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Modern
Management concepts & skills
R TO
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. C
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SAM
fifteenth edition
CONTENTS vii
Conclusions about the Performance of Social Promoting Diversity through Hudson Institute
Responsibility Activities by Business 46 Strategies 77
Social Responsiveness 47 Promoting Diversity through Equal Employment
Determining Whether a Social Responsibility Exists 47 and Affirmative Action 78
Social Responsiveness and Decision Making 48 Promoting Diversity through Organizational
Commitment 79
TIPS FOR MANAGING AROUND THE
GLOBE: China Focuses on Agricultural (Ag) Promoting Diversity through Pluralism 80
Sustainability 48 TIPS FOR MANAGING AROUND THE GLOBE:
Approaches to Meeting Social Responsibilities 49 Deloitte UK “Hides” College and University
Degrees 81
The Social Audit Challenge 50
How Managers Promote Diversity 82
The Philanthropy Challenge 51
Planning 82
The Sustainable Organization Challenge 52 Organizing 82
Defining Sustainability 52 Influencing 83
Defining a Sustainable Organization 52 Controlling 83
Why Sustainability? 53
STEPS FOR SUCCESS: Generation Z Members and
Steps for Achieving Sustainability 54 Their Challenges 83
PRACTICAL CHALLENGE: ACHIEVING Management Development and Diversity
SUSTAINABILITY: Mars 54 Training 84
Managers and Ethics 56
CHALLENGE CASE SUMMARY 86
A Definition of Ethics 56
Why Ethics Is a Vital Part of Management Class Preparation and Personal Study 87
Practices 56 Management Skills Exercises 88
A Code of Ethics 57
Creating an Ethical Workplace 57
STEPS FOR SUCCESS: Creating an Ethical Work
Environment 59
Following the Law: Sarbanes–Oxley Reform 5 Managing in the Global Arena 93
Standards 59
Global Management Skill and Your Career 93
CHALLENGE CASE SUMMARY 60
CHALLENGE CASE: KFC Opens a Store a Day in
Class Preparation and Personal Study 62 China 94
Management Skills Exercises 63
Fundamentals of International
Management 95
4 Management and Diversity 67
Categorizing Organizations by Level of
Diversity Skill and Your Career 67 International Involvement 97
Domestic Organizations 97
CHALLENGE CASE: Diverse Employees International Organizations 97
Contribute to GE Lighting’s Bright Future 68 Multinational Organizations: The Multinational
Corporation 97
Defining Diversity 69
The Social Implications of Diversity 69
Multinational Corporations 98
Complexities of Managing the Multinational
Advantages of Diversity in Organizations 70 Corporation 98
Gaining and Keeping Market Share 70
PRACTICAL CHALLENGE: GROWING AN
Cost Savings 70 INTERNATIONAL ONLINE BUSINESS:
Increased Productivity and Innovation 71 Amazon’s International Expansion 100
Better Quality Management 71 Risk and the Multinational Corporation 100
Challenges That Managers Face in Working with The Workforce of Multinational
Diverse Populations 72 Corporations 100
Changing Demographics 72 Types of Organization Members Found in Multinational
Multigenerational Workforce 73 Corporations 101
Ethnocentrism and Other Negative Dynamics 73 Workforce Adjustments 101
PRACTICAL CHALLENGE: SETTING DIVERSITY Adjusting to a New Culture 101
TARGETS: Pinterest Sets Hiring Goals for a More Repatriation 101
Diverse Workforce 74
Management Functions and Multinational
Negative Dynamics and Specific Groups 75
Corporations 102
Strategies for Promoting Diversity in Planning in Multinational Corporations 102
Organizations 77
TIPS FOR MANAGING AROUND THE GLOBE: Using Control Tools to Control Organizations 473
Exercising Power across Cultures 437 Inspection 473
Making Controlling Successful 438 Management by Exception 473
Essentials of Information 439 Management by Objectives 474
Factors Influencing the Value of Information 439 Break-Even Analysis 474
STEPS FOR SUCCESS: Getting a Handle Other Broad Operations Control Tools 476
on Big Data 441 CHALLENGE CASE SUMMARY 477
Evaluating Information 442
The Information System (IS) 443 Class Preparation and Personal Study 479
Describing the IS 443 Management Skills Exercises 480
PRACTICAL CHALLENGE: USING DATA FROM
SOCIAL MEDIA: Twitter Feeds Businesses’
Needs 444 Appendix 1 Managing: History and Current
Managing Information Systems 446
Thinking 484
CHALLENGE CASE SUMMARY 448
Comprehensive Management Skill and Your
Class Preparation and Personal Study 449 Career 484
Management Skills Exercises 450
CHALLENGE CASE: How Management
Innovation Keeps Ford Moving Ahead 485
20 Production and Control 455 The Classical Approach 486
Production Skill and Your Career 455 Lower-Level Management Analysis 487
PRACTICAL CHALLENGE: IMPROVING
CHALLENGE CASE: Tesla Production Will Be PRODUCTIVITY: Tracking Sensors Take Work
Fastest in History 456 Measurement to a New Level 488
Comprehensive Analysis of Management 490
Production and Productivity 457 Limitations of the Classical Approach 491
Defining Production 457
The Behavioral Approach 491
Productivity 457
The Hawthorne Studies 492
Quality and Productivity 458 Recognizing the Human Variable 492
Focus on Continual Improvement 458
STEPS FOR SUCCESS: Understanding
Focus on Quality and Integrated Operations 458 Employees 493
PRACTICAL CHALLENGE: CONTINUAL The Human Relations Movement 493
IMPROVEMENT: At Wisconsin Hospitals, Costs
The Management Science Approach 493
Fall as Quality Rises 459
The Beginning of the Management
Automation 460
Science Approach 494
Strategies, Systems, and Processes 461
Management Science Today 494
Operations Management 462
Characteristics of Management Science
Defining Operations Management 462 Applications 495
Operations Management Considerations 462
The Contingency Approach 495
TIPS FOR MANAGING AROUND THE GLOBE:
Choosing a Factory Location: Volkswagen Picks The System Approach 495
North America 464 Types of Systems 496
Systems and “Wholeness” 496
Operations Control 467
The Management System 496
Just-in-Time Inventory Control 467
Information for Management System Analysis 497
Maintenance Control 468
Cost Control 469 Learning Organization: A New Approach? 498
Budgetary Control 469 TIPS FOR MANAGING AROUND THE GLOBE:
STEPS FOR SUCCESS: Controlling with a IBM’s “Crowded” Learning Environment 499
Budget 470 CHALLENGE CASE SUMMARY 499
Ratio Analysis 471
Materials Control 472 Class Preparation and Personal Study 500
Operations Control Tools 472 Management Skills Exercises 501
S. Trevis Certo is the Jerry B. and Mary Anne Chapman Professor of Business in the Depart-
ment of Management and Entrepreneurship in the W. P. Carey School of Business at Arizona
State University. His research focuses on corporate governance, top management teams, ini-
tial public offerings (IPOs), and research methodology. Trevis’s research has appeared in Acad-
emy of Management Journal, Academy of Management Review, Strategic Management Journal, Journal of
Management, Journal of Business Venturing, Entrepreneurship Theory and Practice, Journal of Management
Studies, Business Ethics Quarterly, Journal of Business Ethics, California Management Review, and Business
Horizons. Trevis also serves on the editorial boards of Academy of Management Journal and Strategic
Management Journal. Trevis has taught undergraduate, MBA, EMBA, and PhD courses in strate-
gic management, research methodology, and international business at Arizona State University,
Texas A&M University, Indiana University, Tulane University, and Wuhan University (China).
xv
Thank you for taking the time to review our book. If you are reading this right now, you likely
agree with our (perhaps biased) opinion that Management is one of the most important courses
that students will take in their academic careers. Regardless of their majors, management will
likely be in your students’ futures. Whether your students graduate to become salesforce mem-
bers, financial analysts, or supply chain specialists, they will undoubtedly work for managers.
This book will help students understand how managers work. Moreover, the concepts in this
text will help students prepare for their own future management positions.
It is hard to believe that this management textbook, now in its fifteenth edition, is over 35 years
old. While a little younger than companies such as Apple and Microsoft, it is amazing to think
that our book is older than companies like Alphabet (Google), Costco, Amazon, Lockheed
Martin, and Netflix. Like these leading companies, our book has advanced over the years, rely-
ing on one constant theme: innovation. We created a product that resonated with the academic
community, and we continuously innovated over the decades that followed. Specifically, over
the years we have continued to integrate leading-edge research on individuals, teams, and orga-
nizations with pedagogical techniques designed to enhance students’ performance, their ability
to obtain employment, and ultimately their careers.
The unique approach of our book is that each chapter in our comprehensive text helps students
develop a specific management skill. The content specifically focuses on how students can be
more strategic and more creative, work as team members, become successful leaders, and more.
We designed our chapters to build these skills (and others) to fulfill the objective of this book: To
help students both obtain employment and flourish in the workplace.
The work on the pages that follow is largely the result of our interactions with the many instruc-
tors around the globe who use our book. Thank you! If we can help, please do not hesitate to
email us!
Sincerely,
Applying
Management
Concepts
xvii
Tips for Managing Around the Globe, Steps for Success, and Practical Challenge callouts
highlight practical applications of management concepts.
Each chapter references assignable exercises in MyLab Management like branching, scenario-
based Try It! Mini Sims and Watch It! Videos about real companies to provide even more
opportunities for students to apply the concepts they are learning to real-world situations.
Developing Management
Skills
Three Experiential Exercises are featured at the end of each chapter. The first type helps stu-
dents use active learning, frequently in groups, to develop knowledge and skills specific to chapter
content. The second, You and Your Career, is an exercise that asks students to reflect on chapter
content to help them better understand how to manage their careers. The third type, Building
Your Management Skills Portfolio activities, use real company examples and data points to
help students demonstrate the management knowledge and skill acquired in that chapter.
Chapter-by-Chapter Changes
Introduction to Modern Management
Chapter 1: Introducing Modern Management: Concepts and Skills
• Updated with new Highlight: Management Skill and Your Career
• New chapter coverage on employability skills and highlights about top-paid executives
• New Challenge Case discusses Coca-Cola’s new CEO, James Quincey
• New end-of-chapter case features Doze Mattresses and the challenges of managing a start-up
business
• New Experiential Exercise related to conceptual skills
• New You and Your Career activity delves into managing older generations of workers
Chapter 2: Management and Entrepreneurship: Handling Start-Ups and New Ventures
• New Chapter Placement: Moved to front of book to emphasize entrepreneurship early in
course
• New Highlight: Entrepreneurship Skill and Your Career
• New Challenge Case, Professor Becomes Restaurateur, focuses on start-ups
• New Experiential Exercise focuses on conducting a feasibility study
• New You and Your Career looks at hiring decisions
• New Building Your Management Skills Portfolio activity discusses the entrepreneurship
process
Planning
Chapter 7: Plans and Planning Tools
• New Highlight: Planning Skill and Your Career
• New example illustrates how Mitsubishi Electric constructed a new training facility
• New Steps for Success feature reviews tips for creating a budget
• New end-of-chapter case showcases how Gillette is battling Dollar Shave Club
Chapter 8: Making Decisions
• New Highlight: Decision-Making Skill and Your Career
• New Practical Challenge features Ford deciding to cancel building a Mexican auto factory
• New Building Your Management Skills Portfolio examines the decision making in solving a
restaurant problem
Chapter 9: Strategic Planning: Strategies, Tactics, and Competitive Dynamics
• New Highlight: Strategic Planning Skill and Your Career
• New Tips for Managing Around the Globe explores Ryanair’s cost leadership strategy
• New Experiential Exercise focuses on applying Porter’s model to Burger King
• New Building Your Management Skills Portfolio activity examines strategic issues at Newell
Brands
Organizing
Chapter 10: Fundamentals of Organizing
• New Highlight: Organizing Skill and Your Career
• New Tips for Managing Around the Globe shows how a French law bans work e-mail after
hours
• New You and Your Career explores working in a flat versus tall organization structure
• New Building Your Management Skills Portfolio examines coordination and span of
management
Chapter 11: Responsibility, Authority, and Delegation
• New Highlight: Responsibility and Delegation Skill and Your Career
• New Challenge Case examines Hy-Vee Supermarkets and manager autonomy
• New Steps for Success provides tips for delegating tasks
• New end-of-chapter case reviews Warby Parker permitting employees to choose their own
projects
• New Experiential Exercise discusses centralization versus decentralization at Dairy Queen
• New You and Your Career emphasizes job descriptions
• New Building Your Management Skills Portfolio illustrates delegation at Etsy
Chapter 12: Human Resource Management
• New Highlight: Human Resource Management Skill and Your Career
• New Challenge Case discusses Netflix revamping its human resource function
• New Steps for Success gives tips for being an effective interviewer
• New Practical Challenge illustrates how Home Depot conducts interviews
• New end-of-chapter case looks at Disney using social media to recruit employees
• New Building Your Management Skills Portfolio illustrates conducting a human resource
audit at Gold Star Chili
Chapter 13: Changing Organizations: Stress, Conflict, and Virtuality
• New Highlight: Organizational Change Skill and Your Career
• New chapter coverage of IBM and Yahoo! moving from virtual work arrangements back to
traditional office settings
• New Experiential Exercise discusses change agents in a campus organization
• New You and Your Career focuses on stress reduction
"I should have sent for you, if only I could have felt sure—
But if Barclay had died meantime—"
"I am glad you think so," with a more restful look. After a
break, she resumed, "I was telling you, the other day, all
about Barclay—the sort of life his has been. I wanted to ask
you a question; only we were interrupted. It puzzles me
sometimes how a man like that—brought up as he was—
how he can help being what he is . . . I mean—can he help
it? . . . If he has inherited all sorts of evil ways—and if all
his associations were so bad—things he could not alter—
doesn't it seem as if he must have grown into his present
shape, without any choice of his own? And if that is true,
how can he be responsible for it?"
"I have. The daughter is a nice little girl. Not quite desirable
for Cyril, though."
"He's rather done!" Jem said cheerily. "But all right, now we
are back. The study, Jean—and he shall have some hot
brandy and water at once. No, I know he doesn't take
stimulants commonly; but to-night he must! We'll do our
best to keep out the chill. Smithson came half-way, and
then I sent him back."
Mr. Trevelyan did not speak till divested of his damp cloak,
and placed in his big chair near the blazing fire.
The answer came almost like an echo of what Jem had said
—
"My dear, we can only leave him now—in just and merciful
Hands . . . ONE who knows all about him—better than you
or I! . . . But I would not for worlds not have gone."
CHAPTER X.
It was three o'clock, and the Doctor had a long list of visits
still to pay; yet he could not at once escape. Mrs. Kennedy,
though minus the possession of a "glittering eye," like that
of the Ancient Mariner, held him with such eyes as she had,
refusing to see his anxiety to be off.
"Feejee Islanders are all very well—I dare say they'll learn
by-and-by quite to shine in society, don't you know?—Now
they've left off eating everybody. And as for Madagascar,
and Zulu-Land, and that other place—what is the name?—
Alaska—I should be as glad as anything, if they could just
have all the beads and blankets they want, poor dear
things! We have our working party once a fortnight, you
know—what Mabel calls 'The Timbuctoo Thimble'—and then,
of course, we think about those sort of creatures. At least,
we try to, I'm sure, though we do sometimes talk about
Mrs. Villiers' last new bonnet, don't you know?"
"I can't endure the woman, for my part. She's got such a
way of setting herself upon a turret, as if nobody else in the
world ever had a kind thought. Every one's narrow, and
bitter, and wicked, and disagreeable, except Miss
Moggridge. And the way she abuses good people who don't
think like her—! Well, of course they're narrow, poor dears
—and how can they help it? I suppose they were made so;
or at least they've grown into it. Some people are born
wide, and some are born narrow. And I don't really see, for
my part, that it's a bit prettier or more Christian, for the
broad-minded folks to abuse the narrow because they're
not broad, don't you know, than it is for the narrow to
abuse the broad, because they're not narrow, don't you
see? Of course, nobody ever calls themselves narrow. They
only say, they're all right, and everybody else is wrong who
doesn't think like them. And that's what Miss Moggridge
does—so where's the difference? . . . But I didn't mean to
get upon Miss Moggridge. I wanted to ask you about Mr.
Trevelyan."
Yes; her father was better; really better, and on the whole
out of danger. At least Dr. Ingram hoped so. Recovery would
be slow, of course; it could not be otherwise; and great care
would be needed. There must be no thought of work at
present—probably not for months. Dr. Ingram talked of a
year's rest. The strain had been kept up far too long.
Nothing was settled yet, but Dr. Ingram wished him very
much to go for a voyage—perhaps to the Cape, or perhaps
to Australia.
"My dear, I'm most dreadfully sorry! But you would go with
him, of course?"
Jean broke into one irresistible sob, and a few hot tears fell
in quick succession; but she struggled back to composure,
and gently released herself—not without a sense of comfort.
"Thank you very much: you are very good," she said. "But
of course I do not mean to be selfish. If he will only come
home strong, it will be all right. May I give you a cup of tea?
I am afraid I ought to go upstairs soon."
He did not yet know his own mind about the two girls—
though not from any lack of self-watching—and he was
drifting fast to a position where he would be likely to act as
if he did know it.
Emmie's dark face, small and rosy and sweet, was gaining
more and more a hold upon him. She was not aware of the
fact herself, being very young, unversed in the ways of the
world, and kitten-like in simplicity. She would chat and
laugh with Sir Cyril, as easily as if she had been his sister,
delighted always to see him, because her father had so few
friends. But naturally, Cyril did not ascribe this delight to
thoughtfulness for her father—though he still kept up the
little fiction of coming perpetually to call upon Captain
Lucas. If Captain Lucas were out or busy, it was a matter of
course that he should stay for a talk with the ladies.
CHAPTER XI.
ON THE ROCKS.
• • • • •
"Some power grown tyrannous holding me fast,
Blotting alike the Future and Past."
L. MORRIS.
She did not see him at first. Her eyes were downcast, the
dark lashes almost resting on the rounded cheeks, and as
she came slowly in with a lagging step, she said, "O dear
me!" half aloud.
"No, no, don't disturb her on any account. Pray don't. I dare
say she has lots of things to do."
"I dare say she will look in presently; but don't call her. I
only want to know how you are all getting on. The last three
days have been so full, I couldn't find a minute. How is your
father?"
"Oh, no—I—"
Emmie knelt down on the rug, and poked vaguely at the red
embers; whereupon Cyril bent over her, took the poker out
of her hand which he found to be trembling, arranged the
fading coals in a scientific fashion, and placed a few fresh
pieces lightly one upon another. A flame sprang up as by
magic. Then he laid hold upon those trembling little hands,
lifted Emmie up, and placed her in the big arm-chair. She
submitted as a child might have done, and sat where he put
her, not crying as she would have cried for some minor
matter, but with her mouth set in a sorrowful curve, and her
eyes gazing into some unknown grief. The colour in her
cheeks was much deeper than usual—a rich crimson-velvet
tint—and the brow looked whiter, the eyes darker by
contrast. Cyril had never seen her thus. His feelings were
greatly stirred.
"O no—thanks—"
"Emmie, I love you! I love you, darling! Can you love me?
Will you promise to be my wife?"
"It is so kind of you," said Emmie wistfully. Then she sat up,
and drew her hand away from his with an instinctive
movement, yet she repeated, "It is so very kind of you."
"Yes—O I think I do. But I didn't know what you were going
to say. It seems so—so strange! And—my mother—"
"Miss Devereux has no real control over me. It all rests with
you! If you can say 'Yes'—"