Don Hellriegel Texas A & M University
John W. Slocum, Jr. Southern Methodist University
13th Edition
Organizational Behavior
Organizational Behavior, Thirteenth Edition
Don Hellriegel & John W. Slocum, Jr.
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Brief Contents
Preface xix
Part 1: Introduction and Ethical Foundations 1
Chapter 1 Learning about Organizational Behavior 2 Chapter 2 Individual and Organizational Ethics 32
Part 2: The Individual in Organizations 67
Chapter 3 Understanding Individual Differences 68 Chapter 4 Perceptions and Attributions 102 Chapter 5 Learning Concepts to Improve Performance 130 Chapter 6 Motivating Employees 156 Chapter 7 Motivation: Goal Setting and Reward Programs 190 Chapter 8 Workplace Stress and Aggression 218
Part 3: Leadership and Team Behaviors 251
Chapter 9 Interpersonal Communication in Organizations 252 Chapter 10 Leadership Effectiveness: Foundations 288 Chapter 11 Leadership Effectiveness: New Perspectives 318 Chapter 12 Developing and Leading Teams 346 Chapter 13 Managing Conflict and Negotiating Effectively 382
Part 4: The Organization 411
Chapter 14 Managerial Decision Making 412 Chapter 15 Organization Design 444 Chapter 16 Cultivating Organizational Culture 476 Chapter 17 Managing Organizational Change 508
Part 5: Integrating Cases 541
Case 1 A Day in the Life of Yolanda Valdez 542 Case 2 Alan Mulally, CEO, Ford Motor Company 543 Case 3 Conflict Resolution at General Hospital 545 Case 4 Bob Knowlton 547 Case 5 BMW’s Dream Factory and Culture 550 Case 6 ROWE Program at Best Buy 553 Case 7 Whole Foods Market 555 Case 8 The Road to Hell 559 Case 9 How Personal Can Ethics Get? 562
Appendix: BizFlix A-1 References R-1 Subject and Organizational Index I-1 Author Index I-19
Contents
Preface xix
Part 1: Introduction and Ethical Foundations 1
Chapter 1 Learning about Organizational Behavior 2 Learning from Experience: Indra Nooyi, Chairmain and CEO, PepsiCo 3 Leadership versus Management 4 Learning Framework 5
The Individual in Organizations 6 Leaders and Teams in Organizations 7 The Organization Itself 8 Competencies for Individual, Team, and Organizational Effectiveness 8
Ethics Competency 10 Key Attributes 10 Ethical Dilemmas 10
Ethics Competency: Robert A. Eckert, Chairman and CEO, Mattel, Inc. 11 Self Competency 12
Key Attributes 12 Self Competency: Indra Nooyi’s Development Journey 12
Career Development 13 Diversity Competency 14
Key Attributes 14 Categories of Diversity 15
Diversity Competency: Aetna’s Diverse Discoveries Program 17 Across Cultures Competency 17
Key Attributes 18 Avoiding Stereotypes 18
Across Cultures Comeptency: Carlos Ghosn, CEO, Nissan-Renault 18 Communication Competency 19
Key Attributes 19 Communication Competency: Maureen Chiquet, Global CEO, Chanel S.A. 20 Teams Competency 21
Key Attributes 21 Teams and Individualism 22
Teams Competency: Grand Reid, President, Mars Drinks 22 Change Competency 23
Key Attributes 23 Change Competency: Indra Nooyi Leads Change at PepsiCo 24
Blur: Constant Change 24 Chapter Summary 25 Key Terms and Concepts 26 Discussion Questions 26 Experiential Exercise and Case 27
Experiential Exercise: Self Competency—Key Competencies Self-Assessment Test 27 Case: Diversity Competency—Accenture’s Work–Life Balance Programs 29
viii Contents
Chapter 2 Individual and Organizational Ethics 32 Learning from Experience: Anne Mulcahy, Chairman and Former CEO of Xerox,
Commits to Business Ethics 33 Individual Differences and Ethics 34
Stages of Moral Development 34 Moral Intelligence 36
Ethics Competency: Anne Mulcahy’s Ethical Leadership 36 Decision Making and Ethics 37
Ethical Intensity 38 Ethics-Based Principles 39 Concern for Affected Individuals 43 Benefits and Costs 44 Determination of Rights 46 Procedural and Interactional Justice 46
Change Competency: James McNerney, CEO of Boeing 47 Diversity and Ethics 49
Diversity and Ethical Cultures 49 Increasing Diversity as Opportunity 49 Generation Diversity and Ethics 50 Sexual Harassment 52
Diversity Competency: Verizon’s Workplace Diversity 54 Stakeholder Responsibility and Ethics 55
Stakeholder Pressures 56 Ethics Competency: Johnson & Johnson’s Stakeholder Ethics and Principles 57
Sustainable Development 58 Assessing Responsibility to Stakeholders 60
Chapter Summary 62 Key Terms and Concepts 63 Discussion Questions 63 Experiential Exercise and Case 64
Experiential Exercise: Ethics Competency—What Is Your Decision? 64 Case: Diversity Competency—Consensual Relationship Agreements 65
Part 2: The Individual in Organizations 67
Chapter 3 Understanding Individual Differences 68 Learning from Experience: Steve Jobs at Apple 69 Bases of Personality 70
Heredity 71 Environment 72
Self Competency: David Neeleman of JetBlue 76 Personality and Behavior 77
Big Five Personality Factors 77 Self-Esteem 81 Locus of Control 82 Emotional Intelligence 83
Teams Competency: Why Personality Is Important at Starbucks 84 Work-Related Attitudes 85
Components of Attitudes 86 Attitudes Affecting Job Performance 86
Across Cultures Competency: Mercedes-Benz 90 Diversity Competency: Deloitte & Touche 92 Emotions at Work 93
A Model of Emotions 93 Cross-Cultural Differences 95
Contents ix
Chapter Summary 96 Key Terms and Concepts 97 Discussion Questions 97 Experiential Exercises and Case 97
Experiential Exercise: Self Competency—What Are Your Cultural Values? 97 Experiential Exercise: Self Competency—What’s Your Emotional IQ? 99 Case: Self Competency—Larry Ellison at Oracle Computer 100
Chapter 4 Perceptions and Attributions 102 Learning from Experience: Jim Sinegal, Cofounder and CEO of Costco 103 Perceptual Process 104 Across Cultures Competency: McDonald’s Use of Feng Shui 106 Perceptual Selection 107
External Factors 107 Communication Competency: Hand Gestures 109
Internal Factors 109 Person Perception 111
The Perceived 111 The Perceiver 112 The Situation in Foreign Assignments 112
Self Competency: Doing Business in Arab Countries 114 Perceptual Errors 114
Perceptual Accuracy 114 Perceptual Defense 115 Stereotyping 115 Halo Effect 116 Projection 117 Impression Management 117
Attribution Process 119 Making Attributions 120 Internal versus External Causes of Behavior 120
Ethics Competency: The Gap 123 Attributions of Success and Failure 124 Chapter Summary 126 Key Terms and Concepts 126 Discussion Questions 126 Experiential Exercise and Case 127
Experiential Exercise: Self Competency—The Perception Process 127 Case: Self Competency—Joan Murphy 128
Chapter 5 Learning Concepts to Improve Performance 130 Learning from Experience: Working at United Parcel Service 131 Learning Through Rewards and Punishments 133
Classical Conditioning 133 Operant Conditioning 134
Contingencies of Reinforcement 135 Positive Reinforcement 136
Self Competency: Coming to Work Today? 138 Organizational Rewards 139 Negative Reinforcement 139 Extinction 140 Punishment 141
Ethics Competency: Time Off for Bad Behavior 143 Insights for Leaders 144
Schedules of Reinforcement 145 Continuous and Intermittent Reinforcement 145 Fixed Interval Schedule 146
x Contents
Across Cultures Competency: Flowers: A Symbol of Love? 146 Variable Interval Schedule 147 Fixed Ratio Schedule 147 Variable Ratio Schedule 148
Social Learning Theory 149 Symbolizing 149 Forethought 149 Vicarious Learning 150 Self-Control 150
Teams Competency: Steelcase Inc. 151 Self-Efficacy 151 Insights for Leaders 152
Chapter Summary 153 Key Terms and Concepts 154 Discussion Questions 154 Experiential Exercise and Case 154
Experiential Exercise: Self Competency—What Is Your Self-Efficacy? 154 Case: Self Competency—Joe Salatino, President of Great Northern
American 155
Chapter 6 Motivating Employees 156 Learning from Experience: Working at Starbucks 157 Motivational Processes 158
Core Phases 159 Insights for Leaders 160
Satisfying Human Needs 161 Needs Hierarchy Model 161 Learned Needs Model 163
Self Competency: John Schnatter of Papa John’s Pizza 167 Insights for Leaders 168
Designing Jobs 169 Motivator–Hygiene Model 169 Motivator Factors 169 Hygiene Factors 169 Job Characteristics Model 170 Insights for Leaders 173
Teams Competency: SEI Investments 174 Cultural Influences 174
Influencing Performance Expectations 175 Expectancy Model 175 Insights for Leaders 179
Communication Competency: Intuit 180 Ensuring Equity 180
Equity Model: Balancing Inputs and Outcomes 180 Ethics Competency: How Tempted Are You? 182
Procedural Justice: Making Decisions Fairly 183 Insights for Leaders 185
Chapter Summary 185 Key Terms and Concepts 186 Discussion Questions 187 Experiential Exercise and Case 187
Experiential Exercise: Self Competency—What Do You Want from Your Job? 187
Case: Communication Competency—SAS Institute 188
Contents xi
Chapter 7 Motivation: Goal Setting and Reward Programs 190 Learning from Experience: Enterprise Rent-A-Car 191 Model of Goal Setting and Performance 192
Importance of Goal Setting 192 Challenge 194
Teams Competency: Jeff Gordon’s Rainbow Warriors 196 Moderators 197 Mediators 199 Performance 200
Across Cultures Competency: Hewlett-Packard 200 Rewards 201 Satisfaction 201 Consequences 202
Effects of Goal Setting 202 Conditions for Effective Goal Setting 202 Impact on Performance 203
Diversity Competency: Lockheed Martin MS2 Team 203 Limitations to Goal Setting 204 Insights for Leaders 205
Rewards Programs for Improving Performance 205 Informal Programs 207 Profit-Sharing Programs 207
Change Competency: Nucor’s Profit-Sharing Program 208 Skill-Based Pay Programs 209 Flexible Benefit Programs 209 Insights for Leaders 210 Reward Practices in Different Cultures 212
Chapter Summary 213 Key Terms and Concepts 214 Discussion Questions 214 Experiential Exercise and Case 214
Experiential Exercise: Self Competency—Goal Setting 214 Case: Diversity Competency—Allstate Insurance Company 215
Chapter 8 Workplace Stress and Aggression 218 Learning from Experience: Stress and Coping with a Layoff 219 Concept of Stress 221
Fight-or-Flight Response 221 Influences on the Stress Experience 222
Primary Stressors 223 Work-Related Stressors 223
Communication Competency: Workplace Incivility: How Not to Communicate 225 Life Stressors 226
Severe Stress 228 Impacts on Health 228 Impacts on Performance 229 Impacts on Job Burnout 230
Individual Differences and Stress 231 The Type A Personality 232 The Hardy Personality 233
Self Competency: Chesley B. Sullenberger III, Captain of US Airways Flight 1549 234
Stress Management 235 Insights for Individuals 236 Insights for Leaders 236
xii Contents
Change Competency: Ortho-Clinical Diagnostics’ Wellness Program 238 Workplace Aggression 239
Self-Serving Biases 239 Workplace Bullying 240 Sexual Harassment 243 Workplace Violence 244
Diversity Competency: Darwin Realty 246 Aggression toward the Organization 247 Chapter Summary 247 Key Terms and Concepts 248 Discussion Questions 249 Experiential Exercise and Case 249
Experiential Exercise: Self Competency—Work-Related Stress Inventory 249 Case: Ethics Competency—Coleen Colombo and Colleagues Resist Mortgage Fraud 250
Part 3: Leadership and Team Behaviors 251
Chapter 9 Interpersonal Communication in Organizations 252 Learning from Experience: Julia Stewart, Chairman and CEO of DineEquity 253 Elements of Interpersonal Communication 254
Sender and Receiver 254 Transmitters and Receptors 255 Messages and Channels 255 Media Richness 256 Meaning and Feedback 257 Interpersonal Barriers 258
Ethical Interpersonal Communications 260 Communication Openness 261 Constructive Feedback 262 Appropriate Self-Disclosure 264 Active Listening 264
Change Competency: Susan Powers, Chief Information Officer, Travelport GDS 266 Nonverbal Communication 267
Types of Nonverbal Cues 267 Communication Competency: Poor Nonverbal Signals Prior to Layoffs 269
Status Differences 270 Intercultural Communication 270
Cultural Barriers 270 Across Cultures Competency: Tahir Ayub, Partner, PwC 273
Nonverbal Differences 273 Interpersonal Communication Networks 276
Individual Network 276 Informal Group Network 278 Formal Employee Network 278
Change Competency: Michael Ward’s Reflections on CSX’s One Plan Redesign 279
Impacts of E-Mail 280 Impacts of Text and Instant Messaging 281
Chapter Summary 282 Key Terms and Concepts 283 Discussion Questions 284 Experiential Exercise and Case 284
Experiential Exercise: Communication Competency—Communication Inventory 284 Case: Communication Competency—Xographics 286
Contents xiii
Chapter 10 Leadership Effectiveness: Foundations 288 Learning from Experience: Douglas Conant’s Leadership at Campbell Soup Co. 289 Power and Political Behavior 290
Leaders’ Use of Power 290 Political Behavior in Organizations 293 Insights for Leaders 295
Change Competency: Carol Bartz’s Use of Power to Change Yahoo! 296 Legacy Leadership Models 297
Traits Model of Leadership 297 Theory X and Theory Y Model 298 Behavioral Model of Leadership 300
Self Competency: Colin Powell’s “Lessons in Leadership” 303 Situational Leadership® Model 304
Leadership Styles 304 Situational Contingency 305 Choosing a Leadership Style 306
Communication Competency: Paul Millman, CEO, Chroma Technology 306 Insights for Leaders 307
Vroom–Jago Leadership Model 308 Leadership Styles 308 Situational Variables 308 Solution Matrix 309
Ethics Competency: The Bank CEO 310 Insights for Leaders 311
Chapter Summary 312 Key Terms and Concepts 313 Discussion Questions 313 Experiential Exercise and Case 313
Experiential Exercise: Self Competency—Personal Power Inventory 313 Case: Diversity Competency—Women on Corporate Boards 315
Chapter 11 Leadership Effectiveness: New Perspectives 318 Learning from Experience: John W. Thompson, Chairman of Symantec 319 Transactional Leadership 320
Core Components 321 Insights for Leaders 321
Change Competency: Mark Hurd, CEO, Hewlett-Packard 322 Leader–Member Exchange 323
Core Components 323 Insights for Leaders 325
Authentic Leadership 326 Core Components 326 Insights for Leaders 328
Self Competency: Lessons for Leading in a Crisis 328 Transformational Leadership 329
Core Components 330 Insights for Leaders 332
Ethics Competency: Ruben Vardanian, CEO of Russia’s Troika Dialog 333 Global Leadership and Organizational Behavior Effectiveness 335
Core Components 336 Insights for Leaders 339
Across Cultures Competency: Culture and Leadership in Mexico 339 Chapter Summary 340 Key Terms and Concepts 341 Discussion Questions 341
xiv Contents
Experiential Exercise and Case 342
Experiential Exercise: Self Competency—GLOBE Leader Behaviors Instrument 342 Case: Change Competency—Sir Richard Branson, Chairman, Virgin Group, Ltd. 344
Chapter 12 Developing and Leading Teams 346 Learning from Experience: Boeing’s Development of Teams and Their Leaders 347 Introduction to Groups and Teams 348
Classifications of Groups 348 Informal Group 348 Team 349 Effective Teams 350 Team Empowerment 350
Teams Competency: Empowered Teams at W. L. Gore & Associates 351 When to Use Teams 352
Stages of Team Development 353 Forming Stage 354 Storming Stage 354 Norming Stage 354 Performing Stage 355 Adjourning Stage 355
Types of Work-Related Teams 355 Functional Team 356 Problem-Solving Team 356 Cross-Functional Team 356 Self-Managed Team 357 Virtual Team 358 Global Team 360
Across Cultures Competency: Alcoa’s Global Virtual Teams 361 Core Influences on Team Effectiveness 362
Context 362 Leadership 364
Ethics Competency: Sanjiv Das’s Leadership at CitiMortgage 364 Goals 365 Team Size 366 Member Roles 367 Member Diversity 369
Diversity Competency: Angela Braly, CEO and President, WellPoint, Inc. 370 Norms 371 Cohesiveness 372
Potential Team Dysfunctions 373 Groupthink 374 Free Riding 375 Bad Apples Effect 376 Absence of Trust 376 Avoidance of Accountability for Results 376
Chapter Summary 377 Key Terms and Concepts 378 Discussion Questions 378 Experiential Exercise and Case 379
Experiential Exercise: Teams Competency—Team Assessment Inventory 379 Case: Teams Competency—Absence of Teamwork 380
Chapter 13 Managing Conflict and Negotiating Effectively 382 Learning from Experience: Cathy McBroom versus Federal Judge Samuel Kent 383 Conflict Levels 385
Intrapersonal Conflict 386 Interpersonal Conflict 386
Contents xv
Intragroup Conflict 387 Intergroup Conflict 388
Teams Competency: IBM’s Cross-Team Workouts 389 Interpersonal Conflict-Handling Styles 390
Collaborating Style 391 Compromising Style 392 Forcing Style 392 Accommodating Style 393 Avoiding Style 394 Insights for Leaders 394
Self Competency: Reflections on Conflict-Avoiding Managers 394 Negotiation in Conflict Management 395
Stages of Negotiation 395 Distributive Negotiations Strategy 396 Integrative Negotiations Strategy 397 Common Influences on Negotiation Strategies 398
Change Competency: GM and UAW Negotiate for Mutual Survival 400 Across Culture Negotiations 402
Differences in Negotiators 402 Cross-Cultural Emotional Intelligence 403 Insights for Leaders 404
Across Cultures Competency: Business Negotiations in Germany and Italy 405 Chapter Summary 406 Key Terms and Concepts 406 Discussion Questions 407 Experiential Exercise and Case 407
Experiential Exercise: Self Competency—Conflict-Handling Styles 407 Case: Communication Competency—Conflict Style Case Incidents 409
Part 4: The Organization 411
Chapter 14 Managerial Decision Making 412 Learning from Experience: David Hoover, CEO of Ball Corporation 413 Decision-Making Conditions 415
Certainty 415 Risk 416 Uncertainty 417
Change Competency: Shoes For Crews Reduces Risk and Uncertainty 418 Bounded Rationality 419
Satisficing 419 Limited Search 420 Inadequate Information and Control 421 Insights for Leaders 422 Knowledge Management 423
Change Competency: St. Clair Hospital Adopts RFID and Related Technologies 424 Evidence-Based Management 425
Diagnostic Questions 425 Role of Wisdom 426 Insights for Leaders 426
Diversity Competency: Chubb’s Business Case for Diversity 427 Political Decision Making 428
Divergence in Problem Definition 429 Divergence in Goals 429 Divergence in Solutions 430 Insights for Leaders 430
xvi Contents
Creative Decision Making 431 Creative Stages 432 De Bono’s Lateral Thinking 433 Osborn’s Creativity Process 434
Teams Competency: IDEO Brainstorms 436 Electronic Brainstorming 437 Insights for Leaders 438
Chapter Summary 438 Key Terms and Concepts 439 Discussion Questions 439 Experiential Exercise and Case 440
Experiential Exercise: Self Competency—Personal Creativity Inventory 440 Case: Self Competency—A Manager’s Dilemma: Who Gets the Project? 441
Chapter 15 Organization Design 444 Learning from Experience: Lowe’s Companies, Inc. 445 Key Factors in Organization Design 446
Environmental Factors 447 Strategic Factors 449
Change Competency: KFC in China 452 Fundamentals of Organizing 453
Differentiation 453 Integration 454
Vertical Organizational Design 456 Hierarchy 456 Span of Control 457 Authority, Responsibility, and Accountability 457
Ethics Competency: Enron 458 Delegation 459 Centralization and Decentralization 460
Across Cultures Competency: Eureka 462 Horizontal Organizational Design 463
Functional Design 463 Product Design 464 Geographical Design 466 Network Design 467
Communication Competency: DreamWorks Animation SKG 469 Chapter Summary 471 Key Terms and Concepts 471 Discussion Questions 472 Experiential Exercise and Case 472
Experiential Exercise: Communication Competency—Analyzing Your Organization’s Design 472
Case: Change Competency—FedEx Office and Print Services, Inc. 474
Chapter 16 Cultivating Organizational Culture 476 Learning from Experience: Zappos 477 Dynamics of Organizational Culture 478
Forming a Culture 481 Across Cultures Competency: Ricardo Semler, CEO of Brazil’s Semco
Manufacturing 483 Sustaining a Culture: Insights for Leaders 484 Changing a Culture 487
Change Competency: Harley-Davidson’s Culture 488
Contents xvii
Types of Organizational Culture 489 Bureaucratic Culture 490 Clan Culture 491 Entrepreneurial Culture 492
Communications Competency: Texas Nameplate Company 492 Market Culture 493 Culture–Performance Relationships 493 Insights for Leaders 494
Ethical Behavior and Organizational Culture 494 Impact of Culture 494
Whistle-Blowing 495 Ethics Competency: What Would You Do? 496
Insights for Leaders 496 Fostering Cultural Diversity 497
Challenges 497 Insights for Leaders 498
Socialization of New Employees 499 Organizational Socialization Process 499 Insights for Leaders 502
Chapter Summary 503 Key Terms and Concepts 503 Discussion Questions 504 Experiential Exercise and Case 504
Experiential Exercise: Self Competency—Assessing the Culture of Your Organization 504 Case: Self Competency—Wegmans 506
Chapter 17 Managing Organizational Change 508 Learning from Experience: José Sergio Gabrielli de Azevedo of Petrobras 509 Pressures for Change 510
Why Change? 510 Globalization 511 Technology 512 Social Networks 513 Generational Differences 514
Diversity Competency: Managing across Generations 515 Planned Organizational Change 515
Economic Approach 516 Organizational Development Approach 516 Effective Change Programs 517 Insights for Leaders 518
Resistance to Change 519 Individual Resistance 519
Self Competency: Are You Ready to Change? 522 Reducing Resistance through Engagement 523 Reducing Organizational Resistance 523 Force Field Analysis 525
Change Competency: Target 527 Organizational Diagnosis 528
Information Needed 528 Capacity for Change 528
Change Methods 530 Interpersonal Methods 530 Team Methods 533 Organizational Methods 535
Communication Competency: United Technologies’ Diversity Programs 536
xviii Contents
Chapter Summary 537 Key Terms and Concepts 538 Discussion Questions 538 Experiential Exercise and Case 538
Experiential Exercise: Self Competency—Assessing an Organization’s Readiness for Change 538
Case: Communication Competency—Carolyn Bivens: Change Agent at the Ladies Professional Golf Association 539
Part 5: Integrating Cases 541
Case 1 A Day in the Life of Yolanda Valdez 542 Case 2 Alan Mulally, CEO, Ford Motor Company 543 Case 3 Conflict Resolution at General Hospital 545 Case 4 Bob Knowlton 547 Case 5 BMW’s Dream Factory and Culture 550 Case 6 ROWE Program at Best Buy 553 Case 7 Whole Foods Market 555 Case 8 The Road to Hell 559 Case 9 How Personal Can Ethics Get? 562
Appendix: BizFlix A-1
Chapter 1: In Good Company A-1 Chapter 2: The Emperor’s Club A-1 Chapter 3: Because I Said So A-1 Chapter 4: The Breakfast Club A-1 Chapter 5: Take the Lead A-2 Chapter 6: Friday Night Lights (I) A-2 Chapter 7: Gracie A-2 Chapter 8: The Upside of Anger A-3 Chapter 9: Friday Night Lights (II) A-3 Chapter 10: Doomsday A-3 Chapter 11: Hot Fuzz A-4 Chapter 12: Friends with Money A-4 Chapter 13: Welcome Home Roscoe Jenkins A-4 Chapter 14: Failure to Launch A-5 Chapter 15: Rendition A-5 Chapter 16: Charlie Wilson’s War A-5 Chapter 17: Field of Dreams A-6
References R-1
Subject and Organizational Index I-1
Author Index I-19
As we started to write the 13th edition of this book, many of our friends asked us why we were revising it. Our answer was that we believe we have the desire and the ability to help students learn about important issues that they will face as leaders. After all, we have been writing, teaching, and consulting as a team for a combined total of more than 80 years. When we published the first edition of this book in 1976, a number of the topics, concepts, and models presented in this edition were not covered. Of course, leaders continue to face many of the same challenges they faced during the mid-1970s, such as attracting, retaining, and motivating employees; forming and leading high- performance teams; managing conflicts; and changing their organizations’ processes to be more effective. However, the complexity of leading people has changed. With the development of the Internet, Twitter, Facebook, and a host of other communication vehicles, issues facing employees and leaders are instantly broadcast around the globe. At times, the decisions of leaders may impact millions of employees. Just recently, we have witnessed the failure of General Motors and Chrysler being sold to an Italian automobile company (Fiat); major changes in the U.S. banking system; the expanded “reach” of the U.S. government into the management of private firms; leaders of major institutions, such as Bernie Madoff and Allen Stanford, being convicted of ethical vio- lations; the rise of developing nations, especially India and China, as major players in almost every industry; and the global recession. This edition presents how employees and leaders from around the globe have sought to respond to these pressing issues.
Snapshot of What’s New As employees and leaders conduct business around the world, they face many ethical challenges. New to this edition is Chapter 2, “Individual and Organizational Ethics.” This chapter highlights ethical concepts and concerns that are relevant to all employ- ees and leaders. Some of the major concerns that we believe need to be addressed by employees and leaders include workforce diversity, stakeholder responsibility, out- sourcing, and ethical values. The ethical competency is so important that we present 9 NEW ethical competency features. They appear in various chapters throughout the book. These features enable the reader to consider a variety of ethical situations and how they were addressed. In addition, ethics-based exercises and cases at the end of each chapter require the reader to make decisions and choose a course of action. In addition to this NEW chapter, we have completely revised major portions of each chapter, especially the leadership, decision making, and organization design chapters.
If the 13th edition is a major revision that reflects the challenges facing today’s and tomorrow’s leaders, what’s new?
First, all • Learning from Experience features are new. A wide variety of organizations are represented in these chapter-opening features, including Xerox, PepsiCo, Costco, Lowe’s, and Petrobras. Each chapter-opening feature introduces you to the major themes developed in the chapter and illustrates some of the challenges facing employees and leaders. Second, the Competency features, four per chapter, are virtually all new. These • give you an opportunity to quickly read about an issue and then use the materials in the chapter to gain a new perspective on the issue. Third, at the end of select chapters, we have included • NEW Experiential Exercises. We have retained some exercises that you thought were effective and developed others that are new to this edition.
Preface
xx Preface
Fourth, • 13 NEW and 4 revised cases appear at the end of the chapters. These cases serve to reinforce the major concepts developed within the chapter and are based on real incidents from a variety of organizations. Each case serves to reinforce the major concepts developed within the chapter and are based on actual organizations. Fifth, we have added • 14 NEW and retained 3 BizFlix videos that we have found to enrich student learning. These short videos provide keen insights into real-life challenges facing employees and leaders. Sixth, we have updated and added new Integrating Cases for those instructors • who wish to have complex cases that span a chapter’s content. A total of 9 inte- grated cases are included for those instructors who wish to use more comprehen- sive cases that span the content found in several chapters. Seventh, we have added new PowerPoints• ® to reflect our new content. All PowerPoints have been redesigned based on the recommendations of our users. Eighth, Susan Leshnower has completely updated the Instructor’s Manual to • accompany the text. This valuable resource will help new and practiced profes- sors, providing text notes, enrichment modules, and more. Lastly, John Hite and Scott Tarcy have developed and tested almost 4,000 true/• false, multiple-choice, short answer, and essay questions for this edition.
Snapshot of What Stayed the Same First, as in all previous editions, we have pursued the goal of presenting core concepts and foundation principles that are fundamental to individual and organizational effectiveness. These are highlighted through the use of contemporary examples, issues, and leadership practices. Second, to actively engage the readers in the learning process and assist them in developing their individual and management competencies, we have included more than 30 self-assessment instruments for them to complete. We have found that these instruments enrich the students’ learning experience and expose them to competencies that they need to develop to become effective employees and successful leaders. Third, our approach has also been to develop and integrate a few major concepts well rather than to expose students to a “laundry list” of concepts without any real-world takeaway. Therefore, we continue to use real-life examples from a variety of organizations to sup- port student learning. Finally, the Instructor’s Manual has been a continuing source of strength for many faculty members. We have retained its author, and she has added new enrichment modules to help faculty members explain each chapter’s content to students.
The Learning Process Our road map to the learning process starts in Chapter 1. In this chapter, we discuss differences between leaders and managers, introduce you to the learning framework for the entire book and illustrate the key attributes of the seven key competencies that are woven into the text. Based on research and our own experience, we present seven competencies that we believe all employees and leaders need to master.
Key Competencies
Ethics Competency
This includes the knowledge, skills, and abilities to incorporate values and principles that distinguish right from wrong when making decisions and choosing behaviors.
Preface xxi
Self Competency
This includes the knowledge, skills, and abilities to assess personal strengths and weaknesses, set and pur- sue professional and personal goals, balance work and personal life, and engage in new learning.
Diversity Competency
This includes the knowledge, skills, and abilities to value unique individual, group, and organizational character- istics, embrace such characteristics as potential sources of strength, and appreciate the uniqueness of each.
Across Cultures Competency
This includes the knowledge, skills, and abilities to recognize and embrace similarities and differences among nations and cultures.
Communication Competency
This includes the knowledge, skills, and abilities to use all modes of transmitting, understanding, and receiving ideas, thoughts, and feelings—verbal, listening, nonver- bal, and written—for accurately transferring and exchanging information.
Teams Competency
This includes the knowledge, skills, and abilities to develop, support, and lead groups to achieve goals.
Change Competency
This includes the knowledge, skills, and abilities to recognize and implement needed adaptations or entirely new transformations in people, tasks, strategies, structures, or technologies.
Individual Learning Throughout the book, students are provided with rich oppor- tunities to become actively involved in their own learning. These opportunities include self-assessment instruments, experiential exercises, case studies, BizFlix, and discussion questions. Self-assessment instruments are found in all chapters and often provide students with benchmarks against which they can gauge their competencies in relation to other students and practicing leaders.
Learning from Experience Feature This feature introduces the reader to the major themes developed within each chapter. To do so, we often use leaders and organizations that most students are familiar with, such as Indra Nooyi of PepsiCo, Jim Sinegal of Costco, Steve Jobs of Apple, and Anne
Self
Change Diversity
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Teams Across
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Communication
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Indra Nooyi became the CEO of PepsiCo in 2006
and was elected to the additional role of chair-
man of the board in 2007. PepsiCo has 185,000
employees. It manufactures, markets, and sells
hundreds of different snacks and beverages
worldwide. This opening feature provides a few
insights about Indra Nooyi in her own words.
My father was an absolutely wonderful human
being. From him I learned to always assume
positive intent. Whatever anybody says or does,
assume positive intent. You will be amazed at
how your whole approach to a person or prob-
lem becomes very different. When you assume
negative intent, you’re angry. If you take away
that anger and assume positive intent, you will
be amazed. Your emotional quotient goes up
because you are no longer almost random in
your response. You don’t get defensive. You
don’t scream. You are trying to understand and
listen because at your basic core you are saying,
“Maybe they are saying something to me that
I’m not hearing.” So “assume positive intent” has
been a huge piece of advice for me.
In business, sometimes in the heat of the
moment, people say things. You can either
misconstrue what they’re saying and assume
they are trying to put you down, or you can say,
“Wait a minute. Let me really get behind what
they are saying to understand whether they’re
reacting because they’re hurt, upset, confused,
or they don’t understand what it is I’ve asked
them to do.” If you react from a negative
perspective—because you didn’t like the way
they reacted—then it just becomes two nega-
tives fighting each other. But when you assume
positive intent, I think often what happens is the
other person says, “Hey, wait a minute, maybe
I’m wrong in reacting the way I do because this
person is really making an effort.”
Since becoming chairman and CEO, I’ve seen
that one of the ways to inspire people is by having
a vision that everyone can get behind. At PepsiCo,
that vision is “Performance with Purpose.” It’s our
company’s long-term strategy for delivering strong
financial results while responding to the changing
demands of our consumers and the marketplace.
Performance with Purpose rests on three pil-
lars: human sustainability, environmental sustain-
ability, and talent sustainability. For example,
we’re transforming our product portfolio in order
to offer consumers healthier choices—everything
from nourishing beverages and snacks that are
good for you, to healthier, fun-for-you treats. This
is human sustainability. We’re also driving initia-
tives to sustain the environment where we and
our consumers live and work. And we’re commit-
ted to attracting, training, and retaining the best
talent because the ability of PepsiCo to meet
our performance goals and deliver our purpose
agenda rests in the hands of our 185,000 associ-
ates around the globe. 1
Indra Nooyi, Chairman and CEO, PepsiCo
Learning from Experience
To learn more about PepsiCo, go to www.pepsico.com.
N E
V IL
LE E
LD E
R /C
O R
B IS
www.pepsico.com
xxii Preface
Mulcahy of Xerox. Fifteen of these features are NEW to this edition. We wrote these features to illustrate effective or ineffective use of one or more of our seven compe- tencies. Within the chapter, there are flashbacks to how the Learning from Experience feature illustrates particular concepts or practices.
Insight Feature Each chapter has two Insight features that are related to one of our seven com- petencies. This feature emphasizes a leader’s thinking about an issue. These are brief and are intended to highlight a particular theme in the text. Some of the Diversity Insights are from Ronald Parker of PepsiCo, Magda Yrizarry of Verizon Communications, and David George of United Technologies. Other leaders included in different Insight features include Jim Sinegal of Costco, Martin Coles of Starbucks, Stacy Guinn of Sherwin-Williams, Patricia Woertz of Archer Daniels Midland, and Olli-Pekka Kallasvuo of Nokia.
Competency Features Following a tradition we started several editions ago, there are 4 competency features in each chapter. These features aid student learning by reinforcing each chapter’s content and challenge the student to consider it in relation to a model, concept, or practice presented in that section of the chapter. These reflect real-world challenges or issues that have faced employees and leaders. We have 68 competency features that help students develop their own competencies. Eighty percent are NEW to this edition. Those that have been retained have been updated and revised. Let’s briefly highlight some of the organizations and/or leaders that are included in this feature.
Ethics Insight
Senior leaders typically emphasize the importance of performance and the bottom line. But if they don’t also emphasize ethical behavioral messages, then all employees hear is that it’s all about the numbers. Get the numbers at all costs, they think—and that causes some to compromise ethics. Ronald James, President and CEO, Center for Ethical Business Cultures
Nooyi learned early on to embrace diversity rather than hide her differences in the corporate world. Long fascinated by the opportunities and
culture of America, after working for a time in India, she headed to the United States. Coming out of Yale in 1980 with a master’s in public and
Self competency
Indra Nooyi’s Development Journey
J. Frank Brown, dean of INSEAD, a leading business school in France, comments: “Increased globalization is changing the land- scape of the business climate and creating a
demand for business leaders who can operate in and across different cultures. Carlos Ghosn personifies the essence of a transcultural leader by recognizing that cultural diversity is an
Across Cultures competency
Carlos Ghosn, CEO, Nissan-Renault
In retail, you’ve got to have a strong point of view and present it effectively. But to lead effec- tively and achieve real business results as the head of any enterprise, you have to listen. You’ve
t t t tl k ti d k t
Whenever I’m in a Chanel boutique, I ask the store employees what’s selling, how con- sumers are responding, and what we should be doing differently. Their observations help me
fi th ht b t th b i
Communication competency
Maureen Chiquet, Global CEO, Chanel S.A.
My thought process around leadership used to be that I would make decisions, everyone would come in, I would give them the charter for the day, and they would all run off. Now, I i th t it’ t b t it’ b t
move forward without you there. When you have teams capable of making decisions, there are a lot of things you can let go. When I took over Mars Drinks, we were meeting globally, as a man-
t t th P l fl i
Teams competency
Grant Reid, President, Mars Drinks
Since becoming CEO, Nooyi has reorganized PepsiCo to make it less focused on just the United States and broadened the top leadership team. She has hired an Italian native, Massimo d’A t l d th di i i th t i l d
Name me one other company that took out trans fats from all its products without increasing the price of its products—four or five years before anyone else. We’re doing everything possible to hift tf li t ‘b tt f ’ ‘ d f
Change competency
Indra Nooyi Leads Change at PepsiCo
Preface xxiii
Ethics Competency
Of the 10 features, 9 are NEW to this edition and include organizations such as Johnson & Johnson, Mattel, The Gap, CitiMortgage, and Enron.
Self Competency
Of the 11 features, 7 are NEW to this edition and include leaders such as John Schnatter of Papa John’s Pizza, Indra Nooyi of PepsiCo, Colin Powell, and Chesley Sullenberger (Sully) of US Airways.
Diversity Competency
Of the 8 features, 6 are NEW to this edition and include insights from Aetna, Deloitte & Touche, Lockheed Martin, WellPoint, and Chubb.
Across Cultures Competency
Of the 11 features, 9 are NEW to this edition and include examples of leaders and organi- zations such as Carlos Ghosn of Nissan-Renault, Tahir Ayub of PricewaterhouseCoopers, Hewlett-Packard, Alcoa, and Ricardo Semler of Brazil-based Semco.
Communication Competency
All 9 features are NEW to this edition. Included are leaders from Chanel, Intuit, Chroma Technology, DreamWorks, United Technologies, and Texas Nameplate.
Teams Competency
Of these 8 competency features, 4 are NEW to this edition. Teams from Mars, Starbucks, SEI Investments, Jeff Gordon’s Rainbow Warriors, Gore & Associates, and IBM are highlighted.
Change Competency
Eleven of the 13 competency features are NEW to this edition. Leaders and teams discussed range from PepsiCo to Boeing to Yahoo and Harley-Davidson.
Key Terms and Concepts Key terms and concepts appear in blue and definitions imme- diately follow in italics. A list of all terms introduced in the chapter is given at the end of each chapter, along with the page on which it is defined.
