LECTURE OUTLINE AND LECTURE NOTES

THE WORLD OF WORK

Tony Gets Assigned to a Project (Text pages 144-145)

Tony has been complemented for his work so far as manager of Taco Barn. Of special
note was Tony’s decision to ask Kevin to write a strategic plan for Taco Barn, which was
considered very creative. Tony has now been asked to participate in a company-wide project to
create a leadership development program. He will need Kevin to fill- in his absence. Tony is a bit
nervous to leave his store and unsure of his ability to help determine the culture and future
leadership of the company.

1. From what you know of Tony so far, how would you describe his leadership style? Refer
to page 150 for some suggested classifications of different leadership styles.
Tony’s first managerial experience creating and implementing a staff schedule was done
in an autocratic style, where the leader makes decisions for the group. However, when follow-up
to this exercise was necessary, Tony used a democratic style of leadership, where the manager
guides and encourages a group decision. This illustrates a key concept: the best way to lead today
is using situational leadership, recognizing that effective leadership must draw upon a range of
skills and techniques that depend on the individual situation and not the prescribed leadership
model.

2. How would you describe the organizational culture of Taco Barn?

Taco Barn hires individuals who have the ability to organize and lead in a store setting
where there is a participatory management style based on a small, working environment. In
keeping with this environment of operation, Taco Barn looks to hire and create a culture of
managers/employees that fits into its system. This culture requires hiring, retaining, and
promoting people who are similar to current employees in important ways. A person’s ability to
fit in can be important to the process.

3. Do you think the consultants’ recommendation of an employee survey is a good idea?

Why or why not?
Yes, but with some reservations. If the company is surveying employees and learning
more about their leadership styles with the intent to use this information, the time and resources
to accomplish this would be worthwhile. However, if the survey process becomes more of a
distraction and less productive in nature, the company would be wasting valuable employee time.
For the survey to be successful and useful, a written report needs to be created, outlining the
findings and including a clear message about the purpose and use of the survey.

4. List six questions that you think should be included in the survey.
(1) Define a leader.
(2) Give examples of good leadership skills.
(3) Give examples of how you have been a leader in your job.
(4) Describe the leadership style of your direct boss, regional boss and any corporate
leaders you have been in contact with.
(5) How would you describe each leader individually and the leadership style of the
 company collectively?
(6) What do you like about the leaders you work with or for? What would you change
or add to the leadership of this organization?

LECTURE OUTLINE LECTURE NOTES

I. POWER, AUTHORITY, AND POWERPOINT 6-1

LEADERSHIP Chapter Title
► LEARNING OBJECTIVE 1 (Refers to text page 144)
Define leadership, power, and authority. (Text
page 146)
POWERPOINT 6-2
A. POWER is the ability to influence, Learning Objectives
command, or apply force; a measure of a (Refers to text page 145)

person’s potential to get others to do what

he or she wants them to do, as well as to POWERPOINT 6-3
Power, Authority, and
avoid being forced by others to do what he Leadership
or she does not want to do. (Refers to text page 146)
1. Power can have both a positive and
TEXT FIGURE 6.1
negative form. Sources of Power (Text
a. Positive power results when the page 146)
exchange is voluntary and both
parties feel good about the
exchange. BONUS INTERNET
EXERCISE 6-1
b. Negative power results when the The Most Powerful Women
individual is forced to change. in Business
Each year Fortune magazine
2. Power in organizations can be lists the most powerful
exercised upward, downward, or women in business. This
exercise directs the students
horizontally. to research the list for the
current year. See complete
B. AUTHORITY is legitimate exercise of exercise on page 6.Error:
power, the right to issue directives and Reference source not found
expend resources, related to power but of this manual.
narrower in scope.
1. Authority is a function of position in the
hierarchy, flowing from the top to the
bottom on the organization.
2. An individual can have power without
having formal authority.
C. LEADERSHIP is the ability to influence
people to willingly follow one’s guidance or
LECTURE OUTLINE LECTURE NOTES

adhere to one’s decisions.

1. A LEADER is one who obtains
followers and influences them in
setting and achieving objectives.
2. Leaders use power in influencing
group behavior.

II. LEADERSHIP AND MANAGEMENT POWERPOINT 6-4

► LEARNING OBJECTIVE 2 Leadership and
Discuss leadership as it related to Management
management. (Text page 147) (Refers to text page 147)
A. Leadership and management are not
necessarily the same. LECTURE LINK 6-1
Why Good Employees Can
B. Effective leadership creates a vision of the Be Bad Managers
future. Good technical employees
can make good managers, of
C. Management is the process of planning, course, but many do not. See
organizing, staffing, motivating, and complete lecture link on page
6.Error: Reference source not
controlling through the use of formal found of this manual.
authority.

III. LEADER ATTITUDES

► LEARNING OBJECTIVE 3
Explain leadership attitudes. (Text page 147) TEXT FIGURE 6.2
A. Douglas McGregor developed THEORY X Assumptions About People
(Text page 147)
and THEORY Y attitude profiles, or
assumptions, about the basic nature of
people. POWERPOINT 6-5
Douglas McGregor’s
► LEARNING OBJECTIVE 4 Leadership Theory
Describe the differences between a Theory X
(Refers to text page 147)
and Theory Y manager. (Text pages 147-148)
1. A Theory X leader would likely use
a much more authoritarian style of
leadership than a Theory Y leader.
B. McGregor identified the SELF-
FULFILLING PROPHECY, the relationship
between a leader’s expectations and the
LECTURE OUTLINE LECTURE NOTES
resulting performance of subordinates.
1. If a manager’s expectations are high,
productivity is likely to be high.
2. If a manager’s expectations are low,
productivity is likely to be poor.
PROGRESS CHECK QUESTIONS (Text page 148)
1. Define the terms power, authority, and leadership.
2. Explain the different expectations of Theory X and
Theory Y managers.
3. Would you describe yourself as a Theory X or a
Theory Y manager? Why?
4. Define the self-fulfilling prophecy of management.

ETHICAL MANAGEMENT (Text page 149)

The construction foreman is behind schedule on a building project and has been told by the
president of the company to hire a few illegal immigrants to get the job caught up and avoid missing a
deadline with the client. What action should the foreman take?
Because of the client’s impatience, the next few weeks on the project will be difficult. Your boss
thinks that hiring illegal immigrants could save time and money. However, this is a very unsatisfactory
solution. There is a growing backlash against illegal immigration in this country. Hiring undocumented
workers is illegal in some cities and states. By the time this manual is read, there may even be a federal
law with penalties that cut deep. Remember, it’s not your boss that will be hiring workers, it is YOU.
You are the one who will face the consequences, and there is no guarantee that the owner will stand
behind you if difficulties arise.
Probably your next step should be to discuss the problem with the client to find other ways to
“catch the project up” without suffering any penalties. A discussion with your attorney wouldn’t be a
bad idea, either.

IV. FRAMEWORK FOR CLASSIFYING POWERPOINT 6-6

LEADERSHIP STUDIES Framework for Classifying
Leadership Studies
A. Leadership studies can be classified by (Refers to text page 148)
focus.
1. Focus refers to whether leadership is
studied as a set of traits or a set of BONUS INTERNET
EXERCISE 6-2
behaviors. Self-Assessment for
a. Traits refer to what characteristics Leading as a Manager
An online self-assessment
the leader possesses. tool helps identify leadership
strengths and weaknesses.
b. Behaviors refer to what the leader
LECTURE OUTLINE LECTURE NOTES
does. See complete exercise on
page 6.Error: Reference
2. Approach refers to whether leadership source not found of this
manual.
is studied from a universal or
contingent approach.
a. The universal approach assumes
there is one best way to lead TEXT FIGURE 6.3
regardless of the circumstances. Framework for Classifying
Leadership Studies
b. The contingent approach (Text page 148)
assumes the best approach to
leadership is contingent on the
situation.
B. Trait Theory
1. The TRAIT THEORY stressed what
the leader was like rather than what
POWERPOINT 6-7
the leader did. Trait Theory
2. Some traits do seem to stand out – (Refers to text page 149)
dominance, intelligence, extroversion,
and adjustment – but the differences CRITICAL THINKING
EXERCISE 6-1
are small. Traits of Leaders
3. At best, traits may influence the What traits are common to
great leaders? See complete
capacity to lead. exercise on page 6.Error:
C. Basic Leadership Styles Reference source not found
of this manual.
1. Other studies have focused on the
CRITICAL THINKING
basic leadership styles. EXERCISE 6-2
a. The AUTOCRATIC LEADER Leadership Situations
Different situations call for
makes more decisions for the different leadership styles.
group. This exercise asks students to
identify specific situations.
b. The LAISSEZ-FAIRE LEADER See complete exercise on
allows people within the group to page 6.Error: Reference
source not found of this
make all decisions. manual.
c. The DEMOCRATIC LEADER
guides and encourages the group
to make decisions. TEXT FIGURE 6.4
Relationship Between
2. At first glance, the democratic style Styles of Leadership and
LECTURE OUTLINE LECTURE NOTES
seems the most desirable, but the Group Members
(Text page 150)
evidence is unclear.
D. Ohio State Studies
1. The studies at Ohio State University
were conducted to discover the
behavior of successful leaders.
2. These studies used the LEADER
BEHAVIOR DESCRIPTION
QUESTIONNAIRE (LBDQ,) a
questionnaire designed to determine
what a successful leader does,
regardless of the type of group being POWERPOINT 6-8
Ohio State Studies
led. (Refers to text pages 150-
3. Two leader behaviors appeared 151)
consistently.
a. CONSIDERATION refers to the
leader behavior of showing
concern for individual group
members and satisfying their
needs.
b. INITIATING STRUCTURE refers
to the leader behavior of
structuring the work of group
members and directing the group
toward the achievement of the
group’s goals.
E. University of Michigan Studies
1. The Institute for Social Research of POWERPOINT 6-9
University of Michigan
the University of Michigan conducted Studies
studies of group behavior at the (Refers to text pages 151-
Prudential Insurance Company in 153)
Newark, New Jersey.
2. They found that managers of high-
producing work groups were more
likely to:
LECTURE OUTLINE LECTURE NOTES
a. receive general rather than close
supervision from their superiors
b. like the amount of authority and
responsibility they have in their job
c. spend more time in supervision
d. give general rather than close
supervision to their employees
e. be employee-oriented rather than
production-oriented
3. Supervisors of low-producing work
groups were production-oriented and
gave close supervision.
4. The Institute director, Rensis Likert,
developed four styles of leadership:
a. System 1: exploitative
authoritative
b. System 2: benevolent
authoritative
c. System 3: consultative
d. System 4: participative
5. He concluded that System 4 was the
most effective style of management.
CASE INCIDENT 6.1
Changes in the Plastics Division (Text page 152)

Rusty Means is the general manager of the plastics division of Warner Manufacturing Company
and has had great success in running his department. Rusty has an autocratic management style and the
employees have responded well to his task-orientated operating style. Rusty’s direct boss has just
retired and the new replacement, Wallace Thomas, wants to make changes. Thomas wants to develop a
planning committee and bring employees into the decision-making process. Rusty is not sure how he
will adapt to these changes, especially with the success he enjoys under the former arrangement with his
general manager.

1. What different styles of leadership are shown in this case?

Based on the comments, Ed Sullivan operated using a laissez-faire style in which he allowed
people within the group to make all the decisions. He delegated decision-making power to Rusty Means.
LECTURE OUTLINE LECTURE NOTES
In turn, Rusty ran with an autocratic style of leadership where he made all the decisions for the group.
Now, the newly hired general manager, Wallace Thomas, is trying to involve employees in the decision-
making process using a democratic leadership style, which guides and encourages the group to make
decisions.

2. What style of leadership do you think Wallace will have to use with Rusty?
The management style Rusty has been using (autocratic) is in conflict with the approach
Wallace would like to initiate (more democratic). This creates a difference in styles. Wallace has to
decide whether he wants to impose the new autocratic style of management on Rusty or allow him to
continue using the approach he has previously used. This question is a good discussion starter: is there
one best leadership approach? Why or why not?

3. Do you agree with Rusty? Why or why not?

Rusty has been successful using a task-orientated leadership approach. This style has been well
accepted by the employees and the overall results have been positive. Rusty sees little value in changing
his style of leadership. For these two individuals to operate successfully, Wallace might need to become
more of a situational leader, analyzing what works in this situation. Wallace and Rusty will need to
adjust their styles to some degree, analyzing the benefits and limitations of each method, and find some
middle ground that allows them to work together for the good of the company and department.

4. If “products are produced on schedule and of such quality that few customers complain,” why
should there be any changes?
If the department is working well using Rusty’s autocratic approach, maybe a “if it ain’t broke,
don’t fix it” mindset would be best. However, an autocratic style may be preventing employees from
developing or suggesting improvements. Instead of trying to force Rusty to make major changes right
away, maybe Wallace should spend some time meeting with Rusty, touring the department, asking
questions, getting feedback, etc. Both Rusty and Wallace need to communicate more effectively.

F. The Managerial Grid

1. Robert Blake and Jane Mouton
developed the MANAGERIAL GRID, a TEXT FIGURE 6.5
The Managerial Grid
two-dimensional framework rating a (Text page 154)
leader on the basis of concern for
people and concern for production.
POWERPOINT 6-10
2. The identified five basic styles of The Managerial Grid
management: (Refers to text pages 153-
154)
a. authority-obedience (9,1 position)
b. country club management (1,9
position)
TEXT REFERENCE
c. team management (9,9 position) Career Management Box:
d. impoverished management (1,1 Basics of Career Planning
LECTURE OUTLINE LECTURE NOTES
position) Objectives
A series of questions can
e. organization man management help establish your career
planning objectives. (Box in
(5,5 position) text on page 154.) An
3. The Managerial Grid is intended to additional exercise and
discussion is available in this
help managers learn what their chapter on page 6.Error:
leadership style is and move toward a Reference source not found.
9, 9 team management style.
G. Contingency Approach to Leadership BONUS CASE 6-1
Leading in a Leaderless
1. Research began to focus on the Company
CONTINGENCY APPROACH TO The 21st century may be
unfriendly to leaders who try
LEADERSHIP, which theorizes that to run their companies
different situations and conditions through sheer force of will.
See complete case,
require discussion questions, and
different management approaches. suggested answers on page
6.Error: Reference source not
2. An early style identified by Fred found of this manual.
Fiedler focused on the match between
the leader’s personality and the
TEXT FIGURE 6.6
situation. Fiedler’s Classification of
3. He defined two basic leader Situations
(Text page 155)
personality traits.
a. Task-motivated leaders gain
satisfaction from the performance
POWERPOINT 6-11
of a task. Contingency Approach to
b. Relationship-motivated leaders Leadership
(Refers to text pages 154-
gain satisfaction from 155)
interpersonal relationships.
4. The least preferred co-worker scale
(LPC) was used to measure a
person’s orientation.
a. Relationship-motivated leaders
were presumed to be motivated to
have close interpersonal relations
with others.
b. Task-oriented leaders were
presumed to be motivated to
LECTURE OUTLINE LECTURE NOTES
accomplish the task.
5. Fiedler next developed a favorable-
unfavorable continuum based on three
major dimensions:
a. LEADER-MEMBER RELATIONS TEXT FIGURE 6.7
Leadership Style and
refer to the degree others trust Leadership Situations
and respect the leader and to the (Text page 155)
leader’s friendliness.
b. TASK-STRUCTURE is the degree
to which job tasks are structured.
c. POSITION POWER refers to the
power and influence that go with a
job.
6. These dimensions are graphed in a TEXT FIGURE 6.8
complex eight-celled continuum. Forces Affecting the
Leadership Situation
H. Continuum of Leader Behaviors (Text page 156)

1. Robert Tannenbaum and Warren

Schmidt identified three forces
involved in finding the most effective TEXT FIGURE 6.9
leadership style: Continuum of Leader
Behavior (Text page 156)
a. forces in the manager
b. forces in the subordinate
POWERPOINT 6-12
c. forces in the situation Continuum of Leader
Behaviors
2. They concluded that one style of (Refers to text page 156)
leadership is not effective in all
situations.
I. Path-Goal Theory of Leadership
POWERPOINT 6-13
1. The PATH-GOAL THEORY OF Path-Goal Theory of
LEADERSHIP attempts to define the Leadership
(Refers to text pages 157-
relationships between a leader’s 158)
behavior and the subordinates’
performance and work activities.
a. Leader behavior influences the
motivation of subordinates when
LECTURE OUTLINE LECTURE NOTES
they see it as a step toward future
satisfaction.
b. Behaviors can either increase or
decrease employee expectancies.
2. In path-goal theory, there are four
basic leadership behavior types:
a. role classification leadership
b. supportive leadership
c. participative leadership
d. autocratic leadership
3. Each of these leadership behaviors TEXT FIGURE 6.10
Situational Leadership
results in different levels of Theory
performance and subordinate (Text page 158)
satisfaction.
J. Situational Leadership Theory
1. According to the SITUATIONAL
LEADERSHIP THEORY, as the level
of maturity of followers increases,
structure should be reduced while
socio-emotional support should first
be increased and then gradually
decreased.
2. As followers progress from immaturity
to maturity, the leader’s behavior
should move from:
a. high task-low relationships to →
b. high task-high relationships to →
c. low task-high relationships to →
d. low task-low relationships POWERPOINT 6-14
Transactional,
K. Transactional, Transformational, and Transformational and
Charismatic Leadership
Charismatic Leaders
(Refers to text pages 158-
► LEARNING OBJECTIVE 5 159)
Explain the differences between Transactional,
Transformational, and Charismatic leadership
LECTURE OUTLINE LECTURE NOTES
styles. (Text pages 158-159)
1. Another approach is based on how
leaders and followers influence one CRITICAL THINKING
EXERCISE 6-3
another. Crisis Management
2. Using TRANSACTIONAL When a business is
confronted by a crisis,
LEADERSHIP, leaders engage in an managers must react quickly
unemotional bargaining relationship to keep the organization
with their followers. responsive. See complete
exercise on page 6.Error:
3. TRANSFORMATIONAL Reference source not found
of this manual.
LEADERSHIP involves cultivating
employee acceptance of the group
mission.
4. CHARISMATIC LEADERSHIP TEXT REFERENCE
involves a leader who can successfully Study Skills Box:
Return on My Investment
influence employee behavior on the What are the returns involved
strength of personality or a perceived in improving study skills?
charisma, without the formal power or (Box in text on page 160.) An
additional exercise and
experience to back it up. discussion is available in this
chapter on page 6.Error:
PROGRESS CHECK QUESTIONS (Text page 160) Reference source not found.
5. Define the following leadership styles: autocratic,
laissez-faire, and democratic.
6. Summarize the findings of both the Ohio State and
University of Michigan leadership studies.
7. Explain the path-goal theory of leadership.
8. Explain the differences between transactional,
transformational, and charismatic leadership styles.

V. LESSONS FROM LEADERSHIP POWERPOINT 6-15

STUDIES Lessons from Leadership
Studies
A. It is hard to predict who will be a good (Refers to text page 160)
leader.
LECTURE LINK 6-2
B. There is no one best way to lead: most Best Business Leaders of
leadership is situational. the 20th Century
The top executives of the 20th
C. The effectiveness of a leadership style can century, as chosen through a
be seen in the atmosphere of the survey of executives. See
complete lecture link on page
organization. 6.Error: Reference source not
LECTURE OUTLINE LECTURE NOTES
found of this manual.

VI. MANAGING CORPORATE CULTURE POWERPOINT 6-16

► LEARNING OBJECTIVE 6
Identify strategies for effectively managing
Managing Corporate
Culture
corporate culture. (Text pages 160-167) (Refers to text pages 160-
161)
A. The word “culture” has many meanings.
1. CULTURE is the set of important
understandings (often unstated) that
members of a community share.
2. In an organization, culture is similar to
a human’s personality.
3. An organization’s culture is transmitted
through: LECTURE LINK 6-3
The Culture of the Real
a. long-standing, unwritten rules Rocket Scientists
For 40 years the Jet
b. shared standards Propulsion Laboratory has
planned interplanetary
c. standards for social etiquette and missions for NASA guided
demeanor by a few key rules. See
complete lecture link on page
d. established customers for relating 6.Error: Reference source not
to peers, subordinates, and found of this manual.
superiors
e. other traditions
4. CORPORATE CULTURE
communicates how people in an
organization should behave by
establishing a value system conveyed
through rites, rituals, myths, legends,
and actions.
5. Or, more simply, corporate culture
means “the way we do things around
here.”
B. Cultural Forms of Expression
1. Culture has two basic components;
a. substance, the meanings
contained in its values, norms,
LECTURE OUTLINE LECTURE NOTES
and beliefs
b. forms, the practices whereby
these meanings are expressed,
affirmed, and communicated to
members
C. How Does Culture Originate?
1. The cultures of some organizations POWERPOINT 6-17
originate with one person who How Does Culture
Originate?
provides a living example of the major
(Refers to text pages 161-
values of the organization. 163)
a. However, more than half of an
organization’s culture develops in
response to the environment and
the needs of employees.
b. The four distinct factors discussed
below contribute to an
organization’s culture.
2. History
a. Culture is built on awareness of
the organization’s history.
b. Humans tend to embrace beliefs
and values and to resist changes.
3. Environment
a. Environment shapes culture
because all organizations interact
with their environments.
b. Example: deregulation of the
telecommunications industry in the
1980s.
4. Staffing
a. Organizations tend to hire, retain,
and promote people who are
similar to current employees.
b. This organization “fit” ensures that
LECTURE OUTLINE LECTURE NOTES
current values are accepted and
challengers are screened out.
c. Example: Medtronic’s leader Bill
George
5. Entry socialization
a. The organization’s values, norms,
and beliefs are rarely written
down.
b. New employees must be taught
the culture.
c. ENTRY SOCIALIZATION is the
adaptation process by which new
employees are introduced and
indoctrinated into the organization.
D. Strong and Weak Corporate Cultures
1. A strong corporate culture:
a. is clearly defined TEXT FIGURE 6.11
Characteristics of a Strong
b. reinforces a common Corporate Culture
understanding about what is (Text page 163)
important
c. has the support of management
and employees
TEXT FIGURE 6.12
2. In weak cultures, individuals often act Characteristics of a Weak
in ways that are inconsistent with the Corporate Culture
company’s way of doing things. (Text page 163)

PROGRESS CHECK QUESTIONS (Text page 163)

9. Define the term “culture.”
10. Where does organizational culture originate?
11. Explain the four distinct factors that contribute to an
organization’s culture.
12. Summarize the characteristics of a weak
organizational culture.
E. Identifying Culture
1. Researchers have identified seven POWERPOINT 6-18
LECTURE OUTLINE LECTURE NOTES
characteristics that define an Identifying Culture
(Refers to text pages 164-
organization’s culture: 165)
a. individual autonomy
b. structure
c. support
d. identification
e. performance-reward
f. conflict tolerance
g. risk tolerance
2. Culture can be grouped into one of
four basic types, determined by:
a. the degree of risk associated with
the organization’s activities
b. the speed with which the
organization and its employees
get feedback on their decisions
3. The TOUGH-PERSON, MACHO
CULTURE is characterized by
individualists who regularly take high
risks and get quick feedback on
whether their decisions are right or
wrong.
a. Teamwork is not important, and TEXT FIGURE 6.13
the value of cooperation is Generic Types of
ignored. Organization Culture
(Text page 164)
b. People who need to gamble do
well in this culture.
4. The WORK-HARD/PLAY-HARD
CULTURE encourages employees to
take few risks and to expect rapid
feedback.
a. Activity and persistence are the
keys to success.
b. Team players who are friendly and
LECTURE OUTLINE LECTURE NOTES
outgoing thrive.
5. The BET-YOUR-COMPANY
CULTURE requires big-stake
decisions with considerable time
passing before the results are known.
6. The PROCESS CULTURE involves
low risk with little feedback.
a. Employees must focus on how
things are done rather than on the
outcomes.
b. In this atmosphere employees
become cautious and protective.
7. Organizational subcultures
a. Organizations often have multiple
subcultures.
b. The values, beliefs, and practices
can vary from one part of the
organization to the other.
c. Even with different subcultures,
some values are consistent.
8. Incompatible cultures are one reason
promising mergers fail.
PROGRESS CHECK QUESTIONS (Text page 166)
13. Which seven characteristics capture the essence of an
organization’s culture?
14. Explain the four basic types of organizational culture.
15. Think of the organization you currently work for (or
one you have worked for in the past.) Which of the
four basic types of culture most accurately describes
that organization? Provide an example to support
your selection.
16. Define the term “organizational subculture.”

CASE INCIDENT 6.2

The Way We Do Things (Text page 166)
LECTURE OUTLINE LECTURE NOTES
The Fitzgerald Company has been the industry leader in producing consumer products for
years. However, sales and market shares have been in decline now for the past several. The company is
now considering changing the company culture to redefine itself and regain the success it has enjoyed
in the past.

1. Describe, in general terms, the corporate culture at Fitzgerald Company.

The corporate culture for the Fitzgerald Company has been one of work-hard-play-hard, where
activity is the key to success. Rewards accrue for persistence and the ability to find a need and fill it.
Because of the need for volume, team players who are friendly and outgoing (sales types) thrive.

2. What’s wrong with a business philosophy based on the belief “that customer relations and a
strong selling orientation are the keys to business success”?
Meeting the needs of the customer is essential to success in areas such as product design,
implementation, and delivery. Creating and selling products that please the customer impacts the
company’s total revenue. However, revenue is not the same thing as profit. Profit is what is left after
costs have been subtracted from revenue. Unless a product can be produced in a cost-effective way,
more sales won’t do a thing for profit.

3. What does Valerie mean when she says Fitzgerald Company may have to change its culture?
What are some of the necessary changes?
For the Fitzgerald Company, its corporate culture has been successful in the past. However,
losses in sales and market shares have now prompted its president to look at how the company culture
affects sales and expenses. Changing a company culture will be a difficult process for many reasons.
Based on research, the Fitzgerald Company may have to change several characteristics of the
company to foster a new culture. These characteristics include individual autonomy (degree of
responsibility/ independence for individuals in the organization), structure (rules and regulations),
support (managers to subordinates), identification (employee identification to the organization as a
whole), performance-reward (rewards for performance), conflict tolerance (willingness to hones and
open about differences), and risk tolerance (degree at which employees are encouraged to be
aggressive/innovative and risk seeking).

4. Discuss the problems the company may encounter in attempting to implement changes.
The biggest challenge the Fitzgerald Company will face is the length of time it will take to
implement and change its corporate culture. This process usually takes 6 to 15 years. It is also
expensive. Because of the cost, time, and difficulty in changing culture, some might argue that it is
easier to change the people within the organization. This assumes businesses promote people who fit
their organization, and the easiest way to change the organization’s culture is to change the people.
However, it makes more sense to strengthen or fine-tune the current cultural structure.

F. Changing Culture
POWERPOINT 6-19
1. It usually takes from 6 to 15 years to Changing Culture
successfully change organizational (Refers to text pages 166-
168)
culture.
2. According to Allan Kennedy, there are
LECTURE OUTLINE LECTURE NOTES
only five reasons to radically change BONUS CASE 6-2
Turning Tyco Around
organization culture. After Tyco’s former CEO
Dennis Kozlowski’s
3. It is possible to strengthen or fine-tune conviction for looting $600
the current culture without wholesale million from the company,
cultural changes. Ed Breen was brought in to
rescue the troubled company.
4. The easiest if not the only way to See complete case,
change an organization’s culture is to discussion questions, and
suggested answers on page
change its people. 6.Error: Reference source not
found of this manual.

THE WORLD OF WORK

Taco Barn Gets Some Surprising Feedback (Text page 167)
Tony has successfully participated in the leadership development survey and information
about this survey is available for discussion with his supervisor. The reports show that some
employees are very happy while others are unhappy. The results suggest that the company needs
to address how leadership style impacts corporate culture.

1. Should the leadership team have been surprised by the survey results? Why or why not?
Not really. The purpose of the survey was to identify what works and what doesn’t.
Identifying problem areas is the first step in solving the problem.

2. Should they be pursuing a “right” leadership style? Why or why not?

Is there really one “right” leadership style? Many experts will answer that the right style
depends on the leader, the employees, and the situation. Mandating one leadership style might
inadvertently destroy successful leadership situations. Effective leadership requires drawing on a
range of skills and techniques, not a prescribed leadership model. However, that being said, the
poor performances of the “problem children” still needs to be addressed, but not with a one-size-
fits-all approach.

3. If Taco Barn doesn’t have a clear sense of culture (as the survey results appear to
indicate), where and how does it start to develop one?
Taco Barn culture is not clearly defined. However, culture can’t just be designed and
implemented. It grows over time, as the organization develops a strong understanding of what is
important and what has the support of management and employees.
The first step in establishing the Taco Barn culture should be defining the essence of the
organization. These characteristics include individual autonomy, structure, support, identification,
performance-reward, conflict tolerance, and risk tolerance.

4. What should the leadership of the Taco Barn organization do now?

 The leadership has begun defining its culture and communicating it to employees
throughout the organization. Employees can be shown how the development of this culture can be
a positive step in developing a more focused, established company with leadership skills that can
excel in the restaurant industry, providing a good working environment for its employees. This
will help employees both in the short run and long run to identify the culture of their company
and allow them to associate and identify more with the company as a whole rather than just their
individual store.