CHAPTER 1

A STRATEGIC APPROACH TO ORGANIZATIONAL BEHAVIOR

Knowledge Objectives
After studying this chapter, the learner should be able to: 1. 2. !. ". Define organizational behavior and explain the strategic approach to OB. Provide a for al definition of organization. Describe the nature of hu an capital. Discuss the conditions under #hich hu an capital is a source of co petitive advantage for an organi$ation. %. &xplain the five characteristics of high'involve ent anage ent and the i portance of this approach to anage ent.

Teaching Point on Knowledge Objectives

(each being strategic. (his #hich they are a eans learners #ill discover ho# to beco e i portant or even essential in relation to the strategy of any organi$ation )including your course* in e ber. +tress that each learner is creating OB ,no#ledge to be a students. initial anage ent, valued source of hu an capital. (hese five ,no#ledge ob-ectives infor your syste engaging its learning resources. /nli,e a course in strategic

outloo, on #hy it is going to be #ell #orth investing ti e and attention to this text and usually ta,en at the end of a progra of study, strategic organi$ational behavior is

happening in their lives right no#. Being strategic is a higher standard of learning practice they can see developing in the selves, as they use the resources of the boo, and your instruction. 0igh'involve ent 1our authors have ta,en a fir the anaged organi$ations place the highest pre iu anage ent is #hat your for success upon people interacting and perfor ing #ith a ,een sense of shared purpose. stand. 0igh'involve ent learners need to recogni$e as their opportunity to lead and be led ethically and #ell. 0elp use OB concepts to discern in any organi$ational setting the degree to #hich people atter to those #ith highest responsibility for running the business. (his guide is 1 actually

#ritten OB teacher to OB teacher to encourage high-involvement teaching. (he suggestions are grounded in the active learning principle that learners #ill create their o#n OB ,no#ledge #ith this fine aterial, if they constantly, directly experience its aterial and by your contributions, eaning of being valued as a i portance to their success in your course and beyond. 2ot only #ill they discover, #ith this instructional that successful co panies today are led by people #ho fir ly believe that valuing hu an capital is crucial for business, they #ill ,no# first hand the source of learning to the class.

Honing a Strategic OB Prospect

Chapter One: A Strategic Approach to Organizational Behavior
To hone is to sharpen; to make more intense or effective; or, to direct one's attention. Prospect is that which can be seen, something expected; a possibilit . Teach so that learners will direct their own attention to see and care about the strategic possibilities of even the ever da actions of individuals and groups in an organizational context. (his opening chapter presents an intriguing proposition for engaging learners in this #ay of thin,ing #ith OB concepts. 3t is that strategic leadership is not a function of level in the organi$ation, eaning it is not reserved for those at the top #hich #ould be the atter of focus and behavior.6 conventional vie#. On page 4, the authors #rite, 53t is a grounded in OB principles to

(hey go on to say that strategic leaders thin, and act strategically. (hey use s,ills otivate people and build trusting relationships. &ach helps 7&O to front line #or,er. 0ere is a anage ent proposition. Start o!r to i ple ent the organi$ation.s strategy, fro teaching extension of this high'involve ent

learners on this strategic thin"ing path now. (he transition #ill be fro : strategic learner to strategic leader in your class8 to strategic leader as an associate #here they #or,8 to strategic leader as anager and on up the levels. &ach of these chapters presents any strong OB textboo,s. An these pages for ade by crafting lessons fro an OB sub-ect recogni$able in the table of contents in i portant difference, ho#ever, can be honing a learner.s strategic OB prospect.

Ke Ter#s
organizational behavior (he actions of individuals and groups in an organi$ational context. #anaging organizational behavior Actions focused on ac9uiring, developing, and applying the ,no#ledge and s,ills of people. strategic approach to OB An approach that involves organi$ing and anaging the people.s ,no#ledge and s,ills effectively to i ple ent the organi$ation.s strategy and gain a co petitive advantage. associates (he #or,ers #ho carry out the basic tas,s. organization A collection of individuals for ing a coordinated syste of speciali$ed activities for the purpose of achieving certain goals over so e extended period of ti e. h!#an capital (he su an organi$ation. of the s,ills, ,no#ledge, and general attributes of the people in

co#petitive advantage An advantage en-oyed by an organi$ation that can perfor so e aspect of its #or, better than co petitors or in a #ay that co petitors cannot duplicate such that it offers products that are ore valuable to custo ers. h!#an capital val!e (he extent to #hich individuals are capable of producing #or, that supports an organi$ation.s strategy for co peting in the ar,etplace. h!#an capital rareness (he extent to #hich the s,ills and talents of an organi$ation.s people are uni9ue in the industry. h!#an capital i#itabilit (he extent to #hich the s,ills and talents of an organi$ation.s people can be copied by other organi$ations. high$involve#ent #anage#ent An approach that involves carefully selecting and training associates and giving the significant decision' a,ing po#er, infor ation, and incentive co pensation.

Teaching Point on Ke Ter#s

+tart learners thin,ing of these ,ey ter s as lenses. (he strategic OB lens in this and each chapter furnishes the vie# of the #hole organi$ation fro into focus. Assu ing ost of your learners are not yet !:,::: feet. ;ithin these are the lenses #hich bring ever'closer aspects of a living hu an business organi$ation anagers, they are no# or soon

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#ill be, associates. (hey are #or,ing at 5sea level6 inside the operations that deliver the strategic outco es as pro ised in the ission of the organi$ation that e ploys the . 0ere, #here contact #ith custo ers and production is greatest is the line of sight #here students can better see #ith concepts in this chapter, and the other thirteen, ho# things are really #or,ing. OB lenses give the uch closer loo,s at ho# people are anaging their organi$ational behavior at sea level. (hey can thin, of it as 5see level,6 using these OB lenses to better see #hat is going on around the , reflecting upon practice to create their o#n ne# insights. <or exa ple, the si ple ter enterprise, associate is used throughout this boo, instead of e ployee. An associate is a person united #ith another or others in an ore a partner or colleague than a subordinate. =oo,ing through this lens of anagers as a true ore about eaning, learners can pause and consider ho# being thought of by #hat high'involve ent anage ent

associate, rather than -ust so eone providing labor at a cost, infor s the

eans to a #or,force. Acting upon the ,no#ledge

they create in practice, infor ed by theory, learners #ill use this course to prepare to beco e high'involve ent anagers and associates.

%&P%'(%)C()* ST'AT%*(C O'*A)(+AT(O)A, B%HA-(O' Tro!bleso#e .anagers /pages 0$12

S!ggested 3isc!ssion 4!estions 1. ;hy do strongly intelligent, technically superior, and able individual contributors li,e 7harles, >ichael, and +usan see unable to use these sa e ental assets to prevent proble s that handicap the in #or,ing #ith people? 2. ;hat are so e of the reasons that these three people have reached this critical stage of their adult lives and careers see ingly blind to the i portance of earning the trust and utual respect of people #ith #ho they ust cooperate to get the -ob done? !. 3f perfor ing #ith excellence as an individual #or,er does not guarantee being an effective anager, #hat does? ". (here is an i plication in this case that 5proper training6 in anagerial s,ills li,e those in +usan.s subse9uent develop ent ' patience, negotiation, and infor al persuasion ' can a,e a anager out of people li,e 7harles, >ichael, and +usan.

Do you agree? Or, perhaps, there is so ething in their funda ental nature that rules the out as anagers? %. ;hat does the anager #ho has valued you ost, and #ho you ost value, see to ,no# about people that your least preferred anager did not?

%&P%'(%)C()* ST'AT%*(C O'*A)(+AT(O)A, B%HA-(O' Creating 5inancial S!ccess b Avoiding ,a o66s and Hiring 3!ring %cono#ic 3ownt!rns /pages 78$792
S!ggested 3isc!ssion 4!estions 1. 0u an capital is a proven source of co petitive advantage. 3nvesting in it #isely through hiring the right people and fostering their learning and gro#th is the strategy that #on the business in good ti es. ;hy #ould any top anager believe that -ettisoning talented people, a pri e cause of their success, is a re edy for a business do#nturn? 2. (he age'old practice of laying off #or,ers ay have ade sense #hen the ain tas,s #ere hand labor @ less de and for shoes, fe#er hands needed to a,e shoes. (oday, ho#ever, ost co ercial tas,s call for brain#or,. ;hat sort of brain#or, could be done for a business during a do#nturn that could bring an upturn faster, as in the case of 2u 0ori$ons &lectronics or +outh#est Airlines? !. ;hen people are let go, decision a,ers are reducing costs, #hich, in turn #idens the argin of profit. 3s this not prudent financial ste#ardship? ". 50ire ore people, #hen business has fallen off?6 <olly or foresight?

%. (he degree to #hich hu an capital is useful for creating true co petitive advantage is deter ined by its value, rareness, and i itability. Apply this theory to yourself. 1ou are being evaluated in the #or,force as a source of hu an capital. 0o# #ould you go about ensuring your o#n value, rareness, and i itability?

Bac" to the Knowledge Objectives

!. "a# $hat is organizational behavior% "b# $h is it important for managers and aspiring managers to stud &' using a strategic approach% "c# (an the stud of a field such as ps cholog substitute for a strategic approach to organizational behavior% $h or wh not% a. Organi$ational behavior is the action ta,en by individuals and groups in an organi$ational context. B>anagerial actions create that context for carrying out the strategy.C b. (he strategic approach to OB involves organi$ing and anaging the people.s knowledge to i ple ent the organi$ation.s strategy and gain a co petitive advantage. >anaging at any level involves fostering conditions ost favorable to people creating and using the best ,no#ledge for achieving perfor ance ob-ectives. +ince people are the onl source of ,no#ledge )co puters provide infor ation*, the ore deeply a anager understands hu an behavior in organi$ations, and the better able she or he #ill be to provide this context for effective #or,. (he study of OB is an efficient eans of deepening this critical aspect of anagerial ,no#ledge. c. OB integrates ,no#ledge fro psychology, social psychology, sociology, cultural anthropology, econo ics and other basic disciplines as necessary to describe and explain behavior in organi$ations. 7ontext and purpose in psychology is incidental to the larger ai of ,no#ledge for ,no#ledge sa,e. +trategic OB centers study on eeting perfor ance de ands in a co petitive environ ent by the thoughtful application of hu an capital. ). "a# $hat makes an organization an organization% "b# $hat are the defining characteristics% a. (here are basic #ays that people behave together as e bers that constitute an organi$ation. (hey interact to for net#or,s of relationships, dividing tas,s into a coordinated syste of speciali$ed activities for the purpose of achieving certain goals over an extended period of ti e. b. Defining characteristics are net#or,s of individuals, syste s, coordinated activities, division of labor, goal orientation, and continuity over ti e, regardless of changes in individual e bership. *. $hat is human capital% 'e specific. a. 0u an capital is a critical intangible resource. 3t is the su , at any o ent, of s,ills, ,no#ledge, and general attributes of people in an organi$ation. 3t is garnered and constantly rene#ed by each e ber learning #hat it ta,es to acco plish goals #or,ing cooperatively #ith others.

+. ,ow does human capital provide the basis for competitive advantage% a. ;hen the people of an organi$ation can perfor a strategic aspect of the #or, better than co petitors or #hen it can perfor the #or, in a #ay that co petitors cannot duplicate, co petitive advantage results. (rue co petitive advantage is deter ined by the: i. value of hu an capital ' the extent that people are capable of producing #or, that supports the organi$ation.s co petitive strategy8 ii. rareness of the s,ills and talents of the people producing the #or,8 and iii. imitabilit of these s,ills and talents, eaning the extent to #hich they can be copied by co peting organi$ations. %. )a# $hat are the five characteristics of high-involvement management% "b# $hat evidence exists to support the effectiveness of this approach% a. Overall, high'involve ent anage ent is a value shared by all levels of anagers in an organi$ation that hu an capital is the organi$ation.s ost i portant strategic resource and #ho a,e their decisions accordingly. (he five characteristics are: i. -elective hiring @ the foundational decision of choosing the right people8 ii. .xtensive training @ assuring every e ber has ,no#ledge to perfor standard as #ell as uni9ue and innovative #or, processes8 iii. /ecision power @ providing associates #ith the authority to a,e so e i portant decisions on their o#n and #ith others that give the organi$ation its direction8 iv. 0nformation sharing @ seeing that all are properly infor ed in order to a,e effective decisions8 and v. 0ncentive compensation @ recogni$ing and re#arding individual and collective perfor ance that brings about strategic results. b. Desearch studies cited in the chapter co pared co panies anaged #ith recogni$ed high'involve ent practices #ith those anaged by conventional practices, not placing a high value on people. (here #ere fe#er defects, higher productivity, and greater probability of survival in the co panies that placed the highest value on developing the people.

Teaching Point on Knowledge Objectives

(each destination. =earners #ill not have truly arrived at the destination of each of these ,no#ledge ob-ectives, unless or until they bring the ,no#ledge #ill have hit ho e. +tudents this chapter. Does this to life in their lives. (hen, ay be able to give bac, in #riting ans#ers

uch li,e those suggested. (his indicates that they have 5consu ed6 the infor ation in ean they are no# ready to use this as personal #or,ing eans to the short' and long'ter survival of any business ,no#ledge? Are they sho#ing early signs of appreciating #hat an associate and anager.s applied ,no#ledge organi$ation? ;hat they thin, about organi$ational behavior shapes #hat they do. 1earning is creation, not consumption. Five the so ething to do for #hich they.ll to they #ould prefer to have #or,ing have to create and de onstrate their o#n #or,ing ,no#ledge. <or exa ple, as, the co e up #ith a -ob description for a supervisor #ho the high'involve ent anager?

on their behalf to have opti al #or,ing conditions. ;ill they use five characteristics of

Additional .aterial on %thics

$ell made value 2udgments, enacted by learners #hen alternative courses of action are not blac, and #hite. 3s this not strategic in their lives right no# and al#ays in their futures? Five the all the safe, supportive practice you can uster in every ele ent of your course. By your facilitation and #ith support fro fello# learners, your learners

co plete this chapter and course #ith an enhanced vie# of the strategic i portance of even the see ingly insignificant, individual act of organi$ational behavior. An ethic is a rule or habit of conduct #ith regard to right and #rong. By definition, then, every act of organi$ational behavior ste s fro your learners. personal rules and habits of conduct. +ocially enacted, these individual acts co bine and develop into a living body of such rules and habits @ the strategic ethical behavior of #hole organi$ations. 7an there be high'involve ent anage ent #ithout trust? 7an there be trust a ong people #hen oral course of action? &ach of the re aining chapters includes pursuing anything but a

a feature called Thinking about .thics. =earners are as,ed a set of 9uestions to evo,e

their o#n vie#s on personal and strategic i plications of behaving #ell or badly in organi$ations. Discussing or #riting about one, several, or all of these 9uestions #ould raise a#areness, hopefully, even habits. ;hat #ill be added as additional ethics are #ays to ove fro for action learning. 3t is aterial on talk to tr . &xercises have been designed for each chapter

ainly in action that learners #ill recogni$e their o#n rules.

A ST'AT%*(C O'*A)(+AT(O)A, B%HA-(O' .O.%)T All in a 3a :s ;or" /pages <=$<<2

Ke (deas: +tudents #ill observe Ann ;ood #hose strategic responsibility to her co pany is to ,eep the 7onsu er Products Division correctly ai ed at the ost pro ising selling opportunities. Ann counts on E% people )on paper* being capable of perfor ing their assigned and e erging tas,s to share this responsibility #ith her. (echnology brea,s do#n stalling the analysis for Anil. Ann pro ises to invest ti e not planned for this purpose to help that tea recover in ti e to eet the ob-ective. (his event uncovers the ore co plex proble of turnover of high's,illed analysts and the 9uestion of incentives. >o ents later, this sa e issue co es at her fro Broo,e #hose associates #ent off trac, on the atter of pay ine9uities. Does Ann bring all this to Anil >athur and lay it in his lap, or revise her plan for the day and ta,e action to solve proble s by priority? ;e see that she did not. +he is #or,ing this through using her o#n proble 'solving s,ills. ;hat #ill students a,e of this?

A ;a o6 %ngaging ,earners in the Case: 1. Five learners a fe# 2. Put the o ents to re'read the case.

in tea s of "'A.

!. De ind the by posting the 9uestions posed in the chapter: a. Describe the people'related proble s or issues Ann ;ood faced during the day. Did she handle these effectively? 3f not, #hat do you believe she should have done? b. 3s Ann ;ood a high'involve ent anager? 3f so, provide evidence. 3f not, ho# #ell do you thin, she.ll perfor in her ne# -ob as head of ar,eting? c. Assu e that Ann ;ood #ants her anagers and associates to be the foundation for her depart ent.s co petitive advantages. /se the 1:

fra e#or, su ari$ed in &xhibit 1.2 in the chapter text to assess the degree to #hich Ann.s people are a source of co petitive advantage at this point in ti e ". 0ave the share the ans#ers to these three 9uestions #ith each other before the follo#ing discussion. %. %nhancing e>ercise: P!tting on OB *lasses. Five the so e practice in using the +trategic OB =ens. a. PostHpro-ect &xhibit 1.1 <actors and Outco es of a +trategic Approach to Organi$ational Behavior and as, the to find points ade in Ann.s story that tie into one or ore of the six ele ents depicted in the boxes. <or exa ple, the point #here the 3nternet crashes had adverse i pact on the productivity of both the analyst.s group and Ann.s o#n productivity )by diverting her ti e and attention fro other priorities*. b. Five the &xhibit 1.1 as a #or,sheet upon #hich a tea scribe ay -ot do#n shorthand for each located point. c. 0ave a e ber of each tea report to the class #hat they have in each box. d. &ngage the #hole class in dialogue about ho# this use of the +trategic OB =ens has altered their thin,ing about the i portance of people to co pany success. e. 3f ti e allo#s, ta,e the up to the high'level vie# of the ain exhibit )1."* and as, the to see ho# any of those ten ele ents in boxes connect to points in this s all slice of a co pany.s life. f. (his ti e, assign each tea one or ore of the ten ele ents and have the find traces of it in the case. <or exa ple, a tea is loo,ing for o ents of decision a,ing and point out ho# she has as,ed Broo,e for a proposal on ho# to deal #ith the loss of hu an capital rather than snap out a 9uic, decision or ta,e the atter to the next level. 3isc!ssion 4!estions: 1. /escribe the people-related problems or issues 3nn $ood faced during the da . /id she handle these effectivel % 0f not, what do ou believe she should have done% Do they notice that Ann is one step )international experience* fro reaching her goal of beco ing a senior anger? 2o longer -ust a successful individual perfor er, no# Ann.s success is easured by overall results of her #hole ar,eting tea . 3s the 3nternet brea,do#n strictly a technical proble ? ;ill they probe to consider that people ay have run this analysis too close to the deadline, leaving no roo for such setbac,s? Do they pic, up on the 9uestion of loyalty? 3s it about oney, or is this a sign that Iac,son.s )andHor Ann.s* anage ent style is not inspiring loyalty?

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Do they 9uestion #hy it appears that this co pany is not paying talent at ar,et rates? Are they issing the three factors: value, rareness, i itability?

). 0s 3nn $ood a high-involvement manager% 0f so, provide evidence. 0f not, how well do ou think she4ll perform in her new 2ob as head of marketing% &ncourage the to consider, even debate, both sides of this 9uestion +he has her >BA and #as a successful perfor er as an associate and in her first assisting role. +he ,no#s the business fro a broadened and seasoned perspective. ;hat ight the 7areer +tyle 3nventory reveal about her? Ann ay be inclined to be a high'involve ent anager, but is she #or,ing in a syste of high'involve ent anaging? As, the to apply the five ,ey co ponents )&xhibit 1.!* to this case to loo, for positive or negative signs of the prevailing 2or#ich &nterprises #ay of anaging their strategic organi$ational behavior.

*. 3ssume that 3nn $ood wants her managers and associates to be the foundation for her department4s competitive advantages. 5se the framework summarized in .xhibit !.) to assess the degree to which 3nn4s people are a source of competitive advantage at this point in time. (here is roo for disagree ent on #here her tea #ill fall in this analysis. (hey ay agree that they are valuable, but are their talents rare? Perhaps, for it appears they are able to leave for Jbetter -obs.. Are their talents difficult to i itate? Again, it depends on ho# sophisticated the analyses and productions the co pany needs the to do to ,eep the co petitive are. +tudents ay note that consu er products place Ann.s co panies on the field of fierce battles for the custo er.s buying choices. (hus, if her people fail to rise to the challenge and give the co pany the infor ation that it needs to stay out front, then, they can put 2or#ich at a co petitive disadvantage.

B?(,3()* @O?' H?.A) CAP(TA, Career St le (nventor /Pages =9$<72

Teaching enhance#ent: (his experience ay be a bit of a stretch for undergraduate students ta,ing this course as sopho ores or -uniors. >any, even ost, ay be #or,ing #hile in school, but so e of these 9uestions #ould be ore easily ans#ered by people further into their careers li,e Ann ;ood of the 5All in a Day.s ;or,6 case. +tress that this is used in con-unction #ith this chapter to sho# the the relevance of their o#n personal career aspirations to the central the e of the boo,. 0o#

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#ill they beco e valued e bers of organi$ations designed and anaged to foster their gro#th and advance in their careers? Five the your caveat that they are li,ely to apply any sorts of style indicators as they go for#ard. ;hile they ay agree #ith the descriptors and see a pattern a ong those ta,en, they should not allo# these external easures to tell the #ho they really are. 2or, should they use #hat others reveal to the as their pri ary career orientations to affix a stereotyping label on the selves. 1ou have the option of having the do the assess ent si ply for their o#n infor ation. %>ercise: 5inding A66inities. 0ere is a #ay to bring this case to life as a class event. 3f you choose this option, as, the to bring the assess ent results to the class in #hich you have budgeted ti e for discussing the . A suggested #ay of bringing so e i plications of career orientation to light is to sta,e out four corners of the classroo . Put up a sign that says #here each type should asse ble: A!ngle 5ighter ,ions, A!ngle 5ighter 5o>es, Co#pan .an or ;o#an, and Strategic *a#es#an or *a#eswo#an. At 5go6 have the eet in the corner #ith those #ho have the sa e assess ent result. Five the ti e to tal, this over8 probing reasons #hy they thin, this is #here they are right no# in their career orientation. 3f there are 9uadrants that had not one or only one person standing, lead an exa ination of #hy this ay be so. Accordingly, if one of the 9uadrants is heavily populated, tal, about this. 1ou ight #ant to bring the bac, to do this 7hapter One +elf'Assess ent at the end of the course to have the see if there is any change in the pattern of their ans#ers.

T%A. %&%'C(S% .c3onald:s: A High$(nvolve#ent OrganizationB

Teaching enhance#ent: De ind the students that their charge in this exercise as 5overpaid consultants6 is to tell the President ho# locally anaged franchises are easuring up to the standards of high' involve ent anage ent. 3t ay be i plied that he could be a custo er of so e training and consultation in this approach, if he or she sees it as a path to beating their co petitors in the custo er service and satisfaction ga es. Bring up &xhibit 1.! and a,e sure they have it available during tea deliberations. 0ere are those di ensions: Selective Hiring: =arge pools of applicants are built through advertising, #ord of
outh, and internal reco endations. Applicants are evaluated rigorously using ultiple intervie#s, tests, and other selection tools. Applicants are selected on the basis of not only s,ills but also fit #ith culture and ission

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%>tensive Training: 2e# associates and anagers are thoroughly trained for -ob s,ills through dedicated training exercises as #ell as on'the'-ob training. (hey also participate in structured discussions of culture and ission. &xisting associates and anagers are expected or re9uired to enhance their s,ills each year through in'house or outside training and develop ent. Often, existing associates and anagers are rotated into different -obs for the purpose of ac9uiring additional s,ills. 3ecision Power: Associates are given authority to a,e decisions affecting their #or, and perfor ance. Associates handle only those issues about #hich they have proper ,no#ledge. =o#er'level anagers shift fro closely supervising #or, to coaching associates. 3n addition to having authority to a,e certain decisions, associates participate in decisions ade by lo#er'level and even iddle anagers. (n6or#ation Sharing: Associates are given infor ation concerning a broad variety of operational and strategic issues. 3nfor ation is provided through bulletin boards, co pany intranets, eetings, posted perfor ance displays, and ne#sletters. (ncentive Co#pensation: Associates are co pensated partly on the basis of perfor ance. 3ndividual perfor ance, tea perfor ance, and business perfor ance all ay be considered.

0ere, again, are the steps in the exercise they #ill have already seen:
1. Asse ble into groups of four to five. &ach group #ill act as a separate <astal, consulting group. 2. (hin, about your past visits to >cDonald.s. ;hat did you see and experience? 0o# #as the food prepared and served? ;hat #as the process? Did the e ployees see to be happy #ith their #or,? Did they see to be #ell trained and #ell suited for the #or,? Did the supervisor act as a coach or a superior? 1our instructor ay as, you to visit a >cDonald.s in preparation for this exercise andHor to research the organi$ation via the 3nternet or school library. !. Assess >cDonald.s on each di ension of high'involve ent anage ent. ". Develop reco endations for the president of >cDonald.s. %. Deasse ble as a class. Discuss your group.s assess ents and reco endations #ith the rest of the class, and listen to other groups. assess ents. Do you still assess >cDonald.s in the sa e #ay after hearing fro your colleagues in the class? A. (he instructor #ill present additional points for consideration.

Additional points 6or learner consideration: ;hat do they thin, of the device of having consultants investigate the perfor ance of a business by loo,ing fro the custo er vantage point? Did your tea agree fro their o#n experience that >cDonald.s is losing ground to co petitors such as Burger King, ;endy.s, Dun,in. Donuts, etc.? >cDonald.s pioneered the #inning food fast )and cheap* strategy bac, in the 1GA:s. (hey have continually updated their stores and food preparation technologies. A burger is a burger8 #hat advantage could they gain by focusing on hu an capital as a strategic resource? ;hat is the tea .s considered opinion of >cDonald.s future success in attracting and developing superior anagers at the franchise level?

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3%,, CAS% C'(T(CA, TH()K()* 4?%ST(O)S Chapter One Connections

1. Describe ho# Dell uses hu an capital as a source of co petitive advantage. a. -uggested 3nswer: After the .co crash, top leadership reali$ed they needed to ove fro top'flight, co petitive, and financiall driven, e ployees #ith top'flight, co petitive growth b learning-driven e ployees. (o attract and retain this talent, they created the 5+oul of Dell6 culture. 3t is succeeding, so no# Dell gro#s hu an capital as a source of co petitive advantage. Dell people are: )1* capable of producing #or, that supports an organi$ation.s strategy for co peting in the ar,etplace )hu an capital value*, )2* bring s,ills and talents of an organi$ation.s people are uni9ue in the industry )rareness*, and have s,ills and talents for fast, efficient, effective selling direct to the custo er )i itativeness*. b. (onnection to this (hapter: Dell.s results'oriented culture brings in people #ho are both responsible and accountable for their o#n and the co pany.s perfor ance. (heir creativity is relied upon in this strategy. Associates are expected to continuously search for better #ays to anufacture, solve proble s, reduce costs, and deliver. 2. 3dentify the aspects of high involve ent Dell6 vision state ent. anage ent contained in the 5+oul of

a. -uggested 3nswer: 5(he +oul of Dell6 culture is aligned to their vision declaration that the co pany is co itted to providing its custo ers 5a superior experience at a great value.6 At the enduring core of their anufacturing and selling strategy are direct relationships. (o achieve operational excellence, they staff their front lines of contact #ith custo ers and suppliers #ith highly engaged associates #or,ing in highly effective tea s to identify opportunities to provide superior experience. (hey stress that they operate #ithout inefficient hierarchy and bureaucracy. b. (onnections to this (hapter: 5&ncouraging creative solutions is one aspect of ho# Dell translates its 5soul6 into business reality though sound people policies.6 (hese policies ap directly upon ain ele ents of high' involve ent anage ent: i. -elective hiring @ (hey are L 1 in their field, so they attract and hire only the best8 9ualified by their gro#th orientation. ii. .xtensive training @ Dell continuously develops all associates and tea s #ith a substantial invest ent in for al training, on'the'-ob learning, and entoring and coaching. iii. /ecision power @ Dell.s top leaders odel a high'touch leadership style and expect their anagers to be closely involved #ith responsibility and accountability right do#n to the shop floor. 1%

iv. 0nformation sharing @ (o#n 0all eetings, follo# up to bio' annual e ployee surveys, one on one eetings #ith each e ployee once a onth, are so e of the #ays Dell is fostering a feeling of shared o#nership that atches their shared responsibility for the perfor ance of the co pany. v. 0ncentive compensation @ Dell re#ards on erit. People are -udged on their ,no#ledge and contributions to tea and organi$ational perfor ance. (hey recogni$e and re#ard individual and collective perfor ance that brings about strategic results.

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