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The Modern Day Success of Vertical Integration

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The Modern Day Success of Vertical Integration

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I chose this article as it reflects upon six modern-day companies that have found success using the vertical integration management model.

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Supply chains are like the circulatory systems of the business world. They deliver essential components and raw materials to your business, and facilitate the transfer of finished goods to the market.
Unsurprisingly, then, an increased amount of control over your supply chain means that your entire organisation becomes more productive and efficient. Vertical integration is the primary strategy used by firms to achieve this.

Of course, venturing beyond your level on the supply chain can be very expensive; this is one of the reasons why vertical integration is considered a high-risk strategy. It remains a popular option for firms pursuing aggressive growth, though, and has proven hugely beneficial for many companies.

Successful Examples of Vertical Integration

The reasons for this can vary, but a general theme among each successful implementation is an abundance of resources for the company involved. To illustrate this, here are some notable examples that highlight how it can work:

1. Mobile Phones | Apple

With a broad portfolio of consumer devices requiring assembly, Apple is considered an industry leader in supply chain management. However, the main bulk of the company's integration is actually on the distribution and retail side of the equation, with the vast majority of Apple's sales coming through their self-branded stores.

There are over 500 of these locations around the world in more than 25 countries, and with distinct designs (including minimalist outlays and a heavy use of glass), these stores help Apple project an exclusive brand identity. When it comes to actual sales figures, the stores account for between 10% and 40% of total sales in various product categories, with the rest coming from a select list of retailers and other distribution partners, such as licensed resellers.

While forward integration comes relatively easily to Apple, the same cannot be said about integration at the supplier level. Apple is not a manufacturer of phones; they design their devices and then outsource the manufacturing to firms in China. Unlike their rival Samsung, Apple is not in a position to vertically integrate backwards; for instance, a single iPhone XI uses dozens of major components and many more minor ones, all of which are sourced from suppliers in Asia, Europe, and North America.

However, thanks to their unique products, extensive patents, and high consumer demand, Apple can dictate the terms along its supply chain in ways that other businesses simply can't.

2. Consumer Electronics | Samsung

The South Korean MNC is a more traditional example of both forward and backward vertical integration. Through its various divisions, Samsung is actively involved in the manufacture of various components, such as LCD and AMOLED displays, antennas, Li-ion batteries, camera modules, and semiconductors.

In fact, they are so dominant in some segments that even their direct rivals - including Apple - use Samsung as a supplier (both firms were also locked in a long-drawn-out court case over copyright infringement, which only highlights the advantage of vertical integration at the supply level).

Samsung uses a network of subsidiaries to maintain control over the backend of its supply chain. Upfront, meanwhile, Samsung-branded stores sell their products direct to customers offline. It has sales networks in over 70 countries that distribute the company's mobile phones, as well as other consumer electronic products such as televisions.

3. Oil, Gas and Energy | BP, Shell, and ExxonMobil

The fossil fuel industry as a whole is one giant case study of vertical integration along the entirety of the supply chain. Major corporations such as British Petroleum, ExxonMobil, and Shell are prime examples of this, and have a presence at all major levels.

It all starts with access to the raw material, which in this case would be crude oil. All companies have huge exploration divisions to find and secure new sources of this finite resource across the world, and invest vast sums of money in this regard.

Once an oilfield is secured, the next step is to build oil rigs in order to extract the material from the earth or the seabed. BP, Shell, and Chevron all have independent or part-owned subsidiaries involved in the production of crude oil.

The chain of vertical integration then extends further, and includes the transportation of crude oil for further processing at refineries. Through daughter companies, subsidiaries, and joint ventures, the major oil companies maintain tight control at this level.

Finally, each company then has a retail division to take care of marketing and sales of petrol, diesel, engine oils, and other related products and services. Some companies, such as Shell, even interact directly with invidivual customers through petrol stations across the world.

4. Automobiles | Toyota, Honda, Volkswagen, and Ford

Like oil companies, car manufacturers also have largely identical integration strategies. Unlike oil, however, backward integration is not particularly viable as, since cars have thousands of parts, they rely on numerous specialist suppliers.

On the sales and distribution side, though, it is a far more straightforward proposition. Major auto manufacturers such as Toyota, Honda, and Ford have global distribution channels; they export vehicles to numerous countries from several key manufacturing hubs.

Furthermore, these companies also handle all their own marketing and retail sales activities through branded showrooms. While the company may wholly own some of these, others are operated by third parties, often under a licensing or franchising system.

5. Media and Entertainment | Netflix and Disney

Online streaming giant Netflix is an excellent example of a brand that has incorporated high levels of vertical integration into its wider business strategy. In 2019 alone, it commissioned 371 different productions, with all of this content released exclusively on their online streaming platform.

Disney's story is not too different, either, although its vertical integration strategy is arguably more aggressive and diverse. In recent decades, it has acquired Hollywood movie studios, media companies, animation studios (including, famously, Pixar), and television channels, culminating in the creation of its new streaming platform, Disney+. Along with their own celebrated back catalogue of in house productions, the acquisitions of hugely profitable entertainment franchises such as Marvel Studios, Star Wars, and 21st Century Fox have created a lucrative base of products and intellectual property that not only drive its online streaming platforms, but its cinema releases and theme park tie-ins, too.

6. eCommerce | Amazon

Under the guidance of Jeff Bezos, vertical integration has proven a key strategy in the evolution of Amazon over the last two decades. In the beginning, it was just a digital store where buyers could place orders, but, as part of efforts to stay on top of rising demand, it soon ventured into warehousing, which is now a standalone service used by the company as well as its clients.

Amazon no longer relies on third-party delivery services, either, instead implementing its own logistics service provider (which is, again, used by all brands in the Amazon ecosystem). As well as stocking and selling other brands, the company has developed in-house brands in various categories, such as electronics (Amazon Kindle), household items (Alexa), and even clothing (Cable Stitch).

Given its enormous resources and ever-expanding portfolio, the company also has a history of creating new services for internal use before successfully selling the technology to others. Its web hosting and cloud computing divisions are an example of this, and mean that Amazon does not have to rely on external providers for crucial services for their core business.

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What other successful vertical integration examples can business owners learn from? Join the conversation, and let us know in the comment section below.

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6 Examples of Vertical Integration in Action | SB

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As these six examples show, vertical integration can be adopted as an aggressive growth strategy in a wide number of sectors...

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Personally, I believe that companies must have strong first-line managers as they interpret what both the top and middle management want to get done, as well as the needs/wants of the team leaders and workers. They are the buffer as well as the glue for all of the other tiers of management and workers.

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We are all familiar, if not over exposed, to the term VUCA as a descriptor of today's business environment. Organizations have long been looking for ways to survive and thrive in an environment that consistently causes unpredictable disruptions. To cope or deal with this environment, organizations are now wanting to build "agility" as a behavior with a scary sense of urgency! Several pundit's in the market have touted agility and innovation to be the mantra to be change ready. However, as displayed in the recent Global Trends Study by Mercer (2017), only 4% of executives feel their organization is 'change agile'.

Change readiness or agility needs to be practiced in the form of behaviors across levels within the organization. However, the realization that First Line Managers directly supervise up to 80% of the workforce, has shifted the focus on the role of leadership at the base of the organization driving agility. Companies that have employed bottom up leadership, empowering leaders who are at front lines, have become more competitive.

In the above infographic it is important to note that these employees are generally promoted to the First Line Manager position because of their high performance as individual contributors and are rarely equipped to be good managers. In fact, only 40% of first time managers make a smooth transition into this role.

In a recent report Richard S. Wellins, Aviel Selkovits and Debbie McGrathIf stated that with growing demands for agility, innovation, and efficiency, leading at the front line has become even more challenging. First Line leaders are the most sought out, yet uninformed, ill-equipped, and under-utilized communication and behavior change vehicle of an organization.

Case Example of Developing First Line Managers

A leading software engineering company through the use of an employee satisfaction survey found a significant gap in the manager team relationships, particularly in enabling the team to be flexible and agile in response to changing customer needs. Most managers in this organization has risen to their current leadership roles from within the organization, i.e. from being individual contributors to first time managers, leading a team of 6-20 members.

The company first validated the scores received on the employee satisfaction survey through a one-on-one interview with top management as well as a reverse feedback score. A customised 3-day workshop was designed to equip and train the managers through a phased developmental process. The managers also participated in a 2-day intensive workshop where the aim was to further enhance the group on additional management skills.

Through these workshops, the client was able to create a positive impact on developing leadership behaviors and skills, with a special focus to help manage change and changing customer needs as a team. Managing ambiguity with and through team members who have their own distinct styles, was one of the areas of impact. The modules to meet this need were contextualized to real situations that the First Line Managers were facing and therefore the input they needed. There was a significant increase in the employee satisfaction scores for the participating managers.

The contextualization and applicability of the development validated the investment made by the organization.

There is an observable increase in the market in the effort spent on developing transitioning managers. For instance, the Bersin report suggests that there is a 30% increase in the budgets assigned to new manager development. However, the per-person budgets at this level are still half when compared with mid-managers. While organizations are viewing this as an emerging need, the investment being has not seen a comparative increase.

References:

1. Bottom-Up Leadership: How Developing and Empowering First Line Leaders Can Restore Competitiveness. (2017). Retrieved from Harvard Business Review: https://www.uk.mercer.com/content/dam/mercer/attachments/private/uk-2017-how-to-develop-first-line-leaders-and-line-managers-report.pdf

2. Be Better Than Average: The State of Frontline Leadership. (2013). Retrieved from DDI World: https://www.ddiworld.com/ddi/media/trend-research/bebetterthanaverage_tr_ddi.pdf

3. Walking the walk: making front-line managers successful. (2014). Retrieved from BearingPoint Institute: https://www.bearingpoint.com/en/our-success/thought-leadership/walking-the-walk-making-front-line-managers-successful/

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Why Organizations Today Need to Develop Their First Line Managers | InspireOne

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We are all familiar, if not over exposed, to the term VUCA as a descriptor of today's business environment. Organizations have long been looking for ways to survive and thrive in an environment that consistently causes unpredictable disruptions. To cope or deal with this environment, organizations are now wanting to build "agility" as a behavior with a scary sense of urgency!

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The Influence of Interpersonal Business Culture

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The Influence of Interpersonal Business Culture

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Being able to be interpersonal shows major value within not only management but the business world in general. It is something very important to notate.

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Interpersonal skills influence business cultures because they affect job performance, which in turn helps to decide the outcome of a company's success. Interpersonal skills include interaction with others, good communication skills, active listening skills, and attitude. Companies should realize that interpersonal skills are not learned in a classroom; rather they are characteristics that an individual may possess naturally. But these skills can be honed.

Often referred to as soft skills, interpersonal skills allow people to communicate effectively, handle conflicts, and respond to others' needs accordingly. In an ever-changing job market, these skills teach workers and business owners how to be agile, solve complex problems, perform critical thinking on their feet, and manage diverse relationships both internally and externally. Measuring a potential employee's ability to interact with others in a respectful and appropriate manner determines how they are likely to thrive in a team-oriented environment.

According to a study by Harrison Assessments, some of the major factors that make up a person's interpersonal skills are diplomacy, helpfulness, optimism, influence, and flexibility. Also vital are collaboration skills, empathy, tolerance, and frankness. These characteristics are important in corporate culture as well as in a small business. Business owners in general want to ensure that everyone is on the same page and that business flows in a consistent and cohesive manner.

Business owners must realize that even if they have a vision and goals, these cannot be achieved without solid communication skills, which are needed for relationship management. A big budget does little good if you cannot build rapport with employees and customers.

Ways to improve interpersonal skills include touring different sites and departments, managing by walking around, arranging lunches, and corresponding consistently via phone or email. Having good interpersonal skills promotes approachability, likability and comfort. Managers who possess strong interpersonal skills motivate their staff to challenge themselves and do a better job. Most importantly, they make workers feel as if they can go to their bosses with any problems or concerns.

Both verbal and non-verbal interpersonal skills are extremely important when it comes to a company's success. When you can speak to people in an articulate manner, you avoid communication errors and you are more likely to have happy customers. It's just as important to maintain the correct tone of voice and posture. Non-verbal communication consists of facial expressions, hand gestures, and body language. It can also determine whether or not your interaction results in a satisfied customer. When you combine both verbal and non-verbal skills, the result is a powerful demeanor that may help to determine a company's success.

In addition, good interpersonal skills encompass listening skills, problem-solving, decision-making, and negotiation skills. The ability to communicate internally with employees and co-workers is just as important as building and maintaining solid relationships with customers.

The Bottom Line

Good interpersonal skills include verbal and non-verbal communication. While hard skills such as knowledge, expertise, and experience are important, without interpersonal skills, you or your company can go only so far. Good interpersonal skills can help motivate employees and attract and keep customers. Happy employees and customers are critical to business success.

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How do interpersonal skills influence a business culture?

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Interpersonal skills influence business cultures because they affect job performance, which in turn helps to decide the outcome of a company's success. Interpersonal skills include interaction with others, good communication skills, active listening skills, and attitude. Companies should realize that interpersonal skills are not learned in a classroom; rather they are characteristics that an individual may possess naturally.

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Planning, organizing, leading, and controlling are the four vital functions of management. It is important to notate them as they are continued themes throughout the rest of the course.

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How does an organization move the needle toward achieving its goals? Who's in charge of steering employees in the right direction as they pursue those objectives?

Here's the answer: management.

Yes, leaders and supervisors are the ones who not only set the finish line but also support their teams in crossing it. To do so, managers need to fulfill core responsibilities known as the four functions of management.

Think of the four basic functions of management as the four core responsibilities every leader needs to fulfill.

They were initially identified as five functions by Henri Fayol in the early 1900s. Over the years, Fayol's functions were combined and reduced to the following four main functions of management: planning, organizing, leading, and controlling.

No matter which industry you work in, the functions of management are consistent and applicable across all sectors.

Below, we'll give some clarity and define four functions of management. But first, it's important to understand that each function isn't exclusive. Instead, each one builds upon the function before it - when they're all in place, the most effective management happens.

Planning

Managers first need to develop a detailed action plan. In the planning phase, management should identify the goals and create a reasonable course of action to attain them. There may be multiple ways to achieve the goal, but it's management's responsibility to determine the best course of action.

Drafting a successful plan includes aligning the goal with the organizational vision, considering factors that may impact the project internally and externally, and establishing a realistic timeline while being mindful of resource and budgetary constraints.

Three different types of planning in management include:

Strategic: A long-term, high-level type of foundational planning that emphasizes the mission, values, and vision of the organization. Upper management drafts its strategic plans, and all managers should refer back to the strategic plans to guide their decisions.

Tactical: A short-term (one year or less), objective-focused type of planning, often carried out by middle management.

Operational: A plan that describes the daily roadmap of the activities within the company. Low-level managers and supervisors devise operational strategies in most cases.

Organizing

The organizing function consists of taking the previously created plan and putting it into action. Key activities in this function include:

Identifying all of the necessary steps of the project

Determining who will complete the actions and deploying those resources to work

Establishing levels of authority and responsibility for every individual involved

Organizing facilitates a clear development of the organizational structure for executing the plan, but it also encourages collaboration among team members spread amongst various teams and departments. When the Project Management Institute (PMI) cites poor communication as one of the leading causes of project failure, it's evident that ensuring effective collaboration amongst team members plays an influential role in driving a project's success.

Leading

With the first two functions of management underway, managers should then shift their attention to the people.

The leading stage consists of motivating and influencing employees to do the work and meet performance standards. Keep in mind that effective leadership extends beyond delegating and directing employees what to do.

Examples of effective leadership skills that managers can focus on include frequent and clear communication, expressing empathy, being an active listener, maintaining transparency, and empowering the team to perform to the best of their ability. Utilizing interpersonal skills and different leadership styles for different situations is crucial for managers to tap into while leading their employees.

Controlling

The controlling function consists of monitoring performance and progress through project execution and making adjustments as needed. Managers should ensure that employees meet deadlines while simultaneously balancing synchronicity amongst the project's resources and the overall budget. Managers may need to take corrective actions and be proactive in their approach to ensure that team members meet their assigned deadlines.

Two key areas where managers may need to make adjustments include staffing and budget. For example, let's say an assigned leader working on a project leaves the company. The manager will need to identify a replacement as soon as possible, train them efficiently, and, hopefully, keep the project running smoothly.

From a budget perspective, managers should monitor spend closely. Suppose a project starts to run over budget - in that case, the manager should identify what's causing the overspend. If that expense is justified, they should proactively ask for additional funding or curb spending to be more mindful of the budget in other areas.

Tips for applying the four functions of management

Applying the four functions of management may seem challenging at first, but with the right resources and knowledge, managers can carry out all duties successfully.

Feeling intimidated? Don't be. Here are a few quick tips for getting started:

Set yourself up for success at the start and document your plan using a project management platform like Wrike.

Identify how your team may work best together during the organizing stage, such as through an Agile work environment.

Implement processes for recognizing employees for a job well done at the start of the project, and ensure you acknowledge and celebrate them accordingly.

Keep in mind that leadership is a learning process - whether you're brand new or well-established. As you manage a team or project, you'll uncover different areas where you can improve and grow.

Become a successful manager using the four functions of management

Management isn't an easy gig, and there isn't a tried-and-true approach that works for everybody. However, every manager fulfills the same core responsibilities, known as the four functions of management.

When a manager checks the box of each of those major functions, they're well-equipped to lead projects, teams, departments, or even entire companies to their objectives.
Want to boost your management abilities and keep your team and project on track? Sign up for a free trial of Wrike and start planning today.

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What Are the 4 Functions of Management? | Wrike

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How does an organization move the needle toward achieving its goals? Who's in charge of steering employees in the right direction as they pursue those objectives? Here's the answer: management. Yes, leaders and supervisors are the ones who not only set the finish line but also support their teams in crossing it.

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Advice on How to Get Results Through Others

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Advice on How to Get Results Through Others

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Being a manager, you have to delegate tasks and trust that your employees will get their work done. This page advises managers who may be struggling or need help on how to handle a multitude of employees, all with different personalities. Making a professional connection will help build respect and trust, and ultimately an improved work ethic all around.

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7 Secrets to Getting Results Through Others

Brag about what you've helped others do, not what you've done.

Managers who maximize talent, produce results through others. Talent that doesn't produce remarkable results, reflects poor management.

You're in the way, if you can't get results through others.

7 secrets to getting results through others:

1. Focus on what others can do. Your first thought is what you can do. Successful managers shift their thinking to what others can do. The less you do, the more they get done. This isn't about being lazy or negligent. Leverage their talent by getting out of the way.

2. Build relationships with high-potential individuals. Relationship building is trust building. Trust begins with what you do for others, not what they do for you. Respect their values and skills. Expect people to be like themselves, not like you.

3. Describe results. If you want results, you must describe them before they're achieved.

4. Take action when you don't get results. Mediocrity is the result of tolerance. If you're having the same performance conversation over and over, you are the problem.

5. Develop the middle. People are great at one or two things, average at many, and lousy at a few. The middle - average areas of skill - are the best opportunities for development. Develop people who deliver results by elevating their middle. Work to make their good skills great. (Thanks to Milo and Thuy Sindel, "Hidden Strengths," for this idea.)

6. Talk more about good performance than bad. What are you doing well? What behaviors produce desired results? Talking about what went wrong doesn't produce results. You can't deliver positive results by "not doing" things.

7. Have after-action meetings. The military calls them AAR's, after action reports.

What worked?

What didn't work?

What will you do differently next time?

Bonus: Give support, but don't coddle.
What prevents managers from getting results through others? What's one of your get-results-through-others tips?

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7 Secrets to Getting Results Through Others - Leadership Freak

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Brag about what you've helped others do, not what you've done. Managers who maximize talent, produce results through others. Talent that doesn't produce remarkable results, reflects poor management. You're in the way, if you can't get results through others. Focus on what others can do. Your first thought is what you can do.

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This is more than important to include because it lists the top ten SRCs of 2021, and it details each one on how they achieved it. It makes me want to invest and shop with those companies more.

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The 10 most innovative corporate social responsibility companies of 2021

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These companies are taking bold stances to improve their communities and the world beyond.

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This webpage details the top 100 sustainable companies and their return rate and comparable rankings from 2021 to 2022. It also scores their sustainability. Who wouldn't want to be informed on the top producing sustainable companies? It would incline me to shop them more than other comparable ones.

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Snarled supply chains and devastating floods and droughts across the U.S. marred prospects for companies and communities last year. But American corporations that elected to focus on sustainability, including managing their suppliers and water risk, showed that doing so was not only good for the planet, but also for their shareholders.

In the fifth annual Barron's ranking of America's Most Sustainable Companies, shares of the 100 companies on our list returned 34.4%, on average, in 2021, besting the S&P 500 index's 28.7%....

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Snarled supply chains and devastating floods and droughts across the U.S. marred prospects for companies and communities last year. But American corporations that elected to focus on sustainability, including managing their suppliers and water risk, showed that doing so was not only good for the planet, but also for their shareholders.

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This page lists the top ten costs of committing unethical behavior. It is suitable for business people to maybe remind themselves, but it is essential for management to remind the employees of the consequences of unethical actions, especially within the workplace.

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One does not have to look very far in today's world to see numerous examples of an absolute erosion of ethics and basic core values and guiding principles of what is right and what is wrong in how business is being conducted.

One does not have to look very far in today's world to see numerous examples of an absolute erosion of ethics and basic core values and guiding principles of what is right and what is wrong in how business is being conducted.

A quick scan of the business environment reveals that unethical business conduct has risen to the point where trust in our businesses and institutions, as well as the very systems that make our society work, are in a position of significant risk. One could make the case that at no time during the last 20 or 30 years have business ethics been of such paramount importance to the well-being of our business and government entities and our way of life in this country.

Just think about how the business world has been shocked and rocked by major corporate scandals involving unethical behavior. Some of the real "poster" companies of ethics violations include Enron, Tyco International, WorldCom, HealthSouth, BP Oil and Union Carbide. Each of these would no doubt make the top 10 list of biggest corporate scandals.

The risks and costs associated with these examples of unethical behavior are astronomical in dollars, but also extremely high in other nonquantified costs and risks.

The 10 most significant risks and costs from unethical behavior:

(1) Increased risk of doing business and the possibility of bankruptcy and severely damaged company brand and image.

(2) Decreased productivity.

(3) Increased misconduct and conflict internally.

(4) Decreased performance levels of employees.

(5) Increased employee turnover and more challenging employee recruitment.

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Top risks and costs of unethical behavior in business conduct - LVB

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One does not have to look very far in today's world to see numerous examples of an absolute erosion of ethics and basic core values and guiding principles of what is right and what is wrong in how business is being conducted.

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This official web page from the United States Department of Labor states the whistleblower laws provided by OSHA, as well as an updated segment where you can report your workplace for not taking the proper covid-19 precautions. It is interesting to see a well-run and frequently updated website, especially from the government, especially when it comes to providing workers with the same working environment.

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The Whistleblower Protection Programs | Whistleblower Protection Program

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OSHA's Whistleblower Protection Program enforces the whistleblower provisions of more than 20 whistleblower statutes protecting employees from retaliation for reporting violations of various workplace safety and health, airline, commercial motor carrier, consumer product, environmental, financial reform, food safety, health insurance reform, motor vehicle safety, nuclear, pipeline, public transportation agency, railroad, maritime, securities, tax, antitrust, and anti-money laundering laws and for engaging in other related protected activities.

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Steps 4 Change is a non-profit voluntary community organization set to break the negative cycles that hinder peoples working abilities and their quality of work, especially within disadvantaged communities. They are a community as well as an organization that speaks out for a positive change for those in less than fortunate situations. This specific link includes their take on the importance of diversity.

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Diversity - the concept of understanding that each individual is unique, and that each of our individual differences share a purpose in society. Unfortunately, diversity has not always been embraced. But as we continue to grow as a society, we are starting to see the importance of bringing difference races, nationalities, religions, and sexes together as one team and community. And doing so holds a number of advantages for communities and groups. Let's take a look at three major benefits that come along with diversity:
1) Diversity drives creativity and innovation
Every culture, every nationality, every single person sees the world in a different way. Similarly, every culture, nationality, and person has different knowledge, perspectives, and points of view. When all of these different views are shared together, miracles can happen. Think about it. How do you learn? In order for us to learn something new, we need to be taught by someone who already has that knowledge and experience. If our teachers throughout school didn't have any different knowledge and experience than us, than we would never learn anything from them. The same goes for different cultures and backgrounds. If everyone was exactly the same, no one would ever learn anything because there would be no knowledge to teach. But because this is not the case, we can all learn something by listening to people with different experiences, perspectives, and backgrounds than us. And when we learn something new, we might just spark a sense of creativity within ourselves. Remember, two brains are better than one, and the more diverse we are, the more we have to learn from each other.
2) Higher rates of Productivity and Performance
Studies have actually shown that organizations that promote diversity and inclusion are happier and more productive than ones who don't. Why? Because having a more diverse group of people means you will have a more diverse set of skills. Again, this goes back to individual differences. No two people are the same, and no two people have the same skill set. What one person lacks in skill, another may prove to be an expert at. And when we put all of our skills together, we can get more done. Period.

Imagine the kinds of ideas 30 different people from different cultures, backgrounds, races, religions, and sexes could come up with for improving the community!?
3) Personal Growth
Diversity is an awesome way for us to explore our inner curiosities. It gives us the opportunity to live outside of our comfort zone, enhance our learning, and develop an overall sense of personal growth. How? In order to progress in our own personal development, we must take the time to ask questions and learn about various topics. The more diverse our social group, the more we have to learn. Embracing different cultures can help you to learn new languages, explore new traditions, and gain valuable insights. Visit China and you may learn how to explore your spiritual side, visit Italy and you may have the opportunity to indulge in new culinary experiences, visit Ethiopia and you may learn to be thankful for the things you have. Every new country, and every new person can bring you different insights and progress your personal development if you are willing to explore and listen.

Of course, there are dozens of other benefits that come along with diversity, but these are the three that we find to be the most enlightening. We are all different, and we can all learn from one another - open your heart to diversity and you may just find personal enlightenment at the end.

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Diversity - the concept of understanding that each individual is unique, and that each of our individual differences share a purpose in society. Unfortunately, diversity has not always been embraced. But as we continue to grow as a society, we are starting to see the importance of bringing difference races, nationalities, religions, and sexes together as one team and community.

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Organized culture is a very pertinent topic within the business realm because not only does it increase employee proficiency, but it makes employees feel comfortable and cared for at work. It is the vast difference between a happy and smooth running workplace and a run down and disaster of a workplace.

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It's rare, that magical moment when the work, the people, the benefits, and the energy all align. It's rare, but it is possible. When people feel comfortable in a space, when they feel valuable, when everyone feels like the work actually matters, that balance is never an accident. Someone (usually lots of people) worked to build that extraordinary workplace culture, otherwise known as organizational culture.

What is organizational culture?

Organizational culture is a term used to describe the way people define the values, goals, and overall vibe of their office. Founders and HR leaders usually develop and evangelize the culture, but it's a constantly changing, employee-powered concept. These values should resonate with employees and make them feel like their work matters and rolls into a larger purpose. Organizational culture is both how organizations get things done, and why. It's what makes the difference between a team of hardworking, happy employees and a group of grumpy strangers.

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Qualities of great organizational culture

Companies with strong organizational culture tend to be the kind that people dream of working for. These businesses have a set of values that don't just live on a poster in the kitchen. Rather, employees at these companies are able to easily articulate what their company does and why they do it. The organization has a personality.

In addition to having a clear mission, companies with strong organizational culture see transparent communication between leadership and employees, and collaboration among peers. Employees know what's going on within the company and why certain decisions are being made. They're ready and eager to help their fellow employees, even when a project falls outside their day-to-day responsibilities. These companies also tend to provide their employees opportunities for growth, with strong internal development programs and clear career ladders. Employees feel supported, valued, and in the know.

Why organizational culture is important to your company

The odds are stacked against a healthy culture: 85 percent of employees are actively disengaged from work, and one-third of employees plan to quit in the next year, according to a 2019 study. Another 2019 study found that employee loyalty has dropped across 20 industries, and people cited weak company culture as the culprit.

Lack of engagement means folks aren't really working-or aren't working to the best of their abilities. Wavering loyalty means employees don't find value in the organization's goals, or they don't trust leadership; this leads to lots of turnover. And if you don't like your job and don't trust leadership, you're definitely not persuading anyone to join the team, which makes it harder and harder for HR to find new employees.

A positive organizational culture can improve talent acquisition

Balancing a healthy culture is tough but not impossible, and lots of organizations have cracked the code. In a surprising leap to the top, Hilton was first on Fortune's list of 100 best companies to work for in 2019. The year before, they had come in 33rd; a focus on diversity and inclusion, a free GED program, and updated worker lounges were cited as agents of change. In other words, Hilton gave their employees a reason to be proud (improved diversity and inclusion); access to real benefits (education); and a comfortable, welcoming working environment (employee lounges).

Data shows some good news, too. One study found that 81 percent of millennials want companies to be good corporate citizens, and 62 percent of them would take a pay cut to work at a socially responsible organization. Another study found that a majority of employees looking to leave their jobs are looking to work for companies with a mission that matches their passion.

Sometimes culture changes over time, and sometimes culture changes in two years: Salesforce has been on Fortune's best places to work list for several years running. Its big move? Spending $6 million over the course of two years to fix the gender- and race-based pay gap at all levels of the company.

Five steps to developing great organizational culture

A multifaceted concept like organizational culture doesn't lend itself to easy fix-its. There will never be a Band-Aid for bad culture, but there are certainly areas to focus on-where change really can happen.

1. Start by assessing what employees value

While organizational culture comes from the top, it's meaningless if it doesn't reflect employee values. Start by assessing how employees honestly feel about their work and the wider organization. There might be some work to do, but it's important to understand what people are feeling and how they think about the organization. Focus on what they find exciting and motivating about their work. Look for common themes, and start building a mission that combines your vision with those insights.

2. Develop the company's mission

Sometimes that mission is simply to provide something, like bedsheets, to customers. But when that mission becomes "deliver simple, beautiful home essentials at a fair price, with a personal touch" (thanks, Brooklinen), suddenly the people who work for your company aren't just selling sheets-they're selling quality, simplicity, beauty, and honesty. And so are you. If everyone embraces that mission, your company reflects it. Don't overcomplicate it, but make sure your mission is unique and authentic. What makes your company stand out from the competition? These words will be your guiding light.

3. Both leadership and the workforce should carry the torch

Lots of emphasis is placed on leadership when it comes to setting the terms of company culture, and without a doubt, you can't have a healthy culture without leaders who live it. But there are plenty of companies who survive leadership changes or mergers without sacrificing their culture, and that's because employees carry the torch. A balance between employees and leadership is required to maintain a healthy culture. Employees will often point in the direction of change, sometimes loudly, and it's up to leadership to listen and to act.

4. HR must reinforce and oversee culture

In the best-case scenario, human resources is a bastion of healthy culture and the link between employees and leadership. Think of HR as the stewards of culture. They're also responsible for hiring, the single most important way to build and change culture: with people. If your new hires are excited to work and believe in the company's mission, you're more than halfway there.

5. Invest in a space that matches your culture

It's the first thing visitors notice and the quickest way potential candidates read the culture at your company: the office. We all know location matters, but so do colors (they have the power to change moods and boost productivity)-even the width of the stairs matters. According to WeWork's former architecture discipline lead Michael Caton, the stairs at 620 Avenue of the Americas are "designed to be as narrow as they can be by New York City building code, [so that] you can't absentmindedly walk by other people- you have to engage with them, acknowledge their presence."

Your space can even play a role in shaping your company culture. When GE Healthcare Korea was looking to cut real estate costs, it also saw an opportunity to inspire more flexibility and collaboration among employees. The company designed a bright, new office with open seating and various collaboration areas. The result: "We achieved a cost-saving project for GE while achieving cultural transformation to collaborate better together," says Francis Van Parys, former president and CEO of GE Healthcare Korea.

That's the power of space to build connections and a sense of belonging, one of the fundamental aspects of a healthy organizational culture.
This article was originally published on July 8, 2019, and has been updated throughout by the editors.
Rachel Miller is a writer based in New York. She specializes in both editorial and UX copy, and her work has appeared in Brooklyn Magazine, The Guardian, The Awl, and more.

Rethinking your workspace?

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What is organizational culture and why is it important? - Ideas

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A shared company culture and mission that reflects employee values has become a major differentiator for enterprise companies.

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The World Trade Organization is responsible for 97% of World Trade and 98% of the global gross domestic product. With Russia continuing to invade Ukraine, the international trade economy is at risk because many countries, including the U.S., have banned trade with Russia.

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MAIN POINTS

World merchandise trade volume is expected to grow 3.0% in 2022 (down from 4.7% previously) and 3.4% in 2023, but these figures may be subject to revision due to uncertainty about the course of the conflict in Ukraine.

World GDP at market exchange rates is expected to increase by 2.8% in 2022 after rising 5.7% in 2021. Output growth should pick up to 3.2% in 2023, assuming persistent geopolitical and economic uncertainty.

The CIS region should see a 12.0% decline in imports and a 7.9% drop in GDP in 2022, but exports should grow by 4.9% as other countries continue to rely on Russian energy. Regional disparities may narrow due to weak import demand in Europe and Asia.

The volume of merchandise trade rose 9.8% in 2021. The US$ value of this trade grew 26% to US$ 22.4 trillion. The value of commercial services trade was also up 15% in 2021 to US$ 5.7 trillion.

Services trade will also be affected by the conflict in Ukraine, including in the transport sector, which covers container shipping and passenger air transport.

The organization now expects merchandise trade volume growth of 3.0% in 2022 — down from its previous forecast of 4.7% — and 3.4% in 2023, but these estimates are less certain than usual due to the fluid nature of the conflict (Table 1).

The most immediate economic impact of the crisis has been a sharp rise in commodity prices. Despite their small shares in world trade and output, Russia and Ukraine are key suppliers of essential goods including food, energy, and fertilizers, supplies of which are now threatened by the war. Grain shipments through Black Sea ports have already been halted, with potentially dire consequences for food security in poor countries.

The war is not the only factor weighing on world trade at the moment. Lockdowns in China to prevent the spread of COVID-19 are again disrupting seaborne trade at a time when supply chain pressures appeared to be easing. This could lead to renewed shortages of manufacturing inputs and higher inflation.

“The war in Ukraine has created immense human suffering, but it has also damaged the global economy at a critical juncture. Its impact will be felt around the world, particularly in low-income countries, where food accounts for a large fraction of household spending,” Director-General Ngozi Okonjo-Iweala said. “Smaller supplies and higher prices for food mean that the world's poor could be forced to do without. This must not be allowed to happen. This is not the time to turn inward. In a crisis, more trade is needed to ensure stable, equitable access to necessities. Restricting trade will threaten the wellbeing of families and businesses and make more fraught the task of building a durable economic recovery from COVID‑19,” the Director-General went on to say.

She said governments and multilateral organizations must work together to facilitate trade at a time of sharp inflationary pressures on essential supplies and growing pressures on supply chains.

“History teaches us that dividing the world economy into rival blocs and turning our backs on the poorest countries leads neither to prosperity nor to peace. The WTO can play a pivotal role by providing a forum where countries can discuss their differences without resorting to force, and it deserves to be supported in that mission,” she said.

With little hard data on the economic impact of the conflict, WTO economists have had to rely on simulations to generate reasonable assumptions about GDP growth in 2022 and 2023. Current estimates based on the WTO Global Trade Model capture (1) the direct impact of the war in Ukraine, including destruction of infrastructure and increased trade costs; (2) the impact of sanctions on Russia, including the blocking of Russian banks from the SWIFT settlement system; and (3) reduced aggregate demand in the rest of the world due to falling business/consumer confidence and rising uncertainty.

Under these assumptions, world GDP at market exchange rates is expected to grow by 2.8% in 2022, down 1.3 percentage points from the previous forecast of 4.1%. Growth should pick up to 3.2% in 2023, close to the average rate of 3.0% between 2010 and 2019. Output in the Commonwealth of Independent States (CIS) region — which excludes Ukraine — is expected to see a sharp 7.9% drop, leading to a 12.0% contraction in the region's imports.

Chart 1 shows quarterly world merchandise trade volume estimates through the end of 2023, including error bands indicating confidence intervals associated with the forecast. Given current GDP assumptions, merchandise trade volume growth in 2022 could be as low as 0.5% or as high as 5.5%. These projections will be updated in October, but an earlier revision could be issued if incoming data warrant it. The forecast takes into account higher frequency data for selected economies, including monthly statistics on container throughput of U.S. and Chinese ports in order to capture port congestion in these countries.

Chart 1: Volume of world merchandise trade, 2015Q1-2023Q4
Seasonally-adjusted volume index, 2015=100

Source:   WTO and UNCTAD, WTO Secretariat estimates.
Note:       Each shaded region represents a +-0.5 standard error band around the central forecast.

Chart 2 illustrates the recent rise in world fuel prices, which pre-dates the conflict in Ukraine. The benchmark Brent crude oil price for March came in at US$ 118 per barrel, up 38% from its level in January and up 81% year-on-year. (It should be noted that daily prices have moderated recently, from a peak of US$ 128 per barrel on 8 March to US$ 104 per barrel on 1 April.)

Unlike oil prices, natural gas prices tend to diverge strongly across regions. The price of natural gas in Europe rose 45% between January and March to US$ 41.0 per million Btu, whereas prices remained relatively low in the United States at around US$ 4.9 per million Btu. Higher oil prices may reduce real incomes and import demand worldwide, while higher natural gas prices would probably have a greater impact in Europe.

Chart 2: Monthly average prices for crude oil and natural gas, January 2018 – March 2022
US$ per barrel and US$ per million Btu

Source:   World Bank, US Energy Information Administration, Federal Reserve Bank of St. Louis.

In the two decades before the global financial crisis, world merchandise trade volume grew around twice as fast as world GDP at market exchange rates, but the ratio between trade growth and GDP growth fell to around 1:1 on average after the crisis. If the current forecast is realized, this ratio would be 1.1:1 in both 2022 and 2023, suggesting no fundamental change in the relationship between trade and output. Risks to the forecast are mixed and difficult to assess objectively. There is some upside potential if the war in Ukraine ends sooner than expected, but substantial downside risks could emerge if fighting persists for a long time or if the conflict escalates.

Chart 3 shows quarterly merchandise trade volume indices by region from the first quarter of 2019 to the final quarter of 2023, at the end of the forecast period. Regional disparities in the forecasts persist, but Europe is now expected to underperform on the import side along with Africa and the CIS. The latter is mostly due to sanctions against Russia. Meanwhile, Middle East import volumes are expected to pick up as higher oil prices boost export revenues, allowing countries in the region to import more. Weakness in Europe is partly due to the fact that Ukraine is included in this country group, dragging down the regional average. The low level of imports in Africa is partly due to unexpected declines in the second half of 2021, which are projected forward into the future.

Export volumes show slow growth in most regions, including the CIS, since Russia is still able to export fuels. If the situation were to change, we might see stronger export volume growth in other fuel producing regions.

Chart 3: Merchandise exports and imports by region, 2019Q1-2023Q4
Volume index, 2019=100

a             Refers to South and Central America and the Caribbean.
b             Refers to the Commonwealth of Independent States, including certain associate and former member.
Source:   WTO and UNCTAD.

Table 1 summarizes annual merchandise trade volume growth since 2018 and projections for 2022 and 2023. Annual volume indices sometimes differ slightly from the quarterly indices due to differences in methodology, but they generally tell the same story. In addition to the standard WTO regions, the table also includes experimental forecasts for Least-Developed Countries (LDCs).

The year 2021 saw a sharp rebound in trade volumes after the pandemic-induced slump of 2020, but growth might have been stronger without recurring waves of COVID-19 during the year. Every region had export growth below the world average of 9.8% except for Asia, which saw its exports increase by 13.8%. The situation was reversed on the import side, where North America, South America, the CIS and Asia all recorded above average growth.

The forecast foresees 2022 export volume growth of 3.4% in North America, -0.3% in South America, 2.9% in Europe, 4.9% in the CIS, 1.4% in Africa, 11.0% in the Middle East, and 2.0% for Asia. It also anticipates import growth of 3.9% in North America, 4.8% in South America, 3.7% in Europe, -12.0% in the CIS, 2.5% in Africa, 11.7% in the Middle East and 2.0% in Asia. LDCs should see their export and import volumes increase by 3.5% and 6.6% respectively in 2022. Except for the Middle East, all regions saw forecasts for 2023 revised downward. Trade costs should rise in the short run as a result of sanctions, export restrictions, energy costs and disruptions in transport due to COVID-19.

Table 1: Merchandise trade volume and real GDP, 2018-2023 a
Annual % change

a             Figures for 2022 and 2023 are projections.
b             Average of exports and imports.
c             Refers to South and Central America and the Caribbean.
d             Refers to Commonwealth of Independent States (CIS), including certain associate and former member States.
Note:       These projections incorporate mixed-data sampling (MIDAS) techniques for selected countries to take advantage of higher-frequency data such as container throughput and financial risk indices.
Source:   WTO for trade, consensus estimates for GDP.

Trade developments in value terms

The WTO's trade forecast is released in conjunction with annual merchandise and commercial services trade statistics in current U.S. dollar terms. These figures can be downloaded from the WTO's online database at stats.wto.org. Merchandise trade growth in nominal terms diverged strongly from growth in (real) volume terms in 2021 due to strong price fluctuations over the course of the year. World merchandise trade as measured by the average of exports and imports rose 26% in 2021, which implies that export and import prices jumped 15% for the year on average. The dollar value of trade in fuels and mining products was up 59%, agricultural products were up 19%, and manufactures were up 21%.

Chart 4 shows estimated year-on-year and 24-month growth rates for selected categories of manufactured goods in 2021. Quarterly developments show steady year-on-year growth in certain products (iron and steel, chemicals, integrated circuits) and weaker growth for others (clothing, machinery). Trade values for pharmaceuticals, computers and integrated circuits were actually higher in 2021 than before the pandemic, probably due to high demand for COVID-19 vaccines and increased prevalence of remote working. In contrast, trade in automotive products was up 14% year-on-year in 2021 but down 4% compared to 2019.

Chart 4: Year-on-year growth in manufactured goods trade, 2021
% change in US$ values

Source:   WTO estimates based on partner statistics.

World trade in commercial services was up 15% year-on-year in 2021, boosted by demand for transport services, which grew 33% (Chart 5). Growth of travel exports was positive but it remained weak, as travel restrictions were only partially eased during the year. The category Other services, which includes financial and business services, was up 12% compared to the previous year.

Western sanctions on Russian businesses and individuals are likely to have a strong effect on commercial services trade. Russia is a net services importer, with imports in 2021 valued at US$ 74 billion and exports totalling US$ 55 billion. Russia is ranked 24th among services exporters (13th excluding intra-EU trade), with a share in world trade of 0.9%. It is ranked 19th among importers (11th excluding intra-EU) with a 1.4% share in world trade.

In 2019, the European Union accounted for more than 42% of Russia's services imports and 31.1% of its services exports. In the same year Russia also sourced services from Turkey (7.7%), the United Kingdom (5.1%), the United States (4.0%), China (3.7%), and Switzerland (3.3%), among others. The United States (6.5%), China (6.2%), Switzerland (6.1%), and the United Kingdom (4.8%) were main non-EU destinations for Russian services exports.

Prior to the pandemic, travel/tourism and air transport services were the largest traded services by Russia, accounting for 46% of its exports and 36% of its imports. These services, already hit hard by the pandemic, may be heavily affected by economic sanctions. Ireland is exposed due to the prominent role of the country in operational leasing of aircraft. Overall, Russian payments for operational leasing of aircraft, boats, etc. from the EU reached $3.9 billion in 2019, of which $2.6 billion were for leasing services from Ireland. In 2020, Russian operational leasing imports fell 44% due to pandemic-related travel restrictions.

Intellectual property services were the third biggest category of services imported by Russia. The European Union, Switzerland, the United States, the United Kingdom, the Republic of Korea, and Japan together provided 96% of Russia's imports in 2019, worth some US$ 6.6 billion. This includes fees for the use of patents, outputs from research and development, industrial processes/designs, franchises and trademarks, among others.

Chart 5: Year-on-year growth in world commercial services trade, 2019-2021
% change in US$ values

Note:       Average of exports and imports.
Source:   WTO-UNCTAD estimates in cooperation with ITC.

Detailed quarterly and annual statistics on merchandise and commercial services trade can be downloaded from stats.wto.org. A statistical supplement showing country ranks and shares in world trade can be downloaded here.

Supplemental Indicators

The WTO tracks a number of timely, high-frequency trade-related indicators to better understand trends in merchandise and commercial services trade. A selection of these is presented below to provide additional context to the trade statistics and forecast.

The latest RWI/ISL container throughput index showed seasonally-adjusted throughput declining 3.6 points to 117.1 in February (Chart 6). The index incorporates container data on container handling at 94 international ports, accounting for 64 percent of the global total. Chinese ports saw the biggest decline in March, but European ports also registered a substantial decline. The data could be influenced by seasonal adjustments, but it could also reflect the early stages of the conflict in Ukraine. The fact that the shipping rates have been steady or declining at the same time suggest that the dip in throughput represents falling demand for shipping services rather than reduced supply.

Chart 6: RWI/ISL container throughput index, January 2015 - February 2022
Index, 2015=100

Source:   Leibniz Institute for Economic Research.

Purchasing managers' indices (PMIs) from IHS-Markit are based on surveys of hundreds of businesses in more than 40 countries. These are aggregated into a global index and several sub-indices, with values greater than 50 indicating expansion and values less than 50 denoting contraction (Chart 7). The Headline Global PMI (53.0) remained above the threshold value of 50 in March, suggesting that manufacturing output may still be expanding but at a reduced pace. Meanwhile, New Export Orders fell to 48.2, its lowest level since July 2020, signalling slower growth or possibly contraction in world trade. Supply chains have been hampered in recent months by long delivery times and shortages of production inputs such as semiconductors. The indices shown in the right panel of Chart 7 suggest that these issues are not yet resolved. A rise in input and output prices and an uptick in delivery times in March 2022 suggest continued supply-demand imbalances that could contribute to inflation in the coming months.

Chart 7: Global Manufacturing Purchasing Managers' Indices (PMIs), January 2018 - March 2022
Index, base = 50

Source:   IHS-Markit.
Note:       Values greater than 50 indicate expansion while values less than 50 denote contraction.

Finally, Chart 8 below shows the daily volume and average tone of news reports containing phrases related to economic activity, as monitored by the GDELT Project Summary Service. Although the intensity of reporting on these issues remained flat in recent weeks, the tone took a negative turn in late February. The fact that that this downturn coincided with the start of hostilities in Ukraine suggest that the conflict may be damaging economic sentiment.

Chart 8: GDELT phrases related to economic activity, 01 September 2020 – 30 March 2022
% and index

Source:   The GDELT Project Summary Service.

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Russia-Ukraine conflict puts fragile global trade recovery at risk

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Prospects for the global economy have darkened since the outbreak of war in Ukraine on 24 February, prompting WTO economists to reassess their projections for world trade over the next two years.

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The Economic Community of the West African States 

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The Economic Community of the West African States 

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This goes into a little bit more intensive explanation of what the Economic Community of West African States is and includes specifics of what they have accomplished. It falls under the category of common markets.

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The 15 members of the Economic Community of West African States (ECOWAS) are Benin, Burkina Faso, Cabo Verde, Cote d'Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo. The main goal of ECOWAS is to promote economic cooperation among member states in order to raise living standards and promote economic development. ECOWAS has also worked to address some security issues by developing a peacekeeping force for conflicts in the region. ECOWAS established its free trade area in 1990 and adopted a common external tariff in January 2015.

In September 2016, USTR hosted ECOWAS officials for the second meeting of the United States-ECOWAS Trade and Investment Framework Agreement Council. Among the topics discussed were a review of current activities in support of shared trade and investment objectives, a vision for the ECOWAS - U.S. trade relationship in the medium to long-term, and broadening ECOWAS - U.S. trade and investment cooperation to new areas.

The United States had a $14.1 billion in total (two ways) goods trade with ECOWAS countries during 2017. Goods exports totaled $4.8 billion; goods imports totaled $9.3 billion. The U.S. goods trade deficit with ECOWAS countries was $4.5 billion in 2017.
Exports
U.S. goods exports to ECOWAS countries in 2017 were $4.8 billion, up 15.0% ($631 million) from 2016.

The top 5 U.S. export markets in the ECOWAS countries for 2017 were: Nigeria ($2.2 billion), Ghana ($860 million), Togo ($482 million), Cote d'Ivoire ($320 million), and Benin ($250 million).

The top export categories (2-digit HS) in 2017 were: vehicles and parts ($983 million), mineral fuels ($939 million), , machinery ($606 million), cereals ($527 million) and plastics ($287 million).
Imports
U.S. goods imports from ECOWAS countries in 2017 were $9.3 billion, up 58.6% ($3.4 billion) from 2016.

The top 5 U.S. import suppliers from the ECOWAS countries for 2017 were: Nigeria ($7.1 billion), Cote d'Ivoire ($1.2 billion), Ghana ($750 million), Liberia ($91 million), and Senegal ($72 million).

The top import categories (2-digit HS) in 2017 were: mineral fuels ($7.5 billion), cocoa and cocoa products ($1.2 billion), rubber ($160 million), edible fruit & nuts (cashews) ($88 million), and artificial flowers, feather or down articles ($57 million).

The U.S. goods trade deficit with ECOWAS countries was $1.7 billion in 2016 and $4.5 billion in 2017. The U.S. goods trade deficit with ECOWAS countries increased by 169% in 2017 compared to 2016.

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Economic Community of West African States (ECOWAS)

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The 15 members of the Economic Community of West African States (ECOWAS) are Benin, Burkina Faso, Cabo Verde, Cote d'Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo. The main goal of ECOWAS is to promote economic cooperation among member states in order to raise living standards and promote economic development.

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This shows how technology has changed and affected the world since 2000. Technology can be used as leverage and produce new innovations. It falls under the topic of Global Nature of Innovation.

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Here’s how technology has changed the world since 2000

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From smartphones to social media and healthcare, here’s a brief history of the ways in which technology has transformed our lives in the past 20 years.

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This page covers the nine cultural dimensions that describe the differences in national cultures. This is essential for global businesses to understand and adapt accordingly.

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Cultures around the world are getting more and more interconnected and the business world is becoming increasingly global. For managers this means that they should be able to work with a large variety of people from different countries and cultural backgrounds. However, since most people are so strongly immersed in their own culture, they often fail to see how it affects their patterns of thinking or their behavior. To overcome this, researchers suggest some kind of tools or mechanisms with which to compare countries on cultural similarities and differences. A number of attempts have been made to combine these cultural differences across borders (e.g. the GLOBE study, Trompenaars' cultural dimensions and Hall's cultural dimensions). However, the most-used and best-known framework for cultural differences is Geert Hofstede's Cultural Dimensions. Over the years, his study led to six cultural dimensions on which countries can be ranked: Power Distance, Individualism/Collectivism, Masculinity/Femininity, Uncertainty Avoidance, Long-term/Short-term Orientation and Restraint/Indulgence. Each dimension will be elaborated on below:

Figure 1: Hofstede's Cultural Dimensions

This dimension expresses the degree to which the less powerful members of a society accept and expect that power is distributed unequally: beliefs about the appropriate distribution of power in society. The fundamental issue here is how a society handles inequalities among people. People in societies exhibiting a large degree of Power Distance accept a hierarchical order in which everybody has a place and which needs no further justification. In societies with low Power Distance, people strive to equalise the distribution of power and demand justification for inequalities of power. China and Saudi Arabia are countries with a high Power Distance index.

The Individualism/Collectivism dimension is about the relative importance of individual versus group interests. The high side of this dimension, called individualism, can be defined as a preference for a loosely-knit social framework in which individuals are expected to take care of only themselves and their immediate families. Its opposite, collectivism, represents a preference for a tightly-knit framework in society in which individuals can expect their relatives or members of a particular in-group to look after them in exchange for unquestioning loyalty. A society's position on this dimension is reflected in whether people's self-image is defined in terms of "I" or "we." The USA is considered as one of the most individualistic countries in the world.

The Masculinity/Femininity dimension is about what values are considered more important in a society. The Masculine side of this dimension represents a preference in society for achievement, heroism, assertiveness and material rewards for success. Society at large is more competitive. Its opposite, femininity, stands for a preference for cooperation, modesty, caring for the weak and quality of life. Society at large is more consensus-oriented. In the business context Masculinity versus Femininity is sometimes also related to as "tough versus tender" cultures. Japan is considered to be a very masculine country, whereas Scandinavian countries such as Norway and Sweden are considered highly feminine.

Uncertainty Avoidance

The Uncertainty Avoidance dimension expresses the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity. In addition its impact on rule making is taken into account. The fundamental issue here is how a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? Countries exhibiting a high Uncertainty Avoidance maintain rigid codes of belief and behaviour and are intolerant of unorthodox behaviour and ideas. These countries often need many rules to constrain uncertainty. Countries with a low Uncertainty Avoidance index maintain a more relaxed attitude in which practice counts more than principles, tolerance for ambiguity is accepted and the need for rules to constrain uncertainty is minimal. South American countries such as Chile, Peru and Argentina are highly uncertainty avoiding countries.

Every society has to maintain some links with its own past while dealing with the challenges of the present and the future. Societies prioritize these two existential goals differently. Countries that score low on this dimension, for example, prefer to maintain time-honoured traditions and norms while viewing societal change with suspicion. They are past and present oriented and value traditions and social obligations. Countries with cultures that scores high on this dimension on the other hand take a more pragmatic approach: they are future oriented and encourage thrift and efforts in modern education as a way to prepare for the future. Asian countries such as China and Japan are known for their long term orientation. Morocco is a short term oriented country.

The Indulgence dimension is a relatively new dimension to the model. This dimension is defined as the extent to which people try to control their desires and impulses, based on the way they were raised. Relatively weak control is called Indulgence and relatively strong control is called Restraint. Cultures can, therefore, be described as Indulgent or Restrained. Indulgence stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun. Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms.

Figure 2: Hofstede's Cultural Dimensions Framework

Further Reading:

Hofstede, G. (2001). Culture's Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations. Second Edition, Thousand Oaks CA: Sage Publications.

Steers, R.M. et al. (2013). Management Across Cultures: Developing Global Competencies. Cambridge University Press.

Geert Hofstede Country Comparison Tool: https://www.hofstede-insights.com/product/compare-countries/

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Hofstede's Cultural Dimensions EXPLAINED with EXAMPLES | B2U

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Geert Hofstede's Cultural DImensions are used to compare countries based on national cultural differences and similarities. The six dimensions are Power

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The Four Basic Global Business Strategies 

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The Four Basic Global Business Strategies 

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It is essential to understand the differences between the four basic global business strategies not only as a consumer but essentially if you are a business owner looking to go global with your company. You can choose which niche you are trying to fill and how you want to go about it, and the four ways are great starting points in choosing. This webpage covers the differences between multi-domestic and transnational as they can be somewhat similar as the transnational includes parts of the multi-domestic as well as the standardization strategy.

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As large product manufacturing companies continue to grow their global reach and bring products to consumers in new countries, they learn lessons about different business strategies that need to be implemented to create a successful selling campaign. Two examples of these strategies are multi-domestic and transnational corporations. Consider which of these strategies fits your small business as you target more global opportunities.

Tip

Both multi-domestic and transnational companies provide businesses with opportunities to compete on a global scale. Multi-domestic companies tailor products to each country and its local environment while a transnational company retains its characteristics across the globe.

A company that follows a multi-domestic strategy fits its products to each country in which it does business. Your product features are tailored to the local domestic environment, taking into account different food preferences, religious customs and other characteristics that define the locality. If you feel the goods produced by your business would be better received by local customers, opt for this strategy to avoid being branded solely as a foreign company.

Transnational companies also sell products in multiple countries across the globe. This strategy differs, however, in the way the product is marketed in each country. A transnational product keeps its same characteristics, regardless of the country in which it is sold. The product does not change according to local customs or preferences, so that the product sold in Asia or Mexico is exactly the same as the version sold in the United States or Europe.

A very well-known cola soft drink is one example of a transnational product. This company's beverage recipe is kept secret and has not changed in many years. The product is sold in over 200 countries worldwide, and the company retains exactly the same beverage formulation in each country. The bottle's label may reflect the local language, but the logo and contents remain the same.

One of the nation's most popular hamburger chains is an example of a multi-domestic strategy. The company researches each country's local customs and foods before creating its menu items and opening up a store. For example, the restaurant's stores in India do not sell any sandwiches made with beef, since the Indian culture sees cows as sacred. American theme parks provide another example of multi-domestic companies.

One well-known park has successfully expanded its operations into France. The theme park caters to local customs and tailors the rides and attractions to the tastes of the European public. When the park initially opened, business suffered because the culture was too unfamiliar. The company did more research, tailored the park to local preferences, and saw business increase.

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Differences Between a Multidomestic & a Transnational Company

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Differences Between a Multidomestic & a Transnational Company. As large product manufacturing companies continue to grow their global reach and bring their products to consumers in new countries, they learn lessons about different business strategies that need to be implemented to create a successful selling ...

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Being aware of the U.S. - Mexico - Canada trade agreement is not only something an informed citizen should be educated about, but it is also very informative for business owners who want to go global. If I were going to globalize my business, I would look into trade agreements and try to take advantage of them and save money wherever I can.

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U.S. Customs and Border Protection Preview

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Overview

The U.S. - Mexico - Canada Agreement (USMCA) is a trade agreement between the named parties. The USMCA replaced the North American Free Trade Agreement (NAFTA).

U.S. Customs and Border Protection (CBP) has launched a USMCA Center to serve as a one stop shop for information concerning the USMCA. The USMCA Center coordinates CBP's implementation of the USMCA Agreement, ensuring a smooth transition with consistent and comprehensive guidance to our internal and external stakeholders.
USMCA Resource Center and Automotive Certification Portal
Entry-into Force

The USMCA entered into force on July 1, 2020. NAFTA preferential treatment cannot be claimed on July 1, 2020 or afterwards.

For merchandise entered into commerce on or before June 30, 2020, NAFTA rules will continue to apply.

CSMS #45309245 - USMCA - Consolidated Appropriations Act 2021 & End of Restrained Enforcement - On December 27, 2020, the Consolidated Appropriations Act of 2021 [H.R.133 - 116th Congress (2019-2020)] was signed into law. The Act contains technical corrections for the USMCA, including on merchandise processing fee refunds for post-entry claims (including for 520(d) and reconciliation claims) and on foreign trade zones. These technical corrections are retroactive to July 1, 2020.

On April 20, 2020, CBP published interim implementing instructions. These interim implementing instruction have been subsequently updated to reflect the published uniform regulations and General Note 11.

CSMS #43062320 - US-Mexico-Canada Agreement (USMCA) Updated Interim Implementation Instructions - On June 16, 2020, the U.S. Trade Representative published Updated Uniform Regulations for the USMCA's Chapter 4 (Rules of Origin) and Chapter 5 (Origin Procedures). This version of the document replaces the Interim Implementing Instructions issued on April 20, 2020.

CSMS #43215543 - US-Mexico-Canada Agreement (USMCA) Implementing Instructions (Final) - On June 30, 2020, the U.S. International Trade Commission published General Note 11, incorporating the USMCA into the Harmonized Tariff Schedule of the United States, and accordingly, CBP updated our USMCA Implementing Instructions. This version of the document replaces the Interim Implementing Instructions issued on June 16, 2020.

On December 27, 2020, the Consolidated Appropriation Act (Pub. Law No. 116-260) was signed into law, including several changes to the implementation of the USMCA. These changes are detailed in a January 12, 2020 addendum to the USMCA Implementing Instructions. Available in Spanish and French Translations.

Compliance Guidance

CBP will use this webpage to post informational links, compliance guidance materials, points of contact, and Frequently Asked Questions. Additional guidance on USMCA compliance for the trade community will be posted here as developed. This webpage will be continually updated.

CBP has recorded a webinar regarding USMCA compliance for the private sector. Please visit CBP's Trade Outreach via Webinar webpage for more information.

CBP urges the import/export community to monitor CBP.gov/Trade, the Cargo System Messaging Service, and @CBPTradeGov on Twitter for updates on USMCA implementation dates; regulatory drafting; Frequently Asked Questions and other compliance resources.

The USMCA contains provisions relating to the prohibition of the importation of goods sourced from forced labor. For additional information on CBP's enforcement against this prohibition, please visit our Forced Labor webpage.

Any format is acceptable, provided it contains nine (9) minimum data elements set out in the USMCA, Annex 5-A.  To facilitate compliance, CBP has created a suggested template for the USMCA and other free trade agreements.  Please note: this PDF does not work on all Internet Browsers.  The form will work best on Internet Explorer.

Additional information on how to make USMCA preferential treatment claims can be found on this website, including an instructional video (" How to Make a USMCA Claim ").

For CBP related questions on USMCA, please contact the offices listed below for assistance:

Additional Resources

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U.S. - Mexico - Canada Agreement (USMCA)

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The U.S. - Mexico - Canada Agreement (USMCA) is a trade agreement between the named parties. The USMCA replaced the North American Free Trade Agreement (NAFTA). U.S. Customs and Border Protection (CBP) has launched a USMCA Center to serve as a one stop shop for information concerning the USMCA.

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How to Develop/Professionally Scribe Company Policies and Procedures

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How to Develop/Professionally Scribe Company Policies and Procedures

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This webpage is an amazing resource as it not only tells you how to write company policies and procedures but it provides you with a free template to use as well.

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Article highlights

Why are policies and procedures important?

How to prepare for policy writing

How to write a policy and a procedure

How to implement new policies and procedures

We'll admit, sometimes policies and procedures are dry and boring. Sometimes they seem like common sense recitations of things that "go without saying." They cover things that you’d hope people know they should be doing, or not doing, as they go about their jobs.

But policies do more than that. They provide guidance, answer questions, solve ambiguities, detail best practices, and keep your people safe and out of legal trouble. They define the standards for conduct and appropriate behavior.

Policies and procedures are the framework that your organization is built on, reflecting your values and guiding your employees to success in their daily operations.

That means your policies and procedures manual shoulders the burden of creating your company's culture. They're the visions and expectations of your executive leadership, showing how employees are expected to carry out those visions and meet those expectations. They equip your staff to meet their strategic goals, reduce legal and regulatory risk, create standards for performance, and identify opportunities for improvement.

Why are policies and procedures important?

According to the Navex Global 2016 Ethics and Compliance Policy Management Benchmark Report, between 2013–2016, 44% of organizations faced legal or external regulatory actions where a policy came under review as part of the action or defense. In that same report, the authors found that 47% of organizations say keeping policies current with changing regulations is their number one challenge.

As you write new policies and procedures or rewrite your old ones, it's important to understand the difference between the two. Your policies are the high-level principles that set the tone for the entire organization. The procedures are how those policies are carried out. They also define the lower-level processes that shore up the policies.

That is, if employee safety is one of your bedrock policies, and the organization expects complete adherence to your safety policies, the procedures establish how those policies will be followed, such as the wearing and disposal of PPE (personal protective equipment), or the training requirements for handling hazardous materials.

This article will show you a few best practices for building a solid foundation in guiding your team toward success. We'll talk about how to prepare for writing your policies, how to write a policy and a procedure, and how to implement your shiny new policies and procedures.

How to prepare for policy writing

Sharpen your pencils, brew some coffee, and grab a doughnut, because it's policy writing time.

Writing policies and procedures can be a long and involved process, and you'll spend almost as much time preparing as you will actually writing.

Since these are the documents that affect how everyone works every day, you need to get it right. So here's how you can do that.

Develop a policy charter or mandate

Before you start writing any new policy, you need buy-in from top leadership. If it's anything more than a simple departmental requirement (e.g. dos and don'ts of the employee kitchen on the 7th floor), you need the highest leadership buy-in you can get.

After all, these policies will drive the culture of your office, there are also legal implications of these new policies. That means there will need to be several people involved in the final approval.

Once you have that executive mandate, now you can start the actual development.

Keep the end goal in mind

Consider why you're writing your new policies, and let that inform the actual writing process. Make sure the entire team, including management, understands and buys into the "why" early on. This will set the tone, content, and even the organization of your policy manual.

Use a standard policy and procedure template

Establishing a standard policy template makes each policy document clear and organized. It sets the standard for how all policies will be written and organized, so they are easy to understand and navigate.

Even if you create several new policies years later, the format will be easy to recreate because you set that standard now. This will also streamline the writing process and save a lot of time.

(You could even make a policy on policy writing.)

Here are a few ideas of what to include in your policy template:

Document Header: Information about the policy including title, effective/revision dates, approver's signature, and department.

Introduction/Purpose Statement: What is it about? What's the reason for having it?

Policy statement: What your organization's policy specific to the topic?

Definitions: It's important to define terms as you go, especially for words and phrases with multiple meanings, and for industry- or job-related terms. This makes policies easy to understand and could save you from arguing about definitions should you face litigation.

Procedures: Step-by-step instructions for routine tasks and operations. Ask the people who actually perform these tasks for help in writing the steps.

Conduct: Guidelines for proper behavior and restrictions on employee behavior. What are the consequences of a violation?

Reporting requirements: How do employees report an incident or violation? What's the procedure for reporting?

Select a technology to manage the process

You could always write all the policies in your word processor of choice, but then you have to share the document so everyone can mark up their own version, and then you've got several versions of the same document to wade through.

Or you could upload it to a cloud word processor, like Google Docs, which at least reduces the number of different versions you're juggling. Everyone can edit the same document and all the changes will be held in the same document. But you still need something that gives you version control and can map your policies to your accreditation and licensing requirements.

So it pays to use online policy management software in order to write your new policies. It makes everything visible and transparent, and you can even automate the approval process by your managers.

Form a policy management team

Depending on the size of your organization, you'll need a team to help you write your policies and procedures. It also helps you get more buy-in from stakeholders around the organization. Plus, it ensures you don't forget important information.

Since your policies will affect everyone across the organization, bring in people from different departments to help. Tap into the subject matter experts in how a particular department or role functions. Include the people who understand and can help you adhere to any local, state, and federal laws that affect how everyone functions.

Chron recommends defining an owner or admin to be responsible for managing the entire policy writing process, coordinating reviews, revisions, and distribution of the new policies.

Now that you have management buy-in, your team is assembled, and you have a structure and a technology solution, you're ready to actually start writing. Here's how that should work.

Prioritize a policy list

You can't write every policy at once and some are more important than others, so create a list of policies that need to be done first. Prioritize your new policies and revisions in order of importance and create an order and a timeline when they each need to be completed.

Meet with your policy team and decide what you need to address. Keep your end goal in mind when you're defining these priorities, as that will help you stay on track.

Conduct thorough research

Take a look at your existing procedures to zone in on how things are currently done.

You will also want to investigate any compliance issues that may have prompted your policy review.

There are a few ways you can investigate or research existing processes:

Interview those involved in day-to-day tasks

Shadow coworkers to see what current procedures are

Interview internal and external subject matter experts

Find up-to-date laws, regulations, and accreditation standards

Identify overlapping policies to ensure consistent language and requirements

Write an initial draft

Writing policies or procedures is not a one-and-done effort. The initial draft will require a few revisions. It makes sense to get feedback from stakeholders and coworkers, and you'll want to revise your draft based on everything you hear back from them.

Having someone other than the policy owner write the initial draft may help facilitate an outsider’s perspective, ultimately making your procedures more transferable to daily operations.

This could also help simplify the language and remove technical jargon that would clutter your document.

Don't use a lot of industry-specific terms, especially as your organization may cross several different licensing groups, functions, and even industries. The same acronyms and terms could mean different things to different employee groups, so you'll want to avoid confusion.

Limiting technical jargon will also make it easier for new hires, who may be new to the industry, to understand your policies and procedures.

Validate the procedures

To ensure your procedures make sense, you need to see them in action.

It’s always a good idea to go back to the employees who do the daily work and have them perform the procedures.

Remember, this only applies to the procedures portion of your manual, not the policies and prohibited actions.

Send draft out for review

Now that you have written a draft, it’s time to review it.

If a non-expert wrote the initial draft, you'll want to ask an actual expert to review it. This is key to your policy's success. You'll have to walk a fine line between your subject matter experts' need for thoroughness and your non-experts' need for clarity and simplicity.

You can  streamline the process by using policy management software, like PowerDMS, with audit trail features and version control. You'll be able to access each document's history so you can pinpoint any changes. This way, you can collaborate on revisions, ensuring none of your material gets lost or accidentally deleted.

Obtain final approval/sign off

Typically, you need someone on the executive team to sign off on each new policy. They are ultimately accountable for the policy, which means they need to officially approve the final draft. This should always be done by the highest level of leadership that makes sense for each policy.

For example, you don't need the CEO to sign off on new policies for cleaning up spills, but you do for workplace harassment or management of proprietary information. And the IT manager shouldn't be signing off on an Acceptable Use Policy; that goes to the CTO or CIO who is ultimately responsible.

How to implement new policies and procedures

Once you've written your new policies and procedures, you need to create a plan to ensure compliance. Here's how you can do it.

Distribute the new policies

Sure, you could print these out and create binders full of policies, but that's a waste of time and money, not to mention all the headaches it will create as soon as a single policy gets updated.

Instead, use a policy management software solution to store your policy manual. That way, your employees will be able to access them at any time, even outside the office. By keeping them in one place, your employees can easily search for them to answer any compliance questions they have.

You can also use the policy management software to distribute the policies, ensure everyone reviews and understands them, and even have them sign off on the documents. Further, you can track all the signatures to ensure full regulatory and accreditation compliance.

Create a training plan

Of course, reading a new policy is not the same as understanding the policy, especially if these are complex and/or legal requirements that required input form subject matter experts.

You'll want to develop training content so employees can understand the organizational expectations and the executive vision. Using a policy management solution that includes a training management tool can make things a whole lot easier.

You can create customizable online training that not only saves time and money, it helps your employees quickly understand your new policies. You can also test their knowledge and understanding with assessments, which will not only help with any compliance requirements, it can show you holes in your training and other materials.

Establish a review cycle

Laws and best practices are always evolving and technology is always changing, which means policies and procedures are living documents. So even though you're done writing the policies, that doesn't mean you're ever fully finished. (Policy management is an ongoing issue.)

Part of a healthy, robust policy management process means reviewing policies on a regular basis, such as reviewing policies on social media or bring-your-own-device every six months. Other policies may only need reviews and revisions once a year or every few years.

Including the review process as part of your writing process will help ensure the policies are never out of date. Just make sure to pay attention to any details that will need to be revisited, and keep the bigger picture and end goals in mind throughout the whole process.

Set yourself up for long term success

Your policy and procedure manual sets the tone for conduct in your organization and ultimately defines your daily operations. By taking the time to make yours effective, you're taking a big step toward positively developing your organization. Learn more about writing policies here.

The PowerDMS policy management platform can streamline the writing of policies and procedures, updating manuals, and mapping them to training and accreditation requirements. To learn more about using PowerDMS for policy creation and management, you can visit our website and request a free demo.

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How to write policies and procedures (with free template)

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Policies and procedures are the lifeblood of any organization, but writing them isn’t easy. Here are some best practices for writing policies and procedures.

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This informative youtube video dives deep into what benchmarking is and how to use it to your advantage in business. It also includes lots of examples which can be really helpful to understand concepts.

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Benchmarking : Concept, Steps, Application, And Types With Examples

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Advocacy Groups and Their Benefits to Businesses

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Advocacy Groups and Their Benefits to Businesses

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I love this scholarly article as it speaks upon the importance advocacy groups have in helping businesses reduce their pollution rates. Suppose a business can be shown alternative routes to help the environment. In that case, they can market sustainability and may even be able to save money depending on laws and regulations in whatever countries they may be present.

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Journal List

HHS Author Manuscripts

PMC2790601

J Organ Behav Manage. Author manuscript; available in PMC 2009 Dec 9.

Published in final edited form as:

PMCID: PMC2790601

NIHMSID: NIHMS127091

Abstract

An externality is a cost that a corporation’s actions impose on society. For example, a power plant may emit mercury, but might not pay for the cost of that pollution to the people living near the plant. It is possible to analyze a diverse range of problems of society in these terms, including the health effects of corporate practices, the unsustainability of manufacturing processes, and marketing of products contributing to environmental damage, and economic policies that maintain high levels of poverty due to effective lobbying by the business community. This paper examines the problem of externalities in terms of metacontingencies. Externalities continue precisely because there is no cost to the organizations for practices that impose these costs on third parties. The paper describes the cultural practices needed to influence governments are motivated to make corporations bear the true costs of their practices—costs that are currently imposed on others.

One of the central problems in societies’ efforts to ensure wellbeing is the presence of negative externalities of corporate practices. A negative externality is a cost imposed on society by the production or marketing of a good or service that the price charged for that good or service does not reflect (Organisation for Economic Cooperation & Development, 1993). For example, a power plant may emit mercury, but may not pay for the cost of that pollution to the people living near the plant. Tobacco companies market an addictive product that leads to cancer, heart disease, and more than 400,000 deaths in the U.S. (Centers for Disease Control & Prevention, 2006), but healthcare providers, employers, governments, smokers, and their families bear most of these costs. Food manufacturers market unhealthy foods that contribute to obesity and cardiovascular disease (Brownell & Horgen, 2004; Pollan, 2006; 2007) but do not pay for the treatment of these problems. A real estate developer builds a housing development, but a local government, and ultimately a city’s taxpayers, bear the true costs of roads and sewage systems. We can analyze a diverse range of society’s problems in terms of negative externalities, including health effects of corporate practices, the unsustainability of manufacturing processes, the marketing of products that contribute to environmental damage, and economic policies that maintain high levels of poverty due to effective lobbying by the business community.

At the outset, I want to state that this paper is not an attack on capitalism per se. The benefits of capitalism are unquestionable. They include all of the technologies available in the 21st century, including the computer on which I write this paper. It is only through the competitive processes of the marketplace that individuals and organizations have the incentives to innovate to produce better, more efficient, and less expensive goods and services. However, if the justification and support for capitalism is its contribution to human wellbeing, then wellbeing should be our ultimate goal. In that context, it is appropriate to see if societies can evolve cultural practices that retain the beneficial aspects of capitalism, while reducing its negative externalities.

The problem with externalities is that companies have little incentive to prevent them. Any cost a company incurs affects its profits. Thus, in a market system, corporations tend to select practices that detect and reduce such costs. However, they have no incentive to reduce costs that others bear. Indeed, companies may find it profitable to engage in activities that avoid the imposition of such costs upon themselves. They may litigate or lobby governments to prevent having the costs of externalities imposed on them; they may engage in public relations to obscure or counter the public perception that their actions impose costs on others, as ExxonMobil did regarding global warming, until recently (ExxonMobil Spends Millions…April 22, 2005).

Economists have argued that a straightforward way to deal with the problem of externalities is to impose a tax on practices that impose external costs, so that companies will have an incentive to reduce them (Gwartney & Stroup, 1987). The larger problem, however, is the imbalance between the power of corporations to avoid paying for externalities and the power of the individuals those externalities harm. Perhaps the most striking example involves the consequences of cigarette smoking over the past 50 years. Research in the 1950s showed that cigarette smoking caused lung cancer (Wynder & Graham, 1950); subsequent research showed that it caused heart disease (U.S. Department of Health & Human Services, 1983). In recent years, about 450,000 U.S. deaths have occurred annually due to smoking (CDC, 2006). In U.S. vs. Philip Morris et al. (2006), the federal district court in Washington, DC found that the tobacco industry had been aware of the harmful effects of cigarettes since the 1950s, but had conspired to convince the public that smoking’s harmfulness was unproven (U.S. v. Phillip Morris et al., 2006). It was not until the 1990s that individual smokers and governments that had borne the cost of smoking’s side effects began to recoup any of those costs (National Association of Attorneys General, 1998). Moreover, smoking continues to kill more than 400,000 Americans each year, while the cigarette industry continues to be quite profitable (CDC, 2006; Parker-Pope, 2001). From one perspective, this problem continues because the tobacco companies are better organized and more effective in influencing public policies that might have curbed their practices than were the victims of cigarette marketing in influencing policy to prevent these harms.

The problem of cigarette smoking is only an example of a more generic problem. In general, societies need ways that are more effective at detecting and ameliorating externalities. With this paper, I present a framework for dealing with the problem of externalities. The framework is derived from behavior analysis of human behavior and cultural practices (e.g., Glenn, 1988, 2004; Glenn & Malott, 2004), which is one branch of evolutionary analysis (Wilson & Biglan, in preparation). It first presents a method for identifying externalities that merit societal efforts to counteract them. It then analyzes the forces that maintain externalities. That analysis suggests that corporations have evolved practices to prevent society from imposing the costs of externalities on the companies. What seems needed, therefore, is strengthening the practices of advocacy groups to influence policies to ameliorate the most costly externalities. The last section of the paper outlines strategies for strengthening advocacy organizations.

Criteria for Targeting Externalities

Which externalities need targeting? Accepted principles of public health provide a framework for answering that question. In general, public health targets the most common and costly problems (Biglan, 1995). Infectious diseases have long been a high priority because, if they are not controlled, they have the potential to kill many people. Reducing disease depends on reducing the factors that contribute to the disease. Thus, public health has evolved practices such as sanitation and quarantine to prevent infectious diseases. As health experts have identified smoking, obesity, alcohol abuse, and risky sexual behavior as risk factors for disease, they too become targets for public health. Experts then develop practices to reduce the prevalence of these behaviors. In short, the generic features of public health involve identifying any disease, behavior, or cultural practice that contributes to the prevalence of common and costly diseases and developing practices that reduce the prevalence of that risk factor.

The framework extends to the practices of organizations. Manufacturing processes that lead to worker injury have substantially decreased in the last century. More recently, experts have identified the marketing practices of tobacco companies as a risk factor for smoking and thereby death, and have mounted efforts to restrict those practices (National Cancer Institute, in press; U.S. v. Philip Morris et al., 2006). Indeed, tobacco-marketing practices are a prototypical example of a corporate practice that produces externalities requiring restrictions.

Although these examples involve physical diseases and the factors that contribute to disease, the principles are generally applicable. It is possible to evaluate any practice in terms of the proportion of the population it affects and the extent of harm it causes. We might evaluate a company’s decision to reduce or eliminate healthcare costs or to reduce retirement benefits in terms of the number of people that decision affects and the extent of harm done to them. The marketing of fuel inefficient cars may contribute to the emission of greenhouse gases; it is then possible to estimate the impact of that marketing on the environment.

From this standpoint, corporate externalities that currently affect the most people in the most harmful ways should receive top priority. How far should this process go? Societies have slowly evolved increasingly higher standards for the wellbeing of their populations. Child abuse was once commonplace and accepted (deMause, 1990), as was child labor. At a minimum, I would argue that practices shown to have a direct effect on the economic wellbeing, physical illness, or psychological wellbeing of a significant proportion of the population should be the first ones we target. What proportion should we consider significant? Fortunately, for most aspects of wellbeing, there are increasingly accurate estimates of the proportion of the population in developed countries who are not doing well. For example, data exist on the rates of child poverty, major physical illnesses and, to a lesser extent, psychological disorders (Institute of Medicine, in preparation). The criteria for determining what proportion of the population a problem must affect in order for a nation to target that problem reflect its national aspirations. For example, are U.S. citizens satisfied that this country is last out of 25 developed nations in reducing its rate of child poverty?

Of course, the prevalence of a problem in a population is due to multiple influences; corporate externalities may be a minor influence on a problem. Epidemiologists have a procedure for determining the extent to which a risk factor contributes to a problem. It is population-attributable risk, an estimate of the proportion of cases one can attribute to a risk factor. For example, Pierce, Gilpin, and Choi (1999) estimated that advertising for Camel cigarettes influenced 2.1 million young people to become smokers between 1988 and 1998 and that 520,000 of them would eventually die of smoking related illness.

Evidence of this sort is not currently available for most corporate externalities, which points to the need for research to estimate the precise degree to which corporate practices contribute to problematic outcomes. Requiring such evidence will be a counterweight to the risk of imposing unjustified costs on corporations.

Some externalities are difficult to analyze in terms of significant harm to those alive today. A manufacturing or marketing practice (e.g., sale of fuel inefficient cars) that contributes to greenhouse gas accumulation is making no one sick at present. However, its long-term impact on human wellbeing could be very substantial (World Health Organization, 2002; 2008). The present framework nonetheless applies. We would target a manufacturing process if current scientific evidence finds that it contributes significantly to greenhouse gases because greenhouse gas accumulation threatens a large proportion of the people on the planet.

General Principles for Reducing Externalities

The economic analysis of externalities is very much in keeping with functional contextualist analyses of human behavior (e.g., Biglan & Hayes, 1996) and analyses of the metacontingencies influencing organizations’ actions (Biglan, 1995; Glenn, 1986; 1988). Overwhelming evidence points to the effects consequences have on human behavior (Biglan, 1995). We know that consequences shape most aspects of human behavior, from toilet training (Azrin & Foxx, 1974) to the cooperative behavior in small groups (Bay-Hintz, Peterson, & Quilitch, 1994). Moreover, evidence is growing that material consequences shape and maintain the practices of groups and organizations (Glenn & Malott, 2004). The evolution of group or organizational practices in areas as diverse as agriculture and war making have been analyzed in these terms (Biglan, 1995).

When applied to the problem of externalities, this framework suggests that companies have no incentive to reduce externalities, since they receive no negative consequences for producing them but likely will experience negative ones by reducing or eliminating them. Reducing pollution may increase the cost of a manufacturing process and thereby reduce profits. Eliminating marketing of cigarettes to youth will reduce market share and profits (Biglan, 2004; NCI, in press). In fact, most methods for reducing externalities involve imposing costs on the company that produces them.

Governments can impose taxes that increase the costs of a practice such as polluting the air (Gwartney & Stroup, 1987). In essence, the society charges a company for the costs it has been imposing on society. Society can then use the tax revenues to ameliorate the problem. Market systems, in which companies can buy and sell the right to engage in a costly practice (e.g., polluting), have proven an efficient way to motivate companies to reduce these costs (Congressional Budget Office, 2001). For example, a cap-and-trade system that set limits on sulfur dioxide and allowed low emission companies to sell their rights to emit sulfur dioxide to higher emitting companies was instrumental in reducing these emissions (CBO, 2001). However, the benefits of such systems are limited to situations where the cost tends to be widely dispersed. For example, there is a widespread benefit to reducing carbon emissions because they contribute to worldwide reductions in global warming. However, mercury emissions tend to fall near power plants. A cap-and-trade system for these emissions may result only in some areas having reduced harm while others continue in peril.

Governments can also simply prohibit a practice, as they have done with child labor, chlorofluorocarbons, and some forms of deceptive advertising. This involves increasing the cost of the practice; there are criminal penalties for failure to comply.

The costs of externalities could also increase by changing public perceptions. For example, if the harmful impact of a company’s failure to protect its workers’ safety is widely publicized, it may affect people’s willingness to buy its products. The company may no longer be able to afford to scrimp on worker safety.

The remedies mentioned thus far involve negative consequences for practices that produce externalities. However, this overlooks the possible value of positive consequences for companies that adopt less harmful practices. Research on the matching law (McDowell, 1988) has shown that the behavior of individual organisms is a function of the relative rate of consequences for different behaviors. Analogously, it seems likely that one could reduce a corporate practice not only by increasing the cost of the harmful practice, but also by increasing the profitability of a more desirable alternative practice. For example, pollution might decrease through incentives for installing pollution control equipment. Providing positive consequences for alternative practices may have the additional advantage of reducing resistance to efforts to bring about change in corporate practices.

There are additional possibilities. A corporation might decide to abandon a profitable practice simply because it concludes it is wrong or harmful. In this case, the leadership might come to value reducing a harmful practice more than it values profits, so that it becomes willing to achieve a reduced level of profit. The economics literature seldom countenances such a possibility. However, in a sense, any of the just-described strategies for reducing externalities ultimately involves changing the psychological value of practices and outcomes for the involved parties. Recent work on Relational Frame Theory (Hayes, Barnes-Holmes, & Roche, 2001) provides a framework for understanding how the value of a particular consequence is a function of the relations an individual has with that consequence and other stimuli. For example, a CEO who meets a person with an illness or disability caused by a company practice may come to value that practice in a new light. Similarly, taxing a polluting practice changes the value of the practice for corporate leaders. It is not different in kind from changing the value of a practice because corporate leadership makes psychological contact with the harm that a polluting practice inflicts on others.

However, the biggest problem society faces is not how to control externalities once it has identified them, but how to ensure that societies will take the steps needed to control them. Companies have incentives to prevent the imposition of costs on their externalities and have created sophisticated methods to prevent government action. We need to understand these processes before we can understand how society might develop effective methods of ameliorating negative externalities.

The Evolution of Corporate Influences on Policymaking

In a capitalist system, corporations adopt and retain or abandon practices because of their impact on profits (Biglan, 1995). Design, manufacturing, and marketing are obvious examples. Companies that design a better product, develop a more efficient method for manufacturing a product, or find the most effective ways to advertise a product are more likely to achieve profits; as a result, their practices will be more likely to continue (Glenn, 2004). Companies that fail to achieve profits because they fail to develop new and better products, manufacture products inefficiently, or fail to advertise them effectively, may become bankrupt. On the other hand, they may abandon ineffective practices in light of their failure to contribute to profitability.

From one point of view, all of this is basic economics. However, we could also usefully view this within an evolutionary framework. Practices are selected by their consequences (Biglan, 2003; Glenn, 2004; Glenn & Malott, 2004; Wilson, 2003; 2007). From this standpoint, the evolution of corporate practices is one example of the tendency of human groups in general to retain practices that contribute to their survival as a group and to abandon those that do not.

Design, manufacturing, and marketing practices are not the only ones selected by market forces, however. Companies will develop and maintain any practice if it contributes to profitability. If lobbying the government for a contract is profitable, then the company will invest in lobbying. If supporting politicians who are likely to vote for policies favorable to the company improves the company’s profits, the company may encourage its employees to donate to those politicians. If a public relations campaign can make the market more favorable for the company, the company will invest in public relations.

In addition, companies in the same industry typically have some common interests that motivate them to form industry associations to advocate and lobby for policies favorable to the industry. Trucking companies may lobby to keep fuel taxes low. The cigarette industry created the Tobacco Institute, which systematically obscured the effect of smoking on cancer and heart disease through a well-organized public relations campaign lasting over 40 years (U.S. v. Philip Morris et al., 2006). In general, such industry associations will work to prevent the imposition of externalities’ costs on the companies in their industry. These practices evolve because of their contribution to the profitability of the industry.

At an even higher level, the business community has evolved practices that ensure favorable conditions for business in general. Indeed, one can trace the conservative ascendancy of the past 30 years in the United States to the efforts by networks of business organizations and wealthy individuals to create a climate more favorable to business. Lew Lapham (2004) and Eric Alterman (2003) recount a 1971 seminal memo written by Lewis Powell before his appointment to the Supreme Court. Powell had received a request from his neighbor, Eugene B. Sydnor, Jr., who was Chairman of the U.S. Chamber of Commerce Education Committee, to provide ideas about how to improve public support for business. At the time, public trust of business was very low and there were growing concerns in the business community that government would adopt policies that would be increasingly harmful to business.

Powell recommended creating a network of effective advocates for business interests. The memo seems to have been an important impetus for sectors of the business community to support the creation or strengthening of think tanks and advocacy groups, such as the Heritage Foundation and the American Enterprise Institute, that effectively make the case for minimizing taxes and regulation on business. Simultaneously, it stimulated conservative groups to support the education of youth favorable to business interests and to nurture the careers of those they viewed as effective advocates for favorable business policies. Lapham and Alterman document how advocacy for business interests has grown since 1971, how public support for business-friendly policies has increased, and, as a result, how public policy has become more favorable to business in the United States.

The financial consequences to the network of business interests have been enormous and have easily justified their investments. For example, according to Federal Reserve Board (Friedman, 2006), in 1989 the wealthiest one percent of Americans owned 30% of the total wealth of $25 trillion, or $7.775 trillion (in 2004 dollars), while the poorest 50% owned 3 percent of the wealth—$763 billion. By 2004, the total wealth had risen to $50.25 trillion and the top 1 percent of wealthiest people owned 33% of the wealth or $16.774 trillion, while the poorest 50% owned $1.278 trillion only—2.5 percent of total wealth. The Congressional Budget Office analysis of the 2001–2003 tax cuts shows that they disproportionately favored the wealthy, continuing a trend that began in the 1970s (Kamin & Shapiro, 2004). For example, the top 1% of earners received a tax cut of about $41,000 in 2004, which was 40 times the amount received by those in the middle fifth of the income distribution.

The analysis describes the larger landscape within which efforts to reduce negative externalities must operate. The problem in controlling externalities is not one of identifying practices that are costly to others or even knowing how to reduce those externalities. It is a problem of gaining the influence to implement policies to affect them.

In a society with an elaborate, sophisticated, and well-funded network of organizations working to prevent any imposition of costs for the negative externalities of companies, we need a similar network of organizations to work for the wellbeing of those affected by externalities. Indeed, I would argue that the solution to the vast majority of society’s problems requires a network of sophisticated and well-funded organizations working for the common good.

The Role of Nonprofit and Advocacy Organizations

Nonprofit and advocacy organizations seem to be the primary way to counter corporate externalities. To the extent that persons harmed by a practice can organize to support action in their interest, they may be able—directly or indirectly—to influence corporate practices. I write this, not as a statement of fact, but as a hypothesis that might guide research. In essence, I am arguing that understanding advocacy organizations, their current and potential role in society, and the factors that might improve their impact could contribute to the improvement of human wellbeing, because it could lead to policies and practices to reduce negative externalities.

Advocacy organizations may be nonprofit or for profit. They include organizations that work to address a specific problem, such as heart disease or cancer, but they also include political advocacy organizations that receive no tax exemption for their efforts. In the U.S., nonprofits may not advocate for candidates, but they may advocate for public policies and even for ballot measures. (See http://www.mapaidsline.org/publicpolicy/vote/Restrictions.htm.)

The Generic Features of Effective Advocacy

The practices involved in reducing tobacco use, which have increasingly involved efforts to constrain tobacco company practices, provides one of the most well-documented analyses of effective advocacy (Biglan & Taylor, 2000).

The tobacco control movement includes four key features: (a) delivery of epidemiological evidence to the public and policymakers; (b) ongoing research to produce a growing body of evidence-based practices affecting smoking; (c) a network of organizations advocating for effective tobacco measures and/or doing research relevant to the problem; and (d) a surveillance system to track smoking and related practices, such as its marketing (Biglan, under review; Biglan & Taylor, 2000). Each practice involved in this effort contributed to strengthening other practices. As the movement enumerated—and communicated to a growing proportion—of the population the harmful consequences of smoking, support for control efforts and research on control efforts grew. Those efforts, in turn, strengthened the resources available to advocacy organizations.

A virtuous cycle formed in which information about the problem led to greater support for elaborating the extent of the problem and communicating that information to a wider and wider audience. These activities in turn led to policies that further supported the reduction in smoking. Examples of such policies include support for smoking cessation in the healthcare settings and restrictions on tobacco advertising (National Association of Attorneys General, 1998). The success of these evolving practices is evident in the change in both the rate of smoking in the U.S. and the spread of policies and norms that constrain smoking (Biglan & Taylor, 2000). For example, between 1965 and 2002, the rate of male smoking in the U.S. dropped from 51.6 to 25.2% and for females went from 34 to 20% (Bonnie, Stratton, Wallace, & Committee on Reducing Tobacco Use, 2007).

A similar virtuous cycle appears in most successful efforts to address public health problems. Mothers against Drunk Driving publicized deaths due to drunk driving and pushed for stronger laws and greater enforcement to reduce the problem. Notably, a significant reduction in alcohol-related car crashes accompanied these efforts (Fell & Voas, 2006). Those efforts have included control of alcohol sales to minors. MADD has not addressed restrictions on alcohol marketing to the extent warranted, however (Biglan, under review).

The Consequences Shaping the Practices of Advocacy Organizations

Unlike traditional for-profit organizations, advocacy organizations do not derive their financial support directly from their success in accomplishing their mission. That is, what they achieve with respect to altering harmful corporate practices does not result directly in funds to sustain their activities. Whereas the success of a for-profit corporation in marketing a product or service at a profit provides the funds that shape and sustain the organization’s practices, the success of an advocacy organization may or may not result in further funding. In essence, advocacy organizations must do two things: work for the targeted change and obtain funds to continue its activities. Such organizations may or may not be successful in the latter activity, and their success or failure in raising funds may have little to do with whether they are successful in advancing their advocacy agenda. For example, a health-promoting organization such as the American Cancer Society may conduct a campaign to influence people to quit smoking. It is possible for the campaign to have little influence on people quitting, but nonetheless to generate contributions to the organization because people perceive that the ACS is doing something useful. Conversely, the campaign could be very successful but be very costly and generate no contributions to the organization. Understanding these two different contingencies is critical in understanding how to strengthen the effectiveness of advocacy organizations in society.

Evolving Policies that Strengthen Advocacy Organizations

We are unlikely to have a significant effect upon a wide range of societal problems unless we strengthen the effectiveness of advocacy organizations. Typically, people concerned about a particular issue will seek to strengthen the resources and effectiveness of organizations working on that issue. However, a more generic analysis of the problem may point to policies that could improve the support and effectiveness of organizations working on the entire range of problems, which includes preventing harm resulting from externalities.

The fundamental problem in trying to evolve organizational practices to control corporate externalities effectively is to create a set of contingencies to shape and maintain effective practices among advocacy organizations. At the core, we must ensure that organizations working on negative corporate externalities have the resources necessary to advocate effectively. However, we also need to ensure that their advocacy practices are, in fact, effective. Here is a set of policies that could sharpen the contingencies that influence advocacy organizations to act effectively in the interest of public wellbeing.

Justification of the public benefit

If we are to have a class of organizations that receives increased societal support for working on externalities, we need societal agreement about what constitutes a sufficiently important externality. The public health principles enumerated above provide some guidance. Only externalities that affect the health of a significant proportion of the population would be targets and therefore only organizational practices targeting these externalities would qualify for enhanced public support. Examples include manufacturing and marketing practices shown through rigorous empirical research—including experimental designs—to harm public health. Elsewhere, I have argued that, in order to target a marketing practice there would need to be experimental evidence that the practice influences people to engage in an unhealthy behavior (Biglan, under review). That case is clear with respect to tobacco marketing, but the evidence is not yet clear regarding marketing of alcohol and unhealthy foods; experimental studies of the impact of current marketing practices for these products simply do not exist. For example, experimental analyses of the impact of exposure to advertising of these products might show that exposure significantly increases both the intentions of young people to use these products or their actual use of them. Other practices to target under this standard include those that have proven to contribute to global warming and those that increase the proportion of people living in poverty, such as payday loans (Federal Trade Commission, 2008).

Transparency

If advocacy organizations had a mandate to publish their goals annually, and to report on their actions and on the success or failure in achieving those goals, contributors and the public could gauge more precisely the value of those efforts. Such transparency would sharpen the contingency between effective advocacy and funding, as money would tend to flow to the organizations showing the greatest success. Nonprofit organizations are currently required to disclose their activities in some detail, but the transparency I am suggesting would involve considerably more detail and precision.

Greater tax benefits for contributions to qualifying organizations

When organizations meet the above criteria, their contributors could receive increased tax benefits. Although money donated to any nonprofit organization is currently deductible from one’s taxes, the amount deductible for giving to these organizations might increase. For example, people might be able to deduct from their taxes 150% of what they donate.

Advocating for Policies that Strengthen Advocacy Organizations

In essence, I propose creation of a special class of nonprofit advocacy organizations with the power and support to advocate for policies necessary to reduce corporate externalities. Any effort to create such a system will undoubtedly face opposition, not only from organizations with externality-producing practices, but also by advocacy organizations that would not qualify for the proposed benefits. Thus, achieving policies that could strengthen advocacy organizations would require its own effective advocacy.

Above I argued that corporate practices to prevent curtailing of externalities exist at three levels—individual companies, entire industries, and the business community as a whole. A similar analysis fits the advocacy sector. Individual organizations work on controlling specific externalities. Networks of organizations work on problems such as pollution, unsustainable environmental practices, tobacco control, and so on. However, I have been unable to identify organizations that work generally for policies to reduce externalities. Having such organizations may be essential for achieving the kinds of policies I propose. The generic analysis provided here is the intellectual framework that justifies creating such overarching advocacy organizations.

It may seem unlikely that society would ever agree to the types of policies I suggest. Corporate lobbies against them will claim they are radically at variance with the traditions of Western capitalist democracies. However, the history of the evolution of other cultural practices that have expanded human wellbeing suggests a different view. Consider London in the 19th century, when it was the world’s largest and wealthiest city: it was common for raw human sewage to run freely in the streets and empty into rivers that provided the city’s drinking water. The city leaders at that time would have seen our modern sanitation practices as radical indeed.

Consider the more recent example of how the U.S. and other developed nations have evolved economic management practices to reduce significantly the boom and bust business cycles that were common until the mid-20th century (Moynihan, 1975). Most experts once considered it a radical idea to manage an economy to prevent inflation and unemployment.

In each instance, practices emerged that improved human wellbeing. This happened because empirical evidence accumulated regarding the harm of the existing practices and sound evidence guided the implementation of more effective policies.

Conclusion

Scientists who study organizations are in a unique position to analyze externalities of corporations and the contingencies that influence both for-profit organizations and those working to counter negative corporate externalities. With this paper, I hope I have provided a framework to stimulate further research on these important problems. As evidence mounts that global warming is occurring much faster than earlier predicted (Lean, 2007), it becomes imperative for scientists to analyze how we can alter corporate contributions to this and other problems.

In 50 years, people may look back on this era and see it as a time when the scientific and public health communities failed to conduct the bold analyses needed to influence corporate practices and, as a result, societal systems that ensured human wellbeing collapsed (Diamond, 2004). On the other hand, they may say that, thankfully, science conducted effective contextual analyses that brought the practices of for-profit corporations in line with the long-term needs of human beings. Behavior analysis has the tools to specify the necessary actions of advocacy and for-profit organizations and to analyze the impact of changing the consequences of those actions. Their use on this problem could prove to be one the field’s greatest contributions to human wellbeing.

Acknowledgments

The National Cancer Institute (CA38273) and the National Institute on Drug Abuse (DA018760) provided financial support for the completion of the work on this manuscript. The author wishes to thank Christine Cody for her editorial assistance.

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The Role of Advocacy Organizations in Reducing Negative Externalities

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An externality is a cost that a corporation’s actions impose on society. For example, a power plant may emit mercury, but might not pay for the cost of that pollution to the people living near the plant. It is possible to analyze a diverse range ...

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The Pertinence of Technology in Business 

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The Pertinence of Technology in Business 

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Technology is very quickly evolving, especially in today's world. When businesses spend the money and effort to keep up to date on technologies they can use for their benefit, the possibilities are endless.

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Do you ever wonder what makes technology in business so important? The answer is simple and easy. Technology saves your time and effort, and on top of that, it enhances the security of your organization. Numerous factors determine the importance of technology in business because the role it plays is crucial for the operations to run smoothly and efficiently.

The corporate world cannot undermine the benefits technology provides to businesses as most of the tasks nowadays depend on the latest technological equipment. To keep the workflow streamlined, businesses need to implement advanced technology - tools that tech-developers have designed specifically for business operations.
Here are 10 reasons that illustrate the fact technology is no longer a want but a need:
Nowadays, many companies rely on different applications and software for communicating with others. Several technical aspects need to be considered before you choose the way of communication within your organization. For example, if you are looking for instant feedback, you should go for phone services because they provide quality voice with consistency as well as feedback. Other ways of communication include video conferencing, Skype and instant messaging. Effective communication ensures smooth operations and in some cases, high level of motivation as well. Employees of the organization are well-coordinated and informed about the tasks that they have to perform. Breakdowns in a communication system can cause multiple problems for the employees, which can be harmful to the company. Therefore, you should prepare and preoccupy yourself with contingency plans in case an issue arises in the communication system of the company.

There is no denying the fact technology increases the efficiency of the company. The advancements in the world of robotics and applied sciences help businesses facilitate their customers. Moreover, due to the emergence of artificial intelligence, companies can now make better use of technology. For instance, using chatbots as customer representatives to deal with customer queries. The implementation of technology in business saves time and effort involved in employing human labor and increases productivity, which is a huge advantage.

Online attacks are increasing at an alarming rate, which can prove to be very risky for businesses. Therefore, developers are designing cybersecurity defense systems to protect companies from dangerous threats. Since this is an era of cloud computing, the threat of cyber attack remains persistent. So, companies need to protect their data by enhancing the security of their online accounts that contain important information and data.

The role of technology in business is expanding at a breakneck pace. Employees also expect their supervisors to provide them with the latest equipment so that they can work effectively as well as efficiently. Moreover, the most recent technological equipment enabled the employees to complete their tasks with better results and increased productivity successfully.

With technology, there is no limit as to what you can achieve and accomplish. It provides an endless supply of knowledge and valuable insights. Conducting research has never been easier because you can instantly access the websites and search f or the things you are looking for. Having valuable insights puts you in a better position to deal with your customers. You are well prepared to meet their demands. Apart from that, technology helps you keep a close eye on your competitors. Stay aware of their moves and take necessary preemptive measures to adopt the latest market trends.

Technology is well-known for keeping employees engaged. It allows them to telecommute to work and encourages them to collaborate with each other for sharing files and essential information. In addition to this, technology also reduces the level of stress. Workload decreases when the assigned tasks are completed in the given time. Employees can also enjoy the flexibility to a certain degree. They can stay connected to the organization via smartphones etc. and perform work-related tasks remotely.

With the implementation of the latest technological equipment, businesses can explore tons of new markets to expand their operations and profitability. Technology can help in this regard by conducting complex calculations and forecasts with authentic results. Authentic results provide a better picture of management, enabling them to decide whether to go ahead with the plan or not. Moreover, technology is advancing with new gadgets being introduced in the market every other day. Companies can take advantage of this progression by implementing relevant technological gadgets. These gadgets can assist them in their operations, leading to better productivity and growth.

Through automation and artificial intelligence, technology has become the most crucial factor behind the success of every organization. Although it is a big-ticket in terms of money, the value it provides ultimately outweighs the high cost. Moreover, the use of the latest technology gives the company a competitive edge, which makes it a better organization than the rest of the competitors in the market. This improves the overall reputation of the brand and enhances its perception among the consumers, which is vital for expansion.

Technology enables businesses to reach more customers in less time than usual. This means they will be able to serve more customers than before. In addition to this, companies can easily coordinate with the suppliers when they need supplies to restore their inventory. The capacity to communicate and store information increases with technology, which is a huge advantage for large corporations.

The technology of Blockchain has enabled cryptocurrency to come into existence. Bitcoin is by far the most popular cryptocurrency available in the digital market. Just like the US dollar, cryptocurrency is also a medium of exchange. However, it is digital and encrypted to control the creation of multiple monetary units. This particular technology has enabled businesses from all over the globe to make safe and secure payments with full-fledged records. In simple terms, Blockchain is a digital ledger that maintains all the transaction records so that you know when and where your money is being transferred online.

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10 Reasons that Demonstrate the Importance of Technology in Business - ReadWrite

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Do you ever wonder what makes technology in business so important? The answer is simple and easy. Technology saves your time and effort, and on top of that, it enhances the security of your organization. Numerous factors determine the importance of technology in business because the role it plays is crucial for the operations to run smoothly and efficiently.

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Budgets are essential within businesses. Without budgeting, a company cannot survive, and so this page gives a crash course on business budgeting and how to achieve it.

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Reading Time: 5 minutes

According to a survey conducted by Clutch, 61 percent of small businesses have not created a formal budget. Without a budget, you may not understand how your business is performing.

Creating a budget helps you understand how much money you have, how much you have spent, and how much money you will need in the future. A budget can drive important business decisions like cutting down on unwanted expenses, increasing staff, or purchasing new equipment. If you end up with insufficient money, the budget can guide you in altering your business plan or prioritizing your spending on activities.

With the right budgeting plan, you can keep your business out of debt or find ways to reduce the debt it is currently facing.  A comprehensive budget can even be used for obtaining business loans from banks or other financial institutions.

In this guide, you will learn about the importance of a business budget, the components of a good budget, and the different types of budgets.

So, what exactly is a business budget?

A business budget is a spending plan for your business based on your income and expenses. It identifies your available capital, estimates your spending, and helps you predict revenue.

A budget can help you plan your business activities and can act as a yardstick for setting up financial goals. It can help you tackle both short-term obstacles and long-term planning.

Different types of budgets

Your final budget is usually a combination of inputs from several other budgets that are prepared at a departmental level. Let’s look at the different types of budget and how they contribute to drafting a business plan.

1. Master budget

A master budget is an aggregation of lower-level budgets created by the different functional areas in an organization. It uses inputs from financial statements, the cash forecast, and the financial plan. Management teams use master budgets to plan the activities they need to achieve their business goals. In larger organizations, the senior management is responsible for creating several iterations of the master budget before it is finalized. Once it has been reviewed for the final time, funds can be allocated for specific business activities.

Smaller businesses often use spreadsheets to create their master budgets, but replacing the spreadsheets with efficient budgeting software typically reduces errors.

2. Operating budget

An operating budget shows a business’s projected revenue and the expenses associated with it for a period of time. It’s very similar to a profit and loss report. It includes fixed cost, variable cost, capital costs, and non-operating expenses. Although this budget is a high-level summary report, each line item is backed up with relevant details. This information is useful for checking whether the business is spending according to its plans.

In most organizations, the management prepares this budget at the beginning of each year. The document is updated throughout the year, either monthly or quarterly, and can be used as a forecast for consecutive years.

3. Cash budget

A cash flow budget gives you an estimate of the money that comes in or goes out of a business for a specific period in time. Organizations create cash budgets using inferences from sales forecasts and production, and by estimating the payables and receivables.

The information in this budget can help you evaluate whether you have enough liquid cash for operating, whether your money is being used productively, and whether there is and whether you are on track to earn a profit .

4. Financial budget

Businesses draft this budget to understand how much capital they’ll need and at what times for fulfilling short-term and long-term needs. It factors in assets, liabilities, and stakeholder’s equity—the important components of a balance sheet, which give you an overall idea of your business health.

5. Labor budget

For any business that is planning on hiring employees to achieve its goals, a labor budget will be important. It helps you determine the workforce you will require to achieve your goals so you can plan the payroll for all of those employees. In addition to planning regular staffing, it also helps you allocate expenses for seasonal workers.

6. Static budget

As the name suggests, this budget is an estimate of revenue and expenses that will remain fixed throughout the year. The line items in this budget can be used as goals to meet regardless of any increases or decreases in sales. Static budgets are usually prepared by nonprofits, educational institutions, or government bodies that have been allocated a fixed amount to use for their activities in each area.

If you are starting a new business, the first budget you create might be a challenge, but it is a good learning experience and a good way to understand what works best for your business. The best place to start is getting to know your budget components. Initially you may need to make several assumptions to get your budget started.

1. Estimated revenue

This is the money you expect your business to make from the sale of goods and services.  There are two main components of estimated revenue: sales forecast and estimated cost of goods sold or services rendered. If your business is more than a year old, then your experience will guide you in estimating these components. If your business is new, you can check the revenue of similar local businesses and use those figures to conservatively create some estimated revenue numbers. But whether your business is new or old, it is important to stay realistic to avoid over-estimating.

2. Fixed cost

When your business pays the same amount regularly for a particular expense, that is classified as a fixed cost. Some examples of fixed costs include building rent, mortgage/utility payments, employee salaries, internet service, accounting services, and insurance premiums. Factoring these expenses into the budget is important so that you can set aside the exact amount of money required to cover these expenses. They can also be a good reference point to check for problems if your business finances aren’t going as planned.

3. Variable costs

This category includes the cost of goods or services that can fluctuate based on your business success. For example, let us assume you have a product in the market that is gaining popularity. The next thing you would like to do is manufacture more of that product. The costs of the raw materials required for production, the distribution channels used for supplying the product, and the production labor will all change when you increase production, so they will all be considered variable expenses.

4. One-time expenses

These are one-off, unexpected costs that your business might incur in any given year. Some examples of these costs include replacing broken furniture or purchasing a laptop.

Since it is difficult to predict these expenses, there is no certain way to estimate for them. But it’s wise to set aside some cash for this category to stay prepared.

5. Cash flow

This is the money that travels in and out of the business. You can get an idea of it from your previous financial records and use that information to forecast your earnings for the year you’re budgeting for. You’ll want to pay attention not only to how much money is coming in, but also when. If your business has a peak season and a dry season, knowing when your cash flow is highest will help you plan when to make large purchases or investments.

6. Profit

The final budget component is profit, which is a number you arrive at by subtracting your estimated cost from revenue. An increase in profit means your business is growing, which is a good sign. Once you have projected how much profit you are likely to make in a year, you’ll be able to decide how much to invest in each functional area of your organization. For example, will you use your profit to invest in advertising or marketing to drive more sales?

Conclusion

A budget is a road map for your business. It helps you predict cash flow, identify functional areas that need improvement, and run your operations smoothly. Successful businesses invest a lot of time and effort into creating realistic budgets, because they’re an efficient way of tracking the extent to which the business has achieved its goals. Creating a budget can get a bit overwhelming for new businesses as there are no previous figures to guide their budget estimates, but with some estimates based on the performance of competitors and an understanding of the components of a budget, you can complete your first budget and have a good road map for future budgets.

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Business budget 101: Importance, Components and Types | Zoho Books

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Creating a budget helps you understand how the money is moving in and out of your organization. Read this guide to understand the components and types of business budgets.

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How to Make Decisions Within a Business Environment 

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How to Make Decisions Within a Business Environment 

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Indeed is an online career finder, who they have many experts working under them. This article gives you advice from indeed itself on how to make decisions within a business environment and how to become more efficient at making them.

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Making good decisions is a key skill for personal and professional success. Making sound, logical decisions in your professional life can positively impact you, your colleagues and your organization. Applying effective strategies and techniques can help you improve your decision-making skills. In this article, we explain how you can become a better decision-maker.

What is a good decision-maker?

A good decision-maker chooses actions that give the best outcome for themselves and others. They enter into the decision-making process with an open mind and do not let their own biases sway them. They make decisions rationally, after researching alternatives and understanding the consequences.

Good decision-makers involve others when appropriate and use knowledge, data and opinions to shape their final decisions. They know why they chose a particular choice over another. They are confident in their decisions and rarely hesitate after reaching conclusions.

Anyone can be a good decision-maker. Making decisions is an integral part of any job, whether you are in an entry-level position or you make important choices on behalf of your company as an executive.

Read more: Decision-Making Methods for the Workplace

How to be a better decision-maker

Applying proven decision-making strategies should help you become a better decision-maker. When you must decide on work, take the following steps to determine the best option:

1. Consider your personality traits and characteristics.

2. Know your goals.

3. Collect information.

4. Consider all your options.

5. Imagine different scenarios.

6. Stay open-minded.

7. Eliminate options before making a final decision.

8. Understand some options have equal value.

9. Use your available time.

10. Embrace the consequences.

11. Learn from past decisions.

1. Consider your personality traits and characteristics

People have natural characteristics that can shape their decision making. Understanding your personality can help you identify how you currently make decisions and how you could make better ones. Some of the personality traits that may impact your decision-making are:

Overconfidence

This is a common trait that can compromise decision-making. Many people overestimate their performance and knowledge. Timing yourself completing everyday tasks can help you gain a more realistic understanding of your performance, and this knowledge can help you make better decisions about the number of assignments you can accept in a given period. Making decisions into a collaborative process can correct overconfidence. Seeking the opinions of others will improve your knowledge and help you make better decisions than you can alone.

Risk-taking or risk-averse

Natural risk-takers can make decisions without thoroughly considering the dangers, while people who are more wary of risks may prefer making safe decisions. Understanding your natural inclinations can help you identify the type of decisions you make and learn how to go against your instincts.

Natural bias

Everyone has biases and concerns that can impact decision making. Perhaps you have made assumptions about certain people in your professional or personal sphere. You may feel fearful of certain situations, like public speaking at meetings or flying for business trips. The media and the opinions of others can also shape thinking. For example, watching recent news stories about car accidents may make you more nervous about driving to meet a client. Think carefully about whether you let your biases and concerns sway your judgment and impair your decision making.

Read more: Time Management Skills: Definition and Examples

2. Know your goals

The decisions you make should help you or your company achieve goals. Identifying your individual goals and your business' goals can direct you toward the best choice. When you know what results you want, making decisions can be more straightforward.

For example, imagine you are considering whether to gain further qualifications. Identifying your professional goals can help you make the best decision for your future.

Read more: Setting Goals to Improve Your Career

3. Collect information

Understanding why you are making decisions, what your options are and the impact of selecting each option helps you make more informed and better choices. Your colleagues, industry experts, trusted friends and family members might also be able to guide you towards the best decisions. While they can be valuable knowledge sources, you should ultimately make your own decisions.

The most successful decision-makers know when they have collected enough information to make the best decisions. Once they have, they act decisively and move on, confident their choice is the best they could have made.

4. Consider all your options

The more alternatives you consider, the more likely you are to make successful decisions. Carefully considering a wide range of potential choices is best. Speaking to others during your decision-making process can offer fresh perspectives that may present alternatives you had not considered.

5. Imagine different scenarios

Imagining what could happen before you act can help guide you toward the best decision. Consider how your decisions would improve your life and the lives of others close to you. This approach can be more effective than making a list of pros and cons, as it recognizes not every benefit or drawback is weighted equally.

6. Stay open-minded

Resisting the urge to draw conclusions and staying open-minded until reaching a final decision can help you to overcome confirmation bias and make better decisions. It is a natural tendency to draw conclusions first, then seek out evidence that supports it. However, this method can cause overlooking important information.

7. Eliminate options before reaching a final decision

Having a variety of choices early in the decision-making process is important, but in time a wide range of choices can be overwhelming and confusing. Eliminating options throughout the decision-making process reduces these feelings. Discount choices when you learn they are not the right selections rather than researching them further. As you narrow your options, you can focus better on each one available and ultimately make the best decision.

8. Understand some options have equal value

The natural tendency to weigh and rank options undermines the concept that sometimes options have relatively equal value. You could research your options for days or weeks and still be unclear which is a better proposition. Understanding this and committing to one option or another is crucial for better decision making.

Consider a decision to work for one company over another. If the roles are similar, your annual salary and benefits may also be approximately the same. However, an attractive fixed salary falls relatively low on the list of factors for employee happiness. Other factors like appreciation for work, good relationships with coworkers and work-life balance are more crucial and harder to rank empirically, especially before you start working for an organization. When options seem equally weighted, commit to one option, then move forward.

Once you are confident your options are relatively equal, you might use a random decision maker online or a choosing wheel. Only use easy decision-maker tools when you feel all your options are equal since they cannot substitute your own knowledge.

9. Use your available time

Rushed decisions are rarely the best decisions. When someone makes decisions too quickly, they are often guided by biases and natural inclinations rather than objective information. Take advantage of the time you have available to make your decisions.

If someone wants a quick answer, ask whether you can have more time. While this is not always possible, extra time for gathering information and reflecting usually leads to better decisions. If you have limited time, try developing a counterargument for the decision you are considering. Debating with yourself, even for a short time, can help you make better decisions at the moment.

10. Embrace the consequences

Every decision you make has consequences for you, and potentially for other people as well. Try to adjust your thinking to make decisions without worrying about making mistakes. Though you need to consider potential outcomes, the safest option is not always the best one. If you choose carefully without fear holding you back, you can embrace the consequences to make the best decisions possible.

11. Learn from past decisions

Every time you make decisions, you can get better at it. Reflect on the choices you make and their outcomes. Note whether the results were entirely favorable or things could have gone better. Identify areas for improvement, and consider how you could better the outcome next time. Every decision you make provides a learning opportunity that should make you a better decision-maker.

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Making good decisions is a key skill for personal and professional success. Making sound, logical decisions in your professional life can positively impact you, your colleagues and your organization. Applying effective strategies and techniques can help you improve your decision-making skills. In this article, we explain how you can become a better decision-maker.

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What Type of Decision Making Style Do You Use?

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What Type of Decision Making Style Do You Use?

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This quiz published online by Kent State University helps you know what type of decision-making style you are most drawn to. This can help in the business setting and personal because we have to make decisions every day.

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Discover Your Decision Making Style Career Exploration & Development |

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I found this very important within the module as it shows how a business can grow with an organization. It gives a company an organizational design to follow.

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Greiner’s Model of Organizational Growth - Phases of Organizational Growth and Crisis

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Greiner’s Model of Organizational Growth describes phases and crises that organizations go through as they grow.

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This feedback test generator directly correlates with the importance of feedback in a business. It will take the questions you want and make them into a questionnaire, an excellent resource for any business, big or small!

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Feedback Loop’s agile research software is trusted by product and marketing professionals as their preferred resource for User Discovery and Concept Testing.

Learn how Feedback Loop helps you:

Create your test in minutes from pre-vetted and custom templates, upload a script, or request expert research guidance on-demand.

Target your audience from your team library or create a new custom audience based on your demographic and behavioral criteria.

Get your data in as little as a few hours or days depending on your audience criteria.

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Edgar Schein's 4 Key Elements of Organizational Structure 

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Edgar Schein's 4 Key Elements of Organizational Structure 

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Not only does this link provide you with the four fundamental concepts of Schein's organizational structure, but it also provides biographical information on who he was. He was a very impactful man in the business world.

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Edgar Schein is Sloan Professor of Management Emeritus at the Sloan School of Management at the MIT. With this book, Organization Culture and Leadership (4th Edition), the author has published a summary of his life long experience (born in 1928, PhD in Harvard of Social Psychology in 1952) of organizations.

For a blog writing about organizational cultures in the 21st century, this book is some kind of Holy Grail. There are many subjects this blog has tried to address that this book enlightens with wonderful ideas and tools, drawn on vast experience in big organizations such as DEC, Apple, Ciba-Geigy (now Novartis) or Amoco : the tight relationship between leadership and culture, the Doing / Being culture, the alignment of subcultures, the 3 levels, Survival Vs Learning anxiety, the roadmap for the organization to self assess its own values and assumptions etc ...

It aims at explaining what culture is, how it affects the organization, how to understand and decipher it and how to act on it with culture change. And it does succeed, providing excellent material, shedding direct light to one of the most misunderstood dimension of organizations.

I will resist copying the full book in this article (I may run into some legal and muscular problem if I try anyway) and limit to some quotes such as this one, which explains the raison d'être of #hypertextual :

"With the changes in technological complexity, the leadership task has changed. Leadership in a networked organization is a fundamentally different thing from leadership in a traditional hierarchy."

As usual for #hypertextual classic book reviews, this is more of a summary of the main ideas than a proper review. It has proved to be very difficult to curate contents out of this article as the book abounds with wisdom so I'm afraid it is a very long one (about 2500 words) ...
Culture : definitions
What is culture ? This is the definition Schein gives :

A pattern of shared basic assumptions learned by a group as it solved its problems of external adaptation and internal integration (...) A product of joint learning.

According to Schein, there are 4 categories of culture : Macrocultures (nations, occupations that exists globally, ...), Organizational Cultures, subcultures (groups within organizations, and microcultures (microsystems with or within organizations).

Schein identifies 3 levels of culture : artifacts (visible), espoused beliefs and values (may appear through surveys) and basic underlying assumptions (unconscious taken for granted beliefs and values : these are not visible). The latest being the more important since as Schein puts it " Human minds needs cognitive stability and any challenge of a basic assumption will release anxiety and defensiveness". Many change programs fails for that very reason.

According to the Emeritus professor, Leadership is the source of the beliefs and values and the most central issue for leaders is to understand the deeper levels of a culture (...) and to deal with the anxiety that is unleashed when those assumptions are challenged.

Check out this great diagram by Chad Renando describing these levels and corresponding assumptions in a telling post.

Aligning Subculture
Inside organizations, there may be different subcultures. Schein identifies three of them : operator's (based on human interaction, high levels of communication, trust and teamwork), engineers (elegant solution, abstract solutions to problems, automation and systems) and executives (financial focus, lone hero, sense of rightness and omniscience).

Schein is adamant that in any organization, the alignment between these three subcultures is critical : Many problems that are attributed to bureaucracy, environmental factors or personality conflicts among managers are in fact the result of the lack of alignment between these subcultures.

For more information check out #hypertextual blog post dedicated on this topic : 21st century management and the virtues of operator subculture
External adaptation and Internal Integration
This are the core problems groups and organizations are faced with : survival in and adaptation to the external environment and integration of the internal processes to ensure the capacity to continue to survive and adapt.

Ultimately, all organizations are socio-technical systems in which the manner of external adaptation and the solution of internal integration problems are interdependent

For long range growth, the author shows that the key is to keep the needs of the major stakeholders of the organization : investors, suppliers, managers and employees, the community and government and the customers.

For external adaptation, the main challenge companies face is to obtain a shared understanding and consensus on 1/Mission and Strategy, 2/Goals, 3/Means, 4/Measurement and 5/ Correction (repair strategies).

For internal integration the main problems according to the author are : 1/ Creating a common language, 2/ Defining group boundaries and criteria for inclusion and exclusion 3/ Distributing power authority and status 4/ Developing norms of trust, intimacy, friendship and love 5/ defining awards and punishment and 6/ explaining the unexplainable. All groups develop norms around these categories and if these norms get external tasks done while leaving the group reasonably free of anxiety, the norms become critical genetic elements of the culture DNA.
Reality and Truth
All kinds of society are based on deeper assumptions on general abstract issues.This is how people relates to reality and truth, time and space, human nature and how people should relate to each other. Reaching consensus for instance is a process of building a shared social reality. There are many different criteria for determining truth, from belief and morality (pure dogma and right / wrong dichotomy) to pragmatism (scientific method).

This does not only relate to how truth is defined but also to uncertainty avoidance (refer to Geert Hoftede Work). The ability to embrace uncertainty is a genuine advantage as, how Schein puts it, Organizational Cultures that can embrace uncertainty more easily will be inherently more adaptive. A key advantage in today's economy.
Time and Space
This is the second axis along which the structure of a culture is built. Anthropologists have noted that every culture make assumption about time. Schein identifies three types of organization depending on their time orientation : past, present and future. Hofstede again has found that economic development was correlated with a future orientation.

A second dimension for how we relate to time is the notion of monochronic and polychronic. Monochronic is a view of linear time that ca be split, wasted, spent etc ... This is typical of the western rational cultures. Some culture in Southern Europe or Middle East view time as polychronic, a kind of medium defined more by what is accomplished than by a clock, within which several things can be done simultaneously. In polychronic cultures, relationships are viewed as more important than short-run efficiency and may leave monochronic managers frustrated and impatient.

Besides, there may be different relation to time depending on the organisation subcultures. For instance, operators time frame is the present, while Engineering subculture (R&D) has a much longer and different time horizon.

Space has both a physical and a social meaning and feeling about distance have biological roots. This ends up in different levels of distance (intimacy, personal, social, public) whose length may differ depending on the culture. Also space includes a symbolic value through different allocations (executives at the top of the building, managers with dedicated office etc ...). This is one of the reason why the introduction of new communication technologies (email, collaborative spaces, social networks) causes anxiety : it forces to the surface assumptions that have been taken for granted in terms of relation to space.
Human nature, activity and relationships

This set of issues and dimensions reviewed constitute a kind of grid against which to map a given organizational culture.

Douglas Mc Gregor has a well-known framework on this subject known as Theory X (managers believe people are lazy and must be motivated and controlled) and Theory Y (people are basically self-motivated and need to be channelled and challenged). The latter assume it is possible to design organizations that enable employee needs to be congruent with organizational needs. This is the dimension of organizations seeking to grow and to dominate their market.

A second useful framework is the one about orientation. There is the Doing orientation whereby nature can be controlled and manipulated, there is a pragmatic orientation toward the nature of reality and a belief in human perfectibility. On the other hand, the Being orientation where nature is powerful and human is subservient to it, an orientation that implies fatalism and enjoying what we have, here and now. This is the orientation of organizations looking for a niche, trying to adapt to external realities rather than creating markets.

In between both there is the Being-In-Becoming organization where the focus is on development rather than on a static condition. It is more on what the person is and can become rather than what the person can accomplish.

This human related dimension is critical in making the organization safe for all.
Culture Typologies
Typologies are abstract construct that are derived from factor analyzing perceptual data. These construct help in providing some order out of observed phenomena and predicting some new phenomena that may arise. These are abstract and therefore do not reflect adequately the reality. Yet they help in comparing different organizations.

Gathering data on an organization can be achieved by asking employees how they perceive their organisation in terms of purpose, strategy or mission.

There are different types of organizations : coercive (prisons, military camp ...), utilitarians (private companies), and normative (political parties, non profit ...). Some type of organizations fit the culture and in Asian or Latin countries for instance, Business cannot be effective unless they are coercive.

Another axis of culture typology is the variation of authority. It can range either be : autocratic, paternalistic, consultative, participative, delegative and abdicative. The search for the universally correct leadership is doomed to failure because of cultural variation, organization history and the actual task to be performed.

There are four types of organisation depending on their orientation : power (autocratic founders), achievement (results), roles (bureaucracies) and support.

Another typologie can be carried out along 2 dimensions : solidarity (like-minded) and sociability (friendly). Low on both is Fragmented, High on solidarity alone is Mercenary, High on Sociability alone is Communal and High on both is Networked.
Leadership and culture
Cultures basically spring from three sources : 1/ beliefs, values and assumptions of founders 2/learning experience of group members and 3/new beliefs brought in by new members/leaders. The first one is by far the most important. Leadership is highly sought by group members to reduce the group's anxiety.

Again, if the way to do things allow to get task completed while keeping group anxiety at a low level, this will become organizational culture. But if the environment changes and those assumptions become dysfunctional, the organization must find a way to change its culture. This is the role of the leader as John Kotter reported in his book What Leaders Do.

There are embedding mechanisms a leader defines that will define the culture. What leaders measures, how he reacts to critical incidents, how he allocates resources, how he allocates rewards and status, how he recruits, promotes and excommuniates. Then there are the structural mechanisms (organization structure, procedures, rituals, physical spaces, stories, statements. Through the way leaders handle these mechanisms (embedded and structural) they communicate both explicitly and implicitly on their assumptions. If they are conflicted, these conflicts become part of the culture.
Deciphering and assessing cultures
Before acting on a culture it is strongly recommended to decipher it to define the change strategy and/or to understand what is wrong. Deciphering a culture can be carried out using the following pattern :

1. Visit and observe

2. identify artifacts and processes that puzzle you

3. Ask insiders why are things done that way

4. identify espoused values tha appeal to you and ask how they are implemented

5. Look for inconsistencies and ask about them

6. Figure out from the above the deeper assumptions that determine the observed behavior.

However, deciphering a culture requires the analyst to understand the potential consequences of an investigation and clearly communicates this to executives : the members of the organization may not want to know or may not be able to handle the insights into their own culture.

Schein also proposes a framework for a company to assess its own culture rapidly. This is one day workshop, bringing together one or more representative groups (with an external consultant to manage the workshop) : culture is a group phenomenon so it's best assessed in a group context. Here are the steps :

1. obtaining leadership commitment : leader should also emphasizes that openness and candor are needed and that culture is not good or bad).

2. Selecting groups for self assessment

3. explaining the purpose of the workshop

4. selecting an appropriate setting for the workshop

5. a short lecture on how to think about culture (with the 3 levels of culture)

6. identifying artifacts (what is going on here)

7. identify espoused values (why are we doing things our way ?)

8. identify shared underlying assumptions (do the espoused values explain the artifacts or is there anything more ?) - this is the most important step : once assumptions are made conscious, it triggers a whole new set of insights and begins to make sense of things that weren't making any sense before.

9. identify cultural aids or hindrance (within artifacts, values and assumptions which are the ones that help / hinder the goal). It is much easier to draw on the strengths of the culture than to overcome the constraints by changing the culture.

10. decide on next step

Managing Culture Change
Edgar Schein proposes a conceptual model for culture change (chapter 17). The most important takeaway is this : change creates learning anxiety (leaving what we know to something we don't). This learning anxiety can be fueled by any of the following (valid) reasons : fear of loss of power/position, fear of temporary incompetence, fear of subsequent punishment, fear of loss of personal identity and fear of loss of group membership. The higher the learning anxiety, the stronger the resistance and the defensiveness.

Change agents must draw on Survival Anxiety (what will happen if we don't do anything) to unfreeze the situation and make sure that Survival Anxiety is greater than Learning Anxiety. This is similar to the Burning Platform of Darryl Conner or the S ense of Urgency of John Kotter. In order to achieve this, it is strongly recommended to lower Learning Anxiety in a view to create psychological safety, doing the following : communicating a compelling vision, formal training, involvement of the learner, informal training of groups, practice fields coaches and feedback, positive role model, support groups in which learning problems are discussed and consistent systems and structures with the new way of thinking and working. The only way to overcome resistance is to reduce the learning anxiety by making the learner feel "psychologically safe".

The change goal must be defined concretely in terms of the specific problem you are trying to fix, not as culture change. The change may not be possible without cognitive redefinition whereby people will have to unlearn the former way of working to learn the new one. This unlearning period is psychologically painful. These new cultural elements can only be learned if the new behavior leads to success and satisfaction.
Organizational Culture and Leadership
This is a wonderful book moulded with wisdom and experience and it provides unvaluable scientific hindsight to something we generally are quite uncomfortable and clumsy with. No doubt #hypertextual will relentlessly come back to it.

If you're interested in going into even deeper details, check out the 2 sequels of these reviews on #hypertextual :

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Edgar Schein : Organizational Culture and Leadership

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Edgar Schein is Sloan Professor of Management Emeritus at the Sloan School of Management at the MIT. With this book, Organization Culture and Leadership (4th Edition), the author has published a summary of his life long experience (born in 1928, PhD in Harvard of Social Psychology in 1952) of organizations.

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This Slideshare goes into great detail about centralization, decentralization, and formalization. We covered them as additional organizational structures, and I figured it would be important to focus on them a little bit more

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Just for you: FREE 60-day trial to the world’s largest digital library.

The SlideShare family just got bigger. Enjoy access to millions of ebooks, audiobooks, magazines, and more from Scribd.

Read free for 60 days

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This link includes a video and a practice quiz on departmentalization in management. It was covered within the module, and I found it very interesting.

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What is Departmentalization?

Departmentalization involves dividing an organization into different departments, which perform tasks according to the departments' specializations in the organization. Departmentalization as a means of structuring an organization can be found in both public and private organizations. An organization can structure itself into departments in the following ways.

Functional Departmentalization

In functional departmentalization, an organization is organized into departments based upon the respective functions each performs for the organization. For example, a manufacturing company may create a production department, sales and marketing department, an accounting department, and a human resources department. Functional departmentalization may be advantageous because it can increase efficiency and expertise since all related activities are performed in one place by one group of people that specialize in that activity.

Geographic Departmentalization

In geographic departmentalization, an organization is organized along geographic lines. This is often a good idea for large multinational firms with offices around the world. All activities related to the organization's activities in each region are handled by a department in that region. One advantage of this method is that it ensures the development of expertise specific to the political, social, and cultural needs of the region. Moreover, sending managers to work in each region provides excellent training for upper level management positions where a broad perspective is required for success.

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types & advantages - video & lesson transcript | study.com

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Departmentalization in Management: Definition, Types & Advantages - Video & Lesson Transcript | Study.com

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Departmentalization involves dividing an organization into different departments, which perform tasks according to the departments' specializations in the organization. Departmentalization as a means of structuring an organization can be found in both public and private organizations. An organization can structure itself into departments in the following ways.

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A Brief Introductory Video to Human Resource Management 

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A Brief Introductory Video to Human Resource Management 

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As module six heavily covers human resource management, I thought it would be beneficial to find an introductory video explaining it. This video exemplifies all of the basics!

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What is human resource management (HRM)?

Human resource management (HRM) is the practice of recruiting, hiring, deploying and managing an organization's employees. HRM is often referred to simply as human resources (HR). A company or organization's HR department is usually responsible for creating, putting into effect and overseeing policies governing workers and the relationship of the organization with its employees. The term human resources was first used in the early 1900s, and then more widely in the 1960s, to describe the people who work for the organization, in aggregate.

HRM is employee management with an emphasis on employees as assets of the business. In this context, employees are sometimes referred to as human capital. As with other business assets, the goal is to make effective use of employees, reducing risk and maximizing return on investment ( ROI).

The modern term human capital management () is often used by large and midsize companies when discussing HR technology.

The importance of human resource management

The purpose of HRM practices is to manage the people within a workplace to achieve the organization's mission and reinforce the corporate culture. When people management is done effectively, HR managers can help recruit new employees who have the skills to further the company's goals. HR professionals also aid in the training and professional development of employees to meet the organization's objectives.

A company is only as good as its employees, making HRM a crucial part of maintaining or improving the health of the business. Additionally, HR managers monitor the state of the job market to help the organization stay competitive. This could include ensuring compensation and benefits are competitive, events are planned to keep employees from burning out and job roles are adapted based on the market.

Human resources permeates every layer of an organization, from recruiting to data management.

How does HRM work?

HR professionals manage the day-to-day execution of HR-related functions. Typically, human resources is a standalone department within an organization.

HR departments vary in the size, structure and nature of their individual positions. For small organizations, one HR generalist might perform a broad array of functions. Larger organizations have several HR professionals who handle specialized roles, such as recruiting, immigration and visas, talent management, employee benefits and compensation. Though these HR positions are specialized, job functions might still overlap.

Amazon is an example of a large company with multiple types of specialized HR positions. The company's career website lists the following HR job titles:

HR assistant.

HR business partner.

HR manager.

Recruiter.

Recruiting coordinator.

Recruiting manager.

Immigration specialist.

Leave of absence and accommodation specialist.

Compensation specialist or manager.

Benefits specialist or manager.

Talent management specialist or manager.

Learning and development specialist or manager.

HR technology or process project program manager.

HR analytics specialist or manager.

Objectives of human resource management

HRM can be broken down into the following four category objectives:

1. Societal objectives. These are measures put in place to respond to the ethical and social needs or challenges of the company and its employees. This includes legal issues such as equal opportunity and equal pay for equal work.

2. Organizational objectives. These are actions taken to ensure organizational efficiency, including providing the appropriate training, hiring the right number of employees for a given task and maintaining high employee retention rates.

3. Functional objectives. These are the guidelines used to keep HR functioning properly within the organization. They include ensuring all HR resources are allocated to their full potential.

4. Personal objectives. These are the resources used to support the personal goals of each employee. They include opportunities for education and career development, as well as maintaining employee satisfaction.

Human resource management has four main objectives that drive its mission.

More specific objectives of HRM include the following:

Provide and maintain productive employees.

Make full use of the skills and abilities of each employee.

Ensure employees have and receive the proper training.

Build and maintain a positive employee experience with high satisfaction and quality of life, so that employees can contribute their best efforts to their work.

Communicate company policies, procedures, rules and regulations to employees.

Maintain ethical, legal and socially responsible policies and behaviors in the workplace.

Manage internal and external changes that might affect employees and staffing.

Skills and responsibilities of an HR manager

HRM is typically broken into pre-employment and employment phases, as well as more specific subsections, with an HR manager assigned to each one. Areas of HRM oversight include the following:

HR managers benefit from having skills and experience in a range of areas. The most essential HRM skills that professionals should possess include the following:

Communication. A high-level of verbal and written capabilities is required in most HRM jobs.

Recruitment and talent acquisition. Tasks in this area include writing job descriptions, conducting interviews, assessing candidates, negotiating offers and onboarding new employees.

Employee relations. HR managers must have labor relations skills to address grievances and build positive employee experiences.

Compliance with legal requirements. HR managers must be up to date with employment laws and regulations.

Conflict management and resolution. Mediation capabilities help HR managers resolve conflicts and other difficult situations.

Performance management. Managers must set performance standards and help employees develop skills to achieve them.

Strategic thinking. HR manager jobs require high-level thinking, such as aligning HR strategies with the company's goals.

Analytics. Data analysis skills help analyze workforce metrics and provide insights for decision-making.

Adaptability. HR managers must be able to deal with changing workplace and societal issues on an ongoing basis.

Ethics and confidentiality. These skills require knowledge of confidentiality and privacy requirements, as well as general and industry-specific ethical standards.

HRM software

Almost all areas of HRM have sophisticated software that automates HR processes to varying degrees, along with other features, such as analytics. For example, job candidate recruiting has seen enormous growth in the number of software tools and management systems that match employers and job candidates. Those systems also manage other steps in the hiring process, such as interviewing and vetting.

HRM software is often provided as on-premises systems. However, nearly every area of HR tech has moved to cloud-based software-as-a-service platforms.

There are several vendors in the HRM market, including ADP, BambooHR, HROne, Isolved, Paycom, Paylocity, Personio, Rippling, SAP and Workday.

HRM career opportunities and requirements

A bachelor's degree is typically required for a career in human resource management. Some colleges offer HRM degrees that provide a career path into an entry-level HR position. Another way to land a job in HR is to complete an undergraduate course of study in a related field, such as business administration.

Several years of experience in operations-heavy roles can be valuable when making a career transition to an HR position. For those lacking a relevant undergraduate degree or translatable work experience, there are HR-specific master's degree programs to help build the necessary knowledge, skills and qualifications.

HRM history

Modern human resource management can be traced back to the 18th century. The British Industrial Revolution gave rise to large factories and created an unprecedented spike in demand for workers.

With many of these laborers putting in long hours -- often clocking 16-hour workdays -- it became apparent that worker satisfaction and happiness had a strong positive correlation with productivity. Seeking to maximize ROI, worker satisfaction programs were introduced. Factory conditions, safety concerns and workers' rights also began getting attention in the late 19 th and early 20 th centuries.

HR departments within organizations began appearing in the 20th century. They were often known as personnel management departments that dealt with legal compliance requirements and implemented worker satisfaction and safety programs. Following WWII, the U.S. Army's training programs were used as a model in some companies that started to make employee training a point of emphasis.

Personnel departments took on the human resources label in the 1970s. The primary factor that differentiates HR from personnel management is the way technology began to be used to improve communication and access to employee information.

HRM trends

Job opportunities for careers in HRM remain strong. Companies are recognizing the strategic difference a good human resource department can make and are investing in them accordingly. As a result, HR jobs are growing in demand.

According to the U.S. Bureau of Labor Statistics (BLS), HRM job titles are expected to grow 5% in the U.S. between 2022 to 2023. Salary prospects remain strong; the median annual salary for an HR manager was approximately $130,000 in May 2022, according to the BLS. For HR specialist positions, median salaries were more than $64,000 at that same time.

Can small businesses use HRM?

Small businesses might have limited resources and a smaller workforce compared to larger companies, making HRM more difficult to implement. However, HRM principles and capabilities can be advantageous for small businesses in the following ways:

Effective hiring. Small businesses can use HRM practices to identify and attract the right talent, ensuring each employee contributes significantly to the company's success.

Compliance. Employment laws apply to businesses of all sizes. HRM can help small businesses navigate the complex legal landscape, reducing the risk of costly legal issues.

Employee development. HRM encourages investment in employee development, which can give small businesses a competitive advantage. Carefully designed training and development programs enhance employee skills and contribute to the company's growth.

Conflict resolution. Small teams are especially vulnerable to conflicts and disruptions. HRM practices provide structured methods to address and resolve conflicts and maintain a harmonious work environment.

Retention and engagement. HRM helps small businesses with close-knit work cultures foster employee engagement and loyalty, reducing turnover and recruitment costs.

Strategic planning. HRM aligns HR strategies with business goals, ensuring every HR initiative contributes to the company's strategic plans.

Scalability. As small businesses grow, their HR needs evolve. HRM practices can scale to accommodate changing workforce requirements and the demands of new organizational structures.

Human resource management is key to enterprise success. Learn how to choose the perfect HR software system.

Continue Reading About human resource management (HRM)

Dig Deeper on Talent management

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What is Human Resource Management (HRM)? | Definition from TechTarget

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Human resource management (HRM) encompasses the tasks and processes involved in managing and retaining employees. Learn why it's important and how it works.

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Being such a current hot topic in our country, discrimination has been a problem for centuries. This government website not only provides the laws that have been put into place to deter it, but it also provides the history of why it was.

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Equal Employment Opportunity Commission

The laws enforced by EEOC makes it unlawful for Federal agencies to discriminate against employees and job applicants on the bases of race, color, religion, sex, national origin, disability, or age. A person who files a complaint or participates in an investigation of an EEO complaint, or who opposes an employment practice made illegal under any of the laws that EEOC enforces is protected from retaliation.

Title VII of the Civil Rights Act of 1964. Title VII of the Civil Rights Act, as amended, protects employees and job applicants from employment discrimination based on race, color, religion, sex and national origin. Title VII protection covers the full spectrum of employment decisions, including recruitment, selections, terminations, and other decisions concerning terms and conditions of employment. See EEOC guidance on race/color, religion, sex, sexual harassment, pregnancy, and national origin discrimination.

Equal Pay Act of 1963. The Equal Pay Act of 1963 protects men and women from sex-based wage discrimination in the payment of wages or benefits, who perform substantially equal work in the same establishment. See EEOC guidance on equal pay and compensation discrimination.

Age Discrimination in Employment Act of 1967. The Age Discrimination in Employment Act (ADEA), as amended, protects persons 40 years of age or older from age-based employment discrimination. The Older Workers Benefit Protection Act amends several sections of the ADEA and establishes conditions for a waiver of ADEA protections. See EEOC guidance on age discrimination.

Rehabilitation Act of 1973. Sections 501 and 505 of the Rehabilitation Act, as amended, protects employees and job applicants from employment discrimination based on disability. This law covers qualified employees and job applicants with disabilities. It also requires Federal agencies to make reasonable accommodation of any known disabilities unless such accommodation would cause an undue hardship. See EEOC guidance on disability discrimination.

The Civil Rights Act of 1991. The Civil Rights Act of 1991 amends several sections of Title VII to strengthen and improve Federal civil rights laws and provide for the recovery of compensatory damages in Federal sector cases of intentional employment discrimination.

Additional information about unlawful discriminatory and retaliatory practices and the remedies is available to Federal employees and applicants who believe they have been subjected to such practices.

Office of Special Counsel and the Merit Systems Protection Board

Other laws enforced by both the Office of Special Counsel (OSC) and the Merit Systems Protection Board (MSPB) protect Federal employees from certain prohibited personnel practices. According to Section 2302(b) of Title 5 of the United States Code, any employee who has authority to take, direct others to take, recommend or approve personnel actions may not:

Discriminate on the basis of race, color, religion, sex, national origin, age, disability, marital status, or political affiliation.

Solicit or consider employment recommendations based on factors other than personal knowledge or records of job related abilities or characteristics.

Coerce an employee's political activity or take action against any employee as reprisal for refusing to engage in political activity.

Deceive or willfully obstruct a person's right to compete for employment.

Influence any person to withdraw from competition for a position to improve or injure the employment prospects of any other person.

Give unauthorized preference or advantage to any person to improve or injure the employment prospects of any particular employee or applicant.

Engage in nepotism.

Retaliate against an employee or an applicant because of an individual's legal disclosure of information evidencing wrongdoing ("whistleblowing").

Retaliate against an employee or applicant for exercising an appeal, complaint or grievance right; testifying or assisting another in exercising such a right, cooperating with an Inspector General or the Special Counsel, or refusing to obey an order that would break a law.

Discriminate against an employee based on conduct which is not adverse to on-the-job performance of the employee, applicant, or others. The Office of Personnel Management (OPM) has interpreted the prohibition of discrimination based on "conduct" to include discrimination based on sexual orientation. See Addressing Sexual Orientation Discrimination in Federal Civilian Employment.

Violate veterans' preference requirements.

Violate any law, rule, or regulation which implements or directly concerns the merit principles.

For additional information about Federal employee and applicant protection regarding prohibited personnel practices, you may call the FTC Office of Inspector General (202) 326-2800, the Office of Special Counsel (202) 653-7188 or visit its website, or you may call the Merit Systems Protection Board (202) 653-6772 or visit its website. You may also contact the FTC's Office of Human Resources Management at (202) 326-2021.

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Protections Against Discrimination and Other Prohibited Practices

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Equal Employment Opportunity Commission The laws enforced by EEOC makes it unlawful for Federal agencies to discriminate against employees and job applicants on the bases of race, color,

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Managers have to make a great first impression on their employees, so finding ways to welcome new ones is fun and beneficial! This page provides a few different ways you as a manager can welcome a new employee on their first day.

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While the hiring process can be lengthy and effort-intensive, the preparation for a new hire's arrival can sometimes be surprisingly rushed and half-baked. Even if HR takes care of general onboarding, there are still plenty of to-dos that team leads need to cover to make their new teammate feel welcome and prepared.

When the onboarding process is clear, new employees become productive faster, feel secure in their new role, and are more engaged -everybody wins.

How to prepare before your new employee arrives

"You're hired!" usually kicks off a frenzy of activity between the new employee and HR. As for the team the new hire is joining, it can be tempting to slap together some docs and decks and call it a day, but there's more coordination that needs to happen to welcome new employees and empower them to succeed.

Coordinate with other teams

Assuming everybody else knows what to do for your new hire might lead to things falling through the cracks, which is deflating for someone's first day. Here's what to do instead:

Loop in your IT team to make sure the new hire's desk and equipment will be ready on day one.

Be sure to schedule meetings with other teams. For a new sales associate, it's a good idea to meet with customer success and marketing so they have context on who your customers are and what your company helps them achieve. This fosters better collaboration in the future, too.

Select an onboarding buddy or mentor

Starting at a new company, while exciting, can be intimidating when you aren't familiar with people and processes. Instead:

Assign your new employee an "onboarding buddy" or mentor to show them the ropes. Ensure the mentor can make the time commitment and carves out proper time in their schedule beforehand.

Have their mentor schedule a dedicated time and safe space to ask questions and provide feedback. (You can even do that with a 1-1 project in Asana!)

Update your team's documentation

Sure, HR might be taking care of the major paperwork, but it's also important to check in on your own team's documentation of processes and responsibilities.

Make sure everything is up to date and gives new hires full context on what your team does and how. For example, a marketing team might want to include process documents on how they run a campaign.

Check that links are valid and resources are easy to access so they don't have to dig around. In Asana, you can @mention other tasks and projects and add attachments to tasks (see below).

Go through your team's folders or projects to make sure they're cleanly and clearly organized so your new hire can continue to easily explore resources.

Create an onboarding template

Now that you've coordinated with others and updated documentation, it's a good idea to condense that into a to-do list of all the activities, meetings, and reading your new employee needs to accomplish before they're fully onboarded.

One way to do that is to create an onboarding checklist template in Asana (or try our pre-made onboarding template). New teammates can start being successful right away because they'll have all the info in one place and clear expectations about when to get things done. It also gives you a way to check in on their progress and maintain coordination with other teams towards their onboarding. You can repeat it for every new hire so you don't have to reinvent the wheel every time.

Using an Asana project, you could group onboarding tasks by:

Forms and paperwork

IT

Benefits

Meeting & communications

Finance

Company & office information

Within each category, you can link out to the relevant information, or provide the contact information of who they should get in touch with-and this is especially easy if you track everything as tasks within an Asana project.

To get started, you can try out our new employee onboarding template and customize it further or follow along with the Guide. You can also assign tasks to others across your company to make sure they've prepared what's needed to train and work with your new employee-all in one place.

"There's a ton of behind-the-scenes work that needs to be done to onboard employees. By using project templates in Asana, we can easily coordinate cross-functionally to make sure everything is ready to give our new teammates a great welcoming experience!"

Jina Kim, Learning and Development, Carta

Welcome your new hire when they get there

Once your new hire starts, help them hit the ground running with a few more activities:

Announce their arrival

New hires know they're new... but your organization might not. Show them a warm welcome by making a staff announcement to explain their role, as well as a few fun personal details, so people can connect with them. In Asana, you can do this as a team conversation to avoid endless email threads and easily include attachments that won't get lost. You can even @mention people to keep the conversation going.

Get feedback

As your new employee makes their way through the project, they can provide feedback on the materials surfaced in it and let you know if you should add anything else to it. That helps them feel like they're contributing to your team from the get-go. This is simple in Asana, where they can use task comments to provide that feedback.

Why welcoming your new employee matters

The first day at a new job is monumental for you and your new hire. For them, it might be their first day in a new city, industry, or career. For your company, it gets you one step closer to your team's goals. When you set up new employees for success in their role, it means they can hit the ground running and feel right at home on your team to help you hit those goals.
Learn how Asana can help you deliver a great employee experience by running all of your cross-functional programs and activities better.

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You're hired: 6 ways to welcome your new employee on their first day

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While the hiring process can be lengthy and effort-intensive, the preparation for a new hire's arrival can sometimes be surprisingly rushed and half-baked. Even if HR takes care of general onboarding, there are still plenty of to-dos that team leads need to cover to make their new teammate feel welcome and prepared.

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Different Ways to Develop Your Employees

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Different Ways to Develop Your Employees

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Employee development is beneficial in growing businesses as employees are expected to grow with you. Finding new and innovative ways to keep them developing is essential.

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In this article, we will cover the 11 most effective methods of employee development in 2020.

You will learn when to use them, their benefits and we'll evaluate which development method works best for which skills areas.

Contents:

Employees and employers have various ways to go about putting employee skills development into practice.

The overreaching goal is to strengthen employee's broad range of skills, whether it be flexibility, organizational, creativity, communication or leadership.

Employee Development Methods

1. Training

This method includes developing employee skills through a combination of lectures, hands-on-exercises, videos, podcasts, simulations, and individual/group-based assignments.

It includes both formal (classroom-based, instructor-led, eLearning courses) and informal (watching YouTube videos, reviewing educational blogs and posts on peer-group forums like LinkedIn or chat rooms, self-study) approaches to skills development.

Each option will be specific to an organization's needs, and the subject at hand.

For example, a hands-on, instructor-led training may be the best option to teach a detailed process or trade e.g. a complex manufacturing process or preparing a signature dish for a restaurant.

These extremely specific tasks cannot be taught via YouTube or research, which may suffice for more general subjects such as building codes or IT support issues.

Employees must actively undergo training (either paid for by themselves or by the organization) throughout their career to enhance skills they (in consultation with their managers/supervisors) deem necessary for the role they are performing.

However, organizations must also actively support employee skills development for future roles/responsibilities that the company hopes to entrust these employees.

IDEAL FOR:
Training is an ideal employee development method when it comes to addressing both Hard (technical) and Soft (communications, conflict resolution, time management) skills.

2. Task/job rotations

Employees could volunteer to rotate roles with colleagues on a shift/team, to put some of those new skills into practice.

Employers can also encourage job sharing as a method for employees, who have indicated their desire to get practical experience, to develop some additional skills.

The goal is to rotate the tasks and roles to learn something new or have a chance to practice what has been learned.

Stretch assignments: This method involves management working with employees to understand where they wish to improve, and then finding assignments for employees to develop those skills.

Typically, the assignments will push the boundaries of an employee's existing role/responsibility, to expand its scope to include additional skills needing development.

Stretch assignments could either be horizontal (tasking an employee to use additional skills to do more work similar to - though not the same - their existing role), or vertical (extending the scope of an employee's role to cover down-stream or up-stream responsibilities).

IDEAL FOR:
This employee development method is the best way to train flexibility and adaptability.

It is also great for extending an employee's technical skills but, depending on the type of stretch goals set, could aid in developing other ancillary skills such as Time Management, Stress Management, and Conflict Resolution Skills.

Everything depends on the role/job for how applicable this is. For example, if you ask a developer to talk/negotiate with clients, he probably won't be as great as the manager, but at least he'll gain the project management skill to some extent.

3. Coaching

When talking about various employee development methods and their benefits, we can't stress the importance of helping employees polish their skills through coaching.

This method of skills development typically involves senior staffers working one-on-one with less experienced individuals.

This can fast-track an employee's understanding of a variety of topics, but be mindful that this approach can be both times consuming (taking up the assets of seasoned/valuable staff) and result in a clone-like knowledge of the subject - as opposed to an employee learning the subject his/her way or through input from a broad range of coworkers and mentors.

IDEAL FOR:
Depending on the emphasis of the coaching involved, this can be a fast-track way to learning very specific leadership and team management skills. It can also be focused on particular organizational skills.

Coaching is usually a very hands-on approach to skills development and ideal for developing skills like Technical and Analytical skills. Through employer-sponsored coaching camps, employees could also pick up invaluable Interpersonal and Conflict Resolution skills.

4. Mentoring

This method involves senior leaders/management taking junior staff under their wing to help develop important skills that the mentored individual might lack.

The more formal mentoring programs are typically used for senior executive/leadership roles, while less formal structures might be implemented amongst junior management as well.

As with Coaching, be mindful of the time asset, and the even narrower funnel of a one-on-one teaching model.

IDEAL FOR:
Because it requires senior leadership commitment, Mentoring is typically used to develop high-level skills such as Leadership, Strategic Management, Communication, Critical Thinking, and Long-term Vision articulation.

Mentoring isn't very effective in developing skills required at lower levels of the organizational structure - such as Shop Floor Assistant or Accounting Supervisor. Coaching might be a better method for skills development at those levels.

More experienced employees can mentor less experienced, younger employees and isn't necessarily restricted to management. It can be done at any professional level and is ideal for communication skills, leadership skills, and organizational skills. It can also be applied to teaching something new or even teaching creativity.

5. Workshops/Committees/Working-Groups

These are methods that give employees an opportunity to interact with peers/colleagues from within and external to the organization.

The benefit here is rich access to similar colleagues (internal) and dissimilar colleagues (external).

This broad range of input and knowledge can be useful in gaining new insights, troubleshooting, and opening up communication on best practices.

This is ideal for communication skills and teamwork but can also be applied to anything else.

IDEAL FOR:
Workshops are great for developing a range of soft skills, such as Communications, Teamwork, Presentation, Public Speaking, Networking, and Leadership skills. It can also be used to polish Research and Analytical skills.

6. Simulations

These are becoming very popular due to both how engaging and effective they have become.

In its simplest form, a simulation could be role-playing a customer service interaction, for example, learning how to diffuse an irate and confrontational client in person, or responding to an emergency situation such as mock first aid scenarios.

At its highest level, simulations can involve completely virtual worlds, such as fire rescue or flight training where employees can learn the skills required in a nonconsequential setting.

This is extremely useful in taking conceptual or textbook knowledge and applying it to the real world which gives the employee both the know-how as well as the exposure and comfortability in handling such tasks.

IDEAL FOR:
Works for all types of skills. Group simulations can even be utilized to teach social skills.

7. Conferences

Much like workshops and committees, conferences are a useful way to network and gain exposure to a vast knowledge base of both interdisciplinary and outside industries.

Specific sessions are generally available to increase awareness and training of relevant topics, often in a pick and choose a format that can be of interest/usefulness to particular subgroups within an organization.

IDEAL FOR:
Dependent upon the conference's applicability and specificity, they work for all types of skills, including hard and soft skills and personal development. It can additionally assist with communication skills.

8. On-the-job training

Employees who have attended some basic training on a technical skill (whether it be in operating a new machine, or learning new financial analysis methods) will often find on-the-job training a great method to hone those skills.

This is basically learning by doing, which is typically done right after the training.

The main goal of on-the-job training is to provide everything to the employee for self-study while at work. Employees learn how to use something or apply the methods as they complete the assigned tasks.

This is a very popular way to develop employees as companies typically don't have the time to train every single employee on every single skill especially if that skill does not require specific/advanced knowledge.

IDEAL FOR:
While on-job exposure is typically good for work-specific skills development, this method can also develop a broad variety of employee skills, including hard and soft skills.

These range from technical skills, leadership development, and analytical expertise as well as organizational skills such as time management, multi-tasking, and prioritization.

9. Self-study

This can be accomplished through different methods: reading/researching, taking classes, etc. outside of work hours.

The subject doesn't always relate to the skills that an organization needs, but rather something new that they believe will improve their performance.

While the time invested for self-study isn't directly compensated, if an employee purchased a course that will improve his performance, the company should compensate him by paying for that course.

The benefit is that the employee decides what's of interest, and pursues it independently. Conversely, it is often difficult to motivate employees to spend off-work time devoted to work-related endeavors.

IDEAL FOR:
This is a great means to develop creativity and curiosity, as employees will naturally choose topics of interest/passion. Depending on the material studied, however, it could be applicable to all skills.

Bonus:

10. 360-degree performance review

This method involves getting feedback about an employee, from a cross-section of peers, subordinates, supervisors and external vendors, and then identifying skills development opportunities based on those inputs.

For more information on this type of feedback consider this article: Performance Appraisal.

IDEAL FOR:
Because of the fairly broad scope of feedback, this method relies upon, it is typically good for identifying skills gaps in people-facing roles, including Conflict Resolution, Communications, Tactfulness, and Interpersonal skills.

11. Career planning

While this method is usually viewed as something that is " employer-driven" - where HR decides which employee should fill what role - it shouldn't be so!

Employees can also suggest future/alternative career paths for themselves, to their supervisors/managers, and initiate career planning discussions.

Based on a business goals review and organizational workforce assessment ( see Employee development plan), employers can identify existing skills that need to be enhanced across the organization, or prospective new skills that the business must acquire.

Through discussions with management, individual employees should then analyze their own strengths and shortcomings, and volunteer to take on some of those roles. Individual career plans can then be mapped out, in consultation with HR, with specific skills development milestones identified for each role.

IDEAL FOR:
When used in conjunction with other employee development methods, Career Planning can help identify and develop a broad spectrum of cross-organizational employee skills.

Typically, Career Planning sessions identify soft skills like Communications, Interpersonal Skills, and Time Management for development in leadership roles, while hard/technical skills manifest themselves for development in front-line rank and file roles.

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11 Employee Development Methods and their Benefits

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In this article, we will cover the 11 most effective methods of employee development in 2020. You will learn when to use them, their benefits and we'll evaluate which development method works best for which skills areas. Contents: Employees and employers have various ways to go about putting employee skills development into practice.

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This link provides great information on incentives. Incentives can empower employees to generate higher success rates, especially those who work on a commission-based salary. They are a fun way to meet goals and grow your business through your employees.

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An incentive provides additional compensation for those employees who perform well. It attempts to tie additional compensation as directly as possible to employee productivity.

Further incentives are monetary benefits paid to workmen in recognition of their outstanding performance. They are defined as “variable reward granted according to variations in the achievement of specific results”.

Incentive systems should be tied as much as possible to performance. If an incentive is actually to spur increased performance and effort, employees must see a direct relationship between their efforts and then- rewards.

Incentives can be short-term and/or long-term, which can be tied up with the performance of an individual employee or a group/unit’s productivity.

Performance through incentives may be defined as cost saving, quantity produced, standards met or quality improved, revenue generated, return on investment or increased profit.

Learn about:- 1. Meaning of Incentives 2. Importance of Incentives 3. Variables 4. Guidelines 5. Types 6. Classification of Incentive Plans 7. Incentive Systems.

Incentives: Meaning, Importance, Variables, Guidelines, Types, Classification of Incentive Plans and Incentive Systems

Incentive – Meaning

The main purpose of incentive is to tie employees’ rewards closely to their achievements. This tie is done by providing more compensation for better performance. Individual will generally strive for additional rewards by higher production and their performance depends upon higher efforts. Some people may prefer some extra time off rather than more money.

An incentive provides additional compensation for those employees who perform well. It attempts to tie additional compensation as directly as possible to employee productivity.

Further incentives are monetary benefits paid to workmen in recognition of their outstanding performance. They are defined as “variable reward granted according to variations in the achievement of specific results”.

The international labour office refers to incentives as payment by results. But it is appropriate to call them Incentive systems of payment’. ‘Emphasizing the motivation i.e., the imparting of incentives to workers for higher production and productivity’.

Incentives – Importance

The importance of incentives are given below:

1. The primary advantage of incentive is the inducement and motivation of workers for higher efficiency and greater output,

2. Fixed remuneration removes fear of insecurity in the minds of employees (as incentive as a part of total remuneration)

3. Earnings of employees would be enhance due to incentive.

4. Reduction in the total as well as unit cost of production through incentives (because of higher productivity)

5. Production capacity is also likely to increase.

6. Incentive payments reduce supervision, better utilization of equipment, reduce scrap, reduce loss time, and reduce absenteeism and turnover.

Incentives – 3 Main Variables: The Individuals and Work Situation

The effective use of incentives depends on two variables:

1. The individual,

2. Work situation, and

1. The Individual:

Different people value things differently. Enlightened managers realise that all people do not attach the same value to monetary incentives, bonuses, prizes or tips. Employees view these things differently because of age, marital status, economic need and future objectives.

2. The Work Situation:

This is made up of four important elements:

(a) Technology – The operation of a machine or work system which can establish a range of incentives;

(b) Satisfying job assignments – A worker’s job may incorporate a number of activities that he finds satisfying. Incentives may take the form of earned time-off, greater flexibility in hours worked, extended vacation time, and other privileges that an individual values;

(c) Feedback – A worker needs to be able to see the connection between his work and rewards. These responses provide important reinforcement; and

(d) Equity – A worker considers fairness or reasonableness as part of the exchange for his work.

Incentives – Incentive Program Guidelines

1. Tie to Performance:

Incentive systems should be tied as much as possible to performance. If an incentive is actually to spur increased performance and effort, employees must see a direct relationship between their efforts and then- rewards. Further, both workers and managers must see the rewards as equitable and desirable. If a group incentive system is to be used, it clearly should reflect employees’ effort as a group of individuals.

2. Recognize Individual Difference:

Incentive plans should provide for individual differences. Recognition of the complex view of personnel management means that a variety of incentive systems may have to be developed to appeal to various organisational groups and individuals. Not everybody will want the same type of incentive rewards.

3. Recognize Organisational Factors:

The incentive system chosen should be consistent with the climate and constraints of an organization. For example, it is inconsistent to devise an incentive plan requiring a high degree of employee participation for an organization that adheres to traditional procedures and rulers. The incentive plan also should be compatible with organizational resources and be developed in close consultation with the firm’s financial officers to determine how much incentive compensation an organization can afford.

4. Continue to Monitor:

An incentive system should consistently reflect current technological and organizational conditions. Offering an incentive for clothing sales clerks to sell outdated merchandise would be more appropriate than offering incentives to sell only current fashion items that are already in high demand. Incentive systems should be reviewed continually to determine whether they are operating as designed.

Incentives – Top 3 Types of Incentives (With Different Incentives for Employees and Agents)

Organisations perform use a combination of incentive system. This incentive plans can be setup as individual, group or organisational in nature. Performance can be measured un-productivity, cost effective, and superiors rating.

Type # 1. Individual Incentives:

Individual incentive systems may have to be tailored to individual desires for instant salary plus commission basis, only commission or worker wants additional time up instead of additional take home pay.

An individual incentive system may also be used as a means of measuring individual capabilities and initiatives.

Type # 2. Peace Rate Systems:

The most basic individual incentive system is the Peace Rate System. Under the State Peace Work system wages are determined by multiplying the number of units produce by the Peace Rate for 1 unit.

Type # 3. Differential Peace Rate:

The differential Peace Rate System pays employees at one peace rate, if they produce less than a standard output and at a higher peace rate if they produce more than the standard, developed by Frederick Taylor in the late 1800s. The system is to design to stimulate employees to achieve or exceed established standard of production.

Peace Rate System is difficult to use, because of determination standards.

Incentives for Employees:

The following are the different incentives for employees which the company can use:

a. Financial Incentives:

The various financial incentives are:

(i) Pay and allowances

(ii) Productivity linked wage incentive

(iii) Bonus

(iv) Co-partnership/stock option

(v) Retirement benefits

(vi) Perquisites

b. Non-Financial Incentives:

The various non-financial incentives are:

(i) Employee recognition programmes

(ii) Employee empowerment

(iii) Job security

(iv) Status

(v) Employee participation

(vi) Organisational climate

Incentives for Agents:

The following are the different incentives for agents which the company can use:

a. Financial Incentives:

The various financial incentives are:

(i) Commission

(ii) Profit sharing

b. Non-Financial Incentives:

The various non-financial incentives are:

(i) Recognition programmes like certificate of merit etc.

(ii) Organisational climate

(iii) Job enrichment

(iv) Career advancement opportunity

Benefits derived by the company from the above steps are:

(a) Loyalty and dedication of agents.

(b) Increased business due to enhanced motivational level.

Incentives – Classification of Incentive Plans

Incentives can be short-term and/or long-term, which can be tied up with the performance of an individual employee or a group/unit’s productivity. Performance through incentives may be defined as cost saving, quantity produced, standards met or quality improved, revenue generated, return on investment or increased profit. This means that there are endless possibilities.

1. Long-Term Incentives:

Long-term incentives are focused on an employee’s efforts on multi-layered results, such as innovations, strategic suggestions to increase the return on investments and increasing the market share or multi-layered contributions to develop the organization’s competitiveness. These could be indirect financial support to tax payee employees, social security plans, pension plans, stock ownership, etc.

2. Short-Term Incentives:

They are in addition to the basic pay provided within the current operating year which could be supplemented to pay cheques or a separate amount on a monthly, half yearly or yearly basis. This added income relates to the employee’s achievement or special performance to benefit the organization, such as 100% attendance, overtime, reduction in cost, suggestion for improvement, long-term association with the organization, etc.

These could be classified as:

(a) Individual Bonus:

Punctuality, specialized contribution affecting quality or productivity, increasing productivity and reducing cost with modified suggestions are generally covered here, which encourages an individual to earn more, and the organization is benefited by the increased productivity and profit.

(b) Length of Service Award:

In a competitive environment, the retention of knowledgeable workers or knowledge bank has become essential and the recognition of long service may also make an employee feel proud. The organization may also feel pride in the retention of the competent employee.

They, therefore, offers service awards such as 10 years service awards, 20 years service awards, 25 years service awards, etc. annually and give recognition to the employee in annual functions. These incentives could be in cash or kind.

(c) Referral Award:

Sometimes when the labour market is tight and the management prefers to have loyal and reliable employees, by seeking referrals from old employees, they would like to pay a cash award to that employee as it has helped the organization to have a reliable and loyal employee through him/her.

(d) Suggestion Award:

This is the most common and simple incentive plan to motivate the employees to use their creativity and earn recognition.

(e) Intellectual Contribution Award:

This is more applicable to the executive class which can be motivated to contribute intellectually in suggesting or implementing creative strategies, and to improve the performance or excellence in performing a job. The awards can be calculated based on the total financial improvement achieved by the company and the share can be worked out according to the proportion of the individual contribution.

(f) Special Achievement Award:

This is also very common to boost up the morale of the executives to get recognition in achieving something special by taking initiatives and putting in more efforts.

(g) Special Behavioural Award:

In discharging duties, behaviour plays an important role. Behavioural theory also indicates that an employee’s performance is dependent on wage/salary acceptance and satisfaction of worth. To encourage the employees to change their behaviour as desired, this incentive has been found advantageous.

However, the management, depending upon the size, type, financial strength and business nature, may have different values or types of these awards.

(h) Productivity Bonus:

It is a very common incentive in any organization as pay for performance. It is the main motto. There are various productivity bonus awards applicable in all the organizations.

Incentives – Incentive Systems

A group of or organization incentive systems provides rewards to all employees in a work unit, department, division or organization. These incentives are designed to promote cooperation and coordinated effort within the group or organisation.

1. Group Incentives:

A group incentive system may be useful in overcoming some of the problems associated with individual incentives. However it may not lead to higher productivity than individual incentive system because individual effort is not as directly tied to rewards. One critical factor in the group incentive system is the size of the group. If it becomes too large employees may feel their individual effort will have little or no effect on the total performance of the group and the resulting reward.

Small Group Plans may encourage team work in groups. Groups may restrict output, resist revision of standards and seek to gain at the expense of groups.

2. Organisational Incentives:

An organisation wise incentive system compensate all employees in the organize based upon how well the organisation as a whole, does during the year.

The basic concept behind organisation wide incentive plans is that overall efficiency depends on organisation as a whole.

Common Organisational Incentive System includes Scanlon plans and various profit sharing plans.

Scanlon plans a unique type of organisation wise incentive plan. Since its development in 1927 the Scanlon plan has been implemented in many companies. The basic concept underlying the plan is that efficiency depends on team work and plant wide cooperation.

The plan has two main features:

i. A system of departmental committees and a plant screening committee to evaluate all cost saving suggestion.

ii. A direct incentive to all employees to improve efficiency.

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Incentives: Meaning, Importance, Types, Classification and Plans

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An incentive provides additional compensation for those employees who perform well. It attempts to tie additional compensation as directly as possible to employee productivity.

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I had difficulty remembering what these were within the realm of communications, so I found a scholarly link that discusses them in great detail.

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Communication is the conveying of messages by exchanging thoughts or information via speech, visuals, signals, writing, or behavior. Communication requires a sender, a message, and a recipient, although the receiver may not be present or aware of the sender's intent to communicate at the time of communication. Communication requires that the communicating parties share some area of commonality. The communication process is complete once the receiver has understood the message of the sender.

Perhaps the most time-honored form of communication is storytelling. People have told each other stories for ages to help make sense of the world, anticipate the future, and certainly to entertain. The art of storytelling draws on your understanding of yourself, your message, and how you communicate it to an audience that is simultaneously communicating back to you. Your anticipation, reaction, and adaptation to the process determine how successfully you are able to communicate.

Communication involves actions that confer knowledge and experience, give advice and commands, and ask questions. These actions may take many forms depending on the abilities and resources of the individual communicators. Together, content and form make messages that are sent towards a destination. The destination can be oneself, another person, or another entity (such as a corporation or group of people).

Business Communication Basics

Business communication is the transmission and exchange of information between people in an organization to facilitate business activities. Business communication encompasses marketing, brand management, customer relations, consumer behavior, advertising, public relations, corporate communication, community engagement, reputation management, interpersonal communication, employee engagement, and event management. It is closely related to the fields of professional and technical communication.

Business communication takes place within an organization and across organizational boundaries. Many organizations have a communications director who oversees internal communications and crafts messages sent to employees. It is vital that these internal communications are clear and managed in a timely way. Poorly crafted or managed communications could misdirect employee effort, cause confusion, and even foster distrust or hostility.

Dimensions of Communication

Communication has four primary components:

Message (the content being communicated)

Source (who the message comes from)

Form and channel (through which medium)

Destination/receiver/target (to whom)

Wilbur Schram, an authority on mass communications, argued that it is important to examine both the desired and the unintentional impact a message may have on its target.

Levels of Semiotic Rules

Communication can be described as information transmission governed by three levels of semiotic rules for making meaning:

Syntactic (formal properties of signs and symbols such as letters or numbers)

Pragmatic (concerned with the relations between signs/expressions and their users)

Semantic (relationships between signs and symbols and what their meaning)

Communication is social interaction that requires at least two people who share a common set of signs and semiotic rules. Note that this does not apply to intrapersonal communication such as diaries or self-talk that occurs without interactions with others.

Example

Perhaps the most time-honored form of communication is storytelling. People have told each other stories for ages to help make sense of the world, anticipate the future, and certainly to entertain. The art of storytelling draws on your understanding of yourself, your message, and how you communicate it to an audience that is simultaneously communicating back to you. Your anticipation, reaction, and adaptation to the process determine how successfully you are able to communicate.

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Communication is the conveying of messages by exchanging thoughts or information via speech, visuals, signals, writing, or behavior. Communication requires a sender, a message, and a recipient, although the receiver may not be present or aware of the sender's intent to communicate at the time of communication.

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The ted talk within this link is an excellent resource on how to lead in an era of constant change. Jim Hemerling brings up five excellent points, and if you have time, this video is worth the 8-minute watch time. It is very beneficial and will continuously increase my business management and administration knowledge.

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A communication network refers to how information flows within the organization. Information within an organization generally flows through a system, rather than being a free flow. Communication networks are regular patterns of person-to-person relationships through which information flows in an organization. This means that the flow of information is managed, regulated. and structured. Communication networks may be formal or informal.

Formal Communication Network - A formal communication network is one which is created by management and described with the help of an organizational chart. An organizational chart specifies the hierarchy and the reporting system in the organization. Therefore, in a formal network, information is passed on only through official channels such as memos, bulletins and intranet (email within the organization).

The organizational chart implies that information can flow in any of three directions - vertically, i.e., upward or downward, and horizontally.

Upward Communication - This may be defined as information that flows from subordinates to superiors. Some of the reasons for upward communication include discussing work related problems, giving suggestions for improvement and sharing feelings about the job and co-workers.

This type of communication has both benefits and disadvantages. One of the biggest benefits is problem-solving. Once a subordinate has brought a problem to his superior's notice, chances are that the problem will not recur, since the subordinate learns from his superior how to tackle it the next time. Thus, his ability to solve new problems and therefore his managerial ability, improves. Another benefit that could arise from upward communication is that valuable ideas and suggestions may sometimes come from lower level employees. Therefore organizations should encourage this kind of communication. A third benefit is that employees learn to accept the decisions of management and thereby work as a team.

The biggest problem associated with this type of communication is that it may lead to "handing down" of decisions by superiors. When subordinates frequently seek the superior's guidance, the latter may adopt an authoritarian approach and merely give instructions, disregarding the subordinate's opinion completely.
Jim Hemerling: 5 ways to Lead in an Era of Constant Change

Downward Communication - This may be defined as information that flows from superiors to subordinates. The most common reasons for downward communication are for giving job instructions, explaining company rules, policies and procedures and giving feedback regarding job performance. A number of studies have indicated that regular downward communication in the form of feedback given to employees is the most important factor affecting job satisfaction. Therefore organizations today are trying to encourage more of this type of communication.
There are both benefits and disadvantages associated with this type of communication. Downward communication that provides regular feedback will be beneficial if the feedback or review of performance is constructive. A constructive review is one where a manager "counsels" an employee, or advises him on how to improve his performance. On the other hand, a destructive review can destroy employee morale and confidence. Regular downward communication also creates a climate of transparency or openness, where information is passed on through official channels, rather than through rumors.Thirdly, downward communication boosts employee morale, since it indicates that management is involved in their progress.

The problems with this type of communication are the danger of doing destructive reviews, as mentioned, and that of "message overload." This means that superiors many sometimes burden their subordinates with too many instructions, leading to confusion.

Horizontal Communication - This type of communication is also known as "lateral" communication. It may be defined as communication that takes place between co-workers in the same department, or in different departments, with different areas of responsibility. For example, Sales Managers and Advertising Managers in the Marketing department, or Marketing Managers and Finance Managers. The reasons for this type of communication are for coordination of tasks, sharing of information regarding goals of the organization, resolving interpersonal or work related problems and building rapport.

The biggest potential benefit of horizontal communication is the sense of teamwork that is created. Regular communication of this type ensures that all co-workers work together towards achieving a common goal in the overall interest of the organization. The biggest potential problem is that conflicts such as ego clashes are bound to arise, when co-workers at the same level communicate on a regular basis.

In spite of these problems, horizontal or lateral communication has become more important in today's business scenario than upward or downward communication. This is because the "organizational pyramid" indicating the different hierarchies or levels in an organization has flattened. This is illustrated by the diagrams given below.

Informal Communication Network - Another name for informal networks is the "grapevine". In this type of network, information does not flow in a particular direction, as we have seen with formal networks. The information is also not passed on through official channels such as memos, notices or bulletin boards. The information need not be circulated within the organization, but could be passed on outside the work environment, wherever co-workers or colleagues meet socially. Thus, informal networks are based more on friendship, shared personal or career interests.

Example - Co-workers may meet outside the work environment at a company picnic, party or a car pool and discuss areas of common interest that may or may not be work related. Information may then be passed on to each other about happenings in the company, such as layoffs, the company's plans for acquisitions and so on.

This type of informal network is not just for idle rumors and may be useful in many ways. First of all, it sometimes fills in the "transparency gaps" left by formal networks. Such gaps usually occur during times of crisis such as strikes or layoffs. The strikes and layoffs may not be officially announced. Secondly, it may help to confirm important information, such as the fact that the company is going in for a major acquisition. Thirdly, the grapevine can be used for a constructive purpose by the organization.

Example - The government could get the press to publish news in the local paper that there is going to be a petrol price hike soon, just to test the reactions of the general public. If the reaction is negative, then the news may be withdrawn on the basis that it is just a rumor. Similarly, organizations could deliberately plant proposals in the minds of their employees, just to test their reactions.

Given that informal communication networks have their advantages, they should not be suppressed as rumors. On the contrary, competent managers should accept the informal network. At the same time, they should make efforts to counter false rumors and to ensure transparency through the formal network. This means making all types of information - both positive and negative, available to everyone in the organization through official channels.
GSC Library Article:

Greenbaum, H. H. (1974). The Audit of Organizational Communication. Academy Of Management Journal, 17(4), 739-754.

https://search.ebscohost.com/login.aspx?direct=true&AuthType=sso&db=bsu&AN=4297575&site=ehost-live&custid=lifelong&authtype=sso
Simon Sinek: Why Good Leaders Make you Feel Safe
To conclude, it should be remembered that both formal and informal networks should be cultivated and allowed to co-exist, so that information of all types flows freely to all levels in the organization.
References
Fine, G.A., and S. Kleinman. 1979. Rethinking subculture: an interactionist analysis. American Journal of Sociology 85( 1): 1-20.

Forsythe, G. B. (1992). The preparation of strategic leaders. Parameters (Spring): 38-49.

Jacobs, T. O., and E. Jaques. 1991. Executive leadership. In Handbook of military psychology.

Edited by R. Gal and A. D. Manglesdorff. Chichester, England: Wiley.
CC0 Public Domain A crisis is the ultimate unplanned activity and the ultimate test for managers. In a time of crisis, conventional management practices are inadequate and ways of responding usually insufficient. This author, a communications practitioner with global experience, details a well-managed crisis response that will leave stakeholders with a favorable impression and renewed confidence in the affected company. GSC Library Article:
Kim, Y. (2015). Toward an Ethical Model of Effective Crisis Communication. Business & Society Review (00453609), 120(1), 57-81.

https://search.ebscohost.com/login.aspx?direct=true&AuthType=sso&db=bsu&AN=101349429&site=ehost-live&custid=lifelong&authtype=sso

Few circumstances test a company's reputation or competency as severely as a crisis. Whether the impact is immediate or sustained over months and years, a crisis affects stakeholders within and outside of a company. Customers cancel orders. Employees raise questions. Directors are questioned. Shareholders get antsy. Competitors sense opportunity. Governments and regulators come knocking. Interest groups smell blood. Lawyers are not far behind.

As the ultimate unplanned activity, a crisis does not lend itself to conventional "command and control" management practices. In fact, some of the techniques for managing a crisis may fly in the face of conventional notions of planning, testing and execution. Preparation and sound judgment are critical for survival.

Since the Tylenol crisis of the 1980s (unknown parties tampered with bottles of the product), the concept of crisis management has become a specialized activity in the domains of communications and public relations. Companies have come to recognize crisis communications capabilities as a vital part of their risk management and business continuity strategies.

National Public Relations has been on the front lines of some of the highest-profile crises in Canada and beyond, for more than 30 years. We have devoted many more hours to helping companies avoid, manage and recover from a crisis. This information encapsulates our strategy for survival.

Crisis prevention: The case for issues management

The first task is to identify crisis risks or to recognize a crisis when it breaks out.

From a communications standpoint, a crisis is a business or organizational problem that is exposed to public attention, and that threatens a company's reputation and its ability to conduct business.

A crisis can take on many forms, including natural or man-made disasters, environmental spills, product tampering or recalls, labor disruptions or criminal acts, to name a few. What makes them a crisis is the fact that they are the focus of intense media scrutiny.

Although some risks are beyond a company's control, others can be foreseen. Research shows that the vast majority of crises arise when companies fail to identify a potentially contentious issue at an earlier, more benign, stage, and to develop a plan of action to manage the issue before the issue manages them.

An issue can fester for months, maybe years, until events and circumstances intersect and propel it to centre stage on the public agenda. In some cases, an issue may have been badly handled, and as a result, has escalated to the brink of becoming a crisis. Examples include:

A major pharmaceutical company recalls a product that has proven to have adverse side effects. Relentless media attention reveals that the company had known for years about scientific studies that questioned those side effects.

A brokerage firm, steeped in its own male macho culture, routinely subjects female employees to embarrassing or degrading working conditions, and ignores the most reasonable of complaints, until an employee launches a lawsuit and gains the support of women's organizations nationwide.

A company's blue-chip board, having confidence in its high-profile CEO, rubber-stamps his recommendations, until a whistle-blower reveals shenanigans within the company that lead to a special audit and an OSC investigation.

A coordinated approach to issues management can help an organization effectively identify and anticipate potential issues, prevent crises from developing, and influence their evolution and outcome.

The first step is to conduct an issues audit- an inventory of a company's vulnerabilities and the critical issues it is likely to confront. The task for companies in highly regulated sectors, like energy or pharmaceuticals, is more obvious than for other, less visible enterprises.

Within the company, a series of interviews with senior management is conducted. Business plans, processes, relationships and previous experience are analyzed. Key contacts in the industry, media and oversight functions are identified, and existing communications plans inspected for relevance.

Outside the company, media analysis, legislative tracking, industry reports, polls and surveys all help to bring potential threats to the surface.

Once a framework is established, the critical issues should be identified and prioritized in order of magnitude and likelihood of occurrence.

After the communications audit is complete, an issues manual is developed. This document details critical issues, the history and context of company involvement with them, and the company's position on each one. If the issues have seeped into the public domain at any point, the level of visibility should be described, and allies and adversaries identified.

Some examples of issues that faced companies in recent years and escalated into crises include:

Canadians' penchant for bank-bashing was the context in which the country's major banks unsuccessfully attempted to merge with each other;

Advocacy groups raised red flags about unknown risks in producing and consuming genetically modified organisms before GMO-based products were sprung on the market;

Heavy industrial emitters knew of Canada's intention to ratify the ill-conceived Kyoto Protocol on Climate Change years before they expressed their views on its economic impact;

Labor groups and others had been advocating better working conditions in the Third World before ethical sourcing became a mainstream concern for retailers.

Creating a crisis communications plan
The issues audit becomes the front end of a company's crisis communications plan, and arguably, the most important document in the plan. As a complement to a company's emergency procedures, the crisis plan should contain detailed communications response procedures in the event that any of the potential crises identified in the communications audit, or unforeseen external events, come to pass.

The following is a checklist of the contents of a good crisis communications plan:

Names and contact information of the crisis team/ spokespeople. People need to know who holds responsibility for leading the organization through the crisis.

Crisis triage. Understanding what level of "crisis" you're facing. Establishing criteria to decide when a minor incident has the potential to become a national crisis can be a challenge.

" First response. What information has top priority? How will you initially respond to media?

Alert/ notification procedures. Who needs to get information, and in what order of priority? By phone, e-mail, pager or fax?

Situation room. Assess the physical space that will be the nerve centre for managing the crisis, including the required hardware and software, staffing, location and layout.

Stakeholder communications. How do you plan to communicate with customers, shareholders, employees, government and the media?

Contact lists. Include the "inputs (which media outlets and Internet message boards should be monitored, which opinion leaders should be kept track of, etc.) and "outputs" (which journalists should be contacted, which newspapers and television programs should be approached, which media outlets need to hear your story).

Template responses. Standardized format, language and protocol for all communications.

Access to the crisis plan is essential. Many companies now maintain both print and electronic versions for ease of access and remote retrieval.
Testing the plan
In order to ensure that the messages contained in the crisis plan are delivered effectively and with credibility, and that the plan can be carried out, it needs to be tested. This is where crisis training and simulations come in, as well as media training.

Crisis training is best delivered by outside trainers who take participants through crisis theory and its practical applications to their industry or company. The crisis plan is reviewed and implemented in a simulated crisis to assess the organization's preparedness, and to identify areas that need improvement. Did the crisis response, when played out, escalate or solve the crisis?

Crisis Management: "Plan for the worst; hope for the best"

Despite the best planning and foresight, organizations inevitably find themselves in a crisis from time to time.

An oil company's head office receives a media call asking for its reaction to the bombing of its pipeline in Central America, before the company itself has even heard the first report from the field.

A packaged goods company learns it is being sued by disgruntled consumers.

A delivery truck driver for a hazardous waste company calls his dispatcher to report he's been in an accident and spilled his load of chemicals in a densely populated part of town.

Research has discovered common internal reactions when the issue first breaks.

The first casualty of a crisis is perspective. Characteristically, the pattern is one of escalation, with the initial response being surprise, itself the result of a lack of information.

Before the company knows about the incident, cameras are on the scene. In the absence of real information, an organization cannot respond meaningfully. However, that doesn't stop media from reporting on it live, minute by minute.

As events escalate, management senses a loss of control over the issue. Intense scrutiny by the media, regulators, stakeholders and competitors breeds a siege mentality, tempting a company to batten down the hatches and say nothing at the very time the media is pounding at their door.

Panic sets in. Business planning horizons change from years into hours. Management attention is focused entirely on getting through the next interview.

External reactions mirror these internal dynamics. Initially, an incident may attract the interest of only a small constituency.

Reports out of a small town indicate residents are concerned about the quality of its water supply.

An obscure illness begins to affect a marginalized group of citizens.

A scientific journal questions the safety of technology used in a popular consumer product.

As the hours and days pass, media reports breed a wider concern as other stakeholders become aware of the impact of the situation on them. Curiosity turns into concern and anxiety.

The absence of an adequate response by the players involved breeds anger and fear and invites a desire in others to retaliate for what is seen as wrongdoing. Stakeholders begin demanding answers. They want to strike back, with the view that someone has to "pay" for the consequences. Sooner rather than later, an organization loses the public trust and goodwill upon which its business has been built. Market share begins to erode. Stock prices drop. Government orders an inquiry.
Assessing a crisis
One of the most vital skills a company can possess is the ability to determine if, when and at what level of importance a crisis has struck:

Is this a crisis, or is it simply a continuing business problem coming to the surface?

Is it confined to a local area, or does it have the potential to become a situation of national or international importance?

Has someone verified the incident or crisis?

What are the legal implications?

What level of resources will be required to manage it?

TED TALK: Melissa Agnes: The Secret to Successful Crisis Management in the 21st Century So what's to be done? Ten rules for crisis management

1. Respect the role of the media. The media are not the enemy; they have direct access to the audiences you need to reach. Rather than avoiding media, use them as a conduit to communicate key messages. Prepare a statement that includes the confirmed facts; communicate what the company is doing and provide background information.

2. Communicate, communicate, communicate. The first rule of crisis management is to communicate. Early hours are critical and they set the tone for the duration of the crisis. The media's first questions are likely to be simple and predictable:

What happened?

Where?

When did you know of the problem?

What are you doing about it?

Who's to blame?

Were there warning signs?

How will life or property be protected or compensated?

Be as forthright as possible; tell what you know and when you became aware of it; explain who is involved and what is being done to fix the situation. Be sure to correct misinformation promptly when it emerges.

In the aftermath of the 9/11 tragedy, New York Mayor Rudolph Giuliani held a press conference in the ruins of Lower Manhattan that afternoon. In the coming days, he became the reassuring voice of calm for worried residents of the city.

In the hours, days and months after the 1998 crash of Swissair 111 in Nova Scotia, the Transportation Safety Board of Canada held a series of media updates on the status of the crash investigation, and provided regular safety alerts to the international aviation community.

When Pepsi-Cola heard first reports of syringes being found in soft drink bottles in 1993 - which turned out to be hoaxes - it launched a broad communications offensive to reassure consumers. Tactics included media relations and interviews, company open houses, video news releases, third-party endorsement and consumer hotlines.

Remaining silent or appearing removed, perhaps on the advice of legal counsel, tends to enrage the public and other stakeholders. A balanced communications strategy must be developed that protects corporate liability while satisfying the demands of today's information and media dynamic.

As demanding as the public may be, they are usually inclined to give an organization the benefit of the doubt in the early hours of a crisis. They judge a company and its leaders not by the incident itself - which they recognize is often beyond the control of those individuals - but by their response.

1. Take responsibility. One of the more controversial tenets of crisis management is that someone involved in a crisis must be prepared to empathize, even publicly apologize, for the events that have transpired. This is different from accepting blame. Taking responsibility means communicating what an organization is doing to remedy a situation that the media and the public have determined involve that organization in some way.

2. Centralize information. A company needs to move quickly to gain control over information and the resolution of the crisis. Ensure that appropriate levels of management are updated with information from a wide variety of sources (media coverage, analyst comments, competitive intelligence, managers' first-hand reports, etc.).

3. Establish a crisis team. Create and train the crisis team before a crisis strikes, and establish a situation room. During a crisis, when everyone goes into action, be sure the team has access to the highest levels of management.

4. "Plan for the worst; hope for the best." Assume the worst-case scenario. Develop contingencies for the hours and days ahead, forecast possible consequences and determine plans of action.

5. Communicate with employees. Remember that employees are your front-line "ambassadors" in a crisis. Be sure they are aware of what the company is doing to deal with the situation.

6. Third parties. Use third parties to speak on your behalf. Third parties act as character witnesses and often carry more credibility than the organization at the centre of a crisis.

7. Use research to determine responses. Polling, market research and focus groups provide essential insight into the magnitude of a crisis and public attitudes about where hidden issues may lie. Monitor the Internet, chat rooms and blogs.

8. Create a website - If circumstances warrant, create a website to give quick, up-to-the-minute information and get the company's story out.

Crisis recovery: Regaining trust

As the crisis comes under control, a company should examine the impact the incident has had on its brand(s) and reputation. If the brand has taken a hit, a company may need to give consumers a reason to trust them again.

Companies should consider a broad range of potential communication initiatives to restore trust and loyalty.

Following a recall of millions of cases of beer that may have contained a few bottles tainted with caustic cleaning material, a major brewery ran ads in newspapers across Canada, assuring consumers the problem was rectified and offering them coupons redeemable for a free beer.

A major appliance company weathered controversy following the closure of a manufacturing facility that saw hundreds lose their jobs. The company ran a major public relations and advertising campaign to remind customers that it continued to have an active presence in the country, and was here for the long haul.

An international mining company seeks to restore normalcy to an overseas site that has been occupied by demonstrators and attracted an international backlash. The company begins a real effort at stakeholder communications and engagement, learning to work with its staunchest critics.

An entire arsenal of public relations techniques can be called upon, from media relations, internal communications, and thought-leadership initiatives to comprehensive corporate social responsibility programs.

Public opinion surveys can track changes in attitudes towards a company in the weeks and months after reputation-focused programs are launched.
Weathering a crisis: The last word
Most lectures on crisis management point out that the Chinese expression for crisis, wei ji, is a combination of two words: danger and opportunity. While no company would willingly submit itself to the dangers inherent in a crisis, the company that weathers a crisis well understands that opportunity can come out of adversity. A well-managed crisis response, coupled with an effective recovery program, will leave stakeholders with a favorable impression and renewed confidence in the affected company.
References
Pauchant, T. C., & Mitroff, I.I. (1992). Transforming the crisis-prone organization: Preventing individual, organizational, and environmental tragedies. San Francisco: Jossey-Bass.

Soeder, J. (1993). Anatomy of an avoidable tragedy. Restaurant Hospitality, 77, 34.

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11 Chapter 11: Leadership Communication in the New Workplace and Crisis Communication

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A communication network refers to how information flows within the organization. Information within an organization generally flows through a system, rather than being a free flow. Communication networks are regular patterns of person-to-person relationships through which information flows in an organization. This means that the flow of information is managed, regulated.

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There are the standard business communication channels, then the post-covid world ones. As the world is adapting and changing, it is essential to note the all-time high of remote work-from-home jobs. This website page provides remote communication channels and their impact on remote and hybrid teams.

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Remote teamwork is here to stay and we're not close to give up the office. Teams will increasingly have to juggle among communication channels and platforms to adapt to their rapidly evolving workplace.

But what's the point of multiplying communication channels if they are not used effectively? On this matter one big mistake we've seen during the pandemic is wrong channel selection. When teams chose the wrong channel, at the wrong moment, for the wrong task. Some teams even lock themselves into limiting "workplace ideologies" like the zero-office company, the zero meetings team, the lovers or enemies of Slack, everything on Zoom, etc.

All communication channels have their pros and cons, the art is to use them strategically to get the benefits without the drawbacks.

What not to do

A first bad example is solving complex problems with messaging apps. For example:

@Ann, @Bob, @Cliff: client is asking for new features to be developed by the end of the month. It's urgent. All the documents are on the shared drive. Thanks.

@Peter: stop criticizing me in public.

Resolving a complex problem like starting a new project or managing emotional situations requires a lot of information exchange and team interactions. Too little information gets through messaging apps and people must "guess" the missing pieces. As a result, perception gaps make small problems grow bigger and bigger and eventually become unmanageable. We met a zero meetings team whose projects were all late and over budget. Members were complaining about the messaging app and were on the verge of burnout, not difficult to guess why.

A second example is holding online meetings or large gatherings for simple updates. We heard things like:

Bob: "This week we had no workload problems, we performed quality tests and the project is on schedule. I'll go through the checklist point by point. 1 ..., 2 ..., 15 ..."

Ann: "We're working on the final sketches, as you can see on my shared screen the top navigation is completed and we're starting filling in the content. Let's have a closer look at the 10 sections: ..."

Reading this information would have taken 10 minutes, while (1) the meeting lasted two hours and (2) participants weren't asked anything. Not surprisingly, cameras turn off one after the other and all you can see is walls of black squares with initials. Some teams we met mostly relying on Zoom weren't more successful than those just relying on messaging. Members complained about the excess of back-to-back meetings, the difficulty to complete their own work (due to interruptions) and that projects were progressing too slowly.

These two examples illustrate what we call wrong channel selection. Zoom or Slack are not the problem, but when they're used and for what.

Smart Channel Selection

Teams are smart at channel selection when they use high-bandwidth channels for solving complex problems and low bandwidth channels for simple ones. Not when they are doing the other way around, or when they lock themselves into a single channel.

Complex tasks require a high degree of team coordination. More information exchange, more questions and answers, more alignment on who does what, when, with whom and so on. To get all this information through is easier with high-bandwidth channels. Psycholinguistic studies and media richness theory have demonstrated that synchronous channels like face-to-face and video-conferencing offer higher bandwidths than asynchronous channels like messaging apps or email. So rich channels should be privileged when solving complex problems. We know this unconsciously: it's more efficient for a team of scientists to develop a new vaccine by talking to each other, than by exclusively texting each other. Similar complex problems are managing emotional situations, onboarding a new team member or finding a developing a prototype.

Low complexity tasks require less coordination and it's smart to use channels with lower bandwidth. Messaging apps and emails do the job perfectly and offer the great advantage of flexibility. Team members can organize their time freely and work without being interrupted for greater personal efficiency. It's a real waste of time, productivity and bandwidth to call a meeting for sharing minor updates or notifying about changes.

Add Visuals and Gain Even More Power

Choosing the right channel is the first step. To be even more efficient, switch to visual facilitation. 50% of meetings were considered unproductive before the pandemic

and this percentage may be even higher online if you haven't already moved to visual facilitation. Mere talk is evanescent and it's easy to forget or go around in circles. Meetings held simultaneously using video-conferencing and digital whiteboards enable higher degrees efficiency, especially if structured with visual tools. Visual tools help focus the conversation, actively involve participants and get tangible deliverables at the end.

Team progress becomes visible. The level of alignment is also greater: everyone can refer to and share the same visual content. For example, we use visual tools like the Team Alignment Map and the Team Contract before running an innovation sprint or to kick-off new projects.

The Team Alignment Map is a co-planning tool: plan the work, allocate resources and reduce projects' risks together.

The Team Contract helps define the team rules and behaviors.

When embedded in digital whiteboards like the Strategyzer app or Miro.com, team members can easily co-plan activities, negotiate resources or define the team rules of the game from home, in the office or both.

The Strategyzer App is a whiteboard dedicated to strategy and innovation management.

Miro.com is a multi-purpose whiteboard for running online workshops.

It is the ideal setup for hybrid teams. Members can actively contribute to the team, no matter where they are located, simultaneously or independently.

Find out more about Stefano's work on www.teamalignment.co/

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Remote Teamwork: Selecting the Right Communication Channels

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Remote teamwork is here to stay and we're not close to give up the office. Teams will increasingly have to juggle among communication channels and platforms to adapt to their rapidly evolving workplace. But what's the point of multiplying communication channels if they are not used effectively?

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If a leader's vision is clear, distinctive, and specific to the view of the future, employees can feel empowered and work with enthusiasm and have feelings of importance towards achieving that vision. This page identifies that and gives advice on how leaders can use their vision to motivate their employees.

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Great leaders have vision. There are very few natural visionary leaders in the corporate world. I have been lucky to have worked with two during my 34-year career with Walt Disney World. The good news is that this is a skill that can be learned. It is probably the most powerful tool in a leader’s toolbox. So what is a vision? How does it work, and how is it different from a vision statement?

Let's begin by defining a vision statement and a vision. A vision statement is a statement of words describing where and what an organization wants to be in the future. It usually remains unchanged for many years. There is nothing wrong with vision statements. They have their place in the organizational structure. However, vision statements do not necessarily translate into action. Without action, an organization has a nicely framed statement on the wall but no forward motion.

In contrast, vision can be defined as a picture in the leader's imagination that motivates people to action when communicated compellingly, passionately and clearly.

To be a visionary, a leader need have nothing more than a clear vision of the future. The difficult task is communicating that vision with clarity and passion in order to motivate and inspire people to take action. A visionary leader who clearly and passionately communicates his or her vision can motivate employees to act with passion and purpose, thereby ensuring that everyone is working toward a common goal. The end result is that everyone contributes to the organization's forward momentum.

"In order to take the organization to the highest possible level, leaders must engage their people with a compelling and tangible vision," said Warren Bennis, professor of business administration at the University of Southern California's Marshall School of Business.

What follows is a practice exercise that you can use to develop and hone your visionary communication skills:

Step 1: Think of one challenge within your department, division or organization.

Step 2: Imagine the big picture. Visualize the incredible future success that you will realize from the new and improved situation, as well as the benefits to the organization and to the employees. This is your chance to be a true visionary. No dream is too big or too fantastic. This is the "pie in the sky" result you are seeing.

Step 3: Determine how you will communicate your vision. What words and phrases will you use? In what environment will you choose to communicate your vision – in a staff meeting, one on one, with supervisors and managers? How will you communicate the benefits to the staff and to the organization? Write down your ideas on paper.

Step 4: Practice communicating what you have written. Make sure it sounds sincere. Practice out loud to yourself and to others. If you don't believe it, no one else will believe it either.

If you use this exercise frequently, you will find that expressing your vision in a compelling and clear manner will soon feel very natural.

When you are ready to communicate your vision to your employees, give them only the vision of success. Great leaders use vision as a tool to inspire and motivate, not to dictate. Do not give your employees the steps for achieving the vision, but let them determine the methods and tactics for achieving the goal. Great leaders know how to give the gift of vision and then step away.

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Great leaders have vision. There are very few natural visionary leaders in the corporate world. I have been lucky to have worked with two during my 34-year career with Walt Disney World. The good...

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This webpage discusses whether leaders are born or made, as covered in the module. Although both are possible, this gives statistical analysis and expert opinions that can help shape how you feel about and understand different leaderships.

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What's the difference between a born leader and a made leader?

Are leaders born or trained?

Can leadership training for managers create better leaders?

Though some people may already possess many of the skills and qualities that make a great leader, they can always grow and hone their leadership ability. And just because someone doesn't appear to be a leader outwardly doesn't mean they can't develop leadership skills through a leader training program.

The keys to great leadership in your company simply involve providing the opportunities and custom training to foster leadership growth in your employees.

If you want to know what good leadership training looks like or how to become a good leader, you're in the right place.

Keep reading to learn why great leaders are made not born and how to start providing the best leadership training to your employees.

Are Leaders Born or Trained?

For decades, people have been trying to figure out whether great leaders are born with innate leadership skills or if you can develop people into leaders. Recent scientific studies suggest that leadership is 30% genetic and 70% learned. These findings propose that leaders are made not born.

Ultimately, the answer is that both are true: a person can be born with natural leadership abilities, and someone can learn how to be a good leader at work. Regardless of whether someone is a "born leader," everyone has room to learn new skills and grow in leadership competency.

The ability to train leaders is excellent news for organizations. You don't need to wait around for someone with natural leadership skills to arrive-you can start training great leaders today.

Additionally, providing leadership training to your employees doesn't just prepare them for more senior positions, it also comes with a host of benefits like:

Reduced employee turnover

Increased leader confidence

Double-digit YOY revenue growth

Increased training satisfaction rates

However, it's not enough to simply know that you can train leaders and the benefits of good leadership training. You also must know how to train employees and what leadership training for managers or other employees looks like.

The Best Leadership Training for Managers

When choosing a leadership training program, you want to ensure that it's effective and provides the value you expect.

Every company will be slightly different and need unique topics for their specific teams. However, the best leadership training contains some similar elements.

Here are three things to keep in mind when developing your leadership training program.

Goal-oriented Training

First and foremost, your training needs to be goal-oriented.

Your business has goals and objectives you want to achieve, but you can't do it all on your own. You need other leaders in the organization who know your goals and how to achieve them.

What are your overall business goals?

Do your managers know these goals?

Are your managers equipped to direct their teams toward these goals?

Managers are your boots on the ground. They're the ones who help guide and direct teams and employees towards the company's goals. You want your managers to know the company's goals and feel confident leading others in the right direction.

As you create a leadership training program, ask yourself, "Will the employees who go through this training leave understanding our goals and how to achieve them?"

Compelling and Engaging Content

Once you've made your goals the focal point of the training, it's time to think about the actual training content. One of the keys to great leadership training is compelling and engaging content.

These days, it's not enough to simply provide information about being a leader. Employees need content that's engaging and compelling. People don't want to sit in an extended seminar, watch hours of boring videos, or read long paragraphs of text. You need to provide your training content in such a way that it drives learner retention.

So, how do you engage employees while also providing them with valuable training content?

You need to get creative, customize your program, and potentially invest in an LMS. An LMS (or learning management system) is an online platform that allows you to distribute customized training content to employees in many different forms. Some of the ways an LMS will enable you to engage employees include:

Using various content modalities provides employees with a fresh way to learn. These modalities help drive learner engagement and retention.

Remote Accessibility

Lastly, you want your potential leaders to quickly, easily, and remotely access the training content.

Business has become increasingly remote. But training doesn't need to stop or slow down in a remote environment.

Above, we mentioned that an LMS provides an excellent way to deliver engaging training content. It's also a great way to make your training accessible at all hours of the day and from anywhere in the world.

Even if your company is moving back to the office soon, you can't overlook the benefit and value of employees' ability to train continuously. And if your company is staying remote, then you need a way to keep training and developing leaders from outside the office.

With an LMS, your leaders can access and engage in training at the office, in their homes, at a coworking space, or anywhere in between.

Expert Help Developing Good Leadership Training

Great leaders are necessary for any organization that wants to grow its business and achieve its goals. And every company can have great leaders without needing to go out and hire new senior-level employees.

Many people think there's a difference between a born leader and a made leader. Some people may have natural leadership qualities. However, even the most seasoned leaders learned skills along the way and still have areas of improvement. Recent studies also suggest that leaders are made not born.

If leaders can be developed and improve their leadership capabilities, you can start identifying and training up leaders today.

Your specific training program needs may differ from other organizations, but the best leadership trainings are:

Goal-oriented

Compelling and engaging

Remotely accessible

You want your managers and employees to know how to become a good leader, so give them the leadership training they need.

At Unboxed Training & Technology, we specialize in custom, engaging leadership training solutions. We take the time to understand you, your business, and your needs. Then, our team gets to work creating a tailored training program that's relevant and on-brand. The result? A training program that helps you develop great leaders within your organization.

Request a demo of our custom training solution to see how it can help increase your company's growth, employee retention, and customer satisfaction.

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What's The Difference Between A Born Leader And Made Leader?

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What's the difference between a born leader and a made leader? Are leaders born or trained? Can leadership training for managers create better leaders? Though some people may already possess many of the skills and qualities that make a great leader, they can always grow and hone their leadership ability.

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This test caught my attention in the module. As not only does it say much about how coworkers feel about one another, but the test taker themselves. Here is a printout version of the test which would be of good use for any leader wanting to get to know their staff.

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I believe being an autocratic leader would be the least beneficial of all leadership styles. This link weighs the pros and cons of being an autocratic leader so you can decide for yourself!

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What do Adolf Hitler, Napoleon Bonaparte, Queen Elizabeth I, and Vladimir Putin have in common? They are all examples of autocratic leadership-when one leader exercises complete, authoritarian control over a group or organization-or in the case of these famous autocrats, vast empires. Leaders who use the autocratic style typically make all the decisions with little to no input from others. It's important to distinguish dictators from these leaders. All dictators are autocratic leaders, but not all autocratic leaders are necessarily dictators. Autocratic leaders are not in the business of using their power for oppression, instead this leadership style is more focused on power for pushing the group forward.

Still, as extreme as it may sound when it comes to running a company, there are instances when autocratic leadership can be good for business. This article will explore those instances as well those where this leadership would not be effective.

The purpose of the autocratic leadership style is to establish centralized control and use that control to achieve desired results, whether this be for a for-profit corporation or nonprofit organization. This leadership style is characterized by the following:

Limited input from stakeholders. The autocratic leader makes most if not all decisions, leaving little if any room for feedback. This might boost efficiency since decisions are made quicker, but it sure doesn't boost team morale. If employees aren't trusted with decisions or important tasks, they question the value they bring to the company and may very well pack up and take their skills to another. Let's say a fashion editor at a major style publication went above and beyond producing a photo shoot and story, only to learn that it got scrapped because the editor-in-chief simply didn't like it. Depending on how thick-skinned they are, a subordinate can only take so much rejection from an autocratic manager. In this leadership style example, autocratic methods may lead to someone wanting to quit and low morale.

Highly structured environment. Structure is an absolute must in any organization. But in an autocracy, the environment tends to be highly structured to the point of being rigid. When there's no doubt who's in charge with this leadership style, tasks can get accomplished more quickly-that's the upside. On the contrary, the work setting can be too stringent in an autocratic environment. For instance, if a team member knows their performance is constantly being monitored, fear might be their only motivation to get the job done.

Clearly defined rules and processes. Under an autocratic leader, there's no question who has the final say, whether it be on a critical business decision or how the company is run. When roles, rules, and processes are clearly defined in this leadership style setting, things tend to run smoothly and efficiently since one person is calling all the shots. But sacrificing employee creativity and input in the process risks missing out on brilliant ideas. Even worse, it sends a loud and clear message that their creativity or input is not valued. To illustrate this point, consider the classic "suggestion box" in which employees are invited to submit their ideas to improve the company. Merely having a suggestion box available sends the message that input from the workforce is welcomed and might even be considered. Not so much in a business with an autocratic leadership structure. For one, there would just never be a suggestion box. What would be the point if only one person is making all the decisions?

Bill Gates. The driving force behind Microsoft has a leadership style that's a mix of authoritarian and participative. He's a master delegator of tasks but at the same time understands the value of harnessing the skills of his team members to the fullest. This combination of styles led to the enormous success of the company.

Abraham Lincoln. Honest Abe rarely gave battlefield orders but made many autonomous decisions during the Civil War. According to Smithsonian Magazine, "He applied his large quotient of common sense to slice through the obfuscations and excuses of military subordinates." The outcome of President Lincoln's autocratic leadership style had a profound, everlasting effect on America: the abolishment of slavery.

Napoleon Bonaparte. The French Revolution military leader was notorious for his autocratic leadership style. He commanded a huge army without sharing his ideas with anyone. Clearly, his tactics worked. How else could he have expanded his empire to over 70 million people?

Autocratic leaders are stereotyped as bossy, brutal, and lacking empathy. Their absolute power can be intimidating and strike fear. Still, this style can work well where strong, direct leadership is needed. Here are some examples of when this clear chain of command can make or break a business or organization.

When urgent decisions need to be made quickly. With the responsibility falling on the top person in charge, there's no need to get input from team members. The autocratic leader makes the proverbial executive decision and-boom-the process moves forward.

When work performance needs to be closely monitored. Keeping a watchful eye on employees ensures tasks are performed efficiently and effectively-and makes it easy to quickly identify problem areas in the workflow and take corrective action.

When strict coordination of processes is crucial to productivity. With complex decision-making left to the leader, employees can focus on their specific responsibilities. Again, this speaks to high efficiency.

High turnover. Not giving employees a voice in company matters is bound to dampen morale, decrease productivity, and send them searching for other opportunities.

Resistance to change. An effective leader needs to be flexible and adaptable to change. Autocratic leaders might be resistant to this because they are so used to doing things one way: their way.

Little room for initiative and cooperation. An autocratic leadership work environment is not for the individual who thrives on collaboration and taking initiative. Employees who are proactive and knowledgeable about their role could find it challenging to work in an environment that doesn't encourage contribution of their best skills. Empathetic leadership would be a much better fit. This leadership style is practically the polar opposite of autocratic leadership. An empathetic leader sees great value in making strong emotional connections with their employees.

Strong centralized control can help organizations meet their objectives. This can prove especially effective in work environments where there is little margin for error, such as a hospital emergency room. Let's say an amputation is necessary to avoid spreading infection to the rest of a patient's body. Only the ER physician could make that call. A nursing leadership role would also warrant autocratic decision-making. For instance, a team of nurses you manage relies on you to make a critical decision in how to administer care to a patient.

An inappropriate scenario for the autocratic leadership style would be an advertising agency pitching television commercial ideas to a client. The creative director may have the final say on what to present to the client but relies heavily on the knowledge and unique skill sets of a creative team to execute the work. Since the advertising profession calls for more of a participative management style, autocratic leadership, in this case, just wouldn't work.

While autocratic leadership certainly makes for interesting conversation, it isn't for everyone. No matter what type of leadership may appeal to you, seeking a business degree online from WGU could help you acquire the knowledge and skills you need to become an effective leader. Plus, if you already have leadership experience, this could help accelerate your degree in several of WGU's competency-based online programs. Find out today how WGU can turn you into one of tomorrow's leaders!

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What do Adolf Hitler, Napoleon Bonaparte, Queen Elizabeth I, and Vladimir Putin have in common? They are all examples of autocratic leadership-when one leader exercises complete, authoritarian control over a group or organization-or in the case of these famous autocrats, vast empires.

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This webpage offers a decision tree template which is beneficial for any leader who has to make a decision, big or small. This is important to be able to look back upon and notate as it is beneficial for leaders, but anyone needing to face a decision in their lives doesn't quite know the answer they want to decide.

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What is a decision tree?

A decision tree is a simple flowchart used to help users see their options by allowing them to visualize all of the potential outcomes of a decision. With each decision and outcome clearly defined, you and your team can make sure that you're investing in the right outcome.

Laid out from left to right, the decision tree begins with a decision node at the "trunk" of the diagram, branching out into chance nodes, with final potential outcomes or end nodes as the tree's "leaves." Each branch represents a variety of information, including the probability of an outcome, success vs failure, and other variables. By following any single line in the chart, you can see the probability and ultimate result of any potential outcome at a glance.

In short, the decision tree is an efficient, zero-risk method for visually weighing out all the options before making any concrete decisions.

What is the purpose of a decision tree?

Decision trees typically play one of two roles: predicting or describing what to do in certain situations. In this case, the decision tree is used to predict what outcomes are possible, which outcomes are probable, and what those outcomes look like, based on a variety of factors.

Together with your team, you can use your decision tree to assess risk and test-drive multiple scenarios before investing precious time, money, and resources into your plan. This makes the decision tree an incredibly powerful tool when it comes to:

Presenting an option's potential from a variety of angles

Examining possible investments

Predicting a product's viability

Getting buy-in from stakeholders

Allocating company resources responsibly

The decision tree can be used in limitless ways, in virtually any scenario, based on your team's needs. Scale the decision tree to include as many potential outcomes as you need, so you can be confident that you, your team, and your stakeholders have a clear understanding of what's possible. Decision tree templates can help with the creation process. If you want to get started, you can use our online decision tree creator.

How to make a decision tree online with Lucidspark

We've broken down how to use our decision tree template in six simple steps. Take a look:

1. Decide on a question or theme

Start your decision tree online by defining the question, theme, or decision you'd like to explore. Use your question or theme to title your Lucidspark decision tree template on your whiteboard, as well as your decision node.

2. Label your branches

Think about your possible choices. Label the branches stemming from your decision node with each of your individual options. If you need to add additional branches, click and drag a line from the decision node.

3. Label leaf nodes

Label each leaf node with a question or choice. Think of each leaf node as a possible "If, then" statement. For example, if you invest in Option 1, then what will likely happen to your revenue, client base, etc? Do the same exercise for Option 2.

4. Terminate branches

Work through each question posed in your free decision tree maker, answering each "If, then" statement. Each branch should end at a leaf node labeled with the final potential outcome of a decision.

5. Run your findings past stakeholders

Once you are finished with the online decision tree maker, go through the results with collaborators and stakeholders to make sure it's an accurate representation of real-life possibilities. Share your decision tree online with collaborators to add comments, make edits, or chat about your decision in real time.

With your completed decision tree chart, you can use Lucidspark to take your plan into next steps with brainstorming sessions, visual workflows, project documentation, and more.

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A decision tree is a simple flowchart used to help users see their options by allowing them to visualize all of the potential outcomes of a decision. With each decision and outcome clearly defined, you and your team can make sure that you're investing in the right outcome.

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Identifying which leadership style you most align with can benefit your leadership and your followers. If you can focus on how to improve and choose your specific leadership style, your leadership can immensely improve!

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Do you believe that you can adapt your style? Harvard University professor Ron Heifetz and leadership experts David Rooke and William Torbert say that you can. So let's look in more depth at Lewin's leadership styles, their strengths and risks, and how you might become more skillful in using them.

Authoritarian, Autocratic Leadership

This approach is helpful when your team needs to follow a process "to the letter," to manage a significant risk. It's also effective when you need to be hands-on with people who miss deadlines, in departments where conflict is an issue, or in teams that rely on quick decisions being made.

But you need to be aware that relying on control and punishment to maintain standards will likely drive people away. Similarly, if you always demand that your team works at top speed, you can end up exhausting everyone.

Instead, you can show respect for team members by providing the rationale for your decisions. And they will more likely comply with your expectations if you take the trouble to explain Why the Rules Are There.

You can improve your ability to "lead from the front" by Planning for a Crisis, Thinking on Your Feet, and making good decisions under pressure. But be sure to balance these skills with an awareness of their potential negative impact on creativity, ideas gathering, motivation, and trust within the team.

Being too autocratic can also mean that you'll find it hard to stand back from the detail and take a wider, more strategic view.

Democratic, Participative Leadership

With this approach, you set goals, guide team discussions, and make the final decision. But you also acknowledge that your people can have valuable insight into a problem or process, so you actively consult them. As a result, you'll likely gain creative input and fresh ideas that you wouldn't have come up with if you were working alone.

You might wonder how to manage differing opinions in the team, once you've invited participation in this way. Your goal is to build a culture in which people can have healthy debates with one another. So:

Be aware that processes could become dangerously slow if you involve your team members in every decision. You'll need to judge carefully whether you need to adopt a more autocratic approach, even if it's only briefly.

The Delegating, "Laissez Faire" Leader

"Laissez faire" is a French phrase adopted into English that means, "Let (people) do (as they choose)." It describes a policy of leaving situations to run their own course, without interfering.

By adopting this style of leadership, you empower your team to make decisions and to organize its own processes, with little or no guidance. The danger of this approach is that situations can collapse into chaos if your people have low motivation or poor skills. It can work, however, if they are experienced, knowledgeable, confident, creative, and driven, or if deadlines are flexible and processes are simple.

Be in no doubt, though, that as the leader you will still be held accountable for the outcome! So you might want to organize team decision making processes to support your people while you take a "hands off" approach. Just be sure to delegate the right task to the right person, as a mismatch could mean that the whole team fails.

Avoid becoming too remote, even with a high-performing, highly autonomous team. Change can occur at any time in business, so your organization's requirements for your team might shift after your initial brief. If this happens, stay in touch with your people, and communicate clearly and promptly. Remember, you can offer your support without becoming a micromanager!

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What's Your Leadership Style? - Learn About the Strengths and Weaknesses of the Way You Like to Lead

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Leadership styles. Strengths and weaknesses.

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I found this need-based theory of motivation the most difficult to grasp and one of the most important as theories can build upon the basis of this. This video thoroughly explains what it is and how it works!

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Abraham Maslow's hierarchy of needs is one of the best-known theories of motivation. Maslow's theory states that our actions are motivated by certain physiological and psychological needs that progress from basic to complex.

Maslow's Hierarchy of Needs Theory

Abraham Maslow first introduced the concept of a hierarchy of needs in his 1943 paper, titled "A Theory of Human Motivation," and again in his subsequent book, "Motivation and Personality." This hierarchy suggests that people are motivated to fulfill basic needs before moving on to other, more advanced needs.

While some of the existing schools of thought at the time-such as psychoanalysis and behaviorism -tended to focus on problematic behaviors, Maslow was more interested in learning about what makes people happy and what they do to achieve that aim.

As a humanist, Maslow believed that people have an inborn desire to be self-actualized, that is, to be all they can be. To achieve this ultimate goal, however, a number of more basic needs must be met. This includes the need for food, safety, love, and self-esteem.

Maslow believed that these needs are similar to instincts and play a major role in motivating behavior. There are five different levels of Maslow's hierarchy of needs, starting at the lowest level known as physiological needs.

Physiological Needs

The physiological needs include those that are vital to survival. Some examples of physiological needs include:

In addition to the basic requirements of nutrition, air, and temperature regulation, physiological needs also include shelter and clothing. Maslow included sexual reproduction in this level of the hierarchy as well, since it is essential to the survival and propagation of the species.

Security and Safety Needs

At the second level of Maslow's hierarchy, the needs start to become a bit more complex. At this level, the needs for security and safety become primary.

People want control and order in their lives. Some of the basic security and safety needs include:

Finding a job, obtaining health insurance and health care, contributing money to a savings account, and moving to a safer neighborhood are all examples of actions motivated by security and safety needs.

Social Needs

The social needs in Maslow's hierarchy include love, acceptance, and belonging. At this level, the need for emotional relationships drives human behavior. Some of the things that satisfy this need include:

Friendships

Romantic attachments

Family relationships

Social groups

Community groups

Churches and religious organizations

In order to avoid loneliness, depression, and anxiety, it is important for people to feel loved and accepted by others. Personal relationships with friends, family, and lovers play an important role, as does involvement in groups-such as religious groups, sports teams, book clubs, and other group activities.

Esteem Needs

At the fourth level in Maslow's hierarchy is the need for appreciation and respect. Once the needs at the bottom three levels have been satisfied, the esteem needs begin to play a more prominent role in motivating behavior.

At this level, it becomes increasingly important to gain the respect and appreciation of others. People have a need to accomplish things, then have their efforts recognized. In addition to the need for feelings of accomplishment and prestige, esteem needs include such things as self-esteem and personal worth.

People need to sense that they are valued by others and feel that they are making a contribution to the world. Participation in professional activities, academic accomplishments, athletic or team participation, and personal hobbies can all play a role in fulfilling the esteem needs.

People who are able to satisfy esteem needs by achieving good self-esteem and the recognition of others tend to feel confident in their abilities. Conversely, those who lack self-esteem and the respect of others can develop feelings of inferiority.

Self-Actualization Needs

At the very peak of Maslow's hierarchy are the self-actualization needs. Self-actualizing people are self-aware, concerned with personal growth, less concerned with the opinions of others, and interested in fulfilling their potential.

"What a man can be, he must be," Maslow explained, referring to the need people have to achieve their full potential as human beings.

Maslow's said of self-actualization: "It may be loosely described as the full use and exploitation of talents, capabilities, potentialities, etc. Such people seem to be fulfilling themselves and to be doing the best that they are capable of doing. They are people who have developed or are developing to the full stature of which they capable."

Progressing Through the Pyramid of Needs

Maslow's hierarchy of needs is often displayed as a pyramid. The lowest levels of the pyramid of needs are made up of the most basic needs while the most complex needs are at the top.

Once lower-level needs have been met, people can move on to the next level of needs. As people progress up the pyramid, needs become increasingly psychological and social.

At the top of the pyramid, the need for personal esteem and feelings of accomplishment take priority. Like Carl Rogers, Maslow emphasized the importance of self-actualization, which is a process of growing and developing as a person in order to achieve individual potential.

Different Types of Needs

Maslow's hierarchy of needs can be separated into two types of needs: deficiency needs and growth needs.

Deficiency needs: Physiological, security, social, and esteem needs are deficiency needs, which arise due to deprivation. Satisfying these lower-level needs is important to avoid unpleasant feelings or consequences.

Growth needs: Maslow called the needs at the top of the pyramid growth needs. These needs don't stem from a lack of something, but rather from a desire to grow as a person.

While the theory is generally portrayed as a fairly rigid hierarchy, Maslow noted that the order in which these needs are fulfilled does not always follow this standard progression.

For example, he noted that for some individuals, the need for self-esteem is more important than the need for love. For others, the need for creative fulfillment may supersede even the most basic needs.

Criticisms of Maslow's Theory

Maslow's theory has become wildly popular both in and out of psychology. The fields of education and business have been particularly influenced by the theory. But Maslow's concept has not been without criticism. Chief among the long-held objections are:

Needs don't follow a hierarchy: While some research has shown support for Maslow's theories, most of the research has not been able to substantiate the idea of a needs hierarchy. Wahba and Bridwell (researchers from Baruch College) reported that there was little evidence for Maslow's ranking of these needs and even less evidence that these needs are in a hierarchical order.

The theory is difficult to test: Other critics of Maslow's theory note that his definition of self-actualization is difficult to test scientifically. His research on self-actualization was also based on a very limited sample of individuals, including people he knew as well as biographies of famous individuals who Maslow believed to be self-actualized.

Some of the more recent critiques suggest that Maslow was inspired by the belief systems of the Blackfoot nation, but neglected to acknowledge this. Maslow's studied the Northern Blackfoot tribe as an anthropologist. However, this foundational basis disappeared over time, causing him to misuse the concepts he was originally there to assess.

Impact of Maslow's Hierarchy

Regardless of these criticisms, Maslow's hierarchy of needs represented part of an important shift in psychology. Rather than focusing on abnormal behavior and development, Maslow's humanistic psychology was focused on the development of healthy individuals.

There has been relatively little research supporting Maslow's theory, yet the hierarchy of needs is well-known and popular both in and out of psychology. And in a study published in 2011, researchers from the University of Illinois set out to put this hierarchy to the test.

What they discovered is that, while the fulfillment of the needs was strongly correlated with happiness, people from cultures all over the world reported that self-actualization and social needs were important even when many of the most basic needs were unfulfilled.

Such results suggest that while these needs can be powerful motivators of human behavior, they do not necessarily take the hierarchical form that Maslow described.

The Expanded Hierarchy of Needs

In 1970, Maslow built upon his original hierarchy to include three additional needs at the top of his pyramid, for a total of eight:

Cognitive needs. This centers on knowledge. People generally want to learn and know things about their world and their places in it.

Aesthetic needs. This addresses the appreciation of beauty and form. People might fulfill this need through enjoying or creating music, art, literature, and other creative expressions.

Transcendence needs. Maslow believed that humans are driven to look beyond the physical self in search of meaning. Helping others, practicing spirituality, and connecting with nature are a few ways we might meet this need.

A Word From Verywell

Whether you accept Maslow's hierarchy of needs or not, his theory shines a light on the many needs we have as human beings. And even if we don't all place these needs in the same order, keeping them in mind when interacting with others can help make our interactions more caring and respectful.

Frequently Asked Questions

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How Maslow's Hierarchy of Needs Explains Human Motivation

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Maslow's hierarchy of needs describes five levels of needs that motivate human nature. Learn more about the pyramid of needs and why it matters.

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Being a leader, you want your team not only to succeed but thrive. Setting goals can make it easier and more motivationally apparent for the leader and the entire staff.

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All organizations share a primary goal: Success. In achieving success, organizations must first establish goals that are attainable, and then track these goals by examining employees' actions and results (Locke, 1968). Moreover, most organizations see a dramatic increase in employee performance when they effectively set individual employee goals and closely tie them to the company's overall strategy (Northouse, 2013).

The process of setting goals should be a collaborative process between employees and leaders. Whether writing long- or short-term goals, it is highly recommended that leaders use the S-M-A-R-T approach to setting goals (Northouse, 2013). As such, it is important that leaders set specific goals for employees. Well-defined goals inform employees exactly on what is expected, when, and how much expected from each employee (Latham, 1975). With specific goals, leaders can measure employee progress toward goal completion. Measurable goals provide milestones to track progress as well as to motivate employees towards goal success (Locke, 1968). Accordingly, success can only be achieved when leaders set goals that are not too high nor too low, but attainable for the average individual employee to complete. In doing this, leadersshould focus on setting goals that will ultimately benefit their organizations success. Lastly, when setting goals, leaders must allow enough time for their employees to achieve these goals, but not too much time to undermine performance (Latham, 1975).

Leaders that clearly understand the significance of goal setting and how they play an important role in developing goals, will ultimately lead a more successful team in their work environment. Additionally, organizations must acknowledge and connect their achievements to their leaders abilities to develop, track and communicate goals to their teams. Although, developing and tracking SMART goals can be difficult at times, it is important that leaders always align their employees goals with organization objectives, and make all efforts to measure their teams success (Northouse, 2013).

References:

Locke, E. A. (1968). Toward a theory of task motivation and incentive. Organizational Behavior and Human Performance, 3, 157-189.

Latham, G. P., & Baldes, J. J. (1975). The practical significance of Locke's theory of goal setting. Journal of Applied Psychology, 60, 122-124.

Northouse, P.G. (2013). Leadership: Theory and Practice. Los Angeles: Sage Publications. ISBN 9781452203409

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Setting Goals: How Leaders Can Set Their Teams For Success

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All organizations share a primary goal: Success. In achieving success, organizations must first establish goals that are attainable, and then track these goals by examining employees' actions and results (Locke, 1968). Moreover, most organizations see a dramatic increase in employee performance when they effectively set individual employee goals and closely tie them to the company's overall strategy (Northouse, 2013).

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LinkedIn is an excellent resource for any manager as they offer great resources and advice. This specific weblink compares and contrasts the differences between an ethical and a moral leader, as well as how the two can interact.

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Ask any leader:

This time and moment is a true test of leadership.

As a leader in your company, team, or community -- do you say something? What should you say? What if you don't get it right? Truth is, you probably won't. But to not say something would be even worse. This is a moment when words (and actions) have power.

In this article, I want to share with you --

1. A defining frame: leaders want to be good moral humans

2. The difference between morals and ethics -- and why it matters

3. Comms guidelines: 6 steps for navigating a moral moment

As the CEO of Storied, a strategic messaging firm rooted in the discourse of narrative, I've been exploring the issues of truth, hope, power, and compassion for almost 20 years.

Leading change and transformation is at the heart of every leader's journey. COVID-19, #BlackLivesMatter, and so much more has upended the world as we know it. Over the past few months, we've been advising leaders on how to navigate systemic-level disruption. With a focus on how to communicate meaningfully, strategically, and authentically around complex issues full of moral and ethical dimensions.

I am in no way an expert on systemic racism, but I do know a little about story and narrative. Especially through the lens of my training as a cultural anthropologist.

Disruption challenges the very bedrock of our beliefs, norms, and values. It invites us to look at the world through a new lens. If we can widen the aperture of our hidden biases, filters, and dominant stories. Yet this is not easy work. It has challenged my own self-conception and image as a leader. I've confronted my power, privilege, and responsibility. And had to reckon with my own share of ethical dilemmas in the midst of fast-moving conditions.

Morality is a narrative that desperately needs a cultural upgrade.

Customers, employees, citizens -- all want their leaders to take a moral stand. Yet leaders must grapple with the ethical, political, and economic implications of living into a moral creed. Where most leaders fall down: is not in the moral or ethical choices, but rather in how they communicate about them. It's not the decision, it's explaining the decision -- the trade-offs and complexities that leaders have to balance in service to the collective whole. In a way that demonstrates and engenders empathy, compassion, and trust for all those impacted.

What if we re-examined morals and ethics through this lens of communications?

A Defining Frame: Leaders Want to Be Good Moral Humans

In my experience - most people want to be good moral humans. We all have a self-conception and image of being a "good person". While not perfect, most of us try to live up to the values of our parents, religion, teachers, bosses and other leaders. Our basic sense of being-ness is built upon this "moral image". For at least 95% of the population. We like to think we are fair, considerate, and respectful of others.

Leaders, especially, carry a self-conception of being a "good moral person".

After all, people are looking to them for moral leadership: guidance, insight, and perspective on what is the right thing to do. This is what we expect and look for from our leaders. And why when they overstep it is often judged as a moral lapse or lack of character. When confronted with the pain and suffering of others, leaders like to think that they care, and do something about it. For proof, just check out one episode in the 10 seasons of the Emmy-award winning TV show, Undercover Boss. Confronted by the pain and suffering of others, most of leaders feel a charge and duty to do something. Especially when the pain and suffering is experienced by people we either "care" about or feel "responsible" for. In many ways, that's the rub, but we'll come back to this.

Most of us want to be the hero in our own story.

Just look at the velocity of the moment, and headlines from the last THREE weeks--these are all challenges to the hero story of a company, brand, or leader:

And therein lies the challenge. The stories of systemic racism directly confront this self-conception and image as "good moral human." I learned this powerful insight from the work of Robin DiAngelo, author of the best-selling book, White Fragility. She introduces these insights in a powerful 6-minute video " Why 'I am not a racist' is only half the story". I find this one insight gets to the heart of why its so hard to communicate/talk about these issues.

The truth of Black Lives Matter, white privilege, and systemic racism confronts this self-image. It's especially the case for leaders, anyone responsible for taking care of the well-being of others. I personally have a strong self-conception as a "good moral leader". To have that questioned or challenged, it's hard not to get defensive.

"Have a willingness to look at yourself in a way that might challenge your hero story."

- Elly Prothero
Morals vs Ethics: Why the Difference Matters
We think of stories as an inherently moral act.

Heroes // victims // villains

Who's good // who's bad

What's right // what's wrong

Humans love a good story. We tend to live and operate from these stories, as if they are truth. Even when that story may not have the facts or truth on its side. We see this play out everyday in news headlines, political discourse, and the larger challenges of the day. A simple "good story" often fails to hold up to the complexities of life in today's world. Yet stories are central to how we understand this moment and how we find our path forward.

Morals: are about what's right and what's wrong

Ethics: are about choices and consequences

As a leader people expect you to take a moral stand. Morality is comforting and reassuring. It's unambiguous. Morality is the first impulse we turn to for safety and trust. Yet morality doesn't provide much room for nuance, context, or complexity. That's the realm of ethics. Ethics explores issues like privacy, data, supply chain, diversity, equity, inclusion, free speech, religious freedom, and human rights.

The Ten Commandment is rooted in morality. So is the U.S. Constitution's Bill of Rights. These documents are declarations of rights and wrongs. In contrast, ethics is about the interpretation. How do we apply these laws or rights?

We see this in a court of law everyday. There are laws of the land, there is past case precedent. And then there is a judge or a jury that is asked to determine their application -- what is the fair and just interpretation of this law? Based on both strict translation and the context or nuance. In the Jewish bible, the Torah - especially the book of Leviticus, it's concerned with setting down the laws, the rules, i.e. the morals. The Talmud is all about ethics - the interpretation and commentaries on these morals and their application.

The challenge is that when we move outside a court of law or religious institution, the process of governance -- defining morality and deliberating ethical dilemmas gets a lot more complicated. And yet this is the demand of a 21st century global and pluralistic society. This is especially so for the biggest tech platforms in the world - Google, Apple, Facebook, Twitter etc --- who's policies (i.e. in effect, moral bounds) and their interpretation (i.e. ethical application) is impossibly complex. Yet we humans want a simple, straightforward story to understand.

This is the weight of responsibility on the shoulders of every leader.

Take a stand for what you believe is right. Just know that any stand that marginalizes the pain, suffering, and fear, is a stand that will quickly put you on the sidelines if not remove you from a seat of leadership. We are living a moment in history that will be discussed 100 years from now. Act judiciously and with equanimity. Beyond one's initial moral convictions, the real work to be done requires a bigger story -- that is the world of ethics. Ethics is the nuanced language we need to navigate this moment. Ethics is how we heal and transform -- and change the underlying systems of society.

We must start in the realm of morals. Yet the path forward is the realm of ethics. While morals are more clear-cut, ethics is the leadership language of context, nuance and compassion.

"Storytelling reveals meaning without committing the error of defining it."

- Hannah Arendt

Perhaps this comparison chart can help frame up these distinctions:

The moral of the story is what point or judgement it's making about the rules of reality (or society). Whereas the ethics are revealed in the "meaning of the story".

In the case of morals, the exercise is in declaring the limits. Boundaries. The unequivocal. The clear distinctions of what's acceptable and what's not. What's right. What's not. Morals are objective (or so we convince ourselves).

In the case of ethics, it's more about the questions than the answers. Ethics are about the inquiry, the dialogue, and the exploration of context. Dilemma. Intersections. Morals are objective. Ethics are subjective.

For thousands of years, we used morality tales to create social order. Stories of what's right, what's wrong. Reinforced in religious texts, children's stories, the performative arts, and culture of the day. A moral story works great in a small, closed, tight-knit society. A moral story has a much harder time in a plural, global, diverse, and multi-cultural reality.

Historically, stories served to define the boundaries: friend vs foe. Tribe member vs outsider. Believer vs nonbeliever. Hero vs villain. Opposing forces. Yet somehow these stories aren't working like they used to. Perhaps it's because of the scale of which our global culture has converged. With world views and value systems colliding.

A new narrative intelligence is emerging, informed by the latest in neurobiology and the science of story. Understanding the hormones cortisol (fight/flight/freeze) and oxytocin (belonging) is critical to both the biology of story and how we learn to tell new stories that go beyond oppositional or divisive. More on this is described in the research of Paul Zak and with interpretation in my latest book Story 10x referenced at the end of this article.

Communications Guidelines: 6 steps to navigate a moral moment

COVID 19 => Black Lives Matter => inflection point => moral moment.

Based on the strategic narrative work we do, here are 6 communication guidelines that we've developed and shared with clients for navigating moral moments. We think they may be useful to you as well as you lead through these complex times.

Do not use these principles unless they are grounded in sincere conviction. Know that you will be tested, questioned, and judged. Without a clear moral compass, you are at risk of making a bad situation even worse.
One key caveat: you can't bullsh*t your way through this.

1. Name where you stand - Be unequivocal. What may feel obvious to you, is what everyone most wants and needs to hear. Don't worry about virtue signaling. This is a moment where people are overwhelmed and confused. They're seeking clarity from the leaders, organizations, and brands they care about. State your convictions in the spirit of inclusion, fairness, equality, dignity, and respect.

2. Lead with compassion -- Honor on how much people are terrified, hurting, afraid, suffering. The politics of the moment, seem to accentuate divide and opposition. Demonstrate your leadership by contrasting with compassion, heart, and sensitivity. What is your desire to create a safe environment for those you serve?

3. Anchor back to mission - Remind your employees, your customers, and the public of what is at the core what your organization is here to do. This is a moment to double down on mission and values. Maybe your company is about democratizing education. Or unlocking potential. Or providing people with greater mobility. Or financial freedom. Connect your deepest truth back to this moment.

4. Show humility - Acknowledge your own blindspots. Your desire to listen, learn, and educate yourself. Admit your own power, privilege, bias, and responsibility. Recent weeks have illustrated many of the gaps and deficits in our society and systems. For which we are all complicit. Any person in a position of power is perpetuating these inequalities. Name what you have taken for granted or dismissed as non-issues.

5. State commitments - What are the most accessible/actionable? places to start. Company-wide education? Diversity, equity, and inclusion training? More active investments in anti-racist practices? From recruiting and hiring, to addressing hidden implicit bias in your company's products, services, or customer experience. Financial commitments? Also give yourself time to study the issues and determine what are the best ways you can make an impact based on the unique strengths and assets of your organization.

6. Invite dialogue - How can your people participate in this process? When are you holding a forum on these topics? Start by letting people simply share their stories. Let people be heard. Do you have any individuals in your company that have passion and/or wisdom on these issues? How can you partner with them to lead, educate, and guide your company through this moment? What outside voices and expertise do you need to bring in? This is a moment to acknowledge not having the answers. And it takes a village to grow, evolve, and lead through change.

This is a defining time. The context you face is complex, uncharted, and multi-faceted. Communicating matters more than ever. Especially when speaking to your employees, customers, stakeholders, and the media. It takes a thoughtful and nuanced approach to take a stance without alienating your customer base--or even employees who may have a different perspective. You may face a dilemma that threatens or jeopardizes critical facets of your company's strategy, finances, reputation, customer base, political implications, and more. Not to mention the 2nd or 3rd order effects based on what you do or don't do.

As you can see, the narrative of moral leadership is no easy subject. Yet to ignore the issues is at your own peril. I hope this article has helped to highlight the power of narrative as a doorway into clarifying the moral vs ethical dimensions of your company's strategy. As Twitter, Facebook, and others in the realm of social media have shown us -- it takes more than having a set of policies to navigate a moral moment.

What's required is narrating the journey through the deliberations, and the perspectives that inform the decisions. The more you can humanize the dilemmas and tradeoffs, the more you engender compassion and trust as a leader. Nothing in life is perfect and no story is a straight line. Describing the inner journey to resolving conflict is how you navigate a moral moment.
*Want to dig deeper? Read my latest book Story 10x: Turn the Impossible Into the Inevitable. Available in hardcopy, kindle, and audiobook versions. Chapter 3 explores the science of story, specifically the role of cortisol and oxytocin as the biological drivers of tribal conflict vs belonging. Chapter 5 presents a new narrative pathway beyond hero, victim, villain. Chapter 7 introduces narrative intelligence as the future of leadership communications.

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Morals vs Ethics: The Narrative of Moral Leadership

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Ask any leader: This time and moment is a true test of leadership. As a leader in your company, team, or community -- do you say something? What should you say? What if you don't get it right? Truth is, you probably won't.

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A Multi-Factor Leadership Questionnaire 

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A Multi-Factor Leadership Questionnaire 

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Mindgarden provides multiple different questionaries for purchase that offer many different leadership evaluations. Depending on what circumstances you want to be provided with answers to, a questionnaire never hurts and can be very informational.

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Mind Garden provides this list of MLQ consultants as a resource, but does not warranty any consultants' expertise, qualifications, or any other quality.

Molly Breysse Cox, MA, PhD candidate
Contact: mollyb9@uw.edu

Molly has over 20 years of change management work experience with Fortune 500 companies. This includes leadership positions in IT, Operations, Customer Service, Product Management, and Marketing. She joined the CLST team in 2013 as a leadership development coach and member of the CLST Game Team. Molly's currently in a CLST faculty and leadership associate position working in master programs such as Technology MBA and Hybrid MBA and Jackson School of International Studies.

Molly has a BA from the University of Washington, a MA from Antioch's Center for Creative Leadership and she is currently is completing her PhD dissertation in Antioch's Leadership and Change program. Her dissertation is an examination of an individual's motivation and ability to trust in the workplace.

Molly has a broad range of experience in transformational change projects including designing and deploying new technology, designing organizational change and leadership development, and strategic planning. In addition she was chosen in 2008 as the recipient of Women in Technology International's Leadership Award for leadership in support of women in IT.

Jesse Calloway, CEC, PhD
Contact: info@leadershiplmc.com

Jesse is president of Leadership & Motivation Consultants LLC and an adjunct faculty member of Batten College of Engineering & Technology at Old Dominion University, where he received a PhD in Engineering Management. Jesse is a proven and experienced former executive, a certified executive coach, and winner of the prestigious TMCF Corporate Leadership Award.

With 25+ years of leadership experience, Jesse designed an enterprise-wide leadership development program. He offers comprehensive training, assessments, and coaching, incorporating Full Range Leadership Theory, with emphasis on practical and contingent leadership applications. Jesse has lived through every aspect of instruction that he offers and his client base includes academic, federal, non-profit and corporate settings.

Jesse has published three titles on leadership, leveraging skills, concepts, and strategies gained during the author's rise from blue-collar worker to corporate executive, which include key business and research topics and leadership theory.

Helen Chung, PhD
Contact: helenchung@spu.edu

Helen Chung teaches management for the School of Business, Government, and Economics at Seattle Pacific University. She completed her PhD in Industrial and Organizational Psychology, and her areas of interest include leadership, coaching for leadership development, and storytelling. In addition to teaching, Helen is an independent coach and consultant, working with clients who seek to build their leadership capacity and effectiveness.

Joey A. Collins, Psy. D.
Contact: drjoey@uw.edu

Joey A. Collins, Psy.D., teaches in the Industrial-Organizational Psychology graduate program at Seattle Pacific University (SPU) and is a founding member of the Center for Leadership Research & Development (CLR&D) at SPU. The CLR&D serves individuals and organizations by: (1) creating research-based tools, resources, and processes to help leaders learn and grow in real time; (2) establishing strategic partnerships with other leaders, experts, networks, and clearing houses; and (3) training a cadre of highly skilled leaders, researchers, and leadership development practitioners. Joey collaborates with the Center for Leadership and Strategic Thinking in various engagements.

Joey is a leadership development consultant specializing in executive coaching, leadership and organization development. His clients include Veterans Health Administration, General Motors, Maritz, Coinstar-Redbox, UW Medical Center -Harborview, Seattle Zoo, and Smith Gardens.

He served as a Post-Doctoral Fellow for two years with the VHA National Center for Organization Development delivering a variety of OD interventions to VA Medical Centers and Program Offices throughout the United States. He also completed his Psychology Internship at Loma Linda VA and a one-year Psychology Practicum at the VA Los Angeles Ambulatory Care Center. Joey is also a licensed Clinical Psychologist in Washington State. He received his Psy.D. in Clinical Psychology from BIOLA University.

Donna J. Dennis, PhD
Contact : donna@leadership-solutions.info

Donna is a leadership coach and consultant who has utilized transformational leadership principles in training design and delivery since 1993. She uses the MLQ to assist Leadership and Development professionals with their delivery of key leadership concepts and principles. Her clients include C.R. Bard, Chubb and Son, Inc., The University of Pennsylvania Hospital, RCA and GE. Donna has teaching experience with The Wharton Business School and the University of Pennsylvania. She is Co-Director of Leadership for the Gestalt International Study Center. Recent MLQ projects include coaching a Superintendent of Schools and his staff; assisting a Pharmaceutical VP of R&D transition to a new role requiring greater speed to market; and providing a start-up management team with training and feedback.

Donna has a PhD in Human Development with an emphasis in Adult Development from Fielding Graduate University, with undergraduate and Master's degrees from University of Illinois. She has coaching certification from Stakeholder-Based Coaching, Marshall Goldsmith, Positive Psychology (Martin Seligman), Gestalt International Study Center, Bernie Bass & Bruce Avolio, and a Professional Coach (PCC) level certification from International Coach Federation.

Dan Eisenman
Contact: eisendan@uw.edu

Dan Eisenman is an executive coach, facilitator and consultant who has over 27 years of leadership and training experience in healthcare, the military, retail, and insurance industries. For 10 years Dan has aided physicians and staff in critical care environments and healthcare administration in hospital and clinical environments, centering on leadership skill and effective interpersonal communication. With leadership experience as a military officer and as a retail manager, along with 15 years in the insurance industry, he has a broad perspective. Dan is a Certified Performance Improvement consultant with extensive experience building high performance teams. He is certified as a Leadership Coach and works with leaders at all levels. Most recently Dan operated as an executive coach for Catholic Health Initiatives' Transformative Leader Development Program and managed leader development programs for CHI Franciscan in Tacoma, Washington.

Louis Forbringer, PhD
Contact: forbrl@uw.edu

Louis (Lou) Forbringer is a consultant with over 30 years of experience working with organizations in the areas of leadership development, executive coaching, succession planning, organization development, culture change and change management. His clients have included Mirage Resorts, Laclede Gas, Edward Jones, Lord Corp., Federal Reserve Bank of St Louis, American Bankers' Association, US Bank, DRS Technologies, BP America, KeyCorp, and Catholic Health Initiatives. Lou served as the Vice President of Organizational Talent Management at Catholic Health Initiatives (2008-2014).

Lou received his Ph.D. and MA in Industrial/Organizational psychology from the University of Akron and his BA in Psychology from Allegheny College.

In addition to his work with CLST, he is an adjunct professor of Health Care Leadership at George Washington University, School of Medicine and Health Sciences. Previously, he was adjunct faculty at the Olin School of Business (1996-2008) teaching Leadership and Change Management in the MBA and Executive MBA programs and at Maryville University, teaching graduate courses in Leadership and Organizational Behavior. Lou has served on the Society of Human Resources Management (SHRM) Foundation Board as its President and also served as a Director on the Human Resources Certification Institute (HRCI) board and as a Director on the board of the American Banker's Association. He has been a member of the editorial board of the Human Resource Management Journal and an ad hoc reviewer for Personnel Psychology.

Matthew Jones, PhD
Contact: matt@nwemergent.com

Matthew is an interdisciplinary consultant with a zest for good leadership and effective organizations. He helps organizations solve problems and improve operations, and has served as a consultant on small and large projects including: leadership development programming/training, executive coaching, organizational assessments, and meeting facilitation.

Matthew uses a scientific approach but is also well recognized for his human relations skills. His approach integrates transformational leadership, emotional intelligence, and empathic thinking. Matthew works alongside clients, providing recommendations and co-creating solutions that are appropriate and useful for the organization and community.

He has authored numerous publications in leadership, organizational development, and statistics. Matthew earned a PhD from Portland State University, where he trained as a quantitative organizational specialist. He has held academic appointments at State University of New York, Brockport College and Portland State University.

Kurt O'Brien
Contact: kcobrien44@gmail.com

Kurt holds a faculty position as a senior lecturer with the University of Washington's Department of Health Services Master in Healthcare Administration program, and is also an independent consultant. He has over twenty years of experience in the field of organization development and eighteen years of direct leadership experience; his passion is for helping leaders more fully develop their leadership craft.

Kurt specializes in the areas of leadership development and coaching, interpersonal skills development, team development, strategic planning, and conflict resolution. Additionally, he designs and conducts workshops on topics such as adaptive leadership, leading change, emotional intelligence, dialogue, and conflict resolution.

Kurt was with University of Washington (UW) Medicine for fifteen years, including seven as the director of Organization Development and Training, where he worked with leaders and teams from the executive level to those providing care directly at the bedside. Prior to joining the UW he spent twelve years as an active duty officer in the U.S. Coast Guard.

Kurt received his Master's in Human Resources and Organization Development (MHROD) from the University of San Francisco in 1997. He recently co-authored a book for healthcare leaders titled, Leading Adaptive Teams in Healthcare Organizations, and has written or contributed to various articles. Kurt is often invited to speak at conferences on a range of leadership topics.

Kurt lives in Poulsbo, WA on the Kitsap Peninsula with his wife and golden retriever, where they enjoy hiking, kayaking, and traveling.
Lisa Orlick-Salka
Contact: lisa@lisaorlick.net

Lisa Orlick is an executive coach and a writer, who brings more than twenty-five years' experience working with leaders, assisting them to confront complex challenges, while building resilience. Her signature approach employs the best practices of creative learning by incorporating emotional intelligence and design thinking. She has coached leaders in the financial services, software, healthcare, energy, arts, as well as the non-profit sector.

Lisa is a graduate of University of Pennsylvania where she earned a Masters in City Planning and Bachelor of Arts in Urban Studies. She received coaching certification from the Hudson Institute of Santa Barbara, and is credentialed by the International Coaching Federation.

Lisa began her career as an urban planner working overseas researching alternative energy management strategies, then moved into strategic planning for small businesses and non-profits, before pursuing executive coaching. Her interdisciplinary problem solving approach is informed by expertise in varying contexts including, public-private partnerships, small and large businesses, international NGOs, and the arts. In addition to coaching, Lisa serves on an international advisory board for a social justice organization and is a trustee for a Seattle-based non-profit.

Sarah Osteen, MBA
Contact: sarah@sparkstrategyllc.com

Sarah Osteen is a leadership consultant focused on organization effectiveness consulting, leadership program design and delivery, and executive coaching. Clients span a range of sectors including: financial, energy, public sector, pharmaceutical, health care, technology, retail, and non-profit.

Sarah received her BA in English from Georgetown University and her MBA from the F.W. Olin Graduate School of Business at Babson College. In 2012 Sarah attended the Executive Coaching Intensive Program at Columbia University and has effectively leveraged her coaching skills as part of robust leadership development programs.

Sarah spent nine years as a Senior Solutions Manager in Corporate Learning at Harvard Business Publishing. In her role she worked closely with the Harvard Business Publishing sales team to design powerful leadership development solutions and to help drive the six million in annual revenue for the North East. Sarah continues to maintain a close partnership with Harvard Business Publishing in the role of Moderator and Senior Instructional Designer. Sarah partners with the University of Washington Foster School of Business Center for Leadership and Strategic Thinking to provide executive coaching and facilitation. You can listen to Sarah interview experts around the topics of influence and power on her podcast Swayed available on iTunes.

Chuck Pratt
Contact: ceepratt@uw.edu

Chuck Pratt is an independent consultant, trainer, personal coach and a former member of the U. S. Coast Guard where he was a successful organizational leader for 23 years. Coast Guard career highlights include command of two ships; Chief of Professional Development at the Coast Guard Academy where he directed leadership training for cadets; and adjunct instructor for both the Coast Guard's Leadership Development Center and the Academy's Leadership and Management Department.

Chuck is a 1979 graduate of the Coast Guard Academy, he has a B.S. in Management and an M.S. in Instructional Technology from Utah State University.

Chuck works on teambuilding, leadership development, coaching, interpersonal skills training, conflict management, emotional intelligence, appreciative inquiry, group facilitation and dialogue. He has consulted with organizations for more than 25 years, and taught interpersonal skills and leadership training to nearly 20,000 learners. He has worked with such diverse groups as adult learners, business, government and non-profits, intact work teams, college students, public school teachers, parents, and at-risk high school students.

Diane Vreyens
Contact: vreyens@uw.edu

Diane Vreyens is a coach, consultant and facilitator who specializes in accelerating the development of leaders and teams to perform highly in complex and globally diverse environments. She's known for her ability to create safe and supportive learning environments that foster creativity, curiosity, and growth. With extensive international experience, having lived and worked for 13+ years in Asia, Europe, and the Middle East, Diane brings deep cross-cultural competence and a keen ability to bridge multiple perspectives.

Diane has an MS in organization development from American University, a post-graduate certificate in leadership coaching from Georgetown University, and is certified as a professional leadership coach by the International Coach Federation. She also has an undergraduate degree and advanced formal training in intercultural communication.

Over a span of more than 25 years, Diane has both consulted to and held internal roles at a variety of organizations in the corporate, non-profit, government, and educational sectors. Some of the organizations she has worked with include Procter and Gamble, GE Capital, the HJ Heinz Company, Craft Brew Alliance, the League of Conservation Voters, University of Washington Center for Leadership and Strategic Thinking, and UW Medicine health system.

Janet Williams Hepler, MA
Contact: jwh@highlinecoaching.com

Janet Williams Hepler is a professional coach who works with leaders to explore their strengths and identify their path to become leaders who motivate teams and work across organizations to achieve exceptional results. Janet has coached individuals at all levels-from emerging leaders to the C-Suite.

Janet has earned master's degrees in French and in Industrial Organizational Psychology. She is a professional coach certified by the International Coaching Federation. Janet serves on the Board of the Puget Sound Chapter of the Association for Talent Development (ATD).

In addition to working with individuals, Janet also works has worked with teams in corporate and non-profit organizations to build stronger working relationships that result in greater clarity on the mission, and increased capacity to achieve objectives and adapt to change. Janet draws from over 20 years of experience in technology companies where she learned how to work and lead in innovative organizations. She led teams that learned to adapt to continuous change.

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Multifactor Leadership Questionnaire (MLQ) - Tests, Training - Mind Garden

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The MLQ measures a variety of leadership types, informing respondents how they view themselves and how they are viewed by their followers. It is a solid foundation for any leadership training.

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Management Controls and Their Varying Levels

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Management Controls and Their Varying Levels

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On this site, not only does it specifically go into the three different types of management controls, but it also compares and contrasts them and puts them in order of level: Highest (strategic) to lowest (tactical).

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What you'll learn to do: describe the different levels and types of control

In management, there are varying levels of control: strategic (highest level), operational (mid-level), and tactical (low level). Imagine the president of a company decides to build a new company headquarters. He enlists the help of the company's officers to decide on the location, style of architecture, size, etc. (strategic control). The project manager helps develop the project schedule and budget (operational control). The general contractor directs workers, orders materials and equipment for delivery, and establishes rules to ensure site safety (tactical control).

Control can be objective or normative. Objective control involves elements of the company that can be objectively measured, such as call volume, profitability, and inventory efficiency. Normative control means employees learn the values and beliefs of a company and know what's right from observing other employees.

Learning Outcomes

Differentiate between strategic, operational, and tactical controls.

Differentiate between top-down, objective, and normative control.

Strategic Control

Managers want to know if the company is headed in the right direction and if current company trends and changes are keeping them on that right path. To answer this question requires the implementation of strategic control. Strategic control involves monitoring a strategy as it is being implemented, evaluating deviations, and making necessary adjustments.

Strategic control may involve the reassessment of a strategy due to an immediate, unforeseen event. For example, if a company's main product is becoming obsolete, the company must immediately reassess its strategy.

Implementing a strategy often involves a series of activities that occur over a period. Managers can effectively monitor the progress of a strategy at various milestones, or intervals, during the period. During this time, managers may be provided information that helps them determine whether the overall strategy is unfolding as planned.

Strategic control also involves monitoring internal and external events. Multiple sources of information are needed to monitor events. These sources include conversations with customers, articles in trade magazines and journals, activity at trade conferences, and observations of your own or another company's operations. For example, Toyota gives tours of its plants and shares the "Toyota Way" even with competitors.

The errors associated with strategic control are usually major, such as failing to anticipate customers' reaction to a competitor's new product. BlackBerry had a strong position in the business cell phone market and did not quickly see that its business customers were switching to the iPhone. BlackBerry could not recover.

Operational Control

Operational control involves control over intermediate-term operations and processes but not business strategies. Operational control systems ensure that activities are consistent with established plans. Mid-level management uses operational controls for intermediate-term decisions, typically over one to two years. When performance does not meet standards, managers enforce corrective actions, which may include training, discipline, motivation, or termination.

Unlike strategic control, operational control focuses more on internal sources of information and affects smaller units or aspects of the organization, such as production levels or the choice of equipment. Errors in operational control might mean failing to complete projects on time. For example, if salespeople are not trained on time, sales revenue may fall.

Tactical Control

A tactic is a method that meets a specific objective of an overall plan. Tactical control emphasizes the current operations of an organization. Managers determine what the various parts of the organization must do for the organization to be successful in the near future (one year or less).

For example, a marketing strategy for a wholesale bakery might be an e-commerce solution for targeted customers, such as restaurants. Tactical control may involve regularly meeting with the marketing team to review results and would involve creating the steps needed to complete agreed-upon processes. Tactics for the bakery strategy may include the following:

building a list of local restaurants, hotels, and grocery stores

outlining how the bakery website can be used to receive orders

personally visiting local executive chefs for follow-up

monitoring the response to determine whether the sales target is met

Strategic control always comes first, followed by operations, and then tactics. For example, a strategy to be environmentally responsible could lead to an operations decision to seek Leadership in Energy and Environmental Design (LEED) certification. This is a program that awards points toward certification for initiatives in energy efficiency, such as installing timed thermostats, using occupant sensors to control lighting use, and using green cleaning products. The tactical decision is deciding which energy-efficient equipment to purchase. At each level, controls ask if the decisions serve the purpose: actual energy savings, the LEED certification, and acting responsibly for the environment.

Top-Down Controls

Top-down controls are also known as bureaucratic controls. Top-down control means the use of rules, regulations, and formal authority to guide performance. It includes things such as budgets, statistical reports, and performance appraisals to regulate behavior and results. Top-down control is the most common process, where senior executives make decisions and establish policies and procedures that implement the decisions. Lower-level managers may make recommendations for their departments, but they follow the lead of senior managers.

Advantages

With top-down control, employees can spend their time performing their job duties instead of discussing the direction of the company and offering input into the development of new policies. Senior executives save time by not explaining why some ideas are used and not others. Heavily regulated businesses may find this approach to be most beneficial.

Disadvantages

The top-down approach has its drawbacks. The lower levels of a company are in touch with customers and recognize new trends or new competition earlier than senior management. A heavy-handed top-down approach may discourage employees from sharing information or ideas up the chain of command.

Objective and Normative Control

Objective control is based on facts that can be measured and tested. Rather than create a rule that may be ambiguous, objective controls measure observable behavior or output. As an example of a behavioral control, let's say that a store wants employees to be friendly to customers. It could make that a rule as stated, but it may not be clear what that means and is not measurable. To make that goal into an objective control, it might specify, "Smile and greet anyone within 10 feet. Answer customer questions."

Output control is another form of objective control. Some companies, such as Yahoo, have relaxed rules about work hours and focus on output. Because programmers' output can be measured, this has worked well, whether an employee works the traditional 9 a.m. to 5 p.m. or starts at noon and works until 8 p.m.

Normative controls govern behavior through accepted patterns of action rather than written policies and procedures. Normative control uses values and beliefs called norms, which are established standards. For example, within a team, informal rules make team members aware of their responsibilities. The ways in which team members interact are developed over time. Team members come to an informal agreement as to how responsibilities will be divided, often based on the perceived strengths of each team member. These unwritten rules are normative controls and can powerfully influence behavior.

Normative control reflects the organization's culture, the shared values among the members of the organization. Every organization has norms of behavior that workers need to learn. One company may expect employees to take the initiative to solve problems. Another may require a manager's approval before employees discuss changes outside the department. Some topics may be off-base, while others are freely discussed. Companies will have a mix of controls-top-down, objective, and normative.

Check Your Understanding

Answer the question(s) below to see how well you understand the topics covered in the previous section. This short quiz does not count toward your grade in the class, and you can retake it an unlimited number of times.

Use this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.

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In management, there are varying levels of control: strategic (highest level), operational (mid-level), and tactical (low level). Imagine the president of a company decides to build a new company headquarters. He enlists the help of the company's officers to decide on the location, style of architecture, size, etc. (strategic control).

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This video is very informative about not just bureaucratic organizations but informative examples as well. It truly helped me to grasp what bureaucratic control was focused on.

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Quality control cannot be ignored if a company is thriving and prosperous. You can further satisfy your customers, save money, and even improve productivity through quality control. This site provides those and many more reasons w=on why companies should invest in substantial-quality management.

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Some of the importance or benefits of quality control are: 1. Encourages quality consciousness 2. Satisfaction of consumers 3. Reduction in production cost 4. Most effective utilisation of resources.
1. Encourages quality consciousness: 2. Satisfaction of consumers: 3. Reduction in production cost: 4. Most effective utilisation of resources: 5. Reduction in inspection costs:
The most important advantage derived by introducing quality control is that it develops and encourages quality consciousness among the workers in the factory which is greatly helpful in achieving desired level of quality in the product.
7. Higher morale of employees: 8. Improved employer-employee relations: 9. Improved techniques and methods of production: 10. Effective advertisement: 11. Facilitates price fixation:
Consumers are greatly benefited as they get better quality products on account of quality control. It gives them satisfaction.

By undertaking effective inspection and control over production processes and operations, production costs are considerably reduced. Quality control further checks the production of inferior products and wastages thereby bringing down the cost of production considerably.

Quality control ensures maximum utilisation of available resources thereby minimising wastage and inefficiency of every kind.

Quality control brings about economies in inspection and considerably reduces cost of inspection.

By producing better quality products and satisfying customer's needs, quality control raises the goodwill of the concern in the minds of people. A reputed concern can easily raise finances from the market.

An effective system of quality control is greatly helpful in increasing the morale of employees, and they feel that they are working in the concern producing better and higher quality products.

Quality control develops to better industrial atmosphere by increasing morale of employees which ensures cordial employer-employee relations leading to better understanding and closeness between them.

By supplying technical and engineering data for the product and manufacturing processes, improved methods and designs of production are ensured by quality control.

Organisations producing quality products have effective advertisement. They win the public confidence by supplying those better quality products.

By introducing quality control measures, uniform products of same quality are produced. This greatly facilitates the problem of price fixation. One price of standard products becomes prevalent in the market.

Quality control ensures production of quality products which is immensely helpful in attracting more customers for the product thereby increasing sales. It is greatly helpful in maintaining existing demand and creating new demand for the product. It has been rightly pointed out that quality control is a powerful instrument with the help of which markets both at home and abroad can be expanded.

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12 Importance or Benefits of Quality Control | Production Management

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ADVERTISEMENTS: Some of the importance or benefits of quality control are: 1. Encourages quality consciousness 2. Satisfaction of consumers 3. Reduction in production cost 4. Most effective utilisation of resources. 1. Encourages quality consciousness: ADVERTISEMENTS: The most important advantage derived by introducing quality control is that it develops and encourages quality consciousness among the workers [...]

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The official Gantt Chart website provides free build your own Gantt chart software, definitions, examples, and a very informative introductory video to Gantt charts. I look forward to using this website in my future business management ventures. It will be an incredible resource!!

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What is a gantt chart?: Definition & overview

A gantt chart is a horizontal bar chart used in project management to visually represent a project plan over time. Modern gantt charts typically show you the timeline and status-as well as who's responsible-for each task in the project.

Here's a quick look at the details a gantt chart enables you to capture at a glance:

How a project breaks down into tasks

When each task will begin and end

How long each task will take

Who's assigned to each task

How tasks relate to and depend on each other

When important meetings, approvals, or deadlines need to happen

How work is progressing in a project

The full project schedule from start to finish

In other words, a gantt chart is a super-simple way to communicate what it will take to deliver a project on time and budget. That means it's a whole lot easier to keep your project team and stakeholders on the same page from the get-go.

How to read a gantt chart

Gantt charts may seem complicated at first. But once you learn the basics, you'll be able to read and create a gantt chart easily and tell exactly where your projects are and what needs to happen to guide them to success.

Elements of a gantt chart

Task list: Runs vertically down the left of the gantt chart to describe project work and may be organized into groups and subgroups

Timeline: Runs horizontally across the top of the gantt chart and shows months, weeks, days, and years

Dateline: A vertical line that highlights the current date on the gantt chart

Bars: Horizontal markers on the right side of the gantt chart that represent tasks and show progress, duration, and start and end dates

Milestones: Yellow diamonds that call out major events, dates, decisions, and deliverables

Dependencies: Light gray lines that connect tasks that need to happen in a certain order

Progress: Shows how far along work is and may be indicated by percent complete and/or bar shading

Resource assigned: Indicates the person or team responsible for completing a task

Reading a gantt chart really comes down to understanding how the different elements come together to make a gantt chart work.

Let's review some basic terminology so you understand the key parts of a gantt chart and how they function in a project plan:

Here's a gantt chart with these components highlighted. This gantt chart highlights 8 features every gantt chart should include:

What is a gantt chart used for in project management?

In project management, gantt charts are used for planning and scheduling projects. A gantt chart is incredibly useful because it allows you to simplify complex projects into an easy-to-follow plan and track the status of tasks as work progresses.

Gantt charts also help you keep track of project deadlines, milestones, and hours worked so you can spot and address delays or overages before they wreak havoc on your project.

The history of gantt charts

1896: Karol Adamiecki creates the first project management chart: the Harmonogram, a precursor to the modern gantt chart.

1931: Adamiecki publishes the Harmonogram (but in Polish with limited exposure).

1910-1915: Henry Gantt publishes his own project management system, the gantt chart.

Today: Gantt charts are the preferred tool for managing projects of all sizes and types.

The first project management chart was invented by Karol Adamiecki in 1896. So why isn't it called an Adamiecki chart? Good question!

Here's a quick history of gantt charts:

Who uses project management gantt charts?

Gantt charts are useful in almost any industry. Here are just a few types of teams and companies that use gantt charts to plan, schedule, and execute their projects:

Want to see how gantt charts apply to different projects and industries? Check out these gantt chart examples.

Your project has a hard deadline.

Multiple people or teams are involved in the project and need to be coordinated.

A boss, client, or team member wants to see a visual timeline of the project from beginning to end.

Your project involves even just a little complexity, such as tasks that need to be done in a specific order.

Team members work on multiple projects at a time, and you need to manage their workloads.

You have a good idea of roughly how long each task should or can take.

See how to use a gantt chart effectively to manage your projects.
When should you use a gantt chart?

So how do you know when to use a gantt chart to manage your project? We think a gantt chart's handy for any project with a plan! But here are a few sure signs you're going to need a gantt chart to get the job done.

If ANY of these are true about your project, use a gantt chart:

How does a gantt chart compare to other alternatives?

Project managers use a variety of tools-from gantt charts and kanban boards to spreadsheets and task lists-to keep up with project details, deadlines, and to-dos.

Can we take on more work?

How will we get from point A to point B?

What needs to happen first?

Can we meet a requested deadline?

Who has the bandwidth to tackle these tasks?

Are we on track to finish on time?

How are we performing?

Here's what separates gantt charts from the rest of the pack when it comes to time-sensitive or complex projects.

The comparison is clear: Spreadsheets, kanban boards, and tasks lists fall short when it comes to important project management tasks, like building a timeline, outlining dependencies, and managing workloads.

Without these 3 gantt chart features, you'll have a tough time communicating the plan to your team, clients, and stakeholders and answering simple questions like:

The good news is, you can use a gantt chart without foregoing other alternatives. Your team may prefer kanban boards for managing daily tasks or using a spreadsheet to create a RACI chart, and that's okay.

With TeamGantt, you've got choices. View and manage projects as a gantt chart, task list, calendar, or kanban board, and upload important spreadsheets to the project documents. No matter how you look at things, everything ties back to your plan.

Let's take a closer look at how a gantt chart can help you manage projects better.

Gantt chart pros and cons

What's to love about gantt charts? And what should you be aware of before diving in? Here's a quick snapshot of the pros and cons so you can decide if a gantt chart is right for your projects.

What are the pros of using a gantt chart?

A gantt chart is like a front-row seat to the project action. All the tiny details you never noticed from the nosebleed section suddenly come to life in full color right before your very eyes. It's nearly impossible to miss a game-changing move!

Let's explore some of the biggest gantt chart pros in project management.

Visualize your entire project

A project plan is one thing. How it plays out is another. A gantt chart gives you a start-to-finish view of your entire project timeline so you can see how tasks are progressing in real time. That means you can provide up-to-the-minute status reports to managers and stakeholders in a flash.

See how tasks are connected

Let's face it: Things change. Lucky for you, modern gantt charts make it easy to shift tasks around without breaking your stride. With dependencies -a star feature of any gantt chart-you can keep tasks connected even when your timeline gives you the ol' switcheroo.

Keep everyone on the same page and on time

See a full list of gantt chart benefits.
Clear communication is a must-have in any project. Without it, you risk project delays and cost overruns. Web-based gantt charts, like TeamGantt, ensure no one's left in the dark. That's because all your project info and discussion threads live in one central hub that everyone can access, making team collaboration a breeze.

Know who's busy and who isn't

If you want to make smart business decisions, you've got to have a good grasp on your resources. With gantt charts, resource management is no longer a guessing game. You can see who's got bandwidth to take on new tasks at a glance.

Do gantt charts have limitations?

Some folks think gantt charts are too complicated to build, read, and update. While traditional desktop apps have their limitations, most of the cons people associate with gantt charts don't apply to the online gantt chart software you'll find today.

That's because modern gantt charts ushered in a whole new era of project management. Now gantt charts offer clean and simple design with drag and drop scheduling so you can build and adjust project plans in an instant. And because everything happens online, it's easy to share plans, collaborate on work, update tasks, and track progress in real time.

Let's look at how modern gantt charts compare to traditional desktop apps.

Modern gantt charts vs. desktop apps

Gantt charts come in many forms-from good old-fashioned paper to desktop apps and even web-based software.

Bringing gantt charts online transforms them from a static document that quickly becomes obsolete to a living, collaborative representation of a project's current state. Team members can update their progress in real time, and stakeholders can check in on project status without having to go through you. Plus, it's easy to stay in sync and push projects across the finish line more quickly.

Team collaboration

Multiple project views, including kanban boards, task lists, and calendar views

Reporting

Time tracking and hourly estimation

Workload management

Mobile access

Integrations

See how TeamGantt's modern gantt chart tool compares to 2 popular desktop apps:

Advanced features to look for in a modern gantt chart

A good modern gantt chart should be a part of a complete project management solution. Look for these advanced gantt chart software features to ensure your team and projects stay on track:

TeamGantt has all of this! Try it for free.

Continue learning about gantt charts

Now that you've got the gantt chart basics down, you're ready to roll up your sleeves and create a gantt chart of your own! Keep reading to learn what you need to get started and how to build a gantt chart that makes your next project a breeze.

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Gantt Charts: Definitions, Features, & Uses | TeamGantt

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A gantt chart is a horizontal bar chart used in project management to visually represent a project plan over time. Modern gantt charts typically show you the timeline and status-as well as who's responsible-for each task in the project.

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Forbes, a reliable business source, compared and contrasted Gantt versus PERT charts. It provides thoughtful business insight and can help management decide which chart method to use for managing projects. It not only gives pros and cons of both, but it provides many examples of when which works better over the other.

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PERT Chart Vs. Gantt Chart: Which System Is Best For Project Management?

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PERT charts and Gantt charts are frequently relied on by project managers who are seeking the best organizational options for assigning tasks to team members and keeping track of all the moving parts. Both systems can serve as useful visual tools for arranging project plans and achieving the best ou

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Balanced Scorecards; Everything You Ever Wanted to Know and Then Some!

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Balanced Scorecards; Everything You Ever Wanted to Know and Then Some!

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This site provides everything one could ever know about balanced scorecards. It is an excellent resource to go back to and reference, especially if one wants to go off of the four-pronged approach for their business organization's strategic goals.

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What is a balanced scorecard (BSC)?

The balanced scorecard is a management system aimed at translating an organization's strategic goals into a set of organizational performance objectives that, in turn, are measured, monitored and changed if necessary to ensure that an organization's strategic goals are met.

A key premise of the balanced scorecard approach is that the financial accounting metrics companies traditionally follow to monitor their strategic goals are insufficient to keep companies on track. Financial results shed light on what has happened in the past, not on where the business is or should be headed.

The balanced scorecard system aims to provide a more comprehensive view to stakeholders by complementing financial measures with additional metrics that gauge performance in areas such as customer satisfaction and product innovation.

The business performance management framework was laid out in a 1992 paper published in the Harvard Business Review by Robert S. Kaplan and David P. Norton, who are widely credited with having developed the balanced scorecard system.

Here is how Kaplan and Norton began their 1992 paper:

What you measure is what you get. Senior executives understand that their organization's measurement system strongly affects the behavior of managers and employees.

Executives also understand that traditional financial accounting measures, like return on investment and earnings per share, can give misleading signals for continuous improvement and innovation -- activities today's competitive environment demands.

The traditional financial performance measures worked well for industrial age companies, but they are out of step with the skills and competencies companies are trying to master today.

What are the four balanced scorecard perspectives?

The balanced scorecard approach examines performance from four perspectives.

Financial analysis, which includes measures such as operating income, profitability and return on investment.

Customer analysis, which looks at investment in customer service and retention.

Internal analysis, which looks at how internal business processes are linked to strategic goals.

The learning and growth perspective assesses employee satisfaction and retention, as well as information system.

Why use the balanced scorecard?

Kaplan and Norton cited two main advantages to the four-pronged balanced scorecard approach.

1. First, the scorecard brings together disparate elements of a company's competitive agenda in a single report.

2. Second, by having all important operational metrics together, managers are forced to consider whether one improvement has been achieved at the expense of another.

The four-pronged balanced scorecard approach for translating strategic goals into a set of performance objectives.

"Even the best objective can be achieved badly," the authors stated in their 1992 treatise. Faster time to market, for example, can be achieved by improving the management of new product introductions.

It can also be accomplished, however, by making products that are only incrementally different from the existing ones, thus diminishing the company's competitive advantage in the market long term.

What are examples of a balanced scorecard?

In their 1993 paper, Putting the Balanced Scorecard to Work, Kaplan and Norton offered examples of how several companies applied the balanced scorecard, including Rockwater, an underwater engineering firm listed as a wholly-owned subsidiary of Brown & Root/Halliburton; Advanced Micro Devices; and Apple.

The Apple case study is especially interesting in retrospect. According to the authors, Apple (then known as Apple Computer) developed a balanced scorecard to expand the focus of senior management beyond metrics such as gross margin, return on equity and market share.

A small steering committee, versed in the strategic thinking of executive management, chose to include all four scorecard categories and develop measurements within each category.

From the financial perspective of the scorecard, Apple emphasized shareholder value.

For the customer perspective, it emphasized market share and customer satisfaction.

For internal processes, it emphasized core competencies.

For the innovation and improvement category, it stressed employee attitudes.

Among the highlights of Apple's balanced scorecard planning are the following:

Apple wanted to shift its classification from a technology and product-focused company to a customer-centric company. Recognizing that it had a diverse customer base, Apple decided to go beyond the standard customer satisfaction metrics available at the time and develop its own independent surveys that tracked key market segments around the world.

Apple executives wanted employees to focus deeply on a few key competencies, including user-friendly interfaces, powerful software architectures and effective distribution systems.

Apple wanted to measure employee commitment and alignment with the strategic goals. The company deployed comprehensive employee surveys -- as well as more frequent, small surveys of employees selected randomly -- in order to measure how well employees understood the company's strategy and whether or not the results they were asked to deliver by managers were consistent with it.

Market share was important to senior management, not only for sales growth but also as a factor in attracting and retaining top software developers.

Apple also included shareholder value as a key performance indicator ( KPI), even though this measure is a result, not a driver of strategic performance, Kaplan and Norton wrote.

Apple intended its emphasis on shareholder value to offset the previous emphasis on such short-term metrics as gross margin and sales growth, with a focus on investments that could impact future performance.

Apple included shareholder value as a key performance indicator in the balanced score approach the company developed.

Elements of a balanced scorecard

In their 1993 paper, Kaplan and Norton offered guidance on how to build a balanced scorecard. The process they discussed applies to business units and describes what they refer to as "a typical project profile" for developing balanced scorecards.

In brief, here are the eight actionable steps they list.

1. Preparation. The organization identifies the business unit for which a top-level scorecard is appropriate. Broadly defined, this is a business unit that has its own customers, distribution channels, production facilities and financial goals.

2. The first round of interviews. A balanced scorecard facilitator interviews senior managers for about 90 minutes each to obtain input on strategic goals and performance measures.

3. First executive workshop. Top management convenes with the facilitator to start developing the scorecard by reaching a consensus on the mission and strategy and linking the measurements to them. This can include video interviews with shareholders and customers.

4. The second round of interviews. The facilitator reviews, consolidates and documents input from the executive workshop and interviews each senior executive to form a tentative balanced scorecard.

5. Second executive workshop. Senior management, their subordinates and a larger number of middle managers debate the vision, strategy and the tentative scorecard. Working in groups, they discuss the measures, start to develop an implementation plan and formulate "stretch objectives for each of the proposed measures."

6. Third executive workshop. Senior executives reach a consensus on the vision, objectives and measurements hashed out in the prior two workshops and develop stretch performance targets for each measure. Once this is complete, the team agrees on an implementation plan.

7. Implementation. A newly formed team implements a plan that aims to link performance measures to databases and IT systems, to communicate the balanced scorecard throughout the organization and to encourage the development of second-level metrics for decentralized units.

8. Periodic reviews. A quarterly or monthly "blue book" on the balanced scorecard measures is prepared and viewed by managers. The balanced scorecard metrics are revisited annually as a part of the strategic planning process.

History of the balanced scorecard

Kaplan and Norton stressed that the balanced scorecard is not a template to be applied to businesses in general or even industrywide. Businesses must devise customized scorecards to fit their different market situations, product strategies and competitive pressures.

Neither should the balanced scorecard approach be viewed strictly as a performance measurement system.

Rather, it is a strategic management system that will "clarify, simplify and then operationalize the vision at the top of the organization," Kaplan and Norton wrote. How a company's mission statement and vision are operationalized to create value is up to the employees.

"The measures are designed to pull people toward the overall vision," Kaplan and Nolan wrote. "Senior managers may know what the end result should be, but they cannot tell employees exactly how to achieve that result, if only because the conditions in which employees operate are constantly changing."

In the mid-1990s, the scorecard was modified to strengthen the link between performance measures and strategic objectives using a "strategy map."

In the late 1990s, the design approach was again tweaked to include the vision or destination statement -- a statement of what "strategic success" or the "strategic end state" would look like.

Criticism of the balanced scorecard method includes charges that Kaplan and Norton failed to cite earlier research on this method and complaints about technical flaws in its methods and designs.

Others have noted that the four perspectives do not reflect important aspects of nonprofit organizations and government agencies -- for example, social dimensions, human resource elements and political issues.

The balanced scorecard approach to management gained popularity worldwide following the 1996 release of Kaplan and Norton's text, The Balanced Scorecard: Translating Strategy into Action.

Kaplan subsequently published another book on the subject, called The Balanced Scorecard: You Can't Drive a Car Solely Relying on a Rear View Mirror.

A 2013 brief by Bain & Company, " Management Tools & Trends 2013," lists the balanced scorecard as the fifth most used strategic management tool globally.

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What is a balanced scorecard and how does the methodology work?

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The balanced scorecard is a management system aimed at translating an organization's strategic goals into a set of organizational performance objectives that, in turn, are measured, monitored and changed if necessary to ensure that an organization's strategic goals are met.

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Scarcity has seemed to be somewhat relevant in this Covid and war-torn society. Many businesses have suffered significant losses. How can a business turn scarcity of products into a profitable boost in sales? Here are examples and advice on the dos and don'ts and tactics a business organization can use!

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It's a cultural trope to "want what you can't have," but it's also a principle based in decades of psychological research. That principle, scarcity, is incredibly powerful in marketing, persuasion, and conversion optimization -when done right especially in a free market with limited resources.

The problem is, if you don't do it right, it's pretty meaningless. (Or, worse, you trigger psychological backfiring and hurt sales.)

What is scarcity?
Scarcity is the phenomenon where, when a product or service is limited in availability (or perceived as being limited), it becomes more attractive.
This makes sense in a traditional economic way, where less supply and more demand drives up prices. It also makes sense on an intuitive level. When mom said you couldn't have a toy, didn't you want it more?

Primarily discussed in terms of natural resources, Economics Help says it best:

"Resource scarcity is defined as a situation where demand for a natural resource is exceeding the supply - leading to a decline in available resources. When we talk about scarce resources, we usually imply that current use is unsustainable in the long-term.

Scarcity can involve non-renewable resources, such as oil, precious metals and helium. It can also involve potentially renewable resources, which are being consumed faster than their ability to replenish (e.g. over-fishing, excess use of fresh water.)"

So it's a psychological trigger, and it's easy to understand from an intuitive level. What are the actual mechanisms behind this tactic, though? How can you use it help your customers make decisions?

Why scarcity works (FOMO, playing hard to get, and more)

One of the most well-known scarcity studies was conducted by Stephen Worchel in 1975. He and his colleagues offered subjects cookies in a jar. One jar had 10 cookies, and the other jar had two.

Subjects preferred the cookies from the jar with two in it, even though the cookies in both jars were identical.

Since then, much research has supported the efficacy of scarcity in the marketing world as well.

For example, a research paper notes;

When something is rare, it's alluring-true whether you're talking about precious gemstones or a pristine edition of the first issue of Action Comics (which introduced Superman). And psychologists have long known that if you can make a consumer good more desirable by making it appear rare.

Why is this? Much of it comes from the fear of missing out (FOMO).

FOMO is defined as a "pervasive apprehension that others might be having rewarding experiences from which one is absent. It is characterized by the 'desire to stay continually connected with what others are doing.'"

As you'll see from the examples below, scarcity is heavily predicated on the idea that others desire the product/service, and that in order to get in on the goods, you've gotta act now.

It's not always a simple function of FOMO, however. We seem to fear asymmetrical control as well-it's why you want what you can't have.

For example, there was a study in which women were shown a photograph of their potential dream man. Half the women were told the guy was single, and the other half were told he was in a relationship.

The results: 59% said they would be interested in pursuing the single guy, but that number jumped to 90% when they thought he was taken.

If something is rare or unattainable, we want it more.

Even Aristotle noted the pleasure of rarity, remarking

that is why what comes to us only at long intervals is pleasant, whether it be a person or a thing; for it is a change from what we had before, and, besides, what comes only at long intervals has the value of rarity.

Changingminds.org puts it well:

If something is not scarce, then it is not desired or valued that much. Praises from a teacher who seldom praises are valued more than praises from a teacher who is liberal with his or her praise.

Scarcity is non-linear process. As something becomes more scarce or less scarce, the desire for it does not change in a proportionate way.

If everything is scarce, then scarcity itself lacks its value and people become too used to it. Studies of retail sales have shown that if more than about 30% of goods have "sale" sticker on them, the effectiveness of this method decreases.

Human behavior is such that we are likelier to purchase something if we're informed that it's the very last one or that a special deal will soon expire. Point is, if people really believe that they'll be missing out on something, they'll be prompted to act more quickly to get it.

When scarcity works (and when it doesn't)

Scarcity doesn't always work, though. It's not a silver bullet.

For instance, researchers showed in four studies that scarcity has a stronger positive effect on product evaluation when:

Salience of persuasion knowledge is low;

Frequency of exposure to scarcity claims is low;

Decision reversibility is high;

Cognitive load is high.

Basically, if people have a higher knowledge of persuasion tactics or more exposure to scarcity claims, they're less likely to value a scarce product more.

This study found that "when consumers interpreted scarcity claims as a sales tactic, the positive effect of scarcity claims on product evaluation would be diluted."

To sum up, if the scarcity is BS-and your customers are smart-it's gonna hurt more than help.

18 scarcity examples that work

There are generally two types of scarcity you can use to increase sales:

1. Quantity-related scarcity (e.g., "Two seats left at this price!");

2. Time-related scarcity (e.g., "Last day to buy!").

We scoured the Internet and found 18 good examples of scarcity. Surely you can find inspiration for your own execution. For fun (and as a cautionary tale) we also found some cringe-worthy examples of scarcity.

1. Booking.com

Booking.com does many things well, one of them being scarcity. Take a look at a search result for hotels in Dublin:

Now, there are a few scarcity triggers at play here:

"Booked 2 times for your dates in the last 24 hours on our site," which tells you this hotel is desirable.

"Only 6 rooms left on our site," which suggests that time is running out to book.

"See our last available rooms," adds scarcity to the call to action.

There's a real limit to hotel rooms as there's a certain quantity available. Thumbs up to booking.com for displaying this information accurately, clearly, and persuasively.

2. Amazon.com

You have, of course, shopped on Amazon. And I'm sure you've noticed the warning of "only X left in stock":

This, in combination with the urgency play for shipping ("Want it tomorrow?"), is an effective way of getting me to take action and avoid the loss of that rare book I had my eye on.

3. Chubbies Shorts

I'm a Chubbies fanboy. Their marketing is beautiful. From their copy to their branding to their social presence, they kill it. And they make wonderful use of "limited time" product scarcity.

Here's an example of a promotion they run each year called Fourth of Julyber:

Basically, they release a "free gift" every hour with a purchase. This free gift is for a limited time-available only on that day, at that specific hour. So, if you want an American Flag speedo, act quickly.

4. Chubbies Pt. 2

Chubbies also does an excellent time-based scarcity play here:

When I think Chubbies, I often think 4th of July. And they release a special item for pre-sale with the guarantee that it will arrive right before the 4th.

By taking action now, you won't miss out on the attention you'll get from wearing these magnificent 5" inseam shorts.

5. Think Geek

Another example of topical scarcity is something I found on Think Geek (which, sadly, migrated its operations back to parent company GameStop in 2019).

It's hard to read, but the banner says, "There's still time for Mother's Day delivery w/ expedited shipping" (for all you last-minute shoppers).

6. Ralph Lauren

Ralph Lauren offers pre-order options for Olympic clothing. Get it prior to the Closing Ceremonies!

7. Badgers Sweet Sixteen

I'm a big fan of the Badgers. Sports in general. And, in sports, there are so many events that are unique-Super Bowl wins, epic comebacks, etc. So with every opportunity for a "limited-time offer," you see some great scarcity at play.

My favorite example? Obviously, it's "sad Billy Murray" from when Wisconsin beat Xavier to make it to the Sweet Sixteen:

Just excellent.

8. Bumble

Bumble is a dating app that has always baked in a level of scarcity. They originally had a countdown timer of one day. (Women had that amount of time to start a conversation with their match, or the match disappeared.)

They've added another element of scarcity to even the playing field. Now guys have 24 hours to respond, too. Game on.

9. Amazon Prime Now

My co-worker Ben and I were checking out Amazon Prime Now to see what cool stuff we could ship to our office (wine, perhaps), when we found another great example of scarcity:

See it? The weekly ad is "up to 50% off until 4/30." Excellent time-based scarcity example.

10. Bobonos

Bonobos employs scarcity when it tells you which sizes and styles are out of stock right up front. (Honestly, I feel like this should be mandatory for every ecommerce site.)

It's an effective way to show you that the product is in high demand and low supply:

11. Modcloth

Modcloth is another site that is optimized in terms of persuasive triggers. On their product category pages, they list items that are low in stock. Check out the first two items and the red text underneath:

12. Modcloth Pt. 2

They also alert you when a certain item is back in stock. Because, presumably, it flew off the shelf previously because it was so popular...

13. Modcloth Pt. 3

And, of course, they show you when a product is fully out-of-stock, too. Wouldn't want that to happen to a product you were looking at, so better buy now:

14. Marketizator

Marketizator (now Omniconvert) did a great job on their landing pages of communicating time limits. This example with a countdown timer, from a webinar we did with them, had a clear deadline (as it was a live event):

15. CXL Live

When we sell conference tickets, we let people know how many tickets are left in each newsletter. Sure enough, ticket sales tend to accelerate as the numbers drop (though maybe that's just because the event is closer):\

16. Frank & Oak

Frank & Oak creates the perception of rare items by highlighting unique products for just one week in their "This Week's Highlights":

17. Jack Threads

Jack Threads employs a similar tactic as ModCloth. This is in their "New Arrivals" section, which lets you know that the second pair of Ray-Bans is "back in stock":

This presumes that it had been sold out due to massive popularity. If you want the pair, you should jump on it before it happens again!

18. Jack Threads Pt. 2

Jack Threads also greeted me with this smooth pop-up:

If I sign up now, I get a 20% discount. Still, I'm fairly sure I could find a 20% off code somewhere else, so I actually don't think this is a super strong scarcity ploy.

Scarcity principle gone wrong: what not to do

Scarcity works well-unless it's fake.

Peep posted this example a while back on the blog. A dude was claiming that his digital product had a limited number of monthly spots...but yearly memberships were available.

Yep, and, of course, he was planning on shutting it down in a few days...

As Peep noted:

Peep Laja:
"We've all read Cialdini's Influence, right (if you haven't yet, do it now)? We've all been victims of the scarcity principle ('only 4 seats left at this price!'), and many of us have used it successfully in our campaigns.

It really does work well-unless the reason for scarcity is blatantly made up! Monthly access to a digital product is "sold out," but yearly access is still available? Come on!

What does this do to your credibility? People stop believing you. And that's kind of important."

Also, your product needs to have value. Everything else needs to be in place. Scarcity should not be the only method of persuasion applied. You also need to take care of clarity, distraction, and anxiety.

As Jeremy Smith put it:

Jeremy Smith:
"First, what you're selling must have value or importance to a prospective buyer.

In part, value is imparted by the intrinsic characteristics of the product or service you offer. This should be clearly laid out in your product or service's 'unique selling proposition,' or USP, which is a statement or sales points used in some fashion in all your marketing material.

But your product's extrinsic value matters, too. Extrinsic value is imposed on a product or service, which basically is what marketing is all about."

Conclusion

Scarcity is a powerful principle, but like everything, it's power depends on execution. Don't employ fake scarcity. If you have a product in high demand and low supply, display it. It's really more about clearly communicating the realities of scarcities than trying to manufacture it.

I hope you got some inspiration with this post. Let me know if you have some good examples of scarcity in the comments.

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18 Scarcity Examples that Can Boost Sales

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It's a cultural trope to "want what you can't have," but it's also a principle based in decades of psychological research. That principle, scarcity, is incredibly powerful in marketing, persuasion, and conversion optimization -when done right especially in a free market with limited resources. The problem is, if you don't do it right, it's pretty meaningless.