Properties of Management Fads

1. Properties of Management Fads • They are relatively simple. • They are falsely encouraging. • One size fits all. • Easy to cut and paste. • They resonate with today’s problems. • They are novel but not necessarily radical. • They are legitimized by Gurus and Disciples. Source: HBR 2002

2. American vs Japanese Orgs. Type A Type J Employment Short-term Long-term Decision Making Individual Consensual (nonroutine) Responsibility Individual Collective Eval. & Promotion Rapid Slow Control System Explicit/ Implicit/ Formal Informal Career Path Specialized Unspecialized Concern for Segmented Holistic Employees

3. Theory Z Organizations Employment Long-term Decision Making Consensual (nonroutine) Responsibility Individual Eval. & Promotion Slower Control System Implicit/Informal with Explicit Measures Career Path Moderately Specialized Concern for Holistic Employees (including family)

4. 3 Common TQM Elements 1. Customer Focus 2. Continuous Improvement 3. Teamwork

5. A sampling of Deming’s 14 points 2. Constantly improve every system 3. Eliminate financial goals & quotas 4. Drive out fear 7. Remove barriers between depts. 9. Eliminate annual ratings 10. Education & self-improvement 11. Abandon slogans 12. Cease dependence on mass inspection

6. The Learning Org: A Change in Values Traditional Learning Dimension View Organization Org. Metaphor Machine Organism Main Constraint Capital Creativity Value Stability Change Focus Profits Consumers/Empl. Markets Domestic Global Strategic Obj. Efficiency Effectiveness Structure Hierarchy Work Teams Org. Principle Div. of Labor Synthesis of Minds Leadership Autocratic Empowerment Relationships Competition Cooperation Information Power Source Open Access Daft, 5th edition & Wall Street Journal (2/26/99, p. B1)

7. Data Miners In Search of Excellence Good to Great What Really works

8. 8 attributes of “excellent” firms 1. A bias toward action 2. Closeness to the customer 3. Autonomy & entrepreneurship 4. Productivity through people 5. Hands-on and value-driven 6. Sticking to the knitting 7. Simple form and lean staff 8. Simultaneous loose-tight properties

9. Good To Great: Jim Collins Why some companies make the leap to Great and others don’t Good is the enemy of Great Level 5 leadership First who … then what Hedgehog not a fox – What are you deeply passionate about What can you be the best in the world at A culture of discipline (never lose faith)

10. Good to Great Good to Great Companies – cumulative returns 3X market over 15 years Abbott Labs Circuit City Fannie Mae Gillette Kimberly-Clark Walgreens Wells Fargo

11. What Really Works: William Joyce et al 10 years of data on 160 companies and 200 management practices Identified winners (Walmart), tumblers (LA Gear), climbers (Target) & losers (K Mart) in terms of total return to shareholders & other financial measures Most practices were unrelated to financial performance Found: successful companies mastered 6 practices all not equally important: 4X2 model

12. What Really Works 4 Primary practices: Must do Clear and focused strategy Execute flawlessly Build a performance based culture Make your organization flexible, fast and flat 2 Secondary practices: Pick any 2 Keep and develop talent Leaders who are committed to the business Make industry transforming innovations Growth through mergers and joint ventures

13. Research on Management Fads • Fads tend to display a symetrical life-cycle • discovery • wild acceptance • digestion • disillusionment • only hard core remain 2. • More recent fads are • Broader based • Shorter-lived • More difficult for management to implement • There is little evidence they improve profits • They do have reputational value • They do affect top management salaries Source: 1. Gibson & Tesone AME 2001, 122-133; 2. Carson et al AMJ, 2000, 1143-1158; 3. Staw & Epstein ASQ,2000, 523-556 (quality, empowerment, teams)