Mao Zedong was born to a peasant family on December 26, 1893. He grew up loving classic Chinese literature and culture. During his college years, he became very interested in Marxism, which was a political philosophy and economic practice based upon a materialistic interpretation of society. Marxism is composed of three main beliefs. First, society’s history results from its internal conflicts between social classes and the forces of production, such as technology and labor. Second, in a capitalistic society, the bourgeoisie (upper class) exploit the proletariat (working class). Third, in a capitalist economy, the workers are alienated from society because they do not control their labor.
On July 23, 1921, Zedong attended the first session of the National Congress of the Communist Party of China in Shanghai. After only two years, Zedong was elected as one of the five commissars of the party; his position as a commissar was roughly equal to that of a military commander or a government minister.
On October 1, 1949, the Communist party took power in China and established the People’s Republic of China. Mao Zedong was made the Chairman of the PRC. In 1953, he launched the first Five-Year Plan, in an attempt to end China’s dependence on agriculture and transform China into a world power. This plan did not work, so in May of 1958, Zedong implemented the Great Leap Forward. Zedong hoped to surpass both Great Britain and the United States economically by modernizing China. This program led to a failure in food production and the starvation of many people in China. Mao died in 1976 and Deng Xiaoping took over as the new ruler of China.
Mao was an example of a poor leader. He correctly used his influence to secure a position of leadership, but he did not seek council from the other leaders that are there to support him. By ignoring their advice, he chose a path that only he believed would work, and it failed.
Leadership involves influence, intention, followers, shared purpose, change, and personal responsibility and integrity. The easiest thing for most people is definitely personal responsibility and integrity. I believe in taking responsibility for all of my actions no matter what effect they have on others. That is the way I was brought up, and because of that, I have no problem admitting that I have made a mistake. It is challenging nonetheless to exert influence. If a person is given a position of power, others must obey. They don’t have much of a choice because not doing so can mean termination. People do not have to follow a leader, but they choose to because the leader has influence over them. It could be the way the leader speaks or acts, the belief the leader emanates, etc. Some people are more easily influenced than others. The amount of influence we have depends partly on the personality of the individuals that we are attempting to influence. It’s hard to influence people who have a dominant personality, while it’s much easier to influence the go-with-the-flow type individual.
CBS Poll – 79% believe questionable business practices are widespread.
Less than 33% believe CEOS are honest
Unethical vs. Ethical Leadership:
Arrogant and self-serving
Always promotes self-interest
Concern for the greater good
Honest and straightforward
Strives for fairness
Shifts blame to others
Diminishes others’ dignity
Shows respect for individuals
Neglects follower development
Encourages and develops others
Withholds help and support
Lacks courage to confront unjust acts
Shows courage to stand up for what is right
Acting Like a Moral Leader:
Don’t neglect profit and loss
Must lead by example and encourage others to develop and use moral values in workplace
5 Common Ethical Traps:
False Necessity Trap – convince yourself that no other options exist. You have no choice, but really your just picking the easiest choice
Doctrine-of-Relative-Filth Trap – compare your behavior with someone that is worse.
Rationalization Trap – justify actions with excuses (company hasn’t been far so…)
Self–Deception Trap – convince yourself that a lie isn’t really a lie
Ends–Justify-the-Means Trap – use unethical means to accomplish what you think is a good goal
Tools for Doing the Right Thing:
Is it legal?
Can you see others’ point of view?
Have you considered all alternatives?
Can you talk about this?
How would you feel if your family or friends found out?
How to Act Like a Moral Leader:
Set the example you want others to live by
Drive out fear and eliminate undiscussables
Develop a backbone – show 0 tolerance for ethical violations
Treat everyone with fairness, dignity, and respect.
Do the right thing in both your private and professional life – EVEN WHEN NOBODY IS LOOKING!
Moral Leadership – distinguishing right from wrong and doing right. Seeking the just, honest, and good in the practice of leadership.
Moral Leaders Create Ethical Support Systems:
Support open-door policies that encourage employees to talk without fear of reprisal.
Establish clear code of ethics
Reward ethical conduct
Show 0 tolerance for violations
Protect whistle blowers
Levels of Moral Development:
Preconventional Level – individuals are egocentric, want rewards and want to avoid punishment. Acts in own interest. Has blind obedience to authority.
Conventional Level – will adhere to norms of larger social system. Fulfills duties and obligations of social system. Upholds the law. MOST PEOPLE ARE HERE
Postconventional Level (Principled level) – guided by internalized principles. Leader is a visionary, empowering and committed to serving others. Balances concern for self with concern for others. Acts in an independent manner regardless of others’ expectations.
Courage – ability to step forward through fear. You can reach deep within yourself to stand up for something or make choices that you might be ridiculed for.
Acting IN SPITE of fear.
Push beyond comfort zone
Saying what you think
Fighting for what you believe (as long as its not just for your benefit)
Opposing Unethical Conduct:
Whistle Blowing – employee disclosure of illegal, immoral, or unethical practices in the organization
Finding Personal Courage:
Believe in higher purpose
Draw strength from others
Harness frustration and anger
Role of Followers:
Everyone is a follower at some point
Followers’ influence on leader can enhance the leader or underscore shortcomings
Desirable qualities held by leader are often the same as those held by an effective follower.
Leaders develop effective followers and vice versa.
Critical Thinking – thinking INDEPENDENTLY and being mindful of the effects of your behavior on achieving the organization’s vision.
Uncritical Thinking – failing to consider possibilities beyond what you are told. Accepting the leader’s ideas without thinking. PASSIVE and DEPENDENT. Doesn’t contribute to culture of organization. (9 to 5ers).
Styles of Followers:
Alienated Follower – passive, yet an independent, critical thinker. Can often be very useful because they are usually very bright people. They may have experienced a personal set back and feel that a promise was unfulfilled for them.
Conformist – active participant but does not utilize critical thinking skills.
Pragmatic Survivor – one who can cover all extremes depending on which style fits the situation best. Problem is that your style might not fit the one they want.
Passive Follower – does not exhibit critical thinking, independent thinking, nor active participation.
Effective Follower – both a critical independent thinker and active in the organization. They are advocates of change and team players. Not very confrontational but wont avoid necessary conflict.
Demands on the Effective Follower:
Will to assume responsibility
Will to serve
Will to challenge
Will to help transform
Will to leave
Developing Personal Potential:
Dependent – people expect others to take care of them, blame others.
Independent – people have developed a sense of self-worth and an attitude of self-reliance.
Interdependent – people realize it is better to work cooperatively, one experiences the richness of close interpersonal relationships.
Success with Teams:
Greater innovation (as long as there is diversity)
Higher employee satisfaction
Team – unit of 2 or more people who interact and coordinate their work to accomplish a shared goal or purpose. (size 5-12 is associated with most success and diversity is important!!)
Groups vs. Teams:
Designated, strong leader
Shares / rotates leadership roles
Performance goals set by others
Performance goals set by team
Works within organizational boundaries
Not inhibited by organizational boundaries
Individual work products
Collective work products
Stages of Team Development:
Forming – orientation, breaking the ice and getting people acquainted. High uncertainty! Leaders should facilitate social interchanges
Storming – conflict and disagreement. Good conflict is cognitive and intellectually driven. Bad conflict is affective and personality driven. Leaders should encourage participation and surface differences.
Norming – establishment of order and cohesion. Leaders should help clarify team roles, norms, and values.
Performing – cooperation and problem solving. Leaders should facilitate task accomplishment.
Types of Teams:
Functional Teams (Vertical Teams) – made up of leader and subordinates in formal chain of command.
Cross-Functional Teams – made up of members from different departments. Usually have specific team leader.
Self–Directed Teams – work together without direction of managers. They are member centered.
Interdependence – extent to which team members depend on each other for information, resources, or ideas to accomplish tasks.
Pooled Interdependence – lowest form of team interdependence. Members are relatively independent of one another in completing their work. (Ex: share same machine but use it for different work)
Sequential Interdependence – serial form of interdependence in which the output of 1 member becomes input of another member (ex: assembly line)
Reciprocal Interdependence – highest form of interdependence. Members influence and affect one another in reciprocal fashion. (ex: trauma team)
Team Effectiveness – extent to which a team achieves 4 performance outcomes:
innovation / adaptation – how well team responds to change
efficiency – how well team uses available resources
quality – have minimal defects
employee satisfaction – how happy workers are with benefits.
Team Cohesiveness – extent to which members stick together and remain united in pursuit of common goal.
how often you meet
shared mission / goals
Team Leadership Roles: (doing both generally results in better leadership)
Task SpecialistRole – initiates new ideas, evaluates effectiveness, seeks to clarify tasks and responsibilities, stimulates others, and summarizes the facts.
Socio–Emotional Role – facilitates others’ participation, smoothes conflicts, shows concern for team members’ needs, serves as role model.
Virtual Team – made up of geographically or organizationally dispersed members who share a common purpose and are linked primarily through advanced info technologies.
Global Teams – made up of culturally diverse members who live and work in different countries and coordinate some part of their activities on global basis.
Differences Between Teams:
Type of Team
Face to face
Planning & Strategy:
Planning – identifying and selecting appropriate goals and courses of action for an organization. Details the goals and specifies how managers will attain goals. CANT TAKE ACTION WITHOUT PLANNING ß FATAL
Strategy – cluster of decisions that managers take to help an organization reach its goals.
Mission – board declaration of an organization’s purpose that identifies products and customers, and distinguishes the organization from its competitors.
Vision – ambitious view of the future
Determine Organization’s Mission and Goals – define overriding purpose and goals.
Define who customers are, what needs are being satisfied, and how we satisfy those needs.
Provide organization with sense of direction. Goals must be challenging but realistic with a definite period in which they are to be achieved.
Formulate Strategy – analyze current situation and develop strategies to achieve mission
Implement Strategy – decide how to allocate resources between groups to ensure strategy is achieved.
Levels of Planning:
Corporate Level Plan – top management’s decisions pertaining to organization’s mission, overall strategy, and structure. FRAMEWORK for all other planning
Corporate Level Strategy – plan that indicates in which industries and national markets an organization intends to compete
Business Level Plan – divisional managers’ decisions pertaining to divisions’ long term goals, overall strategy and structure. How business will meet corporate goals.
Business Level Strategy – indicates how a division intends to compete against rivals.
Functional Level Plan – functional managers’ decisions pertaining to the goals that they will pursue to help division attain its business-level goals.
Functional Level Strategy – indicates how a department intends to achieve its goals.
Time Horizons of Plans – intended duration
Long Term – usually 5 + years (Corporate and Business Level)
Intermediate – usually 1-5 years (All)
Short Term – usually less than 1 year (Functional Level)
Most companies have a ROLLING PLANNING CYCLE to amend plans constantly
Types of Plans:
Standing Plans – use in programmed decision situations. Policies are general guidelines, rules are formal and written, standard operating procedures specify an exact series of actions to follow. (ex: ethical plans in an organization)
Single Use Plans – developed for 1 time, non-programmed decisions. Usually very complex and a big deal. (ex: announcing we are putting a man on the moon)
Importance of Planning:
Participation – all managers are involved in setting future goals
Sense of Direction and Purpose – sets goals and strategies for all managers
Coordination – provide all parts of the firm with understanding of how they fit into the whole
Control – specify who is responsible for accomplishing particular goal.
Scenario (Contingency) Planning – generation of many forecasts of future conditions followed by an analysis of how to effectively respond to those conditions. Helps managers to become better at strategic planning. Allows you to see how your plans might work and prepare for all possible outcomes.
Corporate Level Strategies:
Concentration in Single Business – can become a strong competitor, but very risky.
Related Diversification – move into similar market areas to build upon existing competencies. Ex: Pepsi bought Frito Lay
–Unrelated Diversification – entry into industries unrelated to current business. Ex: GE bought NBC
Vertical Integration – allows an organization to create value by producing its own inputs or distributing its own product.
Backward Vertical Integration – occurs when a firm seeks to reduce its input costs by producing its own inputs. Ex: McDonalds purchasing potato farm to make their fries
Forward Vertical Integration – occurs when a firm distributes its own products to lower distribution costs and ensure quality of service. Ex: Pepsi owns Taco Bell and distributes there
Low Cost Strategy – driving total costs down below total costs of rivals. Reducing waste, selling for less and being profitable. Ex: Dell Computers
Differentiation – offering products different from those of competitors. Customers must value the differentiation. Ex: Rolex watches
4 Leader Frames of Reference:
Sees organization as a machine, economics, plans
Sees organization as family, belonging clan
Sees organization as jungle, power, schemes
Sees organization as a theatre, spiritual, meaning, dreams
Goals, systems, efficiency, formal authority
People, support, empowerment
Resource allocation, negotiation, coalition building
Vision, culture & values, inspiration
Rigidity and tyranny
Lack of content or substance
Power plays for purpose or self-interest
Black Hat of Charismatic Leaders – might use charisma to do harm.
Power- ability of 1 person or department to influence other people to bring about desired outcome
Influence – effect a person’s actions have on the attitudes, values, beliefs, or actions of others.
Types of Power:
Legitimate – authority a manager has by virtue of his/her position in hierarchy
Reward – ability to give or withhold tangible rewards and intangible rewards
Coercive – ability of manager to punish others. May require documentation for dismissals.
Expert – based on special knowledge, skills, and expertise
Referent – more informal. Comes from co-worker respect and personal characteristics (such as being a person of your word).
Position Power – includes Legitimate, Reward, and Coercive
Personal Power – includes Expert and Referent
Responses to Use of Power:
Position Power – appropriate use results in compliance. Excessive use results in resistance.
Personal Power – results in commitment
Low Dependency In Organizations – when leader has control over unimportant, widely available resources that have substitutes.
High Dependency In Organizations – when leader has control over important, scarce resources that have no substitutes.
Strategic Contingencies That Cause Increased Leader Power:
Control over Information
Coping with Uncertainty
Politics – activities to acquire, develop, and use power and other resources to obtain desired future outcomes when there is uncertainty or disagreement about choices.
7 Principles for Asserting Leader Influence:
Use rational persuasion
Make people like you
Rely on the rule of reciprocity (Win / Win)
Develop allies (quid pro quo – “this for that”)
Ask for what you want
Remember the principle of scarcity (people want more of what they cant have…so share)
Extend authority with expertise and credibility (be knowledgeable, credible, trustworthy)
Guidelines for Ethical Action:
Is action consistent with organization’s goals
Does action respect rights of individuals
Does action meet standards of fairness and equity
Would you wish others to behave the same way to you
8 Stage Model of Planned Organizational Change:
Establish Sense of Urgency – crises may thaw resistance
Establish a Coalition – gain alliance of different groups
Develop a Vision and Strategy – leader must guide
Communicate Vision and Strategy – must communication about change 10 times more than you thought necessary
Empower Employees – revise procedures and do things differently
Generate Short–Term Wins – celebrate and praise
Consolidate Gains – create greater change and tackle bigger problems
Institutionalize Change into Organizational Culture – what your doing becomes expected and establishes direction for future.
Creativity – generation of new ideas that result in improved efficiency and effectiveness of the organization.
Idea Incubator – safe harbor where ideas from employees throughout the organization can be developed without interference from company bureaucracy or politics.
Corporate Entrepreneurship – internal entrepreneurial spirit that includes values of exploration, experimentation, and risk taking.
Idea Champions – people who passionately believe in a new idea and actively work to overcome obstacles and resistance.
Characteristics of Innovative Organizations:
Within company communication
Characteristics of Creative Individuals:
Commitment – Self Confidence – Loves people
Focused approach – Nonconformity
Interdependence – Curiosity
Persistence – Open-mindedness
Energy – Conceptual fluency
Enjoys variety – Emotionally expressive
Personal Compact – reciprocal obligations and commitments that define the relationship between employees and the organization.
Why People Resist Change:
Self Interest (fear of personal lose)
Uncertainty (fear of unknown)
Different Assessment of Situation and Goals
Communication and Training
Participation and Involvement
Downsizing – intentionally reducing the size of a company’s workforce
Examples of Companies:
Seattle’s Famous Pike Place Fish Market:
John Yokoyama – Market Owner
Changed from strong Theory X to strong Theory Y.
At first his management style was one of “you did what I would you, or else.” He was a very tyrant boss.
Now he believes you need to stay out of the way and allow workers to use their creativity to contribute to the organization.
Waterfront in Seattle. Opened in 1907. By 1940s more than 2/3rds of stalls were owned by Japanese Americans.
Executive Order 9066 – forced all Japanese Americans into internment camps after Pearl Harbor during WWII.
To be on Pike’s team, you have to be committed whole-heartedly to the purpose. John does not treat people like numbers, rather he knows all of their names and has a close relationship with them.
Each worker has the ability to “coach” others and empower them to create a result.
Working for the Best: The Container Store:
Kip Tindell – President / CEO
Garrett Boone – Chairman / Founder
Voted # 1 and # 2 Twice on the Top 100 Companies to Work For.
15% – 20% turnover with employees. Overall, this type of business usually has 90% turnover.
They want the best employees so they are willing to pay for them (pay 50% – 150% higher than industry average)
The main goal of company is to EXCEED customer expectations and they go out of their way to achieve this.
Part time employees are treated like full time employees.
Company embodies Dwight Eisenhower’s quote “get people to do what you want them to do because they want to do it.”
Company creates family-like atmosphere where employees are recognized with letters, calls, etc.
Cross training and job rotation create a very Theory Y environment with empowered workers.
Milgram Studies Video:
Stanley Milgram – Harvard Graduate
Study done in 1962 at Yale University.
Told participants the study looked at effects of punishment on learning.
Teacher and learner involved. Teacher supposed to give learner electric shock for wrong answers. NO SHOCK WAS EVER REALLY USED
Authority figure becomes key!!! People gave more and more shocks especially when they could pass responsibility off on the study administrator.
It was predicted that 10 out of 100 subjects would go all the way.
70% of subjects carried through with punishment and delivered maximum shock, EVEN IF THEY SEEMED RELUCTANT.
Study can’t be done today because it is considered deceptive.
The article “Make Your Leadership Case for B-School Admission” by Francesca Di Meglio cites leadership as a key factor in education. The following is his advice about entering an MBA program. According to Meglio, the business schools with the top MBA programs consider leadership “the key to getting your foot in the door.” She writes that in order to determine if you are leader material, most admissions committees will be examining your application in search of certain characteristics, such as, “charisma, communicating well, handling difficult situations with grace, and working well in teams.” Meglio lists six ways you can use to demonstrate leadership potential on a business school application.
(1) Recruit at Your Undergraduate Program – According to Meglio, most employers turn to their employees to find new talent for hiring. You may have a hard time getting leadership opportunities at work, but you can take initiative by finding new talent at your undergraduate program. She says to go back to your old school and recruit some good workers; not only does this allow you to improve your network and become a mentor, but it also keeps you in the loop for hiring.
(2) Take Charge at Home – You should think broadly about leadership. Your examples can be family related things, like leading the family business, handling finances, or organizing the care of a sick family member. You don’t want to brag, but you can still mention how you helped. Then, you just have to explain how these skills will help you at graduate school and eventually in the workplace.
(3) Solve a Problem – Meglio gives an example of a student who became student government president at his university and reunited trafficked children from Nepal with their parents. This is an amazing example, but you can solve smaller problems and still demonstrate leadership potential. Consider your group projects. Meglio states that many people discount team projects unless they are the official leader of the group. Other members of the team usually resolve some kind of issue along the way. You need to say what role you played in the group and how you contributed to the group.
(4) Launch an Organization or Business – This could mean actually launching a business, or just starting something like a club or a charitable work group. This reveals your work ethic, and also shows that you are willing to “take action and execute a plan.” Linda Meehan, executive director for admissions at Columbia Business School, says that it really doesn’t even matter if the business tanked, as long as you can say how you started it and what you learned from it.
(5) Be a Risk Taker – This means showing that you have an open-mind and are willing to take risks. Kathryn Belleza, associate director of MBA admissions at Wharton, gives the example of an applicant from London who “jumped at the chance” to work for his company in Beijing. This may have been out of his comfort zone, but he took a chance, and was successful.
(6) Project Your Future Leadership Achievements – The admissions committees at the top business schools want to know what you can bring to their community and how you can benefit the school. One of the best ways to demonstrate your leadership potential is to tell the admissions people exactly how you would be involved; this includes programs that you would like to start, campus organizations you would like to join, and talents you would like to share with the members of the community.
A mission statement states the purpose of the organization and serves as a guide to decision making for all levels of management.
A charismatic leader can be characterized by having four key elements: a vision, high expectations of any followers, the willingness to take personal risks to achieve the vision, the exhibition of extraordinary behavior.
A transactional leader has an implied “contract” between him and any followers. He highlights the rules and regulations of the tasks to be completed.
There are four requirements to be considered a transformational leader. A transformational leader promotes a vision for his followers. He communicates high performance expectations. He gives personal attention to followers. Lastly, his focus must be on transforming the followers.
A leader exhibits four traits: extroversion, conscientiousness, openness, and emotional intelligence. Extroversion means being sociable, gregarious, and assertive. Conscientiousness means being dependable, responsible, persistent, and organized. Openness means being imaginative and creative. Emotional intelligence is the ability to be self-aware, self-managing, self-motivating, empathetic, and have social skills.
Production-oriented leaders tend to emphasize the technical aspects of the job; their main concern is in accomplishing their group’s task, and the group members are a means to an end.
Employee-oriented leaders can be described as emphasizing interpersonal relations; they take a personal interest in the employees and accept the individual differences among members.
Robert House’s Path-Goal Theory was developed from the Ohio State studies and the expectancy theory of motivation. The theory states that leaders provide followers with information, support, and resources to help them achieve their goals. Leaders help clarify the “path” to the worker’s goals. Leaders can display multiple leadership types. There are four types of leaders under this theory. Directive leaders focus on the work to be done. Supportive leaders focus on the well-being of the worker. Participative leaders consult with employees in decision-making. Achievement-Oriented leaders set challenging goals.
There are three types of internal recruitment methods: promoting from within, referrals, and walk-ins. Advantages of internal recruitment are that the employees know the company, and therefore, may require less training, the employees are probably more motivated, and the employees’ strengths and weaknesses are probably known.
Economies of scale can be defined as the cost advantages that a business obtains after an expansion. Staples Inc. experienced economies of scale in the area of marketing; this means that Staples was able to spread the cost of advertising over a greater range of output in media markets.
When Jeanne Lewis was put in charge of the marketing department, she was relatively new to Staples. Many people had worked in that department for years, and now, Lewis was in charge of it. The employees were not very receptive to her because she was promoted over them even though she was new. This problem is a type of interactionist conflict. Specifically, the problem Lewis is having is a relationship conflict. It’s based on interpersonal relationships between her and her new subordinates; this type of conflict is dysfunctional, meaning that it negatively impacts the performance of the employees.
How can this be solved?
Lewis needs to speak to her subordinates and explain that she is trying her best to learn the ins and outs of the organization and settle in. Then, in an attempt to resolve the conflict, Lewis could use smoothing, a conflict-management technique; this involves playing down the differences between her and her subordinates while emphasizing the common interests between her and her subordinates. Another possible way to resolve the conflict would be to create superordinate goals, which are shared goals that cannot be attained without cooperation between Lewis and her subordinates.
Lewis wants to understand the problems and opportunities the marketing department has, and then motivate the employees to fix them. Motivation is combination of processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal – specifically, an organizational goal. There are a plethora of motivational theories that can be applied to the problems that Jeanne Lewis is experiencing with her subordinates, but we feel that ___ Locke’s Goal-Setting Theory would be the most effective. Locke’s theory says that specific and difficult goals, with self-generated feedback, lead to higher performance. Setting difficult goals theoretically should increase the focus, efficiency, effectiveness, and persistence of the employee. The relationship between goals and performance depends on goal commitment, task characteristics, and the culture of the organization. If the goal is made public within the organization, the employee is more likely to work harder to attain it. The task characteristics should be simple and well-learned. The culture of the organization is also important; this theory should work well for Staples because it works best on organizations in North America because of the cultural aspect.
Another type of interactionist conflict that is evident at Staples is a process conflict. This is a conflict over how work gets done. There are many conflict negotiation methods that can be used to solve a simple problem like this. Two possible solutions are authoritative command and compromising. Authoritative command is when a superior demands that a subordinate performs the job a certain way; this should be used by Lewis as a secondary option. Her best choice is probably compromising, which is developing a mutually beneficial solution through cooperation. This method may work better than authoritative command because Lewis’s subordinates will see that she is willing to work with them instead of ordering them around.
A “top-down” approach is one where the manager makes the decision.
A “bottom-up” approach is one where the employees work together to arrive at a decision. Staples needs a more bottom-up approach because the heads of each department know more about what’s going on within the organization than the CEO does.
A task conflict is evident within Staples Direct. This means that the goals are not aligned with the work that employees are performing.
The popular theme park was established in California in 1955. Disneyland was considered the “mother of all amusement parks.” In the 1980s, Disneyland was extremely successful in the United States. When asked about the success of the business, a Disneyland executive said that Disneyland had a global reach from a marketing perspective because of the intrinsic power of the idea. Something that is intrinsic is something that is essential. The executive is saying that Disneyland is something that is essential to the lives of every person, not just people in the United States; this creates gives Disneyland a global reach.
After the executives of Disneyland decided on Tokyo as a market, they had to decide on how to enter the market. They chose to export Disneyland instead of creating a joint venture or investing directly. Exporting involves entering a foreign market by selling goods produced in the company’s home country, often with little modification. The executives of Disneyland probably made the right choice by exporting the one in Tokyo because in order to run it, they would have to have a good understanding of the culture. By exporting Disneyland, Disneyland’s ownership made a specified commission on everything, and did not need to be physically present in Tokyo.
Tokyo is the 12th most highly populated city in the world with more than 8 million people. This is the main reason why Disneyland ownership chose Tokyo as the first foreign target. Another reason Tokyo was chosen was because of the attractiveness of an amusement park. Tokyo does not have as many fun attractions as the United States. By creating a Disneyland in Tokyo, the foreigners could get a taste of American fun without leaving their country.
When the 2nd foreign one was created, the ownership chose France over Spain. This is most likely because France has a higher population than Spain and the government of France is more flexible with foreign business. The French government allowed the United States executives to create a joint venture and take a 49% stake in the ownership of the foreign one.
Disneyland entered Tokyo through exporting. This allowed the ownership to earn commissions on the profits from the amusement park in Tokyo. This method allowed the ownership, which is in the United States, to remain there. Also, having a company from Tokyo run the amusement park in Tokyo makes more sense because that company will better understand the culture of the area.
Disneyland entered France through a joint venture deal with a European company. This was probably the best option for France because France is similar to the United States. The main languages used in the park would be English and French. It would be much easier to understand the culture of France than it would be to understand the culture of Tokyo.
Standardization in this case is keeping Tokyo the same as the Disneyland in the United States. This allowed the ownership to position the Tokyo Disneyland as a “foreign vacation.”
The one in France adapted a lot. The problem was that the French visitors of the park wanted it to be just like the United States. Originally, many of the restaurants in the amusement park were sit-down restaurants like those in France, but it was not very popular. Also, the merchandise stores had higher class items that could not be found in an amusement park in the United States. Also, the ownership added more attractions involving French history to generate more interest. There may have been too many changes because the French want to experience a little bit of American life instead of the same stuff they already have in France.
I wouldn’t expect Japan and France to have very different opinions because it is foreign to both of them. The people of both countries want the “American Experience”, so adapting to their cultures a lot is probably not the best idea.
The success in Tokyo can be attributed to the use of exportation. The company that runs the Tokyo version understood that their people would want an “American Experience”, so they kept Disneyland just like it is in the United States.
The one in Paris had many problems because of their adaptation. The French people don’t want to experience the same things they do everyday, so sit-down restaurants and French history are not things that should be in the amusement park. The park should be the same as the one in the United States.
Good to Great: Why Some Companies Make the Leap…and Others Don’t
In his renowned book, Good to Great: Why Some Companies Make the Leap…and Other Don’t, influential management consultant Jim Collins undertakes the difficult task of identifying the specific factors that separate merely good companies from the truly great ones. Collins’s opening chapter begins by outlining the metrics by which the subjective term “great” is operationally defined. Next, he identifies several companies that fit the criteria to help explain the transition factors that enable the leap from “good to great” in compelling detail. With no shortage of content to choose from, we have selected the following five points from the book to be the most important.
The Hedgehog Concept – Collins spends a chapter outlining this seemingly paradoxical principle that oftentimes is a simple yet overlooked approach that leads businesses to greatness. He elaborates by pointing to an ancient Greek metaphor of a fox and a hedgehog. The fox is a cunning, clever hunter who possesses a dynamic skill set, yet despite his impressive traits, is unable to catch the hedgehog, whose sole means of defense is his very simple, yet incredibly effective skill of rolling up into a ball. Collins contends that the businesses that intrinsically do one thing better than anyone else, as opposed to doing many things well but nothing exceptional, are the ones able to make the leap from Good to Great.
Level 5 Leadership–Great leadership is a precursor of great success. While this seems blindingly obvious, Collins spends a chapter looking into the common characteristics of top-level management at the companies he has deemed “great.” He found that all of these leaders are at the top of a five level hierarchy that ranges from merely supervision to strategic executive decision-making. He also noted several commonalities among the Level 5 personality type; such as they are often intensely determined, yet profoundly humble. They are not driven as much by personal ego or individual financial gain as they are by long term stability and growth of the company. Collins also points out that the popular trend of bringing in a “celebrity CEO” to turn around a failing or stagnating company actually has a detrimental long term affect on the company.
First Who, Then What–Collins begins the third chapter of his book by explaining his hypothesis on “great” company strategy. He assumed when he began his research that companies would set a new goal and vision and thusly aligned personnel behind that new strategy. What he found was quite the opposite. Collins uses a bus analogy to convey this point- he says you must have the right people on the bus (and the wrong ones off it) before you figure out where to drive it. By focusing first on who, rather than what, companies leave themselves in a much better position to adapt to changing environments. If people get on the bus because of where is it going, what happens miles down the road if the bus needs to change course? If people board the bus because of who else is on it instead of its destination, changing directions will be much easier. Collins also argues that if you have the right people on the bus from the beginning, the problem of motivation dissipates. He concludes his analogy by saying that even if a bus with the wrong passengers does end up in the right direction, it still won’t be a great company: “great vision without great people is irrelevant.” We need to go from good to great.
Confront the Brutal Facts–One of the key factors in making the leap from good to great is a company’s ability to identify and properly analyze information from within the company and the greater industry. The proficiency with which a company can keep up with changing market conditions and consumer preferences is directly correlated to its growth and success. Collins uses the extended example of A&P and Kroger in the American retail grocery industry to show how these are make-or-break factors for a company. Kroger recognized the changing consumer demands for a more modern grocery experience in the post WWII era, and took steps to meet these demands even though it meant a total overhaul of the company’s business model. A&P meanwhile, remained stagnant and became obsolete. Collins created a four step practice to ensure the recognition of emerging trends and consumer preferences, 1) Lead with questions, not answers 2) Engage in dialogue and debate, not coercion 3) Conduct autopsies, without blame 4) Build red flag mechanisms that turn information into information that cannot be ignored.
Technology Accelerators–Technology plays a crucial role in many other areas of contemporary business. The final important point made by Jim Collins in Good to Great is to not rely too heavily upon technology to solve core business problems. Collins contends that the use of technology is by no means a “cure all” for modern business, but rather a peripheral tool that, when used properly, can help facilitate key business functions. Collins goes on to refer to technology as an “enabler” of change, not the cause of it. Lastly, he advocates that businesses should only invest substantial resources into enhancing technological capacity if they are fundamentally necessary to their “hedgehog concepts.”
Though all of these points are relevant attributes of high performing companies, the overarching problem with this book is whether or not these factors can actually transform a business. The reader can’t help but get the impression that Jim Collins in his attempts to be analytical oftentimes is trying to fit a square peg in a round hole. What we disagree with most about Good to Great are the oversimplification of Collin’s assessments and the conservative picture that he paints of long-standing unilateral large corporations as the sole model for business culture.
If anyone were to pick up this book as a “how to” approach to better their company, they’d be sorely disappointed. The prototype that Collins considers for the “great” company is so contrived with obvious practices, that if you don’t already have great people, great leaders, a clear competitive advantage or a flawless mission statement then the “great” status is out of reach. But even when treating this book objectively, as a crude analysis of successful companies over the last 35 years, the ambiguous language that defines the key corporate personality traits is reminiscent of reading a horoscope where broad sweeping assertions can apply to anyone. A “Level-5” leader is determined but humble; the right people are rightly talented and should thusly be placed in the right positions. The hedgehog is passionate and steady, the flywheel, sturdy and progressive. Not only is this book wrought with platitudes, it also is plagued by confusing paradoxes. In chapter 4, Confronting the Brutal Facts means debating without coercion, troubleshooting without blame, and questions without answers. Chapter 6, A Culture of Discipline is no better, where individuals are entrepreneurial within their group, or personally empowered without ego. Collins consistently throws around terms to give impact to statements that have no one interpretation and even more so, little to no direction on tangible means for improvement.
The other complaint we had with this book is that it was written in a vacuum and has little relevance to a new generation where companies can transition from good to great overnight. Jim Collins seriously contributes to his lack of current affairs with a management technique that’s stuck in the 1980’s. In this author’s mind, corporations even without the right people or right management could still be at least “good” – an antiquated notion in 2011, even though this book was written in 2001. The 21st century “living company” has to constantly adapt to changing market demands where extended periods of growth and sustainability just don’t fit into the business model. The fact that two of the chosen companies for this book’s analysis, Fannie Mae and Circuit City don’t exist anymore proves, to borrow one of Collin’s ridiculous analogies, that eventually the fox finds a way to eat hedgehog.
For a business professional, specifically a marketer, Good to Great does contain a couple important take-away messages implicit in developing a long lasting brand. It should come as little surprise that present-day consumers can be transient in their immediate purchasing tendencies and respond heavily to trends. However, it would appear as though great companies develop long-standing relationships with their customers and create loyalty regardless of fads. In fabricating this relationship, businesses recognize that customers are not usually drawn to an item that doesn’t resonate with their lifestyle and therefore they will undergo a tireless process to understand and develop the customer’s needs. It’s this type of long-term engagement that’s talked about in Collin’s previous book, Built to Last (and chapter 9), which makes it seem impossible for a corporation to become marketing geniuses overnight. Establishing brand loyalty with customers requires a lot of initial research and assessment that might also include some failures and back-to-the-drawing board moments.
In order to establish this forward momentum flywheel, Collins is keen to suggest that business requires the right strategy of putting the pieces into to play before starting the game. Too often in business the requisite time and effort is not invested in the first place, when simply the notion of a good idea is suppose to guide the team. As business leaders of the future, I think Collins is urging us to surround ourselves with good company; after all, nobody wants to take a long bus ride sitting next to somebody they can’t stand, no matter how competent they may be. The totality of why some people are good leaders and why some companies surpass others is still largely a mystery to business researchers. In fact, if one were to diligently watch the news, it would appear as if we are actually relatively bad at business and still learning. Collins is speaking in generalities because he has to – the management world is obtuse at times and difficult to fully understand. In the end, the main contributions of this book are friendly reminders that everyone can appreciate; be good at what you’re good at, stay focused, work hard, and try to remain in good spirits. Work isn’t a life sentence; if you find that you don’t like it anymore, just hop off the bus.
I’d like to start with a brief definition of recognition. Recognition Professional International (RPI) is a non-profit organization dedicated to the understanding and promotion of effective employee recognition. RPI defines recognition as, “an after-the-fact display of appreciation or acknowledgement of an individual’s or team’s desired behavior, effort or business result that supports the organization’s goals and values.” So, in other words, recognition is acknowledging others for their contributions.
Maslow’s Hierarchy of Needs
Now that you have a good definition of recognition, I’d like to introduce you to 1 of the theories behind it – Abraham Maslow’s Hierarchy of Needs Theory.
Maslow suggested that people are motivated to fulfill their needs in a specific order, beginning with the most basic. Each level of needs must be satisfied before a person’s motivation shifts to the next level. As people move up the pyramid, their needs become more and more complex. The first 4 levels are known as “deficiency needs.” This means that when people haven’t satisfied their needs, they feel uneasy. The top level is “growth needs,” meaning that when people reach that level, they are motivated by their own personal growth.
Looking at the base of the pyramid, the 1st level is physiological needs, meaning that they’re essential to our survival. It includes bodily functions and things like food and water. If these needs aren’t met, you can die. If they are met, you move on to the 2nd level – safety.
Since the 1st level of needs has been met, you are no longer motivated by them. Your new motivation is to maintain your personal safety, the safety of your family, your home, etc. Not satisfying these needs cause a great deal of stress. Before I move on to the 3rd level of needs, I want to share an example situation with you.
You’re country is being ruled by a dictator. You haven’t eaten in days and you just ran out of water. The only place that still has food and water is the military base outside of your neighborhood. Do you try to sneak in to get it? Maybe you do, maybe you don’t, but as the hours go by your motivation to sneak in continues to increase. According to Maslow, at some point, you will sacrifice your need of safety in order to prevent yourself from starving to death.
The 3rd level is social needs. This includes things like the desire for love and belonging, which are often met through friendships, family, and intimacy. Lack of fulfillment can result in loneliness, depression or social anxiety.
The 4th level is the reason that I’m covering this theory. Reaching this level triggers the desire to be accepted and valued by others. People need social recognition, personal achievement, and respect by others, whether it be in their personal or professional lives. Lack of fulfillment can result in low self-esteem or an inferiority complex.
The final level is the desire to fulfill one’s full potential by becoming everything that one is capable of becoming. People who reach this level are self-aware, concerned with their own personal growth and are less concerned with the opinions of others.
What Managers Think Employees Want
This is what most managers think employees wants. While you look at this, I want you to remember Maslow’s hierarchy. You’ll notice that each one of the items falls fits into 1 of the levels of the pyramid. Good wages for example was the number 1 response – That fits in the 2nd level of the pyramid because it contributes to your safety. Unfortunately, it costs you money to satisfy this employee need.
What Employees Say They Want
What employees say they want is a little bit different. Look at the top 3 items. Employees want to be appreciated for the work they do, they want to feel “in” on things, and they want sympathetic help on personal problems. Those items are all related to recognition, and best of all, they’re free!
Herzberg’s Motivation-Hygiene Theory
The 2nd major theory behind recognition is Frederick Herzberg’s Motivation-Hygiene Theory. In the mid-1950s, Herzberg conducted studies on employee satisfaction to try to better understand employee attitudes and motivation, and he created this diagram.
Motivation factors lead to job satisfaction and higher levels of motivation. These factors are mainly intrinsic. This includes things like achievement and recognition.
Hygiene factors help to prevent job dissatisfaction. These factors are mainly extrinsic. This includes things like salary and working conditions.
If we apply this theory to the workplace, managers have to maximize the motivation factors, while keeping the hygiene factors in check. 3 ways to maximize the motivation factors are:
Job Extension – Combining the work of several jobs
Job Rotation – Rotate workers between a select number of jobs over time
Job Enrichment – Diversify the work and add more responsibility
So, why should you use recognition? Well, I’ve found some interesting stats on the effects of recognition in the workplace that I’d like to share with you.
In a recent poll by the Gallup Organization, 80% of surveyed employees stated that praise and recognition motivate them to do a better job at work. Scotiabank is an example of this.
Scotiabank is a leading Canadian financial organization. Originally, it had employed an incentive program that was made up of many small paper-based programs offered inconsistently by both region and business function. The program only rewarded improvements in particular business measures that had been faltering, like sales. On top of that, the program only rewarded managers; the rest of the employees, who really are the face of the bank were completely ignored by the program. In the late 90s, Scotiabank placed a strong focus on personalizing and improving their customer service by shifting the focus of the incentive program to recognition instead of rewards. Then, management revamped the program by bringing it online, integrating it across all job levels and business functions and recognizing and rewarding relationship-building behaviors. Soon after its inception, Scotiabank noticed a high correlation between high levels of participation in the recognition program and both customer satisfaction and financial performance. While the program cannot be proven as the only contributor to these positive effects, it still shows a clear connection between the use of recognition and the positive effects it had.
The next quote is from SHRM. “79% of those who quit their jobs cite lack of appreciation as the main reason.”
Avis Budget Group is an example of this. Avis is a popular vehicle rental company. One of their main concerns was high employee turnover. Every year, the company would run an employee survey to see what they could improve upon. Every single time, the results indicated that there was a lack of recognition of good employee performance, so management finally decided to do something about it. They designed a recognition program that was based on peer-nomination and connected to the values of the company. During the first three years of the program, Avis averaged only 200 nominations out of more than 32,000 employees. But in the 4th year of the program, after taking it online to make the application process easier, Avis accepted over 3,600 nominations. Management credits the recognition program with improving employee engagement and reducing company-wide voluntary turnover by 3.8%, saving millions of dollars. The key to the program is that all of the recognition efforts are based on Avis’ core values, which reinforces them among the employees.
US Marine Corps
The next quote is from a workplace motivation IQ study done in 2007. “The biggest statistical driver of workplace satisfaction for workers between the ages of 21-30 is whether their boss recognizes and praises their accomplishments.” The perfect example of this is the U.S. Marine Corps.
The US Marine Corps is my favorite example of recognition in action because it shows the power of positive reinforcement as a driver of culture. U.S. Marine training might be strenuous and even abusive, but that initiation process is not the culture. The stress of Marine boot camp serves as much to identifyMarines as to train them. Once established as a Marine, an individual experiences a profound recognition on a daily basis – reinforced by the mottos, the uniform, the unit cohesion, and the intense group loyalty. Marines display recognition for their service and sacrifice on their uniforms in the form of medals, ribbons, and rank insignia. All these inspire pride and internal reward. Marine culture is intensely about recognition. Watch two retired Marines talking – twenty years after their service ended, they’ll still call each other ‘Marine.’”
The last quote I have is from SHRM. “Of the 601 employees surveyed, 44% stated that management’s recognition of employee job performance was a very important aspect of job satisfaction.”
The importance of recognition can be shown through Delta Airlines.Over the years, they’ve had many different formal and informal recognition and reward programs with varying degrees of success. However, until the creation of My Delta Rewards, none of them were aligned with Delta’s business strategy. My Delta Rewards recognizes employees in 4 areas of performance – cost savings, customer service, operational excellence, and revenue growth. The program includes length of service awards, personalized retirement awards, on-the-spot recognition for extraordinary efforts, and a Chairman’s Club, which recognizes the top 102 employees for determination and dedication. Delta measures the program’s ROI through focus groups, surveys, and feedback. So far, the program boasts a 564% ROI, resulting from improved employee performance.
In addition to the examples I provided, there is a lot of research supporting the use of recognition as well. For over 30 years, Gallup Research has been designing and using surveys to measure levels of employee engagement and to determine the key factors that lead to increased employee engagement and its effect on business value. Over these 30 years, Gallup has established 12 metrics that highly correlate to positive employee engagement. One of them is frequent recognition.
The survey items are statements or questions that employees can respond to on a scale from “strongly agree” to “strongly disagree”. One particular phrase that can be found in the survey is, “In the last seven days, I have received recognition or praise for doing good work.”
The survey data highlighted recognition and praise as the two key drivers of employee engagement and showed that the most effective recognition programs used formal and informal recognition frequently enough to make it part of the organizational culture.
In addition to its own research, Gallup performed statistical analysis on a variety of independent studies and found 54% of workers are “not engaged”; 17% of those workers are “actively disengaged.” Gallup estimates that this costs the US economy $300 billion per year.
Gallup Studies Continued
Their research also showed that organizations with higher levels of engagement outperformed those with lower levels engagement by the percentages shown below:
Productivity – 50% increase
Employee Turnover –13% decrease
Profit – 44% increase
Customer Satisfaction – 50% increase
Towers Perrin Global Workforce Study
This chart is the result of a global study done by Towers Perrin. They surveyed 90,000 workers to determine their levels of engagement and its effect on the financial performance of their companies. Companies with high employee engagement enjoyed a 19% increase in operating income and a 28% increase in earnings per share. In comparison, companies with low employee engagement saw a decrease in operating income and an 11% drop in earnings per share.
Corporate Leadership Council Survey
In 2004, CLC conducted a survey of more than 50,000 staff, managers, and executives from 59 organizations in 10 different industries and spread across 27 countries. The survey was created to determine the “key levers” that had the greatest impact on increasing employee engagement. Out of 300 levers, the survey ranked those related to recognition at the top for the purpose of increasing employee effort and maintaining a better than average retention rate.
We hope you enjoyed our post tonight! Stay tuned for more from us. If you want to reach out, feel free to contact us here.