Week5 assignment

Resources
Read/review the following resources for this activity:

Textbook: Chapter 11

Textbook: Integrative Case 8 Costco Join The Club (back of book)

( ): MGT404 Presentation Chapter 11 (supplementary resource in attached)

Introduction

Case studies are used to foster discussion of concepts from the chapters and to illustrate practices that sometimes go beyond the concepts within a chapter. Use your experiences and opinions to develop firm thoughts regarding the case.

Activity Instructions

Integrative Case 8 – Write an analysis of Case 8. This should include your thoughts and/or experiences that support your view of the case.

1. Describe the culture at Costco.

2. How does Costco motivate it employees?

3. What environmental issues does Costco face?

4. How is Costco a socially responsible company?

Writing Requirements (APA format)

5-6 pages (approx. 300 words per page), not including title page or references page
1-inch margins
Double spaced
12-point Times New Roman font
Title page with topic and name of student

C
h

a
p

te
r

Innova&on and Change

Organiza(on Theory and Design
Twel%h Edi+on
Richard L. Da%

The Strategic Role of Change
•  Organiza+ons must run fast to keep up with
changes taking place all around them

•  Today’s organiza+ons must keep themselves
open to con+nuous innova+on to survive

•  Three types of change:
– Episodic change
– Con+nuous change
– Disrup+ve change

•  Change has become the norm today

Stages of Disrup+ve Innova+on

Strategic Types of Innova+on and
Change

Elements for Successful Change

•  Organiza5onal change is the adop+on of a new
idea or behavior by an organiza+on

•  Organiza5onal innova5on is the adop+on of an
idea or behavior that is new to the organiza+on’s
industry, market, or general environment

•  Change process within organiza+ons comes from
innova+on and new ideas regardless of +ming

•  Successful change includes ideas and crea+vity,
need, decision to adopt, implementa+on, and
resources

5
©2017+ Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Successful Change Elements

Technology Change

•  Technology is a key driver of organiza+onal
change

•  Change is easily embraced by organiza+ons
with empowered employees

•  Innova+ve organiza+ons are flexible and free-
flowing without rigid work rules

•  Mechanis+c structures s+fle innova+on and
focus on rules and regula+ons

Ambidextrous Organiza+on

Incorporates structures and management
processes that are appropriate for innova+on

Techniques for Encouraging
Technology Change

•  Switching Structures – create an organic
structure

•  Crea5ve Departments – department for
innova+on

•  Venture Teams – a small company within the
organiza+on

•  Corporate Entrepreneurship – promote
entrepreneurial spirit

•  Bo@om-up Approach – useful ideas come
from people and daily work

New Products and Services
•  The failure rate for new food products is 70-80%
•  Producing products that fail is part of business
•  Reasons for success:

– Innova+ng companies understand customers
– Innova+ng companies successfully use
technology

– Top management supports innova+on

•  Horizontal Coordina5on Model:
– Specializa+on
– Boundary Spanning
– Horizontal Coordina+on

New Product Success Rates

Horizontal Coordina+on
for Innova+on

Open Innova+on and Crowdsourcing

•  Open Innova5on- extending the search for
and commercializa+on of new products
beyond the boundaries of the organiza+on
and the industry

•  Crowdsourcing- solici+ng ideas, services, and
informa+on from online volunteers rather
than from tradi+onal employees

Achieving Compe++ve Advantage:
The Need for Speed

•  The rapid development of new products and
services can be a major strategic weapon

•  New product development is associated with
lower development costs and greater success

•  Firms can address shi%ing customer demands

Strategy and Structure Change
•  Organiza+ons need to change strategies, structures,
processes, and procedures more o%en to adapt

•  Many organiza+ons are preparing for more change by:

– Cu_ng out layers
– Decentralizing decision making
– Shi% toward horizontal structures
– Empowered teams and workers
– Virtual network strategies
–  Incorpora+ng eBusiness

15
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Organiza+on Design for Implemen+ng
Management Change

•  A mechanis+c organiza+on structure is
appropriate for frequent management
changes

•  The authority for strategy and structure
change lies with top management

•  Employee input may be sought, but top
managers have the responsibility to direct the
change

16
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Dual-Core Approach to
Organiza+on Change

17
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Forces for Culture Change

Ø Reengineering and Horizontal
Organiza+on

Ø Diversity

Ø The Learning Organiza+on

OD Culture Change Interven+ons

Large Group Interven+on

Team Building

Interdepartmental Ac+vi+es

The Change Curve

Leadership for Change

Transforma5onal leaders
– Create a compelling vision
– Create an environment for risk-taking and
innova+on

Leadership for Change: 80% of successful
innova+ve companies have top leaders who
reinforce the value and importance of innova+on.
Transforma+onal leadership is well-suited for
leading change.

Techniques for Change
Implementa+on

•  Establish a sense of urgency for change
•  Establish a coali+on to guide the change

•  Create a vision and strategy for change

•  Find an idea that fits the need
•  Create change teams

•  Foster idea champions

Techniques for Overcoming Resistance

•  Top management support
•  Par+cipa+on and involvement
•  Alignment with needs and goals of users
•  Communica+on and training
•  An environment with psychological
safety

Design Essen+als

vChange, not stability, is the challenge for
managers

v There are four types of change

v Organic structures foster innova+on

Design Essen+als

v A top-down approach is best for change
and strategy

v Top managers must foster culture
change
v The implementa+on of change can be
difficult
vPlanning for change can help deal with
resistance

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Richard L. Daft
V A N D E R B I LT U N I V E R S I T Y
Organization Theory and Design
N I N T H E D I T I O N
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Organization Theory and Design, Ninth Edition
Richard L. Daft
With the Assistance of Patricia G. Lane
COPYRIGHT © 2007
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About the Author
Richard L. Daft, Ph.D., is the Brownlee O. Currey, Jr., Professor of Management in
the Owen Graduate School of Management at Vanderbilt University. Professor Daft
specializes in the study of organization theory and leadership. Professor Daft is a
Fellow of the Academy of Management and has served on the editorial boards of
Academy of Management Journal, Administrative Science Quarterly, and Journal
of Management Education. He was the Associate Editor-in-Chief of Organization
Science and served for three years as associate editor of Administrative Science
Quarterly.
Professor Daft has authored or co-authored 12 books, including Management
(Thomson Learning/South-Western, 2005), The Leadership Experience (Thomson
Learning/South-Western, 2005), and What to Study: Generating and Developing
Research Questions (Sage, 1982). He recently published Fusion Leadership: Un-
locking the Subtle Forces That Change People and Organizations (Berrett-Koehler,
2000, with Robert Lengel). He has also authored dozens of scholarly articles,
papers, and chapters. His work has been published in Administrative Science Quar-
terly, Academy of Management Journal, Academy of Management Review, Strategic
Management Journal, Journal of Management, Accounting Organizations and
Society, Management Science, MIS Quarterly, California Management Review, and
Organizational Behavior Teaching Review. Professor Daft has been awarded several
government research grants to pursue studies of organization design, organizational
innovation and change, strategy implementation, and organizational information
processing.
Professor Daft is also an active teacher and consultant. He has taught manage-
ment, leadership, organizational change, organizational theory, and organizational
behavior. He has been involved in management development and consulting for
many companies and government organizations, including the American Banking
Association, Bell Canada, National Transportation Research Board, NL Baroid,
Nortel, TVA, Pratt & Whitney, State Farm Insurance, Tenneco, the United States Air
Force, the United States Army, J. C. Bradford & Co., Central Parking System,
Entergy Sales and Service, Bristol-Myers Squibb, First American National Bank, and
the Vanderbilt University Medical Center.
iii
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Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

v
Preface xv
Part 1: Introduction to Organizations 1
1. Organizations and Organization Theory 2
Part 2: Organizational Purpose and Structural Design 53
2. Strategy, Organization Design, and Effectiveness 54
3. Fundamentals of Organization Structure 88
Part 3: Open System Design Elements 135
4. The External Environment 136
5. Interorganizational Relationships 170
6. Designing Organizations for the International Environment 204
Part 4: Internal Design Elements 243
7. Manufacturing and Service Technologies 244
8. Information Technology and Control 286
9. Organization Size, Life Cycle, and Decline 319
Part 5: Managing Dynamic Processes 357
10. Organizational Culture and Ethical Values 358
11. Innovation and Change 398
12. Decision-Making Processes 441
13. Conflict, Power, and Politics 481
Integrative Cases 517
1.0 It Isn’t So Simple: Infrastructure Change at Royce Consulting 518
2.0 Custom Chip, Inc. 522
3.0 W. L. Gore & Associates, Inc. Entering 1998 528
4.0 XEL Communications, Inc. (C): Forming a Strategic Partnership 543
5.0 Empire Plastics 549
6.0 The Audubon Zoo, 1993 552
7.0 Moss Adams, LLP 566
8.1 Littleton Manufacturing (A) 577
8.2 Littleton Manufacturing (B) 589
Glossary 591
Name Index 601
Corporate Name Index 610
Subject Index 614
Brief Contents
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vii
Chapter 1: Organizations
and Organization Theory 2
A Look Inside: Xerox Corporation 3
Organization Theory in Action 6
Topics, 6 • Current Challenges, 6
Leading by Design: The Rolling Stones 7
Purpose of This Chapter, 10
What Is an Organization? 10
Definition, 10 • Types of Organizations, 11
• Importance of Organizations, 12
Book Mark 1.0: The Company: A Short History of a
Revolutionary Idea 12
Perspectives on Organizations 14
Open Systems, 14 • Organizational
Configuration, 16
Dimensions of Organization Design 17
Structural Dimensions, 17 • Contextual
Dimensions, 20
In Practice: W. L. Gore & Associates 21
Performance and Effectiveness Outcomes, 22
In Practice: Federal Bureau of Investigation 24
The Evolution of Organization Theory and Design 25
Historical Perspectives, 25 • Contemporary
Organization Design, 27 • Efficient
Performance versus the Learning
Organization, 28
In Practice: Cementos Mexicanos 32
Framework for the Book 33
Levels of Analysis, 33 • Plan of the Book,
34 • Plan of Each Chapter, 36
Summary and Interpretation 36
Chapter 1 Workbook: Measuring Dimensions
of Organizations 38
Case for Analysis: Perdue Farms Inc.:
Responding to 21st Century Challenges 39
Contents
Preface xv
Part 1: Introduction to Organizations 1
Part 2: Organizational Purpose and Structural Design 53
Chapter 2: Strategy, Organization
Design, and Effectiveness 54
A Look Inside: Starbucks Corporation 55
Purpose of This Chapter, 56
The Role of Strategic Direction in Organization
Design 56
Organizational Purpose 58
Mission, 58 • Operative Goals, 59
Leading by Design: Wegmans 61
The Importance of Goals, 62
A Framework for Selecting Strategy and Design 62
Porter’s Competitive Strategies, 63
In Practice: Ryanair 64
Miles and Snow’s Strategy Typology, 65
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viii Contents
viii
Part 3: Open System Design Elements 135
Chapter 4: The External Environment 136
A Look Inside: Nokia 137
Purpose of This Chapter, 138
The Environmental Domain 138
Task Environment, 138 • General
Environment, 140 • International
Context, 141
In Practice: Ogilvy & Mather 142
Environmental Uncertainty 142
Simple–Complex Dimension, 143 •
Stable–Unstable Dimension, 144
Book Mark 4.0: Confronting Reality: Doing What Matters
to Get Things Right 144
Framework, 145
Adapting to Environmental Uncertainty 147
Positions and Departments, 147 • Buffering
and Boundary Spanning, 147
Book Mark 2.0: What Really Works:
The 4 � 2 Formula for Sustained Business Success 66
How Strategies Affect Organization
Design, 67 • Other Factors Affecting
Organization Design, 69
Assessing Organizational Effectiveness 70
Contingency Effectiveness Approaches 70
Goal Approach, 71
In Practice: Chevrolet 72
Resource-based Approach, 73 • Internal
Process Approach, 74
An Integrated Effectiveness Model 75
In Practice: The Thomson Corporation 78
Summary and Interpretation 79
Chapter 2 Workbook: Identifying Company Goals
and Strategies 80
Case for Analysis: The University Art Museum 81
Case for Analysis: Airstar, Inc. 84
Chapter 2 Workshop: Competing Values
and Organizational Effectiveness 85
Chapter 3: Fundamentals
of Organization Structure 88
A Look Inside: Ford Motor Company 89
Purpose of This Chapter, 90
Organization Structure 90
Information-Processing Perspective on Structure 91
Book Mark 3.0: The Future of Work: How the New
Order of Business Will Shape Your Organization, Your
Management Style, and Your Life 92
Vertical Information Linkages, 93
In Practice: Oracle Corporation 94
Horizontal Information Linkages, 95
Organization Design Alternatives 99
Required Work Activities, 99 • Reporting
Relationships, 100 • Departmental
Grouping Options, 100
Functional, Divisional, and Geographical Designs 102
Functional Structure, 102
In Practice: Blue Bell Creameries, Inc. 103
Functional Structure with Horizontal
Linkages, 104 • Divisional Structure, 104
In Practice: Microsoft 106
Geographical Structure, 107
Matrix Structure 108
Conditions for the Matrix, 109 • Strengths
and Weaknesses, 110
In Practice: Englander Steel 111
Horizontal Structure 113
Characteristics, 114
In Practice: GE Salisbury 115
Strengths and Weaknesses, 116
Virtual Network Structure 117
How the Structure Works, 117
In Practice: TiVo Inc. 118
Strengths and Weaknesses, 118
Hybrid Structure 120
Applications of Structural Design 122
Structural Alignment, 122 • Symptoms of
Structural Deficiency, 123
Summary and Interpretation 124
Chapter 3 Workbook: You and Organization
Structure 126
Case for Analysis: C & C Grocery Stores, Inc. 126
Case for Analysis: Aquarius Advertising Agency 129
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Contents ix
In Practice: Genesco 149
Differentiation and Integration, 149 •
Organic versus Mechanistic Management
Processes, 151 • Planning, Forecasting, and
Responsiveness, 152
Leading by Design: Rowe Furniture Company 153
Framework for Organizational Responses
to Uncertainty 154
Resource Dependence 154
Controlling Environmental Resources 156
Establishing Interorganizational Linkages,
156
In Practice: Verizon and SBC Communications Inc. 157
Controlling the Environmental Domain,
159
In Practice: Wal-Mart 160
Organization–Environment Integrative
Framework, 161
Summary and Interpretation 161
Chapter 4 Workbook: Organizations You Rely On 164
Case for Analysis: The Paradoxical Twins:
Acme and Omega Electronics 165
Chapter 5: Interorganizational
Relationships 170
A Look Inside: International Truck
and Engine Corporation 171
Purpose of This Chapter, 172
Organizational Ecosystems 172
Is Competition Dead? 173
In Practice: Amazon.com Inc. 173
The Changing Role of Management, 174 •
Interorganizational Framework, 176
Resource Dependence 177
Resource Strategies, 177 • Power Strategies,
178
Collaborative Networks 178
Why Collaboration? 179 • From
Adversaries to Partners, 180
Book Mark 5.0: Managing Strategic Relationships:
The Key to Business Success 181
In Practice: Bombardier 182
Population Ecology 183
Organizational Form and Niche, 184 •
Process of Ecological Change, 185
Leading by Design: Shazam—It’s Magic! 186
Strategies for Survival, 187
In Practice: Genentech 188
Institutionalism 188
In Practice: Wal-Mart 189
The Institutional View and Organization
Design, 190 • Institutional Similarity, 190
Summary and Interpretation 193
Chapter 5 Workbook: Management Fads 195
Case for Analysis: Oxford Plastics Company 195
Case for Analysis: Hugh Russel, Inc. 196
Chapter 5 Workshop: Ugli Orange Case 199
Chapter 6: Designing Organizations
for the International Environment 204
A Look Inside: Gruner � Jahr 205
Purpose of This Chapter, 206
Entering the Global Arena 206
Motivations for Global Expansion, 206 •
Stages of International Development, 209 •
Global Expansion through International
Strategic Alliances, 210
Designing Structure to Fit Global Strategy 211
Model for Global versus Local
Opportunities, 211 • International
Division, 214 • Global Product Division
Structure, 215 • Global Geographical
Division Structure, 215
In Practice: Colgate-Palmolive Company 217
Global Matrix Structure, 218
In Practice: Asea Brown Boveri Ltd. (ABB) 219
Building Global Capabilities 220
The Global Organizational Challenge, 220
In Practice: Sony 223
Global Coordination Mechanisms, 224
Cultural Differences in Coordination and Control 227
National Value Systems, 227 • Three
National Approaches to Coordination
and Control, 227
Book Mark 6.0: Cross-Cultural Business Behavior:
Marketing, Negotiating and Managing
Across Cultures 228
The Transnational Model of Organization 230
Summary and Interpretation 233
Chapter 6 Workbook: Made in the U.S.A.? 235
Case for Analysis: TopDog Software 235
Case for Analysis: Rhodes Industries 236
Chapter 6 Workshop: Comparing Cultures 239
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Part 4: Internal Design Elements 243
x Contents
Chapter 7: Manufacturing
and Service Technologies 244
A Look Inside: American Axle & Manufacturing
(AAM) 245
Purpose of This Chapter, 247
Core Organization Manufacturing Technology 248
Manufacturing Firms, 248 • Strategy,
Technology, and Performance, 250
In Practice: Printronix 251
Book Mark 7.0: Inviting Disaster:
Lessons from the Edge of Technology 252
Contemporary Applications 253
Flexible Manufacturing Systems, 253 • Lean
Manufacturing, 254
In Practice: Autoliv 255
Leading by Design: Dell Computer 256
Performance and Structural Implications, 257
Core Organization Service Technology 259
Service Firms, 259 • Designing the Service
Organization, 262
In Practice: Pret A Manger 263
Non-Core Departmental Technology 264
Variety, 264 • Analyzability, 264 •
Framework, 264
Department Design 266
In Practice: Parkland Memorial Hospital 268
Workflow Interdependence among Departments 269
Types, 269 • Structural Priority, 271 •
Structural Implications, 272
In Practice: Athletic Teams 273
Impact of Technology on Job Design 274
Job Design, 274 • Sociotechnical Systems,
275
Summary and Interpretation 276
Chapter 7 Workbook: Bistro Technology 278
Case for Analysis: Acetate Department 280
Chapter 8: Information Technology
and Control 286
A Look Inside: The Progressive Group of Insurance
Companies 287
Purpose of This Chapter, 289
Information Technology Evolution 289
In Practice: Anheuser-Busch 290
Information for Decision Making and Control 291
Organizational Decision-Making Systems, 291
• Feedback Control Model, 293 •
Management Control Systems, 293
In Practice: eBay 295
The Balanced Scorecard, 296
Adding Strategic Value: Strengthening Internal
Coordination 298
Intranets, 298 • Enterprise Resource
Planning, 299 • Knowledge Management,
300
Book Mark 8.0: The Myth of the Paperless Office 302
In Practice: Montgomery-Watson Harza 303
Adding Strategic Value: Strengthening External
Relationships 304
Leading by Design: Corrugated Supplies 304
The Integrated Enterprise, 305 • Customer
Relationship Management, 307 •
E-Business Organization Design, 307
In Practice: Tesco.com 308
IT Impact on Organization Design 309
Summary and Interpretation 311
Chapter 8 Workbook: Are You Fast Enough
to Succeed in Internet Time? 313
Case for Analysis: Century Medical 315
Case for Analysis: Product X 316
Chapter 9: Organization Size,
Life Cycle, and Decline 319
A Look Inside: Interpol 320
Purpose of This Chapter, 321
Organization Size: Is Bigger Better? 321
Pressures for Growth, 321 • Dilemmas of
Large Size, 322
Book Mark 9.0: Execution: The Discipline of Getting
Things Done 325
Organizational Life Cycle 326
Stages of Life Cycle Development, 326
In Practice: Nike 329
Organizational Characteristics during the
Life Cycle, 330
Organizational Bureaucracy and Control 331
What Is Bureaucracy? 332
In Practice: United Parcel Service 333
Size and Structural Control, 334
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Contents xi
Bureaucracy in a Changing World 335
Organizing Temporary Systems for
Flexibility and Innovation, 336 • Other
Approaches to Reducing Bureaucracy, 337
Leading by Design: The Salvation Army 338
Organizational Control Strategies 339
Bureaucratic Control, 339 • Market
Control, 340
In Practice: Imperial Oil Limited 341
Clan Control, 341
In Practice: Southwest Airlines 342
Organizational Decline and Downsizing 343
Definition and Causes, 343 • A Model of
Decline Stages, 344
In Practice: Brobeck, Phleger & Harrison LLP 346
Downsizing Implementation, 346
In Practice: Charles Schwab & Company 348
Summary and Interpretation 348
Chapter 9 Workbook: Control Mechanisms 350
Case for Analysis: Sunflower Incorporated 351
Chapter 9 Workshop: Windsock, Inc. 352
Part 5: Managing Dynamic Processes 357
Chapter 10: Organizational Culture
and Ethical Values 358
A Look Inside: Boots Company PLC 359
Purpose of This Chapter, 360
Organizational Culture 361
What Is Culture? 361 • Emergence and
Purpose of Culture, 361 • Interpreting
Culture, 363
Book Mark 10.0: Good to Great: Why Some
Companies Make the Leap . . . And Others Don’t 364
Organization Design and Culture 367
The Adaptability Culture, 368 • The
Mission Culture, 368
In Practice: J.C. Penney 369
The Clan Culture, 369 • The Bureaucratic
Culture, 369 • Culture Strength and
Organizational Subcultures, 370
In Practice: Pitney Bowes Credit Corporation 371
Organizational Culture, Learning, and Performance 371
Leading by Design: JetBlue Airways 372
Ethical Values and Social Responsibility 374
Sources of Individual Ethical Principles,
374 • Managerial Ethics and Social
Responsibility, 375 • Does It Pay to Be
Good? 377
Sources of Ethical Values in Organizations 378
Personal Ethics, 378 • Organizational
Culture, 379 • Organizational Systems, 379
• External Stakeholders, 380
How Leaders Shape Culture and Ethics 381
Values-based Leadership, 381
In Practice: Kingston Technology Co. 382
Formal Structure and Systems, 382
In Practice: General Electric 385
Corporate Culture and Ethics in a Global
Environment 386
Summary and Interpretation 387
Chapter 10 Workbook: Shop ‘til You Drop:
Corporate Culture in the Retail World 389
Case for Analysis: Implementing Change at
National Industrial Products 390
Case for Analysis: Does This Milkshake Taste
Funny? 392
Chapter 10 Workshop: The Power of Ethics 394
Chapter 11: Innovation and Change 398
A Look Inside: Toyota Motor Corporation 399
Purpose of This Chapter, 400
Innovate or Perish: The Strategic Role
of Change 400
Incremental versus Radical Change, 400 •
Strategic Types of Change, 402
Leading by Design: Google 403
Elements for Successful Change 405
Technology Change 407
The Ambidextrous Approach, 407 •
Techniques for Encouraging Technology
Change, 408
In Practice: W. L. Gore 411
New Products and Services 412
New Product Success Rate, 412 • Reasons
for New Product Success, 412 •
Horizontal Coordination Model, 413
In Practice: Procter & Gamble 415
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xii Contents
Achieving Competitive Advantage: The
Need for Speed, 416
Strategy and Structure Change 417
The Dual-Core Approach, 417 •
Organization Design for Implementing
Administrative Change, 418
In Practice: Tyco International 419
Culture Change 420
Forces for Culture Change, 420
In Practice: X-Rite Inc. 421
Organization Development Culture Change
Interventions, 422
Strategies for Implementing Change 424
Book Mark 11.0: The Change Monster:
The Human Forces That Fuel or Foil Corporate
Transformation and Change 424
Leadership for Change, 425 • Barriers to
Change, 426 • Techniques for
Implementation, 426
Summary and Interpretation 429
Chapter 11 Workbook: Innovation Climate 430
Case for Analysis: Shoe Corporation of Illinois 432
Case for Analysis: Southern Discomfort 436
Chapter 12: Decision-Making
Processes 441
A Look Inside: Maytag 442
Purpose of This Chapter, 443
Definitions 443
Individual Decision Making 445
Rational Approach, 445
In Practice: Alberta Consulting 448
Bounded Rationality Perspective, 448
Leading by Design: Motek 450
Book Mark 12.0: Blink: The Power of Thinking
without Thinking 452
In Practice: Paramount Pictures 453
Organizational Decision Making 453
Management Science Approach, 453
In Practice: Continental Airlines 454
Carnegie Model, 456
In Practice: Encyclopaedia Britannica 457
Incremental Decision Process Model, 458
In Practice: Gillette Company 461
The Learning Organization 462
Combining the Incremental Process and
Carnegie Models, 462 • Garbage Can
Model, 463
In Practice: I ♥ Huckabees 466
Contingency Decision-Making Framework 467
Problem Consensus, 467 • Technical
Knowledge about Solutions, 468 •
Contingency Framework, 468
Special Decision Circumstances 471
High-Velocity Environments, 471 •
Decision Mistakes and Learning, 472 •
Escalating Commitment, 473
Summary and Interpretation 473
Chapter 12 Workbook: Decision Styles 475
Case for Analysis: Cracking the Whip 476
Case for Analysis: The Dilemma of Aliesha State
College: Competence versus Need 477
Chapter 13: Conflict, Power,
and Politics 481
A Look Inside: Morgan Stanley 482
Purpose of This Chapter, 483
Intergroup Conflict in Organizations 483
Sources of Conflict, 484
Leading by Design: Advanced Cardiovascular
Systems 486
Rational versus Political Model, 487
Power and Organizations 488
Individual versus Organizational Power,
489 • Power versus Authority, 489 •
Vertical Sources of Power, 490 • Horizontal
Sources of Power, 494
In Practice: University of Illinois 496
In Practice: HCA and Aetna Inc. 498
Political Processes in Organizations 498
Definition, 499 • When Is Political Activity
Used? 500
Using Power, Politics, and Collaboration 500
Tactics for Increasing Power, 501 • Political
Tactics for Using Power, 502
Book Mark 13.0: Influence: Science and Practice 504
In Practice: Yahoo! 505
Tactics for Enhancing Collaboration, 505
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In Practice: Aluminum Company of America/
International Association of Machinists 506
Summary and Interpretation 508
Chapter 13 Workbook: How Do You Handle
Conflict? 510
Case for Analysis: The Daily Tribune 511
Case for Analysis: Pierre Dux 512
Integrative Cases 517
1.0 It Isn’t So Simple: Infrastructure Change
at Royce Consulting 518
2.0 Custom Chip, Inc. 522
3.0 W. L. Gore & Associates, Inc. Entering 1998 528
4.0 XEL Communications, Inc. (C): Forming
a Strategic Partnership 543
5.0 Empire Plastics 549
6.0 The Audubon Zoo, 1993 552
7.0 Moss Adams, LLP 566
8.1 Littleton Manufacturing (A) 577
8.2 Littleton Manufacturing (B) 589
Glossary 591
Name Index 601
Corporate Name Index 610
Subject Index 614
Contents xiii
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xv
Preface
My vision for the Ninth Edition of Organization Theory and Design is to integrate
contemporary problems about organization design with classic ideas and theories in
a way that is interesting and enjoyable for students. Significant changes in this edi-
tion include updates to every chapter that incorporate the most recent ideas, new
case examples, new book reviews, new end-of-chapter cases, and new end-of-book
integrative cases. The research and theories in the field of organization studies are
rich and insightful and will help students and managers understand their organiza-
tional world and solve real-life problems. My mission is to combine the concepts
and models from organizational theory with changing events in the real world to
provide the most up-to-date view of organization design available.
Distinguishing Features of the Ninth Edition
Many students in a typical organization theory course do not have extensive work
experience, especially at the middle and upper levels, where organization theory is
most applicable. To engage students in the world of organizations, the Ninth Edi-
tion adds and expands significant features: Leading by Design boxes with current
examples of companies that are successfully using organization design concepts to
compete in today’s complex and uncertain business world, student experiential ac-
tivities that engage students in applying chapter concepts, new Book Marks, new In
Practice examples, and new end-of-chapter and integrative cases for student analy-
sis. The total set of features substantially expands and improves the book’s content
and accessibility. These multiple pedagogical devices are used to enhance student in-
volvement in text materials.
Leading by Design The Leading by Design features describe companies that have
undergone a major shift in organization design, strategic direction, values, or cul-
ture as they strive to be more competitive in today’s turbulent global environment.
Many of these companies are applying new design ideas such as network organiz-
ing, e-business, or temporary systems for flexibility and innovation. The Leading by
Design examples illustrate company transformations toward knowledge sharing,
empowerment of employees, new structures, new cultures, the breaking down of
barriers between departments and organizations, and the joining together of em-
ployees in a common mission. Examples of Leading by Design organizations include
Wegmans Supermarkets, Google, The Salvation Army, JetBlue, Corrugated Supplies,
Shazam, the Rolling Stones, and Dell Computer.
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Book Marks Book Marks, a unique feature of this text, are book reviews that re-
flect current issues of concern for managers working in real-life organizations. These
reviews describe the varied ways companies are dealing with the challenges of to-
day’s changing environment. New Book Marks in the Ninth Edition include The Fu-
ture of Work: How the New Order of Business Will Shape Your Organization, Your
Management Style, and Your Life; Execution: The Discipline of Getting Things
Done; What Really Works: The 4 � 2 Formula for Sustained Business Success;
Blink: The Power of Thinking without Thinking; The Company: A Short History of
a Revolutionary Idea; and Confronting Reality: Doing What Matters to Get Things
Right.
New Case Examples This edition contains many new examples to illustrate theo-
retical concepts. Many examples are international, and all are based on real organ-
izations. New chapter opening cases for the Ninth Edition include Gruner � Jahr,
International Truck and Engine Company, Morgan Stanley, Ford Motor Company,
Boots Company PLC, Maytag, Toyota, and American Axle & Manufacturing. New
In Practice cases used within chapters to illustrate specific concepts include TiVo
Inc., General Electric, J.C. Penney, Genentech, Ryanair, Charles Schwab and Com-
pany, Nike, Verizon Communications, eBay, Tyco International, Sony, and the Fed-
eral Bureau of Investigation.
A Look Inside This feature introduces each chapter with a relevant and interesting
organizational example. Many examples are international, and all are based on real
organizations. New cases include Boots Company PLC, International Truck and
Engine Company, Gruner � Jahr, Morgan Stanley, Toyota, and American Axle &
Manufacturing.
In Practice These cases also illustrate theoretical concepts in organizational settings.
New In Practice cases used within chapters to illustrate specific concepts include
J.C. Penney, Charles Schwab and Company, eBay, the Federal Bureau of Investiga-
tion, Ryanair, Chevrolet, Genentech, Tyco International, and Sony.
Manager’s Briefcase Located in the chapter margins, this feature tells students how
to use concepts to analyze cases and manage organizations.
Text Exhibits Frequent exhibits are used to help students visualize organizational
relationships, and the artwork has been redone to communicate concepts more
clearly.
Summary and Interpretation The summary and interpretation section tells stu-
dents how the chapter points are important in the broader context of organizational
theory.
Case for Analysis These cases are tailored to chapter concepts and provide a vehi-
cle for student analysis and discussion.
Integrative Cases The integrative cases at the end of the text are positioned to
encourage student discussion and involvement. These cases include Royce Consulting;
Custom Chip, Inc.; W. L. Gore & Associates, Inc.; XEL Communications, Inc.;
Empire Plastics; The Audubon Zoo; Moss Adams, LLP; and Littleton Manufacturing.
xvi Preface
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Licensed to:

New Concepts
Many concepts have been added or expanded in this edition. New material has been
added on culture, learning, and performance; virtual network organization struc-
tures; applying ethics to create socially responsible organizations; outsourcing; lean
manufacturing; customer relationship management; political tactics for increasing
and using manager power; applying business intelligence; and the use of global co-
ordination mechanisms for transferring knowledge and innovation. Many ideas are
aimed at helping students learn to design organizations for an environment charac-
terized by uncertainty; a renewed emphasis on ethics and social responsibility; and
the need for a speedy response to change, crises, or shifting customer expectations.
In addition, coping with the complexity of today’s global environment is explored
thoroughly in Chapter 6.
Chapter Organization
Each chapter is highly focused and is organized into a logical framework. Many or-
ganization theory textbooks treat material in sequential fashion, such as “Here’s
View A, Here’s View B, Here’s View C,” and so on. Organization Theory and De-
sign shows how they apply in organizations. Moreover, each chapter sticks to the
essential point. Students are not introduced to extraneous material or confusing
methodological squabbles that occur among organizational researchers. The body
of research in most areas points to a major trend, which is reported here. Several
chapters develop a framework that organizes major ideas into an overall scheme.
This book has been extensively tested on students. Feedback from students and
faculty members has been used in the revision. The combination of organization the-
ory concepts, book reviews, examples of leading organizations, case illustrations,
experiential exercises, and other teaching devices is designed to meet student learn-
ing needs, and students have responded favorably.
Supplements
Instructor’s Manual with Test Bank (ISBN: 0-324-40543-X) The Instructor’s Man-
ual contains chapter overviews, chapter outlines, lecture enhancements, discussion
questions, discussion of workbook activities, discussion of chapter cases, Internet
activities, case notes for integrative cases, and a guide to the videos available for use
with the text. The Test Bank consists of multiple choice, true/false, and short answer
questions.
PowerPoint Lecture Presentation Available on the Instructor’s Resource CD-
ROM and the Web site, the PowerPoint Lecture Presentation enables instructors to
customize their own multimedia classroom presentations. Prepared in conjunction
with the text and instructor’s resource guide, the package contains approximately
150 slides. It includes figures and tables from the text, as well as outside materials
to supplement chapter concepts. Material is organized by chapter and can be mod-
ified or expanded for individual classroom use. PowerPoints are also easily printed
to create customized transparency masters.
Preface xvii
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Licensed to:

ExamView A computerized version of the Test Bank is available upon request.
ExamView contains all of the questions in the printed test bank. This program is
easy-to-use test creation software compatible with Microsoft Windows. Instructors
can add or edit questions, instructions, and answers and can select questions (ran-
domly or numerically) by previewing them on the screen. Instructors can also cre-
ate and administer quizzes online, whether over the Internet, a local area network
(LAN), or a wide area network (WAN).
Instructor’s Resource CD-ROM (ISBN: 0-324-40579-0) Key instructor ancillaries
(Instructor’s Manual, Test Bank, ExamView, and PowerPoint slides) are provided
on CD-ROM, giving instructors the ultimate tool for customizing lectures and
presentations.
WebTutor™ Toolbox (0-324-43106-6 on WebCT or 0-324-43109-0 on Black-
Board) WebTutor is an interactive, Web-based student supplement on WebCT and/or
BlackBoard that harnesses the power of the Internet to deliver innovative learning aids
that actively engage students. The instructor can incorporate WebTutor as an integral
part of the course, or the students can use it on their own as a study guide.
Web Site (http://daft.swlearning.com) The Daft Web site is a comprehensive,
resource-rich location for both instructors and students to find pertinent informa-
tion. The Instructor Resources section contains an Instructor’s Manual download,
Test Bank download, PowerPoint download, and case material.
Experiential Exercises in Organization Theory and Design, Second Edition By
H. Eugene Baker III and Steven K. Paulson of the University of North Florida
Tailored to the Table of Contents in Daft’s Organization Theory and Design,
Ninth Edition, the core purpose of Experiential Exercises in Organization Theory
and Design is to provide courses in organizational theory with a set of classroom
exercises that will help students better understand and internalize the basic princi-
ples of the course. The chapters of the book cover the most basic and widely cov-
ered concepts in the field. Each chapter focuses on a central topic, such as organi-
zational power, production technology, or organizational culture, and provides all
necessary materials to fully participate in three different exercises. Some exercises
are intended to be completed by individuals, others in groups, and still others can
be used either way. The exercises range from instrumentation-based and assessment
questionnaires to actual creative production activities.
Acknowledgments
Textbook writing is a team enterprise. The Ninth Edition has integrated ideas and
hard work from many people to whom I am grateful. Reviewers and focus group
participants made an especially important contribution. They praised many fea-
tures, were critical of things that didn’t work well, and offered valuable suggestions.
David Ackerman
University of Alaska, Southeast
Michael Bourke
Houston Baptist University
xviii Preface
Suzanne Clinton
Cameron University
Jo Anne Duffy
Sam Houston State University
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Cheryl Duvall
Mercer University
Patricia Feltes
Missouri State University
Robert Girling
Sonoma State University
John A. Gould
University of Maryland
Ralph Hanke
Pennsylvania State University
Bruce J. Hanson
Pepperdine University
Guiseppe Labianca
Tulane University
Jane Lemaster
University of Texas–Pan American
Steven Maranville
University of Saint Thomas
Rick Martinez
Baylor University
Janet Near
Indiana University
Julie Newcomer
Texas Woman’s University
Preface xix
Asbjorn Osland
George Fox University
Laynie Pizzolatto
Nicholls State University
Samantha Rice
Abilene Christian University
Richard Saaverda
University of Michigan
W. Robert Sampson
University of Wisconsin, Eau Claire
Amy Sevier
University of Southern Mississippi
W. Scott Sherman
Pepperdine University
Thomas Terrell
Coppin State College
Jack Tucci
Southeastern Louisiana University
Judith White
Santa Clara University
Jan Zahrly
University of North Dakota
Among my professional colleagues, I am grateful to my friends and colleagues
at Vanderbilt’s Owen School—Bruce Barry, Ray Friedman, Neta Moye, Rich Oliver,
David Owens, and Bart Victor—for their intellectual stimulation and feedback. I
also owe a special debt to Dean Jim Bradford and Senior Associate Dean Joe Black-
burn for providing the time and resources for me to stay current on the organiza-
tion design literature and develop the revisions for the text.
I want to extend special thanks for my editorial associate, Pat Lane. She skill-
fully drafted materials on a variety of topics and special features, found resources,
and did an outstanding job with the copyedited manuscript and page proofs. Pat’s
personal enthusiasm and care for the content of this text enabled the Ninth Edition
to continue its high level of excellence.
The team at South-Western also deserves special mention. Joe Sabatino did a
great job of designing the project and offering ideas for improvement. Emma Gut-
tler was superb as Developmental Editor, keeping the people and project on sched-
ule while solving problems creatively and quickly. Cliff Kallemeyn, Production
Editor, provided superb project coordination and used his creativity and manage-
ment skills to facilitate the book’s on-time completion.
Finally, I want to acknowledge the love and contributions of my wife, Dorothy
Marcic. Dorothy has been very supportive of my textbook projects and has created
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Licensed to:

an environment in which we can grow together. She helped the book take a giant
step forward with her creation of the Workbook and Workshop student exercises.
Perhaps best of all, Dorothy lets me practice applying organization design ideas as
co-producer of her theatrical productions. I also want to acknowledge the love and
support of my daughters, Danielle, Amy, Roxanne, Solange, and Elizabeth, who
make my life special during our precious time together.
xx Preface
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Integrative Cases
Integrative Case 1.0
It Isn’t So Simple: Infrastructure
Change at Royce Consulting
Background
Infrastructure and Proposed Changes
Work Patterns
Organizational Culture
Current Situation
The Feasibility Study
The Challenge
Integrative Case 2.0
Custom Chip, Inc.
Introduction
Company Background
The Manufacturing Process
Role of the Product Engineer
Weekly Meeting
Coordination with Applications
Engineers
Coordination with Manufacturing
Later in the Day
Integrative Case 3.0
W. L. Gore & Associates, Inc.
Entering 1998
The First Day on the Job
Company Background
Company Products
W. L. Gore & Associates’ Approach
to Organization and Structure
The Lattice Organization
Features of W. L. Gore’s Culture
W. L. Gore & Associates’ Sponsor
Program
Compensation Practices
W. L. Gore & Associates’ Guiding
Principles and Core Values
Research and Development
Development of Gore Associates
Marketing Approaches and Strategy
Adapting to Changing Environmental
Forces
W. L. Gore & Associates’ Financial
Performance
Acknowledgments
Excerpts from Interviews with
Associates
Integrative Case 4.0
XEL Communications, Inc. (C):
Forming a Strategic Partnership
XEL Communications, Inc.
The XEL Vision
Which Path to Choose
Staying the Course
Going Public
Strategic Partnership
The Case Against Strategic
Partnership
Choosing a Partner
Going Forward
Integrative Case 5.0
Empire Plastics
A Project to Remember
Conflict Ahead
Failing . . . Forward
Integrative Case 6.0
The Audubon Zoo, 1993
The Decision
Purpose of the Zoo
New Directions
Operations
Financial
Management
The Zoo in the Late 1980s
The Future
Integrative Case 7.0
Moss Adams, LLP
Company Background
The Industry and the Market
The Wine Industry Niche
The Aftermath
Integrative Case 8.1
Littleton Manufacturing (A)
The Problems
The Company
The Financial Picture
The Quality Improvement System
How Different Levels Perceived the
Problems
Top Management
Recommendation Time
Integrative Case 8.2
Littleton Manufacturing (B)
517
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518 Integrative Cases
The lights of the city glittered outside Ken Vin-
cent’s twelfth-floor office. After nine years of late
nights and missed holidays, Ken was in the exec-
utive suite with the words “Associate Partner” on
the door. Things should be easier now, but the
proposed changes at Royce Consulting had been
more challenging than he had expected. “I don’t
understand,” he thought. “At Royce Consulting our
clients, our people, and our reputation are what count, so
why do I feel so much tension from the managers about the
changes that are going to be made in the office? We’ve an-
alyzed why we have to make the changes. Heck, we even
got an outside person to help us. The administrative sup-
port staff are pleased. So why aren’t the managers enthusi-
astic? We all know what the decision at tomorrow’s meet-
ing will be—Go! Then it will all be over. Or will it?” Ken
thought as he turned out the lights.
Background
Royce Consulting is an international consulting firm whose
clients are large corporations, usually with long-term con-
tracts. Royce employees spend weeks, months, and even
years working under contract at the client’s site. Royce
consultants are employed by a wide range of industries,
from manufacturing facilities to utilities to service busi-
nesses. The firm has over 160 consulting offices located in
65 countries. At this location Royce employees included 85
staff members, 22 site managers, 9 partners and associate
partners, 6 administrative support staff, 1 human resource
professional, and 1 financial support person.
For the most part, Royce Consulting hired entry-level
staff straight out of college and promoted from within.
New hires worked on staff for five or six years; if they did
well, they were promoted to manager. Managers were re-
sponsible for maintaining client contracts and assisting
partners in creating proposals for future engagements.
Those who were not promoted after six or seven years gen-
erally left the company for other jobs.
Newly promoted managers were assigned an office, a
major perquisite of their new status. During the previous
year, some new managers had been forced to share an of-
fice because of space limitations. To minimize the friction
of sharing an office, one of the managers was usually as-
signed to a long-term project out of town. Thus, practically
speaking, each manager had a private office.
Infrastructure and Proposed Changes
Royce was thinking about instituting a hoteling office
system—also referred to as a “nonterritorial” or “free-
address” office. A hoteling office system made offices
available to managers on a reservation or drop-in basis.
Managers are not assigned a permanent office; instead,
whatever materials and equipment the manager needs are
moved into the temporary office. These are some of the
features and advantages of a hoteling office system:
• No permanent office assigned
• Offices are scheduled by reservations
• Long-term scheduling of an office is feasible
• Storage space would be located in a separate file room
• Standard manuals and supplies would be maintained in
each office
• Hoteling coordinator is responsible for maintaining offices
• A change in “possession of space”
• Eliminates two or more managers assigned to the same
office
• Allows managers to keep the same office if desired
• Managers would have to bring in whatever files they
needed for their stay
• Information available would be standardized regardless
of office
• Managers do not have to worry about “housekeeping
issues”
The other innovation under consideration was an up-
grade to state-of-the-art electronic office technology. All
managers would receive a new notebook computer with up-
dated communications capability to use Royce’s integrated
and proprietary software. Also, as part of the electronic of-
fice technology, an electronic filing system was considered.
The electronic filing system meant information regarding
proposals, client records, and promotional materials would
be electronically available on the Royce Consulting network.
The administrative support staff had limited experi-
ence with many of the application packages used by the
managers. While they used word processing extensively,
they had little experience with spreadsheets, communica-
tions, or graphics packages. The firm had a graphics de-
partment and the managers did most of their own work, so
the administrative staff did not have to work with those
application software packages.
Integrative Case 1.0
It Isn’t So Simple: Infrastructure Change at Royce Consulting*
1.0
*Presented to and accepted by the Society for Case Research. All rights
reserved to the authors and SCR.
This case was prepared by Sally Dresdow of the University of Wisconsin at
Green Bay and Joy Benson of the University of Illinois at Springfield and is
intended to be used as a basis for class discussion. The views represented
here are those of the case authors and do not necessarily reflect the views
of the Society for Case Research. The authors’ views are based on their
own professional judgments. The names of the organization, individuals,
and location have been disguised to preserve the organization’s request for
anonymity.
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Integrative Cases 519
Work Patterns
Royce Consulting was located in a large city in the Mid-
west. The office was located in the downtown area, but it
was easy to get to. Managers assigned to in-town projects
often stopped by for a few hours at various times of the
day. Managers who were not currently assigned to client
projects were expected to be in the office to assist on cur-
rent projects or work with a partner to develop proposals
for new business.
In a consulting firm, managers spend a significant por-
tion of their time at client sites. As a result, the office oc-
cupancy rate at Royce Consulting was about 40 to 60 per-
cent. This meant that the firm paid lease costs for offices
that were empty approximately half of the time. With the
planned growth over the next ten years, assigning perma-
nent offices to every manager, even in doubled-up arrange-
ments, was judged to be economically unnecessary given
the amount of time offices were empty.
The proposed changes would require managers and ad-
ministrative support staff to adjust their work patterns. Ad-
ditionally, if a hoteling office system was adopted, managers
would need to keep their files in a centralized file room.
Organizational Culture
Royce Consulting had a strong organizational culture, and
management personnel were highly effective at communi-
cating it to all employees.
Stability of Culture
The culture at Royce Consulting was stable. The leadership
of the corporation had a clear picture of who they were and
what type of organization they were. Royce Consulting had
positioned itself to be a leader in all areas of large business
consulting. Royce Consulting’s CEO articulated the firm’s
commitment to being client-centered. Everything that was
done at Royce Consulting was because of the client.
Training
New hires at Royce Consulting received extensive training
in the culture of the organization and the methodology em-
ployed in consulting projects. They began with a structured
program of classroom instruction and computer-aided
courses covering technologies used in the various industries
in which the firm was involved. Royce Consulting recruited
top young people who were aggressive and who were will-
ing to do whatever was necessary to get the job done and
build a common bond. Among new hires, camaraderie was
encouraged along with a level of competition. This kind of
behavior continued to be cultivated throughout the train-
ing and promotion process.
Work Relationships
Royce Consulting employees had a remarkably similar out-
look on the organization. Accepting the culture and norms
of the organization was important for each employee. The
norms of Royce Consulting revolved around high perfor-
mance expectations and strong job involvement.
By the time people made manager, they were aware of
what types of behaviors were acceptable. Managers were
formally assigned the role of coach to younger
staff people, and they modeled acceptable behav-
ior. Behavioral norms included when they came
into the office, how late they stayed at the office,
and the type of comments they made about others.
Managers spent time checking on staff people and
talking with them about how they were doing.
The standard for relationships was that of
professionalism. Managers knew they had to do
what the partners asked and they were to be available at all
times. A norms survey and conversations made it clear that
people at Royce Consulting were expected to help each
other with on-the-job problems, but personal problems
were outside the realm of sanctioned relationships. Personal
problems were not to interfere with performance on a job.
To illustrate, vacations were put on hold and other kinds of
commitments were set aside if something was needed at
Royce Consulting.
Organizational Values
Three things were of major importance to the organization:
its clients, its people, and its reputation. There was a strong
client-centered philosophy communicated and practiced.
Organization members sought to meet and exceed cus-
tomer expectations. Putting clients first was stressed. The
management of Royce Consulting listened to its clients and
made adjustments to satisfy the client.
The reputation of Royce Consulting was important to
those leading the organization. They protected and en-
hanced it by focusing on quality services delivered by qual-
ity people. The emphasis on clients, Royce Consulting per-
sonnel, and the firm’s reputation was cultivated by
developing a highly motivated, cohesive, and committed
group of employees.
Management Style and Hierarchical Structure
The company organization was characterized by a directive
style of management. The partners had the final word on
all issues of importance. It was common to hear statements
like “Managers are expected to solve problems, and do
whatever it takes to finish the job” and “Whatever the
partners want, we do.” Partners accepted and asked for
managers’ feedback on projects, but in the final analysis,
the partners made the decisions.
Current Situation
Royce Consulting had an aggressive five-year plan that was
predicated on a continued increase in business. Increases in
the total number of partners, associate partners, managers,
and staff were forecast. Additional office space would be
required to accommodate the growth in staff; this would
1.0
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520 Integrative Cases
increase rental costs at a time when Royce’s fixed and vari-
able costs were going up.
The partners, led by managing partner Donald Gray
and associate partner Ken Vincent, believed that something
had to be done to improve space utilization and
the productivity of the managers and administra-
tive personnel. The partners approved a feasibil-
ity study of the innovations and their impact on
the company.
The ultimate decision makers were the part-
ner group who had the power to approve the con-
cepts and commit the required financial invest-
ment. A planning committee consisted of Ken
Vincent; the human resources person; the financial officer;
and an outside consultant, Mary Schrean.
The Feasibility Study
Within two working days of the initial meeting, all the
partners and managers received a memo announcing the
hoteling office feasibility study. The memo included a brief
description of the concept and stated that it would include
an interview with the staff. By this time, partners and man-
agers had already heard about the possible changes and
knew that Gray was leaning toward hoteling offices.
Interviews with the Partners
All the partners were interviewed. One similarity in the
comments was that they thought the move to hoteling of-
fices was necessary but they were glad it would not affect
them. Three partners expressed concern about managers’
acceptance of the change to a hoteling system. The conclu-
sion of each partner was that if Royce Consulting moved
to hoteling offices, with or without electronic office tech-
nology, the managers would accept the change. The reason
given by the partners for such acceptance was that the
managers would do what the partners wanted done.
The partners all agreed that productivity could be im-
proved at all levels of the organization: in their own work
as well as among the secretaries and the managers. Partners
acknowledged that current levels of information technol-
ogy at Royce Consulting would not support the move to
hoteling offices and that advances in electronic office tech-
nology needed to be considered.
Partners viewed all filing issues as secondary to both the
office layout change and the proposed technology improve-
ment. What eventually emerged, however, was that owner-
ship and control of files was a major concern, and most
partners and managers did not want anything centralized.
Interviews with the Managers
Personal interviews were conducted with all ten managers
who were in the office. During the interviews, four of the
managers asked Schrean whether the change to hoteling of-
fices was her idea. The managers passed the question off as
a joke; however, they expected a response from her. She
stated that she was there as an adviser, that she had not
generated the idea, and that she would not make the final
decision regarding the changes.
The length of time that these managers had been in
their current positions ranged from six months to five years.
None of them expressed positive feelings about the hoteling
system, and all of them referred to how hard they had
worked to make manager and gain an office of their own.
Eight managers spoke of the status that the office gave them
and the convenience of having a permanent place to keep
their information and files. Two of the managers said they
did not care so much about the status but were concerned
about the convenience. One manager said he would come in
less frequently if he did not have his own office. The man-
agers believed that a change to hoteling offices would de-
crease their productivity. Two managers stated that they did
not care how much money Royce Consulting would save on
lease costs; they wanted to keep their offices.
However, for all the negative comments, all the man-
agers said that they would go along with whatever the
partners decided to do. One manager stated that if Royce
Consulting stays busy with client projects, having a perma-
nently assigned office was not a big issue.
During the interviews, every manager was enthusiastic
and supportive of new productivity tools, particularly the im-
proved electronic office technology. They believed that new
computers and integrated software and productivity tools
would definitely improve their productivity. Half the man-
agers stated that updated technology would make the change
to hoteling offices “a little less terrible,” and they wanted
their secretaries to have the same software as they did.
The managers’ responses to the filing issue varied. The
volume of files managers had was in direct proportion to
their tenure in that position: The longer a person was a
manager, the more files he or she had. In all cases, man-
agers took care of their own files, storing them in their of-
fices and in whatever filing drawers were free.
As part of the process of speaking with managers, their
administrative assistants were asked about the proposed
changes. Each of the six thought that the electronic office
upgrade would benefit the managers, although they were
somewhat concerned about what would be expected of
them. Regarding the move to hoteling offices, each said that
the managers would hate the change, but that they would
agree to it if the partners wanted to move in that direction.
Results of the Survey
A survey developed from the interviews was sent to all
partners, associate partners, and managers two weeks after
the interviews were conducted. The completed survey was
returned by 6 of the 9 partners and associate partners and
16 of the 22 managers. This is what the survey showed.
Work Patterns. It was “common knowledge” that
managers were out of the office a significant portion of
their time, but there were no figures to substantiate this
belief, so the respondents were asked to provide data on
where they spent their time. The survey results indicated
1.0
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Integrative Cases 521
that partners spent 38 percent of their time in the office;
54 percent at client sites; 5 percent at home; and 3 percent
in other places, such as airports. Managers reported
spending 32 percent of their time in the office, 63 percent
at client sites, 4 percent at home, and 1 percent in other
places.
For 15 workdays, the planning team also visually
checked each of the 15 managers’ offices four times each
day: at 9 a.m., 11 a.m., 2 p.m., and 4 p.m. These times were
selected because initial observations indicated that these
were the peak occupancy times. An average of six offices (40
percent of all manager offices) were empty at any given time;
in other words, there was a 60 percent occupancy rate.
Alternative Office Layouts. One of the alternatives out-
lined by the planning committee was a continuation of and
expansion of shared offices. Eleven of the managers re-
sponding to the survey preferred shared offices to hoteling
offices. Occasions when more than one manager was in the
shared office at the same time were infrequent. Eight man-
agers reported 0 to 5 office conflicts per month; three man-
agers reported 6 to 10 office conflicts per month. The type
of problems encountered with shared offices included not
having enough filing space, problems in directing telephone
calls, and lack of privacy.
Managers agreed that having a permanently assigned
office was an important perquisite. The survey confirmed
the information gathered in the interviews about managers’
attidues: All but two managers preferred shared offices
over hoteling, and managers believed their productivity
would be negatively impacted. The challenges facing Royce
Consulting if they move to hoteling offices centered around
tradition and managers’ expectations, file accessibility and
organization, security and privacy issues, unpredictable
work schedules, and high-traffic periods.
Control of Personal Files. Because of the comments
made during the face-to-face interviews, survey respon-
dents were asked to rank the importance of having per-
sonal control of their files. A 5-point scale was used, with
5 being “strongly agree” and 1 being “strongly disagree.”
Here are the responses.
Electronic Technology. Royce Consulting had a basic
network system in the office that could not accommodate
the current partners and managers working at a remote
site. The administrative support staff had a separate net-
work, and the managers and staff could not communicate
electronically. Of managers responding to the survey, 95
percent wanted to use the network but only 50 percent
could actually do so.
Option Analysis
A financial analysis showed that there were significant cost
differences between the options under consideration:
Option 1: Continue private offices with some office sharing
• Lease an additional floor in existing building; annual
cost, $360,000
• Build out the additional floor (i.e., construct, furnish,
and equip offices and work areas): one-time cost,
$600,000
Option 2: Move to hoteling offices with upgraded office
technology
• Upgrade office electronic technology: one-time
cost, $190,000
Option 1 was expensive because under the
terms of the existing lease, Royce had to commit
to an entire floor if it wanted additional space.
Hoteling offices showed an overall financial ad-
vantage of $360,000 per year and a one-time
savings of $410,000 over shared or individual offices.
The Challenge
Vincent met with Mary Schrean to discuss the upcoming
meeting of partners and managers, where they would pre-
sent the results of the study and a proposal for action. In-
cluded in the report were proposed layouts for both shared
and hoteling offices. Vincent and Gray were planning to
recommend a hoteling office system, which would include
storage areas, state-of-the-art electronic office technology
for managers and administrative support staff, and cen-
tralized files. The rationale for their decision emphasized
the amount of time that managers were out of the office
and the high cost of maintaining the status quo and was
built around the following points:
1. Royce’s business is different: offices are empty from 40
to 60 percent of the time.
2. Real estate costs continue to escalate.
3. Projections indicate there will be increased need for of-
fices and cost-control strategies as the business develops.
4. Royce Consulting plays a leading role in helping orga-
nizations implement innovation.
“It’s still a go,” thought Vincent as he and the others
returned from a break. “The cost figures support it and
the growth figures support it. It’s simple—or is it? The de-
cision is the easy part. What is it about Royce Consulting
that will help or hinder its acceptance? In the long run, I
hope we strengthen our internal processes and don’t hin-
der our effectiveness by going ahead with these simple
changes.”
1.0
Respondents Sample Rank
Partners 6 4.3
Managers:
0–1 year 5 4.6
2–3 years 5 3.6
4� years 6 4.3
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522 Integrative Cases
Introduction
It was 7:50 on Monday morning. Frank Questin,
product engineering manager at Custom Chip,
Inc., was sitting in his office making a TO DO list
for the day. From 8:00 to 9:30 a.m., he would
have his weekly meeting with his staff of engi-
neers. After the meeting, Frank thought he would
begin developing a proposal for solving what he called
“Custom Chip’s manufacturing documentation problem”—
inadequate technical information regarding the steps to
manufacture many of the company’s products. Before he
could finish his TO DO list, he answered a phone call from
Custom Chip’s human resource manager, who asked him
about the status of two overdue performance appraisals and
reminded him that this day marked Bill Lazarus’s fifth-year
anniversary with the company. Following this call, Frank
hurried off to the Monday morning meeting with his staff.
Frank had been product engineering manager at Cus-
tom Chip for fourteen months. This was his first manage-
ment position, and he sometimes questioned his effective-
ness as a manager. Often he could not complete the tasks he
set out for himself due to interruptions and problems
brought to his attention by others. Even though he had not
been told exactly what results he was supposed to accom-
plish, he had a nagging feeling that he should have achieved
more after these fourteen months. On the other hand, he
thought maybe he was functioning pretty well in some of
his areas of responsibility given the complexity of the prob-
lems his group handled and the unpredictable changes in
the semiconductor industry—changes caused not only by
rapid advances in technology, but also by increased foreign
competition and a recent downturn in demand.
Company Background
Custom Chip, Inc., was a semiconductor manufacturer
specializing in custom chips and components used in
radars, satellite transmitters, and other radio frequency de-
vices. The company had been founded in 1977 and had
grown rapidly with sales exceeding $25 million in 1986.
Most of the company’s 300 employees were located in the
main plant in Silicon Valley, but overseas manufacturing
facilities in Europe and the Far East were growing in size
and importance. These overseas facilities assembled the less
complex, higher-volume products. New products and the
more complex ones were assembled in the main plant. Ap-
proximately one-third of the assembly employees were in
overseas facilities.
While the specialized products and markets of Custom
Chip provided a market niche that had thus far shielded
the company from the major downturn in the semiconduc-
tor industry, growth had come to a standstill. Because of
this, cost reduction had become a high priority.
The Manufacturing Process
Manufacturers of standard chips have long production
runs of a few products. Their cost per unit is low and
cost control is a primary determinant of success. In con-
trast, manufacturers of custom chips have extensive
product lines and produce small production runs of spe-
cial applications. Custom Chip, Inc., for example, had
manufactured over 2,000 different products in the last
five years. In any one quarter the company might sched-
ule 300 production runs for different products, as many
as one-third of which might be new or modified products
that the company had not made before. Because they
must be efficient in designing and manufacturing many
product lines, all custom chip manufacturers are highly
dependent on their engineers. Customers are often
first concerned with whether Custom Chip can design
and manufacture the needed product at all; second, with
whether they can deliver it on time; and only third, with
cost.
After a product is designed, there are two phases to
the manufacturing process. (See Exhibit 1.) The first is
wafer fabrication. This is a complex process in which cir-
cuits are etched onto the various layers added to a silicon
wafer. The number of steps that the wafer goes through
plus inherent problems in controlling various chemical
processes make it very difficult to meet the exacting spec-
ifications required for the final wafer. The wafers, which
are typically “just a few” inches in diameter when the fab-
rication process is complete, contain hundreds, sometimes
thousands, of tiny identical die. Once the wafer has been
tested and sliced up to produce these die, each die will be
used as a circuit component.
If the completed wafer passes the various quality
tests, it moves on to the assembly phase. In assembly, the
die from the wafers, very small wires, and other compo-
nents are attached to a circuit in a series of precise oper-
ations. This finished circuit is the final product of Custom
Chip, Inc.
Each product goes through many independent and del-
icate operations, and each step is subject to operator or
machine error. Due to the number of steps and tests in-
volved, the wafer fabrication takes eight to twelve weeks
*Copyright Murray Silverman, San Francisco State University. Reprinted by
permission.
Integrative Case 2.0
Custom Chip, Inc.*
2.0
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Pre-production
•
•
Application engineers design and produce prototype
Product engineers translate design into manufacturing instructions
Production
• Wafer fabrication
• Assembly
Circuits are etched onto
layers added to . . .
. . . a silicon wafer.
Wafer is tested and
then cut up into “die.”
Die, wires, and other
components are
attached to circuits.
8
–
12
w
ee
ks
4
–
6
w
ee
ks
Integrative Cases 523
and the assembly process takes four to six weeks. Because
of the exacting specifications, products are rejected for the
slightest flaw. The likelihood that every product starting
the run will make it through all of the processes and still
meet specifications is often quite low. For some products,
average yield1 is as low as 40 percent, and actual yields can
vary considerably from one run to another. At Custom
Chip, the average yield for all products is in the 60 to 70
percent range.
Because it takes so long to make a custom chip, it is es-
pecially important to have some control of these yields. For
example, if a customer orders one thousand units of a
product and typical yields for that product average 50 per-
cent, Custom Chip will schedule a starting batch of 2,200
units. With this approach, even if the yield falls as low as
45.4 percent (45.4 percent of 2,200 is 1,000) the company
can still meet the order. If the actual yield falls below 45.4
percent, the order will not be completed in that run, and a
very small, costly run of the item will be needed to com-
plete the order. The only way the company can effectively
control these yields and stay on schedule is for the engi-
neering groups and operations to cooperate and coordinate
their efforts efficiently.
Role of the Product Engineer
The product engineer’s job is defined by its relationship to
applications engineering and operations. The applications
engineers are responsible for designing and developing pro-
totypes when incoming orders are for new or modified
products. The product engineer’s role is to translate the ap-
plications engineering group’s design into a set of manufac-
turing instructions and then to work alongside manufactur-
2.0
EXHIBIT 1
Manufacturing
Process
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President
VP
Operations
VP
Engineering
Sam Porter
Applications
Engineering
Pete Chang
Manager
Manufacturing
Rod Cameron
Manager
Brian Faber
et al.
Jerry West
et al.
Sharon Hart
Bill Lazarus
FacilitiesProductionScheduling
Product
Engineering
Frank Questin
Manager
524 Integrative Cases
ing to make sure that engineering-related problems get
solved. The product engineers’ effectiveness is ultimately
measured by their ability to control yields on their assigned
products. The organization chart in Exhibit 2 shows the en-
gineering and operations departments. Exhibit 3 summa-
rizes the roles and objectives of manufacturing, applications
engineering, and product engineering.
The product engineers estimate that 70 to 80 percent
of their time is spent in solving day-to-day manufacturing
problems. The product engineers have cubicles in a room
directly across the hall from the manufacturing facility. If a
manufacturing supervisor has a question regarding how to
build a product during a run, that supervisor will call the
engineer assigned to that product. If the engineer is avail-
able, he or she will go to the manufacturing floor to help
answer the question. If the engineer is not available, the
production run may be stopped and the product put aside
so that other orders can be manufactured. This results in
delays and added costs. One reason that product engineers
are consulted is that documentation—the instructions for
manufacturing the product—is unclear or incomplete.
The product engineer will also be called if a product
is tested and fails to meet specifications. If a product fails
to meet test specifications, production stops, and the en-
gineer must diagnose the problem and attempt to find a
solution. Otherwise, the order for that product may be
only partially met. Test failures are a very serious prob-
lem, which can result in considerable cost increases and
2.0
EXHIBIT 2
Custom Chip, Inc., Partial
Organization Chart
Department Role Primary Objective
Applications
Engineering
Product
Engineering
Manufacturing
EXHIBIT 3
Departmental Roles and
Objectives
Designs and develops prototypes
for new or modified products
Translates designs into manufac-
turing instructions and works
alongside manufacturing to
solve “engineering-
related”problems
Executes designs
Satisfy customer needs
through innovative designs
Maintain and control yields on
assigned products
Meet productivity standards
and time schedules
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Integrative Cases 525
schedule delays for customers. Products do not test prop-
erly for many reasons, including operator errors, poor
materials, a design that is very difficult to manufacture, a
design that provides too little margin for error, or a com-
bination of these.
On a typical day, the product engineer may respond to
half a dozen questions from the manufacturing floor, and
two to four calls to the testing stations. When interviewed,
the engineers expressed a frustration with this situation.
They thought they spent too much time solving short-term
problems, and, consequently, they were neglecting other
important parts of their jobs. In particular, they felt they
had little time in which to:
• Coordinate with applications engineers during the de-
sign phase. The product engineers stated that their
knowledge of manufacturing could provide valuable in-
put to the applications engineer. Together they could im-
prove the manufacturability and thus, the yields of the
new or modified product.
• Engage in yield improvement projects. This would in-
volve an in-depth study of the existing process for a spe-
cific product in conjunction with an analysis of past
product failures.
• Accurately document the manufacturing steps for their
assigned products, especially for those that tend to have
large or repeat orders. They said that the current state of
the documentation is very poor. Operators often have to
build products using only a drawing showing the final
circuit, along with a few notes scribbled in the margins.
While experienced operators and supervisors may be
able to work with this information, they often make in-
correct guesses and assumptions. Inexperienced opera-
tors may not be able to proceed with certain products
because of this poor documentation.
Weekly Meeting
As manager of the product engineering group, Frank
Questin had eight engineers reporting to him, each respon-
sible for a different set of Custom Chip products. Accord-
ing to Frank:
When I took over as manager, the product engineers were
not spending much time together as a group. They were re-
quired to handle operations problems on short notice. This
made it difficult for the entire group to meet due to con-
stant requests for assistance from the manufacturing area.
I thought that my engineers could be of more assis-
tance and support to each other if they all spent more time
together as a group, so one of my first actions as a manager
was to institute a regularly scheduled weekly meeting. I let
the manufacturing people know that my staff would not
respond to requests for assistance during the meeting.
The meeting on this particular Monday morning fol-
lowed the usual pattern. Frank talked about upcoming
company plans, projects, and other news that might be of
interest to the group. He then provided data about current
yields for each product and commended those engineers
who had maintained or improved yields on most of their
products. This initial phase of the meeting lasted
until about 8:30 a.m. The remainder of the meet-
ing was a meandering discussion of a variety of
topics. Since there was no agenda, engineers felt
comfortable in raising issues of concern to them.
The discussion started with one of the engi-
neers describing a technical problem in the as-
sembly of one of his products. He was asked a
number of questions and given some advice. An-
other engineer raised the topic of a need for new testing
equipment and described a test unit he had seen at a recent
demonstration. He claimed the savings in labor and im-
proved yields from this machine would allow it to pay for
itself in less than nine months. Frank immediately replied
that budget limitations made such a purchase unfeasible,
and the discussion moved into another area. They briefly
discussed the increasing inaccessibility of the applications
engineers and then talked about a few other topics.
In general, the engineers valued these meetings. One
commented that:
The Monday meetings give me a chance to hear what’s on
everyone’s mind and to find out about and discuss company-
wide news. It’s hard to reach any conclusions because the
meeting is a freewheeling discussion. But I really appreciate
the friendly atmosphere with my peers.
Coordination with Applications Engineers
Following the meeting that morning, an event occurred
that highlighted the issue of the inaccessibility of the appli-
cations engineers. An order of 300 units of custom chip
1210A for a major customer was already overdue. Because
the projected yield of this product was 70 percent, they had
started with a run of 500 units. A sample tested at one of
the early assembly points indicated a major performance
problem that could drop the yield to below 50 percent. Bill
Lazarus, the product engineer assigned to the 1210A, ex-
amined the sample and determined that the problem could
be solved by redesigning the wiring. Jerry West, the appli-
cations engineer assigned to that product category, was re-
sponsible for revising the design. Bill tried to contact Jerry,
but he was not immediately available, and didn’t get back
to Bill until later in the day. Jerry explained that he was on
a tight schedule trying to finish a design for a customer
who was coming into town in two days, and could not get
to “Bill’s problem” for a while.
Jerry’s attitude that the problem belonged to product
engineering was typical of the applications engineers.
From their point of view there were a number of reasons
for making the product engineers’ needs for assistance a
lower priority. In the first place, applications engineers
2.0
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526 Integrative Cases
were rewarded and acknowledged primarily for satisfying
customer needs through designing new and modified
products. They got little recognition for solving manufac-
turing problems. Second, applications engineering was
perceived to be more glamorous than product en-
gineering because of opportunities to be credited
with innovative and groundbreaking designs. Fi-
nally, the size of the applications engineering
group had declined over the past year, causing
the workload on each engineer to increase con-
siderably. Now they had even less time to re-
spond to the product engineers’ requests.
When Bill Lazarus told Frank about the situa-
tion, Frank acted quickly. He wanted this order to be in
process again by tomorrow, and he knew manufacturing
was also trying to meet this goal. He walked over to see Pete
Chang, head of applications engineering (see the organiza-
tional chart in Exhibit 2). Meetings like this with Pete to
discuss and resolve interdepartmental issues were common.
Frank found Pete at a workbench talking with one of
his engineers. He asked Pete if he could talk to him in pri-
vate, and they walked to Pete’s office.
Frank: We’ve got a problem in manufacturing in getting
out an order of 1210As. Bill Lazarus is getting lit-
tle or no assistance from Jerry West. I’m hoping
you can get Jerry to pitch in and help Bill. It should
take no more than a few hours of his time.
Pete: I do have Jerry on a short leash trying to keep him
focused on getting out a design for Teletronics. We
can’t afford to show up empty-handed at our meet-
ing with them in two days.
Frank: Well, we are going to end up losing one customer
in trying to please another. Can’t we satisfy every-
one here?
Pete: Do you have an idea?
Frank: Can’t you give Jerry some additional support on
the Teletronics design?
Pete: Let’s get Jerry in here to see what we can do.
Pete brought Jerry back to the office, and together they
discussed the issues and possible solutions. When Pete
made it clear to Jerry that he considered the problem with
the 1210As a priority, Jerry offered to work on the 1210A
problem with Bill. He said, “This will mean I’ll have to stay
a few hours past 5:00 this evening, but I’ll do what’s re-
quired to get the job done.”
Frank was glad he had developed a collaborative re-
lationship with Pete. He had always made it a point to
keep Pete informed about activities in the product engi-
neering group that might affect the applications engi-
neers. In addition, he would often chat with Pete infor-
mally over coffee or lunch in the company cafeteria. This
relationship with Pete made Frank’s job easier. He wished
he had the same rapport with Rod Cameron, the manu-
facturing manager.
Coordination with Manufacturing
The product engineers worked closely on a day-to-day ba-
sis with the manufacturing supervisors and workers. The
problems between these two groups stemmed from an in-
herent conflict between their objectives (see Exhibit 3). The
objective of the product engineers was to maintain and im-
prove yields. They had the authority to stop production of
any run that did not test properly. Manufacturing, on the
other hand, was trying to meet productivity standards and
time schedules. When a product engineer stopped a manu-
facturing run, he or she was possibly preventing the manu-
facturing group from reaching its objectives.
Rod Cameron, the current manufacturing manager,
had been promoted from his position as a manufacturing
supervisor a year ago. His views on the product engineers:
The product engineers are perfectionists. The minute a test
result looks a little suspicious they want to shut down the
factory. I’m under a lot of pressure to get products out the
door. If they pull a few $50,000 orders off the line when
they are within a few days of reaching shipping, I’m liable
to miss my numbers by $100,000 that month.
Besides that, they are doing a lousy job of document-
ing the manufacturing steps. I’ve got a lot of turnover, and
my new operators need to be told or shown exactly what
to do for each product. The instructions for a lot of our
products are a joke.
At first, Frank found Rod very difficult to deal with. Rod
found fault with the product engineers for many problems
and sometimes seemed rude to Frank when they talked. For
example, Rod might tell Frank to “make it quick; I haven’t
got much time.” Frank tried not to take Rod’s actions per-
sonally, and through persistence was able to develop a more
amicable relationship with him. According to Frank:
Sometimes, my people will stop work on a product because
it doesn’t meet test results at that stage of manufacturing.
If we study the situation, we might be able to maintain
yields or even save an entire run by adjusting the manufac-
turing procedures. Rod tries to bully me into changing my
engineers’ decisions. He yells at me or criticizes the compe-
tence of my people, but I don’t allow his temper or ravings
to influence my best judgment in a situation. My strategy
in dealing with Rod is to try not to respond defensively to
him. Eventually he cools down, and we can have a reason-
able discussion of the situation.
Despite this strategy, Frank could not always resolve
his problems with Rod. On these occasions, Frank took the
issue to his own boss, Sam Porter, the vice president in
charge of engineering. However, Frank was not satisfied
with the support he got from Sam. Frank said:
Sam avoids confrontations with the operations VP. He
doesn’t have the influence or clout with the other VPs or
the president to do justice to engineering’s needs in the
organization.
2.0
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Integrative Cases 527
Early that afternoon, Frank again found himself trying
to resolve a conflict between engineering and manufactur-
ing. Sharon Hart, one of his most effective product engi-
neers, was responsible for a series of products used in
radars—the 3805A–3808A series. Today she had stopped a
large run of 3806As. The manufacturing supervisor, Brian
Faber, went to Rod Cameron to complain about the impact
of this stoppage on his group’s productivity. Brian felt that
yields were low on that particular product because the
production instructions were confusing to his operators,
and that even with clearer instructions, his operators
would need additional training to build it satisfactorily. He
stressed that the product engineer’s responsibility was to
adequately document the production instructions and pro-
vide training. For these reasons, Brian asserted that prod-
uct engineering, and not manufacturing, should be ac-
countable for the productivity loss in the case of these
3806As.
Rod called Frank to his office, where he joined the dis-
cussion with Sharon, Brian, and Rod. After listening to the
issues, Frank conceded that product engineering had re-
sponsibility for documenting and training. He also ex-
plained, even though everyone was aware of it, that the
product engineering group had been operating with re-
duced staff for over a year now, so training and documen-
tation were lower priorities. Because of this staffing situa-
tion, Frank suggested that manufacturing and product
engineering work together and pool their limited resources
to solve the documentation and training problem. He was
especially interested in using a few of the long-term experi-
enced workers to assist in training newer workers. Rod and
Brian opposed his suggestion. They did not want to take
experienced operators off of the line because it would de-
crease productivity. The meeting ended when Brian
stormed out, saying that Sharon had better get the 3806As
up and running again that morning.
Frank was particularly frustrated by this episode with
manufacturing. He knew perfectly well that his group had
primary responsibility for documenting the manufacturing
steps for each product. A year ago he told Sam Porter that
the product engineers needed to update and standardize
all of the documentation for manufacturing products. At
that time, Sam told Frank that he would support his ef-
forts to develop the documentation, but would not in-
crease his staff. In fact, Sam had withheld authorization to
fill a recently vacated product engineering slot. Frank was
reluctant to push the staffing issue because of Sam’s
adamance about reducing costs. “Perhaps,” Frank
thought, “if I develop a proposal clearly showing the ben-
efits of a documentation program in manufacturing and
detailing the steps and resources required to implement
the program, I might be able to convince Sam to provide
us with more resources.” But Frank could never find the
time to develop that proposal. And so he re-
mained frustrated.
Later in the Day
Frank was reflecting on the complexity of his job
when Sharon came to the doorway to see if he
had a few moments. Before he could say “Come
in,” the phone rang. He looked at the clock. It
was 4:10 p.m. Pete was on the other end of the
line with an idea he wanted to try out on Frank, so Frank
said he could call him back shortly. Sharon was upset, and
told him that she was thinking of quitting because the job
was not satisfying for her.
Sharon said that although she very much enjoyed
working on yield improvement projects, she could find no
time for them. She was tired of the applications engineers
acting like “prima donnas,” too busy to help her solve
what they seemed to think were mundane day-to-day man-
ufacturing problems. She also thought that many of the
day-to-day problems she handled wouldn’t exist if there
was enough time to document manufacturing procedures
to begin with.
Frank didn’t want to lose Sharon, so he tried to get
into a frame of mind where he could be empathetic to her.
He listened to her and told her that he could understand
her frustration in this situation. He told her the situation
would change as industry conditions improved. He told
her that he was pleased that she felt comfortable in venting
her frustrations with him, and he hoped she would stay
with Custom Chip.
After Sharon left, Frank realized that he had told Pete
that he would call back. He glanced at the TO DO list he
had never completed, and realized that he hadn’t spent
time on his top priority—developing a proposal relating to
solving the documentation problem in manufacturing.
Then, he remembered that he had forgotten to acknowl-
edge Bill Lazarus’s fifth-year anniversary with the com-
pany. He thought to himself that his job felt like a roller
coaster ride, and once again he pondered his effectiveness
as a manager.
Note
1. Yield refers to the ratio of finished products that meet
specifications relative to the number that initially en-
tered the manufacturing process.
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528 Integrative Cases
“To make money and have fun.” W. L. Gore
The First Day on the Job
Bursting with resolve, Jack Dougherty, a newly
minted M.B.A. from the College of William and
Mary, reported to his first day at W. L. Gore &
Associates on July 26, 1976. He presented himself
to Bill Gore, shook hands firmly, looked him in the eye,
and said he was ready for anything.
Jack was not ready, however, for what happened next.
Gore replied, “That’s fine, Jack, fine. Why don’t you look
around and find something you’d like to do?” Three frustrat-
ing weeks later he found that something: trading in his dark
blue suit for jeans, he loaded fabric into the mouth of a ma-
chine that laminated the company’s patented GORE-TEX®1
membrane to fabric. By 1982, Jack had become responsible
for all advertising and marketing in the fabrics group. This
story is part of the folklore of W. L. Gore & Associates.
Today the process is more structured. Regardless of the
job for which they are hired, new Associates2 take a journey
through the business before settling into their own positions.
A new sales Associate in the fabrics division may spend six
weeks rotating through different areas before beginning to
concentrate on sales and marketing. Among other things the
newcomer learns is how GORE-TEX fabric is made, what it
can and cannot do, how Gore handles customer complaints,
and how it makes its investment decisions.
Anita McBride related her early experience at
W. L. Gore & Associates this way: “Before I came to Gore,
I had worked for a structured organization. I came here,
and for the first month it was fairly structured because I was
going through training and this is what we do and this is
how Gore is and all of that. I went to Flagstaff for that
training. After a month I came down to Phoenix and my
sponsor said, ‘Well, here’s your office; it’s a wonderful of-
fice,’ and ‘Here’s your desk,’ and walked away. And I
thought, ‘Now what do I do?’ You know, I was waiting for
a memo or something, or a job description. Finally after an-
other month I was so frustrated, I felt, ‘What have I gotten
myself into?’ And so I went to my sponsor and I said, ‘What
the heck do you want from me? I need something from
you.’ And he said, ‘If you don’t know what you’re supposed
to do, examine your commitment, and opportunities.’”
Company Background
W. L. Gore & Associates was formed by the late Wilbert
L. Gore and his wife in 1958. The idea for the business
sprang from his personal, organizational, and technical
experiences at E. I. DuPont de Nemours, and, particu-
larly, his discovery of a chemical compound with unique
properties. The compound, now widely know as GORE-
TEX, has catapulted W. L. Gore & Associates to a high
ranking on the Forbes 1998 list of the 500 largest private
companies in the United States, with estimated revenues
of more than $1.1 billion. The company’s avant-garde
culture and people management practices resulted in
W. L. Gore being ranked as the seventh best company
to work for in America by Fortune in a January 1998
article.
Wilbert Gore was born in Meridian, Idaho, near Boise
in 1912. By age six, according to his own account, he was
an avid hiker in the Wasatch Mountain Range in Utah. In
those mountains, at a church camp, he met Genevieve, his
future wife. In 1935, they got married—in their eyes, a
partnership. He would make breakfast and Vieve, as every-
one called her, would make lunch. The partnership lasted a
lifetime.
He received both a bachelor of science in chemical en-
gineering in 1933 and a master of science in physical chem-
istry in 1935 from the University of Utah. He began his
professional career at American Smelting and Refining in
1936. He moved to Remington Arms Company in 1941
and then to E. I. DuPont de Nemours in 1945. He held po-
sitions as research supervisor and head of operations re-
search. While at DuPont, he worked on a team to develop
applications for polytetrafluoroethylene, referred to as
PTFE in the scientific community and known as “Teflon”
by DuPont’s consumers. (Consumers know it under other
names from other companies.) On this team Wilbert Gore,
called Bill by everyone, felt a sense of excited commitment,
personal fulfillment, and self-direction. He followed the de-
velopment of computers and transistors and felt that PTFE
had the ideal insulating characteristics for use with such
equipment.
He tried many ways to make a PTFE-coated ribbon ca-
ble without success. A breakthrough came in his home
basement laboratory while he was explaining the problem
to his nineteen-year-old son, Bob. The young Gore saw
some PTFE sealant tape made by 3M and asked his father,
“Why don’t you try this tape?” Bill then explained that
everyone knew that you cannot bond PTFE to itself. Bob
went on to bed.
Bill Gore remained in his basement lab and proceeded
to try what everyone knew would not work. At about
Integrative Case 3.0
W. L. Gore & Associates, Inc. Entering 1998*
*Prepared by Frank Shipper, Department of Management and Marketing,
Franklin P. Perdue School of Business, Salisbury State University and Charles
C. Manz, Nirenberg Professor of Business Leadership, School of
Management, University of Massachusetts. Used with permission.
3.0
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Integrative Cases 529
4 a.m. he woke up his son, waving a small piece of cable
around and saying excitedly, “It works, it works.” The fol-
lowing night father and son returned to the basement lab
to make ribbon cable coated with PTFE. Because the
breakthrough idea came from Bob, the patent for the cable
was issued in Bob’s name.
For the next four months Bill Gore tried to persuade
DuPont to make a new product—PTFE-coated ribbon ca-
ble. By this time in his career Bill Gore knew some of the
decision makers at DuPont. After talking to a number of
them, he came to realize that DuPont wanted to remain a
supplier of raw materials and not a fabricator.
Bill and his wife, Vieve, began discussing the possibility
of starting their own insulated wire and cable business. On
January 1, 1958, their wedding anniversary, they founded
W. L. Gore & Associates. The basement of their home served
as their first facility. After finishing dinner that night, Vieve
turned to her husband of twenty-three years and said, “Well,
let’s clear up the dishes, go downstairs, and get to work.”
Bill Gore was forty-five years old with five children to
support when he left DuPont. He put aside a career of sev-
enteen years, and a good, secure salary. To finance the first
two years of the business, he and Vieve mortgaged their
house and took $4,000 from savings. All their friends told
them not to do it.
The first few years were rough. In lieu of salary, some
of their employees accepted room and board in the Gore
home. At one point eleven Associates were living and work-
ing under one roof. One afternoon, while sifting PTFE pow-
der, Vieve received a call from the City of Denver’s water
department. The caller indicated that he was interested in
the ribbon cable, but wanted to ask some technical ques-
tions. Bill was out running some errands. The caller asked
for the product manager. Vieve explained that he was out at
the moment. Next he asked for the sales manager and fi-
nally, the president. Vieve explained that they were also out.
The caller became outraged and hollered, “What kind of
company is this anyway?” With a little diplomacy the Gores
were able eventually to secure an order for $100,000. This
order put the company on a profitable footing and it began
to take off.
W. L. Gore & Associates continued to grow and de-
velop new products, primarily derived from PTFE. Its best-
known product would become GORE-TEX fabric. In
1986, Bill Gore died while backpacking in the Wind River
Mountains of Wyoming. He was then Chairman of the
Board. His son, Bob, continued to occupy the position of
president. Vieve remained as the only other officer, secretary-
treasurer.
Company Products
In 1998, W. L. Gore & Associates has a fairly extensive line
of high-tech products that are used in a variety of applica-
tions, including electronic, waterproofing, industrial filtra-
tion, industrial seals, and coatings.
Electronic & Wire Products
Gore electronic products have been found in unconven-
tional places where conventional products will not do—
in space shuttles, for example, where Gore wire and ca-
ble assemblies withstand the heat of ignition
and the cold of space. In addition, they have
been found in fast computers, transmitting sig-
nals at up to 93 percent of the speed of light.
Gore cables have even gone underground, in oil-
drilling operations, and underseas, on sub-
marines that require superior microwave signal
equipment and no-fail cables that can survive
high pressure. The Gore electronic products di-
vision has a history of anticipating future customer needs
with innovative products. Gore electronic products
have been well received in industry for their ability to last
under adverse conditions. For example, Gore has be-
come, according to Sally Gore, leader in Human Re-
sources and Communications, “one of the largest manu-
facturers of ultrasound cable in the world, the reason
being that Gore’s electronic cables’ signal transmission is
very, very accurate and it’s very thin and extremely flex-
ible and has a very, very long flex life. That makes it ideal
for things like ultrasound and many medical electronic
applications.”
Medical Products
The medical division began on the ski slopes of Col-
orado. Bill was skiing with a friend, Dr. Ben Eiseman of
Denver General Hospital. As Bill Gore told the story:
“We were just to start a run when I absentmindedly
pulled a small tubular section of GORE-TEX out of my
pocket and looked at it. ‘What is that stuff?’ Ben asked.
So I told him about its properties. ‘Feels great,’ he said.
‘What do you use it for?’ ‘Got no idea,’ I said. ‘Well give
it to me,’ he said, ‘and I’ll try it in a vascular graft on a
pig.’ Two weeks later, he called me up. Ben was pretty ex-
cited. ‘Bill,’ he said, ‘I put it in a pig and it works. What
do I do now?’ I told him to get together with Pete Cooper
in our Flagstaff plant, and let them figure it out.” Not
long after, hundreds of thousands of people throughout
the world began walking around with GORE-TEX vas-
cular grafts.
GORE-TEX’s expanded PTFE proved to be an ideal
replacement for human tissue in many situations. In pa-
tients suffering from cardiovascular disease the diseased
portion of arteries has been replaced by tubes of ex-
panded PTFE—strong, biocompatible structures capable
of carrying blood at arterial pressures. Gore has a strong
position in this product segment. Other Gore medical
products have included patches that can literally mend
broken hearts by sealing holes, and sutures that allow for
tissue attachment and offer the surgeon silk-like handling
coupled with extreme strength. In 1985, W. L. Gore &
Associates won Britain’s Prince Philip Award for Poly-
3.0
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530 Integrative Cases
mers in the Service of Mankind. The award recognized es-
pecially the lifesaving achievements of the Gore medical
products team.
Two recently developed products by this division are a
new patch material that is intended to incorpo-
rate more tissue into the graft more quickly and
the GORE™ RideOn®3 Cable System for bicy-
cles. According to Amy LeGere of the medical di-
vision, “All the top pro riders in the world are us-
ing it. It was introduced just about a year ago and
it has become an industry standard.” This prod-
uct had a positive cash flow very soon after its in-
troduction. Some Associates who were also out-
door sports enthusiasts developed the product and realized
that Gore could make a great bicycle cable that would have
70 percent less friction and need no lubrication. The Asso-
ciates maintain that the profitable development, produc-
tion, and marketing of such specialized niche products are
possible because of the lack of bureaucracy and associated
overhead, Associate commitment, and the use of product
champions.
Industrial Products
The output of the industrial products division has included
sealants, filter bags, cartridges, clothes, and coatings. In-
dustrial filtration products, such as GORE-TEX filter bags,
have reduced air pollution and recovered valuable solids
from gases and liquids more completely than alternatives—
and they have done so economically. In the future they may
make coal-burning plants completely smoke-free, con-
tributing to a cleaner environment. The specialized and
critical applications of these products, along with Gore’s
reputation for quality, have had a strong influence on in-
dustrial purchasers.
This division has developed a unique joint sealant—a
flexible cord of porous PTFE—that can be applied as a
gasket to the most complex shapes, sealing them to pre-
vent leakage of corrosive chemicals, even at extreme tem-
perature and pressure. Steam valves packed with GORE-
TEX have been sold with a lifetime guarantee, provided
the valve is used properly. In addition, this division has in-
troduced Gore’s first consumer product—GLIDE®4—a
dental floss. “That was a product that people knew about
for a while and they went the route of trying to persuade
industry leaders to promote the product, but they didn’t
really pursue it very well. So out of basically default al-
most, Gore decided, Okay, they’re not doing it right. Let’s
go in ourselves. We had a champion, John Spencer, who
took that and pushed it forward through the dentists’ of-
fices and it just skyrocketed. There were many more peo-
ple on the team but it was basically getting that one cham-
pion who focused on that product and got it out. They
told him it ‘couldn’t be done,’ ‘It’s never going to work,’
and I guess that’s all he needed. It was done and it
worked,” said Ray Wnenchak of the industrial products
division. Amy LeGere added, “The champion worked very
closely with the medical people to understand the medical
market like claims and labeling so that when the product
came out on the market it would be consistent with our
medical products. And that’s where, when we cross divi-
sions, we know whom to work with and with whom we
combine forces so that the end result takes the strengths of
all of our different teams.” As of 1998, GLIDE has cap-
tured a major portion of the dental floss market and the
mint flavor is the largest-selling variety in the U.S. market
based on dollar volume.
Fabric Products
The Gore fabrics division has supplied laminates to manu-
facturers of foul weather gear, ski wear, running suits,
footwear, gloves, and hunting and fishing garments. Fire-
fighters and U.S. Navy pilots have worn GORE-TEX fab-
ric gear, as have some Olympic athletes. The U.S. Army
adopted a total garment system built around a GORE-TEX
fabric component. Employees in high-tech clean rooms
also wear GORE-TEX garments.
GORE-TEX membrane has 9 billion pores randomly
dotting each square inch and is feather-light. Each pore is
700 times larger than a water vapor molecule, yet thou-
sands of times smaller than a water droplet. Wind and
water cannot penetrate the pores, but perspiration can
escape.
As a result, fabrics bonded with GORE-TEX mem-
brane are waterproof, windproof, and breathable. The
laminated fabrics bring protection from the elements to a
variety of products—from survival gear to high-fashion
rainwear. Other manufacturers, including 3M, Burlington
Industries, Akzo Nobel Fibers, and DuPont, have brought
out products to compete with GORE-TEX fabrics. Earlier,
the toughest competition came from firms that violated
the patents on GORE-TEX. Gore successfully challenged
them in court. In 1993, the basic patent on the process for
manufacturing ran out. Nevertheless, as Sally Gore ex-
plained, “what happens is you get an initial process patent
and then as you begin to create things with this process
you get additional patents. For instance we have patents
protecting our vascular graft, different patents for protect-
ing GORE-TEX patches, and still other patents protecting
GORE-TEX industrial sealants and filtration material.
One of our patent attorneys did a talk recently, a year or
so ago, when the patent expired and a lot of people were
saying, Oh, golly, are we going to be in trouble! We would
be in trouble if we didn’t have any patents. Our attorney
had this picture with a great big umbrella, sort of a para-
chute, with Gore under it. Next he showed us lots of little
umbrellas scattered all over the sky. So you protect certain
niche markets and niche areas, but indeed competition in-
creases as your initial patents expire.” Gore, however, has
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Integrative Cases 531
continued to have a commanding position in the active-
wear market.
To meet a variety of customer needs, Gore introduced
a new family of fabrics in the 1990s (Exhibit 1). The in-
troduction posed new challenges. According to Bob Win-
terling, “we did such a great job with the brand GORE-
TEX that we actually have hurt ourselves in many ways. By
that I mean it has been very difficult for us to come up with
other new brands, because many people didn’t even know
Gore. We are the GORE-TEX company. One thing we de-
cided to change about Gore four or five years ago was in-
stead of being the GORE-TEX company we wanted to be-
come the Gore company and that underneath the Gore
company we had an umbrella of products that fall out of
being the great Gore company. So it was a shift in how we
positioned GORE-TEX. Today GORE-TEX is stronger
than ever as it’s turned out, but now we’ve ventured into
such things as WindStopper®5 fabric that is very big in the
golf market. It could be a sweater or a fleece piece or even
a knit shirt with the WindStopper behind it or closer to
your skin and what it does is it stops the wind. It’s not wa-
terproof; it’s water resistant. What we’ve tried to do is po-
sition the Gore name and beneath that all of the great
products of the company.”
W. L. Gore & Associates’ Approach
to Organization and Structure
W. L. Gore & Associates has never had titles, hierarchy,
or any of the conventional structures associated with en-
terprises of its size. The titles of president and secretary-
treasurer continue to be used only because they are re-
quired by the laws of incorporation. In addition, Gore has
never had a corporate-wide mission or code of ethics
statement, nor has Gore ever required or prohibited busi-
ness units from developing such statements for them-
selves. Thus, the Associates of some business units who
have felt a need for such statements have developed them
on their own. When questioned about this issue, one As-
sociate stated, “The company belief is that (1) its four ba-
sic operating principles cover ethical practices
required of people in business; (2) it will not tol-
erate illegal practices.” Gore’s management
style has been referred to as unmanagement. The
organization has been guided by Bill’s experi-
ences on teams at DuPont and has evolved as
needed.
For example, in 1965 W. L. Gore & Associ-
ates was a thriving company with a facility on Pa-
per Mill Road in Newark, Delaware. One Monday morn-
ing in the summer, Bill Gore was taking his usual walk
through the plant. All of a sudden he realized that he did
not know everyone in the plant. The team had become too
big. As a result, he established the practice of limiting plant
size to approximately two hundred Associates. Thus was
born the expansion policy of “Get big by staying small.”
The purpose of maintaining small plants was to accentuate
a close-knit atmosphere and encourage communication
among Associates in a facility.
At the beginning of 1998, W. L. Gore & Associates
consisted of over forty-five plants worldwide with approx-
imately seven thousand Associates. In some cases, the
plants are grouped together on the same site (as in
Flagstaff, Arizona, with ten plants). Overseas, Gore’s man-
ufacturing facilities are located in Scotland, Germany, and
China, and the company has two joint ventures in Japan
(Exhibit 2). In addition, it has sales facilities located in fif-
teen other countries. Gore manufactures electronic, med-
ical, industrial, and fabric products. In addition, it has nu-
merous sales offices worldwide, including offices in Eastern
Europe and Russia.
3.0
Brand Name Activity/Conditions Breathability Water Protection Wind Protection
GORE-TEX®
Immersion™
technology
Ocean
technology
WindStopper®
Gore Dryloft™
Activent™
EXHIBIT 1
Gore’s Family of Fabrics
rain, snow, cold, windy
for fishing and paddle
sports
for offshore and coastal
sailing
cool/cold, windy
cold, windy, light
precipitation
cool/cold, windy, light
precipitation
very breathable
very breathable
very breathable
very breathable
extremely breathable
extremely breathable
waterproof
waterproof
waterproof
no water resistance
water-resistant
water-resistant
windproof
windproof
windproof
windproof
windproof
windproof
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532 Integrative Cases
The Lattice Organization
W. L. Gore & Associates has been described not only as
unmanaged, but also as unstructured. Bill Gore referred to
the structure as a lattice organization (Exhibit 3). The char-
acteristics of this structure are:
1. Direct lines of communication—person to person—no
intermediary
2. No fixed or assigned authority
3. Sponsors, not bosses
4. Natural leadership defined by followership
5. Objectives set by those who must “make them happen”
6. Tasks and functions organized through commitments
The structure within the lattice is complex and evolves
from interpersonal interactions, self commitment to group-
known responsibilities, natural leadership, and group-
imposed discipline. Bill Gore once explained the structure
this way: “Every successful organization has an under-
ground lattice. It’s where the news spreads like lightning,
where people can go around the organization to get things
done.” An analogy might be drawn to a structure of con-
stant cross-area teams—the equivalent of quality circles go-
ing on all the time. When a puzzled interviewer told Bill
that he was having trouble understanding how planning
and accountability worked, Bill replied with a grin: “So
am I. You ask me how it works? Every which way.”
The lattice structure has not been without its critics. As
Bill Gore stated, “I’m told from time to time that a lattice
organization can’t meet a crisis well because it takes too
long to reach a consensus when there are no bosses. But
this isn’t true. Actually, a lattice by its very nature works
particularly well in a crisis. A lot of useless effort is avoided
because there is no rigid management hierarchy to conquer
before you can attack a problem.”
The lattice has been put to the test on a number of oc-
casions. For example, in 1975, Dr. Charles Campbell of the
University of Pittsburgh reported that a GORE-TEX arter-
ial graft had developed an aneurysm. If the bubble-like
protrusion continued to expand, it would explode.
Obviously, this life-threatening situation had to be re-
solved quickly and permanently. Within only a few days of
Dr. Campbell’s first report, he flew to Newark to present
his findings to Bill and Bob Gore and a few other Associ-
ates. The meeting lasted two hours. Dan Hubis, a former
policeman who had joined Gore to develop new produc-
tion methods, had an idea before the meeting was over. He
returned to his work area to try some different production
techniques. After only three hours and twelve tries, he had
developed a permanent solution. In other words, in three
hours a potentially damaging problem to both patients and
the company was resolved. Furthermore, Hubis’s re-
designed graft went on to win widespread acceptance in
the medical community.
Eric Reynolds, founder of Marmot Mountain Works
Ltd. of Grand Junction, Colorado, and a major Gore cus-
tomer, raised another issue: “I think the lattice has its prob-
3.0
EXHIBIT 2
International Locations of W. L. Gore & Associates
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Integrative Cases 533
lems with the day-to-day nitty-gritty of getting things done
on time and out the door. I don’t think Bill realizes how the
lattice system affects customers. I mean, after you’ve estab-
lished a relationship with someone about product quality,
you can call up one day and suddenly find that someone
new to you is handling your problem. It’s frustrating to
find a lack of continuity.” He went on to say: “But I have
to admit that I’ve personally seen at Gore remarkable ex-
amples of people coming out of nowhere and excelling.”
When Bill Gore was asked if the lattice structure could
be used by other companies, he answered: “No. For exam-
ple, established companies would find it very difficult to
use the lattice. Too many hierarchies would be destroyed.
When you remove titles and positions and allow people to
follow who they want, it may very well be someone other
than the person who has been in charge. The lattice works
for us, but it’s always evolving. You have to expect prob-
lems.” He maintained that the lattice system worked best
when it was put in place in start-up companies by dynamic
entrepreneurs.
Not all Gore Associates function well in this unstruc-
tured work environment, especially initially. For those ac-
customed to a more structured work environment, there
can be adjustment problems. As Bill Gore said: “All our
lives most of us have been told what to do, and some peo-
ple don’t know how to respond when asked to do some-
thing—and have the very real option of saying no—on
their job. It’s the new Associate’s responsibility to find out
what he or she can do for the good of the operation.” The
vast majority of the new Associates, after some initial
floundering, have adapted quickly.
Others, especially those who require more structured
working conditions, have found that Gore’s flexible work-
place is not for them. According to Bill, for those few, “It’s
an unhappy situation, for both the Associate and the spon-
sor. If there is no contribution, there is no paycheck.”
As Anita McBride, an Associate in Phoenix, noted:
“It’s not for everybody. People ask me do we have turnover,
and yes we do have turnover. What you’re seeing looks like
utopia, but it also looks extreme. If you finally figure the
system, it can be real exciting. If you can’t handle it, you
gotta go. Probably by your own choice, because you’re go-
ing to be so frustrated.” Overall, the Associates appear to
have responded positively to the Gore system of unman-
agement and unstructure. And the company’s lattice orga-
nization has proven itself to be good from a bottom-line
perspective. Bill estimated the year before he died that “the
profit per Associate is double” that of DuPont.
Features of W. L. Gore’s Culture
Outsiders have been struck by the degree of informality
and humor in the Gore organization. Meetings tend to be
only as long as necessary. As Trish Hearn, an Associate in
Newark, Delaware, said, “No one feels a need to pontifi-
cate.” Words such as “responsibilities” and “commit-
ments” are commonly heard, whereas words such as “em-
3.0
EXHIBIT 3
The Lattice Structure
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Licensed to:

534 Integrative Cases
ployees,” “subordinates,” and “managers” are taboo in
the Gore culture. This is an organization that has always
taken what it does very seriously, without its members tak-
ing themselves too seriously.
For a company of its size, Gore has always
had a very short organizational pyramid. As of
1995 the pyramid consists of Bob Gore, the late
Bill Gore’s son, as president and Vieve, Bill
Gore’s widow, as secretary-treasurer. He has been
the chief executive officer for more than twenty
years. No second-in-command or successor has
been designated. All the other members of the
Gore organization were, and continue to be, re-
ferred to as Associates.
Some outsiders have had problems with the idea of no
titles. Sarah Clifton, an Associate at the Flagstaff facility,
was being pressed by some outsiders as to what her title
was. She made one up and had it printed on some business
cards: SUPREME COMMANDER (see Exhibit 4). When
Bill Gore learned what she did, he loved it and recounted
the story to others.
Leaders, Not Managers
Within W. L. Gore & Associates, the various people who
take lead roles are thought of as being leaders, not man-
agers. Bill Gore described in an internal memo the kinds of
leadership and the role of leadership as follows:
1. The Associate who is recognized by a team as having
a special knowledge, or experience (for example, this
could be a chemist, computer expert, machine opera-
tor, salesman, engineer, lawyer). This kind of leader
gives the team guidance in a special area.
2. The Associate the team looks to for coordination of
individual activities in order to achieve the agreed-
upon objectives of the team. The role of this leader is
to persuade team members to make the commitments
necessary for success (commitment seeker).
3. The Associate who proposes necessary objectives and
activities and seeks agreement and team consensus on
objectives. This leader is perceived by the team members
as having a good grasp of how the objectives of the team
fit in with the broad objective of the enterprise. This
kind of leader is often also the “commitment-seeking”
leader.
4. The leader who evaluates relative contribution of team
members (in consultation with other sponsors), and re-
ports these contribution evaluations to a compensation
committee. This leader may also participate in the com-
pensation committee on relative contribution and pay
and reports changes in compensation to individual Asso-
ciates. This leader is then also a compensation sponsor.
5. Product specialists who coordinate the research, man-
ufacturing, and marketing of one product type within
a business, interacting with team leaders and individ-
ual Associates who have commitments regarding the
product type. They are respected for their knowledge
and dedication to their products.
6. Plant leaders who help coordinate activities of people
within a plant.
7. Business leaders who help coordinate activities of peo-
ple in a business.
8. Functional leaders who help coordinate activities of
people in a “functional” area.
9. Corporate leaders who help coordinate activities of
people in different businesses and functions and who
try to promote communication and cooperation
among all Associates.
10. Entrepreneuring Associates who organize new teams
for new businesses, new products, new processes, new
devices, new marketing efforts, new or better methods
of all kinds. These leaders invite other Associates to
“sign up” for their project.
It is clear that leadership is widespread in our lattice
organization and that it is continually changing and
evolving. The situation that leaders are frequently also
sponsors should not imply that these are different ac-
tivities and responsibilities.
Leaders are not authoritarians, managers of people,
or supervisors who tell us what to do or forbid us to do
things; nor are they “parents” to whom we transfer our
own self-responsibility. However, they do often advise
us of the consequences of actions we have done or pro-
pose to do. Our actions result in contributions, or lack
of contribution, to the success of our enterprise. Our
pay depends on the magnitude of our contributions.
This is the basic discipline of our lattice organization.
Egalitarian and Innovative
Other aspects of the Gore culture have been aimed at pro-
moting an egalitarian atmosphere, such as parking lots
with no reserved parking spaces except for customers and
3.0
SARAH CLIFTON
W. L. GORE & ASSOCIATES, Inc.
SUPREME COMMANDER
1505 NORTH FOURTH STREET
FLAGSTAFF, ARIZONA 86001
PHONE: 602-774-0611
TWX 910-972-0969
GORE
EXHIBIT 4
The Supreme Commander
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Licensed to:

Integrative Cases 535
disabled workers or visitors and dining areas—only one in
each plant—set up as focal points for Associate interaction.
As Dave McCarter of Phoenix explained: “The design is no
accident. The lunchroom in Flagstaff has a fireplace in the
middle. We want people to like to be here.” The location
of a plant is also no accident. Sites have been selected on
the basis of transportation access, a nearby university,
beautiful surroundings, and climate appeal. Land cost has
never been a primary consideration. McCarter justified the
selection by stating: “Expanding is not costly in the long
run. The loss of money is what you make happen by
stymieing people into a box.”
Bob Gore is a champion of Gore culture. As Sally Gore
related, “We have managed surprisingly to maintain our
sense of freedom and our entrepreneurial spirit. I think
what we’ve found is that we had to develop new ways to
communicate with Associates because you can’t communi-
cate with six thousand people the way that you can com-
municate with five hundred people. It just can’t be done. So
we have developed a newsletter that we didn’t have before.
One of the most important communication mediums that
we developed, and this was Bob Gore’s idea, is a digital
voice exchange which we call our Gorecom. Basically
everyone has a mailbox and a password. Lots of companies
have gone to e-mail and we use e-mail, but Bob feels very
strongly that we’re very much an oral culture and there’s a
big difference between cultures that are predominantly oral
and predominantly written. Oral cultures encourage direct
communication, which is, of course, something that we en-
courage.”
In rare cases an Associate “is trying to be unfair,” in
Bill’s own words. In one case the problem was chronic ab-
senteeism and in another, an individual was caught stealing.
“When that happens, all hell breaks loose,” said Bill Gore.
“We can get damned authoritarian when we have to.”
Over the years, Gore & Associates has faced a number
of unionization drives. The company has neither tried to
dissuade Associates from attending an organiza-
tional meeting nor retaliated when flyers were
passed out. As of 1995, none of the plants had
been organized. Bill believed that no need existed
for third-party representation under the lattice
structure. He asked the question, “Why would
Associates join a union when they own the com-
pany? It seems rather absurd.”
Commitment has long been considered a two-
way street. W. L. Gore & Associates has tried to avoid lay-
offs. Instead of cutting pay, which in the Gore culture
would be disastrous to morale, the company has used a
system of temporary transfers within a plant or cluster of
plants and voluntary layoffs. Exhibit 7 at the end of this
case example contains excerpts of interviews with two
Gore Associates that further indicate the nature of the cul-
ture and work environment at W. L. Gore & Associates.
W. L. Gore & Associates’ Sponsor Program
Bill Gore knew that products alone did not a company
make. He wanted to avoid smothering the company in
thick layers of formal “management.” He felt that hierar-
chy stifled individual creativity. As the company grew, he
knew that he had to find a way to assist new people and to
follow their progress. This was particularly important
when it came to compensation. W. L. Gore & Associates
developed its “sponsor” program to meet these needs.
When people apply to Gore, they are initially screened
by personnel specialists. As many as ten references might be
3.0
1200
1100
1000
900
800
700
600
1989 1990 1991 1992 1993 1994 1995 1996 1997
4000
5000
6000
7000
8000
9000
Years
G
or
e’
s
Sa
le
s
in
M
ill
io
ns
B
illions
ni
.P
.D
.G
Gore (Y1)
G.D.P. (Y2)
Gore
G.D.P.
60
5438.7
660
5743.8
700
5916.7
750
6244.4
804
6553
828
6935.7
958
7265.4
1064
7636
1160
8079.9
EXHIBIT 5
Growth of Gore’s Sales vs. Gross Domestic Product
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Licensed to:

536 Integrative Cases
contacted on each applicant. Those who meet the basic crite-
ria are interviewed by current Associates. The interviews
have been described as rigorous by those who have gone
through them. Before anyone is hired, an Associate must
agree to be his or her sponsor. The sponsor is to
take a personal interest in the new Associate’s con-
tributions, problems, and goals, acting as both a
coach and an advocate. The sponsor tracks the new
Associate’s progress, helping and encouraging,
dealing with weaknesses, and concentrating on
strengths. Sponsoring is not a short-term commit-
ment. All Associates have sponsors and many have
more than one. When individuals are hired initially,
they are likely to have a sponsor in their immediate work
area. If they move to another area, they may have a sponsor
in that work area. As Associates’ commitments change or
grow, they may acquire additional sponsors. Because the hir-
ing process looks beyond conventional views of what makes
a good Associate, some anomalies have occurred. Bill Gore
proudly told the story of “a very young man” of 84 who
walked in, applied, and spent five very good years with the
company. The individual had thirty years of experience in the
industry before joining Gore. His other Associates had no
problems accepting him, but the personnel computer did. It
insisted that his age was 48. The individual success stories at
Gore have come from diverse backgrounds.
An internal memo by Bill Gore described three roles of
sponsors:
1. Starting sponsor—a sponsor who helps a new Associ-
ate get started on a first job, or a present Associate get
started on a new job.
2. Advocate sponsor—a sponsor who sees that an Associ-
ate’s accomplishments are recognized.
3. Compensation sponsor—a sponsor who sees to it that
an Associate is fairly paid for contributions to the suc-
cess of the enterprise.
A single person can perform any one or all three kinds
of sponsorship. Quite frequently, a sponsoring Associate is
a good friend and it is not unknown for two Associates to
sponsor each other.
Compensation Practices
Compensation at W. L. Gore & Associates has taken three
forms: salary, profit sharing, and an Associates’ Stock
Ownership Program (ASOP).6 Entry-level salary has been
in the middle for comparable jobs. According to Sally
Gore: “We do not feel we need to be the highest paid. We
never try to steal people away from other companies with
salary. We want them to come here because of the oppor-
tunities for growth and the unique work environment.” As-
sociates’ salaries have been reviewed at least once a year
and more commonly twice a year. The reviews are con-
ducted by a compensation team at each facility, with spon-
sors for the Associates acting as their advocates during the
review process. Prior to meeting with the compensation
committee, the sponsor checks with customers or Associ-
ates familiar with the person’s work to find out what con-
tribution the Associate has made. The compensation team
relies heavily on this input. In addition, the compensation
team considers the Associate’s leadership ability and will-
ingness to help others develop to their fullest.
Profit sharing follows a formula based on economic
value added (EVA). Sally Gore had the following to say
about the adoption of a formula: “It’s become more for-
malized, and in a way, I think that’s unfortunate because it
used to be a complete surprise to receive a profit share. The
thinking of the people like Bob Gore and other leaders was
that maybe we weren’t using it in the right way and we
could encourage people by helping them know more about
it and how we made profit-share decisions. The fun of it
before was people didn’t know when it was coming and all
of a sudden you could do something creative about passing
out checks. It was great fun and people would have a won-
derful time with it. The disadvantage was that Associates
then did not focus much on, ‘What am I doing to create an-
other profit share?’ By using EVA as a method of evalua-
tion for our profit share, we know at the end of every
month how much EVA was created that month. When
we’ve created a certain amount of EVA, we then get an-
other profit share. So everybody knows and everyone says,
‘We’ll do it in January,’ so it is done. Now Associates feel
more part of the happening to make it work. What have
you done? Go make some more sales calls, please! There
are lots of things we can do to improve our EVA and every-
body has a responsibility to do that.” Every month EVA is
calculated and every Associate is informed. John Mosko of
electronic products commented, “…(EVA) lets us know
where we are on the path to getting one (a profit share). It’s
very critical—every Associate knows.”
Annually, Gore also buys company stock equivalent to a
fixed percent of the Associates’ annual incomes, placing it in
the ASOP retirement fund. Thus, an Associate can become a
stockholder after being at Gore for a year. Gore’s ASOP en-
sures Associates participate in the growth of the company by
acquiring ownership in it. Bill Gore wanted Associates to feel
that they themselves are owners. One Associate stated, “This
is much more important than profit sharing.” In fact, some
long-term Associates (including a twenty-five-year veteran
machinist) have become millionaires from the ASOP.
W. L. Gore & Associates’ Guiding Principles
and Core Values
In addition to the sponsor program, Bill Gore articulated
four guiding principles:
1. Try to be fair.
2. Encourage, help, and allow other Associates to grow in
knowledge, skill, and scope of activity and responsibility.
3. Make your own commitments, and keep them.
4. Consult with other Associates before taking actions
that may be “below the water line.”
3.0
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Integrative Cases 537
The four principles have been referred to as Fairness,
Freedom, Commitment, and Waterline. The waterline ter-
minology is drawn from an analogy to ships. If someone
pokes a hole in a boat above the water line, the boat will
be in relatively little real danger. If someone, however,
pokes a hole below the water line, the boat is in immediate
danger of sinking. “Water line” issues must be discussed
across teams and plants before decisions are made.
The operating principles were put to a test in 1978. By
this time word about the qualities of GORE-TEX fabric
was being spread throughout the recreational and outdoor
markets. Production and shipment had begun in volume.
At first a few complaints were heard. Next some of the
clothing started coming back. Finally, much of the clothing
was being returned. The trouble was that the GORE-TEX
fabric was leaking. Waterproofing was one of the major
properties responsible for GORE-TEX fabric’s success. The
company’s reputation and credibility were on the line.
Peter W. Gilson, who led Gore’s fabrics division, re-
called: “It was an incredible crisis for us at that point. We
were really starting to attract attention; we were taking
off—and then this.” In the next few months, Gilson and a
number of his Associates made a number of those below-
the-water-line decisions.
First, the researchers determined that oils in human
sweat were responsible for clogging the pores in the
GORE-TEX fabric and altering the surface tension of the
membrane. Thus, water could pass through. They also dis-
covered that a good washing could restore the waterproof
property. At first this solution, known as the “Ivory Snow
solution,” was accepted. A single letter from “Butch,” a
mountain guide in the Sierras, changed the company’s po-
sition. Butch described what happened while he was lead-
ing a group: “My parka leaked and my life was in danger.”
As Gilson noted, “That scared the hell out of us. Clearly
our solution was no solution at all to someone on a moun-
taintop.” All the products were recalled. Gilson remem-
bered: “We bought back, at our own expense, a fortune in
pipeline material—anything that was in the stores, at the
manufacturers, or anywhere else in the pipeline.”
In the meantime, Bob Gore and other Associates set out
to develop a permanent fix. One month later, a second-
generation GORE-TEX fabric had been developed. Gilson,
furthermore, told dealers that if a customer ever returned a
leaky parka, they should replace it and bill the company. The
replacement program alone cost Gore roughly $4 million.
The popularity of GORE-TEX outerwear took off.
Many manufacturers now make numerous pieces of ap-
parel such as parkas, gloves, boots, jogging outfits, and
wind shirts from GORE-TEX laminate. Sometimes when
customers are dissatisfied with a garment, they return them
directly to Gore. Gore has always stood behind any prod-
uct made of GORE-TEX fabric. Analysis of the returned
garments found that the problem was often not the GORE-
TEX fabric. The manufacturer, “…had created a design
flaw so that the water could get in here or get in over the
zipper and we found that when there was something nega-
tive about it, everyone knew it was GORE-TEX. So we had
to make good on products that we were not manufactur-
ing. We now license the manufacturers of all our GORE-
TEX fabric products. They pay a fee to obtain a
license to manufacture GORE-TEX products. In
return we oversee the manufacture and we let
them manufacture only designs that we are sure
are guaranteed to keep you dry, that really will
work. Then it works for them and for us—a win-
win for them as well as for us,” according to Sally
Gore.
To further ensure quality, Gore & Associates
has its own test facility including a rain room for garments
made from GORE-TEX. Besides a rain/storm test, all gar-
ments must pass abrasion and washing machine tests. Only
the garments that pass these tests will be licensed to display
the GORE-TEX label.
Research and Development
Like everything else at Gore, research and development has
always been unstructured. Even without a formal R&D de-
partment, the company has been issued many patents, al-
though most inventions have been held as proprietary or
trade secrets. For example, few Associates are allowed to
see GORE-TEX being made. Any Associate can, however,
ask for a piece of raw PTFE (known as a silly worm) with
which to experiment. Bill Gore believed that all people had
it within themselves to be creative.
One of the best examples of Gore inventiveness oc-
curred in 1969. At the time, the wire and cable division
was facing increased competition. Bill Gore began to look
for a way to straighten out the PTFE molecules. As he said,
“I figured out that if we ever unfold those molecules, get
them to stretch out straight, we’d have a tremendous new
kind of material.” He thought that if PTFE could be
stretched, air could be introduced into its molecular struc-
ture. The result would be greater volume per pound of raw
material with no effect on performance. Thus, fabricating
costs would be reduced and profit margins would be in-
creased. Going about this search in a scientific manner, Bob
Gore heated rods of PTFE to various temperatures and
then slowly stretched them. Regardless of the temperature
or how carefully he stretched them, the rods broke.
Working alone late one night after countless failures,
Bob in frustration stretched one of the rods violently. To
his surprise, it did not break. He tried it again and again
with the same results. The next morning Bob demonstrated
his breakthrough to his father, but not without some
drama. As Bill Gore recalled: “Bob wanted to surprise me
so he took a rod and stretched it slowly. Naturally, it
broke. Then he pretended to get mad. He grabbed another
rod and said, ‘Oh, the hell with this,’ and gave it a pull. It
didn’t break—he’d done it.” The new arrangement of mol-
ecules not only changed the wire and cable division, but led
to the development of GORE-TEX fabric.
3.0
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538 Integrative Cases
Bill and Vieve did the initial field-testing of GORE-
TEX fabric the summer of 1970. Vieve made a hand-sewn
tent out of patches of GORE-TEX fabric. They took it on
their annual camping trip to the Wind River Mountains in
Wyoming. The very first night in the wilderness,
they encountered a hail storm. The hail tore holes
in the top of the tent, and the bottom filled up like
a bathtub from the rain. Undaunted, Bill Gore
stated: “At least we knew from all the water that
the tent was waterproof. We just needed to make
it stronger, so it could withstand hail.”
Gore Associates have always been encour-
aged to think, experiment, and follow a poten-
tially profitable idea to its conclusion. At a plant in
Newark, Delaware, Fred L. Eldreth, an Associate with a
third-grade education, designed a machine that could wrap
thousands of feet of wire a day. The design was completed
over a weekend. Many other Associates have contributed
their ideas through both product and process break-
throughs.
Even without an R&D department, innovation and
creativity continue at a rapid pace at Gore & Associates.
The year before he died, Bill Gore claimed that “the cre-
ativity, the number of patent applications and innovative
products is triple” that of DuPont.
Development of Gore Associates
Ron Hill, an Associate in Newark, noted that Gore “will
work with Associates who want to advance themselves.”
Associates have been offered many in-house training op-
portunities, not only in technical and engineering areas but
also in leadership development. In addition, the company
has established cooperative education programs with uni-
versities and other outside providers, picking up most of
the costs for the Gore Associates. The emphasis in Associ-
ate development, as in many parts of Gore, has always
been that the Associate must take the initiative.
Marketing Approaches and Strategy
Gore’s business philosophy incorporates three beliefs and
principles: (1) that the company can and should offer the
best-valued products in the markets and market segments
where it chooses to compete, (2) that buyers in each of its
markets should appreciate the caliber and performance of
the items it manufactures, and (3) that Gore should be-
come a leader with unique expertise in each of the product
categories where it competes. To achieve these outcomes,
the company’s approach to marketing (it has no formally
organized marketing department) is based on the following
principles:
1. Marketing a product requires a leader, or product
champion. According to Dave McCarter: “You marry
your technology with the interests of your champions,
since you’ve got to have champions for all these things
no matter what. And that’s the key element within our
company. Without a product champion you can’t do
much anyway, so it is individually driven. If you get
people interested in a particular market or a particular
product for the marketplace, then there is no stopping
them.” Bob Winterling of the Fabrics Division elabo-
rated further on the role and importance of the product
champion.
The product champion is probably the most important
resource we have at Gore for the introduction of new
products. You look at that bicycle cable. That could
have come out of many different divisions of Gore, but
it really happened because one or two individuals said,
“Look, this can work. I believe in it; I’m passionate
about it; and I want it to happen.” And the same thing
with GLIDE floss. I think John Spencer in this case—
although there was a team that supported John, let’s
never forget that—John sought the experts out
throughout the organization. But without John making
it happen on his own, GLIDE floss would never have
come to fruition. He started with a little chain of drug-
stores here, Happy Harry’s I think, and we put a few
cases in and we just tracked the sales and that’s how it
all started. Who would have ever believed that you
could take what we would have considered a commod-
ity product like that, sell it direct for $3–$5 apiece.
That is so unGorelike it’s incredible. So it comes down
to people and it comes down to the product champion
to make things happen.
2. A product champion is responsible for marketing the
product through commitments with sales representa-
tives. Again, according to Dave McCarter: “We have
no quota system. Our marketing and our sales people
make their own commitments as to what their fore-
casts have been. There is no person sitting around
telling them that is not high enough, you have to in-
crease it by 10 percent, or whatever somebody feels is
necessary. You are expected to meet your commit-
ment, which is your forecast, but nobody is going to
tell you to change it. . . . There is no order of com-
mand, no chain involved. These are groups of inde-
pendent people who come together to make unified
commitments to do something and sometimes when
they can’t make those agreements…you may pass
up a marketplace…but that’s OK, because there’s
much more advantage when the team decides to do
something.”
3. Sales Associates are on salary, not commission. They
participate in the profit sharing and ASOP plans in
which all other Associates participate. As in other areas
of Gore, individual success stories have come from di-
verse backgrounds. Dave McCarter related another
3.0
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Integrative Cases 539
success of the company relying on a product champion
as follows:
I interviewed Sam one day. I didn’t even know why I
was interviewing him actually. Sam was retired from
AT&T. After twenty-five years, he took the golden
parachute and went down to Sun Lakes to play golf.
He played golf a few months and got tired of that. He
was selling life insurance. I sat reading the application;
his technical background interested me. . . . He had
managed an engineering department with six hundred
people. He’d managed manufacturing plants for AT&T
and had a great wealth of experience at AT&T. He
said, “I’m retired. I like to play golf but I just can’t do
it every day, so I want to do something else. Do you
have something around here I can do?” I was thinking
to myself, “This is one of these guys I would sure like
to hire but I don’t know what I would do with him.”
The thing that triggered me was the fact that he said he
sold insurance and here is a guy with a high degree of
technical background selling insurance. He had mar-
keting experience, international marketing experience.
So, the bell went off in my head that we were trying to
introduce a new product into the marketplace that was
a hydrocarbon leak protection cable. You can bury it in
the ground and in a matter of seconds it could detect a
hydrocarbon-like gasoline. I had a couple of other guys
working on the product who hadn’t been very success-
ful with marketing it. We were having a hard time find-
ing a customer. Well, I thought, that kind of product
would be like selling insurance. If you think about it,
why should you protect your tanks? It’s an insurance
policy that things are not leaking into the environment.
That has implications, big-time monetary. So, actually,
I said, “Why don’t you come back Monday? I have just
the thing for you.” He did. We hired him; he went to
work, a very energetic guy. Certainly a champion of the
product, he picked right up on it, ran with it single-
handed.
Now it’s a growing business. It certainly is a valuable
one too for the environment. In the implementation of its
marketing strategy, Gore has relied on cooperative and
word-of-mouth advertising. Cooperative advertising has
been especially used to promote GORE-TEX fabric prod-
ucts. These high-dollar, glossy campaigns include full-
color ads and dressing the sales force in GORE-TEX gar-
ments. A recent slogan used in the ad campaigns has been,
“If it doesn’t say GORE-TEX, it’s not.” Some retailers
praise the marketing and advertising efforts as the best.
Leigh Gallagher, managing editor of Sporting Goods Busi-
ness magazine, describes Gore & Associates’ marketing as
“unbeatable.”
Gore has stressed cooperative advertising because the
Associates believe positive experiences with any one prod-
uct will carry over to purchases of other and more GORE-
TEX fabric products. Apparently, this strategy has paid off.
When the Grandoe Corporation introduced GORE-TEX
gloves, its president, Richard Zuckerwar, noted: “Sports
activists have had the benefit of GORE-TEX
gloves to protect their hands from the elements….
With this handsome collection of gloves …you
can have warm, dry hands without sacrificing
style.” Other clothing manufacturers and distrib-
utors who sell GORE-TEX garments include Ap-
parel Technologies, Lands’ End, Austin Reed,
Hudson Trail Outfitters, Timberland, Woolrich,
North Face, L.L. Bean, and Michelle Jaffe.
The power of these marketing techniques extends be-
yond consumer products. According to Dave McCarter:
“In the technical end of the business, company reputation
probably is most important. You have to have a good rep-
utation with your company.” He went on to say that with-
out a good reputation, a company’s products would not be
considered seriously by many industrial customers. In
other words, the sale is often made before the representa-
tive calls. Using its marketing strategies, Gore has been
very successful in securing a market leadership position in
a number of areas, ranging from waterproof outdoor cloth-
ing to vascular grafts. Its market share of waterproof,
breathable fabrics is estimated to be 90 percent.
Adapting to Changing
Environmental Forces
Each of Gore’s divisions has faced from time to time ad-
verse environmental forces. For example, the fabric divi-
sion was hit hard when the fad for jogging suits collapsed
in the mid-1980s. The fabric division took another hit
from the recession of 1989. People simply reduced their
purchases of high-end athletic apparel. By 1995, the fabric
division was the fastest-growing division of Gore again.
The electronic division was hit hard when the main-
frame computer business declined in the early 1990s. By
1995, that division was seeing a resurgence for its products
partially because that division had developed some elec-
tronic products for the medical industry. As can be seen,
not all the forces have been negative.
The aging population of America has increased the
need for health care. As a result, Gore has invested in the
development of additional medical products and the med-
ical division is growing.
W. L. Gore & Associates’ Financial
Performance
As a closely held private corporation, W. L. Gore has kept
its financial information as closely guarded as proprietary
information on products and processes. It has been esti-
mated that Associates who work at Gore own 90 percent
of the stock. According to Shanti Mehta, an Associate,
3.0
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540 Integrative Cases
Gore’s returns on assets and sales have consistently ranked
it among the top 10 percent of the Fortune 500 compa-
nies. According to another source, W. L. Gore & Associ-
ates has been doing just fine by any financial measure. For
thirty-seven straight years (from 1961 to 1997)
the company has enjoyed profitability and posi-
tive return on equity. The compounded growth
rate for revenues at W. L. Gore & Associates
from 1969 to 1989 was more than 18 percent,
discounted for inflation.7 In 1969, total sales
were about $6 million; by 1989, the figure was
$600 million. As should be expected with the in-
crease in size, the percentage increase in sales has
slowed over the last seven years (Exhibit 6). The company
projects sales to reach $1.4 billion in 1998. Gore financed
this growth without long-term debt unless it made sense.
For example, “We used to have some industrial revenue
bonds where, in essence, to build facilities the government
allows banks to lend you money tax-free. Up to a couple
of years ago we were borrowing money through industrial
revenue bonds. Other than that, we are totally debt-free.
Our money is generated out of the operations of the busi-
ness, and frankly we’re looking for new things to invest in.
I know that’s a challenge for all of us today,” said Bob
Winterling. Forbes magazine estimates Gore’s operating
profits for 1993, 1994, 1995, 1996, and 1997 to be $120,
$140, $192, $213, and $230 million, respectively (see Ex-
hibit 6). Bob Gore predicts that the company will reach
$2 billion in sales by 2001.
Recently, the company purchased Optical Concepts
Inc., a laser, semiconductor technology company, of Lom-
poc, California. In addition, Gore & Associates is invest-
ing in test-marketing a new product, guitar strings, which
was developed by its Associates.
When asked about cost control, Sally Gore had the fol-
lowing to say:
You have to pay attention to cost or you’re not an effective
steward of anyone’s money, your own or anyone else’s. It’s
kind of interesting, we started manufacturing medical
products in 1974 with the vascular graft and it built from
there. The Gore vascular graft is the Cadillac or BMW or
the Rolls Royce of the business. There is absolutely no con-
test, and our medical products division became very suc-
cessful. People thought this was Mecca. Nothing had ever
been manufactured that was so wonderful. Our business
expanded enormously, rapidly out there (Flagstaff, Ari-
zona) and we had a lot of young, young leadership. They
spent some time thinking they could do no wrong and that
everything they touched was going to turn to gold.
They have had some hard knocks along the way and
discovered it wasn’t as easy as they initially thought it was.
And that’s probably good learning for everyone somewhere
along the way. That’s not how business works. There’s a lot
of truth in that old saying that you learn more from your
failures than you do your successes. One failure goes a long
way toward making you say, Oh, wow!
Acknowledgments
Many sources were helpful in providing background mate-
rial for this case. The most important sources of all were
the W. L. Gore Associates, who generously shared their
time and viewpoints about the company. They provided
3.0
EXHIBIT 6
Operating and Net Profits of W. L. Gore & Associates
Data from Forbes Magazine’s Annual Report on the 500 Largest Private Companies in the U.S.
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Integrative Cases 541
many resources, including internal documents, and added
much to this case through sharing their personal experi-
ences as well as ensuring that the case accurately reflected
the Gore company and culture.
Excerpts from Interviews with Associates
The first excerpt is from an Associate that was formerly
with IBM and has been with Gore for two years:
Q. What is the difference between being with IBM and
Gore?
A. I spent twenty-four years working for IBM, and there’s
a big difference. I can go ten times faster here at Gore
because of the simplicity of the lattice organization. Let
me give you an example. If I wanted to purchase chem-
icals at IBM (I am an industrial chemist), the first thing
I would need to do is get accounting approval, then I
would need at least two levels of managers’ approval,
then a secretary to log in my purchase and the purchase
order would go to Purchasing where it would be as-
signed a buyer. Some time could be saved if you were
willing to “walk” the paperwork through the approval
process, but even after computerizing the process, it
typically would take one month from the time you ini-
tiated the purchase requisition till the time the material
actually arrived. Here they have one simple form. Usu-
ally, I get the chemicals the next day and a copy of the
purchase order will arrive a day or two after that. It
happens so fast. I wasn’t used to that.
Q. Do you find that a lot more pleasant?
A. Yeah, you’re unshackled here. There’s a lot less bu-
reaucracy that allows you to be a lot more productive.
Take Lab Safety, for example. In my lab at IBM, we
were cited for not having eyewash taped properly. The
first time, we were cited for not having a big enough
area taped off. So we taped off a bigger area. The next
week the same eyewash was cited again, because the
area we taped off was three inches too short in one di-
rection. We retaped it and the following week, it got
cited again for having the wrong color tape. Keep in
mind that the violation was viewed as serious as a pail
of gasoline next to a lit Bunsen burner. Another time I
had the dubious honor of being selected the functional
safety representative in charge of getting the function’s
labs ready for a Corporate Safety Audit. (The function
was a third level in the pyramidal organization—[1] de-
partment, [2] project, and [3] function.) At the same
time I was working on developing a new surface mount
package. As it turned out, I had no time to work on de-
velopment, and the function spent a lot of time and
money getting ready for the Corporate Auditors who in
the end never showed. I’m not belittling the importance
of safety, but you really don’t need all that bureaucracy
to be safe.
The second interview is with an Associate who is a re-
cent engineering graduate:
Q. How did you find the transition coming here?
A. Although I never would have expected it to
be, I found my transition coming to Gore to
be rather challenging. What attracted me to
the company was the opportunity to “be my
own boss” and determine my own commit-
ments. I am very goal-oriented, and enjoy tak-
ing a project and running with it—all things
that you are able to do and encouraged to do
within the Gore culture. Thus, I thought, a
perfect fit!
However, as a new Associate, I really struggled with
where to focus my efforts—I was ready to make my
own commitments, but to what?! I felt a strong need to
be sure that I was working on something that had
value, something that truly needed to be done. While I
didn’t expect to have the “hottest” project, I did want
to make sure that I was helping the company to “make
money” in some way.
At the time, though, I was working for a plant that
was pretty typical of what Gore was like when it was
originally founded—after my first project (which was
designed to be a “quick win”—a project with meaning,
but one that had a definite end point), I was told, “Go
find something to work on.” While I could have found
something, I wanted to find something with at least a
small degree of priority! Thus, the whole process of
finding a project was very frustrating for me—I didn’t
feel that I had the perspective to make such a choice
and ended up in many conversations with my sponsor
about what would be valuable….
In the end, of course, I did find that project—and it
did actually turn out to be a good investment for Gore.
The process to get there, though, was definitely trying
for someone as inexperienced as I was—so much
ground would have been gained by suggesting a few
projects to me and then letting me choose from that
smaller pool.
What’s really neat about the whole thing, though, is
that my experience has truly made a difference. Due in
part to my frustrations, my plant now provides college
grads with more guidance on their first several projects.
(This guidance obviously becomes less and less critical
as each Associate grows within Gore.) Associates still
are choosing their own commitments, but they’re doing
so with additional perspective, and the knowledge that
they are making a contribution to Gore—which is an
important thing within our culture. As I said, though, it
was definitely rewarding to see that the company was
so responsive, and to feel that I had helped to shape
someone else’s transition!
3.0
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542 Integrative Cases
Notes
1. GORE-TEX is a registered trademark of W. L. Gore &
Associates.
2. In this case the word Associates is used and capitalized
because in W. L. Gore & Associates’ literature the
word is always used instead of employees and is
capitalized. In fact, case writers were told that
Gore “never had ‘employees’—always ‘Associ-
ates.’”
3. GORE RideOn is a registered trademark of
W. L. Gore & Associates.
4. Glide is a registered trademark of W. L. Gore
& Associates.
5. WindStopper is a registered trademark of W. L. Gore &
Associates.
6. Similar legally to an ESOP (Employee Stock Ownership
Plan). Again, Gore simply has never allowed the word
employee in any of its documentation.
7. In comparison, only 11 of the 200 largest companies in
the Fortune 500 had positive ROE each year from 1970
to 1988 and only 2 other companies missed a year. The
revenue growth rate for these 13 companies was 5.4
percent, compared with 2.5 percent for the entire For-
tune 500.
References
Aburdene, Patricia, and John Nasbitt. Re-inventing the
Corporation (New York: Warner Books, 1985).
Angrist, S. W. “Classless Capitalists,” Forbes (May 9,
1983), 123–124.
Franlesca, L. “Dry and Cool,” Forbes (August 27, 1984),
126.
Hoerr, J. “A Company Where Everybody Is the Boss,”
Business Week (April 15, 1985), 98.
Levering, Robert. The 100 Best Companies to Work for in
America. See the chapter on W. L. Gore & Associates,
Inc. (New York: Signet, 1985).
McKendrick, Joseph. “The Employees as Entrepreneur,”
Management World (January 1985), 12–13.
Milne, M. J. “The Gorey Details,” Management Review
(March 1985), 16–17.
Posner, B. G. “The First Day on the Job,” Inc. (June 1986),
73–75.
Price, Debbie M. “GORE-TEX style,” Baltimore Sun
(April 20, 1997), 1D & 4D.
Price, Kathy. “Firm Thrives Without Boss,” AZ Republic
(February 2, 1986).
Rhodes, Lucien. “The Un-manager,” Inc. (August 1982), 34.
Simmons, J. “People Managing Themselves: Un-manage-
ment at W. L. Gore Inc.,” The Journal for Quality and
Participation (December 1987), 14–19.
“The Future Workplace,” Management Review (July
1986), 22–23.
Trachtenberg, J. A. “Give Them Stormy Weather,” Forbes
(March 24, 1986), 172–174.
Ward, Alex. “An All-Weather Idea,” The New York Times
Magazine (November 10, 1985), Sec. 6.
Weber, Joseph. “No Bosses. And Even ‘Leaders’ Can’t Give
Orders,” BusinessWeek (December 10, 1990), 196–197.
“Wilbert L. Gore,” IndustryWeek (October 17, 1983),
48–49.
3.0
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Integrative Cases 543
In the fall of 1995, Bill Sanko, president of XEL Communi-
cations, Inc., strolled around in the new 115,000-square-foot
facility with its spacious conference rooms and computer-
based skills training center, into which the company had just
moved. Their former facility had been a 53,000-square-foot
building that just could not accommodate XEL’s growth.
During the upcoming round of strategic planning sessions,
Bill wondered how XEL and its management team would de-
cide to grapple with the two-edged sword of rapid growth.
Would it be possible for XEL to maintain its entrepreneurial
culture while it experienced rapid growth? Would it find the
resources necessary to sustain growth without harming its
culture? From where?
XEL Communications, Inc.
XEL Communications, Inc.1—located in the outskirts of
Denver, Colorado—designed and manufactured various
telecommunications products for a number of compa-
nies—primarily large U.S. telephone operating companies.
Originally a division within GTE headed by Bill Sanko, it
was in the process of being closed when Bill and a few key
managers persuaded GTE to sell the division to them. In
July 1984, Sanko and fellow managers signed a letter of in-
tent to buy the division from GTE. Two months later, the
bill of sale was signed, and XEL Communications, Inc., be-
came an independent company. Ironically, GTE remained
as one of XEL’s major customer accounts.
In terms of overall financial performance, XEL was
profitable. Its revenues increased from $16.8 million in
1992 to $23.6 million in 1993 and $52.3 million in 1994—
over a threefold increase in three years. In 1996, XEL em-
ployed approximately 300 people.
XEL designed and manufactured more than 300 indi-
vidual products that enabled network operators to upgrade
existing infrastructures and cost-effectively enhance the
speed and functionality of their networks while reducing
operating expenses and overhead costs. The firm’s products
provided access to telecommunications services and auto-
mated monitoring and maintenance of network perfor-
mance, and extended the distance over which network op-
erators were able to offer their services.2 For example, XEL
produced equipment that “conditioned” existing lines to
make them acceptable for business use and sold products
that facilitated the transmission of data and information
over phone lines. Driving the need for XEL’s products was
the keen interest in electronic data transference: “Busi-
nesses are more and more dependent on the transfer of in-
formation,” Bill Sanko noted. In addition, more businesses,
including XEL, were operating by taking and filling orders
through electronic data exchanges. Instead of di-
aling in to inside salespeople, businesses often ac-
cessed databases directly.
One of XEL’s strengths was its ability to
adapt one manufacturer’s equipment to another’s.
XEL provided the bits and pieces of telecommu-
nications equipment to the “network,” allowing
the smooth integration of disparate transmission pieces.
XEL also sold central office transmission equipment and a
full range of mechanical housings, specialty devices, power
supplies, and shelves.
In 1995, XEL began developing a hybrid fiber/cable
broadband modem for use by cable television firms seek-
ing to provide enhanced data communication services
over their network facilities. Cable modems were one of
the hottest new products in telecommunications. The de-
vices would enable computers to send and receive infor-
mation about one hundred times faster than standard
modems used with phone lines. Given that 34 million
homes had personal computers, cable modems were seen
as a surefire way to exploit the personal computer (PC)
boom and the continuing convergence of computers and
television. Media analysts estimated that cable modem
users would rise to 11.8 million by the end of 2005 from
a handful in 1996.3
“Business customers and their changing telecommuni-
cations needs drive the demand for XEL’s products. That,
in turn, presents a challenge to the company,” said Sanko.
Sanko cited the constant stream of new products developed
by XEL—approximately two per month—as the driving
force behind the growth. Throughout the industry, product
life-cycle times were getting even shorter. Before the
breakup of the Bell System in 1984, transmission switches
and other telecommunications devices enjoyed a thirty- to
forty-year life. In 1995, with technology moving so fast,
XEL’s products had about a three-year to five-year life.
XEL sold products to all of the Regional Bell Operat-
ing Companies (RBOCs), as well as such companies as
GTE and Centel. Railroads, with their own telephone net-
works, were also customers. In addition to its domestic
Integrative Case 4.0
XEL Communications, Inc. (C): Forming a Strategic Partnership*
4.0
*This case was prepared by Professors Robert P. McGowan and Cynthia V.
Fukami, Daniels College of Business, as a basis for classroom discussion
rather than to illustrate either effective or ineffective handling of an
administrative situation. Copyright © 1995 by the authors: © 1997 by the
Case Center, Daniels College of Business, University of Denver. Published by
South-Western College Publishing.
For information regarding this and other CaseNet* cases, please visit
CaseNet* on the World Wide Web at http://casenet.thomson.com.
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544 Integrative Cases
business, products were sold in Canada, Mexico, and Cen-
tral and South America.4 XEL’s field salespeople worked
with engineers to satisfy client requests for specific services.
Over a period of time, the salespeople developed a rapport
with these engineers, providing XEL with new
product leads.
With all the consolidations and ventures in
telecommunications, those who watched the in-
dustry often concluded that the overall market
would become more difficult. Sanko believed,
however, that “out of change comes opportunity.
The worst-case scenario would be a static situa-
tion. Thus, a small company, fast to respond to cus-
tomer needs and able to capitalize on small market niches,
will be successful. Often, a large company like AT&T will
forsake a smaller market and XEL will move in. Also, XEL’s
size allows it to design a project in a very short time.”
Sanko watched federal legislation keenly. The
Telecommunications Act of 1996, which removed numer-
ous barriers to competition, had clearly changed the rules
of the game. Consequently, said Sanko, “we need to ex-
pand our market and be prepared to sell to others as the
regulatory environment changes.” The joint venture be-
tween Time Warner and US West also signaled that tele-
phone and cable companies would be pooling their re-
sources to provide a broader array of information services.
As for the future, Sanko saw “a lot of opportunities we
can’t even now imagine.”
The XEL Vision
A feature that set XEL apart from other companies was its
strong, healthy corporate culture. Developing a culture of
innovation and team decision making was instrumental in
providing the results XEL prided itself on.5 An early at-
tempt to define culture in a top-down fashion was less suc-
cessful than the management team had hoped,6 so the team
had embarked on a second journey to determine what their
core values were and what they would like the company to
look like in five years. The team had then gone off-site for
several days and finalized the XEL Vision statement (Ex-
hibit 1). By the summer of 1987, the statement had been
signed by members of the senior team and been hung up by
the bulletin board. Employees were not required to sign the
statement, but were free to do so when each was ready.
Julie Rich, vice president of human resources, described
the management team’s approach to getting the rest of the
organization to understand as well as become comfortable
with the XEL Vision: “Frequently, organizations tend to
take a combination top-down/bottom-up approach in insti-
tuting cultural change. That is, the top level will develop a
statement about values and overall vision. They will then
communicate it down to the bottom level and hope that re-
sults will percolate upward through the middle levels. Yet it
is often the middle level of management which is most skep-
tical, and they will block it or resist change. We decided to
take a ‘cascade’ approach in which the process begins at the
top and gradually cascades from one level to the next so
that the critical players are slowly acclimated to the process.
We also did a number of other things—including sending a
copy of the vision statement to the homes of the employees
and dedicating a section of the company newspaper to com-
municate what key sections of the vision mean from the
viewpoint of managers and employees.”
The vision statement became a living symbol of the
XEL culture and the degree to which XEL embraced and
empowered its employees. When teams or managers made
decisions, they routinely brought out the XEL Vision doc-
ument so workers might consult various parts of the state-
ment to help guide and direct decisions. According to Julie,
the statement was used to help evaluate new products, em-
phasize quality (a specific XEL strategic objective was to be
the top quality vendor for each product), support teams,
and drive the performance-appraisal process.
The XEL Vision was successfully implemented as a key
first step; but it was far from being a static document. Key
XEL managers continually revisited the statement to ensure
that it became a reflection of where they wanted to go, not
where they had been. Julie believed this regular appraisal
was a large factor in the success of the vision. “Our values
are the key,” Julie explained. “They are strong, they are truly
core values, and they are deeply held.” Along with the buy-
in process, the workers also saw that the managers experi-
mented with the statement, which reflected the strong entre-
preneurial nature of XEL’s founders—a common bond that
they all shared. They were not afraid of risk, or of failure,
and this spirit was reinforced in all employees through the
vision itself, as well as through the yearly process of revisit-
ing the statement. Once a year, Bill Sanko sat with all em-
ployees and directly challenged (and listened to direct chal-
lenges to) the XEL Vision. From 1987 to 1995, only two
relatively minor additions had altered the original statement.
Which Path to Choose
When the 1995 annual strategic planning process got un-
der way, XEL was in good shape on any one of a number
of indicators. Profits were growing, new products were be-
ing developed, the culture and vision of the company were
strong, employee morale was high, and the self-directed
work teams were achieving exceptional quality.7 Rapid
growth, however, was also presenting a challenge. Would it
be possible for XEL to maintain its entrepreneurial culture
in the face of rapid growth? Could they sustain their
growth without harming their culture? Would they find the
resources necessary to sustain the growth? From where?
As the strategic planning retreat progressed, three op-
tions seemed apparent to the team. First, they could stay
the course and remain privately held. Second, they could
initiate a public offering of stock. Third, they could seek a
strategic partnership. Which would be the right choice for
XEL?
4.0
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Integrative Cases 545
Staying the Course
The most obvious option was to do nothing. Bill Sanko in-
dicated that the management team did not favor staying
the course and remaining privately held. “We had a venture
capitalist involved who, after being with us for ten years,
wanted out. In addition, the founders—ourselves—also
wanted out from a financial standpoint. You also have to
understand that one of the original founders, Don Don-
nelly, had passed away; and his estate was looking to make
his investment more liquid. So, there were a lot of things
that converged at the same time.”
Once they determined they would not remain privately
held, Bill mentioned that the decision boiled down to two
main avenues: XEL would do an initial public offering and
go public, or it would find a strategic partner. “To guide us
in this process, we decided to retain the services of an out-
side party; we talked to about a dozen investment houses.
In October 1994, we decided to hire Alex Brown, a long
time investment house out of Baltimore. What we liked
about this firm was that they had experience with doing
both options—going public or finding a partner.”
Going Public
One avenue open to XEL was initiating a public offering of
stock. Alex Brown advised them of the pluses and minuses
of this option. Sanko reviewed their recommendations:
The plus side for XEL doing an initial public offering was
that technology was really hot about this time [October
1994]. In addition, we felt that XEL would be valued
pretty highly in the market. The downside of going public
was that XEL was really not a big firm, and institutional
investors usually like doing offerings of firms that generate
revenues of over $100 million. Another downside was that
4.0
XEL will become the leader in our selected telecommunications markets through inno-
vation in products and services. Every XEL product and service will be rated Number
One by our customers.
XEL will set the standards by which our competitors are judged. We will be the best,
most innovative, responsive designer, manufacturer and provider of quality products and
services as seen by customers, employees, competitors, and suppliers.*
We will insist upon the highest quality from everyone in every task.
We will be an organization where each of us is a self-manager who will:
• initiate action, commit to, and act responsibly in achieving objectives
• be responsible for XEL’s performance
• be responsible for the quality of individual and team output
• invite team members to contribute based on experience, knowledge and ability
We will:
• be ethical and honest in all relationships
• build an environment where creativity and risk taking is promoted
• provide challenging and satisfying work
• ensure a climate of dignity and respect for all
• rely on interdepartmental teamwork, communications and cooperative problem solv-
ing to attain common goals**
• offer opportunities for professional and personal growth
• recognize and reward individual contribution and achievement
• provide tools and services to enhance productivity
• maintain a safe and healthy work environment
XEL will be profitable and will grow in order to provide both a return to our investors
and rewards to our team members.
XEL will be an exciting and enjoyable place to work while we achieve success.
EXHIBIT 1
The XEL Vision
*Responsiveness to customers’ new product needs as well as responding to customers’ emergency delivery
requirements have been identified as key strategic strengths. Therefore, the vision statement has been updated to
recognize this important element.
**The importance of cooperation and communication was emphasized with this update of the Vision Statement.
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546 Integrative Cases
you had to deal with analysts, and their projections be-
come your plan, which really turned me off. Also, share-
holders want a steady and predictable rate of return. Tech-
nology stocks are not steady—there are frequent ups and
downs in this marketplace—caused by a number
of factors, such as a major telecommunications
company deciding not to upgrade at the last
minute or Congress considering sweeping regula-
tory changes. Finally, Alex Brown felt that the
stock would have traded thinly. This, coupled
with SEC restrictions on trading, made the option
of going public less desirable.
Strategic Partnership
After taking these factors into account, Sanko said,
. . . we decided to take the third path and look for a po-
tential partner. But you have to also note that there was al-
ways the first option available as a safety valve. We could
not do anything and stay the way we were. That’s the nice
thing about all of this. We were not under any pressure to
go public or seek a partner. We could also wait and do one
of these things later on. So, we had the luxury of taking
our time.
In terms of finding a potential partner, there were cer-
tain key items that we wanted Alex Brown to consider in
helping us in this process. The first was that we, manage-
ment, wanted to remain with XEL. We had really grown
XEL as a business and were not interested in going off and
doing something else. The second key item was that we
were not interested in being acquired by someone who was
interested in consolidating our operations with theirs, clos-
ing this facility and moving functions from here to there.
To us, this would destroy the essence of XEL. The third
item was that we wanted a partner that would bring some-
thing to the table but would not try to micromanage our
business.
The Case Against Strategic Partnership
In the 1990s, “merger mania” swept the United States. In
the first nine months of 1995, the value of all announced
mergers and acquisitions reached $248.5 billion, surpass-
ing the record full-year volume of $246.9 billion reached in
1988. This volume occurred in the face of strong evidence
that over the past thirty-five years, mergers and acquisi-
tions had hurt organizations more than they had helped.8
Among the reasons for failure in mergers and acquisitions
were the following:
• Inadequate due diligence
• Lack of strategic rationale
• Unrealistic expectations of possible synergies
• Paying too much
• Conflicting corporate cultures
• Failure to move quickly to meld the two companies
Nevertheless, there had been successful mergers and
acquisitions. Most notably, small and midsized deals had
been found to have a better chance for success. Michael
Porter argued that the best acquisitions were “gap-filling,”
that is, a deal in which one company bought another to
strengthen its product line or expand its territory, including
globally. Anslinger and Copeland argued that successful
acquisitions were more likely when preacquisition man-
agers were kept in their positions, big incentives were of-
fered to top-level executives so that their net worths were
on the line, and the holding company was kept flat (that is,
the business was kept separate from other operating units
and retained a high degree of autonomy).9
More often than not, however, the deal was won or
lost after it was done. Bad post-merger planning and inte-
gration could doom the acquisition. “While there is clearly
a role for thoughtful and well-conceived mergers in Amer-
ican business, all too many don’t meet that description.”10
Choosing a Partner
“With these issues in mind, Alex Brown was able to screen
out possible candidates,” said Sanko. “In January, 1995,
this plan was presented to our board of directors for ap-
proval, and by February, we had developed the ‘book’
about XEL that was to be presented to these candidates.
We then had a series of meetings with the candidates in the
conference room at our new facility. The interesting aside
on these meetings was that, often, senior management from
some of these firms didn’t know what pieces of their busi-
ness that they still had or had gotten rid of. We did not see
this as a good sign.”
One of the firms with which XEL met was Gilbert As-
sociates, based in Reading, Pennsylvania. Gilbert Associ-
ates was founded in the 1940s as an engineering and con-
struction firm, primarily in the area of power plants. They
embarked on a strategy of reinventing themselves by di-
vesting their energy-related companies and becoming a
holding company whose subsidiaries operated in the high-
growth markets of telecommunications and technical ser-
vices. Gilbert also owned a real estate management-and-
development subsidiary. After due diligence and due
deliberation, Gilbert was chosen by the management team
as XEL’s strategic partner. The letter of intent was signed
on October 5, 1995, and the deal was closed on October
27, 1995. Gilbert paid $30 million in cash.11
Why was Gilbert chosen as the partner from among six
or seven suitors? Not because they made the highest bid.
XEL was attracted to Gilbert by three factors: (1) Gilbert’s
long-term strategy to enter the telecommunications indus-
try; (2) its intention of keeping XEL as a separate, au-
tonomous company; and (3) its willingness to pay cash (as
opposed to stock or debt). “It was a clean deal,” said
Sanko.
The deal was also attractive because it was structured
with upside potential. XEL was given realistic performance
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Integrative Cases 547
targets for the next three years. If these targets were
achieved, and Sanko had every expectation that they would
be, approximately $6-$8 million would be earned. Gilbert
did not place a cap on the upside.
In spite of the attractive financial package, more was
necessary to seal the deal. “At the end of the day,” said
Sanko, “culture, comfort, and trust—those were more im-
portant than money.” It was important to XEL’s board that
Gilbert presented a good fit. Sanko was encouraged be-
cause he felt comfortable with Gilbert’s chief executive of-
ficer. Vice president of Human Resources Julie Rich also
noted, “The management team was to remain intact.
Gilbert recognized that the XEL Vision was part of our
success and our strength. They wanted to keep it going.”
As one way of gaining confidence in Gilbert, Bill Sanko
personally spoke with the CEOs of other companies
Gilbert had recently acquired. In these conversations,
Sanko was assured that Gilbert would keep its promises.
Timothy S. Cobb, chair, president, and CEO of Gilbert
Associates, commented at the time of the acquisition: “This
transaction represented the first clear step toward the at-
tainment of our long-term strategy of focusing on the
higher margin areas of telecommunications and technical
services. XEL’s superior reputation for quality throughout
the industry, its innovative design and manufacturing ca-
pabilities, and its focus on products aimed at the emerging
information highway markets, will serve us well as we seek
to further penetrate this important segment of the vast
communications market.”12
Cobb continued, “We see long-term growth opportu-
nities worldwide for XEL’s current proprietary and Origi-
nal Equipment Manufacturer [OEM] products as well as
for the powerful new products being developed. These
products fall into two families: (1) fiber-optic network in-
terfaces designed specifically to meet the needs of telephone
companies, interexchange carriers (e.g., AT&T, Sprint,
MCI), and specialized network carriers installing fiber-
optic facilities; and (2) a hybrid fiber/cable broadband mo-
dem for use by cable television firms seeking to provide en-
hanced data communications services over their network
facilities. Going forward, we expect to leverage Gilbert’s
knowledge and relationships with the RBOCs to signifi-
cantly increase sales to those important customers, while
also utilizing our GAI-Tronics subsidiary’s established in-
ternational sales organization to further penetrate the vast
global opportunities which exist. As a result, revenues from
Gilbert Associates’ growing telecommunications segment
could represent over half of our total revenues by the end
of 1996.”
Timothy Cobb had come to Gilbert from Ameritech,
an RBOC which covered the Midwestern United States. He
had been president of GAI-Tronics Corporation, an inter-
national supplier of industrial communication equipment,
a subsidiary of Gilbert, prior to his appointment as
Gilbert’s CEO.
Bill Sanko offered, “When all the dust had settled, the
one firm that we really felt good about was Gilbert….
Gilbert is an interesting story in itself. Ironically, they had
contacted us in August, 1994, based on the advice of their
consultant who had read about us in an Inc.
magazine article. Unfortunately, at the time, they
did not have the cash to acquire us since they
were in the process of selling off one of their divi-
sions. In the intervening period, Gilbert Associ-
ates divested itself of one of its companies,
Gilbert/Commonwealth. This sale provided
needed funds for the acquisition of XEL.”
Once Sanko was confident that the deal
would go, but before the letter of intent was signed, the
pending acquisition was announced to the management
team, and a general meeting was held with all employees.
SEC regulations prohibited sharing particular information
(and common sense seconded this directive), but Sanko and
his associates felt it was important to keep employees in-
formed before the letter was signed.
During the meeting, Sanko told the employees that the
board was “seriously considering” an offer. Sanko assured
the employees that the suitor was not a competitor, and
that he felt that the suitor was a good fit in culture and val-
ues. Sanko reiterated that this partnership would give XEL
the resources it needed to grow. Questions were not al-
lowed because of SEC regulations. Employees left the meet-
ing concerned and somewhat nervous, but members of the
management team and Julie Rich were positioned in the
audience and made themselves available to talk.
During the closing of the deal, Sanko held another gen-
eral meeting, attended by Timothy Cobb, where more de-
tailed information was shared with employees. Managers
had been informed in a premeeting so that they would be
prepared to meet with their teams directly following the
general meeting.
Employees wanted to know about Gilbert. They
wanted to know simple information, such as where Gilbert
was located and what businesses it was in. They also
wanted to know strategic plans, such as whether Gilbert
had plans to consolidate manufacturing operations. Fi-
nally, they wanted to know about the near future of XEL—
they wanted to know if their benefits would change, if they
would still have profit sharing, and if the management
team would stay in place. “We have a track record of be-
ing open,” says Sanko. “Good news or bad is always
shared. This history stemmed much of the rumor mill.”
In the next few weeks, Tim Cobb returned to hold a se-
ries of meetings with the management team and with a fo-
cus group of thirty employees representing a cross-section
of the organization. Cobb also met with managers and
their spouses at an informal reception. Sanko wanted to
ease the management team into the realization that they
were now part of a larger whole in Gilbert. He asked Cobb
to make the same presentation to XEL that he was cur-
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548 Integrative Cases
rently making to stockholders throughout the country—a
presentation that emphasized the role XEL would play in
the long-term strategy of Gilbert.
Going Forward
The human resource systems remained in place
with no changes. The management bonus system
would change slightly because it included stock
options, which were no longer available. XEL’s
internal advisory board, the “management
team,” remained intact, but XEL’s external advi-
sory board was disbanded. Bill Sanko reported to
Gilbert’s chairman.
XEL’s strategic plan was to follow the process it al-
ready had in place, and which was not unlike Gilbert’s. The
cycle did not change: Gilbert expected XEL’s next strategic
plan in early November 1996.
XEL’s strategic objectives also remained the same.
Nothing was put on hold. Plans were still in place to pen-
etrate Brazil, Mexico, and South America.13 Sanko hoped
to capitalize on the synergies of Gilbert’s existing interna-
tional distribution network. XEL met with Gilbert’s inter-
national representatives to see if this was an avenue for
XEL to gain a more rapid presence in South America. Fi-
nally, XEL was planning to move into Radio Frequency
(RF) engineering and manufacturing, potentially opening
the door for wireless support.
Whether XEL would grow depended on the success of
these new ventures. In 1996, slight growth was forecasted.
But if these new markets really took off, Julie Rich was con-
cerned about hiring enough people in Colorado when the
labor market was approaching full employment. Julie con-
sidered more creative ways of attracting new hires: for ex-
ample, by offering more flexible scheduling, or by hiring un-
skilled workers and training them internally. A new U.S.
Department of Education grant to test computer-based
training systems was being implemented. Nevertheless, em-
ployment was strong in the Denver metro area in 1996, and
migration to Colorado had slowed. It would be a challenge
to staff XEL if high growth became the business strategy.
Approximately six weeks after the acquisition, Sanko
noted that few changes had taken place. Now that they
were a publicly held company, there was a great deal more
interest in meeting quarterly numbers. “If there has been a
change,” said Sanko, “it is that there is more attention to
numbers.” Julie Rich noted that there had been no
turnover in the six-week period following the acquisition.
She took this calm in the workforce as a sign that things
were going well so far.
One reason things went well was that the management
team had all worked for GTE prior to the spin-off of XEL.
Having all worked for a large public company, they did not
experience a terrible culture shock when the Gilbert acqui-
sition took place. Time would tell if the remaining XEL
employees would feel the same way.
As Sanko awaited Cobb’s upcoming visit, he wondered
how to prepare for the event and for the year ahead. He
wondered whether XEL would attempt new ventures into
RF technology, or how the planned fiber/cable broadband
modem would progress. He wondered whether Gilbert’s
experience in selling in South America would prove valu-
able for XEL’s international strategy. In addition, he won-
dered how he could encourage XEL and its employees to
become members of Gilbert’s “team.” Would XEL’s vision
survive the new partnership?
Finally, according to one study of CEO turnover after
acquisition, 80 percent of acquired CEOs left their compa-
nies by the sixth year after the acquisition, but 87 percent
of those who did leave, did so within two years. The key
factor in their turnover was post-acquisition autonomy.14
After nearly twelve years as the captain of his own ship,
Sanko wondered what his own future, and the future of the
XEL management team, would hold.
Notes
1. For additional information on XEL Communi-
cations, Inc., and the key strategic issues facing XEL,
see Robert P. McGowan and Cynthia V. Fukami,
“XEL Communications, Inc. (A),” Daniels College of
Business, University of Denver © 1995, published by
South-Western Publishing.
2. PR Newsletter (October 5, 1995).
3. Bill Menezes “Modern Times,” Rocky Mountain
News (April 28, 1996).
4. PR Newswire (October 5, 1995).
5. John Sheridan, “America’s Best Plants: XEL Commu-
nications,” IndustryWeek (October 16, 1995).
6. See McGowan and Fukami, “XEL Communications,
Inc. (A),” for a larger discussion of corporate culture
at XEL.
7. Sheridan, “America’s Best Plants.”
8. Philip Zweig “The Case Against Mergers,” Business-
Week (October 30, 1995).
9. Patricia Anslinger and Thomas Copeland, “Growth
Through Acquisitions: A Fresh Look,” Harvard Busi-
ness Review (January–February 1996).
10. Zweig, “The Case Against Mergers.”
11. Dina Bunn “XEL to be Sold in $30 Million Deal,”
Rocky Mountain News (October 27, 1995).
12. PR Newswire (October 5, 1995).
13. For more information on XEL’s global penetration,
see McGowan and Allen, “XEL Communications,
Inc. (B): Going Global.”
14. Kim A. Stewart, “After the Acquisition: A Study of
Turnover of Chief Executives of Target Companies,”
doctoral dissertation, University of Houston, 1992.
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A Project to Remember
In June 1991, Ian Jones a production manager with Empire
Plastics Northern (EPN) was pondering the latest project to
increase the production rate of oleic acid. This was the
third project in 6 years targeting the oleic acid plant for im-
provement and arose from the policy followed by the
group’s directors. This was to identify profitable plants and
invest in improving their productivity and profitability,
thus avoiding the need for investment in new facilities.
The installation of the “wet end” went well and no
problems were experienced. However, the “dry end” was a
different story. It wasn’t working a year after practical
completion, except in short bursts. They were still making
changes to it. Jones had known all along that the technol-
ogy on the dry end was relatively new and might prove
troublesome, but the procurement department at Empire
Consultants in their wisdom recommended its use.
Granted, they did send a couple of guys over to Italy to see
some similar plants first.
Jones constructed an organizational chart and set about
examining the key issues raised by this project (Exhibit 1).
Jones had been appointed as commissioning manager at
the commencement of the project. He remembered some of
the nightmares experienced by colleagues during two earlier
oleic acid projects and firmly resolved to make this one dif-
ferent; it was going to be “his” to manage on completion,
and he was going to make his presence felt from the outset.
The execution of the project had been overseen by the
group’s engineering arm, Empire Consultants (EC), headed
up by Henry Holdsworth as site project manager and John
Marshall as construction engineer. It was a good team. The
project was ambitious, but there were several signs of
progress in the beginning. What did perplex him, though,
was Marshall’s apparent lack of enthusiasm.
Holdsworth described the project as a double manage-
ment contract, and in this respect it was an unusual project.
Empire Consultants traditionally assumed the role of man-
agement contactor and directly organized the trade contrac-
tors and discipline consultants. Times were changing,
though, and both Holdsworth and Marshall had com-
mented on the increasing frequency with which projects
were now being tendered as complete packages to outside
management contractors. This was their first project that in-
volved two management contractors simultaneously, and
neither Marshall nor Holdsworth was happy. Their own in-
volvement had not been clearly defined. Western Construc-
tion had a £3.1 million contract for the “wet end” and
Teknibuild a £6.0 million contract for the “dry end.” These
two contractors provided all the design and management ef-
Integrative Cases 549
fort during the project. EC’s role was effectively re-
duced to acting as construction policemen; check-
ing that design and construction were being carried
out in accordance with the original process dia-
gram and that EPN’s demanding process control
and safety requirements were being maintained.
Selecting the management contractors turned
out to be extremely protracted and Holdsworth, encouraged
by Jones, went ahead and ordered reactors for the wet end
and a fluidized bed dryer for the dry end. Over 50% of the
total material requirements were in order before either con-
tractor had been formally appointed. Jones was confident
that by doing this they could cut the project duration by sev-
eral months. Nobody had asked Marshall for his opinion.
Conflict Ahead
The first line breaks were in October 1988. Site operations
were supervised by Marshall and the two contractor site
managers: Bob Weald from Western and Vic Mason from
Teknibuild.
As a construction engineer, Marshall was familiar
with the antics of clients and client representatives, espe-
cially regarding their tendency to try to make changes. He
commented:
Clients always try and change things! When they see the
job in the flesh as it were they go “Oh, we need some ex-
tra paving round here, or extra railings there!” But if they
didn’t ask for that at the start, they won’t get it. If they
want an extra 100 metres of paving they have to pay for it.
In this project we had about £500k set aside for contin-
gency purposes, that is unforeseen eventualities over and
above the price fixed with the management contractors. If
that is not used up by the end of the contract, as in this
case, then we can give the clients some extras.
Jones recalled that by June 1989 relationships were not
going at all well at the dry end. EC had procured a flu-
idized bed dryer, a cooler, and more than 300 associated
parts, and, as the purchasers of this equipment, they were
Integrative Case 5.0
Empire Plastics*
5.0
*This case was prepared by Dr. Paul D. Gardiner, Department of Business
Organisation, Heriot-Watt University, Edinburgh. It is intended to be used as
the basis for class discussion rather than to illustrate either effective or
ineffective handling of a management situation.
The case was made possible by the cooperation of an organization which
wishes to remain anonymous.
© 1994 P.D. Gardiner, Heriot-Watt University, Edinburgh.
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Licensed to:

550 Integrative Cases
the ones responsible for chasing up design drawings from
the supplier, Sultan Engineering.
Unfortunately, Teknibuild, who, as management con-
tractors, were supposed to design and build the plant, had
problems getting the necessary information from Sultan to
design the steelwork and foundations. As Marshall had
noted earlier:
They [Teknibuild] were constantly at our doors and throats
looking for more information to get on. They didn’t seem
to have enough data to design properly, which led to con-
flict very early on. We got off to a bad start and that feel-
ing carried on right to the end of the job. I think in every
discipline we had problems with Teknibuild. Our discipline
engineer against their discipline engineer.
The only exception to this was with the electrical and
instrumentation (E & I) work. Marshall had put that down
to the E & I subcontractor coming in at the end of the log
jam of information, giving them more time to get it right.
While this was going on, Jones got more and more
frustrated. In his opinion a lot of time was wasted between
Teknibuild and EC for no good reason. He was sure that
Teknibuild had more than enough design information to
do their job.
When confronted by Jones, Marshall remarked that
the truth probably lay somewhere in between, but added
that he was “particularly dismayed at Teknibuild’s unwill-
ingness to spend man-hours on the design until they had
100% definition from Sultan Engineering,” almost to the
point where they knew where every nut and bolt was. It
was a real mess . . . and Marshall was accepting none of
the blame.
On the other hand, things went fine with Western Con-
struction. Their approach was much more relaxed; they
Empire Plastics
Group PLC
Empire Plastics
Northern
Empire
Consultants
Site Project
Manager
Henry Holdsworth
Commissioning
Manager
Ian Jones
Construction
Engineer
John Marshal
Key
Management
Issues?
Dry EndWet End
Organizational Relationships
Contractual Relationships
Western Const.
(Management
Contractor)
Teknibuild
(Management
Contractor)
Site Manager
Bob Weeks
Site Manager
Vic Mason
Suppliers
Sultan Eng.
SubtradesSubtradesSuppliers
EXHIBIT 1
Organizational and Contractual
Relationships
5.0
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Integrative Cases 551
had a design office on site with low overheads, whereas
Teknibuild worked from the head office in a large design
office with high overheads.
On one occasion Marshall asked for Teknibuild’s plan-
ner to come down and take some site measurements. The
reply he received was not very constructive: “I don’t know
if I can do that, it’s at least a couple of hours to get down
there.” Holdsworth agreed that Teknibuild were constantly
watching their man-hours:
You felt all the time that they were looking for profit rather
than trying to get the job done. Even Teknibuild’s con-
struction man, Vic Mason, had internal conflict with his
own designers. But with Western it was the other way
round, you really felt they were seeking to set a good im-
pression.
Jones thought that perhaps communication with West-
ern had been good because their design and construction
people operated side by side, communication was just
across the corridor; whereas Teknibuild’s site men had dif-
ficulty getting answers out of their Head Office. Marshall
had always maintained that the best-run jobs are the ones
in which you get a good design-construction liaison, par-
ticularly by having the designers on site with you.
Failing . . . Forward
Jones considered that in the future it might be a good idea
to insist that management contractors set up a local design
team on site. Current practice was to leave it up to the con-
tractor, but these days EC had few designers of their own
to help.
The trouble with management contractors, he sur-
mised, is that you create an extra link in the communica-
tions chain—a large link that can easily break
down, and, in his experience, did break down.
Relationships had been better at the wet end,
he felt, because Marshall and Weald had worked
together before. Marshall knew Weald, knew
how he worked and where he was coming from.
They could trust each other.
At the Teknibuild end, Vic Mason, their site
manager, caused no end of conflict. He was a bit
belligerent; thought he knew best, had done it all before,
and couldn’t be told anything. It never really got out of
hand . . . just a bit heated at times. At the end of the day,
Marshall maintained that Mason’s intentions were ulti-
mately to get the job built. But Jones remained unim-
pressed, even if Mason’s main trouble was his own design-
ers and suppliers.
Driving home, Jones wondered what the effect of the
company’s new policy on managing projects would be on
people like Harry Holdsworth and John Marshall. He
couldn’t help remembering what Marshall had said about
Teknibuild and Western independently setting up their own
enquiries and going out for bids separately; there did seem
to be a lot of repetition—maybe Marshall was right in
viewing the new system as “a very inefficient way of doing
projects.”
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552 Integrative Cases
The Audubon Zoo was the focus of national con-
cern in the early 1970s, with well-documented
stories of animals kept in conditions that were
variously termed an “animal ghetto,”1 “the New
Orleans antiquarium,” and even “an animal con-
centration camp.”2 In 1971, the Bureau of Gov-
ernmental Research recommended a $5.6 million
zoo improvement plan to the Audubon Park Commission
and the City Council of New Orleans. The local Times
Picayune commented on the new zoo: “It’s not going to be
quite like the Planet of the Apes situation in which the apes
caged and studied human beings but something along those
broad general lines.”3 The new zoo confined people to
bridges and walkways while the animals roamed amidst
grass, shrubs, trees, pools, and fake rocks. The gracefully
curving pathways, generously lined with luxuriant plant-
ings, gave the visitor a sense of being alone in a wilderness,
although crowds of visitors might be only a few yards
away.
The Decision
The Audubon Park Commission launched a $5.6 million
development program, based on the Bureau of Govern-
mental Research plan for the zoo, in March 1972. A bond
issue and a property tax dedicated to the zoo were put be-
fore the voters on November 7, 1972. When it passed by
an overwhelming majority, serious discussions began about
what should be done. The New Orleans City Planning
Commission finally approved the master plan for the
Audubon Park Zoo in September 1973. But the institution
of the master plan was far from smooth.
The Zoo Question Goes Public
Over two dozen special interests were ultimately involved in
choosing whether to renovate/expand the existing facilities
or move to another site. Expansion became a major com-
munity controversy. Some residents opposed the zoo expan-
sion, fearing “loss of green space” would affect the secluded
character of the neighborhood. Others opposed the loss of
what they saw as an attractive and educational facility.
Most of the opposition came from the zoo’s affluent
neighbors. Zoo Director John Moore ascribed the criticism
to “a select few people who have the money and power to
make a lot of noise.” He went on to say, “[T]he real basis be-
hind the problem is that the neighbors who live around the
edge of the park have a selfish concern because they want the
park as their private backyard.” Legal battles over the ex-
pansion plans continued until early 1976. At that time, the
4th Circuit Court of Appeals ruled that the expansion was le-
gal.4 An out-of-court agreement with the zoo’s neighbors (the
Upper Audubon Association) followed shortly.
Physical Facilities
The expansion of the Audubon Park Zoo took it from
fourteen to fifty-eight acres. The zoo was laid out in geo-
graphic sections: the Asian Domain, World of Primates,
World’s Grasslands, Savannah, North American Prairie,
South American Pampas, and Louisiana Swamp, according
to the zoo master plan developed by the Bureau of Gov-
ernmental Research. Additional exhibits included the Wis-
ner Discovery Zoo, Sea Lion exhibit, and Flight Cage. Ex-
hibit 1 is a map of the new zoo.
Purpose of the Zoo
The main outward purpose of the Audubon Park Zoo was
entertainment. Many of the promotional efforts of the zoo
were aimed at creating an image of the zoo as an enter-
taining place to go. Obviously, such a campaign was nec-
essary to attract visitors to the zoo. Behind the scenes, the
zoo also preserved and bred many animal species, con-
ducted research, and educated the public. The mission
statement of the Audubon Institute is given in Exhibit 2.
New Directions
A chronology of major events in the life of the Audubon
Zoo is given in Exhibit 3. One of the first significant
changes made was the institution of an admission charge in
1972. Admission to the zoo had been free to anyone prior
to the adoption of the renovation plan. Ostensibly, the ini-
tial purpose behind instituting the admission charge was to
prevent vandalism,5 but the need for additional income was
also apparent. Despite the institution of and increases in
admission charges, attendance increased dramatically (Ex-
hibit 4).
Operations
Friends of the Zoo
The Friends of the Zoo was formed in 1974 and incorpo-
rated in 1975 with four hundred members. The stated pur-
pose of the group was to increase support and awareness
of the Audubon Park Zoo. Initially, the Friends of the Zoo
tried to increase interest in and commitment to the zoo, but
its activities increased dramatically over the following
Integrative Case 6.0
The Audubon Zoo, 1993*
6.0
*By Claire J. Anderson, Old Dominion University, and Caroline Fisher, Loyola
University, New Orleans. © 1993, 1991, 1989, 1987, Claire J. Anderson
and Caroline Fisher. This case was designed for classroom discussion only,
not to depict effective or ineffective handling of administrative situations.
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

Australia
Flamingo Pool
Louisiana
Swamp South American
Pampas
North American Prairie
Savannah
sdnalssarGs’dlro
W
World of
Primates
Children’s
Zoo
Asian
Domain
Bird House Administration
Sea Lion
Pool
Reptile House
Aquarium
Parking
Entrance
Integrative Cases 553
years to where it was involved in funding, operating, and
governing the zoo.
The Friends of the Zoo had a 24-member governing
board. Yearly elections were held for six members of the
board, who served four-year terms. The board oversaw the
policies of the zoo and set guidelines for memberships, con-
cessions, fund-raising, and marketing. Actual policy mak-
ing and operations were controlled by the Audubon Park
Commission, however, which set zoo hours, admission
prices, and so forth.
Through its volunteer programs, the Friends of the
Zoo staffed many of the zoo’s programs. Members of the
Friends of the Zoo served as “edZOOcators,” education
volunteers who were specially trained to conduct interpre-
tive educational programs, and “Zoo Area Patrollers,”
who provided general information at the zoo and helped
with crowd control. Other volunteers assisted in the com-
missary, the Animal Health Care Center, and the Wild Bird
Rehabilitation Center or helped with membership, public
relations, graphics, clerical work, research, or horticulture.
6.0
EXHIBIT 1
The Audubon Park Zoo
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554 Integrative Cases
6.0
The mission of the Audubon Institute is to cultivate awareness and appreciation of life
and the earth’s resources and to help conserve and enrich our natural world. The Insti-
tute’s primary objectives toward this are:
Conservation: To participate in the global effort to conserve natural resources by devel-
oping and maintaining captive stocks of endangered plants, animals, and marine life,
and by cooperating with related projects in the wild.
Education: To impart knowledge and understanding of the interaction of nature and
man through programs, exhibits, and publications and to encourage public participation
in global conservation efforts.
Research: To foster the collection and dissemination of scientific information that will en-
hance the conservation and educational objectives of the facilities of the Audubon Institute.
Economics: To ensure long-range financial security by sound fiscal management and
continued development, with funding through creative means that encourage corpo-
rate, foundation, and individual support.
Leadership: To serve as a model in the civic and professional communities. To foster a
spirit of cooperation, participation, and pride.
EXHIBIT 2
Audubon Institute Mission Statement
Source: The Audubon Institute.
1972 Voters approved a referendum to provide tax dollars to renovate and expand the Zoo. The first Zoo-To-
Do was held. An admission charge was instituted.
1973 The City Planning Commission approved the initial master plan for the Audubon Park Zoo calling for
$3.4 million for upgrading. Later phases called for an additional $2.1 million.
1974 Friends of the Zoo formed with 400 members to increase support and awareness of the Zoo.
1975 Renovations began with $25 million in public and private funds; 14 acres to be expanded to 58 acres.
1976 The Friends of the Zoo assumed responsibility for concessions.
1977 John Moore went to Albuquerque; Ron Forman took over as Park and Zoo director.
1980 First full-time education staff assumed duties at the Zoo.
1981 Contract signed allowing New Orleans Steamboat Company to bring passengers from downtown to
the Park.
1981 Delegates from the American Association of Zoological Parks and Aquariums ranked the Audubon Zoo
as one of the top three zoos of its size in America.
1981 Zoo accredited.
1982 The Audubon Park Commission reorganized under Act 352, which required the Commission to contract
with a nonprofit organization for the daily management of the Park.
1985 The Zoo was designated as a Rescue Center for Endangered and Threatened Plants.
1986 Voters approved a $25 million bond issue for the Aquarium.
1988 The Friends of the Zoo became the Audubon Institute.
1990 The Aquarium of the Americas opened in September.
EXHIBIT 3
Chronology of Major Events for the Zoo
Source: The Audubon Institute.
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Integrative Cases 555
6.0
EXHIBIT 4
Admission Charges
Source: The Audubon Institute.
Admission Charges
Year Adult Child
1972 $0.75 $0.25
1978 1.00 0.50
1979 1.50 0.75
1980 2.00 1.00
1981 2.50 1.25
1982 3.00 1.50
1983 3.50 1.75
1984 4.00 2.00
1985 4.50 2.00
1986 5.00 2.50
1987 5.50 2.50
1988 5.50 2.50
1989 6.00 3.00
1990 6.50 3.00
1991 7.00 3.25
Admission
Number of Paid Number of Member
Year Admissions Admissions
1972 163,000
1973 310,000
1974 345,000
1975 324,000
1976 381,000
1977 502,000
1978 456,000
1979 561,000
1980 707,000
1981 741,000
1982 740,339 78,950
1983 835,044 118,665
1984 813,025 128,538
1985 856,064 145,020
1986 916,865 187,119
1987 902,744 193,926
1988 899,181 173,313
1989 711,709 239,718
1990 725,469 219,668
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556 Integrative Cases
In 1988, the name of the Friends of the Zoo was
changed to the Audubon Institute to reflect its growing in-
terest in activities beyond the zoo alone. It planned to pro-
mote the development of other facilities and manage these
facilities once they were a reality.
Fund-Raising. The Audubon Park Zoo and the
Friends of the Zoo raised funds through five ma-
jor types of activities: Friends of the Zoo mem-
bership, concessions, “Adopt an Animal,” “Zoo-
To-Do,” and capital fund drives. Zoo managers
from around the country came to the Audubon
Park Zoo for tips on fund-raising.
Membership. Membership in the Friends of the Zoo was
open to anyone. The membership fees increased over the
years as summarized in Exhibit 5, yet the number of mem-
bers increased steadily from the original 400 members in
1974 to 38,000 members in 1990, but declined to 28,000
in 1992. Membership allowed free entry to the Audubon
Park Zoo and many other zoos around the United States.
Participation in Zoobilations (annual members-only
evenings at the zoo) and the many volunteer programs de-
scribed earlier were other benefits of membership.
Expanding membership required a special approach to
marketing the zoo. Chip Weigand, director of marketing
for the zoo, stated:
. . . [I]n marketing memberships we try to encourage repeat
visitations, the feeling that one can visit as often as one
wants, the idea that the zoo changes from visit to visit and
that there are good reasons to make one large payment or
donation for a membership card, rather than paying for
each visit…. [T]he overwhelming factor is a good zoo that
people want to visit often, so that a membership makes
good economical sense.
Results of research on visitors to the zoo are contained
in Exhibits 6 and 7.
In 1985, the zoo announced a new membership de-
signed for business, the Audubon Zoo Curator Club, with
four categories of membership: bronze, $250; silver, $500;
gold, $1,000; and platinum, $2,500 and more.
Concessions. The Friends of the Zoo took over the
Audubon Park Zoo concessions for refreshments and gifts
in 1976 through a public bidding process. The concessions
were run by volunteer members of the Friends of the Zoo
and all profits went directly to the zoo. Before 1976, con-
cession rentals brought in $1,500 in a good year. Profits
from operation of the concessions by the Friends of the
Zoo brought in $400,000 a year by 1980 and almost
$700,000 in profits in 1988. In 1993, FOTZ was consider-
ing leasing the concessions to a third-party vendor.
Adopt an Animal. Zoo Parents paid a fee to “adopt” an
animal, the fee varying with the animal chosen. Zoo Par-
ents’ names were listed on a large sign inside the zoo. They
also had their own annual celebration, Zoo Parents Day.
Zoo-To-Do. Zoo-To-Do was an annual black-tie fund-
raiser held with live music, food and drink, and original,
high-class souvenirs, such as posters or ceramic necklaces.
Admission tickets, limited to 3,000 annually, were priced
starting at $100 per person. A raffle was conducted in con-
junction with the Zoo-To-Do, with raffle items varying
6.0
Family Individual Number of
Year Membership Fees Membership Fees Memberships
1979 $20 $10 1,000
1980 20 10 7,000
1981 20 10 11,000
1982 25 15 18,000
1983 30 15 22,000
1984 35 20 26,000
1985 40 20 27,000
1986 45 25 28,616
1987 45 25 29,318
1988 45 25 33,314
1989 49 29 36,935
1990 49 29 38,154
EXHIBIT 5
Membership Fees and Membership
Source: The Audubon Institute.
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Integrative Cases 557
from an opportunity to be zoo curator for a day to the use
of a Mercedes-Benz for a year. Despite the rather stiff price,
the Zoo-To-Do was a popular sellout every year. Local
restaurants and other businesses donated most of the nec-
essary supplies, decreasing the cost of the affair. In 1985,
the Zoo-To-Do raised almost $500,000 in one night, more
money than any other nonmedical fund-raiser in the
county.6
Advertising
The Audubon Zoo launched impressive marketing cam-
paigns in the 1980s. The zoo received ADDY awards from
the New Orleans Advertising Club year after year.7 In
1986, the film Urban Eden, produced by Alford Advertis-
ing and Buckholtz Productions Inc. in New Orleans, fin-
ished first among fifty entries in the “documentary films,
public relations” category of the Eighth Annual Houston
International Film Festival. The first-place Gold Award rec-
ognized the film for vividly portraying Audubon Zoo as a
conservation, rather than a confining, environment.
During the same year, local television affiliates of ABC,
CBS, and NBC produced independent TV spots using the
theme: “One of the World’s Greatest Zoos Is in Your Own
Backyard…Audubon Zoo!” Along with some innovative
views of the Audubon Zoo being in someone’s “backyard,”
local news anchor personalities enjoyed “monkeying
around” with the animals, and the zoo enjoyed some wel-
come free exposure.8
6.0
Number of Zoo Visits Over Past Two Years
Respondent Four or Two or One or Never
Characteristic More Three None Visited
Age
Under 27 26 35 31 9
27 to 35 55 27 15 3
36 to 45 48 32 11 9
46 to 55 18 20 37 25
Over 55 27 29 30 14
Marital status
Married 41 28 20 11
Not married 30 34 24 13
Children at home
Yes 46 30 15 9
No 34 28 27 12
Interested in visiting
New Orleans Aquarium
Very, with emphasis 47 26 18 9
Very, without emphasis 45 24 23 12
Somewhat 28 37 14 11
Not too 19 32 27 22
Member of Friends of the Zoo
Yes 67 24 6 4
No, but heard of it 35 30 24 12
Never heard of it 25 28 35 13
Would you be interested in joining
FOTZ (non-members only)?
Very/somewhat 50 28 14 8
No/don’t know 33 29 26 12
EXHIBIT 6
Respondent Characteristics of Zoo Visitors According to Visitation Frequency (in %)
Source: The Audubon Institute.
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558 Integrative Cases
In 1993, the marketing budget was over $800,000, in-
cluding group sales, public relations, advertising, and spe-
cial events. Not included in this budget was developmental
fund-raising or membership. Percentage breakdowns of the
marketing budget can be found in Exhibit 8.
The American Association of Zoological Parks and
Aquariums reported that most zoos find the majority of
their visitors live within a single population center in close
proximity to the park.9 Thus, to sustain attendance over
the years, zoos must attract the same visitors repeatedly. A
6.0
Very Very
Imp. w/ Imp. w/o Somewhat
Reason (Closed-Ended) Emphasis Emphasis Important Unimportant
The distance of the Zoo 7 11 21 60
from where you live
The cost of a Zoo visit 4 8 22 66
Not being all that interested 2 12 18 67
in Zoo animals
The parking problems on 7 11 19 62
weekends
The idea that you get tired 5 18 28 49
of seeing the same exhibits
over and over
It’s too hot during summer 25 23 22 30
months
Just not having the idea 8 19 26 48
occur to you
EXHIBIT 7
Relative Importance of Seven Reasons Respondent Does Not Visit the Zoo More Often (in %)
Source: The Audubon Institute.
Marketing
General and Administrative $ 30,900
Sales 96,300
Public Relations 109,250
Advertising 304,800
Special Events 157,900
TOTAL $699,150
Public Relations
Education, Travel, and Subscriptions $ 5,200
Printing and Duplicating 64,000
Professional Services 15,000
Delivery and Postage 3,000
Telephone 1,250
Entertainment 2,000
Supplies 16,600
Miscellaneous 2,200
TOTAL $109,250
Advertising
Media $244,000
Production 50,000
Account Service 10,800
TOTAL $304,800
Special Events
General and Administrative $ 27,900
LA Swamp Fest 35,000
Earthfest 25,000
Ninja Turtle Breakfast 20,000
Jazz Search 15,000
Fiesta Latina 10,000
Crescent City Cats 10,000
Other Events 15,000
TOTAL $157,900
EXHIBIT 8
1991 Marketing Budget
Source: The Audubon Institute.
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Integrative Cases 559
large number of the zoo’s promotional programs and spe-
cial events were aimed at just that.
Progress was slow among non-natives. For example,
Simon & Schuster, a reputable publishing firm, in its 218-
page [Frommer’s] 1983–84 Guide to New Orleans, man-
aged only a three-word allusion to a “very nice zoo.” A
1984 study found that only 36 percent of the visitors were
tourists, and even this number was probably influenced to
some extent by an overflow from the World’s Fair.
Promotional Programs
The Audubon Park Zoo and the Friends of the Zoo con-
ducted a multitude of very successful promotional pro-
grams. The effect was to have continual parties and cele-
brations going on, attracting a variety of people to the zoo
(and raising additional revenue). Exhibit 9 lists the major
annual promotional programs conducted by the zoo.
In addition to these annual promotions, the zoo sched-
uled concerts of well-known musicians, such as Irma
Thomas, Pete Fountain, The Monkees, and Manhattan
Transfer, and other special events throughout the year. As
a result, a variety of events occurred each month.
Many educational activities were conducted all year
long. These included (1) a junior zookeeper program for
seventh and eighth graders; (2) a student intern program
for high school and college students; and (3) a ZOOmobile
that took live animals to such locations as special educa-
tion classes, hospitals, and nursing homes.
Admission Policy
The commission recommended the institution of an ad-
mission charge. Arguments generally advanced against
such a charge held that it results in an overall decline
in attendance and a reduction of nongate revenues. Pro-
ponents held that gate charges control vandalism, pro-
duce greater revenues, and result in increased public
awareness and appreciation of the facility. In the early
1970s, no major international zoo charged admission,
and 73 percent of the 125 zoos in the United States
charged admission.
6.0
EXHIBIT 9
Selected Audubon Park Zoo Promotional Programs
Source: The Audubon Institute
Month Activity
March Louisiana Black Heritage Festival. A two-day celebration of
Louisiana’s black history and its native contributions through food, mu-
sic, and arts and crafts.
March Earth Fest. The environment and our planet are the focus of this fun-
filled and educational event. Recycling, conservation displays, and pup-
pet shows.
April Jazz Search. This entertainment series is aimed at finding the best new
talent in the area with the winners featured at the New Orleans Jazz &
Heritage Festival.
April Zoo-To-Do for kids. At this “pint-sized” version of the Zoo-To-Do, fun
and games abound for kids.
May Zoo-To-Do. Annual black tie fund-raiser featuring over 100 of New Or-
leans’ finest restaurants and three music stages.
May Irma Thomas Mother’s Day Concert. The annual celebration of
Mother’s Day with a buffet.
August Lego Invitational. Architectural firms turn thousands of Lego pieces
into original creations.
September Fiesta Latina. Experience the best the Hispanic community has to offer
through music, cuisine, and arts and crafts.
October Louisiana Swamp Festival. Cajun food, music, and crafts highlight this
four-day salute to Louisiana’s bayou country; features hands-on contact
with live swamp animals.
October Boo at the Zoo. This annual Halloween extravaganza features games,
special entertainment, trick or treat, a haunted house, and the Zoo’s
Spook Train.
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560 Integrative Cases
The commission argued that there is no such thing as
a free zoo; someone must pay. If the zoo is tax-supported,
then locals carry a disproportionate share of the cost. At
the time, neighboring Jefferson Parish was growing by
leaps and bounds and surely would bring a large,
nonpaying [constituency] to the new zoo. Further,
since most zoos are tourist attractions, tourists
should pay since they contribute little to the local
tax revenues.
The average yearly attendance for a zoo may
be estimated using projected population figures
multiplied by a “visitor generating factor.” The av-
erage visitor generating factor of fourteen zoos sim-
ilar in size and climate to the Audubon Zoo was 1.34, with
a rather wide range from a low of 0.58 in the cities of
Phoenix and Miami to a high of 2.80 in Jackson, Mississippi.
Attracting More Tourists and Other Visitors
A riverboat ride on the romantic paddle wheeler Cotton
Blossom took visitors from downtown New Orleans to the
zoo. Originally, the trip began at a dock in the French Quar-
ter, but it was later moved to a dock immediately adjacent
to New Orleans’ newest attraction, the Riverwalk, a Rouse
development, on the site of the 1984 Louisiana World Ex-
position. Not only was the riverboat ride great fun, it also
lured tourists and conventioneers from the downtown at-
tractions of the French Quarter and the new Riverwalk to
the zoo, some six miles upstream. A further allure of the
riverboat ride was a return trip to downtown on the New
Orleans Streetcar, one of the few remaining trolley cars in
the United States. The Zoo Cruise not only drew more vis-
itors but also generated additional revenue through landing
fees paid by the New Orleans Steamboat Company and
[helped keep] traffic out of uptown New Orleans.10
Financial
The zoo’s ability to generate operating funds has been as-
cribed to the dedication of the Friends of the Zoo, contin-
uing increases in attendance, and creative special events
and programs. A history of adequate operating funds al-
lowed the zoo to guarantee capital donors that their gifts
would be used to build and maintain top-notch exhibits. A
comparison of the 1989 and 1990 Statements of Operating
Income and Expense for the Audubon Institute is in Ex-
hibit 10.
Capital Fund Drives
The Audubon Zoo Development Fund was established in
1973. Corporate/industrial support of the zoo has been
very strong—many corporations have underwritten con-
struction of zoo displays and facilities. A partial list of ma-
jor corporate sponsors is in Exhibit 11. A sponsorship was
considered to be for the life of the exhibit. The develop-
ment department operated on a 12 percent overhead rate,
6.0
EXHIBIT 10
The Audubon Institute, Inc. The Audubon Park and Zoological Garden Statement
of Operating Income and Expenses
Source: The Audubon Institute.
1989 1990 (Zoo) 1990 (Aquarium)
Operating Income
Admissions $2,952,000 $3,587,000 $3,664,000
Food and Gift Operations 2,706,000 3,495,500 711,000
Membership 1,476,000 1,932,000 2,318,000
Recreational Programs 410,000 396,000 0
Visitor Services 246,000 218,000 0
Other 410,000 32,000 650,000
TOTAL INCOME $8,200,000 $9,660,500 $7,343,000
Operating Expenses
Maintenance $1,394,000 $1,444,000 $1,316,000
Educational/Curatorial 2,296,000 2,527,500 2,783,000
Food and Gift Operations 1,804,000 2,375,000 483,000
Membership 574,000 840,000 631,000
Recreational 328,000 358,000 362,000
Marketing 410,000 633,000 593,000
Visitor Services 574,000 373,000 125,000
Administration 820,000 1,110,000 1,050,000
TOTAL EXPENSES $8,200,000 $9,660,500 $7,343,000
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Integrative Cases 561
which meant 88 cents of every dollar raised went toward
the projects. By 1989, the master plan for development was
75 percent complete. The fund-raising goal for the zoo in
1989 was $1,500,000.
Management
The Zoo Director
Ron Forman, Audubon Zoo director, was called a “zoomas-
ter extraordinaire” and was described by the press as a
“cross between Doctor Doolittle and the Wizard of Oz,” as
a “practical visionary,” and as “serious, but with a sense of
humor.”11 A native New Orleanian . . . Forman quit an
MBA program to join the city government as an adminis-
trative assistant and found himself doing a business analysis
project on the Audubon Park. Once the city was committed
to a new zoo, Forman was placed on board as an assistant
to the zoo director, John Moore. In early 1977, Moore gave
up the battle between the “animal people” and the “people
people,”12 and Forman took over as park and zoo director.
Forman was said to bring an MBA-meets-menagerie
style to the zoo, which was responsible for transforming
it from a public burden into an almost completely self-
sustaining operation. The result not only benefited the cit-
izens of the city but also added a major tourist attraction
to the economically troubled city of the 1980s.
Staffing
The zoo used two classes of employees, civil service,
through the Audubon Park Commission, and noncivil ser-
vice. The civil service employees included the curators and
zookeepers. They fell under the jurisdiction of the city civil
service system but were paid out of the budget of the
Friends of the Zoo. Employees who worked in public rela-
tions, advertising, concessions, fund-raising, and so on
were hired through the Friends of the Zoo and were not
part of the civil service system. See Exhibit 12 for further
data on staffing patterns.
6.0
Amoco Foundation
American Express
Anheuser-Busch, Inc.
Arthur Andersen and Company
J. Aron Charitable Foundation, Inc.
Bell South Corporation
BP America
Chevron USA, Inc.
Conoco, Inc.
Consolidated Natural Gas Corporation
Entergy Corporation
Exxon Company, USA
Freeport-McMoRan, Inc.
Host International, Inc.
Kentwood Spring Water
Louisiana Coca-Cola Bottling Company, Ltd.
Louisiana Land and Exploration Company
Martin Marietta Manned Space Systems
McDonald’s Operators of New Orleans
Mobil Foundation, Inc.
National Endowment for the Arts
National Science Foundation
Ozone Spring Water
Pan American Life Insurance Company
Philip Morris Companies Inc.
Shell Companies Foundation, Inc.
Tenneco, Inc.
Texaco USA
USF&G Corporation
Wendy’s of New Orleans, Inc.
EXHIBIT 11
Major Corporate Sponsors
Source: The Audubon Institute.
Number of Paid Number of
Year Employees Volunteers
1972 36
1973 49
1974 69
1975 90
1976 143
1977 193
1978 184
1979 189
1980 198
1981 245
1982 305
1983 302 56
1984 419 120
1985 454 126
1986 426 250
1987 431 300
1988 462 310
1989 300 270
1990 450 350
EXHIBIT 12
Employee Structure
Source: The Audubon Institute.
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562 Integrative Cases
The Zoo in the Late 1980s
A visitor to the new Audubon Park Zoo could quickly see
why New Orleanians were so proud of their zoo. In a city
that was termed among the dirtiest in the nation, the zoo
was virtually spotless. This was a result of ade-
quate staffing and the clear pride of both those
who worked at and those who visited the zoo.
One of the first points made by volunteers guid-
ing school groups was that anyone seeing a piece
of trash on the ground must pick it up.13 A 1986
city poll showed that 93 percent of the citizens
surveyed gave the zoo a high approval rating—an
extremely high rating for any public facility.
Kudos came from groups outside the local area as
well. Delegates from the American Association of Zoo-
logical Parks and Aquariums ranked the Audubon Park
Zoo as one of the three top zoos of its size in America. In
1982, the American Association of Nurserymen gave the
zoo a Special Judges Award for its use of plant materials.
In 1985, the Audubon Park Zoo received the Phoenix
Award from the Society of American Travel Writers
for its achievements in conservation, preservation, and
beautification.
By 1987, the zoo was virtually self-sufficient. The small
amount of money received from government grants
amounted to less than 10 percent of the budget. The mas-
ter plan for the development of the zoo was 75 percent
complete, and the reptile exhibit was scheduled for com-
pletion in the fall. The organization had expanded with a
full complement of professionals and managers. (See Ex-
hibit 13 for the organizational structure of the zoo.)
While the zoo made great progress in fifteen years, all
was not quiet on the political front. In a court battle, the
city won over the state on the issue of who wielded ulti-
mate authority over Audubon Park and Zoo. Indeed, the
zoo benefited from three friendly mayors in a row, starting
with Moon Landrieu, who championed the new zoo, to
Ernest “Dutch” Morial, to Sidney Barthelemy who threw
his support to both the zoo and the aquarium proposal
championed by Ron Forman.
The Future
New Directions for the Zoo
Zoo Director Ron Forman demonstrated that zoos have
almost unlimited potential. A 1980 New Orleans magazine
article cited some of Forman’s ideas, ranging from a safari
train to a breeding center for rare animals. The latter has
an added attraction as a potential money-maker since an
Asiatic lion cub, for example, sells for around $10,000.
This wealth of ideas was important because expanded fa-
cilities and programs are required to maintain attendance
at any public attraction. The most ambitious of Forman’s
ideas was for an aquarium and riverfront park to be lo-
cated at the foot of Canal Street.
Although the zoo enjoyed political support in 1992,
New Orleans was still suffering from a high unemployment
rate and a generally depressed economy resulting from the
slump in the oil industry. Some economists predicted the be-
ginning of a gradual turnaround in 1988, but any significant
improvement in the economy was still forecasted to be years
away in 1993. (A few facts about New Orleans are given in
Exhibit 14.) In addition, the zoo operated in a city where
many attractions competed for the leisure dollar of citizens
and visitors. The Audubon Zoological Garden had to vie
with the French Quarter, Dixieland jazz, the Superdome, and
even the greatest of all attractions in the city—Mardi Gras.
The New Orleans Aquarium
In 1986, Forman and a group of supporters proposed the
development of an aquarium and riverfront park to the
New Orleans City Council. In November 1986, the elec-
torate voted to fund an aquarium and a riverfront park by
a 70 percent margin—one of the largest margins the city
has ever given to any tax proposal. Forman14 hailed this
vote of confidence from the citizens as a mandate to build
a world-class aquarium that would produce new jobs,
stimulate the local economy, and create an educational re-
source for the children of the city.
The Aquarium of the Americas opened in September
1990. The $40 million aquarium project was located provid-
ing a logical pedestrian link for visitors between [major] at-
tractions of the Riverwalk and the Jax Brewery, a shopping
center in the French Quarter. Management of the aquarium
was placed under the Audubon Institute, the same organiza-
tion that ran the Audubon Zoo. A feasibility study prepared
by Harrison Price Company15 projected a probable 863,000
visitors by the year 1990, with 75 percent of the visitors com-
ing from outside the metropolitan area. That attendance fig-
ure was reached in only four months and six days from the
grand opening. Attendance remained strong through 1992,
after a slight drop from the initial grand opening figures.
Meanwhile, the zoo had its own future to plan. The
new physical facilities and professional care paid off hand-
somely in increased attendance and new animal births. But
the zoo could not expand at its existing location because of
lack of land within the city. Forman and the zoo considered
several alternatives. One was little “neighborhood” zoos to
be located all over the city. A second was a special survival
center, a separate breeding area to be located outside the
city boundaries where land was available.
Forman presented plans for a project called Riverfront
2000, which included expansion of the aquarium, the
Woldenberg Riverfront Park, a species survival center, an
arboretum, an insectarium, a natural history museum, and
a further expansion of the zoo. With the zoo running
smoothly, the staff seemed to need new challenges to
tackle, and the zoo needed new facilities or programs to
continue to increase attendance.
6.0
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Licensed to:

Audubon Park Commission
Executive Director
Friends of the Zoo, Inc. Administrative Assistant
Associate Director
General Curator Deputy Director
Children’s Zoo
Hospital/Commissary
Mammals
Records
Reptiles
Research
Rides
Swamp
Birds
Bird Rehab.
Development
Zoo-To-Do
Finance
Personnel
Maintenance
Construction
Visitor Services
Food
Gifts
Other
Operations
Administration
Education
Volunteers
Grounds
Security
Graphics
Marketing
Public Relations
Group Sales
Membership
Integrative Cases 563
6.0
EXHIBIT 13
Audubon Park Commission
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564 Integrative Cases
Notes
1. Millie Ball, “The New Zoo of ’82,” Dixie Magazine,
Sunday Times Picayune (June 24, 1979).
2. Merikaye Presley, “Neighbors Objecting to Audubon
Zoo Expansion Project in Midst of Work,” Times
Picayune (March 30, 1975), A3.
3. “Zoo Expansion Is Ruled Illegal,” Times Picayune
(January 20, 1976).
4. Ibid.
5. “Society Seeks Change at Zoo,” Times Picayune
(April 29, 1972), D25.
6. “Zoo Thrives Despite Tough Times in New Orleans,”
Jefferson Business (August 1985), A1.
7. Ibid.
8. Sharon Donovan, “New Orleans Affiliates Monkey
Around for Zoo,” Advertising Age (March 17, 1986).
9. Karen Sausmann, ed., Zoological Park and Aquar-
ium Fundamentals (Wheeling, W. Va.: American As-
sociation of Zoological Parks and Aquariums,
1982), 111.
10. Diane Luope, “Riverboat Rides to Zoo Are Planned,”
Times Picayne (November 30, 1981), A17.
11. Steve Brooks, “Don’t Say ‘No Can Do’ to Audubon
Zoo Chief,” Jefferson Business (May 5, 1986), 1.
12. Ross Yuchey, “No Longer Is Heard a Discouraging
Word at the Audubon Zoo,” New Orleans (August
1980), 53.
13. Ibid., 49.
14. “At the Zoo” (Winter 1987).
15. “Feasibility Analysis and Conceptual Planning for a
Major Aquarium Attraction,” prepared for the City of
New Orleans (March 1985).
6.0
Population 1,324,400
Households 489,900
Median Age 30.8 years
Median Household EBI $29,130
Average Temperature 70 degrees
Average Annual Rainfall 63 inches
Average Elevation 5 feet below sea level
Area 363.5 square miles
199.4 square miles of land
Major Economic Activities
Tourism (5 million visitors per year)
Oil and Gas Industry
The Port of New Orleans (170 million tons of cargo/year)
Taxes
State Sales Tax 4.0%
Parish (County) Sales Tax 5.0% (Orleans)
State Income Tax 2.1%–2.6% on first $20,000
3.0%–3.5% on next $30,000
6.0% on $51,000 and over
Parish property tax of 126.15 mills (Orleans) is based on 10% of appraised value over
$75,000 homestead exemption.
EXHIBIT 14
A Few Facts About the New Orleans MSA
Source: Sales and Marketing Management. South Central Bell Yellow Pages, 1991.
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Integrative Cases 565
References
Ball, Millie. “The New Zoo of ’82,” Dixie Magazine, Sun-
day Times Picayune (June 24, 1978).
Beaulieu, Lovell. “It’s All Happening at the Zoo,” Sunday
Times Picayune (January 28, 1978).
Brooks, Steve. “Don’t Say ‘No Can Do’ to Audubon Zoo
Chief,” Jefferson Business (May 5, 1986).
Bureau of Governmental Research, City of New Orleans,
“Audubon Park Zoo Study, Part I, Zoo Improvement
Plan” (New Orleans, La.: Bureau of Governmental Re-
search, August 1971).
Bureau of Governmental Research, City of New Orleans,
“Audubon Park Zoo Study, Part II, An Operational
Analysis,” (New Orleans, La.: Bureau of Governmental
Research, August 1971).
Donovan, S. “The Audubon Zoo: A Dream Come True,”
New Orleans (May 1986), 52–66.
“Feasibility Analysis and Conceptual Planning for a Major
Aquarium Attraction,” prepared for the City of New
Orleans (March 1985).
Forman, R., J. Logsdon, and J. Wilds. “Audubon Park: An
Urban Eden” (New Orleans, La.: The Friends
of the Zoo, 1985).
Poole, Susan. Frommer’s 1983–84 Guide to New
Orleans, (New York: Simon & Schuster, 1983).
Sausmann, Karen, ed., Zoological Park and
Aquarium Fundamentals (Wheeling, WVa.:
American Association of Zoological Parks
and Aquariums, 1982).
Yuchey, Ross “No Longer Is Heard a Discourag-
ing Word at the Audubon Zoo,” New Orleans (August
1980), 49–60.
Zuckerman, S., ed. Great Zoos of the World (Boulder, Co.:
Westview Press, 1980).
6.0
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566 Integrative Cases
In early January, 2001, Jeff Gutsch, senior man-
ager at Moss Adams LLP, an accounting firm lo-
cated in Santa Rosa, California, met with his
team to discuss the progress of a new initiative for
developing the firm’s accounting practice to serve clients in
the Northern California wine industry. At the meeting,
Gutsch and his wine niche team reviewed the strategic plan
for the coming year (Exhibit 1).
Integrative Case 7.0
Moss Adams, LLP
7.0
Moss Adams LLP
Santa Rosa Office
Wine Industry Advisors
2001 Strategic Plan
Mission Statement
Our goal is to become the dominant accounting and business consulting firm serving
the wine industry by providing superior, value-added services tailored to the needs of
Northern California vineyards and wineries, as well as becoming experts in the industry.
• We expect to achieve this goal by December 31, 2004.
Five-Year Vision
We are recognized as the premier wine industry accounting and business consulting
firm in Sonoma, Mendocino, and Napa counties. We are leaders in the Moss Adams
firm-wide wine industry group, helping to establish Moss Adams as the dominant firm
in the Washington and Oregon wine regions. We have trained and developed recog-
nized industry experts in tax, accounting, and business consulting. Our staff is enthusias-
tic and devoted to the niche.
The Market
• A firmwide objective is to increase the average size of our business client. We expect
to manage the wine niche with that objective in mind. However, during the first two
to three years, we intend to pursue vineyards and wineries smaller than the firm’s
more mature niches would. When this niche is more mature we will increase our
minimum prospect size. This strategy will help us gain experience, and build confi-
dence in Moss Adams in the industry, as it is an industry that tends to seek firms that
are well established in the Wine Industry.
• There are approximately 122 wineries in Sonoma County, 168 in Napa County and
25 in Mendocino County. Of these, approximately 55% have sales over $1 million,
and up to one-third have sales in excess of $10 million. In addition to these, there
are over 450 vineyards within the same three counties.
• The wine industry appears to be extremely provincial. That combined with the fact
that most of our stronger competitors (see “Competition” on the next page) are in
Napa County, we consider Sonoma County to be our primary geographic market.
However, Mendocino County has a growing wine industry, and we certainly will not
pass up opportunities in Napa and other nearby counties in 2001.
Our Strengths
The strengths Moss Adams has in competing in this industry are:
• We are large enough to provide the specific services demanded by this industry.
• Our firm’s emphasis is on serving middle-market businesses, while the “Big 5” firms
are continually increasing their minimum client size. The majority of the wine industry
EXHIBIT 1
Moss Adams’s Wine Niche Strategic Plan, 2001
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Integrative Cases 567
7.0
is made up of middle-market companies. This “Big 5” trend increases our market
each year.
• We do not try to be all things to all people. We focus our efforts in specialized indus-
tries/niches, with the goal of ultimately becoming dominant in those industries.
• We emphasize value-added services, which create more client satisfaction, loyalty,
and name recognition.
• We have offices located throughout the West Coast wine regions.
• We have individuals within the firm with significant wine industry experience, includ-
ing tax, accounting and consulting. We also have experts in closely related industries
such as orchards, beverage, and food manufacturing.
• Within California, we have some high profile wine industry clients.
• The majority of our niche members have roots in Sonoma County, which is important
to Sonoma County wineries and grape growers.
• Our group is committed to being successful in and ultimately dominating the industry
in Sonoma, Napa, and Mendocino counties.
Challenges
• Our experience and credibility in the wine industry are low compared to other firms.
• There has been a perception in the Sonoma County area that we are not local to the
area. As we continue to grow and become better known, this should be less of an issue.
If we can minimize our weaknesses by emphasizing our strengths, we will be successful
in marketing to the wine industry, allowing us to achieve our ultimate goal of being
dominant in the industry.
Competition
There are several CPA firms in Northern California that service vineyards and wineries.
The “Big 5” firms are generally considered our biggest competitors in many of the in-
dustries we serve, and some have several winery clients. But as noted earlier, their focus
seems to be on larger clients, which has decreased their ability to compete in this indus-
try. Of the firms with significant wine industry practices, the following firms appear to
be our most significant competitors:
• Motto Kryla & Fisher. This firm is a well-established wine industry leader, with the ma-
jority of their client base located in Napa County, although they have many Sonoma
County clients. They are moving away from the traditional accounting and tax compli-
ance services, concentrating their efforts on consulting and research projects. We can
take advantage of this, along with the perception of many in the industry that they
are becoming too much of an insider, and gain additional market share.
• Dal Pagetto & Company. This firm was a split off from Deloitte & Touche several years
ago. They are located in Santa Rosa, and have several vineyard and winery clients. At
this time, they are probably our biggest Sonoma County competitor. However, they
may be too small to compete once our momentum builds.
• Other firms that have significant wine industry practices that we will compete against
include G & J Seiberlich & Co., Brotemarkle Davis & Co., Zainer Reinhart & Clarke,
Pisenti & Brinker, Deloitte & Touche, and PriceWaterhouseCoopers. The first two are
wine industry specialists headquartered in Napa County, and although very competi-
tive there, they each do not appear to have a large Sonoma County client base. The
next two are general practice firms with several wine industry clients. However, each
of these firms has struggled to hold themselves together in recent years, and they do
not appear to have well coordinated wine industry practices. The last two firms listed
above are “Big 5” firms that, as noted earlier, focus mostly on the largest wineries.
EXHIBIT 1
Moss Adams’s Wine Niche Strategic Plan, 2001 (continued)
(continued)
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568 Integrative Cases
7.0
Annual Marketing Plan
Our marketing strategy will build on the foundation we laid during the prior two years.
We have established the following as our marketing plan:
• Increase and develop industry knowledge and expertise:
1. Work with other Moss Adams offices, particularly Stockton, to gain knowledge
and experience from their experienced staff. Additionally, work with Stockton to
have Santa Rosa Wine Niche staff assigned to two of their winery audits.
2. Continue to attend industry CPE, including the Vineyard Symposium, the Wine In-
dustry Symposium, the California State Society of CPAs–sponsored wine industry
conferences in Napa and San Luis Obispo, and selected Sonoma State University
and UC Davis courses. We would like eight hours of wine industry specific CPE for
each Senior Level and above committed member of the Wine Niche. Jeff will have
final approval on who will attend which classes.
3. Continue to build our relationship with Sonoma State University (SSU). Our Wine
Niche has agreed to be the subject of an SSU case study on the development of a CPA
firm wine industry practice. We feel this case study will help us gain additional insight
into what it will take to be competitive, as well as give us increased exposure both at
SSU and in the industry. We will also seek to become more involved in SSU’s wine in-
dustry educational program by providing classroom guest speakers twice a year.
4. Attract and hire staff with wine industry experience. We should strongly consider
candidates who have attained a degree through the SSU Wine Business Program. We
should also work to recruit staff within the office that have an interest in the industry.
• Continue to form alliances with industry experts both inside and outside the firm. We
are building relationships with Ray Blatt of the Moss Adams Los Angeles office who has
expertise in wine industry excise and property tax issues. Cheryl Mead of the Santa Rosa
office has developed as a Cost Segregation specialist with significant winery experience.
• Develop and use relationships with industry referral sources:
1. Bankers and attorneys that specialize in the wine industry. From these bankers and
attorneys, we would like to see three new leads per year.
2. Partner with other CPA firms in the industry. Smaller firms may need to enlist the
services of a larger firm with a broader range of services, while the “Big 5” firms
may want to use a smaller firm to assist with projects that are below their mini-
mum billing size for the project type. We will obtain at least two projects per year
using this approach.
3. Leverage the relationships we have to obtain five referrals and introductions to
other wine industry prospects per year.
4. We will maintain a matrix of Sonoma, Mendocino, and Napa County wineries and
vineyards, including addresses, controller or top financial officer, current CPA, and
banking relationship. This matrix will be updated as new information becomes
available. From this matrix, we will send at least one mailing per quarter.
• Increase our involvement in the following industry trade associations by attending regu-
lar meetings and getting to know association members. In one of the following associ-
ations, each committed niche member will seek to obtain an office or board position:
1. Sonoma County Wineries Association
2. Sonoma County Grape Growers Association
EXHIBIT 1
Moss Adams’s Wine Niche Strategic Plan, 2001 (continued)
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Integrative Cases 569
7.0
3. Sonoma State University Wine Business Program
4. Zinfandel Advocates and Producers
5. Women for Winesense
6. California Association of Winegrape Growers
7. Wine Institute
• Establish an environment within the niche that promotes and practices the PILLAR
concept. Encourage staff in the niche to be creative and strive to be the best. Provide
interesting projects and events for the niche to make participation more interesting.
• Use the existing services that Moss Adams offers to market the firm, which include:
1. BOSS
2. Business Valuations
3. Cost Segregation
4. SCORE!
5. SALT
6. Business Assurance Services
7. Income Tax Compliance Services
• Make use of Firm Resources
1. Use Moss Adams’s Info Edge (document management system) to share and refer
to industry related proposals and marketing materials.
a. All Wine Niche Proposals will be entered into and updated in InfoEdge as
completed.
b. All Wine Niche Marketing letters will be entered into InfoEdge as created.
• Continue to have monthly wine industry niche meetings. We will review the progress
on this plan at our March, April, and September niche meetings. Within our niche,
we should focus our marketing efforts on Sonoma County, concentrating on smaller
prospects that we can grow with, which will enable us to increase our prospect size
over time. We would like to be in position to attract the largest wineries in the indus-
try by 2004.
• Establish a Quarterly CFO/Controller roundtable group, with the Moss Adams Wine
Industry Group working as facilitator. We will have the Group established and have
our first meeting in the summer.
• Quarterly, at our niche meetings, monitor progress on the quantifiable goals in this
strategic plan.
Summary
In 2001, one of our goals is to add a minimum of three winery clients to our client base.
We feel this is a reasonable goal as long as we continue to implement our plan as written.
We believe we can make the wine industry niche a strong niche in the Santa Rosa
office. The firm defines niche dominance as having a minimum of $500,000 in billings,
a 20% market share, and having 40% of the services provided be in value-added ser-
vice codes. We expect to become the dominant industry force in Sonoma, Mendocino,
and Napa counties by 2004.
We are also willing to assist other offices within the firm to establish wine industry
niches, eventually leading to a mature niche within the firm. We believe with the proper
effort we can accomplish each of these goals.
EXHIBIT 1
Moss Adams’s Wine Niche Strategic Plan, 2001 (continued)
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570 Integrative Cases
The meeting took place just before the height of the
busy tax and audit season. Gutsch, 39, had been concen-
trating on the firm’s clients in its construction industry
niche. He had not made as much headway developing new
business with wine industry clients as he had
hoped and opened the meeting by saying:
I think the issue we are all struggling with is how
to break into a well-established mature niche. Do
we discount fees? If so, is that our desired posi-
tion in servicing the wine industry? Do we adver-
tise? Seems like a big commitment for something
that we can’t be sure will produce results. Do we
just get on every panel we can and shake as many hands as
we can? I’m still trying to find the right formula.
Chris Pritchard, an accounting manager who had
worked with Gutsch for 2 years to develop the wine niche,
said:
Sorry, Jeff, but I’ve been too busy working in health care.
Health care is taking off, so my time is limited on the wine
side. There’s something missing, sort of a spark in this
niche. There’s not as much of a hunger to close, to go out
and actually close a deal, or at least go out and meet with
somebody. I think that’s what’s lacking for our success
right now. I think we have all of the tools we need. But we
don’t have an aggressive nature to go out and start shaking
hands and asking for business. We’re doing everything else
except asking for the business. We don’t follow up.
Neysa Sloan, a senior accountant, nodded in assent:
I personally do not see us making our objectives of gather-
ing 20% of the market share in the regional wine industry
over the next 3–5 years. Our marketing tactics are not up to
the challenge. We need to seriously look at what we have
done in the last year or two, what we are currently doing,
and what we are proposing to do in regards to marketing. If
we looked at this objectively, we would see that we have not
gained much ground in the past using our current tactics—
why would it work now? If you allowed more individuals to
market and be involved, we might get somewhere.
Cheryl Mead, a senior manager whose specialty was
conducting cost segregation (cost segregation is a process
of breaking a large asset into its smaller components so
that depreciation may be taken on an accelerated basis)
studies, commented:
Growing wineries are looking for help. We need to focus
on wineries that are expanding their facilities, and then
grow with their growing businesses. Value-added services
like cost segregation could represent as much as 40% of
our wine industry practice. If we want to get in, we’ve got
to do much more networking, marketing, and presenta-
tions. The challenge for us here in Santa Rosa is how to
manage our resources. Career choices are changing; you
can’t be a generalist anymore. We need both people-related
and technical skills, but those don’t usually go hand-in-
hand. We need someone who is famous in the field, a
“who’s who” in the wine accounting industry.
Claire Calderon, also a senior tax manager, said to the
team:
This is a hard niche to break into, Jeff. It takes a long time
to develop relationships in specific industries. It could take
a couple of years. First you find forums to meet people, get
to know people, get people to trust you and then you get
an opportunity to work on a project and you do a good
job. It takes a while. Our goal is to become a trusted advi-
sor and that doesn’t happen overnight.
Gutsch replied:
While consolidation is happening in the wine industry,
many of the wineries we are targeting are still privately
owned. When you’re dealing with privately owned busi-
nesses it’s much more personal than with public companies.
Calderon added:
That might explain part of it, Jeff, but the reality is that
there are two other fledgling niches that are doing well and
going like gangbusters. This niche is off to a slow start!
Barbara Korte, a senior accountant, reassured him:
Jeff, you have been very focused, very enthusiastic about
this project. You’ve put a lot of time into it. As a leader, I
think you are a real good manager.
At stake was the opportunity to generate significant in-
cremental client fee revenues. More than 600 wine produc-
ers and vineyards (grape growers) were in business in the
premium Northern California wine-growing region en-
compassing Napa, Sonoma, and Mendocino counties. Ac-
cording to the Summer 2000 issue of Marketplace, there
were 168 wine producers and 228 vineyards in Napa; 122
wine producers and 196 vineyards in Sonoma; and 25 wine
producers and 61 vineyards in Mendocino. Few of these
operations were large, according to Marketplace. Napa
and Sonoma each had 14 wine producers reporting over
$10 million in sales, and Mendocino, only one.
Company Background
Moss Adams was a regional accounting firm. It had four re-
gional hubs within the firm: Southern California, Northern
California, Washington, and Oregon. By late 2000, Moss
Adams had become one of the 15 largest accounting firms in
the United States, with 150 partners, 740 CPAs, and 1,200
employees. Founded in 1913 and headquartered in Seattle,
the full-service firm specialized in middle-market companies,
those with annual revenues of $10–$200 million.
Each office had a managing partner. Art King was the
managing partner of the Santa Rosa office (Exhibit 2). The
7.0
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Managing
Partner
Partners
(4)
Assistant
of Partners
Senior Managers
(9)
Managers
(7)
Senior Accountants
(7)
Staff Accountants
(8)
Consultant
Network
Administrator
Office
Manager
Internal Accountant
HR Consultant
Moss Adams, LLP
Santa Rosa, CA
Organizational Chart
Integrative Cases 571
firm was considered mid-size and its client base tended to
mirror that size. King reflected on Moss Adams’s advan-
tages of size and location:
. . . it is an advantage to be a regional firm with a strong lo-
cal presence. For one thing, there just aren’t that many re-
gional firms, especially out here on the West Coast. In fact,
I think we’re the only true West Coast regional firm. That
gives us access to a tremendous number of resources that
the larger firms have. We have the added advantage of be-
ing a big part of Sonoma County. Sonoma County compa-
nies want the same kind of services they can get from the
Big Five operating out of places like San Francisco, but
they also like to deal with local firms that are active in the
community. Our staff is active in Rotary, 20–30, the local
chambers of commerce, and so on, and that means a lot to
the businesspeople in the area. Sonoma County companies
will go to San Francisco for professional services, but only
if they have to, so we offer the best of both worlds.
Each office within the firm was differentiated. An of-
fice like Santa Rosa had the ability to be strong in more
niches because it was one of the dominant firms in the
area. Moss Adams did not have to directly compete with
the Big Five accounting firms because they were not in-
terested in providing services to small to mid-size busi-
nesses. Since it was a regional firm, Moss Adams was able
to offer a depth of services that most local firms were not
able to match. This gave Moss Adams a competitive ad-
vantage when selling services to the middle market com-
pany segment.
Moss Adams provided services in four main areas of
expertise: business assurance (auditing), tax, international,
and consulting. Auditing comprised approximately 35% to
40% of Moss Adams’s practice, the remainder being di-
vided among tax work in corporate, partnerships, trusts
and estates, and individual taxation. In its Santa Rosa of-
fice, Moss Adams serviced corporate business and high-
wealth individuals.
7.0
EXHIBIT 2
Moss Adams’s Organizational Chart
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572 Integrative Cases
On the international side, Moss Adams was a member
of Moores Rowland International, a worldwide associa-
tion of accounting firms. Moss Adams primarily worked
with local companies that did business overseas or that
wanted to set up a foreign location. It also did a
lot of work with local companies that had parent
firms located overseas.
On the consulting side, Moss Adams had
about 80 full-time consultants, and this line of
business represented probably 15% to 20% of
the total practice. A large part of the consulting
work performed by Moss Adams was in mergers
and acquisitions. Its M&A division helped
middle-market companies, which formed the bulk of its
clientele, develop a coherent, consistent strategy, whether
they were planning on selling the business and needed to
find an appropriate buyer or were looking for a good ac-
quisition target.
The Big Six (Big Five in 2000) accounting firms had de-
veloped niche strategies in the 1980s, and Moss Adams
had been one of the first mid-level accounting firms in the
nation to identify niches as a strategy. Adopting a niche
strategy had allowed Moss Adams to target a basket of ser-
vices to a particular industry of regional importance. As
each practice developed a niche, it also identified the “fa-
mous people” in that niche. These people became the “go-
to” people, the leaders of that niche.
The high-technology sector represented one of the
fastest-growing parts of Moss Adams’s business. According
to King:
It’s big in the Seattle area (where Moss Adams has its
headquarters), and with the development of Telecom Val-
ley, it’s certainly becoming big in Sonoma County. We’re
finding that a great deal of our work is coming from com-
panies that are offshoots of other large high-tech compa-
nies in the area. Financial institutions represent another
client group that’s growing rapidly, as is health care. With
all of the changes in the health care and medical fields,
there’s been a good deal of turmoil. We have a lot of ex-
pertise in the health care and medical areas, so that’s a big
market for us. Have I seen a drop-off? No, not really. The
interesting thing about the accounting industry is that even
when the economy slows down, there’s still a lot of work
for a CPA firm. There might not be as many large, special
projects as when the economy is really rolling, but the
work doesn’t slow down.
The Industry and the Market
Accounting was a large and relatively stable service industry,
according to The Journal of Accountancy, the industry’s
most widely read trade publication. The Big Five accounting
firms (Andersen Worldwide, PriceWaterhouseCoopers,
Ernst & Young, Deloitte & Touche, and KPMG) dominated
the global market in 1998 with combined global revenue ex-
ceeding $58 billion, well over half of the industry’s total rev-
enue. All of the Big Five firms reported double-digit growth
rates in 1998. However, some of the most spectacular
growth was achieved by firms outside the top 10, some of
which registered increases of nearly 60% over 1997 rev-
enues. Ninety of the top 100 firms had revenue increases,
and 58 of them achieved double-digit gains.
In 1999, accounting industry receipts in the United
States exceeded $65 billion. The industry employed more
than 632,000 people. However, the industry was expected
to post more modest growth in revenues and employment
in the 21st century. Finding niche markets, diversifying ser-
vices, and catering to global markets were key growth
strategies for companies in the industry. Large interna-
tional firms, including the Big Five, had branched out into
management consulting services in the late 1980s and early
1990s.
Accounting firms and certified public accountants
(CPAs) nationwide began offering a wide array of services
in addition to traditional accounting, auditing, and book-
keeping services. This trend was partially a response to
clients’ demand for “one-stop shopping” for all their pro-
fessional services needs. Another cause was the relatively
flat growth in demand for traditional accounting and au-
diting services over the past 10 years, as well as the desire
of CPAs to develop more value-added services. The addi-
tion of management consulting, legal, and other profes-
sional services to the practice mix of large national ac-
counting networks was transforming the industry.
Many firms began offering technology consulting be-
cause of growing client demand for Internet and e-commerce
services. Accounting Today’s 1999 survey of CPA clients in-
dicated that keeping up with technology was the strategic is-
sue of greatest concern, followed by recruiting and retaining
staff, competing with larger companies, planning for execu-
tive succession, and maximizing productivity.
However, according to The CPA Journal, the attractive
consulting fees may have led many firms to ignore poten-
tial conflicts of interest in serving as an auditor and as a
management consultant to the same client. The profes-
sion’s standards could be jeopardized by the entrance of
non-CPA partners and owners in influential accounting
firms. Many companies facing these problems split their
accounting and management consulting operations. In Jan-
uary 2001, Arthur Andersen spun off its consulting divi-
sion and renamed it “Accenture” to avoid accusations of
impropriety.
Still, CPA firms could be expected to continue to de-
velop their capabilities and/or strategic alliances to meet
clients’ demands. Some other areas of expansion among ac-
counting firms included administrative services, financial
and investment planning services, general management ser-
vices, government administration, human resources, inter-
national operations, information technology and computer
systems consulting, litigation support, manufacturing ad-
7.0
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Integrative Cases 573
ministration, marketing, and research and development.
Many small and medium-size independent firms were
merging or forming alliances with large service companies
such as American Express, H&R Block, and Century Busi-
ness Services.
By the late 1990s, a trend toward consolidation got un-
der way in the accounting industry. Several factors were fuel-
ing the drive toward consolidation. Large increases in rev-
enue among the top 100 accounting firms between 1997 and
1998 may have been partially attributable to this trend to-
ward consolidation. Consolidators wanted access to the large
volume of business currently being done by independent
CPAs. The trust that small businesses and individuals had in
their CPAs was considered very valuable, and consolidators
wanted to leverage the potential of an individual firm’s in-
tegrity to expand their own businesses. Consolidation caused
a decline in the number of independent accounting firms that
offered only tax and accounting services. The New York
State Society of CPAs estimated that there was a strong pos-
sibility that up to 50 of the largest accounting firms in the
United States would dissolve or merge with other entities by
the end of the year 2000. In the San Franciso Bay area, for
example, the Big Five dominated the industry (Exhibit 3).
The Wine Industry Niche
The wine industry practice was a new niche for the Santa
Rosa office, as well as for Moss Adams in general. Moss
Adams allowed any employee to propose a niche. All ac-
counting firms bill at fairly standard rates, so the more busi-
ness generated, the greater the profit. Moss Adams felt it was
in their long-term best interest to allow employees to focus
on areas in which they were interested. The firm would ben-
efit from revenues generated, but, more importantly, em-
ployees would likely stay with a firm that allowed a degree
of personal freedom and promoted professional growth.
Gutsch and Pritchard had begun this niche in mid-
1998 for several reasons. First, both had an interest in the
industry. Second, Sonoma and Napa counties had 200
wineries and numerous vineyard operations. Third, Moss
Adams had expertise in related or similar business lines
such as orchards, as well as significant related experience in
providing services to the manufacturing sector. Finally, the
wine industry had been historically serviced by either large
firms that considered the typical winery a small client, or
by smaller firms that were not able to offer the range of ser-
vices that Moss Adams could provide.
Sara Rogers, a senior accountant and member of the
wine niche team, recalled:
It first started with Jeff Gutsch and Chris Pritchard and an-
other senior manager, who was in our office until Novem-
ber 1999. Anyway, I think it was their motivation that re-
ally started the group. The three of them were doing
everything in building the niche. When the senior manager
left, it sort of fell flat on its face for a little while. I think it
got stagnant. Pretty much nobody said anything about it
until last summer, when Jeff started the organization of it
again and brought in more people, and then he approached
people that he wanted to work with.
Gutsch felt that Moss Adams was in position
to move forward to make the wine industry niche
a strong niche both in the Santa Rosa office and,
eventually, the firm as a whole. He was commit-
ted to that goal and expected to achieve it within
5 years. Gutsch saw this niche as his door to fu-
ture partnership. Moss Adams’s marketing strat-
egy included the following:
1. Develop industry marketing materials that communi-
cate Moss Adams’s strengths and commitment.
2. Develop a distinctive logo for use in the industry.
3. Create an industry brochure similar to that of the firm’s
construction industry group.
4. Develop industry service information flyers such as the
business lifecycle, R&E (Research & Exploration)
credit, excise tax compliance, and BOSS (Business
Ownership Succession Services).
5. Develop relationships with industry referral sources
(e.g., bankers and attorneys that specialized in the wine
industry or current clients who served or had contacts
in the industry).
6. Join and become active in industry trade associations.
7. Use existing relationships with industry contacts to ob-
tain leads into prospective wineries and vineyards.
8. Use the existing services that Moss Adams offered to
market the firm, particularly in Cost Segregation.
9. Focus efforts on Sonoma County, as well as adjacent
wine-growing regions, which would enable Moss
Adams to increase its prospect size over time.
Pritchard reflected on those early days:
The first thing we did was to develop a database of regional
wineries and send out an introduction letter. The other
thing we did was to develop marketing materials. Jeff de-
veloped a logo. We used a top-down approach pyramid for
an introduction letter, starting out general and then with an
action step at the end to call us. So, we used that at first.
Usually with that we’d get about 2% response, which is
good, out of 300 letters or whatever we sent out.
However, according to King, the major issue in grow-
ing the wine industry practice was selling:
The thing about selling in public accounting is that you
have to have a lot of confidence in what you do and what
you can do for the client. You have to have confidence that
you know something about the industry. If you go into a
marketing meeting, or a proposal meeting and you’re say-
ing, “Well, we do a couple of wineries but we really want
to do more and get better at it,” you’re not going to get the
work. You gain confidence by knowing how to talk the lan-
7.0
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EXHIBIT 3
Top 20 Accounting Firms in the San Francisco Bay Area, Ranked by Number of Bay Area CPAs, June 2000
Sources: Viva Chan, San Francisco Business Times, 14 146, June 16, 2000, p. 28; Strafford Publications, Public Accounting Reports, vol. XXIV, June 2000.
NR � Not reported.
*Indicates tie in ranking.
**Excludes consulting.
No.
No. Bay No. No. Bay 1999 Partners No. US
1999 Area Company Area Billings in Bay Company Rev
Rank Rank Company CPAs CPAs Employees Bay Area Area Partners FYE ($
1 2 Deloitte & Touche LLP 439 8,380 1,437 NR 172 2,066 May 99 $5,3
2 1 PricewaterhouseCoopers LLP 430 430 2,000 NR 138 9,000 Sep. 99 6,9
3 3 KPMG Peat Marwick LLP 316 NR 1,778 NR 157 6,800 Jun. 99 4,1
4 4 Arthur Andersen** 312 6,161 821 NR 63 3,059 Aug. 99 3,3
5 5 Ernst & Young LLP 300 NR 850 NR 77 2,465 Sep. 99 6,1
6 6 BDO Seldman LLP 72 1,650 122 NR 15 360 Jun. 00 4
7 14 Seiler & Co. LLP 44 44 110 NR 12 12 NR N
8 7 Frank, Runerman & Co. LLP 43 51 76 NR 12 13 May 99
9 9 Hood & Strong LLP 42 42 89 NR 12 12 NR N
10* 10 Harb, Levy & Weiland LLP 38 38 80 NR 13 13 NR N
10* 13 Ireland San Filippo LLP 38 38 81 12.7M 13 17 Apr. 00
12 15 Burr, Pilger & Mayer 35 35 110 NR 10 10 NR N
13 11 Armanino McKenna LLP 34 34 87 NR 13 13 NR N
14 14 Novogradac & Co. LLP 31 36 80 NR 6 8 NR N
15 12 RINA Accountancy Corp. 26 29 59 7.3M 13 14 NR N
16* 16 Grant Thornton LLP 25 1,300 90 NR 10 300 Jul. 00 4
16* 18 Shea Labagh Dobberstein 25 25 35 NR 3 3 NR N
18 18 Moss Adams LLP 24 800 39 NR 7 144 Dec. 99 1
19 16 Lindquist, von Husen & Joyce 23 23 47 NR 5 5 NR N
20 21 Lautze & Lautze 21 28 39 NR 9 11 NR N
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Integrative Cases 575
guage, knowing the buzzwords, knowing some of the play-
ers in the industry. You go into a meeting, all of a sudden
you’re on an equal footing with them. From a confidence
standpoint, that’s huge. You can’t sell public accounting
services unless you’re confident about you and your firm
and the people that are going to do the work. Over the last
2 years, Jeff has gone to the classes, gone to the meetings
and his confidence level is much higher than it was a year
ago. When he goes into these meetings he’s going to be at
a level where he doesn’t have to make excuses for not hav-
ing a lot of winery clients, because we have a lot of activ-
ity in the wine and the beverage processing industries. So,
I think that’s going to help a lot. That’s where he’s going to
have more success because we’re getting the at bats, we just
need to get some hits.
One of the roles of the managing partner was to men-
tor potential partners and help them attain the role of part-
ner. The training process included marketing and helping
them build a practice, according to King:
When we’re talking with senior managers, I explain to
them what they need to do to get to that next level. I had
this conversation with Jeff because his primary focus when
he came was, “I need to build a big practice, nothing else
matters.” He trusts the system now. He’s transferred some
clients to others and received some clients. You have to
work well with people, you have to train people, you have
to have some responsibilities, and you have to get along
with your peers.
The firm’s philosophy was to encourage people to re-
ally enjoy what they did. Anyone was allowed to propose
a niche, even a senior manager. Pritchard explained:
Well, part of the way our firm works is, there is a “four-
bucket” tier to make partner. One of the buckets is to be-
come a famous person and the fastest way of doing that is
through the niche base; within a niche you get the experi-
ence and the reputation faster than you would as a gener-
alist. Jeff is a senior manager, so now he’s trying to figure
out a way to become partner. I work on Bonny Doon Win-
ery. I have a grower client in Kenwood, so I do have some
experience with that. I also like wine because I make wine.
It’s an untapped market in Sonoma County for our firm. So
we both got together—I had the entrepreneurial spirit to
start and Jeff had the need.
King described in detail the “four bucket” evaluation
system at Moss Adams:
We have four criteria that get evaluated by the partners and
the compensation committee on a scale of one to ten. All
of these are weighted equally, 25%, with a possibility of 40
points. The first is financial. We take a look at the poten-
tial partner’s financial responsibilities, what their billings
are, what their fee adjustments are, what their charge
hours are. I’ve transferred many clients to people in the of-
fice. That’s one way I help others grow their practices. I’m
still responsible for some of those clients, because I’m the
one who brought them in and I’m still the primary contact.
My billing numbers may be this, but my overall financial
responsibility may be bigger. That’s an objective
measure because we look at the numbers, we look
at the trends.
The second is responsibility. Managing part-
ner of a big office gets more points than the man-
aging partner of a smaller office does, who in turn
gets more points than a person in charge of a
niche, who in turn gets more points than a line
partner. Somebody who is a partner and is re-
sponsible for the tax department, let’s say, might get an ex-
tra point or half a point, whereas someone in charge of a
niche might get an extra point. If they’re in charge of an of-
fice they get more points.
The third is personnel. Personnel is a very big initiative
within Moss Adams. Upstream and downstream evalua-
tions are conducted by our HR person for each office and
measures staff retention and the quality of our mentoring
program. Each partner is also evaluated up or down from
an overall office rating score. For example, our office may
get a “seven,” but I may get an “eight” because I’m really
good with people. Somebody who’s really hard on people
would get a lower rating.
The fourth and final “bucket” is peer evaluation. We
have three other partners evaluate each partner. They eval-
uate the partner for training, mentoring, marketing, and in-
volvement in their community. Then, evaluations are used
by the compensation committee to review individual part-
ner compensation. They are also used for partner counsel-
ing sessions.
King also assured a “soft landing” to the participants
of the niche teams. This meant that if a niche didn’t work
out, he would assure the individuals that another niche in
the firm would be found for them. This, it was hoped, fos-
tered entrepreneurial behavior. According to King:
A high level of practice responsibility for a partner would
be $1 million in this office. The range is anywhere from
$600,000 to $1 million in billings a year. The overall pic-
ture is where we try to get people involved in at least two
niches in the office, until a niche becomes large enough that
you can spend full-time in it. The upside, potentially, of the
wine niche would be a practice of from $500,000 to
$1,000,000 based on Sonoma and maybe some Napa
County wineries. So, the upside is a very mature, profitable
niche that fits right into our model of our other niches of
middle market companies that have the need, not only for
client services, but also our value-added services.
If for some reason the wine niche didn’t take off, Jeff
would become more involved in the manufacturing niche—
well, wine is manufacturing anyway, but it’s just a subset of
manufacturing. It might slow his rate to partner. It could
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576 Integrative Cases
also turn out that—all of a sudden—Jeff gets four great re-
ferrals in the manufacturing niche this year, he builds this
great big practice in manufacturing, and as a result he has
less time for the wine niche. The downside is we’ve spent
some money on marketing, and Jeff has spent
some time on marketing when he could have been
doing something else. Then, we abandon the pro-
ject. If that happens, then Jeff’s time becomes
available and the money becomes available to go
after some other initiative or something we’re al-
ready doing or some new initiative. Nobody is
going to lose his or her job over it. We haven’t
lost a lot of money over it.
The Aftermath
After the January 2001 meeting. Gutsch pondered how he
should proceed to overcome some major roadblocks to
building his team. King took Gutsch aside for counseling:
. . . target the $10 million to under $20 million winery for
which we can provide a full range of services. There’s no-
body else with our range of services that’s really doing a
good job in that area. There’s an under-served market for
those middle-market companies. When you started, I knew
it would take 2 to 3 years to really get the ball rolling. This
is really going to be your year, Jeff. If it isn’t, well, we’ll re-
evaluate at the end of the year. Our overall marketing bud-
get is probably in the area of 1.5% to 2% of total client
billings. In 1999, the first year for the wineries, we proba-
bly spent somewhere in the neighborhood of $5,000 to
$8,000, which wasn’t a lot but you joined some organiza-
tions and you did some training. Last year we probably
spent $10,000 to $12,000. Now, Jeff, I know that some of
our other offices spend a lot more on marketing than we
do. We’ll have to decide: is this the best use of your time?
Is this the best use of our resources to try to go after an in-
dustry where we just tried for three years and haven’t made
any inroads?
The decision to develop a niche had been based upon
a gut feeling. Moss Adams did not use any litmus test or
hurdle rate of return to screen possible niches. This was be-
cause, with the exception of nonprofits, most clients had
similar fee realization rates. Moss Adams looked at the po-
tential volume of business and determined whether it could
handle that volume. Yet Moss Adams remained unknown
in the wine industry. Time was running out.
This case study was prepared by Professors Armand Gilinsky, Jr.
and Sherri Anderson at Sonoma State University as a basis for
class discussion rather than to illustrate either effective or ineffec-
tive handling of an administrative situation. This case was origi-
nally presented at the 2001 meeting of the North American Case
Research Association in Memphis, Tenn. The authors gratefully
acknowledge the support of Moss Adams PLC and the Wine Busi-
ness Program at Sonoma State University for assistance in prepa-
ration of this case.
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Integrative Cases 577
Rule #1 for business organizations: People, not structure,
make a business work or fail. Blindly following organiza-
tional concepts that have worked elsewhere is a sure way
to waste talent and get poor results. Organizational change
alone achieves nothing, while dedicated people can make
any structure work. This doesn’t mean that organizational
changes shouldn’t happen. But design any changes to get
the most out of people in the company’s unique circum-
stances. Top management should never dictate change as a
cure-all to avoid facing fundamental problems.
Quotation from the Harvard Business Review
(title and author uncited) posted on the wall of
Bill Larson, Plant Manager of Littleton Manufacturing
On June 21, 1990, Paul Winslow, the director of human re-
sources at Littleton Manufacturing, was told by his boss,
Bill Larson, to put together a team of employees to address
a number of issues that Larson thought were hurting Lit-
tleton’s bottom line. Winslow’s assignment had come about
as a result of his making a presentation on those problems
to Larson. Larson had then met with his executive staff,
and he and Winslow had subsequently gone to the plant’s
Quality Steering Committee to discuss what to do. They
decided to form a Human Resources Process Improvement
Team (PIT) to prioritize the issues and propose a corrective
course of action. Winslow, who had been at the plant for
seventeen years, had been asked by Larson to chair the PIT.
The Quality Steering Committee decided that the PIT
should include two representatives each from Sales and
Marketing, Fabrication, and Components. Two managers
from each of these areas were chosen, including Dan Gor-
don, the fabrication manufacturing manager, and Phil
Hanson, the components manufacturing manager. There
were no supervisors or hourly employees on the team.
At the first meeting, the PIT discussed the six widely
recognized problem areas that Winslow had identified to
Larson. Each member’s assignment for the next meeting,
on June 28, was to prioritize the issues and propose an ac-
tion plan.
The Problems
A course in management and organizational studies carried
out by students at a nearby college had started the chain of
events that led to the formation of the Human Resources
PIT. In late 1989, Winslow was approached by a faculty
member at a local college who was interested in using Lit-
tleton as a site for a field-project course. Because of ongo-
ing concerns about communication at the plant by all lev-
els, Winslow asked that the students assess orga-
nizational communication at Littleton. Larson
gave his approval, and in the spring of 1990 the
students carried out the project, conducting indi-
vidual and group interviews with employees at all
levels of the plant.
Winslow and his staff combined the results of
the students’ assessment with the results of an in-house sur-
vey done several years earlier. The result was the identifi-
cation of six problem areas that they thought were critical
for the plant to address:
• Lack of organizational unity
• Lack of consistency in enforcing rules and procedures
• Supervisor’s role poorly perceived
• Insufficient focus on Littleton’s priorities
• Change is poorly managed
• Lack of a systematic approach to training
The Company
Littleton Manufacturing, located in rural Minnesota, was
founded in 1925. In 1942, Littleton was bought by Brooks
Industries, a major manufacturer of domestic appliances
and their components. At that time, Littleton manufac-
tured custom-made and precision-machined components
from special metals for a variety of industries.
In 1983, through the purchase of a larger competitor,
Frühling, Inc., Brooks was able to increase its domestic
market share from 8 percent to about 25 percent. Brooks
then decided to have only one facility produce the compo-
nents that were used in most of the products it made in the
United States. The site chosen was Littleton Manufactur-
ing. To do this, Brooks added a whole new business (Com-
ponents) to Littleton’s traditional activity. To accommo-
date the new line, a building of 80,000 square feet was
added to the old Littleton plant, bringing the total to
220,000 square feet of plant space. Because of the addition
of this new business, Littleton went from 150 employees in
1984 to 600 in 1986. In mid-1990, there were about 500
employees.
Integrative Case 8.1
Littleton Manufacturing (A)*
8.1
*By David E. Whiteside, organizational development consultant. This case
was written at Lewiston-Auburn College of the University of Southern
Maine with the cooperation of management, solely for the purpose of
stimulating student discussion. Data are based on field research; all events
are real, although the names of organizations, locations, and individuals
have been disguised. Faculty members in nonprofit institutions are
encouraged to reproduce this case for distribution to their students without
charge or written permission. All other rights reserved jointly to the author
and the North American Case Research Association (NACRA). Copyright
© 1994 by the Case Research Journal and David E. Whiteside.
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578 Integrative Cases
The older part of the plant (the Fabrication side) man-
ufactured its traditional custom-made products and sold
them to a variety of industrial customers. It also supplied
the newer side of the plant (the Components side) with a
variety of parts that were further processed and
used to make electrical components. These com-
ponents were used by all other Brooks plants in
the assembly of domestic appliances that were
sold worldwide. About 95 percent of the products
made on the Components side of the plant origi-
nated on the Fabrication side.
The plant was also headquarters for Brooks
Industries’ sales and marketing department,
known as the “commercial group,” which had worldwide
sales responsibilities for products made by the Fabrication
side. These included international and domestic sales of
products to several industries, including the semiconductor,
consumer electronics, and nuclear furnace industry. This
group marketed products made not only by Littleton Man-
ufacturing but also those made by Brooks’s other fourteen
plants, all located in the United States.
Bill Larson, the plant manager, reported to the execu-
tive vice president of manufacturing of Brooks, whose cor-
porate office was in Chicago, Illinois. Larson met once a
month with his boss and the other plant managers. Re-
porting directly to Larson were six functional line man-
agers and the manager of the Quality Improvement System
(QIS). This group of seven managers, known as the “staff,”
met weekly to plan and discuss how things were going. (See
Exhibit 1 for an organizational chart.)
In December 1989, there were 343 hourly and 125
salaried employees at the plant. About 80 percent of the
workforce was under 45. Seventy-seven percent were male,
and 23 percent were female. Seventy-six percent had been
at the plant 10 years or less. All of the hourly workers were
represented by the Teamsters union.
The Financial Picture
Brooks Industries
Brooks was the second largest producer of its kind of do-
mestic appliances in the United States. Its three core busi-
ness units were commercial/industrial, consumer, and origi-
nal equipment manufacturing. The major U.S. competitors
for its domestic appliances were Eagleton, Inc., and Univer-
sal Appliances, Inc. In the United States, Eagleton’s market
share was 47 percent; Brooks had about 23 percent; and
Universal Appliances and a number of small companies had
the remaining 30 percent. However, U.S. manufacturers
were facing increasing competition, primarily based on
lower prices, from companies in Asia and eastern Europe.
In 1989, Brooks’s sales declined 4 percent, and in
1990, they declined another 5 percent, to $647 million.
Their 1989 annual report contained the following state-
ment about the company’s financial condition: “There was
fierce competition…which led to a decline in our share of
a stable market and a fall in prices, resulting in a lower
level of sales…. With sales volume showing slower growth,
we failed to reduce our costs proportionately and there
was underutilization of capacity.” In May 1990, after an-
nouncing unexpected first-quarter losses, Brooks started a
corporation-wide efficiency drive, including planned lay-
offs of 16 percent of its workforce, a corporate restructur-
ing, and renewed emphasis on managerial accountability
for bottom-line results.
Because of its worsening financial condition, for the
past few years Brooks had been reducing the resources
8.1
Plant Manager
(Bill Larson)
QIS Manager
Fabrication,
Materials and
Engineering
Manager
(Greg White)
Quality
Assurance
Manager
(Joe Koenig)
Fabrication,
Materials
Manager
(Dan Gordon)
Controller
(Ron Fontaine)
Components,
Factory
Manager
(Phil Hanson)
Director,
Human
Resources
(Paul Winslow)
Staff Administrative
Assistant
EXHIBIT 1
Littleton Manufacturing Organizational Chart
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Integrative Cases 579
available to Littleton. For example, Larson’s budget for
salaries had been increased by only 4 percent each year for
the past several years. As a result, supervisors and middle
managers complained strongly that recent salary increases
had been too little and that plant salaries were too low.
They also felt that the forced-ranking performance ap-
praisal system used by the plant, which was based on a bell
curve, did not reward good performance adequately. One
middle manager commented: “All we get now for good
performance is a card and a turkey.” In April 1990, the
company cut Littleton’s capital budget by half and stipu-
lated that any new project involving nonessential items had
to have a one-year payback.
In addition, in both 1988 and 1989 Brooks had
charged the Littleton plant around $300,000 for various
services provided, such as technical support, but in 1990
this charge was increased by $1 million. Many of the Lit-
tleton plant managers felt that this was done to help offset
Brooks’s deteriorating financial condition and were frus-
trated by it. Indicating that he thought Brooks was using
Littleton as a cash cow, one staff member said, “The more
profitable we get, the more corporate will charge us.”
Many managers, especially those on the Fabrication
side, felt that even though they had made money for the
plant, corporate’s increase in charges nullified their success
and hard work. A number of managers on the Fabrication
side also feared that if their operation did not do well fi-
nancially, the company might close it down.
In discussing the increasing lack of resources available
from corporate and the plant’s own decline in profits, Lar-
son said: “There needs to be a change in the way people
here think about resources. They have to think more in
terms of efficiency.” He was proud of the fact that the com-
pany had achieved its goal of reducing standard costs by 1
percent for each of the past three years and that in 1990
cost reductions would equal 5 percent of production value.
He thought that if the company reduced the number of re-
works, costs could be lowered by another 20 to 30 percent.
Littleton Manufacturing
The Fabrication and the Components operations at Little-
ton Manufacturing were managed as cost centers by
Brooks while the commercial group was a profit center. (A
profit center is a part of an organization that is responsible
for accumulating revenues as well as costs. A cost center is
an organizational division or unit of activity in which ac-
counts are maintained containing direct costs for which the
center’s head is responsible.) In 1989 and 1990, the Fabri-
cation side of Littleton had done well in terms of budgeted
costs, while the Components side had incurred significant
losses for both years.
Littleton’s net worth increased from $319,000 in
1989 to $3,094,000 in 1990 due to the addition of a new
Fabrication-side product that was sold on the external
market and had required no additional assets or resources.
In 1990, sales for the plant as a whole were $41,196,000,
with an operating profit of 3.7 percent, down from 7.3 per-
cent in 1989. Larson estimated that the current recession,
which was hurting the company, would lower sales in 1991
by 10 percent. Exhibit 2 presents an operating
statement for Littleton Manufacturing from 1988
to 1990.
The Quality Improvement System
In 1985, corporate mandated a total quality man-
agement effort, the Quality Improvement System
(QIS), which replaced the quality circles that the
plant had instituted in 1980. Posted throughout
the plant was a Quality Declaration, which had been de-
veloped by Larson and his staff. It read:
We at Littleton Manufacturing are dedicated to achieving
lasting quality. This means that each of us must under-
stand and meet the requirements of our customers and co-
workers. We all must continually strive for improvement
and error-free work in all we do—in every job . . . on time
. . . all the time.
Bill Larson was enthusiastic about QIS. He saw QIS as
a total quality approach affecting not just products but all
of the plant’s processes, one that would require a long-term
effort at changing the culture at the plant. He felt that QIS
was already reaping benefits in terms of significant im-
provements in quality, and that the system had also greatly
helped communication at the plant.
In the QIS all employees were required to participate in
Departmental Quality Teams (DQTs) that met in groups of
six to twelve every two weeks for at least an hour to iden-
tify ways to improve quality. Most hourly employees were
on only one DQT; middle managers were, on average, on
three DQTs. Some managers were on as many as six. The
results of each team’s efforts were exhibited in graphs and
charts by their work area and updated monthly. There
were about sixty teams in the plant.
The leader from each Departmental Quality Team, a
volunteer, served also as a member of a Quality Improve-
ment Team (QIT), whose goals were to support the DQTs
and help them link their goals to the company’s goals.
QITs consisted of six to eight people; each was chaired by
a member of the executive staff. These staff members,
along with Bill Larson, composed the Quality Steering
Committee (QSC) for the plant. The QSC’s job was to
oversee the direction and implementation of the Quality
Improvement System for the plant and to coordinate with
corporate’s quality improvement programs. The QSC also
sometimes formed corrective action teams to work on spe-
cial projects. Unlike DQTs, which were composed of em-
ployees from a single department or work area, corrective
action teams had members from different functions or de-
partments. By 1986, there were nine corrective action
teams, but by 1989, none were functioning. When asked
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580 Integrative Cases
about them, Winslow said, “I’m not sure what happened to
them. They just sort of died out.”
Larson and most managers believed that the QIS had
improved quality. On most of its Fabrication products, the
company competed on the basis of quality and customer
service, and the vice president of sales and marketing
thought that their quality was the best in the industry. In
1988 and 1989, the plant won several Brooks awards for
quality and was publicly cited by a number of customers
for quality products.
Hourly employees in general also thought that QIS had
improved quality, although they were less enthusiastic
about the system than management. A number of hourly
employees complained that since participation was manda-
tory, many groups were held back by unmotivated mem-
bers. They thought participation should be voluntary. An-
other complaint was that there was inadequate training for
group leaders, with the result that some groups were not
productive.
In the spring of 1990, the company decided that the
QIS effort was “stagnating” and that DQTs should be
changed to include members from different departments.
It was thought that this would improve communication
and coordination between departments and lead to fur-
ther improvements in quality, productivity, and on-time
delivery. DQTs became known is IDQTs (Interdepartmen-
tal Quality Teams). IDQTs were scheduled to begin in
November 1990. In addition, the company decided to be-
gin Process Improvement Teams (PITs), which would fo-
cus on various ongoing processes at the plant, such as
budgeting and inventory management. A PIT, composed
of managers from different functions, would not be on-
going but only last as long as it took to achieve its partic-
ular goals.
8.1
EXHIBIT 2
Littleton Manufacturing Operating Profit Statement
Note: Changes in Operating Profit from year to year are posted to retained earnings (net worth) account on the
corporate balance sheet. It must be noted, however, that the balance sheet figures include the impact of headquarters,
national organization changes, and extraordinary income from other operations, which are not reflected on the
operating profit statement shown above.
Source: Controller, Littleton Manufacturing.
1988 1989 1990
Fabrication
Sales $16,929 $18,321 $19,640
Direct costs 11,551 11,642 11,701
Contribution margin 5,378 6,679 7,939
% of sales 31.8% 36.5% 40.4%
All other operating costs 4,501 4,377 4,443
Operating profit 877 2,301 3,496
% to sales 5.2% 12.6% 17.8%
Components
Sales $20,468 $15,590 $21,556
Direct costs 16,049 10,612 18,916
Contribution margin 4,419 4,978 2,640
% of sales 21.6% 31.9% 12.2%
All other operating costs 4,824 4,797 4,628
Operating profit (405) 180 (1,988)
% to sales �2.0% 1.2% –9.2%
Total Littleton Manufacturing
Sales $37,397 $33,911 $41,196
Direct costs 27,599 22,254 30,617
Contribution margin 9,798 11,657 10,579
% to sales 26.2% 34.4% 25.7%
All other operating costs 9,326 9,175 9,071
Operating profit 472 2,482 1,508
% to sales 1.3% 7.3% 3.7%
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Integrative Cases 581
How Different Levels Perceived the
Problems
In order to choose the issues to tackle first and to devise a
tentative plan for addressing them, Winslow reflected on
the background information he had on the six problem ar-
eas that he and his staff had identified on the basis of their
own analysis and the students’ assessment of organiza-
tional communication.
A Lack of Organizational Unity
People often talked about “this side of the wall and that
side of the wall” in describing the plant. They were refer-
ring to the wall separating the newer Components side and
the older Fabrication side of the plant. (Some parts of the
Fabrication side had been built in the twenties.) The Com-
ponents side was brighter, cleaner, and more open, and, in
summer, it was cooler. In comparing the two sides, one
manager said, “At the end of the shift in Fabrication, you
come out looking like you’ve been through the wringer.”
On the whole, the equipment in the Components side was
also newer, with most of it dating from the 1970s and
1980s and some of it state-of-the-art machinery that was
developed at the plant. Much of the equipment on the Fab-
rication side went back to the 1950s and 1960s. These dif-
ferences in age meant that, in general, the machinery on the
Fabrication side required more maintenance.
It was generally agreed that Components jobs were
cleaner and easier, and allowed more social interaction. On
the Fabrication side many of the machines could run only
two to three hours before needing attention, whereas on
the Components side the machines might run for days
without worker intervention. On the Fabrication side, be-
cause of the placement of the machines and the need for
frequent maintenance, people tended to work more by
themselves and to “be on the go all the time.” It was not
uncommon for senior hourly employees in Fabrication to
request a transfer to Components.
Hourly workers described Components as “a country
club” compared to the Fabrication side. Many attributed
this to how the different sides were managed. Enforcement
of rules was more lax on the Components side. For exam-
ple, rules requiring safety shoes and goggles were not as
strictly enforced, and some operators were allowed to eat
on the job.
One Human Resources staff member described Com-
ponents supervisors as “laid-back about sticking to the
rules” and those in Fabrication as “sergeants.” He saw the
manufacturing manager of Fabrication, Dan Gordon, as
having a clear vision of what he wanted for the Fabrication
side and a definite plan on how to get there. He also saw
Gordon as keeping a tight rein on his supervisors and hold-
ing them accountable. The same Human Resources em-
ployee described the factory manager of Components, Phil
Hanson, as dealing with things as they came up—as more
reactive. Hanson allowed his supervisors more freedom
and did not get involved on the floor unless there was a
problem. When there was a problem, however, he reacted
strongly and swiftly. For example, to combat a recent ten-
dency for employees to take extended breaks, he had begun
posting supervisors outside of the bathrooms
right before and after scheduled breaks.
Bill Larson attributed the differences in the
two sides “to the different performance and ac-
countability needs dictated by their business ac-
tivities and by the corporate office.” Components
met the internal production needs of Brooks by
supplying all of the other Brooks plants with a
product that they, in turn, used to manufacture a
household product that sold in the millions each year. Fab-
rication, however, had to satisfy the needs of a variety of
industrial customers while competing on the open market.
Larson felt that Fabrication had to have a more entrepre-
neurial ethic than Components because “Fabrication lives
or dies by how they treat their customers—they have to
woo them and interact well with them,” whereas Compo-
nents had a ready-made market.
Larson also thought that some of the differences were
due to the fact that the plant was “held prisoner by what
goes on in corporate.” Although the corporate office set fi-
nancial targets for both sides of the plant, it exercised more
control over the financial and productivity goals of the
Components side because no other Brooks plant was in the
Fabrication business and Brooks understood the Compo-
nents business much better. In addition, corporate was de-
pendent on the Components side for the standardized
parts—primarily wire coils—used in many of its finished
products. The Components side produced as many as 2
million of some of these small parts a day.
Larson also indicated that the requirements for the
number of workers on the two sides of the plant were dif-
ferent. For example, depending on what business was like
for each side, the overtime requirements could vary.
Hourly employees on the side of the plant that had more
overtime felt the side that was working less was getting
“easier” treatment. Larson knew that the overtime dispar-
ity was due to need, not preferential treatment of one side
over the other, but as he put it: “You can talk your head
off, but you’re not going to be able to explain it to them to
their satisfaction. So that causes a lot of frustration among
the ranks down there.”
The Manager of QIS traced the differences between the
Fabrication side and the Components side to the consoli-
dation at Littleton of all of Brooks’s production of wire
coils needed for its domestic appliances after Brooks
bought Frühling, Inc., in 1984. Most of the upper man-
agers hired to start the Components business were brought
in from Frühling, and, as he put it, “They had a different
way of doing things. It wasn’t a tightly run ship.” He said
that some of the old managers at the plant wondered about
the wisdom of bringing in managers from a company that
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582 Integrative Cases
had not been successful. People asked, “Why use them
here? They must have been part of what was wrong.” One
Fabrication manager added that the manager brought in to
start the Components business, Bob Halperin, had the
view: “We’re going to start a new business here
and do whatever is necessary to make it run and
to hell with Littleton Manufacturing policies.”
Also, when the new Components business was
started, its manager reported directly to the
Brooks corporate office and not to the plant man-
ager. In 1986 the structure was changed so that
the factory manager of Components reported to
the Littleton Manufacturing plant manager.
A union steward at the plant attributed some of the dif-
ferences between the two sides to the fact that the workforce
on the Components side tended to be younger and had more
women with young children (67 percent of the hourly
women in the plant worked in Components). The demands
of raising children, he thought, resulted in the women need-
ing to take more time off from work. One of the Fabrication
supervisors thought that since the supervisors on the Com-
ponents side were younger, they expected more from man-
agement and were more outspoken, especially about how
much an hour they should be paid. A number of these su-
pervisors had also been brought in from Frühling, and were
not originally from Littleton.
Lack of Consistency in Enforcing Rules
and Procedures
A major complaint of both hourly and salaried workers was
the inconsistent application of policies and procedures. Al-
though most people mentioned the differences from one side
of the plant to the other, there were also differences from one
department to another. As the chief union steward put it,
“This is the number-one problem here—nobody is the same!”
Some Components supervisors were letting people take longer
breaks and going for breaks earlier than they were supposed
to. Some supervisors allowed hourly employees to stand
around and talk for a while before getting them to start their
machines. In some departments on the Components side, em-
ployees were allowed to gather in the bathrooms and “hang
out” anywhere from five to twenty minutes before quitting
time. The chief steward cited an example where, contrary to
previous policy, some workers on the Components side were
allowed to have radios. “When people on the Fabrication side
found out,” he said, “they went wild.”
Some other examples of inconsistencies cited by em-
ployees were as follows:
1. Fighting in the plant was supposed to result in auto-
matic dismissal, but the Human Resources administra-
tor recalled two incidents of fighting where the people
involved were not disciplined.
2. Another incident that had been much discussed
throughout the plant involved an employee who was
“caught in a cloud of marijuana smoke” by his super-
visor. Since the supervisor did not observe the man
smoking but just smelled the marijuana, the person was
only given a written warning. One manager said, “We
need to take a stand on these things. We need to make
a statement. That way we would gain some respect.”
Describing the same incident, another manager said, “It
makes us close to thinking we’re giving them (hourly
employees) the key to the door.”
3. Several people also mentioned the case of a mother
who claimed she missed work several times because of
doctors’ appointments for her children and was sus-
pended for three days, which they compared with the
case of an operator who also missed work several
times, and was suspected of drug or alcohol abuse, but
was not disciplined.
In discussing differences in the enforcement of safety
regulations throughout the plant, the administrator of
plant safety and security said that when he confronted
people who were wearing sneakers, often they would just
say they forgot to wear their safety shoes. He said, “If I
had to punish everyone, I’d be punishing 50 to 100 peo-
ple a day.”
There were also differences in absenteeism for the two
sides of the plant. Absenteeism on the Components side
was around 2.2 percent, whereas it was slightly less than 1
percent on the Fabrication side. Some attributed this to a
looser enforcement of the rules governing absenteeism by
supervisors on the Components side.
Winslow had tried to estimate the annual cost of fail-
ure to enforce the rules governing starting and stopping
work. His estimate was that the plant was losing
$2,247.50 per day, for a total of $539,400 a year.
Winslow’s memo detailing how he arrived at his overall es-
timate had been part of his presentation to Larson; it is in-
cluded as Exhibit 3. Although Winslow had not said so in
the memo, he later estimated that 70 percent of the total
loss occurred on the Components side of the plant.
Supervisors complained that when they tried to disci-
pline subordinates, they often did not feel confident of
backing by management. They referred to incidents where
they had disciplined hourly employees only to have their
decisions changed by management or the Human Re-
sources department. One supervisor told of an incident in
which he tried to fire someone in accordance with what he
thought was company policy, but the termination was
changed to a suspension. He was told he had been too
harsh. In a subsequent incident he had another decision
overruled and was told he had been too lenient. He said,
“We feel our hands are tied; we’re not sure what we can
do.” Supervisors’ decisions that were changed were usually
communicated directly to the union by the Human Re-
sources department. In these instances, the supervisors felt
they wound up with “egg on their faces.”
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Integrative Cases 583
Winslow attributed some of these problems to a lack of
communication regarding the company’s policies and pro-
cedures. He thought that if the supervisors understood
company policy better, their decisions would not need to be
changed so frequently. There was no Human Resources
policy manual, for example, although the work rules were
contained in the union contract.
Dan Gordon disagreed with the view that these prob-
lems were a result of the supervisors’ lack of understand-
ing of the plant’s policies and procedures. He claimed:
“Ninety-nine percent of the supervisors know the policies
but they lack the skills and willingness to enforce them.
Just like a police officer needs to be trained to read a pris-
oner his rights, the supervisors need to be taught to do
their jobs.” He thought that in some of the cases where a
supervisor’s decision was changed, the supervisor had
made a mistake in following the proper disciplinary pro-
cedure. Then, when the supervisor’s decision was over-
turned, no explanation was provided, so the supervisor
would be left with his or her own erroneous view of what
happened.
The Human Resources administrator thought that
some of the supervisors were reluctant to discipline or con-
front people because “They’re afraid to hurt people’s feel-
ings and want to stay on their good side.”
Supervisor’s Role Is Poorly Perceived
On the first shift in Fabrication there were about 70 hourly
workers and 7 supervisors, and in Components there were
about 140 hourly workers and 11 supervisors. Supervisors
were assisted by group leaders, hourly employees who were
appointed by the company and who received up to an ex-
tra 10 cents an hour.
All levels of the plant were concerned about the role of
supervisors. “Supervisors feel like a nobody,” said one se-
nior manager. In the assessment of organizational commu-
nication done by the students, hourly employees, middle
managers, and supervisors all reported that supervisors
had too much to do and that this limited their effectiveness.
A typical observation by one hourly employee was: “The
supervisors can’t be out on the floor because of meetings
and paperwork. They have a tremendous amount of things
on their mind…. The supervisor has become a paperboy,
which prevents him from being able to do his job.” In
speaking about how busy the supervisors were and how
they responded to suggestions by hourly employees, an-
8.1
MEMORANDUM
From: Paul Winslow, Director of Human Resources
To: Bill Larson
Subject: Estimated Cost of Loss of Manufacturing Time
Date: 6/18/90
Loss of Manufacturing Time*
(Based on 348 Hourly Employees)
Delay at start of shift 10 minutes � 25% (87) � 14.50 hours
Washup before AM break 5 minutes � 75% (261) � 21.75 hours
Delayed return from break 10 minutes � 50% (174) � 29.00 hours
Early washup—lunch avg. 10 minutes � 50% (174) � 29.00 hours
Delayed return from lunch 10 minutes � 25% (87) � 14.50 hours
Early washup before PM break 5 minutes � 75% (261) � 21.75 hours
Delayed return from break 10 minutes � 50% (174) � 29.00 hours
Early washup—end of shift 5 minutes � 75% (261) � 65.25 hours
Total � 224.75 hours/day
Cost: 224.75 � avg. $10 hr. � $2,247.50/day
240 days � $2,247.50 � $539,400.00/year
*1. Does not include benefits.
2. Does not include overtime abuses.
3. Does not include instances of employees exiting building while punched in.
EXHIBIT 3
Memo from Paul Winslow to Bill Larson
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584 Integrative Cases
other hourly person said, “The supervisor’s favorite word
is, ‘I forgot.’”
Supervisors also wanted more involvement in decision
making. “You will! You will! You will!” is the way one su-
pervisor characterized the dominant decision-
making style of managers at the plant. He
thought that most managers expected supervisors
to just do what they were told to do. “We have a
lot of responsibility but little authority,” was how
another supervisor put it. Many supervisors felt
that they were ordered to do things by their man-
agers, but when something went wrong, they
were blamed.
Another factor contributing to the low morale of su-
pervisors was a perceived lack of the resources that they
felt were necessary to do a good job. Many complained
that they were often told there was no money to make
changes to improve things. They also complained of too
few engineering, housekeeping, and maintenance person-
nel. Some supervisors thought there were too few supervi-
sors on the second and third shifts. They thought this re-
sulted in inadequate supervision and allowed some hourly
workers to goof off, since the employees knew when these
few supervisors would and would not be around.
The combination of these factors—job overload, too
much paperwork, lack of authority, not enough involve-
ment in decision making, lack of resources to make
changes, inadequate training, and few rewards—made it
difficult to find hourly people at the plant who would ac-
cept an offer to become a supervisor.
In discussing the role of supervisors, Larson said, “We
don’t do a good job of training our supervisors. We tell
them what we want and hold them accountable, but we
don’t give them the personal tools for them to do what we
want them to do. They need to have the confidence and
ability to deal with people and to hold them accountable
without feeling badly.” He continued by praising one su-
pervisor who he thought was doing a good job. In particu-
lar, Larson felt, this supervisor’s subordinates knew what
to expect from him. This person had been a chief petty of-
ficer in the Navy for many years, and Larson thought this
had helped him feel comfortable enforcing rules. Reflecting
on this, he said, “Maybe we should just look for people
with military backgrounds to be supervisors.”
Insufficient Focus on Littleton’s Priorities
The phrase “insufficient focus on Littleton’s priorities”
reflected two concerns expressed by employees. First,
there was a lack of understanding of Littleton’s goals.
Second, there was a questioning of the plant’s commit-
ment to these goals. However, various levels saw these
matters differently.
Although the plant had no mission statement, senior
managers said that they thought that they understood Lit-
tleton’s priorities. A typical senior management description
of the plant’s goals was, “To supply customers with qual-
ity products on time at the lowest possible cost in order to
make a profit.”
Each year, Larson and the executive staff developed a
four-year strategic plan for Littleton. Sales and marketing
would first project the amounts and types of products that
they thought they could sell. Then manufacturing would
look at the machine and labor capabilities of the plant. The
sales projections and capabilities were then adjusted as nec-
essary. Throughout the process, goals were set for improv-
ing quality and lowering costs. Larson then took the plan to
Brooks for revision and/or approval. Next, Larson turned
the goals in the strategic plan into specific objectives for
each department. These departmental objectives were used
to set measurable objectives for each executive staff mem-
ber. These then formed the basis for annual performance
appraisals. Because of this process, all of the executive staff
felt that they knew what was expected of them and how
their jobs contributed to achieving the company’s goals.
At the same time, both senior and middle managers
thought there was insufficient communication and support
from corporate headquarters. They mentioned not know-
ing enough about corporate’s long-term plans for the com-
pany. A number of the managers on the Fabrication side
wondered about corporate’s commitment to the Fabrica-
tion business. They thought that if their operation did not
do well financially, the company might end it. In discussing
the status of the Fabrication side of the plant, Gordon said
that Brooks considered it a “noncore business.” The Qual-
ity Assurance manager felt that corporate was not provid-
ing enough support and long-term direction for the QIS.
Winslow was concerned about the lack of consistency in
corporate’s Human Resources policies and felt that he did
not have enough say in corporate Human Resources plan-
ning efforts.
All levels below the executive staff complained that
they did not have a good understanding of Littleton’s own
long-range goals. Some middle managers thought there
was a written, long-range plan for the company but others
disagreed. One member of the executive staff reported that
as far as he knew, the entire strategic plan was seen only by
the executive staff, although some managers would see the
portions of it that concerned their departments. He also re-
ported that the strategic plan was never discussed at oper-
ations review meetings. Most hourly employees said that
they relied on the grapevine for information about “the big
picture.” In discussing the flow of information at the plant,
one union steward said, “Things get lost in the chain of
command.” He said he got more than 80 percent of his in-
formation from gossip on the floor.
The primary mechanism used to communicate Little-
ton’s goals and the plant’s status with regard to achieving
them was the operations review meeting held once a month
by the plant manager, to which all salaried employees were
ostensibly invited. At these meetings, usually attended by
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Integrative Cases 585
about eighty people, the plant manager provided figures on
how closely the plant had hit selected business indicators.
At one recent and typical meeting, for example, the Man-
ager of QIS described various in-place efforts to improve
quality. Bill Larson then reviewed the numbers. He pre-
sented data on budgeted versus actual production, vari-
ances between budgeted and actual manufacturing costs,
profits, the top ten products in sales, standard margins on
various products, shipments of products, information on
backlogs, and the top ten customers.1 When he asked for
questions at the end of his presentation, there were none.
The students’ organizational assessment reported that
all levels appreciated the intent of the operations review
meetings, but there were a number of concerns. Everyone
interviewed wanted more two-way communication but
thought the size and format of the meetings inhibited dis-
cussion. Middle managers thought the meetings focused too
much on what had happened and not enough on the future.
As one manager said: “It’s like seeing Lubbock in the
rearview mirror. We want to know where we’re going—not
where we’ve been. We want to know what’s coming up,
how it’s going to affect our department, and what we can
do to help.” Others, including some of the executive staff,
complained about the difficulty of understanding the finan-
cial jargon. Some hourly employees interviewed did not
know there were operations review meetings, and others
did not know what was discussed at them.
A number of middle managers in manufacturing
thought that having regular departmental meetings would
improve communication within their departments. They
also said that they would like to see minutes of the execu-
tive staff meetings.
When interviewed by the students for their assessment
of organizational communication, a number of middle man-
agers, supervisors, and hourly workers thought the company
was not practicing what it preached with regard to its stated
goals. A primary goal was supposed to be a quality product;
however, they reported that there was too much emphasis on
“hitting the numbers,” or getting the required number of
products shipped, even if there were defects. They said this
especially occurred toward the end of the month when pro-
duction reports were submitted. One worker’s comment re-
flected opinions held by many hourly employees: “Some
foremen are telling people to push through products that are
not of good quality. This passes the problem from one de-
partment to another and the end result is a lousy product.
They seem too interested in reaching the quota and getting
the order out on time rather than quality. It’s a big problem
because when the hourly workers believe that quality isn’t
important, they start not to care about their work. They pass
it on to the next guy, and the next guy gets mad.”
The perception by a number of hourly workers that
their suggestions to improve quality were not responded to
because of a lack of money also resulted in their question-
ing the company’s commitment to quality.
Change Is Poorly Managed
Most of the employees interviewed by the students thought
there were too many changes at the plant and that the nu-
merous changes resulted in confusion.
1. QIS was initiated in 1985.
2. In 1986, 100 hourly employees were laid off.
3. In 1984, there were 154 managers; in 1990,
there were 87 managers.
4. In 1989, corporate initiated a restructuring
that changed the reporting relationships of sev-
eral senior managers.
5. In 1989, as part of QIS, the plant began using
statistical process control techniques and began efforts
to attain ISO certification. (ISO is an internationally
recognized certification of excellence.)
6. In 1989, a new production and inventory control sys-
tem was introduced, with the help of a team of outside
consultants who were at the plant for almost a year
studying its operations.
7. In 1990, the Components side reorganized its produc-
tion flow.
A number of complaints were voiced about the effect
of all the changes. People felt that some roles and respon-
sibilities were not clear. There was a widespread belief that
the reasons for changes were not communicated well
enough and that people found out about changes affecting
them too late. In addition, many were uncertain how long
a new program, once started, would be continued. Larson
thought that many hourly employees were resistant to the
changes being made because they thought the changes
would require more work for them and they were already
“running all the time.” One union steward observed,
“There’s never a gradual easing in of things here.” A mid-
dle manager said: “We’re mandated for speed. We pride
ourselves on going fast. We rush through today to get to to-
morrow.”
Larson thought the culture of the plant was gradually
changing due to the implementation of QIS, but he noted
that a lot of time had to be spent giving the employees rea-
sons for changes.
Dan Gordon thought the plant needed to “communi-
cate change in a single voice.” He said that Larson’s style
was to leave it to the staff to tell others about upcoming
changes. He commented, “By the time it gets to the last
person, it’s lost something.” He felt that Larson needed to
communicate changes to those on lower levels in person.
The QIS manager thought that Brooks did not provide
enough resources and support for changes at the plant. In
explaining his view of corporate’s approach to change, he
said, “Step one is to not give much. Step two is to not give
anything. Step three is they take what’s left away.” Another
middle manager commented, “We’re always being asked to
do more with less, but the requirements by corporate don’t
get cut back.”
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586 Integrative Cases
A frequently mentioned example of change that was
frustrating to many people was the introduction of the
Manufacturing Assisted Production and Inventory Control
System (MAPICS) in 1989. MAPICS was a computerized
system that was supposed to keep track of materi-
als, productivity, and labor efficiency. Theoreti-
cally, it tracked orders from time of entry to pay-
ment of the bill, and one could find out where an
order was at any point in the system by calling it
up on a computer. However, the system was time-
consuming (data had to be entered manually by
the supervisors), and was not as well suited to the
Fabrication side of the plant as it was to the Com-
ponents side, where production was more standardized.
One senior manager commented, “MAPICS was sold as the
savior for the supervisors, and the company was supposed
to get all of the data it needed. But it’s never happened. It’s
only half-installed, and there are systems problems and in-
put problems.” Recently, there had been some question as to
whether MAPICS was giving an accurate inventory count.
Hourly workers felt put upon by the way in which
changes were made. One person said, “We were all of a
sudden told to start monitoring waste and then all of a sud-
den we were told to stop.” Another said, “One day the
MAPICS room is over here, and then the next day it’s over
there. They also put a new system in the stockroom, and
we didn’t know about it.” Many resented the outside con-
sultants that had been brought in by corporate, reporting
that they did not know why the consultants were brought
in or what they were doing. They feared that the consul-
tants’ recommendations might result in layoffs.
Hourly people felt that a lot of their information about
upcoming changes came through the grapevine. “Rumors
fly like crazy” is the way one hourly person described com-
munication on the floor. Another said, “The managers
don’t walk through the plant much. We only see them
when things are going bad.”
In discussing communication about changes, one mid-
dle manager said: “It’s a standing joke. The hourly know
what’s going to happen before we do.” One steward said,
“Lots of times, you’ll tell the supervisors something that’s
going to happen and they will be surprised. It raises hell
with morale and creates unstable working conditions. But
nine out of ten times it’s true.”
Hourly workers also felt that they were not involved
enough in management decisions about changes to be
made. One hourly worker said, “They don’t ask our input.
We could tell them if something is not going to work. They
should keep us informed. We’re not idiots.”
Lack of a Systematic Approach to Training
The company had carried out a well-regarded training ef-
fort when employees were hired to begin the Components
side of the plant and when the QIS program was started. In
addition, every two years each employee went through re-
fresher training for the QIS. There was no other formal
company training or career development at the plant.
Hourly employees and supervisors in particular com-
plained about the lack of training. One hourly employee
expressed the predominant view: “When you start work
here, it’s sink or swim.” In discussing the promotion of su-
pervisors, the chief union steward said he did not know
how people got to be supervisors and that as far as he
knew there was no training that one had to have to become
a supervisor.
When they were hired, new hourly and salaried em-
ployees attended an orientation session in which they were
informed about benefits, attendance policies, their work
schedule, parking regulations, and safety issues. After the
orientation session, further training for new salaried em-
ployees was left up to individual departments. Standard
practice was for the department supervisor to assign the
hourly person to an experienced hourly operator for one-
on-one job training for two weeks. Winslow expressed
some of his reservations about this approach by comment-
ing, “You don’t know if the department is assigning the
best person to train the new employee or if they always use
the same person for training.”
The Human Resources department had no separate
training budget. Individual departments, however, did
sometimes use their money for training and counted the
money used as a variance from their budgeted goals. The
training that did occur with some regularity tended to be
technical training for maintenance personnel.
When asked to explain why there was not more train-
ing, Winslow replied, “We would like to do more but we
haven’t been able to because of the cost and staffing is-
sues.” For example, in 1986 Winslow’s title was manager
of training and development, and he had been responsible
for the training program for all of the new employees hired
to begin the Components unit. After the initial training was
completed, he requested that the plant provide ongoing
training for Components operators. However, his request
was turned down by Larson, who did not want to spend
the money. Winslow also recalled the over 160 hours he
had spent the previous year developing a video training
package for hourly workers in one part of the Components
side of the plant. He said that the program had been pi-
loted, but when it came time to send people through the
training course, production management was unwilling to
let people take time off the floor.
Winslow also cited a lack of support from corporate as
a factor in the plant’s sporadic training efforts. At one time
Brooks had employed a director of training for its plants,
but in 1987, the person left and the company never hired
anyone to replace him. Now, Brooks had no training de-
partment; each plant was expected to provide its own
training. The training Brooks did provide, according to
Winslow, was for the “promising manager” and was pur-
chased from an outside vendor.
8.1
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Integrative Cases 587
Top Management
As he sat in his office thinking about what to do, Winslow
knew that any plan would have to be acceptable to Larson,
Gordon, and Hanson—the plant manager and the two fac-
tory managers—and he spent some time thinking about
their management styles.
Bill Larson was in his late forties, had a B.S. in me-
chanical engineering, and had started at Littleton in 1970.
He had been plant manager since 1983. His direct reports
considered him bright, analytical, and down to earth.
When asked once how he would describe himself to some-
one who didn’t know him, he said, “I keep my emotions
out of things. I can remember when I was in the Army,
standing at attention in my dress blues at the Tomb of the
Unknown Soldier. People would come up a foot from my
face and look me in the eye and try to get me to blink. But
I was able to remove myself from that. I wouldn’t even see
it.” He added that he had built most of his own home and
repaired his own equipment, including the diesels on a
cabin cruiser he used to own. Being raised on a farm in the
rural Midwest, he said he learned at an early age how to
repair equipment with baling wire to keep it going.
Although Larson was considered accessible by the ex-
ecutive staff, he rarely got out on the floor to talk to peo-
ple. Many managers saw him as a “numbers” person who
readily sprinkled his conversations about the plant with
quantitative data about business indicators, variances,
budgeted costs, etc. In referring to his discomfort dis-
cussing personal things, he somewhat jokingly said about
himself, “I can talk on the phone for about thirty-five sec-
onds and then I can’t talk any longer.”
In describing his own management style, Larson said,
“I like to support people and get them involved. I like to
let them know what I am thinking and what they need to
accomplish. I like to let ideas come from them. I want
them to give me recommendations, and if I feel they’re
OK, I won’t change them. They need to be accountable,
but I don’t want them to feel I’m looking over their shoul-
ders. I don’t want to hamper their motivation.” He esti-
mated that 40 percent of his job responsibility consisted of
managing change.
Dan Gordon, who was 38, had been at Littleton for fif-
teen years and had been manufacturing manager of Fabri-
cation for seven years. In describing himself, he said, “I’m
a stickler for details, and I hate to not perform well. My su-
periors tell me I’m a Theory X manager and that I have a
strong personality—that I can intimidate people.”
In speaking about how much he communicated with
hourly employees, Gordon said that he didn’t do enough of
it, adding that “Our platters are all so loaded, we don’t
spend as much time talking to people as we should.” He
said he seldom walked through the plant and never talked
to hourly workers one-on-one. Once a year, though, he met
formally with all the hourly employees on the Fabrication
side to have an operations review meeting like the salaried
people had in order to discuss what the plant was doing,
profits, new products, etc. “The hourly people love it,” he
reported.
Reflecting on why he didn’t communicate more with
hourly workers, Gordon said, “Since the account-
ing department’s data depends, in part, on our
data collection, a lot of my time is eaten up with
this. Maybe I’m too busy with clerical activities to
be more visible.” He based his management deci-
sions on documented data and regularly studied
the financial and productivity reports issued by
the accounting department. He said he would like
to see the supervisors go around in the morning to
just talk to people but acknowledged that they had too
many reports to fill out and too many meetings to attend.
When asked to explain what one needed to do to suc-
ceed as a manager at Littleton, Gordon answered, “You
have to get things done. Bill Larson wants certain things
done within a certain time span. If you do this, you’ll suc-
ceed.”
Phil Hanson, in his early fifties, had been at Littleton
for seven years. He was hired as materials manager for
Components and was promoted to Components factory
manager in mid-1989. Phil estimated that he spent 50 per-
cent of his time on the factory floor talking to people. He
felt it gave him a better insight as to what was going on at
the plant and created trust. He thought that too many of
the managers at the plant were “office haunts”—they felt it
was beneath them to talk with hourly workers. It appeared
to other managers that Hanson often made decisions based
on what he learned in informal conversations with hourly
employees. He tried to delegate as much as he could to his
managers. When asked what a manager had to do to suc-
ceed there, he said, “You have to be a self-starter and make
things happen.”
Winslow remembered how a few years ago, when he
was manager of training and development, the executive
staff had gone to one of those management development
workshops where you find out about your management
style. All of the staff had scored high on the authoritarian
end of the scale.
This triggered a memory of a recent debate in which he
had passed along a suggestion by his staff to the executive
staff to “do something nice for the workers on the floor.”
To celebrate the arrival of summer, his staff wanted the
company to pay for buying hamburgers, hot dogs, and soft
drinks so the workers could have a cookout during their
lunch break. Those on the executive staff who resisted the
idea cited the “jellybean theory of management.” As one
manager explained it, “If you give a hungry bear jelly-
beans, you can keep it happy and get it to do what you
want. But watch out when you run out of jellybeans!
You’re going to have a helluva angry bear to deal with!”
The jelly bean argument carried the day, and the cookout
was not held.
8.1
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588 Integrative Cases
Recommendation Time
As Winslow turned on the computer to write down his rec-
ommendations concerning the six problem areas, he re-
called how Larson had reacted when the students made
their presentation on organizational communica-
tion at Littleton. After praising the students’ ef-
forts, Larson had said, in an offhanded way,
“This mainly confirms what we already knew.
Most of this is not a surprise.” Winslow was
hopeful that now some of these issues would be
addressed.
One potential sticking point, he knew, was
the need for the meetings that would be necessary to dis-
cuss the problems and plan a strategy. People were already
strapped for time and complaining about the number of
meetings. Yet unless they took time to step back and look
at what they were doing, nothing would change.
On a more hopeful note, he recalled that Larson had
been impressed when the Human Resources staff empha-
sized in their presentation to him that these issues were
impacting Littleton’s bottom line. Winslow felt that the
decline in sales and profits at Brooks, the increasing do-
mestic and foreign competition, the current recession, and
declining employee morale made it even more important
that the issues be dealt with. People at all levels of the
plant were starting to worry about the possibility of more
layoffs.
Note
1. At Littleton, the manufacturing, engineering, and ac-
counting departments estimated the standard labor
costs for making each of the plant’s products and a
budget was prepared based on those estimates. The
budgeted costs were plant goals. A variance is the dif-
ference between actual and standard costs. A variance
could be positive (less than) or negative (greater than)
with respect to the budgeted costs.
8.1
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Integrative Cases 589
Winslow met with his staff to develop a list of proposed cor-
rective actions. Exhibit 1 is the memo that Winslow sent, in
June 1990, to the Human Resources PIT, outlining suggested
corrective actions. (The action steps were not prioritized.)
The PIT did not meet to discuss what to do about the
six issues identified by the Human Resources department
until the middle of September. The first issue the PIT de-
cided to address was the inconsistent application of disci-
plinary policies and procedures. They chose this issue first
because they thought that if this could be improved, many
of the other issues would be resolved as well.
The PIT decided to first find out how well supervisors
understood the work rules and the extent to which they had
different interpretations of them. To do this they developed a
quiz covering Littleton’s twenty-eight work rules and gave
the quiz to all supervisors. One question, for example, was
“If you came in and found an employee who had just dozed
off at his/her workstation, what would you do?” The super-
visor then had to choose from several alternatives. This ques-
tion was followed by, “If you came in and found an employee
away from the job and asleep on top of some packing mate-
rials, what would you do?” Again, there was a choice of sev-
eral responses. After taking the exam, the answers were dis-
cussed and the correct answer explained by Winslow and the
Human Resources staff. The results revealed to the PIT that
there was much less knowledge of these rules and how to ap-
ply them than management had expected.
The PIT then theorized that a number of supervisors were
not comfortable with confronting employees about their fail-
ure to follow the company’s policies and procedures, espe-
cially the wearing of safety shoes and goggles. They decided
to seek the assistance of an outside consultant to help them
develop a training program for the supervisors. However, on
September 1, 1991, as a continuation of its “efficiency drive,”
Brooks had imposed a freeze on salaries and a reduction in
travel, and prohibited the use of outside consultants at all of
its plants. When Winslow asked Bill Larson for approval to
hire the consultant, he was reminded that because of the
freeze they would have to do the training in-house.
As a consequence, Winslow began a series of meetings
with union stewards and supervisors—called “Sup and
Stew” meetings—to discuss what the work rules were, dif-
ferent interpretations of them, and how violations of work
rules should be handled. For scheduling reasons, it was
planned so that half of the supervisors and the stewards
would attend each meeting. These meetings were held bi-
weekly for over a year. Winslow believed that the meetings
were helping to clarify and support the role of the supervi-
sors and were beginning to have a positive effect on the en-
forcement of policies and procedures.
In 1991, because the plants that bought the
wire coils made by Components had excess finished
goods inventory, Brooks shut them down for a
month during the Christmas holidays, leading Lit-
tleton to eliminate 125 positions from the Compo-
nents side for the same month, to reduce produc-
tion. “If we hadn’t,” Winslow said, “we would have
had a horrendous amount of inventory.” The em-
ployees filling those positions had, in general, less seniority
than their counterparts from Fabrication, and no one from
the Fabrication side was laid off. A few of the more senior em-
ployees from the Components side were hired to work on the
Fabrication side. At the time of the layoffs, business on the
Fabrication side was booming. In January, the plant started
rehiring the laid-off workers, and by the end of June, all of
them had been rehired.
In November 1991, Bill Larson learned that he had
cancer, and in June 1992, he died. Because of Larson’s ill-
ness, the lack of resources, and time pressures, there was
no formal attempt to address any of the issues identified by
Winslow other than inconsistent enforcement of policies
and procedures.
The new plant manager, Bob Halperin, took over in
the fall of 1992; Halperin had been managing another
Brooks plant in the south for three years. One of the rea-
sons he was chosen was his familiarity with Littleton. He
had been at Littleton as an industrial engineer from 1973
to 1980, when he left to manage another facility. In 1984
he was sent back to Littleton to start and manage Compo-
nents. He held this position for four years before leaving to
manage the plant in the southern United States.
Shortly after Halperin arrived, Winslow acquainted
him with the problem areas defined the previous year, gave
him a copy of the (A) case, and met with him to discuss the
issues. At that time, although Winslow felt that progress
had been made on having more consistent enforcement of
policies and procedures from one side of the plant to the
other, he did not feel much had changed with regard to the
other issues. With the exception of the Sup and Stew meet-
ings, none of the specific action steps recommended by him
and his staff had been implemented.
Integrative Case 8.2
Littleton Manufacturing (B)*
*By David E. Whiteside, organizational development consultant. This case
was written at Lewiston-Auburn College of the University of Southern
Maine with the cooperation of management, solely for the purpose of
stimulating student discussion. Data are based on field research; all events
are real, although the names of organizations, locations, and individuals
have been disguised. Faculty members in nonprofit institutions are
encouraged to reproduce this case for distribution to their students without
charge or written permission. All other rights reserved jointly to the author
and the North American Case Research Association (NACRA). Copyright ©
1994 by the Case Research Journal and David E. Whiteside.
8.2
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590 Integrative Cases
8.2
MEMORANDUM
From: Paul Winslow, Director of Human Resources
To: Human Resources Process Improvement Team
Subject: Proposed Corrective Actions
Date: 6/14/90
Lack of Organizational Unity
1. Use job shadowing or rotation to help people understand each other’s jobs, e.g., do
this across functions.
2. Reformat the Operations Review meetings, e.g., have a program committee.
3. Have a smaller group forum, e.g., have supervisors from the two sides meet.
4. Provide teamwork training for salaried employees.
Lack of Consistency in Enforcing Rules and Procedures
1. Hold meetings with department managers and supervisors to discuss how to enforce
policies and procedures. Have these led by Bill Larson.
2. Develop a policy and procedures review and monitoring system.
Supervisor’s Role Poorly Perceived
1. Have department managers meet with supervisors to determine priorities or conflicts
between priorities.
2. Have supervisory training for all manufacturing supervisors.
3. Time assessment. (How is their time being spent?)
Insufficient Focus on Littleton’s Priorities
1. Use the in-house newsletter to communicate priorities.
2. Develop an internal news sheet.
3. Have a question box for questions to be answered at Operations Review meetings.
4. Have a restatement of Littleton’s purpose (do at Operations Review).
5. Have an Operations Review for hourly workers.
6. Use payroll stuffers to communicate information about goals.
7. Hold department meetings; have the manager of the department facilitate the meeting.
Change Is Poorly Managed
1. Provide training in managing change.
2. Communicate changes.
Lack of a Systematic Approach to Training
1. Establish annual departmental training goals.
2. Link training goals to organizational priorities.
3. Have a systematic approach to training the hourly workforce.
4. Have a training plan for each salaried employee.
5. Have an annual training budget.
HR Dept.
6/90
EXHIBIT 1
Memorandum from Paul Winslow to Human Resources
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Licensed to:

A
adaptability culture a culture characterized by strategic
focus on the external environment through flexibility
and change to meet customer needs.
administrative principles a closed systems management
perspective that focuses on the total organization and
grows from the insights of practitioners.
ambidextrous approach a characteristic of an organiza-
tion that can behave in both an organic and a mecha-
nistic way.
analyzability a dimension of technology in which work
activities can be reduced to mechanical steps and par-
ticipants can follow an objective, computational pro-
cedure to solve problems.
analyzer a business strategy that seeks to maintain a sta-
ble business while innovating on the periphery.
authority a force for achieving desired outcomes that is
prescribed by the formal hierarchy and reporting rela-
tionships.
B
balanced scorecard a comprehensive management control
system that balances traditional financial measures
with operational measures relating to an organiza-
tion’s critical success factors.
benchmarking process whereby companies find out how
others do something better than they do and then try
to imitate or improve on it.
boundary spanning roles activities that link and coordi-
nate an organization with key elements in the external
environment.
bounded rationality perspective how decisions are made
when time is limited, a large number of internal and
external factors affect a decision, and the problem is
ill-defined.
buffering roles activities that absorb uncertainty from the
environment.
bureaucracy an organizational framework marked by
rules and procedures, specialization and division of
labor, hierarchy of authority, technically qualified per-
sonnel, separate position and incumbent, and written
communications and records.
bureaucratic control the use of rules, policies, hierarchy
of authority, written documentation, standardization,
and other bureaucratic mechanisms to standardize
behavior and assess performance.
bureaucratic culture a culture that has an internal focus
and a consistency orientation for a stable environment.
bureaucratic organization a perspective that emphasizes
management on an impersonal, rational basis through
such elements as clearly defined authority and respon-
sibility, formal recordkeeping, and uniform applica-
tion of standard rules.
business intelligence high-tech analysis of large amounts
of internal and external data to identify patterns and
relationships.
C
Carnegie model organizational decision making involving
many managers and a final choice based on a coali-
tion among those managers.
centrality a trait of a department whose role is in the pri-
mary activity of an organization.
centralization refers to the level of hierarchy with author-
ity to make decisions.
centralized decision making is limited to higher authority.
change process the way in which changes occur in an
organization.
chaos theory a scientific theory that suggests that rela-
tionships in complex, adaptive systems are made up of
numerous interconnections that create unintended
effects and render the environment unpredictable.
charismatic authority based in devotion to the exemplary
character or heroism of an individual and the order
defined by him or her.
chief ethics officer high-level company executive who
oversees all aspects of ethics, including establishing
and broadly communicating ethical standards, setting
591
Glossary
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592 Glossary592 Glossary
up ethics training programs, supervising the investiga-
tion of ethical problems, and advising managers in the
ethical aspects of corporate decisions.
clan control the use of social characteristics, such as cor-
porate culture, shared values, commitments, tradi-
tions, and beliefs, to control behavior.
clan culture a culture that focuses primarily on the
involvement and participation of the organization’s
members and on rapidly changing expectations from
the external environment.
closed system a system that is autonomous, enclosed, and
not dependent on its environment.
coalition an alliance among several managers who agree
through bargaining about organizational goals and
problem priorities.
code of ethics A formal statement of the company’s val-
ues concerning ethics and social responsibility.
coercive forces external pressures such as legal require-
ments exerted on an organization to adopt struc-
tures, techniques, or behaviors similar to other
organizations.
collaborative network an emerging perspective whereby
organizations allow themselves to become dependent
on other organizations to increase value and produc-
tivity for all.
collective bargaining the negotiation of an agreement
between management and workers.
collectivity stage the life cycle phase in which an organi-
zation has strong leadership and begins to develop
clear goals and direction.
competing values approach a perspective on organiza-
tional effectiveness that combines diverse indicators of
performance that represent competing management
values.
competition rivalry between groups in the pursuit of a
common prize.
confrontation a situation in which parties in conflict
directly engage one another and try to work out their
differences.
consortia groups of firms that venture into new products
and technologies.
contextual dimensions traits that characterize the whole
organization, including its size, technology, environ-
ment, and goals.
contingency a theory meaning one thing depends on
other things; the organization’s situation dictates the
correct management approach.
contingency decision-making framework a perspective
that brings together the two organizational dimen-
sions of problem consensus and technical knowledge
about solutions.
continuous process production a completely mechanized
manufacturing process in which there is no starting or
stopping.
cooptation occurs when leaders from important sectors
in the environment are made part of an organization.
coping with uncertainty a source of power for a depart-
ment that reduces uncertainty for other departments
by obtaining prior information, prevention, and
absorption.
core technology the work process that is directly related
to the organization’s mission.
craft technology technology characterized by a fairly sta-
ble stream of activities but in which the conversion
process is not analyzable or well understood.
creative departments organizational departments that ini-
tiate change, such as research and development, engi-
neering, design, and systems analysis.
creativity the generation of novel ideas that may meet
perceived needs or respond to opportunities.
culture the set of values, guiding beliefs, understandings,
and ways of thinking that are shared by members of
an organization and are taught to new members as
correct.
culture changes changes in the values, attitudes, expecta-
tions, beliefs, abilities, and behavior of employees.
culture strength the degree of agreement among members
of an organization about the importance of specific
values.
customer relationship management systems that help
companies track customer interactions with the firm
and allow employees to call up a customer’s past sales
and service records, outstanding orders, or unresolved
problems.
D
data the input of a communication channel.
data mining software that uses sophisticated decision-
making processes to search raw data for patterns and
relationships that may be significant.
data warehousing the use of a huge database that com-
bines all of an organization’s data and allows users to
access the data directly, create reports, and obtain
answers to “what-if” questions.
decentralized decision making and communication are
spread out across the company
decision learning a process of recognizing and admitting
mistakes that allows managers and organizations to
acquire the experience and knowledge to perform
more effectively in the future.
decision premises constraining frames of reference and
guidelines placed by top managers on decisions made
at lower levels.
decision support system a system that enables managers
at all levels of the organization to retrieve, manipu-
late, and display information from integrated data-
bases for making specific decisions.
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defender a business strategy that seeks stability or even
retrenchment rather than innovation or growth.
departmental grouping a structure in which employees
share a common supervisor and resources, are jointly
responsible for performance, and tend to identify and
collaborate with each other.
dependency one aspect of horizontal power: when one
department is dependent on another, the latter is in a
position of greater power.
differentiation the cognitive and emotional differences
among managers in various functional departments of
an organization and formal structure differences
among these departments.
direct interlock a situation that occurs when a member of
the board of directors of one company sits on the
board of another.
divisional grouping a grouping in which people are orga-
nized according to what the organization produces.
divisional structure the structuring of the organization
according to individual products, services, product
groups, major projects, or profit centers; also called
product structure or strategic business units.
domain an organization’s chosen environmental field of
activity.
domains of political activity areas in which politics
plays a role. Three domains in organizations are
structural change, management succession, and
resource allocation.
domestic stage the first stage of international develop-
ment in which a company is domestically oriented
while managers are aware of the global environment.
downsizing intentionally reducing the size of a company’s
workforce by laying off employees.
dual-core approach an organizational change perspective
that identifies the unique processes associated with
administrative change compared to those associated
with technical change.
E
e-business any business that takes place by digital processes
over a computer network rather than in physical space.
economies of scale achieving lower costs through large
volume production; often made possible by global
expansion.
economies of scope achieving economies by having a
presence in many product lines, technologies, or geo-
graphic areas.
effectiveness the degree to which an organization
achieves its goals.
efficiency the amount of resources used to produce a unit
of output.
elaboration stage the organizational life cycle phase
in which the red tape crisis is resolved through the
development of a new sense of teamwork and
collaboration.
electronic data interchange (EDI) the linking of organiza-
tions through computers for the transmission of data
without human interference.
empowerment the delegation of power or authority to
subordinates; also called power sharing.
engineering technology technology in which there is sub-
stantial variety in the tasks performed, but activities
are usually handled on the basis of established formu-
las, procedures, and techniques.
enterprise resource planning (ERP) sophisticated comput-
erized systems that collect, process, and provide infor-
mation about a company’s entire enterprise, including
order processing, product design, purchasing, inven-
tory, manufacturing, distribution, human resources,
receipt of payments, and forecasting of future
demand.
entrepreneurial stage the life cycle phase in which an
organization is born and its emphasis is on creating a
product and surviving in the marketplace.
escalating commitment persisting in a course of action
when it is failing; occurs because managers block or
distort negative information and because consistency
and persistence are valued in contemporary society.
ethical dilemma when each alternative choice or behavior
seems undesirable because of a potentially negative
ethical consequence.
ethics the code of moral principles and values that gov-
erns the behavior of a person or group with respect to
what is right or wrong.
ethics committee a group of executives appointed to
oversee company ethics.
ethics hotline a telephone number that employees can
call to seek guidance and to report questionable
behavior
executive information system (EIS) interactive systems
that help top managers monitor and control organiza-
tional operations by processing and presenting data in
usable form.
explicit knowledge formal, systematic knowledge that
can be codified, written down, and passed on to oth-
ers in documents or general instructions.
external adaptation the manner in which an organization
meets goals and deals with outsiders.
extranet private information network.
F
factors of production supplies necessary for production,
such as land, raw materials, and labor.
feedback control model a control cycle that involves set-
ting goals, establishing standards of performance,
measuring actual performance and comparing it to
Glossary 593
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standards, and changing activities as needed based on
the feedback.
financial resources control over money is an important
source of power within an organization.
flexible manufacturing systems (FMS) using computers to
link together manufacturing components such as
robots, machines, product design, and engineering
analysis to enable fast switching from one product to
another.
focus an organization’s dominant perspective value,
which may be internal or external.
focus strategy a strategy in which an organization concen-
trates on a specific regional market or buyer group.
formalization the degree to which an organization has
rules, procedures, and written documentation.
formalization stage the phase in an organization’s life
cycle involving the installation and use of rules, proce-
dures, and control systems.
functional grouping the placing together of employees
who perform similar functions or work processes or
who bring similar knowledge and skills to bear.
functional matrix a structure in which functional bosses
have primary authority and product or project man-
agers simply coordinate product activities.
functional structure the grouping of activities by com-
mon function.
G
garbage can model model that describes the pattern or
flow of multiple decisions within an organization.
general environment includes those sectors that may not
directly affect the daily operations of a firm but will
indirectly influence it.
generalist an organization that offers a broad range of
products or services and serves a broad market.
global company a company that no longer thinks of itself
as having a home country.
global geographical structure a form in which an organi-
zation divides its operations into world regions, each
of which reports to the CEO.
global matrix structure a form of horizontal linkage in
an international organization in which both product
and geographical structures are implemented simulta-
neously to achieve a balance between standardization
and globalization.
global product structure a form in which product divi-
sions take responsibility for global operations in their
specific product areas.
global stage the stage of international development in
which the company transcends any one country.
global teams work groups made up of multinational
members whose activities span multiple countries; also
called transnational teams.
globalization strategy the standardization of product
design and advertising strategy throughout the world.
goal approach an approach to organizational effective-
ness that is concerned with output and whether the
organization achieves its output goals.
H
Hawthorne Studies a series of experiments on worker
productivity begun in 1924 at the Hawthorne plant of
Western Electric Company in Illinois; attributed
employees’ increased output to managers’ better treat-
ment of them during the study.
heroes organizational members who serve as models or
ideals for serving cultural norms and values.
high-velocity environments industries in which competi-
tive and technological change is so extreme that mar-
ket data is either unavailable or obsolete, strategic
windows open and shut quickly, and the cost of a
decision error is company failure.
horizontal coordination model a model of the three com-
ponents of organizational design needed to achieve
new product innovation: departmental specialization,
boundary spanning, and horizontal linkages.
horizontal grouping the organizing of employees around
core work processes rather than by function, product,
or geography.
horizontal linkage the amount of communication and
coordination that occurs horizontally across organiza-
tional departments.
horizontal structure a structure that virtually eliminates
both the vertical hierarchy and departmental bound-
aries by organizing teams of employees around core
work processes; the end-to-end work, information,
and material flows that provide value directly to
customers.
human relations model emphasis on an aspect of the
competing values model that incorporates the values
of an internal focus and a flexible structure.
hybrid structure a structure that combines characteristics
of various structural approaches (functional, divi-
sional, geographical, horizontal) tailored to specific
strategic needs.
I
idea champions organizational members who provide the
time and energy to make things happen; sometimes
called advocates, intrapreneurs, and change agents.
idea incubator safe harbor where ideas from employees
throughout the organization can be developed without
interference from company bureaucracy or politics.
imitation the adoption of a decision tried elsewhere in
the hope that it will work in the present situation.
594 Glossary
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incident command system developed to maintain the effi-
ciency and control benefits of bureaucracy yet prevent
the problems of slow response to crises.
incremental change a series of continual progressions
that maintain an organization’s general equilibrium
and often affect only one organizational part.
incremental decision process model a model that
describes the structured sequence of activities
undertaken from the discovery of a problem to
its solution.
indirect interlock a situation that occurs when a director
of one company and a director of another are both
directors of a third company.
information that which alters or reinforces understanding.
information reporting systems the most common form
of management information system, these computer-
ized systems provide managers with reports that
summarize data and support day-to-day decision
making.
inspiration an innovative, creative solution that is not
reached by logical means.
institutional environment norms and values from stake-
holders (customers, investors, boards, government,
etc.) that organizations try to follow in order to please
stakeholders.
institutional perspective an emerging view that holds that
under high uncertainty, organizations imitate others in
the same institutional environment.
institutional similarity the emergence of common struc-
tures, management approaches, and behaviors among
organizations in the same field.
integrated enterprise an organization that uses advanced
information technology to enable close coordination
within the company as well as with suppliers, cus-
tomers, and partners.
integration the quality of collaboration between depart-
ments of an organization.
integrator a position or department created solely to
coordinate several departments.
intellectual capital the sum of an organization’s knowl-
edge, experience, understanding, processes, innova-
tions, and discoveries.
intensive technologies a variety of products or services
provided in combination to a client.
interdependence the extent to which departments depend
on each other for resources or materials to accomplish
their tasks.
intergroup conflict behavior that occurs between organi-
zational groups when participants identify with one
group and perceive that other groups may block their
group’s goal achievements or expectations.
interlocking directorate a formal linkage that occurs
when a member of the board of directors of one com-
pany sits on the board of another company.
internal integration a state in which organization mem-
bers develop a collective identity and know how to
work together effectively.
internal process approach an approach that looks at
internal activities and assesses effectiveness by indica-
tors of internal health and efficiency.
internal process emphasis an aspect of the competing val-
ues model that reflects the values of internal focus and
structural control.
international division a division that is equal in status
to other major departments within a company and
has its own hierarchy to handle business in various
countries.
international stage the second stage of international
development, in which the company takes exports
seriously and begins to think multidomestically.
interorganizational relationships the relatively enduring
resource transactions, flows, and linkages that occur
among two or more organizations.
intranet a private, company-wide information network
that uses the communications protocols and standards
of the Internet but is accessible only to people within
the company.
intuitive decision making the use of experience and judg-
ment rather than sequential logic or explicit reasoning
to solve a problem.
J
job design the assignment of goals and tasks to be
accomplished by employees.
job enlargement the designing of jobs to expand the
number of different tasks performed by an employee.
job enrichment the designing of jobs to increase responsi-
bility, recognition, and opportunities for growth and
achievement.
job rotation moving employees from job to job to give
them a greater variety of tasks and alleviate boredom.
job simplification the reduction of the number and diffi-
culty of tasks performed by a single person.
joint optimization the goal of the sociotechnical systems
approach, which states that an organization will func-
tion best only if its social and technical systems are
designed to fit the needs of one another.
joint venture a separate entity for sharing development
and production costs and penetrating new markets
that is created with two or more active firms as
sponsors.
K
knowledge a conclusion drawn from information that
has been linked to other information and compared to
what is already known.
Glossary 595
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knowledge management the efforts to systematically find,
organize, and make available a company’s intellectual
capital and to foster a culture of continuous learning
and knowledge sharing so that organizational activi-
ties build on existing knowledge.
L
labor–management teams a cooperative approach
designed to increase worker participation and
provide a cooperative model for union-management
problems.
language slogans, sayings, metaphors, or other
expressions that convey a special meaning to
employees.
large-batch production a manufacturing process charac-
terized by long production runs of standardized
parts.
large group intervention an approach that brings
together participants from all parts of the organiza-
tion (and may include outside stakeholders as well)
to discuss problems or opportunities and plan for
change.
lean manufacturing uses highly trained employees at
every stage of the production process who take a
painstaking approach to details and continuous
problem solving to cut waste and improve quality.
learning organization an organization in which everyone
is engaged in identifying and solving problems,
enabling the organization to continuously experiment,
improve, and increase its capability.
legends stories of events based in history that may have
been embellished with fictional details.
legitimacy the general perspective that an organization’s
actions are desirable, proper, and appropriate within
the environment’s system of norms, values, and
beliefs.
level of analysis in systems theory, the subsystem on
which the primary focus is placed; four levels of
analysis normally characterize organizations.
liaison role the function of a person located in one
department who is responsible for communicating
and achieving coordination with another department.
life cycle a perspective on organizational growth and
change that suggests that organizations are born,
grow older, and eventually die.
long-linked technology the combination within one
organization of successive stages of production, with
each stage using as its inputs the production of the
preceding stage.
low-cost leadership a strategy that tries to increase mar-
ket share by emphasizing low cost when compared
with competitors’ products.
M
management champion a manager who acts as a sup-
porter and sponsor of a technical champion to shield
and promote an idea within the organization.
management control systems the formalized routines,
reports, and procedures that use information to main-
tain or alter patterns in organizational activity.
management information system a comprehensive, com-
puterized system that provides information and sup-
ports day-to-day decision making.
management science approach organizational decision
making that is the analog to the rational approach by
individual managers.
managerial ethics principles that guide the decisions and
behaviors of managers with regard to whether they
are morally right or wrong.
market control a situation that occurs when price compe-
tition is used to evaluate the output and productivity
of an organization.
mass customization the use of computer-integrated sys-
tems and flexible work processes to enable companies
to mass produce a variety of products or services
designed to exact customer specification.
matrix structure a strong form of horizontal linkage in
which both product and functional structures (hori-
zontal and vertical) are implemented simultaneously.
mechanistic an organization system marked by rules,
procedures, a clear hierarchy of authority, and central-
ized decision making.
mediating technology the provision of products or serv-
ices that mediate or link clients from the external
environment and allow each department to work
independently.
meso theory a new approach to organization studies
that integrates both micro and macro levels of
analysis.
mimetic forces under conditions of uncertainty, the pres-
sure to copy or model other organizations that appear
to be successful in the environment.
mission the organization’s reason for its existence.
mission culture a culture that places emphasis on a clear
vision of the organization’s purpose and on the
achievement of specific goals.
multidomestic company a company that deals with com-
petitive issues in each country independent of other
countries.
multidomestic strategy one in which competition in each
country is handled independently of competition in
other countries.
multifocused grouping a structure in which an organi-
zation embraces structural grouping alternatives
simultaneously.
596 Glossary
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multinational stage the stage of international develop-
ment in which a company has marketing and produc-
tion facilities in many countries and more than
one-third of its sales outside its home country.
myths stories that are consistent with the values and beliefs
of the organization but are not supported by facts.
N
negotiation the bargaining process that often occurs dur-
ing confrontation and enables the parties to systemati-
cally reach a solution.
network centrality top managers increase their power by
locating themselves centrally in an organization and
surrounding themselves with loyal subordinates.
networking linking computers within or between organi-
zations.
new-venture fund a fund that provides financial
resources to employees to develop new ideas, prod-
ucts, or businesses.
niche a domain of unique environmental resources and
needs.
non-core technology a department work process that is
important to the organization but is not directly
related to its central mission.
nonprogrammed decisions novel and poorly defined,
these are used when no procedure exists for solving
the problem.
nonroutine technology technology in which there is high
task variety and the conversion process is not analyz-
able or well understood.
nonsubstitutability a trait of a department whose func-
tion cannot be performed by other readily available
resources.
normative forces pressures to adopt structures, tech-
niques, or management processes because they are
considered by the community to be up-to-date and
effective.
O
official goals the formally stated definition of business
scope and outcomes the organization is trying to
achieve; another term for mission.
open system a system that must interact with the envi-
ronment to survive.
open systems emphasis an aspect of the competing values
model that reflects a combination of external focus
and flexible structure.
operative goals descriptions of the ends sought through
the actual operating procedures of the organization;
these explain what the organization is trying to
accomplish.
organic an organization system marked by free-flowing,
adaptive processes, an unclear hierarchy of authority,
and decentralized decision making.
organization development a behavioral science field
devoted to improving performance through trust,
open confrontation of problems, employee empower-
ment and participation, the design of meaningful
work, cooperation between groups, and the full use
of human potential.
organization structure designates formal reporting
relationships, including the number of levels in the
hierarchy and the span of control of managers and
supervisors; identifies the grouping together of indi-
viduals into departments and of departments into the
total organization; and includes the design of systems
to ensure effective communication, coordination, and
integration of efforts across departments.
organization theory a macro approach to organizations
that analyzes the whole organization as a unit.
organizational behavior a micro approach to organiza-
tions that focuses on the individuals within organiza-
tions as the relevant units for analysis.
organizational change the adoption of a new idea or
behavior by an organization.
organizational decision making the organizational
process of identifying and solving problems.
organizational decline a condition in which a substantial,
absolute decrease in an organization’s resource base
occurs over a period of time.
organizational ecosystem a system formed by the interac-
tion of a community of organizations and their envi-
ronment, usually cutting across traditional industry
lines.
organizational environment all elements that exist
outside the boundary of the organization and
have the potential to affect all or part of the
organization.
organizational form an organization’s specific technology,
structure, products, goals, and personnel.
organizational goal a desired state of affairs that the
organization attempts to reach.
organizational innovation the adoption of an idea or
behavior that is new to an organization’s industry,
market, or general environment.
organizational politics activities to acquire, develop, and
use power and other resources to obtain one’s pre-
ferred outcome when there is uncertainty or disagree-
ment about choices.
organizations social entities that are goal-directed, delib-
erately structured activity systems linked to the exter-
nal environment.
organized anarchy extremely organic organizations char-
acterized by highly uncertain conditions.
Glossary 597
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outsourcing to contract out certain corporate functions,
such as manufacturing, information technology, or
credit processing, to other companies.
P
personnel ratios the proportions of administrative, cleri-
cal, and professional support staff.
point–counterpoint a decision-making technique that
divides decision makers into two groups and assigns
them different, often competing responsibilities.
political model a definition of an organization as being
made up of groups that have separate interests, goals,
and values in which power and influence are needed
to reach decisions.
political tactics for using power these include building
coalitions, expanding networks, controlling decision
premises, enhancing legitimacy and expertise, and
making a direct appeal.
pooled interdependence the lowest form of interdepend-
ence among departments, in which work does not
flow between units.
population a set of organizations engaged in similar
activities with similar patterns of resource utilization
and outcomes.
population ecology perspective a perspective in which the
focus is on organizational diversity and adaptation
within a community or population or organizations.
power the ability of one person or department in an
organization to influence others to bring about desired
outcomes.
power distance the level of inequality people are willing
to accept within an organization.
power sources there are five sources of horizontal power
in organizations: dependency, financial resources, cen-
trality, nonsubstitutability, and the ability to cope with
uncertainty.
problem consensus the agreement among managers
about the nature of problems or opportunities and
about which goals and outcomes to pursue.
problem identification the decision-making stage in
which information about environmental and organiza-
tional conditions is monitored to determine if per-
formance is satisfactory and to diagnose the cause of
shortcomings.
problem solution the decision-making stage in which
alternative courses of action are considered and one
alternative is selected and implemented.
problemistic search occurs when managers look around
in the immediate environment for a solution to resolve
a problem quickly.
process organized group of related tasks and activities
that work together to transform inputs into outputs
that create value for customers.
product and service changes changes in an organization’s
product or service outputs.
product matrix a variation of the matrix structure in
which project or product managers have primary
authority and functional managers simply assign tech-
nical personnel to projects and provide advisory
expertise.
programmed decisions repetitive and well-defined proce-
dures that exist for resolving problems.
prospector a business strategy characterized by innovation,
risk-taking, seeking out new opportunities, and growth.
R
radical change a breaking of the frame of reference for
an organization, often creating a new equilibrium
because the entire organization is transformed.
rational approach a process of decision making that
stresses the need for systematic analysis of a problem
followed by choice and implementation in a logical
sequence.
rational goal emphasis an aspect of the competing values
model that reflects values of structural control and
external focus.
rational-legal authority based on employees’ belief in the
legality of rules and the right of those in authority to
issue commands.
rational model a description of an organization charac-
terized by a rational approach to decision making,
extensive and reliable information systems, central
power, a norm of optimization, uniform values across
groups, little conflict, and an efficiency orientation.
reactor a business strategy in which environmental
threats and opportunities are responded to in an ad
hoc fashion.
reasons organizations grow growth occurs because it is
an organizational goal, it is necessary to attract and
keep quality managers, or it is necessary to maintain
economic health.
reciprocal interdependence the highest level of interde-
pendence, in which the output of one operation is the
input of a second, and the output of the second opera-
tion is the input of the first (for example, a hospital).
reengineering redesigning a vertical organization along its
horizontal workflows and processes.
resource dependence a situation in which organizations
depend on the environment but strive to acquire con-
trol over resources to minimize their dependence.
resource-based approach an organizational perspective
that assesses effectiveness by observing how success-
fully the organization obtains, integrates, and manages
valued resources.
retention the preservation and institutionalization of
selected organizational forms.
598 Glossary
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rites and ceremonies the elaborate, planned activities that
make up a special event and often are conducted for
the benefit of an audience.
role a part in a dynamic social system that allows an
employee to use his or her discretion and ability to
achieve outcomes and meet goals.
routine technology technology characterized by little
task variety and the use of objective, computational
procedures.
rule of law that which arises from a set of codified prin-
ciples and regulations that describe how people are
required to act, are generally accepted in society, and
are enforceable in the courts.
S
satisficing the acceptance by organizations of a satisfac-
tory rather than a maximum level of performance.
scientific management a classical approach that claims
decisions about organization and job design should be
based on precise, scientific procedures.
sectors subdivisions of the external environment that
contain similar elements.
selection the process by which organizational variations
are determined to fit the external environment; varia-
tions that fail to fit the needs of the environment are
“selected out” and fail.
sequential interdependence a serial form of interdepend-
ence in which the output of one operation becomes
the input to another operation.
service technology technology characterized by simulta-
neous production and consumption, customized out-
put, customer participation, intangible output, and
being labor intensive.
simple-complex dimension the number and dissimilarity
of external elements relevant to an organization’s
operation.
Six Sigma quality standard that specifies a goal of no
more than 3.4 defects per million parts; expanded
to refer to a set of control procedures that empha-
size the relentless pursuit of higher quality and
lower costs.
skunkworks separate, small, informal, highly
autonomous, and often secretive group that focuses
on breakthrough ideas for the business.
small-batch production a manufacturing process, often
custom work, that is not highly mechanized and relies
heavily on the human operator.
social audit measures and reports the ethical, social, and
environmental impact of a company’s operations.
social capital the quality of interactions among people,
affected by whether they share a common perspective.
social responsibility management’s obligation to make
choices and take action so that the organization con-
tributes to the welfare and interest of society as well
as itself.
sociotechnical systems approach an approach that com-
bines the needs of people with the needs of technical
efficiency.
sources of intergroup conflict factors that generate con-
flict, including goal incompatibility, differentiation,
task interdependence, and limited resources.
specialist an organization that has a narrow range of
goods or services or serves a narrow market.
stable-unstable dimension the state of an organization’s
environmental elements.
stakeholder any group within or outside an organization
that has a stake in the organization’s performance.
stakeholder approach also called the constituency
approach, this perspective assesses the satisfaction of
stakeholders as an indicator of the organization’s per-
formance.
standardization a policy that ensures all branches of the
company at all locations operate in the same way
stories narratives based on true events that are frequently
shared among organizational employees and told to
new employees to inform them about an organization.
strategic contingencies events and activities inside and
outside an organization that are essential for attaining
organizational goals.
strategy the current set of plans, decisions, and objectives
that have been adopted to achieve the organization’s
goals.
strategy and structure changes changes in the administra-
tive domain of an organization, including structure,
policies, reward systems, labor relations, coordination
devices, management information control systems,
and accounting and budgeting.
structural dimensions descriptions of the internal charac-
teristics of an organization
structure the formal reporting relationships, groupings,
and systems of an organization.
struggle for existence a principle of the population ecol-
ogy model that holds that organizations are engaged
in a competitive struggle for resources and fighting to
survive.
subcultures cultures that develop within an organization
to reflect the common problems, goals, and experi-
ences that members of a team, department, or other
unit share.
subsystems divisions of an organization that perform spe-
cific functions for the organization’s survival; organi-
zational subsystems perform the essential functions of
boundary spanning, production, maintenance, adapta-
tion, and management.
switching structures an organization creates an organic
structure when such a structure is needed for the initi-
ation of new ideas.
Glossary 599
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symbol something that represents another thing.
symptoms of structural deficiency signs of the organiza-
tion structure being out of alignment, including
delayed or poor-quality decision making, failure to
respond innovatively to environmental changes, and
too much conflict.
system a set of interacting elements that acquires inputs
from the environment, transforms them, and dis-
charges outputs to the external environment.
T
tacit knowledge knowledge that is based on personal
experience, intuition, rules of thumb, and judgment,
and cannot be easily codified and passed on to others
in written form.
tactics for enhancing collaboration techniques such as
integration devices, confrontation and negotiation,
intergroup consultation, member rotation, and shared
mission and superordinate goals that enable groups to
overcome differences and work together.
tactics for increasing power these include entering areas
of high uncertainty, creating dependencies, providing
resources, and satisfying strategic contingencies.
task a narrowly defined piece of work assigned to a
person.
task environment sectors with which the organization
interacts directly and that have a direct effect on the
organization’s ability to achieve its goals.
task force a temporary committee composed of represen-
tatives from each department affected by a problem.
team building activities that promote the idea that people
who work together can work together as a team.
teams permanent task forces often used in conjunction
with a full-time integrator.
technical champion a person who generates or adopts
and develops an idea for a technological innovation
and is devoted to it, even to the extent of risking posi-
tion or prestige; also called product champion.
technical complexity the extent of mechanization in the
manufacturing process.
technical knowledge understanding and agreement about
how to solve problems and reach organizational goals.
technology the tools, techniques, and actions used to
transform organizational inputs into outputs.
technology changes changes in an organization’s produc-
tion process, including its knowledge and skills base,
that enable distinctive competence.
time-based competition delivering products and services
faster than competitors, giving companies a competi-
tive edge.
traditional authority based in the belief in traditions and
the legitimacy of the status of people exercising
authority through those traditions.
transaction processing systems (TPS) automation of
the organization’s routine, day-to-day business
transactions.
transnational model a form of horizontal organization
that has multiple centers, subsidiary managers who
initiate strategy and innovations for the company as a
whole, and unity and coordination achieved through
corporate culture and shared vision and values.
U
uncertainty occurs when decision makers do not have
sufficient information about environmental factors
and have a difficult time predicting external changes.
uncertainty avoidance the level of tolerance for and
comfort with uncertainty and individualism within
a culture.
V
values-based leadership a relationship between a leader
and followers that is based on strongly shared values
that are advocated and acted upon by the leader.
variation appearance of new organizational forms in
response to the needs of the external environment;
analogous to mutations in biology.
variety in terms of tasks, the frequency of unexpected
and novel events that occur in the conversion process.
venture teams a technique to foster creativity within
organizations in which a small team is set up as its
own company to pursue innovations.
vertical information system the periodic reports, written
information, and computer-based communications dis-
tributed to managers.
vertical linkages communication and coordination activi-
ties connecting the top and bottom of an organization.
virtual network grouping organization that is a loosely
connected cluster of separate components.
virtual network structure the firm subcontracts many or
most of its major processes to separate companies and
coordinates their activities from a small headquarters
organization.
virtual team made up of organizationally or geographi-
cally dispersed members who are linked through
advanced information and communications technolo-
gies. Members frequently use the Internet and collabo-
rative software to work together, rather than meeting
face-to-face.
W
whistle-blowing employee disclosure of illegal,
immoral, or illegitimate practices on the part
of the organization.
600 Glossary
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Page numbers followed by the
letter n indicate the note in
which the entry is located.
A
Abboud, Leila, 169n66
Abdalla, David, 132n27
Abel, Katie, 168n37
Abelson, Reed, 439n83
Abizaid, John, 30
Abramson, Gary, 317n42
Ackerman, Linda S., 119,
133n58
Ackerman, Val, 71
Adams, Chris, 169n66
Adices, Ichak, 354n26
Adler, Nancy J., 209, 240n14
Adler, Paul S., 258–259,
283n24, 284n39, 285n74,
285n79, 438n31
Aenlle, Conrad de, 240n31
Aeppel, Timothy, 355n80
Agins, Teri, 169n57
Aiken, Michael, 284n61,
354n44, 437n11
Akgün, Ali E., 439n61
Akinnusi, David M., 439n76
Alban, Billie T., 440n88, 440n89
Alderfer, Clayton T., 514n4
Aldrich, Howard E., 49n14,
167n16, 202n34
Alexander, Keith, 438n48,
480n70
Allaire, Paul, 4–5
Allen, Richard S., 440n93
Allen, Robert W., 515n63
Allison, Charles F., 432,
434–435
Alsop, Ronald, 202n49, 202n50,
202n51
Altier, William J., 132n18
Amdt, Michael, 133n45
Amelio, Gilbert, 329
Ammeter, Anthony P., 516n77
Anand, N., 133n57
Anand, Vikas, 318n45
Anders, George, 515n39
Andersen, Arthur, 8
Anderson, Carl, 397n88
Aniston, Jennifer, 466
Antonelli, Cristiano, 133n51
Archer, Earnest R., 478n14,
478n16
Argote, Linda, 283n4, 285n67,
285n75
Argüello, Michael, 479n38
Argyris, Chris, 74, 87n45, 316
Arndt, Michael, 86n16, 86n29,
317n15, 317n25
Arnold, Rick, 511–512
Arogyaswamy, Bernard, 395n34
Arthur, Mr., 41
Ashford, Susan, 201n19
Ashkenas, Ron, 440n90
Astley, W. Graham, 354n47,
514n22, 515n32, 515n47
Aston, Adam, 133n45
At-Twaijri, Mohamed Ibrahim
Ahmad, 168n27
Athitakis, Mark, 478n4
Atkin, Robert S., 169n61
Atsaides, James, 356n85,
356n86
Aubin, Jean, 479n37
Auster, Ellen R., 202n56
Austin, Nancy, 41
Ayers, Nicholas, 28
B
Babcock, Judith A., 169n52
Bacharach, Samuel B., 437n12
Badaracco, Joseph L. Jr., 396n70
Baetz, Mark, 86n6
Bailetti, Antonio J., 438n52
Baker, Edward, 479n37
Baker, Richard, 358
Balaji, Y., 317n41
Ballmer, Steven, 106, 330, 334
Balu, Rekha, 395n33
Bandler, James, 240n1
Banham, Russ, 317n17
Bank, David, 395n24, 478n2
Bannon, Lisa, 50n17
Barbara, Mayor, 196
Barczak, Gloria, 439n67
Barkema, Harry G., 49n3, 49n4
Barker, James R., 355n74
Barker, Robert, 437n16
Barley, Stephen R., 50n18,
318n68, 318n70
Barnatt, Christopher, 318n62
Barnett, Megan, 318n72
Barney, Jay B., 87n42, 168n48
Barone, Michael, 354n23
Barrett, Amy, 85n5, 132n17,
132n29, 240n20, 241n49,
514n8
Barrett, Craig, 472
Barrier, Michael, 396n73
Barrionuevo, Alexei, 394n3,
395n23
Barron, Kelly, 354n40, 437n8
Barsoux, Jean-Louis, 242n68
Bart, Christopher, 86n6
Bartkus, Barbara, 86n7
Bartlett, Christopher A.,
133n44, 201n10, 231,
240n6, 241n63, 242n68,
242n69, 242n73, 242n74
Barton, Chris, 186
Barwise, Patrick, 316n1, 318n64
Bass, Bernard M., 440n95
Baum, J. Robert, 478n22
Baum, Joel A. C., 49n3, 201n34
Bazerman, Max H., 169n61,
396n66
Beard, Donald W., 167n17
Beatty, Carol A., 440n99
Beaudoin, Laurent, 159
Becker, Selwyn W., 354n41,
355n49, 440n103
Beckhard, Richard, 74, 87n45
Bedeian, Arthur G., 202n44
Behling, Orlando, 478n22
Bell, Cecil H. Jr., 439n85,
440n86
Bell, Gerald D., 284n64
Belohlav, James A., 241n38
Belson, Ken, 240n13, 241n53
Benedetti, Marti, 201n15
Benitz, Linda E., 392
Bennett, Amanda, 50n35
Bennis, Warren G., 74, 87n45,
440n106
Berenbeim, Ronald E., 397n90
Bergquist, William, 50n38
Berkman, Erik, 317n8
Berman, Barry, 283n33
Berman, Dennis K., 168n44
Bernstein, Aaron, 49n5, 167n7,
516n88
Berrett-Koehler, 437n4
Beyer, Janice M., 363, 394n10,
395n19
Bezos, Jeff, 488
Bianco, Anthony, 49n1
Biemans, Wim G., 439n58
Biggers, Kelsey, 313
Bigley, Gregory A., 355n55,
355n57
Binkley, Christina, 479n39
Birkinshaw, Julian, 438n39
Birnback, Bruce, 153
Birnbaum, Jeffrey H., 169n68
Black, Lord Conrad, 492
Blackburn, Richard S., 515n36
Blackman, Andrew, 318n66
Blai, Boris, 478n14
Blair, Donald, 330
Blake, Robert R., 507, 516n86,
516n87, 516n91, 516n93
Blanchard, Olivier, 242n71
Blau, Judith R., 438n32
Blau, Peter M., 284n64, 354n47
Blekley, Fred R., 201n32
Blenkhorn, David L., 86n35
Bloodgood, James M., 394n4
Bluedorn, Allen C., 167n16,
354n41
Boeker, Warren, 515n53
Bohbot, Michele, 369
Bohman, Jim, 351
Boland, M., 354n47
Boland, W., 354n47
Bolino, Mark C., 394n4
Bolman, Lee G., 514n2
Bonabeau, Eric, 479n28,
479n30
Bonazzi, Giuseppe, 133n51
Boorstin, Julia, 240n15, 394n2
Borys, Bryan, 169n54, 169n58
Bossidy, Larry, 87n54, 325,
402
Bossidy, Lawrence A., 144
Boudette, Neal E., 132n19
Boulding, Elise, 514n22
Bourgeois, L. J. III, 480n64,
514n3
601
Name Index
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

Bowen, David E., 260, 284n44,
284n52
Bower, Carolyn, 50n28
Bowerman, Bill, 329
Boyle, Matthew, 61, 167n4,
395n32
Brabeck-Letmathe, Peter,
217
Brady, Diane, 284n45
Brady, Simon, 396n57
Branch, Shelly, 133n36
Brandt, Richard, 201n18
Brannigan, Martha, 49n2
Brass, Daniel J., 515n29,
516n71
Breen, Bill, 478n23
Breen, Ed, 419–420
Bremner, Brian, 241n53, 437n1
Bresnahan, Jennifer, 396n65
Brewster, Linda, 169n62
Brimelow, Peter, 354n46
Brimm, Michael, 512
Brin, Sergey, 327
Brittain, Jack W., 202n34
Brockner, Joel, 356n86, 480n72
Brodsky, Norm, 50n44, 440n92
Bronikowski, Karne, 439n62
Brooks, Geoffrey R., 402
Brooks, Rick, 50n28, 478n10
Brown, Andrew D., 394n7
Brown, Ben, 338
Brown, Eryn, 317n34
Brown, John, 355n60
Brown, L. David, 514n7
Brown, Shona L., 438n53,
438n55
Brown, Steve, 317n31
Brown, Stuart F., 284n58
Brown, Tom, 353n17
Brown, Warren B., 168n29
Bruce, Reginald A., 430
Bu, Nailin, 242n72
Buchanan, Leigh, 316n2,
318n65
Buckley, Ron, 24
Buckley, Timothy, 395n42
Buller, Paul F., 393, 440n91
Bunker, Barbara B., 440n88,
440n89
Burke, Charles, 325
Burke, Debbie, 440n90
Burke, W. Warner, 439n85,
440n86
Burkhardt, Marlene E., 516n71
Burns, Greg, 514n8
Burns, Lawton R., 133n42
Burns, Tom, 151, 168n42,
437n23
Burt, Ronald S., 169n61
Burton, Thomas M., 437n17,
437n22
Bush, George W., 103
Byles, Charles M., 395n34
Bylinsky, Gene, 283n1, 283n15,
283n20, 285n73
Byrne, John A., 115, 323,
353n12, 396n64
Byrne, John C., 439n61
Byrnes, Nanette, 514n9
C
Cadieux, Chester II, 31
Cali, Filippo, 270
Callahan, Charles V., 311,
316n5
Camerman, Filip, 221
Cameron, Kim S., 76, 86n34,
87n53, 327, 331, 354n27,
355n75, 355n79, 356n86
Campbell, Andrew, 133n43
Canabou, Christine, 438n35
Canseco, Phil, 476
Cardoza, Mr. R. H., 199–200
Cardoza, Ms., 199
Carlton, Jim, 240n8
Carney, Eliza Newlin, 132n30
Carpenter, Jim, 390–391
Carpenter, Mary, 235–236
Carr, David, 240n1
Carr, Patricia, 439n84
Carr, Tom, 315
Carroll, Glenn R., 202n42
Carroll, Stephen J., 201n19
Carter, Jimmy, 336
Carter, Nancy M., 354n43
Cartwright, D., 515n28
Cascio, W. S., 285n82
Cascio, Wayne F., 356n85,
356n90
Case, John, 353n18
Casselman, Cindy, 493
Caudron, Shari, 356n86,
356n89
Caulfield, Brian, 318n60
Cavanagh, Richard, 336
Cha, Sandra Eunyoung, 395n17,
395n26, 395n35, 395n39
Chamberland, Denis, 133n50,
133n51
Champion, John M., 390
Chapman, Art, 132n27
Charan, Ram, 87n54, 144, 325
Charnes, John, 439n63
Charns, Martin P., 86n12
Chase, Richard B., 284n50,
284n52, 285n79
Chatman, Jennifer A., 395n17,
395n26, 395n35, 395n39
Chen, Christine Y., 440n101
Cheng, Joseph L. C., 285n75
Cherney, Elena, 515n43
Chesbrough, Henry W., 133n57
Child, John, 132n4, 133n60,
355n48
Chiles, James R., 252
Chipello, Christopher J., 86n14
Chow, Chee W., 297, 317n27,
317n28, 440n95
Churchill, Neil C., 354n26
Cialdini, Robert B., 504
Clark, Don, 201n17
Clark, John P., 86n39
Clark, Mickey, 394n1
Clarkson, Max B. E., 396n66
Clegg, Stewart R., 201n34,
202n53
Clifford, Lee, 317n23
Cohen, Don, 394n4
Cohen, Irit, 515n53
Cohen, Michael D., 463,
479n54
Coia, Arthur C., 506
Coleman, Henry J. Jr., 68,
133n52, 355n66, 439n69
Collins, Jim, 86n10, 353n8, 364
Collins, Paul D., 284n39,
284n64
Congden, Steven W., 283n14,
283n17
Conlon, Edward J., 50n29
Conner, Daryl R., 425, 440n97
Connolly, Terry, 50n29
Connor, Patrick E., 284n63
Cook, Lynn, 132n27
Cook, Michelle, 168n28
Cooper, Christopher, 86n18,
515n49
Cooper, William C., 284n59
Copeland, Michael V., 478n1,
478n6
Cormick, Gerald, 195
Courtright, John A., 168n43
Cousins, Roland B., 392
Coutu, Diane L., 440n107
Cowen, Scott S., 317n26
Cox, James, 316n3
Coy, Peter, 201n18
Craig, Susanne, 515n49
Craig, Timothy J., 242n72
Crainer, Stuart, 438n42
Cramer, Roderick M., 514n18
Creed, W. E. Douglas, 355n66,
439n69
Creswell, Julie, 169n72, 202n37
Crewdson, John, 354n39
Crittenden, Victoria L., 485,
514n11
Crock, Stan, 168n33
Cronin, Mary J., 317n34
Cross, Jim, 440n104
Cross, Kim, 86n17
Cummings, Jeanne, 169n67
Cummings, Larry L., 285n67,
438n44, 514n10, 514n18
Cummings, T., 275
Cummins, Doug, 126
Cummins, Gaylord, 86n36
Cunningham, J. Barton, 87n47
Cuomo, Mario, 473
Cusumano, Michael A.,
283n16
Cyert, Richard M., 456,
479n43, 479n45
D
Daboub, Anthony J., 169n70
Dacin, M. Tina, 202n46
Daft, Richard L., 33, 86n34,
116, 126, 133n48, 264,
284n59, 284n63, 284n65,
285n67, 295, 317n19,
317n26, 354n41, 354n47,
355n48, 355n49, 437n12,
439n71, 439n72, 439n73,
440n103, 479n42
Dahl, Robert A., 514n21
Dahle, Cheryl, 394n12
Dalton, Gene W., 168n38,
514n14
Damanpour, Fariborz, 439n70,
439n74
D’Amico, Carol, 49n12, 397n96
Dandridge, Thomas C., 395n16
Daniels, Cora, 395n31
Daniels, John D., 241n39
Dann, Valerie, 516n96
Dannemiller, Kathleen D.,
440n88
Darrow, Barbara, 132n12
Datta, Deepak K., 479n34
Datz, Todd, 318n44, 438n30
Dauch, Richard, 245
Davenport, Thomas H., 515n41
David, Forest R., 86n6
David, Fred R., 86n6
David, Grainger, 283n18,
283n36
Davidow, William A., 437n5
Davidson, Harmon, 476–477
Davig, William, 317n31
Davis, Ann, 514n1, 516n81
Davis, Eileen, 49n3
Davis, Stanley M., 133n37,
133n39
Davis, Tim R. V., 316n1
Davison, Sue Canney, 241n58
Dawson, Chester, 437n1
Dawson, Sarah, 87n49
Day, Jonathan D., 133n60
Deal, Terrence E., 395n15,
395n20, 514n2
Dean, James W. Jr., 478n17,
516n65
Dearlove, Des, 438n42
Deere, John, 147
DeFoe, Joe, 448
DeGeorge, Gail, 240n28
Deitzer, Bernard A., 84
Delacroix, Jacques, 202n42
Delbecq, Andre L., 272, 285n67,
285n75, 396n71, 437n11
DeLong, James V., 515n62
DeMarie, Samuel M., 132n23
DeMott, John S., 283n23
Denis, Héléné, 285n77
Denison, Daniel R., 367,
395n28, 397n100
Deniston, O. Lynn, 86n36
Dent, Harry S. Jr., 402
Denton, D. Keith, 440n105
Denzler, David R., 318n56
DePeters, Jack, 61
Dess, Gregory G., 132n26,
133n56, 133n57, 167n17,
240n28, 437n5
Detert, James R., 395n27
Deutsch, Claudia H., 49n1
Deutsch, Stuart Jay, 50n29
Deutschman, Alan, 514n20
Dewar, Robert D., 354n42
Dickey, Beth, 87n50, 480n60
Digate, Charles, 73
Dill, William R., 479n35
Dillon, Karen, 478n13
DiMaggio, Paul J., 202n54,
202n55
602 Name Index
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

Dimancescu, Dan, 438n55,
439n68
DiSimone, L. D., 437n21
DiTomaso, N., 395n40
Doehring, J., 132n27
Doerflein, Stephen, 356n85,
356n86
Dolgen, Jonathan, 453
Donald, Jim, 55
Donaldson, T., 50n29
Doran, George T., 480n63,
480n67, 480n68
Dorfman, Peter, 242n67
Dougherty, Deborah, 438n50,
439n62
Dougherty, Jack, 21
Douglas, Ceasar, 516n77
Douglas, Frank L., 439n63
Dove, Erin, 476
Dowling, Grahame R., 202n50
Downey, Diane, 132n16
Dragoon, Alice, 201n9, 201n22,
317n9
Dreazen, Yochi J., 478n18,
515n49
Driscoll, Dawn-Marie, 395n46,
396n66
Drory, Amos, 516n67
Drucker, Peter F., 49n15, 81,
353n18, 438n41, 440n98,
477
Drukerman, Pamela, 241n50
Drummond, Helga, 480n72
Drummond, Walton, 476
Druyan, Darleen, 161
Duck, Jeanie Daniel, 424
Dudley, Graham, 283n26
Duerinckx, Reina, 268
Duffield, Dave, 366
Duffy, Tom, 168n30
Dugan, Ianthe Jeanne, 515n39,
515n49
Duimering, P. Robert, 284n40
Duncan, Robert B., 103, 105,
111, 132n26, 133n32,
133n41, 146, 152, 167n17,
437n25
Duncan, W. Jack, 394n7
Dunnette, M.D., 514n6
Dunphy, Dexter C., 440n109
Dutton, Gail, 397n102
Dutton, John M., 514n13,
514n16
Dux, Pierre, 512–513
Dvorak, Phred, 133n34, 241n53
Dwenger, Kemp, 438n55,
439n68
Dworkin, Terry Morehead,
396n84
Dwyer, Paula, 49n13
Dyer, Jeffrey H., 180, 201n26,
201n27
E
Eccles, Robert G., 515n41
Eckel, Norman L., 478n22
Edmondson, Amy, 440n106
Edwards, Cliff, 241n53, 438n51
Edwards, Gary, 383
Egri, Carolyn P., 438n44
Eichenwald, Kurt, 86n9
Eisenberg, Daniel J., 478n21
Eisenhardt, Kathleen M.,
438n53, 438n55, 439n62,
480n64, 480n65, 514n3
Elbert, Norb, 317n31
Elder, Renee, 478n12
Elffers, Joost, 514n27
Elgin, Ben, 516n85
Elliott, Stuart, 353n6
Ellison, Larry, 94
Ellison, Sarah, 167n6
Elsbach, Kimberly D., 169n72
Emerson, Richard M., 514n24,
515n54
Emery, F., 285n81
Emery, Fred E., 167n16
Eng, Sherri, 438n34
Engardio, Pete, 49n5, 201n29
Engle, Jane, 86n22
Engle, Paul, 133n53, 133n56,
133n57
Enns, Harvey G., 516n72
Epstein, Edwin M., 168n34
Epstein, Lisa D., 203n58
Estepa, James, 149
Estepa, Jim, 168n37
Etzioni, Amitai, 85n2, 86n31,
86n32
Evan, William M., 439n70
Evaniski, Michael J., 439n70
Eveland, J. D., 86n36
Eyring, Henry B., 479n35
F
Fabrikant, Geraldine, 86n27,
479n33
Fairhurst, Gail T., 168n43
Farnham, Alan, 50n34, 437n14
Fassihi, Farnaz, 478n18
Fayol, Henri, 26
Feldman, Steven P., 394n10
Feldman, Stewart, 202n40
Fenn, Donna, 201n22
Fennell, Mary L., 439n70
Ferguson, Kevin, 317n17
Ferguson, Ralph, 434–435
Ferrara, Michael, 421
Ferris, Gerald R., 515n64,
516n65
Ferry, Diane L., 33, 285n66
Fey, Carl F., 397n100
Fields, Gary, 50n33
Filo, David, 505
Finch, Byron J., 284n43
Fine, Charles H., 283n16
Finnigan, Annie, 49n13
Fiorina, Carly, 442
Fisher, Anne B., 439n82
Fisher, Michael, 479n37
Fishman, Charles, 50n30,
132n22, 202n51, 285n70
Fitzgerald, Michael, 316n4
Fletcher, Joyce K., 49n13
Flood, Mary, 318n55
Flynn, John, 432, 434–435
Fogerty, John E., 133n45
Fombrun, Charles, 50n29,
50n32, 515n47
Fontaine, Michael A., 318n55,
318n71
Ford, Bill, 89
Ford, Jeffrey D., 354n46
Ford, Robert C., 133n41
Forest, Stephanie Anderson,
202n43
Forsythe, Jason, 49n12
Foster, Peter, 197
Fouts, Paul A., 87n42
Fox, Jeffrey J., 514n27
Fox, William M., 285n81
Fraley, Elisabeth, 512
France, Mike, 168n19, 168n36,
396n64
Francis, Carol E., 273, 285n81
Frank, Robert, 167n13, 241n48,
515n43
Franke, Markus, 167n3
Freedberg, Sydney J., 50n42
Freeman, John, 183, 202n34,
202n36
Freeman, Martin, 434–435
Freidheim, Cyrus F. Jr., 240n22
French, Bell, 440n86, 440n87,
440n88
French, John R. P. Jr., 515n28
French, Wendell L., 439n85,
440n86, 440n87, 440n88
Friedlander, Beth, 196
Friedman, David, 353n14
Friel, Brian, 132n30
Friesen, Peter H., 354n26
Frieswick, Kris, 355n77
Frink, Dwight D., 515n64
Frost, Peter J., 87n46, 438n44
Fry, Louis W., 259, 284n39
Fuller, Scott, 370
G
Gaber, Brian, 86n35
Gaertner, Gregory H., 439n76
Gaertner, Karen N., 439n76
Gajilan, Arlyn Tobias, 50n22
Galang, Maria Carmen, 515n64
Galbraith, Jay R., 132n11,
132n14, 132n16, 241n64,
438n44, 514n17, 516n94,
516n95
Galloni, Alessandra, 169n57
Gantz, Jeffrey, 515n63, 516n70
Gardiner, Lorraine R., 485,
514n11
Garino, Jason, 308, 318n63
Garner, Rochelle, 132n12
Garvin, David A., 317n43,
480n66
Gates, Bill, 13, 106, 330, 334
Geber, Beverly, 396n81, 397n93
Geeraerts, Guy, 354n43
George, A. L., 449
George, Bill, 86n10
George, Thomas, 479n29
Gerstner, Louis, 4, 402
Gesteland, Richard R., 228
Ghadially, Rehana, 515n64
Ghobadian, Abby, 395n26,
395n40
Ghoshal, Sumantra, 133n44,
201n10, 231, 240n6,
241n36, 241n49, 241n63,
242n68, 242n69, 242n73,
242n74
Ghosn, Carlos, 443, 478n6
Gibson, David G., 396n86
Gladwell, Malcolm, 452
Glassman, Myron, 86n7
Glick, William H., 318n45,
402
Glinow, Mary Ann Von, 439n77
Glisson, Charles A., 284n61
Gnyawali, Devi R., 201n4
Gobeli, David H., 133n38
Godfrey, Joline, 49n13
Godfrey, Paul C., 87n42
Goding, Jeff, 317n24
Goes, James B., 402, 437n13
Gogoi, Pallavi, 86n29
Gold, Bela, 283n25
Goldhar, Joel D., 283n37,
284n40, 284n41
Goldoftas, Barbara, 438n31
Goode, Kathy, 354n40
Goodhue, Dale L., 284n60
Goodstein, Jerry, 202n46
Goodwin, Brian, 201n8
Goold, Michael, 133n43
Gopinath, C., 283n14,
283n17
Gordon, G. G., 395n40
Gordon, John R. M., 440n99
Gore, Bill, 21
Gore, W. L., 92
Gottlieb, Jonathan Z., 440n94
Gottlieb, Manu, 196
Govindarajan, Vijay, 240n6,
241n34, 241n47, 241n55,
241n56, 386
Graham, Ginger L., 486
Grant, Robert M., 318n49,
318n50
Grasso, Dick, 493
Grauwe, Paul De, 221
Gray, David A., 169n70
Gray, Steven, 85n1
Grayson, C. Jackson Jr.,
318n52, 479n40
Greco, Susan, 201n11
Greenberg, Hank, 491
Greene, Jay, 354n36
Greene, Robert, 514n27
Greenhalgh, Leonard, 181,
355n78, 355n79
Greenhouse, Steven, 49n12
Greening, Daniel W., 396n55
Greenwood, Royston, 132n5,
355n60
Greiner, Larry E., 327, 331,
354n27
Gresov, Christopher, 284n60,
284n61, 284n62, 285n69,
285n75
Griffin, Ricky W., 164, 437n14
Grimes, A. J., 284n62, 515n31
Name Index 603
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

Grittner, Peter, 180, 201n14,
201n26, 201n27
Groetsch, David, 506
Grossman, Allen, 50n16
Grossman, John, 437n4, 437n15
Grossman, Laurie M., 351
Grossman, Robert J., 49n1
Grover, Ron, 240n24
Grover, Ronald, 241n53,
438n48, 480n70, 514n9
Grow, Brian, 167n10
Guernsey, Brock, 439n63
Guillén, Mauro F., 50n34
Gulati, Ranjay, 308, 318n63
Gunn, Jack, 480n63, 480n67,
480n68
Gunther, Marc, 396n52, 397n95
Gupta, Anil K., 240n6, 241n34,
241n47, 241n55, 241n56
Gupta, Rajat, 9
Gustafson, Loren T., 87n42
Guth, Robert A., 132n31,
168n45, 201n17
H
Hackett, Edward J., 440n108
Haddad, Kamal M., 297,
317n27, 317n28
Hage, Jerald, 284n61, 354n44,
437n11
Hahn, Betty, 354n40
Hake, Ralph, 442
Haldeman, Jeffrey, 273, 285n81
Hale, Wayne, 75
Hall, Douglas T., 278
Hall, Richard H., 50n26, 86n39,
354n43
Hall, Richard L., 202n44
Hambrick, Donald C., 86n30,
241n58
Hamburger, M., 413, 438n52
Hamel, Gary, 354n21, 440n98
Hamm, Steve, 133n31, 439n75
Hammer, Michael, 133n46,
133n47, 317n24, 420
Hammond, John S., 478n13
Hammonds, Keith H., 49n5,
50n21, 133n51, 240n11,
324, 353n16, 354n25,
403
Hammonds, See, 353n17
Hampton, David L., 280
Hancock, Herbie, 55
Hanges, Paul, 242n67
Hanks, Tom, 453
Hannan, Michael T., 183,
202n34, 202n36, 202n42
Hansell, Saul, 478n6
Hansen, Morten T., 241n65,
303, 318n53
Hansson, Tom, 167n3
Harada, Takashi, 255
Harari, Oren, 51n46
Hardy, Cynthia, 201n34,
202n53, 438n50, 439n62
Harper, Richard H. R., 302
Harreld, Heather, 317n8
Harrington, Ann, 50n27, 50n34,
51n45, 86n15, 438n47,
439n59
Harrington, Richard, 78
Harrington, Susan J., 397n94
Harris, Gardiner, 169n66
Harris, Randall D., 167n16
Harvey, Cheryl, 126
Harvey, Edward, 283n8
Harwood, John, 355n64
Hassard, John, 283n26
Hatch, Mary Jo, 394n10
Hatch, Nile W., 201n26
Hawkins, Lee Jr., 86n13, 87n41,
169n63, 514n8
Hawley, A., 354n47
Hayashi, Alden M., 478n23
Hays, Constance L., 168n21,
240n30, 317n14
Hays, Kristin, 132n27
Head, Thomas C., 164
Heck, R. H., 395n40
Heide, Jan B., 201n20
Hellriegel, Don, 275, 285n80,
395n18
Hellriegel, Slocum, 285n84
Hemmert, Martin, 242n70
Hench, Thomas J., 478n23
Henderson, A. M., 354n37
Henderson, Sam, 195–196
Hendrickson, Anthony R.,
132n23
Henkoff, Ronald, 284n42,
356n86
Henricks, Mark, 397n93
Henry, David, 353n15
Hensley, Scott, 438n49
Herbert, Theodore T., 209,
240n14
Heskett, James L., 372, 374,
394n11, 395n43
Heymans, Brian, 283n29
Hickel, James K., 439n79
Hicks, Tom, 489–490
Hickson, David J., 50n26,
201n13, 202n35, 202n54,
202n55, 283n5, 283n7,
515n51, 515n52, 515n58,
515n60, 516n73
Higgins, Christopher A., 438n40
Higgins, James H., 394n9,
395n25
Higgs, A. Catherine, 356n84
Higuchi, Tatsuo, 409
Hildebrand, Carol, 315
Hill, Charles W. L., 439n60
Hill, G. Christian, 132n12
Hillebrand, Bas, 439n58
Hilton, Anthony, 132n12
Himelstein, Linda, 168n33,
202n43, 355n82
Hinings, Bob, 132n5
Hinings, C. R., 50n26, 355n60,
515n51, 515n52
Hise, Phaedra, 438n38
Hitt, Michael, 68
Hject, Paola, 240n5
Hjorten, Lisa, 370
Hodder, James E., 479n36
Hof, Robert D., 202n43, 437n1,
437n9, 438n48, 480n70
Hoffman, Alan N., 201n20
Hofstede, Geert, 225, 241n66
Holbek, Jonny, 152
Holliday, Charles O. Jr., 378
Holmes, Stanley, 87n48
Holstein, William J., 7, 49n5,
240n17
Holstrom, Leslie, 396n57
Holweg, Matthias, 353n13
Hooijberg, R., 367, 395n28
Hopkins, Paul, 306
Hornestay, David, 476
Horowitz, Adam, 478n4
Hoskisson, Robert E., 68
Hosmer, LaRue Tone, 376,
395n47, 395n50, 396n62
House, Robert J., 51n47, 199,
202n34, 242n67, 396n71
Howard, Jack L., 515n64
Howard, Jennifer M., 85, 475
Howe, Peter J., 479n52
Howell, Jane M., 438n40
Howitt, Arnold, 195
Hrebiniak, Lawrence G., 85n4,
284n62, 479n47
Hsu, Cheng-Kuang, 354n43
Huber, George P., 402, 514n10
Huey, John, 50n27
Hughes, Michael D., 202n34
Hull, Frank M., 284n39,
284n64
Hult, G. Tomas M., 437n19
Hurd, Mark, 442
Hurley, Robert F., 437n19
Hurst, David K., 29, 50n43, 196
Huxley, Stephen J., 479n36
Hymowitz, Carol, 133n43,
396n58, 515n46
I
Iacocca, Lee, 95, 132n13
Ihlwan, Moon, 167n1, 167n2
Immelt, Jeffrey, 261, 385, 406
Indik, B. P., 354n47
Ingrassia, P., 241n54
Ioannou, Lori, 396n52
Ip, Greg, 49n8, 515n49
Ireland, R. Duane, 68
Issack, Thomas F., 478n24
Ito, Jack K., 285n75
J
Jackson, Janet, 145
Jackson, Terence, 397n101
Jacob, Rahul, 132n28
Jacobs, Robert W., 440n88
Jaffe, Greg, 50n40, 86n18,
478n18
Jagger, Mick, 7
James, Jene G., 396n84
James, John H., 390
James, T. F., 355n48
Janis, Irving L., 449, 478n20
Jarman, Beth, 354n28, 354n33
Jarvis, Mark, 94
Javidan, Mansour, 168n46,
242n67
Javier, David, 236–239
Jelinek, Mariann, 439n77
Jemison, David B., 168n27,
169n54, 169n58
Jenkins, Samantha, 236
Jennings, Daniel F., 438n39
Jobs, Steve, 223, 327, 329–330,
340
Jobson, Tom, 318n57
Johne, F. Axel, 438n53
Johnson, David W., 507
Johnson, Frank P., 507
Johnson, Homer H., 396n52,
397n104
Johnston, Marsha, 49n13
Jolly, Adam, 186
Jones, Althea, 283n21
Jones, Dr. John W., 199–200
Jones, Jerry, 451
Jones, Kathryn, 256
Jonsson, Ellen, 345, 355n81
Joyce, Kevin E., 86n15
Joyce, William F., 66
Judge, Paul C., 372
Judy, Richard W., 49n12,
397n96
Jung, Dong I., 440n95
Jurkovich, Ray, 167n17
K
Kacmar, K. Michele, 515n64
Kahn, Jeremy, 49n1, 203n59
Kahn, Kenneth B., 439n61,
439n67
Kahn, Robert L., 514n22
Kahwajy, Jean L., 514n3
Kalin, Sari, 318n69
Kanigel, Robert, 50n34
Kanter, Rosabeth Moss, 514n25,
515n38, 516n84
Kaplan, Abraham, 514n22
Kaplan, David, 132n27
Kaplan, Robert S., 297, 317n27,
317n28
Karnitschnig, Matthew, 240n1,
240n3, 241n46
Kasarda, John D., 354n46
Katel, Peter, 51n46
Kates, Amy, 132n16
Katz, Ian, 169n60, 241n50
Katz, Nancy, 285n76
Kawamoto, Wayne, 317n33
Kearns, David, 3–4
Kee, Micah R., 394n14, 395n41
Keegan, Paul, 167n3
Keenan, Faith, 439n64
Keeney, Ralph L., 478n13
Kegler, Cassandra, 397n105
Keidel, Robert W., 285n76
Kelleher, Herb, 342
Kelleher, Kevin, 317n11
Keller, Robert T., 285n68,
285n69
Kelly, Kate, 515n49
Kelly, Kevin, 168n50, 201n15,
240n28, 379, 396n63
604 Name Index
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

Kennedy, Allan A., 395n15,
395n20
Kenny, Jim, 492
Keon, Thomas L., 354n43
Kerr, Steve, 440n90
Kerwin, Kathleen, 132n20,
133n51, 438n48, 480n70
Kessler, Eric H., 437n25
Kets de Vries, Manfred F. R.,
241n45
Kharif, Olga, 49n1
Kidman, Nicole, 466
Kiechel, Walter III, 132n18
Killman, Ralph H., 438n25
Kim, Linsu, 437n23
Kim, Myung, 355n75
Kimberly, John R., 354n26,
354n31, 354n41, 439n70
King, Jonathan B., 515n41
King, Neil Jr., 240n7, 241n51
King, Thomas R., 479n57
Kinkead, Gwen, 396n68
Kirkoff, Miss, 81–82
Kirkpatrick, David, 167n12,
168n19
Kirsch, Laurie J., 355n73
Kirsner, Scott, 284n53, 395n38,
437n8
Kisner, Matthew, 371
Klein, Gary, 478n23
Kleiner, Art, 478n19
Kleist, Robert A., 251
Kline, S. M., 284n62
Knecht, G. Bruce, 511
Knight, Gary A., 437n19
Knight, Phil, 329–330
Koberg, Christine S., 168n18
Koch, Christopher, 317n18,
318n59
Kochan, Thomas A., 514n6,
514n10
Koenig, Richard, 272, 285n75
Kohlberg, L., 396n61
Kolb, David A., 514n7
Kolde, Jeff, 411
Kolodny, Harvey, 285n77
Könen, Roland, 65
Konicki, Steve, 439n65
Kontzer, Tony, 318n46, 318n54
Koogle, Tim, 505
Koslow, Linda, 447
Kotter, John P., 85n3, 169n53,
169n64, 372, 374, 394n11,
395n43, 401, 437n2,
437n18, 440n100,
440n103, 440n109, 445
Koza, Mitchell P., 201n18
Kramer, Barry, 354n39
Kramer, Robert J., 217, 241n37,
241n40, 241n41, 241n43,
241n44, 241n61
Kranhold, Kathryn, 394n3,
395n23
Kreuze, Jerry G., 397n97
Kripalani, Manjeet, 49n5
Kruse, Howard, 103
Kruse, Paul, 103
Kuemmerle, Walter, 235
Kueng, Thomas K., 201n20
Kumar, Parmod, 515n64
Kupfer, Andrew, 167n14
Kurschner, Dale, 396n52
L
LaBarre, Polly, 50n41
Lachman, Ran, 515n29, 515n53
Lafley, A. G., 415
Lagnado, Lucette, 515n62
Land, George, 354n28, 354n33
Landers, Peter, 438n33
Landler, Mark, 167n11
Lang, James R., 169n62
Langley, Ann, 479n31
Langley, Monica, 515n35
Langly, Peter, 351–352
Lansing, Shery, 453
LaPotin, Perry, 479n55
Larson, Erik W., 133n38,
515n41
Lashinsky, Adam, 241n53,
317n21, 354n30
Lasswell, Mark, 478n4
Latour, Almar, 169n55
Lau, James B., 278
Law, Andy, 428
Law, Jude, 466
Lawler, Edward E. III, 284n52,
285n84
Lawrence, Anne T., 355n79, 392
Lawrence, Lisa, 512
Lawrence, Paul R., 132n21,
133n37, 133n39, 150–151,
168n38, 168n39, 168n41,
351, 370, 395n37,
440n108, 514n13, 514n14,
516n87
Lawrence, Tom, 390–391
Lawson, Emily, 133n60
Lawson, M. T., 432, 434–435
Lazere, Cathy, 297, 317n28,
355n51, 355n58
Lazurus, Shelly, 142
Leatt, Peggy, 285n68
Leavitt, Harold J., 479n35,
479n40
Leblebici, Huseyin, 168n49
Lee, C. A., 515n51
Lee, Jean, 242n71
Lee, Louise, 480n59
Lee-Young, Joanne, 318n72
Legare, Thomas L., 132n22
Lei, David, 240n19, 240n20,
283n37, 284n40, 284n41
Leifer, Richard, 355n70,
355n73, 438n28
Lengel, Robert H., 285n67
Lennox, Annie, 55
Leo, Anthony, 189
Leonard, Devin, 167n15
Leonard, Dorothy, 438n54
Leonhardt, David, 439n66
Leslie, Keith, 133n60
Letts, Christine W., 50n16
Leung, Shirley, 241n52
Levere, Jane L., 240n4
Levering, Robert, 51n45, 87n48
Levine, David I., 438n31
Levinson, Arthur, 188
Levinson, Meridith, 317n12
Lewin, Arie Y., 57, 201n18
Lewins, Lisa A., 316n1
Lewis, Virginia L., 354n26
Lewyn, Mark, 201n18
Lieberman, David, 133n55
Likert, Rensis, 74, 87n45
Likona, T., 396n61
Lindblom, Charles, 478n7
Linder, Jane C., 133n50, 133n55
Lioukas, Spyros K., 354n47
Lippitt, G. L., 331
Litterer, J. A., 168n20
Litva, Paul F., 438n52
Liu, Michele, 285n77
Lockhart, Daniel E., 169n62
Loewenberg, Samuel, 167n9
Lohr, Steve, 354n45, 395n29
Loomis, Carol J., 478n2
Lorange, Peter, 355n78
Lorsch, Jay W., 132n21,
150–151, 168n38, 168n39,
168n40, 168n41, 370,
395n37, 514n13, 514n14,
516n87
Louis, Meryl Reise, 87n46
Love, John F., 169n57
Loveman, Gary, 292, 317n12
Low, Lafe, 516n67
Lowry, Tom, 241n53
Lublin, Joann S., 49n6, 240n32,
478n2
Luebbe, Richard L., 284n43
Lukas, Paul, 438n51
Lumpkin, James R., 438n39
Lumsden, Charles J., 202n34
Lundburg, Craig C., 87n46
Lundegaard, Karen, 514n8
Lunsford, J. Lynn, 86n17,
439n60
Luqmani, Mushtaq, 397n97
Luqmani, Zahida, 397n97
Lustgarten, Abrahm, 283n31
Luthans, Brett C., 356n85
Lyles, Marjorie A., 478n25,
478n26
Lynn, Gary S., 439n61
M
Mabert, Vincent A., 317n37
Macintosh, Norman B., 264,
284n63, 284n65, 285n67,
295, 317n19, 317n26
Mack, David A., 354n29
Mack, John, 482
Mack, Toni, 132n27
Madhavan, Ravindranath,
201n4
Madison, Dan L., 515n63,
516n69
Madsen, Peter, 396n84
Magnet, Myron, 180, 201n26,
201n27, 201n28
Main, Jeremy, 259, 284n39
Mainardi, Cesare R., 240n32,
240n33
Makhija, Mahesh, 317n41
Malesckowski, Jim, 436
Malkin, Elisabeth, 169n60,
241n50
Mallak, Larry, 394n13
Mallett, Jeffrey, 505
Mallory, Maria, 202n43
Malone, Michael S., 437n5
Malone, Thomas W., 92
Mandal, Sumant, 240n2
Mang, Wayne, 197–198
Manly, Lorne, 241n53, 241n62,
515n44
Mannari, Hiroshi, 354n43
Mannix, Elizabeth A., 49n3
Mansfield, Edwin, 413, 438n52
Manz, Charles C., 318n45
March, James G., 456, 463,
479n43, 479n45, 479n54
March, Robert M., 354n43
Marchington, Mick, 180,
201n27, 201n31
Marcic, Dorothy, 38, 80, 85,
126, 164, 195, 239, 278,
351–352, 389, 394, 430,
475
Marcoulides, G. A., 395n40
Maremont, Mark, 169n58
Margulies, Newton, 284n44
Marineau, Philip, 178
Markels, Alex, 478n3
Markkula, A. C., 327
Markoff, John, 133n36, 354n45
Marple, David, 202n42
Marquis, Christopher, 396n56
Marr, Merissa, 133n34, 241n53,
478n5
Martin, Joanne, 87n46, 395n21
Martin, Lockheed, 397n87
Martinez, Barbara, 515n62
Martinez, Richard J., 202n52
Masarech, Mary Ann, 395n39
Mason, Julie Cohen, 169n56
Masuch, Michael, 479n55
Mathews, Anna Wilde, 479n53
Matlack, Carol, 240n23,
241n42, 479n52
Matthews, J. A., 133n52
Maurer, John G., 515n64,
516n67, 516n78
Mauriel, John J., 395n27
Mayer, John, 55
Mayer, Marissa, 403
Mayes, Bronston T., 515n63
Mayo, Andrew, 317n42, 317n44
Mazurek, Gene, 304
McCowan, Sandra M., 479n38
McAfee, R. Bruce, 86n7
McAllaster, Craig, 394n9,
395n25
McCann, Joseph E., 168n23,
404, 437n7, 514n17,
516n94, 516n95
McCartney, Scott, 440n101
McCauley, Lucy, 86n38, 87n43
McClain, John O., 202n42
McClenahen, John S., 283n19
McClure, Steve, 186
McCormick, John, 438n29
McCracken, Mike, 317n23
Name Index 605
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

McDermott, Richard, 318n48
McDonald, Duff, 284n48
McDonough, Edward F. III,
438n28, 439n67
McFarlin, Dean B., 516n72
McGeehan, Patrick, 353n12
McGregor, Jena, 356n88,
480n60
McIntyre, James M., 514n7
McKelvey, Bill, 202n34
McKinley, William, 203n57,
355n83, 356n84, 438n32
McLaughlin, Kevin J., 133n56,
240n28, 437n5
McLean, Bethany, 514n1,
515n48
McMath, Robert, 438n51
McMillan, Charles J., 479n34,
480n58
McNamee, Mike, 514n9
Meehan, Sean, 316n1, 318n64
Meinhard, Agnes G., 202n42
Melcher, Richard A., 168n33,
354n22, 479n46
Melnyk, Steven A., 318n56
Melton, Rhonda, 153
Meredith, Jack R., 258, 283n21,
284n38
Merrell, V. Dallas, 516n76
Merrifield, D. Bruce, 437n23
Merrion, Paul, 50n28
Messick, David M., 396n66
Metters, Richard, 284n54
Metzger, John, 176
Meyer, Alan D., 68, 402,
437n13
Meyer, J., 202n47
Meyerson, Debra E., 49n13
Miceli, Marcia P., 396n82,
396n84
Michaels, Clifford, 236
Michaels, Daniel, 439n60
Michener, James, 39
Micklethwait, John, 12
Micossi, Anita, 355n65, 355n67
Middaugh, J. Kendall II, 317n26
Migliorato, Paul, 284n49
Milbank, Dana, 167n5
Miles, G., 133n52, 133n56
Miles, Raymond E., 65, 68,
79–80, 86n26, 133n52,
241n45, 355n66, 439n69
Miles, Robert H., 354n26,
354n31
Miller, Danny, 354n26, 355n76
Miller, David, 318n55, 318n71
Miller, Karen Lowry, 49n13
Miller, Larry, 85
Miller, Lawrence M., 475
Miller, Scott, 240n12
Miller, William, 317n44
Milliken, Frances J., 168n18
Mills, Peter K., 284n44, 355n70,
355n73
Milward, H. Brinton, 201n25
Mintzberg, Henry, 16, 37,
50n24, 85n3, 132n24,
458–460, 478n23, 479n48,
479n50, 480n61
Mirvis, Philip H., 440n108
Miser, Hugh J., 479n35
Mishra, Aneil K., 367, 395n28
Mitroff, Ian I., 478n25
Mizruchi, Mark S., 169n62
Moberg, Dennis J., 284n44
Moch, Michael K., 439n70
Moeller, Michael, 132n31
Mohr, Lawrence B., 283n5
Mohrman, Susan Albers,
439n77
Molloy, Kathleen, 440n96
Montanari, John R., 168n27
Montgomery, Kendyl A.,
440n93
Monticup, Peter, 309
Moore, Ethel, 315
Moore, James, 172, 201n3,
201n6
Moore, Larry F., 87n46
Moore, Pamela L., 49n1
Moore, Thomas, 202n38
Morgan, Gareth, 316
Morgan, Ronald B., 396n70
Morgan, Roy, 84
Morgenson, Gretchen, 396n54
Morouney, Kim, 126
Morris, Betsy, 256, 356n90
Morris, James R., 356n85
Morrison, Jim, 284n57
Morse, Dan, 240n10
Morse, Edward V., 439n70
Moskowitz, Milton, 51n45,
87n48
Mouton, Jane S., 507, 516n86,
516n87, 516n91, 516n93
Mueller, Robert, 383
Mulcahy, Anne, 5, 17, 49n1
Muldrow, Tressie Wright,
395n42
Mullaney, Timothy J., 133n31,
318n61
Muller, Joann, 168n19, 168n36,
514n9
Muoio, Anna, 355n69
Murphy, Elizabeth A., 396n52,
396n53
Murphy, Patrice, 440n90
Murray, Alan, 353n11
Murray, Hugh, 285n83
Murray, Matt, 353n5, 356n87
Murray, Victor V., 515n63,
516n70
Musetto, V. A., 479n56
Muson, Howard, 201n4,
201n22
Mutzabaugh, Ben, 372
N
Nadler, David A., 101, 132n8,
247, 437n3
Nagl, Major John, 28
Narasimhan, Anand, 176
Narayanan, V. K., 439n63
Naughton, Keith, 132n20
Nayeri, Farah, 169n65
Neale, Margaret A., 275,
285n80, 356n84
Neale-May, Donovan, 176
Near, Janet P., 396n82, 396n84
Neeleman, David, 31, 372
Neilsen, Eric H., 514n13,
514n18, 516n94, 516n95
Nelson, Bob, 356n86
Nelson, Katherine A., 395n44,
395n51, 396n72, 396n80
Nelson, Robert T., 355n78
Nemetz, Patricia L., 259,
284n39
Neumer, Alison, 133n55
Newcomb, Peter, 202n39
Newman, William H., 354n28
Nicholas O’Regan, 395n40
Nickell, Joe Ashbrook, 317n12
Nielsen, Richard P., 396n83,
479n47
Noble, Ron, 320
Nohria, Nitin, 66, 241n36,
241n65, 303, 318n53
Nolan, Sam, 315
Nonaka, Ikujiro, 318n49
Nord, Walter R., 201n34,
202n53
Nordlinger, Pia, 168n32
Norman, Patricia M., 202n52
Northcraft, Gregory B., 275,
284n52, 285n80, 356n84
Norton, David P., 297, 317n27,
317n28
Novak, William, 132n13
Novicevic, Milorad M., 478n23
Nugent, Patrick S., 516n92
Nutt, Paul C., 478n20, 479n32,
479n34, 480n62
Nystrom, Paul C., 514n17
O
O’Brien, Kevin J., 86n24
O’Connor, Edward J., 283n17,
283n22, 284n40
O’Dell, Carla S., 318n52
O’Flanagan, Maisie, 133n35
Ohmae, Kenichi, 240n29
O’Leary, Michael, 64
Oliver, Christine, 200n2,
201n19
Olsen, Johan P., 463, 479n54
Olsen, Katherine, 432, 436
Olve, Nils–Gõran, 317n30
O’Mahony, Siobhan, 318n68,
318n70
O’Neal, Stan, 503
O’Neill, Regina M., 87n52
O’Regan, Nicholas, 395n26
O’Reilly, Charles A. III, 437n3,
437n25, 438n26, 438n27,
438n36, 440n98
Orlikowski, Wanda J., 283n9
Osborne, Richard, 396n77
Ostroff, Cheri, 87n46
Ostroff, Frank, 115–116, 119,
132n6, 132n25, 133n48,
133n49, 133n59
O’Sullivan, Kate, 201n11
Ouchi, Monica Soto, 85n1
Ouchi, William C., 132n9
Ouchi, William G., 339,
349–350, 355n61,
355n68
Overby, Stephanie, 318n67
P
Pacanowsky, Michael, 478n11
Pace, Stan, 439n80
Pacelle, Mitchell, 396n74
Padsakoff, Philip M., 355n59
Page, Larry, 327
Paine, Lynn Sharp, 396n59
Palmer, Donald, 169n61
Palmisano, Sam, 368
Paltrow, Gwyneth, 466–467
Parise, Salvatore, 318n55,
318n71
Park, Andrew, 514n9
Parker, Warrington S. Jr.,
439n81
Parloff, Roger, 396n67
Parsons, Michael, 186
Parsons, T., 354n37
Pascale, Richard T., 50n39
Pasmore, William A., 273,
285n81, 285n83, 285n85,
285n87, 396n59
Pasternack, Bruce A., 311,
316n5
Patil, Prabhaker, 89
Patteson, Jean, 85n1
Patton, Susannah, 317n20,
317n40
Peabody, Robert L., 515n34
Pearce, Joan L., 479n44
Pearce, John, 86n6
Pearce, John A. II, 439n62
Peers, Martin, 479n53
Pellegrino, James, 440n96
Peng, T. K., 242n72
Penney, J.C., 159
Pennings, Johannes M., 50n36,
202n42, 515n51, 515n52
Pentland, Brian T., 284n56
Perdue, Arthur W., 39
Perdue, Franklin Parsons, 39,
41–44, 49
Perdue, James A. (Jim), 39, 41,
47, 49
Pereira, Joseph, 86n14,
396n56
Perez, Bill, 330
Perot, Ross, 326
Perrow, Charles, 86n11, 86n39,
264, 276, 283, 283n4,
284n55, 353n2, 494,
515n50
Persaud, Joy, 394n6
Peters, Thomas J., 396n75,
438n43
Peters, Tom, 41, 353n3
Peterson, Richard B., 285n75
Petri, Carl-Johan, 317n30
Petrock, F., 367, 395n28
Pettigrew, Andrew M., 492,
515n42, 515n59
Petzinger, Thomas Jr., 51n46,
153, 201n5
606 Name Index
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

Pfeffer, Jeffrey, 168n48, 169n53,
201n12, 284n62, 495,
514n19, 514n23, 515n33,
515n40, 515n51, 515n52,
515n55, 515n56, 515n57,
516n66, 516n68, 516n74,
516n79, 516n82
Pheysey, Diana, 283n5, 283n7
Pickard, Jane, 241n59
Pierce, John L., 437n11
Pil, Frits K., 353n13
Pinchot, Elizabeth, 355n52
Pinchot, Gifford, 355n52
Pincus, Laura B., 241n38
Pine, B. Joseph II, 283n32
Pinelas, May, 196
Pinfield, Lawrence T., 479n49
Pitcher, Al, 476–477
Pitts, Robert A., 241n39
Pla-Barber, José, 241n35
Plafker, Ted, 169n65
Plana, Efren, 332
Pollack, Andrew, 167n8
Pondy, Louis R., 438n25, 514n18
Pool, Robert, 355n56
Porras, Jerry, 86n10
Port, Otis, 240n28, 258
Porter, Benson L., 439n81
Porter, Lyman W., 479n44,
515n63
Porter, Michael E., 63, 65, 68,
79–80, 86n20, 86n21,
86n25, 240n16
Posner, Richard A., 336
Post, James E., 395n49
Potter, Donald V., 353n7
Poulos, Philippos, 264
Powell, Bill, 438n29
Powell, Thomas C., 168n46
Powell, Walter W., 202n54,
202n55
Power, Christopher, 438n48,
480n70
Poynter, Thomas A., 213,
241n36
Prahalad, C. K., 440n98
Preston, L. E., 50n29
Prewitt, Edward, 133n40
Price, Ann, 450
Price, James L., 86n37
Price, Jorjanna, 132n27
Priem, Richard L., 87n44,
133n56, 169n70, 240n28,
437n5
Prince, Charles, 381–382, 384
Pringle, David, 167n1
Provan, Keith G., 201n25
Prusak, Laurence, 394n4,
515n41
Pugh, Derek S., 50n26, 201n13,
202n35, 202n54, 202n55,
283n5, 283n7
Purcell, Philip J., 482–483, 493
Purdy, Lyn, 284n40
Q
Questrom, Allen, 369
Quick, James Campbell, 354n29
Quinn, E., 510
Quinn, J., 440n89
Quinn, James Brian, 437n16
Quinn, Robert E., 75–76,
87n51, 87n52, 87n53, 327,
331, 354n27, 367, 395n28
Quittner, Josh, 354n32
R
Raghavan, Anita, 394n3,
395n23, 514n1
Rahim, M. Afzalur, 514n6
Raia, Anthony, 86n12
Raisinghani, Duru, 479n48
Rajagopalan, Nandini, 479n34
Rancour, Tom, 317n23
Randolph, W. Alan, 132n26,
133n41, 284n65, 285n67
Ranson, Stuart, 132n5
Rapaport, J., 413, 438n52
Rappaport, Carla, 241n45
Rasheed, Abdul M. A., 133n56,
169n70, 240n28, 437n5,
479n34
Raskin, Andrew, 201n30
Raven, Bertram, 515n28
Rawls, Jim, 165–166
Ray, Michael, 354n28
Rayport, Jeffrey F., 438n54
Rebello, Kathy, 201n18
Recardo, Ronald, 440n96
Reed, Michael, 202n34
Reed, Stanley, 133n45
Reese, Shelley, 45
Reichheld, F. F., 260
Reimann, Bernard, 354n43
Reinhardt, Andy, 49n9, 167n1,
167n2, 318n64
Reinwald, Brian R., 478n23
Renwick, Patricia A., 515n63
Rhodes, Robert, 236
Rhodes, Sean, 237
Richards, Bill, 305, 317n7
Richards, Jenna, 434
Richards, Keith, 7
Richardson, Peter, 440n105
Rickey, Laura K., 240n14
Rigby, Darrell, 61
Riggs, Henry E., 479n36
Ring, Peter Smith, 169n53,
201n27
Ringbeck, Jürgen, 167n3
Rinzler, Alan, 354n28
Ripon, Jack, 436
Robbins, Carla Anne, 478n18
Robbins, Paul, 434–435
Robbins, Stephen P., 285n78
Roberson, Bruce, 66
Roberto, Michael A., 480n66
Roberts, Karlene H., 355n55,
355n57
Robinson, Alan G., 437n4
Robinson, Jim, 84
Robson, Ross, 255
Rogers, Everett M., 440n102
Rogers, L. Edna, 168n43
Rohrbaugh, John, 75–76, 87n51
Roland, Dr. P. W., 199–200
Rolfe, Andrew, 263
Romanelli, Elaine, 354n28
Romani, John H., 86n36
Romm, Tsilia, 516n67
Rose, Jim, 240n2
Rose, Pete, 273
Rosenberg, Geanne, 395n48
Rosenberg, Jonathan, 403
Rosenberg, Tina, 354n38
Rosenthal, Jack, 355n53
Rosenthal, Jeff, 395n39
Ross, Jerry, 480n72, 480n73
Roth, Daniel, 167n12, 168n19,
354n35
Rothman, Howard, 317n22
Roure, Lionel, 438n45
Rousseau, Denise M., 51n47
Rowan, B., 202n47
Rowley, Colleen, 383
Roy, Jan, 317n30
Roy, Sofie, 317n30
Rubenson, George C., 39
Rubin, Irwin M., 514n7
Ruddock, Alan, 86n22
Ruekert, Robert W., 514n7
Rundall, Thomas G., 202n42
Rushing, William A., 283n4,
354n43
Russel, Archie, 197
Russell, David O., 466
Russo, J. Edward, 478n9
Russo, Michael V., 87n42
Rust, Kathleen Garrett, 203n57
Ryan, William P., 50n16
S
Sabrin, Murray, 169n55
Sachdeva, Paramijit S., 514n22,
515n32, 515n47
Safayeni, Frank, 284n40
Safra, Joseph, 457
Salancik, Gerald R., 168n48,
168n49, 201n12, 495,
514n23, 515n51, 515n52,
515n56, 515n57
Sales, Amy L., 440n108
Salsbury, Stephen, 132n7
Salter, Chuck, 132n1, 153,
353n1
Salva, Martin, 240n32, 240n33
Sanchez, Carol M., 355n83,
356n84
Sanderson, Muir, 240n32,
240n33
Santana, Carlos, 55
Santosus, Megan, 315, 317n13
Sanzgiri, Jyotsna, 440n94
Sapsford, Jathon, 437n1
Sarason, Yolanda, 87n42
Sarni, Vic, 381
Sasser, W. E. Jr., 260
Sauer, Patrick J., 395n36
Saunders, Carol Stoak, 515n53
Sawhney, Mohanbir, 240n2
Sawka, Kenneth A., 168n33
Sawyer, John E., 437n14
Scannell, Kara, 49n6
Scarbrough, H., 285n87
Schay, Brigitte W., 395n42
Scheer, David, 397n98
Schein, Edgar H., 394n8,
394n11, 440n106, 514n5
Schick, Allen G., 355n83,
356n84
Schiller, Zachary, 168n50,
169n58, 201n15, 240n28
Schilling, Melissa A., 133n50,
133n52, 439n60
Schlender, Brent, 50n20, 50n21,
201n3, 354n32, 437n6
Schlesinger, Leonard A.,
440n103, 440n109
Schlosser, Julie, 168n31,
317n10, 479n39
Schmenner, Roger W., 284n52
Schmidt, Eric, 328
Schmidt, Stuart M., 514n6
Schmidt, W. H., 331
Schmitt, Neal, 87n46
Schneck, R. E., 515n51, 515n52
Schneck, Rodney, 285n68
Schnee, J., 413, 438n52
Schneider, Benjamin, 260,
284n44
Schneider, S. C., 397n99
Schneider, Susan, 242n68
Schoemaker, Paul J. H., 478n9,
479n34
Schoenherr, Richard A., 284n64,
354n47
Schon, D., 316
Schonberger, R. J., 283n3
Schonfeld, Erick, 283n35,
284n47, 437n20
Schooner, Steven L., 396n85
Schoonhoven, Claudia Bird,
439n77
Schrempp, Jürgen, 96
Schroeder, Dean M., 283n14,
283n17, 437n4
Schroeder, Roger G., 395n27
Schuler, Randall S., 393
Schultz, Howard, 55, 451
Schulz, Martin, 318n51
Schwab, Chuck, 348
Schwab, Les, 361
Schwab, Robert C., 168n29
Schwadel, Francine, 478n15
Scott, B. R., 331
Scott, Susanne G., 430
Scott, W. Richard, 191, 202n46,
202n55
Sculley, John, 329
Sears, Michael, 161
Seibert, Cindy, 354n40
Seiler, John A., 351
Sellen, Abigail J., 302
Sellers, Patricia, 438n57,
515n37
Selsky, John, 168n23
Serwer, Andy, 7, 85n1, 256,
514n1, 515n48
Seubert, Eric, 317n41
Shafritz, Jay M., 396n84
Shane, Scott, 355n54
Shani, A. B., 278
Shanley, Mark, 50n29, 50n33
Name Index 607
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

Shapiro, Benson S., 485, 514n11
Sharfman, Mark P., 478n17,
516n65
Sharma, Drew, 309
Shea, Gordon F., 395n44
Shein, Esther, 317n35
Shepard, Herbert A., 516n91,
516n93
Sherif, Muzafer, 514n5, 516n95
Sherman, Stratford P., 240n21,
355n71, 440n102
Shetty, Y. K., 72, 86n40
Shilliff, Karl A., 84
Shipper, Frank M., 39
Shipton, L. K., 434
Shirouzu, Norihiko, 240n12,
437n1
Shleifer, Andrei, 242n71
Shoemaker, Floyd, 440n102
Shonfeld, Erick, 394n5
Shoorman, F. David, 169n61
Shostack, G. Lynn, 284n44
Sibley, Miriam, 268
Siebert, Al, 347
Siehl, Caren, 260, 284n44
Siekman, Philip, 50n19, 133n51,
201n33, 283n11
Siklos, Richard, 240n24
Silveri, Bob, 318n57
Simon, Bernard, 132n1
Simon, Herbert A., 456, 478n8,
478n21, 479n43
Simons, Robert, 317n16
Simpson, Curtis, 390
Sinatar, Marsha, 438n44
Singer, Andrew W., 396n70
Singh, Jitendra V.,
201n34–202n34, 202n42
Sirower, Mark L., 202n56
Skarzynski, Peter, 440n98
Skrabec, Quentin R., 396n52
Slater, Derek, 317n36, 317n38
Slevin, Dennis, 438n25
Slocum, John W. Jr., 240n19,
240n20, 275, 285n80,
354n46, 395n18
Slywotzky, Adrian, 353n9
Smircich, Linda, 394n7
Smith, Geoffrey, 168n33
Smith, Geri, 169n65
Smith, Ken G., 201n19
Smith, Ken K., 514n4
Smith, N. Craig, 395n49
Smith, Orin, 55
Smith, Randall, 514n1, 516n81
Smith, Rebecca, 49n6
Snell, Scott A., 241n58
Snelson, Patricia A., 438n53
Snow, Charles C., 65, 68,
79–80, 85n4, 86n26,
133n52, 133n56, 241n45,
241n58, 241n60
Snyder, Naomi, 168n37
Socrates, 310
Solo, Sally, 168n26
Solomon, Charlene Marmer,
241n57
Sommer, Steven M., 356n85
Song, Gao, 479n38
Soni, Ashok, 317n37
Sorenson, Ralph Z., 41
Sorkin, Andrew Ross, 241n53,
241n62, 515n44
Sparks, Debra, 240n18, 240n26,
240n27
Spears, Britney, 369
Spender, J. C., 437n25
Spindler, Michael, 329
Spragins, Ellyn, 450
Sprague, John L., 439n79
Stace, Doug A., 440n109
Stagner, Ross, 479n27
Stalker, G. M., 151, 168n42,
437n23
Stam, Antonie, 485, 514n11
Stamm, Bettina von, 439n57,
439n58
Stanton, Steve, 133n46
Starbuck, William H., 514n17
Starkey, Ken, 394n7
Staw, Barry M., 169n72,
203n58, 285n67, 438n44,
480n72, 480n73, 514n18
Staw, M., 396n76
Stearns, Timothy M., 201n20
Steensma, H. Kevin, 133n50,
133n52
Steers, Richard M., 33, 86n33,
126
Steinberg, Brian, 167n15
Steiner, Gary A., 437n16
Stempert, J. L., 87n42
Stephens, Carroll U., 57
Sterling, Bill, 39
Stern, Robert N., 50n18
Stevenson, William B., 479n44
Stewart, Doug, 516n91
Stewart, James B., 478n2
Stewart, Martha, 8
Stewart, Thomas A., 115,
355n50, 437n21, 478n23,
479n29
Stickley, Ewan, 263
Sting, 55
Stipp, David, 202n45
Stires, David, 202n41
Stodder, Seth M. M., 168n24
Stodghill, Ron II, 169n58
Stoelwinder, Johannes U., 86n12
Stone, Sharon, 369
Stonecipher, Harry, 75
Strakosch, Greg, 370
Strasser, Steven, 86n36
Stringer, Sir Howard, 223, 225,
493
Stross, Randall, 241n53
Strozniak, Peter, 283n30
Stymne, Benjt, 285n77
Suarez, Fernando F., 283n16
Suchman, Mark C., 86n8,
202n48
Summer, Charles E., 280, 432
Sun, David, 382
Surowiecki, Janes, 480n67
Susman, Gerald I., 285n79
Sutton, Charlotte B., 395n15,
395n20
Sutton, Robert I., 169n72,
355n79, 437n16
Svezia, Chris, 149
Swanson, Sandra, 318n58
Symonds, William C., 169n65,
390, 479n52
Szwajkowski, Eugene W.,
169n72, 395n49
T
Tabrizi, Behnam N., 439n62
Taft, Susan H., 375, 395n45
Takahashi, Toshihiro, 261
Takeuchi, Hirotaka, 318n49
Talbert, Wayne, 196
Taliento, Lynn K., 133n35
Tam, Pui-Wing, 479n46
Tan, Cheryl Lu-Lien, 153
Tanouye, Elyse, 132n29
Tansik, David A., 284n50
Tapscott, Don, 133n54
Taris, Toon W., 396n71
Tatge, Mark, 283n34
Taylor, Alex III, 86n14, 201n21
Taylor, Christopher, 352
Taylor, Frederick Winslow, 25
Taylor, Saundra, 352
Taylor, William, 241n45
Teahen, John K., 87n41
Teece, David J., 133n57, 439n70
Teitelbaum, Richard, 86n23
Teja, Salim, 240n2
Terry, Paul M., 514n3
Tetenbaum, Toby J., 50n37,
50n39
Théorêt, André, 479n48
Thoman, Richard, 4–5
Thomas, Fred, 511–512
Thomas, Howard, 478n26
Thomas-Hunt, Melissa, 51n47
Thomas, Kenneth, 514n6
Thomas, Landon Jr., 397n92,
514n1
Thomas, Mark, 196
Thomas, Owen, 317n39, 478n4,
478n6
Thompson, James D., 50n23,
86n19, 168n25, 269–271,
283n7, 285n71, 437n24,
480n58, 514n15
Thompson, Joe, 291
Thompson, P. J., 208
Thompson, Ronald L., 284n60
Thornton, Emily, 241n53
Tichy, Noel M., 515n47
Tierney, Thomas, 303, 318n53
Timmons, Heather, 353n12,
355n82
Tjosvold, Dean, 516n96
Todor, William D., 355n59
Toffler, Barbara Ley, 396n86
Tolbert, Pamela S., 202n53
Tompkins, Tommy, 196
Townsend, Anthony M., 132n23
Townsend, Robert, 472, 480n71
Toy, Stewart, 169n71
Treacy, Michael, 68
Treece, James B., 168n50,
201n15, 240n28, 353n10
Tretter, Marietta J., 241n39
Treviño, Linda Klebe, 395n44,
395n51, 396n59, 396n72,
396n80, 396n86
Trice, Harrison M., 363,
394n10, 395n19
Trist, Eric L., 167n16, 285n83
Trofimov, Yaroslav, 478n18
Trottman, Melanie, 355n72
Tsujino, Koichiro, 223
Tu, John, 382
Tucci, Joe, 144
Tucker, David J., 202n34,
202n42
Tully, Shawn, 439n78
Tung, Rosalie L., 168n22,
168n46
Turban, Daniel B., 396n55
Turcotte, Jim, 318n57
Turner, C., 50n26
Tushman, Michael L., 101,
132n8, 247, 284n65,
285n69, 354n28, 394n4,
437n3, 437n25, 438n26,
438n27, 438n36, 440n98
Tusi, Anne S., 50n29, 50n31
Tyler, John, 165–166
U
Ulm, David, 439n79
Ulrich, David, 168n48, 202n34,
440n90
Ungson, Gerardo R., 168n18,
168n29
Upton, David M., 285n86
Useem, Jerry, 202n49, 202n51,
353n4
V
Van de Ven, Andrew H., 33,
168n49, 169n53, 201n27,
272, 285n66, 285n67,
285n75
Van Horne, Rick, 304
VanGrunsven, Dick, 254
Vargas, Vincente, 284n54
Vaughan, Ken, 141
Veiga, John F., 129, 165
Venkataramanan, M. A.,
317n37
Verschoor, Curtis C., 396n52,
396n53
Vinas, Tonya, 200n1
Vincent, Steven, 180, 201n27,
201n31
Vogelstein, Fred, 403
Volpe, Craig, 118
Voyer, John J., 516n65
Voyle, Susanna, 394n1
Vredenburgh, Donald J.,
515n64, 516n67, 516n78
Vroman, H. William, 126
608 Name Index
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

W
Wagner, S., 413, 438n52
Wah, Louisa, 318n47
Wakin, Daniel J., 132n3
Walker, Gordon, 168n49
Walker, Orville C. Jr., 514n7
Walker, Sam, 514n26
Wallace, Doug, 436, 478n12
Wallach, Arthur E., 440n108
Wally, Sefan, 478n22
Walsh, James P., 354n42
Walton, Eric J., 87n49
Walton, Richard E., 285n84,
507, 514n13, 514n16
Walton, Sam, 322
Warner, Fara, 283n29, 403,
438n56
Warner, Melanie, 317n32,
395n30
Warshaw, Michael, 515n30,
515n45
Washington, Major J., 196
Waterman, Robert H. Jr.,
396n75, 438n43
Watson, Robert A., 338
Watts, Charlie, 7
Watts, Naomi, 466–467
Waxman, Sharon, 479n56
Weaver, Gary R., 396n86
Webb, Allen P., 396n70
Webb, Bill, 255
Webb, Terry, 283n21
Webber, Ross A., 280
Weber, James, 396n60, 397n91
Weber, Joseph, 132n29, 133n33,
168n33, 169n65, 240n20
Weber, Max, 331, 339, 354n37,
355n62
Wegman, Danny, 61
Wegman, Robert, 61
Weick, Karl E., 86n34, 382,
396n76, 480n69
Weil, Jonathan, 49n6
Weiner, Ari, 235–236
Weisbord, Marvin R., 440n88
Weitzel, William, 345, 355n81
Weldon, William C., 57, 96
Weller, Timothy, 60
Wessel, David, 49n7, 355n64,
479n41
Western, Ken, 168n33
Westley, Frances, 478n23
Wheatcroft, Patience, 394n1
Whetten, David A., 86n34,
87n42, 201n20, 354n31,
355n75
White, Anna, 479n38
White, Donald D., 126
White, Gregory L., 240n12
White, Joseph B., 514n8,
516n90
White, Judith, 375, 395n45
White, Roderick E., 213,
241n36
Whitford, David, 169n69
Whitman, Meg, 295–296, 443,
490
Wholey, Douglas R., 202n34
Wiersema, Fred, 68
Wiginton, John C., 479n42
Wilhelm, Wayne, 284n46
Wilke, John R., 50n33
Williams, Larry J., 355n59
Williams, Loretta, 351–352
Williams, Mona, 189
Williamson, James E., 297,
317n27, 317n28
Williamson, Oliver A., 355n63
Willmott, Hugh, 132n5
Wilson, Ian, 86n9
Wilson, James Q., 353n2,
437n24
Wilson, Joseph C., 3
Winchell, Tom, 195–196
Windhager, Ann, 132n27
Wingfield, Nick, 201n7,
241n50, 479n53
Winters, Rebecca, 354n32
Wise, Jeff, 283n27
Wise, Richard, 353n9
Wiser, Phil, 223
Withey, Michael, 284n59
Wolf, Thomas, 49n15
Wolfe, Richard A., 437n10
Wong, Choy, 516n96
Wood, Ronnie, 7
Woodman, Richard W., 275,
285n80, 285n84, 396n59,
437n14
Woodward, Joan, 248–250, 253,
276, 283n6, 283n10,
28312
Wooldridge, Adrian, 12
Worthen, Ben, 169n66,
514n12
Wozniak, Stephen, 327
Wren, Daniel A., 478n23
Wu, Anne, 440n95
Wylie, Ian, 168n47
Wysocki, Bernard Jr., 49n9,
316n3
X
Xerokostas, Demitris A.,
354n47
Y
Yang, Jerry, 505
Yanouzas, John N., 129, 165
Yates, Linda, 440n98
Yee, Amy, 49n1
Yeh, Andrew, 167n1
Yoffie, David B., 169n68
Yoshida, Takeshi, 414
Young, Clifford E., 356n85
Young, Debby, 317n29
Yu, Gang, 479n38
Yukl, Gary, 390
Yuspeh, Alan R., 380,
396n78
Z
Zachary, G. Pascal, 49n11,
169n51, 511
Zald, Mayer N., 494, 515n50
Zaltman, Gerald, 152
Zammuto, Raymond F., 202n44,
283n17, 283n22, 284n40,
355n79
Zander, A. F., 515n28
Zaun, Todd, 240n12
Zawacki, Robert A., 439n85,
439n86, 440n88
Zeitz, Jochen, 65
Zellner, Wendy, 169n58,
169n65, 201n15, 396n64
Zemke, Ron, 284n46
Zhao, Jun, 203n57
Zhou, Jing, 515n64
Zipkin, Amy, 396n79
Zirger, Jo, 438n48
Zmud, Robert W., 439n72,
439n73
Name Index 609
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

A
A. T. Kearney, 100
Abercrombie & Fitch, 311
Acetate Department, 280–282
Acme Electronics, 165–167
Adobe Systems, 409
Advanced Cardiovascular
Systems (ACS), 486
AES Corporation, 14, 92
Aetna Inc., 498
Aflac Insurance, 64
AgriRecycle Inc., 47
Ahold USA, 61
Airbus Industrie, 143, 171, 211,
322
Airstar, Inc., 84
AirTran Airways, 6, 146
Akamai Technologies, 60
Albany Ladder Company,
100
Alberta Consulting, 448
Alberto-Culver, 420
Albertson’s, 61
Allied Signal, 325, 402
Allstate, 287, 298
ALLTEL, 427
Aluminum Company of America
(Alcoa), 506
Amana, 442
Amazon.com Inc., 173–174,
184, 187, 308–309, 368,
488
Amerex Worldwide, 288
America Online (AOL), 158,
222–223, 323, 389, 462
American Airlines, 427
American Axle &
Manufacturing (AAM),
245–246
American Express, 322
American Humane Association, 6
American International Group,
Inc. (AIG), 491
AMP, 181
Anglian Water, 410
Anheuser-Busch Company, 7,
179, 290–291, 322, 351
Ann Taylor, 311
Apple Computer, 107–108, 137,
173, 222–223, 327–330,
402, 404, 462
Aquarius Advertising Agency,
129–131
Arcelor, 111
Arthur Andersen, 58, 343, 384
ASDA Group, 156, 359
Asea Brown Boveri Ltd. (ABB),
218–220, 296, 340
Asset Recovery Center, 183
AT&T, 157, 184
Athletic Teams, 273
Autoliv AB, 255–256
Averitt Express, 366
Avis Corporation, 472
Avon, 387
A.W. Perdue and Son, Inc., 39
B
Bain & Company, 61
Baldwin Locomotive, 184
Banc One, 156
Barclays Global Investors, 302
Barnes & Noble, 308
Bell Canada, 298
Bell Emergis, 298
Bertelsmann AG, 205
Bethlehem Steel Corp., 25, 111
Biocon, 140
Bistro Technology, 278
Black & Decker, 212
Blackwell Library, 39
Blockbuster Inc., 343
Bloomingdale’s, 455
Blue Bell Creameries, Inc.,
103–104
BMW, 208, 222, 257
Boardroom Inc., 405
Boeing Company, 60–61, 74–75,
143, 159, 161, 171, 189,
211, 409, 415
Boise Cascade Corporation, 272
Bombardier, 159, 182
Boots Company PLC, 359, 373
Booz Allen Hamilton Inc., 89
Borden, 351
BP, 226, 253
Bristol-Myers Squibb Company,
337
British Airways, 298
Brobeck, Phleger & Harrison
LLP, 346
Brown, 432
Brown Printing, 205
BT Labs, 224
Burger King, 187, 484
Business Wire, 288
C
C & C Grocery Stores, Inc.,
126–129
Cadillac, 443
CALEB Technologies, 455
Callaway Golf, 174
Canadair, 159
Canada’s Mega Bloks Inc., 60
Cannondale Associates, 61
Canon, 4–5, 408
Cardinal Health, 322
CARE International, 95
CareWeb, 298–299
Carroll’s Foods, 41
Caterpillar Inc., 220, 328, 372
Cementos Mexicanos (Cemex),
32
Centex Corporation, 337
Century Medical, 315
Chamber of Commerce, 196
Charles Schwab & Company,
343, 347–348
Chase, 156
Chevrolet, 72–73, 158–159
Chicago Board of Trade, 179
Chicago Electric Company, 26
Chicago Mercantile Exchange,
179
Chrysler Corporation, 95, 141,
179, 245, 323
Cigna Insurance, 298
Cingular, 157
Cisco, 183, 346, 389
Cisneros Group, 158
Citibank, 220
Citicorp, 324
Citigroup, 321, 346, 381, 384
Clark, Ltd., 491
ClientLogic, 118
Clorox, 174, 415
CNA Life, 7
Coca-Cola, 14, 69, 206, 210,
212, 322, 337, 443
Cognos, 148
Colgate-Palmolive Company,
217–218, 220, 222, 226
Columbia/HCA Healthcare
Corp, 380
Comcast, 118, 173
Compaq, 442
ConAgra, 412
Connect Co., 107
Contact USA, 60
Continental Airlines, 454–455
Corning Glass, 237
Corrugated Supplies, 304, 309
Costco Wholesale, 127
C.V. Starr & Co., 491
D
DaimlerChrysler, 95–96, 141,
321, 323, 343
Dayton/Hudson, 389
Dean Witter Discover & Co.,
482–483, 493
Dell Computer Corporation, 7,
9, 222, 251, 256–257
Deloitte Touche, 484
Delphi Corp., 208
Deluca, 43
Denmark’s Lego, 60
Deutsche Telecom, 210
Dillard’s, 389
Direct TV, 118
Discovery Channel, 489–490
Disney, 311
Dodge, 96
Domino’s Pizza, 212
Donnelly Corporation, 192
Dow Chemical, 110, 296
DreamWorks, 443
DuPont Co, 378
Corporate Name Index
610
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

E
East Tennessee Healthcorp
(ETH), 512
Eaton Corporation, 215, 218
eBay Inc., 11, 26, 65, 92, 184,
295–296, 325–326, 368,
400, 443, 490, 505
Eckerd, 159
Edward Jones, 65
Eileen Fisher, 387
Electrolux, 380, 442
Electronic Data Systems (EDS),
100, 327–328, 420
Eli Lilly & Co., 210, 405, 407
EMC, 144
Emerald Packaging, 379
Emerson Electric, 337
Empire Blue Cross and Blue
Shield, 493
Encyclopaedia Britannica,
457–458
Englander Steel, 111–113
Enron Corporation, 8, 58, 161,
189, 343, 360, 365, 379,
384, 419
Esso, 341
Ethics Officer Association, 383
Ethics Resource Center, 383
Eureka Ranch, 409
Exxon, 324
F
Fast-Data, 236
Federal Bureau of Investigation
(FBI), 383
Federal Reserve Board, 455
FedEx Corporation, 65, 183
Fiat Auto, 117
Financial Services., 100
Flextronics, 181
Ford Motor Company, 6, 72,
89, 100, 114, 121–122,
141, 156, 171, 184,
207–208, 212, 225, 257,
260, 299, 341, 416, 506
Forrester Research, 314
Four Seasons Hotels, 64, 75
France Telecom SA, 137
Frankfurter Allgemeine Zeitung,
140
Frito-Lay, 152, 299, 351,
412
Fujitsu, 152
Funk & Wagnalls, 457
G
Gap, 455
Gardetto, 409
Gartner Group, 314
Gateway, 389
Gayle Warwick Fine Linen,
206
Genase, 410
Genentech, 188
General Electric (GE), 69, 84,
104, 171–172, 180, 237,
261, 296, 325, 343, 385,
406, 411, 442
General Electric (GE) Salisbury,
114–116
General Mills, 381
General Motors, 59, 72–73, 96,
110, 117, 183–184, 208,
245, 264, 276, 310, 321,
337, 341, 399, 416, 484,
506
General Shale Brick, 141
Genesco, 149
Geo Services International, 211
Gerber, 415
GID, 254
Gilead Sciences, 324
Gillette Company, 212, 461–462
Girl Scouts, 6, 107
GlaxoSmithKline, 323
Global Crossing, 380
GlobalFluency, 176
Goldsmith International, 173
Goldwater, 389
Goodyear, 506
Google, 13–14, 26, 65, 184,
326–327, 368, 401, 403
Governance Metrics
International, 377
Gruner + Jahr, 205
Guess, 311
Guidant Corporation, 486
Guiltless Gourmet, 152
H
Häagen Dazs, 416
Halliburton, 384
Haloid Company, 3
Harley-Davidson Motorcycles,
64, 180
Harrah’s Entertainment Inc.,
292, 298, 455
Harris Interactive and the
Reputation Institute, 189,
202
Hasbro, 145
HCA, 498
HealthSouth Corp., 419, 509
Heineken Breweries, 14, 224
Heinz, 337
Hewlett-Packard, 5–6, 107, 173,
251, 442
Hewlett-Packard’s Medical
Products Group, 98
Hilton Hotels Corp., 298
Holiday Inn, 11, 191
Hollinger International, Inc.,
492
Home Depot, 7, 66, 157, 326,
455, 498
Honda Motor Company, 60,
192, 209, 257, 260, 408
Honest Jim, 379
Honeywell Garrett Engine
Boosting Systems, 306
Honeywell International, 144
Hudson Foods, 48
Hudson Institute, 386
Hugh Russel Inc., 196–197
Hughes Electronics, 118
I
IBM, 4, 6, 14, 156, 158, 184,
222, 251, 327, 340, 365,
368, 402, 411, 420
ICiCI Bank, 211
IKEA, 380
Imagination Ltd., 98
ImClone Systems, 8
Imperial Oil Limited, 341
INCO, 512–513
Indiana Children’s Wish Fund,
12
INSEAD, 512
Intel Corp., 173, 472
InterCel, Inc., 392
Interface, 380
Internal Revenue Service, 60,
106
International Association of
Machinists (IAM), 506
International Shoe Company,
432
International Standards
Organization, 387
International Truck and Engine
Corporation, 171
Interpol, 320
Interpublic Group of
Companies, 321
Interstate Bakeries, 443
ITT Industries, 296
J
J & J Consumer Products, 106
J. M. Smucker & Co., 359
J. Sainsbury’s, 117
J&R Electronics, 309
Jaguar Automobiles, 64
J.C. Penney, 368–369
J.D. Edwards, 94
Jeep, 96
JetBlue Airways, 14, 31, 138,
146, 372
Johnson & Johnson, 57–58, 96,
104, 106–107, 172, 189,
322, 325–326, 381
K
Kaiser-Hill, 347
Karolinska Hospital, 104
Keiretsu, 211
Kennedy Foods, 412
KFC, 484
Kimberly-Clark, 414
Kingston Technology Co., 382
Kmart, 66, 144, 337, 389
Kodak, 67
KPMG Peat Marwick, 288
Kraft, 140, 412
Kroger, 61, 140
Kryptonite, 145
L
Lamprey Inc., 436
Lands End, 173
Learjet, 159
Lehigh Coal & Navigation, 184
Les Schwab Tire Centers,
361–362
Levi Strauss, 178, 416
Li & Fung, 311
Liberty Mutual’s, 59
Limited, The, 311
Lockheed Martin, 161, 384, 410
Lockport, 300
Long Island Lighting Company
(LILCO), 473
L’Oreal, 210
Lotus Development Corp., 156
LTV Corp., 111
Lufthansa, 64
M
MacMillan-Bloedel, 380
Make-a-Wish Foundation, 107
MAN Nutzfahrzeuge AG, 171
Marriott, 420
Marshall Field’s, 446–447
Mary Kay Cosmetics Company,
364
Mathsoft, Inc., 73
Matsushita Electric, 210, 230
Mattel, 145, 187
Maytag, 442
Mazda, 257
McDonald’s, 67, 107, 157,
186–187, 208, 222, 261,
263, 278–279, 288, 293,
380, 415, 470, 484
MCI, 157
McKinsey & Company, 9, 338
McNeil Consumer Products, 106
Medtronic, 59
Memorial Health Services, 288
Mercedes, 96, 179
Merck, 184, 188, 210, 324
Merrill Lynch & Co., 380, 503
Micro Modeling Associates
(MMA), 313
Microsoft Corporation, 7,
12–13, 66, 106–107,
159–160, 172–173, 178,
180–181, 330, 334, 360,
399, 403, 457
Milacron Inc., 366
Miller, 179
Milliken & Co., 401
Mindfire Interactive, 309
Mitsubishi, 96, 179, 421
Mittal Steel, 111
Mobil, 324
Moen, 416
Monsanto, 380
Corporate Name Index 611
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

Montgomery-Watson Harza
(MWH), 303
Morgan, Lewis & Bockius LLP,
346
Morgan Stanley, 482–483, 493
Morton Automotive Safety, 255
Motek, 450
Motorola, 100, 137, 156, 183,
208, 292, 296, 328
MTV Japan, 186
MTV Networks, 211
MusicNet, 462
Musidor, 7
N
Nabisco, 351
National Industrial Products,
390
Neale-May & Partners, 176
Neoterik Health Technologies
Inc., 141
Nestlé, 104, 140, 210, 216–217,
220
Netflix, 344
New Line Cinema, 58
New York Stock Exchange,
493
Newport News Shipbuilding, 13
Nextel, 157
Nike, 149, 174, 299, 329–330
Nissan, 60, 257, 443
Nokia, 137, 145, 222, 399
Nordstrom Inc., 365–366
Nortel Networks, 183, 343
Northrup Grumman Newport
News, 13, 383
Northwest Airlines, 455
Norwest, 156
Novartis, 209
Novell, 328
Nucor, 66
NUMMI, 409
O
Ogilvy & Mather, 141–142,
213
Oksuka Pharmaceutical
Company, 409
Olive Garden, 288
Olmec Corporation, 187
Omega Electronics, Inc.,
165–167
Omnicom Group, 321
Omron, 386
Oracle Corporation, 94, 211,
366, 419
Orange SA, 137
Oregon Brewers Guild, 179
Ortho Pharmaceuticals, 106
Oshkosh Truck Company, 257
Oticon Holding A/S, 30
Owens Corning, 346
Oxford Plastics Company,
195–196
P
Pacific Edge Software, 370
Paramount Pictures, 66–67,
452–453
P.B. Slices, 412
PeopleSoft Inc., 94, 366
PepsiCo. Inc., 106, 220, 330,
443, 468
Perdue AgriRecycle, 48
Perdue Farms Inc., 39, 41–49
Pfizer Inc., 179, 210, 412
Philips Corporation, 409
Philips NV, 230–231
Piper Alpha, 252
Pitney Bowes Credit Corporation
(PBCC), 304, 370–371
Planters Peanuts, 96
PPG Industries, 381
Pratt & Whitney, 84
Pret A Manger, 262–263
Pricewaterhouse-Coopers, 338,
484
Princeton, 140
Printronix, 251
Procter & Gamble (P&G), 110,
174, 178, 182, 206, 212,
224, 226, 230, 254, 276,
306, 321–322, 351, 399,
402, 414–415
Progressive Casualty Insurance
Company, 113–114, 261,
287, 298
Prudential plc, 211
Publicis Groupe, 321
PulseNet, 310
Puma, 65
Purafil, 209–210
Purvis Farms, 41
Q
Quaker Oats, 416
QuikTrip, 31
Quizno’s, 187
R
RCA, 412
Reynolds Aluminum Company,
139
Rhodes Industries (RI), 236
Ricoh, 4
Ritz-Carlton Hotels, 261, 346
Robex Resources Inc., 211
Rockford Health Systems, 485
Rockwell Automation, 171, 253
Rockwell Collins, 248
Rolling Stones Inc., 6–7
Rowe Furniture Company,
152–153
Royal Dutch/Shell, 154, 210,
326
Royal Philips Electronics, 118
Rubbermaid, 178
Russell Stover, 416
Ryanair, 64–65, 138
S
S. C. Johnson Company, 330
Safeway, 61
Saks Fifth Avenue, 389
Salisbury State University, 39, 42
Samsung Electronics, 7, 137,
209
Saturn, 172
Salvation Army, The, 11,
337–338
SBC Communications, 157, 173
Scandic Hotels, 380
Schering-Plough, 159, 188
SDC (Secure Digital Container)
AG, 186
Shazam, 185–186, 330
Shell Oil, 154, 210, 326
Shenandoah Farms, 41
Shenandoah Life Insurance
Company, 405
Shenandoah Valley Poultry
Company, 41
Shoe Corporation of Illinois
(SCI), 432
Short Brothers, 159
Siebel Systems, 368
Siemens AG, 95, 137, 210, 220,
251
Simpson Industries, 390–391
Sony Connect, 223
Sony Corp., 7, 67, 69, 107, 118,
174, 210, 222–223, 225,
493
Sony Pictures Entertainment, 493
Southwest Airlines, 138, 146,
342, 455
Sprint, 7, 157, 210
SPS, 299
St. Luke’s Communications Ltd,
342, 428
Standard Brands, 351
Starbucks Coffee, 11, 55–56, 64,
400, 404, 451
State Farm, 58, 59, 287
Steelcase Corp, 361
Steinway & Sons, 264
Studebaker, 184
Suburban Corrugated Box Co.,
304
Subway, 187, 278–279
Süddeutsche Zeitung, 141
Sun Microsystems, 178, 183,
389
Sun Petroleum Products Corpora-
tion (SPPC), 120–121
Sunflower Incorporated, 351
Swissair, 138
T
Taco Bell, 262, 484
Target, 66, 127, 157, 173, 444
Techknits, Inc., 253
Technological Products, 165
TechTarget, 370
Telecom France, 210
Tenet Healthcare, 498
Tesco.com, 308–309, 359
Texas Instruments (TI), 384, 410
Thomson Corporation, 78
3Com Corporation, 347
3M Corporation, 60, 296, 337,
365, 368, 399–400, 407,
410–411, 472
Time Incorporated, 412
Time Warner, 323, 389
TiVo Inc., 118–119, 142
Tommy Hilfiger clothing, 64
TopDog Software, 235–236
Toshiba, 118, 152
Tower Records, 137
Toyota Motor Corporation, 60,
141, 180, 208–209, 255,
321, 399, 404, 409, 414
Toys “R” Us, 174, 387, 455
Transmatic Manufacturing Co.,
208
Travelers, 324
Tupperware Corp., 444, 504
Tyco International, 419
U
Ugli Orange, 199
Unilever, 110, 210, 230
United Air Lines, 138
United Parcel Service (UPS), 12,
22, 246, 333–334, 339,
404, 409
Universal Pictures, 467
Unocal, 149
U.S. Airways, 138
USA Technologies Inc., 158
USX, 506
V
Vanguard, 261
Van’s Aircraft, 254
Verizon Communications, 148,
157, 184, 294
Versace, 157
Viacom Entertainment Group,
453
Virgin Atlantic Airways, 322
Virgin Digital, 462
Virginia Company, 12
Volkswagen, 183, 222, 245
Volvo, 141, 276
W
W. L. Gore & Associates, Inc.,
21–22, 411, 415
Wal-Mart, 21–23, 47, 61, 64,
66, 127, 138, 144–145,
156–157, 159–160, 178,
184, 189–190, 195, 210,
212, 220, 226, 293, 298,
306, 321–322, 325–326,
337, 359, 365, 389, 467,
469, 498
612 Corporate Name Index
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
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Walker Research, 377
Walt Disney Company, 364
Warner-Lambert, 179, 210
Weber, 333
Wegmans Food Markets,
60–61, 139, 369
Wells Fargo Bank, 156,
346
Wendover, 100
Wendy’s, 187
Western Railroad, 91
Weyerhaeuser, 208, 299
Wheeling-Pittsburgh Steel Corp.,
506
Wherehouse, 137
Whirlpool, 148, 180, 442
Wienerberger Baustoffindustrie
AG, 141
Windsock, Inc., 352–353
Wipro Ltd., 7, 208
Wizard Software Company, 98–99
Wood Flooring International
(WFI), 288
Woolworth, 184
WorldCom, 161, 189, 343, 380,
384, 419
WPP Group, 321
WuXi Pharmatech, 140
Wyeth, 159
X
X-Rite Inc., 421–422
Xerox Corporation, 3–6, 10, 12,
15–17, 24, 31, 67, 107,
350, 380, 493, 506
Y
Yahoo!, 223, 462, 505
Z
Ziff-Davis, 409
Corporate Name Index 613
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Subject Index
614
A
Absorption, 497
Abu Ghraib prison, abuses at,
336
Acceptance, 425
Achieving competitive
advantage, 416–417
Acquisition, 156
Adaptability culture, 368
Adaptive versus nonadaptive
corporate cultures, exhibit,
374
Administrative principles, 25–26
Adoption, 406
Advanced manufacturing
technology, 253
Adversaries to partners, 180–183
Advocate, 410
Agile manufacturing, 253
Ambidextrous approach, 407–408
Authority, 489
Authorization, 459
Automated teller machines
(ATMs), 274
B
Balance sheet, 294
Balanced scorecard, 296–298,
312
major perspectives of the,
exhibit, 297
Bargaining, 459
Barriers to change, 426
Bayesian statistics, 454
Benchmarking, 192, 296
Better decision making, 226
Blinded stage, 344, 346
Blogs, 141
Boeing 787, 415
Bootlegging, 411
Bottom line, 295
Boundary spanning, 17, 413–414
roles, 148
Bounded rationality perspective,
448
constraints and tradeoffs,
449–451
role of intuition, 451–453
Budget, 294
Buffering roles, 147
Bureaucracy, 26, 332–333
Weber’s dimensions of,
exhibit, 332
Bureaucracy in changing world,
335
flexibility, innovation,
organizing temporary
systems for, 336–337
other approaches to reducing,
337–339
Bureaucratic control, 339–340,
349
Bureaucratic culture, 369–370
Bureaucratic organizations, 26
Burox, 3–4
Business intelligence, 148, 289
Business process indicators, 298
Business process reengineering,
113
C
CAD. See Computer-aided
design (CAD)
CAM. See Computer-aided
manufacturing (CAM)
Capital-intensive, service firms,
260
Carnegie model, 453, 456–459,
463, 467
choice processes in the,
exhibit, 457
of decision making, 500
Centralization, 334
Centralized decision making,
104
Ceremonies, 363–365
Chaebol, 211
Chain of command, 100
Change
elements for successful,
405–407
process, 405
stages of commitment to,
exhibit, 425
Change agent, 410
Change leaders, 426
Change, strategic role of
incremental versus radical
change, 400–402
strategic types of change,
402–405
Change, strategies for
implementing, 424
barriers to change, 426
leadership for change,
425–426
techniques for
implementation, 426–429
Chaos theory, 27
Charismatic authority, 340
Clan control, 341–343, 349
Clan culture, 369
Closed system, 14
Coalition, 456
Code of ethics, 384
Coercive forces, 191–192
Coercive power, 489
Collaborative networks, 178
adversaries to partners,
180–183
why collaboration, 179
Collective bargaining, 507
Columbia space shuttle disaster,
336, 467
Commitment, 426
Communication and
coordination, 268
Companies without walls, 416
Comparison of organizational
characteristics associated
with mass production and
flexible manufacturing
systems, exhibit, 259
Competing values model, 75
Competition, 484
Competitive intelligence (CI),
148
Complex, stable environment,
145
Complex, unstable environment,
145
Computer-aided craftsmanship,
257
Computer-aided design (CAD),
254
Computer-aided manufacturing
(CAM), 254
Computer simulations, 454
Computer-integrated
manufacturing, 253
Concurrent engineering, 416
Configuration and structural
characteristics of service
organizations versus
product organizations,
exhibit, 262
Confrontation, 506
Consortia, 211
Constraints and tradeoffs,
449–451
Constraints and tradeoffs during
nonprogrammed decision
making, exhibit, 449
Contemporary applications
flexible manufacturing
systems, 253–254
lean manufacturing, 254–257
performance and structural
implications, 257–258
Contemporary organization
design, 27–28
Contextual dimensions of
organization design, 17,
21–22
Contingency, 27
Contingency decision-making
framework
contingency framework,
468–470
problem consensus, 467–468
technical knowledge about
solutions, 468
Contingency effectiveness
approaches, 70
goal approach, 71–73
internal process approach,
74–75
measurement of, exhibit, 71
resource-based approach,
73–74
Contingency framework,
468–470
for using decision models,
exhibit, 469
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
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Contingency framework for
environmental uncertainty
and organizational
responses, exhibit, 155
Continuous improvement, 399
Continuous-process production,
249
Control mechanisms, 350
Conversion rate, 295
Cooptation, 158
Coordination and control,
cultural differences in
national value systems, 227
three national approaches to
coordination and control,
227–230
Coordination and control, three
national approaches to, 227
European firms’ decentralized
approach, 229
Japanese companies
centralized coordination,
228–229
United States coordination
and control
formalization, 229–230
Coordination roles, expanded,
225–226
Core organization
manufacturing technology
manufacturing firms,
248–250
performance, 250–253
strategy, 250–253
technology, 250–253
Core organization service
technology
designing the service
organization, 262–263
service firms, 259–260
Core technology, 246
Core transformation process for
a manufacturing company,
exhibit, 246
Corporate culture and ethics in a
global environment,
386–387
Corporate Culture and
Performance, 372
Corporate entrepreneurship,
410–411
Corrugated system in action, 305
Cost savings, 226
Council on Economic Priorities
Accreditation Agency, 387
Country managers, 226
Craft technologies, 265
Creative departments, 409
Creativity, 405
Crisis stage, 345
Cultural Assessment Process
(CAP), 372
Culture, 361
emergence and purpose of,
361–363
interpreting, 363–367
levels of corporate, exhibit, 362
Culture and ethics, how leaders
shape
formal structure and systems,
382–385
values-based leadership,
381–382
Culture change
forces for, 420
organization development
culture change
interventions, 422–423
Culture changes, 404
Culture strength, 370–371
Customer relationship
management (CRM), 235,
306
Customer service indicators,
297–298
Customized output, 261
D
Data, 301
Data mining, 290
Data warehousing, 289
Decentralization, 267
Decentralized decision making,
93, 104
Decentralized organizational
structures, 310
Decision interrupts, 458
Decision learning, 472
Decision making and control,
information for
balanced scorecard, 296–298
feedback control model, 293
management control systems,
293–296
organizational decision-
making systems, 291–293
Decision making in today’s
environment, exhibit, 444
Decision mistakes and learning,
472
Decision process when problem
identification and problem
solution are uncertain,
exhibit, 463
Decision support system (DSS),
293
Defender strategy, 66–67
Department design, 266
communication and
coordination, 268
decentralization, 267
formalization, 267
span of control, 268
worker skill level, 267–268
Departmental grouping options
divisional grouping, 100
functional grouping, 100
horizontal grouping, 102
multifocused grouping, 100
virtual network grouping, 102
Design, 459
Designing the service
organization, 262–263
Desktop search, 403
DIAD (Delivery Information
Acquisition Device), 333,
404
Diagnosis, 459
Differences between large and
small organizations,
exhibit, 323
Differences between manu-
facturing and service
technologies, exhibit,
260
Differences in goals and
orientations among
organizational departments,
exhibit, 150
Differentiation, 149–151
strategy, 64
Digital downloading, 344
Digital workplace, 9
Dilemmas of large (organization)
size, 322–326
big-company/small-company
hybrid, 324–326
large, 322–323
small, 323–324
Direct interlock, 158
Disclosure mechanisms,
383–384
Dissolution stage, 345
Distributive justice, 378
Diversity, 9, 421
Division of labor in the
ambidextrous organization,
exhibit, 408
Divisional organization
structure, 104–107
Divisional structure, 269
DMAIC (Define, Measure,
Analyze, Improve, and
Control), 296
Domestic hybrid structure with
international division,
exhibit, 214
Domestic stage of international
development, 209
Dual-authority structure in a
matrix organization,
exhibit, 109
Dual-core approach
administrative core, 417–418
organization change, exhibit,
418
technical core, 417–418
E
E-business organization design,
307–309
Economic conditions, 140
Economies of scale, 207
Economies of scope, 207–208
Effect of ten mega-mergers on
shareholder wealth, exhibit,
324
Effectiveness, 22, 70
Efficiency, 22, 70
Efficient performance versus
learning organization
competitive to collaborative
strategy, 31
formal control systems to
shared information,
30–31
rigid to adaptive culture, 31–32
routine tasks to empowered
roles, 30
vertical to horizontal
structure, 28–30
Element in the population
ecology model of
organizations, exhibit, 185
Engineering technologies, 265
Enhanced network structures,
311
Enterprise resource planning
(ERP), 299–300
Environmental decline
(competition), 344
Environmental domain
general environment,
140–141
international context,
141–142
task environment, 138–140
Environmental domain,
controlling the
change of domain, 159
illegitimate activities, 160–161
political activity, 159–160
regulation, 159–160
trade associations, 160
Environmental resources,
controlling
controlling the environmental
domain, 159–161
establishing interorganizational
linkages, 156–159
organization-environment
integrative framework,
161
Environmental uncertainty, 142
framework, 145–146
and organizational
integrators, exhibit, 151
Simple–complex dimension,
143–144
Stable–unstable dimension,
144–145
Environmental uncertainty,
adapting to
buffering and boundary
spanning, 147–149
differentiation, 149–151
forecasting, 152–154
integration, 149–151
organic versus mechanistic
management processes,
151–152
planning, 152–154
positions and departments,
147
responsiveness, 152–154
Escalating Commitment, 473
Subject Index 615
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Essential leadership behaviors,
325
Establishing interorganizational
linkages
advertising, 158–159
cooptation, 158
executive recruitment, 158
formal strategic alliances,
157–158
interlocking directorates,
158
ownership, 156–157
public relations, 158–159
Ethical dilemma, 377
Ethical framework, 378
Ethical values and social
responsibility
does it pay to be good,
377–378
managerial ethics and social
responsibility, 375–377
sources of individual ethical
principles, 374–375
Ethical values in organizations,
sources of
external stakeholders,
380–381
organizational culture, 379
organizational systems,
379–380
personal ethics, 378
Ethics, 374
Ethics committee, 383
Ethics hotlines, 383
Ethics officer, 383
European Production Task
Force, 224
European Union (EU)
environmental and
consumer protection
legislation, 140
Evolution, 184
Evolution of organizational
applications of IT, exhibit,
290
Example of an ERP network,
exhibit, 300
Excessive focus on costs, 426
Execution, 325
Executive dashboards, 294
Executive information system
(EIS), 292
Expert power, 489
Explicit knowledge, 301
External adaptation, 362
External stakeholders, 380–381
Extranet, 304
F
Factors of production, 208
Factory of the future, 253
Failure to perceive benefits, 426
Famous innovation failures, 415
Fast cycle teams, 416
Faulty action stage, 345–346
Fear of loss, 426
Federal Aviation Administration,
372
Federal Bureau of Investigation
(FBI), 24
Feedback control model, 293
Financial perspective, 297
Financial resources, 141
Five basic parts of an
organization, exhibit, 16
Flexible manufacturing systems
(FMS), 253
FMS. See Flexible manufacturing
systems (FMS)
Focus strategy, 65
Focused differentiation, 63
Focused low cost, 63
Food and Drug Administration
(FDA), 188
Forces driving the need for
major organizational
change, exhibit, 401
Forces for culture change
diversity, 421
horizontal organizing, 420
learning organization, 421–422
reengineering, 420
Forces that shape managerial
ethics, exhibit, 379
Forecasting, 152–154
Formal structure and systems, 382
code of ethics, 384
disclosure mechanisms,
383–384
structure, 383
training programs, 384–385
Formalization, 267, 334, 337
Four stages of international
evolution, exhibit, 209
Four types of change provide a
strategic competitive wedge,
exhibit, 404
Framework, 145–146
Framework for assessing
environmental uncertainty,
exhibit, 146
Framework for department
technologies, exhibit, 265
Framework for this book,
exhibit, 35
Framework of interoganizational
relationships, exhibit, 176
Functional, divisional, and
geographical organization
designs
divisional structure, 104–107
functional structure, 102–104
functional structure with
horizontal linkages, 104
geographical structure,
107–108
Functional managers, 225
Functional matrix, 110
Functional organization
structure, 102–104
G
Garbage can model, 453, 467
consequences, 464–467
organized anarchy, 463
streams of events, 464
General organization
environment, 140–141
Generalist strategy, 187
Geographical organization
structure, 107–108
Geographical structure for Apple
Computer, exhibit, 108
Global arena, entering
global expansion through
international strategic
alliances, 210–211
motivations for global
expansion, 206–209
stages of international
development, 209–210
Global Body Line System, 399
Global capabilities, building
global coordination
mechanisms, 224–226
global organizational
challenge, 220–224
Global companies, 210
Global coordination mechanisms
expanded coordination roles,
225–226
global teams, 224–225
headquarters planning, 225
Global economy as reflected in
the Fortune Global 500,
exhibit, 207
Global expansion
motivations for, 206–209
through international strategic
alliances, 210–211
Global geographical division
structure, 215–217
Global hybrid, 220
“Global Leadership 2020”
management program, 386
Global Leadership and
Organizational Behavior
Effectiveness (Project
GLOBE), 227
Global matrix structure, 218–220
Global organizational challenge,
220
exhibit, 221
increased complexity and
differentiation, 221–222
innovation, 223–224
need for integration, 222–223
transfer of knowledge,
223–224
Global product division
structure, 215
Global stage of international
development, 210
Global standardization, 211
Global teams, 224–225
Globalization strategy, 211–212
Goal approach, 70
indicators, 71
usefulness, 71–73
Goals, 62
Goodwill, 360
Government sector, 140
Greater revenues, 226
Gross domestic product (GDP),
221, 253
H
Hawthorne studies, 26
Headquarters planning, 225
High-velocity environments,
471–472
Horizontal coordination model,
413, 415–416
boundary spanning, 413–414
for new product innovations,
exhibit, 414
specialization, 413
Horizontal information linkages
direct contact, 96
full-time integrator, 96–97
information systems, 95
task forces, 96
teams, 97–99
Horizontal linkage, 95
model, 416
Horizontal organization
structure, 113
characteristics, 114–116
exhibit, 115
strengths, 116–117
strengths, exhibit, 116
weaknesses, 116–117
weaknesses, exhibit, 116
Horizontal organizing, 420
Horizontal relationships, 306
Horizontal sources of power
power sources, 495–498
strategic contingencies, 495
Human relations emphasis, 77
Human resources sector, 140
Hurricane Katrina, 322
Hybrid, 100
Hybrid organization structure,
120–122
I
I ♥ Huckabees, 466
Idea champions, 410
Idea incubator, 409
Ideas, 405
Illustration of independent
streams of events in the
garbage can model of
decision making, exhibit,
465
Imitation, 470
Immigration and Naturalization
Service (INS), 48
Implementation, 406
Improved horizontal
coordination, 310
Improved interorganizational
relationships, 310–311
In-house division, 307
Inaction stage, 344, 346
Incident command system (ICS),
336, 348
Incident commander, 337
Income statement, 294
Increased innovation, 226
Incremental change, 400
Incremental decision process
model, 453, 467
development phase, 459
616 Subject Index
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

dynamic factors, 459–462
exhibit, 460
identification phase, 458
selection phase, 459
Incremental process model, 463
Incremental versus radical
change, 400–402
Indirect interlock, 158
Individual decision making
bounded rationality
perspective, 448–453
rational approach, 445–448
Individual versus organizational
power, 489
Industry sector, 138
Information, 301
Information linkages, 306
Information-processing
perspective on structure,
91–92
horizontal information
linkages, 95–99
vertical information linkages,
93–95
Information reporting system,
291
Information systems for
managerial control and
decision making, exhibit,
292
Information technology
evolution, 289–291
Initiative for Software Choice
(ISC), 160
Inspiration, 470
Institutional environment, 188
Institutional isomorphism, 191
Institutional perspective, 188
Institutional similarity, 190
coercive forces, 192
mimetic forces, 191–192
normative forces, 192–193
Institutional view, 190
Institutionalism, 188–189
institutional similarity,
190–193
institutional view, 190
organization design, 190
Institutionalization, 426
Intangible output, 259
Integrated effectiveness model,
75
effectiveness values for two
organizations, exhibit, 77
four approaches to
effectiveness values,
exhibit, 76
indicators, 76–78
usefulness, 78–79
Integrated enterprise, 305–306
exhibit, 306
Integration, 149–151, 222
Integration of bricks and clicks,
307
range of strategies for, exhibit,
308
Intellectual capital, 301
Interaction of contextual and
structural dimensions of
organization design,
exhibit, 18
Interdepartmental activities, 423
Interdependence, 230
Intergroup conflict in
organizations
rational versus political
model, 487–488
sources of conflict, 484–487
Interlocking directorate, 158
Internal integration, 362
Internal process approach, 70
indicators, 74
usefulness, 74–75
Internal process emphasis,
76–77
International business
development group, 217
International division, 214–215
International sector, 140
International stage of inter-
national development, 209
Interorganizational framework,
176–177
Interorganizational relationships,
172
changing characteristics of,
exhibit, 180
Interpreting culture
ceremonies, 363–365
language, 366–367
rites, 363–365
stories, 365
symbols, 365–366
Intranets, 298, 312
Intrapreneur, 410
Intuitive decision making, 451
iPod, 223, 329, 399, 402, 404
ISO 9000 quality-auditing
system, 387
Isomorphism, 190
iTunes, 223, 402, 462
J
J. D. Powers’ 2005 rankings of
consumer satisfaction, 372
Job design, 274–275
Job enlargement, 274
Job enrichment, 274
Job rotation, 274
Job simplification, 274
Joint optimization, 275
Joint ventures, 158
Judgment, 459
K
Kaizen, 399
Key characteristics of traditional
versus emerging
interorganizational
relationships, exhibit, 311
Knowledge, 301
Knowledge management,
300–303
systems, 312
two approaches to, exhibit,
303
L
Labor- and knowledge-intensive,
service firms, 260
Labor–management teams, 506
Lack of coordination and
cooperation, 426
Ladder of mechanisms for
horizontal linkage and
coordination, exhibit, 99
Language, 366
Large-batch production, 249
Large group intervention, 423
Leadership for change, 425–426
Lean manufacturing, 254–257
Learning organization, 28,
421–422
combining the incremental
process and Carnegie
models, 462–463
garbage can model,
463–467
Legitimacy, 189
Legitimate power, 489–490
Levels of analysis in
organizations, 33–34
exhibit, 34
Liaison role, 96
License agreements, 157
Life cycle development, stages of
collectivity stage, 327–328
elaboration stage, 328–329
entrepreneurial stage,
326–327
formalization stage, 328
Linear programming, 454
Liquid Tide, 224, 226, 402,
415
Long-linked technology, 270
Low-cost leadership strategy,
64–65
Low-cost production factors,
208–209
M
Major stakeholder groups and
their expectations, exhibit,
23
Management
changing role of, 174–176
Management champion, 411
Management control systems,
293–296
exhibit, 295
Management information system
(MIS), 291
Management science approach,
453–455
Managerial ethics, 376
Managerial ethics and social
responsibility, 375–377
Manufacturing firms, 248–250
Market control, 340–341, 349
Market sector, 140
Marketing-manufacturing areas
of potential goal conflict,
exhibit, 485
Mass customization, 256
Matrix, 100
Matrix organization structure,
108
conditions for the matrix,
109–110
strengths, 110–113
strengths, exhibit, 111
weaknesses, 110–113
weaknesses, exhibit, 111
Measuring dimensions of
organizations, 38
Mechanical system design,
exhibit, 29
Mechanistic and organic forms,
exhibit, 152
Mediating technology, 269
Membrane-electron assemblies
(MEAs), 411
Merger, 156
Meso theory, 34
Miles and Snow’s Strategy
Typology, 63
analyzer, 67
defender, 66–67
prospector, 65–66
reactor, 67
Mimetic forces, 191–192
Mintzberg’s research, 458
Mission culture, 368–369
Mission statement, 58
Mixed structure, 220
Model to fit organization
structure to international
advantages, exhibit, 213
Modular organization structure,
117
Modular structures, 311
Multidomestic strategy, 211–212
Multinational stage of
international development,
210
Munificence, 142
N
NASDAQ, 346
National Association of
Manufacturers, 160
National responsiveness, 211
National Tooling and Machining
Association (NTMA), 160
National value systems, 227
Natural system design, exhibit,
29
Need, 406
Negotiating strategies, 507
Negotiation, 506
Network coordinator, 226
Networking, 298
New product success rate, 412
probability of, exhibit, 413
New products and services
achieving competitive
advantage, 416–417
horizontal coordination
model, 413–416
reasons for new product
success, 412–413
success rate, 412
New-venture fund, 410
Subject Index 617
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Licensed to:

Niche, 184–185
Non-core departmental
technology
analyzability, 264
framework, 264–266
variety, 264
Non-core technology, 247
Nonprogrammed decisions, 444
Nonroutine technologies, 265
Normative forces, 191, 192–193
NTMA. See National Tooling
and Machining Association
(NTMA)
O
Obeya, 399, 414
Obtaining prior information,
497
Occupational Safety and Health
Administration (OSHA), 48
Office Software Group, 106
Official goals, 58
Open systems, 14–15
emphasis, 76
Operative goals
employee development, 60
innovation and change, 60
market, 60
overall performance, 59–60
productivity, 60–61
resources, 60
Organic versus mechanistic
management processes,
151–152
Organization. See also
Organizational and
Organizations
defined, 10–11
importance of, 12–14
perspectives on, 14–15
types of, 11–12
Organization chart illustrating
hierarchy of authority,
exhibit, 19
Organization chart sample,
exhibit, 91
Organization design, 190
contingency factors affecting,
exhibit, 69
how strategies affect, 67–68
IT impact on, 309–311
other factors affecting, 69
outcomes of strategy, exhibit,
68
pressures affecting, exhibit,
247
Organization design alternatives
departmental grouping
options, 100–102
reporting relationships, 100
required work activities,
99–100
Organization design and culture,
367
adaptability culture, 368
bureaucratic culture, 369–370
clan culture, 369
culture strength and
organizational
subcultures, 370–371
mission culture, 368–369
Organization design, dimensions
of
contextual dimensions, 17,
20–22
performance and effectiveness
outcomes, 22–24
structural dimensions, 17–20
Organization design for
implementing
administrative change,
418–420
Organization design, strategic
direction in, 56–58
top management role in,
exhibit, 57
Organization development
culture change interventions
interdepartmental activities,
423
large group intervention, 423
team building, 423
Organization development (OD),
422, 429
approach, 507
Organization-environment
integrative framework, 161
Organization size
dilemmas of large size,
322–326
pressures for growth,
321–322
Organization structure, 76,
90–91
Organization theory, 34
current challenges, 6–10
topics, 6
Organization theory and design,
evolution of
contemporary design, 27–28
efficient performance vs
learning organization,
28–32
historical perspectives,
25–26
Organizational Assessment
Survey, 373
Organizational atrophy, 343
Organizational behavior, 34
Organizational bureaucracy and
control, 331
bureaucracy, 332–333
size and structural control,
334–335
Organizational change, 405
Organizational characteristics
during the life cycle,
330–331
four stages, exhibit, 331
Organizational configuration
administrative support, 16–17
management, 17
technical core, 16
technical support, 16
Organizational control strategies
bureaucratic control, 339–340
clan control, 341–343
market control, 340–341
three, exhibit, 339
Organizational culture,
371–373, 379
emergence and purpose of
culture, 361–363
interpreting culture, 363–367
Organizational decision making,
443–445
Carnegie model, 456–458
incremental decision process
model, 458–462
management science
approach, 453–455
Organizational decision-making
systems, 291–293
Organizational decline and
downsizing
definition and causes,
343–344
downsizing implementation,
346–348
model of decline stages,
344–346
Organizational departments
differentiate to meet needs
of subenvironments,
exhibit, 150
Organizational differentiation,
149
Organizational domain, 138
Organizational ecosystems,
172
changing role of management,
174–176
exhibit, 175
interorganizational
framework, 176–177
is competition dead, 173–174
Organizational effectiveness,
assessing, 70
Organizational environment, 138
exhibit, 139
Organizational form, 184–185
Organizational goal, 55
Organizational innovation, 405
Organizational learning,
371–373
Organizational life cycle
characteristics during the life
cycle, 330–331
exhibit, 327
stages of life cycle
development, 326–330
Organizational performance,
371–373
Organizational politics, 499
Organizational purpose
goals, importance of, 62
mission, 58
operative goals, 59–61
Organizational responses to
uncertainty, 154
Organizational systems,
379–380
Outsourcing, 117
P
Parallel approach, 416
Percentage of personnel
allocated to administrative
and support activities,
exhibit, 335
Performance, 250–253
and structural implications,
257–258
Performance and effectiveness
outcomes, 22–24
Perrow’s
framework, 277
model, 264
technology framework, 266
Personal ethics, 378
Personal liberty framework, 378
Personnel ratios, 334
Pharmaceutical Research and
Manufacturers of America,
160
Planning, 152–154
PLM. See Product life-cycle
management (PLM)
Point–counterpoint, 472
Political activity, three domains
of, 500
Political model, 487
Political processes in
organizations, 498
definition, 499
when is political activity used,
500
Political tactics for using power,
502–505
Politics, 499
Pooled interdependence, 269,
486
Population, 183
Population ecology, 183
niche, 184–185
organizational form, 184–185
process of ecological change,
185–187
strategies for survival,
187–188
Population-ecology perspective,
183
Porter’s competitive strategies,
63
differentiation, 64
exhibit, 63
focus, 65
low-cost leadership, 64–65
Positions and departments, 147
Power, 488
Power and organizations, 488
horizontal sources of power,
494–498
individual versus
organizational power,
489
power versus authority,
489–490
vertical sources of power,
490–494
Power and political tactics in
organizations, exhibit, 501
618 Subject Index
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:

Power distance, 227
Power sources, 495
centrality, 497
coping with uncertainty,
497–498
dependency, 496
financial resources, 496–497
nonsubstitutability, 497
Power strategies, 178
Power versus authority, 489–490
Preparation, 425
Pressures for (organization)
growth, 321–322
Prevention, 497
Primary responsibility of top
management, 56
Problem consensus, 467–468
Problem identification stage, 443
Problem solution, 443
Problemistic search, 456
Process, 113
Process of ecological change,
187
retention, 186
selection, 185
variation, 185
Product and service changes,
404
Product champion, 411
Product life-cycle management
(PLM), 254
Product matrix, 110
Product structure, 104
Professional partnership, 338
Professionalism, 337
Profit and loss statement (P&L),
294
Programmed decisions, 444
Project GLOBE (Global
Leadership and
Organizational Behavior
Effectiveness), 227
Project SAPPHO, 413
Q
Quality of service, 260
R
Radical change, 401
incremental versus, exhibit,
402
Radio-frequency identification
(RFID), 253
Ratings of power among
departments in industrial
firms, exhibit, 494
Rational approach, 445–448
Rational goal emphasis, 76
Rational-legal authority, 340
Rational model, 487
Rational versus political model,
487–488
Raw materials sector, 139
Reactor strategy, 67
Reasons for new product
success, 412–413
Reciprocal interdependence,
271, 487
Recognition, 458
Reengineering, 113, 420
Referent power, 489
Relationship between
environmental
characteristics and
organizational actions,
exhibit, 162
Relationship between technical
complexity and structural
characteristics, exhibit,
250
Relationship between the rule of
law and ethical standards,
exhibit, 376
Relationship of department
technology to structural
and management
characteristics, exhibit, 267
Relationship of environment and
strategy to corporate
culture, exhibit, 367
Relationship of flexible
manufacturing technology
to traditional technologies,
exhibit, 258
Relationship of organization
design to efficiency
versus learning outcomes,
exhibit, 93
Relationship of structure to
organization’s need for
efficiency versus learning,
exhibit, 123
Reputation Quotient study, 189
Resource-based approach, 70
indicators, 73
usefulness, 73–74
Resource dependence, 154–156
power strategies, 178
resource strategies, 177–178
Resource strategies, 177–178
Resources, 407
Responsiveness, 152–154
Retail Industry Leaders
Association, 160
Retention, 186
Return on net assets (RONA),
196
Reward power, 489
Rites, 363–365
Rites of enhancement, 363
Rites of integration, 363
Rites of passage, 363
Rites of renewal, 363
Role of intuition, 451–453
Routine technologies, 265
Routine versus nonroutine
technology, 266
Rule of law, 375
S
S&P 500, 493
SA 8000 audits, 387
Satisficing, 456
Scientific management, 14,
25–26
Search, 459
Securities and Exchange
Commission (SEC), 3, 380
Selection, 184–185
Self-control, 342
Sequence of elements for
successful change, exhibit,
406
Sequential interdependence, 270,
486
Service firms
definition, 259–261
new directions in services,
261
Service technology, 259
Shoreham Nuclear Power Plant,
473
Simple, stable environment,
145
Simple, unstable environment,
145
Simple–complex dimension,
143–144
Simplified feedback control
model, exhibit, 294
Simultaneous coupling
departments, 416
Simultaneous production and
consumption, 259–260
Site performance data, 295
Six Sigma
goals, 296
quality programs, 192
Size and structural control of
organizational bureaucracy,
334–335
Skunkworks, 410
Small-batch production, 248
Smaller organizations, 309–310
Smart factories, 253
Social Accountability 8000 (SA
8000), 387
Social audit, 387
Social capital, 360
Social responsibility, 376
Social system, 275
Society for Human Resource
Management, 376
Society of Competitive
Intelligence Professionals,
148
Sociocultural sector, 140
Sociotechnical systems,
275–276
model, exhibit, 275
Sources of conflict
differentiation, 485–486
goal incompatibility, 484–485
limited resources, 487
task interdependence,
486–487
Sources of conflict and use of
rational versus political
model, exhibit, 488
Sources of individual ethical
principles, 374–375
Sources of individual ethical
principles and actions,
exhibit, 375
Span of control, 268
Special decision circumstances
decision mistakes and
learning, 472
escalating commitment, 473
high-velocity environments,
471–472
Specialist strategy, 187
Specialization, 413
Spin-off, 308–309
Stable–unstable dimension,
144–145
Stages of decline and the
widening performance gap,
exhibit, 345
Stages of international
development, 209–210
Stakeholder approach, 23
State Farm’s mission statement,
exhibit, 59
Stateless corporations, 210
Steps in the rational approach to
decision making, exhibit,
446
Stickiness, 295
Stories, 365
Strategic business units, 104
Strategic contingencies, 495
Strategic contingencies that
influence horizontal power
among departments,
exhibit, 495
Strategic partnership, 309
Strategic types of change,
402–405
Strategies for survival, 187–188
Strategy, 62, 250–253
Strategy and design, framework
for selecting, 62
Miles and Snow’s strategy
typology, 63, 65–67
organization design,
contingency factors
affecting, exhibit, 69
organization design, how
strategies affect, 67–68
organization design, other
factors affecting, 69
organization design, outcomes
of strategy, exhibit, 68
Porter competitive strategies,
63–65
Strategy and structure change,
404
dual-core approach, 417–418
organization design for imple-
menting administrative
change, 418–420
Strengthening external
relationships, 304
customer relationship
management (CRM), 307
e-business organization
design, 307–309
integrated enterprise, 305–306
Subject Index 619
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Licensed to:

Strengthening internal
coordination
enterprise resource planning
(ERP), 299–300
intranets, 298–299
knowledge management,
300–303
Strengths and weaknesses of
divisional organization
structure, exhibit, 105
Strengths and weaknesses of
functional organization
structure, exhibit, 103
Structural design, applications of
structural alignment, 122–123
symptoms of structural
deficiency, 123–124
Structural design, options for
grouping employees into
departments, exhibit, 101
Structural dimensions of
organization design
centralization, 18
formalization, 17–18
hierarchy of authority, 18
personnel ratios, 20
professionalism, 20
specialization, 18
Structural framework, 90
Structural implications, 272–273
Structural priority, 271–272
Structure, 383
Structure, designing to fit global
strategy
global geographical structure,
215–217
global matrix structure,
218–220
global product structure, 215
international division,
214–215
model for global vs local
opportunities, 211–214
Struggle for existence, 187
Subcultures, 370–371
Subsystems, 15
Supplier arrangements, 157
Supply chain management, 305
Sustainable development, 380
Switching structures, 409
Symbols, 365
System, 15
T
Tacit knowledge, 301
Tactics for enhancing
collaboration, 505–508
Tactics for increasing power,
501–502
Task, 30
Task environment, 138, 143
Team building, 423
Team focus, 427
Teams, 97
Technical champion, 411
Technical complexity, 248
Technical knowledge, 468
Technical system, 275
Techniques for encouraging
technology change, 408
corporate entrepreneurship,
410–411
creative departments, 409
switching structures, 409
venture teams, 410
Techniques for implementation
of change, 426–429
Technology, 250–253
Technology change, 403
ambidextrous approach,
407–408
techniques for encouraging,
408–411
Technology, impact of on job
design
job design, 274–275
sociotechnical systems,
275–276
Terrorist attacks (2001), 336
Technology sector, 141
The Reengineering Revolution,
420
Thompson’s classification of
interdependence and
management implications,
exhibit, 270
Three mechanisms for
institutional adaptation,
exhibit, 191
Time-based competition, 416
Traditional authority, 340
Training programs, 384–385
Transaction processing systems
(TPS), 289
Transformational leadership,
425
Transnational model, 220
of organization, 230–233
Transnational teams, 224
Two hybrid structures, exhibit,
121
Typology of organization rites
and their social
consequences, exhibit, 363
U
Uncertainty avoidance, 227, 426
Using power, politics, and
collaboration, 500
political tactics for using
power, 502–505
tactics for enhancing
collaboration, 505–508
tactics for increasing power,
501–502
Utilitarian theory, 378
V
Values-based leadership,
381–382
Variation, 185
Venture teams, 410
Vertical information linkages
hierarchical referral, 93
rules and plans, 94
vertical information system,
94–95
Vertical information systems, 94
Vertical linkages, 93
Vertical sources of power
control of decision premises,
491–492
formal position, 490–491
information, 491–492
network centrality, 492–493
people, 493–494
resources, 491
Virtual cross-functional
teams, 98
Virtual network organization
structure
how the structure works,
117–118
strengths, 118–120
strengths, exhibit, 119
weaknesses, 118–120
weaknesses, exhibit, 119
Virtual organizations, 211,
311
Virtual team, 98
Vulnerability, 344
W
Web logs, 141, 301
Whistle-blowers, 383
Whistle-blowing, 383–384
Wikis, 301
Windows Group, 106
Win–lose strategy, 507
Win–win strategy, 507
Woodward’s classification of
100 British firms according
to their systems of
production, exhibit, 249
Woodward’s research into
manufacturing technology,
276
Worker Adjustment and
Retraining Notification Act,
347
Worker skill level, 267–268
Workflow interdependence
among departments
structural implications,
272–273
structural priority, 271–272
types, 269–271
Workforce Transition Program,
347
Workforce 2020, 386
Workplace mediation, 507
World Economic Forum’s annual
meeting, 300
World Trade Center attacks of
September 2001, 319
620 Subject Index
Copyright 2007 Thomson Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
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daft05421_0324405421_01.02_frontmatter
Table of Contents
Preface
daft05421_0324405421_03.01_endmatter
Integrative Cases
Integrative Case 1.0: It Isn’t So Simple: Infrastructure Change at Royce Consulting
Integrative Case 2.0: Custom Chip, Inc.
Integrative Case 3.0: W. L. Gore & Associates, Inc. Entering 1998
Integrative Case 4.0: XEL Communications, Inc. (C): Forming a Strategic Partnership
Integrative Case 5.0: Empire Plastics
Integrative Case 6.0: The Audubon Zoo, 1993
Integrative Case 7.0: Moss Adams, LLP
Integrative Case 8.1: Littleton Manufacturing (A)
Integrative Case 8.2: Littleton Manufacturing (B)
Glossary
Name Index
Corporate Name Index
Subject Index

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