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Just found this article while doing other homework in the module and thought it was a good fit.

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Good managers are difficult to find in the corporate woodwork. Finding someone who possesses all of the qualities of a good manager is even more difficult. You've seen them -- the supervisors who have an infectious love for the organization and the ability to make decisions with empathy and knowledge. It often seems as though organizations have trouble finding these managers because there are few and far between, but we don't have that problem at my marketing agency, Red Branch Media.

It's not because we have a huge hiring budget or because we invest in pricey training programs (neither of which are bad things). It's because we know which qualities will make great managers and which qualities can spell disaster in a leadership position. Here are the ones we look for in our key players.
They Love the Company Culture
Good managers are great leaders and high achievers, but the managers? They like unique qualities about the company that might turn others off. They become invested in not only the company but the culture therein. Chris Edmonds , CEO of The Purposeful Culture Group, said: "Most managers invest far greater time and energy on their team or company's products and services than they do in their work culture -- yet culture drives everything that happens in their organization, good or bad."

Our best managers take this to heart. They are constantly talking about what they can do to make the company better and how it compares (favorably) to other jobs. Even when they don't love their duties, they love the culture.
They're Positively Contagious
A positive attitude can go a long way. Managers who have a good attitude during the workday don't complain about projects that need to get done. They look for solutions to finish them before the deadline. According to Gallup, 51 percent of managers have mentally checked out from their job and their company. We have one manager who is so excited about her job and inspiring greatness in her co-workers, we have to tell her to stop working. Her drive to be better affects everyone around her.
They Can Sustain Focus
The key to overall success? Prioritization and the ability to focus for an extended period of time. Specifically, they can manage multiple projects at once to make sure everything gets done on time and completed to client (or company) specifications. Bhavin Parikh , CEO and Founder of Magoosh Inc., said: "Lack of focus is the reason many small companies fail. The best managers solve that problem through ruthless prioritization. They identify the three most impactful projects from a list of ten and focus their team on those three. They help keep their employees' proverbial plates just the right amount of full."

We have a "Brancher" who has built his entire job around delegating tasks to the team and ensuring that everything is completed on time. He does this by meeting with his team when he needs to and then putting his head down to get the work done.
They Lead With Their Head and Heart
Empathy for employees is important -- everyone goes through professional and personal struggles that can affect their work. The best managers are emotionally intelligent; they have the ability to lead their employees and guide them with understanding. If top performers have , it stands to reason then that your managers should have it too. The high emotional intelligence best managers, however, understand that compassion doesn't equate to subpar performance, and they nip issues in the bud before they carry over to the quality of work output, even if that means carrying some of the burden themselves.
They're Honest
A managerial position is no place for a dishonest employee. Your best managers will tell their team the information they to hear, not what they to hear. Sometimes the truth hurts, but that's the only way your team can grow. At Red Branch Media, we have a very transparent culture, using weekly "micro" feedback and open communication channels to avoid dishonesty in everything from deliverables to deadlines, cliques and creative.
They Take Accountability
A well-rounded manager will take charge of their own goals and, on the same note, take responsibility when things don't go according to plan. They foster a culture of accountability so their employees understand the importance of responsibility for their actions as well. According to an analysis published in Harvard Business Review, 46 percent of managers rated poorly on holding their teams accountable. I help my managers avoid this by holding them accountable when they are frustrated with contributors on their team. If they feel passionate enough about an issue to come to me with it, they need to be able to have a productive conversation with their employees as well.
They're Effective at Making Decisions
If supervisors can't make decisions for their team, how can they expect to guide them towards the finish line for projects or goals? The truth is, they can't. That's why the best managers have the ability to make decisions with a wealth of information -- in a short amount of time -- to get the best results from their team.

The best managers are hard to come by, and with good reason: they have to be emotionally intelligent, honest and hold their team to the same performance and accountability standards that they hold themselves to.

There's not a single tool out there that will assess the ideal match of a manager to the team. Their resumes might illustrate the skills and the experience they have to lead a team, but that doesn't necessarily mean they will be a manager. Rather, there are innate personality traits to be aware of, and this is something only an excellent judge of character can ascertain before hiring (or promoting).

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The Seven Qualities That Make Great Managers So Effective

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Good managers are difficult to find in the corporate woodwork. Finding someone who possesses all of the qualities of a good manager is even more difficult. You've seen them -- the supervisors who have an infectious love for the organization and the ability to make decisions with empathy and knowledge.

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I chose this simply because it had alot of key words that were covered in the chapter.

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Really liked the pyramid image that was in our text book, so I found my own with details about job roles for each level.

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Another image that involved alot of key terms for this chapter.

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Organizational Ethics and          Corporate Governance

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Organizational Ethics and          Corporate Governance

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Article that goes over some topics and ways to better market your sustainable business to help get the word out to consumers.

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Opinions expressed by Entrepreneur contributors are their own.

If you want your business to be more sustainable, you need to market effectively. Whether bringing to market an eco-friendly product, forging innovation within your manufacturing process to reduce environmental impact, or providing services that allow your customer to reduce their own environmental footprint, your marketing should properly sell the benefit you bring both to the earth and your customer.

As with all marketing, one size does not fit all. However, there are a handful of considerations that will help you reach your customers and drive them to action. It's imperative you do so, as even the greatest idea in business is worthless if you are unable to communicate it and provide value to your customers.

Know your customers.

Not all products or services are created equal, and the audiences they appeal to will certainly vary in age, location, culture, tastes, values and more. That's why it is imperative to know your customers and what moves them.

When promoting sustainable products or services, first identify what aspects of your offering will most appeal to your customers. Figure out exactly why environmental responsibility matters to them.

Do they want to limit the negative impacts for our human health? Do they want to preserve vital plant and animal species? Protect the environment for future generations?

Only after you have determined why sustainability matters to your customers will you be able to craft an effective message to drive them to action. This message should be emphasized across all marketing channels.

Additionally, make sure you know which information channels your customers use. This will help you ensure that the message you have taken so much effort to craft is actually received.

Create a custom plan.

Marketing is all about standing apart from the crowd. Don't use a formula -- if you do, you essentially mimic your competitors, with a message that gets lost in the crowd and fails to showcase the value of your product or service.

Instead, maximize the effectiveness of your marketing effort by creating a custom plan for your campaign. Search for unique vehicles to promote your original message. Look for sustainability-focused events, co-promotional partnerships, content providers and social media opportunities that align with your offering, message and audience. In essence, devise a marketing strategy that speaks to your customers across the channels they prefer, with a message that will move them. In doing so, you increase the odds of making an impression on your customers and catalyzing them to buy what you are selling.

Tie in a real world issue

Sustainable offerings, by their very nature, address current concerns about the environment. Innovators often devise and employ them specifically to provide an answer to environmental pollution, disruption or destruction.

When marketing green in business, don't shy away from tying your offering directly to the environmental issue it addresses. Position it as a solution to the problem. Bolster your argument with current research by credible third-party sources, using that research to frame the argument you make and explain why your offering helps protect the environment and the customer.

Market value vs. price

Delivering sustainable products and processes may come at a higher price to you and your customers. As I explored in Why Environmental Responsibility is Good for Your Bottom Line, this may not always be the case and should be explored. Regardless of added cost or not, marketing the value brought by sustainability will likely make a greater impact on environmentally minded customers than marketing price.

Emphasize all environmental benefits in your marketing. And, if additional non-environmentally focused value is provided through your offering, that should also be heavily emphasized. Not every potential customer is going to be swayed by environmental benefits.

Sustainability in business is a huge positive for the environment and many will appreciate that. Take care to market your offering well, and you'll likely surpass your competition and make a real impression that moves your customers into action.

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Opinions expressed by Entrepreneur contributors are their own. If you want your business to be more sustainable, you need to market effectively. Whether bringing to market an eco-friendly product, forging innovation within your manufacturing process to reduce environmental impact, or providing services that allow your customer to reduce their own environmental footprint, your marketing should properly sell the benefit you bring both to the earth and your customer.

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Thought this comic was funny when I read it and it went well with the chapter topics.

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Website that runs articles about all kinds of current business ethical events. Just a great all around resource for this module.

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The Magazine of Corporate Responsibility

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One of the articles I read first when I was going over this modules discussion board topic.

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As the cultural demographic shift continues to transform the face of America, business leaders are taking a closer look at their Diversity & Inclusion (D&I) efforts and asking, "What really should our D&I efforts be solving for?"

The reality is that D&I is no longer just a numbers game, nor just another politically correct workplace initiative; it's about bridging the opportunity gaps that will continue to widen if we continue to ignore the message the marketplace is clearly telling us: that it's becoming less about the business defining the individual and much more about the individual defining the business. As such, American enterprise must adopt D&I as a strategy for growth if they are to compete in the 21st century. For those corporations that do, I believe there are at least six things that D&I can solve for in our efforts to bridge the growing opportunity gaps that span all industries.

* Authentic engagement - to alleviate the tension we are unknowingly creating with our clients, employees and strategic partners when we don't embrace D&I as a strategy for growth.

* Embracing diversity of thought - to propel creativity, innovation and initiative, and with this strengthen our intellectual capital so that we don't lose competitive advantage.

* Strategic implications - whether in the workforce, amongst our clients, or through our strategic partnerships, we have to evolve our insight and cross cultural intelligence to meet the unique needs of those who represent the changing workplace and marketplace.

* Creating distinction - stop mimicking what others in the marketplace are doing - often unsuccessfully - and start creating something that is authentic to you and your business, activate your own best practices, and encourage individuals to be more courageous by supporting their uniqueness and diverse backgrounds.

* Sustainable growth - investing in and creating your own intellectual capital and know-how so that you can begin to operationalize the shift.

* Change management - thinking of D&I like any other business priority, so that we can support it within the evolution of our business models.

I recently spoke with one executive who not only agrees with this assessment, but is already leading the way in each of these areas as his organization continues to make D&I a linchpin in their strategy for growth. As a Tax Partner at Deloitte Tax, Jorge Caballero takes responsibility for - and has unleashed his passionate pursuits on - developing a more inclusive workforce and advancing more diverse leaders into senior leadership roles where they can have more of an impact and greater influence. As the needs of the marketplace rapidly evolve, he has long recognized that diversity of thought is crucial for business growth and evolution, and he works to cultivate authentic relationships built on collaboration and trust. Where many organizations remain fixated on playing a numbers game, Caballero is focused on finding the right talent and maximizing their full potential as the means to grow and compete and remain relevant.

According to Caballero, Diversity & Inclusion as a business strategy is driven by the needs of their clients and also the well-being of their own professionals and their opportunities to find success. That means you must foster an environment of authenticity and openness - a place where people feel comfortable having a dialogue not just about their similarities, but about their differences and the uniqueness they bring to the table.

"Diversity plays a critical role in everything that we do, including the diversity of thought that we bring to serve our clients," says Caballero. "The continued shift in the population means that more and more minorities must take on leadership roles and emerge as leaders within the organization. Two-thirds (66%) of our new hires last year were women and minorities, and I can't help comparing that to 36 years ago when I was but one of one minorities in my starting class. That's a huge demographic shift and you have to be prepared to retain those individuals by developing them, providing the right mentorship and sponsorship, and helping them advance into leadership roles. In our case, that ultimately means promoting them into the partner and director ranks."

Caballero continues by citing all of the evidence that shows how much more effective well-integrated diverse teams are than non-diverse teams. The ones that perform best are the ones that are open with one another - where each individual feels valued enough to bring their authentic and unique selves to the dynamics of the team. Developing this type of inclusive culture is important for any organization, but particularly for those whose business depends on selling the expertise and capabilities of their professionals.

How is this different from the past? Again, Caballero points to his own history.

"When I was starting out in the 1980s, there was very little value placed on my uniqueness," explains Caballero. "The conventional wisdom was that you needed to assimilate, you needed to be like everyone else, i.e., the majority. Fast forward to today and from the top of the organization on down there is real recognition of the value in being authentic, in leveraging what makes us unique, not only as it relates to the work of our client service teams but in terms of actually interacting with our clients - and ultimately to the continued growth and success of our business."

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As the cultural demographic shift continues to transform the face of America, business leaders are taking a closer look at their Diversity & Inclusion (D&I) efforts and asking, 'What really should our D&I efforts be solving for?

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Simple article which helped me understand a bit more of the differences between the two business models.

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Trade refers to the exchange of goods and services for money, which can be undertaken within the geographical limits of the countries or beyond the boundaries. The trade which takes place within the geographical boundaries of the country is called domestic business, whereas trade which occurs between two countries internationally, is called international business.

Entities engaged in international business often face more difficulties than the entities which conduct domestic business. Although international business enjoys large customer base as they operate in multiple countries. Here is an article which compiles the important differences between domestic and international business.

Content: Domestic Business Vs International Business

Comparison Chart

Basis for Comparison

Domestic Business

International Business

Definition of Domestic Business

The business transaction that occurs within the geographical limits of the country is known as domestic business. It is a business entity whose commercial activities are performed within a nation. Alternately known as internal business or sometimes as home trade. The producer and customers of the firm both reside in the country. In a domestic trade, the buyer and seller belong to the same country and so the trade agreement is based on the practices, laws and customs that are followed in the country.

There are many privileges which a domestic business enjoys like low transaction cost, less period between production and sale of goods, low transportation cost, encourages small-scale enterprises, etc.

Definition of International Business

International Business is one whose manufacturing and trade occur beyond the borders of the home country. All the economic activities indulged in cross-border transactions comes under international or external business. It includes all the commercial activities like sales, investment, logistics, etc., in which two or more countries are involved.

The company conducting international business is known as a multinational or transnational company. These companies enjoy a large customer base from different countries, and it does not have to depend on a single country for resources. Further, the international business expands the trade and investment amongst countries.

However, there are several drawbacks which act as a barrier to entry in the international market like tariffs and quota, political, socio-cultural, economic and other factors that affect the international business.

Key Differences Between Domestic and International Business

The most important differences Between domestic and international business are classified as under:

1. Domestic Business is defined as the business whose economic transaction is conducted within the geographical limits of the country. International Business refers to a business which is not restricted to a single country, i.e. a business which is engaged in the economic transaction with several countries in the world.

2. The area of operation of the domestic business is limited, which is the home country. On the other hand, the area of operation of an international business is vast, i.e. it serves many countries at the same time.

3. The quality standards of products and services provided by a domestic business is relatively low. Conversely, the quality standards of international business are very high which are set according to global standards.

4. Domestic business deals in the currency of the country in which it operates. On the contrary, the international business deals in the multiple currencies.

5. Domestic Business requires comparatively less capital investment as compared to international business.

6. Domestic Business has few restrictions, as it is subject to rules, law taxation of a single country. As against this, international business is subject to rules, law taxation, tariff and quotas of many countries and therefore, it has to face many restrictions which are barriers in the international business.

7. The nature of customers of a domestic business is more or less same. Unlike, international business wherein the nature of customers of every country it serves is different.

8. Business Research can be conducted easily, in domestic business. As against this, in the case of international research, it is difficult to conduct business research as it is expensive and research reliability varies from country to country.

9. In domestic business, factors of production are mobile whereas, in international business, the mobility of factors of production are restricted.

Conclusion

Carrying out the activities of international business and its management is far more difficult than conducting a domestic business. Due to changes in political, economic, socio-cultural environment across the nations, most business entities find it difficult to expand their business globally. To become a successful player in the international market firms need to plan their business strategies as per the requirement of the foreign market.

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Difference Between Domestic and International Business (with Comparison Chart) - Key Differences

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Nine differences between domestic and international business are discussed in this article in detail. The trade which takes place within the geographical boundaries of the country is called domestic business, whereas trade which occurs among countries internationally, is international business.

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This idea was in my head of alot of the time reading over the multinational part of our text book and felt like it needed to be here since our book was mostly positive about it all.

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Helped separate and distinguish between all the business models better than the textbook did.

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Doing business transnationally can make a company more competitive.

Goodshoot/Goodshoot/Getty Images

A transnational business conducts operations in several countries with varying degrees of coordination and integration of strategy and operations, according to Newcastle Business School professor George Stonehouse and his colleagues. A transnational strategy combines global reach, coordination of operations and leveraging unique advantages of local markets to drive sales, market share and profit growth.

Basics

Transnational strategy involves operating in different world markets, designing responsive organizational structures and establishing value-added activities that exploit national similarities and differences. Stonehouse defines transnational strategic management as iterations of organizational learning and performance improvements. The foundation of a transnational strategy is a global vision, but with customized implementations for local markets and regions.

Country Environment

The country environment is an important aspect of transnational strategy. In a March 2007 interview with Harvard Business School Working Knowledge writer Sean Silverthorne, Harvard professor Richard H.K. Vietor suggests that countries with a sound fiscal and monetary environment, secure property rights and anti-corruption policies attract transnational companies. A small-business owner should select a country based on its current business environment and a reasonable estimate on what the business and political environment might be in three to five years. In an October 1999 interview with Harvard Business School Working Knowledge writer James Aisner, Harvard professor Michael E. Porter discussed the importance of clusters in country selection. Clusters are geographic concentrations of competing and cooperating suppliers and service providers. Emerging nations should encourage transnational companies to build linkages with the local economy and become consumers of local goods and services. The development of skills training and support infrastructure are also important characteristics of countries that are appealing for transnational companies.

Branding

Transnational businesses may use global brands or create specialized local brands. In an October 2007 Harvard Business School Working Knowledge article, Harvard professor John A. Quelch cites the cases of American and Japanese automakers to suggest that developing a marketing strategy around one set of brands is more efficient than having several different brands for different regions of the world. Global brands share certain characteristics, such as a focus on a single product category and consistent market positioning.

Contingency Planning

Transnational strategy also includes contingency planning. Natural disasters, such as the March 2011 earthquake in Japan, can cause severe disruptions in the supply chain. In a May 2011 interview with Harvard Business School Working Knowledge writer Dennis Fisher, Harvard professor Willy C. Shih suggests that manufacturers and suppliers often lack contingency plans and find themselves scrambling for alternatives when disaster strikes. Diversification of supply sources and having alternative distributors are some of the contingency planning options. However, management should consider whether customers would be willing to pay for the cost of establishing and maintaining these backup supply and distribution arrangements.

Considerations

Although people use the terms interchangeably, global, multinational, international and transnational businesses have subtle differences. International is a generic term that applies to all businesses with foreign operations. A multinational business operates in several foreign countries, but it delegates strategic decision-making responsibility to its overseas subsidiaries, which operate as autonomous businesses. A global business conducts activities in many countries but with an integrated worldwide strategy.

About the Author

Based in Ottawa, Canada, Chirantan Basu has been writing since 1995. His work has appeared in various publications and he has performed financial editing at a Wall Street firm. Basu holds a Bachelor of Engineering from Memorial University of Newfoundland, a Master of Business Administration from the University of Ottawa and holds the Canadian Investment Manager designation from the Canadian Securities Institute.

Photo Credits

Goodshoot/Goodshoot/Getty Images

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What Is a Transnational Business Strategy?

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A transnational business conducts operations in several countries with varying degrees of coordination and integration of strategy and operations, according to Newcastle Business School professor George Stonehouse and his colleagues. A transnational strategy combines global reach, coordination of operations and ...

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Ethics in Multinational/Global Business 

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Ethics in Multinational/Global Business 

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A really well written article going over some ideas and core values to keep you ethical in all you international business ventures.

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When we leave home and cross our nation's boundaries, moral clarity often blurs. Without a backdrop of shared attitudes, and without familiar laws and judicial procedures that define standards of ethical conduct, certainty is elusive. Should a company invest in a foreign country where civil and political rights are violated? Should a company go along with a host country's discriminatory employment practices? If companies in developed countries shift facilities to developing nations that lack strict environmental and health regulations, or if those companies choose to fill management and other top-level positions in a host nation with people from the home country, whose standards should prevail?

Even the best-informed, best-intentioned executives must rethink their assumptions about business practice in foreign settings. What works in a company's home country can fail in a country with different standards of ethical conduct. Such difficulties are unavoidable for businesspeople who live and work abroad.

But how can managers resolve the problems? What are the principles that can help them work through the maze of cultural differences and establish codes of conduct for globally ethical business practice? How can companies answer the toughest question in global business ethics: What happens when a host country's ethical standards seem lower than the home country's?

Competing Answers

One answer is as old as philosophical discourse. According to cultural relativism, no culture's ethics are better than any other's; therefore there are no international rights and wrongs. If the people of Indonesia tolerate the bribery of their public officials, so what? Their attitude is no better or worse than that of people in Denmark or Singapore who refuse to offer or accept bribes. Likewise, if Belgians fail to find insider trading morally repugnant, who cares? Not enforcing insider-trading laws is no more or less ethical than enforcing such laws.

The cultural relativist's creed-When in Rome, do as the Romans do-is tempting, especially when failing to do as the locals do means forfeiting business opportunities. The inadequacy of cultural relativism, however, becomes apparent when the practices in question are more damaging than petty bribery or insider trading.

In the late 1980s, some European tanneries and pharmaceutical companies were looking for cheap waste-dumping sites. They approached virtually every country on Africa's west coast from Morocco to the Congo. Nigeria agreed to take highly toxic polychlorinated biphenyls. Unprotected local workers, wearing thongs and shorts, unloaded barrels of PCBs and placed them near a residential area. Neither the residents nor the workers knew that the barrels contained toxic waste.

We may denounce governments that permit such abuses, but many countries are unable to police transnational corporations adequately even if they want to. And in many countries, the combination of ineffective enforcement and inadequate regulations leads to behavior by unscrupulous companies that is clearly wrong. A few years ago, for example, a group of investors became interested in restoring the SS United States, once a luxurious ocean liner. Before the actual restoration could begin, the ship had to be stripped of its asbestos lining. A bid from a U.S. company, based on U.S. standards for asbestos removal, priced the job at more than $100 million. A company in the Ukranian city of Sevastopol offered to do the work for less than $2 million. In October 1993, the ship was towed to Sevastopol.

A cultural relativist would have no problem with that outcome, but I do. A country has the right to establish its own health and safety regulations, but in the case described above, the standards and the terms of the contract could not possibly have protected workers in Sevastopol from known health risks. Even if the contract met Ukranian standards, ethical businesspeople must object. Cultural relativism is morally blind. There are fundamental values that cross cultures, and companies must uphold them. (For an economic argument against cultural relativism, see the insert "The Culture and Ethics of Software Piracy.")

Before jumping on the cultural relativism bandwagon, stop and consider the potential economic consequences of a when-in-Rome attitude toward business ethics. Take a look at the current statistics on software piracy: In the United States, pirated software is estimated to be 35% of the total software market, and industry losses are estimated at $2.3 billion per year. The piracy rate is 57% in Germany and 80% in Italy and Japan; the rates in most Asian countries are estimated to be nearly 100%.

There are similar laws against software piracy in those countries. What, then, accounts for the differences? Although a country's level of economic development plays a large part, culture, including ethical attitudes, may be a more crucial factor. The 1995 annual report of the Software Publishers Association connects software piracy directly to culture and attitude. It describes Italy and Hong Kong as having "'first world' per capita incomes, along with 'third world' rates of piracy." When asked whether one should use software without paying for it, most people, including people in Italy and Hong Kong, say no. But people in some countries regard the practice as less unethical than people in other countries do. Confucian culture, for example, stresses that individuals should share what they create with society. That may be, in part, what prompts the Chinese and other Asians to view the concept of intellectual property as a means for the West to monopolize its technological superiority.

What happens if ethical attitudes around the world permit large-scale software piracy? Software companies won't want to invest as much in developing new products, because they cannot expect any return on their investment in certain parts of the world. When ethics fail to support technological creativity, there are consequences that go beyond statistics-jobs are lost and livelihoods jeopardized.

Companies must do more than lobby foreign governments for tougher enforcement of piracy laws. They must cooperate with other companies and with local organizations to help citizens understand the consequences of piracy and to encourage the evolution of a different ethic toward the practice.

At the other end of the spectrum from cultural relativism is ethical imperialism, which directs people to do everywhere exactly as they do at home. Again, an understandably appealing approach but one that is clearly inadequate. Consider the large U.S. computer-products company that in 1993 introduced a course on sexual harassment in its Saudi Arabian facility. Under the banner of global consistency, instructors used the same approach to train Saudi Arabian managers that they had used with U.S. managers: the participants were asked to discuss a case in which a manager makes sexually explicit remarks to a new female employee over drinks in a bar. The instructors failed to consider how the exercise would work in a culture with strict conventions governing relationships between men and women. As a result, the training sessions were ludicrous. They baffled and offended the Saudi participants, and the message to avoid coercion and sexual discrimination was lost.

The theory behind ethical imperialism is absolutism, which is based on three problematic principles. Absolutists believe that there is a single list of truths, that they can be expressed only with one set of concepts, and that they call for exactly the same behavior around the world.

The first claim clashes with many people's belief that different cultural traditions must be respected. In some cultures, loyalty to a community-family, organization, or society-is the foundation of all ethical behavior. The Japanese, for example, define business ethics in terms of loyalty to their companies, their business networks, and their nation. Americans place a higher value on liberty than on loyalty; the U.S. tradition of rights emphasizes equality, fairness, and individual freedom. It is hard to conclude that truth lies on one side or the other, but an absolutist would have us select just one.

The second problem with absolutism is the presumption that people must express moral truth using only one set of concepts. For instance, some absolutists insist that the language of basic rights provide the framework for any discussion of ethics. That means, though, that entire cultural traditions must be ignored. The notion of a right evolved with the rise of democracy in post-Renaissance Europe and the United States, but the term is not found in either Confucian or Buddhist traditions. We all learn ethics in the context of our particular cultures, and the power in the principles is deeply tied to the way in which they are expressed. Internationally accepted lists of moral principles, such as the United Nations' Universal Declaration of Human Rights, draw on many cultural and religious traditions. As philosopher Michael Walzer has noted, "There is no Esperanto of global ethics."

The third problem with absolutism is the belief in a global standard of ethical behavior. Context must shape ethical practice. Very low wages, for example, may be considered unethical in rich, advanced countries, but developing nations may be acting ethically if they encourage investment and improve living standards by accepting low wages. Likewise, when people are malnourished or starving, a government may be wise to use more fertilizer in order to improve crop yields, even though that means settling for relatively high levels of thermal water pollution.

When cultures have different standards of ethical behavior-and different ways of handling unethical behavior-a company that takes an absolutist approach may find itself making a disastrous mistake. When a manager at a large U.S. specialty-products company in China caught an employee stealing, she followed the company's practice and turned the employee over to the provincial authorities, who executed him. Managers cannot operate in another culture without being aware of that culture's attitudes toward ethics.

If companies can neither adopt a host country's ethics nor extend the home country's standards, what is the answer? Even the traditional litmus test-What would people think of your actions if they were written up on the front page of the newspaper?-is an unreliable guide, for there is no international consensus on standards of business conduct.

Balancing the Extremes: Three Guiding Principles

Companies must help managers distinguish between practices that are merely different and those that are wrong. For relativists, nothing is sacred and nothing is wrong. For absolutists, many things that are different are wrong. Neither extreme illuminates the real world of business decision making. The answer lies somewhere in between.

When it comes to shaping ethical behavior, companies must be guided by three principles.

Respect for core human values, which determine the absolute moral threshold for all business activities.

Respect for local traditions.

The belief that context matters when deciding what is right and what is wrong.

Consider those principles in action. In Japan, people doing business together often exchange gifts-sometimes expensive ones-in keeping with long-standing Japanese tradition. When U.S. and European companies started doing a lot of business in Japan, many Western business-people thought that the practice of gift giving might be wrong rather than simply different. To them, accepting a gift felt like accepting a bribe. As Western companies have become more familiar with Japanese traditions, however, most have come to tolerate the practice and to set different limits on gift giving in Japan than they do elsewhere.

Respecting differences is a crucial ethical practice. Research shows that management ethics differ among cultures; respecting those differences means recognizing that some cultures have obvious weaknesses-as well as hidden strengths. Managers in Hong Kong, for example, have a higher tolerance for some forms of bribery than their Western counterparts, but they have a much lower tolerance for the failure to acknowledge a subordinate's work. In some parts of the Far East, stealing credit from a subordinate is nearly an unpardonable sin.

People often equate respect for local traditions with cultural relativism. That is incorrect. Some practices are clearly wrong. Union Carbide's tragic experience in Bhopal, India, provides one example. The company's executives seriously underestimated how much on-site management involvement was needed at the Bhopal plant to compensate for the country's poor infrastructure and regulatory capabilities. In the aftermath of the disastrous gas leak, the lesson is clear: companies using sophisticated technology in a developing country must evaluate that country's ability to oversee its safe use. Since the incident at Bhopal, Union Carbide has become a leader in advising companies on using hazardous technologies safely in developing countries.

Some activities are wrong no matter where they take place. But some practices that are unethical in one setting may be acceptable in another. For instance, the chemical EDB, a soil fungicide, is banned for use in the United States. In hot climates, however, it quickly becomes harmless through exposure to intense solar radiation and high soil temperatures. As long as the chemical is monitored, companies may be able to use EDB ethically in certain parts of the world.

Defining the Ethical Threshold: Core Values

Few ethical questions are easy for managers to answer. But there are some hard truths that must guide managers' actions, a set of what I call core human values, which define minimum ethical standards for all companies. ¹ The right to good health and the right to economic advancement and an improved standard of living are two core human values. Another is what Westerners call the Golden Rule, which is recognizable in every major religious and ethical tradition around the world. In Book 15 of his Analects, for instance, Confucius counsels people to maintain reciprocity, or not to do to others what they do not want done to themselves.

Although no single list would satisfy every scholar, I believe it is possible to articulate three core values that incorporate the work of scores of theologians and philosophers around the world. To be broadly relevant, these values must include elements found in both Western and non-Western cultural and religious traditions. Consider the examples of values in the insert "What Do These Values Have in Common?"

What Do These Values Have in Common?

At first glance, the values expressed in the two lists seem quite different. Nonetheless, in the spirit of what philosopher John Rawls calls overlapping consensus, one can see that the seemingly divergent values converge at key points. Despite important differences between Western and non-Western cultural and religious traditions, both express shared attitudes about what it means to be human. First, individuals must not treat others simply as tools; in other words, they must recognize a person's value as a human being. Next, individuals and communities must treat people in ways that respect people's basic rights. Finally, members of a community must work together to support and improve the institutions on which the community depends. I call those three values respect for human dignity, respect for basic rights, and good citizenship.

Those values must be the starting point for all companies as they formulate and evaluate standards of ethical conduct at home and abroad. But they are only a starting point. Companies need much more specific guidelines, and the first step to developing those is to translate the core human values into core values for business. What does it mean, for example, for a company to respect human dignity? How can a company be a good citizen?

I believe that companies can respect human dignity by creating and sustaining a corporate culture in which employees, customers, and suppliers are treated not as means to an end but as people whose intrinsic value must be acknowledged, and by producing safe products and services in a safe workplace. Companies can respect basic rights by acting in ways that support and protect the individual rights of employees, customers, and surrounding communities, and by avoiding relationships that violate human beings' rights to health, education, safety, and an adequate standard of living. And companies can be good citizens by supporting essential social institutions, such as the economic system and the education system, and by working with host governments and other organizations to protect the environment.

The core values establish a moral compass for business practice. They can help companies identify practices that are acceptable and those that are intolerable-even if the practices are compatible with a host country's norms and laws. Dumping pollutants near people's homes and accepting inadequate standards for handling hazardous materials are two examples of actions that violate core values.

Similarly, if employing children prevents them from receiving a basic education, the practice is intolerable. Lying about product specifications in the act of selling may not affect human lives directly, but it too is intolerable because it violates the trust that is needed to sustain a corporate culture in which customers are respected.

Sometimes it is not a company's actions but those of a supplier or customer that pose problems. Take the case of the Tan family, a large supplier for Levi Strauss. The Tans were allegedly forcing 1,200 Chinese and Filipino women to work 74 hours per week in guarded compounds on the Mariana Islands. In 1992, after repeated warnings to the Tans, Levi Strauss broke off business relations with them.

Creating an Ethical Corporate Culture

The core values for business that I have enumerated can help companies begin to exercise ethical judgment and think about how to operate ethically in foreign cultures, but they are not specific enough to guide managers through actual ethical dilemmas. Levi Strauss relied on a written code of conduct when figuring out how to deal with the Tan family. The company's Global Sourcing and Operating Guidelines, formerly called the Business Partner Terms of Engagement, state that Levi Strauss will "seek to identify and utilize business partners who aspire as individuals and in the conduct of all their businesses to a set of ethical standards not incompatible with our own." Whenever intolerable business situations arise, managers should be guided by precise statements that spell out the behavior and operating practices that the company demands.

Ninety percent of all Fortune 500 companies have codes of conduct, and 70% have statements of vision and values. In Europe and the Far East, the percentages are lower but are increasing rapidly. Does that mean that most companies have what they need? Hardly. Even though most large U.S. companies have both statements of values and codes of conduct, many might be better off if they didn't. Too many companies don't do anything with the documents; they simply paste them on the wall to impress employees, customers, suppliers, and the public. As a result, the senior managers who drafted the statements lose credibility by proclaiming values and not living up to them. Companies such as Johnson & Johnson, Levi Strauss, Motorola, Texas Instruments, and Lockheed Martin, however, do a great deal to make the words meaningful. Johnson & Johnson, for example, has become well known for its Credo Challenge sessions, in which managers discuss ethics in the context of their current business problems and are invited to criticize the company's credo and make suggestions for changes. The participants' ideas are passed on to the company's senior managers. Lockheed Martin has created an innovative site on the World Wide Web and on its local network that gives employees, customers, and suppliers access to the company's ethical code and the chance to voice complaints.

Codes of conduct must provide clear direction about ethical behavior when the temptation to behave unethically is strongest. The pronouncement in a code of conduct that bribery is unacceptable is useless unless accompanied by guidelines for gift giving, payments to get goods through customs, and "requests" from intermediaries who are hired to ask for bribes.

Motorola's values are stated very simply as "How we will always act: [with] constant respect for people [and] uncompromising integrity." The company's code of conduct, however, is explicit about actual business practice. With respect to bribery, for example, the code states that the "funds and assets of Motorola shall not be used, directly or indirectly, for illegal payments of any kind." It is unambiguous about what sort of payment is illegal: "the payment of a bribe to a public official or the kickback of funds to an employee of a customer..." The code goes on to prescribe specific procedures for handling commissions to intermediaries, issuing sales invoices, and disclosing confidential information in a sales transaction-all situations in which employees might have an opportunity to accept or offer bribes.

Codes of conduct must be explicit to be useful, but they must also leave room for a manager to use his or her judgment in situations requiring cultural sensitivity. Host-country employees shouldn't be forced to adopt all home-country values and renounce their own. Again, Motorola's code is exemplary. First, it gives clear direction: "Employees of Motorola will respect the laws, customs, and traditions of each country in which they operate, but will, at the same time, engage in no course of conduct which, even if legal, customary, and accepted in any such country, could be deemed to be in violation of the accepted business ethics of Motorola or the laws of the United States relating to business ethics." After laying down such absolutes, Motorola's code then makes clear when individual judgment will be necessary. For example, employees may sometimes accept certain kinds of small gifts "in rare circumstances, where the refusal to accept a gift" would injure Motorola's "legitimate business interests." Under certain circumstances, such gifts "may be accepted so long as the gift inures to the benefit of Motorola" and not "to the benefit of the Motorola employee."

Striking the appropriate balance between providing clear direction and leaving room for individual judgment makes crafting corporate values statements and ethics codes one of the hardest tasks that executives confront. The words are only a start. A company's leaders need to refer often to their organization's credo and code and must themselves be credible, committed, and consistent. If senior managers act as though ethics don't matter, the rest of the company's employees won't think they do, either.

Conflicts of Development and Conflicts of Tradition

Managers living and working abroad who are not prepared to grapple with moral ambiguity and tension should pack their bags and come home. The view that all business practices can be categorized as either ethical or unethical is too simple. As Einstein is reported to have said, "Things should be as simple as possible-but no simpler." Many business practices that are considered unethical in one setting may be ethical in another. Such activities are neither black nor white but exist in what Thomas Dunfee and I have called moral free space. ² In this gray zone, there are no tight prescriptions for a company's behavior. Managers must chart their own courses-as long as they do not violate core human values.

Consider the following example. Some successful Indian companies offer employees the opportunity for one of their children to gain a job with the company once the child has completed a certain level in school. The companies honor this commitment even when other applicants are more qualified than an employee's child. The perk is extremely valuable in a country where jobs are hard to find, and it reflects the Indian culture's belief that the West has gone too far in allowing economic opportunities to break up families. Not surprisingly, the perk is among the most cherished by employees, but in most Western countries, it would be branded unacceptable nepotism. In the United States, for example, the ethical principle of equal opportunity holds that jobs should go to the applicants with the best qualifications. If a U.S. company made such promises to its employees, it would violate regulations established by the Equal Employment Opportunity Commission. Given this difference in ethical attitudes, how should U.S. managers react to Indian nepotism? Should they condemn the Indian companies, refusing to accept them as partners or suppliers until they agree to clean up their act?

Despite the obvious tension between nepotism and principles of equal opportunity, I cannot condemn the practice for Indians. In a country, such as India, that emphasizes clan and family relationships and has catastrophic levels of unemployment, the practice must be viewed in moral free space. The decision to allow a special perk for employees and their children is not necessarily wrong-at least for members of that country.

How can managers discover the limits of moral free space? That is, how can they learn to distinguish a value in tension with their own from one that is intolerable? Helping managers develop good ethical judgment requires companies to be clear about their core values and codes of conduct. But even the most explicit set of guidelines cannot always provide answers. That is especially true in the thorniest ethical dilemmas, in which the host country's ethical standards not only are different but also seem lower than the home country's. Managers must recognize that when countries have different ethical standards, there are two types of conflict that commonly arise. Each type requires its own line of reasoning.

In the first type of conflict, which I call a conflict of relative development, ethical standards conflict because of the countries' different levels of economic development. As mentioned before, developing countries may accept wage rates that seem inhumane to more advanced countries in order to attract investment. As economic conditions in a developing country improve, the incidence of that sort of conflict usually decreases. The second type of conflict is a conflict of cultural tradition. For example, Saudi Arabia, unlike most other countries, does not allow women to serve as corporate managers. Instead, women may work in only a few professions, such as education and health care. The prohibition stems from strongly held religious and cultural beliefs; any increase in the country's level of economic development, which is already quite high, is not likely to change the rules.

To resolve a conflict of relative development, a manager must ask the following question: Would the practice be acceptable at home if my country were in a similar stage of economic development? Consider the difference between wage and safety standards in the United States and in Angola, where citizens accept lower standards on both counts. If a U.S. oil company is hiring Angolans to work on an offshore Angolan oil rig, can the company pay them lower wages than it pays U.S. workers in the Gulf of Mexico? Reasonable people have to answer yes if the alternative for Angola is the loss of both the foreign investment and the jobs.

Consider, too, differences in regulatory environments. In the 1980s, the government of India fought hard to be able to import CibaGeigy's Entero Vioform, a drug known to be enormously effective in fighting dysentery but one that had been banned in the United States because some users experienced side effects. Although dysentery was not a big problem in the United States, in India, poor public sanitation was contributing to epidemic levels of the disease. Was it unethical to make the drug available in India after it had been banned in the United States? On the contrary, rational people should consider it unethical not to do so. Apply our test: Would the United States, at an earlier stage of development, have used this drug despite its side effects? The answer is clearly yes.

But there are many instances when the answer to similar questions is no. Sometimes a host country's standards are inadequate at any level of economic development. If a country's pollution standards are so low that working on an oil rig would considerably increase a person's risk of developing cancer, foreign oil companies must refuse to do business there. Likewise, if the dangerous side effects of a drug treatment outweigh its benefits, managers should not accept health standards that ignore the risks.

When relative economic conditions do not drive tensions, there is a more objective test for resolving ethical problems. Managers should deem a practice permissible only if they can answer no to both of the following questions: Is it possible to conduct business successfully in the host country without undertaking the practice? and Is the practice a violation of a core human value? Japanese gift giving is a perfect example of a conflict of cultural tradition. Most experienced businesspeople, Japanese and non-Japanese alike, would agree that doing business in Japan would be virtually impossible without adopting the practice. Does gift giving violate a core human value? I cannot identify one that it violates. As a result, gift giving may be permissible for foreign companies in Japan even if it conflicts with ethical attitudes at home. In fact, that conclusion is widely accepted, even by companies such as Texas Instruments and IBM, which are outspoken against bribery.

Does it follow that all nonmonetary gifts are acceptable or that bribes are generally acceptable in countries where they are common? Not at all. (See the insert "The Problem with Bribery.") What makes the routine practice of gift giving acceptable in Japan are the limits in its scope and intention. When gift giving moves outside those limits, it soon collides with core human values. For example, when Carl Kotchian, president of Lockheed in the 1970s, carried suitcases full of cash to Japanese politicians, he went beyond the norms established by Japanese tradition. That incident galvanized opinion in the United States Congress and helped lead to passage of the Foreign Corrupt Practices Act. Likewise, Roh Tae Woo went beyond the norms established by Korean cultural tradition when he accepted $635.4 million in bribes as president of the Republic of Korea between 1988 and 1993.

Bribery is widespread and insidious. Managers in transnational companies routinely confront bribery even though most countries have laws against it. The fact is that officials in many developing countries wink at the practice, and the salaries of local bureaucrats are so low that many consider bribes a form of remuneration. The U.S. Foreign Corrupt Practices Act defines allowable limits on petty bribery in the form of routine payments required to move goods through customs. But demands for bribes often exceed those limits, and there is seldom a good solution.

Bribery disrupts distribution channels when goods languish on docks until local handlers are paid off, and it destroys incentives to compete on quality and cost when purchasing decisions are based on who pays what under the table. Refusing to acquiesce is often tantamount to giving business to unscrupulous companies.

I believe that even routine bribery is intolerable. Bribery undermines market efficiency and predictability, thus ultimately denying people their right to a minimal standard of living. Some degree of ethical commitment-some sense that everyone will play by the rules-is necessary for a sound economy. Without an ability to predict outcomes, who would be willing to invest?

There was a U.S. company whose shipping crates were regularly pilfered by handlers on the docks of Rio de Janeiro. The handlers would take about 10% of the contents of the crates, but the company was never sure which 10% it would be. In a partial solution, the company began sending two crates-the first with 90% of the merchandise, the second with 10%. The handlers learned to take the second crate and leave the first untouched. From the company's perspective, at least knowing which goods it would lose was an improvement.

Bribery does more than destroy predictability; it undermines essential social and economic systems. That truth is not lost on businesspeople in countries where the practice is woven into the social fabric. CEOs in India admit that their companies engage constantly in bribery, and they say that they have considerable disgust for the practice. They blame government policies in part, but Indian executives also know that their country's business practices perpetuate corrupt behavior. Anyone walking the streets of Calcutta, where it is clear that even a dramatic redistribution of wealth would still leave most of India's inhabitants in dire poverty, comes face-to-face with the devastating effects of corruption.

Guidelines for Ethical Leadership

Learning to spot intolerable practices and to exercise good judgment when ethical conflicts arise requires practice. Creating a company culture that rewards ethical behavior is essential. The following guidelines for developing a global ethical perspective among managers can help.

Treat corporate values and formal standards of conduct as absolutes.

Whatever ethical standards a company chooses, it cannot waver on its principles either at home or abroad. Consider what has become part of company lore at Motorola. Around 1950, a senior executive was negotiating with officials of a South American government on a $10 million sale that would have increased the company's annual net profits by nearly 25%. As the negotiations neared completion, however, the executive walked away from the deal because the officials were asking for $1 million for "fees." CEO Robert Galvin not only supported the executive's decision but also made it clear that Motorola would neither accept the sale on any terms nor do business with those government officials again. Retold over the decades, this story demonstrating Galvin's resolve has helped cement a culture of ethics for thousands of employees at Motorola.

Design and implement conditions of engagement for suppliers and customers.

Will your company do business with any customer or supplier? What if a customer or supplier uses child labor? What if it has strong links with organized crime? What if it pressures your company to break a host country's laws? Such issues are best not left for spur-of-the-moment decisions. Some companies have realized that. Sears, for instance, has developed a policy of not contracting production to companies that use prison labor or infringe on workers' rights to health and safety. And BankAmerica has specified as a condition for many of its loans to developing countries that environmental standards and human rights must be observed.

Allow foreign business units to help formulate ethical standards and interpret ethical issues.

The French pharmaceutical company Rhône-Poulenc Rorer has allowed foreign subsidiaries to augment lists of corporate ethical principles with their own suggestions. Texas Instruments has paid special attention to issues of international business ethics by creating the Global Business Practices Council, which is made up of managers from countries in which the company operates. With the overarching intent to create a "global ethics strategy, locally deployed," the council's mandate is to provide ethics education and create local processes that will help managers in the company's foreign business units resolve ethical conflicts.

In host countries, support efforts to decrease institutional corruption.

Individual managers will not be able to wipe out corruption in a host country, no matter how many bribes they turn down. When a host country's tax system, import and export procedures, and procurement practices favor unethical players, companies must take action.

Many companies have begun to participate in reforming host-country institutions. General Electric, for example, has taken a strong stand in India, using the media to make repeated condemnations of bribery in business and government. General Electric and others have found, however, that a single company usually cannot drive out entrenched corruption. Transparency International, an organization based in Germany, has been effective in helping coalitions of companies, government officials, and others work to reform bribery-ridden bureaucracies in Russia, Bangladesh, and elsewhere.

Exercise moral imagination.

Using moral imagination means resolving tensions responsibly and creatively. Coca-Cola, for instance, has consistently turned down requests for bribes from Egyptian officials but has managed to gain political support and public trust by sponsoring a project to plant fruit trees. And take the example of Levi Strauss, which discovered in the early 1990s that two of its suppliers in Bangladesh were employing children under the age of 14-a practice that violated the company's principles but was tolerated in Bangladesh. Forcing the suppliers to fire the children would not have ensured that the children received an education, and it would have caused serious hardship for the families depending on the children's wages. In a creative arrangement, the suppliers agreed to pay the children's regular wages while they attended school and to offer each child a job at age 14. Levi Strauss, in turn, agreed to pay the children's tuition and provide books and uniforms. That arrangement allowed Levi Strauss to uphold its principles and provide long-term benefits to its host country.

Many people think of values as soft; to some they are usually unspoken. A South Seas island society uses the word mokita, which means, "the truth that everybody knows but nobody speaks." However difficult they are to articulate, values affect how we all behave. In a global business environment, values in tension are the rule rather than the exception. Without a company's commitment, statements of values and codes of ethics end up as empty platitudes that provide managers with no foundation for behaving ethically. Employees need and deserve more, and responsible members of the global business community can set examples for others to follow. The dark consequences of incidents such as Union Carbide's disaster in Bhopal remind us how high the stakes can be.

A version of this article appeared in the September-October 1996 issue of Harvard Business Review.

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Values in Tension: Ethics Away from Home

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When we leave home and cross our nation's boundaries, moral clarity often blurs. Without a backdrop of shared attitudes, and without familiar laws and judicial procedures that define standards of ethical conduct, certainty is elusive. Should a company invest in a foreign country where civil and political rights are violated?

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Considering how important this topic was for Module 4 of course it had to be here.

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Simple article going over some advantages and disadvantages of MBO and some ways to improve a upon it.

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Management by objectives (MBO) can also be referred as Management by Results or Goal Management, and is based on the assumption that involvement leads to commitment and if an employee participates in goal setting as well as setting standards for measurement of performance towards that goal, then the employee will be motivated to perform better and in a manner that directly contributes to the achievement of organizational objectives.

Advantages of Management by Objectives

1 . Since Management by objectives (MBO) is a result-oriented process and focuses on setting and controlling goals, if encourages managers to do detailed planning.

2. Both the manager and the subordinates know what is expected of them and hence there is no role ambiguity or confusion.

3. The managers are required to establish measurable targets and standards of performance and priorities for these targets. In addition, the responsibilities and authority of the personnel is clearly established.

4. It makes individuals more aware of the company goals. Most often the subordinates are concerned with their own objectives and the environment surrounding them. But with MBO, the subordinates feel proud of being involved in the organizational goals. This improves their morale and commitment.

5. Management by objectives (MBO) often highlights the area in which the employees need further training, leading to career development.

6. The system of periodic evaluation lets the subordinates know how well they are doing. Since MBO puts strong emphasis on quantifiable objectives,the measurement and appraisal can be more objective, specific and equitable.

7. It improves communication between management and subordinates.

Disadvantages of Management by Objectives

1. MBO can only succeed if it has the complete support of the top management.

2. Management by Objectives (MBO) may be resented by subordinates. They may be under pressure to get along with the management when setting goals and objectives and these goals may be set unrealistically high. This may lower their morale and they may become suspicious about the philosophy behind MBO.

They may seriously believe that MBO is just another of the management's ploys to make the subordinates work harder and become more dedicated and involved. The emphasis in the MBO system is on quantifying the goals and objectives. It does not leave any ground for subjective goals. Some areas are difficult to quantify and even more difficult to evaluate.

3. There is considerable paperwork involved and it takes too much of the manager's time. Too many meetings and too many reports add to the manager's responsibility and burden. Some managers may resist the program because of this increased paperwork.

4. The emphasis is more on short-term goals. Since the goals are mostly quantitative in nature, it is difficult to do long-range planning because all the variables affecting the process of planning cannot be accurately forecast due to the constantly changing socio-economic and technological environment which affect the stability of goals.

5. Most managers may not be sufficiently skilled in interpersonal interaction such as coaching and counseling, which is extensively required.

6. The integration of MBO system with other systems such as forecasting and budgeting etc., is very poor. This makes the overall functioning of all systems mare difficult.

7. Group goal achievement is more difficult. When the goals of one deportment depend on the goals of another department, cohesion is more difficult to obtain. For example, the production department cannot produce a set quota if it is not sufficiently supplied with raw materials and personnel.

Suggestions for Improving the Effectiveness of MBO

1. It is important to secure top management support and commitment. Without this commitment, MBO con never really be a success. The top managers and their subordinates should all consider themselves as players of the some team. This means that the superiors must be willing to relinquish and shore the necessary authority with subordinates.

2. The objectives should be clearly formulated, should be realistic and achievable. For example, it is not realistic for the R&D department of on organization to set a goal of, say, 10 inventions per year. These goals should be set with the participation of the subordinates. They must be properly communicated, clearly understood and accepted by all. MBO works best when goals are accepted.

3. MBO should be on overall philosophy of management and the entire organization, rather than simply a divisional process or a performance appraisal technique. MBO is a major undertaking and should replace old systems rather than just being added to it. Felix M.Lopex has observed, when an organization is managed by objectives, it becomes performance oriented. It grows and it develops and it becomes socially useful.

4. The goals must be continuously reviewed and modified, as the changed conditions require. The review technique should be such that any deviations are caught early and corrected.

5. All personnel involved should be given formal training in understanding the basics as well as the contents of the programme. Such education should include as to how to set goals, the methods to achieve these goals, methods of reviews and evaluation of performance and provisions to include any feedback that may be given.

6. Management by Objectives (MBO) system is a major undertaking based upon sound organizational and psychological principles. Hence it should be totally accepted as a style of managing and should be totally synthesized with the organizational climate. All personnel involved must have a clear understanding of their role authority and their expectations. The system should be absorbed totally by all members of the organization.

Comments

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Advantages and Disadvantages of Management by Objectives (MBO) | Management Study HQ

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Advantages and Disadvantages of MBO: Management by objectives (MBO) can also be referred as Management by Results or Goal Management, and is based on the assumption that involvement leads to commitment and if an employee participates in goal setting as well as setting standards for measurement of performance towards that goal.

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The more I got to read into the chapter on decision making the more I think this comic made sense, one decision affects so many different people, areas, and factors that you can't make them lightly.

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Great Article about strategic planning and whats involved with simple steps and videos.

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The strategic planning process are the steps that you go through as an organization to determine the direction of your organization (Its Vision), what you're going to do and for whom (Your mission) and someway to measure it or to guide you in a strategy to get there (Your goals).

In this overview of the strategic planning process, we'll go through the steps that we use to create a strategic plan.

There are many different ways you can create a strategic plan, much like there are several different ways you can create a meal to eat.

This is the process that we at SME Strategy believe gives management teams sufficient information and direction to create their strategic plan.

Before we get into the strategic planning steps you need to understand why we do strategic planning in the first place.

Why do strategic planning?

There are a few reasons why you should do strategic planning:

To get your team on the same page

To not waste money doing things that you shouldn't be doing.

To identify and evaluate the best way to accomplish your goals

and much more...

A strategic plan is a valuable guide for the rest of your employees, your organization's leadership and your stakeholders to know where you're going and why you're going there.

The document that contains the strategic plan is not what is valuable, it's in information in it and the process used to create it that is then SHARED and COMMUNICATED with the rest of your team is where the value comes. A great strategy is most often re-evaluated on an ongoing basis, rather than being a static document just sitting in a binder.

Strategy is about choices; knowing what to do as much as knowing what not to do. Your strategic plan tells your people what they should be doing so they don't have to worry about doing the wrong things, or having them to go to a manager every time they have a decision to make.

A strategic plan that is well communicated gives you access to greater productivity, culture, empowerment, and overall effectiveness.

Now that you know why you should do strategic planning, lets take a high level overview of the strategic planning process.

The simplified strategic planning process in four steps.

1. Part one: How did we get to where we are now?

2. Part two: Where do we want to go? What is our vision of success?

1. Part three: What is going to get in our way? What do we need to be aware of?

2. Part four: What do we need to get there?

In our two day sample strategic planning agenda we go through the whole strategic planning process outlined above.

There are many different strategic planning tools and frameworks that you can incorporate in your planning process, and throughout the creation of your business strategy.

The headers outlined above are some of the key questions that you need to answer first.

The complete strategic planning process
Strategic planning step 1: Gather inputs

SWOT Analysis, Trends, successes and results from past strategic plans, Environmental scan, staff surveys.

Outside of your business there are many factors that affect how you can do business: Competitors being one, but also the: Political, Economic, Social, Technological, Legal and Environmental climates that your organization or business operates in.

Throughout the strategic planning process you'll also have to identify internal processes and situations that may affect where you go in the future (Your strengths and Weaknesses) . There are also external factors that might affect your business strategy and those are opportunities and threats.

These "inputs" are the ingredients to your successful strategic plan.

The right information will help you make the right decisions. So gather and assess carefully.

Once you know where you are at as an organization, and what's going on in the world outside of your organization, then you can start to figure out where you're going.

Strategic planning step 2: Vision

Where are you going? What does winning look like? Why should you go there?

There's one thing to have a vision statement, it's another to have a very clear vision of the future. Like a blueprint to a house. This is the foundation of your strategic plan.

As an organization (SME, for profit, non-profit, government, growing startup, etc.) what are you building, and what is that rallying point for your people?

Spending the time to get agreement and alignment on this future is key, because otherwise each individual will be following their own destination of success.

Another way to think of your vision is: "If success was a place, how would we know if we got there"

Strategic planning step 3: Mission

What is your purpose? Why do you exist? What do you do and who do you do it for?

This is an opportunity to focus your energy on a specific set of customers. (staff, stakeholders, customers, etc.) If you had to dedicate the majority of your resources to a group, who would it be? This is a tough question, because our tendency is to say: "everyone"

Your mission is the key driver in accomplishing your vision. It's your: HOW

Strategic planning step 4: Values

If you want to find the number one contributor to a successful organization, it's having values that are understood and agreed on.

Values create a set of behaviours that everyone on the organization can count on and expect.

It's like having everyone playing by the same rules that clearly identify how you can be successful. You want your people to feel successful and fulfilled in their jobs? Live, eat and breathe your values so they know how they can contribute to making the organization a success.

Strategic planning step 5: Competition, Risks and Road blocks

You didn't think it was going to be that easy did you? There will always be things that will get in your way of success.
If you take the time to identify what they are, what the impact of that thing happening will be and what you're going to do to mitigate it, you are less likely to be caught off guard and your plan is more likely to be successful.

You can look at incorporating a risk register or scenario planning as frameworks to help you manage these risks and uncertainties.

Strategic planning step 5: Strategic priorities, goals strategies and tactics.

This is where you can tie into the big picture thinking into action items as part of your strategic planning process.

Strategic priorities are a handful of areas that will make the most amount of progress towards accomplishing your vision.

Want to increase the focus of your strategic planning? Focus on the right strategic priorities.

Once you have your strategic priorities, find a way to measure its success. Think of it as moving it from its current state: X, to its future state: Y by a certain date. From X to Y by DATE

Then you make the individual action steps that are going to contribute to the accomplishment of that goal. Check out this article if you want some ideas on what strategic priorities to pick as part of your strategic plan.

Strategic planning step 6: Communication plan

This is where you'll make your plan as a team to communicate your strategic plan, and the things that you're going to get people bought in to your plan.

Remember how we mentioned that a shelf plan is not very useful, and that making sure you keep your strategic plan and strategic priorities at the top of mind is key; this is where you do that.

Audio, video, meetings, what ever you need to do: Let people know where the organization is going, and how they can contribute to making that plan a success.

Communication goes both ways. You'll have better buy in if you listen as well as speak. That's the difference between pushing (see: forcing) a plan on people versus pulling them towards you and getting them to want to contribute.

Action plan

This is the most straight forward part of the strategic planning process but is also where most organizations falter: Implementation.

Now that you know where you're going, and how you're going to measure it, do the things that are going to move the needle on the success of your strategic plan.

Once you know where you want to go, then you need to figure out the strategies and the tactics to get you there.

Big picture thinking is the easy part of the strategic planning process. What's a little harder is the implementation of the strategic plan in practice.

Most organizations fail at implementing their strategic plans (71% failure rate). (See slide deck above for why)

The strategic planning process might seem pretty simple at first, but the intricacies of people and the moving parts of most businesses make planning a crucial but also challenging art form.

Combining effective long range planning, with short term implementation is a skill of great managers and great leaders.

Our consultants at SME Strategy can help your team create your strategic plan, as well as help you implement it.

For more information on the strategic planning process or our strategic planning services contact us for a consultation.

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The strategic planning process are the steps that you go through as an organization to determine the direction of your organization (Its Vision), what you're going to do and for whom (Your mission) and someway to measure it or to guide you in a strategy to get there (Your goals).

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Website that goes over in great detail about Organizing as a whole.

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Organizing - A Management Function
Organizing is the function of management which follows planning. It is the process of establishing orderly uses for all resources within the management system of the organization. It is a function in which the synchronization and combination of human, physical, financial, and information resources takes place for the achievement of the results. Organizing function is essential because it facilitates administration as well as the functioning of the organization.

According to Louis A. Allen, "Organisation is the process of identifying and grouping of the works to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most efficiently".

According to Chester Barnard, "Organizing is a function by which the concern is able to define the role positions, the jobs related and the co-ordination between authority and responsibility".

Organizing is the next important function of management after the planning. In case of planning the management decides what is to be done in future. In case of organizing, it decides on ways and means through which it becomes easier to achieve what has been planned. Hence, organizing refers to the following process.

Identifying and grouping of the work to be performed.

Defining and determining responsibility and authority for each job position.

Establishing relationship among various job positions.

Determining detailed rules and regulations of working for individuals and groups in organization.

Organizing creates and maintains rational relationships between human, material, financial, and information resources by indicating which resources are to be used for the specified activities and also when, where, and how they are to be used. The organizing function leads to an organizational structure which defines precisely the authorities and the responsibilities. Organization structure is the pattern of relationships among various components or parts of the organization which prescribes the relations among various activities and positions. It defines the system of relations between elements, factors, and activities within the organization. The organizational structure is to be designed for some concrete conditions and objective needs of the organization. The following are the important factors which are to be taken into consideration in the process of designing of the organizational structure.

Environment - The environment is relevant for behaviour and the organization structure. The most important characteristics of environment that determine organization structure are complexity (determined by the number of elements affecting the organization, their variety and intensity of influence on the operations), stability (measured by the rate of changes in time, similarity of changes, and possibility of their foresight and comprehension), and uncertainty (related to availability of relevant information for rational decision-making).

Technology - It enables transformation of organizational inputs into outputs and it is an important determinant of the internal efficiency of the organization. Technology includes technical equipment for manufacturing, knowledge and ability for using the equipment, and working activity necessary for the transformation process. Considering the relationship between technical complexity of the organization and its structural characteristics, there are three groups of the organizations. The first group consists of the organizations which are having individual or small-lot production. In these organization the technology is universal, the technological process is subject to frequent changes, and they have a way of production which is characterized by a low level of centralization, a small number of hierarchy levels, informal proceedings, and verbal communication, which implies an organic organizational structure. The second group consists of the organizations with large-lot and mass production. In these organizations the activities are routine, the technological process is complex and not easy to change, there is a high level of standardization and specialization, and more hierarchy levels in the organization structure having a high level of formalization and routine distribution channels. The third group consists of the organizations with continually-process production. In these organizations the working process is continual in a certain production cycle, the operations and procedures are synchronized, the production is highly automated, technical complexity is at the highest level, centralization is low, communicating is verbal, and formalization is on a low level. All of these characteristics imply an organic structure of the organization.

Strategy - Starting from its internal potentials, chances and threats of environment, the organization designs its strategy for the realization of the objectives. This strategy requires a certain organization structure as the frame. The concept of organization structure as a consequence of the adopted strategy has evolved in the sense that the relationship between strategy and structure is that of reciprocity, which means that the organization structure also influences the strategy.

Size - Connection between the size of the organization (measured by the number of employees, power of installed capacities, total revenue, value of capital investment, and other factors) and its organizational structure is very easy to notice. Namely, when the organization grows up, its organization structure becomes more complex, and vice versa.

Forms of aggregating - The essence of aggregating in the process of organizational structuring is a result of the need to control, coordinate, and communicate, which implies linkages on vertical and horizontal bases. Vertical aggregating is suitable for large organizations, with a long hierarchical chain, as well as for organizations with stable and simple environment and routine technology. The aim of vertical aggregating is to enable top bottom coordination in organization through different levels of management structure, strong control, and two-way communication. However, an environment which is turbulent and also the complex technology need horizontal coordination of activities. Vertical aggregating with formal authority and horizontal aggregating, as its complement, is a way of achieving internal and external efficiency of an integral totality.

Importance of organizing
Organizing function follows the planning function. Plans prepared under the function of planning govern all aspects of organizing function. Since the organizing follows planning it is closely related to it. The organizing begins after the plans are prepared and is governed by the prepared plans. While the plans state where the organization is to go, organizing helps the organization how to get there. Organizing function shows the management how the organization is to be built or how the existing one is modified to ensure that the goals set in the plans are achieved.

Organizing is essential because it facilitates administration as well as operation of in the organization. By the proper grouping of the work and the employees, production increases, overload of work is checked, wastage is reduced, duplication of work is restricted and effective delegation becomes possible. Organizing also facilitates growth and diversification of activities through clear division of work. It helps in developing a proper organization structure and the extent and nature of decentralisation can be determined. In addition to the above, it becomes possible through organizing to provide for the optimum use of technical and human resources. Besides organizing also encourages creativity and enhances interaction among different levels of management which leads to unification of efforts of all.

Organizing facilitates development of the organizational structure which becomes a tool for the management to achieve plans. This organizational structure is to be responsive with the changes in the plan. The organization which has taken the time, energy, and money to develop quality plans needs management who understand the importance of organizing.
Process of organizing
Organizing, like planning, is a process which is to be carefully worked out and applied. This process involves determining what work is needed, assigning those tasks, and arranging them in a decision-making framework (organizational structure). If this process is not conducted well, the results may be confusion, frustration, loss of efficiency, and limited effectiveness. The process of organising consists of the following five steps. (Fig 1)

Identification of activities - Each organization exists for fulfilling a specific purpose. This purpose identifies the activities which are performed by the organization. For example, in a manufacturing organization, production of the goods and their selling are the major activities in addition to the routine activities. And these activities are in variance with the activities of a service organization or an organization involved in the trading activities. Hence the identification of the various activities of the organization is an important step in the organizing function.

Grouping of activities - Once the activities have been identified, then there is a necessity that they are grouped. The activities are grouped in various ways. The activities which are similar in nature can be grouped as one and a separate department can be created. For example, activities related to the purchasing, production, marketing, and accounting and finance can be grouped respectively under purchase, production, marketing, and finance departments etc. Further in each department the activities can be further subdivided into various specific jobs.

Assignment of responsibilities - Having completed the exercise of identifying, grouping and classifying of all activities into specific jobs, the individual employees comes into picture since the employees are to be assign with the responsibilities to take care of activities related to the specific jobs.

Granting authority - On the basis of specific responsibilities given to individual employees, they are to be provided with the necessary authority for the discharge of the assigned responsibilities in order to ensure their effective performance and in turn the performance of the organization.

Establishing relationship - This is a very important part of the organizing function since each employee in the organisation is to know as to whom to report and which are the employee who are to work with him. This establishes a structure of relationships in the organization which helps to ensure that the organization has clear relationships. This structure of relationships also facilitates the delegation.

Fig 1 Five steps of the organizing function
For carrying out the organizing function usually four approaches are followed for designing the organization structure of the organization.

The first approach is the functional approach. It is the most common approach. It groups activities under the major headings such as production, marketing, finance, and personnel etc. It is a logical approach. Lines are clearly drawn between departments. But, difficulties can arise because employees get separated department wise and hence from each other. Their understanding and concern for the specialty areas outside of their own is not easy to achieve. It can lead to communication difficulties and lack of cooperation between functional areas. Also, it does not develop generalists in the management area.

The second approach is the geographic approach which groups the activities and responsibilities according to the geographical location. Expanding organizations often locate plants and sales units or repair facilities in various parts of the country because of favourable labour and materials costs, tax incentives, easy access to transportation, or the need to be located near customers to serve them quickly and efficiently. Geographic patterns work best when different laws, currencies, languages, and traditions exist, and have a direct impact on the ways in which the organizational activities are to be conducted. The geographic structure furnishes a training ground to develop general management abilities. A limitation of this approach is the cost of employees and facilities. When the organization makes the decision to expand geographically it automatically incurs cost through duplication of employee's positions and additional building sites.

The third approach is the production line approach. This approach assembles the activities of creating, producing, and marketing each product into one department. This approach is normally considered if each product of the organization needs a unique marketing strategy, production process, distribution system, or capital resources. The major disadvantage is similar to the geographic approach which is the additional cost through duplication of the functions within each product line.

The fourth approach is the customer approach which groups activities and resources in response to the needs of specific customer groups. If customers have a different set of demands, needs, and preferences then the following of this approach is appropriate. If the decision is made to use this approach with only some of the organizational customers then there will be difficulty in coordinating the customer-based departments with departments organized in other patterns. Another possibility in this approach is the overspecialization. The facilities and employees may become so specialized to solve the needs of the customers that they cannot be used for any other purpose.

Organizing principles
Organizing function is effective only if the management follows some guiding principles in order to make important decisions and act upon them. For an efficient organizing function the following are the guiding principles.

Principle of specialization - According to the principle, the entire work of the organization is to be shared among the subordinates based on their qualifications, abilities and skills. Hence, effective organization can be achieved through specialization of sharing or dividing work.

Principle of functional definition - The principle states that all the work in the organization is to be fully and clearly described to the managers and subordinates. For instance, the initial work of production, marketing and finance, the authority of managers and the responsibilities of the workers and their relationships towards each other must be clearly described to all the employees working in the department. Hence, clarification in the authority and responsibility helps in the growth of the organization.

Principles of supervision or span of control - The principle states that the span of control shows the number of employees that a single manager can handle and control efficiently. Hence, the management is to decide the number of employees that a manager can handle and this decision can be chosen from either a wide or narrow span of employees. There are two types of span of control namely (i) wide span of control in which a manager can easily supervise and effectively handle a big group of subordinates independently, and (ii) narrow span of control in which a manager does not have to supervise and control a large group of employees as the work and authority is shared among many subordinates. Hence, the manager needs to supervise only a selected number of employees at one time.

Principle of scalar chain - It is that chain of command or authorization in which there is minimum wastage of resources, communication is unaffected, overlapping of work is prevented, and this facilitates effective organization. The flow of authorization from the top level to the bottom level enables the managers to understand their positions of authority and this helps in an effective organization.

Principle of unity of command - As per this principle, one subordinate is accountable to only one superior at one time. This helps in preventing lack of communication and feedback and also brings about quick response. Hence, the principle of unity of command leads to effectively combine both physical and financial resources which in turn aids in effective coordination and organization.

Benefits of organizing
The benefits of the organizing function are as follows.

The end result of the organizing process is an organization which is whole consisting of unified parts (a system) acting in harmony to execute tasks to achieve goals, both effectively and efficiently.

A properly implemented organizing process results in a clarified work environment. Everyone in the organization knows what to do. The tasks and responsibilities of all individuals, departments, and major divisions gets clarified. The type and limits of authority also gets determined.

There is an environment of coordination and cooperation in the organization. The interrelationships of the various work units gets developed. The principle of unity of direction which calls for the establishment of one authority figure for each designated task of the organization is achieved. This person has the authority to coordinate all plans concerning that task.

A formal decision-making structure gets established in the organization. This chain of command allows the orderly progression up and down the hierarchy for decision making and decision-making communications.

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Organizing - A Management Function Organizing is the function of management which follows planning. It is the process of establishing orderly uses for all resources within the management system of the organization. It is a function in which the synchronization and combination of human, physical, financial, and information resources takes place for the achievement of the results.

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Nothing really scholarly here just thought it was funny and gave me a laugh.

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More scholarly here, goes over some advantages and disadvantages of the topic to help show both sides.

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Essays, Research Papers and Articles on Business Management

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After reading this article you will learn about:- 1. Meaning of Division of Labour 2. Advantages of Division of Labour 3. Disadvantages.

Meaning of Division of Labour:

It means division of work into different part or processes which are performed by one or group of workers according to their ability and aptitude. A good example of division of labour is found in mass scale production factory, where workers are classified according to the nature of work performed by them, e.g. Foreman, Chargeman, Technician, Electrician etc.
Division of labour is of four kinds:
(i) When there is complete division of jobs among different members of a community, it is called simple division of labour,

(ii) When the work is divided into a number of processes in such a way that each worker does one process only, it is called complex division of labour,

(iii) When due to one reason or the other a particular area specialises in a type of labour, we call it territorial division of labour,

(iv) When different countries produce things of their specialisation, we call it as international division of labour.

Advantages of Division of Labour:

1. Each worker specialises in a particular type of work, therefore, efficiency increases.

2. Since each worker performs the same work again and again, therefore, there is improvement in skill.

3. It results in greater production.

4. It becomes possible to do work quickly and efficiently without putting much strain on workers and industry.

5. Intelligent persons can make inventions in their field of specialisation.

6. Division of labour at international level has made international trade possible.

7. Increased production through division of labour increases national wealth.

Disadvantages of Division of Labour:

1. Since a worker is required to do the same work again and again, hence he becomes dull.

2. It divides the responsibility for which there are more chances of shifting.

3. It hinders the mobility of labour.

4. If operations in one department are stopped, then whole of the industry suffers.

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Division of Labour: Meaning, Advantages and Disadvantages

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After reading this article you will learn about:- 1. Meaning of Division of Labour 2. Advantages of Division of Labour 3. Disadvantages. Meaning of Division of Labour: It means division of work into different part or processes which are performed by one or group of workers according to their ability and aptitude.

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An article that highlights how to change a organization culture when its gone wrong.

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Changing an organization's culture is one of the most difficult leadership challenges. That's because an organization's culture comprises an interlocking set of goals, roles, processes, values, communications practices, attitudes and assumptions.

The elements fit together as an mutually reinforcing system and combine to prevent any attempt to change it. That's why single-fix changes, such as the introduction of teams, or Lean, or Agile, or Scrum, or knowledge management, or some new process, may appear to make progress for a while, but eventually the interlocking elements of the organizational culture take over and the change is inexorably drawn back into the existing organizational culture.

Changing a culture is a large-scale undertaking, and eventually all of the organizational tools for changing minds will need to be put in play. However the order in which they deployed has a critical impact on the likelihood of success.

In general, the most fruitful success strategy is to begin with leadership tools, including a vision or story of the future, cement the change in place with management tools, such as role definitions, measurement and control systems, and use the pure tools of coercion and punishments as a last resort, when all else fails.

Frequent mistakes in trying to change culture include:

Overuse of the power tools of coercion and underuse of leadership tools.

Beginning with a vision or story, but failing to put in place the management tools that will cement the behavioral changes in place.

Beginning with power tools even before a clear vision or story of the future is in place.

These lessons are evident in successive efforts to change the organizational culture of the World Bank over a period of almost half a century.

The challenge of culture change at the World Bank

The World Bank represents a particularly difficult case of organizational culture change. Its formal goal-development-is ambiguous. The institution itself is a peculiar mix of a philanthropic foundation, a university and a bank. As an international organization, it is owned by the governments of the world, with a resident board of directors and their staffs who are ever present and ready to second-guess the management.

In a broad sense, the World Bank is a great success. It's easy to forget that fifty years ago, India, China and Korea were seen as basket cases requiring Western charity in perpetuity: today, they are independent economic powers in their own right, as a result in part to the implementation of economic policies that the World Bank has been coaching them over many years.

But the remaining development problems in the poorest countries, particularly in Africa, remain intractable. And the new global issues such as the environment present new challenges for the World Bank to play a different role from the past.

Successive presidents have come and tried to change it, mostly with little success.

Robert McNamara: World Bank President 1968-1981

The most successful president by far in terms of changing the culture was Robert McNamara. After a career at the Ford Motor Company, of which McNamara became head in 1960, he was the U.S. secretary of defense from 1961 to 1968 and president of the World Bank from 1968 to 1981.

His most lasting accomplishment at the World Bank is, for better or worse, that he introduced hierarchical bureaucracy, with its attendant goals, roles, accountabilities, values and communications.

And we know how he did it. On his arrival at the World Bank in May 1968, McNamara quickly took charge. John Blaxall, a young economist at the time, recalls being summoned to McNamara's office shortly after his arrival, being handed a stack of annual reports, and asked to assemble multiyear financial statements-something that hadn't been done before. McNamara penciled in his left-handed scrawl on a white-lined pad the headings that he wanted. The columns across the top were the past five fiscal years, and the rows were the standard balance sheet and income statement items. How soon could he have it ready? Blaxall gave him a date and observed with concern that McNamara carefully wrote it down.

Within six weeks, McNamara had a set of tables covering all major aspects of the Bank Group's activities, with totals for each five-year period and detail for the past five years. Blaxall recalls McNamara poring over the sheets full of numbers, exclaiming with some animation: "This is really exciting, John!"

McNamara then asked the senior managers in the President's Council of the bank to fill in the numbers for the next five years for the activities under his responsibility. The immediate reaction was that it couldn't be done, to which McNamara replied that they should do it anyway-and have it ready within a month.

It is not surprising that the five-year lending plans submitted by the geographical units had little correspondence to the five-year plans prepared by the technical units. And the financial projections put forward by the disbursement department were unrelated to either.

It was at this point, in early summer 1968, that McNamara announced to the senior managers that in the future, the World Bank would have only one sheet of music from which everyone would play. Ensuring the necessary consistency would be a key role of the programming and budgeting department. The game plan was not a narrative but rather a set of standard tables-a bunch of numbers-through which McNamara managed the organization for the next thirteen years.

As a result, McNamara transformed the World Bank from a small, sleepy, financial boutique into a large, bustling, modern corporation, expanding lending more than tenfold in the course of his thirteen-year tenure. He dramatically increased the World Bank's role in agriculture and education and opened up new lines of business in health, population, nutrition, and urban development. He articulated a new role for the World Bank in alleviating global poverty, passionately calling attention to the plight of the poorest 40 percent of the world's population who had been essentially untouched by development lending. But his most lasting accomplishment is that he introduced hierarchical bureaucracy.

It's interesting to note what McNamara didn't do to bring about the culture change:

He didn't change the managers or bring in his own staff. He basically worked with people who were already there. When he needed something he couldn't get from the existing management, he drew on young people from within the organization like Blaxall.

He didn't start by reorganizing: It was only four years after his arrival (in 1972) that McNamara finally got around to a reorganization, which was needed in any event because the organization had grown so much. By this time, his management systems and philosophy were firmly in place.

McNamara thus arrived with a clear vision for the organization: it was to be a lending organization that was lending a great deal more money. He had a clear idea of the management he wanted introduced: hierarchical bureaucracy. He introduced systems and processes that focused everyone's attention on his vision of the World Bank as a rapidly growing lending organization and the type of management required. Those systems are still largely in place today and still guide management action.

Tom Clausen: 1981-1986: Strategic planning

Tom Clausen came from being head of the Bank of America, in which role he was named as the "best manager in America". After his stint at the World Bank, he returned to the Bank of America, where he was once again voted "best manager in America".

However at the World Bank, he found it difficult to make his mark. He spent much of his time trying to figure out how the organization functioned. He could see that the organization lent a great deal of money, but the goal of lending-development-remained fuzzy.

Clausen's response was to launch a major strategic planning exercise, of which the end result, like most such corporate exercises, was essentially to continue with "more of the same".

Clausen relied principally on management tools, and lacked any clear vision of where he wanted the organization to go. As a result, it kept going in the same direction.

Barber Conable: 1986-1991: Reorganization

Barber Conable's background as a Republican congressman from New York led him to approach his new job as a political challenge. The organization that he inherited had become slow, bureaucratic and unresponsive to its stakeholders. Conable's response was a massive reorganization, combined with mild downsizing. The hope was that the reorganized organization would emerge lighter, nimbler and more client-focused. The reality was that the old culture quickly reemerged, despite the new managers and the new structures. The culture easily survived.

Here the reliance of power tools resulted in short term disruption but no long term change.

Lew Preston (1991-1995) came from being head of JP Morgan. As a banker, he accepted the World Bank as a bank, and in the four years that he served as president, he made no significant effort to change it.

James Wolfensohn: 1995-2005: New structure, new managers

James Wolfensohn came from a career of investment banking. Unlike his predecessors, he had spent a number of years thinking about the World Bank and in fact trying to become its president. He was a candidate when McNamara retired in 1981, but he was told he was ineligible as an Australian citizen. He adopted U.S. nationality and succeeded in becoming president in 1995.

Upon his appointment, it was reported in the press that he intended to remove the entire cadre of senior managers. He denied the report at the time, but over the next couple of years, he did exactly that.

He also launched a massive reorganization that preoccupied managers and staff for several years, though as in earlier reorganizations, the culture re-emerged largely unscathed from the experience, despite the changes in personnel and structures.

More importantly, he also took steps to clarify the goal of the organization. In 1996, he espoused knowledge management as a strategic goal of the organization, calling it "the Knowledge Bank". (I served as director of knowledge management from 1996-2000.)

In 1998, he succeeded in introducing a World Bank mission statement -the first in its entire life.

To fight poverty with passion and professionalism for lasting results. To help people help themselves and their environment by providing resources, sharing knowledge, building capacity and forging partnerships in the public and private sectors.

The goal was for the first time clearly focused on fighting poverty. However as all of the management systems and processes remained focused on getting out the lending program, the mission statement has still had little operational impact.

Thus Wolfensohn's ten-year term was marked by a lot of energy and effort to introduce change. The organization became more decentralized, with a younger and less experienced staff, but not fundamentally different. It was a still a bank lending money for development, in accordance with the systems that McNamara had put in place almost forty years before.

Wolfensohn did have a vision for the organization as an organization dedicated to relieving poverty, but failed to put in place the management systems that would support and reinforce that vision.

Paul Wolfowitz: 2005-2007: New blood from outside

As a leading neoconservative, and Deputy Secretary of Defense, Paul Wolfowitz was a major architect of President Bush's Iraq policy and its most hawkish advocate. His appointment as president of the World Bank was controversial.

Wolfowitz arrived with a change agenda to move the organization towards a more conservative stance. He tried to do this by bringing on board some of his neoconservative lieutenants as managers. By and large, the organization, which has no tradition like the US government of bringing in new managers from outside, responded like an immune system reacting to invading pathogens.

In effort to identify and put an end to corruption, Wolfowitz brought on two US nationals formerly with the Bush administration, whom he appointed as close advisors to flush out fraud. Their work proved divisive.

Another appointee ran into problems when he tried change policies on family planning and climate change towards a conservative line.

After serving a tumultuous two years, Wolfowitz resigned, following revelation of a promotion that he had arranged for his companion. Obviously, a personal scandal brings any change effort to a screeching halt.

After the tumult of the brief Wolfowitz era, Zoellick's calm tenure with no bold moves was a relief to many. His recent discovery of the World Bank's role in providing data to the world shows how long it can take an incoming president to understand, let alone manage, this intricate organization. As he enters the final year of his five-year term, there is no indication from President Obama as to whether he wants the former Bush hand to stay on. Zoellick has made no statement about his own plans.

Meeting the challenge for the future

As of mid-2011, the World Bank remains a slow-moving traditional hierarchical bureaucracy, with an inward-looking perspective. The mission statement of 1998 dedicating the organization to the relief of poverty is largely unsupported by the management roles, systems and structures which still drive the organization to focus mainly on lending for individual development projects. While filled with talented staff, the organization as a whole is underperforming. It lacks the agility to cope with the diverse challenges that the world now faces.

Overall, the World Bank is desperately in need of a radical change in management. If no change occurs, it will become less and less relevant.

Lessons for the next president

If the next president is to achieve the needed change, he or she should learn from the success of Robert McNamara and the failures of his successors, as well as other successful change efforts in large organizations, such as Alan Mullaly at Ford [F] or even Steve Jobs at Apple [AAPL]:

come with a clear vision of where you want the organization to go and promulgate that vision rapidly and forcefully with leadership storytelling.

communicate horizontally in conversations and stories, not through top-down commands.

Don't start by reorganizing. First clarify the vision and put in place the management roles and systems that will reinforce the vision.

Don't parachute in a new team of top managers. Work with the existing managers and draw on people who share your vision.

_________________

Steve Denning's most recent book is: The Leader's Guide to Radical Management: Reinventing the Workplace For the 21st Century (Jossey-Bass, 2010).

Follow Steve Denning on Twitter @stevedenning

Join the Zurich Gathering For C-Suite Leaders with Steve Denning Zurich Sep 12, 2011

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How Do You Change An Organizational Culture?

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Changing an organization's culture is one of the most difficult leadership challenges. That's because an organization's culture comprises an interlocking set of goals, roles, processes, values, communications practices, attitudes and assumptions. The elements fit together as an mutually reinforcing system and combine to prevent any attempt to change it. That's [...]

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Managing Human Resources And Communications

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Managing Human Resources And Communications

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Article that goes over the topic of Influencing and how to properly influence co-workers.

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Effective Influencing Skills

There is no right way, nor is there only one way to influence others.

Everything, but everything, is a factor when influencing people.

And we are, all of us, influenced by people, places, events and situations at all times.

Sometimes we are affected more or less by these things, but we are continually being influenced by what happens around us.

Influencing Specifics in the Workplace

Your job requires you to influence people just about all of the time.

It may take the form of gaining support, inspiring others, persuading other people to become your champions, engaging someone's imagination, creating relationships. Whatever form it takes, being an excellent influencer makes your job easier.

An interesting point about people who use their influencing skills well, is that other people like being around them. There's a kind of exciting buzz, or sense that things happen when they're about.

It's because they don't sit around wishing things were different while moaning there's nothing they can do about it.

They don't sit around blaming others or complaining about what needs fixing that will make things better. They see what needs doing and set about getting it done.

Truly excellent influencing skills require a healthy combination of interpersonal, communication, presentation and assertiveness techniques.

It is about adapting and modifying your personal style when you become aware of the affect you are having on other people, while still being true to yourself. Behaviour and attitude change are what's important, not changing who you are or how you feel and think.

Coercion and Manipulation

You may try to exert your influence through coercion and manipulation. You might even succeed in getting things done; but that isn't really influencing. That's forcing people to do what you want, often against their will. You won't have succeeded in winning support.

Pushing, bullying, bludgeoning or haranguing DO NOT WORK! Like elephants, people will remember the experience.

Indeed, if you force someone to do something you want, without taking their point of view into consideration, then the impression that person is left with is how they will see you forever. You're stuck with it, unless you deliberately change what you do in order to be seen differently.

People are far more willing to come halfway (or more) if they feel acknowledged, understood and appreciated. They may even end up doing or agreeing to something they wouldn't previously have done because they feel good about making the choice.

How do you Influence?

Influencing is about understanding yourself and the effect or impact you have on others. Though it can, on occasion, be one way, the primary relationship is two way, and it is about changing how others perceive you.

In other words, the clich, perception is reality, makes perfect sense in the context of influencing.

It doesn't matter what's going on internally for you - if it isn't perceived by the other person, then it doesn't exist, other than in your mind.

You could be doing the most brilliant presentation you've ever created, but if you haven't brought your 'audience' with you, the brilliance is wasted. And that's about being able to see what's going on for them, which will be different, however much you may have in common.

Influencing can sometimes be looked at as the ability to 'finesse', almost sleight of hand. The other person isn't prodded into seeing your view of the world, but is persuaded, often unconsciously, into understanding it.

Personal Influencing Style

Sometimes you can get so used to your own personal style or way of being or pattern of communicating, that you don't think of how it is being received, and you don't think of behaving in any other way.

Influencing is about being able to move things forward, without pushing, forcing or telling others what to do.

Now what we know is that one of the most powerful forces that affect people's behaviour is the avoidance of humiliation.

Behaviour Change

No one wants to embarrass themselves if they can help it. So changing your behaviour entails a certain risk.

But if that behaviour change is deliberate, and you have made an effort to see the world from the other person's point of view, then humiliation can be avoided on both sides.

Whatever the arena you work in influencing others is about having the confidence and willingness to use yourself to make things happen. Influencing people is also the ability to 'work' a dynamic, whether it's a large group, one to one or over the phone.

By 'working' the dynamic, we mean using everything at your disposal, both verbal and non-verbal communication, to create the impact you want, rather than letting things just happen.

Influencing Skills Training

Impact Factory runs
Open Influencing Skills Courses Tailored Influencing Skills Training Five Day Communicate With Impact Workshops
and

personalised One-to-One Influencing Coaching

for anyone who is interested in Influencing Issues

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Influencing Skills - How To Influence People

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There is no right way, nor is there only one way to influence others. Everything, but everything, is a factor when influencing people. And we are, all of us, influenced by people, places, events and situations at all times. Sometimes we are affected more or less by these things, but we are continually being influenced by what happens around us.

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An article that explores the differences of Leading v Managing but also tries to blur the line between the two.

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Managing and leading ...two words used all the time. But did you ever think about how they're related? Are they more alike or more different?

Leading vs Managing, by Definition

First, basic definitions: To manage is "to be in charge of, administer run." To lead , on the other hand, is defined as "to be in charge or command of." Hmmm. On the surface, at least, the two could almost be synonyms. But for anyone who's ever managed or led (or managed and led!) and for those who've been managed or led by others, there are very distinct differences between the two. So the relevant questions, especially for business owners, are: What's the point of understanding the differences between managing and leading? Should you be doing more of one or the other or some combination of both? And what if (as at least one prominent expert says) what's most important is not to focus on the differences? A lot's been written about managing and leading, and there used to be a tendency to place a higher value on leaders, who are bold and inspiring, versus managers, who are more mundane and focus on everyday details. That notion has faded some as we embrace more fluid roles and a much broader range of what constitutes desirable traits, competence and excellence.

Expert Takes on Leaders vs Managers

Business coach Stever Robbins wrote about leaders and managers awhile back on entrepreneur.com . Robbins says leaders are the heart of a business, motivating others to work toward a common goal. Managers, he says, are the brains of a business, establishing things like systems and operating procedures, focused more on the "things" side of the business, rather than the "people" side. But to be effective, most business owners and executives, Robbins says, need a mix of skills that reflect qualities of both leaders and managers. There's also a practical reason: What organization has so many staff that some can focus exclusively on leading, while others concentrate only on managing? Certainly this is most true of small business owners who wear many different hats-among them, those of a leader and a manager. A leadership guide also provides some insights into the differences between leadership and management. Some key points:

Leadership and management are different but must go hand in hand.

When working with employees you need to be able to not just assign tasks but also to define the mission and purpose for them.

Part of the job is organizing and maximizing efficiency. But it's also nurturing skills, developing talent and inspiring results (transforming the notion of being a leader versus a manager into one of being a leader and a manager both) .

Current thinking cautions against trying to separate leadership and management roles or trying to label people as strictly leaders or managers; it will just cause problems. Back in the late 80s, author Warren Bennis drew sharp distinctions between the two in his book, On Becoming a Leader . Bennis referred to managers as "copies," "imitators" and those who are "classic good soldiers," while leaders, he said, are "originals," originators," and those who are "his or her own person." But with an evolving economy and the emergence of knowledge workers and massive changes in how companies are organized and operate, this line of thinking has fallen out of favor. It's just too narrow and limiting.

Leading vs Managing: The Differences Shouldn't Be the Focus

In a fastcompany.com post based on his book, Good Boss, Bad Boss , professor and author Robert Sutton, PhD, argues that although there are differences in the two roles, focusing on them is a really bad idea. Business owners or executives who see themselves as exclusively "visionary" or "big-picture thinkers" (leaders) often believe that understanding how things work and getting things done are best left to the "little people" (managers). This detached-from-reality mindset that can spell disaster and lead to poor decisions. Sutton says that those he admires the most have the ability to go back and forth between the little details and the big picture. After all, Steve Jobs was a true visionary. But he also spent a lot of time in Apple stores, tinkering with everything from shopping bags to colors and interested in how the tiniest of details were shaping the brand.

How to Be a Great Leader AND Manager

If your goal is to be a great leader and manager, there are a few things you can do to accomplish this.

First, take the time to motivate and inspire your employees. Get them excited not only about what they do each and every day, but also about the company's greater goal and its bigger mission. Help them see what it is you're after so they're more capable of going after the same thing, too.

Second, take an interest in every role that someone in your company fills. While you don't have to become an expert in each position, even having a general knowledge of what your employees do each day can make you a better leader and manager. This also makes it easier for you to understand what's working in your business and which areas need a little improvement.

Changing Your Leader vs Manager Mindset

Taking these types of steps to better your business may be difficult, but only until you change your leader versus manager mindset. Instead, your goal should be to combine the two in a way that enables you to deal with various aspect of your business, from the large to the small, transforming you into a leader and manager as a result.

This involves paying attention to the people you employ and the processes you create. It means knowing exactly how your company works, from the most basic things you do to the most complex. No, you don't have to know them in great detail, but the more you know about them overall, the better decisions you'll be able to make.

It is then that you will become a leader and a manager-no "versus" necessary.

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Leading vs. Managing: Are They Really That Different? | Business Tips

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Managing and leading ...two words used all the time. But did you ever think about how they're related? Are they more alike or more different? First, basic definitions: To manage is "to be in charge of, administer run." To lead , on the other hand, is defined as "to be in charge or command of."

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Simple chart that highlights key points in each subject along with similarities between the two.

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An article that goes over some key advantages of applying Servant style leadership to your business.

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6 min read

Opinions expressed by Entrepreneur contributors are their own.

Any experienced entrepreneur or manager will tell you that as a business grows, one of the biggest challenges is leadership. That challenge begins the moment you hire your first team member, and the challenge only grows with each addition. So what's the best model for leadership in a startup environment? The old one -- of the authoritarian boss -- is rapidly being replaced with leading by example.
Related: How to Retain Employees Through 'Servant' Leadership
What do many successful entrepreneurs in this day and age do? They choose servant leadership.

The concept of servant leadership is based on principles that are centuries old. But the actual term for a leader who upends the power pyramid to put others' needs first was introduced by Robert Greenleaf in his influential 1970 essay " The Servant As Leader" in 1970. And it's since risen in popularity in the United States.

Adam Grant, for instance, a leading management researcher and professor at the Wharton School of Business, wrote in his breakthrough book Give and Take that research shows servant leaders are more productive and more highly regarded by employees. Servant leadership has also been implemented by incredibly successful companies like Whole Foods, UPS and Ritz Carlton.

What are servant leadership's main principles? Here are six, identified by author-writer Larry Spears (who established a center on servant leadership), along with real world examples to help you distill this philosophy into practices that can help transform your business.

1. Empathy

Satya Nadella is only the third CEO in Microsoft history, following in the footsteps of Bill Gates and Steve Ballmer. Nadella has spoken of the important role empathy plays in being an effective leader. He's even written a book about it, saying that empathy "will become ever more valuable in a world where the torrent of technology will disrupt the status quo like never before."

The servant leader strives to understand and share the feelings of each team member as well as those of his or her customers. Giving trusted coworkers the benefit of the doubt by assuming the good in them goes a long way toward instilling loyalty and trust in you from your team.

2. Awareness

Servant leaders have a strong awareness of what's going on around them. They care deeply about the welfare of their team members and don't view them simply as cogs in a machine.
Related: Why Leaders Should View Themselves as Servants
Servant leaders care passionately about their employees' well-being. Tesla's Elon Musk recently demonstrated such awareness by pledging to work on the production line at one of his manufacturing sites, performing the tasks that had resulted in some of his workers being injured.

More importantly, servant leaders are self-aware. They have a deep understanding of the effects their decisions and behavior have on others around them. Awareness comes at a price -- as Greenleaf wrote: " Awareness is not a giver of a solace -- it is just the opposite. It is a disturber and an awakener. Able leaders are usually sharply awake and reasonably disturbed."

3. Building community

Paul Polman, CEO of Unilever, the world's largest consumer-goods company, believes passionately in building a community where both employees and customers can thrive. Unilever's brand of conscientious capitalism is hugely successful. The company is a $170 billion dollar empire and its products are used by 2.5 billion people every day.

Unilever is particularly active in emerging markets. An initiative called Perfect Villages, for example, provides 1,000 towns in Vietnam with Unilever assistance. Executives have mandatory weeklong stays with " poor rural families that might share one toothbrush among five people." As Polman has said, "You can put yourself to the purpose of others, and in doing so, you can be better off."

4. Persuasion

Rather than simply directing employees to follow orders based on a rigid hierarchy, the servant leader relies on persuasion rather than coercion. The late Steve Jobs of Apple was widely regarded as a master of persuasion. His employees often spoke of his ability to persuade them to meet seemingly impossible deadline goals.
Related: How to Motivate Your Team Members by Putting Their Needs First
In fact, skill at persuasion is one of the differentiating factors between a traditional authoritarian management structure and the service-driven approach. Persuasion involves one important component that orders don't: dialogue. When you engage with your employees on why something is a good idea for the team, and work with them to see how it benefits everyone, employees are more likely to develop the internal motivation required to complete the task effectively.

5. Conceptualization

Servant-leading entrepreneurs focus on the big picture and don't get overly distracted by daily operations and short-term goals. According to Virgin CEO Richard Branson, while you need to pay attention to every detail in the early, survival mode stage of your business, later you should delegate and focus on the big picture.

Servant leaders empower their staffs to handle quotidian matters, freeing themselves to dream a better future for the team and the company. This doesn't make the servant leader an impractical daydreamer -- just the opposite. An effective servant leader will have a deep understanding of every aspect of the business, but won't allow himself or herself to be distracted from long-term goals. Feeling this freedom is also a good sign that you have competent employees whom you can trust.

6. Growth

Servant leaders care passionately about the personal and professional growth of each member of their team. The Washington Post described a servant leader as someone who doesn't think he or she is better than the people lower on the ladder or that unless employees are carefully watched, they won't work hard. Servant leaders believe that if you create the right values and culture, normal people will do extraordinary things.

Facebook was crowned best company to work for in 2017 by GlassDoor. Free food and 18 weeks' paid leave for new parents (male and female) are among the many benefits that CEO Mark Zuckerberg offers employees.

Final thoughts

Though servant leadership may appear at first to be an oxymoron, it is a leadership strategy that's been embraced by some of the world's most successful companies.

There is powerful data to back up the advantages of servant leadership. The University of Illinois at Chicago Business School conducted a recent study at national food chain Jason's Deli with a sample size of 961 employees at 71 restaurants in 10 metropolitan areas. Among those restaurants, the stores with servant leaders showed a:

6 percent higher job performance

8 percent increase in positive customer service ratings

50 percent higher staff retention rate

So, if you're launching a business, consider taking a page from Jason's Deli's book. There's no better time to build a positive corporate culture than starting at the top.

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'Servant Leadership' and How Its 6 Main Principles Can Boost the Success of Your Startup

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6 min read Opinions expressed by Entrepreneur contributors are their own. Any experienced entrepreneur or manager will tell you that as a business grows, one of the biggest challenges is leadership. That challenge begins the moment you hire your first team member, and the challenge only grows with each addition.

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Its all about finding the right motivation for each employee, everyone's needs are different and a good manager can use all his knowledge to find the right way to push his employees forward.

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Video about controlling, really great sub information after reading the book. Visited this site quite often.

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Background: The Management Process

Controlling is the fourth step in the management process. Let's review the process as a whole to better understand how controlling fits.

The first step, planning, involves developing short- and long-term goals for the organization. This includes setting goals and planning for the necessary resources needed to attain the set goals. Goals can be short-term, like a sales blitz, or long-term, like developing a new marketing plan. Either way, managers begin by first planning for the goals.

The next step, organizing, involves performing all of the tasks needed to get the job done. This means gathering all of the resources, like people, capital and information, so that everything is ready when needed.

The next step, directing, involves actually executing the plan - putting all of the resources to work to achieve the short- and long-term goals set forth in the planning stage.

The final step, and the main focus of our lesson, is controlling. It involves comparing actual performance to expected performance.

Controlling as a Process

The controlling process involves:

1. Establishing standards to measure performance

2. Measuring actual performance

3. Comparing performance with the standard

4. Taking corrective action

Controlling Process Explained

The controlling process is simply a set of steps a manager uses to determine whether organizational goals have been met. Let's explore each step of the process and apply examples to demonstrate its function for management. Let's use the example of TQM Auto Repair Shop to understand the controlling process.

Establishing Standards to Measure Performance

This involves making decisions about the goals an organization wants to focus on during a period of time. These can be financial, customer satisfaction, production or employee performance-related goals.

Measuring Actual Performance

This involves creating measuring tools to collect data. The tool should be able to report on performance as it relates to the standards set, or 'measures,' developed in the first step of the controlling process. These tools can be a balance sheet, a sales report, data collected from a customer satisfaction survey or even an employee performance appraisal.

Comparing Performance with the Standard

This involves comparing 'actual' performance to performance standards based on data collected in the second step of the controlling process. Using the measuring tools created in the second step, managers are able to compare current performance and productivity to the standards set. A manager may want to compare sales performance from last year to this year by comparing the actual sales from the previous year to the sales of the current year. This comparison tells a manager whether the sales team is below, meeting or exceeding goals. These are called variances, or differences between what was expected and what actually occurred.

Taking Corrective Action

This involves determining whether changes need to be made, what changes need to be made and devising a plan for making changes. Managers will use comparisons to determine what needs to be investigated. If sales are lower than expected, managers will look at various things.

Perhaps the salespeople are not making as many client calls as they did last year. In this case, corrective action may be taken against the employees for non-performance. A manager may look at the work itself. Maybe there are too many clients and not enough staff. In this case, a manager may have to hire more staff. The price of the product or service may be too high, and it may affect demand. In this case, a manager may have to look at ways to add value to a product or service or lower prices.

Controlling Process in Action

Let's look at examples of the controlling process in action. Sam, the manager of TQM Auto Repair Shop recently set goals for his business. First, Sam must establish standards, or a set of 'requirements' for his business. Sam is working on the first step, establishing standards to measure performance.

Sam wants to make $100,000 more this year than he did last year so he can replace older equipment in the repair shop. Raising the price of repairs can do this. This is a financial goal.

It is important not to take customers for granted. A goal to increase customer satisfaction from 84% last year to 90% this year is set. Customer service satisfaction must increase by six percent this year. This is a customer service-related goal.

Sam sets a goal to increase the quota, or a goal set for production, for the amount of cars each mechanic must repair each week. This is a production goal.

With all of the new goals Sam set for the repair shop over the past week, employees may not be able to keep up with the workload. To ensure the goals are met, Sam must devise a way to measure the productivity and performance of his employees. This measurement is compared with the goals he set above, or the preset standards. Once he evaluates the information, Sam can provide feedback to each employee. This will help them make improvements to their work. This is an employee performance appraisal .

Sam developed the standards for what he would like to accomplish in the above step. Now, he needs to develop a way of determining whether the goals are being met. Sam creates a new pricing guide, a customer satisfaction survey, a sales quota system and an employee evaluation system. Sam is working on the second step, measuring actual performance.

Sam will present the new pricing guide to employees. He explains his plan for raising much-needed revenue to each employee so the employee understands the reason for the price increase. It is important to include employees in setting goals. If Sam's employees understand the reason for the price increase, they will be more likely to buy-in to the goal.

Sam also introduces the customer satisfaction survey to his customers. Each customer will fill out a survey where they will rate their experience based on many factors like:

Timeliness of repairs

Quality of work

Price

Friendliness of mechanics

Ease of payment

Sam also has to develop a way to measure how many cars are being repaired by each mechanic on a weekly basis to be sure that the amount of repairs done weekly, monthly and in a year add up to the desired goal of increasing revenue by $100,000 set forth above. He introduces the mechanics to a repair quota system. Each mechanic must fix ten engines, patch five tires and replace 15 windshield wipers each week. That means that each mechanic must bring in about $280.00 in revenue each week to reach the goal. Once broken down for the mechanics, the goal is realistic and attainable.

The toughest challenge for Sam will be to introduce the employee appraisal system. He uses a system that involves the employee setting goals for themselves and Sam setting goals for the employees. After chatting with each employee, Sam is able to determine the criteria for acceptable performance. He will include the sales quota system from above, dependability, reliability, motivation and absenteeism in the appraisal. He will sit down with each employee to explain the process. If employees have input in setting goals for themselves, they are much more likely to achieve the goals.

As time goes by, Sam needs to monitor the process to be sure it is working. Sam is comparing performance with the standard. Sam reviews his repair receipts and income statements each month to be sure he in on target for his financial goal of increasing revenue by $100,000.

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controlling as a function of management - video & lesson transcript | study.com

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Controlling as a Function of Management - Video & Lesson Transcript | Study.com

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Controlling is the fourth step in the management process. Let's review the process as a whole to better understand how controlling fits. The first step, planning, involves developing short- and long-term goals for the organization. This includes setting goals and planning for the necessary resources needed to attain the set goals.

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Simple chart that goes over the key steps in the controlling process.

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Article that goes over the importance of keeping your business productivity high.

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Six Sigma Online Training Certification Information

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Business Productivity is the ability of an organization to utilize its available resources in order to produce profitable goods or services as desired by customers or clients. It is the productivity that measures the performance of an organization, and it can also be used for companies themselves in order to assess their own progress. The importance of productivity in business can be summarized as follows.

Productiveness increases the overall efficiency of an organization. When the efficiency of the organization increases, the production capacity of the company is utilized to the optimum level. Thus, all resources are used in an effective and efficient manner to get the best possible results. As is often indicated by business, the more products you make, the lower your overhead, and the higher your profits.

Enhanced production lowers the cost per unit of a product which in turn, results in lower prices for better quality, which enhances a business' competitiveness in the market. In the current turbulent world, every organization faces stiff competition from their counterparts. Hence, lower prices as a result of enhanced production give an edge to businesses to sell products at more competitive prices. If the rates are competitive, the business is in a better position to attract more customers and make more sales. This is the primary motive of any business organization.

Increased production due to efficient utilization of organizational resources leads to a lower cost production resulting in better sales and profits. If the profits of an organization shoot up, it increases the confidence of investors in the organization. Moreover, the share value of the company increases. Due to this, the reputation and goodwill of the organization increases.

Similarly, the business can share a portion of its profits as a result of enhanced production with its employees. This boosts the morale of the employees as they get to enjoy a part of the profits and the satisfaction of a job well done. As a result, their working efficiency tends to increase which in turn, further increases the production of the company. As you can start to see, there is a snowball of business success that starts with increased productivity.

Productivity is much more important than revenues and profits of the organization because profits only reflect the end result whereas productivity reflects the increased efficiency as well as effectiveness of business policies and processes. Moreover, it enables a business to find out its strengths and weaknesses. It also lets the business easily identify threats as well as opportunities that prevail in the market as a result of competition and changes in business environment.

A company can increase its own business productivity by making suitable changes in its business process and policies in order to improve the weak areas and capitalize on strengths for betterment. Similarly, an organization can formulate strategies to turn threats in to opportunities. This results in increased profitability and stability which is vital for the continued success of any business organization.

The importance of productivity can never be ignored by any diligent business owner. Successful ventures are often those that give priority to productivity compared to solely looking into revenues and profits of the company. On the other hand, businesses that do not pay attention to productivity pay a huge price in terms of reduced production and high cost of production, resulting in reduced sales and low profits. Thus, a productivity level can be considered a measure of success or failure for any business.

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The Importance of Productivity in Business

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Business Productivity is the ability of an organization to utilize its available resources in order to produce profitable goods or services as desired by customers or clients. It is the productivity that measures the performance of an organization, and it can also be used for companies themselves in order to assess their own progress.

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An article going over some key ideas behind increasing productivity in the workplace.

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5 min read

Opinions expressed by Entrepreneur contributors are their own.

Productivity is on the decline in America: The Bureau of Labor Statistics showed that during the fourth quarter of 2014, nonfarm business output increased by 3.2 percent, and hours worked increased by 5.1 percent; but productivity itself decrease d by 1.8 percent. This is a disturbing trend for any business to deal with, for both salaried workers and entrepreneurs.

Related: 10 Tips for Staying Focused From 10 Very Busy Young Entrepreneurs

Accordingly, businesses need to look for tools to help their workers become more productive. This is especially important for new startups, where the margin for error is less than generous. Some suggested tools to try:

1. Focus on creating value at work.

Identify one habit, one action that you do daily that is detracting from your productivity, then remove it. Once you do that, you'll be headed in the right direction. Even better, replace that habit with something that has value. Humor is one such idea: Studies show that humor can actually increase workplace productivity.

2. Beware the afternoon doldrums.

Do this while avoiding chugging so-called energy drinks, which are mostly sugar and caffeine. Try an alternative energy booster, like green tea.

3. Say "no" to distractions.

Mobile apps offer a tempting opportunity to tune out of your mundane work tasks and tune into an exciting game of killing zombies, or an attempt to balance your checking account. Promise yourself a reward of 30 minutes of zombie killing after work, if you get a certain project completed -- and save your online banking duties until you can sit down to a nice meal, or you're headed home.
Related: 21 Apps to Boost Productivity, Accountability and Success
4. Live a healthy life.

Small business operators pull long hours. They snack when they should eat a good meal, and they miss an inordinate amount of sleep. A finance director we know says, "I help bad credit customers attain car loans for more than 14 hours every day, sometimes with little more than a snack to keep me energized." The result? Success, sometimes -- but also poor health.

Productivity is all about working steadily at a goal, not about burning out, with a visit to the hospital thrown in. Break your goals into small, bite-sized chunks of work that can be done in less than an hour. And take mini-breaks in between, doing healthy things like deep breathing or snacking on celery and radishes.

5. Start your day the night before.

Lay out your work clothes, plug in the coffee maker and check tomorrow's weather and traffic forecasts. Avoid caffeinated drinks and alcohol after 6 pm. Go to bed early. Sound like you're in training for something? You are in training, for the sport of productivity. You can break training for the weekends and holidays.

As for those longer sleep times, they are what made Benjamin Franklin so productive during his long life: "Early to bed and early to rise." The early morning hours are the least distracted hours in the day. Set your alarm for just 30 minutes earlier to test out the results for yourself.

Seem impossible? Try it and see. Or hold all your meetings standing up -- that might have the same result!

7. Don't be so reactive.

Time management is crucial to the success of every startup. Every email does not have to be answered right away; every person who stops by your desk does not need to be allowed to eat up a half hour with idle chit-chat; every voicemail does not need an immediate response. Focus on priorities instead of reacting to every immediate stimulus.

8. Don't forget your employees.

As an entrepreneur, you should know that your employees will never be happy or very productive if they worry excessively about tying productivity directly to compensation. The gap will continue to widen. Work with them to create ways to make their work a source of pride and pleasure. Awards and bonuses are nice, but it's even better to take a personal interest in all your employees, from janitor to VP. When they know you care about them as people, their productivity will increase.

Enhancing team productivity is often at the top of the to-do lists of many managers, owners and entrepreneurs. And it should be. Where you can go wrong is putting the pressure on the teams themselves to "work harder" in order to boost efficiency and productivity. Instead, use these 10 tips to increase team satisfaction, reduce turnover and streamline business processes without burning everyone out.
Related: 10 Habits You Should Ditch Now to Bring Productivity to an All-Time High

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8 Business Practices That Increase Productivity

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5 min read Opinions expressed by Entrepreneur contributors are their own. Productivity is on the decline in America: The Bureau of Labor Statistics showed that during the fourth quarter of 2014, nonfarm business output increased by 3.2 percent, and hours worked increased by 5.1 percent; but productivity itself decrease d by 1.8 percent.

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How I felt after reading all the thinks that HR really does..

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Article that highlights the differences and instances when its used between informal and formal communication.

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Profitable organizations rely on formal and informal business communication patterns. Formal communication channels provide structure toward productive outcomes. Informal interactions allow authentic relationships to be built and alternative methods to create meaning in the organization. Both complement each other and can strengthen the company when effectively applied. Each can be planned, but informal communication is usually spontaneous.

Purpose of Formal Communication

Formal business communication is a strategic exchange of information that supports a clear agenda. This information is traditionally considered as in-house method of communication, but can include structured interactions with people and entities outside the organization.

Formal communication can also trigger informal interactions. For example, a chief officer may schedule a tour or town hall meeting where a free flow of comments on topics of discussion are encouraged. However, these can lead to personal interactions, stories and ideas that were not on the original agenda.

Types of Formal Communication

Organizations may communicate to their internal team through written or verbal communication. Managers may use formal written tools such as emails, blog entries, orientation training materials or newsletters. Speech presentations, meetings and scheduled conferences are examples of verbal interactions as a formal communication strategy. Formal communication can also include strategic placement of office signage, employee reviews and collaboration with non-profit organizations. News briefs and executive appearances are also creative ways to enhance business relationships through formal communication.

Purpose of Informal Communication

Spontaneous interactions spark a 'grapevine' of information shared through informal communication networks. Informal business communication should complement formal networks. Authentic and profitable relationships are solidified through this method. Sometimes, the informal atmosphere can result in casual and careless distribution of information. For this reason, all personnel should be especially careful about sharing sensitive information while communicating informally. Although written communication can also be informal, it should be appropriate to avoid legal and ethical issues.

Types of Informal Communication

Informal verbal communication can take place during lunch breaks, hallway interactions and phone calls. Creative business communicators may deliberately include handwritten notes, text messages and anniversary recognitions and birthday cards to build rapport with their coworkers.

Dynamics of Corporate Communication

Information can be delivered from management to employee, or vice versa. Companies that are founded primarily in formal networks rarely deviate from the rules and protocols. On the other hand, informal corporate cultures encourage spontaneity and casual networks. Regardless of the company culture, organizations grow through a strategic balance of formal and informal networks. Organizations benefit from establishing an open communication network that includes feedback from employees and managers alike.

About the Author

Since 1999, Christina Callaway has written and developed marketing communications programs for a range of small businesses, start-up ventures and Fortune 500 companies. She is also a speaker and trainer specializing in integrated communications.

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Formal & Informal Business Communication

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Profitable organizations rely on formal and informal business communication patterns. Formal communication channels provide structure toward productive outcomes. Informal interactions allow authentic relationships to be built and alternative methods to create meaning in the organization. Both complement each other ...

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Amazingly helpful site on the differences and objectives of informal vs formal groups/teams.

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From a organizational point of view, there are basically two types of groups. These are formal groups and informal groups.

Formal Groups

An group is formal when it is purposely designed to accomplish an organizational objective or task. It is created via formal authority for some defined purpose.

A formal group can be a command group or a functional group that is relatively permanent is composed of managers and their subordinates who meet regularly to discuss general and specific ideas to improve product or service.

The formal groups usually work under a single supervisor, even though the structure of these groups may vary. For example, in one form of group such as in production, the members of the work group depend on each other as well as on the supervisor and in another form of group, such as sales force, the members of the group work fairly independently and their common contact may be the district sales manager.

Other types of formal groups include task forces and committees. The task forces are temporary in nature and are set up for some special projects. The committees can be permanent, such as a planning committee, a finance committee or a budget committee and may become an integral part of the organizational structure.

A committee can also be temporary such as a special task force that is set up for a particular purpose and is then disbanded when the purpose is achieved. For example, the committee to reelect the President is temporary in nature and is disbanded after the election.

Informal Groups

Whereas formal groups are established by organizations to achieve some specific objectives, informal groups are formed by the members of such groups by themselves. They emerge naturally, in response to the common interests of organizational members. They are formed spontaneously, without any formal designation, and with common interests such as self-defense, work assistance and social interaction.

They exist outside the formal authority system and without any set rigid rules. Though officially unrecognized, they exist in the shadow of the formal structure as a network of personal and social relations that must be understood and respected by the management.

Informal work groups are based upon socio-psychological support and reasoning and depend upon member's interaction, communication, personal likings and dislikings and social contacts within as well as outside the organization. How powerful these informal groups can be seen from the fact that if one member of the group is fired, sometimes all workers go on strike in support of that member of the group.

The bonds between members are very strong and bring in a sense of belonging and togetherness. This togetherness can have a powerful influence on productivity and job satisfaction, since employees motivate each other and share each others burden by training those who are new and by looking up to old timers for guidance, advice and assistance.

Informal groups may have their own leaders and followers, group goals, social roles and working patterns. They have their own unwritten rules and a code of conduct that every member implicitly accepts.

The leadership of the informal groups develops from within rather than a formal election. An individual, who is working in a group for a long time and has a good rapport with other members, may emerge as a leader due to his technical expertise and his seniority. For any problem within the group, either technical or social, the members would go to this leader rather than the formally assigned supervisor.

Some other aspects of Informal Groups are as follows:

Group Norms: Parallel to performance and other standards established by the formal organizational structure, the informal groups have their own norms as rules of conduct and a standard of behavior that is expected of all members.

Groups Roles: There is an unwritten assignment within the group as to which task will be done by whom and under what conditions. Some job roles are assigned by the management by matching the job description with the person's qualifications and some other roles develop within the group. For example, some members may informally be technical advisors to others as to how to do the job better and others may act as arbitrators in social problems or other differences that may arise among members.

Group Goals: The goal of the informal group, whether it be profitability that conflicts with the organizational goals or customer service which is in accord, heavily influences productivity. It is necessary to integrate the group goals with the organizational goals for the purpose of improvement and success.

Leadership: The informal leader emerges from the group either because of his personal charisma, his social status or his technical expertise. He is not formally elected but is accepted in the minds and hearts of the workers. These leaders influence the behavior of others and remain leaders as long as they are sincere to the group interests.

Group Cohesiveness: Cohesiveness refers to the degree and strength of interpersonal attraction among members of the group. High degree of cohesion is highly motivating in achieving the group goals. Members help each other and support each other. The degree of cohesiveness depends upon the commonness of the perceived group goal, the size of the group and the ability of the group leader to facilitate cohesion. Group cohesion also has synergetic effects where, together they produce much more by the collective efforts than the sum product of the individual efforts.

Informal groups are powerful instruments in all organizations and sometimes can make a difference between success and failure. A cooperative group makes supervision easier, thus lengthening the effective span of management. The group is also there to make sure that the basic principles of the formal organization are not violated.

For example, if a manager misuses his authority and promotes an unqualified person, the informal group may use its influence in making sure that it does not happen. The informal group also serves as an additional channel of communication to the management about conditions of work when such information may not be available through official channels.

One problem with an informal group is that it is primarily centered towards human elements, that can be highly unpredictable affecting the smooth operations of the organization. Due to rules and procedures being unwritten, they can change from situation to situation. Also the informal group can be considered subversive in nature if their goals conflict with the forma! organizational goals.

In such situations, managers often view them with doubt and suspicion. They tend to see informal groups as potentially harmful to the formal organization. For that reason, some managers seek the support of informal groups and their leaders in order to reduce such a threat. They tend to view such informal groups as valid, stable, and structurally sound and hence show consideration and respect for their existence and their views.

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Types of Groups (Formal and Informal) | Management Study HQ

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From a organizational point of view, there are basically two types of groups. These are formal groups and informal groups. An group is formal when it is purposely designed to accomplish an organizational objective or task. It is created via formal authority for some defined purpose.