Exploring

Management
Sixth Edition

JOHN R. SCHERMERHORN, JR.

Ohio University

DANIEL G. B ACHRACH
University of Alabama
 Brief Contents
Managers and Management Leading
1 Managers and the Management Process: 11 Leadership: A Leader Lives in Each
Everyone Becomes a Manager Someday. 1 of Us. 198

2 Management Learning: Great Things Grow 12 Individual Behavior: There’s Beauty in

from Strong Foundations. 22 Individual Differences. 219

3 Ethics and Social Responsibility: Character 13 Motivation: Respect Unlocks Human

Doesn’t Stay Home When We Go to Work. 42 Potential. 237

14 Teams and Teamwork: Two Heads Really

Planning and Controlling Can Be Better Than One. 258
4 Managers as Decision Makers: There Is No
Substitute for a Good Decision. 63 15 Communication: Listening Is the Key to
Understanding. 282
5 Plans and Planning Techniques: Get There
Faster with Objectives. 82
Environment
6 Controls and Control Systems: What Gets 16 Diversity and Global Cultures: There Are
Measured Happens. 101 New Faces in the Neighborhood. 301

7 Strategy and Strategic Management: Insight 17 Globalization and International

and Hard Work Deliver Results. 119 Business: Going Global Isn’t Just for
Travelers. 318
Organizing 18 Entrepreneurship and Small Business:
8 Organization Structure and Design: It’s All Taking Risks Can Make Dreams Come
About Working Together. 136 True. 335
9 Organizational Cultures, Innovation,
and Change: Adaptability and Values SKILL-BUILDING PORTFOLIO / CASES FOR
Set the Tone. 157 CRITICAL THINKING / CASE REFERENCES /
TEST PREP ANSWERS / GLOSSARY /
10 Human Resource Management: Nurturing ENDNOTES / NAME INDEX /ORGANIZATION
Turns Potential into Performance. 177 INDEX / SUBJECT INDEX

xi
Contents
McGregor Believed Managerial Assumptions Create
1 Managers and the Management Self-Fulfilling Prophecies. 31
Process 1 Argyris Suggests That Workers Treated As Adults Will Be
More Productive. 31
1.1 What Does It Mean To Be a Manager? 2 2.3 What Are the Foundations of Modern Management
Organizations Have Different Types and Levels Thinking? 34
of Managers. 2 Managers Use Quantitative Analysis and Tools to Solve
Accountability Is a Foundation of Managerial Complex Problems. 34
Performance. 4 Organizations Are Open Systems That Interact with
Effective Managers Help Others Achieve High Their Environments. 35
Performance and Satisfaction. 4 Contingency Thinking Holds That There Is No One
Managers Are Coaches, Coordinators, and Best Way to Manage. 36
Supporters. 4 Quality Management Focuses Attention on
Continuous Improvement. 37
1.2 What Do Managers Do, and What Skills Evidence-Based Management Seeks Hard Facts About
Do They Use? 7 What Really Works. 38
Managers Plan, Organize, Lead, and Control. 7
Managers Perform Informational, Interpersonal, and
Decisional Roles. 9 3 Ethics and Social Responsibility 42
Managers Use Networking and Social Capital to
Pursue Action Agendas. 9 3.1 How Do Ethics and Ethical Behavior Play Out
Managers Use Technical, Human, and Conceptual Skills. 10 in the Workplace? 43
Managers Should Learn from Experience. 12
Ethical Behavior Is Values Driven. 43
1.3 What Are Some Important Career Issues? 14 Views Differ on What Constitutes Moral Behavior. 44
Globalization and Job Migration Have Changed What Is Considered Ethical Can Vary Across Cultures. 46
the World of Work. 14 Ethical Dilemmas Are Tests of Personal Ethics
Failures of Ethics and Corporate Governance and Values. 47
are Troublesome. 15 People Have a Tendency to Rationalize Unethical
Respecting Diversity and Eliminating Discrimination Behavior. 48
Are Top Social Priorities. 16 3.2 How Can We Maintain High Standards of Ethical
Talent Is a “Must Have” in a Free-Agent and
On-Demand Economy. 16
Conduct? 50
Self-Management Skills are Essential for Career Success. 17 Personal Character and Moral Development Influence
Personal Career Readiness Must Be Developed Ethical Decision Making. 50
and Maintained. 17 Managers as Positive Role Models Can Inspire Ethical
Conduct. 51
Training in Ethical Decision Making Can Improve Ethical
2 Management Learning 22 Conduct. 52
Protection of Whistleblowers Can Encourage Ethical
Conduct. 52
2.1 What Are the Lessons of the Classical Management Formal Codes of Ethics Set Standards for Ethical
Approaches? 23 Conduct. 53
Taylor’s Scientific Management Sought Efficiency
in Job Performance. 23 3.3 What Should We Know About the Social
Weber’s Bureaucratic Organization Is Supposed to Be Responsibilities of Organizations? 55
Efficient and Fair. 25 Social Responsibility is an Organization’s
Fayol’s Administrative Principles Describe Managerial Obligation to Best Serve Society. 55
Duties and Practices. 26 Perspectives Differ on the Importance of
Corporate Social Responsibility. 56
2.2 What Are the Contributions of the Behavioral Shared Value Integrates Corporate Social Responsibility
Management Approaches? 28 into Mission and Strategy. 56
Follett Viewed Organizations As Communities of Social Businesses and Social Entrepreneurs are
Cooperative Action. 28 Driven by Social Responsibility. 57
The Hawthorne Studies Focused Attention on the Social Responsibility Audits Measure the Social
Human Side of Organizations. 29 Performance of Organizations. 57
Maslow Described a Hierarchy of Human Needs with Sustainability Is an Important Social Responsibility
Self-Actualization at the Top. 30 Goal. 58
 CONT ENT xiii

5.3 What Are Some Useful Planning

4 Managers as Decision Makers 63
Tools and Techniques? 93
Forecasting Tries to Predict the Future. 93
4.1 How Do Managers Use Information to Solve
Contingency Planning Creates Backup Plans for When
Problems? 64 Things Go Wrong. 93
Managers Use Technological, Informational, and Analytical Scenario Planning Crafts Plans for Alternative
Competencies to Solve Problems. 64 Future Conditions. 94
Managers Deal with Problems Posing Threats and Benchmarking Identifies Best Practices Used by
Offering Opportunities. 65 Others. 94
Managers Can Be Problem Avoiders, Problem Solvers, Goal Setting Aligns Plans and Activities. 95
or Problem Seekers. 65 Goals Can Have Downsides and Must Be
Managers Make Programmed and Nonprogrammed Well Managed. 96
Decisions. 66 Participatory Planning Builds Implementation
Managers Use Both Systematic and Intuitive Capacities. 97
Thinking. 66
Managers Use Different Cognitive Styles to Process
Information for Decision Making. 67 6 Controls and Control Systems 101
Managers Make Decisions under Conditions of Certainty,
Risk, and Uncertainty. 67
6.1 How and Why Do Managers Use the Control
4.2 What Are Five Steps in the Decision-Making Process? 102
Process? 70 Controlling is One of the Four Functions of
Step 1—Identify and Define the Problem. 70 Management. 102
Step 2—Generate and Evaluate Alternative Step 1—Control Begins with Objectives and
Courses of Action. 71 Standards. 103
Step 3—Decide on a Preferred Course of Action. 71 Step 2—Control Measures Actual Performance. 103
Step 4—Take Action to Implement the Decision. 72 Step 3—Control Compares Results with Objectives
Step 5—Evaluate Results. 73 and Standards. 104
Ethical Reasoning Is Important at All Steps in Decision Step 4—Control Takes Corrective Action as Needed. 104
Making. 73
6.2 What Types of Controls Are Used by
4.3 What Are Current Issues in Managerial Decision Managers? 106
Making? 75 Managers Use Feedforward, Concurrent,
Creativity Drives Better Decision Making. 75 and Feedback Controls. 106
Group Decision Making Has Advantages Managers Use Both Internal and External Controls. 107
and Disadvantages. 76 Managing by Objectives Helps Integrate Planning
Judgmental Heuristics and Other Biases May and Controlling. 108
Cause Decision-Making Errors. 76
6.3 What Are Some Useful Control Tools
Managers Must Prepare for Crisis Decision
Making. 78 and Techniques? 111
Quality Control is a Foundation of Management. 111
Gantt Charts and CPM/PERT Improve Project
5 Plans and Planning Management and Control. 112
Inventory Controls Help Save Costs. 113
Techniques 82 Breakeven Analysis Shows where Revenues will Equal
Costs. 113
5.1 How and Why Do Managers Use the Planning Financial Ratios Measure Key Areas of Financial
Process? 83 Performance. 114
Planning Is One of the Four Functions of Balanced Scorecards Keep the Focus on Strategic
Management. 83 Control. 115
Planning Sets Objectives and Identifies How to
Achieve Them. 84
Planning Improves Focus and Flexibility. 84 7 Strategy and Strategic
Planning Improves Action Orientation. 85 Management 119
Planning Improves Coordination and Control. 85
Planning Improves Time Management. 86
7.1 What Types of Strategies Are Used
5.2 What Types of Plans Do Managers Use? 89 by Organizations? 120
Managers Use Short-Range and Long-Range Plans. 89 Strategy Is a Comprehensive Plan for Achieving
Managers Use Strategic and Operational Plans. 89 Competitive Advantage. 120
Organizational Policies and Procedures Are Plans. 90 Organizations Use Corporate, Business,
Budgets Are Plans That Commit Resources to and Functional Strategies. 121
Activities. 90 Growth Strategies Focus on Expansion. 122
xiv CO N T E N TS

Restructuring and Divestiture Strategies

Focus on Consolidation. 123 9 Organizational Cultures,
Global Strategies Focus on International Innovation, and Change 157
Business Opportunities. 123
Cooperation Strategies Focus on Alliances and
9.1 What Is the Nature of Organizational Culture? 158
Partnerships. 123
E-Business Strategies Use the Web Organizational Culture Is the Personality of the
and Apps for Business Success. 124 Organization. 158
Organizational Culture Shapes Behavior and Influences
7.2 How Do Managers Formulate Performance. 159
and Implement Strategies? 127 Not All Organizational Cultures Are Alike. 159
The Strategic Management Process Formulates The Observable Culture Is What You See and Hear As an
and Implements Strategies. 127 Employee or Customer. 160
SWOT Analysis Identifies Strengths, Weaknesses, The Core Culture Is Found in the Underlying Values of the
Opportunities, and Threats. 128 Organization. 161
Porter’s Five Forces Model Analyzes Industry Value-Based Management Supports a Strong
Attractiveness. 129 Organizational Culture. 162
Porter’s Competitive Strategies Model Identifies
Business or Product Strategies. 129 9.2 How Do Organizations Support and Achieve
Portfolio Planning Examines Strategies Innovation? 164
Across Multiple Businesses or Products. 131 Organizations Pursue Process, Product, and Business
Strategic Leadership Ensures Strategy Implementation Model Innovations. 164
and Control. 131 Green Innovations Advance the Goals of Sustainability. 164
Social Innovations Seek Solutions to Important Societal
Problems. 165
8 Organization Structure and Commercializing Innovation Turns New Ideas into Salable
Products. 165
Design 136 Disruptive Innovation Uses New Technologies to Displace
Existing Practices. 166
8.1 What Is Organizing as a Managerial Innovative Organizations Share Many Common
Responsibility? 137 Characteristics. 166
Organizing Is One of the Management 9.3 How Do Managers Lead the Processes of
Functions. 137 Organizational Change? 168
Organization Charts Describe Formal Structures
Organizations and Teams Need Change Leaders. 168
of Organizations. 138
Organizational Change Can Be Transformational or
Organizations Also Have Informal Structures. 138
Incremental. 168
Informal Structures Have Good Points and Bad
Three Phases of Planned Change Are Unfreezing,
Points. 139
Changing, and Refreezing. 169
8.2 What Are the Most Common Organization Times of Complexity Require Improvising in the Change
Structures? 141 Process. 170
Managers Use Force-Coercion, Rational Persuasion, and
Functional Structures Group Together People Using
Shared Power Change Strategies. 171
Similar Skills. 141
Change Leaders Identify and Deal Positively with
Divisional Structures Group Together People by Products,
Resistance to Change. 172
Customers, or Locations. 142
Matrix Structures Combine the Functional and Divisional
Structures. 144
Team Structures Make Extensive Use of Permanent and
10 Human Resource Management 177
Temporary Teams. 145
Network Structures Make Extensive Use of Strategic 10.1 What Are the Purpose and Legal Context of Human
Alliances and Outsourcing. 145 Resource Management? 178
Human Resource Management Attracts, Develops,
8.3 What Are the Trends in Organizational and Maintains a Talented Workforce. 178
Design? 149 Strategic Human Resource Management Aligns Human
Organizations Are Becoming Flatter and Using Fewer Capital with Organizational Strategies. 179
Levels of Management. 149 Laws Protect Against Employment Discrimination. 179
Organizations Are Increasing Decentralization. 149 Laws Can’t Guarantee That Employment Discrimination
Organizations Are Increasing Delegation Will Never Happen. 180
and Empowerment. 150
Organizations Are Becoming More Horizontal 10.2 What Are the Essentials of Human Resource
and Adaptive. 151 Management? 183
Organizations Are Using More Alternative Work Psychological Contracts Set the Exchange of Value
Schedules. 152 Between Individuals and Organizations. 183
 CONT ENTS xv

Recruitment Attracts Qualified Job Applicants. 184

Selection Makes Decisions to Hire Qualified Job 12 Individual Behavior 219
Applicants. 185
Onboarding Introduces New Hires to the 12.1 How Do Perceptions Influence Individual
Organization. 186 Behavior? 220
Training Develops Employee Skills and Capabilities. 186 Perception Filters Information Received
Performance Reviews Assess Work From Our Environment. 220
Accomplishments. 187 Perceptual Distortions Can Hide
Career Development Provides for Retention and Career Individual Differences. 220
Paths. 188 Perception Can Cause Attribution Errors. 221
Impression Management Influences
10.3 What Are Current Issues in Human Resource
How Others Perceive Us. 222
Management? 190
Demands Are Increasing for Job Flexibility and Work–Life 12.2 How Do Personalities Influence Individual
Balance. 190 Behavior? 225
More People Are Working as Independent Contractors and The Big Five Personality Traits Describe
Contingency Workers. 190 Important Individual Differences. 225
Compensation Plans Influence Recruitment and The Myers-Briggs Type Indicator Is a Popular Approach
Retention. 191 to Personality Assessment. 226
Fringe Benefits Are an Important Part of Personalities Vary on Personal Conception
Compensation. 192 Traits. 226
Labor Relations and Collective Bargaining Are Closely People with Type A Personalities Tend
Governed by Law. 193 to Stress Themselves. 227
Stress Has Consequences for Performance and
11 Leadership 198 Health. 228

12.3 How Do Attitudes, Emotions, and Moods Influence

11.1 What Are the Foundations of Effective Individual Behavior? 230
Leadership? 199 Attitudes Predispose People to Act
Leadership is One of The Four Functions of in Certain Ways. 230
Management. 199 Job Satisfaction Is a Positive Attitude Toward One’s Job
Leaders Use Power to Achieve Influence. 200 and Work Experiences. 231
Leaders Bring Vision to Teams and Organizations 201 Job Satisfaction Influences Work Behaviors. 231
Leaders Display Different Traits in the Quest for Job Satisfaction Has a Complex Relationship
Effectiveness. 202 with Job Performance. 232
Leaders Display Different Styles in the Quest for Emotions and Moods Are States of Mind
Effectiveness. 202 that Influence Behavior. 232
11.2 What Can We Learn from the Contingency
Leadership Theories? 205
Fiedler’s Contingency Model Matches Leadership Styles
13 Motivation 237
with Situational Differences. 205
The Hersey-Blanchard Situational Model Matches 13.1 How Do Human Needs Influence Motivation
Leadership Styles with the Maturity of Followers. 206 to Work? 238
House’s Path-Goal Theory Matches Leadership Styles Maslow Describes a Hierarchy of Needs Topped
with Task and Follower Characteristics. 207 by Self-Actualization. 238
Leader–Member Exchange Theory Describes How Leaders Alderfer’s ERG Theory Discusses Existence, Relatedness,
Treat In-Group and Out-Group Followers. 208 and Growth Needs. 239
The Vroom-Jago Model Describes How Leaders Use McClelland Identifies Acquired Needs for Achievement,
Alternative Decision-Making Methods. 208 Power, and Affiliation. 240
Herzberg’s Two-Factor Theory Focuses
11.3 What Are Current Issues and Directions in on Higher-Order Need Satisfaction. 241
Leadership Development? 211 The Core Characteristics Model Integrates
Transformational Leadership Inspires Enthusiasm Motivation and Job Design. 242
and Great Performance. 211
Emotionally Intelligent Leadership Handles 13.2 How Do Thoughts and Decisions Affect Motivation
Emotions and Relationships Well. 212 to Work? 245
Interactive Leadership Emphasizes Communication, Equity Theory Explains How Social Comparisons Motivate
Listening, and Participation. 213 Individual Behavior. 245
Moral Leadership Builds Trust Through Personal Expectancy Theory Focuses on the Decision to Work
Integrity. 214 Hard, or Not. 246
Servant Leadership Is Follower Centered and Goal-Setting Theory Shows that the Right Goals
Empowering. 215 can be Motivating. 248
xvi CO N T E N TS

13.3 How Does Reinforcement Influence Motivation Communication Is Effective When the Receiver
to Work? 251 Understands the Sender’s Messages. 284
Communication Is Efficient When it Is Delivered
Operant Conditioning Influences Behavior
at Low Cost to the Sender. 285
by Controlling its Consequences. 251
Communication Is Persuasive When the Receiver
Operant Conditioning Uses Four
Acts as the Sender Intends. 285
Reinforcement Strategies 252
Positive Reinforcement Connects Desirable 15.2 What Are the Major Barriers to Effective
Behavior with Pleasant Consequences. 253
Communication? 288
Punishment Connects Undesirable Behavior with
Unpleasant Consequences. 254 Poor Use of Channels Makes It Difficult
to Communicate Effectively. 288
Poor Written or Oral Expression Makes It Difficult
14 Teams and Teamwork 258 to Communicate Effectively. 289
Failure to Spot Nonverbal Signals Makes It Difficult
14.1 Why Is It Important to Understand Teams to Communicate Effectively. 290
Information Filtering Makes It Difficult
and Teamwork? 259 to Communicate Effectively. 290
Teams Offer Synergy and Other Benefits. 259 Overloads and Distractions Make It Difficult
Teams Can Suffer from Performance Problems. 260 to Communicate Effectively. 291
Organizations Are Networks of Formal Teams
and Informal Groups. 260 15.3 How Can We Improve Communication With
Organizations Use Committees, Task Forces, People at Work? 293
and Cross-Functional Teams. 261 Active Listening Helps Others to Say What They
Virtual Teams Use Technology to Bridge Really Mean. 293
Distances. 262 Constructive Feedback Is Specific, Timely,
Self-Managing Teams Are a Form of Job and Relevant. 294
Enrichment for Groups. 263 Office Designs Can Encourage Interaction and
14.2 What Are the Building Blocks of Successful Communication. 295
Transparency and Openness Build Trust in
Teamwork? 265 Communication. 295
Teams Need the Right Members to Be Effective. 266 Appropriate Online Behavior Is
Teams Need the Right Setting and Size to be a Communication Essential. 296
Effective. 267 Sensitivity and Etiquette Improve
Teams Need the Right Processes to be Effective. 267 Cross-Cultural Communication. 296
Teams Move Through Different Stages
of Development. 268
Team Performance Is Influenced By Norms. 270
Team Performance is Influenced by 16 Diversity and Global Cultures 301
Cohesiveness. 270
Team Performance is Influenced by Task 16.1 What Should We Know About Diversity in the
and Maintenance Activities. 271 Workplace? 302
Team Performance is Influenced Inclusion Drives the Business Case for Diversity. 302
by Communication Networks. 272 Multicultural Organizations Value and Support
14.3 How Can Managers Create and Lead Diversity. 303
Diversity Bias Exists in Many Situations. 303
High-Performance Teams? 275
Organizational Subcultures Create Diversity
Team Building Can Improve Teamwork Challenges. 305
and Performance. 275 Managing Diversity Is a Leadership Priority. 306
Teams Benefit When They Use the Right
Decision Methods. 275 16.2 What Should We Know About Diversity Among
Teams Suffer When Groupthink Leads to Bad Global Cultures? 308
Decisions. 276 Culture Shock Is Discomfort in Cross-Cultural
Teams Benefit When Conflicts Are Well Situations. 308
Managed. 277 Cultural Intelligence Is an Ability to Adapt
to Different Cultures. 308
15 Communication 282 The “Silent” Languages of Cultures Include
Context, Time, and Space. 309
Cultural Tightness and Looseness Varies Around the
15.1 What Is Communication, and When Is It World. 311
Effective? 283 Hofstede’s Model Identifies Value Differences
Communication Helps to Build Social Capital. 283 Among National Cultures. 311
Communication Is a Process of Sending and Receiving Intercultural Competencies Are Essential Career
Messages With Meanings Attached. 283 Skills. 313
 CONT ENTS xvii

17 Globalization and International 18 Entrepreneurship and Small

Business 318 Business 335

17.1 How Does Globalization Affect International 18.1 What Is Entrepreneurship, and Who Are
Business? 319 Entrepreneurs? 336
Globalization Increases Interdependence Entrepreneurs Are Risk Takers Who Spot and Pursue
of the World’s Economies. 320 Opportunities. 336
Globalization Creates International Business Entrepreneurs Often Share Similar Characteristics and
Opportunities. 321 Backgrounds. 338
Global Sourcing Is a Common International Business Entrepreneurs Often Share Similar Personality Traits. 338
Activity. 321 Women and Minority Entrepreneurs Are Growing in
Export/Import, Licensing, and Franchising Are Market Numbers. 339
Entry Forms of International Business. 322 Social Entrepreneurs Seek Novel Solutions
Joint Ventures and Wholly Owned Subsidiaries Are Direct to Pressing Social Problems. 340
Investment Forms of International Business. 323
International Business Is Complicated by Different Legal 18.2 What Should We Know About Small Businesses
and Political Systems. 323 and How To Start One? 343
International Businesses Deal with Small Businesses Are Mainstays of the Economy. 343
Regional Economic Alliances. 324 Small Businesses Must Master Three Life-Cycle Stages. 343
Family-Owned Businesses Face Unique Challenges. 344
17.2 What Are Global Corporations, and How Many Small Businesses Fail Within 5 Years. 345
Do They Work? 327 Assistance Is Available to Help Small Businesses to Get
Started. 346
Global Corporations Have Extensive Operations
in Many Countries. 327 A Small Business Should Start With a Sound Business
Plan. 346
The Actions of Global Corporations Can Be
Controversial. 327 There Are Different Forms of Small Business Ownership. 347
There Are Different Ways of Financing a Small Business. 348
Managers of Global Corporations Face Ethics
Challenges. 328
SKILL-BUILDING PORTFOLIO / CASES FOR CRITICAL
Planning and Controlling Are Complicated
in Global Corporations. 330 THINKING / CASE REFERENCES / TEST PREP ANSWERS /
Organizing Can Be Difficult in Global Corporations. 330 GLOSSARY / ENDNOTES / NAME INDEX /ORGANIZATION
Leading Is Challenging in Global Corporations. 331 INDEX / SUBJECT INDEX