MNGT 301 Exam 4 (CH.16/18/19)

Contributions of Teams

1)Creativity and innovation-Because teams include people with diverse skills, strengths, experiences, and perspectives, they contribute to a higher level of creativity and innovation in the organization 2)Improved quality-One criterion for organizational effectiveness is whether products and services meet customer requirements for quality. Perhaps nowhere is this more essential than in health care. The days when a lone physician could master all the skills, keep all the information in his or her head, and manage everything required to treat a patient are long gone. Organizations that provide the highest quality of patient care are those in which teams of closely coordinated professionals provide an integrated system of care 3)Speed of response-Tightly integrated teams can maneuver incredibly fast 4)Higher productivity and lower costs-Effective teams can unleash enormous energy from employees. Social facilitation-The tendency for the presence of others to enhance one's performance 5)Enhanced motivation and satisfaction-people have needs for belongingness and affiliation. Working in teams can meet these needs and create greater camaraderie across the organization. Teams also reduce boredom, increase people's feelings of dignity and self-worth, and give people a chance to develop new skills. Individuals who work in an effective team cope better with stress, enjoy their jobs more, and have a higher level of motivation and commitment to the organization

cash budget

A budget that estimates receipts and expenditures of money on a daily or weekly basis to ensure that an organization has sufficient cash to meet its obligations The cash budget shows the level of funds flowing through the organization and the nature of cash disbursements. If the cash budget shows that the firm has more cash than necessary to meet short-term needs, the company can arrange to invest the excess to earn interest income. In contrast, if the cash budget shows a payroll expenditure of $40,000 coming at the end of the week but only $30,000 in the bank, the organization must borrow cash to meet the payroll.

revenue budget

A budget that lists forecasted and actual revenues of the organization In general, revenues below the budgeted amount signal a need to investigate the problem to see whether the organization can improve revenues. In contrast, revenues above budget would require determining whether the organization can obtain the necessary resources to meet the higher-than-expected demand for its products or services. Managers then formulate action plans to correct the budget variance.

expense budget

A budget that outlines the anticipated and actual expenses for a responsibility center An expense budget may show all types of expenses, or it may focus on a particular category, such as materials or research and development expenses. When actual expenses exceed budgeted amounts, the difference signals the need for managers to identify possible problems and take corrective action if needed. The difference may arise from inefficiency, or expenses may be higher because the organization's sales are growing faster than anticipated. Conversely, expenses below budget may signal exceptional efficiency or possibly the failure to meet some other standards, such as a desired level of sales or quality of service. Either way, expense budgets help identify the need for further investigation but do not substitute for it

capital budget

A budget that plans and reports investments in major assets to be depreciated over several years Capital expenditures not only have a large impact on future expenses, but they also are investments designed to enhance profits. Therefore, a capital budget is necessary to plan the impact of these expenditures on cash flow and profitability. Controlling involves not only monitoring the amount of capital expenditures, but also evaluating whether the assumptions made about the return on the investments are holding true. Managers can evaluate whether continuing investment in particular projects is advisable, as well as whether their procedures for making capital expenditure decisions are adequate

Integrative negotiation

A collaborative approach that is based on a win-win assumption, whereby the parties want to come up with a creative solution that benefits both sides of the conflict. With integrative negotiation, conflicts are managed through cooperation and compromise, which fosters trust and positive long-term relationships

Distributive negotiation

A competitive and adversarial approach in which each party strives to get as much as it can, usually at the expense of the other party. With this win-lose approach, distributive negotiation is competitive and adversarial, rather than collaborative, and does not typically lead to positive long-term relationships

balanced scorecard

A comprehensive management control system that balances traditional financial measures with measures of customer service, internal business processes, and the organization's capacity for learning and growth A balanced scorecard contains four major perspectives: Financial performance-The financial performance perspective reflects a concern that the organization's activities contribute to improving short- and long-term financial performance. It includes traditional measures such as net income and return on investment Customer service-Customer service indicators measure information such as how customers view the organization and customer retention and satisfaction. These data may be collected in many forms, including testimonials from customers describing superlative service or from customer surveys. Internal business processes-Business process indicators focus on production and operating statistics. For an airline, business process indicators may include on-time arrivals and adherence to safety guidelines Potential for learning and growth-The final component of the balanced scorecard looks at the organization's potential for learning and growth, focusing on how well resources and human capital are being managed for the company's future. Metrics may include things such as employee retention and the introduction of new products

Negotiation

A conflict management strategy whereby people engage in give-and-take discussions and consider various alternatives to reach a joint decision that is acceptable to both parties

global team

A group made up of employees who come from different countries and whose activities span multiple countries

cross-functional team

A group of employees from various functional departments that meet as a team to resolve mutual problems One type of cross-functional team is a task force, which is a group of employees from different departments formed to deal with a specific activity and existing only until the task is completed special-purpose team-A team created outside the formal structure to undertake a project of special importance, such as developing a new product. Sometimes called a project team, a special-purpose team still is part of the formal organization structure, but members perceive themselves as a separate entity

Job characteristics model

A model of job design that considers core job dimensions, individuals' critical psychological states, and employee growth-need strength Core Job Dimensions involve: Skill variety-This is the number of diverse activities that compose a job and the number of skills used to perform it. A routine, repetitious assembly-line job is low in variety, whereas an applied research position that involves working on new problems every day is high in variety Task identity- This is the degree to which an employee performs a total job with a recognizable beginning and ending. A chef who prepares an entire meal has more task identity than a worker on a cafeteria line who ladles mashed potatoes Task significance-This is the degree to which the job is perceived as important and having an impact on the company or consumers. People who distribute penicillin and other medical supplies during times of emergencies would feel that they have significant jobs Autonomy-This is the degree to which the worker has freedom, discretion, and self-determination in planning and carrying out tasks. A house painter can determine how to paint the house; a paint sprayer on an assembly line has little autonomy Feedback- This is the extent to which doing the job provides feedback to the employee about his or her performance Critical Psychological States: The model posits that core job dimensions are more rewarding when individuals experience three psychological states in response to job design. Skill variety, task identity, and task significance tend to influence the employee's psychological state of experienced meaningfulness of work. The work itself is satisfying and provides intrinsic rewards for the worker. The job characteristic of autonomy influences the worker's experienced responsibility. The job characteristic of feedback provides the worker with knowledge of actual results. The employee thus knows how he or she is doing and can change work performance to increase desired outcomes Personal and Work Outcomes: The impact of the five job characteristics on the psychological states of experienced meaningfulness, responsibility, and knowledge of actual results leads to the personal and work outcomes of high work motivation, high work performance, high satisfaction, and low absenteeism and turnover Employee Growth-Need Strength: The final component of the job characteristics model is called employee growth-need strength, which means that people have different needs for growth and development. If a person wants to satisfy low-level needs, such as safety and belongingness, the job characteristics model has less effect. When a person has a high need for growth and development, including the desire for personal challenge, achievement, and challenging work, the model is especially effective

ERG theory

A modification of the needs hierarchy that proposes three categories of needs: existence, relatedness, and growth. 1) Existence Needs-The needs for physical well-being 2) Relatedness Needs-The needs for satisfactory relationships with others 3)Growth Needs-The needs that focus on the development of human potential and the desire for personal growth and increased competence

Six Sigma

A quality control approach that emphasizes a relentless pursuit of higher quality and lower costs Six Sigma quality principles were first introduced by Motorola in the 1980s and were later popularized by General Electric (GE), where former CEO Jack Welch praised Six Sigma for quality and efficiency gains that saved the company billions of dollars. Based on the Greek letter sigma, which statisticians use to measure how far something deviates from perfection is a highly ambitious quality standard that specifies a goal of no more than 3.4 defects per million parts. That essentially means being defect-free 99.9997 percent of the time

Extrinsic rewards

A reward given by another person, such as a manager, including pay increases, promotions, and praise. They originate externally, as a result of pleasing others. At the Alta Gracia factory in the Dominican Republic, owned by Knights Apparel, employees are motivated by the extrinsic reward of high pay because they need money to support their families and can't make nearly as much anywhere else Effective managers want people to receive both extrinsic and intrinsic rewards to meet their needs.

Process theories

A set of theories, including goal-setting theory, equity theory, and expectancy theory, which explains how people select behaviors with which to meet their needs and determine whether their choices were successful.

Decentralized control

A situation where the organization fosters compliance with organizational goals through the use of organizational culture, group norms, and a focus on goals rather than rules and procedures

functional team

A team composed of a manager and his or her subordinates in the formal chain of command. Sometimes called a command team, the functional team in some cases may include three or four levels of hierarchy within a functional department. Typically, the team includes a single department in an organization. A financial analysis department, a quality control department, an engineering department, and a human resource department are all functional teams. Each is created by the organization to attain specific goals through members' joint activities and interactions

virtual team

A team made up of members who are geographically or organizationally dispersed, rarely meet face to face, and interact to accomplish their work primarily using advanced information and telecommunications technologies According to recent surveys, nearly half of all organizations use virtual teams, and about 80 percent of responding employees say they have worked in a virtual team at some time. Most managers expect the use of virtual teams will continue to grow. In a virtual team, members use groupware, e-mail, instant messaging, telephone and text messaging, wikis and blogs, videoconferencing, and other technology tools to collaborate and perform their work, although they also might meet face to face at times. Although some virtual teams are made up of only organizational members, virtual teams often include contingent workers, members of partner organizations, customers, suppliers, consultants, or other outsiders One of the primary advantages of virtual teams is the ability to assemble the most talented group of people to complete a complex project, solve a particular problem, or exploit a specific strategic opportunity. The diverse mix of people can fuel creativity and innovation. On a practical level, organizations can save employees time and cut travel expenses when people meet in virtual rather than physical space However, virtual teams also present unique challenges, particularly in terms of building rapport and trust: Use virtual technology to build trust and relationships for effective teamwork. How it's done effectively:Bring attention to and appreciate diverse skills and opinions, Use technology to enhance communication and trust, Ensure timely responses online,Manage online socialization. Shape culture through virtual technology to reinforce productive norms: How it's done effectively:Create a psychologically safe virtual culture,Share members' special experience and strengths,Engage members from cultures that may discourage people from sharing their ideas Monitor progress and reward members to keep the team progressing toward its goals. How it's done effectively:Scrutinize electronic communication patterns,Post targets and scorecards in virtual work space,Reward people through online ceremonies and recognition

task specialist role

A team role in which an individual devotes personal time and energy to helping the team accomplish its activities and reach its goal They often display the following behaviors: Initiate ideas-Propose new solutions to team problems Give opinions-Offer judgments on task solutions; give candid feedback on others' suggestions Seek information-Ask for task-relevant facts Summarize-Relate various ideas to the problem at hand; pull ideas together into a brief overview Energize-Stimulate the team into action when interest drops

socioemotional role

A team role in which an individual provides support for team members' emotional needs and helps strengthen social unity They display the following behaviors: Encourage-Are warm and receptive to others' ideas; praise and encourage others to draw forth their contributions Harmonize-Reconcile group conflicts; help disagreeing parties reach agreement Reduce tension-Tell jokes or diffuse emotions in other ways when the group atmosphere is tense Follow-Go along with the team; agree to other team members' ideas Compromise-Shift own opinions to maintain team harmony Teams with mostly socioemotional roles can be satisfying, but they also can be unproductive. At the other extreme, a team made up primarily of task specialists will tend to have a singular focus on task accomplishment. This team will be effective for a short period of time but will not be satisfying for members over the long run. Effective teams have people in both task specialist and socioemotional roles. A well-balanced team will do best over the long term because it will be personally satisfying for team members, and it will permit the accomplishment of team tasks.

Self-managed teams

A team that consists of multiskilled employees who rotate jobs to produce an entire product or service, often led by an elected team member typically consist of 5 to 20 multiskilled workers Self-managed teams are related to the trend toward the bossless organization. The central idea is that the teams themselves, rather than managers or supervisors, take responsibility for their work, make decisions, monitor their own performance, and alter their work behavior as needed to solve problems, meet goals, and adapt to changing conditions A self-managed team is a permanent team that typically includes the following elements: The team includes employees with several skills and functions, and its combined skills are sufficient to perform a major organizational task The team is given access to the resources, such as information, equipment, machinery, and supplies, needed to perform the complete task The team is empowered with decision-making authority, which means that members have the freedom to select new members, solve problems, spend money, monitor results, and plan for the future. Self-managed teams can enable employees to feel challenged, find their work meaningful, and develop a stronger sense of identity with the organization

Reinforcement theory

A theory based on the relationship between a given behavior and its consequences

Maslow's hierarchy of needs theory

A theory proposed by Abraham Maslow saying that people are motivated by five categories of needs—physiological, safety, belongingness, esteem, and self-actualization—that exist in a hierarchical order. Higher needs to lower needs order: 1)Self-actualization needs-These needs include the need for self-fulfillment, which is the highest need category. They concern developing one's full potential, increasing one's competence, and becoming a better person. Self-actualization needs can be met in the organization by providing people with opportunities to grow, be creative, and acquire training for challenging assignments and advancement. 2)Esteem Needs-These needs relate to the desire for a positive self-image and the desire to receive attention, recognition, and appreciation from others. Within organizations, esteem needs reflect a motivation for recognition, an increase in responsibility, high status, and credit for contributions to the organization. 3)Belongingness Needs-These needs reflect the desire to be accepted by one's peers, have friendships, be part of a group, and be loved. In the organization, these needs influence the desire for good relationships with coworkers, participation in a work group, and a positive relationship with supervisors. 4)Safety Needs-These needs include a safe and secure physical and emotional environment and freedom from threats—that is, for freedom from violence and for an orderly society. In the workplace, safety needs reflect the needs for safe jobs, fringe benefits, and job security 5)Physiological needs-These most basic human physical needs include food, water, and oxygen. In the organizational setting, they are reflected in the needs for adequate heat, air, and base salary to ensure survival. According to Maslow's theory, low-order needs take priority—they must be satisfied before higher-order needs are activated. The needs are satisfied in sequence: Physiological needs come before safety needs, safety needs before belongingness needs, and so on

Equity theory

A theory that focuses on individuals' perceptions of how fairly they are treated relative to others. Equity theory proposes that people are motivated to seek social equity in the rewards they receive for performance. According to equity theory, if people perceive their compensation as equal to what others receive for similar contributions, they will believe that their treatment is fair and equitable. People evaluate equity by a ratio of inputs to outcomes. Inputs to a job include education, experience, effort, and ability. Outcomes from a job include pay, recognition, benefits, and promotions. The input-to-outcome ratio may be compared to that of another person in the work group or to a perceived group average Equity-When the ratio of one person's outcomes to inputs equals that of another's Inequity-occurs when the input-to-outcome ratios are out of balance, such as when a new, inexperienced employee receives the same salary as a person with a high level of education or experience Change work effort-A person may choose to increase or decrease his or her inputs to the organization. Individuals who believe that they are underpaid may reduce their level of effort or increase their absenteeism. Overpaid people may increase their effort on the job Change outcome-A person may change his or her outcomes. An underpaid person may request a salary increase or a bigger office. A union may try to improve wages and working conditions to be consistent with a comparable union whose members make more money Change perceptions-Research suggests that people may change perceptions of equity if they are unable to change inputs or outcomes. They may increase the status attached to their jobs artificially or distort others' perceived rewards to bring equity into balance Leave the job-People who feel inequitably treated may decide to leave their jobs rather than suffer the inequity of being underpaid or overpaid. In their new jobs, they expect to find a more favorable balance of rewards.

Social learning theory

A theory that proposes that an individual's motivation can result not just from direct experience of rewards and punishments but also from thoughts, beliefs, and observations of other people's behavior Vicarious learning(observational learning)-Learning that occurs when an individual sees others perform certain behaviors and get rewarded for them

Goal-setting theory

A theory that proposes that specific, challenging goals increase motivation and performance when they are accepted by subordinates and these subordinates receive feedback to indicate their progress toward goal achievement. Goal specificity-refers to the degree to which goals are concrete and unambiguous. Specific goals, such as "Visit one new customer each day" or "Sell $1,000 worth of merchandise a week," are more motivating than vague goals, such as "Keep in touch with new customers" or "Increase merchandise sales." A lack of clear, specific goals is cited as a major cause of the failure of pay-for-performance incentive plans in many organizations.Footnote Vague goals can be frustrating for employees. goal difficulty-hard goals are more motivating than easy ones. Easy goals provide little challenge for employees and don't require them to increase their output. Highly ambitious but achievable goals ask people to stretch their abilities and provide a basis for greater feelings of accomplishment and personal effectiveness Goal acceptance-means that employees have to "buy into" the goals and be committed to them. Having people participate in setting goals is a good way to increase acceptance and commitment. feedback-means that people get information about how well they are doing in progressing toward goal achievement. It is important for managers to provide performance feedback on a regular, ongoing basis. However, self-feedback, where people are able to monitor their own progress toward a goal, has been found to be an even stronger motivator than external feedback

quality circle

A total quality management (TQM) technique that involves a group of 6-12 volunteer employees who meet regularly to discuss and solve problems affecting the quality of their work At a set time during the workweek, the members of the quality circle meet, identify problems, and try to find solutions. Circle members are free to collect data and take surveys. Many companies train people in team building, problem solving, and statistical quality control. The reason for using quality circles is to push decision making to an organization level at which recommendations can be made by the people who do the job and know it better than anyone else At Carrier Collierville, a manufacturer of residential air conditioners and heat pumps, a quality circle attacked a leak issue at braze joints on a heat pump component. Changes made to the work area resulted in a 50 percent reduction in leaks and associated repair costs

team

A unit of two or more people who interact and coordinate their work to accomplish a goal to which they are committed and hold themselves mutually accountable The definition of a team has three components. First, two or more people are required. Second, people in a team interact regularly. People who do not interact (for example, people standing in line at a lunch counter or riding in an elevator) do not compose a team. Third, people in a team share a performance goal, whether it is to design a new smartphone, build an engine, or complete a class project

Open-book management

Allows employees to see for themselves the financial condition of an organization and encourages them to think and act like business owners One important aspect of decentralized control in many organizations is open-book management. An organization that promotes information sharing and teamwork admits employees throughout the organization into the loop of financial control and responsibility to encourage active participation and commitment to goals The goal of open-book management is to get every employee thinking and acting like a business owner. To get employees to think like owners, management provides them with the same information owners have: what money is coming in and where it is going. Open-book management helps employees appreciate why efficiency is important to the organization's success as well as their own

Work Redesign

Altering jobs to increase both the quality of employees' work experience and their productivity

Conflict

An antagonistic interaction in which one party attempts to block the intentions or goals of another

Zero-based budgeting

An approach to planning and decision making that requires a complete justification for every line item in a budget, instead of carrying forward a prior budget and applying a percentage change A zero-based budget begins with a starting point of $0, and every dollar added to the budget is reflected by an actual, documented need

Engagement

An emotional and mental state in which employees enjoy their work, contribute enthusiastically to meeting goals, and feel a sense of belonging and commitment to the organization Managers can improve engagement by providing employees with three key elements: a sense of meaningfulness, a sense of connection, and a sense of growth 1)People feel that they are working toward something important-When employees have a chance to accomplish something that provides real value, they feel a sense of meaningfulness. Good managers help people understand the purpose of their work, which contributes to feelings of pride and dignity 2)People feel connected to the company, to one another, and to their managers-In a survey asking people what factors contribute to their engagement, 79 percent of people said "good relationships with coworkers" drove engagement to a high or very high extent. Even more (91 percent) pointed to good relationships with their immediate supervisor as highly important 3)People have the chance to learn, grow, and advance-To be fully engaged, people need not only to feel that they are competent to handle what is asked of them, but also that they have the chance to learn and expand their potential

Team norm

An informal standard of conduct that is shared by team members and guides their behavior. Norms are valuable because they provide a frame of reference for what is expected and acceptable. Norms begin to develop in the first interactions among members of a new team. Sometimes the first behaviors that occur in a team set a precedent Critical Norms for an effective team: Psychological safety-Psychological safety means a team climate characterized by mutual trust and respect, in which team members are comfortable being themselves. Psychological safety is composed of both emotional expression and social sensitivity. Emotional expression is when people in effective teams feel comfortable enough to express their emotions as well as their thoughts. Team members communicate freely and easily in a relaxed way and may joke around and share personal stories. Social Sensitivity is when a team's collective intelligence also increases when people are sensitive to and inquire into one another's moods and emotions. Team members pay attention to and ask about one another's facial expressions, body language, and other nonverbal cues Equal participation-In effective teams, all team members participate in roughly equal proportion. No one member or subset of members dominates the conversation

total quality management (TQM)

Another popular approach based on a decentralized control philosophy, which focuses on managing the total organization to deliver quality to customers an organization-wide effort to infuse quality into every activity in a company through continuous improvement. Managing quality is a concern for every organization

responsibility center

Any organizational department or unit under the supervision of a single person who is responsible for its activity

Team diversity

Because teams require a variety of skills, knowledge, and experience, it seems likely that heterogeneous teams would be more effective than homogeneous ones. In general, research supports this idea, showing that diverse teams produce more innovative solutions to problems Diversity in terms of functional area and skills, thinking styles, and personal characteristics is often a source of creativity. In addition, diversity may contribute to a healthy level of disagreement that leads to better decision making Research studies have confirmed that both functional diversity and demographic diversity can have a positive impact on work team performance. Ethnic, national, and racial diversity sometimes can hinder team interaction and performance in the short term, but with effective leadership, the problems fade over time

Task conflict

Conflict that results from disagreements about the goals to be achieved or the content of the tasks to be performed In general, research suggests that task conflict can be beneficial because it leads to better decision making and problem solving. On the other hand, relationship conflict is typically associated with negative consequences for team effectiveness

Relationship conflict

Conflict that results from interpersonal incompatibility that creates tension and personal animosity among people

profitability ratios

Describes the firm's profits relative to a source of profits, such as sales or assets profit margin on sales=net income/sales gross margin=gross income/sales Return on assets=Net income/total assets ROA is a valuable yardstick for comparing a company's ability to generate earnings with other investment opportunities. In basic terms, the company should be able to earn more by using its assets to operate the business than it could by putting the same investment in the bank

Ways of expressing conflict

Four primary ways of expressing conflict are as follows: High directness-high intensity- A person using this approach expresses a conflict unambiguously by using aggressive or antagonistic verbal and nonverbal communication, such as shouting, scowling, or eye rolling High directness-low intensity-With this approach, communication is also unambiguous, but the person uses a low-voltage style, such as asking questions, listening, debating, and deliberating Low directness-high intensity-A person using this approach expresses a conflict ambiguously but uses aggressive tactics. This may include behaviors such as ignoring another's viewpoint, mean-spirited teasing or bullying, back-stabbing, or undermining the opponent to third parties Low directness-low intensity-With this approach, a person expresses conflict in an ambiguous, low-key way. Behaviors might include withholding information an opponent needs or deliberately missing a deadline The most constructive way to express a conflict is high directness-low intensity. This approach enables people to take other viewpoints into consideration and work together toward a positive outcome. When conflicts are expressed with high intensity, others tend to respond with defensiveness. They may stop listening and hold fast to their own positions, making a positive resolution unlikely. Expressing conflict in an indirect way can hurt team performance because decisions may be made without complete information and the conflict will escalate without being resolved. Effective team leaders and members typically use a direct but low-key approach

Two-factor theory

Herzberg interviewed hundreds of workers about times when they were highly motivated to work and other times when they were dissatisfied and unmotivated. His findings suggested that the work characteristics associated with dissatisfaction were quite different from those pertaining to satisfaction, which prompted the notion that two factors influence work motivation. The center of the scale-is neutral, meaning that workers are neither satisfied nor dissatisfied hygiene factors-Elements that focus on lower-level needs and consider the presence or absence of job dissatisfiers, including working conditions, pay, interpersonal relationships, and company policies. When hygiene factors are poor, work is dissatisfying. However, good hygiene factors simply remove the dissatisfaction; they do not in themselves cause people to become highly satisfied and motivated in their work. Motivators-Factors that influence job satisfaction based on fulfilling higher-level needs such as achievement, recognition, responsibility, and opportunities for personal growth. Herzberg believed that when motivators are absent, workers are neutral toward work, but when motivators are present, workers are highly motivated and satisfied. Thus, hygiene factors and motivators represent two distinct factors that influence motivation. Hygiene factors work only in the area of dissatisfaction. Unsafe working conditions or a noisy work environment will cause people to be dissatisfied, but correction of these conditions will not lead to a high level of motivation and satisfaction. Motivators such as challenge, responsibility, and recognition must be in place before employees will be highly motivated to excel at their work

Job Enrichment

Incorporating high-level motivators, such as achievement, recognition, and opportunities for growth, into work

liquidity ratio

Indicates the organization's ability to meet its current debt obligations current ratio=current assets/current liabilities tells whether the company has sufficient assets to convert into cash to pay off its debts, if needed quick ratio=cash+accounts receivable/current liabilities. The quick ratio is a popular metric to pair with the current ratio to gauge liquidity

quality partnering

Involves assigning dedicated personnel within a particular functional area of the business to identify opportunities for quality improvements throughout the work process In this approach, the quality control personnel work alongside others within a functional area identifying opportunities for quality improvements throughout the work process. This integrated, partnering approach to quality makes it possible to detect and address defects early in the product life cycle, when they can be corrected most easily. Another advantage of this approach is that quality partners are viewed as "insiders" and peers who are readily accepted into the work group

bottom-up budgeting

Involves lower-level managers anticipating their department's budget needs and passing them up to top management for approval

Hierarchical control

Involves monitoring and influencing employee behavior through the use of rules, policies, hierarchy of authority, written documentation, reward systems, and other formal mechanisms

Five common dysfunctions of teams

Lack of trust—People don't feel safe to reveal mistakes, share concerns, or express ideas Fear of conflict—People go along with others for the sake of harmony; don't express conflicting opinions. Lack of commitment—If people are afraid to express their true opinions, it's difficult to gain their true commitment to decisions Avoidance of accountability—People don't accept responsibility for outcomes; engage in finger-pointing when things go wrong. Inattention to results—Members put personal ambition or the needs of their individual departments ahead of collective results.

Ch.18

Leading Teams

4 steps of feedback control

Managers set up control systems that consist of the four key steps: Establish Standards of Performance-Within the organization's overall strategic plan, managers define goals for organizational departments in specific, operational terms that include a standard of performance against which to compare organizational activities. Tracking such measures as customer service, product quality, or order accuracy is an important supplement to traditional financial and operational performance measurement, but many companies have a hard time identifying and defining nonfinancial measurements. To evaluate and reward employees effectively for the achievement of standards, managers need clear standards that reflect activities that contribute to the organization's overall strategy in a significant way. Standards should be defined clearly and precisely so that employees know what they need to do and can determine whether their activities are on target Measure Actual Performance-Most organizations prepare formal reports of quantitative performance measurements that managers review daily, weekly, or monthly. Managers should take care, however, that they are not generating reports just because they have data to do so.Footnote These measurements should be related to the standards set in the first step of the control process, and the reports should be designed to help managers evaluate how well the organization is meeting its standards Compare Performance to Standards-The third step in the control process is comparing actual activities to performance standards. When managers read computer reports or walk through the plant, they identify whether actual performance meets, exceeds, or falls short of standards. Typically, performance reports simplify such comparisons by placing the performance standards for the reporting period alongside the actual performance for the same period and by computing the variance—that is, the difference between each actual amount and the associated standard. To correct the problems that most require attention, managers focus on variances. When performance deviates from a standard, managers must interpret the deviation. They are expected to dig beneath the surface and find the cause of the problem. Managers should take an inquiring approach to deviations to gain a broad understanding of factors that influence performance. Effective management control involves subjective judgment and employee discussions, as well as objective analysis of performance data. Take Corrective Action-The final step in the feedback control model is to determine what changes, if any, are needed

Ch.19

Managing Quality and Performance

Electronic Monitoring

Many organizations have moved toward increased hierarchical control with the use of electronic monitoring.Footnote A survey from the American Management Association found that 66 percent of employers monitor the Internet use of their employees, 45 percent track employee keystrokes, and 43 percent monitor employee e-mail. Supermarkets can measure how long it takes a cashier to scan items, how many times she has to rescan, and how long it takes for her to initiate the next sale. Retail workers may have to clock in with a thumb scan, which prevents an employee from clocking in for a colleague who hasn't yet arrived. With today's technology, managers can keep tabs on what employees are doing practically all the time.

top-down budgeting

Means that the budgeted amounts for the coming year are literally imposed on middle-and lower-level managers These managers set departmental budget targets in accordance with overall company revenues and expenditures specified by top executives

activity ratio

Measures the organization's internal performance with respect to key activities defined by management Inventory turnover=total sales/average inventory This ratio tells how many times the inventory is used up to meet the total sales figure. If inventory sits too long, money is wasted. conversion ratio=purchase orders/customer inquiries. This ratio is an indicator of a company's effectiveness in converting inquiries into sales

Team size

More than 30 years ago, psychologist Ivan Steiner examined what happened each time the size of a team increased, and he proposed that a team's performance and productivity peaked when it had about five members. Steiner found that adding members beyond five caused a decrease in motivation, an increase in coordination problems, and a general decline in performance. Since then, numerous studies have found that smaller teams perform better, although most researchers say that it's impossible to specify an optimal team size. One investigation of team size based on data from 58 software development teams found that the best-performing teams ranged in size from three to six members Teams need to be large enough to incorporate the diverse skills needed to complete a task, enable members to express good and bad feelings, and aggressively solve problems. However, they also should be small enough to permit members to feel an intimate part of the team and to communicate effectively and efficiently. The ability of people to identify with the team is an important determinant of high performance At Amazon, CEO Jeff Bezos established a "two-pizza rule." If a team gets so large that members can't be fed with two pizzas, it should be split into smaller teams.Footnote In general, as a team increases in size, it becomes harder for each member to interact with and influence the others. Subgroups often form in larger teams, and conflicts among them can occur. Turnover and absenteeism are higher because members feel less like an important part of the team.Footnote Although the Internet and advanced technologies are enabling larger groups of people to work more effectively in virtual teams, studies show that members of smaller virtual teams participate more actively, are more committed to the team, are more focused on team goals, and have higher levels of rapport than larger virtual teams

Ch.16

Motivating Employees

A simple model of motivation

Need-creates desire to fulfill needs, such as money, friendship, recognition, and achievement Behavior-results in actions to fulfill needs Rewards-satisfy needs; intrinsic or extrinsic rewards Feedback-reward informs person whether behavior was appropriate and should be used again

Causes of Conflict

One of the primary causes is competition over resources, such as money, information, or supplies. When individuals or teams must compete for scarce or declining resources, conflict is almost inevitable. In addition, conflict often occurs simply because people are pursuing differing goals. Goal differences are natural in organizations. Individual salespeople's targets may put them in conflict with one another or with the sales manager. Moreover, the sales department's goals might conflict with those of manufacturing, and so forth Conflict may also arise from communication breakdowns. Poor communication can occur in any team, but virtual and global teams are particularly prone to communication breakdowns

Lump-sum bonuses

Organizations are increasingly using various types of incentive compensation as a way to motivate employees to higher levels of performance. Reward employees with a one-time cash payment based on performance

Expectancy theory

Proposes that motivation depends on individuals' assumptions about their ability to perform tasks and receive desired rewards. Expectancy theory is based on the relationship among the individual's effort, the individual's performance, and the desirability of outcomes associated with high performance E → P expectancy-The assumption that putting effort into a given task will lead to high performance. For this expectancy to be high, the individual must have the ability, previous experience, and necessary equipment, tools, and opportunity to perform P → O expectancy-involves determining whether successful performance will lead to the desired outcome or reward. If the P → O expectancy is high, the individual will be more highly motivated. If the expectancy is that high performance will not produce the desired outcome, motivation will be lower Valence-The value of outcomes (rewards) to the individual

Job Design

Refers to applying motivational theories to the structure of work to improve motivation, productivity, and satisfaction

ISO 9000 standards

Represent an international consensus of what constitutes effective quality management as outlined by the International Organization for Standardization (ISO) in Geneva Switzerland Hundreds of thousands of organizations in 157 countries, including the United States, have been certified against ISO 9000 standards to demonstrate their commitment to quality. Europe continues to lead in the total number of certifications, but the greatest number of new certifications in recent years has been in the United States. One of the more interesting organizations to become ISO certified was the Phoenix, Arizona, police department's Records and Information Bureau. In today's environment, where the credibility of law enforcement agencies has been called into question, the bureau wanted to make a clear statement about its commitment to the high quality and accuracy of information provided to law enforcement personnel and the public ISO certification has become the recognized standard for evaluating and comparing companies on a global basis, and more U.S. companies are feeling the pressure to participate to remain competitive in international markets. In addition, many countries and companies require ISO certification before they will do business with an organization.

4 key strategies for achieving a win-win solution through integrative negotiation

Separate the people from the problem Focus on underlying interests, not current demands.Demands are what each person wants from the negotiation, whereas underlying interests represent the "why" behind the demands. Demands create yes-or-no obstacles to effective negotiation, whereas interests present problems that can be solved creatively. Listen and ask questions Insist that results be based on objective standards

balance sheet

Shows the firm's financial position with respect to assets and liabilities at a specific point in time Think of the balance sheet as a thermometer that provides a reading on the health of the business at the moment you take its temperature current assets-cash, accounts receivable, inventory fixed assets-land, building and structures, Total assets=current assets+fixed assets-depreciation current liabilities-accounts payable, accrued expenses, income taxes payable long-term liabilities-mortgage payable, bonds outstanding owner's equity-common stock, retained earnings Assets-liabilities=net worth

Frustration-regression principle

Suggests that failure to meet a high-order need may cause a regression to an already satisfied lower-order need; thus, people may move down as well as up the needs hierarchy.

income statement

Summarizes a firm's financial performance for a given time interval sometimes called a profit-and-loss statement or P&L for short, summarizes the firm's financial performance for a given time interval, usually one year Some organizations calculate the income statement at three-month intervals during the year to see whether they are on target for sales and profits. The income statement shows revenues coming into the organization from all sources and subtracts all expenses, including cost of goods sold, interest, taxes, and depreciation bottom line-indicates the net income—profit or loss—for the given time period Gross sales-sales returns=net sales Expenses and cost of goods sold-depreciation, sales expenses, administrative expenses Net sales-expenses=operating profit-gross income or other income-interest expense =income before taxes-taxes=net income

Telematics

Technologies that wirelessly transmit data from remote sensors and GPS devices to computers for analysis Telematics is projected to be a $30 billion industry by 2018. With the use of telematics that includes handheld delivery-information acquisition devices (DIADs) and more than 200 sensors on each delivery truck, managers at UPS can monitor a driver's speed, seat belt use, stop times, and more. UPS says telematics not only benefits the company but helps the environment as well. In one recent year, the company says telematics saved 1.7 million driving miles, 15 million minutes of idling time, and 103,000 gallons of gas Electronic monitoring can have both positive and negative effects. By using an electronic system that assigns and monitors tasks for its warehouse workers, United Grocers, a large wholesaler, says the firm was able to cut payroll expenses by 25 percent while increasing sales by 36 percent

Motivation

The arousal of enthusiasm and persistence to pursue a certain course of action refers to the forces either within or external to a person that arouse enthusiasm and persistence to pursue a certain course of action Employee motivation affects productivity, and part of a manager's job is to channel motivation toward the accomplishment of organizational goals. It is the responsibility of managers to find the right combination of motivational techniques and rewards to satisfy employees' needs and simultaneously encourage great work performance. People have needs—such as for recognition, achievement, or monetary gain—that translate into an internal tension that motivates specific behaviors with which to fulfill various needs. To the extent that the behavior is successful, the person is rewarded because the need is satisfied. The reward also informs the person that the behavior was appropriate and can be used again in the future.

Benchmarking

The continuous process of measuring products, services, and practices against major competitors or industry leaders 5 steps: The first step involves planning the benchmarking study, which includes identifying the objectives of the study and the characteristics of a product or service that significantly influence customer satisfaction. The second step involves identifying the source of the information to be collected. For example, the sources of data for a Sherwin-Williams benchmarking study might include national independent lab studies or studies published in Consumer Reports magazine. Once the source of information is identified, data is then collected. Xerox collected information on the order fulfillment techniques of L. L. Bean, the Freeport, Maine, mail-order firm, and learned ways to reduce warehouse costs by 10 percent. The fourth step includes analyzing the benchmarking data that has been collected and recommending areas of improvement. The fifth step includes implementing recommendations and then monitoring them through continuous benchmarking

Empowerment

The delegation of power and authority to subordinates in an organization. Increasing employee power heightens motivation for task accomplishment because people improve their own effectiveness, choosing how to do a task and using their creativity Empowering employees involves giving them four elements that enable them to act more freely to accomplish their jobs: 1)Employees receive information about company performance-In companies where employees are fully empowered, all employees have access to all financial and operational information 2)Employees have knowledge and skills to contribute to company goals-Companies use training programs and other development tools to help people acquire the knowledge and skills that they need to contribute to organizational performance 3)Employees have the power to make substantive decisions-Empowered employees have the authority to influence work procedures and organizational performance directly, such as through quality circles or self-directed work teams 4)Employees are rewarded based on company performance-Organizations that empower workers often reward them based on the results shown in the company's bottom line. Organizations may also use other motivational compensation programs that tie employee efforts to company performance

Team Cohesiveness

The extent to which team members are attracted to the team and motivated to remain a part of it Members of highly cohesive teams are committed to team activities, attend meetings, and are happy when the team succeeds. Members of less cohesive teams are less concerned about the team's welfare. High cohesiveness is normally considered an attractive feature of teams Determinants: Several characteristics of team structure and context influence cohesiveness. First is team interaction. When team members have frequent contact, they get to know one another, consider themselves a unit, and become more committed to the team.Footnote Second is the concept of shared goals. If team members agree on purpose and direction, they will be more cohesive. Third is personal attraction to the team, meaning that members have similar attitudes and values and enjoy being together. Two factors in the team's context also influence cohesiveness. The first is the presence of competition. When a team is in moderate competition with other teams, its cohesiveness increases as it strives to win. Finally, team success and the favorable evaluation of the team by outsiders add to cohesiveness. When a team succeeds in its task and others in the organization recognize the success, members feel good, and their commitment to the team will be high Consequences of Team Cohesiveness: The outcome of team cohesiveness can fall into two categories—morale and productivity. As a general rule, morale is higher in cohesive teams because of increased communication among members, a friendly team climate, maintenance of membership because of commitment to the team, loyalty, and member participation in team decisions and activities. High cohesiveness has almost uniformly good effects on the satisfaction and morale of team members. With respect to the productivity of the team as a whole, research findings suggest that teams in which members share strong feelings of connectedness and generally positive interactions tend to perform better.Footnote Thus, a friendly, positive team environment contributes to productivity as well as member satisfaction. Highly cohesive teams were more productive when team members felt management support and less productive when they sensed management hostility and negativism

Making progress principle

The idea that the single most important factor that can boost motivation, positive emotions, and perceptions during a workday is making progress toward meaningful goals

Intrinsic rewards

The satisfaction that a person receives in the process of performing a particular action. The completion of a complex task may bestow a pleasant feeling of accomplishment, or solving a problem that benefits others may fulfill a personal mission. For example, employees at Salesforce.com, which provides cloud computing services to organizations such as Bank of America, Cisco, Google, and the Japanese government, are motivated by being on the "cutting edge" of reinventing how companies handle ordinary but critical tasks like sales, customer relations, and internal communications.

Behavior modification

The set of techniques by which reinforcement theory is used to modify human behavior law of effect-Asserts that positively reinforced behavior tends to be repeated, and unreinforced or negatively reinforced behavior tends to be inhibited Reinforcement-Anything that causes a certain behavior to be repeated or inhibited Positive reinforcement-The administration of a pleasant and rewarding consequence following a desired behavior Negative reinforcement(Avoidance learning)-Removing an unpleasant consequence once a behavior is improved. The idea is that people will change a specific behavior to avoid the undesired result that the behavior provokes. As a simple example, a supervisor who constantly reminds or nags an employee who is goofing off on the factory floor and stops the nagging when the employee stops goofing off is applying avoidance learning Punishment-The imposition of an unpleasant outcome following an undesirable behavior Extinction-Withholding positive rewards and essentially ignoring undesirable behavior. With extinction, undesirable behavior is essentially ignored. The idea is that behavior that is not positively reinforced will gradually disappear

Adjourning

The stage during which members of temporary teams prepare for the team's disbanding. During this stage, the emphasis is on wrapping up and gearing down. Task performance is no longer a top priority. Members may feel heightened emotionality, strong cohesiveness, and depression or regret over the team's disbanding. At this point, the leader may wish to signify the team's disbanding with a ritual or ceremony, perhaps giving out plaques and awards to members to signify closure and completeness

Norming

The stage of team development in which conflicts are resolved and team harmony and unity emerge. Consensus develops on who has the power, who the leaders are, and what the various members' roles are. Members come to accept and understand one another. Differences are resolved, and members develop a sense of team cohesion. During the norming stage, the team leader should emphasize unity within the team and help to clarify team norms and values.

Storming

The stage of team development in which individual personalities emerge and people become more assertive in clarifying their roles and what is expected of them. This stage is marked by conflict and disagreement. People may disagree over their perceptions of the team's goals or how to achieve them. Members may jockey for position, and coalitions or subgroups based on common interests may form. Unless teams can successfully move beyond this stage, they may get bogged down and never achieve high performance. During the storming stage, the team leader should encourage participation by each team member. Members should propose ideas, disagree with one another, and work through the uncertainties and conflicting perceptions about team tasks and goals. The expression of emotions, even negative ones, helps to build camaraderie and a shared understanding of goals and tasks

Performing

The stage of team development in which members focus on problem solving and accomplishing the team's assigned task. Members are committed to the team's mission. They are coordinated with one another and handle disagreements in a mature way. They confront and resolve problems in the interest of task accomplishment. They interact frequently and direct their discussions and influence toward achieving team goals. During this stage, the leader should concentrate on managing high task performance. Both socioemotional and task specialist roles contribute to the team's functioning

Forming

The stage of team development involving a period of orientation and getting acquainted. Members break the ice and test one another for friendship possibilities and task orientation. Uncertainty is high during this stage, and members usually accept whatever power or authority is offered by either formal or informal leaders. During this initial stage, members are concerned about things such as "What is expected of me?" "What behavior is acceptable?" and "Will I fit in?" During the forming stage, the team leader should provide time for members to get acquainted with one another and encourage them to engage in informal social discussions

Organizational control

The systematic process through which managers regulate organizational activities to meet planned goals and standards of performance Most organizations measure and control performance using quantitative financial measures

Styles of handling conflicts

The two major dimensions are the extent to which an individual is assertive versus unassertive and cooperative versus uncooperative in his or her approach to conflict The dominating style (my way) reflects assertiveness to get one's own way and should be used when quick, decisive action is vital on important issues or unpopular actions, such as during emergencies or urgent cost-cutting requirements(assertive/uncooperative) The compromising style (halfway) reflects a moderate amount of both assertiveness and cooperativeness. It is appropriate when the goals on both sides are equally important, when opponents have equal power and both sides want to split the difference, or when people need to arrive at temporary or expedient solutions under time pressure(half-way on both being assertive and being cooperative) The accommodating style (your way) reflects a high degree of cooperativeness, which works best when people realize that they are wrong, when an issue is more important to others than to oneself, when building social credits for use in later discussions, and when maintaining harmony is especially important(unassertive/cooperative) The collaborating style (our way) reflects a high degree of both assertiveness and cooperativeness. The collaborating style enables both parties to win, although it may require substantial bargaining and negotiation. The collaborating style is important when both sets of concerns are too important to be compromised, when insights from different people need to be merged into an overall solution, and when the commitment of both sides is needed for a consensus(assertive/cooperative) The avoiding style (no way) reflects neither assertiveness nor cooperativeness. It is appropriate when an issue is trivial, when there is no chance of winning, when a delay to gather more information is needed, or when a disruption would be costly(unassertive/uncooperative)

Four Categories of Motives Managers Can Use

The vertical dimension contrasts intrinsic versus extrinsic rewards. The horizontal dimension contrasts behaviors that are driven by fear or pain versus those driven by growth or pleasure. 1) Negative Approach-Threats and punishments(Extrinsic with pain and fear) For example, some companies have found that penalizing employees for smoking or being overweight by charging extra for health insurance is an effective way to change behaviors and lower company health care costs. The practice is growing, with leaders citing behavioral science research showing that people typically respond more strongly to a potential loss (such as a financial penalty for not losing weight), a response referred to as loss aversion 2) Negative Approach-Tap into self-doubts(Intrinsic with pain and fear) For example, a manager might motivate people to work hard by emphasizing the weak economy and high unemployment rate. 3)Positive Approach-Rewards such as pay raises, bonuses, praise(Extrinsic with pleasure and growth) At Hilcorp Energy, for example, managers offered employees the chance to earn a bonus of $100,000 each if they helped the organization meet its growth goal 4)Positive Approach-Help people enjoy their work, get a sense of accomplishment(Intrinsic with pleasure and growth For example, at Morrison Management Specialists, which provides food, nutrition, and dining services to the health care and senior living industries, managers provide training sessions under the title of "Our Great Partnership" and strive to help people see how their jobs make a difference in the lives of elderly or ill people

Content theories

Theories that emphasize the needs that motivate people

Dilemma of teamwork

There are three primary reasons that teams present a dilemma for many people: We have to give up our independence-When people become part of a team, their success depends on the team's success; therefore, they must depend on how well other people perform, not just on their own individual initiative and actions. We have to put up with free riders-Teams are sometimes made up of people who have different work ethics. Free Rider-A person who benefits from team membership but does not make a proportionate contribution to the team's work. Free riding is sometimes called social loafing because some members do not exert equal effort Teams are sometimes dysfunctional-Some companies have had great success with teams, but there are also numerous examples of how teams in organizations fail spectacularly.Footnote "The best groups will be better than their individual members, and the worst groups will be worse than the worst individual," says organizational psychologist Robert Sutton.

Balancing Conflict and Cooperation

There is evidence that mild conflict can be beneficial to teams.Footnote A healthy level of conflict helps to prevent groupthink, which people are so committed to a cohesive team that they are reluctant to express contrary opinions. However, conflict that is too strong, that is focused on personal rather than work issues, or that is not managed appropriately can be damaging to the team's morale and productivity. Too much conflict can be destructive, tear relationships apart, and interfere with the healthy exchange of ideas and information Too little conflict can decrease team performance because the team doesn't benefit from a mix of opinions and ideas—even disagreements—that might lead to better solutions or prevent the team from making mistakes. At the other end of the spectrum, too much conflict outweighs the team's cooperative efforts and leads to a decrease in employee satisfaction and commitment, hurting team performance. A moderate amount of conflict, when it is managed appropriately, typically results in the highest levels of team performance.

Effective team characteristics

Trust—Members trust one another on a deep emotional level; feel comfortable being vulnerable with one another. Healthy conflict—Members feel comfortable disagreeing and challenging one another in the interest of finding the best solution. Commitment—Because all ideas are put on the table, people can achieve genuine buy-in around important goals and decisions. Accountability—Members hold one another accountable rather than relying on managers as the source of accountability Results orientation—Individual members set aside personal agendas; focus on what's best for the team. Collective results define success

Acquired needs theory

developed by David McClelland, proposes that certain types of needs are acquired during the individual's lifetime. In other words, people are not born with these needs but may learn them through their life experiences Need for achievement-The desire to accomplish something difficult, attain a high standard of success, master complex tasks, and surpass others Need for affiliation-The desire to form close personal relationships, avoid conflict, and establish warm friendships Need for power-The desire to influence or control others, be responsible for others, and have authority over others Early life experiences typically determine whether people acquire these needs. If children are encouraged to do things for themselves and receive reinforcement, they will acquire a need to achieve. If they are reinforced for forming warm human relationships, they will develop a need for affiliation. If they get satisfaction from controlling others, they will acquire a need for power

Trust

is a crucial aspect of teamwork. People must be willing to collaborate and sometimes sacrifice their individual objectives for the sake of the larger goal, which requires that they believe that others are willing to do the same thing

Job

is a unit of work that a single employee is responsible for performing. A job could include writing tickets for parking violators in New York City, performing magnetic resonance imaging (MRI) at Salt Lake Regional Medical Center, or doing long-range planning for Netflix

Work Team Effectiveness

is based on three outcomes—productive output, personal satisfaction, and the capacity to adapt and learn Productive output pertains to performance and the quality and quantity of task outputs as defined by team goals Satisfaction pertains to the team's ability to meet the personal needs of its members and hence maintain their membership and commitment Capacity to adapt and learn refers to the ability of teams to bring greater knowledge and skills to job tasks and enhance the potential of the organization to respond to new threats or opportunities in the environment

Job Enlargement

is to combine a series of small tasks into one new, broader job so that people perform a variety of activities

Job rotation

is to move employees systematically from one job to another to provide variety and stimulation

Budgetary control

one of the most commonly used methods of managerial control, is the process of setting targets for an organization's expenditures, monitoring results and comparing them to the budget, and making changes as needed. As a control device, budgets are reports that list planned and actual expenditures for cash, assets, raw materials, salaries, and other resources. In addition, budget reports usually list the variance between the budgeted and actual amounts for each item A budget is created for every division or department within an organization, no matter how small, as long as it performs a distinct project, program, or function.

Continuous improvement

or kaizen, is the implementation of a large number of small, incremental improvements in all areas of the organization on an ongoing basis Innovations can start simple, and employees can build on their success in this unending process Thanks to La-Z-Boy's dedication to continuous improvement, operating expenses have been reduced by about $50 million a year. Over a recent three-year period, productivity improved by 42 percent and scrap was reduced by 71 percent.

leverage ratios

refers to funding activities with borrowed money. A company can use leverage to make its assets produce more than they could on their own. However, too much borrowing can put the organization at risk for being unable to keep up with repayment of its debt debt ratio=total debt/total assets Lenders may consider a company with a debt ratio above 1.0 to be a poor credit risk

Teamwork

requires bringing together the right set of personalities, specialties, and skills; clearly defining roles and responsibilities; focusing everyone on a well-defined mission; establishing clear channels of communication and information sharing so that team members communicate their objectives and needs in all directions; and getting everyone to sublimate their individual egos and pull together in the same direction

Variable compensation and forms of "at risk" pay

such as bonus plans are key motivational tools that are becoming more common than fixed salaries at many companies

interdependent

which means that individuals and departments rely on other individuals and departments for information or resources to accomplish their work. When tasks are highly interdependent, a team can be the best approach to ensuring the level of coordination, information sharing, and exchange of materials necessary for successful task accomplishment