Mullins L.J. Management and organisational behaviour, Seventh edition
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Mr Smith says AIG was not just
documenting its financial controls
but also its operational controls, such
as the workings of the credit risk
committee or the market risk com-
mittee. Such staff are responsible, for
example, for checking that any new
investment does not run counter to
internal guidelines on how much can
be put in a certain class of asset or
country. All those decisions have to
be rigorously documented.
AIG, says Mr Smith, is large
enough and experienced enough to
have absorbed all the work itself,
without outside help. But many
companies are turning to the large
professional services firms or to any
number of financial training and
risk consultancies.
Everett Gibbs, managing director
at Protiviti, a consultant, said man-
agement’s first and possibly hardest
task is communicating to its staff
what is expected of them. ‘They first
have to explain the legislation and
then move quickly to personalise it
for the company.’
Harry You, chief financial officer
at Accenture, one of the world’s
largest consultancies, also high-
lights training as one of the main
tasks. He says the company has
instituted a web-based programme
for about 2,500 top people. ‘These
issues do not just touch a core group
of finance people, it’s everyone who
could touch the numbers,’ he says.
Mr Gibbs says many executives
were initially reluctant and com-
plained about the cost, but that has
changed. ‘If there was any denial, it
was six months ago. Companies are
now working on how to get this in
place as quickly as possible.’
Just as AIG has done, Protiviti
says the first step is for companies
to make a list of every risk they
have and all the processes they have
for overseeing that risk. Accenture
asked KPMG to look at its controls
before Sarbanes-Oxley was passed.
Companies then have to docu-
ment all the main processes, all the
controls over them, assess their
effectiveness, check that they work
and write it all down.
At the same time of course, com-
panies are working through other
changes in operation and gover-
nance required by Sarbanes-Oxley,
much of which needs help from
lawyers, consultants, auditors and
other governance experts.
Medium-sized companies in par-
ticular are starting to report soaring
costs. Audit fees for public companies
with market capitalisations of about
$1bn rose by 35 per cent over the last
year, according to a recent survey of
450 groups by Foley & Lardner, a law
firm, and KRC Research. Director
compensation was up 10 per cent,
and insurance for directors and exec-
utives has at least doubled in many
cases as companies pay out more in
private litigation cases over profit
warnings, falling share prices and
financial restatements.
(Reproduced with permission from the Financial
Times Limited, © Financial Times 23 June 2003)
BUSINESS PRESS
1045
Questions
Discuss critically the extent to
which you
1 Defend the use of strong
internal financial controls for
public companies.
2 See staff training programmes
as an essential feature of an
effective control system.
3 Recognise the importance of
behavioural factors in control
systems.
Relevance to other chapters
Chapter 19 Human Resource Management
Chapter 21 Organisational Control and Power
Asda: the listening store
Susanna Voyle
ARTICLE 26
FT
For Asda, the supermarket chain
that tops the UK table, being voted
a great employer is nothing new.
The Leeds-based group, owned by
Wal-Mart, the big US discount com-
pany, regularly crops up in the lists
of the most popular companies to
work for.
This latest boost to Asda’s
employment credentials could not
come at a better time, locked as it is
in a five-way bid battle for control of
Safeway, its smaller rival.
Victory would add thousands more
people to Asda’s current staff, which
already stands at about 140,000.
The process still has a long way
to go . . . and, with thousands of jobs
at stake, Asda’s reputation as a good
group to work for is important.
Interestingly, Wal-Mart, which
bought Asda for £6.7bn in July
1999, does not enjoy similar status
in its home market.
According to David Smith, Asda’s
director for people, success enjoyed
by the group in repeatedly winning
employment plaudits has been hard
won. And he says Asda guards its
reputation fiercely – evolving its
methods to keep staff happy.
‘You have to keep changing,’ says
Mr Smith. ‘This success that we
have around people has not
occurred overnight. We have been
working on this for 10 years.’
According to Mr Smith, Asda’s
success with people comes down to a
set of ‘very simple mechanics’. He
has little time for companies with
grandiose mission statements that
fail to live up to their words.
He says the key to Asda’s success
is communication – all the mechan-
ics have been put in place to that
end. And it is not just about getting
the right messages filtered down
from the top of the organisation –
but also about ensuring feedback is
properly listened to and communi-
cated back to the top.
Such communication is particu-
larly important in retailing, where
the vast majority of staff are either
on the shop floor dealing with cus-
tomers, or behind the scenes in
areas such as the supply chain
where they can feel divorced from
central operations.
But the message comes from the
top in all ways. Asda has a famously
flat structure with little hierarchy. At
the Leeds headquarters all offices
are open plan; everyone eats in the
same canteen; everyone, even the top
bosses, are on first-name terms and
wear name badges. Closed meetings
in small rooms are avoided. Near the
executive desks there is a meeting
room – but the high table does not
have chairs around it on the basis
that if people have to stand up, the
meetings will be far shorter.
This culture is fed down to the
stores. All shop staff start each shift
with a ‘huddle’ – standing together
to be briefed on key elements of
group performance and that of the
individual store.
Famously, staff also recite
together the Asda chant – some-
thing based on the daily routine at
Wal-Mart, long before the group
ventured into the UK to buy Asda.
To receive feedback from staff,
Asda has instituted a number of
measures. Each store has a ‘listen-
ing group’. Senior managers go
regularly to stores and see the
groups of between six and 12 staff.
They are told they are not allowed
to talk – they have to listen. Asda
then measures the effectiveness of
the groups with a listening survey.
Stores are also given a certain
level of autonomy. Each is given a
maintenance budget of £5,000 a
year that can be spent in whichever
way staff choose. ‘If they want to put
newspapers in the staff room every
day they can do it,’ says Mr Smith.
‘Or they might want to buy a televi-
sion that people can watch on their
breaks. It is totally up to them.’
So what are the perks of working
for Asda? All staff get a 10 per cent
discount on shopping there. But
other benefits range from a law
club, which offers legal protection
for 10p a week, special treatment
for older staff such as ‘grandparents’
leave’ and plenty of recognition with
Asda ‘Oscars’ for successful staff.
For many, another perk has been
the annual trip to Bentonville for the
Wal-Mart shareholders’ meeting.
So with Asda people visiting the
US, is Bentonville interested in the
plaudits its UK arm gets for
employment matters? Mr Smith
says it is. ‘The people in the US are
very interested in what we have
been doing for years,’ he says.
‘Lessons are learnt both ways.’
(Reproduced with permission from the Financial
Times Limited, © Financial Times 27 March 2003)
1046
BUSINESS PRESS
Questions
Discuss critically the extent to
which you:
1 Believe that organisational
culture contributes to Asda
being voted a great employer.
2 Agree that you have to keep
changing in order to be
successful with people.
Relevance to other chapters
Chapter 7 Managerial Behaviour and Effectiveness
Chapter 18 Job Satisfaction and Work Performance
Chapter 22 Organisation Development (Culture, Conflict and
Change)
According to a study by the
Chartered Institute of Personnel
Development, 30 per cent of the dif-
ference in performance between
companies can be attributed to dif-
ferences in culture. That compares
with just 5 per cent that can be
attributed to differences in strategy.
Other studies have repeatedly found
that as many as 75 per cent of
mergers and acquisitions fail prima-
rily because of cultural clashes.
The idea that organisational cul-
ture or personality exists, and
profoundly affects performance, raises
no eyebrows these days. But can you
go one step further and improve per-
formance by analysing corporate
personality in the same way as you
might analyse that of an individual?
That is the question raised by
Cognosis, a management consul-
tancy that has adapted the
Myers-Briggs Type Indicator, a per-
sonality test widely used in the
recruitment and personnel develop-
ment of individuals, and is now
applying it to organisations. ‘It
seems bizarre that, given the criti-
cal importance of culture to
corporate performance, its manage-
ment isn’t taken more seriously,’
says Richard Brown, managing
partner of Cognosis.
Using the averaged responses to
a 15-minute paper containing 30
questions, given to as few as a dozen
executives, Cognosis claims to be
able to identify four organisational
character types. The organisation is
then profiled on a number of charac-
teristics such as its approach to
problem solving, how it deals with
change, innovation and internal
communications and how it will
react to stress. ‘The resulting
insights can be used to allow us to
make fairly detailed recommenda-
tions about a range of development
needs,’ says Mr Brown.
While no type is better than any
other, some organisational character
types are better suited to the mar-
kets in which they compete and
each character type has its own par-
ticular development needs, he says.
So drinks company Allied Domecq
is a pragmatic, ‘fixer’ organisation, he
says. Fixers are action-oriented,
resourceful and realistic but tend to
value action over strategy. As a con-
sequence they reorganise constantly
and achieve inconsistent results.
‘The fixer organisation needs to
stop and think. It needs to broaden
its perspective, look further into the
future and articulate its long-term
goals. It needs to introduce some
structure into its planning and some
discipline into its performance man-
agement. It also needs to connect
with and articulate its values,’ says
Mr Brown.
Cognosis’ approach has met a
mixed reception among organisa-
tional psychologists and academics.
The idea of a simple way of identify-
ing profound truths about a
company sounds attractive. But it
also raises suspicions that Cognosis
may be selling ‘snake oil’.
That is certainly the concern of
Angela Baron, an organisational psy-
chologist who advises the Chartered
Institute of Personnel Development.
‘l agree that corporations have indi-
vidual cultures but I am not sure I
would describe it as a personality.
Myers Briggs is a useful tool for deal-
ing with individuals but it could be
enormously dangerous to use it in a
way it wasn’t designed for,’ she says.
Others are concerned that the
Cognosis approach may be too glib.
‘You can’t just flash a questionnaire
to understand a culture. You have to
immerse yourself in it and get under
the skin. This may be a useful way
into complex organisational issues
but I wonder whether these are the
most appropriate dimensions to
assess corporate culture. I suspect
there are better tools available than
this,’ says Nigel Nicholson, professor
of organisational behaviour at
London Business School.
Nevertheless, the Open University,
which has been remodelling itself to
deal with changes in the distance
learning market, says its insights
have been invaluable. ‘We have been
engaged in a major change pro-
gramme. We used Cognosis’ approach
to culture mapping to look more
deeply inside our organisation, identi-
fying the behaviour and attitude
changes needed to improve our cus-
tomer focus and service. It provided
new insights into the underlying
character of our organisation, and its
constituent parts, and identified spe-
cific areas for change,’ says Professor
Geoff Peters, pro-vice-chancellor for
strategy and planning.
Sports and leisure conglomerate
The Pentland Group is also sold on
the idea. ‘We plan to use it to under-
stand our own culture in reference
to the culture of any takeover
target. Think of it as cultural due
diligence,’ says Tim Hockings, corpo-
rate development director.
(Reproduced with permission from the Financial
Times Limited, © Financial Times 19 June 2003)
BUSINESS PRESS
1047
Organisations, too, can be put on the couch
Alex Benady
ARTICLE 27
FT
Questions
Discuss critically the extent to
which you:
1 Believe organisational culture
profoundly affects
performance.
2 Support the idea of
organisational personality and
the approach of Cognosis.
3 Have your own chosen method
to assess corporate culture.
Relevance to other chapters
Chapter 9 Individual differences
Chapter 22 Organisation Development (Culture, Conflict and Change)
Chapter 23 Management Development and Organisational
Effectiveness
It is perhaps appropriate that
Novartis, one of the world’s biggest
pharmaceutical companies, chose a
name derived from the Latin novae
artes, meaning ‘new skills’, when it
was created in 1996 by the merger
of the two Swiss companies Ciba
and Sandoz.
Daniel Vasella, chief executive, has
put his weight behind a programme
of management development that few
other companies can match.
In December 2003 the manage-
ment development department
became one of just four departments
or corporate universities to be
awarded the Clip (Corporate
Learning Improvement Process) by
the European Foundation for
Management Development (EFMD).
Frank Waltmann, head of learning
at Novartis, eschews the term corpo-
rate university. ‘It’s not about getting
a degree,’ he says. ‘It’s about your own
development, about acting better.’
The courses are heavily sup-
ported by top management, with Mr
Vasella lecturing in several of them.
The development function is
financed through a Novartis founda-
tion rather than from operating
profits. With the company reporting
a net income in 2003 of more than
$5bn, that might seem academic,
but the structure ensures stable
programmes, Mr Waltmann says.
Although he does not disclose
spending on management develop-
ment, it is clear that he can pay for
the best: the three business schools
he uses most frequently are
Harvard, Stanford and Insead. And
the number of managers who attend
is substantial. Of the 80,000
employees worldwide at Novartis,
10 per cent are at management
level. The Novartis philosophy is
that management development
should be closely integrated with
the human resource policy and busi-
ness strategy of the company.
The Novartis pay system means
managers are rewarded for their
performance, so programmes have
to help them perform and develop
their employees.
Aligning programmes with busi-
ness strategy means programmes are
constantly under review. This year Mr
Waltmann’s team is developing an
innovation leadership programme.
There are no short cuts in design-
ing such a programme. It will involve
60-70 interviews with senior man-
agers and potential participants. Then
20-25 business schools, companies and
consultants will be interviewed before
a partner is chosen.
Novartis followed the same process
several years ago when developing
two marketing programmes at a time
when the pharmaceuticals industry
was undergoing rapid change, selling
more over-the-counter drugs and
entering consumer marketing.
The marketing excellence (Mex)
and marketing awareness pro-
grammes are just the tip of the
iceberg. The middle and senior level
managers who study on Mex can go
back to their regions and present a
‘mini Mex’ to their managers, cas-
cading the knowledge down through
the company. There are also web
broadcasts every three months from
the headquarters in Basel to the
regions on the latest marketing the-
ories and practice.
The programmes are delivered to
three levels of management: 70 per
cent of the 8,000 managers are first
time managers, managing projects;
20 per cent are middle managers,
managing first level managers; and
10 per cent are senior management.
The programmes are split into
four groups. The two marketing pro-
grammes fall into the external focus
group, while there are two in the
innovation category. There are four
leadership programmes in the
people category, the most senior of
which is taught in conjunction with
professors at Harvard.
Harvard faculty also teach in the
finance courses. Some 10 confiden-
tial cases, looking at internal
financing at Novartis, were devel-
oped for these programmes.
A human resources course,
taught in conjunction with Stanford,
is for middle and senior managers.
The aim is to ensure HR leaders can
be accepted as business leaders, Mr
Waltmann says.
The courses are held at more than
40 venues worldwide. These include
business school campuses or more
remote locations – Mr Waltmann’s
team has hosted programmes in
Cape Cod and the Swiss Alps.
The marketing courses are gen-
erally held in New York because, Mr
Waltmann says, that is where inno-
vation in marketing is taking place.
With thousands of managers
attending courses each year, he can
tailor location to programme – a
luxury that probably makes most
heads of learning green with envy.
(Reproduced with permission from the Financial
Times Limited, © Financial Times 22 March 2004)
1048
BUSINESS PRESS
Swiss group at top of learning tree
Della Bradshaw
ARTICLE 28
FT
Questions
Discuss critically the extent to
which you:
1 Believe top management
should be lecturing in
management development
courses.
2 Agree with a pay system that
means managers are rewarded
according to their performance.
Relevance to other chapters
Chapter 8 The Nature of Leadership
Chapter 23 Management Development and Organisational
Effectiveness
The expanding definition of corpo-
rate learning and development –
which at many organisations now
includes knowledge management,
performance support and change
management consulting – dominates
new research into the strategies of
corporate universities.
The research by Accenture
Learning, the learning services
provider for the business consul-
tancy, was conducted primarily for
clients but is also relevant to
providers of services to corporate
learning departments.
In particular, business schools –
many of which sell management edu-
cation to corporate universities –
should be aware their corporate clients
are becoming more sophisticated
customers, demanding programmes
closely tailored to pressing business
challenges.
Changing definitions are impor-
tant because the corporate training
at many companies is being
extended to customers, suppliers,
distributors, dealers and external
outside investors. And, in some
cases, this is being seen as a way to
influence product development.
‘More learning departments want
to be on the top line – not directly sell-
ing more products but identifying new
products and services,’ says Jeanne
Meister, vice-president of market
development at Accenture Learning.
The idea is that, by engaging
closely with customers via training
programmes, new products and serv-
ices can be more quickly identified.
‘The exciting issue for a chief
learning officer is how to re-engi-
neer their department to help with
product development – that’s really
virgin territory for enterprise-wide
learning departments.’
As well as highlighting the grow-
ing importance of educating external
partners, the Accenture research,
conducted over the past year, has
found that:
■ The two biggest challenges facing
learning and development profes-
sionals are measuring learning
effectiveness and communicating
the impact of learning on the
bottom line.
■ Leadership development is top of
the list of priorities for learning
and development units.
■ Technology is being used in two
main areas: in the integration of
technology-based learning into
standard learning management
systems and in experimenting
with cutting-edge technologies to
provide better delivery methods.
■ More companies are outsourcing
learning and development and
are considering comprehensive
outsourcing packages. Companies
are looking to create customised
degree programmes that address
the specific skills needed by high-
potential managers.
■ Corporate learning organisations
are beginning to use standard
business improvement processes
to report on their continuous
professional development and
learning activities.
■ The scope of a corporate univer-
sity is expanding to include such
functions as knowledge manage-
ment and performance support.
■ Heads of learning are increasingly
reporting outside the human
resources department to senior
and board-level executives.
The changing role of heads of learn-
ing within the corporate structure is
some indication of the increasingly
strategic nature of corporate educa-
tion, with the rise of the chief
learning officer (CLO) similar to
that of the chief information officer
a decade ago.
And while the education function
once reported into HR in about 90
per cent of companies, the Accenture
research finds that today the figure
is 52 per cent. ‘This department is
gaining in stature,’ says Ms Meister.
‘Organisations recognise that [the
learning unit] can have an impact
on the business.
‘We see a growth in the role of
number of companies looking for a
CLO – and it’s more than a title.
‘Those that are seeking out new
CLOs are doing so because they
want to hold one person accountable
for learning – the design, develop-
ment and results.’
When it comes to the results,
measurement remains a challenge.
However, Accenture believes that
more corporate universities within
publicly traded firms will link the
investment in learning to hard busi-
ness results and that this data will
be included in annual reports. It cites
the example of Avaya University
(AU), the learning unit of the US-
based enterprise communications
equipment and services supplier.
AU recently developed the Avaya
University Annual Report, modelled
on the company’s annual report.
The AU report focuses on: improv-
ing efficiencies (time to proficiency
was cut by 60 per cent for technical
training associated with a big product
launch); strengthening new products
(a shift from 77 per cent instructor-
led training to 81 per cent e-learning
in 2003 improved time to competency
for new product training); promoting
revenue growth through revenue-
BUSINESS PRESS
1049
The rise and rise of the corporate learning officer
Sarah Murray
ARTICLE 29
FT
generation skills, such as a certifica-
tion programme for sales personnel
and business partners.
Accenture finds that chief learning
officers seeking partners in academia
often want upfront consulting on the
objectives and results of business
school programmes. Also important is
that university faculty understand
corporate needs and technology that
integrates with the company’s infra-
structure and offers e-learning
support. ‘Companies are really in the
driving seat,’ says Ms Meister.
(Reproduced with permission from FT,com 22 March
2004, © Sarah Murray)
1050
BUSINESS PRESS
Questions
Discuss critically the extent to
which you:
1 Accept that changing definitions
of corporate learning and
development are important.
2 Agree that measurement of
effectiveness is one of the
biggest challenges facing
learning and development
professionals.
Relevance to other chapters
Chapter 10 The Nature of Learning
Chapter 17 Technology and Organisations
Chapter 23 Management Development and Organisational
Effectiveness
360° feedback (ch. 19, p. 765)
An appraisal and feedback regarding an individual
from different groups within the work situation
that may include peers, subordinates, bosses and
possibly customers.
Accountability (ch. 21, p. 850)
This is the ultimate responsibility which managers
cannot delegate. While managers may delegate
authority, they remain accountable for the deci-
sions and actions of their subordinates.
Achievement-oriented leadership (ch. 8, p. 299)
Involves setting challenging goals for subordinates,
seeking improvement in their performance and
showing confidence in subordinates’ ability to per-
form well.
Action-centred leadership (ch. 8, p. 288)
A theory on leadership which focuses on what
leaders do. It states that the effectiveness of a
leader is dependent upon meeting three areas of
need within the work group: the need to achieve
the common task, the need for team maintenance,
and the individual needs of group members.
Action learning (ch. 23, p. 951)
An approach to management development which
involves a small self-selecting team undertaking a
practical, real-life and organisational-based project.
The emphasis is on learning by doing with advice
and support from tutors and other course members.
Actor–network analysis (ANA) (ch. 17, p. 668)
Networks which bring together a range of human
and non-human actants. The relationship between
technological and social intermediaries such as lit-
erary inscriptions, technical artefacts, skills of
people and money.
Adoption phase (ch. 17, p. 672)
A range of choices relating to the introduction of
new technology into organisations consisting of
initiation; progression/feasibility; investment deci-
sion; and planning and systems design.
Agency theory (ch. 5,p. 167)
A business is seen as existing principally for the
shareholders and its actions judged mainly on the
criterion of maximising their interests.
Agenda-setting (ch.6, p. 209)
A constant activity of managers involving a set of
items, or series of agendas relating to aims and
objectives, plans, strategies, ideas, decisions to be
made and priorities of action in order to bring
about desired end-results.
Alienation (ch. 18, p. 702)
Refers to the detachment of the person from his or
her work.
Anthropology (ch. 2, p. 92)
The study of the cultural system, i.e. human
behaviour as a whole and the science of mankind.
Assessment centre (ch. 20, p. 811)
Provides an in-depth assessment of a group of
broadly similar candidates, and aims to gauge the
attributes and competencies required for a particu-
lar type of job.
Associative organisations (ch. 4, p. 122)
Organisations that are formed for members with a
common interest and are not necessarily related to
the activities of the workplace.
Attitudes (ch. 9, p. 362)
Attitudes can be defined as providing a state of
‘readiness’ or tendency to respond in a particular
way. They are learned through life and are embod-
ied within our socialisation process.
Attribution theory (ch. 11, p. 455)
The way in which individuals make sense of other
people’s behaviour through attributing characteris-
tics to them by judging their behaviour and
intentions on past knowledge and in comparison
with other people they know.
Authoritarian style of leadership (ch. 8, p. 291)
Where the focus of power is with the manager. The
manager alone exercises decision-making and
authority for determining policy, procedures, the
allocation of work and has control of rewards or
punishments.
Authority (ch. 21, p. 850)
The right of subordinates to take action or make
decisions that the manager would otherwise have
done.
GLOSSARY
Automating technology (ch. 17, p. 665)
Replacement of the actions of the human body by
the machine.
Behavioural control (ch. 21, p. 837)
A form of control based on direct personal supervi-
sion which is responsive to the particular needs of
the tasks, the abilities of the manager and the
norms of the organisation.
Behavioural science (ch. 2, p. 29)
A collective term for the grouping of social sciences
concerned with the study of people’s behaviour. The
term is often used in a more narrow and specific
way in relating to problems of organisations and
management in the work environment.
Behaviourism (ch. 10, p. 403)
A school of psychology developed out of research
studies into learning which is interested in the
study of behaviour and those actions which could
be observed, measured and controlled.
Benchmarking (ch. 23, p. 976)
An organisation’s assessment of the performance
and practices of other organisations and competi-
tors in an effort to analyse and compare its own
performance.
Brainstorming (ch. 14, p. 570)
Where a group adopts a ‘freewheeling’ attitude
aimed at generating as many ideas as possible. The
focus is on freedom of expression and the quantity
of ideas rather than quality.
Bureaucracy (ch. 3, p 74)
A form of structure found in many large-scale
organisations. Bureaucracy is based on specialisa-
tion of tasks, hierarchy of authority and
decision-making, systems of rules and regulations
and an impersonal orientation from officials.
Bureaucratic control (ch. 21, p. 841)
An approach to control which is based on the speci-
fication of how members should behave and carry
out their work in an effort to predict the behaviour
through formal procedures and job descriptions.
Bureaucratic orientation (ch. 2, p. 33)
An individual’s orientation to work in which he or
she regards it as a central life issue. There is a sense
of obligation to the work of the organisation.
Business ethics (ch. 5, p. 168)
An example of applied ethics which seeks to
explore the implications of general ethics to the
conduct of business.
Business process re-engineering (BPR) (ch. 23, p. 968)
Concerned with the total restructuring of an
organisation which involves a radical redesign of
business processes to achieve dramatic improve-
ments in organisational performance.
Centralised network (ch. 14, p. 560)
A network of communication where a link person
is at the centre of the network and acts as the focus
of activities and information flows and is the co-
ordinator of group tasks.
Chain of command (ch. 15, p. 611)
The number of different levels in the structure of the
organisation, the chain of hierarchical command.
Charismatic organisation (ch. 4, p. 121)
An organisation in which authority is legitimised
by belief in the personal qualities of the leader and
their strength of personality and inspiration.
Classical approach to management (ch. 3, p. 67)
The organisation is thought of in terms of its pur-
pose and formal structure and this approach aims
to identify how methods of working can improve
productivity. Emphasis is placed on the planning
of work, the technical requirements of the organi-
sation, principles of management and the
assumption of rational and logical behaviour.
Classical conditioning (ch. 10, p. 403)
A theory on learning developed by Pavlov, using
dogs, who found that instinctive reflexes could be
‘conditioned’ to respond to a new situation and
new stimulus.
Coercive power (ch. 8, p306, ch. 21, p. 844)
Based on fear and the subordinate’s perception
that the leader has the ability to punish or bring
about undesirable outcomes for those who do not
comply with the directives (e.g. withholding pro-
motion or privileges).
Cognitive theories of learning (ch. 10, p. 409)
Theories of learning that identify how and why
people learn, taking individual factors into consider-
ation, and not simply the behaviour demonstrated
through the learning process.
Community (institutional) level (ch. 15, p. 599)
The level within an organisation that is concerned
with broad objectives and the work of the organi-
sation as a whole.
Competency-based approach (ch. 20, p. 815)
The development of a list of abilities and compe-
tencies necessary to perform successfully a given
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1053
job, and against which the applicant’s performance
can be assessed.
Competencies-based HRM (ch. 19, p. 748)
An approach to HRM based on a clear notion of
required competencies for future success in new
individual and team roles. Discrimination of good
from poor performance by means of critical obser-
vance or measurement of the real strengths and
weaknesses of people, and their contribution to
the organisation.
Conceptual ability (ch. 6, p. 212)
The ability to view the complexities of the opera-
tions of the organisation as a whole, including
environmental influences, and the ability to make
decisions.
Conflict (ch. 22, p. 904)
Conflict is present where there is an incompatibility
of goals arising from opposing behaviours at the
individual, group or organisational level. Particularly,
conflict is behaviour intended to obstruct the
achievement of some other person’s goals.
Constructive behaviour (ch. 12, p. 475)
A positive reaction to the blockage of a desired
goal through problem-solving or compromise.
Content theories of motivation (ch. 12, p. 480)
These theories attempt to explain those specific
things which actually motivate the individual at
work and are concerned with identifying people’s
needs, the strength of those needs and the goals
they pursue in order to satisfy those needs.
Contingency approach (ch. 3, p. 84)
An extension of the systems approach to manage-
ment that implies that the structure of an
organisation and its success are dependent upon
the nature of tasks which are undertaken and the
nature of environmental influences. There is,
therefore, no one best way to structure or manage
organisations, rather it must be dependent upon
the contingencies of the situation.
Continuing professional development (ch. 23,
p. 953)
The process of planned, continuing development
of individuals throughout their career.
Control (ch. 21, p. 832)
Within an organisation control is primarily a
process for motivating and inspiring people to per-
form organisational activities and monitoring
those activities to ensure that they will further the
organisation’s goals.
Corporate social responsibility (ch. 5, p. 167)
This concept gives rise to how a company should
conduct itself within society, and different views
on what a business is for and how it should act.
Corporate strategy (ch. 5, p. 157)
Corporate strategy formalises the objectives and
policy of an organisation, serves to describe its
sense of purpose together with its direction and
scope over the long term.
Creativity (ch. 10, p. 415)
The application of imaginative thought which
may lead to new ways of seeing things and result
in innovative solutions to a problem or the initia-
tion of change.
Cultural control (ch. 21, p. 841)
An approach to control which is based on the
acceptance and willing compliance with the
requirements of management, for example, through
strong professional identification and acceptance of
the values and beliefs of the organisation.
Decentralisation (ch. 15, p. 608)
Where specific delegation is given to sub-units or
groups within an organisation such that they
enjoy a measure of autonomy or independence.
Decentralised network (ch. 14, p. 560)
A network of communication where there is no
link person at the centre of the network but com-
munication takes place freely between all members
of the network.
Decision-making approach (ch. 3, p. 85)
An approach to management that focuses on man-
agerial decision-making and how organisations
process and use information in making decisions.
Delegation (ch. 21, p. 850)
The process of entrusting authority and responsi-
bility to others throughout the various levels of
the organisation, and the creation of a special
manager–subordinate relationship.
Democratic style of leadership (ch. 8, p. 291)
Where the focus of power is more with the group
as a whole than with the manager. Leadership
functions are shared with members of the group
and the manager is more part of a team.
Directive leadership (ch. 8, p. 299)
Involves letting subordinates know exactly what is
expected of them and giving specific directions.
Displaced aggression (ch. 12, p. 476)
When aggression is displaced towards some other
person or object than that which is perceived as
the source of frustration, i.e. a ‘scapegoat’ is found
for the outlet of frustration.
Diversity (ch.9, p. 336)
Visible and non-visible differences which will
include sex, age, background, race, disability, per-
sonality and workstyle.
E-business (ch.1, p. 18, ch. 5, p. 160)
An organisation which connects critical business
systems directly to their customers, employees,
partners and suppliers via intranets, extranets and
over the Web.
Economic organisations (ch. 4, p. 122)
Organisations that have an economic, commercial
and profit-making focus.
E-learning (ch. 19, p. 761)
Learning via communications technology.
Electronic panopticon (ch. 17, p. 665)
Use of information technology to monitor and
record the work of employees.
Element functions (ch. 15, p. 604)
Activities within an organisation which are not
directed towards specific and definable ends but
are supportive of the task functions and an intrin-
sic part of the management process.
Employment relations (ch. 19, p. 771)
Concerned with the relationships between the
policies and practices of the organisation and its
staff and the behaviour of work groups.
Empowerment (ch. 18, p723, ch. 21, p. 860)
Where employees are allowed greater freedom,
autonomy and self-control over their work, and
the responsibility for decision-making.
Equity theory (ch. 12, p. 496)
A theory of motivation which focuses on people’s
feelings of how fairly they have been treated in
comparison with the treatment received by others.
Ethics (ch. 5, p. 166)
The study of morality – practices and activities that
are considered to be importantly right and wrong,
together with the rules that govern those activities
and the values to which those activities relate.
Expectancy theory (ch. 12, p. 490)
A theory of motivation based on the idea that
people prefer certain outcomes from their behav-
iour over others. Motivation is a function of the
relationship between effort, level of performance
and rewards related to performance.
Expert power (ch. 8, p. 306)
Based on the subordinate’s perception of the leader
as someone who is competent and who has some
special knowledge or expertise in a given area. This
power is based on credibility and clear evidence of
knowledge or expertise.
Explicit knowledge (ch. 10, p. 396)
Knowledge which is easily communicated, quanti-
fied and systematic.
External environment (ch. 4, p. 126, ch. 6, p. 206)
The external factors outside of the organisation
that can influence and affect the performance of it,
the major environmental factors being political,
technical, economic and social.
Extrinsic motivation (ch. 12, p. 472)
Related to tangible rewards such as salary, promo-
tion, working conditions and fringe benefits. These
tangible rewards are often determined at the
organisational level and may be outside the con-
trol of individual managers.
Fixation (ch. 12, p. 476)
When an individual is frustrated but persists in a
form of behaviour which has no adaptive value
and actions are continued which have no positive
results.
Flat hierarchical structure (ch. 15, p. 612)
An organisation that has broad spans of control
and few levels of authority.
Flexible working arrangements (ch. 18, p. 724)
Flexibility on patterns of work organisation and
the workforce, including part-time work, annual-
hours contracts and flexitime.
Formal goals (ch. 5, p. 147)
Goals of an organisation set out in broad terms as
the purpose of the organisation.
Formal group (ch. 13, p. 526)
Formal groups are created to achieve specific organi-
sational objectives and are concerned with the
co-ordination of work activities. Group members
have defined roles and the nature of tasks to be
undertaken is a predominant feature of the group.
Formal organisation (ch. 4, p. 116)
A planned co-ordination of the activities of a
number of people for the achievement of some
common, explicit purpose or goal, through the
division of labour and function, and through a
hierarchy of authority and responsibility.
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GLOSSARY