Contemporary Management

673 Pages·2017·41.314 MB·English

by  Gareth R. Jones, Jennifer M. George

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Contemporary

Management
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Contemporary

Management
Tenth Edition
Gareth R. Jones
Jennifer M. George
Jesse H. Jones Graduate School of Business
Rice University
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CONTEMPORARY MANAGEMENT, TENTH EDITION
Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2018 by McGraw-Hill
Education. All rights reserved. Printed in the United States of America. Previous editions © 2016, 2014, and
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United States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 LWI 21 20 19 18 17
ISBN 978-1-259-73266-9
MHID 1-259-73266-5
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Library of Congress Cataloging-in-Publication Data
Names: Jones, Gareth R., author. | George, Jennifer M., author.
Title: Contemporary management / Gareth R. Jones, Texas A & M University,
Jennifer M. George, Jesse H. Jones Graduate School of Business, Rice University
Description: Tenth edition. | New York, NY : McGraw-Hill Education, [2018]
Identifiers: LCCN 2016031932 | ISBN 9781259732669 (alk. paper)
Subjects: LCSH: Management.
Classification: LCC HD31 .J597 2018 | DDC 658—dc23 LC record available at https://lccn.loc.
gov/2016031932
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does
not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not
guarantee the accuracy of the information presented at these sites.
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BRIEF CONTENTS
Part One Part Four
Management Organizing and Controlling
Chapter 1 Chapter 10
Managers and Managing 2 Managing Organizational Structure
and Culture 304
Chapter 2
Chapter 11
The Evolution of Management Thought 34
Organizational Control and Change 342
Chapter 3
Chapter 12
Values, Attitudes, Emotions, and Culture:
The Manager as a Person 62 Human Resource Management 376
Part Two Part Five
The Environment of Management Leading Individuals and Groups
Chapter 4 Chapter 13
Ethics and Social Responsibility 96 Motivation and Performance 414
Chapter 5 Chapter 14
Managing Diverse Employees Leadership 450
in a Multicultural Environment 130
Chapter 15
Chapter 6
Effective Groups and Teams 484
Managing in the Global Environment 170
Part Six
Part Three
Managing Critical Organizational
Decision Making, Planning, Processes
and Strategy
Chapter 16
Chapter 7
Promoting Effective Communication 518
Decision Making, Learning, Creativity,
Chapter 17
and Entrepreneurship 202
Managing Conflict, Politics,
Chapter 8
and Negotiation 554
The Manager as a Planner
Chapter 18
and Strategist 236
Using Advanced Information Technology
Chapter 9
to Increase Performance 582
Value Chain Management: Functional
Strategies for Competitive Advantage 272 NAME INDEX NI-1
ORGANIZATION INDEX OI-1
SUBJECT GLINDEX SGI-1
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AUTHORS
Gareth Jones Jennifer George

currently offers pro bono advice on is the Mary Gibbs Jones Professor
solving management problems to of Management and Professor of
nonprofit organizations in Houston, Psychology in the Jesse H. Jones
Texas. He received his BA in Graduate School of Business at
Economics/Psychology and his Rice University. She received her
PhD in Management from the Uni- BA in Psychology/Sociology from
versity of Lancaster, U.K. He was Wesleyan University, her MBA in
formerly Professor of Management Finance from New York University,
in the Graduate School of Business and her PhD in Management and Organizational Behavior
at Texas A&M University and earlier from New York University. Prior to joining the faculty at Rice
held teaching and research appointments at Michigan State University, she was a professor in the Department of
University, the University of Illinois at Urbana-Champaign, Management at Texas A&M University.
and the University of Warwick, UK. Professor George specializes in organizational behavior
He continues to pursue his research interests in strategic and is well known for her research on mood and emotion in
management and organizational theory and his well-known the workplace, their determinants, and their effects on vari-
research that applies transaction cost analysis to explain ous individual and group-level work outcomes. She is the
many forms of strategic and organizational behavior. He also author of many articles in leading peer-reviewed journals
studies the complex and changing relationships between such as the Academy of Management Journal, the Academy
competitive advantage and information technology in of Management Review, the Journal of Applied Psychology,
the 2010s. Organizational Behavior and Human Decision Processes,
He has published many articles in leading journals of Journal of Personality and Social Psychology, Organization
the field, and his research has appeared in the Academy of Science, and Psychological Bulletin. One of her papers won
Management Review, the Journal of International Business the Academy of Management’s Organizational Behavior
Studies, and Human Relations. An article about the role of Division Outstanding Competitive Paper Award, and another
information technology in many aspects of organizational paper won the Human Relations Best Paper Award. She is,
functioning was published in the Journal of Management. or has been, on the editorial review boards of the Journal
One of his articles won the Academy of Management Jour- of Applied Psychology, Academy of Management Journal,
nal’s Best Paper Award, and he is one of the most cited Academy of Management Review, Administrative Science
authors in the Academy of Management Review. He is, Quarterly, Journal of Management, Organizational Behavior
or has served, on the editorial boards of the Academy of and Human Decision Processes, Organization Science, Inter-
Management Review, the Journal of Management, and national Journal of Selection and Assessment, and Journal
Management Inquiry. of Managerial Issues; was a consulting editor for the Jour-
Gareth Jones has used his academic knowledge to craft nal of Organizational Behavior; was a member of the SlOP
leading textbooks in management and three other major Organizational Frontiers Series editorial board; and was an
areas in the management discipline: organizational behavior, associate editor of the Journal of Applied Psychology. She is
organizational theory, and strategic management. His books a fellow in the Academy of Management, the American Psy-
are widely recognized for their innovative, contemporary chological Association, the American Psychological Society,
content and for the clarity with which they communicate and the Society for Industrial and Organizational Psychology
complex, real-world issues to students. and a member of the Society for Organizational Behavior.
She also has coauthored a textbook titled Understanding
and Managing Organizational Behavior.
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PREFACE
Since the ninth edition of Contemporary Management the 2010s. In most companies, managers at all levels are
was published, our book has strengthened its position as playing catch-up as they work toward meeting these chal-
a leader in the management market. This tells us that we lenges by implementing new and improved management
continue to meet the expectations of our existing users and techniques and practices. Today relatively small differ-
attract many new users to our book. It is clear that most ences in performance between companies, such as in the
management instructors share with us a concern for the speed at which they can bring new products or services
need to continuously introduce new and emerging issues to market or in how they motivate their employees to
into the text and its examples to ensure that cutting-edge find ways to improve performance or reduce costs, can
issues and new developments in the field of contemporary combine to give one company a significant competitive
management are addressed. advantage over another. Managers and companies that
In the new tenth edition of Contemporary Manage- use proven management techniques and practices in their
ment, we continue with our mission to provide students decision making and actions increase their effectiveness
the most current and up-to-date account of the changes over time. Companies and managers that are slower to
taking place in the world of business management. The implement new management techniques and practices
fast-changing domestic and global environment contin- find themselves at a growing competitive disadvantage
ues to pressure organizations and their managers to find that makes it even more difficult to catch up. Thus many
new and improved ways to respond to changing events in industries have widening gaps between weaker competi-
order to maintain and increase their performance. More tors and the most successful companies, whose perfor-
than ever, events around the globe, rapid changes in tech- mance reaches new heights because their managers have
nology, and economic pressures and challenges show made better decisions about how to use a company’s
how fast the success and even survival of companies can resources in the most efficient and effective ways. In the
change. For example, the increasing complexity of the rapidly changing and dynamic environment facing orga-
exchanges between global companies has profoundly nizations today, effective managers recognize the vital
affected the management of both large and small orga- role that creativity and innovation play in successfully
nizations. Today there is increased pressure on manag- anticipating and responding to these challenges as well as
ers to find new management practices that can increase seizing the potential opportunities that they bring while
their companies’ efficiency and effectiveness and abil- mitigating the threats.
ity to survive and prosper in an increasingly competitive The issues facing managers continue to mount as
global environment. changes in the global environment, such as increasing
In revising our book, we continue our focus on mak- global outsourcing and rising commodity prices, impact
ing our text relevant and interesting to today’s students— organizations large and small. In the tenth edition, we dis-
something that we know from instructor and student feed- cuss recent developments in global outsourcing and exam-
back engages them and encourages them to make the effort ine the many managerial issues that must be addressed
necessary to assimilate the text material. We continue to when millions of functional jobs in information technol-
mirror the changes taking place in management practices ogy, customer service, and manufacturing are sent to coun-
by incorporating recent developments in management tries overseas. Similarly, increasing globalization means
theory and research into our text and by providing vivid, managers must respond to major differences in the legal
current examples of how managers of companies large and rules and regulations and ethical values and norms that
small have responded to the changes taking place. Indeed, prevail in countries around the globe. Many companies and
we have incorporated many new and contemporary exam- their managers, for example, have been accused of ignor-
ples in the new edition illustrating how founders, manag- ing “sweatshop” working conditions under which the prod-
ers, and employees in a variety of types of organizations ucts they sell are manufactured abroad.
respond to the opportunities and challenges they face. Moreover, the revolution in information technology
These examples drive home to students how essential it is (IT) continues to transform how managers make decisions
for them to develop a rich understanding of management across all levels of a company’s hierarchy and across all
theory and research and the ability to apply what they have its functions and global divisions. The tenth edition of
learned in organizational settings. our book continues to address these ongoing challenges
The number and complexity of the strategic, organi- as IT continues to evolve rapidly, especially in the area of
zational, and human resource challenges facing managers mobile digital devices such as smartphones and tablets that
and all employees have continued to increase throughout can access ever more sophisticated software applications
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that increase their functionality. Other major challenges contains an updated discussion of insourcing—bringing
we continue to expand on in the new edition include the back jobs to the United States from other countries—and
impact of the steadily increasing diversity of the workforce how this strategy is working well for companies looking
on companies, and how this increasing diversity makes to increase productivity and keep labor costs under con-
it imperative for managers to understand how and why trol. In addition, coverage of ethics and social responsi-
people differ so they can effectively manage and reap the bility has been updated with examples of how companies
many benefits of a diverse workforce. Similarly, across all are acknowledging the competitive advantage of a diverse
functions and levels, managers and employees must con- workforce. New examples of global crisis management
tinuously search out ways to “work smarter” and increase have been added that examine the social and economic
performance. Using new IT to improve all aspects of an impact of a series of recent earthquakes in Ecuador, which
organization’s operations to boost efficiency and customer continue to impact the country’s infrastructure and all-
responsiveness is a vital part of this process. So too is important tourism industry.
the continuing need to innovate and improve the quality Chapter 2 opens with the story of how General Elec-
of goods and services, and the ways they are produced, tric has drastically changed its corporate portfolio of busi-
to allow an organization to compete effectively. We have nesses in an effort to simplify its strategies and re-invent
significantly revised the tenth edition of Contemporary itself as a “digital industrial company.” The chapter contin-
Management to address these challenges to managers and ues to cover traditional management theories and how they
their organizations. have been modified to address changing work conditions
in the global environment today.
Major Content Changes
Chapter 3 updates material about the manager as a per-
Once again, encouraged by the increasing number of son and the way personal characteristics of managers (and
instructors and students who use each new edition of our all members of an organization) influence organizational
book, and based on the reactions and suggestions of both culture and effectiveness. The chapter opens with a new
users and reviewers, we have revised and updated our book “Manager’s Challenge” on Kevin Plank’s determination
in the following ways. First, just as we have included per- to propel Under Armour to continued success. There are
tinent new research concepts in each chapter, so too have also new discussions about recent levels of job satisfaction
we been careful to eliminate outdated or marginal man- among U.S. workers, how top managers in Silicon Valley
agement concepts. As usual, our goal has been to stream- are high on conscientiousness and openness to experience,
line our presentation and keep the focus on the changes and a new “Manager as a Person” feature on Jess Lee of
that have been taking place that have the most impact on Polyvore, a successful e-commerce company.
managers and organizations. Our goal is to avoid present- Chapter 4, “Ethics and Social Responsibility,” pro-
ing students with excessive content in too many and too vides updated material about the unethical and illegal
long chapters just for the sake of including outmoded man- behaviors of managers from various industries. We have
agement theory. In today’s world of instant sound bites, updated our coverage of the many issues involved in acting
videos, text messaging, and tweets, providing the best and managing ethically, including an opening case about
content is much more important than providing excessive TOMS and how the company added the elimination of bul-
content—especially when some of our students are bur- lying to its corporate social agenda. We also discuss new
dened by time pressures stemming from the need to work issues in ethics and ethical dilemmas and provide concep-
long hours at paying jobs and meeting personal commit- tual tools to help students understand better how to make
ments and obligations. ethical decisions. We highlight issues related to worker
Second, we have added significant new management safety, environmental responsibility, and regulations to
content and have reinforced its importance by using many protect consumer safety. Finally, we have updated coverage
new relevant small and large company examples that are of the ethics of nonprofits and their managers as well as
described in the chapter opening cases titled “A Man- how formerly ethical companies began to behave in unethi-
ager’s Challenge”; in the many boxed examples featur- cal ways in order to boost their returns to shareholders. The
ing managers and employees in companies both large and ethical exercise at the end of every chapter continues to be
small in each chapter; and in the “Case in the News” clos- a popular feature of our book.
ing cases. Chapter 5, “Managing Diverse Employees in a Mul-
Chapter 1, for example, contains new and updated ticultural Environment,” focuses on the effective manage-
material on the way changes in IT and the products and ment of the many faces of diversity in organizations for the
services that result from it are affecting competition good of all stakeholders. A new “Manager’s Challenge”
among companies. The chapter features a new opening highlights the strategies Novartis and Sodexo use to effec-
case about Buzzfeed and the way its CEO and managers tively manage diversity in the workplace. We have updated
orchestrate the sharing of original content and collect- the text material and examples for such issues as age, gen-
ing of big data across multiple global platforms. It also der, race and ethnicity, disabilities, and sexual orientation.
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A new text discussion focuses on the EEOC’s recent ruling which focuses on how companies can use vertical integra-
declaring workplace discrimination illegal based on sexual tion and related diversification to increase long-term prof-
orientation. We also discuss ways to effectively manage itability. A new opening case describes the challenges GM
diversity and include an updated discussion of women’s CEO Mary Barra faced when she took over the top job
earnings in comparison to men’s earnings. Methods to pre- at the global automaker. Her strong commitment to “own-
vent discrimination and sexual harassment in an era when ing” the company’s ignition switch recall and maintaining
many companies face discrimination lawsuits involving effective corporate strategies has helped GM get back on
hundreds of millions of dollars are also considered. The track. The chapter also includes updated examples of busi-
chapter provides expanded coverage of the way managers ness-level strategies that focus on low-cost strategies in a
can take advantage of the increasing diversity of the popu- world in which prices continue to be under pressure due to
lation and workforce to reap the performance benefits that increased global competition. In Chapter 9 we continue to
stem from diversity while ensuring that all employees are explore how companies can develop new functional-level
treated fairly. strategies to improve efficiency, quality, innovation, and
Chapter 6 contains an integrated account of forces in responsiveness to customers. For example, in addition to
both the domestic and global environments. It has also been coverage of TQM, including the Six Sigma approach, we
revised and updated to reflect the way increasing global include a discussion of the importance of customer rela-
competition and free trade have changed the global value tionship management (CRM) and the need to attract and
creation process. The chapter uses updated examples from retain customers during challenging economic times. We
the fashion industry, electronics industry, and automotive also describe how airlines continue to develop new func-
industry to illustrate these issues. It also has an updated tional strategies concerning the most efficient way to
discussion about the challenges faced by expats in mov- board passengers.
ing abroad, as well as strategies utilized by companies in Chapters 10 and 11 offer updated coverage of orga-
an effort to become key suppliers to emerging global busi- nizational structure and control and discuss how com-
nesses. Finally, it continues to update the changing dynam- panies have confronted the need to reorganize their
ics of global competition, including how newly dominant hierarchies and ways of doing business as the environ-
companies have developed successful e-commerce strate- ment changes and competition increases. In Chapter 10,
gies to customize products to the tastes of consumers in for example, we discuss how online eyewear company
other parts of the world. Warby Parker has structured the relatively young orga-
Chapter 7, “Decision Making, Learning, Creativity, nization in an effort to maximize customer service and
and Entrepreneurship,” discusses these vital processes support, as well as to keep the company’s culture fresh
in organizations and their implications for managers and and energized. We also continue to highlight examples
all employees. The chapter opens with a new “Manager’s that show how companies are designing global organiza-
Challenge” on how sound decision making at FUJIFILM tional structure and culture to improve performance. In
Holdings has helped the company expand its business Chapter 11 we continue this theme by looking at how
portfolio. We also include a discussion of the position of companies are changing their control systems to increase
chief sustainability officer and examine how managers efficiency and quality, for example. More generally, how
can make decisions to help ensure decisions contribute to to use control systems to increase quality is a theme
sustainability. Also, we continue our discussion of social throughout the chapter.
entrepreneurs who seek creative ways to address social We have updated and expanded our treatment of the
problems to improve well-being by, for example, reduc- many ways in which managers can effectively manage
ing poverty, increasing literacy, and protecting the natural and lead employees in their companies. For example,
environment. More generally, we discuss how managers in Chapter 12 opens with a new “Manager’s Challenge” that
organizations large and small can improve decision mak- highlights how treating employees well has led to excep-
ing, learning, and creativity in their organizations. For tional customer service at ACUITY. The chapter also
example, we discuss ways of curbing overconfidence in discusses best practices to recruit and attract outstanding
decision making and how to use contests and rewards to employees, the importance of training and development,
encourage creativity and give examples of companies that pay differentials, and family-friendly benefit programs.
use them. In addition, there is treatment of the use of background
As in the last edition, Chapter 8 focuses on corporate-, checks by employers, the use of forced ranking systems in
global-, and business-level strategies, and Chapter 9 organizations, and issues concerning excessive CEO pay
discusses functional strategies for managing value chain and pay comparisons between CEOs and average work-
activities. These two chapters make clear the links between ers, and updated statistics on U.S. union membership.
the different levels of strategy while maintaining a strong Chapter 13 continues coverage of prosocially motivated
focus on managing operations and processes. Chapter 8 behavior, including examples of people who are motivated
continues the discussion of planning and levels of strategy, to benefit others. It also discusses the many steps managers
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