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This page intentionally left blank Management PEOPLE / PERFORMANCE / CHANGE This page intentionally left blank Management PEOPLE / PERFORMANCE / CHANGE Luis R. Gomez-Mejia Arizona State University David B. Balkin University of Colorado PRENTICE HALL Boston Columbus Amsterdam Montréal Seoul Indianapolis Cape Town Toronto Singapore Delhi Taipei Dubai New York London Mexico City Tokyo San Francisco Upper Saddle River Madrid Milan Munich Paris ~ Sa o Paulo Sydney Hong Kong Editorial Director: Sally Yagan Editor in Chief: Eric Svendsen Acquisitions Editor: Kim Norbuta Editorial Project Manager: Claudia Fernandes Editorial Assistant: Carter Anderson Director of Marketing: Patrice Lumumba Jones Marketing Manager: Nikki Ayana Jones Marketing Assistant: Ian Gold Senior Managing Editor: Judy Leale Senior Production Project Manager/Supervisor: Lynn Savino Wendel Senior Operations Supervisor: Arnold Vila Operations Specialist: Cathleen Peterson Senior Art Director/Design Supervisor: Janet Slowik Senior Art Director: Kenny Beck Text and Cover Designer: Laura C. Ierardi Cover Art: xc/Shutterstock Editorial Media Project Manager: Denise Vaughn Media Project Manager: Lisa Rinaldi Full-Service Project Management and Composition: Integra Software Services, Inc. Printer/Binder: Courier/Kendallville Cover Printer: Lehigh-Phoenix Color /Hagerstown Text Font: 10/12 Times Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on page 511. Copyright © 2012. Pearson Education, Inc., publishing as Prentice Hall, One Lake Street, Upper Saddle River, New Jersey 07458. All rights reserved. Manufactured in the United States of America. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. To obtain permission(s) to use material from this work, please submit a written request to Pearson Education, Inc., Permissions Department, One Lake Street, Upper Saddle River, New Jersey 07458. Many of the designations by manufacturers and seller to distinguish their products are claimed as trademarks. Where those designations appear in this book, and the publisher was aware of a trademark claim, the designations have been printed in initial caps or all caps. Library of Congress Cataloging-in-Publication Data Gomez-Mejia, Luis R. Management/Luis R. Gomez-Mejia, David B. Balkin. p. cm. ISBN 13: 978-0-13-217640-8 ISBN 10: 0-13-217640-8 1. Management. I. Balkin, David B., 1948- II. Title. HD31.G58955 2012 658—dc22 2010042395 10 9 8 7 6 5 4 3 2 1 ISBN 10: 0-13-217640-8 ISBN 13: 978-0-13-217640-8 to my sons, Vince and Alex, my daughter, Dulce Maria, and my wife, Ana—LG-M to my parents, Daniel and Jeanne—DBB This page intentionally left blank Brief Contents PART 1 Overview Chapter 1 PART 2 The Culture of Management Chapter 2 Chapter 3 Chapter 4 PART 3 132 Managing the Planning Process 132 Decision Making 166 Strategic Management 194 Entrepreneurship and Innovation 230 Managing the Structure and Design of Organizations Human Resource Management 282 Managing Employee Diversity 318 Leadership in Management Chapter 12 Chapter 13 Chapter 14 PART 6 104 Organization Management 254 Chapter 9 Chapter 10 Chapter 11 PART 5 34 Managing in a Global Environment 34 Managing Social Responsibility and Ethics 72 Managing Organizational Culture and Change Management Strategy and Decision Making Chapter 5 Chapter 6 Chapter 7 Chapter 8 PART 4 2 Management and Its Evolution 2 348 Leading and Motivating Others 348 Managing Teams 382 Managing Communication 414 Operations and Information System Management Chapter 15 254 Operations Management and Management Control 444 444 References 471 Glossary 499 Photo Credits 511 Index 513 vii Contents PART 1 Overview Chapter 1 2 Management and Its Evolution 2 Gaining and Losing a Competitive Edge: The Case of the Automobile Companies 2 Management in the New Millennium 4 The Four Management Functions 9 Managerial Roles 10 The Evolution of Management Thought 12 Early Management Thought 12 The Operational Perspective 14 Bureaucratic Management 18 Administrative Management 19 Behavioral Perspective 20 Contemporary Management Perspectives 22 Emerging Perspectives and Issues 24 The Modular Organization 25 The Intangible Organization 25 Concluding Thoughts 25 Focusing on the Future: Using Management Theory in Daily Life Summary of Learning Objectives 28 Discussion Questions 29 26 Management Minicase 1.1: Biz Majors Get an F for Honesty 30 • Management Minicase 1.2: Google: Using a Company’s Culture to Conquer the World 30 • Individual/ Collaborative Learning Case 1.1: Is the United States Falling Behind in Global Brain Race? 31 • Internet Exercise 1.1: Lincoln Electric 32 • Manager’s Checkup 1.1: Self-assessment of Your Own Theory X or Theory Y Orientation 32 PART 2 The Culture of Management Chapter 2 34 Managing in a Global Environment Toys that Travel the World 34 The Environment of International Business The Changing Pattern of International Business 36 36 Major Factors Affecting International Business Entry Strategy 49 Choosing Foreign Countries 49 When to Enter Foreign Countries 50 Scale of involvement 52 Mode of Entry 52 Exporting 53 Turnkey Projects 53 Licensing 54 Franchising 54 Joint Ventures and Strategic Alliances Wholly Owned Subsidiaries 56 Managing the Global Firm 56 viii Selection 58 Training 60 Career Development Compensation 61 61 34 54 44