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Modern
Management concepts & skills
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SAM
fifteenth edition
CONTENTS vii
Conclusions about the Performance of Social Promoting Diversity through Hudson Institute
Responsibility Activities by Business 46 Strategies 77
Social Responsiveness 47 Promoting Diversity through Equal Employment
Determining Whether a Social Responsibility Exists 47 and Affirmative Action 78
Social Responsiveness and Decision Making 48 Promoting Diversity through Organizational
Commitment 79
TIPS FOR MANAGING AROUND THE
GLOBE: China Focuses on Agricultural (Ag) Promoting Diversity through Pluralism 80
Sustainability 48 TIPS FOR MANAGING AROUND THE GLOBE:
Approaches to Meeting Social Responsibilities 49 Deloitte UK “Hides” College and University
Degrees 81
The Social Audit Challenge 50
How Managers Promote Diversity 82
The Philanthropy Challenge 51
Planning 82
The Sustainable Organization Challenge 52 Organizing 82
Defining Sustainability 52 Influencing 83
Defining a Sustainable Organization 52 Controlling 83
Why Sustainability? 53
STEPS FOR SUCCESS: Generation Z Members and
Steps for Achieving Sustainability 54 Their Challenges 83
PRACTICAL CHALLENGE: ACHIEVING Management Development and Diversity
SUSTAINABILITY: Mars 54 Training 84
Managers and Ethics 56
CHALLENGE CASE SUMMARY 86
A Definition of Ethics 56
Why Ethics Is a Vital Part of Management Class Preparation and Personal Study 87
Practices 56 Management Skills Exercises 88
A Code of Ethics 57
Creating an Ethical Workplace 57
STEPS FOR SUCCESS: Creating an Ethical Work
Environment 59
Following the Law: Sarbanes–Oxley Reform 5 Managing in the Global Arena 93
Standards 59
Global Management Skill and Your Career 93
CHALLENGE CASE SUMMARY 60
CHALLENGE CASE: KFC Opens a Store a Day in
Class Preparation and Personal Study 62 China 94
Management Skills Exercises 63
Fundamentals of International
Management 95
4 Management and Diversity 67
Categorizing Organizations by Level of
Diversity Skill and Your Career 67 International Involvement 97
Domestic Organizations 97
CHALLENGE CASE: Diverse Employees International Organizations 97
Contribute to GE Lighting’s Bright Future 68 Multinational Organizations: The Multinational
Corporation 97
Defining Diversity 69
The Social Implications of Diversity 69
Multinational Corporations 98
Complexities of Managing the Multinational
Advantages of Diversity in Organizations 70 Corporation 98
Gaining and Keeping Market Share 70
PRACTICAL CHALLENGE: GROWING AN
Cost Savings 70 INTERNATIONAL ONLINE BUSINESS:
Increased Productivity and Innovation 71 Amazon’s International Expansion 100
Better Quality Management 71 Risk and the Multinational Corporation 100
Challenges That Managers Face in Working with The Workforce of Multinational
Diverse Populations 72 Corporations 100
Changing Demographics 72 Types of Organization Members Found in Multinational
Multigenerational Workforce 73 Corporations 101
Ethnocentrism and Other Negative Dynamics 73 Workforce Adjustments 101
PRACTICAL CHALLENGE: SETTING DIVERSITY Adjusting to a New Culture 101
TARGETS: Pinterest Sets Hiring Goals for a More Repatriation 101
Diverse Workforce 74
Management Functions and Multinational
Negative Dynamics and Specific Groups 75
Corporations 102
Strategies for Promoting Diversity in Planning in Multinational Corporations 102
Organizations 77
TIPS FOR MANAGING AROUND THE GLOBE: Using Control Tools to Control Organizations 473
Exercising Power across Cultures 437 Inspection 473
Making Controlling Successful 438 Management by Exception 473
Essentials of Information 439 Management by Objectives 474
Factors Influencing the Value of Information 439 Break-Even Analysis 474
STEPS FOR SUCCESS: Getting a Handle Other Broad Operations Control Tools 476
on Big Data 441 CHALLENGE CASE SUMMARY 477
Evaluating Information 442
The Information System (IS) 443 Class Preparation and Personal Study 479
Describing the IS 443 Management Skills Exercises 480
PRACTICAL CHALLENGE: USING DATA FROM
SOCIAL MEDIA: Twitter Feeds Businesses’
Needs 444 Appendix 1 Managing: History and Current
Managing Information Systems 446
Thinking 484
CHALLENGE CASE SUMMARY 448
Comprehensive Management Skill and Your
Class Preparation and Personal Study 449 Career 484
Management Skills Exercises 450
CHALLENGE CASE: How Management
Innovation Keeps Ford Moving Ahead 485
20 Production and Control 455 The Classical Approach 486
Production Skill and Your Career 455 Lower-Level Management Analysis 487
PRACTICAL CHALLENGE: IMPROVING
CHALLENGE CASE: Tesla Production Will Be PRODUCTIVITY: Tracking Sensors Take Work
Fastest in History 456 Measurement to a New Level 488
Comprehensive Analysis of Management 490
Production and Productivity 457 Limitations of the Classical Approach 491
Defining Production 457
The Behavioral Approach 491
Productivity 457
The Hawthorne Studies 492
Quality and Productivity 458 Recognizing the Human Variable 492
Focus on Continual Improvement 458
STEPS FOR SUCCESS: Understanding
Focus on Quality and Integrated Operations 458 Employees 493
PRACTICAL CHALLENGE: CONTINUAL The Human Relations Movement 493
IMPROVEMENT: At Wisconsin Hospitals, Costs
The Management Science Approach 493
Fall as Quality Rises 459
The Beginning of the Management
Automation 460
Science Approach 494
Strategies, Systems, and Processes 461
Management Science Today 494
Operations Management 462
Characteristics of Management Science
Defining Operations Management 462 Applications 495
Operations Management Considerations 462
The Contingency Approach 495
TIPS FOR MANAGING AROUND THE GLOBE:
Choosing a Factory Location: Volkswagen Picks The System Approach 495
North America 464 Types of Systems 496
Systems and “Wholeness” 496
Operations Control 467
The Management System 496
Just-in-Time Inventory Control 467
Information for Management System Analysis 497
Maintenance Control 468
Cost Control 469 Learning Organization: A New Approach? 498
Budgetary Control 469 TIPS FOR MANAGING AROUND THE GLOBE:
STEPS FOR SUCCESS: Controlling with a IBM’s “Crowded” Learning Environment 499
Budget 470 CHALLENGE CASE SUMMARY 499
Ratio Analysis 471
Materials Control 472 Class Preparation and Personal Study 500
Operations Control Tools 472 Management Skills Exercises 501
S. Trevis Certo is the Jerry B. and Mary Anne Chapman Professor of Business in the Depart-
ment of Management and Entrepreneurship in the W. P. Carey School of Business at Arizona
State University. His research focuses on corporate governance, top management teams, ini-
tial public offerings (IPOs), and research methodology. Trevis’s research has appeared in Acad-
emy of Management Journal, Academy of Management Review, Strategic Management Journal, Journal of
Management, Journal of Business Venturing, Entrepreneurship Theory and Practice, Journal of Management
Studies, Business Ethics Quarterly, Journal of Business Ethics, California Management Review, and Business
Horizons. Trevis also serves on the editorial boards of Academy of Management Journal and Strategic
Management Journal. Trevis has taught undergraduate, MBA, EMBA, and PhD courses in strate-
gic management, research methodology, and international business at Arizona State University,
Texas A&M University, Indiana University, Tulane University, and Wuhan University (China).
xv
Thank you for taking the time to review our book. If you are reading this right now, you likely
agree with our (perhaps biased) opinion that Management is one of the most important courses
that students will take in their academic careers. Regardless of their majors, management will
likely be in your students’ futures. Whether your students graduate to become salesforce mem-
bers, financial analysts, or supply chain specialists, they will undoubtedly work for managers.
This book will help students understand how managers work. Moreover, the concepts in this
text will help students prepare for their own future management positions.
It is hard to believe that this management textbook, now in its fifteenth edition, is over 35 years
old. While a little younger than companies such as Apple and Microsoft, it is amazing to think
that our book is older than companies like Alphabet (Google), Costco, Amazon, Lockheed
Martin, and Netflix. Like these leading companies, our book has advanced over the years, rely-
ing on one constant theme: innovation. We created a product that resonated with the academic
community, and we continuously innovated over the decades that followed. Specifically, over
the years we have continued to integrate leading-edge research on individuals, teams, and orga-
nizations with pedagogical techniques designed to enhance students’ performance, their ability
to obtain employment, and ultimately their careers.
The unique approach of our book is that each chapter in our comprehensive text helps students
develop a specific management skill. The content specifically focuses on how students can be
more strategic and more creative, work as team members, become successful leaders, and more.
We designed our chapters to build these skills (and others) to fulfill the objective of this book: To
help students both obtain employment and flourish in the workplace.
The work on the pages that follow is largely the result of our interactions with the many instruc-
tors around the globe who use our book. Thank you! If we can help, please do not hesitate to
email us!
Sincerely,
Applying
Management
Concepts
xvii
Tips for Managing Around the Globe, Steps for Success, and Practical Challenge callouts
highlight practical applications of management concepts.
Each chapter references assignable exercises in MyLab Management like branching, scenario-
based Try It! Mini Sims and Watch It! Videos about real companies to provide even more
opportunities for students to apply the concepts they are learning to real-world situations.
Developing Management
Skills
2. Because there is a time also required, that men may fill up the
measure of their sinnes.
Vse. This may serve to admonish us, not to condemne God any
way either of slownesse or rashnesse in respect of his judgements,
but to rest well satisfied in his most wise ordering of all things.
Reason 1. Because when they suffer for the name of God, God
doth in some sort suffer with them, and therefore their cause is Gods
cause.
Reason 1. Because they cannot suffer for the name of Christ but
as they suffer for well doing.
Verse 2. Feed the flock of God which is among you, taking the
oversight thereof, not by constraint, but willingly: not for filthy
lucre, but of a ready minde.
The Analysis.
Vse. This may serve to direct us, in all our exhortations and
admonitions to have respect unto this.
Vse. This may serve to admonish every one to take greatest care
of those duties which are proper to his calling or condition.
2. Because that which comes not from the heart, and is not done
willingly, is done only perfunctorily and for fashion sake, not with that
diligence and care which God requires.
3. Because that which proceeds not from the heart and the
deerest affection of the soule, doth not usually worke upon other
mens mindes, and therefore is not effectuall to the edification of the
Church, which is the end of the Ministery.
Reason 1. Because they are called to feed the flock with all their
strength; and therefore they should edifie the Church not only by
their words, but by their deeds also.
4. Because it takes away all prejudice out of mens minds, and all
suspicion of affecting Lordlinesse and vaine glory, when they see
Ministers seriously to do that, which they propound and perswade
others to do.
2. Because they must expect many injuries from men, and those
good things which doe happen, are not such, or so highly to be
esteemed of, as that they should depend upon them.
3. Because they will labour to please him most, from whom they
expect their reward. Now they should please Christ, not men.
Reason 1. Because glory is the reward of the faithfull for all kinde
of obedience towards God: Now in the Ministery there is a speciall
kinde of obedience.
Verse 7. Casting all your care upon him, for he careth for you.
The Analysis.
Reason 1. Because the same God and Lord both of Pastors &
people, hath imposed and prescribed to both their duties.
Use. This may serve to reprove those that are very curious and
rigid in exacting their Pastors duty, when in the meane time they are
nothing carefull of their own dutie.
Vse. This may serve to reprove those that come unto Sermons,
as Judges, to play the Criticks, not to subject themselves to the will
of God, and such as cast off all discipline as an intollerable yoke.
Vse. This may serve to refute all those, that seeke for honour and
reputation by arrogancy; and shunne humility as it were a vile
debasing of a mans selfe.
Vse. This may serve to exhort us, greatly to labour for humility.
Vse. This may serve to admonish us, not to suffer our selves so
much as in thought to be led away from our obedience towards God,
but from the meditation of Gods omnipotency and our own infirmity
to increase daily more and more in humility.
2. Because they glorifie God, and therefore God will exalt them
according to his promise, Those that honour me, I will honour.
Vse. This may serve to direct us, to seek for true exaltation by
humilitie and submission.
Vse. This may serve to comfort all the godly, because God hath
freed them from all care; and they should imbrace this libertie by true
faith, and putting their trust in him, and apply it to themselves.
Verse 9. Whom resist stedfast in the faith, knowing that the same
afflictions are accomplished in your brethren that are in the
world.
Verse 10. But the God of all grace, who hath called us into his
eternall glory by Christ Iesus, after that ye have suffered a while,
make you perfect, stablish, strengthen, settle you.
Verse 11. To him be glory and dominion for ever and ever. Amen.
The Analysis.
2. Because the care of the world doth draw and distract the
minde, so that although it doth not altogether exclude religion, yet it
doth diminish and weaken it.