such as Enron, Worldcom, AIG, and others, has caused people to see cheating as a way of life – something “everybody” does – and something for which people often suffer relatively small consequences while obtaining enormous rewards. Apply Your Skills: Experiential Exercise Ethical Work Climates Have students complete the self-examination of Ethical Work Climates. Note that ethical climates can range from above 40 (very positive ethical climate) to below 20 (very poor ethical climate). Discuss ethical changes students could make as a practicing manager. A teaching suggestion is to discuss the four approaches to ethical dilemmas: utilitarian approach, individualism approach, moral-rights approach, and justice approach. Apply Your Skills: Small Group Breakout Current Events of an Unethical Type This exercise asks students to start by finding two newspaper or magazine articles from the past several months relating to someone violating business ethics or potentially violating the law regarding business practices and summarize the articles. Students then meet in groups, share their summaries, identify similar themes and sources of unethical behavior, and hoped-for outcomes. Finally, students discuss what managers could do to prevent similar unethical behavior in their own organizations or to fix these situations after they happen. Apply Your Skills: Ethical Dilemma Should We Go Beyond the Law? 1. Talk to the manufacturing vice president and emphasize the responsibility Chem-Tech has as an industry leader to set an example. Present her with a recommendation that Chem-Tech participate in voluntary pollution reduction as a marketing tool, positioning itself as the environmentally friendly choice. Answer: This is the best option because it embodies the utilitarian view of ethics, to provide the greatest good to the greatest number of people. By not polluting the water, the company is looking out for future generations who will benefit from a cleaner environment. The company would avoid actions that could harm others. Nathan would give the company a positive opportunity to right the wrong as part of a marketing campaign. 2. Mind your own business and just do your job. The company isn’t breaking any laws, and if Chem-Tech’s economic situation doesn’t improve, a lot of people will be thrown out of work. Answer: Since Nathan appears to be operating at the postconventional level of moral development, following self-chosen principles of justice and right, he will not be comfortable in an organization that knowingly pollutes the environment. The company is operating at the conventional level by upholding the law. There is a clash between these two levels of moral development. 3. Call the local environmental advocacy group and get them to stage a protest of the company. Answer: This is an extreme course of action that Nathan should take only if option 1 is rejected and he is willing to risk losing his job over it. Apply Your Skills: Case for Critical Analysis Too Much Intelligence 1. How has Ken Bodine shaped the sales culture at Pace Technologies? Do you consider this culture to be at a preconventional, conventional, or postconventional level of ethical development? Why? Answer: A former military intelligence officer, Ken Bodine brought that “sneaky” air into the Pace culture, adding a bit of excitement to the day-to-day business of sales. Bodine wanted everyone—customers, competitors, and the media to see Pace everywhere. Bodine encouraged the air of invincibility and competitive spirit among the sales stuff. This culture is considered to be postconventional as it is guided by Bodine’s internal set of values. 2. What would Ali Sloan do? What would you actually do if you were in her place? Explain. Answer: Ali Sloan would report the matter to Bodine as she considered Cody’s act to be unethical and illegal. If I was in Ali Sloan’s place, I would first try and find out what Cody did was completely unethical and illegal. Then I would find out if this is the culture of the organization. After this, I would talk to Bodine about the matter. 3. How might Cody Rudisell’s decision differ if he based it on the utilitarian approach vs. individualism approach vs. practical approach to ethical decision making? Which approach does he appear to be using? Answer: If Cody Rudisell’s decision was based on the utilitarian approach, he would have thought about his decision affecting Raleigh-Tech rather than just profit or promotion. According to the practical approach, which was used by Cody, he would sidestep debates about what is right, good, or just, and base decisions on prevailing standards of the profession and larger society, taking the interests of all stakeholders into account. According to the individual approach, which Cody appears to be using, his actions are ethical if they promote his best long-term interest, because with everyone pursuing self-interest, the greater good is ultimately served. On the Job Video Case Answers Theo Chocolate 1. What practices at Theo Chocolate embody the concept of sustainability? Answer: Sustainability refers to economic activity that generates wealth and meets the needs of the current generation while saving the environment for future generations. To implement a philosophy of sustainability, managers weave environmental and social concerns into strategic decisions, revise policies and procedures to support sustainability efforts, and measure their progress toward sustainability goals. Theo’s sustainability practices include the following: using only pure ingredients that are grown organically without pesticides, ensuring that growers earn a living wage and have access to education for their families, promoting habitat preservation and reforestation in growing regions, using green energy sources to power the chocolate factory, using sustainable packaging and printing methods, and educating public about social and environmental accountability. 2. What does Vice President Debra Music mean when she says that Theo is a “triple bottom line” company? How is this different from any other company? Answer: In the video, Debra Music says, “We see ourselves as a triple bottom line company, which means we value people, the planet, and profit in equal measure. None of those things suffer at the expense of something else.” The triple bottom line is a green corporate performance measure that evaluates a company’s success in terms of “people, planet, and profits.” Widely attributed to CSR guru John Elkington, the triple bottom line concept differs from the traditional “bottom line” in that it attempts to judge a company’s success by three measures instead of the singular measure of profitability. 3. What does the term fair trade mean to the leaders at Theo? What happens if fair trade goals conflict with a company’s primary responsibility to be profitable? Answer: Fair trade is a financial relationship between producers, sellers, and consumers based on the principle of equity within the exchange of goods. Joe Whinney says that fair trade is important since cocoa bean growers traditionally have not received adequate pay and have even been subject to slave labor in some regions of the world. The social benefits of Fair Trade are far reaching: fair trade enables farmers to take their livelihoods to the next level of sophistication by blending the benefits of modern techniques with artisan practices. Whinney states: “What we're really doing is trying to give an alternative to practices that have contributed to social, economic, and environmental degradation. The average cocoa farmer earns less than a dollar a day for their entire family, and they have very little options in cocoa growing regions to grow other cash crops—as a result, they are beholden to an industry that is very oppressive. The cocoa price has been so low compared to the cost of their production that in West Africa cocoa farmers have had to resort to slavery.” Every company’s core social responsibility is to be profitable. Without economic sustainability, all other concerns of the company crumble in bankruptcy. For companies like Theo, the challenge is to find ways to effectively align social objectives with economic objectives. Ideally, social entrepreneurs should organize the company in such a way that the pursuit of profit simultaneously achieves the firm’s social objectives. Solution Manual for Understanding Management Dorothy Marcic, Richard L. Daft 9781285421230, 9781305313347