Using a Power Influence Grid to Select Stakeholders

The purpose of an overview meeting is for the project manager to identify and introduce the primary stakeholders and provide an overview of a project to all stakeholders. A stakeholder is anyone with a vested interest in the project and whose interests are affected by the project. Identifying stakeholders early on is an important part of the project communications process, disagreements between them can lead to conflicting directions and poor resource allocation, therefore their needs and expectations can affect the success of the project, (Shtub, Bard, & Globerson, 2005). Stakeholders include the project manager and the project team, the project sponsor, its internal and external end users, the organization’s functional managers, and the organization’s suppliers.

It is important to identify key stakeholders and any representatives from these groups forming the project management team should be introduced at the overview meeting so that stakeholders can be assured their needs are being met by an appropriate individual. In addition to the project manager and sponsor, key stakeholders for the project would include product development, product manufacturing, product distribution, sales, and marketing. Although external end users are stakeholders, project team members from sales and marketing are expected to communicate with them so they would not be invited to the overview meeting to avoid any future conflicts that might arise from expectations generated at this meeting. Additionally, supplier stakeholders would receive communications from project team members from manufacturing and would not be invited to this overview meeting for similar reasons.

The PMI PMBOK Guide suggests utilizing a Power/Influence Grid as one method of identifying and prioritizing stakeholders, this method is based upon their level of authority and influence over the project’s outcomes, (2008, Figure 10-4). Stakeholders and their corresponding levels of influence and authority, identified only as high or low, have been included on the table below; those stakeholders with a high level of influence are those who enable the project, while those with a high level of power can disable the project if it is underperforming. Any stakeholders with either high influence or power, represented in Quadrants 1 and 4, should be invited to the kick-off meeting. Those stakeholders with both high influence and power, (Quadrant 2), should be introduced to the other stakeholders as the project management team. As projects are dynamic and those stakeholders with low influence and low power can neither enable nor disable the project, inviting them to the kick-off meeting is unnecessary and could potentially lead to impracticable expectations on deliverables.

Power Influence Grid with Stakeholders

A. Project Sponsor (A)

B. Senior Managers (B)

C. Program Managers (C)

D. Software/Hardware Developers (D)

E. Project Management Office including Project Auditors (E)

F. Project Manager and Project Team (F)

G. Functional Managers (G)

H. Operational Managers (H)

I. Internal Customers (I)

J. Business Partners including Lenders (J)

K. External Customers (K)

L. Suppliers (L)

M. Government Regulatory Body (M)

N. Competitors (N)



References:
PMI, (2008). A guide to the project management body of knowledge (PMBOK guide) (4th ed.). Newtown Square, PA: Project Management Institute, Inc.

Shtub, A., Bard, J., & Globerson, S. (2005). Project management: processes, methodologies, and economics (2nd ed.). Upper Saddle River, NJ: Pearson.

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Project Management in Libraries

A project, by nature and definition, is a temporary initiative. The Project Management Institute, or PMI, defines a project as “a temporary endeavor that is undertaken to create a unique product, service, or result”, (2008, p. 5). In libraries and other types of service organizations, projects are usually undertaken that seek to enhance the patron or user experience. Larger projects initiated by libraries, whether they redesign space, digitize collections, or implement a new integrated library system, tend to have long term effects on the services libraries provide.

Libraries are functional organizations, with personnel located in specific departments responsible for the daily tasks associated with each specific department. Different libraries utilize different departmental names, but generally there are four major components of within library services; reference services, technical services, and circulation services, administrative services. Larger libraries may split services within these functional areas into multiple departments creating a more specialized organization, while smaller libraries may tend to combine these functional areas, for example even personnel in administrative roles may perform some reference or circulation services at times. Often even in larger libraries, staff members depending upon their duties, can provide service in and be assigned to more than one department simultaneously.

While smaller projects generally stay within a single department, as departments within a library are interrelated to produce a consistent service, larger projects usually involve selected members from each library department. Consequently, when larger projects are undertaken libraries tend to resemble matrix organizations. In such instances the manager of the project will be a person whose department has either initiated the project, has the most influence in its outcome, or whose department will be most affected by the initiative.

Projects are characterized by a life-cycle that includes: initiating the project, organizing the project, working on the project, and closing out the project, (PMI, 2008, p.16). In library modernization initiatives, as projects tend to involve newer technologies that librarians might not be fully familiar with, and concrete project management procedures may not be utilized, projects may have a tendency to linger. Ira Revels discusses how library software projects often continue without a formal plan due to the fact that libraries add additional features and incorporate system maintenance into the project, (2010). Revels goes on to maintain that this may occur for one of several reasons; proper closeout procedures are not followed, the project’s completion was not signed off , the scope of the project was not well defined initially, or leadership has not formalized an additional project for maintenance.

Shtub, Bard, and Globerson state that project managers must have a blend of technical skills, interpersonal skills, and administrative skills, (2005). Like project management, librarianship is both a highly interpersonal profession and a highly task focused profession, necessitating employees have good interpersonal skills, good technical skills, and good administrative skills as well. Assisting patrons with their information needs involves librarians having high people-focused skills, organizing and maintaining often complicated collections of information involves having high task-focused technical skills, and additionally librarians routinely administrate personnel, budgets, and policies and procedures. Unlike project managers library administrators are usually either highly interpersonal leaders, focusing primarily on interpersonal relationships, or highly task oriented leaders, focusing primarily on the successful completion of tasks.

References:

PMI, (2008). A guide to the project management body of knowledge (PMBOK guide) (4th ed.). Newtown Square, PA: Project Management Institute, Inc.

Revels, I. (2010, April). Managing digital projects. American Libraries, (41)4, 48-50.

Shtub, A., Bard, J., & Globerson, S. (2005). Project management: processes, methodologies, and economics (2nd ed.). Upper Saddle River, NJ: Pearson.

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Greenfield Financing

Although they can be inherently riskier initiatives due to currency fluctuations, liquidity problems, and internal economic infrastructure issues, emerging markets are increasingly popular destinations for investors from developed economies, especially during periods of credit turmoil. According to the MSCI Emerging Markets Index, investors in the least risky of emerging markets achieved a record 73% return in 2009, (Platt, 2010). Companies seeking to secure external financing rather than utilize internally generated funds for Greenfield initiatives in emerging economies are faced with a choice between debt financing, equity financing, or some combination of debt and equity financing.

Many countries in Eastern Europe are still experiencing rapid growth as a result of the current global economic crisis; however countries whose currencies are pegged to the currencies of developed economies are experiencing a slowing down of investment. Currencies pegged to the euro, for example, are unable to take advantage of the speedier economic recoveries that are being witnessed in neighboring countries. The fixed exchange rate of the currency prohibits it from devaluing accordingly, thus these countries are currently experiencing protracted periods of output contraction, (CEE, 2009). Although FDI was down in Eastern Europe for 2009, in part due to a slowing of M&A investment activities, record high of inward FDI stock flows in 2009 that indicate there is still a feasible investment environment for foreign investment. While its appeal for M&A initiatives may be limited due to pegged currency issues, Eastern Europe is still a suitable location Greenfield initiative for a company wishing to maximize value for its shareholders.

Debt Financing Alternatives

Raising capital by borrowing it from creditors, either individuals or institutions, by selling bonds or other financial instruments, in exchange for interest payments or transaction costs on the amount borrowed can be advantageous in this economic environment due to lower interest rates. Although assuming additional debt may be still less preferable to internal financing, it is a less expensive method than utilizing equity financing to raise working capital and debt financing has the added incentive that a firm gains a corporate tax deduction. An additional feature is that when a company assumes new debt it is generally perceived as a positive sign by the markets and its shareholders are rewarded. Additionally, in the event that a company does not want to leverage itself more than necessary, debt financing can be supplemented by capital that a firm has readily available internally through withholding profits. In some situations the lenders may require that a firm utilize equity financing for a portion of the project before they are willing to issue debt, (Lupoff, 2009). Notably, taking on additional debt by an overvalued or over-leveraged corporation can sometimes result in a firm’s inability in making timely payments on the debt; a specific disadvantage to debt financing is that an overvalued firm, not wishing to appear as such, may seek additional debt in an attempt to disguise the fact that they are overvalued, (Eiteman, Stonehill, & Moffett, 2007).

Equity Financing Alternatives
Equity financing, or financing through securitization, involves a firm selling additional common stock; it is rarer and a more expensive alternative to debt financing due to the fact that shareholders must be compensated for the additional risk. Shareholders are compensated for equity financing by being awarded dividends or capital gains, however in the event it either cannot afford to or it wishes to retain the capital a firm does not necessarily have to pay these awards. Additionally, equity financing generally lacks the tax advantages a firm receives when it utilizes debt financing. Financing through securitization can be less risky than financing through debt if it is done through the use of an underwriter who is willing to certify the value of the firm’s new initiative by offering to assume any newly issued shares, (Eiteman, Stonehill, & Moffett, 2007).

Hybrid financing alternatives
Often firms utilize a hybrid method of equity and debt financing, often through the issuance of preferred shares, to obtain working capital for a project. Hybrid financing can be the best of both worlds as it can gain the tax advantages of debt financing and the payment advantages of equity financing; however, firms should proceed with caution as use of hybrid structures can be subject to limitations by the U.S. Treasury Department regulations. The Treasury Department utilizes five factors in determining debt to equity determinants of hybrid financing: 1. financing more closely resembles debt when there is a promise to pay on demand or on a specific date, 2. financing more closely resembles equity if it is subordinate to other debt, 3. financing more resembles equity if there is a high debt to equity ratio as most lender would not lend capital in this situation, 4. financing more closely resembles equity if it can be converted to common stock, and 5. financing more closely resembles equity when it is in proportional to the equity holdings of shareholders, (Chiang, Di, & Hanke, 2010). The Internal Revenue Service enforces these regulations through federal court actions, and additionally hybrid financing is also subject to the scrutiny of individual state courts. Recently there has been an extensive amount of litigation regarding hybrid financing by both federal and state courts, in either venue hybrid financing can be subjected to significant tax penalties. There are currently no specific quantifiable methods of determining the accuracy of utilizing this hybrid financing methods and state and federal courts often interpret and rule on hybrid financing strategies differently, as such, this method should probably be avoided when financing a initiative in an emerging market.

Conclusion
Often funding for Greenfield projects is nonrecourse or limited resource capital, meaning the cash flows from a Greenfield project are used to pay back the debt or equity that finances the project, with the initiatives assets used as collateral on the debt, (Lupoff, 2009). The single best alternative would be for a company to seek debt financing from a lender utilizing a nonrecourse or limited recourse capital structure for the Greenfield initiative as it is a less expensive form of financing and would impose substantially less risks upon the shareholders.







References:
CEE: Q3 growth – H1 trough plays out…mostly. (2009, November 23). Emerging Markets Monitor, 15(32), 14. Retrieved from EBSCOhost Business Source Premier.

Chiang, W., Di, H., Hanke, S. (2010, June). Debt or equity financing? Analyzing relevant factors. The Tax Adviser, 41(6), 412-418. Retrieved from ProQuest Accounting and Tax Periodicals database.

Eiteman, D., Stonehill, A., & Moffett, M., (2007). Business Finance for the Multinational Corporation. Upper Saddle River, NJ: Pearson/ Prentice Hall.

Lupoff, J. (2009, September). Top 10 things lenders look for when considering Greenfield industrial project finance. The Secured Lender, 65(6), 38-40. Retrieved from ProQuest Accounting and Tax Periodicals database.

Platt, G. (2010, February). Risk gets rewarded, but not too much risk. Global Finance, 24(2), 16. Retrieved from EBSCOhost Business Source Complete

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Intellectual Property Appraisal

Since patent ownership was first authorized in England by the Statute of Monopolies in 1624, a law which allowed English monarchs to bestow patents preferentially for fiscal reasons, the history of intellectual property ownership and valuation has been contentious, characterized by two competing arguments concerning legitimate ownership; one side favoring private rights and the other side favoring public rights, (Sell & May, 2001). Considering the contested nature of its history, issues dealing with the economies of intellectual property, IP, today reflect much the same attitudes as they did at that time, and with each new hurdle new legislative settlements arise. Sell and May go on to maintain that the struggle between private appropriation forces and dissemination forces including healthcare advocacy groups, consumer groups, scientists, activists, and librarians, all of whom fear privatization of knowledge. Alternatively, IP rights are predicated upon the ideal that accomplishments of the human mind should be rewarded and protected; as such appropriate value needs to be attributed to these accomplishments through the use of financial valuation methods. IP issues cover protection and identification of ownership of the creations of the human mind and are the essential core of many business enterprises, (Friedman, 2004). In addition to business acumen, IP protection primarily covers: 1. patents, typically technological inventions, 2. trademarks, terms or graphics that identify common origin, and 3. copyrights, works of textual or artistic authorship, (Friedman).

Today we recognize that IP has much in common with other forms of property in that it can be traded, licensed, or bought and sold, in much the same way as we deal with forms of tangible property. Although IP is intangible, it is valuable property and as such it must be protected. In order to protect IP, a discernable value must be attached to it through valuation methods. Recognizing that the demand for valuation services had significantly increased and that valuation services were inconsistent, the American Institute of Certified Public Accountants, AICPA, established a committee that began a development process to standardize valuation services in 2001. This committee released the Statement on Standards for Valuation Services No. 1, effective for engagements accepted on or after January 1st 2008, and applies to all AICPA members, regardless of discipline, who perform valuation services for accounting, taxation, financial planning, financing, litigation, and business transactions, (Fact Sheet, n.d.).

The AICPA was not the first organization to attempt to standardize valuation services; other organizations including the Institute of Business Appraisers, the International Society of Appraisers, the American Society of Appraisers, and the National Association of Certified Valuation Appraisers, (Gold, 2007). Gold goes on to note that several of these organizations are amending their standards in order to comply both with the AICPA and also recently released IRS regulations which provide clearer definitions of fair market value and qualified appraisers and appraisals, (2007). Although cost methods, market value methods, and income methods, or a combination of two or more of these three methods, are the current preferred and most common methods of valuing intellectual property, more reliable means of IP valuation are evolving as recognition of the intrinsic value of intangible assets increases throughout the business world. Acceptance by lenders of IP as collateral for bank loans and also by insurers willing to insure IP assets against loss have resulted in appraisal methods by these institutions that can bridge the gap between financial reporting and market value, and this method is becoming more and more common, (Foster, Fletcher, & Stout, 2003). The fact that lenders are willing to collateralize and insurers are willing to insure the risk of IP contingent upon appraisal, is external evidence of the value of appraisal to investors and creditors.

References:
Fact Sheet. (n.d.). AICPA Statement on Standards for Valuation Services No. 1, Retrieved from http://www.aicpa.org/InterestAreas/ForensicAndValuation/Resources/Standards/AICPAValuationStandardandImplementationToolkit/Pages/default.aspx

Foster, B., Fletcher, R. & Stout, W. (2003, October). Valuing intangible assets. The CPA Journal, 73(10), 50-54. Retrieve from ProQuest Accounting and Tax Database.

Friedman, B. (2004, Winter). Brief overview of intellectual property issues. Pennsylvania CPA Journal, 74(4), 30-32. Retrieved from ProQuest Accounting and Tax Periodicals.

Gold, L. (2007, June 4-17). Putting a value on valuation. Accounting Today, 21(10), 1-3. Retrieved from ProQuest Accounting and Tax Periodicals.

Sell, S. & May, C. (2001, Autumn). Moments in law: contestation and settlement in the history of intellectual property. Review of International Political Economy, 8(3), 467-500. Retrieved from EBSCOHost Business Source Complete.

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Sustainable electronic serials collection

Following is an evaluation of a sustainable electronic serials collections project that I undertook to free a suitable amount of extra space in the library for student study areas. The following evaluation utilizes a six step “rational decision making process” defined by Bazerman & Moore (2009, pp. 2-3).

1.Define the Problem: The library has invested moderately in electronic collections yet we had never considered a weeding process of our serials print collection to correspond with this investment. This is not altogether surprising considering the understandable reluctance of an academic library to discard print materials. However, the space challenges presented by the limited current study areas are forcing students to sit on the floor in study groups. The serials collection is currently held in two separate shelving areas on two different floors, the substantial portion on the second floor while about one third of the collection is on the first floor. We need to reallocate the space on the first floor for student study areas. In order to combine the serials into one area we need to discard an appropriate amount of print serials already available electronically and purchase new serials databases that will allow us to discard additional print serials. Additionally, the university community needs to be assured that we are investing in sustainable electronic materials in order for this to be done successfully. Approximately 50,000 linear inches of available space will be needed in order to accommodate the remaining first floor serials collection into the second floor serials shelving area after the collection is weeded. A commitment from the university to support these collections financially would be needed or they would not be sustainable by the library.

2.Identify the Criteria: First the requirements of the university needed to be reviewed. Psychology, Business, Chemistry & Physics, and Biology & Environmental Sciences were at the forefront of departments that had invested heavily in electronic collections. In addition to these disciplines, Health Sciences and Education could benefit substantially from a 24 hour electronic library as those programs had students in multiple locations with substantial online enrollment as well. Intentionally left out of the project were some departments where electronic access to materials was not optimal, studio arts and music & theater were most notable. A local holding report of the print collection was generated. Identified and separated out were those journals belonging to Health Sciences, Psychology, Education, Business, Chemistry & Physics, and Biology & Environmental Sciences. Titles that took up less than 72 inches of shelf space were not priced or included unless they were part of database packages we were considering purchasing or had already purchased, (these smaller print runs are available on a list for possible future reductions). Additionally, print collections that are provided by a for-profit publisher or aggregator were not included as these collections are static and therefore less sustainable. This left not-for-profit aggregators like ITHAKA/JSTOR and Project Muse along with professional associations and organizations.

3.Weigh the Criteria: Reasonably assured continuing access, or sustainability, to online editions of the print publications that are discarded is of the utmost importance. As not-for-profits tend to assure access to their membership they are less static than publisher collections, (that can be sold and resold to other publishers or access discontinued), or for-profit aggregator collections, (where publications are sometimes dropped from platforms due to pricing or licensing agreements). Therefore sustainability is allotted 50%. Although space recovery and cost are somewhat equivalent in consideration, the overall concept of the project is to recover space so I have placed this slightly higher, at 30%, than cost, which I have given 20%. This is also partially due to the fact that additional costs will be mitigated by cancelling corresponding print subscriptions.

4.Generate Alternatives: in addition to discarding duplicative not-for-profit serials, duplicative for-profit serials from aggregators or publishers could be discarded if necessary. Any additional linear inches of for-profit print publications could be purchased electronically and the corresponding print could be discarded. Any combination of the following would be adequate to support the space needs by the library:
a. Not-for-profit print collections in the aforementioned disciplines that overlapped previously purchased electronic collections, (25,000 linear inches).
b. Purchasing identified association back-files and JSTOR files, (any needed amount)
c. Collections already purchased from for-profit publishers and aggregators , (10,000 linear inches)
d. Additional back files from for-profit publishers, (any needed amount)

5.Rate each alternative on each criterion: Collections were given a positive, (Yes), Sustainability rating if they were not considered static and if the library could be reasonably assured of continued access. Collections were given a positive, (Yes), Space rating if ample space to shift the collection could be generated. Already owned collections were both give a negative, (No), Space rating as not enough space would be recovered through discarding the corresponding print of available online collections. Collections were given a positive, (Yes), rating if no additional costs would be incurred.

6.Compute the Optimal Decision:










The optimal decision according to the evaluation of the criteria is that the library purchase additional not-for-profit collections from individual associations, from JSTOR, and from Project Muse. This optimal decision, while both sustainable and space conscious, does not account for the added cost incurred and could potentially be refused by the university as cost prohibitive.

The weakness in this model, primarily due to space considerations, is that there is no single optimal decision for this undertaking, a combination of two or more approaches must be taken. Discarding already owned duplicative print titles, from both the not-for-profits and the for-profits, will not recover enough space for the relocation of the collection. Additionally, purchasing all new collections, (even if they are all collections from not-for profits), with no regard for what is already on the shelves wouldn’t be prudent and may in fact be cost prohibitive as the library is dependent upon additional funding from the university for this endeavor.

The purpose of following this model was to evaluate the different courses of action possible, and choose a feasible course of action, that was suitable and appropriate for both the library and the university. The model allowed for me to logically examine my heuristics, arrive at a more thoughtful conclusion that discounted my emotional reactions to the options, and to come up with a solution that was ultimately fair after observing the limited study areas in the library. Upon further examining my decision I have identified the biases in my decision making process. Following is an examination on the biases that I perceived in my project concerning replacing print journals with electronic journal collections to make available additional student study space in the library.

The primary bias I had to deal with in this decision had to do with my previous experience working with not-for-profit publishers and for-profit publishers in a corporate setting. My observations for this project were related to my previous position and were still relatively fresh in my mind. To avoid the “ease of recall” bias that Bazerman and Moore identify as an “availability heuristic”, (2009, p.18), based upon my recent previous observations I investigated the current state of journal retention in both for-profit and not-for profit databases. Initially, I checked our holdings report against the back-files supplied by the individual association databases we are looking at and was satisfied that they are inclusive of the print holdings we are seeking to discard. Additionally, to ensure that I wasn’t predisposed to ruling out an alternative that may have had greater success in an academic environment, I checked the content reports of the for-profit aggregators of databases that we currently own to see if my previous conclusions were still valid. I discovered upon this examination that a lot of annual activity on their additions/deletions lists still exists. I then contacted the not-for-profit aggregators from databases that we currently own, as the project hinges upon adding more libraries to these databases, to find their additions and deletions. Correspondence from this aggregator revealed that since inception only one active title no longer participates in their collections. This additional effort to examine my previous disposition allows me to comfortably argue that the not-for-profit databases I am seeking to include are much less static than the for-profit databases and are therefore more sustainable for our needs and more suitable for the library.

While researching this bias I uncovered another potential source of bias and that was my overconfidence. Overconfidence is described by Bezerman and Moore as a bias emanating from the “confirmation heuristic”, where one recollects “confirming rather than disconfirming evidence” or “supportive rather than contradictory evidence”, (p. 37). After working with electronic collections for a prolonged period of time in a corporate environment I hadn’t considered the idea that some of the academic departments, despite their investment in virtual libraries, may object to seeing the print collections related to their disciplines discarded. Additional training may also be required for some researchers. Diane Nelson points out that the “lack of knowledge about how to use” e-journals and the “lack of awareness” about what is available are the two major obstacles to implementing e-journal collections in libraries, (2001, p. 207). Further investigation will be needed to ensure that this learning curve is not still applicable with faculty in these departments. Although we have carefully chosen the collections, and the university administration is willing to fund this project, heretofore I have not accounted for possible reluctance from the faculty, or the student body, to support this project. An overwhelming resistance to discarding the print material, no matter how carefully the material has been chosen, and how great the benefits would be could substantially thwart this endeavor.

My suggestion would be to look into the expense of off-site storage facilities for the serials, explain to the departments that this is not a charge we are willing or able to absorb, and offer them the opportunity of either fund the storage themselves or integrate the collections into available space in their buildings.

These two biases, “ease of recall” and “overconfidence”, were rooted in my desire to make a decision quickly so that we could begin the inception of the project within this fiscal year and qualify for additional available funding. As this project was not “shovel ready”, in order to qualify for the available funding needed, I completed the project as expeditiously as possible, sacrificing a complete examination of these underlying motives. Upon further reflection regarding biases I identified a significant process step that had been previously overlooked. Going forward with this project, I feel that it would be advisable to lobby our liaisons in the various affected departments for support at this time to evaluate if discarding the duplicative not-for profit collections and purchasing additional not-for-profit collections is the best viable alternative for a sustainable e-serials collection.

References:

Bazerman, M. H., & Moore, D. A. (2009). Judgment in Managerial Decision Making (7th ed.). Hoboken, NJ: Wiley and Sons.

Nelson, D. (2001). The Uptake of electronic journals by academics in the UK, their attitudes towards them and their potential impact on scholarly communication. Information Services and Use, 21, 205-214. Retrieved from Business Source Complete.

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Tracking FDI

Multinational Enterprises seeking to understand how globalization affects their business need foreign direct investment, (FDI), information in order to gauge an economy’s suitability for expansion of their own enterprises, to find out how and where their competitors are investing in foreign markets, and to monitor how globalization may be affecting their clients.

According to UNCTAD, the United Nations Conference on Trade and Development, the most important feature of FDI is to gain equity ownership in order to influence the management of a foreign enterprise, (although countries vary, usually 10% is considered an effective voice), and this feature distinguishes an FDI investment from simple foreign portfolio investment, (FDI Statistics, n.d.). Since gaining a lasting interest in a foreign economy is the ultimate goal, only investments by direct investor related enterprises that gain equity ownership are classified as FDI and are tracked.

Capital generated in industrialized countries and redistributed through FDI to less developed and emerging markets is tracked by a variety of different organizations in addition to UNCTAD; other notable agencies include the World Bank and the Organization for Economic Cooperation and Development, (OECD). Additionally, it is important for individual government agencies like the U.S. Department of Commerce to track this information to ensure that their incentives for attracting FDI are successful.

UNCTAD tracks transnational corporate investment statistics of inward flows of stocks and capital as well as outward FDI flows, or disinvestments, through the International Transactions Reporting System, ITRS, and supplements the data through annual country surveys, (Methods of Data Collection, n.d.). UNCTAD reports on these statistics in the World Investment Report, the World Investment Prospects Survey, the Manual on FDI Statistics, and Balance of Payments Statistics Reports, and a variety of other statistical reports and databases. The recently released World Investment Report reported that FDI inflows increased globally to $1.2 trillion in the first half of 2010, after a 16% decline in 2008 and a 37% decrease in 2009, where it bottomed out at $1,114 billion, (Zahn, 2010).

At the World Bank Group and their member organizations, the Development Data Group collects FDI statistics from the statistical systems of member countries and publishes the data in a variety of electronic and print resources, most notably the publications World Development Indicators, the World Development Report, the World Bank Annual Report, Global Development Finance, and Global Economic Prospects. The World Bank reports in Global Economic Prospects that FDI capital inflow to developing countries have increased in 2010 to $589.5 billion from a low in 2009 of $454 billion, (International Bank for Reconstruction and Development, 2010).

Like the World Bank the OECD collects FDI data from member organizations and publishers the statistics in an online database and through a series of publications including the OECD Factbook, the OECD Economic Outlook, OECD Economic Surveys, and other publications. The OECD also recently reported that 2010 FDI year-to-date data from its 22 participating countries indicates that inflows have more than doubled from the same time period in 2009, outflows have increased by 40%, and that M&A investment is expected to increase by 20% this year, (Gestrin, 2010).

Agencies such as the UN, the World Bank and the OECD determine the development status of a country generally through measurement and comparison of economic indicators such as GDP or GNI. These agencies track and report on FDI inflows and outflows annually and more frequently, and indicate that capital generated in developed nations is reinvested and also disinvested in developing nations, primarily through mergers and acquisitions, but also by becoming shareholders or stakeholders. Additionally, to promote the usefulness of the data the collected these and additional agencies present their statistics in freely accessible online databases.



References:

FDI Statistics Definitions and Sources. (n.d.). Retrieved from http://www.unctad.org/Templates/Page.asp?intItemID=3144&lang=1



Gestrin, M. (2010, June). International investment freefall comes to an end. OECD Investment News, 13, 1-3. Retrieved from http://www.oecd.org/dataoecd/32/37/45562632.pdf



International Bank for Reconstruction and Development. (2010, Summer). Global Economic Prospects: Fiscal Headwinds and Recovery: Main Analysis. Washington, DC: The World Bank. Retrieved from http://siteresources.worldbank.org/INTGEP2010/Resources/GEPSummer2010MainReport.pdf



Methods of Data Collection and National Policies on Treatment of FDI Information. (n.d.). Retrieved from http://www.unctad.org/Templates/Page.asp?intItemID=3157&lang=1



Zahn, J. (2010, July 22). World Investment Report 2010: investing in a low carbon economy. (20th ed.). New York: United Nations Conference on Trade and Development. Retrieved from http://www.unctad.org/en/docs/wir2010_en.pdf

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Greenfield Initiative: Bulgaria vs. Panama

As opposed to an acquisition, a Greenfield initiative requires a different set of parameters when selecting a country for expansion. Companies use a different set of priorities when establishing wholly owned subsidiaries through Greenfield initiatives as these initiatives are much riskier than direct acquisitions. Advantages of building a Greenfield site include establishing local goodwill by creating jobs, premises designed specifically to your operation's activities taking advantage of the newest technologies, a greater choice of locations, and sales will likely increase in this area. If a company embarks on a Greenfield initiative early in an areas development, then the company will enjoy a lack of competition however there is more risk involved. These risks include building and site opening delays, cost overruns in developing the site, and difficulties in estimating what expected sales will be in the new region.
Neto, Brandao, and Cerqueira identified certain country characteristics as being more favorable to foreign direct investment, (FDI), Greenfield initiatives than merger and acquisition initiatives, (M&A): notably that Greenfield initiatives increase as uncertainty avoidance and cultural distances increase, while as uncertainty avoidance and cultural differences decrease as traditional M&A activities increase, (2010). It is more appealing for a company to acquire another company when they know the cultures are similar and the society will tolerate the company’s management, even though there are still inherent risks involved with a Greenfield initiatives those risks are more tolerable and it is more appealing to build a company from the ground up when cultural differences are more noteworthy and there may be less tolerance for a company’s management. Additionally, Neto et al note that while economic growth potential is an important factor in attracting FDI Greenfields, it is not a factor in attracting FDI M&A activity; alternatively while investor protection is important for both M&A inflows and outflows, it is not as important for Greenfield initiatives, (2010). Most importantly, Neto et al note that variables such as a country’s governance, openness, economic size, literacy, life expectancy, and per capita wealth, have no effect on whether a company chooses either an acquisition or a Greenfield initiative, (2010). Clearly when a company chooses to embark on an FDI Greenfield initiative they are aware of the risks involved, and rather than seeking to expand market share, they are more importantly seeking to create and control new markets.
When reviewing different FDI Greenfield initiatives, although risks are planned, protecting stakeholder values is still important and the inherent risks of doing business in some foreign countries are more tolerable than others. In a ranking of 133 economies Panama was rated in a 2009-2010 as number 59 and Bulgaria as number 76 by the World Economic Forum Index, (Blanke, Geiger, Browne, Mia, Hanouz, & Sala-I-Martin, 2009). Both counties occupied a similar ranking on the 2008-2009 Index, with Panama moving down one place one the index and Bulgaria staying the same indicating a certain amount of stability despite the global economic crisis of the past year, (Blanke et al, 2009). At number 76 Bulgaria is the lowest rated member of the European Union in the World Economic Forum Index. Bulgaria’s currency is pegged to the euro while Panama uses the U.S. Dollar.
Both Bulgaria and Panama are listed by the United Nations Development Program as developing countries with high human development, indicating that people living in these nations have similar literacy rates, education levels, life expectancies, and standards of living, (UNDP, 2009). Notably, Panama is rated as number 60 on the list and Bulgaria as number 61 on the list of 182 countries. In each country the literacy rate is nearing 100%, the life expectancy rates and education enrollment rates are similar, and at $11,391.00 and $11,222.00, the GDP per capita of each country is nearly identical, (UNDP, 2009). According to the CIA World Factbook, the unemployment rate increased in Bulgaria in 2009 from 6.3% to 9.1%, and is therefore now substantially higher than Panama’s 7%, however, with over 7 million people Bulgaria has more than twice the population than Panama with less than 3.5 million, and while 28.6% of Panama live in poverty only 14% of Bulgarians live below the poverty level, (2010). Additionally the CIA World Factbook notes that the GDP composition by sector of each nation are similar, with Panama’s economy comprised of 5.9% agriculture, 17.2% industrial, and 76.8% services, and Bulgaria’s comprised of 7.5% agriculture, 27.6% industrial and 64.9% services, (2010).
While most of the preceding information indicates a great deal of parity between doing business in Panama and doing business in Bulgaria, the World Bank however ranks the ease of doing business in Bulgaria as 44th out of 183 countries, while Panama ranks 77th. The most noticeable disparities are employing workers in Panama ranked at 177th on the list, while employing workers in Bulgaria is ranked as 53rd, while in trading across borders in Panama ranks 10th place and Bulgaria ranks 106th, (2010). The World Bank gives Panama a score of 78 out of 100 on difficulty in hiring workers while Bulgaria receives a score of 17. The World Bank gives Panama substantially poorer scores on rigidity of hours, difficulty and costs of redundancy, and rigidity of employment. Clearly managing workers in a particularly rigid employment environment would be more difficult for a Greenfield initiative and legislatively is indicative of a more developed economy. Although the World Bank notes that it is substantially easier, more timely, and less costly to trade across borders when either importing and exporting from Panama than from Bulgaria, as noted previously this activity is more conducive to an M&A initiative than to a Greenfield initiative. The World Bank data notes that although starting a business is easier in Panama than Bulgaria, (scoring Panama a 27 out of 100 and Bulgaria a 50 out of 100), paying taxes and protecting investors are substantially more difficult while enforcing contracts, registering property, and getting credit are moderately more difficult in Panama. These factors are again more indicative of a country that is conducive to M&A activity rather than Greenfield development.

Bulgaria’s recent inception into NATO in 2004 and its recent accession to the European Union in 2007 has promoted rapid economic development in industrial areas that has abated only slightly over the last year in light of the global economic recession. Bulgaria attracted $4,467 million in FDI flows in 2009, down from $9,795 million in 2008 and a high of $12,388 million in 2007, (due to a slowing down in M&A activities). Meanwhile 2009 recorded a record high of inward FDI stocks, indicating that although investment flow is slowing down it is still an attractive and stable, although not a wholly new, economic investment environment, (UNCTAD, 2010). As such, Bulgaria is a better opportunity for a Greenfield investment initiative than Panama.











References:
Blanke, J., Geiger, T., Browne, C., Mia, I., Hanouz, M., & Sala-I-Martin, X. (2009). World Economic Forum: Global Competitiveness Report 2009-2010 (30th ed.). Retrieved from http://gcr.weforum.org/gcr09/

Bulgaria. (2010, June 24). In U.S. Central Intelligence Agency World Factbook [online]. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/bu.html

Panama. (2010, June 24). In U.S. Central Intelligence Agency World Factbook [online]. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/pm.html

Neto, P., Brandao, A., & Cerqueira, A., (2010, June). The macroeconomic determinants of cross-border mergers and acquisitions and Greenfield investments. IUP Journal of Business Strategy, 7 (1/2), 21-57. Retrieved from ProQuest ABI/INFORM Complete.

United Nations Conference on Trade and Development. (2010). World Investment Report 2010 Country Fact Sheet: Bulgaria. Retrieved from http://www.unctad.org/sections/dite_dir/docs/wir10_fs_bg_en.pdf

United Nations Development Program. (2009). Human Development Report. Retrieved from http://hdr.undp.org/en/statistics/

World Bank Group. (2010). Doing Business: Measuring Business Regulations Economy Rankings. Retrieved from http://www.doingbusiness.org/economyrankings/

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Advantage of an M&A initiative within the Eurozone

The European Union or EU, as we know it today, was formed through a series of treaties specifically designed to protect the businesses, economies, and citizens of its Member States. Although the Treaty of the European Union was not signed until 1992, the first of the series of treaties leading up to its formation, the Treaty Establishing the European Coal and Steel Community, (ECSC), and was signed in 1951. These treaties are agreed upon democratically and voluntarily and updated as countries accede and as European society develops, (Europa, n.d.). Criteria to become an EU Member State are stringent, as such currently only 27 of approximately 50 European countries are members; of these only 16 countries comprise the “euro zone”, those countries which are able to operate utilizing a single monetary unit called the “euro”.

As such, protectionist policies and trade barriers can exist between the 27 countries that form the EU today and the U.S. An example of such a protectionist policy was the 1993 EU implementation of a trade limitation of imports of fruit from Latin America in preference of imports of fruit from their former colonies in Africa, the Caribbean, and the Pacific, (the ACP). Prior to the import limitation Chiquita Brands International controlled almost 30 percent of the market for fresh fruit in the EU. In 1995 when the World Trade Organization ruled the policy was discriminatory Chiquita had already lost 1/3 of the market. Dole Food Company, already the largest producer of fresh fruits, had previously established relationships with many of these former colonies and as a result gained 4% of Chiquita’s lost market share during this two year period: to date Chiquita’s European market is still in decline due to the continued resistance of EU Member States to accept the ruling, (Bucheli, 2007). Noticeably, this is an example of how the European social climate can affect EU policies and can be a disadvantage to foreign companies operating within the Member States that do not share or have divergent social concerns.

Although the barriers to doing business in the EU are generally low and the member nations are stable politically, U.S. exporters do continually face difficulties to entry in EU markets, specifically regulatory and technical standards if U.S. standards are different, (U.S. Commercial Service, 2008). Similarly, an advantage of the acquisition of a firm within the EU can be access to a relatively large, secure, and stable economic market through a firm that is already knowledgeable regarding EU standards. Additionally the free flow of goods throughout the 27 Member States can be beneficial if a firm is in compliance with EU standards.

Acquiring a company within the EU can be a difficult and laborious task for an American firm as that firm needs to comply not only with EU regulations and directives, but also the laws of the individual Member State. The market opportunities, however, clearly outweigh the market challenges once the acquisition is complete when considering the portability of capital between EU Member States, even those that do not utilize the euro. Although each Member State currently maintains separate customs policies, and other Member State laws still apply, the EU Treaty places virtually no restrictions of capital movements and payments between the Member States and there are few restrictions between the Member States and third countries like the U.S., (U.S. Commercial Service, 2008). A country that is not an EU Member State would not necessarily allow this unrestricted movement of capital throughout Europe and to third countries.

Another significant advantage to selecting a company that utilizes the euro is that business transaction costs are minimized, questions regarding the stability of the currency are mitigated, and transparent pricing is assured among the 16 euro zone countries, (Eiteman, Stonehill, & Moffett, 2007, p.47). Although barriers to openness still exist between the euro zone countries and the other Member States of the EU, adoption of EU standards still greatly facilitates trade among these countries. Due to these overwhelming advantages, doubtlessly the acquisition of company that is headquartered within the EU and already uses the euro is adept in EU standards. As such, all other criteria aside, acquisition of a company headquartered within the EU and uses the euro would be preferable to the acquisition of a company that is not headquartered in an EU Member State and does not use the euro.



References:

Bucheli, M. (2005, November). Banana war maneuvers. Harvard Business Review, 83(11), 22-24. Retrieved from EBSCOhost Business Source Complete.

Eiteman, D., Stonehill, A., & Moffett, M., (2007). Business Finance for the Multinational Corporation. Upper Saddle River, NJ: Pearson/ Prentice Hall.

Europa, The EU at a Glance: Treaties and Law. (n.d.). Retrieved from http://europa.eu/abc/treaties/index_en.htm

U.S. Commercial Service. (2008, February 14). Doing Business in the European Union: 2008 Country Commercial Guide for U.S. Companies. Retrieved from http://www.buyusa.gov/europeanunion/doing_business.html

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Leadership Influence Processes and Factors that Affect Them

Abstract
The importance of commitment, as opposed to compliance or resistance, when leadership attempts to utilize influence processes. Compliance tactics that appeal to workers logically, emotionally, and cooperatively are examined that can assist leaders in focusing their influence processes. Specific influence processes utilized by Andrea Jung, Indra Nooyi, and Brenda Barnes are compared.

Introduction
Although there are many different styles of effective leadership, all leaders must be able to exert influence over their employees in order to achieve results. Employees can exhibit a variety of reactions to the attempts of leadership to influence them, from resistance or compliance, to commitment. Employees must be committed to leadership that they find credible, otherwise influence methods leaders utilize are ineffective.
Influence Processes and Factors that Affect Them
In order for leaders in an organization to achieve desirable results they must be able utilize their power effectively and they must be able to influence their followers. The three most common reactions to a leaders attempt to exercise their power or authority over their subordinates are; resistance, when employees actively or passively resist the leader’s authority and take action to subvert their requests, compliance, when employees accept the leadership’s authority and requests but do so without personal acceptance, or commitment, when employees not only accept leadership’s authority but also welcome their requests willingly, (Nahavandi, pp. 160-161).
Resistance is, of course, the least desirable reaction and it occurs when subordinates either directly oppose or secretly resist leadership’s requests and attempt to sabotage the outcomes, (Baldwin & Grayson, 2004). Kouzes and Posner state that leadership can overcome this reaction by decreasing resistance through “small wins”, a consistent and incremental process where demonstrated success is achieved, as employees will innately want to be associated with future successes, (p. 211). Baldwin and Grayson describe compliance as a less than ideal reaction in that although subordinates might implement leadership’s requests, they do so as a result of the acceptance of positional authority and without any real acceptance of the leader’s reasons. Compliance occurs when extrinsic motivation exists through external rewards rather than intrinsic motivation through an employee’s internal desires to accomplish, (Kouzes & Posner, p. 112). Compliance may be satisfactory initially when attempting to influence routine actions however it does not result in a change in employee attitudes concerning the authority of the leadership, and it is therefore an unsuitable reaction for the leader who wants to accomplish significant achievements. Commitment, the only truly desirable reaction, is vital and results when leaders influence employees towards self-motivation. Leaders inspire commitment from their employees and can change attitudes only when employees find leadership credible, (Kouzes & Posner, p. 34). Commitment occurs only when employees accept the influence, and therefore the authority, of a leader they deem credible and then follow through and endorse and support that person’s leadership. Baldwin and Grayson maintain that when a leader gains commitment from their employees there is less need to monitor them, there is a greater sustained effort from them, the leaders objectives are endorsed, and working relationships improve, (2004).
Baldwin and Grayson further outline three specific tactical skills that leaders can utilize to be successful through understanding the personalities, objectives, and roles and responsibilities within an organization: 1. appeal to employees logically through rational and intellect, 2. appeal to employees emotionally through promoting feelings and belonging, or 3. appeal to employees cooperatively through reciprocity and mutual goal setting, (2004). Leaders should utilize a combination of those tactical skills that they are most comfortable with to gain their employees commitment in order to achieve organizational success through influence processes that reflect their own personal style and values. Without the commitment of their subordinates an upper echelon leader has little chance of affecting an organization and implementing changes.
Comparison of Leadership Styles and Influence Methods
Andrea Jung of Avon, Indra Nooyi of PepsiCo, and Brenda Barnes or Sara Lee are similar in that they are all authentic and charismatic leaders with high LMX who are working to transform their organizations, though there are some subtle differences in the ways they lead their companies. As general strategic guidelines, Nahavandi outlines the following processes leaders can utilize to impact their organizations: direct decisions, allocation of resources, reward system, selection of other leaders, promotions, and role modeling, (2009, Figure 7-4). Upper echelon leaders can make direct decisions that affect organizational structure and strategy. Specifically, when Andrea Jung took over as CEO of Avon she reduced senior staff by 25%, (Ding dong, 2009), Additionally she has removed eight levels of management in her tenure and reduced staffing costs by $300m, (Georgia, 2007). An example of an upper echelon leader making a direct decision that affected an organizational strategy would be Brenda Barnes’ decision to divest of Sara Lee’s non-food based businesses to improve economic performance, (Sterrett, 2009). Indra Nooyi similarly chose to divest PepsiCo of their fast food restaurant market operations and also made significant business acquisitions furthering their investment in the bottled beverage market, (Useem, 2008). Although direct decisions need not only affect organizational strategy and hierarchy, these types of decisions are almost exclusively the domain of upper echelon leadership. Allocation of resources is another area which typically defines the role of upper level leadership. When Brenda Barnes, who is noted to be a strong marketer, first stepped into the role of CEO she allocated an additional $250m towards R&D and marketing, an increase of 35%, in order to grow annual sales between 2% and 4%, (Jargon, 2005). Barnes subsequently reduced Sara Lees’ 2009 fiscal year marketing budget by 21% to expand profit margins, after she had increased it by 4.9% in the 2008 fiscal year, (Sterrett, 2008). Nahavandi credits Andrea Jung’s allocation of resources into research and development as partly responsible for an increase in Avon’s sales by 45% in 2004 that resulted in a 164% increase in stock prices, (p. 223). Additionally Jung considers the current recession a growth opportunity for the company and announced in March of 2009 they would be spending $400m in advertising in the coming year to promote Avon as a career potential for recently out of work women, the largest hiring initiative in the firm’s history, (Ding dong, 2009). Indra Nooyi influences through the allocation of resources as well, redirecting about 1/3 of Pepsi’s marketing dollars this year towards social media and digital promotions that included her “ReFresh Project” campaign, a $20m grant program seeking to award community building projects, (Zmuda, 2010). Nooyi takes her community building seriously as she describes talent sustainability at PepsiCo a force for doing good in the world by providing employees with the training, tools, and opportunities for their development; going on to describe the firm as a “meritocracy”, where hard work is recognized and rewarded, (Bingham & Galagan, 2008). Big rewards have always been a staple for top sellers in consumer direct sales organizations and this is not exception at Avon. Jung rewards her “top sellers” by sending them on extravagant summer holidays to places like Cyprus, Madeira, and Tenerife, (Hill, 2003). At Sara Lee, a company with a history of disjointed business endeavors, Brenda Barnes has relegated the idea of a developing a unified system to tie employee performance to a reward system and training to Stephen Cerrone, a newly hired executive vice president of human resources, (Sterrett, 2007). In addition to the direct hire of Cerrone, Barnes is noted for shaking up leadership having spent the previous years at Sara Lee pulling apart the existing corporate culture, (Sterrett, 2007). Furthermore Barnes had already worked to make diversity a key to bonus awards, (Burns, 2007). The other leaders maintain tight control over the selection and promotion of new leaders within their organizations. Indra Nooyi has been the subject of much criticism over the way that she micromanages marketing leadership at PepsiCo, the company has countered that although many executives have left due to her involvement, many have been brought in as well, and the situation in marketing mirrors what is going on throughout the firm, (Zmuda & York, 2009). Andrea Jung states that it is the responsibility of CEOs to increase the representation of women and minority leaders in business, noting that Avon has more women leaders than any other Fortune 500 company, with six of her thirteen top level executives and five of her eleven board members now women under her leadership, when previously they were all men, (Reilly, 2009). Jung has gone so far in modeling Avon as to change the company’s motto to “The Company for Women”, she is driven by vision to elevate other women in the economic community and a passion to make a difference in the lives of women by enabling them to become self-empowered. So too has Nooyi remodeled PepsiCo into her vision of corporate diversity including speaking engagements, developing programs to help women manage their careers, and sponsoring events to showcase the company’s diversity, (Nahavandi, pp. 64-65). Barnes, who notably left PepsiCo in 1997 to spend more time with her family, as well has modeled her role as working mother and executive actively promoting work-life balance issues at Sara Lee and promoting the value of family by re-launching the firm’s “women’s network “, (Burns, 2007).

Conclusion
Because their employees are committed to them and find their leadership credible these leaders can successfully utilize these influence methods. By virtue of the charisma and authenticity, they have inspired their workers to share in their personal visions and mission and commit to the success of these organizations. All three leaders, Andrea Jung, Indra Nooyi, and Brenda Barnes are successful due to the fact that have inspired employees to commit to the changes that they want to achieve in their respective firms.

References
Baldwin, D. & Grayson, C. (2004, March/April). Positive influence: how leaders get others to see it their way. Leadership in Action, 24(1), 8-11. Retrieved from EBSCOHost Business Source Complete.

Bingham, T. & Galagan, P. (2008, June). Doing good while doing well. T+D, 62(6), 32-35. Retrieved from ProQuest ABI/INFORM Complete.

Burns, G. (2007, October 14). Tribune profile: Nobody's business but her own. Knight Ridder Tribune Business News. Retrieved from ProQuest ABI/INFORM Complete.

George, B. (2007, November 12). A new makeover for an old retail face. U.S. News and World Report, 68. Retrieved from Lexis/Nexis Academic.

Hill, A. (2003, June 15). Avon calling. The Observer Magazine, 25. Retrieved from Lexis/Nexis Academic.

Jargon, J. (2005, July 25). Sara Lee boosts R&D, ad budgets-a bit. Crain’s Chicago Business, News 2. Retrieved from Lexis/Nexis Academic.
Kouzes, J. M. & Posner, B.Z. (2003). The leadership challenge (3rd ed). San Francisco, CA: Josses-Bass.

Nahavandi, A. (2009). The art and science of leadership (5th ed.). Upper Saddle River, NJ: Prentice-Hall.

Reilly, N. (2009, November 2). The foundation for a new prosperity; the CEO of Avon on unleashing the economic potential of women worldwide. Newsweek, 154(18), B6-B7. Retrieved from ProQuest ABI/Inform Complete.

Sterrett, D. (2007, August 13). Putting Sara Lee back together; can Barnes, deputy unite jumbled units to run 'like a normal company'? Crain’s Chicago Business, 30(33), 1-9. Retrieved from EBSCOHost Master File Premier.

Sterrett, D. (2008, September 1). Barnes puts clamps on ad spending; Sara Lee chief targets marketing, focusing dollars on key brands. Crain’s Chicago Business, 31(35), 3-11. Retrieved from EBSCOHost Master File Premier.

Sterrett, D. (2009, September 28). Sara Lee lags, but Barnes lingers. Crain’s Chicago Business, 32(39), 3-8. Retrieved from EBSCOHost Master File Premier.

Ding dong! empowerment calling; face value. (2009, May 30). The Economist, 391(8633), 70. Retrieved from ProQuest ABI/INFORM Complete.

Useem, M. (2008, December 1). New ideas for this Pepsi generation. U.S. News & World Report, 145(12), 49. Retrieved from Lexis/Nexis Academic.

Zmuda, N. (2010, February 8). Pass or fail, Pepsi's Refresh will be case for marketing textbooks. Advertising Age, 81(6), 1. Retrieved from Lexis/Nexis Academic.

Zmuda, N. & York, E. (2009, August 10). Marketing meddling sparks brain drain at chaotic Pepsi. Advertising Age, 80(27), 1. Retrieved from Lexis/Nexis Academic.

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Authentic Leadership vs. Charismatic Leadership

Authentic leaders have strong values and a sense of purpose, and rather than trying to be all things to all people, concentrate on providing a positive role model by developing his or her own strengths, (Nahavandi, p.p. 211-212). Charismatic leaders concentrate on crafting a messages, managing their images, and becoming role models for their followers by focusing on their needs and appealing to them emotionally, (Nahavandi, p.p. 197 -198). While history has shown us charismatic leaders who are authentic, I believe that this is rarer phenomena than charismatic leaders who are not authentic, and overall, truly charismatica leaders are relatively rare. Leaders with high LMX are sometimes considered charismatic, however charisma is much more than having good interpersonal skills and powers of persuasion. According to the noted sociologist Max Weber, the personalities of truly charismatic leaders exhibit "charismatic authority" the components of which include exemplary character, and extraordinary insight and accomplishment.

There are notable differences between the manifestations of self-confidence in the two leadership styles. While authentic leaders develop their self-confidence through knowing and articulating their values and developing their strengths, (Nahavandi p.212), charismatic leaders develop their self-confidence through encouraging their followers who in turn encourage the leader thereby increasing the leader’s self-confidence, (p. 196).

While I do not dismiss the importance of charisma in establishing good interpersonal relationships as an important part of transformational leadership and other leadership styles, I tend to distrust leaders and managers who appeal to people purely on an emotional level rather than on an intellectual level. The key to being an authentic leader is in knowing oneself and leading by example, while the key to being a charismatic leader is in knowing ones followers and leading through a potentially ideated image that is presented to them. Nahavandi maintains that while authentic leaders do not need to be charismatic to be successful and that they can lead either by being task or relationship oriented, charismatic leaders necessarily have to have an “element of authenticity” to be effective, (p. 214). Personally, I am cynical and my initial reaction is to distrust those who try to lead emotionally through charm and charisma, I seek credibility and prefer to be led by someone I know is capable.

I believe leaders who rely purely on charisma, rather than self-knowledge, could potentially be challenged and threatened by the authenticity of values displayed in the workplace and subsequently thwart productivity if it doesn’t align with their perceptions and the vision that they attempt to portray. Kouzes and Posner maintain that it is not enough to deliver rousing speeches and talk about lofty ideals, as charismatic leaders are apt to do, constituents are more deeply moved by leadership by example, something that is associated with authentic leadership, (p. 77).

Nahavandi states that the applied theory of authentic leadership can be traced back to Roger’s and Maslow’s concepts of self-actualization, and that this is a relatively new concept and more research needs to be done, (p. 212). Additionally Nahavandi states that although the results can be inconclusive, the leader and follower relationship under charismatic leadership has been widely studied and there is a strong indication that positive results can be realized through this leadership style, (204).

References:

Kouzes, J. M. & Pozner, B.Z. (2003). The leadership challenge (3rd ed). San Francisco, CA: Jossey-Bass.

Nahavandi, A. (2009). The art and science of leadership (5th ed.). Upper Saddle River, NJ: Prentice-Hall.

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Changing to participatory leadership

Implementation Model:

Lewin’s Force Field Theory: 3 step process to increase the forces for, or decrease the resistance to change.


1. Unfreezing: Promote Understanding of Need, Motivate and Prepare to Overcome Resistance

2. Changing: Implement New Practices, Teach New Skills and Behaviors

3. Refreezing: Coaching , Training, and Rewarding to Solidify Implementation


Lewin’s Force Field Theory: To successfully implement change leaders must increase the forces for change or decrease the resistance through a three stage process: unfreezing, changing, and refreezing, (Nahavandi, p. 302). In order for an organization to change something must upset the balance between the forces that drive change and the forces that resist change, to implement a more modern participative leadership style, then increasing the drive to change would be my proposal. To “unfreeze” the organization leadership needs to clearly communicate throughout the firm that the change is necessary and they must do so with a sense of urgency, and with the desirable end result in mind, in order to drive the change and upset this balance, (Holt, Dorey, Bailey, & Low, 2009). The organization’s employees confidence will be bolstered if the benefits of the change to both the organization and its individuals are well communicated, and if the employees are allowed to participate in the planning and introduction. Kouzes and Posner state that change needs to be broken down into small doable steps, by doing so you encourage your employees to say yes to the change numerous times at each step in the process, rather than just once, (p. 208). The “change” step then needs to be accomplished in incremental steps in order to be effective. Finally, “refreezing” after the change can be accomplished by presenting a compelling vision to the employees through positive role models that work to reduce learning anxiety, (Stragalas, 2010). Leadership needs to ensure that current management is committed to its vision of participative management teams in order to accomplish this process step, actively encouraging the employees to embrace the learning process, and demonstrating that the rewards will be greater success for the organization holistically. Significantly, Nahavandi notes that a specific barrier to change is not rewarding employees for successful change initiatives, (p. 307).

Implementation Process Steps:

Unfreezing Steps:
1. Recognition of Need
2. Development of Ideas

Changing Steps:
3. Adoption of Ideas
4. Implementation

Refreezing Steps:
5. Allocation of Resources
6. Evaluation


To accomplish a planned change to adopt participative management teams the following implementation steps should be utilized:

Recognition of need: Alerting followers to leadership’s vision and clearly communicating the reasoning behind the change. As stated previously this should be communicated with of a sense of urgency. Leaders and followers must be aware that the change is important to the survival or effectiveness of the organization, (Nahavandi, p. 304). Activities include firm-wide written and oral corporate communications from leadership to all employees explicitly stating their concerns and expressing the need and the urgency for the change. A series of meetings should be scheduled and announced to employees letting them know you will be addressing their individual and collective concerns. Employees should be notified at these meetings that leadership will be encouraging their participation in the change process through forums in preparation for the next step.

Development of ideas: Include followers in this process step so that change messages are delivered implicitly and followers are invested in the change process. Nahavandi states that encouraging input and participation by those who are most affected will ease implementation, (p. 304). Leadership needs to promote an open and honest atmosphere that is conducive to the sharing or ideas where leadership can listen and respond to concerns expressed by followers. Activities include forums and brain-storming sessions between the various levels of leadership and management, and also by managers and their subordinates, in small groups or teams. Especially consideration needs to address the concerns of those who express cynicism regarding the change in these forums so that leadership can set the groundwork for establishing credibility in the next step.

Adoption of ideas: Leadership selects the ideas from various sources that are the most conducive to the change and formulates an implementation plan from these ideas. Leadership gains credibility through participation of members in this development process, (Holt, Dorey, Bailey, & Low, 2009). Activities include evaluation of ideas and then a written confirmation outlining the process steps of the change, clearly defining the new behaviors and skills that are expected of all employees, and leading to the thoughtful distribution of implementation steps throughout the firm in the next step of the process.

Implementation: Leadership needs to demonstrate commitment to followers, and be able to correct the course of action as needed, while maintaining the importance of the change during this phase, (Nahavandi, p.303). Activities include alerting employees to the implementation steps in advance and then coaching and teaching followers to adopt new behaviors and skill sets. Additionally groups should meet periodically to discuss the progress of the implementation and evaluate any unforeseen obstacles so that leadership can make subtle changes. Leadership should be evaluating how to reward successful implementation at this point.

Allocation of Resources: Existing resources must be redistributed or new resources must be supplied to “freeze” the change demonstrating leadership’s commitment to the change, (Nahavandi, p. 305). Activities include budgeting for follow up training sessions to reinforce the change. Additionally, an identified reward system should be activated during this step of the process and employees should be notified that leadership will continually be monitoring the successfulness of the implementation to prepare employees for the next step.

Evaluation: So that change is maintained evaluation needs to be a continuous process, (Nahavandi, p. 305). The change needs to be evaluated to ensure that the participative teams are communicating effectively. Activities can include written and oral surveying of employee attitudes concerning the effectiveness of the change and sanctions against employees who resist.

Conclusion:

Lewin’s 4 Key Characteristics of Change:

1. Importance of Recognizing the need for Change

2. Inevitable Presence of Resistance to Change

3. Focus on People as the Source for Change

4. Need to Support New Behaviors


Kurt Lewin identified four characteristics of change: recognize and communicate the need, understand the employees will initially be resistant, focus on your employees as the key to successful change, and support their new behaviors by rewarding them, (Nahavandi, p. 304). By following the preceding six process steps that effectively address these key characteristics, a corporation should be able to successfully change the current hierarchical leadership style to a more modern participatory leadership style. Unsuccessful implementation of these steps will cost in the long run by either having to repeat the change process and delaying the change, or by the loss of productivity through not changing and maintaining their current leadership style.

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gender and transactional vs. transformational leadership

Although women more frequently exhibit traits that are conducive to currently preferred participative leadership styles, these traits are not mutually exclusive to women nor are they necessarily found in women who assume leadership roles. Nahavandi discusses that research indicates that women naturally exhibit traits associated with transformational leadership, including interpersonal skills such as consideration, expressiveness, and cooperation, (2009, p. 208). This, in and of itself, does not however suggest to me that women make better leaders than men, as men too can exhibit these traits. Additionally there are many women who are leaders who do not exhibit these “feminine” traits.

When discussing masculine and feminine traits in leadership styles, what is referred to are those specific traits that are traditionally or stereotypically associated with gender. Transactional leadership styles, where an authoritarian leader is in complete control over followers, are at the opposite end of the spectrum from transformational leadership styles, and are identified with traditionally masculine traits. Transactional leadership, with clearly delineated roles for leaders and followers, is far more common in our country.

Transformational leadership is comprised of three factors: 1. charisma, which inspires an emotional bond between leaders and followers, 2. intellectual stimulation, which motivates followers to solve problems, and 3. individual consideration, which allows the development of personal relationship between leaders and followers, (Nahavandi, p.206). While transformational leadership is conducive to large-scale organizational change and is inspirational, transactional leadership is conducive to short term immediate outcomes and does not inspire followers.

When President Clinton expressed that we need a “new gender of leadership”, I believe he was referring to a need for an increase in transformational leadership, and I agree that we need to balance these two different styles of leadership within our organizations more effectively, ("Clinton pledges fidelity", 1992).

Although Nahavandi states that the research is inconclusive as to the importance of any specific trait within the big five personality dimensions, (2009, p. 128), I believe that a successful blending of personality traits is far more important to successful leadership than gender-specific traits, especially as none of these traits are actually specific to one gender. Successful leaders, whether their style is transactional or transformational, are conscientious, extroverted, open to new experiences, emotionally stable, and agreeable.


References:

Clinton pledges fidelity to 'new gender of leadership' at women’s caucus. (1992, July 15). The Salt Lake City Tribune, p. A2.

Nahavandi, A. (2009). The art and science of leadership (5th ed.). Upper Saddle River, NJ: Prentice-Hall.

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Leadership in action - high LPC vs low LPC leadership

According to Fiedler’s 1967 theory of the Contingency Model of Leadership, leader’s fall into different leadership styles based upon a scale he devised to assess effective leadership called the least-preferred coworker, (LPC), scale. According to Fiedler’s model there are high LPC leaders, those who focus on interpersonal relationships and draw their self-esteem from these relationships, and low LPC leaders, those who are task oriented and draw their self-esteem from the successful completion of tasks, (Nahavandi, pp. 70-71).
With her company’s focus on god and family before career, Mary Kay Ash was clearly a high LPC leader who concentrated on providing a matriarchal archetype for the employees of her company Mary Kay Cosmetics, (AIU Online, n.d.). Diametrically opposed to Mary Kay Ash, Bill Gates of Microsoft Corporation was a low LPC leader, who was concerned with performance, competition, and innovation rather than with the work-life balance of his employees, (AIU Online, n.d.). Microsoft Corporation, especially under the leadership of Bill Gates, was noted for poor employee member relationships. In 1992 Gates replaced Michael Hallman, after less than two years of service because the two could simply not get along, with a three member team that included Steve Ballmer whom Gates trusted and had a history of being able to get along and communicate with Gates despite his brusque style, (Microsoft: three’s company, 1992). Additionally the article notes that while products are Microsoft’s strength, weak relationships are almost the hallmark of the corporation, and relationship building is left up to Steve Ballmer, (Microsoft: three’s company).

Under Fiedler’s model effective leadership is observable during a crisis situation and defined as situational control. Situational control arises from a combination of the following three factors in order of importance: 1. the relationship of the leader to the member, LMR, 2. how well structured the task is, TS, and 3. the leader’s position, or legitimate, power, PP. As leader-member relationships are the most important factor in the contingency model, with all other factors being equal, in a high situational control condition group performance under a leader with a high LPC and good LMR, like Mary Kay Ash, would outperform group performance under a leader with a low LPC, like Bill Gates, whose LMR was bad.

Both Mary Kay Ash and Bill Gates were highly task structured, as evidenced by Ash’s clear heavily goal oriented reward structure and Gates highly structured corporate environment. Additionally, both held the absolute ultimate power positions within their firms as evidenced by their strength as figureheads of their corporations. The chief difference in these two leaders lied in Ash’s ability to motivate and connect with her workforce through interpersonal relationships while Gate’s apparent lack of this aptitude. Each leader, however, was ultimately effective and successful because they understood their abilities and modeled their organizations to accommodate their styles: Mary Kay Ash maintained a highly accessible and nurturing role for her employees while Bill Gates maintained a heavily detailed task orientated role that concentrated on innovation and his own performance.

As I prefer a more task oriented environment and lifelong learning I believe I would have preferred working for Bill Gates. I find working on and completing projects invigorating, while generally I find interpersonal relationships at work, with the possible exception of mentoring relationships, tedious and enervating.

References:


Microsoft: three’s company. (1992, February 8). The Economist, 322 (7745), 72. Retrieved from ProQuest ABI/Inform

Nahavandi, A. (2006). The art and science of leadership (4th ed.). Upper Saddle River, NJ: Prentice-Hall.

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Corruption and ways to prevent its occurrence

We often encounter the abridged biblical proverb “pride comes before a fall” in our daily lives, but in few arenas is the destructiveness of pride more evident and the subsequent fall more abrupt than in the business world. Leaders who don’t practice humility can become arrogant and believe they are infallible simply by not engaging others within their organizations and understanding that other employees are making valuable contributions as well. On discussing the inherent problems associated with leadership, James Kouzes and Barry Posner write that no problem is more insidious to a leader than the “treachery of hubris”, and go on to maintain that leaders who focus on their follower’s achievements are more likely to be able to avoid the temptations of power. (2002, pp. 396-397). Afsaneh Nahavandi concurs that power changes how leaders view themselves, causing them to distance themselves from their followers, and resulting in them making unethical decisions, (2006, p.171).
Former Enron CEO Jeffrey Skilling, routinely described as arrogant by the media, used this distance as a defense in his trial by claiming that he was unaware of his employee’s actions in manipulating the firm’s accounts. The accounting manipulations ultimately caused the collapse of Enron and resulted in losses of $60 billion in shareholder value. Skilling’s arrogance, displayed throughout his career at Enron, was apparent to observers at his trial as well, where he appeared controlling, refused the advice of his attorneys, and was even witnessed telling his attorneys what to do from the witness stand, (Clark & Lavelle, 2006). Observers of the trial could not perceive that someone in need of so much control was unaware of what was going on within the company. Power had so corrupted Jeffrey Skilling’s sense of self-confidence that he had become arrogant, he believed himself infallible to the extent that he hindered his own defense.

In his seminal article on the subject, Daniel Goleman defines emotional intelligence as a competency that allows a leader to effectively implement change and lead others, (1998). Through researching leadership at 200 global companies, Goleman states that there are five components to emotional intelligence that make a leader successful: 1. Self-awareness, the ability to realize how your emotions affect others, 2. Self-regulation, the ability to think before acting, 3. Motivation, a passion to work towards realizing ones goals, 4. Empathy, the ability recognize the emotion make-up of others, and 5. Social-Skills, the ability to manage relationships. Goleman elaborates that the basic hallmarks of these components respectively as: self-confidence, integrity, organizational commitment, sensitivity, and persuasiveness. Summarily, although intelligence and skills matter in leadership, without the traits that comprise emotional intelligence someone can never be a great leader. Additionally leaders with these personality traits are less prone to becoming corrupt.

Leaders with narcissistic or Machiavellian personality traits are more prone to corruption as leaders as individuals with these personality traits are more likely to abuse power. Nahavandi states that the behavior of these personality types can wreak havoc within an organization by terrifying their colleagues and subordinates and eroding trust, (p.172).

Goleman states that evidence suggests that some people are born and raised with higher levels of emotional intelligence; that it naturally increases with age through maturity, and also can be learned but that the process of learning requires “sincere desire and concerted effort”, (1998). Organizations can facilitate this effort by establishing codes of conduct that raise the ethical and moral behavior of employees, facilitating training on these standards, and implementing a response initiative that encouraged employees to report ethical abuses.


References:

Clark, K. & Lavelle, M. (2006, June 6). Guilty as charged. U.S. News and World Report, 140 (21), 44-45. Retrieved from EBSCOhost Business Source Complete.

Goleman, D. (1998, November/December). What makes a leader? Harvard Business Review, 76 (6), 93-102. Retrieved from EBSCOhost Business Source Complete.

Kouzes, J. M. & Pozner, B.Z. (2003). The leadership challenge (3rd ed). San Francisco, CA: Jossey-Bass.

Nahavandi, A. (2006). The art and science of leadership (4th ed.). Upper Saddle River, NJ: Pearson Prentice-Hall.

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Leadership challenge, juggling cultures

Saudi Arabia is a society of paradoxes with an ever increasing number of contradictions between their modernized economic system and their repressive and rigid socio-political system, (Clarke, 2007). Women and men are still segregated today in all public arenas, as they have been since the government was founded in 1932. Saudi women currently represent only 7% of the workforce, with 80% of them working in governmental jobs, however they are becoming increasingly more educated and prominent in business and the Saudi government is working on creating additional jobs for educated women, (Mansour, 2008).

As the purpose of the negotiation is to draft a new deal it is absolutely necessary to send your most skilled negotiator which would be the female executive. Presumably if negotiating the deal is successful, at some point in time the Saudi’s would have to deal with female executives in the firm. It would be important to let the Saudi’s know from the onset that your company is diverse and if they want to work with your firm then they will have to adapt as invariably this same situation will arise in the future.

Definitely the most experienced and skilled negotiator should be sent to meet with the Saudi Arabians, regardless of that person’s gender. If the best negotiator isn’t sent, then the message leadership sends throughout the company is inconsistent, as both men and women are allowed to practice as negotiators and ultimately the action would be discriminatory.

In order to ensure that the deal is not put at risk I would first contact the Saudi company to make sure they are understand and are aware that a woman will be sent to negotiate. As Saudi’s still segregate men and women, even in business; if this is not done then leadership would be disrespecting Saudi culture and this would put the deal at risk. If the Saudi company is not equipped to allow a female executive into the negotiating room then I would seek a solution that would be acceptable to both cultures. If the Saudi company doesn’t have female executives, as negotiations often take place over prolonged periods of time, then the American female executive can be partitioned, as is customary is Saudi society, or seated in another conference room. The American executive’s male “second in command” could then be sent back and forth to communicate between the female executive and the Saudi executives. Regardless, to preserve the dignity of the female executive, and also the dignity of the company and all other women working for the company, it would be absolutely necessary to make sure that the Saudis knew you were sending a female executive to negotiate.

Afsaneh Nahavandi maintains that leadership is central to bringing about cultural and organizational change in order to create multicultural organizations that value all individuals including women and minorities, (2006, p. 53). For a leader to work to build a multicultural environment, and then allow that effort to be subverted in certain circumstances as business dictates, would be counterproductive to building an open and inclusive organizational culture.



Clarke, K. (2007, Fall). A modernization paradox: Saudi Arabia’s divided society. Harvard International Review, 29 (3), 30-33. Retrieved from ProQuest ABI-Inform complete.

Mansour, M. (2008, September). Women job satisfaction in Saudi Arabia: an exploratory analysis. Journal of the American Academy of Business, 13 (2), 204-208. Retrieved from ProQuest ABI-Inform complete.

Nahavandi, A. (2006). The art and science of leadership (4th ed.). Upper Saddle River, NJ: Prentice Hall.

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Leader-member exchange model and in-group vs. out-group experiences

Abstract:
An evaluation of the leader-member exchange model and the devastating effects of being an out-group member after a corporate transfer, despite a long history with the same firm as an in-group member in other offices is presented. Additionally, the bi-directionality of groups is examined noting that both managers and subordinates have the ability to contribute to in-group and out-group status.

Introduction:
As people choose interpersonal relationships in life, inevitably and unavoidably, so too do people choose interpersonal relationships at work. Leaders in the workplace are not immune to the phenomena of preference, seeking higher quality relationships with some subordinates over others. All relationships are bi-directional in nature, but while generally leaders define the direction of, and are responsible for, relationships with their subordinates in the workplace, the relationship with a leader can be defined by the subordinate as well.
In The Art and Science of Leadership, Afsaneh Nahavandi identifies the concept of high and low quality relationships within the workplace as leader-member exchange, (LMX); qualifying high-quality relationships as in-group and low-quality relationships as out-group, and discusses the phenomena as it is influenced from the direction of the leader. Nahavandi characterizes in-group relationships as involving mutual respect, trust, and higher interaction leading to expected higher performance, with leaders tending to overlook the errors of the in-group members, (2009, p.87). Diametrically opposed to this, out-group relationships are characterized by Nahavandi as having lower interaction between the leader and the subordinates with lower expectations and prophecies of failure, (p.88). Generally, a leader’s perceptions of the performance of in-group members or out-group members are neither fair nor accurate due to these relationships, with in-group members receiving undo praise and out-group members receiving undo criticism and can ultimately be detrimental to an organization.
The leader-member exchange is not always controlled by the leader; subordinates sometimes work to set their bosses up in dysfunctional situations in which they will ultimately fail.
Jean-Francois Manzoni and Jean-Louis Barsoux describe the phenomena and detail what leaders can do to prevent out-groups from harming their success; evaluating it from the role the subordinates play in the relationship, and detail that subordinates can provoke their leaders passively or actively, (2009). Passive provocation occurs when subordinates view their leaders as difficult or incompetent, which incoming leaders generally are, and they either withhold information or limit contact that would allow the leader to make appropriate decisions. Alternatively, active provocation occurs when the subordinates inappropriately and overtly blame new leaders for what they feel are past transgressions by previous leaders and expect them to correct them. In either case, the employees more readily communicate with each other regarding the out-group leader and place these leaders in no-win situations. Manzoni and Barsoux maintain that new leaders can subvert being placed into an out-group by understanding where they stand with new employees, investing early in their subordinates by spending one on one time with them, being mindful of their behavior to prove early on that they are fair, and intervening early if they feel their subordinates are not engaging them, (2009).
As a member of a virtual team working for a large multinational I began my career in Boston and was transferred to Miami and subsequently to Atlanta. Although my ultimate performance manager was in Minneapolis, area managers also contributed to my performance review and my personnel file. I had the opportunity to be part of the “in groups” when I operated out of both the Boston and the Miami offices. This was a great position to be in as I was able to get support for my team and our initiatives from these offices. Being a successful member of the in-group in these locations, these managers not only contributed positive comments to my performance reviews, but also commendations to my personnel file and additionally I garnered numerous performance awards. Ultimately it is doubtful that I would have been transferred if my personnel file hadn’t indicated that I was a conscientious and effective worker. While in Boston I was able to identify a gap and effectuate a successful training initiative for employees that later became a part of the job description for my team. While in Miami I was asked to be a representative for South Florida on the Local Action Committee that was responsible for improving the work-life balance for employees in those offices. I had numerous other successes in these offices and I was known as a creative and supportive hard worker, it was acknowledged that I was easy to get along with.
Atlanta had always been a difficult office for my team leader to staff; previously three of my peers had been terminated from this office. When my leader asked me if I would consider relocating and handling the mid-South and the Carolina offices I readily accepted as Atlanta was one of the four largest offices in the country and I thought it would be an opportunity to deliver much needed services to this area of the country. I arrogantly made the mistake of believing that my co-workers that had served in these offices were unsuccessful because they were lacking in necessary skills. I expected my reputation and my previous record of successes would bode me well and that I would be readily accepted. My popularity however changed abruptly and noticeably when I was relocated, my performance was constantly under attack by the local members of the in-group, and I attempted to resolve this by working harder. Ultimately my efforts were unsuccessful as the office was predisposed to not appreciating the efforts of my team and although I gave my best efforts initially I was immediately relegated to the position of an out-group member in this office and eventually my performance suffered. Initiatives that I knew were needed and would have been readily accepted in my previous offices and areas, were met with only lukewarm success at best and more often than not they were entirely unsuccessful. I only found out when I was terminated that the local manager, claiming that she was in fact my performance manager without my performance manager’s knowledge and approval, had consistently been submitting fraudulent complaints concerning my performance to my personal file in this office. By the time of my termination, through non-renewal of my contract, my self-esteem was low, I was feeling dejected and I was so dissatisfied with the company due to this experience that accepted the termination quietly, I wouldn’t even accept the assistance of my actual performance manager by allowing her to intervene. I only realized in retrospect that I did the firm a disservice by not making them aware of the inconsistencies in the performance reports of the local manager: I should have illustrated to human resources before it came to this how detrimental the local manager had been.
I, my team, and my team leader had some truly great initiatives and services that could have benefitted the employees of the Mid-South and the Carolina offices. The services we were delivering were only changed for the better during this period of time, so I can definitely state that the actual tasks we were performing had little or nothing to do with the viability of our assistance, however the delivery of the tasks was interrupted due to my status as an out-group member. Due to the local manager’s efforts, and my inability to change her and the in-group members, many of whom were my subordinates, preconceived notions regarding the value of my team, the firm’s employees in these locations ultimately suffered.

Conclusion:
I have to say that I had been warned that this local manager was extremely difficult to work with. Arrogance due to my previous successes and my confidence in my ability to be an accepted in-group member prevented me from heeding these well intended warnings and acknowledging that the same thing could happen to me that had happened previously to my co-workers in this office.


References:

Manzoni, J. and Barsoux, J. (2009, Summer). Are your subordinates setting you up to fail? MIT Sloan Management Review, (50) 4, 42-52. Retrieved from ProQuest ABI/Inform Complete.

Nahavandi, A. (2006). The art and science of leadership (4th ed.). Upper Saddle River, NJ: Pearson Prentice-Hall.

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