‘Grammar’ point
►The examples below are taken from ‘Theory-1, -2 and -3 Point’:
Self-actualization is different from2 the other levels of need in at least one respect.
Maslow also criticized Theory Y for its “inhumanity” to the weak, and to those who are not capable of a high level of self-motivation.
Europe, which at times looked as if it was being squeezed out of this game of American-Japanese ping-pong, has also made claims to be the fount of total quality.
►Translate the examples into Russian and explain:
Is it correct to leave out ‘the’ in the first example?
Why is there ‘the’ before ‘weak’ (an adjective!) in the second example?
Why is the past continuous in the passive used in the third example? Can ‘if’ be replaced with another conjunction?
‘Theory-5’ point
MBO
(1) The idea of management by objectives (MBO), first outlined by Peter Drucker and then developed by George Odiorne, his student, was popular in the 1960s and 1970s. In his book The Practice of Management, published in 1954, Drucker outlined a number of priorities for the manager of the future. Top of the list was that he or she “must manage by objectives”. John Tarrant, Drucker’s biographer, reported in 1976 that Drucker said that he had first heard the term MBO used by Alfred Sloan, author of the influential My Years with General Motors.
(2) With the benefit of hindsight, it may seem obvious that managers must have somewhere to go before they set out on a journey. But for many at the time it came as a blinding flash. Odiorne said:
Drucker has been a voice of sanity in graduate schools. Faculty members are still busy running mathematical models and measuring the distance between managers' eyeballs, but Drucker has always focused on what managers actually do.
(3) He also said that managers lose sight of their objectives because of something called “the activity trap”. They get so involved in their current activities that they forget their original purpose. In some cases they become engrossed in this activity as a means of avoiding the uncomfortable truth about their organization’s condition.
(4) A library of literature about MBO appeared soon after, much of it as unreadable then as it is today. Managers of the smallest business units were urged to follow the principles of MBO: first, determine the business’s objectives; then plan how to achieve those objectives efficiently; and lastly implement that plan.
(5) MBO urged that the planning process, traditionally done by a few high-level managers, should involve all members of the organization. The plan, when it finally emerged, would then have the commitment of all of them. As the plan is implemented, MBO demands that the organization monitor a range of performance measures, designed to help it follow the right path towards its objectives. The plan must be modified when this monitoring suggests that it is no longer leading in the right direction.
(6) One of the more fruitful outcomes of the MBO literature was a fresh analysis of objectives that soon came into common currency. It was known by its acronym - objectives, it said, must be SMART:
Specific
Measurable
Achievable
Realistic
Time-related
(7) One critic claimed that MBO encouraged organizations to tamper with their plans all the time, as and when they seemed no longer to be heading towards some immutable objective. This was often counterproductive, and many firms came to prefer the vague overall objectives of a mission statement to the firm, rigid ones demanded by MBO.
(8) After a while, Drucker himself downplayed the significance of MBO. “MBO”, he said, “is just another tool. It is not the great cure for management inefficiency… Management by objectives works if you know the objectives: 90% of the time you don’t.” Drucker’s central point is that management has to be all pervasive, and that it is primarily a human activity, not a mechanical or an economic one. Too much business activity still takes place without it.
A little bit of history
(1) The idea of management by objectives received a boost when it was declared to be an integral part of “The H-P Way”, the widely acclaimed management style of the Hewlett-Packard computer company (which also involved management by walking about - MBWA). At every level within Hewlett-Packard, managers had to develop objectives and integrate them with those of other managers and of the company as a whole. This was done by producing written plans showing what people needed to achieve if they were to reach those objectives. The plans were then shared with others in the corporation and coordinated.
(2) Bill Packard, one of the two founders of Hewlett-Packard, said of MBO:
No operating policy has contributed more to Hewlett-Packard's success ... mbo ... is the antithesis of management by control. The latter refers to a tightly controlled system of management of the military type... Management by objectives, on the other hand, refers to a system in which overall objectives are clearly stated and agreed upon, and which gives people the flexibility to work toward those goals in ways they determine best for their own areas of responsibility.
(3) Management by objectives is now largely ignored. Its once widely used abbreviation, MBO, has been taken over by the better known management buy-out, the purchasing of a company by its managers using debt to finance the deal.
►Question/Answer session:
What are the principles of MBO? Can it lead managers to ‘overcommitment’, thus acting as hindrance?
What should MBO’s objectives be like? Comment on each characteristic. Would you like to modify the list? If so, how?
Why did Drucker eventually downplay the significance of MBO?
“MBO is the antithesis of management by control.” Comment on this.
SUMMARY-2 POINT
total quality management (TQM)
to conform to a customer’s requirements
continuous improvement
excessive amount of paperwork
management by wandering about/ by walking around (MBWA)
to interfere unnecessarily
white-collar managers
the blue-collar workforce
an ivory tower
to meet face-to-face
to give people on-the-spot help
management by objectives (MBO)
to lose sight of objectives
to tamper with one’s plans
to downplay the significance of MBO
‘CASE-3’ POINT
Keller International
(1) Over the past five years, sales at Keller International, an international engineering group, had grown at an average 5% per annum. This average masked very considerable differences in performance by the divisions within the group. The Hardware Division, the largest division, had consistently outperformed the other divisions with average growth of 8% per annum. The Lifting Products Division and Power Systems Division had grown by approximately 4%. The Logistics Division had seen growth of only 1%.
(2) The chief executive of Keller, Dough Norton, concerned at the performance of the Logistics Division, had persuaded his board of directors three months ago to fire its chief executive. A new chief, Jeff Wood, was appointed and given the objective to increase sales by 3% in his first year and 5% in his second year. Profits had to increase in line with sales.
(3) Jeff Wood, on his first day in office, called a meeting with his senior marketing managers and outlined the targets set. He asked them to produce a plan detailing how sales could be grown profitably within the time scale set. He wanted the plan with supporting documentation ready for a presentation in three days time. During the time, Jeff Wood familiarized himself as much as possible with the previous work of the marketing department. He called in all the senior managers one by one for an interview. The presentation took place over one day with Jeff questioning every aspect of what was being proposed.
(4) Over the next seven days, the marketing team was restructured. Three senior members of the team, including the head of marketing, whose performance Jeff thought was inadequate, were told that they would lose their jobs. The former assistant head of marketing was promoted to head of marketing and there was a reorganization of roles within the department. A new marketing plan was thrashed out with clearly identifiable targets for the department as a whole, broken down by country and product. Individual marketing managers, who had contributed to the construction of the plan, were made responsible for achieving those targets.
(5) The implications for increasing sales were then worked out for each of the other departments within the division. The emphasis was upon drawing up plans which would see modest increases in costs to ensure that the sales increases generated growth in profits. The personnel department helped devise an incentive scheme for individual members of the marketing department to reward them for achieving their objectives.
►Case task:
What are the key features of MBO? Illustrate your answer with examples from the case.
‘PROS & CONS’ POINT
►Fill in the table with the information you have come up with and learned so far:
Table. Advantages and disadvantages of MBO
ADVANTAGES |
DISADVANTAGES |
|
|
‘SHOW’ POINT
►Now that you have analyzed and mastered various types of management theory hold a panel discussion on “Points in favor of and against ‘Management as seen scientifically’”. For this discussion you will need the following GURUS:
Abraham Maslow
Douglas McGregor
W. Edwards Deming
J.J. Juran
Bill Hewlett
David Packard
Peter Drucker
George Odiorne
Tom Peters
John Case
Be imaginative! Surf the Internet to get more knowledge on the subject. Good luck!
‘PUZZLE-1’ POINT
►Translate the verbs below into Russian avoiding the same roots:
Identify, liquidate, manipulate, imitate, adapt, modernize, accumulate, limitate.
►Now translate the sentences below giving all possible Russian equivalents to the words in italics:
The Chief Accountant has identified a number of problem areas preventing the company from experiencing a net increase in cash.
One of the main targets of marketing is to identify the needs of prospective consumers.
If the company is progressively incurring heavy losses, its shareholders may even become involved in liquidating it.
The shares were sold to liquidate the debt.
Manipulating facts and figures in accounting is a slippery slope to bankruptcy.
The recent economic slump enables some ‘shady’ politicians to manipulate the market.
Good management means skillfully manipulating all the tools and incentives a manager may have at hand to motivate the staff.
Ricardo Semler proved to be so successful a leader that many generations of leaders have tried to imitate his style.
Most businesses have had to adapt to current market conditions.
Woods International had to adapt its product range to the local market.
To discourage some multinationals from abusive behaviour resulting in unfairly dominating the market is to modernize existing antitrust legislation.
The COO modernized the factory to adapt to recent trends.
The company will skid into bankruptcy if it does not modernize.
The company accumulated some €350,000 in debt.
The antitrust committee has accumulated enough evidence to bring/press charges against the company.
By 2000 he managed to accumulate the capital his father left him to start his own business.
The board of directors made a decision to limit exports to China.
Peter Drucker is quite convincing in his books but he never urges managers to limit themselves to his ideas.
MAKE YOUR POINT
►Discuss the questions. Support your views with examples.
How far should a supervisor go in criticizing the performance of a subordinate? Some highly successful managers have been known to rely on verbal abuse and intimidation. Do you think that this is an effective means of communicating expectations? If not, what alternative should a manager use in dealing with someone whose work is less than satisfactory?
‘PREPOSITION’ POINT
►Fill in the blanks with the right prepositions:
A thirst ___ continuous education and self-improvement is a good feature of an employee.
The senior executives were not capable ___ allocating the company’s annual budget without the consent of the CEO.
The company has seen considerable increase ___ employee morale.
___ the end, the firm has introduced its annual statements on its corporate website.
The company’s organization culture allows its entire workforce to satisfy their needs ___ achievement and self-respect.
Quality is a matter of conforming ___ a customer’s requirements.
___the end of the meeting, the Vice-President clearly expressed the extent ___ which the bonus program can be applied to middle managers.
The stodgy structure at RST was replaced ___ more flexible one.
This style of management is commonly referred ___ ___ MBO.
We are still in need ___ a flat organization structure.
New corporate rules give the management no easy excuses ___ failure.
CASE-4’ POINT
Motivating Means Enriching
(1) Salary rises, bonus schemes and share options are the traditional tools managers use to motivate employees based on the simple idea that cash is the most effective carrot in the workplace. But experts say that money is not a long-term motivator. ‘It does not matter how much their salaries are, unhappy employees will not be as dedicated to their work’ according to Josh Smith of Pro, the employment law advisor. To inspire staff, businesses should be looking at alternative ways that are often far more effective and longer lasting than pay rises. Ensuring that workers feel involved and that their opinions matter to the company is an important incentive.
(2) Effective Communications, a London advertising agency, has removed symbols of hierarchy in the office because its managers feel they act as barriers to productivity. There are no private offices, not even for the chairperson. Staff are encouraged to contribute to projects others than those to which they have been specifically assigned. Everyone has the right to stumble in meetings. They can mention incomplete ideas without reproach since these thoughts often inspire others.
(3) Fizzy is a health-drink maker whose main product is ‘smoothie’ fruit juices. When 25 year old Alice arrived for work on her first day, she found a mug with her name on it in the staff kitchen and a two week timetable showing her the different members of staff who would be taking her out to lunch. ‘These lunches gave me a thorough introduction to the company’, she says. ‘But they also enabled me to chat and make friends with almost half the staff.’ The warm welcome is not just special treatment for new employees. It is part of co-founder John Burton’s management ethos. ‘We are a company of only 24 people’ he says. ‘Our success is intrinsically linked with these employees. It’s vital that they are interested in the product and the growth of the business. The best way of maintaining this is by making sure they are happy.’ Sales targets at Fizzy are painted for all to see on the side of a large smoothie bottle called the Drinkometer. When each target is met, the managers organize fun days as a reward. The last one was a sports day in the park for the whole team. The next one is a group yoga session. As Burton says: ‘The days help to show our employees that we value their efforts. They are simple to organize and have fostered a real family atmosphere in the company.’
►Case task:
Explain the meaning of the terms ‘motivator’ and ‘team’.
Outline two examples of job design from the case.
Using examples from the case, analyze how a company might empower its workforce and so raise motivation.
Discuss whether being part of a successful team is a more important motivator to workers than the salary they earn.
Compare non-financial and financial methods in increasing motivation of employees on the basis of your own reading and/or personal observation.
‘TRANSLATION-3’ POINT
►Translate into Russian:
(
1)
Одним из ключевых элементов в формировании
системы управления организацией
является мотивационная модель. Идеальной
мотивационной модели или теории не
существует. Более того, нет некой единой
теории мотивации – их довольно много.
Выбор той или иной теории, того или
иного подхода осуществляется индивидуально
для каждой организации в зависимости
от ее функций, характера деятельности,
размера, среды, в которой ей приходится
действовать, и других особенностей.
(2) Рассмотрим несколько мотивационных моделей, которые, на наш взгляд, представляют интерес и могут быть использованы на практике. Наиболее известной из них на сегодня является модель или теория иерархии потребностей А.Маслоу.
(3) В соответствии с теорией Маслоу, у человека имеется сложная структура иерархически расположенных потребностей. Согласно этой теории, цели индивидуума распадаются на 5 различных категорий и ранжируются по степени важности от верхушки пирамиды к ее основанию:
потребность в самореализации (самовыражении)
потребность в самоуважении (уважении)
потребность в социальных связях (принадлежность к определенной социальной группе)
потребность в безопасности (обеспечение безопасности)
физиологические потребности
(4) Согласно принципу иерархии, потребности каждого нового/вышестоящего уровня становятся актуальными для индивида лишь после удовлетворения предыдущих/нижестоящих потребностей.
(5) Интересным является также подход к построению мотивационной модели, сформированный Мак-Грегором в его теории «Х» и «У». Мак-Грегор убежден в том, что поведение людей является следствием методов управления. В свою очередь, построение методов управления базируется на отношении руководства к персоналу.
(6) Магрегор выделил две категории отношения к человеку (так называемые теория «Х» и теория «У»). В зависимости от того, к какой категории, по мнению руководства, относится персонал, формируется та или иная мотивационная модель.
(7) Теория «Х» предполагает, что:
человек от природы ленив и старается избегать работы;
ему недостает честолюбия;
он не любит ответственности и предпочитает, чтобы за него все решалось руководством;
он от природы эгоцентричен и равнодушен к потребностям организации;
он противится переменам;
он доверчив и не слишком сообразителен.
(8) В свою очередь, теория «У» предполагает, что:
работа для человека так же естественна, как и игра;
человек не является от природы пассивным и безразличным к целям организации, а становится таким в результате работы в организации;
в человеке присутствует необходимость мотивации, возможность развития, способность брать на себя ответственность, готовность направлять свое поведение на достижение целей организации. Обязанность управленца – помочь людям развить в себе эти качества. Наиболее сильный эффект достигается в случае, если цели индивида и организации совпадают.
(9) Таким образом, теория «Х» воплощает чисто авторитарный стиль управления и характеризуется существенной централизацией власти и жестким контролем. Теория «У» представляет демократический стиль управления и предполагает делегирование полномочий, улучшение взаимоотношений в коллективе, стимулирование инициативы со стороны подчиненных и обогащение содержания работы.
‘CHECK’ POINT
►Question/Answer session:
Describe the basics of Maslow’s hierarchy of needs.
Define theory X and theory Y. Compare them.
Describe the essence and strategies of TQM.
Describe the essence of MBWA, its principles and objectives.
Describe the philosophy of ‘The H-P way’ of management.
Describe the essence of MBO, its principles and objectives.
(
Revised
Unit 7 from Business & English by Levon Gzokyan)
‘WARM-UP’ POINT
Here is the Jack Welch GE way prescription for Leaders:
Managing less is better.
Manage by creating a vision.
Lead, don’t manage.
Instill confidence.
►Explain how you understand each step.
►Comment on the following opinion:
Managers and leaders are two different animals. Leaders, like artists, tolerate chaos and lack of structure. They keep answers in suspense, preventing premature closure on important issues. Managers seek order, control and rapid resolution of problems.
There are four main types of leadership style:
Autocratic
Democratic or participative
Laissez-faire
Paternalistic
►Match the main characteristics of each style presented in the cards below with a term from the list above:
A.
This style may help motivation and involvement
Workers feel ownership of the firm and its ideas
This style improves the sharing of ideas and experiences within the business
B.
‘Let it be’ – the leadership responsibilities are shared by all
This style can be very useful in businesses where creative ideas are important
This style can be highly motivational as people have control over their working life
This style can make coordination and decision making time consuming and lacking in overall direction
This style relies on good team work
This style relies on good interpersonal relations
C.
Leader makes decisions without reference to anyone else
There is a high degree of dependency on the leader
This style can create de-motivation and alienation of staff
This style might be valuable in some types of business where decisions need to be made quickly and decisively
D.
Leader acts as a ‘father figure’
This leader makes decision but may consult
This leader believes in the need to support staff
►Take a business or political leader and discuss:
what his/her leadership style is;
what his/her attitude towards goals is;
what his/her conception of work is;
what his/her relations with others are;
what his/her sense of self is.
‘THE ECONOMIST’ POINT
How to run a company well?
Ten Commandments for successful leaders.
Leading a big public company is one of the world’s most important jobs. It is already fiendishly difficult, and seems to be getting harder all the time. Those who make it to the top frequently fail: they stay for shorter and shorter periods. And there is more competition than there used to be for the talents of top bosses because private equity now offers another option. To judge by the huge pay packets offered to the few deemed capable of doing such jobs, there is a dire shortage of people thought to have what it takes. Here is a ten-point checklist of the necessary qualities.
1. A sound ethical compass. If the boss’s values are undemanding, the company’s will also be wobbly. That may not put it out of business, but it means the company will have to pay a premium for talent. Good people do not like working for organizations whose values they mistrust. But ethical values are difficult to acquire on demand, in middle life. “The deeper sources of constraint are hard-wired at an early age,” says NYU's Mr. Allen.
2. The ability to take unpleasant decisions. Many judgments must be made on the basis of ambiguous information. Leaders often have to deal swiftly with conflicting demands without being sure of their facts. That calls for a strong stomach. Those who cannot bear to inflict pain or risk making enemies, or who need cast-iron evidence before making up their minds, should not apply.
3. Clarity and focus are essential requirements for making those awkward judgments. Leading a large company, and dealing at speed with a host of complicated and many-sided issues, is an immense intellectual challenge. To extract the crucial point from complexity is essential for devising an effective strategy. In order to survive the clamor for time and attention, a leader must also be able to screen out unnecessary noise and to focus on what really matters. That goes with realism—there is no point in aspiring the unachievable.
4. Ambition. The best leaders are empire-builders who want to create something that outlasts them. That is different from ego-boosting personal ambition. It supplies the ruthless drive and the obsession with excellence that are essential components of good leadership.
5. Effective communications skills are a relatively new requirement, the result of the increasing intrusion of the outside world: media, analysts, shareholders, environmental groups. All require a corporate leader who can talk convincingly - which is not always the same thing as telling the whole truth. Motivating a large workforce requires a gift to present a clear vision persuasively. A leader who cannot inspire trust and convey authenticity will find the task difficult.
6. The ability to judge people is an essential prerequisite, given the importance of human capital. Lord Stevenson, the chairman of HBOS, a big bank, says that he spends perhaps three-quarters of his time getting to know the top 150 people where he works. Mr. Welch used to describe himself as the “world’s best-paid human-resources director”. Judging who will work best in which slot is one of the key tasks of leadership. Like so many aspects of the top job, it requires intuition as well as experience.
7. A knack for developing talent is needed to build a stock of future leaders. People learn far more about the art of leading from a good mentor than from a great book. So effective leaders need not only to spot where the talents of a particular individual might be best deployed; they must also be teachers, conveying their skills to those around them (and encouraging others to teach their colleagues too). That is the way to create leaders at many levels in an organization.
8. Emotional self-confidence. Accumulating a pool of talent requires an ability to work with people, who may be better at their job than you are at yours, and to guide and motivate them. Leaders who are jealous of their followers do not inspire loyalty. Self-confidence also allows people to admit to weakness and ask for help without feeling defensive or inadequate. Successful leaders need to be able to say, “I don't know what to do next,” without losing the respect of their colleagues.
9. Adaptability will prove invaluable when things go wrong. Surviving a reverse calls for resilience and flexibility. It is one thing to spot a change in the market, or in public attitudes, or in the political climate. It is quite another quickly to devise a completely different approach, even if that means abandoning an idea to which a leader has been passionately committed. Yale University’s Mr. Sonnenfeld is cataloguing ways to turn misfortune into fortune. The key seems to be an ability to “reframe”: to reshape a problem so that from some angles it can look like a success.
10. Charm is not a quality taught on MBA courses, but few get to the top without it. A bit of luck helps too, though that may prove hard to arrange.
►Question/Answer session:
Are these qualities useful for leading any enterprise?
Would you add some other qualities to this ‘ten-point checklist’? Why?
What is meant by ‘a sound ethical compass’?
How do you see the difference between ego-boosting personal ambition and that of the checklist?
What are the ways of creating leaders at many levels of an organization?
Is it in fact necessary for a leader to be able to say ‘I don’t know what to do next?’ Isn’t there a danger of losing the respect of his colleagues?
What do you think is meant by ‘to reshape a problem so that from some angles it can look like a success’?
What ‘types’ of charm, in your view, could serve as ‘a survival kit’ for a true leader?
►Now that you have closely analyzed the article, give a small talk keeping to the Commandments above. The use of initiative is highly praised.
‘SHOW-1’ POINT
►Describe a situation that tested your leadership skills. How did you manage the situation? (up to 10 min.) Choose situations that are real and meaningful to you, not what you think will impress others. Be sure to use some of the expressions from the list below in your talk. Make your talk as vivid as possible. Never hesitate to ENACT your talk not merely give.
Some useful hints on leadership aptitudes:
To have charisma or basic flair or talent for leadership
To be a visionary or someone who has clear ideas and strong feelings about the way something should be in the future
To change the mind-set/the framework of others
To be open and approachable
To build trust and respect
To build an atmosphere of empowerment encouraging team members to use their own initiative, to take decisions on their own without asking managers first
To delegate by giving others responsibility for work
To supervise and coordinate teams of diverse team members
To have the ability to quickly prioritize tasks
To make spontaneous decisions
To instinctively answer difficult questions
To draw on past experiences to make educated guesses in the face of uncertainties
To display confidence when the team encounter obstacles
To never give up looking for solutions to the overwhelming dilemmas
To prevent the team from falling apart
‘THEORY-1’ POINT
Dream the Impossible and Make it Happen
A Lesson for Management Leaders
(1) He is considered one of the gurus of management. He doesn’t teach at any university - in fact he left without ever completing his first degree. He doesn’t join the lecture circuit nor is he a prolific author. He has only ever written two books and very few articles. Despite all that, his views on the way the world of business is going, and what that means for all of us, are possibly the most influential in business circles.
(2) His name is Bill Gates, in many ways, the richest man in the world; the richest because he doesn’t just talk about the future, he helps to shape it; the richest because he doesn’t just understand how technology works, he also understands how markets work, not least by outsmarting IBM; and richest, finally, because his heart is where his voice is. He is genuinely passionate about the new world he can see emerging and the benefits it can bring. He’s an outstanding example of the guru who preaches more by deeds than by words, who lives the theories he comes up with.
(3) We need gurus of management to spread the good news of what works and what is new. But some of those who are creating the good news are perfectly capable of spreading it around themselves. Jack Welch, who has recently retired as Chairman of General Electric in America, is another of those who preach by example. Both Welch and Gates are great teachers - of their own staff, and that process helps them to spell out their views and beliefs in ways that others can relate to. In fact that’s the first lesson we can learn from Bill Gates - good managers are good teachers. Literally so - they spend lots of time in front of their people, talking, listening, answering questions. Gates may not follow the other gurus around the conference lecture circuit, but, whether it is by his beloved email or in person, inside his company or outside it, teaching is what he is doing for much of his day.
(4) You probably know some of his story already: how he got hooked on primitive computers at an early age, along with his friend Paul Allen, how he and Paul stumbled across an advert for a small kit computer called the Altair 8800, how they started to write a program for it, how they started to dream about what it would mean if everyone had their own affordable and easy-to-use computer, how Bill left his degree program at Harvard to try to live that dream and how, between them, Bill Gates and Paul Allen created the world's first microcomputer software company. They called it Microsoft. It was 1975 and the world was about to change.
(5) It all looks obvious in hindsight, but back then computers were huge machines that had to be kept in special temperature-controlled rooms with their own special languages that you had to learn before you could interact with them. So the second lesson that we can learn from Bill Gates, before we even get on to his ideas, is that it is always possible to dream the impossible and make it happen. That is what great leaders always do, in every field, but of course they then have to communicate their dream so that others can get involved and excited. No one can do much on their own. Bill Gates would be the first to admit that he’s no technological genius, he needs others for that. What he has is the thirst for social invention. He revels in change and draws inspiration from a crisis.
(6) Of course, you can’t build a company as successful as Microsoft has become without making enemies, and Bill has many of those, not least the bruised competitors he leaves in his wake. The US Government’s antitrust action against Microsoft that started in 1998 confronted Gates with something new for him - unpopularity. He has responded by giving up day-to-day control of his firm and giving more of his attention to the gigantic charitable foundation that he and his wife Melinda have set up. As he has said, when children are dying and starving in parts of the world, easier internet access seems almost beside the point. It’s another lesson for managers - remember always that there is another world out there. If you get too fixated on your immediate business problems you may get too disconnected from your public and lose their support.
(7) Gates has written not once on how the digital revolution will shape the future of business and management. But we can learn as much from Bill Gates by looking at what he does, as a manager and a leader, than by reading his books. Think first of Gates as a marketing guru. He has described his method as a six-part business strategy.
1. Concentrate your effort on a market with large potential but relatively few competitors.
2. Get in early and big.
3. Establish a proprietary position.
4. Protect that position in every way possible.
5. Aim for high gross margin
6. Make the customers an offer they can’t refuse.
(8) Right from the beginning he practiced what he preached. In 1980 IBM approached the fledgling company that was Microsoft looking for software for its new secret product, the PC. At that stage, all that Gates and his partner Allen had to offer was their version of the computer language called BASIC. But when IBM asked if they could also supply an operating system, Gates and Allen said yes. Actually they didn’t have one at that moment, but they thought that the product of a local firm, Seattle Computer Products, could perhaps be used. When IBM went away, Gates and Allen bought this product for $50,000 and then agreed to give IBM a license to use it for ever - for only $80,000 with no royalties. It was an offer IBM could not refuse and it knocked out two other competitors. But what IBM didn’t notice, or didn't mind, was that Microsoft retained the right to license their system to anyone else. IBM didn’t think that the PC was going to be much more than a household toy, but Gates saw the huge market potential and wanted to get in early and first on the back of the biggest player in the business. As he says in his first book ‘Getting in on the first stages of the PC revolution looked like the opportunity of a lifetime and we seized it.’
(9) It’s one thing to have the right idea. Creating the organization to deliver it is something else again. Here, too, Gates, with no previous experience, no MBA (Master of Business Administration), and no mentors, set about creating a new sort of organization, which he called a knowledge company. The knowledge company’s raw material is brainpower. You hire the best trained brains, create an environment in which they can do their best work, and build systems so that the knowledge that results is woven into the fabric of the organization. Then it can be packaged and sold. The company headquarters at Redmond, near Seattle, has often been compared to a university campus, but if so, it is a very hard-nosed university indeed, with one overriding and very clear purpose - to put a PC on every desk and in every home (using Microsoft software, of course, even though Gates leaves this bit unsaid nowadays).
(10) Here is Bill describing how they work – “we read, ask questions, explore, go to lectures, compare notes and findings...we consult experts, daydream, brainstorm, formulate and test hypotheses, build models and simulations, communicate what we’re learning, and practice new skills.” Vital to it all is what he calls the DNS - the Digital Nervous System, the e-mails and computer systems that allow everyone to learn everything they need to know. It sounds wonderful, but it doesn’t tell you how decisions are taken, and at first they all got taken by Bill Gates himself, or Paul Allen. Incredibly bright though they both were, there was no way that they could personally control the huge sprawling giant that Microsoft was becoming. Besides, too many mistakes were creeping in, as when Windows NT flopped disastrously in the marketplace. So, in 1999, Bill Gates set about re-inventing the company. He called it VV2, for Vision Version 2. It set out to switch the focus from personal computers to all forms of information software and hardware and to build the company around the needs of customers. The company was divided into eight separate and autonomous business groups, along the lines originally adopted by Alfred P. Sloan, the legendary boss of General Motors in its great days, and a personal hero of Gates, who discovered that traditional management theory had its uses.
(11) Behind the structures, however, there are some very clear people policies, which are the things that give the company its extraordinary vitality. Gates summarizes them as five ‘E’s: Enrichment, Empowerment, Emphasis on Performance, Egalitarianism and E-Mail. Enrichment is the lure that attracts the young talent to the firm. Gates has created many millionaires through the stock options he provides for successful performance. And that performance is rated twice a year with marks from one to five. Four means exceptional, one means you’re out. Egalitarianism is evident in the laid-back style of the place, hectic though it is underneath, and e-mail, of course, is everywhere. Nevertheless, in Microsoft it is still clear who is boss, who takes the really big decisions and who charts the long-term future of the company; and that man is still Bill Gates.
►Question/Answer session:
Why is Bill Gates considered the richest man in the world? Is that because of his fortune?
What are the three lessons that we can learn from Bill Gates?
What is a six-part business strategy described by Bill Gates?
How did Bill Gates practice what he preached?
How has Bill Gates created a knowledge company aimed at bringing about his revolutionary ideas? What was (is) his working policy?
Why and how did Bill Gates and Paul Allen reinvent Microsoft?
Could you summarize people policies that give Microsoft its vitality?
►Now that you have closely analyzed the article, give an impressive talk keeping to the guidelines below:
Bill Gates, a Guru who preaches by deeds
Three ‘guru’ lessons we can learn
Bill Gates, a marketing guru
Practice what you preach
A knowledge company
Five E-s
MAKE YOUR POINT-1
►Discuss the extent to which you agree or disagree with the following Warren Bennis’ dicta. Support your point of view with reasons and examples from your own experience, observations, or reading.
Leading a group of a wide range of people, both in terms of status and position, effectively relies on persuasion not coercion, on supporting, not controlling.
Learning to be an effective leader is no different than learning to be an effective person. And that’s the hard part.
Without leaders who can attract and retain talent, manage knowledge, and unblock people’s capacity to adapt and innovate, an organization’s future is in jeopardy.
MAKE YOUR POINT-2
►Discuss the extent to which you agree or disagree with the Warren Bennis’ view on the ways of learning leadership. Explain your own view on how a person can learn leadership in both the individual and the organizational setting.
People learn about leadership ONLY experimentally. There are two major, perhaps only two, sources for learning, the individual and the organizational setting. As far as the individual is concerned, they must have the ambition/drive to become a leader. Without that motivation, as is true in almost every walk of life, nothing will work. I should add quickly that one must be aware of the Richard III syndrome: one has to be wary of people who can't live without power; i.e. the drive for power without purpose.
►Discuss the extent to which you agree or disagree with the following.
Percy Barnevik, former chairman of ABB and one of Europe's most celebrated business leaders, says that ‘organizations ensure that people use only 5 to 10 percent of their abilities at work. Outside of work they engage the other 90 to 95 percent.’ The challenge for leaders, he adds, is ‘to learn how to recognize and employ that untapped ability.’
‘SHOW-2’ POINT
There is a list of at least 7 criteria upon which most organizations evaluate potential or emerging leaders:
Technical competence: business literacy and grasp of one’s field
Conceptual skill: a facility for abstract or strategic thinking
Track record: a history of achieving results
People skills: an ability to communicate, motivate, and delegate
Taste: an ability to identify and cultivate talent
Judgment: making difficult decisions in a short time frame with imperfect data
Character: the qualities that define who we are
►On the basis of the list make (read: ENACT) a ‘research’ PowerPoint presentation on ‘The Qualities of Leadership’, providing a framework for leading knowledge workers. Be sure to give a full explanation of each criterion and classify them in order of importance. Support your point of view with reasons and examples from your own experience, observations, or reading.
MAKE YOUR POINT-3
►Discuss the extent to which you agree or disagree with the opinion. Support your point of view with reasons and/or examples from your own experience, observations, or reading.
In any business or other organization, it is better to have managers with strong leadership skills than managers with expertise and work experience in a particular field.
‘WWW’ POINT
In July, 2005 two young Los Angeles entrepreneurs Chris DeWolfe and Tom Anderson announced a deal to sell the wildly popular website www.myspace.com and its parent Intermix Media to News Corp. for $580 million. Some feared the site would become too commercial under News Corp. But traffic and membership growth, which leveled off over the summer, have picked up in fall, 2005. The number of unique visitors grew to 24.2 million. The secret of MySpace’s success? This is the question you are about to answer.
►Prepare a short talk or a PowerPoint presentation on DeWolfe & Anderson, entrepreneurs that know the secret of true success.
‘PUZZLE’ POINT
►Fill in the table using the knowledge you have acquired so far:
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Managers |
Leaders |
Attitudes towards goals |
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Conception of work |
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Relations with others |
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Sense of self |
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MAKE YOUR POINT-4
►Discuss the extent to which you agree or disagree with the opinion.
Managers today juggle more responsibilities than ever and for many of them networking becomes an afterthought. Herminia Ibarra, INSEAD Professor of Organizational Behavior says that’s a potentially fatal career mistake. “What you know is who you know,” she says and warns that managers who neglect to build their networks risk failing or remaining stuck in middle management.
Ibarra insists that networking is a requirement for business leaders in today’s competitive environment.“Other things being equal, what is going to give you an edge? It’s the relationships that you have that allow you to augment what you know and allow you to take the ‘what you know’ and actually to translate it into practice, into something the organization can use. It makes all the difference.”
‘CASE’ POINT
(1) You are the head of sales at a medium-sized manufacturing company. A little over one year ago, you recruited John to join the company as a sales manager. Since that time, he has been one of your star producers, and his performance has earned rave reviews from senior management and customers. He has generated an enormous amount of business for the company, landing accounts with the four largest retailers in the region. Last year, John was responsible for bringing in additional $10 million in sales revenue. In that same year, full-year revenues increased 15% to $62 million, significantly outpacing all competitors. Gross margins for the year were 42.9%, compared with 38.0% last year, and the selling and administrative expenses were 30.2% of full year-revenues, compared with 29.5% last year.
(2) The CEO credits John with turning around the business and is one of his biggest supporters. Furthermore, the CEO praises you for bringing John to the company. John is viewed by his co-workers and subordinates as intelligent, hard-working, and creative, but they also find him to be arrogant, confrontational, short-tempered, intolerant, and self-promoting. Morale is not good within his group, and earlier this week, two people on John’s team complained to you about how he has been treating them.
(3) John is up for his review. At the time you hired him, you implicitly promised that he would be promoted to national sales manager within one and a half years, which would quadruple the number of employees he supervises. You fear that if he is not promoted, he will leave the company and go to your competitor, taking with him many of the company’s accounts. Likewise, you are concerned about the effect his promotion would have on the rest of the team.
►Case question:
How would you handle the situation?
►Case task:
Prepare a response (typewritten, font: Times New Roman 12, double space) to the following case question:
How would you handle the case situation? What professional or personal experiences would you draw upon to guide your actions?
The length of your response should vary between 500-600 words.
‘SHOW-3’ POINT
►Now that you have got deep insights into such brilliant types of research concerning Leadership, ENACT a brilliant talk/presentation on ‘THE TRUE LEADERSHIP IS...’
‘SHOW-4’ POINT
►Team up with your classmate to perform the role play below. This should take 5-10 minutes. Afterwards the whole class evaluates the performance.
It is a few weeks before Christmas. You are a consultant employed by GL Consulting. You are working on a project for a champagne producing company. Today you need to perform an observation study in the champagne sorting department. You have spoken to the supervisor earlier today announcing your plans, but he wasn’t thrilled to see you on the shop floor during the busiest time of the year. You are going to meet him/her in his/her office to try to convince him/her to allow you on the shop floor to do the observation.
‘SUMMARY’ POINT
►Translate the phrases below into Russian and make them stick in your mind:
to instill confidence and inspire loyalty/trust
to tolerate chaos and lack of structure
rapid resolution of problems
to feel ownership of the firm and its ideas
to rely on good interpersonal relations
to make decisions (quickly and decisively) without reference to anyone else
to make decisions in a short time frame with imperfect data
to create de-motivation and alienation of staff
to make it to the top
to deal swiftly with conflicting demands without being sure of their facts
to call for a strong stomach
to need cast-iron evidence before making a decision
to deal with complicated and many-sided issues
to extract the crucial point from complexity
to devise an effective strategy
to focus on what really matters
ego-boosting personal ambition
a knack for developing talent
to deploy the talents in the right/best place
to convey your skills to those around you
to call for resilience and flexibility
to preach by deeds
a fledgling company
a product flopped disastrously in the marketplace
business circles
‘TRANSLATION-1’ POINT
►Translate into English using the expressions from ‘Summary Point’:
(1) Что такое лидер? Какие качества определяют истинного лидера? Существует ли разница между лидером и менеджером? Если существует, то в чем она заключается? Например, если сравнивать лидеров и менеджеров на основе такого параметра, как позиция по отношению к достижению цели, можно прийти к следующему выводу: менеджеры склонны принимать безличную, иногда даже пассивную, позицию по отношению к достижении цели. Цели менеджеров возникают из необходимости, а не страстного желания и, следовательно, глубоко укоренены в корпоративной культуре организации, которой они служат. Такие менеджеры постоянно следят за тем, как меняются вкусы и потребности потребителя, которые в конечном итоге определяют, что будет производить компания. Лидеры же по природе своей активны. Они предпочитают действовать, а не реагировать, формировать вкусы и потребности, а не следовать им. Такая позиция создает атмосферу, побуждающую компанию к инновационной деятельности.
(2) В широком смысле, существуют лидеры двух типов: авторитарные и демократичные. Движимый амбициями, стимулирующими чувство самомнения, лидер первого типа, обладая достаточной властью, навязывает свою волю исполнителям, единолично принимает и отменяет решения, не дает возможности подчиненным проявить инициативу, категоричен, часто резок с людьми. Основное содержание его управленческой деятельности состоит из приказов, наставлений, распоряжений и команд. Все новое воспринимается таким руководителем с большой осторожностью или вообще не воспринимается. В управленческой работе он практически пользуется одними и теми же методами. Таким образом, вся власть сосредоточивается в руках авторитарного руководителя.
(3) Такой стиль руководства не мотивирует подчиненных и не стимулирует их инициативу. В результате сотрудники теряют чувство ответственности и сопричастности общему делу, что, в конечном счете, делает невозможным повышение эффективности работы организации.
(4) Лидер, использующий преимущественно демократический стиль, стремится решать вопросы коллегиально, вселять уверенность, внушать доверие, информировать подчиненных о положении дел, правильно реагировать на критику. Такой руководитель полагается на прочные межличностные отношения. Он находится в постоянном контакте с подчиненными, делегирует часть управленческих функций/полномочий, доверяет им.
(5) Демократичный стиль руководства создает атмосферу взаимопонимания, которая в свою очередь способствует «разблокировке» скрытого потенциала подчиненных, вдохновляет их на принятие собственных решений и в конечном итоге помогает им принять активную позицию по отношению к достижению цели организации.