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A01_BODD8594_07_SE_FM_copy.indd 9/20/16 4:45 PM MANAGEMENT An Introduction A01_BODD8594_07_SE_FM.indd 9/6/16 5:15 PM At Pearson, we have a simple mission: to help people make more of their lives through learning We combine innovative learning technology with trusted content and educational expertise to provide engaging and effective learning experiences that serve people wherever and whenever they are learning From classroom to boardroom, our curriculum materials, digital learning tools and testing programmes help to educate millions of people worldwide – more than any other private enterprise Every day our work helps learning flourish, and wherever learning flourishes, so people To learn more, please visit us at www.pearson.com/uk A01_BODD8594_07_SE_FM.indd 9/6/16 5:15 PM David Boddy University of Glasgow MANAGEMENT An Introduction Seventh Edition Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney • Dubai • Singapore • Hong Kong Tokyo • Seoul • Taipei • New Delhi • Cape Town • São Paulo • Mexico City • Madrid • Amsterdam • Munich • Paris • Milan A01_BODD8594_07_SE_FM.indd 9/6/16 5:15 PM Pearson Education Limited Edinburgh Gate Harlow CM20 2JE United Kingdom Tel: +44 (0)1279 623623 Web: www.pearson.com/uk First published 1998 under the Prentice Hall Europe imprint (print) Second edition published 2002 (print) Third edition published 2005 (print) Fourth edition published 2008 (print) Fifth edition published 2011 (print) Sixth edition published 2014 (print and electronic) Seventh edition published 2017 (print and electronic) © Prentice Hall Europe 1998 © Pearson Education Limited 2002, 2005, 2008, 2011 (print) © Pearson Education Limited 2014, 2017 (print and electronic) The right of David Boddy to be identified as author of this work has been asserted by him in a ccordance with the Copyright, Designs and Patents Act 1988 The print publication is protected by copyright Prior to any prohibited reproduction, storage in a retrieval system, distribution or transmission in any form or by any means, electronic, mechanical, recording or otherwise, permission should be obtained from the publisher or, where applicable, a licence permitting restricted copying in the United Kingdom should be obtained from the Copyright Licensing Agency Ltd, Barnard’s Inn, 86 Fetter Lane, London EC4A 1EN The ePublication is protected by copyright and must not be copied, reproduced, transferred, d istributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased, or as strictly permitted by applicable copyright law Any unauthorised distribution or use of this text may be a direct infringement of the author’s and the publisher’s rights and those responsible may be liable in law accordingly Pearson Education is not responsible for the content of third-party internet sites The Financial Times With a worldwide network of highly respected journalists, The Financial Times provides global business news, insightful opinion and expert analysis of business, finance and politics With over 500 journalists reporting from 50 countries worldwide, our in-depth coverage of international news is objectively reported and analysed from an independent, global perspective To find out more, visit www.ft.com/pearsonoffer ISBN: 978–1–292–08859–4 (print) 978-1-292-08862-4 (PDF) 978-1-292-17766-3 (ePub) British Library Cataloguing-in-Publication Data A catalogue record for the print edition is available from the British Library Library of Congress Cataloguing-in-Publication Data Names: Boddy, David, author Title: Management : an introduction / David Boddy Description: Seventh Edition | New York : Pearson, 2016 | Revised edition of the author’s Management, 2014 Identifiers: LCCN 2016030939 | ISBN 9781292088594 Subjects: LCSH: Management Classification: LCC HD31 B583 2016 | DDC 658—dc23 LC record available at https://lccn.loc.gov/2016030939 10 22 21 20 19 18 17 Cover image © Lisa-Blue/Getty Images Print edition typeset in 10.5/12.5 pt Minion by SPi Global Printed and bound by L.E.G.O S.p.A., Italy NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION A01_BODD8594_07_SE_FM.indd 9/6/16 5:15 PM BRIEF CONTENTS Preface to the seventh edition xiii Preface to the first edition xvii Acknowledgements xix PART 1 AN INTRODUCTION TO MANAGEMENT 3 1 MANAGING IN ORGANISATIONS 4 2 MODELS OF MANAGEMENT 36 Part Case: Apple Inc 70 Part Employability skills – preparing for the world of work 75 PART 2 THE ENVIRONMENT OF MANAGEMENT 83 3 ORGANISATION CULTURES AND CONTEXTS 84 4 MANAGING INTERNATIONALLY 112 5 CORPORATE RESPONSIBILITY 142 Part Case: BP 168 Part Employability skills – preparing for the world of work 173 PART 3 PLANNING 181 6 PLANNING 182 7 DECISION MAKING 206 8 MANAGING STRATEGY 238 9 MANAGING MARKETING 270 Part Case: The Virgin Group 298 Part Employability skills – preparing for the world of work 303 PART 4 ORGANISING 311 10 ORGANISATION STRUCTURE 312 11 HUMAN RESOURCE MANAGEMENT 346 12 INFORMATION SYSTEMS AND E-BUSINESS 372 13 CREATIVITY, INNOVATION AND CHANGE 402 A01_BODD8594_07_SE_FM.indd Part Case: The Royal Bank of Scotland 430 Part Employability skills – preparing for the world of work 435 9/6/16 5:15 PM vi BRIEF CONTENTS PART 5 LEADING 443 14 INFLUENCING 444 15 MOTIVATING 472 16 COMMUNICATING 506 17 TEAMS 536 Part Case: British Heart Foundation 562 Part Employability skills – preparing for the world of work 567 PART 6 CONTROLLING 575 18 MANAGING OPERATIONS AND QUALITY 576 19 CONTROL AND PERFORMANCE MEASUREMENT 606 20 FINANCE AND BUDGETARY CONTROL 632 Part Case: Tesco 653 Part Employability skills – preparing for the world of work 659 Glossary 666 References 676 Index 692 A01_BODD8594_07_SE_FM.indd 9/6/16 5:15 PM CONTENTS Preface to the seventh edition xiii Preface to the first edition xvii Acknowledgements xix PART AN INTRODUCTION TO MANAGEMENT Summary 65 Test your understanding 67 Think critically 67 Develop a skill – self-awareness 67 Read more 68 Go online 69 Part Case: Apple Inc 70 Part Employability skills – preparing for the world of work75 PART CHAPTER MANAGING IN ORGANISATIONS 4 Case study: Ryanair 5 1.0 Management knowledge and management skill 6 1.1 Introduction 7 1.2 Managing to add value to resources 8 1.3 Meanings of management 11 1.4 Specialisation between areas of management 13 1.5 Influencing through the process of managing 16 1.6 Influencing through the tasks of managing 21 1.7 Influencing through shaping the context 25 1.8 Thinking critically to develop knowledge and skill 28 1.9 Integrating themes 30 Summary 31 Test your understanding 33 Think critically 33 Develop a skill – networking 33 Read more 34 Go online 34 CHAPTER MODELS OF MANAGEMENT 36 Case study: innocent drinks 37 2.1 Introduction 38 2.2 Why study models of management? 38 2.3 The competing values framework 42 2.4 Rational goal models 45 2.5 Internal process models 50 2.6 Human relations models 55 2.7 Open systems models 58 2.8 Integrating themes 63 A01_BODD8594_07_SE_FM.indd THE ENVIRONMENT OF MANAGEMENT CHAPTER ORGANISATION CULTURES AND CONTEXTS 84 Case study: British Broadcasting Corporation (BBC) 85 3.1 Introduction 86 3.2 Cultures and their components 87 3.3 Types of culture 91 3.4 The competitive environment – Porter’s five forces 94 3.5 The general environment – PESTEL 98 3.6 Environmental complexity and dynamism 103 3.7 Stakeholders and corporate governance 104 3.8 Integrating themes 106 Summary 108 Test your understanding 109 Think critically 110 Develop a skill – present a reasoned case 110 Read more 110 Go online 111 CHAPTER MANAGING INTERNATIONALLY 112 Case study: Carlsberg 113 4.1 Introduction 114 4.2 Ways to conduct business internationally 115 4.3 The contexts of international business – PESTEL 118 9/6/16 5:15 PM viii CONTENTS 4.4 Legal context – trade agreements and trading blocs 123 4.5 Socio-cultural context 125 4.6 Hofstede’s comparison of national cultures 127 4.7 Contrasting management systems 131 4.8 Forces driving globalisation 133 4.9 Integrating themes 137 Summary 138 Test your understanding 139 Think critically 140 Develop a skill – mindfulness 140 Read more 141 Go online 141 6.6 CHAPTER CHAPTER DECISION MAKING 206 CORPORATE RESPONSIBILITY 142 Case study: The Co-operative Group 143 5.1 Introduction 144 5.2 Corporate malpractice 144 5.3 Corporate responsibility 145 5.4 Perspectives on individual responsibility 147 5.5 Perspectives on corporate responsibility 150 5.6 An ethical decision-making model 152 5.7 Stakeholders and corporate responsibility 154 5.8 Corporate responsibility and strategy 156 5.9 Managing corporate responsibility 161 5.10 Integrating themes 162 Summary 164 Test your understanding 165 Think critically 166 Develop a skill – clarifying values 166 Read more 167 Go online 167 Part Case: BP168 Part Employability skills – preparing for the world of work 173 PART PLANNING CHAPTER PLANNING 182 Case study: Crossrail 183 6.1 Introduction 184 6.2 Why people plan 185 6.3 The content of plans 186 6.4 Gathering information 190 6.5 Setting goals (or objectives) – the ends 193 A01_BODD8594_07_SE_FM.indd Specifying what has to be done to achieve the goals – the means 196 6.7 Implementing what has to be done, and monitoring progress 197 6.8 Rational and creative planning processes 199 6.9 Integrating themes 201 Summary 203 Test your understanding 204 Think critically 204 Develop a skill – defining a problem rationally 204 Read more 205 Go online 205 Case study: Ikea 207 7.1 Introduction 208 7.2 Managing decisions 209 7.3 Programmed and non-programmed decisions 214 7.4 Decision-making conditions 215 7.5 Decision-making models 218 7.6 Biases in making decisions 224 7.7 Group decision making 227 7.8 Integrating themes 231 Summary 233 Test your understanding 234 Think critically 235 Develop a skill – defining a problem creatively 235 Read more 235 Go online 236 CHAPTER MANAGING STRATEGY 238 Case study: GKN 239 8.1 Introduction 240 8.2 Strategy – process, content and context 241 8.3 Planning, learning and political perspectives 243 8.4 How managers develop strategies? 246 8.5 Making sense – external analysis 249 8.6 Making sense – internal analysis 251 8.7 Making choices – deciding strategy at corporate level 254 8.8 Making choices – deciding strategy at business unit level 258 8.9 Making things happen – delivering strategy 260 8.10 Making revisions – implementing and evaluating 262 8.11 Integrating themes 263 Summary 265 Test your understanding 266 9/6/16 5:15 PM CONTENTS Think critically 266 Develop a skill – setting clear goals 267 Read more 267 Go online 268 Develop a skill – coordinating work 343 Read more 343 Go online 343 CHAPTER 11 CHAPTER MANAGING MARKETING 270 Case study: Manchester United FC 271 9.1 Introduction 272 9.2 Understanding customers and markets 273 9.3 The marketing environment 275 9.4 Segments, targets and the market offer 280 9.5 Using the marketing mix 282 9.6 The product life cycle 287 9.7 Customer relationship management 289 9.8 A marketing orientation 290 9.9 Integrating themes 293 Summary 294 Test your understanding 295 Think critically 296 Develop a skill – identifying customer needs 296 Read more 297 Go online 297 Part Case: The Virgin Group298 Part Employability skills – preparing for the world of work 303 PART ORGANISING CHAPTER 10 ORGANISATION STRUCTURE 312 Case study: GlaxoSmithKline (GSK) 313 10.1 Introduction 314 10.2 Strategy, organisation and performance 314 10.3 Designing a structure 316 10.4 Dividing work internally – functions, divisions and matrices 322 10.5 Dividing work externally – outsourcing and networks 326 10.6 Coordinating work 328 10.7 Mechanistic and organic forms 330 10.8 Learning organisations 337 10.9 Integrating themes 339 Summary 340 Test your understanding 342 Think critically 342 A01_BODD8594_07_SE_FM.indd ix HUMAN RESOURCE MANAGEMENT 346 Case study: BMW 347 11.1 Introduction 348 11.2 HRM and performance 348 11.3 What HR managers do? 353 11.4 Human resource planning 355 11.5 Job analysis 355 11.6 Recruitment and selection 357 11.7 Reward management 362 11.8 Equal opportunities and diversity 364 11.9 Integrating themes 367 Summary 368 Test your understanding 369 Think critically 370 Develop a skill – preparing for an interview 370 Read more 371 Go online 371 CHAPTER 12 INFORMATION SYSTEMS AND E-BUSINESS 372 Case study: Google 373 12.1 Introduction 374 12.2 Converging technologies – new ways to add value 375 12.3 Managing the new opportunities to add value 378 12.4 Types of information systems 383 12.5 The internet and e-business 384 12.6 IS, strategy and organisation – the big picture 392 12.7 Integrating themes 395 Summary 397 Test your understanding 398 Think critically 399 Develop a skill – setting a project agenda 399 Read more 399 Go online 400 CHAPTER 13 CREATIVITY, INNOVATION AND CHANGE 402 Case study: Dyson 403 13.1 Introduction 404 13.2 Creativity and innovation 405 13.3 Sources of innovation 409 13.4 Organisational influences on innovation 413 13.5 Implementing innovation and change 415 9/6/16 5:15 PM ... CHAPTER MANAGING IN ORGANISATIONS 4 Case study: Ryanair 5 1.0 Management knowledge and management skill 6 1.1 Introduction 7 1.2 Managing to add value to resources 8 1.3 Meanings of management 11... Cataloguing-in-Publication Data Names: Boddy, David, author Title: Management : an introduction / David Boddy Description: Seventh Edition | New York : Pearson, 2016 | Revised edition of the author’s Management, 2014... A01_BODD8594_07_SE_FM.indd 9/6/16 5:15 PM David Boddy University of Glasgow MANAGEMENT An Introduction Seventh Edition Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney •