*** INSTRUCTIONS: ***
Please read the following questions and cases thoroughly and answer appropriately. When answering these questions, please ensure that you use the textbook (only as concept reference, not for examples/scenarios), journal articles, practitioner’s publications, published current events/statistics, and organizational behavior theories to support your answers.
Each answer should be lengthy enough to adequately explain your points. Please do not rely heavily on anecdotal statements and base your answers on theory, concepts, and documented facts.
***PLEASE NOTE: THIS EXAM WILL BE PROCESSED THROUGH THE TURNITIN PLAGIARISM SOFTWARE. THIS SOFTWARE IS ROBUST AND IT SEARCHES ALL INTERNET SITES, PUBLISHED WORKS, STUDENT PAPERS***
- Discuss the strengths and weaknesses of the Myer-Briggs Type Indicator and the Big Five personality model. Discuss the times or situations when each framework is appropriate and not appropriate.
- Discuss in detail the outcomes of job satisfaction and how an organization ensure that these outcomes can occur. Is it possible in all industries?
CASE STUDY 1: THE DEMOTIVATION OF CEO PAY
1-1. What do you think is the ideal ratio? What is your rationale in determining that ratio? Why might the ideal vary from country to country?
1-2. How does the executive compensation issue relate to equity theory? How should we determine what is a “fair” level of pay for top executives?
1-3. The study found that participants thought ¬performance should be essential or very ¬important in deciding pay. What might be the positive motivational consequences for average ¬employees if CEO pay is tied to performance?
Quick: How much did your CEO get paid this year? What did any CEO get paid? You may not know the exact amounts, but you probably think the answer is, “Too much money.” According to research from 40 countries that probed the thoughts of CEOs, cabinet ministers, and unskilled employees, we all think leaders should be paid less. Beyond that, we are clueless.
Where we err can be calculated by an organization’s pay ratio, or the ratio between CEO pay and average worker pay. In the United States, for example, the ¬average S&P 500 CEO is paid 354 times what the lowest-ranking employee makes, for a ratio of 354:1 (eight times greater than in the 1950s). Yet, U.S. participants in the study ¬estimated that the ratio between CEOs and unskilled workers was only 30:1! Americans are not alone in making this gross underestimate: Participants from Germany, for instance, estimated a ratio of around 18:1 when the actual is closer to 151:1.
In general, people worldwide are unhappy with—and demotivated by—their perception of inequity, even when their estimates of the ratios are far below the reality. Taking the German example further, the ideal ratio of CEO pay to unskilled workers as judged by study participants was around 7:1. To put it all together, then, people think the ratio should be 7:1, believe it is 18:1, and don’t realize it is actually 151:1. For all the countries worldwide in the study, the estimated ratios were above the ideal ratios, meaning participants universally thought CEOs are overpaid.
How does this affect the average worker’s motivation? It appears that the less a person earns, the less satisfied the person is with the pay gap. Yet virtually everyone in the study wanted greater equality. The ideal ratio, they indicated, should be between 5:1 and 4:1, whereas they thought it was between 10:1 and 8:1. They believed skilled employees should earn more money than unskilled individuals, but that the gap between them should be smaller.
No one in the United States would likely think the 354:1 ratio is going to dip to the ideal of 7:1 soon, although some changes in that direction have been suggested. Other countries have tried to be more progressive. The Social Democratic Party in Switzerland proposed a ceiling for the ratio of 12:1, but putting a cap into law was considered too extreme by voters. No countries have yet been able to successfully impose a maximum ratio.
Therefore, the job of restoring justice perceptions has fallen to CEOs themselves. Many CEOs, such as Mark Zuckerberg of Facebook and Larry Page of Google, have taken $1 annual salaries, though they still earn ¬substantial compensation by exercising their stock ¬options. In one extreme recent example, Gravity CEO Dan Price cut his salary by $1 million to $70,000, ¬using the money to give significant raises to the payment ¬processing firm’s employees. Price said he expects to “see more of this.” In addition, shareholders of some companies, such as Verizon, are playing a greater role in setting CEO -compensation by reducing awards when the company underperforms.
CASE STUDY 2: THE SLEEPINESS EPIDEMIC
2-1. Should organizations be concerned about the sleepiness of their employees? What factors influencing sleep might be more or less under the control of an organization?
2-2. How might sleep deprivation demonstrate aspects of expectancy theory? How might the incorporation of “nap rooms” for sleep-deprived employees demonstrate aspects of equity theory?
2-3. If you were a manager who noticed your employees were sleep-deprived, what steps might you take to help them? What theories of motivation could you use to help them?
Ronit Rogosziniski, a financial planner, loses sleep because of her 5 a.m. wake-up call, so she sneaks to her car for a quick lunchtime snooze each day. She is not alone, as evidenced by the comments on Wall Street Oasis, a website frequented by investment bankers who blog about their travails. Should the legions of secret nappers be blessed or cursed by their organizations for this behavior? Research suggests they should be encouraged.
Sleep is a problem, or rather, lack of quality “zzz’s” is a costly organizational problem we can no longer overlook. Sleepiness, a technical term in this case that denotes a true physiological pressure for sleep, lowers performance and increases accidents, injuries, and unethical behavior. One survey found that 29 percent of respondents slept on the job, 12 percent were late to work, 4 percent left work early, and 2 percent did not go to work due to sleepiness. While sleepiness affects 33 percent of the U.S. population, the clinical extreme, excessive daytime sleepiness (EDS), is fully debilitating to an additional 11 percent.
In a vicious cycle where the effects of sleepiness affect the organization, which leads to longer work hours and thus more sleepiness, the reason for the sleepiness epidemic seems to be the modern workplace. Full-time employees have been getting less sleep over the past 30 years as a direct result of longer work days, putting them more at risk for sleep disorders. Sleepiness directly decreases attention span, memory, information processing, affect, and emotion regulation capabilities. Research on sleep deprivation has found that tired workers experience higher levels of back pain, heart disease, depression, work withdrawal, and job dissatisfaction. All these outcomes have significant ¬implications for organizational effectiveness and costs. Sleepiness may account for $14 billion of medical expenses, up to $69 billion for auto accidents, and up to $24 billion in workplace accidents in the United States annually.
Although being around bright light and loud sounds, standing, eating, and practicing good posture can reduce sleepiness temporarily, there is only one lasting cure: more hours of good-quality sleep. Some companies are encouraging napping at work as a solution to the problem, and one survey of 600 companies revealed that 6 percent had dedicated nap rooms. In addition, in a poll of 1,508 workers conducted by the National Sleep Foundation, 34 percent said they were allowed to nap at work. These policies may be a good start, but they are only Band-Aid approaches since more and better sleep is what’s needed. Researchers suggest that organizations should consider flexible working hours and greater autonomy to allow employees to maximize their productive waking hours. Given the high costs of sleepiness, it’s time for them to take the problem much more seriously.
CASE 3: HOW BARBIE LOST THE WAR AGAINST THE BRATZ DOLL
3-1 Why were Mattel’s managers so slow to change their decision making about the design of the Barbie doll over time? What kinds of cognitive errors or biases may have contributed to this?
3-2 What kinds of factors affected the way managers at both Mattel and MGA made their decisions over time during their battle over control for the Bratz dolls?
The rapid pace at which the world is changing is forcing strategic managers at all kinds of companies to speed up their decision making; otherwise they get left behind by agile competitors who respond faster to changing customer fads and fashions. Nowhere is this truer than in the global toy industry, in which vicious combat rages in the doll business, worth over $10 billion a year in sales. The largest global toy company, Mattel, has earned tens of billions of dollars from the world’s best-selling doll, Barbie, since it introduced her over 50 years ago.83 Mothers who played with the original dolls bought them for their daughters, and granddaughters, and Barbie became an American icon. However, Barbie’s advantage as best-selling global doll led Mattel’s managers to make major strategic errors in the 2000s.
Barbie and all Barbie accessories have accounted for about 50% of Mattel’s toy sales since the 1990s, so protecting this star product was crucial. The Barbie doll was created in the 1960s when most women were homemakers; her voluptuous shape was a response to a dated view of what the “ideal” woman should look like.
Barbie’s continuing success, however, led Mattel’s CEO Bob Eckert and his top managers to underestimate how much the world had altered. Changing cultural views about the role of girls, women, sex, marriage, and women working in the last decades shifted the tastes of doll buyers. But Mattel’s managers continued to bet on Barbie’s eternal appeal and collectively bought into an “If it’s not broken don’t fix it” approach. In fact, given that Barbie was the best-selling doll, they thought it might be dangerous to change her appearance; customers might not like the product development changes and stop buying the doll. Mattel’s top managers decided not to rock the boat; they left the brand and business model unchanged and focused their efforts on developing new digital toys.
As a result, Mattel was unprepared when a challenge came along in the form of a new kind of doll, the Bratz doll, introduced by MGA Entertainment. Many competitors to Barbie had emerged over the years because the doll business is so profitable, but no other doll had matched Barbie’s appeal to young girls (or their mothers). The marketers and designers behind the Bratz line of dolls had spent a lot of time to discover what the new generation of girls, especially those aged 7–11, wanted from a doll, however. It turned out that the Bratz dolls they designed met the desires of these girls. Bratz dolls have larger heads and oversized eyes, wear lots of makeup and short dresses, and are multicultural to give each doll “personality and attitude.”84 The dolls were designed to appeal to a new generation of girls brought up in a fast-changing fashion, music, and television market. The Bratz dolls met the untapped needs of “tween” girls, and the new line took off. MGA quickly licensed the rights to make and sell the dolls to toy companies overseas, and Bratz became a serious competitor to Barbie.
Mattel was in trouble. Its strategic managers had to change its business model and strategies and bring Barbie up to date; Mattel’s designers must have been wishing they had been adventurous and made more radical changes earlier when they did not need to change. However, they decided to change Barbie’s extreme shape; they killed off her old-time boyfriend Ken and replaced him with Blaine, an Aussie surfer.85 They also recognized they had waited much too long to introduce new lines of dolls to meet the changed needs of tweens and older girls in the 2000s. They rushed out the “My Scene” and “Flava” lines of dolls that were obvious imitations of Bratz dolls, but they both flopped. And the decisions they made to change Barbie—her figure, looks, clothing, and boyfriends—came too late, and sales of Barbie dolls continued to fall.
By 2006, sales of the Barbie collection had dropped by 30%, which was critical to Mattel because its profits and stock price hinged on Barbie’s success—and they both plunged. Analysts argued that Mattel had not paid enough attention to its customers’ changing needs or moved quickly to introduce the new and improved products necessary to keep a company on top of its market. Mattel brought back Ken, but then in a sign of its mounting problems, Mattel’s lawyers sued MGA Entertainment, arguing that the Bratz dolls’ copyright rightfully belonged to them. Mattel complained that the head designer of Bratz was a Mattel employee when he made the initial drawings for the dolls and that Mattel had applied for copyright protection on a number of early Bratz drawings. Mattel claimed that MGA hired key Mattel employees away from the firm and these employees stole sensitive sales information and transferred it to MGA.
In 2008 a judge ruled in Mattel’s favor and ordered MGA to stop using the Bratz name, and a jury awarded Mattel $100 million in damages. After an appeal, in 2009 a federal judge upheld the verdict and ruled that the Bratz doll is Mattel property and that MGA could sell the doll only until the end of 2009. In 2010 the companies were locked in a bitter dispute: Mattel wanted the rights to produce and sell the Bratz doll line, but MGA’s founder was still trying to protect the profits made from the Bratz dolls’ success. Meanwhile stores stopped selling the Bratz doll, Mattel revitalized its line of Barbie dolls, and its CEO exultantly declared that “Barbie is back” as increased doll sales helped raise the company’s profits by 86% in the spring of 2010.86
Imagine then, how Mattel’s managers reacted to the decision of the federal appeals court in July 2010 when it threw out the previous court decision and ruled that MGA Entertainment did have the right to make and sell the Bratz doll because their looks and image were not subject to existing copyright law! The rights to the Bratz doll were given back to MGA, and MGA is currently suing Mattel for major damages that have cost it hundreds of millions in profits.