policies.

For example, in 1991 Deloitte & Touche established a task force on the
Retention and Advancement of Women, to identify why more women than men were
leaving the company (this problem is very common in most large organisations).
Through the use of formal career planning, informal monitoring systems to make sure
women were accessing the best assignments, and flexible work arrangements the level
of turnover was reduced. The turnover rate for female senior managers dropped from
26 per cent in 1992 to 15 per cent in 1995, the number of women partners increased
from 69 to 131 and women in key leadership positions increased from 14 to 34
(http://www.bsr.org/resources/). Such results demonstrate the power of organisation-wide
policies which are supported by management. Here, in Australia, the new President of
the Institute of Chartered Accountants, Jan West, has described the scarcity of senior
women accountants as a problem requiring remedies. She says, ‘We have had firms
recruiting 50 per cent of women graduates for so many years that the pipeline effect
should now be in evidence at the top. It isn’t.’ (Thomas, 2000, p 132). Part of the
problem seems to be that women are unwilling to forfeit ‘having a life’ to be
promoted. There have also been strong criticisms of the male dominated culture in
accounting and the broader business community (Thomas, 2000, p 132).

What do you think? Are there workplace policies available to companies

which would enable more women to progress to senior positions?

Laughter—the best medicine

With the comedy festival in town (in Melbourne during April) Fiona Hudson (2001, p
20) reported on ‘the value of humour in the workplace’, in the Herald Sun.
Suggestions such as beginning meetings with jokes and funny stories, rather than
apologies, offer a fun alternative to the ubiquitous ‘boring meeting’. Laughter
therapist Helene Grover argues that colleagues will always appreciate a lighthearted
person in the workplace and points out that to use humour well, ‘You have to be
yourself and use humour that is suited to your personality.’(Hudson, 2001, p 20).
Humour can also be used to empower women who are operating in a ‘male
playground’. Humour encourages a sense of intimacy among people, it puts people at
ease and defuses tension.

Do you think it’s a good idea for workgroups to socialise together?

Work colleagues may visit comedy clubs together or share events such
as Easter egg hunts in the workplace. Do you think these types of
activities build employee commitment?

There are many ways to humanise the workplace and organisations are under
increasing pressure to do so. Traditional attitudes and norms are being eroded by the
expectations of a growing number of sophisticated employees who want to be able to
work hard, get enjoyment from the intrinsic worth of their work and be themselves at
the same time.

Further Reading:

Bartol, K, Martin, D, Tein, M and Matthews, G, 2001, Management a Pacific Rim

Focus, McGraw-Hill, Sydney, Chapter 4.
Hale, B, 1999, ‘Ethics: Do good, or else, the public warns’, Business Review Weekly,
Vol 21, No 43, Nov 5.

Houston, M, 2001, ‘When Taking a Moral Stance Pays’, The Age, 10 March,
Employment p 1.

Hudson, Fiona, 2001, ‘Laugh all the Way to the Top’, Herald Sun, Friday March 30,
p 20.

Hughes, J, 2001, ‘The Green Battler’, Eureka Street, Vol 11, No 3, April, pp 22–26.

Thomas, T, 2000, ‘Balance on the Agenda’, Business Review Weekly, Vol 22, No 46,
Nov 24, p 132–133.

Web sites:

http://www.bsr.org/resourcecentre/
Provides examples of social responsibility in business

http://www.businessresponsibility.org
Home page of the Global Business Responsibility Resource Center with many links to
other organisations

http://www.green.net.au/boycott/north1.htm
Web site documenting activities of North Ltd—an opposing view

http//:www.thebodyshop.com.au
The Body Shop home page

http://www.wmc.com/acrobat/commentv2000.pdf
WMC (Western Mining) Environment Report 2000

Dr Stephanie Miller
Senior Lecturer, School of Management, Victoria University, Australia.
Workplace Bullying
Key words: harassment, stress, Equal Employment Opportunity, power, culture

The recent two-hour stand down of military forces in Australia to address the issue of
bullying in the workforce is an example of top management attempting to alter
behaviour. Despite Admiral Chris Barrie’s attempts to focus upon and stamp out
bullying behaviour, many incidents of bullying continue to be reported. The military’s
relatively closed and hierarchical environment provides a perfect situation for
bullying to develop. The chain of command is such that no private would dare to by-
pass his or her immediate superior to complain of harassment. By speaking directly to
all of the forces at all levels, Admiral Barrie hopes to cut through the chain of
command and alter the behaviour of people in the forces by directly raising the issue
of bullying and emphasising the negative outcomes of bullying behaviour.

Robert Garran—writing in The Australian (6 February 2001, p 3)—argues that it is

not always easy to define what sort of behaviour is not acceptable. The boundaries
between acceptable and not acceptable can be grey. Lieutenant Commander Raquel
Randall, who has 10 years’ service with the navy, believes that:

‘Talking like this does open the issue, so that individuals can have a voice.
They know they can bring a problem to the attention of their seniors and it will
be taken seriously.’(The Australian, 6 February 2001, p 3).

In the civilian workforce bullying is a form of harassment that is now recognised as a

management problem for employers. Employees who suffer bullying experience
stress and suffering in a manner very similar to schoolyard bullying. Male bullying
tends to be overbearing and based upon the inappropriate use of power through
coercion. Examples include verbal abuse, close supervision and public ridicule.
Female bullying is more typically experienced as exclusion of individuals from the
work group. Obviously this has an enormous impact on an individual’s motivation
and productivity. Victims of bullying experience trouble sleeping, require time off
work, feel depressed and expend a considerable amount of time talking about or
seeking redress for their experience.

Think back to your school experiences. Did you observe or experience

bullying behaviour? Can you see how such behaviour could be
transplanted to the boardroom or the office?

Work culture and workplace bullying

Workplace cultures can define what workplace bullying is and what types of
behaviours develop. When organisations embark upon restructuring programs the
opportunities for workplace bullying expand. Employees experience greater insecurity
at a time when managers are able to wield much greater power in terms of who will
go and who will stay. Bullying may become a tactic of choice to force unwanted staff
to leave. In these instances employees may be offered undesirable shifts or
undesirable work—the boss has the power to harass people to do things they should
not have to do.
Of the five sources of power—reward, coercive, legitimate, expert and referent—it is
coercive power that bullies use. Authors of a UK report The Bullying Culture say
most bullying takes the form of persistent, low-level psychological harassment that
eats away at staff over time, leading to stress and absenteeism. Physical bullying is
rare, as a bruise would be evidence. Much of what happens goes on in private, where
it’s just one person’s word against another’s. Bullying is about veiled threats,
intimidation and withholding information to make someone look stupid and
incompetent.

At times of corporate downsizing managers have more opportunities to become

bullies. The downsizing environment of itself creates added workloads resulting in a
more stressful workplace where bullying is more likely to develop.

Why do people become bullies? What do you think?

Some people appear to become bullies out of jealousy or inadequacy—they may feel
threatened by other staff—while for others, bullying has developed in the home or the
school environment and the bullying behaviour has never been checked. I’m sure that
every one of us can think of a time when they have acted in a bullying manner to a
brother, sister, schoolmate or colleague. For a great number of us reflecting on such
behaviour is a source of shame and we decide not to behave in that way again. Others
come to enjoy the power they derive from bullying. Most of us have witnessed
bullying behaviour. To see the discomfort of a person being bullied can be a
distressing experience, yet intervening can be difficult. An individual wishing to
speak up and expose bullies must have significant personal or position power if they
are to be successful.

One of the appealing aspects of groups and teams in the workplace is that they
represent power. Often what is impossible to achieve individually becomes possible
through group action. Employees can work together to identify and oppose bullying
behaviour by managers. They can also work together to expose and correct bullying
behaviour of peers and co-workers.

The Costs of Bullying

Bullying results in higher staff turnover, absenteeism, claims for worker’s

compensation, early retirement, psychological counselling costs, poor morale and low
productivity. In 1999 the Victorian Civil and Administrative Tribunal ordered a
School Principal and the Department of Education to jointly pay $35,000 in general
damages as compensation to a teacher the principal was alleged to have sexually
harassed, sexually discriminated against and victimised. The principal’s employer, the
Department of Education, was found to be vicariously liable for the principal’s
actions and was ordered to pay $20,000 to the teacher for aggravated damages for
stress. Gray v State of Victoria & Anor (Equal Opportunity Bulletin, Vol 4 No 2, July
1999)

The impacts of bullying on the victim’s family life and relationships can be extensive.
These include depression, insomnia, fatigue, ill health, feelings of isolation and
helplessness, fear of job loss, poor job performance, low self-esteem and increased
reliance on drinking and medication.

Obviously the costs of bullying can be very high. Employers need to provide
appropriate policies and mechanisms to ensure that workplace bullying is not
tolerated. Australian legislation does not adequately recognise workplace bullying.
Under current state workplace health and safety legislation employers have a duty of
care to provide a safe work environment for employees, visitors and contractors.
Industrial relations legislation covers issues of unfair dismissal and the Human Rights
and Equal Opportunity Commission Act 1986 covers issues of racism, sexism and
sexual harassment. Harassment covers unwelcome or offensive remarks, requests or
other behaviour that makes a person feel intimidated, offended, belittled, humiliated
or apprehensive, and interferes with a person’s job or threatens their ability to fully
participate in and benefit from the work environment.

If you were a manager how would you minimise workplace bullying?

Employers can adopt a range of strategies to control workplace bullying. Obviously

getting the culture of the organisation right is a good place to start. Open, participative
workplaces tend to be more relaxed and freer of the hierarchical roles which help to
foster bullying behaviours. The use of group work and team structures also provides
employees with some solidarity to work against a bullying superior in the
organisation. Managers and employees need to be educated about what constitutes
bullying behaviour and techniques to address bullying. Grievance procedures need to
be put in place so that victims are able to report harassment to a reference group
within the organisation for further investigation. Absences from the workplace,
workers compensation claims and claims based on stress should be monitored to
ensure that workplace bullying is not the underlying cause. Finally, just as Admiral
Barrie has done, senior management must actively demonstrate support for the
introduction of policies to alleviate workplace bullying. They must also behave in a
manner which encourages decent behaviour between all members of the organisation.
A culture of mutual respect, where each individual is automatically treated with
dignity and good manners, provides the basis for a working environment which is free
of bullies.

Web Sites to visit:

www.eowa.gov.au Equal Opportunity for Women in the Workplace

Agency

www.stress.org.uk/bullying.htm Workplace Bullying, a project by Andy Ellis, Ruskin

College, Oxford, UK
Text Reference

‘Mechanisms for Ethical Management’, Bartol , K, Martin, D, Tein, M and Matthews,

2001, Management A Pacific Rim Focus, 3rd Edn, McGraw-Hill, Sydney, pp 114-
115.

Dr Stephanie Miller
Senior Lecturer, School of Management, Victoria University, Australia.
November News Dr Stephanie Miller

Key terms: globalisation; security; remuneration; performance; strategy; motivation;

coaching; career

Globalisation
Earlier this year I wrote a piece on globalisation, warning of some of the risks of
globalisation as a strategy. Ethical, social and cultural factors were cited as problems
to be grappled with for any company involved in a global operation. In the aftermath
of events on 11 September it is clear that political forces will shape the global policies
of most companies for some time to come. This week’s BRW tackles many of the
issues confronting our larger companies in a climate of mistrust, terrorist activity,
warfare and isolationism (James, 2001). What had become an accepted view, that
geography and geopolitics were no longer relevant, has been shown to be a clearly
flawed view (James, 2001). Thinkers such as Juan Enriquez of Harvard’s Business
School put the view that global companies will increasingly be required to undertake
civic roles usually performed by nation states (James 2001). Companies wishing to be
global will, more than ever, need to understand cultural differences and develop
greater humility. It may also be necessary for some organisations to re-think their
global strategy. After all, globalisation of itself is not necessarily a desirable strategy
– the question has to be asked ‘Is it appropriate for a company and its capabilities?’.
Lou Coutts of Coutts & Connor management consultancy points out that 11
September may actually benefit some companies by allowing them to question their
global strategy (James, 2001). It has become politically incorrect to challenge the
notion of globalisation but since 11 September more discussion of its worth has
emerged. As James (2001) argues ‘the world contains profoundly different value
systems, and they must be reconciled or at least recognised, if anything approximating
a one-world market is to exist’. Clear differences of opinion were reported at the
recent Asia-Pacific Economic Co-operation (APEC) meeting attended by Prime
Minister John Howard. The Malaysian Prime Minister, Mahatir Mohamed, is quoted
as saying, ‘The “sacred” truth is that globalisation is always good for everyone at all
time. This is so contrary to the facts as experienced in Asia, Latin America and
Africa’ (James, 2001). In contrast, the Russian President Vladimir Putin said,
‘Nothing is worse than isolation. It is killing for a country and an economy. I believe
we should not be afraid of globalisation; it is an objective process’ (James, 2001).

Why is it that globalisation has been viewed as a necessary strategy for many
large companies? What contrary experiences is Prime Minister Mahatir
referring to?

Coles Myer
A couple of months ago I suggested that you should follow developments at Coles-
Myer as a case study in management strategy. Under the new CEO, 1000 jobs have
already been slashed from the general merchandise and apparel division’s head office
staff. Included among those going recently was former chief executive Dennis Eck,
who received an Aus$4.9 million early termination payment on top of his base salary
of $3.65 million (Wood, 2001). Observers are now wondering how much of Warren
Flick’s plan for the recovery of Coles Myer will remain under Fletcher. Already,
Flick’s plan to centralise buying has been quietly buried (Ries, 2001). While Fletcher
says this is because he felt Coles Myer risked too much change many analysts wonder
how secure Flick is under Fletcher’s new regime (Ries, 2001).
Flick is the second highest ranked executive at Coles Myer and has, over his
eight months on the payroll, received a total of $2.35 million: almost as much as
Ziggy Switkowski who, as head of Telstra, is responsible for $22 billion of revenue
each year (Wood, 2001). The payment to Eck, along with others - notably $1.6
million to Terry McCartney, the former head of Myer Grace Bros who has been
blamed for the store’s huge profit slump (Wood 2001) - have resulted in a call for a
greater connection between performance and remuneration in Australian companies.
The Australian Securities and Investments Commission chairman, David Knott,
argues that performance payments to executives and directors of companies that failed
to perform were unacceptable (Maiden, 2001). One need only compare the treatment
of Ansett employees with those of its CEO to realise just how unacceptable these
payments have become.
The strategy being adopted by Coles Myer is merchandising integration.
Under this strategy, each retail brand (Myer Grace, Kmart and Target) will be
allocated a clear target market and retain an in-house team of merchandise buyers
who focus on that market (Ries, 2001). Fletcher is also tackling the problem of Coles
Myers loyalty schemes (shareholder and employee discounts and Fly Buys schemes)
which cost the group nearly $300 million a year.

What do you think of these strategies? What predictions do you make for Coles
Myer?

Coaching
Another earlier piece this year concentrated on employee motivation. We know that
motivation can be enhanced by improving an employee’s connectedness with their
work – this can be achieved by training and education, job redesign, rewards and
recognition. Catherine Fox (2001) suggests that, for companies lacking the time or
resources to train or mentor staff, coaching may be the answer. One of this years top-
selling business books in Australia is The Complete Guide to Coaching at Work by
Zeus and Skiffington (Fox, 2001). Coaching develops interpersonal skills and instils
confidence as executives move from traditional autocratic management styles to
managing people in teams (Fox, 2001). Unlike traditional learning, coaching works on
an 80:20 principle. You spend 20 per cent of your time learning and 80 per cent
practising. A coach helps an individual to understand their own weaknesses and
provides ways to improve their performance. In Australia, companies such as the
Commonwealth Bank, Telstra and the Defence Forces are using coaching (Fox,
2001). Traditional training has slipped from favour as research has showed that as few
as 8 per cent of people translate the skills taught in training into their business roles
(Fox, 2001). In many ways, coaching is a form of just-in-time training – it’s provided
on an individual basis and has an on-going element which forces people to reflect on
their own performance and to go back and try again.

Think about your learning experiences. What learning style suits you best? How
could this be transferred to the workplace?

Your Career
As the end of the year approaches you may be thinking about your job prospects. My
advice to you is to conduct an assessment of what you have achieved and what you
still need to achieve in order to win the position you really want. Many of the young
people I know have found it much harder this year to find a truly satisfying job with
the career prospects they would like. Even if you have just finished your fist year of
study you should visit sites such as www.mycareer.com.au and conduct searches to
locate the type of position you will be looking for when you complete your studies.
Take note of the requirements and build these into your plans for the next year or two.
Relevant work experience is extremely valuable. An article in The Age on Saturday
caught my eye – it reported on several young Australians who took their job search to
Britain where they enjoyed a complete change of lifestyle but also gained skills and
experience which have proved vital for their career (Edwards, 2001). There is a big
demand for skilled IT people, insurance, law and banking professionals, and sales and
marketing staff (Edwards, 2001). As a jumping-off spot for travel to Europe and for
gaining an understanding of the European Community (formerly the European
Economic Community), such experience would be invaluable for a young
professional. Most large British companies have European offices but often postings
to these require appropriate language skills. Some useful web sites are listed below.
After 11 September, many companies will require the skills and experiences of
managers with an empathy for, and an understanding of, other cultures. Working
overseas is one way to gain some experience of different peoples and their cultures.

Reading
Edwards, P., 2001, ‘Australians work it out in Britain’, The Age, 27 October, Section
7, p.1.
Fox, C., 2001, ‘Coaching confronts poor performance’, The Australian Financial
Review, 30 October, p.51.
James, D., 2001, ‘The messy new world disorder’, Business Review Weekly, 25-31
October, pp.35-9.
Maiden, M., 2001, ‘Get real on pay day’, The Age, 30 October, Business, pp.1, 4.
Reis, I., 2001, ‘One Flick’, The Bulletin, 30 October, pp.68–70.
Wood, L., 2001, ‘Coles’ chiefs among the highest paid’, The Age, 30 October,
Business, p.1.

Web Sites
www.mycareer.com.au
www.recruitmentuk.net/
www.liveworkplay.com.au
www.select-education.com.au
International Management Dr Stephanie Miller

Issue No. 5

Key words: international management, collaboration, groupware, transnational

teams, globalization

The recent decision to close the Arnott’s biscuit factory in Burwood has again raised
questions about the benefits of globalisation for Australian society. Whilst the notion
of globalisation, the ‘global village’ and the ‘global economy’ have driven business
strategy for the past decade, there are several voices emerging to challenge our
progress down the global path. The case for globalisation is that it promises a leaner,
more efficient economy with benefits for all nations. However, the research data
shows that the benefits of globalisation are unevenly distributed, accruing mainly to
large western corporations (Fulop & Linstead, 1999). Many of the values, ways of
thinking, political, social and economic systems of the western economies dominate
while the interests of marginalised cultures are suppressed (Fulop & Linstead, 1999).
While the rhetoric around globalisation espouses cultural understanding, diversity and
mutual benefit for participating nations, the reality tends to be focussed on increasing
shareholder wealth. One of the aspects of globalisation to have had a profound impact
upon Australian companies is the trend towards appointing foreign-born CEOs.

Michael Schrage is a management consultant and a research associate at

Massachusetts Institute of Technology (MIT). He argues that companies hiring
foreign-born chief executives will outperform their competitors (Voorhaar & Way,
2001). This is true for Australian companies as much as it is for the US. In 1992
Frank Blount became the first foreign national to head Telstra, Australia’s largest
corporation (Blount & Joss, 2000). Bob Joss became CEO of Westpac in 1993
(Blount & Joss, 2000). When Joss left Westpac in 1999 the share price had increased
by 266.7% (Voorhaar & Way, 2001). Other highly visible and highly successful
CEO’s from overseas include Paul Anderson at BHP, Dennis Eck at Coles Myer, Ed
O’Neal at St George and Nick Steffey at GIO (Voorhaar & Way, 2001). Similarly, in
the US, several Australians have created shareholder value for three of the best-
known public companies: Jac Nasser at Ford, Douglas Daft at Coca-Cola and Geoff
Bible at Philip Morris are all Australians.

There appear to be a number of reasons why foreign-born executives are appointed.

Boards of directors look for foreigners when a company is in trouble and is in need of
restructuring and radical change. To achieve this, chief executives with no links to the
company, unencumbered by personal loyalties, are best placed to achieve radical
change (Voorhaar & Way, 2001). When Frank Blount arrived at Telstra he found the
need for change was resisted. Telstra was a large, bureaucratic organisation with
people who had become familiar with an established way of working. Blount found he
had no choice other than to make changes in personnel:

In the end, I believe you unfortunately have to replace a significant percentage

of top management and middle management people because they will tell you
they will change but they don’t. They think to themselves: ‘This too shall pass.
 We’ll just wait this fellow out.’ Therefore, the CEO has to make it absolutely
clear by his or her actions that change is the only alternative and that is why it
has been my experience that a significant percentage of senior managers will
have to be replaced. (Blount & Joss, 2000, p. 64)

This kind of change is hard to visualise from an insider’s perspective. It is only by

taking a fresh view, an outsider’s view, that the realities of the situation can be seen.
For example Joss, at Westpac, observed that the absence of women in management at
Westpac was like going back in time. At Wells Fargo, where he had come from, 60%
of branch managers were women. At Westpac 6% were women. Management
meetings were ‘invariably a room full of white males’ (Voorhaar & Way, 2001).
Associate Professor Amanda Sinclair of the Melbourne Business School believes the
ability and willingness of foreign chief executives to promote talent, especially female
talent, is a real positive (Voorhaar & Way, 2001).

The exchange of foreign executives around the world is part of globalisation. This
trend suggests that managers need to be prepared to relocate. They also need some
particular personal qualities to successfully work overseas. While many Australian
companies are placing staff overseas, the training prior to such assignments tends to
be poor. In particular, organisations must consider relational skills, an expatriate’s
ability to interact effectively with people in the host country (Bartol, et al, 2001). It is
important to have a basic command of the language used, and an understanding of
cultural differences, in particular communication styles, is essential. The rewards for
meeting the criteria to become a foreign-born CEO are substantial. In 2000 Jac Nasser
was paid a salary and bonuses of $24.2 million (Voorhaar, 2001).

In an effort to develop closer global links, many organisations have established

transnational teams (Snow, et al, 1996). Transnational teams may be used to help
achieve global efficiency through standardised designs and operations, or they may be
locally responsive, attending to different regions’ customer preferences, political and
legal systems (Snow, et al, 1996). Such dispersed activities require human resource
management support of a quite different kind to that offered in the past. Members of
transnational and virtual teams require additional skills — skills which support
flexible working models. A culture of cooperation, interaction, respect for diversity
and ethical principles is required for such teams to flourish. This offers new
challenges to the role of HR specialists — to reinforce an interdependent culture with
processes and HR systems which are congruent with supporting a network of flexible
relationships (Eden, 1996). In describing the style of collaboration required for
interorganisational teamwork and networking, Mintzberg et al (1996) cited Mary
Parker Follett (see Bartol, et al, 2001, p. 43). Follett wrote about constructive conflict,
pointing out that conflicts are best resolved not by one side dominating the other, or
by compromise, but by creative integration (Mintzberg, et al, 1996). By integration
she meant finding a satisfactory solution for all parties (Bartol, et al, 2001, p. 43).

In the Australia-Pacific region collaboration and networking will continue to grow.

While Australian managers have grown up in a culture which embraces competition
more readily than collaboration, in the Asia-Pacific region cultivating relationships
with suppliers, customers, partners and government officials is standard practice
(Fulop & Linstead, 1999). In Japan, business transactions are based on ‘insider–
outsider’ status, or keiretsu (Fulop & Linstead, 1999). In the People’s Republic of
China, guanxi, or mutual obligation which is derived from being connected to
someone, is the basis for doing business (Fulop & Linstead, 1999). For Australian
executives to be successful in such environments they must understand the nature of
these networks and develop personal relationships which can facilitate entry to them.
It is people and their relationships who stand at the centre of networks (Fulop &
Linstead, 1999). In these environments western notions of trust, and even paper
contracts, may mean very little. Australian managers must learn to adapt to the ways
of other cultures in the spirit of Follett’s ‘creative integration’. Both Frank Blount and
Bob Joss (2000) recognised the need for the education of business executives to
develop these skills.

Numerous studies show that those companies with strongest long-term

performance invest much more aggressively in human capital via extensive
recruiting, employee training and professional development programs, than
their less successful competitors. Companies such as 3M, Proctor & Gamble,
General Electric, Disney, Marriott and IBM, have all made significant
investments in their internal ‘universities’ and education for intensive training
and development programs. (Blount & Joss, 2000, p 251).

Education plays a key role in preparing individuals for leadership and for shaping
their organisations. To succeed in the ‘global world’ Australian managers must
understand and be sensitive to cultural differences, be prepared to develop close
personal relationships as the basis of business networks and, ideally, to take a
leadership role in the development of a form of globalisation which meets the needs
of all participating nations.

Further reading:

Bartol, Kathryn; Martin, David; Tein, Margaret and Matthews, Graham, 2001,
Management A Pacific Rim Focus, McGraw-Hill, Sydney, Chapters 2, 15 and 18.

Blount, Frank and Joss, Bob, 2000, Managing in Australia, Lansdowne, Sydney.

Eden, Angela, 1996, ‘Supporting a dispersed workforce: a changing role for HR’,
Work Study, Vol. 45, No. 1, pp. 24–26.

Fulop, Liz and Linstead, Stephen, 1999, Management: A Critical Text, Macmillan,
South Yarra.

Mintzberg, Henry; Dougherty, Deborah; Jorgensen, Jan and Westley, Frances, 1996,
‘Some Surprising Things About Collaboration — Knowing How People Connect
Makes it Work Better’, Organizational Dynamics, Summer, pp. 60–72.

Snow, Charles C; Snell, Scott A; Davison, Sue Canney and Hambrick, Donald C,
1996, ‘Use Transnational Teams to Globalize Your Company’ Organizational
Dynamics, Spring, pp. 50–66.

Voorhaar, Ria and Way, Nicholas, 2001, ‘Under Foreign Rule’, Business Review
Weekly, Vol. 23, No. 18, May 11, pp. 46–51.
Voorhaar, Ria, 2001, ‘Local Boys Make Good’, Business Review Weekly, Vol. 23,
No. 18, May 11, pp. 46–51

Web Sites:
These sites are for subscribers only but there is a four-week trial period available as at
1 June 2001.

www.brw.com.au/leadership/change_management

www.brw.com.au/leadership/management_theory
Bartol Newsletter August 2001

Knowledge Nation Dr Stephanie Miller

As the federal election approaches, both sides of the political spectrum are backing
voter interest in building knowledge to build the nation. Business educators have been
engaged with the notion of knowledge management within organisations for some
time. Knowledge management for the country is based on similar ideas on a broader
canvas. Kim Beazley’s Knowledge Nation is premised on the assumption that
education will ‘encourage innovation and boost investment in research and
development’ (Liddell, 2001). Barry Jones, Chair of the Knowledge Nation task force
for the ALP, argues that Australia already has an adequate intellectual infrastructure
with 35 universities. The problem seems to be the poor linkage between universities
and mainstream Australia (Jones, 2001). The concept of the Knowledge Nation relies
on the belief that an investment in universities will result naturally in a growth of
innovative ideas and industries.
David Uren (2001), writing in The Weekend Australian, questions the logic of
this idea. He argues that universities react to market demand by producing skilled and
educated graduates to work in areas of growth – they do not create new industry
(Uren, 2001). The Australian wine industry, for example, has developed excellence
because of a good supply of skilled personnel from universities teaching courses in
winemaking. These courses were introduced because of the demand from the
industry, not the other way around. In this case we must look to ways in which
industry can better identify its recruitment and skill shortages and have mechanisms to
quickly translate that demand into new University and TAFE courses.
As a senior lecturer at a ‘new university’ I am increasingly concerned that
such demand-driven approaches to tertiary education limit our opportunities for
innovation. Increasingly, students specialise in a narrow range of business subjects –
marketing, accounting or law in particular. Students do not choose a broader range of
study because study of a different discipline is challenging and students tend to opt for
the easiest pathway to a degree. What this means is that our graduates are skilled
technicians in a single field, unable to collaborate in multidisciplinary activities.
Marginson & Considine (2001) observe that, in contrast to Australia’s narrow and
instrumental university courses, education in the United Kingdom is tending to
become broader, with classics, philosophy, languages and history all having
increasing enrolments.

What do you think? Which system creates better thinkers and

innovators – education for the skilled specialist or the broad ranging
classicist?
My university has debated the inclusion of subjects such as ‘Work and Society’ or
philosophy for all first year business students. Currently no such subject is
compulsory, although Business Ethics was recently added to the required subjects for
management students. The idea behind this is to provide students with the opportunity
to debate ideas and to look at problems through a different set of lenses.
Are you studying any subjects outside of your specialist area? Do you
think you should?
In management we have tended to think of knowledge management as a
multidisciplinary task. It relies on information systems to gather data and to make that
data readily available to all users. It also relies on effective training of people to
ensure that everyone in the organisation knows what type of knowledge is available to
them. Most importantly, however, it relies on the goodwill of people to contribute
their knowledge to the systems available. For example, people working in sales
succeed or fail to a large extent as a result of their networks. They hold a great deal of
tacit knowledge about their clients – what they normally order, how they like to be
treated, how much time they have to spend talking about new products, and what their
client base is like. Tacit knowledge is this kind of critical but undocumented
knowledge – it is all inside the salesperson’s head. Know-how is typically transferred
or learnt in direct, intimate relationships with extensive face-to-face exposure (Fulop
& Linstead, 1999).

Think of the sort of tacit knowledge you have – how to deal with student
administration, who are the good lecturers, how to work with others on
group assignments – this is all knowledge that you have acquired as a
student
Getting people to share and to document tacit knowledge is very difficult and yet this
is what organisations are trying to do as part of the knowledge management process.
Teams can help by having people share experiences, talk about their clients, share
problems and the way they have been resolved, share networks and information – all
of which can be documented and organised into useful, accessible data. Teams can
improve the ability of staff to learn skills from each other and from trainers, and to
build knowledge and innovation.
If Kim Beazley and John Howard are to realise their visions for a knowledge
nation, this is the approach they need to foster. Investment in universities is one thing
– getting universities, businesses and research centres to work together is a bigger
challenge. It is difficult to develop collaborative behaviours across organisational
boundaries. The alliances required for collaboration to occur have been described as
‘teamnets’ by Jessica Lipnack and Jeffrey Stamps (1994). Teamnets are clusters of
organisations connected in a kind of social network that collaborate as team members
and have a set of shared goals. The most common example of this in Australia is in
the form of regional clusters where a network of business groups in a region work
together to market the region, frequently sharing resources and personnel to do so.
Frequently, this kind of collaboration results in more business for each business and,
in addition, the businesses learn from each other. In these types of networks there is
much to be gained and very little risk is involved. Where universities are developing
innovative processes, the risks of working with industry are much greater – who will
benefit?
Barry Jones (2001) notes that the challenges and threats are changing the
nature of our universities. With the possibility of greater financial rewards through
increasingly entrepreneurial activity, it is likely that universities will be less inclined
to assist their business partners in a collaborative way, as required by a ‘knowledge
nation’. While federal funding is drying up, successful professors will hoard their
knowledge until given sufficient remuneration. As Jones (2001) says ‘faculties can
become deeply divided when Professor A floats his own company or has access to a
bucket of money and his former colleague Professor B is then excluded from
collaboration and becomes a competitor or enemy’.
If we are to become a knowledge nation we cannot afford to collect and
process information and then hoard it. We need to build linkages between the sectors
of our economy and develop a practice of collaboration. We cannot do this if we
continue to cut back support for our universities. In their recent book The Enterprise
University Marginson & Considine (2001) make the point that between 1980 and
2000, full-time university enrolments in Australia increased by 50 per cent, staff
increased by only 6 per cent, and the Commonwealth contribution fell by 3 per cent.
Universities have become increasingly dependent on commercial activities, especially
on fees from overseas students. Australia will not become a ‘Knowledge Nation’ in
such an environment.
The concepts of innovation, knowledge management and the ‘knowledge
nation’ are related. Innovation occurs when a new idea is applied to a process, product
or service. Innovations can be radical, breakthroughs or small incremental
improvements. Typically, innovation is knowledge-intensive and crosses
organisational boundaries. In organisations today we use teams to foster innovation
and these in turn foster knowledge management. We need to find mechanisms to
expand the collaborative team mentality to the wider business community if we are to
develop this notion of the ‘knowledge nation’. David Uren describes the
‘extraordinary’ diagram of the knowledge nation that accompanied the Labor policy
launch as showing ‘the government at the top, lots of circles for producers of
knowledge like the universities, the CSIRO and manufacturing industry – even
including the ABC’ but just how these entities will work together to create innovative
practices and develop knowledge is yet to be made clear.

What strategies do you think could help to make the

knowledge nation a reality?

Further reading
Bartol, K., Martin, D., Tein, M. & Matthews, G., 2001, Management: A Pacific Rim
Focus, 3rd edn, McGraw-Hill, Sydney, Ch 8.

Jones, B. 2001, ‘Waiting for the Knowledge Nation (speech to Macquarie University,
April 27), Sydney Morning Herald, 16 May.

Uren, D., 2001, ‘Market demand, not science, drives innovation’, The Weekend
Australian, 7-8 July, p 50.

Fulop, L. & Linstead, S., 1999, Management: A Critical Text, Macmillan, South
Yarra, Chapters 6 and 11.

Lipnack, J. & Stamps, J., 1994, The Age of the Network, Oliver Wright, Essex
Junction.

Marginson, S. & Considine, M., 2001, The Enterprise University, Cambridge

University Press, Cambridge, UK.
Web Sites
http://www.australia.internet.com/r/article/jsp/sid/120851
Liddell, Craig, 2001, ‘Knowledge Nation or
Innovation?’ 31 January 2001
Bartol Newsletter September 2001
Relationship Management Dr Stephanie Miller
Key terms: business-level strategy; customer relationship management;
organisational culture

The recent appointment of Mr John Fletcher as CEO of Coles Myer reflects the failure
of the company’s strategic direction of the past few years. While the grocery business
ran reasonably well under Mr Dennis Eck, problems at Myer-Grace Bros, Target and
Kmart have occurred because these companies have failed to understand their
relationships with their customers. Coles Myer’s Return on Assets (5-year average) is
sitting on 4.70% compared to the industry average of 8.06% (www.marketguide.com;
19 August 2001). Return on Equity is at 10.85%, around half that of the industry
average of 20.18% (www.marketguide.com; 19 August 2001). In July, the Coles
Myer Board issued its third profit warning in six months, saying that its 2000-01
profit would be lower than the forecast $340 million because of the poor performance
of the department stores (Lloyd, 2001).
The executive director of the Australian Centre for Retail Studies, Ian Clark,
offers Myer-Grace Bros as a good example of the fragility of the customer-retailer
relationship (Lloyd, 2001). Both Myer and Grace Bros are stores that have enjoyed
strong customer loyalty. Throughout their history they developed a reputation for
refunding faulty or unwanted goods without asking too many questions. They
maintained areas of the store that provided a service function, such as a knitting wool
section - staff provided expertise and advice as well as patterns and wool. Now even
the knitting wool section has gone and the store has a decidedly down-market
appearance. The supermarket approach has taken over, with customers being expected
to select their own merchandise and then queue at a central register. Clark says Myer-
Grace Bros has abandoned the set of customers developed over the past twenty years
of quality service (the up-market shopper), in the hope of engaging another set (the
low-margin shopper) but this strategy just has not worked (Lloyd, 2001).

Have you noticed changes in the way Myer-Grace Bros stores have been
run over the past few years? Do you feel your loyalty to these stores has
altered during this time? What would you do differently?
One of the problems of targeting the low-margin shopper is that loyalty is lost and the
consumer becomes a free agent. As Clark says, consumers have been trained to look
for bargains and the assumption many retailers have made is that consumers shop
only on the basis of price. While this group exists - some consumers will drive across
town to purchase from a cheaper store - there also exists a higher margin group made
up of people looking to enjoy the shopping experience and wanting a more personal
relationship with a retailer.
The appointment of John Fletcher with his record as one of the country’s most
successful chief executives at Brambles Industries resulted in an immediate jump in
Coles Myer’s share price (Boyle, 2001). This is despite his lack of retailing
experience - he says he has not been inside a supermarket for twenty years as he
leaves the shopping to his wife. The Grace Bros business-level strategy has already
been revised with the opening of a new store at Castle Hill (in Sydney’s west) this
month which features a larger range of national, international and private brands, a
more spacious layout and improved customer service (Boyle, 2001). While it may
seem to be very simple to change the cluttered in-store formats, the poor product
offering and low service standards, the Coles Myer culture is described as
‘sycophantic’ and ‘so deep-rooted that we believe it will take many years to turn
around’ by analyst Russell Wright (Clegg, 2001).

Do you think this change in strategy will work? Think about your
shopping behaviour - what do you look for in a retailer?
When I go shopping I choose places that I like, where I feel comfortable and where I
am treated with consideration and respect. I am happy to spend more time and more
money if I have a nice time while I am shopping. This usually means that I go to the
centre of the city (Melbourne) where I can park conveniently, I have a range of stores
to choose from and I can have a good coffee. I avoid any stores that look overcrowded
and I do not buy from people who are too pushy. I think I am pretty typical of the
high-margin group of consumers. Certainly I have opted to shop in places other than
Myer on many occasions. Perhaps John Fletcher’s approach will turn Coles Myer
around and bring back the service oriented store that I used to know. I agree with Ray
Kloss, regional manager of product marketing at PeopleSoft Asia Pacific, who says
customers want a large ‘plate of ingredients’ when it comes to a relationship with a
supplier: convenience, availability, reliability, reduced cost, responsiveness from the
supplier, appreciation, visibility and privacy (Lloyd, 2001). It may be that the major
competitors of the Coles Myer group - Woolworths, Harvey Norman and Warehouse
Group - are more able to deliver what the market wants. Kmart, Target and Myer-
Grace Bros are mature businesses whereas these competitors are not (Clegg, 2001).
John Fletcher will probably attempt to turn around the culture at Myer-Grace
Bros. As a new appointment, both managers and staff will be expecting some
personnel changes along with a new vision for the organisation. Many of the more
senior personnel are probably going to have to move to make way for a new style of
management - this kind of change is fundamental to a change in culture. You will
recall the work of Elton Mayo and his Hawthorn studies. The recognition that the
social needs of the workforce were important as a means of cultural control has
resulted in sophisticated approaches to managing culture. Through a manipulation of
culture, often through the use of symbols, myths and rituals, the workforce often
responds positively to the firm and its goals and, as a result, motivation is enhanced
and productivity improves. At Myer-Grace Bros, John Fletcher may spend some time
in role-playing situations to get a message out to all staff that service and good
customer relationships are paramount. He will probably be looking for senior
managers and operational level managers who are able to take this message to the
front line customer service workers.

Think about the activities, symbols and stories Fletcher could use to
turn the Myer-Grace Bros culture around. What would you suggest that
he do? How will he know which tactics are working?
In addition to the cultural change challenge, John Fletcher is expected to use the
expertise he gained at Brambles to reshape logistics, finance and administration at
Coles Myer. These are areas where there is potential for big cost savings. Analysts
have observed that Coles Myer has too many administrative staff and it takes too long
for decisions to be made and for stocks to get to the stores, resulting in high costs
(McCallum, 2001). The improvements to be made in logistics will include improved
information technology, warehousing and head-office administration. Fletcher will be
seeking improvements that include greater focus on the customer group, faster
decision making and reduced transaction costs and delays. His vision is to ‘create that
customer focus you feel when you walk into the place’ (McCallum, 2001).
Fletcher will need to utilise all of the functions of management to achieve the
goal he has established. As a leader he will need to be visionary and persuasive, as an
planner he will review the holdings of the company and establish strategic plans, as an
organiser he will appoint appropriate senior personnel and revise systems and
procedures, and as a controller he will need to measure performance, benchmark these
measures against industry standards, and take corrective action to improve
performance in many facets of the organisation. In each of these activities he will
need to judge the correct style of management to fit the existing culture while
gradually moving the culture towards an acceptance of greater individual
responsibility, improved quality and effectiveness and, above all, improved
relationships with customers.
Watch the press over the next six months to see how John Fletcher progresses.
The changes at Coles Myer will provide a great real life case study.

The Web
http://www.marketguide.com Provides market ratio comparisons

References
Boyle, J., 2001, ‘Plenty in store at Coles Myer’, The Australian Financial Review, 23
August, p.17.
Clegg, B., 2001, ‘Street talk’, The Australian Financial Review, 23 August, p.24.
Lloyd, S., 2001, ‘Let’s get personal’, Business Review Weekly, 23-29 August, pp.62-4.
McCallum, J., 2001, ‘New Coles broom, Business Review Weekly, 23-29 August,
p.34.
Managing security Issue No. 9

Key terms: security, data recovery systems, culture, small business

The September 11 tragedy has highlighted, yet again, the need for firms to be
conscious of computer security. The relatively high-tech nature of the companies
housed at the World Trade Centre (WTC) probably means that they have been able to
secure their trading and financial records. Morgan Stanley, for example, which leased
50 floors of the World Trade Centre, reported that all of its business units were
functioning a few hours after the attacks, and that no financial information had been
lost (Kirby, 2001). However, the point has been made that firms were only in such a
good position regarding security because of the Y2K threat which led many
organisations to upgrade their systems, especially in terms of backing up data.

The obvious physical destruction which occurred at the World Trade Centre (WTC)
has resulted in many firms seeking more reliable backup systems. Several Australian
companies are likely to benefit from this demand as Australia is viewed as a safer
environment than the USA, UK or Europe. Australian companies that are likely to
benefit are Intracom, which provides crisis centre management; and Microview,
which offers four types of remote data storage (microfiche, CD, DVD and online).
They are part of an industry which offer networking security, data recovery systems
and crisis centre management (Nicholas, 2001). Intracom’s crisis centre product
allows customers to quickly build a secure intranet or extranet containing information
that is important in times of an emergency. Such information could include staff
members’ contact details, emergency procedures, company information and
confidential documents (Nicholas, 2001). Obviously this means that despite the
physical and human devastation caused by terrorist acts, companies are still able to
continue to operate. Some firms may go to the full extent of creating a ‘hot site’—a
full backup system which replicates all data in a secure off-site location. It is likely
that many firms will consider expanding their remote data storage in the wake of
September 11. The usual physical security measures which are designed to minimise
data loss as a result of fire, flood and earthquake damage are simply not adequate to
deal with the type of devastation seen at the WTC.

Australia also has an interest in the development of technology which enables aircraft
to be controlled from land, without the involvement of pilots. One of the Australian
companies working on this controversial technology is Aerosonde, a specialist in
unmanned aircraft technology (Kirby, 2001). On thinking about flying I’m not sure
that I would feel confident that an unmanned plane would be terribly comforting.
What do you think? Is this one of the ways that we can fight terrorism of this
kind? Would consumers buy this product?

While it may seem trivial to think of the dangers of internal security breaches in the
face of the wholesale devastation wrought by the highjackers, the most frequent
computer breaches are perpetrated by insiders. A 1999 survey by the Victoria Police
computer crime squad found that 83% of security and privacy breaches were by
internal staff (Thomson, 2001). Why do you think this is so?
It has been said that 10% of people are always totally honest, 80% could behave
totally honestly or not quite so honestly in certain situations, and 10% will always
behave dishonestly. This being the case, if an employee has access to information or
funds on a computer screen it is often a great temptation to profit from such access.
People going through personal crises, such as a marriage breakdown, misuse of drugs
and alcohol, gambling or simply the pressure to get funds together quickly may find
the temptation to steal from their workplace the easiest solution to their problems. In
the past such temptations required physical actions—entries into a journal ledger or
theft from a petty cash drawer. Today, theft can be conducted via a keyboard with
little risk of being caught. Sometimes it is only when a data audit is conducted that the
theft is discovered. Many companies are reluctant to admit that a security breach has
occurred and for this reason it is difficult to know the true value or frequency of
internal security breaches (Thomson, 2001). A number of recruitment companies have
had their client, candidate and job databases stolen by employees who leave to join a
competitor but it is difficult to admit such breaches as they may affect client
confidence (Thomson, 2001).

How do you think you would behave if you could see a way to profit from your
employer? Would you take the opportunity or would you alert the company to
the security problem?

It is the responsibility of management to set the tone for their workers and to enforce
the behaviours they believe in. Most breaches are enabled by unauthorised access so
companies should ensure that employees keep passwords secret and change them
regularly. They should also keep records of which employees have access to various
parts of the computer system. The military model, for example, classifies information
into five levels—top secret, secret, confidential, restricted and unclassified (van der
Walt, 2001). It is important that management develops some form of security
classification and provides access only to approved users. However, problems can
arise when information technology managers and technicians misuse their positions of
trust. Peter McNally, a security services consultant at KPMG, says that information
technology managers who have wider access to a company’s computer system than
senior management can be prime suspects in internal security breaches (Thomson,
2001).

Managers must be aware of internal security and make obvious moves to highlight
security as an issue for their organisations. Policies which set out punishments must
be well communicated. Training of staff to improve awareness of security as an issue
and to impress appropriate behaviours is essential. Audits should be conducted
rigorously and frequently. Attitudes to internal security are part of a company’s
culture and need to be managed as such. A London based consultant in PA
Consulting’s global group, Peter Houppermans, says that small steps are a good start.
‘It is essential that organisations recognise the opportunities they present for illegal
activities, clear up uncollected printouts from central printers, ensure that confidential
waste is safely disposed of and high-level access rights are given to a limited group of
people—and audit rigorously’ (Thomson, 2001). This kind of obvious activity gets
the message out to everybody that security is an issue while at the same time it helps
to change the culture of the company to become more aware and ethically stronger.
In addition to these security risks managers today also have the growing problem of
network security and the threat of assault by viruses. Microsoft IIS web server,
Internet Explorer browser and Outlook email are increasingly under attack.
Presumably the might of Microsoft has attracted the attention of hackers worldwide;
upset at the domination the company has secured. The Code Red computer worm
infested hundreds of thousands of web servers in July 2001. After patching up Code
Red it has now been discovered that Code Red installed an extra back door which has
now made companies susceptible to the Nimda worm. Nimda is a software assault
team, exploiting vulnerabilities in Microsoft’s IIS web server, browser and email. The
result is that the Net is slowing up as terabytes of rogue data build up in infected
accounts (Moon, 2001). To guarantee security the server must be wiped clean and
everything must be reinstalled (Moon, 2001). Australian companies may be more
vulnerable than most to such attacks. Nigel Thomson of Reflex Technology Group
has worked with the Australian Federal Police to organise seminars and briefings to
warn of the danger of such problems but they have had a poor response. ‘Senior
management has abrogated responsibility in this area,’ he says (Thomson, 2001). The
casual Australian attitude is in sharp contrast to that in the US, where the Federal
Bureau of Investigation held a news conference with Microsoft to warn companies of
the Code Red computer worm (Thomson, 2001).

This weeks’ Business Review Weekly discusses the reluctance of small business to get
into business-to-business (B2B) e-commerce (Gome, 2001). Concerns about security
and privacy are inevitably going to hold small businesses back from this new form of
doing business. Pat Gallagher, the creator of the Pharmaceutical Extranet Gateway,
likens small-business owners to cats—they are impossible to herd—and says that they
must be coaxed one by one to adopt B2B (Gome, 2001). But with the costs and
dislocation being reported about through the use of Internet technologies it is little
wonder that small businesses continue to prefer the fax machine.

References:

Nicholas, Katrina, 2001, ‘Tech firms benefit from effects of terrorist attacks’, The
Australian Financial Review, Tuesday, 25 September, p 50.

Gome, Amanda, 2001, ‘Slow to Connect’, Business Review Weekly, September 27–
October 3, pp 64–66.

Kirby, James, 2001, ‘The road to recovery’, Business Review Weekly, September 20–
26, p 86.

Moon, Peter, 2001, ‘Web worm that is eating into Microsoft’, The Australian
Financial Review, Tuesday, 25 September, p 53.

Thomson, James, 2001, ‘The enemy within’, Business Review Weekly, August 23–29,
p 78.

Van der Walt, Charl, 2001, ‘Introduction to Security Policies, Part Two: Creating a
Supportive Environment’, September 25, www.securityfocus.com
Web sites:
www.securityfocus.com Security Intelligence Services for Business

www.noie.gov.au Site of the National Office for the Information

Economy.

Dr Stephanie Miller
Senior Lecturer, School of Management, Victoria University, Australia.
Motivating managers Issue No. 4

Keywords: motivation, control, stress, entrepreneurial personality

The latest Bulletin (April 24, 2001) cover story argues that many organisations are
having difficulty in finding workers willing to take on high-stress jobs. John Banks of
Morgan and Banks says, ‘It’s work-life balance combined with the question of why
take on extra responsibilities for extra status when there is really little payback?’
(Light, 2001, p 49). Many middle managers have decided to get their lives back into
balance, rejecting 12-hour days and embracing a simpler lifestyle with fewer demands
in their job. Bruce Marshall, principal of the career management agency Workshift,
says, ‘Line management have been asked to get the productivity of the profitability up
and maintain moral but often in the face of decisions made at the senior executive
level. Managers have been given a lot of responsibility, but there’s not been a lot of
investment in giving them skills to manage. Nor are they given a say. They are simply
required to deliver.’ (Light, 2001, p 51).

Think about the theories of motivation you have studied this

semester. Which of these theories explain this trend?

Today’s workforce is motivated by the same things that have motivated people
throughout history. They want to accomplish meaningful work. Today, many of the
decisions being made by senior management are short term and involve downsizing.
This unpleasant task frequently becomes the primary role of middle or line
management. People want to have control over their work but frequently the
directions being taken are set at higher levels, without adequate consultation with
middle management. Often managers are not trained adequately to undertake
important tasks such as managing change, managing projects and managing budgets.
A lack of training can induce stress and feelings of failure. People want to be heard
and respected, they want to be treated equitably and they want to be fairly
compensated for their efforts. All too often these elements, which are basic to
motivational theory, are ignored or put aside in the corporate world.

Rick Maurer, writing at www.mgeneral.com—a site devoted to management questions

with a useful search engine—says that people stick with jobs where they feel
appreciated and have the capacity to do their best work. He observes that many
organisations fail to provide the right environment for this. Remember MacGregor’s
Theory X and Theory Y—most people are motivated by Theory Y assumptions. They
are self-motivated and will do their best work when given the chance but many
organisations create Theory X situations. By creating too many controls and by
instituting paternalistic practices, layers of decision making and obstructionist
policies, people gradually turn-off and become demotivated. The management
practices instituted to manage employees can create underperforming individuals.

When are controls necessary? Emily Ross, writing in Business Review Weekly,
observes that online loafing at work is becoming an increasing problem for companies
with Australian executives and professionals spending an average of 6.21 hours online
in December 2000 alone. Should organisations be instituting controls over the use of
the internet by their employees—software to filter or monitor internet use is available.
It is predicted that by 2002 that 80 per cent of all Australian firms will be using some
type of filtering system (Ross, 2001). This begs the question of how employees will
respond to such monitoring and control of their activities. Some managers believe that
their use of the internet has dramatically improved their productivity. For these
managers, reducing their choice or monitoring their access to the internet could be
counterproductive. Peter Meingast of the global recruiting firm The Personnel
Department, argues that his productivity has increased because of his use of the
internet and despite his cyber-surfing. He works in his Sydney office for two days a
week, telecommutes with the office for another two days and for one day he is
unavailable, spending his time searching and reading online (Ross, 2001). This
scenario offers a clear lesson for management practice—when an employee is
involved in and enjoying their work they will use the tools available to them
productively. In contrast, when an employee feels disillusioned by their job or
supervisor, or feels demotivated because of an inability to use their skills effectively,
then they will seek enjoyment outside of work—the internet offers an attractive and
feasible source of enjoyment while at work!

At present more than half (54 per cent) of Australian businesses with internet access
allow all of their employees to use it. It has been found that once such a tool has been
available to employees, it is difficult to remove or reduce its use. Perhaps a better
tactic would be to produce a set of guidelines for internet use. Employees should be
made aware of the costs of cyber-surfing for personal use, the dangers of copyright
infringement and software piracy and the risk of sexual harassment lawsuits as a
result of cyber-abuse. Employers should develop written email, internet and software
policies. The use of such policies, rather than technical controls, encourages
employees to use their own discretion and judgment rather than having that
responsibility removed indiscriminately. As Bartol et al (2001) argue, one of the most
powerful strategies to gain loyalty is empowering people while engendering in them a
strong commitment to the organisation’s goals. In this instance, empowerment and
goal alignment are more powerful tools than surveillance and control.

Do you think controlling or monitoring access to the internet

is the appropriate response to online loafing? Could such
control be demotivating?

Some people seem to be very clear about their motivations in life, while others work
hard to find their motivation. James Carlopio, a lecturer at the Australian Graduate
School of Management, has studied the psychology of the entrepreneur and has found
that the entrepreneurial personality has a high desire to dominate, surpass and win.
They are not risk averse. They actually prefer making decisions with some level of
risk (Schmidt, 2000). For these individuals money comes as a result of working hard,
wanting to win and persisting over years of careful acquisitions and organic growth.
Does money buy happiness? Professor Bob Cummins from Deakin University
believes that people who are very wealthy are happier than the average person, not
because they can buy happiness but because their money helps to avoid unhappiness
(Schmidt, 2000).
Do you differentiate between winning and money as
motivators? Do you have an entrepreneurial personality?

Edwin Locke, Professor of Leadership and Motivation at the University of Maryland,

says that the world’s greatest wealth creators, people like Warren Buffett, Andy
Grove, Bill Gates, Anita Roddick, have seven core characteristics. These are:
• vision—the ability to conceptualise the potential of a product, market or
technology;
• an active mind—always trying to improve, seeing relationships between people
and issues, and looking ahead;
• competence and confidence—having strong technical skills in a particular area
and confidence in themselves and their abilities;
• drive—high energy, ambition, tenacity and excitement about achieving goals;
• egoistic passion—a selfish love of money, success and the process of being
successful;
• love of ability in others—finding and keeping people with great talent; and
• virtue—good ethical qualities of trustworthiness, honesty, independence,
productivity, fair treatment of others and loyalty (Schmidt, 2000).

Professionals and managers are not always entrepreneurs in the sense outlined above.
Often the chief reward in their job is the work itself. The typical employee, today, is
more likely to be a well-qualified professional than a blue-collar worker, so rewards
that give autonomy, flexibility, educational opportunities, recognition and challenge
are important. Professionals tend to have a long-term commitment to their field of
expertise and their loyalty is more often to their profession than their employer. In the
current climate, with the prospect of job losses in many industries (Westpac is
shedding 300 employees and Qantas will shed 1500), it is hard to convince
professionals to remain committed to their employer. Several episodes of downsizing
have convinced them that they are independent agents responsible only to themselves.
Such independence is valuable as people do become more self-managing but, in turn,
it becomes much harder to convince people to take on a high-pressured management
position because they don’t want the stress and they don’t have the organisational
commitment they once had. In addition to searching for satisfaction in their work,
managers and professionals are motivated to find a balance with their work and non-
work lives as parents, friends and community members.

Further reading:

Bartol, K, Martin, D, Tein, M and Matthews, G, 2001, Management: A Pacific Rim

Focus, 3rd Edn, McGraw-Hill, Sydney, Chapter 12 and Chapter 16.

Light, Deborah, 2001, ‘Open Season’, The Bulletin, April 24, pp 45–51.

Ross, Emily, 2001, ‘The War Against Cyber-bludging’, Business Review Weekly,
April 20, Vol 23, No 15, pp 68–70.

Schmidt, Lucinda, 2000, ‘What Makes the Wealth Seekers Tick?’, Business Review
Weekly, May 26.
Web site:

www.mgeneral.com
A Web site devoted to leadership and motivation

Dr Stephanie Miller
Senior Lecturer, School of Management, Victoria University, Australia.
Teamwork Dr Stephanie Miller

Key words: teamwork, TQM, organisation structure, collaborative work, workplace

design

Team implementation has become one of the most popular forms of organisational
development in recent times but it can be difficult to gain a clear sense of what is
meant by the word ‘team’. Thompson (2000, p. 2) defines a team as ‘a group of
people who are interdependent with respect to information, resources and skills and
who seek to combine their efforts to achieve a common goal’. Models of teamwork
include a number of attributes such as clear goals, interdependence, mutual
responsibility and employee control, however case study descriptions show that
effective teams vary quite dramatically in their nature.

The team concept can be traced back to the early human relations movement
and to writers such as Elton Mayo. Mayo (1945) observed that during the nineteenth
century, and before then, the technical skills acquired in apprenticeship were imparted
together with social and communication skills, typically from father to son. With the
process of industrialisation, the apprenticeship system was gradually replaced by
training devoid of many aspects of enculturation or socialisation. Universities
provided the technical skills necessary to complete tasks but ‘we have provided no
instruction or experience to replace the social aspect of the apprenticeship system’
(Mayo, 1945, p. 14).

Do you think teams provide social training in the workplace?

The human relations writers identified the importance of groups as being central to
psychological well being because they reflect a basic human need for social bonds.
Through good leadership, group behaviour supported rather than undermined the
objectives of management. It was argued that through the processes of socialisation
attitudes, values and norms could be conveyed in a positive manner. Teams are able to
replace more traditional, natural approaches to learning. Just as in the past the young
apprentice learnt how to deal effectively with customers while learning how to forge
steel, we need social processes today that will help to develop self-managing
individuals. The idea that individuals must be effective self-monitors pervades the
team literature.

Mayo (1945) argued that the outstanding character of an industrial community

is a condition of social disorganisation, in which effective communication between
individuals and groups has failed, and the capacity for effective cooperation has also
failed as a consequence. Mayo’s observations from 1945 hold true today with
employees facing stressful work lives because of either too little, or too much work,
and employees’ lack of control over work. The continued failure to attend to the
quality of working life of many employees can be clearly seen in economic terms.
Stress arises when individuals feel trapped, undervalued, abused and with little
control over their own situation. Employees can only achieve a better quality of life if
organisational forms are selected which foster a sense of belonging and self-worth.

When implemented sympathetically, teamwork offers a framework for

improved quality of work life. Teams offer a more holistic approach to work and also
the opportunity for greater flexibility to benefit employees. This approach can only
work where employment is secure and a strong sense of trust and belonging is
engendered. However, when employment in Australia is becoming increasingly short-
term, contract or casual. The reality of less full-time, long-term employment militates
against effective teams because employees working in teams need to feel that they are
in control of their workplace and their lives before they can develop the capacity for
effective cooperation.

How can workplaces become less stressful and more rewarding?

It is argued that when autonomy is devolved to teams many of the social aspects of
work are enriched, relationships are strengthened and social benefits flow. In contrast,
traditional, hierarchical organisations are controlled through rules and demarcations,
which tend to divide individuals and reduce opportunities to build trust and a sense of
belonging. One way employees have dealt with the constraints of traditional
organisations is through ritual, fantasy and storytelling. Sometimes subversive, these
practices have helped to build meaning in an otherwise sterile environment. The
traditional bureaucratic organisation has no legitimate place for fantasy or play.
Bolman and Deal recognise the role of playfulness in the construction of shared
meanings in organisations:
If we try to banish play, ritual, ceremony, and myth, we will destroy
teamwork, not enhance it. Symbolic activity can be functional as well
as expressive because of their ability to provide internal meaning and
promote external faith and confidence. (1992, p. 43)

Organisations that provide flexibility and autonomy as part of their team

construct can release creativity through playfulness. When people are able to utilise
play and fantasy they are more likely to draw upon a broader range of skills and
emotions, thus fulfilling their personal needs while working and also satisfying the
organisation’s needs for creative solutions to problems. Workplace design can also
encourage fun while improving productivity. IBM’s new e-business innovation centre
in Sydney has a campus-style design focused on fostering teams (Ross, 2000). It is the
largest fully integrated voice and data wireless computing site in Australia with
workstations which can be re-arranged on a daily basis. The desks are shaped like
jelly beans, silver fitballs can be used in place of chairs, filing cabinets have padded
tops to act as seats—all features designed to foster communication. The emphasis on
such new office design is to move the culture towards supporting teamwork and
collaboration. Kitchens are never tucked away but are transformed into café-style
meeting places.

Do you think you would be more or less productive in this collaborative style of
workplace? Why?
Advocates of teamwork argue that teams can provide a more rewarding working
environment for employees, together with a range of organisational benefits. The sorts
of benefits cited include a complementary mix of skills and experiences that are likely
to exceed those of any individual in the group. This combination is likely to lead to
improvements in work methods and processes, service and product quality, and
productivity. Teams are said to provide a unique social dimension in the workplace
which leads to a greater appreciation of the meaning of work and the effort brought to
bear upon it until team performance becomes its own reward (Katzenbach and Smith,
1993).
 Teams have been implemented for the purposes of establishing quality
processes in many Australian organisations. Oakland and Sohal (1996) describe the
experience of Nally (WA) which is a small organisation with about 60 employees.
The benefits of a team approach to TQM at Nally included more interesting jobs;
workers were more involved with the company and had an increased awareness of
things that might be improved; teamwork provided opportunities to speak about work-
related issues; workers learnt about machinery, tasks and processes and developed
confidence as individuals in team settings; and workers had an appreciation of the
value of measurement rather than guesswork (Oakland & Sohal, 1996).
The emphasis placed on teamwork style can vary dramatically from one
company to another. In some companies the focus on human resource management
results in good relationships, cooperation and autonomy as the primary forces behind
team development. In others efficiency, heightened control and fear are the drivers.
The failure rate of teams continues to be high. Managers and employees must craft
teams into being. It seems only logical that individual teams are progressed or
constrained by broader organisational factors, particularly employee empowerment,
effective communication, a culture of collaboration and sound leadership.

Reading
Bartol, K, Martin, D, Tein, M and Matthews, G, 2001, Management: A Pacific Rim
Focus, 3rd Edn, McGraw-Hill, Sydney.

Bolman, L and Deal, T E, 1992, Reframing Organisations, Artistry, Choice and

Leadership, Jossey Bass, San Francisco.

Thompson, Leigh, 2000, Making the Team: A Guide for Managers, Prentice Hall,
New Jersey.

Mayo, E, 1945, The Social Problems of an Industrial Civilization, Harvard University,

Boston, Massachusetts.

Oakland, J S and Sohal, A S, 1996, Total Quality Management, Pacific Rim Edition,
Butterworth-Heinemann, Australia.

Katzenbach, J R and Smith, D K, 1993, The Wisdom of Teams, Harvard Business

School, Boston, Massachusetts.
Ross, E, 2000, ‘Workplace Branding’, Business Review Weekly, December 15, pp.
94–96.

Websites

www.teamworkcenter.com The European Teamwork Center was established in

1996, The European Year of Training and Education.
The aim of this institution is to provide the tools and
guidance related to “Learning to work as a Team, by
means of the training of those responsible for the
promotion of teamwork within organisations”.

www.woodbagot.com.au Web site of the design firm Woods Bagot, designers of

Arthur Andersen’s new Sydney head office.

www.cornell.edu Site for the College of Human Ecology at Cornell

University, New York.
Globalisation Issue No. 2
Key words: globalisation, diversity, global teams, knowledge management

Mario Vargas Llosa, writing in The Age of 24 February 2001, argues that
modernisation, rather than globalisation, is the reason for a progressive loss of cultural
diversity across the world. Bartol et al (2001) define globalisation as a strategy aimed
at developing relatively standardised products with global appeal, as well as
rationalising operations across the world (p 621). Multinationals have pursued this
strategy successfully with the most notable example being Coca-Cola. The strongest
arguments against globalisation are related to social, ethical and cultural issues.
Protestors object to their accepted ways of life being invaded by multi-nationals such
as McDonald’s, KFC, American popular music, clothing brands such as Nike,
Hollywood movies and American TV. People see their corner stores disappearing,
their favourite brands being taken over by multinationals and much of what has
seemed familiar in the market place has gone. Consumers often feel angry and
disenfranchised about the steady infiltration of new products and new companies. The
prevailing view of globalisation—as the sale of products which can be used around
the globe with little alteration of specifications—may need to be revised. Groups such
as S11 are exerting consumer and political pressure. Coca-Cola is sold in 150
countries and is recognisable in each country but there are limits to the number of
products which are suitable to true globalisation.

Do you have an emotional relationship with the products you buy? How much of
the loyalty you feel towards a product is due to cultural factors? How can
managers respond effectively to these emotions?

Vargas Llosa argues that globalisation extends radically to all citizens of this planet
the possibility to construct their individual cultural identities through voluntary
action, according to their preferences and intimate motivations. Even after 50 years
of totalitarian rule, and religious and cultural repression of the countries which were
part of the USSR, local cultures in these places are now blooming. The lifestyle,
opportunities and aspirations of these peoples have changed across the ensuing 50
years, but their cultures have survived. Vargas Llosa says, ‘Contrary to the warnings
of those who fear globalisation, it is not easy to completely erase cultures, however
small they may be, if behind them is a rich tradition and people who practise them,
even if in secret’.

Managers wishing to learn from these lessons need to understand the need for the
preservation of diversity in all of its forms. Here, in Australia, where 49% of the
population were either born overseas or have at least one parent born overseas, we
have a rich opportunity to build understandings of cultural diversity into the way we
manage. The companies that succeed long-term in the global marketplace will
understand the centralising and homogenising pressures of globalisation. Whether
they are dealing with environmental, economic, social or cultural issues, they will
increasingly have to see themselves as custodians of global diversity. In Australia this
has already meant expanded markets for some companies. Innovative ideas from a
diverse workforce have lead to the manufacture and export of double-handle
saucepans to Asia, culturally sensitive meals for international airlines and improved
tourism marketing to overseas countries.

To operate successfully in a global market, companies must devise new ways to

develop trust in relationships that extend across traditional boundaries. This will
require a new set of core competencies for knowledge workers. The fundamental
understanding that good managers are excellent communicators will be expanded to
encompass communication across cultures.

What is your cultural background? How could your cultural skills be used to
improve your performance as a manager?

Knowledge Management

Most senior executives think that knowledge management is reliant upon

sophisticated information technology. The types of technology which spring to mind
include data mining, intranets, video conferencing and web casting. However, Tom
Davenport and Larry Prusak (see the interview at
www.brint.com/km/davenport/working.htm) suggest that companies shouldn’t spend
more than a third of their time thinking about technology for knowledge management.
The other two-thirds of their time should be spent considering culture, organisational
roles and responsibilities, focusing on knowledge content. Knowledge works across
networks of people and these have to be nourished if you want to manage knowledge.
Once human communities are working well within companies and wider networks,
you can start applying technology to facilitate the capture and sharing of knowledge.
Unlike information, knowledge is embedded in people and knowledge creation occurs
in the process of social interactions. In global organisations virtual teams comprise of
members who rarely meet, they interact through different forms of communication
media—such as, phones, e-mail and video conferencing. The challenges for virtual
teams are much greater as the usual interpersonal chemistry, which can make teams
thrive, is much harder to generate.

For challenging tasks, a degree of diversity in a group is useful. If the group members
are too homogenous, the team may get along well and have a good time working
together but they are likely to have a limited range of perspectives and, therefore, find
it difficult to generate new ideas (Bartol, et al, 2001, p 461). Group members with a
diversity of personalities, gender, ethnicity, experience, skills and background tend to
be more creative and tend to make better decisions. While Australian companies are
aware of the diversity of their workforces they have been slow to invest in knowledge.
David Karpin, co-author of the 1995 Karpin Report into management and leadership
in Australia, believes that Australian companies are too concerned with reducing costs
to create efficiencies rather than thinking about investing in knowledge (James,
February 23, 2001, p 78, Business Review Weekly).

How do you manage knowledge? Can you think of any knowledge networks that
you are a part of? Perhaps you study with a group of fellow students. Think of
the knowledge exchange which takes place here—how valuable is that to you?

We are all knowledge managers of one kind or another. Think of your own networks
of friends and colleagues. If you want to share ideas or information you first think of
what it is you want to share and who you will share it with—you then consider how
you will share it. It’s quick and easy to use email to attach documents or material
from the Web; hence, technology becomes useful. The same principles apply in the
workplace. Managers and workers need to focus on building teams of people who rely
upon each other to share knowledge. The decision about what technology to use
should be driven by the needs of the team.

Much of a company’s most valuable knowledge is tacit—that is, it’s held in the minds
of employees. The type of approach being adopted in companies that are successfully
tapping into tacit knowledge is dependent upon the nurturing of improved inter-
personal relationships. This can be managed among global companies as well as small
local companies. Business Review Weekly’s March 2 edition reports on the success of
one global manufacturing company which assigned product developers to supervise
the production of modules they had designed. This program opened lines of
communication between assembly line employees and developers; thus, establishing
continuing relations between the groups and building the exchange of tacit knowledge
between them. Within five years the program helped to contribute to a cut in
production costs by 15% and throughput time by 80% (Hauschild, March 2, 2001, p
66, Business Review Weekly).

The global management firm McKinsey & Company has been an innovator in the
knowledge management field. In 1987 McKinsey launched a knowledge-management
product designed to build a common database of knowledge accumulated from client
work. From this project came three important tools: a database of client projects, a
database of 2000 documents, and a list of specialists and key document titles
(Schmidt, February 23, 2001, p 84, Business Review Weekly). In creating a knowledge
focus the company’s culture has been changed. John Stuckey, the managing partner,
says ‘Sharing knowledge is deeply embedded ... it is just totally expected, that is what
you do’. (Schmidt, February 23, 2001, p 82, Business Review Weekly).

Globalisation will force Australian companies to focus more attention on knowledge

workers and knowledge management. Multinationals operating in Australia have
demonstrated that investments in knowledge are becoming the key to maintaining
competitive advantage. Superior use of knowledge is essential to their survival. The
focus in most local Australian companies has been on controlling costs and
maintaining market share (James, February 23, 2001, p 77, Business Review Weekly).
In a global economy where change occurs so rapidly, plant and equipment become
obsolete very quickly. In an economy which is increasingly dependent upon services
and intangibles, knowledge becomes the key to competitive advantage.

Consider the ways in which Australian managers could utilise the strengths of
Australia’s cultural diversity to build workplace teams to foster innovation and
knowledge management.

References:

Bartol K, Martin D, Tein M and Matthews G, 2001, Management A Pacific Rim

Focus, 3rd Ed, McGraw Hill, Sydney. (Chapter 15 and Chapter 18)
Hauschild Susanne, Licht Thomas and Stein Wolfram, 2001, ‘Knowledge must be
Spread Around’, Business Review Weekly, March 2, Vol 23, No 8, pp 66–70.

James David, 2001, ‘Knowledge in Action’, Business Review Weekly, February 23,
Vol 22, No 7, pp 77–78.

Schmidt Lucinda, 2001, ‘Collective Wisdom: the word spread’, Business Review
Weekly, February 23, Vol 22, No 7, pp 82–84.

Vargas Llosa Mario, 2001, ‘Global Good’, The Age, February 24, Extra 2.

http://www.brint.com
Knowledge management

http://www.brint.com/km/davenport/working.htm
Working knowledge: How organisations manage what they do.

Dr Stephanie Miller
Senior Lecturer, School of Management, Victoria University, Australia.