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CHAPTER 1 – ORGANIZATIONAL BEHAVIOUR AND OPPORTUNITY CASE STUDY

JOHNSON & JOHNSON: USING A CREDO FOR BUSINESS GUIDANCE

Johnson & Johnson, founded by Robert Wood Johnson and his brothers James and Mead in

1886, has grown into the world’s most comprehensive manufacturer of health care products and

related services for the consumer, pharmaceutical, and medical devices and diagnostics markets.

Today, Johnson & Johnson consists of more than 250 operating companies, employing

approximately 121,000 employees, with more than 50,000 of those in the United States. Johnson

& Johnson has operations in 57 nations and sells products all around the world. Johnson &

Johnson’s product categories include, but are not limited to: allergy, colds, and flu; baby care;

cardiology; dental care; diabetes care; first aid; medical devices and diagnostics; oncology;

prescription drugs; skin and hair care; and vision care. The company’s sales have increased every

year for since 1946, and in 2006, global sales were $53.9 billion and net earnings were $11.1

billion. Moreover, Johnson & Johnson was ranked ninth on Fortune’s 2006 “America’s Most

Admired Companies” list and fourth on Fortune’s 2006 “Global Most Admired Companies.”

The worldwide success of Johnson & Johnson is widely attributed to an unwavering

commitment to a business philosophy that puts customers first and stockholders last. Robert

Wood Johnson II first articulated this business philosophy in 1943; it was called the Johnson &

Johnson Credo. Like his father before him, Robert Wood Johnson II could be dogmatic,

autocratic, and prone to micromanagement. Yet, he was not as inflexible as many people

thought; in fact, he encouraged innovation in every part of the company. There was, however,

one thing about which Robert Wood Johnson II was inflexible adherence to the Johnson &

Johnson Credo. Even after the company went from being family-owned to having public

ownership and trading of its stock in the early-1960s, the Johnson & Johnson Credo has provided

fundamental managerial and operational guidance to which the company has unwaveringly

adhered.

The key points of the Johnson & Johnson Credo address the company’s four

responsibilities. In descending order of emphasis, these responsibilities may be summarized as

follows:

The company’s first responsibility is to meet the needs of everyone doctors, nurses,

patients, mothers, fathers, and others who use the company’s products. Johnson &

Johnson does this by providing quality products that are reasonably priced, and by ensuring

that suppliers and distributors have the opportunity to make a fair profit.

The company’s second responsibility is to the company’s employees throughout the world,

treating them fairly and with dignity, seeking to involve them, and providing them with

competent and ethical management.

The company’s third responsibility is to the various communities where it operates, seeking

to improve those communities and sharing in the burden of such improvements.

Chapter 1 Case: Johnson & Johnson, p. 2


The company’s last responsibility is to the stockholders, seeking to make a sound profit in

order to provide a fair return to the owners and to enable the company to innovate and grow

so that fair returns are maintained in the future.

The full Credo was in a format that people could understand, and Robert Wood Johnson

II demanded that people adhere to it. Very importantly, the company created appropriate

organizational mechanisms to bring the Credo to life, and to support and reinforce it. The

Johnson & Johnson Credo “may sound a bit corny and so may J&J’s devotion to it: It’s posted

in every J&J facility around the world and carved in an eight-foot chunk of limestone at

company headquarters in New Brunswick, N.J. But Johnson made sure everyone bought into it.”

The Credo has served Johnson & Johnson well during normal operating conditions and in

times of crisis, such as in 1982 and 1986 when the Tylenol acetaminophen product was

adulterated with cyanide and used as a murder weapon. During the Tylenol crises, Johnson &

Johnson’s “managers and employees made countless decisions that were inspired by the

philosophy embedded in the Credo.” Tylenol was immediately cleared from store shelves and

the company was very proactive and open in addressing each crisis. As a result, Johnson &

Johnson’s good reputation was maintained and the Tylenol business was reinvigorated.

The Johnson & Johnson Credo continues to guide the company’s decisions and

actions regarding its responsibilities to customers, employees, the community, and

stockholders. The Credo guides Johnson & Johnson’s operations in Africa, Asia and the

Pacific Rim, Eastern and Western Europe, Latin America, the Middle East, and North

America. Ralph Larsen, a former chief executive officer of Johnson & Johnson, maintains

that the Credo provides a constant source of guidance for the company and that it is the

foundation for everything the company does. Although the credo has been revised and

updated at different points throughout its existence, the essential responsibilities endure. To

help ensure the continuing viability of the credo, Johnson & Johnson employees periodically

participate in a survey to evaluate how the company performs it responsibilities.

SOURCE: This case was written by Michael K. McCuddy, The Louis S. and Mary L. Morgal

Chair of Christian Business Ethics and Professor of Management, College of Business

Administration, Valparaiso University.

References: Our Company, Johnson & Johnson, http://www.jnj.com/our_company/index.htm

(accessed August 15, 2007); Product Categories, Johnson & Johnson,

http://www.jnj.com/product/categories//index.htm (accessed August 15, 2007); 2006 Annual

Report, Johnson & Johnson, p. 5, http://www.jnj.v1.papiervirtuel.com/report/2007030901/

(accessed August 15, 2007); Awards & Recognition, Johnson & Johnson,

http://www.jnj.com/our_company/awards/index.htm (accessed August 15, 2007); Our Credo

History, Johnson & Johnson, http://www.jnj.com/our_company/our_credo_history/index.htm

(accessed August 15, 2007); Author unknown. (2003) Johnson & Johnson. Fortune Small

Business (April), Vol. 13, No. 3, pp. 90-93; Our Credo, Johnson & Johnson,

http://www.jnj.com/our_company/our_credo/index.htm (accessed August 15, 2007); Author

unknown. (2003) Johnson & Johnson. Fortune Small Business (April), Vol. 13, No. 3, p. 93; Our

Credo History, Johnson & Johnson,

http://www.jnj.com/our_company/our_credo_history/index.htm (accessed August 15, 2007); Our

http://www.jnj.com/our_company/index.htm

http://www.jnj.com/product/categories/index.htm

http://www.jnj.v1.papiervirtuel.com/report/2007030901/

http://www.jnj.com/our_company/awards/index.htm

http://www.jnj.com/our_company/our_credo_history/index.htm

http://www.jnj.com/our_company/our_credo/index.htm




Company, Johnson & Johnson, http://www.jnj.com/our_company/index.htm (accessed August

15, 2007); Kinni, T. (2003) Words to Work By: Crafting Meaningful Corporate Ethics

Statements. Harvard Management Communication Letter (January), pp. 3-4; Revisions, Johnson

& Johnson, http://www.jnj.com/our_company/our_credo_history/revisions/index.htm (accessed

August 15, 2007); Our Credo History, Johnson & Johnson,

http://www.jnj.com/our_company/our_credo_history/index.htm (accessed August 15, 2007).

This case was written by Michael K. McCuddy, The Louis S. and Mary L. Morgal Chair of

Christian Business Ethics and Professor of Management, College of Business Administration,

Valparaiso University.

http://www.jnj.com/our_company/index.htm

http://www.jnj.com/our_company/our_credo_history/revisions/index.htm




DISCUSSION QUESTIONS

1. From your perspective, what role(s) should business play in the contemporary world?

2. What implications does the Credo have for Johnson & Johnson’s view of the role(s) it should

play in the contemporary world?

3. What implications does the Johnson & Johnson Credo have for the attitudes and job

behaviour of the company’s employees?

4. Would you like to work for a company like Johnson & Johnson? Why or why not?

5. Many organizational behaviour theories use a contingency perspective, emphasizing that the

specifics of a situation must be considered in selecting appropriate action; no one solution

suits all situations. Yet the Johnson & Johnson credo is meant to guide all company

decisions. Discuss how this credo can be applied in operations across the world while still

allowing flexibility to respond to unique situations.



DISCUSSION QUESTION ANSWERS

1. The interpersonal communications model shown in Chapter 8 has several components that

are relevant to Smart Phone usage: the communicator, the receiver, the message, and

feedback. The communicator is the person originating the message. The receiver is the

person receiving the message. The message contains the thoughts and feelings that the

communicator intends to evoke in the receiver. Feedback occurs when the receiver provides

a response to the communicator’s message.

Smart Phones can be conceptualized as a technological device that facilitates interpersonal

communication through e-mail capabilities, texting, access to social networking sites, and the

ability to search for and transfer information, documents and photographs. Messages are

transmitted from the communicator to the receiver through this technology. Each message

contains information that the communicator wishes to share with the receiver. Feedback

occurs through the receiver’s response to the communicator.

2. Smart Phones have transformed the way people communicate within the workplace by

shifting from heavy reliance on face-to-face communication to greater reliance on

communications based on modern communication technologies. Gone are the days when

communication was primarily in person, by land lines, or through what is now called “snail

mail.” In vogue are e-mail communication and instant messaging 24 hours a day, seven days

a week around the globe; company and personal Websites that invite communications from

others; social networking Web sites; intranets to facilitate communication among employees;

extranets to support communication with customers and suppliers; and online forums, blogs,

and chat rooms where people can communicate with anyone who chooses to log on (and

which can be done with impunity and anonymity).

Nick Wingfield, writing in The Wall Street Journal, notes that “mobile workers have been

ditching their desktop computers for laptops that they can take wherever they go. Now road

warriors are starting to realize that they can get even more portability and lots of

computing punch from [S]mart [P]hones.” Many business “travelers are now using

[S]mart [P]hones the way they once used laptops and laptops the way they once used

desktop computers,” and some traveling business people are even “ditching their laptops

entirely and doing all their mobile work from [S]mart [P]hones.”

3. Among college students, Smart phones have taken over the communication landscape. For

example, texting is a dominant form of communication and as most any college student

knows, texting goes on at inappropriate times. Texting during class even when it’s not

allowed is an all-too-common occurrence. The rapidly expanding use of Smart Phones

among college students has been accompanied by a decline in civility and empathy in

interpersonal communication. “Recent research has shown a marked decline in empathy .

A new University of Michigan study finds that empathy among college students has declined

40% in the past two decades. Researchers say one factor may be our reliance on social

media. We’re more apt to be empathetic when we communicate face to face.”



4. Smart Phones, despite all they can do to facilitate communications, have undermined verbal

communication and promoted incivility in the communications process. Texting reigns

supreme! As Joseph De Avila, reporting for The Wall Street, observes: “[F]riends hardly call

each other. People resist protocols that call for verbal communication . People don’t like

using their phones to make calls or listen to voice mails.” De Avila also notes there is a

pervasive expectation that people have instant access to e-mail; rapid replies to one’s

messages are expected too. Another reporter indicates that “[p]eople calling, texting and

responding to e-mails at inappropriate times and places have become an issue in both a

professional and business context.”

However, some business people are rebelling against the intrusiveness of Smart Phones.

Some executives eschew the short attention span that comes with instantly and continuously

being “plugged in” through technology. “They have assistants that handle all their

communication, prefer reading printed out e-mails, and don’t dip their toes in any social

media.” Still, in today’s business culture these executives need to learn when to connect and

when to disconnect.

5. The credo asserts the basic values or criteria that must be met rather than indicating specific

actions must be taken. This means there is wide flexibility to determine appropriate steps. As

long as the results and means of making a decision satisfy the credo, there is room to select

from a variety of options.


CHAPTER 1 – ORGANIZATIONAL BEHAVIOUR & OPPORTUNITY

MINI-CASE STUDY CARMAX: CHANGING THE USED CAR BUSINESS

There are a variety of preconceptions and stereotypes about the used-car business in North

American society. CarMax decided to enter and change the used-car business. In the early

1990’s, many industry analysts were sceptical about the ability of the new kid on the block. By

the late 2000s, CarMax had in fact found success, using its own unique formula rather than

through intensely competitive, cut-throat tactics. They are winning the game in the used-car

industry and they are winning it their way, the CarMax way.1

The CarMax way emphasizes ethics in business, no-haggle pricing, and customer service.

These are the three pillars of the company’s success. While most used car dealers promise that

they do not put structurally damaged cars on their lots, CarMax goes the extra mile in showing

that it does not do so. CarMax does not engage in high pressure pricing or haggling. They are up-

front about their pricing and explain to customers what is going to happen at every step of the

transaction. The low-keyed sales approach was viewed very sceptically in the early years, but it

has not led to low profitability. CarMax averages $1,878 in gross profit on each used car,

compared with $1,700 in gross profit for new car dealerships that sell used cars. This level of

success has led to strong growth.

After more than a decade of success, however, CarMax faced a real challenge to its

business model during the sharp recent economic downturn. Would the company’s three-way

approach be enough to meet the challenges brought about by a weakening economy and slowing

auto sales? While US auto manufacturers and retailers experienced sharp declines, CarMax

bucked the industry trend by continuing to display solid success.

In early 2009, CarMax was named to Fortune’s “100 Best Companies to Work For” for

the fifth straight year.2 CarMax cited the dedication and innovativeness of its many associates

who moved the company forward in the challenging and difficult retail environment of the

period. Rather than pulling in during this period, CarMax associates reached out, as for example,

participation in the company’s Volunteer Team-Builder Program rose significantly among

associates.

In addition to being a great place to work, CarMax invests in its associates and was

named in Training magazine’s “Training Top 125.”3 Each year the magazine names 125

organizations that excel at associate development based on criteria such as training practices,

evaluation methods, and outstanding training initiatives. 2009 was the second consecutive year in

which CarMax was so honoured. In the case of CarMax, the company was cited for three premier

training programs: Extensive Sales Training, BASE Camp, and Culture of Integrity Training.

During challenging and difficult times, some companies cut investment costs aimed at people

development. That can make the company lean, and unfortunately weak. By investing in its

associates during challenging times, CarMax aims to be fit and strong for the long run. Strong,

competent people meet the challenges of difficult times more effectively and successfully.

Chapter 1 Mini-Case: Carmax, p. 8


QUIZ QUESTIONS

1. Why would a person studying organizational behaviour be interested in CarMax

management decisions like corporate strategy and training programs?

a. Because of the impact on organizational productivity

b. Because of the impact on corporate success

c. Because of their impact on union movements

d. Because of their impact on employee behaviour

2. Which discipline would be of particular assistance in helping us consider CarMax’s

organizational culture?

a. Psychology

b. Engineering

c. Sociology

d. Anthropology

3. The CarMax organization is an open system in which internal components interact with

each other and with the environment.

a. True

b. False

4. Which organizational component includes CarMax’s processes for service delivery?

a. Outputs

b. Authority

c. Technology

d. Task environment

5. How would you describe CarMax’s way of dealing with change, compared to typical

reactions?

a. It was not typical, in that people often become rigid and reactive in times of

change.

b. It was typical, in that people usually remain open and responsive in times of

change.

6. Through activities like the Volunteer Team-Builder program and the extensive training

activities, CarMax seeks to build positive attitudes and confidence in its staff. These

attitudes can be considered part of the :

a. Formal organization

b. Informal organization

7. Which organizational behaviour approach emphasizes the importance of employee

beliefs and perceptions, and group norms?

a. Scientific management

b. Hawthorne studies



8. CarMax appears to use a Six Sigma approach to quality.

a. True

b. False

9. Let’s assume that the CarMax training involves employees in many structured activities.

What does research tell us is important for learning to be successful in these structured

activities?

a. Activities must involve groups rather than individuals, so participants learn from

each other.

b. Learning must focus on objective knowledge learned through passive

participation.

c. Each participant must accept responsibility for what s/he does and learns.

10. CarMax seems to have created an organization unlike most used car businesses. This

suggests that CarMax management is more likely to engage in design thinking than

typically-run businesses.

a. True

b. False

QUIZ ANSWERS

1. d. See page 4.

2. d. See page 5.

3. a. See page 6.

4. c. See page 6.

5. a. See page 5.

6. b. See page 8.

7. b. See page 8.

8. b. See page 11.

9. c. See page 14.

10. a. See page 15.



FACEBOOK: OPPORTUNITIES, PROBLEMS, AND AMBITIONS

Not only has Facebook, the social network that was founded in 2004 by Mark

Zuckerberg, experienced phenomenal growth, it has enjoyed an explosion of

opportunities but not without encountering some thorny problems. In February 2011,

Facebook had more than 600 million users, was valued at $50 billion, and was in the

midst of taking substantial online advertising away from competitors.iv

However, issues

regarding the privacy of users’ personal data loomed like ugly storm clouds.

A report issued by eMarketer estimates that marketers will spend $4.05 billion

globally on Facebook advertising in 2011, with $2.19 billion of that total being in the

United States. According to Debra Aho Williamson, eMarketer’s principal analyst,

“2010 was the year that Facebook firmly established itself as a major force not only in

social network advertising but all of online advertising. In 2011, its global presence is

something multinational advertisers can’t ignore.”v

The explosive growth in ad revenue, however, is intertwined with growing

concerns about how Facebook deals with the privacy of users’ information. Facebook

“has a powerful incentive to push people into revealing more information. Facebook

generates most of its revenue from targeted advertisements based on users’ demography

and interests, so the more data users share publicly the more money it can mint from

ads.”vi

However, the data collection practices of Facebook and other social networking

sites “have provoked calls for tougher action by regulators and governments to prevent

web firms from abusing the mountains of personal data they now hold. Danah Boyd, a

social-networking expert, has even argued that Facebook, with its hordes of members

around the world, is now so embedded in people’s lives that it should be regulated as a

utility.”vii

Some privacy critics suggest that Facebook’s privacy policy is little more than a

sham something designed to obscure the social networking site’s real motivation

regarding the protection of users’ personal data. As written in the well-respected

publication The Economist, “[t]he worst thing is Facebook’s underlying prejudice against

privacy. Sign up and it assumes you want to share as much data as possible; if not, you

have to change the settings, which can be a fiddly business. The presumption should be

exactly the opposite: the default should be tight privacy controls, which users may then

loosen if they choose. If Facebook fails to simplify and improve its privacy policy, it will

justly risk the wrath of regulators and many more Facebook suicides.”viii

Facebook has acknowledged the problems with its privacy policy. On a blog

post, Facebook admitted that its “privacy policy has been criticized as being ‘5830 words

of legalese’ and ‘longer than the U.S. constitution without the amendments’ [and]

that privacy policies can and should be more easily understood.”ix

As a partial response

to the privacy criticism, in early October 2010 Facebook unveiled a feature called Groups

through which “users and their friends can place each other in a myriad of social circles,

and choose which bits of information to share with whom.”x Some privacy critics

commended Facebook for developing and implementing the Groups feature because it

gives users more control over their personal data; but it has not met as warm a reception

from privacy critics who don’t like how friends have the ability to add users to groups on

their behalf. xi

Likewise, Facebook’s Places feature, which was launched in August 2010,

has been criticized because it gives online friends the ability to check someone into a

place without that person’s permission.xii



Sunil Gupta, a business professor at Harvard Business School, says that privacy

could be the Achilles’ heel for Facebook.xiii

Although privacy is an ongoing thorny issue

for Facebook, the company is nonetheless forging ahead with other opportunities.

Facebook seeks to become a dominant and pervasive presence on the Internet. The

company’s ambitions are evident in many ways. “The social network is a potential rival

in electronic payments to eBay Inc.’s PayPal, while partnerships Facebook is cementing

with smartphone makers set the stage for competition with Apple Inc. and Google in

mobile services.”xiv

Sheryl Sandberg, Facebook’s Chief Operating Officer, asserts that

“every industry is going to be rebuilt around social engagement [; n]ews, health,

finance, shopping and commerce will be rebuilt by companies that work with us to put

social at the core.”xv

Clearly, the opportunities upon which Facebook is capitalizing have

important implications for existing and potential competitors in a wide range of

businesses. “[M]any Silicon Valley companies increasingly have to decide whether to

treat Facebook like a friend whose reach and user data can help propel their own growth,

or a foe that can become a destructive force.”xvi

Facebook founder and CEO Mark Zuckerberg’s ultimate goal is “to turn

Facebook into the planet’s standardized communication (and marketing) platform, as

ubiquitous and intuitive as the telephone but far more interactive, multidimensional and

indispensable. Your Facebook ID quite simply will be your gateway to the digital world,

Zuckerberg predicts.”xvii

“Zuckerberg makes it clear that he’s still intensely focused

on connecting the entire world on Facebook only now his vision goes well beyond the

site as a digital phone book. It becomes the equivalent of the phone itself: It is the main

tool people use to communicate for work and pleasure. It also becomes the central place

where members organize parties, store pictures, find jobs, watch videos, and play games.

Eventually they’ll use their Facebook ID as an online passkey to gain access to websites

and online forums that require personal identification. In other words, Facebook will be

where people live their digital lives, without the creepy avatars.”xviii

Should people be elated or distressed about Facebook’s desire to permeate human

existence in light of what can happen regarding the privacy of personal data?

Discussion Questions

1. How does Facebook’s privacy management of users’ personal information affect the

behaviour of Facebook patrons?

2. Being a college student you are quite likely a Facebook user. What is your opinion

regarding how Facebook deals with privacy issues? What have you done (or decided

not to do) with regard to protecting your privacy on Facebook (or other social

networking sites)?

3. How can the availability of Facebook users’ personal data create business

opportunities for Facebook and for other businesses?

4. Refer to Mark Zuckerberg’s future ambitions for Facebook, as articulated in the next

to the last paragraph of the case. From your perspective, what benefits might result if

Zuckerberg’s aims are realized? What concerns do you have about Zuckerberg’s

goals?

Suggested Answers to Case Discussion Questions

1. How does Facebook’s privacy management of users’ personal information affect the



behaviour of Facebook patrons?

According to the case, “Facebook generates most of its revenue from targeted

advertisements based on users’ demography and interests, so the more data users

share publicly the more money it can mint from ads.” Facebook has built its vast

reservoir of user data on the back of a privacy policy that is none-too-friendly to the

social network’s users. Indeed, some privacy critics suggest that Facebook’s privacy

policy is little more than a shamsomething designed to obscure the social

networking site’s real motivation regarding the protection of users’ personal data.

Facebook “assumes you want to share as much data as possible; if not, you have to

change the settings, which can be a fiddly business. The presumption should be

exactly the opposite: the default should be tight privacy controls, which users may

then loosen if they choose.” As a partial response to this privacy criticism, Facebook

instituted a Groups feature and a Places feature. Yet, these features still have privacy

loopholes in them. The Groups feature allows friends to add users to groups on their

behalf. The Places feature gives online friends the ability to check someone into a

place without that person’s permission.

Even with Facebook’s revision of its privacy management policy and privacy control

mechanisms, users are still open to having their personal information accessed and

used without their express permission. Consequently, Facebook users need to protect

themselves against being exploited in any way. Facebook users need to be aware of

the potential negative consequences to their personal lives and present or future

employment by unauthorized parties having any access whatsoever to their posted

information.

2. Being a college student you are quite likely a Facebook user. What is your opinion

regarding how Facebook deals with privacy issues? What have you done (or decided

not to do) with regard to protecting your privacy on Facebook (or other social

networking sites)?

Any more it is extremely difficult to find a college student who does not use

Facebook, at least to some extent. Some of the students are light users, but most of

them are rather heavy users of Facebookat least judging from the anecdotal

information they share with professors. Therefore, students have a wealth of

experience to draw upon in discussing this question. Interestingly, however, far too

many students are somewhat naïve about how the information they post on Facebook

can open them up to exploitation and come back to haunt them in their future job

searches. Students should be encouraged to look into what privacy experts have to

say about the potential negative effects of social networking media.

3. How can the availability of Facebook users’ personal data create business

opportunities for Facebook and for other businesses?

In just a few short years, social networking Web sites have exploded in popularity.

Facebook (and to a lesser extent, its competitors) have transformed how



peopleparticularly younger peopleconnect with one another. As the membership

of social networking Web sites has grown, so has the demand for new and different

ways of using these Web sites. Hence, many new applications that appeal to and

capitalize on social networking have been developed. Given the rapidly growing

popularity of these Web sites, it has only a matter of time before enterprising

individuals would devise ways of monetizing the opportunities that abound when

there is a source of extensive information about large numbers of people who are

active consumers.

As indicated in the case, Facebook seeks to capitalize on the wealth of user data to

become a dominant and pervasive business presence on the Internet. Specifically,

Facebook is becoming “a potential rival in electronic payments to eBay Inc.’s PayPal,

while partnerships [that] Facebook is cementing with smartphone makers set the stage

for competition with Apple Inc. and Google in mobile services.” Moreover, every

industrynews, health, finance, shopping, and commercewill be rebuilt around

social engagement, and Facebook will be at the center of this rebuilding frenzy.

“[M]any Silicon Valley companies increasingly have to decide whether to treat

Facebook like a friend whose reach and user data can help propel their own growth,

or a foe that can become a destructive force.”

4. Refer to Mark Zuckerberg’s future ambitions for Facebook, as articulated in the next

to the last paragraph of the case. From your perspective, what benefits might result if

Zuckerberg’s aims are realized? What concerns do you have about Zuckerberg’s

goals?

The next to the last paragraph reads as follows:

Facebook founder and CEO Mark Zuckerberg’s ultimate goal is “to turn

Facebook into the planet’s standardized communication (and marketing)

platform, as ubiquitous and intuitive as the telephone but far more

interactive, multidimensional and indispensable. Your Facebook ID quite

simply will be your gateway to the digital world, Zuckerberg predicts.”

“Zuckerberg makes it clearthat he’s still intensely focused on

connecting the entire world on Facebookonly now his vision goes well

beyond the site as a digital phone book. It becomes the equivalent of the

phone itself: It is the main tool people use to communicate for work and

pleasure. It also becomes the central place where members organize

parties, store pictures, find jobs, watch videos, and play games.

Eventually they’ll use their Facebook ID as an online passkey to gain

access to websites and online forums that require personal identification.

In other words, Facebook will be where people live their digital lives,

without the creepy avatars.”

There is considerable appeal to the notion of organizing one’s entire

digital life through a central portal. Certainly, life would be simplified and

time would be saved. However, having a single portal for all digital



access is also frightening in that it places an extraordinary amount of

power in Facebook’s hands. If Facebook were to have such power, it must

be accompanied by corresponding expectations and requirements

regarding Facebook’s responsibility and accountability for protecting

members’ privacy. However, Facebook’s critics likely would vehemently

question the company’s willingness to make such commitments.

SOURCE: This case solution was written by Michael K. McCuddy, The Louis S. and Mary L. Morgal

Chair of Christian Business Ethics and Professor of Management, College of Business, Valparaiso

University.

i G.A. Fowler, Facebook’s Web of Frenemies,” The Wall Street Journal (Eastern edition) (February 15,

2011): B1. ii A. Diana, “Facebook Ad Spending to Hit $4.05 Billion in 2011,” InformationWeek (January 20, 2011),

http://www.informationweek.com/news/software/bi/229000995 (accessed June 25, 2011). iii

Anonymous, “Leaders: Dicing with Data; Facebook, Google, and Privacy,” The

Economist 395(8683): 16. iv

Anonymous, “Leaders: Dicing with Data; Facebook, Google, and Privacy,” The

Economist 395(8683): 16. v Anonymous, “Leaders: Dicing with Data; Facebook, Google, and Privacy,” The Economist 395(8683):

16. vi T. Claburn, “Facebook Proposes ‘Data Use’ Policy to Replace ‘Privacy Policy’,” InformationWeek

(February 25, 2011), http://www.informationweek.com/news/security/privacy/229219459 (accessed June

25, 2011). vii

G.A. Fowler, “Facebook Unseats Algorithm as Boss,” The Wall Street Journal (Eastern edition) (October

11, 2010): B1. viii

G.A. Fowler, “Facebook Unseats Algorithm as Boss,” The Wall Street Journal (Eastern edition)

(October 11, 2010): B1. ix

G.A. Fowler, “Facebook Unseats Algorithm as Boss,” The Wall Street Journal (Eastern edition) (October

11, 2010): B1. x S. Forden, “Facebook Builds a Washington Lobbying Team” Bloomberg Businessweek (December 9,

2010), http://www.businessweek.com/magazine/content/10_51/b4208036753172.htm (accessed June 25,

2011). xi

G.A. Fowler, Facebook’s Web of Frenemies,” The Wall Street Journal (Eastern edition) (February 15,

2011): B1. xii


2011): B1. xiii


2011): B1. xiv

J. Hempel and B. Kowitt, “How Facebook Is Taking Over Our Lives,” Fortune 159(4) (March 2, 2009):

48-56 (8pages). xv

J. Hempel and B. Kowitt, “How Facebook Is Taking Over Our Lives,” Fortune 159(4) (March 2, 2009):

48-56 (8pages).


PART 1 INTRODUCTION

COHESION CASE STUDY PART 1

DONORSCHOOSE.ORG: AN ONLINE CHARITY HELPS PUBLIC EDUCATION IN

AMERICA

“[F]irst graders in Cynthia Rosato’s English-as-a-second-language class at PS 169 in Sunset

Park, Brooklyn, earnestly sound out words from books they were deprived of just months ago.

For most of Rosato’s 18 years in teaching, books and other materials were appallingly out of

reach.” Rosato recalls that over 600 children shared a limited number of books, and remembers

that things “got to the point where if a kid lost a book, you wanted to cry.”19

Rosato’s woes are

but the tip of the iceberg of the resource challenges facing the public education system in many

communities in America.

“In Chicago, a high school social studies teacher needs 10 globes for hands-on geography

lessons. Cost: $1,134. In Winston-Salem, N.C., a first-grade teacher wants the technology to let

her young readers listen to books on tape. Cost: $667. And in Flushing, N.Y., a fifth-grade

teacher at Public School 165 is trying to scare up five beanbag chairs for her library. Cost:

$189.”20

How do these teachers acquire the materials and supplies to do the best job possible in

educating their students? Charles Best, a young Internet entrepreneur and philanthropist, answers

this question in a very tangible way through DonorsChoose.org, a nonprofit organization that he

founded in 2000 at Wings Academy, a public charter high school in the Bronx, New York City,

where he was a social studies teacher for five years.

Best observes, “[t]eachers spend an insane amount of their own money on supplies, but

mostly we just saw our students going without the resources that they needed to learn.”21

In the

first couple of years of its existence, Best invested most of his salary from Wings Academy in

getting DonorsChoose up and running.22

Started as a means for getting supplies into public

schools in low-income areas, Best says he “figured that there were people who wanted to

improve public schools but were skeptical about writing a cheque for $100 and not seeing where

their money was going.”23

DonorsChoose.org initially focused only on public schools in New York City. However,

the nonprofit received financial backing in 2004 that enabled it to begin a rapid expansion to

Chicago, San Francisco, Los Angeles, and several cities in the Carolinas.24

Since then

DonorsChoose has grown nationwide.25

“In a move that redefines traditional philanthropy, DonorsChoose uses the Internet to

connect teachers directly to donors. Teachers who once spent their own money for supplies, or

simply went without, can now turn to donor support to roll out creative lesson plans. Meanwhile,

rather than writing cheques blindly, donors of any scale can decide which projects they wish to

support. Like eBay or Amazon.com, DonorsChoose eliminates the middleman.”26

Part 1 Cohesion Case: DonorsChoose (A), p. 2


The DonorsChoose Web site has evolved into “a clearinghouse for donation requests

from individual teachers in underfunded public schools. Featured projects have a specific ask,

and donors can search the site for projects that resonate with them.”27

“The Web site reads like a

‘Dear Santa’ list from teachers. Educators submit a few paragraphs describing their ideas by way

of request. Projects range from as little as $49 (clipboards) to several thousand dollars (laptop

computers).”28

For instance, after a one-time state grant expired, a kindergarten teacher in

California was trying to raise funds to take her class to the Gallo Center for the Arts in nearby

Modesto; her request for $663 was funded.29

A teacher in Mississippi, which has the highest

obesity rate in America, asked for a ping-pong table as a tool to get students moving; and another

teacher elsewhere “requested books including R.L. Stine’s Goosebumps series, which he thought

his young readers (and especially the nonreaders) would love.”30

According to the DonorsChoose.org Web site, this is how the program works:

“[P]ublic school teachers from every corner of America post

classroom project requests on DonorsChoose.org. Requests range

from pencils for a poetry writing unit, to violins for a school

recital, to microscope slides for a biology class.

“Then, you can browse project requests and give any amount to the

one that inspires you. Once a project reaches its funding goal, we

deliver the materials to the school.

“You’ll get photos of your project taking place, a thank-you letter

from the teacher, and a cost report showing how each dollar was

spent. If you give over $100, you’ll also receive hand-written

thank-you letters from the students.

“At DonorsChoose.org, you can give as little as $1 and get the

same level of choice, transparency, and feedback that is

traditionally reserved for someone who gives millions. We call it

citizen philanthropy.”31

In the early days, volunteers vetted the teachers’ requests and then posted them for

donors to browse.32

Today, requests are vetted by a hired staff. Once donors select a project,

DonorsChoose staff members who are paid through grants and corporate sponsorship

purchase and deliver the materials to the requesting teachers. Thus, 100% of the project donors’

contribution goes to the designated project.33

The DonorsChoose Web site also enables teachers, students, and schools to alert parents,

friends, families, and businesses about the individual projects that teachers need help funding.

The philanthropically minded can go the Web site, read about the project and its funding needs,

and then make a contribution if they so desire.34

As a nonprofit organization that is innovative and well managed and which enjoys

considerable respect in the American business community as well as in other segments of

American society, DonorsChoose is committed to an ambitious mission and vision. Its mission:

“DonorsChoose.org engages the public in public schools by giving people a simple, accountable



and personal way to address educational inequity.” Its vision: “We envision a nation where

children in every community have the tools and experiences needed for an excellent

education.”35

The DonorsChoose mission is supported by a strategy of “harness[ing] the Internet to

connect teachers with donors.”36

Charles Best’s long-term hope is that people who become

involved with DonorsChoose will realize the magnitude of public school underfunding, and as a

result “will become grass-roots advocates for steering more resources to schools.”37

Is the future that Charles Best wants to create through DonorsChoose.org achievable? Or

is it a pipe dream?

SOURCE: This case was written by Michael K. McCuddy, The Louis S. and Mary L. Morgal

Chair of Christian Business Ethics and Professor of Management, College of Business

Administration, Valparaiso University.



DISCUSSION QUESTIONS

1. What lessons about leading people and managing organizations are provided by

DonorsChoose.org and its founder and CEO, Charles Best?

2. What do you like about DonorsChoose.org? What do you dislike about DonorsChoose.org?

Explain your answer.

3. What challenges did DonorsChoose face as a start-up organization?

4. What challenges does DonorsChoose face in today’s environment?

5. How do the challenges that you discussed in questions 3 and 4 relate to the management

challenges –– globalization; leading a diverse workforce; and ethics, character, and personal

integrity –– that are discussed in the text?

6. DonorsChoose describes its mission as follows: “DonorsChoose.org engages the public in

public schools by giving people a simple, accountable and personal way to address

educational inequity.” Its vision is articulated as follows: “We envision a nation where

children in every community have the tools and experiences needed for an excellent

education.” How does this mission and vision guide DonorsChoose in addressing the

challenges that you discussed in the preceding three questions?

7. What particular aspects of DonorsChoose.org would other organizations either nonprofit

or for-profit organizations do well to emulate? Explain your answer.



DISCUSSION QUESTION ANSWERS

1. Charles Best was very astute in identifying an important challenge that was not being

addressed effectively by existing organizations or methods. According to Best, “[t]eachers

spend an insane amount of their own money on supplies, but mostly we just saw our students

going without the resources that they needed to learn.” Best sensed that this was a challenge

that many people could identify with and would have an interest in helping to solve. He

devised an innovative way in which this challenge could be addressed by bringing together

the people who wanted to help provide resources with the public educators who needed the

resources. “In a move that redefines traditional philanthropy, DonorsChoose uses the Internet

to connect teachers directly to donors. Teachers who once spent their own money for

supplies, or simply went without, can now turn to donor support to roll out creative lesson

plans. Meanwhile, rather than writing checks blindly, donors of any scale can decide which

projects they wish to support.”

Identifying a challenge, formulating a vision, and getting people to vigorously support that

vision are valuable lessons that others can learn from Charles Best. Further, Best’s approach

is instructive with regard to a person being willing to take a considerable risk to pursue a

dream of making a difference in society. Moreover, Best is a model of enthusiasm for and

commitment to achieving significant goals.

2. This question provides students with the opportunity to explore their attitudes and beliefs

about involvement with a not-for-profit organization that managerially operates much like a

for-profit organization with respect to functions such as planning, organizing, and

controlling. The students should be encouraged to consider the value of working for a not-

for-profit organization, and what the personal advantages and disadvantages would be of

doing so. The reasons underlying their expressed attitudes and beliefs should be discussed as

well.

3. As a social studies teacher at Wings Academy, a public charter high school in the Bronx,

New York City, Charles Best became aware that “[t]eachers spend an insane amount of their

own money on supplies, but mostly we just saw our students going without the resources that

they needed to learn.” Best says he “figured that there were people…who wanted to improve

public schools but were skeptical about writing a check for $100 and not seeing where their

money was going.” But how to connect the people who might want to make financial

contributions with the teachers who could use those resources? Therein resides the most

fundamental challenge confronting Charles Best. He had to devise a system that effectively

and efficiently connected donors and teachers in need. Charles Best also faced the challenge

of persuading teachers to submit requests to the DonorsChoose Web site. Additionally, he

faced the challenge of generating sufficient financial resources to get his “brainstorm”

operational to the point that it could attract donorsand to that end he drew on his own

funds.

4. DonorsChoose is committed to an ambitious mission and vision. Its mission:

“DonorsChoose.org engages the public in public schools by giving people a simple,



accountable and personal way to address educational inequity.” Its vision: “We envision a

nation where children in every community have the tools and experiences needed for an

excellent education.”

The vigorous pursuit of this vision and mission invokes the challenges that DonorsChoose

currently faces. A fundamental challenge is the growing need for financial support of public

education in American in light of the funding reductions that have occurred in many states

due to the Great Recession, declining state revenues, and multiple pressures on limited

governmental resources. Another current challenge concerns maintaining and enhancing the

quality of public education when there are numerous signs that quality is being compromised

in many public school systems throughout the nation. A third current challenge is the need to

grow the donor base in order to accommodate the growing needs for funding projects.

5. Globalization is related to the specific challenges that DonorsChoose has faced in the past

and is currently facing in that public education in America is falling behind other nations in

preparing its youth to function well in an increasing complex and competitive world. Because

of these global pressures America must improve the quality of the educationparticularly in

science and mathematicsprovided to its youth. DonorsChoose can help teachers to address

this performance gap.

Leading a diverse workforce is related to all of the past and current challenges facing

DonorsChoose. DonorsChoose has a diverse workforce to manage. Plus it encounters

diversity among the teachers submitting project requests and among the donors contributing

money to fund projects, not to mention the diversity that exists among the American students

who it is trying to benefit.

Ethics, character, and personal integrity is infused throughout the DonorsChoose

organization. This is evident in the process by which DonorsChoose operates, the role model

that Charles Best is, and the behavioral expectations for DonorsChoose staffers.

6. The vision and mission of DonorsChoose guides all that is does in responding to its

challenges and in conducting its ongoing operations. The DonorsChoose mission is supported

by a strategy of “harness[ing] the Internet to connect teachers with donors.” Charles Best’s

long-term hope is that people who become involved with DonorsChoose will realize the

magnitude of public school underfunding, and as a result “will become grass-roots advocates

for steering more resources to schools.”

The day-to-day operations of DonorsChoose also indicate how it is responding to the

aforementioned challenges. Specifically, the operating paradigm is as follows:

“[P]ublic school teachers from every corner of America post classroom

project requests on DonorsChoose.org. Requests range from pencils for a

poetry writing unit, to violins for a school recital, to microscope slides for

a biology class.”



“Then, you can browse project requests and give any amount to the one

that inspires you. Once a project reaches its funding goal, we deliver the

materials to the school.”

“You’ll get photos of your project taking place, a thank-you letter from the

teacher, and a cost report showing how each dollar was spent. If you give

over $100, you’ll also receive hand-written thank-you letters from the

students.”

“At DonorsChoose.org, you can give as little as $1 and get the same level

of choice, transparency, and feedback that is traditionally reserved for

someone who gives millions. We call it citizen philanthropy.”

7. Possible aspects to emulate would include clearly understanding the challenges the

organization faces, being adept at finding ways of addressing those challenges, establishing a

clear vision and mission, and working vigorously to fulfill that vision and mission. The

students should be encouraged to identify other possible aspects for emulation.

SOURCE: This case solution was written by Michael K. McCuddy, The Louis S. and Mary L.

Morgal Chair of Christian Business Ethics and Professor of Management, College of Business,

Valparaiso University.

Endnotes

1 L. Llovio, “The CarMax Way: Changing the Used-Car Business,” McClatchy Tribune Business

News (June 23, 2008 [Q1]): D12. 2 “CarMax Named one of the ‘100 Best Companies to Work For’ by Fortune Magazine for the Fifth Straight Year,”

Business Wire (January 22, 2009). 3 “CarMax Named to Training Magazine’s Top 125,” Business Wire (February 12, 2009).

Endnotes



19

M. de Paula, “Pumping Dollars into the Education Revolution,” US Banker 114(5) (May

2004): 10. 20

J. Hempel, “School Aid: It Takes a Web Site,” Bloomberg Businessweek (September 26,

2005), http://www.donorschoose.org/news/news_businessweek_2005092 (accessed May 24,

2011). 21


2004): 10. 22


2004): 10. 23

Anonymous, “What $1,000 Can Do,” Kiplinger’s Personal Finance 61(8) (August 2007): 84. 24



2011). 25

DonorsChoose.org, About, http://www.donorschoose.org/about (accessed May 28, 2011). 26



2011). 27

N. Lublin, “Get What You Want for Nothing,” Fast Company (147) (July/August 2010): 96 (5

pages). 28



2011). 29

S. Nassauer, “Bad Trip: School Outings Get Downgraded,” The Wall Street Journal (Eastern

edition) (October 29, 2009): D.1 30

N. Lublin, “Get What You Want for Nothing,” Fast Company (147) (July/August 2010): 96 (5

pages). 31

DonorsChoose.org, How It Works, http://www.donorschoose.org/about (accessed May 28,

2011). 32



2011). 33



2011). 34

J.D. Opdyke, “Parents Rebel Against School Fund-Raisers; Tired of Being Forced to Sell

Wrapping Paper and Raffle Tickets, Some Opt Out While Others Devise More-Effective

Alternatives,” The Wall Street Journal (Eastern edition) (March 29, 2007): D.1. 35

DonorsChoose.org, Who We Are, http://www.donorschoose.org/about/how_it_works.html

(accessed May 28, 2011). 36

S. McGee, “Creative Giving,” Barron’s 84(48) (November 29, 2004): 21 (4 pages).

37

S. McGee, “Creative Giving,” Barron’s 84(48) (November 29, 2004): 21 (4 pages).

Copyright © 2015 Nelson Education Limited 1-1

IN THIS CHAPTER, YOU’LL FIND: If Nothing Else, My Students Should Learn… Learning Objectives How Does This Chapter Relate to the Real World? Why Should Students Care? What Are Common Student Misconceptions and Stumbling Blocks? What Can I Do In Class?

�ƒ Stumbling Block Activities �ƒ Video Activity �ƒ Clicker Question �ƒ Review Questions �ƒ Discussion & Communication Questions and Answers �ƒ Ethical Dilemma: Brian Cowell

�ƒ Teaching Notes �ƒ Suggested Answers

�ƒ Self-Assessments—What About You? �ƒ 1.1 Analyze Your Perception of a Change �ƒ 1.2 Learning Style Inventory

�ƒ Experiential Exercises �ƒ 1.1 What’s Changing at Work? �ƒ 1.2 My Absolute Worst Job �ƒ 1.3 Creating a Quality Learning Environment

�ƒ Case Studies & Suggested Responses �ƒ Johnson & Johnson: Using a Credo for Business Guidance �ƒ Facebook: Opportunities, Problems, and Ambitions

�ƒ Mini-Case and Quiz �ƒ CarMax: Changing the Used Car Business

�ƒ Video �ƒ Evo: Managing in a Global Environment

Assessment Tools Reflections on Teaching What Other Resources Are Available? Student Handouts

�ƒ Discussion & Communication Questions �ƒ Ethical Dilemma – Brian Cowell �ƒ Self-Assessment – What About You? 1.1 Analyze Your Perceptions of a

Change �ƒ Self-Assessment – What About You? 1.2 Learning Style Inventory �ƒ Experiential Exercise – 1.1 What’s Changing at Work? �ƒ Experiential Exercise – 1.2 My Absolute Worst Job �ƒ Experiential Exercise – 1.3 Creating a Quality Learning Environment �ƒ Case Study – Johnson & Johnson: Using a Credo for Business Guidance

Chapter 1: Organizational Behaviour and Opportunity


�ƒ Case Study – Facebook: Opportunities, Problems, and Ambitions �ƒ Mini-Case – CarMax: Changing the Used Car Business


IF NOTHING ELSE, MY STUDENTS SHOULD LEARN…

1. Organizations are open systems, in which various inputs are processed, outputs

created, and feedback received. There are many different types of organizations.

2. Organizations have both formal and informal dimensions: an understanding of both is required to get an accurate portrait of human behaviour in organizations.

LEARNING OBJECTIVES

After completing this chapter, students should be able to:

1. Define organizational behaviour. [Remember] Organizational behaviour (OB) is individual behaviour and group dynamics in organizations. The foundation of organizational behaviour is human behaviour, so the study of OB involves understanding workers’ behaviour in terms of their history and personal value systems and examining the external factors to which a person is subject. Organizational behaviour has grown out of contributions from psychology, sociology, engineering, anthropology, management, and medicine.

2. Identify four action steps for responding positively in times of change. [Apply]

Change is an opportunity when you have a positive attitude, ask questions, listen, and are committed to succeed. People in change situations often become rigid and reactive, rather than open and responsive. This behaviour works well in the face of gradual, incremental change. However, rigid and well-learned behaviour may be counterproductive responses to significant change.

3. Identify the important system components of an organization. [Remember]

Organizations are open systems composed of people, structure, and technology committed to a task. The organization as a system also has an external task environment composed of different constituents, such as suppliers, customers, and federal regulators. The organization system takes inputs, converts them into throughputs, and delivers outputs to its task environment.

4. Describe the formal and informal elements of an organization. [Apply]


Organizations have formal and informal elements within them. The formal organization is the official, legitimate, and most visible part that enables people to think of organizations in logical and rational ways. The informal organization is unofficial and less visible. The informal elements of the organization are often points of diagnostic and intervention activities in organization development.

5. Understand the diversity of organizations in the economy. [Evaluate]

Canada’s GDP is worth $1400 billion or 2.26 percent of the world economy. It is composed of manufacturing organizations, service organizations, privately owned companies, and non-profit organizations; all contribute to our national well-being. Understanding a variety of organizations will help you develop a greater appreciation for your own organization and for others in the world of private business enterprises and non-profit organizations

6. Evaluate the opportunities that change creates for organizational behaviour.

[Evaluate] The changes and challenges facing managers are driven by international competition and customer demands. Managers in this environment must be aware of the risks associated with downsizing and marginalization of part-time workers. Organizations also face regular challenges in the areas of globalization, workforce diversity, ethics and character, and technological innovation.

7. Demonstrate the value of objective knowledge and skill development in the study of

organizational behaviour. [Apply] Although organizational behaviour is an applied discipline, a student is not “trained” in organizational behaviour. Rather, you are “educated” in organizational behaviour and you are a co-producer in learning.

8. Explain the process of organizational design thinking. [Analyze]

Design thinking is an important new idea and practice. It requires managers to think more like designers when they handle problems. Managers need to use heuristics rather than algorithms when they look at organizational challenges.

HOW DOES THIS CHAPTER RELATE TO THE REAL WORLD?

�ƒ Students need to get a rich understanding of the basic elements of an organization

so that they are effective organizational actors, whether in their role as student or employee.


�ƒ Students often have limited knowledge about differences in organizational design.

�ƒ Students need to learn that there are often significant differences between what organizations are supposed to be and what organizations are like in practice.

�ƒ ‘Design thinking’ is an exciting new way of thinking about organizations that seems to be gaining considerable traction and students need to be introduced to the idea.

WHY SHOULD STUDENTS CARE?

�ƒ The better informed the students are about organizations, the better decisions they

will make in their work and career.

�ƒ Organizations continue to face many challenges, often from significant external sources of change, and the students need to know how to address the changes that they will face at work, now and in the future.

�ƒ The underlying learning approach of ORGB, 2CE helps students to become better learners as they will engage in a process of knowledge mastery and skill development, followed by application.

WHAT ARE COMMON STUDENT MISCONCEPTIONS AND STUMBLING BLOCKS?

1. Students typically view all organizations as bureaucracies.

2. Students often see the discipline of organizational behaviour as ‘common sense’.

3. Students may concentrate their time on the so-called hard disciplines such as finance as they believe that they are more important for their work success.

WHAT CAN I DO IN CLASS?

Stumbling Block Activities

Ask students about their organizational experiences and nudge them towards a description of the characteristics of the organization. Ask them if they consider their


family to be an organization or not. Soon students will see that not all organizations are bureaucracies. [Stumbling Block 1]

Describe some counter-intuitive research findings from the discipline. The chapter on perceptions (Chapter 3) describes our self-serving bias and some of our attribution errors. Similarly, the chapter on decision-making (Chapter 10) provides some helpful examples of our non-rational behaviours such as ‘satisficing’ and ‘escalating commitment’. [Stumbling Block 2]

Brainstorm what explains our view that most/all organizations are bureaucratic. [Stumbling Block 1]

Discuss how an understanding of organizations can help students in their current academic work and their future employment. [Stumbling Block 2]

Ask why some subjects such as finance are valued as they are ‘hard’ but others are less valued as they are ‘soft’. Facilitate the discussion towards an appreciation of the complexity of organizational realities. [Stumbling Block 3]

Video Activity

Evo Show the clip from Evo: Managing in a Global Environment, as described in the Chapter 1 Instructor Prep Card and use buzz groups for students to answer the suggested questions. Call on various groups to share their analysis.

Clicker Question

Why is design thinking an important skill for managers?

A. Managers will be better able to tackle complex issues. B. Managers will be better able to reframe their thinking. C. Managers may be able to generate new innovations. D. All of the above.

This question can be used to underscore the systemic and embedded nature of organizations. As well, the students can see that there are ways of thinking that are useful and practical. It may be appropriate, even at such an early stage in a course, to hint at the practical value of a good theory. Facilitate a discussion of Ethical Dilemma 1—Brian Cowell.


Review Questions Facilitate a discussion of the review questions provided on the card for Chapter 1 at the back of the textbook. A suggested answer accompanies each question.

Discussion & Communication Questions and Answers Facilitate a discussion of the Discussion and Communication questions provided below, with answers. The questions are also provided separately as a student handout at the end of this chapter. 1. How do the formal aspects of your work environment affect you? What informal

aspects of your work environment are important? Students without work experience may prefer to examine the university for formal and informal environment factors. The formal aspects of the university environment could include the university bulletin, specific requirements for graduation, and enrolment procedures. Informal aspects of the university environment could include the power that the student association has on campus, the norms of dress, and relationships between students and faculty. 2. What is the biggest competitive challenge or change facing the businesses in your

industry today? Will that be different in the next five years? Students without work experience may wish to consider the university setting to consider competitive challenges. This list may have items like tuition, work versus advanced education, job opportunities, or the status of similar universities. Students with work experience may cite the need to change careers as a reason for returning to complete their undergraduate degrees. This exemplifies the competitiveness of all environments and shows how rapidly individuals must change to remain competitive. Many students returning to school may have considerable experience in a field that is downsizing. All businesses face issues regarding increased competition, locally, nationally, and internationally. Most organizations are dealing with potential ramifications of NAFTA agreements, for example, as well as changes in the concepts of loyalty and long-term commitments. As we continue to change from a manufacturing society to an information and knowledge society, the next five years will see the workforce continue to vary, with greater variety in jobs and careers than in any previous generation. 3. Describe the next chief executive of your organization and what she or he must do to

succeed.


Students may prefer to discuss the university president or dean of the college if they do not have work experience. One of the discussions that could follow might correlate with current terminology that has become popular, such as visionary leaders, empowered workforces, and teamwork. Successful leaders will also need to recognize and understand the impacts of global competition and economic changes, the need to focus on quality, the importance of a diverse workforce, and the challenge of managing change. 4. Discuss two ways people learn about organizational behaviour. Learning about organizational behaviour requires mastery of objective knowledge, which results from research and scholarly activities. Objective knowledge can be learned through training. In addition, it requires skill development and the mastery of abilities that are essential to successful functioning in organizations. Skill development is best accomplished through experiential learning. It may be important to point out that taking one approach exclusively is only half a solution to a problem solving technique. 5. Prepare a memo about an organizational change occurring where you work or in

your college or university. Write a 100-word description of the change and, using Figure 1.1, identify how it is affecting the people, structure, task, and/or technology of the organization.

This is a good opportunity for students to practice writing in a concise, to-the-point style. Be sure that students consider different aspects of people, structure, task, and technology as they develop the memo. 6. Develop an oral presentation about the changes and challenges facing your college

or university based on an interview with a faculty member or administrator. Be prepared to describe the changes and challenges. Are these good or bad changes? Why?

Use this as an opportunity to work on oral presentation skills as well as to learn more about changes and challenges facing organizations. Encourage students to give each other feedback on the presentation itself as well as the content of the presentation. Compare and contrast the views of faculty and administrators. Discuss why similarities and differences exist in each group’s view of changes and challenges. 7. Prepare a brief description of a service or manufacturing company, entrepreneurial

venture, or non-profit organization of your choice. Use several credible online sources and read about the organization and then use these multiple sources to write your description.


Discuss in class the similarities and differences students found between different service, manufacturing, entrepreneurial, or non-profit organizations. Ethical Dilemma: Brian Cowell TEACHING NOTES The purpose of the Ethical Dilemmas is to encourage students to develop their awareness of ethical issues in the workplace and the managerial challenges they present. The dilemmas are set up to present situations in which there is no clear ethical choice. The goal for the instructor is to guide students through the process of analyzing the situation and examining possible alternative solutions. There are no “right” answers to the questions at the end of each scenario, only opportunities to explore alternative generation and generate discussion of the appropriateness of each alternative. The student portion of the activity is on a handout at the end of this chapter and as a downloadable document on the ORGB website at www.icanorgb2.com.

In order to address the Ethical Dilemmas, a brief discussion of the referenced ethical theories is necessary. Rule-Based or Utilitarian Ethical Theory Utilitarian theory was first formulated in the eighteenth century by Jeremy Bentham and later refined by John Stuart Mill. Utilitarians look beyond self-interest to consider impartially the interests of all persons affected by an action. The theory emphasizes consequences of an action on the stakeholders. The stakeholders are those parties affected by the outcome of an action. Utilitarians recognize that trade-offs exist in decision making. Utilitarian theory is concerned with making decisions that maximize net benefits and minimize overall harms for all stakeholders. It is similar to cost-benefit analysis decision making. The ultimate rule to follow is the “Greatest Good for the Greatest Number.” Virtue-Based Ethical Theory Virtue theory dates back to the ancient Greek philosophers, especially Plato and Aristotle. Judgment is exercised not through a set of rules, but as a result of possessing those dispositions or virtues that enable choices to be made about what is good and holding in check desires for something other than what will help to achieve this goal. Thus, virtue-based ethics emphasizes certain qualities that define appropriate behaviour and the right action to take. Unlike the other standard ethical theories discussed, virtue theory does not establish a set of criteria to evaluate potential decisions. Rather, it emphasizes the internal characteristics of an individual with whom we would want to enter into a relationship of


trust. The ultimate goal is for “the decision maker to do the right thing in the right place at the right time in the right way.” Rights-Based Ethical Theory The evolution of rights theory dates back to the seventeenth century in writings of Thomas Hobbes and John Locke. Modern rights theory is associated with the eighteenth-century philosopher Immanuel Kant. Rights theory assumes that individuals have certain entitlements that should be respected such as freedom of speech, the right of privacy, and due process. Kant’s theory establishes an individual’s duty as a moral agent toward others who possess certain rights. It is based on a moral principle that he calls the categorical imperative. One version of the categorical imperative emphasizes the universality of moral actions. The principle is stated as follows: “I ought never to act except in such a way that I can also will that my maxim (reason for acting) should become a universal law.” The ultimate guiding principle is, “I should only act in a way in which I would be happy if everyone in that situation would act the same.” Justice-Based Ethical Theory Formulations of justice theory date back to Aristotle and Plato in the fifth century BC. An important modern contributor to the theory of justice is John Rawls. The major components of justice theory are equity, fairness, and impartiality. These concepts require that actions taken reflect comparative treatment of individuals and groups affected by the action. The ultimate question here is, “Are the processes by which decisions are made and the outcomes of those decisions equitable, fair, and impartial?” Suggested answers for the questions at the end of each chapter scenario are provided in this instructor’s manual. They are by no means exhaustive, nor are they meant to be the “correct” answers. Each student must decide for himself or herself which alternative most clearly agrees with his or her value system.

Ethical Dilemma: Brian Cowell

The afternoon was as gloomy as Brian’s mood. It had not been a very productive day. All Brian could think about was the decision before him. He found the current situation interesting in that he had never before struggled with decisions. In the past, he had always been able to make quick and good decisions. His gut gave him the answer and he trusted his instincts. This time he felt nothing, and he was unsure how to proceed without that guiding force.

Brian Cowell was 52-years-old and the CEO of Data Solutions, a company he had run for the last 20 years. Brian had been very successful at the helm of the company. Data Solutions had grown from a small data processing business to one of the largest employers in the area. Brian’s good instincts had guided them through the challenging

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