Expanded TOC

Management Textbook

Gulati, Mayo, Nohria

 

Table of Contents

 

Introduction

Introduction: What is Management?

This chapter presents an overview of the conceptual framing of the textbook which is organized around three main perspectives – strategy, organizational design and structure, and individual leadership – and the interaction between them. The book opens with an overview of management including the ability to manage oneself, manage others, and manage a strategic and competitive enterprise. The chapter also provides a brief overview of the various perspectives on the purpose of business and closes with an analysis of the stakeholder approach to management.

Introduction

Management and Leadership

Changing Perspectives of Management

Stakeholder Approach

  • Stakeholder Mapping
  • Stakeholder Processes
  • Managing Uncertainty

 

 

Part I – Strategic Perspective

2 The Business Environment

This chapter explores the external and internal stakeholders that comprise the business environment. The external environment is divided into the general environment, which includes the technological, economic, political, legal, socio-cultural, and global dimensions, and the task environment, which includes competitors, suppliers, and customers. The internal environment is made up of owners (shareholders), the board of directors, employees, and culture. The chapter provides details about each of these stakeholders and also includes a brief overview of recent trends in the business landscape, including corporate social responsibility and globalization.

Introduction

External Environment

  • General Environment
  • Task Environment

Internal Environment

  • Owners
  • Board of Directors
  • Employees
  • Culture

Recent Trends in the Business Environment

  • Corporate Social Responsibility
  • Globalization

 

3 Introduction to Strategy

Strategy is the driving force behind business decisions, and this chapter presents an overview of how managers can identify and implement a strategy to gain a competitive advantage in an industry. Introducing topics like vision, mission, and objectives, this chapter will help students understand the overall purpose of business and the process of translating ideas into products and services by making trade-offs, choosing a set of activities, and creating a fit among those activities. The chapter also introduces the difference between corporate-level strategy and business-level strategy to set up the following chapters.

A Brief History of Strategy

Strategy and the Organization: A Framework

  • The Purpose of Business
  • Analyzing the Internal and External Environment
  • Vision, Mission, and Objectives
  • Strategy Formulation
  • Strategy Implementation

Defining Strategy: A Business Perspective

  • Choosing a Set of Activities
  • Making Trade-Offs
  • Creating Fit Among Activities
  • Elements of a Strategy Statement

Business-Level versus Corporate-Level Strategy

  • Business-Level Strategy
  • Corporate-Level Strategy

Overview of Industry Profitability

  • Airline Industry
  • Pharmaceutical Industry

Strategic Leaders

 

 

4 Business-Level Strategy

Business-level strategy is the way a company decides to position itself against its competitors in an industry to gain a competitive advantage. With the goal of providing customer value, strategies such as cost leadership, differentiation, and focus are discussed. From there, the chapter identifies how the external and internal environment (described in Chapter 2) can impact industry attractiveness and a firm’s strategy. These topics include Porter’s five forces and the resource-based view of the firm. The chapter wraps up by describing the firm as a value chain and how to analyze the structure, strengths, and weaknesses of a firm to deliver value.

Introduction

Competitive Advantage

Types of Generic Strategies

  • Cost Leadership
  • Differentiation
  • Focus
  • Stuck in the Middle
  • Employees in Generic Strategies

How the External Environment Impacts Industry Attractiveness

  • Porter’s 5-Forces Model
  • Threat of New Entrants
  • Bargaining Power of Suppliers
  • Threat of Substitutes
  • Bargaining Power of Customers
  • Rivalry Among Competitors
  • Limits of the 5-Forces Model

How a Firm’s Internal Environment Impacts Strategy

  • Resource-Based View of the Firm
  • Company Resources

The Firm as a Value Chain

  • Sustainable Competencies
  • Primary and Support Activities
  • Value Systems
  • SWOT Analysis

 

5 Corporate-Level Strategy

Corporate-level strategy is the set of strategic choices a company makes while managing operations across multiple industries to build a corporate advantage. This chapter presents the cornerstone of corporate-level strategy, diversification, by describing the factors managers must consider when pursuing it. It then discusses the costs, benefits, and rationale behind vertical integration and introduces the recent trends of outsourcing and offshoring, ending with a discussion on international diversification.

Introduction

Diversification Strategy

  • General Reasons for Diversification Strategies
  • History of Diversification
  • Private Equity
  • Types of Diversification Strategies
  • The Diversification Test
  • Related Diversification
  • Unrelated Diversification
  • Results of Diversification

Vertical Integration

  • Types of Vertical Integration
  • Vertical Integration Test
  • Costs Associated with Vertical Integration
  • Alternatives to Vertical Integration
  • The Outsourcing Trend

International Diversification

  • Motives for International Diversification
  • International Strategic Options
  • International Scope Test

 

6 Competitive Dynamics

The previous three chapters presented topics on strategy, and this chapter is the culmination of those topics by highlighting the dynamic nature of strategic decisions. Because the competitive landscape is dynamic, industry leaders must constantly stay abreast of the actions of their competitors. To illustrate these dynamics, this chapter presents an overview of competitive actions and responses and describes the difference between being a first and second mover. The chapter also presents a tool for managers to evaluate a firm’s actions and resources relative to competitors and briefly discusses game theory.

Introduction

Competitive Dynamics

  • Competitive Action
  • Competitive Response
  • Response Positions

Action-Based Model of Competitive Advantage

  • Relative Resource Position
  • Competitive Actions in the Model

Game Theory and Competitive Dynamics

  • The Value Net
  • Game Theory and Its Components

Avoiding Competition

  • New Market Spaces vs. Existing Market Spaces

 

7 Globalization

Starting with a history of globalization, this chapter describes many of the concepts on strategy in the context of globalized businesses. The global business environment is defined in terms of economic, political/legal, and socio-cultural dimensions. Because these dimensions vary tremendously across regions, managers must understand this variance to compete more effectively. The chapter then presents the major models of international strategy including multinational, global, international, and transnational. The chapter ends with a description of the methods a company can expand internationally including exporting, licensing/franchising, joint ventures, or acquisitions.

Introduction

Globalization

  • GATT and the WTO
  • The European Union
  • NAFTA

Understanding the Global Business Environment

  • Economic Dimension
  • Political/Legal Dimension
  • Socio-Cultural Dimension

Strategies for Going Global

  • Multinational Strategy
  • Global Strategy
  • International Strategy
  • Transnational Strategy

Market Entry Strategies

  • Exporting
  • Licensing and Franchising
  • Joint Ventures and Alliances
  • Wholly-Owned Subsidiaries
  • General Rules for Market Entry

Recent Trends in Global Business

  • Outsourcing and Offshoring

 

Part II – Organizational Perspective

8 The Organizational Context

This chapter marks the transition from the strategic perspective to the organizational perspective by presenting an overview of the relationship between strategy and structure. While strategy can drive the direction of a firm, structure drives the execution of strategy. This chapter helps students develop a broad understanding of an organization by discussing the bureaucratic or clan approach; centralization vs. decentralization; and numerous options to design an organization such as division of labor, coordinating mechanisms, decision rights, and informal structure. The chapter ends by describing the business life-cycle and recent trends like customer-centricity.

Introduction

The Importance of the Organization

From Strategy to Structure

  • Coordination and Control
  • Centralization and Decentralization
  • Support and Performance

Organizational Design Decisions

  • Division of Labor
  • Coordinating Mechanisms
  • Distribution of Decision Rights
  • Organizational Boundaries
  • Informal Structure
  • Political Structure
  • Legitimate Basis of Authority

Organizational Design and the Lifecycle of the Firm

  • The Role of Leadership
  • Organizational Flexibility

Recent Trends in Organization Design

  • From Reengineering to Customer-Centricity
  • Breaking Organizational Silos

 

9 Organizational Structure

Continuing with the organizational theme, this chapter presents the basic structures that organizations can take including the functional, divisional, matrix, and network forms. After providing these examples, the chapter describes different tensions that managers must balance when designing an organization’s structure. The tension between strategy and structure, accountability and adaptability, vertical and horizontal communication, and self-interest and firm success are included. Finally, this chapter provides a tool called the levers of organizational design that managers use to adapt an organization in response to changes in the competitive environment.

Introduction

Organization Structure – Basic Forms

  • Functional Form
  • Divisional Form
  • Matrix Form
  • Network Form

Designing the Organization

  • Strategy and Structure Tension
  • Accountability vs. Adaptability Tension
  • Vertical vs. Horizontal Tension
  • Self-Interest vs. Mission Success Tension

Levers of Organization Design

  • Unit Structure
  • Diagnostic Control Systems
  • Interactive Networks
  • Shared Responsibilities

 

10 Organizational Culture

Organizational culture provides the foundation and framework for how work is accomplished and what activities and practices are valued. While an organization’s structure can enable employees to pursue strategic objectives, it is the culture that can drive excellence in performance. This chapter breaks down culture to describe how artifacts, beliefs, and assumptions make up a culture, how culture develops and evolves through the influence of leaders and crucial situations, and how culture can affect performance.

Introduction

What is Culture?

Levels of Organizational Culture

  • Artifacts
  • Beliefs and Values
  • Assumptions

How Does Culture Develop?

  • Role of Founder
  • Role of Teams in Developing Culture
  • Cultural Socialization

How Does Culture Affect Performance?

How Do/Should Leaders Affect Culture?

Culture and Crucial Moments

  • Evaluating Culture in Mergers and Acquisitions
  • Strategic Change

 

11 Performance Management

This chapter is based on the age-old mantra; if you can’t measure it you can’t manage it. This chapter uses the control cycle (identify measures, set performance targets, measure and monitor, and take corrective action) to provide students with an understanding of how to translate business strategies into measurable figures and tangible activities in the context of an organization. The major topics include the balanced scorecard, benchmarking, budgets, management by objectives, total quality management, six sigma, ISO 9000, and various methods to improve or maintain performance.

Introduction

Identifying Measures

  • The Balanced Scorecard
  • Implementing the Balanced Scorecard

Setting Performance Targets

  • Benchmarking
  • Budgets
  • Management by Objectives

Monitoring and Measuring Performance

  • Total Quality Management
  • Six Sigma
  • ISO 9000

Taking Corrective Action

  • Aligning People
  • Validating the Strategy
  • Interactive Control Systems

 

12 Organizational Change

The previous chapters on strategy and organizations have emphasized the need for adaptability in the business environment, and that process relies on an organization’s ability to implement change. This chapter explores several aspects of change such as why change is necessary, including internal and external factors; the various approaches to initiating change, including planned, organic, reactive, proactive, incremental, and transformative approaches; how leaders can overcome the inevitable resistance to change; and how leaders can orchestrate the change process, which is based on creating dissatisfaction and developing a new model for the future. This chapter segues to the individual perspective, which begins with leadership.

Introduction

The Case for Change

  • Change Driven by the External Environment
  • Change Driven by the Internal Environment

Types of Organizational Change

  • Planned vs. Organic Change
  • Reactive vs. Proactive Change
  • Incremental vs. Transformative Change

The Change Process

  • Creating Dissatisfaction
  • Developing a New Model for the Future
  • The Implementation Process
  • Costs of and Resistance to Change

Combating Resistance to Change

  • Engaging Hearts and Minds
  • Characteristics of Change Leaders

 

Part III – Individual Perspective

13 Leadership in Organizations

As the introduction to the role of the individual leader in business, this chapter documents more than 50 years of leadership research. Topics addressed include research on traits, behaviors, charismatic leadership, transformational and transactional leadership, leader-member exchange theory, and situational leadership. Instead of presenting a chronological view, this chapter helps students understand leadership theories through a conceptual framework. Theories were grouped based on their focus: the leader, the interaction between leaders and followers, and the interaction between leaders and followers in the context of a situation.

Introduction

The Leader

  • Who is a Leader? – Traits and Skills
  • What Does a Leader Do? – Behaviors
  • The Charismatic Leader

The Leader and Followers

  • Transformational Leadership Theory
  • Transactional Leadership Theory
  • Leader-Member Exchange Theory

The Leader, Followers, and the Situation

  • Fiedler’s Contingency Model
  • Hersey and Blanchard’s Situational Theory
  • House’s Path-Goal Theory
  • Leadership Substitutes

Appendix A: Leadership in Your Life

 

14 Becoming a Leader: Knowing Yourself

One of the most important aspects to becoming a leader is having a good understanding of your strengths, weaknesses, and abilities. This chapter helps students understand the different types of intelligence; such as creativity, cultural intelligence, and emotional intelligence; and different types of personalities, such as the Myers Briggs personality types. In addition, the chapter provides insight into managing adversity and managing oneself.

Forms of Intelligence

  • Multiple Intelligences
  • Creativity
  • Triarchic Theory of Intelligence
  • Cultural Intelligence
  • Emotional Intelligence

Understanding Your Personality

  • Personality Assessment
  • Locus of Control
  • Managing Adversity

Self-Monitoring

  • Managing Oneself

Appendix A: Finding Your MBTI Type

 

15 Gaining Power and Influence

This chapter identifies power as the ability of an individual or group to influence the behavior, thinking, or attitudes of another individual or group; and influence as the means by which power is exercised. To illustrate the role of power in organizations, the chapter discusses the forms, sources, and challenges of different types of power. It also describes how power manifests itself through politics in an organization and how the power landscape may differ at the top of an organization compared to the middle or bottom. The chapter ends with a discussion of power in conflict situations and how to use influence to exercise power.

Introduction

Interpersonal Power

  • Forms of Interpersonal Power
  • Positional and Personal Power
  • Relational Power
  • Challenges of Interpersonal Power

Power and Politics in Organizations

  • Power at the Top
  • Power in the Middle
  • Power for Early Career Professionals
  • Reactions to Power

Power and Conflict

  • Interdependence
  • Resource Scarcity
  • Disagreement
  • High Importance

Using Influence

  • Organizational Considerations

 

16 Decision-Making

Decision making is commonly recognized as the heart of activity in every business, and this chapter highlights how actual decision making in organizations departs from the rational decision making model. To show this, the chapter discusses the natural limitations and biases people hold and the role of emotions, intuition, and social queues when individuals make decisions. The chapter builds on individual decision making to discuss organizational decision making, and it concludes by providing a tool for students to understand their biases and improve their own decision making skills.

Introduction

Rational Decision Making

How Managers Make Decisions

How Biases Impact Decision Making

  • Cognitive Heuristics
  • Framing

The Role of Emotions, Intuition and Social Situations on Decision Making

  • Emotional Commitment
  • Intuition
  • Social Influences

Decision Making in Organizations

  • Programmed vs. Non-Programmed Decisions
  • Models of Decision Making

Improving Decision Making Skills

  • Managing Your Biases

Preparing for Tough Calls

 

17 Conflict & Negotiation

Although unpleasant at times, conflict is a necessary and inevitable aspect of organizations, and this chapter helps students understand it and prepare for it. This chapter describes where conflict comes from, including affective and cognitive conflict; how it manifests itself in organizations, either between individuals or between groups; and how to manage it. This chapter segues from conflict to negotiation. Students are introduced to negotiation by learning about distributive and integrative negotiations and learning how to negotiate effectively. The chapter guides students through negotiating techniques such as preparing for a negotiation, identifying alternatives, avoiding common mistakes, and providing tips for cross-cultural negotiation.

Introduction

Levels of Conflict

  • Interpersonal Conflict
  • Intergroup Conflict

Sources of Conflict

  • Affective Conflict
  • Cognitive Conflict

Managing Conflict

  • Diagnosing the Disagreement
  • Resolving the Disagreement

Types of Negotiations

  • Distributive Negotiations
  • Integrative Negotiations

Effective Negotiations

  • Preparing to Negotiate
  • Reaching an Agreement
  • Avoiding Common Mistakes
  • Knowing When to End a Negotiation
  • Escalating Negotiation
Negotiating Across Cultures

 

18 Leading Teams

While teams are not always necessary in organizations, they can provide valuable advantages when they are used. This chapter describes several aspects of teams from their characteristics to how managers or team leaders can develop their teams to achieve superior performance. By defining a team and describing different types and their characteristics, this chapter helps students understand team dynamics. The chapter continues by describing team development, the team process, and the role of leaders within teams, helping students understand how to make teams effective. The chapter concludes with strategies for team leaders and advice on leading global or virtual teams.

Are you a Team Player?

What is a Team?

  • Teams vs. Individual Work Groups

Team Characteristics

  • Team Composition and Size
  • Manager-led vs. Self-directed Teams
  • Team Member Roles
  • Team Resources and Reward Systems
  • Leveraging Diversity

Types of Teams

  • Geographically Distributed Teams
  • Project Teams

Team Development

  • Stages of Development
  • Team Norms
  • Promoting Team Learning

Team Process

  • Purposeful and Rigorous Decision-Making
  • Effective Participation and Meaningful Influence
  • Constructive Conflict
  • Assignment Structure

Team Effectiveness

  • Role of Team Leader

Leading the Team

  • Strategies for Team Leaders
  • Leading Geographically Distributed or Virtual Teams

 

19 Motivation

Regardless of whether motivation is intrinsic or extrinsic, it helps an organization do things better, faster, and cheaper. Through this chapter, students learn about the numerous theories on motivation including content theories of motivation (hierarchy of needs, ERG theory, two-factor theory, acquired needs theory, and four-drive theory) and process theories of motivation (goal-setting, expectancy, and equity theory). In addition to describing different types of motivation, this chapter illustrates tools that managers can use to reinforce positive behavior and reduce negative behavior. To help students understand these concepts in context, the chapter concludes with a discussion on generational differences with respect to motivation.

Introduction

Content Theories of Motivation

  • Hierarchy of Needs
  • ERG Theory
  • Two-Factor Theory
  • Acquired Needs Theory
  • Four-Drive Theory

Process Theories of Motivation

  • Goal-Setting Theory
  • Expectancy Theory
  • Equity Theory

Reinforcing Motivation

  • Work Design
  • Engagement and Empowerment
  • Reinforcing Strengths

Generational Differences and Similarities

  • Flexible Work Options

 

20 Communication

If decision making is the heart of organizational activity, then communication is the blood. In this chapter, various facets of communication style are explored including different approaches from the individual and organizational perspective. Within interpersonal communication, this chapter describes verbal and nonverbal communication, communication styles, gender differences, the perceptions of communication, and using storytelling to persuade others. The rest of the chapter discusses organizational communication, including media, channels, and networks, and provides tips for cross-cultural communication.

Introduction

Interpersonal Communication

  • Verbal and Nonverbal Communication
  • Communication Styles
  • Gender Differences in Communication
  • Communication Perceptions

Using Communication to Persuade

  • Storytelling

Organizational Communication

  • Communication Media
  • Communication Channels
  • Communication Networks
  • Communication Breakdowns
Cross-Cultural Communication

 

21 Networking

This chapter is built on the value that social capital brings to individuals both inside and outside their organization. The ability to build social capital has always been important, and it is becoming more important as companies become global. The chapter begins by describing different aspects of interpersonal networks, including different types, breadth, and strength of ties between individuals. This section includes research about the importance of weak ties to connect clusters of strong ties. From there, the chapter helps students learn to build successful networks by managing both internal and external relationships.

Introduction

Interpersonal Networks

  • Types of Interpersonal Networks
  • Breadth
  • Strength of Ties

Building Useful Networks

  • Building Internal Networks
  • Building External Networks

 

22 Ethics and Corporate Social Responsibility

This chapter takes students from the individual perspective back to the strategic perspective to illustrate the interdependence that each of these sections have on each other. It begins by discussing the ethical frameworks in business and common ethical dilemmas that individuals face in an organization. From there, it transitions to discuss the application of ethics to an organization through corporate social responsibility. In this section, students learn about the role organizations play in society and that organizations have economic, legal, and ethical responsibilities to uphold.

Introduction

Ethics Frameworks

  • Utilitarianism
  • Kantianism (Moral Obligations) and Moral Rights
  • Character and Virtues
  • Justice

Moral Dilemmas

  • Internal Relationships
  • External Relationships
  • Whistle-Blowing

Corporate Social Responsibility

  • Economic, Legal, and Ethical Responsibilities
  • Corporate Social Responsiveness

Is CSR good for business?

  • CSR and Financial Performance

CSR and Strategy: Using CSR for a Competitive Advantage