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Contents
Management Portfolio Project 39

Video Management Case 39
MANAGEMENT CASE: SECRETS OF CANADA’S BEST BOSSES 40
CHAPTER TWO
Managing the Organizational Environment 41
OPENING CASE:
IKEA Is on Top of the Furniture World 41
Overview 43
What Is the Organizational Environment? 44
The External Organizational Environment 44

The Industry-Specific or Task Environment 46
The General Environment 49
The Global Environment 56

Declining Barriers to Trade and Investment 58
Declining Barriers of Distance and Culture 59
Effects of Free Trade on Managers 60
Focus On the Social Economy: The Social Purchasing Portal, Winnipeg 62
Managing the External Environment 62

Reducing the Impact of Environmental Forces 63
Managers as Agents of Change 63
Tips for Managers: Managing the External Environment 66
Challenges for Management in a Global Environment 66

Building a Competitive Advantage 67
Maintaining Ethical Standards 71
Utilizing New Information Systems and Technologies 71
SUMMARY AND REVIEW 71
KEY TERMS 73
WRAP-UP TO OPENING CASE 74

MANAGEMENT IN ACTION 75
Topics for Discussion and Action 75
Self-Reflection Exercise 76
Small Group Breakout Exercise 76
Business Planning Exercise 77
Managing Ethically Exercise 77
Management Challenge Exercise 77
MANAGEMENT CASE: TURNAROUND AT SONY? 78
END OF PART I: CONTINUING CASE—CARROT TOPS: INTRODUCTION 79
vii
Contents
Appendix A: History of Management Thought 80

F.W. Taylor and Scientific Management 80
Weber's Bureaucratic Theory 82
The Work of Mary Parker Follett 83
The Hawthorne Studies and Human Relations 84
Theory X and Theory Y 85
PART II
PLANNING
CHAPTER THREE
Managing Decision Making 88
OPENING CASE:
Good Decision Making at PUMA 88
Overview 90
The Nature of Managerial Decision Making 90
Programmed and Nonprogrammed Decision Making 91
Two Models of Decision Making 93

The Classical Model 93
The Administrative Model 94
Steps in the Decision-Making Process 96

Step 1: Recognize the Need for a Decision 96
Step 2: Identify Decision Criteria 98
Step 3: Generate Alternatives 98
Step 4: Assess Alternatives 98
Step 5: Choose an Alternative 100
Step 6: Implement the Chosen Alternative 100
Step 7: Evaluate and Learn from Feedback 101
Tips for Managers: Managing the Decision-Making Process 101
Biases in Decision Making 102

Decision-Making Styles 104
Ethics, Social Responsibility, and Decision Making 105

Ethics and Decision Making 106
Making Ethical Decisions 106
Codes of Ethics 108
Societal Ethics 109
Professional Ethics 109
Individual Ethics 110
Social Responsibility and Decision Making 111
Decision Making for Sustainability 115
Decision Making in Learning Organizations 116
Focus On the Social Economy: Eva’s Phoenix Print Shop 117
KEY TERMS 119
viii
Contents

MANAGEMENT CASE: AN EVEN BETTER CHOICE? 124
CHAPTER FOUR
Managing Planning and Strategy 126
OPENING CASE:
Amazon: Taking Over the Online World 126
Overview 128
Why Planning Is Important and Who Does It 128

Why Planning Is Important 129
Levels of Planning and Types of Plans 130
Tips for Managers: Planning 135
Five Steps in the Planning Process 136

Defining the Vision, Mission, and Goals 137
Analyzing the Environment 139

SWOT Analysis 139
The Five Forces Model 142
Focus On the Social Economy: Prince George Native Friendship Centre 145
Developing Strategy 145

Corporate-Level Strategy 145
Business-Level Strategy 146
Functional-Level Strategy 149
Gaining a Competitive Advantage 150
Implementing and Evaluating Strategy 151

Strategy Implementation 151
Evaluating Strategy 152
KEY TERMS 154

ix
Contents
MANAGEMENT CASE: STIRRING UP CAMPBELL SOUP 159
END OF PART II: CONTINUING CASE—CARROT TOPS: BUILDING A COMPETITIVE ADVANTAGE 161
Appendix B: Developing a Business Plan 162

The Business Plan as an Exercise in the Processes of Management 162
What Is a Business Plan? 162
Putting It All Together 163
PART III
ORGANIZING
CHAPTER FIVE
Managing Organizational Structure 176
OPENING CASE:
Samsung Reorganizes for the 21st Century 176
Overview 178
Designing Organizational Structure 178
Grouping Tasks into Jobs: Job Design 181

Work Specialization 182
The Job Characteristics Model 183
Departmentalization 185
Simple Structure 185
Functional Structure 186
Tips for Managers: Choosing a Divisional Structure 188
Divisional Structures: Product, Geographic, and Market 189
Focus On the Social Economy: Common Thread Co-operative 191
Team-Based Organizational Structures 192
Hybrid Structures 194
B2B Network Structures 195
Allocating Authority and Decision-Making Responsibilities 198

Allocating Authority 198
Centralization and Decentralization of Decision Making 202
Linking and Coordinating Activities 203
Choosing a Formal or Flexible Overall Structure 205

Mechanistic Structures 206
Organic Structures 206
Factors Affecting Choice of Overall Organizational Structure 206
KEY TERMS 211

x
Contents

MANAGEMENT CASE: LOBLAW ACQUIRES SHOPPERS DRUG MART 216
CHAPTER SIX
Managing Communication and Information Technology (IT) 217
OPENING CASE:
Hootsuite Connects Business to Social Media 217
Overview 218
The Importance of Communication in Organizations 219
The Communication Process and Communication Styles 220

The Communication Process 220
Communication Styles 222
Verbal and Nonverbal Communication 223
Developing Communication Skills 225
Communication Skills for Senders 226
Communication Skills for Receivers 228
Organizational Communication Networks and Channels 229

Choosing a Communication Network and Channel 230
Face-to-Face Communication 231
Spoken Communication Electronically Transmitted 232
Personally Addressed Written Communication 233
Impersonal Written Communication 234
Advances in Information Technology 234

Tips for Managers: Information Richness and Communication Media 235
Software Developments 235
Focus On the Social Economy: Framework 236
Management Information Systems (MIS) 237
Limitations of Information Systems 237
Social Media 238
KEY TERMS 240

xi
Contents

MANAGEMENT CASE: CANADIAN DRUG MAKER GOES SOCIAL TO HELP SUPPLY CHAIN CRISIS 243
CHAPTER SEVEN
Managing Human Resources 245
OPENING CASE:
Effectively Managing Human Resources at the Four Seasons 245
Overview 247
HRM Legislation and Managing Diversity 249

The Legal Framework of HRM in Canada 249
Managing Diversity 250
Diversity in Canada 251
Managing a Diverse Workforce 252
Strategic Human Resource Management 253

Human Resource Planning 254
Job Analysis 256
The Components of HRM 258

Recruitment and Selection 258
Focus On the Social Economy: EMBERS (Eastside Movement for Business & Economic Renewal Society) 259
Tips for Managers: Recruitment and Selection 266
Training and Development 267
Performance Appraisal and Feedback 270
Pay and Benefits 274
Employee Engagement 277
Harassment in the Workplace 280

Forms of Sexual Harassment 281
Steps Managers Can Take to Eradicate Workplace Harassment 283
KEY TERMS 284

MANAGEMENT CASE: THE UNPAID INTERNSHIP DEBATE 289
END OF PART III: CONTINUING CASE—CARROT TOPS: STRUCTURE 290
xii
Contents
Appendix C: Career Development 291

Types of Careers 291
Career Stages 293
Effective Career Management 295
PART IV
LEADING
CHAPTER EIGHT
Managing Motivation 298
OPENING CASE:
Motivation at Enterprise Rent-A-Car 298
Overview 300
The Nature of Motivation 301
Need Theories of Motivation 304

Focus On the Social Economy: Inspirations Studio, Toronto 305
Maslow's Hierarchy of Needs 305
Herzberg's Motivator-Hygiene Theory 306
McClelland's Need for Achievement, Affiliation, and Power 308
Other Needs 309
Process Theories of Motivation 309

Expectancy Theory 309
Equity Theory 313
Goal-Setting Theory 317
Learning Theories 319

Positive Reinforcement 320
Negative Reinforcement 321
Extinction 322
Punishment 322
Social Learning Theory 323
Total Reward Strategy 325

Pay and Motivation 326
KEY TERMS 331

xiii
Contents

MANAGEMENT CASE: TRAINER TO THE STARS HARLEY PASTERNAK ON KEEPING PEOPLE MOTIVATED 336
CHAPTER NINE
Managing Leadership 338
OPENING CASE:
1-800-Got-Junk? Brian Scudamore’s International Success 338
Overview 340
The Nature of Leadership 341

Leadership Style and Managerial Tasks 342
Focus On the Social Economy: From Me to We Leadership 343
Power: The Key to Leadership 343
Early Models of Leadership 345

The Trait Model 346
The Behavioural Model 346
Contingency Models of Leadership 348

Fiedler's Contingency Model 349
Hersey-Blanchard's Situational Leadership Theory 351
Path-Goal Theory 351
The Leader Substitutes Model 354
Tips for Managers: Applying Contingency Models of Leadership 355
Summary of Contingency Theories of Leadership 355
Visionary Models of Leadership 355

Transformational Leadership 356
Charismatic Leadership 358
Turnaround Leadership 359
Gender, Culture, Emotional Intelligence, and Leadership 360

Gender and Leadership 361
Leadership Styles across Cultures 363
Emotional Intelligence and Leadership 363
KEY TERMS 365

MANAGEMENT CASE: INTERVIEW: DESJARDINS GROUP CEO MONIQUE LEROUX ON TAKING CO-OPS NATIONAL 370
xiv
Contents
CHAPTER TEN
Managing Teams 373
OPENING CASE:
Teams Benefit from Deviance and Conformity at IDEO 373
Overview 374
Groups, Teams, and Organizational Effectiveness 374

Groups and Teams as Performance Enhancers 376
Groups, Teams, and Responsiveness to Customers 376
Teams and Innovation 377
Groups and Teams as Motivators 378
Types of Groups and Teams 378

Group Dynamics 383
Group Size and Roles 383
Focus On the Social Economy: Vibrant Communities Canada 383
Group Leadership 385
Stages of Group Development 386
Group Norms 389
Group Cohesiveness 392
Group Decision Making 395

The Perils of Groupthink 395
Improving Group Decision Making 396
Promoting Group Creativity 397
Managing Groups and Teams for High Performance 398

Motivating Group Members to Achieve Organizational Goals 398
Reducing Social Loafing in Groups 399
Helping Groups to Manage Conflict Effectively 401
Sources of Organizational Conflict 402
Conflict Resolution Approaches 404
Tips for Managers: Building Teams for High Performance 406
KEY TERMS 407

MANAGEMENT CASE: “NOBODY HAS A GOOD DAY IN SPACE IF THE TEAM HAS A BAD DAY” 412
END OF PART IV: CONTINUING CASE—CARROT TOPS: MOTIVATING HIGH PERFORMANCE 413
xv
Contents
PART V
CONTROLLING
CHAPTER ELEVEN
Managing Control and Operations 416
OPENING CASE:
Will CEO Mary Barra’s Customer Safety Strategy Work for General Motors? 416
Overview 418
What Is Organizational Control? 419

Steps in the Control Process 419
Control Systems and Operations Management 423

Feedforward Control 424
Concurrent Control 425
Feedback Control 425
Focus On the Social Economy: Ten Thousand Villages: A History of Helping Artisans 426
Output Control 426

Mechanisms to Monitor Output 427
Problems with Output Control 430
Behavioural Control 431
Corporate Governance and Control 432
Direct Supervision 433
Management by Objectives 434
Bureaucratic Rules and SOPs 434
Tips for Managers: Control 437
Clan Control 437
Control Mechanisms and Gaining a Competitive Advantage 438

How Culture Controls Managerial Action 439
Organizational Control and Building a Competitive Advantage 441
KEY TERMS 443

MANAGEMENT CASE: 3M CANADA COMPANY FINED $55,000 AFTER WORKER INJURED 446
xvi
Contents
CHAPTER TWELVE
Managing Change 448
OPENING CASE:
Can Sobeys Change Leaders Conquer Western Canada? 448
Overview 450
Organizational Change 451
Steps in Managing Organizational Change 453

Assessing the Need for Change 453
Deciding on the Change to Make 454
Introducing the Change 455
Evaluating the Change 455
Tips for Managers: Introducing Change 455
Models of Organizational Change 456
Organizational Change and Culture 460

Adaptive Cultures versus Inert Cultures 460
Innovation, Entrepreneurship, and Organizational Change 461

Focus On the Social Economy: Vibrant Communities Canada: Cities Reducing Poverty 463
Product Champions 464
Skunkworks 464
Rewarding Innovation 465
Managing Change in a Unionized Environment 465

KEY TERMS 468

MANAGEMENT CASE: THE UBER BUSINESS MODEL: DRIVING DISRUPTION 472
END OF PART V: CONTINUING CASE—CARROT TOPS: CONTROLLING OPERATIONS 473
Appendix D: Operations Management and Competitive Advantage (ON CONNECT) AD-1
GLOSSARY GL-1
ENDNOTES EN-1
PHOTO CREDITS PC-1
INDEX IN-1 (ON CONNECT)
xvii
Preface
A manager is a person who makes other people’s work meaningful.
When groups of people come together to pursue a common goal, often to satisfy their collective needs,
various activities must be structured so that resources can be gathered and used to achieve the goal.
The person or people who are assigned the task of keeping the whole group working toward the goal,
deciding on timing and strategy and maintaining the structure of activities and relationships, are
those who engage in management. The activities of managing are critical to any complex cooperative
endeavour. Management is both the art and science of arranging and utilizing the physical and human
factors of production toward a socially desirable outcome without interfering in nature’s ability to
regenerate itself. This book provides you, the student, with an introduction to sustainable management
processes. This fifth Canadian edition is designed around the four main sets of activities that managers
engage in to achieve organizational goals: Planning, Organizing, Leading, and Controlling.
In Part I: Management, Chapter 1: Managers and Managing, we discuss who managers are, the
types and levels of managers found in organizations, the managerial skills needed to perform their main
responsibilities, and the roles they perform in planning, organizing, leading, and controlling. New to this
edition, we introduce how organizational culture and norms and values affect managerial behaviour in
this opening chapter, whereas previous editions have dealt with this topic later on in the chapter lineup.
Chapter 2: Managing the Organizational Environment sets the management process in
the environmental context of operating enterprises in Canada and the global economy. The political,
economic, socio-cultural, and technological contexts, as well as the immediate agents in the organization’s
external environment, such as suppliers, customers, distributors, and competitors, are analyzed for the
threats and opportunities they present to managers trying to gain a sustainable competitive advantage.
The awareness of differences in national cultures is important in being successful in the global economy,
and creating shared value among shareholders and direct producers is the most important breakthrough
in making progress to toward a sustainable economy where all stakeholders’ interests are highly valued.
Part II: Planning, Chapter 3: Managing Decision Making addresses the fundamental challenge
facing managers to make ethical and sustainable decisions. Approaches to socially responsible decision
making are addressed here. Chapter 4, Managing Planning and Strategy, tackles the process
of planning organizational goals, formulating strategies, and finding the best ways to implement
and evaluate the success of those goals and strategies. Two common techniques for analyzing the
environmental context that is vital to strategy formulation for a competitive advantage, SWOT and
Porter’s Five Forces model, are examined.
In Part III: Organizing, we begin with Chapter 5: Managing Organizational Structure, where the
elements of organizational design and structure are discussed. Students learn that ways of allocating authority
and distributing control over decision making result in different organizational structures. The type of overall
organizational structure depends on internal and external environmental factors, such as strategy, technology,
human resources, and the degree of environmental change. Chapter 6: Managing Communication and
Information Technology begins with examining the communication process, the types and strengths of
communication channels, and the importance of changing technological impact on effective communication,
including the most important elements of a social media strategy. Chapter 7: Managing Human Resources
is focused on how managers can successfully recruit, select, develop, appraise, and compensate valued and
diverse employees in the context of the Canadian legal and regulatory environment.
xviii
Preface
In Part IV: Leading, we first look at Chapter 8: Managing Motivation. Here we discuss the
means by which managers can motivate good work effort and performance from employees. Several
need and process theories are discussed, and the importance of a total rewards strategy utilizing both
intrinsic and extrinsic factors is highlighted. In Chapter 9: Managing Leadership, the importance
of effective leadership in managing organizational performance is analyzed. Trait, behaviour, and
contingency theories are explored, and transformational and transactional leadership styles are
compared. A new section on visionary leadership rounds out this discussion. Chapter 10: Managing
Teams discusses the types of groups and teams found in contemporary organizations. Students will
learn the elements of group dynamics, group decision-making techniques, and what managers can do to
create high-performing teams and manage conflict in their organizations.
In Part V: Controlling, we start with Chapter 11: Managing Control and Operations, where
we discuss how managers monitor and measure the use of resources to make sure processes and
products are up to standards throughout the entire value chain. Corporate governance practices are
examined in light of recent economic crises. The types of controls that managers use impact the success
of the organization in achieving high performance and gaining a competitive advantage. And, finally,
we conclude our discussion of control by examining theories of organizational change in Chapter 12:
Managing Change. They say that the only constant is change itself, so understanding how to deal with
it is an important skill for managers of organizations.
Continued in this edition is a Focus on the Social Economy box, which profiles a social enterprise
that has both the function of creating economic value common to traditional for-profit businesses and
creating social impact common to non-profit and charitable organizations. In each chapter, you will
learn how a social enterprise applies business management processes to help people and solve social
problems that were once only the responsibility of governments. Social entrepreneurs find innovative
ways to deal with some of the fundamental concerns that the “business-as-usual” mentality has created,
including a growing gap between rich and poor and environmental degradation. The awareness that
if we continue to operate solely on a “business-as-usual” basis, where profit maximization is the only
measurement of success, we will fail all of the stakeholders in any enterprise: employees, customers,
partners, suppliers, investors, communities, and nature. We have to embrace innovative and sustainable
ways to foster an economy that enables us to clothe, feed, and care for ourselves and others, and enjoy
life without interfering with nature’s diversity or its ability to regenerate itself.
Also continued in the fifth edition is the running case, Carrot Tops. This case gives students the
opportunity to apply all the theories and models examined in the text to the management challenges
facing the owner/manager of a small business operating in a dynamic organizational environment, where
all levels of managers face opportunities and threats.
New in this edition are the Appendices found after each major section. After Part I: Management,
you will find Appendix A: History of Management Thought. After Part II: Planning, you will find
Appendix B: Developing a Business Plan. Appendix C: Career Development is located after Part III:
Organizing. The online Appendix D: Operations Management and Competitive Advantage, available
on Connect, rounds out your introduction to the fundamentals of managing an organization successfully.
All of the material covered in Essentials of Contemporary Management, Fifth Canadian Edition,
has a direct application to you as a student of organizational management as well as to any business or
social enterprise you may own, manage, or work for in the future.
J. W. Haddad
November 2015
xix
First Pass
CHAPTER 4 Managing Planning and Strategy
Guided Tour
FOCUS ON The Social Economy
Prince George Native Friendship Centre
The Prince George Native Friendship Centre (PGNFC) is a social service agency whose mission is to “facilitate
individual, family and community growth through the power of friendship.” PGNFC has four meeting rooms which
can be rented out and used for community events. Their social enterprise is their Gathering Place Hospitality and
Catering Services, based out of their Smokehouse Kitchen, which operates an employment training program.
Offsite catering customers have included Meals on Wheels, a residential shelter, and a soup bus program.
Started in 1998, the Smokehouse Kitchen Training Program provides Aboriginal participants with the practical
knowledge, skills, and experience required to acquire entry-level employment in the food industry or to access
post-secondary education in a related field. Two dozen participants are trained each year in a full commercial
kitchen with a restaurant and catering department that cater events ranging from box-lunch drop-off to full-service
Learning Tools
in-house catering. Participants also receive job placements for work experience. The program provides participants
with the necessary information, tools, and support they need when exploring, seeking, securing, or re-entering the
Food Service and Hospitality Industry. In addition, [their] participants receive employment assistant services that
Learning Outcomes have been highlighted at the beginning of each First Pass
include career planning, job skills, interest, job leads, and skills development. Over the years the Smokehouse
Kitchen Program participant completion rate is averaging around 70 percent. The majority of participants that
complete the Smokehouse Kitchen Program go on to employment in the food service industry.39
chapter, identified throughout the text, and discussed in the Summary and Review. 1. Research the PGNFC on the Web. Identify the organization’s vision and mission.
2. Perform a SWOT analysis on PGNFC. What strategies would you recommend the organization pursue to gain a
competitive advantage?
is the job of managers at the corporate, business, and functional levels to formulate strategies to counter
CHAPTER 4 these threats so that an organization can respond to both its industry-specific and general environments,
perform at a high level, and generate high returns and social impact. The Focus on the Social Economy
First Pass
feature illustrates how the Prince George Native Friendship Centre generates high social impact.
LO4
Managing Planning
Differentiate among corporate-level, business-level, and functional-level strategies.
STEP 3: DEVELOPING STRATEGY

and Strategy
Once the environmental forces are analyzed for opportunities and threats, decisions about how to best
accomplish
out of thethe organization’s
United States aftervision, mission,
this strategy and goals
failed. can
Instead, be made.
CIBC boughtThese
a stake decisions translate
in a troubled Irishinto
bank.
strategies
Lookingthat managers
overseas pursueinternationally
to expand at the corporate,
maybusiness, and functional
be, in part, because oflevels.
its disastrous venture into the
United States.49 Campbell’s Soup Company did an about-face after it lost its competitive advantage to
Corporate-Level
General Mills when theStrategy
latter began offering a more health-conscious line of soup in the early 2000s.
Campbell’s responded to this threat by realigning its products to meet the changing nutrition needs of
L E ARNI NG OUTCO M E S Corporate-level strategy is a plan of action concerning which industries and countries an organization
consumers. Among the changes, it reduced the amount of sodium in soups. But, sales were sluggish and
should invest its resources in to achieve its mission and goals. In developing a corporate-level strat-
incoming CEO Denise Morrison reversed the low-sodium strategy to try to regain market share. Pre-
LO1 Describe why planning is important, and the levels of planning and types of plans. egy, managers ask: How should the growth and development of the company be managed in order to50
mium Select Harvest soups had sodium levels raised to 650 milligrams from 480 milligrams a serving.
increase its ability to create value for its customers (and thus increase performance) over the long run?
LO2 Describe planning as a five-step process.
First Pass
When goals are unmet, strategy must be rethought in such a way as to stay true to the vision and
Managers of most organizations have the goal to grow their enterprises and actively seek out new oppor-
mission of the organization.
LO3 Explain how managers use planning techniques to evaluate the opportunities and threats in the tunities to use the organization’s resources to create more goods and services for customers. Seeking
organization’s environment. out new opportunities occurs when companies and their strategies are able to adapt to changing cir-
cumstances due to changing forces in the task or general environment. For example, customers may no
LO4 Differentiate among corporate-level, business-level, and functional-level strategies. longer be buying the kinds of goods and services a company is producing (high-salt soup, bulky analog
LO5 Describe how managers implement strategy and evaluate its success.
Chapter 4
145
SUMMARY AND REVIEW
FIGURE 4.6
OpeningQualities
Case of Good Goal Formulation: Make Them SMART + C
LO1
An Overview of the Planning Process Planning involves setting goals and finding the
Qualities of Good Goal Formulation jon88782_ch04_126-161
145 08/19/15 02:26 PM
best strategy to achieve them. This is done by management at all three levelsFirstof thePassorga-
Amazon: Taking Over
S the Online World
Specific
nization: top-level managers are responsible for long-term strategic planning and strate-
M
The rapid pace at which the world Measurable
is changing is forcing the managers of all kinds of companies to develop gizing, middle-level for intermediate planning, and first-line for functional-level planning.
A competitive
new strategies to protect their Assignable (Achievable,
advantage. Attainable,
If they Action-oriented,
don’t, they Acceptable,
will be overtaken Agreed-upon,
by agile com- Accountable) Planning serves to give direction and purpose to the organization, it coordinates different
petitors that respond faster toRchanging
Realistic (Relevant,
customer Result-oriented)
needs. Nowhere is this truer than in the cut-throat mobile functions and divisions, and it allows managers to control the use of resources. Scenario
computing business. T Time-related (Timely, Time-bound, Tangible, Traceable) PART II Planning or contingency planning involves managers forecasting what may happen in the future
Billionaire founder Jeff Bezos
C incorporated
Communicated Amazon.com, Inc. in 1994 and opened its Internet store in and then gathering resources to meet these anticipated needs, opportunities, and threats.
July 1995 with the aim to provide “earth’s biggest selection.”1 His strategy was to offer an unlimited selection Crisis management occurs when unanticipated and unplanned contingencies arise.
of books and, where possible, to have
The period inthem shipped
which a goaldirectly from distributors
is expected to customers.
to be achieved should beThestated.
company
Time constraints are import- Lexpansion
O2 Fiveto help increase the value of the goods and services provided to customers. At
Steps in the Planning Process
grew to mammoth proportions, taking the business or divisional level, managers are responsible for developing a low-cost or
ant because theymuch of the book
emphasize that retailing business
a goal must with it. Circuit
be reached withinCity, Borders, andperiod; they inject a sense
a reasonable 1. Determining an organization’s vision, mission, and goals
others succumbed toofthe competition differentiation strategy, either for the whole market or for a particular segment of it (focus
urgency into and
goalclosed up shop,
attainment unable
and to match
act as the variety
a motivator. Forofexample,
online goods
Taco and
Bell’s managers committed 2. Analyzing the forces in the organizational environment
delivery service. Amazon launched strategy). At the functional level, departmental managers try to add value to the product
themselves toan online TV
reviving and
the movie
line store
of its in 2006,offerings
fast-food the Kindleand
e-book reader store inincrease sales and by 2015
to significantly
2007, and the MP3 they
digital music store inthis
2008. Later, or service by differentiation
3. Formulating strategyor increasing efficiencies by reducing costs. All managers
had achieved goal as itsAmazon aimedattracted
tasty treats its sights on Netflix
away with an instant
customers from McDonald’s and KFC.
video streaming service that’s free for attempt to gain a competitive
4. Implementing strategy advantage by increasing quality, responsiveness to custom-
The issue of members. It also reward
how to design now offers customers
systems an online managers
to motivate auction service
and and
other organizational employ-
sells just about everything, including furniture. ers, and efficiencies and innovations.
ees is discussed in Chapter 8. The evaluation of whether goals were achieved is part of the control pro- 5. Evaluating strategy
cess, which we discuss in-depth in Chapter 11.
LO5 LSteps 4 and 5: Implementing and Evaluating Strategy These steps require manag-
O3 Step 2: Analyzing the Environment This step involves conducting an analysis of the
ers to allocate responsibilities to individuals or groups, draft detailed action plans that
Definitions
L 3 of Key Terms are highlighted in each chapter, and a list of these terms is provided at the
organizational environment to evaluate how the internal and external forces impact the
O Explain how managers use planning techniques to evaluate the opportunities and threats in the specify how a strategy is to be implemented, establish a timetable for implementation that
126 organization by creating opportunities and threats. SWOT analysis examines the internal
organization’s environment. includes specific measurable goals, allocate necessary resources, and hold the individuals
strengths and weaknesses of the organization, while Porter’s Five Forces model analyzes
or groups accountable for reaching goals. Managers monitor the progress of goal achieve-
end of eachSTEP
chapter and in the glossary at the end of the text.
2: ANALYZING THE ENVIRONMENT
the potential for profitability within a particular industry by looking at the degree of com-
ment and make corrective adjustments when strategies fail to accomplish the organiza-
petitive rivalry, the ease of entry, the power of buyers, the power of suppliers, and the
tion’s mission and goals.
threat of substitute products. Managers use these techniques to evaluate what strategy
Strategy formulation includes analyzing an organization’s current situation and PM then developing strat- would gain them a competitive advantage.
jon88782_ch04_126-161 126 08/19/15 02:26
KEY TERMS
egies to accomplish the organization’s mission and achieve its goals.33 Strategy formulation begins with LO4 Step 3: Developing Strategy At the corporate level, organizations use strategies such as
managers analyzing the factors within an organization and outside—in the industry-specific and general concentration on a single business, diversification, vertical integration, and international
business-level plan
environments—that affect or may affect the organization’s ability to meet its current and future goals. business-level strategy
Several techniques can be used to analyze the organization’s environment, including SWOT analysis co-opetition 153
and the Five Forces model. Once the environmental forces are analyzed for opportunities and threats, corporate-level plan
decisions about how to best accomplish the organization’s vision, mission, and goals can be made. These corporate-level strategy
decisions translate into strategies that managers pursue at the corporate, business, and functional levels. cost-leadership strategy
crisis management plans
strategy formulation Analysis of an organization’s current situation followed by the development of strategies to
accomplish the organization’s mission and achieve its goals. differentiation strategy
jon88782_ch04_126-161 153 08/19/15 02:26 PM
focused differentiation strategy
focused low-cost strategy
SWOT Analysis functional managers
SWOT analysis is a planning exercise in which managers identify organizational strengths (S) and functional-level plan
weaknesses (W), and environmental opportunities (O) and threats (T). Based on a SWOT analysis, man- functional-level strategy
First Pass
Figures and Tables are interspersed throughout the text to illustrate concepts and provide a visual
agers at the different levels of the organization select corporate-, business-, and functional-level strate-
gies to best position the organization to achieve its mission and goals (see Figure 4.7).
functions
Gantt chart
framework for students.

goal
SWOT analysis A planning exercise in which managers identify organizational strengths (S) and weaknesses (W),
and environmental opportunities (O) and threats (T) relative to the competition. mission statement
planning
policy
139 Porter’s Five Forces model
FIGURE 4.1 rule

scenario planning
Steps in the Planning Process standard operating procedures (SOPs)
1 Determine the vision, 2 Conductstrategic

an leadership
jon88782_ch04_126-161 139 08/19/15
mission, and major 02:26 PM environmental
strategy
goals of the analysisstrategy formulation
organization
SWOT analysis
What is the SWOT and Porter's Five time horizon
nature of the Forces Analysis
business? vision statement
154
What measures of Corporate, Business
5 Evaluate success will be used? and 3 Formulate
the strategy Functional Levels a strategy
Assign
responsibility and allocate jon88782_ch04_126-161 154 08/19/15 02:26 PM
resources
4 Implement the strategy
or differentiates the organization in some ways from its competitors. The second step is to conduct an
analysis of the current situation with respect to threats and opportunities in the external environment,
and strengths and weaknesses in the internal environment. The third step is to formulate a strategy. Man-
agers analyze the organization’s current situation and then conceive and develop the strategies necessary
to attain the organization’s mission and goals. The fourth step is to implement the strategy. Managers
xx decide how to allocate the resources and responsibilities required to implement the strategies among
people and groups within the organization.7 The final step is to evaluate the strategy. How successful
is the organization in achieving its mission and goals? In subsequent sections of this chapter we look in
detail at the specifics of these steps. But first we examine the general nature and purpose of planning.
Essentially, to perform the planning task, managers (1) establish and discover where an organi-
zation is at the present time; (2) determine where it should be in the future—that is, its desired future
state; and (3) decide how to move it forward to reach that future state. When managers plan, they must
forecast what may happen in the future in order to decide what to do in the present. The better their
CHAPTER 4
Guided Tour
Managing Planning
and Strategy
Rich and Relevant Examples An important feature of our book
is the way weI N Guse
LE ARN real-world
O UTCO MES examples and stories about managers and companies to drive home the
L 1
applied lessons to students. Moreover, unlike boxed material in other books, we integrate more applied
O Describe why planning is important, and the levels of planning and types of plans.
L 2 O Describe planning as a five-step process.
and fewerL 3 types of boxes seamlessly into the text; they are an integral part of the learning experience,
O Explain how managers use planning techniques to evaluate the opportunities and threats in the
organization’s environment.
First Pass
and not tacked

L 4 O
on or isolated from the text itself. This is central to our pedagogical approach.
Differentiate among corporate-level, business-level, and functional-level strategies.
LO5 Describe how managers implement strategy and evaluate its success.
Opening Case Wrap-Up to Opening Case

Amazon: Taking Over the Online World Amazon: Taking Over the Online World
The rapid pace at which the world is changing is forcing the managers of all kinds of companies to develop
First Pass
The rapid pace at which the world is changing is forcing the managers of all kinds of companies to
new strategies to protect their competitive advantage. If they don’t, they will be overtaken by agile com- develop new strategies to protect their competitive advantage. If they don’t, they will be overtaken
petitors that respond faster to changing customer needs. Nowhere is this truer than in the cut-throat mobile by agile competitors that respond faster to changing customer needs. Nowhere is this truer than in the
computing business. cut-throat mobile computing business in which Amazon competes. After having read and understood
Billionaire founder Jeff Bezos incorporated Amazon.com, Inc. in 1994 and opened its Internet store in the concepts in this chapter you should now be able to answer the following questions:
July 1995 with the aim to provide “earth’s biggest selection.”1 His strategy was to offer an unlimited selection
1. What
CHAPTER 4 was the vision Planning
Managing for Amazon.com and how has it changed?
and Strategy
of books and, where possible, to have them shipped directly from distributors to customers. The company
grew to mammoth proportions, taking much of the book retailing business with it. Circuit City, Borders, and ANSWER: Amazon.com began with the vision of offering the world’s biggest selection of books over the
others succumbed to the competition and closed up shop, unable to match the variety of online goods and Internet. Since 1995, the vision has expanded to include all kinds of products, not just books, for sale over
FIGURE
delivery service. Amazon launched an online TV and movie store in 4.4
2006, the Kindle e-book reader store in the Internet. Amazon’s vision is “to be earth’s most customer centric company; to build a place where
2007, and the MP3 digital music store in 2008. Later, Amazon aimed its sights on Netflix with an instant
Notable Corporate Responses to Crisis Management17
video streaming service that’s free for members. It also now offers customers an online auction service and
people can come to find and discover anything they might want to buy online.”
sells just about everything, including furniture. 2. Describe

1. Johnson & Johnson’s response to the case of tampered Tylenol is widely cited the corporate-level
as the gold strategy
standard response to aemployed
crisis. by Amazon.
In 1982, in Chicago, seven people died after taking extra-strength Tylenol that had been laced with cyanide. The company
ANSWER:three-way,
yanked the product off the shelves across the United States. It would ultimately introduce Amazon has positionedpill
tamper-proof itself as an industry leader in e-commerce mainly through acqui-
bottles.
Within a year, Tylenol had regained its market share. sitions of other online retailers. This is a diversification strategy. The diversification is related because
126
the acquisitions are in the same online retailing industry. Examples include Zappos and Diapers.com.
2. U.S.-based toy giant Mattel issued an extraordinary apology to China in September 2007 over
Through the diversification,
related recall of millions of Chinese-became the world’s largest online retailer.
Amazon.com
made toys, taking the blame for design flaws and saying it had recalled more lead-tainted toys than justified. Mattel ordered
Each chapter begins with an Opening Case. These cases pose a real-world, chapter-related challenge
three high-profile recalls in the summer of 2007 involving more than 21 million Chinese-made
The company istoys,
accessories and toy cars due to concerns about lead paint and tiny magnets thattocould be swallowed.
also including Barbiediversification
pursuing other doll strategies that at first appear to be unrelated
its core business of online retailing but upon closer analysis will strengthen it. Amazon developed a
jon88782_ch04_126-161 126 08/19/15 02:26 PM tablet computer, the Kindle Voyage, that will compete with Apple’s iPad. Investing in the design and
and then discuss how companies or managers responded to that challenge, bringing to light the many
3. In March 2007, the president of Canadian pet food company Menu Foods apologized to pet owners amid a recall of products
production of computer hardware appears unrelated to the core business of online retailing; however,
found to contain Chinese-supplied wheat gluten laced with poisonous melamine. Company shares dropped following
the innovative browser, called Amazon Silk and run on a modified Google Android operating system, will
deaths of cats and dogs. Executives were asked to take pay cuts, and the company downsized its workforce after millions
issues surrounding the management process. At the end of the chapter, the Wrap-Up to the Opening
of packages of pet food were recalled and dozens of lawsuits were launched.make
$55 million.
it easier
The recall forMenu
cost customers
Foodsto an
browse and shop online (at Amazon.com) because it allows free stor-
estimated
age of data, music, and movies on its vast cloud computing servers instead of being stored only by the
browser in the device, thus adding value and convenience for customers.
Case wraps up the opening case in light of the new information gleaned from the chapter. Students are
Crisis management plans are formulated to deal with possible future crises. Management crisis
Amazon’s foray16 into the publishing business is an example of a vertical integration strategy. Where
once it relied on publishers to produce the books it sells online, it now publishes many books itself. This
provided with the answers tosumer

theconfidence
questions raised in the opening case.
software can help formulate a response that minimizes the potential damage to reputation and con-
that comes along with a disaster. Several companies have faced crises that had to be
is an example of backward vertical integration that cuts out the producer and thus increases the profits
for the company.
managed for damage control; see Figure 4.4.
3. What business-level strategies has Amazon pursued?
crisis management plans Formulated to deal with possible future crises.
Tips for Managers distill the lessons that students can take from the chapter and apply to develop their
ANSWER: Amazon has pursued a corporate-level strategy of acquiring any firms that could rival its
e-commerce business and has propelled itself to the world’s largest online retailer as a result. It now
In two Toronto-based cases, two very different approaches to crisis management were used, result-
competes with eBay by offering an online auction site. Apple’s iCloud competes with Amazon’s cloud
ing in two very different outcomes. Maple Leaf Foods recalled its entire stock of 220 meat products from
management skills. one of its plants that was shut down after being found to be the source of food-borne bacteria called
computing services.
Listeria monocytogenes. The listeriosis outbreak caused several deaths and illnesses. How did CEO
Michael McCain handle the crisis? In an effort to protect the company and its customers, he gave press
155
Tips for Managers
Planning
1. Vision matters because it serves as a source of inspiration and motivation for the stakeholders of the
jon88782_ch04_126-161 155 08/19/15 02:26 PM
organization. Craft the vision statement so that it reflects what the organization is striving to achieve.
For example, the vision of a food bank may be “to end hunger.”
2. Operationalize the vision by breaking it down into a mission—a statement of purpose of the
organization. For example, the mission of the food bank may be “feeding hungry people in our
community.”
3. Further break down the mission into a series of cascading relating goals and objectives. For example,
the goal may be “to have enough resources to feed those who need the food bank’s services for six
months.” A related objective may be “keeping a one-week supply of food, having enough staff and
volunteers to meet unexpected increases in demand, and increasing funding levels by 10 percent above
the previous year’s budget.”
4. If each objective is met, then the broad goal of “having enough resources” is likely to be achieved and
the organization is fulfilling its mission.
135
Experiential Learning Features We have given considerable

jon88782_ch04_126-161 135 08/19/15 02:26 PM
time and attention to developing state-of-the-art experiential end-of-chapter

First Pass learning exercises that drive
home the meaning of management to students. These exercises are grouped together at the end of each
chapter in the section called Management in Action.
MANAGEMENT IN ACTION
TOPICS FOR DISCUSSION AND ACTION
LEVEL 1 Knowledge & Comprehension
1. Describe the five steps in the planning process. Explain how they are related.
2. Discuss the levels of plans, the time horizons of plans, the difference between standing and
single-use plans, and why planning is important. What are the qualities of effective plans?
3. Describe scenario planning. How can scenario planning help managers predict the future?
LEVEL 2 Application & Analysis

4. Ask a manager to identify the corporate-, business-, and functional-level strategies used by
his or her organization.
5. Watch the video on Porter Airlines at www.youtube.com/watch?v=xnhExEZvJNI. Identify
the airline’s mission. What type of business-level strategy is it pursuing? Give evidence to
support your answer.
6. Go to the Bombardier Web site. Identify the vision, mission, and major goals for the com-
pany. What is the business-level strategy of its largest division? xxi
LEVEL 3 Synthesis & Evaluation
7. Research a well-known company that you can easily find information about. What is the
main industry that the company competes in? Apply Porter’s Five Forces model to this
industry to determine its profitability.
8. Present an argument for having lower-level managers participate in the company’s strate-
Guided Tour
First Pass
Topics for Discussion and Action are a set of chapter-related questions First Pass based on Bloom’s three levels
of developmental consideration: level 1 tests students’ knowledge and comprehension; level 2 tests stu-
dents’ ability to apply concepts; and level 3 tests students’ synthesis and evaluation skills. CHAPTER 4 Managing Planning and Strategy
M ANAGEMENT IN ACTION
TOPICS FOR DISCUSSION AND ACTION
TOPICS FOR DISCUSSION
LEVEL 1 Knowledge AND ACTION
& Comprehension
LEVEL1.1 Describe
Knowledgethe &five steps in the planning process. Explain how they are related.
Comprehension
First Pass
Discuss the
1.2. Describe the levels of plans,
five steps in thethe time horizons
planning ofExplain
process. plans, the
howdifference
they arebetween
related. standing and
single-use plans, and why planning is important. What are the qualities of effective plans?
Describe scenario
3. single-use plans, and planning. How can
why planning scenario planning
is important. What arehelp
the managers
qualities ofpredict theplans?
effective future?
Describe
3. 2
LEVEL scenario
Application planning. How can scenario planning help managers predict the future?
& Analysis
LEVEL4.2 Ask a manager&toAnalysis
Application identify the corporate-, business-, and functional-level strategies used by
his or her organization.
4. Ask a manager to identify the corporate-, business-, and functional-level strategies used by
Watch the video on Porter Airlines at www.youtube.com/watch?v=xnhExEZvJNI. Identify
5. his or her organization.
the airline’s mission. What type of business-level strategy is it pursuing? Give evidence to
5. Watch the video on Porter Airlines at www.youtube.com/watch?v=xnhExEZvJNI. Identify
support your answer.
TOPICS theFOR
airline’sDISCUSSION
mission. What type AND ACTION strategy is it pursuing? Give evidence to
of business-level
Go to the
6. support Bombardier
your answer. Web site. Identify the vision, mission, and major goals for the com-
LEVEL 1 pany.
KnowledgeWhat is&theComprehension
business-level strategy of its largest division?
6. Go to the Bombardier Web site. Identify the vision, mission, and major goals for the com-
1. Describe the five steps in the planning process. Explain how they are related.
LEVEL 3pany. What is&the
Synthesis business-level strategy of its largest division?
Evaluation
Research
LEVEL7.3single-use a &well-known
and whycompany
planning that you can easily findthe
information
qualities ofabout. What is the
Self-Reflection Exercises are unique exercises that ask students to internalize concepts from the chap-
Synthesisplans,
7. Describe
3.
Evaluation
planning. How can
is important. What are
Researchscenario
a well-known company thatscenario
you canplanning
easily find
helpinformation
effective
about. What
managers predict
plans?
is the
the future?
industry to determine its profitability.
ter and apply them to their personal lives and situations at this moment, helping them to grasp the rele-
LEVEL8.2industry
Application
Present to & Analysis
andetermine
argument forprofitability.
its having lower-level managers participate in the company’s strate-
4. gic aplanning
Ask manager process. What
to identify themight happenbusiness-,
corporate-, if they were to have no input?strategies used by
andparticipate
functional-level
8. Present an argument for having lower-level managers in the company’s strate-
vance of key chapter ideas and concepts. 9. his
gic or her organization.
Research
planning two firms inWhat
process. the same
mightindustry,
happen ifand perform
they were toa have
competitive SWOT analysis. What
no input?
type of business-level and functional-level strategies would you recommend for the firms,
9. Watch
5. Research the two
video on Porter
firms Airlines
in the same at www.youtube.com/watch?v=xnhExEZvJNI.
industry, and perform a competitive SWOT analysis. Identify
What
andairline’s
the why? mission. What type of business-level strategy is it pursuing? Give evidence to
support
and why? your answer.
SELF-REFLECTION
6. Go to the Bombardier EXERCISE
Web site. Identify the vision, mission, and major goals for the com-
pany.to
What
SELF-REFLECTION
Think ahead five is the business-level
years EXERCISE strategywhat
from now to consider of itsitlargest
is that division?
you might like to be doing with your
life. Develop your own vision and mission statements. Establish a set of goals that will help you
LEVEL 3 Synthesis
Think ahead & Evaluation
to five years from now to consider what it is that you might like to be doing with your
achieve your vision and mission.
life. Develop your aown
7. Research vision and
well-known missionthat
company statements.
you can Establish
easily finda information
set of goals about.
that will
Whathelpis you
the
Develop a SWOT analysis for considering what you want to be doing in five years. What are
achieve your
mainvision andthat
industry mission.
the company competes in? Apply Porter’s Five Forces model to this
your strengths and weaknesses? What are the opportunities and threats in carrying out this plan?
Develop a SWOT analysis for considering
industry to determine its profitability. what you want to be doing in five years. What are
Develop a five-year plan that maps out the steps you need to take in order to get to where you
want8.to Present an life
be in your argument
at that for having lower-level managers participate in the company’s strate-
time.
gic planning process. What might happen if they were to have no input?
want to be in your life at that time.
SMALL GROUP
9. Research BREAKOUT
two firms in the sameEXERCISE
industry, and perform a competitive SWOT analysis. What
SMALL
Form groups GROUP
of three BREAKOUT EXERCISE
or four, and appoint one member as the spokesperson who will communicate
and why?
Small Group Breakout Exercises are uniquely designed to allow instructors in large classes to utilize inter-
your findings to the class when called on by the instructor. Then discuss the following scenario:
Form groups of three or four, and appoint one member as the spokesperson who will communicate
You are a team of management consultants hired by a grocery store chain to plan the feasibility
SELF-REFLECTION
of opening a store in yourEXERCISE
community. You must answer all the questions below and report back to
active experiential exercises in groups of three to four students. The instructor calls on students to form into
Think
your clients.
aheada to
of opening fiveinyears
store yourfrom now to consider
community. You mustwhat it isall
answer that
theyou might like
questions belowto be
anddoing
reportwith
backyour
to
life.
yourDevelop
clients. your own vision and mission statements. Establish a set of goals that will help you
small groups simply by turning to people around them. All students participate in the exercise in class, and a
achieve your vision and mission. 157
Develop a SWOT analysis for considering what you want to be doing in five years. What are
mechanism is provided for the different groups to share what they have learned with one another.
157
want to be in your life at that time.

jon88782_ch04_126-161 157 08/19/15 02:26 PM
SMALL GROUP BREAKOUT EXERCISE

jon88782_ch04_126-161
157 08/19/15 02:26 PM
Form groups of three or four, and appoint one member as the spokesperson who will communicate
First Pass
of opening a store in your community. You must answer all the questions below and report back to
your clients.
157
PART II Planning
Business Planning Exercises provide professors with the opportunity to ask their students to write a
First Pass
1. List the major supermarket chains in your city, and identify their strengths and weak-
business plan for a new venture or nesses a strategic
relative to oneplan
jon88782_ch04_126-161 another.for
157 What an existing
opportunities venture.
and threats Inchain?
exist for each the Student Resources in 08/19/15 02:26 PM
Connect, students can apply managerial and organizational concepts to the writing of a business plan by
2. What business-level strategies are these supermarkets currently pursuing?
3. What kind of supermarket strategy would do best against the competition?
referring to Appendix B:PART
Developing
II Planning
a Business
4. What would you recommendPlan.to your clients, and why?
BUSINESS PLANNING EXERCISE

1. List the major supermarket chains in your city, and identify their strengths and weak-
nesses relative to one another. Whatthis
Please access opportunities and threats exist for each chain?
content on Connect.
2. What business-level strategies are these supermarkets currently pursuing?

3. What kind of supermarket strategy would do best against the competition?
MANAGING ETHICALLY EXERCISE
4. What would you recommend to your clients, and why?
Managing Ethically Exercises present
A major students
department store has receivedwith
repeatedan ethical
criticism scenario
for selling orproduced
clothes that are dilemma
at and ask them,
low cost in developing countries. The CEO of the department store knows that suppliers are paying
either individually or in aBUSINESS
group, to better
think
PLANNING
5 percent about
thanEXERCISE anofissue
the going rate wages in from an ethical
these countries and feels thatperspective
this is fair enough. in order to under-
stand the issues facing practising managers.

Working conditions at suppliers’
Please access factories
this content are no worse than at other factories in those countries.
on Connect.
The CEO has come to you to check her assumptions that as long as the suppliers are buying from
manufacturing plants that have better-than-average working conditions for the country where the
MANAGING ETHICALLY
company EXERCISE
is located, nothing further needs to be done. What would you advise her? How would you
justify your advice?
A major department store has received repeated criticism for selling clothes that are produced at
MANAGEMENT
5 percent better CHALLENGE
than the going rate EXERCISE
of wages in these countries and feels that this is fair enough.
Beyondatthe
Working conditions Green
suppliers’ Doorare no worse than at other factories in those countries.
factories
The Green Door is a vegetarian restaurant in Ottawa with an “eye and palette . . . focused on
nourishment drawn from the local, organic, seasonal, natural, wholesome, comforting and
company is located, nothing further needs to be done. What would you advise her? How would you
colourful.”51 The restaurant is situated directly across from Saint Paul University52 (part of the
University of Ottawa and home to about 1000 undergraduate and graduate students in such
xxii disciplines as spirituality, philosophy, human sciences, pastoral counselling, and conflict studies).
MANAGEMENT CHALLENGE
OttawaPlus.ca EXERCISE
considers The Green Door the “heaven for vegetarians” and an Ottawa institution.53
Beyond the 1.Green Doorvegetarian restaurants in the city where you live. Do a SWOT analysis as to
Name some
their strengths and weaknesses.
2. Look
nourishment drawn up reviews
from of The
the local, Greenseasonal,
organic, Door on the Internet.
natural, If The Green
wholesome, Door wanted
comforting andto expand,
Please access this content on Connect.
Please access this content on Connect.
MANAGING ETHICALLY EXERCISE Guided Tour

MANAGING ETHICALLY EXERCISE
5 percent better than the going rate of wages in these countries and feels that this is fair enough.
5 percent better than the going rate of wages in these countries and feels that this is fair enough.
Working conditions at suppliers’ factories are no worse than at other factories in those countries.
Management Challenge Exercises present a realistic scenario in which a manager or organization
Working conditions at suppliers’ factories are no worse than at other factories in those countries.
faces some kind of challenge or opportunity and the student plays the role of a management consultant
offering advice and recommending a course of action based on the chapter content.
MANAGEMENT CHALLENGE EXERCISE

MANAGEMENT CHALLENGE EXERCISE
Beyond the Green Door
Beyond the Green Door
disciplines as spirituality, philosophy, human sciences, pastoral counselling, and conflict studies).
disciplines as spirituality, philosophy, human sciences, pastoral counselling, and conflict studies).
OttawaPlus.ca considers The Green Door the “heaven for vegetarians” and an Ottawa institution.53
Management Portfolio Projects present an opportunity for students to follow and analyze an organization
OttawaPlus.ca considers The Green Door the “heaven for vegetarians” and an Ottawa institution.53
1. Name some vegetarian restaurants in the city where you live. Do a SWOT analysis as to
1. Name some vegetarian restaurants in the city where you live. Do a SWOT analysis as to
of their choice over the course of the semester. Each chapter includes an exercise that asks students to evalu-
2. Look up reviews of The Green Door on the Internet. If The Green Door wanted to expand,
ate how the issues discussed in the chapter are dealt with by the organization they are following.
2. Look up reviews of The Green Door on the Internet. If The Green Door wanted to expand,
what kind of business-level strategy should it pursue?
what kind of business-level strategy should it pursue?
MANAGEMENT PORTFOLIO PROJECT

MANAGEMENT PORTFOLIO PROJECT
Answer the following questions about the organization you have chosen to follow:
Answer the following questions about the organization you have chosen to follow:
1. Identify the vision, mission, and major goals of the organization.
1. Identify the vision, mission, and major goals of the organization.
2. What is the corporate-level strategy of the company? First Pass
2. What is the corporate-level strategy of the company?
3. What is the business-level strategy of the company?
3. What is the business-level strategy of the company?
4. Have the strategies supported the vision and mission? How so?
4. Have the strategies supported the vision and mission? How so?
A Video Management Case and questions are included CHAPTER with 4every chapter to help students make the
Managing Planning and Strategy
158
158
connections from chapter concepts to areal-world
5. Has there been applications.
significant shift in strategy Videos
over the past decade? If yes, are available
describe it, and on DVD and online
try to determine why the organization made the changes.
through Connect. 6. How successful is the organization’s planning process?
jon88782_ch04_126-161 158 08/19/15 02:26 PM

VIDEO MANAGEMENT CASE
jon88782_ch04_126-161 158 08/19/15 02:26 PM
Panera Bread Company

Panera Bread Co. combines some of the best aspects of fast-food and sit-down venues.
1. How do Panera Bread’s corporate vision and strategy lead to a competitive advantage in
the restaurant industry? Fifth Pass
2. How does Panera achieve responsiveness to customers?
3. How does its corporate culture help make Panera Bread a high-performing company?
Each chapter also contains a Management Case dealing with current companies and engaging person-
alities, one to two pagesPART
in
MIlength,
N A G Eending
AManagement M E N Twith
C Aquestions
SE for students to consider.
Stirring up Campbell Soup
M A N ASoup
Campbell G Co.,
E MoneEofNtheT oldest
C Aand
S best-known
E global food companies, saw demand for its
major product, condensed soup, plummet by 30 percent as customers switched from high-salt,
Turnaround
processed soupsat Sony? low-fat, low-salt varieties. Campbell’s profits and stock price plunged
to healthier
Sony,
as its the Japanese
condensed electronics
soup businessmaker, used so
collapsed, to be
its renowned for usinginits
directors brought innovation
a new and engineering
CEO, Douglas Conant,
prowess
to help the to troubled
turn out blockbuster
company. Conant new products
decided such it wasasnecessary
the Walkman and Trinitron
to develop TV. Inturnaround
a three-year the 1990s
product
plan to engineers
help the companyat Sony turned
strengthenout anitsaverage
marketofposition
four new product
against ideas every
aggressive day. Why? such
competitors A large as
part of the
General answer
Mills, whose was Sony’s culture,
Progresso called the
Soup division had“Sony Way,”away
attracted which many emphasized communication,
of Campbell’s customers
cooperation,
with its innovativeand harmony
new lines between groupssoup.
of healthier of engineers across the company to foster innovation and
change.
OneEngineers
of Conant’s were given
first considerable
actions freedomthe
was to analyze to pursue their own
competitive ideas, and which
environment the managers
identified of
different
the growth product
of thegroups
organic championed their own
and health-food innovations,
segment of the but
food problems
market arose and the with Sony’s approach.
increasing number
Companies
of other kinds of inconvenience
Korea, Taiwan, andasChina
foods began
a threat to innovatecore
to Campbell’s newsouptechnologies
business.like digital
It also LCD
revealed
screens and flash
three growth memory that(1)
opportunities: madethe Sony’s
growing technologies
market for obsolete.
health Companies
and sportssuch as Apple
drinks, in whichand
Nokia
Campbell came out with
already was thea iPod, smartphones,
competitor with its and tablet(2)
V8 juice; computers
the growingthat better
marketfitfor customer
quality needsbread
than Sony’s “old-generation”
and cookies, in which Campbell products such as
competed withtheitsWalkman.
Pepperidge OneFarmreason why Sony
brand; and (3) experienced
chocolate
A Continuing Case at the end of each part provides students with an opportunity to integrate and syn-
major problems
products, whereresponding
Campbell’stoGodiva these changes
brand had wasenjoyed
that its culture
increasinghadsales
changed for awith its success.
couple of decades.
First Pass
The
top managersemerged
Campbell’s of its many as adivisions
leader hadin the become used to
low-carb, acting as if they and
health-conscious, had control
luxury-foodof a fiefdom,
market
thesize all the concepts and material learned in the previous sections to the management and organiza-
and, protected by the Japanese tradition of lifetime employment, they worked to promote their own
segments.
division’s
With the interests,
analysis not
of their company’s. complete,
the environment This competition had increased
Conant turned his attention Sony’s to bureaucracy
his organization’s and
tional challenges of one particular small business. This running case feature helps keep continuity across
slowed
resources its and
decision making,His
capabilities. making
internal it analysis
much harder for Sony
of Campbell to take aadvantage
identified number ofof its pipeline
major problems. of
the entire text and allows students to focus on problems faced by small businesses.
new
These product
divisions
included innovations.
demanded
staffing levels
more
At the
and
thatsame
more
weretime,
funds to
its research
too high relative towas
create
with manufacturing its soups because of the use of outdated machinery.
becoming enormously
its competitors
CHAPTER
innovative new 4
and high costs
Managing
products.
expensive,
Planning
associated
and
as
Strategy
Sensing
Also, Conant this wasnoted a that
crucial turninghad
Campbell point
a veryin their company’s
conservative history,
culture Sony’speople
in which Japanese seemedtop
managers
to be afraid turned to a risks—something
to take gaijin, or non-Japanese, that was executive to lead their
a real problem in an company.
industryTheir where choice
customerwas
E N D O F PA R T I I : C O N T I N U I N G C AS E
Sir Howard
tastes Stringer,
are always a Welshman,
changing and new whoproducts
headed must Sony’sbeNorth American
developed operations
constantly. andsame
At the had beentime,
instrumental in cuttingacosts
the analysis identified huge and increasing
positive: Campbell the enjoyed
profits of Sony’s
huge U.S. division.
economies of scaleStringer
becausecannotof the
Carrot
speak
enormous Tops:
Japanese,
quantity Building
but ofluckily a him
for
food products Competitive
many Sony’sAdvantage
that itofmakes, top it
and executives
also had aspeakfirst-rateEnglish.
R&D division capable
Asofthe population
While
developing he was grew, so toofood
in command,
exciting new did the competition.
he faced
products. the problemPretty of soon it was apparent
reducing costs in that Japan,Mac’s Milkmany
where and
Shoppers
JapaneseDrug Mart were
companies haveable to offer
a policy ofcustomers a wider selection
lifetime employment. He made of lower-priced
it clear thatproducts
layoffs wouldthan
Mel’s store. Mel had
be forthcoming, as to
Sonyfindmust
a new way to
reduce itsmanage his smallcosts.
high operating business
He hasif it also
was made
going ittoclear
survive.thatHe the
began brainstorming
politicking going onnew strategies.
between Sony’sHe researched
different producttrends in the
groups foodstop
must industry.
and that There might be
managers musta
159
niche for supplying specialty products, he thought, such as organic
prioritize new products, investing only in those that have the highest chance of success, for Sony and gourmet foods, which were
more profitable to sell. He would no longer be competing against
must reduce its huge R&D budget. Indeed, he wanted to make engineering, not management, the giants like Shoppers. He changed
the name
focus onceof again
his store to Carrot
at Sony Tops andthe
and eliminate stocked it withhierarchy
tall, bloated a wide variety
that has of developed
gourmet Canadian
over time—by, food
products.
for example, He began to offer
downsizing fine foods,
corporate local cheeses,
headquarters. fresh bread,
In Stringer’s ownorganic
words, the fruits and vegetables.
culture or “business
Finding
of Sonyahas reliable
beensource
management,of products from local
not making farmersHowever,
products.” and producers
he hascould be a stumbling
to accomplish block
this in08/19/15
Japan,
jon88782_ch04_126-161 159 02:26 PM
towhich
his success, but he did
has a national have known
culture Janet Khanfor its tocollectivist,
head up produce procurement
long-term orientation andandlogistics.
for its distrust of
His or
gaijin plan worked.
overseas Customers
values. And these lovedsame hisvalues
new operate
upscale inside
supermarket
Sony, soconcept.Stringer Thehad to premium
be hard- xxiii
products
headed and he hadpush chosen
Sony to to make
stock the soldbest
quickly.
use ofRealizing
its resources.that he needed
Stringer to capitalize his
demonstrated on hard-headed
his success
toapproach
protect his growing
in 2009, when business, Mel continually
after Sony’s losses increased,expanded the variety
he replaced his of toppremium
management organic team foodsand
and drinks hethe
streamlined sold. Taking advantage
management hierarchy of the popularity
to speed decision of the name Carrot Tops, he began to offer
making.
his own In store-label
his effort products.
to revamp Today, more than Stringer
the company, 80 percent of the products
confronted difficult,Carrot Tops sellscultural
challenging sport
itsdifferences
own label.while Everybringing
producthis adheres to sustainable
cost-cutting expertise environmental
to bear on Sony’s production practices.
deteriorating situation. Sony
Guided Tour
Developing a Business Plan Appendix walks students through the steps of preparing a business plan
and highlights organizational management issues. The appendix can be used with or without business
First Pass
planning software. Developing a Business Plan exercises are found at the end of each chapter and online
through Connect.
PART II Planning
APPENDIX B
Developing a Business Plan
THE BUSINESS PLAN AS AN EXERCISE IN THE

PROCESSES OF MANAGEMENT1
Writing a business plan may never be a more important exercise than in the context of today’s rapidly
changing environment. Even if you are not an entrepreneur and do not wish to develop a new original idea
and bring it to market, developing a business plan is still a valuable exercise in practising the management
processes. It provides a crucial foundation for managing an organization. In this section of the text, we
will treat developing a business plan as an exercise in the management processes of planning, organizing,
leading, and controlling. By doing the exercises at the end of each chapter, you will have the foundation
Appendix A: History of Management Thought
to put together a plan that will help you develop as a manager. The experience you will gain is valid for
profit and not-for-profit organizations as well as new and existing ventures. Writing a business plan gives
Appendix B: Developing a Business Plan
you practice in thinking about managing activities such as:
Appendix C: Career Development
• Developing an idea to solve a problem
• Tapping into opportunities and countering threats in competitive conditions
Appendix D: Operations•Management and Competitive Advantage (on Connect only)
Organizing resources to achieve goals
• Targeting potential customers with promotional opportunities
• Designing an effective organizational structure
Market-Leading Technology
• Securing sources of finance
• Controlling for risk
WHAT IS A BUSINESS PLAN?

Learn without Limits A business plan is a recognized management tool used to document the organization’s objectives and to
set out how these objectives will be achieved within a specific timeframe. It is a written document that
describes who you are, what you intend to accomplish, how you will organize resources to attain your
McGraw-Hill Connect® is an award-winning digital teaching and learning platform that gives students
goals, and how you will overcome the risks involved to provide the anticipated returns. In general, a busi-
ness plan comprises several elements, each giving the reader a piece of the overall picture of the project
the means to better connect with their coursework, with their instructors, and with the important con-
you are undertaking, and provides convincing reasons why you will be successful in this undertaking.
cepts that they will need to know for success now and in the future. With Connect, instructors can take
Managers and entrepreneurs use a business plan to seek support and financing to expand an existing
business or to finance a new venture.
advantage of McGraw-Hill’s trusted content to seamlessly deliver assignments, quizzes and tests online.
McGraw-Hill Connect is the learning platform that continually adapts to each student, delivering pre-
cisely what they need, 162
when they need it, so class time is more engaging and effective. Connect makes
teaching and learning personal, easy, and proven.
jon88782_appB_162-174 162 08/19/15 06:52 PM
Connect Key Features:

SmartBook®
As the first and only adaptive reading experience, SmartBook is changing the way students read and
learn. SmartBook creates a personalized reading experience by highlighting the most important con-
cepts a student needs to learn at that moment in time. As a student engages with SmartBook, the reading
experience continuously adapts by highlighting content based on what each student knows and doesn’t
know. This ensures that he or she is focused on the content needed to close specific knowledge gaps,
while it simultaneously promotes long-term learning.
xxiv
Another random document with
no related content on Scribd:
rinnastansa, myrskyn lailla se raateli hänen sydäntään ja hän
purskahti hillittömään itkuun.
Hiljaa ja äänettömästi kuun säteet poistuivat huoneesta, yön varjot

synkkenivät. Kun aamun ensimäinen arka sarastus karkoitti yön
henget pakosalle, niin sen himmeä valo levisi kuoleman
koskettamille kasvoille ja kokoonlyyhistyneelle vartalolle vuoteen
jalkapuolessa.
XXII.
Antti Hammar istui rautatien vaunussa nurkkaansa vetäytyneenä.

Hänen kasvonsa olivat kalpeat ja suun ympärillä karehteli tuskallinen
piirre. Hän näytti äkkiä monta vuotta vanhenneen.
Hän istui yksin omiin mietteihinsä vaipuneena. Hän ei kuullut

toisten matkustavaisten ääntä, hän tuskin huomasi heidän
läsnäoloansa. Hänen katseensa oli kiintyneenä pimeään
maisemaan, jonka ohi juna kiiti nopeata kulkuansa. Yksinäiset tulet
tuikkivat sieltä-täältä ja ratalyhtyjen valot iskivät nuolen nopeudella
hänen silmiinsä, heti taas kadotakseen pimeyteen.
Antin rinnasta kohosi syvä huokaus.
Lopussa, kaikki oli nyt lopussa. Hän oli joutunut ikäänkuin keskelle
suurta pimeyttä, jonne ei elävä ääni voinut tunkeutua. Kunpa pimeys
olisi ollut vieläkin suurempi, ja hiljaisuus vieläkin raskaampi, niin että
olisi saanut levätä hiljaa ja liikkumatta, levätä, kunnes ei olisi
jaksanut enää herätäkään…
Luminietosten alle hän oli haudannut onnensa ja kaikki toiveensa.

Kun hän yksin astui Hertan ruumiin jäljessä hautausmaalle ja kuuli
rovastin heittävän multaa hänen arkullensa — se oli niin kolkolta ja
kylmältä kumahdellut — niin hän epätoivoissaan oli kokoon
lyyhistynyt. Miksikä kohtalo oli vienyt heidän tiensä yhteen, kun ne
niin pian kuitenkin erkanivat toisistansa? Miksikä se ikäänkuin
ilkkuen oli avannut hänelle oven autuuteen ja sulkenut sen jälleen,
ennenkuin hän oli ehtinyt luoda sinne muutakuin yhden ainoan
silmäyksen? Kuinka sydämetön elämä saattoikaan olla ja kuinka
puolueellinen! Toisille se tarjosi onnea sylin täydeltä, jota vastoin
toisille…
Tupertuneena Antti oli palannut turvakotiin. Tuntikausia hän oli

viettänyt Hertan huoneessa, pidellyt käsissään hänen tavaroitaan,
kostutellut kyyneleillään hänen vaatteitaan. Hän ei voinut ryhtyä
mihinkään, ei ajatella ainoatakaan selvää ajatusta. Hän oli
tuntevinaan ympärillään vielä Hertan läheisyyden, oli kuulevinaan
hänen äänensä ja raskaan hengityksensä. Hänen katseensa etsi
häntä sairasvuoteelta, vaan vaikeroiden, ikäänkuin äkkiä
haavoittuneena, hän kääntyi jälleen pois, kun sieltä tyhjyys häntä
vastaan vain ammotti.
Tyhjää, tyhjää — —
Hän oli jättänyt turvakodin rouva Korhosen haltuun ja lähtenyt

matkalle. Eihän hän voinut sinnekään jäädä, vaikka mitä hän
muualtakaan etsisi! Hänen elämältään oli äkkiä sen tarkoitus
kokonaan kadonnut, hän tunsi itsensä niin turhaksi ja hyödyttömäksi.
Pitkällä hevosmatkalla hänen kiihoittunut mielensä hiukan tyyntyi.

Hän rupesi muistelemaan niitä hetkiä, joita hän Hertan parissa oli
viettänyt, hänen kuvansa astui niin selvänä ja kirkastettuna hänen
sisällisen silmänsä eteen, että hän hetkeksi unohti katkeran
todellisuuden. Hän kertoi mielessään joka sanan, jonka Hertta oli
lausunut ja hänen sanansa, ne astuivat nyt aivan uudessa valossa
hänen eteensä.
Vähitellen hän alkoi käsittää, ettei hänellä sittenkään ollut syytä

valittaa kohtaloaan, joka oli vienyt hänet Hertan läheisyyteen. Olihan
hänellä täysi syy olla kiitollinen lyhyestäkin tutustumisesta
semmoiseen naiseen kuin Hertta oli. Ja elihän hän hänelle vieläkin,
eli hänen ajatuksissansa ja muistoissansa. Ja vasta nyt, kun hän
näennäisesti oli niin etäällä hänestä, tunsi hän täydesti
ymmärtävänsä hänet. Tähän asti oli hänen oma tunteensa vallannut
hänet niin kokonaan, ettei hän voinut omaa itseänsä edemmäksi
nähdä. Hän oli luullut olevansa oikea mies Hertalle opettamaan
rakkautta. Ja kuitenkin, mikä oli hänen rakkautensa ollut, mikä hänen
työnsä kansan hyväksi? Oliko se ollut muuta kuin kullattuun kuoreen
peitettyä itsekkäisyyttä? Kuinka toista sitä vastoin oli ollut hänen
rakkautensa, hänen, joka koko lyhyen elämänsä oli rakkaudelle
omistanut.
Mutta tästä lähin, sen Antti nyt selvästi tunsi, aloittaisi hän uuden
elämän. Hertta oli hänelle tien viitannut, hänen muistonsa antaisi
hänelle myös voimia ja ymmärrystä. Nyt vasta hän aloittaisi oikean
työn kansan hyväksi, ei ainoastaan rakkaudesta Herttaan, vaan
rakkaudesta kansaan ja omaan työhönsä.
Ja yhä uudelleen ja uudelleen hänen korvissaan soivat Hertan

viimeiset sanat:
— Minä menen kohti elämää — me tapaamme toisemme

rakkaudessa.
Hänelle varmaan ennen kuolemaa oli selvinnyt se ongelma, joka

niin useasti oli selvittämättömänä kohonnut Antin eteen.
Ja vaikka hän ei nytkään järjellään voinut sitä käsittää, niin levitti
se sittenkin rauhaa ja sovitusta hänen sydämeensä. Hänen surunsa
ja tuskansa kadotti katkeruutensa. Ja etäisyydessä heloitti hänelle
toivon kipinä, joskin heikkona ja himmeänä.
Antti painautui vaunun nurkkaansa. Humisten juna kiiti eteenpäin

synkässä talviyössä ja kimakat vihellykset vingahtelivat ilmassa.
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Management Portfolio Project 39

What Is the Organizational Environment? 44

The External Organizational Environment 44

The Global Environment 56

Managing the External Environment 62

Challenges for Management in a Global Environment 66

WRAP-UP TO OPENING CASE 74

END OF PART I: CONTINUING CASE—CARROT TOPS: INTRODUCTION 79

Appendix A: History of Management Thought 80

Two Models of Decision Making 93

Steps in the Decision-Making Process 96

Biases in Decision Making 102

Ethics, Social Responsibility, and Decision Making 105

KEY TERMS 119

WRAP-UP TO OPENING CASE 120

MANAGEMENT IN ACTION 122

Why Planning Is Important and Who Does It 128

Five Steps in the Planning Process 136

Analyzing the Environment 139

Developing Strategy 145

Implementing and Evaluating Strategy 151

KEY TERMS 154

WRAP-UP TO OPENING CASE 155

MANAGEMENT CASE: STIRRING UP CAMPBELL SOUP 159

Appendix B: Developing a Business Plan 162

Designing Organizational Structure 178

Grouping Tasks into Jobs: Job Design 181

Allocating Authority and Decision-Making Responsibilities 198

Linking and Coordinating Activities 203

Choosing a Formal or Flexible Overall Structure 205

KEY TERMS 211

WRAP-UP TO OPENING CASE 212

Business Planning Exercise 214

The Importance of Communication in Organizations 219

The Communication Process and Communication Styles 220

Organizational Communication Networks and Channels 229

Advances in Information Technology 234

Social Media 238

SUMMARY AND REVIEW 239

KEY TERMS 240

WRAP-UP TO OPENING CASE 241

MANAGEMENT IN ACTION 241

Management Challenge Exercise 243

HRM Legislation and Managing Diversity 249

Strategic Human Resource Management 253

The Components of HRM 258

Harassment in the Workplace 280

KEY TERMS 284

WRAP-UP TO OPENING CASE 285

END OF PART III: CONTINUING CASE—CARROT TOPS: STRUCTURE 290

Appendix C: Career Development 291

The Nature of Motivation 301

Need Theories of Motivation 304

Process Theories of Motivation 309