Richard L. Daft - Management. 9th ed., 2010

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PART 4 ORGANIZING300

ON THE JOB VIDEO CASE

Scholﬁ eld Honda: Change and

Innovation

Not long ago, the phrase “hybrid SUV” would have

been considered an oxymoron, but almost overnight,

hybrid cars of all shapes and sizes became main-

stream. As gas prices soared and concerns about the

environment deepened, many people were looking

for innovative solutions to energy problems and won-

dering about the cars of the future.

Enter Lee Lindquist, alternative fuels specialist at

Schol eld Honda in Wichita, Kansas. Lindquist loves

technology, is a passionate environmentalist, and has

found the perfect way to make a difference at work.

While researching alternative fuel vehicles for his

upcoming presentation at the local Sierra Club, he

learned Honda had been selling a natural gas vehicle

in New York and California since 1998, where it was

marketed as a way for municipalities and  eet cus-

tomers to address air quality issues. He also discov-

ered that the Honda Civic GX was the greenest

model

currently available for sale in the United States.

Lindquist couldn’t believe Honda’s most innova-

tive car had been on the market for ten years and still

hadn’t been embraced by Honda dealerships or con-

sumers. One challenge of offering the Civic GX to the

public was the lack of natural gas fueling stations and

the high cost of purchasing and installing individual

fueling stations for home use. With any new tech-

nology, a critical mass of early adopters helped lay

groundwork for others. In the case of the Civic GX,

Honda dealerships weren’t adopting or promoting

the new technology, and Lindquist viewed this lack of

entrepreneurship as unacceptable.

Rising fuel prices provided the perfect opportu-

nity to introduce cost-conscious and green-minded

customers to the Civic GX. When Lindquist brought

the Civic GX idea to his boss, owner Roger Schol eld

was skeptical. He had long been promoting the

Honda brand as fuel-ef cient and didn’t want to

confuse customers with the “new” vehicle. Never-

theless, he eventually warmed to the idea and with

Lindquist’s help, he started marketing the car to cor-

porate and government customers.

When the infamous tornado hit Greensburg

in 2007, going green at Schol eld Honda took on

new meaning. Emboldened after top management

implemented his  rst recommendation to stock the

Civic GX, Lindquist saw an amazing chance to pro-

mote the Civic GX and position Schol eld Honda

as the regional leader in green vehicle technology.

Schol eld, a long-time supporter of local communi-

ties, already was planning to make a generous contri-

bution to Greensburg, but he envisioned something

fairly different from his young, determined employee.

However, Lindquist urged Schol eld to donate a

Civic GX and a fueling station to Greensburg Green-

Town, the organization set up to educate the town’s

residents about green building methods and products.

Well aware of the media attention surrounding

Greensburg, Schol eld was open to Lindquist’s idea.

Greensburg residents, along with folks across the

entire region and country, would learn about Honda’s

cutting-edge alternative. Schol eld questioned his

decision to donate the car even as he was driving to

Greensburg to present the expensive gift, but ulti-

mately he knew investing in change was the right

thing to do.

Since the donation, Schol eld’s customers have

shown more interest in alternative fuel vehicles and

recognize the dealership’s contribution to the green

transformation occurring nationwide. Honda U.S.A.

also has applauded Schol eld’s efforts.

Anyone interested in buying a Civic GX today

needs to get in line, because dealerships can’t keep

the cars in stock. While waiting, sip coffee from a

compostable corn-based cup, toss old soda cans from

your back seat into a recycling bin, and grab a free

reusable green shopping bag on your way out. The

dealership might even be giving away small trees

on the day you stop by. Lindquist recognized that

Schol eld Honda’s culture needed to change too, so

he convinced Schol eld to form a “Green Team” that

meets monthly to identify what’s next at this ever-

changing workplace.

Discussion Questions

1. What might explain dealers’ failure to promote the

Civic GX, beyond fueling issues?

How might Schol eld Honda expand on the

changes put into motion by Lindquist?

3. How could the Honda Corporation capitalize on

innovation at the dealership level?

ch10

CHAPTER 10 MANAGING CHANGE AND INNOVATION 301

Organizing

ch10

BIZ FLIX VIDEO CASE

Field of Dreams

Ray Kinsella (Kevin Costner) hears a voice while

working in his Iowa corn eld that says, “If you build

it, he will come.” Ray concludes that “he” is leg-

endary “Shoeless Joe” Jackson (Ray Liotta), a 1919

Chicago White Sox player suspended for rigging

the 1919 World Series. With the support of his wife

Annie (Amy Madigan), Ray jeopardizes his farm by

replacing some corn  elds with a modern baseball

diamond. “Shoeless Joe” soon arrives, followed by

the rest of the suspended players. This charming fan-

tasy  lm, based on W. P. Kinsellas’s novel Shoeless Joe,

shows the rewards of pursuing a dream.

Forces for Change

This scene is part of the “People Will Come” sequence

toward the end of the  lm. By this time in the story,

Ray has met Terrence Mann (James Earl Jones). They

have traveled together from Boston to Minnesota to

 nd A. W. “Moonlight” Graham (Burt Lancaster). At

this point, the three are at Ray’s Iowa farm.

This scene follows Mark’s (Timothy Bus eld)

arrival to discuss the foreclosure of Ray and Annie’s

mortgage. Mark, who is Annie’s brother, cannot see

the players on the  eld. Ray and Annie’s daughter

Karin (Gaby Hoffman) has proposed that people will

come to Iowa City and buy tickets to watch a baseball

game. Mark does not understand her proposal. The

 lm continues to its end.

What to Watch for and Ask Yourself

▪ Who is the target of change in this scene?

▪ What are the forces for change? Are the forces for

change internal or external to the change target?

▪ Does the scene show the role of leadership in

organizational change? If it does, who is the

leader? What does this person do to get desired

change?

Based on H. Thomas Hurt, 1.

Katherine Joseph, and Chester D.

Cook, “Scales for the Measure-

ment of Innovativeness,” Human

Communication Research 4, no. 1

(1977): 58–65, and John E. Ettlie

and Robert D. O’Keefe, “Innova-

tive Attitudes, Values, and Inten-

tions in Organizations,” Journal

of Management Studies 19, no. 2

(1982): 163–182.

Reported in “90 Years in Business,” 2.

The Conference Board Review

(September–October 2006): 30–39.

Mark Landler, “Nokia Pushes to 3.

Regain U.S. Sales in Spite of Apple

and Google, The New York Times,

December 10, 2007.

Martin Fackler, “Electronics Com-4.

pany Aims to Create Break-Out

Products,” The New York Times,

April 25, 2006; and Peter Lewis, “A

Perpetual Crisis Machine,” Fortune

(September 19, 2005): 58–76.

Bruce Nussbaum, with Robert 5.

Berner and Diane Brady, “Get

Creative,” BusinessWeek (August

1, 2005): 60–68; Jena McGregor,

Michael Arndt, Robert Berner, Ian

Rowley, Kenji Hall, Gail Edmondson,

Steve Hamm, Moon Ihlwan, and

Andy Reinhardt, “The World’s Most

Innovative Companies,” Business-

Week (April 24, 2006), http://www.

businessweek.com.

Keith Bracsher, “Newest Export 6.

Out of China: Inﬂ ation Fears,” The

New York Times, April 16, 2004,

http://www. nytimes.com.

Scott Kirsner, “5 Technologies That 7.

Will Change the World,” Fast

Company (September 2003): 93–98;

Peter Grant and Amy Schatz,

“Battle Lines; For Cable Giants,

AT&T Deal Is One More Reason

to Worry,” The Wall Street Journal,

March 7, 2006; Stuart F. Brown,

“The Automaker’s Big-Time Bet

on Fuel Cells,” Fortune (March 30,

1998): 122(B)–122(D); Alex Taylor

III, “Billion-Dollar Bets,” Fortune

(June 27, 2005): 138–154.

Kirsner, “5 Technologies That Will 8.

Change the World.”

David Henry, “Creativity Pays. 9.

Here’s How Much,” BusinessWeek

(April 24, 2006): 76.

Richard L. Daft, “Bureaucratic 10.

vs. Nonbureaucratic Structure in

the Process of Innovation and

Change,” in Perspectives in Orga-

nizational Sociology: Theory and

Research, ed. Samuel B. Bacharach

(Greenwich, CT: JAI Press, 1982),

pp. 129–166.

Charles A. O”Reilly III and 11.

Michael L. Tushman, “The Ambi-

dextrous Organization,” Harvard

Business Review (April 2004):

74–81; M. L. Tushman and C. A.

O’Reilly III, “Building an Ambi-

dextrous Organization: Forming

ENDNOTES

ch10

PART 4 ORGANIZING302

Your Own ‘Skunk Works,’” Health

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April 1999): 20–23.

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Through Innovation: The Case of

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Adapted from Patrick Reinmoeller 14.

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Reported in Jill Jusko, “A Team 33.

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von Stamm,

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Other Firms and Customers:

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CHAPTER 10 MANAGING CHANGE AND INNOVATION 303

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an Idea Factory,” BusinessWeek

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chapter11pt4

Learning Outcomes

Chapter Outline

After studying this chapter, you should be able to:

1. Explain the strategic role of human resource management.

2. Describe federal legislation and societal trends that inﬂ uence

human

resource management.

3. Explain what the changing social contract between organizations and

employees means f

or workers and human resource managers.

4. Show how organizations determine their future stafﬁ

ng needs through

human resource planning.

5. Describe the tools managers use to recruit and select employees.

6. Describe how organizations develop an effective workforce through

training and performance appraisal.

7. Explain how organizations maintain a workforce through the

administr

ation of wages and salaries, beneﬁ ts, and terminations.

Getting the Right People on the Bus

The Str

ategic Role of HRM Is to Drive

Organizational Performance

The Strategic Approach

Building Human Capit

al to Drive

Performance

Globalization

The Impact of Federal Legislation on HRM

New Manager Self-

Test: What Is Your HR

Work Orientation?

The Changing Nature of Careers

The Changing Social Contract

Innovations in HRM

Finding the Right People

Human Resource Planning

Recruiting

Selecting

Managing Talent

Training and Development

erformance Appraisal

Maintaining an Effective Workforce

Compensation

Beneﬁ ts

ermination

307

Controlling

Planning

Environment

Organizing

Leading

Introduction

Managing Human

Resources

GETTING THE RIGHT PEOPLE ON THE BUS

As a new manager, how much emphasis will you give

to getting the right people on your team? How much

emphasis on people is needed? Find out by answering

the following questions based on your expectations and

beliefs for handling the people part of your management

job. Please answer whether each item is Mostly True or

Mostly False for you.

Mostly

True

Mostly

False

1. I will readily ﬁ re someone who

isn’t working out for the interests

of the organization.

2. Selecting the right people for

a winning business team is as

important to me as it is to a win-

ning sports team.

3. I expect to spend 40 percent to

60 percent of my management

time on issues such as recruiting,

developing, and placing people.

4. I will paint a realistic picture of

negative job aspects that will help

scare off the wrong people for the

job.

5. My priority as a manager is ﬁ rst

to hire the right people, second to

put people in the right positions,

and third to then decide strategy

and vision.

6. With the right people on my team,

problems of motivation and super-

vision will largely go away.

7. I expect that hiring the right

people is a lengthy and arduous

process.

8. I view ﬁ ring someone as helping

them ﬁ nd the place where they

belong to ﬁ nd fulﬁ llment.

SCORING AND INTERPRETATION: Most new manag-

ers are shocked at the large amount of time, effort, and

skill required to recruit, place, and retain the right people.

In recent years, the importance of “getting the right

people on the bus” has been described in popular busi-

ness books such as Good to Great and Execution. The right

people can make an organization great; the wrong people

can be catastrophic.

Give yourself one point for each item you marked as

Mostly True. If you scored four or less you may be in for a

shock as a new manager. People issues will take up most

of your time, and if you don’t handle people correctly,

your effectiveness will suffer. You should learn how to get

the right people on the bus, and how to get the wrong

people off the bus. The faster you learn these lessons, the

better new manager you will be. A score of ﬁ ve or more

suggests you have the right understanding and expecta-

tions for becoming a manager and dealing with people on

the bus.

Hiring and keeping quality employees is one of the most urgent concerns for today’s

organizations.

Employees give a company its primary source of competitive advan-

tage, so talent management is a top priority for smart managers. The term human

resource management (HRM) refers to the design and application of formal systems

in an organization to ensure the effective and ef cient use of human talent to accom-

plish organizational goals.

This system includes activities undertaken to attract,

develop, and maintain an effective workforce. Managers have to  nd the right peo-

ple, place them in positions where they can be most effective, and develop them so

they contribute to company success.

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PART 4 ORGANIZING308

Over the past decade, human resource management has shed its old “personnel”

image and gained recognition as a vital player in corporate strategy.

Increasingly,

large corporations are outsourcing routine HR administrative activities, freeing HRM

staff from time-consuming paperwork and enabling them to take on more strategic

responsibilities. Human resources tops Gartner Inc.’s list of most commonly out-

sourced business activities.

All managers need to be skilled in the basics of human resource management.

Flatter organizations often require that managers throughout the organization play

an active role in recruiting and selecting the right employees, developing effective

training programs, or creating appropriate performance appraisal systems. HRM

professionals act to guide and assist line managers in managing human resources to

achieve the organization’s strategic goals.

THE STRATEGIC ROLE OF HRM IS TO DRIVE

ORGANIZATIONAL PERFORMANCE

How a company manages talent may be the single most important factor in sus-

tained competitive success. Today’s best human resources departments not only

support strategic objectives but also actively pursue an ongoing, integrated plan for

furthering the organization’s performance.

Research has found that effective human

resource management has a positive impact on strategic performance, including

higher employee productivity and stronger  nancial results.

The Strategic Approach

The strategic approach to human resource management recognizes three key ele-

ments. First, all managers are involved in human resource management. Second,

employees are viewed as assets. Employees, not buildings and machinery, give a

company its competitive edge. Third, human resource management is a matching

process, integrating the organization’s strategy and goals with the correct approach to

managing human capital.

In companies that take a strategic approach, HR managers

are key players on the executive team and play a pivotal role in driving performance.

At retailer Target, for example, the formal mission of the human resources depart-

ment is to “drive company performance by building a fast, fun, and friendly team

committed to excellence.” To ful ll the mission, HR managers are directly involved

in building a culture that distinguishes Target from other retailers,  nding the right

people to  t the culture, then creating training programs, compensation, and other

mechanisms to develop and retain quality employees.

Some current strategic issues

of particular concern to managers include the following:

▪ Right people to become more competitive on a global basis

▪ Right people for improving quality, innovation, and customer service

▪ Right people to retain during mergers and acquisitions

▪ Right people to apply new information technology for e-business

All of these strategic decisions determine a company’s need for skills and

employees.

Go to the experiential exercise on pages 332–333 that pertains to your potential for

strategic human resource management.

This chapter examines the three primary goals of HRM as illustrated in

Exhibit 11.1. HRM activities and goals do not take place inside a vacuum but within

TakeaMoment

CHAPTER 11 MANAGING HUMAN RESOURCES 309

Organizing

the context of issues and factors affecting the entire organization, such as global-

ization, changing technology, a growing need for rapid innovation, quick shifts in

markets and the external environment, societal trends, government regulations, and

changes in the organization’s culture, structure, strategy, and goals.

The three broad HRM activities outlined in Exhibit 11.1 are to  nd the right peo-

ple, manage talent so people achieve their potential, and maintain the workforce over

the long term.

Achieving these goals requires skills in planning, recruiting, training,

performance appraisal, wage and salary administration, bene t programs, and even

termination.

Building Human Capital

to Drive Performance

Today, more than ever, strategic decisions

are related to human resource consider-

ations. In many companies, especially

those that rely more on employee infor-

mation, creativity, knowledge, and ser-

vice rather than on production machinery,

success depends on the ability to manage

human capital.

Human capital refers to the

economic value of the combined knowl-

edge, experience, skills, and capabilities of

employees.

To build human capital, HRM

develops strategies for  nding the best tal-

ent, enhancing their skills and knowledge

with training programs and opportunities

for personal and professional development,

and providing compensation and bene ts

that support the sharing of knowledge and

appropriately reward people for their con-

tributions to the organization.

EXHIBIT 11.1 Strategic Human Resource Management

Lowe’s 215,000 employees help customers with

remodeling, building, and gardening ideas at its 1,575 stores. They cut lumber, blinds,

pipe, and chains; thread pipes; assemble items; provide computer project design and

landscape garden design; match paint colors; teach how-to clinics; and offer many

other services. Managers know that providing superior customer service depends on

human capital, so they invest in ﬁ nding the best people and helping them develop and

apply their combined knowledge, skills, experience, and talent.

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