Notes

Chapter 1

¹Blurb Buddies, Fast Company, December 1998, 54.

²Robert G. Eccles and Nitin Nohria, Beyond the Hype (Boston: Harvard Business School Press, 1992).

³Mark Zbaracki, “The Rhetoric and Reality of Total Quality Management,” Administrative Science Quarterly 43 (1998): 602–636.

⁴Blurb Buddies, 54.

⁵“Electra: An Electrical Utility Not Ready for Deregulation” (unpublished paper, June 1998).

⁶Morgan W. McCall Jr., Michael M. Lombardo, and Ann M. Morrison, The Lessons of Experience (Lexington, MA: Lexington Books, 1988), 19.

⁷Ibid.

⁸See, for instance, Jeffrey Pfeffer, The Human Equation: Building Profits by Putting People First (Boston: Harvard Business School Press, 1998); Department of Labor, Office of the American Workplace, High Performance Work Practices and Firm Performance (Washington, DC, August 1993); Mark A. Huselid, “The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance,” Academy of Management Journal 38 (1995): 635–672; and Brian E. Becker and Mark A. Huselid, “High Performance Work Systems and Firm Performance: A Synthesis of Research and Managerial Implications,” Research in Personnel and Human Resource Management 16 (1998): 53–101.

⁹John T. Dunlop and David Weil, “Diffusion and Performance of Human Resource Innovations in the U.S. Apparel Industry,” working paper, Harvard University, Cambridge, MA, 15 December 1994. See also John T. Dunlop and David Weil, “Diffusion and Performance of Modular Production in the U.S. Apparel Industry,” Industrial Relations 35 (July 1996): 334–355.

¹⁰See, for instance, John Paul MacDuffie, “Human Resource Bundles and Manufacturing Performance: Organizational Logic and Flexible Production Systems in the World Auto Industry,” Industrial and Labor Relations Review 48 (1995): 197–221.

¹¹Frits K. Pil and John Paul MacDuffie, “The Adoption of High-Involvement Work Practices,” Industrial Relations 35 (1996): 434.

¹²For a further discussion of this issue, see Pfeffer, Human Equation.

¹³“The Fast Track Is Where to Be, If You Can Find It,” Fortune, 20 July 1998, 152.

¹⁴W. Bruce Chew, Timothy F. Bresnahan, and Kim B. Clark, “Measurement, Coordination, and Learning in a Multi-plant Network,” working paper, Harvard Business School, Japan Management Association, Boston, MA, 1986.

¹⁵Richard Ricketts, “Survey Points to Practices that Reduce Refinery Maintenance Spending,” Oil and Gas Journal, 4 July 1994, 38.

¹⁶Deone Zell, Changing by Design: Organizational Innovation at Hewlett-Packard (Ithaca, NY: ILR Press, 1997), 56.

¹⁷Quoted in Carla O’Dell and C. Jackson Grayson, “If Only We Knew What We Know: Identification and Transfer of Internal Best Practices,” California Management Review 40 (spring 1998): 154.

¹⁸Ibid., 155.

¹⁹Andrew Hargadon, “Firms as Knowledge Brokers,” California Management Review 40 (spring 1998): 209–227.

²⁰See, for instance, Kevin Frieberg and Jackie Frieberg, Nuts! Southwest Airlines’ Crazy Recipe for Business and Personal Success (New York: Bard Press, 1996).

²¹Leon Mann, Danny Samson, and Douglas Dow, “A Field Experiment on the Effects of Benchmarking and Goal Setting on Company Sales Performance,” Journal of Management 24 (1998): 82.

²²Ibid., 92–93.

²³Ibid., 93.

²⁴John Paul MacDuffie and Susan Helper, “Creating Lean Suppliers: Diffusing Lean Production through the Supply Chain,” California Management Review 39 (summer 1997): 118–150.

²⁵Ibid., 138.

²⁶Robert E. Cole, “Introduction,” California Management Review 40 (spring 1998): 16.

²⁷Thomas A. Stewart, “Knowledge, the Appreciating Commodity,” Fortune, 12 October 1998, 199.

²⁸Don Cohen, “Toward a Knowledge Context: Report on the First Annual U.C. Berkeley Forum on Knowledge and the Firm,” California Management Review 40 (spring 1998): 23.

²⁹Douglas Harper, Working Knowledge: Skill and Community in a Small Shop (Chicago: University of Chicago Press, 1987).

³⁰“The Real Meaning of On-the-Job Training,” Leader to Leader (fall 1998): 61.

³¹The Conference Board, HR Executive Review 5, no. 3 (1997): 3.

³²Samuel Greengard, “How to Make KM a Reality,” Workforce, October 1998, 90.

³³Samuel Greengard, “Storing, Shaping and Sharing Collective Wisdom,” Workforce, October 1998, 84.

³⁴Conference Board, 6.

³⁵Corey Billington, interview by Andrew Hargadon and Robert Sutton, Palo Alto, California, July 1996.

³⁶Cohen, “Toward a Knowledge Context,” 24.

³⁷Ikujiro Nonaka and Noboru Konno, “The Concept of ‘Ba’: Building a Foundation for Knowledge Creation,” California Management Review 40 (summer 1998): 40–41.

³⁸Alex Taylor III, “How Toyota Defies Gravity,” Fortune, 8 December 1997, 100–108.

³⁹Ibid., 102.

⁴⁰MacDuffie and Helper, “Creating Lean Suppliers,” 123.

⁴¹David Castelblanco, Michel Kisfaludi, and Gagan Verma, “Do It, Then You Will Know” (Graduate School of Business, Stanford University, Stanford, CA, 4 June 1998).

⁴²John Paul MacDuffie, “The Road to ‘Root Cause’: Shop-Floor Problem-Solving at Three Auto Assembly Plants,” Management Science 43 (April 1997): 492.

⁴³Richard Pascale, “Fight. Learn. L*E*A*D,” Fast Company, August 1996, 65.

⁴⁴McCall, Lombardo, and Morrison, Lessons of Experience, 19.

⁴⁵See, for instance, Melvin Konner, Becoming a Doctor: A Journey of Initiation in Medical School (New York: Penguin, 1984).

Chapter 2

¹We heard David Kelley say this at a speech he gave to a group of executives at the Graduate School of Business, Stanford University, Stanford, CA, in July 1996. He told us that he has made this argument to dozens of other groups of executives in speeches he has made in the past few years.

²George W. Bohlander and Marshall H. Campbell, “Problem-Solving Bargaining and Work Redesign: Magma Copper’s Labor-Management Partnership,” National Productivity Review 12 (1993): 531.

³Leonard A. Schlesinger and Amy B. Johnson, “Xerox Corporation: Leadership Through Quality (A),” Case 490-008 (Boston: Harvard Business School, 1989).

⁴Ibid., 10–11.

⁵Ibid., 10.

⁶Todd D. Jick, “Xerox Corporation: Leadership Through Quality (B),” Case 492-045 (Boston: Harvard Business School, 1992), 3.

⁷Ibid., 1.

⁸Todd D. Jick, “Xerox Corporation: Leadership Through Quality (C),” Case 492-046 (Boston: Harvard Business School, 1992), 2.

⁹See, for instance, James C. Collins and Jerry I. Porras, Built to Last: Successful Habits of Visionary Companies (New York: HarperBusiness, 1994); Charles A. O’Reilly and Jennifer A. Chatman, “Culture as Social Control: Corporations, Cults, and Commitment,” in Research in Organizational Behavior, vol. 18, ed. Barry M. Staw and Larry L. Cummings (Greenwich, CT: JAI Press, 1996), 157–200; and Christopher Kenneth Bart and Mark C. Baetz, “The Relationship Between Mission Statements and Firm Performance: An Exploratory Study,” Journal of Management Studies 35 (November 1998): 823–853.

¹⁰Eileen Shapiro, Fad Surfing in the Boardroom (Reading, MA: Addison-Wesley, 1995), 15.

¹¹“Case Analysis: Financial Analyst Program” (Graduate School of Business, Stanford University, Stanford, CA, June 1998).

¹²Michael Santoli, “Electrifying,” Barron’s, 4 January 1999, 23.

¹³Henry Mintzberg, The Rise and Fall of Strategic Planning (New York: Free Press, 1994), 134.

¹⁴See, for instance, Richard D. Arvey and James E. Campion, “The Employment Interview: A Summary and Review of Recent Research,” Personnel Psychology 35 (1982): 281–322; B. M. Springbett, “Factors Affecting the Final Decision in the Employment Interview,” Canadian Journal of Psychology 12 (1958): 13–22; and David J. Schneider, Albert J. Hastorf, and Phoebe C. Ellsworth, Person Perception (Reading, MA: Addison-Wesley, 1979).

¹⁵Teresa Amabile, “Brilliant but Cruel: Perceptions of Negative Evaluators,” Journal of Experimental Social Psychology 19 (1983): 146–156.

¹⁶See, for instance, R. F. Bales, Interaction Process Analysis (Cambridge, MA: Addison-Wesley, 1951); and Bernard M. Bass, Bass and Stogdill’s Handbook of Leadership, 3rd ed. (New York: Free Press, 1990), particularly pages 90–94.

¹⁷Randall Collins, “On the Micro Foundations of Macro Sociology,” American Journal of Sociology 86 (1981): 984–1013.

¹⁸George Maclay and Humphrey Knipe, The Pecking Order in Human Society (New York: Delacorte Press, 1972), 97.

¹⁹Robert Reid, “The Battle for Air,” chap. 5 in Year One: An Intimate Look Inside the Harvard Business School (New York: Avon Books, 1994); see also Peter Robinson, Snapshots from Hell: The Making of an MBA (New York: Warner Books, 1994).

²⁰Steve Mariucci, keynote speech given at Ernst & Young’s Northern California Entrepreneur of the Year Award Banquet, San Francisco, California, 28 June 1998, notes taken by authors.

²¹C. Wright Mills, The Sociological Imagination (New York: Oxford University Press), 218.

²²John Paul MacDuffie and Susan Helper, “Creating Lean Suppliers: Diffusing Lean Production through the Supply Chain,” California Management Review 39 (summer 1997): 147.

²³Andre Millard, Edison and the Business of Innovation (Baltimore: Johns Hopkins University Press, 1990). Edison is sometimes portrayed as an ineffective manager because a high percentage of his lab’s inventions were not commercial successes and many of the companies based on individual technologies developed in his laboratories subsequently went out of business. Millard disputes this stereotype of Edison because, overall, Edison’s inventions made money and he continued to attract numerous investors to support his operations. Millard asserts that Edison’s critics miss the point—a high failure rate, punctuated by an occasional great success, is endemic in organizations based on new technologies. Most of the ideas that come out of modern research and development labs are not commercialized. Only a minority of the firms funded by even the most successful venture capitalists are financially successful. As Millard implies, critics sometimes confuse businesses in which it is difficult to succeed without a high failure rate with bad management.

²⁴Jeffrey Pfeffer, “SAS Institute: A Different Approach to Incentives and People Management Practices in the Software Industry,” Case HR-6 (Stanford, CA: Graduate School of Business, Stanford University, 1998), 13.

²⁵Greg Brenneman, “Right Away and All At Once: How We Saved Continental,” Harvard Business Review 76 (September–October 1998): 164.

²⁶Ibid., 170.

²⁷Robert G. Eccles and Nitin Nohria, Beyond the Hype: Rediscovering the Essence of Management (Boston: Harvard Business School Press, 1992).

²⁸Ibid., 32.

²⁹Ronald N. Ashkenas and Todd D. Jick, “From Dialogue to Action in GE Work-Out: Developmental Learning in a Change Process,” in Research in Organizational Change and Development, vol. 6, ed. William A. Pasmore and Richard W. Woodman (Greenwich, CT: JAI Press, 1992), 269.

³⁰Janet Lowe, Jack Welch Speaks: Wisdom from the World’s Greatest Business Leader (New York: John Wiley, 1998), 133–134.

³¹Ibid., 131.

³²Ibid., 135.

³³Ashkenas and Jick, “From Dialogue to Action,” 274, 276.

³⁴Ibid., 269–270.

³⁵Ibid., 281.

³⁶Lowe, Jack Welch Speaks, 130.

³⁷Ashkenas and Jick, “From Dialogue to Action,” 281.

³⁸Richard Pascale. “Fight. Learn. L*E*A*D,” Fast Company, August 1996, < http://www.fastcompany.com/online/04/wargames.html>.

³⁹See, for instance, Elliot Aronson, “Self-Justification,” chap. 4 in The Social Animal (San Francisco: W. H. Freeman, 1972); Daryl Bem, Beliefs, Attitudes, and Human Affairs (Belmont, CA: Brooks/Cole, 1970); and Robert B. Cialdini, “Commitment and Consistency,” chap. 3 in Influence, 2d ed. (Glenview, IL: Scott, Foresman, 1988).

⁴⁰Jeffrey Pfeffer, Managing with Power (Boston: Harvard Business School Press, 1992), 204.

⁴¹Ibid.

Chapter 3

¹Ellen J. Langer, “Minding Matters: The Consequences of Mindlessness-Mindfulness,” in Advances in Experimental Social Psychology, ed. Leonard Berkowitz (New York: Academic Press, 1989), 137–173.

²David Beardsley, “This Company Doesn’t Brake for (Sacred) Cows,” Fast Company, August 1998, 66.

³“Confession of a CEO” (Department of Industrial Engineering, Stanford University, Palo Alto, CA, December 1998).

⁴Trey Pruitt and Willie Quinn, “Recruiting and Training at Children’s Hospital Los Angeles Foundation” (Graduate School of Business, Stanford University, Stanford, CA, June 1998), 4.

⁵Ibid.

⁶Ibid., 6.

⁷Robert B. Cialdini, Influence: The Psychology of Persuasion (New York: Quill), 1993

⁸Ibid.

⁹Quoted in Cialdini, Influence, 7.

¹⁰See, for instance, William G. Ouchi, Theory Z (Reading, MA: Addison-Wesley, 1981); and John Kotter and James Heskett, Corporate Culture and Performance (New York: Free Press, 1992).

¹¹The values are described in numerous Hewlett-Packard internal documents, including one entitled “The HP Way.” They are also discussed in writings about the company; for instance, in Deone Zell, Changing by Design: Organizational Innovation at Hewlett-Packard (Ithaca, NY: ILR Press, 1997), 16.

¹²Zell, Changing by Design, 106.

¹³See, for instance, Meryl Reis Louis and Robert I. Sutton, “Switching Cognitive Gears: From Habits of Mind to Active Thinking,” Human Relations 44 (1991): 55–76.

¹⁴Langer, “Minding Matters,” 139.

¹⁵Jeffrey Pfeffer, “The Fresh Choice Company: Acquiring and Transferring Knowledge,” Case HR-7 (Stanford, CA: Graduate School of Business, Stanford University, 1998), 1.

¹⁶Ibid., 6–8.

¹⁷Jeffrey Pfeffer, Tanya Menon, and Robert I. Sutton, “Knowledge Transfer within and across the Boundaries of a Restaurant Chain: Why It Is Sometimes Easier to Learn from Outsiders than Insiders,” working paper, Graduate School of Business, Stanford University, Stanford, CA, 1998, p. 29.

¹⁸Ibid., 30.

¹⁹Barry M. Staw, Lloyd E. Sandelands, and Jane E. Dutton, “Threat-Rigidity Effects in Organizational Behavior: A Multilevel Analysis,” Administrative Science Quarterly 26 (1981): 501–524.

²⁰Robert I. Sutton, Kathleen Eisenhardt, and James V. Jucker, “Managing Organizational Decline: Lessons from Atari,” Organizational Dynamics 14 (1986): 17–29.

²¹Gary High, Director, Human Resource Development, People Systems, Saturn Corporation, interview by Jeffrey Pfeffer and Robert Sutton, Detroit, Michigan, 25 March 1998.

²²Ibid.

²³Anna Kretz, General Motors, interview by Jeffrey Pfeffer and Robert Sutton, Detroit, Michigan, 25 March 1998.

²⁴Ibid.

²⁵Mike Bennett, Saturn, interview by Jeffrey Pfeffer and Robert Sutton, Spring Hill, Tennessee, 24 March 1998.

²⁶Tom Lasorda, General Motors, interview by Jeffrey Pfeffer and Robert Sutton, Detroit, Michigan, 25 March 1998.

²⁷Arie W. Kruglanski and Donna M. Webster, “Motivated Closing of the Mind: ‘Seizing’ and ‘Freezing,’” Psychological Bulletin 103 (1996): 264.

²⁸Ibid.

²⁹Randy Kennedy, “Private Group Offers Educator Bonus Plan,” New York Times, 27 January 1998, sec. A, p. 20.

³⁰Steve Stecklow, “Apple Polishing: Kentucky’s Teachers Get Bonuses, but Some Are Caught Cheating,” Wall Street Journal, 2 September 1997, sec. A, p. 1.

³¹Burt Schorr, “School’s Merit-Pay Program Draws Gripes from Losers—and Winners,” Wall Street Journal, 16 June 1983, sec. B, p. 31.

³²Winslow Ward, The Making of Silicon Valley: A One Hundred Year Renaissance (Palo Alto, CA: Santa Clara Historical Society, 1995).

³³See, for example, Edward W. Lawler III, High-Involvement Management (San Francisco: Jossey-Bass, 1986).

³⁴See, for example, Michael Beer, “Human Resources at Hewlett-Packard (A),” Case 9-495-051 (Boston: Harvard Business School Publishing, 1995).

³⁵Beardsley, “This Company Doesn’t Brake,” 66.

³⁶Ibid.

³⁷These figures come from J. Burgess Winter, “Magma: A High Performance Company” (paper presented at the Copper 95-Cobre 95 International Conference, Santiago, Chile, November 1995), 1.

³⁸Ibid., 3.

³⁹Ibid., 1.

⁴⁰The following material comes from a telephone interview by Robert Sutton with Annette Kyle on 17 September 1998. This section also relies on information from a technical report by Gerald Ledford and Susan Cohen, “The Wow Program at the Bayport Terminal, Los Angeles,” Center for Effective Organizations, Graduate School of Business, University of Southern California, Los Angeles, July 1996.

⁴¹Tom Peters, The Pursuit of Wow! Every Person’s Guide to Topsy-Turvy Times (New York: Vintage Books, 1994).

⁴²Winter, “Magma,” 4.

⁴³Jeffrey Pfeffer, “Human Resources at the AES Corporation: The Case of the Missing Department,” Case SHR-3 (Stanford, CA: Graduate School of Business, Stanford University, 1997), 4.

⁴⁴AES Corporation, Annual Report (Arlington, VA: 1997), 9.

⁴⁵“Power to the People,” CFO, March 1995, 41.

⁴⁶Pfeffer, “Human Resources at the AES Corporation,” 15.

⁴⁷AES, Annual Report, 10.

⁴⁸Paul C. Nystrom and William H. Starbuck, “To Avoid Organizational Crises, Unlearn,” Organizational Dynamics (spring 1984): 53.

Chapter 4

¹W. E. Deming, Out of the Crisis (Cambridge, MA: Massachusetts Institute of Technology, Center for Advanced Engineering Study, 1986).

²Matt Krantz, “How Sweet It Is: Al Dunlap Gets Sunbeam Deal,” Investor’s Business Daily, 23 July 1996, sec. A, p. 4.

³“For Markets, A Good Quarter on Paper,” Investor’s Business Daily, 1 October 1996, sec. A, p. 1.

⁴On October 27, 1998, Dunlap, in a conversation with Paul Reist of Stanford Business School, claimed he had spoken at 14 major business schools, including the ones listed, in the past year.

⁵Holman W. Jenkins Jr., “When CEOs Can’t Add Up the Numbers,” Wall Street Journal, 19 August 1998, sec. A, p. 19.

⁶“’Chainsaw’ Al Cuts Up for MBAs,” Chicago Tribune, 12 January 1998, sec. C, p. 3.

⁷Albert J. Dunlap, Mean Business (New York: Times Books, 1996), 169.

⁸Ibid., 232.

⁹Ellen Joan Pollock and Martha Brannigan, “The Sunbeam Shuffle, or How Ron Perelman Wound Up in Control,” Wall Street Journal, 19 August 1998, sec. A, p. 1.

¹⁰Patricia Sellars, “Can Chainsaw Al Really Be a Builder?” Fortune, 12 January 1998, 118–120.

¹¹Anne Fisher, “Tom Peters, Professional Loudmouth,” Fortune, 29 December 1997, 274.

¹²Andrew S. Grove, Only the Paranoid Survive (New York: Currency Doubleday), 117, emphasis added.

¹³The site can be found at http://www.igc.apc.org/faceintel/.

¹⁴Princeton Survey Research Associates, Worker Representation and Participation Survey: Report on the Findings (Princeton, NJ: Princeton Survey Research Associates, 1994), 5.

¹⁵Ibid., 9.

¹⁶Ibid., 19.

¹⁷Ibid., 40.

¹⁸Francis Harris, “Nasty or Nice?” World Link, September–October 1996, 39.

¹⁹Ibid.

²⁰For example, Edward Lazear’s explanation of seniority-based wage systems maintains that paying people less than what they have produced earlier in their career and more when they are older motivates effort because there are now incentives for more senior people not to shirk. If they shirk, are caught, and are fired, they will lose the deferred compensation inherent in seniority-based wages. Similarly, younger workers are motivated not to shirk because otherwise they will lose the opportunity to get paid more than the value of what they are producing as they become more senior. Edward P. Lazear, “Agency, Earnings Profiles, Productivity, and Hours Restrictions,” American Economic Review 71 (1981): 606–620.

²¹For studies of the negative effects of monitoring, see, for instance, B. C. Amick and M. J. Smith, “Stress, Computer-Based Work Monitoring and Measurement Systems: A Conceptual Overview,” Applied Ergonomics 23 (1992): 6–16; J. R. Aiello, “Electronic Performance Monitoring,” Journal of Applied Psychology 23 (1993): 499–507; and R. Grant and C. Higgins, “Monitoring Service Workers Via Computer: The Effect on Employees, Productivity, and Service,” National Productivity Review 8 (1989): 101–112. On the negative consequences of punishment, see F. Luthans and R. Kreitner, Organizational Behavior Modification (Glenview, IL: Scott, Foresman, 1975).

²²John D. Sterman, Nelson P. Repenning, and Fred Kofman, “Unanticipated Side Effects of Successful Quality Programs: Exploring a Paradox of Organizational Improvement,” Management Science 43 (April 1997): 505.

²³Ibid., 506.

²⁴Ibid., 514.

²⁵Deone Zell, Changing By Design: Organizational Innovation at Hewlett-Packard (Ithaca, NY: ILR Press, 1997), 82.

²⁶Ibid., 82–83.

²⁷Thomas H. Davenport, “The Fad That Forgot People,” Fast Company, November 1995, 71–74.

²⁸See, for instance, “Re-engineering with Love,” The Economist, 9 September 1995, 69–70; David A. Garvin, “Leveraging Processes for Strategic Advantage,” Harvard Business Review (September–October 1995): 80–81; and James P. Womack, review of The Reengineering Revolution: A Handbook, by Michael Hammer and Steven A. Stanton, and Reengineering Management: The Mandate for New Leadership, by James Champy, Sloan Management Review 36 (summer 1995): 99–100.

²⁹Zell, Changing by Design, 23.

³⁰M. R. Leary, Self-Presentation: Impression Management and Interpersonal Behavior (Boulder, CO: Westview), 30.

³¹H. S. Schwartz, Narcissistic Process and Corporate Decay (New York: New York University Press), 89.

³²James Charlton, The Executive’s Quotation Book (New York: St. Martin’s Press), 77.

³³Grove, Only the Paranoid, 118–119.

³⁴Patrick Kelly, Faster Company (New York: John Wiley, 1998), 24.

³⁵Ibid., 96.

³⁶Ibid., 154.

³⁷Comments from a talk by David F. Russo to a class at the Graduate School of Business, Stanford University, Stanford, California, 5 May 1998.

³⁸Jeffrey Pfeffer, “SAS Institute: A Different Approach to Incentives and People Management Practices in the Software Industry,” Case HR-6 (Stanford, CA: Graduate School of Business, Stanford University, 1998), 4.

³⁹Jeffrey Pfeffer, “The Men’s Wearhouse: Success in a Declining Industry,” Case HR-5 (Stanford, CA: Graduate School of Business, Stanford University, 1997), 1.

⁴⁰AES Corporation, Annual Report, (Arlington, VA: 1997), 17.

⁴¹Ibid., 9.

⁴²Charles L. Bosk, Forgive and Remember (Chicago: University of Chicago Press, 1979).

⁴³Stephen E. Frank, “Citicorp to Lay off 9,000 in Revamping,” Wall Street Journal, 22 October 1997, sec. A, p. 3.

⁴⁴Kathleen DesMarteau, “Levi Closes 11 U.S. Plants,” Bobbin, January 1998, 14–16.

⁴⁵For a discussion of how these factors can reduce the harmful effects of distressing events, see Robert I. Sutton and Robert L. Kahn, “Prediction, Understanding, and Control as Antidotes to Organizational Stress,” in Handbook of Organizational Behavior, ed. Jay Lorsch (Englewood Cliffs, NJ: Prentice Hall, 1987), 272–285.

⁴⁶For other material on how the two companies dealt with their layoffs, see Mike Verespej, “How to Manage Adversity,” Industry Week, 19 January 1998, 24; “A Community Affair,” Apparel Industry Magazine, September 1998, 84ff.; and Stephen E. Frank, “Citicorp’s Reed Received Raise of 15% in 1997,” Wall Street Journal, 9 March 1998, sec. B, p. 10.

⁴⁷Jerald Greenberg, “Employee Theft as a Reaction to Underpayment Inequity: The Hidden Cost of Pay Cuts,” Journal of Applied Psychology 75 (1990): 561–568.

Chapter 5

¹Discussions of the importance of measurement and its effects on organizational behavior have a long history. Most of the research indicates that measurement in and of itself, even without incentives attached to the measures, affects behavior. See, for instance, Peter M. Blau, The Dynamics of Bureaucracy (Chicago: University of Chicago Press, 1955); and V. F. Ridgway, “Dysfunctional Consequences of Performance Measurements,” Administrative Science Quarterly 1 (1956): 240–247.

²A. T. Kearney, “Workforce Initiative Discussion Document” (presentation sponsored by Silicon Valley Joint Venture, 25 August 1998), 4.

³Frederick F. Reichheld, The Loyalty Effect (Boston: Harvard Business School Press, 1996), 217.

⁴See, for instance, Thomas J. Peters and Robert H. Waterman, Jr., In Search of Excellence (New York: Harper and Row, 1982); and William G. Ouchi, Theory Z (Reading, MA: Addison-Wesley, 1981).

⁵See, for instance, Shelly Branch, “The 100 Best Companies to Work for in America,” Fortune, 11 January 1999, 122; and Robert Levering and Milton Moskowitz, “The 100 Best Companies to Work for in America,” Fortune, 12 January 1998, 85.

⁶“Have We Lost Our ‘Way’?” (Department of Industrial Engineering, Organizational Behavior and Management Knowing-Doing Case Study, Stanford University, Palo Alto, CA, December 1998).

⁷Ibid.

⁸Ibid.

⁹“Final Project Paper” (Graduate School of Business, Stanford University, Stanford, CA, 2 June 1998), 2.

¹⁰Ibid., 3.

¹¹Ibid., 4.

¹²Ibid., 6.

¹³For a comprehensive discussion of the balanced score-card, see Robert S. Kaplan and David P. Norton, The Balanced Scorecard: Translating Strategy into Action (Boston: Harvard Business School Press, 1996).

¹⁴Robert Simons and Antonio Dávila, “Citibank: Performance Evaluation,” Case 198-048 (Boston: Harvard Business School Publishing, 1997), 7.

¹⁵Ibid., 3.

¹⁶Ibid., 4.

¹⁷G. A. Miller, “The Magical Number Seven, Plus or Minus Two: Some Limits on Our Capacity for Processing Information,” Psychological Review 63 (1956): 81–97.

¹⁸Interview by Jeffrey Pfeffer and Robert Sutton, Detroit, Michigan, 25 March 1998, emphasis added.

¹⁹Ibid.

²⁰Wainwright Industries, Leader’s Guide, Sincere Trust and Belief in People: The Wainwright Story (St. Louis: Wainwright Industries, 1998), 7.

²¹Ibid., 20.

²²Quoted in Jeffrey Pfeffer, “The Men’s Wearhouse: Success in a Declining Industry,” Case HR-5 (Stanford, CA: Graduate School of Business, Stanford University, 1997), 27.

²³Ibid., 15.

²⁴Ibid., 20–21.

²⁵Jeffrey Pfeffer, “SAS Institute: A Different Approach to Incentives and People Management Practices in the Software Industry,” Case HR-6 (Stanford, CA: Graduate School of Business, Stanford University, 1998), 3–4.

²⁶Ibid., 5.

²⁷Ibid., 8.

²⁸Ibid., 11.

²⁹Gina Imperato, “How to Give Good Feedback,” Fast Company, September 1998, 147.

³⁰The material in this section is taken from “Intuit: A Company That Identifies and Attacks Gaps” (Department of Industrial Engineering, Stanford University, Palo Alto, CA, December 1998).

³¹Roger Hallowell, James I. Cash, and Shelly Ibri, “Sears, Roebuck and Company (A): Turnaround,” Case 9-898-007 (Boston: Harvard Business School, 1997), 3.

³²Anthony J. Rucci, Steven P. Kirn, and Richard T. Quinn, “The Employee-Customer-Profit Chain at Sears,” Harvard Business Review (January–February 1998): 84.

³³Hallowell, Cash, and Ibri, “Sears (A),” 3.

³⁴Ibid.

³⁵Ibid. See, for instance, the data from the customer surveys on p. 22.

³⁶Ibid., 24.

³⁷Rucci, Kirn, and Quinn, “Employee-Customer-Profit Chain,” 91–94.

Chapter 6

¹Alfie Kohn, “Is Competition Inevitable?” chap. 2 in No Contest: The Case Against Competition, rev. ed. (Boston: Houghton Mifflin, 1992).

²Dean Tjosvold, Working Together to Get Things Done (Lexington, MA: D. C. Heath, 1986), 34.

³Norman Berg and Norman Fast, “The Lincoln Electric Company,” Case 376-028 (Boston: Harvard Business School, 1975), 3.

⁴Andrew S. Grove, High Output Management (New York: Random House, 1983), 170.

⁵Kohn, No Contest, 4.

⁶“Knowing versus Doing on Wall Street” (Graduate School of Business, Stanford University, Stanford, CA, June 1998), 3.

⁷“Employee Turnover at Bear, Stearns & Co.” (Graduate School of Business, Stanford University, Stanford, CA, June 1998), 3–4.

⁸“Promoting Teamwork and Cooperation within a Culture of Individuals: A Case Study of a Microsoft Business Unit” (Stanford University School of Engineering, Palo Alto, CA, December 1996), executive summary.

⁹Ibid.

¹⁰Ibid., 2.

¹¹Ibid., 4.

¹²Jeffrey Pfeffer, “The Fresh Choice Company: Acquiring and Transferring Knowledge,” Case HR-7 (Stanford, CA: Graduate School of Business, Stanford University, 1998).

¹³Jeffrey Pfeffer, Tanya Menon, and Robert I. Sutton, “Knowledge Transfer within and across the Boundaries of a Restaurant Chain: Why It Is Sometimes Easier to Learn from Outsiders than Insiders,” working paper, Graduate School of Business, Stanford University, Stanford, CA, 1998, 37.

¹⁴Interview by Tanya Menon, 1997.

¹⁵Pfeffer, Menon, and Sutton, “Knowledge Transfer,” 38.

¹⁶Ibid., 45.

¹⁷Tjosvold, Working Together, 34.

¹⁸Kohn, No Contest, 45–46.

¹⁹Ibid., 47.

²⁰Ibid., 55.

²¹R. Rosenthal and L. Jacobson, Pygmalion in the Classroom: Teacher Expectations and Pupils’ Intellectual Development (New York: Holt, Rinehart, and Winston, 1968).

²²See, for instance, J. Sterling Livingston, “Pygmalion in Management,” Harvard Business Review 47 (1969): 81–89; and Dov Eden, “Self-Fulfilling Prophecy as a Management Tool: Harnessing Pygmalion,” Academy of Management Review 9 (1984): 64–73. An excellent review of the literature can be found in Dov Eden, Pygmalion in Management: Productivity as a Self-Fulfilling Prophecy (Lexington, MA: Lexington Books, 1990).

²³D. Eden and A. B. Shani, “Pygmalion Goes to Boot Camp: Expectancy, Leadership and Trainee Performance,” Journal of Applied Psychology 67 (1982): 194–199.

²⁴Dov Eden, “Pygmalion without Interpersonal Contrast Effects: Whole Groups Gain from Raising Expectations,” Journal of Applied Psychology 75 (1990): 394–398.

²⁵W. Edwards Deming, Out of the Crisis (Cambridge, MA: Massachusetts Institute of Technology Center for Advanced Engineering Study, 1986), 102.

²⁶An excellent discussion of the benefits and costs of relative performance evaluation can be found in Robert Gibbons and Kevin J. Murphy, “Relative Performance Evaluation for Chief Executive Officers,” Industrial and Labor Relations Review 43 (February 1990): 30-S–51-S. The ideas underlying the advantages of relative performance evaluation can be found in Edward P. Lazear and Sherwin Rosen, “Rank-Order Tournaments as Optimum Labor Contracts,” Journal of Political Economy 89 (1981): 841–864.

²⁷Deming, Out of the Crisis, 102.

²⁸Robert Crow, “Institutionalized Competition and Its Effects on Teamwork,” Journal for Quality and Participation 18 (June 1995): 47.

²⁹For a discussion of the social facilitation idea, see Robert B. Zajonc, “Social Facilitation,” Science 149 (1965): 269–274. A comprehensive review of many studies of the social facilitation effect can be found in C. F. Bond Jr. and L. J. Titus, “Social Facilitation: A Meta-Analysis of 241 Studies,” Psychological Bulletin 94 (1983): 265–292. See also John R. Aiello and Carol M. Svec, “Computer Monitoring of Work Performance: Extending the Social Facilitation Framework to Electronic Presence,” Journal of Applied Social Psychology 23 (1993): 537–548.

³⁰Kohn, No Contest, chap. 3. For other studies and reviews of the effects of competition and cooperation on learning, see David W. Johnson, Geoffrey Maruyama, Roger Johnson, Deborah Nelson, and Linda Skon, “Effects of Cooperative, Competitive, and Individualistic Goal Structures on Achievement: A Meta-Analysis,” Psychological Bulletin 89 (1981): 47–62; Abaineh Workie, “The Relative Productivity of Cooperation and Competition,” Journal of Social Psychology 92 (1974): 225–230; and Morton Goldman, Joseph W. Stockbauer, and Timothy G. McAuliffe, “Intergroup and Intragroup Competition and Cooperation,” Journal of Experimental Social Psychology 13 (1977): 81–88.

³¹Roderick M. Kramer, “Cooperation and Organizational Identification,” in Social Psychology in Organizations: Advances in Theory and Research, ed. J. Keith Murnighan (Englewood Cliffs, NJ: Prentice-Hall, 1993), 245, emphasis added.

³²Herbert A. Simon, “Organizations and Markets,” Journal of Economic Perspectives 5 (1991): 33.

³³A mathematical simulation by a trio of economists showed that a piece-rate system like Lincoln’s would cause excessive self-interested behavior without these incentives for cooperating and for supporting the firm as a whole. See George Baker, Robert Gibbons, and Kevin J. Murphy, “Subjective Performance Measures in Optimal Incentive Contracts,” Quarterly Journal of Economics 109 (1994): 1125–1156.

³⁴Conference Board, “Leveraging Intellectual Capital,” HR Executive Review 5, no. 3 (1997): 5–6.

³⁵Crow, “Institutionalized Competition,” 47.

³⁶Morgan W. McCall Jr., Michael M. Lombardo, and Ann M. Morrison, The Lessons of Experience: How Successful Executives Develop on the Job (Lexington, MA: Lexington Books, 1988), 19.

³⁷Brian Trelstad, “Group Leadership or Organizational Anrchy: The Case of Stanford’s Public Management Program” (Graduate School of Business, Stanford University, Stanford, CA, June 1998), 9.

³⁸Excerpts from memorandum sent by Kelleher to the people of Southwest Airlines, forwarded through someone at United Airlines.

³⁹Jeffrey Pfeffer, “The Men’s Wearhouse: Success in a Declining Industry,” Case HR-5 (Stanford, CA: Graduate School of Business, Stanford University, 1997), 15.

⁴⁰Jeffrey Pfeffer, “SAS Institute: A Different Approach to Incentives and People Management Practices in the Software Industry,” Case HR-6 (Stanford, CA: Graduate School of Business, Stanford University, 1998), 6–7.

⁴¹Jeffrey Pfeffer, “Willamette Industries ‘No Pay at Risk’ Compensation Practices,” Case HR-9 (Stanford, CA: Graduate School of Business, Stanford University, 1998), 7.

⁴²Ibid., 8.

⁴³Tom Lasorda, General Motors, interview by Jeffrey Pfeffer and Robert Sutton, Detroit, Michigan, 25 March 1998.

⁴⁴Tjosvold, Working Together, 35.

Chapter 7

¹Joel Podolny, John Roberts, and Andris Berzins, “British Petroleum: Performance and Growth (A),” Case S-1B-16A (Stanford, CA: Graduate School of Business, Stanford University, 1998).

²Ibid., 1.

³Joel Podolny, John Roberts, and Andris Berzins, “British Petroleum: Focus on Learning (B),” Case S-1B-16B (Stanford, CA: Graduate School of Business, Stanford University, 1998), 1.

⁴“British Petroleum (A),” 1.

⁵Ibid., 5–6.

⁶“When Toughness Is Not Enough,” Financial Times, 26 June 1992.

⁷“British Petroleum (A),” 8.

⁸“Blood in the Boardroom,” Sunday Telegraph, 28 June 1992, quoted in “British Petroleum (A),” 8.

⁹“British Petroleum (A),” 9.

¹⁰“British Petroleum (B),” 1.

¹¹Ibid., 2.

¹²Ibid., 4.

¹³Ibid.

¹⁴Ibid.

¹⁵Ibid.

¹⁶Ibid., 5.

¹⁷Ibid., 6.

¹⁸Ibid.

¹⁹Ibid.

²⁰Ibid., 7.

²¹Thomas H. Davenport and Laurence Prusak, Working Knowledge: How Organizations Manage What They Know (Boston: Harvard Business School Press, 1998), 20.

²²Ibid.

²³Ibid., 21.

²⁴“British Petroleum (B),” 7–8.

²⁵Ibid., 8.

²⁶All quotations in the Barclay’s Global Investors section come from interviews by Jeffrey Pfeffer, San Francisco, California, 12 February 1998.

²⁷New Zealand Post, Annual Report (Wellington, New Zealand: 1994), 10.

²⁸Ibid.

²⁹Ibid., 5.

³⁰Harvey Parker, “New Zealand Post—Using the Personnel Function to Promote Excellence in Management” (unpublished ms, January 1989), 4.

³¹Ibid., 5

³²Jeffrey Pfeffer, The Human Equation: Building Profits by Putting People First (Boston: Harvard Business School Press, 1998).

³³Elmar Toime, “The Case for Postal Deregulation” (paper presented at the Utility Markets Summit, Wellington, New Zealand, 27 April 1995), 4, 6.

Chapter 8

¹Harlow B. Cohen, “The Performance Paradox,” Academy of Management Executives 12 (1998): 30.

²Skip LeFauve, interview by Jeffrey Pfeffer and Robert Sutton, Detroit, Michigan, 25 March 1998.

³Jeffrey Pfeffer, “Human Resources at the AES Corporation: The Case of the Missing Department,” Case SHR-3 (Stanford, CA: Graduate School of Business, Stanford University, 1997), 3–4.

⁴Jeffrey Pfeffer, “The Men’s Wearhouse: Success in a Declining Industry,” Case HR-5 (Stanford, CA: Graduate School of Business, Stanford University, 1997), 2.

⁵Ibid., 4.

⁶“McKinsey’s Value Chain,” World Link, September–October 1998, 30–32.

⁷Tom Lasorda, interview by Jeffrey Pfeffer and Robert Sutton, Detroit, Michigan, 25 March 1998.

⁸Thomas J. Peters and Robert H. Waterman, Jr., In Search of Excellence: Lessons from America’s Best-Run Companies (New York: Harper and Row, 1982).

⁹Greg Brenneman, “Right Away and All At Once: How We Saved Continental,” Harvard Business Review 76 (September–October 1998): 164.

¹⁰Walter Gropius, Scope of Total Architecture (New York: Macmillan, 1970).

¹¹Warren Bennis and Burt Nanus, Leaders: Strategies for Taking Charge (New York: HarperBusiness, 1997), 60.

¹²Ibid., 70.

¹³Suzy Wetlaufer, “Organizing for Empowerment: An Interview with AES’s Roger Sant and Dennis Bakke,” Harvard Business Review 77 (January–February 1999): 119.

¹⁴Brenneman, “Right Away,” 166.

¹⁵“Forgive Don’t Forget,” World Link, September–October 1998, 47.

¹⁶“Interview,” World Link, September–October 1998, 49.

¹⁷Ibid., 170.

¹⁸“Managing Major Organizational Change: Transition to Closure at Newcastle Steelworks,” BHP Newcastle Steelworks Case Study (Melbourne, Australia: Broken Hill Proprietary, 1998), 6. See also Coopers and Lybrand, Closing Plants: Planning and Implementation Strategies (Morristown, NJ: Financial Executive Research Foundation, 1986).

¹⁹Ibid., 26–27.

²⁰Alfie Kohn, No Contest: The Case Against Competition (Boston: Houghton Mifflin, 1992), 50–51.

²¹Eric Ransdell, “They Sell Suits with Soul,” Fast Company, October 1998, 68.

²²Dean Tjosvold, Working Together to Get Things Done (Lexington, MA: D.C. Heath, 1986), 26. See also Dean Tjosvold, “Testing Goal Linkage Theory in Organizations,” Journal of Occupational Behavior 7 (1986): 77–88.

²³Quoted in Tjosvold, Working Together, 11.

²⁴Brenneman, “Right Away,” 166.

²⁵“Using Measurement to Boost Your Unit’s Performance,” Harvard Management Update 3 (October 1998): 1.

²⁶Michael Warshaw, “Have You Been House-Trained?” Fast Company, October 1998, 48.

²⁷Ibid., 46.