Background

Juwan Howard, a star forward for the Washington Capitals basketball team, was in the second year of an eleven year contract. Howard was now able to claim free agency, thanks in part to the previous General Managers allowing an option at the end of year two. This option clause, ostensibly to allow Howard to prove his worth as the fifth player chosen, was a gamble on the Capitals side that did not pay off. Howard ended up becoming a superstar, worth well more than the $3.5 million that Howard was originally paid. Now, as a bona fide superstar, Howard was demanding $100 million. This would make Howard the first player in NBA history that earned more than $100 million over the term of a contract, which was limited to seven years by arbitration agreements.

The road to $100 million dollars is not direct though, and there were several key players in the negotiation. Howard and his agent, David Falk, were aiming for the best deal possible. Capitals General Manager Wes Unsfeld did not want to lose his star player, especially in light of his team not having made the playoffs for eight years. The only serious competitor vying for Howard was Pat Riley of the Miami Heat, a team with many stars and a winning club. Even though the principals need to work with each other in the future, there were some elements of distributive bargaining along with the expected integrative bargaining.

Intangible Benefits

Howard

Howard loves living in Washington, and in fact had put down some roots there.  Howard also had adoring fans who loved him in Washington. He was the big fish in Washington athletics, and could always count on good press and the ability to get his other, non-basketball, projects positive public relations. In Miami, however would have to share the spotlight with other big names like Mourning and, since he had not proven himself there yet, might be setup by the press for any failings of the Heat. This is what happened with the Kobe Bryant and Shaquille O’Neil pairing in Los Angeles.

Riley

One of the intangible benefits that Pat Riley could receive was having a “dream” team again. When Riley coached the Los Angeles Lakers, he continued in the tradition of earlier Lakers dynasties. With several very high-profile players, Riley and the Heat could expect to garner much publicity. It would also increase his respect in the basketball world making him a giant amongst big guys!

Unseld

Unseld needed a superstar on his team, and without Howard the prospects of finding one did not appear that strong. Unseld also needed to make his offer appear fair without compromising the clubs financial future and not make it so low that there would be negative publicity.

Tangible Benefits

Howard

For Juwan Howard the major tangible benefit is that Miami is paying a lot more money. Miami is also offering many perks such as a limousine and luxury suites when on the road.

Riley

Riley knew that there was some exposure to the leagues salary cap, but believed that the a strict interpretation of the collective bargaining agreement would leave the Heat under the cap. This would allow Riley to spend all the money that could be allocated to salaries, a large expense. The upside to the spent money, if the team could perform, was more revenue from ticket sales, sponsorships, and other merchandise.

Unseld

Unseld needed a superstar to promote a lackluster basketball team. Without Howard it would be harder to recruit other superstars to play on the team. With Howard, fans would continue to support the team, if not the coaches, and if a second star player could come on board, Rod Strickland was mentioned, the team could become contenders. With more revenue, better players, up to the salary cap, could be brought in and gross reciepts would increase.

Costs

Time was of the essence for all the negotiators, but especially for the two teams. Howard could wait and appear to not care if he missed out on some of the season. Riley on the other hand, had to have a deal signed with Howard in order to finish contracts with other players on the team. The Heat had to know what money was left to avoid the salary cap, but could not know that until the Howard contract was signed. Riley only made one main offer which was very high signalling that he wanted this negotiated quickly. Unseld was less constrained by time, but still needed an answer so he could find another player if he needed to.

Risks

Howard

The primary risk to Howard was image. Even though he was pretty much the one with power in this negotiation, if he did not meet or exceed expectations he could be traded. A clause in his contract needs to specify that being traded does not nullify the existing contract, and most sports contracts also include an injury clause. If Howard received a career ending injury what would be the fair thing expect the team to provide. Certainly the team should not have to pay his complete contract, but some compensation is certainly justified. Howard could also hurt his chances in future re-negotiations if he attacked this negotiation strictly from a distributive bargaining viewpoint. Sometimes the other side needs to win something, especially when the parties will be negotiating in the future.

Riley

If the new team, with Juwan Howard, did not perform as expected, fans and the press could be brutal. If fan support started to wane, ticket sales and other merchandise sales could decline and that would leave less money in the future to replace and trade other players. If there was a personality conflict, especially egos colliding, the negative publicity could force the Heat to shop one of the superstars to another club, this could be at a loss since the contract needs to be fulfilled no matter who ended up with the player.

Unseld

Unseld had two major risks, one if Howard accepted the contract, and another if Howard left. If Howard stayed in Washington with the final contract offered, Howard could later feel cheated, especially if in the near term another superstar player gets a contract worth more than what Howard agreed to. If Howard ends up in Miami, the local press could put pressure on Unseld and the team owner for not coming up with a better offer. This could be especially brutal if Washington repeated their lackluster seasons and Howerd goes on to help Miami win big.

Conclusion

Not being privy to the minds of all those involved, I am drawing some of my own conclusions. The Miami Heat, and especially Pat Riley seem to know what they wanted and were willing to pay the absolute maximum they could. It ended up that they did not take into account the players union and the league nullifying their contract. Riley also appeared to be much more of a win-lose negotiator, while Unseld was more interested in both Howard and Washington winning, both on and off the court.

Why Strategic Planning is Important

Maywood Entertainment is a prime example of a company, which if not in the intellectual property business, would have been forced to go out of business since no strategy or focus exists. Strategic planning can be simply defined as a set of decisions, leading to actions which further the company’s objectives (Pearce, II & Robinson, Jr., 2004). Jay Abraham states “strategy is the master purpose your business is all about” (Abraham, 2002, p. 3). Tony Robbins, the motivational speaker, also notes that strategy is most likely one of the most overlooked facets of business life (Abraham, p. 3). Most companies, including Maywood Entertainment, are tactical not strategic. Formulating a strategic plan for Maywood Entertainment will increase results and allow more focus when implementing the tactics required in the day to day decision making process.

Maywood Entertainment needs to understand fully its competitors and in what markets it needs to compete in and who it should compete with. Product selection, marketing, sales, and finance are currently all being decided in a tactical fashion, there is no formal roadmap of how the products fit into the “big picture,” or strategic vision of the company.

Many opportunities exist for strategic partnerships, joint-ventures, and outright selling off of certain copyrights. A strategic plan will highlight the highest performing parts of May,wood Entertainment and allow the lesser performing parts to either be repurposed or outsourced. Long-term objectives can be created and old business assumptions will be questioned.

Much of the intellectual property of Maywood Entertainment is sound recordings. The current state of the music business has changed since these recordings were made. Rampant piracy has diminished the value of recordings. Digital delivery methods have caused the sharp decline, 20% in the first three months of 2007, and another 16% in the first half of 2008, of Compact Disc sales (Smith, 2007; Garrity, 2008). A strategic plan must determine what to do with the existing copyrights and what, if any, new products can be created. With the following in mind, the strategic plan must include a vision for these products that takes into account the current realities in the music industry.

Using the strategic management model presented by Pearce and Robinson (2005, p. 13), will formalize the method for creating the strategic plan. Since Maywood Entertainment operates in an entrepreneurial mode, the strategic management model will allow the principals the ability to see the big picture and a view of what the final plan should encompass. Even though the principals of Maywood Entertainment are familiar with concepts like mission statements, analysis, long-term objectives, and action plans, the day to day running of a small business has gotten in the way of implementing these ideas.

Four Functions of Management

Plan

The first function of management is planning. Planning takes place at all levels, from the C level to the line managers. A strategic plan allows these management levels to be focused on the same goals and objectives. C level management, by defining the broad corporate strategy, can pass its vision to the middle and lower level managers. The middle and lower level managers can implement tactics to achieve the strategic goals of the company.

Organize

With a strategic plan, managers have an easier time organizing. Tactical reactions, which make up the bulk of many businesses “planning,” are less needed. The focus of the company is sharper and managers can spend time organizing what is truly needed to achieve the strategic vision and not waste time on superfluous issues.

Direct

Managers, by having a strategic plan to follow, can more easily direct staff. In a tactically run company, it is much harder to direct due to multiple distractions and crises that need to be attended to. Staff also knows what the focus of the company is. Staff is also much more compliant since they understand the reason managers are asking them to do certain tasks.

Control

Having a strategic plan makes controlling much easier. The strategic plan, and by application, the tactics used, provide a very specific set of goals and objectives. These goals and objectives can be monitored and improved on over time. Corrective actions can be taken earlier if managers understand exactly what the objectives of the company are. On the contrary, companies working in a tactical mode only often have conflicting objectives that are hard to measure and control.

Conclusion

Maywood Entertainment, and all companies for that matter, needs a strategic plan. It is very easy, especially in smaller, entrepreneurial companies, to overlook the importance of creating a vision for the company. In the midst of running a business, many crises come up that prevent the creation of a strategic plan. The principals of Maywood Entertainment need to find the time to create a strategic plan to move the business forward effectively. Without a strategic plan, the company will likely never grow and could possibly shut down.

References

Abraham, J. L. (2002). Nine drivers of upside leverage & exponential business growth. Rolling Hills, CA: Abraham Publishing Group, Inc..

Garrity, B. (2008, July 3). CD sales plummet further. New York Post, p. 29.

Pearce, J. A., II, & Robinson, R. B., Jr. (2004). Strategic management, Formulation, implementation and control (9th ed.). Boston, MA: McGraw-Hill.

Smith, E. (2007, March 21). Sales of music, long in decline, plunge sharply: Rise in downloading fails to boost industry;A retailing shakeout. Wall Street Journal, p. 1.

Many people think of globalization as the transfer of jobs to foreign countries. While this is certainly one part of globalization, a true definition would have to include the interconnectedness of everything around us. The interconnections are evidence of the true nature of globalization.

Especially in the free world, very little is produced or created in only one country. Parts, labor, and transport almost always cross international lines at some point in the product cycle. Even service industries are affected by globalization. Many services, or parts of the service, are now performed by people or companies in foreign lands. This is especially true since the internet has made borders disappear and places even the smallest companies in front of potentially millions of customers.

Major Drivers of Globalization

Communications

Communications advances, specifically the internet, are certainly one of the major drivers of globalization. The ease of conducting business across the internet and the equalizing effect allows smaller businesses located worldwide to compete with larger firms.

Transportation

Transportation is another major driver of globalization. In fact, without the inventions of the jet airline, super-freighters, and containerization (Hill, 2009), costs and time would be increased for doing business outside the local area, thus eliminating any advantage for globalization. Transportation, along with technology, has made the world a much smaller place, and much easier to do business in.

Tariffs and regulations

A third driver of globalization is the reduction in both tariffs and regulations. Most advanced nations have lowered or eliminated trade barriers. The global issue of tariffs and regulations has been codified in the General Treaty on Tariffs and Trade (GATT), specifically the eighth round commonly called the Uruguay Round (Hill, 2009). The GATT is a broad set of standards covering everything from products, services, trademarks, patents, copyrights, and other trade related issues. Under the GATT, tariffs in 7 Western countries and Japan have dropped from an average of 22.6% in 1913, to 3.5% in 2005 (World Trade Organization, 2005, as cited in Hill). By lowering barriers to trade, a more attractive business climate for foreign companies and products is created.

Effects of Globalization

Globalization presents both challenges and opportunities. Since the news media tends to focus on bad news, the average person only hears about the negative aspects of globalization. Certainly many effects of globalization that help consumers and businesses can be found, and while many scream about losing jobs, they certainly do not mind the cheaper products and services which result from globalization.

Competition

A company can benefit from globalization by entering new markets. This has the effect of increasing not only brand presence, but potential customers. This is also a two edged sword, foreign companies can enter the domestic markets as has been evidenced by the consumer electronics industry and the automobile industry.

Price

One of the most obvious effects of globalization is price. Not just the final price of the product or service, but the price at all stages of the product cycle. Many economists point out that the market reaches optimal efficiency when artificial barriers to trade are removed. This certainly applies to globalization. Companies can concentrate on their strengths and outsource their weaknesses to the cheapest, most efficient, and possibly foreign company. This has the net effect of lowering prices in most non-monopolistic industries.

Jobs

Much has been made about jobs in the global economy. While a factory closure in one country causes very visible job losses in the community, most economists again point out that globalization is generally a net boost for jobs in the domestic market. In fact, Simon Cox points out that while trade displaces workers in industrialized countries, corporate investment in foreign countries creates new jobs by increasing demand for their own products (Cox, 2006). Of course, for the employee who is downsized, this fact is not comforting.

Privacy and Security

With more of the service industry in the United States going to overseas companies and employees, the issues of privacy and security become much more important. From tax returns to medical diagnosis, a growing amount of private information is flying through the internet. Foreign entities do not have to follow the same laws that are present in the host country. What happens if private medical or tax records get posted on the internet or leaked to the news media? Certainly the company contracting the information could be held liable, but often little can be done to the entity which disclosed the information.

The same holds true with security. Increasingly more engineering is done in other countries, even the United States Department of Defense contracts manufacturing and weapons design to non United States companies. What happens if these once friendly countries suddenly switch sides? What about a rogue employee or executives? These questions raise serious issues about the current trend in business and government to allow the market to have free rein in the quest for ever cheaper products and services.

Regional Trading Blocs

Regional trading blocs are areas of free trade created by treaty. Other reasons for regional trading blocs exist as well. One reason is to form barriers to businesses not in the trading bloc and promote those that are. Some trade blocs, like the European Union (EU), have loftier goals of formulating not just economic treaties, but social and political conformity as well.

NAFTA

Perhaps the best known trading bloc in the United States is the North American Free Trade Agreement (NAFTA). NAFTA was signed into law on January 1, 1994 and lowers or eliminates tariffs between the United States, Canada, and Mexico on most products within 15 years (United States Department of Agriculture [USDA], 2008).

CAFTA

The United States is also involved with other Central American and Caribbean countries under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). This bill is meant to lower barriers to United States agricultural products, with the complete elimination of agricultural tariffs with only four exceptions the final goal. The CAFTA-DR also leveled the playing field for United States companies in the CAFTA-DR treaty by dropping tariffs in host countries and allowing service providers and investment opportunities to enter the region.

FTAA

Proponents of CAFTA-DR and NAFTA are hoping these treaties can be the model for a hemisphere-wide Free Trade Area of the Americas (FTAA) treaty. The FTAA would be the largest free trade area in the world with 34 economies, dwarfing even the EU (Enterprise Florida, 2008).

References

Cox, S. (Ed.). (2006). Economics: Making sense of the modern economy (2nd ed.). London: Profile Books Ltd..

Enterprise Florida (2008). What is CAFTA. Retrieved September 25, 2008, from  http://www.caftaintelligencecenter.com/subpages/What_is_CAFTA.asp

Hill, C. W. (2009). International business: Competing in the global marketplace (7th ed.). New York: McGraw-Hill/Irwin.

United States Department of Agriculture (2008). North American Free Trade Agreement (NAFTA). Retrieved September 25, 2008, from http://www.fas.usda.gov/itp/Policy/nafta/nafta.asp

Background

Joe Gibbons is a vice-president at MegaLights, a lighting manufacturer. Joe has been with MeagLights for 38 years and will retire in two years. Joe’s assistant vice president is Charles McNeil, who was brought on board one year ago to take over for Joe when he retired.

Charles is concerned about his not being invited to participate in the five year plan that Joe is creating for the plant. Charles is understandably upset by his exclusion and has confided you that this situation is causing him stress and is probably affecting his relationship with Joe.

Strategy

Joe has been an employee for many and he may have a reason for not including Charles in the conversation. Since you have only heard Charles side of the story, it is imperative that you hear what Joe has to say. Joe still has two years left and it is important that he maintains authority, but not at the expense of the company.

Obviously there is tension between Joe and Charles and it is important to find out what caused that tension. It seems to be a classic case of the old employee and the young upstart. Could Joe feel challenged by Charles? It is very important that the outcome be beneficial to both as well as the company. With only two years to go until retirement, there may not be time to find a new replacement and have that new employee trained. There is also not any management talent below Charles, so it is important that Joe and Charles have an amicable relationship.

It is possible that the problem is not really a personality conflict between Joe and Charles. Since the two work closely together, some other issue may be causing friction that is manifested like an old married couple that knows how to goad each other. After hearing both sides, it will be more apparent if it is an interpersonal conflict or an intrapersonal conflict.

It is next important to find all the actual causes. It could be a resource conflict where Joe does not want to give up control, or maybe is having doubts about his worth when he retires. Charles also may be “feeling his oats”, and seeing the inevitable shift in power, has decided to assert himself more. The most important objective is to get the two talking, and even if they are never friends, at least have a business relationship that is everyone’s interest.

Conclusion

Ideally, both Joe and Charles will collaborate on the new five year plan. The plan will be Joe’s legacy and Charles roadmap. The first objective is to get both sides of the story, and then if necessary bring the two parties together. What happens after that is conjecture, but in the ideal world the two parties can work together and build the future of MegaLights and the legacies of both. In the event that no easy solution is found, then an arbitration model needs to be implemented.

In the case of the arbitration scenario, the arbitrator could be the senior vice president. The needs of MegaLights come before the interpersonal relationship of Joe and Charles, and drastic measures, (i.e. replacing one or both), may need to implemented. It is better to deal with this sooner rather than later and an independent mediator may need to be brought in to present a face of neutrality.

Rowe’s Four Styles of Creative Intelligence (2005)

Intuitive

Intuitive intelligence is characterized by experience and is results driven. Many of the top CEO’s are known for intuitive intelligence and are guided by years of experience. These people generally do not think outside the box, but have so much experience that decision-making is very easy. Intuitive leaders are who most people would identify with as the crusty C level executive, the grizzled veteran of many business battles. Through self-confidence and the knowing the facts behind the issues, intuitive leaders are usually talented strategists with little use for indecision.

Innovative

Innovative intelligence is characterized by systems and data. Innovative people are drawn to precision and very specific problems. Albert Einstein could be thought of as a quintessential innovative creator. Innovative people are known for their single-mindedness and Einstein certainly fit that profile. Einstein always had a clear vision of a specific physics problem and could also visualize the solution (The Nobel Foundation, n.d.). This is similar to other giants of innovative thinking like Nikola Tesla. Innovative leaders have the hardest time motivating and influencing the workforce. Innovative leaders, being so single-minded, tend to work on a problem to the exclusion of others. While talented tacticians, many died poor due to lack of strategic planning skills.

Imaginative

When most people think of creativity, they probably think of artists and musicians. Thus, imaginative intelligence is the most known of the four types. People with imaginative intelligence can clearly visualize solutions and most of the notable “outside the box” ideas are products of this creative intelligence. Creative intelligence is characterized by leadership and artistic tendencies. Rowe (2004) mentions Winston Churchill as an example of this type of mindset; at once imaginative, inspirational, and a prolific writer and artist. Other imaginative leaders would include Rembrandt, Richard Branson, and Benjamin Franklin. By the shear appearance of getting ideas from thin air, imaginative leaders motivate the workforce through awe and talent.

Inspirational

Inspirational intelligence is characterized by selfless service and commitment to social change. Jesus Christ would certainly be classified in this mindset. He could deliver soaring oratory and his passion for change led to many followers and a legacy lasting for more than 2000 years. He, like others after him, was willing to die for his convictions. A visionary, Jesus Christ led a social, moral, and legal rebellion, much like Martin Luther King, Jr. would do in the 1960s. Inspirational leaders can motivate a workforce through passion and selflessness.

Mental Models

How the brain processes and ultimately uses to make decisions about data is called a mental model (Wind & Crook, 2005). Several forces throughout all phases of life can influence the how an individual envisions the world around them. Wind & Crook identify five forces that impact a person’s mindset.

Five Forces

Many forces have an impact on the way a person’s mental model is influenced. Five forces have been identified by Wind & Crook (2005) and include; (1) education, (2) training, (3) influence of others, (4) rewards, and (5) personal experience. An individuals experience and past failures and successes become ingrained in the psyche. In order to avoid a past mistake or recreate a previous success, the individual relies on these old mental models.

Education

Education may influence the mindset the most broadly, forming the foundation of an individual’s mindset (Wind & Crook, 2005). In the broadest sense, education is the common glue that binds societies and communities. In the United States and some other western cultures, a liberal arts education is the norm. This gives the recipients a similar background in which to view life. Contrast that with cultures like Cuba which use the Russian system of specialized education. In these countries students are given only a minimal amount of schooling in general education; the majority of class time is spent on the chosen, or chosen for them, subject.

Training

Using the example above, individuals in the liberal arts based schools eventually start getting trained instead of getting educated whereas individuals in the specialized school systems reach this point much earlier. This may occur after high school, or maybe in the upper division classes in a university. Training is a much more visible force on the mindset. A musician is going to have a different way of seeing the world than an economist. A danger exists for training to stagnate and not allow for changes needed in life.

Influence of Others

Family, friends, experts, and mentors, all have an influence on an individual’s mindset (Wind & Crook, 2005). This influence can be negative or positive. Late night infomercials may influence some to believe that all doctors are quacks, and only the huckster’s medicine is reliable. Other influences are media outlets and publications. Certainly listening to talk radio or talking heads on the television is going to affect an individual’s view of the world. The influence of family and friends, while possibly changing over time, also plays a critical function, especially in the formative years, in mindset. One of the reasons that friendships tend to come and go is related to the influence of others. People like to be around like-minded people and when mindsets change, so do all but the strongest friendships.

Reward

Individuals want to be accepted. They also like to feel special. Rewards influence mindset by appealing to the part of the mind that likes pleasure. Peer acceptance is a pleasurable and fundamental goal for most individuals. Monetary rewards for some action are also pleasurable. Striving for rewards influences mindset and through it morals. Rewards can seem so enticing that crimes may be committed to receive them, or the quest for acknowledgment can overwhelm even the most upstanding person. Rewards can also shape good behaviors. A business goal, when met, may reward a bonus or extra time off.

Personal Experience

The reliance on experience can create both opportunity for success as well as failure. Experience can be used to apply knowledge not necessarily related to the problem at hand. This application of cross-experiential knowledge creates a new vision or approach to solve the problem at hand. Experience can also be limiting by allowing an individual to only see what they already known. New ideas are not apparent and the same old, possibly inefficient, processes are used.

References

kolbe.com (n.d.). Kolbe A™ Index – Measures instinct or conative-based actions – Kolbe.com. Retrieved September 11, 2008, from http://www.kolbe.com

Rowe, A. J. (2004). Creative intelligence: Discovering the innovative potential in ourselves and others. Upper Saddle River, NJ: Prentice-Hall.

The Nobel Foundation (n.d.). Albert Einstein biography. Retrieved September 11, 2008, from http://nobelprize.org/nobel_prizes/physics/laureates/1921/einstein-bio.html

Wind, Y., & Crook, C. (2005). The power of impossible thinking: Transform the business of your life and the life of your business. Upper Saddle River, NJ: Pearson Education, Inc..

Creativity

Creativity can essentially be defined as coming up with an idea. In and of itself, creativity is not that useful to companies. The creative process can be thought of as the starting point for a company to innovate and ultimately design a product (von Stamm, 2003). Many experts suggest that unlike development and implementation, creativity can not be produced by a team; it is a wholly individual process.

Creativity is related to experience not divine intervention which is what many laypeople believe. An example of that would be musical improvisation; it can be taught and the more experience a student has with music the easier the student can put together musical fragments subconsciously to make a coherent improvisation. Without this experience, the student would make noise. There is little doubt that certain individuals are more creative than others, but everyone can learn techniques to stimulate the creative process as long as sufficient motivation and encouragement exists.

Innovation

Innovation means different things to different people. Most modern definitions include differing levels of innovation. These include things like process improvements; new products, both to the company and the world; new markets for existing technologies, and disruptive or revolutionary technologies. Companies need to make certain that existing knowledge or expertise does not prevent innovation and innovation is truly about a frame of mind (von Stamm, 2003). Innovative companies combine all three aspects of improvement, creativity, innovation, and design. These innovative companies have a strategic vision allowing them to culturally encourage these processes.

Design

Perhaps the most elusive process to define is design. Design has been broken down into engineering, or production design, and artistic design, although many other definitions exist. Basically design, as it is relevant to creativity and innovation, is figuring out how to make something better and requires a balance of both engineering and art. The result of design does not necessarily refer a product, but could be a business process or service. Design is often confused with creativity, but they are two sides of the same coin. Von Stamm (2003), suggests that “design is the conscious decision-making process by which information (an idea) is transformed into an outcome, be it tangible (product) or intangible (service)” (p. 12). The key difference between design and creativity is conscious versus unconscious processes. Design is creative, but it is not creativity. Design refers to some type of tangible outcome whereas creativity concerns itself with creating an idea. Designers are oftentimes the creators and many of the skill sets are shared, but they do not have to be the same person. As stated above, creativity is a singular, unconscious task; design, as a conscious process, often lends itself to group settings and is generally more accepted as a business process with many organizations having design teams either formally or informally.

Conclusion

Strategically an organization must balance innovation, design, and creativity in order to stay competitive. Innovation, design, and creativity all overlap to some degree and organizations must nurture and encourage all three. Creative staff needs freedom to experiment and synthesize, but also need constraints and objectives. Managers must understand that analyzing and quantify all aspects of a creative team or employee is not always possible since many of the outcomes are often based on intuition, not measurable results (von Stamm, 2003). Without the creative process, and ultimately its implementation and design, companies are in reality copying other ideas and never innovating new products. This leads to a company that is more tactical than strategic and an over reliance by management to react to the market instead of leading the market.

Reference

Von Stamm, B. (2003). What are innovation, creativity and design?. In Managing innovation, design and creativity (pp. 1-18). West Sussex, England: John Wiley & Sons Ltd.

Why Build a Team?

Real teams are not just a group of people thrown together by management. High performance teams need to be built with a purpose in mind and have proven to increase an organizations competitive advantage. Motorola for instance relied heavily on teams to surpass its Japanese competition in producing the world’s lightest, smallest, and highest-quality cellular phones (Katzenbach & Smith, 1993, 15).  Other companies which rely on teams include Ford and 3M. Creating a high-performance team oftentimes results in an unbeatable competitive advantage.

Teams are not just for large organizations. All organizations need to be able to react swiftly and decisively to threats and opportunities. Building a diverse, cross functional team increases any organizations ability to respond strategically and tactically.

Another advantage of building teams is creating less dependence on experts, either internal or external. This leads to the benefit of allowing an organization to become self-managed. An organization can not become self-managed if it does not allow individuals “to be active co-creators, not passive recipients of the design process” (Purser & Cabana, 1998, 215).

Steps to Building a High-Performance Team

Merrelyn Emery provides one example of effective team building titled, “Participative Design.” Emery’s approach assumes the best designs come from employees who are under review. The Participative Design process combines a team’s individual perspectives and experience into a concrete knowledgebase, owned by the team, not forced on it by upper management.

The Participative Design Session is usually two days and involves anywhere from 24 – 36 people. The session consists of three phases; analysis, redesign, and implementation (Purser & Cabana, 1998, 216).

Heathfield

Susan Heathfield stresses the ultimate goal of team building is “striving to improve results for customers” (Heathfield, 2007, 1-3) and suggests 12 Cs for building a team:

1. Clear Expectations – Are expectations communicated effectively?
2. Context – Team members must know why they are on the team.
3. Commitment – Team members have to be motivated to be on the team.
4. Competence – Do all team members feel the team is comprised of competent people?
5. Charter – A team needs a charter and assigned responsibilities.
6. Control – A team needs to be empowered to bring about the results described in the charter.
7. Collaboration – Team members need to understand team development, roles, and responsibilities.
8. Communication – Team members need to communicate with each other and the organization effectively.
9. Creative Innovation – The organization must truly want change to be affected from this team collaboration.
10. Consequences – Both rewards and risk must be clear and the team members must feel accountable.
11. Coordination – Teams must understand the leadership hierarchy and ultimate customer.
12. Cultural Change – The organization must recognize the differences between the traditional business hierarchy and the team building model.

How Cultural Diversity and Demographics Impact a Team

Culturally and demographically diverse teams can lead to greater creativity and innovation. Diverse teams “leads to a better diversity climate (as measured by employees’ assessment of that climate) and greater levels of support for diversity-related initiatives” (Naff & Thompson, 2000, 12).

One interesting study by Rogelburg & Rumery (1996) assigned groups a male-oriented task. As the proportion of males increased, the decision outcome was better. However, the overall winner was a team with one woman. Another study by The American Management Association (1998) found ethnically diverse teams to have better performance outcomes.

Diversity is not always good for a team. People prefer to work with people like themselves and are less attracted to working with people unlike them. Group cohesiveness can suffer and a negative climate can be the result. When cohesiveness is weak, job satisfaction and performance can also suffer.

Relational demography, pioneered by Ellen Berscheid, Elaine Walster, and Donn Byrne, proposes that an individual’s demography affects a team. An individual with similar demographics is more likely to fit into an existing group than an individual with different demographics (Naff & Thompson, 2000, 4). This is important for a manager to understand especially in the context of adding new individuals to an existing team. Already existing teams have their own cultural identity and team cohesion may suffer if caution is not taken when adding individuals.

Conclusion

Scores of books have been written on effective team building and many methods exist for building teams. No matter which method is ultimately decided on, an organization must accept the changes in organizational culture which will inevitably occur. Managers must also understand the problems and opportunities diversity and demographics have on a team.

Building a high-performance team is an ongoing process. A good start for any manager is to:

• Encourage team cohesion by creating tasks which require interdependence on other team members.
• Make sure the team is empowered to complete the tasks they are being asked to do.
• Hold the team accountable and create an incentive policy which holds the team accountable.
• Have clear, consistent objectives and open communications.

References

American Management Association (1998). Senior Management Teams: Profiles and Performance. Management Review, 87, 37-44.

Heathfield, S. (2007). Twelve Tips for Team Building: How to Build Successful Work Teams. Retrieved October 29, 2007, from http://humanresources.about.com/od/involvementteams/a/twelve_tip_team.htm

Katzenbach, J. R., & Smith, D. K. (1993). The Wisdom of Teams. Boston: Harvard Business School Press.

Naff, K. C., & Thompson, R. C. (2000, August). The Impact of Teams on the Climate for Diversity in Government: The FAA Experience. Retrieved October 28, 2007, from http://www.hf.faa.gov/docs/508/docs/cami/00_27.pdf

Purser, R. E., & Cabana, S. (1998). The Self Managing Organization: How Leading Companies Are Transforming the Work of Teams for Real Impact. New York: The Free Press.

Rogelberg, S. G., & Rumery, S. M. (1996). Gender Diversity, Team Decision Quality, Time on Task, and Interpersonal Cohesion. Small Group Re-search, 27, 79-90.

Ethnicity

Ethnicity refers to selected cultural and sometimes physical characteristics used to classify people into groups or categories considered to be significantly different from others (O’Neil, 2007). Individuals must understand how to differentiate between ethnicity and race. Race, (in the human context), is an artificial definition based on physical characteristics.

In the Spanish speaking Caribbean, a mix of black, white and oriental races exist. These physical characteristics are combined into a resulting mulatto culture. Individuals would most likely categorize themselves as Latino, regardless of skin color or facial features.

An individual’s ethnicity plays a major role in their world view. Black skinned Cubans or Dominicans have more in common with Mexicans or white Cubans than they do with African-Americans. Hindus from India and Muslims from Pakistan also share many of the same ethnic traits, minus of course, the religious influences.

Age

When an individual ages his or her behavior is bound to change. Physically, the body slows down after the age of 25. Mentally, older people learn new tasks more slowly and may be slower thinkers. Older workers tend to use experience and expertise when working and may find it hard to work with complex or confusing stimuli, (Canadian Centre for Occupational Health and Safety, 1997-2006).

Younger workers can work at a much faster pace and filter out distractions, but lack the experience to exploit already existing solutions. In other words, they look at all problems as new problems and don’t have the wealth of problem solving experience of older workers. Younger workers may often “reinvent the wheel”; this can be good or bad depending on the problem being solved. Other studies have shown “that younger individuals are more likely to start a new firm than older ones” (Levesque & Minniti, 2006, 177).

Gender

The battle of the sexes has probably been going on since time began. While many jokes have been made about the differences between men and women, true gender differences are recognizable. History and evolution have favored certain traits differentiating men and women.

Many of the behavioral differences exhibited by men and women result from our history as hunter-gatherer societies. A good amount of evidence points to men having better spatial problem solving skills and new research shows women being better at sense of direction. A study by Joshua New concludes, “women’s minds are specialised (sic) for their ancestral task of gathering the sort of food that cannot run away” (The Economist, 2007).

In the case of fight or flight, women also react differently from men. Women, “react to danger by quieting and soothing their offspring and by affiliating with a group for protection” (Callahan, 2000). Males in the same situation have hormonal changes which prepare them to fight or flee.

Not all researchers are convinced women and men are from different planets. Deborah Cameron cites research in her book regarding four common myths, (1) women talk more than men, (2) men and women communicate differently, (3) men’s and women’s brains are hardwired differently when it comes to language, and (4) men interrupt more than women (Caeser, 2007).

Religion

Religion or lack thereof, plays a fundamental part in a person’s individual behavior. A Christian grows up believing in certain values such as heaven and judgment day. Followers of Santeria and Yoruba based religions believe in multiple orishas or saints from which the follower’s personality derives. Hindus believe in reincarnation and Buddhists believe in self reflection and improvement.

Religion is likely to be a major form of diversity in most organizations. Religion also goes hand in hand with ethnicity. Many times ethnicity determines religion. Understanding the broad social and behavioral differences presented by each religion is important. Managers can not only understand and motivate appropriately, but can take advantage of the behaviors each religion promotes.

Conclusion

Almost all organizations are made up of a diverse set of individuals. This diversity is not limited to race or gender, but also encompasses other factors such as religion, ethnicity and age. Individuals come into the workplace with different values and perceived acceptable behavior.

An organization needs to create a system to manage the diversity present in its workplace. Understanding how different aspects of diversity make up individual and organizational behavior will make creation and implementation of these standards clear. Understanding diversity also helps an organization understand and promote its own ethical guidelines.

References

Caeser, E. (2007, October 23). Talking tosh on Mars and Venus. Retrieved October 22, 2007, from http://proquest.umi.com.ezproxy.apollolibrary.com/pqdweb?index=6&did=1359300721&SrchMode=1&sid=1&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1193165176&clientId=13118

Callahan, S. (2000, Sept 22). GENDER DIFFERENCES : Chemistry or culture?. Commonweal, 127.16, 9.

Canadian Centre for Occupational Health and Safety (1997-2006). Aging Workers. Retrieved October 22, 2007, from http://www.ccohs.ca/oshanswers/psychosocial/aging_workers.html

Levesque, M., & Minniti, M. (2006, March). The effect of aging on entrepreneurial behavior. Journal of Business Venturing  , 21(2), 177-194.

O’Neil, D. (2007, July 25). Ethnicity and Race: An Introduction to the Nature of Social Group Differentiation and Inequality. Retrieved October 21, 2007, from http://anthro.palomar.edu/ethnicity/Default.htm

The Economist (2007, August). Science and Technology: Sex, shopping and thinking pink; Evolutionary psychology. . Retrieved October 22, 2007, from ABI/INFORM Global database. (Document ID: 1325019261)

Why is organizational behavior important to study? If people are an organizations most important asset then understanding how humans behave in organizations will improve productivity. Understanding OB allows better worker relations, more realistic expectations and improves job satisfaction.

Organizational Culture

An organizations culture stems from “the shared beliefs and values that influence the behavior of organizational members” (Schermerhorn, Jr et al., 2005, 9). Every organization has a different culture. For example, at (name changed) Grey Valley Wine and Spirits, the corporate culture expects employees in any position to learn constantly about the industry and then teach clients. The culture also encourages direct communications with any other employee no matter what level on the org chart they are. Other company’s cultures may expect employees to only do their job and not give input at all.

Diversity

Organizations which do not have a culture of encouraging diversity are at a decided disadvantage. In the modern world of global business, not hiring the best person for the job solely because of gender, race, ethnicity, religion or age is not only foolish, but probably illegal.

Some organizations are even going to the extreme of trying to eliminate all subcultures and become truly multicultural. “The multicultural organization is a firm that values diversity but systematically works to block the transfer of societally based subcultures into the fabric of the organization” (Schermerhorn, Jr et al., 2005, 440).

Communication

Two types of organizational communication exist, formal and informal. Organizations of all sizes make use of both, whether directly or indirectly. Formal channels of communication generally follow the chain of command or org chart and are top down. Informal channels on the other hand tend to be more open and spontaneous. Scuttlebutt or gossip is also considered forms informal organizational communication.

Many small companies such as Grey Valley Wine and Spirits rely more on informal communications channels. Small organizations by and large adhere less to formal command structures and all employees are generally more active in feedback and decision making.

Organizational Effectiveness and Efficiency

Organizational effectiveness measures how well an organization is in sync. Even with the best management, superior strategy and flawless execution an organization can be less successful than it could be. Organizations who understand employees as partners stand a much better chance of achieving high organizational effectiveness and efficiency. “Organizational effectiveness is about each individual doing everything they know how to do and doing it well” (NIH, 2004).

Smaller organizations should exhibit more organizational efficiency due to less bureaucratic management. This is not always the case as smaller organizations oftentimes have less clear strategic goals and incomplete systems. Grey Valley Wine and Spirits tends to not have as many mature systems in place for employees. This creates inefficiency as several, and oftentimes conflicting, methods are created by employees and not management. These systems may also conflict with management’s strategic plan.

Organizational Learning

In todays fast paced, global business environment, organizations need to adapt quickly to threats and opportunities. How an organization learns directly affects the speed and efficiency of an organization to handle opportunities and threats. Richard Karash supplies this definition, “A “Learning Organization” is one in which people at all levels, individually and collectively, are continually increasing their capacity to produce results they really care about” (Karash, 2002).

At Grey Valley Wine and Spirits, employees are constantly learning and experimenting. New products are created and new markets serviced based on employee suggestions. Gluten-free beer, a new product, was conceived by a team who were researching new product ideas. The beer was then created by the Brewmaster. After a one year test phase, in which many iterations of the beer was brewed and sampled, a final product was introduced. All employees of the company contributed and in the process learned about the beer brewing process, helping them both professionally and personally.

Conclusion

Understanding organizational behavior increases the opportunity for a successful organization. Gaining an awareness of an organizations culture is necessary for continued diverse growth. In order to attract the best talent to an organization, a culture of diversity and open communication is needed. Once an organization has the best talent it can find, the organization can improve efficiency and have more wide-spread viewpoints to learn from.

References

NIH (2004). Organizational Effectiveness and Efficiency. Retrieved October 10, 2007, from http://clinicalcenter.nih.gov/about/profile/profile_archives/2004/effectiveness.html

Karash, R. (2002). What is a “Learning Organization”. Retrieved October 10, 2007, from http://world.std.com/~lo/

Schermerhorn, J. R., Jr, Hunt, J. G., & Osborn, R. N. (2005). Organizational Behavior (9th ed.). Hoboken, NJ: John Wiley & Sons, Inc..

Example of Chunking Using a Phone Number

One method of problem solving or decision-making is a process called “chunking”. Chunking is grouping or categorizing related issues or information into the smallest, most meaningful unit. Think about how hard it would be to read a 300-page book without sentences, paragraphs, and chapters. Chunking is a naturally occurring process that can be actively used to break down problems and communicate more efficiently.

Even though there is the possibility of losing sight of the big picture while using chunking, chunking allows logical grouping of data for easier understanding. Non-chunked data is harder to remember and many studies support the use of chunking as a memory tool ultimately helping the decision-making process.

How Chunking Works

Chunking works by pre-compiling bits of perceptual data. These chunks can then be recollected and combined into a picture that the mind can use to represent the situation. These chunks are then available for rapid recall. Experts in any field have more of these chunks available for a particular problem domain, which is also called experience. In his thesis, Mark Orr explains that the difference between experts and non-experts is “that due to the nature of their chunks. Expert chunks contain more information than novices chunks” (Orr, 2003, p. 3). This suggests that increasing the information available in each chunk helps perceive the keys to the problem at hand and leads to better decision-making.

The brain can formulate these chunks much better if the data are logically grouped. An important point to note is this chunking process occurs naturally but can be further refined. For instance, a marketing team may have a decision to make regarding a new product. Several ideas are mentioned including advertising, mail, free publicity, and even strategic partnerships. Even these broad chunks may be to big to deal with so the next logical step would be to break these big chunks down into smaller chunks. Advertising could be analyzed as print versus television or radio. Mail could include direct mail, email and coupons, and free publicity may include press releases and soft news. This breaks down the related groups into manageable areas to focus on while still allowing the bigger chunks to be used for summary data.

Chunking as a Motivational Tool

Many studies support the use of chunking as a motivational or learning tool. For example, “among students at community colleges who begin an Associate’s degree program, fewer than half have earned their degree or are still enrolled after five years” (Dins, 2005, p. 1). As a consequence, many community colleges are chunking the curriculum so that students have measurable milestones and are not so overwhelmed with the perceived amount of time and effort needed to finish. Dins writes in her doctoral dissertation about chunking in community college curriculum, “The purpose or possible advantage of chunking is that it will improve the rate of degree completion among community college students by allowing students to complete a degree non-sequentially and noncontinually, leading to better wages and career advancement” (Dins, 2005, p. 16).

Another study on stroke patients done in Hong Kong by Karen Pui Yee Liu, shows that chunking, combined with self regulation and mental rehearsal, “is useful for enhancing the relearning of trained and untrained tasks” (Lee, 2002, p. vi). If chunking can help with relearning, it would appear to also be useful for learning and decision-making.

When Chunking is not Right

Mark Orr, in his dissertation, reports that there is at least one decision making domain where chunking may not be the primary factor involved. He suggests, “in fact, some domains of expertise require dimensional sensitization mechanisms in addition to chunking mechanisms because of the dimensional nature of the domain environment (e.g. race car drivers and radiologists)” (Orr, 2003, p. xx).

Why to use Chunking

The most important reason to use chunking is for easier understanding; non-chunked data is harder to remember. The human brain can hold between 7 – 12 chunks of information at a time. Think how much easier memorizing a social security number is versus a checking account routing number. Both of these are 9 digit numbers, but the social security number is broken up into 3 smaller chunks. The same principal applies to credit card numbers, addresses and phone numbers.

Improving the ability to structure data into more organized chunks enhances the ability to think. There is less time spent on reviewing the data because something was missed or misunderstood. Improving memory constraints increases the ability to synthesize fresh ideas, understand the problem more readily, and view the problem at hand.

A Practical Use of Chunking

In a recent analysis of absenteeism at a major Las Vegas hotel, the concept of chunking was applied. Absenteeism is complex problem with many possible causes. The participants first brainstormed possible ideas for absenteeism (which were themselves chunks). The data was then consolidated into logical categories or chunks. By chunking the ideas, data gathering would become easier to manage. Another side effect of chunking the data into categories made assigning participants to specific research tasks easier.

Conclusion

Even though much of this article discussed memory and learning techniques, understanding that the results of decision-making can be greatly improved by using chunking is very important. The easier these data chunks are categorized, the more these chunks are available to rely on in a particular problem domain. Experienced musicians can follow another musician who is improvising much easier than a novice. Experienced captains can predict tides, currents and ocean conditions better than a novice deckhand. This is all due to the brains ability to synthesize stimuli into chunks and process these chunks into long-term memory for later recall in the decision-making process.

In conclusion, chunking allows logical grouping of data for easier understanding for two main reasons. First, many studies support the use of chunking as a memory tool. But most important, non-chunked data is harder to remember.

Dins, K. (2005). “Chunking” Professional-technical programs to create pathways to degree completion in community colleges. (Doctoral dissertation, Oregon State University,2005). Retrieved May 14, 2007 from ProQuest Information and Learning

Lee, K. (2002). Mental imagery and learning for patients suffered from stroke. (Doctoral dissertation, Hong Kong,2002). Retrieved May 14, 2007 from ProQuest Information and Learning

Orr, M. (2003). Interactions between chunking and perceptual learning in expertise. (Doctoral dissertation, University of Illinois at Chicago,2003). Retrieved May 14, 2007 from ProQuest Information and Learning

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