Samantha Parks is the owner and CEO of Sparks, a small agency that develops advertising, promotions, and marketing materials for high-fashion firms. 119 Parks has tended to keep a tight rein on her business, overseeing most projects from start to finish. However, as the firm has grown, she has found it necessary to delegate more and more decisions to her associates. She was recently approached by a hairstyling chain that wants a comprehensive redefinition of its entire marketing and promotions look. Should Samantha try to manage this project in her traditional way, or should she delegate major parts to her employees? Most managers confront this question at some point in their careers. Some experts propose that top executives need to stay very close to the creative core of their business, which means that even if their primary responsibility is to manage, CEOs should never cede too much control to committees of creative individuals or they can lose sight of the firm’s overall future direction. Moreover, executives who do fall out of touch with the creative process risk being passed over by new generation of “plugged in” employees who better understand how the business really works. Others offer the opposite advice, saying it’s not a good idea for a CEO to “sweat the small stuff” such as managing individual client accounts or projects. These advise executives to identify everything they can “outsource” to other employees and to delegate as much as possible. By eliminating trivial tasks, executives will be better able to focus their attention on the most important decision making and control aspects of their jobs, which will help the business and also ensure that the top executive maintains control over the functions that really matter. These pieces of advice are not necessarily in conflict with one another. The real challenge is to identify what you can delegate effectively without ceding too much power and control away from the person with the unifying vision. That is certainly easier said than done, though. 1. If you were Samantha Parks, how would you prioritize which projects or parts of projects to delegate? 2. In explaining what makes her decisions hard, Parks said, “I hire good people, creative people, to run these projects, and I worry that they will see my oversight and authority as interfering with their creative process.” How can she deal with these concerns without giving up too much control? 3. Should executives try to control projects to maintain their position of authority? Do they have a right to control projects and keep in the loop on important decisions just so they can remain in charge?
> One product produced and sold by Outback Outfitters is an ATV gun rack for which 2010 projections are as follows: Projected volume in units ……………………………………………120,000 Sales price per unit ……………………………………………………………$60 Variable production cost per unit …………………
> You were talking to your roommate one day about CVP analysis and the approaches that are used to calculate the break-even point. You also described the assumptions that underlie this type of analysis. Your roommate proclaimed, “Wow, you people in account
> Following is information pertaining to Dayton Co.’s operations of the first and second quarter of 2010: Additional Information • There were no finished goods at January 1, 2010. • Dayton Co. writes of
> Layton Ironworks manufactures a variety of industrial valves and pipe fittings sold primarily to customers in the United States. Currently, the company is operating at 70 percent of capacity and is earning a satisfactory return on investment. Prince Ind
> Calypso Canvas makes canvas window awnings. You have been asked to predict the potential effects of some proposed company changes. The following information is available: Variable cost per unit Direct material …………………………………$18.40 Direct labor ……………………………
> Fairbanks Express is a luxury passenger carrier in Alaska. All seats are first class, and the following data are available: Number of seats per passenger train car ……………………60 Average load factor (percentage of seats filled) …………75% Average full passenger
> Ted Tyner owns Sixth Man Hotel, a luxury hotel with 60 two-bedroom suites for coaches and their players. Capacity is 10 coaches and 50 players. Each suite is equipped with extra-long king-sized beds, super-tall and extended shower heads, extra-tall bathr
> Nature’s Own makes three types of wood flooring: Oak, Hickory, and Cherry. The company’s tax rate is 40 percent. The following costs are expected for 2011: Per-square-yard expected selling prices are as follows: Oak,
> The Pink Flamingo, Inc., manufactures plastic lawn ornaments. Currently the firm manufactures three items: reindeer, snowmen, and flamingos. For each reindeer, two snowmen and four flamingos are sold. The firm is in a 40 percent tax bracket. a. What is
> The Glass Menagerie makes small pressed resin ducks and ducklings. For every duck sold, the company sells five ducklings. The following information is available about the company’s selling prices and cost: a. What is the average contri
> Yard Bird manufactures commercial and residential riding lawnmowers. The company sells one commercial mower per three residential mowers sold. Selling prices for the commercial and residential mowers are, respectively, $5,600 and $1,800, and variable sel
> Golf Glider makes gasoline-powered golf carts. The selling price is $5,000 each, and costs are as follows: Golf Glider’s income is taxed at a 40 percent rate. a. How many golf carts must Golf Glider sell to earn $600,000 after tax? b.
> The Real Deal is a social organization that performs charitable work in its local community. The club has the following monthly cost and fee information: monthly membership fee per member, $60; monthly variable cost of service per member, $25; and monthl
> Mons Weatherby owns a sports brokerage agency and sells tickets to major league baseball, football, and basketball games. He also sells sports travel packages that include game tickets, airline tickets, and hotel accommodations. Revenues are commissions
> Aqua Gear, in business since 2008, makes swimwear for professional athletes. Analysis of the firm’s financial records for the current year reveals the following: Average swimsuit selling price …………………………………$70 Variable swimsuit expenses Direct mat
> Beantown Baseball Company makes baseballs that sell for $13.00 per two-pack. Current annual production and sales are 960,000 baseballs. Costs for each baseball are as follows: Direct material ………………………………………….$2.00 Direct labor ………………………………………………...1.25
> Casper Karts manufactures a three-wheeled shopping cart that sells for $60. Variable manufacturing and variable selling cost are, respectively, $35 and $10 per unit. Annual fixed cost is $975,000. a. What is the contribution margin per unit and the contr
> In its first year of operations, Utah Utility Trailers incurred the following costs: Variable production cost …………………………………………$ 2,800 per unit Variable selling and administrative cost ……………………….200 per unit Fixed production cost ……………………………………………………..$20
> Forester Fashions is considering the purchase of computerized clothes-designing software. The software is expected to cost $320,000, have a useful life of 5 years, and have no salvage value at the end of its useful life. Assume that tax regulations permi
> The owner of Bolt’s Cold Storage is considering a $195,000 installation of a new refrigerated storage room. The storage room has an expected life of 20 years with no salvage value. The storage room is expected to generate net annual cash revenues (before
> Pete’s Paving provides custom paving of sidewalks and driveways. One of the most labor-intensive aspects of the paving operation is preparing and mixing materials. Sharon Guillon, corporate engineer, has found new computerized equipment to mix (and monit
> Shelly’s Tax Services prepares tax returns for individuals and small businesses. The firm employs four tax professionals. Currently, all tax returns are prepared on a manual basis. The firm’s owner, Shelly Foster, is considering purchasing a computer sys
> Pneu Shoe Company manufactures various types of athletic shoes. Several types require a built-in air pump. Presently, the company makes all air pumps it requires. However, management is evaluating an offer from Ram Air Co. to provide air pumps at a cost
> Best Bakery is considering the purchase of a new delivery truck to replace an existing unit. The truck would cost $45,000 and would have a life of 7 years with no salvage value. The existing truck could be sold currently for $4,000, but, if it is kept, i
> Holly’s Fashions is considering expanding\ its building so it can stock additional merchandise for travelers and tourists. Store z manager Jill Eliason anticipates that building expansion costs would be $190,000. The firm’s suppliers are willing to provi
> Candice Klammer was reprimanded by the home office for recommending a pollution abatement project because the project did not meet the standard financial criterion of a 12 percent rate of return. However, Klammer had concluded that the $600,000 piece of
> The management of Pittsburgh Pipe is evaluating a proposal to buy a new turning lathe as a replacement for a less efficient piece of similar equipment that would then be sold. The new lathe’s cost, including delivery and installation, i
> New England Metals is considering adding a new product line that has an expected life of 8 years. The product manufacturer would require the firm to incur setup costs of $6,400,000 to handle the new product line. All product line revenues will be collect
> Ten years ago, based on a pre-tax NPV analysis, Sante’s Sporting Goods decided to add a new product line. The data used in the analysis were as follows: Discount rate ………………………………………………….10% Life of product line ……………………………………10 years Annual sales increa
> CXI has formal policies and procedures to screen and approve capital projects. Proposed capital projects are classified as one of the following types: 1. expansion requiring new plant and equipment, 2. expansion by replacement of present equipment with m
> Dave’s Drilling is considering the acquisition of new manufacturing equipment that has the same capacity as the current equipment. The new equipment will provide $150,000 of annual operating efficiencies in direct and indirect labor, direct material usag
> Illinois Investments is considering purchasing a 50-room motel for sale outside of Atlanta as an investment. The current owners state that the motel’s occupancy rate averages 80 percent each of the 300 days per year the motel is open. Each room rents for
> LA Property Management is expanding operations, and the firm’s president, Mike Mayberry, is trying to make a decision about new office space. The following are the firm’s options: Maple Commercial Plaza 5,000 square feet; cost, $800,000; investment peri
> Use the information for Bill’s Cabinets in Exercise 9 and assume a tax rate for the company of 30 percent. Information given in Exercise 9: Bill’s Cabinets sells a product for $360 per unit. The company’s variable cost per unit is $60 for direct materia
> Although they should be considered independently, often the investing and financing decisions are considered together. Consider the following quote from personal finance guru Suze Orman: It drives me nuts to see all the money wasted on car leases. In my
> As one of the division managers for Premier Inc., your performance is evaluated primarily on a single measure: after-tax divisional segment income less the cost of capital invested in divisional assets. The fair value of invested capital in your division
> Miami Marine uses ROI to evaluate the performance of both its Powerboat and Sailboat Division managers. The following estimates of relevant measures have been made for the upcoming year: Both division managers have the autonomy to make decisions regardi
> Morton Industrial produces stamping machinery for manufacturers. In 2009, the company expanded vertically by acquiring a supplier, Lancaster Company. Lancaster is now operated as a divisional investment center. Morton monitors its divisions on the basis
> Imelda Sanchez, manager of the Arias Division of Poncé Chemical, is evaluated based on the division’s return on investment and residual income. Near the end of November 2010, she was reviewing the division’s financial information as well as some activiti
> Fashion Fabrics sells sewing and craft materials to specialty retail and department stores. For 2010, the company’s New York Division had the following performance targets: Asset turnover ………………………………….3.0 Profit margin ………………………………….5.5% Actual informa
> Indicate whether each of the following statements constitutes a potential disadvantage (D), or neither (N) of using transfer prices for support department costs. a. Can put all support departments on an equal footing b. Can cause certain services to be u
> Go to your university’s Web site and review the various organizational units within the university. Assuming no transfer pricing exists, make a list of the units that you believe would be classified as cost centers and profit centers.
> Indicate whether each of the following is a potential advantage (A) or disadvantage (D) of decentralization. If an item is neither an advantage nor a disadvantage, use N. a. Provision of increased job satisfaction b. Development of leadership qualities c
> Eastgate Electronics is considering a new product line that would require an investment of $140,000 in equipment and $180,000 in working capital. Store managers expect the following pattern of net cash inflows from the new product line over the life of t
> Use the information for Sheridan Shacks in Exercise and assume a tax rate for the company of 35 percent. Information given in Exercise 8: Sheridan Shacks makes portable garden sheds that sell for $1,800 each. Costs are as follows: a. If Sheridan Shacks
> Tasty Beverages began business in 2010 selling bottles of a thirst-quenching drink. Production for the first year was 104,000 bottles, and sales were 98,000 bottles. The selling price per bottle was $3.10. Costs incurred during the year were as follows:
> The great global recession has claimed many victims. 51 In many countries, unemployment is at near-historic highs, and even those who have managed to keep their jobs have often been asked to accept reduced work hours or pay cuts. Another consequence of t
> Describe a situation where your perception turned out to be wrong. What perceptual errors did you make that might have caused this to happen?
> Some researchers—psychologist Paul Ekman may be the best known—have studied whether facial expressions reveal true emotions. 185 These researchers have distinguished real smiles (so-called Duchenne smiles, named after French physician Guillaume Duchenne)
> What are employee involvement programs? How might they increase employee motivation?
> What are the three alternative work arrangements of flextime, job sharing and telecommuting? What are the advantages and disadvantages of each?
> What are the main ways that jobs can be redesigned? In your view, in what situations would one of the methods be favoured over the others?
> What is the job characteristics model? How does it motivate employees?
> What are the characteristics of a matrix organization?
> How can flexible benefits motivate employees?
> What are the six key elements that define an organization’s structure?
> What is variable pay? What variable-pay programs are used to motivate employees? What are their advantages and disadvantages?
> How can motivation theories be used to create more motivating work environments?
> How might the job of student be redesigned to make it more motivating?
> One of the members of your team continually arrives late for meetings and does not turn drafts of assignments in on time. In general this group member is engaging in social loafing. What can the members of your group do to reduce social loafing?
> What are the motivational benefits of intrinsic rewards?
> How does group size affect group performance?
> What characteristics contribute to the effectiveness of a team?
> What are the five stages of group development?
> How do group norms influence an individual’s behaviour?
> What are the characteristics of a bureaucracy, and how does it differ from a simple structure?
> What are some examples of impression management techniques?
> Do role requirements change in different situations? If so, how?
> How do you explain the growing popularity of teams in organizations?
> Define group and team. What are the different types of teams?
> When is work performed by individuals preferred over work performed by teams?
> As work has become more global, companies are realizing the benefits of composing teams of employees who not only have different cultural backgrounds, but who live in different countries. 131 These multicultural, multinational teams are extremely diverse
> Identify 4 or 5 norms that a team could put into place near the beginning of its life that might help the team function better over time.
> You and 2 other students carpool to school every day. The driver has recently taken to playing a new radio station quite loudly. You do not like the music, or the loudness. Using one of the conflict-handling intentions, indicate how you might go about re
> The following proposal was made to employees of Montreal-based Quebecor’s Vidéotron cable division: 126 Employees are asked to increase the number of hours worked per week to 40 from 35, while receiving the same pay as working the shorter work week. In a
> While much of this chapter has discussed methods for achieving harmonious relationships and getting out of conflicts, it’s also important to remember that there are situations in which too little conflict can be a problem. 112 As we noted, in creative pr
> You come across a fast-moving stream. What is the best way to cross it?
> What are the causes and consequences of political behavior?
> What are the behavioral implications of different organizational designs?
> After getting some sleep, you notice that the night sky has cleared, and so you decide to try and find your way back to base camp. You believe you should travel north and can use North Star for navigation. How do you locate the North Star?
> In the shelter that you built, you notice a spider. You heard from a fellow hiker that black widow spiders populate the area. How do you identify a black widow spider?
> Next, you decide to build a shelter for the evening. In selecting a site, what do you not have to consider?
> You are also very hungry, so you decide to eat what appear to be edible berries. When performing the Universal Edibility Test what should you do?
> You are very thirsty. You go to a nearby stream and collect some water in the small metal cup you have in your backpack. How long should you boil the water?
> It occurs to you that you can also use the fire as a distress signal. When signaling with fire, how do you form the international distress signal?
> The first thing you decide to do is to build a fire. However, you have no matches, so you use the bow-and-drill method. What is the bow-and-drill method?
> After walking for about an hour, you feel several spiders in your pants. You don’t feel any pain, but you realize some spider bites are painless. Which of these spider bites is painless?
> What is authentic leadership?
> What is the connection between sexual harassment and the abuse of power?
> What leadership roles are available to nonmanagers?
> What forces act as sources of resistance to change?
> How do charismatic and transformational leadership compare and contrast? Are they valid?
> What is Fiedler’s contingency model? Has it been supported in research?
> What are the central tenets and main limitations of behavioural theories of leadership?
> What are the conclusions of trait theories of leadership?
> What are the requirements of ethical leadership?
> What is servant leadership? How does it make a difference in organizations?
> How are leadership and management different from one another?
> Would you support a government program that gave companies incentives to send leaders undercover?
> What does it mean to be empowered? What factors lead to empowerment?