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Table 6.

Tips for Successful Leadership
1. Walk the talk. Make your actions consistent with your words.
2. Be truthful, fair, and respectful, and honor confidences.
3. Demonstrate a vision and values worth following.
4. Co-workers make mistakes. So do you. Admit to them and learn from them.
5. Be open to what others have to offer. Ask questions and take time to listen to co-workers.
6. Know your weaknesses, so you can build a team to make up for them.
7. All work and no fun can reduce productivity.
8. Help workers do their best by encouraging them to grow and learn.
9. Never publicly blame anyone but yourself.
10. Stay positive and expect it of your people. Negativity leads downhill fast.
11. Involve people in decisions especially those regarding change.
12. Be open to new ways of doing things. Embrace changeit's inevitable.
13. Recognize and celebrate individual and team successes, both big and not so big.
14. Embrace and benefit from diversity.
15. Empower your workers. They will have greater self-respect, responsibility, and accountability.
16. Take your work, but not yourself, seriously.

William M. Pride, Robert J. Hughes, Jack R. Kapoor

9a National Labor Relations Act and LaborManagement Relations Act
These laws are concerned with dealings between business firms and labor unions. This general area is, in concept, a part of HRM. However, because of its importance, it is
often treated as a separate set of activities. We discuss both labormanagement relations and these two acts in detail in chap 11

National Labor
Relations Act (1935)
Established a collective-bargaining process in labormanagement relations as well as the National Labor Relations Board (NLRB).
Fair Labor Standards
Act (1938)
Established a minimum wage and an overtime pay rate for employees working more than 40 hours per week.
Relations Act (1947)
Provides a balance between union power and management power; also known as the TaftHartley Act.
Equal Pay Act (1963) Specifies that men and women who do equal jobs must be paid the same wage.
Title VII of the Civil
Rights Act (1964)
Prohibits discrimination in employment practices based on sex, race, color, religion, or national origin.
Age Discrimination in
Employment Act
(1967 1986)
Prohibits personnel practices that discriminate against people aged 40 years and older; the 1986 amendment eliminated a mandatory retirement
Occupational Safety
and Health Act (1970)
Regulates the degree to which employees can be exposed to hazardous substances and specifies the safety equipment that the employer must

Retirement Income
Security Act (1974)
Regulates company retirement programs and provides a federal insurance program for retirement plans that go bankrupt.
Worker Adjustment
and Retraining
Notification (WARN)
Act (1988)
Requires employers to give employees 60 days notice regarding plant closure or layoff of 50 or more employees
Americans with
Disabilities Act (1990)
Prohibits discrimination against qualified individuals with disabilities in all employment practices, including job-application procedures, hiring,
firing, advancement, compensation, training, and other terms, conditions, and privileges of employment
Civil Rights Act (1991) Facilitates employees suing employers for sexual discrimination and collecting punitive damages.
Family and Medical
Leave Act (1993)
Requires an organization with 50 or more employees to provide up to 12 weeks of leave without pay on the birth (or adoption) of an employee's
child or if an employee or his or her spouse, child, or parent is seriously ill.
Affordable Care Act
Requires an organization with 50 or more employees to make health insurance available to employees or pay an assessment and gives employees
the right to buy health insurance from another provider if an organization's health insurance is too expensive.

William M. Pride, Robert J. Hughes, Jack R. Kapoor
11th Edition
About Business
The Environment of Business

1. Exploring the World of Business and Economics
2. Being Ethical and Socially Responsible
3. Exploring Global Business
Business Ownership and Entrepreneurship
4. Choosing a Form of Business Ownership
5. Small Business, Entrepreneurship, and Franchises
Management and Organization
6. Understanding the Management Process
7. Creating a Flexible Organization
8. Producing Quality Goods and Services
Human Resources
9. Attracting and Retaining the Best Employees
10. Motivating and Satisfying Employees and Teams
11. Enhancing UnionManagement Relations
12. Building Customer Relationships Through Effective Marketing
13. Creating and Pricing Products that Satisfy Customers
14. Wholesaling, Retailing, and Physical Distribution
15. Developing Integrated Marketing Communications
Information for Business Strategy and Decision Making
16. Understanding Information and e-Business
17. Using Accounting Information
Finance and Investment

18. Understanding Money, Banking, and Credit
19. Mastering Financial Management
20. Understanding Personal Finances and Investments

Chapter 9-10a Summary
1 Describe the major components of human resources management.
Human resources management (HRM) is the set of activities involved in acquiring, maintaining, and developing an organization's human
resources. Responsibility for HRM is shared by specialized staff and line managers. HRM activities include human resources planning, job analysis,
recruitment, selection, orientation, compensation, benefits, training and development, and performance appraisal.
2 Identify the steps in human resources planning.
Human resources planning consists of forecasting the human resources that a firm will need and those that it will have available and then planning
a course of action to match supply with demand. Layoffs, attrition, early retirement, and (as a last resort) firing are ways to reduce the size of the
workforce. Supply is increased through hiring.
3 Describe cultural diversity and understand some of the challenges and opportunities associated
with it.
Cultural diversity refers to the differences among people in a workforce owing to race, ethnicity, and gender. With an increasing number of women,
minorities, and immigrants entering the U.S. workforce, management is faced with both challenges and competitive advantages. Some
organizations are implementing diversity-related training programs and working to make the most of cultural diversity. With proper guidance and
management, a culturally diverse organization can prove beneficial to all involved.

4 Explain the objectives and uses of job analysis.
Job analysis provides a job description and a job specification for each position within a firm. A job description is a list of the elements that make
up a particular job. A job specification is a list of qualifications required to perform a particular job. Job analysis is used in evaluation and in the
determination of compensation levels and serves as the basis for recruiting and selecting new employees.
5 Describe the processes of recruiting, employee selection, and orientation.
Recruiting is the process of attracting qualified job applicants. Candidates for open positions may be recruited from within or outside a firm. In the
selection process, information about candidates is obtained from applications, rsums, tests, interviews, references, or assessment centers. This
information then is used to select the most appropriate candidate for the job. Newly hired employees will then go through a formal or an informal
orientation program to acquaint themselves with the firm.
6 Discuss the primary elements of employee compensation and benefits.
Compensation is the payment employees receive in return for their labor. In developing a system for paying employees, management must decide
on the firm's general wage level (relative to other firms), the wage structure within the firm, and individual wages. Wage surveys and job analyses
are useful in making these decisions. Employees may be paid hourly wages, salaries, or commissions. They also may receive incentive payments,
lump-sum salary increases, and profit-sharing payments. Employee benefits, which are nonmonetary rewards to employees, add about 28 percent
to the cost of compensation.
7 Explain the purposes and techniques of employee training and development.
Employee-training and management-development programs enhance the ability of employees to contribute to a firm. When developing a training
program, the company should analyze training needs and then select training methods. Because training is expensive, an organization should
periodically evaluate the effectiveness of its training programs.
8 Discuss performance appraisal techniques and performance feedback.
Performance appraisal, or evaluation, is used to provide employees with performance feedback, to serve as a basis for distributing rewards, and to

monitor selection and training activities. Both objective and judgmental appraisal techniques are used. Their results are communicated to
employees through three performance feedback approaches: tell-and-sell, tell-and-listen, and problem solving.
9 Outline the major legislation affecting human resources management.
A number of laws have been passed that affect HRM practices and that protect the rights and safety of employees. Some of these are the National
Labor Relations Act of 1935, the LaborManagement Relations Act of 1947, the Fair Labor Standards Act of 1938, the Equal Pay Act of 1963, Title
VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Acts of 1967 and 1986, the Occupational Safety and Health Act of 1970,
the Employment Retirement Income Security Act of 1974, the Worker Adjustment and Retraining Notification Act of 1988, the Americans with
Disabilities Act of 1990, the Civil Rights Act of 1991, and the Family and Medical Leave Act of 1993.

William M. Pride, Robert J. Hughes, Jack R. Kapoor
11th Edition
9-1a HRM Activities
Each of the three phases of HRMacquiring, maintaining, and developing human resourcesconsists of a number of related activities. Acquisition,
for example, includes planning, as well as the various activities that lead to hiring new personnel. Altogether this phase of HRM includes five
separate activities:
Human resources planning determining the firm's future human resources needs
Job analysis determining the exact nature of the positions
Recruiting attracting people to apply for positions
Selection choosing and hiring the most qualified applicants
Orientation acquainting new employees with the firm

Maintaining human resources consists primarily of encouraging employees to remain with the firm and to work effectively by using a variety of
HRM programs, including the following:
Employee relations increasing employee job satisfaction through satisfaction surveys, employee communication programs, exit
interviews, and fair treatment
Compensation rewarding employee effort through monetary payments
Benefits providing rewards to ensure employee well-being
The development phase of HRM is concerned with improving employees skills and expanding their capabilities. The two important activities
within this phase are:
Training and development teaching employees new skills, new jobs, and more effective ways of doing their present jobs
Performance appraisal assessing employees current and potential performance levels
These activities are discussed in more detail shortly, when we have completed this overview of HRM.

12-1a Chapter Overview
To be successful in any business, youll need to build long-term relationships with your customers. Government agencies have to treat their
constituents well, and not-for-profit organizations have to know how to satisfy the people theyre helping as well as the people who donate money
or volunteer their time. Studying this chapter will give you a head start in effective marketing.
Youre a customer, so you know first-hand how important it is for companies to satisfy customer needs. A cool product or an entertaining ad just
isnt enough in todays competitive global marketplace. You have to be satisfiedand if youre not, you (and other customers) can vote with your

wallet and buy elsewhere. Thats why successful marketing must begin and end with the customer. This is the first of four chapters that look at
marketing and how to build relationships by understanding and satisfying customers needs.
Understand the meaning of marketing and the importance of management of customer
Marketing has a specific definition in the business world. It means the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Notice that customers arent the only
group mentioned in this definition. Clientscustomers of professional firmsare also involved, as are partners (business partners, for example),
and our larger society. In other words, marketing means a win-win-win for everyone, not just profit for the company. Relationship marketing, a
type of marketing, involves building long-term bonds between buyers and sellers that satisfy both parties. For customer relationship management,
companies use information about their customers to create strategies for starting and maintaining relationships with customers who are desirable
because of profitability (or for other reasons). When you buy an iPhone or iPad from Apple and give the company your e-mail address, for example,
it will send you notes about new products geared to your needs and interests. Staying in touch like thismanaging the relationship with you, the
Apple customermay induce you to buy again and therefore reinforce your loyalty to the company and its products.
Explain how marketing adds value by creating several forms of utility.
You wont buy an iPhone from Apple or a pizza from Pizza Hut unless you see the value of making that purchase. What value does marketing add?
Actually, it can add value by providing four kinds of utility. Form utility is when a company takes raw materials (plastic, memory chips) and turns
them into finished products (iPads). You can use the product in its finished form, but the raw materials dont have the same value to you. Place
utility means making a product available where customers want to buy it, such as in a nearby store rather than at a factory many miles away. Time
utility means making the product available when customers want to buy. For example, youre more likely to buy a costume at Halloween time than
on the first day of spring. Finally, possession utility means giving you ownership of your product, such as by giving you a receipt after you pay for a
pair of sneakers in a local store.
Trace the development of the marketing concept and understand how it is implemented.
Just as the business world has changed over the years, so too has the philosophy of marketing. Today, the marketing concept is the philosophy that

a firm should provide goods and services that satisfy customers needs, via coordinated activities that let the firm achieve its goals (such as
profitability). This wasnt always the accepted approach to marketing. At the start of the Industrial Revolution, marketing meant producing goods.
From the 1920s to the 1950s, it meant selling goods. In the past 60 years, however, the marketing conceptbased on satisfying customer needs
has become accepted by the most successful companies in every industry, from Apple (iPads) to Zynga (Farmville).
Understand what markets are and how they are classified.
Think of a flea market or a farmers market, and youll have some idea of what the word market means in the business world. A market consists of
people with needs (for food or for clothing), the ability to buy (cash or credit), and the willingness and authority to purchase (theyre ready to buy
and they dont need anybody elses approval to do it). Consumer markets are, of course, made up of individuals or household members buying for
themselves or their families and not to make a profit. Business-to-business markets (also known as industrial markets) are made up of businesses
or other organizations that buy products for use in making different products to resell to other customers or for use in their daily operations.
Identify the four elements of the marketing mix and be aware of their importance in developing a
marketing strategy.
A product or an advertisement is only a tiny piece of the marketing puzzle. All the pieces are part of the marketing strategy, the plan that allows a
company creates to make the best use of its resources (money, people) to meet its objectives (such as making a profit). When Nike or any other
company prepares a marketing strategy, it first chooses a target market (the individuals or companies whose needs it will seek to satisfy). Then it
comes up with a marketing mix, the combination of product, price, distribution, and promotion it uses to satisfy that target market. The product
element of the marketing mix is the actual good or service, such as a Nike sneaker or a cup of Starbucks coffee. Pricing involves setting a price and
any discounts to be offered. Distribution involves not only transporting and storing products but also deciding which retailers and wholesalers will
sell the product. Promotion is the way companies provide information to customers, such as through advertising or personal selling.
Explain how the marketing environment affects strategic market planning.
When McDonalds introduces a new type of burger and Samsung begins selling a new model of television, they have to think about six outside
forces in the marketing environment that might help or hurt their efforts. Economic forces affect customers ability to pay for a television or
influence them to eat more often at McDonalds rather than going to a more expensive restaurant. Sociocultural forces are attitudes, customs, and

lifestyles that affect customers in a particular society, such as the perception that a certain brand is more desirable than its competitors.
Competitive forces are clearly important, because McDonalds has no control over what rivals such as Wendys do. Nor does McDonalds have
control over the legal and regulatory forces that affect marketing, such as laws that require calorie counts to be posted on menus. Technological
forces can create new marketing possibilities or make products obsolete almost overnight, the way DVDs took over from older VHS tapes. Political
forces such as changes in elected officials can also influence marketing decisions.
Understand the major components of a marketing plan.
Every business has to have a marketing plan, a written document explaining the resources, objectives, strategy, implementation, and control to be
used to marketing its good or service. Why? Because the plan is used to communicate internally, so every employee knows what will happen. It also
shows who will be responsible for what element of marketing and how resources such as money and people will be used to achieve objectives (such
as making a profit or getting a brand more recognition). A marketing plan helps managers track the marketing actions they take and the results of
their actions. Because the marketing environment can change at any time, managers have to be ready to update the marketing plan when necessary.
Describe how market measurement and sales forecasting are used.
Companies such as Walt Disney need to be able to measure the sales potential of each market so they can make informed decisions (about opening
a new theme park, for example). A sales forecast is an estimate of how much of a particular product will be sold during a certain period, assuming a
specific level of marketing support. Sales forecasting helps businesses determine the amount of raw materials to order before production, how
many employees to have on hand for production and sales, and make other decisions that will lead to sales and profits.
Distinguish between a marketing information system and marketing research.
How will you know if your marketing plan worked? Youll need both a marketing information system and marketing research. A marketing
information system is a system for managing marketing data gathered on an ongoing basis from inside and outside the organization. Nike, for
example, needs this type of system to track how many of each type of shoe it produces and how well each is selling at stores around the world.
Marketing research is the process of systematically collecting, recording, and analyzing data about a particular marketing problem. Unlike a
marketing information system, marketing research isnt concerned with ongoing measurements but with gathering data to answer specific
questions that come up, such as whether to introduce a new product.

Identify the major steps in the consumer buying decision process and the sets of factors that may
influence this process.
Think about the last time you made a big purchase. Did you talk with friends, search the Internet, or do anything else to learn more about that type
of product before you made your decision? Buying behavior describes the decisions and actions of people who buy and use productspeople like
you. When you buy for your own personal or household use, your behavior is consumer buying behavior. Business buying behavior refers to buying
by producers, resellers (such as retailers), governmental units, and institutions (hospitals, for example). There are five steps in the consumer buying
decision process. First, you have to recognize that a problem exists. Lets say your cell phone broke and you realize youll have to buy a new one. The
second step is to search for information, by talking with people, researching phones and features, or visiting stores. The third step is to evaluate the
alternatives youve uncoveredshould you buy an iPhone, for example, or a BlackBerry or a Droid? Next, you actually make the purchase. Finally,
you evaluate your purchase. During this entire process, you may be influenced by situational factors like a stores displays, psychological influences
such as your personality, and social influences such as friends and family.

12-4 Markets and Their Classification

Understand what markets are and how they are classified.

A market is a group of individuals or organizations, or both, that need products in a given category and that have the ability, willingness, and
authority to purchase such products. The people or organizations must want the product. They must be able to purchase the product by exchanging
money, goods, or services for it. They must be willing to use their buying power. Finally, they must be socially and legally authorized to purchase the
Markets are broadly classified as consumer or business-to-business markets. These classifications are based on the characteristics of the individuals
and organizations within each market. Because marketing efforts vary depending on the intended market, marketers should understand the general
characteristics of these two groups.
Consumer markets consist of purchasers and/or household members who intend to consume or benefit from the purchased products and who do
not buy products to make profits. Business-to-business markets , also called industrial markets , are grouped broadly into producer, reseller,
governmental, and institutional categories. These markets purchase specific kinds of products for use in making other products for resale or for
day-to-day operations. Producer markets consist of individuals and business organizations that buy certain products to use in the manufacture of
other products. Reseller markets consist of intermediaries such as wholesalers and retailers, who buy finished products and sell them for a profit.
Governmental markets consist of federal, state, county, and local governments. They buy goods and services to maintain internal operations and to
provide citizens with such products as highways, education, water, energy, and national defense. Governmental purchases total billions of dollars
each year. Institutional markets include churches, not-for-profit private schools and hospitals, civic clubs, fraternities and sororities, charitable
organizations, and foundations. Their goals are different from such typical business goals as profit, market share, or return on investment.
Segmentation based on gender. This Maybelline product is aimed specifically at women.

AP Images/PRNewsFoto/Maybelline New York

Developing Marketing Strategies
A marketing strategy marketing strategy a plan that will enable an organization to make the best use of its resources and
advantages to meet its objectives
is a plan that will enable an organization to make the best use of its resources and advantages to meet its objectives. A marketing strategy consists of
(1) the selection and analysis of a target market and (2) the creation and maintenance of an appropriate marketing mix marketing mix a
combination of product, price, distribution, and promotion developed to satisfy a particular target market
, a combination of product, price, distribution, and promotion developed to satisfy a particular target market.
business firm controls four important elements of marketing that it combines in a way that reaches the firm's target market. These are the product
itself, the price of the product, the means chosen for its distribution , and the promotion of the product. When combined, these four elements form
a marketing mix (see Figure 12.3 ). Nissan, for example, recently released the LEAF and developed a marketing mix that included an affordable,
zero-emission electric vehicle with seating for five; a price starting at just over $25,000; distribution through straightforward online reservations
and orders; and promotion through an extensive and interactive global tour, which included 63 stops in the United States.
Figure 12.3 The Marketing Mix and the Marketing Environment
The marketing mix consists of elements that the firm controlsproduct, price, distribution, and promotion. The firm generally has no control over
forces in the marketing environment.

Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 16th ed. (Mason, OH: South-Western/Cengage Learning, 2012).
Adapted with permission.
A firm can vary its marketing mix by changing any one or more of these ingredients. Thus, a firm may use one marketing mix to reach one target
market and a second, somewhat different, marketing mix to reach another target market. For example, most automakers produce several different
types and models of vehicles and aim them at different market segments based on the potential customers' age, income, and other factors.
The product ingredient of the marketing mix includes decisions about the product's design, brand name, packaging, warranties, and the like. When
McDonald's decides on brand names, package designs, sizes of orders, flavors of sauces, and recipes, these choices are all part of the product
The pricing ingredient is concerned with both base prices and discounts of various kinds. Pricing decisions are intended to achieve particular goals,

such as to maximize profit or even to make room for new models. The rebates offered by automobile manufacturers are a pricing strategy developed
to boost low auto sales. Product and pricing are discussed in detail in Chapter 13 .
Ethical Challenges & Successful Solutions
Limits to Online Privacy?
Can online targeting go too far? When consumers do an online search or download a digital coupon, marketers can follow their electronic
movements. For example, Jackson Hewitt recently offered digital coupons for its tax preparation services. Each coupon's bar code was unique,
allowing the company's ad agency to track an individual consumer's search history leading up to the download.
The purpose of tracking online behavior is to do a better job of targeting communications and tailoring offers to customers' needs and interests.
However, consumers are not always aware of exactly what information is being gathered and how it will be used. This raises questions about the
limits of online privacy.
Imagine that you were walking through a shopping mall, and there was someone that was walking behind you. taking notes on everywhere you
went, says the head of the Federal Trade Commission. Moreover, the data would be available to every shop or anyone who was interested, for a
small fee. Privacy advocates also worry about identity theft and about the possibility of online redlining, marketers restricting access to products
based on what consumers do or say on the Internet. As experts debate the limits of online privacy, regulators are formulating new privacy
protections and industry groups are developing new ways for consumers to opt out of tracking systems if they choose.
Sources: Wendy Davis, Report: Marketers Limit Behavioral Targeting Due to Privacy Worries, MediaPost, May 2, 2010,; Bob Garfield, FTC Privacy Review Could Mean Trouble for Online Marketing, Advertising Age, April 19, 2010,; Stephanie Clifford, Web Coupons Know Lots About You, and They Tell, New York Times, April 16, 2010,; Laurie Burkitt, Ad Industry to Regulators: We Can Take Care of Ourselves, Forbes, April 14, 2010,; Steve Lohr, How Privacy Vanishes Online, New York Times, March 16, 2010,
The distribution ingredient involves not only transportation and storage but also the selection of intermediaries. How many levels of intermediaries
should be used in the distribution of a particular product? Should the product be distributed as widely as possible or should distribution be

restricted to a few specialized outlets in each area? Video rental retailers have had to make numerous decisions regarding distribution. Currently,
vending machines like Redbox make up 19 percent of the video rental market, mail rental services like Netflix have 36 percent, and brick-and-
mortar stores like Blockbuster own 45 percent. Fifteen years ago, almost all videos were distributed through brick-and-mortar stores. Distribution
decisions and activities are discussed in more detail in Chapter 14 .
The promotion ingredient focuses on providing information to target markets. The major forms of promotion are advertising, personal selling, sales
promotion, and public relations. These four forms are discussed in Chapter 15 .
These ingredients of the marketing mix are controllable elements. A firm can vary each of them to suit its organizational goals, marketing goals, and
target markets. As we extend our discussion of marketing strategy, we will see that the marketing environment includes a number of uncontrollable
Nissan Announces Nissan LEAF Purchase Process; Gives First Glimpse at Marketing Campaign, Nissan, news release, February 11, 2010 , .
Brooks Barnes , Movie Studios See a Threat in Growth of Redbox, The New York Times , September 6, 2009 .

Demographic Psychographic Geographic Behavioristic
Age Personality attributes Region Volume usage
Gender Motives Urban, suburban, rural End use
Race Lifestyles Market density Benefit expectations
Ethnicity Climate Brand loyalty
Income Terrain Price sensitivity
Education City size
Occupation County size
Family size State size
Family life cycle
Social class
Nissan Announces U.S. Pricing on 2010 Cube, PR Newswire , January 28, 2010 .
Paula Andruss , New OfficeMax Catalog Courts Women Consumers, Deliver Magazine , June 29, 2009 .
Michael Liedtke , Newspaper Circulation May Be Worse Than It Looks, The Seattle Times , November 22, 2009 .


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