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MANAGEMENT RICHARD L. DAFT Va n d e r b i l t U n i v e r s i t y This page intentionally left blank MANAGEMENT RICHARD L. DAFT Va n d e r b i l t U n i v e r s i t y ■ Eighth Edition AUSTRALIA ❚ BRAZIL ❚ CANADA ❚ MEXICO ❚ SINGAPORE ❚ SPAIN ❚ UNITED KINGDOM ❚ UNITED STATES Management, Eighth Edition Richard L. Daft With the assistance of Patricia G. Lane VP/Editorial Director: Jack W. Calhoun Sr. Content Project Manager: Cliff Kallemeyn Art Director: Tippy McIntosh Editor-in-Chief: Melissa Acuña Marketing Manager: Kimberly Kanakes Sr. First Print Buyer: Doug Wilke Sr. Acquisitions Editor: Joe Sabatino Marketing Coordinator: Sarah Rose Photo Manager: John Hill Sr. Developmental Editor: Emma Guttler Newsom Sr. Marketing Communications Manager: Jim Overly Photo Researcher: Rose Alcorn Editorial Assistant: Ruth Belanger COPYRIGHT © 2008, 2005 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Printed in the United States of America 1 2 3 4 5 10 09 08 07 Student Edition ISBN-13: 978-0-324-53770-3 ISBN-10: 0-324-53770-0 Instructor Edition ISBN-13: 978-0-324-54387-2 ISBN-10: 0-324-54387-5 Technology Project Manager: Kristen Meere Internal and Cover Design: John Walker Design Printer: RR Donnelley & Sons Willard, OH ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced or used in any form or by any means— graphic, electronic, or mechanical, including photocopying, recording, taping, Web distribution or information storage and retrieval systems, or in any other manner—without the written permission of the publisher. Library of Congress Control Number: 2007920212 For permission to use material from this text or product, submit a request online at http://www.thomsonrights.com. Thomson Higher Education 5191 Natorp Boulevard Mason, OH 45040 USA For more information about our products, contact us at: Thomson Learning Academic Resource Center 1-800-423-0563 With deep appreciation to Dorothy, the playwright and partner in my life, and to my parents, who started my life toward outcomes that I could not understand at the time. This page intentionally left blank ABOUT THE AUTHOR vii 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. Dr. 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-inChief 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 Organization Theory and Design (South-Western, 2007), The Leadership Experience (South-Western, 2005), and What to Study: Generating and Developing Research Questions (Sage, 1982). He recently published Fusion Leadership: Unlocking the Subtle Forces That Change People and Organizations (BerrettKoehler, 2000, with Robert Lengel). He has also authored dozens of scholarly articles, papers, and chapters. His work has been published in Administrative Science Quarterly, 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. Dr. Daft also is an active teacher and consultant. He has taught management, leadership, organizational change, organizational theory, and organizational behavior. He served as associate dean, produced for-profit theatrical productions, and helped manage a start-up enterprise. He has been involved in management development and consulting for many companies and government organizations, including the American Banking Association, Bell Canada, the National Transportation Research Board, NL Baroid, Nortel, TVA, Pratt & Whitney, State Farm Insurance, Tenneco, the United States Air Force, the U.S. 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. This page intentionally left blank PREFACE Managing in Turbulent Times: Unlocking Innovative Solutions ix Preface In light of the dramatic and far-reaching events of the early twenty-first century, the central theme being discussed in the field of management is the pervasiveness of turbulent change and its impact on organizations. This edition of Management was revised to help current and future managers find innovative solutions to the problems that plague today’s organizations—whether they are everyday challenges or once-in-a-lifetime crises. The world in which most students will work as managers is undergoing a tremendous upheaval. The emergence of crisis management, ethical turmoil, e-business, rapidly changing technologies, globalization, outsourcing, global virtual teams, knowledge management, global supply chains, and other changes place demands on managers that go beyond the techniques and ideas traditionally taught in management courses. Managing in today’s turbulent times requires the full breadth of management skills and capabilities. This text provides comprehensive coverage of both traditional management skills and the new competencies needed in a turbulent environment characterized by economic turmoil, political confusion, and general uncertainty. The traditional world of work assumed the purpose of management was to control and limit people, enforce rules and regulations, seek stability and efficiency, design a top-down hierarchy to direct people, and achieve bottom-line results. To unlock innovative solutions and achieve high performance, however, managers need different skills to engage workers’ hearts and minds as well as take advantage of their physical labor. The new workplace asks that managers focus on leading change, harnessing people’s creativity and enthusiasm, finding shared visions and values, and sharing information and power. Teamwork, collaboration, participation, and learning are guiding principles that help managers and employees maneuver the difficult terrain of today’s turbulent business environment. Managers focus on developing, not controlling, people to adapt to new technologies and extraordinary environmental shifts, and thus achieve high performance and total corporate effectiveness. My vision for the eighth edition of Management is to explore the newest management ideas for turbulent times in a way that is interesting and valuable to students while retaining the best of traditional management thinking. To achieve this vision, I have included the most recent management concepts and research and have showed the contemporary application of management ideas in organizations. I have also added a feature for “new managers” to give students a sense of what will be expected when they become managers. The combination of established scholarship, new ideas, and real-life applications gives students a taste of the energy, challenge, and adventure inherent in the dynamic field of management. The Thomson South-Western staff and I have worked together to provide a textbook better than any other at capturing the excitement of organizational management. I revised Management to provide a book of utmost quality that will create in students both respect for the changing field of management and confidence that they can understand and master it. The textual portion of this book has been enhanced through the engaging, easy-to-understand writing style and the many in-text examples, boxed items, and short exercises that make the concepts come alive for students. The graphic component has been enhanced with several new exhibits and a